[Federal Register Volume 81, Number 204 (Friday, October 21, 2016)]
[Proposed Rules]
[Pages 73002-73004]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-25316]
Federal Register / Vol. 81, No. 204 / Friday, October 21, 2016 /
Proposed Rules
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DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System
48 CFR Part 245
[Docket DARS-2016-0035]
RIN 0750-AJ11
Defense Federal Acquisition Regulation Supplement: Use of the
Government Property Clause (DFARS Case 2015-D035)
AGENCY: Defense Acquisition Regulations System, Department of Defense
(DoD).
ACTION: Proposed rule.
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SUMMARY: DoD is proposing to amend the Defense Federal Acquisition
Regulation Supplement (DFARS) to expand the prescription for use of the
Federal Acquisition Regulation (FAR) Government property clause.
DATES: Comments on the proposed rule should be submitted in writing to
the address shown below on or before December 20, 2016, to be
considered in the formation of a final rule.
ADDRESSES: Submit comments identified by DFARS Case 2015-D035, using
any of the following methods:
[cir] Federal eRulemaking Portal: http://www.regulations.gov.
Search for ``DFARS Case 2015-D035.'' Select ``Comment Now'' and follow
the instructions provided to submit a comment. Please include ``DFARS
Case 2015-D035'' on any attached documents.
[cir] Email: [email protected]. Include DFARS Case 2015-D035 in
the subject line of the message.
[cir] Fax: 571-372-6094.
[cir] Mail: Defense Acquisition Regulations System, Attn: Mr.
Thomas Ruckdaschel, OUSD(AT&L)DPAP/DARS, Room 3B941, 3060 Defense
Pentagon, Washington, DC 20301-3060.
Comments received generally will be posted without change to http://www.regulations.gov, including any personal information provided. To
confirm receipt of your comment(s), please check www.regulations.gov,
approximately two to three days after submission to verify posting
(except allow 30 days for posting of comments submitted by mail).
FOR FURTHER INFORMATION CONTACT: Mr. Thomas Ruckdaschel, telephone 571-
372-6088.
SUPPLEMENTARY INFORMATION:
I. Background
DoD is proposing to amend DFARS 245.107 to strengthen the
management and accountability of Government-furnished property (GFP).
DoD has identified a gap in the current process that hinders full
implementation of achieving accountability for GFP due to an exception
to the use of the clause at FAR 52.245-1, Government Property.
DoD has implemented a transactional information technology solution
to track, report, and manage GFP using the Wide Area WorkFlow suite of
tools. This has been implemented through requirements in FAR clause
52.245-1, Government Property, and use of associated DFARS clauses
relating to Government property. The basic property receipt and record
keeping requirements of FAR clause 52.245-1, and as proposed in this
rule, mirror customary commercial record keeping practices. Customary
commercial practice is to create receiving reports and keep records for
incoming assets regardless of the source of such assets. A recent
industry association survey revealed that all its member firms create
receiving reports and establish records in some form to track GFP.
II. Discussion and Analysis
The current language at FAR 45.107 provides an exception whereby
contracting officers can choose not to include the clause in purchase
orders for property repairs, when the unit acquisition cost of
Government property to be repaired does not exceed the simplified
acquisition threshold (SAT). Acquisition value alone, however, is not
an indicator of the criticality or sensitivity of the property. For
example, the acquisition cost of individual items of firearms, body
armor, night-vision equipment, computers, or cryptologic devices may be
below the SAT, but the accountability requirements for these items are
fairly stringent. Omission of the Government property clause in
purchase orders for repairs of these types of items increases risk of
misuse or loss of the property and could call into dispute their
ownership. To address this accountability gap, DoD is proposing to
amend DFARS 245.107(1)(i) to require the use of FAR clause 52.245-1,
Government Property, in all purchase orders for repair, maintenance,
overhaul, or modification of Government property regardless of the unit
acquisition cost of the items to be repaired. The rule also facilitates
compliance with DoD Instruction 4161.02 entitled ``Accountability and
Management of Government Contract Property,'' which requires DoD
components to use electronic transactions when transferring Government
property to a contractor and upon return of property to DoD. Use of FAR
clause 52.245-1, in conjunction with the following associated DFARS
clauses, creates an electronic end-to-end process for GFP management--
252.245-7001, Tagging, Labeling, and Marking of
Government-Furnished Property;
252.245-7002, Reporting Loss of Government Property;
252.245-7003, Contractor Property Management System
Administration; and
252.211-7007, Reporting of Government-Furnished Property.
