[Federal Register Volume 59, Number 220 (Wednesday, November 16, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-28191]


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[Federal Register: November 16, 1994]


_______________________________________________________________________

Part IV





Committee for Purchase From People Who Are Blind or Severely Disabled





_______________________________________________________________________



41 CFR Part 51-2, et al.




Revisions to Committee Regulations; Final Rule
COMMITTEE FOR PURCHASE FROM PEOPLE WHO ARE BLIND OR SEVERELY 
DISABLED

41 CFR Parts 51-2, 51-3, 51-4, 51-5, 51-6, 51-8, and 51-9

 
Revisions to Committee Regulations

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

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: This final rule updates the regulations of the Committee for 
Purchase From People Who Are Blind or Severely Disabled to reflect 
developments and changes in Committee procedures which have occurred 
since the regulations were last substantively revised in 1991, and to 
include wording changes that were overlooked in that revision. The new 
revisions were made necessary by changes in the Government procurement 
process, of which the Committee's program is a part, and by the 
Committee's experiences since 1991, including litigation, which have 
demonstrated that the regulations do not always clearly reflect the 
authorities given the Committee by the Javits-Wagner-O'Day (JWOD) Act 
and other laws as implemented in its procedures. The rule will enable 
the JWOD Program to operate more efficiently to fulfill the Committee's 
mission of increasing employment opportunities for people with severe 
disabilities through the Government procurement process.

EFFECTIVE DATE: December 16, 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: G. John Heyer (703) 603-7740. Copies 
of this notice will be made available on request in Wordperfect 5.1 
format on diskette.

SUPPLEMENTARY INFORMATION: The Committee's regulations were last 
substantively amended in 1991 (56 FR 48974, effective October 28, 
1991). Those amendments were the result of the first comprehensive 
review of the regulations since their promulgation in 1973. The purpose 
of the current revision to the regulations is to update them to reflect 
developments and changes in procedures since 1991, and to include 
changes that were overlooked in the last revision.
    Among the changes to part 51-2 on Committee responsibilities, 
Sec. 51-2.2(b) has been amended to make clear that the Committee 
authorizes and deauthorizes both central nonprofit agencies and 
nonprofit agencies employing people who are blind or have other severe 
disabilities to accept orders from Government agencies under the 
Committee's program. Section 51-2.3 is amended to indicate that the 
Committee publishes notices of proposed deletions and additions to the 
Procurement List and to require interested persons who submit bound 
comments on these proposals to also submit an unbound copy to be 
duplicated for staff use.
    Sections 51-2.4, 51-2.7, and 51-3.2 have been amended to make them 
consistent with the JWOD Act, which considers a determination that a 
commodity or service is suitable for addition to the Procurement List 
and the establishment of an initial fair market price for the commodity 
or service to be two legally separate actions. The confusing term 
``current or most recent contractor'' in Sec. 51-2.4 has been changed 
to ``current contractor.'' An explanation of those rare instances when 
``current contractor'' means ``most recent contractor'' will be 
addressed in the Committee's procedural memoranda. The Committee's 
position that the ``current contractor'' includes affiliated companies 
and parent corporations is explicitly stated in the amended Sec. 51-
2.4. A provision has been added to Sec. 51-2.4 to express the 
Committee's position that its discretion to determine what commodities 
and services are suitable for addition to the Procurement List is not 
totally constrained by the enumerated criteria in the section. Section 
51-2.7 has also been rewritten to reflect current Committee pricing 
practices.
    Section 51-2.5 has been amended to make clear that when the 
Committee decides that a proposed addition is likely to have a severe 
adverse impact on a current contractor, it will decide either to reduce 
the portion of the Government requirement for the commodity or service 
to be added to the Procurement List or will decline to add it. The 
Committee's standard for reconsidering a decision to add a commodity or 
service to the Procurement List, which appears in an internal 
memorandum, has been added to Sec. 51-2.6.
    Section 51-3.3, which deals with assignment of a commodity or 
service to a central nonprofit agency for possible addition to the 
Procurement List, and Secs. 51-6.4 and 51-6.12, which deal with 
military resale commodities and specification changes respectively, 
have been rewritten to clarify their language. Small editorial changes 
for clarity have been made in Secs. 51-4.2 and 51-5.2. Recordkeeping 
provisions in Sec. 51-4.3 have been changed to permit acceptance of 
State certifications of disability to document individuals' disability 
status in accordance with recent changes in Federal disability 
regulations. The section title ``Violations'' used for both Secs. 51-
4.5 and 51-5.8 has been changed to indicate that the former applies to 
violations of Committee regulations by nonprofit agencies and the 
latter to violations by entities of the Government.
    Section 51-5.3, which sets forth the scope of the mandatory 
procurement source requirement of the JWOD Program, has been amended to 
indicate that the requirement applies to items that are essentially the 
same as commodities identified on the Procurement List by a National 
Stock Number or other item designation. This change was made necessary 
by the increasing number of commercial items in the system which are 
essentially the same as Procurement List commodities. A similar change 
was made in Sec. 51-6.13 on replacement and similar commodities. A new 
paragraph was added to Sec. 51-5.3 to set forth the Committee's 
longstanding policy that Procurement List additions do not affect 
contracts in being before the effective date of the addition, or 
options exercised under those contracts.
    The minimum figure for prior Committee approval of purchase 
exceptions granted by central nonprofit agencies in Sec. 51-5.4 has 
been raised from $25,000 to the simplified acquisition threshold 
established by the Federal Acquisition Streamlining Act of 1994, 
currently $100,000. Sections 51-5.5 and 51-5.6 on prices and shipping 
of commodities have been amended to allow for pricing and delivery on 
an FOB destination basis, consistent with recent developments in 
Government ordering procedures, as well as the Committee's traditional 
FOB origin practice.
    Section 51-6.2 has been amended in paragraph (f) to correct an 
undetected typographical error in the 1991 amendments. Section 51-6.8 
on deletions from the Procurement List has been amended by adding a 
paragraph making it clear that the Committee can delete a commodity or 
service from the Procurement List without a request from a central 
nonprofit agency. A new paragraph has been added to Sec. 51-6.12 on 
specification changes to indicate that nonprofit agencies are to 
recommend changes that will improve the commodity or service being 
provided, reduce costs, or improve overall value to the Government. The 
paragraph also requires contracting activities to respond promptly to 
the recommendations. Section 51-6.13 has been amended to clarify its 
language and to indicate that other colors, sizes, or variations of 
commodities on the Procurement List which have not been recently 
procured are considered to be on the Procurement List as well.
    Section 51-8.3, consisting of definitions applicable only to part 
51-8 on Committee actions under the Freedom of Information Act (FOIA), 
has been amended by removing the definition of the Committee, which 
also appears in the general definitions for the Committee's regulations 
at Sec. 51-1.3, and by changing the title ``Chairman'' to 
``Chairperson'' as the title of the Committee's presiding officer. The 
same change to ``Chairperson'' has also been made in Secs. 51-8.7, 51-
8.10, 51-8.11 and 51-9.405.
    Changes have been made to Secs. 51-8.1 and 51-8.4 and to paragraph 
(a) of Sec. 51-8.5 to make clear the distinction between material which 
the Committee is required to make available for public inspection and 
material which the Committee provides in response to a FOIA request. 
The provision in Sec. 51-8.14 for a minimum amount for FOIA processing 
costs below which no fee will be charged has been qualified to indicate 
that the minimum will apply to each Committee response to a FOIA 
request where it is necessary to make more than one response to a 
request. The Committee bills FOIA requesters separately for each 
response, which requires a decision each time as to whether the cost of 
collection would exceed the amount billed.

