Federal Register / Vol. 87, No. 34 / Friday, February 18, 2022 / Proposed Rules 9303 

as follows: I, (Name of Governor or 

designee), (ADD TITLE on behalf of the) 

Governor of the (State or 

Commonwealth) of ll, do hereby 

certify that I am opposed to the 

enactment or enforcement of a law that 

conforms to 23 U.S.C. 159(a)(3)(A) and 

that the legislature of the (State or 

Commonwealth) of ll, has adopted a 

resolution expressing its opposition to 

such a law. 

(2) Until a State has been determined 

to be in compliance with the 

requirements of 23 U.S.C. 159(a)(3)(B) 

and this regulation, the certification 

shall include a copy of the resolution. 

(d) The Governor or their designee 

shall submit an electric copy of the 

certification to its respective FHWA 

Division Administrator. The FHWA 

Division Administrator shall retain an 

electronic copy and forward an 

electronic copy to both the FHWA 

Office of Safety and the FHWA Office of 

the Chief Counsel. 

(e) Any changes to the certification or 

supplemental information necessitated 

by the review of the certifications as 

they are forwarded, State legislative 

changes that affects State compliance of 

this section, or changes in State 

enforcement activity shall be submitted 

within 90 days of the change being 

effective. 

§ 192.6 Period of availability of withheld 

funds. 

Funds withheld under § 192.4 from 

apportionment to any State will not be 

available for apportionment to the State 

and shall lapse immediately. 

§ 192.7 Procedures affecting States in 

noncompliance. 

(a) If FHWA determines that the State 

is not in compliance with 23 U.S.C. 

159(a)(3), the State will be advised of 

the funds expected to be withheld under 

§ 192.4 from apportionment, as part of 

the advance notice of apportionments 

required under 23 U.S.C. 104(e). This 

notification will normally occur not 

later than 90 days before the beginning 

of the fiscal year for which the sums to 

be apportioned are authorized. The 

State may, within 30 days of its receipt 

of the advance notice of 

apportionments, submit documentation 

demonstrating its compliance. 

Documentation shall be submitted 

electronically to the FHWA Division 

Administrator for that State. The FHWA 

Division Administrator shall retain an 

electronic copy and forward an 

electronic copy to both the FHWA 

Office of Safety and the FHWA Office of 

the Chief Counsel. 

(b) Each fiscal year, each State 

determined not to be in compliance 

with 23 U.S.C. 159(a)(3), based on 

FHWA’s final determination, will 

receive notice of the funds being 

withheld under § 192.4 from 

apportionment, as part of the 

certification of apportionments required 

under 23 U.S.C. 104(e), which normally 

occurs on October 1 of each fiscal year. 

[FR Doc. 2022–03172 Filed 2–17–22; 8:45 am] 

BILLING CODE 4910–22–P 

GENERAL SERVICES 

ADMINISTRATION 

41 CFR Part 102–39 

[FMR Case 2019–102–01; Docket No. GSA– 

FMR–2019–0015; Sequence No. 1] 

RIN 3090–AK11 

Federal Management Regulation; 

Replacement of Personal Property 

Pursuant to the Exchange/Sale 

Authority 

AGENCY: Office of Government-wide 

Policy, General Services Administration 

(GSA). 

ACTION: Proposed rule. 

SUMMARY: GSA is proposing to amend 

the Federal Management Regulation 

(FMR) to clarify the exchange/sale 

provisions to improve the application of 

this important authority across Federal 

agencies. The related FMR part 

Replacement of Personal Property to the 

Exchange/Sale Authority was last 

revised November 1, 2011. 

DATES: Interested parties should submit 

comments in writing on or before April 

19, 2022. 

ADDRESSES: Submit comments in 

response to FMR Case 2019–102–01 to 

Regulations.gov at https://

www.regulations.gov. Enter ‘‘FMR Case 

2019–102–01’’ under the heading ‘‘Enter 

Keyword or ID’’ and select ‘‘Search’’. 

