Federal Management Regulation; Replacement of Personal Property Pursuant to the Exchange/Sale Authority, 9303-9306 [2022-03379]
Download as PDF
<![CDATA[
Federal Register / Vol. 87, No. 34 / Friday, February 18, 2022 / Proposed Rules
as follows: I, (Name of Governor or
designee), (ADD TITLE on behalf of the)
Governor of the (State or
Commonwealth) of ll, do hereby
certify that I am opposed to the
enactment or enforcement of a law that
conforms to 23 U.S.C. 159(a)(3)(A) and
that the legislature of the (State or
Commonwealth) of ll, has adopted a
resolution expressing its opposition to
such a law.
(2) Until a State has been determined
to be in compliance with the
requirements of 23 U.S.C. 159(a)(3)(B)
and this regulation, the certification
shall include a copy of the resolution.
(d) The Governor or their designee
shall submit an electric copy of the
certification to its respective FHWA
Division Administrator. The FHWA
Division Administrator shall retain an
electronic copy and forward an
electronic copy to both the FHWA
Office of Safety and the FHWA Office of
the Chief Counsel.
(e) Any changes to the certification or
supplemental information necessitated
by the review of the certifications as
they are forwarded, State legislative
changes that affects State compliance of
this section, or changes in State
enforcement activity shall be submitted
within 90 days of the change being
effective.
§ 192.6
funds.
Period of availability of withheld
Funds withheld under § 192.4 from
apportionment to any State will not be
available for apportionment to the State
and shall lapse immediately.
jspears on DSK121TN23PROD with PROPOSALS1
§ 192.7 Procedures affecting States in
noncompliance.
(a) If FHWA determines that the State
is not in compliance with 23 U.S.C.
159(a)(3), the State will be advised of
the funds expected to be withheld under
§ 192.4 from apportionment, as part of
the advance notice of apportionments
required under 23 U.S.C. 104(e). This
notification will normally occur not
later than 90 days before the beginning
of the fiscal year for which the sums to
be apportioned are authorized. The
State may, within 30 days of its receipt
of the advance notice of
apportionments, submit documentation
demonstrating its compliance.
Documentation shall be submitted
electronically to the FHWA Division
Administrator for that State. The FHWA
Division Administrator shall retain an
electronic copy and forward an
electronic copy to both the FHWA
Office of Safety and the FHWA Office of
the Chief Counsel.
(b) Each fiscal year, each State
determined not to be in compliance
VerDate Sep<11>2014
16:35 Feb 17, 2022
Jkt 256001
with 23 U.S.C. 159(a)(3), based on
FHWA’s final determination, will
receive notice of the funds being
withheld under § 192.4 from
apportionment, as part of the
certification of apportionments required
under 23 U.S.C. 104(e), which normally
occurs on October 1 of each fiscal year.
[FR Doc. 2022–03172 Filed 2–17–22; 8:45 am]
BILLING CODE 4910–22–P
GENERAL SERVICES
ADMINISTRATION
41 CFR Part 102–39
[FMR Case 2019–102–01; Docket No. GSA–
FMR–2019–0015; Sequence No. 1]
RIN 3090–AK11
Federal Management Regulation;
Replacement of Personal Property
Pursuant to the Exchange/Sale
Authority
Office of Government-wide
Policy, General Services Administration
(GSA).
ACTION: Proposed rule.
AGENCY:
GSA is proposing to amend
the Federal Management Regulation
(FMR) to clarify the exchange/sale
provisions to improve the application of
this important authority across Federal
agencies. The related FMR part
Replacement of Personal Property to the
Exchange/Sale Authority was last
revised November 1, 2011.
DATES: Interested parties should submit
comments in writing on or before April
19, 2022.
ADDRESSES: Submit comments in
response to FMR Case 2019–102–01 to
Regulations.gov at https://
www.regulations.gov. Enter ‘‘FMR Case
2019–102–01’’ under the heading ‘‘Enter
Keyword or ID’’ and select ‘‘Search’’.
Select the link ‘‘Submit a Comment’’
that corresponds with ‘‘FMR Case 2019–
102–01’’. Follow the instructions
provided at the ‘‘Comment Now’’
screen. Please include your name,
company name (if any), and ‘‘FMR Case
2019–102–01’’ on your attached
document.
All comments received will be posted
without change, including any personal
and/or business confidential
information provided. To confirm
receipt of your comment(s), please
check https://www.regulations.gov
approximately two to three days after
submission to verify posting.
FOR FURTHER INFORMATION CONTACT: For
clarification of content, contact William
Garrett, Director, Personal Property
SUMMARY:
PO 00000
Frm 00030
Fmt 4702
Sfmt 4702
9303
Policy Division, Office of Governmentwide Policy, Office of Asset and
Transportation Management (MA), at
202–368–8163 or william.garrett@
gsa.gov. For information pertaining to
status or publication schedules, contact
the Regulatory Secretariat (MVCB), 202–
501–4755. Please cite FMR Case 2019–
102–01.
SUPPLEMENTARY INFORMATION:
A. Authority and Background of This
Program
Personal property includes a wide
variety of Government items such as
computers, office equipment, furniture,
and vehicles, as well as more
specialized items specific to agencies,
such as medical equipment for the U.S.
Department of Veterans Affairs (VA) and
medical helicopters for the U.S. Army.
