Federal Register / Vol. 62, No. 244 / Friday, December 19, 1997 / Rules and Regulations 66527

to determine that consideration, as well

as the schedule for payment of

consideration must be agreed upon in

writing before transfer under this

authority.

Dated: December 15, 1997.

L.M. Bynum,

Alternate OSD Federal Register Liaison

Officer, Department of Defense.

[FR Doc. 97–33109 Filed 12–18–97; 8:45 am]

BILLING CODE 5000–04–M

COMMITTEE FOR PURCHASE FROM

PEOPLE WHO ARE BLIND OR

SEVERELY DISABLED

41 CFR Parts 51–2, 51–4, and 51–6

Miscellaneous Amendments to

Committee Regulations

AGENCY: Committee for Purchase From

People Who Are Blind or Severely

Disabled.

ACTION: Final rule.

SUMMARY: The Committee is changing

five sections of its regulations to clarify

them and improve the efficiency of

operation of the Committee’s JavitsWagner-O’Day (JWOD) Program. The

changes are necessary to clarify and

expand earlier regulation changes and to

eliminate unnecessary regulatory

language.

EFFECTIVE DATE: January 20, 1998.

ADDRESSES: Committee for Purchase

From People Who Are Blind or Severely

Disabled, Crystal Gateway 3, Suite 310,

1215 Jefferson Davis Highway,

Arlington, Virginia 22202–4302.

FOR FURTHER INFORMATION CONTACT: G.

John Heyer (703) 603–0665. Copies of

this notice will be made available on

request in computer diskette format.

SUPPLEMENTARY INFORMATION: The

Committee is amending § 51–2.4 of its

regulations to clarify further that its

authorizing statute, the JWOD Act, 41

U.S.C. 46—48c, treats addition of

commodities and services to the

Procurement List and the establishment

by the Committee of a fair market price

as two separate functions and applies

the requirement for notice and comment

rulemaking only to the addition

function. This area was first addressed

in 1994 (59 FR 59338, Nov. 16, 1994)

with the removal of fair market price

from the list of suitability criteria for

Procurement List additions, in

accordance with a 1992 court decision,

McGregor Printing Corporation v. Kemp,

802 F. Supp. 519, 527 (D.D.C), rev’d on

other grounds, 20 F.3d 1188 (D.C. Cir.

1994). The amendment states that the

Committee does not consider comments

on proposed fair market prices for

commodities and services proposed for

addition to the Procurement List to be

pertinent to a suitability determination.

Accordingly, they will not be addressed

when the Committee makes an addition

decision. This amendment will not

affect the ability of Government and

other appropriate parties to comment on

proposed fair market prices and price

changes in connection with the

Committee’s fair market pricing process.

The Committee is also removing

paragraph 51–2.4(a)(4)(C) of its

regulations to eliminate one of two

essentially redundant statements in

§ 51–2.4 to the effect that the Committee

considers pertinent comments when

making its addition decisions.

The Committee also amended

paragraphs (b)(6) and (c)(1) of § 51–4.3

of its regulations in 1994 (59 FR 59343)

to allow the acceptance of State

certifications of blindness or other

severe disabilities as documentation of

disability, in addition to reports by

individual health professionals. Many of

these certifications, however, are done

by health professionals at local

governmental bodies, such as public

schools. The new amendment to this

section will allow acceptance of these

certifications.

Paragraph (c) of § 51–4.4 of the

Committee’s regulations permits

nonprofit agencies participating in the

JWOD Program to subcontract a portion

of the process for providing a

commodity on the Procurement List.

The amendment will extend this

permission to services on the

Procurement List, and would specify

how the Committee will oversee routine

subcontracting of a part of the

production process.

Paragraph (c) of § 51–6.12 of the

Committee’s regulations requires

Government contracting activities to

provide a 90-day notice when changing

the scope of work of a service on the

Procurement List. The amendment will

make it clear that this notice

requirement also applies to situations

where the contracting activity converts

a service to performance by Government

personnel.

Prior to the 1991 revision of the

Committee’s regulations (56 FR 48974,

Sept. 26, 1991), the matters contained in

current parts 51–5 and 51–6 were in a

single part 51–5, which had a disputes

provision applicable to the entire part of

the Committee’s regulations. The

amendment clarifies the disputes

provision, § 51–6.14, to state its

applicability to both parts 51–5 and 51–

6.

