Federal Acquisition Regulation; FAR Case 2004-032, Biobased Products Preference Program, 63040-63045 [07-5478]

Download as PDF 63040 Federal Register / Vol. 72, No. 215 / Wednesday, November 7, 2007 / Rules and Regulations conditions based on lack of SAFETY Act designation (or certification); or (ii) At the sole option of the Government, terminate this contract for the convenience of the Government in place of an equitable adjustment. (3) A failure of the parties to agree on the equitable adjustment will be considered to be a dispute in accordance with the ‘‘Disputes’’ clause of this contract. (4) Unless first terminated, the Contractor shall continue contract performance during establishment of any equitable adjustment. (End of clause) [FR Doc. 07–5477 Filed 11–6–07; 8:45 am] BILLING CODE 6820–EP–S DEPARTMENT OF DEFENSE GENERAL SERVICES ADMINISTRATION NATIONAL AERONAUTICS AND SPACE ADMINISTRATION 48 CFR Parts 2, 4, 7, 11, 12, 13, 23, 42, 45, and 52 [FAC 2005–21; FAR Case 2004–032; Item II; Docket 2006–020; Sequence 13] RIN 9000–AK65 Federal Acquisition Regulation; FAR Case 2004–032, Biobased Products Preference Program Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA). ACTION: Final rule. AGENCIES: 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 7 U.S.C. 8102, as enacted by section 9002 of the Farm Security and Rural Investment Act of 2002 (FSRIA) (Pub. L. 107–171), and amended by sections 205 and 943 of the Energy Policy Act of 2005 (Pub. L. 109– 58). Entitled ‘‘Federal Procurement of Biobased Products,’’ 7 U.S.C. 8102 requires that a procurement preference be afforded biobased products within items designated by the Secretary of Agriculture. Effective Date: December 7, 2007. Mr. William Clark, Procurement Analyst, at (202) 219–1813 for clarification of content. For information pertaining to status or publication schedules, contact the FAR Secretariat at (202) 501–4755. mstockstill on PROD1PC66 with RULES3 DATES: FOR FURTHER INFORMATION CONTACT: VerDate Aug<31>2005 18:14 Nov 06, 2007 Jkt 214001 Please cite FAC 2005–21, FAR case 2004–032. SUPPLEMENTARY INFORMATION: A. Background The United States Department of Agriculture (USDA) published regulations at 7 CFR 2902: 70 FR 1792, January 11, 2005; 71 FR 13686, March 16, 2006; 71 FR 42572, July 27, 2006; and 71 FR 67031, November 20, 2006. DoD, GSA, and NASA published a proposed rule in the Federal Register at 71 FR 77360, December 26, 2006. The comment period closed on February 26, 2007. Six respondents submitted comments on the proposed rule. The comments are available at http:// www.regulations.gov. A discussion of the comments and the changes made to the rule are provided below. Public Comments Provide coverage for products that use biobased products. Comment: One respondent recommends that the FAR should include a preference for products that use biobased products. The example proffered was diesel engine generator sets that perform with biobased fuels. Response: Extending coverage as suggested would exceed the congressional mandate, codified at 7 U.S.C. 8102, to procure designated biobased items. The comment is therefore beyond the scope of this case. It applies to the scope of the biobased product program, which was established by Congress. Interface between the proposed contract clause and the order of precedence clause. Comment: One respondent expresses concern with the interface between the contract clause and the order of precedence clause (FAR 52.215–8). The subject proposed rule includes a requirement to use a contract clause, specifically FAR 52.223–XX (now FAR 52.223–2), to make maximum use of biobased products in contracts for services, rather than the normal needs analysis and specification process embodied in Part 11, Describing Agency Needs. The subject clause is proposed to go into all service contracts (as well as construction), unless the contract will not involve the use of USDA-designated items. The respondent believes this unusual approach to describing contractual requirements is inappropriate in contracts for services because it creates a potential ambiguity. The respondent is concerned that in the order of precedence clause, contract clauses take precedence over specifications. As stated by the respondent, ‘‘It is not clear that the PO 00000 Frm 00016 Fmt 4701 Sfmt 4700 exemption in the clause regarding ‘meeting contract performance requirements’ in paragraph (a)(2) applies to named products such as those on qualified product lists (QPLs), because of the order of precedence clause, 52.215–8, that already goes into all negotiated contracts. ’’ The respondent is concerned that, according to this rule of interpretation, the clause requirement to use a designated biobased hydraulic fluid or lubricant, for example, might be required over a QPL or other contractually specified product. This is a matter of concern to the respondent when acquiring services in support of complex systems, engineering services, and other contracts for services when multi-tiered subcontracting is involved. The respondent suggests two alternatives— • Include the requirement for biobased products in FAR Part 11 rather than in a contract clause; or • Exempt products on QPLs. Response: Review of the proposed contract clause and FAR 52.215–8 reveals that the two clauses can be harmonized in a manner that furthers the Congressional objective when read together. In accordance with the proposed contract clause and the provisions of 7 U.S.C. 8102, any entity contracting with any Federal agency is required to use designated biobased items (absent one of the statutory exemptions) in performance of the contract. As mandated in 7 U.S.C. 8102(d), Federal agencies have one year after designation of a product to modify specifications which they have the responsibility for drafting or reviewing, in order to ensure that such specifications require the use of biobased products unless an exemption applies. The proposed alternatives are addressed as follows: • Put the requirement in Part 11. Regardless of where the requirement is incorporated into the FAR, the requirement must be incorporated into the contract to bind a contractor. The statute mandates: ‘‘Except as provided in subsection (c), each procuring agency shall comply with the requirements set forth in this section and any regulations issued under this section…’’ (7 U.S.C. 8102(a)). ‘‘Procuring agency’’ is defined in 7 U.S.C. 8101(4) as— —Any Federal agency that is using Federal funds for procurement; or —Any person contracting with any Federal agency with respect to work performed under the contract. To implement 7 U.S.C. 8102, a contract clause is required. Absent a contract clause, the contractor is not bound to follow the mandates of 7 E:\FR\FM\07NOR3.SGM 07NOR3 mstockstill on PROD1PC66 with RULES3 Federal Register / Vol. 72, No. 215 / Wednesday, November 7, 2007 / Rules and Regulations U.S.C. 8102. For a performance-based contract, there may be no specifications. • Exemption for Products on QPLs. The exemptions are listed in the proposed and final rules at FAR 23.404(b), 23.405(b), and in the clause at 52.223–2(a). There is an exemption that covers situations in which the product fails to meet performance requirements. If there is a qualification requirement applicable to an acquisition, it will be unknown whether a product meets performance requirements until it has been evaluated for addition to the QPL. Either the product will meet the requirements and be added to the QPL, or the product will not meet the requirements, and need not be purchased. In any case, the QPL will control until the product is tested. Federal agencies should, however, expedite the qualification process. Congress has directed Federal agencies to revise specifications which they are responsible for drafting or reviewing within one year after the date of publication of the guidelines on designated products. Therefore, such exclusion for all products on QPLs would be inconsistent with 7 U.S.C. 8102(d). Include a categorical exemption for spacecraft or combat systems in the clause. Comment: One respondent expressed concern that ‘‘…fabricators and operators working under large mission support services contracts, especially at the component subcontract level, might not be aware that spacecraft are exempt from some biobased requirements unless that specific exception is added to paragraph (a) of the clause$.’’ Response: The USDA designation of some items (e.g., mobile equipment hydraulic fluids, diesel fuel additives, and penetrating lubricants, see 7 CFR 2902.10 et seq.) provides exemption from the preferred procurement requirement for the application of the designated item to one or both of the following: (i) Spacecraft system and launch support equipment. (ii) Military equipment: Product or system designed or procured for combat or combat-related missions. These exemptions were initiated in response to public comments on the USDA proposed rule designating the first 6 biobased items for Federal procurement (70 FR 38612, July 5, 2005 and 71 FR 13685, March 16, 2006). USDA believed that the situations described were of sufficient concern that it was appropriate to provide specific exemptions for certain designated items when used in military equipment in combat or combat-related VerDate Aug<31>2005 18:14 Nov 06, 2007 Jkt 214001 missions and spacecraft and their launch support equipment where failures could have catastrophic consequences. The Councils have included these exemptions with the other exemptions at FAR 23.404(b) and in the clause at FAR 52.223–2, because these exemptions may impact more than just one agency. The clause prescription has not been modified, because an exemption may apply to one USDAdesignated item to be used in the performance of the contract, but not other USDA-designated items, or even the same item with a different application. Inconsistent with performance-based service contracting policy. Comment: One respondent comments that the proposed contract clause approach is unnecessary and inconsistent with performance-based service contracting policy. Response: Requiring a preference for biobased products does not impinge upon a contractor’s discretion of determining work processes. Rather, once a contractor delineates a process, the contract clause only requires that if the process selected by the contractor involves the use of USDA-designated products, the contractor shall use biobased products, absent an applicable exception. The contractor may select another process that does not involve the use of any USDA-designated products. Limit the use of the clause to contracts for commercial services with an estimated value in excess of $100,000. Comment: One respondent recommends that the purpose of the new clause can still be achieved if the prescription were not as inclusive. Having a narrower prescription would balance the needs of USDA with the requirements of the rest of the procurement community. The respondent recommends limiting the use of the clause to contracts for commercial type services with an estimated value above $100,000. Response: Such action would be inconsistent with 7 U.S.C. 8102(a). That statutory provision requires compliance where the purchase price of the item exceeds $10,000 or ‘‘where the quantity of such items or of functionally equivalent items purchased or acquired in the course of the preceding fiscal year was $10,000 or more.’’ Delete coverage for micro-purchases. Comment: One respondent suggests deletion of coverage for micro-purchases at FAR 13.201(f). Justification for this recommendation is to enhance the simplicity of awarding micro-purchases, PO 00000 Frm 00017 Fmt 4701 Sfmt 4700 63041 reduce the burden on agencies for training individuals executing such purchases, and the decreased time for processing associated paperwork. Response: The requirements of 7 U.S.C. 8102 are specifically applicable to any purchase once the statutory threshold has been met (i.e., the quantity of such items purchased by the agency the preceding year was $10,000 or more). Continue to meet contract performance requirements. Comment: One respondent suggests a change to proposed FAR clause 52.223– XX (now 52.223–2). The respondent suggests that (a)(2) of the proposed clause be changed from ‘‘meeting contract performance requirements; or’’ to ‘‘and continue to meet contract performance requirements; or.’’ Response: Absent a change in specification, a product that meets contract specifications at time of award will continue to meet such specifications subsequent to contract award. Therefore, no change to the proposed clause is required. Include the certification in ORCA. Comment: Include the certification in Online Representations and Certifications Application (ORCA). Response: The Councils agree with this comment and have added the FAR clause 52.223–1 to the list of clauses at FAR 4.1202. Objection to requirement for minimum biobased contents for lubricants. Comment: One respondent objects ‘‘to the USDA’s proposal requiring minimum biobased contents in order for lubricants to qualify for Federal agency procurement preference.’’ A variety of reasons are provided, including cost and performance. Response: With respect to the comments involving cost or performance, Federal agencies are not required to procure such products if the product cannot be procured at a reasonable price or it does not meet requirements. The remaining comments relating to USDA’s designation of products are beyond the scope of this case and need to be directed to the USDA. Project officers will need to be trained. Comment: One respondent comments that contracting officer technical representatives (project officers) will need to be trained. Response: Program training will need to be conducted on an individual Federal agency basis, since preference programs are Federal agency specific. Therefore, training is most appropriately E:\FR\FM\07NOR3.SGM 07NOR3 mstockstill on PROD1PC66 with RULES3 63042 Federal Register / Vol. 72, No. 215 / Wednesday, November 7, 2007 / Rules and Regulations addressed in conjunction with each Federal agency’s procurement program. Life-cycle cost information will be prohibitive for small businesses. Comment: One respondent states that Life-cycle cost information will be prohibitive for many small businesses and should not be routinely requested from vendors since price, availability and functionality are generally the most important factors in most acquisition. Response: The rule does not require routine collection of this data from vendors. It is permissive (‘‘may request’’), and is necessary to implement 7 CFR 2902.8, which requires that manufacturers and vendors must provide information on life cycle costs and environmental and health benefit tests, when requested by Federal agencies. Need for Budget Object Code. Comment: The respondent also comments that it will be difficult for agencies to capture data regarding affected procurements and a Budget Object Code is needed. Response:This comment is outside the scope of this case. Other Revisions to the Proposed Rule. • Definitions. The proposed rule cited the statutory definition of ‘‘Biobased product’’ (7 U.S.C. 8101(2)), however, the definition conflicts with the intent of the rule that biobased products from certain designated countries must be treated by procuring agencies as eligible for the procurement preference under FSRIA. The revised definition deletes the statutory reference and encompasses biobased products composed of renewable agricultural materials or forestry materials from ‘‘designated countries,’’ as defined in FAR 25.003. Therefore, provided that those products otherwise meet all requirements for participation in the preference program, they will be entitled to receive the procurement preference. • Certification. The Councils concluded that the certification in the proposed rule was unnecessarily burdensome, requiring submission of a separate signed certification. This certification was erroneously patterned after FAR clause 52.223–9, Estimate of Recovered Material Content for EPADesignated Products, Alternate I, which is a requirement for a certification at the end of the contract performance. The more appropriate model is the preaward Recovered Material Certification at FAR 52.223–4, in which the offeror provides certification by signing the offer. In this way, the estimated paperwork burden associated with the proposed rule is eliminated. In addition, the wording ‘‘other than biobased products that are not purchased by the VerDate Aug<31>2005 18:14 Nov 06, 2007 Jkt 214001 offeror as a direct result of this contract’’ has been included in the certification to implement 7 CFR 2902.3(c), as amended by the USDA interim final rule of 71 FR 42572, July 27, 2006, which clarified the USDA intent to exclude from the preferred procurement program biobased products that are merely incidental to Federal funding. This clarification was necessary after the definition of ‘‘procuring agency’’ was expanded to include contractors. • Duplication of exemptions. The proposed rule duplicated the statement of exemptions at FAR 23.404(b) and 23.405(b). The Councils provide a crossreference at FAR 23.405(b) to 23.404(b), rather than a restatement of the exemptions. • Title of 52.223–9. The Councils corrected the title of FAR 52.223–9 in the clause prescription at FAR 23.406(d) in the final rule. 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 Department of Defense, the General Services Administration, and the National Aeronautics and Space Administration certify that this final rule will not 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 it implements in the FAR the USDA rule at 7 CFR Part 2902. Furthermore, USDA has certified that its designation of biobased items will not have a significant economic impact on a substantial number of small entities (71 FR 13685 at 13704, March 16, 2006). In support of this certification, USDA stated in the Federal Register that it anticipates that this program will affect entities, both large and small, that manufacture or sell biobased products. For example, the designation of items for preferred procurement will provide additional opportunities for businesses to manufacture and sell biobased products to Federal agencies and their contractors. Similar opportunities will be provided for entities that supply biobased materials to manufacturers. Conversely, the biobased procurement program may decrease opportunities for businesses that manufacture or sell nonbiobased products or provide components for the manufacturing of such products. However, this rule will not affect existing purchase orders and it will not preclude procuring agencies PO 00000 Frm 00018 Fmt 4701 Sfmt 4700 from continuing to purchase nonbiobased items under certain conditions relating to the availability, performance, or cost of biobased items. This rule will also not preclude businesses from modifying their product lines to meet new specifications or solicitation requirements for these products containing biobased materials. Because biobased products represent a small emerging market, only a small percentage of all manufacturers, large or small, are expected to develop and market biobased products. Thus, the number of small businesses affected is not expected to be substantial. The only comment received with regard to impact of the proposed rule on small business is addressed in the response to public comments. 