[Title 48 CFR ]
[Code of Federal Regulations (annual edition) - October 1, 2004 Edition]
[From the U.S. Government Printing Office]



[[Page i]]



          48


          Chapter 29 to End

                         Revised as of October 1, 2004


          Federal Acquisition Regulations System
          
          


________________________

          Containing a codification of documents of general 
          applicability and future effect

          As of October 1, 2004
          With Ancillaries
                    Published by
                    Office of the Federal Register
                    National Archives and Records
                    Administration
                    A Special Edition of the Federal Register

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                     U.S. GOVERNMENT PRINTING OFFICE
                            WASHINGTON : 2004



  For sale by the Superintendent of Documents, U.S. Government Printing 
                                  Office
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      Fax: (202) 512-2250 Mail: Stop SSOP, Washington, DC 20402-0001

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                            Table of Contents



                                                                    Page
  Explanation.................................................      vi

  Title 48:
          Chapter 29--Department of Labor                            3
          Chapter 30--Department of Homeland Security, 
          Homeland Security Acquisition Regulation (HSAR)           59
          Chapter 34--Department of Education Acquisition 
          Regulation                                               123
          Chapter 35--Panama Canal Commission                      151
          Chapter 44--Federal Emergency Management Agency          235
          Chapter 51--Department of the Army Acquisition 
          Regulations                                              259
          Chapter 52--Department of the Navy Acquisition 
          Regulations                                              273
          Chapter 53--Department of the Air Force Federal 
          Acquisition Regulation Supplement [Reserved]
          Chapter 54--Defense Logistics Agency, Department of 
          Defense                                                  281
          Chapter 57--African Development Foundation               285
          Chapter 61--General Services Administration Board of 
          Contract Appeals                                         289
          Chapter 63--Department of Transportation Board of 
          Contract Appeals                                         329
          Chapter 99--Cost Accounting Standards Board, Office 
          of Federal Procurement Policy, Office of Management 
          and Budget                                               343

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  Finding Aids:
      Table of CFR Titles and Chapters........................     561
      Alphabetical List of Agencies Appearing in the CFR......     579
      List of CFR Sections Affected...........................     589

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                     ----------------------------

                     Cite this Code: CFR
                     To cite the regulations in 
                       this volume use title, 
                       part and section number. 
                       Thus, 48 CFR 2901.100 
                       refers to title 48, part 
                       2901, section 100.

                     ----------------------------

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                               EXPLANATION

    The Code of Federal Regulations is a codification of the general and 
permanent rules published in the Federal Register by the Executive 
departments and agencies of the Federal Government. The Code is divided 
into 50 titles which represent broad areas subject to Federal 
regulation. Each title is divided into chapters which usually bear the 
name of the issuing agency. Each chapter is further subdivided into 
parts covering specific regulatory areas.
    Each volume of the Code is revised at least once each calendar year 
and issued on a quarterly basis approximately as follows:

Title 1 through Title 16.................................as of January 1
Title 17 through Title 27..................................as of April 1
Title 28 through Title 41...................................as of July 1
Title 42 through Title 50................................as of October 1

    The appropriate revision date is printed on the cover of each 
volume.

LEGAL STATUS

    The contents of the Federal Register are required to be judicially 
noticed (44 U.S.C. 1507). The Code of Federal Regulations is prima facie 
evidence of the text of the original documents (44 U.S.C. 1510).

HOW TO USE THE CODE OF FEDERAL REGULATIONS

    The Code of Federal Regulations is kept up to date by the individual 
issues of the Federal Register. These two publications must be used 
together to determine the latest version of any given rule.
    To determine whether a Code volume has been amended since its 
revision date (in this case, October 1, 2004), consult the ``List of CFR 
Sections Affected (LSA),'' which is issued monthly, and the ``Cumulative 
List of Parts Affected,'' which appears in the Reader Aids section of 
the daily Federal Register. These two lists will identify the Federal 
Register page number of the latest amendment of any given rule.

EFFECTIVE AND EXPIRATION DATES

    Each volume of the Code contains amendments published in the Federal 
Register since the last revision of that volume of the Code. Source 
citations for the regulations are referred to by volume number and page 
number of the Federal Register and date of publication. Publication 
dates and effective dates are usually not the same and care must be 
exercised by the user in determining the actual effective date. In 
instances where the effective date is beyond the cut-off date for the 
Code a note has been inserted to reflect the future effective date. In 
those instances where a regulation published in the Federal Register 
states a date certain for expiration, an appropriate note will be 
inserted following the text.

OMB CONTROL NUMBERS

    The Paperwork Reduction Act of 1980 (Pub. L. 96-511) requires 
Federal agencies to display an OMB control number with their information 
collection request.

[[Page vii]]

Many agencies have begun publishing numerous OMB control numbers as 
amendments to existing regulations in the CFR. These OMB numbers are 
placed as close as possible to the applicable recordkeeping or reporting 
requirements.

OBSOLETE PROVISIONS

    Provisions that become obsolete before the revision date stated on 
the cover of each volume are not carried. Code users may find the text 
of provisions in effect on a given date in the past by using the 
appropriate numerical list of sections affected. For the period before 
January 1, 2001, consult either the List of CFR Sections Affected, 1949-
1963, 1964-1972, 1973-1985, or 1986-2000, published in 11 separate 
volumes. For the period beginning January 1, 2001, a ``List of CFR 
Sections Affected'' is published at the end of each CFR volume.

CFR INDEXES AND TABULAR GUIDES

    A subject index to the Code of Federal Regulations is contained in a 
separate volume, revised annually as of January 1, entitled CFR Index 
and Finding Aids. This volume contains the Parallel Table of Statutory 
Authorities and Agency Rules (Table I). A list of CFR titles, chapters, 
and parts and an alphabetical list of agencies publishing in the CFR are 
also included in this volume.
    An index to the text of ``Title 3--The President'' is carried within 
that volume.
    The Federal Register Index is issued monthly in cumulative form. 
This index is based on a consolidation of the ``Contents'' entries in 
the daily Federal Register.
    A List of CFR Sections Affected (LSA) is published monthly, keyed to 
the revision dates of the 50 CFR titles.

REPUBLICATION OF MATERIAL

    There are no restrictions on the republication of material appearing 
in the Code of Federal Regulations.

INQUIRIES

    For a legal interpretation or explanation of any regulation in this 
volume, contact the issuing agency. The issuing agency's name appears at 
the top of odd-numbered pages.
    For inquiries concerning CFR reference assistance, call 202-741-6000 
or write to the Director, Office of the Federal Register, National 
Archives and Records Administration, Washington, DC 20408 or e-mail 
fedreg.info@nara.gov.

SALES

    The Government Printing Office (GPO) processes all sales and 
distribution of the CFR. For payment by credit card, call toll-free, 
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371954, Pittsburgh, PA 15250-7954. For GPO Customer Service call 202-
512-1803.

ELECTRONIC SERVICES

    The full text of the Code of Federal Regulations, the LSA (List of 
CFR Sections Affected), The United States Government Manual, the Federal 
Register, Public Laws, Public Papers, Weekly Compilation of Presidential 
Documents and the Privacy Act Compilation are available in electronic 
format at www.access.gpo.gov/nara (``GPO Access''). For more 
information, contact Electronic Information Dissemination Services, U.S. 
Government Printing Office. Phone 202-512-1530, or 888-293-6498 (toll-
free). E-mail, gpoaccess@gpo.gov.

[[Page viii]]

    The Office of the Federal Register also offers a free service on the 
National Archives and Records Administration's (NARA) World Wide Web 
site for public law numbers, Federal Register finding aids, and related 
information. Connect to NARA's web site at www.archives.gov/federal--
register. The NARA site also contains links to GPO Access.

                              Raymond A. Mosley,
                                    Director,
                          Office of the Federal Register.

October 1, 2004.

[[Page ix]]



                               THIS TITLE

    Title 48--Federal Acquisition Regulations System is composed of 
seven volumes. The chapters in these volumes are arranged as follows: 
Chapter 1 (parts 1 to 51), chapter 1 (parts 52 to 99), chapter 2 (parts 
201 to 299), chapters 3 to 6, chapters 7 to 14, chapters 15 to 28 and 
chapter 29 to end. The contents of these volumes represent all current 
regulations codified under this title of the CFR as of October 1, 2004.

    The Federal acquisition regulations in chapter 1 are those 
government-wide acquisition regulations jointly issued by the General 
Services Administration, the Department of Defense, and the National 
Aeronautics and Space Administration. Chapters 2 through 99 are 
acquisition regulations issued by individual government agencies. Parts 
1 to 69 in each of chapters 2 through 99 are reserved for agency 
regulations implementing the Federal acquisition regulations in chapter 
1 and are numerically keyed to them. Parts 70 to 99 in chapters 2 
through 99 contain agency regulations supplementing the Federal 
acquisition regulations.

    The OMB control numbers for the Federal Acquisition Regulations 
System appear in section 1.106 of chapter 1. For the convenience of the 
user section 1.106 is reprinted in the Finding Aids section of the 
second volume containing chapter 1 (parts 52 to 99).

    The first volume, containing chapter 1 (parts 1 to 51), includes an 
index to the Federal acquisition regulations.

    For this volume, Robert J. Sheehan was Chief Editor. The Code of 
Federal Regulations publication program is under the direction of 
Frances D. McDonald, assisted by Alomha S. Morris.

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[[Page 1]]



            TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM




                 (This book contains chapter 29 to End)

  --------------------------------------------------------------------
                                                                    Part

chapter 29--Department of Labor.............................        2901

chapter 30--Department of Homeland Security, Homeland 
  Security Acquisition Regulation (HSAR)....................        3001

chapter 34--Department of Education Acquisition Regulation..        3401

chapter 35--Panama Canal Commission.........................        3501

chapter 44--Federal Emergency Management Agency.............        4401

chapter 51--Department of the Army Acquisition Regulations..        5108

chapter 52--Department of the Navy Acquisition Regulations..        5215
chapter 53--Department of the Air Force Federal Acquisition Regulation 
  Supplement [Reserved]

chapter 54--Defense Logistics Agency, Department of Defense.        5416

chapter 57--African Development Foundation..................        5706

chapter 61--General Services Administration Board of 
  Contract Appeals..........................................        6101

[[Page 2]]


chapter 63--Department of Transportation Board of Contract 
  Appeals...................................................        6301

chapter 99--Cost Accounting Standards Board, Office of 
  Federal Procurement Policy, Office of Management and 
  Budget....................................................        9900

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                     CHAPTER 29--DEPARTMENT OF LABOR




           General Structure and Subparts (Parts 2900 to 2999)

  --------------------------------------------------------------------

                          SUBCHAPTER A--GENERAL
Part                                                                Page
2901            Department of Labor acquisition regulation 
                    system..................................           5
2902            Definitions of words and terms..............          12
2903            Improper business practices and personal 
                    conflicts of interest...................          13
2904            Administrative matters......................          16
                   SUBCHAPTER B--ACQUISITION PLANNING
2905            Publicizing contract actions................          17
2906            Competition requirements....................          18
2907            Acquisition planning........................          18
2908            Required sources of supplies and services...          19
2909            Contractor qualifications...................          19
2910            Market research.............................          22
2911            Describing agency needs.....................          23
2912            Acquisition of commercial items.............          23
2913            Simplified acquisition procedures...........          24
          SUBCHAPTER C--CONTRACTING METHODS AND CONTRACT TYPES
2914            Sealed bidding..............................          26
2915            Contracting by negotiation..................          26
2916            Contract types..............................          28
2917            Special contracting methods.................          28
                  SUBCHAPTER D--SOCIOECONOMIC PROGRAMS
2918            [Reserved]
2919            Small business and small disadvantaged 
                    business concerns.......................          31
2920-2921       [Reserved]
2922            Application of labor laws to government 
                    acquisitions............................          33

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2923            Environment, energy and water efficiency, 
                    renewable energy technologies, 
                    occupational safety, and drug-free 
                    workplace...............................          34
2924-2927       [Reserved]

             SUBCHAPTER E--GENERAL CONTRACTING REQUIREMENTS
2928            Bonds and insurance.........................          36
2929            Taxes.......................................          36
2930            Cost accounting standards administration....          36
2931            Contract cost principles and procedures.....          37
2932            Contract financing..........................          37
2933            Protests, disputes, and appeals.............          37
2934-2935       [Reserved]
2936            Construction and architect-engineer 
                    contracts...............................          40
2937            Service contracting.........................          42
2938-2941       [Reserved]

                    SUBCHAPTER G--CONTRACT MANAGEMENT
2942            Contract administration and audit services..          45
2943            Contract modifications......................          46
2944            Subcontracting policies and procedures......          46
2945            Government property.........................          47
2946-2951       [Reserved]

                     SUBCHAPTER H--CLAUSES AND FORMS
2952            Solicitation provisions and contract clauses          49
2953            Forms.......................................          49

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                          SUBCHAPTER A_GENERAL





PART 2901_DEPARTMENT OF LABOR ACQUISITION REGULATION SYSTEM--Table of Contents




                     Subpart 2901.0_Scope of Subpart

Sec.
2901.001 Scope of subpart.

               Subpart 2901.1_Purpose, Authority, Issuance

2901.101 Purpose.
2901.103 Authority.
2901.105-2 Arrangement of regulations.
2901.105-3 Copies.

                      Subpart 2901.2_Administration

2901.201-1 Maintenance of the FAR.

              Subpart 2901.3_Agency Acquisition Regulations

2901.302 Limitations.
2901.304 Agency control and compliance procedures.

            Subpart 2901.4_Deviations From the FAR and DOLAR

2901.403 Individual deviations from the FAR.
2901.404 Class deviations.
2901.405 Deviations pertaining to treaties and executive agreements.

     Subpart 2901.6_Career Development, Contracting Authority, and 
                            Responsibilities

2901.601 General.
2901.602 Contracting officers.
2901.602-1 Authority.
2901.602-3 Ratification of unauthorized commitments.
2901.603 Selection, appointment, and termination of Appointment.
2901.603-1 General.
2901.603-3 Appointment.
2901.603-4 Terminations.
2901.603-70 Responsibility of other government personnel.
2901.603-71 Contracting officer's technical representatives (COTR).
2901.603-72 Administrative procurement management reviews.

               Subpart 2901.7_Determinations and Findings

2901.707 Signatory authority.

    Authority: 5 U.S.C. 301, 40 U.S.C. 486(c).

    Source: 69 FR 22991, Apr. 27, 2004, unless otherwise noted.



                     Subpart 2901.0_Scope of Subpart



2901.001  Scope of part.

    This chapter may be referred to as the Department of Labor 
Acquisition Regulation or the DOLAR. This subpart sets forth 
introductory information about the Department of Labor Acquisition 
Regulation. This subpart explains the relationship of the DOLAR to the 
Federal Acquisition Regulation (FAR) and explains the DOLAR's purpose, 
authority, applicability, exclusions, and issuance.



               Subpart 2901.1_Purpose, Authority, Issuance



2901.101  Purpose.

    (a) Chapter 29, Department of Labor Acquisition Regulation, is 
established within Title 48 of the Federal Acquisition Regulation System 
of the Code of Federal Regulations.
    (b) The purpose of the DOLAR is to implement the FAR, and to 
supplement the FAR when coverage is needed for subject matter not 
covered in the FAR. The DOLAR is not by itself a complete document, as 
it must be used in conjunction with the FAR.



2901.103  Authority.

    The DOLAR is issued pursuant to the authority of the Secretary of 
Labor under 5 U.S.C. 301 and 40 U.S.C. 486(c). This authority has been 
delegated to the Assistant Secretary for Administration and Management 
under Secretary's Order 4-76 in accordance with FAR 1.301(d)(3).



2901.105-2  Arrangement of regulations.

    (a) Numbering. Where DOLAR implements the FAR, the implementing 
part, subpart, section or subsection of the DOLAR is numbered and 
captioned, to the extent feasible, the same as the FAR part, subpart, 
section or subsection being implemented, except that

[[Page 6]]

the section or subsection being implemented is preceded with a 29 or a 
290 such that there will always be four numbers to the left of the first 
decimal. For example, the DOLAR implementation of FAR l.105-l is shown 
as 290l.105-1 and the DOLAR implementation of FAR subpart 24.1 is shown 
as DOLAR subpart 2924.1. Material which supplements the FAR is assigned 
the subsection numbers 70 and up. For example, the DOL regulation 
governing appointment and termination of contracting officers' technical 
representatives is identified as 2901.603-71.
    (b) References to FAR materials within the DOLAR will include the 
acronym FAR and the identifying number, for example, FAR l.104-2(c)(2). 
References to DOLAR materials within the DOLAR simply cite the 
identifying number, for example, 2901.104-2(c)(2).



