[Federal Register Volume 68, Number 88 (Wednesday, May 7, 2003)]
[Rules and Regulations]
[Pages 24372-24382]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-11271]


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GENERAL SERVICES ADMINISTRATION

48 CFR Parts 511, 516, 532, 538, 546, and 552

[GSAR Amendment 2003-01; GSAR Case No. 2002-G505]
RIN 9000-AH76


General Services Administration Acquisition Regulation; Federal 
Supply Schedule Contracts--Acquisition of Information Technology by 
State and Local Governments Through Federal Supply Schedules

AGENCIES: Office of Acquisition Policy, General Services Administration 
(GSA).

ACTION: Interim rule with request for comments.

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SUMMARY: The General Services Administration (GSA) is amending the 
General Services Administration Acquisition Regulation (GSAR) to 
implement section 211 of the E-Government Act of 2002. Section 211 
authorizes the Administrator of GSA to provide for the use by States or 
local governments of its Federal Supply Schedules for automated data 
processing equipment (including

[[Page 24373]]

firmware), software, supplies, support equipment, and services.

DATES: Effective Date: May 7, 2003.
    Applicability Date: This amendment applies to solicitations and 
existing contracts for Schedule 70, Information Technology (IT), and 
the Corporate Schedule, containing Information Technology (IT) Special 
Item Numbers SINs, as defined in GSAM 538.7001, Definitions, Schedule 
70. Further, this amendment applies to contracts awarded after the 
effective date of this rule for Schedule 70 and Corporate Schedule 
contracts containing IT SINs. Existing Schedule 70 contracts and 
Corporate Schedule contracts containing IT SINs, shall be modified by 
mutual agreement of both parties.
    Comment Date: Interested parties should submit comments to the 
Regulatory Secretariat at the address shown below on or before July 7, 
2003 to be considered in the formulation of a final rule.

ADDRESSES: Submit written comments to-- General Services 
Administration, Regulatory Secretariat (MVA), 1800 F Street, NW., Room 
4035, Attn: Ms. Laurie Duarte, Washington, DC 20405. Submit electronic 
comments via the Internet [email protected] Please submit 
comments only and cite GSAR case 2002-G505, in all correspondence 
related to this case.

FOR FURTHER INFORMATION CONTACT: The Regulatory Secretariat, Room 4035, 
GS Building, Washington, DC 20405, (202) 501-4755, for information 
pertaining to status or publication schedules. For clarification of 
content, contact Ms. Linda Nelson, Procurement Analyst, at (202) 501-
1900. Please cite GSAR case 2002-G505. The TTY Federal Relay Number for 
further information is 1-800-877-8973.

SUPPLEMENTARY INFORMATION:

A. Background

    This interim rule amends GSAM Parts 511, 516, 532, 538 and 552 to 
implement Section 211 of the E-Government Act of 2002. Section 211 of 
the E-Government Act of 2002 (Pub. L. 107-347) amended the Federal 
Property and Administrative Services Act to allow for ``cooperative 
purchasing,'' where the Administrator of GSA provides States and 
localities access to certain items offered through GSA's supply 
schedules. Section 211 amends 40 U.S.C. 502 by adding a new subsection 
``(c)'' that allows, to the extent authorized by the Administrator, a 
State or local government to use Federal Supply Schedules of the 
General Services Administration to purchase automated data processing 
equipment (ADPE) (including firmware), software, supplies, support 
equipment, and services. ``State or local government'' includes any 
State, local, regional, or tribal government, or any instrumentality 
thereof (including any local educational agency or institution of 
higher education). Eligible ordering activities (as defined in 552.238-
78(b), Scope of Contract (Eligible Ordering Activities)) are 
encouraged, but not required, to use the ordering procedures outlined 
in Federal Acquisition Regulation Subpart 8.4 (48 CFR Chapter 1, 
Subpart 8.4).
    GSA published a proposed rule in the Federal Register at 68 FR 
3220, January 23, 2003. GSA concluded that the proposed rule should be 
converted to an interim rule, with substantive changes. The interim 
rule modifies the proposed rule to--
    [sbull] Incorporate schedule 70 information technology (IT) special 
item numbers (SINs) that are included in IT ``corporate'' schedule 
contracts;
    [sbull] Delete the language regarding dealer sales and their impact 
on the price reduction clause from the clause at 552.232-83, 
Contractor's Billing Responsibilities;
    [sbull] Permit authorized state and local governments to add terms 
and conditions as part of the statement of work (SOW) or statement of 
objectives (SOO) required by the state or local government statutes, 
ordinances, regulations or orders to the extent that they do not 
conflict with the schedule contract terms and conditions; and
    [sbull] Revise the disputes language in the clause at 552.238-79, 
Use of Federal Supply Schedule Contracts by Entities--Cooperative 
Purchasing, to encourage the use of Alternative Dispute Resolution to 
the extent authorized by law.

B. Summary and Discussion of Significant Comments

    Twenty-four respondents submitted public comments during the 
comment period. These comments were considered in the formulation of 
the interim rule and their disposition is summarized as follows:

1. Scope of Rule

    a. Several respondents addressed whether Information Technology 
(IT) available on the GSA corporate schedule will be available for 
State or local use.
    Response: Yes. However, only the Corporate Schedule contracts 
containing IT Special Item Numbers (SINs), will be available for State 
or local use.
    b. One respondent objected to the inclusion of Architect and 
Engineering services in the schedules program as violating both the 
Brooks Architect and Engineering Act and most state statutes.
    Response: Neither the proposed rule, nor the interim rule, add 
Architect and Engineering services to the schedules program. Neither 
the Brooks Architect and Engineering Act, nor the state statutes 
identified in the respondent's comments, apply to the information 
technology hardware, software or services provided by Schedule 70 or 
the information technology corporate Schedule contracts containing IT 
SINs.
    c. Several contractors responding to the rule expressed interest in 
participating in this program; however, the products and services they 
offer do not fall within the scope of the products and services offered 
under Schedule 70 or the Corporate Schedule, containing IT SINs, or 
they have IT services on another Federal Supply Schedule in support of 
other Federal supply classes not covered by this rule.
    Response: Cooperative purchasing may only be conducted pursuant to 
statutory authorization. Section 211 of the e-Government Act of 2002 
authorizes GSA to provide State and local government entities access to 
information technology products, services, and support equipment. 
Section 211 does not grant authority to GSA to broaden the scope of 
this rule to include products and services other than those 
specifically authorized by that Section. However, to the extent any 
business offers a product or service that falls within the scope of the 
rule, that entity may seek to sell their product or service to the 
Federal Government, states, and localities, by negotiating a schedule 
contract under Schedule 70 or the Corporate Schedule, containing IT 
SINs.
    d. One respondent expressed concern with allowing dealers to sell 
to State and local governments.
    Response: Disagree. State and local government entities should be 
able to access the same distribution network for goods and services as 
all other authorized users of the GSA Schedules.
    e. One respondent raised concerns about extending cooperative 
purchasing to commodities other than IT.
    Response: The statute and this regulation limit application of 
cooperative purchasing to IT products, services, and support equipment.

