Guidelines for Designating Biobased Products for Federal Procurement, 1792-1812 [05-399]

Agencies

• DEPARTMENT OF AGRICULTURE
• Office of Energy Policy and New Uses
• Energy Office, Agriculture Department

[Federal Register Volume 70, Number 7 (Tuesday, January 11, 2005)]
[Rules and Regulations]
[Pages 1792-1812]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-399]


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DEPARTMENT OF AGRICULTURE

Office of Energy Policy and New Uses

7 CFR Part 2902

RIN 0503-AA26


Guidelines for Designating Biobased Products for Federal 
Procurement

AGENCY: Office of Energy Policy and New Uses, Office of the Chief 
Economist, USDA.

ACTION: Final rule.

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SUMMARY: The U.S. Department of Agriculture is establishing guidelines 
for designating items made from biobased products that will be afforded 
Federal procurement preference, as required under section 9002 of the 
Farm Security and Rural Investment Act of 2002.

DATES: This rule is effective February 10, 2005.

FOR FURTHER INFORMATION CONTACT: Marvin Duncan, USDA, Office of the 
Chief Economist, Office of Energy Policy and New Uses, Room 361, 
Reporters Building, 300 Seventh Street, SW., Washington, DC 20024; e-
mail: mduncan@oce.usda.gov; telephone (202) 401-0532. Information 
regarding the Federal Biobased Products Preferred Procurement Program 
is available on the Internet at https://www.biobased.oce.usda.gov.

SUPPLEMENTARY INFORMATION:

I. Authority

    These guidelines are established under the authority of section 
9002 of the Farm Security and Rural Investment Act of 2002 (FSRIA), 7 
U.S.C. 8102 (referred to in this document as ``section 9002'').

II. Overview of Section 9002

    Section 9002 provides for preferred procurement of biobased 
products by Federal agencies. Federal agencies are required to purchase 
biobased products, as defined in regulations to implement the statute 
(i.e., this final rule), for all biobased products within designated 
items costing over $10,000 or when the quantities of functionally 
equivalent items purchased over the preceding fiscal year equaled 
$10,000 or more. Procurements by a Federal agency subject to section 
6002 of the Solid Waste Disposal Act (42 U.S.C. 6962) are not subject 
to the requirements under section 9002 to the extent that the 
requirements of the two programs are inconsistent. Federal agencies 
must procure biobased products unless the biobased products within 
designated items are not reasonably available, fail to meet applicable 
performance standards, or are available only at an unreasonable price.
    The Office of Federal Procurement Policy (OFPP) and the USDA will 
work in cooperation to ensure implementation of the requirements of 
section 9002 in the Federal Acquisition Regulation (FAR). In this 
document, USDA is establishing guidelines addressing the designation 
process, how to determine the biobased content and other attributes of 
specific products, and cost sharing for product testing. In addition, 
to provide context, these guidelines address, but do not specifically 
implement, the procurement specific aspects of section 9002. USDA 
consulted with the Environmental Protection Agency (EPA), the General 
Services Administration (GSA), and the Department of Commerce's 
National Institute of Standards and Technology (NIST) in preparing the 
proposed guidelines that it is finalizing in this rule.
    To provide context, these guidelines include the statutory 
requirement that Federal agencies have in place, within one year of the 
publication of final guidelines, a procurement program that assures 
biobased products within designated items will be purchased to the 
maximum extent practical. Those procurement programs will have to 
contain a preference program for purchasing biobased products within 
designated items, an agency promotion program, and provisions for the 
annual review and monitoring of an agency's procurement program. In 
addition to establishing a preferred procurement program, as items are 
designated, Federal agencies may need time to adjust procurement 
practices. In accordance with section 9002(c) and (d), designation 
rules will specify the time frames within which such adjustments must 
occur.
    In designating items (generic groupings of specific products such 
as crankcase oils or synthetic fibers) for preferred procurement, USDA 
will consider the availability of such items and the economic and 
technological feasibility of using such items, including life cycle 
costs. Federal agencies will be required to purchase products that fall 
within an item only after that item has been designated for preferred 
procurement. In addition, USDA will provide information to Federal 
agencies on the availability, relative price, performance, and 
environmental and public health benefits of such items and, where 
appropriate, will recommend the level of biobased content to be 
contained in the procured product. Manufacturers and vendors will be 
able to offer their products to Federal agencies for preferred 
procurement under the program when their products fall within the 
definition of an item that has been designated for preferred 
procurement and the biobased content of the products meets the 
standards set forth in the guidelines.
    Section 9002 provides that USDA, in consultation with the 
Administrator of the EPA, shall establish a voluntary program 
authorizing producers of biobased products to use a ``U.S.D.A. 
Certified Biobased Product'' label. In a subsequent rulemaking, USDA 
intends to establish that voluntary program and provide eligibility 
criteria and guidelines for the use of the ``U.S.D.A. Certified 
Biobased Product'' label.
    Section 9002 provides funds to USDA to support the testing of 
biobased products to carry out the provisions of

[[Page 1793]]

