Source: http://farsite.hill.af.mil/reghtml/changes/dac/DPN20131216.htm
Timestamp: 2017-10-17 05:41:55
Document Index: 348366837

Matched Legal Cases: ['arts 211', 'art 245', 'art 211', 'arts 211', 'arts 211', 'arts 211']

DPN20131216
[FR Doc No: 2013-29771]
48 CFR Parts 211, 212, 218, 246, 252, and Appendix F to Chapter 2
RIN 0750-AH64
SUMMARY: DoD is issuing a final rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to update and clarify requirements for unique identification and valuation of items delivered under DoD contracts.
The definition of ``data matrix'' within the clause at 252.211-7003 is modified from the proposed rule to clarify the specification with which contractors must comply.
The words ``at its own expense'' at 252.211-7003(c)(1)(v) are removed as a result of a public comment.
The statement ``or registered in the DoD Item Unique Identification Registry'' is added at 252.211-7003(c)(2).
The phrase ``ECC200 data matrix specification'' is added at 252.211-7003(c)(3) to note the exact specification within the listed standard.
252.211-7003(c)(5)(D) is revised to read ``Verify that the marks on items and labels on shipments, storage containers, and packages are machine readable and conform to the applicable standards. The contractor shall use an automatic identification technology device for this verification that has been programmed to the requirements of
Appendix A, MIL-STD-130, latest version.''
252.211-7003(f)(1) is revised to include the sentence ``If WAWF is not required by this contract, and the contractor is not using WAWF, follow the procedure at http://dodprocurementtoolbox.com/site/uidregistry/.''
In Appendix F-103(e)(1), the last sentence is revised to read ``WAWF shall be used to report Unique Item Identifiers (UIIs) at the line item level, unless an exception to WAWF applies, and can also be used to report UIIs embedded at the line item level.''
In Appendix F paragraph F-301(b)(18)(i), the fifth sentence in this paragraph is revised to read: ``However, if the contract has Item Unique Identification (IUID) requirements and the receiving report is being processed in WAWF the unit price must represent the acquisition cost that will be recorded in the IUID registry.'' This change is being made to ensure the instructions in Appendix F conform to the coverage in the clause.
Response: Clause 252.211-7007 was added on August, 29, 2012, to the commercial provision/clause list at 212.301(f) as the result of DFARS final rule 2012-D001, Reporting of Government-Furnished Property.2. Burden Added by New Reporting
Response: The cost burden of implementing item unique
identification was recognized as an allowable cost in the Director, Defense Procurement and Acquisition Policy, Memorandum, dated July 9, 2004, Subject: ``Contract Pricing and Cost Accounting Compliance with DFARS 252.211-7003'', and this case does not change the way DoD is using item unique identification.
Comment: One respondent stated that this requirement is passing a nontrivial DoD records responsibility along to the contractor in the immediate time frame, with no concurrent change in contract dollars to pay for the activity (unless through billing under a cost type contract), and suggested deleting the revision to 211.274-2(a)(4)(v), which makes item unique identification required for any, ``DoD serially managed item (reparable or nonreparable).''
Comment: One respondent commented that the marking requirements implemented by this rule are impracticable and would put contractors at risk of charging the Government for unallowable unreasonable costs, noting that a reasonable cost is described in FAR 31.201-3(a): ``A cost is reasonable if in its nature and amount, it does not exceed that which would be incurred by a prudent person in the conduct of competitive business . . .'' The respondent also noted that the implementing marking requirements in this rule would constitute abuse as defined in the Government Accountability Office Yellow Book: ``Abuse involves behavior that is deficient or improper when compared with behavior that a prudent person would consider a reasonable and necessary business practice given the facts and circumstances . . .''
Comment: One respondent suggested that warranted serialized items that require IUID be identified in the contract due to the significant administrative cost that would be incurred if IUID is required on all warranted serialized items. The suggested change would modify the text at 211.274-2(a)(4)(iii) to read: ``Warranted serialized item as identified in the contract.''
Response: DFARS 211.274-2(3)(iv) implements the policy of Public Law 110-417, which requires that major defense acquisition programs designate items of special tooling and special test equipment for preservation and storage upon the termination of production. Any issues concerning obsolescence of special test equipment at the termination of production would be mitigated by the program manager by following the guidance in SD-22, Diminishing Manufacturing Sources and Material Shortages: A Guidebook of Best Practices for Implementing a Robust DMSMS Management Program, dated August 2012.
Comment: One respondent pointed out that the requirements at 211.274-2(a)(4)(v) and (vi) are both new requirements and contradict the rule's statement that no new requirements are being added. The respondent recommends modifying the text at 211.274-2(a)(4)(vi) to add ``as defined in the contract'' to the end of the sentence.
