modifications.

2. Requires inclusion of the clause in subcontracts over $3,000 for services or for construction.

3. Requires contractors and subcontractors to use EVerify to confirm the employment eligibility of all existing employees who are directly performing work under the covered contract.

4. Applies to solicitations issued and contracts awarded after the effective date of the final rule in accordance with FAR 1.108(d). Under the final rule, Departments and agencies should, in accordance with FAR 1.108(d)(3), amendon a bilateral basisexisting indefinitedelivery/ indefinitequantity contracts to include the clause for future orders if the remaining period of performance extends at least six months after the effective date of the final rule.

5. In exceptional circumstances, allows a head of the contracting activity to waive the requirement to include the clause. This authority is not delegable.

The rule is written to apply the above requirements in a manner that will ensure effective compliance by the contractor community, and is reasonably limited in certain circumstances to minimize the burden on participants in the Federal procurement process.

Changes Adopted in the Final Rule

Below is a summary of changes made to the final rule:

1. Significantly Extended TimelinesThe final rule amends the proposed rule to permit Federal contractors participating in the E Verify program for the first time a longer period90 calendar days from enrollment instead of 30 days as initially proposedto begin using the system for new and existing employees. The final rule also provides a longer period after this initial enrollment period30 calendar days instead of 3 business daysfor contractors to initiate verification of existing employees who have not previously gone through the EVerify system when they are newly assigned to a covered Federal contract. Contractors already enrolled and using the program as Federal contractors will have the same extended timeframe to initiate verification of employees assigned to the contract, but the time limits will be measured from contract award date instead of from the contractor's EVerify enrollment date. With regard to verification of new hires, a contractor that has already been enrolled as a Federal contractor for 90 calendar days or more will have the standard 3 business days from the date of hire to initiate verification of new hires. Those contractors that have been enrolled in the program for less than 90 calendar days will have 90 calendar days from the date of enrollment as a Federal contractor to initiate verification of new hires.

2. Covered Prime Contract Value ThresholdThe final rule requires the insertion of the EVerify clause for prime contracts above the simplified acquisition threshold ($100,000) instead of the micro purchase threshold ($3,000).

3. Contract TermThe final rule clarifies that the EVerify clause need not be inserted into prime contracts with performance terms of less than 120 days.

4. Institutions of Higher EducationThe final rule modifies the contract clause so that institutions of higher education need only verify employees assigned to a covered Federal contract.

5. State and Local Governments and Federally Recognized Indian TribesSimilarly, under the final rule, State and local governments and Federally recognized Indian tribes need only verify employees assigned to a covered Federal contract.

6. SuretiesUnder the final rule, sureties performing under a takeover agreement entered into with a Federal agency pursuant to a performance bond need only verify employees assigned to the covered Federal contract.

7. Security Clearances and HSPD12 credentialsThe final rule exempts employees who hold an active security clearance of confidential, secret or top secret from verification requirements. The rule also exempts employees for which background investigations have been completed and credentials issued pursuant to the Homeland Security Presidential Directive (HSPD)12, ``Policy for a Common Identification Standard for Federal Employees and Contractors,'' which the President issued on August 27, 2004.

8. All Existing Employees OptionThe final rule provides contractors the option of verifying all employees of the contractor, including any existing employees not currently assigned to a Government contract. A contractor that chooses to exercise this option must notify DHS and must initiate verifications for the contractor's entire workforce within 180 days of such notice to DHS.

9. Expanded COTSrelated exemptions for:

10. Allows the Head of the Contracting Activity to waive EVerify requirements after contract award,
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either temporarily or for the period of performance.

