[Federal Register Volume 59, Number 59 (Monday, March 28, 1994)]
[Unknown Section]
[Page ]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-6895]
[Federal Register: March 28, 1994]
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DEPARTMENT OF DEFENSE
48 CFR Parts 45 and 52
[FAR Case 91-93]
Federal Acquisition Regulation; Special Tooling Under Fixed Price
Contracts
AGENCIES: Department of Defense (DOD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Proposed rule.
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SUMMARY: The Civilian Agency Acquisition Council (CAAC) and the Defense
Acquisition Regulations Council (DARC) are proposing revisions to the
Federal Acquisition Regulation (FAR) to amend the Government's policy
on managing and controlling special tooling, for which the Government
has the right to title. This regulatory action was not subject to
Office of Management and Budget review pursuant to Executive Order No.
12866 dated September 30, 1993.
DATES: Comments should be submitted on or before May 27, 1994 to be
considered in the formulation of a final rule.
ADDRESSES: Interested parties should submit written comments to:
General Services Administration, FAR Secretariat (VRS), 18th & F
Streets, NW., room 4037, Washington, DC 20405.
Please cite FAR case 91-93 in all correspondence related to this
case.
FOR FURTHER INFORMATION CONTACT:
Mr. Jack O'Neill at (202) 501-3856 in reference to this FAR case. For
general information, contact the FAR Secretariat, room 4037, GS
Building, Washington, DC 20405, (202) 501-4755. Please cite FAR case
91-93.
SUPPLEMENTARY INFORMATION:
A. Background
The CAAC and the DARC published a final rule on FAR 52.245-17,
Special Tooling, in Federal Acquisition Circular 84-53, in the Federal
Register at 54 FR 48978, November 28, 1989. The purpose of this change
was to clarify that the special tooling clause is used in fixed-price
contracts when the Government will furnish special tooling to the
contractor, or the contractor will acquire or fabricate special
tooling, and the Government intends to maintain rights to the special
tooling until it takes full title or has no further interests in the
tooling. The change listed the type of information the contractors must
keep in their property control system and defined the reporting
requirements for the special tooling. As a result of concern expressed
by some contractors over the increased recordkeeping requirements
required by the clause, revisions were made to that clause and are
contained in this proposed rule. Specifically, we reverted to managing
right-to-title special tooling under an improved special tooling
clause, 52.245-17, and to managing existing Government-owned special
tooling under the clause at 52.245-2, Government Property (Fixed Price
Contracts), as we did prior to FAC 84-53. The revised clause at 52.245-
17 requires contractors to maintain minimal records for right-to-title
special tooling, and we have removed data requirements such as
contracts under which the special tooling was originally acquired,
complete hierarchy of part numbers, tool part number, and some
retention codes. We did add the following data to the lists of special
tooling required under the contract: (1) The part number of the item on
which used and the next higher assembly, as well as the retention code;
(2) storage method code; (3) weight and dimensions; and (4) excess
code. These additions are necessary to permit the Government to make
informed retention or disposal decisions. We also added a paragraph at
FAR 45.306-1 to state that Government-owned special tooling shall be
subject to the Government property clause, and we moved a paragraph
from FAR 45.306-5 addressing the method of acquisition to a more
appropriate location at FAR 45.306-4.
B. Regulatory Flexibility Act
The proposed 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., because the rule
applies to special tooling on Government contracts which, in most
cases, is furnished to large businesses for large dollar production
contracts. An Initial Regulatory Flexibility Analysis has, therefore,
not been performed. Comments are invited from small entities concerning
the affected FAR subpart and will be considered in accordance with
section 610 of the Act. Such comments must be submitted separately and
should cite 5 U.S.C. 601, et seq. (FAR case 91-93), in correspondence.
C. Paperwork Reduction Act
This rule does not impose any additional reporting or recordkeeping
requirements which require the approval of the Office of Management and
Budget (OMB) under 44 U.S.C. 3501, et seq. However, it does reduce the
amount of information required from contractors. A revised clearance
for FAR Part 45 concerning Special Tooling Under Fixed Price Contracts
and reducing the burden hours by a total of 585,600 is being submitted
to OMB for approval. Public comments concerning this request will be
invited through a Federal Register notice.
