[Federal Register Volume 76, Number 211 (Tuesday, November 1, 2011)]
[Rules and Regulations]
[Pages 67371-67372]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-27757]



41 CFR Part 102-39

[FMR Change 2011-02; FMR Case 2011-102-3; Docket No. 2011-0019, 
Sequence 1]
RIN 3090-AJ20

Federal Management Regulation; Prohibited List for Exchange/Sale 
of Personal Property

AGENCY: Office of Governmentwide Policy, General Services 
Administration (GSA).

ACTION: Final rule.


SUMMARY: The General Services Administration (GSA) is amending the 
Federal Management Regulation (FMR) by making changes to its policy on 
the replacement of personal property pursuant to the exchange/sale 

DATES: This final rule is effective on November 1, 2011.

1275 First Street, NE., Washington, DC 20417, (202) 501-4755, for 
information pertaining to status or publication schedules. For 
clarification of content, contact Mr. Robert Holcombe, Office of 
Governmentwide Policy, Office of Travel, Transportation, and Asset 
Management (MT), (202) 501-3828 or email at [email protected]. 
Please cite FMR Change 2011-02, FMR Case 2011-102-3.


A. Background

    A proposed rule was published in the Federal Register on June 26, 
2009 (74 FR 30493). Three changes were proposed.
    Two of the proposed changes, regarding the handling of scrap 
property and an administrative change, did not elicit any significant 
objections during the public review period and were incorporated into a 
final rule published in the Federal Register on May 6, 2010 (75 FR 
    The most significant change was the proposal to remove the 
exchange/sale prohibition on aircraft and airframe structural 
components subject to certain conditions. GSA received eleven comments 
on that proposal. Due to the interest in this proposal, GSA took this 
intervening time to carefully review and consider these comments and 
objections. Public comments may be found at http://www.regulations.gov 
and searching for the applicable docket: GSA-FMR-2009-0002.
    After careful review and consideration, GSA is choosing to codify 
the removal of the exchange/sale prohibition on aircraft and airframe 
structural components. In short, GSA has determined that removing the 
prohibition is in the best interest of the Government and will reduce 
agencies' costs of managing their aircraft fleets. GSA understands the 
intent of the property management legislation at 40 U.S.C. 501 et seq. 
to require that property-holding agencies make full use of property 
already acquired in support of their mission. The exchange/sale 
authority, codified at 40 U.S.C. 503, supports that intent by allowing 
agencies to make use of their investment in these valuable assets and 
does not provide any commodity restrictions to this authority.
    The rationale for removing aircraft from the prohibited list was 
provided in the ``Background'' section of the proposed rule is still 
considered valid and relevant. This rationale is reprinted below:

    This proposed rule would remove the exchange/sale prohibition on 
aircraft and airframe structural components, subject to certain 
conditions. These commodities have been included on the list of 
properties normally ineligible for exchange/sale so that the 
acquisition and disposal of these commodities could be managed more 
closely. To conduct an exchange/sale of such commodities (which is 
encouraged to reduce the agency costs of managing their aircraft 
fleets), agencies have been required to submit deviation requests 
for approval by GSA. Adequate tools are now available for managing 
these assets without going through the time consuming and onerous 
deviation process. Further, removing these commodities from the 
``prohibited list'' should not have a detrimental impact on the 
donation of such property. Finally, although agencies would no 
longer need to request deviations from GSA, a provision would be 
added to alert agencies that they must comply with the restrictions 
and limitations on the disposal of aircraft and aircraft parts 
contained in 41 CFR part 102-33.

    Thus, for these reasons, this final rule revises the regulation to 
remove aircraft and aircraft structural components from the exchange/
sale prohibited list as long as such transactions are conducted in 
accordance with provisions found at FMR part 102-33 (41 CFR part 102-
33). Some specific comments received in response to the proposed rule, 
and GSA's response to those comments, are provided below:
    Comment: The proposed changes are unnecessary, unwise, and would 
constitute an evasion of congressional appropriation authority.
    GSA Response: The proposed changes have been requested by the 
Federal property managers and aviation managers as a way to better 
manage aviation assets. As the Federal officials responsible for safely 
maintaining our Federal aviation assets in a state of readiness, GSA 
disagrees with the characterization that these changes are 
``unnecessary'' and ``unwise.'' Also, GSA notes that Congress has 
specifically authorized the exchange/sale program under Title 40 U.S.C. 
503. Therefore, this FMR change does not introduce the ability to 
conduct an exchange/sale transaction, nor evade Congressional 
authority; it furthers an agency's ability to conduct an exchange/sale 
transaction as provided by law.
    Comment: Furthermore, if enacted, this proposed change would 
further diminish the amount of personal property available to the State 
Agencies to place in public use. (10 similar comments).
    GSA Response: As discussed in other documents and in discussions 
with our stakeholders, GSA has never denied a deviation request for the 
exchange/sale of these types of assets. These aviation assets were 
maintained on the prohibited list simply so that GSA could better 
manage these assets in compliance with GSA responsibilities under OMB 
Circular A-126, Section 13c. In addition, FMR Sec.  102-37.40 requires 
that property provided to donation recipients be Federal surplus. 
Conversely, FMR Sec.  102-39.65(b) states that property available for 
exchange/sale cannot be excess or surplus. Thus, this proposed change 
cannot diminish the amount of personal property available for donation 
to State Agencies, because the change only applies to personal property 
that was not eligible for donation in the first place.
    Comment: Generally characterized as `This rule change will hurt 
Federal civilian agencies who are not exchange/selling aviation assets 
because they will not be able to obtain excess aviation assets from 
other Federal agencies because of the notional rush by the holding 
agency to exchange/sell all possible assets to satisfy its aviation 
requirements.' (3 comments).
    GSA Response: Federal agencies are tasked to maintain their 
aviation assets to meet their agency missions, often with insufficient 
funds to meet all requirements. In order to meet their programmatic 
needs, they are encouraged to seek any funding