2901.105-3  Copies.

    Copies of the DOLAR published in the Federal Register, CD-ROM, or 
Code of Federal Regulations may be purchased from the Superintendent of 
Documents, Government Printing Office, Washington, DC 20402, or from the 
Government Printing Office Web Page, http://www.gpo.gov/. Requests 
should reference the DOLAR as chapter 29 of title 48. The Code of 
Federal Regulations is printed in paperback edition with updates as 
needed. Additional information on DOL may be obtained on the Internet at 
www.dol.gov. Other DOL procurement policy documents referenced within 
the DOLAR may be available when appropriate by mail from the Division of 
Acquisition Management Services.



                      Subpart 2901.2_Administration



2901.201-1  Maintenance of the FAR.

    A member of the Division of Acquisition Management Services (DAMS), 
an organization within the Office of Acquisition and Management Support 
Services, the Business Operations Center, Office of the Assistant 
Secretary for Administration and Management (OASAM), represents the 
Department of Labor on the Civilian Agency Acquisition Council (CAAC). 
DAMS will be responsible for coordination with all interested DOL 
elements regarding proposed FAR revisions and advocating revisions 
sought by DOL.



              Subpart 2901.3_Agency Acquisition Regulations



2901.302  Limitations.

    DOLAR System issuances are limited to published, codified, 
Department-wide regulations, which implement or supplement FAR policies 
and procedures and which affect organizations or individuals seeking to 
contract with the Department.



2901.304  Agency control and compliance procedures.

    (a) The DOLAR is under the direct oversight and control of the 
Department's Senior Procurement Executive. Procedures for review and 
approval of issuances under the DOLAR System comply with FAR subparts 
1.3 and 1.4. These procedures are contained in subpart 2901.6.
    (b) DOLAR issuances shall comply with the restrictions in FAR 
1.304(b).
    (c) Heads of Contracting Activity (HCAs) must submit all proposed 
instructions and materials that implement or supplement the DOLAR to the 
Director, DAMS. In conjunction with the Office of the Solicitor, DAMS 
will review all issuances whether or not they will be published in the 
Federal Register as a part of the DOLAR System. In the case of internal 
procurement policy instructions, the purpose of the review is to 
ascertain that such instructions are consistent with the FAR and the 
DOLAR and that they do not contain information which should be issued 
under the DOLAR.



            Subpart 2901.4_Deviations From the FAR and DOLAR



2901.403  Individual deviations from the FAR.

    (a) The Senior Procurement Executive is authorized to approve 
deviations from FAR provisions (see FAR 1.403) or DOLAR provisions, 
which affect only one contracting action, unless FAR 1.405(e) is 
applicable. Requests for deviations shall be submitted through the 
Director, DAMS.

[[Page 7]]

    (b) Requests for deviations under paragraph (a) of this section must 
be submitted by the HCA and include justification as to why the 
deviation is required.
    (c) A copy of the approved deviation must be included in the 
contract file.



2901.404  Class deviations.

    (a) The Senior Procurement Executive is authorized to approve class 
deviations from FAR or DOLAR provisions which affect more than one 
contracting action, unless FAR 1.405(e) is applicable. The request for 
deviation is submitted through the Director, DAMS.
    (b) Requests for deviations under paragraph (a) of this section must 
be submitted by the HCA and include justification as to why the 
deviation is required and the number of contracting actions which will 
be affected.
    (c) For a FAR class deviation the Director, DAMS will consult with 
the Chair of the CAAC, as required in FAR 1.404(a)(1), before 
authorizing the deviation.
    (d) A copy of the approved class deviation must be included in each 
contract file.
    (e) Recommended revisions to the FAR and a copy of each approved 
class FAR deviation will be transmitted to the FAR Secretariat by the 
Director, DAMS as required in FAR 1.404.



2901.405  Deviations pertaining to treaties and executive agreements.

    (a) The Director, DAMS is responsible for transmitting to the FAR 
Secretariat the information required in FAR 1.405(d).
    (b) For deviations not authorized by FAR 1.405(b) or (c), the 
Director, DAMS, will process the request for deviation through the FAR 
Secretariat.



     Subpart 2901.6_Career Development, Contracting Authority, and 
                            Responsibilities



2901.601  General.

    (a) This section deals with contracting authority and 
responsibilities of the head of the agency as described in 2902.1, FAR 
subpart 1.6 and this subpart.
    (1) The authority and responsibility vested in the Secretary to 
contract for authorized supplies and services is delegated to the 
Assistant Secretary for Administration and Management.
    (2) The Assistant Secretary for Administration and Management may 
delegate contracting authority to a bureau or agency within the 
Department of Labor as he/she delineates in writing.
    (b) The Assistant Secretary for Administration and Management, 
acting through the Senior Procurement Executive, may delegate additional 
procurement authority subject to the issuance of warrants by the Senior 
Procurement Executive, and reserves the right to rescind any acquisition 
authority, if it is determined that such action is in the best interest 
of the Government.



2901.602  Contracting officers.



2901.602-1  Authority.

    Contracting warrants, at all levels above the micro-purchase 
threshold, must be requested by the HCA in writing and signed by the 
Senior Procurement Executive. Warrants may be accompanied by letters of 
appointment that may provide requirements for maintaining the warrant 
(e.g., maintaining current documentation for the FAR, DOLAR, and other 
guidance, and recurrent training). Copies of the appointment shall be 
maintained in the Division of Acquisition Management Services. 
Contracting officers must display the original warrant (and its 
limitations) in their workspace. A listing of current contracting 
officers may be available for review on the Internet at http://
www.dol.gov/oasam/grants/prgms.htm. To modify a contracting officer's 
authority, the present appointment must be revoked and a new certificate 
issued.



2901.602-3  Ratification of unauthorized commitments.

    (a) If the HCA agrees that the commitment appears to be without 
valid authorization, the Division of Acquisition Management Services 
must be notified by the HCA in accordance with the procedures outlined 
in this section.
    (b) Ratifications--Thresholds. The Department of Labor may only 
ratify acquisitions that were intended to fulfill a bona fide need and 
otherwise could

[[Page 8]]

have been authorized when made. If the action to be ratified is not 
approved, then the employee who authorized the work may be liable for 
the entire cost of the action. Requests received by contracting officers 
for ratification of commitments made by personnel lacking contracting 
authority must be processed as follows:

----------------------------------------------------------------------------------------------------------------
                                           Must be approved by (Ratifying
            Dollar threshold                          official)                     Steps to be followed
----------------------------------------------------------------------------------------------------------------
Below the micro-purchase threshold......  Head of the Contracting Office..  1 through 5 & 7.
Between the micropurchase threshold and   Head of Contracting Activity....  1 through 5 & 7.
 the Simplified Acquisition Threshold.
Above the Simplified Acquisition          Assistant Secretary for           1 through 7.
 Threshold.                                Administration and Management,
                                           after review by the Procurement
                                           Review Board.
----------------------------------------------------------------------------------------------------------------
Note: DOL procurement policies require review by the Procurement Review Board of advisory and assistance
  services acquisitions above $50,000 for competitive acquisitions and at any dollar amount for noncompetitive
  acquisitions, and waivers for contracts with employees and recently separated employees. Therefore, review by
  the PRB is required for unauthorized obligations at these lower thresholds.

                            Step--Instruction

    (1) The individual is placed on notice by the contracting officer, 
in writing, that the purchase may be inappropriate because he did not 
have a purchasing request, funding, or authority to obligate the 
Government to make an expenditure of funds.
    (i) The individual who made the unauthorized contractual commitment 
shall furnish the contracting officer all records and documents 
concerning the commitment and a complete written statement of the facts, 
including, but not limited to a statement as to why the acquisition 
office was not used, a description of work to be performed or products 
to be furnished, an estimated or agreed-upon contract price, citation of 
appropriation available, and a statement as to whether the contractor 
has commenced performance.
    (ii) In the absence of such an individual, the head of the 
applicable office will be responsible for providing such information, 
including an explanation of why the individual who made the unauthorized 
commitment is unavailable to provide this information.
    (2) The individual who made the unauthorized commitment or the head 
of the applicable office, as appropriate, shall provide a determination 
and finding (See FAR 1.704) to the contracting officer indicating that:
    (i) Supplies or services have been provided to and accepted by the 
Government, or the Government otherwise has obtained or will obtain a 
benefit resulting from performance of the unauthorized commitment;
    (ii) A procurement request and/or accompanying documentation 
including a statement signed by the individual that explains why normal 
acquisition procedures were not followed, explains why the source was 
selected, lists other sources considered, describes the work, and 
estimates or states the agreed upon price. (If the DOL employee who made 
the unauthorized commitment is no longer available, appropriate program 
personnel must provide the information described in this paragraph); and
    (iii) Funds are available and were available at the time of the 
unauthorized commitment.
    (3) The contracting officer reviewing the unauthorized commitment 
shall determine whether the price is fair and reasonable and if payment 
is recommended to the ratifying official. (The contracting officer may 
rely upon written documentation submitted by managing staff above the 
individual who made the unauthorized commitment, in making his/her 
determination.)
    (4) Legal review is required before ratification by the ratifying 
official.
    (5) The ratifying official shall make an affirmative determination 
and finding that:
    (i) The resulting purchase order or contract would otherwise have 
been proper if made by an appropriate contracting officer.
    (ii) The contracting officer reviewing the unauthorized commitment 
has determined that the price is fair and reasonable and payment is 
recommended.

[[Page 9]]

    (6) For cases over the simplified acquisition threshold, all 
documentation for steps (1) through (5) must be forwarded to the 
Director, Division of Acquisition Management Services, for submission to 
the Procurement Review Board. However, the ratifying official is 
responsible for directing the receipt and acceptance for all products 
and deliverables received by the Government as a result of an 
unauthorized commitment.
    (7) The supervisor of the individual who made the unauthorized 
commitment shall prepare a corrective action plan to preclude further 
unauthorized commitments (e.g., ethics, purchase card, or administrative 
procedures training, or other appropriate action). The ratifying 
official may approve the corrective action plan. The individual shall 
report to the ratifying official in writing when the corrective action 
has been initiated and again after it has been fully implemented.



2901.603  Selection, appointment, and termination of appointment.



2901.603-1  General.

    (a) The Senior Procurement Executive will develop and manage an 
acquisition career management program for contracting personnel. 
Training requirements must conform to Office of Federal Procurement 
Policy Letters 92-3, 97-01, and the Federal Acquisition Institute's 
curriculum. These references are available at:

http://www.arnet.gov/Library/OFPP/PolicyLetters/Letters/PL97-01.html,
http://www.arnet.gov/Library/OFPP/PolicyLetters/Letters/PL92-3.html, and 
    through the Federal Acquisition Institute (FAI) at:
http://www.faionline.com/fai/campus/index4.htm.

    (b) The program must cover all contracting personnel in the 
following categories:
    (1) General Schedule (GS-1102) Contracting Series (See also FAR 
1.603);
    (2) Contracting officers, regardless of General Schedule Series, 
with contracting authority above the simplified acquisition threshold;
    (3) Purchasing Series (GS-1105), other individuals performing 
purchasing duties and individuals with contracting authority between the 
micro-purchase and simplified acquisition thresholds.
    (4) All Contracting Officer Technical Representatives as identified 
in 2901.603-71.



2901.603-3  Appointment.

    General. In accordance with FAR 1.603-3, appointments will be made 
in writing on an SF 1402 for all warrants above the micro-purchase 
threshold. In addition, appointments may be made for specific functions 
unrelated to dollar threshold, such as indirect cost negotiation, debt 
management, and closeout functions.
    (a) Purchase Cards (micro-purchase threshold). Purchase cardholders 
will be appointed in accordance with the DOL Guidelines for Purchase 
Card Use and the Agency/Office procedures approved by the HCA. Agency/
Organization Purchase Card Coordinators requesting issuance of a 
purchase card must be responsible for ensuring that the purchase 
cardholder has taken an orientation course before issuance and/or use of 
the purchase card. A list of purchase cardholders is available at: 
http://www.dol.gov/oasam/foia/hotfoia/citibank-list.htm.
    (b) Simplified Acquisition Threshold (currently $100,000). The HCA 
may request a delegation of procurement authority not to exceed the 
simplified acquisition threshold based on education, training, and 
experience in the acquisition field. Effective July 26, 2004, all new 
appointments must comply with training requirements listed in ``OFPP 
Policy Letter No. 92-3, Procurement Professionalism Program Policy-
Training for Contracting Personnel'', dated June 24, 1992.
    (c) $500,000. The HCA may request a delegation of procurement 
authority not to exceed $500,000 based on the individual's education, 
training and experience in contracting. Although primarily reserved for 
those in the GS-1102 series, the HCA may consider business acumen, 
education, training, and experience. Effective May 27, 2004, all new 
appointments must comply with training requirements listed in ``OFPP 
Policy Letter No. 92-3, Procurement Professionalism Program Policy-
Training for Contracting Personnel'', dated June 24, 1992.

[[Page 10]]

    (d) Unlimited. The HCA may request a delegation of procurement 
authority on an unlimited basis for individuals whose education, 
training, and experience in contracting warrant such authority. Although 
primarily reserved for those in the GS-1102 series, the HCA may consider 
length of service, training, and experience. Effective May 27, 2004, all 
new appointments must comply with training requirements listed in ``OFPP 
Policy Letter No. 92-3, Procurement Professionalism Program Policy-
Training for Contracting Personnel'', dated June 24, 1992.



2901.603-4  Terminations.

    Termination of a contracting officer's appointment will be made in 
writing unless the warrant contains the basis for the termination (i.e., 
retirement, reassignment). Terminations may be immediate, but must not 
operate retroactively.



2901.603-70  Responsibility of other government personnel.

    (a) Only DOL personnel with contracting authority shall obligate DOL 
to any type of contractual obligation and only to the extent of their 
delegated authority. Responsibility for determining how to buy, the 
conduct of the buying process, and execution of the contract rests with 
the contracting officer.
    (b) Personnel responsible for determining agency needs should 
maintain a close and continuous relationship with their contracting 
officer to ensure that acquisition personnel are made aware of 
contemplated acquisition actions. This will be mutually beneficial in 
terms of better planning for acquisition action and more timely, 
efficient and economical acquisition.
    (c) Personnel not delegated contracting authority or insufficient 
contracting authority may not commit the Government, formally or 
informally, to any type of contractual obligation. However, DOL 
personnel who must use the contracting process to accomplish their 
programs must support the contracting officer to ensure that:
    (1) Requirements are clearly defined and specified without being 
overly restrictive in accordance with FAR 11.002;
    (2) Competitive sources are solicited, evaluated, and selected as 
appropriate;
    (3) The FAR and the Competition in Contracting Act requirements for 
full and open competition are satisfied to the maximum extent 
practicable. Sole source purchases may only be permitted in accordance 
with FAR Subpart 6.3 or other applicable provisions of the FAR (e.g. FAR 
Part 8) or federal law;
    (4) Quality standards are prescribed, and met;
    (5) Performance or delivery is timely;
    (6) Files are documented to substantiate the judgments, decisions, 
and actions taken, including compliance with paragraphs (c)(2) and (3) 
of this section;
    (7) Requirements are written so as to encourage competition and to 
comply with regulations and federal policy for meeting acquisition goals 
such as performance-based contracting, HUBZone contractors, etc. The 
contracting officer will identify these programs to the program office.



2901.603-71  Contracting Officer's Technical Representatives (COTR).