List of Subjects in 48 CFR Parts 45 and 52
Government procurement.
Albert A. Vicchiolla,
Director, Office of Federal Acquisition Policy.
Therefore, it is proposed that 48 CFR parts 45 and 52 be amended as
set forth below:
1. The authority citation for 48 CFR parts 45 and 52 continues to
read as follows:
Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42
U.S.C. 2473(c).
PART 45--GOVERNMENT PROPERTY
2. Section 45.306-1 is amended by adding paragraph (c) to read as
follows:
45.306-1 Providing existing special tooling.
* * * * *
(c) Contracting Officers shall include a Government property clause
(see 45.106) in contracts that provide Government-owned special tooling
to a contractor.
45.306-5 [Redesignated as 45.306-4, revised and reserved]
3. Section 45.306-5 is redesignated as 45.306-4 and revised to read
as follows:
45.306-4 Contract clause.
(a) The contracting officer shall insert the clause at 52.245-17,
Special Tooling, in solicitations and contracts when--
(1) A negotiated fixed price contract is contemplated; and
(2) The Government decides to acquire the right to take title to
the special tooling acquired or fabricated by the contractor and it is
not possible to identify the special tooling; or
(3) The contract is the gaining contract for special tooling
transferred from another contract and the Government decides to retain
the right to take title to the special tooling at some future date.
(b) The clause at 52.245-17, Special Tooling, does not apply to
items of special tooling under a fixed price contract for which the
Government has decided to acquire the right to take title and the
contracting officer has identified the items, either individually or,
for items costing less than $5,000; as a group, in the Schedule.
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
52.245-2 [Amended]
4. Section 52.245-2 is amended by revising the clause date to read
``(DATE)''; removing the second sentence of paragraph (c)(2); and
inserting the phrase ``and special tooling other than that subject to
the special tooling clause'' after the words ``special test equipment''
in paragraph (c)(3) of the clause.
5. Section 52.245-17 is revised to read as follows:
52.245-17 Special Tooling.
As prescribed in 45.306-4, insert the following clause:
Special Tooling (Date)
(a) Definition and application. (1) Special tooling means jigs,
dies, fixtures, molds, patterns, taps, gauges, other equipment and
manufacturing aids, all components of these items, and replacements
of these items that are of such a specialized nature that without
substantial modification or alteration their use is limited to the
development or production of particular supplies or parts thereof or
performing particular services. The term does not include material,
special test equipment, facilities (except foundations and similar
improvements necessary for installing special tooling), general or
special machine tools, or similar capital items.
(2) This clause does not apply to any items of special tooling--
(i) Acquired by the Contractor before the effective date of this
contract, or replacement of such items, whether or not altered for
use in performing this contract;
(ii) Specifically excluded by the schedule of this contract.
(b) Title. The Government has the right to take title to all
special tooling subject to this clause until such time as the right
to take title is relinquished by the Contracting Officer as provided
for in subparagraph (i)(3) of this clause.
(c) Risk of loss. Except to the extent that the Government shall
have otherwise assumed the risk of loss to special tooling
applicable to this clause, in the event of the loss, theft or
destruction of or damage to any such property, the repair or
replacement shall be accomplished by the Contractor at its own
expense.
(d) Use of special tooling. (1) The Contractor agrees to use the
special tooling only in performing this contract or as otherwise
approved by the Contracting Officer.
(2) In the event the Government elects to remove any special
tooling that is required to continue contract performance, the
contract shall be equitably adjusted in accordance with the
procedures of the changes clause of this contract.
(e) Property control. The Contractor shall maintain adequate
records of all special tooling in accordance with sound industrial
practice. The records shall be made available for Government
inspection at all reasonable times. As a minimum, the following
information shall be included in the Contractor's records:
(1) Nomenclature.
(2) Quantity.
(3) Unit (or group) price.
(4) Number of the contract under which the tooling is
accountable.
(5) Location.
(6) Tool identification number.
(f) Maintenance. The Contractor shall maintain special tooling
in accordance with sound industrial practice. These requirements do
not apply to those items designated by the Contracting Officer for
disposal as scrap or identified as of no further interest to the
Government under paragraph (i), Disposition instructions, of this
clause.
