Federal Register / Vol. 76, No. 202 / Wednesday, October 19, 2011 / Proposed Rules 64885 

DEPARTMENT OF DEFENSE 

Defense Acquisition Regulations 

System 

48 CFR Parts 211 and 252 

RIN 0750–AG83 

Defense Federal Acquisition 

Regulation Supplement: Reporting of 

Government-Furnished Property 

(DFARS Case 2012–D001) 

AGENCIES: Defense Acquisition 

Regulations System, Department of 

Defense (DoD). 

ACTION: Proposed rule and notice of 

public meeting. 

SUMMARY: DoD is proposing to amend 

the Defense Federal Acquisition 

Regulation Supplement (DFARS) to 

revise and expand reporting 

requirements for Government-furnished 

property to include items uniquely and 

non-uniquely identified and clarify 

policy for contractor access to 

Government supply sources. 

DATES: Public Meeting: DoD is hosting a 

public meeting to discuss the proposed 

rule on November 17, 2011, at 1 p.m. 

EST. 

Submission of Comments: Comments 

on the proposed rule should be 

submitted in writing to the address 

shown below on or before December 19, 

2011, to be considered in the formation 

of the final rule. 

ADDRESSES: Public Meeting: The public 

meeting will be held in the Defense 

Acquisition Regulations Council 

(DARC) Conference Room, 241 18th 

Street South, Suite 200A, Arlington, VA 

22202–3409. 

Submission of Comments: You may 

submit comments, identified by DFARS 

Case 2012–D001, using any of the 

following methods: 

Æ Regulations.gov: http:// 

www.regulations.gov. Submit comments 

via the Federal eRulemaking portal by 

entering ‘‘DFARS Case 2012–D001’’ 

under the heading ‘‘Enter keyword or 

ID’’ and selecting ‘‘Search.’’ Select the 

link ‘‘Submit a Comment’’ that 

corresponds with ‘‘DFARS Case 2012– 

D001.’’ Follow the instructions provided 

at the ‘‘Submit a Comment’’ screen. 

Please include your name, company 

name (if any), and ‘‘DFARS Case 2012– 

D001’’ on your attached document. 

Æ E-mail: dfars@osd.mil. Include 

DFARS Case 2012–D001 in the subject 

line of the message. 

Æ Fax: 703–602–0350. 

Æ Mail: Defense Acquisition 

Regulations System, Attn: Meredith 

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

Room 3B855, 3060 Defense Pentagon, 

Washington, DC 20301–3060. 

Comments received generally will be 

posted without change to http:// 

www.regulations.gov, including any 

personal information provided. To 

confirm receipt of your comment(s), 

please check http:// 

www.regulations.gov, approximately 

two to three days after submission to 

verify posting (except allow 30 days for 

posting of comments submitted by 

mail). 

FOR FURTHER INFORMATION CONTACT: Ms. 

Meredith Murphy, telephone 703–602– 

1302. 

SUPPLEMENTARY INFORMATION: 

I. Background 

DoD published a proposed rule under 

DFARS Case 2009–D043 at 75 FR 80426 

on December 22, 2010. The due date for 

public comments under DFARS Case 

2009–D043 was extended from February 

22, 2011, to April 8, 2011, by 76 FR 

9527 on February 18, 2011. DoD has 

closed that case into this new case, 

DFARS Case 2012–D001, but will 

address the comments received in 

response to that case in this Federal 

Register notice for DFARS Case 2012– 

D001. This proposed rule would require 

contractors to report serially managed 

Government-furnished property to the 

DoD Item Unique Identification (IUID) 

Registry. Current DFARS policy requires 

contractors to report to the DoD IUID 

Registry property that is classified as 

equipment, special tooling, and special 

test equipment items valued at $5,000 or 

more, and items valued at less than 

$5,000 when required in accordance 

with contract terms and conditions. 

This proposed rule would also rename 

and revise the clause at DFARS 

252.211–7007, Reporting of 

Government-Furnished Equipment in 

the IUID Registry, accordingly, and 

make the clause applicable to 

commercial-item procurements. DFARS 

clause 252.251–7000, Ordering from 

Government Supply Sources, is also 

proposed for revision to require 

electronic receipts of property obtained 

from a Government supply source. 

Public Meeting Registration: 

Individuals wishing to attend the public 

meeting should register least one week 

in advance to ensure adequate room 

accommodations and to facilitate 

admittance into the meeting. Registrants 

will be given priority if room constraints 

require limits on attendance. Attendees 

are encouraged to arrive at least 15 

minutes early. To register, please go to— 

http://www.acq.osd.mil/dpap/dars/ 

government_furnished_property.html 

and submit the following information: 

(1) Company or organization name. 

(2) Full names of persons attending. 

(3) Identity if desiring to speak (limit 

to a 10-minute presentation per 

company or organization). 

(4) Last four digits of social security 

number for each person attending (nonFederal employees only). 

Send questions about registration or 

the submission of comments to the email address at the Web site previously 

identified. Please cite ‘‘Public meeting, 

DFARS Case 2012–D001’’ in the subject 

line of the e-mail. 

Attendees should bring a valid picture 

ID for in-processing. From the entrance 

to Suite 200A, they will be directed to 

the DARC Conference Room. If an 

attendee’s name is not on the list 

provided in advance of the meeting, the 

attendee will still be allowed into the 

meeting, if seating is available. 

