Procurement List Addition

COMMITTEE FOR PURCHASE FROM PEOPLE WHO ARE BLIND OR SEVERELY DISABLED

Procurement List Addition

AGENCY: Committee for Purchase From People Who Are Blind or Severely

Disabled.

ACTION: Addition to the Procurement List.

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SUMMARY: This action adds to the Procurement List a commodity to be

furnished by nonprofit agencies employing persons who are blind or have

other severe disabilities.

EFFECTIVE DATE: December 14, 1994.

ADDRESSES: Committee for Purchase From People Who Are Blind or Severely

Disabled, Crystal Square 3, Suite 403, 1735 Jefferson Davis Highway,

Arlington, Virginia 22202-3461.

FOR FURTHER INFORMATION CONTACT: Beverly Milkman (703) 603-7740.

SUPPLEMENTARY INFORMATION: On September 2, 1994, the Committee for

Purchase From People Who Are Blind or Severely Disabled published

notice (59 F.R. 45666) of proposed addition to the Procurement List.

Comments were received from one of the current contractors for the

litter during the development phase of the proposal to add the litter

to the Procurement List. This contractor indicated that addition of the

litter to the Procurement List would have catastrophic consequences for

the company, which is totally dependent on sales to the Government,

particularly the Defense Personnel Support Center (DPSC), which buys

the litter from this contractor. According to the contractor, loss of

the ability to supply the litter to the Government, along with other

losses due to reduced Government purchasing, will result in significant

layoffs of the contractor's personnel in a labor surplus area and will

place the company's ability to survive in jeopardy. This contractor

also noted that it had made a substantial investment in tooling and

fixtures to make the litter.

The other current contractor for the litter contacted the Committee

after the comment period for the proposal to add the litter to the

Procurement List had ended. This contractor provided data to support

its claim of being a longtime supplier of the litter. The contractor

questioned the adequacy of notice to it of the Committee's proposal to

add the litter to the Procurement List, and challenged the propriety of

the Committee's determinations on the suitability of the nonprofit

agency to produce the litter and the impact of the action on the

contractor. The contractor also claimed that addition of the litter

would have an adverse impact on national security.

The second contractor also indicated that it had Government sales

of the litter outside of DPSC, which the Committee initially believed

bought all the Government requirement for this litter for distribution

to other agencies. As the Committee's proposal was based on the DPSC

requirement for the litter, the Committee has decided to limit its

addition of this litter to the Procurement List to the DPSC

requirement, rather than the total Government requirement as originally

proposed. This will also limit the effect of the Committee's action on

the two contractors, as the Government market outside DPSC will remain

available for them to compete to supply.

In order to gauge the likely impact on the two contractors of

adding the DPSC requirement for the litter to the Procurement List in a

period of declining Government purchases, the Committee has acquired

DPSC data concerning its purchases of the litter since 1988 (all from

the two commenting contractors). The Committee has determined impact on

the two contractors by assigning each of them a portion of the

estimated requirement for the litter for next year in proportion to the

average percentage of the requirement which they supplied during that

period, and by applying the portion to the latest sales data and

projections provided by each contractor, in one case through a

financial reporting service to which the Committee subscribes.

Using this approach, the percentage of each contractor's total

sales which it would lose is not high enough to constitute severe

adverse impact, in the Committee's estimation. Consequently, the

Committee does not believe its action will jeopardize the survival of

either company. As to the possible displacement of workers in a labor

surplus area, the addition of the litter to the Procurement List will

create jobs for blind people, whose unemployment rate far exceeds that

of nondisabled workers, even in labor surplus areas.

Under the competitive bidding system, no contractor is guaranteed a

contract with the Government to supply an item. A decision to make an

investment in tooling and fixtures to produce an item thus requires a

business to assume a certain amount of risk. In this case, the first

contractor did not get the previous contract for the litter and has not

indicated that it will be unable to use its tooling and fixtures to

produce litters commercially. Consequently, the Committee does not

believe that addition of the Government requirement for the litter to

the Procurement List will severely impact the contractor in this

regard.

The second contractor's challenge to the propriety of the

Committee's notice is that the Committee did not give it actual notice

of the proposal and that the notice published in the Federal Register

did not provide sufficient detail to allow the contractor to evaluate

the suitability of the litter for inclusion on the Procurement List.

When it adds items to the Procurement List, the Committee is required

to use a rulemaking process set forth in 5 U.S.C. 553 which includes

notice of its intent in the Federal Register, which in turn is

considered under the law to be adequate notice to all affected parties.

The Committee believes that its notices contain all the elements which

the law requires for a notice of proposed rulemaking.

The second contractor also challenged the adequacy of the

Committee's determinations on suitability and impact of the addition to

the Procurement List on the contractor, as the contractor had not

provided information on these two points. The Committee, following its

usual practice, based its suitability determination on an inspection of

the nonprofit agency arranged by DPSC, a separate inspection by the

central nonprofit agency which represents the nonprofit agency in the

Committee's program, and the nonprofit agency's long record of

successful production of a variety of items including a comparable

litter. The basis for the Committee's determination that addition of

the litter to the Procurement List will not have a severe adverse

impact on either contractor was described earlier in this notice. The

Committee does not believe that additional information from the

contractor would be likely to alter either determination, and the delay

necessary for the information to be provided would frustrate the

purpose of the Committee's program, to create employment for blind

people, as DPSC needs to procure litters before the information can be

provided. The Committee's regulations provide for a reconsideration of

its decision if information can be provided which would significantly

affect any of the factors on which the decision was made, so the

contractor will still be able to present any significant information it

finds.

The second contractor's claim that addition of the litter to the

Procurement List will have an adverse effect on national security is

based on the fact that as a defense contractor the second contractor is

required to be able to provide additional quantities of the litter in

the event of a national emergency. The nonprofit agency which will

produce the litter is also required to possess this capacity, and the

surveys which were done on it took this factor into account. As the

contractor will still be able to bid on the non-DPSC part of the

Government requirement, it is unlikely that it will give up its

productive capabilities for the litter, and thus lose its capability to

contribute to the defense industrial base for the item, as it had

indicated it would do in response to the Committee's original proposal

to add the entire Government requirement for the litter to the

Procurement List.

After consideration of the material presented to it concerning

capability of qualified nonprofit agencies to provide the commodity,

fair market price, and impact of the addition on the current or most

recent contractors, the Committee has determined that the commodity

listed below is suitable for procurement by the Federal Government

under 41 U.S.C. 46-48c and 41 CFR 51-2.4. I certify that the following

action will not have a significant impact on a substantial number of

small entities. The major factors considered for this certification

were:

1. The action will not result in any additional reporting,

recordkeeping or other compliance requirements for small entities other

than the small organizations that will furnish the commodity to the

Government.

2. The action does not appear to have a severe economic impact on

current contractors for the commodity.

3. The action will result in authorizing small entities to furnish

the commodity to the Government.

4. There are no known regulatory alternatives which would

accomplish the objectives of the Javits-Wagner-O'Day Act (41 U.S.C. 46-

48c) in connection with the commodity proposed for addition to the

Procurement List.

Accordingly, the following commodity is hereby added to the

Procurement List:

Litter, Folding

6530-00-783-7205

(Requirements for the Defense Personnel Support Center only)

This action does not affect current contracts awarded prior to the

effective date of this addition or options exercised under those

contracts.

E.R. Alley, Jr.,

Deputy Executive Director.

[FR Doc. 94-28053 Filed 11-10-94; 8:45 am]

BILLING CODE 6820-33-P