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[Federal Register Volume 78, Number 241 (Monday, December 16, 2013)]
[Rules and Regulations]
[Pages 76074-76077]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-29861]

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DEPARTMENT OF STATE

48 CFR Parts 645 and 652

[Public Notice 8546]
RIN 1400-AC33

Department of State Acquisition Regulation

AGENCY: Department of State.

ACTION: Final rule.

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SUMMARY: This rule adopts as final certain changes proposed to the 
Department of State Acquisition Regulation (DOSAR) to conform to 
Federal Acquisition Regulation (FAR) changes. It adds a new DOSAR 
clause and provision regarding reporting certain categories of 
Government-furnished and contractor-acquired property.

DATES: This rule is effective on January 15, 2014.

FOR FURTHER INFORMATION CONTACT: You may obtain copies of the proposed 
information collection and supporting documents from Ella Ramirez, 
Senior Procurement Analyst, Policy Division, Department of State, 
Office of the Procurement Executive, 2201 C Street NW., Suite 1060, 
State Annex Number 15, Washington, DC 20522-0602; email address: 
RamirezIM2@state.gov.

SUPPLEMENTARY INFORMATION: This rule was published as a Notice of 
Proposed Rulemaking (NPRM) on July 29, 2013 (78 FR 45490), with a 
provision of 60 days for public comment. A summary of the proposed 
changes and the reasons therefor were included in the NPRM. The 
Department of State (Department) received two comments in response to 
the NPRM.
    The first commenter recommended that requirements for 
accountability for Government-provided software be deleted because FAR 
Part 27 covers software and FAR Part 45 does not. While it is true that 
software is expressly excluded from the FAR 45.101 definition of 
``Government property,'' tracking of software provided by the 
Department to its contractors is required information for the 
Department's financial statement. Prescribing separate reporting of 
this information in a DOSAR supplement to FAR 27 would be burdensome 
and inefficient. Accordingly, that recommendation is not accepted.
    The first commenter also recommended that ``Accounting'' be changed 
to ``Accountability'' in the proposed DOSAR Sec. Sec.  652.245-70(a)(3) 
and 652.245-71, on the theory that Part 45 governs the management and 
accountability of Government-owned property, not ``accounting,'' which 
is a financial function. The Department accepts this recommendation 
insofar as the language in the provision, and has changed the title of 
the clause to ``Special Reports of Government Property.''
    The first commenter pointed out duplicate provisions in proposed 
Sec.  652.245-71(d)(2)(iv) and (d)(2)(xiv). The Department agrees that 
these provisions are duplicative, and will delete subsection 
(d)(2)(xiv), renumber subsequent provisions, and move the parenthetical 
comment (``If from another DOS contract, or government agency, please 
specify'') to subsection (d)(2)(iv).
    The first commenter recommended that the words ``or their delegated 
representatives'' be added to the end of the chapeau to Sec.  652.245-
71(f). The Department does not agree that delegating this 
responsibility would be appropriate, and does not accept this 
recommendation.
    The second commenter advances several broad arguments involving the 
Department's authority to enact rules and to make findings with respect 
to various administrative laws and executive orders that apply to 
rulemaking. The Department disagrees with the comments.
    The authority of agencies to regulate is well-established. The 
absolute ``non-delegation'' concept has been virtually abandoned since 
1948. See Mistretta v. United States, 488 U.S. 361 (1989), and the 
cases cited therein. ``The power of an administrative agency to 
administer a congressionally created . . . program necessarily requires 
the formulation of policy and the making of rules to fill any gap left, 
implicitly or explicitly, by Congress.'' Morton v. Ruiz, 415 U.S. 199, 
231 (1974).
    ``If Congress has explicitly left a gap for the agency to fill, 
there is an express delegation of authority to the agency to elucidate 
a specific provision of the statute by regulation. Such legislative 
regulations are given controlling weight unless they are arbitrary, 
capricious, or manifestly contrary to the statute. Sometimes the 
legislative delegation to an agency on a particular question is 
implicit rather than explicit. In such a case, a court may not 
substitute its own construction of a statutory provision for a 
reasonable interpretation made by the administrator of an agency.'' 
Chevron, U.S.A., Inc. v. NRDC, Inc., 467 U.S. 837, 843-844 (1984) 
(footnote omitted).
    In the case of the FAR and DOSAR, Congress explicitly delegated 
rulemaking authority to certain agencies, resulting in the FAR. 41 
U.S.C. 1303. FAR 1.301 provides authority to agencies to supplement the 
FAR: ``[A]n agency head may issue or authorize the issuance of agency 
acquisition regulations that implement or supplement the FAR and 
incorporate, together with the FAR, agency policies, procedures, 
contract clauses, solicitation provisions, and forms that govern the 
contracting process or otherwise control the relationship between the 
agency, including any of its suborganizations, and contractors or 
prospective contractors.'' 48 CFR Sec.  1.301. The Secretary of State 
has the general authority to issue regulations to carry out the 
functions of the Department; specifically, in this case, regulations to 
implement procurement statutes and the FAR. 22 U.S.C. 2651a. The 
Department of State's implementing regulations are the DOSAR, codified 
at 48 CFR parts 600-699.
    The commenter further challenged the ability of a Department 
official to make findings with respect to compliance with applicable 
statutes and executive orders (contained in the ``Regulatory Findings'' 
section of the NPRM and in this Final Rule, below). Except for the 
Administrative Procedure Act (APA), the statutes or executive orders 
cited in this section require agencies to consider certain factors 
prior to publishing a rule. (With respect to the APA, the Department's 
assertion was (and is) a simple statement of fact regarding how it has 
complied with that law.)
    If a member of the public has information contrary to the assertion 
of the Department official (for example, proof that annual impact on 
the U.S. economy from the rulemaking would in fact exceed $100,000,000; 
or proof that the rule would have a significant impact