Special Accommodations: The public 

meeting site is physically accessible to 

people with disabilities. Requests for 

sign language interpretation or other 

auxiliary aids should be directed to Ms. 

Meredith Murphy, telephone 703–602– 

1302, at least 10 working days prior to 

the meeting. 

Presentations: If you wish to make a 

presentation, please submit a copy of 

your presentation to the Web site 

identified in this section or to facsimile 

703–602–0350, no later than November 

3, 2011. Please cite ‘‘Public Meeting, 

DFARS Case 2012–D001’’ in all 

correspondence related to this public 

meeting. The submitted presentations 

will be the only record of the public 

meeting. If you intend to have your 

presentation considered as a public 

comment for the formation of a final 

rule, the presentation must be submitted 

separately as a written comment as 

instructed below. 

II. Discussion and Analysis of the 

Public Comments 

Comments were received from five 

respondents in response to the proposed 

rule under DFARS case 2009–D043. 

DoD reviewed the public comments in 

the formation of the proposed rule. This 

notice also addresses comments 

received at the public meeting held on 

March 18, 2011. Members of industry, 

DoD, and other Government agencies 

attended the public meeting. The 

following concerns were discussed at 

the public meeting: 

The attendees’ primary issues 

concerned the potential systems 

changes that they think may be 

necessary to accommodate the 

requirements of the rule; the perceived 

lack of DoD business rules associated 

with the Government-furnished 

property reporting requirements; and a 


srobinson on DSK4SPTVN1PROD with PROPOSALS
64886 Federal Register / Vol. 76, No. 202 / Wednesday, October 19, 2011 / Proposed Rules 

lack of sufficient information, in 

general, on the system requirements 

associated with the GFP module of 

DoD’s IUID Registry. 

Based on the public comments 

received and the concerns discussed at 

the public meeting, the following 

clarifications to the DFARS are included 

in this proposed rule: 

• Reporting of supply condition 

codes is required only for the reporting 

of reparables. 

• Contractor reporting of 

Government-furnished property may 

occur as transactions occur or as 

otherwise stated in the contractor’s 

property management procedure. 

• Material released to work in process 

need not be reported. 

• Unless tracked as an individual 

item, material shall be reported to the 

registry in the same unit of pack, e.g., 

original manufacturer’s package, box, or 

container, as it was received or 

otherwise acquired. 

• Residual material that is not serially 

managed, e.g., contractor inventory in 

partially opened original manufacturer’s 

package, box, or containers, need not be 

reported, but should be disposed of in 

accordance with contract terms and 

conditions. 

A discussion of the specific comments 

and the changes made as a result of 

those comments are provided herein. 

The comments were grouped into five 

categories by subject matter so that they 

could be addressed consistently. 

Comments on compliance with the 

Executive orders on Regulatory 

Planning and Review and Improving 

Regulation and Regulatory Review, the 

analysis of the Regulatory Flexibility 

Act, and the Paperwork Reduction Act 

are addressed in those sections of this 

notice. 

A. Reporting 

1. Reporting of All GovernmentFurnished Property 

Comment: One respondent indicated 

that eliminating the $5,000 floor for 

property reporting would add hundreds 

of thousands of items to reporting 

requirements. Referencing paragraph 

(b)(2) of the clause at DFARS 252.211– 

7007 (‘‘All GFP without an existing UII 

assigned shall be reported to the GFP 

Hub’’), the respondent recommended 

deleting this language or at least 

clarifying it by stating ‘‘All accountable 

GFP’’ because the proposed rule would 

have the effect of requiring reporting of 

‘‘materials, consumables, etc.’’ 

Response: The goal of this rule is to 

establish enterprisewide visibility of 

Government property. While there may 

be some few additional property items 

subject to reporting, the intent of the 

rule is to move away from strict 

reporting by dollar value alone and 

toward reporting designed to increase 

traceability. The result would 

standardize and simplify reporting 

overall. The rule draws clear 

distinctions between types of tracking 

requirements, i.e., property items are 

either individually tracked or are 

otherwise managed in bulk. In this 

proposed rule, DoD has clarified the 

reporting requirement and added 

definitions to eliminate confusion. 

2. Reporting of Material Released to 

Manufacturing Engineering 

Comment: A respondent expressed 

concern that the reutilization of 

equipment might be negatively 

impacted by use of the clause at DFARS 

252.211–7007. The respondent stated 

that, if the reporting requirements 

become too cumbersome, they will serve 

as a disincentive to contractors to 

request excess property out of the Plant 

Clearance Automated Reutilization and 

Reporting System (PCARSS) or from 

other excess lists. 

Response: DoD does not anticipate the 

outcome described by the respondent. 

Further, the reutilization requirements 

are currently in the existing contract 

clause. 

3. Reporting of Material to the Registry 

in Same Unit of Pack as Acquired 

Comment: One respondent said it did 

not know whether the proposed 

definitions in paragraph (a) of the clause 

at 252.211–7007 meant installing items 

in higher assemblies or how it should 

handle Government-furnished property 

that is assembled with contractoracquired property and subsequently 

delivered or placed back in inventory 

until needed. The respondent also 

stated that it concurred with the 

management of all items at the end item. 

Response: DoD has not proposed new 

policy regarding installation of 

Government property or contractoracquired property into higher 

assemblies. The additional definitions 

included in the proposed rule clarify 

that there is no policy change. 

