[Federal Register Volume 62, Number 173 (Monday, September 8, 1997)]
[Proposed Rules]
[Pages 47179-47182]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-23669]


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GENERAL SERVICES ADMINISTRATION

41 CFR Parts 101-1 and 101-46

RIN 3090-AG50


Replacement of Personal Property Pursuant to the Exchange/Sale 
Authority

AGENCY: Office of Governmentwide Policy, GSA.

ACTION: Proposed rule.

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SUMMARY: This proposed rule amends regulations issued by GSA for 
replacement of personal property pursuant to the exchange/sale 
authority. The exchange/sale authority permits executive agencies when 
acquiring replacement personal property, to exchange or sell similar 
items and apply the exchange allowance or proceeds of sale in whole or 
in part payment for the replacement property acquired. Changes have 
been made to incorporate plain English principles, streamline the 
narrative, define key terms, update organizational references, delete 
outdated regulatory references, delegate authority to executive 
agencies to approve deviations under certain conditions, and reduce 
restrictions and limitations on use of the authority.

DATES: Comments must be received on or before October 8, 1997.

ADDRESSES: Written comments should be sent to the Personal Property 
Management Policy Division (MTP), Office of Governmentwide Policy, 
General Services Administration, 1800 F St., NW., Washington, DC 20405.

FOR FURTHER INFORMATION CONTACT:
Martha Caswell, Director, Personal Property Management Policy Division 
(202-501-3828).

SUPPLEMENTARY INFORMATION:

    A. The General Services Administration (GSA) has determined that 
this rule is not a significant regulatory action for the purposes of 
Executive Order 12866 of September 30, 1993.

B. Regulatory Flexibility Act

    This rule is not required to be published in the Federal Register 
for public comment. Therefore, the Regulatory Flexibility Act does not 
apply.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because the proposed 
revisions do not impose recordkeeping or information collection 
requirements, or the collection of information from offerors, 
contractors, or members of the public which require the approval of OMB 
under 44 U.S.C. 501 et seq. This rule also is exempt from Congressional 
review prescribed under 5 U.S.C. 801 since it relates solely to agency 
management and personnel. This rule is written in a ``plain English'' 
style.

What is the ``plain English'' style of regulation writing?

    The ``plain English'' style of regulation writing is a new, simpler 
to read and understand, question and answer regulatory format.

How does the plain English style of regulation writing affect 
employees?

    A question and its answer combine to establish a rule. The employee 
and the agency must follow the language contained in both the question 
and its answer.

List of Subjects in 41 CFR Parts 101-1 and 101-46:

    Exchange/sale of government property, government property 
management.

    Therefore, it is proposed that 41 CFR Ch. 101 be amended set forth 
below:

PART 101-1--INTRODUCTION

    1. The authority citation for 41 CFR parts 101-1 and 101-46 
continues to read as follows:

    Authority: Sec. 205(c), 63 Stat. 390 (40 U.S.C. 486(c)).

    2. Section 101-1.110(a) is revised to read as follows:

[[Page 47180]]

Sec. 101-1.110  Deviations.

    (a) In the interest of establishing and maintaining uniformity to 
the greatest extent feasible, except as otherwise provided, deviations; 
i.e., the use of any policy or procedure in any manner that is 
inconsistent with the policy or procedure prescribed in the Federal 
Property Management Regulations, are prohibited unless such deviations 
have been requested from and approved by the Administrator of General 
Services or his authorized designee. Deviations may be authorized by 
the Administrator of General Services or his authorized designee when 
so doing will be in the best interest of the Government. Requests for 
deviations shall clearly state the nature of the deviation and the 
reasons for such special action.
* * * * *
    3. Part 101-46 is revised to read as follows:

PART 101-46--REPLACEMENT OF PERSONAL PROPERTY PURSUANT TO THE 
EXCHANGE/SALE AUTHORITY

Sec.
101-46.000  What is the purpose and scope of this part?
101-46.001  What are the definitions of some of the key terms used 
in this part?
101-46.001-1  Acquire.
101-46.001-2  Combat material.
101-46.001-3  Exchange.
101-46.001-4  Exchange/sale.
101-46.001-5  Executive agency.
101-46.001-6  Federal agency.
101-46.001-7  Historic item.
101-46.001-8  Replacement.
101-46.001-9  Similar.
101-46.002-How do you request deviations and who can approve them? .
101-46.002-1  Can you approve requests for deviations from this Part 
101-46? .
101-46.002-2  Does GSA approve requests for deviations from this 
Part 101-46?

