Federal Acquisition Regulation; Evidence of Shipment in Electronic Data Interchange (EDI) Transactions

SUMMARY: The Civilian Agency Acquisition Council and the Defense

Acquisition Regulations Council are proposing to amend the Federal

Acquisition Regulation (FAR) to facilitate the use of electronic data

interchange (EDI) transactions and to streamline the payment process

when supplies are purchased free on board (f.o.b.) destination with

inspection and acceptance at origin. This regulatory action was not

subject to Office of Management and Budget review under Executive Order

12866, dated September 30, 1993. This is not a major rule under 5

U.S.C. 804.

DATES: Comments should be submitted on or before March 30, 1998 to be

considered in the formulation of a final rule.

ADDRESSES: Interested parties should submit written comments to:

General Services Administration, FAR Secretariat (MVR), 1800 F Street,

NW, Room 4035, Washington, DC 20405. E-mail comments submitted over

Internet should be addressed to: [email protected]. Please cite

FAR case 97-011 in all correspondence related to this case.

FOR FURTHER INFORMATION CONTACT: The FAR Secretariat, Room 4035, GS

Building, Washington, DC 20405 (202) 501-4755 for information

pertaining to status or publication schedules. For clarification of

content, contact Ms. Linda Klein, Procurement Analyst, at (202) 501-

3775. Please cite FAR case 97-011.

SUPPLEMENTARY INFORMATION:

A. Background

This proposed rule amends the clause at FAR 52.247-48 to eliminate

the current barriers to full implementation of electronic data

interchange (EDI) in certain contracts awarded on an f.o.b. destination

basis. Presently, if a contract is awarded on an f.o.b. destination

basis, and if transportation is accomplished by a common carrier, the

contractor is required to provide, with the invoice, a signed copy of

the commercial bill of lading indicating the carriers receipt of the

supplies or to furnish the information electronically as evidence of

shipment. Additionally, if transportation is accomplished by other than

a common carrier or parcel post, the contractor is required to provide,

with the invoice, a copy of the appropriate delivery document showing

receipt at the destination specified in the contract. To eliminate

current barriers to transmission of signed bills of lading, or other

required delivery documentation through EDI, this rule eliminates any

requirement for contractors to provide evidence of shipment. However,

contractors will be required to retain, and to make available to the

Government for review as necessary, the evidence of shipment

documentation for a period of 4 years after contract completion.

B. Regulatory Flexibility Act

This proposed rule is not expected to have a significant economic

impact on a substantial number of small entities within the meaning of

the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because the rule

applies to a limited number of EDI transactions, e.g., when supplies

are purchased f.o.b. destination, but inspection and acceptance will be

at origin. Therefore, the rule is estimated to affect only a small

number of entities, both large and small. For DoD, less than 1 percent

(129) of all f.o.b. destination supply contracts over $25,000 (14,664)

are likely to be affected by this rule. Therefore, an Initial

Regulatory Flexibility Analysis has not been performed. Comments from

small entities concerning the affected FAR subpart will be considered

in accordance with 5 U.S.C. 610 of the Act. Such comments must be

submitted separately and should cite 5 U.S.C. 601, et seq. (FAR case

97-011), in correspondence.

C. Paperwork Reduction Act

The Paperwork Reduction Act (44 U.S.C. 3501, et seq.) is deemed to

apply because the proposed rule contains information collection

requirements. It is estimated that the revision to the FAR clause at

52.247-48 will slightly increase, by 45 hours, to 74,795 hours, the

annual paperwork burden associated with FAR Part 47 and related

provisions and clauses approved by the Office of Management and Budget

(OMB) under OMB Control Number 9000-0061.

List of Subjects in 48 CFR Part 52

Government procurement.

Dated: January 21, 1998.

Jeremy F. Olson,

Acting Director, Federal Acquisition Policy Division.

Therefore, it is proposed that 48 CFR Part 52 be amended as set

forth below:

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

1. The authority citation for 48 CFR Part 52 continues to read as

follows:

Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42

U.S.C. 2473(c).

2. Section 52.247-48 is revised to read as follows:

52.247-48 F.o.b. Destination--Evidence of Shipment.

As prescribed in 47.305-4(c), insert the following clause:

F.O.B. Destination--Evidence of Shipment (Date)

(a) If this contract is awarded on a free on board (f.o.b.)

destination basis, the Contractor--

(1) Shall not submit an invoice for payment until the supplies

covered by the invoice have been shipped; and

(2) Shall retain, and make available to the Government for

review as necessary, the following evidence of shipment

documentation for a period of 4 years after completion of the

contract:

(i) If transportation is accomplished by common carrier, a

signed copy of the commercial bill of lading for the supplies

covered by the Contractor's invoice, indicating the carrier's intent

to ship the supplies to the destination specified in the contract.

(ii) If transportation is accomplished by parcel post, a copy of

the certificate of mailing.

(iii) If transportation is accomplished by other than common

carrier or parcel post, a copy of the delivery document showing

receipt at the destination specified in the contract.

(b) The Contractor is not required to submit evidence of

shipment documentation with its invoice.

(End of clause)

[FR Doc. 98-1909 Filed 1-26-98; 8:45 am]

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