    (a) At the time a COTR is to become responsible for a contract, task 
order, or delivery order, the contracting officer must issue a written 
letter of delegation informing the individual by name of his or her 
authority, including a delineation of applicable limitations and 
responsibilities. This applies to contracts awarded by the Department of 
Labor and those awarded by other agencies, such as Federal Supply 
Schedule Contracts or Economy Act transactions. Only the contracting 
officer cognizant of the contract action may make a COTR delegation. 
However, a contracting officer at any level above the cognizant 
contracting officer may sign the delegation letter, following his or her 
determination of its accuracy, completeness, and sufficiency.
    (b) The functions of a COTR typically may include such actions as 
inspecting, testing, and accepting contract line items, monitoring the 
contractor's performance, controlling Government-furnished property, 
reviewing and approving and/or recommending to the contracting officer 
approval/disapproval of vouchers/invoices, etc. An individual

[[Page 11]]

COTR may have only the duties specifically identified in a written 
delegation to him or her by name (i.e., COTR duties may not be delegated 
to a position) and has no authority to exceed them.
    (c) Contracting officers may not delegate to the COTR the following 
authorities:
    (1) The authority to issue task or delivery orders against a 
contract or any of the agreements defined under FAR 16.7;
    (2) The authority to change any of the terms and conditions of a 
contract or any of the agreements defined under FAR 16.7;
    (3) The authority to sign contracts or contract modifications;
    (4) The authority to write letters to the contractor that will 
affect the cost or schedule of the contract. The authority to otherwise 
write letters to a contractor must require the COTR to send a copy of 
the letters to the contracting officer for the contract file;
    (5) The authority to approve contractors' final invoices under cost-
reimbursement contracts. However, the COTR must make a final payment 
recommendation to the contracting officer; or
    (6) The authority to commit the Government to any adjustments to the 
price or cost of the contract or order (e.g., the contracting officer 
must sign all pre-negotiation and price negotiation memoranda including 
those which may be combined into one document for those adjustments 
valued at $100,000 or less).
    (d) The contracting officer's delegation must include the admonition 
that the COTR may be personally liable for unauthorized commitments. 
Contracting officer authority to sign or authorize contractual 
instruments must not be delegated through a COTR designation or by any 
means other than a contracting officer warrant.
    (e) The contractor must be notified of the COTR designation in 
writing and a copy of the COTR letter of appointment also must be 
provided to the contractor. The contracting officer must provide the 
COTR with a copy of the COTR designation notification that was sent to 
the contractor.
    (f) The letter delegating COTR authority must include the contract 
number, and must include the following information, at a minimum:
    (1) Contracting officer's and contract specialist's/administrator's 
name and telephone number;
    (2) COTR's specific authority and responsibilities;
    (3) COTR's specific limitations, including the admonition that the 
COTR may be personally liable for unauthorized commitments;
    (4) Detailed description of the types of files and the content of 
the files to be maintained by the COTR;
    (5) Reference to meeting applicable requirements for ethics, 
procurement integrity, no conflict of interest, and proper standards of 
conduct, including a copy of FAR Part 3, and other regulations, 
statutes, or directives governing these topics (e.g., 5 CFR Part 2635 
Standards of Conduct);
    (6) A requirement that the COTR acknowledge receipt and acceptance 
of the letter and return it to the contracting officer;
    (7) A description of the training required and information on 
obtaining such training.
    (g) Applicability. The eligibility requirements of this subpart must 
apply to all individuals who are designated by the contracting officer 
as COTRs.
    (h) Eligibility standards. To be determined eligible for an 
appointment as a DOL COTR, the following standards must be met:
    (1) The candidate must attend and successfully complete a minimum of 
a 16-hour basic COTR course; and
    (2) The candidate must attend a minimum of 1 hour of training 
specifically in procurement ethics, either through courses offered 
periodically by the Department of Labor, another federal agency's 
program, or a commercial vendor.
    (i) Limitations. Effective May 27, 2004, each COTR appointment made 
by the contracting officer must clearly state that the representative is 
not an authorized contracting officer and does not have the authority 
under any circumstances to:
    (1) Award, agree to award, or execute any contract, contract 
modification, notice of intent, or other form of binding agreement;

[[Page 12]]

    (2) Obligate, in any manner, the payment of money by the Government;
    (3) Make a final decision on any contract matter which is subject to 
the clause at FAR 52.233-1, Disputes; or
    (4) Terminate, suspend, or otherwise interfere with the contractor's 
right to proceed, or direct any changes in the contractor's performance 
that are inconsistent with or materially change the contract 
specifications.
    (j) Termination. (1) Termination of the COTR's appointment must be 
made in writing by a contracting officer and must give the effective 
date of the termination. The contracting officer must promptly modify 
the contract once a COTR termination notice has been issued. A 
termination notice is not required when the COTR's appointment 
terminates upon expiration of the contract.
    (2) COTRs may be terminated for reasons (not an exhaustive listing) 
such as exceeding their authorities and limitations, conflicts of 
interest, unethical conduct, failure to perform, reassignment/
resignation/retirement, and upon completion of the contract to which 
assigned.
    (k) Waivers. No individual may serve as a COTR on any contract 
without the requisite training and signed COTR certificate for the file. 
In the rare event that there is an urgent requirement for a specific 
individual to serve as a COTR and the individual has not successfully 
completed the required training, the HCA may waive the training 
requirements and authorize the individual to perform the COTR duties.



2901.603-72  Administrative procurement management reviews.

    (a) The Senior Procurement Executive is responsible for performing 
administrative procurement reviews for each procurement office in the 
Department of Labor, except the Office of the Inspector General (OIG). 
The purpose of these reviews is to audit internal controls to ensure 
compliance with established procurement law, regulations, policies, 
procedures and applicable directives. The reviews are to emphasize the 
development and improvement of managerial controls and best practices.
    (b) The administrative procurement review system is a three-pronged 
approach that includes self-assessment, statistical data for validation, 
and flexible quality reviews and assessment techniques. This system is 
required to:
    (1) Evaluate the effectiveness and efficiency of office acquisition 
systems;
    (2) Assess the adequacy of policies, procedures and regulations 
governing the acquisition process; and
    (3) Identify and implement changes necessary to improve the systems.
    (c) The Senior Procurement Executive shall establish procurement 
review procedures, which will focus on:
    (1) Conformance with policies of the FAR, DOLAR and the Department 
of Labor Manual Series 2-800 and 2-900.
    (2) Conformance with federal reporting requirements for the 
Department of Labor.
    (3) Understanding of new department-wide or government-wide 
initiatives (e.g., E-Procurement).
    (4) Government-wide procedures established by the Office of 
Management and Budget.
    (d) HCAs are responsible for ensuring contracting activity 
compliance with law and regulations through the review and oversight 
process.



               Subpart 2901.7_Determinations and Findings



2901.707  Signatory authority.

    A class justification for other than full and open competition must 
be approved in writing by the same approval authority as for individual 
justifications in accordance with FAR 6.304(a). The approval level must 
be determined by the estimated total value of the class.



PART 2902_DEFINITIONS OF WORDS AND TERMS--Table of Contents




    Authority: 5 U.S.C. 301, 40 U.S.C. 486(c).



                         Subpart 2.1_Definitions



2902.101  Definitions.

    (a) Commonly used words and terms are defined in FAR subpart 2.1. 
This part 2902 gives DOL-specific meanings for some of these words and 
terms and

[[Page 13]]

defines other words and terms commonly used in the DOL acquisition 
process.
    (b) The following words and terms are used as defined in this 
subpart unless the context in which they are used clearly requires a 
different meaning, or a different definition is prescribed for a 
particular part or portion of a part:
    Competition Advocate The Competition Advocate for the Department of 
Labor is appointed by the Assistant Secretary for Administration and 
Management and is defined in FAR 6.5 and 2906.5. If the appointee is 
recused from a procurement action, the Assistant Secretary for 
Administration and Management may designate another official to act in 
that capacity.
    Contracting Activity means an agency or component office within the 
Department of Labor with specific responsibility for managing contract 
functions pursuant to one or more warrants signed by the Senior 
Procurement Executive (or the Office of the Inspector General for its 
contracting activity).
    Contracting Officer's Technical Representative means the individual 
appointed by the contracting officer to represent the Department of 
Labor's programmatic interests on a Department of Labor contract, task 
order, or delivery order. This individual is responsible to the 
contracting officer for overseeing receipt and acceptance of goods/
services by the Government, reporting on the contractor's performance, 
and approving/disapproving payment to the contractor. Authority is 
otherwise limited to giving technical direction to the contractor within 
the framework of the contract (see 2901.603-71). This position may go by 
other titles, such as: a technical point of contact (TPOC) or Contacting 
Officer's Representative (COR).
    Head of Agency (also called agency head), for the FAR and DOLAR 
only, means the Assistant Secretary for Administration and Management; 
except that the Secretary of Labor is the Head of Agency for acquisition 
actions, which by the terms of a statute or delegation must be performed 
specifically by the Secretary of Labor; the Inspector General is the 
Head of Agency in all cases for the Office of the Inspector General. 
Authority to act as the Head of Agency has been delegated to the 
Assistant Secretary for Employment and Training and the Assistant 
Secretary for Mine Safety and Health for their respective agencies. For 
purposes of the Economy Act (determinations and interagency agreements 
under FAR 17.5) only, the Employee Benefits Security Administration, 
Employment Standards Administration, Women's Bureau, Office of the 
Solicitor, Bureau of Labor Statistics, Office of Disability Employment 
Policy, and the Occupational Safety and Health Administration are 
delegated contracting authority.
    Head of Contracting Activity (HCA) means the official who has 
overall responsibility for managing the contracting activity, when the 
contracting activity has more than one person with a warrant issued by 
the Senior Procurement Executive. In the Department of Labor the 
following officials are the HCA for their respective organization:
    (i) For the Mine Safety and Health Administration, the Director, 
Administration and Management, MSHA.
    (ii) For the Employment and Training Administration, the Director, 
Office of Grants and Contract Management, ETA.
    (iii) For the Office of the Inspector General, the Director, 
Division of Finance and Administration, OIG.
    (iv) For the Bureau of Labor Statistics, the Director, Division of 
Administrative Services, BLS.
    (v) For the Office of the Assistant Secretary for Administration and 
Management and all other agencies not listed in this definition, the 
Director, Business Operations Center, OASAM.
    Senior Procurement Executive means the Deputy Assistant Secretary 
for Administration and Management as defined at FAR 2.101.

[69 FR 22991, Apr. 27, 2004]



PART 2903_IMPROPER BUSINESS PRACTICES AND PERSONAL CONFLICTS OF INTEREST
--Table of Contents




                        Subpart 2903.1_Safeguards

Sec.
2903.101 Standards of conduct.
2903.101-1 General.

[[Page 14]]

2903.104 Procurement integrity.
2903.104-3 Definitions.
2903.104-5 Disclosure, protection, and marking of contractor bid or 
          proposal information and source selection information.
2903.104-7 Violations or possible violations of standards of conduct.

      Subpart 2903.2_Contractor Gratuities to Government Personnel

2903.203 Reporting suspected violations of the Gratuities clause.
2903.204 Treatment of violations.

  Subpart 2903.6_Contracts With Government Employees or Organizations 
                       Owned or Controlled by Them

2903.601 Policy.
2903.602 Exceptions.

    Authority: 5 U.S.C. 301, 40 U.S.C. 486(c).

    Source: 69 FR 22991, Apr. 27, 2004, unless otherwise noted.



                        Subpart 2903.1_Safeguards



2903.101  Standards of conduct.



2903.101-1  General.

    The statutory prohibitions and their application to DOL personnel 
are discussed in the Standards of Ethical Conduct for Employees of the 
Executive Branch, 5 CFR part 2635 and the supplemental DOL standards of 
conduct, 5 CFR part 5201. All DOL personnel involved in acquisitions 
must become familiar with these statutory prohibitions. Any questions 
concerning them must be referred to an Agency Ethics Official in the 
Office of the Solicitor. In addition to criminal penalties, the statutes 
provide that transactions entered into in violation of these 
prohibitions are voidable (18 U.S.C. 218). Any suspected violations must 
be reported promptly to the Office of the Inspector General.



2903.104  Procurement integrity.



2903.104-3  Definitions.

    Agency ethics official means the Solicitor or the Associate 
Solicitor for Legislation and Legal Counsel.



2903.104-5  Disclosure, protection, and marking of contractor bid or 
proposal information and source selection information.

    (a) Government employees serving in the following positions are 
authorized access to proprietary or source selection information, but 
only to the extent necessary to perform their official duties:
    (1) Personnel participating in technical evaluation panels (i.e., 
source selection board) or personnel evaluating an offeror's or bidder's 
technical or cost proposal under other competitive procedures, and 
personnel evaluating protests.
    (2) Personnel assigned to the contracting office.
    (3) The initiator of the procurement request (to include the 
official having principal technical cognizance over the requirement).
    (4) Small business specialists.
    (5) Personnel assigned to the Office of the Solicitor.
    (6) Personnel assigned to the Department of Labor's Division of Cost 
Determination and the Defense Contract Audit Agency.
    (7) Personnel assigned to the Division of Acquisition Management 
Services.
    (8) Members of the Procurement Review Board.
    (9) The Office of the Inspector General.
    (10) Other Government employees authorized by the contracting 
officer.
    (11) Supervisors, at any level, of the personnel listed in this 
paragraph (a).
    (b) The originator of information that may be source selection 
information must consult with the contracting officer or the procurement 
officer, who must determine whether the information is source selection 
information. DOL personnel responsible for preparing source selection 
information as defined in FAR 2.101 must assure that the material is 
marked with the legend in FAR 3.104-4 at the time the material is 
prepared.
    (c) Unless marked with the legend ``SOURCE SELECTION INFORMATION--
SEE FAR 3.104-4,'' draft specifications, purchase descriptions, and 
statements of work could erroneously be released during a market survey 
in order to determine the capabilities of

[[Page 15]]

potential competitive sources (see FAR 7.1 and FAR 10).



2903.104-7  Violations or possible violations of standards of conduct.

    (a) The Senior Procurement Executive is the individual designated to 
receive the contracting officer's report of violations.
    (b) The HCA or designee must refer all information describing an 
actual or possible violation to the Associate Solicitor for Legislation 
and Legal Counsel, the Senior Procurement Executive, and Inspector 
General staff.



      Subpart 2903.2_Contractor Gratuities to Government Personnel



2903.203  Reporting suspected violations of the Gratuities clause.

    Contractor gratuities offered to Government personnel are subject to 
the restriction under the Standards of Ethical Conduct for Employees of 
the Executive Branch, 5 CFR part 2635.



2903.204  Treatment of violations.

    Any suspected violations of FAR subpart 3.2 and the clause at FAR 
52.203-3, Gratuities, must be reported to the Office of the Inspector 
General. The authority to determine whether a violation of the 
Gratuities clause by the contractor, its agent, or another 
representative, has occurred and the appropriate remedies are delegated 
to the HCA.



  Subpart 2903.6_Contracts With Government Employees or Organizations 
                       Owned or Controlled by Them



2903.601  Policy.

    In addition to restrictions placed on current Federal government 
employees, 18 U.S.C. 207 places some restrictions on contracting with 
former officers, employees, and elected officials of the executive and 
legislative branches. Under these prohibitions, contracts with former 
employees are prohibited for a period of one year from the date of 
severance of duties, unless an exception is granted as set forth in 
2903.602.



2903.602  Exceptions.

    (a) In accordance with FAR 3.602, only when there is a most 
compelling reason to do so, is the Assistant Secretary for 
Administration and Management authorized to except a contract from the 
policy in FAR 3.601, after the Procurement Review Board and the agency 
ethics official have reviewed and recommended approval of the exception. 
However, when time does not permit, the Assistant Secretary for 
Administration and Management may unilaterally approve an exception. The 
exception and information supporting the exception must be provided to 
the contracting officer for their official records.
    (b) When an exception under this subpart is requested, it is 
submitted through the director of the cognizant program office to the 
HCA. In the procurement request, the director must describe the basis 
for the exception from the restrictions of FAR 3.601.
    (c) Except as allowed in paragraph (a) of this section, the 
Department of Labor may enter into a negotiated contract or an amendment 
to an existing contract with former employees of DOL within one year of 
separation (or with firms in which former employees are known to have a 
substantial interest) only after review and recommendation for approval 
by the agency ethics official, the Procurement Review Board, and written 
approval by the Assistant Secretary for Administration and Management.
    (d) Approval of a decision to grant an exception as provided in this 
section must be documented by a written findings and determination 
prepared by the requesting official for signature by the Assistant 
Secretary for Administration and Management. The determination and 
findings must document compliance with FAR 3.603, FAR 9.5 and DOLAR 
2909.5; specify the compelling reason(s) for award; and be placed in the 
contract files and the files of the Policy Review Board.