11. Definitions:

The Department of Defense (DoD), General Services Administration (GSA) and National Aeronautics and Space Administration (NASA) published a notice of proposed rulemaking (NPRM) in this action on June 12, 2008. (See 73 FR 33374.) The NPRM directed the submission of comments to the Federal eRulemaking portal, http://www.regulations.gov, as well as by facsimile and by mail to the FAR Secretariat, with reference to FAR Case 2007013, Docket 20080001; Sequence 1, on or before August 11, 2008. The agencies received more than 1,600 public comments on the proposed rulemaking from individuals, organizations, corporations, trade associations, chambers of commerce and Government entities.

Comments submitted to the docket for this rulemaking were distributed relatively evenly among various issues, with concerns about the Government's authority to promulgate the rule and questions about the DHS's and SSA's collective ability to administer the rule receiving the greatest number of comments. Eleven commenters stated that the 60 day public comment period was inadequate to evaluate, research, and prepare responses to a complex proposed rule. Those commenters asked the Councils to extend the comment period to allow more time to research and respond to the proposed rule.

The Councils declined to extend the public comment period after concluding that the period was adequate. The current webbased EVerify system, which has been active and available to employers since 2004, has been the subject of significant public scrutiny, including in public hearings before Congress. This has, over time, disseminated considerable information about the program to the public. As a result, most commenters did not request additional time to gather information and submit comments, and those that did request additional time failed to raise novel or difficult issues that could have justified an extension. Moreover, the comments received more than adequately provided substantial information on which the Councils could make a final decision. Accordingly, the Councils do not believe that there is a basis for extending the comment period related to this rule. Support for the Rule

Comment: More than 600 commenters wrote in support of the proposed rule and strongly urged its adoption. One commenter noted that it has been illegal for more than 20 years, i.e., since 1986, to hire an individual who is not authorized to work in the United States. Another commenter, who identified himself as a 30year Human Resources professional, stated that this EVerify system is not too burdensome for employers. A third commenter said that the ``EVerify program WORKS!'' and that he has found it to work accurately 100 percent of the time.

The majority of these commenters expressed overall support for the Executive Order's instruction for Federal agencies to contract with employers that use EVerify to check the employment eligibility of all persons performing work on Federal contracts and of all persons hired by the contractor. Some commenters applauded EVerify because it will establish a level playing field and prevent some employers from obtaining a competitive advantage by exploiting unauthorized workers for lower pay. Many commenters noted thatfor 22 yearsit has been against the law to hire workers who are not authorized to work in the U.S. This is not a new requirement, they say; it merely puts some teeth into the existing law. Other commenters observed that EVerify will help stem the problem of identity theft by requiring employers to check photo identification.

Response: The Councils appreciate these supportive comments for use of EVerify in the Federal Government procurement system, but note that application of the system in this context is not meant to regulate immigration, but to provide the Federal Government with stable and dependable contractors which, ultimately, results in a more economical and efficient procurement system.

Requests for a More Comprehensive Solution

Comment: A number of commenters suggested that merely requiring the use of the EVerify system by Federal contractors was not a comprehensive solution. They strongly advocate ``fixing'' the ``broken'' immigration system. Some commenters see the solution as giving people a path to legal status, others see it as providing ``tangible solutions for the over 7 million undocumented workers in our economy,'' some see it as enabling swifter and earlier access to work permits, and still other commenters advocate improved ICE auditing teams. One commenter claims that, ``[w]hile employer sanctions and a mandatory employment document verification system may be an appropriate part of an effective immigration reform package, standing alone they only exacerbate the problems they are ostensibly designed to address.''

Response: Comprehensive immigration reform is beyond the scope of this rulemaking and was not the purpose of Executive Order 12989, as amended. The mandate given to the FAR Councils was to implement the President's Executive Order of June 6, 2008, as a means of creating a more economical and efficient Federal Government procurement system. The employment of persons unauthorized to work in the U.S. has been against the law for 22 years. Completion of the Form I9 is still required of all employers and this rule does not change that requirement. This rule merely provides a more convenient, faster, and more consistent means of determining whether an individual is, or is not, authorized to work in the U.S. to establish greater stability and dependability among the Federal contractor workforce.
Authority
1. Immigration Statutes

a. Voluntary Participation in EVerify

1. Comment. Many commenters challenge the Councils' authority to promulgate the Rule, arguing that the insertion of a clause into Federal contracts that commits Federal contractors to use EVerify conflicts with the congressional intent expressed in the IIRIRA that participation in EVerify be ``voluntary.'' Some commenters further argue that the EVerify program is de facto mandatory because contractors who elect not to enter into Federal contracts on account of EVerify will go out of business.

