Amendment of FIRMR Provisions Relating to FIRMR Applicability, FIRMR Bulletins, Present Value Analysis, and Recycled Federal Information Processing (FIP) Resources

GENERAL SERVICES ADMINISTRATION

41 CFR Parts 201-1, 201-3, 201-20, and 201-39

RIN 3090-AF04

Amendment of FIRMR Provisions Relating to FIRMR Applicability,

FIRMR Bulletins, Present Value Analysis, and Recycled Federal

Information Processing (FIP) Resources

AGENCY: Information Resources Management Service, GSA.

ACTION: Notice of proposed rulemaking.

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SUMMARY: This notice proposes to amend the Federal Information

Resources Management Regulation (FIRMR) to: Revise FIRMR applicability

provisions relating to the replacement of embedded Federal information

processing (FIP) equipment, the delivery of a small amount of FIP

resources under non-FIP procurements, and the availability of guidance

on interpreting FIRMR applicability provisions; explain the

nonmandatory nature of FIRMR bulletins; and require the use of OMB

Circular A-94 in performing present value analysis when evaluating bids

and proposals.

DATES: Comment are due March 4, 1994.

ADDRESSES: Comments may be mailed to GSA/KMR, 18th and F Streets, NW.,

room 3224, Washington, DC 20405, Attn: Anne Horth, or delivered to that

address between 8 a.m. and 4:30 p.m.

FOR FURTHER INFORMATION CONTACT:

Anne Horth, GSA, Office of Information Resources Management Policy,

Regulations Analysis Division (KMR), 18th and F Streets, NW., room

3224, Washington, DC 20405, telephone FTS/Commercial (202) 501-0960 (v)

or (202) 501-0657 (tdd).

SUPPLEMENTARY INFORMATION: (1) Part 201-1 and subpart 201-39.1 are

being amended to revise FIRMR provisions regarding applicability.

Currently, FIRMR applicability extends to the acquisition of FIP

equipment embedded in other products. Agencies have questioned whether

such acquisitions should be applicable, given that the FIRMR was not

applicable to the initial acquisition and the FIP equipment will only

be put back in the original excepted produce. Accordingly, the FIRMR is

being revised to grant an exception to FIRMR applicability for the

replacement of any FIP equipment in a product that has already been

granted an exception under Sec. 201-1.002-2(e). FIP software or related

supplies used in the embedded FIP equipment is also being exempted for

FIRMR coverage.

Another issue creating confusion relates to the delivery of FIP

resources. Now, the FIRMR applies whenever FIP resources are delivered

to a Federal agency or users designated by the agency. Problems have

arisen when the solicitation or contract is primarily for other than

FIP resources, but FIP resources are also being delivered. The FIRMR

currently always applies to the acquisition of the FIP resources, no

matter how small the amount of FIP resources being delivered. Given the

legislative exceptions for FIP resources that are not ``significant''

or are ``incidental to the performance of a Federal contract,'' GSA

believes that a FIRMR exception would also be appropriate for

acquisitions of FIP resources with a relatively low dollar value when

the solicitation or contract is predominantly for non-FIP resources.

Accordingly, the FIRMR is being revised to except such acquisitions

when the value of the FIP resources does not exceed $500,000.

A new Sec. 201-1.002-3 is being added to show that guidance on

understanding FIRMR applicability provisions is available in FIRMR

Bulletin A-1. Some agencies have asked for additional information on

how to interpret FIRMR applicability provisions because they have been

unaware of the existence of the guidance already available in Bulletin

A-1. The addition of this section will correct that deficiency.

(2) Subpart 201-3.001 is being amended to explain the nonmandatory

nature of FIRMR bulletins. There is a perception, among some users of

the FIRMR, that FIRMR bulletins are regulatory in nature. FIRMR

bulletins are not regulatory. They are issued to: provide information

and guidance that helps agencies acquire or manage FIP resources;

explain procedures for using GSA programs; and assist in interpreting

the provisions of the Brooks Act.

(3) Sections 201-20.203-2, 201-39.14-1 and 201-39.1501-1 are being

amended to reflect the fact that OMB Circular No. A-94 will now be used

not only as the basis of analyzing the cost of each alternative when

doing analyses of alternatives, but also in calculating bid and

proposal prices/costs. Heretofore, OMB Circular No. A-94 has only been

used to perform analyses of alternatives and the guidance in OMB

Circular No. A-104 has been used in the evaluation of bids and

proposals. OMB A-104 has been rescinded, and OMB A-94 has been revised

to provide for making both types of determinations.

(4) GSA has determined that this rule is not a significant rule for

the purposes of Executive Order 12866 of October 4, 1993, because it is

not likely to result in any of the impacts noted in Executive Order

12866, affect the rights of specified individuals, or raise issues

arising from the policies of the Administration. GSA has based all

administrative decisions underlying this rule on adequate information

concerning the need for and consequences of this rule; has determined

that the potential benefits to society from this rule outweigh the

potential costs; has maximized the net benefits; and has chosen the

alternative approach involving the least net cost to society.

