[Federal Register Volume 63, Number 24 (Thursday, February 5, 1998)]
[Rules and Regulations]
[Pages 5892-5895]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-2583]
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GENERAL SERVICES ADMINISTRATION
41 CFR Part 101-46
[FPMR Amendment H-197]
RIN 3090-AG50
Replacement of Personal Property Pursuant to the Exchange/Sale
Authority
AGENCY: Office of Governmentwide Policy, GSA.
ACTION: Final rule.
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SUMMARY: 41 CFR 101-46 is revised to enhance executive agencies'
understanding of the exchange/sale authority and to provide those
agencies with greater flexibility and opportunity to use that
authority.
EFFECTIVE DATE: February 5, 1998.
FOR FURTHER INFORMATION CONTACT: Martha Caswell, Director, Personal
Property Management Policy Division (202-501-3828).
SUPPLEMENTARY INFORMATION:
A. Background
The following questions and answers have been developed to explain
the purpose and intended use of the exchange/sale authority, and to
explain the changes to the exchange/sale regulations promulgated by
this final rule:
What is the exchange/sale authority?
An authority provided by Section 201(c) of the Federal Property and
Administrative Services Act of 1949, as amended, under which executive
agencies ``may exchange or sell similar items and may apply the
exchange allowance or proceeds of sale in such cases in whole or in
part payment for the property acquired''.
When should executive agencies use the exchange/sale authority?
When replacing personal property. An example would be the need of
an executive agency to replace outdated scientific equipment. Why
should executive agencies use the exchange/sale authority?
To reduce the agencies' need for additional funding for the
acquisition of replacement personal property. If an agency has personal
property that needs to be replaced, it can exchange or sell that
property and apply the exchange
[[Page 5893]]
allowance or sales proceeds to the acquisition of similar replacement
property. Using the exchange/sale authority also enables agencies to
avoid the costs (e.g., administrative and storage) associated with
holding the property and processing it through the normal disposal
cycle, i.e., reutilization by other Federal agencies, donation to
eligible non-Federal public or non-profit organizations, sale to the
public, or abandonment or destruction. By contrast, if the holding
agency does not use the exchange/sale authority but instead reports the
property to be replaced as excess, any sales proceeds are forwarded to
the miscellaneous receipts account at the United States Treasury and
are not available to the agency disposing of the property.
What effect will these changes have on other Federal personal
property disposal programs?
This is unknown. The effect will depend on the extent to which
executive agencies increase their use of the exchange/sale authority.
Why have changes been made to the exchange/sale regulations?
The regulations have not been subjected to a comprehensive review
and revision for over thirty years. The regulations are now being
updated to reflect shrinking agency budgets and to increase their
usefulness and effectiveness.
Who recommended the changes?
An interagency team led by GSA. In the course of its work, the team
consulted with various customers and stakeholders, including
representatives from the Office of Management and Budget, the House of
Representatives Committee on Government Reform and Oversight, and the
National Association of State Agencies for Surplus Property.
What changes have been made?
Changes have been made to incorporate plain language principles,
reduce restrictions and limitations on use of the authority, streamline
the narrative, define key terms, update organizational references,
delete outdated regulatory references, and specify minimal
documentation requirements.
B. The General Services Administration (GSA) has determined that
this rule is not a significant regulatory action for the purposes of
Executive Order 12866 of September 30, 1993.
C. Regulatory Flexibility Act
This rule is not required to be published in the Federal Register
for public comment. Therefore, the Regulatory Flexibility Act does not
apply.
D. Paperwork Reduction Act
The Paperwork Reduction Act does not apply because the proposed
revisions do not impose recordkeeping or information collection
requirements, or the collection of information from offerors,
contractors, or members of the public which require the approval of OMB
under 44 U.S.C. 3501-3520. This rule also is exempt from Congressional
review prescribed under 5 U.S.C. 801 since it relates solely to agency
management and personnel. This rule is written in a ``plain language''
style.
What is the ``plain language'' style of regulation writing?
The ``plain language'' style of regulation writing is a new,
simpler to read and understand, question and answer regulatory format.
How does the plain language style of regulation writing affect
employees?
A question and its answer combine to establish a rule. The employee
and the agency must follow the language contained in both the question
and its answer.
List of Subjects in 41 CFR Part 101-46
Government property management.
