[Federal Register Volume 70, Number 7 (Tuesday, January 11, 2005)]
[Rules and Regulations]
[Pages 1792-1812]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-399]
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DEPARTMENT OF AGRICULTURE
Office of Energy Policy and New Uses
7 CFR Part 2902
RIN 0503-AA26
Guidelines for Designating Biobased Products for Federal
Procurement
AGENCY: Office of Energy Policy and New Uses, Office of the Chief
Economist, USDA.
ACTION: Final rule.
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SUMMARY: The U.S. Department of Agriculture is establishing guidelines
for designating items made from biobased products that will be afforded
Federal procurement preference, as required under section 9002 of the
Farm Security and Rural Investment Act of 2002.
DATES: This rule is effective February 10, 2005.
FOR FURTHER INFORMATION CONTACT: Marvin Duncan, USDA, Office of the
Chief Economist, Office of Energy Policy and New Uses, Room 361,
Reporters Building, 300 Seventh Street, SW., Washington, DC 20024; e-
mail: [email protected]; telephone (202) 401-0532. Information
regarding the Federal Biobased Products Preferred Procurement Program
is available on the Internet at http://www.biobased.oce.usda.gov.
SUPPLEMENTARY INFORMATION:
I. Authority
These guidelines are established under the authority of section
9002 of the Farm Security and Rural Investment Act of 2002 (FSRIA), 7
U.S.C. 8102 (referred to in this document as ``section 9002'').
II. Overview of Section 9002
Section 9002 provides for preferred procurement of biobased
products by Federal agencies. Federal agencies are required to purchase
biobased products, as defined in regulations to implement the statute
(i.e., this final rule), for all biobased products within designated
items costing over $10,000 or when the quantities of functionally
equivalent items purchased over the preceding fiscal year equaled
$10,000 or more. Procurements by a Federal agency subject to section
6002 of the Solid Waste Disposal Act (42 U.S.C. 6962) are not subject
to the requirements under section 9002 to the extent that the
requirements of the two programs are inconsistent. Federal agencies
must procure biobased products unless the biobased products within
designated items are not reasonably available, fail to meet applicable
performance standards, or are available only at an unreasonable price.
The Office of Federal Procurement Policy (OFPP) and the USDA will
work in cooperation to ensure implementation of the requirements of
section 9002 in the Federal Acquisition Regulation (FAR). In this
document, USDA is establishing guidelines addressing the designation
process, how to determine the biobased content and other attributes of
specific products, and cost sharing for product testing. In addition,
to provide context, these guidelines address, but do not specifically
implement, the procurement specific aspects of section 9002. USDA
consulted with the Environmental Protection Agency (EPA), the General
Services Administration (GSA), and the Department of Commerce's
National Institute of Standards and Technology (NIST) in preparing the
proposed guidelines that it is finalizing in this rule.
To provide context, these guidelines include the statutory
requirement that Federal agencies have in place, within one year of the
publication of final guidelines, a procurement program that assures
biobased products within designated items will be purchased to the
maximum extent practical. Those procurement programs will have to
contain a preference program for purchasing biobased products within
designated items, an agency promotion program, and provisions for the
annual review and monitoring of an agency's procurement program. In
addition to establishing a preferred procurement program, as items are
designated, Federal agencies may need time to adjust procurement
practices. In accordance with section 9002(c) and (d), designation
rules will specify the time frames within which such adjustments must
occur.
In designating items (generic groupings of specific products such
as crankcase oils or synthetic fibers) for preferred procurement, USDA
will consider the availability of such items and the economic and
technological feasibility of using such items, including life cycle
costs. Federal agencies will be required to purchase products that fall
within an item only after that item has been designated for preferred
procurement. In addition, USDA will provide information to Federal
agencies on the availability, relative price, performance, and
environmental and public health benefits of such items and, where
appropriate, will recommend the level of biobased content to be
contained in the procured product. Manufacturers and vendors will be
able to offer their products to Federal agencies for preferred
procurement under the program when their products fall within the
definition of an item that has been designated for preferred
procurement and the biobased content of the products meets the
standards set forth in the guidelines.
Section 9002 provides that USDA, in consultation with the
Administrator of the EPA, shall establish a voluntary program
authorizing producers of biobased products to use a ``U.S.D.A.
Certified Biobased Product'' label. In a subsequent rulemaking, USDA
intends to establish that voluntary program and provide eligibility
criteria and guidelines for the use of the ``U.S.D.A. Certified
Biobased Product'' label.
Section 9002 provides funds to USDA to support the testing of
biobased products to carry out the provisions of
[[Page 1793]]
the section. This rule addresses how USDA will use these funds.
The legislative history of Title IX of FSRIA suggests that Congress
had in mind three primary objectives that would apply to section 9002.
The first objective is to improve demand for biobased products. This
would have a number of salutary effects, one of which would be to
increase domestic demand for many agricultural commodities that can
serve as feedstocks for production of biobased products. Another
important effect would be the substitution of products with a possibly
more benign or beneficial environmental impact, as compared to the use
of fossil energy based products.
As a second objective, Congress wants to spur the development of
the industrial base through value-added agricultural processing and
manufacturing in rural communities. Since biobased feedstocks are
largely produced in rural settings and, in many cases because of their
bulk, require pre-processing or manufacturing close to where they are
grown, increased dependence on biobased products appears likely to
increase the amount of pre-processing and manufacturing of biobased
products in rural regions of the Nation. This trend would help to
create new investment, job formation, and income generation in these
rural regions.
The third objective is to enhance the Nation's energy security by
substituting biobased products for fossil energy-based products derived
from imported oil and natural gas. The growing dependence of the Nation
on imported oil and natural gas, along with heightened concerns about
political instability in some of the oil rich regions in the world,
have led the Congress to place a higher priority on domestic energy and
biobased product resources.
To assist manufacturers and vendors and Federal agencies in
understanding the steps they will need to follow in participating in
this program, USDA has included the following brief listing of steps
under the item designation process, manufacturer and vendor guidance,
and the procurement process.
Item Designation Process:
1. USDA gathers product data and vendors may voluntarily provide
product information on:
a. Technological and economic feasibility (functional performance,
commercially available, etc.).
b. Samples for testing for biobased content.
c. Information to determine environmental and public health
benefits and life cycle costs (through BEES analysis).
2. USDA extrapolates the data to describe an Item.
3. USDA issues a proposed rule to designate an Item.
4. The public comments on the proposed rule.
5. USDA takes comments into consideration.
6. USDA issues a final rule designating an Item.
7. Designated Items are posted on Web site.
8. Manufacturers/vendors are invited to post on the Web site their
specific product information under a designated Item.
Manufacturer and Vendor Guidance:
1. Manufacturers/vendors must certify the biobased products content
of their products.
2. Manufacturers/vendors may post products on Web site and may
market products with claims for:
a. Biobased products content:
(1) Must meet minimum content as defined by the designated Item
description.
(2) Content must be verified upon request from Federal agency.
(3) Verification must be based on testing by an independent testing
entity using ASTM D6866.
b. Life cycle cost information:
(1) Must be verified upon request from Federal agency.
(a) Verification must be based on testing by an independent testing
entity using (i) BEES analysis or (ii) either a third-party analysis or
an in-house analysis using ASTM D7075 standard for evaluating and
reporting on environmental performance of biobased products, including
life cycle costs.
c. Performance data, materials safety data sheets, etc.
d. Contact information.
Procurement Process:
1. The Federal agency identifies procurement need for a biobased
product that falls within a designated item.
2. The agency conducts search for qualifying biobased products
meeting this need; one tool is the informational Web site.
3. The agency issues a solicitation or uses another procurement
procedure.
4. Manufacturers/vendors respond to the solicitation.
5. The agency gives preference to qualifying biobased products
under a designated item.
a. Agencies have three exceptions to giving preference to biobased
products:
(1) Not available within a reasonable time.
(2) Does not meet performance standards.
(3) Unreasonable price.
6. The agency makes a purchase.
The product information requirements contained in these guidelines
are intended to establish standards to guide Federal agencies and
manufacturers and vendors when such information is relevant in the
context of a specific procurement. Other than certification of biobased
content, Federal agencies should request information or verification of
information only when such information will be of use to the agency in
the context of the specific procurement. The discussion of product
information in the guidelines is not intended to suggest that such
information will be relevant to all procurements. Only self-
certification of biobased content is required for all procurements of
designated items.
III. Background
On December 19, 2003, USDA published in the Federal Register (68 FR
70730) a proposed rule to establish guidelines implementing the
provisions of section 9002. As described in the proposed rule, the
guidelines would be contained in a new 7 CFR part 2902, ``Guidelines
for Designating Biobased Products for Federal Procurement.'' The new
part would be divided into two subparts, ``Subpart A--General,'' and
``Subpart B--Biobased Product Eligibility for Federal Preference.''
Subpart A would address the purpose and scope of the guidelines and
their applicability, provide guidance on product availability and
procurement, define terms used in the part, and address affirmative
procurement programs and USDA funding for testing. Subpart B would
address communicating information on qualifying biobased products and
characteristics required for obtaining designated item status, and
would set out the initial categories of designated items and minimum
content.
USDA solicited comments on the proposed rule for 60 days ending on
February 17, 2004. USDA received 271 comments from 64 commenters by
that date. The comments were from private citizens, consultants,
individual companies, industry organizations and trade groups,
nonprofit organizations, universities, a Member of Congress, and State
and Federal agencies.
With few exceptions, the commenters supported the goals of section
9002 and the proposed guidelines, although nearly all of the commenters
had specific suggestions for changes to the proposed guidelines or
raised issues related to the implementation of the program. These
suggestions and issues are addressed below by topic.
[[Page 1794]]
IV. Discussion of Comments
Many comments evidenced confusion regarding how the program would
work. In an effort to address that confusion, USDA has reorganized the
final rule into a more reader-friendly format. Along with the
reorganization, the final rule also uses more descriptive section
titles and more paragraph headings to enable readers to locate
information efficiently. Because individuals commented on specific
sections of the proposed rule, USDA is addressing the comments based on
the section numbers of the proposed rule. However, the final rule
section number is indicated after each proposed rule section number.
Applicability (Proposed Rule Sec. 2902.2; Final Rule Sec. 2902.3)
Paragraph (a) of Proposed Rule Sec. 2902.2 (Final Rule Sec.
2902.3(a)) explains that part 2902 applies to all procurements by
Federal agencies of biobased products falling within items designated
by USDA in this part, where the Federal agency purchases $10,000 or
more worth of one of those items during the course of a fiscal year, or
where the quantity of such items or of functionally equivalent items
purchased during the preceding fiscal year was $10,000 or more. The
$10,000 threshold applies to procuring agencies as a whole rather than
to agency subgroups such as regional offices or subagencies of a larger
department or agency.
One commenter stated that USDA should clarify that the $10,000
trigger for purchasing biobased products is an agency-wide requirement.
Similarly, another commenter stated that the $10,000 trigger for
purchasing biobased products must be understood by Federal agencies to
apply to the agency level and not an individual unit within an agency
or credit card holder level.
In response to these comments, USDA is revising the text of Sec.
2902.3(a) to change the word ``procuring'' to ``Federal'' and insert
``Federal'' in the phrase ``larger department or agency.'' The final
rule provides that ``the $10,000 threshold applies to Federal agencies
as a whole rather than to agency subgroups such as regional offices or
subagencies of a larger Federal department or agency.''
Some commenters raised points regarding the scope of the $10,000
threshold's applicability, with one commenter suggesting that USDA
should educate agencies on how the $10,000 minimum purchase threshold
is to be applied. With respect to who is making the purchases, one
commenter stated that the $10,000 level is reasonable if it includes
purchases made by contractors of the respective agency from outside
vendors, and another commenter suggested that the guidelines should be
applicable to State agencies and other governmental and quasi-
governmental entities that receive Federal funding. With respect to
what is being purchased, a fourth commenter stated that the $10,000
buying threshold for a product category is appropriate as long as it
applies to the product category and not to the individual product.
With respect to educating agencies on how the $10,000 minimum
purchase threshold is to be applied, USDA is developing a model
procurement program that will incorporate an educational element. USDA
anticipates that as the program enters its operational phase, the
designation of items available for procurement will naturally tend to
lend greater clarity to the program as it is practically applied.
Section 9002 does not authorize extending the guidelines to State and
local agencies using appropriated Federal funds to procure qualifying
biobased items, or to persons contracting with such agencies with
respect to work performed under such contracts. In response to the
fourth commenter, the $10,000 threshold is determined at the item
level, which is the level of designation, and not at the individual
product level.
Some commenters recommended that Federal agencies be required to
report all purchases, including government credit card purchases,
subject to the $10,000 threshold on a single purchase or cumulative
purchase of a single product type of $10,000 worth in the preceding
year for the purposes of monitoring the program's impact and agency
compliance. The resulting purchase reports could be made available in a
searchable database on the program Web site to allow manufacturers to
determine whether any of their products qualify for procurement
preference and identify any opportunities or incentives to develop
specific biobased alternatives.
As noted in the proposed rule, OFPP is required to prepare and
submit a report to Congress every 2 years on the actions taken by
Federal agencies in the implementation of the biobased product
procurement program. OFPP's report will, of course, be a public
document available for review by the public, including interested
manufacturers. Also, a manufacturer seeking information that would help
it to identify any opportunities or incentives to market or develop
specific biobased alternatives may consult the Federal Business
Opportunities Web site maintained by the GSA (http://www.FedBizOpps.gov), which provides, among other things, Federal agency
recurring procurement forecasts.
One commenter stated that there should be ``flow down'' procurement
preference to the subcontractor level, maintaining that subcontractors
are often unaware of item preferences in Federal procurements and that
such a ``flow down'' preference would ensure that small producers
always get a bid opportunity. This comment is outside the scope of this
rulemaking. It relates to the implementation of the procurement
procedures for this program, which will be accomplished through the
Federal Acquisition Regulation (FAR).
Paragraph (b) of Proposed Rule Sec. 2902.2 (Final Rule Sec.
