2010-32099. Defense Federal Acquisition Regulation Supplement; Reporting of Government-Furnished Property

AGENCY:

Defense Acquisition Regulations System; Department of Defense (DoD).

ACTION:

Proposed rule with request for comments.

SUMMARY:

DoD proposes to amend the Defense Federal Acquisition Regulation Supplement (DFARS) to revise and expand reporting requirements for Government-furnished property to include items uniquely and non-uniquely identified, and to clarify policy for contractor access to Government supply sources.

DATES:

Comments on the proposed rule should be submitted in writing to the address shown below on or before February 22, 2011, to be considered in the formation of the final rule.

ADDRESSES:

You may submit comments, identified by DFARS Case 2009-D043, using any of the following methods:

o Regulations.gov: http://www.regulations.gov.

Submit comments via the Federal eRulemaking portal by inputting “DFARS Case 2009-D043” under the heading “Enter keyword or ID” and selecting “Search.” Select the link “Submit a Comment” that corresponds with “DFARS Case 2009-D043.” Follow the instructions provided at the “Submit a Comment” screen. Please include your name, company name (if any), and “DFARS Case 2009-D043” on your attached document.

E-mail: [e-mail]. Include DFARS Case 2009-D043 in the subject line of the message.

Fax: [phone].

Mail: Defense Acquisition Regulations System, Attn: Ms. Mary Overstreet, OUSD(AT&L)DPAP/DARS, 3060 Defense Pentagon, Room 3B855, Washington, DC 20301-3060.

Comments received generally will be posted without change to http://www.regulations.gov,, including any personal information provided. To confirm receipt of your comment(s), please check http://www.regulations.gov approximately two to three days after submission to verify posting (except allow 30 days for posting of comments submitted by mail).

FOR FURTHER INFORMATION CONTACT:

Ms. Mary Overstreet, OUSD (AT&L) DPAP/DARS, 3060 Defense Pentagon, Room 3B855, Washington, DC 20301-3060. Telephone [phone]; facsimile 703-602-0350. Please cite DFARS Case 2009-D043.

SUPPLEMENTARY INFORMATION:

A. Background

Current DFARS policy requires contractors to report to the DoD Item Unique Identification (IUID) Registry property that is classified as equipment, special tooling, and special test equipment items valued at $5,000 or more, and items valued at less than $5,000 when required in accordance with contract terms and conditions. In lieu of these dollar thresholds, reporting requirements are being revised and expanded to require contractors to report Government-furnished property (GFP) with existing unique item identification to the DoD IUID Registry; and all GFP without an existing unique item identification shall be reported to the DoD GFP Hub.

The clause at 252.211-7007, Reporting of Government-Furnished Equipment in the DoD Item Unique Identification (IUID) Registry, is being renamed as “Reporting of Government-Furnished Property,” revised to expand definitions, and provide guidance on reporting of GFP to the DoD IUID Registry or the GFP Hub. This clause applies to commercial contracts that have GFP and reporting applicability, and is added to the list of solicitation provisions and contract clauses applicable to the acquisition of commercial items at 212.301.

Additionally, the clause at 252.251-7000 is revised to require electronic receipts of property obtained from a Government supply source.

B. Regulatory Flexibility Act

DoD has prepared an initial regulatory flexibility analysis consistent with 5 U.S.C. 603. A copy of the analysis may be obtained from the point of contact specified herein. The analysis is summarized as follows:

The objective of the rule is to improve the accountability and control of DoD assets. This rule proposes to amend the Defense Federal Acquisition Regulation Supplement to revise and expand reporting requirements for Government-furnished equipment to include GFP that is both uniquely and non-uniquely identified, and clarifies policy for contractor access to Government supply sources. The proposed clause requires contractors to identify and report Government-furnished property with existing unique item identification to the DoD IUID Registry; and all GFP without an existing unique item identification shall be reported to the DoD GFP Hub. At this time, DoD is unable to estimate the number of small entities to which this rule will apply. Therefore, DoD invites comments from small business concerns and other interested parties on the expected impact of this rule on small entities.

DoD will also consider comments from small entities concerning the existing regulations in subparts affected by this rule in accordance with 5 U.S.C. 610. Interested parties must submit such comments separately and should cite 5 U.S.C. 610 (DFARS Case 2009-D043) in correspondence.