III. Applicability to Contracts at or Below the Simplified Acquisition
Threshold and for Commercial Items, Including Commercially Available
Off-the-Shelf Items
This rule does not add any new provisions or clauses; however, the
rule does change the prescription for DoD use of FAR clause 52.245-1,
Government Property. DoD is proposing to amend DFARS 245.107(1)(i) to
require the use of FAR clause 52.245-1, Government Property, in all
purchase orders for repair, maintenance, overhaul, or modification of
Government property regardless of the unit acquisition cost of the
items to be repaired. FAR 45.107(a)(1)(iii) requires the clause to be
used for contracts or modifications awarded under FAR part 12
procedures where Government property that exceeds the simplified
acquisition threshold, as defined in FAR 2.101, is furnished or where
the contractor is directed to acquire property for use under the
contract that is titled in the Government. FAR 45.107(d) provides that
purchase orders for property repair need not include a Government
property clause when the acquisition cost of Government property to be
repaired does not exceed the simplified acquisition threshold. This
DFARS rule, however, will require all DoD purchase orders for repair,
maintenance, overhaul, or modification of Government property to
include FAR clause 52.245-1, Government Property, regardless of the
unit acquisition cost of the items to be repaired.
IV. 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
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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 E.O. 12866, Regulatory Planning and Review, dated
September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.
V. Regulatory Flexibility Act
DoD does not expect this proposed rule to 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.
However, an initial regulatory flexibility analysis has been prepared
and is summarized as follows:
DoD is proposing to amend the Defense Federal Acquisition
Regulation Supplement (DFARS) to expand the prescription for use of the
Federal Acquisition Regulation (FAR) clause 52.245-1, Government
Property. The current language at FAR 45.107 provides an exception
whereby contracting officers can choose not to include FAR clause
52.245-1 in purchase orders for repairs of Government-furnished
property (GFP), when the unit acquisition cost of Government property
to be repaired does not exceed the simplified acquisition threshold
(SAT). Acquisition value alone, however, is not an indicator of the
criticality or sensitivity of the property. As an example, the
acquisition cost of individual items of firearms, body armor, night-
vision equipment, computers, or cryptologic devices may be below the
SAT, but the accountability requirements for these items are fairly
stringent. Omission of the Government property clause in purchase
orders for repairs of these types of items increases the risk of misuse
or loss of the property and could call into dispute their ownership.
The objective of this rule is to strengthen the management and
accountability of GFP. This rule proposes to amend DFARS 245.107 by
requiring that FAR clause 52.245-1, Government Property, be
incorporated in all DoD purchase orders involving repair, maintenance,
overhaul, or modification of Government property, regardless of the
unit acquisition cost of the Government property to be repaired.
Based on data available in the Federal Procurement Data System for
fiscal year 2015, DoD awarded 735 purchase orders involving the repair
of Government property at or below the simplified acquisition threshold
to 530 unique vendors, of which 328 (approximately 56 percent) were
small businesses.
This rule contains reporting and recordkeeping requirements for
those entities that repair Government property under purchase orders
that contain the FAR 52.245-1 clause. Entities affected by this rule
would be required to prepare a property record and receiving report for
the Government property provided. Additionally, entities would be
required to acknowledge receipt of assets in the Wide Area WorkFlow
system. The professional skill sets required are those of mid-level
administrative personnel.
This rule does not duplicate, overlap, or conflict with any other
Federal rules.
There are no known significant alternatives to the rule to achieve
accountability of Government-furnished property and resolve potential
risks of loss or disputes for the ownership of property acquired with
Government funds.