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. The estimated burden of 18,000 hours per year associated with the proposed rule provision at FAR 52.223– 1, has been eliminated in the final rule. List of Subjects in 48 CFR Parts 2, 4, 7, 11, 12, 13, 23, 42, 45, and 52 Government procurement. Dated: October 31, 2007. Al Matera, Director, Office of Acquisition Policy. Therefore, DoD, GSA, and NASA amend 48 CFR parts 2, 4, 7, 11, 12, 13, 23, 42, 45, and 52 as set forth below: I 1. The authority citation for 48 CFR parts 2, 4, 7, 11, 12, 13, 23, 42, 45, and 52 continues to read as follows: I Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 42 U.S.C. 2473(c). PART 2—DEFINITIONS OF WORDS AND TERMS 2. Amend section 2.101 in paragraph (b)(2) by adding, in alphabetical order, the definition ‘‘Biobased product’’ to read as follows: I 2.101 Definitions. * * * * * (b) * * * (2) * * * Biobased product means a product determined by the U.S. Department of Agriculture to be a commercial or industrial product (other than food or feed) that is composed, in whole or in significant part, of biological products, including renewable domestic agricultural materials (including plant, E:\FR\FM\07NOR3.SGM 07NOR3 Federal Register / Vol. 72, No. 215 / Wednesday, November 7, 2007 / Rules and Regulations animal, and marine materials) or forestry materials. * * * * * PART 4—ADMINISTRATIVE MATTERS 3. Amend section 4.1202 by redesignating paragraphs (r) through (z) as (s) through (aa) respectively, and adding a new paragraph (r) to read as follows: I (ii) Describing Government requirements for products and services; and (iii) Developing source-selection factors. * * * * * PART 23—ENVIRONMENT, ENERGY AND WATER EFFICIENCY, RENEWABLE ENERGY TECHNOLOGIES, OCCUPATIONAL SAFETY, AND DRUG-FREE WORKPLACE 11.101 I [Amended] 4.1202 Solicitation provision and contract clause. 6. Amend section 11.101 by removing paragraph (b) and redesignating paragraph (c) as (b). I 7. Amend section 11.302 by revising paragraph (c) to read as follows: * 11.302 * * * * (r) 52.223–1, Biobased Product Certification. * * * * * 4. Amend section 7.103 by revising paragraph (n)(2) to read as follows: I 7.103 Agency-head responsibilities. * * * * * (n) * * * (2) Comply with the policy in 11.002(d) regarding procurement of biobased products, products containing recovered materials, and environmentally preferable and energyefficient products and services. * * * * * PART 11—DESCRIBING AGENCY NEEDS 5. Amend section 11.002 by revising paragraph (d) to read as follows: I 11.002 mstockstill on PROD1PC66 with RULES3 * * * * (d)(1) When agencies acquire products and services, various statutes and executive orders (identified in Part 23) require consideration of— (i) Energy-efficient products and services (Subpart 23.2); (ii) Products and services that utilize renewable energy technologies (Subpart 23.2); (iii) Products containing energyefficient standby power devices (Subpart 23.2); (iv) Products containing recovered materials (Subpart 23.4); (v) Biobased products (Subpart 23.4); and (vi) Environmentally preferable products and services (Subpart 23.7). (2) Executive agencies shall consider maximum practicable use of products and services listed in paragraph (d)(1) of this section when— (i) Developing, reviewing, or revising Federal and military specifications, product descriptions (including commercial item descriptions) and standards; VerDate Aug<31>2005 18:14 Nov 06, 2007 Jkt 214001 Policy. * * * * (c)(1) When the contracting officer needs additional information to determine whether supplies meet minimum recovered material or biobased standards stated in the solicitation, the contracting officer may require offerors to submit additional information on the recycled or biobased content or related standards. The request for the information must be included in the solicitation. When acquiring commercial items, limit the information to the maximum extent practicable to that available under normal commercial practices. (2) For biobased products, the contracting officer may require vendors to provide information on life cycle costs and environmental and health benefits in accordance with 7 CFR 2902.8. PART 12—ACQUISITION OF COMMERCIAL ITEMS Policy. * I * PART 7—ACQUISITION PLANNING 63043 8. Amend section 12.301 by revising paragraph (e)(3) to read as follows: I 12.301 Solicitation provisions and contract clauses for the acquisition of commercial items. * * * * * (e) * * * (3) The contracting officer may use the provisions and clauses contained in Part 23 regarding the use of recovered material and biobased products when appropriate for the item being acquired. * * * * * PART 13—SIMPLIFIED ACQUISITION PROCEDURES 9. Amend section 13.201 by revising paragraph (f) to read as follows: I 13.201 General. * * * * * (f) The procurement requirements in Subparts 23.2, 23.4, and 23.7 apply to purchases at or below the micropurchase threshold. * * * * * PO 00000 Frm 00019 Fmt 4701 Sfmt 4700 10. Amend section 23.000 by revising paragraph (d) to read as follows: 23.000 Scope. * * * * * (d) Acquiring energy-efficient and water-efficient products and services, environmentally preferable products, products that use recovered materials, and biobased products; and * * * * * I 11. Revise Subpart 23.4 to read as follows: Subpart 23.4—Use of Recovered Materials and Biobased Products Sec. 23.400 Scope of subpart. 23.401 Definitions. 23.402 Authorities. 23.403 Policy. 23.404 Agency affirmative procurement programs. 23.405 Procedures. 23.406 Solicitation provisions and contract clauses. 23.400 Scope of subpart. (a) The procedures in this subpart apply to all agency acquisitions of an Environmental Protection Agency (EPA) or United States Department of Agriculture (USDA)-designated item, if— (1) The price of the designated item exceeds $10,000; or (2) The aggregate amount paid for designated items, or for functionally equivalent designated items, in the preceding fiscal year was $10,000 or more. (b) While micro-purchases are included in determining the aggregate amount paid under paragraph (a)(2) of this section, it is not recommended that an agency track micro-purchases when— (1) The agency anticipates the aggregate amount paid will exceed $10,000; or (2) The agency intends to establish or continue an affirmative procurement program in the following fiscal year. 23.401 Definitions. As used in this subpart— (a) EPA-designated item means a product that is or can be made with recovered material— (1) That is listed by EPA in a procurement guideline (40 CFR part 247); and (2) For which EPA has provided purchasing recommendations in a E:\FR\FM\07NOR3.SGM 07NOR3 63044 Federal Register / Vol. 72, No. 215 / Wednesday, November 7, 2007 / Rules and Regulations related Recovered Materials Advisory Notice (RMAN). (b) USDA-designated item means a generic grouping of products that are or can be made with biobased materials— (1) That is listed by USDA in a procurement guideline (7 CFR part 2902, subpart B); and (2) For which USDA has provided purchasing recommendations. 23.402 Authorities. (a) The Resource Conservation and Recovery Act of 1976 (RCRA), 42 U.S.C. 6962. (b) The Farm Security and Rural Investment Act of 2002 (FSRIA), 7 U.S.C. 8102. (c) Executive Order 13101 of September 14, 1998, Greening the Government Through Waste Prevention, Recycling, and Federal Acquisition. (d) The Energy Policy Act of 2005, Public Law 109–58. 23.403 Policy. Government policy on the use of products containing recovered materials and biobased products considers cost, availability of competition, and performance. Agencies shall assure the use of products containing recovered materials and biobased products to the maximum extent practicable without jeopardizing the intended use of the product while maintaining a satisfactory level of competition at a reasonable price. Such products shall meet the reasonable performance standards of the agency and be acquired competitively, in a cost-effective manner. Except as provided at FAR 23.404(b), virgin material shall not be required by the solicitation (see 11.302). mstockstill on PROD1PC66 with RULES3 23.404 Agency affirmative procurement programs. (a) An agency must establish an affirmative procurement program for EPA and USDA-designated items if the agency’s purchases of designated items exceed the threshold set forth in 23.400. (1) Agencies have a period of 1 year to revise their procurement program(s) after the designation of any new item by EPA or USDA. (2) Technical or requirements personnel and procurement personnel are responsible for the preparation, implementation, and monitoring of affirmative procurement programs. (3) Agency affirmative procurement programs must include— (i) A recovered materials and biobased products preference program; (ii) An agency promotion program; (iii) For EPA-designated items only, a program for requiring reasonable estimates, certification, and verification VerDate Aug<31>2005 18:14 Nov 06, 2007 Jkt 214001 of recovered material used in the performance of contracts. Both the recovered material content and biobased programs require preaward certification that the products meet EPA or USDA recommendations. A second certification is required at contract completion for recovered material content; and (iv) Annual review and monitoring of the effectiveness of the program. (b) Exemptions. (1) Agency affirmative procurement programs must require that 100 percent of purchases of EPA or USDA-designated items contain recovered material or biobased content, respectively, unless the item cannot be acquired— (i) Competitively within a reasonable time frame; (ii) Meeting reasonable