2902.3(b) and Sec. 2902.5(c)(1)) identifies two exceptions to the
applicability of the guidelines, i.e., the guidelines do not apply to:
--Any procurement by any Federal agency that is subject to the
regulations issued by the EPA under section 6002 of the Solid Waste
Disposal Act, as amended by the Resource Conservation and Recovery Act
of 1976 (RCRA) (40 CFR part 247), to the extent that the requirements
of the guidelines are inconsistent with those regulations; or
--The procurement of motor vehicle fuels or electricity.
One commenter noted that in addition to these two exceptions to the
applicability of the guidelines, paragraph (e) of Proposed Rule Sec.
2902.11 (Final Rule Sec. 2902.5(c)(2)) also contains an exclusion from
the program for products having mature markets. The commenter suggested
that all the program exclusions be located in one place.
USDA agrees with the essence of this comment. To that end, items
excluded from consideration for designation are consolidated in Final
Rule Sec. 2902.5(c). However, because an inconsistency with
regulations implementing Section 6002 of the Solid Waste Disposal Act
is an applicability factor, and not a blanket exclusion from this
program or consideration for designation, USDA has retained that
provision in the applicability Section, now Final Rule Sec. 2902.3(b).
Additionally, because the regulations implementing section 6002 of the
Solid Waste Disposal Act are popularly known as the RCRA regulations or
RCRA guidelines, USDA revised Final Rule Sec. 2902.3(b) to acknowledge
the connection between RCRA and the Solid Waste Disposal Act.
One commenter stated that the proposed rule was ambiguous as to
whether the proposed procurement
[[Page 1795]]
requirements constitute a mandatory purchasing program or a
preferential program. This commenter asked if agencies would be
required to buy only biobased products unless one of the identified
circumstances applies, or would the biobased program be subject to some
sort of evaluative preference that goes into the procurement decision.
Section 9002 provides for preferred procurement of biobased
products by Federal agencies, and the guidelines in this final rule
reflect the statutory requirement that agencies must establish a
procurement preference program. In developing the required preference
program, Federal agencies are expected to adopt a policy that will
maximize the purchase or use of biobased products to the extent
practicable, with exceptions being made only when they: (1) Are not
available within a reasonable time; (2) fail to meet performance
standards set forth in the applicable specifications, or the reasonable
performance standards of the Federal agency; or (3) are available only
at an unreasonable price. To help clarify this and other aspects of the
program, USDA will develop a model procurement policy and program for
designated items to support its own procurement practices. The FAR also
will be amended to implement the procurement aspects of the program.
One commenter stated preferred procurement programs like the
proposed program are not the most effective mechanisms for changing or
driving environmental behaviors. This commenter maintained that product
claims regarding environmental and performance attributes could mislead
public and private sector buyers and lead to less efficient, more
costly, buying practices that would not assure more environmental
benefits. Based on this position, the commenter recommended that USDA
reconsider the ``must procure'' aspect of the program, which goes
beyond simply encouraging new markets and could lead to undue
substitution of viable products.
Section 9002 sets the basic parameters for this program. USDA must
consider the economic and technological feasibility of using items,
including life cycle costs, in designating items under this program.
Additionally, vendors must provide information about product
environmental and public health benefits, if so requested by the
procuring official (see Final Rule Sec. Sec. 2902.6 and 2902.8).
In most situations, self-certification should be satisfactory for
Federal agencies. Manufacturers and vendors are expected to verify this
information only in specific procurements where a Federal agency
expressly requires verification of environmental benefits, public
health benefits, or life cycle costs. Such information must be verified
using an analytical method authorized in these guidelines. USDA,
through these guidelines, requires verification with (a) a third-party
test using the NIST Building for Environmental and Economic
Sustainability (BEES) analytical tool or (b) either a third-party or an
in-house test using the ASTM International (ASTM) standard for
evaluating and reporting on environmental performance of biobased
products, including life cycle costs. Both BEES and the ASTM standard
are in accordance with International Organization for Standardization
(ISO) standards, are focused on testing of biobased products, and will
provide the life cycle assessment and life cycle cost information
Federal agencies might require. Such information will empower the
procuring official to consider all relevant factors and make
determinations that best meet the Federal agency's needs.
USDA Guidance on Item Availability and Procurement (Proposed Rule Sec.
2902.3; Final Rule Sec. 2902.6)
Proposed Rule Sec. 2902.3 (Final Rule Sec. 2902.6) contained a
discussion of the voluntary Web-based information site USDA intends to
maintain for manufacturers and vendors of designated items produced
with biobased products and Federal agencies. Through this Web site,
USDA intends to provide access to information as to the availability,
relative price, performance and environmental and public health
benefits of the designated items. In the proposed rule, USDA solicited
comments on the kinds of contact and product information that should be
made available on the Web-based information system, as well as comments
on the appropriate components of a model procurement program for
biobased items.
With respect to the model procurement program, one commenter asked
that, in the final rule, USDA better spell out how it will use its
model procurement program or other assistance to help other Federal
agencies in complying with section 9002. One suggestion made in this
vein by two commenters was that USDA should provide sample solicitation
and contract language that Federal agencies can insert into support
services solicitations and performance-based contracts.
USDA is in the process of developing the model procurement program
referred to in the proposed rule. It is the USDA intention to have the
model procurement program in place prior to designation of the first
items under the program. The USDA Office of Chief Economist has
forwarded these comments to USDA Departmental Administration for its
consideration in developing the model procurement program. With respect
to the provision of sample solicitation and contract language, this
comment and many similar comments reflect a misunderstanding of how
these requirements will be implemented into the Federal procurement
framework. To address this point in the guidelines, USDA added a new
paragraph (a) in Final Rule Sec. 2902.4 stating that: ``The Office of
Federal Procurement Policy, in cooperation with USDA, has the
responsibility to coordinate this policy's implementation in the
Federal procurement regulations. These guidelines are not intended to
address full implementation of these requirements into the Federal
procurement framework. This will be accomplished through revisions to
the Federal Acquisition Regulation.'' The USDA Office of Chief
Economist has forwarded these comments to USDA Departmental
Administration for its consideration in developing the model
procurement program.
One commenter was concerned that the program's procedures are too
complicated for acquisitions under the Simplified Acquisition Threshold
as defined in Sec. 2.101 of the Federal Acquisition Regulation. This
commenter was also concerned that procurement automation efforts would
be negatively affected due to the potential need to manually procure
biobased items. This comment is outside the scope of this rulemaking.
It relates to the implementation of the procurement aspects of this
program, which will be accomplished through the FAR.
One commenter, noting that procuring agencies will be looking for
articles such as truck bed liners and chairs, not ``molded plastics and
composites,'' recommended that the program Web site include links so
that products that fall under designated item groupings can be cross
referenced or displayed by product categories in a manner that will be
useful to Federal buyers. USDA appreciates the emphasis on purchasing
of end products and will take that into account in future item
designation. USDA intends to design the program Web site to be as user-
friendly as possible, which would include providing features such as
those described by the commenter.
Two commenters suggested that USDA should work closely with the
Biobased Manufacturers Association
[[Page 1796]]
(BMA) and use BMA's ``Biobased Supercenter'' as a model for the USDA
Web-based information center. One of these commenters also suggested
that USDA work with BMA to coordinate product sub-categories, classes,
and codes.
USDA will work to identify opportunities to coordinate its efforts
under the biobased preference program with the efforts of other public
and private entities with which the program has shared or overlapping
interests.
One commenter noted that procurement agencies such as the Defense
Logistics Agency (DLA) are tasked with purchasing materials identified
by their customers as necessary to perform the customers' mission and
stated that, while DLA and similar agencies can facilitate making
alternative products available and visible, the decision on product
choice will rest with the end user. This commenter recommended that the
final regulations provide that customers (end users) should specify
biobased products when ordering from Federal Supply Schedule or prime
vendor type contracts.
Section 2902.4(c) in this final rule provides that after the
publication of each designated item, Federal agencies that have the
responsibility for drafting or reviewing specifications for items
procured by Federal agencies shall ensure within a specified time frame
that their specifications require the use of that item composed of
biobased products, consistent with the guidelines. USDA will specify
the allowable time frame in each designation rule.
The proposed rule preamble stated, ``Information on relative price,
performance, and environmental and public health benefits that USDA is
required to provide to Federal agencies will be gathered from
manufacturers and vendors at the individual product level. This
information, to be of maximum value to Federal agencies in making
procurement decisions, must be considered at an individual product
level.'' One commenter objected to the notion of gathering
environmental and public health information directly from vendors of
biobased products. Instead, this commenter stated, USDA must establish
a set of standards that must be met by vendors who want their products
to qualify. The commenter asserted that, to be truly useful, those
standards must address safety and health effects on workers,
performance, costs (of purchase, use, and disposal), and environmental
impact.
As noted in the proposed rule, we intend to gather information on
the relative price, performance, and environmental and public health
benefits of specific products from industry using a Web site to which
manufacturers and vendors of products that fall within designated items
will be invited to voluntarily provide information, including
availability of the products with biobased content that they offer to
Federal agencies. Final rule Sec. 2902.6(a) also includes biobased
content among the information to be provided on the Web site. The Web
site will employ a standardized format with interactive capabilities
that will permit manufacturers and vendors to enter information into
the Web site. Final rule Sec. 2902.6(a) clarifies that the Web site
will provide instructions for the posting of information. USDA will
periodically audit the information displayed on the Web site and, where
questions arise, contact the manufacturer or vendor to verify, correct,
or remove incorrect or out-of-date information. In addition, USDA added
to Final Rule Sec. 2902.6(a) a general requirement that manufacturers
and vendors, when requested, be able to verify any relevant product
characteristic information provided to Federal agencies. USDA believes
that these procedures, along with the fact that the designation process
for each item will provide USDA and the public with an opportunity to
consider the economic and technological feasibility, including life
cycle costs, of items and the types of products that would fall within
each item grouping, will ensure that the factors identified by the
commenter are adequately considered.
Definitions (Proposed Rule Sec. 2902.4; Final Rule Sec. 2902.2)
With respect to the definition of biobased product, one commenter
noted the use of the term ``renewable domestic agricultural materials''
and asked for clarification of the ``domestic'' qualifier. Does it
refer to the origin of the agricultural materials, or to where the
agricultural materials were turned into usable feedstock? The commenter
stated that agricultural materials are sourced from all around the
world, and that producers may be unable to certify that a particular
raw material is ``domestic.'' On this same subject, one commenter noted
that in section 9002, the qualifier ``domestic'' appears to apply only
to renewable agricultural materials, and not to biological products,
and asked that USDA clarify whether that is indeed the case.
The statutory definition refers to ``biological products or
renewable domestic agricultural materials (including plant, animal, and
marine materials) or forestry materials.'' 7 U.S.C. 8101(2). USDA
considers the qualifier ``domestic,'' as well as the qualifier
``renewable,'' to apply to both agricultural materials and forestry
materials. Given that the statute refers to the materials themselves
and not to, for example, domestically processed materials, USDA
construes an intent to promote the use of U.S. origin agricultural and
forestry materials.
Also with respect to the definition of biobased product, one
commenter noted there was no reference to products manufactured
primarily from ``naturally occurring microorganisms'' and asked if such
products were being considered for inclusion in the program. To the
extent that these products would be composed in whole or in part of
biological products, such products would fall within the definition of
biobased product.
One commenter stated there appeared to be an inconsistency between
the definition of ``biobased content'' and the provisions of Proposed
Rule Sec. 2902.11(d)(1) (Final Rule Sec. 2902.7(c)). The proposed
definition of ``biobased content'' stated, in part, ``[t]otal product
weight may be calculated exclusive of water or other inactive
ingredients, fillers and diluents,'' while Proposed Rule Sec.
2902.11(d)(1) stated ``[b]iobased content shall be determined based on
the weight of the biobased material (exclusive of water and other non-
active ingredients, fillers, and diluents) divided by the total weight
of the product and expressed as a percentage.'' The commenter stated it
was confusing as to whether total product weight is determined with or
without inactive ingredients, including inorganic materials. On this
same subject, another commenter stated that, in order to realistically
promote the introduction of biobased products, the biobased content
should--not ``may'' as in the definition--be defined exclusive of
water, pigments, fillers, rheology modifiers, additives, and other
inactive materials.
USDA agrees that the definition of ``biobased content'' needs
clarification. In order to be consistent with the ASTM International
Radioisotope Standard Method that USDA is requiring for determining and
certifying biobased content, the term ``biobased content'' is defined
in this final rule as the amount of biobased carbon in the material or
product as a percent of the weight (mass) of the total organic carbon
in the product. This calculation excludes all inorganic material in the
product. USDA similarly revised Final Rule Sec. 2902.7(c) to be
consistent with the revised definition in Final Rule Sec. 2902.2.
[[Page 1797]]
One commenter suggested that, to eliminate confusion, a definition
of ``biodegradable'' should be added to the definitions section of the
guidelines, as well as a note elsewhere in the guidelines that a
biobased product is not necessarily a biodegradable product, i.e., that
biodegradability is a characteristic that must be addressed and
qualified separately.
As biodegradability is a characteristic that will be a
consideration in the designation of some items but not others, USDA
does not think that it is necessary to add a definition of the term in
this final rule. USDA will, however, propose to define the term in a
future rulemaking when it is appropriate in the context of the item or
items being considered for designation, which will give the public an
opportunity to comment upon the proposed definition.
The same commenter suggested that a definition of ``total
manufactured value'' be added to the guidelines to help clarify the use
of the term in Proposed Rule Sec. 2902.11.
As discussed later in this document, USDA has removed the ``5
percent of total manufactured value'' criterion from the guidelines in
this final rule. Thus, it is not necessary to define the term.
One commenter stated that the definitions in the final guidelines
should be inclusive rather than exclusive, thus food crops and food
waste should have equal footing and utilization of agricultural and
animal waste should be given equal, if not special, consideration over
virgin agricultural food crops.
USDA considers the definitions in the guidelines to be inclusive.
The statute and the guidelines focus on promoting the use of biobased
products generally, without special emphasis on any particular class of
biobased product.
