[Federal Register Volume 74, Number 103 (Monday, June 1, 2009)]
[Rules and Regulations]
[Pages 26107-26110]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-12587]



48 CFR Parts 546 and 552

[GSAR Amendment 2009-08; GSAR Case 2008-G514 (Change 36); Docket 2008-
0007; Sequence 7]
RIN 3090-AI69

General Services Administration Acquisition Regulation; GSAR Case 
2008-G514; Rewrite of Part 546, Quality Assurance

AGENCIES: General Services Administration (GSA), Office of the Chief 
Acquisition Officer.

ACTION: Final rule.


SUMMARY: The General Services Administration (GSA) is amending the 
General Services Administration Acquisition Regulation (GSAR) by 
revising sections of GSAR Part 546 and 552 that provides requirements 
for quality assurance.

DATES: Effective Date: June 1, 2009.

FOR FURTHER INFORMATION CONTACT: For clarification of content, contact 
Jeritta Parnell, Procurement Analyst, at (202) 501-4082. For 
information pertaining to status or publication schedules, contact the 
Regulatory Secretariat (VPR), 1800 F Street, NW, Room 4041, Washington, 
DC, 20405, (202) 501-4755. Please cite Amendment 2009-08, GSAR case 
2008-G514 (Change 36).


A. Background

    The GSA is amending the General Services Administration Acquisition 
Regulation (GSAR) to revise GSAR Parts 546 and 552 as follows:
    The GSAR section 546.302-70, Source Inspection by Quality Approved 
Manufacturer for fixed-price supply contracts, is revised to include 
applicability to certain programs, i.e., stock, special order program, 
wildfire. The subsection is revised to include reference to FAR 52.246-
2, Inspection of Supplies--Fixed Price.
    The GSAR section 546.302-71, Source inspection, is retained with no 
revisions to the clause except for the replacement of Federal Supply 
Service (FSS) with Federal Acquisition Service (FAS).
    The GSAR section 546.302-72, Destination inspection, is added to 
prescribe the clause at 552.246-78, Inspection at Destination.
    The language in GSAR 546.312, Construction contracts, that 
prescribes the clause at 552.246-72, Final Inspection and Tests, is 
    The language in GSAR 546.470-2, Certification Testing, is deleted.
    The language in GSAR 546.708, Warranties of data, is revised to 
place emphasis on the role of the contracting officer.
    The language in GSAR 546.710, Contract clause, is revised to add 
the clause at 552.246-77, Additional Contract Warranty Provisions for 
Supplies of a Noncomplex Nature. This clause is used when the FAR 
clause at 52.246-17, Warranty of Supplies of a Noncomplex Nature, is 
included in solicitations and contracts. The prescriptive language in 
paragraphs (b), (c), and (d) is deleted. The clauses prescribed in 
paragraphs (b), (c), and (d) are being deleted.
    The clause at GSAR 552.246-17, Warranty of Supplies of a Noncomplex 
Nature, is being deleted as it unnecessarily repeats, paraphrases, or 
otherwise restates material contained in the FAR. A new clause GSAR 
552.246-77, Additional Contract Warranty Provisions for Supplies of a 
Noncomplex Nature, is added to provide for GSA unique rights and 
    The clause at GSAR 552.246.70, Source Inspection by Quality 
Approved Manufacturer, is revised to edit and clarify existing clause 

[[Page 26108]]

    The clause at GSAR 552.246-71, Source Inspection by Government, is 
    The clause at GSAR 552.246-72, Final Inspection and Tests, is being 
    The clause at GSAR 552.246-73, Warranty--Multiple Award Schedule, 
is being relocated to GSAR Part 538.
    The clause at GSAR 552.246-75, Guarantees, is being deleted. The 
FAR provides sufficient guidance.
    The clause at GSAR 552.246-76, Warranty of Pesticides, is being 
deleted. This clause was determined to be unnecessary for inclusion in 
the GSAR.
    The clause at GSAR 552.246-78, Inspection at Destination, is being 
added to provide for inspection by Government personnel at destination.
    The GSA published a proposed rule with request for comments in the 
Federal Register at 73 FR 45379 on August 5, 2008. There was one public 
comment from one respondent. The respondent recommended retaining the 
clause at GSAR 552.246-72, Final Inspection and Tests. The GSA agrees 
and the clause is retained.
    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 General Services Administration certifies that this final rule 
will not have a significant economic impact on a substantial number of 
small entities within the meaning of the Regulatory Flexibility Act, 5 
U.S.C. 601, et seq., because the rule is not considered substantive. It 
clarifies existing language, deletes obsolete coverage, and edits 
existing language.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because the changes to 
the GSAR do not impose recordkeeping or information collection 
requirements, or otherwise collect information from offerors, 
contractors, or members of the public that require approval of the 
Office of Management and Budget under 44 U.S.C. Chapter 35, et seq.

