[Federal Register Volume 69, Number 96 (Tuesday, May 18, 2004)]
[Rules and Regulations]
[Pages 28063-28066]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-11208]


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GENERAL SERVICES ADMINISTRATION

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

[Amendment 2004-01; GSAR Case 2002-G505]
RIN 3090-AH76


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

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

ACTION: Final rule.

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SUMMARY: The General Services Administration (GSA) has issued a final 
rule 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 firmware), software, 
supplies, support equipment, and services.

DATES: Effective Date: May 18, 2004.
    Applicability Date: This amendment applies to solicitations and 
existing contracts for Schedule 70, Information Technology (IT), and 
Consolidated Products and Services Schedule contracts, 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 Consolidated Products and Services Schedule contracts, 
containing IT SINs. Existing Schedule 70 contracts and Consolidated 
Products and Services Schedule contracts, containing IT SINs, shall be 
modified by mutual agreement of both parties.

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. The TTY Federal Relay Number for further information is 1-800-
877-8973. Please cite Amendment 2004-01, GSAR case 2002-G505.

SUPPLEMENTARY INFORMATION: 

A. Background

1. Interim and Final Rules

    GSA published an interim rule in the Federal Register at 68 FR 
24372, May 7, 2003, with a request for comments. This interim rule 
implemented 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 Federal Supply 
Scheduless. 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).
    GSA concluded that the interim rule should be converted to a final 
rule with minor changes. In particular, the final rule amends--
     GSAM Parts 511, 516, 532, 538, 546, and 552 to delete the 
term ``Corporate'' Schedule and substitute it with ``Consolidated 
Products and Services'' Schedule;
     Paragraphs (d)(2) and (d)(3) of the clause at 552.238-75, 
Price Reduction, to clarify that price reductions are not triggered for 
sales made to State and local government entities under Cooperative 
Purchasing;
     Paragraphs (b) and (c) of the clause at 552.238-78, Scope 
Of Contract (Eligible Ordering Activities), to define domestic and 
overseas delivery, and provide the contractor the option of providing 
supplies or services on an international basis; and paragraph (f) to 
clarify the contractor's option in accepting or not accepting orders 
from activities outside the Executive Branch of the Federal Government; 
and
     Paragraph (a)(1) of the clause at 552.238-79, Use of 
Federal Supply Schedule Contracts by Certain Entities--Cooperative 
Purchasing, to clarify that both contracts and Blanket Purchase 
Agreements (BPAs) established under Cooperative Purchasing are separate 
contracts; and paragraph (a)(3) to clarify that State and local 
government entities may add terms and conditions other than those 
required by statute, ordinance, regulation, or order.

2. Summary and Disposition of Comments

    Comments were received from four respondents. These comments were 
considered in the formulation of the final rule. A summary of the 
comments and their respective disposition is as follows:
    Comment: One respondent had concerns about State and local 
government entities' ability to use the finance and leasing terms under 
the GSA IT Schedule. Will State and local government entities have the 
ability to terminate a lease for convenience, nonrenewal and 
nonappropriation?
    Response: State and local government entities are provided access 
to all goods and services offered through both Schedule 70 and 
Consolidated Products and Services Schedule contracts, containing IT 
SINs. Further, State and local government entities are afforded the 
same terms and conditions offered through those Schedules. State and 
local government entities may include additional contract terms and