2. Ordering

    a. One respondent inquired as to whether State and local entities 
will be allowed to: place orders through existing BPAs; establish BPAs; 
and place orders against future BPAs.
    Response: State and local entities will not be allowed to place 
orders through

[[Page 24374]]

BPAs established prior to this rule unless the State or local entity 
was previously identified as a user of the BPA consistent with law. 
However, State and local entities will be allowed to establish their 
own BPAs upon issuance of an effective rule.
    b. Several respondents addressed issues involving e-Commerce.
    Response: These comments are outside the scope of the proposed 
rule. However, GSA may conduct a business case analysis to evaluate the 
feasibility of allowing non-federal eligible ordering activities to use 
GSA Advantage! or any other e-commerce.
    c. Several respondents objected to the language, which prohibits 
eligible ordering activities from adding additional terms and 
conditions.
    Response: This restrictive language has been removed. Eligible 
ordering activities may add terms and conditions required by statutes, 
ordinances, regulations, or orders, to the extent that they do not 
conflict with the schedule contract terms and conditions.
    d. Several respondents raised concerns regarding the language added 
to the clause at 552.232-83, Contractor's Billing Responsibilities, 
concerning dealer sales. They asserted that the language appears to 
conflict with the language in paragraph (d)(3) of the clause at 
552.238-75, concerning eligible ordering activities.
    Response: The language in the clause at 552.232-83, Contractor's 
Billing Responsibilities, was removed.
    e. Several respondents objected to limiting acceptance or decline 
of orders to five days because their contracts allow longer time 
periods to decline order.
    Response: To the extent that the language of individually 
negotiated contracts allows for a longer response time, that contract 
language prevails.
    f. Several respondents objected to allowing the vendors to decline 
orders placed by State and local entities.
    Response: The e-Government Act makes clear that vendor 
participation is voluntary. Section 211 of the Act states in paragraph 
(c)(2), ``Voluntary Use--In any case of the use by a State or local 
government of a Federal supply schedule pursuant to paragraph (1), 
participation by a firm that sells to the Federal Government through 
the supply schedule shall be voluntary with respect to a sale to the 
State or local government through such supply schedule.'' (Emphasis 
added.)
    g. One respondent raised a concern whether various states 
implementing the model procurement code will be able to use the GSA 
schedules under this proposed rule.
    Response: This issue is outside the scope of the proposed rule. 
States and localities will need to make their own legal determinations 
as to whether use of the schedules is consistent with their laws, 
regulations, and other policies.
    h. One respondent questioned whether the FAR ordering procedures 
must be used by non-federal eligible ordering activities.
    Response: The preamble now contains language, which encourages the 
use of Federal Acquisition Regulation Subpart 8.4 (48 CFR Chapter 1, 
Subpart 8.4), but does not require its use.

3. Fees

    a. Several respondents asked for further clarity on when a 
particular sale should be recorded as a schedule sale for purposes of 
calculating the industrial funding fee.
    Response: The proposed rule does not address this topic and any 
clarification of this issue would be subject to its own rulemaking.
    b. Various respondents suggested that the Industrial Funding Fee be 
waived for cooperative purchasing sales or remitted to the States.
    Response: GSA instituted the Industrial Funding Fee as a means of 
cost recovery at the direction of Congress. GSA does not intend to 
waive this feature of its program.

4. Dispute Resolution

    a. Several respondents suggested that dispute resolution for State 
and local government entities be performed by the GSA Board of Contract 
Appeals (GSBCA).
    Response: Under the proposed rule as well as this interim rule, 
orders placed by eligible ordering activities create new contracts to 
which the Federal Government is not a party. The jurisdiction of the 
GSBCA depends upon the Contract Disputes Act of 1978 and is limited to 
review of contract disputes where the Federal Government awards the 
contract. To implement the change proposed by the commenter would 
require a change to the Contract Disputes Act.
    b. Several respondents addressed the desirability of allowing 
contract disputes to be resolved through arbitration or other forms of 
alternative dispute resolution.
    Response: The interim rule addresses this issue. Paragraph (a)(1) 
of the clause at 552.238-79, Use of Federal Supply Schedule Contracts 
by Certain Entities--Cooperative Purchasing, encourages the use of 
alternative dispute resolution to the extent authorized by law.

5. Other Issues

    a. One respondent opposed Most Favored Customer pricing clauses.
    Response: This issue is beyond the scope of this rule, which 
focuses on making certain schedule contracts available for cooperative 
purchasing. The proposed rule does not change existing GSA Multiple 
Award Schedule pricing policies.
    b. One respondent suggested that State and local entities be able 
to contribute past performance history for Schedule 70 contractors.
    Response: To the extent that past performance information is 
voluntarily submitted to the GSA contracting officer by State and local 
government entities as a result of cooperative purchasing, the GSA 
shall give the information due consideration in future negotiations 
regarding the contractor's continued participation in the schedules 
program and selling to States and localities.
    c. One respondent addressed the concern regarding the origin of 
products from non-qualified sources.
    Response: This issue is outside the scope of this rule. Existing 
statutes and regulations address this concern already.
    d. One respondent asked GSA to commit to establishing a program for 
awarding schedule contracts to small businesses specializing in doing 
business with State and local governments.
    Response: This issue is outside the scope of the rule. GSA has 
existing programs to encourage small businesses to seek schedule 
contracts.
    e. One respondent asked how FSS will be able to monitor and assess 
the effect of cooperative purchasing.
    Response: To evaluate the effect of cooperative purchasing, GSA 
intends to monitor changes in access for federal customers and the 
impact on GSA's ability to negotiate favorable pricing and terms and 
conditions. GSA will also monitor participation by small businesses.
    f. One respondent suggested that contractors be allowed to modify 
their contracts if they no longer wished to accept orders from State 
and local government under its Schedule contract.
    Response: The statute requires that participation be voluntary on 
the part of the contractors. Contractors wishing to be removed from 
participation in cooperative purchasing, after electing to participate, 
should submit a contract modification request to their GSA contracting 
officer.

[[Page 24375]]

C. List of Information Technology Special Item Numbers

    State and local governments are authorized to procure IT products 
and services from Schedule 70, Information Technology and the Corporate 
Schedule contracts containing the IT SINs listed below. The listing of 
SINs is also available at http://fss.gsa.gov/elibrary. Click on 
Schedules e-Library. A logo will identify all the participating 
contractors and special items numbers available for purchase by 
eligible non-federal ordering activities.