The Federal Government owns and
manages more than a trillion dollars of
personal property. In Fiscal Year (FY)
2020, Federal agencies reported
approximately $1.9 trillion in
capitalized personal property assets
under their control. Over time, agencies’
personal property may no longer
adequately perform the task for which it
was acquired. 40 United States Code
(U.S.C.) § 503 authorizes agencies to
exchange (trade-in) or sell such property
still needed to meet mission needs and
apply the exchange allowance or sale
proceeds to acquire similar replacement
property.
Such transactions are known as
personal property ‘‘exchange/sale’’
transactions. These transactions
facilitate the replacement of personal
property by allowing agencies to offset
the cost of new, similar property,
resulting in savings to agency funds.
Without this authority, agencies would
have to expend the full purchase price
of new personal property from
appropriations, while depositing the
proceeds from the disposition of worn
property in the U.S. Treasury. Because
exchange/sale transactions provide
agencies with opportunities to save
costs, it is important that agencies using
this authority establish policies,
processes, and procedures with effective
controls, in order to ensure that they
meet applicable requirements and are
good stewards of Government resources.
GSA’s regulations at 41 Code of
Federal Regulations (CFR) Part 102–39
describe the terms, conditions, and
reporting requirements for exchanges
and sales of personal property. The
personal property exchange/sale
authority in FMR § 102–39.60 allows
agencies to replace property that is not
excess or surplus, i.e., the property is
still needed to meet the agency’s
continuing mission. In addition,
E:\FR\FM\18FEP1.SGM
18FEP1
jspears on DSK121TN23PROD with PROPOSALS1
9304
Federal Register / Vol. 87, No. 34 / Friday, February 18, 2022 / Proposed Rules
agencies must meet the following
requirements to use the exchange/sale
authority:
• The property exchanged or sold is
similar to the property acquired.
• The personal property exchanged or
sold was not acquired for the principal
purpose of later exchanging it or selling
it using the authority. For example, an
agency cannot purchase a more costly
piece of equipment than necessary to
meet mission needs for the sole reason
that it will deliver a higher value when
sold using this exchange/sale authority.
• Proceeds from the sale can only be
put toward the purchase of similar
replacement property and cannot be
used for services. In other words, an
agency can use proceeds from the sale
of a vehicle to purchase a new vehicle,
but it cannot use proceeds to hire a
mechanic to repair an existing vehicle.
• Proceeds from sale are available
during the same fiscal year (FY) the
property was sold and the following FY
for replacement property. This means
that for an item sold in FY 2021, an
agency has the rest of FY 2021, as well
as FY 2022 to purchase a replacement
item. If agencies do not spend these
funds by the end of the next FY, monies
are to be deposited in the U.S. Treasury
as miscellaneous receipts, except as
otherwise authorized by law. Such legal
authority may, for example, take the
form of an authorized revolving fund
where the rules of the program allow
use of funds beyond the restrictions of
the FMR.
• Agencies are prohibited from using
the authority to replace certain types of
property as detailed in FMR § 102–39.60
(weapons, nuclear ordinances, etc.).
Agencies may choose between two
transaction methods to replace property,
the exchange (trade-in) method or the
sale method, but must determine which
method provides the greatest return to
the Government, including factoring in
administrative and overhead expenses.
A typical exchange occurs when the
original manufacturer delivers a
replacement item to the agency and
removes the item being replaced. The
manufacturer applies a trade-in credit
(an allowance) for the purchase of the
replacement item. If the sale method is
used, the agency receives the sale
proceeds for the sale of the item and
applies those proceeds to the purchase
of the replacement personal property.
If contemplating an exchange/sale,
agencies are guided to follow a process
similar to the disposal process for
excess property by making it available
to other Federal agencies and state
agencies by posting it to GSAXcess at
https://gsaxcess.gov/. This is GSA’s
website for reporting, searching, and
VerDate Sep<11>2014
16:35 Feb 17, 2022
Jkt 256001
selecting property. This process allows
other Federal agencies or state agencies
to obtain the property for the price
required by the reporting agency to help
fund the acquisition of replacement
property under the exchange/sale
authority.
Agencies are required to submit a
summary report to GSA through the
GSA Personal Property Reporting Tool
(PPRT), https://
www.property.reporting.gov/PPRT/
PPRTLogin, at the end of each FY on the
type, the quantity, the exchange
allowances and/or sale proceeds, as
applicable, and the original acquisition
cost of items for both exchange and sale
transactions. Agencies with no
transactions during a FY must submit a
negative report. Ultimately, agencies
decide whether to use the exchange/sale
authority to replace property in their
inventories.
B. Changes Proposed by This Rule and
Expected Impact
In 2018, the Government
Accountability Office (GAO) Report 19–
33, ‘‘GSA and VA Have Opportunities to
Improve the Exchange/Sale Process’’,
identified confusion among some
agencies on the use of the exchange/sale
authority which could be alleviated by,
among other actions, revising FMR Part
102–39. In addition to amending the
exchange/sale regulations found in FMR
Part 102–39 with this rule, GSA
published FMR Bulletin B–48,
‘‘Exchange/Sale Financial Accounting,’’
December 18, 2018, and other guidance,
frequently asked questions, best
practices, and deviation request
procedures all of which can be found at
www.gsa.gov/exchangesale.
• GSA is proposing to revise the
definition of ‘‘similar’’ in FMR § 102–
39.20 to more narrowly tailor one of the
criteria of ‘‘similar’’ to require that
replacement property fall within a
defined Federal Supply Classification
(FSC), which can be found at https://
public.logisticsinformation
service.dla.mil/H2/search.aspx, as
opposed to an FSC Group. A FSC Group
is a two-digit number that categorizes
types of property, whereas a FSC is a
four-digit number that further
categorizes types of property within the
FSC Group. For example, FSC Group 12
is for Fire Control Equipment. Within
FSC Group 12, there are FSCs that
further categorize this type of property,
e.g., FSC 1210—Fire Control Directors.