Comment: One respondent recommended deleting ``or when item unique identification is provided under paragraph (c)(1)(v)'' and instead adding ``either as part of, or associated with'' at 252.211-7003(d) in order to enable reporting IUID-related data elements to the Registry for occasional use of paper material inspection and receiving reports.
Comment: One respondent suggested editing the prescription for clause 252.211-7003 to specify that it applies to ``tangible durable personal property'' supplies to clarify that it does not apply to real property.
Response: The inclusion of the term ``item'', which is defined in 252.211-7003(a) as a single hardware article or a single unit formed by a grouping of subassemblies, components, or constituent parts, is a sufficient distinction to avoid confusion with real property.
Comment: One respondent commented that the definition for ``data matrix'' is not true all of the time as in some circumstances the modules in the matrix can be round.
Response: As specified in 252.211-7003(c)(3), DoD will only accept a data matrix symbol that complies with ISO/IEC International Standard 16022, Information Technology--International Symbology Specification--Data Matrix. This standard defines a module as a single cell in a matrix symbology used to encode one bit of data. In data matrix, the module is nominally a square shape.
Comment: One respondent suggested modifying the definition for ``type designation'' because the explanation of a complete ``item'' is inconsistent with other instances within the regulations, standards, and guides.
Response: To be consistent with other instances of ``type designation'' usage, the words ``a complete item, such as'' are not included in the final rule.
Comment: One respondents suggested modifying 252.211-7003(c)(1)(i) because the use of the term ``unit'' is inconsistent with other instances within the regulations, standards, and guides.
Response: 252.211-7003(c)(1)(i) uses the term ``unit acquisition cost'', which is the actual cost at the time of purchase and is the proper measure of value.
Response: The DoD requirement is to have the contractor mark items that are delivered to DoD under the terms of a contract and to allow the collection of data where contractors voluntarily mark items.13. MIL STD 130 and MIL STD 129
Comment: One respondent noted that requiring adherence to a military standard (e.g., MIL STD 130 and MIL STD 129) creates an open ended standard that would not be possible to price at the time of award and requests the deletion of 252.211-7003(c)(5)(i)(D) language:
``Verify that the marks on items, shipments and storage containers and packages are machine readable and conform to the applicable standards.'' The respondent also suggested clarifying that the requirement corresponds to the standard in place at the time of award and should be cited in the contract.
Response: The requirement at 252.211-7003(c)(5)(i)(C) reinforces the requirements in paragraph 4.4 of MIL STD 129 that ``For shipments of UII items, the 2D (PDF417) symbol shall be used for listing the concatenated UIIs (DI 25S) and the data normally included in the linear (Code 39) identification bar codes (see 4.4.2.3 and 4.4.3.3.1).'' MIL-STD-129 requirements only apply to markings on labels and containers of items being shipped or stored, as specified in the contract.
Comment: One respondent suggested editing the new text at 252.211-7003(d)(12) to read ``Type designation of the item when specified in the contract specifications.'' The respondent noted that this change would clarify that this information is only required when it has been provided in the contract.
Response: 252.211-7003(d)(12) is modified in the final rule to read: ``Type designation of the item as specified in the contract schedule, if any.'' Use of the term ``specifications'' is not appropriate in this instance.
Comment: One respondent suggested editing the new text at 252.211-7003(d)(14) to read: ``Whether the item was sold with a limited warranty.'' The respondent opined that tracking if items were sold with a warranty makes more sense than tracking if the item is covered by a warranty because most warranties expire and there is no current process for updating this information.
Comment: One respondent recommended editing 252.211-7003(f)(1) to allow contractors the option of submitting item information directly to the registry without the stipulation ``If WAWF is not required by this contract''.
Comment: One respondent suggested removing the words ``DoD serially managed reparables'' from the requirement at 252.211-7003(c)(1)(iii).
Comment: One respondent suggested adding notes to the new requirements at 252.211-7003(c)(1)(iii) and (iv) to clarify which category of items these refer to out of the categories ``ACQ'' or ``GFP''.
Comment: One respondent suggested removing ``at its own expense'' from 252.211-7003(c)(1)(v).
Response: The phrase ``at its own expense'' is deleted from 252.211-7003(c)(1)(v).
Comment: One respondent suggested adding a line at 252.211-7003(c)(vi), which would state: ``DoD serially managed reparables as specified in Attachment Number ----. (Note: Corresponds to IUID Registry Category ``LEG'').''
Comment: One respondent suggested revising 252.211-7003(c)(2), to state: ``The unique item identifier assignment and the component data element combination shall not be duplicated on any other item marked and/or registered in the IUID Registry by the contractor (because STE (GFP) may have a UII assigned and registered, but not marked).''
Response: DFARS 252.211-7003(c)(2) is revised to read: ``The unique item identifier assignment and component data element combination shall not be duplicated on any other item marked or registered in the DoD Item Unique Identification Registry by the contractor.''
