[Federal Register: September 13, 2005 (Volume 70, Number 176)]
[Rules and Regulations]
[Page 53955-53969]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr13se05-21]
[[Page 53955]]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF DEFENSE
48 CFR Parts 211, 212, and 252
[DFARS Case 2004-D011]
Defense Federal Acquisition Regulation Supplement; Radio
Frequency Identification
AGENCY: Department of Defense (DoD).
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: DoD has issued a final rule amending the Defense Federal
Acquisition Regulation Supplement (DFARS) to add policy pertaining to
package marking with passive radio frequency identification (RFID)
tags. The rule requires contractors to affix passive RFID tags at the
case and palletized unit load levels when shipping packaged operational
rations, clothing, individual equipment, tools, personal demand items,
or weapon system repair parts, to the Defense Distribution Depot in
Susquehanna, PA, or the Defense Distribution Depot in San Joaquin, CA.
EFFECTIVE DATE: November 14, 2005.
FOR FURTHER INFORMATION CONTACT: Ms. Michele Peterson, Defense
Acquisition Regulations Council, OUSD(AT&L)DPAP(DAR), IMD 3C132, 3062
Defense Pentagon, Washington, DC 20301-3062. Telephone (703) 602-0311;
facsimile (703) 602-0350. Please cite DFARS Case 2004-D011.
SUPPLEMENTARY INFORMATION:
A. Background
This final rule contains requirements for contractors to affix
passive RFID tags at the case and palletized unit load levels. The rule
requires that specified commodities delivered to specified DoD
locations be tagged with a readable passive RFID tag. The data encoding
schemes that contractors may write to the tags are identified in the
contract clause and are also located at http://www.dodrfid.org/tagdata.htm.
In addition, contractors must send an advance shipment
notice in accordance with the procedures at http://www.dodrfid.org/asn.htm
, to provide the association between the unique identification
encoded on the passive tag(s) and the product information at the
applicable case and palletized unit load levels.
DoD published a proposed rule at 70 FR 20726 on April 21, 2005, and
a correction to that rule at 70 FR 21729 on April 27, 2005. Thirty-
three sources submitted comments on the proposed rule. As a result of
these comments, the final rule contains additional changes that clarify
the shipment locations, the definitions of ``exterior container'' and
``palletized unit load,'' and the requirements for ensuring that data
encoded on each RFID tag are unique. An analysis of the comments is
provided below.
1. Comment: Electronic submission of the advance shipment notice
(ASN) SHALL be via Wide Area Work Flow (WAWF) per the DoD Suppliers
Passive Information Guide, Version 7.0. Other means of ASN is not
acceptable. We have been harping our contractors to get on board with
WAWF. Version 3.0.7 contains a tab for RFID data entry.
DoD Response: The current system for ASN submittal is WAWF.
2. Comment: Classes of supply do NOT address raw materials, i.e.
steel rods/bars/non-machined casings, etc., that are packed into
shipping containers. Reusable containers, i.e., Hardigg Containers, are
not addressed. What do contractors do when they have a contract for raw
steel bars or containers that are packed in wood boxes or fiberboard
containers for shipment?
DoD Response: Classes of supply definitions are normally used in
support of warfighter requirements, since these are the types of
materiel items normally ordered, stocked, and issued from DoD wholesale
supply activities to support warfighter needs. If there is a future
requirement for the tagging of raw materials for shipment to DoD
industrial activities, these requirements will be identified in future
DoD policy and DFARS issuances. Reusable containers such as Hardigg
containers are individual items when requisitioned--as such they can be
tagged if these items are components of DoD material such as tool sets.
As the technology matures and the DoD implementation progresses, future
DoD issuances may contain a requirement for tagging at individual item
level.
3. Comment: The DFARS states contractors MAY only need to change
their printer because MSL software is available that will print the MSL
with embedded RFID. This is fine for a shipping container or palletized
unit load, but what about the exterior containers on the pallet? They
need the passive tag, as well as the pallet.
DoD Response: The exterior containers do have to be affixed with
passive RFID tags, but an MSL may or may not be required and should be
affixed per the instructions contained in MIL-STD-129. A supplier could
use the same printer that prints their MSL tags to meet this
requirement or affix a blank label or an RFID tag itself.
4. Comment: Small businesses will go out of business. There are
many contractors, ``10 percenters'' as we call them, which work out of
their homes. The cost of implementing RFID will put them out. Material
costs to the Government will skyrocket. How are we addressing small
businesses?
DoD Response: DoD is implementing this through new contracts thus
allowing for the supplier to include the cost of compliance in the
contract, recognizing there may be a temporary cost burden until
contract payment. With respect to training, DoD has partnered with the
Procurement Technical Assistance Centers (PTAC) to provide training to
DoD small businesses. There are a variety of compliance options, which
range in cost. You may also use a 3rd party provider to meet the
requirement. Please reference the Web site, http://www.dodrfid.org, for
more information.
5. Comment: Need to point out that to use EPC data construct will
require the contractor to pay a royalty/membership fee to EPC, whereas
using DoD data construct is free.
DoD Response: Noted.
6. Comment: Contractors electing to use a packaging house still
need an interrogator to verify to the QAR the data is present. In
addition, contractors using a packaging house shall inform the packager
of the data to be encoded in the tags.
DoD Response: Suppliers can outsource the function of tag
verification to the tag manufacturer; however, the requirement in the
contract is still with the supplier. Suppliers who purchase pre-encoded
tags do need to know the hexadecimal representation of the RFID tag
number in order to transmit it to WAWF. This information will most
often need to be printed in human-readable format on the tag or can be
captured through an RFID reader or bar code scanner (if a bar code is
present).
7. Comment: Is the area of safety and homeland security addressed
regarding the use of RFID tags?
DoD Response: The passive RFID technology that DoD is acquiring is
commercially available technology and requires FCC approval for
production, sale, and use in the United States when used in accordance
with manufacturer's instructions. The DoD plans to conduct appropriate
testing to ensure that the technology is safe for use around munitions
and fuel prior to use around these materials. The DoD is working
closely with the DHS to ensure that the technology and standards are
compatible and adaptable.
8. Comment: Can the labels be tracked by the enemy or an outside
concerned source?
[[Page 53956]]
DoD Response: Any commercially available EPC compatible reader can
read the current version of the encoding on the current passive EPC
compatible RFID tag. It is important to note that the only information
on the tag is a purely binary serialization of the tag that has no
intelligence. The intelligence (data) relating to the contents of a
shipment is in the DoD logistics information systems behind the DoD
firewall. As RFID security risks are identified, DoD will continue to
review these issues from both an information assurance and operational
security standpoint.
9. Comment: Has there been a cost study done on the implementation
of this requirement? And if so who bares the cost? Future contract
winners, Government, etc?
DoD Response: The DoD has completed a regulatory flexibility
analysis that is available for review at http://www.dodrfid.org/regflex.htm.
DoD is implementing this requirement in new contracts
according to the Supplier Implementation Guide. This will allow
suppliers to negotiate the cost of compliance into the new contract.
10. Comment: Would it not be better to limit the use to only
commercial application items?
DoD Response: One of the DoD goals in adopting this technology is
to achieve a higher level of interoperability with our commercial
partners in the supply chain. This technology is simply a faster,
better way to acquire data for logistics and financial systems. RFID
will be a benefit for all items DoD manages, and the utilization of
RFID will facilitate accurate, hands-free data capture, in support of
business processes in an integrated DoD supply chain enterprise as an
integral part of a comprehensive suite of Automatic Identification
Technology (AIT).
11. Comment: I find some of your definitions to be confusing.
DoD Response: Noted. Please see comments 12-17 for further
clarification of your questions.
12. Comment: Delete the term ``Case'' and substitute ``Exterior
Pack: Package or container containing a single item or a number of unit
packs or intermediate packs ready for shipment and storage.''
DoD Response: The term ``Case'' is used to provide a common term of
reference for both commercial and DoD activities.
13. Comment: You can delete ``Exterior container'' if you use the
STANAG 4279 definition of: ``Exterior Pack: Package or container
containing a single item or a number of unit packs or intermediate
packs ready for shipment and storage.'' This is also referred to as the
NATO Glossary of Packaging Terms and Definitions, AAP-23 (Edition 2).
DoD Response: The definition used in the DFARS rule is as extracted
verbatim from MIL-STD-129.
14. Comment: If not, I think you need to change the last sentence
of the Exterior Container definition to read: ``An exterior container
may or may not be used as a shipping container.'' This is the correct
term used in MIL-STD-129.
DoD Response: The DFARS rule definition has been changed to read as
defined in MIL-STD-129.
15. Comment: Delete the last sentence of the definition of
Palletized Unit Load: ``A palletized load is not considered to be a
shipping container.'' The respondent does not see any reason for this
statement and it is not part of the definition.
DoD Response: The definition used in the DFARS rule is as extracted
verbatim from MIL-STD-129.
16. Comment: The shipping container is separately defined and for
all practical purposes is the same thing as the exterior container. I
think you confuse things by saying it is defined as an exterior
container. The STANAG defines ``Shipping container/A container which
meets minimum carrier regulations and is of sufficient strength by
reason of material, design, and construction to be shipped safely
without further packing.'' I think this is the term you are looking for
and would delete case and exterior pack/exterior container because it
is too confusing.
DoD Response: The definition used in the DFARS rule is as extracted
verbatim from MIL-STD-129.
17. Comment: As I understand what you are looking for you want the
following: a. One passive RFID tag on either the palletized unit load
or on the shipping container b. on all shipments to Susquehanna, PA
and/or San Joaquin, CA. The way you have it written it could be for
depot storage or for export shipment out of the CCP or for local
consumption in a depot repair program. If that is the intent, I think
you should also include Red River Army Depot (RRAD) because TACOM has
many items that we also ship to RRAD as one of our three primary depots
for storage. However, if the intent was to speed customer delivery
times in the E2E distribution thru the Container Consolidation Point,
then I think you need to be clearer in your identification of the
``ship to'' address.
DoD Response: The initial intent was to have selected classes/types
of material tagged for shipment to the major DLA receiving points at
San Joaquin and Susquehanna, since these two locations receive the
majority of the material inbound to the DLA. As the phased DoD
implementation plan for passive RFID continues, we will expand both the
types of material as well as the specific DoD receiving activities for
RFID tagged material--to include industrial/depot activities, like Red
River Army Depot. The specific ``ship to'' addresses have been posted
to the Web site, http://www.dodrfid.org.
18. Comment: A respondent suggested the use of an RFID application
to track warranty and other product information pertaining to purchases
made by DoD.
DoD Response: The current focus of DoD's RFID program is on the use
of RFID within the supply chain. Future uses of this technology will
continue to be explored.
19. Comment: During an RFID brief, a question arose. Some defense
contractors ``ship in place'' meaning their invoice is paid but the
material remains at their facility until the customer requests it.
