section_id,title_number,title_name,chapter,subchapter,part_number,part_name,subpart,subpart_name,section_number,section_heading,agency,authority,source_citation,amendment_citations,full_text 10:10:5.0.2.5.9.1.9.1,10,Energy,III,,719,PART 719—CONTRACTOR LEGAL MANAGEMENT REQUIREMENTS,A,Subpart A—General Provisions,,§ 719.1 What is the purpose of this part?,DOE,,,,"This part facilitates management of retained legal counsel and contractor legal costs, including litigation and legal matter costs. It requires the contractor to develop a Legal Management Plan, to document the analysis used to decide when to utilize outside counsel, and to document what law firm or individual attorney will be engaged as outside counsel. This part also requires the contractor to document the terms of the engagement with retained legal counsel. Payment of Department-retained law firm invoices and reimbursement of contractor legal costs under covered contracts are subject to compliance with this part." 10:10:5.0.2.5.9.1.9.2,10,Energy,III,,719,PART 719—CONTRACTOR LEGAL MANAGEMENT REQUIREMENTS,A,Subpart A—General Provisions,,§ 719.2 What are the definitions of terms used in this part?,DOE,,,,"For purposes of this part: Alternative dispute resolution includes, but is not limited to, processes such as mediation, neutral evaluation, mini-trials and arbitration. Contractor means any person or entity with whom the Department contracts for the acquisition of goods or services. Covered contracts means those contracts described in § 719.3 of this part. Days means calendar days. Department means the Department of Energy (DOE), including the National Nuclear Security Administration (NNSA). Department Counsel means the attorney in the DOE or NNSA field office, or Headquarters office, designated as the contracting officer's representative and point of contact for a contractor or for Department retained legal counsel, for purposes of this part. General Counsel means the DOE General Counsel for DOE legal matters and the NNSA General Counsel for NNSA legal matters. Legal costs means, but is not limited to, administrative expenses associated with the provision of legal services by retained legal counsel; the costs of legal services provided by retained legal counsel; the costs of the services, if the services are procured in connection with a legal matter, of accountants, consultants, experts or others retained by the contractor or by retained legal counsel; and any similar costs incurred by retained legal counsel or in connection with the services of retained legal counsel. Legal Management Plan means a document required by subpart B of this part describing the contractor's practices for managing legal costs and legal matters for which it procures the services of retained legal counsel. Litigation means a proceeding arising under or related to a contract between the contractor and the Department to which the contractor is a party in a State, tribal, territorial, foreign, or federal court or before an administrative body or an arbitrator. Retained legal counsel means a licensed attorney working in the private sector who is retained by a contractor or the Department to provide legal services. Retrospective insurance means any insurance policy under which the premium is not fixed but is subject to adjustments to reimburse the insurance carrier for actual losses incurred or paid (e.g. claims, settlements, damages, and legal costs). Retrospective insurance includes service-type insurance policies as described in 48 CFR 928.370. Settlement agreement means a written agreement between a contractor and one or more parties pursuant to which one or more parties waives the right to pursue a legal claim in exchange for something of value. Significant matters means legal matters involving significant issues as determined by Department Counsel and identified to a contractor in writing, and any legal matters where the amount of any legal costs, over the life of the matter, is expected to exceed $100,000. Staffing and Resource Plan means a statement prepared in accordance with subpart B of this part by retained legal counsel that describes the method for managing a Significant Matter in litigation." 10:10:5.0.2.5.9.1.9.3,10,Energy,III,,719,PART 719—CONTRACTOR LEGAL MANAGEMENT REQUIREMENTS,A,Subpart A—General Provisions,,§ 719.3 What contracts are covered by this part?,DOE,,,,"(a) Unless excluded under § 719.5, this part covers the following three categories of contracts: (1) All management and operating contracts; (2) Non-management and operating cost reimbursement contracts exceeding $100,000,000; and (3) Non-management and operating contracts exceeding $100,000,000 that include cost reimbursable elements exceeding $10,000,000 (e.g., contracts with both fixed-price and cost-reimbursable line items where the cost-reimbursable line items exceed $10,000,000 or time and materials contracts where the materials portions exceed $10,000,000). (b) This part also covers contracts otherwise not covered by paragraph (a) of this section but which contain a clause requiring compliance with this part. (c) This part also covers any contract the Department awards directly to retained legal counsel exceeding $100,000." 10:10:5.0.2.5.9.1.9.4,10,Energy,III,,719,PART 719—CONTRACTOR LEGAL MANAGEMENT REQUIREMENTS,A,Subpart A—General Provisions,,§ 719.4 Are law firms that are retained by contract by the Department covered by this part?,DOE,,,,"Legal counsel retained under fixed rate or other type of contract or other agreement by the Department to provide legal services must comply with the following if the legal costs over the life of the matter for which counsel has been retained are expected by the Department to exceed $100,000 and retained legal counsel are so notified by the Department: (a) Requirements related to Staffing and Resource Plans in subpart B of this part; (b) Cost guidelines in subpart E of this part; and (c) Engagement letter requirements in subpart C of this part if the retained legal counsel subcontracts legal work valued at $25,000 or more (e.g., a law firm retained by the Department subcontracts with another law firm to provide $26,000 in discovery-related legal work)." 10:10:5.0.2.5.9.1.9.5,10,Energy,III,,719,PART 719—CONTRACTOR LEGAL MANAGEMENT REQUIREMENTS,A,Subpart A—General Provisions,,§ 719.5 What contracts are not covered by this part?,DOE,,,,"This part does not cover any contract under which the Department is not responsible for directly reimbursing the contractor for legal costs, such as fixed price contracts." 10:10:5.0.2.5.9.1.9.6,10,Energy,III,,719,PART 719—CONTRACTOR LEGAL MANAGEMENT REQUIREMENTS,A,Subpart A—General Provisions,,§ 719.6 Are there any types of legal matters not included in the coverage of this part?,DOE,,,,"Legal matters not covered by this part include: (a) Matters handled by counsel retained by an insurance carrier, except under retrospective insurance in accordance with § 719.45; (b) Routine intellectual property law support services; and (c) Routine workers and unemployment compensation matters." 10:10:5.0.2.5.9.1.9.7,10,Energy,III,,719,PART 719—CONTRACTOR LEGAL MANAGEMENT REQUIREMENTS,A,Subpart A—General Provisions,,§ 719.7 Is there a procedure for exceptions or deviations from this part?,DOE,,,,"(a) Requests for exceptions or deviations from this part must be made in writing to Department Counsel and approved by the General Counsel. If an alternate procedure is proposed for compliance with an individual requirement in this part, that procedure must be included in the written request by the contractor. The General Counsel or his/her delegee shall provide a written response to such requests; however the response shall not require a justification of the Department's exercise of its discretion. (b) The General Counsel may authorize exceptions or deviations requested under paragraph (a) of this section. The General Counsel may also establish exceptions to this part based on current field office and contractor practices that satisfy the purpose of these requirements. (c) Exceptions to this part that are also a deviation from the Department of Energy Acquisition Regulation (DEAR) cost principles (see subpart D of this part) must be approved in accordance with applicable DOE procurement policy. See, e.g., DOE Acquisition Guide chapter 1.1, requiring approval by the Senior Procurement Executive of DOE or NNSA as applicable. In any event, the written request from a contractor for a deviation from a cost principle relating to this part must be submitted to the contracting officer, with a copy provided to Department Counsel." 10:10:5.0.2.5.9.1.9.8,10,Energy,III,,719,PART 719—CONTRACTOR LEGAL MANAGEMENT REQUIREMENTS,A,Subpart A—General Provisions,,§ 719.8 Does the provision of protected documents from the contractor to the Department constitute a waiver of privilege?,DOE,,,,"Contractors are required to provide detailed information about third-party claims and litigation to the Department. The Department and its contractors typically share common legal and strategic interests relating to pending or threatened litigation. The common interest between the parties is primarily rooted in the fact that the Department reimburses contractors for allowable costs incurred when litigation is threatened or initiated against contractors. However, other sources of the common interest between the Department and its contractors may include, but are not limited to, an interest in completion of the agency's important mission work and an interest in safe and efficient operation of the Department's facilities. To the extent documents associated with compliance with this part (e.g., Staffing and Resource Plans, invoices, engagement letters, settlement authority requests, and draft pleadings) are protected from disclosure to third parties because the items constitute attorney work product and/or involve attorney client communications, the contractor's provision of these items to the Department does not constitute a waiver of privilege. As long as the Department and the contractor share a common interest in the outcome of legal matters, this mutual legal interest permits the parties to share privileged material without waiving any applicable privilege." 