Schedule 70 Special Item Numbers

SPECIAL ITEM NO. 132-3 LEASING OF PRODUCT (FPDS Code W070)
SPECIAL ITEM NO. 132-4 DAILY / SHORT TERM RENTAL (FPDS Code W070)
SPECIAL ITEM NO. 132-8 PURCHASE OF EQUIPMENT
FSC Class 7010--System Configuration
End User Computers/Desktop Computers
Professional Workstations
Servers
Laptop/Portable/Notebook Computers
Large Scale Computers
Optical and Imaging Systems
Other System Configuration Equipment Not Elsewhere Classified
FSC Class 7025--Input/Output and Storage Devices
Printers
Displays
Graphics, including Video Graphics, Light Pens, Digitizers, Scanners, 
and Touch Screens
Network Equipment
Other Communications Equipment
Optical Recognition Input/Output Devices
Storage Devices, including Magnetic Storage, Magnetic Tape Storage and 
Optical Disk Storage
Other Input/Output and Storage Devices Not Elsewhere Classified
FSC Class 7035--ADP Support Equipment
ADP Support Equipment
FSC Class 7042--Mini and Micro Computer Control Devices
Microcomputer Control Devices
Telephone Answering and Voice Messaging Systems
FSC Class 7050--ADP Components
ADP Boards
FSC Class 5995--Cable, Cord, and Wire Assemblies: Communications 
Equipment
Communications Equipment Cables
FSC Class 6015--Fiber Optic Cables
Fiber Optic Cables
FSC Class 6020--Fiber Optic Cable Assemblies and Harnesses
Fiber Optic Cable Assemblies and Harnesses
FSC Class 6145--Wire and Cable, Electrical
Coaxial Cables
FSC Class 5805--Telephone and Telegraph Equipment
Telephone Equipment
Audio and Video Teleconferencing Equipment
FSC Class 5810--Communications Security Equipment and Components
Communications Security Equipment
FSC Class 5815--Teletype and Facsimile Equipment
Facsimile Equipment (FAX)
FSC Class 5820--Radio and Television Communication Equipment, Except 
Airborne
Two-Way Radio Transmitters/Receivers/Antennas
Broadcast Band Radio Transmitters/Receivers/Antennas
Microwave Radio Equipment/Antennas and Waveguides
Satellite Communications Equipment
FSC Class 5821--Radio and Television Communication Equipment, Airborne
Airborne Radio Transmitters/Receivers
FSC Class 5825--Radio Navigation Equipment, Except Airborne
Radio Navigation Equipment/Antennas
FSC Class 5826--Radio Navigation Equipment, Airborne
Airborne Radio Navigation Equipment
FSC Class 5830--Intercommunication and Public Address Systems, Except 
Airborne
Pagers and Public Address Systems (wired and wireless transmission, 
including background music systems)
FSC Class 5841--Radar Equipment, Airborne
Airborne Radar Equipment
FSC Class 5895--Miscellaneous Communication Equipment
Miscellaneous Communications Equipment
Special Physical, Visual, Speech, and Hearing Aid Equipment
Used Equipment
Installation for equipment offered under SIN 132-8 (FPDS Code N070)
Deinstallation for equipment offered under SIN 132-8 (FPDS Code N070)
Reinstallation for equipment offered under SIN 132-8 (FPDS Code N070)
Special Item No. 132-12 Maintenance of Equipment, Repair Service, and 
Repair Parts/Spare Parts (FPDS Code for Maintenance and Repair 
Service--J070; FSC Class for Repair Parts/Spare Parts--See FSC Class 
for basic equipment)
Special Item No. 132-32 Term Software Licenses
FSC Class 7030--Information Technology Software
Large Scale Computers
Operating System Software
Application Software
Electronic Commerce (EC) Software
Utility Software
Communications Software
Core Financial Management Software
Ancillary Financial Systems Software
Special Physical, Visual, Speech, and Hearing Aid Software
Microcomputers
Operating System Software
Application Software
Electronic Commerce (EC) Software
Utility Software
Communications Software
Core Financial Management Software
Ancillary Financial Systems Software
Special Physical, Visual, Speech, and Hearing Aid Software

Special Item No. 132-33 Perpetual Software Licenses
FSC Class 7030--Information Technology Software
Large Scale Computers
Operating System Software
Application Software
Electronic Commerce (EC) Software
Utility Software
Communications Software
Core Financial Management Software
Ancillary Financial Systems Software
Special Physical, Visual, Speech, and Hearing Aid Software
Microcomputers
Operating System Software
Application Software
Electronic Commerce (EC) Software
Utility Software
Communications Software
Core Financial Management Software
Ancillary Financial Systems Software
Special Physical, Visual, Speech, and Hearing Aid Software
Special Item No. 132-34 Maintenance of Software
Special Item No. 132-50 Training Courses for Information Technology 
Equipment and Software (FPDS Code U012)

[[Page 24376]]

Special Item No. 132-51 Information Technology Professional Services
IT Facility Operation and Maintenance (FPDS CODE D301)
IT Systems Development Services (FPDS CODE D302)
IT Systems Analysis Services (FPDS Code D306)
Automated Information Systems Design and Integration Services (FPDS 
Code D307)
Programming Services (FPDS Code D308)
IT Backup and Security Services (FPDS Code D310)
IT Data Conversion Services (FPDS Code D311)
Computer Aided Design/Computer Aided Manufacturing (CAD/CAM) Services 
(FPDS Code D313)
IT Network Management Services (FPDS Code D316)
Automated News Services, Data Services, or Other Information Services 
(FPDS Code D317)
Other Information Technology Services, Not Elsewhere
Classified (FPDS Code D399)

Special Item No. 132-52 Electronic Commerce Services FPDS Code D304--
ADP and Telecommunications Transmission Services

Value Added Network Services (VANS)
E-Mail Services
Internet Access Services
Navigation Services

FPDS CODE D399--OTHER DATA TRANSMISSION SERVICES, NOT ELSEWHERE 
CLASSIFIED (except ``Voice'' and Pager Transmission Services)

Special Item No. 132-53 Wireless Services (FPDS Code D304)

Excluding local and long distance voice, data, video, and dedicated 
transmission services which are NOT mobile)
Paging Services
Cellular/PCS Voice Services

Corporate Schedule Special Item Numbers

    [sbull] C 5805, Telephone and Telegraph Equipment
    [sbull] C 5810, Communications Security Equipment and Components
    [sbull] C 5815, Teletype and Facsimile Equipment (includes Ticker, 
Tape and Sigtot Equipment)
    [sbull] C 5820C, Radio and Television Communication Equipment, 
Except Airborne, Includes Telemetering Equipment; Monitors and 
Monitors/Receivers, Including Spare & Repair Parts and Accessories; 
Television Cameras, Color or Monochrome, Including Spare & Repair Parts 
and Accessories; Audio Equipment, Including Spare and Repair Parts & 
Accessories; Telecommunications Equipment, Including Spare and Repair 
Parts & Accessories.
    [sbull] C 5821B, Radio and Television Communication Equipment, 
Airborne, Includes Telemetering Equipment.
    [sbull] C 5825, Radio Navigation Equipment, Except Airborne, 
Includes Loran Equipment; Shoran Equipment; Direction Finding 
Equipment.
    [sbull] C 5826, Radio Navigation Equipment, Airborne, Includes 
Loran Equipment; Shoran Equipment; Direction Finding Equipment.
    [sbull] C 5830, Intercommunication and Public Access Systems, 
Except Airborne, Includes Wired Audio Systems; Office Type Systems; 
Shipboard Systems; Tank Systems.
    [sbull] C 5841, Radar Equipment, Airborne, Note-Radar assemblies 
and subassemblies designed specifically for use with fire control 
equipment or guided missiles are excluded from this class and are 
included in the appropriate classes of Group 12 or Group 14.
    [sbull] C 5895B, IT Communication Equipment.
    [sbull] C 5995, Cable, Cord, and Wire Assemblies: Communications 
Equipment, Includes only those types of cable, cord, and Wire 
Assemblies and Sets (and Wiring Harnesses) used on or with equipment 
and components covered by Groups 58 and 59.
    [sbull] C 6015, Fiber Optic Cables.
    [sbull] C 6020, Fiber Optic Cable Assemblies and Harnesses.
    [sbull] C 6145B, Coaxial Cable for IT.
    [sbull] C 7010, UT Equipment System Configuration.
    [sbull] C 7025, IT Input/Output and Storage Devices.
    [sbull] C 7030, IT Software.
    [sbull] C 7035, IT Support Equipment.
    [sbull] C 7042, Mini and Micro Computer Control Devices.
    [sbull] C 7050, IT Components.
    [sbull] C D301, IT Facility Operation and Maintenance Services.
    [sbull] C D302, IT Systems Development Services.
    [sbull] C D304, IT Telecommunications and Transmission Services.
    [sbull] C D306, IT Systems Analysis Services.
    [sbull] C D307, Automated Information System Design and Integration 
Services.
    [sbull] C D308, Programming Services.
    [sbull] C D310, IT Backup and Security Services.
    [sbull] C D311, IT Data Conversion Services.
    [sbull] C D313, Computer Aided Design/Computer Aided. Manufacturing 
(CAD/CAM).
    [sbull] C D316, Telecommunications Network Management Services.
    [sbull] C D317, Automated News Services, Data Services, or Other 
Information Services.
    [sbull] C D399, Other ADP and Telecommunications Services (includes 
data storage on tapes, compact disks, etc.).
    [sbull] C J070, Information Technology--Maintenance of Equipment, 
Repair Services and/or Repair/Spare Parts.
    [sbull] C N070, Information Technology Installation of IT Equipment 
(including firmware), software, supplies and support equipment.
    [sbull] C U012, IT Software, Equipment, and Telecommunications 
Training.
    [sbull] C W070, Lease or Rental of Equipment.

