IV. Regulatory Flexibility Act

DoD has prepared a final regulatory flexibility analysis consistent with 5 U.S.C. 604. A copy of the analysis may be obtained from the individual specified herein. The analysis is summarized as follows:

The objective of this rule is to provide DoD with a single repository for reporting loss of Government property to improve accountability and control of DoD assets and contractor oversight.

None of the comments from the three respondents was in response to the initial regulatory flexibility analysis. Therefore, there is no change to the rule in this regard.

The rule applies to DoD contractors provided with Government property. The clause at 252.245-7002, Reporting Loss of Government Property, requires the contractor to use the Defense Contract Management Agency eTools software application for reporting loss of Government property. The eTools software can be accessed from the DCMA homepage External Web Access Management application at http://www.dcma.mil/aboutetools.cfm.

Unless otherwise provided for in the contract, these requirements do not apply to normal and reasonable inventory adjustments, i.e., losses of low-risk consumable material such as common hardware, as agreed to by the contractor and the Government property administrator.

Such losses are typically a product of normal process variation. The contractor shall ensure that its property management system provides adequate management control measures, e.g., statistical process controls, as a means of managing such variation.

Reporting requirements apply to losses of Government property outside normal process variation, e.g., because of--

  (1) Theft;

  (2) Inadequate storage;

  (3) Inadequate security; or

  (4) "Acts of God."

This 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 any start-up costs that contractors will incur to comply with the rule are expected to be minimal. The rule is expected to have a positive or beneficial impact on small entities by making available a Government-provided software application to use for reporting purposes. The rule does not duplicate, overlap, or conflict with any other Federal rules.