Federal Register, Volume 72 Issue 21 (Thursday, February 1, 2007)

[Federal Register Volume 72, Number 21 (Thursday, February 1, 2007)]
[Rules and Regulations]
[Pages 4649-4655]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-1641]

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GENERAL SERVICES ADMINISTRATION

48 CFR Parts 511, 516, 532, 538, 546, and 552

[Amendment 2007-01; GSAR Case 2006-G522; Change 18 Docket 2007-0003,
Sequence 1]
RIN 3090-AI32

General Services Acquisition Regulation; Federal Supply Schedule
Contracts-Recovery Purchasing by State and Local Governments Through
Federal Supply Schedules

AGENCY: Office of the Chief Acquisition Officer, Contract Policy
Division, General Services Administration (GSA).

ACTION: Interim rule with request for comments.

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SUMMARY: The General Services Administration (GSA) is amending the
General Services Administration Acquisition Regulation (GSAR) to
implement Section 833 of the John Warner National Defense Authorization
Act for Fiscal Year 2007 (Pub. L. 109-364). Section 833 amends 40
U.S.C. 502 to authorize the Administrator of General Services to
provide to State and local governments the use of Federal Supply
Schedules of the GSA for purchase of products and services to be used
to facilitate recovery from a major disaster, terrorism or nuclear,
biological, chemical, or radiological attack.

DATES: Effective Date: February 1, 2007.
Comment Date: Interested parties should submit comments in writing
to the Regulatory Secretariat at the address shown below on or before
April 2, 2007 to be considered in the formulation of a final rule.

ADDRESSES: Submit comments identified by Amendment 2007-01, GSAR case
2006-G522, by any of the following methods:
Federal eRulemaking Portal: http://www.regulations.gov.
Search for any document by first selecting the proper document types
and selecting ``General Services Administration'' as the agency of
choice. At the ``Keyword'' prompt, type in the GSAR case number (for
example, GSAR case 2006-G522) and click on the ``Submit'' button.
Please include any personal and/or business information inside the
document.
You may also search for any document by clicking on the ``Advanced
search/document search'' tab at the top of the screen, selecting from
the agency field ``General Services Administration,'' and typing the
GSAR case number in the keyword field. Select the ``Submit'' button.
Fax: 202-501-4067.
Mail: General Services Administration, Regulatory
Secretariat (VIR), 1800 F Street, NW., Room 4035, ATTN: Laurieann
Duarte, Washington, DC 20405.
Instructions: Please submit comments only and cite GSAR case 2006-
G522, in all correspondence related to this case. All comments received
will be posted without change to http://www.regulations.gov, including
any personal and/or business confidential information provided.

FOR FURTHER INFORMATION CONTACT: Mr. William Clark, Procurement
Analyst, at (202) 219-1813, for clarification of content. Please cite
Amendment 2007-01, GSAR case 2006-G522. For information pertaining to
status or publication schedules, contact the Regulatory Secretariat at
(202) 501-4755.

SUPPLEMENTARY INFORMATION:

A. Background

The Federal Supply Schedule Program, which is directed and managed
by GSA, is designed to provide Federal agencies with a simplified
process of acquiring commonly used commercial supplies and services at
prices associated with volume buying. Ordering activities conduct
streamlined competitions among a number of schedule contractors, issue
orders directly with the selected contractor, and administer orders.
This interim rule amends GSAR Parts 511, 516, 532, 538, 546, and
552 to implement Section 833 of the John Warner National Defense
Authorization Act for Fiscal Year 2007 (Pub. L. 109-364). Section 833
amends 40 U.S.C. 502

[[Page 4650]]

