Federal Register / Vol. 62, No. 244 / Friday, December 19, 1997 / Rules and Regulations 66523

articles to make Type C medicated

broiler chicken feeds used for

prevention of coccidiosis, increased rate

of weight gain, and improved feed

efficiency.

EFFECTIVE DATE: December 19, 1997.

FOR FURTHER INFORMATION CONTACT:

Jeffrey M. Gilbert, Center for Veterinary

Medicine (HFV–128), Food and Drug

Administration, 7500 Standish Pl.,

Rockville, MD 20855, 301–594–1602.

SUPPLEMENTARY INFORMATION: Alpharma

Inc., One Executive Dr., P.O. Box 1399,

Fort Lee, NJ 07024, is sponsor of

ANADA 200–213 that provides for

combining approved decoquinate and

bacitracin zinc Type A medicated

articles to make Type C medicated feeds

for broilers containing decoquinate 27.2

grams per ton (g/t) and bacitracin zinc

10 to 50 g/t. The Type C medicated feed

is used as an aid in the prevention of

coccidiosis caused by Eimeria tenella, E.

necatrix, E. acervulina, E. brunetti, E.

mivati, and E. maxima; and for

increased rate of weight gain; and

improved feed efficiency.

ANADA 200–213, filed by Alpharma

Inc., is approved as a generic copy of

Rhone Poulenc’s NADA 45–348. The

ANADA is approved as of September

19, 1997, and the regulations are

amended in the table in 21 CFR

558.195(d) to reflect the approval. The

basis for approval is discussed in the

freedom of information summary.

In accordance with the freedom of

information provisions of 21 CFR part

20 and 514.11(e)(2)(ii), a summary of

safety and effectiveness data and

information submitted to support

approval of this application may be seen

in the Dockets Management Branch

(HFA–305), Food and Drug

Administration, 12420 Parklawn Dr.,

rm. 1–23, Rockville, MD 20857, between

9 a.m. and 4 p.m., Monday through

Friday.

The agency has determined under 21

CFR 25.33(a)(1) that this action is of a

type that does not individually or

cumulatively have a significant effect on

the human environment. Therefore,

neither an environmental assessment

nor an environmental impact statement

is required.

List of Subjects in 21 CFR Part 558

Animal drugs, Animal feeds.

Therefore, under the Federal Food,

Drug, and Cosmetic Act and under

authority delegated to the Commissioner

of Food and Drugs and redelegated to

the Center for Veterinary Medicine, 21

CFR part 558 is amended as follows:

PART 558—NEW ANIMAL DRUGS FOR

USE IN ANIMAL FEEDS

1. The authority citation for 21 CFR

part 558 continues to read as follows:

Authority: 21 U.S.C. 360b, 371.

§ 558.195 [Amended]

2. Section 558.195 Decoquinate is

amended in the table in paragraph (d),

in the entry for ‘‘27.2 (0.003 pct)’’, in the

second column, in the entry for

‘‘Bacitracin 10 to 50’’, under the column

‘‘Limitations’’ by removing ‘‘No.

000061’’ and adding in its place ‘‘Nos.

046573 and 011716’’.

Dated: December 8, 1997.

Stephen F. Sundlof,

Director, Center for Veterinary Medicine.

[FR Doc. 97–33095 Filed 12–18–97; 8:45 am]

BILLING CODE 4160–01–F

DEPARTMENT OF DEFENSE

Office of the Secretary

32 CFR Part 175

[DoD Instruction 4165.67]

RIN 0790–AF62

Revitalizing Base Closure

Communities and Community

Assistance

AGENCY: Department of Defense, Office

of the Deputy Under Secretary of

Defense (Industrial Affairs and

Installations).

ACTION: Final rule.

SUMMARY: This rule establishes

procedures for implementing section

2837 of the National Defense

Authorization Act for FY96 concerning

the Federal Agency leaseback of

property transferred to Local

Redevelopment Authorities (LRAs) at

installations approved for closure or

realignment, and informs communities

affected by base closure of these

procedures.

EFFECTIVE DATE: December 19, 1997.

FOR FURTHER INFORMATION CONTACT:

Jennifer Atkin, Base Closure and

Community Reinvestment Office, 400

Army-Navy Drive, Suite 200, Arlington,

VA 22202, telephone (703) 604–2400.

