Federal Acquisition Regulation; Purchases From Federal Prison Industries-Requirement for Market Research, 221-223 [05-24551]
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Federal Register / Vol. 71, No. 1 / Tuesday, January 3, 2006 / Rules and Regulations
Business Pilot Program;’’ and adding
‘‘[Reserved]’’ in its place.
19.001
DEPARTMENT OF DEFENSE
GENERAL SERVICES
ADMINISTRATION
[Amended]
5. Amend section 19.001 by removing
the definition ‘‘Very small business
concern’’.
NATIONAL AERONAUTICS AND
SPACE ADMINISTRATION
19.102
48 CFR Parts 8, 19, 25, 42, and 52
■
[Amended]
6. Amend section 19.102 by removing
paragraph (g) and redesignating
paragraph (h) as paragraph (g).
[FAC 2005–07; FAR Case 2003–023; Item
VI]
19.502–2
Federal Acquisition Regulation;
Purchases From Federal Prison
Industries—Requirement for Market
Research
■
[Amended]
7. Amend section 19.502–2 by
removing from the first sentence of
paragraph (a) ‘‘Except for those
acquisitions set aside for very small
business concerns (see Subpart 19.9),
each’’ and adding ‘‘Each’’ in its place.
■
AGENCIES: Department of Defense (DoD),
General Services Administration (GSA),
and National Aeronautics and Space
Administration (NASA).
ACTION: Final rule.
Subpart 19.9—[Removed]
8. Subpart 19.9 is removed and
reserved.
■
PART 52—SOLICITATION PROVISIONS
AND CONTRACT CLAUSES
9. Amend section 52.212–5 by
revising the date of the clause and
paragraph (b)(4) of the clause to read as
follows:
■
52.212–5 Contract Terms and Conditions
Required to Implement Statutes or
Executive Orders—Commercial Items.
*
*
*
*
*
CONTRACT TERMS AND CONDITIONS
REQUIRED TO IMPLEMENT STATUTES OR
EXECUTIVE ORDERS—COMMERCIAL
ITEMS (JAN 2006)
*
*
*
*
(b) * * *
(4) [Removed]
*
*
*
*
52.219–5
*
*
[Removed]
10. Section 52.219–5 is removed and
reserved.
■
[FR Doc. 05–24550 Filed 12–30–05; 8:45 am]
BILLING CODE 6820–EP–S
RIN 9000–AJ91
SUMMARY: The Civilian Agency
Acquisition Council and the Defense
Acquisition Regulations Council
(Councils) have agreed on a final rule
amending the Federal Acquisition
Regulation (FAR) to implement Section
637 of Division H of the Consolidated
Appropriations Act, 2005. Section 637
provides that no funds made available
under the Consolidated Appropriations
Act for fiscal year 2005, or under any
other Act for fiscal year 2005 and each
fiscal year thereafter, shall be expended
for purchase of a product or service
offered by Federal Prison Industries,
Inc., unless the agency making the
purchase determines that the offered
product or service provides the best
value to the buying agency.
DATES: Effective Date: January 3, 2006.
FOR FURTHER INFORMATION CONTACT: For
clarification of content, contact Ms.
Linda Nelson, Procurement Analyst, at
(202) 501–1900. The TTY Federal Relay
Number for further information is 1–
800–877–8973. Please cite FAC 2005–
07, FAR case 2003–023. For information
pertaining to status or publication
schedules, contact the FAR Secretariat
at (202) 501–4755.
SUPPLEMENTARY INFORMATION:
rmajette on DSK29S0YB1PROD with RULES6
A. Background
Section 637 of Division H of the
Consolidated Appropriations Act, 2005
(Public Law 108–447) provides that
none of the funds made available under
that or any other Act for fiscal year 2005
and each fiscal year thereafter shall be
expended for the purchase of a product
or service offered by Federal Prison
Industries, Inc. (FPI), unless the agency
making the purchase determines that
the offered product or service provides
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221
the best value to the buying agency
pursuant to Governmentwide
procurement regulations issued
pursuant to 41 U.S.C. 421(c)(1) that
impose procedures, standards, and
limitations of 10 U.S.C. 2410n. Section
637 of Division F of the Consolidated
Appropriations Act, 2004 (Public Law
108–199), contained a similar
requirement that applied only to fiscal
year 2004 funds.
