[Federal Register Volume 68, Number 238 (Thursday, December 11, 2003)]
[Rules and Regulations]
[Pages 69249-69250]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-30475]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Part 8

[FAC 2001-18; FAR Case 2003-001; Item IV]
RIN 9000-AJ62


Federal Acquisition Regulation; Increased Federal Prison 
Industries, Inc. Waiver Threshold

AGENCIES: Department of Defense (DoD), General Services Administration 
(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Final rule.

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SUMMARY: The Civilian Agency Acquisition Council and the Defense 
Acquisition Regulations Council (Councils) have adopted as final, 
without change, an interim rule amending the Federal Acquisition 
Regulation (FAR) to increase the blanket waiver threshold for small 
dollar value purchases from Federal Prison Industries, Inc. (FPI) by 
Federal agencies. By increasing this threshold to $2,500, Federal 
agencies are not required to make purchases from FPI of products on 
FPI's Schedule that are at or below this threshold.

[[Page 69250]]


DATES: Effective Date: December 11, 2003.

FOR FURTHER INFORMATION CONTACT: The FAR Secretariat at (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 FAC 2001-18, FAR case 2003-001.

SUPPLEMENTARY INFORMATION:

A. Background

    The Councils have agreed to a final rule increasing the FPI 
clearance exception threshold at FAR 8.606(e) from $25 to $2,500 and 
eliminating the criterion that delivery is required within 10 days. The 
objective of the rule is to increase the dollar threshold necessary to 
obtain a clearance from FPI. By increasing this threshold to $2,500, 
Federal agencies are not required to make purchases from FPI of 
products on FPI's Schedule that are at or below this threshold. Federal 
agencies, however, may continue to consider and purchase products from 
FPI that are at or below $2,500. FPI is a mandatory acquisition program 
established under 18 U.S.C. 4124. Agencies are still required to 
purchase products on FPI's Schedule from FPI above the $2,500 threshold 
unless a clearance is obtained pursuant to FAR 8.605.
    DoD, GSA, and NASA published an interim rule in the Federal 
Register at 68 FR 28094, May 22, 2003. Three respondents submitted 
public comments. These comments are discussed below. The Councils 
concluded that the interim rule should be converted to a final rule 
without change.
    Comment 1: Respondent concurred with the rule.
    Comment 2: Respondent wanted assurance that there are no other 
conflicts with existing wording of the FAR (e.g., FAR 8.603) as a 
result of the increase in the blanket waiver threshold to $2,500. The 
respondent believes that the FAR should explicitly state that agencies 
are not required to make purchases from FPI that are at or below 
$2,500, if that is the intent. In addition, the Defense FAR Supplement 
(DFARS) should state that the requirement for a comparability 
determination does not apply to purchases at or below $2,500.
    Councils' response: This rule has created no conflicts with other 
wording of the FAR. The rule merely increased the dollar threshold for 
an existing exception to FPI clearance requirements. As was previously 
the case, Federal agencies are not required (but are permitted) to 
purchase products from FPI if the dollar value of the purchase is at or 
below the threshold specified in FAR 8.606(e). The purchase priorities 
specified in FAR 8.603 have not changed, and apply only in situations 
where FPI and JWOD agencies produce identical supplies or services.
    The recommended DFARS change is outside the scope of this case. DoD 
published a final DFARS rule on November 14, 2003 (68 FR 64559), to 
address DoD-unique requirements for purchase of products from FPI.
    Comment 3: Respondent stated that language should be included in 
the rule to make it clear that DoD activities are now governed by the 
changes legislated in Section 811 of Public Law 107-107 and Section 819 
of Public Law 107-314, the National Defense Authorization Acts for 
Fiscal Years 2002 and 2003, respectively. Under these laws, the UNICOR 
waiver process has been effectively eliminated for DoD activities. If a 
DoD contracting officer determines that UNICOR products are not 
comparable in terms of quality, price, and delivery time, the activity 
is not required to seek a UNICOR waiver, regardless of the dollar 
amount of the acquisition. The concern is that DoD contracting officers 
and UNICOR private sector commissioned sales representatives may 
interpret this FAR change to mean that DoD must request a UNICOR waiver 
when the acquisition is over $2,500. To prevent such a 
misunderstanding, it is vital that references to the above public laws 
and/or the ensuring DFARS regulations be included in the language that 
announces this change to the waiver limit of FAR 8.606(e).
    Councils' response: The Councils recognize that DoD is governed by 
separate statutory requirements with regard to purchase of products 
from FPI (UNICOR), but do not believe additional clarification is 
required for the FAR. Existing DoD policy on this subject can be found 
in DFARS Subpart 208.6 (48 CFR Chapter 2, Subpart 208.6). As stated in 
the response to Comment 2 above, DoD published revisions to DFARS 
Subpart 208.6 (48 CFR Chapter 2, Subpart 208.6) on November 14, 2003 
(68 FR 64559).
    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.

B. Regulatory Flexibility Act

    The Regulatory Flexibility Act does not apply to this rule. This 
final rule does not constitute a significant FAR revision within the 
meaning of FAR 1.501 and Public Law 98-577, and publication for public 
comments is not required. However, the Councils will consider comments 
from small entities concerning the affected FAR Part 8, 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. (FAC 2001-18, FAR case 
2003-001), in correspondence. No comments were received on the 
Regulatory Flexibility Act Statement in the interim rule.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because the changes to 
the FAR do not impose information collection requirements that require 
the approval of the Office of Management and Budget under 44 U.S.C. 
3501, et seq.

List of Subjects in 48 CFR Part 8

    Government procurement.

    Dated: December 4, 2003.
Laura Auletta,
Director, Acquisition Policy Division.

Interim Rule Adopted as Final Without Change

0
Accordingly, DoD, GSA, and NASA adopt the interim rule amending 48 CFR 
part 8 which was published in the Federal Register at 68 FR 28094, May 
22, 2003, as a final rule without change.

    Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 42 
U.S.C. 2473(c).

[FR Doc. 03-30475 Filed 12-10-03; 8:45 am]
BILLING CODE 6820-EP-P