List of Subjects in 48 CFR Parts 546 and 552

    Government procurement.

    Dated: May 14, 2009.
David A. Drabkin,
Acting Chief Acquisition Officer, Office of the Chief Acquisition 
Officer, General Services Administration.

Therefore, GSA amends 48 CFR parts 546 and 552 as set forth below:
1. The authority citation for 48 CFR parts 546 and 552 continues to 
read as follows:

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


2. Revise section 546.302-70 to read as follows:

546.302-70  Source inspection by Quality Approved Manufacturer for 
fixed-price supply contracts.

    (a) For solicitations issued and contracts awarded by FAS that will 
exceed the simplified acquisition threshold and include the clause at 
52.246-2, Inspection of Supplies-- Fixed-Price:
    (1) The contracting officer shall insert the clause at 552.246-70, 
Source Inspection by Quality Approved Manufacturer, in solicitations 
and contracts that provide for source inspection for the Stock and 
Special Order Programs.
    (2) The contracting officer may authorize inspection and testing at 
manufacturing plants or other facilities located outside the United 
States, Puerto Rico, or the U.S. Virgin Islands, under paragraph (a)(1) 
of the clause at 552.246-70 under any of the circumstances listed below 
after coordinating the authorization with QVOC and documenting the 
authorization in the file.
    (i) Inspection services are available from another Federal agency 
with primary inspection responsibility in the geographic area.
    (ii) An inspection interchange agreement exists with another agency 
for inspection at a contractor's plant.
    (iii) Other considerations will ensure more economical and 
effective inspection consistent with the Government's interest.
    (b) When the estimated value of the acquisition is below the 
simplified acquisition threshold and will include the clause at 52.246-
2, Inspection of Supplies--Fixed-Price, insert the clause at 552.246-
70, Source Inspection by Quality Approved Manufacturer only:
    (1) In solicitations and contracts that support the Wildfire 
    (2) In contracts when a pattern of acquisitions demonstrates an 
ongoing relationship with the contractor.

546.302-71  [Amended]

3. Amend section 546.302-71 by removing ``FSS'' and adding ``FAS'' in 
its place.

4. Add section 546.302-72 to read as follows:

546.302-72  Destination Inspection.

    The contracting officer shall include the clause at 552.246-78, 
Inspection at Destination (JUL 09)in supply contracts that require 
inspection at destination.

Subpart 546.4 [Removed]

5. Remove Subpart 546.4 consisting of section 546.470-2.

6. Revise section 546.708 to read as follows:

546.708  Warranties of data.

    (a) The contracting officer shall use warranties of data only when 
both of the following conditions are applicable:
    (1) Use of a warranty is in the Government's interest and is 
documented; and
    (2) The contracting director concurs with the decision.
    (b) The contracting officer shall consult with the technical or 
specification manager responsible for developing any warranties of 

7. Revise section 546.710 to read as follows:

546.710  Contract clause.

    The Contracting officer shall insert the clause at 552.246-77, 
Additional Contract Warranty Provisions for Supplies of a Noncomplex 
Nature, when using the clause at 52.246-17 in solicitations and 


552.246-17  [Removed]

8. Remove section 552.246-17.

9. Revise section 552.246-70 to read as follows:

552.246-70  Source Inspection by Quality Approved Manufacturer.

    As prescribed in 546.302-70, insert the following clause:
    (a) Inspection system and inspection of facilities. (1) The 
inspection system maintained by the Contractor under the Inspection of 
Supplies--Fixed Price clause (FAR 52.246-2) of this contract shall be 
maintained throughout the contract period. Unless otherwise authorized 
in writing by the Contracting Officer, the Contractor shall comply with 
all requirements of editions in effect on the date of the solicitation 
of either Federal Standard 368 or the International Organization for 
Standardization (ISO) Standard 9001:2000 (Quality Management Systems--
Requirements). A documented description of the

[[Page 26109]]

