[Federal Register Volume 65, Number 187 (Tuesday, September 26, 2000)]
[Proposed Rules]
[Pages 57795-57798]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-24661]


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GENERAL SERVICES ADMINISTRATION

41 CFR Parts 101-46 and 102-39

[FPMR Amendment H-      ]
RIN 3090-AH23


Replacement of Personal Property Pursuant to the Exchange/Sale 
Authority

AGENCY: Office of Governmentwide Policy, GSA.

ACTION: Proposed rule.

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SUMMARY: The General Services Administration is revising the Federal 
Property Management Regulations (FPMR) by moving coverage on 
replacement of personal property pursuant to the exchange/sale 
authority into the Federal Management Regulation (FMR). A cross-
reference is added to the FPMR to direct readers to the coverage in the 
FMR. The FMR is written in plain language to provide agencies with 
updated regulatory material that is easy to read and understand.

DATES: Your comments must reach us by November 27, 2000 to be 
considered in the formulation of a final rule.

ADDRESSES: Send written comments to: Ms. Sharon A. Kiser, Regulatory 
Secretariat (MVRS), Federal Acquisition Policy Division, General 
Services Administration, 1800 F Street, NW., Washington, DC 20405.
    Send comments by e-mail to: [email protected].

FOR FURTHER INFORMATION CONTACT: Martha Caswell, Director, Personal 
Property Management Policy Division (MTP), 202-501-3828.

SUPPLEMENTARY INFORMATION:

A. Background

    This proposed rule updates, streamlines, and clarifies FPMR part 
101-46 and moves the part into the Federal Management Regulation (FMR). 
The proposed rule is written in a plain language question and answer 
format. In this format, a question and its answer combine to establish 
a rule. This means the employee and the agency must follow the language 
contained in both the question and its answer.
    Proposed updates include:
    1. A revised definition of ``replacement.''
    2. A new provision regarding the fixed price sale of exchange/sale 
property to a State Agency for Surplus Property before conducting an 
exchange/sale with a non-Government entity.
    3. Revised restrictions on types of personal property that are 
ineligible for exchange/sale, including removal of large weapons, fire 
control equipment, guided missiles, and furniture from the list of such 
property.
    4. Clarified restrictions on the exchange/sale of combat material.
    5. A revised requirement for documentation of exchange/sale 
transactions.
    6. Removal of the requirement that the number of items acquired 
must equal the number of items exchanged or sold unless certain 
exceptions are met.
    7. Removal of the requirement that proceeds from the sale of 
personal property under the exchange/sale authority be accounted for in 
accordance with General Accounting Office regulations.
    8. A new annual reporting requirement for exchange/sale 
transactions.

B. Executive Order 12866

    GSA has determined that this proposed rule is not a significant 
rule for the purposes of Executive Order 12866 of September 30, 1993.

C. Regulatory Flexibility Act

    A regulatory flexibility analysis is not required under the 
Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because there is no 
requirement that this proposed rule be published in the Federal 
Register for notice and comment.

D. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because this proposed 
rule does not impose recordkeeping or information collection 
requirements, or the collection of information from

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offerors, contractors, or members of the public which require the 
approval of the Office of Management and Budget (OMB) under 44 U.S.C. 
3501, et seq.

E. Small Business Regulatory Enforcement Fairness Act

    This proposed rule is exempt from Congressional review prescribed 
under 5 U.S.C. 801 since it relates solely to agency management and 
personnel.

List of Subjects in 41 CFR Parts 101-46 and 102-39

    Government property management.

    For the reasons set forth in the preamble, GSA proposes to amend 41 
CFR chapters 101 and 102 as follows:

CHAPTER 101--[AMENDED]

    1. Part 101-46 is revised to read as follows:

PART 101-46--REPLACEMENT OF PERSONAL PROPERTY PURSUANT TO THE 
EXCHANGE/SALE AUTHORITY

    Authority: Sec. 205(c), 63 Stat. 390 (40 U.S.C. 486(c)).


Sec. 101-46.000  Cross-reference to the Federal Management Regulation 
(FMR) (41 CFR chapter 102, parts 102-1 through 102-220).

    For information on replacement of personal property pursuant to the 
exchange/sale authority previously contained in this part, see FMR part 
39 (41 CFR part 102-39).