10:10:5.0.2.5.9.2.9.1,10,Energy,III,,719,PART 719—CONTRACTOR LEGAL MANAGEMENT REQUIREMENTS,B,"Subpart B—Legal Management Plan, Staffing and Resource Plan and Annual Legal Budget",,§ 719.10 Who must submit a Legal Management Plan?,DOE,,,,Contractors who are parties to contracts identified under § 719.3(a) and (b) must submit a Legal Management Plan. 10:10:5.0.2.5.9.2.9.2,10,Energy,III,,719,PART 719—CONTRACTOR LEGAL MANAGEMENT REQUIREMENTS,B,"Subpart B—Legal Management Plan, Staffing and Resource Plan and Annual Legal Budget",,§ 719.11 When must a Legal Management Plan be submitted or revised?,DOE,,,,"(a) Contractors must submit a Legal Management Plan to Department Counsel within 60 days following award of the contract. The deadline for submitting the Legal Management Plan may be extended by Department Counsel. (b) Contractors must submit a revised Legal Management Plan upon request of Department Counsel within 60 days of receipt of the Department Counsel's request. The request for a revised Legal Management Plan shall include an explanation of the request. The deadline for submitting the Legal Management Plan may be extended by the Department Counsel." 10:10:5.0.2.5.9.2.9.3,10,Energy,III,,719,PART 719—CONTRACTOR LEGAL MANAGEMENT REQUIREMENTS,B,"Subpart B—Legal Management Plan, Staffing and Resource Plan and Annual Legal Budget",,§ 719.12 What information must be included in the Legal Management Plan?,DOE,,,,"The Legal Management Plan must include the following items: (a) A description of the contractor's in-house counsel resources at the time the Legal Management Plan is submitted, including areas of expertise and an explanation of the types of matters expected to be handled in-house. (b) A description of the legal matters that may necessitate engagement of retained legal counsel. (c) A description of the factors the contractor will consider in determining whether to handle a particular matter utilizing retained legal counsel. (d) An outline of the factors the contractor must consider in selecting retained legal counsel, including: (1) Cost; (2) Past performance of previously retained counsel; (3) Particular expertise in a specific area of the law; (4) Familiarity with the Department's activity at the particular site and the prevalent issues associated with facility history and current operations; (5) Location of retained legal counsel relative to: (i) The site involved in the matter, (ii) Any forum in which the matter will be processed, and (iii) The location where a significant portion of the work will be performed; (6) Experience as an advocate in alternative dispute resolution procedures such as mediation; (7) Actual or potential conflicts of interest; and (8) The means and rate of compensation (e.g., hourly billing, fixed fee, blended fees). (e) A description of the system that the contractor will use to review each matter in litigation to determine whether and when alternative dispute resolution is appropriate. (f) A description of the role of in-house counsel in cost management. (g) A description of the contractor's process for review and approval of invoices for legal costs. (h) A description of the contractor's strategy for interaction with, and supervision of, retained legal counsel. (i) A description of the procedures the contractor will employ in order to seek timely approval from Department Counsel to settle any legal matters as required by § 719.34 of this part; (j) A description of the contractor's strategy for keeping Department Counsel apprised of all legal matters covered by this part (e.g., regularly scheduled meetings and written communications)." 10:10:5.0.2.5.9.2.9.4,10,Energy,III,,719,PART 719—CONTRACTOR LEGAL MANAGEMENT REQUIREMENTS,B,"Subpart B—Legal Management Plan, Staffing and Resource Plan and Annual Legal Budget",,§ 719.13 Who at the Department receives and reviews the Legal Management Plan?,DOE,,,,"Contractors must submit a Legal Management Plan to Department Counsel. If the contractor has not been notified of the assignment of Department Counsel, the contractor must submit the Legal Management Plan to the contracting officer and the DOE Deputy General Counsel for Litigation and Enforcement or the NNSA Deputy General Counsel as appropriate." 10:10:5.0.2.5.9.2.9.5,10,Energy,III,,719,PART 719—CONTRACTOR LEGAL MANAGEMENT REQUIREMENTS,B,"Subpart B—Legal Management Plan, Staffing and Resource Plan and Annual Legal Budget",,§ 719.14 Will the Department notify the contractor concerning the adequacy or inadequacy of the submitted Legal Management Plan?,DOE,,,,The Contracting Officer or Department Counsel will notify the contractor of any non-compliance or inadequate information relating to requirements in § 719.12 within 30 days of the contractor's submission of the plan. The contractor must either correct matters identified within 30 days of notification or file a letter with the General Counsel disputing the determination of a deficiency. 10:10:5.0.2.5.9.2.9.6,10,Energy,III,,719,PART 719—CONTRACTOR LEGAL MANAGEMENT REQUIREMENTS,B,"Subpart B—Legal Management Plan, Staffing and Resource Plan and Annual Legal Budget",,§ 719.15 What are the requirements for a Staffing and Resource Plan?,DOE,,,,"(a) For significant matters in litigation, the contractor must require retained legal counsel to prepare a Staffing and Resource Plan. The contractor must then forward the Staffing and Resource Plan to Department Counsel. (b) Retained legal counsel retained directly by the Department subject to this part must prepare a Staffing and Resource Plan and forward it to Department Counsel. (c) A Staffing and Resource Plan must describe the following: (1) Major phases likely to be involved in the handling of the matter; (2) Timing and sequence of such phases; (3) Projected cost for each phase of the representation; and (4) Detailed description of resources that the retained legal counsel intends to devote to the representation. (d) A Staffing and Resource Plan must include a budget, broken down by phases, including at a minimum the following phases: (1) Matter assessment, development and administration; (2) Pretrial pleadings and motions; (3) Discovery; (4) Trial preparation and trial; and (5) Appeal. (e) The contractor must notify Department Counsel before incurring retained legal counsel costs in excess of costs listed in the budget developed pursuant to paragraph (d) of this section." 10:10:5.0.2.5.9.2.9.7,10,Energy,III,,719,PART 719—CONTRACTOR LEGAL MANAGEMENT REQUIREMENTS,B,"Subpart B—Legal Management Plan, Staffing and Resource Plan and Annual Legal Budget",,§ 719.16 When must the Staffing and Resource Plan be submitted?,DOE,,,,"(a) The contractor or retained legal counsel must submit the Staffing and Resource Plan to Department Counsel within 30 days after the filing of an answer or a dispositive motion in lieu of an answer, 30 days after a determination that the cost is expected to exceed $100,000, or 30 days after notification from Department Counsel that a matter is considered significant, whichever is sooner. The deadline for submitting the Staffing and Resource Plan may be extended by Department Counsel. (b) Department Counsel may state objections to the Staffing and Resource Plan within 30 days of receipt of a Staffing and Resource Plan. When an objection is stated, the contractor or retained legal counsel must either revise the Staffing and Resource Plan to satisfy the objection within 30 days or file a letter with the General Counsel disputing the objection. (c) Contractors must require retained legal counsel to update Staffing and Resource Plans annually or more frequently if there are significant changes in the matter. The contractor must submit the Staffing and Resource Plan updates to Department Counsel. Similarly, Department retained legal counsel must submit to Department Counsel annual Staffing and Resource Plan updates or more frequent updates if there are significant changes in the matter." 10:10:5.0.2.5.9.2.9.8,10,Energy,III,,719,PART 719—CONTRACTOR LEGAL MANAGEMENT REQUIREMENTS,B,"Subpart B—Legal Management Plan, Staffing and Resource Plan and Annual Legal Budget",,§ 719.17 Are there any budgetary requirements?,DOE,,,,"(a) Contractors required to submit a Legal Management Plan must also submit an annual legal budget to Department Counsel. (b) The annual legal budget must include cost projections for significant matters at a level of detail reflective of the types of billable activities and the stage of each such matter. (c) For informational purposes for both the contractor and Department Counsel, the contractor must submit a report to Department Counsel comparing its budgeted and actual legal costs within 30 days of the conclusion of the period covered by each annual legal budget. The Department recognizes, however, that there may be departures from the annual budget beyond the control of the contractor." 10:10:5.0.2.5.9.3.9.1,10,Energy,III,,719,PART 719—CONTRACTOR LEGAL MANAGEMENT REQUIREMENTS,C,Subpart C—Engagement Letter,,§ 719.20 When must an engagement letter be submitted to Department Counsel?,DOE,,,,"Contractors must submit a copy of an executed engagement letter between it and retained legal counsel to Department Counsel when the retained counsel is expected to provide $25,000 or more in legal services for a particular matter. A copy of the executed engagement letter must be submitted to Department Counsel upon execution." 