(g) Identification of excess special tooling. The Contractor
shall promptly identify and report all special tooling in excess of
the amounts needed to complete full performance under this contract
(see subparagraph (h)(3) of this clause).
(h) Lists of special tooling. The Contractor shall prepare and
distribute lists of special tooling as described below:
(1) Initial list of special tooling. The Contractor shall
furnish the Government an initial list of all special tooling
subject to this clause. The list shall be furnished within 60 days
after delivery of the first production end item under this contract
unless a later date is prescribed. The list shall specify the
following:
(i) Nomenclature.
(ii) Quantity.
(iii) Unit (or group) price.
(iv) Number of the contract under which the tooling is
accountable.
(v) Location of each item. If special tooling is located at a
subcontractor vendor, specify alternate CAGE code or name and
address if code is not available.
(vi) Tool identification number.
(vii) Part number of item on which used and next higher
assembly.
(viii) Retention codes. Assign one or more of the following to
each item of special tooling:
Code A. Spares Tooling. Required to produce a provisioned spare
part or assembly.
Code B. Judgment (Insurance) Tooling. Fabrication tools for
parts that are not provisioned spares but which in the judgment of
the Contractor will be required at some time for logistic support of
the end item.
Code C. Rate Tooling. Necessary to economically produce at
increased rates (e.g., for mobilization or surge) but not essential
for parts fabrication at low production rates.
Code D. Assembly Tooling. Required for manufacture of the end
product but not required for production of spare parts. Those items
having no postproduction need except for potential modification or
resumed production programs.
Code E. Repair Tooling. Items which are capable of being used
for repair of provisioned parts or assemblies.
Code F. Replaceable Tooling. Spares or judgment tooling which,
in the opinion of the Contractor, can be effectively and
economically replaced by ``soft'' tooling on an ``as required''
basis in lieu of retention of the ``hard'' production tooling for
supporting postproduction requirements.
Code G. Maintenance Tooling. Items which are capable of being
used for depot level maintenance of the applicable end item or
components thereof.
Code H. Crash Damage Tooling. Items which apply to provisioned
or nonprovisioned parts or assemblies which are designated as, or
have the potential of being, required for crash damage repairs.
(ix) Storage method code. Assign one of the following: Code J.
Inside storage. Code K. Outside storage. Code L. Special storage
required.
(x) Estimated unpacked weight of tool in pounds, if over 25
pounds.
(xi) Estimated unpacked dimensions (length, width, and height in
feet) of tool, if over 3 cubic feet.
(2) Final list of special tooling. The Contractor shall furnish
the Contracting Officer a final list of special tooling, subject to
this clause, not later than 90 days prior to the scheduled
deliveries of the last production end item under this contract.
(3) Excess special tooling. Lists of special tooling excess to
this contract shall be furnished within 60 days of the date that the
item is determined to be excess. The Contractor shall include in
this list the applicable excess code as follows:
Code X. Excess due to changes in design or specification of the
end items.
Code Y. Excess due to nonserviceable or nonrepairable condition.
Code Z. Excess due to no further requirements.
(4) Format of lists. Lists furnished by the Contractor shall
state the type of list and shall include all information from
subparagraph (h)(1) of this clause, unless otherwise directed by the
Contracting Officer. All lists will be grouped by retention code as
prescribed in subdivision (h)(1)(viii) of this clause and further
listed in tool identification number sequence.
(5) Distribution of lists. The Contractor shall submit the lists
to each of the following recipients unless otherwise directed:
(i) The Contracting Officer.
(ii) The Administrative Contracting Officer.
(iii) The inventory control point designated by the contracting
office.
(i) Disposition instructions. The Contracting Officer shall
provide the Contractor with written disposition instructions within
180 days of receipt of the list as prescribed by subparagraph (h)(2)
of this clause and within 90 days of receipt of excess special
tooling lists reported in accordance with subparagraph (h)(3) of
this clause. The Contracting Officer may direct disposition by any
of the methods listed in subparagraphs (i)(1) through (i)(3) of this
clause, or a combination of such methods. The Contractor shall
comply with such disposition instructions.