Select the link ‘‘Submit a Comment’’ 

that corresponds with ‘‘FMR Case 2019– 

102–01’’. Follow the instructions 

provided at the ‘‘Comment Now’’ 

screen. Please include your name, 

company name (if any), and ‘‘FMR Case 

2019–102–01’’ on your attached 

document. 

All comments received will be posted 

without change, including any personal 

and/or business confidential 

information provided. To confirm 

receipt of your comment(s), please 

check https://www.regulations.gov 

approximately two to three days after 

submission to verify posting. 

FOR FURTHER INFORMATION CONTACT: For 

clarification of content, contact William 

Garrett, Director, Personal Property 

Policy Division, Office of Governmentwide Policy, Office of Asset and 

Transportation Management (MA), at 

202–368–8163 or william.garrett@

gsa.gov. For information pertaining to 

status or publication schedules, contact 

the Regulatory Secretariat (MVCB), 202– 

501–4755. Please cite FMR Case 2019– 

102–01. 

SUPPLEMENTARY INFORMATION: 

A. Authority and Background of This 

Program 

Personal property includes a wide 

variety of Government items such as 

computers, office equipment, furniture, 

and vehicles, as well as more 

specialized items specific to agencies, 

such as medical equipment for the U.S. 

Department of Veterans Affairs (VA) and 

medical helicopters for the U.S. Army. 

The Federal Government owns and 

manages more than a trillion dollars of 

personal property. In Fiscal Year (FY) 

2020, Federal agencies reported 

approximately $1.9 trillion in 

capitalized personal property assets 

under their control. Over time, agencies’ 

personal property may no longer 

adequately perform the task for which it 

was acquired. 40 United States Code 

(U.S.C.) § 503 authorizes agencies to 

exchange (trade-in) or sell such property 

still needed to meet mission needs and 

apply the exchange allowance or sale 

proceeds to acquire similar replacement 

property. 

Such transactions are known as 

personal property ‘‘exchange/sale’’ 

transactions. These transactions 

facilitate the replacement of personal 

property by allowing agencies to offset 

the cost of new, similar property, 

resulting in savings to agency funds. 

Without this authority, agencies would 

have to expend the full purchase price 

of new personal property from 

appropriations, while depositing the 

proceeds from the disposition of worn 

property in the U.S. Treasury. Because 

exchange/sale transactions provide 

agencies with opportunities to save 

costs, it is important that agencies using 

this authority establish policies, 

processes, and procedures with effective 

controls, in order to ensure that they 

meet applicable requirements and are 

good stewards of Government resources. 

GSA’s regulations at 41 Code of 

Federal Regulations (CFR) Part 102–39 

describe the terms, conditions, and 

reporting requirements for exchanges 

and sales of personal property. The 

personal property exchange/sale 

authority in FMR § 102–39.60 allows 

agencies to replace property that is not 

excess or surplus, i.e., the property is 

still needed to meet the agency’s 

continuing mission. In addition, 


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agencies must meet the following 

requirements to use the exchange/sale 

authority: 

• The property exchanged or sold is 

similar to the property acquired. 

• The personal property exchanged or 

sold was not acquired for the principal 

purpose of later exchanging it or selling 

it using the authority. For example, an 

agency cannot purchase a more costly 

piece of equipment than necessary to 

meet mission needs for the sole reason 

that it will deliver a higher value when 

sold using this exchange/sale authority. 

• Proceeds from the sale can only be 

put toward the purchase of similar 

replacement property and cannot be 

used for services. In other words, an 

agency can use proceeds from the sale 

of a vehicle to purchase a new vehicle, 

but it cannot use proceeds to hire a 

mechanic to repair an existing vehicle. 

• Proceeds from sale are available 

during the same fiscal year (FY) the 

property was sold and the following FY 

for replacement property. This means 

that for an item sold in FY 2021, an 

agency has the rest of FY 2021, as well 

as FY 2022 to purchase a replacement 

item. If agencies do not spend these 

funds by the end of the next FY, monies 

are to be deposited in the U.S. Treasury 

as miscellaneous receipts, except as 

otherwise authorized by law. Such legal 

authority may, for example, take the 

form of an authorized revolving fund 

where the rules of the program allow 

use of funds beyond the restrictions of 

the FMR. 

