Replacement of Personal Property Pursuant to the Exchange/Sale Authority

GENERAL SERVICES ADMINISTRATION

41 CFR Parts 101-1 and 101-46

RIN 3090-AG50

Replacement of Personal Property Pursuant to the Exchange/Sale

Authority

AGENCY: Office of Governmentwide Policy, GSA.

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: This proposed rule amends regulations issued by GSA for

replacement of personal property pursuant to the exchange/sale

authority. The exchange/sale authority permits executive agencies when

acquiring replacement personal property, to exchange or sell similar

items and apply the exchange allowance or proceeds of sale in whole or

in part payment for the replacement property acquired. Changes have

been made to incorporate plain English principles, streamline the

narrative, define key terms, update organizational references, delete

outdated regulatory references, delegate authority to executive

agencies to approve deviations under certain conditions, and reduce

restrictions and limitations on use of the authority.

DATES: Comments must be received on or before October 8, 1997.

ADDRESSES: Written comments should be sent to the Personal Property

Management Policy Division (MTP), Office of Governmentwide Policy,

General Services Administration, 1800 F St., NW., Washington, DC 20405.

FOR FURTHER INFORMATION CONTACT:

Martha Caswell, Director, Personal Property Management Policy Division

(202-501-3828).

SUPPLEMENTARY INFORMATION:

A. The General Services Administration (GSA) has determined that

this rule is not a significant regulatory action for the purposes of

Executive Order 12866 of September 30, 1993.

B. Regulatory Flexibility Act

This rule is not required to be published in the Federal Register

for public comment. Therefore, the Regulatory Flexibility Act does not

apply.

C. Paperwork Reduction Act

The Paperwork Reduction Act does not apply because the proposed

revisions do not impose recordkeeping or information collection

requirements, or the collection of information from offerors,

contractors, or members of the public which require the approval of OMB

under 44 U.S.C. 501 et seq. This rule also is exempt from Congressional

review prescribed under 5 U.S.C. 801 since it relates solely to agency

management and personnel. This rule is written in a ``plain English''

style.

What is the ``plain English'' style of regulation writing?

The ``plain English'' style of regulation writing is a new, simpler

to read and understand, question and answer regulatory format.

How does the plain English style of regulation writing affect

employees?

A question and its answer combine to establish a rule. The employee

and the agency must follow the language contained in both the question

and its answer.

List of Subjects in 41 CFR Parts 101-1 and 101-46:

Exchange/sale of government property, government property

management.

Therefore, it is proposed that 41 CFR Ch. 101 be amended set forth

below:

PART 101-1--INTRODUCTION

1. The authority citation for 41 CFR parts 101-1 and 101-46

continues to read as follows:

Authority: Sec. 205(c), 63 Stat. 390 (40 U.S.C. 486(c)).

2. Section 101-1.110(a) is revised to read as follows:

[[Page 47180]]

Sec. 101-1.110 Deviations.

(a) In the interest of establishing and maintaining uniformity to

the greatest extent feasible, except as otherwise provided, deviations;

i.e., the use of any policy or procedure in any manner that is

inconsistent with the policy or procedure prescribed in the Federal

Property Management Regulations, are prohibited unless such deviations

have been requested from and approved by the Administrator of General

Services or his authorized designee. Deviations may be authorized by

the Administrator of General Services or his authorized designee when

so doing will be in the best interest of the Government. Requests for

deviations shall clearly state the nature of the deviation and the

reasons for such special action.

* * * * *

3. Part 101-46 is revised to read as follows:

PART 101-46--REPLACEMENT OF PERSONAL PROPERTY PURSUANT TO THE

EXCHANGE/SALE AUTHORITY

Sec.

101-46.000 What is the purpose and scope of this part?

101-46.001 What are the definitions of some of the key terms used

in this part?

101-46.001-1 Acquire.

101-46.001-2 Combat material.

101-46.001-3 Exchange.

101-46.001-4 Exchange/sale.

101-46.001-5 Executive agency.

101-46.001-6 Federal agency.

101-46.001-7 Historic item.

101-46.001-8 Replacement.

101-46.001-9 Similar.

101-46.002-How do you request deviations and who can approve them? .

101-46.002-1 Can you approve requests for deviations from this Part

101-46? .

101-46.002-2 Does GSA approve requests for deviations from this

Part 101-46?