to authorize the Administrator of General Services to provide to State
and local governments the use of Federal Supply Schedules of the GSA
for purchase of products and services to be used to facilitate recovery
from a major disaster declared by the President under the Robert T.
Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121
et seq.) or to facilitate recovery from terrorism or nuclear,
biological, chemical, or radiological attack. Section 833 requires the
Secretary of Homeland Security to determine which products and services
qualify before the Administrator provides for the use of the Federal
Supply Schedules. House Report 109-452 of the Committee on Armed
Services indicates that Section 833 builds on the implementation of the
Cooperative Purchasing Program authorized in Section 211 of the E-
Government Act of 2002 (Pub. L. 107-347), which opened GSA's
information technology schedule, Schedule 70, for use by State and
local governments.
``State and local government entities,'' means the states of the
United States, counties, municipalities, cities, towns, townships,
tribal governments, public authorities (including public or Indian
housing agencies under the United States Housing Act of 1937), school
districts, colleges and other institutions of higher education, council
of governments (incorporated or not), regional or interstate government
entities, or any agency or instrumentality of the preceding entities
(including any local educational agency or institution of higher
education), and including legislative and judicial departments. The
term does not include contractors of, or grantees of, State or local
governments.
(1) ``Local educational agency'' has the meaning given that term in
section 8013 of the Elementary and Secondary Education Act of 1965 (20
U.S.C. 7713).
(2) ``Institution of higher education'' has the meaning given that
term in section 101(a) of the Higher Education Act of 1965 (20 U.S.C.
1001(a)).
(3) ``Tribal government'' means--
(i) The governing body of any Indian tribe, band, nation, or other
organized group or community located in the continental United States
(excluding the State of Alaska) that is recognized as eligible for the
special programs and services provided by the United States to Indians
because of their status as Indians; and
(ii) Any Alaska Native regional or village corporation established
pursuant to the Alaska Native Claims Settlement Act (43 U.S.C. 1601 et
seq.).
Eligible state or local government ordering activities are
encouraged to use the ordering procedures outlined in Federal
Acquisition Regulation (FAR) Subpart 8.4 (48 CFR Chapter 1, Subpart
8.4) when placing an order against Federal Supply Schedules contracts.
This interim rule establishes a new GSAR Subpart 538.71 and amends
associated clauses to address recovery purchasing from supply schedules
by eligible non-federal organizations. Among other things, the rule
defines the scope of recovery purchasing, its usage, and applicable
terms and conditions, including payment and the handling of disputes.
Scope. State and local governments are authorized to use Federal
Supply Schedules to procure products and services determined by the
Secretary of Homeland Security to facilitate recovery from major
disasters, terrorism, or nuclear, biological, chemical, or radiological
attack. This authority is limited to GSA's Multiple Award Schedule
contracts and does not include any other GSA programs. A listing of the
Federal Supply Schedules for the products and services is available in
GSA's Schedules e-Library at Web site http://www.gsaelibrary.gsa.gov.
The State or local government ordering activity is responsible for
ensuring that only authorized representatives of their governments
place orders and that purchased products or services are used to
facilitate recovery from major disasters or attacks for the purposes
stated in Section 833.
Voluntary use. The authority provided in this rule is available for
use on a voluntary (i.e., non-mandatory) basis. In other words,
businesses with schedule contracts which contain items for recovery
purchasing have the option of deciding whether they will accept orders
placed by State or local government buyers. Existing schedule contracts
which contain items for recovery purchasing may be modified only by
mutual agreement of the parties. After an existing contract has been
modified, a schedule contractor still retains the right to decline
orders by State or local government buyers on a case-by-case basis.
Future schedule contractors will also be able to decline orders on a
case-by-case basis. Schedule contractors may decline any order, for any
reason, within a 5-day period of receipt of the order (See GSAR
552.238-78). Similarly, the rule places no obligation on State and
local government buyers. They will have full discretion to decide if
they wish to make a Federal Supply Schedule purchase, subject, however,
to any limitations that may be established under State and local law
and procedures.
Defined terms and conditions. Under new GSAR clause 552.238-80, Use
of Federal Supply Schedule Contracts by Certain Entities-Recovery
Purchasing, which will be incorporated into covered schedule contracts
of participating contractors, a new contract will be formed when the
schedule contractor accepts an order from a State or local government.
However, with certain exceptions provided in this rule, terms and
conditions of the underlying schedule contract will be incorporated by
reference into the new contract between the State or local government
and the contractor. A State and local government ordering activity may
include terms and conditions required by statute, ordinance,
regulation, or order to the extent that these terms and conditions do
not conflict with the terms and conditions of the Schedule contract.
With respect to payment, this rule amends the GSAR to make the
clause at 552.232-81, Payments by Non-Federal Ordering Activities,
applicable to Federal Supply Schedules for recovery purchasing. The
clause provides that the terms and conditions of a State's prompt
payment law apply to orders placed by eligible non-Federal ordering
activities. If the ordering activity is not otherwise subject to a
State prompt payment law, the activity would be covered by the Federal
Prompt Payment Act, 31 U.S.C. 3901, et seq., as implemented in FAR
Subpart 32.9, in the same manner as Federal ordering activities.
The Federal Government will not be liable for the performance or
nonperformance of contracts established under the authority of this
rule between schedule contractors and eligible non-federal entities.
Disputes that cannot be resolved by the parties to the new contract can
be litigated in any State or Federal court with jurisdiction over the
parties, using principles of Federal procurement law and the Uniform
Commercial Code, as applicable and appropriate.
The prices of supplies and services available on schedule contracts
include an industrial funding fee. The fee covers the administrative
costs incurred by GSA to operate the Schedules program. The fee will be
periodically adjusted as necessary to recover the cost of operating the
program.
Advance Purchasing. State and local governments may use the Federal
Supply Schedule contracts to purchase products or services in advance
of a major disaster declared by the President under the Robert T.
Stafford Disaster Relief and Emergency Assistance Act

[[Page 4651]]

(42 U.S.C. 5121 et seq.) or terrorist, nuclear, biological, chemical,
or radiological attack. In the aftermath of emergency events, State or
local governments' systems may be disrupted. Thus, use of Federal
Supply schedule contracts prior to these events to acquire products or
services to be used to facilitate recovery is authorized. The State or
local government will be responsible for ensuring that purchased
products or services are to be used to facilitate recovery.
Transactional data. GSA anticipates a need for specific information
regarding recovery purchasing. Quality transactional data will allow
for effective program measurement and improvement. GSA is interested in
comments on the schedule contractors' ability to report data elements
such as items and quantities sold, prices, and State or local
government placing the order. GSA also is interested in hearing
industry's perspective on the best way to capture this data.