C. Paperwork Reduction Act

The Paperwork Reduction Act (Pub. L. 96-511) applies because the 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 information collection requirements under this proposed rule were formerly approved by the Office of Management and Budget, under clearance number 0704-0246. The requirements of this proposed rule are expected to have only a marginal impact, and are not expected to change the overall burden hours approved under clearance number 0704-0246. The rule removes the mandatory $5,000 unit acquisition cost dollar threshold for reporting. This does not significantly impact items valued at less than $5,000 in unit acquisition cost as they were also previously required to be reported if they were serially managed, mission essential, sensitive, or controlled inventory. While the proposed rule adds reporting of Government-furnished material and reparables, this additional requirement is expected to be offset by removal of the $5,000 mandatory reporting threshold. Interested parties are invited to provide comments on the potential impact.

List of Subjects in 48 CFR Parts 211, 212, and 252

• Government procurement

Ynette R. Shelkin,

Editor, Defense Acquisition Regulations System.

Therefore, DoD proposes to amend 48 CFR parts 211, 212, and 252 as follows:

1. The authority citation for 48 CFR parts 211, 212, and 252, continues to read as follows:

Authority: 41 U.S.C. 421 and 48 CFR chapter 1.

PART 211—DESCRIBING AGENCY NEEDS

2. Amend section 211.274-2, by revising paragraph (b)(2)(ii) to read as follows:

211.274-2

Policy for unique item identification.

* * * * *

(b)(2)(ii) The DoD Unique Identification Policy Office must receive a copy of the determination and findings required by paragraph (b)(2)(i) of this subsection. Send the copy to DPAP/Program Development and Implementation, Deputy Director, 3060 Defense Pentagon, 3B855, Washington, DC 20301-3060; or by facsimile to 703-602-6047.

3. Revise section 211.274-4 to read as follows:

211.274-4

Policy for reporting of Government-furnished property.

(a) It is DoD policy that all Government-furnished property be recorded in the DoD Item Unique Identification (IUID) Registry or GFP Hub, as defined in the clause at 252.211-7007, Reporting of Government-Furnished Property, as follows:

(1) All property with an existing assigned Unique Item Identifier (UII) shall be reported to the DoD IUID Registry.

(2) All property without an existing assigned UII shall be reported to the GFP Hub.

(b) The following items are not required to be reported:

(1) Contractor-acquired property as defined in FAR part 45;

(2) Property under any statutory leasing authority;

(3) Property to which the Government has acquired a lien or title solely because of partial, advance, progress, or performance-based payments;

(4) Intellectual property or software; and

(5) Real property.

4. Revise section 211.274-6 to read as follows:

211.274-6

Contract clauses.

(a)(1) Use the clause at 252.211-7003, Item Identification and Valuation, in solicitations and contracts that—

(i) Require item identification or valuation, or both, in accordance with 211.274-2 and 211.274-3; or

(ii) Are cost-reimbursement contracts that may result in the acquisition of contractor-acquired property (see FAR 45.101).

(2) Complete paragraph (c)(1)(ii) of the clause with the contract line, subline, or exhibit line item number and description of any item(s) below $5,000 in unit acquisition cost for which DoD unique item identification or a DoD-recognized unique identification equivalent is required in accordance with 211.274-2(a)(2) or (3).

(3) Complete paragraph (c)(1)(iii) of the clause with the applicable attachment number, when DoD unique item identification or a DoD-recognized unique identification equivalent is required in accordance with 211.274-2(a)(4) for DoD serially managed subassemblies, components, or parts embedded within deliverable items.

(4) Use the clause with its Alternate I if—

(i) An exception in 211.274-2(b) applies; or

(ii) Items are to be delivered to the Government and none of the criteria for placing a unique item identification mark applies.

(b) Use the clause at 252.211-7007, Reporting of Government-Furnished Property, in solicitations and contracts that contain the clause at—

(1) FAR 52.245-1, Government Property; or

(2) FAR 52.245-2, Government Property Installation Operation Services.

(c) Use the clause at 252.211-7008, Use of Government-Assigned Serial Numbers, in solicitations and contracts that—

(1) Contain the clause at 252.211-7003, Item Identification and Valuation; and

(2) Require the contractor to mark major end items under the terms and conditions of the contract.

PART 212—ACQUISITION OF COMMERCIAL ITEMS

5. Revise section 212.301 to read as follows:

212.301

Solicitation provisions and contract clauses for the acquisition of commercial items.