D. Unfunded Mandates Reform Act and Executive Order 13132

    The following statutes and Executive orders do not apply to this 
rulemaking: Unfunded Mandates Reform Act of 1995; Executive Order 
13175, Consultation and Coordination with Indian Tribal Governments; 
and Executive Order 13132, Federalism.

E. Executive Order 12866

    This is not a significant regulatory action and, therefore, was not 
subject to review under Section 6(b) of Executive Order 12866, 
Regulatory Planning and Review, dated September 30, 1993. This rule is 
not a major rule under 5 U.S.C. 804.

F. Regulatory Flexibility Act

    An Initial Regulatory Flexibility Analysis (IRFA) has been prepared 
and submitted to the Chief Counsel for Advocacy of the Small Business 
Administration. Copies of the IRFA are available from the Regulatory 
Secretariat. GSA will consider comments from small entities concerning 
the affected GSAR Parts 511, 516, 532, 538, and 552 in accordance with 
5 U.S.C. 610. Interested parties must submit such comments separately 
and should cite 5 U.S.C 601, et seq., GSAR case 2002-G505, in 
correspondence. The IRFA indicates that the interim rule will affect 
large and small entities including small businesses that are awarded 
Schedule 70 contracts and Corporate Schedule contracts containing IT 
SINs, under the GSA Federal Supply Schedule program; non-schedule 
contractors, including small businesses, contracting with State or 
local governments; and small governmental jurisdictions that will be 
eligible to place orders under Schedule 70 contracts and Corporate 
Schedule

[[Page 24377]]

contracts containing IT SINs. The analysis is as follows:

    This Initial Regulatory Flexibility Analysis has been prepared 
consistent with the criteria of 5 U.S.C. 604.
    1. Description of the reasons why action by the agency is being 
considered.
    To implement section 211, Authorization for Acquisition of 
Information Technology by States and Local Governments through 
Federal Supply Schedules, of the E-Government Act of 2002 (Pub. L. 
107-347). Section 211 amends section 502 of title 40, United States 
Code, to authorize the Administrator to provide for use by State or 
local governments of Federal Supply Schedules of the General 
Services Administration for automated data processing equipment 
(including firmware), software, supplies, support equipment, and 
services. The rule opens the Federal Supply Schedule 70 and 
Corporate Schedule contracts containing information technology (IT) 
Special Item Numbers (SINs), for use by other governmental entities 
to enhance intergovernmental cooperation.
    2. Succinct statement of the objectives of, and legal basis for 
the interim rule.
    The interim rule will implement section 211 of the E-Government 
Act of 2002 with the objective of opening the Federal Supply 
Schedule 70 and Corporate Schedule contracts containing IT SINs for 
use by other governmental entities to enhance intergovernmental 
cooperation. The goal of the new rule is to make ``government'' 
(considering all levels) more efficient by reducing duplication of 
effort and utilizing volume purchasing techniques for the 
acquisition of IT products and services.
    3. Description of, and where feasible, estimate of the number of 
small entities to which the interim rule will apply.
    The rule will affect large and small entities including small 
businesses, that are awarded Schedule 70 contracts and Corporate 
Schedule contracts containing IT SINs, under the GSA Federal Supply 
Schedule program; non-schedule contractors, including small 
businesses, contracting with State or local governments; and small 
governmental jurisdictions that will be eligible to place orders 
under Schedule 70 and Corporate Schedule contracts containing IT 
SINs. Approximately sixty-eight percent (2,300) of GSA Schedule 70 
contractors are small businesses and approximately sixty-eight 
percent (125) of Corporate Schedule contractors are small 
businesses. All of those small business Schedule 70 contractors, and 
Corporate Schedule contractors, containing IT SINs will be allowed, 
at the schedule contractor's option, to accept orders from State and 
local governments. Obviously, the expanded authority to order from 
Schedule 70 and Corporate Schedule contracts containing IT SINs, 
could increase the sales of small business schedule contractors. It 
is difficult to identify the number of non-schedule small businesses 
that currently sell directly to State and local governments. The 
ability of governmental entities to use Schedule 70 and Corporate 
Schedule contracts containing IT SINs, may affect the competitive 
marketplace in which those small businesses operate. State and local 
government agencies could realize lower prices on some products and 
services, less administrative burden and shortened procurement lead 
times. The rule does not affect or waive State or local government 
preference programs. Finally, small governmental jurisdictions will 
also be affected. The 50 states, 3139 counties, 19,365 incorporated 
municipalities, 30,386 minor subdivisions, 3,200 public housing 
authorities, 14,178 school districts, 1,625 public educational 
institutions of higher learning, and 550 Indian tribal governments 
would be among those affected if they chose to order from Schedule 
70 and Corporate Schedule contracts containing IT SINs. Federal 
Supply Schedule contracts are negotiated as volume purchase 
agreements, with generally very favorable pricing. The ability of 
small governmental entities to order from Schedule 70 and associated 
Corporate Schedule contracts holds out the potential for significant 
cost savings for those organizations.
    4. Description of projected reporting, recordkeeping, and other 
compliance requirements of the rule, including an estimate of the 
classes of small entities that will be subject to the requirement 
and the type of professional skills necessary for preparation of the 
report or record.
    The interim rule makes changes in certain provisions or clauses 
in order to recognize the fact that authorized non-federal ordering 
activities may place orders under the contract. The Office of 
Management and Budget under the Paperwork Reduction Act has 
previously approved these clauses and the changes do not impact the 
information collection or recordkeeping requirements.
    5. Identification, to the extent practicable, of all relevant 
Federal rules that may duplicate, overlap or conflict with the rule.
    The interim rule does not duplicate, overlap, or conflict with 
any other Federal rules.
    6. Description of any significant alternatives to the interim 
rule that accomplish the stated objectives of applicable statutes 
and that minimize any significant economic impact of the rule on 
small entities.
    There are no practical alternatives that will accomplish the 
objective of this rule.

G. Paperwork Reduction Act

    The new provision at GSAR 552.232-82, Contractor's Remittance 
(Payment) Address, contains an information collection requirement that 
is subject to the Paperwork Reduction Act (44 U.S.C. 3501 et seq.). The 
provision provides for the offeror to indicate the payment address to 
which checks should be mailed for payment of invoices and provides for 
the offeror to identify participating dealers and provide their 
addresses for receiving orders and payments on behalf of the 
contractor. This information is the same as is normally required in the 
commercial world and does not represent a Government-unique information 
collection. Therefore, the estimated burden for this clause under the 
Paperwork Reduction Act is zero. GSA has a blanket approval under 
control number 3090-0250 from OMB for information collections with a 
zero burden estimate.
    The new clause at GSAR 552.232-83, Contractor's Billing 
Responsibilities, contains a recordkeeping requirement that is subject 
to the Paperwork Reduction Act (44 U.S.C. 3501 et seq.). The clause 
provides for the contractor to require all dealers participating in the 
performance of the contract to agree to maintain certain records on 
sales made under the contract on behalf of the contractor. The records 
required are the same as those normally maintained by dealers in the 
commercial world and do not represent a Government-unique recordkeeping 
requirement. Therefore, the estimated burden for this clause under the 
Paperwork Reduction Act is zero. GSA has a blanket approval under 
control number 3090-0250 from OMB for information collections with a 
zero burden estimate.
    The revised clause at GSAR 552.238-75, Price Reductions, contains 
an information collection requirement that is subject to the Paperwork 
Reduction Act (44 U.S.C. 3501 et seq.) that has previously been 
approved by the OMB under the Paperwork Reduction Act and assigned 
control number 3090-0235. The changes made to the clause by this rule 
do not have an impact on the information collection requirement, which 
was previously approved. Therefore, it has not been submitted to OMB 
for approval under the Act.