B. Unfunded Mandates Reform Act and Executive Order 13132

The following statutes and Executive orders do not apply to this
rulemaking: Unfunded Mandates Reform Act of 1995; Executive Order
13175, Consultation and Coordination with Indian Tribal Governments;
and Executive Order 13132, Federalism.

C. Regulatory Flexibility Act

The changes may have a significant economic impact on a substantial
number of small entities within the meaning of the Regulatory
Flexibility Act, 5 U.S.C. 601 et seq., because the interim rule will
affect large and small entities including small businesses that are
awarded schedule contracts for recovery purchasing, under the GSA
Federal Supply Schedule program; non-schedule contractors, including
small businesses, contracting with State or local governments; and
small governmental jurisdictions that will be eligible to place orders
under schedule contracts for recovery purchasing.
An Initial Regulatory Flexibility Analysis (IRFA) has been
prepared. The analysis is summarized as follows:

1. Description of the reasons why action by the agency is being
considered.
To implement section 833, Use of Federal Supply Schedules by
State and Local Governments for Goods and Services for Recovery from
Natural Disasters, Terrorism, or Nuclear, Biological, Chemical, or
Radiological Attack, of the John Warner National Defense
Authorization Act for Fiscal Year 2007 (Public Law 109-364). Section
833 amends section 502 of title 40, United States Code, to authorize
the Administrator to provide for use by State or local governments
of Federal Supply Schedules of the General Services Administration
for products or services that are to be used to facilitate recovery
from a major disaster declared by the President under the Robert T.
Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C.
5121 et seq.) or to facilitate recovery from terrorism or nuclear,
biological, chemical, or radiological attack. The rule opens Federal
Supply Schedule contracts for recovery purchasing, for use by other
governmental entities to enhance intergovernmental cooperation.
2. Succinct statement of the objectives of, and legal basis for
the interim rule.
The interim rule will implement section 833 of the John Warner
National Defense Authorization Act for Fiscal Year 2007 (Public Law
109-364) with the objective of opening Federal Supply Schedule
contracts for use by other governmental entities to enhance
intergovernmental cooperation. The goal of the new rule is to make
``government'' (considering all levels) more efficient by reducing
duplication of effort and utilizing volume purchasing techniques for
the acquisition products and services determined by the Secretary of
Homeland Security to facilitate recovery from a major disaster,
terrorism, or nuclear, biological, chemical, or radiological attack.
3. Description of, and where feasible, estimate of the number of
small entities to which the interim rule will apply.
The rule will affect large and small entities including small
businesses that are awarded schedule contracts for recovery
purchasing, under the GSA Federal Supply Schedule program; non-
schedule contractors, including small businesses, contracting with
State or local governments; and small governmental jurisdictions
that will be eligible to place orders under schedule contracts for
recovery purchases. Approximately 80 percent (12,494) of GSA
Schedule contractors are small businesses and they accounted for 37
percent of the sales under the Schedules program for Fiscal Year
2005. All of the small business contractors under the Schedules for
recovery purchasing will be allowed, at the schedule contractor's
option, to accept orders from State and local governments.
Obviously, the expanded authority to order from Schedule contracts
for recovery purchasing could increase the sales of small business
schedule contractors. It is difficult to identify the number of non-
schedule small businesses that currently sell directly to State and
local governments. The ability of governmental entities to use
Schedule contracts for recovery purchasing, may affect the
competitive marketplace in which those small businesses operate.
State and local government agencies could realize lower prices on
some products and services, less administrative burden and shortened
procurement lead times. The rule does not affect or waive State or
local government preference programs. Finally, small governmental
jurisdictions will also be affected Counties, incorporated
municipalities, minor subdivisions, public housing authorities,
school districts, public educational institutions of higher
learning, and Indian tribal governments would be among those
affected if they chose to order from Schedule contracts for recovery
purchasing. Federal Supply Schedule contracts are negotiated as
volume purchase agreements, with generally very favorable pricing.
The ability of small governmental entities to order from Schedule
contracts for recovery purchasing holds out the potential for
significant cost savings for those organizations as well as
providing alternative sources of goods and services in case their
usual and customary sources of supply are interrupted in the
aftermath of the disaster.
4. Description of projected reporting, recordkeeping, and other
compliance requirements of the rule, including an estimate of the
classes of small entities that will be subject to the requirement
and the type of professional skills necessary for preparation of the
report or record.
The interim rule makes changes in certain provisions or clauses
in order to recognize the fact that authorized non-federal ordering
activities may place orders under the contract. The Office of
Management and Budget under the Paperwork Reduction Act has
previously approved these clauses and the changes do not impact the
information collection or recordkeeping requirements.
5. Identification, to the extent practicable, of all relevant
Federal rules that may duplicate, overlap or conflict with the rule.
The interim rule does not duplicate, overlap, or conflict with
any other Federal rules.
6. Description of any significant alternatives to the interim
rule that accomplish the stated objectives of applicable statutes
and that minimize any significant economic impact of the rule on
small entities.
There are no practical alternatives that will accomplish the
objective of this rule.