performance standards; or (iii) At a reasonable price. (2) EPA and USDA may provide categorical exemptions for items that they designate, when procured for a specific purpose. For example, some USDA-designated items such as mobile equipment hydraulic fluids, diesel fuel additives, and penetrating lubricants (see 7 CFR 2902.10 et seq.) are excluded from the preferred procurement requirement for the application of the USDA-designated item to one or both of the following: (i) Spacecraft system and launch support equipment. (ii) Military equipment, i.e., a product or system designed or procured for combat or combat-related missions. (c) Agency affirmative procurement programs must provide guidance for purchases of EPA-designated items at or below the micro-purchase threshold. (d) Agencies may use their own specifications or commercial product descriptions when procuring products containing recovered materials or biobased products. When using either, the contract should specify— (1) For products containing recovered materials, that the product is composed of the— (i) Highest percent of recovered materials practicable; or (ii) Minimum content standards in accordance with EPA’s Recovered Materials Advisory Notices; and (2) For biobased products, that the product is composed of— (i) The highest percentage of biobased material practicable; or (ii) USDA’s recommended minimum contents standards. (e) Agencies shall treat as eligible for the preference for biobased products, products from ‘‘designated countries,’’ as defined in 25.003, provided that those products— PO 00000 Frm 00020 Fmt 4701 Sfmt 4700 (1) Meet the criteria for the definition of biobased product, except that the products need not meet the requirement that renewable agricultural materials (including plant, animal, and marine materials) or forestry materials in such product must be domestic; and (2) Otherwise meet all requirements for participation in the preference program. 23.405 Procedures. (a) Designated items and procurement guidelines. (1) Recovered Materials. Contracting officers should refer to EPA’s list of EPA-designated items (available via the Internet at http://www.epa.gov/cpg/) and to their agencies’ affirmative procurement program when purchasing products that contain recovered material, or services that could include the use of products that contain recovered material. (2) Biobased products. Contracting officers should refer to USDA’s list of USDA-designated items (available through the Internet at http:// www.usda.gov/biopreferred) and to their agencies affirmative procurement program when purchasing supplies that contain biobased material or when purchasing services that could include supplies that contain biobased material. (b) Procurement exemptions. (1) Once an item has been designated by either EPA or USDA, agencies shall purchase conforming products unless an exemption applies (see 23.404(b)). (2) When an exemption is used for an EPA-designated item or the procurement of a product containing recovered material does not meet or exceed the EPA recovered material content guidelines, the contracting officer shall place a written justification in the contract file. (c) Program priorities. When both the USDA-designated item and the EPAdesignated item will be used for the same purposes, and both meet the agency’s needs, the agency shall purchase the EPA-designated item. 23.406 Solicitation provisions and contract clauses. (a) Insert the provision at 52.223–1, Biobased Product Certification, in solicitations that— (1) Require the delivery or specify the use of USDA-designated items; or (2) Include the clause at 52.223–2. (b) Insert the clause at 52.223–2, Affirmative Procurement of Biobased Products Under Service and Construction Contracts, in service or construction solicitations and contracts unless the contract will not involve the use of USDA-designated items at http:// E:\FR\FM\07NOR3.SGM 07NOR3 Federal Register / Vol. 72, No. 215 / Wednesday, November 7, 2007 / Rules and Regulations www.usda.gov/biopreferred or 7 CFR Part 2902. (c) Insert the provision at 52.223–4, Recovered Material Certification, in solicitations that are for, or specify the use of, EPA-designated items. (d) Insert the clause at 52.223–9, Estimate of Percentage of Recovered Material Content for EPA-Designated Products, in solicitations and contracts exceeding $100,000 that are for, or specify the use of, EPA-designated products containing recovered materials. If technical personnel advise that estimates can be verified, use the clause with its Alternate I. 23.701 [Removed] 12. Remove and reserve section 23.701. I 13. Amend section 23.702 by adding paragraph (g) to read as follows: I 23.702 Authorities. * * * * * (g) Farm Security and Rural Investment Act of 2002 (FSRIA) (7 U.S.C. 8102). I 14. Amend section 23.703 by revising paragraph (b)(7); and adding paragraph (b)(8) to read as follows: 23.703 Policy. * * * * * (b) * * * (7) Promote the use of biobased products. (8) Purchase only plastic ring carriers that are degradable (7 USC 8102(c)(1), 40 CFR part 238). PART 42—CONTRACT ADMINISTRATION AND AUDIT SERVICES 15. Amend section 42.302 by revising paragraph (a)(68)(ii) to read as follows: I 42.302 Contract administration functions. mstockstill on PROD1PC66 with RULES3 (a) * * * (68) * * * (ii) Monitoring contractor compliance with specifications or other contractual requirements requiring the delivery or use of environmentally preferable products, energy-efficient products, products containing recovered materials, and biobased products. This must occur as part of the quality assurance procedures set forth in Part 46; and * * * * * PART 45—GOVERNMENT PROPERTY 45.103 [Amended] 16. Amend section 45.103 by removing from paragraph (a)(1) ‘‘11.101(c)’’ and adding ‘‘11.101(b)’’ in its place. I VerDate Aug<31>2005 18:14 Nov 06, 2007 Jkt 214001 PART 52—SOLICITATION PROVISIONS AND CONTRACT CLAUSES 52.223–4 63045 [Amended] 17. Add sections 52.223–1 and 52.223–2 to read as follows: 18. Amend section 52.223–4 by removing from the prescription ‘‘23.406(a)’’ and adding ‘‘23.406(c)’’ in its place. 52.223–1 52.223–9 I Biobased Product Certification. As prescribed in 23.406(a), insert the following provision: BIOBASED PRODUCT CERTIFICATION [December 7, 2007] As required by the Farm Security and Rural Investment Act of 2002 and the Energy Policy Act of 2005 (7 U.S.C. 8102(c)(3)), the offeror certifies, by signing this offer, that biobased products (within categories of products listed by the United States Department of Agriculture in 7 CFR part 2902, subpart B) to be used or delivered in the performance of the contract, other than biobased products that are not purchased by the offeror as a direct result of this contract, will comply with the applicable specifications or other contractual requirements. (End of provision) 52.223–2 Affirmative Procurement of Biobased Products Under Service and Construction Contracts. As prescribed in 23.406(b), insert the following clause: AFFIRMATIVE PROCUREMENT OF BIOBASED PRODUCTS UNDER SERVICE AND CONSTRUCTION CONTRACTS [December 7, 2007] (a) In the performance of this contract, the contractor shall make maximum use of biobased products that are United States Department of Agriculture (USDA)-designated items unless— (1) The product cannot be acquired— (i) Competitively within a time frame providing for compliance with the contract performance schedule; (ii) Meeting contract performance requirements; or (iii) At a reasonable price. (2) The product is to be used in an application covered by a USDA categorical exemption (see 7 CFR 2902.10 et seq.). For example, some USDA-designated items such as mobile equipment hydraulic fluids, diesel fuel additives, and penetrating lubricants are excluded from the preferred procurement requirement for the application of the USDA-designated item to one or both of the following: (i) Spacecraft system and launch support equipment. (ii) Military equipment, i.e., a product or system designed or procured for combat or combat-related missions. (b) Information about this requirement and these products is available at http:// www.usda.gov/biopreferred. (End of clause) PO 00000 Frm 00021 Fmt 4701 Sfmt 4700 I [Amended] 19. Amend section 52.223–9 by removing from the prescription and Alternate I ‘‘23.406(b)’’ and adding ‘‘23.406(d)’’ respectively, in its place. I [FR Doc. 07–5478 Filed 11–6–07; 8:45 am] BILLING CODE 6820–EP–S DEPARTMENT OF DEFENSE GENERAL SERVICES ADMINISTRATION NATIONAL AERONAUTICS AND SPACE ADMINISTRATION 48 CFR Parts 2, 3, 12, 15, 18, 19, 27, 33, and 52 [FAC 2005–21; FAR Case 1999–402; Item III; Docket 2007–0001; Sequence 7] RIN 9000–AJ64 Federal Acquisition Regulation; FAR Case 1999–402, FAR Part 27 Rewrite in Plain Language Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA). ACTION: Final rule. AGENCIES: 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 clarify, streamline, and update text and clauses on Patents, Data, and Copyrights (FAR Part 27). DATES: Effective Date: December 7, 2007. FOR FURTHER INFORMATION CONTACT: Mr. Ernest Woodson, Procurement Analyst, at (202) 501–3775 for clarification of content. For information pertaining to status or publication schedules, contact the FAR Secretariat at (202) 501–4755. Please cite FAC 2005–21, FAR case 1999–402. SUPPLEMENTARY INFORMATION: A. Background This final rule is a ‘‘plain language’’ rewrite of FAR Part 27 and its associated clauses in Part 52. Part 27 implements a number of statutes and executive orders pertaining to patents, data, and copyrights. This effort focused on clarifying, streamlining, and updating the text, with the ultimate goal of making the policies and procedures E:\FR\FM\07NOR3.SGM 07NOR3