4. Reporting of Non-Serially Managed 

Residual Material 

Comment: One respondent 

recommended that consumables, 

expendables, and sunk costs should be 

considered, defined, and a 

determination made as to what is 

included or excluded from this rule. 

Response: The proposed rule draws 

clear distinctions among the 

requirements for tracking items — 

property items are either individually 

tracked, i.e., serially managed, or 

otherwise managed in bulk, i.e., nonserially managed. Paragraph (g)(2) of the 

clause 252.211–7007 addresses serially 

managed consumed or expended items 

and paragraph (h) addresses non-serially 

managed residual material. 

5. Reporting of Supply Condition Codes 

Only for Reparables 

Comment: One respondent stated that 

contractors need to understand how 

reporting of supply condition codes is 

going to be required and who will be the 

authoritative source for condition 

coding. The respondent asked if this 

information could be found on 

Government shipping documents, and, 

if not, what business rule would be 

applied if the supply condition code 

was not supplied. The respondent 

pointed out that the definitions of the 

various supply condition codes are 

already listed in 245.606–5 and 

recommended that the definitions be 

deleted from the clause at 252.211– 

7007. The same respondent asked that 

the DFARS include ‘‘Condition Code 

(S),’’ applicable to the property 

management process and required for 

PCARSS processing. In addition, the 

respondent recommended changing the 

definition of ‘‘unit of issue’’ to ‘‘unit of 

measure,’’ in order to be consistent with 

FAR 52.245–1. 

Response: DoD has added a reference 

to Appendix 2 of DoD 4000.25–2, 

Military Standard Transaction Reporting 

and Accounting Procedures manual, 

along with a hyperlink to the URL. It is 

not necessary to add condition code 

‘‘S.’’ Such codes are needed only for 

reparable items; this is not a change 

from current practice. The proposed 

rule has been revised to make that clear. 

DoD has revised the definition of ‘‘unit 

of issue’’ to add ‘‘unit of measure.’’ 

6. Frequency of Reporting 

Comment: The reporting requirements 

in the clause at DFARS 252.211–7007 

are, according to one respondent, 

transactionally based and would require 

a daily upload to the GFP Hub. The 

respondent offered several alternatives 

to daily updates and noted that 

requiring daily updates would not take 

into account current approved practices. 

Response: The frequency of reporting 

should be consistent with a contractor’s 

property management procedures; DoD 

has not proposed creating differences 

from current reporting requirements in 

the clause at DFARS 252.211–7007. The 

proposed rule under 2009–D043 did not 

require contractors to provide daily 

uploads, and this proposed rule makes 

it clear that reporting requirements are 

based on transactions as they occur. 


srobinson on DSK4SPTVN1PROD with PROPOSALS
Federal Register / Vol. 76, No. 202 / Wednesday, October 19, 2011 / Proposed Rules 64887 

There is no requirement to report 

Government-furnished material 

consumed under receipt-and-issue 

processes, issued to the floor, or 

otherwise consumed. 

7. Disclaimer 

Comment: One respondent asked 

whether contractors could include a 

disclaimer that protects them once data 

is submitted and which would relieve 

the contractor of responsibility in the 

event of manipulation or theft. 

Response: No disclaimer is needed. 

Agencies are required to ensure the 

authentication and confidentiality of 

data commensurate with the risk and 

magnitude of the harm from loss, 

misuse, or unauthorized access to, or 

modification of, the information (see 

FAR 4.502(c)). The data submissions 

that would be required if the proposed 

rule is implemented do not differ in 

context from those now submitted by 

contractors under the clauses at 

252.211–7007, Reporting of 

Government-Furnished Equipment in 

the DoD Item Unique Identification 

(IUID) Registry, and 252.245–7002, 

Reporting Loss of Government Property, 

or electronic invoicing through wide 

area workflow. 

8. Marking Requirements 

Comment: DFARS 211.274–6(c)(2) 

reads: ‘‘Require the contractor to mark 

major end items under the terms and 

conditions of the contract.’’ One 

respondent stated that this paragraph is 

redundant to DFARS 211.274–6(c)(1) 

and should be deleted. The respondent 

also requested DoD to ‘‘(c)larify that 

these items are already marked and in 

the IUID Registry and that this effort is 

to acknowledge receipt * * *’’ and so 

state. 

Response: Subsection 211.274–6 is 

entitled ‘‘Contract clauses,’’ and it 

contains only clause prescriptions. 

211.274–6(c) prescribes the use of the 

clause at 252.211–7008, ‘‘Use of 

Government-Assigned Serial Numbers,’’ 

which is not the subject of this proposed 

rule. Therefore, the respondent’s 

comment is out of scope. 

B. Property Tracking Systems 

Comment: One respondent submitted 

multiple comments on the introduction 

of the ‘‘GFP Hub’’ at DFARS 252.211– 

7007(a) and expressed concern that it 

was premature because of the lack of 

experience with it in industry and its 

unproven benefits. Similar issues were 

raised by a second respondent at the 

public meeting. The respondents asked 

that clear business rules be developed 

for the GFP Hub before it becomes a 

requirement for contractor use. The 

respondents thought that the 

introduction of the GFP Hub would 

require the reporting of additional data 

fields and material that was irrelevant to 

operation and financial reporting and 

that the requirement for receipt 

notification of MILSTRIP items at 

252.211–7007 was a new requirement. 

