[Federal Register Volume 77, Number 75 (Wednesday, April 18, 2012)]
[Rules and Regulations]
[Pages 23365-23368]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-9201]



[[Page 23365]]

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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 1, 2, 11, 23, and 52

[FAC 2005-58; FAR Case 2010-004; Item I; Docket 2010-0004, Sequence 2]
RIN 9000-AM03


Federal Acquisition Regulation; Biobased Procurements

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

ACTION: Final rule.

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SUMMARY: DoD, GSA, and NASA are issuing a final rule amending the 
Federal Acquisition Regulation (FAR) to implement changes due to the 
Farm Security and Rural Investment Act that require contractors to 
report the biobased products purchased under service and construction 
contracts. This reporting will enable agencies to monitor compliance 
with the Federal preference for purchasing biobased products.

DATES: Effective Date: May 18, 2012.

FOR FURTHER INFORMATION CONTACT: Mr. William Clark, Procurement 
Analyst, at 202-219-1813, for clarification of content. For information 
pertaining to status or publication schedules, contact the Regulatory 
Secretariat at 202-501-4755. Please cite FAC 2005-58, FAR Case 2010-
004.

SUPPLEMENTARY INFORMATION:

I. Background

    DoD, GSA, and NASA published a proposed rule in the Federal 
Register at 76 FR 41179 on July 13, 2011, to implement section 9002 of 
the Farm Security and Rural Investment Act of 2002, as amended by the 
Food, Conservation, and Energy Act of 2008 (Pub. L. 110-246). These 
statutory provisions are codified at 7 U.S.C. 8102. This section of the 
United States Code requires Federal agencies to establish a procurement 
program, develop procurement specifications, procure biobased products, 
and give preference to those items that are composed of the highest 
percentage of biobased products practicable or those products that 
comply with the regulations issued under section 103 of Public Law 100-
556 (42 U.S.C. 6914b-1). Title 7 U.S.C. 8102 provides Federal agencies 
the flexibility not to procure biobased products if the product cannot 
be acquired--
    (a) Within a reasonable time frame providing for compliance with 
the contract performance schedule;
    (b) Meeting reasonable performance requirements; or
    (c) At a reasonable price.
    The Biobased Products Preference Program was originally implemented 
in FAR Case 2004-032, which was published in the Federal Register at 72 
FR 63040, November 7, 2007. This final rule implements additional 
elements of 7 U.S.C. 8102 as amended by Public Law 110-246. This final 
rule also meets the direction in the Presidential Memorandum, ``Driving 
Innovation and Creating Jobs in Rural America through Biobased and 
Sustainable Product Procurement,'' dated February 21, 2012, to amend 
the FAR to require reporting of biobased product purchases. Two 
respondents submitted 14 public comments on the proposed rule.

II. Discussion and Analysis

    The Civilian Agency Acquisition Council and the Defense Acquisition 
Regulations Council (the Councils) reviewed the public comments in the 
development of the final rule. A discussion of the comments and the 
changes made to the rule as a result of those comments are provided as 
follows:

A. Summary of Changes to the FAR

    1. The definition of ``biobased product'' is revised at FAR 2.101.
    2. A prohibition against agencies collecting more data than 
typically would be provided by other entities (other than data 
confirming the biobased content) was added to FAR 11.302.
    3. The clause at FAR 52.223-2, Affirmative Procurement of Biobased 
Products Under Service and Construction Contracts, is amended to 
require annual reporting by the contractor of the types and dollar 
value of any U.S. Department of Agriculture (USDA)-designated biobased 
products purchased during the preceding fiscal year on the contract.
    4. References to the USDA's BioPreferred Program are updated to 
conform to the agency's relocation of the program's rules in the Code 
of Federal Regulations (see 76 FR 53631 dated August 29, 2011).
    5. USDA established a blanket exemption for all USDA-designated 
biobased items from the Biopreferred Program's requirements for 
procurements involving combat or combat-related missions and for 
spacecraft systems and launch support equipment (see 73 FR 27953 dated 
May 14, 2008). FAR 23.404(b)(2) and 52.223-2(a)(2) are updated to 
conform to the blanket exemption.

B. Positive Comments

    Comments: Both respondents stated their strong support for the 
proposed rule. One respondent viewed it ``as a necessary action to 
implement existing laws and policies for purchasing biobased products 
by federal agencies and contractors.''
    Response: Noted.
    Comments: One respondent expressed particular support for the 
provision in the proposed rule directing contracting officers to refer 
to the USDA list of designated biobased items. Both respondents agreed 
that the USDA list is an important and growing reminder of the 
availability of biobased products.
    Response: Noted. However, the preference for use of biobased 
products that are USDA-designated items existed at FAR 52.223-2(a) 
prior to the proposed rule.
    Comments: Both respondents expressed support for the requirement 
that contractors report annually on the biobased products purchased and 
their dollar value. One respondent stated that such annual reports, by 
contractors and agencies, will help measure the growth and success of 
the program and ensure agency and contractor compliance with the law.
    Response: Noted. Also see section C below regarding reporting and 
section V for a comment on the reporting burden associated with this 
rule.