H. Determination To Issue an Interim Rule

    A determination has been made under the authority of the 
Administrator of General Services that urgent and compelling reasons 
exist to promulgate this interim rule without prior opportunity for 
public comment. This action is necessary to implement Section 211 of 
the E-Government Act of 2002, signed by the President on December 17, 
2002. This case was published for public comment as a proposed rule at 
68 FR 3220, January 23, 2003, and resulting comments have been 
incorporated into the rule. GSA wishes to obtain public comments on the 
changes. Due to the statutory deadline, the rule is being issued as an 
interim rule rather than as a second proposed rule. Title IV, Section 
402 of the Act directed that within 120 days, the Administrator of 
General Services implement the provision of the Act. However, pursuant 
to Public Law 98-577 and FAR 1.501, public comments received in 
response to this interim rule

[[Page 24378]]

will be considered in formulating the final rule.

List of Subjects in 48 CFR Parts 511, 516, 532, 538, 546, and 552

    Government procurement.

    Dated: May 2, 2003.
David A. Drabkin,
Deputy Associate Administrator, Office of Acquisition Policy.

0
Therefore, GSA amends 48 CFR parts 511, 516, 532, 538, 546, and 552 as 
set forth below:

0
1. The authority citation for 48 CFR parts 511, 516, 532, 538, 546, and 
552 is revised to read as follows:

    Authority: 40 U.S.C. 121(c).

PART 511--DESCRIBING AGENCY NEEDS

0
2. Amend section 511.204 in paragraphs (c)(3) and (d) by adding a 
sentence to the end of each paragraph to read as follows:


511.204  Solicitation provisions and contract clauses.

* * * * *
    (c) * * *
    (3) * * * In solicitations and contracts for FSS Schedule 70 and 
the Corporate Schedule containing information technology Special Item 
Numbers, use Alternate I.
    (d) * * * In solicitations and contracts for FSS Schedule 70 and 
the Corporate Schedule containing information technology Special Item 
Numbers, use Alternate I.

PART 516--TYPES OF CONTRACTS

0
3. Amend section 516.506 by redesignating paragraph (c) as paragraph 
(d); adding a new paragraph (c); and revising the last sentence in the 
newly designated paragraph (d) to read as follows:


516.506  Solicitation provisions and contract clauses.

* * * * *
    (c) In solicitations and contracts for FSS Schedule 70 and the 
Corporate Schedule containing information technology Special Item 
Numbers, use 552.216-72, Placement of Orders, Alternate III, instead of 
Alternate II.
    (d) * * * Use 552.216-73 Alternate II when 552.216-72 Alternate II 
or Alternate III are prescribed.

PART 532--CONTRACT FINANCING

0
4. Revise section 532.206 to read as follows:


532.206  Solicitation provisions and contract clauses.

    (a) Discounts for prompt payment. Include 552.232-8, Discounts for 
Prompt Payments, in multiple award schedule solicitations and contracts 
instead of the clause at FAR 52.232-8. In solicitations and contracts 
for FSS Schedule 70 and the Corporate Schedule containing information 
technology Special Item Numbers (SINs), use Alternate I.
    (b) The contracting officer shall insert the clause at 552.232-81, 
Payments by Non-Federal Ordering Activities, in solicitations and 
schedule contracts for Schedule 70 and Corporate Schedule contracts 
containing information technology SINs.
    (c) The contracting officer shall insert the provision at 552.232-
82, Contractor's Remittance (Payment) Address, in all Federal Supply 
Schedule solicitations and contracts.
    (d) The contracting officer shall insert the clause at 552.232-83, 
Contractor's Billing Responsibilities, in all Multiple Award Schedule 
solicitations and contracts.


532.7003  Contract clause.

0
5. Amend section 532.7003 by revising paragraph (b); and adding a new 
paragraph (c) to read as follows:
* * * * *
    (b) Federal Supply Service contracts. Use Alternate I of the clause 
at 552.232-77 for all FSS schedule solicitations and contracts, except 
Federal Supply Schedule 70, Information Technology, and the Corporate 
Schedule contracts containing Information Technology Special Item 
Numbers.
    (c) Federal Supply Service schedule contracts for information 
technology Special Item Numbers. In solicitations and contracts for FSS 
Schedule 70 and the Corporate Schedule containing information 
technology Special Item Numbers, use 552.232-79 instead of 552.232-77.

PART 538--FEDERAL SUPPLY SCHEDULE CONTRACTING


538.272  [Amended]

0
6. Amend paragraph (a) of section 538.272 by removing ``Government'' 
each time it is used (twice) and adding ``eligible ordering 
activities'' in its place.

0
7. Amend section 538.273 by revising the introductory text of paragraph 
(a)(2); and adding a sentence at the end of paragraph (b)(2) to read as 
follows:


538.273  Contract clauses.

    (a) * * *
    (2) 552.237-71, Submission and Distribution of Authorized FSS 
Schedule Pricelists. In solicitations and contracts for FSS Schedule 70 
and the Corporate Schedule contracts containing information technology 
Special Item Numbers, use Alternate I. If GSA is not prepared to accept 
electronic submissions for a particular schedule, delete:
* * * * *
    (b) * * * In solicitations and contracts for FSS Schedule 70 and 
the Corporate Schedule contracts containing information technology 
Special Item Numbers, use Alternate I.

0
8. Add Subpart 538.70 to read as follows:

Subpart 538.70 Cooperative Purchasing

Sec.
538.7000 Scope of subpart.
538.7001 Definitions.
538.7002 General.
538.7003 Policy.
538.7004 Solicitation provisions and contract clauses.


538.7000  Scope of subpart.

    This subpart prescribes policies and procedures that implement 
statutory provisions authorizing non-federal organizations to use 
Schedule 70 and Corporate Schedule contracts containing information 
technology Special Item Numbers (SINs).


538.7001  Definitions.

    Ordering activity (also called ``ordering agency'' and ``ordering 
office'') means an eligible ordering activity (see 552.238-78) 
authorized to place orders under Federal supply schedule contracts.
    Schedule 70, as used in this subpart, means Schedule 70 information 
technology contracts, and corporate schedule contracts containing 
information technology SINs. The Corporate Schedule is a compilation of 
multiple individual Federal Supply Schedules; therefore, only the SINs 
that fall under Schedule 70 of the Corporate Schedule will apply to 
Cooperative Purchasing. No other Schedules, or SINs, containing 
information technology outside of Schedule 70 SINs, and corporate 
schedule contracts containing Schedule 70 SINs, will apply.
    State and local government entities, as used in this subpart, means 
the states of the United States, counties, municipalities, cities, 
towns, townships, tribal governments, public authorities (including 
public or Indian housing agencies under the United States Housing Act 
of 1937), school districts, colleges and other institutions of higher 
education, council of governments (incorporated or not), regional or

[[Page 24379]]

interstate government entities, or any agency or instrumentality of the 
preceding entities (including any local educational agency or 
institution of higher education), and including legislative and 
judicial departments. The term does not include contractors of, or 
grantees of, State or local governments.
    (1) Local educational agency has the meaning given that term in 
section 8013 of the Elementary and Secondary Education Act of 1965 (20 
U.S.C. 7713).
    (2) Institution of higher education has the meaning given that term 
in section 101(a) of the Higher Education Act of 1965 (20 U.S.C. 
1001(a)).
    (3) Tribal government means--
    (i) The governing body of any Indian tribe, band, nation, or other 
organized group or community located in the continental United States 
(excluding the State of Alaska) that is recognized as eligible for the 
special programs and services provided by the United States to Indians 
because of their status as Indians; and
    (ii) Any Alaska Native regional or village corporation established 
pursuant to the Alaska Native Claims Settlement Act (43 U.S.C. 1601 et 
seq.).