DoD, GSA, and NASA published an
interim rule in the Federal Register at
70 FR 18954, April 11, 2005, with a
request for comments. Five respondents
submitted comments. A discussion of
the comments is provided below. As a
result of comment 1 below, the final
rule contains changes at FAR 8.602 to
clarify that the requirements of the rule
do not apply to items for which FPI has
eliminated its mandatory source status.
1. Comment: In the preamble to the
interim rule published on April 11,
2005, the response to Comment 3 states
that, if an agency chooses to make a
purchase at or below $2,500 from FPI,
the agency must first conduct market
research to comply with Section 637 of
Public Law 108–447. This is
inconsistent with the statement under
SUPPLEMENTARY INFORMATION
that FAR 8.602(b) (market research)
does not apply to the purchase of any
service or item of supply that FPI has
been authorized by its Board of
Directors to offer exclusively on a
competitive (non-mandatory) basis.
Since the FPI Board of Directors has
eliminated its mandatory source status
for purchases of $2,500 or less, it would
logically follow that purchases from FPI
up to $2,500 should also be exempt
from market research requirements.
Councils’ response: The Councils
agree that the rule should provide equal
treatment for all items for which FPI has
eliminated its mandatory source status.
The final rule amends FAR 8.602 to
state that its procedures do not apply to
the ‘‘non-mandatory’’ items identified in
FAR 8.605(b)–(g). These items,
therefore, will be acquired using the
policies and procedures otherwise
specified in the FAR.
2. Comment: There appears to be
confusion as to whether the requirement
for market research applies to services
as well as supplies provided by FPI.
This confusion stems from the inclusion
of FPI as a mandatory source at FAR
8.002(a), which applies to both supplies
and services.
Councils’ response: FPI is not a
mandatory source for services and,
therefore, market research in accordance
with FAR 8.602(b) is not required for
services, as indicated at FAR 8.602(c).
This is consistent with the order of
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Federal Register / Vol. 71, No. 1 / Tuesday, January 3, 2006 / Rules and Regulations
priorities at FAR 8.002(a)(2), which
places FPI on an equal footing with
commercial sources with regard to
services. The policy at FAR 8.002(a)(1),
which lists FPI as a mandatory source,
applies only to supplies.
3. Comment: There may be a need in
the future to provide more clarification
of the definition of the term
‘‘comparability’’ and to further
emphasize that the competitive
solicitation process must occur after
completion of the required
comparability determination; and only
in cases where FPI is deemed to be not
comparable. FPI is still seeing instances
where agencies are inappropriately
combining comparability
determinations with competitive
procedures.
Councils’ response: Further
clarification of these issues is
considered unnecessary at this time.
However, as suggested by the
respondent, the Councils will reevaluate the need for clarification in the
future if implementation problems
persist.
4. Comment: While FAR 8.607
prohibits agencies from requiring a
contractor to use FPI as a subcontractor,
this language cannot be interpreted to
circumvent an agency’s obligation
where a product made by FPI could be
used in a project if it is deemed to be
comparable. Regardless of whether the
product is provided to the agency
directly or indirectly, the same
comparability determination and
competitive procedures are required any
time products offered for sale by FPI are
purchased by or for Government
agencies.
Councils’ response: Do not agree that
the comparability determination and
competitive procedures of FAR 8.602(b)
are required any time products offered
for sale by FPI are purchased for the
Government. 10 U.S.C. 2410n (e)
specifically prohibits the Government
from requiring a contractor to use FPI as
a subcontractor or supplier. The rule is
clear with regard to an agency’s
obligation when purchasing FPI
products directly. Purchasing items
through a prime contractor merely to
circumvent the requirements of the rule
clearly would be inappropriate.
Therefore, it is the responsibility of the
acquiring agency to ensure compliance
with the requirements of the rule if the
acquisition involves items of supply on
FPI’s Schedule.
5. Comment: FPI should not be
permitted to participate in small
business set-asides.
Councils’ response: FPI may
participate in small business set-asides
in only those situations where an FPI
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‘‘mandatory’’ item has been found to be
non-comparable to private sector items
and the subsequent competition is
limited to FPI and small business
concerns. This policy is actually
intended to increase opportunities for
small business concerns since (1) prior
to this policy, FPI was the sole source
provider of items that are now being
acquired competitively; and (2) given
the current statutory requirement to
include FPI in the competition if an FPI
item is determined to be noncomparable to private sector items, the
alternative to FPI’s participation in a
small business set-aside would be an
unrestricted (non-set-aside) competition
that includes FPI.
