[Federal Register Volume 59, Number 48 (Friday, March 11, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-5745]


[[Page Unknown]]

[Federal Register: March 11, 1994]


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COMMITTEE FOR PURCHASE FROM PEOPLE WHO ARE BLIND OR SEVERELY DISABLED
 

Procurement List; Additions

AGENCY: Committee for Purchase From People Who Are Blind or Severely 
Disabled.

ACTION: Additions to the Procurement List.

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SUMMARY: This action adds to the Procurement List commodities to be 
furnished by nonprofit agencies employing persons who are blind or have 
other severe disabilities.

EFFECTIVE DATE: April 11, 1994.

ADDRESSES: Committee for Purchase From People Who Are Blind or Severely 
Disabled, Crystal Square 3, suite 403, 1735 Jefferson Davis Highway, 
Arlington, Virginia 22202-3461.

FOR FURTHER INFORMATION CONTACT: Beverly Milkman (703) 603-7740.

SUPPLEMENTARY INFORMATION: On November 30, 1992, the Committee for 
Purchase From People Who Are Blind or Severely Disabled published 
notices (57 FR 56569) of proposed additions to the Procurement List.
    Comments were received from one of the current contractors for the 
stencil sets at the time of the Federal Register notice proposing 
addition of the stencils to the Procurement List, as well as from two 
Members of Congress who urged that the contractor's comments be 
seriously considered. Because considerable time has elapsed since that 
notice, the Committee wrote to the contractor on January 11, 1994 to 
afford it an opportunity to update its comments on the proposed action. 
The contractor's responses to this letter are addressed in the 
following paragraphs, along with its initial response to the notice 
proposing the addition of the stencil sets to the Procurement List.
    The contractor indicated that the stencil sets, while not making up 
a very large part of the dollar value of its sales, did represent a 
significant numerical part of its sales. The company said it has been a 
longtime supplier of stencil sets to the Government, and its Government 
sales enable it to remain competitive with other suppliers, even though 
it has to offer prices to the Government which are substantially below 
its commercial prices in order to keep the Government business. The 
company stated that it is the last American manufacturer of brass 
interlocking stencils, and is having to compete against an importer of 
foreign stencils.
    The contractor indicated that loss of the ability to sell these 
stencil sets to the Government would result in the loss of seven well 
paid jobs for individuals who would be unable to find comparable 
employment. It would also deprive a nonprofit agency employing people 
with severe disabilities of the opportunity to provide employment for 
those people in packaging the stencils.
    The company noted that it would have to absorb a loss in unusable 
inventory if it could no longer produce the stencil sets for the 
Government. It also noted that substantial start-up costs are involved 
in producing the stencils. The contractor questioned whether the 
nonprofit agency proposed by the Committee to produce the stencils 
could acquire the necessary equipment and learn to use it successfully 
in the time available before it would have to fill Government orders, 
and the wisdom of setting aside 100% of the Government requirement for 
the stencils under these circumstances.
    The contractor questioned whether the Committee has given proper 
notice of its current action, because it has not republished its 
November 1992 notice of proposed rulemaking. The contractor contends 
that the Committee made a final decision in 1993 on its 1992 proposal. 
If this is true, the current Committee action would be a new rulemaking 
which should have been announced as a new proposal in the Federal 
Register.
    The Committee's key measure of impact on a contractor has 
traditionally been the percentage of the dollar value of the 
contractor's total annual sales which it will lose as a result of an 
addition to the Procurement List. Viewed in this light, addition of the 
stencil sets to the Procurement List would not have a severe adverse 
impact on the contractor. However, as indicated in the following 
paragraphs, the Committee believes that, while consideration of all of 
the points made by the contractor would not result in a finding of 
severe adverse impact, the circumstances, particularly the contractor's 
efforts to subcontract with nonprofit agencies employing persons with 
severe disabilities, warrant some ameliorative action.
    Accordingly, the Committee has decided to add all seven stencil 
sets to the Procurement List, but to grant a one-year purchase 
exception which will permit the Government to purchase its annual 
requirement for three of the stencil sets from the commercial market 
one last time. If the commenting contractor is successful in competing 
for the contract, it will be able to use at least some of the inventory 
which it claims would otherwise be useless. Moreover, the nonprofit 