In addition to the above changes made in response to specific
comments, USDA is making several other minor technical or stylistic
changes to the definitions of ``Biobased product,'' ``Designated
item,'' and ``Sustainably managed forests.'' USDA is substituting
``USDA'' for ``Secretary'' in the definition of ``Biobased product'' to
reflect the fact that the Secretary has delegated this authority within
USDA and need not make such determinations personally. USDA revised the
definition of ``Designated item'' to replace the term ``category'' with
``generic grouping'' because the use of the term ``category'' in the
proposed rule generated confusion. In that same definition, USDA added
``biobased'' to modify ``products'' to clarify that the generic group
was of ``biobased products.'' Also in that definition, because of the
reorganization from the proposed rule to the final rule, USDA replaced
the reference to ``Sec. 2902.12'' with ``subpart B.'' Regarding the
definition of ``Sustainably managed forest,'' USDA added ``Refers to
the'' at the beginning of the definition. Finally, in addition to these
minor changes, USDA wants to clarify the origin of the definition of
``Small and emerging private business enterprise.'' That definition is
based on the USDA Rural Business Service definition of the same term
used in the Rural Business Enterprise Grant Program (see 7 CFR
1942.304).
Preferred Procurement Program (Proposed Rule Sec. 2902.5(b); Final
Rule Sec. 2902.4(b))
Under Proposed Rule Sec. 2902.5(b) (Final Rule 2902.4(b)(1)),
agencies would be required to develop a procurement program that will
assure that products that fall within designated items composed of
biobased products will be purchased to the maximum extent practicable,
consistent with applicable provisions of Federal procurement laws. Such
programs would provide for preferential purchasing of products that
fall within designated items unless the items are not available within
a reasonable time, fail to meet performance standards, or are available
only at an unreasonable price.
Several commenters focused on the ``unreasonable price'' criterion.
Some of the commenters simply stated that USDA must provide guidance to
Federal agencies as to what constitutes an ``unreasonable price'' or,
conversely, what a ``reasonable price'' would be. Other commenters
suggested that USDA should formulate a quantifiable ``allowable
premium'' that procurement officials may pay, similar to that allowed
for the purchase of recycled paper, that takes into account the
socioeconomic and environmental benefits of using biobased products
instead of petrochemical or mineral products. Flat 10, 15, and 20
percent premiums were suggested, as was a one percent premium for each
10 percent of biobased content.
The reasonable/unreasonable assessment, which the statute and the
guidelines offer for consideration with respect to both the price of a
product and the amount of time in which it would be available, is an
assessment that USDA thinks must be made by the procurement official in
the context of a specific procurement. Through the biobased program Web
site and other initiatives, USDA will attempt to provide as much
relevant information as possible for those procurement officials to
consider. In the end, however, it will be agency procurement officials,
acting in accordance with their agencies' particular procurement
programs and the FAR, who will have to decide how to best meet the
procurement needs of their agencies.
Other commenters sought a greater emphasis on value, rather than
price. One of those commenters suggested that Federal agencies should
be required to purchase biobased products despite initial price
differentials, unless they can demonstrate through a full life-cycle
analysis that the non-biobased product is a better value. Another
commenter stated that USDA should clarify, quantify, and incorporate
the concept of ``best value'' in its guidelines for Federal purchasing.
In identifying the ``best value,'' some commenters stated, USDA should
quantify the benefits of creating a new economic sector in rural
America, the environmental benefits of using biobased products, and the
national security and economic benefits of reduction of dependence on
imported fossil fuels. One of these commenters concluded by suggesting
that information by suppliers that documents ``best value'' should be
included on the program Web site and a maximum allowable premium for
biobased products should be set at 10 percent over a non-biobased
alternative after a best value comparison.
The above comments relate to the implementation of the procurement
aspects of this program, which will be accomplished through revisions
to the FAR. The law provides the ``unreasonable price'' exemption, but
application of this exemption will likely be based on a comparison of
product price, price of alternative products, life cycle costs, and
other benefits. In many, perhaps most, cases this will involve
nonquantifiable determinations or determinations that can only be made
by the procuring agency. Therefore, USDA believes that the degree to
which such factors are incorporated into the procurement system can
best be addressed through the implementing regulations in the FAR.
One commenter was concerned that the proposed program may be too
cumbersome and too easily circumvented by unwilling procurement
specialists. Similarly, other commenters were concerned that price and
availability considerations may provide loopholes allowing purchasing
agents to circumvent the original intent of section 9002 and suggested
that exceptions to the purchasing requirement should be kept to a
minimum. Some of these commenters stated that USDA needs to
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provide explicit guidance to agencies to ensure that agencies do not
use price to avoid their obligation to ``buy biobased,'' with one
commenter stating that cost, in and of itself, is no excuse not to
purchase biobased products. These commenters suggested that USDA
guidance provide for the consideration of a variety of factors, such as
product lifespan, energy savings, reduced disposal costs, reduced
health and safety costs, environmental benefits, and compliance with
other governmental ``green'' initiatives.
The guidelines in this final rule reflect the statutory parameters
for making procurement decisions. That is, agencies must give a
preference to designated biobased items unless the items:
--Are not reasonably available within a reasonable period of time;
--Fail to meet the performance standards set forth in the applicable
specifications or fail to meet the reasonable performance standards of
the procuring agencies; or
--Are available only at an unreasonable price.
In addition to the statutory parameters, USDA has set forth
recommended procurement practices in these guidelines. Those
recommended procurement practices include acceptable standards for
determining biobased content and product attributes. USDA encourages
procurement officials to consider a product's life cycle costs and
environmental and public health benefits when appropriate in the
context of a specific procurement, but USDA is not in a position to
mandate consideration of and establish specific qualifying standards
for all possible products for all procurements.
Proposed Rule Sec. 2902.5(a) (Final Rule Sec. 2902.4(c)) stated,
in part, that ``Within 1 year after the publication date of each
designated item, Federal agencies that have the responsibility for
drafting or reviewing specifications for items procured by Federal
agencies shall ensure that their specifications require the use of
designated items composed of biobased products, consistent with the
guidelines in this part.'' One commenter offered that it may be
possible for agencies to conduct a review of their specifications
within the specified year, but that the development of new or revised
specifications resulting from such reviews may not be possible within
that time frame.
USDA expects that the required reviews and revisions of
specifications will be an ongoing process, and certainly not a one-time
effort that would overwhelm most agencies. USDA agrees with the
commenter to the extent that the comment expresses that the one-year
time frame might not be appropriate in all instances. To that end, USDA
has revised Final Rule Sec. 2902.4(c) to remove ``Within 1 year'',
insert ``within a specified time frame'', and indicate that ``USDA will
specify the allowable time frame in each designation rule.''
One commenter stated that the guidelines need to take into account
the fact that more Government purchasing organizations are using
methods involving long-term contracts, often in the 5- to 10-year
range, in order to ensure supply continuity and realize savings. The
commenter pointed out that some items that may be designated in the
future will likely have non-biobased competition that is already on a
long-term contract, and that the guidelines need to provide some
flexibility in such cases, as changing those contracts would entail
substantial time, effort, and costs. Along these same lines, one
commenter stated that biobased procurement should become a mandatory
feature of any new contracts or contract renewals, but simply
encouraged in the context of existing contracts. These comments relate
to the implementation of the procurement aspects of this program, which
will be accomplished through the FAR.
Funding for Testing (Proposed Rule Sec. 2902.6; Final Rule Sec.
2902.9)
As discussed in the proposed rule, section 9002 provides to USDA $1
million per year for each of the fiscal years 2002 through 2007 to
support the testing of biobased products to carry out the provisions of
the section. Section 9002 further provides that USDA, at its
discretion, may ``give priority to the testing of products for which
private sector firms provide cost sharing for the testing.'' In the
proposed guidelines, Sec. 2902.6 (Final Rule Sec. 2902.9) described
the manner in which available funds for testing would be allocated and
the priority-setting mechanism USDA would use to evaluate proposals for
cost sharing. Under Proposed Rule Sec. 2902.6(a) (Final Rule Sec.
2902.9(a)), USDA will use these funds directly for biobased content
testing and environmental/public health benefits testing using the BEES
Analysis. Once USDA begins the cost sharing programs, USDA will provide
cost sharing under Proposed Rule Sec. 2902.6(b) (Final Rule Sec.
2902.9(b)) for environmental and public health benefits testing, using
the BEES Analysis, and for performance testing.
One commenter stated that while funding for testing was desirable,
such funding should not be ``wasted on frivolous testing of products
that are not already well down the path for qualification.'' This
commenter stated that the funding should instead be directed toward
simplifying the process so that the maximum number of vendors can
perform the testing necessary to qualify products in the most cost-
effective manner. The commenter encouraged USDA to use the funding to
fill in limited data gaps to expedite designation of items, as
discussed in the proposed rule.
USDA thinks that both the USDA-supported testing described in
Proposed Rule Sec. 2902.6(a) (Final Rule Sec. 2902.9(a)) and the cost
sharing criteria described in Proposed Rule Sec. 2902.6(b) (Final Rule
Sec. 2902.9(b)) address directly the points raised by the commenter.
With limited funding for testing, USDA is keenly aware of the need to
maximize the usefulness of those resources.
With respect to the setting of priorities for the distribution of
testing funds described in the proposed rule, one commenter encouraged
USDA to give priority to products with a higher minimum biobased
content, while another commenter stated that priority should be given
to the funding of testing for products developed by small companies
located in rural areas.
Once USDA has concluded that a critical mass of items has been
designated, USDA will exercise its discretion to make cost sharing a
more determinative factor in product testing. Paragraph (b)(3) of Final
Rule Sec. 2902.9 provides that cost-sharing proposals will be
considered first for high priority products of small and emerging
private business enterprises, which would include the small companies
in rural areas identified by one of those commenters. Proposals for
cost sharing will be prioritized, with rating points assigned based on
the product's market readiness, the potential size of the market for
that product in Federal agencies, the financial need for assistance of
the manufacturer or vendor, the product's prospective competitiveness
in the market place, and the product's likely benefit to the
environment. If funds remain available, proposals from other than small
and emerging private business enterprises will be considered, based on
those same priority factors. These factors will allow USDA to give
favorable consideration to products with higher biobased content and
products developed by smaller companies.
In response to these and the previous comments, USDA reorganized
and revised Final Rule Sec. 2902.9(b)(2) and (3) to clarify these
points. Final Rule
[[Page 1799]]
Sec. 2902.9(b)(2) and (3) make clear that USDA will use these criteria
to rank the priority of both small and emerging private business
enterprise proposals and other producer proposals. Final Rule Sec.
2902.9(b)(3) also clarifies that USDA will consider first only ``high
priority'' products of small and emerging private business enterprises
before considering proposals for products of other producers of
biobased items. In other words, after considering all ``high priority''
proposals for products of small and emerging private business
enterprises, USDA will consider all remaining cost sharing proposals
together, including both the remaining proposals for products of small
and emerging private business enterprises and all proposals for
products of all producers of biobased items. These clarifications help
ensure that this framework will result in the efficient and cost-
effective use of these funds to further the program objectives.
In addition, USDA made several minor technical revisions in Final
Rule Sec. 2902.9(b). In paragraph (b)(1), USDA revised ``testing of
biobased products to carry out this program'' to reference the testing
that would be funded under paragraph (b)(4) and the applicable testing
standards from Sec. 2902.8. The revised phrase reads ``life cycle
costs, environmental and health benefits, and performance testing of
biobased products in accordance with the standards set forth in Sec.
2902.8 to carry out this program.'' USDA also revised paragraph (b)(4)
to replace the first reference to BEES with the phrase ``life cycle
costs and environmental and health benefits'' and to strike the second
reference to BEES. These revisions are to make this section consistent
with Final Rule Sec. 2902.8, as discussed below.
One commenter recommended that USDA should provide opportunities
for colleges and universities to gain the necessary funding to develop
the capacity to conduct the performance, health effects, and
environmental testing necessary for the designation of biobased
products; in the future, these institutions could also perform the
carbon dating and BEES analyses provided for by the guidelines.
USDA agrees that building such capacity would be consistent with
the goals of section 9002. However, the funds made available under
section 9002(j)(2) are ``to support testing of biobased products.''
These funds are not available for capacity building of colleges and
universities, nor is the focus of section 9002 institutional capacity
building. Within USDA, the Cooperative State Research, Education, and
Extension Service (CSREES) mission includes capacity building. The
Office of Energy Policy and New Uses (OEPNU) will discuss this comment
with CSREES as part of overall USDA biobased program coordination.
Communicating Information on Qualifying Biobased Products (Proposed
Rule Sec. 2902.10; Final Rule Sec. 2902.6)
As proposed, paragraph (a) of Proposed Rule Sec. 2902.10 (Final
Rule Sec. 2902.6) would require that manufacturers be able to verify
the biobased content in their products. The level of biobased content
in a product would have to be determined using the ASTM International
standard that is a Radioisotope Standard Method (D 6866) to distinguish
between carbon from fossil resources and carbon from renewable sources.
Several commenters weighed in on the use of the ASTM International
Radioisotope Standard Method for determining the level of biobased
content in a product; however, only one of those commenters fully
supported its use. While the one supportive commenter noted that the
method can produce results in as little as 2 days at a cost of $305,
many other commenters objected to the costs and delays that would be
associated with the use of the method, especially with respect to
products that are already being marketed. While several commenters
referred to the testing as ``costly,'' other commenters simply stated
that the costs associated with the testing were unknown and that USDA
must provide more cost information before requiring such testing.
According to information USDA received from Iowa State University,
which is conducting some testing under a cooperative agreement with
USDA, test results could be expected in 2 to 4 weeks at a cost of $250
to $500 per sample, depending on the specific methodology used. USDA
anticipates that each item designation will address minimum biobased
content for that item. Therefore, manufacturers and vendors must know
the biobased content of their products in order to know whether the
products qualify under a designated item. Manufacturers and vendors
must be able to certify that information to the procuring official.
Adoption of a standard test method is necessary for the integrity of
this program, providing a degree of certainty for Federal agencies,
manufacturers, and vendors. A standard test method informs
manufacturers and vendors of the standard against which their products
and their competitors' products will be judged, and Federal procuring
officials of the standard to apply, should questions arise.
