2013-18167. Department of State Acquisition Regulation

AGENCY:

State Department.

ACTION:

Proposed rule.

SUMMARY:

This proposed rule will update the Department of State Acquisition Regulation (DOSAR) to conform to recent Federal Acquisition Regulation (FAR) changes and adds a new DOSAR clause and provision regarding reporting certain categories of Government-furnished and contractor-acquired property.

DATES:

The Department will accept comments from the public up to September 27, 2013.

ADDRESSES:

You may submit comments by any of the following methods:

• Email: [e-mail]. You must include the RIN in the subject line of your message.
• Mail (paper, disk, or CD-ROM submissions): Ella Ramirez, Senior Procurement Analyst, Policy Division, Department of State, Office of the Procurement Executive, 2201 C Street NW., Suite 900, State Annex Number 27, Washington, DC 20522-0602.
• Fax: [phone].
• Persons with access to the Internet may also view this notice and provide comments by going to the regulations.gov Web site at http://www.regulations.gov/​index.cfm and searching on docket DOS-2013-8395.

FOR FURTHER INFORMATION CONTACT:

Ella Ramirez, Senior Procurement Analyst, Policy Division, Department of State, Office of the Procurement Executive, 2201 C Street NW., Suite 900, State Annex Number 27, Washington, DC 20522-0602; email address: [e-mail].

SUPPLEMENTARY INFORMATION:

Background

This proposed rule provides updates to the DOSAR Government Property coverage to correspond with current FAR requirements and to implement Department of State policies regarding Government Property. The proposed rule would make the following changes:

• Update DOSAR Part 645, Government Property to conform to the current version of FAR Part 45. FAR Part 45 was completely revised and re-structured in 2007. Part 45 has been updated since, most recently in April 2012. DOSAR Part 645 was last updated in 1999, and is therefore out of date.
• Add a new DOSAR provision and clause regarding management and reporting of Government-furnished and contractor-acquired property. The provision at DOSAR 652.245-70, Status of Property Management System, was inadvertently left out of the previously approved information collection and it is now being added to update the DOSAR rule. The provision requests information from offerors regarding their property management systems in order to comply with FAR 45.201(c), which says that the solicitation shall require all offerors to submit a description of the offeror's property management system, plan, and any customary commercial practices, voluntary consensus standards, or industry-leading practices and standards to be used by the offeror in managing Government property. Additionally, the Department must be able to determine if there will be a need for a review of the prospective contractor's property control system. The new clause at DOSAR 652.245-71, Accounting for Government Property, requests quarterly reporting of U.S. Department of State capitalized property which consists of the following:

○ Highway motor vehicles and aircraft, regardless of cost, that are provided by the Government or acquired by a contractor for the Government;

○ Software exceeding $500,000 in value, including labor costs to develop, that is provided by the Government or acquired by a contractor for the account of the Government; and

○ Personal property greater than $25,000 (and not included in the above list) that is provided by the Government or acquired by the contractor for the account of the Government. The personal property must be complete within itself; must not lose its identity or become a component part of other property when put into use; and is of a durable nature with an estimated useful life expectancy to exceed two years.

This clause is being added due to the need to obtain current data to support the Department of State (DOS) financial statements. From a financial accounting perspective, DOS must have a way of keeping track of its capital assets; therefore, this clause requires reporting of all personal property that meets the criteria for capitalization, as set forth in the Foreign Affairs Manual (FAM) at 4 FAM 734.2.

Regulatory Findings

Administrative Procedure Act

In accordance with provisions of the Administrative Procedure Act, the Department is publishing this proposed rule and inviting public comment.

Regulatory Flexibility Act

The Department of State, in accordance with the Regulatory Flexibility Act (5 U.S.C. 605(b)), has reviewed this regulation and, by approving it, certifies that this rule will not have a significant economic impact on a substantial number of small entities. This determination was based on the fact that the reporting requirements are targeted at a very narrow segment of government property and based on a determination that there are only 14 contractors who are currently subject to the reporting requirements of the clause. Only four of these are small business concerns. Thus, it was concluded that the rule will not have a significant economic impact on a substantial number of small entities.

Unfunded Mandates Act of 1995

This rule will not result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more in any year and it will not significantly or uniquely affect small governments. Therefore, no actions were deemed necessary under the provisions of the Unfunded Mandates Act of 1995.

Small Business Regulatory Enforcement Fairness Act of 1996

This rule is not a major rule as defined by the Small Business Regulatory Enforcement Act of 1996 (5 U.S.C. 801 et seq.). This rule will not result in an annual effect on the economy of $100 million or more; a major increase in costs or prices; or significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based companies to compete with foreign-based companies in domestic and import markets. This determination was based on the fact that the reporting requirements are targeted at a very narrow segment of government property, and on a determination that there are only 14 contractors who are currently subject to the reporting requirements of the clause. The rule does not place new requirements on contract performance, but merely addresses reporting of existing information.

