75444 Federal Register / Vol. 75, No. 232 / Friday, December 3, 2010 / Proposed Rules 

asked by some clients to prepare and file 

their individual income tax returns for 

compensation, but A expects that the number 

of people who do ask him to provide this 

service will be no more than seven in 2012. 

In fact, A actually prepares and files six 

paper Form 1040 (U.S. Individual Income 

Tax Return) returns in 2012. Due to a 

growing client base, and based upon his 

experience in 2012, A expects that the 

number of individual income tax returns he 

will prepare and file in 2013 will at least 

double, estimating he will prepare and file 12 

Form 1040 returns in 2013. A does not 

qualify as a specified tax return preparer for 

2012 because A reasonably expects to file 10 

or fewer (seven) in 2012. Consequently, A is 

not required to electronically file the 

individual income tax returns he prepares 

and files in 2012. He does not qualify as a 

specified tax return preparer for that year 

because A reasonably expects to file 10 or 

fewer returns (seven) in 2012. A’s 

expectation is reasonable based on his 

business projections, individual income tax 

return filing history, and staffing decisions. A 

is a specified tax return preparer in 2013, 

however, because based on those same 

factors A reasonably expects to file more than 

10 individual income tax returns (12) during 

that calendar year. A, therefore, must 

electronically file all individual income tax 

returns that A prepares and files in 2013 that 

are not otherwise excluded from the 

electronic filing requirement. 

Example 2. Same facts as in Example 1, 

except three of Tax Return Preparer A’s 

clients specifically chose to have A prepare 

their individual income tax returns in paper 

format in 2012 with the clients mailing their 

respective returns to the IRS. A expects that 

these three clients will similarly choose to 

have him prepare their returns in paper 

format in 2013, with the clients being 

responsible for mailing their returns to the 

IRS. A is not required to electronically file 

these three returns in 2013 because the 

taxpayers chose to file their returns in paper 

format, and A obtained a dated written 

statement from each of those taxpayers, 

indicating that they chose to file their returns 

in paper format. These three individual 

income tax returns are not counted in 

determining how many individual income 

tax returns A reasonably expects to file in 

2013. Because the total number of individual 

income tax returns A reasonably expects to 

file in 2013 (nine) does not exceed 10, A is 

not a specified tax return preparer for 

calendar year 2013, and A is not required to 

electronically file any individual income tax 

return that he prepares and files in 2013. 

Example 3. Tax Return Preparer B is a solo 

general practice attorney in a small county. 

Her practice includes the preparation of wills 

and assisting executors in administering 

estates. As part of her practice, B infrequently 

prepares and files Forms 1041 (U.S. Income 

Tax Return for Estates and Trusts) for 

executors. In the past three years, she 

prepared and filed an average of five Forms 

1041 each year and never exceeded more 

than seven Forms 1041 in any year. Based on 

B’s prior experience and her estimate for 

2012, made prior to the time she first files an 

individual income tax return in 2012, she 

reasonably expects to prepare and file no 

more than five Forms 1041 in 2012. Due to 

the unforeseen deaths of several of her clients 

in late 2011, B actually prepares and files 12 

Forms 1041 in 2012. B does not find out 

about these deaths until after she has already 

filed the first Form 1041 in 2012 for another 

client. B is not required to electronically file 

these returns in 2012. She does not qualify 

as a specified tax return preparer for calendar 

year 2012 because prior to the time she filed 

the first Form 1041 in 2012, she reasonably 

expected to file 10 or fewer individual 

income tax returns in 2012. 

Example 4. Same facts as Example 3, 

except, in addition to the five Forms 1041 

that she expects to prepare and file in 2012, 

Tax Return Preparer B also expects to prepare 

and file 10 paper Forms 1040 (U.S. 

Individual Income Tax Return) in 2012, 

based upon the requests that she has received 

from some of her clients. Because the total 

number of individual income tax returns B 

reasonably expects to file in 2012 (fifteen) 

exceeds 10, B is a specified tax return 

preparer for calendar year 2012, and B must 

electronically file all individual income tax 

returns that B prepares and files in 2012 that 

are not otherwise excluded from the 

electronic filing requirement. 