Therefore, 41 CFR part 101-46 is revised as set forth below:
PART 101-46--REPLACEMENT OF PERSONAL PROPERTY PURSUANT TO THE
EXCHANGE/SALE AUTHORITY
Sec.
101-46.000 Why should executive agencies use the exchange/sale
authority?
101-46.001 What is prescribed by this part?
101-46.002 What are the definitions of some of the key terms used
in this part?
101-46.002-1 Acquire.
101-46.002-2 Combat material.
101-46.002-3 Exchange.
101-46.002-4 Exchange/sale.
101-46.002-5 Executive agency.
101-46.002-6 Federal agency.
101-46.002-7 Historic item.
101-46.002-8 Replacement.
101-46.002-9 Similar.
101-46.003 How do you request deviations from this part, and who
can approve them?
Subpart 101-46.1--[Reserved]
Subpart 101-46.2--Exchange or Sale Determination
101-46.200 How do you determine whether to do an exchange or a
sale?
101-46.201 When must you make a reimbursable transfer to another
Federal agency?
101-46.202 To what other organizations may you make a reimbursable
transfer?
101-46.203 What are the conditions for a reimbursable transfer?
101-46.204 What prohibitions and necessary conditions apply to the
exchange/sale of personal property?
101-46.205 What special exceptions apply to the exchange/sale
authority?
Subpart 101-46.3--Exchange/Sale Methods
101-46.300 What are the exchange methods?
101-46.301 What are the sales methods?
101-46.302 What are the accounting requirements for the proceeds of
sale?
Authority: Sec. 205(c), 63 Stat. 390 (40 U.S.C. 486(c)).
Sec. 101-46.000 Why should executive agencies use the exchange/sale
authority?
To reduce the agencies' need for additional funding for the
acquisition of replacement personal property. If an agency has personal
property that needs to be replaced, it can exchange or sell that
property and apply the exchange allowance or sales proceeds to the
acquisition of similar replacement property. Using the exchange/sale
authority also enables agencies to avoid the costs (e.g.,
administrative and storage) associated with holding the property and
processing it through the normal disposal cycle, i.e., reutilization by
other Federal agencies, donation to eligible non-Federal public or non-
profit organizations, sale to the public, or abandonment or
destruction. By contrast, if the holding agency does not use the
exchange/sale authority but instead reports the property to be replaced
as excess, any sales proceeds are forwarded to the miscellaneous
receipts account at the United States Treasury and are not available to
the agency disposing of the property.
Sec. 101-46.001 What is prescribed by this part?
Provisions for use by you (an executive agency) when using the
exchange/sale authority of section 201(c) of the Federal Property and
Administrative Services Act of 1949, 63 Stat. 384, as amended (40
U.S.C. 481(c)). This part applies to all personal property owned by
executive agencies worldwide. For the exchange/sale of aircraft parts
and hazardous materials, you must meet the requirements in this part
and in parts 101-37 and 101-42 of this chapter, respectively.
Sec. 101-46.002 What are the definitions of some of the key terms used
in this part?
Sec. 101-46.002-1 Acquire.
To procure or otherwise obtain personal property, including by
lease.
Sec. 101-46.002-2 Combat material.
Arms, ammunition, and implements of war listed in the U.S.
munitions list (22 CFR part 121).
[[Page 5894]]
Sec. 101-46.002-3 Exchange.
To replace personal property by trade or trade-in with the supplier
of the replacement property.
Sec. 101-46.002-4 Exchange/sale.
To exchange or sell non-excess, non-surplus personal property and
apply the exchange allowance or proceeds of sale in whole or in part
payment for the acquisition of similar property.
Sec. 101-46.002-5 Executive agency.
Any executive department or independent establishment in the
executive branch of the Government, including any wholly owned
Government corporation.
Sec. 101-46.002-6 Federal agency.
Any executive agency or any establishment in the legislative or
judicial branch of the Government (except the Senate, the House of
Representatives, and the Architect of the Capitol and any activities
under his/her direction).
Sec. 101-46.002-7 Historic item.
Property having added value for display purposes because its
historical significance is greater than its fair market value for
continued use. Items that are commonly available and remain in use for
their intended purpose, such as military aircraft still in use by
active or reserve units, are not historic items.
Sec. 101-46.002-8 Replacement.
The process of acquiring property to be used in place of property
which is still needed but will no longer adequately perform all the
tasks for which it is used.