Since the invoice is signed by an authorized Government Representative,
i.e. QAR, the material becomes Government property. When the customer
requests the material, a DD Form 1149 is processed and material shipped
to the using activity. Question: At what point will RFID tags be placed
on the shipping containers and/or pallets? Transmission of the data via
WAWF will do no good as the material has not left the facility and
contractors expect to be paid. Will the DFARS address ``Ship In Place''
shipments?
DoD Response: In this situation, WAWF will allow for two
transactions. The initial WAWF transaction for ``in-place'' receipt/
acceptance of the material (invoice signature by the QAR) and
subsequent payment via DFAS will not require the specific RFID
information. The appropriate RFID tag should be encoded and placed on
the shipment (case and/or palletized unit load) when the shipment is
prepared for movement to the ultimate consignee. When the material is
shipped to a DoD activity, the RFID tag is put on the second
transaction (Advance Shipment Notice) to facilitate receipt and input
to WAWF and to close out documents in the appropriate system. These
specifics should be detailed in the supplier contract.
20. Comment: Seeking clarification of the following: Page 20728 of
the Federal Register/Vol. 70, No. 76/Thursday, April 21, 2005/Proposed
Rules PART 252.211-7XXX in middle of the right hand column on this page
the last sentence under ``Exterior container''. It states, ``An
exterior container may not be used as a shipping container.'' Please
advise what is the intent of this
[[Page 53957]]
sentence. If a wood crate happens to be the exterior container and it
holds both unit and intermediate containers, why can it not be
classified as an exterior container?
DoD Response: The DFARS rule will be clarified and the sentence
will be changed to read ``An exterior container may or may not be used
as a shipping container,'' as per MIL-STD-129.
21. Comment: Seeking clarification of the following: Page 20728 of
the Federal Register/Vol. 70, No. 76/Thursday, April 21, 2005/Proposed
Rules PART 252.211-7XXX. In the next paragraph, ``Palletized unit
load'' states, ``A palletized load is not considered to be a shipping
container''. Why is it not to be considered a shipping container? I
realize it may not be enclosed, and not possibly suitable for stacking,
however it is still the ``container'' on which the items are being
shipped.
DoD Response: The definition used in the DFARS rule is as extracted
verbatim from MIL-STD-129. A palletized unit load can be shipped as is,
but is not considered a ``shipping container.'' in accordance with
definitions in MIL-STD-129. Palletized unit load has its own
definition.
22. Comment: Seeking clarification of the following: Page 20728 of
the Federal Register/Vol. 70, No. 76/Thursday, April 21, 2005/Proposed
Rules PART 252.211-7XXX. The next paragraph starting with, ``Passive
RFID tag'' indicates that (1) EPC Class 0 passive RFID tags that meet
the EPCglobal Class 0 specification are acceptable. I understood that
an amendment was being issued that no Class 0 passive RFID tags were
going to be acceptable for military shipments. Please advise.
DoD Response: DoD allows the use of either EPC-compliant Class 0 or
Class 1 passive RFID tags.
23. Comment: Seeking clarification of the following: Page 20729 of
the Federal Register/Vol. 70, No. 76/Thursday, April 21, 2005/Proposed
Rules, second column, eighth line down, the word ``paragraph'' should
have the actual paragraph reference placed beside it. Clarification of
these concerns would be appreciated.
DoD Response: This reference will be inserted upon completion of
the final rule.
24. Comment: The contract clause (252.211-7XXX) requires in para.
(c)(2) that each tag is readable * * * Please clarify what this means
because there are conflicting understanding being presented to the
vendors. Some government presenters are saying that most small
businesses will only need to use approved labels to place on containers
to comply. Others are saying that this requires a business to invest in
expensive systems to meet this requirement (min. cost is $25,000). This
is a significant issue for small business. If the latter is what is
meant then not only the DoD, but Federal Agencies will lose most of the
small businesses because this is a sizable investment for limited
application and another reason not to do business with the Government.
DoD Response: The tag has to be readable by an RFID reader at the
point it is shipped to the DoD. This does not require a $25,000
investment. A supplier can buy an RFID reader, for approximately
$2,000, which verifies that the tag can be read. If a supplier is using
an RFID-enabled printer, the printer will verify that the tag can be
read. If a supplier buys pre-encoded tags and has no way to verify the
tag readability at the point of shipment, they need to work with the
tag manufacturer to ensure that the tags can be read. As for
investments for small business, the DoD will negotiate these costs with
suppliers at the time of contract.
25. Comment: Also, reference is made to two consolidation points
that require RFID tags. Are these locations also known as Tobyhanna,
PA, and Tracey, CA? If so, then this needs to be clarified because many
government vendors do not associate the two as being the same.
DoD Response: The Defense Distribution Center Susquehanna, PA
(DDSP) is not the same as Tobyhanna. The Defense Distribution Center
San Joaquin, CA (DDJC) is located in Tracy, CA, but there are several
facilities in Tracy. The specific shipping locations for this
requirement are identified at the Web site, http://www.dodrfid.org.
26. Comment: A respondent commented on the potential use of ``The
AIM RFID MarkTM!'' on material that is tagged with an RFID
tag to provide a visual indicator of RFID enabled labels.
DoD Response: The current version of the MIL-STD-129 does not
require that the RFID tag be integrated with either a commercial or
Military Shipping Label (MSL), but indicates in paragraph 4.9.2 that:
``The passive RFID tag may be integrated with the military or
commercial shipping label (RFID-enabled address label) or they may be
placed in separate locations on the shipment.'' As the DoD RFID
initiative progresses and additional suppliers ship tagged material to
the DoD receiving points, the Department will work with organizations
such as EPCglobal and AIM to determine the most suitable marking
requirement to indicate RFID enabled labels--this requirement will then
be included in a future update of the MIL-STD-129.
27. Comment: A respondent commented on the process of
reconditioning shipping containers and reusing them within the supply
chain before the shipping container is sent for recycling as scrap.
There is a concern that RFID tags attached to these containers would
not survive the reconditioning process and may litter the drum lines,
conveyers, furnaces, paint booths, and wash basins. They could also end
up in wastewater discharged to public sewer systems, or in solid waste
streams sent to a municipal landfill.
DoD Response: The DoD makes every effort to ensure that materials
and appropriate types of packaging are reconditioned and re-used when
and where possible prior to recycling and disposal of these materials
and packaging when they are no longer economical to recondition or
repair for continued use. The DFARS rule does not require RFID tagging
on the types of commodities and materials that would normally be
shipped or delivered in fiber/plastic/metal drums or intermediate bulk
containers (IBCs). As the DoD RFID initiative expands to potentially
include these types of materials and associated shipping containers,
future updates to the DFARS may include requirements such as
appropriate directions for reconditioning, re-use, recycling, and
disposal of packaging and containers.
28. Comment: There appears to be a major conflict between DoD's
proposed use of the advance shipping notice and how the Defense
Commissary Agency (DeCA) mandates the use of the Advance Shipping
Notice. Currently DeCA requires all shipments under a Frequent Delivery
Contract to have an ASN provided with specific data fields which is
used as a receiving document. The DeCA ASN does not require nor accept
a price because the third party doing the delivery each day does not
have access to the price the supplier is charging. It appears DoD and
DeCA are using two different types of contracts to obtain supplies. DoD
is basing their RFID program on supporting a supply depot with a price
that calls for a specific number of units to be delivered at a specific
time. DeCA has a multiple delivery order with the quantities based on
customer demand with deliveries to be made daily. The regulation and
DoD standard for RFID require an ASN to be sent to DoD. Right now an
ASN is sent to DeCA that serves a multiple of functions and gives the
user all the information they need to receive the product and reconcile
the delivery. The DoD RFID initiative is adding unnecessary workload to
industry
[[Page 53958]]
because they are also asking for an ASN (with different information)
that doesn't tie into DeCA's system. This means two ASN's would have to
be sent, which seems an unnecessary burden on industry and was not
included in the DoD's calculations to determine the cost to small
business. The way the regulation is written it will be almost
impossible to do business with DeCA and still meet the DoD
requirements. It is estimated that it will increase the cost of goods
to DeCA in the range of 15-18% providing we can have more time to
implement RFID. If we are held to the DoD January 2007 mandate, we
expect prices would increase in the 25-30% range because we would be
using a third party to do the RFID tags. We believe that brand name
items are quite different than the ``specification'' products being
purchased for the depots. We feel RFID tags for brand name items for
military resale should not be given an exemption until 2010 when RFID
tags should be commonplace. It doesn't make a lot of sense why DeCA's
customers, who are the ones paying for the items, should be forced to
pay for technology that is still in the very early stages of
development.
DoD Response: The requirements for DeCA's internal implementation
are currently under review and are not within the scope of the current
DFARS rule.
29. Comment: Thank you for the opportunity to comment upon the
DEPARTMENT OF DEFENSE Defense Federal Acquisition Regulation
Supplement; Radio Frequency Identification. There are a number of
general and specific comments regarding the attached.
DoD Response: See comment numbers 30-38 for clarification.
30. Comment: It would be useful to clarify the chronological
sequence of the several E publications on RFID published by the DoD.
The attachment forwarded under cover of the Reference does not appear
to note or recognize previous publications. In particular, the defining
document must remain The Under Secretary of Defense's Memorandum dated
30 Jul 2004 and the associated Business Rule of the same date. These
increasingly are difficult to align and reconcile with the DoD RFID
Home Page and the Supplier Implementation Plan and the Suppliers'
Passive RFID Info Guide of Aug 31 2004.
DoD Response: Documents located at http://www.dodrfid.org are
supplemental to and supportive of the DoD RFID policy released on 30
Jul 2004.
31. Comment: There is a need to clarify the linkage between the
DFARS and the DoD policy. There needs to be a clearly articulated
account of how amendment of the former document will be transferred to
the latter.
DoD Response: The DFARS rule will serve as the standard contract
language for incorporating passive RFID requirements in accordance with
the DoD RFID policy.
32. Comment: To provide transparency, it is requested that a
reference document of those companies that contributed to the document
and whether their representations have been actioned or not is
required. There is a concern that many RR comments of the related issue
of UID DFAR and UID Policy have been received or actioned by the
appropriate desk officers for staffing comments. The proposed schedule
of staffing events would also be helpful to keep all respondents aware
of the forthcoming critical milestones.
DoD Response: All comments submitted in response to this DFARS rule
are taken into careful consideration, actioned and responded to
appropriately by the appropriate offices. All comments and Departmental
responses will be included with the final publication of the DFARS rule
in the Federal Register.
33. Comment: It is suggested that palletized loads should be
differentiated between air pallets and surface palletized loads, terms
used by the military customer.
DoD Response: An ``air pallet'' is normally referred to as a
``463L'' or ``463L System'' pallet and does not require the application
of a passive RFID tag. 463L pallets require the use of active RFID tags
per the DoD RFID Policy `` the use of which is not the subject of this
DFARS rule. ``Surface palletized loads'' that you note are in fact
covered by the MIL-STD-129 definition for palletized unit load as
identified in the current rule as: ``Palletized unit load means a MIL-
STD-129 defined quantity of items, packed or unpacked, arranged on a
pallet in a specified manner and secured, strapped, or fastened on the
pallet so that the whole palletized load is handled as a single unit. A
palletized load is not considered to be a shipping container.''