Executive Orders 12866 and 13563

Executive Orders (E.O.) 12866 and 13563 direct agencies to assess costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts and equity). E.O. 13563 emphasized the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. The Department of State does not consider this rule to be a “significant regulatory action” under Executive Order 12866, section 3(f), Regulatory Planning and Review.

In addition, the Department is exempt from Executive Order 12866 except to the extent that it is promulgating regulations in conjunction with a domestic agency that are significant regulatory actions. The Department has nevertheless reviewed the regulation to ensure its consistency with the regulatory philosophy and principles set forth in the Executive Orders and finds that the benefits of the proposed rule outweigh any costs.

Executive Order 13132

This rule will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, in accordance with section 6 of Executive Order 13132, it is determined that this rule does not have sufficient federalism implications to require consultations or warrant the preparation of a federalism summary impact statement.

Executive Order 13175

The Department has determined that this rulemaking will not have tribal implications, will not impose substantial direct compliance costs on Indian tribal governments, and will not pre-empt tribal law. Accordingly, the requirements of Executive Order 13175 do not apply to this rulemaking.

Paperwork Reduction Act

The Paperwork Reduction Act of 1980 (44 U.S.C. Chapter 35) applies, because the proposed rule imposes information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. 3501 et seq.

The Department of State is seeking OMB approval for the information collection described below.

• Title of Information Collection: Department of State Acquisition Regulation (DOSAR) 652.245-70, Status of Property Management System
• OMB Control Number: 1405-0050
• Type of Request: Revision of Currently Approved Collection
• Originating Office: Bureau of Administration, Office of Procurement Executive, Policy Division (A/OPE/PD)
• Form Number: None
• Respondents: Business and other for-profit and not-for-profit organizations wishing to receive Department of State contracts.
• Estimated Total Number of Respondents: 3,466
• Estimated Total Number of Responses: 9,330
• Average Time Per Response: 30 hours
• Total Estimated Burden Time: 275,984
• Frequency: On Occasion
• Obligation to Respond: Required to Obtain or Retain a Benefit

The total number of responses was increased by fourteen from 9,316 to 9,330. As a result of this change, the total estimated burden was increased from 275,970 hours to 275,984 hours. The increase in the responses and the burden is due to the impact of this DOSAR provision.

The Department will accept comments from the public up to September 27, 2013.

ADDRESSES:

You may submit comments by any of the following methods:

• Web: www.Regulations.gov, search for this notice by using this rule's docket number—DOS-2013-8395.
• E-Mail: [e-mail] with the subject line, “DOSAR Rule Comments.”
• Fax: [phone]

Direct requests for additional information regarding the collection listed in this notice, including requests for copies of the proposed collection instrument and supporting documents, to Ella Ramirez, Senior Procurement Analyst, who may be reached at [phone], or at [e-mail].

Abstract of proposed collection:

The proposed rule will update the Department of State Acquisition Regulation (DOSAR) to conform to recent Federal Acquisition Regulation (FAR) changes, and adds a new DOSAR provision, 652.245-70, regarding reporting on the status of offeror's property management systems. Respondents are offerors on solicitations for contracts under which specified government property will be provided. This is an existing IC, 1405-0050, Department of State Acquisition Regulation (DOSAR) 652.245-70, Status of Property Management System. This provision was inadvertently left out of the previously approved Information Collection package. The new provision is being inserted into the DOSAR and concurrently added into the current IC. The new DOSAR provision (and IC requirement) asks for procedures for government property management (transportation, software, personal property). Over the course of the last two fiscal years (FY 11 and FY 12), only four solicitations were issued under which this new reporting was required, and on those solicitations, an average of 2.3 submissions was received. Based on conversations with a sample of submitters, we estimate that approximately 1.0 hour is required to research, document and incorporate the information into the proposal.

We are soliciting public comments to permit the Department to:

• Evaluate whether the proposed information collection is necessary for the proper functions of the Department.
• Evaluate the accuracy of our estimate of the time and cost burden for this proposed collection, including the validity of the methodology and assumptions used.
• Enhance the quality, utility, and clarity of the information to be collected.
• Minimize the reporting burden on those who are to respond, including the use of automated collection techniques or other forms of information technology.

Please note that comments submitted in response to this Notice are public record. Before including any detailed personal information, you should be aware that your comments as submitted, including your personal information, will be available for public review.