Agencies

[Federal Register Volume 72, Number 215 (Wednesday, November 7, 2007)]
[Rules and Regulations]
[Pages 63040-63045]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 07-5478]


-----------------------------------------------------------------------

DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 2, 4, 7, 11, 12, 13, 23, 42, 45, and 52

[FAC 2005-21; FAR Case 2004-032; Item II; Docket 2006-020; Sequence 13]
RIN 9000-AK65


Federal Acquisition Regulation; FAR Case 2004-032, Biobased 
Products Preference Program

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 7 U.S.C. 
8102, as enacted by section 9002 of the Farm Security and Rural 
Investment Act of 2002 (FSRIA) (Pub. L. 107-171), and amended by 
sections 205 and 943 of the Energy Policy Act of 2005 (Pub. L. 109-58). 
Entitled ``Federal Procurement of Biobased Products,'' 7 U.S.C. 8102 
requires that a procurement preference be afforded biobased products 
within items designated by the Secretary of Agriculture.

DATES: Effective Date: December 7, 2007.

FOR FURTHER INFORMATION CONTACT:  Mr. William Clark, Procurement 
Analyst, at (202) 219-1813 for clarification of content. For 
information pertaining to status or publication schedules, contact the 
FAR Secretariat at (202) 501-4755. Please cite FAC 2005-21, FAR case 
2004-032.

SUPPLEMENTARY INFORMATION:

A. Background

    The United States Department of Agriculture (USDA) published 
regulations at 7 CFR 2902: 70 FR 1792, January 11, 2005; 71 FR 13686, 
March 16, 2006; 71 FR 42572, July 27, 2006; and 71 FR 67031, November 
20, 2006.
    DoD, GSA, and NASA published a proposed rule in the Federal 
Register at 71 FR 77360, December 26, 2006. The comment period closed 
on February 26, 2007. Six respondents submitted comments on the 
proposed rule. The comments are available at http://
www.regulations.gov. A discussion of the comments and the changes made 
to the rule are provided below.

Public Comments

    Provide coverage for products that use biobased products.
    Comment: One respondent recommends that the FAR should include a 
preference for products that use biobased products. The example 
proffered was diesel engine generator sets that perform with biobased 
fuels.
    Response: Extending coverage as suggested would exceed the 
congressional mandate, codified at 7 U.S.C. 8102, to procure designated 
biobased items. The comment is therefore beyond the scope of this case. 
It applies to the scope of the biobased product program, which was 
established by Congress.
    Interface between the proposed contract clause and the order of 
precedence clause.
    Comment: One respondent expresses concern with the interface 
between the contract clause and the order of precedence clause (FAR 
52.215-8). The subject proposed rule includes a requirement to use a 
contract clause, specifically FAR 52.223-XX (now FAR 52.223-2), to make 
maximum use of biobased products in contracts for services, rather than 
the normal needs analysis and specification process embodied in Part 
11, Describing Agency Needs. The subject clause is proposed to go into 
all service contracts (as well as construction), unless the contract 
will not involve the use of USDA-designated items. The respondent 
believes this unusual approach to describing contractual requirements 
is inappropriate in contracts for services because it creates a 
potential ambiguity. The respondent is concerned that in the order of 
precedence clause, contract clauses take precedence over 
specifications. As stated by the respondent, ``It is not clear that the 
exemption in the clause regarding `meeting contract performance 
requirements' in paragraph (a)(2) applies to named products such as 
those on qualified product lists (QPLs), because of the order of 
precedence clause, 52.215-8, that already goes into all negotiated 
contracts. '' The respondent is concerned that, according to this rule 
of interpretation, the clause requirement to use a designated biobased 
hydraulic fluid or lubricant, for example, might be required over a QPL 
or other contractually specified product. This is a matter of concern 
to the respondent when acquiring services in support of complex 
systems, engineering services, and other contracts for services when 
multi-tiered subcontracting is involved.
    The respondent suggests two alternatives--
     Include the requirement for biobased products in FAR Part 
11 rather than in a contract clause; or
     Exempt products on QPLs.
    Response: Review of the proposed contract clause and FAR 52.215-8 
reveals that the two clauses can be harmonized in a manner that 
furthers the Congressional objective when read together. In accordance 
with the proposed contract clause and the provisions of 7 U.S.C. 8102, 
any entity contracting with any Federal agency is required to use 
designated biobased items (absent one of the statutory exemptions) in 
performance of the contract. As mandated in 7 U.S.C. 8102(d), Federal 
agencies have one year after designation of a product to modify 
specifications which they have the responsibility for drafting or 
reviewing, in order to ensure that such specifications require the use 
of biobased products unless an exemption applies. The proposed 
alternatives are addressed as follows:
     Put the requirement in Part 11. Regardless of where the 
requirement is incorporated into the FAR, the requirement must be 
incorporated into the contract to bind a contractor. The statute 
mandates: ``Except as provided in subsection (c), each procuring agency 
shall comply with the requirements set forth in this section and any 
regulations issued under this section[hellip]'' (7 U.S.C. 8102(a)). 
``Procuring agency'' is defined in 7 U.S.C. 8101(4) as--
    --Any Federal agency that is using Federal funds for procurement; 
or
    --Any person contracting with any Federal agency with respect to 
work performed under the contract.
    To implement 7 U.S.C. 8102, a contract clause is required. Absent a 
contract clause, the contractor is not bound to follow the mandates of 
7

[[Page 63041]]