the section. This rule addresses how USDA will use these funds.
    The legislative history of Title IX of FSRIA suggests that Congress 
had in mind three primary objectives that would apply to section 9002. 
The first objective is to improve demand for biobased products. This 
would have a number of salutary effects, one of which would be to 
increase domestic demand for many agricultural commodities that can 
serve as feedstocks for production of biobased products. Another 
important effect would be the substitution of products with a possibly 
more benign or beneficial environmental impact, as compared to the use 
of fossil energy based products.
    As a second objective, Congress wants to spur the development of 
the industrial base through value-added agricultural processing and 
manufacturing in rural communities. Since biobased feedstocks are 
largely produced in rural settings and, in many cases because of their 
bulk, require pre-processing or manufacturing close to where they are 
grown, increased dependence on biobased products appears likely to 
increase the amount of pre-processing and manufacturing of biobased 
products in rural regions of the Nation. This trend would help to 
create new investment, job formation, and income generation in these 
rural regions.
    The third objective is to enhance the Nation's energy security by 
substituting biobased products for fossil energy-based products derived 
from imported oil and natural gas. The growing dependence of the Nation 
on imported oil and natural gas, along with heightened concerns about 
political instability in some of the oil rich regions in the world, 
have led the Congress to place a higher priority on domestic energy and 
biobased product resources.
    To assist manufacturers and vendors and Federal agencies in 
understanding the steps they will need to follow in participating in 
this program, USDA has included the following brief listing of steps 
under the item designation process, manufacturer and vendor guidance, 
and the procurement process.
    Item Designation Process:
    1. USDA gathers product data and vendors may voluntarily provide 
product information on:
    a. Technological and economic feasibility (functional performance, 
commercially available, etc.).
    b. Samples for testing for biobased content.
    c. Information to determine environmental and public health 
benefits and life cycle costs (through BEES analysis).
    2. USDA extrapolates the data to describe an Item.
    3. USDA issues a proposed rule to designate an Item.
    4. The public comments on the proposed rule.
    5. USDA takes comments into consideration.
    6. USDA issues a final rule designating an Item.
    7. Designated Items are posted on Web site.
    8. Manufacturers/vendors are invited to post on the Web site their 
specific product information under a designated Item.
    Manufacturer and Vendor Guidance:
    1. Manufacturers/vendors must certify the biobased products content 
of their products.
    2. Manufacturers/vendors may post products on Web site and may 
market products with claims for:
    a. Biobased products content:
    (1) Must meet minimum content as defined by the designated Item 
description.
    (2) Content must be verified upon request from Federal agency.
    (3) Verification must be based on testing by an independent testing 
entity using ASTM D6866.
    b. Life cycle cost information:
    (1) Must be verified upon request from Federal agency.
    (a) Verification must be based on testing by an independent testing 
entity using (i) BEES analysis or (ii) either a third-party analysis or 
an in-house analysis using ASTM D7075 standard for evaluating and 
reporting on environmental performance of biobased products, including 
life cycle costs.
    c. Performance data, materials safety data sheets, etc.
    d. Contact information.
    Procurement Process:
    1. The Federal agency identifies procurement need for a biobased 
product that falls within a designated item.
    2. The agency conducts search for qualifying biobased products 
meeting this need; one tool is the informational Web site.
    3. The agency issues a solicitation or uses another procurement 
procedure.
    4. Manufacturers/vendors respond to the solicitation.
    5. The agency gives preference to qualifying biobased products 
under a designated item.
    a. Agencies have three exceptions to giving preference to biobased 
products:
    (1) Not available within a reasonable time.
    (2) Does not meet performance standards.
    (3) Unreasonable price.
    6. The agency makes a purchase.
    The product information requirements contained in these guidelines 
are intended to establish standards to guide Federal agencies and 
manufacturers and vendors when such information is relevant in the 
context of a specific procurement. Other than certification of biobased 
content, Federal agencies should request information or verification of 
information only when such information will be of use to the agency in 
the context of the specific procurement. The discussion of product 
information in the guidelines is not intended to suggest that such 
information will be relevant to all procurements. Only self-
certification of biobased content is required for all procurements of 
designated items.

III. Background

    On December 19, 2003, USDA published in the Federal Register (68 FR 
70730) a proposed rule to establish guidelines implementing the 
provisions of section 9002. As described in the proposed rule, the 
guidelines would be contained in a new 7 CFR part 2902, ``Guidelines 
for Designating Biobased Products for Federal Procurement.'' The new 
part would be divided into two subparts, ``Subpart A--General,'' and 
``Subpart B--Biobased Product Eligibility for Federal Preference.'' 
Subpart A would address the purpose and scope of the guidelines and 
their applicability, provide guidance on product availability and 
procurement, define terms used in the part, and address affirmative 
procurement programs and USDA funding for testing. Subpart B would 
address communicating information on qualifying biobased products and 
characteristics required for obtaining designated item status, and 
would set out the initial categories of designated items and minimum 
content.
    USDA solicited comments on the proposed rule for 60 days ending on 
February 17, 2004. USDA received 271 comments from 64 commenters by 
that date. The comments were from private citizens, consultants, 
individual companies, industry organizations and trade groups, 
nonprofit organizations, universities, a Member of Congress, and State 
and Federal agencies.
    With few exceptions, the commenters supported the goals of section 
9002 and the proposed guidelines, although nearly all of the commenters 
had specific suggestions for changes to the proposed guidelines or 
raised issues related to the implementation of the program. These 
suggestions and issues are addressed below by topic.

[[Page 1794]]

IV. Discussion of Comments

    Many comments evidenced confusion regarding how the program would 
work. In an effort to address that confusion, USDA has reorganized the 
final rule into a more reader-friendly format. Along with the 
reorganization, the final rule also uses more descriptive section 
titles and more paragraph headings to enable readers to locate 
information efficiently. Because individuals commented on specific 
sections of the proposed rule, USDA is addressing the comments based on 
the section numbers of the proposed rule. However, the final rule 
section number is indicated after each proposed rule section number.

Applicability (Proposed Rule Sec.  2902.2; Final Rule Sec.  2902.3)