inspection system shall be made available to the Government before 
contract award. At the sole discretion of the Contracting Officer, he/
she may authorize in writing exceptions to the quality assurance 
standards identified above. The Contractor shall immediately notify the 
Administrative Contracting Officer (ACO) of any changes made in the 
inspection system during the contract period. As used herein, the term 
``inspection system'' means the Contractor's own facility or any other 
facility acceptable to the Government that will be used to perform 
inspections or tests of materials and components before incorporation 
into end articles and for inspection of such end articles before 
shipment. When the manufacturing plant is located outside of the United 
States, the Contractor shall arrange delivery of the items from a plant 
or warehouse located in the United States (including Puerto Rico and 
the U.S. Virgin Islands) equipped to perform all inspections and tests 
required by the contract or specifications to evidence conformance 
therewith, or shall arrange with a testing laboratory or other facility 
in the United States, acceptable to the Government, to perform the 
required inspections and tests.
    (2) In addition to the requirements in Federal Standard 368, ISO 
9001:2000 or as otherwise approved by the Government, records shall 
include the date inspection and testing were performed. These records 
shall be available for (i) 3 years after final payment; or (ii) 4 years 
from the end of the Contractor's fiscal year in which the record was 
created, whichever period expires first.
    (3) Offerors are required to specify, in the space provided 
elsewhere in this solicitation, the name and address of each 
manufacturing plant or other facility where supplies will be available 
for inspection, indicating the item number(s) to which each applies.
    (4) The Contractor shall provide the Administrative Contracting 
Officer ACO with the name(s) of the individual and an alternate 
responsible for the inspection system. In the event that the designated 
individual(s) becomes unavailable to oversee the inspection system, the 
Contractor, within 10 calendar days of such event, shall provide the 
ACO with the names of the replacement individual(s).
    (b) Inspection by the Contractor. The Contractor is required to 
demonstrate that the supplies in the shipment have been subject to and 
have passed all inspections and tests required by the contract and meet 
the requirements of the contract.
    (c) Inspection by Government personnel. (1) Although the Government 
will normally rely upon the Contractor's representation as to the 
quality of supplies shipped, it reserves the right under the Inspection 
of Supplies--Fixed Price clause to inspect and test all supplies called 
for by this contract, before acceptance, at all times and places, 
including the point of manufacture. When the Government notifies the 
Contractor of its intent to inspect supplies before shipment, the 
Contractor shall notify or arrange for subcontractors to notify the 
designated GSA quality assurance office 7 workdays before the date when 
supplies will be ready for inspection. Shipment shall not be made until 
inspection by the Government is completed and shipment is authorized by 
the Government.
    (2) The offeror shall indicate, in the spaces provided below, the 
location(s) at which the supplies will be inspected or made available 
for inspection.

                                                                    INSPECTION POINT
       ITEM NO(S).                    NAME OF MANUFACTURER                NAME, ADDRESS (Including County), and               TELEPHONE NUMBER
------------              ----------------------------                 --------------------------                   ------------------------
------------              ----------------------------                 --------------------------                   ------------------------
------------              ----------------------------                 --------------------------                   ------------------------

    NOTE: If additional space is needed, the offeror may furnish the 
requested information by an attachment to the offer.

    (3) During the contract period, a Government representative may 
periodically select samples of supplies produced under this contract 
for Government verification, inspection, and testing. Samples selected 
for testing will be disposed of as follows: Samples from an accepted 
lot, not damaged in the testing process, will be returned promptly to 
the Contractor after completion of tests. Samples damaged in the 
testing process will be disposed of as requested by the Contractor. 
Samples from a rejected lot will be returned to the Contractor or 
disposed of in a time and manner agreeable to both the Contractor and 
the Government.
    (d) Quality deficiencies. (1) Notwithstanding any other clause of 
this contract concerning the conclusiveness of acceptance by the 
Government, any supplies or production lots shipped under this contract 
found to be defective in material or workmanship, or otherwise not in 
conformity with the requirements of this contract within a period of --
------*-------- months after acceptance shall, at the Government's 
option, be replaced, repaired, or otherwise corrected by the Contractor 
at no cost to the Government within 30 calendar days (or such longer 
period as the Contracting Officer may authorize in writing) after 
receipt of notice to replace or correct. The Contractor shall remove, 
at its own expense, supplies rejected or required to be replaced, 
repaired, or corrected. When the nature of the defect affects an entire 
batch or lot of supplies, and the Contracting Officer determines that 
correction can best be accomplished by retaining the nonconforming 
supplies, and reducing the contract price by an equitable amount under 
the circumstances, then the equitable price adjustment shall apply to 
the entire batch or lot of supplies from which the nonconforming item 
was taken.
    (2) The Contractor may be issued a Quality Deficiency Notice (QDN) 
    (i) Supplies in process, shipped, or awaiting shipment to fill 
Government orders are found not to comply with contract requirements, 
or (ii) deficiencies in either plant quality or process controls are 
found. Upon receipt of a QDN, the Contractor shall take immediate 
corrective action and shall suspend shipment of the supplies covered by 
the QDN until such time as corrective action has been completed. The 
Contractor shall notify the Government representative, within 5 
workdays, of the action plan or the corrective action taken. The 
Government may elect to verify the corrective action at the Contractor 
location(s). Shipments of nonconforming supplies will be returned at 
the Contractor's expense and may constitute cause for termination of 
the contract. Delays due to the