Response: The Councils disagree. Section 402(a) of IIRIRA states, in relevant part, that ``the Secretary of Homeland Security may not require any person or other entity to participate in a pilot program.'' 8 U.S.C. 1324a note,
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Section 402(a). On its face, this statutory limitation applies only to the Secretary of Homeland Security and does not apply to the President or the Councils. Because the requirement to insert the contract clause set forth in this rule comes from a presidential action, Executive Order 12989, as amended, and from this rulemaking undertaken by the Councils, it is not a requirement imposed by the Secretary of Homeland Security and therefore does not run afoul of section 402(a) of IIRIRA.

Moreover, acceptance of a Federal procurement contract is, by definition, a voluntary act. The rule sets forth a performance requirement to be included as a contract clause in contracts entered into or negotiated anew after the effective date of the rule. In AFL CIO v. Kahn, the D.C. Circuit Court of Appeals, sitting en banc, rejected the claim that the Carter Administration's insistence that Federal contractors agree to comply with wage and price controls rendered those controls ``mandatory'' in violation of the Council on Wage and Price Stability Act (COWPSA). 618 F.2d 784 (D.C. Cir. 1979). The Kahn Court analogized the procurement requirement at issue to ``those Federal programs that offer funds to State and local governments on certain conditions. The Supreme Court has upheld such conditional grants, observing on one occasion through Justice Cardozo that `to hold that motive or temptation is equivalent to coercion is to plunge the law in endless difficulties.' '' AFLCIO v. Kahn, 618 F.2d at 794 (quoting Steward Machine Co. v. Davis, 301 U.S. 548, 589590 (1937)). According to the D.C. Circuit:

Any alleged mandatory character of the procurement program is belied by the principle that no one has a right to a Government contract. As the Supreme Court ruled in Perkins v. Lukens Steel Co., ``[The] Government enjoys the unrestricted power * * * to determine those with whom it will deal, and to fix the terms and conditions upon which it will make needed purchases.'' Those wishing to do business with the Government must meet the Government's terms; others need not.
AFLCIO v. Kahn, 618 F.2d at 794. If a contractor chooses to do business with the Federal Government, then the Federal Government can, and routinely does, impose contract performance requirements. Where, as with this rule, such requirements are imposed through contract terms included in contracts, a contractor's agreement to abide by those terms of the agreement is not ``involuntary.''

2. Comment: Many commenters suggested that IIRIRA and the INA limit the types of employers which can be required to participate in the Basic Pilot Program. These commenters asserted that the proposed rule's promulgation of a contract clause committing Federal contractors to use EVerify violates the congressional intent behind IIRIRA, because Federal contractors are not one of the classes of employers which can be required to participate in Basic Pilot. Some commenters suggested that Congress consciously chose to exclude Government contractors from the subset of employers for which participation in Basic Pilot would be mandatory. Many commenters also asserted that, because of this alleged violation of congressional intent, the Administration lacks the constitutional authority to promulgate this policy through Executive Order or through this rulemaking.

