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[Federal Register: August 30, 2010 (Volume 75, Number 167)]
[Proposed Rules]               
[Page 52917-52921]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr30au10-23]                         

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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 211, 246, and 252

 
Defense Federal Acquisition Regulation Supplement (DFARS); 
Warranty Tracking of Serialized Items, DFARS Case 2009-D018

AGENCY: Defense Acquisition Regulations System, Department of Defense 
(DoD).

ACTION: Proposed rule with request for comments.

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SUMMARY: DoD is proposing to amend the Defense Federal Acquisition 
Regulation Supplement (DFARS) to implement a policy memorandum of the 
Undersecretary of Defense for Acquisition, Technology, and Logistics 
dated February 6, 2007, that required definition of the requirements to 
track warranties for items subject to Item Unique Identification in the 
Item Unique Identification registry. This proposed rule stresses that 
the enforcement of warranties is essential to the effectiveness and 
efficiency of DoD's material readiness.

DATES: Comments on this proposed rule should be submitted in writing to 
the address shown below on or before October 29, 2010, to be considered 
in the formation of the final rule.

ADDRESSES: You may submit comments, identified by DFARS Case 2009-D018, 
using any of the following methods:
    Federal eRulemaking Portal: http://www.regulations.gov. Follow the 
instructions for submitting comments.
    E-mail: dfars@osd.mil. Include DFARS Case 2009-D018 in the subject 
line of the message.
    Fax: 703-602-0350.
    Mail: Defense Acquisition Regulations System, Attn: Mr. Julian E. 
Thrash, 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.

FOR FURTHER INFORMATION CONTACT: Mr. Julian E. Thrash, 703-602-0310.

SUPPLEMENTARY INFORMATION:

A. Background

    The Undersecretary of Defense for Acquisition, Technology, and 
Logistics issued a policy memorandum dated February 6, 2007, that 
instructed the Director, Defense Procurement and Acquisition Policy, to 
define the requirements to track warranties for items subject to Item 
Unique Identification (IUID) in the IUID registry. This proposed rule 
addresses the requirement to more effectively track warranties for IUID 
items.
    The tracking of warranties, from the identification of the 
requirement to the expiration date of the warranted item, will enhance 
significantly the ability of DoD to take full advantage of warranties 
when they are part of an acquisition. Presently, DoD lacks the 
enterprise capability that would provide visibility and accountability 
of warranty data associated with acquired goods. The capability to 
track warranties will result in--
    (a) Reduced costs;
    (b) Ability to recognize benefits included for free;
    (c) Ability to compare performance against Government specified 
warranties;
    (d) Increased level of insurance for purchased goods;
    (e) Sufficient durations of warranties for specific goods;
    (f) Ability to identify and enforce warranties (e.g., against 
fraudulent vendors, or for criminal actions).
    DoD proposes the following changes:
     Revise DFARS 211.274-2(a)(4), Policy for unique item 
identification, to add any warranted item.
     Revise the definitions of ``acceptance'' and ``defect,'' 
and add a definition for ``warranty tracking'' at DFARS 246.701.
     Add DFARS 246.710(5) to include provision and clause 
prescriptions 252.246-70XX and 252.246-70YY.
     Revise DFARS 252.211-7003, Item Identification and 
Valuation, definition of ``issuing agency.''
     Add provision 252.246-70XX, Notice of Warranty Tracking of 
Serialized Items.
     Add clause 252.246-70YY, Warranty Tracking of Serialized 
Items.
    This is not a significant regulatory action and, therefore, was not 
subject to review under section 6(b) of Executive Order 12866, 
Regulatory Planning and Review, dated September 20, 1993. This is not a 
major rule under 5 U.S.C. 804.

