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Federal Register / Vol. 86, No. 163 / Thursday, August 26, 2021 / Rules and Regulations Several comments concerned the process by which exclusion or removal orders may be issued. One, for example, recommended that any source being evaluated by the FASC should be notified at the outset of that review and allowed to comment as early as possible. The final rule does not implement that recommendation.
Depending on the circumstances of a particular case, national security considerations may weigh against informing a source that it has drawn the attention of the FASC at a time when no recommendation has been issued. As a result, the final rule does not mandate either early or ongoing communication with a source prior to the issuance of a recommendation.
Other comments raised the concern that sources named in a recommendation would not receive enough information from the FASC to mount an adequate response. The final rule, like the interim rule, provides that the source named in a recommendation must be notified of the criteria relied upon by the FASC in developing that recommendation. 2011.302b2. The source must also be advised of the information upon which the FASC
based its recommendation, so long as disclosure of that information is consistent with national security and law enforcement interests. This body of information will allow the source to understand the FASCs reasoning and so to prepare a response. Contrary to one commenters suggestion, the criteria to be disclosed to the source are not equivalent to a simple list of the generically described factors identified in 2011.300b of the final rule. To make that fact clear, the label for that list of factors in the final rule has been changed from Criteria to Relevant Factors.
The interim final rule provided that the administrative record on judicial review of an exclusion or removal order would include, among other things, any information or materials directly relied upon by the official who issued the order. One commenter objected that the use of the word directly indicated that the administrative record supporting exclusion or removal orders would not conform to the requirements of the FASCSA. To prevent any such misinterpretation and mirror the language of the FASCSA more closely, the word directly has been removed from paragraphs b4 and c of 201
1.303.
Some commenters made broader or more general suggestions regarding FASC processes. One recommended that the FASC should require what it called standard due process trappings,
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including hearings, discovery, right to counsel, and the ability to appeal to the Federal court system. No change to the interim rule has been made in response to this comment. The final rule, like the interim rule and the FASCSA statutory scheme, provides for due process by ensuring that affected sources will be notified of possible adverse action and given an opportunity to address the Federal Governments basis for such an action. The rule and the statutory scheme also provide for review by a Federal court of appeals of any exclusion or removal order resulting from a FASC recommendation.
Discovery is not contemplated by the FASCSA and is not a standard due process element in judicial review based upon an administrative record.
There is no due process right to counsel in civil matters. Mandating additional procedures such as a discovery process would make the FASCs proceedings considerably slower and more expensive, thereby impeding the Federal Governments ability to protect against serious cyber threats to its systemsa result that is contrary to the purposes of the FASCSA and would significantly undermine important Federal Government interests.
Another commenter requested that the FASC afford the public the opportunity for comment before enacting new rules, and that an opportunity for appeal be given for measures targeting specific companies. The FASC has concluded that any applicable requirements of the Administrative Procedure Act are fully sufficient to address the public interests implicated by new rules. In addition, the FASCSA provides sources named in exclusion or removal orders the opportunity to appeal an order to a Federal court of appeals. 41 U.S.C.
1327b. Because these requests are addressed by statute, the FASC has not modified the interim rule to address them.
One commenter objected to the statement in the preamble to the interim rule that the FASC does not intend to publicly disclose communications with the sources except to the extent required by law, suggesting that it conflicted with provisions of the interim rule concerning the treatment of confidential information submitted by a source in response to a notice of a FASC
recommendation. For the final rule, the relevant provision of the interim rule has been modified to clarify that confidential information submitted by a source is subject to the same degree of protection provided pursuant to new 2011.201d for confidential
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information submitted voluntarily by NFEs.
One commenter inquired about the timing of the FASC recommendation process, suggesting that the rule prescribe a reasonable timeline regarding when an exclusion or removal order is issued and when it will go into effect. The same commenter asserted that a source named in an exclusion or removal order should be afforded at least 60 days from the effective date of an order to respond to the FASC. This comment reflects a misunderstanding of the FASC process.
The FASC does not issue exclusion or removal orders, and so a source has no reason to respond to the FASC once such an order is issued. The FASC
makes recommendations for the issuance of orders. Any sources named in a FASC recommendation will have the opportunity to respond to the FASC
before an order may be issued. The FASC may alter or withdraw its recommendation based on a sources response. If the FASC chooses not to do so, then an appropriate official from DHS, DOD, or ODNI may issue an order based on the recommendation.
Pursuant to 41 U.S.C. 1327, a source may request judicial review of an order within 60 days after being notified of its issuance. The ordering official, not the FASC, is responsible both for deciding the effective date of the order and for providing notification of the order to the source. 41 U.S.C. 1323c5, 6. As a result, the FASC does not in the interim or the final rule attempt to constrain the ordering officials discretion as to the manner in which the effective date of an order is determined or in which notification of an order is issued to the source.
The same commenter opined that the FASC should prescribe in the final rule a reasonable timeline for when a covered procurement action may be announced and when it may go into effect. Fact-specific considerations, such as the imminence of the risk posed by a source and the characteristics of the procurement at issue, will heavily influence the timeline for a covered procurement action. The final rule therefore allows authorized officials to determine an appropriate timeline on a case-by-case basis, rather than prescribing a single approach.
The same commenter also suggested that the FASC should issue a preliminary recommendation, allow submission of a response by the affected sources, and then issue a final recommendation. The final rule provides for such a process, although it does not label recommendations as preliminary or final. Instead, the
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