In addition, the first respondent 

suggested that including hyperlinks in 

regulations was improper without 

regulatory review. A respondent also 

noted that the U.S. Army is moving to 

establish the Defense Property 

Accountability System (DPAS) as its 

property accounting system of record, 

and the Army requires GFP to be 

recorded in DPAS as well. 

Response: The Department of the 

Army has decided to use DPAS as its 

accountable property system of record. 

DoD’s goal is to remedy Government 

Accountability Office (GAO)-identified 

gaps in enterprisewide visibility. The 

data provided, if the proposed rule is 

implemented, will establish 

enterprisewide visibility of DoD items 

and will be available to users in the 

logistics, financial, and property 

accountability arenas. This visibility 

will facilitate reutilization and preclude 

the simultaneous acquisition and 

disposal of needed items. The data 

currently generated in non-standardized 

reports at the program level does not 

have DoD enterprisewide visibility, 

which is the basic objective of the 

proposed rule. It is not DoD’s intention 

to apply the final rule on this matter to 

existing programs; thus, it will not 

require duplicate records. 

Further, consistent with DoD policy, 

the activity furnishing the property, not 

the contractor, would normally ensure 

that the items to be furnished are 

entered into the registry. Each DoD 

component is responsible for populating 

the DoD IUID Registry in order to 

capture Unique Item Identifiers (UIIs) 

and their pedigree data (reference DoDI 

8320.4). A final rule would provide for 

electronic receipt notification, which is 

consistent with ASTM standard E2605– 

08, Standard Practice for Receiving 

Property, and which the respondent’s 

member companies have supported. 

In this proposed rule, the use of the 

term ‘‘GFP Hub’’ has been eliminated, 

and DoD has clarified that the IUID 

Registry contains a GFP module that is 

an essential element of the IUID Registry 

for items of Government property that 

do not have a UID assigned. Contractors 

already report Government-furnished 

property to the IUID Registry. Therefore, 

separate interfaces with the IUID 

Registry will not be needed. DoD fielded 

changes to Wide Area Workflow on July 

10, 2011. Changes to the IUID Registry 

were made on July 24, 2011. These new 

functionalities have been made 

available to industry so that it might 

gain experience with the capabilities 

and provide input on future 

enhancements. Further, DoD has 

provided industry with copies of the 

business rules associated with this 

proposed rule. 

The proposed rule will not result in 

duplicate or triplicate reporting. 

Moreover, Government-furnished 

property data assembled at the contract 

level and reported via a Contract Data 

Requirements List (CDRL) would not 

provide DoD with enterprisewide 

visibility of items, which is a focus of 

the proposed rule. The requirements of 

the proposed rule would enable the 

eventual elimination of the Commercial 

Asset Visibility (CAV) system—a client 

server system, with several hundred 

iterations, each requiring its own unique 

property reporting methodology. 

Elimination of the CAV system will 

result in significant cost savings for both 

DoD and industry. 

Several important clarifications have 

been made in this proposed rule. 

Specifically, reporting requirements for 

non-serially managed items are different 

from those for serially managed items; 

property items are either individually 

tracked, i.e., serially managed, or 

otherwise managed in bulk, i.e., nonserially managed. Non-serially managed 

material should be reported to the IUID 

Registry in the same unit of pack, e.g., 

box, container, as acquired. Reporting 

supply condition codes is required 

solely for reparables. Material released 

to work in progress need not be 

reported. (See paragraphs (f) through (h) 

of the clause at 252.211–7007, Reporting 

of Government-Furnished Property.) 

Also, contractors will be required to 

report Government property only as 

transactions occur or as otherwise 

established in the contractor’s own 

property management procedures. (See 

paragraph (i) of the clause at 252.211– 

7007, Reporting of GovernmentFurnished Property.) Dollar thresholds 

are not appropriate because they create 

needless variation. For example, 

controlled and sensitive items cannot be 

managed by dollar thresholds. 

With regard to use of hyperlinks in 

the regulations, hyperlinks are used 

judiciously and where their use makes 

sense. 

C. Costs 

Comment: A respondent indicated 

that ‘‘(t)he Government should keep in 

mind that fixed-price contracts that 

require this level of detailed part 

management will require equitable 

adjustments to comply.’’ 


srobinson on DSK4SPTVN1PROD with PROPOSALS
64888 Federal Register / Vol. 76, No. 202 / Wednesday, October 19, 2011 / Proposed Rules 

Response: The Government does not 

intend to incorporate the property 

management rules in this proposed rule 

into existing contracts. Therefore, there 

should be no equitable adjustments 

associated with the application of these 

amended rules into the DFARS. 

Comment: One respondent indicated 

a need for more information so that 

contractors understand what to identify 

as acquisition cost on items received. 

The same respondent requested a 

definition for ‘‘full cost’’ as that term is 

used in the definition of IUID Registry 

at 252.211–7007(a). 

Response: The unit acquisition cost 

for Government-furnished property 

items is the value assigned by the 

Government in accordance with FAR 

45.201. Establishing these types of costs 

is not a contractor responsibility. The 

term ‘‘full cost,’’ in the context of the 

definition of the ‘‘IUID Registry’’ in the 

proposed rule, refers to the 

Government’s unit acquisition cost, 

defined under 252.211–7003. 

