b.  Self-Employed Individual

Comment: One respondent stated that in the case of a self-employed individual, the disclosure forms would be submitted to the same person filling out the form.

Response: The Councils have addressed this issue in the final rule. When a self-employed individual is a subcontractor and that individual is personally performing the acquisition function closely associated with inherently governmental functions, rather than having an employee of the subcontractor perform the function, then the self-employed individual will be treated as a covered employee of the prime contractor for purposes of this rule and the clause will not flow down. In such case, the clause could not meaningfully flow down to the subcontractor, because there is no employer/employee relationship involved at the subcontract level of performance. The individual completing the disclosure form and the individual accepting and reviewing those forms cannot be one and the same. The definition of "covered employee" was modified to reflect this. Similarly, the clause cannot meaningfully apply at the prime level if the functions are to be performed by a self-employed individual, rather than a contractor employee. Since a self-employed individual is a legal entity, conflicts of interest relating to a prime contract with an entity (whatever its composition) are covered under the organizational conflicts of interest coverage at FAR subpart 9.5.c. Limit Covered Employee to Those Specifically Performing the Acquisition Functions Under the Contract

Comment: One respondent raised the concern that agencies might interpret "covered employee" to mean all employees who work for a Government contractor, and suggested that the definition should be revised to clarify that a covered employee is an employee that is remunerated specifically to perform acquisition functions closely associated with inherently governmental functions.

Response: The definition, as amended, is clear that an employee is only covered under the rule if the employee performs acquisition functions closely associated with inherently governmental functions. Further, "acquisition function closely associated with governmental functions" is defined to tie directly to support of the activities of a Federal agency.