[[Page 16]]



PART 2904_ADMINISTRATIVE MATTERS--Table of Contents




                Subpart 2904.8_Government Contract Files

Sec.
2904.800-70 Contents of contract files.

Appendix A to Part 2904.

    Authority: 5 U.S.C. 301, 40 U.S.C. 486(c).



                Subpart 2904.8_Government Contract Files



2904.800-70  Contents of contract files.

    (a) The reports listed in appendix A to this part are applicable to 
the Department of Labor.
    (b) HCAs must be responsible for establishing standard contract 
files for their contracting activities. The HCA must provide one or more 
representative contract files to the Director, Division of Acquisition 
Management Services, as requested for comment.

                                             Appendix A to Part 2904
----------------------------------------------------------------------------------------------------------------
           Title of report                    Reference                 Date due               Submitted to
----------------------------------------------------------------------------------------------------------------
Report of Proposed Federal             29 CFR 1.4.............  Annually; 20-Aug.......  ESA Davis Bacon.
 Construction*.
Contractor Report of Government        FAR Chapter 45;........  Annually; 31-Oct.......  Business Operations
 Property*.                                                                               Center.
Major Preference Program Goals and     DLMS 2 1000............  By the 20th of each      Office of Small
 Achievements Report*.                                           month.                   Business Programs.
A-76 & FAIR Act Inventory............  FAIR ACT & OMB MEMO....  June 30th of each year.  Office of Competitive
                                                                                          Sourcing.
SF 294, Subcontracting Report for      FAR Subpart 19.7;......  Semi-annually;.........  Contracting Officer.
 Individual Contracts.
                                       SF 294.................  April 30; 30-Oct.......  Office of Small
                                                                                          Business Programs.
SF 295, Summary Subcontract Report...  FAR Subpart 19.7;......  Semi-annually March 30;  Contracting Officer.
                                                                 September 30.
Value Engineering Report*............  OMB Circular A-131.....  Annually; 7-Dec........  Office of Acquisition
                                                                                          and Management Support
                                                                                          Services.
Report on Federal Support to           Section 3(a)(7) of the   Annually; O/A 15-May...  Upon request From
 Universities, Colleges, and            National Science                                  National Science
 Nonprofit Institutions.                Foundation (NSF) Act.                             Foundation.
Procurement Forecast Initial and       Pub. L. 100-656;.......  Sept 15 (Init.) and Apr  Division of Acquisition
 Update.                                                         15 (Update).             Management Services.
----------------------------------------------------------------------------------------------------------------
For those reports with an (*), if there was no activity for the period being reported, a negative response for
  the period must be submitted to the requisitioning office.


[69 FR 22991, Apr. 27, 2004]

[[Page 17]]



                    SUBCHAPTER B_ACQUISITION PLANNING





PART 2905_PUBLICIZING CONTRACT ACTIONS--Table of Contents




               Subpart 2905.1_Dissemination of Information

Sec.
2905.101 Methods of disseminating information.

          Subpart 2905.2_Synopsis of Proposed Contract Actions

2905.202 Exceptions.

                  Subpart 2905.4_Release of Information

2905.402 General public.
2905.403 Requests from Members of Congress.
2905.404 Release procedures.

                   Subpart 2905.5_Paid Advertisements

2905.501 Scope.
2905.502 Authority.
2905.503 Procedures.

    Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).

    Source: 69 FR 22991, Apr. 27, 2004, unless otherwise noted.



               Subpart 2905.1_Dissemination of Information



2905.101  Methods of disseminating information.

    Contracting officers may only use the Government Point of Entry 
(GPE) for synopsis and dissemination of information concerning 
procurement actions. The Division of Acquisition Management Services 
manages the DOL account.



          Subpart 2905.2_Synopsis of Proposed Contract Actions



2905.202  Exceptions.

    The Assistant Secretary for Administration and Management is 
authorized to make the determination prescribed in FAR 5.202(b). A 
written determination documenting the reasons why advance notice is not 
appropriate or reasonable must be submitted by the HCA for appropriate 
action including communication with the officials listed in FAR 
5.202(b).



                  Subpart 2905.4_Release Of Information



2905.402  General public.

    (a) Unless the HCA determines that disclosure would be prejudicial 
to the interests of DOL, if a list of interested parties is collected in 
reference to a solicitation, it may be released upon request.
    (b) Any request for release of information is subject to the Freedom 
of Information Act and FAR 24.2.



2905.403  Requests from Members of Congress.

    All proposed responses to Congressional inquiries must be prepared 
and forwarded for coordination with the Office of the Solicitor and the 
Office of Congressional and Intergovernmental Affairs to determine 
whether circumstances exist that will allow the release of additional 
information. In such instances, the Congressional requestor must be 
furnished an interim reply providing the information that is releasable. 
The interim reply must describe the problem that precludes release of 
any requested materials and describe generally what steps, if any, are 
being taken to make such information available.



2905.404  Release procedures.

    HCAs are authorized to release long-range acquisition estimates 
under the conditions in FAR 5.404-1.



                   Subpart 2905.5_Paid Advertisements



2905.501  Scope.

    This subpart provides policies and procedures for the procurement of 
paid advertising as covered by 5 U.S.C. 302, and 44 U.S.C. 3701, 3702, 
and 3703.



2905.502  Authority.

    When it is deemed necessary to use paid advertisements in newspapers 
and trade journals, written authority for

[[Page 18]]

such publication may be obtained from the HCA or designee.



2905.503  Procedures.

    (a) Prior to obtaining HCA approval, an agency should seek legal 
review to determine whether it has appropriate legal authority for 
advertising. The HCA exercising the authority delegated by 2905.502 must 
do so in accordance with the procedures set forth in FAR 5.503 and those 
in this section.
    (b) Requests for procurement of advertising must be accompanied by 
written authority to advertise or publish which sets forth justification 
and includes the names of newspapers or journals concerned, frequency 
and dates of proposed advertisements, estimated cost, and other 
pertinent information.



PART 2906_COMPETITION REQUIREMENTS--Table of Contents




           Subpart 2906.3_Other Than Full and Open Competition

Sec.
2906.301 Policy.
2906.303 Justifications.

                  Subpart 2906.5_Competition Advocates

2906.501 Requirement.

    Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).

    Source: 69 FR 22991, Apr. 27, 2004, unless otherwise noted.



           Subpart 2906.3_Other Than Full and Open Competition



2906.301  Policy.

    (a) Department of Labor acquisitions must comply with the Department 
of Labor Manual Series (DLMS) 2, Chapter 830 (available by mail from the 
Director, Division of Acquisition Management Services, 200 Constitution 
Ave., NW., Washington, DC 20210-0001), or electronically from http://
www.dol.gov/oasam/programs/boc/prb.htm. Any proposed noncompetitive 
acquisition in excess of the simplified acquisition threshold must be 
fully justified and, if required by the DLMS, submitted to the DOL 
Procurement Review Board and approved by the Assistant Secretary for 
Administration and Management and, in the case of research and 
development contracts, also by the Assistant Secretary for Policy.
    (b) With the exception of contracts for advisory and assistance 
services or for research and development, the contracting officer has 
the authority below the simplified acquisition threshold to approve sole 
source contracts. The contracting officer is responsible for assuring 
that proposed acquisitions below the simplified acquisition threshold 
are in compliance with FAR and DOLAR requirements regarding competition.



2906.303  Justifications.

    The authority of the agency head to determine that only specified 
make and models of technical equipment will satisfy the agency's need 
under FAR 6.302-1 is delegated to the HCA.



                   Subpart 2906.5_Competition Advocate



2906.501  Requirement.

    The Assistant Secretary for Administration and Management must 
appoint a Competition Advocate for the Department of Labor. The 
appointment will be predicated on an understanding of the competition 
requirements in the FAR, and particularly small business programs.



PART 2907_ACQUISITION PLANNING--Table of Contents




                    Subpart 2907.1_Acquisition Plans

Sec.
2907.105 Contents of written acquisition plans.
2907.107 Additional requirements for acquisitions involving bundling.

         Subpart 2907.3_Contractor Versus Government Performance

02907.300 Availability of inventory.

    Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).

    Source: 69 FR 22991, Apr. 27, 2004, unless otherwise noted.

[[Page 19]]



                    Subpart 2907.1_Acquisition Plans



2907.105  Contents of written acquisition plans.

    The Department of Labor has implemented its acquisition planning 
system in compliance with FAR 7.1 and internal procedures provided in 
DLMS 2 section 834. The annual forecast is available for review from: 
http://www.apps.dol.gov/contract--grant/index.htm.



2907.107  Additional requirements for acquisitions involving bundling.

    The FAR requirements for justification, review, and approval of 
bundling of contract requirements also apply to an order from a Federal 
Supply Schedule contract, Governmentwide acquisition contracts, or other 
indefinite-delivery contracts if the requirements consolidated under the 
order meet the definition of ``bundling'' at FAR 2.101.



         Subpart 2907.3_Contractor Versus Government Performance



2907.300  Availability of inventory.

    The Department of Labor's FAIR Act inventory of commercial 
activities performed by federal employees and inherently governmental 
functions may be accessed on the Internet at: www.dol.gov under ``Doing 
Business with DOL''.



PART 2908_REQUIRED SOURCES OF SUPPLIES AND SERVICES--Table of Contents




                 Subpart 2908.4_Federal Supply Schedules

Sec.
2908.404 Using schedules.

    Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).



                 Subpart 2908.4_Federal Supply Schedules



2908.404  Using schedules.

    Small business considerations, procedures regarding both prime and 
subcontracting, and clearances specified in DOLAR 2919 apply to GSA 
Federal Supply Schedule Orders above the simplified acquisition 
threshold. Procedures to be followed may be modified by the Office of 
Small Business Program as appropriate in order to comply with GSA 
Federal Supply Schedule procedures (e.g., first tier contracts may be 
required to report their commercial subcontracting goals to the DOL 
Office of Small Business Programs).

[69 FR 22991, Apr. 27, 2004]



PART 2909_CONTRACTOR QUALIFICATIONS--Table of Contents




           Subpart 2909.1_Responsible Prospective Contractors

Sec.
2909.105 Procedures.

         Subpart 2909.4_Debarment, Suspension, And Ineligibility

2909.402 Policy.
2909.405 Effect of listing.
2909.405-1 Continuation of current contracts.
2909.406 Debarment.
2909.406-1 General.
2909.406-3 Procedures.
2906.407 Suspension.
2909.407-1 General.

   Subpart 2909.5_Organizational and Consultant Conflicts of Interest

2909.503 Waiver.
2909.506 Procedures.

    Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).

    Source: 69 FR 22991, Apr. 27, 2004, unless otherwise noted.



           Subpart 2909.1_Responsible Prospective Contractors



2909.105  Procedures.

    Before awarding a contract, the contracting officer must make a 
written determination of the otherwise successful bidder's/offeror's 
responsibility in accordance with FAR 9.105. In addition to past 
performance information, the contracting officer must insure that the 
proposed contractor, and any subcontractor representing more than 
$25,000 in goods or services, does not appear in the ``List of Parties 
Excluded from Federal Procurement'' (available on the Internet at 
www.epls.gov). In addition, contracting officers should base

[[Page 20]]

their determination of contractor responsibility on a review of the 
company's ``Summary or Financial Report'' from Dun & Bradstreet 
(available on the Internet for a fee at http://www.dnb.com/).



         Subpart 2909.4_Debarment, Suspension, and Ineligibility



2909.402  Policy.

    (a) This subpart prescribes DOL policies and procedures governing 
the debarment and suspension of contractors, the listing of debarred and 
suspended contractors, contractors declared ineligible (see FAR 9.403) 
and distribution of the list. This subpart does not apply to Department 
of Labor debarments or suspensions issued for Davis-Bacon Act and Davis-
Bacon Related Act violations, Service Contract Act violations, 
Affirmative Action/Equal Employment Opportunity violations, or 
violations under other statutes administered by the Department of Labor.
    (b) Contracting activity officials shall have the following 
responsibilities. (1) Heads of contracting activity (HCA) shall:
    (i) Provide an effective system to ensure that contracting staffs 
consult the ``List of Parties Excluded from Federal Procurement and 
Nonprocurement Programs'' at http://epls.arnet.gov/ before soliciting 
offers, awarding or extending contracts, or consenting to subcontract.
    (ii) Consider debarment or suspension of a contractor when cause, as 
defined under FAR 9.406-2 for debarment and FAR 9.407-2 for suspension, 
is shown. Contracting officers should consult with their appropriate 
legal counsel before making a decision to initiate debarment or 
suspension proceedings. If a determination is made that available facts 
do not justify beginning debarment or suspension proceedings, the file 
should be documented accordingly. This determination is subject to 
reconsideration if warranted by new information.
    (iii) When the decision is made to initiate debarment and/or 
suspension of a contractor, the Senior Procurement Executive must 
prepare a notice in accordance with FAR 9.406-3(c) or FAR 9.407-3(c). 
The draft notice, along with the administrative file containing all 
relevant facts and analysis, must be forwarded to the Senior Procurement 
Executive, as the debarring and suspending official, following review by 
the activity's legal counsel.
    (2) The Senior Procurement Executive shall:
    (i) Review the notice and administrative file for sufficiency and 
provide for review by other DOL officials as considered appropriate;
    (ii) In accordance with FAR 9.406-3(c) or FAR 9.407-3(c), if it is 
determined that action is warranted, give the contractor prompt notice 
of the proposed debarment or suspension;
    (iii) Direct additional fact-finding as necessary when material 
facts are in dispute;
    (iv) Notify the contractor and any affiliates involved of the final 
decision to debar or suspend, including a decision not to debar or 
suspend, in accordance with FAR 9.406-3(c) and FAR 9.407-3(c);
    (v) Be responsible for accomplishing the actions required in FAR 
9.404(c) within five working days after debarring or suspending a 
contractor or modifying or rescinding such an action;
    (vi) Maintain Department-wide records of debarred or suspended 
contractors in accordance with FAR 9.404.



2909.405  Effect of listing.

    (a) Contractors debarred, suspended, or proposed for debarment are 
excluded from receiving contracts, and agencies must not solicit offers 
from, award contracts to, or consent to subcontract with these 
organizations, unless the HCA determines in writing that there is a 
compelling reason for such action and the Assistant Secretary for 
Administration and Management approves such determinations.
    (b) Bids received from any listed contractor in response to an 
invitation for bids must be entered on the abstract of bids, and 
rejected unless the HCA determines in writing that there is a compelling 
reason to consider the bid and the Assistant Secretary for 
Administration and Management approves such action.
    (c) Proposals, quotations, or offers received from any listed 
contractor shall not be evaluated for award or included in the 
competitive range, nor

[[Page 21]]

shall discussions be conducted with a listed offeror during a period of 
ineligibility, unless the HCA determines in writing that there is a 
compelling reason to do so and the Assistant Secretary for 
Administration and Management approves such action.



2909.405-1  Continuation of current contracts.

    (a) At the time an option is being exercised, contracting officers 
must review the List of Parties Excluded from Federal Procurement and 
Nonprocurement Programs. If a contractor or significant subcontractor is 
identified in the listing, the contracting officer must make a written 
determination either to proceed or to terminate the contract, and must 
explain the rationale for the decision. In accordance with FAR 9.405-1, 
contracting officers may continue contracts or subcontracts in existence 
at the time a contractor is suspended or debarred, unless it is 
determined that termination of the contract is in the best interest of 
the Government. The contracting officer must make such determination in 
writing, after consulting with the contracting officer's technical 
representative and legal counsel. The determination must be approved by 
the HCA.
    (b) Contracting activities must not renew or otherwise extend the 
duration of current contracts, or consent to subcontracts, with 
contractors debarred, suspended, or proposed for debarment, unless the 
HCA states, in writing, the compelling reasons for renewal or extension 
and the Assistant Secretary for Administration and Management approves 
such action.



2909.406  Debarment.



2909.406-1  General.

    (a) The Senior Procurement Executive is the debarring official for 
DOL and is authorized to debar a contractor for any of the causes in FAR 
9.406-2, using the procedures in 2909.406-3.
    (b) The Senior Procurement Executive is authorized to make an 
exception regarding debarment by another agency debarring official in 
accordance with the conditions in FAR 9.406-1(c).