(f) The following additional provisions and clauses apply to DoD solicitations and contracts for the acquisition of commercial items. If the offeror has completed the provisions listed in paragraph (f)(i) or (ii) of this section electronically as part of its annual representations and certifications at https://orca.bpn.gov,, the contracting officer may consider this information instead of requiring the offeror to complete these provisions for a particular solicitation.

(i) Use one of the following provisions as prescribed in part 225:

(A) 252.225-7000, Buy American Act—Balance of Payments Program Certificate.

(B) 252.225-7020, Trade Agreements Certificate.

(C) 252.225-7035, Buy American Act—Free Trade Agreements—Balance of Payments Program Certificate.

(ii) Use the provision at 252.212-7000, Offeror Representations and Certifications—Commercial Items, in all solicitations for commercial items exceeding the simplified acquisition threshold. If an exception to 10 U.S.C. 2410i applies to a solicitation exceeding the simplified acquisition threshold (see 225.7603), indicate on an addendum that “The certification in paragraph (b) of the provision at 252.212-7000 does not apply to this solicitation.”

(iii) Use the clause at 252.212-7001, Contract Terms and Conditions Required to Implement Statutes or Executive Orders Applicable to Defense Acquisitions of Commercial Items, in all solicitations and contracts for commercial items, completing paragraphs (a) and (b), as appropriate.

(iv) Provisions and clauses prescribed elsewhere in DFARS as follows:

(A) Use the provision at 252.209-7001, Disclosure of Ownership or Control by the Government of a Terrorist Country, as prescribed in 209.104-70(a).

(B) Use the clause at 252.211-7003, Item Identification and Valuation, as prescribed in 211.274-6.

(C) Use the clause at 252.211-7006, Radio Frequency Identification, as prescribed in 211.275-3.

(D) Use the clause at 252.211-7007, Reporting of Government-Furnished Property, as prescribed in DFARS 211.274-6.

(E) Use the provision at 252.225-7010, Commercial Derivative Military Article—Specialty Metals Compliance Certificate, as prescribed in 225.7003-5(b).

(F) Use the clause at 252.225-7040, Contractor Personnel Authorized to Accompany U.S. Armed Forces Deployed Outside the United States, as prescribed in 225.7402-4.

(G) Use the clause at 252.225-7043, Antiterrorism/Force Protection Policy for Defense Contractors Outside the United States, in solicitations and contracts that include the clause at 252.225-7040.

(H) Use the clause at 252.232-7009, Mandatory Payment by Governmentwide Commercial Purchase Card, as prescribed in 232.1110.

(I) Use the clause at 252.232-7010, Levies on Contract Payments, as prescribed in 232.7102.

(J) Use the clause at 252.232-7011, Payments in Support of Emergencies and Contingency Operations, as prescribed in 232.908.

(K) Use the clause at 252.246-7003, Notification of Potential Safety Issues, as prescribed in 246.371.

(L) Use the provision at 252.247-7026, Evaluation Preference for Use of Domestic Shipyards—Applicable to Acquisition of Carriage by Vessel for DoD Cargo in the Coastwise or Noncontiguous Trade, as prescribed in 247.574(e).

(M) Use the clause at 252.247-7027, Riding Gang Member Requirements, as prescribed in 247.574(f).

PART 252—SOLICITATION PROVISIONS AND CONTRACT CLAUSES

6. Revise section 252.211-7007 to read as follows:

252.211-7007

Reporting of Government-Furnished Property.

As prescribed in 211.274-6(b), use the following clause:

Reporting of Government-Furnished Property (Date)

(a) Definitions. As used in this clause—

Acquisition cost, for Government-furnished property, means the amount identified in the contract, or in the absence of such identification, the item's fair market value.

Commercial and Government entity (CAGE) code means—

(1) A code assigned by the Defense Logistics Information Service (DLIS) to identify a commercial or Government entity; or

(2) A code assigned by a member of the North Atlantic Treaty Organization that DLIS records and maintains in the CAGE master file. This type of code is known as an “NCAGE code.”

Government-furnished property (GFP) means property in the possession of, or directly acquired by, the Government and subsequently furnished to the contractor for performance of a contract, including performance by subcontractors and at prime contractor alternate locations. Government-furnished property includes reparables, e.g., spares and property furnished for repair, maintenance, overhaul, or modification; and Government-furnished material that is requisitioned from Government supply sources without reimbursement by the contractor.

GFP Hub means an automated data base for capturing records of Government-furnished property sent on a non-reimbursable basis to a contractor without a unique item identifier assigned.