(1) The Contracting Officer may identify specific items of
special tooling to be retained or give the Contractor a list
specifying the products, parts, or services including follow-on
requirements for which the Government may require special tooling
and request the Contractor to identify all usable items of special
tooling on hand that were designed for or used in the production or
performance of such products, parts, or services. Once items of
usable special tooling required by the Government are identified,
the Contracting Officer may--
(i) Direct the Contractor, in writing, to transfer specified
items of special tooling to follow-on contracts requiring their use.
The notification shall specify whether the Government is taking
title to the special tooling or reserving the right to take title.
Those items specified by the Contracting Officer shall be subject to
the provisions of the gaining contract(s); or
(ii) Request the Contractor to enter into an appropriate storage
contract for special tooling specified to be retained by the
Contractor for the Government. Tooling to be stored shall be stored
pursuant to a storage contract between the Government and the
Contractor; or
(iii) Direct the Contractor to transfer title to the Government
(to the extent not previously transferred) and deliver to the
Government those items of special tooling which are specified for
removal from the Contractor's plant.
(2) The Contracting Officer may direct the Contractor to sell,
or dispose of as scrap, for the account of the Government, any
special tooling not specified by the Government pursuant to
subparagraph (i)(1) of this clause. To the extent that the
Contractor incurs any costs occasioned by compliance with such
direction, for which it is not otherwise compensated, the contract
price shall be equitably adjusted in accordance with the procedures
of the changes clause of this contract. The net proceeds of all
sales shall either be credited to the cost of contract performance
or otherwise paid to the Government as directed by the Contracting
Officer. Sale of the special tooling to the prime contractor or any
of its subcontractors is subject to the prior written approval of
the Contracting Officer.
(3) The Contracting Officer may furnish the Contractor with a
statement disclaiming further Government interest or right in
specified tooling.
(4) If the Contracting Officer fails to give disposition
instructions as required by subparagraphs (i)(1), (2), or (3) of
this clause, the Contractor may, at Government risk and expense--
(i) Retain the special tooling in place; or
(ii) Remove and store the special tooling at the Contractor's
plant or in a public warehouse consistent with sound industrial
practice and the item's security classification.
The Contractor will notify the Contracting Officer by certified
mail, at least 30 days in advance, before taking any action under
this subparagraph.
Except as provided in this subparagraph, the Government shall
not be liable to the Contractor for failure to give written notice
required by subparagraphs (i) (1), (2) or (3) of this clause.
(5) Restoration of the Contractor's premises. Unless otherwise
provided in the contract, the Government has no obligation to
restore or rehabilitate the Contractor's premises under any
circumstances (e.g., abandonment, disposition upon completion of
need, or upon contract completion).
(j) Access to special tooling. The Contractor shall provide
access to special tooling subject to this clause at all reasonable
times to all individuals designated by the Contracting Officer.
(k) Storage or shipment. The Contractor shall promptly arrange
for either the shipment or the storage of special tooling specified
in accordance with the final disposition instructions of this
clause. Tooling to be shipped shall be properly packaged, packed and
marked in accordance with the directions of the Contracting Officer.
All operation sheets or other appropriate data necessary to show the
manufacturing operations or processes for which the items were used
or designed shall accompany special tooling to be shipped or stored
or shall otherwise be provided to the Government as directed by the
Contracting Officer. To the extent that the Contractor incurs costs
for storage, shipment, packing, crating, or handling under this
paragraph and is not otherwise compensated for, the contract price
shall be equitably adjusted in accordance with the procedures of the
changes clause of this contract.
(l) Subcontract provisions. To perform this contract, the
Contractor may place subcontracts (including purchase orders)
involving the use of special tooling. If the full cost of the
tooling is charged to those subcontracts, the Contractor agrees to
include in the subcontract appropriate provisions to obtain
Government rights and data comparable to the rights of the
Government under this clause (unless the Contractor and Contracting
Officer agree, in writing, that such rights are not of interest to
the Government). The Contractor agrees to exercise such rights for
the benefit of the Government as directed by the Contracting
Officer.
(End of Clause)
[FR Doc. 94-6895 Filed 3-25-94; 8:45 am]
BILLING CODE 6820-34-M