GSA observes that not all property
within the same broad FSC Group
would reasonably be considered
‘‘similar.’’ Further, another criterion to
meet the definition of ‘‘similar’’ is being
updated to reflect that items will be
PO 00000
Frm 00031
Fmt 4702
Sfmt 4702
deemed to be ‘‘similar’’ for the purposes
of an exchange/sale transaction if the
assets are designed or constructed for
the same general purpose, regardless of
the assigned FSC. Only one of the
criteria in this definition needs to be
met for the property to be considered
‘‘similar’’ and eligible for an exchange/
sale transaction.
• Amend FMR § 102–39.25 to allow
all provisions in this part to be subject
to deviation except for those mandated
by statute and FMR § 102–39.80.
• Amend the question in FMR § 102–
39.40 and clarify the difference between
the exchange/sale authority and the
more frequently used excess/surplus
disposal process. The primary
difference is that personal property
disposal under the excess/surplus
process does not allow for the use of
proceeds or allowances (if any), in
acquiring replacement similar assets.
Exchange/sale property is replacement
property that is non-excess and nonsurplus, meaning the agency has a
continuing need for the property, but
the specific item(s) are no longer
suitable to the need and must be
replaced, and therefore are not reported
to GSA as excess or surplus for transfer
or donation purposes.
• Revise the ‘‘prohibited list’’ at FMR
§ 102–39.60 by removing FSC Groups
42, Firefighting, rescue, and safety
equipment; 51, Hand tools; and 54,
Prefabricated structure and scaffolding
(FSC 5410 Prefabricated and Portable
Buildings, FSC 5411 Rigid Wall
Shelters, and FSC 5419 Collective
Modular Support System only). The
restrictions remaining in this section
involve assets which are inherently
dangerous or pose a significant public
health or safety concern.
• Remove ‘‘. . . , except medicinal
chemicals’’ from FMR § 102–39.60 as
these are categorized under FSG 65, not
FSG 68.
• Amend FMR § 102–39.65 to clarify
that an exchange or sale under this FMR
part may occur after the acquisition of
the replacement property. For example,
if a Magnetic Resonance Imaging (MRI)
machine is needed for use daily, the
replacement machine may be acquired
and installed before the existing
machine is removed and exchanged or
sold. If the existing machine is sold, in
accordance with agency policy, the
funds may be returned to the
appropriation used to acquire the
replacement machine. If the existing
machine is exchanged, in accordance
with agency policy, the agency
agreement with the entity providing the
replacement must document the
responsibilities of both parties to
execute this transaction.
E:\FR\FM\18FEP1.SGM
18FEP1
jspears on DSK121TN23PROD with PROPOSALS1
Federal Register / Vol. 87, No. 34 / Friday, February 18, 2022 / Proposed Rules
• Update FMR § 102–39.80 by adding
parallel language from the edits to FMR
§ 102–39.25 that states that no
deviations will be granted to this
section.
• Update the reporting policy and
processes in FMR § 102–39.85 to reflect
the use of a new online reporting tool
and reporting requirements.
• Add FMR § 102–39.90 in
accordance with the recommendations
of GAO Report 19–33 to provide
additional guidance to agencies, such as
reminding agencies of the publication of
Bulletin B–48 and the guidance
available at the GSA website on this
exchange/sale topic.
According to GSA’s annual summary
data, 27 agencies reported using the
exchange/sale authority and received a
total of about $2.8 billion in exchange
allowances or sale proceeds from fiscal
year 2016 through fiscal year 2020.
While many agencies used the
authority, a few agencies, particularly
GSA, together accounted for about 88
percent of all allowances and proceeds.
Specifically, 5 of 27 agencies reported
nearly all exchange allowances and sale
proceeds. GSA accounted for about $1.5
billion of about $2.8 billion (or about 55
percent) of reported allowances and
proceeds across the federal government.
Four other agencies—the Departments
of Homeland Security, Agriculture,
Defense, and the Interior—accounted for
about $899 million (or about 32 percent)
of the total. The other 22 agencies using
the authority reported about $340
million (or about 12 percent) in
exchange allowances or sales proceeds
over the 5-year period. Finally, agencies
reported using the sale method more
than the exchange method. Sales by
agencies accounted for about $2.5
billion (or about 91 percent), while use
of the exchange method accounted for
about $247 million (or about 9 percent)
of total transactions reported, primarily
due to GSA’s reporting more use of the
sale method over the exchange method.
While some agencies reported
hundreds of millions of dollars in
exchange allowances and sale proceeds,
the data show that 8 federal agencies—
including the Department of Labor and
the Office of Personnel Management—
reported relatively few transactions,
which totaled less than $200,000 in
exchange allowances and sales
proceeds.
By using the exchange/sale authority,
agencies have an opportunity to be good
stewards of government property by
efficiently replacing needed property,
including high-value items, that serves
critical and continuing requirements to
meet agency missions. GSA expects
these proposed amendments to increase
VerDate Sep<11>2014
16:35 Feb 17, 2022
Jkt 256001
agency flexibility and understanding of
this program. GSA believes these
proposed amendments will help
agencies take better advantage and
increase the use of this authority,
thereby becoming more effective
stewards of government property and
replenishing property more efficiently.