Subpart 101-46.1--[Reserved]

Subpart 101-46.2--Authorization

101-46.200  How do you determine whether to do an exchange or sale?
101-46.201  When must you make a reimbursable transfer to another 
Federal agency when using the exchange/sale authority, to what other 
organizations may you make a reimbursable transfer, and what are the 
conditions for a reimbursable transfer?
101-46.202  What are the limitations on the exchange/sale of 
personal property?
101-46.203  What special authorizations have been made for use of 
the exchange/sale authority?

Subpart 101-46.3--Exchange and Sale Procedures

101-46.300  What are the exchange procedures?
101-46.301  What are the sales procedures?
101-46.302  What are the accounting requirements for the proceeds of 
sale?

    Authority: Sec. 205(c), 63 Stat. 390 (40 U.S.C. 486(c)).


Sec. 101-46.000  What is the purpose and scope of this part?

    This part prescribes regulations for use by you (an executive 
agency) when using the exchange/sale authority of section 201(c) of the 
Federal Property and Administrative Services Act of 1949, 63 Stat. 384, 
as amended (40 U.S.C. 481(c)). The regulations apply to all U.S. 
Government-owned personal property worldwide. For the exchange/sale of 
aircraft parts and hazardous materials, you must meet the requirements 
in this part and in parts 101-37 and 101-42 of this chapter, 
respectively.


Sec. 101-46.001  What are the definitions of some of the key terms used 
in this part?


Sec. 101-46.001-1  Acquire.

    Acquire means procure or otherwise obtain personal property, 
including by lease.


Sec. 101-46.001-2  Combat material.

    Combat material means arms, ammunition, and implements of war 
listed in the U.S. munitions list (22 CFR part 121).


Sec. 101-46.001-3  Exchange.

    Exchange means to replace a non-excess or non-surplus personal 
property item by trade or trade-in with the supplier of the replacement 
item when the allowance from the item being replaced is used to reduce 
or offset the cost of the replacement item. The supplier may be a 
Government agency, commercial or private organization, or an 
individual.


Sec. 101-46.001-4  Exchange/sale.

    Exchange/sale means to exchange or sell a non-excess or non-surplus 
personal property item and apply the exchange allowance or proceeds of 
sale in whole or in part payment for the acquisition of a similar item.


Sec. 101-46.001-5  Executive agency.

    Executive agency means any executive department or independent 
establishment in the executive branch of the Government, including any 
wholly owned Government corporation.


Sec. 101-46.001-6  Federal agency

    Federal agency means any executive agency or any establishment in 
the legislative or judicial branch of the Government (except the 
Senate, the House of Representatives, and the Architect of the Capitol 
and any activities under his direction).


Sec. 101-46.001-7  Historic item.

    Historic item means property having added value for display 
purposes because its historical significance is greater than its fair 
market value for continued use. Items that are commonly available and 
remain in use for their intended purpose, such as military aircraft 
still in use by active or reserve units, are not historic items.


Sec. 101-46.001-8  Replacement.

    Replacement means the process of acquiring property specifically to 
be used in place of property which is still needed but will no longer 
adequately perform all the tasks for which it is used.


Sec. 101-46.001-9  Similar.

    Similar means that the acquired item and replaced item:
    (a) Are identical; or
    (b) Are designed and constructed for the same specific purpose; or
    (c) Both constitute parts or containers for identical or similar 
end items; or
    (d) Both fall within a single Federal Supply Classification (FSC) 
group of property that is eligible for handling under the exchange/sale 
authority.


Sec. 101-46.002  How do you request deviations and who can approve 
them?

    General provisions for deviations from the Federal Property 
Management Regulations are found in Sec. 101-1.110 of this chapter. 
Provisions for deviations from the regulations in this part are 
presented in this section.


Sec. 101-46.002-1  Can you approve requests for deviations from this 
part 101-46?

    The head of an executive agency may approve deviations within the 
agency. This authority cannot be redelegated. Only onetime (individual) 
deviations may be approved by the head of an executive agency. GSA must 
approve any class deviations. The head of an executive agency may not 
approve deviations that would permit the exchange/sale of weapons. 
Also, neither the head of an executive agency nor GSA may approve 
deviations from regulatory provisions that are mandated by statute 
e.g., the requirement that the exchange/sale authority be used for 
replacement property only, and the requirement that property replaced 
and property acquired are similar. In the interest of maintaining 
uniformity, deviations shall be kept to a minimum and the head of an 
executive agency shall prescribe a formal procedure for the control of 
deviations within the agency and furnish a copy of the procedure to 
GSA. Also, a copy of each approved deviation shall be furnished to GSA 
upon its approval.

