[Federal Register Volume 62, Number 5 (Wednesday, January 8, 1997)]
[Rules and Regulations]
[Pages 1058-1060]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-382]


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DEPARTMENT OF DEFENSE
48 CFR Part 239

[DFARS Case 96-D017]


Defense Federal Acquisition Regulation Supplement; Information 
Technology Management Reform Act (ITMRA)

AGENCY: Department of Defense (DoD).

ACTION: Interim rule with request for comment.

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SUMMARY: The Director of Defense Procurement is amending the Defense 
Federal Acquisition Regulation Supplement (DFARS) to revise guidance 
regarding the acquisition of information technology, for conformance 
with recent amendments to the Federal Acquisition Regulation.

DATES: Effective date: January 8, 1997

    Comment date: Comments on the interim rule should be submitted in 
writing to the address shown below on or before March 10, 1997, to be 
considered in the formulation of the final rule.

ADDRESSES: Interested parties should submit written comments to: 
Defense Acquisition Regulations Council, Attn: Mr. Michael Mutty, PDUSD 
(A&T) DP (DAR), IMD 3D139, 3062 Defense Pentagon, Washington, DC 20301-
3062. Telefax (703) 602-0350. Please cite DFARS Case 96-D017 in all 
correspondence related to this case.

FOR FURTHER INFORMATION CONTACT:
Mr. Michael Mutty, telephone (703) 602-0131.

[[Page 1059]]

SUPPLEMENTARY INFORMATION:

A. Background

    The Federal Acquisition Regulation (FAR) was amended on August 8, 
1996 (61 FR 41467; Federal Acquisition Circular 90-41, Item I), to 
implement Division E of the Information Technology Management Reform 
Act of 1996 (Public Law 104-106). This interim rule amends DFARS Part 
239 for conformance with the August 8, 1996, FAR amendments.

B. Regulatory Flexibility Act

    This interim rule is not expected to 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 
primarily pertains to internal Government considerations regarding the 
acquisition of information technology. Comments are invited from small 
businesses and other interested parties. Comments from small entities 
concerning the affected DFARS subparts also will be considered in 
accordance with 5 U.S.C. 610. Such comments should be submitted 
separately and cite DFARS Case 96-D017 in correspondence.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because this interim 
rule does not impose any new recordkeeping, information collection 
requirements, or collections of information from offerors, contractors, 
or members of the public that require the approval of the Office of 
Management and Budget under 44 U.S.C. 3501, et seq.

D. Determination to Issue an Interim Rule

    A determination has been made under the authority of the Secretary 
of Defense to issue this rule as an interim rule. Urgent and compelling 
reasons exist to promulgate this rule without prior opportunity for 
public comment. This rule amends the DFARS for conformance with the FAR 
implementation of Division E of the Information Technology Management 
Reform Act of 1996 (Pub. L. 104-106), which was effective upon its 
publication in the Federal Register on August 8, 1996. However, public 
comments received in response to the publication of this interim rule 
will be considered in formulating the final rule.

List of Subjects in 48 CFR Part 239

    Government procurement.
Michele P. Peterson,
Executive Editor, Defense Acquisition Regulations Council.

    Therefore, 48 CFR Part 239 is amended as follows:

PART 239--ACQUISITION OF INFORMATION RESOURCES

    1. The authority citation for 48 CFR Part 239 continues to read as 
follows:

    Authority: 41 U.S.C. 421 and 48 CFR Chapter 1.


239.001 through 239.002  [Removed]

    2. Sections 239.001 through 239.002 are removed.
    3. Subpart 239.70 is revised to read as follows:

Subpart 239.70--Exchange or Sale of Information Technology (IT)

Sec.
239.7000  Scope of subpart.
239.7001  Policy.
239.7002  Conditions for using exchange/sale.
239.7003  Procedures.