• Agencies are prohibited from using 

the authority to replace certain types of 

property as detailed in FMR § 102–39.60 

(weapons, nuclear ordinances, etc.). 

Agencies may choose between two 

transaction methods to replace property, 

the exchange (trade-in) method or the 

sale method, but must determine which 

method provides the greatest return to 

the Government, including factoring in 

administrative and overhead expenses. 

A typical exchange occurs when the 

original manufacturer delivers a 

replacement item to the agency and 

removes the item being replaced. The 

manufacturer applies a trade-in credit 

(an allowance) for the purchase of the 

replacement item. If the sale method is 

used, the agency receives the sale 

proceeds for the sale of the item and 

applies those proceeds to the purchase 

of the replacement personal property. 

If contemplating an exchange/sale, 

agencies are guided to follow a process 

similar to the disposal process for 

excess property by making it available 

to other Federal agencies and state 

agencies by posting it to GSAXcess at 

https://gsaxcess.gov/. This is GSA’s 

website for reporting, searching, and 

selecting property. This process allows 

other Federal agencies or state agencies 

to obtain the property for the price 

required by the reporting agency to help 

fund the acquisition of replacement 

property under the exchange/sale 

authority. 

Agencies are required to submit a 

summary report to GSA through the 

GSA Personal Property Reporting Tool 

(PPRT), https://

www.property.reporting.gov/PPRT/ 

PPRTLogin, at the end of each FY on the 

type, the quantity, the exchange 

allowances and/or sale proceeds, as 

applicable, and the original acquisition 

cost of items for both exchange and sale 

transactions. Agencies with no 

transactions during a FY must submit a 

negative report. Ultimately, agencies 

decide whether to use the exchange/sale 

authority to replace property in their 

inventories. 

B. Changes Proposed by This Rule and 

Expected Impact 

In 2018, the Government 

Accountability Office (GAO) Report 19– 

33, ‘‘GSA and VA Have Opportunities to 

Improve the Exchange/Sale Process’’, 

identified confusion among some 

agencies on the use of the exchange/sale 

authority which could be alleviated by, 

among other actions, revising FMR Part 

102–39. In addition to amending the 

exchange/sale regulations found in FMR 

Part 102–39 with this rule, GSA 

published FMR Bulletin B–48, 

‘‘Exchange/Sale Financial Accounting,’’ 

December 18, 2018, and other guidance, 

frequently asked questions, best 

practices, and deviation request 

procedures all of which can be found at 

www.gsa.gov/exchangesale. 

• GSA is proposing to revise the 

definition of ‘‘similar’’ in FMR § 102– 

39.20 to more narrowly tailor one of the 

criteria of ‘‘similar’’ to require that 

replacement property fall within a 

defined Federal Supply Classification 

(FSC), which can be found at https://

public.logisticsinformation

service.dla.mil/H2/search.aspx, as 

opposed to an FSC Group. A FSC Group 

is a two-digit number that categorizes 

types of property, whereas a FSC is a 

four-digit number that further 

categorizes types of property within the 

FSC Group. For example, FSC Group 12 

is for Fire Control Equipment. Within 

FSC Group 12, there are FSCs that 

further categorize this type of property, 

e.g., FSC 1210—Fire Control Directors. 

GSA observes that not all property 

within the same broad FSC Group 

would reasonably be considered 

‘‘similar.’’ Further, another criterion to 

meet the definition of ‘‘similar’’ is being 

updated to reflect that items will be 

deemed to be ‘‘similar’’ for the purposes 

of an exchange/sale transaction if the 

assets are designed or constructed for 

the same general purpose, regardless of 

the assigned FSC. Only one of the 

criteria in this definition needs to be 

met for the property to be considered 

‘‘similar’’ and eligible for an exchange/ 

sale transaction. 

• Amend FMR § 102–39.25 to allow 

all provisions in this part to be subject 

to deviation except for those mandated 

by statute and FMR § 102–39.80. 

