[Federal Register Volume 67, Number 81 (Friday, April 26, 2002)]
[Rules and Regulations]
[Pages 20687-20688]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-10097]


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DEPARTMENT OF DEFENSE

48 CFR Parts 208 and 210

[DFARS Case 2002-D003]


Defense Federal Acquisition Regulation Supplement; Competition 
Requirements for Purchases From a Required Source

AGENCY: Department of Defense (DoD).

ACTION: Interim rule with request for comments.

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SUMMARY: DoD has issued an interim rule amending the Defense Federal 
Acquisition Regulation Supplement (DFARS) to implement Section 811 of 
the Fiscal Year 2002 National Defense Authorization Act. Section 811 
requires DoD to conduct market research before purchasing a product 
listed in the Federal Prison Industries (FPI) catalog, to determine 
whether the FPI product is comparable in price, quality, and time of 
delivery to products available from the private sector.

DATES: Effective date: April 26, 2002.
    Comment date: Comments on the interim rule should be submitted to 
the address shown below on or before June 25, 2002, to be considered in 
the formation of the final rule.

ADDRESSES: Respondents may submit comments directly on the World Wide 
Web at http://emissary.acq.osd.mil/dar/dfars.nsf/pubcomm. As an 
alternative, respondents may e-mail comments to: dfars@acq.osd.mil. 
Please cite DFARS Case 2002-D003 in the subject line of e-mailed 
comments.
    Respondents that cannot submit comments using either of the above 
methods may submit comments to: Defense Acquisition Regulations 
Council, Attn: Ms. Susan Schneider, OUSD(AT&L)DP(DAR), IMD 3C132, 3062 
Defense Pentagon, Washington, DC 20301-3062; facsimile (703) 602-0350. 
Please cite DFARS Case 2002-D003.
    As a test, public comments will be posted on the World Wide Web as 
they are received. Interested parties may view the public comments at 
http://emissary.acq.osd.mil/dar/dfars.nsf.

FOR FURTHER INFORMATION CONTACT: Ms. Susan Schneider, (703) 602-0326.

SUPPLEMENTARY INFORMATION:

A. Background

    This interim rule amends the DFARS to implement Section 811 of the 
Fiscal Year 2002 National Defense Authorization Act (Public Law 107-
107). Section 811 requires DoD to conduct market research before 
purchasing a product listed in the FPI catalog, to determine whether 
the FPI product is comparable in price, quality, and time of delivery 
to products available from the private sector. If the FPI product is 
not comparable, DoD must use competitive procedures to acquire the 
product. In conducting such a competition, DoD must consider a timely 
offer from FPI for award in accordance with the specifications and 
evaluation factors in the solicitation.
    This rule was subject to Office of Management and Budget review 
under Executive Order 12866, dated September 30, 1993.

B. Regulatory Flexibility Act

    This rule may 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 will permit 
small entities to compete with FPI for DoD contract awards under 
certain conditions. An initial regulatory flexibility analysis has been 
prepared and is summarized as follows: This interim rule amends DoD 
policy pertaining to the acquisition of products from FPI. The rule 
implements new statutory requirements. The impact of the rule is 
unknown at this time. However, the rule could benefit small business 
concerns that offer products comparable to those listed in the FPI 
catalog, by permitting those concerns to compete for DoD contract 
awards.
    A copy of the analysis may be obtained from the point of contact 
specified herein. DoD invites comments from small businesses and other 
interested parties. DoD also will consider comments from small entities 
concerning the affected DFARS subparts in accordance with 5 U.S.C. 610. 
Such comments should be submitted separately and should cite DFARS Case 
2002-D003.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because the rule does 
not impose any information collection requirements 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 that urgent and compelling reasons exist to publish an 
interim rule prior to affording the public an opportunity to comment. 
This interim rule implements Section 811 of the Fiscal Year 2002 
National Defense Authorization Act (Public Law 107-107). Section 811 
requires DoD to conduct market research before purchasing a product

[[Page 20688]]

listed in the FPI catalog to determine whether the FPI product is 
comparable to products available from the private sector. If the FPI 
product is not comparable, DoD must use competitive procedures to 
acquire the product. Section 811 became effective on October 1, 2001. 
Comments received in response to this interim rule will be considered 
in the formation of the final rule.

List of Subjects in 48 CFR Parts 208 and 210

    Government procurement.

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


    Therefore, 48 CFR Parts 208 and 210 are amended as follows:
    1. The authority citation for 48 CFR Part 208 continues to read as 
follows:

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

PART 208--REQUIRED SOURCES OF SUPPLIES AND SERVICES

    2. Section 208.602 is added to read as follows:


208.602  Policy.

    (a) Before purchasing a product listed in the FPI Schedule, 
departments and agencies shall conduct market research to determine 
whether the FPI product is comparable to products available from the 
private sector that best meet the Government's needs in terms of price, 
quality, and time of delivery (10 U.S.C. 2410n). This is a unilateral 
decision made solely at the discretion of the department or agency.
    (i) If the FPI product is comparable, follow the policy at FAR 
8.602(a).
    (ii) If the FPI product is not comparable--
    (A) Use competitive procedures to acquire the product; and
    (B) Consider a timely offer from FPI for award in accordance with 
the specifications and evaluation factors in the solicitation.

    3. Section 208.606 is revised to read as follows:


208.606  Exceptions.

    For DoD, FPI clearances also are not required--
    (1) For orders of listed items totaling $250 or less that require 
delivery within 10 days; or
    (2) If market research shows that the FPI product is not comparable 
to products available from the private sector that best meet the 
Government's needs in terms of price, quality, and time of delivery.

    4. Part 210 is added to read as follows:

PART 210--MARKET RESEARCH

Sec.
210.001   Policy.

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


210.001  Policy.

    (a) Also conduct market research before purchasing a product listed 
in the Federal Prison Industries (FPI) Schedule. Use the results to 
determine whether the FPI product is comparable to products available 
from the private sector that best meet the Government's needs in terms 
of price, quality, and time of delivery. (See subpart 208.6.)

[FR Doc. 02-10097 Filed 4-25-02; 8:45 am]
BILLING CODE 5001-08-U