2909.406-3  Procedures.

    (a) Investigation and referral. Whenever a DOL employee knows a 
cause for debarment, as listed in FAR 9.406-2, the appropriate HCA 
affected must be notified. The contracting officer must consult with the 
Office of the Solicitor and the Office of the Inspector General, as 
appropriate, and submit a formal recommendation documenting the cause 
for debarment to the Senior Procurement Executive.
    (b) Notice of proposal to debar. Based upon review of the 
recommendation to debar and consultation with the Office of the 
Solicitor and Office of the Inspector General, as appropriate, the 
Senior Procurement Executive must initiate proposed debarment by taking 
the actions listed in FAR 9.406-3(c) and advising the contractor of 
DOL's rules under 2909.4.
    (c) Fact-finding proceedings. For actions listed under FAR 9.406-
3(b)(2), the Senior Procurement Executive must afford the contractor the 
opportunity to appear at an informal fact-finding proceeding as required 
by FAR 9.406-3(b)(2)(i). The proceeding must be conducted by the Office 
of Administrative Law Judges and must be held at a date and location 
reasonably convenient to the parties concerned. Subject to the 
provisions of 29 CFR part 18, entitled ``Rules Of Practice And Procedure 
For Administrative Hearings Before The Office Of Administrative Law 
Judges'', the contractor and any specifically named affiliates, may be 
represented by counsel or any duly authorized representative. Either 
party may call witnesses. The proceedings must be conducted 
expeditiously and in such a manner that each party will have a full 
opportunity to present all information considered pertinent to the 
proposed debarment. A transcript of the proceedings must be made 
available to the contractor under the conditions in FAR 9.406-
3(b)(2)(ii).
    (d) Decision and notice. The Senior Procurement Executive shall make 
a decision on imposing debarment in accordance with the procedures in 
FAR 9.406-3(d), findings of fact of the Administrative Law Judge, and 
the conditions in FAR 9.406-4 and 9.406-5. Notice of the decision must 
be provided to the contractor and any affiliates involved

[[Page 22]]

in accordance with the procedures in FAR 9.406-3(e).



2909.407  Suspension.

    (a) The Senior Procurement Executive is the suspending official for 
DOL and is authorized to suspend a contractor for any of the causes in 
FAR 9.407-2, using the procedures in 2909.406-3.
    (b) The Senior Procurement Executive is authorized to make an 
exception, regarding suspension by another agency suspending official 
under the conditions in FAR 9.407-1(d).



2909.407-1  General.

    (a) Investigation and referral. Whenever a DOL employee knows of a 
cause for suspension, as listed in FAR 9.407-2, the appropriate HCA 
affected must be notified. The HCA must consult with the Office of the 
Solicitor and the Office of the Inspector General, as appropriate, and 
submit a formal recommendation documenting the cause for suspension, to 
the Senior Procurement Executive.
    (b) Notice of suspension. Based upon review of the recommendation to 
suspend and consultation with the Office of the Solicitor and the Office 
of the Inspector General, as required, the Senior Procurement Executive 
will initiate suspension by taking the actions listed in FAR 9.407-3(c) 
and advising the contractor of DOL's rules under this subpart.
    (c) Fact-finding proceedings. For actions listed under FAR 9.407-
3(b)(2), the Senior Procurement Executive must afford the contractor the 
opportunity to appear at informal proceedings, as required by FAR 9.407-
3(b)(2)(i). Either party may call witnesses. The proceedings must be 
conducted expeditiously and in such a manner that each party will have a 
full opportunity to present all information considered pertinent to the 
proposed suspension.
    (d) Suspension decisions. The Senior Procurement Executive must make 
a final decision on suspension as prescribed in FAR 9.407-3(d). Notice 
of the decision must be provided to the contractor and any affiliates 
involved, in accordance with the provisions in FAR 9.407-3(d)(4).



   Subpart 2909.5_Organizational and Consultant Conflicts of Interest



2909.503  Waiver.

    (a) The Senior Procurement Executive is delegated authority by the 
Assistant Secretary for Administration and Management to waive any 
general rule or procedure in FAR 9.5 when its application in a 
particular situation would not be in the Government's best interest.
    (b) Requests for waivers must be made by the HCA to the PE. Each 
request must include:
    (1) An analysis of the facts involving the potential or actual 
conflict including benefits and detriments to the Government and 
prospective contractors;
    (2) A discussion of the factors which preclude avoiding, 
neutralizing, or mitigating the conflict; and
    (3) Identification of the provision(s) in FAR 9.5 to be waived.
    (c) In making determinations under this subpart the Senior 
Procurement Executive must request the opinion of the Office of the 
Solicitor, Division of Legislation and Legal Counsel.



2909.506  Procedures.

    (a) If a prospective contractor disagrees with the decision of a 
contracting officer regarding an organizational conflict of interest and 
requests higher level review as referred to in FAR 9.506, the matter 
must be referred to the Office of the Solicitor, Associate Solicitor for 
Legislation and Legal Counsel, and the Director, Division of Acquisition 
Management Services.
    (b) Referrals must be made by the HCA concerned and include the 
contracting officer's decision and the position of the prospective 
contractor.



PART 2910_MARKET RESEARCH--Table of Contents




Sec.
2910.002 Procedures.

    Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).



2910.002  Procedures.

    (a) In accordance with FAR 6.302-1(c), purchase descriptions must 
not specify a product, or specific feature of a product, peculiar to a 
manufacturer unless

[[Page 23]]

they are justified to the contracting officer in writing by the office 
initiating the purchase request. The justification must state that the 
product, or specific product feature, is essential to the Government's 
requirements and other similar products or features will not meet these 
requirements. This determination must be signed by a representative of 
the office originating the request and must accompany the purchase 
requisition submitted to the appropriate contracting office. If such a 
justification is not made, the contracting officer may assume that 
another make and model or a generic product could equally meet the DOL 
requirement.
    (b) In accordance with FAR 10.002(b), the requisitioning office must 
submit to the contracting officer information demonstrating that a 
variety of products from various commercial sources have been 
considered. This requirement is not necessary for required sources (See 
FAR 8.001). Orders to be placed against non-mandatory sources, such as 
the Federal Supply Schedules, or other Governmentwide Acquisition 
Contracts, should include product information concerning multiple 
sources based on research from www.contractdirectory.gov site or other 
sources. When documented in this manner, the contracting officer may 
rely on this information in developing a procurement strategy, or for 
documenting the comparison of catalogs or pricelists.

[69 FR 22991, Apr. 27, 2004]



PART 2911_DESCRIBING AGENCY NEEDS--Table of Contents




     Subpart 2911.1_Selecting And Developing Requirements Documents

Sec.
2911.103 Market acceptance.

                    Subpart 2911.5_Liquidated Damages

2911.501 Policy.

    Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).

    Source: 69 FR 22991, Apr. 27, 2004, unless otherwise noted.



     Subpart 2911.1_Selecting And Developing Requirements Documents



2911.103  Market acceptance.

    The authority of the Head of an Agency under FAR 11.103(a), to 
require offerors to demonstrate that the items offered have either 
achieved commercial market acceptance or been satisfactorily supplied to 
an agency under current or recent contracts for the same or similar 
requirements, and otherwise meet the item description, specifications, 
or other criteria prescribed in the public notice and solicitation, is 
delegated to the HCA.



                    Subpart 2911.5_Liquidated Damages



2911.501  Policy.

    In accordance with FAR 11.501(d), the authority of the Head of 
Agency to recommend to the Department of Treasury, Commissioner, 
Financial Management Services, that the amount of a contractor's 
liquidated damages be waived or reduced in whole or in part, is 
delegated to the HCA.



PART 2912_ACQUISITION OF COMMERCIAL ITEMS--Table of Contents




  Subpart 2912.3_Solicitation Provisions and Contract Clauses for the 
                     Acquisition of Commercial Items

Sec.
2912.302 Tailoring of provisions and clauses for the acquisition of 
          commercial items.

    Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).

    Source: 69 FR 22991, Apr. 27, 2004, unless otherwise noted.



  Subpart 2912.3_Solicitation Provisions and Contract Clauses for the 
                     Acquisition of Commercial Items



2912.302  Tailoring of provisions and clauses for the acquisition of 
commercial items.

    In accordance with FAR 12.302(c), a request for waiver to tailor 
terms inconsistent with customary commercial

[[Page 24]]

practice must be documented in a written justification by the 
contracting officer, and may be approved by the HCA on an individual or 
class basis.



PART 2913_SIMPLIFIED ACQUISITION PROCEDURES--Table of Contents




                        Subpart 2913.1_Procedures

Sec.
2913.106-3 Soliciting competition, evaluation of quotations or offers, 
          award and documentation.

     Subpart 2913.2_Actions At Or Below The Micro-Purchase Threshold

2913.201 General.

              Subpart 2913.3_Simplified Acquisition Methods

2913.301 Governmentwide commercial purchase card.
2913.307 Forms.

    Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).

    Source: 69 FR 22991, Apr. 27, 2004, unless otherwise noted.



                        Subpart 2913.1_Procedures



2913.106-3  Soliciting competition, evaluation of quotations or offers, 
award and documentation.

    In accordance with FAR 13.106-3(b), simplified acquisition files 
must contain documentation of the factors considered in making an award 
in excess of the micro-purchase threshold. When other than the lowest 
responsive quotation from a responsible supplier is used as the basis 
for a purchase, the contracting officer must identify the basis (i.e., 
best value) of the award and include in the purchase file documentation 
of the reasons for rejecting any lower quotation and the name of the 
individual responsible for making the determination to award to other 
than the lowest priced quotation. The contracting officer has broad 
discretion in determining the award of a purchase order, which may be 
based on the factors listed in FAR 13.106-3. This requirement does not 
necessitate a separate determination if the procurement file contains 
preprinted standardized classifications for award.



     Subpart 2913.2_Actions at or Below the Micro-Purchase Threshold



2913.201  General.

    The Government commercial purchase card must be used in preference 
to other methods of procurement for purchases up to the micro-purchase 
threshold. Other small purchase methods (blanket purchase agreements, 
third party drafts, and purchase orders) may be used in lieu of the 
Government purchase card when it is more cost-effective or practicable.



              Subpart 2913.3_Simplified Acquisition Methods



2913.301  Governmentwide commercial purchase card.

    (a) The Government purchase card has far fewer requirements for 
documentation than other methods of purchasing. However, the same legal 
restrictions apply to credit card purchases that apply to other 
purchases using appropriated funds. If a purchase cardholder has 
questions about the lawfulness of a particular purchase, he or she must 
initially consult his or her appropriate office purchase card 
administrator, who will consult the Office of the Solicitor as 
necessary.
    (b) GAO decisions surrounding the concept of the ``availability of 
appropriations'' are often stated in terms of whether appropriated funds 
are or are not ``legally available'' for a given expenditure. 
Restrictions on the purposes for which appropriated funds may be used 
come from a variety of sources, including the DOL Appropriations Acts, 
and decisions of the Comptroller General and his predecessor, the 
Comptroller of the Treasury.
    (c) HCAs, administrative officers, and contracting officers are 
encouraged to review the GAO publication entitled Principles of Federal 
Appropriations Law. This document must be consulted when developing 
Office/Agency Purchase/Credit Card Program procedures. A number of the 
more common restrictions which ``accounting officers of the Government'' 
have had frequent occasion to consider and apply include, for example:

[[Page 25]]

    (1) Payment of attorney's fees;
    (2) Purchase of food, entertainment or recreation;
    (3) Payment of personal membership fees; and
    (4) Payment of personal expense items such as gifts for employees, 
and entry fees for contests.



2913.307  Forms.

    (a) In accordance with FAR 13.307, contracting officers are 
encouraged to use the Standard Form (SF) SF-1449, when executing 
commercial acquisitions. Agencies may use forms other than the SF-1449 
and may print on those forms the clauses considered to be suitable for 
these purchases. In these instances, alternate forms should conform with 
the Standard Form to the maximum extent practicable.
    (b) The SF-30 is to be used to modify a purchase order.

[[Page 26]]



           SUBCHAPTER C_CONTRACTING METHODS AND CONTRACT TYPES





PART 2914_SEALED BIDDING--Table of Contents




          Subpart 2914.4_Opening of Bids and Award of Contract

Sec.
2914.404-1 Cancellation of invitations after opening.
2914.407-3 Other mistakes disclosed before award.
2914.408 Award.
2914.408-1 General.

    Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).

    Source: 69 FR 22991, Apr. 27, 2004, unless otherwise noted.



          Subpart 2914.4_Opening of Bids and Award of Contract



2914.404-1  Cancellation of invitations after opening.

    The authority of the agency head in FAR 14.404-1(c) and (f) to make 
a written determination to cancel an invitation for bids and reject all 
bids after opening and to authorize completion of the acquisition 
through negotiation is delegated to the HCA.



2914.407-3  Other mistakes disclosed before award.

    (a) The authority to make determinations, as conferred by FAR 
14.407-3(e) is delegated to the HCA, without power of redelegation, but 
only after consultation with the Office of the Solicitor. All such 
determinations shall be documented in the contract file.
    (b) The following procedures must be followed when submitting 
doubtful cases of mistakes in bids to the Comptroller General for an 
advance decision, as provided by FAR 14.407-3(i).
    (1) Requests must be made by the HCA after consultation with the 
Office of the Solicitor.
    (2) Requests must be in writing, dated, signed by the requestor, 
addressed to the Comptroller General of the United States, General 
Accounting Office, Washington, DC 20548, and contain the following:
    (i) The name and address of the party requesting the decision; and
    (ii) A statement of the question to be decided, a presentation of 
all relevant facts, a statement of the requesting party's position with 
respect to the question, and copies of all pertinent records and 
supporting documentation.



2914.408  Award.



2914.408-1  General.

    (a) When only one bid is received in response to an invitation for 
bids, such bid may be considered and accepted if the contracting officer 
makes a written determination that:
    (1) The specifications used in the invitation were not unduly 
restrictive;
    (2) Adequate competition was solicited and it could have been 
reasonably assumed that more than one bid would have been submitted;
    (3) The price is reasonable; and
    (4) The bid is otherwise in accordance with the invitation for bids.
    (b) Such a determination must be placed in the contract file.



PART 2915_CONTRACTING BY NEGOTIATION--Table of Contents




                     Subpart 2915.4_Contract Pricing

Sec.
2915.405-70 Determining fair and reasonable price.

 Subpart 2915.5_Preaward, Award, and Postaward Notifications, Protests, 
                              and Mistakes

2915.508 Discovery of mistakes.

                  Subpart 2915.6_Unsolicited Proposals

2915.604 Agency points of contact.
2915.605 Content of unsolicited proposals.
2915.606 Agency procedures.

    Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).

    Source: 69 FR 22991, Apr. 27, 2004, unless otherwise noted.

[[Page 27]]



                     Subpart 2915.4_Contract Pricing



2915.405-70  Determining fair and reasonable price.

    (a) Where the contractor insists on a price or demands a profit or 
fee that the contracting officer considers unreasonable and the 
contracting officer has taken all authorized actions to resolve the 
matter (see FAR 15.402), the contract action must be referred to the HCA 
for final resolution.
    (b) Resolution under paragraph (a) of this section must be 
documented and signed by the HCA and included in the contract file.



 Subpart 2915.5_Preaward, Award, and Postaward Notifications, Protests, 
                              and Mistakes



2915.508  Discovery of mistakes.

    (a) The HCA is authorized to make the administrative determinations 
in FAR 15.508 after consultation with the Office of the Solicitor as 
required by FAR 14.407-4. This authority may not be redelegated.
    (b) The contracting officer must process a mistake and prepare a 
case file in accordance with the requirements of FAR 14.407-4(e)(2). The 
file must be submitted to the HCA for final determination.



                  Subpart 2915.6_Unsolicited Proposals



2915.604  Agency points of contact.

    (a) HCAs shall be the preliminary contacts for unsolicited 
proposals. This responsibility may be delegated.
    (b) HCAs must establish within their agencies procedures for 
handling unsolicited proposals to ensure that unsolicited proposals are 
controlled, evaluated, safeguarded and disposed of in accordance with 
FAR 15.6.
    (c) The HCA must not forward for consideration an unsolicited 
proposal, if the proposal resembles an upcoming solicitation or a 
procurement identified in the current annual acquisition plan.