6. Comment: In FAR 8.601(e), remove
‘‘and services’’ from the statement
‘‘Agencies are encouraged to purchase
FPI supplies and services to the
maximum extent practicable.’’ FPI does
not have mandatory source status for
services, nor has it ever been given the
statutory right to branch out into
services.
Councils’ response: The rule makes it
clear that FPI is not a mandatory source
for services. The statement at 8.601(e) is
consistent with the policy previously
included at FAR 8.602(b), which
encouraged agencies to use the facilities
of FPI to the maximum extent
practicable in purchasing both supplies
and services. This text was
inadvertently excluded from the
revision to FAR Subpart 8.6 published
at 69 FR 16147 on March 26, 2004, and
was reinstated in the interim rule
published on April 11, 2005.
This is not a significant regulatory
action and, therefore, was not subject to
review under Section 6(b) of Executive
Order 12866, Regulatory Planning and
Review, dated September 30, 1993. This
rule is not a major rule under 5 U.S.C.
804.
make an individual purchase under a
multiple award contract. In conducting such
a competition or making such a purchase, the
agency must consider a timely offer from FPI.
The rule is expected to benefit small
business concerns that offer products
comparable to those listed in the FPI catalog,
by permitting those concerns to compete for
federal contract awards. However, the rule
could also have a negative impact on those
small business concerns that supply goods or
services to FPI.
B. Regulatory Flexibility Act
The Regulatory Flexibility Act, 5
U.S.C. 601, et seq., applies to this final
rule. The Councils prepared a Final
Regulatory Flexibility Analysis (FRFA),
and it is summarized as follows:
Authority: 40 U.S.C. 121(c); 10 U.S.C.
chapter 137; and 42 U.S.C. 2473(c).
The rule implements the Consolidated
Appropriations Act, 2005, Division H,
Section 637 (Public Law No: 108–447). The
Act imposes the procedures, standards, and
limitation of 10 U.S.C. 2410n on all federal
agencies. 10 U.S.C. 2410n requires market
research before purchasing a product listed
in the Federal Prison Industries catalog, to
determine whether the FPI product is
comparable to products available from the
private sector that best meet the agency’s
needs in terms of price, quality, and time of
delivery. If the FPI product is not
comparable, the agency must use competitive
procedures to acquire the product or must
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Interested parties may obtain a copy
of the FRFA from the FAR Secretariat.
The FAR Secretariat has submitted a
copy of the FRFA to the Chief Counsel
for Advocacy of the Small Business
Administration.
C. Paperwork Reduction Act
The Paperwork Reduction Act does
not apply because the changes to the
FAR do not impose information
collection requirements that require the
approval of the Office of Management
and Budget under 44 U.S.C. 3501, et
seq.
List of Subjects in 48 CFR Parts 8, 19,
25, 42, and 52
Government procurement.
Dated: December 22, 2005.
Gerald Zaffos,
Director, Contract Policy Division.
Interim Rule Adopted as Final with
Changes
■ Accordingly, DoD, GSA, and NASA
adopt the interim rule amending 48 CFR
parts 8, 19, 42, and 52, which was
published in the Federal Register at 69
FR 16148, March 26, 2004, and the
interim rule amending 48 CFR parts 8
and 25, which was published in the
Federal Register at 70 FR 18954, April
11, 2005, as a final rule with the
following changes:
■ 1. The authority citation for 48 CFR
parts 8, 19, 25, 42, and 52 continues to
read as follows:
■
PART 8—REQUIRED SOURCES OF
SUPPLIES AND SERVICES
2. Amend section 8.602 by—
a. Removing paragraph (a);
b. Redesignating paragraphs (b), (c),
(d), and (e) as (a), (b), (c), and (d)
respectively;
■ c. Revising the introductory text of the
newlydesignated paragraph (a);
■ d. Revising the newly designated
paragraph (b);
■ e. Removing from the newly
designated paragraph (c)(2) ‘‘paragraph
(b)’’ and adding ‘‘paragraph (a)’’ in its
place; and
■ f. Removing from the newly
designated paragraph (d) ‘‘paragraph
■
■
■
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Federal Register / Vol. 71, No. 1 / Tuesday, January 3, 2006 / Rules and Regulations
(b)(1)’’ and adding ‘‘paragraph (a)(1)’’ in
its place.