10:10:5.0.2.5.9.3.9.2,10,Energy,III,,719,PART 719—CONTRACTOR LEGAL MANAGEMENT REQUIREMENTS,C,Subpart C—Engagement Letter,,§ 719.21 What are the required elements of an engagement letter?,DOE,,,,"(a) The engagement letter must require retained legal counsel to assist the contractor in complying with this part and any supplemental guidance distributed under this part. (b) At a minimum, the engagement letter must include the following: (1) A process for review and documented approval of all billing by a contractor representative including the timing and scope of billing reviews. (2) A statement that provision of records to the Government is not intended to constitute a waiver of any applicable legal privilege, protection, or immunity with respect to disclosure of these records to third parties. An exemption for specific records may be obtained where contractors can demonstrate that a particular situation may provide grounds for a waiver. (3) A requirement that the contractor, the Department, and the Government Accountability Office have the right, upon request, and at reasonable times and locations to inspect, copy, and audit all records documenting billable fees and costs. (4) A statement that all records must be retained for a period of six (6) years and three (3) months after the final payment or after final case disposition, whichever is later. (5) Identification of all attorneys and staff who are assigned to the matter and the rate and basis of their compensation (i.e., hourly rates, fixed fees, contingency arrangement) and a process for obtaining approval of temporary adjustments in staffing levels or identified attorneys. (6) An initial assessment of the matter by retained legal counsel, along with a commitment to provide updates as necessary. (7) A description of billing procedures, including frequency of billing and billing statement format. (8) A statement setting forth an agreement that the retained legal counsel will prepare a Staffing and Resource Plan in accordance with the requirements of § 719.15. (9) A statement setting forth an agreement to consider alternative dispute resolution at the earliest possible stage and thereafter as appropriate where litigation is involved. (10) A statement setting forth an agreement that retained legal counsel must comply with the cost guidelines in subpart E of this part. (11) A statement setting forth an agreement that retained legal counsel will provide a certification concerning the costs submitted for reimbursement. The certification that must be included in bills or invoices submitted by retained legal counsel must appear as follows: “Under penalty of law, [the representative] acknowledges the expectation that the bill will be paid by the contractor and that the contractor will be reimbursed by the Federal Government through the U.S. Department of Energy, and, based on personal knowledge and a good faith belief, certifies that the bill is truthful and accurate, and that the services and charges set forth herein comply with the terms of engagement and the policies set forth in the Department of Energy's regulation and guidance on contractor legal management requirements, and that the costs and charges set forth herein are appropriate and related to the representation of the client.” The certification must be signed and dated by a representative of the retained legal counsel. Invoices must contain all elements (e.g., date of service, description of service, name of attorney, etc.) set forth in the model bill format in Appendix A to this part. (12) A statement setting forth agreement to identify and address promptly any professional conflicts of interest. (c) There may be additional requirements for an engagement letter based on the needs of the contractor or the Departmental element requiring the services of the Department retained legal counsel." 10:10:5.0.2.5.9.4.9.1,10,Energy,III,,719,PART 719—CONTRACTOR LEGAL MANAGEMENT REQUIREMENTS,D,"Subpart D—Requests From Contractor Counsel To Initiate, Defend, and Settle Legal Matters",,"§ 719.30 In what circumstances may the contractor initiate litigation, including appeals from adverse decisions?",DOE,,,,"(a) The contractor must provide written notice to Department Counsel prior to initiating litigation or appealing from adverse decisions. (b) The contractor may not initiate litigation for which it seeks reimbursement without prior written authorization of Department Counsel. (c) The following information must be provided to Department Counsel by the contractor prior to initiating litigation or appealing an adverse decision: (1) Identification of the proposed parties; (2) The nature of the proposed action; (3) Relief sought; (4) Venue; (5) Proposed representation and reason for selection; (6) An analysis of the issues and the likelihood of success, and any time limitation associated with the requested approval; (7) The estimated costs associated with the proposed action, including whether outside counsel has agreed to a contingent fee arrangement; (8) Whether, for any reason, the contractor will assume any part of the costs of the action; (9) A description of any attempts to resolve the issues that would be the subject of the litigation, such as through mediation or other means of alternative dispute resolution; and (10) A discussion regarding why initiating litigation would prove beneficial to the contractor and to the Department." 10:10:5.0.2.5.9.4.9.2,10,Energy,III,,719,PART 719—CONTRACTOR LEGAL MANAGEMENT REQUIREMENTS,D,"Subpart D—Requests From Contractor Counsel To Initiate, Defend, and Settle Legal Matters",,§ 719.31 When must the contractor initiate litigation against third parties?,DOE,,,,"The contractor must initiate litigation, upon the request of the contracting officer, against third parties including proceedings before administrative agencies, in connection with the contract. The contractor shall proceed with such litigation in good faith and as directed from time to time by Department Counsel." 10:10:5.0.2.5.9.4.9.3,10,Energy,III,,719,PART 719—CONTRACTOR LEGAL MANAGEMENT REQUIREMENTS,D,"Subpart D—Requests From Contractor Counsel To Initiate, Defend, and Settle Legal Matters",,§ 719.32 What must the contractor do when it receives notice that it is a party to litigation?,DOE,,,,"(a) The contractor shall give the contracting officer and Department Counsel immediate notice in writing of any legal proceeding, including any proceeding before an administrative agency and any claim which will be handled by a retrospective insurance carrier if costs (including Legal costs, settlements, claims paid, damages, etc.) are likely to be $100,000 or more, filed against the contractor arising out of the performance of the contract and shall provide a copy of all relevant filings and any other documents that may be requested by the contracting officer and/or Department Counsel. The Department Counsel will direct the contractor as to: (1) Whether the contractor must authorize the Government to defend the action; (2) Whether the Government will take charge of the action; or (3) Whether the Government must receive an assignment of the contractor's rights. (b) The contractor shall proceed with such litigation in good faith and as directed from time to time by the Department Counsel. (c) If the costs and expenses associated with the legal proceeding against the contractor are potentially allowable under the contract, the contractor shall: (1) Authorize Department representatives to collaborate with contractor in-house counsel or Department Counsel-approved outside counsel in settling or defending the legal proceeding; or counsel for any associated insurance carrier in settling or defending the claim if retrospective insurance applies or the amount of liability claimed exceeds the amount of insurance coverage; and (2) Authorize Department representatives to settle the legal proceeding or to defend or represent the contractor in and/or to take charge of any litigation, if required by the Department, except where the liability is covered by bond or is insured by an insurance policy other than retrospective insurance." 10:10:5.0.2.5.9.4.9.4,10,Energy,III,,719,PART 719—CONTRACTOR LEGAL MANAGEMENT REQUIREMENTS,D,"Subpart D—Requests From Contractor Counsel To Initiate, Defend, and Settle Legal Matters",,§ 719.33 In what circumstances must the contractor seek permission from the Department to enter a settlement agreement?,DOE,,,,"The contractor must obtain permission from Department Counsel to enter a settlement agreement if the settlement agreement requires contractor payment of $25,000 or more. Obtaining this approval does not represent a determination that the settlement amount and/or the legal costs incurred in connection with the underlying legal matter will be determined to be allowable." 10:10:5.0.2.5.9.4.9.5,10,Energy,III,,719,PART 719—CONTRACTOR LEGAL MANAGEMENT REQUIREMENTS,D,"Subpart D—Requests From Contractor Counsel To Initiate, Defend, and Settle Legal Matters",,§ 719.34 What documentation must the contractor provide to Department Counsel when it seeks permission to enter a settlement agreement?,DOE,,,,"The contractor must provide a written statement to the Department Counsel that includes the following information, as applicable: (a) The amount of any proposed monetary settlement payment. (b) Titles and docket numbers associated with the case(s) for which the contractor is seeking approval to settle; (c) The procedural history of the case(s) or issue(s); (d) A narrative description of the legal claims or allegations at issue in the matter and any background information that explains events that precipitated the initiation of the matter; (e) A description of the history of the settlement discussions; (f) A description of the terms of the proposed settlement agreement or requested settlement authority and the rationale for the contractor entering into the proposed agreement; (g) If the proposed total monetary settlement amount would be allocated among multiple plaintiffs, a list of the plaintiffs and the amount of money each would receive pursuant to the proposed settlement agreement as well as an explanation as to why the settlement amount is different for any particular plaintiff, if appropriate; (h) A description as to why settlement of the matter is in the best interest of the Department; and (i) Any additional supporting documents requested by Department Counsel." 10:10:5.0.2.5.9.4.9.6,10,Energy,III,,719,PART 719—CONTRACTOR LEGAL MANAGEMENT REQUIREMENTS,D,"Subpart D—Requests From Contractor Counsel To Initiate, Defend, and Settle Legal Matters",,§ 719.35 When must the contractor provide a copy of an executed settlement agreement?,DOE,,,,A contractor must provide a copy of an executed settlement agreement within seven (7) days of execution. 