C. Executive Orders 12866 and 13563
Executive Orders (E.O.s) 12866 and
13563 direct agencies to assess all costs
and benefits of available regulatory
alternatives and, if regulation is
necessary, to select regulatory
approaches that maximize net benefits
(including potential economic,
environmental, public health and safety
effects, distributive impacts, and
equity). E.O. 13563 emphasizes the
importance of quantifying both costs
and benefits, of reducing costs, of
harmonizing rules, and of promoting
flexibility. This proposed rule is not
anticipated to be a significant regulatory
action, and therefore, was not subject to
review under Section 6(b) of E.O. 12866,
Regulatory Planning and Review, dated
September 30, 1993.
D. Congressional Review Act
OIRA has determined that this rule is
not a ‘‘major rule’’ as defined by 5
U.S.C. 804(2). Additionally, this rule is
excepted from Congressional Review
Act reporting requirements prescribed
under 5 U.S.C. 801 since it relates to
agency management or personnel.
E. Regulatory Flexibility Act
This proposed rule will not have a
significant economic impact on a
substantial number of entities within
the meaning of the Regulatory
Flexibility Act, 5 U.S.C. 601, et seq.
F. Paperwork Reduction Act
The Paperwork Reduction Act does
not apply because the changes to the
FMR do not impose recordkeeping or
information collection requirements, or
the collection of information from
offerors, contractors, or members of the
public that require the approval of the
Office of Management and Budget under
44 U.S.C. 3501, et seq. Reporting
requirements are only addressed to
Federal agencies regarding their Federal
personal property transactions.
List of Subjects in 41 CFR Part 102–39
Replacement of personal property
pursuant to the exchange/sale authority;
PO 00000
Frm 00032
Fmt 4702
Sfmt 4702
9305
Government property management;
surplus Government property.
Krystal J. Brumfield,
Associate Administrator, Office of
Government-wide Policy.
For the reasons set forth in the
preamble, GSA proposes to amend 41
CFR part 102–39 as set forth below:
■ 1. The authority for part 102–39
continues to read as follows:
Authority: 40 U.S.C. 121(c); 40 U.S.C. 503.
PART 102–39—REPLACEMENT OF
PERSONAL PROPERTY PURSUANT
TO THE EXCHANGE/SALE AUTHORITY
2. Amend § 102–39.20, in the
definition of ‘‘Similar,’’ by revising
paragraphs (2) and (4) to read as follows:
■
§ 102–39.20
part?
What definitions apply to this
*
*
*
*
*
Similar * * *
(2) Fall within a single Federal
Supply Classification (FSC) (includes
any and all forms of property within an
FSC); or
*
*
*
*
*
(4) Are designed or constructed for
the same general purpose (includes any
and all forms of property regardless of
the FSC to which they are assigned).
Note 1 to § 102–39.20: Only one of the
criteria in this definition needs to be met for
the property to be considered ‘‘similar’’ and
eligible for an exchange/sale transaction.
*
*
*
*
*
3. Revise § 102–39.25 to read as
follows:
■
§ 102–39.25 Which exchange/sale
provisions are subject to deviation?
All of the provisions in this part are
subject to deviation (upon presentation
of adequate justification) except for
those mandated by statute, as described
in the Note to § 102–39.60(a), and § 102–
39.80. See the link on ‘‘Exchange/Sale’’
at www.gsa.gov/personalpropertypolicy
for additional information on requesting
deviations from this part.
■ 4. Revise § 102–39.40 to read as
follows:
§ 102–39.40 How does the exchange/sale
authority differ from the disposal process
for excess/surplus personal property?
(a) The primary difference from your
perspective is that sales proceeds or
exchange allowances may be used to
acquire similar replacement personal
property that is still needed under the
exchange/sale authority as described in
this part; whereas under the more
frequently used excess/surplus disposal
process, you would not be able to use
sales proceeds or exchange allowances
E:\FR\FM\18FEP1.SGM
18FEP1
9306
Federal Register / Vol. 87, No. 34 / Friday, February 18, 2022 / Proposed Rules
to acquire replacement personal
property.
(b) Your use of the exchange/sale
authority is optional and should be
considered when needed replacement
assets may be acquired under the
provisions of this part. If exchange/sale
is not practicable (for example, if
conducting an exchange/sale transaction
is not cost effective), you should dispose
of the property through the excess/
surplus disposal process by reporting
the property as excess, as addressed in
Part 102–36 of this chapter.
(c) In the excess/surplus disposal
process, any net proceeds from the sale
of surplus property generally must be
forwarded to the miscellaneous receipts
account at the United States Treasury,
and thus would not be available to you
for use in acquiring similar replacement
property or for any other purpose. You
may use the exchange/sale authority in
the acquisition of personal property
even if the acquisition is under a
services contract, as long as the property
acquired under the services contract is
similar to the property exchanged or
sold (e.g., for a service life extension
program (SLEP), exchange allowances or
sales proceeds would be available for
replacement of similar items, but not for
services).
■ 5. Amend § 102–39.60 by revising
paragraph (a) to read as follows:
§ 102–39.60 What restrictions and
prohibitions apply to the exchange/sale of
personal property?
jspears on DSK121TN23PROD with PROPOSALS1
*
*
*
VerDate Sep<11>2014
*
*
16:35 Feb 17, 2022
Jkt 256001
(a) The following FSC Groups of
personal property:
10 Weapons.
11 Nuclear ordinance.
44 Furnace, Steam Plant, and Drying
Equipment; and Nuclear Reactors
(FSC Class 4470, Nuclear Reactors
only).
