DATE: December 19, 2003

SUBJECT: Department of Agriculture; Guidelines for Designating Biobased Products for Federal Procurement

SOURCE: Federal Register, December 19, 2003, Vol. 68, No. 244, page 70730

AGENCIES: Office of Energy Policy and New Uses, U.S. Department of Agriculture (USDA)

ACTION: Notice of Proposed Rulemaking (NPRM)

SYNOPSIS: USDA is proposing to establish guidelines for designating items made from biobased products that would be given procurement preference as required under Section 9002 of Public Law 107-171, the Farm Security and Rural Investment Act of 2002 (FSRIA).

DATES: Comments must be submitted on or before February 17, 2004.

ADDRESSES: Mail comments to Marvin Duncan, USDA, Office of the Chief Economist, Office of Energy Policy and New Uses, Room 361, 300 Seventh Street SW, Washington, DC 20024; or e-mail to: fb4p@oce.usda.gov (include name and address in the message and "Proposed Guidelines" in the subject line).

FOR FURTHER INFORMATION CONTACT: Marvin Duncan by e-mail at mduncan@oce.usda.gov, or by phone at 202-401-0532.

SUPPLEMENTAL INFORMATION: On September 14, 1998, Executive Order 13101, Greening the Government Through Waste Prevention, Recycling, and Federal Acquisition, was issued to encourage the procurement of biobased products by federal agencies. (EDITOR'S NOTE: Executive Order 13101 is implemented in Federal Acquisition Regulation (FAR) Subpart 23.7, Contracting for Environmentally Preferable and Energy-Efficient Products and Services. For more on the implementation, see the June 6, 2000, FEDERAL CONTRACTS DISPATCH "Federal Acquisition Circular (FAC) 97-18, Miscellaneous Amendments," particularly Item 3.)

In 2002, the FSRIA was enacted. Section 9002 of FSRIA requires federal agencies to purchase biobased products for all items costing over $10,000, or when the quantities of functionally equivalent items purchased over the preceding fiscal year equaled $10,000 or more, unless the items are not reasonably available, fail to meet applicable performance standards, or are available only at an unreasonable price.

Section 9002 differs from Executive Order 13101 in that (1) they use slightly different definitions of the term "biobased product;" (2) Executive Order 13101 was optional, but Section establishes a mandatory procurement preference for designated biobased items (with limited exceptions); and (3) Executive Order 13101 envisioned a list of specific products that are considered to be biobased, but Section 9002 requires guidelines designating "items which are or can be produced with biobased products" and recommended procurement practices for both biobased products and items containing biobased products.

The legislative history of Title IX of FSRIA suggests that Congress had in mind three primary objectives when enacting Section 9002:

  1. Improve demand for biobased products. This would increase domestic demand for many agricultural commodities that can serve as feedstocks for production of biobased products, and encourage substitution of products with a more benign or beneficial environmental impact, as compared to the use of fossil energy-based products.

  2. Spur the development of value-added agricultural processing and manufacturing in rural communities. Since biobased feedstocks are largely produced in rural settings and, because of their bulk, require pre-processing or manufacturing close to where they are grown, increased dependence on biobased products appears likely to increase the amount of pre-processing and manufacturing of biobased products in rural regions. This trend would help to create new investment, job formation, and income generation in these rural regions.

  3. Enhance the nation's energy security by substituting domestically produced biobased products for fossil energy-based products derived from imported oil and natural gas.

To implement Section 9002, USDA would publish proposed guidelines in Title 7 of the Code of Federal Regulations (CFR) as a new Part 2902, Guidelines for Designating Biobased Products for Federal Procurement, which would consist of the following:

Subpart A -- General

Subpart B -- Biobased Product Eligibility for Federal Preference

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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