The Regulatory Secretariat has submitted a copy of the IRFA to the
Chief Counsel for Advocacy of the Small Business Administration.
Interested parties may obtain a copy from the Regulatory Secretariat.
The Councils will consider comments from small entities concerning the
affected GSAR Parts 511, 516, 532, 538, and 552 in accordance with 5
U.S.C. 610. Interested parties must submit such comments separately and
should cite 5 U.S.C 601, et seq. (Amendment 2007-01, GSAR case 2006-
G522), in correspondence.

D. Paperwork Reduction Act

The Paperwork Reduction Act (Pub. L. 104-13) applies because the
interim rule contains information collection requirements. The new
clause at 552.238-80, Use of Federal Supply Schedule Contracts by
Certain Entities-Recovery Purchasing, provides for the contractor to
report the quarterly dollar value of all sales under the contract to
State and local governments, which includes any State, local, regional
or tribal government or any instrumentality thereof (including any
local educational agency or institution of higher learning). The
records required

[[Page 4652]]

for reporting are the same as those normally maintained by a contractor
in the commercial world and do not represent a Government-unique
recordkeeping requirement. Therefore, the estimated burden for this
clause under the Paperwork Reduction Act is zero. GSA has a blanket
approval under OMB Control Number 3090-0250 from Office of Management
and Budget for information collections with a zero burden estimate.

E. Determination To Issue an Interim Rule

A determination has been made under the authority of the
Administrator of General Services (GSA) that urgent and compelling
reasons exist to promulgate this interim rule without prior opportunity
for public comment. This action is necessary to implement Section 833
of the John Warner National Defense Authorization Act for Fiscal Year
2007 (Pub. L. 109-364), signed by the President on October 17, 2006.
The law requires the Administrator of General Services to establish
procedures to implement Section 833 not later than 30 days after the
date of the enactment of the Act. GSA wishes to obtain public comments
on the changes. Due to the statutory deadline, the rule is being issued
as an interim rule rather than as a proposed rule.
Comments received in response to the publication of this interim
rule will be considered in formulating the final rule.

List of Subjects in 48 CFR Parts 511, 516, 532, 538, 546, and 552

Government procurement.

Dated: January 29, 2007.
Roger D. Waldon,
Acting Senior Procurement Executive, Office of the Chief Acquisition
Officer.

0
Therefore, GSA amends 48 CFR parts 511, 516, 532, 538, 546, and 552 as
set forth below:
0
1. The authority citation for 48 CFR parts 511, 516, 532, 538, 546, and
552 continues to read as follows:

Authority: 40 U.S.C. 121(c).

PART 511--USING AND MAINTAINING REQUIREMENTS DOCUMENTS

0
2. Revise paragraphs (c)(3) and (d) of section 511.204 to read as
follows:

511.204 Solicitation provisions and contract clauses.

* * * * *
(c) * * *
(3) Include the clause at 552.211-75, Preservation, Packaging and
Packing, in solicitations and contracts for supplies expected to exceed
the simplified acquisition threshold. You may also include the clause
in contracts estimated to be at or below the simplified acquisition
threshold when appropriate. Use Alternate I in solicitations and
contracts for--
(i) FSS Schedule 70 and the Consolidated Products and Services
Schedule containing information technology Special Item Numbers; or
(ii) Federal Supply Schedules for recovery purchasing (See
538.7102).
* * * * *
(d) Supply contracts. Include the clause at 552.211-77, Packing
List, in solicitations and contracts for supplies, including purchases
over the micropurchase threshold. Use Alternate I in solicitations and
contracts for--
(1) FSS Schedule 70 and the Consolidated Products and Services
Schedule containing information technology Special Item Numbers; or
(2) Federal Supply Schedules for recovery purchasing (See
538.7102).

PART 516--INDEFINITE-DELIVERY CONTRACTS

0
3. Amend section 516.506 by--
0
a. Redesignating paragraph (d) as (e);
0
b. Adding a new paragraph (d); and
0
c. Amending the newly designated paragraph (e) by revising the last
sentence.
The added and revised text reads as follows:

516.506 Solicitation provisions and contract clauses.

* * * * *
(d) In solicitations and contracts for Federal Supply Schedules for
recovery purchasing (See 538.7102), use 552.216-72, Placement of
Orders, Alternate IV, instead of Alternate II.
(e) * * * Use 552.216-73 Alternate II when 552.216-72 Alternate II,
Alternate III, or Alternate IV are prescribed.

