[Federal Register Volume 77, Number 60 (Wednesday, March 28, 2012)]
[Rules and Regulations]
[Pages 18671-18679]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-7358]
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Rules and Regulations
Federal Register
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Federal Register / Vol. 77, No. 60 / Wednesday, March 28, 2012 /
Rules and Regulations
[[Page 18671]]
DEPARTMENT OF EDUCATION
2 CFR Part 3485
34 CFR Parts 77, 85, 668, and 682
[Docket ID ED-2012-OS-0007]
RIN 1890-AA17
Implementation of OMB Guidance on Nonprocurement Debarment and
Suspension
AGENCY: Department of Education.
ACTION: Final regulations and request for technical comments.
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SUMMARY: The Secretary of the Department of Education (Department)
establishes a new part in 2 CFR that adopts the Office of Management
and Budget's (OMB's) guidance, as supplemented by this new part, as the
Department's regulations for nonprocurement debarment and suspension.
The Secretary removes regulations that contain the Department's current
implementation of the Governmentwide common rule on nonprocurement
debarment and suspension. The Secretary also amends regulations to
correct citations as appropriate. The new part will serve the same
purposes as, and is substantively identical to, the nonprocurement
suspension and debarment common rule published in the Federal Register
on November 26, 2003.
On August 31, 2005, OMB established interim final guidance that was
substantively identical to the common rule and directed Federal
agencies to adopt those guidelines as regulations. On November 15,
2006, OMB published final guidance.
These final regulations adopt the OMB guidance as regulations of
the Department. In addition, the Department adds those requirements
that describe how the Department implements suspension and debarment
requirements in the context of Title IV of the Higher Education Act of
1965, as amended (HEA). This regulatory action is an administrative
simplification that makes no substantive change in the Department's
policy or procedures for nonprocurement debarment and suspension. We do
not intend any substantive changes to the Department's debarment and
suspension regulations. To be sure we achieved that objective, we ask
for technical comments about whether the new regulations are
substantively different than the existing regulations.
DATES: These final regulations are effective April 27, 2012. In order
for us to consider your comments, we must receive them on or before
April 27, 2012.
ADDRESSES: Submit your comments through the Federal eRulemaking Portal
or via postal mail, commercial delivery, or hand delivery. We will not
accept comments by fax or by email. To ensure that we do not receive
duplicate copies, please submit your comments only one time. In
addition, please include the Docket ID and the term ``Nonprocurement
Debarment and Suspension'' at the top of your comments.
Federal eRulemaking Portal: Go to www.regulations.gov to
submit your comments electronically. Information on using
Regulations.gov, including instructions for accessing agency documents,
submitting comments, and viewing the docket, is available on the site
under ``How To Use This Site.''
Postal Mail, Commercial Delivery, or Hand Delivery. If you
mail or deliver your comments about the final regulations, address them
to Alfreida Pettiford, U.S. Department of Education, 400 Maryland
Avenue SW., Room 7100, Potomac Center Plaza, Washington, DC 20202-2550.
Privacy Note: The Department's policy for comments
received from members of the public (including comments submitted by
mail, commercial delivery, or hand delivery) is to make these
submissions available for public viewing in their entirety on the
Federal eRulemaking Portal at www.regulations.gov. Therefore,
commenters should be careful to include in their comments only
information that they wish to make publicly available on the Internet.
FOR FURTHER INFORMATION CONTACT: Alfreida Pettiford, U.S. Department of
Education, 400 Maryland Avenue SW., Room 7100, Potomac Center Plaza,
Washington, DC 20202-2550. Telephone: (202) 245-6110.
If you use a telecommunications device for the deaf (TDD), call the
Federal Relay Service (FRS), toll-free, at 1-800-877-8339.
Individuals with disabilities may obtain this document in an
accessible format (e.g., braille, large print, audiotape, or compact
disc) on request to the contact person listed in this section.
SUPPLEMENTARY INFORMATION:
Invitation to Comment: We invite you to submit comments regarding
these final regulations to assist us in complying with the specific
requirements of Executive Order 12866 and Executive Order 13563 and
their overall requirement of reducing regulatory burden that might
result from these final regulations.
During and after the comment period, you may inspect all public
comments about this regulatory action by accessing Regulations.gov. You
may also inspect the public comments in person at the Department of
Education, 550 12th Street SW., Room 7100, Washington, DC, between the
hours of 8:30 a.m. and 4 p.m., Washington, DC time, Monday through
Friday of each week except Federal holidays.
Assistance to Individuals With Disabilities in Reviewing the
Rulemaking Record: On request, we will provide an appropriate
accommodation or auxiliary aid to an individual with a disability who
needs assistance to review the comments or other documents in the
public rulemaking record for these regulations. If you want to schedule
an appointment for this type of accommodation or auxiliary aid, please
contact the person listed under FOR FURTHER INFORMATION CONTACT.
Background
In 2003, the Department joined with 32 other agencies to revise the
nonprocurement debarment and suspension regulations that these agencies
had adopted jointly in 1998. See 68 FR 66534 (November 26, 2003). The
regulations that the agencies adopted were referred to as ``the common
rule.''
[[Page 18672]]
On November 15, 2006, the Office of Management and Budget (OMB)
issued final guidance for Governmentwide nonprocurement suspension and
debarment (71 FR 66431). This guidance, located in 2 CFR part 180, is
substantively the same as the common rule, but is published in a form
that each agency can adopt, thus eliminating the need for each agency
to publish a separate version of the same rule. The guidance also makes
it possible to update Governmentwide requirements without each agency
having to re-promulgate its own rules.