SUPPLEMENTARY INFORMATION:

Regulatory History and Background

Information

DoD published a proposed rule on

February 21, 1997 (62 FR 7966)

implementing section 2837 of the

National Defense Authorization Act for

FY96 (Pub. L. 104–106). Public

comments were accepted until April 22,

1997. This final rule addresses the

comments received on the proposed

rule.

Discussion of Public Comments

During the public comment period,

the Department received over 40 public

comments from 14 sources, including

numerous LRAs. The comments are

summarized generically below. Changes

that have been made to the rule in

response to public comments are noted.

The comments fall into eight broad

categories including:

Federal Tenant Procurement Authority

Many comments requested that the

rule revise the provisions regarding

what services a Federal tenant may pay

for and how the services can be

obtained. Examples include: (1) The

rule should authorize LRAs to charge

Federal leaseback tenants a Common

Area Maintenance Fee; (2) the rule

should authorize Federal tenants to sole

source for ‘‘landlord’’ services; and, (3)

the rule should require Federal tenants

to pay for services if the Agency paid for

the services when it owned the property

(note: this would only apply to existing

Federal tenants rather than agencies

relocating to the site).

Response: The Federal Government

cannot pay for municipal services that

are provided by a locality to its

population using tax revenues. Doing so

would, in effect, result in a taxing of the

Federal Government. But, as evidenced

by numerous Supreme Court Cases

interpreting the Supremacy Clause of

Article VI of the United States

Constitution, States cannot tax the

Federal Government. With respect to

other services, Federal tenants can only

pay for those services that are a

requirement of the Federal Government.

Paying a Common Area Maintenance

Fee could result in the Federal tenant

paying for services that are above and

beyond what is needed to use the

property being leased. For those services

that are necessary, the leaseback

authority does not remove the Federal

Government’s responsibility to abide by

existing procurement laws. As a result,

such services must be acquired using

existing procurement laws and

regulations. In some circumstances, a

sole source contract may be allowable.

Leaseback Transfer Approval/Rejection

Authority

Out of concern that prospective

Federal tenants will reject an LRA’s

request for a leaseback transfer with

virtually no justification, some

comments requested that the rule

establish criteria that would have to be
66524 Federal Register / Vol. 62, No. 244 / Friday, December 19, 1997 / Rules and Regulations

met for a Federal Agency to reject a

leaseback in favor of property

ownership. Other comments suggested

that an arbitration or grievance process

be established or that the General

Services Administration (GSA) should

be assigned the task of approving

leaseback requests.

Response: The Federal Property and

Administrative Services Act of 1949

gives Federal Departments and Agencies

priority on the use of base closure and

realignment property. This ‘‘right of first

refusal’’ to obtain ownership of property

is unchanged by the leaseback authority.

As a result, DoD does not have the legal

authority to require a Federal

Department or Agency to give up the

right of ownership in favor of a

leasehold interest. However, if a

leaseback is requested by an LRA, the

Department urges Federal Agencies to

give serious consideration to leasing the

property from the LRA instead of

pursuing ownership through a Federalto-Federal transfer.

Process For Securing Another Federal

Tenant

The proposed rule specified that if the

Federal Tenant no longer requires use of

the property before the expiration of the

lease term, the remainder of the term

may be satisfied by the same or another

Federal Agency for a similar use. The

rule stated that GSA would assist in

identifying interest in the property.

Comments raised by the public

requested that this process be clarified

to include how GSA will screen for

another user and how long GSA will

have to secure another tenant.

Response: Section 175.7(k)(10(vi) has

been amended to provide more

guidance on how a replacement tenant

would be identified by GSA. The rule

also stipulates that GSA would have

only 60 days in which to find a new

tenant.

Valuation and Consideration

Numerous public comments

addressed the issue of determining

value for the leaseback property and

setting the level of consideration. The

comments included: (1) The value of

leaseback property should be set at zero;

(2) consideration for the leaseback

property should not be due until after

the Federal tenant vacates; (3)

consideration for leaseback property

should be set at zero; and, (4) the rule

should define how value will be

determined for a stand-alone leaseback.