Legal Authorities are as follows:

(1) Code of Federal Regulations, title 48, chapter 6, Department of State Acquisition Regulation

(2) Code of Federal Regulations, title 48, chapter 1, Federal Acquisition Regulation

(3) Public Law 103-236, Foreign Relations Authorization Act, Fiscal Years 1994 and 1995

(4) Foreign Service Buildings Act of 1926, as amended (22 U.S.C. 302)

(5) Omnibus Diplomatic Security and Antiterrorism Act of 1986 (22 U.S.C. 4852)

(6) Foreign Relations Authorization Act, Fiscal Years 1990 and 1991 (22 U.S.C. 4864)

Methodology:

The information collections may be sent to the Office of Finance via email at [e-mail].

List of Subjects in 48 CFR Parts 645 and 652

• Government procurement
• Electronic commerce
• Contracts

Accordingly, for reasons set forth in the preamble, title 48, chapter 6 of the Code of Federal Regulations is proposed to be amended as follows:

1. Revise part 645 to read as follows:

PART 645—GOVERNMENT PROPERTY

Subpart 645.1—General

645.107

Contract clauses.

645.107-70

DOSAR contract clause and solicitation provision.

Authority: 40 U.S.C. 121; 22 U.S.C. 2651a; 48 CFR Subpart 1.3.

645.107 Contract clauses.

645.107-70 DOSAR contract clause and solicitation provision.

(a) The contracting officer shall insert the provision at 652.245-70, Status of Property Management System, in solicitations when any of the following conditions apply:

(1) Highway motor vehicles and aircraft, regardless of cost, are provided by the Government or acquired by the contractor for the account of the Government;

(2) Software exceeding $500,000 in value, including labor costs to develop, is provided by the Government or acquired by the contractor for the account of the Government; or

(3) Personal property greater than $25,000 (and not in paragraphs (a)(1) or (2) of this section) is provided by the Government or acquired by the contractor for the account of the Government. The personal property must be complete within itself; does not lose its identity or become a component part of other property when put into use; and is of a durable nature with an estimated useful life expectancy to exceed two years.

(b) The contracting officer shall insert the clause at 652.245-71, Accounting for Government Property, in all solicitations and contracts than contain the provision at 652.245-70.

PART 652—SOLICITATION PROVISIONS AND CONTRACT CLAUSES

2. The authority citation for part 652 continues to read as follows:

Authority: 40 U.S.C. 486(c); 22 U.S.C. 2658.

3. Add section 652.245-70 to read as follows:

652.245-70

Status of Property Management System.

As prescribed in 645.107-70(a), insert the following provision:

Status of Property Management System (DATE)

(a) When used in this provision, government-furnished property, government property, and contractor-acquired property are as defined in FAR 45.101.

(b) Offerors shall include in their quote or offer:

(1) Whether the offeror's property management system that will be used on this contract to track government-furnished property and/or contractor-acquired property has been determined to be adequate by a Federal property manager;

(2) The name, address, telephone number and email address of both the—

(i) Cognizant Administrative Contracting Officer (ACO) responsible for review and determination of adequacy of the contractor's property system; and

(ii) The cognizant contractor government property manager;

(3) The voluntary consensus standard or industry leading practices and standards to be used in the management of government property, or existing property management plans, methods, practices or procedures for accounting of property.

(End of provision)

4. Add section 652.245-71 to read as follows:

652.245-71

Accounting for Government Property.

As prescribed in 645.107-70(b), insert the following clause:

Accounting for Government Property (DATE)

(a) Definitions. As used in this clause:

Disposition means government property that has been removed from use on the contract.

Highway motor vehicle means any vehicle, self propelled or drawn by mechanical power, designed and operated principally for highway transportation of property or passengers. (41 CFR 102-34.35)

(b) The Contractor shall establish and maintain a property management system that is in accordance with the clause at FAR 52.245-1, Government Property. This clause supplements these requirements by specifying the U.S. Department of State capitalized property reporting requirements.

(c) The Contractor shall submit electronically one report on an annual basis and three other reports on a quarterly basis for the following:

(1) Where highway motor vehicles and aircraft, regardless of cost, are provided by the Government or acquired by the Contractor for the account of the Government;

(2) Where software exceeding $500,000 in value, including labor cost to develop, is provided by the Government or acquired by the Contractor for the account of the Government; or

(3) Where personal property greater than $25,000 (not in paragraph (c)(1) or (c)(2) of this clause) is provided by the Government or acquired by the Contractor for the account of the Government. The personal property must be complete within itself; does not lose its identity or become a component part of other property when put into use; and is of a durable nature with an estimated useful life expectancy to exceed two years.