■ The revised text reads as follows:
[FAC 2005–07; FAR Case 2005–022; Item
VII]
Comment Date: Interested parties
should submit written comments to the
FAR Secretariat on or before March 6,
2006 to be considered in the
formulation of a final rule.
ADDRESSES: Submit comments
identified by FAC 2005–07, FAR case
2005–022, by any of the following
methods:
• Federal eRulemaking Portal: https://
www.regulations.gov. Follow the
instructions for submitting comments.
• Agency Web Site: https://
www.acqnet.gov/far/ProposedRules/
proposed.htm. Click on the FAR case
number to submit comments.
• E-mail: farcase.2005–022@gsa.gov.
Include FAC 2005–07, FAR case 2005–
022, in the subject line of the message.
• Fax: 202–501–4067.
• Mail: General Services
Administration, Regulatory Secretariat
(VIR), 1800 F Street, NW, Room 4035,
ATTN: Laurieann Duarte, Washington,
DC 20405.
Instructions: Please submit comments
only and cite FAC 2005–07, FAR case
2005–022, in all correspondence related
to this case. All comments received will
be posted without change to https://
www.acqnet.gov/far/ProposedRules/
proposed.htm, including any personal
and/or business confidential
information provided.
FOR FURTHER INFORMATION CONTACT: The
FAR Secretariat at (202) 501–4755, for
information pertaining to status or
publication schedules. For clarification
of content, contact Ms. Kimberly
Marshall, Procurement Analyst, at (202)
219–0986. Please cite FAC 2005–07,
FAR case 2005–022.
SUPPLEMENTARY INFORMATION:
RIN 9000–AK34
A. Background
Federal Acquisition Regulation;
Exception from Buy American Act for
Commercial Information Technology
This interim rule amends FAR 25.103
and FAR Subpart 25.11 to implement
Section 517 of Division H, Title V of the
Consolidated Appropriations Act, 2005
(Pub. L. 108–447). Section 517
authorizes exemption from the Buy
American Act for acquisitions of
information technology that are
commercial items. This applies only to
the use of FY 2005 funds.
This same exemption appeared last
year in section 535(a) of Division F,
Title V, Consolidated Appropriations
Act, 2004 (Pub. L. 108–199). The FY 04
exemption was implemented through
deviations by the individual agencies.
The interim rule is based on the
estimation that the exemption of
commercial information technology is
likely to continue. If the exception does
not appear in a future appropriations
act, a prompt change to the FAR will be
made to limit applicability of the
8.602
Policy.
(a) In accordance with 10 U.S.C.
2410n and Section 637 of Division H of
the Consolidated Appropriations Act,
2005 (Pub. L. 108–447), and except as
provided in paragraph (b) of this
section, agencies shall—
*
*
*
*
*
(b) The procedures in paragraph (a) of
this section do not apply if an exception
in 8.605(b) through (g) applies.
*
*
*
*
*
8.605
[Amended]
3. Amend section 8.605 by removing
from paragraph (a)(2) ‘‘8.602(b)(4)’’ and
adding ‘‘8.602(a)(4)’’ in its place.
■
PART 19—SMALL BUSINESS
PROGRAMS
19.504
[Amended]
4. Amend section 19.504 by removing
‘‘8.602(b)(4)’’ and adding ‘‘8.602(a)(4)’’ in
its place.
■
[FR Doc. 05–24551 Filed 12–30–05; 8:45 am]
BILLING CODE 6820–EP–S
DEPARTMENT OF DEFENSE
GENERAL SERVICES
ADMINISTRATION
NATIONAL AERONAUTICS AND
SPACE ADMINISTRATION
48 CFR Part 25
Department of Defense (DoD),
General Services Administration (GSA),
and National Aeronautics and Space
Administration (NASA).
ACTION: Interim rule with request for
comments.
rmajette on DSK29S0YB1PROD with RULES6
AGENCIES:
SUMMARY: The Civilian Agency
Acquisition Council and the Defense
Acquisition Regulations Council
(Councils) have agreed on an interim
rule to implement Section 517 of
Division H, Title V of the Consolidated
Appropriations Act, 2005 (Pub. L. 108–
447). Section 517 authorizes exemption
from the Buy American Act for
acquisitions of information technology
that are commercial items.
DATES: Effective Date: January 3, 2006.
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223
exemption to the fiscal years to which
it applies.
The effect of this exemption is that
the following clauses are no longer
applicable in acquisition of commercial
information technology:
• FAR 52.225–1, Buy American Act—
Supplies.