Response: The Councils disagree. IIRIRA requires participation in EVerify by certain employers, including Executive departments and the legislative branch, as well as employers found to have violated INA section 274A. There is nothing in the text of IIRIRA that prohibits the President, acting pursuant to separate statutory authority, from requiring additional classes of employers to participate in EVerify as a condition of contracting with the Federal Government. Nor is there any indication in the legislative history to suggest that Congress ever specifically considered and rejected a proposal to include Federal contractors in the EVerify program. Here, the President has acted within his authority under FPASA and 3 U.S.C. 301 and issued an Executive Order to improve the dependability and stability of the Federal contractor workforce by requiring Federal agencies to contract with businesses that electronically verify the employment eligibility of their employees. In his Executive Order, the President tasked the Secretary of Homeland Security with designating an appropriate electronic verification tool and charged the FAR Councils with the responsibility to promulgate a rule to implement the requirements of the Executive Order. The Secretary of Homeland Security and the FAR Councils have acted in accordance with the President's directive, issued as an exercise of his authority under FPASA, and in so doing, neither the Secretary nor the Councils have taken any action in conflict with IIRIRA. Congress merely prohibited the Secretary of Homeland Security from requiring participation in EVerify by other persons or entities, and this rule does not violate that prohibition, as described above.

b. Existing Employees

Comment: Many commenters asserted that because IIRIRA created the Basic Pilot program as a tool to confirm employment eligibility of newly hired employees, the contractual requirementannounced by Executive Order and implemented through this rulemakingthat existing employees assigned to Government contracts be verified (or reverified) through EVerify is contrary to law.

Response: The Councils disagree. Executive Order 12989, as amended, instructs executive departments and agencies to require, as a condition of contracting, that the contractor agree to use an electronic employment eligibility verification system ``to verify the employment of * * * all persons assigned by the contractor to perform work within the United States on the Federal contract.'' This Executive Order is based on the President's exercise of his authority under FPASA to prescribe policies that promote economy and efficiency in federal contracting. 40 U.S.C. 101, 121.

The Basic Pilot statute does not prohibit the verification of existing employees' work eligibility called for by this presidential directive. The Basic Pilot statute lays out a set of procedures that employers using the system must follow ``in the case of the hiring (or recruitment or referral) for employment in the United States. * * *'' IIRIRA section 403(a). The statute also sets out the parameters for the ``employment eligibility confirmation system'' that the Secretary of Homeland Security must establish. IIRIRA section 404. Nothing in either of these sections, howeveror in any other part of the Basic Pilot statuteprohibits the use of the confirmation system for existing employees or prohibits the President, acting pursuant to separate statutory authority, from requiring federal contractors to use the confirmation system for existing employees as a condition of contracting with the federal government.

c. Congressional Notification

Comment: Commenters noted that IRCA requires the Administration to notify Congress before implementing any changes to the employment verification system ``established under subsection (b) of [INA section 274A].'' INA section 274A(d)(1), (d)(3). These commenters suggest that this rulemaking amounts to such a change, and that it may not be implemented without notice to Congress called for in section 274A(d)(3).

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Response: The Councils disagree. This rule instructs Federal contracting officers to insert the specified clause into future Federal contracts, thereby committing Federal contractors to use the EVerify system as specified in the rule. It does not, however, constitute a change to ``the requirements of subsection (b)'' of INA section 274A, which established the paperbased Form I9 employment verification process. The I9 process that all employers must follow at the time of hire continues to apply to Federal contractors without any change. This rule, and the Executive Order on which it is based, promotes economy and efficiency in Federal contracting by assisting employers to avoid employment of unauthorized workers and by limiting the risk that Federal contracts performed in the United States will be staffed by persons unauthorized to work in the United States.

2. Executive Order Authority

Comment: As noted above, many commenters challenged the President's authority to issue the Executive Order under FPASA. These commenters suggested that Executive Order 12989 does not promote ``economy'' and ``efficiency'' in Government contracting, and that the Executive Order is therefore not supported by FPASA's statement that the President may enact procurement regulations which further those two ends. Commenters also contended that the main purpose of the Executive Order is to advance a social policya strengthening of the immigration enforcement relating to employment in the United Statesin a way that is contrary to congressional intent, and that the President's power recognized by FPASA cannot be employed by the Executive Branch to advance policies that conflict with the statutes passed by Congress.