The Department's current regulations on nonprocurement debarment
and suspension are found in 34 CFR part 85. In accordance with OMB's
guidance, these final regulations establish the Department's
nonprocurement debarment and suspension regulations in subtitle B of
title 2 of the CFR. The new 2 CFR part 3485 adopts the OMB guidelines
with the same additions and clarifications that the Department made to
the Governmentwide common rule on this subject issued on November 26,
2003 (68 FR 66609). The substance of the Department's nonprocurement
debarment and suspension regulations is unchanged.
These final regulations remove 34 CFR part 85 from the CFR, which
is the current location for the Department's nonprocurement debarment
and suspension regulations. We also amend the definition of EDGAR in 34
CFR part 77 to remove the reference to part 85.
Finally, these final regulations amend 34 CFR parts 668 and 682 to
update cross references to the debarment and suspension regulations in
2 CFR parts 180 and 3485.
Waiver of Rulemaking
Under the Administrative Procedure Act (APA) (5 U.S.C. 553), the
Department is generally required to publish a notice of proposed
rulemaking and provide the public with an opportunity to comment on
proposed regulations prior to establishing a final rule.
However, we are waiving the notice-and-comment rulemaking
requirements under the APA. Section 553(b) of the APA provides that an
agency is not required to conduct notice-and-comment rulemaking when
the agency for good cause finds that notice and public procedure
thereon are impracticable, unnecessary, or contrary to the public
interest. The Secretary has determined that it is unnecessary to
conduct notice-and-comment rulemaking because these regulatory
amendments to 2 CFR are an administrative simplification that do not
make substantive changes to the Department's policy or procedures for
nonprocurement debarment and suspension. The Department is therefore
publishing the revisions as final regulations and not as proposed
regulations.
Nonetheless, because we intend the new part to make no changes in
current policies and procedures, we specifically invite comments on any
unintended changes in substantive content that the new 2 CFR part 3485
would make relative to the November 2003 common rule published by the
Department on November 26, 2003 (68 FR 66534, 66609-66615).
If the Department receives comments that result in any changes to
the final regulation, we will make timely publication of those changes
in the Federal Register.
Adoption of OMB Guidance
We add Sec. 3485.12 to adopt the OMB guidance on suspension and
debarment. Section 3485.12(a) adopts subparts A through I of the
guidance in 2 CFR part 180 as a regulation of the Department.
The Department's current debarment and suspension regulations in 34
CFR part 85 contain additional requirements that must be met to make
debarment and suspension actions taken by the Department or other
agencies apply to participants in the programs authorized under title
IV of the HEA. These final regulations place those same modifications
in 2 CFR part 3485 so that debarment and suspension actions can be
applied to participants in title IV HEA programs. In each section of
these final regulations that adopt a requirement in the OMB guidance
that must be modified, the section restates the standard OMB guidance
and adds one or more paragraphs that contain the needed changes.
General Education Provisions Act Requirements
Section 437(b) of the General Education Provisions Act (GEPA)
requires that immediately following each substantive provision of the
Department's regulations, the Department must provide the citations to
the particular section or sections of statutory law or other legal
authority on which that provision is based. The substantive provision
in these final regulations that adopts the guidance in 2 CFR part 180
is 2 CFR 3485.12. Because the authority citations for all of the
sections adopted by the Department are the same, the Department
provides the authority citation for all of the adopted guidance in
paragraph (d) of Sec. 3485.12. Other sections in part 3485 that
supplement the guidance in part 180 or relate to the effectiveness of
debarment and suspension actions against participants in the title IV,
HEA programs list the authority citations for those sections at the end
of each of those sections.
Executive Orders 12866 and 13563
OMB has determined these regulations to be a non-significant
regulatory action for the purposes of Executive Order 12866. We have
also determined that this regulatory action does not unduly interfere
with State, local, and tribal governments in the exercise of their
governmental functions. Finally, we have reviewed these regulations
under Executive Order 13563, which supplements and explicitly reaffirms
the principles, structures, and definitions governing regulatory review
established in Executive Order 12866. In accordance with both Executive
orders, the Department has assessed the potential costs and benefits of
this regulatory action. As this regulatory action is a recodification
of existing regulations without substantive change, the potential costs
associated with this regulatory action are only those that result from
existing statutory requirements and those we have determined as
necessary for administering the Department's programs and activities.
Regulatory Flexibility Act Certification
The Secretary certifies that this regulatory action will not have a
significant adverse impact on a substantial number of small entities.
The Secretary makes this certification because the action recodifies
existing regulations without substantive change.
Paperwork Reduction Act of 1995
This regulatory action will not impose any additional reporting or
recordkeeping requirements under the Paperwork Reduction Act of 1995.
Federalism (Executive Order 13132)
This regulatory action does not have Federalism implications, as
set forth in Executive Order 13132. It will not have substantial direct
effects 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.
Assessment of Educational Impact
In accordance with section 444 of the General Education Provisions
Act (GEPA), 20 U.S.C. 1221e-4, when the
[[Page 18673]]
Department published the notice of proposed rulemaking for the
debarment and suspension common rule on January 23, 2002 (67 FR 3272
and 3328), we requested comments on whether those proposed regulations
would require transmission of information that any other agency or
authority of the United States gathers or makes available.
We did not receive any comments in response to that request and,
based on our own review, have determined that these final regulations
do not require such a transmission of information.