Public Comments on the Proposed Rule

    The Committee published the proposed rule in the Federal Register 
of July 27, 1994 (59 FR 38318). Eighteen commenters submitted comments 
on the proposed rule. Thirteen of these commenters supported the rule 
as proposed, and were particularly supportive of the proposed changes 
to Secs. 51-2.4, 51-2.7, and 51-3.2 to make them consistent with the 
JWOD Act distinctions between suitability and fair market price 
determinations.
    One commenter suggested that Sec. 51-2.3 on notice of proposed 
Procurement List additions and deletions be amended to require actual 
notice to current contractors for the commodities or services being 
considered, and to require the Committee to publish notice of the 
proposal in the Commerce Business Daily as well as the Federal 
Register, in order to provide wider notice of the Committee's 
proposals. The Committee has considered this suggestion in the past. 
However, the Committee has concluded that the benefits which adopting 
this suggestion might provide are outweighed by the considerable 
administrative burden which would be imposed on the Committee's small 
staff. The Committee already writes to current contractors when it is 
unable to obtain sales data on them from a financial reporting service, 
and experience has shown that some contractors do not respond and those 
who do rarely provide persuasive comments with their responses. In many 
cases, Government contracting activities, trade associations, or other 
persons are already notifying current contractors and other affected 
parties of the Committee's intentions. Under these circumstances, the 
Committee does not consider it appropriate to extend its notice of 
proposed actions beyond that which is mandated by law.
    The same commenter also suggested that the employment potential 
requirement for a Committee determination that a commodity or service 
is suitable for addition to the Procurement List, at newly redesignated 
Sec. 51-2.4(a)(1), be changed to require the addition to generate 
employment for a larger number of persons who are blind or have severe 
disabilities than is performed by such employees of the current 
contractor in connection with the commodity or service. The Committee 
does not believe this change is necessary because it is already 
required by law to consider and respond to all significant comments it 
receives when it makes a Procurement List addition decision. It should 
also be noted that the Committee's regulatory definition of persons 
with severe disabilities (41 CFR 51-1.3) requires them to be incapable 
of normal competitive employment over an extended period of time, a 
test which employees of a competitive contractor could not meet.
    This commenter also suggested that an additional factor be added to 
those listed in newly redesignated Secs. 51-2.4(a)(4)(i)(A) through (C) 
concerning elements of impact on a current contractor to which the 
Committee gives particular attention in making a suitability 
determination, to require the consideration of whether the contractor 
has made an unrecovered capital or training investment in connection 
with the commodity or service, and whether losing the contract will 
cause idle productive capacity or unemployment in a labor surplus area. 
The Committee believes this change is not needed because it already 
considers any comments of this nature it receives as required by the 
rulemaking statute. The Committee is also required by Sec. 51-
2.4(a)(4)(i)(C) to give particular attention to comments received on 
contractor impact as a result of its notice proposing addition of the 
commodity or service to the Procurement List.
    Another commenter objected to the proposed addition to Sec. 51-
2.4(a)(4)(i)(A) of language indicating that the Committee looks at the 
impact on a current contractor's total sales, including sales of 
affiliated companies and parent corporations, in determining the 
suitability of an addition to the Procurement List. The commenter felt 
this position is unfair, as it can result in a heavy impact on a 
corporate division. As indicated in the proposed rule, the Committee 
believes that the new language is nothing more than a clarification of 
its existing policy in this area, which it recently reaffirmed. Given 
the ability of large corporations to shift assets between divisions, 
the Committee does not believe it would be fair to the nonprofit 
agencies participating in the Committee's program to assess impact on a 
part of a large corporation in the same manner as a small independent 
business.
    This same commenter objected to new language in Sec. 51-2.5 
concerning the addition to the Procurement List of a commodity or 
service ``in whole or in part.'' The commenter felt that this language 
would permit the Committee to extend the reach of a Procurement List 
addition beyond a particular commodity into a larger line of 
commodities. The Committee believes that the commenter misunderstood 
the intent of the change, which was discussed in the proposed rule. The 
Committee's intent was to clarify an existing provision which permits 
the Committee, when it decides that a proposed addition to the 
Procurement List of the total Government requirement for a commodity or 
service is likely to have a severe adverse impact on a current 
contractor, to add only a part of the requirement to lessen the impact 
on the contractor. There is no intent in this language to permit the 
expansion of the addition beyond what is specifically stated in the 
final rule making a Procurement List addition.
    Another commenter suggested that the phrase ``harm to the 
contracting activity'' in Sec. 51-2.6(b) listing the factors the 
Committee addresses when reconsidering a Procurement List addition 
decision be changed to ``harm to the Government'' to allow 
consideration of harm to ultimate Government users of items purchased 
for them under the Committee's program by contracting activities. The 
Committee agrees with the commenter and has amended Sec. 51-2.6(b) 
accordingly.
    The same commenter suggested that language in Sec. 51-2.7 requiring 
the Committee to consider recommendations from contracting activities 
in setting initial fair market prices not based on competitive bids be 
broadened to permit contracting activity comments on all Committee 
pricing determinations. The Committee does not agree with the 
commenter. When initial fair market prices are established based on 
bids, the process is an automatic one based on the bid history of the 
commodity or service in question. There is no place for comments, 
unlike the alternate process of setting prices based on nonprofit 
agency costs, where a wider variety of information is allowable to 
determine what these costs actually are. As the commenter noted, the 
Committee has allowed contracting activities to make comments on 
pricing determinations whenever appropriate, so a requirement to accept 
these comments is not necessary. The Committee has modified the 
sentence, however, to make it clear that the no-comment rule applies 
only to initial fair market price determinations based on competitive 
bids and not to price changes.
    One commenter noted that Sec. 51-2.7 provides some detail on the 
Committee's method of making initial fair market price determinations, 
but very little on how price changes are determined, which is set forth 
on Committee procedures. The Committee has modified Sec. 51-2.7 to 
identify the price change methods used and to make reference to the 
Committee procedures where the details are set forth.
    The same commenter also suggested that Sec. 51-2.7 be amended to 
prohibit the establishment of an initial fair market price that is more 
than twenty percent above the existing Government price for the 
commodity or service. Current Committee policy already prohibits such a 