Public Comments on the Proposed Rule

The Committee published the

proposed rule in the Federal Register of

September 26, 1997 (62 FR 50547). One

comment was received, from counsel for

a manufacturer which is objecting to a

recently proposed addition to the

Procurement List. The comment

addressed only the proposed changes to

41 CFR 51–2.4, which contains the

Committee’s criteria for making

additions to the Procurement List. No

comments were received on the other

proposed regulatory changes announced

by the Committee at that time.

As noted above, the changes to 41

CFR 51–2.4 were intended to emphasize

the Committee’s conclusion that its

authorizing statute treats the

Committee’s addition of commodities

and services to the Procurement List

and its establishment of fair market

prices for these commodities and

services as two separate Committee

functions. The statutory requirement for

notice and comment rulemaking, in the

Committee’s view, applies only to the

first of these functions.

The commenter challenged the

Committee’s conclusion that the holding

cited from the 1992 McGregor decision

in support of the Committee’s view was

not reversed by the 1994 appeals court

decision. While unable to point to

specific language in the later decision

reversing the lower court’s holding, the

commenter indicated that the holding

was reversed ‘‘by implication’’ because

the later decision discussed the

Committee’s shortcomings on its fair

market price determination in the

rulemaking at issue. If the appeals court

did not intend to reverse the lower

court’s holding, the commenter argued,

this discussion would be a mere waste

of space in the appeals court’s opinion.

The McGregor appellate decision set

aside the Committee’s rulemaking, and

reversed the lower court, because the

appellate court concluded that the

Committee’s rulemaking record did not

support the Committee’s conclusions

and the Committee did not adequately

explain the basis for its conclusions.

The regulation stating the Committee’s

criteria for Procurement List additions

which was in effect when the contested

rulemaking took place included fair

market price among the criteria.

Accordingly, the discussion cited by the

commenter from the appellate court

opinion noted the shortcomings in the

Committee’s administrative record and

Federal Register notice which pertained

to the Committee’s explanation of its

rationale for deciding that the pricing

criterion had been met, as a part of its

longer discussion of the Committee’s
66528 Federal Register / Vol. 62, No. 244 / Friday, December 19, 1997 / Rules and Regulations

shortcomings in documenting and

explaining its conclusions on all the

addition criteria. Because the regulation

made fair market price an addition

criterion, and thus subject to the

rulemaking requirement, the appellate

court did not have to address the lower

court’s holding that pricing

determinations are reserved to the

Committee alone because the JWOD Act

makes price determinations a separate

function from additions to the

Procurement List.

The Committee’s 1994 regulatory

change (59 FR 59338, Nov. 16, 1994)

removed fair market price from the

addition criteria to restore the

separation of functions established by

the JWOD Act. The current revisions to

41 CFR 51–2.4 merely make the

separation clearer, in light of subsequent

failures by commenting parties, notably

this commenter, to see the distinction.

The Committee does not believe that the

current revision to this regulation, and

the 1994 revision, which the commenter

also challenged, are legally improper, as

the commenter claimed.

The commenter also objected to the

Committee’s reliance on the lower court

opinion in McGregor on the grounds

that the McGregor decisions did not

address a situation in which a

commenter made specific allegations

about information supporting proposed

prices submitted for Committee

consideration by central nonprofit

agencies. Because McGregor did not

address this situation, the commenter

claims that it cannot be used as a basis

for excluding comments on a proposed

addition merely because they concern

pricing issues.

The Committee does not believe that

the commenter’s claim on this point is

relevant to the Committee’s legal

authority to revise 41 CFR 51–2.4 as it

did in 1994 and is doing now. As noted

below, the Committee does not intend to

ignore significant comments on its fair

market prices. It will consider them in

connection with the process for

establishing a fair market price, not in

connection with the rulemaking process

required for a Procurement List

addition.

The commenter also advanced several

legal and policy arguments for his

position that comments on a fair market

price must be addressed in connection

with a Procurement List addition. The

commenter claimed that a fair market

price is set before the corresponding

addition decision is made, so if the

price is incorrect, the addition would be

legally defective unless the price is

corrected. The commenter also claimed

that a correct fair market price is the

only restraint on addition to the

Procurement List of commodities and

services on which little direct labor is

performed by people with severe

disabilities, and that it would do no

good for a commenter to question a fair

market price after the decision is made,

because the Government would contract

for the commodity or service and the

price could not be corrected. The

commenter indicated that resolving

these price questions at the time of

addition would not be unduly

burdensome for the Committee staff.