Electronic Access to This Document: The official version of this
document is the document published in the Federal Register. Free
Internet access to the official edition of the Federal Register is
available via the Federal Digital System at http://www.gpo.gov/fdsys.
At this site you can view this document, as well as all other documents
of this Department published in the Federal Register, in text or Adobe
Portable Document Format (PDF). To use PDF you must have Adobe Acrobat
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You may also access documents of the Department published in the
Federal Register by using the article search feature at http://www.federalregister.gov. Specifically, through the advanced search
feature at this site, you can limit your search to documents published
by the Department.
(Catalog of Federal Domestic Assistance Number does not apply.)
List of Subjects
2 CFR Part 3485
Administrative practice and procedure, Debarment and suspension,
Grant programs, Loan programs, Reporting and recordkeeping
requirements.
34 CFR Part 77
Definitions, Education Department, Grant programs--education.
34 CFR Part 85
Administrative practice and procedure, Debarment and suspension,
Drug abuse, Grant programs, Loan programs, Reporting and recordkeeping
requirements.
34 CFR Part 668
Administrative practice and procedure, Colleges and universities,
Consumer protection, Grant programs--education, Loan programs--
education, Reporting and recordkeeping requirements, Student aid.
34 CFR Part 682
Administrative practice and procedure, Colleges and universities,
Education, Loan programs--education, Reporting and recordkeeping
requirements, Student aid, Vocational education.
Dated: March 22, 2012.
Arne Duncan,
Secretary of Education.
For the reasons discussed in the preamble, under the authority of
20 U.S.C. 1221e-3 and 3474, the Secretary amends Title 2, subtitle B,
and Title 34, parts 77, 85, 668, and 682 of the Code of Federal
Regulations as follows:
Title 2--Grants and Agreements
0
1. Add Chapter XXXIV, consisting of part 3485, to Subtitle B of Title 2
to read as follows:
Chapter XXXIV--Department of Education
PART 3485--NONPROCUREMENT DEBARMENT AND SUSPENSION
3485.12 What does this part do?
3485.22 Does this part apply to me?
3485.32 What policies and procedures must I follow?
Subpart A--General
3485.137 May the Department grant an exception to let an excluded
person participate in a covered transaction?
Subpart B--Covered Transactions
3485.220 Are any procurement contracts included as covered
transactions?
Subpart C--Responsibilities of Participants Regarding Transactions
3485.310 What must I do if a Federal agency excludes a person with
whom I am already doing business in a covered transaction?
3485.315 May I use the services of an excluded person as a principal
under a covered transaction?
3485.330 What methods must I use to pass requirements down to
participants at lower tiers with whom I intend to do business?
Subpart D--Responsibilities of the Department's Officials Regarding
Transactions
3485.415 What must I do if a Federal agency excludes the participant
or a principal after I enter into a covered transaction?
3485.437 What method do I use to communicate to a participant the
requirements described in Sec. 180.435 of this title?
Subpart E--[Reserved]
Subpart F--General Principles Relating to Suspension and Debarment
Actions
3485.611 What procedures do we use for a suspension or debarment
action involving title IV, HEA transactions?
3485.612 When does an exclusion by another agency affect the ability
of the excluded person to participate in a title IV, HEA
transaction?
Subpart G--Suspension
3485.711 When does a suspension affect title IV, HEA transactions?
Subpart H--Debarment
3485.811 When does a debarment affect title IV, HEA transactions?
Subpart I--Definitions
3485.937 ED Deciding Official.
3485.952 HEA.
3485.995 Principal.
3485.1016 Title IV, HEA participant.
3485.1017 Title IV, HEA program.
3485.1018 Title IV, HEA transaction.
Subpart J--[Reserved]
Appendix A to Part 3485--Covered Transactions
Authority: E.O. 12549 (3 CFR 1986 Comp., p. 189); E.O. 12689 (3
CFR 1989 Comp., p. 235); sec. 2455, Pub. L. 103-355, 108 Stat. 3327
(31 U.S.C. 6101 note); 20 U.S.C. 1082, 1094, 1221e-3, and 3474,
unless otherwise noted.
Sec. 3485.12 What does this part do?
(a)(1) The Department of Education (the ``Department'' or ``ED'')
adopts subparts A through I of the Office of Management and Budget
guidance in 2 CFR part 180. Thus, this part gives regulatory effect to
the OMB guidance and supplements the guidance as needed for the
Department. This part satisfies the requirements in section 3 of
Executive Order 12549, ``Debarment and Suspension'' (3 CFR part 1986
Comp., p. 189), Executive Order 12689, ``Debarment and Suspension'' (3
CFR part 1989 Comp., p. 235) and 31 U.S.C. 6101 note (Section 2455,
Pub. L. 103-355, 108 Stat. 3327).
(2) The table of contents for this part contains only those
sections in part 3485 that include supplements to the guidance in part
180 and new sections needed to implement the guidance for the
Department's programs. In those sections of the OMB guidance that are
supplemented, the section in part 3485 includes both the text of the
OMB guidance that is not affected by the change and any additional
paragraphs that need to be added to the OMB guidance. For example,
Sec. 180.220 of this title contains only paragraphs (a) and (b). The
text of Sec. 3485.220, which supplements Sec. 180.220 to extend
lower-tier transactions to certain transactions below the primary tier,
includes both the text of paragraph (a) and (b) of Sec. 180.220 and
the text of added paragraph (c).