• Amend the question in FMR § 102– 

39.40 and clarify the difference between 

the exchange/sale authority and the 

more frequently used excess/surplus 

disposal process. The primary 

difference is that personal property 

disposal under the excess/surplus 

process does not allow for the use of 

proceeds or allowances (if any), in 

acquiring replacement similar assets. 

Exchange/sale property is replacement 

property that is non-excess and nonsurplus, meaning the agency has a 

continuing need for the property, but 

the specific item(s) are no longer 

suitable to the need and must be 

replaced, and therefore are not reported 

to GSA as excess or surplus for transfer 

or donation purposes. 

• Revise the ‘‘prohibited list’’ at FMR 

§ 102–39.60 by removing FSC Groups 

42, Firefighting, rescue, and safety 

equipment; 51, Hand tools; and 54, 

Prefabricated structure and scaffolding 

(FSC 5410 Prefabricated and Portable 

Buildings, FSC 5411 Rigid Wall 

Shelters, and FSC 5419 Collective 

Modular Support System only). The 

restrictions remaining in this section 

involve assets which are inherently 

dangerous or pose a significant public 

health or safety concern. 

• Remove ‘‘. . . , except medicinal 

chemicals’’ from FMR § 102–39.60 as 

these are categorized under FSG 65, not 

FSG 68. 

• Amend FMR § 102–39.65 to clarify 

that an exchange or sale under this FMR 

part may occur after the acquisition of 

the replacement property. For example, 

if a Magnetic Resonance Imaging (MRI) 

machine is needed for use daily, the 

replacement machine may be acquired 

and installed before the existing 

machine is removed and exchanged or 

sold. If the existing machine is sold, in 

accordance with agency policy, the 

funds may be returned to the 

appropriation used to acquire the 

replacement machine. If the existing 

machine is exchanged, in accordance 

with agency policy, the agency 

agreement with the entity providing the 

replacement must document the 

responsibilities of both parties to 

execute this transaction. 


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Federal Register / Vol. 87, No. 34 / Friday, February 18, 2022 / Proposed Rules 9305 

• Update FMR § 102–39.80 by adding 

parallel language from the edits to FMR 

§ 102–39.25 that states that no 

deviations will be granted to this 

section. 

• Update the reporting policy and 

processes in FMR § 102–39.85 to reflect 

the use of a new online reporting tool 

and reporting requirements. 

• Add FMR § 102–39.90 in 

accordance with the recommendations 

of GAO Report 19–33 to provide 

additional guidance to agencies, such as 

reminding agencies of the publication of 

Bulletin B–48 and the guidance 

available at the GSA website on this 

exchange/sale topic. 

According to GSA’s annual summary 

data, 27 agencies reported using the 

exchange/sale authority and received a 

total of about $2.8 billion in exchange 

allowances or sale proceeds from fiscal 

year 2016 through fiscal year 2020. 

While many agencies used the 

authority, a few agencies, particularly 

GSA, together accounted for about 88 

percent of all allowances and proceeds. 

Specifically, 5 of 27 agencies reported 

nearly all exchange allowances and sale 

proceeds. GSA accounted for about $1.5 

billion of about $2.8 billion (or about 55 

percent) of reported allowances and 

proceeds across the federal government. 

Four other agencies—the Departments 

of Homeland Security, Agriculture, 

Defense, and the Interior—accounted for 

about $899 million (or about 32 percent) 

of the total. The other 22 agencies using 

the authority reported about $340 

million (or about 12 percent) in 

exchange allowances or sales proceeds 

over the 5-year period. Finally, agencies 

reported using the sale method more 

than the exchange method. Sales by 

agencies accounted for about $2.5 

billion (or about 91 percent), while use 

of the exchange method accounted for 

about $247 million (or about 9 percent) 

of total transactions reported, primarily 

due to GSA’s reporting more use of the 

sale method over the exchange method. 

While some agencies reported 

hundreds of millions of dollars in 

exchange allowances and sale proceeds, 

the data show that 8 federal agencies— 

including the Department of Labor and 

the Office of Personnel Management— 

reported relatively few transactions, 

which totaled less than $200,000 in 

exchange allowances and sales 

proceeds. 