Response: The leaseback authority

requires the Department to determine

the fair market value of the property

before transfer. As a result, the value of

the leaseback property cannot be preset

through regulation. The rule does allow,

however, for flexibility with respect to

payment terms. Consideration can be in

cash or in kind, and can be paid up

front, over time, or when the Federal

tenant vacates the property, as long as

the amount of consideration (or formula

for determining the amount of

consideration) and the schedule for

payment are agreed upon before the

property is transferred. The value of

leaseback property being transferred

under an Economic Development

Conveyance (EDC) will be determined

in accordance with existing EDC

valuation procedures. Property being

conveyed as a stand-alone leaseback

will be valued based on the proposed

reuse.

Federal Tenant Improvements

Several LRAs expressed concern that

the proposed rule allows a Federal

tenant to repair, improve, and maintain

the property at its expense without the

approval of the LRA. The comments

stated that without requiring a Federal

tenant to consult with the LRA,

alterations made to the property could

be inconsistent with the community’s

plans for ultimate use of the property.

Response: The Department agrees

with the comments that were submitted

and has revised the rule to require

Federal tenants to consult with the LRA

before making repairs and

improvements.

Insurance

A few comments requested that the

rule require Federal tenants to obtain

insurance for property leased back from

an LRA in the same way that LRAs are

required to have insurance for property

leased from DoD.

Response: Requiring Federal tenants

to obtain insurance is unnecessary

because the Federal Government is self

insured.

Leaseback Compatibility With Other

Conveyance Regulations

Comments received from another

Federal Agency raised concerns that a

leaseback transfer may be incompatible

with a public benefit transfer (PBT)

when the leaseback property is located

within the PBT property. For example,

for leaseback property located within or

adjacent to property being conveyed via

a PBT, the public benefit grantee may

not be the LRA—the recipient of the

leaseback property. In addition, if

leaseback property is located within or

adjacent to PBT property, the Federal

Agency’s use of the property may be

incompatible with the public benefit use

(e.g. obstructing airspace near a public

airport). The comment recommended

that the rule require the Military

Departments to consult with the Federal

sponsoring Agency if the property to be

transferred under the leaseback

authority is within or adjacent to PBT

property.

Response: Property needed by another

Federal Department or Agency is either

transferred using the Federal-to-Federal

transfer process or it is transferred to an

LRA and then leased back to the Federal

entity under the leaseback authority.

The use of the property is the same

regardless of the transfer method. The

Department does not consult with

Federal sponsoring Agencies when

using a Federal-to-Federal transfer, so

the rule has not been changed to require

consultation when using a leaseback. In

some cases use of a leaseback transfer

rather than a Federal-to-Federal transfer

could actually be more beneficial if the

property is located within or adjacent to

PBT property because the leaseback rule

allows the property to be transferred to

another entity (e.g. an airport authority)

and provides a guarantee on the future

use of the property.

Legality of a Lease/Leaseback

Arrangement

One comment stated that, contrary to

the provisions of § 175.7(k)(7) of the

proposed rule, it is legally impossible to

have a leaseback without first deeding

the property to the LRA. The letter

stated that if a Federal Agency needs

access to the property before a deed can

be issued, the Military Department can

allow the Agency access without first

going through a leasback transaction.

The letter also stated that non-DoD

Federal agencies would refuse to enter

into lease/leaseback arrangement.

Response: The Department’s legal

counsel indicates that a lease in

furtherance of conveyance/leaseback

transaction is allowable if a deed

transfer cannot yet be accomplished.

But, the Department acknowledges that

in some circumstances other options

may be available to provide a Federal

Agency access to the property including

the use of a permit.

Statement of Determination and

Certifications

Executive Order 12866, ‘‘Regulatory

Planning and Review’’

It has been determined that this rule

is not a significant regulatory action as

defined under section 3(f)(1) through

3(f)(4) of Executive Order 12866.