(3) In those sections in part 180 that do not have paragraph
designations and that the Department supplements, the
[[Page 18674]]
section in this part implementing the OMB guidance designates the
undesignated paragraph from part 180 as paragraph (a) and the first
supplemental paragraph as paragraph (b). For example, 2 CFR 180.330
includes an undesignated lead in paragraph and two subparagraphs
designated (a) and (b). In Sec. 3485.330, the undesignated paragraph
in 2 CFR 180.330 is designated paragraph (a) and the two subparagraphs
are designated paragraphs (1) and (2). The added paragraphs are
designated paragraph (b) and (c).
(b) The authority for all the provisions in 2 CFR part 180 as
adopted in this part is listed as follows.
Authority: E.O. 12549 (3 CFR 1986 Comp., p. 189); E.O. 12689 (3
CFR 1989 Comp., p. 235); sec. 2455, Pub. L. 103-355, 108 Stat. 3327
(31 U.S.C. 6101 note); 20 U.S.C. 1082, 1094, 1221e-3, and 3474.
(Authority: E.O. 12549 (3 CFR 1986 Comp., p. 189); E.O. 12689 (3 CFR
1989 Comp., p. 235); sec. 2455, Pub. L. 103-355, 108 Stat. 3327 (31
U.S.C. 6101 note); 20 U.S.C. 1082, 1094, 1221e-3, and 3474, unless
otherwise noted.)
Sec. 3485.22 Does this part apply to me?
This part applies to you if you are--
(a) A participant or principal in a ``covered transaction'' (see
subpart B of this part and the definition of ``nonprocurement
transaction'' in Sec. 180.970 of this title).
(b) A respondent in a suspension or debarment action of the
Department.
(c) An ED deciding official; or
(d) An ED officer authorized to enter into any type of
nonprocurement transaction that is a covered transaction.
(Authority: E.O. 12549 (3 CFR 1986 Comp., p. 189); E.O. 12689 (3 CFR
1989 Comp., p. 235); sec. 2455, Pub. L. 103-355, 108 Stat. 3327 (31
U.S.C. 6101 note); 20 U.S.C. 1082, 1094, 1221e-3, and 3474)
Sec. 3485.32 What policies and procedures must I follow?
The Department's policies and procedures that you must follow are
the policies and procedures specified in this part and in Subparts A
through I of 2 CFR part 180. The contracts that are covered
transactions, for example, are specified in Sec. 3485.220. Section
180.205 of this title does not require supplementation, so it is not
included in the table of contents for this part and is not separately
stated in this part.
(Authority: E.O. 12549 (3 CFR 1986 Comp., p. 189); E.O. 12689 (3 CFR
1989 Comp., p. 235); sec. 2455, Pub. L. 103-355, 108 Stat. 3327 (31
U.S.C. 6101 note); 20 U.S.C. 1082, 1094, 1221e-3, and 3474)
Subpart A--General
Sec. 3485.137 May the Department grant an exception to let an
excluded person participate in a covered transaction?
(a) Yes, the Secretary delegates to the ED Deciding Official the
authority under this section to grant an exception permitting an
excluded person to participate in a particular covered transaction.
(b) If the ED Deciding Official grants an exception, the exception
must be in writing and state the reason(s) for deviating from the
Governmentwide policy in Executive Order 12549.
(Authority: E.O. 12549 (3 CFR 1986 Comp., p. 189); E.O. 12689 (3 CFR
1989 Comp., p. 235); sec. 2455, Pub. L. 103-355, 108 Stat. 3327 (31
U.S.C. 6101 note); 20 U.S.C. 1082, 1094, 1221e-3, and 3474)
Subpart B--Covered Transactions
Sec. 3485.220 Are any procurement contracts included as covered
transactions?
(a) Covered transactions under this part--
(1) Do not include any procurement contracts awarded directly by a
Federal agency; but
(2) Do include some procurement contracts awarded by non-Federal
participants in nonprocurement covered transactions.
(b) Specifically, a contract for goods or services is a covered
transaction if any of the following applies:
(1) The contract is awarded by a participant in a nonprocurement
transaction that is covered under Sec. 180.210 of this title, and the
amount of the contract is expected to equal or exceed $25,000.
(2) The contract requires the consent of an official of a Federal
agency. In that case, the contract, regardless of the amount, always is
a covered transaction, and it does not matter who awarded it. For
example, it could be a subcontract awarded by a contractor at a tier
below a nonprocurement transaction, as shown in the Appendix To Part
3485--Covered Transactions.
(3) The contract is for Federally-required audit services.
(4) The contract is to perform services as a third party servicer
in connection with a title IV, HEA program.
(c) In addition to the contracts covered under 2 CFR 180.220(b) of
the OMB guidance, this part applies to any contract, regardless of
tier, that is awarded by a contractor, subcontractor, supplier,
consultant, or its agent or representative in any transaction, if the
contract is to be funded or provided by ED under a covered
nonprocurement transaction and the amount of the contract is expected
to equal or exceed $25,000. This extends the coverage of the ED
nonprocurement suspension and debarment requirements to all lower tiers
of subcontracts under covered nonprocurement transactions, as permitted
under the OMB guidance at 2 CFR 180.220(c) (see optional lower tier
coverage in the figure in Appendix A to Part 3485--Covered
Transactions).