Response: These challenges to the legal authority for Executive Order 12989 are outside the scope of this rulemaking. The Councils note, however, that Executive Order 12989 falls well within the established legal bounds of presidential directives regarding procurement policy. FPASA authorizes the President to craft and implement procurement policies that further the Act's statutory goals of promoting ``economy'' and ``efficiency'' in Federal procurement. See, e.g., UAWLabor Employment & Training Corp. v. Chao, 325 F.3d 360, 366 (D.C. Cir. 2003) (affirming authority of the President under FPASA to require federal contractors, as a condition of contracting, to post notices informing workers of certain labor law rights); Kahn, 618 F.2d at 792793 (upholding an Executive Order implementing procurement wage and price controls, noting need for a ``nexus'' between those wage and price controls and procurement economy and efficiency). The fundamental ``economy and efficiency'' principles underlying the Executive Order were first articulated in the original Executive Order 12989, issued in February 1996, which concluded that contracting with employers who hire unauthorized workers in violation of the INA undermines the economy and efficiency of the Federal procurement system. The 1996 Executive Order imposed debarment penalties on contractors found to have violated the immigration laws, and was never found by a court to be inconsistent with FPASA, the INA, or IRCA. Executive Order 13465 amends Executive Order 12989 to use new employment verification technology in order to advance the same goal of ensuring a stable and dependable Federal contractor workforce and more economical and efficient Federal Government contracting. See 73 FR 33285 (``This order is designed to promote economy and efficiency in Federal Government procurement. * * * I find * * * that adherence to the general policy of contracting only with providers that do not knowingly employ unauthorized alien workers and that have agreed to utilize an electronic employment verification system designated by the Secretary of Homeland Security to confirm the employment eligibility of their workforce will promote economy and efficiency in Federal procurement.'') The President has determined that this rule will produce net economy and efficiency gains in Federal procurement.

The Councils also disagree with assertions that the proposed rule is a veiled attempt to modify immigration policy under the guise of procurement regulation. This rule implicates immigration, but does so in a permissible manner. The President may, under FPASA, promulgate procurement policies and directives touching upon policy matters beyond Government contracting, so long as there is a sufficiently close ``nexus'' between the policy or directive and the promotion of economy and efficiency in Federal procurement. See Chao, 325 F.3d at 36667; Kahn, 618 F.2d at 792; Chamber of Commerce v. Reich, 74 F.3d 1322, 1337 (D.C. Cir. 1996) (``[T]he President, in implementing the Procurement Act, may * * * draw upon * * * secondary policy views * * * that are directed beyond the immediate quality and price of goods and services purchased.''). In this case, the ``nexus'' is explained at some length in the text of Executive Order 13465. (See 73 FR 33285.)

3. The MOU Requirement

Comment: One commenter specified that ``[t]he inclusion of an MOU in addition to, or as a supplement to, the contract performance requirements, is contrary to contract formation law in that it might create a separately enforceable (and potentially conflicting) obligation between the parties beyond the scope of the contract and could create confusion and result in problems with contract administration and/or lead to the submission of contract claims.''

Response: The Councils do not concur with these comments. The requirement in this clause for the contractor to comply with the requirements of a secondary agreement is no different than any other contract term that requires adherence to a standard or a specification. The clause merely requires adherence to the conditions of the MOU as part of the contractor's performance duties. The terms of the EVerify MOU are readily available to the public, and were included in the docket of this rulemaking on the www.regulations.gov Web site so that commenters on this rule would have the opportunity to review and take into consideration the proposed terms of that agreement in providing comments on this rulemaking. Potential contractors have adequate advance notice of the ancillary agreement with which they must comply. 4. Consistency With Other Federal Regulations

a. FAR Guiding Principles

Comment: Several commenters claim that the proposed rule contradicts many of the guiding principles used in the creation of the FAR, including (1) minimizing administrative operating costs, (2) conducting business with integrity, fairness, and openness, and (3) promoting competition.