It is notable that no commenters proposed alternative standard test
methods. Because use of a standard test method is essential for
successful program implementation, USDA considers the projected costs
and testing periods associated with the ASTM International Radioisotope
Standard Method to be reasonable. Additionally, given the benefits that
could be expected to accrue to a manufacturer or vendor as a result of
a product being eligible for the procurement preference, it would
appear that a $250 to $500 investment for testing would be viewed as a
worthwhile business investment.
In response to comments regarding the expense and time required for
biobased content, BEES, and performance testing of specific products
(the latter addressed in more detail below), USDA revised the final
rule to provide alternatives to BEES, simplified the provision
addressing biobased content test data for products that are essentially
the same formulation and extended this concept to environmental and
health effects and life cycle cost test data and in part to performance
test data. Final Rule Sec. Sec. 2902.7(d) and 2902.8(a) clarify that
biobased content and BEES or the other ASTM biobased product standards
test data need not be brand-name specific for products that are
essentially the same formulation. Regarding performance test data,
Final Rule Sec. 2902.8(b) leaves to the discretion of the procuring
official whether such test data must be brand-name specific. The
different standard for performance test data recognizes that even minor
changes to a formulation may impact critical performance
characteristics, and thus the sufficiency of test data for a product
that is essentially the same formulation must be determined on a case-
by-case basis by the procuring official. Proposed Rule Sec.
2902.11(d)(2) had presented this concept in a more confusing manner and
as limited to biobased content testing.
Several commenters suggested that USDA should accept manufacturers'
self-certification as to biobased content levels, and that the ASTM
International Radioisotope Standard Method should be required only if a
product's biobased content level was challenged by an agency,
competitor, or consumer. To support the idea of self-certification, two
of these commenters noted that RCRA regulations (40 CFR part 247) do
not require affirmative tests to determine if wastes meet the toxicity
characteristics of hazardous waste.
Under Proposed Rule Sec. 2902.10(a) (Final Rule Sec. 2902.6(a),
Sec. 2902.7(a), and
[[Page 1800]]
Sec. 2902.8) manufacturers and vendors are expected to provide
relevant information to Federal agencies, upon request, with respect to
product characteristics. This requirement is essentially the same as
the self-certification described by the commenters. The same paragraph
goes on to provide that manufacturers and vendors must be able to
verify the biobased content in their products, and that the ASTM
International Radioisotope Standard Method must be used to determine
the level of biobased content in the product. Because biobased content
is a key element in the statutory and regulatory framework, procuring
officials, when necessary, must be able to request verification of
biobased product content of products offered under specific
procurements. Statutory requirements of this program differ from those
of the program noted by the commenters. To reaffirm this position, USDA
revised Final Rule Sec. 2902.7(a) to state that ``Upon request,
manufacturers and vendors must provide'' such verification information
in lieu of the text in Proposed Rule Sec. 2902.11(b) that ``Federal
agencies and USDA may request''. USDA encourages Federal agencies to
request such verification only when necessary.
Several commenters were concerned about the method itself. Some
noted that the Radioisotope Standard Method had not yet been approved
by ASTM, and stated that only consensus standards should be used. Other
commenters stated that the test is new and untried and the results may
not reflect actual biobased content. Two of these commenters stated
that the \14\C/\12\C ratio measurement must be used with considerable
caution, if at all; if it is required, USDA must allow for test error
in setting the minimum content for a product.
The Radioisotope Standard Method is now an ASTM consensus standard
(ASTM D 6866), thus USDA is confident that it has moved beyond the
``new and untried'' stage. USDA added the ASTM number in the text of
Final Rule Sec. 2902.7(c). With respect to the potential for test
errors, this ASTM method, like any other test, should produce results
that are repeatable, and thus could be verified in the event that a
manufacturer or vendor disagreed with the level of biobased content
indicated in the test results.
As proposed, paragraph (b) of Sec. 2902.10 (Final Rule 2902.8(a))
would require manufacturers and vendors to use the BEES analytical tool
to provide information on life cycle costs and environmental and health
benefits to Federal agencies, when asked.
Some commenters stated that the regulations should provide for the
use of other appropriate analytical tools for generating life cycle
costs information in addition to BEES, including life cycle costs
assessments conducted by product manufacturers or their contractors.
Three of these commenters appeared to be basing this suggestion on the
existence of other analytical methodologies, with two suggesting
ISO14040 and the third suggesting that the EPA Environmental Technology
Verification (ETV) Program could be used in place of, or as a
supplement to, BEES. Two other commenters suggested that additional
tools should be available because, while BEES may be appropriate for
some categories and items, it may not be the best alternative for all
of them, with one commenter pointing to the differences between
traditionally produced biobased products and those produced using
biotechnology. One of those commenters stated that while quantitative
methods are needed to support environmental attributes, producers
should have the flexibility to choose the most appropriate tools, as
long as they are scientifically based; recognized by standards
organizations, such as ISO or ASTM; and include peer review to ensure
accuracy. In a similar vein, one commenter suggested that manufacturers
should be able to substantiate claims related to biobased product
content and environmental performance themselves using ISO-compliant
methodologies, with the BEES life cycle model then being applied to
determine life cycle costs.
USDA, in response to public comments, has concluded that
alternative methods may be used to verify environmental and health
effects and life cycle costs. Manufacturers and vendors must provide
the necessary information by using either (a) the BEES analytical tool
along with the qualifications of the independent testing entity that
performed the tests, or (b) either a third-party or an in-house
conducted analysis using ASTM D7075, the standard for evaluating and
reporting on environmental performance of biobased products, including
life cycle assessment and cost analysis for biobased products. Both
BEES and the ASTM standard are in accordance with ISO standards, are
focused on testing of biobased products, and will provide the life
cycle assessment and life cycle cost information Federal agencies might
require. USDA believes the above noted tests are particularly well
suited for the needs of this program.
Several commenters objected entirely to the required use of BEES.
The reasons given were: (1) BEES may require the release of
confidential trade secret information; (2) BEES testing will be an
undue burden on producers, especially small producers, which may
eliminate some operations from participation in the program; and (3)
other Federal programs, such as RCRA, do not require such testing. One
commenter stated that manufacturers should be allowed to use BEES if
they believed it would be useful to their own marketing efforts, but
that BEES should not be required generally.
In response to these concerns, USDA offers the following: (1) The
security of confidential trade secret information will be an issue
between the manufacturer or vendor and the laboratory performing the
BEES analysis. USDA expects that the contractual agreement between the
two involved parties would address the issue of business information
security. (2) In accordance with the procedures outlined in Final Rule
Sec. 2902.9, USDA will provide some funding for BEES, ASTM
environmental testing, and performance testing of individual products
with biobased content, with priority being given to products of small
and emerging private business enterprises. (3) In designating items,
section 9002 requires USDA to consider the economic and technological
feasibility of using the items, including life cycle costs. Such life
cycle costs can be ascertained through the use of the BEES analytical
tool and the ASTM environmental testing standard.
Several commenters objected to the required use of BEES for
biobased products--a requirement termed a burden by some--when there
was no similar requirement for competing non-biobased products. These
commenters questioned the usefulness of BEES-generated life cycle and
other information in the absence of comparable information related to
competing products, with one commenter stating the goal of such testing
should be to compare biobased products with petroleum-based products.
Another commenter suggested that some of the testing funds that would
be available should be used to test established, competing products. A
third commenter stated USDA should eliminate the use of BEES analyses
unless competing non-biobased products are required to have BEES
analyses. Finally, one commenter recognized that BEES would result in a
level playing field for biobased products, but stated that biobased
product manufacturers and vendors should not be required to provide
more
[[Page 1801]]
data than other manufacturers and vendors offering products for sale to
Federal agencies.
USDA agrees that it would be quite useful to be able to make a
point-by-point comparison, using the same standards of measure, between
a biobased and a non-biobased product prior to making a procurement
decision. However, under section 9002, USDA has neither the authority
to require nor the funding for the testing of non-biobased products.
Even absent comparable data for non-biobased products, USDA thinks that
BEES test data, or test data from the ASTM standard for evaluating and
reporting on environmental performance of biobased products and the
ASTM standard for life cycle cost analysis, for biobased products will
have utility for the procuring officials in making procurement
decisions. Test data from these two alternative sources will facilitate
procuring official consideration of non-price factors, such as life
cycle costs, in making procurement decisions. To that end, the final
rule retains the requirement that manufacturers and vendors provide
such information upon request. However, USDA encourages Federal
agencies to request verification only when necessary.
Regarding the comment advocating allowing manufacturers and vendors
to perform environmental attribute tests in-house, USDA is requiring in
Final Rule Sec. 2902.8(a) only that, when requested to provide
environmental and health effects and life cycle test data,
manufacturers and vendors use a third-party BEES analysis or either a
third-party or in-house analysis using the ASTM standard for evaluating
and reporting on environmental performance of biobased products.
Several commenters questioned the need for manufacturers to have BEES
testing conducted at the product or item level. Most of these
commenters stated that BEES should not be required for each product,
with some suggesting that one generic product should be allowed to
serve as a standard bearer for a group of products and others
suggesting that qualifications should be done by product formulations
within a category.
As described in the proposed rule, USDA will compile information on
the economic and technological feasibility, including life cycle costs,
of biobased items from industry. Once this information is available on
a sufficient number of such products within an item, the information
will be evaluated and extrapolated to the generic item level for use in
meeting the requirements of section 9002 that such information be
considered in designating an item for preferred procurement. USDA added
a new paragraph to that effect in Final Rule Sec. 2902.5(b) in order
to clarify this concept in the guidelines. Additionally, as discussed
above, in the case of products that are essentially the same
formulation, but marketed under different brand names, the manufacturer
or vendor could apply test data from one product to other such
products.
Other commenters stated that USDA itself should use BEES to provide
generic information at the item level, perhaps using the testing
funding discussed in Final Rule Sec. 2902.9. Another commenter was
concerned that the designation of items will be delayed due to the
reluctance of manufacturers to pay the costs associated with a BEES
analysis only to have other manufacturers use the resulting information
for their own products, getting, in essence, a ``free ride.''
USDA is already using BEES testing to provide generic information
at the item level, and is funding BEES testing for those products that
it has identified as representing the best opportunity to designate
items expeditiously. USDA does not think the ``free ride'' issue
brought up by one commenter necessarily would discourage a manufacturer
from proceeding with BEES testing or any other efforts that might be
required under the program as long as that particular manufacturer had
concluded that the benefits of program participation outweighed the
costs.
As proposed, Sec. 2902.10(c) (Final Rule Sec. 2902.8(b)) would
require that, in assessing performance of qualifying biobased products,
Federal agencies rely on results of performance tests using applicable
ASTM, ISO, Federal or military specifications, or other similarly
authoritative industry test standards. Such testing must be conducted
by a third party ASTM/ISO compliant test facility.
With respect to performance testing, one commenter cautioned that
USDA needs to recognize the difference between performance
specifications and product specifications. For example, motor oil has a
Society of Automotive Engineers (SAE) standard, which is a product
specification, not a performance specification. Thus, saying that a
biobased motor oil should meet the SAE standard may not be applicable
unless that standard was based on performance testing.
USDA is aware of that distinction and will work with manufacturers
and testing facilities to ensure that the appropriate criteria are
applied with respect to performance testing.
Another commenter was concerned that trying to determine whether a
company's product meets the performance standards could add
unacceptable lead-time to procurements, if the company is not required
to have the necessary testing completed prior to its submission of an
offer.
USDA expects that the program Web site will be the primary
interface between procuring agencies and the manufacturers/vendors of
biobased products; the latter will be expected to provide sufficient
information regarding their products--including performance data--when
they post their products on the website. This comment also relates to
the implementation of the procurement aspects of this program regarding
which USDA defers to OFPP.
Several commenters objected to the third-party performance testing
requirements. One of those commenters stated that such testing was not
required by section 9002. Several other commenters suggested that
third-party testing should not be a general requirement, with
manufacturers being required only to offer their own evidence and proof
that their products meet or exceed Federal agency requirements. One
commenter stated that third-party testing should be required only for
critical applications (e.g., required for specialized lubricants, but
not for landscaping material). Several other commenters suggested that
testing should be required only in the event of a challenge to a
manufacturer's claims.
While section 9002 may not specifically require testing, the
statute requires USDA to provide such information to agencies. In this
final rule, USDA has retained the requirement for manufacturers and
vendors to use test results obtained from testing against industry
accepted performance standards (e.g., ASTM, ISO, Military
Specifications, etc.) for their product. While performance testing is
not required for program participation, the final rule requires that
manufacturers and vendors provide this information to Federal agencies
when requested. USDA encourages Federal agencies to request such
information only when necessary. USDA revised Final Rule Sec.
2902.8(b) to require that ``Results from performance tests completed
must be available to Federal agencies upon their request, along with
the qualifications of the testing laboratory.'' USDA encourages third-
party testing to support the integrity of this program.
[[Page 1802]]
Characteristics Required for Obtaining Designated Item Status (Proposed
Rule Sec. 2902.11; Final Rule Sec. 2902.5 and Sec. 2902.7)
As proposed, paragraph (a) of Sec. 2902.11 would require that all
qualifying items under the program have at least five percent of their
total manufactured value (measured after manufacture at the location of
manufacture) made up of biobased product(s). Proposed paragraph (b)
(Final Rule Sec. 2902.7(b)) went on to explain that the minimum
biobased content requirements for specific items, once designated,
refer to the biobased portion of the product, and not the entire item.
The specific product requirements would be in addition to the five
percent total manufactured value requirement in proposed paragraph (a).
Several commenters addressed the proposed ``five percent of total
manufactured value'' provision. Some of those commenters requested that
USDA clarify the standard, stating that readers may confuse five
percent total manufactured value with five percent biobased content.
Other commenters asked how the standard would be applied to components
versus completed end products. One commenter asked why USDA would
require two certifications from manufacturers and vendors--i.e., a
self-certification with respect to the five percent of total
manufactured value and a third-party certification with respect to the
biobased content of a specific product--when the latter alone should
suffice. Finally, one commenter stated that manufacturers and vendors
do not understand the need for the five percent manufactured value
test, noting that section 9002 did not require such a test and that the
value will be difficult to determine.