(Authority: E.O. 12549 (3 CFR 1986 Comp., p. 189); E.O. 12689 (3 CFR
1989 Comp., p. 235); sec. 2455, Pub. L. 103-355, 108 Stat. 3327 (31
U.S.C. 6101 note); 20 U.S.C. 1082, 1094, 1221e-3, and 3474)
Subpart C--Responsibilities of Participants Regarding Transactions
Sec. 3485.310 What must I do if a Federal agency excludes a person
with whom I am already doing business in a covered transaction?
(a) You as a participant may continue covered transactions with an
excluded person if the transactions were in existence when the agency
excluded the person. However, you are not required to continue the
transactions, and you may consider termination. You should make a
decision about whether to terminate and the type of termination action,
if any, only after a thorough review to ensure that the action is
proper and appropriate.
(b) You may not renew or extend covered transactions (other than
no-cost time extensions) with any excluded person, unless another
Federal agency responsible for the transaction grants an exception
under Sec. 180.135 of this title or ED grants an exception under Sec.
3485.137.
(c) If you are a title IV, HEA participant, you may not continue a
title IV, HEA transaction with an excluded person after the effective
date of the exclusion unless permitted by 34 CFR 668.26, 682.702, or
668.94, as applicable.
(Authority: E.O. 12549 (3 CFR 1986 Comp., p. 189); E.O. 12689 (3 CFR
1989 Comp., p. 235); sec. 2455, Pub. L. 103-355, 108 Stat. 3327 (31
U.S.C. 6101 note); 20 U.S.C. 1082, 1094, 1221e-3, and 3474)
Sec. 3485.315 May I use the services of an excluded person as a
principal under a covered transaction?
(a) You as a participant may continue to use the services of an
excluded person as a principal under a covered transaction if you were
using the services of that person in the transaction before the person
was excluded. However, you are not required to continue using that
person's services as a principal. You should make a decision about
whether to discontinue that person's services only after a thorough
[[Page 18675]]
review to ensure that the action is proper and appropriate.
(b) You may not begin to use the services of an excluded person as
a principal under a covered transaction unless another Federal agency
responsible for the transaction grants an exception under Sec. 180.135
of this title or, if ED took the action, an ED deciding official grants
an exception under Sec. 3485.137.
(c) If you are a title IV, HEA participant--
(1) You may not renew or extend the term of any contract or
agreement for the services of an excluded person as a principal with
respect to a title IV, HEA transaction; and
(2) You may not continue to use the services of that excluded
person as a principal under this kind of an agreement or arrangement
more than 90 days after you learn of the exclusion or after the close
of the Federal fiscal year in which the exclusion takes effect,
whichever is later.
(Authority: E.O. 12549 (3 CFR 1986 Comp., p. 189); E.O. 12689 (3 CFR
1989 Comp., p. 235); sec. 2455, Pub. L. 103-355, 108 Stat. 3327 (31
U.S.C. 6101 note); 20 U.S.C. 1082, 1094, 1221e-3, and 3474)
Sec. 3485.330 What methods must I use to pass requirements down to
participants at lower tiers with whom I intend to do business?
(a) Before entering into a covered transaction with a participant
at the next lower tier, you must require that participant to--
(1) Comply with this subpart as a condition of participation in the
transaction. You must do so using the method specified in paragraph (b)
of this section; and
(2) Pass the requirement to comply with this subpart to each person
with whom the participant enters into a covered transaction at the next
lower tier.
(b) To communicate the requirements in this part to a participant,
you must include a term or condition in the transaction that requires
the participant's compliance with part 180, subpart C, of this title,
as adopted at Sec. 3485.12, and requires the participant to include a
similar term or condition in lower-tier covered transactions.
(c) The failure of a participant to include a requirement to comply
with Subpart C of 2 CFR part 180 in the agreement with a lower tier
participant does not affect the lower tier participant's
responsibilities under this part.
(Authority: E.O. 12549 (3 CFR 1986 Comp., p. 189); E.O. 12689 (3 CFR
1989 Comp., p. 235); sec. 2455, Pub. L. 103-355, 108 Stat. 3327 (31
U.S.C. 6101 note); 20 U.S.C. 1082, 1094, 1221e-3, and 3474)
Subpart D--Responsibilities of the Department's Officials Regarding
Transactions
Sec. 3485.415 What must I do if a Federal agency excludes the
participant or a principal after I enter into a covered transaction?
(a) You as a Federal agency official may continue covered
transactions with an excluded person, or under which an excluded person
is a principal, if the transactions were in existence when the person
was excluded. You are not required to continue the transactions,
however, and you may consider termination. You should make a decision
about whether to terminate and the type of termination action, if any,
only after a thorough review to ensure that the action is proper.
(b) You may not renew or extend covered transactions (other than
no-cost time extensions) with any excluded person, or under which an
excluded person is a principal, unless you obtain an exception under
Sec. 3485.137.
(c) Title IV, HEA transactions. If you are a title IV, HEA
participant--
(1) You may not renew or extend the term of any contract or
agreement for the services of an excluded person as a principal with
respect to a title IV, HEA transaction; and
(2) You may not continue to use the services of that excluded
person as a principal under this kind of an agreement or arrangement
more than 90 days after you learn of the exclusion or after the close
of the Federal fiscal year in which the exclusion takes effect,
whichever is later.
(Authority: E.O. 12549 (3 CFR 1986 Comp., p. 189); E.O. 12689 (3 CFR
1989 Comp., p. 235); sec. 2455, Pub. L. 103-355, 108 Stat. 3327 (31
U.S.C. 6101 note); 20 U.S.C. 1082, 1094, 1221e-3, and 3474)
Sec. 3485.437 What method do I use to communicate to a participant
the requirements described in Sec. 180.435 of this title?