[[Page 47181]]

Sec. 101-46.002-2  Does GSA approve requests for deviations from this 
part 101-46?

    If you choose not to exercise the authority delegated to you by GSA 
in the preceding section, or if GSA approval of a deviation request is 
necessary, you may request GSA approval of deviations by submitting a 
complete written justification to the General Services Administration 
(GSA), Office of Governmentwide Policy, Office of Transportation and 
Personal Property (MT), Washington, DC 20405.

Subpart 101-46.1--[Reserved]

Subpart 101-46.2--Authorization


Sec. 101-46.200  How do you determine whether to do an exchange or 
sale?

    (a) When considering use of the exchange/sale authority, you must 
determine which of the two methods--exchange or sale--will provide the 
greater return for the Government. When estimating the return under 
each method, consider all administrative and overhead costs.
    (b) If the exchange allowance or estimated sales proceeds for an 
item of property would be unreasonably low, the property should not be 
processed under this part. Rather, you should process it according to 
the regulations in part 101-43 (Utilization of Personal Property) of 
subpart 101-45.9 (Abandonment or Destruction of Personal Property) of 
this subchapter as applicable.


Sec. 101-46.201  When must you make a reimbursable transfer to another 
Federal agency when using the exchange/sale authority, to what other 
organizations may you make a reimbursable transfer, and what are the 
conditions for a reimbursable transfer?

    (a) If you have property you want to replace which is eligible for 
exchange/sale, you should, to the maximum extent practicable, first 
solicit Federal agencies known to use or distribute such property and, 
if an agency wants it, arrange for a reimbursable transfer. Property 
that is eligible for replacement under replacement standards prescribed 
in subpart 101-25.4 of this chapter is not subject to this requirement.
    (b) You may make a reimbursable transfer to not only other Federal 
agencies, but also the Senate, the House of Representatives, the 
Architect of the Capitol and any activities under the Architect's 
direction, the District of Columbia, and mixed-ownership Government 
corporations.
    (c) When transferring property:
    (1) You must do so under terms mutually agreeable to you and the 
recipient; and
    (2) You must not require reimbursement of an amount greater than 
the estimated fair market value of the transferred property; and
    (3) You must apply the transfer proceeds in whole or part payment 
for property acquired to replace the transferred property.


Sec. 101-46.202  What are the limitations on the exchange/sale of 
personal property?

    This section describes: Types of property that are ineligible for 
exchange/sale; conditions that you must meet when conducting an 
exchange/sale transaction; and actions that are prohibited in an 
exchange/sale transaction;
    (a) What types of property are ineligible for exchange/sale?
    (1) You must not use the exchange/sale authority for the following 
FSC groups of personal property:

10  Weapons.
11  Nuclear ordnance.
12  Fire control equipment.
14  Guided missiles.
15  Aircraft and airframe structural components, except FSC class 
1560 Airframe Structural Components.
42  Firefighting, rescue, and safety equipment.
44  Nuclear reactors (FSC class 4472 only).
51  Hand tools.
54  Prefabricated structure and scaffolding.
68  Chemicals and chemical products, except medicinal chemicals.
71  Furniture.
84  Clothing, individual equipment, and insignia.