68 Chemical and chemical products.
84 Clothing, individual equipment, and
insignia.
Note to 102–39.60(a): Under no
circumstances will deviations be granted for
FSC Class 1005, Guns through 30mm.
Deviations are not required for Department of
Defense (DoD) property in FSC Groups 10
(for classes other than FSC Class 1005), or
any other FSC Group, for which the
applicable DoD demilitarization
requirements and any other applicable
regulations and statutes are met.
*
*
*
*
*
6. Amend § 102–39.65 by—
a. Removing ‘‘and’’ at the end of
paragraph (d);
■ b. Redesignating paragraph (e) as
paragraph (f); and
■ c. Adding a new paragraph (e).
The addition reads as follows:
■
■
§ 102–39.65 What conditions apply to the
exchange/sale of personal property?
*
*
*
*
*
(e) Your agency documents at the time
of exchange or sale (or at the time of
acquiring the replacement property if
acquisition precedes the exchange or
sale) that the exchange allowance or sale
proceeds will be applied to the
acquisition of replacement property;
and
*
*
*
*
*
PO 00000
Frm 00033
Fmt 4702
Sfmt 9990
7. Amend § 102–39.80 by adding a
sentence at the end of the section to
read as follows:
■
§ 102–39.80 What are the accounting
requirements for exchange allowances or
proceeds of sale?
* * * Under no circumstances will
deviations be granted to for § 102–39.80.
■ 8. Revise § 102–39.85 to read as
follows:
§ 102–39.85 What information am I
required to report?
You must submit, within 90 calendar
days after the close of each FY, an
exchange/sale report using the online
Personal Property Reporting Tool
template found at https://
www.property.reporting.gov/PPRT/
PPRTlogin. This template provides the
specific information needed for your
agency’s report. You can contact the
GSA Help Desk at help.PPRT@gsa.gov if
you need assistance accessing the online
reporting tool. All reports, including
negative reports, must be submitted
electronically through the Personal
Property Reporting Tool. Transactions
involving books and periodicals in your
libraries need not be reported.
■ 9. Add § 102–39.90 to read as follows:
§ 102–39.90 Where do I obtain additional
information?
Additional information is provided at
the GSA websites www.gsa.gov/bulletin
and www.gsa.gov/exchangesale.
[FR Doc. 2022–03379 Filed 2–17–22; 8:45 am]
BILLING CODE 6820–14–P
E:\FR\FM\18FEP1.SGM
18FEP1
]]>Agencies
[Federal Register Volume 87, Number 34 (Friday, February 18, 2022)]
[Proposed Rules]
[Pages 9303-9306]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-03379]
=======================================================================
-----------------------------------------------------------------------
GENERAL SERVICES ADMINISTRATION
41 CFR Part 102-39
[FMR Case 2019-102-01; Docket No. GSA-FMR-2019-0015; Sequence No. 1]
RIN 3090-AK11
Federal Management Regulation; Replacement of Personal Property
Pursuant to the Exchange/Sale Authority
AGENCY: Office of Government-wide Policy, General Services
Administration (GSA).
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: GSA is proposing to amend the Federal Management Regulation
(FMR) to clarify the exchange/sale provisions to improve the
application of this important authority across Federal agencies. The
related FMR part Replacement of Personal Property to the Exchange/Sale
Authority was last revised November 1, 2011.
DATES: Interested parties should submit comments in writing on or
before April 19, 2022.
ADDRESSES: Submit comments in response to FMR Case 2019-102-01 to
Regulations.gov at https://www.regulations.gov. Enter ``FMR Case 2019-
102-01'' under the heading ``Enter Keyword or ID'' and select
``Search''. Select the link ``Submit a Comment'' that corresponds with
``FMR Case 2019-102-01''. Follow the instructions provided at the
``Comment Now'' screen. Please include your name, company name (if
any), and ``FMR Case 2019-102-01'' on your attached document.
All comments received will be posted without change, including any
personal and/or business confidential information provided. To confirm
receipt of your comment(s), please check https://www.regulations.gov
approximately two to three days after submission to verify posting.
FOR FURTHER INFORMATION CONTACT: For clarification of content, contact
William Garrett, Director, Personal Property Policy Division, Office of
Government-wide Policy, Office of Asset and Transportation Management
(MA), at 202-368-8163 or [email protected]. For information
pertaining to status or publication schedules, contact the Regulatory
Secretariat (MVCB), 202-501-4755. Please cite FMR Case 2019-102-01.
SUPPLEMENTARY INFORMATION:
A. Authority and Background of This Program
Personal property includes a wide variety of Government items such
as computers, office equipment, furniture, and vehicles, as well as
more specialized items specific to agencies, such as medical equipment
for the U.S. Department of Veterans Affairs (VA) and medical
helicopters for the U.S. Army. The Federal Government owns and manages
more than a trillion dollars of personal property. In Fiscal Year (FY)
2020, Federal agencies reported approximately $1.9 trillion in
capitalized personal property assets under their control. Over time,
agencies' personal property may no longer adequately perform the task
for which it was acquired. 40 United States Code (U.S.C.) Sec. 503
authorizes agencies to exchange (trade-in) or sell such property still
needed to meet mission needs and apply the exchange allowance or sale
proceeds to acquire similar replacement property.