538.7002  General.

    (a) 40 U.S.C. 501, (the Act) authorizes the Administrator of 
General Services to procure and supply personal property and 
nonpersonal services for the use of Executive agencies. Under 40 U.S.C. 
502, the goods and services available to executive agencies are also 
available to mixed ownership Government corporations, establishments 
within the legislative or judicial branches of Government (excepting 
the Senate, House of Representatives, Architect of the Capitol, and any 
activities under the direction of the Architect of the Capitol), the 
District of Columbia, and Qualified Non-profit Agencies.
    (b) Section 211 of the E-Government Act of 2002 amends 40 U.S.C. 
502 to authorize the Administrator of General Services to provide for 
use of certain Federal supply schedules of the GSA by a State or local 
government, which includes any State, local, regional, or tribal 
government, or any instrumentality thereof (including any local 
educational agency or institution of higher education).
    (c) State and local governments are authorized to procure only from 
the information technology Federal Supply Schedule (Schedule 70) 
contracts and Corporate Schedule contracts containing information 
technology SINs. A listing of the participating contractors and SINs 
for the products and services that are available through Schedule 70 
and Corporate Schedule contracts containing information technology 
SINs, is available in GSA's Schedules e-Library at web site http://fss.gsa.gov/elibrary. Click on Schedules e-Library and then click on 
the ICON labeled Cooperative Purchasing, State and Local. The 
contractors and the products and services available for cooperative 
purchasing will be labeled with the ICON.


538.7003  Policy.

    Preparing solicitations when schedules are open to eligible non-
federal entities. When opening Schedule 70 and the Corporate Schedule 
containing information technology SINs, for use by eligible non-federal 
entities, the contracting officer must make minor modifications to 
certain Federal Acquisition Regulation and GSAM provisions and clauses 
in order to make clear distinctions between the rights and 
responsibilities of the U.S. Government in its management and 
regulatory capacity pursuant to which it awards schedule contracts and 
fulfills associated Federal requirements versus the rights and 
responsibilities of eligible ordering activities placing orders to 
fulfill agency needs. Accordingly, the contracting officer is 
authorized to modify the following FAR provisions/clauses to delete 
``Government'' or similar language referring to the U.S. Government and 
substitute ``ordering activity'' or similar language when preparing 
solicitations and contracts to be awarded under Schedule 70 and the 
Corporate Schedule containing information technology SINs. When such 
changes are made, the word ``(DEVIATION)'' shall be added at the end of 
the title of the provision or clause. These clauses include but are not 
limited to:
    (a) 52.212-4, Contract Terms and Conditions--Commercial Items.
    (b) 52.216-18, Ordering.
    (c) 52.216-19, Order Limitations.
    (d) 52.229-1, State and Local Taxes.
    (e) 52.229-3, Federal, State, and Local Taxes.
    (f) 52.232-7, Payments Under Time-and-Materials and Labor-Hour 
Contracts.
    (g) 52.232-17, Interest.
    (h) 52.232-19, Availability of Funds for the Next Fiscal Year.
    (i) 52.232-34, Payment by Electronic Funds Transfer--Other than 
Central Contractor Registration
    (j) 52.232-36, Payment by Third Party.
    (k) 52.237-3, Continuity of Services.
    (l) 52.246-4, Inspection of Services-Fixed Price.
    (m) 52.246-6, Inspection-Time-and-Material and Labor-Hour.
    (n) 52.247-34, F.O.B. Destination.
    (o) 52.247-38, F.O.B. Inland Carrier Point of Exportation.


538.7004  Solicitation provisions and contract clauses.

    (a) The contracting officer shall insert the clause at 552.238-77, 
Definition (Federal Supply Schedules), in solicitations and schedule 
contracts for Schedule 70 and the Corporate Schedule contracts 
containing information technology SINs.
    (b) The contracting officer shall insert the clause at 552.238-78, 
Scope of Contract (Eligible Ordering Activities), in solicitations and 
contracts for Schedule 70 and the Corporate Schedule contracts 
containing information technology SINs.
    (c) The contracting officer shall insert the clause at 552.238-79, 
Use of Federal Supply Schedule Contracts by Certain Entities--
Cooperative Purchasing, in solicitations and Schedule 70 contracts and 
the Corporate Schedule contracts containing information technology 
SINs.
    (d) See 552.107-70 for authorized FAR deviations.

PART 546--QUALITY ASSURANCE

0
9. Amend section 546.710 in paragraph (b) by adding a sentence to the 
end of the paragraph to read as follows:


546.710  Contract clauses.

* * * * *
    (b) * * * In solicitations and contracts for FSS Schedule 70 and 
the Corporate Schedule containing information technology Special Item 
Numbers, use Alternate I.

PART 552--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
10. Amend section 552.211-75 by adding Alternate I to read as follows:


552.211-75  Preservation, Packaging and Packing.

* * * * *
    Alternate I (May 2003). As prescribed at 511.204(c)(3), insert the 
following sentence in place of the last sentence of the clause:
    Where special or unusual packing is specified in an order, but not 
specifically provided for by the contract, such packing details must be 
the subject of an agreement independently arrived at between the 
ordering activity and the Contractor.

0
11. Amend section 552.211-77 by adding Alternate I to read as follows:


552.211-77  Packing List.

* * * * *

[[Page 24380]]

    Alternate I (May 2003). As prescribed at 511.204(d), substitute 
the following paragraphs (a)(3) and (b) for (a)(3) and (b) of the 
basic clause:
    (a)(3) Ordering activity order or requisition number;
    (b) When payment will be made by Ordering activity commercial 
credit card, in addition to the information in (a) above, the 
packing list or shipping document shall include:
    (1) Cardholder name and telephone number; and
    (2) The term ``Credit Card.''


0
12. Amend section 552.216-72 by adding Alternate III to read as 
follows:


552.216-72  Placement of Orders.

* * * * *
    Alternate III (May 2003). As prescribed in 516.506(c), 
substitute the following paragraphs (a), (c), and (d) for paragraphs 
(a), (c), and (d) of the basic clause:
    (a) See 552.238-78, Scope of Contract (Eligible Ordering 
Activities), for who may order under this contract.
    (c) If the Contractor agrees, GSA's Federal Supply Service (FSS) 
will place orders for eligible ordering activities, as defined in 
paragraph (a) of the clause at 552.238-78, by EDI using computer-to-
computer EDI. If computer-to-computer EDI is not possible, FSS will 
use an alternative EDI method allowing the Contractor to receive 
orders by facsimile transmission. Subject to the Contractor's 
agreement, other eligible ordering activities, as defined in 
paragraphs (a) and (b) of the clause at 552.238-78, may also place 
orders by EDI.
    (d) When computer-to-computer EDI procedures will be used to 
place orders, the Contractor shall enter into one or more Trading 
Partner Agreements (TPA) with each ordering activity placing orders 
electronically in order to ensure mutual understanding by the 
parties of certain electronic transaction conventions and to 
recognize the rights and responsibilities of the parties as they 
apply to this method of placing orders. The TPA must identify, among 
other things, the third party provider(s) through which electronic 
orders are placed, the transaction sets used, security procedures, 
and guidelines for implementation. Ordering activities may obtain a 
sample format to customize as needed from the office specified in 
paragraph (g) of this clause.


0
13. Amend section 552.232-8 by adding Alternate I to read as follows:


552.232-8  Discounts for Prompt Payment.