[[Page 28064]]

conditions; however, those terms and conditions may not contradict the 
Schedule terms and conditions.
    Comment: One respondent noted that the listing of services and 
goods available through both Schedule 70 and Consolidated Products and 
Services Schedule contracts, containing IT SINs, included FSC Class 
5820, Radio and Television Communication Equipment, except Airborne. 
The respondent inquired as to whether FSC Class 5820 was included as 
part of section 211 of the e-Government Act of 2002, and; therefore, 
available to State and local government entities.
    Response: The services and goods available under FSC Class 5820, 
Radio and Television Communication Equipment, except Airborne, are 
available to State and local government entities only if they are 
offered through Schedule 70 and Consolidated Products and Services 
Schedule contracts containing IT SINs. No other Schedules are 
authorized for State and local government use under section 211 of the 
E-Government Act of 2002.
    Comment: One respondent indicated that the clause at 552.238-75, 
Price Reductions, should clarify whether price reductions to State and 
local government entities would trigger the price reductions clause, 
when the State and local government entities are also the category of 
customer upon which the award is based.
    Response: The Price Reductions clause has been modified to clarify 
this point.
    Comment: One respondent had concerns about the necessity for an 
agreement between GSA and any participating State and local agencies 
utilizing the schedules as a matter of management and oversight of the 
program. Additionally, the respondent had concerns about a failure to 
incorporate an express statement recognizing the primacy of state and 
local contract law.
    Response: Congress intended that GSA make available to State and 
local governments the simplified acquisition methods and discounts 
negotiated by GSA for IT goods and services. This grant of authority 
does not give GSA any new powers to exercise oversight over the 
acquisition offices of State and local governments. There are more than 
three thousand counties, many of which have multiple entities with 
independent procurement authority. The average State government has 
hundreds of offices that may or may not choose to use GSA schedules as 
a source of supply. Some jurisdictions may already have authority to 
use GSA's IT schedules without supplementing the existing terms and 
conditions. Some may require supplemental terms and conditions. Other 
jurisdictions may never be able to use GSA's IT schedules, absent 
changes in the law, as local law requires different procedures. These 
determinations will need to be resolved by the local governmental 
entities, in consultation with their legal counsel.
    Comment: One respondent had concerns about the desirability of 
authorizing State and local agencies to utilize the services of GSBCA 
for purposes of dispute resolution. The commenter indicated that the 
Inter-Governmental Cooperation Act grants authority for Federal 
executive branch agencies to enter in cooperative agreements with other 
governmental entities to provide services to those agencies which the 
executive branch agencies otherwise perform.
    Response: The Inter-Governmental Cooperation Act (IGCA) permits the 
Federal Government to provide, to State and local governments, 
specialized or technical services, i.e., functions which a Federal 
agency is especially equipped and authorized by law to perform. Dispute 
resolution, a commercially available service, is not the type of 
service that historically has been offered under the IGCA.

B. 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.

C. 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.

D. Regulatory Flexibility Act

    The 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 small entities that are 
awarded Schedule 70 contracts and Consolidated Products and Services 
Schedule contracts, containing IT Special Item Numbers (SINs), under 
the GSA Federal Supply Schedule program who elect to participate, can 
contract with State or local governments and small governmental 
jurisdictions that place orders under Schedule 70 and Consolidated 
Products and Services Schedule contracts, containing IT SINs. The rule 
is expected to benefit small business concerns, however, the net effect 
of the rule is unknown at this time.
    GSA has prepared a Final Regulatory Flexibility Analysis (FRFA), 
and it reads as follows:

Final Regulatory Flexibility Analysis GSAR Case 2002-G505, Federal 
Supply Schedule Contracts--Acquisition of Information Technology by 
State and Local Governments Through Federal Supply Schedules