By using the exchange/sale authority, 

agencies have an opportunity to be good 

stewards of government property by 

efficiently replacing needed property, 

including high-value items, that serves 

critical and continuing requirements to 

meet agency missions. GSA expects 

these proposed amendments to increase 

agency flexibility and understanding of 

this program. GSA believes these 

proposed amendments will help 

agencies take better advantage and 

increase the use of this authority, 

thereby becoming more effective 

stewards of government property and 

replenishing property more efficiently. 

C. 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 proposed rule is not 

anticipated to be a significant regulatory 

action, and therefore, was not subject to 

review under Section 6(b) of E.O. 12866, 

Regulatory Planning and Review, dated 

September 30, 1993. 

D. Congressional Review Act 

OIRA has determined that this rule is 

not a ‘‘major rule’’ as defined by 5 

U.S.C. 804(2). Additionally, this rule is 

excepted from Congressional Review 

Act reporting requirements prescribed 

under 5 U.S.C. 801 since it relates to 

agency management or personnel. 

E. Regulatory Flexibility Act 

This proposed rule will not have a 

significant economic impact on a 

substantial number of entities within 

the meaning of the Regulatory 

Flexibility Act, 5 U.S.C. 601, et seq. 

F. Paperwork Reduction Act 

The Paperwork Reduction Act does 

not apply because the changes to the 

FMR do not impose recordkeeping or 

information collection requirements, or 

the collection of information from 

offerors, contractors, or members of the 

public that require the approval of the 

Office of Management and Budget under 

44 U.S.C. 3501, et seq. Reporting 

requirements are only addressed to 

Federal agencies regarding their Federal 

personal property transactions. 

List of Subjects in 41 CFR Part 102–39 

Replacement of personal property 

pursuant to the exchange/sale authority; 

Government property management; 

surplus Government property. 

Krystal J. Brumfield, 

Associate Administrator, Office of 

Government-wide Policy. 

For the reasons set forth in the 

preamble, GSA proposes to amend 41 

CFR part 102–39 as set forth below: 

■ 1. The authority for part 102–39 

continues to read as follows: 

Authority: 40 U.S.C. 121(c); 40 U.S.C. 503. 

PART 102–39—REPLACEMENT OF 

PERSONAL PROPERTY PURSUANT 

TO THE EXCHANGE/SALE AUTHORITY 

■ 2. Amend § 102–39.20, in the 

definition of ‘‘Similar,’’ by revising 

paragraphs (2) and (4) to read as follows: 

§ 102–39.20 What definitions apply to this 

part? 

* * * * * 

Similar * * * 

(2) Fall within a single Federal 

Supply Classification (FSC) (includes 

any and all forms of property within an 

FSC); or 

* * * * * 

(4) Are designed or constructed for 

the same general purpose (includes any 

and all forms of property regardless of 

the FSC to which they are assigned). 

Note 1 to § 102–39.20: Only one of the 

criteria in this definition needs to be met for 

the property to be considered ‘‘similar’’ and 

eligible for an exchange/sale transaction. 

* * * * * 

■ 3. Revise § 102–39.25 to read as 

follows: 

§ 102–39.25 Which exchange/sale 

provisions are subject to deviation? 

All of the provisions in this part are 

subject to deviation (upon presentation 

of adequate justification) except for 

those mandated by statute, as described 

in the Note to § 102–39.60(a), and § 102– 

39.80. See the link on ‘‘Exchange/Sale’’ 

at www.gsa.gov/personalpropertypolicy 

for additional information on requesting 

deviations from this part. 

■ 4. Revise § 102–39.40 to read as 

follows: 

§ 102–39.40 How does the exchange/sale 

authority differ from the disposal process 

for excess/surplus personal property? 

(a) The primary difference from your 

perspective is that sales proceeds or 

exchange allowances may be used to 

acquire similar replacement personal 

property that is still needed under the 

exchange/sale authority as described in 

this part; whereas under the more 

frequently used excess/surplus disposal 

process, you would not be able to use 

sales proceeds or exchange allowances 


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9306 Federal Register / Vol. 87, No. 34 / Friday, February 18, 2022 / Proposed Rules 

to acquire replacement personal 

property. 