Comment: One respondent 

recommended adding a Contract Data 

Requirements List (CDRL) to contracts 

for material position reports because of 

the affordability issues associated with 

this requirement. The respondent 

commented that this might be driven by 

the elimination of the DD 1662 and that 

contractors would need to double staff 

for duplicate recordkeeping and 

reconciling systems. Another 

respondent noted that paragraph 2–8 of 

Army Regulation (AR) 710–2, dated 

March 28, 2008, establishes recording of 

items with a unit cost over $5,000. The 

respondent stated that requiring 

contractors to tag all items under $5,000 

will increase resources and costs 

required to record property formally at 

this lower threshold. 

Response: The proposed rule is not 

driven by the elimination of the DD 

form 1662. The Government is not 

requiring contractors to develop or 

maintain two databases. Further, data 

assembled at the contract level via a 

CDRL would not provide the 

Department with enterprisewide 

information, a major objective of this 

proposed rule. With regard to the 

second comment, DoD requires 

reporting based on the level of 

traceability, not the dollar value. This 

requirement has been clarified in this 

proposed rule. 

D. Limitation to Cost-Reimbursement 

Contracts or Line Items 

Comment: One respondent asked why 

use of the clause at 252.211–7003, when 

usage is based on the delivery of 

contractor-acquired property, is limited 

to cost reimbursement contracts 

(211.274–6(a)(1)(ii). 

Response: The clause prescription is 

limited to cost-reimbursement contracts 

or cost-reimbursement line items that 

may result in the delivery of contractoracquired property because the concept 

of contractor-acquired property does not 

apply to other types of contracts. 

E. Editorial Comments 

Eight editorial changes were 

suggested. The editorial changes have 

been accommodated in the proposed 

rule. 

III. Executive Orders 12866 and 13563 

Executive Orders (E.O.s) 12866 and 

13563 direct agencies to assess all costs 

and benefits of available regulatory 

alternatives and, if regulation is 

necessary, to select regulatory 

approaches that maximize net benefits 

(including potential economic, 

environmental, public health and safety 

effects, distributive impacts, and 

equity). E.O. 13563 emphasizes the 

importance of quantifying both costs 

and benefits, of reducing costs, of 

harmonizing rules, and of promoting 

flexibility. This is a significant 

regulatory action and, therefore, was 

subject to review under section 6(b) of 

E.O. 12866, Regulatory Planning and 

Review, dated September 30, 1993. This 

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

804. 

Comment: One respondent expressed 

the opinion that the proposed rule 

under DFARS case 2009–D043 did not 

meet the intent and criteria of the 

Executive orders on regulatory planning 

and review. 

Response: E.O. 12866, Regulatory 

Planning and Review (of September 30, 

1993, as amended by E.O. 13258 of 

February 26, 2002, and E.O. 13422, of 

January 18, 2007) was followed on 

January 18, 2011, by the new E.O. 

13563, Improving Regulation and 

regulatory Review. These E.O.s require 

that the regulatory system must promote 

economic growth and competitiveness, 

allow for public participation, promote 

predictability, and ensure that 

regulations are easy to understand. 

Regulations should impose the least 

burden consistent with obtaining 

regulatory objectives and agencies must 

determine that the benefits justify the 

costs. The proposed rule published 

under DFARS case 2009–D043, was 

reviewed by the Office of Information 

and Regulatory Affairs prior to 

publication as are all rules published in 

the Federal Register. The Office of 

Information and Regulatory Affairs 

found the proposed rule to be in 

compliance with these Executive Orders 

and cleared the rule for publication. 

IV. Regulatory Flexibility Act 

An initial regulatory flexibility 

analysis was prepared consistent with 

the Regulatory Flexibility Act, 5 U.S.C. 

601, et seq., and is summarized as 

follows: 

The objective of this proposed rule is 

to improve the accountability and 

control of DoD assets. This rule 

proposes to amend the DFARS to revise 

and expand reporting requirements for 

Government-furnished property (GFP) 

to include GFP that is both uniquely 

and non-uniquely identified and 

clarifies policy for contractor access to 

Government supply sources. 

The clause at DFARS 252.211–7007, 

Reporting of Government-Furnished 

Property, requires contractors to identify 

and report GFP with existing uniqueitem identification to the DoD IUID 

Registry; and all GFP without an 

existing unique-item identification is 

required to be reported to the GFP 

module within the IUID Registry. 

DoD is unable to estimate the number 

of small entities to which this rule 

applies, and no responses were received 

from small entities to DoD’s request for 

comments. However, ten comments 

were received from an industry 

association and are summarized and 

addressed in the following paragraphs. 

Comment: One respondent expressed 

concern that significant additional costs 

would be associated with the changes 

proposed. The respondent was 

concerned that reporting to the IUID 

Registry would require contractors to 

double count Government property 

already accounted for in other ways, 

resulting in duplicate recordkeeping 

requirements. New costs of compliance 

should probably be doubled, stated the 

respondent. 

Response: Property items reported to 

the IUID Registry will have enterprisewide visibility, which enhances DoD’s 

ability to reutilize items. As the IUID 

Registry becomes available, other 

property accountability requirements 

will be rescinded, a goal strongly 

endorsed by the Government 

Accountability Office (GAO) and DoDI 

5000.64 and ASTM E53 2279 (both of 

which were cited by the respondent). 

The data provided if the proposed 

rule is implemented will establish 

enterprisewide visibility of DoD 

property and will be available to users 

in the logistics, financial, and property 

accountability arenas. This visibility 

contributes to the warfighter in a variety 

of ways, such as facilitating reutilization 

and precluding the simultaneous 


srobinson on DSK4SPTVN1PROD with PROPOSALS
Federal Register / Vol. 76, No. 202 / Wednesday, October 19, 2011 / Proposed Rules 64889 

acquisition and disposal of needed 

items. 