Item means a single hardware article or a single unit formed by a grouping of subassemblies, components, or constituent parts.

IUID Registry means—

(1) The authoritative source of Government unit acquisition cost for items with unique item identifiers acquired after January 1, 2004, for unique item identifier pedigree data established at delivery, as defined by DFARS 252.211-7003;

(2) The master data source for Government-furnished property; and

(3) An authoritative source for establishing the full cost of end-item equipment.

National stock number (NSN) means a 13-digit stock number used to identify items of supply. It consists of a 4-digit Federal Supply Code and a 9-digit National Item Identification Number.

Nomenclature means—

(1) The combination of a Government-assigned type designation and an approved item name;

(2) Names assigned to kinds and groups of products; or

(3) Formal designations assigned to products by customer or supplier (such as model number, or model type, design differentiation, specific design series or configuration).

Part or identifying number (PIN) means the identifier assigned by the original design activity, or by the controlling nationally recognized standard, that uniquely identifies (relative to that design activity) a specific item.

Serial number means an assigned designation that provides a means of identifying a specific individual item.

Special test equipment means either single or multipurpose integrated test units engineered, designed, fabricated, or modified to accomplish special purpose testing in performing a contract. It consists of items or assemblies of equipment including foundations and similar improvements necessary for installing special test equipment, and standard or general purpose items or components that are interconnected and interdependent so as to become a new functional entity for special testing purposes. Special test equipment does not include material, special tooling, real property, or equipment items used for general testing purposes, or property that with relatively minor expense can be made suitable for general purpose use.

Special tooling means jigs, dies, fixtures, molds, patterns, taps, gauges, and all components of these items, including foundations and similar improvements necessary for installing special tooling, and which 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 to the performance of particular services. Special tooling does not include material, special test equipment, real property, equipment, machine tools, or similar capital items.

Supply condition code means a classification of materiel in terms of readiness for issue and use or to identify action underway to change the status of materiel.

Supply condition code A—serviceable means new, used, repaired, or reconditioned materiel which is serviceable and issuable to all customers without limitation or restriction; includes materiel with more than 6 months shelf life remaining.

Supply condition code F—unserviceable (repairable) means economically reparable materiel which requires repair, overhaul, or reconditioning; includes reparable items which are radioactively contaminated.

Supply condition code G—unserviceable (incomplete) means materiel requiring additional parts or components to complete the end item prior to issue.

Supply condition code H—unserviceable (beyond repair) means materiel which has been determined to be unserviceable and does not meet repair criteria; includes condemned items which are radioactively contaminated.

Supply condition code J—suspended (misidentified or misdirected to the facility) means materiel in stock which has been suspended from issue pending condition classification or analysis, where the true condition is not known.

Type designation means a combination of letters and numbers arranged in a specific sequence to provide a short significant method of identification.

Unique item identifier (UII) means a set of data elements permanently marked on an item that is globally unique and unambiguous and never changes, in order to provide traceability of the item throughout its total life cycle. The term includes a concatenated UII or a DoD recognized unique identification equivalent.

Unit of issue means the physical measurement of count or quantity (such as each, dozen, gallon, or kilogram) in which an item is procured, stored, and released.

(b) Requirement for reporting of Government-furnished property (GFP) to the DoD Item Unique Identification (IUID) Registry or GFP Hub. Except as provided in paragraph (c) of this clause, the contractor shall report to the DoD IUID Registry or the GFP Hub, as appropriate—

(1) All GFP with an existing Unique Item Identifier (UII) assigned shall be reported to the DoD IUID Registry.

(2) All GFP without an existing UII assigned shall be reported to the GFP Hub.

(c) Exceptions. Paragraph (b) of this clause does not apply to—

(1) Contractor-acquired property that has not been delivered to, and accepted by, the Government;

(2) Property under any statutory leasing authority;

(3) Property to which the Government has acquired a lien or title solely because of partial, advance, progress, or performance-based payments;

(4) Intellectual property or software; or

(5) Real property.

(d) When required by contract terms and conditions, the contractor shall assign a UII to each item of GFP, including those items previously reported to the GFP Hub. Upon UII assignment and reporting, the contractor shall debit the property record from the GFP Hub.

(e) Procedures for establishing UIIs. To permit reporting of virtual UIIs to the DoD IUID Registry, the Contractor's property management system shall enable the following data elements in addition to those required by paragraphs (f)(1)(iii)(A)(1) through (3), (5), (7), (8), and (10) of the Government Property clause of this contract (FAR 52.245-1):

(1) Parent UII.

