[Federal Register Volume 62, Number 193 (Monday, October 6, 1997)]
[Proposed Rules]
[Pages 52081-52083]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-26287]


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DEPARTMENT OF AGRICULTURE

48 CFR Parts 426 and 452

[AGAR Case 96-01]
RIN 0599-AA00


Office of Procurement and Property Management; Agriculture 
Acquisition Regulation; Preference for Selected Biobased Products

AGENCY: Office of Procurement and Property Management, USDA.

ACTION: Notice of proposed rulemaking.

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SUMMARY: This document invites written comments on a proposed amendment 
to the Department of Agriculture's Acquisition Regulation (AGAR). We 
are proposing to amend the AGAR to establish policy and procedures for 
set-asides and preferences for products developed with assistance 
provided by the Alternative Agricultural Research and Commercialization 
Corporation (AARC).

DATES: Submit comments on or before December 5, 1997.

ADDRESSES: Submit written comments to U.S. Department of Agriculture, 
Office of Procurement and Property Management, Procurement Policy 
Division, STOP 9303, 1400 Independence Avenue SW, Washington, DC 20250-
9303. See SUPPLEMENTARY INFORMATION section for electronic access 
addresses for comments.

FOR FURTHER INFORMATION CONTACT: J. R. Holcombe, Jr., (202) 720-8484.

SUPPLEMENTARY INFORMATION:

I. Background
II. Procedural Requirements
    A. Executive Order Nos. 12866 and 12988.
    B. Regulatory Flexibility Act.
    C. Paperwork Reduction Act.
III. Public Comments
IV. Electronic Access Addresses

I. Background

    The AGAR implements the Federal Acquisition Regulation (FAR) (48 
CFR Ch. 1) where further implementation is needed, and supplements the 
FAR when coverage is needed for subject matter not covered by the FAR. 
This proposed rule would amend the AGAR to establish acquisition 
preferences for selected biobased products; i.e., nonfood, nonfeed 
products made from agricultural and forestry materials and animal by-
products (AGAR Case 96-01).
    The Alternative Agricultural Research and Commercialization 
Corporation (AARC), a wholly-owned government corporation of the 
Department of Agriculture (USDA), provides financial assistance to 
private companies and other parties to commercialize biobased products. 
Section 1665 of the Food, Agriculture, Conservation, and Trade Act of 
1990 (7 U.S.C. 5909), added by section 729 of the Federal Agricultural 
Improvement and Reform Act of 1996, authorizes Federal executive 
agencies to establish set asides and preferences for biobased products 
that have been commercialized with assistance provided by AARC. 
Pursuant to the authority provided by Section 1665, USDA proposes to 
add subpart 426.70 to the AGAR to establish policies and procedures for 
AARC preferences and set-asides.
    The following changes to the AGAR are proposed:
    (a) AGAR part 426 is proposed to be added, with a subpart 426.70, 
Preference for Selected Biobased Products. This proposed subpart 
establishes policy and procedures for preferences and set-asides for 
products developed with AARC assistance.
    (b) Provisions 452.226-70, Preferred Products, 452.226-71, Set-
aside for Mandatory Products, and 452.226-72, Price Preference for 
Award, are proposed to be added to AGAR part 452.

II. Procedural Requirements

A. Executive Order Nos. 12866 and 12988

    A work plan was prepared for this proposed regulation and submitted 
to the Office of Management and Budget pursuant to Executive Order No. 
12866. The proposed rule has been determined to be not significant for 
the purposes of Executive Order No. 12866. Therefore, the proposed rule 
has not been reviewed by the Office of Management and Budget. This rule 
has been reviewed in accordance with Executive Order No. 12988, Civil 
Justice Reform. The proposed rule meets the applicable standards in 
section 3 of Executive Order No. 12988.

B. Review Under the Regulatory Flexibility Act

    This rule was reviewed under the Regulatory Flexibility Act, 5 
U.S.C. 601-611, which requires preparation of a regulatory flexibility 
analysis for any rule which is likely to have significant economic 
impact on a substantial number of small entities. USDA certifies that 
this proposed rule will not have a significant economic effect on a 
substantial number of small entities, and, therefore, no regulatory 
flexibility analysis has been prepared. However, comments from small 
entities concerning parts affected by the proposed rule will be 
considered. Such comments must be submitted separately and cite 5 
U.S.C. 609 (AGAR Case 96-01) in correspondence.