[[Page 76075]]

on domestic tribes), he or she could present such information during 
the comment period, at which time the Department would have to address 
it. The commenter did not present such evidence; nor did she cite any 
authority for the proposition that the Department is not permitted to 
assert its compliance with statutes and executive orders.

Conclusion

    The rule published as part of the NPRM is hereby published in 
final, with the modifications described above.

Regulatory Findings

Administrative Procedure Act

    In accordance with provisions of the Administrative Procedure Act, 
the Department published this rule and provided 60 days for public 
comment.

Regulatory Flexibility Act

    The Department of State, in accordance with the Regulatory 
Flexibility Act (5 U.S.C. 605(b)), has reviewed this regulation and, by 
approving it, certifies that this rule will not have a significant 
economic impact on a substantial number of small entities. This 
determination was based on the fact that the reporting requirements are 
targeted at a very narrow segment of government property and based on a 
determination that there are only 14 contractors who are currently 
subject to the reporting requirements of the clause. Only four of these 
are small business concerns. Thus, it was concluded that the rule will 
not have a significant economic impact on a substantial number of small 
entities.

Unfunded Mandates Act of 1995

    This rule will not result in the expenditure by State, local, and 
tribal governments, in the aggregate, or by the private sector, of $100 
million or more in any year and it will not significantly or uniquely 
affect small governments. Therefore, no actions were deemed necessary 
under the provisions of the Unfunded Mandates Act of 1995.

Small Business Regulatory Enforcement Fairness Act of 1996

    This rule is not a major rule as defined by the Small Business 
Regulatory Enforcement Act of 1996 (5 U.S.C. 801 et seq.). This rule 
will not result in an annual effect on the economy of $100 million or 
more; a major increase in costs or prices; or significant adverse 
effects on competition, employment, investment, productivity, 
innovation, or on the ability of United States-based companies to 
compete with foreign-based companies in domestic and import markets. 
This determination was based on the fact that the reporting 
requirements are targeted at a very narrow segment of government 
property, and on a determination that there are only 14 contractors who 
are currently subject to the reporting requirements of the clause. The 
rule does not place new requirements on contract performance, but 
merely addresses reporting of existing information.

Executive Orders 12866 and 13563

    Executive Orders (E.O.) 12866 and 13563 direct agencies to assess 
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 
emphasized the importance of quantifying both costs and benefits, of 
reducing costs, of harmonizing rules, and of promoting flexibility. The 
Department of State does not consider this rule to be a ``significant 
regulatory action'' under Executive Order 12866, section 3(f), 
Regulatory Planning and Review.
    In addition, the Department is exempt from Executive Order 12866 
except to the extent that it is promulgating regulations in conjunction 
with a domestic agency that are significant regulatory actions. The 
Department has nevertheless reviewed the regulation to ensure its 
consistency with the regulatory philosophy and principles set forth in 
the Executive Orders and finds that the benefits of the proposed rule 
outweigh any costs.