List of Subjects in 41 CFR Parts 201-1, 201-3, 201-20, and 201-39.

Archives and records, Computer technology, Telecommunications,

Government procurement, Property management, Records management, and

Federal information processing resources activities.

Accordingly, 41 CFR parts 201-1, 201-3, 201-20 and 201-39 are

proposed to be amended as follows:

PART 201-1--APPLICABILITY AND AUTHORITY

1. The authority citation for part 201-1 continues to read as

follows:

Authority: 40 U.S.C. 486(c) and 751(f)

2. Section 201-1.002-2 is amended by revising Sec. 201-1.002-2(c)

and adding new Sec. 201-1.002-2(f) as follows:

Sec. 201-1.002-2 Exceptions.

* * * * *

(c) When both FIP and other resources are being acquired under the

same solicitation or contract and the FIRMR applies to the solicitation

or contract, the FIRMR applies only to the FIP resources. However, the

FIRMR does not apply to solicitations and contracts predominantly for

non-FIP resources when the dollar value of the FIP resources does not

exceed $500,000.

* * * * *

(f) The FIRMR does not apply to the acquisition, management, and

use of FIP resources that will be used in or as embedded FIP equipment

in products excepted from FIRMR coverage under Sec. 201-1.002-2(e),

including replacement FIP resources.

3. A new Sec. 201-1.002-3 is added as follows:

Sec. 201-1.002-3 Procedures.

FIRMR Bulletin A-1 provides an analytical framework and examples

for use in determining whether the FIRMR applies to an acquisition.

Agencies should use this bulletin to assist them in understanding FIRMR

applicability provisions.

PART 201-3--THE FIRMR SYSTEM

4. The authority citation for part 201-3 continues to read as

follows:

Authority: 40 U.S.C. 486(c) and 751(f).

5. Section 201-3.001 is amended by revising Sec. 201-3.001(b)(1) to

read:

Sec. 201-3.001 General.

* * * * *

(b) * * *

(1) FIRMR bulletins contain guidance and information on various

information resources management subjects. FIRMR bulletins do not

constitute binding authority, but should be used as an aid in

understanding GSA programs and the FIRMR. FIRMR bulletins are published

in appendix B of the looseleaf edition of the FIRMR and are available

along with the FIRMR from GPO by subscription or on GSA's CD-ROM.

* * * * *

PART 201-20--ACQUISITION

6. The authority citation for part 201-20 continues to read as

follows:

Authority: 40 U.S.C. 486(c) and 751(f).

7. Section 201-20.203-2 is amended by revising Sec. 201-20.203-2(c)

as follows:

Sec. 201-20.203-2 Cost for each alternative.

* * * * *

(c) Agencies shall follow guidance in OMB Circular No. A-94,

Revised Transmittal Memorandum No. 64, ``Benefit-Cost Analysis of

Federal Programs; Guidelines and Discounts,'' when calculating the cost

of each alternative.

PART 201-39--ACQUISITION OF FEDERAL INFORMATION PROCESSING

RESOURCES (FIP) BY CONTRACTING

8. The authority citation for part 201-39 continues to read as

follows:

Authority: 40 U.S.C. 486(c) and 751(f).

9. Section 201-39.101-3 is amended by revising Sec. 201-39.101-

3(b)(3) and adding a new Sec. 201-39.101-3(b)(6) as follows:

Sec. 201-39.101-3 Applicability.

* * * * *

(b) Exceptions.

* * * * *

(3) When both FIP and other resources are being acquired under the

same solicitation or contract and the FIRMR applies to the solicitation

or contract, the FIRMR applies only to the FIP resources. However, the

FIRMR does not apply to solicitations and contracts predominantly for

non-FIP resources when the dollar value of the FIP resources does not

exceed $500,000.

(6) The FIRMR does not apply to the acquisition, management, and

use of FIP resources that will be used in or as embedded FIP equipment

in products excepted from FIRMR coverage under Sec. 201-1.002-2(e),

including replacement FIP equipment.

* * * * *

10. Section 201-39.1402-1 is amended by revising paragraph (b) to

read as follows:

Sec. 201-39.1402-1 Policies.

* * * * *

(b) When payments are expected to vary among the alternatives being

considered, or where payments will be made over an extended period,

agencies shall consider the need to adjust all prices and costs to

present value and apply the results in source selection. Agencies

should follow the guidance in OMB Circular A-94 regarding present value

calculations.

11. Section 201-39.1501-1 is amended by revising Sec. 201-39.1501-

1(b) to read as follows:

Sec. 201-39.1501-1 Policies.

(b) When payments are expected to vary among the alternatives being

considered, or where payments will be made over an extended period,

agencies shall consider the need to adjust all prices and costs to

present value and apply the results in source selection. Agencies

should follow the guidance in OMB Circular A-94 regarding present value

calculations.

Dated: December 10, 1993.

Francis A. McDonough,

Assistant Commissioner for Federal Information Resources Management.

[FR Doc. 93-31152 Filed 12-30-93; 8:45 am]

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