10:10:5.0.2.5.9.5.9.1,10,Energy,III,,719,PART 719—CONTRACTOR LEGAL MANAGEMENT REQUIREMENTS,E,Subpart E—Reimbursement of Costs Subject to This Part,,§ 719.40 What effect do the regulations of this part have on cost allowability?,DOE,,,,"Contractor and retained legal counsel compliance with this part is a prerequisite for allowability of legal costs. However, compliance with this part does not guarantee that legal costs will be determined to be allowable. Only the contracting officer has the authority to determine allowability of costs in accordance with 48 CFR (FAR) part 31 and (DEAR) part 931 and all other applicable contract terms and conditions." 10:10:5.0.2.5.9.5.9.2,10,Energy,III,,719,PART 719—CONTRACTOR LEGAL MANAGEMENT REQUIREMENTS,E,Subpart E—Reimbursement of Costs Subject to This Part,,§ 719.41 How does the Department determine whether fees are reasonable?,DOE,,,,"In determining whether fees or rates charged by retained legal counsel are reasonable, the Department may consider among other things: (a) Whether the lowest reasonably achievable fees or rates (including any currently available or negotiable discounts) were obtained from retained legal counsel; (b) Whether lower rates from other firms providing comparable services, at appropriate competency and experience levels, were available; (c) Whether alternative rate structures such as flat, contingent, and other innovative proposals, were considered; and (d) The complexity of the legal matter and the expertise of the law firm in this area." 10:10:5.0.2.5.9.5.9.3,10,Energy,III,,719,PART 719—CONTRACTOR LEGAL MANAGEMENT REQUIREMENTS,E,Subpart E—Reimbursement of Costs Subject to This Part,,§ 719.42 What categories of costs are unallowable?,DOE,,,,"(a) Specific categories of unallowable costs are contained in the cost principles at 48 CFR (FAR) part 31 and 48 CFR (DEAR) part 931 and 48 CFR 970.31. See also 41 U.S.C. 4304. (b) Costs that are customarily or already included in billed hourly rates are not separately reimbursable. (c) Interest charges that a contractor incurs on any outstanding (unpaid) bills from retained legal counsel are not reimbursable." 10:10:5.0.2.5.9.5.9.4,10,Energy,III,,719,PART 719—CONTRACTOR LEGAL MANAGEMENT REQUIREMENTS,E,Subpart E—Reimbursement of Costs Subject to This Part,,§ 719.43 What is the treatment of travel costs?,DOE,,,,"(a) Travel and related expenses must at a minimum comply with the restrictions set forth in 48 CFR 31.205-46, or 48 CFR (DEAR) 970.3102-05-46, as appropriate, to be reimbursable. (b) Travel time may be allowed at a full hourly rate for the portion of time during which retained legal counsel performs legal work for which it was retained; any remaining travel time shall be reimbursed at 50 percent of the full hourly rate, except that in no event will travel time spent working for other clients be allowable. Also, for long distance travel that could be completed by various methods of transportation, e.g., car, train, or plane, costs charged by retained legal counsel or any agent of retained legal counsel will be considered reasonable only if the individuals charge no more travel time than it would take to utilize the fastest mode of transportation that is cost-effective. For example, if retained legal counsel travels for 10 hours by train when a cost-effective flight that would take two hours to get to the same destination is available, the attorney may charge a maximum of two hours for the time spent traveling." 10:10:5.0.2.5.9.5.9.5,10,Energy,III,,719,PART 719—CONTRACTOR LEGAL MANAGEMENT REQUIREMENTS,E,Subpart E—Reimbursement of Costs Subject to This Part,,§ 719.44 What categories of costs require advance approval?,DOE,,,,"(a) To be considered for reimbursement, costs incurred by retained legal counsel for the following require advance written approval from Department Counsel or the submission of subsequent specific justification to Department Counsel when circumstances out of the contractor's control make advance approval unobtainable: (1) Computers or general application software, or non-routine computerized databases, if they are specifically created for a particular matter. For costs associated with the creation and use of computerized databases, contractors and retained legal counsel must ensure that the creation and use of computerized databases is necessary and cost-effective. Use of databases originally created by the Department or its contractors for other purposes, but that can be used to assist a contractor or retained legal counsel in connection with a particular matter, should be considered. Contractors and retained legal counsel must ensure that DOE is provided the discretion to obtain unlimited access to and dominion over any computers or general application software, or non-routine computerized databases specifically created for a particular matter; (2) Secretarial and support services, word processing, or temporary support personnel; (3) Attendance by more than one attorney at a deposition, court hearing or interview; (4) Expert witnesses and consultants; (5) Trade publications, books, treatises, background materials, and other similar documents; (6) Professional or educational seminars and conferences; (7) Preparation of bills or time spent responding to questions about bills from either the Department or the contractor; (8) Food and beverages when the attorney or consultant is not on travel status and away from the home office; (9) Pro hac vice admissions; and (10) Time charged for law students' or interns' services. (b) Requests for fee increases by retained legal counsel, other than those under contract directly with the Department, must be sent in writing to the contractor, who will review the request for reasonableness. If the contractor determines the request is reasonable, the contractor must seek approval for the increase from Department Counsel before it authorizes any increase. Contractors should attempt to lock in rates for partners, associates and paralegals for at least a two year period." 10:10:5.0.2.5.9.5.9.6,10,Energy,III,,719,PART 719—CONTRACTOR LEGAL MANAGEMENT REQUIREMENTS,E,Subpart E—Reimbursement of Costs Subject to This Part,,§ 719.45 Are there any special procedures or requirements regarding subcontractor and retrospective insurance carrier legal costs?,DOE,,,,"(a) The contractor shall establish a monitoring system for significant matters in litigation which are handled by subcontractors other than retrospective insurance carriers whose contracts provide for the reimbursement of legal costs. The purpose of this monitoring system is to enable the contractor to be regularly informed of the progress of the Significant Matter, to monitor the associated costs and help ensure that they are reasonable, and to report on the progress of the Significant Matter and the associated costs to Department Counsel. (b) The contractor shall require retrospective insurance carriers and other subcontractors whose contracts provide for the reimbursement of legal costs to request prior permission from the contractor to enter into a settlement agreement with, or make any payments to, claimants or third-parties if: (1) In the case of a subcontractor other than a retrospective insurance carrier, the settlement or payment amount is likely to reach $25,000 or more; or (2) In the case of a retrospective insurance carrier, the settlement or payment amount is likely to reach $100,000 or more. (c) The contractor shall require the insurance carrier or other subcontractor to submit all documentation described in § 719.34 and to provide the contractor with a copy of the executed settlement agreement within seven days of execution, which the contractor will promptly forward to Department Counsel. The contractor shall not authorize the subcontractor to enter into a settlement agreement or make a payment to a claimant or third-party that is likely to reach or exceed the above-stated threshold amounts without first obtaining the approval of the Department Counsel. (d) Upon request from Department Counsel, the Contracting Officer, or other authorized representative of the Department, the contractor shall provide detailed cost information regarding particular legal matters handled by retrospective insurance carriers or other subcontractors whose contracts provide for the reimbursement of legal costs. (e) The contractor shall provide reviewed costs and status updates for all significant matters in litigation handled by subcontractors whose contracts provide for the reimbursement of legal costs in accordance with § 719.51. The contractor is not required to provide cost and status updates for matters handled by retrospective insurance carriers except upon the written request of the cognizant Contracting Officer or Department Counsel." 10:10:5.0.2.5.9.5.9.7,10,Energy,III,,719,PART 719—CONTRACTOR LEGAL MANAGEMENT REQUIREMENTS,E,Subpart E—Reimbursement of Costs Subject to This Part,,§ 719.46 Are costs covered by this part subject to audit?,DOE,,,,"All costs covered by this part are subject to audit by the Department, its designated representative, or the Government Accountability Office. See § 719.21." 10:10:5.0.2.5.9.5.9.8,10,Energy,III,,719,PART 719—CONTRACTOR LEGAL MANAGEMENT REQUIREMENTS,E,Subpart E—Reimbursement of Costs Subject to This Part,,§ 719.47 What happens when more than one contractor is a party to a matter?,DOE,,,,"(a) If more than one contractor is a party in a particular matter and the issues involved are similar for all the contractors, a single legal counsel designated by the General Counsel must either represent all of the contractors or serve as lead counsel, when the rights of the contractors and the Government can be effectively represented by a single legal counsel, consistent with the standards for professional conduct applicable in the particular matter. Contractors may propose to the General Counsel their preference for the individual or law firm to perform as the lead counsel for a particular matter. (b) If a contractor, having been afforded an opportunity to present its views concerning joint or lead representation, does not acquiesce in the designation of one retained legal counsel to represent a number of contractors, or serve as lead counsel, then the legal costs of such contractor are not reimbursable by the Department, unless the contractor demonstrates that it was reasonable for the contractor to incur such expenses." 