[Federal Register Volume 71, Number 54 (Tuesday, March 21, 2006)]
[Proposed Rules]
[Pages 14151-14152]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-3993]


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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Part 252

RIN 0750-AF24


Defense Federal Acquisition Regulation Supplement; Reports of 
Government Property (DFARS Case 2005-D015)

AGENCY: Defense Acquisition Regulations System, Department of Defense 
(DoD).

ACTION: Proposed rule with request for comments.

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SUMMARY: DoD is proposing to amend the Defense Federal Acquisition 
Regulation Supplement (DFARS) to revise requirements for reporting of 
Government property in the possession of DoD contractors. The proposed 
rule replaces existing DD Form 1662 reporting requirements with 
requirements for DoD contractors to electronically submit, to the Item 
Unique Identification (IUID) Registry, the IUID data applicable to the 
Government property in the contractor's possession. This will result in 
more efficient and accurate reporting of Government property in the 
possession of contractors.

DATES: Comments on the proposed rule should be submitted in writing to 
the address shown below on or before April 20, 2006 to be considered in 
the formation of the final rule.

ADDRESSES: You may submit comments, identified by DFARS Case 2005-D015, 
using any of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     E-mail: [email protected]. Include DFARS Case 2005-D015 in the 
subject line of the message.
     Fax: (703) 602-0350.
     Mail: Defense Acquisition Regulations System, Attn: Ms. 
Robin Schulze, OUSD (AT&L) DPAP (DARS), IMD 3C132, 3062 Defense 
Pentagon, Washington, DC 20301-3062.
     Hand Delivery/Courier: Defense Acquisition Regulations 
System, Crystal Square 4, Suite 200A, 241 18th Street, Arlington, VA 
22202-3402.
    Comments received generally will be posted without change to http://www.regulations.gov, including any personal information provided.

FOR FURTHER INFORMATION CONTACT: Ms. Robin Schulze, (703) 602-0326.

SUPPLEMENTARY INFORMATION:

A. Background

    The clause at DFARS 252.245-7001 presently requires contractors to 
submit an annual report for all DoD property for which the contractor 
is accountable. The report must be prepared in accordance with the 
requirements of DD Form 1662 or an approved substitute. DD Form 1662 
provides for reporting of only summary level totals for each of the 
various types of Government property (e.g. land, special test 
equipment, industrial plant equipment), and does not consider 
capitalization requirements or useful lives, nor can it be used for 
existence, completeness, or valuation purposes. The limited data 
produced through use of DD Form 1662 is considered to be insufficient 
for complete visibility and control of DoD property.
    This proposed rule would replace DD Form 1662 reporting with 
requirements for contractors to electronically submit, to the Item 
Unique Identification (IUID) Registry, the IUID data for all DoD 
tangible personal property in the possession of the contractor. The 
proposed rule also contains requirements for contractors to provide 
real property data to the owning military department's real property 
inventory system. This data will be used to populate DoD information 
systems for more effective and efficient accountability and control of 
DoD property.
    DoD contractors with existing contracts containing DD Form 1662 
reporting requirements are encouraged to request contract modifications 
to designate use of the procedures specified in this proposed rule as 
the approved substitute for DD Form 1662, as permitted by the clause at 
DFARS 252.245-7001.
    This rule was not subject to Office of Management and Budget review 
under Executive Order 12866, dated September 30, 1993.

B. Regulatory Flexibility Act

    DoD has prepared an initial regulatory flexibility analysis 
consistent with 5 U.S.C. 603. A copy of the analysis may be obtained 
from the point of contact specified herein. The analysis is summarized 
as follows:
    This proposed rule amends the DFARS to require DoD contractors to 
electronically submit, to the IUID Registry, the IUID data for DoD 
personal property in the contractor's possession. In addition, the 
proposed rule contains requirements for contractors to maintain records 
in DoD real property inventory systems for all real property provided 
under the contract. The existing

