[Federal Register Volume 83, Number 181 (Tuesday, September 18, 2018)]
[Rules and Regulations]
[Pages 47097-47099]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-20183]



48 CFR Parts 844 and 845

RIN 2900-AQ05

VA Acquisition Regulation: Subcontracting Policies and 
Procedures; Government Property

AGENCY: Department of Veterans Affairs.

ACTION: Final rule.


[[Page 47098]]

SUMMARY: The Department of Veterans Affairs (VA) is amending and 
updating its VA Acquisition Regulation (VAAR) in phased increments to 
revise or remove any policy superseded by changes in the Federal 
Acquisition Regulation (FAR), to remove procedural guidance internal to 
VA into the VA Acquisition Manual (VAAM), and to incorporate any new 
agency specific regulations or policies. These changes seek to 
streamline and align the VAAR with the FAR and remove outdated and 
duplicative requirements and reduce burden on contractors. The VAAM 
incorporates portions of the removed VAAR as well as other internal 
agency acquisition policy. VA will rewrite certain parts of the VAAR 
and VAAM, and as VAAR parts are rewritten, we will publish them in the 
Federal Register. In particular, this rulemaking revises VAAR 
concerning Subcontracting Policies and Procedures and Government 

DATES: This rule is effective on October 18, 2018.

Procurement Analyst, Procurement Policy and Warrant Management 
Services, 003A2A, 425 I Street, NW, Washington, DC 20001, (202) 382-
2787. (This is not a toll-free number.)

SUPPLEMENTARY INFORMATION: On April 6, 2018, VA published a proposed 
rule in the Federal Register (83 FR 14833) which announced VA's intent 
to amend regulations for VAAR Case RIN 2900-AQ05 (Parts 844 and 845). 
In particular, this final rule implements FAR part 44 by making public 
VA's additional requirements for providing its consent to subcontract, 
describes items that should be evaluated as a part of a contractor's 
purchasing system review and establishes that contractors should 
determine whether subcontract items meet the FAR definition of a 
commercial item and implements and supplements FAR part 45 by 
addressing procedures for contractors to document their acquisition of 
property for use in the service of VA contracts; to address the 
transfer of title to the Government of contractor-acquired property; 
and to outline the procedures for the use of such property on a 
successor contract.
    VA provided a 60-day comment period for the public to respond to 
the proposed rule. The comment period for the proposed rule ended on 
June 5, 2018 and VA received no comments. This document adopts as a 
final rule the proposed rule published in the Federal Register on April 
6, 2018, with minor formatting and/or grammatical edits.

Unfunded Mandates

    The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 
1532, that agencies prepare an assessment of anticipated costs and 
benefits before issuing any rule that may result in the expenditure by 
State, local, and tribal Governments, in the aggregate, or by the 
private sector, of $100 million or more (adjusted annually for 
inflation) in any one year. This final rule will have no such effect on 
State, local, and tribal Governments or on the private sector.

Paperwork Reduction Act

    This final rule contains no provisions constituting a collection of 
information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-

Regulatory Flexibility Act

    This final rule will not have a significant economic impact on a 
substantial number of small entities as they are defined in the 
Regulatory Flexibility Act, 5 U.S.C. 601-612. The overall impact of 
this final rule will be of benefit to small businesses owned by 
Veterans or service-disabled Veterans as the VAAR is being updated to 
remove extraneous procedural information that applies only to VA's 
internal operating procedures. VA is merely adding existing and current 
regulatory requirements to the VAAR and removing any guidance that is 
applicable only to VA's internal operation processes or procedures. VA 
estimates no cost impact to individual businesses would result from 
these rule updates. This rulemaking does not change VA's policy 
regarding small businesses, does not have an economic impact to 
individual businesses, and there are no increased or decreased costs to 
small business entities. On this basis, the final rule would not have 
an economic impact on a substantial number of small entities as they 
are defined in the Regulatory Flexibility Act, 5 U.S.C. 601-612. 
Therefore, under 5 U.S.C. 605(b), this regulatory action is exempt from 
the initial and final regulatory flexibility analysis requirements of 
sections 603 and 604.