34. Comment: Please confirm within the DFARS that the financial
thresholds are in place or are not applicable, as seen with DoD UID
policy.
DoD Response: The UID Financial thresholds are not applicable to
the RFID policy. Therefore, this DFARS rule is purposefully silent on
this issue to avoid confusion.
35. Comment: It is requested that a clause is inserted that reads:
``DoD recognizes and accepts that Suppliers' RFID Implementation Costs
will be regarded as allowable costs under the FAR''.
DoD Response: No blanket statement will be added. These costs must
be individually negotiated with the contracting officers to ensure only
minimum costs needed to comply are allowable under the contract.
36. Comment: MIL-STD-129 is referred to several times throughout
the DFARS. Given the amount of amendments, for clarity, the latest
version should be included as a reference at the outset of the
document.
DoD Response: The MIL-STD-129 is referenced elsewhere in the DFARS
for the marking and labeling of shipments to and within the DoD. The
current version of the MIL-STD-129 is available at http://www.dodrfid.org.
37. Comment: Class IX definition has been altered and omits Weapon
Systems? Is this correct as the previous definition of Weapons Systems
and Repair parts and Components was more complete and informative. It
should also be confirmed that complete assemblies and the breakdown
modules and spare parts are included in this category.
DoD Response: The following definition used in the rule is a
verbatim extract from the DoD 4140.1-R DoD Supply Chain Materiel
Management Regulation of May 23, 2003.
``Class IX. Repair parts and components including kits, assemblies
and subassemblies, reparable and consumable items required for
maintenance support of all equipment, excluding medical-peculiar repair
parts.''
This definition includes complete assemblies (less major end
items), breakdown modules, and spares.
38. Comment: The increase in RFID shipping destinations should be
highlighted in that by 2006 there are 34 locations and by 1 Jan 2007 to
all DoD locations.
DoD Response: The Supplier Implementation Plan for 2006 and 2007
are not within the scope of the current DFARS rule.
39. Comment: The respondent commented on the small number of
examples that were referenced in the Regulatory Flexibility Analysis
concerning the impact of RFID tags on the recycling industry as well as
the fact there will be an impact on the recycling community whether or
not DoD is involved.
DoD Response: As noted in the comment, at the time of publication
of the Regulatory Flexibility Analysis, there was little discussion and
testing being done in the recycling industry
[[Page 53959]]
concerning the impact of RFID. The document provided what little
information was available. As the recycling community completes testing
and publishes reports, DoD will review those publications and work to
take the concerns into consideration as RFID technology expands within
DoD. Additionally, it is important to note for the pallet industry that
the RFID tags will be placed on the shrink wrap surrounding the
palletized unit load and not attached directly to the pallet.
40. Comment: A respondent suggested that DoD make small businesses
aware of its service to offer recycled RFID tags, which sell at a lower
cost. The respondent also recommends that requirements be incorporated
into the DFARS so that companies can reprogram salvaged RFID tags.
DoD Response: The DoD has not yet developed tag recycling plans or
a validated procedure for offering recycled tags for purchase through
the excess property disposal process.
41. Comment: A respondent has concerns over the ability of
Materials Recovery Facilities to create a product to the specifications
of the customer as the number of RFID tags increases. The respondent
urges careful consideration of the results of a study being conducted
in the paper industry.
DoD Response: The DoD will continue to monitor industry testing of
recycling processes containing RFID tags or tag fragments. As the
results of these tests become known, DoD RFID policy will be amended as
required.
42. Comment: I believe the impact analysis completed by the
Department of Defense understates the cost to industry to implement
RFID. It appears the analysis only focused on shipments to DoD
distribution centers and virtually ignored shipments made to the
Defense Commissary Agency. Based on an average case cost of $25,
industry's annual cost for implementing RFID for DeCA could be in
excess of $100,000,000 for RFID tags alone. The indications are the
cost for application and administration could equal the cost of the tag
which could mean an annual reoccurring cost of $200,000,000 per year to
meet DoD's RFID mandate. We have been to a meeting held by DoD about
RFID and there is a lot of expense setting up an RFID program. I
realize DoD is pushing us to use third party providers to meet their
deadlines but that just increases the cost for RFID even more and
creates a substantial hardship on small business. Most of the small
business people who I have talked with don't have any idea about the
RFID mandate and don't have any plans to implement RFID technology into
their business until things become settled down and costs are more
reasonable. The analysis done by DoD doesn't really address this issue
and seemed to ignore the entire issue of how much it really costs to
implement RFID for a small business. We all recognize RFID is going to
become part of the normal business process just as UPC's and scanable
bar codes did in years past. The problem is the Department of Defense
is mandating technology that is still being developed and is going to
take time to implement. If the mandate for RFID applies for every item
DoD purchases, DoD's orders will have to be treated differently. This
means DoD is going to pay a much higher price than anyone else. As a
taxpayer, that does not make a lot of sense for brand name items sold
to the commissary, especially since the cost is going to be passed on
to our military people which means they will have to spend more money
for food. Instead of mandating specific dates for brand name items that
are sold commercially, why don't you revise the FAR to defer the
implementation of RFID technology for brand name items until it is a
common industry practice. Based on how long it took for UPC's and bar
codes to be implemented, it might be quite a few more years before RFID
is part of the common landscape. Establishing a mandate for brand name
items just doesn't make sense. No other retailer, including Wal-Mart,
has established a hard and fast mandate date for 100% compliance from
every supplier. It seems to me you need to look at mainstreaming with
the rest of industry so you don't have to pay a premium to get
something we will be doing in time.
DoD Response: DoD is aware of the concerns of shipment requirements
for DeCA and is currently reviewing the internal implementation plan
for DeCA. In the regulatory flexibility analysis (http://www.dodrfid.org/regflex.htm
), DoD provided several options as well as estimated costs
for small businesses to comply with the RFID policy. Additionally, DoD
has been working with the Procurement Technical Assistance Centers
(PTAC) to educate them on RFID technology and the RFID policy so that
small businesses may seek assistance from them with regard to the RFID
policy and compliance.
43. Comment: DoD wants to mandate RFID and the use of advance
shipping notices. While this might make sense for ``spec'' items going
to distribution centers, it doesn't make any sense for the products we
sell to the commissary system. Why in the world does DoD want to
include these type of products as part of their RFID mandate? Does it
make good business sense when the majority of retailers who are buying
the same item are just now beginning to test RFID technology and it
will be many, many years before they are even thinking about getting
the key suppliers on the program. Products purchased for resale should
be excluded from DoD's RFID mandate. We already are sending ASN's to
the commissaries with more information than what DoD wants, the
commissary system doesn't have anything in place right now to use the
technology even if we put tags on the cases, and the military families
are going to be paying a much higher price just so every item will have
an RFID tag. Some of the items we sell to the commissary are sold as
eaches, e.g., soft drinks and snacks. Based on the RFID mandate, each
of these items would require an RFID tag which would be more than the
cost of the product. Considering the fact the item is consumed within
hours after purchase, if not on the way home, what is the benefit? More
importantly, what person is going buy our products if the price
everywhere else is half the price (because they don't have an RFID
tag). I would like to suggest the following changes be considered: (1)
Items purchased by the commissary and exchanges should be excluded from
the RFID mandate in the FAR as you did for other types of products. (2)
At the very minimum the date for implementing RFID technology for the
commissary and exchanges should be consistent with all the other
retailers which could be 2010 or beyond. (3) You revision the current
provision so the contracting officer can exclude items based on the
cost of the product. A 100% mandate for all items is going to be
difficult. (4) If RFID is mandated for the commissary and exchanges,
the advance shipping notice requirement be revised to allow the
commissary and exchange to receive the ASN directly instead of going to
DoD's network and the map for the ASN be determined by the commissary
and exchange service.
DoD Response: The requirements for DeCA's internal implementation
are currently under review and are not within the scope of the current
DFARS rule.
44. Comment: Recommend the following clarifications on the case and
pallet definitions: Case: A single package or container that contains a
pre-determined quantity of a specific item or multiple items associated
with an order packaged together. The RFID tag applied to the single
unit will associate the EPC code to the list of items inside the case.
Pallet: A carrier, skid or other portable platform that contains
multiple cases that is distributed as a unit. The
[[Page 53960]]
RFID tag affixed to the pallet will associate the EPC code to the case
RFID tags contained on the palletized unit.
DoD Response: The definition used in the DFARS rule is as extracted
verbatim from MIL-STD-129.
45. Comment: The respondent expressed concern over the ability to
meet the requirements of the ASN. Specifically the fact that the
current system running within their company does not account for all of
the data in the ASN nor is all of the ASN data RFID tag data,
additionally the WAWF requires reporting of items at the catalog part
number level where they may pick at the pickable level. Requests
clarification to allow data submitted at the pickable level.
DoD Response: The benefit of an ASN lies in the positioning of
shipment data into a receiving information system prior to the actual
arrival of the corresponding shipment--thus providing the receiving
organization with ``actionable information'' to make delivery changes
or other key business decisions. The data contained on the ASN is
necessary for processing in the DoD enterprise. Each catalog number
(read as CLIN) will likely have more than one RFID tag associated with
it and the quantity may differ from the order quantity. This is
perfectly allowable for a CLIN to have multiple RFID tags within WAWF.
The mapping calls for the tag to associate with that portion of the
CLIN quantity shipped in the carton. For additional information and
instruction of how to construct this transaction, visit https://wawf.eb.mil
and contact DISA Customer Service.
46. Comment: The respondent comments that DoD orders are not
received via EDI, which would make sending an EDI MIRR to DoD much
easier. The respondent suggests converting order to EDI submissions
only.
DoD Response: This rule does not identify the method for order
transmission.
47. Comment: The respondent noted that in WAWF today an entire ASN
MIRR will be rejected if any required field value is not what is
expected. This rejection may prevent the ASN from being received prior
to the receipt of material. The respondent suggests rejecting only the
affected lines.
DoD Response: We acknowledge that this scenario could occur and we
will work with the WAWF personnel to examine this issue.
48. Comment: The respondent commented that in some contracts DoD
specifies the line numbers for vendor products, which in the creation
of the ASN could be a problem because those numbers are not the same as
the vendors''. The respondent suggests the use of common line numbers
that are designated by the vendor.
DoD Response: This is outside of the scope of the DoD RFID DFARS
rule. However, CLINS are normally designated by the contracting agency
at the time of contracting.
49. Comment: The respondent brings attention to the fact that not
all pharmaceuticals are distributed directly from a manufacturer to the
DoD; distribution may occur through a pharmaceutical distribution
entity. With the addition of RFID technology, there may be a change in
the distribution, forcing manufacturers to become enabled to send an
ASN. It is suggested that more time is needed to research and clearly
understand the content of the ASN requirements.
