[Federal Register Volume 61, Number 120 (Thursday, June 20, 1996)]
[Rules and Regulations]
[Pages 31662-31663]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-14543]



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DEPARTMENT OF DEFENSE
48 CFR Part 46

[FAC 90-39; FAR Case 92-027; Item XXVIII]
RIN 9000-AF80


Federal Acquisition Regulation; Quality Assurance Nonconformances

AGENCIES: Department of Defense (DOD), General Services Administration 
(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Final rule.

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SUMMARY: The Civilian Agency Acquisition Council and the Defense 
Acquisition Regulations Council have agreed on a final rule to amend 
the Federal Acquisition Regulation (FAR) to provide standardized 
definitions of the terms ``critical nonconformance,'' ``major 
nonconformance,'' and ``minor nonconformance,'' and make other 
conforming amendments as a result of recommendations made by the 
Department of Defense Inspector General. This regulatory action was not 
subject to Office of Management and Budget review under Executive Order 
12866, dated September 30, 1993, and is not a major rule under 5 U.S.C. 
804.

EFFECTIVE DATE: August 19, 1996.

FOR FURTHER INFORMATION CONTACT: Ms. Linda Klein at (202) 501-3775 in 
reference to this FAR case. For general information, contact the FAR 
Secretariat, Room 4037, GS Building, Washington, DC 20405 (202) 501-
4755. Please cite FAC 90-39, FAR case 92-027.

SUPPLEMENTARY INFORMATION:

A. Background

    On September 27, 1990, the Department of Defense Inspector General 
(DoDIG) issued Audit Report 90-113, Nonconforming Products Procured by 
the Defense Industrial Supply Center. The report included 
recommendations that the DoD should use standardized terminology for a 
nonconformance, and that the DoD definition of a nonconformance should 
be in agreement with the FAR. On March 28, 1994 (59 FR 14466), the 
Civilian Agency Acquisition Council and the Defense Acquisition 
Regulations Council published a proposed rule implementing the DoDIG's 
recommendation.
    As a result of evaluating the comments received, changes were made 
to the proposed rule. The changes included deleting the words 
``judgment and experience indicate'' from the definition of ``critical 
nonconformance;'' and adding the words ``of the supplies or services,'' 
to the definition of ``major nonconformance'' after the word 
``failure.''

B. Regulatory Flexibility Act

    The Department of Defense, the General Services Administration, and 
the National Aeronautics and Space Administration certify that this 
final rule will not have a significant economic impact on a substantial 
number of small entities within the meaning of the Regulatory 
Flexibility Act, 5 U.S.C. 601, et seq., because the rule merely 
provides standard terminology and definitions and guidance to 
contracting officers pertaining to nonconforming supplies and services. 
No comments were received on the impact of this rule on small entities 
during the public comment period.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because the changes to 
the FAR do not impose recordkeeping or information collection 
requirements, or collections of information from offerors, contractors, 
or members of the public which require the approval of the Office of 
Management and Budget under 44 U.S.C. 3501, et seq.

List of Subjects in 48 CFR Part 46

    Government procurement.

    Dated: June 4, 1996.
Edward C. Loeb,
Director, Federal Acquisition Policy Division.

    Therefore, 48 CFR Part 46 is amended as set forth below:

PART 46--QUALITY ASSURANCE

    1. The authority citation for 48 CFR Part 46 continues to read as 
follows:

    Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42 
U.S.C. 2473(c).

    2. Section 46.101 is amended by adding in alphabetical order the 
definitions ``Critical nonconformance'', ``Major nonconformance'', and 
``Minor nonconformance'' to read as follows:


46.101 Definitions.

* * * * *
    Critical nonconformance means a nonconformance that is likely to 
result in hazardous or unsafe conditions for individuals using, 
maintaining, or depending upon the supplies or services; or is likely 
to prevent performance of a vital agency mission.
* * * * *
    Major nonconformance means a nonconformance, other than critical, 
that is likely to result in failure of the supplies or services, or to 
materially reduce the usability of the supplies or services for their 
intended purpose.

[[Page 31663]]

    Minor nonconformance means a nonconformance that is not likely to 
materially reduce the usability of the supplies or services for their 
intended purpose, or is a departure from established standards having 
little bearing on the effective use or operation of the supplies or 
services.
* * * * *
    3. Section 46.103 is amended at the end of paragraph (c) by 
removing ``and''; in paragraph (d) by removing the period and inserting 
``; and''; and by adding paragraph (e) to read as follows:


46.103  Contracting office responsibilities.

* * * * *
    (e) Ensuring that nonconformances are identified, and establishing 
the significance of a nonconformance when considering the acceptability 
of supplies or services which do not meet contract requirements.
    4. Section 46.407 is amended by revising the first sentence of 
paragraph (c)(1) introductory text, and in the third sentence by 
removing the comma after the word ``determination''; revising paragraph 
(d); and revising the first sentence of paragraph (f) to read as 
follows:


46.407  Nonconforming supplies or services.

* * * * *
    (c)(1) In situations not covered by paragraph (b) of this section, 
the contracting officer shall ordinarily reject supplies or services 
when the nonconformance is critical or major. * * *
* * * * *
    (d) If the nonconformance is minor, the cognizant contract 
administration office may make the determination to accept or reject, 
except where this authority is withheld by the contracting office of 
the contracting activity. To assist in making this determination, the 
contract administration office may establish a joint contractor-
contract administrative office review group. Acceptance of supplies and 
services with critical or major nonconformances is outside the scope of 
the review group.
* * * * *
    (f) Each contract under which supplies or services with critical or 
major nonconformances are accepted as authorized in paragraph (c) of 
this section shall be modified to provide for an equitable price 
reduction or other consideration. * * *
* * * * *
[FR Doc. 96-14543 Filed 6-19-96; 8:45 am]
BILLING CODE 6820-EP-P