To communicate the requirements in this part to a participant, you
must include a term or condition in the transaction that requires the
participant's compliance with part 180, subpart C, of this title, as
adopted at Sec. 3485.12 and requires the participant to include a
similar term or condition in lower-tier covered transactions.
(Authority: E.O. 12549 (3 CFR 1986 Comp., p. 189); E.O. 12689 (3 CFR
1989 Comp., p. 235); sec. 2455, Pub. L. 103-355, 108 Stat. 3327 (31
U.S.C. 6101 note); 20 U.S.C. 1082, 1094, 1221e-3, and 3474)
Subpart E--[Reserved]
Subpart F--General Principles Relating to Suspension and Debarment
Actions
Sec. 3485.611 What procedures do we use for a suspension or debarment
action involving a title IV, HEA transaction?
(a) If we suspend a title IV, HEA participant under Executive Order
12549, we use the following procedures to ensure that the suspension
prevents participation in title IV, HEA transactions:
(1) The notification procedures in Sec. 180.715 of this title.
(2) Instead of the procedures in Sec. Sec. 180.720 through 180.760
of this title, the procedures in 34 CFR part 668, subpart G, or 34 CFR
part 682, subpart D or G, as applicable.
(3) In addition to the findings and conclusions required by 34 CFR
part 668, subpart G, or 34 CFR part 682, subpart D or G, the suspending
official, and, on appeal, the Secretary determines whether there is
sufficient cause for suspension as explained in Sec. 180.700 of this
title.
(b) If we debar a title IV, HEA participant under E.O. 12549, we
use the following procedures to ensure that the debarment also
precludes participation in title IV, HEA transactions:
(1) The notification procedures in Sec. Sec. 180.805 and 180.870
of this title.
(2) Instead of the procedures in Sec. Sec. 180.810 through 180.885
of this title, the procedures in 34 CFR part 668, subpart G, or 34 CFR
part 682, subpart D or G, as applicable.
(3) On appeal from a decision debarring a title IV, HEA
participant, we issue a final decision after we receive any written
materials from the parties.
(4) In addition to the findings and conclusions required by 34 CFR
part 668, subpart G, or 34 CFR part 682, subpart D or G, the debarring
official, and, on appeal, the Secretary determines whether there is
sufficient cause for debarment as explained in Sec. 180.800 of this
title.
(Authority: E.O. 12549 (3 CFR 1986 Comp., p. 189); E.O. 12689 (3 CFR
1989 Comp., p. 235); sec. 2455, Pub. L. 103-355, 108 Stat. 3327 (31
U.S.C. 6101 note); 20 U.S.C. 1082, 1094, 1221e-3, and 3474)
Sec. 3485.612 When does an exclusion by another agency affect the
ability of the excluded person to participate in a title IV, HEA
transaction?
(a) If a title IV, HEA participant is debarred by another agency
under E.O. 12549, using procedures described in paragraph (d) of this
section, that party is not eligible to enter into title IV, HEA
[[Page 18676]]
transactions for the duration of the debarment.
(b)(1) If a title IV, HEA participant is suspended by another
agency under E.O. 12549 or under a proposed debarment under the Federal
Acquisition Regulation (FAR) (48 CFR part 9, subpart 9.4), using
procedures described in paragraph (d) of this section, that party is
not eligible to enter into title IV, HEA transactions for the duration
of the suspension.
(2)(i) The suspension of title IV, HEA eligibility as a result of
suspension by another agency lasts for at least 60 days.
(ii) If the excluded party does not object to the suspension, the
60-day period begins on the 35th day after that agency issues the
notice of suspension.
(iii) If the excluded party objects to the suspension, the 60-day
period begins on the date of the decision of the suspending official.
(3) The suspension of title IV, HEA eligibility does not end on the
60th day if--
(i) The excluded party agrees to an extension; or
(ii) Before the 60th day we begin a limitation or termination
proceeding against the excluded party under 34 CFR part 668, subpart G,
or part 682, subpart D or G.
(c)(1) If a title IV, HEA participant is debarred or suspended by
another Federal agency--
(i) We notify the participant whether the debarment or suspension
prohibits participation in title IV, HEA transactions; and
(ii) If participation is prohibited, we state the effective date
and duration of the prohibition.
(2) If a debarment or suspension by another agency prohibits
participation in title IV, HEA transactions, that prohibition takes
effect 20 days after we mail notice of our action.
(3) If the Department or another Federal agency suspends a title
IV, HEA participant, we determine whether grounds exist for an
emergency action against the participant under 34 CFR part 668, subpart
G, or part 682, subpart D or G, as applicable.
(4) We use the procedures in Sec. 3485.611 to exclude a title IV,
HEA participant excluded by another Federal agency using procedures
that did not meet the standards in paragraph (d) of this section.