Subpart 101-46.1--[Reserved]

Subpart 101-46.2--Authorization

101-46.200 How do you determine whether to do an exchange or sale?

101-46.201 When must you make a reimbursable transfer to another

Federal agency when using the exchange/sale authority, to what other

organizations may you make a reimbursable transfer, and what are the

conditions for a reimbursable transfer?

101-46.202 What are the limitations on the exchange/sale of

personal property?

101-46.203 What special authorizations have been made for use of

the exchange/sale authority?

Subpart 101-46.3--Exchange and Sale Procedures

101-46.300 What are the exchange procedures?

101-46.301 What are the sales procedures?

101-46.302 What are the accounting requirements for the proceeds of

sale?

Authority: Sec. 205(c), 63 Stat. 390 (40 U.S.C. 486(c)).

Sec. 101-46.000 What is the purpose and scope of this part?

This part prescribes regulations for use by you (an executive

agency) when using the exchange/sale authority of section 201(c) of the

Federal Property and Administrative Services Act of 1949, 63 Stat. 384,

as amended (40 U.S.C. 481(c)). The regulations apply to all U.S.

Government-owned personal property worldwide. For the exchange/sale of

aircraft parts and hazardous materials, you must meet the requirements

in this part and in parts 101-37 and 101-42 of this chapter,

respectively.

Sec. 101-46.001 What are the definitions of some of the key terms used

in this part?

Sec. 101-46.001-1 Acquire.

Acquire means procure or otherwise obtain personal property,

including by lease.

Sec. 101-46.001-2 Combat material.

Combat material means arms, ammunition, and implements of war

listed in the U.S. munitions list (22 CFR part 121).

Sec. 101-46.001-3 Exchange.

Exchange means to replace a non-excess or non-surplus personal

property item by trade or trade-in with the supplier of the replacement

item when the allowance from the item being replaced is used to reduce

or offset the cost of the replacement item. The supplier may be a

Government agency, commercial or private organization, or an

individual.

Sec. 101-46.001-4 Exchange/sale.

Exchange/sale means to exchange or sell a non-excess or non-surplus

personal property item and apply the exchange allowance or proceeds of

sale in whole or in part payment for the acquisition of a similar item.

Sec. 101-46.001-5 Executive agency.

Executive agency means any executive department or independent

establishment in the executive branch of the Government, including any

wholly owned Government corporation.

Sec. 101-46.001-6 Federal agency

Federal agency means any executive agency or any establishment in

the legislative or judicial branch of the Government (except the

Senate, the House of Representatives, and the Architect of the Capitol

and any activities under his direction).

Sec. 101-46.001-7 Historic item.

Historic item means property having added value for display

purposes because its historical significance is greater than its fair

market value for continued use. Items that are commonly available and

remain in use for their intended purpose, such as military aircraft

still in use by active or reserve units, are not historic items.

Sec. 101-46.001-8 Replacement.

Replacement means the process of acquiring property specifically to

be used in place of property which is still needed but will no longer

adequately perform all the tasks for which it is used.

Sec. 101-46.001-9 Similar.

Similar means that the acquired item and replaced item:

(a) Are identical; or

(b) Are designed and constructed for the same specific purpose; or

(c) Both constitute parts or containers for identical or similar

end items; or

(d) Both fall within a single Federal Supply Classification (FSC)

group of property that is eligible for handling under the exchange/sale

authority.

Sec. 101-46.002 How do you request deviations and who can approve

them?

General provisions for deviations from the Federal Property

Management Regulations are found in Sec. 101-1.110 of this chapter.

Provisions for deviations from the regulations in this part are

presented in this section.

Sec. 101-46.002-1 Can you approve requests for deviations from this

part 101-46?

The head of an executive agency may approve deviations within the

agency. This authority cannot be redelegated. Only onetime (individual)

deviations may be approved by the head of an executive agency. GSA must

approve any class deviations. The head of an executive agency may not

approve deviations that would permit the exchange/sale of weapons.

Also, neither the head of an executive agency nor GSA may approve

deviations from regulatory provisions that are mandated by statute

e.g., the requirement that the exchange/sale authority be used for

replacement property only, and the requirement that property replaced

and property acquired are similar. In the interest of maintaining

uniformity, deviations shall be kept to a minimum and the head of an

executive agency shall prescribe a formal procedure for the control of

deviations within the agency and furnish a copy of the procedure to

GSA. Also, a copy of each approved deviation shall be furnished to GSA

upon its approval.