Response: Commenters claim that administrative operating costs can include startup, implementation, training, and maintenance costs; and the Councils agree. All of these costs were included, and evaluated, in the Regulatory Impact Analysis (RIA) released with the proposed rule. Some adjustments have been made to the RIA as a result of comments received in response to the proposed rule, and they are addressed in the Regulatory Flexibility Analysis section of this rule. Commenters claim that there are also
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other direct and indirect costs to employers who use EVerify employers may perceive foreignborn workers as more expensive to employ than nativeborn workers due to the database inaccuracies. Commenters claim that resolving tentative nonconfirmations and correcting employee records costs time and money and affects other resources. In claiming that the costs associated with the proposed rule do not minimize administrative costs, however, the commenters overlook the costs already incurred by contractors as a result of the I9 process mandated by the INA, and they overlook the gains in stability and reliability of the Federal contractor workforce that contractors' use of EVerify will produce.

The Councils also disagree with the claim by some commenters that the proposed rule fails to advance integrity, fairness, and openness in the way business is conducted. While Governmentcommissioned reports have found some employer abuse of the program, discriminatory behavior and other such prohibited employment practices is not encouraged by the EVerify system. Use of EVerify cannot prevent all such illegal action, but the record created by use of the system does make it more difficult for an employer engaged in discrimination to conceal its unlawful behavior. If any employer engages in discriminatory practices, such abuses should be reported to the appropriate Federal and State agencies responsible for enforcement of the antidiscrimination laws.

Commenters claim that the proposed rule does not encourage competition because the harmful impact on small businesses (many of which are minority, immigrant, or familyowned) is disproportionate and makes the playing field for small businesses more uneven. The claim of a disproportionate impact on small businesses is addressed elsewhere in this rule (see the Regulatory Flexibility Analysis section of this rule). However, the Councils believe that there is an impact on competition, and it believes that the impact is positive rather than negative. Use of the EVerify system will make it more difficult for firms to gain a competitive edge by hiring unauthorized workers at lower pay.

b. DHS Regulations

Comment: One commenter asserted that the proposed rule's requirement to reverify certain employees violates existing DHS regulations.

Response: As the commenter did not identify the specific DHS regulations allegedly violated, this comment is not susceptible to a response. Other commenters have made similar assertions that EVerify is contrary to law and the Councils have addressed these specific concerns. The Councils are not aware of any DHS regulation violated by this final rule.

c. Verification of Federal Employees

Comment: Several commenters noted that OMB has directed all Federal departments and agencies to use EVerify on their newlyhired employees, but not on their existing employees. These commenters asserted that the proposed rule is inconsistent with that OMB decision, because the rule requires Federal contractors to use EVerify on not only new hires but also on existing employees working on Federal contracts, and argue that Federal contractors should not be held to a higher verification standard than is applied to the Executive branch.

Response: The Councils disagree. The rule is consistent with the policy announced in Executive Order 12989 requiring the Executive branch to contract with employers that agree to use EVerify for their employees who are working on a covered Federal contract. The aim of the Executive Order is to promote economy and efficiency in Federal procurement by ensuring stable and dependable Federal contractors.

Furthermore, Federal employees are required to undergo background checks pursuant to HSPD12, which mandates that a person must be suitable (minimum of a national agency check with inquiries (NACI)) in order to be issued an HSPD12 card. HSPD12 requires certain credentialing standards prior to issuing personal identity verification cards. These standards include verification of name, date of birth, and social security number (among other data points) against Federal and private data sources. The Councils agree that the degree of scrutiny applied to individuals granted HSPD12 credentials provides sufficient confidence that any such person is likely truthful about his or her authorization to work in the United States that additional investigation through EVerify is not necessary.

d. Appropriate Scope of Regulations

Comment: One commenter suggested that the proposed rule's goal was to ``protect U.S. workers''one that is beyond the scope of that which can rightfully be pursued under procurement authorities.

Response: The Councils do not agree with the premise of this comment. The goal of the proposed rule is not to ``protect U.S. workers.'' Rather, the goal of the rule is to implement Executive Order 12989, which aims to promote economy and efficiency in the Federal procurement system by ensuring that the Federal Government does not do business with contractors that hire or employ unauthorized aliens, thereby promoting the stability and dependability of contractor workforces and minimizing the potential for disruption to federal contracts. The President is well within his authority under FPASA to require the agencies to promulgate this rule, which has a clear nexus to promotion of economy and efficiency in Federal contracting, even if it might also have other impacts. Chao, 325 F.3d at 366 (affirming authority of the President under FPASA to require federal contractors, as a condition of contracting, to post notices informing workers of certain labor law rights.)
Relationship With States

1. States Prohibiting Mandatory Use

Comment: Several commenters requested that the Administration clarify the effects of the proposed rule on employers conducting Federal Government contracting business in locations where State and/or local law prohibits the use of EVerify. One of these commenters specifically asked if the requirements of the proposed rule would function as an affirmative defense in actions brought against employers which use EVerify in contravention of State/local law. Two other commenters suggested that the proposed rule be modified to provide E Verify participation waivers to employers located in States prohibiting EVerify enrollment, to allow such employers to participate in Government contracting without violating State law.

Response: The Councils decline to provide an exemption to the E Verify term in contracts covered by this rule for employers located in States that prohibit EVerify enrollment, because such state and local laws would be preempted by Executive Order 12989, as amended, and by these rules implementing the Order. The Councils note that an Illinois state statute prohibiting use of EVerify by employers within that state is currently in litigation, as a result of a lawsuit filed by DHS arguing that the state statute is preempted by Federal law. The state has agreed not to enforce its statute pending the final resolution of the litigation.

2. Other States

Comment: Two commenters noted that they are concerned that the proposed rule's requirement that certain existing employees undergo E Verify
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verification could ``embolden'' States and localities to require the same type of verification for employees working under State/local contracts. These commenters fear that such an expansion would complicate employment verification legal requirements, to the detriment of both employers and employees.

Response: The commenters concerns are speculative and, in any case, State and local government action is outside the scope of this case. EVerify System
1. EVerify Procedural Issues

a. Burdensome

Comment: One commenter stated that the EVerify enrollment process is cumbersome and difficult and that USCIS support for employers trying to enroll has been inconsistent and ineffective. Three commenters felt that tentative nonconfirmations and the subsequent efforts to resolve them place additional burdens on employers and employees alike. Two other commenters state that costs associated with EVerify are burdensome to employers. One commenter considered that the vast scope of coverage in the proposed rule is contrary to the ``economy and efficiency'' argument that justified issuance of the rule, as compared to other labor requirements attached to procurement.

Response: The Councils have narrowed the coverage to the extent possible yet still meeting the purpose of the Executive Order. The Councils are not charged with administration of the EVerify program and this process is not within its rulemaking authority or the scope of this final rule. The Councils have considered the burdens and costs associated with EVerify in the RIA and Regulatory Flexibility Analysis.

The EVerify registration process is an automated process that uses a registration wizard to assist employers in determining which access method will best suit their company needs. Once that is decided, the individual registering the company is required to enter the company contact information, including the number of company locations for which EVerify will be used and the address of these locations. Within 24 hours, that individual will receive an email from EVerify that includes their username and password which they will use to log on to the system. In midFY08, the EVerify program launched a registration reengineering effort aimed to streamline the EVerify registration process and shift to a profile based registration system. The program has been working with various stakeholders to determine and address the biggest concerns with the process, and hopes to conduct focus groups on ideas for improvement. The program has also undertaken a Plain Language Initiative, designed to simplify the language associated with the program and to update the materials associated with the program once the new verbiage has been finalized. Within this effort, the program also intends to conduct focus groups to determine the best response to various word choices.