10:10:5.0.2.5.9.6.9.1,10,Energy,III,,719,PART 719—CONTRACTOR LEGAL MANAGEMENT REQUIREMENTS,F,Subpart F—Department Counsel,,§ 719.50 What authority does Department Counsel have?,DOE,,,,"(a) Department Counsel will receive written delegated authority from the contracting officer to serve as the contracting officer's representative for legal matters. (b) Actions by Department Counsel may not exceed the responsibilities and limitations as delegated by the contracting officer. Delegated contracting officer representative authority shall not be construed to include the authority to execute or modify the contract or resolve any contract dispute arising under the contract. Additional discussion of the authority and limitation of contracting officers can be found at 48 CFR 1.602-1, and contracting officer's representatives at 48 CFR (DEAR) 942.270-1. The clause, Technical Direction, 48 CFR (DEAR) 952.242-70, also discusses the responsibilities and authority of a contracting officer's representative." 10:10:5.0.2.5.9.6.9.2,10,Energy,III,,719,PART 719—CONTRACTOR LEGAL MANAGEMENT REQUIREMENTS,F,Subpart F—Department Counsel,,§ 719.51 What information must be forwarded to the General Counsel's Office concerning contractor submissions to Department Counsel under this part?,DOE,,,,"Department Counsel must submit through the General Counsel reporting system, the reviewed costs and status updates for all matters involving retained counsel, including but not limited to contractor litigation. The reports are to be received by the 15th day of the month following the end of each quarter of the fiscal year." 10:10:5.0.2.5.9.6.9.3,10,Energy,III,,719,PART 719—CONTRACTOR LEGAL MANAGEMENT REQUIREMENTS,F,Subpart F—Department Counsel,,§ 719.52 What types of field actions must be coordinated with the General Counsel?,DOE,,,,"(a) Requests from contractors for exceptions or deviations from this part must be submitted to the contracting officer and Department Counsel, and approved by the General Counsel or his/her delegee. (b) Requests from contractors for approval to initiate or defend litigation, or to appeal from adverse decisions, where legal issues of first impression, sensitive issues, issues of national significance to the Department or of broad applicability to the Government that might adversely impact its operations are involved must be coordinated by Department Counsel with the General Counsel or his/her delegee. (c) Department Counsel must inform the General Counsel of any Significant Matter, as defined in this part, and must coordinate any action involving a Significant Matter with the General Counsel, or his/her delegee, as directed by the General Counsel or his/her delegee." 15:15:2.1.3.3.16.0.1.1,15,Commerce and Foreign Trade,VII,B,719,PART 719—ENFORCEMENT,,,,§ 719.1 Scope and definitions.,BIS,,,"[71 FR 24929, Apr. 27, 2006, as amended at 73 FR 78183, Dec. 22, 2008]","(a) Scope. This part 719 describes the various sanctions that apply to violations of the Act and the CWCR. It also establishes detailed administrative procedures for certain violations of the Act. The three categories of violations are as follows: (1) Violations of the Act subject to administrative and criminal enforcement proceedings. Section 719.2 of the CWCR sets forth violations for which the statutory basis is the Act. BIS investigates these violations and, for administrative proceedings, prepares charges, provides legal representation to the U.S. Government, negotiates settlements, and makes recommendations to officials of the Department of State with respect to the initiation and resolution of proceedings. The administrative procedures applicable to these violations are found in §§ 719.5 through 719.22 of the CWCR. The Department of State gives notice of initiation of administrative proceedings and issues orders imposing penalties pursuant to 22 CFR part 103, subpart C. (2) Violations of the International Emergency Economic Powers Act (IEEPA) subject to judicial enforcement proceedings. Section 719.3 of the CWCR sets forth violations of the Chemical Weapons Convention for which the statutory basis is the IEEPA. BIS refers these violations to the Department of Justice for civil or criminal judicial enforcement. (3) Violations and sanctions under the Act not subject to proceedings under the CWCR. Section 719.4 of the CWCR sets forth violations and sanctions under the Act that are not violations of the CWCR and that are not subject to proceedings under the CWCR. This section is included solely for informational purposes. BIS may assist in investigations of these violations, but has no authority to initiate any enforcement action under the CWCR. This part 719 does not apply to violations of the export requirements imposed pursuant to the Chemical Weapons Convention and set forth in the Export Administration Regulations (EAR) (15 CFR parts 730 through 774) and in the International Traffic in Arms Regulations (ITAR) (22 CFR parts 120 through 130). (b) Definitions. The following are definitions of terms as used only in parts 719 and 720 of the CWCR. For definitions of terms applicable to parts 710 through 718 and parts 721 and 722 of the CWCR, see part 710 of the CWCR. Act (The). The Chemical Weapons Convention Implementation Act of 1998 (22 U.S.C. 6701-6777). Assistant Secretary for Export Enforcement. The Assistant Secretary for Export Enforcement, Bureau of Industry and Security, United States Department of Commerce. Final decision. A decision or order assessing a civil penalty, or otherwise disposing of or dismissing a case, which is not subject to further administrative review, but which may be subject to collection proceedings or judicial review in an appropriate Federal court as authorized by law. IEEPA. The International Emergency Economic Powers Act, as amended (50 U.S.C. 1701-1706). Office of Chief Counsel. The Office of Chief Counsel for Industry and Security, United States Department of Commerce. Report. For purposes of parts 719 and 720 of the CWCR, the term “report” means any declaration, report, or advance notification required under parts 712 through 715 of the CWCR. Respondent. Any person named as the subject of a letter of intent to charge, or a Notice of Violation and Assessment (NOVA) and proposed order. Under Secretary, Bureau of Industry and Security. The Under Secretary, Bureau of Industry and Security, United States Department of Commerce." 15:15:2.1.3.3.16.0.1.10,15,Commerce and Foreign Trade,VII,B,719,PART 719—ENFORCEMENT,,,,§ 719.10 Discovery.,BIS,,,,"(a) General. The parties are encouraged to engage in voluntary discovery regarding any matter, not privileged, which is relevant to the subject matter of the pending proceeding. The provisions of the Federal Rules of Civil Procedure relating to discovery apply to the extent consistent with this part and except as otherwise provided by the ALJ or by waiver or agreement of the parties. The ALJ may make any order which justice requires to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense. These orders may include limitations on the scope, method, time and place of discovery, and provisions for protecting the confidentiality of classified or otherwise sensitive information, including Confidential Business Information (CBI) as defined by the Act. (b) Interrogatories and requests for admission or production of documents. A party may serve on any party interrogatories, requests for admission, or requests for production of documents for inspection and copying, and a party concerned may apply to the ALJ for such enforcement or protective order as that party deems warranted with respect to such discovery. The service of a discovery request shall be made at least 20 days before the scheduled date of the hearing unless the ALJ specifies a shorter time period. Copies of interrogatories, requests for admission and requests for production of documents and responses thereto shall be served on all parties and a copy of the certificate of service shall be filed with the ALJ. Matters of fact or law of which admission is requested shall be deemed admitted unless, within a period designated in the request (at least 10 days after service, or within such additional time as the ALJ may allow), the party to whom the request is directed serves upon the requesting party a sworn statement either denying specifically the matters of which admission is requested or setting forth in detail the reasons why the party to whom the request is directed cannot truthfully either admit or deny such matters. (c) Depositions. Upon application of a party and for good cause shown, the ALJ may order the taking of the testimony of any person by deposition and the production of specified documents or materials by the person at the deposition. The application shall state the purpose of the deposition and set forth the facts sought to be established through the deposition. (d) Enforcement. The ALJ may order a party to answer designated questions, to produce specified documents or things or to take any other action in response to a proper discovery request. If a party does not comply with such an order, the ALJ may make a determination or enter any order in the proceeding as the ALJ deems reasonable and appropriate. The ALJ may strike related charges or defenses in whole or in part or may take particular facts relating to the discovery request to which the party failed or refused to respond as being established for purposes of the proceeding in accordance with the contentions of the party seeking discovery. In addition, enforcement by any district court of the United States in which venue is proper may be sought as appropriate." 