Subpart 239.70 Exchange or Sale of Information Technology (IT)


239.7000  Scope of subpart.

    This subpart contains unique DoD procedures for the exchange or 
sale of information technology using the exchange authority of the 
General Services Administration (GSA). This subpart only applies to 
items with an original acquisition cost of $1,000,000 or more.


239.7001  Policy.

    Agencies should consider exchange/sale when replacing Government-
owned information technology. Exchange/sale is a method of--
    (a) Transferring the equipment to be replaced to--
    (1) Another Government agency, with reimbursement (sale); or
    (2) The supplier of the replacement information technology for a 
trade-in allowance (exchange).
    (b) Applying the proceeds of sale or the exchange allowance toward 
the purchase of replacement information technology.


239.7002  Conditions for using exchange/sale.

    (a) The requiring activity must make a written determination that--
    (1) The trade-in allowance of the exchange or the proceeds of the 
sale will be applied to acquire the replacement information technology; 
and
    (2) The exchange/sale transaction will foster the economic and 
efficient accomplishment of a continuing requirement.
    (b) The replacement equipment must be information technology--
    (1) Similar to the resource being sold or exchanged;
    (2) Which will satisfy the continuing requirement currently met by 
the resource being replaced.


239.7003  Procedures.

    (a) Comply with--
    (1) This subpart;
    (2) Subpart 217.70; and
    (3) The Defense Automation Resources Management Manual.
    (b) Solicit offers both on an exchange (trade-in for allowance) or 
no exchange (no trade-in) basis.
    (c) Retain the option to exercise any exchange offer at the time of 
award.
    (d) List and describe the information technology to be exchanged in 
the solicitation. At a minimum include--
    (1) A brief description of each item;
    (2) Name of manufacturer;
    (3) Equipment type;
    (4) Model number; and
    (5) The condition code and explanation of the code.
    (e) Allow sufficient time in the contracting schedule to permit 
screening within the Government of the information technology to be 
exchanged prior to contract award.
    (f) Immediately upon receipt of offers, determine the highest 
exchange offer (if any) and use it to initiate screening under the 
Defense Automation Resources Management Manual.
    (1) Send an SF 120, Report of Excess Personal Property, to the 
Defense Automation Resources Management Program Division (ATTN: DARMP 
Division). Prominently display the following note on the original and 
five copies of the SF 120:

Exchange/``Sale'' Property

    A written administrative determination has been (will be) made 
to apply the exchange allowance or proceeds of ``sale'' to the 
acquisition of similar items.

    (2) Include the following additional information with the SF 120:
    (i) The identity of the offeror of the exchange;
    (ii) The type of replacement equipment;
    (iii) The acquisition method for the replacement equipment;
    (iv) The anticipated purchase price of the replacement equipment; 
and
    (v) The name and telephone number of the contracting officer.
    (g) Evaluate offers using the solicitation criteria, including 
consideration of any exchange allowance offers. Award can be made

[[Page 1060]]

whether or not the replaced information technology is exchanged.
    (h) Before a contract is awarded, consider the results of the 
screening. Do not make an exchange if another Government agency wants 
to acquire the replaced equipment.
    (1) If another agency is going to acquire the replaced equipment, 
do not include the exchange allowance in the contract price.
    (2) The actual sale price to the agency acquiring the replaced 
equipment will be the exchange allowance (if any) of the successful 
offeror.
    (i) If no Government agency wants to acquire the replaced 
equipment, the contract price shall include the exchange allowance, if 
any.
    (j) If no exchange allowance was offered by the successful 
contractor, see the Defense Automation Resources Management Manual for 
disposal instructions.