Public Law 95–354, ‘‘Regulatory

Flexibility Act’’ (5 U.S.C. 601)

It has been determined that this rule

will not have a significant economic
Federal Register / Vol. 62, No. 244 / Friday, December 19, 1997 / Rules and Regulations 66525

1Available from the Base Closure and

Community Reinvestment Office, 400 Army Navy

Drive, Suite 200, Arlington, VA 22202, email:

‘‘baselreuse@acq.osd.mil’’

2A Deputy Secretary of Defense memorandum of

May 15, 1996, ‘‘OUSD (Acquisition and

Technology) Reorganization’’ disestablished the

office of the Assistant Secretary of Defense for

Economic Security and established the office of the

Deputy Under Secretary of Defense (Industrial

Affairs and Installations). Copies are available from

the Base Closure and Community Reinvestment

Office, 400 Army Navy Drive, Suite 200, Arlington,

VA 22202, email: ‘‘baselreuse@acq.osd.mil’’

impact on a substantial number of small

entities.

Public Law 104–13, ‘‘Paperwork

Reduction Act of 1995’’ (44 U.S.C.

Chapter 35)

It has been certified that this rule does

not impose any reporting or

recordkeeping requirements.

List of Subjects in 32 CFR Part 175

Community development,

Government employees, Military

personnel, Surplus Government

property.

Accordingly, 32 CFR part 175 is

amended to read as follows:

PART 175—[AMENDED]

1. The authority citation for 32 CFR

part 175 continues to read as follows:

Authority: 10 U.S.C. 2687 note.

2. Section 175.3 is amended by

adding a new paragraph (l) to read as

follows:

§ 175.3 Definitions.

* * * * *

(l) Similar use. A use that is

comparable to or essentially the same as

the use under the original lease. 3. Section 175.4, § 175.5, and § 175.6

are revised to read as follows:

§ 175.4 Policy.

It is DoD policy to help communities

impacted by base closures and

realignments achieve rapid economic

recovery through effective reuse of the

assets of closing and realigning basesmore quickly, more efficiently, and in

ways based on local market conditions

and locally developed reuse plans. This

will be accomplished by quickly

ensuring that communities and the

Military Departments communicate

effectively and work together to

accomplish mutual goals of quick

property disposal and rapid job

generation. This regulation does not

create any rights of remedies and may

not be relied upon by any person,

organization, or other entity to allege a

denial of any rights or remedies other

than those provided by Title XXIX of

Public Law 103–160, Public Law 103–

421, or Title XXVII of Public Law 104–

106.

§ 175.5 Responsibilities.

(a) The Deputy Under Secretary of

Defense (Industrial Affairs and

Installations), after coordination with

the General Counsel of the Department

of Defense and other officials as

appropriate, may issue guidance

through the publication of a Manual or

other such document necessary to

implement laws, Directives and

Instructions on the retention or disposal

of real and personal property at closing

or realigning bases.

(b) The Heads of the DoD Components

shall ensure compliance with this part

and guidance issued by the Assistant

Secretary of Defense for Economic

Security and the Deputy Under

Secretary of Defense (Industrial Affairs

and Installations) on revitalizing base

closure communities.

§ 175.6 Delegations of authority.

(a) The authority provided by sections

202 and 203 of the Federal Property and

Administrative Services Act of 1949, as

amended (40 U.S.C. 483 and 484) for the

utilization and disposal of excess and

surplus property at closing and

realigning bases has been delegated by

the Administrator, GSA, to the Secretary

of Defense by delegations dated March

1, 1989; October 9, 1990; September 13,

1991; and, September 1, 1995.1

Authority under these delegations has

been previously delegated to the

Secretaries of the Military Departments,

who may delegate this authority further. (b) Authorities delegated to the

Deputy Under Secretary of Defense

(Industrial Affairs and Installations) 2 by

§ 174.5 of this chapter are hereby

redelegated to the Secretaries of the

Military Departments, unless otherwise

provided within this part or other DoD

Directive, Instruction, Manual, or

Regulation. These authorities may be

delegated further. 4. Section 175.7 is amended by

revising paragraph (a)(13)(i) and

paragraph (d)(3)(i), by reserving

paragraph (j) and by adding paragraph

(k) to read as follows:

§ 175.7 Procedures.

(a) * * *

(13) * * *

(i) In unusual circumstances,

extensions beyond six months can be

granted by the Deputy Under Secretary

of Defense (Industrial Affairs and

Installations).