(d) If a title IV, HEA participant is excluded by another agency,
we debar, terminate, or suspend the participant--as provided under this
part, 34 CFR part 668, or 34 CFR part 682, as applicable--if that
agency followed procedures that gave the excluded party--
(1) Notice of the proposed action;
(2) An opportunity to submit and have considered evidence and
argument to oppose the proposed action;
(3) An opportunity to present its objection at a hearing--
(i) At which the agency has the burden of persuasion by a
preponderance of the evidence that there is cause for the exclusion;
and
(ii) Conducted by an impartial person who does not also exercise
prosecutorial or investigative responsibilities with respect to the
exclusion action;
(4) An opportunity to present witness testimony, unless the hearing
official finds that there is no genuine dispute about a material fact;
(5) An opportunity to have agency witnesses with personal knowledge
of material facts in genuine dispute testify about those facts, if the
hearing official determines their testimony to be needed, in light of
other available evidence and witnesses; and
(6) A written decision stating findings of fact and conclusions of
law on which the decision is rendered.
(Authority: E.O. 12549 (3 CFR 1986 Comp., p. 189); E.O. 12689 (3 CFR
1989 Comp., p. 235); sec. 2455, Pub. L. 103-355, 108 Stat. 3327 (31
U.S.C. 6101 note); 20 U.S.C. 1082, 1094, 1221e-3, and 3474)
Subpart G--Suspension
Sec. 3485.711 When does a suspension affect title IV, HEA
transactions?
(a) A suspension under Sec. 3485.611(a) takes effect immediately
if the Secretary takes an emergency action under 34 CFR part 668,
subpart G, or 34 CFR part 682, subpart D or G, at the same time the
Secretary issues the suspension.
(b)(1) Except as provided under paragraph (a) of this section, a
suspension under Sec. 3485.611(a) takes effect 20 days after those
procedures are complete.
(2) If the respondent appeals the suspension to the Secretary
before the expiration of the 20 days under paragraph (b)(1) of this
section, the suspension takes effect when the respondent receives the
Secretary's decision.
(Authority: E.O. 12549 (3 CFR 1986 Comp., p. 189); E.O. 12689 (3 CFR
1989 Comp., p. 235); sec. 2455, Pub. L. 103-355, 108 Stat. 3327 (31
U.S.C. 6101 note); 20 U.S.C. 1082, 1094, 1221e-3, and 3474)
Subpart H--Debarment
Sec. 3485.811 When does a debarment affect title IV, HEA
transactions?
(a) A debarment under Sec. 3485.611(b) takes effect 30 days after
those procedures are complete.
(b) If the respondent appeals the debarment to the Secretary before
the expiration of the 30 days under paragraph (a) of this section, the
debarment takes effect when the respondent receives the Secretary's
decision.
(Authority: E.O. 12549 (3 CFR 1986 Comp., p. 189); E.O. 12689 (3 CFR
1989 Comp., p. 235); sec. 2455, Pub. L. 103-355, 108 Stat. 3327 (31
U.S.C. 6101 note); 20 U.S.C. 1082, 1094, 1221e-3, and 3474)
Subpart I--Definitions
Sec. 3485.937 ED Deciding Official.
The ED Deciding Official is an officer of the Department who has
delegated authority under the procedures of the Department of Education
to decide whether to affirm a suspension or enter a debarment.
(Authority: E.O. 12549 (3 CFR 1986 Comp., p. 189); E.O. 12689 (3 CFR
1989 Comp., p. 235); sec. 2455, Pub. L. 103-355, 108 Stat. 3327 (31
U.S.C. 6101 note); 20 U.S.C. 1082, 1094, 1221e-3, and 3474)
Sec. 3485.952 HEA.
HEA means the Higher Education Act of 1965, as amended.
(Authority: E.O. 12549 (3 CFR 1986 Comp., p. 189); E.O. 12689 (3 CFR
1989 Comp., p. 235); sec. 2455, Pub. L. 103-355, 108 Stat. 3327 (31
U.S.C. 6101 note); 20 U.S.C. 1082, 1094, 1221e-3, and 3474)
Sec. 3485.995 Principal.
Principal means--
(a) An officer, director, owner, partner, principal investigator,
or other person within a participant with management or supervisory
responsibilities related to a covered transaction; or
(b) A consultant or other person, whether or not employed by the
participant or paid with Federal funds, who--
(1) Is in a position to handle Federal funds;
(2) Is in a position to influence or control the use of those
funds; or
(3) Occupies a technical or professional position capable of
substantially influencing the development or outcome of an activity
required to perform the covered transaction.
(c) For the purposes of Department of Education title IV, HEA
transactions--
(1) A third-party servicer, as defined in 34 CFR 668.2 or 682.200;
or
(2) Any person who provides services described in 34 CFR 668.2 or
682.200 to a title IV, HEA participant, whether or not that person is
retained or paid directly by the title IV, HEA participant.
(Authority: E.O. 12549 (3 CFR 1986 Comp., p.189); E.O. 12689 (3 CFR
1989 Comp., p.235); sec. 2455, Pub. L. 103-355, 108 Stat.
[[Page 18677]]
3327 (31 U.S.C. 6101 note); 20 U.S.C. 1082, 1094, 1221e-3, and 3474)
Sec. 3485.1016 Title IV, HEA participant.
A title IV, HEA participant is--
(a) An institution described in 34 CFR 600.4, 600.5, or 600.6 that
provides postsecondary education; or
(b) A lender, third-party servicer, or guaranty agency, as those
terms are defined in 34 CFR 668.2 or 682.200.
(Authority: E.O. 12549 (3 CFR 1986 Comp., p.189); E.O. 12689 (3 CFR
1989 Comp., p.235); sec. 2455, Pub. L. 103-355, 108 Stat. 3327 (31
U.S.C. 6101 note); 20 U.S.C. 1082, 1094, 1221e-3, and 3474)
Sec. 3485.1017 Title IV, HEA program.