high price, so a change in the regulations is not necessary.
    One commenter asked for clarification of the term ``other persons'' 
in a new sentence in Sec. 51-5.2(e) concerning ordering of Procurement 
List commodities available only from nonprofit agencies. This term is 
part of a phrase extending the mandatory source requirement applicable 
to Government agencies to others providing the commodities to the 
agencies by contract which already appears in Sec. 51-5.2(c) and (d), 
and is only added to make it clear that the same requirement applies to 
orders covered by Sec. 51-5.2(e) as well. While the Committee agrees 
with the commenter that the term was originally intended to apply in 
all three cases to commercial suppliers under contract to Government 
agencies, the Committee believes that the broader language is justified 
by the JWOD Act and is appropriate to address similar situations which 
might not be covered by a more restrictive term.
    Two commenters suggested that language added to Sec. 51-5.3(a) by 
the proposed rule to extend the mandatory source requirement to 
commodities ``essentially the same'' as those on the Procurement List 
be deleted, along with new Sec. 51-6.13(c) which indicates that 
contracting activities are not permitted to purchase commercial items 
that are essentially the same as commodities on the Procurement List. 
One of these commenters indicated that this language would allow the 
Committee to add commodities to the Procurement List without performing 
individual suitability evaluations. The other commenter objected to the 
lack of a definition for ``essentially the same,'' and indicated that 
the concept would make it difficult for contracting activities to 
comply with the Administration policy and new statutory mandate to 
acquire commercial products whenever possible.
    As the proposed rule implied, this change was made necessary by the 
recent threat of proliferation in the Government supply system of 
commercial items which are essentially identical to commodities 
produced under the JWOD Program. The purpose of the JWOD Act, to create 
employment for persons who are blind or have other severe disabilities, 
would be nullified if contracting activities could evade the JWOD Act's 
mandate simply by purchasing items which differed from JWOD Program 
commodities only in brand name or other insignificant features. The 
Committee, which includes a number of leading Government procurement 
officials, has carefully considered this change and has decided that it 
is important for the JWOD Program and within the intent of the JWOD 
Act.
    The Committee does not intend to use this concept as a substitute 
for individual evaluation of new commodities to determine their 
suitability for addition to the Procurement List. The concept will be 
used to identify commercial items which duplicate or differ only 
marginally from Procurement List commodities, to insure that 
contracting activities do not purchase the former instead of the 
latter. The Committee is already working actively with one of the JWOD 
Program's major Government customers to identify such commercial items. 
Because these determinations must be made on a case by case basis, the 
Committee does not believe that a specific definition of the concept is 
possible. The Committee does believe that the JWOD Program and the 
commercial items acquisition policy can coexist successfully, and that 
this new concept will be a useful tool for assuring that this will 
happen.
    One commenter suggested that the phrase ``simplified acquisition 
threshold'' be used instead of the figure ``$100,000'' as the limit for 
central nonprofit agency issuance of purchase exceptions without 
Committee approval stated in Sec. 51-5.4. The commenter noted that this 
change would make the provision consistent with the new procurement 
reform statute and would avoid the need for further changes in the 
Committee's regulation if the threshold changed in the future. The 
Committee has adopted this suggestion. As the proposed rule indicated, 
the Committee's intent in changing the figure from $25,000 to $100,000 
was to be consistent with this legislation.
    One commenter noted that the policy of stocking military resale 
commodities, which is set forth in Sec. 51-6.4, has been changed to 
require exclusive stocking of commodities in the 800- as well as 900-
series. The Committee has revised the section accordingly.
    One commenter requested clarification of the pricing of replacement 
commodities as described in Sec. 51-6.13(a). The Committee has revised 
the provision to make it clear that the fair market price is the one 
set for the replacement commodity, not the price for the commodity 
being replaced.
    Another commenter objected to the substitution of the word 
``recently'' for ``previously'' in the description of a replacement 
commodity in Sec. 51-6.13(a) as one ``which has not been recently 
procured.'' The commenter recommended the use of a specific period of 
time in this context, such as ``one year.'' The Committee believes this 
recommendation would make the provision unnecessarily restrictive, 
particularly if a one-year limit were adopted, and would deny the 
Committee the flexibility it needs to respond to individual 
circumstances.
    One commenter objected to the term ``other variations'' in new 
Sec. 51-6.13(b), which extends Procurement List status to additional 
sizes, colors, or other variations of a commodity on the Procurement 
List if these similar commodities have not been recently procured. 
Another commenter, on the other hand, applauded this additional size, 
color, and variation terminology as clarifying the scope of what a 
Procurement List commodity is.
    Like the ``essentially the same'' concept discussed earlier in this 
notice, the Committee considers the language in Sec. 51-6.13(b) which 
the commenters have noted to be an important part of defining the scope 
of a Procurement List commodity in the new Government procurement 
environment. The term ``other variations'' is necessary to reach items 
which are essentially the same as Procurement List commodities where 
the difference cannot be defined in terms of size or color. 
Consequently, deletion of the term from Sec. 51-6.13(b) would deny the 
Committee the flexibility it needs to carry out its mission.
    A commenter suggested that the Committee regulations should contain 
a provision allowing contracting officers to terminate for default 
nonprofit agencies which fail to perform as required, and/or to apply 
liquidated damages in such instances. Because of the differences in the 
JWOD Program from competitive contracting, particularly the statutory 
mandatory source requirement, the Committee has long used an 
alternative method of resolving contractor performance problems. This 
method is set forth in Part 51-6 of the Committee's regulations, and 
includes a dispute resolution procedure which involves the central 
nonprofit agency concerned in situations which cannot be resolved 
between the nonprofit agency and the contracting officer, with a right 
of appeal to the Committee, as well as a purchase exception procedure 
which affords the contracting activity relief from the mandatory source 
requirement in cases where the nonprofit agency truly cannot meet the 
Government's requirements. The Committee has also allowed price 
reductions and other consideration in return for late deliveries, in 
appropriate circumstances. In light of the existence of these 
procedures, which have worked well over the years to minimize disputes 
and speed their resolution, the Committee does not believe that the 
approach suggested by the commenter would be an improvement, and it 
would deny the Committee the flexibility it needs to make its program 
run effectively.