[[Page 67372]]

solution, including the exchange/sale authority authorized under law.
    Comment: Generally characterized as `The exchange/sale program only 
returns ``pennies on the dollar'' to the agency, whereas disposing of 
the asset through other methods provides a greater benefit to other 
agencies or donees.' (3 comments).
    GSA Response: It is in agencies' best interests to maximize their 
available funds by obtaining the best return on their personal property 
investments. Therefore, there is little support for the comment that 
agencies would intentionally fund their aviation requirements by 
selling their aviation assets for anything less than the best price.
    Also, GSA notes that the exchange/sale regulation at FMR Sec.  102-
39.55 allows agencies to offer personal property through either a 
reimbursable transfer with another agency, or through a negotiated sale 
with a State Agencies for Surplus Property (SASP). GSA is not aware of 
any such request by an agency or SASP offering to pay below-fair-market 
value to obtain aviation property. If the holding agency were truly 
selling items at just pennies on the dollar, then we would expect other 
Federal agencies and SASPs to be eager to obtain such assets at bargain 
prices. However, GSA has never observed such a transaction, leading to 
the conclusion that agencies are not willing to sell aircraft for 
minimal, below-fair-market value prices.
    Comment: Generally characterized as ``the exchange/sale authorities 
should be subordinate to the donation authorities.'' (2 comments)
    GSA Response: GSA recognizes the vast benefits provided to the 
nation by the utilization and donation programs. At the same time, GSA 
also recognizes that under the expressed direction of Congress 
contained in 40 U.S.C. 503, the authority to conduct exchange/sale 
transactions is granted directly to Federal agencies (40 U.S.C. 
503(a)). On the other hand the donation program authority is granted 
exclusively to GSA, with such transfers being made at GSA's discretion 
(40 U.S.C. 549(b)). GSA therefore rejects the argument that its 
discretionary authority takes precedence over statutory authority 
granted to all other agencies. GSA also reiterates the argument that 
donation authority applies only to surplus property, whereas exchange/
sale authority applies to non-surplus property, rendering moot any 
discussion of subordinate and superior authorities.
    Finally, there is the issue of fire control systems and guided 
missiles. Over the past several years, GSA has worked with Department 
of Defense (DOD) agencies on deviations to allow the exchange/sale of 
fire control systems (FSC Group 12) and guided missiles (FSC Group 14). 
These assets are also on the prohibited list at FMR Sec.  102-39.60(a). 
GSA observes that the ``Note'' to this section removes the requirement 
for deviations from the prohibited list for DOD transactions of these 
FSC Groups when otherwise meeting DOD and Federal laws and regulations. 
Because other, more stringent DOD and Federal laws are in place to 
prevent the inappropriate use of these assets outside their intended 
use, GSA sees no value in keeping these on the exchange/sale prohibited 
list. For these reasons, and since there would be no other legitimate, 
competing interests in obtaining this property outside the realm in 
which DOD operates, GSA does not see a need to obtain public comment on 
this matter through the publication of a proposed rule.

B. Executive Order 12866 and 13563

    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, of reducing costs, of harmonizing rules, and of promoting 
flexibility. 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.

C. Regulatory Flexibility Act

    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 
revisions are not considered substantive. This final rule is also 
exempt from the Regulatory Flexibility Act per 5 U.S.C. 553(a)(2) 
because it applies to agency management or personnel. However, this 
final rule is being published to provide transparency in the 
promulgation of Federal policies.

D. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because the changes to 
the FMR 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.

E. Small Business Regulatory Enforcement Fairness Act

    This final rule is exempt from Congressional review under 5 U.S.C. 
801 since it relates solely to agency management and personnel.

List of Subjects in 41 CFR Part 102-39

    Government property management and Personal property.

    Dated: August 7, 2011.
Martha Johnson,
Administrator of General Services.

    For the reasons set forth in the preamble, GSA amends 41 CFR part 
102-39 as set forth below:


1. The authority citation for 41 CFR part 102-39 continues to read as 

    Authority:  40 U.S.C. 121(c); 40 U.S.C. 503.

2. Amend Sec.  102-39.60--
a. In paragraph (a) by removing the third entry ``12 Fire control 
equipment'', the fourth entry ``14 Guided missiles''; and, the fifth 
entry ``15 Aircraft and airframe structural components (except FSC 
Class 1560 Airframe Structural Components)'';
b. In paragraph (l) by removing ``584'' and adding ``548'' in its 
place; and
c. By adding paragraph (m) to read as follows:

Sec.  102-39.60  What restrictions and prohibitions apply to the 
exchange/sale of personal property?

* * * * *
    (m) Aircraft and aircraft parts, unless there is full compliance 
with all exchange/sale provisions in part 102-33 of this chapter (41 
CFR part 102-33).

[FR Doc. 2011-27757 Filed 10-31-11; 8:45 am]