The Committee does not agree with

the commenter’s contention that a fair

market price is established before a

commodity or service is added to the

Procurement List. While a proposed fair

market price is calculated in accordance

with the Committee’s pricing policies,

and the nonprofit agency agrees to

produce at that price, before the

proposal is sent to the Committee for an

addition decision, the Committee must

make the actual pricing decision once it

has made its addition decision. The

Committee may exercise its discretion to

reject the proposed price and set

another which falls within its pricing

guidelines. The addition decision

function, including the rulemaking

requirement, precedes the pricing

function in the JWOD Act, and the

Committee’s decision format was

revised in 1994 to be consistent with the

statute.

The Committee also disagrees with

the commenter’s contention that a fair

market price ensures that sufficient

qualifying direct labor is being

performed by the nonprofit agency.

Direct labor was a separate addition

criterion from fair market price before

the 1994 regulatory revision, and the

two had to be independently satisfied

before a commodity or service could be

added to the Procurement List. Direct

labor remains an addition criterion

since the removal of fair market price

from the criteria list.

The commenter’s contention that fair

market price cannot be changed after a

Procurement List addition is made is

not consistent with either the

Committee’s pricing policy or its

practice in the pricing area. The

Committee has a long history of making

price changes as appropriate, including

changes made as a result of informed

comments. The very document in which

the commenter made his comments on

this rulemaking also contains

information submitted to demonstrate to

the Committee that some of its prices

are not correct, and this document

supplements earlier and more detailed

information on that same subject which

the Committee staff is analyzing with a

view toward correcting the prices at

issue if appropriate.

The burden on the Committee staff of

reviewing comments on prices as part of

an addition would not greatly exceed

the burden of considering them as part

of the pricing process. The Committee

believes, however, that it would not be

appropriate to burden the addition

process with a matter more logically

belonging to the pricing process. As

indicated above, there is now no

statutory or regulatory requirement to

confuse these two processes as the

commenter would have the Committee

do.

Finally, the commenter claimed that

the Committee must allow comments on

fair market price ‘‘at some point in the

process.’’ That point is the pricing

process, which includes both the

establishment of an initial fair market

price and changes in the price. As

indicated above, the Committee will

entertain significant comments on

specific prices from affected parties in

connection with that process. The

Committee will not, however, allow

commenters to use the addition process

to raise issues not covered by the

addition criteria, or to delay the

addition process with larger policy

questions such as the nature of a fair

market price, as has occurred in the

past.

Regulatory Flexibility Act

I certify that this revision of the

Committee regulations will not have a

significant economic impact on a

substantial number of small entities

because the revision clarifies program

policies and does not essentially change

the impact of the regulations on small

entities.

Paperwork Reduction Act

The Paperwork Reduction Act does

not apply to this rule because it contains

no new information collection or

recordkeeping requirements as defined

in that Act and its regulations.

Executive Order No. 12866

The Committee has been exempted

from the regulatory review requirements

of the Executive Order by the Office of

Information and Regulatory Affairs.

Additionally, the rule is not a

significant regulatory action as defined

in the Executive Order.

List of Subjects

41 CFR Part 51–2

Organization and functions

(Government agencies).
Federal Register / Vol. 62, No. 244 / Friday, December 19, 1997 / Rules and Regulations 66529

41 CFR Part 51–4

Reporting and recordkeeping

requirements.

41 CFR Part 51–6

Government procurement,

Handicapped.

For the reasons set out in the

preamble, Parts 51–2, 51–4, and 51–6 of

Title 41, Chapter 51 of the Code of

Federal Regulations are amended as

follows:

1. The authority citation for Parts 51–

2, 51–4, and 51–6 continues to read as

follows:

Authority: 41 U.S.C. 46–48c.

PART 51–2—COMMITTEE FOR

PURCHASE FROM PEOPLE WHO ARE

BLIND OR SEVERELY DISABLED

2. Section 51–2.4 is amended by

removing paragraph (a)(4)(C) and adding

a sentence to paragraph (b), to read as

follows:

§ 51–2.4 Determination of suitability.

* * * * *

(b) * * * Because the Committee’s

authority to establish fair market prices

is separate from its authority to

determine the suitability of a

commodity or service for addition to the

Procurement List, the Committee does

not consider comments on proposed fair

market prices for commodities and

services proposed for addition to the

Procurement List to be pertinent to a

suitability determination.

PART 51–4—NONPROFIT AGENCIES

3. Section 51–4.3 is amended by

revising paragraphs (b)(6) and (c)(1), to

read as follows:

§ 51–4.3 Maintaining qualification.

