[Federal Register Volume 66, Number 213 (Friday, November 2, 2001)]
[Notices]
[Pages 55635-55636]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-27571]


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COMMITTEE FOR PURCHASE FROM PEOPLE WHO ARE BLIND OR SEVERELY DISABLED


Procurement List; Additions

AGENCY: Committee for Purchase From People Who Are Blind or Severely 
Disabled.

ACTION: Additions to the Procurement List.

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SUMMARY: This action adds to the Procurement List a commodity and a 
service to be furnished by nonprofit agencies employing persons who are 
blind or have other severe disabilities.

EFFECTIVE DATE: December 3, 2001.

ADDRESS: Committee for Purchase From People Who Are Blind or Severely 
Disabled, Jefferson Plaza 2, Suite 10800, 1421 Jefferson Davis Highway, 
Arlington, Virginia 22202-3259.

FOR FURTHER INFORMATION CONTACT: Sheryl D. Kennerly (703) 603-7740.

SUPPLEMENTARY INFORMATION: On August 31 and September 18, 2001 the 
Committee for Purchase From People Who Are Blind or Severely Disabled 
published notices (66 FR 45959 and 48115) of proposed additions to the 
Procurement List.

The Following Comments Pertain to Milk, Non-Fat Dry, Instantized

    Comments were received from the three current contractors for the 
dry milk, from workers at one of the designated nonprofit agencies, 
from five Members of Congress, two State representatives, and a county 
executive supporting the proposed addition to the Procurement List, and 
from two Members of Congress and two State legislators opposing the 
proposed addition. Congressional and State legislative opposition to 
the proposed addition focuses on one plant operated by one of the three 
current contractors, a very large business which will be only minimally 
impacted by the addition of dry milk to the Procurement List. That 
contractor told the Committee it intends to sell the plant to another 
of the current contractors for the dry milk, but will close it instead 
if the proposed addition is approved.

[[Page 55636]]