B. Regulatory Flexibility Act

    DoD has prepared an initial regulatory flexibility analysis 
consistent with 5 U.S.C. 603 et seq. A copy of the analysis may be 
obtained from the point of contact specified herein. The objective of 
this rule is for DoD to develop a more effective way to track 
warranties for items subject to Item Unique Identification (IUID). 
Presently, DoD lacks the enterprise capability that would provide 
visibility and accountability of warranty data

[[Page 52918]]

associated with acquired goods. The tracking of warranties, from the 
identification of the requirement to the expiration date of the 
warranted item, will enhance significantly the ability of DoD to take 
full advantage of warranties when they are part of an acquisition, 
resulting in-
    (a) Reduced costs;
    (b) Ability to recognize benefits included for free;
    (c) Ability to compare performance against Government specified 
warranties;
    (d) Sufficient durations of warranties for specific goods.
    DoD will address the requirement to track warranties with the 
following DFARS provision and clause:
    (1) 252.246-70XX, Notice of Warranty Tracking of Serialized Items;
    (2) 252.246-70YY, Warranty Tracking of Serialized Items.
    In FY 2009, DoD issued approximately 16,000 solicitations that use 
warranty clauses. In response to those solicitations, approximately 
76,000 offers would be received (66,000 from small business, 10,000 
from other than small business). Of that total, DoD estimates that 50% 
of the time the Government will provide the required warranty 
information for 38,000 offers (33,000 small and 5,000 other than small 
businesses). Therefore, 33,000 small entities would be impacted by the 
rule.
    DoD invites comments from small concerns and other interested 
parties on the impact of this rule on small entities. DoD will also 
consider comments from small entities concerning the existing 
regulations in subparts affected by this rule in accordance with 5 
U.S.C. 610. Interested parties must submit such comments separately and 
should cite 5 U.S.C. 610 (DFARS case 2009-D018), in correspondence.

C. Paperwork Reduction Act

    The Paperwork Reduction Act (44 U.S.C. Chapter 35) applies because 
the proposed rule does contain information collection requirements. DoD 
invites comments on the following aspects of the proposed rule: (a) 
Whether the collection of information is necessary for the proper 
performance of the functions of DoD, including whether the information 
will have practical utility; (b) the accuracy of the estimate of the 
burden of the information collection; (c) ways to enhance the quality, 
utility, and clarity of the information to be collected; and (d) ways 
to minimize the burden of the information collection on respondents, 
including the use of automated collection techniques or other forms of 
information technology. The following is a summary of the information 
collection requirement.
    Title: Defense Federal Acquisition Regulation Supplement; Warranty 
Tracking of Serialized Items.
    Type of Request: New collection.
    Number of Respondents: 38,000.
    Responses per Respondent: Approximately 1.4.
    Annual Responses: 54,000.
    Average Burden Per Response: 0.5 hour.
    Annual Public Burden Hours: 27,000.
    Needs and Uses: DoD needs the information required by 252.246-70XX 
and 252.246-70YY in order to properly track the warranty of serialized 
items.
    Affected Public: Businesses or other for-profit institutions.
    Respondent's Obligation: Required to obtain or retain benefits.
    Frequency: On occasion.
    Written comments and recommendations on the proposed information 
collection should be sent to Ms. Jasmeet Seehra at the Office of 
Management and Budget, Desk Officer for DoD, Room 10236, New Executive 
Office Building, Washington, DC 20503, with a copy to the Defense 
Acquisition Regulations System, Attn: Mr. Julian E. Thrash, OUSD(AT&L) 
DPAP/DARS, Room 3B855, 3060 Defense Pentagon, Washington, DC 20301-
3060. Comments can be received from 30 to 60 days after the date of 
this notice, but comments to OMB will be most useful if received by OMB 
within 30 days after the date of this notice.
    To request more information on this proposed information collection 
or to obtain a copy of the proposal and associated collection 
instruments, please write to the Defense Acquisition Regulations 
System, Attn: Mr. Julian E. Thrash, OUSD(AT&L) DPAP/DARS, Room 3B855, 
3060 Defense Pentagon, Washington, DC 20301-3060.

List of Subjects in 48 CFR Parts 211, 246, and 252

    Government procurement.

Ynette R. Shelkin,
Editor, Defense Acquisition Regulations System.

    Therefore, DoD proposes to amend 48 CFR parts 211, 246, and 252 as 
follows:
    1. The authority citation for 48 CFR parts 211, 246, and 252 
continues to read as follows:

     Authority:  41 U.S.C. 421 and 48 CFR chapter 1.

PART 211--DESCRIBING AGENCY NEEDS

    2. Amend section 211.274-2 by revising paragraphs (a)(4)(i) and 
(a)(4)(ii) and by adding paragraph (a)(4)(iii) as follows:

Sec.  211.274-2  Policy for unique item identification.

* * * * *
    (a) * * *
    (4) * * *
    (i) Any DoD serially managed subassembly, component, or part 
embedded within a delivered item;
    (ii) The parent item (as defined in 252.211-7003(a)) that contains 
the embedded subassembly, component, or part; and
    (iii) Any warranted item.
* * * * *

PART 246--QUALITY ASSURANCE

    3. Revise section 246.701 to read as follows:

Sec.  246.701  Definitions.

    As used in this subpart--
    Acceptance, as used in the warranty clauses at FAR 52.246-17, 
Warranty of Supplies of a Noncomplex Nature; FAR 52.246-18, Warranty of 
Supplies of a Complex Nature; FAR 52.246-19, Warranty of Systems and 
Equipment Under Performance Specifications or Design Criteria; and FAR 
52.246-20, Warranty of Services, includes the execution of an official 
document (e.g., DD Form 250, Material Inspection and Receiving Report) 
by an authorized representative of the Government.
    Defect means any condition or characteristic in any supply or 
service furnished by the contractor under the contract that is not in 
compliance with the requirements of the contract.
    Warranty tracking is defined in the clause 252.246-70YY, Warranty 
Tracking of Serialized Items.
    4. Amend section 246.710 by revising the section heading and adding 
paragraph (5) to read as follows:

Sec.  246.710  Solicitation provision and contract clauses.

* * * * *
    (5)(i) In addition to 252.211-7003, Item Unique Valuation, which is 
prescribed in 211.274-5(a), use the following provision and clause in 
solicitations and contracts when it is anticipated that the resulting 
contract will include a warranty for serialized items:
    (A) 252.246-70XX, Notice of Warranty Tracking of Serialized Items 
(include only if offerors will be required to enter data with the 
offer); and
    (B) 252.246-70YY, Warranty Tracking of Serialized Items.
    (ii) If the Government specifies a warranty, then the contracting 
officer shall request the requiring activity to

[[Page 52919]]

provide information to ensure that Table I in the clause 252.246-70YY 
is populated with data specifying the Government's required warranty 
provision by contract line item number, subline item number, or exhibit 
line item number prior to solicitation. In such case, do not include 
252.246-70XX in the solicitation.
    (iii) If the Government does not specify a warranty, include 
252.246-70XX in the solicitation. The contractor may offer a warranty 
and shall then populate Table I in the clause 252.246-70YY, as 
appropriate, as part of its offer as required by 252.246-70XX.
    (iv) All warranty tracking information that is indicated with a 
single asterisk (*) in Table I in the clause 252.246-70YY shall be 
completed prior to award. Data indicated with two asterisks (**) may be 
completed on or after the time of award, but no later than the time of 
delivery.
    (v) The contractor shall provide warranty repair source 
instructions (Table II in the clause 252.246-70YY) no later than the 
time of delivery.

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

    5. Amend section 252.211-7003 by revising the clause date to read 
``(XXX 2010)'' and, at paragraph (a), by revising the definition of 
``issuing agency'' to read as follows:

Sec.  252.211-7003  Item Identification and Valuation.