Executive Order 13132

    This rule will not have substantial direct effects on the States, 
on the relationship between the national government and the States, or 
on the distribution of power and responsibilities among the various 
levels of government. Therefore, in accordance with section 6 of 
Executive Order 13132, it is determined that this rule does not have 
sufficient federalism implications to require consultations or warrant 
the preparation of a federalism summary impact statement.

Executive Order 13175

    The Department has determined that this rulemaking will not have 
tribal implications, will not impose substantial direct compliance 
costs on Indian tribal governments, and will not pre-empt tribal law. 
Accordingly, the requirements of Executive Order 13175 do not apply to 
this rulemaking.

Paperwork Reduction Act

    The Paperwork Reduction Act of 1980 (44 U.S.C. Chapter 35) applies, 
because the proposed rule imposes information collection requirements 
that require the approval of the Office of Management and Budget under 
44 U.S.C. 3501, et seq.
    Summary of Proposed Collections: The Department of State is seeking 
OMB approval for the information collection described below.
     Title of Information Collection: Department of State 
Acquisition Regulation (DOSAR) 652.245-70, Status of Property 
Management System.
     OMB Control Number: 1405-0050.
     Type of Request: Revision of Currently Approved 
Collection.
     Originating Office: Bureau of Administration, Office of 
Procurement Executive, Policy Division (A/OPE/PD).
     Form Number: None.
     Respondents: Business and other for-profit and not-for-
profit organizations wishing to receive Department of State contracts.
     Estimated Number of Total Respondents: 3,466.
     Estimated Number of Total Responses: 9,330.
     Average Time per Response: 30 hours.
     Total Estimated Burden Time: 275,984.
     Frequency: On Occasion.
     Obligation to Respond: Required to Obtain or Retain a 
Benefit.
    The total number of responses was increased by fourteen from 9,316 
to 9,330. As a result of this change, the total estimated burden was 
increased from 275,970 hours to 275,984 hours. The increase in the 
responses and the burden is due to the impact of this DOSAR provision.
    Abstract of proposed collection:
    The proposed rule will update the Department of State Acquisition 
Regulation (DOSAR) to conform to recent Federal Acquisition Regulation 
(FAR) changes, and adds a new DOSAR provision, 652.245-70, regarding 
reporting on the status of offeror's property management systems. 
Respondents are offerors on solicitations for contracts under which 
specified government property will be provided. This is an existing IC, 
1405-0050, Department of State Acquisition Regulation (DOSAR) 652.245-
70, Status of Property Management System. This provision was 
inadvertently left out of the previously approved Information 
Collection package. The new provision is being inserted into the DOSAR 
and concurrently added into the current IC. The new DOSAR provision 
(and IC

[[Page 76076]]

requirement) asks for procedures for government property management 
(transportation, software, personal property). Over the course of the 
last two fiscal years (FY 11 and FY 12), only four solicitations were 
issued under which this new reporting was required, and on those 
solicitations, an average of 2.3 submissions was received. Based on 
conversations with a sample of submitters, we estimate that 
approximately 1.0 hour is required to research, document and 
incorporate the information into the proposal.
    The Department received two comments in response to the NPRM, but 
neither comment addressed the information collection specifically.
    Legal Authorities are as follows:
(1) Code of Federal Regulations, Title 48, Chapter 6, Department of 
State Acquisition Regulation
(2) Code of Federal Regulations, Title 48, Chapter 1, Federal 
Acquisition Regulation
(3) Public Law 103-236, Foreign Relations Authorization Act, Fiscal 
Years 1994 and 1995
(4) Foreign Service Buildings Act of 1926, as amended (22 U.S.C. 302)
(5) Omnibus Diplomatic Security and Antiterrorism Act of 1986 (22 
U.S.C. 4852)
(6) Foreign Relations Authorization Act, Fiscal Years 1990 and 1991 (22 
U.S.C. 4864)

List of Subjects in 48 CFR Parts 645 and 652

    Contracts, Electronic commerce, Government procurement.

    Accordingly, for reasons set forth in the preamble, Title 48, 
chapter 6 of the Code of Federal Regulations is amended as follows:

0
1. The authority citation for part 645 reads as follows:

    Authority:  40 U.S.C. 121; 22 U.S.C. 2651a; 48 CFR Subpart 1.3.

0
2. Part 645 is revised to read as follows:

PART 645--GOVERNMENT PROPERTY

Subpart 645.1--General

Sec.
645.107 Contract clauses.
645.107-70 DOSAR contract clause and solicitation provision.