[[Page 26110]]

insurance of a QDN do not constitute excusable delay under the default 
clause of this contract. Failure to complete corrective action in a 
timely manner may result in termination of the contract.
    (3) This contract may be terminated for default if subsequent 
Government inspection discloses that plant quality or process controls 
are not being maintained, supplies that do not meet the requirements of 
the contract are being shipped, or if the contractor fails to comply 
with any other requirement of this clause.
    (e) Additional cost for inspection and testing. The Contractor 
shall be charged for any additional cost of inspection/testing or 
reinspecting/retesting supplies for the reasons stated in paragraph (e) 
of FAR 52.246-2, Inspection of Supplies--Fixed Price. When inspection 
or testing is performed by or under the direction of GSA, charges will 
be at the rate of $--------**-------- per man-hour or fraction thereof 
if the inspection is at a GSA distribution center; $--------**-------- 
per man-hour or fraction thereof, plus travel costs incurred, if the 
inspection is at any other location; and $--------**-------- per man-
hour or fraction thereof for laboratory testing, except that when a 
testing facility other than a GSA laboratory performs all or part of 
the required tests, the Contractor shall be assessed the actual cost 
incurred by the Government as a result of testing at such facility. 
When inspection is performed by or under the direction of any agency 
other than GSA, the charges indicated above may be used, or the agency 
may assess the actual cost of performing the inspection and testing.
    (f) Responsibility for rejected supplies. When the Contractor fails 
to remove or provide instructions for the removal of rejected supplies 
under paragraph (d) of this clause, pursuant to the Contracting 
Officer's instructions, the Contractor shall be liable for all costs 
incurred by the Government in taking such measures as are expedient to 
avoid unnecessary loss to the Contractor. In addition to the remedies 
provided in FAR 52.246-2, supplies may be--
    (1) Stored and charged against the Contractor's account;
    (2) Reshipped to the Contractor at its expense (any additional 
expense incurred by the Government or the freight carrier caused by the 
refusal of the Contractor to accept their return shall also be charged 
against the Contractor's account);
    (3) Sold to the highest bidder on the open market and the proceeds 
applied against the accumulated storage and other costs, including the 
cost of the sale; or
    (4) Otherwise disposed of by the Government.
    (g) Subcontracting requirements. The Contractor shall insert in any 
subcontracts the inspection or testing provisions set forth in 
paragraphs (a) through (d) of this clause and the Inspection of 
Supplies--Fixed Price clause of this contract. The Contractor shall be 
responsible for compliance by any subcontractor with the provisions set 
forth in paragraphs (a) through (d) of this clause and the Inspection 
of Supplies--Fixed Price clause.
    (End of clause)
    *Normally insert 12 months as the period during which defective 
or otherwise nonconforming supplies must be replaced. However, when 
the supplies being bought have a shelf life of less than 1 year, you 
should use the shelf-life period, or in the instance where you 
reasonably expect a longer period to be available, you should use 
the longer period.
    **The rates to be inserted are established by the Commissioner 
of the Federal Acquisition Service or a designee.

552.246-71  [Amended]

10. Amend section 552.246-71 by--
a. Revising the date of the clause (June 1, 2009);
b. Removing from paragraph (c)(3) the words ``the Virgin Islands'' and 
adding the words ``the U.S. Virgin Islands'' in its place; and
c. Removing from the undesignated paragraph after ``(End of clause)'' 
the words ``Federal Supply Service'' and adding the words ``Federal 
Acquisition Service'' in its place.

552.246-73  [Removed]

11. Remove section 552.246-73.

552.246-74  [Removed]

12. Remove section 552.246-74.

552.246-75  [Removed]

13. Remove section 552.246-75.

552.246-76  [Removed]

14. Remove section 552.246-76.

15. Add section 552.246-77 to read as follows:

552.246-77  Additional Contract Warranty Provisions for Supplies of a 
Noncomplex Nature.

    As prescribed in 546.710(a), insert the following clause in 
solicitations and contracts that include FAR 52.246-17, Warranty of 
Supplies of a Noncomplex Nature.
    (a) Definitions. Correction, as used in this clause, means the 
elimination of a defect.
    (b) Contractor's obligations. When return, correction, or 
replacement is required, the Contractor shall be responsible for all 
costs attendant to the return, correction, or replacement of the 
nonconforming supplies. Any removal in connection with the above shall 
be done by the Contractor at its expense.
    (c) Remedies available to the Government. When the nature of the 
defect in the nonconforming item is such that the defect affects an 
entire batch or lot of material, then the equitable price adjustment 
shall apply to the entire batch or lot of material from which the 
nonconforming item was taken.
    (End of clause)

16. Add section 552.246-78 to read as follows:

552.246-78  Inspection at Destination.

    As prescribed in 546.302-72 insert the following clause:
    Inspection of all purchases under this contract will be made at 
destination by an authorized Government representative.
    (End of clause)
[FR Doc. E9-12587 Filed 5-29-09; 8:45 am]