V. Paperwork Reduction Act 

The Paperwork Reduction Act (Pub. 

L. 96–511) applies because the rule 

imposes information collection 

requirements that require the approval 

of the Office of Management and Budget 

under 44 U.S.C. chapter 35. The 

information collection requirements 

under the proposed rule were formerly 

approved by the Office of Management 

and Budget under clearance number 

0704–0246, DFARS part 245, 

Government Property. The requirements 

of this proposed rule will have only a 

marginal impact, and they are not 

expected to change the overall burden 

hours (45,980 hours) approved under 

clearance number 0704–0246. The rule 

proposes to remove the mandatory 

$5,000 unit acquisition cost dollar 

threshold for reporting. This will not 

significantly impact items valued at less 

than $5,000 in unit acquisition cost as 

they were also previously required to be 

reported if they were serially managed, 

mission essential, sensitive, or 

controlled inventory. While this rule 

proposes to add reporting of 

Government-furnished material and 

reparables, this additional requirement 

would be offset by the potential for 

eventual elimination of DoD’s 

Commercial Asset Visibility (CAV) 

system. As background, the CAV system 

is a client-server software application 

used at Government and commercial 

repair sites to monitor and track the 

progress of repair components through 

the repair process. There are presently 

over 900 separate applications of CAV, 

all of which can be eliminated, given 

the new reporting constructs contained 

within this proposed rule. This would 

result in greater efficiency and 

considerable cost savings to both 

Government and industry. 

Eight comments were received on the 

paperwork burden proposed by the 

proposed rule under DFARS case 2009– 

D043. They are summarized and 

addressed in the following paragraphs. 

Comment: One respondent said that it 

was not evident what additional 

paperwork will be required. 

Response: DoD anticipates that there 

will not be any added paperwork. The 

currently required paperwork (OMB 

Clearance Number 0704–0246) will be 

modified, i.e., revised, but will not 

increase or decrease in total amount 

from the current requirement, so that 

the reporting required for DoD complies 

with the revised reporting requirements 

under the current FAR Governmentproperty regulations. Further, property 

reporting required by the current 

DFARS clause at 252.211–7007, and 

property reporting that would be 

required under this proposed rule, are 

Web-enabled and electronic in nature. 

Comment: There were several 

questions about details of the reporting 

required in the IUID registry. 

Response: DoD anticipates that these 

questions will be overcome by events as 

industry becomes familiar with the IUID 

updates that became available on July 

24, 2011. 

Comment: Two respondents 

expressed concern that elimination of 

the $5,000 threshold had the potential 

to result in substantial additional 

reporting, with each contracting officer 

setting his or her own rules and 

thresholds for individual contracts. 

Response: DoD’s goal is to eliminate 

the establishment of reporting 

requirements by an individual 

contracting officer or program manager 

and establish the IUID Registry as the 

standard. This would greatly increase 

consistency and allay the respondents’ 

concerns. 

List of Subjects in 48 CFR Parts 211 and 

252 

Government procurement. 

Mary Overstreet, 

Editor, Defense Acquisition Regulations 

System. 

Therefore, 48 CFR parts 211 and 252 

are proposed to be amended as follows: 

1. The authority citation for 48 CFR 

parts 211 and 252 continues to read as 

follows: 

Authority: 41 U.S.C. 1303 and 48 CFR 

chapter 1. 

PART 211—DESCRIBING AGENCY 

NEEDS 

2. Amend section 211.274–2 by 

revising paragraph (b)(2)(ii) to read as 

follows: 

211.274–2 Policy for unique item 

identification. 

* * * * * 

(b) * * * 

(2) * * * 

(ii) The DoD Unique Identification 

Policy Office must receive a copy of the 

determination and findings required by 

paragraph (b)(2)(i) of this subsection. 

Send the copy in accordance with the 

procedures at PGI 211.274–2(b). 

3. Revise section 211.274–4 to read as 

follows: 

211.274–4 Policy for reporting of 

Government-furnished property. 

(a) It is DoD policy that all 

Government-furnished property be 

recorded in the DoD Item Unique 

Identification (IUID) Registry, as defined 

in the clause at 252.211–7007, Reporting 

of Government-Furnished Property. 

(b) The following items are not 

required to be reported: 

(1) Contractor-acquired property, as 

defined in FAR part 45, that will not be 

delivered to, or accepted by, the 

Government (see PGI 245.402–71). 

(2) Property under any statutory 

leasing authority. 

(3) Property to which the Government 

has acquired a lien or title solely 

because of partial, advance, progress, or 

performance-based payments. 

(4) Intellectual property or software. 

(5) Real property. 

(6) Material released for work in 

process. 

4. Amend section 211.274–6 by 

revising paragraphs (a)(1)(ii) and (b) to 

read as follows: 

211.274–6 Contract clauses. 

(a)(1) * * * 

(ii) Are cost-reimbursement contracts 

that may result in the delivery of 

contractor-acquired property (see 

requirements at PGI 245.402–71). 

* * * * * 

(b) Use the clause at 252.211–7007, 

Reporting of Government-Furnished 

Property, 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. 

* * * * * 

PART 252—SOLICITATION 

PROVISIONS AND CONTRACT 

CLAUSES 

5. Revise section 252.211–7007 to 

read as follows: 

252.211–7007 Reporting of GovernmentFurnished Property. 