• FAR 52.225–2, Buy American Act
Certificate.
• FAR 52.225–3, Buy American Act—
Free Trade Agreements—Israeli Trade
Act.
• FAR 52.225–4, Buy American Act—
Free Trade Agreements—Israeli Trade
Act Certificate.
This is because the Buy American Act
no longer applies; and the Free Trade
Agreement non-discriminatory
provisions are no longer necessary,
since all products now are treated
without the restrictions of the Buy
American Act.
The Trade Agreements provision and
clause at FAR 52.225–5 and FAR
52.225–6 are still necessary when the
Trade Agreements Act applies
(acquisitions above $175,000). The
Trade Agreements provision and clause
already waive applicability of the Buy
American Act for eligible products, and
are needed to implement the restrictions
on procurement of noneligible end
products. Section 535 and subsequent
similar sections waived only the Buy
American Act, not all restrictions on the
purchase of foreign information
technology.
‘‘Information technology’’ and
‘‘Commercial item’’ are already defined
in FAR Part 2.
This is not a significant regulatory
action and, therefore, was not subject to
review under Section 6(b) of Executive
Order 12866, Regulatory Planning and
Review, dated September 30, 1993. This
rule is not a major rule under 5 U.S.C.
804.
B. Regulatory Flexibility Act
The changes may have a significant
economic impact on a substantial
number of small entities within the
meaning of the Regulatory Flexibility
Act, 5 U.S.C. 601 et seq., because the
rule increases the exceptions to the Buy
American Act to include the
acquisitions of information technology
that are commercial items. An Initial
Regulatory Flexibility Analysis (IRFA)
has been prepared and is summarized as
follows:
The objective of the interim rule is to add
the exemption to the Buy American Act for
acquisitions of commercial information
technology. As a result of the additional
exception, the Buy American Act will no
longer apply to those acquisitions and the
Free Trade Agreement non-discriminatory
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]]>Agencies
[Federal Register Volume 71, Number 1 (Tuesday, January 3, 2006)]
[Rules and Regulations]
[Pages 221-223]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-24551]
-----------------------------------------------------------------------
DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 8, 19, 25, 42, and 52
[FAC 2005-07; FAR Case 2003-023; Item VI]
RIN 9000-AJ91
Federal Acquisition Regulation; Purchases From Federal Prison
Industries--Requirement for Market Research
AGENCIES: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Civilian Agency Acquisition Council and the Defense
Acquisition Regulations Council (Councils) have agreed on a final rule
amending the Federal Acquisition Regulation (FAR) to implement Section
637 of Division H of the Consolidated Appropriations Act, 2005. Section
637 provides that no funds made available under the Consolidated
Appropriations Act for fiscal year 2005, or under any other Act for
fiscal year 2005 and each fiscal year thereafter, shall be expended for
purchase of a product or service offered by Federal Prison Industries,
Inc., unless the agency making the purchase determines that the offered
product or service provides the best value to the buying agency.
DATES: Effective Date: January 3, 2006.
FOR FURTHER INFORMATION CONTACT: For clarification of content, contact
Ms. Linda Nelson, Procurement Analyst, at (202) 501-1900. The TTY
Federal Relay Number for further information is 1-800-877-8973. Please
cite FAC 2005-07, FAR case 2003-023. For information pertaining to
status or publication schedules, contact the FAR Secretariat at (202)
501-4755.
SUPPLEMENTARY INFORMATION:
A. Background
Section 637 of Division H of the Consolidated Appropriations Act,
2005 (Public Law 108-447) provides that none of the funds made
available under that or any other Act for fiscal year 2005 and each
fiscal year thereafter shall be expended for the purchase of a product
or service offered by Federal Prison Industries, Inc. (FPI), unless the
agency making the purchase determines that the offered product or
service provides the best value to the buying agency pursuant to
Governmentwide procurement regulations issued pursuant to 41 U.S.C.
421(c)(1) that impose procedures, standards, and limitations of 10
U.S.C. 2410n. Section 637 of Division F of the Consolidated
Appropriations Act, 2004 (Public Law 108-199), contained a similar
requirement that applied only to fiscal year 2004 funds.
DoD, GSA, and NASA published an interim rule in the Federal
Register at 70 FR 18954, April 11, 2005, with a request for comments.