Example 5. Firm X consists of two tax 

return preparers, Tax Return Preparer C who 

owns Firm X, and Tax Return Preparer D 

who is employed by C in Firm X. Based upon 

the firm’s experience over the past three 

years, C and D reasonably expect to file nine 

and ten individual income tax returns for 

compensation, respectively, in 2012. Both C 

and D must electronically file the individual 

income tax returns that they prepare in 2012, 

unless the returns are otherwise excluded 

from the electronic filing requirement, 

because they are members of the same firm 

and the aggregated total of individual income 

tax returns that they reasonably expect to file 

in 2012 (nineteen), exceeds 10 individual 

income tax returns. 

(f) Additional guidance. The IRS may 

implement the requirements of this 

section through additional guidance, 

including by revenue procedures, 

notices, publications, forms and 

instructions, including those issued 

electronically. 

(g) Proposed effective/applicability 

dates. This section is proposed to be 

effective and applicable on January 1, 

2011. 

Steven T. Miller, 

Deputy Commissioner for Services and 

Enforcement. 

[FR Doc. 2010–30500 Filed 12–1–10; 4:15 pm] 

BILLING CODE 4830–01–P 

DEPARTMENT OF DEFENSE 

Defense Acquisition Regulations 

System 

48 CFR Parts 201, 245, and 252 

RIN Number 0750–AG38 

Defense Federal Acquisition 

Regulation Supplement; Government 

Property (DFARS Case 2009–D008) 

AGENCY: Defense Acquisition 

Regulations System, Department of 

Defense (DoD). 

ACTION: Proposed rule with request for 

comments. 

SUMMARY: DoD is proposing to amend 

the Defense Federal Acquisition 

Regulation Supplement (DFARS) to 

revise DFARS part 245, Government 

Property, to reflect the recent revisions 

to FAR part 45, Government Property. 

DATES: Comments on the proposed rule 

should be submitted in writing to the 

address shown below on or before 

February 1, 2011, to be considered in 

the formation of the final rule. 

ADDRESSES: Submit comments 

identified by DFARS Case 2009–D008, 

using any of the following methods: 

Æ Regulations.gov: http:// 

www.regulations.gov. 

Submit comments via the Internet. 

Follow the instructions provided at the 

‘‘Submit a Comment’’ screen. Please 

include ‘‘DFARS Case 2009–D008’’. 

Æ E-mail: dfars@osd.mil. Include 

DFARS Case 2009–D008 in the subject 

line of the message. 

Æ Fax: 703–602–0350. 

Æ Mail: Defense Acquisition 

Regulations System, Attn: Ms. Mary 

Overstreet, OUSD(AT&L) DPAP/DARS, 

Room 3B855, 3060 Defense Pentagon, 

Washington, DC 20301–3060. Please cite 

DFARS Case 2009–D008. 

Comments received generally will be 

posted without change, including any 

personal information provided. Please 

check http://www.regulations.gov 

approximately two to three days after 

electronic submission to verify 

posting—allow 30 days for posting of 

comments submitted by mail. 

FOR FURTHER INFORMATION CONTACT: Ms. 

Mary Overstreet, 703–602–0311. 

SUPPLEMENTARY INFORMATION: 

I. Background 

This rule proposes to update and 

reorganize DFARS subparts 245.6 and 

245.7 for consistency with FAR changes 

published at 72 FR 27364 on May 15, 

2007, that address management of 

Government property in the possession 

of contractors, as well as the related 


emcdonald on DSK2BSOYB1PROD with PROPOSALS-1
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DFARS changes published at 74 FR 

37645 on July 29, under DFARS Case 

2007–D020. Minor related changes are 

proposed in part 201 and subparts 245.1 

and 245.5. The rule also proposes to add 

a new property disposal clause at 

252.245–70XX, Reporting, Reutilization, 

and Disposal. The following table 

summarizes the proposed rule revisions. 

DFARS Citation Changes made by this rule 

201.670 ...................... Updated and relocated from 245.70. 

245.107–70 ................ Redesignated as 245.107 and added reference to DFARS clause 252.245–70XX. 

245.5 .......................... Added subpart to address support of Government property administration. 

245.570 ...................... Updated and relocated from 245.612. 

245.6 .......................... Renamed subpart as Reporting, Reutilization and Disposal. 

245.601 ...................... Deleted section and relocated updated definitions under DFARS clause 252.245–70XX. 

245.602 ...................... Added section to address reutilization of Government property. 

