[Federal Register Volume 62, Number 197 (Friday, October 10, 1997)]
[Notices]
[Pages 52969-52970]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-26997]


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COMMITTEE FOR PURCHASE FROM PEOPLE WHO ARE BLIND OR SEVERELY DISABLED


Procurement List; Additions

AGENCY: Committee for Purchase From People Who Are Blind or Severely 
Disabled.

ACTION: Additions to the Procurement List.

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SUMMARY: This action adds to the Procurement List commodities and a 
service to be furnished by nonprofit agencies employing persons who are 
blind or have other severe disabilities.

EFFECTIVE DATE: November 10, 1997.

ADDRESSES: Committee for Purchase From People Who Are Blind or Severely 
Disabled, Crystal Square 3, Suite 403, 1735 Jefferson Davis Highway, 
Arlington, Virginia 22202-3461.

FOR FURTHER INFORMATION CONTACT: Beverly Milkman (703) 603-7740.

SUPPLEMENTARY INFORMATION: On June 20, July 11, 18, August 22, 1997, 
the Committee for Purchase From People Who Are Blind or Severely 
Disabled published notices (62 FR 33585, 37191, 38518 and 44637) of 
proposed additions to the Procurement List.

The following comments pertain to Drain Plug Assembly (2590-00-299-
0739)

    Comments were received from the current contractor for the drain 
plug assembly, both through its counsel and through the office of a 
Member of Congress. The contractor indicated that addition of this item 
to the Procurement List would severely affect the company in that it 
would lose sales and have to close a production line, with the layoff 
of several workers. The contractor also stated that its subcontractors 
for plating, heat treating, and painting of components would be 
affected.
    The contractor claimed that the addition would eliminate at least 
one proven supplier of the drain plug assemblies, as the company could 
not afford to maintain an idle production line and would not be able to 
retool fast enough to meet emergency requirements. The contractor 
questioned the nonprofit agency's capability to meet emergency 
requirements and its ability to produce the assembly at a price 
comparable to that currently offered by the contractor, claiming that 
the addition will greatly increase the Government's cost to obtain the 
item. The contractor also indicated that addition of the item to the 
Procurement List was inconsistent with Government policies to increase 
contracting with small businesses.
    The contractor indicated that the drain plug assembly represented a 
very small percentage of its Government sales, and thus an even smaller 
percentage of its total sales. These percentages are well below the 
level the Committee normally considers to constitute severe adverse 
impact on a contractor. In addition, we have been informed that demand 
for the assembly has been sharply reduced, so sales of the item will 
represent an even smaller amount in the future.
    The nonprofit agency will be assembling the components of the drain 
plug assembly, so the contractor will have the opportunity to provide 
these components as a subcontractor and may not have to shut its 
production line, lay off workers, and remove itself from the ranks of 
potential suppliers of the drain plug assembly. Committee regulations 
encourage nonprofit agencies to subcontract with small businesses such 
as the commenting contractor.
    Although the contractor indicated that its subcontractors would be 
providing information to the Committee on how the addition would affect 
them, we have received no such information. It would thus appear that 
any impact on these subcontractors is not severe.
    Assessments of Government contractor capability normally include 
capability to meet emergency requirements that are in excess of normal 
demands. Nonprofit agencies participating in the Committee's Javits-
Wagner-O'Day (JWOD) Program are held to the same capability standards 
as other Government contractors. In this case, the Government 
contracting activity which buys the drain plug assembly declined an 
opportunity to conduct a

[[Page 52970]]

capability inspection of the nonprofit agency, stating that it 
considered the nonprofit agency capable of producing the item. The 
Committee found the nonprofit agency capable based on the contracting 
activity's conclusion and an assessment by industrial engineers for the 
central nonprofit agency representing this nonprofit agency.
    The Committee is required to set a fair market price for 
commodities, such as the drain plug assembly, which it adds to the 
Procurement List. The price, which is set through application of the 
Committee's Fair Market Pricing Policy, reflects the market for the 
item in question. This pricing mechanism ensures that the Government 
does not pay an unreasonable price for an item added to the Procurement 
List. In this case, the price was negotiated with the contracting 
activity, which believes the price is a fair one. Moreover, the 
negotiated price is only slightly above the contractor's current price, 
and below the recent contract price the contractor quoted in its 
comments. It is well below the high bid price the contractor also 
quoted.
    The Committee does not believe that its addition of the drain plug 
assembly to the Procurement List is inconsistent with Government policy 
on increasing small business contracting. Like the Government's small 
business contracting programs, the JWOD Program is intended to increase 
Government contracting for its constituency. However, the JWOD Program 
is only a tiny fraction of the size of the Government's small business 
contracting programs. Consequently, the addition of the drain plug 
assembly to the Procurement List, though regrettable from the 
contractor's viewpoint, does not impair the Government's larger policy 
objectives for small business contracting as a whole.