agency which the Committee is authorizing to produce the stencil sets 
has expressed an interest in exploring with the current contractor the 
purchase of its surplus inventory.
    The Committee has considered the contractor's record as a long-time 
supplier of these stencil sets to the Government. However, as the 
contractor admitted, it has not won the contract to supply all the 
stencils every year, and the price of winning it has been to cut its 
prices severely. The contractor even implied that this competitive 
process drove the other American stencil manufacturer out of business. 
Also, no contractor is guaranteed a contract in the competitive bidding 
process. Under these circumstances, the Committee does not believe that 
the contractor's record as a supplier of the stencil sets adds enough 
to the other impact factors it mentioned to constitute severe adverse 
impact on the contractor.
    Addition of the stencil sets to the Procurement List will create a 
larger number of jobs for people with severe disabilities than it will 
lose for contractor employees. The unemployment rate for people with 
severe disabilities is considerably higher than it is for people 
without disabilities, even in labor surplus areas. Consequently, the 
Committee believes that the possible loss of jobs for the contractor's 
employees, who can more easily find other jobs than people with severe 
disabilities, is outweighed by the creation of jobs by the Committee's 
action.
    The nonprofit agency which was packaging the stencil sets for the 
contractor has informed the Committee that this task had not yet 
created much work for its employees with severe disabilities, and that 
it did not object to the Committee's action. The contractor has offered 
to enter into a similar arrangement with another agency employing 
people with disabilities. However, the Committee notes that such an 
arrangement would be totally at the discretion of the contractor and 
would require the contractor to reduce work available to its current 
employees, an outcome the contractor has indicated is not desirable. 
More importantly, unlike the Committee's program, this arrangement--
even if it were not discretionary--does not guarantee that the work 
will continue to be done by people with severe disabilities because the 
contractor has no guarantee that it will continue to receive contracts 
for any or all of the stencil sets.
    The Committee did not make a decision on adding the stencil sets to 
the Procurement List in 1993. As the contractor predicted, questions 
about the nonprofit agency's capability delayed the project. However, 
these problems have been solved, and the nonprofit agency now meets the 
Committee's capability requirements. It should be noted that the 
contractor did not renew its questions about the nonprofit agency's 
capability in its 1994 comments.
    Because the Committee did not make a decision on the proposal to 
add the stencil sets to the Procurement List in 1993, it was not 
necessary to publish a new notice of proposed rulemaking before this 
regulatory action could be completed. The Committee even exceeded due 
process requirements by affording the contractor an opportunity to 
update its comments. Accordingly, the Committee rejects the 
contractor's challenge to the adequacy of due process in this 
rulemaking.
    After consideration of the material presented to it concerning 
capability of qualified nonprofit agencies to provide the commodities, 
fair market price, and impact of the addition on the current or most 
recent contractors, the Committee has determined that the commodities 
listed below are suitable for procurement by the Federal Government 
under 41 U.S.C. 46-48c and 41 CFR 51-2.4.
    I certify that the following action will not have a significant 
impact on a substantial number of small entities. The major factors 
considered for this certification were:
    1. The action will not result in any additional reporting, 
recordkeeping or other compliance requirements for small entities other 
than the small organizations that will furnish the commodities to the 
Government.
    2. The action does not appear to have a severe economic impact on 
current contractors for the commodities.
    3. The action will result in authorizing small entities to furnish 
the commodities to the Government.
    4. There are no known regulatory alternatives which would 
accomplish the objectives of the Javits-Wagner-O'Day Act (41 U.S.C. 46-
48c) in connection with the commodities proposed for addition to the 
Procurement List.
    Accordingly, the following commodities are hereby added to the 
Procurement List:

Stencil Set, Marking

7520-00-205-1760
7520-00-269-9012
7520-00-272-9680
7520-00-272-9683
7520-00-272-9684
7520-00-298-7043
7520-00-298-7044

    This action does not affect current contracts awarded prior to the 
effective date of this addition or options exercised under those 
contracts.
Beverly L. Milkman,
Executive Director.
[FR Doc. 94-5745 Filed 3-10-94; 8:45 am]
BILLING CODE 6820-33-P