245.602–1 .................. Added subsection, updated, and relocated from 245.606–3 and 245.7201. 

245.602–3 .................. Added subsection, updated, and relocated from 245.608–1 and 245.608–2. 

245.602–70 ................ Added subsection to address plant clearance procedures. 

245.603 ...................... Deleted section heading. 

245.603–70 ................ Deleted subsection. 

245.603–71 ................ Deleted subsection. Updated and relocated requirements under DFARS clause 252.245–70XX. 

245.604 ...................... Updated and relocated policy under DFARS clause 252.245–70XX. Renamed section as ‘‘Disposal of surplus property’’ 

to conform to FAR. 

245.604–3 .................. Updated and relocated from 245.73. 

245.606 ...................... Deleted section. 

245.606–3 .................. Deleted subsection. Updated and relocated to 245.602–1. 

245.606–5 .................. Deleted subsection. Updated and relocated under DFARS clause 252.245–70XX. 

245.606–70 ................ Deleted subsection. 

245.607 ...................... Deleted section heading. 

245.607–1 .................. Deleted subsection. Updated and relocated subsection under DFARS clause 252.245–70XX. 

245.607–2 .................. Deleted subsection. 

245.607–70 ................ Deleted subsection. Updated and relocated subsection under DFARS clause 252.245–70XX. 

245.608 ...................... Deleted section heading. 

245.608–1 .................. Deleted subsection. Updated and relocated to 245.602–3. 

245.608–2 .................. Deleted subsection. Updated and relocated to 245.602–3. 

245.608–5 .................. Deleted subsection. 

245.608–7 .................. Deleted subsection. 

245.608–70 ................ Deleted subsection. 

245.608–71 ................ Deleted subsection. 

245.608–72 ................ Deleted subsection. 

245.609 ...................... Deleted section. 

245.610 ...................... Deleted section. Updated and relocated under DFARS clause 252.245–70XX. 

245.612 ...................... Deleted section. Updated and relocated in 245.570. 

245.613 ...................... Deleted section. 

245.70 ........................ Deleted subpart. Updated and relocated to 201.670. 

245.71 ........................ Deleted subpart. Updated and relocated to 245.70. 

245.72 ........................ Deleted subpart. Updated and relocated to 245.602–1 and DFARS Procedures, Guidance, and Information. 

245.73 ........................ Deleted subpart. Updated and relocated to 245.604–3. 

252.245–7000 ............ Added reference to 245.107. 

252.245–70XX ........... Added clause. 

II. Executive Order 12866 

This is not a significant regulatory 

action and, therefore, is not subject to 

review under section 6(b) of Executive 

Order 12866, Regulatory Planning and 

Review, dated September 30, 1993. This 

is not a major rule under 5 U.S.C. 804. 

III. Regulatory Flexibility Act 

DoD does not expect this proposed 

rule 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 proposed rule 

imposes no new requirements on small 

businesses. It makes no significant 

change to DoD policy regarding the 

management of Government property in 

the possession of contractors. Therefore, 

DoD has not performed an initial 

regulatory flexibility analysis. DoD 

invites comments from small businesses 

and other interested parties on the 

expected impact of this rule on small 

entities. 

DoD also will consider comments 

from small entities concerning the 

affected DFARS subparts in accordance 

with 5 U.S.C. 610. Such comments 

should be submitted separately and 

should cite DFARS Case 2009–D008. 

IV. Paperwork Reduction Act 

The information collection 

requirements of the Defense Federal 

Acquisition Regulation Supplement 

(DFARS) part 245, Government 

Property, related clauses in DFARS part 

252, and related forms in DFARS part 

253, have been approved by the Office 

of Management and Budget (OMB) 

under OMB Control Number 0704–0246. 

No new information collection 

requirements are imposed by this 

proposed rule. 

List of Subjects in 48 CFR Parts 201, 

245, and 252 

Government procurement. 

Ynette R. Shelkin, 

Editor, Defense Acquisition Regulations 

System. 

Therefore, DoD proposes to amend 48 

CFR parts 201, 245, and 252 as follows: 

1. The authority citation for 48 CFR 

parts 201, 245, and 252 continues to 

read as follows: 

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

chapter 1. 

PART 201—FEDERAL ACQUISITION 

REGULATIONS SYSTEM 

2. Add section 201.670 to read as 

follows: 


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201.670 Appointment of property 

administrators and plant clearance officers. 