[[Page 47181]]

Sec. 101-46.002-2 Does GSA approve requests for deviations from this

part 101-46?

If you choose not to exercise the authority delegated to you by GSA

in the preceding section, or if GSA approval of a deviation request is

necessary, you may request GSA approval of deviations by submitting a

complete written justification to the General Services Administration

(GSA), Office of Governmentwide Policy, Office of Transportation and

Personal Property (MT), Washington, DC 20405.

Subpart 101-46.1--[Reserved]

Subpart 101-46.2--Authorization

Sec. 101-46.200 How do you determine whether to do an exchange or

sale?

(a) When considering use of the exchange/sale authority, you must

determine which of the two methods--exchange or sale--will provide the

greater return for the Government. When estimating the return under

each method, consider all administrative and overhead costs.

(b) If the exchange allowance or estimated sales proceeds for an

item of property would be unreasonably low, the property should not be

processed under this part. Rather, you should process it according to

the regulations in part 101-43 (Utilization of Personal Property) of

subpart 101-45.9 (Abandonment or Destruction of Personal Property) of

this subchapter as applicable.

Sec. 101-46.201 When must you make a reimbursable transfer to another

Federal agency when using the exchange/sale authority, to what other

organizations may you make a reimbursable transfer, and what are the

conditions for a reimbursable transfer?

(a) If you have property you want to replace which is eligible for

exchange/sale, you should, to the maximum extent practicable, first

solicit Federal agencies known to use or distribute such property and,

if an agency wants it, arrange for a reimbursable transfer. Property

that is eligible for replacement under replacement standards prescribed

in subpart 101-25.4 of this chapter is not subject to this requirement.

(b) You may make a reimbursable transfer to not only other Federal

agencies, but also the Senate, the House of Representatives, the

Architect of the Capitol and any activities under the Architect's

direction, the District of Columbia, and mixed-ownership Government

corporations.

(c) When transferring property:

(1) You must do so under terms mutually agreeable to you and the

recipient; and

(2) You must not require reimbursement of an amount greater than

the estimated fair market value of the transferred property; and

(3) You must apply the transfer proceeds in whole or part payment

for property acquired to replace the transferred property.

Sec. 101-46.202 What are the limitations on the exchange/sale of

personal property?

This section describes: Types of property that are ineligible for

exchange/sale; conditions that you must meet when conducting an

exchange/sale transaction; and actions that are prohibited in an

exchange/sale transaction;

(a) What types of property are ineligible for exchange/sale?

(1) You must not use the exchange/sale authority for the following

FSC groups of personal property:

10 Weapons.

11 Nuclear ordnance.

12 Fire control equipment.

14 Guided missiles.

15 Aircraft and airframe structural components, except FSC class

1560 Airframe Structural Components.

42 Firefighting, rescue, and safety equipment.

44 Nuclear reactors (FSC class 4472 only).

51 Hand tools.

54 Prefabricated structure and scaffolding.

68 Chemicals and chemical products, except medicinal chemicals.

71 Furniture.

84 Clothing, individual equipment, and insignia.

(2) Also ineligible for exchange/sale are materials in the National

Defense Stockpile (50 U.S.C. 98-98h) or the Defense Production Act

inventory (50 U.S.C. App. 2093).

(b) What conditions must be met when conducting an exchange/sale

transaction? You may use the exchange/sale authority only if you meet

all six of the following conditions:

(1) The item exchanged or sold is similar to the item acquired; and

(2) The item exchanged or sold is not excess or surplus, and the

item acquired is needed for approved programs; and

(3) The number of items acquired must equal the number of items

replaced unless:

(i) The item(s) acquired perform all or substantially all of the

tasks for which the old item(s) would otherwise be used; or

(ii) The item(s) sold or exchanged and the item(s) acquired meet

the test for similarity specified at Sec. 101-46.001-9(iii) in that

they are a part(s) or container(s) for identical or similar end items;

and

(4) The item exchanged or sold was acquired for official use and

not for the principal purpose of exchange or sale; and

(5) You make a written administrative determination at the time of

exchange or sale (or at the time of acquisition if it precedes the

sale) to apply the exchange allowance or sale proceeds to the

acquisition of replacement property; and

(6) You document that the above conditions have been met, a along

with all other pertinent documentation, for any transactions under this

part.