PART 532--CONTRACT FINANCING

0
4. Amend section 532.206 by revising paragraphs (a) and (b) to read as
follows:

532.206 Solicitation provisions and contract clauses.

(a) Discounts for prompt payment. Include 552.232-8, Discounts for
Prompt Payments, in multiple award schedule solicitations and contracts
instead of the clause at Federal Acquisition Regulation 52.232-8. Use
Alternate I in solicitations and contracts for--
(1) FSS Schedule 70 and the Consolidated Products and Services
Schedule containing information technology Special Item Numbers (SINs);
or
(2) Federal Supply Schedules for recovery purchasing (See
538.7102).
(b) The contracting officer shall insert the clause at 552.232-81,
Payments by Non-Federal Ordering Activities, in solicitations and
schedule contracts for--
(1) FSS Schedule 70 and Consolidated Products and Services Schedule
contracts containing information technology SINs; or
(2) Federal Supply Schedules for recovery purchasing (See
538.7102).
* * * * *

0
5. Amend section 532.7003 by revising paragraphs (b) and (c) to read as
follows:

532.7003 Contract clause.

* * * * *
(b) Federal Supply Schedule contracts. Use Alternate I of the
clause at 552.232-77 for all FSS schedule solicitations and contracts,
except for--
(1) Federal Supply Schedule 70, Information Technology, and the
Consolidated Products and Services Schedule contracts containing
information technology Special Item Numbers; or
(2) Federal Supply Schedule contracts for recovery purchasing (See
538.7102).
(c) Federal Supply Schedule contracts for information technology
Special Item Numbers or Federal Supply Schedules for recovery
purchasing (See 538.7102). In solicitations and contracts for (1) FSS
Schedule 70 and the Consolidated Products and Services Schedule
containing information technology Special Item Numbers; or (2) Federal
Supply Schedule contracts for recovery purchasing (See 538.7102), use
552.232-79 instead of 552.232-77.

PART 538--FEDERAL SUPPLY SCHEDULE CONTRACTING

0
6. Amend section 538.273 by revising paragraphs (a)(2) and (b)(2) to
read as follows:

538.273 Contract clauses.

(a) * * *
(2) 552.238-71, Submission and Distribution of Authorized FSS
Schedule Pricelists. In solicitations and contracts for:
(i) FSS Schedule 70 and the Consolidated Products and Services
Schedule contracts containing information technology Special Item
Numbers; or
(ii) Federal Supply Schedule contracts for recovery purchasing (See
538.7102), use Alternate I. If GSA is not prepared to accept electronic
submissions for a particular schedule delete--
(A) The paragraph identifier ``(i)'' in (b)(1) and the word ``and''
at the end of paragraph (b)(1)(i); and

[[Page 4653]]

(B) Paragraphs (b)(1)(ii) and (b)(3).
* * * * *
(b) * * *
(2) 552.238-75, Price Reductions. Use Alternate I in solicitations
and contracts for--
(i) FSS Schedule 70 and the Consolidated Products and Services
Schedule contracts containing information technology Special Item
Numbers; or
(ii) Federal Supply Schedule contracts for recovery purchasing (See
538.7102).

0
7. Add Subpart 538.71, consisting of sections 538.7100 thru 538.7104,
to read as follows:
Sec.
538.7100 Scope of subpart.
538.7101 Definitions.
538.7102 General.
538.7103 Policy.
538.7104 Solicitation provisions and contract clauses.

Subpart 538.71--Recovery Purchasing

538.7100 Scope of subpart.

This subpart prescribes policies and procedures to implement the
John Warner National Defense Authorization Act for Fiscal Year 2007
(Pub. L. 109-364) authorizing non-federal organizations to use Federal
Supply Schedule contracts to purchase products and services to be used
for recovery from major disasters, terrorism or nuclear, biological,
chemical, or radiological attack.

538.7101 Definitions.

The definitions in subsection 538.7001 shall apply for purposes of
this subpart.

538.7102 General.

(a) Section 833 of the John Warner National Defense Authorization
Act for Fiscal Year 2007 (Pub. L. 109-364) amends 40 U.S.C. 502 to
authorize the Administrator of General Services to provide to State and
local governments the use of Federal Supply Schedules of the GSA for
purchase of products and services to be used to facilitate recovery
from a major disaster declared by the President under the Robert T.
Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121
et seq.) or to facilitate recovery from terrorism or nuclear,
biological, chemical, or radiological attack. Section 833 requires the
Secretary of Homeland Security to determine which products and services
qualify before the Administrator provides for the use of the Federal
Supply Schedules. Use of Federal supply schedules by State and local
governments is voluntary. Agreement of a schedule contractor to offer
recovery purchasing under the contract and acceptance of any order for
recovery purchasing from a State or local government is voluntary.
(b) State and local governments are authorized to use Federal
Supply Schedules to procure products and services determined by the
Secretary of Homeland Security to be used to facilitate recovery from
major disasters, terrorism, or nuclear, biological, chemical, or
radiological attack. A listing of the Federal Supply Schedules for the
products and services is available in GSA's Schedules e-Library at Web
site http://www.gsaelibrary.gsa.gov. Click on the link, ``Disaster
Recovery Purchasing, State and Local.'' The participating contractors
and the products and services available for recovery purchasing will be
labeled with the Disaster Recovery Purchasing ICON.
(c) State and local governments that wish to use the Federal Supply
Schedules to facilitate recovery from major disasters or attacks are
responsible for ensuring that only authorized representatives of their
governments place orders against these schedules and that procured
products and services are used only for the purposes authorized by
Section 833 of Public Law 109-364.