CHAPTER 102--[AMENDED]

    2. Part 102-39 is added to subchapter B of chapter 102 to read as 
follows:

PART 102-39--REPLACEMENT OF PERSONAL PROPERTY PURSUANT TO THE 
EXCHANGE/SALE AUTHORITY

Subpart A--General

Sec.
102-39.5   How are the terms ``I'' and ``you'' used in this part?
102-39.10   What does this part cover?
102-39.15   Why should I use the exchange/sale authority?
102-39.20   What definitions apply to this part?
102-39.25   How do I request a deviation from this part?
Subpart B--Exchange/Sale Considerations
102-39.30   When should I not use the exchange/sale authority?
102-39.35   How do I determine whether to do an exchange or a sale?
102-39.40   When should I arrange for a reimbursable transfer of 
exchange/sale property to a Federal agency or other eligible 
organization, or sell such property to a State Agency for Surplus 
Property?
102-39.45   What prohibitions apply to the exchange/sale of personal 
property?
102-39.50   What necessary conditions apply to the exchange/sale of 
personal property?
102-39.55   What exceptions apply to the necessary conditions for 
exchange/sale?
Subpart C--Exchange/Sale Methods and Reports
102-39.60   What are the exchange methods?
102-39.65   What are the sales methods?
102-39.70   What are the accounting requirements for the proceeds of 
sale?
102-39.75   What am I required to report?

    Authority: 40 U.S.C. 486(c).

Subpart A--General


Sec. 102-39.5  How are the terms ``I'' and ``you'' used in this part?

    Use of pronouns ``I'' and ``you'' throughout this part refer to 
executive agencies.


Sec. 102-39.10  What does this part cover?

    This part covers the exchange/sale authority, and 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 
title, respectively.


Sec. 102-39.15  Why should I use the exchange/sale authority?

    You should use the exchange/sale authority to:
    (a) Reduce the cost of replacement personal property. If you have 
personal property that needs to be replaced, you can exchange or sell 
that property and apply the exchange allowance or sales proceeds to the 
cost of similar replacement property. By contrast, if you choose not to 
replace the property using the exchange/sale authority, you may declare 
it excess and dispose of it through the normal disposal process. Any 
sales proceeds from the eventual sale of that property as surplus 
generally must be forwarded to the miscellaneous receipts account at 
the United States Treasury and thus would not be available to you.
    (b) Avoid the costs (e.g., administrative and storage) that may be 
incurred when declaring the property to be replaced as excess and 
processing it through the normal disposal process. The normal disposal 
process includes abandonment or destruction, reutilization by other 
Federal agencies, donation to eligible non-Federal public or non-profit 
organizations, or sale to the public.


Sec. 102-39.20  What definitions apply to this part?

    The following definitions apply to this part:
    Acquire means to procure or otherwise obtain personal property, 
including by lease.
    Combat material means arms, ammunition, and implements of war 
listed in the U.S. munitions list (22 CFR part 121).
    Exchange means to replace personal property by trade or trade-in 
with the supplier of the replacement property.
    Exchange/sale means 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.
    Executive agency means any executive department or independent 
establishment in the executive branch of the Government, including any 
wholly owned Government corporation.
    Federal agency means 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).
    Historic item means 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.
    Replacement means the process of acquiring property to be used in 
place of property that:
    (1) Is still needed but no longer adequately performs the tasks for 
which it is used; or
    (2) Does not meet the agency's need as well as the property to be 
acquired.
    Similar means where the acquired item and replaced item:
    (1) Are identical;
    (2) Are designed and constructed for the same purpose;
    (3) Constitute parts or containers for identical or similar end 
items; or
    (4) Fall within a single Federal Supply Classification (FSC) group 
of property that is eligible for handling under the exchange/sale 
authority.


Sec. 102-39.25  How do I request a deviation from this part?

    See Sec. Sec. 102-2.60 through 102-2.110 of this chapter to request 
a deviation from the requirements of this part.

Subpart B--Exchange/Sale Considerations


Sec. 102-39.30  When should I not use the exchange/sale authority?

    You should not use the exchange/sale authority if the exchange 
allowance or

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estimated sales proceeds for the property will be unreasonably low. You 
must either abandon or destroy the property in accordance with part 
101-45, subpart 101-45.9, of this title, or declare the property excess 
and follow the regulations in part 102-36 of this chapter, whichever is 
appropriate.


Sec. 102-39.35  How do I determine whether to do an exchange or a sale?

    You must determine whether an exchange or a sale will provide the 
greater return for the Government. When estimating the return under 
each method, consider all administrative and overhead costs.


Sec. 102-39.40  When should I arrange for a reimbursable transfer of 
exchange/sale property to a Federal agency or other eligible 
organization, or sell such property to a State Agency for Surplus 
Property?

    If you have property to replace which is eligible for exchange/
sale, you should first, to the maximum extent practicable, solicit:
    (a) Federal agencies known to use or distribute such property. If a 
Federal agency is interested in acquiring the property, you should 
arrange for a reimbursable transfer. Reimbursable transfers may also be 
conducted with 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. When 
conducting a reimbursable transfer, you must:
    (1) Do so under terms mutually agreeable to you and the recipient.
    (2) Not require reimbursement of an amount greater than the 
estimated fair market value of the transferred property.
    (3) Apply the transfer proceeds in whole or part payment for 
property acquired to replace the transferred property; and
    (b) State Agencies for Surplus Property (SASPs) known to have an 
interest in acquiring such property. If a SASP is interested in 
acquiring the property, you should consider selling it to the SASP by 
negotiated sale at fixed price under the conditions specified at 
Sec. 101-45.304-12 of this title. The sales proceeds must be applied in 
whole or part payment for property acquired to replace the transferred 
property.