    1. Statement of the need for, and objective of, the rule.
    Section 211 Authorization for Acquisition of Information 
Technology By States and Local Governments Through Federal Supply 
Schedules, of the E-Government Act of 2002 (P.L. 107-347) 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, Information Technology (IT), and 
Consolidated Products and Services Schedule contracts, containing 
Information Technology (IT) Special Item Numbers (SINs) for use by 
other governmental entities to enhance intergovernmental 
cooperation.
    2. Summary of the significant issues raised by the public 
comments in response to the Initial Regulatory Flexibility Analysis, 
a summary of the assessment of the agency of such issues, and a 
statement of any changes made in the rule as a result of such 
comments.
    There were no public comments received in response to the 
Initial Regulatory Flexibility Analysis.
    3. Description of, and estimate of, the number of small entities 
to which the rule will apply or an explanation of why no such 
estimate is available.
    The rule will affect large and small entities including small 
businesses, that are awarded Schedule 70 contracts and Consolidated 
Products and Services 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 Consolidated Products 
and Services Schedule contracts, containing IT SINs. Approximately 
eighty-five percent (3499) of GSA Schedule 70 contractors are small 
businesses and approximately eighty-two percent (69) of Consolidated 
Products and Services Schedule contracts, containing IT SINs, are 
awarded to small businesses. All of those small business Schedule 70 
contractors, and Consolidated Products and Services Schedule 
contractors, containing IT SINs will be allowed, at the schedule 
contractor's option, to accept orders from State and local 
governments. As of September 10, 2003, 941 Schedule 70

[[Page 28065]]

contractors accepted the contract modification to participate in 
cooperative purchasing of which approximately eighty-two percent 
(772) were small businesses.
    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 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. Description of steps the agency has taken to minimize 
significant economic impact on small entities consistent with the 
stated objectives of applicable statutes, including a statement of 
the factual, policy, and legal reasons for selecting the alternative 
adopted in the final rule and why each of the other significant 
alternatives to the rule considered by the agency was rejected.
    These revisions are the only alternatives to implement Section 
211 of the E-Government Act of 2002. The rule should involve no 
substantial risk to small entities, since participation is on a 
voluntary basis.

E. 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.

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

    Government procurement.

    Dated: May 12, 2004.
David A. Drabkin,
Deputy Associate Administrator, Office of Acquisition Policy.

0
Accordingly, GSA adopts the interim rule amending 48 CFR parts 511, 
516, 532, 538, 546, and 552 which was published in the Federal Register 
at 68 FR 24372, May 7, 2003, as a final rule with the following 
changes:

PARTS 511, 516, 532, 538, 546, and 552--[AMENDED]

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

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


511.204, 516.506, 532.206, 532.7003, 538.273, 538.7000, 538.7001, 
538.7002, 538.7003, 538.7004, and 546.710  [Amended]

0
2. In parts 511, 516, 532, 538, 546, and 552, remove the words 
``Corporate Schedule'' and add, in their place, the words 
``Consolidated Products and Services Schedule'' in the following 
places:
    a. 511.204(c)(3) and (d);
    b. 516.506(c);
    c. 532.206(a) and (b);
    d. 532.7003(b) and (c);
    e. 538.273(a)(2) and (b)(2);
    f. 538.7000;
    g. 538.7001, in the definition ``Schedule 70'' (four times);
    h. 538.7002(c) (twice)
    i. 538.7003, introductory paragraph (twice);
    j. 538.7004(a), (b), and (c); and
    k. 546.710(b).

PART 552--SOLICITATION PROVISIONS AND CONTRACT CLAUSES


552.216-72  [Amended]

0
3. Amend section 552.216-72 in Alternate III by revising the date of 
the Alternate to read ``May 2004''; and by removing the words 
``paragraphs (a) and (b)'' from the last sentence of paragraph (c) and 
adding ``paragraphs (a) and (d)'' in its place.
0
4. Amend section 552.238-75 by revising the date of the clause; 
removing the word ``or'' from paragraph (d)(2); redesignating paragraph 
(d)(3) as (d)(4); and adding a new paragraph (d)(3) to read as follows:


552.238-75  Price Reductions.

