[Federal Register Volume 76, Number 22 (Wednesday, February 2, 2011)]
[Rules and Regulations]
[Pages 6004-6006]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-2043]
[[Page 6003]]
Vol. 76
Wednesday,
No. 22
February 2, 2011
Part IV
Department of Defense
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Defense Acquisition Regulations System
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48 CFR Parts 245 and 252
Defense Federal Acquisition Regulation Supplements; Marking of
Government-Furnished Property; Reporting of Government Property Lost,
Stolen, Damaged, or Destroyed; Final Rules
Federal Register / Vol. 76, No. 22 / Wednesday, February 2, 2011 /
Rules and Regulations
[[Page 6004]]
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DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System
48 CFR Parts 245 and 252
[DFARS Case 2008-D050]
RIN 0750-AG44
Defense Federal Acquisition Regulation Supplement; Marking of
Government-Furnished Property
AGENCY: Defense Acquisition Regulations System; Department of Defense
(DoD).
ACTION: Final rule.
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SUMMARY: DoD is issuing a final rule amending the Defense Federal
Acquisition Regulation Supplement (DFARS) to require contractors to
tag, label, or mark Government-furnished property items identified in
the contract as subject to serialized item management.
DATES: Effective Date: February 2, 2011.
FOR FURTHER INFORMATION CONTACT: Ms. Clare Zebrowski, 703-602-0289.
SUPPLEMENTARY INFORMATION:
I. Background
This final rule provides a clause at DFARS 252.245-7001, Tagging,
Labeling, and Marking of Government-Furnished Property, requiring
contractors to tag, label, or mark Government-furnished property items
identified in the contract when such items are subject to serialized
item management. The final rule has been changed as follows--
The proposed coverage in DFARS 211.274 has been relocated
to DFARS subpart 245.1.
DFARS 245.102(4) now provides the complete list of
exceptions to the policy to require tagging, labeling, and marking of
property, rather than including the exceptions in the clause, because
the Government will identify to the contractor the items that require
tagging, labeling, or marking. The list had been expanded to include
exceptions based on determinations by the agency.
Adds DFARS clause 252.245-7001, in lieu of proposed DFARS
252.211-70YY, to align with coverage being relocated from DFARS part
211 to part 245.
The proposed definition of ``Government-furnished
property'' has been deleted and replaced with a reference to the
definition in FAR 52.245-1.
II. Discussion and Analysis
DoD published a proposed rule at 75 FR 25160 on May 7, 2010, and
the public comment period closed on July 6, 2010. Three respondents
submitted comments that are grouped into four categories. The following
is a discussion of the comments and the changes included in this final
rule as a result of those comments.
A. Location of Coverage
Comment: One respondent recommended that DFARS 211.274-5 should be
redesignated as DFARS 245.102-70, as the mechanics for implementing
this rule are not included at DFARS 211.274, but in FAR 52.245-1,
Government Property.
DoD Response: The coverage has been relocated to DFARS part 245
from part 211.
Comment: One respondent recommended that the contract clause be
placed in DFARS section 252.245, as opposed to DFARS 252.211.
DoD Response: DoD has made this change to coincide with the related
recommendation to move the policy for marking Government-furnished
property from DFARS part 211 to part 245.
B. Accountability
Comment: One respondent asked if the rule will require contractors
to conduct periodic inventories, and if so, who is to receive the
results of the inventories.
DoD Response: The rule does not contain a requirement for
contractors to conduct physical inventories. However, the contractor is
responsible under FAR 52.245-1, Government Property, paragraph
(f)(1)(iv), to periodically perform, record, and disclose physical
inventory results. Physical inventory results are generally provided to
the assigned Government property administrator or other responsible
Government official during a property management system analysis or
audit.
Comment: One respondent asked if the contracting officer will be
responsible for ensuring property accountability.
DoD Response: The contracting officer is responsible for ensuring
that the contractor complies with all contract terms and conditions, to
include Government property accountability.
Comment: One respondent asked if a chain of custody is feasible for
property accountability or should accountability be delegated to a
different Government official.