    Paragraph (a) of Proposed Rule Sec.  2902.2 (Final Rule Sec.  
2902.3(a)) explains that part 2902 applies to all procurements by 
Federal agencies of biobased products falling within items designated 
by USDA in this part, where the Federal agency purchases $10,000 or 
more worth of one of those items during the course of a fiscal year, or 
where the quantity of such items or of functionally equivalent items 
purchased during the preceding fiscal year was $10,000 or more. The 
$10,000 threshold applies to procuring agencies as a whole rather than 
to agency subgroups such as regional offices or subagencies of a larger 
department or agency.
    One commenter stated that USDA should clarify that the $10,000 
trigger for purchasing biobased products is an agency-wide requirement. 
Similarly, another commenter stated that the $10,000 trigger for 
purchasing biobased products must be understood by Federal agencies to 
apply to the agency level and not an individual unit within an agency 
or credit card holder level.
    In response to these comments, USDA is revising the text of Sec.  
2902.3(a) to change the word ``procuring'' to ``Federal'' and insert 
``Federal'' in the phrase ``larger department or agency.'' The final 
rule provides that ``the $10,000 threshold applies to Federal agencies 
as a whole rather than to agency subgroups such as regional offices or 
subagencies of a larger Federal department or agency.''
    Some commenters raised points regarding the scope of the $10,000 
threshold's applicability, with one commenter suggesting that USDA 
should educate agencies on how the $10,000 minimum purchase threshold 
is to be applied. With respect to who is making the purchases, one 
commenter stated that the $10,000 level is reasonable if it includes 
purchases made by contractors of the respective agency from outside 
vendors, and another commenter suggested that the guidelines should be 
applicable to State agencies and other governmental and quasi-
governmental entities that receive Federal funding. With respect to 
what is being purchased, a fourth commenter stated that the $10,000 
buying threshold for a product category is appropriate as long as it 
applies to the product category and not to the individual product.
    With respect to educating agencies on how the $10,000 minimum 
purchase threshold is to be applied, USDA is developing a model 
procurement program that will incorporate an educational element. USDA 
anticipates that as the program enters its operational phase, the 
designation of items available for procurement will naturally tend to 
lend greater clarity to the program as it is practically applied. 
Section 9002 does not authorize extending the guidelines to State and 
local agencies using appropriated Federal funds to procure qualifying 
biobased items, or to persons contracting with such agencies with 
respect to work performed under such contracts. In response to the 
fourth commenter, the $10,000 threshold is determined at the item 
level, which is the level of designation, and not at the individual 
product level.
    Some commenters recommended that Federal agencies be required to 
report all purchases, including government credit card purchases, 
subject to the $10,000 threshold on a single purchase or cumulative 
purchase of a single product type of $10,000 worth in the preceding 
year for the purposes of monitoring the program's impact and agency 
compliance. The resulting purchase reports could be made available in a 
searchable database on the program Web site to allow manufacturers to 
determine whether any of their products qualify for procurement 
preference and identify any opportunities or incentives to develop 
specific biobased alternatives.
    As noted in the proposed rule, OFPP is required to prepare and 
submit a report to Congress every 2 years on the actions taken by 
Federal agencies in the implementation of the biobased product 
procurement program. OFPP's report will, of course, be a public 
document available for review by the public, including interested 
manufacturers. Also, a manufacturer seeking information that would help 
it to identify any opportunities or incentives to market or develop 
specific biobased alternatives may consult the Federal Business 
Opportunities Web site maintained by the GSA (https://
www.FedBizOpps.gov), which provides, among other things, Federal agency 
recurring procurement forecasts.
    One commenter stated that there should be ``flow down'' procurement 
preference to the subcontractor level, maintaining that subcontractors 
are often unaware of item preferences in Federal procurements and that 
such a ``flow down'' preference would ensure that small producers 
always get a bid opportunity. This comment is outside the scope of this 
rulemaking. It relates to the implementation of the procurement 
procedures for this program, which will be accomplished through the 
Federal Acquisition Regulation (FAR).
    Paragraph (b) of Proposed Rule Sec.  2902.2 (Final Rule Sec.  
2902.3(b) and Sec.  2902.5(c)(1)) identifies two exceptions to the 
applicability of the guidelines, i.e., the guidelines do not apply to:

--Any procurement by any Federal agency that is subject to the 
regulations issued by the EPA under section 6002 of the Solid Waste 
Disposal Act, as amended by the Resource Conservation and Recovery Act 
of 1976 (RCRA) (40 CFR part 247), to the extent that the requirements 
of the guidelines are inconsistent with those regulations; or
--The procurement of motor vehicle fuels or electricity.

    One commenter noted that in addition to these two exceptions to the 
applicability of the guidelines, paragraph (e) of Proposed Rule Sec.  
2902.11 (Final Rule Sec.  2902.5(c)(2)) also contains an exclusion from 
the program for products having mature markets. The commenter suggested 
that all the program exclusions be located in one place.
    USDA agrees with the essence of this comment. To that end, items 
excluded from consideration for designation are consolidated in Final 
Rule Sec.  2902.5(c). However, because an inconsistency with 
regulations implementing Section 6002 of the Solid Waste Disposal Act 
is an applicability factor, and not a blanket exclusion from this 
program or consideration for designation, USDA has retained that 
provision in the applicability Section, now Final Rule Sec.  2902.3(b). 
Additionally, because the regulations implementing section 6002 of the 
Solid Waste Disposal Act are popularly known as the RCRA regulations or 
RCRA guidelines, USDA revised Final Rule Sec.  2902.3(b) to acknowledge 
the connection between RCRA and the Solid Waste Disposal Act.
    One commenter stated that the proposed rule was ambiguous as to 
whether the proposed procurement

[[Page 1795]]

requirements constitute a mandatory purchasing program or a 
preferential program. This commenter asked if agencies would be 
required to buy only biobased products unless one of the identified 
circumstances applies, or would the biobased program be subject to some 
sort of evaluative preference that goes into the procurement decision.
    Section 9002 provides for preferred procurement of biobased 
products by Federal agencies, and the guidelines in this final rule 
reflect the statutory requirement that agencies must establish a 
procurement preference program. In developing the required preference 
program, Federal agencies are expected to adopt a policy that will 
maximize the purchase or use of biobased products to the extent 
practicable, with exceptions being made only when they: (1) Are not 
available within a reasonable time; (2) fail to meet performance 
standards set forth in the applicable specifications, or the reasonable 
performance standards of the Federal agency; or (3) are available only 
at an unreasonable price. To help clarify this and other aspects of the 
program, USDA will develop a model procurement policy and program for 
designated items to support its own procurement practices. The FAR also 
will be amended to implement the procurement aspects of the program.
    One commenter stated preferred procurement programs like the 
proposed program are not the most effective mechanisms for changing or 
driving environmental behaviors. This commenter maintained that product 
claims regarding environmental and performance attributes could mislead 
public and private sector buyers and lead to less efficient, more 
costly, buying practices that would not assure more environmental 
benefits. Based on this position, the commenter recommended that USDA 
reconsider the ``must procure'' aspect of the program, which goes 
beyond simply encouraging new markets and could lead to undue 
substitution of viable products.
    Section 9002 sets the basic parameters for this program. USDA must 
consider the economic and technological feasibility of using items, 
including life cycle costs, in designating items under this program. 
Additionally, vendors must provide information about product 
environmental and public health benefits, if so requested by the 
procuring official (see Final Rule Sec. Sec.  2902.6 and 2902.8).
    In most situations, self-certification should be satisfactory for 
Federal agencies. Manufacturers and vendors are expected to verify this 
information only in specific procurements where a Federal agency 
expressly requires verification of environmental benefits, public 
health benefits, or life cycle costs. Such information must be verified 
using an analytical method authorized in these guidelines. USDA, 
through these guidelines, requires verification with (a) a third-party 
test using the NIST Building for Environmental and Economic 
Sustainability (BEES) analytical tool or (b) either a third-party or an 
in-house test using the ASTM International (ASTM) standard for 
evaluating and reporting on environmental performance of biobased 
products, including life cycle costs. Both BEES and the ASTM standard 
are in accordance with International Organization for Standardization 
(ISO) standards, are focused on testing of biobased products, and will 
provide the life cycle assessment and life cycle cost information 
Federal agencies might require. Such information will empower the 
procuring official to consider all relevant factors and make 
determinations that best meet the Federal agency's needs.