(a) The head of a contracting activity 

shall appoint or terminate (in writing) 

property administrators and plant 

clearance officers. 

(b) In appointing qualified property 

administrators and plant clearance 

officers, the appointment authority shall 

consider experience, training, 

education, business acumen, judgment, 

character, and ethics. 

PART 245—GOVERNMENT PROPERTY 

245.107–70 [Redesignated as 245.107] 

3. Redesignate section 245.107–70 as 

245.107 and revise 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 252.245–70XX, 

Reporting, Reutilization and Disposal, 

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. 

4. Add subpart 245.5 to read as 

follows: 

Sec. 

Subpart 245.5—Support Government 

Property Administration 

245.570 Storage at the Government’s 

expense. 

All storage contracts or agreements 

shall be separately priced and shall 

include all costs associated with the 

storage. 

5. Revise subpart 245.6 to read as 

follows: 

Subpart 245.6—Reporting, 

Reutilization, and Disposal 

Sec. 

245.602 Reutilization of Government 

property. 

245.602–1 Inventory disposal schedules. 

245.602–3 Screening. 

245.602–70 Plant clearance procedures. 

245.604 Disposal of surplus property. 

245.604–3 Sale of surplus property. 

Subpart 245.6—Reporting, 

Reutilization, and Disposal 

245.602 Reutilization of Government 

property. 

245.602–1 Inventory disposal schedules. 

Plant clearance officers shall verify 

inventory schedules to determine the 

following: 

(1) Allocability. 

(i) Review contract requirements, 

delivery schedules, bills of material, and 

other pertinent documents to determine 

whether schedules include property 

that— 

(A) Is appropriate for use on the 

contract; or 

(B) Exceeds the quantity required for 

completion of the contract, but could be 

diverted to other commercial work or 

Government use. 

(ii) Review the contractor’s— 

(A) Recent purchases of similar 

material; 

(B) Plans for current and scheduled 

production; 

(C) Stock record entries; and 

(D) Bills of material for similar items. 

(2) Quantity. While a complete 

physical count of each item may not be 

required, take adequate measures to 

provide reasonable assurance that 

available inventory is in accordance 

with quantities listed on the inventory 

schedules. 

(3) Condition. Ensure the inventory 

condition matches that shown on the 

inventory schedules. 

245.602–3 Screening. 

Property will be screened DoD-wide, 

including the contracting agency, 

requiring agency and, as appropriate, 

the General Services Administration. 

The requiring agency shall have priority 

for retention of listed items. All required 

screening must be completed before any 

surplus contractor inventory sale can 

take place. The plant clearance officer 

shall arrange for inspection of property 

at the contractor’s plant if requested by 

a prospective transferee, in such a 

manner as to avoid interruption of the 

contractor’s operations. 

245.602–70 Plant clearance procedures. 

Follow the procedures at PGI 

245.602–70 for establishing and 

processing a plant clearance case. 

245.604 Disposal of surplus property. 

245.604–3 Sale of surplus property. 

Plant clearance officers shall use the 

following procedures for the sale of 

surplus property: 

(1) Informal bid procedures. The plant 

clearance officer may direct the 

contractor to issue informal invitations 

for bid (orally, telephonically, or by 

other informal media), provided— 

(i) Maximum practical competition is 

maintained; 

(ii) Sources solicited are recorded; 

and 

(iii) Informal bids are confirmed in 

writing. 

(2) Sale approval and award. 

(i) Evaluate bids to establish that the 

sale price is fair and reasonable, taking 

into consideration— 

(A) Knowledge or tests of the market; 

(B) Current published prices for the 

property; 

(C) The nature, condition, quantity, 

and location of the property; and 

(D) Past sale history for like or similar 

items. 

(ii) Approve award to the responsible 

bidder whose bid is most advantageous 

to the Government. The plant clearance 

officer shall not approve award to any 

bidder who is not eligible to enter into 

a contract with DoD due to inclusion on 

the Excluded Parties List System. If a 

compelling reason exists to award to a 

bidder on the excluded list, the plant 

clearance officer shall request approval 

from the contracting officer. 

(iii) Notify the contractor of the bidder 

to whom an award will be made within 

five working days from receipt of bids. 

(3) Noncompetitive sales. 