Such transactions are known as personal property ``exchange/sale''
transactions. These transactions facilitate the replacement of personal
property by allowing agencies to offset the cost of new, similar
property, resulting in savings to agency funds. Without this authority,
agencies would have to expend the full purchase price of new personal
property from appropriations, while depositing the proceeds from the
disposition of worn property in the U.S. Treasury. Because exchange/
sale transactions provide agencies with opportunities to save costs, it
is important that agencies using this authority establish policies,
processes, and procedures with effective controls, in order to ensure
that they meet applicable requirements and are good stewards of
Government resources.
GSA's regulations at 41 Code of Federal Regulations (CFR) Part 102-
39 describe the terms, conditions, and reporting requirements for
exchanges and sales of personal property. The personal property
exchange/sale authority in FMR Sec. 102-39.60 allows agencies to
replace property that is not excess or surplus, i.e., the property is
still needed to meet the agency's continuing mission. In addition,
[[Page 9304]]
agencies must meet the following requirements to use the exchange/sale
authority:
The property exchanged or sold is similar to the property
acquired.
The personal property exchanged or sold was not acquired
for the principal purpose of later exchanging it or selling it using
the authority. For example, an agency cannot purchase a more costly
piece of equipment than necessary to meet mission needs for the sole
reason that it will deliver a higher value when sold using this
exchange/sale authority.
Proceeds from the sale can only be put toward the purchase
of similar replacement property and cannot be used for services. In
other words, an agency can use proceeds from the sale of a vehicle to
purchase a new vehicle, but it cannot use proceeds to hire a mechanic
to repair an existing vehicle.
Proceeds from sale are available during the same fiscal
year (FY) the property was sold and the following FY for replacement
property. This means that for an item sold in FY 2021, an agency has
the rest of FY 2021, as well as FY 2022 to purchase a replacement item.
If agencies do not spend these funds by the end of the next FY, monies
are to be deposited in the U.S. Treasury as miscellaneous receipts,
except as otherwise authorized by law. Such legal authority may, for
example, take the form of an authorized revolving fund where the rules
of the program allow use of funds beyond the restrictions of the FMR.
Agencies are prohibited from using the authority to
replace certain types of property as detailed in FMR Sec. 102-39.60
(weapons, nuclear ordinances, etc.).
Agencies may choose between two transaction methods to replace
property, the exchange (trade-in) method or the sale method, but must
determine which method provides the greatest return to the Government,
including factoring in administrative and overhead expenses. A typical
exchange occurs when the original manufacturer delivers a replacement
item to the agency and removes the item being replaced. The
manufacturer applies a trade-in credit (an allowance) for the purchase
of the replacement item. If the sale method is used, the agency
receives the sale proceeds for the sale of the item and applies those
proceeds to the purchase of the replacement personal property.
If contemplating an exchange/sale, agencies are guided to follow a
process similar to the disposal process for excess property by making
it available to other Federal agencies and state agencies by posting it
to GSAXcess at https://gsaxcess.gov/. This is GSA's website for
reporting, searching, and selecting property. This process allows other
Federal agencies or state agencies to obtain the property for the price
required by the reporting agency to help fund the acquisition of
replacement property under the exchange/sale authority.
Agencies are required to submit a summary report to GSA through the
GSA Personal Property Reporting Tool (PPRT), https://www.property.reporting.gov/PPRT/PPRTLogin, at the end of each FY on the
type, the quantity, the exchange allowances and/or sale proceeds, as
applicable, and the original acquisition cost of items for both
exchange and sale transactions. Agencies with no transactions during a
FY must submit a negative report. Ultimately, agencies decide whether
to use the exchange/sale authority to replace property in their
inventories.
B. Changes Proposed by This Rule and Expected Impact
In 2018, the Government Accountability Office (GAO) Report 19-33,
``GSA and VA Have Opportunities to Improve the Exchange/Sale Process'',
identified confusion among some agencies on the use of the exchange/
sale authority which could be alleviated by, among other actions,
revising FMR Part 102-39. In addition to amending the exchange/sale
regulations found in FMR Part 102-39 with this rule, GSA published FMR
Bulletin B-48, ``Exchange/Sale Financial Accounting,'' December 18,
2018, and other guidance, frequently asked questions, best practices,
and deviation request procedures all of which can be found at
www.gsa.gov/exchangesale.
GSA is proposing to revise the definition of ``similar''
in FMR Sec. 102-39.20 to more narrowly tailor one of the criteria of
``similar'' to require that replacement property fall within a defined
Federal Supply Classification (FSC), which can be found at https://public.logisticsinformationservice.dla.mil/H2/search.aspx, as opposed
to an FSC Group. A FSC Group is a two-digit number that categorizes
types of property, whereas a FSC is a four-digit number that further
categorizes types of property within the FSC Group. For example, FSC
Group 12 is for Fire Control Equipment. Within FSC Group 12, there are
FSCs that further categorize this type of property, e.g., FSC 1210--
Fire Control Directors. GSA observes that not all property within the
same broad FSC Group would reasonably be considered ``similar.''
Further, another criterion to meet the definition of ``similar'' is
being updated to reflect that items will be deemed to be ``similar''
for the purposes of an exchange/sale transaction if the assets are
designed or constructed for the same general purpose, regardless of the
assigned FSC. Only one of the criteria in this definition needs to be
met for the property to be considered ``similar'' and eligible for an
exchange/sale transaction.
Amend FMR Sec. 102-39.25 to allow all provisions in this
part to be subject to deviation except for those mandated by statute
and FMR Sec. 102-39.80.