C. Definitions

    Comment: One respondent noted that neither ``cognizant 
environmental manager'' nor ``agency environmental manager'' was 
defined in the proposed rule. The respondent suggested that more 
clarity was needed, and the ``person to whom the product type and 
dollar value data are reported should be someone who can ensure that 
the data are properly collected and tabulated and made available for 
reporting into the Federal Procurement Data System or other system that 
will allow each agency to report the information to the Office of 
Federal Procurement Policy, as required.''
    Response: The clause at FAR 52.223-2, Affirmative Procurement of 
Biobased Products Under Service and Construction Contracts, has been 
revised at paragraphs (c) and (d) to eliminate any reference to the 
environmental manager and change the reporting requirement to the 
environmental point of contact, with a copy of the report to be sent to 
the contracting officer. Together, these

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revisions eliminate any need for additional definitions in the FAR 
coverage.

D. Allow No Exceptions or Waivers

    Comment: Strongly supporting the program's requirement that all 
Federal agencies and contractors purchase USDA-designated biobased 
products, one respondent recommended that no exemptions or waivers 
should be allowed under any circumstances.
    Response: Exemptions or waivers, under certain circumstances, to 
the acquisition of USDA-designated biobased products are recognized by 
the Farm Security and Rural Investment Act of 2002, 7 U.S.C. 8102, and 
Executive Order 13514, entitled ``Federal Leadership in Environmental, 
Energy, and Economic Performance,'' dated October 5, 2009. These 
exemptions or exceptions previously have been implemented in the FAR.

E. Out-of-Scope Comments

    Comments: One respondent presented recommendations for the elements 
on which the Office of Management and Budget (OMB) should report 
annually in order to ensure compliance. These recommendations included 
mandatory reporting elements for each agency, department, and its 
contractors. The respondent asserted that there should be additional 
reporting required by DoD. The second respondent noted that section 
9002(a)(4)(B) of the statute provides specific annual reporting 
requirements for the GSA and Defense Logistics Agency and queried why 
those agency reporting requirements were not addressed in the proposed 
rule.
    Response: The FAR addresses requirements for contractors. OMB is 
responsible for determining agency reporting requirements. Therefore, 
these comments are outside the scope of this rule.
    Comment: One respondent recommended that, in order to ensure full 
compliance, DoD should seek to update 100 percent of its specifications 
to include biobased products by December 31, 2013.
    Response: The internal review of specifications by a particular 
agency is outside the scope of this rule.
    Comment: One respondent recommended that a complete inventory 
management system needed to be created to track the biobased products 
purchased by all Federal agencies. The respondent stated that ``(t)his 
scorecard should contain information on agencies and departments 
purchasing biobased products and contracts.'' According to the 
respondent, codifying the biobased products acquisition reporting 
structure in the FAR would lead to more market pull.
    Response: The FAR addresses requirements for contractors. OMB is 
responsible for determining agency management and reporting 
requirements. Therefore, this recommendation is outside the scope of 
this rule.

III. Executive Orders 12866 and 13563

    Executive Orders (E.O.s) 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). E.O. 
13563 emphasizes the importance of quantifying both costs and benefits, 
of reducing costs, of harmonizing rules, and of promoting flexibility. 
This is a significant regulatory action and, therefore, was subject to 
review under section 6(b) of E.O. 12866, Regulatory Planning and 
Review, dated September 30, 1993. This rule is not a major rule under 5 
U.S.C. 804.

IV. Regulatory Flexibility Act

    The Department of Defense, General Services Administration, and 
National Aeronautics and Space Administration have prepared a Final 
Regulatory Flexibility Analysis (FRFA) consistent with the Regulatory 
Flexibility Act, 5 U.S.C. 601, et seq. The FRFA is summarized as 
follows:

    DoD, GSA, and NASA are amending the Federal Acquisition 
Regulation (FAR) to implement section 9002 of the Farm Security and 
Rural Investment Act of 2002, codified at 7 U.S.C. 8102, as amended 
by the Food, Conservation, and Energy Act of 2008 (Pub. L. 110-246).
    Title 7 U.S.C. 8102 requires Federal agencies to establish a 
procurement program, develop procurement specifications, procure 
biobased products, and give preference to those items that are 
composed of the highest percentage of biobased products practicable 
or products that comply with the regulations issued under section 
103 of Public Law 100-556 (42 U.S.C. 6914b-1).
    This final rule modifies FAR 52.223-2, Affirmative Procurement 
of Biobased Products Under Service and Construction Contracts, to 
require prime contractors to report the product types and dollar 
value of any USDA-designated biobased products purchased during the 
preceding fiscal year. The information reported by prime contractors 
will enable Federal agencies to (a) report annually to the Office of 
Federal Procurement Policy (OFPP) information concerning actions 
taken to implement the preference for biobased products and (b) 
assess compliance and measure progress in carrying out the 
preference for biobased products. Further, OFPP must collect the 
information reported by the agencies and make it publicly available 
on an annual basis.
    There were no public comments filed in response to the Initial 
Regulatory Flexibility Analysis.
    The rule promotes the use of biobased products and requires an 
annual report on the product types and dollar value of any U.S. 
Department of Agriculture (USDA)-designated biobased products 
purchased by the prime contractor during the previous year. By 
averaging data from Fiscal Years 2009 and 2010 in the Federal 
Procurement Data System (FPDS), we estimate that 48,376 contractors 
will be affected. Of those entities, approximately 35,927 (70 
percent) will be small businesses. This estimate is based on 
contract actions from the following selected Product Services Codes 
(PSCs):
     A--Research and Development;
     F--Natural Resources Management;
     J--Maintenance, Repair, and Rebuilding of Equipment;
     M--Operation of Government-Owned Facility;
     S--Utilities and Housekeeping Services;
     T--Photographic, Mapping, Printing, and Publication 
Services;
     Y--Construction of Structures and Facilities; and
     Z--Maintenance, Repair or Alteration of Real Property.
    We believe the clause will apply to most of the contract actions 
in the selected PSCs. Based on the Fiscal Year 2009 FPDS data 
collected, there were 55,174 unique Data Universal Numbering System 
(DUNS) numbers performing such contracts, and 40,741 of these were 
small businesses. Based on the Fiscal Year 2010 FPDS data collected, 
there were 41,578 unique DUNS numbers, and 31,113 of these were 
small businesses.
    Where information on the biobased nature of products is not 
already available, contractors may need to create an inventory 
management system to track the product types and dollar value of 
USDA-designated biobased products purchased for each contract. 
However, DoD, GSA, and NASA expect that the impact will be minimal 
because the existing clause already requires contractors to make 
maximum use of biobased products in the performance of services and 
construction contracts, and the change does not impose any 
substantial new requirements other than the prime contractor 
reports. Small businesses are active suppliers of biobased products, 
and this rule may serve to enhance their participation in this 
market.
    The types of skills required to prepare the report include data 
gathering, research, quantitative, editing, and drafting. We 
estimate the personnel required would be equivalent to a Government 
employee at a GS-11, step 5 salary.
    There are no other reporting, recordkeeping, or other compliance 
requirements associated with this rule. There is no impact, positive 
or negative, on small businesses. Thus, there are no professional 
skills necessary on the part of small businesses. There are no 
direct costs to small business firms to comply with this rule.
    The rule does not duplicate, overlap, or conflict with any other 
Federal rules. DoD,

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GSA, and NASA were not able to identify any significant alternatives 
that would accomplish the objectives of the statute. Further, the 
impact of this rule on small entities is expected to be generally 
positive.

    Interested parties may obtain a copy of the FRFA from the 
Regulatory Secretariat. The Regulatory Secretariat has submitted a copy 
of the FRFA to the Chief Counsel for Advocacy of the Small Business 
Administration.

V. Paperwork Reduction Act

    The Paperwork Reduction Act (44 U.S.C. chapter 35) applies. The 
rule contains information collection requirements. OMB has cleared this 
information collection requirement under OMB Control Number 9000-0180, 
titled ``Biobased Procurements.''
    One comment was received on the paperwork burden associated with 
this rule. It is summarized below.
    Comment: The respondent believed that the required reporting does 
not have to be burdensome, because the clause at FAR 52.223-2, 
Affirmative Procurement of Biobased Products Under Service and 
Construction Contracts, already provides that the contractor shall make 
maximum use of USDA-designated biobased products (with certain 
exceptions). The respondent noted that, in order to comply with this 
current requirement, contractors should already be keeping records. 
Adding the dollar value of those items and reporting annually should 
not add a significant burden, according to the respondent. The 
respondent suggested that agencies should further simplify the 
reporting burden by making available an electronic template for the 
required report.
    Response: The FAR does not designate practices to be used 
internally by Government agencies. Although providing an electronic 
reporting template for use by contractors seems to be a good idea, the 
FAR is not the proper vehicle for its designation.

List of Subjects in 48 CFR Parts 1, 2, 11, 23, and 52

    Government procurement.

    Dated: April 11, 2012.
Laura Auletta,
Director, Office of Governmentwide Acquisition Policy, Office of 
Acquisition Policy, Office of Governmentwide Policy.