(d) The Contractor shall submit all annual and quarterly reports in the following format, except as stated in paragraph (e) of this clause:

(1) Property shall be grouped by the following property classifications:

(i) Highway motor vehicles;

(ii) Communications equipment;

(iii) Information technology (formerly called automated data processing) equipment;

(iv) Reproduction equipment;

(v) Security equipment;

(vi) Software;

(vii) Software-in-development;

(viii) Medical equipment;

(ix) Aircraft property; and

(x) Other depreciable personal property.

(2) Data elements for each unit of property shall include:

(i) Contract number: Federal Government contract or purchase order number;

(ii) Task Order number;

(iii) Property classification: From classification listed in paragraph (d)(1) of this clause;

(iv) Denotation as either government-furnished property (GFP) or contractor-acquired property (CAP);

(v) Noun name of property (i.e. generator);

(vi) Description of property;

(vii) Manufacturer;

(viii) Model;

(ix) Serial number;

(x) National Stock Number if applicable

(xi) Unique-item identifier or equivalent: such as barcode label (tag number) or system-assigned number. For highway motor vehicles, this must be the vehicle identification number (VIN);

(xii) Date received: Date contractor took possession;

(xiii) Date placed in service;

(xiv) Acquisition method:

(A) Contractor Acquired Property (CAP); or

(B) Government-furnished property (GFP); (If from another DOS contract, or government agency, please specify).

(xv) Acquisition cost (As defined in FAR clause 52.245-1(a)): Use estimated fair-market value for property transferred or donated, at the time acquired, if actual cost is unknown;

(xvi) Estimated useful life in years: The period during which the property is expected to provide the service for which it was intended. This should normally be equivalent to the depreciation schedule;

(xvii) Current location of the property: Country and city

(xviii) Disposal Date

(xix) Disposal Method

(e) The Contractor shall submit a full property report, as described in this clause, including affirmation, for the report covering the first quarter of the base contract. Thereafter, submission of reports shall follow the time frames outlined in paragraph (h) of this clause. Quarterly property reports, other than the annual report, may be either full property reports or only updates to the full property report. Quarterly reports do not require affirmations even when the Contractor chooses to submit a full property report. Affirmations are only required for the report covering the first quarter of the contract and the annual report for each subsequent option year of the contract. If the Contractor submits a full property report, dispositions subsequent to any previous report must also be identified in the report. If a Contractor submits a quarterly report in the form of an update, the update shall include acquisitions and dispositions.

(f) The Contractor shall provide any required affirmation in the following format. The affirmation shall be signed by the Contractor's managerial personnel (as defined in FAR clause 52.245-1):

“I hereby affirm that a physical inventory of the government property (as defined in Federal Acquisition Regulation (FAR) 45.101) of Department of State contract number (insert contract number) has been completed as of (insert date), the inventory has been reconciled to our records and the property information in our report, and that to the best of my knowledge and belief, this inventory is accurate, current, and complete.

Signed:

Printed:

Title:

Date:

(g) In addition to the information required above, the Contractor shall include in all property reports:

(1) The current degree to which properly qualified Government personnel have evaluated the Contractor's property management system as being an adequate property management system;

(2) The name, mailing address, telephone number, and email address of the qualified Government person(s) who performed the evaluation of the Contractor's property management system; and

(3) The cognizant contractor government property manager.

(h) Reports shall cover the following time periods and are due on the following dates:

Report	Period covered	Due date
1st Quarter Report	For 1st quarter ending December 31	January 15.
2nd Quarter Report (Annual Property Report)	For 2nd quarter ending March 31	April 30.
3rd Quarter Report	For 3rd quarter ending June 30	July 15.
4th Quarter Report	For 4th quarter ending September 30	October 8.

(i) The Contractor shall send a copy of all reports to the individuals listed below. The Contractor shall submit reports in electronic format as an attachment to an email. The affirmation described in paragraph (f) of this clause shall be in Adobe Acrobat (.pdf) format (including the signature), while the inventories, both quarterly and annual, shall be in Microsoft Excel format (Adobe Acrobat and Microsoft Excel versions shall be compatible with versions used by DOS). Send all reports to:

(1) The contracting officer;

(2) The Property Administrator;

(3) The contracting officer's representative (COR);

(4) [e-mail];

(5) [e-mail]; and

(6) All individuals listed below (if any):

(i) Contracting officer shall list individuals, if any.

(ii) [Reserved]

(j) The Contractor shall cooperate by responding timely to all follow up questions and requests for supporting documentation whether requested by the Department or external auditors.

(End of clause)

Dated: June 12, 2013.

Corey M. Rindner,

Procurement Executive, Department of State.