USDA has reviewed the proposed ``five percent of total manufactured
value'' provision and, after considering the comments received on the
subject, has decided to remove that provision from the guidelines in
this final rule. USDA retained in Final Rule Sec. 2902.7(b) the
explanation that minimum biobased content requirements refer to the
biobased portion of a product, and not the entire product. However, in
light of the removal of the ``five percent of total manufactured
value'' provision and the revised definition of ``biobased content''
(discussed above), USDA revised Final Rule Sec. 2902.7(b) to add the
phrase ``Unless specified otherwise in the designation of a particular
item,'' in order to preserve USDA flexibility should application of the
minimum biobased content requirements to only the biobased portion of a
product be inappropriate or insufficient for a particular item
contemplated for designation. The proposed rule to designate an item
will address biobased content and provide an opportunity for public
comment.
Proposed paragraph (c) of Sec. 2902.11 (Final Rule Sec.
2902.8(a)) deals with verifying the biobased content of products by
third party ASTM/ISO compliant test facilities using the ASTM
International Radioisotope Standard Method. The comments received
regarding the ASTM standard are discussed previously above. Similarly,
the comments received regarding proposed paragraph (d) (Final Rule
Sec. 2902.7(c) and (d)), which deals with determining biobased content
of products, are addressed above in the discussion regarding the
definition.
Under proposed paragraph (e) of Sec. 2902.11 (Final Rule Sec.
2902.5(c)(2)), products having mature markets would be excluded from
the program. For purposes of this program, a product would be
considered to have a mature market if it fell within any of the
following groups:
--Silk, cotton and wool garments, household items, and industrial or
commercial products unless made with a substantial amount of biobased
plastic product.
--Wood products made from traditionally-harvested forest materials.
--Products having significant national market penetration prior to
1972.
USDA received comments both for and against the exclusion of
products having mature markets. The commenters who supported the
exclusion agreed that the intent of section 9002 was to aid the
development of new and emerging markets, and not to focus on already
mature traditional markets or articles that are inherently biobased.
While the commenters who opposed the exclusion did not dispute that the
focus should be on developing markets, they argued that such a goal
should not necessarily mean that products having more established
markets should be excluded from the program. To these commenters, the
goal of section 9002 was to increase overall demand for biobased
products, which leaves room for the inclusion of proven, existing
technology in the program. In this vein, some commenters objected to
the exclusion of wood and other products from the guidelines, stating
that such exclusions fail to consider the overall societal benefits
resulting from the use of biobased materials over petrochemical-based
materials. With respect to the exclusion of products having significant
national market penetration prior to 1972, one commenter stated that
the age of a product is not necessarily an indicator of its market
maturity, that the 1972 cutoff is arbitrary and possibly contrary to
the goals of section 9002, and that the guidelines should offer a
greater degree of flexibility.
The intent of section 9002, as described in the conference report
accompanying FSRIA, ``is to stimulate the production of new biobased
products and to energize emerging markets for those products.'' Given
that, USDA finds that it is entirely appropriate for the guidelines to
exclude products having mature markets from the program. However, after
considering the comments received on the subject, USDA has amended the
guidelines in this final rule by removing the proposed exclusions for
``silk, cotton, and wool garments, household items, and industrial or
commercial products unless made with a substantial amount of biobased
plastic product'' (Proposed Rule Sec. 2902.11(e)(1)) and ``wood
products made from traditionally-harvested forest materials'' (Proposed
Rule Sec. 2902.11(e)(2)). The exclusion of certain wood products was
considered unnecessary in light of the definition of ``Forestry
materials'' in Final Rule Sec. 2902.2 as ``materials derived from the
practice of planting and caring for forests and the management of
growing timber. Such materials must come from short rotation woody
crops (less than 10 years old), sustainably managed forests, wood
residues, or forest thinnings.''
Further, USDA considered the likelihood that there are biobased
products that have come full circle, i.e., products that were in
widespread use at some point prior to 1972 but then supplanted by
petroleum-based products. To account for this, USDA has changed the
``significant national market penetration'' criterion from ``prior to
1972'' to ``in 1972.'' As explained in the proposed rule, the oil
supply and price shocks that began in this country around 1972 provided
the impetus for sustained serious new development of biobased
alternatives to fossil-based energy and other products; in addition to
that new development, there also was a return to existing, perhaps
neglected or underutilized, biobased products. USDA thinks that using
1972 as a point in time standard, rather than a dividing line between
two eras, can provide for the designation of some items that would
otherwise be excluded.
[[Page 1803]]
Items and Minimum Biobased Content (Proposed Rule Sec. 2902.12; Final
Rule 2902.5(a) and Subpart B)
As discussed in the proposed rule, Sec. 2902.12 will contain a
list of items that are designated for procurement preference, as these
items are designated by rule making, and will provide the minimum
biobased content for each listed item. Although USDA did not propose to
designate any specific items in the proposed rule, USDA did present a
number of items in the preamble of the proposed rule that it identified
as illustrative of the items it intends to propose for designation for
preferred procurement after USDA has sufficient information on
availability of the items and the economic and technological
feasibility of using such items, including life cycle costs.
One commenter noted that there was no time line provided in the
proposed rule for the future designation of products and asked that
USDA, in the final rule, provide a prioritized ``wish list'' ranking
product types in order of strategic importance to the United States and
the likelihood of their acceptance under the program assuming they meet
requirements of competitiveness in cost, availability, and performance.
As noted above and in the proposed rule, USDA will be unable to
propose specific items for designation until it has sufficient
information on availability of the items and the economic and
technological feasibility of using such items, including life cycle
costs. Without such information, USDA cannot speculate as to the
likelihood of the designation of any item under the program. Further,
given that the program is still in its infancy, it would be premature
to assign any ``strategic importance'' to specific items or classes of
items. The rationale and process for the designation of each item will
be detailed in the proposed rule to designate that item, and will be
open to public comment. USDA notes, however, that it have already has
begun the preliminary work necessary to initiate rulemaking to
designate several items and hopes to have that rulemaking concluded
before the end of the year.
In the proposed rule, USDA specifically solicited comments on the
categories and items it presented, as well as on the reasonableness of
the suggested biobased content percentages. USDA received numerous
comments in response to that request, along with many suggestions for
additional items, categories, and subcategories. USDA appreciates the
many detailed suggestions and insights offered by the commenters
regarding items and biobased content percentages, the standards and
specifications that should be taken into account when designating
particular items, and other technical considerations related to those
items; USDA will fully consider that information as we move forward
with the process of designating items. Because no items are designated
in this final rule, USDA will not address any of the specific, item-
oriented comments that it received. However, USDA also received a
number of more general comments regarding item designations and
biobased content; those comments are discussed below.
In the proposed rule, USDA presented the items contemplated for
future designation as being grouped according to category, with each
category consisting of one or more items; each item consists of
specific products offered by manufacturers and vendors. That is, an
item is made up of individual products and a category consists of
items. One commenter objected to this manner of arranging products,
claiming that Congress intended ``item'' to refer to an actual product
purchased, not to a generic grouping of products as USDA has used the
word. This same commenter pointed out that ASTM's ``Standard Guide for
the Determination of Biobased Content, Resource Consumption, and
Environmental Profile of Materials and Products'' (ASTM D 6852)
proposed a classification scheme/decision tree for biobased materials
and products and suggested that USDA adopt that or a similar approach
for developing its classification framework. The commenter recommended
that, to refer to the generic grouping, USDA should use the terms
``biobased product group'' and ``biobased material group,'' which would
accommodate what appears to be USDA's intention to designate both end
products and the materials used to produce end products.
USDA does not think that there is any conflict between the statute
and the proposed guidelines with respect to the use of the term
``item.'' While the statutory phrase, ``the quantity of such items or
of functionally equivalent items,'' could be read as to equate ``item''
as the guidelines use ``product,'' USDA finds that the end result of
either approach would be the same, i.e., the designation process will
result in specific products being identified for procurement
preference. For the sake of clarity, USDA has amended the definition of
``designated item'' in this final rule by replacing the word
``category'' with ``generic grouping.'' As amended, the definition
reads: ``A generic grouping of products identified in Subpart B that is
eligible for the procurement preference established under section 9002
of FSRIA.'' For example, hydraulic fluid for stationary uses could
constitute an item. Company ABC's branded hydraulic fluid could
constitute a product.
Several commenters voiced other concerns regarding the items,
categories, and minimum content levels presented in the preamble of the
proposed rule. As noted in the proposed rule, the items and the
indicated biobased content of items contained within the categories
were based on a study conducted in 2002 for the USDA Agricultural
Research Service by Concurrent Technologies Corporation (CTC).
Some commenters pointed to the age of the CTC study and stated it
must be updated before it can be used as the basis for describing
categories. These commenters stated that the study does not reflect the
current availability of items and that the categories in the study were
inconsistent with the categories in the proposed rule. One commenter
suggested that USDA should convene a group of industry representatives
and government purchasing agents to develop a list of categories and
items that will be clear both to product manufacturers and purchasing
agents. Several other commenters were concerned that neither the CTC
study nor the information presented by USDA in the proposed rule
offered any technical basis or justification for the minimum content
levels that were offered. Without a well-documented, transparent, and
strong technical basis for setting minimum biobased content levels, the
proposed minimum content levels appear arbitrary.
The minimum content levels in the CTC study were based on data
provided by industry, academic, and government experts. In the proposed
rule, USDA did not propose to designate any items; rather, the
presentation of the categories, items, and minimum biobased content
levels was intended to stimulate the submission of comments in those
areas. As USDA will designate items using notice-and-comment rulemaking
procedures, items will not be designated without (1) an explanation of
the rationale for designation of an item and its proposed attributes,
including minimum content levels, and (2) an opportunity for public
comment upon the proposed designation and supporting information.
One commenter suggested that a standard other than minimum content
be used to qualify products under the rule. Specifically, this
commenter suggested that USDA use a ``total
[[Page 1804]]
biobased content impact equation'' that would more adequately take into
account: (1) The functionality of the biobased component of a product
(i.e., is the biobased component key to the functionality or an add-
on?); (2) the impact of use of the product on the consumption of
petroleum stocks from the perspective of product composition; and (3)
the impact on rural economies through the utilization of domestic
agricultural inputs.
As a practical matter, USDA thinks that biobased content should be
a primary consideration, given that section 9002 requires agencies to
give procurement preference to items composed of the highest percentage
of biobased products practicable. However, the statute requires USDA
take into account product availability, technological and economic
feasibility, including life cycle costs, in designating items. USDA is
also required to provide information for Federal agencies use on
availability, price, performance, and environmental and public health
benefits.
Another commenter stated that USDA should not set minimum biobased
content levels, which can have undesirable ``floor and ceiling''
effects (i.e., the merits of products with content below the minimum
level would not be considered, and manufacturers would have little
incentive to exceed the minimum level). Instead, USDA should simply
require that the manufacturer post the biobased content level on the
product.
Section 9002 provides that USDA will, where appropriate, recommend
the level of biobased material to be contained in the procured product.
The process of designating items would take into account the concerns
of the commenter by ensuring that issues such as biobased content vs.
performance are addressed in an open, transparent fashion.
One commenter stated that, in the interest of reconciling the
minimum content levels presented in the proposed rule with the BMA's
self-certification system already in place, USDA should adopt just four
minimum standards (15, 36, 66, or 86 percent) to be applied as
appropriate. This approach would reconcile the USDA minimums to BMA
minimums with only minor adjustments in most cases to the USDA minimums
presented in the proposed rule and allow for the use of the four
content ratings already established by BMA and used by manufacturers
(i.e., BMA-25 for products ranging from 15 to 35 percent biobased
content, BMA-50 for the 36 to 65 percent range, BMA-75 for the 66 to 85
percent range, and BMA-100 for products that are 86 percent biobased or
better).
While the idea of adopting an existing industry classification
system is appealing, USDA is bound to consider the charge in section
9002 that each Federal agency which procures any items designated in
such guidelines shall, in making procurement decisions, give preference
to such items composed of the highest percentage of biobased products
practicable. With that in mind, using only four content ratings would
mean that agencies would be unable to capture the distinction between,
for example, a BMA-50 rated product with 36 percent biobased content
and one with 65 percent biobased content.
One commenter recommended that one product alone should be
sufficient to establish an ``item,'' citing the infancy of the biobased
industry and the likelihood that, at least initially, only a single
product may be available that meets the necessary performance and other
requirements of a particular application.
Given that the intent of section 9002 is largely to stimulate the
production of new biobased products and to energize emerging markets
for those products, USDA agrees with the commenter that the
identification of even a single biobased product could serve to trigger
the designation of an item.
One commenter suggested that the final rule should include a
reasonable deadline for USDA to give manufacturers or vendors a
decision on whether a product that a manufacturer or vendor has
submitted to USDA for item designation has ``survived the filtering
process,'' i.e., whether a particular product may be eligible or
appropriate for designation. The commenter suggested a time frame not
to exceed 30 days from the date of submission.
These guidelines do not establish a formal process for manufacturer
or vendor initiation of designation of items. While USDA welcomes
manufacturer or vendor suggestions, USDA has no formal process or
deadlines to respond to such suggestions. USDA added the last sentence
in Final Rule Sec. 2902.5(a) to clarify this point. USDA will post on
its Web site, http://www.biobased.oce.usda.gov, a pro forma list of
possible items for designation. In developing this list, USDA will
consider a number of factors, including, but not limited to, the cost
competitiveness of an item, whether performance of the products within
an item meet Federal requirements, availability of products within an
item, interest by manufacturers in the preferred procurement program,
and potential Federal demand for the product. USDA will be gathering
information on a range of specific products that fall under an item to
determine the certain characteristics of that item, to meet the
statutory requirements that USDA consider availability of items and the
economic and technological feasibility of using such items, including
life cycle costs, when considering the designation of a given item. In
this process, USDA will be seeking both that information and indication
of interest in providing the information from manufacturers and
vendors. To the extent that the commenter is asking USDA whether a
specific product falls under a specific designated item, there is no
filtering process. Where manufacturers and vendors believe their
products fall under a designated item, they are free to assert coverage
under the preferred procurement program when marketing the products to
Federal agencies.