(2) UII as required by FAR 52.245-1(f)(1)(iii)(A)(4).

(3) Received/sent (shipped) date as required by FAR 52.245-1(f)(1)(iii)(A)(9).

(4) Category code, if applicable (“ST” for special tooling, “STE” for special test equipment).

(5) Supply condition code (“A” for serviceable, “F” for unserviceable (repairable), “G” for unserviceable (incomplete), “H” for unserviceable (beyond repair), “J” suspended (misidentified or misdirected to the facility).

(6) Accountable contract number (as required by FAR 52.245-1(f)(1)(iii)(A)(6)).

(7) Commercial and Government Entity (CAGE) code on the accountable contract.

(8) Mark record.

(i) Bagged or tagged code (for items too small to individually tag or mark).

(ii) Contents (the type of information recorded on the item, e.g., item internal control number).

(iii) Effective date (date the mark is applied).

(iv) Added or removed code/flag.

(v) Marker code (designates which code is used in the marker identifier, e.g., D=CAGE, UN=DUNS, LD=DODAAC).

(vi) Marker identifier, e.g., Contractor's CAGE code or DUNS number.

(vii) Medium code; how the data is recorded, e.g., barcode, contact memory button.

(viii) Value, e.g., actual text or data string that is recorded in its human-readable form.

(ix) Set (used to group marks when multiple sets exist).

(f) Procedures for reporting of Government-furnished property to the IUID Registry or the GFP Hub. Except as provided in paragraph (c) of this clause—

(1) GFP with a UII assigned—The Contractor shall establish and report to the IUID Registry the information required by FAR clause 52.245-1, paragraphs (e) and (f)(1)(iii), in accordance with the data submission procedures at http://www.acq.osd.mil/​dpap/​pdi/​uid/​data_​submission_​information.html.

(2) GFP without a UII assigned—The Contractor shall submit the following information in accordance with the instructions at http://www.acq.osd.mil/​dpap/​pdi/​uid/​data_​submission_​information.html. Common data elements include the following:

(i) Description/nomenclature.

(ii) Type designation, if assigned.

(iii) NSN.

(iv) PIN.

(v) CAGE code of reporting contractor.

(vi) Supply condition code per paragraph (e)(5) of this clause.

(vii) Unit acquisition cost.

(viii) Contract number.

(ix) Quantity.

(x) Unit of issue.

(xi) Serial number, if assigned.

(g) Procedures for updating the DoD IUID Registry. The Contractor shall update the DoD IUID Registry at https://www.bpn.gov/​iuid for changes in status, mark, custody, condition code, or disposition of items—

(1) Delivered or shipped from the Contractor's plant, under Government instructions, except when shipment is to a subcontractor or other location of the Contractor;

(2) Consumed or expended, reasonably and properly, or otherwise accounted for, in the performance of the contract as determined by the Government property administrator, including reasonable inventory adjustments;

(3) Disposed of; or

(4) Transferred to a follow-on or other contract. (End of clause)

7. Amend section 252.251-7000 by removing “(NOV 2004)” and adding in its place “(XXX-XXXX)”, revising introductory paragraph (c), and revising paragraphs (d) through (f) to read as follows:

252.251-7000

Ordering From Government Supply Sources.

* * * * *

(c) When placing orders for Government stock [on a reimbursable basis], the Contractor shall—

* * *

(d) When placing orders for Government stock on a non-reimbursable basis, the Contractor shall—

(1) Comply with the requirements of the Contracting Officer's authorization.

(2) When using electronic transactions to submit requisitions on a non-reimbursable basis only, orders shall be placed by authorizing contract number using the Defense Logistics Management System (DLMS) Supplement to Federal Implementation Convention 511R, Requisition; and receipts shall be acknowledged by authorizing contract number using the DLMS Supplement 527R, Receipt, Inquiry, Response and Material Receipt Acknowledgement.

(e) Only the Contractor may request authorization for subcontractor use of Government supply sources. The Contracting Officer will not grant authorizations for subcontractor use without approval of the Contractor.

(f) Government invoices shall be submitted to the Contractor's billing address, and Contractor payments shall be sent to the Government remittance address specified below:

Contractor's Billing Address (include point of contact and telephone number):

Government Remittance Address (include point of contact and telephone number):

(End of clause)