538.7103 Policy.

Preparing solicitations when schedules are open to eligible non-
federal entities. When opening the Federal Supply Schedules for
products and services determined by the Secretary of Homeland Security,
for use by eligible non-federal entities, the contracting officer must
make minor modifications to certain Federal Acquisition Regulation
(FAR) and GSAM provisions and clauses in order to make clear
distinctions between the rights and responsibilities of the U.S.
Government in its management and regulatory capacity pursuant to which
it awards schedule contracts and fulfills associated Federal
requirements versus the rights and responsibilities of eligible
ordering activities placing orders to fulfill agency needs.
Accordingly, the contracting officer is authorized to modify the
following FAR provisions/clauses to delete ``Government'' or similar
language referring to the U.S. Government and substitute ``ordering
activity'' or similar language when preparing solicitations and
contracts to be awarded under the Federal Supply Schedules for products
and services determined by the Secretary of Homeland Security. When
such changes are made, the word ``(DEVIATION)'' shall be added at the
end of the title of the provision or clause. These clauses include but
are not limited to--
(a) 52.212-4, Contract Terms and Conditions--Commercial Items.
(b) 52.216-18, Ordering.
(c) 52.216-19, Order Limitations.
(d) 52.229-1, State and Local Taxes.
(e) 52.229-3, Federal, State, and Local Taxes.
(f) 52.232-7, Payments Under Time-and-Materials and Labor-Hour
Contracts.
(g) 52.232-17, Interest.
(h) 52.232-19, Availability of Funds for the Next Fiscal Year.
(i) 52.232-34, Payment by Electronic Funds Transfer--Other than
Central Contractor Registration.
(j) 52.232-36, Payment by Third Party.
(k) 52.237-3, Continuity of Services.
(l) 52.246-4, Inspection of Services-Fixed Price.
(m) 52.246-6, Inspection-Time-and-Material and Labor-Hour.
(n) 52.247-34, F.O.B. Destination.
(o) 52.247-38, F.O.B. Inland Carrier Point of Exportation.

538.7104 Solicitation provisions and contract clauses.

(a) The contracting officer shall insert the clause at 552.238-76,
Definition (Federal Supply Schedules)--Recovery Purchasing, in Federal
Supply Schedule solicitations and contracts which contain products and
services determined by the Secretary of Homeland Security to facilitate
recovery from major disasters, terrorism, or nuclear, biological,
chemical, or radiological attack.
(b) The contracting officer shall insert the clause at 552.238-78,
Scope of Contract (Eligible Ordering Activities), with Alternate I in
Federal Supply Schedule solicitations and contracts which contain
products and services determined by the Secretary of Homeland Security
to facilitate recovery from major disasters, terrorism, or nuclear,
biological, chemical, or radiological attack.
(c) The contracting officer shall insert the clause at 552.238-80,
Use of Federal Supply Schedule Contracts by Certain Entities--Recovery
Purchasing, in Federal Supply Schedule solicitations and contracts
which contain products and services determined by the Secretary of
Homeland Security that facilitate recovery from major disasters,
terrorism, or nuclear, biological, chemical, or radiological attack.
(d) See 552.101-70 for authorized Federal Acquisition Regulation
deviations.

[[Page 4654]]

PART 546--QUALITY ASSURANCE

0
8. Amend section 546.710 by revising paragraph (b) to read as follows:

546.710 Contract clauses.

* * * * *
(b) Multiple award schedules. Insert the clause at 552.246-73,
Warranty--Multiple Award Schedule, in solicitations and contracts. Use
Alternate I in solicitations and contracts for--
(1) FSS Schedule 70 and the Consolidated Products and Services
Schedule containing information technology Special Item Numbers; or
(2) Federal Supply Schedules for recovery purchasing (See
538.7102).
* * * * *

PART 552--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
9. Amend section 552.216-72 by--
(a) Removing from the introductory text of Alternate II
``516.506(c)'' and adding ``516.506(b)'' in its place; and
(b) Adding Alternate IV.
The added text reads as follows:

552.216-72 Placement of orders.