As prescribed in 211.274–6(b), use the 

following clause: 

Reporting of Government-Furnished 

Property. ([Date]) 

(a) Definitions. As used in this clause— 

Commercial and Government entity 

(CAGE) code means— 

(i) A code assigned by the Defense 

Logistics Information Service (DLIS) to 

identify a commercial or Government entity; 

or 

(ii) A code assigned by a member of the 

North Atlantic Treaty Organization that DLIS 

records and maintains in the CAGE master 

file. This type of code is known as an 

‘‘NCAGE code.’’ 

Government-furnished property (GFP) 

means property in the possession of, or 

directly acquired by, the Government and 

subsequently furnished to the Contractor for 

performance of a contract. GovernmentVerDate Mar<15>2010 16:22 Oct 18, 2011 Jkt 226001 PO 00000 Frm 00051 Fmt 4702 Sfmt 4702 E:\FR\FM\19OCP1.SGM 19OCP1

srobinson on DSK4SPTVN1PROD with PROPOSALS
64890 Federal Register / Vol. 76, No. 202 / Wednesday, October 19, 2011 / Proposed Rules 

furnished property includes, but is not 

limited to, spares and property furnished for 

repair, maintenance, overhaul, or 

modification. Government property also 

includes contractor-acquired property if the 

Contractor-acquired property is a deliverable 

under a cost contract when accepted by the 

Government for continued use under the 

contract. 

Item means a single hardware article or a 

single unit formed by a grouping of 

subassemblies, components, or constituent 

parts. 

IUID Registry means the DoD data 

repository that receives input from both 

industry and Government sources and 

provides storage of, and access to, data that 

identifies and describes tangible Government 

personal property. The IUID Registry is— 

(i) The authoritative source of Government 

unit acquisition cost for items with unique 

item identification (see DFARS 252.211– 

7003) that were acquired after January 1, 

2004; 

(ii) The master data source for 

Government-furnished property; and 

(iii) An authoritative source for 

establishing the acquisition cost of end-item 

equipment. 

National stock number (NSN) means a 13- 

digit stock number used to identify items of 

supply. It consists of a 4-digit Federal Supply 

Code and a 9-digit National Item 

Identification Number. 

Nomenclature means— 

(i) The combination of a Governmentassigned type designation and an approved 

item name; 

(ii) Names assigned to kinds and groups of 

products; or 

(iii) Formal designations assigned to 

products by customer or supplier (such as 

model number or model type, design 

differentiation, or specific design series or 

configuration). 

Part or identifying number (PIN) means the 

identifier assigned by the original design 

activity, or by the controlling nationally 

recognized standard, that uniquely identifies 

(relative to that design activity) a specific 

item. 

Reparable means an item, typically in 

unserviceable condition, furnished to the 

Contractor for maintenance, repair, 

modification, or overhaul. 

Serially managed item means an item 

designated by DoD to be uniquely tracked, 

controlled, or managed in maintenance, 

repair, and/or supply systems by means of its 

serial number. 

Special test equipment means either single 

or multipurpose integrated test units 

engineered, designed, fabricated, or modified 

to accomplish special purpose testing in 

performing a contract. It consists of items or 

assemblies of equipment including 

foundations and similar improvements 

necessary for installing special test 

equipment, and standard or general purpose 

items or components that are interconnected 

and interdependent so as to become a new 

functional entity for special testing purposes. 

Special test equipment does not include 

material, special tooling, real property, or 

equipment items used for general testing 

purposes, or property that with relatively 

minor expense can be made suitable for 

general purpose use. 

Special tooling means jigs, dies, fixtures, 

molds, patterns, taps, gauges, and all 

components of these items, including 

foundations and similar improvements 

necessary for installing special tooling, and 

which are of such a specialized nature that 

without substantial modification or alteration 

their use is limited to the development or 

production of particular supplies or parts 

thereof or to the performance of particular 

services. Special tooling does not include 

material, special test equipment, real 

property, equipment, machine tools, or 

similar capital items. 

Supply condition code means a 

classification of materiel in terms of 

readiness for issue and use or to identify 

action underway to change the status of 

materiel (see http://www2.dla.mil/j-/dlmso/ 

eLibrary/Manuals/dlalmso_pubs.asp). 

Unique item identifier (UII) means a set of 

data elements permanently marked on an 

item that is globally unique and 

unambiguous and never changes, in order to 

provide traceability of the item throughout its 

total life cycle. The term includes a 

concatenated UII, as defined in the clause at 

252.211–7003(a), or a DoD recognized unique 

identification equivalent. 

Unit acquisition cost means— 

(i) For Government-furnished equipment, 

the dollar value assigned by the Government 

and assigned in the contract; and 

(ii) For Contractor-acquired property, the 

cost derived from the Contractor’s records 

that reflect consistently applied generally 

accepted accounting principles. 

Unit of issue or unit of measure means the 

physical measurement of count or quantity 

(such as each, dozen, gallon, or kilogram) in 

which an item is procured, stored, and 

released. 

(b) Requirement for reporting of 

Government-furnished property (GFP) to the 

DoD Item Unique Identification (IUID) 

Registry. Except as provided in paragraph (c) 

of this clause, the Contractor shall report 

Government-furnished property to the DoD 

IUID Registry. 