Five respondents submitted comments. A discussion of the comments is
provided below. As a result of comment 1 below, the final rule contains
changes at FAR 8.602 to clarify that the requirements of the rule do
not apply to items for which FPI has eliminated its mandatory source
status.
1. Comment: In the preamble to the interim rule published on April
11, 2005, the response to Comment 3 states that, if an agency chooses
to make a purchase at or below $2,500 from FPI, the agency must first
conduct market research to comply with Section 637 of Public Law 108-
447. This is inconsistent with the statement under SUPPLEMENTARY
INFORMATION that FAR 8.602(b) (market research) does not apply to the
purchase of any service or item of supply that FPI has been authorized
by its Board of Directors to offer exclusively on a competitive (non-
mandatory) basis. Since the FPI Board of Directors has eliminated its
mandatory source status for purchases of $2,500 or less, it would
logically follow that purchases from FPI up to $2,500 should also be
exempt from market research requirements.
Councils' response: The Councils agree that the rule should provide
equal treatment for all items for which FPI has eliminated its
mandatory source status. The final rule amends FAR 8.602 to state that
its procedures do not apply to the ``non-mandatory'' items identified
in FAR 8.605(b)-(g). These items, therefore, will be acquired using the
policies and procedures otherwise specified in the FAR.
2. Comment: There appears to be confusion as to whether the
requirement for market research applies to services as well as supplies
provided by FPI. This confusion stems from the inclusion of FPI as a
mandatory source at FAR 8.002(a), which applies to both supplies and
services.
Councils' response: FPI is not a mandatory source for services and,
therefore, market research in accordance with FAR 8.602(b) is not
required for services, as indicated at FAR 8.602(c). This is consistent
with the order of
[[Page 222]]
priorities at FAR 8.002(a)(2), which places FPI on an equal footing
with commercial sources with regard to services. The policy at FAR
8.002(a)(1), which lists FPI as a mandatory source, applies only to
supplies.
3. Comment: There may be a need in the future to provide more
clarification of the definition of the term ``comparability'' and to
further emphasize that the competitive solicitation process must occur
after completion of the required comparability determination; and only
in cases where FPI is deemed to be not comparable. FPI is still seeing
instances where agencies are inappropriately combining comparability
determinations with competitive procedures.
Councils' response: Further clarification of these issues is
considered unnecessary at this time. However, as suggested by the
respondent, the Councils will re-evaluate the need for clarification in
the future if implementation problems persist.
4. Comment: While FAR 8.607 prohibits agencies from requiring a
contractor to use FPI as a subcontractor, this language cannot be
interpreted to circumvent an agency's obligation where a product made
by FPI could be used in a project if it is deemed to be comparable.
Regardless of whether the product is provided to the agency directly or
indirectly, the same comparability determination and competitive
procedures are required any time products offered for sale by FPI are
purchased by or for Government agencies.
Councils' response: Do not agree that the comparability
determination and competitive procedures of FAR 8.602(b) are required
any time products offered for sale by FPI are purchased for the
Government. 10 U.S.C. 2410n (e) specifically prohibits the Government
from requiring a contractor to use FPI as a subcontractor or supplier.
The rule is clear with regard to an agency's obligation when purchasing
FPI products directly. Purchasing items through a prime contractor
merely to circumvent the requirements of the rule clearly would be
inappropriate. Therefore, it is the responsibility of the acquiring
agency to ensure compliance with the requirements of the rule if the
acquisition involves items of supply on FPI's Schedule.
5. Comment: FPI should not be permitted to participate in small
business set-asides.
Councils' response: FPI may participate in small business set-
asides in only those situations where an FPI ``mandatory'' item has
been found to be non-comparable to private sector items and the
subsequent competition is limited to FPI and small business concerns.
This policy is actually intended to increase opportunities for small
business concerns since (1) prior to this policy, FPI was the sole
source provider of items that are now being acquired competitively; and
(2) given the current statutory requirement to include FPI in the
competition if an FPI item is determined to be non-comparable to
private sector items, the alternative to FPI's participation in a small
business set-aside would be an unrestricted (non-set-aside) competition
that includes FPI.
6. Comment: In FAR 8.601(e), remove ``and services'' from the
statement ``Agencies are encouraged to purchase FPI supplies and
services to the maximum extent practicable.'' FPI does not have
mandatory source status for services, nor has it ever been given the
statutory right to branch out into services.
