DATE: June 20, 2003

SUBJECT: Defense Federal Acquisition Regulation Supplement (DFARS); Deletion of Federal Prison Industries Clearance Exception

SOURCE: Federal Register, June 20, 2003, Vol. 68, No. 119, page 36944

AGENCIES: Department of Defense (DOD)

ACTION: Final Rule

SYNOPSIS: DOD is revising DFARS 208.606, Exceptions, to delete obsolete text pertaining to an exception from requirements for purchase of products from Federal Prison Industries, Inc. (FPI).

EFFECTIVE DATE: June 20, 2003.

FOR FURTHER INFORMATION CONTACT: Susan Schneider, Defense Acquisition Regulations Council, OUSD(AT&L)DPAP(DAR), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062; 703-602-0326; fax: 703-602-0350. Cite "DFARS Case 2003-D006" when referring to this final rule.

SUPPLEMENTAL INFORMATION: FPI is a mandatory acquisition program, and a clearance from FPI is required by FAR 8.605, Clearances, before supplies that are on FPI's schedule may be acquired from sources other than FPI. However, FAR 8.606, Exceptions, provides five exceptions to the clearance requirement, including small dollar purchases.

When FPI's small dollar exception applied to purchases of $25 or less that required delivery within 10 days, DOD received a blanket waiver from FPI for all purchases of $250 or less that require delivery within 10 days (see the January 31, 2000, FEDERAL CONTRACTS DISPATCH "Department of Defense; Raising the Threshold for Federal Prison Industries (FPI) Exceptions"). DFARS 208.606(1) implemented this blanket waiver (see the March 16, 2000, FEDERAL CONTRACTS DISPATCH "Defense Federal Acquisition Regulation Supplement (DFARS); Federal Prison Industries (FPI) Waiver Threshold").

The FPI Board of Directors recently adopted a resolution increasing the small dollar exception threshold from $25 to $2,500, and eliminating the requirement that delivery be within 10 days. On May 22, 2003, the Federal Acquisition Regulation (FAR) Council published FAC 2001-14, and Item V implemented the FPI Board's resolution by amending FAR 8.606 (see the May 22, 2003, FEDERAL CONTRACTS DISPATCH "Federal Acquisition Circular (FAC) 2001-14, Miscellaneous Amendments").

Since the $2,500 threshold now in FAR 8.606 applies to all federal agencies, and the $2,500 threshold is greater than the $250 threshold previously authorized DOD, the text in DFARS 208.606(1) is no longer necessary and is deleted.

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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