ITAA asks for delay on identifiers on Defense goods

A new Defense Department rule could require contractors to develop a government-only line of business at significant cost to the government, according to the Information Technology Association of America, an Arlington, Va., trade group.

The interim rule applies to all Defense Department solicitations issued on or after Jan. 1. It requires contractors to mark items delivered to DOD with unique identifiers such as bar codes or radio frequency ID tags. Contractors are also required to identify the unit cost of all hardware items delivered under a contract.

The requirement was instituted to improve management of Defense assets, officials said.

"DOD considers this rule to be a strategic imperative, necessary to efficiently move supplies to war fighters," Michele Peterson, executive editor of the Defense Acquisition Regulations Council, wrote in the Federal Register when the interim rule was published in December.

In its comments on the interim rule, ITAA officials asked for implementation to be pushed back until March 1, 2005. They said the rule would require commercial IT companies to significantly change the way they do business if they want to continue to supply commercial IT solutions to DOD.

"ITAA shares the DOD's view that there needs to be significant improvement in the manner in which the department moves supplies to war fighters and tracks financial business transactions, but we are concerned that imposition of the interim rule at this time in commercial acquisitions will pose a significant hardship on many commercial suppliers," said ITAA President Harris Miller.

ITAA officials said the rule might be inconsistent with legal requirements that agencies revise, to the maximum extent possible, their procurement policies, practices and procedures to make it easier for government agencies to buy commercial items.

ITAA also asked DOD to form a working group, that will include participants from commercial companies, to determine what methods would require the least amount of change to commercial practices while still satisfying Defense Department needs.

"The current interim rule seems to impose most of the burden, if not all, on the vendor, and may result in vendors having to adopt a 'government only' line of products at significant expense to both the vendor and the government," Miller said.

The interim rule requires single hardware articles or units formed by a grouping of parts to be marked with unique identification when they cost $5,000 or more. Department officials may also require unique identification on some items costing less than $5,000. The contractor is required to provide the unique identification mark and the acquisition cost at the time of delivery.

DOD unique item identifiers must have machine-readable data elements that will distinguish each item from all other like and unlike items. Accepted machine-readable data elements include bar codes, contact memory buttons, radio frequency identification or optical memory cards, the interim rule said.

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