A title IV, HEA program includes any program listed in 34 CFR
668.1(c).
(Authority: E.O. 12549 (3 CFR 1986 Comp., p.189); E.O. 12689 (3 CFR
1989 Comp., p. 235); sec. 2455, Pub. L. 103-355, 108 Stat. 3327 (31
U.S.C. 6101 note); 20 U.S.C. 1082, 1094, 1221e-3, and 3474)
Sec. 3485.1018 Title IV, HEA transaction.
A title IV, HEA transaction includes--
(a) A disbursement or delivery of funds provided under a title IV,
HEA program to a student or borrower;
(b) A certification by an educational institution of eligibility
for a loan under a title IV, HEA program;
(c) Guaranteeing a loan made under a title IV, HEA program; and
(d) The acquisition or exercise of any servicing responsibility for
a grant, loan, or work study assistance under a title IV, HEA program.
(Authority: E.O. 12549 (3 CFR 1986 Comp., p.189); E.O. 12689 (3 CFR
1989 Comp., p.235); sec. 2455, Pub. L. 103-355, 108 Stat. 3327 (31
U.S.C. 6101 note); 20 U.S.C. 1082, 1094, 1221e-3, and 3474)
Subpart J--[Reserved]
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Title 34--Education
PART 77--DEFINITIONS THAT APPLY TO DEPARTMENT REGULATIONS
0
2. The authority citation for part 77 is added to read as follows:
Authority: 20 U.S.C. 1221e-3, 2831(a), 2974(b), and 3474.
0
3. Section 77.1(c) is amended by revising the definition of ``EDGAR''
to read as follows:
Sec. 77.1 Definitions that apply to all Department programs.
* * * * *
(c) * * *
EDGAR means the Education Department General Administrative
Regulations (34 CFR parts 74, 75, 76, 77, 79, 80, 81, 82, 84, 86, 97,
98, and 99).
* * * * *
PART 85--[REMOVED]
0
4. Remove 34 CFR part 85.
PART 668--STUDENT ASSISTANCE GENERAL PROVISIONS
0
5. The authority citation for part 668 continues to read as follows:
Authority: 20 U.S.C. 1001, 1002, 1003, 1070g, 1085, 1088, 1091,
1092, 1094, 1099c, and 1099c-1, unless otherwise noted.
0
6. Section 668.16 is amended by revising paragraph (k) to read as
follows:
Sec. 668.16 Standards of administrative capability.
* * * * *
(k) Is not, and does not have any principal or affiliate of the
institution (as those terms are defined in 2 CFR parts 180 and 3485)
that is--
(1) Debarred or suspended under Executive Order 12549 (3 CFR, 1986
Comp., p. 189) or the Federal Acquisition Regulations (FAR), 48 CFR
part 9, subpart 9.4; or
(2) Engaging in any activity that is a cause under 2 CFR 180.700 or
180.800, as adopted at 2 CFR 3485.12, for debarment or suspension under
E.O. 12549 (3 CFR, 1986 Comp., p. 189) or the FAR, 48 CFR part 9,
subpart 9.4;
* * * * *
Sec. 668.82 [Amended]
0
7. Section 668.82 is amended by:
0
a. In paragraph (e)(1)(i)(B), removing the words ``Cause exists under
34 CFR 85.700 or 85.800'' and adding, in their place, the words ``Cause
exists under 2 CFR 180.700 or 180.800, as both those sections are
adopted at 2 CFR 3485.12,''.
0
b. In paragraph (f)(1) introductory text, removing the words ``under
procedures described in 34 CFR 85.612(d)'' and adding, in their place,
the words ``under the procedures described in 2 CFR 3485.612(d)''.
0
c. In paragraph (f)(2)(i) introductory text, removing the words ``under
procedures described in 34 CFR 85.612(d)'' and, adding in their place,
the words ``under the procedures described in 2 CFR 3485.612(d)''.
0
d. In paragraph (f)(2)(ii) introductory text, removing the words
``under 34 CFR 85.201(b)'' and adding, in their place, ``under 2 CFR
3485.612(c)''.
PART 682--FEDERAL FAMILY EDUCATION LOAN (FFEL) PROGRAM
0
8. The authority citation for part 682 continues to read as follows:
Authority: 20 U.S.C. 1071 to 1087-2, unless otherwise noted.
Sec. 682.200 [Amended]
0
9. In Sec. 682.200, paragraph (b), the definition of ``Lender'' is
amended by:
0
a. In paragraph (6)(i), removing the words ``(as those terms are
defined in 34 CFR part 85)'' and adding, in their place, the words
``(as those terms are defined in 2 CFR parts 180 and 3485)''.
0
b. In paragraph (6)(ii), removing the words ``as defined in 34 CFR part
85'' and adding, in their place, the words ``as defined in 2 CFR parts
180 and 3485''.
Sec. 682.416 [Amended]
0
10. Section 682.416(d)(1)(ii)(B) is amended by removing the words
``cause under 34 CFR 85.700 or 85.800'' and adding, in their place, the
words ``cause under 2 CFR 180.700 or 180.800, as those sections are
adopted at 2 CFR 3485.12''.
Sec. 682.706 [Amended]
0
11. Section 682.706(b)(7) is amended by removing the words ``meet the
standards described in 34 CFR 85.201(c)'' and adding, in their place,
the words ``meet the standards described in 2 CFR 3485.612(d)''.
[FR Doc. 2012-7358 Filed 3-27-12; 8:45 am]
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