* * * * *
    Alternate I (May 2003). As prescribed in 532.206(a), remove 
paragraph (d) and redesignate paragraphs (e), (f), and (g) as (d), 
(e), and (f), respectively.


0
14. Add section 552.232-79 to read as follows:


552.232-79  Payment by Credit Card.

0
As prescribed in 532.7003(c) insert the following clause:

Payment By Credit Card (May 2003)

    (a) Definitions.
    Credit card means any credit card used to pay for purchases, 
including the Governmentwide Commercial Purchase Card.
    Governmentwide commercial purchase card means a uniquely 
numbered credit card issued by a Contractor under GSA's 
Governmentwide Contract for Fleet, Travel, and Purchase Card 
Services to named individual Government employees or entities to pay 
for official Government purchases.
    Oral order means an order placed orally either in person or by 
telephone.
    (b) The Contractor must accept the credit card for payments 
equal to or less than the micro-purchase threshold (see Federal 
Acquisition Regulation 2.101) for oral or written orders under this 
contract.
    (c) The Contractor and the ordering agency may agree to use the 
credit card for dollar amounts over the micro-purchase threshold, 
and the Government encourages the Contractor to accept payment by 
the purchase card. The dollar value of a purchase card action must 
not exceed the ordering agency's established limit. If the 
Contractor will not accept payment by the purchase card for an order 
exceeding the micro-purchase threshold, the Contractor must so 
advise the ordering agency within 24 hours of receipt of the order.
    (d) The Contractor shall not process a transaction for payment 
through the credit card clearinghouse until the purchased supplies 
have been shipped or services performed.
    Unless the cardholder requests correction or replacement of a 
defective or faulty item under other contract requirements, the 
Contractor must immediately credit a cardholder's account for items 
returned as defective or faulty.
    (e) Payments made using the Governmentwide commercial purchase 
card are not eligible for any negotiated prompt payment discount. 
Payment made using an ordering activity debit card will receive the 
applicable prompt payment discount. (End of clause)


0
15. Add sections 552.232-81, 552.232-82, and 552.232-83 to read as 
follows:


552.232-81  Payments by Non-Federal Ordering Activities.

    As prescribed in 532.206(b), insert the following clause:

Payments By Non-Federal Ordering Activities (May 2003)

    If eligible non-federal ordering activities are subject to a 
State prompt payment law, the terms and conditions of the applicable 
State law apply to the orders placed under this contract by such 
activities. If eligible non-federal ordering activities are not 
subject to a State prompt payment law, the terms and conditions of 
the Federal Prompt Payment Act as reflected in Federal Acquisition 
Regulation clause 52.232-25, Prompt Payment, or 52.212-4, Contract 
Terms and Conditions--Commercial Items, apply to such activities in 
the same manner as to Federal ordering activities. (End of clause)


552.232-82  Contractor's Remittance (Payment) Address.

    As prescribed in 532.206(c), insert the following provision:

Contractor's Remittance (Payment) Address (May 2003)

    (a) Payment by electronic funds transfer (EFT) is the preferred 
method of payment. However, under certain conditions, the ordering 
activity may elect to make payment by check. The offeror shall 
indicate below the payment address to which checks should be mailed 
for payment of proper invoices submitted under a resultant contract.

 Payment Address:------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------

    (b) Offeror shall furnish by attachment to this solicitation, 
the remittance (payment) addresses of all authorized participating 
dealers receiving orders and accepting payment by check in the name 
of the Contractor in care of the dealer, if different from their 
ordering address(es) specified elsewhere in this solicitation. If a 
dealer's ordering and remittance address differ, both must be 
furnished and identified as such.
    (c) All offerors are cautioned that if the remittance (payment) 
address shown on an actual invoice differs from that shown in 
paragraph (b) of this provision or on the attachment, the remittance 
address(es) in paragraph (b) of this provision or attached will 
govern. Payment to any other address, except as provided for through 
EFT payment methods, will require an administrative change to the 
contract.

    Note: All orders placed against a Federal Supply Schedule 
contract are to be paid by the individual ordering activity placing 
the order. Each order will cite the appropriate ordering activity 
payment address, and proper invoices should be sent to that address. 
Proper invoices should be sent to GSA only for orders placed by GSA. 
Any other ordering activity's invoices sent to GSA will only delay 
your payment. (End of provision)


552.232-83  Contractor's Billing Responsibilities.

    As prescribed in 532.206(d), insert the following clause:

Contractor's Billing Responsibilities (May 2003)

    The Contractor is required to perform all billings made pursuant 
to this contract. However, if the Contractor has dealers that 
participate on the contract and the billing/payment process by the 
Contractor for sales made by the dealer is a significant 
administrative burden, the following alternative procedures may be 
used. Where dealers are allowed by the Contractor to bill ordering 
activities and accept payment in the Contractor's name, the 
Contractor agrees to obtain from all dealers participating in the 
performance of the contract a written agreement, which will require 
dealers to--

[[Page 24381]]

    (1) Comply with the same terms and conditions regarding prices 
as the Contractor for sales made under the contract;
    (2) Maintain a system of reporting sales under the contract to 
the manufacturer, which includes--
    (i) The date of sale;
    (ii) The ordering activity to which the sale was made;
    (iii) The service or product/model sold;
    (iv) The quantity of each service or product/model sold;
    (v) The price at which it was sold, including discounts; and
    (vi) All other significant sales data.
    (3) Be subject to audit by the Government, with respect to sales 
made under the contract; and
    (4) Place orders and accept payments in the name of the 
Contractor in care of the dealer.
    An agreement between a Contractor and its dealers pursuant to 
this procedure will not establish privity of contract between 
dealers and the Government. (End of clause)


0
16. Amend section 552.238-71 by adding Alternate I to read as follows:


552.238-71  Submission and Distribution of Authorized FSS Schedule 
Pricelists.

* * * * *
    Alternate I (May 2003). As prescribed in 538.273(a)(2), 
substitute the following paragraph (a) for paragraph (a) of the 
basic clause:
    (a) Definition. For the purposes of this clause, the Mailing 
List is [Contracting officer shall insert either: ``the list of 
addressees provided to the Contractor by the Contracting Officer'' 
or ``the Contractor's listing of its ordering activity customers''].


0
17. Amend section 552.238-75 by adding Alternate I to read as follows:


552.238-75  Price Reductions.

* * * * *
    Alternate I (May 2003). As prescribed in 538.273(b)(2), 
substitute the following paragraph (c)(2) for paragraph (c)(2) of 
the basic clause, and substitute the following paragraph (d)(2) for 
paragraph (d)(2) of the basic clause.
    (c)(2) The Contractor shall offer the price reduction to the 
eligible ordering activities with the same effective date, and for 
the same time period, as extended to the commercial customer (or 
category of customers).
    (d)(2) To eligible ordering activities under this contract; or


0
18. Add sections 552.238-77 through 552.238-79 to read as follows:


552.238-77  Definition (Federal Supply Schedules).

    As prescribed in 538.7004(a), insert the following clause:

Definition (Federal Supply Schedules) (May 2003)

    Ordering activity (also called ``ordering agency'' and 
``ordering office'') means an eligible ordering activity (see 
552.238-78) authorized to place orders under Federal Supply Schedule 
contracts. (End of clause)


552.238-78  Scope of Contract (Eligible Ordering Activities).