C. Paperwork Reduction Act

    No information collection or recordkeeping requirements are imposed 
on the public by this proposed rule. Accordingly no OMB clearance is 
required by section 350(h) of the Paperwork Reduction Act, 44 U.S.C. 
3501, et. seq., or OMB's implementing regulation at 5 CFR Part 1320.

III. Public Comments

    Interested persons are invited to participate in this rule making 
by submitting views and comments with respect to the proposed AGAR 
revision set out in this notice. All written comments will be carefully 
assessed and fully considered prior to publication of the final rule.

IV. Electronic Access Addresses

    You may submit comments by sending electronic mail (E-mail) to 
[email protected], or via fax at (202) 720-8972.

[[Page 52082]]

List of Subjects in 48 CFR Parts 426 and 452

    Agriculture, Government procurement.

    For the reasons set out in this preamble, the Department proposes 
to amend Chapter 4 of Title 48 of the Code of Federal Regulations as 
follows:
    Add Part 426 to subchapter D to read as follows:

PART 426--OTHER SOCIOECONOMIC PROGRAMS

Subpart 426.70--Preference for Selected Biobased Products

Sec.
426.7000  Scope of subpart.
426.7001  Applicability.
426.7002  Authority.
426.7003  Policy.
426.7004  Definitions.
426.7005  Preference list.
426.7006  Use of a set-aside or a price preference.
426.7007  Use of a technical evaluation preference.
426.7008  Identification of preferred products.
426.7009  Contract provisions.

    Authority: 5 U.S.C. 301; 7 U.S.C. 5909; 40 U.S.C. 486(c)

Subpart 426.70--Preference for Selected Biobased Products


426.7000  Scope of subpart.

    This subpart supplements the FAR to implement the set-asides and 
preferences described in section 1665 of the Food, Agriculture, 
Conservation and Trade Act of 1990 (7 U.S.C. 5909).


426.7001  Applicability.

    This subpart applies to USDA and all of its components, including 
corporations.


426.7002  Authority.

    Section 1665 of the Food, Agriculture, Conservation and Trade Act 
of 1990 (7 U.S.C. 5909) authorizes USDA to establish set-asides and 
other preferences for products that have been assisted by the 
Alternative Agricultural Research and Commercialization Corporation 
(AARC).


426.7003  Policy.

    (a) AARC provides financial assistance to private companies and 
other parties to commercialize nonfood, nonfeed products made from 
agricultural and forestry materials and animal by-products (biobased 
products). Biobased products by their nature are environmentally 
friendly, and, in many instances, use agricultural material that 
otherwise would be wasted. It is the policy of USDA to acquire AARC 
products to the maximum extent practicable. This policy applies to all 
acquisitions of products regardless of dollar value.
    (b) USDA shall satisfy its requirements for products the same or 
essentially the same as AARC products by applying the preferences or 
set-asides described by this subpart.


426.7004   Definitions.

    As used in this subpart--
    AARC products are products developed with assistance provided by 
AARC as authorized by 7 U.S.C. 5905.
    Acquisitions involving the use of products means an acquisition in 
which a Government contractor uses products in contract performance.
    Acquisitions of products means an acquisition of one or more 
products for the use of the Government.
    Price preference means an amount, expressed as a percentage, to be 
used in the evaluation of offers in an acquisition of products.
    Set-aside means a requirement that vendors responding to a 
solicitation offer AARC products.
    Solicitation includes actions taken under parts 12, 13, 14, 15, and 
36 of the Federal Acquisition Regulation.
    Technical evaluation preference means the use of an award factor or 
subfactor in which the Government expresses its preference for AARC 
products.