15:15:2.1.3.3.16.0.1.11,15,Commerce and Foreign Trade,VII,B,719,PART 719—ENFORCEMENT,,,,§ 719.11 Subpoenas.,BIS,,,,"(a) Issuance. Upon the application of any party, supported by a satisfactory showing that there is substantial reason to believe that the evidence would not otherwise be available, the ALJ may issue subpoenas to any person requiring the attendance and testimony of witnesses and the production of such books, records or other documentary or physical evidence for the purpose of the hearing, as the ALJ deems relevant and material to the proceedings, and reasonable in scope. Witnesses shall be paid the same fees and mileage that are paid to witnesses in the courts of the United States. In case of contempt, challenge or refusal to obey a subpoena served upon any person pursuant to this paragraph, any district court of the United States, in which venue is proper, has jurisdiction to issue an order requiring any such person to comply with such subpoena. Any failure to obey such order of the court is punishable by the court as a contempt thereof. (b) Service. Subpoenas issued by the ALJ may be served by any of the methods set forth in § 719.8(b) of the CWCR. (c) Timing. Applications for subpoenas must be submitted at least 10 days before the scheduled hearing or deposition, unless the ALJ determines, for good cause shown, that extraordinary circumstances warrant a shorter time." 15:15:2.1.3.3.16.0.1.12,15,Commerce and Foreign Trade,VII,B,719,PART 719—ENFORCEMENT,,,,§ 719.12 Matters protected against disclosure.,BIS,,,,"(a) Protective measures. The ALJ may limit discovery or introduction of evidence or issue such protective or other orders as in the ALJ's judgment may be needed to prevent undue disclosure of classified or sensitive documents or information, including Confidential Business Information as defined by the Act. Where the ALJ determines that documents containing classified or sensitive matter must be made available to a party in order to avoid prejudice, the ALJ may direct the other party to prepare an unclassified and nonsensitive summary or extract of the documents. The ALJ may compare the extract or summary with the original to ensure that it is supported by the source document and that it omits only so much as must remain undisclosed. The summary or extract may be admitted as evidence in the record. (b) Arrangements for access. If the ALJ determines that the summary procedure outlined in paragraph (a) of this section is unsatisfactory, and that classified or otherwise sensitive matter must form part of the record in order to avoid prejudice to a party, the ALJ may provide the parties opportunity to make arrangements that permit a party or a representative to have access to such matter without compromising sensitive information. Such arrangements may include obtaining security clearances or giving counsel for a party access to sensitive information and documents subject to assurances against further disclosure, including a protective order, if necessary." 15:15:2.1.3.3.16.0.1.13,15,Commerce and Foreign Trade,VII,B,719,PART 719—ENFORCEMENT,,,,§ 719.13 Prehearing conference.,BIS,,,,"(a) On the ALJ's own motion, or on request of a party, the ALJ may direct the parties to participate in a prehearing conference, either in person or by telephone, to consider: (1) Simplification of issues; (2) The necessity or desirability of amendments to pleadings; (3) Obtaining stipulations of fact and of documents to avoid unnecessary proof; or (4) Such other matters as may expedite the disposition of the proceedings. (b) The ALJ may order the conference proceedings to be recorded electronically or taken by a reporter, transcribed and filed with the ALJ. (c) If a prehearing conference is impracticable, the ALJ may direct the parties to correspond with the ALJ to achieve the purposes of such a conference. (d) The ALJ will prepare a summary of any actions agreed on or taken pursuant to this section. The summary will include any written stipulations or agreements made by the parties." 15:15:2.1.3.3.16.0.1.14,15,Commerce and Foreign Trade,VII,B,719,PART 719—ENFORCEMENT,,,,§ 719.14 Hearings.,BIS,,,,"(a) Scheduling. Upon receipt of a written and dated request for a hearing, the ALJ shall, by agreement with all the parties or upon notice to all parties of at least 30 days, schedule a hearing. All hearings will be held in Washington, DC, unless the ALJ determines, for good cause shown, that another location would better serve the interest of justice. (b) Hearing procedure. Hearings will be conducted in a fair and impartial manner by the ALJ. All hearings will be closed, unless the ALJ for good cause shown determines otherwise. The rules of evidence prevailing in courts of law do not apply, and all evidentiary material deemed by the ALJ to be relevant and material to the proceeding and not unduly repetitious will be received and given appropriate weight, except that any evidence of settlement which would be excluded under Rule 408 of the Federal Rules of Evidence is not admissible. Witnesses will testify under oath or affirmation, and shall be subject to cross-examination. (c) Testimony and record. (1) A verbatim record of the hearing and of any other oral proceedings will be taken by reporter or by electronic recording, and filed with the ALJ. If any party wishes to obtain a written copy of the transcript, that party shall pay the costs of transcription. The parties may share the costs if both wish a transcript. (2) Upon such terms as the ALJ deems just, the ALJ may direct that the testimony of any person be taken by deposition and may admit an affidavit or declaration as evidence, provided that any affidavits or declarations have been filed and served on the parties sufficiently in advance of the hearing to permit a party to file and serve an objection thereto on the grounds that it is necessary that the affiant or declarant testify at the hearing and be subject to cross-examination. (d) Failure to appear. If a party fails to appear in person or by counsel at a scheduled hearing, the hearing may nevertheless proceed. The party's failure to appear will not affect the validity of the hearing or any proceeding or action taken thereafter." 15:15:2.1.3.3.16.0.1.15,15,Commerce and Foreign Trade,VII,B,719,PART 719—ENFORCEMENT,,,,§ 719.15 Procedural stipulations.,BIS,,,,"Unless otherwise ordered and subject to § 719.16 of the CWCR, a written stipulation agreed to by all parties and filed with the ALJ will modify the procedures established by this part." 15:15:2.1.3.3.16.0.1.16,15,Commerce and Foreign Trade,VII,B,719,PART 719—ENFORCEMENT,,,,§ 719.16 Extension of time.,BIS,,,,"The parties may extend any applicable time limitation by stipulation filed with the ALJ before the time limitation expires, or the ALJ may, on the ALJ's own initiative or upon application by any party, either before or after the expiration of any applicable time limitation, extend the time , except that the requirement that a hearing be demanded within 15 days, and the requirement that a final agency decision be made within 30 days, may not be modified." 15:15:2.1.3.3.16.0.1.17,15,Commerce and Foreign Trade,VII,B,719,PART 719—ENFORCEMENT,,,,§ 719.17 Post-hearing submissions.,BIS,,,,"All parties shall have the opportunity to file post-hearing submissions that may include findings of fact and conclusions of law, supporting evidence and legal arguments, exceptions to the ALJ's rulings or to the admissibility of evidence, and proposed orders and settlements." 15:15:2.1.3.3.16.0.1.18,15,Commerce and Foreign Trade,VII,B,719,PART 719—ENFORCEMENT,,,,§ 719.18 Decisions.,BIS,,,,"(a) Initial decision. After considering the entire record in the case, the ALJ will issue an initial decision based on a preponderance of the evidence. The decision will include findings of fact, conclusions of law, and a decision based thereon as to whether the respondent has violated the Act. If the ALJ finds that the evidence of record is insufficient to sustain a finding that a violation has occurred with respect to one or more allegations, the ALJ shall order dismissal of the allegation(s) in whole or in part, as appropriate. If the ALJ finds that one or more violations have been committed, the ALJ shall issue an order imposing administrative sanctions. (b) Factors considered in assessing penalties. In determining the amount of a civil penalty, the ALJ shall take into account the nature, circumstances, extent and gravity of the violation(s), and, with respect to the respondent, the respondent's ability to pay the penalty, the effect of a civil penalty on the respondent's ability to continue to do business, the respondent's history of prior violations, the respondent's degree of culpability, the existence of an internal compliance program, and such other matters as justice may require. (c) Certification of initial decision. The ALJ shall immediately certify the initial decision and order to the Executive Director of the Office of Legal Adviser, U.S. Department of State, 2201 C Street, NW., Room 5519, Washington, DC 20520, to the Office of Chief Counsel at the address in § 719.8, and to the respondent, by personal delivery or overnight mail. (d) Review of initial decision. The initial decision shall become the final agency decision and order unless, within 30 days, the Secretary of State modifies or vacates it, with or without conditions, in accordance with 22 CFR 103.8." 15:15:2.1.3.3.16.0.1.19,15,Commerce and Foreign Trade,VII,B,719,PART 719—ENFORCEMENT,,,,§ 719.19 Settlement.,BIS,,,,"(a) Settlements before issuance of a NOVA. When the parties have agreed to a settlement of the case, the Director of the Office of Export Enforcement will recommend the settlement to the Secretary of State, forwarding a proposed settlement agreement and order, which, in accordance with 22 CFR 103.9(a), the Secretary of State will approve and sign if the recommended settlement is in accordance with applicable law. (b) Settlements following issuance of a NOVA. The parties may enter into settlement negotiations at any time during the time a case is pending before the ALJ. If necessary, the parties may extend applicable time limitations or otherwise request that the ALJ stay the proceedings while settlement negotiations continue. When the parties have agreed to a settlement of the case, the Office of Chief Counsel will recommend the settlement to the Secretary of State, forwarding a proposed settlement agreement and order, which, in accordance with 22 CFR 103.9(b), the Secretary will approve and sign if the recommended settlement is in accordance with applicable law. (c) Settlement scope. Any respondent who agrees to an order imposing any administrative sanction does so solely for the purpose of resolving the claims in the administrative enforcement proceeding brought under this part. This reflects the fact that the government officials involved have neither the authority nor the responsibility for initiating, conducting, settling, or otherwise disposing of criminal proceedings. That authority and responsibility are vested in the Attorney General and the Department of Justice. (d) Finality. Cases that are settled may not be reopened or appealed." 