Amend the question in FMR Sec. 102-39.40 and clarify the
difference between the exchange/sale authority and the more frequently
used excess/surplus disposal process. The primary difference is that
personal property disposal under the excess/surplus process does not
allow for the use of proceeds or allowances (if any), in acquiring
replacement similar assets. Exchange/sale property is replacement
property that is non-excess and non-surplus, meaning the agency has a
continuing need for the property, but the specific item(s) are no
longer suitable to the need and must be replaced, and therefore are not
reported to GSA as excess or surplus for transfer or donation purposes.
Revise the ``prohibited list'' at FMR Sec. 102-39.60 by
removing FSC Groups 42, Firefighting, rescue, and safety equipment; 51,
Hand tools; and 54, Prefabricated structure and scaffolding (FSC 5410
Prefabricated and Portable Buildings, FSC 5411 Rigid Wall Shelters, and
FSC 5419 Collective Modular Support System only). The restrictions
remaining in this section involve assets which are inherently dangerous
or pose a significant public health or safety concern.
Remove ``. . . , except medicinal chemicals'' from FMR
Sec. 102-39.60 as these are categorized under FSG 65, not FSG 68.
Amend FMR Sec. 102-39.65 to clarify that an exchange or
sale under this FMR part may occur after the acquisition of the
replacement property. For example, if a Magnetic Resonance Imaging
(MRI) machine is needed for use daily, the replacement machine may be
acquired and installed before the existing machine is removed and
exchanged or sold. If the existing machine is sold, in accordance with
agency policy, the funds may be returned to the appropriation used to
acquire the replacement machine. If the existing machine is exchanged,
in accordance with agency policy, the agency agreement with the entity
providing the replacement must document the responsibilities of both
parties to execute this transaction.
[[Page 9305]]
Update FMR Sec. 102-39.80 by adding parallel language
from the edits to FMR Sec. 102-39.25 that states that no deviations
will be granted to this section.
Update the reporting policy and processes in FMR Sec.
102-39.85 to reflect the use of a new online reporting tool and
reporting requirements.
Add FMR Sec. 102-39.90 in accordance with the
recommendations of GAO Report 19-33 to provide additional guidance to
agencies, such as reminding agencies of the publication of Bulletin B-
48 and the guidance available at the GSA website on this exchange/sale
topic.
According to GSA's annual summary data, 27 agencies reported using
the exchange/sale authority and received a total of about $2.8 billion
in exchange allowances or sale proceeds from fiscal year 2016 through
fiscal year 2020. While many agencies used the authority, a few
agencies, particularly GSA, together accounted for about 88 percent of
all allowances and proceeds. Specifically, 5 of 27 agencies reported
nearly all exchange allowances and sale proceeds. GSA accounted for
about $1.5 billion of about $2.8 billion (or about 55 percent) of
reported allowances and proceeds across the federal government. Four
other agencies--the Departments of Homeland Security, Agriculture,
Defense, and the Interior--accounted for about $899 million (or about
32 percent) of the total. The other 22 agencies using the authority
reported about $340 million (or about 12 percent) in exchange
allowances or sales proceeds over the 5-year period. Finally, agencies
reported using the sale method more than the exchange method. Sales by
agencies accounted for about $2.5 billion (or about 91 percent), while
use of the exchange method accounted for about $247 million (or about 9
percent) of total transactions reported, primarily due to GSA's
reporting more use of the sale method over the exchange method.
While some agencies reported hundreds of millions of dollars in
exchange allowances and sale proceeds, the data show that 8 federal
agencies-- including the Department of Labor and the Office of
Personnel Management--reported relatively few transactions, which
totaled less than $200,000 in exchange allowances and sales proceeds.
By using the exchange/sale authority, agencies have an opportunity
to be good stewards of government property by efficiently replacing
needed property, including high-value items, that serves critical and
continuing requirements to meet agency missions. GSA expects these
proposed amendments to increase agency flexibility and understanding of
this program. GSA believes these proposed amendments will help agencies
take better advantage and increase the use of this authority, thereby
becoming more effective stewards of government property and
replenishing property more efficiently.
C. Executive Orders 12866 and 13563
Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess
all costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). E.O.
13563 emphasizes the importance of quantifying both costs and benefits,
of reducing costs, of harmonizing rules, and of promoting flexibility.
This proposed rule is not anticipated to be a significant regulatory
action, and therefore, was not subject to review under Section 6(b) of
E.O. 12866, Regulatory Planning and Review, dated September 30, 1993.
D. Congressional Review Act
OIRA has determined that this rule is not a ``major rule'' as
defined by 5 U.S.C. 804(2). Additionally, this rule is excepted from
Congressional Review Act reporting requirements prescribed under 5
U.S.C. 801 since it relates to agency management or personnel.
E. Regulatory Flexibility Act
This proposed rule will not have a significant economic impact on a
substantial number of entities within the meaning of the Regulatory
Flexibility Act, 5 U.S.C. 601, et seq.
F. Paperwork Reduction Act
The Paperwork Reduction Act does not apply because the changes to
the FMR do not impose recordkeeping or information collection
requirements, or the collection of information from offerors,
contractors, or members of the public that require the approval of the
Office of Management and Budget under 44 U.S.C. 3501, et seq. Reporting
requirements are only addressed to Federal agencies regarding their
Federal personal property transactions.
List of Subjects in 41 CFR Part 102-39
Replacement of personal property pursuant to the exchange/sale
authority; Government property management; surplus Government property.
Krystal J. Brumfield,
Associate Administrator, Office of Government-wide Policy.