* * * * *

Price Reductions (May 2004)

* * * * *
    (d) * * *
    (3) Made to State and local government entities when the order 
is placed under this contract (and the State and local government 
entity is the agreed upon customer or category of customer that is 
the basis of award); or
* * * * *

0
5. Amend section 552.238-78 as follows:
0
a. Revise the date of the clause;
0
b. Revise the introductory text of paragraph (a); and remove ``(b)'' 
from paragraph (a)(8) and add ``(d)'' in its place;
0
c. Remove paragraph (e);
0
d. Redesignate paragraphs (d) and (f) as paragraphs (f) and (g), 
respectively, and revise newly designated paragraph (f);
0
e. Redesignate paragraphs (b) and (c) as paragraphs (d) and (e), 
respectively, and add new paragraphs (b) and (c); and
0
f. Remove ``Corporate Schedule'' from newly designated paragraph (d) 
and add ``Consolidated Products and Services Schedule'' in its place, 
as follows:


552.238-78  Scope of Contract (Eligible Ordering Activities)

* * * * *

Scope of Contract (Eligible Ordering Activities) (May 2004)

    (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 domestic and/or overseas delivery. For Special Item 
Number 132-53, Wireless Services ONLY, limited geographic coverage 
(consistent with the Offeror's commercial practice) may be proposed.
* * * * *
    (b) Definitions. Domestic delivery is delivery within the 48 
contiguous states, Alaska, Hawaii, Puerto Rico, Washington,

[[Page 28066]]

DC, and U.S. territories. Domestic delivery also includes a port or 
consolidation point, within the aforementioned areas, for orders 
received from overseas activities.
    Overseas delivery is delivery to points outside of the 48 
contiguous states, Washington, DC, Alaska, Hawaii, Puerto Rico, and 
U.S. territories.
    (c) Offerors are requested to check one of the following boxes:
    [ballot] Contractor will provide domestic and overseas delivery.
    [ballot] Contractor will provide overseas delivery only.
    [ballot] Contractor will provide domestic delivery only.
* * * * *
    (f)(1) The Contractor is obligated to accept orders received 
from activities within the Executive branch of the Federal 
Government.
    (2) 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 
elects to accept such orders, all provisions of the contract shall 
apply, including clause 552.232-79, Payment by Credit Card. If the 
Contractor is unwilling to accept such orders, and the proposed 
method of payment is not through the Credit Card, the Contractor 
shall return the order by mail or other means of delivery within 5 
workdays from receipt. If the Contractor is unwilling to accept such 
orders, and the proposed method of payment is through the Credit 
Card, the Contractor must so advise the ordering activity within 24 
hours of receipt of order. (Reference clause 552.232-79, Payment by 
Credit Card.) Failure to return an order or advise the ordering 
activity within the time frames of this paragraph shall constitute 
acceptance whereupon all provisions of the contract shall apply.
* * * * *

0
6. Amend section 552.238-79 by--
0
a. Revising the date of the clause;
0
b. Removing ``(b)'' from the introductory text of paragraph (a) and 
adding ``(d)'' in its place;
0
c. Adding a sentence to the end of paragraph (a)(1);
0
d. Revising the second sentence of paragraph (a)(3);
0
e. Removing ``paragraph (b)'' from the introductory text of paragraph 
(b) and adding ``paragraph (d)'' in its place;
0
f. Removing the word ``contractor'' from the third sentence of 
paragraph (b)(2) and adding ``Contractor'' in its place; and
0
g. Revising paragraph (c) to read as follows:


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

* * * * *

Use of Federal Supply Schedule Contracts by Certain Entities--
Cooperative Purchasing (May 2004)

    (a) * * *
    (1) * * * Likewise, a Blanket Purchase Agreement (BPA), although 
not a contract, is an agreement that may be entered into by the 
Contractor with such an entity and the Federal Government is not a 
party.
* * * * *
    (3) * * * Ordering activities may include terms and conditions 
required by statute, ordinance, regulation, order, or as otherwise 
allowed by State and local government entities 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. * * *
* * * * *
    (c) In accordance with clause 552.238-74, Industrial Funding Fee 
and Sales Reporting, 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 (d) of clause 552.238-78.
    (End of clause)

[FR Doc. 04-11208 Filed 5-17-04; 8:45 am]
BILLING CODE 6820-BR-P