15:15:2.1.3.3.16.0.1.2,15,Commerce and Foreign Trade,VII,B,719,PART 719—ENFORCEMENT,,,,§ 719.2 Violations of the Act subject to administrative and criminal enforcement proceedings.,BIS,,,,"(a) Violations —(1) Refusal to permit entry or inspection. No person may willfully fail or refuse to permit entry or inspection, or disrupt, delay or otherwise impede an inspection, authorized by the Act. (2) Failure to establish or maintain records. No person may willfully fail or refuse: (i) To establish or maintain any record required by the Act or the CWCR; or (ii) To submit any report, notice, or other information to the United States Government in accordance with the Act or the CWCR; or (iii) To permit access to or copying of any record required to be established or maintained by the Act or the CWCR, including any record that is exempt from disclosure under the Act or the CWCR. (b) Civil penalties —(1) Civil penalty for refusal to permit entry or inspection. Any person that is determined to have willfully failed or refused to permit entry or inspection, or to have disrupted, delayed or otherwise impeded an authorized inspection, as set forth in paragraph (a)(1) of this section, shall pay a civil penalty in an amount not to exceed $25,000 for each violation. Each day the violation continues constitutes a separate violation. (2) Civil penalty for failure to establish or maintain records. Any person that is determined to have willfully failed or refused to establish or maintain any record or submit any report, notice, or other information required by the Act or the CWCR, or to have willfully failed or refused to permit access to or copying of any record, including any record exempt from disclosure under the Act or the CWCR as set forth in paragraph (a)(2) of this section, shall pay a civil penalty in an amount not to exceed $5,000 for each violation. (c) Criminal penalty. Any person that knowingly violates the Act by willfully failing or refusing to permit entry or inspection authorized by the Act; or by willfully disrupting, delaying or otherwise impeding an inspection authorized by the Act; or by willfully failing or refusing to establish or maintain any required record, or to submit any required report, notice, or other information; or by willfully failing or refusing to permit access to or copying of any record, including records exempt from disclosure under the Act or the CWCR, shall, in addition to or in lieu of any civil penalty that may be imposed, be fined under Title 18 of the United States Code, be imprisoned for not more than one year, or both. (d) Denial of export privileges. Any person in the United States or any U.S. national may be subject to a denial of export privileges after notice and opportunity for hearing pursuant to part 720 of the CWCR if that person has been convicted under Title 18, section 229 of the United States Code." 15:15:2.1.3.3.16.0.1.20,15,Commerce and Foreign Trade,VII,B,719,PART 719—ENFORCEMENT,,,,§ 719.20 Record for decision.,BIS,,,,"(a) The record. The transcript of hearings, exhibits, rulings, orders, all papers and requests filed in the proceedings, and, for purposes of any appeal under § 719.18 or under 22 CFR 103.8, the decision of the ALJ and such submissions as are provided for under § 719.18 or 22 CFR 103.8 will constitute the record and the exclusive basis for decision. When a case is settled, the record will consist of any and all of the foregoing, as well as the NOVA or draft NOVA, settlement agreement, and order. (b) Restricted access. On the ALJ's own motion, or on the motion of any party, the ALJ may direct that there be a restricted access portion of the record for any material in the record to which public access is restricted by law or by the terms of a protective order entered in the proceedings. A party seeking to restrict access to any portion of the record is responsible, prior to the close of the proceeding, for submitting a version of the document(s) proposed for public availability that reflects the requested deletion. The restricted access portion of the record will be placed in a separate file and the file will be clearly marked to avoid improper disclosure and to identify it as a portion of the official record in the proceedings. The ALJ may act at any time to permit material that becomes declassified or unrestricted through passage of time to be transferred to the unrestricted access portion of the record. (c) Availability of documents —(1) Scope. All NOVAs and draft NOVAs, answers, settlement agreements, decisions and orders disposing of a case will be displayed on the BIS Freedom of Information Act (FOIA) Web site, at http://www.bis.doc.gov/foia, which is maintained by the Office of Administration, Bureau of Industry and Security, U.S. Department of Commerce. This office does not maintain a separate inspection facility. The complete record for decision, as defined in paragraphs (a) and (b) of this section will be made available on request. (2) Timing. The record for decision will be available only after the final administrative disposition of a case. Parties may seek to restrict access to any portion of the record under paragraph (b) of this section." 15:15:2.1.3.3.16.0.1.21,15,Commerce and Foreign Trade,VII,B,719,PART 719—ENFORCEMENT,,,,§ 719.21 Payment of final assessment.,BIS,,,,"(a) Time for payment. Full payment of the civil penalty must be made within 30 days of the effective date of the order or within such longer period of time as may be specified in the order. Payment shall be made in the manner specified in the NOVA. (b) Enforcement of order. The government party may, through the Attorney General, file suit in an appropriate district court if necessary to enforce compliance with a final order issued under the CWCR. This suit will include a claim for interest at current prevailing rates from the date payment was due or ordered. (c) Offsets. The amount of any civil penalty imposed by a final order may be deducted from any sum(s) owed by the United States to a respondent." 15:15:2.1.3.3.16.0.1.22,15,Commerce and Foreign Trade,VII,B,719,PART 719—ENFORCEMENT,,,,§ 719.22 Reporting a violation.,BIS,,,,"If a person learns that a violation of the Convention, the Act, or the CWCR has occurred or may occur, that person may notify: Office of Export Enforcement, Bureau of Industry and Security, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Room H-4520, Washington, DC 20230; Tel: (202) 482-1208; Facsimile: (202) 482-0964." 15:15:2.1.3.3.16.0.1.3,15,Commerce and Foreign Trade,VII,B,719,PART 719—ENFORCEMENT,,,,§ 719.3 Violations of the IEEPA subject to judicial enforcement proceedings.,BIS,,,"[71 FR 24929, Apr. 27, 2006, as amended at 72 FR 14410, Mar. 28, 2007]","(a) Violations —(1) Import restrictions involving Schedule 1 chemicals. Except as otherwise provided in § 712.2 of the CWCR, no person may import any Schedule 1 chemical (See supplement no. 1 to part 712 of the CWCR) unless: (i) The import is from a State Party; (ii) The import is for research, medical, pharmaceutical, or protective purposes; (iii) The import is in types and quantities strictly limited to those that can be justified for such purposes; and (iv) The importing person has notified BIS not less than 45 calendar days before the import pursuant to § 712.6 of the CWCR. (2) Import restrictions involving Schedule 2 chemicals. Except as otherwise provided in § 713.1 of the CWCR, no person may, on or after April 29, 2000, import any Schedule 2 chemical (see supplement no. 1 to part 713 of the CWCR) from any destination other than a State Party. (b) Civil penalty. A civil penalty not to exceed $50,000 may be imposed in accordance with this part on any person for each violation of this section. 1 1 The maximum civil penalty allowed under the International Emergency Economic Powers Act is $50,000 for any violation committed on or after October 23, 1996 (15 CFR 6.4(a)(5)). (c) Criminal penalty. Whoever willfully violates paragraph (a)(1) or (2) of this section shall, upon conviction, be fined not more than $50,000, or, if a natural person, imprisoned for not more than ten years, or both; and any officer, director, or agent of any corporation who knowingly participates in such violation may be punished by like fine, imprisonment, or both. 2 2 Alternatively, sanctions may be imposed under 18 U.S.C. 3571, a criminal code provision that establishes a maximum criminal fine for a felony that is the greatest of: (1) The amount provided by the statute that was violated; (2) an amount not more than $250,000 for an individual, or not more than $500,000 for an organization; or (3) an amount based on gain or loss from the offense." 