Regulatory Flexibility Act

    I certify that this revision of the Committee regulations will not 
have a significant economic impact on a substantial number of small 
entities because the revisions basically update and clarify program 
policies and procedures and do not essentially change the impact of the 
regulations on small entities.

Paperwork Reduction Act

    The Paperwork Reduction Act does not apply to this regulatory 
revision because it contains no information collection or recordkeeping 
requirements as defined in that Act and its regulations.

Executive Order No. 12866

    The Committee has been exempted from the regulatory review 
requirements of the Executive Order by the Office of Information and 
Regulatory Affairs. Additionally, this revision to the Committee's 
regulations is not a significant regulatory action as defined in the 
Executive Order.

List of Subjects

41 CFR Parts 51-2 Through 51-6

    Government procurement, Handicapped, Organization and functions 
(Government agencies), Reporting and recordkeeping requirements.

41 CFR Part 51-8

    Freedom of information.

41 CFR Part 51-9

    Privacy.

    For the reasons set out in the preamble, parts 51-2 through 51-6, 
51-8 and 51-9 of title 41, chapter 51 of the Code of Federal 
Regulations are amended as follows:
    1. The authority citation for parts 51-2 through 51-6 continues to 
read as follows:

    Authority: 41 U.S.C. 46-48C.

PART 51-2--COMMITTEE FOR PURCHASE FROM PEOPLE WHO ARE BLIND OR 
SEVERELY DISABLED

    2. Section 51-2.2 is amended by adding the following sentence at 
the end of paragraph (b):


Sec. 51-2.2  Powers and responsibilities.