2915.605  Content of unsolicited proposals.

    In addition to the contents required by FAR 15.605, unsolicited 
proposals for research should contain a commitment by the offeror to 
include cost-sharing or should represent a significant cost savings to 
the Department of Labor.



2915.606  Agency procedures.

    When an unsolicited proposal is received by an official of the 
Department of Labor, the recipient of the proposal must forward it to 
the HCA. The HCA must address the requirements of FAR 15.604. The HCA 
must determine if there is an office(s) within the Department of Labor 
whose mission could be impacted by the proposal. If there is, the HCA 
must designate a recipient within that office as an ``assignee'', and 
take the following action:
    (a) Within seven (7) working days of receipt, the HCA must forward 
the proposal to the assignee along with instructions concerning the 
security, review and disposition of the document.
    (1) Inform the offeror of this transfer in writing (preferably by 
facsimile or other electronic means).
    (2) Within one (1) month of receipt of the unsolicited proposal by 
the assignee, the office receiving the proposal must determine the merit 
of the unsolicited proposal.
    (i) If the office finds insufficient merit to consider the 
unsolicited proposal further, then a letter will be sent to inform the 
offeror that their proposal will not be considered further, and is not 
being retained.
    (ii) If, after a comprehensive evaluation as defined by FAR 15.606-
2, the office finds merit in the proposal, it must consult with a 
Department of Labor contracting officer for direction in complying with 
FAR 15.607. If not excluded by a condition of FAR 15.607(a), a 
requisition may be prepared in accordance with FAR 15.607(b). If the 
requirement exceeds the simplified acquisition threshold inclusive of 
options then a request must be prepared for the Procurement Review Board 
in accordance with Department of Labor procedures stated in Department 
of Labor Manual Series 2-830 (available by mail from the Division of 
Acquisition Management Services).

[[Page 28]]

    (b) If within one (1) month of receipt (by the HCA) no assignee can 
be identified, the HCA must notify the offeror that the proposal is not 
being considered further.



PART 2916_CONTRACT TYPES--Table of Contents




Sec.
2916.000 Scope of part.

              Subpart 2916.5_Indefinite-Delivery Contracts

2916.505 Ordering.

   Subpart 2916.6_Time-and-Materials, Labor-Hour, and Letter Contracts

2916.603-2 Application.

    Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).

    Source: 69 FR 22991, Apr. 27, 2004, unless otherwise noted.



2916.000  Scope of part.

    This part describes types of contracts that may be used in 
acquisitions. It further prescribes policies and procedures for 
implementing contracts.



              Subpart 2916.5_Indefinite-Delivery Contracts



2916.505  Ordering.

    In accordance with FAR 16.505(b)(5), the Department of Labor Task 
Order and Delivery Order Ombudsman is the DOL Competition Advocate (see 
DOLAR part 2902).



   Subpart 2916.6_Time-and-Materials, Labor-Hour, and Letter Contracts

    Task orders against DOL contracts and orders against multi-agency or 
Governmentwide contracts for services above the micropurchase threshold 
must comply with the provisions of FAR 16.505.



2916.603-2  Application.

    The HCA is authorized to extend the period for definitization of a 
letter contract required by FAR 16.603-2(c) in extreme cases where it is 
determined in writing that such action is in the best interest of the 
Government.



PART 2917_SPECIAL CONTRACTING METHODS--Table of Contents




Sec.
2917.000 Scope of part.

                         Subpart 2917.2-Options

2917.202 Use of options.
2917.207 Exercising options.

      Subpart 2917.5_Interagency Acquisitions Under The Economy Act

2917.500 Scope of subpart.
2917.501 Definitions.
2917.502 General.
2917.503 Determinations and findings requirements.
2917.504 Ordering procedures.
2917.504-70 Signature authority and internal procedures.

    Authority: 5 U.S.C. 301; 31 U.S.C. 1535; 40 U.S.C. 486(c).

    Source: 69 FR 22991, Apr. 27, 2004, unless otherwise noted.



2917.000  Scope of part.

    This part implements polices and procedures stated in FAR part 17.



                         Subpart 2917.2_Options



2917.202  Use of options.

    The HCA may, in unusual circumstances, approve option quantities in 
excess of the 50 percent limit prescribed in FAR 17.203(g)(2). The 
documentation required by FAR 17.205(a) must include a written 
justification to fully support the need for such action.



2917.207  Exercising options.

    The contracting officer must use a standardized determination and 
finding before exercising an option in accordance with FAR 17.207(f).



      Subpart 2917.5_Interagency Acquisitions Under The Economy Act



2917.500  Scope of subpart.

    This subpart establishes DOL policy and procedures to assure the 
appropriate and consistent use of interagency acquisitions under the 
Economy Act (31 U.S.C. 1535) as prescribed by FAR 17.5.

[[Page 29]]



2917.501  Definitions.

    Interagency Acquisition means a procedure by which a DOL agency 
obtains needed supplies or services from, or through, another DOL agency 
or Federal agency, and appropriated funds are obligated.
    Interagency Agreement means the legal instrument used for an 
interagency acquisition to exchange funds or property between two DOL 
organizations or between a DOL agency and another Federal agency. This 
instrument is used when the DOL organization meets the definition of 
either the Requesting Agency or the Servicing Agency. ``Interagency 
Agreement'' and ``Interagency Acquisition'' does not include:
    (1) Agreements involving supplies and services acquired from or 
through mandatory sources, as described in FAR part 8;
    (2) Contracts with the Small Business Administration based upon 
Section 8(a) of the Small Business Act or a HUBZone small business under 
the Historically Underutilized Business Zone (HUBZone) Act of 1997;
    (3) Cooperative agreements and grants; or
    (4) Any agreement or acquisition where a statute authorizes 
exception.
    Military Interdepartmental Procurement Request (MIPR) means a type 
of interagency agreement used to place orders for supplies and non-
personal services with a military department.
    Requesting Agency means the Federal agency that needs the supplies 
or services, and is obligating the funds to provide for the costs of 
performance.
    Servicing Agency means the Federal agency which is providing the 
supplies or performing the services, directly or indirectly, and will be 
receiving the funds to provide for the costs of performance.



2917.502  General.

    (a) Policy. It is the policy of DOL to require that interagency 
agreements are written to assure that the obligation of fiscal year 
funds is valid, that statutory authority exists to obtain or perform the 
stated requirements, that the stated requirements are consistent with 
DOL's mission responsibilities, and that each agreement complies with 
applicable laws and regulations.
    (b) Applicability. The provisions of this subpart apply to 
interagency acquisitions and agreements under the Economy Act.
    (c) Appropriations principles. The appropriate use of interagency 
acquisitions embodies several principles of Federal appropriations law.
    (1) In order to record a valid obligation of appropriations, 31 
U.S.C. 1501 imposes the requirements that interagency agreements be:
    (i) A binding written agreement for specific goods or services to 
meet an existing bona fide need;
    (ii) For a purpose authorized by law; and
    (iii) Executed and obligated by the receiving agency before the 
expiration of available funds.
    (2) The Economy Act authorizes interagency acquisitions and provides 
for payment in advance, as well as reimbursement to the appropriation 
account to which the performance costs have been charged. The Economy 
Act further authorizes the servicing agency, as an alternative to 
fulfilling the requirement through internal resources, to obtain the 
needed supplies or services by contract.
    (3) An agreement entered into under the Economy Act is recorded as 
an obligation by the requesting agency the same as a contract. However, 
under the Economy Act, the obligated appropriations must be deobligated 
upon the date of ``expiration'' of the appropriation account to the 
extent that the servicing agency has not incurred obligations through 
charged costs or under a contract.
    (4) Within DOL, the DOL agencies have a number of statutory 
authorities available for entering into interagency agreements. Each DOL 
agency, in consultation with the Office of the Solicitor, must be 
responsible for determining those authorities, as well as constraints 
applicable to the use of advance payments and contractors, and set-up 
procedures.



2917.503  Determinations and findings requirements.

    Applicability. Before the execution of an interagency agreement 
under the

[[Page 30]]

Economy Act, the contracting officer, or other authorized official, must 
sign the determination required in FAR 17.503 and 31 U.S.C. 1535.



2917.504  Ordering procedures.

    (a) Requests for the processing of interagency agreements must be 
submitted to the procurement office serving the requisitioning office.
    (b) The procurement request must state whether the work is to be 
performed by a DOL organization, a Federal agency other than DOL, or 
through one of these entities by a contractor.
    (c) Where the Economy Act is to be used as the authority for an 
interagency acquisition, the requisitioning office must include the 
facts which support the conclusion that it is more economical to obtain 
the required supplies or services through the proposed interagency 
agreement, rather than by direct contract with a commercial concern. 
Current market prices or recent procurement prices may be used in this 
process.
    (d) Orders placed under interagency agreements may take any form 
that is legally sufficient and reflects the agreement of the parties.
    (e) The contracting officer, or authorized official, must assure 
compliance with the ordering procedures and payment provisions 
prescribed in FAR 17.504 and FAR 17.505, and require inclusion of the 
following provisions in all interagency agreements and/or orders placed 
against them:
    (1) Legislative authority;
    (2) Period of performance;
    (3) Dollar amount of agreement;
    (4) Billing provisions, including the name and address of the 
following offices:
    (i) Designated office to receive the required deliverables; and
    (ii) Designated office to receive billings and process payments;
    (5) Modification and termination provisions; and
    (6) Other provisions, as appropriate.
    (f) The contracting officer must assure that each interagency 
agreement or order placed against it includes a reference number 
assigned by each of the parties. Such numbers must be assigned in 
accordance with the existing procedures established by the respective 
organizations.
    (g) Modifications to existing interagency agreements may be 
accomplished through the use of an SF 30, Amendment of Solicitation/
Modification of Contract, or through any other format acceptable to the 
parties.



2917.504-70  Signature authority and internal procedures.

    (a) A DOL contracting officer, HCA, Agency Head, or another official 
designated by the Assistant Secretary for Administration and Management 
in accordance with FAR 17.503(c), must sign interagency agreements and/
or orders placed against them which will result in a procurement action 
by the requesting or servicing agency.
    (b) Internal procedures (DLMS 3-1700) require DOL Agency Heads to 
provide notice to the Director, Executive Secretariat of the signing of 
all new Federal Interagency Agreements and deleting expired agreements.
    (c) Agencies should be aware that, in addition to the requirements 
of this subpart, there are various other internal Departmental 
procedures that apply to various types of agreements. Agencies should 
consult with the Office of the Solicitor and the Office of the Assistant 
Secretary for Administration and Management, as appropriate.

[[Page 31]]



                   SUBCHAPTER D_SOCIOECONOMIC PROGRAMS



                          PART 2918 [RESERVED]



PART 2919_SMALL BUSINESS AND SMALL DISADVANTAGED BUSINESS CONCERNS
--Table of Contents




Sec.
2919.000 Scope of part.

                         Subpart 2919.2_Policies

2919.201 General policy.
2919.202 Specific policies.
2919.202-1 Encouraging small business participation in acquisitions.
2919.202-2 Locating small business sources.

              Subpart 2919.5_Set-Asides for Small Business

2919.502 Setting aside acquisitions.
2919.505 Rejecting Small Business Administration recommendations.

        Subpart 2919.7_The Small Business Subcontracting Program

2919.704 Subcontracting plan requirements.
2919.705-1 General support for the program.
2919.705-5 Awards involving subcontracting plans.
2919.705-6 Post-award responsibilities of the contracting officer.
2919.706 Responsibilities of the cognizant administrative contracting 
          officer.

 Subpart 2919.8_Contracting with the Small Business Administration (The 
                              8(a) Program)

2919.812 Contract administration.

    Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).

    Source: 69 FR 22991, Apr. 27, 2004, unless otherwise noted.



2919.000  Scope of part.

    This part implements FAR part 19 and small business programs at the 
Department of Labor.



                         Subpart 2919.2_Policies



2919.201  General policy.

    (a) It is the policy of the Department of Labor to provide maximum 
practicable opportunities to small businesses in acquisitions.
    (b) Management responsibilities for small and disadvantaged business 
utilization are the responsibility of the Director, Office of Small 
Business Programs. This individual is responsible for performing all 
functions and duties prescribed in FAR 19.2 including appointing, as 
prescribed in FAR 19.201(d)(8), a small business specialist (SBS) for 
each contract office. The Department of Labor Manual Series (DLMS), 
Chapter 2 1000, addresses the implementation of the preference programs 
in procurement including HUBZone, Subcontracting Plans, Standard Form 
294 (Subcontracting Report for Individual Contracts), and the report, 
Standard Form 295 (Summary Subcontracting Report) submission, et al.
    (c) All DOL procurements over the simplified acquisition threshold, 
whether being conducted via open market or by ordering from a pre-
existing contract vehicle such as GSA Schedule, must be reviewed and 
receive a recommendation by the Office of Small Business Programs, the 
Department of Labor's Office of Small Disadvantaged Business 
Utilization, prior to being advertised. The Acquisition Screening and 
Review Form DL-1-2004 shall be used for this purpose and the statement 
of work and market survey documentation shall be submitted to Office of 
Small Business Programs with the request for review.



2919.202  Specific policies.

    Contracting officers, administrative officers and program management 
shall ensure that procurements are structured and conducted to afford 
small businesses the maximum practicable opportunity to participate in 
DOL's prime and subcontracts. Administrative officers will review 
requisitions that will result in an award of $2 million or more using 
available information to certify whether the acquisition would 
constitute a ``bundled contract'' under the definition provided in FAR 
2.101 in accordance with procedures established by the Office of Small 
Business Programs. Each certification will be submitted to the Division 
of Acquisition Management Services, and included with the requisition

[[Page 32]]

to the contracting officer. Reports will be provided to the Office of 
Small Business Programs.



2919.202-1  Encouraging small business participation in acquisitions.

    During the performance of a contract, the contracting officer will 
consider performance against subcontracting plan goals, objectives and 
planned efforts before exercising an optional period of performance. The 
contracting officer will document the evaluation of the contractor's 
actual performance using SF-294 data compared to their approved 
subcontracting plan goals.



2919.202-2  Locating small business sources.

    Any procurement conducted on an unrestricted basis will include 
solicitations to small businesses of each category with legislatively 
established government-wide procurement goals (e.g., small, small 
disadvantaged, women-owned small, HUBZone and service disabled veteran-
owned small businesses) to the extent practicable.



              Subpart 2919.5_Set-Asides for Small Business



2919.502  Setting aside acquisitions.

    Contracting officers will conduct market surveys specifically to 
determine whether procurements should be conducted via 8(a) procedures, 
HUBZone procedures or as small business set-asides. If a reasonable 
expectation exists that at least two responsible small businesses may 
submit offers at fair market prices (three responsible small businesses 
in procurements via GSA Federal Supply Schedule), then the procurement 
will be set aside for small business. Market surveys will be documented 
in all procurement actions not reserved for small businesses.



2919.505  Rejecting Small Business Administration recommendations.

    When the SBA Procurement Center Representative appeals a ``rejection 
of an SBA recommendation'' as referenced in FAR 19.505(b) and (c), the 
appeal must be referred to the Assistant Secretary for Administration 
and Management who is authorized to make a final decision.



        Subpart 2919.7_The Small Business Subcontracting Program



2919.704  Subcontracting plan requirements.

    Contracting Officers will refer subcontracting plans to the Office 
of Small Business Programs for review and recommendation before awarding 
contracts that require subcontracting plans. Contracting officers will 
document the substance of any agreement with the contractor that permits 
performance at less than the stated goals recommended by the Office of 
the Small Business Programs.



2919.705-1  General support for the program.

    Contracting officers will make available a significant number of 
award points for quality of the subcontracting plan. High-rated 
subcontract plans will incorporate the highest yield of subcontracting 
to all categories of small businesses when compared to DOL or separately 
negotiated agency subcontracting goals on a dollar and percentage basis. 
Conversely, prime small businesses will be compared favorably to large 
businesses with subcontract goals, but may also be given the maximum 
score for qualifying under multiple small business categories. 
Contracting officers may also make available a significant number of 
award points for performance against previous subcontracting plan goals 
and efforts to achieve those goals.



2919.705-5  Awards involving subcontracting plans.

