Panoptic Enterprises' FEDERAL CONTRACTS DISPATCH
DATE: April 22, 2005
SUBJECT: Defense Federal Acquisition Regulation Supplement (DFARS); Unique Item Identification and Valuation
SOURCE: Federal Register, April 22, 2005, Vol. 70, No. 77, page 20831
AGENCIES: Department of Defense (DOD)
ACTION: Final Rule
SYNOPSIS: DOD is finalizing, with changes, the December 30, 2003, interim rule that amended DFARS 211.274, Item Identification and Valuation, and DFARS 252.211-7003, Item Identification and Valuation, to require unique item identification and valuation of items with an acquisition cost of $5,000 or more.
EDITOR'S NOTE: For more on the interim rule being finalized, see the December 30, 2003, FEDERAL CONTRACTS DISPATCH “Defense Federal Acquisition Regulation Supplement (DFARS); Unique Item Identification and Valuation.”
For more on the original interim rule, which led to the December 30, 2003, 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."
DOD’s unique item identification site is http://www.acq.osd.mil/dpap/uid.
EFFECTIVE DATE: April 22, 2005.
FOR FURTHER INFORMATION CONTACT: Michele Peterson, Defense Acquisition Regulations Council, OUSD (AT&L) DPAP (DAR), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062; 703-602-0311; fax: 703-602-0350.
SUPPLEMENTARY INFORMATION: On October 10, 2003, DOD published an interim rule that required 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. DOD held a public meeting on November 6, 2003, to discuss the interim rule. Because of the significance of the comments on the October 10, 2003, interim rule and at the November 6, 2003, meeting, DOD issued a second interim rule on December 30, 2003, and invited further comments. Thirteen respondents submitted comments on the second interim rule and, as a result of the comments, DOD has finalized the second interim rule with the following significant changes:
- DFARS 211.274-1, General, is added. It explains that “unique item identification and valuation is a system of marking and valuing items delivered to DoD that will enhance logistics, contracting, and financial business transactions supporting the United States and coalition troops.”
- DFARS 211.274-1, Item Identification, is redesignated as DFARS 211.274-2, Policy for Unique Item Identification, and it clarifies that unique item identification is required for all delivered items with a unit acquisition cost of $5,000 or more; items less than $5,000 when identified by the requiring activity as serially managed, mission essential, or controlled inventory; items for which the government’s unit acquisition cost is less than $5,000 when the requiring activity determines that permanent identification is required (this is added by the final rule); and any DOD serially managed subassembly, components, or parts embedded within a delivered item, and the parent item that contains the embedded subassembly, component, or part, regardless of value (the “parent item” requirement is added by the final rule). DFARS 211.274-2 also includes exceptions for items determined by the head of the agency to be for use to support a contingency operation or to facilitate defense against or recovery from nuclear, biological, chemical, or radiological attack; or a determination and findings is executed concluding that it is more cost effective for the government to assign, mark, and register the unique item identification after delivery of an item acquired from a small business or a commercial item.
- DFARS 211.274-2, Government’s Unit Acquisition Cost, is redesignated as DFARS 211.274-3, Policy for Valuation, and it is revised to clarify the government’s policy (“it is DOD policy that contractors shall be required to identify the government's unit acquisition cost...for all items delivered, even if none of the criteria for placing a unique item identification mark applies”).
- DFARS 211.274-3, Contract Clause, is redesignated as DFARS 211.274-4.
- DFARS 252.211-7003, Item Identification and Valuation, is revised to delete the definition for “common accepted commercial marks” and the requirement for commonly accepted commercial marks for items that are not required to have unique identification. Instead, the final rule requires unique item identification for commercial items unless DOD determines it is more cost effective for itself to mark the commercial items.
- Alternate I to DFARS 252.211-7003 is added. It is used when an exception in DFARS 211.274-2 applies, or none of the criteria for placing a unique item identification apply. It merely requires the contractor to report the government’s unit acquisition cost.
FOR FURTHER INFORMATION CONTACT: Panoptic Enterprises at 703-451-5953.
Copyright 2005 by Panoptic Enterprises. All Rights Reserved.
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