USDA Guidance on Item Availability and Procurement (Proposed Rule Sec.  
2902.3; Final Rule Sec.  2902.6)

    Proposed Rule Sec.  2902.3 (Final Rule Sec.  2902.6) contained a 
discussion of the voluntary Web-based information site USDA intends to 
maintain for manufacturers and vendors of designated items produced 
with biobased products and Federal agencies. Through this Web site, 
USDA intends to provide access to information as to the availability, 
relative price, performance and environmental and public health 
benefits of the designated items. In the proposed rule, USDA solicited 
comments on the kinds of contact and product information that should be 
made available on the Web-based information system, as well as comments 
on the appropriate components of a model procurement program for 
biobased items.
    With respect to the model procurement program, one commenter asked 
that, in the final rule, USDA better spell out how it will use its 
model procurement program or other assistance to help other Federal 
agencies in complying with section 9002. One suggestion made in this 
vein by two commenters was that USDA should provide sample solicitation 
and contract language that Federal agencies can insert into support 
services solicitations and performance-based contracts.
    USDA is in the process of developing the model procurement program 
referred to in the proposed rule. It is the USDA intention to have the 
model procurement program in place prior to designation of the first 
items under the program. The USDA Office of Chief Economist has 
forwarded these comments to USDA Departmental Administration for its 
consideration in developing the model procurement program. With respect 
to the provision of sample solicitation and contract language, this 
comment and many similar comments reflect a misunderstanding of how 
these requirements will be implemented into the Federal procurement 
framework. To address this point in the guidelines, USDA added a new 
paragraph (a) in Final Rule Sec.  2902.4 stating that: ``The Office of 
Federal Procurement Policy, in cooperation with USDA, has the 
responsibility to coordinate this policy's implementation in the 
Federal procurement regulations. These guidelines are not intended to 
address full implementation of these requirements into the Federal 
procurement framework. This will be accomplished through revisions to 
the Federal Acquisition Regulation.'' The USDA Office of Chief 
Economist has forwarded these comments to USDA Departmental 
Administration for its consideration in developing the model 
procurement program.
    One commenter was concerned that the program's procedures are too 
complicated for acquisitions under the Simplified Acquisition Threshold 
as defined in Sec.  2.101 of the Federal Acquisition Regulation. This 
commenter was also concerned that procurement automation efforts would 
be negatively affected due to the potential need to manually procure 
biobased items. This comment is outside the scope of this rulemaking. 
It relates to the implementation of the procurement aspects of this 
program, which will be accomplished through the FAR.
    One commenter, noting that procuring agencies will be looking for 
articles such as truck bed liners and chairs, not ``molded plastics and 
composites,'' recommended that the program Web site include links so 
that products that fall under designated item groupings can be cross 
referenced or displayed by product categories in a manner that will be 
useful to Federal buyers. USDA appreciates the emphasis on purchasing 
of end products and will take that into account in future item 
designation. USDA intends to design the program Web site to be as user-
friendly as possible, which would include providing features such as 
those described by the commenter.
    Two commenters suggested that USDA should work closely with the 
Biobased Manufacturers Association

[[Page 1796]]

(BMA) and use BMA's ``Biobased Supercenter'' as a model for the USDA 
Web-based information center. One of these commenters also suggested 
that USDA work with BMA to coordinate product sub-categories, classes, 
and codes.
    USDA will work to identify opportunities to coordinate its efforts 
under the biobased preference program with the efforts of other public 
and private entities with which the program has shared or overlapping 
interests.
    One commenter noted that procurement agencies such as the Defense 
Logistics Agency (DLA) are tasked with purchasing materials identified 
by their customers as necessary to perform the customers' mission and 
stated that, while DLA and similar agencies can facilitate making 
alternative products available and visible, the decision on product 
choice will rest with the end user. This commenter recommended that the 
final regulations provide that customers (end users) should specify 
biobased products when ordering from Federal Supply Schedule or prime 
vendor type contracts.
    Section 2902.4(c) in this final rule provides that after the 
publication of each designated item, Federal agencies that have the 
responsibility for drafting or reviewing specifications for items 
procured by Federal agencies shall ensure within a specified time frame 
that their specifications require the use of that item composed of 
biobased products, consistent with the guidelines. USDA will specify 
the allowable time frame in each designation rule.
    The proposed rule preamble stated, ``Information on relative price, 
performance, and environmental and public health benefits that USDA is 
required to provide to Federal agencies will be gathered from 
manufacturers and vendors at the individual product level. This 
information, to be of maximum value to Federal agencies in making 
procurement decisions, must be considered at an individual product 
level.'' One commenter objected to the notion of gathering 
environmental and public health information directly from vendors of 
biobased products. Instead, this commenter stated, USDA must establish 
a set of standards that must be met by vendors who want their products 
to qualify. The commenter asserted that, to be truly useful, those 
standards must address safety and health effects on workers, 
performance, costs (of purchase, use, and disposal), and environmental 
impact.
    As noted in the proposed rule, we intend to gather information on 
the relative price, performance, and environmental and public health 
benefits of specific products from industry using a Web site to which 
manufacturers and vendors of products that fall within designated items 
will be invited to voluntarily provide information, including 
availability of the products with biobased content that they offer to 
Federal agencies. Final rule Sec.  2902.6(a) also includes biobased 
content among the information to be provided on the Web site. The Web 
site will employ a standardized format with interactive capabilities 
that will permit manufacturers and vendors to enter information into 
the Web site. Final rule Sec.  2902.6(a) clarifies that the Web site 
will provide instructions for the posting of information. USDA will 
periodically audit the information displayed on the Web site and, where 
questions arise, contact the manufacturer or vendor to verify, correct, 
or remove incorrect or out-of-date information. In addition, USDA added 
to Final Rule Sec.  2902.6(a) a general requirement that manufacturers 
and vendors, when requested, be able to verify any relevant product 
characteristic information provided to Federal agencies. USDA believes 
that these procedures, along with the fact that the designation process 
for each item will provide USDA and the public with an opportunity to 
consider the economic and technological feasibility, including life 
cycle costs, of items and the types of products that would fall within 
each item grouping, will ensure that the factors identified by the 
commenter are adequately considered.