(i) Noncompetitive sales include 

purchases or retention at less than cost 

by the contractor. Noncompetitive sales 

may be made when— 

(A) The contracting department/ 

agency or the plant clearance officer 

determines that this method is essential 

to expeditious plant clearance; and 

(B) The Government’s interests are 

adequately protected. 

(ii) Noncompetitive sales shall be at 

fair and reasonable prices, not less than 

those reasonably expected under 

competitive sales. 

(iii) Conditions justifying noncompetitive sales are— 

(A) No acceptable bids are received 

under competitive sale; 

(B) Anticipated proceeds do not 

warrant competitive sale; 

(C) Specialized nature of the property 

would not create bidder interest; 

(D) Removal of the property would 

reduce its value or result in 

disproportionate handling expenses; or 

(E) Such action is essential to the 

Government’s interests. 

Subpart 245.70—[Removed] 

6. Subpart 245.70 is removed. 

7. Redesignate subpart 245.71 as 

245.70, and revise to read as follows: 

Subpart 245.70—Plant Clearance 

Forms 

Sec. 

245.7001 Forms. 

245.7001–1 Standard Form 97, Certificate of 

Release of a Motor Vehicle (Agency 

Record Copy). 

245.7001–2 DD Form 1149, Requisition and 

Invoice Shipping Document. 

245.7001–3 DD Form 1348–1, DoD Single 

Line Item Release/Receipt Document. 


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245.7001–4 DD Form 1640, Request for 

Plant Clearance. 

245.7001–5 DD Form 1641, Disposal 

Determination/Approval. 

245.7001–6 Defense Logistics Agency Form 

1822, End Use Certificate. 

Subpart 245.70—Plant Clearance 

Forms 

245.7001 Forms. 

Use the forms listed below in 

performance of plant clearance actions. 

245.7001–1 Standard Form 97, Certificate 

of Release of a Motor Vehicle (Agency 

Record Copy). 

Use for transfers, donations, and sales 

of motor vehicles. The contracting 

officer shall execute the SF 97 and 

furnish it to the purchaser. 

245.7001–2 DD Form 1149, Requisition 

and Invoice Shipping Document. 

Use for transfer and donation of 

contractor inventory. 

245.7001–3 DD Form 1348–1, DoD Single 

Line Item Release/Receip Document. 

Use when authorized by the plant 

clearance officer. 

245.7001–4 DD Form 1640, Request for 

Plant Clearance. 

Use to request plant clearance 

assistance or transfer plant clearance. 

245.7001–5 DD Form 1641, Disposal 

Determination/Approval. 

Use to record rationale for the 

following disposal determinations: 

(a) Downgrade useable property to 

scrap. 

(b) Abandonment or destruction. 

(c) Noncompetitive sale of surplus 

property. 

245.7001–6 Defense Logistics Agency 

Form 1822, End Use Certificate. 

Use when directed by the plant 

clearance officer. 

Subpart 245.72—[Removed] 

8. Subpart 245.72 is removed. 

Subpart 245.73—[Removed] 

9. Subpart 245.73 is removed. 

PART 252—SOLICITATION 

PROVISIONS AND CONTRACT 

CLAUSES 

10. Revise the introductory text of 

section 252.245–7000 to read as follows: 

252.245–7000 Government-Furnished 

Mapping, Charting, and Geodesy Property. 

As prescribed in 245.107(a), use the 

following clause: 

* * * * * 

11. Add section 252.245–70XX to read 

as follows: 

252.245–70XX Reporting, Reutilization and 

Disposal. 

As prescribed in 245.107(b), use the 

following clause: 

REPORTING, REUTILIZATION AND 

DISPOSAL (DATE) 

(a) Definitions. As used in this clause— 

(1) Commerce Control List Item (CCLI) 

means commodities and associated technical 

data (including software) subject to export 

controls by the Department of Commerce. (14 

CFR 772) 

(2) Demilitarization means the act of 

eliminating the functional capabilities and 

inherent military design features from DoD 

personal property. Methods and degree range 

from removal and destruction of critical 

features to total destruction by cutting, 

tearing, crushing, mangling, shredding, 

melting, burning, etc. 

(3) Munitions List Items (MLI) means 

commodities and associated technical data 

(including software) contained in the U.S. 

Munitions List (USML) that are subject to 

export controls by the Department of State. 