With regard to the burdens or costs to employers to register and participate in EVerify, DHS has informed the Councils of a report entitled the ``Findings of the Web Basic Pilot Evaluation'' that was prepared by Westat in September 2007. The report may be found at http:/ /www.uscis.gov/files/article/WebBasicPilotRprtSept2007.pdf. The report found that 96 percent of longterm users indicated that EVerify was not burdensome. The Westat report also stated that approximately 97 percent of longterm users reported that the indirect setup and system maintenance costs were either no burden or only a slight burden and that the majority of employers reported that they spent $100 or less in initial setup costs. The Councils recognize that costs to employers will vary depending on employer characteristics and practices. b. Data Accuracy

Comment: Numerous commenters focused their concerns primarily on the reliance of the EVerify system on DHS and SSA databases that contain high percentages of errors. Many commenters, in particular, specifically call out the reported 4.1 percent error rate of the Social Security Administration's database as a large source of inaccurate data. Several commenters stated concern that DHS databases are not updated in realtime.

Many commenters also believe the inaccurate data in the database leads to the misidentification of workers and to denial of employment for workauthorized individuals, especially naturalized citizens and foreignborn authorized workers. Many commenters stated concerns that naturalized citizens or foreignborn authorized workers are considerably more likely to receive erroneous tentative
nonconfirmations than nativeborn U.S. citizens. One commenter questions the 0.5 percent ``error rate'' claimed by EVerify when the system is based on SSA databases with a 4 to 5 percent error rate.

One commenter feels data entry or ``human'' errors on the part of employers are of concern as well since they cannot be completely eliminated. Many commenters feel this issue especially affects employees with nontraditional or complex names.

Response: The improvements made to EVerify over the last few years have decreased the incidence of data mismatches, which is referred to as a ``tentative nonconfirmation'' in the EVerify program, and often referred to as the ``error rate'' by the public. DHS and SSA continue to analyze and implement improvements to reduce data mismatches as part of ongoing management of the EVerify program. The majority of mismatches are with SSA data, since the SSA database is the only source for citizen data, against which the large majority of EVerify queries are run. Instances of data inaccuracies include name changes due to marriage or divorce not reported to SSA, or, in the case of naturalized U.S. citizens, unreported changes in citizenship status. Most citizenship status mismatches that resolve as ``work authorized'' do involve naturalized citizens who have failed to notify SSA of their change in citizenship status. To reduce the number of SSA mismatches due to this situation, USCIS developed an automated check against the USCIS naturalization database for U.S. citizen new hires and provided employees who receive an SSA citizenship status mismatch notice the option of calling DHS directly to resolve it rather than resolving the mismatch with an inperson visit to an SSA field office. This has significantly reduced the burden of resolving tentative
nonconfirmations for naturalized citizens. The changes went into effect in May 2008, and preliminary data show a 30 percent decrease in the number of SSA tentative nonconfirmation for naturalized citizens.

It is important to clarify that if the EVerify program issues an initial mismatch to an employee, the employer cannot fire, prevent from working, or withhold or delay training or wages for that employee during the mismatch process. All employees receiving an initial mismatch are given the opportunity to contest to ensure that every employee who has a work authorized status is not prevented from working. All employees must be given the opportunity to contest and correct their records.

The Government recognizes the concerns over the SSA Office of the Inspector General Congressional Response Report (2006) estimates that 4.1 percent of their NUMIDENT database may contain discrepancies that could potentially affect 12.7 million individuals. The EVerify program,
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FOR FURTHER INFORMATION CONTACT

Ms. Meredith Murphy, Procurement Analyst, at (202) 2086925 for clarification of content. For information pertaining to status or publication schedules, contact the FAR Secretariat at (202) 5014755. Please cite FAC 200529, FAR case 2007013.