Panoptic Enterprises' FEDERAL CONTRACTS DISPATCH
DATE: December 30, 2003
SUBJECT: Defense Federal Acquisition Regulation Supplement (DFARS); Unique Item Identification and Valuation
SOURCE: Federal Register, December 30, 2003, Vol. 68, No. 249, page 75196
AGENCIES: Department of Defense (DOD)
ACTION: Interim Rule
SYNOPSIS: DOD is amending DFARS 211.274, Item Identification and Valuation, and DFARS 252.211-7003, Item Identification and Valuation, in response to comments submitted in response to the interim rule published October 10, 2003, that required unique item identification and valuation of items with an acquisition cost of $5,000 or more.
EDITOR'S NOTE: For more on the original interim rule, see the October 10, 2003, FEDERAL CONTRACTS DISPATCH "Defense Federal Acquisition Regulation Supplement (DFARS); Unique Item Identification and Valuation."
For more on the meeting held to discuss the original interim rule, see the October 24, 2003, FEDERAL CONTRACTS DISPATCH “Defense Federal Acquisition Regulation Supplement (DFARS); Unique Item Identification and Valuation Meeting.”
DATES: The interim rule is effective January 1, 2004, and applies to all solicitations issued on or after January 1, 2004. Comments on the interim rule must be submitted on or before March 1, 2004.
ADDRESSES: Respondents may submit comments directly on the web site at http://emissary.acq.osd.mil/dar/dfars.nsf/pubcomm. As an alternative, respondents may e-mail comments to: firstname.lastname@example.org. Also, respondents who cannot submit comments through the web site or by e-mail may submit comments to Defense Acquisition Regulations Council, Attn: Steven Cohen, OUSD(AT&L)DP(DAR), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062, or by fax to 703-602-0350. Cite "DFARS Case 2003-D081" when making comments on this interim rule.
FOR FURTHER INFORMATION CONTACT: Steven Cohen, 703-602-0293.
SUPPLEMENTAL INFORMATION: The Secretary of Defense has determined that the implementation of unique identification (UID) is a strategic imperative, necessary to efficiently move supplies to warfighters. On October 10, 2003, DOD published an interim rule that added to the DFARS requirements for contractors to uniquely mark items and to provide for identification of the government's acquisition cost of items that are to be delivered to DOD, and held a public meeting on November 6, 2003, to discuss the interim rule. On Twenty-six respondents submitted comments on the interim rule and, as a result of the significance of the comments, has issued a second interim rule and is inviting further comments.
The following are the significant differences between the first and second interim rule:
- Because of difficulties and confusion with the policy added to DFARS 204.7104-1, Criteria for Establishing, and DFARS 204.7104-2, Numbering Procedures, concerning contract line and subline item number structure, the policy has been removed. The introduction to the interim rule states, "The existing policy in DFARS Subpart 204.71 [Uniform Contract Line Item Numbering] for contract line, subline, and exhibit line item structure is sufficient for the requirements of this rule. Valuation information will be included in the Material Inspection and Receiving Report provided at the time of delivery." In addition, DFARS 252.211-7003 is amended to specify that the all required data will be submitted in the Material Inspection and Receiving Report.
- To address concerns raised regarding the methodology for assessing the government's acquisition cost of items under cost-type contracts ("the contractor's fully burdened actual cost for each item, plus a proportionate amount of the fee at the time the item is delivered to the government"), DFARS 211.274-2, Government's Unit Acquisition Cost, is revised to redefine the unit acquisition cost for cost-type line, subline, or exhibit line items as "the contractor's estimated fully burdened unit cost to the government for each item at the time of delivery."
- Because of confusion regarding the definitions of "unique item identifier," "unique item identification," and the DOD data elements of unique identification, DFARS 252.211-7003 is amended to add a definition of "DOD unique item identification" ("marking an item with a unique item identifier that has machine-readable data elements to distinguish it from all other like and unlike items"), and to clarify the definition of "DOD recognized unique identification equivalent" ("a unique identification method that is in commercial use and has been recognized by DOD. All DOD recognized unique identification equivalents are listed at http://www.acq.osd.mil/uid").
- Because of confusion as to which items specifically require unique identification and which do not, DFARS 211.274-1, Item Identification, and DFARS 252.211-7003 are revised to clarify that (1) all items over $5,000 in value require unique identification, (2) items under $5,000 requiring unique identification must be identified in paragraph (c)(1)(ii) of DFARS 252.211-7003, and (3) embedded items that require unique identification will be identified in a Contract Data Requirements List or other exhibit that is cited in paragraph (c)(1)(iii) of DFARS 252.211-7003.
- To alleviate confusion regarding the requirement in DFARS 211.274-2 and DFARS 252.211-7003 that acquisition cost under a fixed-price contract be identified at contract award, but that acquisition cost under a cost-reimbursement contract be identified at the time of delivery, the policy is revised to require the contractor to provide the unique identification and the acquisition cost at the time of delivery.
- The definition of "item" in DFARS 252.211-7003 is revised to "a single hardware article or unit formed by a grouping of subassemblies, components, or constituent parts required to be delivered in accordance with the terms and conditions of this contract." This change is to clarify that software developed under research and development contracting is not considered an "item" (the original definition did not address software).
- The word "value" has been removed throughout the interim rule. For example, the first interim rule referred to "items valued at $5,000" and "items valued below $5,000." These have been replaced with "items for which the government's unit acquisition cost is $5,000 or more" and "items for which the government's unit acquisition cost is less than $5,000."
FOR FURTHER INFORMATION CONTACT: Panoptic Enterprises at 703-451-5953 or by e-mail to Panoptic@FedGovContracts.com.
Copyright 2003 by Panoptic Enterprises. All Rights Reserved.
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