(c) Exceptions. Paragraph (b) of this clause 

does not apply to— 

(1) Contractor-acquired property that has 

not been delivered to, and accepted by, the 

Government; 

(2) Property under any statutory leasing 

authority; 

(3) Property to which the Government has 

acquired a lien or title solely because of 

partial, advance, progress, or performancebased payments; 

(4) Intellectual property or software; 

(5) Real property; or 

(6) Material released for work in process. 

(d) When required by contract terms and 

conditions, the Contractor shall assign a UII 

to each item of GFP, including those items 

previously reported to the IUID Registry. 

Upon UII assignment and reporting, the 

Contractor shall update the property record 

in the IUID Registry. 

(e) Procedures for establishing UIIs. To 

permit reporting of virtual UIIs to the DoD 

IUID Registry, the Contractor’s property 

management system shall enable the 

following data elements in addition to those 

required by paragraph (f)(1)(iii)(A) of the 

clause at FAR 52.245–1: 

(1) Parent UII. 

(2) Category code, if applicable (‘‘ST’’ for 

special tooling, ‘‘STE’’ for special test 

equipment). 

(3) Appropriate supply condition code, 

required only for reporting of reparables, per 

Appendix 2 of DoD 4000.25–2–M, Military 

Standard Transaction Reporting and 

Accounting Procedures (MILSTRAP) Manual 

(see http://www2.dla.mil/j-6/dlmso/eLibrary/ 

Manuals/dlalmso_pubs.asp). 

(4) Commercial and Government Entity 

(CAGE) code on the accountable contract. 

(5) Mark record. 

(i) Bagged or tagged code (for items too 

small to individually tag or mark). 

(ii) Contents (the type of information 

recorded on the item, e.g., item internal 

control number). 

(iii) Effective date (date the mark is 

applied). 

(iv) Added or removed code/flag. 

(v) Marker code (designates which code is 

used in the marker identifier, e.g., D = CAGE, 

UN = DUNS, LD = DODAAC). 

(vi) Marker identifier, e.g., Contractor’s 

CAGE code or DUNS number. 

(vii) Medium code; how the data is 

recorded, e.g., barcode, contact memory 

button. 

(viii) Value, e.g., actual text or data string 

that is recorded in its human-readable form. 

(ix) Set (used to group marks when 

multiple sets exist. 

(f) Procedures for reporting of Governmentfurnished property to the IUID Registry. 

Except as provided in paragraph (c) of this 

clause, the Contractor shall establish and 

report to the IUID Registry the information 

required by FAR clause 52.245–1, paragraphs 

(e) and (f)(1)(iii), in accordance with the data 

submission procedures at http:// 

www.acq.osd.mil/dpap/pdi/uid/ 

data_submission_information.html. Unless 

tracked as an individual item, material shall 

be reported to the registry in the same unit 

of pack, e.g., original manufacturer’s package, 

box, or container, as it was received or 

otherwise acquired. 

(g) Procedures for updating the DoD IUID 

Registry. The Contractor shall update the 

DoD IUID Registry at 

https://www.bpn.gov/iuid for changes in 

status, mark, custody, condition code (for 

reparables only), or disposition of items that 

are— 

(1) Delivered or shipped from the 

Contractor’s plant, under Government 

instructions, except when shipment is to a 

subcontractor or other location of the 

Contractor; 

(2) Serially managed items, consumed or 

expended, reasonably and properly, or 

otherwise accounted for, in the performance 

of the contract as determined by the 

Government property administrator, 

including reasonable inventory adjustments; 

(3) Disposed of; or 

(4) Transferred to a follow-on or other 

contract. 

(h) The Contractor need not report nonserially managed residual material, i.e., 

Contractor inventory in partially opened 


srobinson on DSK4SPTVN1PROD with PROPOSALS
Federal Register / Vol. 76, No. 202 / Wednesday, October 19, 2011 / Proposed Rules 64891 

original manufacturer’s package, box, or 

containers, but should dispose of such 

material in accordance with contract terms 

and conditions. 

(i) The Contractor shall make updates as 

transactions occur or as otherwise stated in 

the Contractor’s property management 

procedure. 

(End of clause) 

6. Amend section 252.251–7000 by 

removing the clause date ‘‘(NOV 2004)’’ 

and adding in its place ‘‘(DATE)’’, 

revising introductory text of paragraph 

(c), redesignating paragraphs (d) and (e) 

as paragraphs (e) and (f), and adding 

new paragraph (d) to read as follows: 

252.251–7000 Ordering from Government 

supply sources. 

* * * * * 

(c) When placing orders for 

Government stock on a reimbursable 

basis, the Contractor shall— 

* * * * * 

(d) When placing orders for 

Government stock on a nonreimbursable basis, the Contractor 

shall— 

(1) Comply with the requirements of 

the Contracting Officer’s authorization. 

(2) When using electronic transactions 

to submit requisitions on a nonreimbursable basis only, place orders by 

authorizing contract number using the 

Defense Logistics Management System 

(DLMS) Supplement to Federal 

Implementation Convention 511R, 

Requisition; and acknowledge receipts 

by authorizing contract number using 

the DLMS Supplement 527R, Receipt, 

Inquiry, Response and Material Receipt 

Acknowledgement. 

* * * * * 

[FR Doc. 2011–27062 Filed 10–18–11; 8:45 am] 

BILLING CODE 5001–06–P 


srobinson on DSK4SPTVN1PROD with PROPOSALS