* * * * *
Alternate IV (FEB 2007). As prescribed in 516.506(d), substitute
the following paragraphs (a), (c), and (d) for paragraphs (a), (c),
and (d) of the basic clause:
(a) See 552.238-78, Scope of Contract (Eligible Ordering
Activities)--Alternate I, for who may order under this contract.
(c) If the Contractor agrees, GSA's Federal Acquisition Service
(FAS) will place orders for eligible ordering activities, as defined
in paragraph (a) of the clause at 552.238-78-Alternate I, by EDI
using computer-to-computer EDI. If computer-to-computer EDI is not
possible, FAS will use an alternative EDI method allowing the
Contractor to receive orders by facsimile transmission. Subject to
the Contractor's agreement, other eligible ordering activities, as
defined in paragraphs (a) and (d) of the clause at 552.238-78-
Alternate I, may also place orders by EDI.
(d) When computer-to-computer EDI procedures will be used to
place orders, the Contractor shall enter into one or more Trading
Partner Agreements (TPA) with each ordering activity placing orders
electronically in order to ensure mutual understanding by the
parties of certain electronic transaction conventions and to
recognize the rights and responsibilities of the parties as they
apply to this method of placing orders. The TPA must identify, among
other things, the third party provider(s) through which electronic
orders are placed, the transaction sets used, security procedures,
and guidelines for implementation. Ordering activities may obtain a
sample format to customize as needed from the office specified in
paragraph (g) of this clause.

552.216-73 [Amended]

0
10. Amend section 552.216-73 by--
0
(a) Removing from the introductory text ``516.506(c)'' and adding
``516.506(e)'' in its place; and
0
(b) Removing from the introductory text of Alternates I and II
``516.506(b)'' and adding ``516.506(e)'' in its place, respectively.

0
11. Add section 552.238-76 to read as follows:

552.238-76 Definition (Federal Supply Schedules)--Recovery Purchasing.

As prescribed in 538.7104(a), insert the following clause:

Definition (Federal Supply Schedules)--Recovery Purchasing (FEB 2007)

Ordering activity (also called ``ordering agency'' and
``ordering office'') means an eligible ordering activity (see
552.238-78, Alternate I) authorized to place orders under Federal
Supply Schedule contracts.

(End of clause)

0
12. Amend section 552.238-78 by adding Alternate I to read as follows:

552.238-78 Scope of Contract (Eligible Ordering Activities).

* * * * *
Alternate I (FEB 2007). As prescribed in 538.7104(b), substitute
the following paragraphs (a) and (d) for paragraphs (a) and (d) of
the basic clause:
(a) This solicitation is issued to establish contracts which may
be used on a nonmandatory basis by the agencies and activities named
below, as a source of supply for the supplies or services described
herein, for domestic delivery.
(1) Executive agencies (as defined in Federal Acquisition
Regulation Subpart 2.1) including nonappropriated fund activities as
prescribed in 41 CFR 101-26.000;
(2) Government contractors authorized in writing by a Federal
agency pursuant to Federal Acquisition Regulation Subpart 51.1;
(3) Mixed ownership Government corporations (as defined in the
Government Corporation Control Act);
(4) Federal Agencies, including establishments in the
legislative or judicial branch of government (except the Senate, the
House of Representatives and the Architect of the Capitol and any
activities under the direction of the Architect of the Capitol);
(5) The District of Columbia;
(6) Tribal governments when authorized under 25 U.S.C. 450j(k);
(7) Qualified Nonprofit Agencies as authorized under 40 U.S.C.
502(b); and
(8) Organizations, other than those identified in paragraph (d)
of this clause, authorized by GSA pursuant to statute or regulation
to use GSA as a source of supply.
(d) The following activities may place orders against Federal
Supply Schedules for products and services determined by the
Secretary of Homeland Security to facilitate recovery from major
disasters, terrorism, or nuclear, biological, chemical, or
radiological attack, on an optional basis; PROVIDED, the Contractor
accepts order(s) from such activities: State and local government
entities, includes any state, local, regional or tribal government
or any instrumentality thereof (including any local educational
agency or institution of higher learning).
State and local government entities, means the states of the
United States, counties, municipalities, cities, towns, townships,
tribal governments, public authorities (including public or Indian
housing agencies under the United States Housing Act of 1937),
school districts, colleges and other institutions of higher
education, council of governments (incorporated or not), regional or
interstate government entities, or any agency or instrumentality of
the preceding entities (including any local educational agency or
institution of higher education), and including legislative and
judicial departments. The term does not include contractors of, or
grantees of, State or local governments.
(1) Local educational agency has the meaning given that term in
section 8013 of the Elementary and Secondary Education Act of 1965
(20 U.S.C. 7713).
(2) Institution of higher education has the meaning given that
term in section 101(a) of the Higher Education Act of 1965 (20
U.S.C. 1001(a)).
(3) Tribal government means--
(i) The governing body of any Indian tribe, band, nation, or
other organized group or community located in the continental United
States (excluding the State of Alaska) that is recognized as
eligible for the special programs and services provided by the
United States to Indians because of their status as Indians; and
(ii) Any Alaska Native regional or village corporation
established pursuant to the Alaska Native Claims Settlement Act (43
U.S.C. 1601 et seq.).

0
13. Add new section 552.238-80 to read as follows:

552.238-80 Use of Federal Supply Schedule Contracts by Certain
Entities--Recovery Purchasing.