DoD Response: The contracting officer is responsible for ensuring
compliance with the terms and conditions of the contract. However, the
contracting officer may appoint a property administrator (FAR 45.101)
to administer the contract requirements relating to Government property
in the possession of a contractor.
Comment: One respondent recommended that the rule specifically
detail a tracking procedure, which could mirror existing policy for
tracking Government property throughout DoD.
DoD Response: The respondent's recommendation is outside the scope
of the rule. It should be noted, however, that FAR 52.245-1, Government
Property, paragraph (b)(1), already requires contractors to have a
system to manage (control, use, preserve, protect, repair, and
maintain) Government property in their possession.
Comment: One respondent recommended that the rule address who will
be held responsible for lost, missing, or stolen property, and if
contractors will be responsible for designating a responsible officer.
DoD Response: Contractor responsibility and liability requirements
for lost, missing, or stolen property are provided under FAR 52.245-1,
Government Property. Accordingly, it is neither necessary nor
appropriate for the rule to require contractors to designate a
responsible person, persons, or positions.
Comment: One respondent stated that the final rule should address
the full cycle necessary to achieve the desired end-state of
accountability and control.
DoD Response: The end-state to which the respondent refers is based
on a variety of factors, many of which are beyond the scope of this
rule. However, the tagging, labeling, and marking requirements
contained in this rule are important enablers toward the desired end-
state of accountability and control. Contractor responsibilities for
accountability and control are provided under FAR 52.245-1, Government
Property.
C. Policy
Comment: One respondent recommended a cross reference at 211.274-5
to policy at 245.102-70, with addition of policy at DFARS 245.102-70
regarding the requirement for contractors to tag, label, or mark items
of Government-furnished property identified in the contract when the
Government-furnished material and Government-furnished property are
subject to serialized item management.
DoD Response: DoD has moved the entire discussion of policy to
245.102(4).
[[Page 6005]]
Comment: One respondent recommended that the rule address potential
conflicts with related sections of the CFR.
DoD Response: DoD is unable to respond in detail to the comment as
the respondent did not identify any specific potential conflicts.
Comment: One respondent asked if marked items will be annotated in
the initial contract documents. Another respondent recommended that the
Government provide drawings and instructions to the contractor on how
and where to mark the Government-furnished property.
DoD Response: The rule requires identification in the contract of
all Government-furnished property subject to serialized item
management, in accordance with Procedures, Guidance, and Information
245.201-71, GFP attachments to solicitations and awards.
Comment: One respondent recommended that the rule include a
reference to 48 CFR (DFARS) 245.105.
DoD Response: The requirements of DFARS 245.105 are not directed at
contractors. Rather, they are directed at the Government agency
responsible for contract administration. Contractor responsibilities
for accountability and control are provided under FAR 52.245-1,
Government Property.
D. Exceptions
Comment: One respondent asked what the impact of the rule is on the
exceptions listed in 48 CFR (DFARS) 211.274-2(b).
DoD Response: The exceptions at 211.274-2 are exceptions to the
requirement that the contractor be required to provide DoD unique item
identification for delivered items based on determinations by the
agency. The impact to the rule of not including the exceptions at DFARS
211.274-2(b) would be to create inconsistency in application of
contractor requirements for marking, tagging, and labeling. While the
exceptions at DFARS 211.274-2(b) apply to new deliverables, the
principle applies to Government-furnished property as well. In
recognition of this, DoD has addressed the potential inconsistent
application by including these exceptions in the final rule. The
exceptions listed at DFARS 211.274-2(b) have been added to DFARS
245.102(4).
Comment: One respondent asked if the exceptions to UID reporting
for Government-furnished equipment at DFARS 211.274-4 are to remain
unchanged, or will the section now only apply to non-Government-
furnished contractor property.
DoD Response: The exceptions cited in DFARS 211.274-4 apply to the
reporting requirements under DFARS 252.211-7007, Reporting of
Government-Furnished Equipment in the DoD Item Unique Identification
Registry. The exceptions do not apply to the requirements of this rule.