DoD Response: Pharmaceutical materials are not within the scope of
this DFARS rule--thus providing more time to research and understand
the ASN requirements.
50. Comment: The respondent commented that there is still a need to
study the long-term effects of RF, specifically on medical products.
The respondent proposes more guidance on the effects on medical
products, environment, and other areas that use this technology,
including the handling of this material in the supply chain.
DoD Response: Medical products are not within the scope of this
DFARS rule. The DoD is working closely with and intends to follow the
lead of the Food & Drug Administration (FDA) on the use of RFID on
pharmaceutical items--particularly biologics and medical items.
51. Comment: The respondent recommended providing guidance on the
ability and method to recycle RFID tags.
DoD Response: The DoD would handle packaging and pallet material
containing RFID tags using similar procedures as are currently used.
Additional analysis is continuing in order to review the impacts of
RFID tag materials in the various recycling waste streams.
52. Comment: Readability distance may vary based on equipment used,
type of material and other factors that affect RF. MIL-STD-129 has
defined requirements for the placement of tags on the pallet and case.
This requirement may not be met for certain types of materials,
liquids, metals, etc. We recommend the DoD make allowances for tag
placement that best suits the material being tagged. MIL-STD-129 also
states a requirement for the tag to be readable at the time of
shipment. Guidance is needed if the tag is damaged in transit or just
simply not readable at the time of receipt.
DoD Response: As the implementation of the DoD RFID program
continues, the need for inclusion of these requirements in the MIL-STD-
129 will be reviewed.
53. Comment: The destruction of the RFID label after product
delivery is a concern. Clear guidance has not been given on killing
tags to ensure they do not resurface or are used to transport material
other than the intended product. There needs to be assurance for when
shipping materials are recycled or discarded, that previously assigned
RFID information not be mistakenly re-used to identify another shipment
of configuration of materials. An understanding of the DoD approach to
handling passive RFID tags would be needed to assure systems support
the intended post-use handling of the tags.
DoD Response: As the implementation of the DoD RFID program
continues, additional procedures will be reviewed to preclude re-use of
RFID tags and the potential for mis-labeling or false identification of
materials.
54. Comment: It is not clearly outlined if (or which)
pharmaceutical drug product(s) may require UID numbers affixed to the
unit containers (bottles of tablets, solution, capsules, etc). The
addition of an RFID tag on a small bottle containing serialized
identifier would be difficult at a local distribution center and may
need consideration at the manufacturer.
DoD Response: The requirement for RFID tagging of UID item
packaging is a future requirement and not included in the scope of this
DFARS rule.
55. Comment: Clear understanding of pharmaceutical product flow
from the product manufacturer, to an authorized pharmaceutical
distribution center, and finally to a DoD depot or warehouse must be
considered in order to manage the impact of RFID tagging of cases and
pallets when product is not directly shipped to DoD and manufacturers
regarding RFID tagging needs. The responsibility of providing ASN's and
case/pallet RFID tags would reside with the pharmaceutical distribution
entity. Original packaging of cases and pallets from the manufacturer
may change at the DC since these deliveries are not dedicated for DoD
orders but are stocking orders for multiple customers.
DoD Response: Noted. The responsibility for providing case and
pallet RFID tags in addition to the correct ASN resides with the
contract holder.
[[Page 53961]]
56. Comment: Very limited guidance has been made available
regarding the impact analysis requirements for pharmaceutical and
medical materials (products). It is currently understood from FDA
guidance that biological pharmaceutical materials are not to be
included in RFID pilot studies until further regulatory review is
completed and further guidance is provided. Would the DoD guidance
provide similar concerns?
DoD Response: Pharmaceuticals are not included within the scope of
the current DFARS rule. However, DoD is working closely with the FDA on
the future use of RFID on pharmaceutical items--particularly biologics
and medical items.
57. Comment: A respondent commented on the need for DoD to only
adopt a RFID-use mandate if RFID technologies will not have a negative
impact on recycling for any container, package, or pallet producer or
any industry utilizing recycled containers or pallets to produce other
products. Additionally, this respondent urges the Department to
carefully analyze the use of RFID tags for each type of container under
consideration.
DoD Response: As the DoD RFID effort progresses, the Department
will remain cognizant of this and other industry association's concerns
surrounding the use of RFID on particular materials used in shipping
items throughout the supply chain. Additional analysis is continuing in
order to review the impacts of RFID tag materials in the various
recycling waste streams.
58. Comment: The 30 Jul 2004 OUSD(AT&L) memo ``Radio Frequency
Identification (RFID) Policy'', discussed over-arching DoD-wide
implementation of RFID into the supply chain system. When the proposed
rule was published in April, it confused program managers and
contracting functionals because the proposed DFARS changes only covered
limited types of commodities being shipped to only two depots. We
thought the DFARS proposed rule would take into account the more
expansive application of RFID within DoD as expressed in the various
RFID policy memos. We can only assume the proposed rule represents just
the first phase of RFID application, and subsequent DFARS changes will
expand RFID application.
DoD Response: This DFARS rule covers the commodities and locations
for 2005, additional DFARS updates/rules will be used to provide the
locations and commodities for 2006 and 2007.
59. Comment: The respondent has followed the development and
testing of RFID tags for the typical ``supermarket'' food products. It
would seem to them, and they believe this is a view shared by most in
the wholesale food industry, that feasibility and affordability of RFID
tags for the food industry is at least 3 years down the road. Even Wal
Mart seems to have backed down with their RFID initiative. It is
important to recognize that profit margins in the food business are
measured in pennies. This is a factor that puts great emphasis on the
cost of RFID tags. RFID makes a great deal of sense for highly
sensitive or costly items that the DoD or other government agencies are
attempting to control. It would seem that tracking cases of peas, corn,
cereal, etc., would be rather low on the priority list vs. other costly
or sensitive items. The respondent strongly recommends consideration
that application of RFID tags to food related products be deferred
until technological challenges are resolved and the cost of RFID tags
become reasonable. Implementing requirements to support RFID tags at
these early stages might result in limitations or elimination of the
ability of small business to sell to the government--a result that
would be contrary to federal procurement guidelines or could result in
the need for notable cost increases for the food products supplied to
the various government agencies.
DoD Response: Consumer products and typical ``supermarket'' food
products are not included within the scope of the current DFARS rule.
The DoD is reviewing future requirements for consumer products and
typical ``supermarket'' food products for phasing into the DoD RFID
implementation.
60. Comment: The respondent recommends that DoD reexamine its use
of the Ship Notice/Manifest (ASC X12 856 Transaction Set). There are
numerous inconsistencies between the use within DoD and the primary
users of EPC. A. Background: In addition, contractors must send an
advance shipment notice in accordance with the procedures at http://www.dodrfid.org/
asn.htm, to provide the association between the unique
identification encoded on the passive tag(s) and the product
information at the applicable case and palletized unit load levels. B.
Regulatory Flexibility Act: ] 2 ``The proposed rule will also require
contractors to provide an electronic advance shipment notice in
accordance with the procedures at http://www.dodrfid.org/ asn.htm, to
associate RFID tag data with the corresponding shipment. 252.211-7XXX
Radio Frequency Identification. As prescribed in 211.275-3, use the
following clause: Radio Frequency Identification (XXX 2005)(e)
Receiving report. The Contractor shall electronically submit advance
shipment notice(s) with the RFID tag identification (specified in
paragraph (d) of this clause) in advance of the shipment in accordance
with the procedures at http://www.dodrfid.org/ asn.htm. The specifics
for the Advance Shipment Notice (this terminology is incorrect). The
correct title for the X12 856 transaction set is ``Ship Notice/
Manifest.'' The specific reference from the Web page about is 856--
Pack-- Update--WAWF-- 4010--EDI--Detail.doc, Version 3.0.7, March 2005.
Contemporary versions of X12 (5020) and many previous versions declared
REF01 (Data element 128) as having a minimum size of two characters and
a maximum size of 3. As far back as X12 (4010) we find the value
``TPN'' to indicate ``transponder number.'' Wal-Mart Implementation
Guidelines for EDI state, ``Future documents that will support EPC
information 856--Ship Notice.'' The 856 transaction set has
two primary schemes, one which employs the CLD/REF loop (Loop ID--CLD)
and the other employs a Marks and Numbers segment (MAN). The retail
segment (the model for EPC) employs the MAN segments. Organizations
shipping to retail distributors and sales points will need to employ a
different scheme for DoD than for retailers. DoD is ``way ahead of the
curve'' with regard to EPC implementation and then tying that
implementation to EDI. There are numerous issues that are currently
unresolved (as mentioned above) and DoD must be prepared to re-
implement its EPC/EDI usage once the details have been sorted out by
industry. Does DoD intend only to permit Version 4010 of the ASC X12
standards? Will future implementations require Small to Medium
Enterprises (SMEs) to then redesign their systems? A Ship Notice/
Manifest transaction provides no benefit for the SME. DoD should
identify the frequency of anticipated changes in these rules.
DoD Response: DoD follows Federal Implementation Conventions for
all X12 transaction sets. In some cases, that may result in a different
transaction set than the commercial transaction set, however we will
continue to use the Federal Implementation Conventions for X12
transaction sets.
61. Comment: Additional--The requirement of EPC tags in general and
Class 0 and 1, specifically. The DoD requirement for Generation 2
passive RFID tags preceded the submission by
[[Page 53962]]
EPCglobal of the Generation 2 specification to ISO for standardization.
In the interest of RFID harmonization with international allies, tag
compliance with JTC1 ISO/IEC 18000-6c should supersede Generation 2
compliance once ISO 18000-6c is issued. 252.211-7XXX Radio Frequency
Identification. As prescribed in 211.275-3, use the following clause:
Radio Frequency Identification (XXX 2005) 2(d) Data syntax and
standards. The Contractor shall use one or more of the following data
constructs, depending upon the type of passive RFID tag being used in
accordance with the tag construct details located at http://www.dodrfid.org/tagdata.htm
(version in effect as of the date of the
solicitation): 2(a) Definitions Passive RFID tag means a tag that
reflects energy from the reader/interrogator or that receives and
temporarily stores a small amount of energy from the reader/
interrogator signal in order to generate the tag response. Acceptable
tags are--(1) EPC Class 0 passive RFID tags that meet the EPCglobal
Class 0 specification; (2) EPC Class 1 passive RFID tags that meet the
EPCglobal Class 1 specification; and (3) EPC UHF Generation 2 passive
RFID tags that meet the EPCglobal UHF Generation 2 specification. It is
not believed that the tags being sold to DoD meet the requirements of
the EPC Class 0 or Class 1 specifications and that it is a serious
error to say that they do. The only EPC tag having a viable
specification is that of UHF Generation 2. Properly, DoD should be
referencing ISO standards, in the case of RFID ISO/IEC 18000; and for
passive technology operating in the 860-960 MHz range: ISO/IEC 18000,
Part 6c. Such reference would be internationally viable, would include
the UHF Gen2 standard currently referenced and would provide room for
growth. Not referencing ISO standards is a serious mistake. If ISO
standards are not going to be referenced, only UHFGen2 tags should be
called out.