Definitions (Proposed Rule Sec.  2902.4; Final Rule Sec.  2902.2)

    With respect to the definition of biobased product, one commenter 
noted the use of the term ``renewable domestic agricultural materials'' 
and asked for clarification of the ``domestic'' qualifier. Does it 
refer to the origin of the agricultural materials, or to where the 
agricultural materials were turned into usable feedstock? The commenter 
stated that agricultural materials are sourced from all around the 
world, and that producers may be unable to certify that a particular 
raw material is ``domestic.'' On this same subject, one commenter noted 
that in section 9002, the qualifier ``domestic'' appears to apply only 
to renewable agricultural materials, and not to biological products, 
and asked that USDA clarify whether that is indeed the case.
    The statutory definition refers to ``biological products or 
renewable domestic agricultural materials (including plant, animal, and 
marine materials) or forestry materials.'' 7 U.S.C. 8101(2). USDA 
considers the qualifier ``domestic,'' as well as the qualifier 
``renewable,'' to apply to both agricultural materials and forestry 
materials. Given that the statute refers to the materials themselves 
and not to, for example, domestically processed materials, USDA 
construes an intent to promote the use of U.S. origin agricultural and 
forestry materials.
    Also with respect to the definition of biobased product, one 
commenter noted there was no reference to products manufactured 
primarily from ``naturally occurring microorganisms'' and asked if such 
products were being considered for inclusion in the program. To the 
extent that these products would be composed in whole or in part of 
biological products, such products would fall within the definition of 
biobased product.
    One commenter stated there appeared to be an inconsistency between 
the definition of ``biobased content'' and the provisions of Proposed 
Rule Sec.  2902.11(d)(1) (Final Rule Sec.  2902.7(c)). The proposed 
definition of ``biobased content'' stated, in part, ``[t]otal product 
weight may be calculated exclusive of water or other inactive 
ingredients, fillers and diluents,'' while Proposed Rule Sec.  
2902.11(d)(1) stated ``[b]iobased content shall be determined based on 
the weight of the biobased material (exclusive of water and other non-
active ingredients, fillers, and diluents) divided by the total weight 
of the product and expressed as a percentage.'' The commenter stated it 
was confusing as to whether total product weight is determined with or 
without inactive ingredients, including inorganic materials. On this 
same subject, another commenter stated that, in order to realistically 
promote the introduction of biobased products, the biobased content 
should--not ``may'' as in the definition--be defined exclusive of 
water, pigments, fillers, rheology modifiers, additives, and other 
inactive materials.
    USDA agrees that the definition of ``biobased content'' needs 
clarification. In order to be consistent with the ASTM International 
Radioisotope Standard Method that USDA is requiring for determining and 
certifying biobased content, the term ``biobased content'' is defined 
in this final rule as the amount of biobased carbon in the material or 
product as a percent of the weight (mass) of the total organic carbon 
in the product. This calculation excludes all inorganic material in the 
product. USDA similarly revised Final Rule Sec.  2902.7(c) to be 
consistent with the revised definition in Final Rule Sec.  2902.2.

[[Page 1797]]

    One commenter suggested that, to eliminate confusion, a definition 
of ``biodegradable'' should be added to the definitions section of the 
guidelines, as well as a note elsewhere in the guidelines that a 
biobased product is not necessarily a biodegradable product, i.e., that 
biodegradability is a characteristic that must be addressed and 
qualified separately.
    As biodegradability is a characteristic that will be a 
consideration in the designation of some items but not others, USDA 
does not think that it is necessary to add a definition of the term in 
this final rule. USDA will, however, propose to define the term in a 
future rulemaking when it is appropriate in the context of the item or 
items being considered for designation, which will give the public an 
opportunity to comment upon the proposed definition.
    The same commenter suggested that a definition of ``total 
manufactured value'' be added to the guidelines to help clarify the use 
of the term in Proposed Rule Sec.  2902.11.
    As discussed later in this document, USDA has removed the ``5 
percent of total manufactured value'' criterion from the guidelines in 
this final rule. Thus, it is not necessary to define the term.
    One commenter stated that the definitions in the final guidelines 
should be inclusive rather than exclusive, thus food crops and food 
waste should have equal footing and utilization of agricultural and 
animal waste should be given equal, if not special, consideration over 
virgin agricultural food crops.
    USDA considers the definitions in the guidelines to be inclusive. 
The statute and the guidelines focus on promoting the use of biobased 
products generally, without special emphasis on any particular class of 
biobased product.
    In addition to the above changes made in response to specific 
comments, USDA is making several other minor technical or stylistic 
changes to the definitions of ``Biobased product,'' ``Designated 
item,'' and ``Sustainably managed forests.'' USDA is substituting 
``USDA'' for ``Secretary'' in the definition of ``Biobased product'' to 
reflect the fact that the Secretary has delegated this authority within 
USDA and need not make such determinations personally. USDA revised the 
definition of ``Designated item'' to replace the term ``category'' with 
``generic grouping'' because the use of the term ``category'' in the 
proposed rule generated confusion. In that same definition, USDA added 
``biobased'' to modify ``products'' to clarify that the generic group 
was of ``biobased products.'' Also in that definition, because of the 
reorganization from the proposed rule to the final rule, USDA replaced 
the reference to ``Sec.  2902.12'' with ``subpart B.'' Regarding the 
definition of ``Sustainably managed forest,'' USDA added ``Refers to 
the'' at the beginning of the definition. Finally, in addition to these 
minor changes, USDA wants to clarify the origin of the definition of 
``Small and emerging private business enterprise.'' That definition is 
based on the USDA Rural Business Service definition of the same term 
used in the Rural Business Enterprise Grant Program (see 7 CFR 
1942.304).

Preferred Procurement Program (Proposed Rule Sec.  2902.5(b); Final 
Rule Sec.  2902.4(b))