Comment: One respondent recommended that the rule include specific
language assuring that contractor-acquired special tooling and special
test equipment, having been physically marked by the contractor, and
subsequently transferred in-place, does not have to be retagged,
relabeled, or remarked until the tooling or test equipment leaves the
contractor's possession or accountability.
DoD Response: The exception provided at paragraph (c)(1) of the
proposed clause was sufficient to cover this concern. This statement
has been retained in paragraph (c) of the final clause, to ensure that
the contractor does not need to tag, label, or mark Government-
furnished property that has already been tagged, labeled, or marked.
E. Definition
Comment: One respondent recommended that the definition of
``Government-furnished property'' not be repeated in the rule since it
appears in both FAR part 45 and 52.245-1.
DoD Response: The final rule has been changed to reference the FAR
definition.
F. Clause Prescription
Comment: One respondent recommended deleting the proposed reference
at DFARS 211.274-6 to FAR 52.245-2, Government Property Installation
Operation Services, as a condition for use of DFARS 252.245-70YY.
DoD Response: Use of the clause at 252.245-7001, Tagging, Labeling,
and Marking of Government-Furnished Property, is not dependent on the
presence of FAR 52.252-2. The new clause prescription at DFARS 245.107
now refers only to the presence of the FAR clause 52.245-1, Government
Property.
G. Applicability to international and FMS contracts
Comment: One respondent asked if the rule applies to foreign
Government and international contracts under 48 CFR (DFARS) 245.3.
DoD Response: The rule applies to contracts with foreign
Governments and international organizations under DFARS 245.3.
Comment: One respondent asked about the impact on FMS sales.
DoD Response: The security assistance community will derive the
same tagging, labeling, and marking benefits of this rule. The new
DFARS clause is mandatory for all DoD contracts that contain the FAR
clause 52.245-1, Government Property, including those for foreign
customers.
H. Applicability to existing contracts
Comment: One respondent noted that on-going contracts were not
priced to consider the implementation of this rule. Therefore, there
may be a need for pricing adjustments for those contracts.
DoD Response: The clause does not apply to existing contracts
unless the contracting officer executes a bilateral contract
modification, consistent with FAR 1.108(d), which would require
consideration.
III. Executive Order 12866
This is not a significant regulatory action and, therefore, was not
subject to review under Section 6(b) of Executive Order 12866,
Regulatory Planning and Review, dated September 30, 1993. This rule is
not a major rule under 5 U.S.C. 804.
IV. Regulatory Flexibility Act
DoD has prepared a final regulatory flexibility analysis consistent
with 5 U.S.C. 604. A copy of the analysis may be obtained from the
individual specified herein. The analysis is summarized as follows:
The objective of the rule is to improve the accountability and
control of DoD assets. The tagging, labeling, and marking requirements
are consistent with DoD's use of unique identifiers to track and trace
property items throughout their lifecycle. Three respondents provided
twenty-three comments on the proposed rule. None of the comments was in
response to the initial regulatory flexibility analysis. Therefore,
there is no change to the rule in this regard.
The rule will apply to DoD contractors provided with Government-
furnished property that is subject to serialized item management. The
clause at DFARS 252.211-7001, Tagging, Labeling, and Marking of
Government-Furnished Property, requires the contractor to tag, label,
or mark Government-furnished property items identified in the contract
when the requiring activity determines that such items are subject to
serialized item management (serially-managed items).
This final rule is not expected to 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.,
[[Page 6006]]
because any start-up costs that contractors will incur to comply with
the rule are expected to be minimal.
Moreover, the rule excludes items, as determined by the head of the
agency, that are to be used to support a contingency operation; or to
facilitate defense against or recovery from nuclear, biological,
chemical, or radiological attack; or for which a determination and
findings has been executed concluding that it is more cost effective
for the Government requiring activity to assign, mark, and register the
unique item identification after delivery of an item acquired from a
small business concern or a commercial item acquired under FAR part 8
or part 12.
The rule does not duplicate, overlap, or conflict with any other
Federal rules. DoD considers the approach described in the rule to be
the most practical and beneficial for both Government and industry.