Two commenters urged USDA to designate only final products, not the
components of those products. Both pointed out that Federal agencies
purchase finished products, and suggested that designating the
components of products would be confusing to purchasers and make it
more difficult for them to ``buy biobased.''
Section 9002 states that, in its guidelines, USDA shall designate
those items which are or can be produced with biobased products and
whose procurement by procuring agencies will carry out the objectives
of the statute. With that in mind, USDA agrees that the items
designated should correlate to the degree possible with the products
routinely purchased by Federal agencies.
One commenter urged USDA to, at least initially, focus its energies
on designating items that are composed primarily of biobased material,
rather than items that may have components that may have biobased
content.
As noted earlier in this document, the first few years of the
program will focus on identifying and testing those items that can be
designated in the most expeditious manner possible. It is likely that
those items will be indeed largely of the type described by the
commenter.
On the subject of biobased components, one commenter cautioned
against designating items that incorporate biobased feedstocks into
non-degradable, non-durable applications. Such items, the commenter
stated, would break the closed loop cycle that can be achieved by
composting, necessitate the separation of such items from other
[[Page 1805]]
compostable materials such as food scraps, and create competition
between such items and those items that are both biobased and
biodegradable, which will only confuse the end users and harm the
growth of the overall biobased sector.
USDA acknowledges the validity of the considerations raised by the
commenter. In the course of designating items in the future, such
considerations would play a role when compostability is a factor in the
economic and technological feasibility of using such items.
Several commenters asked for clarification regarding the minimum
content standard. One commenter stated that there were inconsistencies
in the minimum content levels offered in the proposed rule, noting that
a biobased polymer could qualify for preference when used as the sole
component of an item in the plastics category, but not if it was used
to produce synthetic fibers used in clothing or carpet. Another
commenter used a similar example to frame the question: A minimum
biobased content level is set for a durable film; is that content level
for the durable film itself, or for the finished product that
incorporates the durable film? Yet, another commenter further stated
that USDA must make clear what products with biobased components
qualify for preferred procurement.
The minimum content levels will apply to designated items. If the
durable film in the one commenter's example is the designated item,
then the minimum content level will apply to the durable film. If a
finished product that incorporates that durable film is a designated
item, then that product must meet the minimum content level for the
item under which that product falls. Through subsequent proposed and
final rules, USDA will designate items; qualifying products that fall
under those designated items will qualify for preferred procurement.
One commenter suggested that only products having a minimum of 65
to 70 percent biobased content be eligible to be designated for
preferred procurement under the program. Other commenters also sought
to maximize biobased content in designated items, with one commenter
stating that products with the highest biobased content--everything
else being equal--must be preferred over products with lower biobased
content, and the other urging USDA to eliminate all language in its
rules on this program that undermine the ``highest percentage of
biobased products practicable'' directive from Congress.
While the 65 to 70 percent minimum recommended by the one commenter
would certainly ensure a high level of biobased content in designated
items, such a high level of biobased content is not realistically
obtainable for many items, which means that entire classes of articles
with lower content levels would be excluded from the program. USDA
fully agrees with the goals expressed by the other commenters, and does
not think that the guidelines contain any provisions that would
undermine section 9002's requirement to give preference to products
with the highest percentage of biobased products practicable.
One commenter suggested that rather than determining biobased
content on an item-by-item basis, USDA should focus on determining the
biobased content of ingredients; with that information, the total
biobased content of a product could simply be determined by adding the
content of its ingredients. This commenter stated that the ASTM
International Radioisotope Standard Method could be used to determine
biobased content of ingredients, and a database of results could be
maintained and used to determine quickly whether a product would
qualify for designation.
Section 9002 focuses on the biobased content of the product itself.
Section 9002(e) requires USDA to set forth recommended practices with
respect to certification by vendors of the percentage of biobased
products used and, where appropriate, recommend the level of biobased
material to be contained in the procured product. Given those
requirements, as a policy matter USDA has decided that the process of
setting minimum content standards on an item-by-item basis described in
the proposed rule and these final guidelines is necessary and
practical.
One commenter stated that rather than developing a finite list of
biobased products for preferred procurement, USDA should: (1) Develop
standard formulas for calculating biobased content; (2) develop a
biobased content label for ease of product comparison (somewhat like
the USDA organic labeling system); and (3) publish regularly updated
product bulletins reporting the latest in biobased product
availability.
Section 9002 requires, among other things, that USDA: (1) Designate
items that are or can be produced with biobased products; (2) provide
information as to the availability, relative price, performance, and
environmental and public health benefits of those items; and (3) in
making designations, consider the availability of such items. Taken
together, these requirements demand the development of a list; to the
extent that such a list would be a ``living document'' subject to
updates as often as appropriate, it would serve the same function as
the regular bulletins suggested by the commenter. USDA's electronic
information system will include information on designated items and
will post information voluntarily submitted by manufacturers or vendors
on the products they intend to offer for preferred procurement under
each item designated.
Looking beyond the initial setting of minimum biobased content
levels and designation of items, three commenters addressed the subject
of subsequent adjustments to established minimum content levels. Two of
those comments simply pointed out the need for USDA to create a
mechanism to adjust minimum content levels for items to reflect the
development of new technologies and product refinements over time,
perhaps by seating a standing review committee of experts from the
manufacturing, academic, public interest, government, and consumer
sectors. The third commenter suggested that adjustments to minimum
biobased content levels should be made no more often than once every
five years. This would be sufficient time to allow products with higher
biobased content to be developed while providing an adequate ``useful
life'' for products meeting existing standards. Without a five-year
assurance, producers may be reluctant to invest in products for fear
that they may become stranded when new levels are set.
USDA currently does not anticipate the need to make the sorts of
adjustments described by the commenters. Minimum content levels will be
set as items are designated, and agencies will be provided with
information on, among other things, the biobased content of specific
products within the designated items. Section 9002 requires that
agencies purchasing designated items give preference to those products
that have the highest percentage of biobased products practicable. If
competitive factors lead vendors to increase the biobased content of
their products, those increases would not necessarily invalidate the
minimum content levels expressed in the guidelines.
Three commenters addressed the relationship between minimum
biobased content levels and product performance. One commenter simply
stated that USDA must take into account a product's end use, and the
performance necessary to function properly in that use, when setting
[[Page 1806]]
minimum biobased content. The other two commenters suggested that, in
general, minimum percentages should be set at the lower end of a range
in order for biobased products to meet necessary performance standards
and be cost competitive. Still other commenters, most often referring
to specific items or generic groupings of items, urged USDA to apply or
reference the existing standards used by manufacturers (for example,
the American Petroleum Institute (API) and SAE standards for
lubricants) when preparing performance, content, and other
specifications during the designation process.
USDA expects that evidence of performance will be a very important
factor in Federal agencies' decisions to procure an item, and that in
most cases biobased items can be manufactured with a blend of
components that enable them to meet required performance standards. It
is in the best interests of the program for minimum biobased content to
be set at levels that will realistically allow products to possess the
necessary performance attributes and allow them to compete with fossil
energy based products in performance and economics. The goal of section
9002 is to promote the use of biobased products to the extent possible,
and that goal would not be served by requirements for unrealistically
high biobased content levels. In many cases, especially for users of
high performance items in Federal agencies, formal evidence of
performance may be required, and these guidelines encourage agencies to
request this information from manufacturers or vendors of designated
items, focusing on performance against ASTM, ISO, Federal or military
specifications, or other industry performance standards.
One commenter asked if energy is produced from biomass using the
gasification/steam reforming process, would that energy, if offered for
sale to Federal agencies, qualify for procurement preference under the
proposed program? While the commenter did not specify, it appears that
the energy he is referring to is electricity. As provided by paragraph
(i) of section 9002, these guidelines do not apply to the procurement
of electricity.
One commenter noted that, under EPA's regulations in 40 CFR part
279, generators of used oil are not required to determine whether their
oil displays any hazardous waste characteristics; however, under Sec.
279.1 of those regulations, ``used oil'' is limited only to those spent
oils that have been refined from crude or synthetic oils. Thus, oils
derived from vegetable or animal sources are specifically excluded from
used oil regulation, which means that generators of used bio-oils will
be required to determine if those oils display any hazardous waste
characteristics (which could have been acquired by the bio-oil during
its usage). The commenter urged USDA to work with EPA in developing a
workable and environmentally sound strategy for managing spent bio-oils
before any items in this category are designated, arguing that any
benefits that might be gained through conserving petroleum resources
could be undermined by the more stringent hazardous waste management
standards that would have to be met by users of bio-oils.
USDA agrees that it is important that these sorts of issues be
addressed in order to prevent the unintended consequences highlighted
by the commenter from complicating efforts to attain the goals of
section 9002. However, this final rule is not the appropriate place to
address the commenter's point. In an effort to address this concern,
USDA will, therefore, initiate a dialog with our counterparts at EPA
before designating bio-oils that could, after use, potentially be
considered hazardous waste.
One commenter expressed broad and far-reaching concerns regarding
the program and the proposed rule, mainly with respect to its potential
negative impact on the procurement of non-biobased products in general
and non-biobased plastics in particular. This commenter brought up a
variety of issues on the subject, including: (1) The veracity of claims
relating to the compostability/biodegradability of biobased materials,
especially in light of the lack of municipal solid waste composting in
the United States; (2) the potential for such claims to mislead buyers
and the public into assuming that biobased materials are always
environmentally preferable to non-biobased materials, especially when
there appears to be little in the guidelines in the way of
substantiating claims of compostability/biodegradability; (3) the
potential for the proposed ``U.S.D.A. Certified Biobased Product''
label to further reinforce those mistaken consumer perceptions; (4) the
potential for the program as a whole to lead consumers to neglect the
broader benefits of non-biobased products; and (5) the failure of the
proposed rule's economic analysis to address adequately the potential
economic impact of the program's displacement of non-biobased products
in the marketplace.
In designating items, USDA will consider the item's compostability
and biodegradability to the extent that these factors are relevant to
the economic and technological feasibility of the item, including life
cycle costs. As discussed below, USDA has yet to prepare eligibility
criteria and guidelines for the use of the ``U.S.D.A. Certified
Biobased Product'' label. Finally, in the proposed rule's discussion of
the Regulatory Flexibility Act, USDA acknowledged that the program may
decrease opportunities for small businesses that manufacture or sell
non-biobased products or provide components for the manufacturing of
such products. However, USDA cannot address the potential economic
effects of designating an item--positive or negative--on affected
entities until it is prepared to propose that item for designation and
has conducted the analyses needed to support the proposal.
Comments on Planned Labeling Program and Other Issues
In the preamble of the proposed rule, USDA discussed the provisions
of section 9002 that direct USDA, in consultation with the
Administrator of the EPA, to establish a voluntary program authorizing
producers of biobased products to use a ``U.S.D.A. Certified Biobased
Product'' label. USDA indicated that in a subsequent rulemaking it
would establish that voluntary program and provide eligibility criteria
and guidelines for the use of the ``U.S.D.A. Certified Biobased
Product'' label.
Two commenters urged USDA to move forward as quickly as possible
with the labeling aspect of the biobased program. Two other commenters,
however, urged caution. These commenters raised several specific
concerns about the potential impact the label could have on market and
consumer perceptions--e.g., an assumption that a labeled product is
automatically ``better'' or ``more environmentally friendly'' than an
unlabeled product--and argued that a simple label cannot adequately
communicate necessary information about life cycle results,
performance, and environmental health benefits. Without qualifying the
claims or disclosing the relevant information, one commenter claimed,
misinterpretation of the label by consumers and government purchasers
is virtually assured. Another commenter stated that any products that
have been subjected to a BEES analysis should be automatically eligible
to use the ``U.S.D.A. Certified Biobased'' label without further
analysis or rulemaking.
Section 9002 provides that USDA, in consultation with the
Administrator of
[[Page 1807]]
the EPA, will issue criteria for determining which products may qualify
to receive the label. The statute intends that those criteria will
encourage the purchase of products with the maximum biobased content,
and should, to the maximum extent possible, be consistent with the
guidelines in this final rule. In the proposed rule, in order to signal
USDA thinking on the subject, USDA described its view of the potential
parameters of the labeling program. Those parameters were not
definitive; indeed, numerous other considerations such as those
described by the commenters will be considered as USDA drafts the
criteria for determining which products may qualify to receive the
label. Once drafted, the specific criteria that USDA develops in
consultation with EPA will be presented in a proposed rule; the public
will have a meaningful opportunity to comment upon the scope and
adequacy of the criteria, and comments received will be considered
before the criteria become final.
One commenter noted that the FAR will require revision in order for
agencies to fully implement the new biobased content product purchasing
program and encouraged USDA to coordinate with Federal agencies in
preparing the draft changes to the FAR. As previously discussed, the
FAR will be revised to implement the procurement aspects of the
program.
One commenter stated that USDA should recognize agencies' past
green purchasing efforts by recommending that agencies revise their
existing plans to incorporate a biobased purchasing preference rather
than creating a separate program solely for purchasing biobased
products. This comment is outside the scope of this rulemaking. It
relates to the implementation of the procurement aspects of this
program, which will be accomplished through revisions to the FAR.
Several commenters addressed the relationship between the proposed
biobased program and existing ``green'' and other purchasing
initiatives already underway within the Federal Government or the
private sector. These commenters stressed the need for coordination
between the USDA program and others such as EPA's RCRA programs, the
Department of Energy's (DOE's) Energy Star program, the consensus
standards of the Green Seal organization, and the U.S. Green Building
Council's Leadership in Energy and Environmental Design (LEED) system
for sustainable building construction. To illustrate this point, one
commenter noted that EPA is considering the designation of recycled-
content roofing materials under RCRA, DOE has made recommendations for
energy efficient and Energy Star roofing materials, and USDA could
consider the designation of biobased-content roofing materials. This
commenter suggested that USDA should coordinate its designation of
products with EPA and DOE, with the goal of seamlessly integrating the
purchasing of biobased products into the existing green purchasing
infrastructure.
Section 9002 requires specific actions on the parts of USDA, OFPP,
and individual agencies. Similarly, EPA and DOE are charged with
specific mandates with respect to RCRA and Energy Star. In some
respects, the language of the enabling statutes that gave rise to these
and similar programs may limit the extent to which the implementing
agencies can coordinate these programs. USDA, to the extent
practicable, will strive to coordinate the biobased preference program
with existing green purchasing programs.