239.7102-3  [Amended]

    4. Section 239.7102-3 is amended by removing the paragraph (a) 
designation and by removing paragraph (b).


239.7201  [Removed and Reserved]

    5. Section 239.7201 is removed and reserved.
    6. Section 239.7202 is amended by revising paragraphs (a) and (b) 
to read as follows:


239.7202  Waivers.

    (a) The Secretary of Commerce has delegated to the Secretary of 
Defense the authority to waive FIP standards, in accordance with 
procedures established by the Secretary of Commerce. The Secretary of 
Defense redelegated that waiver authority to the Assistant Secretary of 
Defense for Command, Control, Communications, and Intelligence 
(ASD(C3I)). The ASD(C3I) has redelegated to the senior information 
technology official of each military department the authority to 
approve waivers to FIP standards that are applicable to military 
department requirements.
    Waivers to FIP standards that are applicable to the requirements of 
DoD components outside the military departments must be approved by the 
ASD(C3I).
    (b) Contracting officers shall ensure that all applicable FIP 
standards are incorporated into solicitations, except for those FIP 
standards for which the requiring activity has obtained a waiver from 
the appropriate military department or DoD senior information 
technology official.
* * * * *
    7. Section 239.7302 is amended by revising paragraph (a), the 
introductory text of paragraph (b), and paragraph (b)(2) to read as 
follows:


239.7302  Approvals and screening.

    (a) The requirements of this section highlight the redistribution 
requirements of the Defense Automation Resources Management Manual, and 
are in addition to those at FAR 45.302.
    (b) If the contractor proposes acquiring ADPE subject to 
239.7301(a) (1) and (2), and the unit acquisition cost is $50,000 or 
more--
* * * * *
    (2) The administrative contracting officer--
    (i) Submits a request for screening the requirement against the 
pool of Government-owned ADPE to determine if available excess 
equipment could satisfy the contractor's needs. The request should 
include the contractor's supporting documentation. The request is sent 
to--Defense Information Systems Agency, Chief Information Officer, 
ATTN: Defense Automation Resources Management, Program Division (D03D), 
701 S. Courthouse Road, Arlington, VA 22204-2199; or
    (ii) Uses the Automation Resources Management System (ARMS) to 
screen on-line. System access may be requested from the Defense 
Information Systems Agency, Chief Information Officer, Defense 
Automation Resources Management Program (DARMP) Division. Customers may 
apply for an ARMS Account Number by calling the DARMP Help Desk at 
(703) 696-1904; DSN 426-1904, FAX (703) 696-1908; E-mail 
[email protected].
    (iii) Documents the result of the System query.
    (iv) Upon receipt of and based on screening results from DARMP, 
advises the contractor that excess ADPE--
    (A) Is available pursuant to the Defense Automation Resources 
Management Manual; or
    (B) Is not available and the contractor may proceed with 
acquisition of the equipment.
* * * * *
    8. Section 239.7304 is amended by revising paragraph (c) to read as 
follows:


239.7304  Purchase option credits.

* * * * *
    (c) Report purchase option credits as prescribed in the Defense 
Automation Resources Manual.
    9. Section 239.7400 is revised to read as follows:


239.7400  Scope.

    This subpart prescribes policy and procedures for acquisition of 
telecommunications services and maintenance of telecommunications 
security. Telecommunications services may also meet the definition of 
information technology.


239.7402  [Amended]

    10. Section 239.7402 is amended in paragraph (b)(4) by removing the 
reference ``FAR 45.303-1(a)'' and inserting the reference ``FAR 
45.303'' in its place.
    11. Section 239.7501 is revised to read as follows:


239.7501  Major automated information systems restriction.

    Section 8028 of the FY 1992 Defense Appropriations Act (Pub. L. 
102-172) and similar sections of the FY 1993, FY 1994, and FY 1995 
Defense appropriations acts prohibit use of DoD appropriations for 
acquisition of major automated information systems, unless the systems 
have successfully completed oversight reviews required by DoD 
regulations.


239.7501-1 and 239.7501-2  [Removed]

    12. Sections 239.7501-1 and 239.7501-2 are removed.

[FR Doc. 97-382 Filed 1-7-97; 8:45 am]
BILLING CODE 5000-04-M