[Federal Register Volume 63, Number 94 (Friday, May 15, 1998)]
[Rules and Regulations]
[Pages 26996-26998]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-12842]
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DEPARTMENT OF AGRICULTURE
Office of Procurement and Property Management
48 CFR Parts 426 and 452
[AGAR Case 96-01]
RIN 0599-AA00
Agriculture Acquisition Regulation; Preference for Selected
Biobased Products
AGENCY: Office of Procurement and Property Management, USDA.
ACTION: Final rule.
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SUMMARY: This document amends the Agriculture Acquisition Regulation
(AGAR) to establish policy and procedures for set-asides and
preferences for products developed with assistance provided by the
Alternative Agricultural Research and Commercialization Corporation
(AARCC). This amendment is needed to implement the set-asides and
preferences described in section 1665 of the Food, Agriculture,
Conservation and Trade Act of 1990 (7 U.S.C. 5909). USDA will use these
new policies and procedures to increase its acquisition of AARCC
supported products.
DATES: This rule is effective July 14, 1998.
FOR FURTHER INFORMATION CONTACT: J.R. Holcombe, Jr., (202) 720-8484.
SUPPLEMENTARY INFORMATION:
I. Background
II. Analysis of Comments
III. Procedural Requirements
A. Executive Order Nos. 12866 and 12988.
B. Regulatory Flexibility Act.
C. Paperwork Reduction Act.
D. Small Business Regulatory Enforcement Fairness Act
IV. Electronic Access Addresses
I. Background
The AGAR implements the Federal Acquisition Regulation (FAR) (48
CFR Ch. 1) where further implementation is needed, and supplements the
FAR when coverage is needed for subject matter not covered by the FAR.
This rule amends the AGAR to establish acquisition preferences for
selected biobased products; i.e., nonfood, nonfeed products made from
agricultural and forestry materials and animal by-products.
The Alternative Agricultural Research and Commercialization
Corporation (AARCC), a wholly-owned government corporation of the
Department of Agriculture (USDA), provides financial assistance to
private companies and other parties to commercialize biobased products.
Section 1665 of the Food, Agriculture, Conservation, and Trade Act of
1990 (7 U.S.C. 5909), added by section 729 of the Federal Agriculture
Improvement and Reform Act of 1996 (Section 1665), authorizes Federal
executive agencies to establish set-asides and preferences for biobased
products that have been commercialized with assistance provided by
AARCC.
In a Notice of Proposed Rulemaking (62 FR 52081, October 6, 1997),
USDA announced that this proposed amendment to the AGAR was available
for public review and comment during a 60-day comment period. One
commenter, a trade association, submitted comments on the proposed rule
to USDA. We considered these comments and concluded that no changes to
the proposed rule were required. In this rulemaking document, USDA is
finalizing the proposed amendment to the AGAR.
We are making the following changes to the AGAR:
(a) We are adding AGAR part 426, Other Socioeconomic Programs, with
a subpart 426.70, Preference for Selected Biobased Products. This
subpart establishes policy and procedures for preferences and set-
asides for products developed with AARCC assistance.
(b) Provisions 452.226-70, Preferred Products, 452.226-71, Set-
aside for Mandatory Products, and 452.226-72, Price Preference for
Award, are added to AGAR part 452.
II. Analysis of Comments
We received one comment in response to the Notice of Public
Rulemaking. A trade association commented that it would be appropriate
to include biodiesel fuels and related biobased products on Preference
Lists for biobased products established in accordance with AGAR
426.7005. To the extent that such fuels are products developed with
assistance from AARCC (AARCC products), they would be eligible for
inclusion on the Preference List. Biodiesel fuels that are not AARCC
products are outside the scope of the rule and of Section 1665. Since
establishing preferences for other than AARCC products is outside the
scope of this rule, we did not make any change to the rule.
III. Procedural Requirements
A. Executive Order Nos. 12866 and 12988
A work plan was prepared for this regulation and submitted to the
Office of Management and Budget pursuant to Executive Order No. 12866.
The rule has been determined to be not significant for the purposes of
Executive Order No. 12866. Therefore, the rule has not been reviewed by
the Office of Management and Budget. This rule has been reviewed in
accordance with Executive Order No. 12988, Civil Justice Reform. The
rule meets the applicable standards in section 3 of Executive Order No.
12988.
B. Regulatory Flexibility Act
This rule was reviewed under the Regulatory Flexibility Act, 5
U.S.C. 601-611, which requires preparation of a regulatory flexibility
analysis for any rule which is likely to have significant economic
impact on a substantial number of small entities. This final rule will
not have an adverse impact on a substantial number of small businesses.