The following comments pertain to File, Folder (7530-00-990-8884)

    Comments were received in response to sales data requests sent to 
two companies, the current contractor for the file folder at the Ft. 
Worth depot and a company which supplies the folder to another 
Government depot. Both contractors claimed that this Procurement List 
addition would have a severe adverse impact on them. The current 
contractor for the Ft. Worth depot also indicated that it was 
continuing to be affected by earlier additions to the Procurement List, 
which had taken away business faster than the company could adapt to 
the losses, and submitted financial data to support contentions about 
its current profitability.
    The Committee decided to reduce the supply requirement being added 
to the Procurement List to 50 percent of the needs of the Ft. Worth 
depot to reduce the impact on contractors. At this level, the impact of 
the addition on the current contractor is below the level which the 
Committee normally considers to be severe adverse impact, even when any 
effects of previous additions and the contractor's current 
profitability are taken into account. The earlier impacts occurred in 
1979 and 1995. The Committee notes that the current contractor's sales 
have risen significantly since those impacts occurred, so the Committee 
does not agree with the current contractor's contention that it has 
been unable to adapt to the losses it suffered.
    The other contractor is not currently providing the folder to the 
Ft. Worth depot, so its objection is only to losing the opportunity to 
supply the folder in the future. The Committee does not consider this 
loss of a mere expectancy of a Government contract, by itself, to 
constitute severe adverse impact. In this case, because the Committee 
is leaving 50 percent of the Ft. Worth depot's supply requirement on 
the competitive market, the contractor will continue to have a chance 
to supply the requirement.

The following comments pertain to Bag, T-Shirt & Bag, Produce, Star 
Bottom (8105)

    Comments were received from a current contractor for the bags. The 
contractor indicated that patents for the bags are controlled by two 
large oil companies which readily take action against any infringement 
of the patents. The contractor suggested that the patent requirements 
for the bags be researched before the nonprofit agency makes the bags.
    Patent counsel for the nonprofit agency has researched the patents, 
and has advised the nonprofit agency and the Committee that the 
nonprofit agency's method of making the bags will not infringe the 
patents in question. Consequently, the Committee has concluded that the 
patents are not an obstacle to addition of the bags to the Procurement 
List.
    After consideration of the material presented to it concerning 
capability of qualified nonprofit agencies to provide the commodities 
and service and impact of the additions on the current or most recent 
contractors, the Committee has determined that the commodities and 
service listed below are suitable for procurement by the Federal 
Government under 41 U.S.C. 46-48c and 41 CFR 51-2.4.
    I certify that the following action will not have a significant 
impact on a substantial number of small entities. The major factors 
considered for this certification were:
    1. The action will not result in any additional reporting, 
recordkeeping or other compliance requirements for small entities other 
than the small organizations that will furnish the commodities and 
service to the Government.
    2. The action will not have a severe economic impact on current 
contractors for the commodities and service.
    3. The action will result in authorizing small entities to furnish 
the commodities and service to the Government.
    4. There are no known regulatory alternatives which would 
accomplish the objectives of the Javits-Wagner-O'Day Act (41 U.S.C. 46-
48c) in connection with the commodities and service proposed for 
addition to the Procurement List.
    Accordingly, the following commodities and service are hereby added 
to the Procurement List:

Commodities

Plug Assembly, Drain
    2590-00-299-0739
Folder, File, Pressboard
    7530-00-990-8884
    (50% of the requirements for the GSA Fort Worth, TX depot)
Bag, T-Shirt Style
    8105-00-NIB-1023
    (Requirements for DeCA Regions Midwest, Northwest, Southwest, 
Alaska & Hawaii)
Bag, Produce, Star Bottom
    8105-00-NIB-1046
    (Requirements for DeCA Regions Midwest, Northwest, Southwest, 
Alaska & Hawaii)

Service

Janitorial/Custodial
    West Los Angeles USARC, Los Angeles, California

    This action does not affect current contracts awarded prior to the 
effective date of this addition or options that may be exercised under 
those contracts.
Beverly L. Milkman,
Executive Director.
[FR Doc. 97-26997 Filed 10-9-97; 8:45 am]
BILLING CODE 6353-01-P