    (2) Also ineligible for exchange/sale are materials in the National 
Defense Stockpile (50 U.S.C. 98-98h) or the Defense Production Act 
inventory (50 U.S.C. App. 2093).
    (b) What conditions must be met when conducting an exchange/sale 
transaction? You may use the exchange/sale authority only if you meet 
all six of the following conditions:
    (1) The item exchanged or sold is similar to the item acquired; and
    (2) The item exchanged or sold is not excess or surplus, and the 
item acquired is needed for approved programs; and
    (3) The number of items acquired must equal the number of items 
replaced unless:
    (i) The item(s) acquired perform all or substantially all of the 
tasks for which the old item(s) would otherwise be used; or
    (ii) The item(s) sold or exchanged and the item(s) acquired meet 
the test for similarity specified at Sec. 101-46.001-9(iii) in that 
they are a part(s) or container(s) for identical or similar end items; 
and
    (4) The item exchanged or sold was acquired for official use and 
not for the principal purpose of exchange or sale; and
    (5) You make a written administrative determination at the time of 
exchange or sale (or at the time of acquisition if it precedes the 
sale) to apply the exchange allowance or sale proceeds to the 
acquisition of replacement property; and
    (6) You document that the above conditions have been met, a along 
with all other pertinent documentation, for any transactions under this 
part.
    (c) What actions are prohibited in an exchange/sale transaction?
    (1) Acquisition of personal property not otherwise authorized.
    (2) Acquisition of personal property in violation of:
    (i) Any restriction on procurement of a commodity or commodities; 
or
    (ii) Any replacement policy or standard prescribed by the 
President, the Congress, or the Administrator of General Services; or
    (iii) Any contractual obligation.
    (3) Transfer, exchange, or sale of Nuclear Regulatory Commission-
controlled materials unless you meet the requirements of Sec. 101-
42.1102-4 of this subchapter.
    (4) Exchange or sale of controlled substances, unless you meet the 
requirements of Sec. 101-42.1102-3 of this subchapter.
    (5) Transfer, exchange, or sale of scrap materials, except in the 
case of scrap gold for fine gold.
    (6) Exchange or sale of property which was originally acquired as 
excess or forfeited property or from another source other than new 
procurement, unless such property has been in official use by the 
acquiring agency for at least 1 year. You may exchange or sell 
forfeited property in official use for less than 1 year if the head of 
your agency certifies that a continuing valid requirement exists, but 
the specific item in use no longer meets that requirement, and that 
exchange or sale meets all other requirements of this part.
    (7) Exchange or sale of property that is dangerous to public health 
or safety without first rendering such property innocuous or providing 
for adequate safeguards as part of the exchange/sale.
    (8) Exchange or sale of combat material without first 
demilitarizing it in accordance with applicable regulations.
    (9) Exchange or sale of Flight Safety Critical Aircraft Parts 
unless you meet the provisions of Sec. 101-37.610 of this chapter.

[[Page 47182]]

Sec. 101-46.203  What special authorizations have been made for use of 
the exchange/sale authority?

    (a) You may exchange, without monetary appraisal or detailed 
listing or reporting, books and periodicals in your libraries not 
needed for permanent use for other books and periodicals.
    (b) In acquiring items for historical preservation or display at 
Federal museums, you may exchange historic items in the museum property 
account without regard to the FSC group or the requirement in Sec. 101-
46.202(b)(3), provided the exchange transaction is documented and 
certified by the head of your agency to be in the best interests of the 
Government and all other provisions of this part are met. The 
documentation must contain a determination that the item exchanged and 
the item acquired are historic items.

Subpart 101-46.3--Exchange and Sale Procedures


Sec. 101-46.300  What are the exchange procedures?

    (a) Most exchange transactions should occur when a vendor delivers 
a replacement item and removes the item being replaced. This is the 
most efficient and cost effective exchange procedure because the item 
being replaced may remain in use up to the time the replacement item is 
delivered, when it is immediately removed by the vendor, and storage, 
handling, and administrative costs are minimized.
    (b) You may internally reassign eligible items no longer needed by 
one organizational unit to another unit for exchange with the supplier 
of a replacement item. Physical movement of the reassigned item is not 
required unless specified by the contract.


Sec. 101-46.301  What are the sales procedures?

    (a) The methods of sale, terms and conditions of sale, and forms 
prescribed in Sec. 101-45.304 of this subchapter shall be used in the 
sale of property being replaced, except for the provisions of Sec. 101-
45.304-2(a) of this subchapter regarding negotiated sales. Section 
3709, Revised Statutes (41 U.S.C. 5), is applicable to such sales and 
specifies the following conditions under which property being replaced 
can be sold by negotiation:
    (1) The reasonable value involved in the contract does not exceed 
$500, or
    (2) Otherwise authorized by law.
    (b) Property eligible for exchange/sale may be sold by negotiation 
at fixed prices in accordance with the provisions of Sec. 101-45.304-
2(b) of this subchapter.


Sec. 101-46.302  What are the accounting requirements for the proceeds 
of the sale?

    Except as otherwise authorized by law, proceeds from sales of 
personal property disposed of under this part must be accounted for in 
accordance with the General Accounting Office Policy and Procedures 
Manual for Guidance of Federal Agencies, Title 7, Fiscal Procedures, 
Section 5.5D.

    Dated: September 2, 1997.
G. Martin Wagner,
Associate Administrator for Governmentwide Policy.
[FR Doc. 97-23669 Filed 9-5-97; 8:45 am]
BILLING CODE 6820-24-M