As prescribed in 538.7104(c), insert the following clause:

Use of Federal Supply Schedule Contracts by Certain Entities--Recovery
Purchasing (FEB 2007)

(a) If an entity identified in paragraph (d) of the clause at
552.238-78, Scope of Contract (Eligible Ordering Activities)--
Alternate I, elects to place an order under this contract, the
entity agrees that the order shall be subject to the following
conditions:
(1) When the Contractor accepts an order from such an entity, a
separate contract is formed which incorporates by reference all the
terms and conditions of the Schedule contract except the Disputes
clause, the patent indemnity clause, and the portion of the
Commercial Item Contract Terms and Conditions that specifies
``Compliance with laws unique to Government contracts'' (which
applies only to contracts with entities of the Executive branch of
the U.S. Government). The parties to this new contract which
incorporates the terms and

[[Page 4655]]

conditions of the Schedule contract are the individual ordering
activity and the Contractor. The U.S. Government shall not be liable
for the performance or nonperformance of the new contract. Disputes
which cannot be resolved by the parties to the new contract may be
litigated in any State or Federal court with jurisdiction over the
parties, applying Federal procurement law, including statutes,
regulations and case law, and, if pertinent, the Uniform Commercial
Code. To the extent authorized by law, parties to this new contract
are encouraged to resolve disputes through Alternative Dispute
Resolution. Likewise, a Blanket Purchase Agreement (BPA), although
not a contract, is an agreement that may be entered into by the
Contractor with such an entity and the Federal Government is not a
party.
(2) Where contract clauses refer to action by a Contracting
Officer or a Contracting Officer of GSA, that shall mean the
individual responsible for placing the order for the ordering
activity (e.g., Federal Acquisition Regulation 52.212-4 at paragraph
(f) and FSS clause I-FSS-249 B).
(3) As a condition of using this contract, eligible ordering
activities agree to abide by all terms and conditions of the
Schedule contract, except for those deleted clauses or portions of
clauses mentioned in paragraph (a)(1) of this clause. Ordering
activities may include terms and conditions required by statute,
ordinance, regulation, order, or as otherwise allowed by State and
local government entities as a part of a statement of work (SOW) or
statement of objective (SOO) to the extent that these terms and
conditions do not conflict with the terms and conditions of the
Schedule contract. The ordering activity and the Contractor
expressly acknowledge that, in entering into an agreement for the
ordering activity to purchase goods or services from the Contractor,
neither the ordering activity nor the Contractor will look to,
primarily or in any secondary capacity, or file any claim against
the United States or any of its agencies with respect to any failure
of performance by the other party.
(4) The ordering activity is responsible for all payments due
the Contractor under the contract formed by acceptance of the
ordering activity's order, without recourse to the agency of the
U.S. Government, which awarded the Schedule contract.
(5) The Contractor is encouraged, but not obligated, to accept
orders from such entities. The Contractor may, within 5 days of
receipt of the order, decline to accept any order, for any reason.
The Contractor shall fulfill orders placed by such entities, which
are not declined within the 5-day period.
(6) The supplies or services purchased will be used for
governmental purposes only and will not be resold for personal use.
Disposal of property acquired will be in accordance with the
established procedures of the ordering activity for the disposal of
personal property.
(7) The state or local government ordering activity will be
responsible for purchasing products or services to be used to
facilitate recovery from a major disaster declared by the President
under the Robert T. Stafford Disaster Relief and Emergency
Assistance Act (42 U.S.C. 5121 et seq.) or to facilitate recovery
from terrorism or nuclear, biological, chemical, or radiological
attack.
(b) If the Schedule Contractor accepts an order from an entity
identified in paragraph (d) of the clause at 552.238-78, Scope of
Contract (Eligible Ordering Activities)--Alternate I, the Contractor
agrees to the following conditions--
(1) The ordering activity is responsible for all payments due
the Contractor for the contract formed by acceptance of the order,
without recourse to the agency of the U.S. Government, which awarded
the Schedule contract.
(2) The Contractor is encouraged, but not obligated, to accept
orders from such entities. The Contractor may, within 5 days of
receipt of the order, decline to accept any order, for any reason.
The Contractor shall decline the order using the same means as those
used to place the order. The Contractor shall fulfill orders placed
by such entities, which are not declined within the 5-day period.
(c) In accordance with clause 552.238-74, Industrial Funding Fee
and Sales Reporting, the Contractor must report the quarterly dollar
value of all sales under this contract. When submitting sales
reports, the Contractor must report two dollar values for each
Special Item Number--
(1) The dollar value for sales to entities identified in
paragraph (a) of the clause at 552.238-78, Scope of Contract
(Eligible Ordering Activities)--Alternate I; and
(2) The dollar value for sales to entities identified in
paragraph (d) of clause 552.238-78, Alternate I.
(d) A listing of the Federal Supply Schedule contracts for the
products and services available for disaster recovery purchasing is
accessible in GSA's Schedules e-Library at Web site http://www.gsaelibrary.gsa.gov. Click on the link, ``Disaster Recovery
Purchasing, State and Local.'' The participating Contractors and the
products and services available for disaster recovery purchasing
will be labeled with the Disaster Recovery Purchasing icon.
(End of clause)
[FR Doc. E7-1641 Filed 1-31-07; 8:45 am]
BILLING CODE 6820-61-P