Comment: One respondent suggested adding a new 252.211-7003(f)(3), which would state: ``reparable items shall be reported by direct data submission to the IUID Registry following the procedures and formats at: http://www.acq.osd.mil/dpap/pdi/uid/data_submission_information.html.''
Response: The text at 211.274-4 was modified on August 29th, 2012, by final rule 2012-D001 and is not further modified by this rule. The five exceptions in the proposed rule were incorporated into the DFARS by the final rule 2012-D001 as well as two other exceptions: ``Property released as work in process'' and ``Nonserial managed items (reporting is limited to receipt transactions only).''
Comment: One respondent disagrees with limiting this rule to small businesses involved in manufacturing. This respondent stated that the business systems rule came to pass because major contractors' business systems were assessed as poor, so a control environment argument is unwarranted. The respondent also stated that the exposure is greater at major contractors, and major contractors are more likely to use SAP AG software, which abrogates the loan/payback transaction.
This rule does not add any new information collection requirements that require the approval of the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35) beyond those already covered by OMB Control Numbers 0704-0246 and 0704-0248. OMB Control Number 0704-0246, titled ``Defense Federal Acquisition Regulations Supplement (DFARS) Part 245, Government Property, related clauses in DFARS 252, and related forms in DFARS 253,'' includes information collection requirements for DFARS subpart 211.274. OMB Control Number 0704-0248, titled ``Defense Federal Acquisition Regulations Supplement (DFARS) Appendix F, Material Inspection and Receiving Report and related forms,'' covers all information submitted through the Wide Area WorkFlow system.
List of Subjects in 48 CFR Parts 211, 212, 218, 246, 252, and Appendix F to Chapter 2 Government procurement.
Therefore, 48 CFR parts 211, 212, 218, 246, 252, and Appendix F to
1. The authority citation for 48 CFR parts 211, 212, 218, 246, 252, and Appendix F to chapter 2 continues to read as follows:
Item unique identification and valuation is a system of marking, valuing, and tracking items delivered to DoD that enhances logistics, contracting, and financial business transactions supporting the United States and coalition troops. Through item unique identification policy, which capitalizes on leading practices and embraces open standards, DoD--
3. Section 211.274-2 is amended by--
(a) It is DoD policy that DoD item unique identification, or a DoD recognized unique identification equivalent, is required for all delivered items, including items of contractor-acquired property delivered on contract line items (see PGI 245.402-71 for guidance when delivery of contractor acquired property is required)--
(3) Regardless of value for any--
(b) Exceptions. The contractor will not be required to provide DoD item unique identification if--
4. Section 211.274-3 is amended by--
b. Amending paragraph (c) by removing the word ``need'' and adding in its place ``shall''.
5. Section 211.274-6 is amended by--
b. Amending paragraph (c)(1) by removing the clause title ``Item Identification and Valuation'' and adding in its place ``Item Unique Identification and Valuation''.
6. Section 212.301 is amended in paragraph (f)(ix) by removing the clause title ``Item Identification and Valuation'' and adding in its place ``Item Unique Identification and Valuation''.
246.710 [Amended]
8. Section 246.710 is amended in paragraph (5)(i) introductory text by removing the clause title ``Item Identification and Valuation'' and adding in its place ``Item Unique Identification and Valuation''.
9. Amend section 252.211-7003 by--
c. Amending paragraph (a) by removing the definition title ``DoD unique item identification'' and adding in its place ``DoD item unique identification'';
d. Adding to paragraph (a), in alphabetical order, definitions for ``Data matrix'' and ``Type designation'';
(C) Label shipments, storage containers and packages that contain uniquely identified items in accordance with the requirements of MIL-STD-129, Military Marking for Shipment and Storage, latest version; and (D) Verify that the marks on items and labels on shipments, storage containers, and packages are machine readable and conform to the applicable standards. The contractor shall use an automatic identification technology device for this verification that has been programmed to the requirements of Appendix A, MIL-STD-130, latest version.
11. Amend Appendix F to Chapter 2 by--
(i) The contractor shall enter unit prices for each item of property fabricated or acquired for the Government and delivered to a contractor as Government furnished property (GFP). Get the unit price from Section B of the contract. If the unit price is not available, use an estimate. The estimated price should be the contractor's estimate of what the items cost the Government. When the price is estimated, enter ``Estimated Unit Price'' in the description field. However, if the contract has Item Unique Identification (IUID) requirements and the receiving report is being processed in WAWF, the unit price must represent the acquisition cost that will be recorded in the IUID registry. Therefore, the unit price is required (see the clause at DFARS 252.211-7003, Item Unique Identification and Valuation). When delivering GFP via WAWF to another contractor, WAWF will initiate a property transfer if the vendor who is initiating the WAWF RR is also registered as a vendor property shipper in WAWF and the vendor receiving the property is also a vendor property receiver in WAWF.