Executive Orders 12866, 13563 and 13771

    Executive Orders (E.O.) 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. 
E.O. 12866, Regulatory Planning and Review defines ``significant 
regulatory action'' to mean any regulatory action that is likely to 
result in a rule that may: ``(1) Have an annual effect on the economy 
of $100 million or more or adversely affect in a material way the 
economy, a sector of the economy, productivity, competition, jobs, the 
environment, public health or safety, or State, local, or tribal 
Governments or communities; (2) Create a serious inconsistency or 
otherwise interfere with an action taken or planned by another agency; 
(3) Materially alter the budgetary impact of entitlements, grants, user 
fees, or loan programs or the rights and obligations of recipients 
thereof; or (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
this Executive order.''
    VA has examined the economic, interagency, budgetary, legal, and 
policy implications of this regulatory action, and it has been 
determined this rule is not a significant regulatory action under E.O. 
12866. This final rule is not an E.O. 13771 regulatory action because 
this rule is not significant under E.O. 12866.
    VA's impact analysis can be found as a supporting document at 
http://www.regulations.gov, usually within 48 hours after the 
rulemaking document is published. Additionally, a copy of the 
rulemaking and its impact analysis are available on VA's website at 
http://www.va.gov/orpm by following the link for VA Regulations 
Published from FY 2004 Through Fiscal Year to Date.

List of Subjects

48 CFR Part 844

    Government procurement, Reporting and recordkeeping requirements.

48 CFR Part 845

    Government procurement, Government property, Reporting and 
recordkeeping requirements.

Signing Authority

    The Secretary of Veterans Affairs approved this document and 
authorized the undersigned to sign and submit the document to the 
Office of the Federal Register for publication electronically as an 
official document of the Department of Veterans Affairs. Robert L. 
Wilkie, Secretary, Department of Veterans Affairs, approved this 
document on August 24, 2018, for publication.

[[Page 47099]]

    Dated: September 12, 2018.
Consuela Benjamin,
Regulations Development Coordinator, Office of Regulation Policy & 
Management, Office of the Secretary, Department of Veterans Affairs.

For the reasons set out in the preamble, VA amends 48 CFR by adding 
parts 844 and 845 to read as follows:


Subpart 844.2--Consent to Subcontracts
844.202-2 Considerations.
Subpart 844.3--Contractors' Purchasing Systems Reviews
844.303 Extent of review.
Subpart 844.4--Subcontracts for Commercial Items and Commercial 
844.402 Policy requirements.

    Authority: 40 U.S.C. 121(c); 41 U.S.C. 1702 and 48 CFR 1.301-

Subpart 844.2--Consent to Subcontracts

844.202-2  Considerations.

    (a)(14) Where other than lowest price is the basis for 
subcontractor selection, has the contractor adequately substantiated 
the selection as being fair, reasonable, and representing the best 
value to the Government?

Subpart 844.3--Contractors' Purchasing Systems Reviews

844.303  Extent of review.

    (f) Policies and procedures pertaining to the use of VA-verified 
Service-Disabled Veteran-Owned Small Businesses (SDVOSBs) and Veteran-
Owned Small Businesses (VOSBs) and utilization in accordance with 
subpart 819.70 and the Veterans First Contracting Program;
    (l) Documentation of commercial item determinations to ensure 
compliance with the definition of ``commercial item'' in FAR 2.101; and
    (m) For acquisitions involving electronic parts, that the 
contractor has implemented a counterfeit electronic part detection and 
avoidance system to ensure that counterfeit electronic parts do not 
enter the supply chain.

Subpart 844.4--Subcontracts for Commercial Items and Commercial 

844.402  Policy requirements.

    (a)(3) Determine whether a particular subcontract item meets the 
definition of a commercial item. This requirement does not affect the 
contracting officer's responsibilities or determinations made under FAR 


Subpart 845.4--Title to Government Property
845.402 Title to contractor-acquired property.
845.402-70 Policy.

    Authority: 40 U.S.C. 121(c); 41 U.S.C. 1702 and 48 CFR 1.301-

Subpart 845.4--Title to Government Property

845.402  Title to contractor-acquired property.

845.402-70  Policy.

    (a) For other than firm-fixed-price contracts, contractor-acquired 
property items not anticipated at time of contract award, or not 
otherwise specified for delivery on an existing line item, shall, by 
means of a contract modification, be specified for delivery to the 
Government on an added contract line item. The value of such 
contractor-acquired property item shall be recorded at the original 
purchase cost. Unless otherwise noted by the contractor at the time of 
delivery to the Government, the placed-in-service date shall be the 
date of acquisition or completed manufacture, if fabricated.
    (b) Following delivery and acceptance by the Government of 
contractor-acquired property items, if these items are to be retained 
by the contractor for continued use under a successor contract, these 
items become Government-furnished property (GFP). The items shall be 
added to the successor contract as GFP by contract modification.
    (c) Individual contractor-acquired property items should be 
recorded in the contractor's property management system at the 
contractor's original purchase cost.
    (d) All other contractor inventory that is excess to the needs of 
the contract shall be disposed of in accordance with FAR subpart 45.6.

[FR Doc. 2018-20183 Filed 9-17-18; 8:45 am]