Sec. 102-39.45  What prohibitions apply to the exchange/sale of 
personal property?

    You must not use the exchange/sale authority for:
    (a) 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.
84  Clothing, individual equipment, and insignia.

    Note to Sec. 102-39.45(a): The exception to the prohibition in 
this paragraph (a) is Department of Defense (DOD) property in FSC 
Groups 10, 12, and 14 (except FSC Class 1005) for which the 
applicable DOD demilitarization requirements, and any other 
applicable regulations and statutes are met.


    (b) Materials in the National Defense Stockpile (50 U.S.C. 98-98h) 
or the Defense Production Act inventory (50 U.S.C. App. 2093).
    (c) Nuclear Regulatory Commission-controlled materials unless you 
meet the requirements of Sec. 101-42.1102-4 of this title.
    (d) Controlled substances, unless you meet the requirements of 
Sec. 101-42.1102-3 of this title.
    (e) Scrap materials, except in the case of scrap gold for fine 
gold.
    (f) Property that 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.
    (g) 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.
    (h) Combat material without demilitarizing it or obtaining a 
demilitarization waiver or other necessary clearances from the 
Department of Defense Demilitarization Office.
    (i) Flight Safety Critical Aircraft Parts unless you meet the 
provisions of Sec. 101-37.610 of this title.
    (j) Acquisition of unauthorized replacement property.
    (k) Acquisition of replacement property that violates any:
    (1) Restriction on procurement of a commodity or commodities;
    (2) Replacement policy or standard prescribed by the President, the 
Congress, or the Administrator of General Services; or
    (3) Contractual obligation.


Sec. 102-39.50  What necessary conditions apply to the exchange/sale of 
personal property?

    You may use the exchange/sale authority only if you meet all of the 
following conditions:
    (a) The property exchanged or sold is similar to the property 
acquired;
    (b) The property exchanged or sold is not excess or surplus, and 
the property acquired is needed for approved programs;
    (c) The property exchanged or sold was not acquired for the 
principal purpose of exchange or sale; and
    (d) You document at the time of exchange or sale (or at the time of 
acquisition if it precedes the sale) that the exchange allowance or 
sale proceeds will be applied to the acquisition of replacement 
property.


Sec. 102-39.55  What exceptions apply to the necessary conditions for 
exchange/sale?

    The exceptions that apply to the necessary conditions for exchange/
sale are:
    (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, 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 C--Exchange/Sale Methods and Reports


Sec. 102-39.60  What are the exchange methods?

    Exchange of property may be accomplished by either:
    (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.
    (b) The supplier delivers the replacement property to one of your

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organizational units and removes the property being replaced from a 
different organizational unit.


Sec. 102-39.65  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 title in the sale of 
property being replaced, except that the provisions of Sec. 101-45.304-
2(a) of this title 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 title.


Sec. 102-39.70  What are the accounting requirements for the proceeds 
of sale?

    You must account for sales proceeds in accordance with the general 
finance and accounting rules applicable to you. Except as otherwise 
directed by law, all proceeds from the sale of personal property under 
this part will be available during the fiscal year in which the 
property was sold and for one fiscal year thereafter for obligation for 
the purchase of replacement property. Any sales proceeds not applied to 
replacement purchases during this time must be deposited in the United 
States Treasury as miscellaneous receipts in the general fund.


Sec. 102-39.75  What am I required to report?

    (a) You must submit, within 90 calendar days after the close of 
each fiscal year, a summary report in a format of your choice on the 
exchange/sale transactions made under this part during the fiscal year 
(except for transactions involving books and periodicals in your 
libraries). The report must include:
    (1) A list by Federal Supply Classification Group of property sold 
under this part showing the:
    (i) Number of items sold;
    (ii) Acquisition cost;
    (iii) Proceeds;
    (iv) Cost of sales; and
    (v) The source from which the property was originally acquired, 
i.e., new procurement, excess, forfeiture, or another source other than 
new procurement.
    (2) A list by Federal Supply Classification Group of property 
exchanged under this part showing the:
    (i) Number of items exchanged;
    (ii) Acquisition cost;
    (iii) Exchange allowance; and
    (iv) The source from which the property was originally acquired, 
i.e., new procurement, excess, forfeiture, or another source other than 
new procurement.
    (b) Submit your report electronically or by mail to the General 
Services Administration, Personal Property Management Policy Division 
(MTP), 1800 F St. NW, Washington DC 20405.
    (c) Report control number: 1528-GSA-AN.
    (d) If you make no transactions under this part during a fiscal 
year, you must submit a report stating that no transactions occurred.

    Dated: September 21, 2000.
David A. Drabkin,
Acting Associate Administrator for Governmentwide Policy.
[FR Doc. 00-24661 Filed 9-25-00; 8:45 am]
BILLING CODE 6820-24-P