Sec. 101-46.002-9 Similar.
Where the acquired item and replaced item:
(a) Are identical; or
(b) Are designed and constructed for the same purpose; or
(c) Both constitute parts or containers for identical or similar
end items; or
(d) Both fall within a single Federal Supply Classification (FSC)
group of property that is eligible for handling under the exchange/sale
authority.
Sec. 101-46.003 How do you request deviations from this part, and who
can approve them?
(a) General provisions for deviations from the Federal Property
Management Regulations are found in Sec. 101-1.110 of this chapter.
Provisions for deviations from the regulations in this part are
presented in this section.
(b) To request deviations from this part, you must submit a
complete written justification to the General Services Administration
(GSA), Office of Governmentwide Policy, Office of Transportation and
Personal Property (MT), Washington, DC 20405. Only the Administrator of
General Services (or designee) may grant deviations. Although the
Administrator can approve deviations from most of the provisions in
this part, he/she cannot approve deviations from provisions that are
mandated by statute, i.e., the requirement at 101-46.204(b)(1) that the
property exchanged or sold is similar to the property acquired, and the
requirement at 101-46.204(b)(2) that the property exchanged or sold is
not excess or surplus.
Subpart 101-46.1--[Reserved]
Subpart 101-46.2--Exchange or Sale Determination
Sec. 101-46.200 How do you determine whether to do an exchange or a
sale?
(a) You must determine which method--exchange or sale--will provide
the greater return for the Government. When estimating the return under
each method, consider all administrative and overhead costs.
(b) If the exchange allowance or estimated sales proceeds for
property would be unreasonably low, you should process the property
according to the regulations in Part 101-43 (Utilization of Personal
Property) or Subpart 101-45.9 (Abandonment or Destruction of Personal
Property) of this subchapter, as applicable.
Sec. 101-46.201 When must you make a reimbursable transfer to another
Federal agency?
If you have property to replace which is eligible for exchange/
sale, you should, to the maximum extent practicable, first solicit
Federal agencies known to use or distribute such property and, if an
agency wants it, arrange for a reimbursable transfer. Property that
meets the replacement standards prescribed in subpart 101-25.4 of this
chapter is not subject to this requirement.
Sec. 101-46.202 To what other organizations may you make a
reimbursable transfer?
The Senate, the House of Representatives, the Architect of the
Capitol and any activities under the Architect's direction, the
District of Columbia, and mixed-ownership Government corporations.
Sec. 101-46.203 What are the conditions for a reimbursable transfer?
When transferring property, you must:
(a) Do so under terms mutually agreeable to you and the recipient;
and
(b) Not require reimbursement of an amount greater than the
estimated fair market value of the transferred property; and
(c) Apply the transfer proceeds in whole or part payment for
property acquired to replace the transferred property.
Sec. 101-46.204 What prohibitions and necessary conditions apply to
the exchange/sale of personal property?
(a) You must not use the exchange/sale authority for:
(1) The following FSC groups of personal property:
10 Weapons.
11 Nuclear ordnance.
12 Fire control equipment.
14 Guided missiles.
15 Aircraft and airframe structural components, except FSC class
1560 Airframe Structural Components.
42 Firefighting, rescue, and safety equipment.
44 Nuclear reactors (FSC class 4472 only).
51 Hand tools.
54 Prefabricated structure and scaffolding.
68 Chemicals and chemical products, except medicinal chemicals.
71 Furniture.
84 Clothing, individual equipment, and insignia.
(2) Materials in the National Defense Stockpile (50 U.S.C. 98-98h)
or the Defense Production Act inventory (50 U.S.C. App. 2093).
(3) Nuclear Regulatory Commission-controlled materials unless you
meet the requirements of Sec. 101-42.1102-4 of this subchapter.
(4) Controlled substances, unless you meet the requirements of
Sec. 101-42.1102-3 of this subchapter.
(5) Scrap materials, except in the case of scrap gold for fine
gold.
(6) Property which was originally acquired as excess or forfeited
property or from another source other than new procurement, unless such
property has been in official use by the acquiring agency for at least
1 year. You may exchange or sell forfeited property in official use for
less than 1 year if the head of your agency determines that a
continuing valid requirement exists, but the specific item in use no
longer meets that requirement, and that exchange or sale meets all
other requirements of this part.