15:15:2.1.3.3.16.0.1.4,15,Commerce and Foreign Trade,VII,B,719,PART 719—ENFORCEMENT,,,,§ 719.4 Violations and sanctions under the Act not subject to proceedings under the CWCR.,BIS,,,,"(a) Criminal penalties for development or use of a chemical weapon. Any person who violates 18 U.S.C. 229 shall be fined, or imprisoned for any term of years, or both. Any person who violates 18 U.S.C. 229 and by whose action the death of another person is the result shall be punished by death or imprisoned for life. (b) Civil penalty for development or use of a chemical weapon. The Attorney General may bring a civil action in the appropriate United States district court against any person who violates 18 U.S.C. 229 and, upon proof of such violation by a preponderance of the evidence, such person shall be subject to pay a civil penalty in an amount not to exceed $100,000 for each such violation. (c) Criminal forfeiture. (1) Any person convicted under section 229A(a) of Title 18 of the United States Code shall forfeit to the United States irrespective of any provision of State law: (i) Any property, real or personal, owned, possessed, or used by a person involved in the offense; (ii) Any property constituting, or derived from, and proceeds the person obtained, directly or indirectly, as the result of such violation; and (iii) Any of the property used in any manner or part, to commit, or to facilitate the commission of, such violation. (2) In lieu of a fine otherwise authorized by section 229A(a) of Title 18 of the United States Code, a defendant who derived profits or other proceeds from an offense may be fined not more than twice the gross profits or other proceeds. (d) Injunction. (1) The United States may, in a civil action, obtain an injunction against: (i) The conduct prohibited under section 229 or 229C of Title 18 of the United States Code; or (ii) The preparation or solicitation to engage in conduct prohibited under section 229 or 229D of Title 18 of the United States Code. (2) In addition, the United States may, in a civil action, restrain any violation of section 306 or 405 of the Act, or compel the taking of any action required by or under the Act or the Convention." 15:15:2.1.3.3.16.0.1.5,15,Commerce and Foreign Trade,VII,B,719,PART 719—ENFORCEMENT,,,,§ 719.5 Initiation of administrative proceedings.,BIS,,,,"(a) Letter of intent to charge. The Director of the Office of Export Enforcement, Bureau of Industry and Security, may notify a respondent by letter of the intent to charge. This letter of intent to charge will advise a respondent that BIS has conducted an investigation and intends to recommend that the Secretary of State issue a Notice of Violation and Assessment (NOVA). The letter of intent to charge will be accompanied by a draft NOVA and proposed order, and will give the respondent a specified period of time to contact BIS to discuss settlement of the allegations set forth in the draft NOVA. An administrative enforcement proceeding is not initiated by a letter of intent to charge. If the respondent does not contact BIS within the specified time, or if the respondent requests it, BIS will make its request for initiation of an administrative enforcement proceeding to the Secretary of State in accordance with paragraph (b) of this section. (b) Request for Notice of Violation and Assessment (NOVA). The Director of the Office of Export Enforcement, Bureau of Industry and Security, may request that the Secretary of State initiate an administrative enforcement proceeding under this § 719.5 and 22 CFR 103.7. If the request is in accordance with applicable law, the Secretary of State will initiate an administrative enforcement proceeding by issuing a NOVA. The Office of Chief Counsel shall serve the NOVA as directed by the Secretary of State. (c) Content of NOVA. The NOVA shall constitute a formal complaint, and will set forth the basis for the issuance of the proposed order. It will set forth the alleged violation(s) and the essential facts with respect to the alleged violation(s), reference the relevant statutory, regulatory or other provisions, and state the amount of the civil penalty to be assessed. The NOVA will inform the respondent of the right to request a hearing pursuant to § 719.6 of the CWCR, inform the respondent that failure to request such a hearing shall result in the proposed order becoming final and unappealable on signature of the Secretary of State, and provide payment instructions. A copy of the regulations that govern the administrative proceedings will accompany the NOVA. (d) Proposed order. A proposed order shall accompany every NOVA, letter of intent to charge, and draft NOVA. It will briefly set forth the substance of the alleged violation(s) and the statutory, regulatory or other provisions violated. It will state the amount of the civil penalty to be assessed. (e) Notice. Notice of the intent to charge or of the initiation of formal proceedings shall be given to the respondent (or respondent's agent for service of process, or attorney) by sending relevant documents, via first class mail, facsimile, or by personal delivery." 15:15:2.1.3.3.16.0.1.6,15,Commerce and Foreign Trade,VII,B,719,PART 719—ENFORCEMENT,,,,§ 719.6 Request for hearing and answer.,BIS,,,,"(a) Time to answer. If the respondent wishes to contest the NOVA and proposed order issued by the Secretary of State, the respondent must request a hearing in writing within 15 business days from the postmarked date of the NOVA. If the respondent requests a hearing, the respondent must answer the NOVA within 30 days from the date of the request for hearing. The request for hearing and answer must be filed with the Administrative Law Judge (ALJ), along with a copy of the NOVA and proposed order, and served on the Office of Chief Counsel, and any other address(es) specified in the NOVA, in accordance with § 719.8 of the CWCR. (b) Content of answer. The respondent's answer must be responsive to the NOVA and proposed order, and must fully set forth the nature of the respondent's defense(s). The answer must specifically admit or deny each separate allegation in the NOVA; if the respondent is without knowledge, the answer will so state and will operate as a denial. Failure to deny or controvert a particular allegation will be deemed an admission of that allegation. The answer must also set forth any additional or new matter the respondent contends supports a defense or claim of mitigation. Any defense or partial defense not specifically set forth in the answer shall be deemed waived, and evidence thereon may be refused, except for good cause shown. (c) English required. The request for hearing, answer, and all other papers and documentary evidence must be submitted in English. (d) Waiver. The failure of the respondent to file a request for a hearing and an answer within the times provided constitutes a waiver of the respondent's right to appear and contest the allegations set forth in the NOVA and proposed order. If no hearing is requested and no answer is provided, the proposed order will be signed and become final and unappealable." 15:15:2.1.3.3.16.0.1.7,15,Commerce and Foreign Trade,VII,B,719,PART 719—ENFORCEMENT,,,,§ 719.7 Representation.,BIS,,,,"A respondent individual may appear and participate in person, a corporation by a duly authorized officer or employee, and a partnership by a partner. If a respondent is represented by counsel, counsel shall be a member in good standing of the bar of any State, Commonwealth or Territory of the United States, or of the District of Columbia, or be licensed to practice law in the country in which counsel resides, if not the United States. The U.S. Government will be represented by the Office of Chief Counsel. A respondent personally, or through counsel or other representative who has the power of attorney to represent the respondent, shall file a notice of appearance with the ALJ, or, in cases where settlement negotiations occur before any filing with the ALJ, with the Office of Chief Counsel." 15:15:2.1.3.3.16.0.1.8,15,Commerce and Foreign Trade,VII,B,719,PART 719—ENFORCEMENT,,,,§ 719.8 Filing and service of papers other than the NOVA.,BIS,,,,"(a) Filing. All papers to be filed with the ALJ shall be addressed to “CWC Administrative Enforcement Proceedings” at the address set forth in the NOVA, or such other place as the ALJ may designate. Filing by United States mail (first class postage prepaid), by express or equivalent parcel delivery service, via facsimile, or by hand delivery, is acceptable. Filing from a foreign country shall be by airmail or via facsimile. A copy of each paper filed shall be simultaneously served on all parties. (b) Service. Service shall be made by United States mail (first class postage prepaid), by express or equivalent parcel delivery service, via facsimile, or by hand delivery of one copy of each paper to each party in the proceeding. The Department of State is a party to cases under the CWCR, but will be represented by the Office of Chief Counsel. Therefore, service on the government party in all proceedings shall be addressed to Office of Chief Counsel for Industry and Security, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Room H-3839, Washington, DC 20230, or sent via facsimile to (202) 482-0085. Service on a respondent shall be to the address to which the NOVA and proposed order was sent, or to such other address as the respondent may provide. When a party has appeared by counsel or other representative, service on counsel or other representative shall constitute service on that party. (c) Date. The date of filing or service is the day when the papers are deposited in the mail or are delivered in person, by delivery service, or by facsimile. Refusal by the person to be served, or by the person's agent or attorney, of service of a document or other paper will be considered effective service of the document or other paper as of the date of such refusal. (d) Certificate of service. A certificate of service signed by the party making service, stating the date and manner of service, shall accompany every paper, other than the NOVA and proposed order, filed and served on the parties. (e) Computation of time. In computing any period of time prescribed or allowed by this part, the day of the act, event, or default from which the designated period of time begins to run is not to be included. The last day of the period so computed is to be included unless it is a Saturday, a Sunday, or a legal holiday (as defined in Rule 6(a) of the Federal Rules of Civil Procedure), in which case the period runs until the end of the next day which is neither a Saturday, a Sunday, nor a legal holiday. Intermediate Saturdays, Sundays, and legal holidays are excluded from the computation when the period of time prescribed or allowed is 7 days or less." 15:15:2.1.3.3.16.0.1.9,15,Commerce and Foreign Trade,VII,B,719,PART 719—ENFORCEMENT,,,,§ 719.9 Summary decision.,BIS,,,,"The ALJ may render a summary decision disposing of all or part of a proceeding on the motion of any party to the proceeding, provided that there is no genuine issue as to any material fact and the party is entitled to summary decision as a matter of law."