    Therefore, DoD, GSA, and NASA amend 48 CFR parts 1, 2, 11, 23, and 
52 as set forth below:

0
1. The authority citation for 48 CFR parts 1, 2, 11, 23, and 52 
continues to read as follows:

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

PART 1--FEDERAL ACQUISTION REGULATION SYSTEM


1.106  [Amended]

0
2. Amend section 1.106 in the table following the introductory text, by 
adding in sequence, FAR segment ``52.223-2'' and its corresponding OMB 
Control Number ``9000-0180''.

PART 2--DEFINITIONS OF WORDS AND TERMS


2.101   [Amended]

0
3. Amend section 2.101 in paragraph (b)(2), in the definition 
``Biobased product'' by removing ``(including plant, animal, and marine 
materials) or'' and adding ``and'' in its place.

PART 11--DESCRIBING AGENCY NEEDS

0
4. Amend section 11.302 by revising paragraph (c)(2) to read as 
follows:


11.302   Policy.

* * * * *
    (c) * * *
    (2) For biobased products, agencies may not require, as a condition 
of purchase of such products, the vendor or manufacturer to provide 
more data than would typically be provided by other business entities 
offering products for sale to the agency, other than data confirming 
the biobased content of a product (see 7 CFR 3201.8).

PART 23--ENVIRONMENT, ENERGY AND WATER EFFICIENCY, RENEWABLE ENERGY 
TECHNOLOGIES, OCCUPATIONAL SAFETY, AND DRUG-FREE WORKPLACE


23.401   [Amended]

0
5. Amend section 23.401 by removing from paragraph (b)(1) ``part 2902'' 
and adding ``part 3201'' in its place.
0
6. Amend section 23.404 by revising the introductory text of paragraph 
(b)(2); and removing from paragraph (e)(1) ``(including plant, animal, 
and marine materials)''. The revised text reads as follows:


23.404   Agency affirmative procurement programs.

* * * * *
    (b) * * *
    (2) EPA and USDA may provide categorical exemptions for items that 
they designate, when procured for a specific purpose. For example, all 
USDA-designated items (see 7 CFR 3201.3(e)) are exempt from the 
preferred procurement requirement for the following:
* * * * *

0
7. Amend section 23.405 by removing from paragraph (a)(2) ``http://www.usda.gov/biopreferred'' and adding ``http://www.biopreferred.gov'' 
in its place; and adding paragraph (a)(3) to read as follows:


23.405   Procedures.

    (a) * * *
    (3) When acquiring recovered material or biobased products, the 
contracting officer may request information or data on such products, 
including recycled or biobased content or related standards of the 
products (see 11.302(c)).
* * * * *


23.406   [Amended]

0
8. Amend section 23.406 by removing from paragraph (b) ``contracts 
unless'' and adding ``contracts, unless'' in its place; and removing 
``http://www.usda.gov/biopreferred or 7 CFR Part 2902'' and adding 
``http://www.biopreferred.gov or 7 CFR part 3201'' in its place.

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES


52.223-1   [Amended]

0
9. Amend section 52.223-1 by removing ``(Dec 2007)'' and adding ``(May 
2012)'' in its place; and removing ``part 2902'' and adding ``part 
3201'' in its place.


0
10. Amend section 52.223-2 by:
0
a. Revising the date of the clause;
0
b. Revising paragraph (a)(2) introductory text; and
0
c. Adding paragraphs (c) and (d).
    The revised and added text reads as follows:


52.223-2   Affirmative Procurement of Biobased Products Under Service 
and Construction Contracts.

* * * * *

Affirmative Procurement of Biobased Products Under Service and 
Construction Contracts (May 2012)

* * * * *
    (a) * * *
    (2) The product is to be used in an application covered by a 
USDA categorical exemption (see 7 CFR 3201.3(e)). For example, all 
USDA-designated items are exempt from the preferred procurement 
requirement for the following:
* * * * *
    (c) In the performance of this contract, the Contractor shall--
    (1) Report to the environmental point of contact identified in 
paragraph (d) of this clause, with a copy to the Contracting

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Officer, on the product types and dollar value of any USDA-
designated biobased products purchased by the Contractor during the 
previous Government fiscal year, between October 1 and September 30;
    (2) Submit this report no later than--
    (i) October 31 of each year during contract performance; and
    (ii) At the end of contract performance; and
    (3) Contact the environmental point of contract to obtain the 
preferred submittal format, if that format is not specified in this 
contract.
    (d) The environmental point of contact for this contract is: --
-------------- [Contracting Officer shall insert full name, phone 
number, and email address. In addition, the Contracting Officer may 
include the agency Web site for reporting.]
* * * * *
[FR Doc. 2012-9201 Filed 4-17-12; 8:45 am]
BILLING CODE 6820-EP-P