    The Office of Small Business Programs will review subcontracting 
plans and SF 295 submissions for performance against business goals 
negotiated between the Department of Labor and the Small Business 
Administration.



2919.705-6  Post-award responsibilities of the contracting officer.

    (a) Even when a subcontracting plan was submitted to and approved by 
the Office of Small Business Programs before award, the contracting 
officer upon award, amendment, or significant

[[Page 33]]

modification of a contract, must forward to the Director, Office of 
Small Business Programs, a copy of the subcontracting plan that was 
incorporated into a contract or contract modification.
    (b) Each contracting activity must maintain a list of active prime 
contracts containing subcontracting plans.



2919.706  Responsibilities of the cognizant administrative contracting 
officer.

    Contracting officers must collect annual and semiannual 
subcontracting reports from contractors with established subcontracting 
plans. Copies of the report, Standard Form 294 (Subcontracting Report 
for Individual Contracts), and the report, Standard Form 295 (Summary 
Subcontracting Report), must be forwarded to the Director, Office of 
Small Business Programs, not later than the 30th day of the month 
following the close of the reporting period. If the contractor has not 
met the goals for the reporting period, the contracting officer will 
provide an acknowledgement to the contractor and request corrective 
action to be taken. If goals are not met in subsequent periods, the 
contracting officer must consider factors that would demonstrate a good 
faith effort, and take appropriate action including assessing liquidated 
damages in accordance with FAR 52.219-16, and/or not exercising 
subsequent option periods.



 Subpart 2919.8_Contracting with the Small Business Administration (The 
                              8(a) Program)



2919.812  Contract administration.

    (a) Contracting officers, or designees, must conduct periodic 
evaluations of the performance of an 8(a) contract at various stages of 
the contract period of performance. Any problems encountered during the 
performance evaluation, which cannot be resolved, must be referred to 
the Office of Small Business Programs for subsequent review and 
discussion with the appropriate SBA official.
    (b) The Office of Small Business Programs and the SBA should be 
notified at least 45 days before initiating final action to terminate an 
8(a) contract.



PARTS 2920_2921 [RESERVED]--Table of Contents






PART 2922_APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS
--Table of Contents




                   Subpart 2922.1_Basic Labor Policies

Sec.
2922.101-3 Reporting labor disputes.
2922.101-4 Removal of items from contractor's facilities affected by 
          work stoppages.
2922.103-4 Approvals.

               Subpart 2922.8_Equal Employment Opportunity

2922.802 General.

    Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).

    Source: 69 FR 22991, Apr. 27, 2004, unless otherwise noted.



                   Subpart 2922.1_Basic Labor Policies



2922.101-3   Reporting labor disputes.

    Potential or actual labor disputes that may interfere with contract 
performance must be reported by the contracting activity to the Office 
of the Solicitor for legal advice or assistance. It may also become 
necessary to seek advice or assistance from the National Office of the 
Federal Mediation and Conciliation Service, 2100 K Street, NW., 
Washington, DC 20006, or other mediation agencies.



2922.101-4  Removal of items from contractor facilities affected by work 
stoppages.

    Before initiating any action under FAR 22.101-4 for removal of items 
from contractors' facilities, the contracting officer must obtain legal 
advice from the Office of the Solicitor.



2922.103-4  Approvals.

    The ``agency approving official'' as identified in FAR 22.103-4(a) 
and (b) is a manager, supervisor, or executive responsible for the 
contracting officer's technical representative (see 2901.603-71).

[[Page 34]]



               Subpart 2922.8_Equal Employment Opportunity



2922.802  General.

    Executive Order 11246, as amended, sets forth the Equal Opportunity 
clause and requires that the Secretary of Labor promote full realization 
of equal opportunity for all persons regardless of race, color, 
religion, sex, or national origin. No DOL contracting officer may 
contract for supplies or services in a manner to avoid applicability of 
the requirements of E.O. 11246.



PART 2923 ENVIRONMENT, ENERGY AND WATER EFFICIENCY, RENEWABLE ENERGY 
TECHNOLOGIES, OCCUPATIONAL SAFETY, AND DRUG-FREE WORKPLACE--Table of Contents




    Subpart 2923.2_Energy And Water Efficiency and Renewable Energy.

Sec.
2923.271 Purchase and use of environmentally sound and energy efficient 
          products and services.

    Authority: 5 U.S.C. 301; 40 U.S.C. 486(c); 42 U.S.C. 8262(g).

    Source: 69 FR 22991, Apr. 27, 2004, unless otherwise noted.



     Subpart 2923.2_Energy And Water Efficiency and Renewable Energy



2923.271  Purchase and use of environmentally sound and energy efficient 
products and services.

    The Department will implement policies and procedures that comply 
with the intent and specific goals mandated by the following statutes 
and executive orders and any other issuances as may be mandated to 
maximize cost efficient energy management:
    (a) The GSA Federal Supply Schedule Products Guide identifies the 
recycled and recycled-content items available in the GSA FSS supply 
system. Copies of the guide may be obtained, without cost, from the GSA, 
Centralized Mailing List Service, P.O. Box 6477, Fort Worth, Texas, 
76115, or by calling (817) 334-5215. See also GSA Advantage! at: 
www.gsaadvantage.gov.
    (b) Executive Order 13123, Greening the Government Through Efficient 
Energy Management, dated June 8, 1999, requires agencies to select for 
procurement those energy consuming goods or products which are the most 
life cycle cost-effective (see FAR 7.101). Green purchasing includes the 
acquisition of recycled content products, environmentally preferable 
products and services, biobased products, energy- and water-efficient 
products, alternate fuel vehicles, and products using renewable energy.
    (1) To the extent practicable, each program official must require 
vendors of goods or products to provide appropriate data that can be 
used to assess the life cycle cost of each good or product, including 
building energy system components, lighting systems, office equipment 
and other energy using equipment.
    (2) In preparing solicitations and evaluating and selecting offers 
for award, contracting personnel must consider the life cycle cost data 
along with other relevant evaluation criteria. If life cycle costing is 
not used, the contract file must be documented to reflect the rationale 
for not obtaining and evaluating the data.
    (c) Executive Order 13101, Greening the Government Through Waste 
Prevention, Recycling, and Federal Acquisition, dated September 14, 
1998, requires agencies to comply with executive branch policies for the 
acquisition and use of environmentally preferable products and services 
and implement cost-effective procurement preference programs favoring 
the purchase of these products and services.
    (d) Executive Order 13148, Greening the Government Through 
Leadership in Environmental Management Systems, dated April 21, 2000. 
This Executive Order assists with developing an environmental management 
system. The following sources are provided as references for the subject 
matter indicated:
    (1) The Office of the Federal Environmental Executive provides 
references to all greening the Government executive orders, web links to 
other relevant cites, and information on biobased and bioenergy 
products. http://www.ofee.gov/gp/gp.htm.

[[Page 35]]

    (2) The Comprehensive Procurement Guidelines program is part of the 
Environmental Protection Agency's continued effort to promote the use of 
materials recovered from solid waste. This listing provides information 
on products made from recycled materials, such as the carpeting and 
insulation used in office buildings, or reams of office paper. 
www.epa.gov/cpg.
    (3) ENERGY STAR is a government-backed program helping businesses 
and individuals protect the environment through superior energy 
efficiency. See also http://www.eere.energy.gov/femp/procurement. 
www.energystar.gov.
    (4) The Alternative Fuels Data Center is a one-stop shop for agency 
alternative fuel and vehicle information needs. http://
www.afdc.nrel.gov.
    (5) The Defense Logistics Agency has created an electronic mall for 
buying environmentally preferable products. www.emall.dla.mil.



PARTS 2924-2927 [RESERVED]--Table of Contents




[[Page 36]]



              SUBCHAPTER E_GENERAL CONTRACTING REQUIREMENTS





PART 2928_BONDS AND INSURANCE--Table of Contents




          Subpart 2928.2_Sureties and Other Security for Bonds

Sec.
2928.204 Alternatives in lieu of corporate or individual sureties.

                        Subpart 2928.3_Insurance

2928.305 Overseas workers' compensation and war hazard insurance.

    Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).

    Source: 69 FR 22991, Apr. 27, 2004, unless otherwise noted.



          Subpart 2928.2_Sureties and Other Security for Bonds



2928.204  Alternatives in lieu of corporate or individual sureties.

    Upon receipt of any of the types of securities listed in FAR 28.20l 
or FAR 28.203, the contracting officer must verify the validity of the 
security and coordinate the retention of the security with the Chief 
Financial Officer. Contracting officers may obtain access to Department 
of Treasury Circular 570 through the Internet at http://
www.fms.treas.gov/c570/index.html.



                        Subpart 2928.3_Insurance



2928.305  Overseas workers' compensation and war hazard insurance.

    The authority of the Agency Head to recommend to the Secretary of 
Labor waiver of the applicability of the Defense Base Act (42 U.S.C. 
1651, et seq.) to any contract, subcontract, work location, or 
classification of employees, is delegated to the HCA.



PART 2929_TAXES--Table of Contents




                         Subpart 2929.1_General

Sec.
2929.101 Resolving tax problems.

                  Subpart 2929.3_State and Local Taxes

2929.303 Application of state and local taxes to Government contractors 
          and subcontractors.

    Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).

    Source: 69 FR 22991, Apr. 27, 2004, unless otherwise noted.



                         Subpart 2929.1_General



2929.101   Resolving tax problems.

    Contract tax problems or questions must be referred by the 
contracting officer to the Office of the Solicitor for resolution.



                  Subpart 2929.3_State and Local Taxes



2929.303  Applications of state and local taxes to Government contractors 
and subcontractors.

    (a) Contractors may only be treated as agents of the Government for 
the purposes set forth in FAR 29.303(a) upon the written review and 
approval of the Assistant Secretary for Administration and Management.
    (b) Requests for approval under paragraph (a) of this section must 
be submitted by the HCA through the Office of the Solicitor, to the 
Division of Acquisition Management Services, for further action.



PART 2930_COST ACCOUNTING STANDARDS ADMINISTRATION--Table of Contents




                 Subpart 2930.2_CAS Program Requirements

Sec.
2930.201-5 Waiver.

    Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).

    Source: 69 FR 22991, Apr. 27, 2004, unless otherwise noted.



                 Subpart 2930.2_CAS Program Requirements



2930.201-5   Waiver.

    (a) The HCA is authorized to waive CAS requirements as provided in 
FAR 30.201-5.

[[Page 37]]

    (b) Requests for waivers under paragraph (a) of this subsection must 
be prepared by the contracting officer as prescribed in FAR 30.201-5(e) 
and submitted to the HCA.



PART 2931_CONTRACT COST PRINCIPLES AND PROCEDURES--Table of Contents




                      Subpart 2931.1_Applicability

Sec.
2931.101 Objectives.

    Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).

    Source: 69 FR 22991, Apr. 27, 2004, unless otherwise noted.



                      Subpart 2931.1_Applicability



2931.101  Objectives.

    Individual and class deviations from cost principles in FAR part 31 
must be processed as prescribed in DOLAR subpart 2901.4.

[69 FR 22991, Apr. 27, 2004]



PART 2932_CONTRACT FINANCING--Table of Contents




        Subpart 2932.4_Advance Payments for Non-Commercial Items

Sec.
2932.402 General.
2932.407 Interest.

                    Subpart 2932.7_Contract Funding.

2932.703 Contract funding requirements.

    Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).

    Source: 69 FR 22991, Apr. 27, 2004, unless otherwise noted.



        Subpart 2932.4_Advance Payments for Non-Commercial Items



2932.402  General.

    The HCA is authorized to approve determinations and findings as well 
as contract terms for advance payments. The contracting officer must 
submit a recommendation for approval or disapproval of the contractor's 
request to the HCA.



2932.407  Interest.

    The HCA may authorize advance payments without interest pursuant to 
FAR 32.407.



                     Subpart 2932.7_Contract Funding



2932.703  Contract funding requirements.

    (a) Except in unusual circumstances, the contracting office may not 
issue solicitations until an approved procurement request (PR), 
containing a certification that funds are available, has been received. 
However, the contracting office may take all necessary actions up to the 
point of contract obligation before receipt of the PR certifying that 
funds are available when:
    (1) The Assistant Secretaries, Inspector General, Bureau Chief, 
Deputy Under Secretary, Solicitor of Labor, Commissioner, or Director of 
the Women's Bureau certifies that such action is necessary to meet 
critical program schedules for their program area;
    (2) The Budget Officer certifies that program authority has been 
issued and funds to cover the acquisition will be available before the 
date set for receipt of proposals;
    (3) The solicitation includes the clause at FAR 52.232-18, 
Availability of Funds.
    (b) The contracting office may not open bids/close solicitations 
until a PR, either planning or final, has been received that contains a 
certification of fund availability. Only the project or program official 
with the authority to commit funds from the agency that initiated the PR 
may make that written certification.
    (c) The project or program office that initiated the PR is 
responsible for obtaining required certifications.



PART 2933_PROTESTS, DISPUTES, AND APPEALS--Table of Contents




                         Subpart 2933.1_Protests

Sec.
2933.102 General.
2933.103 Protests to the agency.
2933.104 Protests to GAO.

                   Subpart 2933.2_Disputes And Appeals

2933.203 Applicability.

[[Page 38]]

2933.209 Suspected fraudulent claims.
2933.211 Contracting officer's decision.
2933.212 Contracting officer's duties upon appeal.
2933.213 Obligation to continue performance.
2933.270 Department of Labor Board of Contract Appeals.

    Authority: 5 U.S.C. 301; 40 U.S.C. 486(c); E.O. 12979, 60 FR 55171, 
3 CFR, 1995 Comp., p. 417.

    Source: 69 FR 22991, Apr. 27, 2004, unless otherwise noted.



                         Subpart 2933.1_Protests



2933.102  General.

    (a) The Division of Acquisition Management Services, 200 
Constitution Ave., NW., S-1513 B, Washington, DC 20210-0001, telephone 
(202) 693-7285, facsimile (202) 693-7290 (or the Office acting in that 
capacity), is responsible for coordinating procurement protests filed 
with the General Accounting Office.
    (b) The authority of the Assistant Secretary for Administration and 
Management under FAR 33.102(b) to determine that a solicitation, 
proposed award, or award does not comply with the requirements of law or 
regulation may be delegated to the HCA.



2933.103  Protests to the agency.

    (a) In accordance with Executive Order 12979, the following 
procedures apply to agency protests:
    (1) The filing time frames in FAR 33.103(e) apply to agency 
protests. An agency protest is filed when the protest complaint is 
received at the location the solicitation designates for serving 
protests; or if none is designated, when filed with a contracting 
officer or HCA.
    (2) An interested party filing an agency protest may request either 
that the contracting officer or the Agency Protest Official decide the 
protest. The ``Agency Protest Official'' is an individual above the 
level of the contracting officer and designated by the Assistant 
Secretary for Administration and Management, such as the Competition 
Advocate. The deciding official, whether a contracting officer or Agency 
Protest Official, must work in consultation with the Office of the 
Solicitor to resolve the protest.
    (3) In addition to the information required by FAR 33.103(d)(2), the 
protest must:
    (i) Indicate that it is a protest to the agency;
    (ii) Be contemporaneously filed with the contracting officer;
    (iii) State whether the protestor chooses to have the contracting 
officer or the Agency Protest Official decide the protest. If the 
protest is silent on this matter, the contracting officer will decide 
the protest.
    (b) ``Interested Party'' means an actual or prospective offeror 
whose direct economic interest would be affected by the award of a 
contract or by the failure to award a contract.
    (c) If the Agency Protest Official is chosen by the protestor to 
decide the protest, this is an alternative to a decision by the 
contracting officer, not an appeal. The Agency Protest Official will not 
consider appeals from a contracting officer's decision on an agency 
protest.
    (d) The deciding official should consider conducting a scheduling 
conference with the protestor within five (5) days after the protest is 
filed. The scheduling conference will establish deadlines for written 
arguments in support of the agency protest and for agency officials to 
present information in response to the protest issues. Alternative 
Dispute Resolution techniques will be considered if determined 
appropriate by the deciding official.
    (e) Oral conferences may take place either by telephone or in 
person. Other parties may attend at the discretion of the deciding 
official.
    (f) Apart from its protest document, the protestor will be given 
only one opportunity to support or explain in writing the substance of 
its protest. Department of Labor procedures do not provide for any 
discovery. The deciding official has discretion to request additional 
information from either the agency or the protestor. However, the 
deciding official will normally decide protests on the basis of 
information provided by the protestor and the agency.
    (g) The preferred practice is to resolve protests through informal 
oral discussion.