DoD Response: The DoD opted to embrace EPC specifications for Class
0 and Class 1 readers and tags in order to quickly adopt technology
that enhances interoperability with our industry supplier base. At this
time, DoD only accepts EPC compliant Class 0 and Class 1 tags. As the
UHF Gen 2 specification is ratified and becomes part of the appropriate
ISO standard, the DoD policy documentation will be updated to reflect
this new standard.
62. Comment: The definitions of ``palletized unit load'' and
``shipping containers'' as indicated in the section 252.211-7XXX are
acceptable according to the practices in handling corrugated and solid
board containers.
DoD Response: Noted.
63. Comment: Assessing the possible impact, if any, on the
environment and materials recycling, including corrugated containers.
The Fibre Box Association (FBA) has considered for some time the
potential impact of the passive RFID tags and antenna in the recycling
stream that would impact the manufacturing location where the recovered
corrugated material is processed, as well as the characteristics in the
product itself containing a high percentage of recycled fiber content.
As RFID tags come into widespread use, either from DoD requirements or
other commercial and industrial organizations, an increasing number of
these devices will enter the recycling stream. Corrugated containers
are recovered and recycled at a level above 70%, the highest recycling
rate for a defined article and very much in competition with aluminum
cans for the top spot. Two systems were assessed for environmental and
product safety considerations based on FBA's research of leading
innovators and other analyses, identifying potential front-runners in
the long term. The current RFID construction essentially consists of a
small integrated circuit and an antenna that is either in foil form
(copper) or printed with conductive silver ink. Thus the antennae are
potential sources of metals that could be mobilized during the re-
pulping, fiber treatment and manufacturing processes at the recycling
mill. The impacts could be in different solid and aqueous releases from
the mill, as well as the presence of these metals in the product
itself. The FBA commissioned the technical arm of the forest and paper
industry, the National Council for Air and Stream Improvement (NCASI),
to perform a study to assess the potential impact of these two
forerunner RFID antennas in the recycling stream. In the case of the
foil antenna, the results of the study indicate the tag maintains its
integrity in the re-pulping process due to the fact that this type of
RFID tag is typically enclosed in a plastic laminate, which is then
adhered to the container. The hydrapulper cleaning system separates
these tags out at a 99%+ level. Such complete separation prevents any
mobilization of the copper metal and allows the tags to be easily and
safely disposed. The printed silver ink antenna is a more complex
situation because it indeed mobilizes. In order to accurately ascertain
the partition of silver among the different vectors--solid waste,
effluent discharges and the product itself--a detailed trial was
conducted in a pilot paper machine and fiber cleaning system at Western
Michigan University in Kalamazoo, Michigan. This study and the
subsequent analysis of samples collected from the different vectors, as
well as testing for movement potential of silver from the corrugated
packaging into food, has been recently completed. The study results
indicate the following:
The silver had a high tendency to remain in the fiber
substrate of the paperboard.
Silver extractions of the finished pilot plant paperboard
samples revealed a high resistance of the silver to movement outside
the substrate.
Silver concentration in effluent, solid waste and product
streams are well below the identified regulatory thresholds.
DoD Response: DoD appreciates this valuable information with regard
to the studies completed on recycling RFID tags on corrugated
containers. DoD will continue to solicit and accept all research,
studies, and analyses that document the impact of RFID tags to our
environment and recycling industries worldwide.
64. Comment: It is the recommendation of the AIM RFID Experts Group
(REG) that the definitions employed for common industry terms follow
the definitions internationally accepted for those terms. There is
incompatibility between the definition in the DFARS Case 2004-D011,
MIL-STD-129P, and the intended use of RFID within DoD. What follows are
the terms and definitions employed by the documents in question.
211.275-2 Policy. Radio frequency identification (RFID), in the form of
a passive RFID tag, is required for individual cases and palletized
unit loads. Palletized unit load means a MIL-STD-129 defined quantity
of items, packed or unpacked, arranged on a pallet in a specified
manner and secured, strapped, or fastened on the pallet so that the
whole palletized load is handled as a single unit. A palletized load is
not considered to be a shipping container. [DFARS Case 2004-D011, ``As
prescribed in 211.275-3, use the following clause:''] Case: It is
either an exterior container within a palletized unit load or it is an
individual shipping container. [MIL-STD-129P c3, definition 3.3.1]
Palletized unit load: A quantity of items, packed or unpacked, arranged
on a pallet in a specified manner and secured, strapped, or fastened on
the pallet so that the whole palletized load is handled as a single
unit. A palletized or skidded load is not considered to be a shipping
container. A loaded 463L System pallet is not considered to be a
palletized unit load. Refer to the
[[Page 53963]]
Defense Transportation Regulation, DoD 4500.9-R, Part II, Chapter 203
for marking of 463L System pallets. [MIL-STD-129P c3, definition 3.27]
International standards: International standards exists for these and
constituent terms. DoD claims to use commercial standards. The most
pervasive commercial standards are those of ISO. The DFARS case (and
MIL-STD-129) need to reference the terms as employed in ISO standards.
Pallet: Rigid horizontal platform of minimum height, compatible with
handling by pallet trucks and/or forklift trucks and other appropriate
handling equipment, used as a base for assembling, stacking, storing,
handling, transporting, or display of goods and loads [ISO DIS 455,
Pallets for materials handling--Vocabulary, definition 2.1]; packaging
(product) product made of any material of any nature to be used for the
containment, protection, handling, delivery storage, transport and
presentation of goods, from raw material to processed goods, from the
producer to the user or consumer, including processor, assembler or
other intermediary [ISO DIS 21067, Packaging--Vocabulary, definition
2.1.1]; transport packaging: Packaging (2.1.1) designed to contain one
or more articles or packages or bulk material for the purposes of
transport, handling and/or distribution [ISO DIS 21067, Packaging--
Vocabulary, definition 2.2.4]; unit load/unitized load: Single item or
assembly of items designed to enable these to be handled as a single
entity [ISO DIS 21067, Packaging--Vocabulary, definition 2.3.18]; box:
Packaging with rectangular or polygonal sides usually completely
enclosing the contents. Note: The sides may contain apertures for
handling or ventilation. [ISO DIS 21067, Packaging--Vocabulary,
definition 2.3.7]; case: non-specific term for a transport packaging,
often used to refer to a box [ISO DIS 21067, Packaging--Vocabulary,
definition 2.3.9].
DoD Response: These recommendations will be reviewed for possible
inclusion in a future update to the MIL-STD-129. The definitions will
remain consistent with MIL-STD-129.
65. Comment: Evidence: The environmental impact of utilizing
Passive RFID tags to track and identify DoD material is being assessed
in the same order that RFID tags will appear in significant quantities
on DoD material. Since the DoD Passive RFID Mandate (as well as private
sector mandates) is first targeted to unit loads/pallets and cases,
data accumulation and studies that need to occur have first focused on
carton board and corrugate. 4.1 Corrugate Evidence: Foil antenna made
of Aluminum or Copper, irrespective of being on plastic substrate, will
not taint the corrugate/carton board recycle stream. Because these tags
remain intact, they are removed with staples, etc., in the first
filtration after repulping with no carry over. The addition of RFID
tags to the first repulping filtrate does not significantly alter the
percentage constituent makeup of the first repulping filtrate, (10%).
Present waste disposal for the first repulping filtrate is deemed
acceptable in the future for the first repulping filtrate with RFID
tags. Printed silver based antennas are undergoing pilot testing to
insure no negative environmental impact occurs. There is some concern
that residual silver may pass through. The underlying reason is that
printed antennas do not have the same structural integrity to remain
intact to allow simple filtration to be the means of removal. Since a
significant portion of RFID tags are foil/plastic substrate based, the
most conservative approach would be for DoD to utilize foil/plastic
substrate based tags until completion of the printed antenna pilot
tests. 4.2 Pallet Evidence: No studies have been initiated for
environmental impact on pallets because a general assessment indicates
no need due to the following: Pallets are either reused repeatedly for
many turns with no subsequent environmental impact; Tags on pallets are
reused or manually removed allowing the tags to be separated before
disposal; Pallets are repaired and reused with no subsequent
environmental impact from tags; Pallets are disposed of via grinding
where antenna metal would constitute .4ppm. Final uses of ground
pallets are fuel, mulch, and filler for plastic; Total pallet tags will
be fewer than case tags by factors between 20 and 100.
DoD Response: DoD appreciates this valuable information and
analysis concerning the recycling impacts of RFID tags on packaging
materials. DoD will continue to solicit and accept all research,
studies, and analyses that document the impact of RFID tags to our
environment and recycling industries worldwide. As a note, the tags
placed on pallets will be placed on the shrink wrap not directly
applied to the pallet itself.
66. Comment: Reference AIM REF Term of Reference 5R (RFID and
recycling); 5. Mitigating Action Plans: For Use Cases and waste streams
that are several years from having large number of RFID tags involved,
assessments are in different stages of completion. However, all should
be finalized before RFID becomes significant in each area. As well
there are initiatives under way that take the introduction of RFID well
beyond minimizing impact on existing processes to more net positive
impacts. Both are outlined below: 5.1 Printed Silver Based Tags on
Corrugate: The impact of introducing large numbers of printed silver
based RFID tags into the corrugate/carton board recycle stream is in
the final stages of study by the Fibre Box Association (FBA) and
Confederation of European Paper Industries (CEPI), the U.S. and
European trade associations respectively for the corrugate/carton
board/paper sector. As well, several suppliers of silver based printing
inks have studies underway. All those doing studies, ink suppliers,
FBA, and CEPI plan to submit study results to OMB as soon as complete
in the near future. 5.2 Existing Waste Streams: Impact data is not yet
available for plastics, glass or metal. However, the same successful
approach that is in final stages of completion for corrugate will be
undertaken. The following have been engaged to provide guidelines for
RFID use to minimize environmental impact:
------------------------------------------------------------------------
Waste stream trade association guideline Completion
------------------------------------------------------------------------
Plastics Society of Plastic Engineers 1st Qtr 07.
(SPE).
Society of Plastics Industry (SPI)........
Glass Packaging Institute (GPI)........... 1st Qtr 07.
Steel TBD................................. 4th Qtr 07.
Aluminum TBD.............................. 4th Qtr 07.