* * * * *

(d) * * *

(3) * * *

(i) In the event there is no LRA

recognized by DoD and/or if a

redevelopment plan is not received from

the LRA within 15 months from the

determination of surplus under

paragraph (a)(13) of this section, (unless

an extension of time has been granted

by the Deputy Under Secretary of

Defense (Industrial Affairs and

Installations)), the applicable Military

Department shall proceed with the

disposal of property under applicable

property disposal and environmental

laws and regulations.

* * * * *

(k) Leaseback of real property at base

closure and realignment sites. (1)

Section 2905(b)(4)(c) of Public Law 101–

510, 10 U.S.C. 2687 note (BRAC 1990),

as added by section 2837 of Public Law

104–106, gives the Secretary of Defense

the authority to transfer real property

that is still needed by a Federal

Department or Agency to an LRA

provided the LRA agrees to lease the

property back to the Federal Department

or Agency in accordance with all

statutory and regulatory guidance. The

purpose of this authority, hereinafter

referred to as a ‘‘leaseback,’’ is to enable

the LRA to obtain ownership of the

property pursuant to the BRAC process

while still ensuring that the Federal

need for use of the property is

accommodated.

(2) Subject to BRAC 1990 and this

part, the decision whether to transfer

property pursuant to a leaseback rests

with the relevant military department.

However, a military department may

only transfer property via a leaseback if

the Federal entity that needs the

property agrees to the leaseback

arrangement. (3) If for any reason property cannot

be transferred pursuant to a leaseback

(e.g., the relevant Federal Agency

prefers ownership, the LRA and the

Federal entity cannot agree on terms of

the lease, or the military department

determines that a leaseback would not

be in the Federal interest), such

property shall remain in Federal

ownership unless and until the relevant

landholding entity determines that it is

surplus pursuant to the Federal Property

Management Regulations. (4) If a building or structure is

proposed for transfer under this

authority, that which is leased back to

the Federal Department or Agency may

be all or a portion of that building or

structure.

(5) The leaseback authority may be

used at all installations approved for

closure or realignment under BRAC

1990.

(6) Transfers under this authority

must be to an LRA.

(7) Transfers under this authority may

be by lease in furtherance of conveyance

or deed. A lease in furtherance of

conveyance is appropriate only in those

circumstances where deed transfer

cannot be accomplished because the

requirements of the Comprehensive

Environmental Response,
66526 Federal Register / Vol. 62, No. 244 / Friday, December 19, 1997 / Rules and Regulations

Compensation, and Liability Act

(CERCLA) (42 U.S.C. 9601, et seq.) for

such transfer have not been met. The

lease in furtherance of conveyance or

accompanying contract shall include a

provision stating that the LRA agrees to

take title to the property when

requirements for the transfer have been

satisfied.

(8) The leaseback authority can be

used to transfer property that is needed

either by existing Federal tenants or by

Federal Departments or Agencies

desiring to locate onto the property after

operational closure. The Military

Department that is closing or realigning

the installation may not transfer

property to an LRA under this authority

and lease it back unless:

(i) The Military Department is acting

in an Executive Agent capacity on

behalf of a Defense Agency that certifies

that a leaseback is in the interest of that

Defense Agency; or,

(ii) The Secretary of the Military

Department certifies that a leaseback is

in the best interest of the Military

Department and that use of the property

by the Military Department is consistent

with the obligation to close or realign

the installation in accordance with the

recommendations of the Defense Base

Closure and Realignment Commission.

(9) Property eligible for a leaseback is

not surplus because it is still needed by

a Federal entity. However,

notwithstanding that the property is not

surplus and that the LRA would not

otherwise have to include such property

in its redevelopment plan, the LRA

should include the proposed leaseback

of property in its redevelopment plan,

taking into account the planned Federal

use of such property.

(10) The terms of the LRA’s lease to

the Federal entity should afford the

Federal Department or Agency rights as

close to those associated with

ownership of the property as is

practicable. The requirements of the

General Services Acquisition Regulation

(GSAR) (48 CFR Part 570) are not

applicable to the lease, but provisions in

the GSAR may be used to the extent

they are consistent with this part. The

terms of the lease are negotiable subject

to the following:

(i) The lease shall be for a term of no

more than 50 years, but may provide for

options for renewal or extension of the

term at the request of the Federal

Department or Agency concerned. The

lease term should be based on the needs

of the Federal entity.