One commenter suggested that all compost materials, and perhaps
other products in the landscaping products category, should be added to
the JWOD Procurement List as ``mandatory buy'' items in order to
streamline product introduction and reduce procurement costs. (JWOD
refers to the Javits-Wagner-O'Day Program, a Federal employment and job
training program for people who are blind and/or have severe
disabilities.)
Under the JWOD Act, it is the Committee for Purchase from People
Who Are Blind or Severely Disabled that is responsible for determining
which commodities and services procured by the Federal Government are
suitable to be furnished by qualified nonprofit agencies employing
persons who are blind or have other severe disabilities. Thus it is the
committee, and not USDA, that would add such items to the JWOD
Procurement List.
Therefore, for the reasons given in the proposed rule and in this
document, USDA adopts the proposed rule as a final rule, with the
changes discussed in this document.
V. Regulatory Information
A. Executive Order 12866, Regulatory Planning and Review
It is estimated this final rule will not adversely affect or have
an annual effect of $100 million or more on the economy. The actual
designation of items under this program through future rulemaking
actions are what will have an effect on the economy. The extent of the
impact necessarily can be determined only at the time of those future
rulemaking actions and will be addressed at that time. This rule does
not designate any items. Each time an item is proposed for designation,
USDA will evaluate the economic effect of that designation.
Furthermore, this rule will not create a serious inconsistency or
otherwise interfere with prior or intended actions of another agency,
will not materially alter the budgetary impact of grants or similar
programs or the rights of recipients thereof, and does not raise novel
legal or policy issues. For the above reasons, this rule has been
determined to be not significant for purposes of Executive Order 12866
and, therefore, has not been reviewed by the Office of Management and
Budget (OMB).
B. Regulatory Flexibility Act
When an agency issues a final rule following a proposed rule, the
Regulatory Flexibility Act (RFA, 5 U.S.C. 601-612) requires the agency
to prepare a final regulatory flexibility analysis. 5 U.S.C. 604.
However, the requirement for a final regulatory flexibility analysis
does not apply if the head of the agency certifies that the rule will
not, if promulgated, have a significant economic impact on a
substantial number of small entities. 5 U.S.C. 605(b).
Although this program ultimately may have a direct impact on a
substantial number of small entities, USDA has determined that this
rule itself will not have a direct significant economic impact on a
substantial number of small entities. This rule will affect directly
primarily Federal agencies. Private sector manufacturers and vendors of
biobased products voluntarily may provide information to USDA through
the means set forth in this rule. However, the rule imposes no
requirement on manufacturers and vendors to do so, and does not
differentiate between manufacturers and vendors based on size. USDA
does not know how many small manufacturers and vendors may opt to
participate at this stage of the program.
As explained above, when USDA issues a proposed rulemaking to
designate items for preferred procurement under this program, USDA will
assess the anticipated impact of such designations, including the
impact on small entities. USDA anticipates that this program will
impact small entities which manufacture or sell biobased products. For
example, once items are designated, this program will provide
additional opportunities for small businesses to manufacture and sell
[[Page 1808]]
biobased products to Federal agencies. This program also will impact
indirectly small entities that supply biobased materials to
manufacturers. Additionally, this program may decrease opportunities
for small businesses that manufacture or sell non-biobased products or
provide components for the manufacturing of such products. Again, USDA
cannot assess these anticipated impacts on small entities until USDA
proposes items for designation. This rule does not designate any items.
The rule will directly impact small entities by implementing a
cost-sharing program which gives first consideration to proposals for
products of ``small and emerging business enterprises.'' Submission of
a proposal is voluntary and not limited to small entities. The direct
impact would be beneficial for those entities whose products are
selected for cost sharing. Because of the limited amount of funds
available for cost sharing, the ceilings on cost sharing, and the
anticipated breadth of any competition (not limited to a particular
manufacturing sector and open to other than small entities), USDA does
not anticipate that this cost-sharing competition will have a
significant economic impact on a substantial number of small entities.
Accordingly, USDA hereby certifies that this rule will not have a
significant economic impact on a substantial number of small entities.
C. Executive Order 12630
This rule has been reviewed in accordance with Executive Order
12630, Governmental Actions and Interference with Constitutionally
Protected Property Rights, and does not contain policies that would
have implications for these rights.
D. Executive Order 12988
This rule has been reviewed in accordance with Executive Order
12988, Civil Justice Reform. This rule does not preempt State or local
laws, is not intended to have retroactive effect, and does not involve
administrative appeals.
E. Executive Order 13132
This rule does not have sufficient federalism implications to
warrant the preparation of a Federalism Assessment. Provisions of this
rule will not have a substantial direct effect on States or their
political subdivisions or on the distribution of power and
responsibilities among the various government levels.
F. Unfunded Mandates Reform Act of 1995
This rule contains no Federal mandates under the regulatory
provisions of Title II of the Unfunded Mandates Reform Act of 1995
(UMRA), 2 U.S.C. 1531-1538, for State, local, and tribal governments,
or the private sector. Therefore, a statement under Section 202 of UMRA
is not required.
G. Executive Order 12372
For the reasons set forth in the Final Rule Related Notice for 7
CFR part 3015, subpart V (48 FR 29115, June 24, 1983), this program is
excluded from the scope of the Executive Order 12372, which requires
intergovernmental consultation with State and local officials. This
program does not directly affect State and local governments.
H. Executive Order 13175
The policies contained in this rulemaking do not have tribal
implications and thus no further action is required under Executive
Order 13175.
I. Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
3501 through 3520), USDA published notice of the proposed information
collection with the proposed rule on December 19, 2003 (68 FR 70730).
During the course of program implementation, USDA realized that it
overestimated the overall average burden per respondent in that notice
and underestimated the number of respondents during the first three
years of item designation under the program. Therefore, USDA is
republishing herein a revised proposed information collection notice.
Comments addressing the revised proposed information collection should
be submitted to the Office of Information and Regulatory Affairs of
OMB, Attention: Desk Officer for Agriculture, Margaret Malanoski, 725
17th Street, NW., Room 10202, Washington, DC 20503. Comments should be
submitted within 30 days of the date of publication of this notice. In
the interim, USDA has received through emergency processing short-term
information collection approval by OMB under OMB control number 0503-
0011. The short-term information collection approval will expire on
March 31, 2005.
Title: Guidelines for Designating Biobased Products for Preferred
Procurement.
Abstract: The USDA Federal Biobased Products Preferred Procurement
Program (FB4P) provides that qualifying biobased products that fall
under items (generic groupings of biobased products) that have been
designated for preferred procurement by rule making are required to be
purchased by Federal agencies, with certain limited exceptions. USDA is
required by section 9002 to gather certain information on items before
it can designate them by rule making. Further, USDA also is required by
section 9002 to provide certain information on qualified biobased
products to Federal agencies. To meet those statutory requirements,
USDA will use a number of forms to gather that information from
manufacturers and vendors of biobased products. To the extent feasible,
the information sought by USDA can be transmitted electronically using
the Web site http://www.biobased.oce.usda.gov. If electronic
transmission of information is not practical, USDA will provide
technical assistance to support the transmission of information to
USDA. The information collected will enable USDA to meet statutory
information requirements that then permit USDA to designate items for
preferred procurement under FB4P. Once items are designated,
manufacturers and vendors of qualifying biobased products that fall
under these designated items will benefit from preferred procurement by
Federal agencies.
USDA currently has identified 83 potential items for designation
and estimates there may be on average 30 separate products per item.
Designation of items will begin after publication of this final rule
for the FB4P. While it is expected that additional items will be
identified over time as the biobased products industry develops and
matures, it is not expected that there will be a rapid increase in the
number of items beyond the number identified thus far. Because of
fiscal year (FY) 2005 appropriations to support this program, USDA
intends to place special emphasis on designating by rule making as many
of the 83 identified items as possible during the next three fiscal
years. USDA hopes to designate by rule making between 40 and 50 items
during FY 2005. The balance of the currently identified items are
expected to be designated by rule making during FY 2006 and FY 2007.
For designating items, USDA estimates collecting information from
an average of five manufacturers per item proposed for designation.
USDA estimates that each manufacturer will expend 80 hours per response
to the information collection.
Once an item is designated, OEPNU will invite manufacturers and
vendors of biobased products that fall under that item to post product
and contact information about their qualifying
[[Page 1809]]
biobased products on the USDA Web site http://www.biobased.oce.usda.gov. This Web site will be a major source of
product information for Federal agencies seeking to purchase biobased
products. Information requested will include identification of products
offered for preferred procurement within a designated item, contact
information for the manufacturer or vendor, and demographic information
about the manufacturer or vendor that will assist Federal agencies in
reporting on the performance of the preferred procurement program.
Additional information will be sought regarding availability; relative
prices of the products; performance of the products; and environmental
and public health benefits. This information may be included on the Web
site or a hotlink may be established to manufacturers' or vendors' web
sites to access the information. The information sought for this
voluntary Web site is envisioned to be non-proprietary.
USDA estimates that it will require 4 hours per product of
manufacturers' or vendors' time to post this information, and that
there will be an average of 30 products per item eligible to be posted.
Many items will have fewer than 30 products in the marketplace,
however. Thus, for example, 30 products each from 50 items would create
a burden of 6,000 hours of manufacturers' time in FY 2005. Thus, the
total manufacturers' time burden for FY 2005, if 50 items are
designated by rule making, would be 26,000 hours.
Beyond FY 2007, new item designations would slow dramatically and
be premised on development of new biobased products that did not fit
into already designated items.
Estimate of Burden: Public reporting burden for this collection of
information is estimated to average 14.9 hours per response.
Respondents: Manufacturers and vendors of biobased products.
Estimated Number of Respondents: 2,905.
Estimated Number of Responses Per Respondent: One per manufacturer
or vendor.
Estimated Total Annual Burden on Respondents: 14,387 hours one time
only. Manufacturers and vendors are asked to respond only once per
product. Thereafter, there is no ongoing annual paperwork burden on
respondents.
USDA invites written comments on: (a) Whether the proposed
collection of information is necessary for the proper performance of
the functions of the agency, including whether the information will
have practical utility; (b) the accuracy of the agency's estimate of
the burden of the proposed collection of information, including the
validity of the methodology and assumptions used; (c) ways to enhance
the quality, utility, and clarity of the information to be collected;
and (d) ways to minimize the burden of the collection of the
information on those who are to respond, including through the use of
appropriate automated, electronic, mechanical, or other technological
collection techniques or other forms of information technology.
After receipt of notification of OMB action on this request for
information collection approval, USDA will publish a notice in the
Federal Register to inform the public of OMB's decision.
J. Government Paperwork Elimination Act Compliance
OEPNU is committed to compliance with the Government Paperwork
Elimination Act (GPEA) (44 U.S.C. 3504 note), which requires Government
agencies in general to provide the public the option of submitting
information or transacting business electronically to the maximum
extent possible. For information pertinent to GPEA compliance related
to this rule, please contact Marvin Duncan at (202) 401-0532.
K. Small Business Regulatory Enforcement Fairness Act
This rule is not a major rule under 5 U.S.C. 804(2), the Small
Business Regulatory Enforcement Fairness Act. This rule will not have
an annual effect on the economy of $100 million or more; will not cause
a major increase in costs or prices for consumers, individual
industries, Federal, State, or local government agencies, or geographic
regions; and does not have significant adverse effects on competition,
employment, investment, productivity, innovation, or the ability of
U.S.-based enterprises to compete with foreign-based enterprises.
List of Subjects in 7 CFR Part 2902
Biobased products, Procurement.
0
For the reasons stated in the preamble, the Department of Agriculture
is amending 7 CFR chapter XXIX as follows:
CHAPTER XXIX--OFFICE OF ENERGY POLICY AND NEW USES, DEPARTMENT OF
AGRICULTURE
0
1. The chapter heading of chapter XXIX is revised to read as set forth
above.
0
2. A new part 2902 is added to chapter XXIX to read as follows:
PART 2902--GUIDELINES FOR DESIGNATING BIOBASED PRODUCTS FOR FEDERAL
PROCUREMENT
Subpart A--General
Sec.
2902.1 Purpose and scope.
2902.2 Definitions.
2902.3 Applicability to Federal procurements.
2902.4 Procurement programs.
2902.5 Item designation.
2902.6 Providing product information to Federal agencies.
2902.7 Determining biobased content.
2902.8 Determining life cycle costs, environmental and health
benefits, and performance.
2902.9 Funding for testing.
Subpart B--Designated Items [Reserved]
Authority: 7 U.S.C. 8102.
Subpart A--General
Sec. 2902.1 Purpose and scope.
(a) Purpose. The purpose of the guidelines in this part is to
assist Federal agencies in complying with the requirements of section
9002 of the Farm Security and Rural Investment Act of 2002 (FSRIA),
Public Law 107-171, 116 Stat. 476 (7 U.S.C. 8102), as they apply to the
procurement of the items designated in subpart B of this part.
(b) Scope. The guidelines in this part designate items that are or
can be produced with biobased products and whose procurement by Federal
agencies will carry out the objectives of section 9002 of FSRIA.
Sec. 2902.2 Definitions.
These definitions apply to this part:
Agricultural materials. Agricultural-based, including plant,
animal, and marine materials, raw materials or residues used in the
manufacture of commercial or industrial, nonfood/nonfeed products.
ASTM International. ASTM International, a nonprofit organization
organized in 1898, is one of the largest voluntary standards
development organizations in the world with about 30,000 members in
over 100 different countries. ASTM provides a forum for the development
and publication of voluntary consensus standards for materials,
products, systems, and services.
BEES. An acronym for ``Building for Environmental and Economic
Sustainability,'' an analytic tool used to determine the environmental
and health benefits and life cycle costs of items, developed by the
U.S. Department of Commerce National Institute of Standards and
Technology, with support from the U.S. Environmental Protection Agency,
Office of Pollution
[[Page 1810]]
Prevention and Toxics (BEES 3.0, Building for Environmental and
Economic Sustainability Technical Manual and User Guide, NISTIR 6916,
National Institute of Standards and Technology, U.S. Department of
Commerce, October 2002). Also, see http://www.bfrl.nist.gov/oae/software/bees_USDA.html for a discussion of how biobased feedstocks
are addressed in the BEES Analysis.