* * * * *

(b) * * *

(6) Maintain a file for each blind

individual performing direct labor

which contains a written report

reflecting visual acuity and field of

vision of each eye, with best correction,

signed by a person licensed to make

such an evaluation, or a certification of

blindness by a State or local

governmental entity.

* * * * *

(c) * * *

(1) A written report signed by a

licensed physician, psychiatrist, or

qualified psychologist, reflecting the

nature and extent of the disability or

disabilities that cause such person to

qualify as a person with a severe

disability, or a certification of the

disability or disabilities by a State or

local governmental entity.

* * * * *

4. Section 51–4.4 is amended by

revising paragraph (c), to read as

follows:

§ 51–4.4 Subcontracting.

* * * * *

(c) Nonprofit agencies may

subcontract a portion of the process for

producing a commodity or providing a

service on the Procurement List

provided that the portion of the process

retained by the prime nonprofit agency

generates employment for persons who

are blind or have other severe

disabilities. Subcontracting intended to

be a routine part of the production of a

commodity or provision of a service

shall be identified to the Committee at

the time the commodity or service is

proposed for addition to the

Procurement List and any significant

changes in the extent of subcontracting

must be approved in advance by the

Committee.

* * * * *

PART 51–6—PROCUREMENT

PROCEDURES

5. Section 51–6.12 is amended by

revising paragraph (c), to read as

follows:

§ 51–6.12 Specification changes and

similar actions.

* * * * *

(c) For services on the Procurement

List, the contracting activity shall notify

the nonprofit agency furnishing the

service and the central nonprofit agency

concerned at least 90 days prior to the

date that any changes in the statement

of work or other conditions of

performance will be required, including

assumption of performance of the

service by the contracting activity.

* * * * *

6. Section 51–6.14 is revised to read

as follows:

§ 51–6.14 Disputes.

Disputes between a nonprofit agency

and a contracting activity arising out of

matters covered by parts 51–5 and 51–

6 of this chapter shall be resolved,

where possible, by the contracting

activity and the nonprofit agency, with

assistance from the appropriate central

nonprofit agency. Disputes which

cannot be resolved by these parties shall

be referred to the Committee for

resolution.

Dated: December 16, 1997.

Beverly L. Milkman,

Executive Director.

[FR Doc. 97–33200 Filed 12–18–97; 8:45 am]

BILLING CODE 6353–01–P

NATIONAL FOUNDATION ON THE

ARTS AND THE HUMANITIES

Institute of Museum and Library

Services

45 CFR Chapter XI, Subchapter E

Change of Code of Federal

Regulations Subchapter Heading To

Reflect New Name of Institute

AGENCY: Institute of Museum and

Library Services (IMLS), NFAH.

ACTION: Final rule.

SUMMARY: This final rule implements

The Museum and Library Services Act

of 1996, which expanded the functions

of the existing Institute of Museum

Services to create The Institute of

Museum and Library Services (the

‘‘Institute’’), by amending the title of the

Institute of Museum Services

regulations to reflect the new name of

the agency.

DATES: This final rule is effective

December 19, 1997.

FOR FURTHER INFORMATION CONTACT:

Mary Ann Bittner, Director of

Legislative and Public Affairs, Institute

of Museum and Library Services, 1100

Pennsylvania Avenue, NW.,

Washington, DC 20405. Telephone:

(202) 606–8536.

SUPPLEMENTARY INFORMATION: The

Museum and Library Services Act of

1996 (the ‘‘Act’’), set forth at 20 U.S.C.

961 et seq., expanded the functions of

the existing Institute of Museum

Services to create The Institute of

Museum and Library Services. This rule

implements the Act, by amending the

title of the Institute of Museum Services

regulations to reflect the new name of

the agency.

The Institute of Museum and Library

Services considers this rule to be a

technical amendment which is exempt

from notice-and-comment under 5

U.S.C. 533(b)(3)(A). This rule is not a

significant rule for purposes of

Executive Order 12866 and has not been

reviewed by the Office of Management

and Budget. As required by the

Regulatory Flexibility Act, the Institute

certifies that these regulatory

amendments will not have a significant

impact on small business entities.

For the reasons stated in the preamble

and under the authority of 20 U.S.C. 961

et seq., the Institute of Museum and

Library Services amends 45 CFR,

Chapter XI, Subchapter E as follows:

1. Revise the heading for Subchapter

E to read as follows: