Federal Register / Vol. 70, No. 176 / Tuesday, September 13, 2005 / Rules and Regulations 53955 

DEPARTMENT OF DEFENSE 

48 CFR Parts 211, 212, and 252 

[DFARS Case 2004–D011] 

Defense Federal Acquisition 

Regulation Supplement; Radio 

Frequency Identification 

AGENCY: Department of Defense (DoD). 

ACTION: Final rule. 

SUMMARY: DoD has issued a final rule 

amending the Defense Federal 

Acquisition Regulation Supplement 

(DFARS) to add policy pertaining to 

package marking with passive radio 

frequency identification (RFID) tags. 

The rule requires contractors to affix 

passive RFID tags at the case and 

palletized unit load levels when 

shipping packaged operational rations, 

clothing, individual equipment, tools, 

personal demand items, or weapon 

system repair parts, to the Defense 

Distribution Depot in Susquehanna, PA, 

or the Defense Distribution Depot in San 

Joaquin, CA. 

EFFECTIVE DATE: November 14, 2005. 

FOR FURTHER INFORMATION CONTACT: Ms. 

Michele Peterson, Defense Acquisition 

Regulations Council, 

OUSD(AT&L)DPAP(DAR), IMD 3C132, 

3062 Defense Pentagon, Washington, DC 

20301–3062. Telephone (703) 602–0311; 

facsimile (703) 602–0350. Please cite 

DFARS Case 2004–D011. 

SUPPLEMENTARY INFORMATION: 

A. Background 

This final rule contains requirements 

for contractors to affix passive RFID tags 

at the case and palletized unit load 

levels. The rule requires that specified 

commodities delivered to specified DoD 

locations be tagged with a readable 

passive RFID tag. The data encoding 

schemes that contractors may write to 

the tags are identified in the contract 

clause and are also located at http:// 

www.dodrfid.org/tagdata.htm. In 

addition, contractors must send an 

advance shipment notice in accordance 

with the procedures at http:// 

www.dodrfid.org/asn.htm, to provide 

the association between the unique 

identification encoded on the passive 

tag(s) and the product information at the 

applicable case and palletized unit load 

levels. 

DoD published a proposed rule at 70 

FR 20726 on April 21, 2005, and a 

correction to that rule at 70 FR 21729 on 

April 27, 2005. Thirty-three sources 

submitted comments on the proposed 

rule. As a result of these comments, the 

final rule contains additional changes 

that clarify the shipment locations, the 

definitions of ‘‘exterior container’’ and 

‘‘palletized unit load,’’ and the 

requirements for ensuring that data 

encoded on each RFID tag are unique. 

An analysis of the comments is 

provided below. 

1. Comment: Electronic submission of 

the advance shipment notice (ASN) 

SHALL be via Wide Area Work Flow 

(WAWF) per the DoD Suppliers Passive 

Information Guide, Version 7.0. Other 

means of ASN is not acceptable. We 

have been harping our contractors to get 

on board with WAWF. Version 3.0.7 

contains a tab for RFID data entry. 

DoD Response: The current system for 

ASN submittal is WAWF. 

2. Comment: Classes of supply do 

NOT address raw materials, i.e. steel 

rods/bars/non-machined casings, etc., 

that are packed into shipping 

containers. Reusable containers, i.e., 

Hardigg Containers, are not addressed. 

What do contractors do when they have 

a contract for raw steel bars or 

containers that are packed in wood 

boxes or fiberboard containers for 

shipment? 

DoD Response: Classes of supply 

definitions are normally used in support 

of warfighter requirements, since these 

are the types of materiel items normally 

ordered, stocked, and issued from DoD 

wholesale supply activities to support 

warfighter needs. If there is a future 

requirement for the tagging of raw 

materials for shipment to DoD industrial 

activities, these requirements will be 

identified in future DoD policy and 

DFARS issuances. Reusable containers 

such as Hardigg containers are 

individual items when requisitioned—

as such they can be tagged if these items 

are components of DoD material such as 

tool sets. As the technology matures and 

the DoD implementation progresses, 

future DoD issuances may contain a 

requirement for tagging at individual 

item level. 

3. Comment: The DFARS states 

contractors MAY only need to change 

their printer because MSL software is 

available that will print the MSL with 

embedded RFID. This is fine for a 

shipping container or palletized unit 

load, but what about the exterior 

containers on the pallet? They need the 

passive tag, as well as the pallet. 

DoD Response: The exterior 

containers do have to be affixed with 

passive RFID tags, but an MSL may or 

may not be required and should be 

affixed per the instructions contained in 

MIL–STD–129. A supplier could use the 

same printer that prints their MSL tags 

to meet this requirement or affix a blank 

label or an RFID tag itself. 

4. Comment: Small businesses will go 

out of business. There are many 

contractors, ‘‘10 percenters’’ as we call 

them, which work out of their homes. 

The cost of implementing RFID will put 

them out. Material costs to the 

Government will skyrocket. How are we 

addressing small businesses? 

DoD Response: DoD is implementing 

this through new contracts thus 

allowing for the supplier to include the 

cost of compliance in the contract, 

recognizing there may be a temporary 

cost burden until contract payment. 

With respect to training, DoD has 

partnered with the Procurement 

Technical Assistance Centers (PTAC) to 

provide training to DoD small 

businesses. There are a variety of 

compliance options, which range in 

cost. You may also use a 3rd party 

provider to meet the requirement. Please 

reference the Web site, http:// 

www.dodrfid.org, for more information. 

5. Comment: Need to point out that to 

use EPC data construct will require the 

contractor to pay a royalty/membership 

fee to EPC, whereas using DoD data 

construct is free. 

DoD Response: Noted. 

6. Comment: Contractors electing to 

use a packaging house still need an 

interrogator to verify to the QAR the 

data is present. In addition, contractors 

using a packaging house shall inform 

the packager of the data to be encoded 

in the tags. 

DoD Response: Suppliers can 

outsource the function of tag 

verification to the tag manufacturer; 

however, the requirement in the 

contract is still with the supplier. 

Suppliers who purchase pre-encoded 

tags do need to know the hexadecimal 

representation of the RFID tag number 

in order to transmit it to WAWF. This 

information will most often need to be 

printed in human-readable format on 

the tag or can be captured through an 

RFID reader or bar code scanner (if a bar 

code is present). 

7. Comment: Is the area of safety and 

homeland security addressed regarding 

the use of RFID tags? 

DoD Response: The passive RFID 

technology that DoD is acquiring is 

commercially available technology and 

requires FCC approval for production, 

sale, and use in the United States when 

used in accordance with manufacturer’s 

instructions. The DoD plans to conduct 

appropriate testing to ensure that the 

technology is safe for use around 

munitions and fuel prior to use around 

these materials. The DoD is working 

closely with the DHS to ensure that the 

technology and standards are 

compatible and adaptable. 

8. Comment: Can the labels be tracked 

by the enemy or an outside concerned 

source? 

53956 Federal Register / Vol. 70, No. 176 / Tuesday, September 13, 2005 / Rules and Regulations 

DoD Response: Any commercially 

available EPC compatible reader can 

read the current version of the encoding 

on the current passive EPC compatible 

RFID tag. It is important to note that the 

only information on the tag is a purely 

binary serialization of the tag that has 

no intelligence. The intelligence (data) 

relating to the contents of a shipment is 

in the DoD logistics information systems 

behind the DoD firewall. As RFID 

security risks are identified, DoD will 

continue to review these issues from 

both an information assurance and 

operational security standpoint. 

9. Comment: Has there been a cost 

study done on the implementation of 

this requirement? And if so who bares 

the cost? Future contract winners, 

Government, etc? 

DoD Response: The DoD has 

completed a regulatory flexibility 

analysis that is available for review at 

http://www.dodrfid.org/regflex.htm. 

DoD is implementing this requirement 

in new contracts according to the 

Supplier Implementation Guide. This 

will allow suppliers to negotiate the cost 

of compliance into the new contract. 

10. Comment: Would it not be better 

to limit the use to only commercial 

application items? 

DoD Response: One of the DoD goals 

in adopting this technology is to achieve 

a higher level of interoperability with 

our commercial partners in the supply 

chain. This technology is simply a 

faster, better way to acquire data for 

logistics and financial systems. RFID 

will be a benefit for all items DoD 

manages, and the utilization of RFID 

will facilitate accurate, hands-free data 

capture, in support of business 

processes in an integrated DoD supply 

chain enterprise as an integral part of a 

comprehensive suite of Automatic 

Identification Technology (AIT). 

11. Comment: I find some of your 

definitions to be confusing. 

DoD Response: Noted. Please see 

comments 12–17 for further clarification 

of your questions. 

12. Comment: Delete the term ‘‘Case’’

and substitute ‘‘Exterior Pack: Package 

or container containing a single item or 

a number of unit packs or intermediate 

packs ready for shipment and storage.’’

DoD Response: The term ‘‘Case’’ is 

used to provide a common term of 

reference for both commercial and DoD 

activities. 

13. Comment: You can delete 

‘‘Exterior container’’ if you use the 

STANAG 4279 definition of: ‘‘Exterior 

Pack: Package or container containing a 

single item or a number of unit packs or 

intermediate packs ready for shipment 

and storage.’’ This is also referred to as 

the NATO Glossary of Packaging Terms 

and Definitions, AAP–23 (Edition 2). 

DoD Response: The definition used in 

the DFARS rule is as extracted verbatim 

from MIL–STD–129. 

14. Comment: If not, I think you need 

to change the last sentence of the 

Exterior Container definition to read: 

‘‘An exterior container may or may not 

be used as a shipping container.’’ This 

is the correct term used in MIL–STD–

129. 

DoD Response: The DFARS rule 

definition has been changed to read as 

defined in MIL–STD–129. 

15. Comment: Delete the last sentence 

of the definition of Palletized Unit Load: 

‘‘A palletized load is not considered to 

be a shipping container.’’ The 

respondent does not see any reason for 

this statement and it is not part of the 

definition. 

DoD Response: The definition used in 

the DFARS rule is as extracted verbatim 

from MIL–STD–129. 

16. Comment: The shipping container 

is separately defined and for all 

practical purposes is the same thing as 

the exterior container. I think you 

confuse things by saying it is defined as 

an exterior container. The STANAG 

defines ‘‘Shipping container/A 

container which meets minimum carrier 

regulations and is of sufficient strength 

by reason of material, design, and 

construction to be shipped safely 

without further packing.’’ I think this is 

the term you are looking for and would 

delete case and exterior pack/exterior 

container because it is too confusing. 

DoD Response: The definition used in 

the DFARS rule is as extracted verbatim 

from MIL–STD–129. 

17. Comment: As I understand what 

you are looking for you want the 

following: a. One passive RFID tag on 

either the palletized unit load or on the 

shipping container b. on all shipments 

to Susquehanna, PA and/or San Joaquin, 

CA. The way you have it written it 

could be for depot storage or for export 

shipment out of the CCP or for local 

consumption in a depot repair program. 

If that is the intent, I think you should 

also include Red River Army Depot 

(RRAD) because TACOM has many 

items that we also ship to RRAD as one 

of our three primary depots for storage. 

However, if the intent was to speed 

customer delivery times in the E2E 

distribution thru the Container 

Consolidation Point, then I think you 

need to be clearer in your identification 

of the ‘‘ship to’’ address. 

DoD Response: The initial intent was 

to have selected classes/types of 

material tagged for shipment to the 

major DLA receiving points at San 

Joaquin and Susquehanna, since these 

two locations receive the majority of the 

material inbound to the DLA. As the 

phased DoD implementation plan for 

passive RFID continues, we will expand 

both the types of material as well as the 

specific DoD receiving activities for 

RFID tagged material—to include 

industrial/depot activities, like Red 

River Army Depot. The specific ‘‘ship 

to’’ addresses have been posted to the 

Web site, http://www.dodrfid.org. 

18. Comment: A respondent suggested 

the use of an RFID application to track 

warranty and other product information 

pertaining to purchases made by DoD. 

DoD Response: The current focus of 

DoD’s RFID program is on the use of 

RFID within the supply chain. Future 

uses of this technology will continue to 

be explored. 

19. Comment: During an RFID brief, a 

question arose. Some defense 

contractors ‘‘ship in place’’ meaning 

their invoice is paid but the material 

remains at their facility until the 

customer requests it. Since the invoice 

is signed by an authorized Government 

Representative, i.e. QAR, the material 

becomes Government property. When 

the customer requests the material, a DD 

Form 1149 is processed and material 

shipped to the using activity. Question: 

At what point will RFID tags be placed 

on the shipping containers and/or 

pallets? Transmission of the data via 

WAWF will do no good as the material 

has not left the facility and contractors 

expect to be paid. Will the DFARS 

address ‘‘Ship In Place’’ shipments? 

DoD Response: In this situation, 

WAWF will allow for two transactions. 

The initial WAWF transaction for ‘‘inplace’’ receipt/acceptance of the 

material (invoice signature by the QAR) 

and subsequent payment via DFAS will 

not require the specific RFID 

information. The appropriate RFID tag 

should be encoded and placed on the 

shipment (case and/or palletized unit 

load) when the shipment is prepared for 

movement to the ultimate consignee. 

When the material is shipped to a DoD 

activity, the RFID tag is put on the 

second transaction (Advance Shipment 

Notice) to facilitate receipt and input to 

WAWF and to close out documents in 

the appropriate system. These specifics 

should be detailed in the supplier 

contract. 

20. Comment: Seeking clarification of 

the following: Page 20728 of the Federal 

Register/Vol. 70, No. 76/Thursday, 

April 21, 2005/Proposed Rules PART 

252.211–7XXX in middle of the right 

hand column on this page the last 

sentence under ‘‘Exterior container’’. It 

states, ‘‘An exterior container may not 

be used as a shipping container.’’ Please 

advise what is the intent of this 

Federal Register / Vol. 70, No. 176 / Tuesday, September 13, 2005 / Rules and Regulations 53957 

sentence. If a wood crate happens to be 

the exterior container and it holds both 

unit and intermediate containers, why 

can it not be classified as an exterior 

container? 

DoD Response: The DFARS rule will 

be clarified and the sentence will be 

changed to read ‘‘An exterior container 

may or may not be used as a shipping 

container,’’ as per MIL–STD–129. 

21. Comment: Seeking clarification of 

the following: Page 20728 of the Federal 

Register/Vol. 70, No. 76/Thursday, 

April 21, 2005/Proposed Rules PART 

252.211–7XXX. In the next paragraph, 

‘‘Palletized unit load’’ states, ‘‘A 

palletized load is not considered to be 

a shipping container’’. Why is it not to 

be considered a shipping container? I 

realize it may not be enclosed, and not 

possibly suitable for stacking, however 

it is still the ‘‘container’’ on which the 

items are being shipped. 

DoD Response: The definition used in 

the DFARS rule is as extracted verbatim 

from MIL–STD–129. A palletized unit 

load can be shipped as is, but is not 

considered a ‘‘shipping container.’’ in 

accordance with definitions in MIL–

STD–129. Palletized unit load has its 

own definition. 

22. Comment: Seeking clarification of 

the following: Page 20728 of the Federal 

Register/Vol. 70, No. 76/Thursday, 

April 21, 2005/Proposed Rules PART 

252.211–7XXX. The next paragraph 

starting with, ‘‘Passive RFID tag’’

indicates that (1) EPC Class 0 passive 

RFID tags that meet the EPCglobal Class 

0 specification are acceptable. I 

understood that an amendment was 

being issued that no Class 0 passive 

RFID tags were going to be acceptable 

for military shipments. Please advise. 

DoD Response: DoD allows the use of 

either EPC-compliant Class 0 or Class 1 

passive RFID tags. 

23. Comment: Seeking clarification of 

the following: Page 20729 of the Federal 

Register/Vol. 70, No. 76/Thursday, 

April 21, 2005/Proposed Rules, second 

column, eighth line down, the word 

‘‘paragraph’’ should have the actual 

paragraph reference placed beside it. 

Clarification of these concerns would be 

appreciated. 

DoD Response: This reference will be 

inserted upon completion of the final 

rule. 

24. Comment: The contract clause 

(252.211–7XXX) requires in para. (c)(2) 

that each tag is readable * * * Please 

clarify what this means because there 

are conflicting understanding being 

presented to the vendors. Some 

government presenters are saying that 

most small businesses will only need to 

use approved labels to place on 

containers to comply. Others are saying 

that this requires a business to invest in 

expensive systems to meet this 

requirement (min. cost is $25,000). This 

is a significant issue for small business. 

If the latter is what is meant then not 

only the DoD, but Federal Agencies will 

lose most of the small businesses 

because this is a sizable investment for 

limited application and another reason 

not to do business with the Government. 

DoD Response: The tag has to be 

readable by an RFID reader at the point 

it is shipped to the DoD. This does not 

require a $25,000 investment. A 

supplier can buy an RFID reader, for 

approximately $2,000, which verifies 

that the tag can be read. If a supplier is 

using an RFID-enabled printer, the 

printer will verify that the tag can be 

read. If a supplier buys pre-encoded tags 

and has no way to verify the tag 

readability at the point of shipment, 

they need to work with the tag 

manufacturer to ensure that the tags can 

be read. As for investments for small 

business, the DoD will negotiate these 

costs with suppliers at the time of 

contract. 

25. Comment: Also, reference is made 

to two consolidation points that require 

RFID tags. Are these locations also 

known as Tobyhanna, PA, and Tracey, 

CA? If so, then this needs to be clarified 

because many government vendors do 

not associate the two as being the same. 

DoD Response: The Defense 

Distribution Center Susquehanna, PA 

(DDSP) is not the same as Tobyhanna. 

The Defense Distribution Center San 

Joaquin, CA (DDJC) is located in Tracy, 

CA, but there are several facilities in 

Tracy. The specific shipping locations 

for this requirement are identified at the 

Web site, http://www.dodrfid.org. 

26. Comment: A respondent 

commented on the potential use of ‘‘The 

AIM RFID MarkTM!’’ on material that is 

tagged with an RFID tag to provide a 

visual indicator of RFID enabled labels. 

DoD Response: The current version of 

the MIL–STD–129 does not require that 

the RFID tag be integrated with either a 

commercial or Military Shipping Label 

(MSL), but indicates in paragraph 4.9.2 

that: ‘‘The passive RFID tag may be 

integrated with the military or 

commercial shipping label (RFIDenabled address label) or they may be 

placed in separate locations on the 

shipment.’’ As the DoD RFID initiative 

progresses and additional suppliers ship 

tagged material to the DoD receiving 

points, the Department will work with 

organizations such as EPCglobal and 

AIM to determine the most suitable 

marking requirement to indicate RFID 

enabled labels—this requirement will 

then be included in a future update of 

the MIL–STD–129. 

27. Comment: A respondent 

commented on the process of 

reconditioning shipping containers and 

reusing them within the supply chain 

before the shipping container is sent for 

recycling as scrap. There is a concern 

that RFID tags attached to these 

containers would not survive the 

reconditioning process and may litter 

the drum lines, conveyers, furnaces, 

paint booths, and wash basins. They 

could also end up in wastewater 

discharged to public sewer systems, or 

in solid waste streams sent to a 

municipal landfill. 

DoD Response: The DoD makes every 

effort to ensure that materials and 

appropriate types of packaging are 

reconditioned and re-used when and 

where possible prior to recycling and 

disposal of these materials and 

packaging when they are no longer 

economical to recondition or repair for 

continued use. The DFARS rule does 

not require RFID tagging on the types of 

commodities and materials that would 

normally be shipped or delivered in 

fiber/plastic/metal drums or 

intermediate bulk containers (IBCs). As 

the DoD RFID initiative expands to 

potentially include these types of 

materials and associated shipping 

containers, future updates to the DFARS 

may include requirements such as 

appropriate directions for 

reconditioning, re-use, recycling, and 

disposal of packaging and containers. 

28. Comment: There appears to be a 

major conflict between DoD’s proposed 

use of the advance shipping notice and 

how the Defense Commissary Agency 

(DeCA) mandates the use of the 

Advance Shipping Notice. Currently 

DeCA requires all shipments under a 

Frequent Delivery Contract to have an 

ASN provided with specific data fields 

which is used as a receiving document. 

The DeCA ASN does not require nor 

accept a price because the third party 

doing the delivery each day does not 

have access to the price the supplier is 

charging. It appears DoD and DeCA are 

using two different types of contracts to 

obtain supplies. DoD is basing their 

RFID program on supporting a supply 

depot with a price that calls for a 

specific number of units to be delivered 

at a specific time. DeCA has a multiple 

delivery order with the quantities based 

on customer demand with deliveries to 

be made daily. The regulation and DoD 

standard for RFID require an ASN to be 

sent to DoD. Right now an ASN is sent 

to DeCA that serves a multiple of 

functions and gives the user all the 

information they need to receive the 

product and reconcile the delivery. The 

DoD RFID initiative is adding 

unnecessary workload to industry 

53958 Federal Register / Vol. 70, No. 176 / Tuesday, September 13, 2005 / Rules and Regulations 

because they are also asking for an ASN 

(with different information) that doesn’t 

tie into DeCA’s system. This means two 

ASN’s would have to be sent, which 

seems an unnecessary burden on 

industry and was not included in the 

DoD’s calculations to determine the cost 

to small business. The way the 

regulation is written it will be almost 

impossible to do business with DeCA 

and still meet the DoD requirements. It 

is estimated that it will increase the cost 

of goods to DeCA in the range of 15–

18% providing we can have more time 

to implement RFID. If we are held to the 

DoD January 2007 mandate, we expect 

prices would increase in the 25–30% 

range because we would be using a third 

party to do the RFID tags. We believe 

that brand name items are quite 

different than the ‘‘specification’’

products being purchased for the 

depots. We feel RFID tags for brand 

name items for military resale should 

not be given an exemption until 2010 

when RFID tags should be 

commonplace. It doesn’t make a lot of 

sense why DeCA’s customers, who are 

the ones paying for the items, should be 

forced to pay for technology that is still 

in the very early stages of development. 

DoD Response: The requirements for 

DeCA’s internal implementation are 

currently under review and are not 

within the scope of the current DFARS 

rule. 

29. Comment: Thank you for the 

opportunity to comment upon the 

DEPARTMENT OF DEFENSE Defense 

Federal Acquisition Regulation 

Supplement; Radio Frequency 

Identification. There are a number of 

general and specific comments 

regarding the attached. 

DoD Response: See comment numbers 

30–38 for clarification. 

30. Comment: It would be useful to 

clarify the chronological sequence of the 

several E publications on RFID 

published by the DoD. The attachment 

forwarded under cover of the Reference 

does not appear to note or recognize 

previous publications. In particular, the 

defining document must remain The 

Under Secretary of Defense’s 

Memorandum dated 30 Jul 2004 and the 

associated Business Rule of the same 

date. These increasingly are difficult to 

align and reconcile with the DoD RFID 

Home Page and the Supplier 

Implementation Plan and the Suppliers’

Passive RFID Info Guide of Aug 31 2004. 

DoD Response: Documents located at 

http://www.dodrfid.org are 

supplemental to and supportive of the 

DoD RFID policy released on 30 Jul 

2004. 

31. Comment: There is a need to 

clarify the linkage between the DFARS 

and the DoD policy. There needs to be 

a clearly articulated account of how 

amendment of the former document will 

be transferred to the latter. 

DoD Response: The DFARS rule will 

serve as the standard contract language 

for incorporating passive RFID 

requirements in accordance with the 

DoD RFID policy. 

32. Comment: To provide 

transparency, it is requested that a 

reference document of those companies 

that contributed to the document and 

whether their representations have been 

actioned or not is required. There is a 

concern that many RR comments of the 

related issue of UID DFAR and UID 

Policy have been received or actioned 

by the appropriate desk officers for 

staffing comments. The proposed 

schedule of staffing events would also 

be helpful to keep all respondents aware 

of the forthcoming critical milestones. 

DoD Response: All comments 

submitted in response to this DFARS 

rule are taken into careful consideration, 

actioned and responded to 

appropriately by the appropriate offices. 

All comments and Departmental 

responses will be included with the 

final publication of the DFARS rule in 

the Federal Register. 

33. Comment: It is suggested that 

palletized loads should be differentiated 

between air pallets and surface 

palletized loads, terms used by the 

military customer. 

DoD Response: An ‘‘air pallet’’ is 

normally referred to as a ‘‘463L’’ or 

‘‘463L System’’ pallet and does not 

require the application of a passive 

RFID tag. 463L pallets require the use of 

active RFID tags per the DoD RFID 

Policy ‘‘ the use of which is not the 

subject of this DFARS rule. ‘‘Surface 

palletized loads’’ that you note are in 

fact covered by the MIL–STD–129 

definition for palletized unit load as 

identified in the current rule as: 

‘‘Palletized unit load means a MIL–

STD–129 defined quantity of items, 

packed or unpacked, arranged on a 

pallet in a specified manner and 

secured, strapped, or fastened on the 

pallet so that the whole palletized load 

is handled as a single unit. A palletized 

load is not considered to be a shipping 

container.’’

34. Comment: Please confirm within 

the DFARS that the financial thresholds 

are in place or are not applicable, as 

seen with DoD UID policy. 

DoD Response: The UID Financial 

thresholds are not applicable to the 

RFID policy. Therefore, this DFARS rule 

is purposefully silent on this issue to 

avoid confusion. 

35. Comment: It is requested that a 

clause is inserted that reads: ‘‘DoD 

recognizes and accepts that Suppliers’

RFID Implementation Costs will be 

regarded as allowable costs under the 

FAR’’. 

DoD Response: No blanket statement 

will be added. These costs must be 

individually negotiated with the 

contracting officers to ensure only 

minimum costs needed to comply are 

allowable under the contract. 

36. Comment: MIL–STD–129 is 

referred to several times throughout the 

DFARS. Given the amount of 

amendments, for clarity, the latest 

version should be included as a 

reference at the outset of the document. 

DoD Response: The MIL–STD–129 is 

referenced elsewhere in the DFARS for 

the marking and labeling of shipments 

to and within the DoD. The current 

version of the MIL–STD–129 is available 

at www.dodrfid.org. 

37. Comment: Class IX definition has 

been altered and omits Weapon 

Systems? Is this correct as the previous 

definition of Weapons Systems and 

Repair parts and Components was more 

complete and informative. It should also 

be confirmed that complete assemblies 

and the breakdown modules and spare 

parts are included in this category. 

DoD Response: The following 

definition used in the rule is a verbatim 

extract from the DoD 4140.1–R DoD 

Supply Chain Materiel Management 

Regulation of May 23, 2003. 

‘‘Class IX. Repair parts and 

components including kits, assemblies 

and subassemblies, reparable and 

consumable items required for 

maintenance support of all equipment, 

excluding medical-peculiar repair 

parts.’’

This definition includes complete 

assemblies (less major end items), 

breakdown modules, and spares. 

38. Comment: The increase in RFID 

shipping destinations should be 

highlighted in that by 2006 there are 34 

locations and by 1 Jan 2007 to all DoD 

locations. 

DoD Response: The Supplier 

Implementation Plan for 2006 and 2007 

are not within the scope of the current 

DFARS rule. 

39. Comment: The respondent 

commented on the small number of 

examples that were referenced in the 

Regulatory Flexibility Analysis 

concerning the impact of RFID tags on 

the recycling industry as well as the fact 

there will be an impact on the recycling 

community whether or not DoD is 

involved. 

DoD Response: As noted in the 

comment, at the time of publication of 

the Regulatory Flexibility Analysis, 

there was little discussion and testing 

being done in the recycling industry 

Federal Register / Vol. 70, No. 176 / Tuesday, September 13, 2005 / Rules and Regulations 53959 

concerning the impact of RFID. The 

document provided what little 

information was available. As the 

recycling community completes testing 

and publishes reports, DoD will review 

those publications and work to take the 

concerns into consideration as RFID 

technology expands within DoD. 

Additionally, it is important to note for 

the pallet industry that the RFID tags 

will be placed on the shrink wrap 

surrounding the palletized unit load and 

not attached directly to the pallet. 

40. Comment: A respondent suggested 

that DoD make small businesses aware 

of its service to offer recycled RFID tags, 

which sell at a lower cost. The 

respondent also recommends that 

requirements be incorporated into the 

DFARS so that companies can 

reprogram salvaged RFID tags. 

DoD Response: The DoD has not yet 

developed tag recycling plans or a 

validated procedure for offering 

recycled tags for purchase through the 

excess property disposal process. 

41. Comment: A respondent has 

concerns over the ability of Materials 

Recovery Facilities to create a product 

to the specifications of the customer as 

the number of RFID tags increases. The 

respondent urges careful consideration 

of the results of a study being conducted 

in the paper industry. 

DoD Response: The DoD will continue 

to monitor industry testing of recycling 

processes containing RFID tags or tag 

fragments. As the results of these tests 

become known, DoD RFID policy will 

be amended as required. 

42. Comment: I believe the impact 

analysis completed by the Department 

of Defense understates the cost to 

industry to implement RFID. It appears 

the analysis only focused on shipments 

to DoD distribution centers and virtually 

ignored shipments made to the Defense 

Commissary Agency. Based on an 

average case cost of $25, industry’s 

annual cost for implementing RFID for 

DeCA could be in excess of 

$100,000,000 for RFID tags alone. The 

indications are the cost for application 

and administration could equal the cost 

of the tag which could mean an annual 

reoccurring cost of $200,000,000 per 

year to meet DoD’s RFID mandate. We 

have been to a meeting held by DoD 

about RFID and there is a lot of expense 

setting up an RFID program. I realize 

DoD is pushing us to use third party 

providers to meet their deadlines but 

that just increases the cost for RFID even 

more and creates a substantial hardship 

on small business. Most of the small 

business people who I have talked with 

don’t have any idea about the RFID 

mandate and don’t have any plans to 

implement RFID technology into their 

business until things become settled 

down and costs are more reasonable. 

The analysis done by DoD doesn’t really 

address this issue and seemed to ignore 

the entire issue of how much it really 

costs to implement RFID for a small 

business. We all recognize RFID is going 

to become part of the normal business 

process just as UPC’s and scanable bar 

codes did in years past. The problem is 

the Department of Defense is mandating 

technology that is still being developed 

and is going to take time to implement. 

If the mandate for RFID applies for 

every item DoD purchases, DoD’s orders 

will have to be treated differently. This 

means DoD is going to pay a much 

higher price than anyone else. As a 

taxpayer, that does not make a lot of 

sense for brand name items sold to the 

commissary, especially since the cost is 

going to be passed on to our military 

people which means they will have to 

spend more money for food. Instead of 

mandating specific dates for brand name 

items that are sold commercially, why 

don’t you revise the FAR to defer the 

implementation of RFID technology for 

brand name items until it is a common 

industry practice. Based on how long it 

took for UPC’s and bar codes to be 

implemented, it might be quite a few 

more years before RFID is part of the 

common landscape. Establishing a 

mandate for brand name items just 

doesn’t make sense. No other retailer, 

including Wal-Mart, has established a 

hard and fast mandate date for 100% 

compliance from every supplier. It 

seems to me you need to look at 

mainstreaming with the rest of industry 

so you don’t have to pay a premium to 

get something we will be doing in time. 

DoD Response: DoD is aware of the 

concerns of shipment requirements for 

DeCA and is currently reviewing the 

internal implementation plan for DeCA. 

In the regulatory flexibility analysis 

(www.dodrfid.org/regflex.htm), DoD 

provided several options as well as 

estimated costs for small businesses to 

comply with the RFID policy. 

Additionally, DoD has been working 

with the Procurement Technical 

Assistance Centers (PTAC) to educate 

them on RFID technology and the RFID 

policy so that small businesses may seek 

assistance from them with regard to the 

RFID policy and compliance. 

43. Comment: DoD wants to mandate 

RFID and the use of advance shipping 

notices. While this might make sense for 

‘‘spec’’ items going to distribution 

centers, it doesn’t make any sense for 

the products we sell to the commissary 

system. Why in the world does DoD 

want to include these type of products 

as part of their RFID mandate? Does it 

make good business sense when the 

majority of retailers who are buying the 

same item are just now beginning to test 

RFID technology and it will be many, 

many years before they are even 

thinking about getting the key suppliers 

on the program. Products purchased for 

resale should be excluded from DoD’s 

RFID mandate. We already are sending 

ASN’s to the commissaries with more 

information than what DoD wants, the 

commissary system doesn’t have 

anything in place right now to use the 

technology even if we put tags on the 

cases, and the military families are 

going to be paying a much higher price 

just so every item will have an RFID tag. 

Some of the items we sell to the 

commissary are sold as eaches, e.g., soft 

drinks and snacks. Based on the RFID 

mandate, each of these items would 

require an RFID tag which would be 

more than the cost of the product. 

Considering the fact the item is 

consumed within hours after purchase, 

if not on the way home, what is the 

benefit? More importantly, what person 

is going buy our products if the price 

everywhere else is half the price 

(because they don’t have an RFID tag). 

I would like to suggest the following 

changes be considered: (1) Items 

purchased by the commissary and 

exchanges should be excluded from the 

RFID mandate in the FAR as you did for 

other types of products. (2) At the very 

minimum the date for implementing 

RFID technology for the commissary 

and exchanges should be consistent 

with all the other retailers which could 

be 2010 or beyond. (3) You revision the 

current provision so the contracting 

officer can exclude items based on the 

cost of the product. A 100% mandate for 

all items is going to be difficult. (4) If 

RFID is mandated for the commissary 

and exchanges, the advance shipping 

notice requirement be revised to allow 

the commissary and exchange to receive 

the ASN directly instead of going to 

DoD’s network and the map for the ASN 

be determined by the commissary and 

exchange service. 

DoD Response: The requirements for 

DeCA’s internal implementation are 

currently under review and are not 

within the scope of the current DFARS 

rule. 

44. Comment: Recommend the 

following clarifications on the case and 

pallet definitions: Case: A single 

package or container that contains a predetermined quantity of a specific item 

or multiple items associated with an 

order packaged together. The RFID tag 

applied to the single unit will associate 

the EPC code to the list of items inside 

the case. Pallet: A carrier, skid or other 

portable platform that contains multiple 

cases that is distributed as a unit. The 

53960 Federal Register / Vol. 70, No. 176 / Tuesday, September 13, 2005 / Rules and Regulations 

RFID tag affixed to the pallet will 

associate the EPC code to the case RFID 

tags contained on the palletized unit. 

DoD Response: The definition used in 

the DFARS rule is as extracted verbatim 

from MIL–STD–129. 

45. Comment: The respondent 

expressed concern over the ability to 

meet the requirements of the ASN. 

Specifically the fact that the current 

system running within their company 

does not account for all of the data in 

the ASN nor is all of the ASN data RFID 

tag data, additionally the WAWF 

requires reporting of items at the catalog 

part number level where they may pick 

at the pickable level. Requests 

clarification to allow data submitted at 

the pickable level. 

DoD Response: The benefit of an ASN 

lies in the positioning of shipment data 

into a receiving information system 

prior to the actual arrival of the 

corresponding shipment—thus 

providing the receiving organization 

with ‘‘actionable information’’ to make 

delivery changes or other key business 

decisions. The data contained on the 

ASN is necessary for processing in the 

DoD enterprise. Each catalog number 

(read as CLIN) will likely have more 

than one RFID tag associated with it and 

the quantity may differ from the order 

quantity. This is perfectly allowable for 

a CLIN to have multiple RFID tags 

within WAWF. The mapping calls for 

the tag to associate with that portion of 

the CLIN quantity shipped in the carton. 

For additional information and 

instruction of how to construct this 

transaction, visit https://wawf.eb.mil 

and contact DISA Customer Service. 

46. Comment: The respondent 

comments that DoD orders are not 

received via EDI, which would make 

sending an EDI MIRR to DoD much 

easier. The respondent suggests 

converting order to EDI submissions 

only. 

DoD Response: This rule does not 

identify the method for order 

transmission. 

47. Comment: The respondent noted 

that in WAWF today an entire ASN 

MIRR will be rejected if any required 

field value is not what is expected. This 

rejection may prevent the ASN from 

being received prior to the receipt of 

material. The respondent suggests 

rejecting only the affected lines. 

DoD Response: We acknowledge that 

this scenario could occur and we will 

work with the WAWF personnel to 

examine this issue. 

48. Comment: The respondent 

commented that in some contracts DoD 

specifies the line numbers for vendor 

products, which in the creation of the 

ASN could be a problem because those 

numbers are not the same as the 

vendors’’. The respondent suggests the 

use of common line numbers that are 

designated by the vendor. 

DoD Response: This is outside of the 

scope of the DoD RFID DFARS rule. 

However, CLINS are normally 

designated by the contracting agency at 

the time of contracting. 

49. Comment: The respondent brings 

attention to the fact that not all 

pharmaceuticals are distributed directly 

from a manufacturer to the DoD; 

distribution may occur through a 

pharmaceutical distribution entity. With 

the addition of RFID technology, there 

may be a change in the distribution, 

forcing manufacturers to become 

enabled to send an ASN. It is suggested 

that more time is needed to research and 

clearly understand the content of the 

ASN requirements. 

DoD Response: Pharmaceutical 

materials are not within the scope of 

this DFARS rule—thus providing more 

time to research and understand the 

ASN requirements. 

50. Comment: The respondent 

commented that there is still a need to 

study the long-term effects of RF, 

specifically on medical products. The 

respondent proposes more guidance on 

the effects on medical products, 

environment, and other areas that use 

this technology, including the handling 

of this material in the supply chain. 

DoD Response: Medical products are 

not within the scope of this DFARS rule. 

The DoD is working closely with and 

intends to follow the lead of the Food 

& Drug Administration (FDA) on the use 

of RFID on pharmaceutical items—

particularly biologics and medical 

items. 

51. Comment: The respondent 

recommended providing guidance on 

the ability and method to recycle RFID 

tags. 

DoD Response: The DoD would 

handle packaging and pallet material 

containing RFID tags using similar 

procedures as are currently used. 

Additional analysis is continuing in 

order to review the impacts of RFID tag 

materials in the various recycling waste 

streams. 

52. Comment: Readability distance 

may vary based on equipment used, 

type of material and other factors that 

affect RF. MIL–STD–129 has defined 

requirements for the placement of tags 

on the pallet and case. This requirement 

may not be met for certain types of 

materials, liquids, metals, etc. We 

recommend the DoD make allowances 

for tag placement that best suits the 

material being tagged. MIL–STD–129 

also states a requirement for the tag to 

be readable at the time of shipment. 

Guidance is needed if the tag is 

damaged in transit or just simply not 

readable at the time of receipt. 

DoD Response: As the 

implementation of the DoD RFID 

program continues, the need for 

inclusion of these requirements in the 

MIL–STD–129 will be reviewed. 

53. Comment: The destruction of the 

RFID label after product delivery is a 

concern. Clear guidance has not been 

given on killing tags to ensure they do 

not resurface or are used to transport 

material other than the intended 

product. There needs to be assurance for 

when shipping materials are recycled or 

discarded, that previously assigned 

RFID information not be mistakenly reused to identify another shipment of 

configuration of materials. An 

understanding of the DoD approach to 

handling passive RFID tags would be 

needed to assure systems support the 

intended post-use handling of the tags. 

DoD Response: As the 

implementation of the DoD RFID 

program continues, additional 

procedures will be reviewed to preclude 

re-use of RFID tags and the potential for 

mis-labeling or false identification of 

materials. 

54. Comment: It is not clearly 

outlined if (or which) pharmaceutical 

drug product(s) may require UID 

numbers affixed to the unit containers 

(bottles of tablets, solution, capsules, 

etc). The addition of an RFID tag on a 

small bottle containing serialized 

identifier would be difficult at a local 

distribution center and may need 

consideration at the manufacturer. 

DoD Response: The requirement for 

RFID tagging of UID item packaging is 

a future requirement and not included 

in the scope of this DFARS rule. 

55. Comment: Clear understanding of 

pharmaceutical product flow from the 

product manufacturer, to an authorized 

pharmaceutical distribution center, and 

finally to a DoD depot or warehouse 

must be considered in order to manage 

the impact of RFID tagging of cases and 

pallets when product is not directly 

shipped to DoD and manufacturers 

regarding RFID tagging needs. The 

responsibility of providing ASN’s and 

case/pallet RFID tags would reside with 

the pharmaceutical distribution entity. 

Original packaging of cases and pallets 

from the manufacturer may change at 

the DC since these deliveries are not 

dedicated for DoD orders but are 

stocking orders for multiple customers. 

DoD Response: Noted. The 

responsibility for providing case and 

pallet RFID tags in addition to the 

correct ASN resides with the contract 

holder. 

Federal Register / Vol. 70, No. 176 / Tuesday, September 13, 2005 / Rules and Regulations 53961 

56. Comment: Very limited guidance 

has been made available regarding the 

impact analysis requirements for 

pharmaceutical and medical materials 

(products). It is currently understood 

from FDA guidance that biological 

pharmaceutical materials are not to be 

included in RFID pilot studies until 

further regulatory review is completed 

and further guidance is provided. 

Would the DoD guidance provide 

similar concerns? 

DoD Response: Pharmaceuticals are 

not included within the scope of the 

current DFARS rule. However, DoD is 

working closely with the FDA on the 

future use of RFID on pharmaceutical 

items—particularly biologics and 

medical items. 

57. Comment: A respondent 

commented on the need for DoD to only 

adopt a RFID-use mandate if RFID 

technologies will not have a negative 

impact on recycling for any container, 

package, or pallet producer or any 

industry utilizing recycled containers or 

pallets to produce other products. 

Additionally, this respondent urges the 

Department to carefully analyze the use 

of RFID tags for each type of container 

under consideration. 

DoD Response: As the DoD RFID 

effort progresses, the Department will 

remain cognizant of this and other 

industry association’s concerns 

surrounding the use of RFID on 

particular materials used in shipping 

items throughout the supply chain. 

Additional analysis is continuing in 

order to review the impacts of RFID tag 

materials in the various recycling waste 

streams. 

58. Comment: The 30 Jul 2004 

OUSD(AT&L) memo ‘‘Radio Frequency 

Identification (RFID) Policy’’, discussed 

over-arching DoD-wide implementation 

of RFID into the supply chain system. 

When the proposed rule was published 

in April, it confused program managers 

and contracting functionals because the 

proposed DFARS changes only covered 

limited types of commodities being 

shipped to only two depots. We thought 

the DFARS proposed rule would take 

into account the more expansive 

application of RFID within DoD as 

expressed in the various RFID policy 

memos. We can only assume the 

proposed rule represents just the first 

phase of RFID application, and 

subsequent DFARS changes will expand 

RFID application. 

DoD Response: This DFARS rule 

covers the commodities and locations 

for 2005, additional DFARS updates/ 

rules will be used to provide the 

locations and commodities for 2006 and 

2007. 

59. Comment: The respondent has 

followed the development and testing of 

RFID tags for the typical ‘‘supermarket’’

food products. It would seem to them, 

and they believe this is a view shared 

by most in the wholesale food industry, 

that feasibility and affordability of RFID 

tags for the food industry is at least 3 

years down the road. Even Wal Mart 

seems to have backed down with their 

RFID initiative. It is important to 

recognize that profit margins in the food 

business are measured in pennies. This 

is a factor that puts great emphasis on 

the cost of RFID tags. RFID makes a 

great deal of sense for highly sensitive 

or costly items that the DoD or other 

government agencies are attempting to 

control. It would seem that tracking 

cases of peas, corn, cereal, etc., would 

be rather low on the priority list vs. 

other costly or sensitive items. The 

respondent strongly recommends 

consideration that application of RFID 

tags to food related products be deferred 

until technological challenges are 

resolved and the cost of RFID tags 

become reasonable. Implementing 

requirements to support RFID tags at 

these early stages might result in 

limitations or elimination of the ability 

of small business to sell to the 

government—a result that would be 

contrary to federal procurement 

guidelines or could result in the need 

for notable cost increases for the food 

products supplied to the various 

government agencies. 

DoD Response: Consumer products 

and typical ‘‘supermarket’’ food 

products are not included within the 

scope of the current DFARS rule. The 

DoD is reviewing future requirements 

for consumer products and typical 

‘‘supermarket’’ food products for 

phasing into the DoD RFID 

implementation. 

60. Comment: The respondent 

recommends that DoD reexamine its use 

of the Ship Notice/Manifest (ASC X12 

856 Transaction Set). There are 

numerous inconsistencies between the 

use within DoD and the primary users 

of EPC. A. Background: In addition, 

contractors must send an advance 

shipment notice in accordance with the 

procedures at http://www.dodrfid.org/

asn.htm, to provide the association 

between the unique identification 

encoded on the passive tag(s) and the 

product information at the applicable 

case and palletized unit load levels. B. 

Regulatory Flexibility Act: ¶ 2 ‘‘The 

proposed rule will also require 

contractors to provide an electronic 

advance shipment notice in accordance 

with the procedures at http:// 

www.dodrfid.org/asn.htm, to associate 

RFID tag data with the corresponding 

shipment. 252.211–7XXX Radio 

Frequency Identification. As prescribed 

in 211.275–3, use the following clause: 

Radio Frequency Identification (XXX 

2005)(e) Receiving report. The 

Contractor shall electronically submit 

advance shipment notice(s) with the 

RFID tag identification (specified in 

paragraph (d) of this clause) in advance 

of the shipment in accordance with the 

procedures at http://www.dodrfid.org/

asn.htm. The specifics for the Advance 

Shipment Notice (this terminology is 

incorrect). The correct title for the X12 

856 transaction set is ‘‘Ship Notice/ 

Manifest.’’ The specific reference from 

the Web page about is 856_Pack_

Update_WAWF_4010_EDI_Detail.doc, 

Version 3.0.7, March 2005. 

Contemporary versions of X12 (5020) 

and many previous versions declared 

REF01 (Data element 128) as having a 

minimum size of two characters and a 

maximum size of 3. As far back as X12 

(4010) we find the value ‘‘TPN’’ to 

indicate ‘‘transponder number.’’ WalMart Implementation Guidelines for EDI 

state, ‘‘Future documents that will 

support EPC information • 856—Ship 

Notice.’’ The 856 transaction set has two 

primary schemes, one which employs 

the CLD/REF loop (Loop ID—CLD) and 

the other employs a Marks and Numbers 

segment (MAN). The retail segment (the 

model for EPC) employs the MAN 

segments. Organizations shipping to 

retail distributors and sales points will 

need to employ a different scheme for 

DoD than for retailers. DoD is ‘‘way 

ahead of the curve’’ with regard to EPC 

implementation and then tying that 

implementation to EDI. There are 

numerous issues that are currently 

unresolved (as mentioned above) and 

DoD must be prepared to re-implement 

its EPC/EDI usage once the details have 

been sorted out by industry. Does DoD 

intend only to permit Version 4010 of 

the ASC X12 standards? Will future 

implementations require Small to 

Medium Enterprises (SMEs) to then 

redesign their systems? A Ship Notice/ 

Manifest transaction provides no benefit 

for the SME. DoD should identify the 

frequency of anticipated changes in 

these rules. 

DoD Response: DoD follows Federal 

Implementation Conventions for all X12 

transaction sets. In some cases, that may 

result in a different transaction set than 

the commercial transaction set, however 

we will continue to use the Federal 

Implementation Conventions for X12 

transaction sets. 

61. Comment: Additional—The 

requirement of EPC tags in general and 

Class 0 and 1, specifically. The DoD 

requirement for Generation 2 passive 

RFID tags preceded the submission by 

53962 Federal Register / Vol. 70, No. 176 / Tuesday, September 13, 2005 / Rules and Regulations 

EPCglobal of the Generation 2 

specification to ISO for standardization. 

In the interest of RFID harmonization 

with international allies, tag compliance 

with JTC1 ISO/IEC 18000–6c should 

supersede Generation 2 compliance 

once ISO 18000–6c is issued. 252.211–

7XXX Radio Frequency Identification. 

As prescribed in 211.275–3, use the 

following clause: Radio Frequency 

Identification (XXX 2005) 2(d) Data 

syntax and standards. The Contractor 

shall use one or more of the following 

data constructs, depending upon the 

type of passive RFID tag being used in 

accordance with the tag construct 

details located at http:// 

www.dodrfid.org/tagdata.htm (version 

in effect as of the date of the 

solicitation): 2(a) Definitions Passive 

RFID tag means a tag that reflects energy 

from the reader/interrogator or that 

receives and temporarily stores a small 

amount of energy from the reader/ 

interrogator signal in order to generate 

the tag response. Acceptable tags are—

(1) EPC Class 0 passive RFID tags that 

meet the EPCglobal Class 0 

specification; (2) EPC Class 1 passive 

RFID tags that meet the EPCglobal Class 

1 specification; and (3) EPC UHF 

Generation 2 passive RFID tags that 

meet the EPCglobal UHF Generation 2 

specification. It is not believed that the 

tags being sold to DoD meet the 

requirements of the EPC Class 0 or Class 

1 specifications and that it is a serious 

error to say that they do. The only EPC 

tag having a viable specification is that 

of UHF Generation 2. Properly, DoD 

should be referencing ISO standards, in 

the case of RFID ISO/IEC 18000; and for 

passive technology operating in the 

860–960 MHz range: ISO/IEC 18000, 

Part 6c. Such reference would be 

internationally viable, would include 

the UHF Gen2 standard currently 

referenced and would provide room for 

growth. Not referencing ISO standards is 

a serious mistake. If ISO standards are 

not going to be referenced, only 

UHFGen2 tags should be called out. 

DoD Response: The DoD opted to 

embrace EPC specifications for Class 0 

and Class 1 readers and tags in order to 

quickly adopt technology that enhances 

interoperability with our industry 

supplier base. At this time, DoD only 

accepts EPC compliant Class 0 and Class 

1 tags. As the UHF Gen 2 specification 

is ratified and becomes part of the 

appropriate ISO standard, the DoD 

policy documentation will be updated 

to reflect this new standard. 

62. Comment: The definitions of 

‘‘palletized unit load’’ and ‘‘shipping 

containers’’ as indicated in the section 

252.211–7XXX are acceptable according 

to the practices in handling corrugated 

and solid board containers. 

DoD Response: Noted. 

63. Comment: Assessing the possible 

impact, if any, on the environment and 

materials recycling, including 

corrugated containers. The Fibre Box 

Association (FBA) has considered for 

some time the potential impact of the 

passive RFID tags and antenna in the 

recycling stream that would impact the 

manufacturing location where the 

recovered corrugated material is 

processed, as well as the characteristics 

in the product itself containing a high 

percentage of recycled fiber content. As 

RFID tags come into widespread use, 

either from DoD requirements or other 

commercial and industrial 

organizations, an increasing number of 

these devices will enter the recycling 

stream. Corrugated containers are 

recovered and recycled at a level above 

70%, the highest recycling rate for a 

defined article and very much in 

competition with aluminum cans for the 

top spot. Two systems were assessed for 

environmental and product safety 

considerations based on FBA’s research 

of leading innovators and other 

analyses, identifying potential frontrunners in the long term. The current 

RFID construction essentially consists of 

a small integrated circuit and an 

antenna that is either in foil form 

(copper) or printed with conductive 

silver ink. Thus the antennae are 

potential sources of metals that could be 

mobilized during the re-pulping, fiber 

treatment and manufacturing processes 

at the recycling mill. The impacts could 

be in different solid and aqueous 

releases from the mill, as well as the 

presence of these metals in the product 

itself. The FBA commissioned the 

technical arm of the forest and paper 

industry, the National Council for Air 

and Stream Improvement (NCASI), to 

perform a study to assess the potential 

impact of these two forerunner RFID 

antennas in the recycling stream. In the 

case of the foil antenna, the results of 

the study indicate the tag maintains its 

integrity in the re-pulping process due 

to the fact that this type of RFID tag is 

typically enclosed in a plastic laminate, 

which is then adhered to the container. 

The hydrapulper cleaning system 

separates these tags out at a 99%+ level. 

Such complete separation prevents any 

mobilization of the copper metal and 

allows the tags to be easily and safely 

disposed. The printed silver ink antenna 

is a more complex situation because it 

indeed mobilizes. In order to accurately 

ascertain the partition of silver among 

the different vectors—solid waste, 

effluent discharges and the product 

itself—a detailed trial was conducted in 

a pilot paper machine and fiber cleaning 

system at Western Michigan University 

in Kalamazoo, Michigan. This study and 

the subsequent analysis of samples 

collected from the different vectors, as 

well as testing for movement potential 

of silver from the corrugated packaging 

into food, has been recently completed. 

The study results indicate the following: 

• The silver had a high tendency to 

remain in the fiber substrate of the 

paperboard. 

• Silver extractions of the finished 

pilot plant paperboard samples revealed 

a high resistance of the silver to 

movement outside the substrate. 

• Silver concentration in effluent, 

solid waste and product streams are 

well below the identified regulatory 

thresholds. 

DoD Response: DoD appreciates this 

valuable information with regard to the 

studies completed on recycling RFID 

tags on corrugated containers. DoD will 

continue to solicit and accept all 

research, studies, and analyses that 

document the impact of RFID tags to our 

environment and recycling industries 

worldwide. 

64. Comment: It is the 

recommendation of the AIM RFID 

Experts Group (REG) that the definitions 

employed for common industry terms 

follow the definitions internationally 

accepted for those terms. There is 

incompatibility between the definition 

in the DFARS Case 2004–D011, MIL–

STD–129P, and the intended use of 

RFID within DoD. What follows are the 

terms and definitions employed by the 

documents in question. 211.275–2 

Policy. Radio frequency identification 

(RFID), in the form of a passive RFID 

tag, is required for individual cases and 

palletized unit loads. Palletized unit 

load means a MIL–STD–129 defined 

quantity of items, packed or unpacked, 

arranged on a pallet in a specified 

manner and secured, strapped, or 

fastened on the pallet so that the whole 

palletized load is handled as a single 

unit. A palletized load is not considered 

to be a shipping container. [DFARS Case 

2004–D011, ‘‘As prescribed in 211.275–

3, use the following clause:’’] Case: It is 

either an exterior container within a 

palletized unit load or it is an 

individual shipping container. [MIL–

STD–129P c3, definition 3.3.1] 

Palletized unit load: A quantity of items, 

packed or unpacked, arranged on a 

pallet in a specified manner and 

secured, strapped, or fastened on the 

pallet so that the whole palletized load 

is handled as a single unit. A palletized 

or skidded load is not considered to be 

a shipping container. A loaded 463L 

System pallet is not considered to be a 

palletized unit load. Refer to the 

Federal Register / Vol. 70, No. 176 / Tuesday, September 13, 2005 / Rules and Regulations 53963 

Defense Transportation Regulation, DoD 

4500.9–R, Part II, Chapter 203 for 

marking of 463L System pallets. [MIL–

STD–129P c3, definition 3.27] 

International standards: International 

standards exists for these and 

constituent terms. DoD claims to use 

commercial standards. The most 

pervasive commercial standards are 

those of ISO. The DFARS case (and 

MIL–STD–129) need to reference the 

terms as employed in ISO standards. 

Pallet: Rigid horizontal platform of 

minimum height, compatible with 

handling by pallet trucks and/or forklift 

trucks and other appropriate handling 

equipment, used as a base for 

assembling, stacking, storing, handling, 

transporting, or display of goods and 

loads [ISO DIS 455, Pallets for materials 

handling—Vocabulary, definition 2.1]; 

packaging (product) product made of 

any material of any nature to be used for 

the containment, protection, handling, 

delivery storage, transport and 

presentation of goods, from raw material 

to processed goods, from the producer 

to the user or consumer, including 

processor, assembler or other 

intermediary [ISO DIS 21067, 

Packaging—Vocabulary, definition 

2.1.1]; transport packaging: Packaging 

(2.1.1) designed to contain one or more 

articles or packages or bulk material for 

the purposes of transport, handling and/ 

or distribution [ISO DIS 21067, 

Packaging—Vocabulary, definition 

2.2.4]; unit load/unitized load: Single 

item or assembly of items designed to 

enable these to be handled as a single 

entity [ISO DIS 21067, Packaging—

Vocabulary, definition 2.3.18]; box: 

Packaging with rectangular or polygonal 

sides usually completely enclosing the 

contents. Note: The sides may contain 

apertures for handling or ventilation. 

[ISO DIS 21067, Packaging—

Vocabulary, definition 2.3.7]; case: nonspecific term for a transport packaging, 

often used to refer to a box [ISO DIS 

21067, Packaging—Vocabulary, 

definition 2.3.9]. 

DoD Response: These 

recommendations will be reviewed for 

possible inclusion in a future update to 

the MIL–STD–129. The definitions will 

remain consistent with MIL–STD–129. 

65. Comment: Evidence: The 

environmental impact of utilizing 

Passive RFID tags to track and identify 

DoD material is being assessed in the 

same order that RFID tags will appear in 

significant quantities on DoD material. 

Since the DoD Passive RFID Mandate (as 

well as private sector mandates) is first 

targeted to unit loads/pallets and cases, 

data accumulation and studies that need 

to occur have first focused on carton 

board and corrugate. 4.1 Corrugate 

Evidence: Foil antenna made of 

Aluminum or Copper, irrespective of 

being on plastic substrate, will not taint 

the corrugate/carton board recycle 

stream. Because these tags remain 

intact, they are removed with staples, 

etc., in the first filtration after repulping 

with no carry over. The addition of 

RFID tags to the first repulping filtrate 

does not significantly alter the 

percentage constituent makeup of the 

first repulping filtrate, (10%). Present 

waste disposal for the first repulping 

filtrate is deemed acceptable in the 

future for the first repulping filtrate with 

RFID tags. Printed silver based antennas 

are undergoing pilot testing to insure no 

negative environmental impact occurs. 

There is some concern that residual 

silver may pass through. The underlying 

reason is that printed antennas do not 

have the same structural integrity to 

remain intact to allow simple filtration 

to be the means of removal. Since a 

significant portion of RFID tags are foil/ 

plastic substrate based, the most 

conservative approach would be for 

DoD to utilize foil/plastic substrate 

based tags until completion of the 

printed antenna pilot tests. 4.2 Pallet 

Evidence: No studies have been 

initiated for environmental impact on 

pallets because a general assessment 

indicates no need due to the following: 

Pallets are either reused repeatedly for 

many turns with no subsequent 

environmental impact; Tags on pallets 

are reused or manually removed 

allowing the tags to be separated before 

disposal; Pallets are repaired and reused 

with no subsequent environmental 

impact from tags; Pallets are disposed of 

via grinding where antenna metal would 

constitute .4ppm. Final uses of ground 

pallets are fuel, mulch, and filler for 

plastic; Total pallet tags will be fewer 

than case tags by factors between 20 and 

100. 

DoD Response: DoD appreciates this 

valuable information and analysis 

concerning the recycling impacts of 

RFID tags on packaging materials. DoD 

will continue to solicit and accept all 

research, studies, and analyses that 

document the impact of RFID tags to our 

environment and recycling industries 

worldwide. As a note, the tags placed on 

pallets will be placed on the shrink 

wrap not directly applied to the pallet 

itself. 

66. Comment: Reference AIM REF 

Term of Reference 5R (RFID and 

recycling); 5. Mitigating Action Plans: 

For Use Cases and waste streams that 

are several years from having large 

number of RFID tags involved, 

assessments are in different stages of 

completion. However, all should be 

finalized before RFID becomes 

significant in each area. As well there 

are initiatives under way that take the 

introduction of RFID well beyond 

minimizing impact on existing 

processes to more net positive impacts. 

Both are outlined below: 5.1 Printed 

Silver Based Tags on Corrugate: The 

impact of introducing large numbers of 

printed silver based RFID tags into the 

corrugate/carton board recycle stream is 

in the final stages of study by the Fibre 

Box Association (FBA) and 

Confederation of European Paper 

Industries (CEPI), the U.S. and European 

trade associations respectively for the 

corrugate/carton board/paper sector. As 

well, several suppliers of silver based 

printing inks have studies underway. 

All those doing studies, ink suppliers, 

FBA, and CEPI plan to submit study 

results to OMB as soon as complete in 

the near future. 5.2 Existing Waste 

Streams: Impact data is not yet available 

for plastics, glass or metal. However, the 

same successful approach that is in final 

stages of completion for corrugate will 

be undertaken. The following have been 

engaged to provide guidelines for RFID 

use to minimize environmental impact: 

Waste stream trade association 

guideline Completion 

Plastics Society of Plastic Engineers (SPE).1st Qtr 07. 

Society of Plastics Industry 

(SPI).

Glass Packaging Institute (GPI) 1st Qtr 07. 

Steel TBD .................................. 4th Qtr 07. 

Aluminum TBD .......................... 4th Qtr 07. 

5.3 Reusable Assets: An EPC Global 

Work Group led by CHEP (a global 

pallet pool owner) is defining tag and 

data needs to ensure Reusable Assets are 

tagged with long life tags for both the 

Asset GRAI and the contents’ EPC. 

Target completion for a standard is 

November 2005. 5.4 Tag Reuse: A 

mechanism to minimize the impact or 

RFID tags is Reuse. At least one 

commercial activity is underway to pilot 

and validate the technical and economic 

viability of Tag Reuse. ASADA will be 

running a pilot in conjunction with a 

recycle corrugate mill to validate the 

economics. Key to tag reuse is the tag 

issuing entity must use password 

alterable EPC numbering so the tag can 

be reused. Assuming technical and 

economic viability is validated in the 

pilot, tag reuse will be in place by 

Q2’06. 5.5 Recycle Process ID: AIM will 

petition ISO to reserve 8 bits in RFID tag 

protocols to carry EPA recognized 

processes for recycling. The ISO 

submission will be August 1, 2005. 5.6 

Constituent Reduction: Constituent/ 

Metal Antenna, Silicon IC, Substrate, 

Adhesives) Reduction for Passive RFID 

53964 Federal Register / Vol. 70, No. 176 / Tuesday, September 13, 2005 / Rules and Regulations 

Tags is the primary R&D focus of all 

RFID Tag Suppliers. The underlying 

economic requirement for massive 

adoption of RFID in the private sector is 

tag cost reduction. Tag cost is based 

almost entirely on constituent cost with 

the cost of the main tag constituents 

essentially being equivalent. Therefore, 

tag constituent contents will drop 

proportionally with price, i.e., 

proportional in the drop from mid 

twenty cents to sub ten cents, over the 

next 5 years. Discussion: Given the 

above evidence and action plans to 

create additional evidence, the net 

environmental result of mandated RFID 

adoption is presented below against the 

long established strategy of 

environmental responsibility—Recycle, 

Reuse, Reduce: Recycle: Existing waste 

stream recycling at a minimum will be 

unaffected. More likely waste stream 

recycling will have significantly 

improved efficiency because mixed 

stream solid waste separation will 

become automated. Valuable 

components of RFID tags will be 

retrieved; Reuse: More reusable assets 

such as totes and pallets will be used 

because their location and renting 

partner will be real-time; Re-shipper 

corrugate cases will be utilized more; 

An infrastructure will be established to 

reuse hardened RFID tags; Reduce: 

Natural economic forces will 

significantly reduce RFID tag 

constituent content. 

DoD Response: DoD appreciates this 

valuable information and analysis 

provided concerning the recycling 

impacts of RFID tags on packaging 

materials. DoD will continue to solicit 

and accept all research, studies, and 

analyses that document the impact of 

RFID tags to our environment and 

recycling industries worldwide. 

67. Comment: (Item 1): Paragraph 

(b)(1)(ii) of the proposed clause 

252.211–7XXX currently references 

shipment receiving sites Susquehanna 

PA and San Joaquin CA. 

Recommendation: We suggest removing 

reference in the clause to specific DLA 

receiving facilities, to point back to the 

contract for delivery site instruction. 

Please revise clause language to read: 

‘‘(ii) Are being shipped as defined 

within section D (Delivery) or as defined 

elsewhere within the contract.’’

DoD Response: The two specific sites 

are provided as guidance so that 

contracting officers will know what 

locations to include in section D of 

contracts. 

68. Comment: (Item 2): Regarding the 

meaning of Unique as defined in the 

proposed clause 252.211–7XXX, we 

recommend adding the words ‘‘and all’’

as underlined below to ensure that the 

meaning of the word unique is not 

misunderstood. (c) The Contractor shall 

ensure that—(1) The data encoded on 

each passive RFID tag are unique (i.e., 

the binary number is never repeated on 

any and all contracts) and conforms to 

the requirements in paragraph (d) of this 

clause; 

DoD Response: Agree. This change 

has been made in the final rule. 

69. Comment: (Item 3): Subparagraph 

(e) of the proposed clause 252.211–7 

XXX, ‘‘Receiving report’’ provides a 

URL connection for instructions on 

Advance ship notification. Data found 

within URL Web sites are subject to 

random modification and change. 

Recommendation: We recommend the 

URL reference be replaced with either a 

reference to the ASN process found 

within MIL–STD–129 or as delineated 

within the contract. 

DoD Response: While the content 

posted to the URL (http:// 

www.dodrfid.org/asn.htm) is subject to 

modification, the version of the 

information posted to the URL in effect 

at the date of solicitation is binding. 

70. Comment: Supplemental 

recommendation: Often the prime 

contractor will ship on multiple 

contracts adding to the level of 

complexity. It would be beneficial to 

add language to the proposed clause to 

encourage the use of the Single Process 

Initiative (SPI) where practicable. 

DoD Response: Noted. 

71. Comment: The respondent 

commented on the use of RFID tags in 

recycled materials and referred the 

reader to comments submitted by the 

Fibre Box Association with regard to a 

study being completed on RFID tags in 

recycling. 

DoD Response: Noted. 

72. Comment: The respondent 

expressed concern over the potential 

adverse impacts that RFID tags may 

have on their manufacturing processes 

when scrap material that has been 

manufactured into raw material are 

utilized to make new basic materials. 

The respondent recommends using a 

technique, in the future, for product 

design that takes recycling into account 

as the product is developed. 

Additionally, the respondent urges DoD 

to reconsider the timing of the policy 

until additional data can be derived 

relative to the impact of tags on the 

recycling supply chain. 

DoD Response: It has been noted in 

comments from other industry 

associations that have commissioned 

studies on RFID tags (with both copper 

and silver antennas) that foil antennas 

can be sorted out at a 99%+ level, and 

printed silver ink antenna had a high 

resistance to move outside the substrate 

and the silver remains in the fiber 

substrate of the paperboard, 

additionally, the silver concentrate in 

the solid waste and product streams are 

well below regulatory thresholds. The 

DoD will continue to monitor industry 

testing of recycling processes containing 

RFID tags or tag fragments. As the 

results of these tests become known, 

DoD RFID policy will be amended as 

required. 

73. Comment: Reaching End-to-End 

supply chain visibility. End-to-End 

visibility is achieved through system 

integration across the supply chain—

RFID merely simplifies asset 

identification. 

Æ Recommendation: Harmonizing 

current disparate information systems 

could greatly improve supply chain 

visibility using today’s bar codes. 

DoD Response: Noted. The DoD is 

using barcode technology and RFID 

technology as well as other 

complementary AIT in addition to 

systems integration efforts to achieve 

End-to-End supply chain visibility. 

74. Comment: Accuracy of the cost 

burden estimate 

Æ The IBM/AT Kearney study, ‘‘A 

Balanced Perspective: EPC/RFID 

Implementation in the CPG Industry’’

demonstrates most CPG categories have 

a negative 10-year Net Present Value 

Business Case. 

Æ IBM/ATK study shows product 

category dynamics significantly 

influences Return On Investment. 

Æ Costs to CPG manufacturers for 

RFID Implementation far exceed the 

initial DoD estimates. 

Æ Manufacturers receive virtually no 

benefits from RFID unless real-time 

product movement is shared by the 

DoD. 

Æ Recommendation: Pursue RFID 

programs on product categories with 

sufficient ROI to justify the extensive 

additional costs. 

DoD Response: Our in-depth analysis 

indicates that CPG items are not 

typically shipped to DDSP and DDJC 

and therefore are not included within 

the scope of the current DFARS rule. 

The DoD is reviewing future 

requirements for specific classes of 

supplies and commodities to phase into 

the DoD RFID implementation. 

75. Comment: Technology Issues. 

Æ Tag read rates on many CPG 

products remains low, both in test labs 

and in pilots. 

Æ Tag quality is uneven, resulting in 

additional costs to manufacturers. 

Æ Tag Application devices do not, for 

high volume manufacturers, operate at 

manufacturing line speeds, resulting in 

inefficiencies. 

Federal Register / Vol. 70, No. 176 / Tuesday, September 13, 2005 / Rules and Regulations 53965 

Æ Recommendation: Pursue case-level 

RFID program on mission critical 

products. 

DoD Response: Our in-depth analysis 

indicates that CPG items are not 

typically shipped to DDSP and DDJC 

and therefore are not included within 

the scope of the current DFARS rule. 

The DoD is reviewing future 

requirements for specific classes of 

supplies and commodities to phase into 

the DoD RFID implementation. The tag 

quality issue is being addressed by 

various organizations. There is no 

current standard for tag quality and this 

issue is being addressed by various 

industry organizations. The DoD will 

monitor any issue recommendations or 

resolutions for possible inclusion in 

future updates. 

76. Comment: Tag location. 

Æ RFID technical limitations may 

render tag unreadable based on DoD 

specs. 

Æ Recommendation: Remove 

restriction on tag placement for CPG 

companies and allow placement based 

on maximum tag read rates. 

DoD Response: Our in-depth analysis 

indicates that CPG items are not 

typically shipped to DDSP and DDJC 

and therefore are not included within 

the scope of the current DFARS rule. 

The MIL-STD–129 contains 

recommended tag placement location, 

but can be adjusted to get maximum tag 

read rates. 

77. Comment: Advanced Ship 

Notification. 

Æ ASNs, when used properly, can 

provide many of the same benefits as 

RFID. 

Æ Recommendation: Aggressively 

pursue pallet level ASN 

implementations within the DoD supply 

chain. 

DoD Response: The pallet is in the 

ASN, just not the only thing in the ASN. 

The benefit of an ASN lies in the 

positioning of shipment data into a 

receiving information system prior to 

the actual arrival of the corresponding 

shipment—thus providing the receiving 

organization with ‘‘actionable 

information’’ to make delivery changes 

or other key business decisions. RFID is 

a technology that improves the ability of 

users in supply chains to rapidly 

identify, record, and process items, 

shipments, or both. The use of an ASN 

with RFID technology facilitates the 

positioning of shipment data into a 

receiving information system and allows 

the immediate ‘‘hands off’’ receipt, via 

RFID, of that item into inventory upon 

the arrival of the actual shipment—thus 

speeding up product availability for the 

customer as well as invoice close-out 

and payment. 

78. Comment: We believe that the 

DoD should consider a more targeted 

approach on high value categories that 

can generate a positive ROI, and avoid 

low cost/low value CPG products. 

Recommendation: Pursue case-level 

RFID tagging for mission critical 

products (i.e., CPG products not 

included) that current technology 

limitations can support. Continue to 

evaluate pallet-level RFID programs for 

CPG products and pursue 

implementation when and if RFID 

technology and costs warrant. Look at 

ways to leverage existing technologies 

like bar codes and ASNs on lower cost 

CPG products. 

DoD Response: Our in-depth analysis 

indicates that CPG items are not 

typically shipped to DDSP and DDJC 

and therefore are not included within 

the scope of the current DFARS rule. 

The DoD implementation is already 

pursuing case and pallet level tagging 

for mission critical products and is 

reviewing future requirements for 

specific classes of supplies and 

commodities to phase into the DoD 

RFID implementation. 

79. Comment: Initial Regulatory 

Flexibility Analysis of Passive RFID 

Version 1.2, March 2005—Specific 

Comments. 

We have reviewed the DoD’s Initial 

Regulatory Flexibility Analysis of 

Passive RFID and would like to 

highlight a number of items for 

consideration: Section 1.5: The repeated 

references to a ‘‘nested’’ parent child 

relationship with EPC case tags and 

pallet tags is not a capability that exists 

broadly today amongst CPG 

manufacturers. All of the limited 

customer pilots at this point do not 

require the case level EPC serial 

numbers to be sent with the ASN. 

DoD Response: Our in-depth analysis 

indicates that CPG items are not 

typically shipped to DDSP and DDJC 

and therefore are not included within 

the scope of the current DFARS rule. 

The current ASN structure for suppliers 

allows for a ‘‘nested’’ parent-child 

relationship between the pallet and case 

tags. See comments 81–87 for further 

clarification. The benefit of an ASN lies 

in the positioning of shipment data into 

a receiving information system prior to 

the actual arrival of the corresponding 

shipment—thus providing the receiving 

organization with ‘‘actionable 

information’’ to make delivery changes 

or other key business decisions. RFID is 

a technology that improves the ability of 

users in supply chains to rapidly 

identify, record, and process items, 

shipments, or both. The use of an ASN 

with RFID technology facilitates the 

positioning of shipment data into a 

receiving information system and allows 

the immediate ‘‘hands off’’ receipt, via 

RFID, of that item into inventory upon 

the arrival of the actual shipment—thus 

speeding up product availability for the 

customer as well as invoice close-out 

and payment. 

80. Comment: Section 3.2: The 

reference to the requirement of linear 

bar codes to access external databases is 

also a requirement with the current 96 

bit passive RFID tags being used in the 

CPG industry. To obtain any details on 

the serialization on the tag would 

require querying an external database. 

DoD Response: Noted. 

81. Comment: Section 3.3: We agree 

that the two most logical choices to 

enable enhanced visibility in the DoD 

supply chain are bar codes and passive 

RFID tags. The idea that no human 

intervention is required on RFID tags is 

not correct for RF unfriendly products. 

Many food products in the CPG industry 

contain metals, liquids, and metalized 

films which prohibit these cases from 

being read in a typical pallet 

configuration. Since the capability does 

not broadly exist to send the 

serialization as part of an ASN, pallets 

would need to be broken down and 

cases passed individually in front of a 

reader in order to get 100% case level 

reads. 

DoD Response: The inability to 

achieve 100% case level read rates does 

not relieve a shipper of the requirement 

to send the appropriate ASN with the 

tag serialization as part of the ASN. The 

nested parent child relationship 

between pallet and case tags inherent in 

the ASN will negate the need to obtain 

100% case level tag reads. 

82. Comment: Section 3.3.1: 

EPCglobal sees both bar codes and RFID 

technologies co-existing for years. This 

supports a more targeted approach of 

using bar codes on low-value products 

and RFID on high-value and highimportance items. 

DoD Response: The DoD concurs with 

the EPCglobal outlook and plans to 

continue the use of both linear bar codes 

and two dimensional symbology in the 

suite of applicable supply chain 

technologies. 

83. Comment: Section 4.4: Passive 

RFID is still unproven in harsh 

environments, specifically where 

refrigeration and freezing are involved 

due to condensation. Additionally, 

although referenced in this document, 

dynamic multi-block read and write 

capability is not available in the current 

96 bit tags. The specifications are also 

moving to ‘‘locked’’ tags which secure 

the data written by manufacturers. 

DoD Response: Our in-depth analysis 

indicates that CPG items are not 

53966 Federal Register / Vol. 70, No. 176 / Tuesday, September 13, 2005 / Rules and Regulations 

typically shipped to DDSP and DDJC 

and therefore are not included within 

the scope of the current DFARS rule. 

The DoD is reviewing future 

requirements for specific classes of 

supplies and commodities to phase into 

the DoD RFID implementation. 

84. Comment: Section 5.1: Adoption 

rates are much slower that originally 

estimated, highlighted by the 

information shared earlier from the 

AMR Research report. 

DoD Response: The Regulatory 

Flexibility Analysis has been updated to 

include the most recent adoption rates 

from the most recent 2005 AMR report. 

85. Comment: Cost & Benefit 

Analysis—True Impact To Suppliers 

Section 6.4: There are a number of items 

in the benefit and cost analysis that do 

not accurately reflect the true cost 

impact to suppliers of meeting the 

proposed DoD RFID tagging 

requirements. Industry data concurs that 

there will be incremental costs of 

managing separate inventories of tagged 

and non-tagged products. Depending on 

the levels of automation, these costs can 

range from $0.75 to $2.00 per case in a 

postproduction ‘‘slap and ship’’

environment. Additionally, many of the 

research and development (RFID labs), 

infrastructure, software, middleware, 

material handling equipment, etc. are 

not included in the economics. The 

economic examples listed around a 

$4,000 printer and a $0.50 tag are highly 

simplistic and do not reflect the true 

costs of an enterprise implementation of 

RFID. Individual company business 

cases show these costs can be as high as 

tens of millions of dollars, not to 

mention reoccurring tag costs. 

DoD Response: Noted. Those costs 

included in the cost analysis were not 

intended to reflect the true cost of an 

enterprise implementation of RFID. 

These costs were provided as examples 

of how a business, particularly a small 

or medium sized business, can comply 

with the RFID policy without spending 

millions of dollars. 

86. Comment: Company background: 

SUPERVALU is the nation’s largest 

publicly held food wholesaler in the 

United States. We are a Fortune 500 

company which had last year sales of 

$19.5 billion as both a grocery retailer 

and wholesaler. SUPERVALU has been 

following both Wal-Mart’s and DoD’s 

RFID initiatives. Publicly we are 

opposed to the mandate to DeCA to 

implement RFID by January 1, 2007 for 

several reasons: 1. RFID is still not a 

proven technology ready for a 

production roll out across the grocery 

industry. Most food manufacturers and 

grocery companies involved are only in 

pilot mode and are running into many 

challenges today. 

2. Currently RFID does not work well 

on ‘‘mixed’’ pallets (e.g., 70–120 cases 

on a pallet that may represent 50–120 

different products) that a DeCA 

commissary (or grocery) receives from 

their distributors due to the high error 

rate for mixed pallets. While Wal-Mart 

is often cited for mandating RFID 

requirements, Wal-Mart is using RFID 

on full pallets of one product not 

multiple, different products. 

3. Error rates on ‘‘mixed’’ pallets are 

even higher when foil and liquids are on 

the same pallet as they obscure the RFID 

signal. 

4. There is no, or little, ROI at this 

point in time given the cost of the EPC 

tags compared to the average case value 

especially with such a high error rate. 

An investment in RFID hardware today 

is considered ‘‘throw away’’ as the 

technology is still maturing. For 

example, frequent changes are necessary 

to resolve many of the readability issues 

that are occurring in today’s pilots. 

5. Finally, attaching RFID tags for 

groceries going to a commissary is not 

the intent of ‘‘End to End Warfighter 

Support Initiative’’ (i.e. implementing 

RFID to speed products and supplies to 

the ‘‘war fighters’’ in combat zones). 

We also have concerns over who 

should tag the product when a 

distributor supplies the product to 

DeCA. Will manufacturers have to incur 

the expense of having to tag products 

going to a distributor, when only a small 

percentage of the items would be 

shipped to DeCA? On the other hand if 

manufacturers refuse to tag the product, 

will the distributor be required to add 

the tags? If so, who will pay this 

expense? 

Recommendation: Due to the 

technology infancy of RFID, the high 

cost of implementing RFID for low value 

goods (e.g. groceries), and that adding 

RFID tags for grocery products going to 

a commissary have no impact on the 

End to End Warfighter Support 

Initiative, that in January 2007, DoD 

review RFID technology to: 

1. Determine if it is mature enough 

and being used in the grocery industry. 

2. If there is a ROI on implementing 

RFID down to the case level. 

3. And if technology is mature, to 

establish an implementation date, or if 

technology is not mature to establish 

another review date both preferably 18–

24 months out. 

DoD Response: Our in-depth analysis 

indicates that CPG items are not 

typically shipped to DDSP and DDJC 

and therefore are not included within 

the scope of the current DFARS rule. 

The DoD is reviewing future 

requirements for specific classes of 

supplies and commodities to phase into 

the DoD RFID implementation. 

87. Comment: Hewlett-Packard (HP) 

finds that the Advance Shipment Notice 

(ASN) information requirements in the 

current state have seriously significant 

impact. There are two interconnected 

areas of concern: (a) Lack of industry 

standards: Current standards for ASN 

messaging have not yet caught up to 

include RFID standard information sets. 

HP understands that ANSI standards, 

designed to include extensions for EPC 

data, are underway but have not yet 

been proposed nor approved. Using 

requirements unique to DoD, or 

immature requirements that must soon 

be changed, causes unreasonable 

investment to be made by suppliers 

wishing to conform to the requirements. 

(b) Multiple implementations: Due to 

the large and diverse nature of HP 

products, geographies and 

organizations, multiple 

implementations would be required. 

This multiplies the investment burden. 

This is, of course, at HP’s discretion—

however, the combination of multiple 

implementations due to evolving 

standards (a) makes the investment 

burden excessively large. 

Recommendation: Have ASN 

notifications be optional until industry 

standards can be completed and folded 

in to the DoD requirements. 

DoD Response: The Department 

intends to maintain the requirement for 

ASNs as a mandatory component of the 

DFARS rule. RFID is a technology that 

improves the ability of users in supply 

chains to rapidly identify, record, and 

process items, shipments, or both. The 

use of an ASN with RFID technology 

facilitates the positioning of shipment 

data into a receiving information system 

and allows the immediate ‘‘hands off’’

receipt, via RFID, of that item into 

inventory upon the arrival of the actual 

shipment—thus speeding up product 

availability for the customer as well as 

invoice close-out and payment. 

88. Comment: The respondent finds 

that the implied label placement 

specifications for case labels are overly 

restrictive, and may have seriously 

significant impact. As stated, the DoD 

specification requires: ‘‘The passive 

RFID tag should be placed on the 

identification-marked side and right of 

center on a vertical face * * *.’’ Product 

cases are often heavily printed, and 

have limited, designated areas for labels. 

The respondent intends to use 

integrated address/RFID labels, and has 

only moderate concern about the 

restrictions for location of labels on the 

vertical surface of the case. The 

respondent has serious concerns about 

Federal Register / Vol. 70, No. 176 / Tuesday, September 13, 2005 / Rules and Regulations 53967 

the designation of ‘‘side’’ versus ‘‘end’’

of cases. The respondent’s standard 

product design currently has address 

placement on the ‘‘end’’ of cases. 

Changing address label placement in 

product design is impractical and 

costly. RFID readers and antennae can 

be placed appropriately to handle either 

location. 

Recommendation: Allow either side 

or end placement of address labels, 

without qualification. 

DoD Response: The MIL-STD–129 

contains recommended tag placement 

location, but can be adjusted to get 

maximum tag read rates. 

89. Comment: The respondent 

recognizes the likelihood of forklift 

mounted RFID readers in the near 

future. Industry standards have not yet 

addressed the issue of pallet tag 

location, however it seems likely that 

the combination of partial pallets and 

the mechanical characteristics of 

forklifts will likely influence industry 

standards to have a lower end range, 

such as 40 cm above the floor. 

Recommendation: Modify lower end 

range of pallet tag location specification 

to 40 cm. 

DoD Response: The MIL-STD–129 

contains recommended tag placement 

location, but can be adjusted to get 

maximum tag read rates. 

90. Comment: The respondent is 

concerned about the effects that future 

RFID tag technology might have in the 

processes of recovering different paper 

grades for recycling, when the paper 

products are affixed with RFID tags. The 

respondent recommends a collaborative 

effort with DoD to avoid incorrectly 

applying data from one segment of the 

recycling industry to recycled 

paperboard. 

DoD Response: Noted. We have added 

additional information from other 

segments of the recycling industry to the 

Regulatory Flexibility Analysis to give a 

more balanced view of the industry as 

a whole. We look forward to continued 

work with industry associations as the 

RFID effort moves forward. 

91. Comment: The respondent 

presented its opposition on requiring 

contractors to affix RFID tags at the case 

and palletized unit load levels when 

shipping certain purchased supplies 

and equipment until further information 

presents itself; outlining the full 

economic and environmental impacts of 

RFID tags on the recycling industry. The 

respondent recommends that DoD 

proceed cautiously. The RFID tags may 

have the potential to contaminate large 

quantities of currently recyclable 

material due to its heavy metals content. 

Moreover, small chips or pieces of metal 

slipping through the screening process 

during the cleaning and screening 

process could be a potential problem for 

paperboard packaging that comes into 

contact with food or pharmaceuticals. 

Metals are prohibited in paperboard that 

will come into contact with food or 

pharmaceuticals. Additional concerns 

are that metals in the RFID tags that 

would be contaminants in the 

steelmaking process, such as copper, 

could end up going up the stack as air 

emissions or stay in the product. The 

metals constituents of the RFID tags will 

be contaminants for PET, HDPE, and 

especially glass when concentrated. The 

DoD should either fund studies or seek 

partnerships with other federal agencies 

with knowledge of the recycling 

industry to determine the financial 

impacts of this decision on the recycling 

industry and whether making this 

policy change would make sense from 

an environmental standpoint before 

making any final decision. 

DoD Response: It has been noted in 

comments from other industry 

associations that have commissioned 

studies on RFID tags (with both copper 

and silver antennas) that foil antennas 

can be sorted out at a 99%+ level, and 

printed silver ink antenna had a high 

resistance to move outside the substrate 

and the silver remains in the fiber 

substrate of the paperboard, 

additionally, the silver concentrate in 

the solid waste and product streams are 

well below regulatory thresholds. The 

DoD will continue to monitor industry 

testing of recycling processes containing 

RFID tags or tag fragments. As the 

results of these tests become known, 

DoD RFID Policy will be amended as 

required. 

92. Comment: The respondent 

commented on the current RFID 

environment, technology and the work 

being done to ensure interoperability. 

DoD Response: Noted. 

93. Comment: The respondent 

commented on preliminary results from 

a study completed on the recycling of 

RFID tags which are attached to 

corrugated products. This study 

included crystalline connected copper 

and aluminum as well as printed 

antennae. The study indicated that 

existing process technologies in paper 

and board mills are capable of 

satisfactorily dealing with the 

crystalline connected antennae. More 

research is needed to determine if 

process changes are required for printed 

antennae 

DoD Response: DoD appreciates this 

valuable input. DoD will continue to 

solicit and accept all research, studies, 

and analyses that document the impact 

of RFID tags to our environment and 

recycling industries worldwide. 

This rule was subject to Office of 

Management and Budget review under 

Executive Order 12866, dated 

September 30, 1993. 

B. Regulatory Flexibility Act 

This final rule may have an impact on 

a substantial number of small entities 

within the meaning of the Regulatory 

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

has prepared a final regulatory 

flexibility analysis, available at http:// 

www.dodrfid.org/regflex.htm. The 

analysis is summarized as follows: 

This rule adds requirements for DoD 

contractors supplying materiel to the 

Department to affix passive RFID tags at 

the case and palletized unit load levels 

for specified commodities delivered to 

specified DoD locations. To create an 

automated and sophisticated end-to-end 

supply chain, DoD is dependent upon 

initiating the technology at the point of 

origin, the DoD commercial suppliers. 

Without the assistance of the DoD 

supplier base to begin populating the 

DoD supply chain with passive RFID 

tags, a fully integrated, highly visible, 

automated end-to-end supply chain is 

untenable. DoD contractors are 

presently required to print and affix 

military shipping labels to packages 

delivered to DoD. Options to comply 

with the requirements of the rule can be 

as simple as replacing existing military 

shipping label printers with RFIDenabled printers. This will allow DoD 

contractors to print military shipping 

labels with embedded RFID tags. The 

regulatory flexibility analysis also 

details other options and approximate 

costs to comply. The rule also requires 

contractors to provide an electronic 

advance shipment notice in accordance 

with the procedures at http:// 

www.dodrfid.org/asn.htm, to associate 

RFID tag data with the corresponding 

shipment. The objective of the rule is to 

improve visibility of DoD assets in the 

supply chain, increase accuracy of 

shipments and receipts, and reduce the 

number of logistic ‘‘touch points’’ in 

order to decrease the amount of time it 

takes to deliver material to the 

warfighter. The rule does not duplicate, 

overlap, or conflict with any other 

Federal rules. DoD considered all public 

comments in developing the final rule. 

C. Paperwork Reduction Act 

This final rule contains a new 

information collection requirement. The 

Office of Management and Budget has 

approved the information collection for 

use through September 30, 2008, under 

Control Number 0704–0434. 

53968 Federal Register / Vol. 70, No. 176 / Tuesday, September 13, 2005 / Rules and Regulations 

List of Subjects in 48 CFR Parts 211, 

212, and 252 

Government procurement. 

Michele P. Peterson, 

Editor, Defense Acquisition Regulations 

System. 

■ Therefore, 48 CFR Parts 211, 212, and 

252 are amended as follows: 

■ 1. The authority citation for 48 CFR 

Parts 211, 212, and 252 continues to 

read as follows: 

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

Chapter 1. 

PART 211—DESCRIBING AGENCY 

NEEDS 

■ 2. Sections 211.275 through 211.275–

3 are added to read as follows: 

211.275 Radio frequency identification. 

211.275–1 Definitions. 

Bulk commodities, case, palletized 

unit load, passive RFID tag, and radio 

frequency identification are defined in 

the clause at 252.211–7006, Radio 

Frequency Identification. 

211.275–2 Policy. 

Radio frequency identification (RFID), 

in the form of a passive RFID tag, is 

required for individual cases and 

palletized unit loads that—

(a) Contain items in any of the 

following classes of supply, as defined 

in DoD 4140.1–R, DoD Supply Chain 

Materiel Management Regulation, 

AP1.1.11, except that bulk commodities 

are excluded from this requirement: 

(1) Subclass of Class I—Packaged 

operational rations. 

(2) Class II—Clothing, individual 

equipment, tentage, organizational tool 

kits, hand tools, and administrative and 

housekeeping supplies and equipment. 

(3) Class VI—Personal demand items 

(non-military sales items). 

(4) Class IX—Repair parts and 

components including kits, assemblies 

and subassemblies, reparable and 

consumable items required for 

maintenance support of all equipment, 

excluding medical-peculiar repair parts; 

and 

(b) Will be shipped to one of the 

following locations: 

(1) Defense Distribution Depot, 

Susquehanna, PA: DoDAAC W25G1U or 

SW3124. 

(2) Defense Distribution Depot, San 

Joaquin, CA: DoDAAC W62G2T or 

SW3224. 

211.275–3 Contract clause. 

Use the clause at 252.211–7006, Radio 

Frequency Identification, in 

solicitations and contracts that will 

require shipment of items meeting the 

criteria at 211.275–2. 

PART 212—ACQUISITION OF 

COMMERCIAL ITEMS 

■ 3. Section 212.301 is amended by 

removing paragraph (3) introductory 

text and paragraphs (3)(i) through (iii) 

and adding paragraph (f)(ix) at the end 

of the section to read as follows: 

212.301 Solicitation provisions and 

contract clauses for the acquisition of 

commercial items. 

* * * * * 

(f) * * * 

(ix) Use the clause at 252.211–7006, 

Radio Frequency Identification, as 

prescribed in 211.275–3. 

PART 252—SOLICITATION 

PROVISIONS AND CONTRACT 

CLAUSES 

■ 4. Section 252.211–7006 is added to 

read as follows: 

252.211–7006 Radio Frequency 

Identification. 

As prescribed in 211.275–3, use the 

following clause: 

Radio Frequency Identification (Nov 

2005) 

(a) Definitions. As used in this clause—

Advance shipment notice means an 

electronic notification used to list the 

contents of a shipment of goods as well as 

additional information relating to the 

shipment, such as order information, product 

description, physical characteristics, type of 

packaging, marking, carrier information, and 

configuration of goods within the 

transportation equipment. 

Bulk commodities means the following 

commodities, when shipped in rail tank cars, 

tanker trucks, trailers, other bulk wheeled 

conveyances, or pipelines: 

(1) Sand. 

(2) Gravel. 

(3) Bulk liquids (water, chemicals, or 

petroleum products). 

(4) Ready-mix concrete or similar 

construction materials. 

(5) Coal or combustibles such as firewood. 

(6) Agricultural products such as seeds, 

grains, or animal feed. 

Case means either a MIL–STD–129 defined 

exterior container within a palletized unit 

load or a MIL–STD–129 defined individual 

shipping container. 

Electronic Product CodeTM (EPC) means an 

identification scheme for universally 

identifying physical objects via RFID tags and 

other means. The standardized EPC data 

consists of an EPC (or EPC identifier) that 

uniquely identifies an individual object, as 

well as an optional filter value when judged 

to be necessary to enable effective and 

efficient reading of the EPC tags. In addition 

to this standardized data, certain classes of 

EPC tags will allow user-defined data. The 

EPC tag data standards will define the length 

and position of this data, without defining its 

content. 

EPCglobalTM means a joint venture 

between EAN International and the Uniform 

Code Council to establish and support the 

EPC network as the global standard for 

immediate, automatic, and accurate 

identification of any item in the supply chain 

of any company, in any industry, anywhere 

in the world. 

Exterior container means a MIL–STD–129 

defined container, bundle, or assembly that 

is sufficient by reason of material, design, 

and construction to protect unit packs and 

intermediate containers and their contents 

during shipment and storage. It can be a unit 

pack or a container with a combination of 

unit packs or intermediate containers. An 

exterior container may or may not be used as 

a shipping container. 

Palletized unit load means a MIL–STD–129 

defined quantity of items, packed or 

unpacked, arranged on a pallet in a specified 

manner and secured, strapped, or fastened on 

the pallet so that the whole palletized load 

is handled as a single unit. A palletized or 

skidded load is not considered to be a 

shipping container. A loaded 463L System 

pallet is not considered to be a palletized 

unit load. Refer to the Defense Transportation 

Regulation, DoD 4500.9–R, Part II, Chapter 

203, for marking of 463L System pallets. 

Passive RFID tag means a tag that reflects 

energy from the reader/interrogator or that 

receives and temporarily stores a small 

amount of energy from the reader/ 

interrogator signal in order to generate the tag 

response. Acceptable tags are—

(1) EPC Class 0 passive RFID tags that meet 

the EPCglobal Class 0 specification; and 

(2) EPC Class 1 passive RFID tags that meet 

the EPCglobal Class 1 specification. 

Radio Frequency Identification (RFID) 

means an automatic identification and data 

capture technology comprising one or more 

reader/interrogators and one or more radio 

frequency transponders in which data 

transfer is achieved by means of suitably 

modulated inductive or radiating 

electromagnetic carriers. 

Shipping container means a MIL–STD–129 

defined exterior container that meets carrier 

regulations and is of sufficient strength, by 

reason of material, design, and construction, 

to be shipped safely without further packing 

(e.g., wooden boxes or crates, fiber and metal 

drums, and corrugated and solid fiberboard 

boxes). 

(b)(1) Except as provided in paragraph 

(b)(2) of this clause, the Contractor shall affix 

passive RFID tags, at the case and palletized 

unit load packaging levels, for shipments of 

items that—

(i) Are in any of the following classes of 

supply, as defined in DoD 4140.1–R, DoD 

Supply Chain Materiel Management 

Regulation, AP1.1.11: 

(A) Subclass of Class I—Packaged 

operational rations. 

(B) Class II—Clothing, individual 

equipment, tentage, organizational tool kits, 

hand tools, and administrative and 

housekeeping supplies and equipment. 

(C) Class VI—Personal demand items (nonmilitary sales items). 

(D) Class IX—Repair parts and components 

including kits, assemblies and subassemblies, 

Federal Register / Vol. 70, No. 176 / Tuesday, September 13, 2005 / Rules and Regulations 53969 

reparable and consumable items required for 

maintenance support of all equipment, 

excluding medical-peculiar repair parts; and 

(ii) Are being shipped to—

(A) Defense Distribution Depot, 

Susquehanna, PA: DoDAAC W25G1U or 

SW3124; or 

(B) Defense Distribution Depot, San 

Joaquin, CA: DoDAAC W62G2T or SW3224. 

(2) Bulk commodities are excluded from 

the requirements of paragraph (b)(1) of this 

clause. 

(c) The Contractor shall ensure that—

(1) The data encoded on each passive RFID 

tag are unique (i.e., the binary number is 

never repeated on any and all contracts) and 

conforms to the requirements in paragraph 

(d) of this clause; 

(2) Each passive tag is readable at the time 

of shipment in accordance with MIL–STD–

129 (Section 4.9.1.1) readability performance 

requirements; and 

(3) The passive tag is affixed at the 

appropriate location on the specific level of 

packaging, in accordance with MIL–STD–129 

(Section 4.9.2) tag placement specifications. 

(d) Data syntax and standards. The 

Contractor shall use one or more of the 

following data constructs to write the RFID 

tag identification to the passive tag, 

depending upon the type of passive RFID tag 

being used in accordance with the tag 

construct details located at http: 

//www.dodrfid.org/tagdata.htm (version in 

effect as of the date of the solicitation): 

(1) Class 0, 64 Bit Tag—EPCglobal 

Serialized Global Trade Item Number 

(SGTIN), Global Returnable Asset Identifier 

(GRAI), Global Individual Asset Identifier 

(GIAI), or Serialized Shipment Container 

Code (SSCC). 

(2) Class 0, 64 Bit Tag—DoD Tag Construct. 

(3) Class 1, 64 Bit Tag—EPCglobal SGTIN, 

GRAI, GIAI, or SSCC. 

(4) Class 1, 64 Bit Tag—DoD Tag Construct. 

(5) Class 0, 96 Bit Tag—EPCglobal SGTIN, 

GRAI, GIAI, or SSCC. 

(6) Class 0, 96 Bit Tag—DoD Tag Construct. 

(7) Class 1, 96 Bit Tag—EPCglobal SGTIN, 

GRAI, GIAI, or SSCC. 

(8) Class 1, 96 Bit Tag—DoD Tag Construct. 

(e) Receiving report. The Contractor shall 

electronically submit advance shipment 

notice(s) with the RFID tag identification 

(specified in paragraph (d) of this clause) in 

advance of the shipment in accordance with 

the procedures at http://www.dodrfid.org/ 

asn.htm. 

(End of Clause) 

[FR Doc. 05–18025 Filed 9–12–05; 8:45 am] 

BILLING CODE 5001–08–P 

DEPARTMENT OF COMMERCE 

National Oceanic and Atmospheric 

Administration 

50 CFR Part 648 

[Docket No. 050708184–5235–02; I.D. 

070105B] 

RIN 0648–AT50 

Fisheries of the Northeastern United 

States; Atlantic Bluefish and Summer 

Flounder Fisheries 

AGENCY: National Marine Fisheries 

Service (NMFS), National Oceanic and 

Atmospheric Administration (NOAA), 

Commerce. 

ACTION: Final rule. 

SUMMARY: NMFS issues this final rule to 

amend the regulations implementing the 

Fishery Management Plan (FMP) for the 

Atlantic bluefish fishery and the FMP 

for the summer flounder, scup, and 

black sea bass fisheries. This rule makes 

administrative changes that will allow 

NMFS to consider and process state 

commercial quota transfer requests that 

address late-season circumstances that 

necessitate a state quota transfer. The 

intent of this action is solely to provide 

the flexibility to address unpredictable 

late-season events (such as severe 

weather or port obstruction) that may 

result in safety concerns in the 

commercial bluefish and summer 

flounder fisheries. 

DATES: Effective October 13, 2005. 

FOR FURTHER INFORMATION CONTACT: 

Sarah McLaughlin, Fishery Policy 

Analyst, (978) 281–9279. 

SUPPLEMENTARY INFORMATION: 

Background 

The bluefish and summer flounder 

fisheries are managed cooperatively by 

the Atlantic States Marine Fisheries 

Commission (Commission) and the MidAtlantic Fishery Management Council 

(Council), in consultation with the New 

England and South Atlantic Fishery 

Management Councils. Regulations 

implementing the Atlantic Bluefish 

FMP appear at 50 CFR part 648, 

subparts A and J. Regulations 

implementing the summer flounder 

portion of the Summer Flounder, Scup, 

and Black Sea Bass FMP appear at 50 

CFR part 648, subparts A and G. 

NMFS published a proposed rule to 

amend the regulations regarding state 

commercial bluefish and summer 

flounder quota transfers on July 26, 

2005 (70 FR 43111). A complete 

discussion of the development of this 

regulatory amendment appeared in the 

preamble of the proposed rule and is not 

repeated here. 

The current regulations, found at 

§§ 648.160 and 648.100, respectively, 

outline a process by which a state may 

request written approval from the 

Regional Administrator to transfer all or 

part of its annual commercial bluefish 

or summer flounder quota to one or 

more other states. Currently, NMFS 

maintains a policy of considering only 

quota transfer requests submitted by 

December 15 of each year in order to 

ensure that a notice announcing the 

quota transfer could be filed with the 

Office of the Federal Register by the end 

of the year for which the request is 

made. However, the Council is 

concerned that unforeseen 

circumstances, such as severe weather 

or physical obstruction, may prevent 

vessels from returning safely to their 

intended port of landing, and that this 

situation has arisen and may continue to 

arise during the second half of 

December in any given year. End-of-year 

transfers of quota allow vessels to land 

in another state without causing 

overharvest of that state’s fishing year 

quota, provided that both states agree to 

the transfer. NMFS agrees that this 

administrative change in the regulations 

will facilitate the consideration and 

processing of state quota transfer 

requests to address unpredictable lateseason events and consequent safety 

issues in these fisheries. This rule 

eliminates the references to time of 

effectiveness in the bluefish and 

summer flounder quota transfer and 

combination regulations. With these 

changes, quota transfer requests 

addressing unforeseen conditions in 

either fishery that arise late in the 

fishing year could be approved, even if 

the transfer request is made in the 

subsequent fishing year. Any quota 

transfer would continue to be valid only 

for the calendar year for which the 

request is made, and would therefore 

have no impact on the resource or the 

mortality objectives of the FMPs. 

Comments and Responses 

NMFS received three comment letters 

regarding the proposed rule (70 FR 

43111, July 26, 2005). 

Comment 1: The State of North 

Carolina and a North Carolina industry 

association both indicated that the 

proposed action would address safety 

concerns, particularly for fishermen 

using Oregon Inlet, NC, and would give 

states the flexibility to allow fisheries to 

continue through transfers of quota that 

would otherwise not be harvested. 

Response: 

NMFS agrees and is implementing the 

proposed action in this final rule.