(22 CFR 121) 

(4) Scrap means property that has no value 

except for its basic material content. For 

purposes of demilitarization, scrap is defined 

as recyclable waste and discarded materials 

derived from items that have been rendered 

useless beyond repair, rehabilitation, or 

restoration such that the item’s original 

identity, utility, form, fit and function have 

been destroyed. Items can be classified as 

scrap if processed by cutting, tearing, 

crushing, mangling, shredding, or melting. 

Intact or recognizable MLI or CCLI 

components, and parts are not ‘‘scrap.’’ 

(5) Serviceable or usable property means 

property with potential for reutilization or 

sale ‘‘as is’’ or with minor repairs or 

alterations; in Federal Condition Codes: A1, 

A2, A4, A5, B1, and B4. 

(b) Inventory disposal schedules. 

(1) The Contractor shall complete SF 1428, 

Inventory Schedule B, within the Plant 

Clearance Automated Reutilization Screening 

System (PCARSS). Information on PCARSS 

can be obtained from the plant clearance 

officer and at http://www.dcma.mil/ITCSO/ 

CBT/PCARSS/index.cfm. Instructions for 

completing the form are provided on the 

reverse side of the form. 

(i) SF 1428 shall contain the following 

supply condition codes together with 

disposal codes 1 through 9, X, and S (e.g., 

A1, F7, SS): 

(A) A—New, used, repaired, or 

reconditioned property; serviceable and 

issuable to all customers without limitations 

or restrictions; includes material with 

remaining shelf life of more than six months. 

(B) B—New, used, repaired, or 

reconditioned property; serviceable and 

issuable or for its intended purpose but 

restricted from issue to specific units, 

activities, or geographical areas because of its 

limited usefulness or short service-life 

expectancy; includes material and remaining 

shelf life of three to six months. 

(C) F—Economically reparable property 

which requires repair, overhaul or 

reconditioning; includes reparable items 

which are radioactively contaminated. 

(D) H—Property which has been 

determined to be unserviceable and does not 

meet repair criteria. 

(E) S—Property that has no value except 

for its basic material content. 

(ii) The item description on the SF 1428 

shall contain the following: 

(A) The applicable Federal Supply Code 

(FSC) for all items, except items in scrap 

condition. 

(B) The manufacturer name for all aircraft 

components under Federal Supply Group 

(FSG) 16 or 17 and FSCs 2620, 2810, 2915, 

2925, 2935, 2945, 2995, 4920, 5821, 5826, 

5841, 6340, and 6615. 

(C) The manufacturer name, make, model 

number, model year and serial number for all 

aircraft under FSCs 1510 and 1520. 

(iii) If the schedules are acceptable, the 

plant clearance officer shall complete and 

send the Contractor a DD Form 1637, Notice 

of Acceptance of Inventory. 

(c) Proceeds from sales of surplus property. 

(1) Unless otherwise provided in the 

contract, the proceeds of any sale, purchase, 

or retention shall be— 

(i) Credited to the Government as part of 

the settlement agreement; 

(ii) Credited to the price or cost of the 

contract; 

(iii) Applied as otherwise directed by the 

Contracting Officer; or 

(iv) Forwarded to the plant clearance 

officer. 

(d) Contractor inventory in foreign 

countries. 

The Contracting Officer may allow the 

contractor to dispose of inventory in foreign 

countries provided that— 

(1) The proposed purchaser’s name is not 

on the list of Parties Excluded from 

Procurement Programs; 

(2) The sales contract or other document 

forbids exports by purchasers and 

subpurchasers to Communist areas (FAR 

25.702) or other prohibited destinations; and 

(3) Sale or other disposition of foreign 

inventory by the contractor, including sale to 

foreign governments, requires that the sales 

contract or other document transferring title 

include the following certificate: 

‘‘The Purchaser certifies that the property 

covered by this contract will be used in 

(name of country). In the event of resale or 

export by the Purchaser of any of the 

property acquired at a price in excess of U.S. 

$1,000 or equivalent in other currency at the 

official exchange rate, the Purchaser agrees to 

obtain the approval of (name and address of 

Contracting Officer).’’ 

(e) Restrictions on purchase or retention of 

contractor inventory. 