------------------------------------------------------------------------
5.3 Reusable Assets: An EPC Global Work Group led by CHEP (a global
pallet pool owner) is defining tag and data needs to ensure Reusable
Assets are tagged with long life tags for both the Asset GRAI and the
contents' EPC. Target completion for a standard is November 2005. 5.4
Tag Reuse: A mechanism to minimize the impact or RFID tags is Reuse. At
least one commercial activity is underway to pilot and validate the
technical and economic viability of Tag Reuse. ASADA will be running a
pilot in conjunction with a recycle corrugate mill to validate the
economics. Key to tag reuse is the tag issuing entity must use password
alterable EPC numbering so the tag can be reused. Assuming technical
and economic viability is validated in the pilot, tag reuse will be in
place by Q2'06. 5.5 Recycle Process ID: AIM will petition ISO to
reserve 8 bits in RFID tag protocols to carry EPA recognized processes
for recycling. The ISO submission will be August 1, 2005. 5.6
Constituent Reduction: Constituent/Metal Antenna, Silicon IC,
Substrate, Adhesives) Reduction for Passive RFID
[[Page 53964]]
Tags is the primary R&D focus of all RFID Tag Suppliers. The underlying
economic requirement for massive adoption of RFID in the private sector
is tag cost reduction. Tag cost is based almost entirely on constituent
cost with the cost of the main tag constituents essentially being
equivalent. Therefore, tag constituent contents will drop
proportionally with price, i.e., proportional in the drop from mid
twenty cents to sub ten cents, over the next 5 years. Discussion: Given
the above evidence and action plans to create additional evidence, the
net environmental result of mandated RFID adoption is presented below
against the long established strategy of environmental responsibility--
Recycle, Reuse, Reduce: Recycle: Existing waste stream recycling at a
minimum will be unaffected. More likely waste stream recycling will
have significantly improved efficiency because mixed stream solid waste
separation will become automated. Valuable components of RFID tags will
be retrieved; Reuse: More reusable assets such as totes and pallets
will be used because their location and renting partner will be real-
time; Re-shipper corrugate cases will be utilized more; An
infrastructure will be established to reuse hardened RFID tags; Reduce:
Natural economic forces will significantly reduce RFID tag constituent
content.
DoD Response: DoD appreciates this valuable information and
analysis provided concerning the recycling impacts of RFID tags on
packaging materials. DoD will continue to solicit and accept all
research, studies, and analyses that document the impact of RFID tags
to our environment and recycling industries worldwide.
67. Comment: (Item 1): Paragraph (b)(1)(ii) of the proposed clause
252.211-7XXX currently references shipment receiving sites Susquehanna
PA and San Joaquin CA. Recommendation: We suggest removing reference in
the clause to specific DLA receiving facilities, to point back to the
contract for delivery site instruction. Please revise clause language
to read: ``(ii) Are being shipped as defined within section D
(Delivery) or as defined elsewhere within the contract.''
DoD Response: The two specific sites are provided as guidance so
that contracting officers will know what locations to include in
section D of contracts.
68. Comment: (Item 2): Regarding the meaning of Unique as defined
in the proposed clause 252.211-7XXX, we recommend adding the words
``and all'' as underlined below to ensure that the meaning of the word
unique is not misunderstood. (c) The Contractor shall ensure that--(1)
The data encoded on each passive RFID tag are unique (i.e., the binary
number is never repeated on any and all contracts) and conforms to the
requirements in paragraph (d) of this clause;
DoD Response: Agree. This change has been made in the final rule.
69. Comment: (Item 3): Subparagraph (e) of the proposed clause
252.211-7 XXX, ``Receiving report'' provides a URL connection for
instructions on Advance ship notification. Data found within URL Web
sites are subject to random modification and change. Recommendation: We
recommend the URL reference be replaced with either a reference to the
ASN process found within MIL-STD-129 or as delineated within the
contract.
DoD Response: While the content posted to the URL (http://www.dodrfid.org/asn.htm
) is subject to modification, the version of the
information posted to the URL in effect at the date of solicitation is
binding.
70. Comment: Supplemental recommendation: Often the prime
contractor will ship on multiple contracts adding to the level of
complexity. It would be beneficial to add language to the proposed
clause to encourage the use of the Single Process Initiative (SPI)
where practicable.
DoD Response: Noted.
71. Comment: The respondent commented on the use of RFID tags in
recycled materials and referred the reader to comments submitted by the
Fibre Box Association with regard to a study being completed on RFID
tags in recycling.
DoD Response: Noted.
72. Comment: The respondent expressed concern over the potential
adverse impacts that RFID tags may have on their manufacturing
processes when scrap material that has been manufactured into raw
material are utilized to make new basic materials. The respondent
recommends using a technique, in the future, for product design that
takes recycling into account as the product is developed. Additionally,
the respondent urges DoD to reconsider the timing of the policy until
additional data can be derived relative to the impact of tags on the
recycling supply chain.
DoD Response: It has been noted in comments from other industry
associations that have commissioned studies on RFID tags (with both
copper and silver antennas) that foil antennas can be sorted out at a
99%+ level, and printed silver ink antenna had a high resistance to
move outside the substrate and the silver remains in the fiber
substrate of the paperboard, additionally, the silver concentrate in
the solid waste and product streams are well below regulatory
thresholds. The DoD will continue to monitor industry testing of
recycling processes containing RFID tags or tag fragments. As the
results of these tests become known, DoD RFID policy will be amended as
required.
73. Comment: Reaching End-to-End supply chain visibility. End-to-
End visibility is achieved through system integration across the supply
chain--RFID merely simplifies asset identification.
[cir] Recommendation: Harmonizing current disparate information
systems could greatly improve supply chain visibility using today's bar
codes.
DoD Response: Noted. The DoD is using barcode technology and RFID
technology as well as other complementary AIT in addition to systems
integration efforts to achieve End-to-End supply chain visibility.
74. Comment: Accuracy of the cost burden estimate
[cir] The IBM/AT Kearney study, ``A Balanced Perspective: EPC/RFID
Implementation in the CPG Industry'' demonstrates most CPG categories
have a negative 10-year Net Present Value Business Case.
[cir] IBM/ATK study shows product category dynamics significantly
influences Return On Investment.
[cir] Costs to CPG manufacturers for RFID Implementation far exceed
the initial DoD estimates.
[cir] Manufacturers receive virtually no benefits from RFID unless
real-time product movement is shared by the DoD.
[cir] Recommendation: Pursue RFID programs on product categories
with sufficient ROI to justify the extensive additional costs.
DoD Response: Our in-depth analysis indicates that CPG items are
not typically shipped to DDSP and DDJC and therefore are not included
within the scope of the current DFARS rule. The DoD is reviewing future
requirements for specific classes of supplies and commodities to phase
into the DoD RFID implementation.
75. Comment: Technology Issues.
[cir] Tag read rates on many CPG products remains low, both in test
labs and in pilots.
[cir] Tag quality is uneven, resulting in additional costs to
manufacturers.
[cir] Tag Application devices do not, for high volume
manufacturers, operate at manufacturing line speeds, resulting in
inefficiencies.
[[Page 53965]]
[cir] Recommendation: Pursue case-level RFID program on mission
critical products.
DoD Response: Our in-depth analysis indicates that CPG items are
not typically shipped to DDSP and DDJC and therefore are not included
within the scope of the current DFARS rule. The DoD is reviewing future
requirements for specific classes of supplies and commodities to phase
into the DoD RFID implementation. The tag quality issue is being
addressed by various organizations. There is no current standard for
tag quality and this issue is being addressed by various industry
organizations. The DoD will monitor any issue recommendations or
resolutions for possible inclusion in future updates.
76. Comment: Tag location.
[cir] RFID technical limitations may render tag unreadable based on
DoD specs.
[cir] Recommendation: Remove restriction on tag placement for CPG
companies and allow placement based on maximum tag read rates.
DoD Response: Our in-depth analysis indicates that CPG items are
not typically shipped to DDSP and DDJC and therefore are not included
within the scope of the current DFARS rule. The MIL-STD-129 contains
recommended tag placement location, but can be adjusted to get maximum
tag read rates.
77. Comment: Advanced Ship Notification.
[cir] ASNs, when used properly, can provide many of the same
benefits as RFID.
[cir] Recommendation: Aggressively pursue pallet level ASN
implementations within the DoD supply chain.
DoD Response: The pallet is in the ASN, just not the only thing in
the ASN. The benefit of an ASN lies in the positioning of shipment data
into a receiving information system prior to the actual arrival of the
corresponding shipment--thus providing the receiving organization with
``actionable information'' to make delivery changes or other key
business decisions. RFID is a technology that improves the ability of
users in supply chains to rapidly identify, record, and process items,
shipments, or both. The use of an ASN with RFID technology facilitates
the positioning of shipment data into a receiving information system
and allows the immediate ``hands off'' receipt, via RFID, of that item
into inventory upon the arrival of the actual shipment--thus speeding
up product availability for the customer as well as invoice close-out
and payment.
78. Comment: We believe that the DoD should consider a more
targeted approach on high value categories that can generate a positive
ROI, and avoid low cost/low value CPG products. Recommendation: Pursue
case-level RFID tagging for mission critical products (i.e., CPG
products not included) that current technology limitations can support.
Continue to evaluate pallet-level RFID programs for CPG products and
pursue implementation when and if RFID technology and costs warrant.
Look at ways to leverage existing technologies like bar codes and ASNs
on lower cost CPG products.
DoD Response: Our in-depth analysis indicates that CPG items are
not typically shipped to DDSP and DDJC and therefore are not included
within the scope of the current DFARS rule. The DoD implementation is
already pursuing case and pallet level tagging for mission critical
products and is reviewing future requirements for specific classes of
supplies and commodities to phase into the DoD RFID implementation.
79. Comment: Initial Regulatory Flexibility Analysis of Passive
RFID Version 1.2, March 2005--Specific Comments.
We have reviewed the DoD's Initial Regulatory Flexibility Analysis
of Passive RFID and would like to highlight a number of items for
consideration: Section 1.5: The repeated references to a ``nested''
parent child relationship with EPC case tags and pallet tags is not a
capability that exists broadly today amongst CPG manufacturers. All of
the limited customer pilots at this point do not require the case level
EPC serial numbers to be sent with the ASN.
DoD Response: Our in-depth analysis indicates that CPG items are
not typically shipped to DDSP and DDJC and therefore are not included
within the scope of the current DFARS rule. The current ASN structure
for suppliers allows for a ``nested'' parent-child relationship between
the pallet and case tags. See comments 81-87 for further clarification.
The benefit of an ASN lies in the positioning of shipment data into a
receiving information system prior to the actual arrival of the
corresponding shipment--thus providing the receiving organization with
``actionable information'' to make delivery changes or other key
business decisions. RFID is a technology that improves the ability of
users in supply chains to rapidly identify, record, and process items,
shipments, or both. The use of an ASN with RFID technology facilitates
the positioning of shipment data into a receiving information system
and allows the immediate ``hands off'' receipt, via RFID, of that item
into inventory upon the arrival of the actual shipment--thus speeding
up product availability for the customer as well as invoice close-out
and payment.
80. Comment: Section 3.2: The reference to the requirement of
linear bar codes to access external databases is also a requirement
with the current 96 bit passive RFID tags being used in the CPG
industry. To obtain any details on the serialization on the tag would
require querying an external database.
DoD Response: Noted.