(c) What actions are prohibited in an exchange/sale transaction?

(1) Acquisition of personal property not otherwise authorized.

(2) Acquisition of personal property in violation of:

(i) Any restriction on procurement of a commodity or commodities;

or

(ii) Any replacement policy or standard prescribed by the

President, the Congress, or the Administrator of General Services; or

(iii) Any contractual obligation.

(3) Transfer, exchange, or sale of Nuclear Regulatory Commission-

controlled materials unless you meet the requirements of Sec. 101-

42.1102-4 of this subchapter.

(4) Exchange or sale of controlled substances, unless you meet the

requirements of Sec. 101-42.1102-3 of this subchapter.

(5) Transfer, exchange, or sale of scrap materials, except in the

case of scrap gold for fine gold.

(6) Exchange or sale of property which was originally acquired as

excess or forfeited property or from another source other than new

procurement, unless such property has been in official use by the

acquiring agency for at least 1 year. You may exchange or sell

forfeited property in official use for less than 1 year if the head of

your agency certifies that a continuing valid requirement exists, but

the specific item in use no longer meets that requirement, and that

exchange or sale meets all other requirements of this part.

(7) Exchange or sale of property that is dangerous to public health

or safety without first rendering such property innocuous or providing

for adequate safeguards as part of the exchange/sale.

(8) Exchange or sale of combat material without first

demilitarizing it in accordance with applicable regulations.

(9) Exchange or sale of Flight Safety Critical Aircraft Parts

unless you meet the provisions of Sec. 101-37.610 of this chapter.

[[Page 47182]]

Sec. 101-46.203 What special authorizations have been made for use of

the exchange/sale authority?

(a) You may exchange, without monetary appraisal or detailed

listing or reporting, books and periodicals in your libraries not

needed for permanent use for other books and periodicals.

(b) In acquiring items for historical preservation or display at

Federal museums, you may exchange historic items in the museum property

account without regard to the FSC group or the requirement in Sec. 101-

46.202(b)(3), provided the exchange transaction is documented and

certified by the head of your agency to be in the best interests of the

Government and all other provisions of this part are met. The

documentation must contain a determination that the item exchanged and

the item acquired are historic items.

Subpart 101-46.3--Exchange and Sale Procedures

Sec. 101-46.300 What are the exchange procedures?

(a) Most exchange transactions should occur when a vendor delivers

a replacement item and removes the item being replaced. This is the

most efficient and cost effective exchange procedure because the item

being replaced may remain in use up to the time the replacement item is

delivered, when it is immediately removed by the vendor, and storage,

handling, and administrative costs are minimized.

(b) You may internally reassign eligible items no longer needed by

one organizational unit to another unit for exchange with the supplier

of a replacement item. Physical movement of the reassigned item is not

required unless specified by the contract.

Sec. 101-46.301 What are the sales procedures?

(a) The methods of sale, terms and conditions of sale, and forms

prescribed in Sec. 101-45.304 of this subchapter shall be used in the

sale of property being replaced, except for the provisions of Sec. 101-

45.304-2(a) of this subchapter regarding negotiated sales. Section

3709, Revised Statutes (41 U.S.C. 5), is applicable to such sales and

specifies the following conditions under which property being replaced

can be sold by negotiation:

(1) The reasonable value involved in the contract does not exceed

$500, or

(2) Otherwise authorized by law.

(b) Property eligible for exchange/sale may be sold by negotiation

at fixed prices in accordance with the provisions of Sec. 101-45.304-

2(b) of this subchapter.

Sec. 101-46.302 What are the accounting requirements for the proceeds

of the sale?

Except as otherwise authorized by law, proceeds from sales of

personal property disposed of under this part must be accounted for in

accordance with the General Accounting Office Policy and Procedures

Manual for Guidance of Federal Agencies, Title 7, Fiscal Procedures,

Section 5.5D.

Dated: September 2, 1997.

G. Martin Wagner,

Associate Administrator for Governmentwide Policy.

[FR Doc. 97-23669 Filed 9-5-97; 8:45 am]

BILLING CODE 6820-24-M