    Under Proposed Rule Sec.  2902.5(b) (Final Rule 2902.4(b)(1)), 
agencies would be required to develop a procurement program that will 
assure that products that fall within designated items composed of 
biobased products will be purchased to the maximum extent practicable, 
consistent with applicable provisions of Federal procurement laws. Such 
programs would provide for preferential purchasing of products that 
fall within designated items unless the items are not available within 
a reasonable time, fail to meet performance standards, or are available 
only at an unreasonable price.
    Several commenters focused on the ``unreasonable price'' criterion. 
Some of the commenters simply stated that USDA must provide guidance to 
Federal agencies as to what constitutes an ``unreasonable price'' or, 
conversely, what a ``reasonable price'' would be. Other commenters 
suggested that USDA should formulate a quantifiable ``allowable 
premium'' that procurement officials may pay, similar to that allowed 
for the purchase of recycled paper, that takes into account the 
socioeconomic and environmental benefits of using biobased products 
instead of petrochemical or mineral products. Flat 10, 15, and 20 
percent premiums were suggested, as was a one percent premium for each 
10 percent of biobased content.
    The reasonable/unreasonable assessment, which the statute and the 
guidelines offer for consideration with respect to both the price of a 
product and the amount of time in which it would be available, is an 
assessment that USDA thinks must be made by the procurement official in 
the context of a specific procurement. Through the biobased program Web 
site and other initiatives, USDA will attempt to provide as much 
relevant information as possible for those procurement officials to 
consider. In the end, however, it will be agency procurement officials, 
acting in accordance with their agencies' particular procurement 
programs and the FAR, who will have to decide how to best meet the 
procurement needs of their agencies.
    Other commenters sought a greater emphasis on value, rather than 
price. One of those commenters suggested that Federal agencies should 
be required to purchase biobased products despite initial price 
differentials, unless they can demonstrate through a full life-cycle 
analysis that the non-biobased product is a better value. Another 
commenter stated that USDA should clarify, quantify, and incorporate 
the concept of ``best value'' in its guidelines for Federal purchasing. 
In identifying the ``best value,'' some commenters stated, USDA should 
quantify the benefits of creating a new economic sector in rural 
America, the environmental benefits of using biobased products, and the 
national security and economic benefits of reduction of dependence on 
imported fossil fuels. One of these commenters concluded by suggesting 
that information by suppliers that documents ``best value'' should be 
included on the program Web site and a maximum allowable premium for 
biobased products should be set at 10 percent over a non-biobased 
alternative after a best value comparison.
    The above comments relate to the implementation of the procurement 
aspects of this program, which will be accomplished through revisions 
to the FAR. The law provides the ``unreasonable price'' exemption, but 
application of this exemption will likely be based on a comparison of 
product price, price of alternative products, life cycle costs, and 
other benefits. In many, perhaps most, cases this will involve 
nonquantifiable determinations or determinations that can only be made 
by the procuring agency. Therefore, USDA believes that the degree to 
which such factors are incorporated into the procurement system can 
best be addressed through the implementing regulations in the FAR.
    One commenter was concerned that the proposed program may be too 
cumbersome and too easily circumvented by unwilling procurement 
specialists. Similarly, other commenters were concerned that price and 
availability considerations may provide loopholes allowing purchasing 
agents to circumvent the original intent of section 9002 and suggested 
that exceptions to the purchasing requirement should be kept to a 
minimum. Some of these commenters stated that USDA needs to

[[Page 1798]]

provide explicit guidance to agencies to ensure that agencies do not 
use price to avoid their obligation to ``buy biobased,'' with one 
commenter stating that cost, in and of itself, is no excuse not to 
purchase biobased products. These commenters suggested that USDA 
guidance provide for the consideration of a variety of factors, such as 
product lifespan, energy savings, reduced disposal costs, reduced 
health and safety costs, environmental benefits, and compliance with 
other governmental ``green'' initiatives.
    The guidelines in this final rule reflect the statutory parameters 
for making procurement decisions. That is, agencies must give a 
preference to designated biobased items unless the items:

--Are not reasonably available within a reasonable period of time;
--Fail to meet the performance standards set forth in the applicable 
specifications or fail to meet the reasonable performance standards of 
the procuring agencies; or
--Are available only at an unreasonable price.

    In addition to the statutory parameters, USDA has set forth 
recommended procurement practices in these guidelines. Those 
recommended procurement practices include acceptable standards for 
determining biobased content and product attributes. USDA encourages 
procurement officials to consider a product's life cycle costs and 
environmental and public health benefits when appropriate in the 
context of a specific procurement, but USDA is not in a position to 
mandate consideration of and establish specific qualifying standards 
for all possible products for all procurements.
    Proposed Rule Sec.  2902.5(a) (Final Rule Sec.  2902.4(c)) stated, 
in part, that ``Within 1 year after the publication date of each 
designated item, Federal agencies that have the responsibility for 
drafting or reviewing specifications for items procured by Federal 
agencies shall ensure that their specifications require the use of 
designated items composed of biobased products, consistent with the 
guidelines in this part.'' One commenter offered that it may be 
possible for agencies to conduct a review of their specifications 
within the specified year, but that the development of new or revised 
specifications resulting from such reviews may not be possible within 
that time frame.
    USDA expects that the required reviews and revisions of 
specifications will be an ongoing process, and certainly not a one-time 
effort that would overwhelm most agencies. USDA agrees with the 
commenter to the extent that the comment expresses that the one-year 
time frame might not be appropriate in all instances. To that end, USDA 
has revised Final Rule Sec.  2902.4(c) to remove ``Within 1 year'', 
insert ``within a specified time frame'', and indicate that ``USDA will 
specify the allowable time frame in each designation rule.''
    One commenter stated that the guidelines need to take into account 
the fact that more Government purchasing organizations are using 
methods involving long-term contracts, often in the 5- to 10-year 
range, in order to ensure supply continuity and realize savings. The 
commenter pointed out that some items that may be designated in the 
future will likely have non-biobased competition that is already on a 
long-term contract, and that the guidelines need to provide some 
flexibility in such cases, as changing those contracts would entail 
substantial time, effort, and costs. Along these same lines, one 
commenter stated that biobased procurement should become a mandatory 
feature of any new contracts or contract renewals, but simply 
encouraged in the context of existing contracts. These comments relate 
to the implementation of the procurement aspects of this program, which 
will be accomplished through the FAR.

Funding for Testing (Proposed Rule Sec.  2902.6; Final Rule Sec.  
2902.9)