(ii) The lease, or any renewals or

extensions thereof, shall not require

rental payments.

(iii) The lease shall not require the

Federal Government to pay the LRA or

other local government entity for

municipal services including fire and

police protection.

(iv) The Federal Department or

Agency concerned may be responsible

for services such as janitorial, grounds

keeping, utilities, capital maintenance,

and other services normally provided by

a landlord. Acquisition of such services

by the Federal Department or Agency is

to be accomplished through the use of

Federal Acquisition Regulation

procedures or otherwise in accordance

with applicable statutory and regulatory

requirements.

(v) The lease shall include a provision

prohibiting the LRA from transferring

fee title to another entity during the

term of the lease, other than one of the

political jurisdictions that comprise the

LRA, without the written consent of the

Federal Department or Agency

occupying the leaseback property.

(vi) The lease shall include a

provision specifying that if the Federal

Department or Agency concerned no

longer needs the property before the

expiration of the term of the lease, the

remainder of the lease term may be

satisfied by the same or another Federal

Department or Agency that needs

property for a similar use.

(A) Prior to exercising this option, the

Federal tenant shall consult with the

LRA concerned or other property owner

if the property has been conveyed by the

LRA to another entity in accordance

with § 175.7(k)(10)(v) of this part.

(B) If the Federal tenant decides to

exercise this option after consulting

with the LRA or other property owner,

it shall notify the appropriate General

Services Administration regional office

that the property is available for use by

a Federal Department or Agency. The

General Services Administration

regional office shall have 60 days from

the date of notification in which to

identify a Federal Department or

Agency to serve out the term of the lease

and to notify the LRA or other property

owner of the new tenant. If the regional

office does not notify the LRA or other

property owner of a new tenant within

60 days from the date of notification, the

property is available for use by the LRA

or other property owner.

(C) If the Federal tenant decides not

to exercise this option after consulting

with the LRA or other property owner,

the property is available for use by the

LRA or other property owner.

(vii) The terms of the lease shall

provide that the Federal Department or

Agency may repair and improve the

property at its expense after

consultation with the LRA.

(11) Conveyance to an LRA under this

authority shall be in one of the

following ways:

(i) Lease back property that will be

conveyed under an Economic

Development Conveyance (EDC) shall

be conveyed as part of the EDC in

accordance with the existing EDC

procedures and § 175.7(k)(11)(ii)(B)(4).

The LRA shall submit the following in

addition to the application requirements

outlined in § 175.7(e)(5):

(A) A description of the parcel or

parcels the LRA proposes to have

transferred to it and then to lease back

to a Federal Department or Agency;

(B) A written statement signed by an

authorized representative of the Federal

entity that it agrees to accept a leaseback

of the property; and,

(C) A statement explaining why a

leaseback is necessary for the long-term

economic redevelopment of the

installation property.

(ii) Leaseback property not associated

with property to be conveyed under an

EDC shall be conveyed in accordance

with the following procedures:

(A) As soon as possible after the

LRA’s submission of its redevelopment

plan to the DoD and HUD, the LRA shall

submit a request for a leaseback to the

Military department. The Military

Department may impose additional

requirements as necessary, but at a

minimum, the request shall contain the

following:

(1) A description of the parcel or

parcels the LRA proposes to have

transferred to it and then to lease back

to a Federal Department or Agency;

(2) A written statement signed by an

authorized representative of the Federal

entity that it agrees to accept a leaseback

of the property; and,

(3) A statement explaining why a

leaseback is necessary for the long-term

economic redevelopment of the

installation property.

(B) The transfer may be for

consideration at or below the estimated

present fair market value. In those

instances in which the property is

conveyed for consideration below the

estimated present fair market value, the

Military Department shall prepare a

written explanation of why the

estimated present fair market value was

not obtained.

(1) In a rural area, the transfer shall

comply with § 175.7(f)(5).

(2) Payment may be in cash or inkind.

(3) The Military Department shall

determine the estimated present fair

market value of the property before

transfer under this authority.

(4) The exact amount of

consideration, or the formula to be used
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