For the reasons set forth in the preamble, GSA proposes to amend 41
CFR part 102-39 as set forth below:
0
1. The authority for part 102-39 continues to read as follows:
Authority: 40 U.S.C. 121(c); 40 U.S.C. 503.
PART 102-39--REPLACEMENT OF PERSONAL PROPERTY PURSUANT TO THE
EXCHANGE/SALE AUTHORITY
0
2. Amend Sec. 102-39.20, in the definition of ``Similar,'' by revising
paragraphs (2) and (4) to read as follows:
Sec. 102-39.20 What definitions apply to this part?
* * * * *
Similar * * *
(2) Fall within a single Federal Supply Classification (FSC)
(includes any and all forms of property within an FSC); or
* * * * *
(4) Are designed or constructed for the same general purpose
(includes any and all forms of property regardless of the FSC to which
they are assigned).
Note 1 to Sec. 102-39.20: Only one of the criteria in this
definition needs to be met for the property to be considered
``similar'' and eligible for an exchange/sale transaction.
* * * * *
0
3. Revise Sec. 102-39.25 to read as follows:
Sec. 102-39.25 Which exchange/sale provisions are subject to
deviation?
All of the provisions in this part are subject to deviation (upon
presentation of adequate justification) except for those mandated by
statute, as described in the Note to Sec. 102-39.60(a), and Sec. 102-
39.80. See the link on ``Exchange/Sale'' at www.gsa.gov/personalpropertypolicy for additional information on requesting
deviations from this part.
0
4. Revise Sec. 102-39.40 to read as follows:
Sec. 102-39.40 How does the exchange/sale authority differ from the
disposal process for excess/surplus personal property?
(a) The primary difference from your perspective is that sales
proceeds or exchange allowances may be used to acquire similar
replacement personal property that is still needed under the exchange/
sale authority as described in this part; whereas under the more
frequently used excess/surplus disposal process, you would not be able
to use sales proceeds or exchange allowances
[[Page 9306]]
to acquire replacement personal property.
(b) Your use of the exchange/sale authority is optional and should
be considered when needed replacement assets may be acquired under the
provisions of this part. If exchange/sale is not practicable (for
example, if conducting an exchange/sale transaction is not cost
effective), you should dispose of the property through the excess/
surplus disposal process by reporting the property as excess, as
addressed in Part 102-36 of this chapter.
(c) In the excess/surplus disposal process, any net proceeds from
the sale of surplus property generally must be forwarded to the
miscellaneous receipts account at the United States Treasury, and thus
would not be available to you for use in acquiring similar replacement
property or for any other purpose. You may use the exchange/sale
authority in the acquisition of personal property even if the
acquisition is under a services contract, as long as the property
acquired under the services contract is similar to the property
exchanged or sold (e.g., for a service life extension program (SLEP),
exchange allowances or sales proceeds would be available for
replacement of similar items, but not for services).
0
5. Amend Sec. 102-39.60 by revising paragraph (a) to read as follows:
Sec. 102-39.60 What restrictions and prohibitions apply to the
exchange/sale of personal property?
* * * * *
(a) The following FSC Groups of personal property:
10 Weapons.
11 Nuclear ordinance.
44 Furnace, Steam Plant, and Drying Equipment; and Nuclear Reactors
(FSC Class 4470, Nuclear Reactors only).
68 Chemical and chemical products.
84 Clothing, individual equipment, and insignia.
Note to 102-39.60(a): Under no circumstances will deviations be
granted for FSC Class 1005, Guns through 30mm. Deviations are not
required for Department of Defense (DoD) property in FSC Groups 10
(for classes other than FSC Class 1005), or any other FSC Group, for
which the applicable DoD demilitarization requirements and any other
applicable regulations and statutes are met.
* * * * *
0
6. Amend Sec. 102-39.65 by--
0
a. Removing ``and'' at the end of paragraph (d);
0
b. Redesignating paragraph (e) as paragraph (f); and
0
c. Adding a new paragraph (e).
The addition reads as follows:
Sec. 102-39.65 What conditions apply to the exchange/sale of
personal property?
* * * * *
(e) Your agency documents at the time of exchange or sale (or at
the time of acquiring the replacement property if acquisition precedes
the exchange or sale) that the exchange allowance or sale proceeds will
be applied to the acquisition of replacement property; and
* * * * *
0
7. Amend Sec. 102-39.80 by adding a sentence at the end of the section
to read as follows:
Sec. 102-39.80 What are the accounting requirements for exchange
allowances or proceeds of sale?
* * * Under no circumstances will deviations be granted to for
Sec. 102-39.80.
0
8. Revise Sec. 102-39.85 to read as follows:
Sec. 102-39.85 What information am I required to report?
You must submit, within 90 calendar days after the close of each
FY, an exchange/sale report using the online Personal Property
Reporting Tool template found at https://www.property.reporting.gov/
PPRT/PPRTlogin. This template provides the specific information needed
for your agency's report. You can contact the GSA Help Desk at
[email protected] if you need assistance accessing the online reporting
tool. All reports, including negative reports, must be submitted
electronically through the Personal Property Reporting Tool.
Transactions involving books and periodicals in your libraries need not
be reported.
0
9. Add Sec. 102-39.90 to read as follows:
Sec. 102-39.90 Where do I obtain additional information?
Additional information is provided at the GSA websites www.gsa.gov/bulletin and www.gsa.gov/exchangesale.
[FR Doc. 2022-03379 Filed 2-17-22; 8:45 am]
BILLING CODE 6820-14-P