(1) Contractors may not knowingly sell the 

inventory to any person or that person’s 

agent, employee, or household member if 

that person— 

(i) Is a civilian employee of the DoD or the 

U.S. Coast Guard; 

(ii) Is a member of the armed forces of the 

United States, including the U.S. Coast 

Guard; or 

(iii) Has any functional or supervisory 

responsibilities for or within the Defense 

Reutilization and Marketing Program, or for 

the disposal of contractor inventory. 

(2) The Contractor may conduct internetbased sales, to include use of a third-party. 


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(f) Demilitarization. Demilitarization of 

contractor inventory may be required to 

prevent the property (both serviceable and 

unserviceable) from being used for its 

originally intended purpose, or prevent the 

release of inherent design information that 

could be used against the United States. The 

Contractor shall demilitarize contractor 

inventory possessing offensive or defense 

characteristics, and not required within DoD, 

in accordance with the terms and conditions 

of the contract and consistent with Defense 

Demilitarization Manual, DoD 4160.21–M–1, 

edition in effect as of the date of this 

contract. The plant clearance officer may 

authorize the purchaser to perform the 

demilitarization provided the property is not 

inherently dangerous to public health and 

safety. 

(g) Classified contractor inventory. The 

Contractor shall dispose of classified 

contractor inventory in accordance with 

applicable security guides and regulations or 

as directed by the contracting officer. 

(h) Inherently dangerous inventory. 

Contractor inventory dangerous to public 

health or safety shall not be donated or 

otherwise disposed of unless rendered 

innocuous or until adequate safeguards are 

provided. 

(i) Compliance with export control 

requirements. The Contractor is responsible 

for complying with export control laws and 

regulations. This includes ensuring necessary 

and appropriate reviews of potential surplus 

sales buyers of MLI and CCLI. 

(j) Disposal of scrap. 

(1) Contractor with an approved scrap 

procedure. 

(i) The Contractor shall submit for approval 

to the property administrator a procedure for 

the untability and management of scrap. The 

procedure shall, at a minimum, provide for 

the effective and efficient disposition of scrap 

so as to minimize costs and maximize sales 

proceeds; and contain the necessary internal 

controls for mitigating the improper release 

of non-scrap property. Government- and 

contractor-owned scrap may be commingled, 

with plant clearance officer concurrence, 

when determined to be effective and 

efficient. 

(ii) Once approved by the property 

administrator, the plant clearance officer may 

authorize routine disposal of scrap. 

(2) The property administrator may waive 

the requirement for an approved scrap 

procedure if the amount of scrap produced or 

to be produced is minimal and poses little 

risk. 

(3) Scrap warranty. 

(i) The Contractor shall require all buyers 

of scrap to sign a DD Form 1639, Scrap 

Warranty. 

(ii) The Contracting Officer may release the 

Contractor from the terms of the scrap 

warranty in return for consideration paid to 

the Government. The consideration will 

represent the difference between— 

(A) The sale price of the scrap; and 

(B) A fair and reasonable price for the 

material if it had been sold for purposes other 

than scrap. 

(iii) The Contractor shall pay the 

consideration to the Government and the 

Government may execute the release even 

though the contract containing the warranty 

was not made directly with the Government. 

(iv) If the scrap is resold to a second buyer, 

the first buyer shall obtain a scrap warranty 

from the second buyer. Upon receipt of the 

second buyer’s scrap warranty, the 

Government will release the first buyer from 

liability under the original warranty. 

(k) Disposal of contractor inventory for 

NATO cooperative projects. 

(1) North Atlantic Treaty Organization 

(NATO) cooperative project agreements may 

include disposal provisions of jointly 

acquired property without regard to any 

applicable disposal laws of the United States. 

(2) Disposal of such property includes 

transfer of U.S. interests in the property to 

one of the other governments participating in 

the agreements, or the sale of the property. 

(3) Payment for the transfer or sale of any 

U.S. interest shall be made in accordance 

with the terms of the project agreement. 

(l) Sale of surplus contractor inventory. 

(1) The Contractor or its employees shall 

submit their bids to the plant clearance 

officer prior to soliciting bids from other 

prospective bidders. 

(2) The Contractor shall solicit a sufficient 

number of bidders to obtain adequate 

competition and use formal invitations for 

bid, unless the plant clearance officer 

approves use of informal bid procedures. The 

Contractor shall include in its invitation for 

bids, the sales terms and conditions provided 

by the plant clearance officer. 