V. Paperwork Reduction Act
The Paperwork Reduction Act (Pub. L. 96-511) does not apply because
the rule does not impose additional information collection requirements
that require the approval of the Office of Management and Budget under
44 U.S.C. 3501, et seq.
List of Subjects in 48 CFR Parts 245 and 252
Government procurement.
Ynette R. Shelkin,
Editor, Defense Acquisition Regulations System.
Therefore, 48 CFR parts 245 and 252 are amended as follows:
0
1. The authority citation for 48 CFR parts 245 and 252 continues to
read as follows:
Authority: 41 U.S.C. 421 and 48 CFR chapter 1.
PART 245--GOVERNMENT PROPERTY
0
2. In section 245.102, paragraph (4) is added to read as follows:
245.102 Policy.
* * * * *
(4) Government-furnished property identification.
(i) It is DoD policy that Government-furnished property be tagged,
labeled, or marked based on DoD marking standards (MIL Standard 130) or
other standards, when the requiring activity determines that such items
are subject to serialized item management (serially-managed items). The
list of Government-furnished property subject to serialized item
management will be identified in the contract in accordance with PGI
245.201-71, GFP attachments to solicitations and awards.
(ii) Exceptions. The Contractor will not be required to tag, label,
or mark--
(A) Government-furnished property that was previously tagged,
labeled, or marked;
(B) Items, as determined by the head of the agency, that are to be
used to support a contingency operation; or to facilitate defense
against or recovery from nuclear, biological, chemical, or radiological
attack;
(C) Items for which a determination and findings has been executed
concluding that it is more cost effective for the Government requiring
activity to assign, mark, and register the unique item identification
after delivery of an item acquired from a small business concern or a
commercial item acquired under FAR part 12 or part 8.
(1) The determination and findings shall be executed by--
(i) The Component Acquisition Executive for an Acquisition Category
(ACAT) I program; or
(ii) The head of the contracting activity for all other programs.
(2) A copy of the executed determination and findings shall be
provided to the DoD Unique Item Identification Policy Office at this
address: OUSD (AT&L) DPAP/Program Development and Implementation, Room
3B855, 3060 Defense Pentagon, Washington, DC 20301-3060; or by
facsimile to 703-602-6047.
(D) Items that are contractor-acquired property;
(E) Property under any statutory leasing authority;
(F) Property to which the Government has acquired a lien or title
solely because of partial, advance, progress, or performance-based
payments;
(G) Intellectual property or software; or
(H) Real property.
245.107-70 [Redesignated as 245.107]
0
3. Section 245.107-70 is redesignated as 245.107 and revised to read as
follows:
245.107 Contract clauses.
(a) Use the clause at 252.245-7000, Government-Furnished Mapping,
Charting, and Geodesy Property, in solicitations and contracts when
mapping, charting, and geodesy property is to be furnished.
(b) Use the clause at 252.245-7001, Tagging, Labeling, and Marking
of Government-Furnished Property, in solicitations and contracts that
contain the clause at FAR 52.245-1, Government Property.
PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
0
4. In section 252.245-7000, the introductory text is amended by
removing ``245.107-70'' and adding in its place ``245.107(a)''.
0
5. Add section 252.245-7001 to read as follows:
252.245-7001 Tagging, Labeling, and Marking of Government-Furnished
Property
As prescribed in 245.107(b), use the following clause:
TAGGING, LABELING, AND MARKING OF GOVERNMENT-FURNISHED PROPERTY (FEB
2011)
(a) Definitions. As used in this clause--
Government-furnished property is defined in the clause at FAR
52.245-1, Government Property.
Serially-managed item means an item designated by DoD to be
uniquely tracked, controlled, or managed in maintenance, repair,
and/or supply systems by means of its serial number.
(b) The Contractor shall tag, label, or mark Government-
furnished property items identified in the contract as subject to
serialized item management (serially-managed items).
(c) The Contractor is not required to tag, label, or mark
Government-furnished property previously tagged, labeled, or marked.
(End of clause)
[FR Doc. 2011-2043 Filed 2-1-11; 8:45 am]
BILLING CODE 5001-08-P