In Fiscal Year 1997, USDA contract purchases from small business
concerns totaled $710 million, not including commodity purchases. USDA
purchases of AARCC products are unlikely to exceed $1 million annually,
even with preferences. The anticipated dollar volume of AARCC product
purchases thus would be less than 0.1% of the volume of products and
services USDA now purchases from small businesses. Furthermore, AARCC
product purchases will be made almost entirely from small businesses.
Our analysis of the impact of AARCC preferences suggests that the
AARCC
[[Page 26997]]
preference program will benefit small business concerns. While Section
1665 does not require that all AARCC products be manufactured by or
provided by small business concerns, the AARCC program concentrates on
assistance for small businesses in the development of new commercial
items. Almost all AARCC products eligible for set-asides or preferences
under this rule will be provided by small businesses. The majority of
businesses supported by AARCC are start-up companies. Thus, the overall
impact of this final rule on small entities will be positive.
USDA solicited comments from small entities concerning the impact
of the proposed rule in the Notice of Proposed Rulemaking publicizing
the proposed rule for comment (62 FR 52081, October 6, 1997). No
comments from small entities were received.
USDA certifies that this rule will not have a significant economic
effect on a substantial number of small entities, and, therefore, no
regulatory flexibility analysis has been prepared.
C. Paperwork Reduction Act
No information collection or recordkeeping requirements are imposed
on the public by this rule. Accordingly no OMB clearance is required by
section 350(h) of the Paperwork Reduction Act, 44 U.S.C. 3501, et.
seq., or OMB's implementing regulation at 5 CFR Part 1320.
D. Small Business Regulatory Enforcement Fairness Act
This rule has been submitted to each House of Congress and the
Comptroller General in accordance with the Small Business Regulatory
Enforcement Fairness Act of 1996, 5 U.S.C. 801, et seq.
IV. Electronic Access Addresses
You may send electronic mail (E-mail) to [email protected], or
contact us via fax at (202) 720-8972, if you would like additional
information about this rule.
List of Subjects in 48 CFR Parts 426 and 452
Agriculture, Government procurement.
For the reasons set out in this preamble, the Department is
amending Chapter 4 of Title 48 of the Code of Federal Regulations as
follows:
1. Add Part 426 to read as follows:
PART 426--OTHER SOCIOECONOMIC PROGRAMS
Subpart 426.70--Preference for Selected Biobased Products
Sec.
426.7000 Scope of subpart.
426.7001 Applicability.
426.7002 Authority.
426.7003 Policy.
426.7004 Definitions.
426.7005 Preference list.
426.7006 Use of a set-aside or a price preference.
426.7007 Use of a technical evaluation preference.
426.7008 Identification of preferred products.
426.7009 Contract provisions.
Authority: 5 U.S.C. 301; 7 U.S.C. 5909; 40 U.S.C. 486(c).
Subpart 426.70--Preference for Selected Biobased Products
426.7000 Scope of subpart.
This subpart supplements the FAR to implement the set-asides and
preferences described in section 1665 of the Food, Agriculture,
Conservation and Trade Act of 1990 (7 U.S.C. 5909).
426.7001 Applicability.
This subpart applies to USDA and all of its components, including
corporations.
426.7002 Authority.
Section 1665 of the Food, Agriculture, Conservation and Trade Act
of 1990 (7 U.S.C. 5909) authorizes USDA to establish set-asides and
other preferences for products that have been assisted by the
Alternative Agricultural Research and Commercialization Corporation
(AARCC).
426.7003 Policy.
(a) AARCC provides financial assistance to private companies and
other parties to commercialize nonfood, nonfeed products made from
agricultural and forestry materials and animal by-products (biobased
products). Biobased products by their nature are environmentally
friendly, and, in many instances, use agricultural material that
otherwise would be waste. It is the policy of USDA to acquire AARCC
products to the maximum extent practicable. This policy applies to all
acquisitions of products regardless of dollar value.
(b) USDA shall satisfy its requirements for products the same or
essentially the same as AARCC products by applying the preferences or
set-asides described by this subpart.
426.7004 Definitions.
As used in this subpart--
AARCC products are products developed with assistance provided by
AARCC as authorized by 7 U.S.C. 5905.
Acquisitions of products means an acquisition of one or more
products for the use of the Government.
Acquisitions involving the use of products means an acquisition in
which a Government contractor uses products in contract performance.