81. Comment: Section 3.3: We agree that the two most logical
choices to enable enhanced visibility in the DoD supply chain are bar
codes and passive RFID tags. The idea that no human intervention is
required on RFID tags is not correct for RF unfriendly products. Many
food products in the CPG industry contain metals, liquids, and
metalized films which prohibit these cases from being read in a typical
pallet configuration. Since the capability does not broadly exist to
send the serialization as part of an ASN, pallets would need to be
broken down and cases passed individually in front of a reader in order
to get 100% case level reads.
DoD Response: The inability to achieve 100% case level read rates
does not relieve a shipper of the requirement to send the appropriate
ASN with the tag serialization as part of the ASN. The nested parent
child relationship between pallet and case tags inherent in the ASN
will negate the need to obtain 100% case level tag reads.
82. Comment: Section 3.3.1: EPCglobal sees both bar codes and RFID
technologies co-existing for years. This supports a more targeted
approach of using bar codes on low-value products and RFID on high-
value and high-importance items.
DoD Response: The DoD concurs with the EPCglobal outlook and plans
to continue the use of both linear bar codes and two dimensional
symbology in the suite of applicable supply chain technologies.
83. Comment: Section 4.4: Passive RFID is still unproven in harsh
environments, specifically where refrigeration and freezing are
involved due to condensation. Additionally, although referenced in this
document, dynamic multi-block read and write capability is not
available in the current 96 bit tags. The specifications are also
moving to ``locked'' tags which secure the data written by
manufacturers.
DoD Response: Our in-depth analysis indicates that CPG items are
not
[[Page 53966]]
typically shipped to DDSP and DDJC and therefore are not included
within the scope of the current DFARS rule. The DoD is reviewing future
requirements for specific classes of supplies and commodities to phase
into the DoD RFID implementation.
84. Comment: Section 5.1: Adoption rates are much slower that
originally estimated, highlighted by the information shared earlier
from the AMR Research report.
DoD Response: The Regulatory Flexibility Analysis has been updated
to include the most recent adoption rates from the most recent 2005 AMR
report.
85. Comment: Cost & Benefit Analysis--True Impact To Suppliers
Section 6.4: There are a number of items in the benefit and cost
analysis that do not accurately reflect the true cost impact to
suppliers of meeting the proposed DoD RFID tagging requirements.
Industry data concurs that there will be incremental costs of managing
separate inventories of tagged and non-tagged products. Depending on
the levels of automation, these costs can range from $0.75 to $2.00 per
case in a postproduction ``slap and ship'' environment. Additionally,
many of the research and development (RFID labs), infrastructure,
software, middleware, material handling equipment, etc. are not
included in the economics. The economic examples listed around a $4,000
printer and a $0.50 tag are highly simplistic and do not reflect the
true costs of an enterprise implementation of RFID. Individual company
business cases show these costs can be as high as tens of millions of
dollars, not to mention reoccurring tag costs.
DoD Response: Noted. Those costs included in the cost analysis were
not intended to reflect the true cost of an enterprise implementation
of RFID. These costs were provided as examples of how a business,
particularly a small or medium sized business, can comply with the RFID
policy without spending millions of dollars.
86. Comment: Company background: SUPERVALU is the nation's largest
publicly held food wholesaler in the United States. We are a Fortune
500 company which had last year sales of $19.5 billion as both a
grocery retailer and wholesaler. SUPERVALU has been following both Wal-
Mart's and DoD's RFID initiatives. Publicly we are opposed to the
mandate to DeCA to implement RFID by January 1, 2007 for several
reasons: 1. RFID is still not a proven technology ready for a
production roll out across the grocery industry. Most food
manufacturers and grocery companies involved are only in pilot mode and
are running into many challenges today.
2. Currently RFID does not work well on ``mixed'' pallets (e.g.,
70-120 cases on a pallet that may represent 50-120 different products)
that a DeCA commissary (or grocery) receives from their distributors
due to the high error rate for mixed pallets. While Wal-Mart is often
cited for mandating RFID requirements, Wal-Mart is using RFID on full
pallets of one product not multiple, different products.
3. Error rates on ``mixed'' pallets are even higher when foil and
liquids are on the same pallet as they obscure the RFID signal.
4. There is no, or little, ROI at this point in time given the cost
of the EPC tags compared to the average case value especially with such
a high error rate. An investment in RFID hardware today is considered
``throw away'' as the technology is still maturing. For example,
frequent changes are necessary to resolve many of the readability
issues that are occurring in today's pilots.
5. Finally, attaching RFID tags for groceries going to a commissary
is not the intent of ``End to End Warfighter Support Initiative'' (i.e.
implementing RFID to speed products and supplies to the ``war
fighters'' in combat zones).
We also have concerns over who should tag the product when a
distributor supplies the product to DeCA. Will manufacturers have to
incur the expense of having to tag products going to a distributor,
when only a small percentage of the items would be shipped to DeCA? On
the other hand if manufacturers refuse to tag the product, will the
distributor be required to add the tags? If so, who will pay this
expense?
Recommendation: Due to the technology infancy of RFID, the high
cost of implementing RFID for low value goods (e.g. groceries), and
that adding RFID tags for grocery products going to a commissary have
no impact on the End to End Warfighter Support Initiative, that in
January 2007, DoD review RFID technology to:
1. Determine if it is mature enough and being used in the grocery
industry.
2. If there is a ROI on implementing RFID down to the case level.
3. And if technology is mature, to establish an implementation
date, or if technology is not mature to establish another review date
both preferably 18-24 months out.
DoD Response: Our in-depth analysis indicates that CPG items are
not typically shipped to DDSP and DDJC and therefore are not included
within the scope of the current DFARS rule. The DoD is reviewing future
requirements for specific classes of supplies and commodities to phase
into the DoD RFID implementation.
87. Comment: Hewlett-Packard (HP) finds that the Advance Shipment
Notice (ASN) information requirements in the current state have
seriously significant impact. There are two interconnected areas of
concern: (a) Lack of industry standards: Current standards for ASN
messaging have not yet caught up to include RFID standard information
sets. HP understands that ANSI standards, designed to include
extensions for EPC data, are underway but have not yet been proposed
nor approved. Using requirements unique to DoD, or immature
requirements that must soon be changed, causes unreasonable investment
to be made by suppliers wishing to conform to the requirements. (b)
Multiple implementations: Due to the large and diverse nature of HP
products, geographies and organizations, multiple implementations would
be required. This multiplies the investment burden. This is, of course,
at HP's discretion--however, the combination of multiple
implementations due to evolving standards (a) makes the investment
burden excessively large. Recommendation: Have ASN notifications be
optional until industry standards can be completed and folded in to the
DoD requirements.
DoD Response: The Department intends to maintain the requirement
for ASNs as a mandatory component of the DFARS rule. RFID is a
technology that improves the ability of users in supply chains to
rapidly identify, record, and process items, shipments, or both. The
use of an ASN with RFID technology facilitates the positioning of
shipment data into a receiving information system and allows the
immediate ``hands off'' receipt, via RFID, of that item into inventory
upon the arrival of the actual shipment--thus speeding up product
availability for the customer as well as invoice close-out and payment.
88. Comment: The respondent finds that the implied label placement
specifications for case labels are overly restrictive, and may have
seriously significant impact. As stated, the DoD specification
requires: ``The passive RFID tag should be placed on the
identification-marked side and right of center on a vertical face * *
*.'' Product cases are often heavily printed, and have limited,
designated areas for labels. The respondent intends to use integrated
address/RFID labels, and has only moderate concern about the
restrictions for location of labels on the vertical surface of the
case. The respondent has serious concerns about
[[Page 53967]]
the designation of ``side'' versus ``end'' of cases. The respondent's
standard product design currently has address placement on the ``end''
of cases. Changing address label placement in product design is
impractical and costly. RFID readers and antennae can be placed
appropriately to handle either location.
Recommendation: Allow either side or end placement of address
labels, without qualification.
DoD Response: The MIL-STD-129 contains recommended tag placement
location, but can be adjusted to get maximum tag read rates.
89. Comment: The respondent recognizes the likelihood of forklift
mounted RFID readers in the near future. Industry standards have not
yet addressed the issue of pallet tag location, however it seems likely
that the combination of partial pallets and the mechanical
characteristics of forklifts will likely influence industry standards
to have a lower end range, such as 40 cm above the floor.
Recommendation: Modify lower end range of pallet tag location
specification to 40 cm.
DoD Response: The MIL-STD-129 contains recommended tag placement
location, but can be adjusted to get maximum tag read rates.
90. Comment: The respondent is concerned about the effects that
future RFID tag technology might have in the processes of recovering
different paper grades for recycling, when the paper products are
affixed with RFID tags. The respondent recommends a collaborative
effort with DoD to avoid incorrectly applying data from one segment of
the recycling industry to recycled paperboard.
DoD Response: Noted. We have added additional information from
other segments of the recycling industry to the Regulatory Flexibility
Analysis to give a more balanced view of the industry as a whole. We
look forward to continued work with industry associations as the RFID
effort moves forward.
91. Comment: The respondent presented its opposition on requiring
contractors to affix RFID tags at the case and palletized unit load
levels when shipping certain purchased supplies and equipment until
further information presents itself; outlining the full economic and
environmental impacts of RFID tags on the recycling industry. The
respondent recommends that DoD proceed cautiously. The RFID tags may
have the potential to contaminate large quantities of currently
recyclable material due to its heavy metals content. Moreover, small
chips or pieces of metal slipping through the screening process during
the cleaning and screening process could be a potential problem for
paperboard packaging that comes into contact with food or
pharmaceuticals. Metals are prohibited in paperboard that will come
into contact with food or pharmaceuticals. Additional concerns are that
metals in the RFID tags that would be contaminants in the steelmaking
process, such as copper, could end up going up the stack as air
emissions or stay in the product. The metals constituents of the RFID
tags will be contaminants for PET, HDPE, and especially glass when
concentrated. The DoD should either fund studies or seek partnerships
with other federal agencies with knowledge of the recycling industry to
determine the financial impacts of this decision on the recycling
industry and whether making this policy change would make sense from an
environmental standpoint before making any final decision.
DoD Response: It has been noted in comments from other industry
associations that have commissioned studies on RFID tags (with both
copper and silver antennas) that foil antennas can be sorted out at a
99%+ level, and printed silver ink antenna had a high resistance to
move outside the substrate and the silver remains in the fiber
substrate of the paperboard, additionally, the silver concentrate in
the solid waste and product streams are well below regulatory
thresholds. The DoD will continue to monitor industry testing of
recycling processes containing RFID tags or tag fragments. As the
results of these tests become known, DoD RFID Policy will be amended as
required.
92. Comment: The respondent commented on the current RFID
environment, technology and the work being done to ensure
interoperability.
DoD Response: Noted.
93. Comment: The respondent commented on preliminary results from a
study completed on the recycling of RFID tags which are attached to
corrugated products. This study included crystalline connected copper
and aluminum as well as printed antennae. The study indicated that
existing process technologies in paper and board mills are capable of
satisfactorily dealing with the crystalline connected antennae. More
research is needed to determine if process changes are required for
printed antennae
DoD Response: DoD appreciates this valuable input. DoD will
continue to solicit and accept all research, studies, and analyses that
document the impact of RFID tags to our environment and recycling
industries worldwide.