U.S.C. 8102. For a performance-based contract, there may be no 
specifications.
     Exemption for Products on QPLs. The exemptions are listed 
in the proposed and final rules at FAR 23.404(b), 23.405(b), and in the 
clause at 52.223-2(a). There is an exemption that covers situations in 
which the product fails to meet performance requirements. If there is a 
qualification requirement applicable to an acquisition, it will be 
unknown whether a product meets performance requirements until it has 
been evaluated for addition to the QPL. Either the product will meet 
the requirements and be added to the QPL, or the product will not meet 
the requirements, and need not be purchased. In any case, the QPL will 
control until the product is tested. Federal agencies should, however, 
expedite the qualification process. Congress has directed Federal 
agencies to revise specifications which they are responsible for 
drafting or reviewing within one year after the date of publication of 
the guidelines on designated products. Therefore, such exclusion for 
all products on QPLs would be inconsistent with 7 U.S.C. 8102(d).
    Include a categorical exemption for spacecraft or combat systems in 
the clause.
    Comment: One respondent expressed concern that 
``[hellip]fabricators and operators working under large mission support 
services contracts, especially at the component subcontract level, 
might not be aware that spacecraft are exempt from some biobased 
requirements unless that specific exception is added to paragraph (a) 
of the clause[uml].''
    Response: The USDA designation of some items (e.g., mobile 
equipment hydraulic fluids, diesel fuel additives, and penetrating 
lubricants, see 7 CFR 2902.10 et seq.) provides exemption from the 
preferred procurement requirement for the application of the designated 
item to one or both of the following:
    (i) Spacecraft system and launch support equipment.
    (ii) Military equipment: Product or system designed or procured for 
combat or combat-related missions.
    These exemptions were initiated in response to public comments on 
the USDA proposed rule designating the first 6 biobased items for 
Federal procurement (70 FR 38612, July 5, 2005 and 71 FR 13685, March 
16, 2006). USDA believed that the situations described were of 
sufficient concern that it was appropriate to provide specific 
exemptions for certain designated items when used in military equipment 
in combat or combat-related missions and spacecraft and their launch 
support equipment where failures could have catastrophic consequences.
    The Councils have included these exemptions with the other 
exemptions at FAR 23.404(b) and in the clause at FAR 52.223-2, because 
these exemptions may impact more than just one agency. The clause 
prescription has not been modified, because an exemption may apply to 
one USDA-designated item to be used in the performance of the contract, 
but not other USDA-designated items, or even the same item with a 
different application.
    Inconsistent with performance-based service contracting policy.
    Comment: One respondent comments that the proposed contract clause 
approach is unnecessary and inconsistent with performance-based service 
contracting policy.
    Response: Requiring a preference for biobased products does not 
impinge upon a contractor's discretion of determining work processes. 
Rather, once a contractor delineates a process, the contract clause 
only requires that if the process selected by the contractor involves 
the use of USDA-designated products, the contractor shall use biobased 
products, absent an applicable exception. The contractor may select 
another process that does not involve the use of any USDA-designated 
products.
    Limit the use of the clause to contracts for commercial services 
with an estimated value in excess of $100,000.
    Comment: One respondent recommends that the purpose of the new 
clause can still be achieved if the prescription were not as inclusive. 
Having a narrower prescription would balance the needs of USDA with the 
requirements of the rest of the procurement community. The respondent 
recommends limiting the use of the clause to contracts for commercial 
type services with an estimated value above $100,000.
    Response: Such action would be inconsistent with 7 U.S.C. 8102(a). 
That statutory provision requires compliance where the purchase price 
of the item exceeds $10,000 or ``where the quantity of such items or of 
functionally equivalent items purchased or acquired in the course of 
the preceding fiscal year was $10,000 or more.''
    Delete coverage for micro-purchases.
    Comment: One respondent suggests deletion of coverage for micro-
purchases at FAR 13.201(f). Justification for this recommendation is to 
enhance the simplicity of awarding micro-purchases, reduce the burden 
on agencies for training individuals executing such purchases, and the 
decreased time for processing associated paperwork.
    Response: The requirements of 7 U.S.C. 8102 are specifically 
applicable to any purchase once the statutory threshold has been met 
(i.e., the quantity of such items purchased by the agency the preceding 
year was $10,000 or more).
    Continue to meet contract performance requirements.
    Comment: One respondent suggests a change to proposed FAR clause 
52.223-XX (now 52.223-2). The respondent suggests that (a)(2) of the 
proposed clause be changed from ``meeting contract performance 
requirements; or'' to ``and continue to meet contract performance 
requirements; or.''
    Response: Absent a change in specification, a product that meets 
contract specifications at time of award will continue to meet such 
specifications subsequent to contract award. Therefore, no change to 
the proposed clause is required.
    Include the certification in ORCA. 
    Comment: Include the certification in Online Representations and 
Certifications Application (ORCA).
    Response: The Councils agree with this comment and have added the 
FAR clause 52.223-1 to the list of clauses at FAR 4.1202.
    Objection to requirement for minimum biobased contents for 
lubricants.
    Comment: One respondent objects ``to the USDA's proposal requiring 
minimum biobased contents in order for lubricants to qualify for 
Federal agency procurement preference.'' A variety of reasons are 
provided, including cost and performance.
    Response: With respect to the comments involving cost or 
performance, Federal agencies are not required to procure such products 
if the product cannot be procured at a reasonable price or it does not 
meet requirements. The remaining comments relating to USDA's 
designation of products are beyond the scope of this case and need to 
be directed to the USDA.
    Project officers will need to be trained.
    Comment: One respondent comments that contracting officer technical 
representatives (project officers) will need to be trained.
    Response: Program training will need to be conducted on an 
individual Federal agency basis, since preference programs are Federal 
agency specific. Therefore, training is most appropriately

[[Page 63042]]

addressed in conjunction with each Federal agency's procurement 
program.
    Life-cycle cost information will be prohibitive for small 
businesses.
    Comment: One respondent states that Life-cycle cost information 
will be prohibitive for many small businesses and should not be 
routinely requested from vendors since price, availability and 
functionality are generally the most important factors in most 
acquisition.
    Response: The rule does not require routine collection of this data 
from vendors. It is permissive (``may request''), and is necessary to 
implement 7 CFR 2902.8, which requires that manufacturers and vendors 
must provide information on life cycle costs and environmental and 
health benefit tests, when requested by Federal agencies.
    Need for Budget Object Code.
    Comment: The respondent also comments that it will be difficult for 
agencies to capture data regarding affected procurements and a Budget 
Object Code is needed.
    Response:This comment is outside the scope of this case.
    Other Revisions to the Proposed Rule.
     Definitions. The proposed rule cited the statutory 
definition of ``Biobased product'' (7 U.S.C. 8101(2)), however, the 
definition conflicts with the intent of the rule that biobased products 
from certain designated countries must be treated by procuring agencies 
as eligible for the procurement preference under FSRIA. The revised 
definition deletes the statutory reference and encompasses biobased 
products composed of renewable agricultural materials or forestry 
materials from ``designated countries,'' as defined in FAR 25.003. 
Therefore, provided that those products otherwise meet all requirements 
for participation in the preference program, they will be entitled to 
receive the procurement preference.
     Certification. The Councils concluded that the 
certification in the proposed rule was unnecessarily burdensome, 
requiring submission of a separate signed certification. This 
certification was erroneously patterned after FAR clause 52.223-9, 
Estimate of Recovered Material Content for EPA-Designated Products, 
Alternate I, which is a requirement for a certification at the end of 
the contract performance. The more appropriate model is the pre-award 
Recovered Material Certification at FAR 52.223-4, in which the offeror 
provides certification by signing the offer. In this way, the estimated 
paperwork burden associated with the proposed rule is eliminated. In 
addition, the wording ``other than biobased products that are not 
purchased by the offeror as a direct result of this contract'' has been 
included in the certification to implement 7 CFR 2902.3(c), as amended 
by the USDA interim final rule of 71 FR 42572, July 27, 2006, which 
clarified the USDA intent to exclude from the preferred procurement 
program biobased products that are merely incidental to Federal 
funding. This clarification was necessary after the definition of 
``procuring agency'' was expanded to include contractors.
     Duplication of exemptions. The proposed rule duplicated 
the statement of exemptions at FAR 23.404(b) and 23.405(b). The 
Councils provide a cross-reference at FAR 23.405(b) to 23.404(b), 
rather than a restatement of the exemptions.
     Title of 52.223-9. The Councils corrected the title of FAR 
52.223-9 in the clause prescription at FAR 23.406(d) in the final rule.
    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 Department of Defense, the General Services Administration, and 
the National Aeronautics and Space Administration certify that this 
final rule will not 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 it implements in the 
FAR the USDA rule at 7 CFR Part 2902. Furthermore, USDA has certified 
that its designation of biobased items will not have a significant 
economic impact on a substantial number of small entities (71 FR 13685 
at 13704, March 16, 2006). In support of this certification, USDA 
stated in the Federal Register that it anticipates that this program 
will affect entities, both large and small, that manufacture or sell 
biobased products. For example, the designation of items for preferred 
procurement will provide additional opportunities for businesses to 
manufacture and sell biobased products to Federal agencies and their 
contractors. Similar opportunities will be provided for entities that 
supply biobased materials to manufacturers. Conversely, the biobased 
procurement program may decrease opportunities for businesses that 
manufacture or sell non-biobased products or provide components for the 
manufacturing of such products. However, this rule will not affect 
existing purchase orders and it will not preclude procuring agencies 
from continuing to purchase non-biobased items under certain conditions 
relating to the availability, performance, or cost of biobased items. 
This rule will also not preclude businesses from modifying their 
product lines to meet new specifications or solicitation requirements 
for these products containing biobased materials. Because biobased 
products represent a small emerging market, only a small percentage of 
all manufacturers, large or small, are expected to develop and market 
biobased products. Thus, the number of small businesses affected is not 
expected to be substantial. The only comment received with regard to 
impact of the proposed rule on small business is addressed in the 
response to public comments.