[[Page 14152]]

requirements for contractor reporting of Government property rely on a 
paper-based administrative infrastructure, and do not provide DoD with 
sufficient information to validate the existence, completeness, or 
valuation of Government property in the possession of contactors. This 
rule will facilitate DoD compliance with the Chief Financial Officers 
Act of 1990 (Pub. L. 101-576) and the financial reporting requirements 
imposed by the Federal Accounting Standards Advisory Board.
    The rule will apply to all DoD contracts with Government-furnished 
property. The objective of the rule is to improve the accountability 
and control of DoD assets. Use of the IUID Registry and DoD real 
property inventory systems will enable DoD to maintain accurate records 
of its property inventories. The Chief Financial Officers Act of 1990 
requires the production of complete, reliable, timely, and consistent 
financial information with regard to Federal programs.
    In accordance with the clause at DFARS 252.245-7001, DoD 
contractors already are required to maintain records of DoD property in 
their possession and to submit an annual report using DD Form 1662 or 
an approved substitute. The proposed rule would replace use of DD Form 
1662 with requirements for use of the IUID Registry and DoD real 
property inventory systems as an electronic means of recording and 
reporting of DoD property in the contractor's possession. This will 
improve the accuracy and efficiency of the existing reporting and 
recordkeeping requirements.
    DoD considers the approach described in the proposed rule to be the 
most practical and beneficial for both Government and industry. 
Continued reliance on the current reporting process would not permit 
the level of accountability that DoD needs to comply with statutory and 
regulatory requirements related to the management of Government 
property. DoD already has adopted the use of IUID technology as the 
standard marking approach for all items in DoD's inventory system. 
Therefore, it logically follows that DoD property in the possession of 
contractors should also be recorded and reported using IUID technology.
    DoD invites comments from small businesses and other interested 
parties. DoD also will consider comments from small entities concerning 
the affected DFARS subpart in accordance with 5 U.S.C. 610. Such 
comments should be submitted separately and should cite DFARS Case 
2005-D015.

C. Paperwork Reduction Act

    The information collection requirements of the clause at DFARS 
252.245-7001 have been approved by the Office of Management and Budget 
under Clearance Number 0704-0246. The requirements of this proposed 
rule are not expected to significantly change the burden hours approved 
under Clearance Number 0704-0246.

List of Subjects in 48 CFR Part 252

    Government procurement.

Michele P. Peterson,
Editor, Defense Acquisition Regulations System.

    Therefore, DoD proposes to amend 48 CFR part 252 as follows:

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

    1. The authority citation for 48 CFR part 252 continues to read as 
follows:

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

    2. Section 252.245-7001 is revised to read as follows:


252.245--7001  Reports of Government Property.

    As prescribed in 245.505-14(a), use the following clause:
Reports of Government Property (XXX 2006)
    (a) Definitions. As used in this clause--
    Equipment means a tangible article of personal property that is 
complete in and of itself, durable, nonexpendable, and needed for the 
performance of a contract. Equipment generally has an expected life of 
one year or more and does not ordinarily lose its identity or become a 
component part of another article when put into use.
    Material means property that may be consumed or expended during the 
performance of a contract, component parts of a higher assembly, or 
items that lose their individual identity through incorporation into an 
end item. Material does not include equipment, special tooling, special 
test equipment, or unique federal property.
    Property in the possession of the Contractor (PIPC) means tangible 
personal property, to which the Government has title, that is in the 
stewardship or possession of, or is controlled by, the Contractor for 
the performance of a contract. PIPC consists of both tangible 
Government-furnished property and contractor-acquired property and 
includes equipment and material.
    (b) The Contractor shall provide item unique identification (IUID) 
data electronically into the IUID Registry--
    (1) For all DoD PIPC under this contract, including that at 
subcontractor and alternate locations; and
    (2) In accordance with the data submission procedures in the 
Government Personal and Real Property in the Possession of the 
Contractor guidebook in effect on the date of the award of this 
contract. The guidebook is located at http://www.acq.osd.mil/dpap/UID/DataSubmission.htm.
    (c) The Contractor shall update PIPC records in the IUID Registry 
for changes in the status, mark, custody, or disposition of the PIPC, 
for all PIPC--
    (1) Delivered or shipped from the Contractor's plant, under 
Government instructions, except when shipment is to a subcontractor or 
other location of the Contractor;
    (2) Consumed or expended, reasonably and properly, or otherwise 
accounted for, in the performance of the contract as determined by the 
Government property administrator, including reasonable inventory 
adjustments;
    (3) Disposed of; or
    (4) Transferred to a follow-on or another contract.
    (d) At a minimum, the Contractor shall update PIPC records for PIPC 
provided under this contract in the IUID Registry, so that the IUID 
Registry reflects the same information that is recorded in the 
Contractor's property records for all PIPC in the Contractor's 
stewardship, possession, or control, by March 31st and September 30th 
of each year.
    (e) For all real property provided under this contract, the 
Contractor shall maintain records in the owning military department's 
real property inventory system in accordance with guidance published by 
the military department, recording all changes as they occur.


(End of clause)

[FR Doc. E6-3993 Filed 3-20-06; 8:45 am]
BILLING CODE 5001-08-P