    (a) The contracting officer shall insert the provision at 652.245-
70, Status of Property Management System, in solicitations when any of 
the following conditions apply:
    (1) Highway motor vehicles and aircraft, regardless of cost, are 
provided by the Government or acquired by the contractor for the 
account of the Government;
    (2) Software exceeding $500,000 in value, including labor costs to 
develop, is provided by the Government or acquired by the contractor 
for the account of the Government; or
    (3) Personal property greater than $25,000 (and not in paragraphs 
(a)(1) or (2) of this subsection) is provided by the Government or 
acquired by the contractor for the account of the Government. The 
personal property must be complete within itself; does not lose its 
identity or become a component part of other property when put into 
use; and is of a durable nature with an estimated useful life 
expectancy to exceed two years.
    (b) The contracting officer shall insert the clause at 652.245-71, 
Special Reports of Government Property, in all solicitations and 
contracts that contain the provision at 652.245-70.

PART 652--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
3. The authority citation for part 652 is revised to read as follows:

    Authority:  40 U.S.C. 121; 22 U.S.C. 2651a; 48 CFR Subpart 1.3.

0
4. Section 652.245-70 is added to read as follows:

652.245-70   Status of Property Management System.

    As prescribed in 645.107-70(a), insert the following provision:

Status of Property Management System (DEC 2013)

    (a) When used in this provision, government-furnished property, 
government property, and contractor-acquired property are as defined 
in FAR 45.101.
    (b) Offerors shall include in their quote or offer:
    (1) Whether the offeror's property management system that will 
be used on this contract to track government-furnished property and/
or contractor-acquired property has been determined to be adequate 
by a Federal property manager;
    (2) The name, address, telephone number and email address of 
both the-
    (i) Cognizant Administrative Contracting Officer (ACO) 
responsible for review and determination of adequacy of the 
contractor's property system; and
    (ii) The cognizant contractor government property manager;
    (3) The voluntary consensus standard or industry leading 
practices and standards to be used in the management of government 
property, or existing property management plans, methods, practices 
or procedures for accountability of property.

    (End of provision)

0
5. Section 652.245-71 is added to read as follows:

652.245-71   Special Reports of Government Property.

    As prescribed in 645.107-70(b), insert the following clause:

Special Reports of Government Property (DEC 2013)

    (a) Definitions. As used in this clause:
    Disposition means government property that has been removed from 
use on the contract.
    Highway motor vehicle means any vehicle, self propelled or drawn 
by mechanical power, designed and operated principally for highway 
transportation of property or passengers. (41 CFR 102-34.35).
    (b) The Contractor shall establish and maintain a property 
management system that is in accordance with the clause at FAR 
52.245-1, Government Property. This clause supplements these 
requirements by specifying the U.S. Department of State capitalized 
property reporting requirements.
    (c) The Contractor shall submit electronically one report on an 
annual basis and three other reports on a quarterly basis for the 
following:
    (1) Where highway motor vehicles and aircraft, regardless of 
cost, are provided by the Government or acquired by the Contractor 
for the account of the Government;
    (2) Where software exceeding $500,000 in value, including labor 
cost to develop, is provided by the Government or acquired by the 
Contractor for the account of the Government; or
    (3) Where personal property greater than $25,000 (not in 
paragraph (c)(1) or (c)(2) of this clause) is provided by the 
Government or acquired by the Contractor for the account of the 
Government. The personal property must be complete within itself; 
does not lose its identity or become a component part of other 
property when put into use; and is of a durable nature with an 
estimated useful life expectancy to exceed two years.
    (d) The Contractor shall submit all annual and quarterly reports 
in the following format, except as stated in paragraph (e) of this 
clause:
    (1) Property shall be grouped by the following property 
classifications:
    (i) Highway motor vehicles;
    (ii) Communications equipment;
    (iii) Information technology (formerly called automated data 
processing) equipment;
    (iv) Reproduction equipment;
    (v) Security equipment;
    (vi) Software;
    (vii) Software-in-development;
    (viii) Medical equipment;
    (ix) Aircraft property; and
    (x) Other depreciable personal property.
    (2) Data elements for each unit of property shall include:
    (i) Contract number: Federal Government contract or purchase 
order number;
    (ii) Task Order number;
    (iii) Property classification: From classification listed in 
paragraph (d)(1) of this clause;

[[Page 76077]]