(b) Your use of the exchange/sale 

authority is optional and should be 

considered when needed replacement 

assets may be acquired under the 

provisions of this part. If exchange/sale 

is not practicable (for example, if 

conducting an exchange/sale transaction 

is not cost effective), you should dispose 

of the property through the excess/ 

surplus disposal process by reporting 

the property as excess, as addressed in 

Part 102–36 of this chapter. 

(c) In the excess/surplus disposal 

process, any net proceeds from the sale 

of surplus property generally must be 

forwarded to the miscellaneous receipts 

account at the United States Treasury, 

and thus would not be available to you 

for use in acquiring similar replacement 

property or for any other purpose. You 

may use the exchange/sale authority in 

the acquisition of personal property 

even if the acquisition is under a 

services contract, as long as the property 

acquired under the services contract is 

similar to the property exchanged or 

sold (e.g., for a service life extension 

program (SLEP), exchange allowances or 

sales proceeds would be available for 

replacement of similar items, but not for 

services). 

■ 5. Amend § 102–39.60 by revising 

paragraph (a) to read as follows: 

§ 102–39.60 What restrictions and 

prohibitions apply to the exchange/sale of 

personal property? 

* * * * * 

(a) The following FSC Groups of 

personal property: 

10 Weapons. 

11 Nuclear ordinance. 

44 Furnace, Steam Plant, and Drying 

Equipment; and Nuclear Reactors 

(FSC Class 4470, Nuclear Reactors 

only). 

68 Chemical and chemical products. 

84 Clothing, individual equipment, and 

insignia. 

Note to 102–39.60(a): Under no 

circumstances will deviations be granted for 

FSC Class 1005, Guns through 30mm. 

Deviations are not required for Department of 

Defense (DoD) property in FSC Groups 10 

(for classes other than FSC Class 1005), or 

any other FSC Group, for which the 

applicable DoD demilitarization 

requirements and any other applicable 

regulations and statutes are met. 

* * * * * 

■ 6. Amend § 102–39.65 by— 

■ a. Removing ‘‘and’’ at the end of 

paragraph (d); 

■ b. Redesignating paragraph (e) as 

paragraph (f); and 

■ c. Adding a new paragraph (e). 

The addition reads as follows: 

§ 102–39.65 What conditions apply to the 

exchange/sale of personal property? 

* * * * * 

(e) Your agency documents at the time 

of exchange or sale (or at the time of 

acquiring the replacement property if 

acquisition precedes the exchange or 

sale) that the exchange allowance or sale 

proceeds will be applied to the 

acquisition of replacement property; 

and 

* * * * * 

■ 7. Amend § 102–39.80 by adding a 

sentence at the end of the section to 

read as follows: 

§ 102–39.80 What are the accounting 

requirements for exchange allowances or 

proceeds of sale? 

* * * Under no circumstances will 

deviations be granted to for § 102–39.80. 

■ 8. Revise § 102–39.85 to read as 

follows: 

§ 102–39.85 What information am I 

required to report? 

You must submit, within 90 calendar 

days after the close of each FY, an 

exchange/sale report using the online 

Personal Property Reporting Tool 

template found at https://

www.property.reporting.gov/PPRT/ 

PPRTlogin. This template provides the 

specific information needed for your 

agency’s report. You can contact the 

GSA Help Desk at help.PPRT@gsa.gov if 

you need assistance accessing the online 

reporting tool. All reports, including 

negative reports, must be submitted 

electronically through the Personal 

Property Reporting Tool. Transactions 

involving books and periodicals in your 

libraries need not be reported. 

■ 9. Add § 102–39.90 to read as follows: 

§ 102–39.90 Where do I obtain additional 

information? 

Additional information is provided at 

the GSA websites www.gsa.gov/bulletin 

and www.gsa.gov/exchangesale. 

[FR Doc. 2022–03379 Filed 2–17–22; 8:45 am] 

BILLING CODE 6820–14–P 


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