* * * * *
    (a) * * *
* * * * *
    Issuing agency means an organization responsible for assigning a 
non-repeatable identifier to an enterprise (e.g., Dun & Bradstreet's 
Data Universal Numbering System (DUNS) Number, GS1 Company Prefix, 
Allied Committee 135 NATO Commercial and Government Entity (NCAGE)/
Commercial and Government Entity (CAGE) Code, or the Coded 
Representation of the North American Telecommunications Industry 
Manufacturers, Suppliers, and Related Service Companies (ATIS-0322000) 
Number), European Health Industry Business Communication Council 
(EHIBCC) and Health Industry Business Communication Council (HIBCC), as 
indicated in the Register of Issuing Agency Codes for ISO/IEC 15459, 
located at http://www.nen.nl/web/Normen-ontwikkelen/ISOIEC-15459-Issuing-Agency-Codes.htm.
    6. Add section 252.246-70XX to read as follows:

Sec.  252.246-70XX   Notice of Warranty Tracking of Serialized Items.

    As prescribed in 246.710(5)(i)(A), use the following provision:

Notice of Warranty Tracking of Serialized Items (XXX 2010)

    (a) Definition. ``Unique item identifier'' and ``warranty 
tracking'' are defined in the clause at 252.246-70YY, Warranty 
Tracking of Serialized Items.
    (b) Reporting of data for warranty tracking and administration. 
The offeror shall provide the information required by Table I in the 
clause at 252.246-70YY (indicated by a single asterisk (*)), on each 
contract line item number (CLIN), subline item number (SLIN), or 
exhibit line item number (ELIN) for warranted items. The offeror 
shall provide all information required by Table II no later than 
when the warranted items are presented for receipt and/or 
acceptance. The ``Warranty Item Unique Item Identifier (UII)'' data 
category may also be completed in conjunction with Table II. The 
offeror shall submit the data for warranty tracking to the 
Contracting Officer.

(End of provision)
    7. Add section 252.246-70YY to read as follows:
As prescribed in 246.710(5)(i)(B), use the following clause:

Warranty Tracking of Serialized Items (XXX 2010)

    (a) Definitions. As used in this clause--
    DoD Item Unique Identification (IUID) Registry means the central 
repository for IUID information that serves as an acquisition 
gateway to identify what the uniquely identified tangible item is, 
how and when it was acquired, the initial Government unit cost of 
the item, current custody (Government or Contractor), and how it is 
marked.
    Duration means the warranty period. This period may be a stated 
period of time, amount of usage, or the occurrence of a specified 
event, after formal acceptance of delivery, for the Government to 
assert a contractual right for the correction of defects.
    Enterprise means the entity (e.g., a manufacturer or vendor) 
responsible for granting the warranty and/or assigning unique item 
identifiers to serialized warranty items.
    Enterprise identifier means a code that is uniquely assigned to 
an enterprise by an issuing agency.
    First use means the initial or first time use of a product by 
the Government.
    Fixed expiration means the date the warranty expires and the 
Contractor's obligation to provide for a remedy or corrective action 
ends.
    Installation means the date a unit is inserted into a higher 
level assembly in order to make it operational.
    Issuing agency means an organization responsible for assigning a 
non-repeatable identifier to an enterprise (e.g., Dun & Bradstreet's 
Data Universal Numbering System (DUNS) Number, GS1 Company Prefix, 
Allied Committee 135 NATO Commercial and Government Entity (NCAGE)/
Commercial and Government Entity (CAGE) Code, or the Coded 
Representation of the North American Telecommunications Industry 
Manufacturers, Suppliers, and Related Service Companies (ATIS-
0322000) Number), European Health Industry Business Communication 
Council (EHIBCC) and Health Industry Business Communication Council 
(HIBCC), as indicated in the Register of Issuing Agency Codes for 
ISO/IEC 15459, located at http://www.nen.nl/web/Normen-ontwikkelen/ISOIEC-15459-Issuing-Agency-Codes.htm.
    Item type means a coded representation of the description of the 
item being warranted, consisting of the codes C--component procured 
separate from end item, S--subassembly procured separate from end 
item or subassembly, E--embedded in component, subassembly or end 
item parent, and P--parent end item.
    Starting event means the event or action that initiates the 
warranty.
    Serialized item means each item produced is assigned a serial 
number that is unique among all the collective tangible items 
produced by the enterprise, or each item of a particular part, lot, 
or batch number is assigned a unique serial number within that part, 
lot, or batch number assignment within the enterprise identifier. 
The enterprise is responsible for ensuring unique serialization 
within the enterprise identifier or within the part, lot, or batch 
numbers, and that serial numbers, once assigned, are never used 
again.
    Unique item identifier means a set of data elements marked on an 
item that is globally unique and unambiguous.
    Usage means the quantity and an associated unit of measure that 
specifies the amount-of a characteristic subject to the contractor's 
obligation to provide for remedy or corrective action such as a 
number of miles, hours, or cycles.
    Warranty administrator means the organization specified by the 
guarantor for managing the warranty.
    Warranty guarantor means the enterprise that provides the 
warranty under the terms and conditions of a contract.
    Warranty repair source means the organization specified by a 
warranty guarantor for receiving and managing warranty items that 
are returned by a customer.
    Warranty tracking means the ability to trace a warranted item 
from delivery through completion of the effectivity of the warranty.
    (b) Reporting of data for warranty tracking and administration. 
The Contractor shall provide the following information (see Table I) 
on each contract line item number (CLIN), subline item number 
(SLIN), or exhibit line item number (ELIN) for warranted items. The 
Contractor shall provide all information required by Table II no 
later than when the warranted items are presented for receipt and/or 
acceptance. The ``Warranty Item Unique Item Identifier (UII)'' data 
category may also be completed in conjunction with Table II. The 
Contractor shall submit the data for warranty tracking to the 
Contracting Officer with a copy to the requiring activity and the 
Contracting Officer Representative.