(3) The Contractor shall solicit bids at least 

15 calendar days before bid opening to allow 

adequate opportunity to inspect property and 

prepare bids. 

(4) For large sales, the Contractor may use 

summary lists of items offered as bid sheets 

with detailed descriptions attached. 

(5) In addition to mailing or delivering 

notice of the proposed sale to prospective 

bidders, the Contractor may (when the results 

are expected to justify the additional 

expense) display a notice of the proposed 

sale in appropriate public places, e.g., 

publish a sales notice in appropriate trade 

journals or magazines and local newspapers. 

(6) When the acquisition cost of the 

property to be sold at one time, in one place, 

is $250,000 or more, the Contractor shall 

send a notice of the proposed sale to 

FedBizOpps (http://www.fbo.gov). 

(7) The plant clearance officer or 

representative will witness the bid opening. 

Within two working days after bid opening, 

the Contractor will submit to the plant 

clearance officer, either electronically or 

manually, two copies of the bid abstract. 

(8) When demilitarization of property is 

required, whether on or off contractor or 

Government premises, the sales contract 

must include the following provisions: 

(i) Demilitarization. Item(s) ____ require 

demilitarization by the Purchaser. Insert item 

number(s) and specific demilitarization 

requirements for item(s) shown in Defense 

Demilitarization Manual, DoD 4160.21–M–1, 

edition in effect as of the date of this 

contract. 

(ii) Demilitarization on Government or 

non-Government premises. Property 

requiring demilitarization shall be 

demilitarized by the Purchaser under the 

supervision of qualified Department of 

Defense personnel. Property requiring 

demilitarization shall not be removed, and 

title shall not pass to the Purchaser, until 

demilitarization has been accomplished and 

verified by a Government representative. 

Demilitarization will be accomplished as 

specified in the contract. The Purchaser 

agrees to assume all costs incident to the 

demilitarization and to restore the working 

area to its present condition after removing 

the demilitarized property. 

(iii) Failure to demilitarize. If the Purchaser 

fails to demilitarize the property as specified 

in the contract, the Contractor may, upon 

giving ten days written notice from date of 

mailing to the Purchaser— 

(A) Repossess, demilitarize, and return the 

property to the Purchaser. The Purchaser 

hereby agrees to pay to the Contractor, prior 

to the return of the property, all costs 

incurred by the Contractor in repossessing, 

demilitarizing, and returning the property to 

the Purchaser. 

(B) Repossess, demilitarize, and resell the 

property, and charge the defaulting Purchaser 

with all excess costs incurred by the 

Contractor. The Contractor shall deduct these 

costs from the purchase price and refund the 

balance of the purchase price, if any, to the 

Purchaser. In the event the excess costs 

exceed the purchase price, the defaulting 

Purchaser hereby agrees to pay these excess 

costs to the Contractor. 

(C) Repossess and resell the property under 

similar terms and conditions. In the event 

this option is exercised, the Contractor shall 

charge the defaulting Purchaser with all 

excess costs incurred by the Contractor. The 

Contractor shall deduct these excess costs 

from the original purchase price and refund 

the balance of the purchase price, if any, to 

the defaulting Purchaser. Should the excess 

costs to the Contractor exceed the purchase 

price, the defaulting Purchaser hereby agrees 

to pay these excess costs to the Contractor. 

(End of clause) 

[FR Doc. 2010–30285 Filed 12–2–10; 8:45 am] 

BILLING CODE 5001–08–P 

DEPARTMENT OF TRANSPORTATION 

Federal Railroad Administration 

49 CFR Parts 209, 213, 214, 215, 217, 

218, 219, 220, 221, 222, 223, 224, 225, 

227, 228, 229, 230, 231, 232, 233, 234, 

235, 236, 238, 239, 240, and 241 

[Docket No. FRA–2006–25274, Notice No. 

3] 

RIN 2130–ZA00 

Revised Proposal for Revisions to the 

Schedules of Civil Penalties for a 

Violation of a Federal Railroad Safety 

Law or Federal Railroad Administration 

Safety Regulation or Order; Reopening 

and Extending the Comment Period 

AGENCY: Federal Railroad 

Administration (FRA), Department of 

Transportation (DOT). 


emcdonald on DSK2BSOYB1PROD with PROPOSALS-1