    If this plant is closed, the contractor indicated that 22 people 
will lose their jobs, in an area where comparable employment is not 
easy to find locally. The proposed addition to the Procurement List, 
however, is projected to create over 100 jobs for people with severe 
disabilities, a group whose unemployment rate has recently been 
estimated to be 70 percent, well above the rate for other groups 
including those in the locality of the affected plant. Consequently, 
the Committee has concluded that the benefit to people with severe 
disabilities created by this Procurement List addition outweighs the 
harm which may be done to the plant's employees, who could more readily 
find other jobs.
    The current contractor which intended to purchase the other 
contractor's plant informed the Committee that the proposed addition 
would have a serious impact on its plant which produces dry milk for 
the Government. Like the plant mentioned above, this contractor's plant 
has become increasingly dependent on Government sales in recent years 
as consumer use of dry milk has declined, to the point where such sales 
now represent a large minority of the plant's total sales. Loss of 
these sales, according to the contractor, will mean downsizing of the 
plant and loss of jobs for an unspecified number of its 61 workers.
    As indicated above, the Committee believes that any job loss at 
this contractor's plant would be outweighed by the creation of a larger 
number of jobs for people with severe disabilities. In addition, the 
four nonprofit agencies designated to supply the Government with the 
dry milk intend to subcontract the instantizing process to an approved 
supplier. This contractor is one of the approved suppliers with which 
the nonprofit agencies are negotiating. If this contractor supplies 
instantized milk to the nonprofit agencies, the job losses at its plant 
should be less than it currently estimates.
    Both these contractors noted that there are health issues involved 
in the production of instantized dry milk, and that their plants are 
certified by the U.S. Department of Agriculture (USDA) as meeting the 
health standards for dry milk production. USDA has informed the 
Committee that the designated nonprofit agencies either have been 
certified as meeting these standards or are in the process of being 
certified.
    The third current contractor informed the Committee that it is a 
small business, and that USDA policy prohibits the transfer of 
contracts from successful contractors such as itself to the Committee's 
program. USDA has informed the Committee that it has no such policy.
    The contractor claimed that it would be severely impacted by not 
being able to recoup its investment in equipment and processes needed 
to produce the dry milk through further Government contracts. The 
contractor also claimed that the process of having the milk instantized 
by a subcontractor in bulk and shipped to the nonprofit agencies for 
packaging at their locations would destroy the effects of the 
instantizing and make the milk unable to meet Government quality 
standards, as well as raising the price to the Government. The 
contractor provided a letter from its instantizing subcontractor which 
noted that losing this contract could result in job losses for 
employees with disabilities at the subcontractor's plant.
    By its own admission, this contractor is an ``autonomous 
subsidiary'' of a larger entity, which is not a small business. The 
Committee looks at the entire corporate structure of an affected 
contractor when assessing impact of a Procurement List addition. 41 CFR 
51-2.4(a)(4)(A). Loss of the dry milk contract would not cause a severe 
impact on the larger corporate entity. The contractor has only been 
producing dry milk for USDA for a short time, so it cannot be said to 
be dependent on this contract. Because of the competitive bidding 
requirement, the contractor cannot rely on the possibility of retaining 
the contracts for an item long enough to recoup a substantial 
investment. Accordingly, the Committee does not consider the 
frustration of this expectation to constitute severe adverse impact on 
the contractor.
    USDA has informed us that instantized milk can be successfully 
shipped in bulk without noticeably reducing the quality of the milk, 
and such shipments are the norm in the dry milk industry. The 
designated nonprofit agencies are considering using the instantizing 
subcontractor mentioned in the previous paragraph to do their 
instantizing, in which case any loss of jobs by that company would be 
less than the subcontractor has predicted. The price of the dry milk 
would not be increased beyond the level of a fair market price as a 
result of this addition to the Procurement List.
    For the reasons stated in the above paragraphs, the Committee has 
concluded that this addition to the Procurement List is not likely to 
have a severe adverse impact on the three current suppliers of this dry 
milk. However, in order to provide a more orderly transition from 
commercial suppliers to the Committee's program, and to mitigate the 
immediate impact of the addition on those suppliers, the Committee has 
agreed to a partial waiver of its mandatory source authority over the 
dry milk, in the amount of 34 percent of USDA's supply requirement, for 
a period not to exceed one year.

The Following Material Pertains to All of the Items Being Added to 
the Procurement List

    After consideration of the material presented to it concerning 
capability of qualified nonprofit agencies to provide the commodity and 
service and impact of the additions on the current or most recent 
contractors, the Committee has determined that the commodity and 
service listed below are suitable for procurement by the Federal 
Government under 41 U.S.C. 46-48c and 41 CFR 51-2.4.
    I certify that the following action will not have a significant 
impact on a substantial number of small entities. The major factors 
considered for this certification were:
    1. The action will not result in any additional reporting, 
recordkeeping or other compliance requirements for small entities other 
than the small organizations that will furnish the commodity and 
service to the Government.
    2. The action will not have a severe economic impact on current 
contractors for the commodity and service.
    3. The action will result in authorizing small entities to furnish 
the commodity and service to the Government.
    4. There are no known regulatory alternatives which would 
accomplish the objectives of the Javits-Wagner-O'Day Act (41 U.S.C. 
46--48c) in connection with the commodity and service proposed for 
addition to the Procurement List.
    Accordingly, the following commodity and service are added to the 
Procurement List:

Commodity

Milk, Non-Fat Dry, Instantized

    8910-00-NSH-0002

Service

Office Supply Store

Federal Aviation Administration, Mike Monroney Aeronautical Center, 
Oklahoma City, Oklahoma

    This action does not affect current contracts awarded prior to the 
effective date of this addition or options that may be exercised under 
those contracts.

Sheryl D. Kennerly,
Director, Information Management.
[FR Doc. 01-27571 Filed 11-1-01; 8:45 am]
BILLING CODE 6353-01-P