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. The estimated burden of 18,000 hours per year associated 
with the proposed rule provision at FAR 52.223-1, has been eliminated 
in the final rule.

List of Subjects in 48 CFR Parts 2, 4, 7, 11, 12, 13, 23, 42, 45, 
and 52

    Government procurement.

    Dated: October 31, 2007.
Al Matera,
Director, Office of Acquisition Policy.

0
Therefore, DoD, GSA, and NASA amend 48 CFR parts 2, 4, 7, 11, 12, 13, 
23, 42, 45, and 52 as set forth below:
0
1. The authority citation for 48 CFR parts 2, 4, 7, 11, 12, 13, 23, 42, 
45, 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 2--DEFINITIONS OF WORDS AND TERMS

0
2. Amend section 2.101 in paragraph (b)(2) by adding, in alphabetical 
order, the definition ``Biobased product'' to read as follows:


2.101  Definitions.

* * * * *
    (b) * * *
    (2) * * *
    Biobased product means a product determined by the U.S. Department 
of Agriculture to be a commercial or industrial product (other than 
food or feed) that is composed, in whole or in significant part, of 
biological products, including renewable domestic agricultural 
materials (including plant,

[[Page 63043]]

animal, and marine materials) or forestry materials.
* * * * *

PART 4--ADMINISTRATIVE MATTERS

0
3. Amend section 4.1202 by redesignating paragraphs (r) through (z) as 
(s) through (aa) respectively, and adding a new paragraph (r) to read 
as follows:


4.1202  Solicitation provision and contract clause.

* * * * *
    (r) 52.223-1, Biobased Product Certification.
* * * * *

PART 7--ACQUISITION PLANNING

0
4. Amend section 7.103 by revising paragraph (n)(2) to read as follows:


7.103  Agency-head responsibilities.

* * * * *
    (n) * * *
    (2) Comply with the policy in 11.002(d) regarding procurement of 
biobased products, products containing recovered materials, and 
environmentally preferable and energy-efficient products and services.
* * * * *

PART 11--DESCRIBING AGENCY NEEDS

0
5. Amend section 11.002 by revising paragraph (d) to read as follows:


11.002  Policy.

* * * * *
    (d)(1) When agencies acquire products and services, various 
statutes and executive orders (identified in Part 23) require 
consideration of--
    (i) Energy-efficient products and services (Subpart 23.2);
    (ii) Products and services that utilize renewable energy 
technologies (Subpart 23.2);
    (iii) Products containing energy-efficient standby power devices 
(Subpart 23.2);
    (iv) Products containing recovered materials (Subpart 23.4);
    (v) Biobased products (Subpart 23.4); and
    (vi) Environmentally preferable products and services (Subpart 
23.7).
    (2) Executive agencies shall consider maximum practicable use of 
products and services listed in paragraph (d)(1) of this section when--
    (i) Developing, reviewing, or revising Federal and military 
specifications, product descriptions (including commercial item 
descriptions) and standards;
    (ii) Describing Government requirements for products and services; 
and
    (iii) Developing source-selection factors.
* * * * *


11.101  [Amended]

0
6. Amend section 11.101 by removing paragraph (b) and redesignating 
paragraph (c) as (b).
0
7. Amend section 11.302 by revising paragraph (c) to read as follows:


11.302  Policy.

* * * * *
    (c)(1) When the contracting officer needs additional information to 
determine whether supplies meet minimum recovered material or biobased 
standards stated in the solicitation, the contracting officer may 
require offerors to submit additional information on the recycled or 
biobased content or related standards. The request for the information 
must be included in the solicitation. When acquiring commercial items, 
limit the information to the maximum extent practicable to that 
available under normal commercial practices.
    (2) For biobased products, the contracting officer may require 
vendors to provide information on life cycle costs and environmental 
and health benefits in accordance with 7 CFR 2902.8.

PART 12--ACQUISITION OF COMMERCIAL ITEMS

0
8. Amend section 12.301 by revising paragraph (e)(3) to read as 
follows:


12.301  Solicitation provisions and contract clauses for the 
acquisition of commercial items.

* * * * *
    (e) * * *
    (3) The contracting officer may use the provisions and clauses 
contained in Part 23 regarding the use of recovered material and 
biobased products when appropriate for the item being acquired.
* * * * *

PART 13--SIMPLIFIED ACQUISITION PROCEDURES

0
9. Amend section 13.201 by revising paragraph (f) to read as follows:


13.201  General.

* * * * *
    (f) The procurement requirements in Subparts 23.2, 23.4, and 23.7 
apply to purchases at or below the micro-purchase threshold.
* * * * *

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

0
10. Amend section 23.000 by revising paragraph (d) to read as follows:


23.000  Scope.

* * * * *
    (d) Acquiring energy-efficient and water-efficient products and 
services, environmentally preferable products, products that use 
recovered materials, and biobased products; and
* * * * *
0
11. Revise Subpart 23.4 to read as follows:

Subpart 23.4--Use of Recovered Materials and Biobased Products

Sec.
23.400 Scope of subpart.
23.401 Definitions.
23.402 Authorities.
23.403 Policy.
23.404 Agency affirmative procurement programs.
23.405 Procedures.
23.406 Solicitation provisions and contract clauses.


23.400  Scope of subpart.

    (a) The procedures in this subpart apply to all agency acquisitions 
of an Environmental Protection Agency (EPA) or United States Department 
of Agriculture (USDA)-designated item, if--
    (1) The price of the designated item exceeds $10,000; or
    (2) The aggregate amount paid for designated items, or for 
functionally equivalent designated items, in the preceding fiscal year 
was $10,000 or more.
    (b) While micro-purchases are included in determining the aggregate 
amount paid under paragraph (a)(2) of this section, it is not 
recommended that an agency track micro-purchases when--
    (1) The agency anticipates the aggregate amount paid will exceed 
$10,000; or
    (2) The agency intends to establish or continue an affirmative 
procurement program in the following fiscal year.


23.401  Definitions.

    As used in this subpart--
    (a) EPA-designated item means a product that is or can be made with 
recovered material--
    (1) That is listed by EPA in a procurement guideline (40 CFR part 
247); and
    (2) For which EPA has provided purchasing recommendations in a

[[Page 63044]]

related Recovered Materials Advisory Notice (RMAN).
    (b) USDA-designated item means a generic grouping of products that 
are or can be made with biobased materials--
    (1) That is listed by USDA in a procurement guideline (7 CFR part 
2902, subpart B); and
    (2) For which USDA has provided purchasing recommendations.


23.402  Authorities.

    (a) The Resource Conservation and Recovery Act of 1976 (RCRA), 42 
U.S.C. 6962.
    (b) The Farm Security and Rural Investment Act of 2002 (FSRIA), 7 
U.S.C. 8102.
    (c) Executive Order 13101 of September 14, 1998, Greening the 
Government Through Waste Prevention, Recycling, and Federal 
Acquisition.
    (d) The Energy Policy Act of 2005, Public Law 109-58.


23.403  Policy.

    Government policy on the use of products containing recovered 
materials and biobased products considers cost, availability of 
competition, and performance. Agencies shall assure the use of products 
containing recovered materials and biobased products to the maximum 
extent practicable without jeopardizing the intended use of the product 
while maintaining a satisfactory level of competition at a reasonable 
price. Such products shall meet the reasonable performance standards of 
the agency and be acquired competitively, in a cost-effective manner. 
Except as provided at FAR 23.404(b), virgin material shall not be 
required by the solicitation (see 11.302).