426.7005   Preference list.

    (a) The Office of Procurement and Policy Management (OPPM) and AARC 
jointly shall establish and maintain a Preference List for AARC 
products.
    (b) The Preference List shall contain the list of preferred 
products, source information for these products, the type(s) of 
preference to be applied, the beginning and ending dates for the use of 
preferences, and other terms established to define the preference given 
to a product.
    (c) The Preference List will be publicized within USDA by means of 
AGAR Advisories (see 401.371). Copies of the Preference List may be 
obtained from OPPM. The Preference List will also be posted on the 
World Wide Web at the USDA Procurement Home Page.


426.7006   Use of a set-aside or a price preference.

    Acquisitions for products the same or essentially the same as those 
products appearing on the Preference List shall either be set-aside 
exclusively or shall include a price preference for those products 
shown on the Preference List. The actual price preference to be used 
shall be determined by the requiring office but may not exceed the 
percentage shown on the Preference List.


426.7007   Use of a technical evaluation preference.

    Acquisitions involving the use of products the same or essentially 
the same as those products appearing on the Preference List shall 
include a technical evaluation preference, if authorized in the 
Preference List. The technical evaluation preference may be determined 
by the contracting officer specifically for each acquisition.


426.7008   Identification of preferred products.

    (a) Products subject to a set-aside or technical preference shall 
be separately listed in the schedule, specification, or performance 
work statement.
    (b) Products subject to a price preference shall be separately 
listed in the schedule.


426.7009   Contract provisions.

    (a) Each solicitation containing a price or technical preference 
under this subpart shall contain the provision 452.226-70, Preferred 
Products.
    (b) Each solicitation for products subject to a set-aside shall 
include the provision 452.226-71, Set-Aside For Mandatory Products.
    (c) Each solicitation for products subject to a price preference 
shall include the provision 452.226-72, Price Preference for Award.
    (d) Solicitations for products may contain both the provision in 
452.226-71 and the provision found in 452.226-72.
    (e) The provisions prescribed in this section are not required for 
acquisitions accomplished using the purchase card as a stand alone 
tool.

PART 452--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

    1. The authority citation for Part 452 continues to read as 
follows:

    Authority: 5 U.S.C. 301 and 40 U.S.C. 486(c).

    2. Add sections 452.226-70, 452.226-71, and 452.226-72 to read as 
follows:


452.226-70   Preferred Products.

    As prescribed in 426.7009(a), include the following provision:

PREFERRED PRODUCTS (XXXX 1997)

    Specific products required by this solicitation and resulting 
contract, are subject to a price or a technical preference. A list 
of these products, the specific preference, and

[[Page 52083]]

the manufacturer or producer is included below.

Contract Line Item (or other location in this solicitation):*
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Product:*--------------------------------------------------------------

Manufacturer/Producer:*------------------------------------------------

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Preference:*

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(End of provision)

    *For each line item to which a preference applies. Contracting 
officer shall insert appropriate information.


452.26-71   Set-aside for Mandatory Products.

    As prescribed in 426.7009(b), include the following provision.

SET-ASIDE FOR MANDATORY PRODUCTS (XXXX 1997)

    Specific products are set-aside as mandatory products. These are 
separately listed in the schedule, specifications, or performance 
work statement. Specific terms governing the set-aside, and source 
information for the products are shown below.

Contract Line Item (or other location in this solicitation):*
----------------------------------------------------------------------

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Product:*--------------------------------------------------------------

Manufacturer/Producer:*

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Set-Aside Terms:*------------------------------------------------------

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(End of provision)

    * For each line item to which a set-aside applies, Contracting 
officer shall insert appropriate information.


452.226-72  Price Preference for Award.

    As prescribed in 426.7009(c), include the following provision:

Price Preference for Award (XXXX 1997)

    Certain products listed in the schedule of this solicitation are 
subject to a price preference. A list of these products, the amount 
of the preference, and source information is included in provision 
452.226-70, Preferred Products. For purposes of evaluation of offers 
only, the offered prices for these products will be reduced by the 
price preference listed in the solicitation.

(End of provision)

W.R. Ashworth,
Director, Office of Procurement and Property Management.
[FR Doc. 97-26287 Filed 10-3-97; 8:45 am]
BILLING CODE 3410-XE-P