* * * * *
    (b) * * * Authorize and deauthorize central nonprofit agencies and 
nonprofit agencies to accept orders from contracting activities for the 
furnishing of specific commodities and services on the Procurement 
List.
* * * * *
    3. Section 51-2.3 is revised to read as follows:


Sec. 51-2.3  Notice of proposed addition or deletion.

    At least 30 days prior to the Committee's consideration of the 
addition or deletion of a commodity or service to or from the 
Procurement List, the Committee publishes a notice in the Federal 
Register announcing the proposed addition or deletion and providing 
interested persons an opportunity to submit written data or comments on 
the proposal. Interested persons submitting comments in bound form 
should also submit an unbound copy that is capable of being legibly 
photocopied.
    4. Section 51-2.4 is amended by removing paragraph (d), 
redesignating the introductory text and paragraphs (a) through (c) as 
paragraphs (a) through (a)(3), redesignating paragraphs (e) through 
(e)(3) as paragraphs (a)(4) through (a)(4)(ii), revising the newly 
redesignated paragraphs (a), introductory text, (a)(4) through 
(a)(4)(ii), and adding paragraph (b) to read as follows:


Sec. 51-2.4  Determination of suitability.

    (a) For a commodity or service to be suitable for addition to the 
Procurement List, each of the following criteria must be satisfied:
* * * * *
    (4) Level of impact on the current contractor for the commodity or 
service. (i) In deciding whether or not a proposed addition to the 
Procurement List is likely to have a severe adverse impact on the 
current contractor for the specific commodity or service, the Committee 
gives particular attention to:
    (A) The possible impact on the contractor's total sales, including 
the sales of affiliated companies and parent corporations. In addition, 
the Committee considers the effects of previous Committee actions.
    (B) Whether that contractor has been a continuous supplier to the 
Government of the specific commodity or service proposed for addition 
and is, therefore, more dependent on the income from such sales to the 
Government.
    (C) Any substantive comments received as the result of the notice 
of the proposed addition in the Federal Register.
    (ii) If there is not a current contract for the commodity or 
service being proposed for addition to the Procurement List, the 
Committee may consider the most recent contractor to furnish the item 
to the Government as the current contractor for the purpose of 
determining the level of impact.
    (b) In determining the suitability of a commodity or service for 
addition to the Procurement List, the Committee also considers other 
information it deems pertinent, including comments on a proposal 
published in the Federal Register to add the commodity or service to 
the Procurement List and information submitted by Government personnel 
and interested persons.
    5. Section 51-2.5 is revised to read as follows:


Sec. 51-2.5  Committee decision.

    The Committee considers the particular facts and circumstances in 
each case in determining if a commodity or service is suitable for 
addition to the Procurement List. When the Committee determines that a 
proposed addition is likely to have a severe adverse impact on a 
current contractor, it takes this fact into consideration in deciding 
not to add the commodity or service to the Procurement List, or to add 
only a portion of the Government requirement for the item. If the 
Committee decides to add a commodity or service in whole or in part to 
the Procurement List, that decision is announced in the Federal 
Register with a notice that includes information on the effective date 
of the addition.
    6. Section 51-2.6 is amended by redesignating the current text of 
the section as paragraph (a) and adding paragraph (b) to read as 
follows:


Sec. 51-2.6  Reconsideration of Committee decision.

    (a) * * *
    (b) In reconsidering its decision, the Committee will balance the 
harm to the party requesting reconsideration if the item remains on the 
Procurement List against the harm which the nonprofit agency or its 
employees who are blind or have other severe disabilities would suffer 
if the item were deleted from the Procurement List. The Committee may 
also consider information bringing into question its conclusions on the 
suitability criteria on which it based its original decision as factors 
weighing toward a decision to delete the item, and information 
concerning possible harm to the Government and the JWOD Program as 
factors weighing toward confirmation of the original decision.
    7. Section 51-2.7 is revised to read as follows:


Sec. 51-2.7  Fair market price.

    The Committee is responsible for determining the fair market 
prices, and changes thereto, for commodities and services on the 
Procurement List. The Committee establishes the initial fair market 
price at the time a commodity or service is added to the Procurement 
List. In cases where initial prices are not based on competitive bids, 
the Committee considers recommendations from contracting activities and 
the central nonprofit agency concerned. Prices are revised in 
accordance with changing market conditions as reflected primarily by 
economic indices and changes in nonprofit agency costs, as provided in 
Committee pricing procedures. Recommendations for fair market prices or 
changes thereto shall be submitted by the nonprofit agencies to the 
appropriate central nonprofit agency. The central nonprofit agency 
shall analyze the data and submit a recommended fair market price to 
the Committee accompanied by the information required by the 
Committee's pricing procedures to support the recommended price.

PART 51-3--CENTRAL NONPROFIT AGENCIES

    8. Section 51-3.2 is amended by revising paragraph (d), 
redesignating paragraphs (e) through (m) as paragraphs (f) through (n), 
and adding a new paragraph (e) to read as follows:


Sec. 51-3.2  Responsibilities under the JWOD Program.

* * * * *
    (d) Recommend to the Committee, with the supporting information 
required by Committee procedures, suitable commodities or services for 
procurement from its nonprofit agencies.
    (e) Recommend to the Committee, with the supporting information 
required by Committee procedures, initial fair market prices for 
commodities or services proposed for addition to the Procurement List.
* * * * *
    9. Section 51-3.3 is revised to read as follows:


Sec. 51-3.3  Assignment of commodity or service.