23.404  Agency affirmative procurement programs.

    (a) An agency must establish an affirmative procurement program for 
EPA and USDA-designated items if the agency's purchases of designated 
items exceed the threshold set forth in 23.400.
    (1) Agencies have a period of 1 year to revise their procurement 
program(s) after the designation of any new item by EPA or USDA.
    (2) Technical or requirements personnel and procurement personnel 
are responsible for the preparation, implementation, and monitoring of 
affirmative procurement programs.
    (3) Agency affirmative procurement programs must include--
    (i) A recovered materials and biobased products preference program;
    (ii) An agency promotion program;
    (iii) For EPA-designated items only, a program for requiring 
reasonable estimates, certification, and verification of recovered 
material used in the performance of contracts. Both the recovered 
material content and biobased programs require preaward certification 
that the products meet EPA or USDA recommendations. A second 
certification is required at contract completion for recovered material 
content; and
    (iv) Annual review and monitoring of the effectiveness of the 
program.
    (b) Exemptions. (1) Agency affirmative procurement programs must 
require that 100 percent of purchases of EPA or USDA-designated items 
contain recovered material or biobased content, respectively, unless 
the item cannot be acquired--
    (i) Competitively within a reasonable time frame;
    (ii) Meeting reasonable performance standards; or
    (iii) At a reasonable price.
    (2) EPA and USDA may provide categorical exemptions for items that 
they designate, when procured for a specific purpose. For example, some 
USDA-designated items such as mobile equipment hydraulic fluids, diesel 
fuel additives, and penetrating lubricants (see 7 CFR 2902.10 et seq.) 
are excluded from the preferred procurement requirement for the 
application of the USDA-designated item to one or both of the 
following:
    (i) Spacecraft system and launch support equipment.
    (ii) Military equipment, i.e., a product or system designed or 
procured for combat or combat-related missions.
    (c) Agency affirmative procurement programs must provide guidance 
for purchases of EPA-designated items at or below the micro-purchase 
threshold.
    (d) Agencies may use their own specifications or commercial product 
descriptions when procuring products containing recovered materials or 
biobased products. When using either, the contract should specify--
    (1) For products containing recovered materials, that the product 
is composed of the--
    (i) Highest percent of recovered materials practicable; or
    (ii) Minimum content standards in accordance with EPA's Recovered 
Materials Advisory Notices; and
    (2) For biobased products, that the product is composed of--
    (i) The highest percentage of biobased material practicable; or
    (ii) USDA's recommended minimum contents standards.
    (e) Agencies shall treat as eligible for the preference for 
biobased products, products from ``designated countries,'' as defined 
in 25.003, provided that those products--
    (1) Meet the criteria for the definition of biobased product, 
except that the products need not meet the requirement that renewable 
agricultural materials (including plant, animal, and marine materials) 
or forestry materials in such product must be domestic; and
    (2) Otherwise meet all requirements for participation in the 
preference program.


23.405  Procedures.

    (a) Designated items and procurement guidelines.
    (1) Recovered Materials. Contracting officers should refer to EPA's 
list of EPA-designated items (available via the Internet at http://
www.epa.gov/cpg/) and to their agencies' affirmative procurement 
program when purchasing products that contain recovered material, or 
services that could include the use of products that contain recovered 
material.
    (2) Biobased products. Contracting officers should refer to USDA's 
list of USDA-designated items (available through the Internet at http:/
/www.usda.gov/biopreferred) and to their agencies affirmative 
procurement program when purchasing supplies that contain biobased 
material or when purchasing services that could include supplies that 
contain biobased material.
    (b) Procurement exemptions.
    (1) Once an item has been designated by either EPA or USDA, 
agencies shall purchase conforming products unless an exemption applies 
(see 23.404(b)).
    (2) When an exemption is used for an EPA-designated item or the 
procurement of a product containing recovered material does not meet or 
exceed the EPA recovered material content guidelines, the contracting 
officer shall place a written justification in the contract file.
    (c) Program priorities. When both the USDA-designated item and the 
EPA-designated item will be used for the same purposes, and both meet 
the agency's needs, the agency shall purchase the EPA-designated item.


23.406   Solicitation provisions and contract clauses.

    (a) Insert the provision at 52.223-1, Biobased Product 
Certification, in solicitations that--
    (1) Require the delivery or specify the use of USDA-designated 
items; or
    (2) Include the clause at 52.223-2.
    (b) Insert the clause at 52.223-2, Affirmative Procurement of 
Biobased Products Under Service and Construction Contracts, in service 
or construction solicitations and contracts unless the contract will 
not involve the use of USDA-designated items at http://

[[Page 63045]]

www.usda.gov/biopreferred or 7 CFR Part 2902.
    (c) Insert the provision at 52.223-4, Recovered Material 
Certification, in solicitations that are for, or specify the use of, 
EPA-designated items.
    (d) Insert the clause at 52.223-9, Estimate of Percentage of 
Recovered Material Content for EPA-Designated Products, in 
solicitations and contracts exceeding $100,000 that are for, or specify 
the use of, EPA-designated products containing recovered materials. If 
technical personnel advise that estimates can be verified, use the 
clause with its Alternate I.


23.701  [Removed]

0
12. Remove and reserve section 23.701.
0
13. Amend section 23.702 by adding paragraph (g) to read as follows:


23.702  Authorities.

* * * * *
    (g) Farm Security and Rural Investment Act of 2002 (FSRIA) (7 
U.S.C. 8102).
0
14. Amend section 23.703 by revising paragraph (b)(7); and adding 
paragraph (b)(8) to read as follows:


23.703  Policy.

* * * * *
    (b) * * *
    (7) Promote the use of biobased products.
    (8) Purchase only plastic ring carriers that are degradable (7 USC 
8102(c)(1), 40 CFR part 238).

PART 42--CONTRACT ADMINISTRATION AND AUDIT SERVICES

0
15. Amend section 42.302 by revising paragraph (a)(68)(ii) to read as 
follows:


42.302  Contract administration functions.

    (a) * * *
    (68) * * *
    (ii) Monitoring contractor compliance with specifications or other 
contractual requirements requiring the delivery or use of 
environmentally preferable products, energy-efficient products, 
products containing recovered materials, and biobased products. This 
must occur as part of the quality assurance procedures set forth in 
Part 46; and
* * * * *

PART 45--GOVERNMENT PROPERTY


45.103  [Amended]

0
16. Amend section 45.103 by removing from paragraph (a)(1) 
``11.101(c)'' and adding ``11.101(b)'' in its place.

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
17. Add sections 52.223-1 and 52.223-2 to read as follows:


52.223-1  Biobased Product Certification.

    As prescribed in 23.406(a), insert the following provision:
    BIOBASED PRODUCT CERTIFICATION [December 7, 2007]
    As required by the Farm Security and Rural Investment Act of 2002 
and the Energy Policy Act of 2005 (7 U.S.C. 8102(c)(3)), the offeror 
certifies, by signing this offer, that biobased products (within 
categories of products listed by the United States Department of 
Agriculture in 7 CFR part 2902, subpart B) to be used or delivered in 
the performance of the contract, other than biobased products that are 
not purchased by the offeror as a direct result of this contract, will 
comply with the applicable specifications or other contractual 
requirements.
    (End of provision)


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

    As prescribed in 23.406(b), insert the following clause:
    AFFIRMATIVE PROCUREMENT OF BIOBASED PRODUCTS UNDER SERVICE AND 
CONSTRUCTION CONTRACTS [December 7, 2007]
    (a) In the performance of this contract, the contractor shall make 
maximum use of biobased products that are United States Department of 
Agriculture (USDA)-designated items unless--
    (1) The product cannot be acquired--
    (i) Competitively within a time frame providing for compliance with 
the contract performance schedule;
    (ii) Meeting contract performance requirements; or
    (iii) At a reasonable price.
    (2) The product is to be used in an application covered by a USDA 
categorical exemption (see 7 CFR 2902.10 et seq.). For example, some 
USDA-designated items such as mobile equipment hydraulic fluids, diesel 
fuel additives, and penetrating lubricants are excluded from the 
preferred procurement requirement for the application of the USDA-
designated item to one or both of the following:
    (i) Spacecraft system and launch support equipment.
    (ii) Military equipment, i.e., a product or system designed or 
procured for combat or combat-related missions.
    (b) Information about this requirement and these products is 
available at http://www.usda.gov/biopreferred.
    (End of clause)


52.223-4  [Amended]

0
18. Amend section 52.223-4 by removing from the prescription 
``23.406(a)'' and adding ``23.406(c)'' in its place.


52.223-9  [Amended]

0
19. Amend section 52.223-9 by removing from the prescription and 
Alternate I ``23.406(b)'' and adding ``23.406(d)'' respectively, in its 
place.
[FR Doc. 07-5478 Filed 11-6-07; 8:45 am]
BILLING CODE 6820-EP-S