[[Page 52920]]

                                                         Table I--Warranty Tracking Information
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                                                             Warranty term
                                   ----------------------------------------------------------------    Warranty       Warranty     Warranty    Warranty
                Item     Warranty                   Usage (c)*        Duration (d)*        Fixed    administrator  administrator   guarantor   guarantor
 CLIN, SLIN,  type (a)   item UII    Starting  ---------------------------------------- expiration    enterprise     enterprise   enterprise  enterprise
  OR ELIN *      **         **       event (b)                                              (e)       identifier     identifier   identifier  identifier
                                         *      Quantity   Unit *  Quantity *   Unit * ------------ code type (f)      (g) **      code type   code type
                                                    *                                     Date *          **                        (h) **      (i) **
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              ........  ..........  ..........  ........  .......  ..........  .......  ..........  .............  .............  ..........  ..........
              ........  ..........  ..........  ........  .......  ..........  .......  ..........  .............  .............  ..........  ..........
              ........  ..........  ..........  ........  .......  ..........  .......  ..........  .............  .............  ..........  ..........
              ........  ..........  ..........  ........  .......  ..........  .......  ..........  .............  .............  ..........  ..........
              ........  ..........  ..........  ........  .......  ..........  .......  ..........  .............  .............  ..........  ..........
              ........  ..........  ..........  ........  .......  ..........  .......  ..........  .............  .............  ..........  ..........
              ........  ..........  ..........  ........  .......  ..........  .......  ..........  .............  .............  ..........  ..........
              ........  ..........  ..........  ........  .......  ..........  .......  ..........  .............  .............  ..........  ..........
              ........  ..........  ..........  ........  .......  ..........  .......  ..........  .............  .............  ..........  ..........
              ........  ..........  ..........  ........  .......  ..........  .......  ..........  .............  .............  ..........  ..........
              ........  ..........  ..........  ........  .......  ..........  .......  ..........  .............  .............  ..........  ..........
              ........  ..........  ..........  ........  .......  ..........  .......  ..........  .............  .............  ..........  ..........
--------------------------------------------------------------------------------------------------------------------------------------------------------
* To be completed by the requiring activity, if warranty is specified by the Government. Otherwise, all offerors are to complete as part of their
  offers.
** To be completed by the Contractor at the time of award (if known), otherwise at the time of delivery.