DoD invites comments from small business concerns and other
interested parties on the expected impact of this rule on small
entities.
DoD will also consider comments from small entities concerning the
existing regulations in subparts affected by this rule in accordance
with 5 U.S.C. 610. Interested parties must submit such comments
separately and should cite 5 U.S.C 610 (DFARS Case 2015-D035), in
correspondence.
VI. Paperwork Reduction Act
The Paperwork Reduction Act (44 U.S.C. chapter 35) applies. The
proposed rule contains information collection requirements.
Accordingly, DoD has submitted a request for approval of a new
information collection requirement concerning DFARS Case 2015-D035 to
the Office of Management and Budget.
A. Public reporting burden for this collection of information is
estimated to average one-half hour or 30 minutes per response,
including time for reviewing instructions, searching existing data
sources, gathering and maintaining the data needed, and completing and
reviewing the collection of information.
The annual reporting burden is estimated as follows:
Number of respondents: 530.
Responses per respondent: 3.8 approximately.
Total annual responses: 2,000.
Preparation hours per response: 0.5 hours.
Total response burden hours: 735.
Recordkeeping burden hours: 265.
Total annual burden hours: 1,000.
Frequency: On occasion.
Affected Public: Businesses or other for-profit institutions.
B. Request for Comments Regarding Paperwork Burden. Written
comments and recommendations on the proposed information collection,
including suggestions for reducing this burden, should be sent to Ms.
Jasmeet Seehra at the Office of Management and Budget, Desk Officer for
DoD, Room 10236, New Executive Office Building, Washington, DC 20503,
or email [email protected], with a copy to the Defense
Acquisition Regulations System, Attn: Mr. Thomas Ruckdaschel,
OUSD(AT&L)DPAP/DARS, Room 3B941, 3060 Defense Pentagon, Washington, DC
20301-3060. Comments can be received from 30 to 60 days after the date
of this notice, but comments to OMB will be most useful if received by
OMB within 30 days after the date of this notice.
Public comments are particularly invited on: Whether this
collection of information is necessary for the proper performance of
functions of the DFARS, and will have practical utility; whether our
estimate of the public burden of this collection of information is
accurate, and based on valid assumptions and methodology; ways to
enhance the quality, utility, and clarity of the information to be
collected; and ways in which we can minimize the burden of the
collection of information on those who are to respond, through the use
of appropriate technological collection techniques or other forms of
information technology.
To request more information on this proposed information collection
or to obtain a copy of the proposal and associated collection
instruments, please write to the Defense Acquisition Regulations
System, Attn: Mr. Thomas Ruckdaschel, OUSD(AT&L)DPAP/DARS, Room 3B941,
3060 Defense Pentagon, Washington, DC 20301-3060, or email
[email protected]. Include DFARS Case 2015-D035 in the subject line of
the message.
List of Subjects in 48 CFR Part 245
Government procurement.
Jennifer L. Hawes,
Editor, Defense Acquisition Regulations System.
Therefore, 48 CFR 245 is proposed to be amended as follows:
PART 245--GOVERNMENT PROPERTY
0
1. The authority citation for part 245 continues to read as follows:
Authority: 41 U.S.C. 1303 and 48 CFR chapter 1.
0
2. Amend section 245.107 by--
0
a. Removing paragraph (6);
0
b. Redesignating paragraphs (1) through (5) as paragraphs (2) through
(6), respectively; and
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0
c. Adding a new paragraph (1).
The addition reads as follows:
245.107 Contract clauses.
(1)(i) In lieu of the prescription at FAR 45.107(d), use the clause
at 52.245-1, Government Property, in all purchase orders for repair,
maintenance, overhaul, or modification of Government property
regardless of the unit acquisition cost of the items to be repaired.
(ii) For negotiated fixed-price contracts awarded on a basis other
than submission of certified cost or pricing data for which Government
property is provided, use the clause at FAR 52.245-1, Government
Property, without its Alternate I.
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[FR Doc. 2016-25316 Filed 10-20-16; 8:45 am]
BILLING CODE 5001-06-P