    (a) The central nonprofit agencies shall determine by mutual 
agreement the assignment to one of them of a commodity or service for 
the purpose of evaluating its potential for possible future addition to 
the Procurement List, except that the Committee shall initially assign 
a commodity to National Industries for the Blind when NISH has 
expressed an interest in the commodity and National Industries for the 
Blind has exercised the blind priority.
    (b) NISH shall provide National Industries for the Blind with 
procurement information necessary for a decision to exercise or waive 
the blind priority when it requests a decision. National Industries for 
the Blind shall normally notify NISH of its decision within 30 days, 
but not later than 60 days after receipt of the procurement 
information, unless the two central nonprofit agencies agree to an 
extension of time for the decision. Disagreements on extensions shall 
be referred to the Committee for resolution.
    (c) If National Industries for the Blind exercises the blind 
priority for a commodity, it shall immediately notify the Committee and 
NISH and shall submit to the Committee a proposal to add the commodity 
to the Procurement List within nine months of the notification, unless 
the Committee extends the assignment period because of delays beyond 
the control of National Industries for the Blind. Upon expiration of 
the assignment period, the Committee shall reassign the commodity to 
NISH.
    (d) The central nonprofit agency assigned a commodity shall obtain 
a decision from Federal Prison Industries on the exercise or waiver of 
its priority and shall submit the procurement information required by 
Federal Prison Industries when it requests the decision. Federal Prison 
Industries shall normally notify the central nonprofit agency of its 
decision within 30 days, but not later than 60 days after receipt of 
the procurement information, unless it agrees with the central 
nonprofit agency on an extension of time for the decision. The central 
nonprofit agency shall refer a disagreement over an extension to the 
Committee for resolution with Federal Prison Industries.
    (e) The central nonprofit agency shall provide the Committee the 
decision of Federal Prison Industries on the waiver or exercise of its 
priority when it requests the addition of the commodity to the 
Procurement List. NISH shall also provide the decision of National 
Industries for the Blind waiving its priority.

PART 51-4--NONPROFIT AGENCIES

    10. Section 51-4.2 is amended by revising paragraph (a)(1) 
introductory text, and (a)(2) introductory text, to read as follows:


Sec. 51-4.2  Initial qualification.

    (a) * * *
    (1) A privately incorporated nonprofit agency shall submit to the 
Committee through its central nonprofit agency the following documents, 
transmitted by a letter signed by an officer of the corporation or 
chief executive:
* * * * *
    (2) A State-owned or State-operated nonprofit agency, or a 
nonprofit agency established or authorized by a State statute other 
than the State corporation laws and not privately incorporated, shall 
submit to the Committee through its central nonprofit agency the 
following documents, transmitted by a letter signed by an officer of 
the wholly-owned State corporation or an official of the agency that 
directs the operations of the nonprofit agency, as applicable:
* * * * *
    11. Section 51-4.3 is amended by revising paragraphs (b)(6) and 
(c)(1) to read as follows:


Sec. 51-4.3  Maintaining qualification.

* * * * *
    (b) * * *
    (6) Maintain a file on each blind individual performing direct 
labor which contains a written report reflecting visual acuity and 
field of vision of each eye, with best correction, signed by a person 
licensed to make such an evaluation, or a State certification of 
blindness.
* * * * *
    (c) * * *
    (1) A written report signed by a licensed physician, psychiatrist, 
or qualified psychologist, reflecting the nature and extent of the 
disability or disabilities that cause such person to qualify as a 
person with a severe disability, or a State certification listing the 
disability or disabilities.
* * * * *
    12. Section 51-4.5 is amended by revising the section heading to 
read as follows:


Sec. 51-4.5  Violations by nonprofit agencies.

* * * * *

PART 51-5--CONTRACTING REQUIREMENTS

    13. Section 51-5.2 is amended by revising the section heading and 
paragraph (a) and adding a second sentence to paragraph (e) to read as 
follows:


Sec. 51-5.2  Mandatory source requirement.

    (a) Nonprofit agencies designated by the Committee are mandatory 
sources of supply for all entities of the Government for commodities 
and services included on the Procurement List, as provided in Sec. 51-
1.2 of this chapter.
* * * * *
    (e) * * * This requirement applies both to contracting activities 
and to other persons providing such commodities to them by contract.
* * * * *
    14. Section 51-5.3 is amended by revising the first sentence of 
paragraph (a) and adding paragraph (c) to read as follows:


Sec. 51-5.3  Scope of requirement.

    (a) When a commodity is included on the Procurement List, the 
mandatory source requirement covers the National Stock Number or item 
designation listed and commodities that are essentially the same as the 
listed item. * * *
* * * * *
    (c) When a commodity or service is added to the Procurement List, 
the addition does not affect contracts for the commodity or service 
awarded prior to the effective date of the Procurement List addition or 
options exercised under those contracts.
    15. Section 51-5.4 is amended by revising paragraph (d) and the 
second sentence of paragraph (f)(1) to read as follows:


Sec. 51-5.4  Purchase exceptions.

* * * * *
    (d) The central nonprofit agency shall obtain the approval of the 
Committee before granting a purchase exception when the value of the 
procurement exceeds the simplified acquisition threshold set forth in 
the Federal Acquisition Streamlining Act of 1994 or any subsequent 
amendments thereto.
* * * * *
    (f)* * *
    (1)* * * The deadline may be extended by the central nonprofit 
agency with, in cases of procurements exceeding the simplified 
acquisition threshold, the concurrence of the Committee.
* * * * *
    16. Section 51-5.5 is amended by revising paragraph (b) to read as 
follows:


Sec. 51-5.5  Prices.