    Notes:
    (a) Item type--
    C--component procured separate from end item
    S--subassembly procured separate from end item or subassembly
    E--embedded in component, subassembly or end item parent
    P--parent end item
    (b) Starting event--
    Acceptance (A)
    Installation (I)
    First use (F)
    Other (O)
    Warranty term--Choose one of the following:
    (c) Usage (for warrantees where effectivity is in terms of 
operating time or cycles)
    (d) Duration (for warrantees that expire after a set period of 
time)
    (e) Date (for warrantees with a fixed expiration date)
    (f) Warranty administrator enterprise identifier code type--
    0-9--GS1 Company Prefix
    D--CAGE
    LB--ATIS-0322000
    LH--EHIBCC
    RH--HIBCC
    UN--DUNS
    (g) Warranty administrator enterprise identifier--A non-
repeatable identifier code assigned to an enterprise by an issuing 
agency [e.g., Dun & Bradstreet's Data Universal Numbering System 
(DUNS) Number, GS1 Company Prefix , Allied Committee 135 NATO 
Commercial and Government Entity (NCAGE)/Commercial and Government 
Entity (CAGE) Code, or the Coded Representation of the North 
American Telecommunications Industry Manufacturers, Suppliers, and 
Related Service Companies (ATIS-0322000) Number, European Health 
Industry Business Communication Council (EHIBCC) and Health Industry 
Business Communication Council (HIBCC).
    (h) Warranty guarantor enterprise identifier code type--
    0-9--GS1 Company Prefix
    D--CAGE
    LB--ATIS-0322000
    LH--EHIBCC
    RH--HIBCC
    UN--DUNS

                                                      Table II--Warranty Repair Source Instructions
                                                                    Contract Number:
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                               Warranty                         Shipping address for warranty returns
                                             repair source ------------------------------------------------------------------------------
     Warranty repair source enterprise        enterprise                Address                City/      State/      Postal               Instructions
        identifier code type (j) **         identifier (k)   Name (l)    line 1    Address     county    province    code (p)   Country       (r) **
                                                  **            **       (m) **   line 2 **    (n) **     (o) **        **       (q) **
--------------------------------------------------------------------------------------------------------------------------------------------------------
 For each warranty repair source enterprise identifier listed above, include the shipping address for returning warranty items, or include instructions
          for accessing a Web site to obtain prepaid shipping labels for returning warranty items to the designated source of warranty repair.
--------------------------------------------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------------------------------------------
** To be completed by the Contractor at the time of award and/or at the time of delivery.

    (j) Warranty repair source enterprise identifier code type--
    0-9--GS1 Company Prefix
    D--CAGE
    LB--ATIS-0322000
    LH--EHIBCC
    RH--HIBCC
    UN--DUNS
    (k) Warranty repair source enterprise identifier--A non-
repeatable identifier code assigned to an enterprise by an issuing 
agency [e.g., Dun & Bradstreet's Data

[[Page 52921]]

Universal Numbering System (DUNS) Number, GS1 Company Prefix, Allied 
Committee 135 NATO Commercial and Government Entity (NCAGE)/
Commercial and Government Entity (CAGE) Code, or the Coded 
Representation of the North American Telecommunications Industry 
Manufacturers, Suppliers, and Related Service Companies (ATIS-
0322000) Number, European Health Industry Business Communication 
Council (EHIBCC) and Health Industry Business Communication Council 
(HIBCC).
    (c) Reservation of Rights. The terms of this clause shall not be 
construed to limit the Government's rights or remedies under any 
other contract clause.

(End of clause)]

[FR Doc. 2010-21358 Filed 8-27-10; 8:45 am]
BILLING CODE 5001-08-P
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