    As discussed in the proposed rule, section 9002 provides to USDA $1 
million per year for each of the fiscal years 2002 through 2007 to 
support the testing of biobased products to carry out the provisions of 
the section. Section 9002 further provides that USDA, at its 
discretion, may ``give priority to the testing of products for which 
private sector firms provide cost sharing for the testing.'' In the 
proposed guidelines, Sec.  2902.6 (Final Rule Sec.  2902.9) described 
the manner in which available funds for testing would be allocated and 
the priority-setting mechanism USDA would use to evaluate proposals for 
cost sharing. Under Proposed Rule Sec.  2902.6(a) (Final Rule Sec.  
2902.9(a)), USDA will use these funds directly for biobased content 
testing and environmental/public health benefits testing using the BEES 
Analysis. Once USDA begins the cost sharing programs, USDA will provide 
cost sharing under Proposed Rule Sec.  2902.6(b) (Final Rule Sec.  
2902.9(b)) for environmental and public health benefits testing, using 
the BEES Analysis, and for performance testing.
    One commenter stated that while funding for testing was desirable, 
such funding should not be ``wasted on frivolous testing of products 
that are not already well down the path for qualification.'' This 
commenter stated that the funding should instead be directed toward 
simplifying the process so that the maximum number of vendors can 
perform the testing necessary to qualify products in the most cost-
effective manner. The commenter encouraged USDA to use the funding to 
fill in limited data gaps to expedite designation of items, as 
discussed in the proposed rule.
    USDA thinks that both the USDA-supported testing described in 
Proposed Rule Sec.  2902.6(a) (Final Rule Sec.  2902.9(a)) and the cost 
sharing criteria described in Proposed Rule Sec.  2902.6(b) (Final Rule 
Sec.  2902.9(b)) address directly the points raised by the commenter. 
With limited funding for testing, USDA is keenly aware of the need to 
maximize the usefulness of those resources.
    With respect to the setting of priorities for the distribution of 
testing funds described in the proposed rule, one commenter encouraged 
USDA to give priority to products with a higher minimum biobased 
content, while another commenter stated that priority should be given 
to the funding of testing for products developed by small companies 
located in rural areas.
    Once USDA has concluded that a critical mass of items has been 
designated, USDA will exercise its discretion to make cost sharing a 
more determinative factor in product testing. Paragraph (b)(3) of Final 
Rule Sec.  2902.9 provides that cost-sharing proposals will be 
considered first for high priority products of small and emerging 
private business enterprises, which would include the small companies 
in rural areas identified by one of those commenters. Proposals for 
cost sharing will be prioritized, with rating points assigned based on 
the product's market readiness, the potential size of the market for 
that product in Federal agencies, the financial need for assistance of 
the manufacturer or vendor, the product's prospective competitiveness 
in the market place, and the product's likely benefit to the 
environment. If funds remain available, proposals from other than small 
and emerging private business enterprises will be considered, based on 
those same priority factors. These factors will allow USDA to give 
favorable consideration to products with higher biobased content and 
products developed by smaller companies.
    In response to these and the previous comments, USDA reorganized 
and revised Final Rule Sec.  2902.9(b)(2) and (3) to clarify these 
points. Final Rule

[[Page 1799]]

Sec.  2902.9(b)(2) and (3) make clear that USDA will use these criteria 
to rank the priority of both small and emerging private business 
enterprise proposals and other producer proposals. Final Rule Sec.  
2902.9(b)(3) also clarifies that USDA will consider first only ``high 
priority'' products of small and emerging private business enterprises 
before considering proposals for products of other producers of 
biobased items. In other words, after considering all ``high priority'' 
proposals for products of small and emerging private business 
enterprises, USDA will consider all remaining cost sharing proposals 
together, including both the remaining proposals for products of small 
and emerging private business enterprises and all proposals for 
products of all producers of biobased items. These clarifications help 
ensure that this framework will result in the efficient and cost-
effective use of these funds to further the program objectives.
    In addition, USDA made several minor technical revisions in Final 
Rule Sec.  2902.9(b). In paragraph (b)(1), USDA revised ``testing of 
biobased products to carry out this program'' to reference the testing 
that would be funded under paragraph (b)(4) and the applicable testing 
standards from Sec.  2902.8. The revised phrase reads ``life cycle 
costs, environmental and health benefits, and performance testing of 
biobased products in accordance with the standards set forth in Sec.  
2902.8 to carry out this program.'' USDA also revised paragraph (b)(4) 
to replace the first reference to BEES with the phrase ``life cycle 
costs and environmental and health benefits'' and to strike the second 
reference to BEES. These revisions are to make this section consistent 
with Final Rule Sec.  2902.8, as discussed below.
    One commenter recommended that USDA should provide opportunities 
for colleges and universities to gain the necessary funding to develop 
the capacity to conduct the performance, health effects, and 
environmental testing necessary for the designation of biobased 
products; in the future, these institutions could also perform the 
carbon dating and BEES analyses provided for by the guidelines.
    USDA agrees that building such capacity would be consistent with 
the goals of section 9002. However, the funds made available under 
section 9002(j)(2) are ``to support testing of biobased products.'' 
These funds are not available for capacity building of colleges and 
universities, nor is the focus of section 9002 institutional capacity 
building. Within USDA, the Cooperative State Research, Education, and 
Extension Service (CSREES) mission includes capacity building. The 
Office of Energy Policy and New Uses (OEPNU) will discuss this comment 
with CSREES as part of overall USDA biobased program coordination.

Communicating Information on Qualifying Biobased Products (Proposed 
Rule Sec.  2902.10; Final Rule Sec.  2902.6)

    As proposed, paragraph (a) of Proposed Rule Sec.  2902.10 (Final 
Rule Sec.  2902.6) would require that manufacturers be able to verify 
the biobased content in their products. The level of biobased content 
in a product would have to be determined using the ASTM International 
standard that is a Radioisotope Standard Method (D 6866) to distinguish 
between carbon from fossil resources and carbon from renewable sources.
    Several commenters weighed in on the use of the ASTM International 
Radioisotope Standard Method for determining the level of biobased 
content in a product; however, only one of those commenters fully 
supported its use. While the one supportive commenter noted that the 
method can produce results in as little as 2 days at a cost of $305, 
many other commenters objected to the costs and delays that would be 
associated with the use of the method, especially with respect to 
products that are already being marketed. While several commenters 
referred to the testing as ``costly,'' other commenters simply stated 
that the costs associated with the testing were unknown and that USDA 
must provide more cost information before requiring such testing.
    According to information USDA received from Iowa State University, 
which is conducting some testing under a cooperative agreement with 
USDA, test results could be expected in 2 to 4 weeks at a cost of $250 
to $500 per sample, depending on the specific methodology used. USDA 
anticipates that each item designation will address minimum biobased 
content for that item. Therefore, manufacturers and vendors must know 
the biobased content of their products in order to know whether the 
products qualify under a designated item. Manufacturers and vendors 
must be able to certify that information to the procuring official. 
Adoption of a standard test method is necessary for the integrity of 
this program, providing a degree of certainty for Federal agencies, 
manufacturers, and vendors. A standard test method informs 
manufacturers and vendors of the standard against which their products 
and their competitors' products will be judged, and Federal procuring 
officials of the standard to apply, should questions arise.
    It is notable that no commenters proposed alternative standard test 
methods. Because use of a standard test method is essential for 
successful program implementation, USDA considers the projected costs 
and testing periods associated with the ASTM International Radioisotope 
Standard Method to be reasonable. Additionally, given the benefits that 
could be expected to accrue to a manufacturer or vendor as a result of 
a product being eligible for the procurement preference, it would 
appear that a $250 to $500 investment for testing would be viewed as a 
worthwhile business investment.
    In response to comments regarding the expense and time required for 
biobased content, BEES, and performance testing of specific products 
(the latter addressed in more detail below), USDA revised the final 
rule to provide alternatives to BEES, simplified the provision 
addressing biobased content test data for products that are essentially 
the same formulation and extended this concept to environmental and 
health effects and life cycle cost test data and in part to performance 
test data. Final Rule Sec. Sec.  2902.7(d) and 2902.8(a) clarify that 
biobased content and BEES or the other ASTM biobased product standards 
test data need not be brand-name specific for products that are 
essentially the same formulation. Regarding performance test data, 
Final Rule Sec.  2902.8(b) leaves to the discretion of the procuring 
official whether such test data must be brand-name specific. The 
different standard for performance test data recognizes that even minor 
changes to a formulation may impact critical performance 
characteristics, and thus the sufficiency of test data for a product 
that is essentially the same formulation must be determined on a case-
by-case basis by the procuring official. Proposed Rule Sec.  
2902.11(d)(2) had presented this concept in a more confusing manner and 
as limited to biobased content testing.
    Several commenters suggested that USDA should accept manufacturers' 
self-certification as to biobased content levels, and that the ASTM 
International Radioisotope Standard Method should be required only if a 
product's biobased content level was challenged by an agency, 
competitor, or consumer. To support the idea of self-certification, two 
of these commenters noted that RCRA regulations (40 CFR part 247) do 
not require affirmative tests to determine if wastes meet the toxicity 
characteristics of hazardous waste.
    Under Proposed Rule Sec.  2902.10(a) (Final Rule Sec.  2902.6(a), 
Sec.  2902.7(a), and