Price preference means an amount, expressed as a percentage, to be
used in the evaluation of offers in an acquisition of products.
Set-aside means a requirement that vendors responding to a
solicitation offer AARCC products.
Solicitation includes actions taken under parts 12, 13, 14, 15, and
36 of the Federal Acquisition Regulation.
Technical evaluation preference means the use of an award factor or
subfactor in which the Government expresses its preference for AARCC
products.
426.7005 Preference list.
(a) The Office of Procurement and Policy Management (OPPM) and
AARCC jointly shall establish and maintain a Preference List for AARCC
products.
(b) The Preference List shall contain the list of preferred
products, source information for these products, the type(s) of
preference to be applied, the beginning and ending dates for the use of
preferences, and other terms established to define the preference given
to a product.
(c) The Preference List will be publicized within USDA by means of
AGAR Advisories (see 401.371). Copies of the Preference List may be
obtained from OPPM. The Preference List will also be posted on the
World Wide Web at the USDA Procurement Home Page.
426.7006 Use of a set-aside or a price preference.
Acquisitions for products the same or essentially the same as those
products appearing on the Preference List shall either be set-aside
exclusively or shall include a price preference for those products
shown on the Preference List. The actual price preference to be used
shall be determined by the requiring office but may not exceed the
percentage shown on the Preference List.
426.7007 Use of a technical evaluation preference.
Acquisitions involving the use of products the same or essentially
the same as those products appearing on the Preference List shall
include a technical evaluation preference, if authorized in
[[Page 26998]]
the Preference List. The technical evaluation preference may be
determined by the contracting officer specifically for each
acquisition.
426.7008 Identification of preferred products.
(a) Products subject to a set-aside or technical preference shall
be separately listed in the schedule, specification, or performance
work statement.
(b) Products subject to a price preference shall be separately
listed in the schedule.
426.7009 Contract provisions.
(a) Each solicitation containing a price or technical preference
under this subpart shall contain the provision 452.226-70, Preferred
Products.
(b) Each solicitation for products subject to a set-aside shall
include the provision 452.226-71, Set-Aside For Mandatory Products.
(c) Each solicitation for products subject to a price preference
shall include the provision 452.226-72, Price Preference for Award.
(d) Solicitations for products may contain both the provision in
452.226-71 and the provision found in 452.226-72.
(e) The provisions prescribed in this section are not required for
acquisitions accomplished using the purchase card as a stand alone
tool.
PART 452--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
2. The authority citation for Part 452 continues to read as
follows:
Authority: 5 U.S.C. 301 and 40 U.S.C. 486(c).
3. Add sections 452.226-70, 452.226-71, and 452.226-72 to read as
follows:
452.226-70 Preferred Products.
As prescribed in 426.7009(a), include the following provision:
Preferred Products (May 1998)
Specific products required by this solicitation and resulting
contract are subject to a price or a technical preference. A list of
these products, the specific preference, and the manufacturer or
producer is included below.
Contract Line Item (or other location in this solicitation): *---------
Product:---------------------------------------------------------------
Manufacturer/Producer: *-----------------------------------------------
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Preference: *----------------------------------------------------------
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(End of provision)
* For each line item to which a preference applies, Contracting
officer shall insert appropriate information.
452.226-71 Set-aside for Mandatory Products.
As prescribed in 426.7009(b), include the following provision:
Set-Aside for Mandatory Products (May 1998)
Specific products are set-aside as mandatory products. These are
separately listed in the schedule, specifications, or performance
work statement. Specific terms governing the set-aside, and source
information for the products are shown below.
Contract Line Item (or other location in this solicitation): *---------
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Product: *-------------------------------------------------------------
Manufacturer/Producer: *-----------------------------------------------
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Set-Aside Terms: *-----------------------------------------------------
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(End of provision)
* For each line item to which a set-aside applies, Contracting
officer shall insert appropriate information.
452.226-72 Price Preference for Award.
As prescribed in 426.7009(c), include the following provision:
Price Preference for Award (May 1998)
Certain products listed in the schedule of this solicitation are
subject to a price preference. A list of these products, the amount
of the preference, and source information is included in provision
452.226-70, Preferred Products. For purposes of evaluation of offers
only, the offered prices for these products will be reduced by the
price preference listed in the solicitation.
(End of provision)
Done at Washington, D.C., this 7th day of May, 1998.
W.R. Ashworth,
Director, Office of Procurement and Property Management.
[FR Doc. 98-12842 Filed 5-14-98; 8:45 am]
BILLING CODE 3410-XE-P