(7) Property that is dangerous to public health or safety without
first rendering such property innocuous or providing for adequate
safeguards as part of the exchange/sale.
(8) Combat material without demilitarizing it in accordance with
applicable regulations.
(9) Flight Safety Critical Aircraft Parts unless you meet the
provisions of Sec. 101-37.610 of this chapter.
[[Page 5895]]
(10) Acquisition of unauthorized replacement property.
(11) Acquisition of replacement property which violates:
(i) Any restriction on procurement of a commodity or commodities;
or
(ii) Any replacement policy or standard prescribed by the
President, the Congress, or the Administrator of General Services; or
(iii) Any contractual obligation.
(b) You may use the exchange/sale authority only if you meet all of
the following conditions:
(1) The property exchanged or sold is similar to the property
acquired; and
(2) The property exchanged or sold is not excess or surplus, and
the property acquired is needed for approved programs; and
(3) The number of items acquired must equal the number of items
exchanged or sold unless:
(i) The item(s) acquired perform all or substantially all of the
tasks for which the item(s) exchanged or sold would otherwise be used;
or
(ii) The item(s) acquired and the item(s) exchanged or sold meet
the test for similarity specified at Sec. 101-46.002-9(iii) in that
they are a part(s) or container(s) for identical or similar end items;
and
(4) The property exchanged or sold was not acquired for the
principal purpose of exchange or sale; and
(5) You document at the time of exchange or sale (or at the time of
acquisition if it precedes the sale):
(i) That the exchange allowance or sale proceeds will be applied to
the acquisition of replacement property; and
(ii) For any property exchanged or sold under this part, the
pertinent Federal Supply Classification (FSC) Group, the number of
items, the original acquisition cost, the exchange allowance or sales
proceeds (as applicable), and the source from which the property was
originally acquired i.e., new procurement, excess, forfeiture, or
another source other than new procurement. These data, aggregated at
the agency level, may be requested by GSA to evaluate use of the
exchange/sale authority.
Sec. 101-46.205 What special exceptions apply to the exchange/sale
authority?
(a) You may exchange books and periodicals in your libraries for
other books and periodicals, without monetary appraisal or detailed
listing or reporting.
(b) In acquiring items for historical preservation or display at
Federal museums, you may exchange historic items in the museum property
account without regard to the FSC group or the requirement in Sec. 101-
46.204(b)(3), provided the exchange transaction is documented and
certified by the head of your agency to be in the best interests of the
Government and all other provisions of this part are met. The
documentation must contain a determination that the item exchanged and
the item acquired are historic items.
Subpart 101-46.3--Exchange/Sale Methods
Sec. 101-46.300 What are the exchange methods?
Exchange of property may be accomplished by either of the following
two methods:
(a) The supplier (e.g., a Government agency, commercial or private
organization, or an individual) delivers the replacement property to
one of your organizational units and removes the property being
replaced from that same organizational unit. This is the normal manner
of exchange.
(b) The supplier delivers the replacement property to one of your
organizational units and removes the property being replaced from a
different organizational unit.
Sec. 101-46.301 What are the sales methods?
(a) You must use the methods, terms, and conditions of sale, and
the forms prescribed in Sec. 101-45.304 of this subchapter in the sale
of property being replaced, except that the provisions of Sec. 101-
45.304-2(a) of this subchapter regarding negotiated sales are not
applicable. Section 3709, Revised Statutes (41 U.S.C. 5), specifies the
following conditions under which property being replaced can be sold by
negotiation, subject to obtaining such competition as is feasible:
(1) The reasonable value involved in the contract does not exceed
$500, or
(2) Otherwise authorized by law.
(b) You may sell property being replaced by negotiation at fixed
prices in accordance with the provisions of Sec. 101-45.304-2(b) of
this subchapter.
Sec. 101-46.302 What are the accounting requirements for the proceeds
of sale?
Except as otherwise authorized by law, you must account for
proceeds from sales of personal property disposed of under this part in
accordance with the General Accounting Office Policy and Procedures
Manual for Guidance of Federal Agencies, Title 7, Fiscal Procedures,
Section 5.5D.
Dated: January 27, 1998.
David J. Barram,
Administrator of General Services.
[FR Doc. 98-2583 Filed 2-4-98; 8:45 am]
BILLING CODE 6820-24-P