Councils' response: The rule makes it clear that FPI is not a
mandatory source for services. The statement at 8.601(e) is consistent
with the policy previously included at FAR 8.602(b), which encouraged
agencies to use the facilities of FPI to the maximum extent practicable
in purchasing both supplies and services. This text was inadvertently
excluded from the revision to FAR Subpart 8.6 published at 69 FR 16147
on March 26, 2004, and was reinstated in the interim rule published on
April 11, 2005.
This is not a significant regulatory action and, therefore, was not
subject to review under Section 6(b) of Executive Order 12866,
Regulatory Planning and Review, dated September 30, 1993. This rule is
not a major rule under 5 U.S.C. 804.
B. Regulatory Flexibility Act
The Regulatory Flexibility Act, 5 U.S.C. 601, et seq., applies to
this final rule. The Councils prepared a Final Regulatory Flexibility
Analysis (FRFA), and it is summarized as follows:
The rule implements the Consolidated Appropriations Act, 2005,
Division H, Section 637 (Public Law No: 108-447). The Act imposes
the procedures, standards, and limitation of 10 U.S.C. 2410n on all
federal agencies. 10 U.S.C. 2410n requires market research before
purchasing a product listed in the Federal Prison Industries
catalog, to determine whether the FPI product is comparable to
products available from the private sector that best meet the
agency's needs in terms of price, quality, and time of delivery. If
the FPI product is not comparable, the agency must use competitive
procedures to acquire the product or must make an individual
purchase under a multiple award contract. In conducting such a
competition or making such a purchase, the agency must consider a
timely offer from FPI.
The rule is expected to benefit small business concerns that
offer products comparable to those listed in the FPI catalog, by
permitting those concerns to compete for federal contract awards.
However, the rule could also have a negative impact on those small
business concerns that supply goods or services to FPI.
Interested parties may obtain a copy of the FRFA from the FAR
Secretariat. The FAR Secretariat has submitted a copy of the FRFA to
the Chief Counsel for Advocacy of the Small Business Administration.
C. Paperwork Reduction Act
The Paperwork Reduction Act does not apply because the changes to
the FAR do not impose information collection requirements that require
the approval of the Office of Management and Budget under 44 U.S.C.
3501, et seq.
List of Subjects in 48 CFR Parts 8, 19, 25, 42, and 52
Government procurement.
Dated: December 22, 2005.
Gerald Zaffos,
Director, Contract Policy Division.
0
Interim Rule Adopted as Final with Changes
0
Accordingly, DoD, GSA, and NASA adopt the interim rule amending 48 CFR
parts 8, 19, 42, and 52, which was published in the Federal Register at
69 FR 16148, March 26, 2004, and the interim rule amending 48 CFR parts
8 and 25, which was published in the Federal Register at 70 FR 18954,
April 11, 2005, as a final rule with the following changes:
0
1. The authority citation for 48 CFR parts 8, 19, 25, 42, 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 8--REQUIRED SOURCES OF SUPPLIES AND SERVICES
0
2. Amend section 8.602 by--
0
a. Removing paragraph (a);
0
b. Redesignating paragraphs (b), (c), (d), and (e) as (a), (b), (c),
and (d) respectively;
0
c. Revising the introductory text of the newlydesignated paragraph (a);
0
d. Revising the newly designated paragraph (b);
0
e. Removing from the newly designated paragraph (c)(2) ``paragraph
(b)'' and adding ``paragraph (a)'' in its place; and
0
f. Removing from the newly designated paragraph (d) ``paragraph
[[Page 223]]
(b)(1)'' and adding ``paragraph (a)(1)'' in its place.
0
The revised text reads as follows:
8.602 Policy.
(a) In accordance with 10 U.S.C. 2410n and Section 637 of Division
H of the Consolidated Appropriations Act, 2005 (Pub. L. 108-447), and
except as provided in paragraph (b) of this section, agencies shall--
* * * * *
(b) The procedures in paragraph (a) of this section do not apply if
an exception in 8.605(b) through (g) applies.
* * * * *
8.605 [Amended]
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3. Amend section 8.605 by removing from paragraph (a)(2)
``8.602(b)(4)'' and adding ``8.602(a)(4)'' in its place.
PART 19--SMALL BUSINESS PROGRAMS
19.504 [Amended]
0
4. Amend section 19.504 by removing ``8.602(b)(4)'' and adding
``8.602(a)(4)'' in its place.
[FR Doc. 05-24551 Filed 12-30-05; 8:45 am]
BILLING CODE 6820-EP-S