* * * * *
    (b) Prices for commodities include applicable packaging, packing, 
and marking. Prices include transportation to point of delivery as 
specified in Sec. 51-5.6.
* * * * *
    17. Section 51-5.6 is revised to read as follows:


Sec. 51-5.6  Shipping.

    (a) Except as provided in paragraph (c) of this section for 
commodities other than military resale commodities, delivery is 
accomplished when a shipment is placed aboard the vehicle of the 
initial carrier. Time of delivery is when the shipment is released to 
and accepted by the initial carrier.
    (b) Method of transportation to destination shall normally be by 
Government bills of lading although the contracting activity may 
designate another method of transportation on its order, in accordance 
with Committee procedures. Government bills of lading may accompany 
orders or be otherwise furnished, but shall be supplied promptly. If 
the contracting activity fails to designate a method of transportation 
or furnish a Government bill of lading promptly, it shall constitute an 
excusable cause for delay in delivery.
    (c) The Committee may determine that for certain commodity orders, 
delivery is accomplished when the shipment is delivered to the 
purchaser's facility (plant, warehouse, store, lot, or other location 
to which shipment can be made). Time of delivery for these orders is 
when the shipment is released by the carrier and accepted by the 
purchaser. Under this method of transportation, the nonprofit agency 
will normally ship by commercial bills of lading and will be 
responsible for any loss or damage to the goods occurring before 
receipt of the shipment at the delivery point specified. The nonprofit 
agency will prepare and distribute commercial bills of lading, furnish 
a delivery schedule and designate the mode of delivering carrier, and 
pay all charges to the specified point of delivery.


Sec. 51-5.8  Violations by entities of the Government.

* * * * *
    18. Section 51-5.8 is amended by revising the section heading to 
read as set forth above.

PART 51-6--PROCUREMENT PROCEDURES

    19. Section 51-6.2 is amended by revising the second sentence in 
paragraph (f) to read as follows:


Sec. 51-6.2  Allocation process.

* * * * *
    (f)* * * When a request for allocation provides a delivery schedule 
(based on established lead times and time required for processing the 
allocation request) which cannot be met, the central nonprofit agency 
shall request a revision, which the contracting activity shall grant, 
if feasible, or the central nonprofit agency shall issue a purchase 
exception authorizing procurement from commercial sources as provided 
in Sec. 51-5.4 of this chapter.
* * * * *
    20. Section 51-6.4 is amended by revising paragraphs (a), (b), 
(c)(3), (c)(4), and (d), and the second sentence of paragraph (e) to 
read as follows:


Sec. 51-6.4  Military resale commodities.

    (a) Purchase procedures for ordering military resale commodities 
are available from the central nonprofit agencies. Authorized resale 
outlets (military commissary stores, Armed Forces exchanges and like 
activities of other Government departments and agencies) shall request 
the central nonprofit agency responsible for the military resale 
commodity being ordered to designate the nonprofit agency or its agent 
to which the outlets shall forward orders.
    (b) Authorized resale outlets shall stock military resale 
commodities in as broad a range as practicable. Authorized resale 
outlets may stock commercial items comparable to the military resale 
commodities they stock, except that military commissary stores shall 
stock military resale commodities in the 800- and 900-series 
exclusively, unless an exception has been granted on an individual 
store basis for the stocking of comparable commercial items for which 
there is a significant customer demand.
    (c) * * *
    (3) Issue guidance requiring commissary store personnel to maximize 
sales potential of military resale commodities.
    (4) Establish policies and procedures which reserve to its agency 
headquarters the authority to grant exceptions to the exclusive 
stocking of 800- and 900-series military resale commodities.
    (d) The Defense Commissary Agency shall provide the Committee a 
copy of each directive which relates to the stocking of military resale 
commodities in commissary stores, including exceptions authorizing the 
stocking of commercial items in competition with 800- and 900-series 
military resale commodities.
    (e) * * * Zone pricing is used for delivery to Alaska and Hawaii.
    21. Section 51-6.8 is amended by adding paragraph (e) to read as 
follows:


Sec. 51-6.8  Deletion of items from the Procurement List.

* * * * *
    (e) The Committee may delete an item from the Procurement List 
without a request from a central nonprofit agency if the Committee 
determines that none of the nonprofit agencies participating in the 
JWOD Program are capable and desirous of furnishing the commodity or 
service to the Government, or if the Committee decides that the 
commodity or service is no longer suitable for procurement from 
nonprofit agencies employing people who are blind or have other severe 
disabilities. In considering such an action, the Committee will consult 
with the appropriate central nonprofit agency, the nonprofit agency or 
agencies involved, and the contracting activity.
    22. Section 51-6.12 is amended by revising paragraphs (a), (c), and 
(d) and adding paragraph (e) to read as follows:


Sec. 51-6.12  Specification changes and similar actions.