Biobased components. Any intermediary biobased materials or parts
that, in combination with other components, are functional parts of the
biobased product.
Biobased content. Biobased content shall be determined based on the
amount of biobased carbon in the material or product as a percent of
weight (mass) of the total organic carbon in the material or product.
Biobased product. A product determined by USDA to be a commercial
or industrial product (other than food or feed) that is composed, in
whole or in significant part, of biological products or renewable
domestic agricultural materials (including plant, animal, and marine
materials) or forestry materials.
Biological products. Products derived from living materials other
than agricultural or forestry materials.
Designated item. A generic grouping of biobased products identified
in subpart B that is eligible for the procurement preference
established under section 9002 of FSRIA.
Diluent. A substance used to diminish the strength, scent, or other
basic property of a substance.
Engineered wood products. Products produced with a combination of
wood, food fibers and adhesives.
Federal agency. Any executive agency or independent establishment
in the legislative or judicial branch of the Government (except the
Senate, the House of Representatives, the Architect of the Capitol, and
any activities under the Architect's direction).
Filler. A substance added to a product to increase the bulk,
weight, viscosity, strength, or other property.
Forest thinnings. Refers to woody materials removed from a dense
forest, primarily to improve growth, enhance forest health, or recover
potential mortality. (To recover potential mortality means to remove
trees that are going to die in the near future.)
Forestry materials. Materials derived from the practice of planting
and caring for forests and the management of growing timber. Such
materials must come from short rotation woody crops (less than 10 years
old), sustainably managed forests, wood residues, or forest thinnings.
Formulated product. A product that is prepared or mixed with other
ingredients, according to a specified formula and includes more than
one ingredient.
FSRIA. The Farm Security and Rural Investment Act of 2002, Public
Law 107-171, 116 Stat. 134 (7 U.S.C. 8102).
Ingredient. A component; part of a compound or mixture; may be
active or inactive.
ISO. The International Organization for Standardization, a network
of national standards institutes from 145 countries working in
partnership with international organizations, governments, industries,
business, and consumer representatives.
Neat product. A product that is made of only one ingredient and is
not diluted or mixed with other substances.
Relative price. The price of a product as compared to the price of
other products on the market that have similar performance
characteristics.
Residues. That which remains after a part is taken, separated,
removed, or designated; a remnant; a remainder; and, for this purpose,
is from agricultural materials, biological products, or forestry
materials.
Secretary. The Secretary of the United States Department of
Agriculture.
Small and emerging private business enterprise. Any private
business which will employ 50 or fewer new employees and has less than
$1 million in projected annual gross revenues.
Sustainably managed forests. Refers to the practice of a land
stewardship ethic that integrates the reforestation, management,
growing, nurturing, and harvesting of trees for useful products while
conserving soil and improving air and water quality, wildlife, fish
habitat, and aesthetics.
Sec. 2902.3 Applicability to Federal procurements.
(a) Applicability to procurement actions. The guidelines in this
part apply to all procurement actions by Federal agencies involving
items designated by USDA in this part, where the Federal agency
purchases $10,000 or more worth of one of these items during the course
of a fiscal year, or where the quantity of such items or of
functionally equivalent items purchased during the preceding fiscal
year was $10,000 or more. The $10,000 threshold applies to Federal
agencies as a whole rather than to agency subgroups such as regional
offices or subagencies of a larger Federal department or agency.
(b) Exception for procurements subject to EPA regulations under the
Solid Waste Disposal Act. For any procurement by any Federal agency
that is subject to regulations of the Administrator of the
Environmental Protection Agency under section 6002 of the Solid Waste
Disposal Act as amended by the Resource Conservation and Recovery Act
of 1976 (40 CFR part 247), these guidelines do not apply to the extent
that the requirements of this part are inconsistent with such
regulations.
(c) Procuring items composed of highest percentage of biobased
products. FSRIA section 9002(c)(1) requires Federal agencies to procure
designated items composed of the highest percentage of biobased
products practicable, consistent with maintaining a satisfactory level
of competition, considering these guidelines. Federal agencies may
decide not to procure such items if they are not reasonably priced or
readily available or do not meet specified or reasonable performance
standards.
Sec. 2902.4 Procurement programs.
(a) Integration into the Federal procurement framework. The Office
of Federal Procurement Policy, in cooperation with USDA, has the
responsibility to coordinate this policy's implementation in the
Federal procurement regulations. These guidelines are not intended to
address full implementation of these requirements into the Federal
procurement framework. This will be accomplished through revisions to
the Federal Acquisition Regulation.
(b) Federal agency preferred procurement programs. (1) On or before
January 11, 2006, each Federal agency shall develop a procurement
program which will assure that items composed of biobased products will
be purchased to the maximum extent practicable and which is consistent
with applicable provisions of Federal procurement laws. Each
procurement program shall contain:
(i) A preference program for purchasing designated items,
(ii) A promotion program to promote the preference program; and
(iii) Provisions for the annual review and monitoring of the
effectiveness of the procurement program.
(2) In developing the preference program, Federal agencies shall
adopt one of the following options, or a substantially equivalent
alternative, as part of the procurement program:
(i) A policy of awarding contracts to the vendor offering a
designated item composed of the highest percentage of biobased product
practicable except when such items:
[[Page 1811]]
(A) Are not available within a reasonable time;
(B) Fail to meet performance standards set forth in the applicable
specifications, or the reasonable performance standards of the Federal
agency; or
(C) Are available only at an unreasonable price.
(ii) A policy of setting minimum biobased products content
specifications in such a way as to assure that the biobased products
content required is consistent with section 9002 of FSRIA and the
requirements of the guidelines in this part except when such items:
(A) Are not available within a reasonable time;
(B) Fail to meet performance standards for the use to which they
will be put, or the reasonable performance standards of the Federal
agency; or
(C) Are available only at an unreasonable price.
(c) Procurement specifications. After the publication date of each
designated item, Federal agencies that have the responsibility for
drafting or reviewing specifications for items procured by Federal
agencies shall ensure within a specified time frame that their
specifications require the use of designated items composed of biobased
products, consistent with the guidelines in this part. USDA will
specify the allowable time frame in each designation rule. The biobased
content of a designated item may vary considerably from product to
product based on the mix of ingredients used in its manufacture. In
procuring designated items, the percentage of biobased product content
should be maximized, consistent with achieving the desired performance
for the product.
Sec. 2902.5 Item designation.
(a) Procedure. Designated items are listed in subpart B. In
designating items, USDA will designate items composed of generic
groupings of specific products and will identify the minimum biobased
content for each listed item. As items are designated for procurement
preference, they will be added to subpart B. Items are generic
groupings of specific products. Products are specific products offered
for sale by a manufacturer or vendor. Although manufacturers and
vendors may submit recommendations to USDA for future item designations
at any time, USDA does not have a formal process for such submissions
or for responding to such submissions.
(b) Considerations. In designating items, USDA will consider the
availability of such items and the economic and technological
feasibility of using such items, including life cycle costs. USDA will
gather information on individual products within an item and
extrapolate that product information to the item level for
consideration in designating items. In considering these factors, USDA
will use life cycle cost information only from tests using the BEES
analytical method.
(c) Exclusions. (1) Motor vehicle fuels and electricity are
excluded by statute from this program.
(2) USDA additionally will not designate items for preferred
procurement that are determined to have mature markets. USDA will
determine mature market status by whether the item had significant
national market penetration in 1972.
Sec. 2902.6 Providing product information to Federal agencies.
(a) Informational Web site. An informational USDA Web site
implementing section 9002 can be found at: http://www.biobased.oce.usda.gov. USDA will maintain a voluntary Web-based
information site for manufacturers and vendors of designated items
produced with biobased products and Federal agencies to exchange
product information. This Web site will provide information as to the
availability, relative price, biobased content, performance and
environmental and public health benefits of the designated items. USDA
encourages manufacturers and vendors to provide product, business
contacts, and product information for designated items. Instructions
for posting information are found on the Web site itself. USDA also
encourages Federal agencies to utilize this Web site to obtain current
information on designated items, contact information on manufacturers
and vendors, and access to information on product characteristics
relevant to procurement decisions. In addition to any information
provided on the Web site, manufacturers and vendors are expected to
provide relevant information to Federal agencies, upon request, with
respect to product characteristics, including verification of such
characteristics if requested.
(b) Advertising, labeling and marketing claims. Manufacturers and
vendors are reminded that their advertising, labeling, and other
marketing claims, including claims regarding health and environmental
benefits of the product, must conform to the Federal Trade Commission
Guides for the Use of Environmental Marketing Claims, 16 CFR part 260.
Sec. 2902.7 Determining biobased content.
(a) Certification requirements. For any product offered for
preferred procurement, manufacturers and vendors must certify that the
product meets the biobased content requirements for the designated item
within which the product falls. Paragraph (c) of this section addresses
how to determine biobased content. Upon request, manufacturers and
vendors must provide USDA and Federal agencies information to verify
biobased content for products certified to qualify for preferred
procurement.
(b) Minimum biobased content. Unless specified otherwise in the
designation of a particular item, the minimum biobased content
requirements in a specific item designation refer to the biobased
portion of the product, and not the entire product.
(c) Determining biobased content. Verification of biobased content
must be based on third party ASTM/ISO compliant test facility testing
using the ASTM International Radioisotope Standard Method D 6866. ASTM
International Radioisotope Standard Method D 6866 determines biobased
content based on the amount of biobased carbon in the material or
product as percent of the weight (mass) of the total organic carbon in
the material or product.
(d) Products with the same formulation. In the case of products
that are essentially the same formulation, but marketed under a variety
of brand names, biobased content test data need not be brand-name
specific.
Sec. 2902.8 Determining life cycle costs, environmental and health
benefits, and performance.
(a) Providing information on life cycle costs and environmental and
health benefits. When requested by Federal agencies, manufacturers and
vendors must provide information on life cycle costs and environmental
and health benefits based on tests using either of two analytical
approaches: The BEES analytical tool along with the qualifications of
the independent testing entity that performed the tests; or either a
third-party or an in-house conducted analysis using the ASTM standard
for evaluating and reporting on environmental performance of biobased
products D7075. Both BEES and the ASTM standard are in accordance with
ISO standards, are focused on testing of biobased products, and will
provide the life cycle assessment and life cycle cost information
Federal agencies might require. As with biobased content, test
[[Page 1812]]
data using the above analytical methods need not be brand-name
specific.
(b) Performance test information. In assessing performance of
qualifying biobased products, USDA requires that Federal agencies rely
on results of performance tests using applicable ASTM, ISO, Federal or
military specifications, or other similarly authoritative industry test
standards. Such testing must be conducted by an ASTM/ISO compliant
laboratory. The procuring official will decide whether performance data
must be brand-name specific in the case of products that are
essentially of the same formulation.
Sec. 2902.9 Funding for testing.
(a) USDA use of funds for biobased content and BEES testing. USDA
will use funds to support testing for biobased content and conduct of
BEES testing for products within items USDA has selected to designate
for preferred procurement through early regulatory action. USDA
initially will focus on gathering the necessary test information on a
sufficient number of products within an item (generic grouping of
products) to support regulations to be promulgated to designate an item
or items for preferred procurement under this program. USDA may accept
cost sharing for such testing to the extent consistent with USDA
product testing decisions. During this period USDA will not consider
cost sharing in deciding what products to test. When USDA has concluded
that a critical mass of items have been designated, USDA will exercise
its discretion, in accordance with the competitive procedures outlined
in paragraph (b) of this section, to allocate a portion of the
available USDA testing funds to give priority to testing of products
for which private sector firms provide cost sharing for the testing.
(b) Competitive program for cost sharing for determining life cycle
costs, environmental and health benefits, and performance. (1) Subject
to the availability of funds and paragraph (a) of this section, USDA
will announce annually the solicitation of proposals for cost sharing
for life cycle costs, environmental and health benefits, and
performance testing of biobased products in accordance with the
standards set forth in Sec. 2902.8 to carry out this program.
Information regarding the submission of proposals for cost sharing also
will be posted on the USDA informational Web site, http://www.biobased.oce.usda.gov.
(2) Proposals will be evaluated and assigned a priority rating.
Priority ratings will be based on the following criteria:
(i) A maximum of 25 points will be awarded a proposal based on the
market readiness;
(ii) A maximum of 20 points will be awarded a proposal based on the
potential size of the market for that product in Federal agencies;
(iii) A maximum of 25 points will be awarded based on the financial
need for assistance of the manufacturer or vendor;
(iv) A maximum of 20 points will be awarded a proposal based on the
product's prospective competitiveness in the market place;
(v) A maximum of 10 points will be awarded a proposal based on its
likely benefit to the environment.
(3) Cost-sharing proposals will be considered first for high
priority products of small and emerging private business enterprises.
If funds remain to support further testing, USDA will consider cost
sharing proposals for products of all other producers of biobased items
as well as the remaining proposals for products of small and emerging
private business enterprises. Proposals will be selected based on
priority rating until available funds for the fiscal year are
committed.
(4)(i) For products selected for life cycle costs and environmental
and health benefits testing under this paragraph, USDA could provide up
to 50 percent of the cost of determining the life cycle costs and
environmental and health effects, up to a maximum of $5,000 of
assistance per product.
(ii) For products selected for performance testing under this
paragraph, USDA could provide up to 50 percent of the cost for
performance testing, up to $100,000 of assistance per product for up to
two performance tests (measures of performance) per product.
(5) For selected proposals, USDA will enter into agreements with
and provide the funds directly to the testing entities.
(6) Proposals submitted in one fiscal year, but not selected for
cost sharing of testing in that year, may be resubmitted to be
considered for cost sharing in the following year.
Subpart B--Designated Items [Reserved]
Dated: January 3, 2005.
Keith Collins,
Chief Economist, Department of Agriculture.
[FR Doc. 05-399 Filed 1-10-05; 8:45 am]
BILLING CODE 3410-GL-P