[[Page 1800]]

Sec.  2902.8) manufacturers and vendors are expected to provide 
relevant information to Federal agencies, upon request, with respect to 
product characteristics. This requirement is essentially the same as 
the self-certification described by the commenters. The same paragraph 
goes on to provide that manufacturers and vendors must be able to 
verify the biobased content in their products, and that the ASTM 
International Radioisotope Standard Method must be used to determine 
the level of biobased content in the product. Because biobased content 
is a key element in the statutory and regulatory framework, procuring 
officials, when necessary, must be able to request verification of 
biobased product content of products offered under specific 
procurements. Statutory requirements of this program differ from those 
of the program noted by the commenters. To reaffirm this position, USDA 
revised Final Rule Sec.  2902.7(a) to state that ``Upon request, 
manufacturers and vendors must provide'' such verification information 
in lieu of the text in Proposed Rule Sec.  2902.11(b) that ``Federal 
agencies and USDA may request''. USDA encourages Federal agencies to 
request such verification only when necessary.
    Several commenters were concerned about the method itself. Some 
noted that the Radioisotope Standard Method had not yet been approved 
by ASTM, and stated that only consensus standards should be used. Other 
commenters stated that the test is new and untried and the results may 
not reflect actual biobased content. Two of these commenters stated 
that the \14\C/\12\C ratio measurement must be used with considerable 
caution, if at all; if it is required, USDA must allow for test error 
in setting the minimum content for a product.
    The Radioisotope Standard Method is now an ASTM consensus standard 
(ASTM D 6866), thus USDA is confident that it has moved beyond the 
``new and untried'' stage. USDA added the ASTM number in the text of 
Final Rule Sec.  2902.7(c). With respect to the potential for test 
errors, this ASTM method, like any other test, should produce results 
that are repeatable, and thus could be verified in the event that a 
manufacturer or vendor disagreed with the level of biobased content 
indicated in the test results.
    As proposed, paragraph (b) of Sec.  2902.10 (Final Rule 2902.8(a)) 
would require manufacturers and vendors to use the BEES analytical tool 
to provide information on life cycle costs and environmental and health 
benefits to Federal agencies, when asked.
    Some commenters stated that the regulations should provide for the 
use of other appropriate analytical tools for generating life cycle 
costs information in addition to BEES, including life cycle costs 
assessments conducted by product manufacturers or their contractors. 
Three of these commenters appeared to be basing this suggestion on the 
existence of other analytical methodologies, with two suggesting 
ISO14040 and the third suggesting that the EPA Environmental Technology 
Verification (ETV) Program could be used in place of, or as a 
supplement to, BEES. Two other commenters suggested that additional 
tools should be available because, while BEES may be appropriate for 
some categories and items, it may not be the best alternative for all 
of them, with one commenter pointing to the differences between 
traditionally produced biobased products and those produced using 
biotechnology. One of those commenters stated that while quantitative 
methods are needed to support environmental attributes, producers 
should have the flexibility to choose the most appropriate tools, as 
long as they are scientifically based; recognized by standards 
organizations, such as ISO or ASTM; and include peer review to ensure 
accuracy. In a similar vein, one commenter suggested that manufacturers 
should be able to substantiate claims related to biobased product 
content and environmental performance themselves using ISO-compliant 
methodologies, with the BEES life cycle model then being applied to 
determine life cycle costs.
    USDA, in response to public comments, has concluded that 
alternative methods may be used to verify environmental and health 
effects and life cycle costs. Manufacturers and vendors must provide 
the necessary information by using either (a) the BEES analytical tool 
along with the qualifications of the independent testing entity that 
performed the tests, or (b) either a third-party or an in-house 
conducted analysis using ASTM D7075, the standard for evaluating and 
reporting on environmental performance of biobased products, including 
life cycle assessment and cost analysis for biobased products. Both 
BEES and the ASTM standard are in accordance with ISO standards, are 
focused on testing of biobased products, and will provide the life 
cycle assessment and life cycle cost information Federal agencies might 
require. USDA believes the above noted tests are particularly well 
suited for the needs of this program.
    Several commenters objected entirely to the required use of BEES. 
The reasons given were: (1) BEES may require the release of 
confidential trade secret information; (2) BEES testing will be an 
undue burden on producers, especially small producers, which may 
eliminate some operations from participation in the program; and (3) 
other Federal programs, such as RCRA, do not require such testing. One 
commenter stated that manufacturers should be allowed to use BEES if 
they believed it would be useful to their own marketing efforts, but 
that BEES should not be required generally.
    In response to these concerns, USDA offers the following: (1) The 
security of confidential trade secret information will be an issue 
between the manufacturer or vendor and the laboratory performing the 
BEES analysis. USDA expects that the contractual agreement between the 
two involved parties would address the issue of business information 
security. (2) In accordance with the procedures outlined in Final Rule 
Sec.  2902.9, USDA will provide some funding for BEES, ASTM 
environmental testing, and performance testing of individual products 
with biobased content, with priority being given to products of small 
and emerging private business enterprises. (3) In designating items, 
section 9002 requires USDA to consider the economic and technological 
feasibility of using the items, including life cycle costs. Such life 
cycle costs can be ascertained through the use of the BEES analytical 
tool and the ASTM environmental testing standard.
    Several commenters objected to the required use of BEES for 
biobased products--a requirement termed a burden by some--when there 
was no sim