    (a) Contracting activities shall notify the nonprofit agency or 
agencies authorized to furnish a commodity on the Procurement List and 
the central nonprofit agency concerned of any changes to the 
specification or other description of the commodity.
* * * * *
    (c) For services on the Procurement List, the contracting activity 
shall notify the nonprofit agency furnishing the service and the 
central nonprofit agency concerned at least 90 days prior to the date 
that any changes in the statement of work or other conditions of 
performance will be required.
    (d) If an emergency makes it impossible for a contracting activity 
to give the 90-day notice required by paragraphs (b) and (c) of this 
section, the contracting activity shall inform the nonprofit agency and 
the central nonprofit agency concerned of the reasons it cannot meet 
the 90-day notice requirement when it places the order or change 
notice.
    (e) Nonprofit agencies shall recommend changes in specifications, 
item descriptions, and statements of work that will improve the 
commodity or service being provided, reduce costs, or improve overall 
value to the Government. Contracting activities shall respond promptly 
to these recommendations and work with the nonprofit agencies to 
implement them when appropriate.
    23. Section 51-6.13 is revised to read as follows:


Sec. 51-6.13  Replacement and similar commodities.

    (a) When a commodity on the Procurement List is replaced by another 
commodity which has not been recently procured, and a nonprofit agency 
can furnish the replacement commodity in accordance with the 
Government's quality standards and delivery schedules, the replacement 
commodity is automatically considered to be on the Procurement List and 
shall be procured from the nonprofit agency designated by the Committee 
at the fair market price the Committee has set for the replacement 
commodity. The commodity being replaced shall continue to be included 
on the Procurement List until there is no longer a Government 
requirement for that commodity.
    (b) If contracting activities desire to procure additional sizes, 
colors, or other variations of a commodity after the commodity is added 
to the Procurement List, and these similar commodities have not 
recently been procured, these commodities are also automatically 
considered to be on the Procurement List.
    (c) In accordance with Sec. 51-5.3 of this chapter, contracting 
activities are not permitted to purchase commercial items that are 
essentially the same as commodities on the Procurement List.

PART 51-8--PUBLIC AVAILABILITY OF AGENCY MATERIALS

    24. The authority citation for Part 51-8 continues to read as 
follows:

    Authority: 5 U.S.C. 552.

    25. Section 51-8.1 is revised to read as follows:


Sec. 51-8.1  Purpose.

    These regulations implement the provisions of the ``Freedom of 
Information Act,'' 5 U.S.C. 552. They establish procedures under which 
the public may inspect and obtain copies of material maintained by the 
Committee, provide for administrative appeal of initial determinations 
to deny requests for material, and prescribe fees to be charged by the 
Committee to recover search, review, and duplication costs.
    26. Section 51-8.3 is amended by revising the introductory text of 
the section, removing paragraph (b), redesignating paragraphs (c) 
through (i) as paragraphs (b) through (h), and revising newly 
redesignated paragraph (b), to read as follows:


Sec. 51-8.3  Definitions.

    As used in this part:
    (a) * * *
    (b) The term Chairperson means the Chairperson of the Committee for 
Purchase From People Who Are Blind or Severely Disabled.
* * * * *
    27. Section 51-8.4 is revised to read as follows:


Sec. 51-8.4  Availability of materials.

    Material described in 5 U.S.C. 552(a)(2) shall be available for 
inspection during normal business hours at the Committee's offices, 
Crystal Square 3, Suite 403, 1735 Jefferson Davis Highway, Arlington, 
Virginia 22202-3461. An individual who intends to visit the Committee 
offices to inspect this material shall make an appointment with the 
Executive Director at least one week in advance, except when the 
Committee has provided notification to the individual that the material 
is available for inspection in the Committee offices, in which case an 
appointment must be made at least 24 hours in advance.
    28. Section 51-8.5 is amended by revising the first sentence in 
paragraph (a) to read as follows:


Sec. 51-8.5  Requests for records.

    (a) Requests to obtain copies of any material maintained by the 
Committee must be submitted in writing to the Executive Director at the 
Committee's offices, Crystal Square 3, Suite 403, 1735 Jefferson Davis 
Highway, Arlington, Virginia 22202-3461. * * *
* * * * *


Sec. 51-8.7  [Amended]

    29. Section 51-8.7 is amended by removing ``Chairman'' where it 
appears in paragraph (e) and replacing it with ``Chairperson.''


Sec. 51-8.10  [Amended]

    30. Section 51-8.10 is amended by removing ``Chairman'' where it 
appears in paragraphs (a), (b), (c), and (d) and replacing it with 
``Chairperson'' in each place it occurs.


Sec. 51-8.11  [Amended]

    31. Section 51-8.11 is amended by removing ``Chairman'' where it 
appears in paragraph (a) and replacing it with ``Chairperson.'' 32. 
Section 51-8.14 is amended by revising paragraph (c) to read as 
follows:


Sec. 51-8.14  Fee waivers and reductions.

* * * * *
    (c) Fees shall be waived in all circumstances where the amount of 
the fee is $10 or less as the cost of collection would be greater than 
the fee. This minimum shall be applied separately to each Committee 
response when it is necessary for the Committee to make more than one 
response to a request for records.

PART 51-9--PRIVACY ACT RULES

    33. The authority citation for Part 51-9 is revised to read as 
follows:

    Authority: 5 U.S.C. 552a.


Sec. 51-9.405  [Amended]

    34. Section 51-9.405 is amended by removing ``Chairman'' wherever 
it appears in each paragraph of the section and replacing it with 
``Chairperson'' in each place it occurs.

    Dated: November 9, 1994.
Beverly L. Milkman,
Executive Director.
[FR Doc. 94-28191 Filed 11-15-94; 8:45 am]
BILLING CODE 6820-33-P