    (iv) Denotation as either government-furnished property (GFP) or 
contractor-acquired property (CAP) (If from another DOS contract, or 
government agency, please specify);
    (v) Noun name of property (i.e. generator);
    (vi) Description of property;
    (vii) Manufacturer;
    (viii) Model;
    (ix) Serial number;
    (x) National Stock Number if applicable
    (xi) Unique-item identifier or equivalent: such as barcode label 
(tag number) or system-assigned number. For highway motor vehicles, 
this must be the vehicle identification number (VIN);
    (xii) Date received: Date contractor took possession;
    (xiii) Date placed in service;
    (xiv) Acquisition cost (As defined in FAR clause 52.245-1(a)): 
Use estimated fair-market value for property transferred or donated, 
at the time acquired, if actual cost is unknown;
    (xv) Estimated useful life in years: The period during which the 
property is expected to provide the service for which it was 
intended. This should normally be equivalent to the depreciation 
schedule;
    (xvi) Current location of the property: Country and city;
    (xvii) Disposal Date;
    (xviii) Disposal Method;
    (e) The Contractor shall submit a full property report, as 
described in this clause, including affirmation, for the report 
covering the first quarter of the base contract. Thereafter, 
submission of reports shall follow the time frames outlined in 
paragraph (h) below. Quarterly property reports, other than the 
annual report, may be either full property reports or only updates 
to the full property report. Quarterly reports do not require 
affirmations even when the Contractor chooses to submit a full 
property report. Affirmations are only required for the report 
covering the first quarter of the contract and the annual report for 
each subsequent option year of the contract. If the Contractor 
submits a full property report, dispositions subsequent to any 
previous report must also be identified in the report. If a 
Contractor submits a quarterly report in the form of an update, the 
update shall include acquisitions and dispositions.
    (f) The Contractor shall provide any required affirmation in the 
following format. The affirmation shall be signed by the 
Contractor's managerial personnel (as defined in FAR clause 52.245-
1):
    ``I hereby affirm that a physical inventory of the government 
property (as defined in Federal Acquisition Regulation (FAR) 45.101) 
of Department of State contract number (insert contract number) has 
been completed as of (insert date), the inventory has been 
reconciled to our records and the property information in our 
report, and that to the best of my knowledge and belief, this 
inventory is accurate, current, and complete.
Signed:
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Printed:
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Title:
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Date:
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    (g) In addition to the information required above, the 
Contractor shall include in all property reports:
    (1) The current degree to which properly qualified Government 
personnel have evaluated the Contractor's property management system 
as being an adequate property management system;
    (2) The name, mailing address, telephone number, and email 
address of the qualified Government person(s) who performed the 
evaluation of the Contractor's property management system; and
    (3) The cognizant contractor government property manager.
    (h) Reports shall cover the following time periods and are due 
on the following dates:

------------------------------------------------------------------------
            Report                  Period covered          Due date
------------------------------------------------------------------------
1st Quarter Report............  For 1st quarter ending  January 15.
                                 December 31.
2nd Quarter Report (Annual      For 2nd quarter ending  April 30.
 Property Report).               March 31.
3rd Quarter Report............  For 3rd quarter ending  July 15.
                                 June 30.
4th Quarter Report............  For 4th quarter ending  October 8.
                                 September 30.
------------------------------------------------------------------------

    (i) The Contractor shall send a copy of all reports to the 
individuals listed below. The Contractor shall submit reports in 
electronic format as an attachment to an email. The affirmation 
described in paragraph (f) of this clause shall be in Adobe Acrobat 
(.pdf) format (including the signature), while the inventories, both 
quarterly and annual, shall be in Microsoft Excel format (Adobe 
Acrobat and Microsoft Excel versions shall be compatible with 
versions used by DOS). Send all reports to:
    (1) The contracting officer;
    (2) The Property Administrator;
    (3) The contracting officer's representative (COR);
    (4) Propertyreports@state.gov;
    (5) RM-FPRA-PROP@state.gov; and
    (6) All individuals listed below (if any):
[contracting officer shall list individuals, if any].
    (j) The Contractor shall cooperate by responding timely to all 
follow up questions and requests for supporting documentation 
whether requested by the Department or external auditors.

(End of clause)

    Dated: November 26, 2013.
Corey M. Rindner,
Procurement Executive, Department of State.
[FR Doc. 2013-29861 Filed 12-13-13; 8:45 am]
BILLING CODE 4710-24-P
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