This rule was subject to Office of Management and Budget review
under Executive Order 12866, dated September 30, 1993.
B. Regulatory Flexibility Act
This final rule may have an impact on a substantial number of small
entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C.
601, et seq. DoD has prepared a final regulatory flexibility analysis,
available at http://www.dodrfid.org/regflex.htm. The analysis is
summarized as follows:
This rule adds requirements for DoD contractors supplying materiel
to the Department to affix passive RFID tags at the case and palletized
unit load levels for specified commodities delivered to specified DoD
locations. To create an automated and sophisticated end-to-end supply
chain, DoD is dependent upon initiating the technology at the point of
origin, the DoD commercial suppliers. Without the assistance of the DoD
supplier base to begin populating the DoD supply chain with passive
RFID tags, a fully integrated, highly visible, automated end-to-end
supply chain is untenable. DoD contractors are presently required to
print and affix military shipping labels to packages delivered to DoD.
Options to comply with the requirements of the rule can be as simple as
replacing existing military shipping label printers with RFID-enabled
printers. This will allow DoD contractors to print military shipping
labels with embedded RFID tags. The regulatory flexibility analysis
also details other options and approximate costs to comply. The rule
also requires contractors to provide an electronic advance shipment
notice in accordance with the procedures at http://www.dodrfid.org/asn.htm
, to associate RFID tag data with the corresponding shipment.
The objective of the rule is to improve visibility of DoD assets in the
supply chain, increase accuracy of shipments and receipts, and reduce
the number of logistic ``touch points'' in order to decrease the amount
of time it takes to deliver material to the warfighter. The rule does
not duplicate, overlap, or conflict with any other Federal rules. DoD
considered all public comments in developing the final rule.
C. Paperwork Reduction Act
This final rule contains a new information collection requirement.
The Office of Management and Budget has approved the information
collection for use through September 30, 2008, under Control Number
0704-0434.
[[Page 53968]]
List of Subjects in 48 CFR Parts 211, 212, and 252
Government procurement.
Michele P. Peterson,
Editor, Defense Acquisition Regulations System.
0
Therefore, 48 CFR Parts 211, 212, and 252 are amended as follows:
0
1. The authority citation for 48 CFR Parts 211, 212, and 252 continues
to read as follows:
Authority: 41 U.S.C. 421 and 48 CFR Chapter 1.
PART 211--DESCRIBING AGENCY NEEDS
0
2. Sections 211.275 through 211.275-3 are added to read as follows:
211.275 Radio frequency identification.
211.275-1 Definitions.
Bulk commodities, case, palletized unit load, passive RFID tag, and
radio frequency identification are defined in the clause at 252.211-
7006, Radio Frequency Identification.
211.275-2 Policy.
Radio frequency identification (RFID), in the form of a passive
RFID tag, is required for individual cases and palletized unit loads
that--
(a) Contain items in any of the following classes of supply, as
defined in DoD 4140.1-R, DoD Supply Chain Materiel Management
Regulation, AP1.1.11, except that bulk commodities are excluded from
this requirement:
(1) Subclass of Class I--Packaged operational rations.
(2) Class II--Clothing, individual equipment, tentage,
organizational tool kits, hand tools, and administrative and
housekeeping supplies and equipment.
(3) Class VI--Personal demand items (non-military sales items).
(4) Class IX--Repair parts and components including kits,
assemblies and subassemblies, reparable and consumable items required
for maintenance support of all equipment, excluding medical-peculiar
repair parts; and
(b) Will be shipped to one of the following locations:
(1) Defense Distribution Depot, Susquehanna, PA: DoDAAC W25G1U or
SW3124.
(2) Defense Distribution Depot, San Joaquin, CA: DoDAAC W62G2T or
SW3224.
211.275-3 Contract clause.
Use the clause at 252.211-7006, Radio Frequency Identification, in
solicitations and contracts that will require shipment of items meeting
the criteria at 211.275-2.
PART 212--ACQUISITION OF COMMERCIAL ITEMS
0
3. Section 212.301 is amended by removing paragraph (3) introductory
text and paragraphs (3)(i) through (iii) and adding paragraph (f)(ix)
at the end of the section to read as follows:
212.301 Solicitation provisions and contract clauses for the
acquisition of commercial items.
* * * * *
(f) * * *
(ix) Use the clause at 252.211-7006, Radio Frequency
Identification, as prescribed in 211.275-3.
PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
0
4. Section 252.211-7006 is added to read as follows:
252.211-7006 Radio Frequency Identification.
As prescribed in 211.275-3, use the following clause:
Radio Frequency Identification (Nov 2005)
(a) Definitions. As used in this clause--
Advance shipment notice means an electronic notification used to
list the contents of a shipment of goods as well as additional
information relating to the shipment, such as order information,
product description, physical characteristics, type of packaging,
marking, carrier information, and configuration of goods within the
transportation equipment.
Bulk commodities means the following commodities, when shipped
in rail tank cars, tanker trucks, trailers, other bulk wheeled
conveyances, or pipelines:
(1) Sand.
(2) Gravel.
(3) Bulk liquids (water, chemicals, or petroleum products).
(4) Ready-mix concrete or similar construction materials.
(5) Coal or combustibles such as firewood.
(6) Agricultural products such as seeds, grains, or animal feed.
Case means either a MIL-STD-129 defined exterior container
within a palletized unit load or a MIL-STD-129 defined individual
shipping container.
Electronic Product Code\TM\ (EPC) means an identification scheme
for universally identifying physical objects via RFID tags and other
means. The standardized EPC data consists of an EPC (or EPC
identifier) that uniquely identifies an individual object, as well
as an optional filter value when judged to be necessary to enable
effective and efficient reading of the EPC tags. In addition to this
standardized data, certain classes of EPC tags will allow user-
defined data. The EPC tag data standards will define the length and
position of this data, without defining its content.
EPCglobal\TM\ means a joint venture between EAN International
and the Uniform Code Council to establish and support the EPC
network as the global standard for immediate, automatic, and
accurate identification of any item in the supply chain of any
company, in any industry, anywhere in the world.
Exterior container means a MIL-STD-129 defined container,
bundle, or assembly that is sufficient by reason of material,
design, and construction to protect unit packs and intermediate
containers and their contents during shipment and storage. It can be
a unit pack or a container with a combination of unit packs or
intermediate containers. An exterior container may or may not be
used as a shipping container.
Palletized unit load means a MIL-STD-129 defined quantity of
items, packed or unpacked, arranged on a pallet in a specified
manner and secured, strapped, or fastened on the pallet so that the
whole palletized load is handled as a single unit. A palletized or
skidded load is not considered to be a shipping container. A loaded
463L System pallet is not considered to be a palletized unit load.
Refer to the Defense Transportation Regulation, DoD 4500.9-R, Part
II, Chapter 203, for marking of 463L System pallets.
Passive RFID tag means a tag that reflects energy from the
reader/interrogator or that receives and temporarily stores a small
amount of energy from the reader/interrogator signal in order to
generate the tag response. Acceptable tags are--
(1) EPC Class 0 passive RFID tags that meet the EPCglobal Class
0 specification; and
(2) EPC Class 1 passive RFID tags that meet the EPCglobal Class
1 specification.
Radio Frequency Identification (RFID) means an automatic
identification and data capture technology comprising one or more
reader/interrogators and one or more radio frequency transponders in
which data transfer is achieved by means of suitably modulated
inductive or radiating electromagnetic carriers.
Shipping container means a MIL-STD-129 defined exterior
container that meets carrier regulations and is of sufficient
strength, by reason of material, design, and construction, to be
shipped safely without further packing (e.g., wooden boxes or
crates, fiber and metal drums, and corrugated and solid fiberboard
boxes).
(b)(1) Except as provided in paragraph (b)(2) of this clause,
the Contractor shall affix passive RFID tags, at the case and
palletized unit load packaging levels, for shipments of items that--
(i) Are in any of the following classes of supply, as defined in
DoD 4140.1-R, DoD Supply Chain Materiel Management Regulation,
AP1.1.11:
(A) Subclass of Class I--Packaged operational rations.
(B) Class II--Clothing, individual equipment, tentage,
organizational tool kits, hand tools, and administrative and
housekeeping supplies and equipment.
(C) Class VI--Personal demand items (non-military sales items).
(D) Class IX--Repair parts and components including kits,
assemblies and subassemblies,
[[Page 53969]]
reparable and consumable items required for maintenance support of
all equipment, excluding medical-peculiar repair parts; and
(ii) Are being shipped to--
(A) Defense Distribution Depot, Susquehanna, PA: DoDAAC W25G1U
or SW3124; or
(B) Defense Distribution Depot, San Joaquin, CA: DoDAAC W62G2T
or SW3224.
(2) Bulk commodities are excluded from the requirements of
paragraph (b)(1) of this clause.
(c) The Contractor shall ensure that--
(1) The data encoded on each passive RFID tag are unique (i.e.,
the binary number is never repeated on any and all contracts) and
conforms to the requirements in paragraph (d) of this clause;
(2) Each passive tag is readable at the time of shipment in
accordance with MIL-STD-129 (Section 4.9.1.1) readability
performance requirements; and
(3) The passive tag is affixed at the appropriate location on
the specific level of packaging, in accordance with MIL-STD-129
(Section 4.9.2) tag placement specifications.
(d) Data syntax and standards. The Contractor shall use one or
more of the following data constructs to write the RFID tag
identification to the passive tag, depending upon the type of
passive RFID tag being used in accordance with the tag construct
details located at http: //http://www.dodrfid.org/ tagdata.htm (version in
effect as of the date of the solicitation):
(1) Class 0, 64 Bit Tag--EPCglobal Serialized Global Trade Item
Number (SGTIN), Global Returnable Asset Identifier (GRAI), Global
Individual Asset Identifier (GIAI), or Serialized Shipment Container
Code (SSCC).
(2) Class 0, 64 Bit Tag--DoD Tag Construct.
(3) Class 1, 64 Bit Tag--EPCglobal SGTIN, GRAI, GIAI, or SSCC.
(4) Class 1, 64 Bit Tag--DoD Tag Construct.
(5) Class 0, 96 Bit Tag--EPCglobal SGTIN, GRAI, GIAI, or SSCC.
(6) Class 0, 96 Bit Tag--DoD Tag Construct.
(7) Class 1, 96 Bit Tag--EPCglobal SGTIN, GRAI, GIAI, or SSCC.
(8) Class 1, 96 Bit Tag--DoD Tag Construct.
(e) Receiving report. The Contractor shall electronically submit
advance shipment notice(s) with the RFID tag identification
(specified in paragraph (d) of this clause) in advance of the
shipment in accordance with the procedures at http://www.dodrfid.org/asn.htm
.
(End of Clause)
[FR Doc. 05-18025 Filed 9-12-05; 8:45 am]
BILLING CODE 5001-08-P