    As prescribed in 538.7004(b), insert the following clause:

Scope of Contract (Eligible Ordering Activities) (May 2003)

    (a) This solicitation is issued to establish contracts which may 
be used on a nonmandatory basis by the agencies and activities named 
below, as a source of supply for the supplies or services described 
herein, for delivery within the 48 contiguous States and Washington, 
D.C. For Special Item Number 132-53 Wireless Services ONLY, limited 
geographic coverage (consistent with the Offeror's commercial 
practice) may be proposed. Resultant contracts may also be used for 
delivery to Alaska, Hawaii, the Commonwealth of Puerto Rico, and 
overseas locations.
    (1) Executive agencies (as defined in FAR Subpart 2.1) including 
nonappropriated fund activities as prescribed in 41 CFR 101--
26.000);
    (2) Government contractors authorized in writing by a Federal 
agency pursuant to FAR 51.1;
    (3) Mixed ownership Government corporations (as defined in the 
Government Corporation Control Act);
    (4) Federal Agencies, including establishments in the 
legislative or judicial branch of government (except the Senate, the 
House of Representatives and the Architect of the Capitol and any 
activities under the direction of the Architect of the Capitol).
    (5) The District of Columbia;
    (6) Tribal governments when authorized under 25 U.S.C. 450j(k);
    (7) Qualified Nonprofit Agencies as authorized under 40 U.S.C. 
502(b); and
    (8) Organizations, other than those identified in paragraph (b) 
of this clause, authorized by GSA pursuant to statute or regulation 
to use GSA as a source of supply.
    (b) The following activities may place orders against 
information technology schedule 70 contracts and Corporate Schedule 
contracts containing information technology special item numbers, on 
an optional basis; PROVIDED, the Contractor accepts order(s) from 
such activities:
    State and local government, includes any state, local, regional 
or tribal government or any instrumentality thereof (including any 
local educational agency or institution of higher learning).
    (c) Articles or services may be ordered from time to time in 
such quantities as may be needed to fill any requirement, subject to 
the Order Limitations thresholds which will be specified in 
resultant contracts. Overseas activities may place orders directly 
with schedule contractors for delivery to CONUS port or 
consolidation point.
    (d) For orders received from activities within the Executive 
Branch of the Government, each Contractor is obligated to deliver 
all articles or services contracted for that may be ordered during 
the contract term, except as otherwise provided herein.
    (e) The Contractor is not obligated to accept orders received 
from activities outside the Executive Branch; however, the 
Contractor is encouraged to accept such orders. If the Contractor is 
unwilling to accept such an order, the Contractor shall decline the 
order in accordance with 552.238-79(6)(b)(2). Failure to return an 
order shall constitute acceptance whereupon all provisions of the 
contract shall apply.
    (f) The Government is obligated to purchase under each resultant 
contract a guaranteed minimum of $2,500 (two thousand, five hundred 
dollars) during the contract term. (End of clause)


552.238-79  Use of Federal Supply Schedule Contracts by Certain 
Entities--Cooperative Purchasing.

    As prescribed in 538.7004(c), insert the following clause:

Use of Federal Supply Schedule Contracts by Certain Entities--
Cooperative Purchasing (May 2003)

    (a) If an entity identified in paragraph (b) of the clause at 
552.238-78, Scope of Contract (Eligible Ordering Activities), elects 
to place an order under this contract, the entity agrees that the 
order shall be subject to the following conditions:
    (1) When the Contractor accepts an order from such an entity, a 
separate contract is formed which incorporates by reference all the 
terms and conditions of the Schedule contract except the Disputes 
clause, the patent indemnity clause, and the portion of the 
Commercial Item Contract Terms and Conditions that specifies 
``Compliance with laws unique to Government contracts'' (which 
applies only to contracts with entities of the Executive branch of 
the U.S. Government). The parties to this new contract which 
incorporates the terms and conditions of the Schedule contract are 
the individual ordering activity and the Contractor. The U.S. 
Government shall not be liable for the performance or nonperformance 
of the new contract. Disputes which cannot be resolved by the 
parties to the new contract may be litigated in any State or Federal 
court with jurisdiction over the parties, applying Federal 
procurement law, including statutes, regulations and case law, and, 
if pertinent, the Uniform Commercial Code. To the extent authorized 
by law, parties to this new contract are encouraged to resolve 
disputes through Alternative Dispute Resolution.
    (2) Where contract clauses refer to action by a Contracting 
Officer or a Contracting Officer of GSA, that shall mean the 
individual responsible for placing the order for the ordering 
activity (e.g., FAR 52.212-4 at paragraph (f) and FSS clause I-FSS-
249 B.)
    (3) As a condition of using this contract, eligible ordering 
activities agree to abide by all terms and conditions of the 
Schedule contract, except for those deleted clauses or portions of 
clauses mentioned in paragraph (a)(1) of this clause. Ordering 
activities may include terms and conditions required by statute, 
ordinance, regulation or order as a part of a statement of work 
(SOW) or statement of objective (SOO) to the extent that these terms 
and conditions do not conflict with the terms and conditions of the 
Schedule contract. The ordering activity and the Contractor 
expressly acknowledge that, in entering into an agreement for the 
ordering

[[Page 24382]]

activity to purchase goods or services from the Contractor, neither 
the ordering activity nor the Contractor will look to, primarily or 
in any secondary capacity, or file any claim against the United 
States or any of its agencies with respect to any failure of 
performance by the other party.
    (4) The ordering activity is responsible for all payments due 
the Contractor under the contract formed by acceptance of the 
ordering activity's order, without recourse to the agency of the 
U.S. Government, which awarded the Schedule contract.
    (5) The Contractor is encouraged, but not obligated, to accept 
orders from such entities. The Contractor may, within 5 days of 
receipt of the order, decline to accept any order, for any reason. 
The Contractor shall fulfill orders placed by such entities, which 
are not declined within the 5-day period.
    (6) The supplies or services purchased will be used for 
governmental purposes only and will not be resold for personal use. 
Disposal of property acquired will be in accordance with the 
established procedures of the ordering activity for the disposal of 
personal property.
    (b) If the Schedule Contractor accepts an order from an entity 
identified in paragraph (b) of the clause at 552.238-78, Scope of 
Contract (Eligible Ordering Activities), the Contractor agrees to 
the following conditions:
    (1) The ordering activity is responsible for all payments due 
the Contractor for the contract formed by acceptance of the order, 
without recourse to the agency of the U.S. Government, which awarded 
the Schedule contract.
    (2) The Contractor is encouraged, but not obligated, to accept 
orders from such entities. The Contractor may, within 5 days of 
receipt of the order, decline to accept any order, for any reason. 
The contractor shall decline the order using the same means as those 
used to place the order. The Contractor shall fulfill orders placed 
by such entities, which are not declined within the 5-day period.
    (c) In accordance with clause 552.238-74, Contractor's Report of 
Sales, the Contractor must report the quarterly dollar value of all 
sales under this contract. When submitting sales reports, the 
contractor must report two dollar values for each Special Item 
Number: (1) the dollar value for sales to entities identified in 
paragraph (a) of the clause at 552.238-78, Scope of Contract 
(Eligible Ordering Activities), and (2) the dollar value for sales 
to entities identified in paragraph (b) of clause 552.238-78. (End 
of clause)


0
19. Amend section 552.246-73 by adding Alternate I to read as follows:


552.246-73  Warranty--Multiple Award Schedule.

* * * * *
    Alternate I (May 2003). As prescribed in 546.710(b), substitute the 
following paragraphs (b)(1) and (b)(3) for paragraphs (b)(1) and (b)(3) 
of the basic clause:
    (b)(1) The Contractor must provide, at a minimum, a warranty on all 
non-consumable parts for a period of 90 days from the date that the 
ordering activity accepts the product.
    (b)(3) The Contractor must bear the transportation costs of 
returning the products to and from the repair facility, or the costs 
involved with Contractor personnel traveling to the ordering activity 
facility for the purpose of repairing the product onsite, during the 
90-day warranty period.

[FR Doc. 03-11271 Filed 5-5-03; 8:45 am]
BILLING CODE 6820-BR-P