[[Page 39]]

    (h) An interested party may represent itself or be represented by 
legal counsel. The Department of Labor will not reimburse the protester 
for any legal fees or costs related to the agency protest.
    (i) If an agency protest is received before contract award, the 
contracting officer may only make award if the HCA makes a determination 
to proceed under FAR 33.103(f)(1). Similarly, if an agency protest is 
filed within ten (10) days after award, or within five (5) days of the 
offer of a debriefing required by FAR 15.505 or 15.506, whichever is 
later, the contracting officer must suspend performance of the contract 
unless the HCA makes a determination to proceed under FAR 33.103(f)(3). 
Any stay of award or suspension of performance remains in effect until 
the protest is decided, dismissed, or withdrawn.
    (j) The deciding official must make a best effort to issue a 
decision on the protest within twenty (20) days after the filing date. 
The decision may be oral or written, dependent upon advice of legal 
counsel.
    (k) The deciding official must send a confirming letter within three 
(3) days after the decision using a means that provides evidence of 
receipt. The confirming letter must include the following information:
    (1) State whether the protest was denied, sustained or dismissed.
    (2) Indicate the date the decision was provided.
    (3) If the deciding official sustains the protest, relief may 
consist of any of the following:
    (i) Recommendation that the contract be terminated for convenience 
or cause, or that the solicitation be canceled.
    (ii) Recompeting the requirement from the beginning of the 
solicitation or from the last round of negotiations.
    (iii) Amending the solicitation.
    (iv) Refraining from exercising contract options.
    (v) Awarding a contract consistent with statute, regulation, and the 
terms of the solicitation.
    (vi) Other action that the deciding official determines is 
appropriate.
    (l) If the deciding official sustains a protest, then within 30 days 
after receiving the official's recommendations for relief, the 
contracting officer must either:
    (1) Fully implement the recommended relief; or
    (2) Notify the deciding official, if the contracting officer was not 
the deciding official, in writing, if any recommendations have not been 
implemented and explain why.
    (m) If the protest is denied, and contract performance has been 
suspended under paragraph (i) of this section, the contracting officer 
will not lift such suspension until five (5) days after the protest 
decision has been issued, to allow the protester to file a protest with 
the General Accounting Office, unless the HCA makes a new finding under 
FAR 33.103(f)(3). The contracting officer shall consider allowing such 
suspension to remain in effect pending the resolution of any GAO 
proceeding.
    (n) Proceedings on an agency protest may be dismissed or stayed if a 
protest on the same or similar basis is filed with a protest forum 
outside of the Department of Labor.



2933.104  Protests to GAO.

    (a) General procedures. The HCA has the responsibility to prepare 
and provide to the General Accounting Office (GAO) the agency report 
with the information required by FAR 33.104(a). The agency report must 
be coordinated with the Office of the Solicitor before the report is 
signed and sent to the GAO.
    (b) Protests before award. The authority of the HCA under FAR 
33.104(b) to authorize a contract award when the agency has received 
notice from the GAO of a protest filed directly with the GAO is 
nondelegable. The HCA has the responsibility to prepare and provide to 
the GAO the written finding with the information required by FAR 
33.104(b)(1). The written finding must be coordinated with Office of the 
Solicitor before the HCA affirms its approval by signing the written 
finding and sending it to the GAO. Copies of the signed written finding 
and the signed written notice to the GAO must be provided to the Senior 
Procurement Executive within two (2) working days after they are sent to 
the GAO.

[[Page 40]]

    (c) Protests after award. The authority of the HCA under FAR 
33.104(c) to authorize contract performance when the agency has received 
notice from the GAO of a protest filed directly with the GAO is 
nondelegable. The HCA has the responsibility to prepare and provide to 
the GAO the written finding with the information required by FAR 
33.104(c)(2). The written finding must be coordinated with the Office of 
the Solicitor before the notice is signed by the HCA and sent to the 
GAO.
    (d) Notice to the GAO. The authority of the HCA under FAR 33.104(g), 
to report to the GAO the failure to fully implement the GAO 
recommendations with respect to a solicitation for a contract or an 
award or a proposed award of a contract within 60 days of receiving the 
GAO recommendations, is nondelegable. The written notice must be 
coordinated with the Office of the Solicitor before the notice is signed 
by the HCA and sent to the GAO. A copy of all notices to the GAO 
submitted in accordance with FAR 33.104(g) must be provided to the 
Senior Procurement Executive within (two) working days after they are 
sent to the GAO.



                   Subpart 2933.2_Disputes and Appeals



2933.203  Applicability.

    The authority of the Agency Head to determine that the application 
of the Contract Disputes Act of 1978 to any contract with a foreign 
government or agency of that government, or an international 
organization or a subsidiary body of that organization, would not be in 
the public interest is delegated to the HCA.



2933.209  Suspected fraudulent claims.

    The contracting officer must refer all matters relating to suspected 
fraudulent claims by a contractor under the conditions in FAR 33.209 to 
the Office of the Inspector General for further action or investigation.



2933.211  Contracting officer's decision.

    The written decision required by FAR 33.211(a)(4) must include, in 
the paragraph listed under FAR 33.211(a)(4)(v), specific reference to 
the Department of Labor Board of Contract Appeals (LBCA), 800 K Street, 
NW, Suite 400 North, Washington, DC 20001-8002.



2933.212  Contracting officer's duties upon appeal.

    (a) When a notice of appeal has been received, the contracting 
officer must endorse on the appeal the date of mailing (or the date of 
receipt if the notice was not mailed). The contracting officer must also 
notify the Solicitor of Labor of the appeal.
    (b) The contracting officer should prepare and transmit the 
administrative file for the Office of the Solicitor and assist with the 
appeal.



2933.213  Obligation to continue performance.

    The contracting officer must include the clause at FAR 52.233-1, 
Disputes (Alternate I), in contracts where continued performance is 
necessary pending resolution of any claim arising under or relating to 
the contract.



2933.270  Department of Labor Board of Contract Appeals.

    (a) The Department of Labor Board of Contract Appeals (LBCA) is 
authorized by the Secretary to consider and determine appeals from 
decisions of contracting officers arising under a contract, or relating 
to a contract, made by the Department or any other executive agency when 
such agency or the Administrator of the Office of Federal Procurement 
Policy has designated the LBCA to decide the appeal.
    (b) The LBCA rules of procedure are contained in 41 CFR part 29-
60.104, appearing in the July 1, 1983, edition of 41 CFR, subtitle A, 
chapters 19-100.



PARTS 2934-2935 [RESERVED]--Table of Contents






PART 2936_CONSTRUCTION AND ARCHITECT_ENGINEER CONTRACTS--Table of Contents




     Subpart 2936.2_Special Aspects of Contracting for Construction

Sec.
2936.201 Evaluation of contractor performance.
2936.209 Construction contracts with architect-engineer firms.

[[Page 41]]

                     Subpart 2936.5_Contract Clauses

2936.516 Quality surveys.

               Subpart 2936.6_Architect-Engineer Services

2936.602 Selection of firms for architect-engineer contracts.
2936.602-1 Selection criteria.
2936.602-2 Evaluation boards.
2936.602-3 Evaluation board functions.
2936.602-4 Selection Authority.
2936.602-5 Short selection processes for contracts not to exceed 
          $100,000.
2936.603 Collecting data on and appraising firms' qualifications.
2936.604 Performance evaluation.

    Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).

    Source: 69 FR 22991, Apr. 27, 2004, unless otherwise noted.



     Subpart 2936.2_Special Aspects of Contracting for Construction



2936.201  Evaluation of contractor performance.

    The HCA must establish procedures to evaluate construction 
contractor performance and prepare performance reports as required by 
FAR 36.201.



2936.209  Construction contracts with architect-engineer firms.

    As required by FAR 36.209, no contract for construction of a project 
may be awarded to the firm that designed the project, or to its 
subsidiaries or affiliates, without the written approval of the 
Assistant Secretary for Administration and Management. Any request for 
approval must include the reason(s) why award to the design firm is 
required; an analysis of the facts involving potential or actual 
organizational conflicts of interest including benefits and detriments 
to the Government and the prospective contractor; and the measures which 
are to be taken to avoid, neutralize, or mitigate conflicts of interest.



                     Subpart 2936.5_Contract Clauses



 2936.516  Quality surveys.

    The HCA is authorized to make the determination regarding the 
impracticability of Government performance of original and final surveys 
as prescribed in FAR 36.516.



               Subpart 2936.6_Architect-Engineer Services



2936.602  Selection of firms for architect-engineer contracts.



2936.602-1  Selection criteria.

    HCAs are authorized to approve the use of design competition under 
the conditions in FAR 36.602-1(b).



2936.602-2  Evaluation boards.

    HCAs must establish procedures to provide permanent or ad hoc 
architect-engineer evaluation boards as prescribed in FAR 36.602-2. 
Procedures must provide for the appointment of private practitioners of 
architecture, engineering, or related professions when such action is 
determined in writing by the HCA to be essential to meeting the 
Government's minimum needs.



2936.602-3  Evaluation board functions.

    The selection report required in FAR 36.602-3(d) must be prepared 
for the approval of the HCA.



2936.602-4  Selection Authority.

    The HCA is authorized to serve as the designated Selection Authority 
in accordance with FAR 36.602-1.



2936.602-5  Short selection processes for contracts not to exceed $100,000.

    The selection process prescribed in FAR 36.602-5(b) must be used for 
architect-engineer contracts not exceeding the simplified acquisition 
threshold.



2936.603  Collecting data on and appraising firms'qualifications.

    (a) HCAs who acquire architect-engineer services must establish 
procedures to comply with the requirements of FAR 36.603.
    (b) Copies of procedures established under paragraph (a) of this 
section must be submitted to the Division of Acquisition Management 
Services, for review and recommendation for approval to the HCA when 
updated. These procedures must include a list of names, addresses, and 
telephone numbers of offices or boards assigned to maintain architect-
engineer qualification data files.

[[Page 42]]



2936.604  Performance evaluation.

    (a) The HCA must establish procedures to evaluate architect-engineer 
contractor performance as required in FAR 36.604. Normally, the 
performance report must be prepared by the contracting officer's 
authorized representative or other official who was responsible for 
monitoring contract performance and who is qualified to evaluate overall 
performance. DOL Agency/Office procedures must prescribe instructions 
for review of the report, before distribution, as prescribed in FAR 
36.604(b).
    (b) Performance reports must be made using Standard Form 1421, 
Performance Evaluation (Architect-Engineer) as prescribed in FAR 
36.702(c). Details covering unsatisfactory performance, including 
Government notification to the contractor and written comments by the 
contractor, must also be attached to the report.



PART 2937_SERVICE CONTRACTING--Table of Contents




                Subpart 2937.1_Service Contracts-General

Sec.
2937.103 Contracting officer responsibility.
2937.103-70 Department of Labor checklist to aid analysis and review of 
          requirements for service contracts.

             Subpart 2937.2_Advisory and Assistance Services

2937.203 Policy.

    Subpart 2937.6_Preference for Performance-Based Contracting (PBC)

2937.602 Elements of performance-based contracting.

    Authority: 5 U.S.C. 301, 40 U.S.C. 486(c).

    Source: 69 FR 22991, Apr. 27, 2004, unless otherwise noted.



                Subpart 2937.1_Service Contracts-General



2937.103  Contracting officer responsibility.

    The HCA is responsible for establishing internal review and approval 
procedures for service contracts in accordance with OFPP Policy Letter 
93-1 (Reissued), ``Management Oversight of Service Contracting''. As 
defined by FAR 37.101, contracts for personal services are permitted 
under the circumstances in 5 U.S.C. 3109.



2937.103-70  Department of Labor checklist to aid analysis and review 
of requirements for service contracts.

    Contracting specialists and contracting officers must work in close 
collaboration with the beneficiaries of the services being purchased to 
ensure that contractor performance meets contract requirements and 
performance standards.
    (a) General. Following is a checklist to aid analysis and review of 
requirements for service contracts.
    (1) Is the statement of work complete, with a clear-cut division of 
responsibility between the contracting parties?
    (2) Is the statement of work discussed in terms the market can 
satisfy?
    (3) Does the statement of work encompass all commercially available 
services that can meet the actual functional need (eliminates any 
nonessential preferences that may thwart full and open competition)?
    (4) Is the statement of work performance-based to the maximum extent 
possible (i.e., is the acquisition structured around the purpose of the 
work to be performed, as opposed to either the manner by which the work 
is to be performed or a broad and imprecise statement of work)?
    (b) Cost effectiveness. If the response to any of the following 
questions is negative, the agency may not have a valid requirement or 
not be obtaining the requirement in the most cost effective manner.
    (1) Is the statement of work written so that it supports the need 
for a specific service?
    (2) Is the statement of work written so that it permits adequate 
evaluation of contractor versus in-house cost and performance?
    (3) Are the choices of contract type, quality assurance plan, 
competition strategy, or other related acquisition strategies and 
procedures in the acquisition plan appropriate to ensure good

[[Page 43]]

contractor performance to meet the user's needs?
    (4) If a cost reimbursement contract is contemplated, is the 
acquisition plan adequate to ensure that the contractor will have the 
incentive to control costs under the contract?
    (5) Is the acquisition plan adequate to address the cost 
effectiveness of using contractor support (either long-term or short-
term) versus in-house performance?
    (6) Is the cost estimate or other supporting cost information 
adequate to enable the contracting office to effectively determine 
whether costs are reasonable?
    (7) Is the statement of work adequate to describe the requirement in 
terms of ``what'' is to be performed as opposed to ``how'' the work is 
to be accomplished?
    (8) Is the acquisition plan adequate to ensure that there is proper 
consideration given to ``quality'' and ``best value?''
    (c) Control. If the response to any of the following questions is 
negative, there may be a control problem.
    (1) Are there sufficient resources to evaluate contractor 
performance when the statement of work requires the contractor to 
provide advice, analysis and evaluation, opinions, alternatives, or 
recommendations that could significantly influence agency policy 
development or decision-making?
    (2) Does the quality assurance plan provide for adequate monitoring 
of contractor performance?
    (3) Is the statement of work written so that it specifies a contract 
deliverable or requires progress reporting on contractor performance?
    (4) Is agency expertise adequate to independently evaluate the 
contractor's approach, methodology, results, options, conclusions or 
recommendations?
    (d) Conflicts of interest. If the response to any of the following 
questions is affirmative, there may be a conflict of interest.
    (1) Can the potential offeror perform under the contract to devise 
solutions or make recommendations that would influence the award of 
future contracts to that contractor?
    (2) If the requirement is for support services (such as system 
engineering or technical direction), were any of the potential offerors 
involved in developing the system design specifications or in the 
production of the system?
    (3) Has a potential offeror participated in earlier work involving 
the same program or activity that is the subject of the present 
contract, wherein the offeror had access to source selection or 
proprietary information not available to other offerors competing for 
the contract?
    (4) Will the contractor be evaluating a competitor's work?
    (5) Does the contract allow the contractor to accept its own 
products or activities on behalf of the Government?
    (6) Will the work under this contract put the contractor in a 
position to influence government decision-making, e.g., developing 
regulations that will affect the contractor's current or future 
business?
    (7) Will the work under this contract affect the interests of the 
contractor's other clients?
    (8) Are any of the potential offerors, or their personnel who will 
perform the contract, former agency officials who--while employed by the 
agency--personally and substantially participated in the development of 
the requirement for, or the procurement of, these services within the 
past two years?
    (e) Competition. If the response to any of the following questions 
is negative, competition may be unnecessarily limited.
    (1) Is the statement of work defined so as to avoid overly 
restrictive specifications or performance standards?
    (2) Is the contract formulated in such a way as to avoid creating a 
continuous and dependent arrangement with the same contractor?
    (3) Is the use of an indefinite quantity or term contract 
arrangement appropriate to obtain the required services?
    (4) Will the requirement be obtained through the use of full and 
open competition?

[[Page 44]]



             Subpart 2937.2_Advisory and Assistance Services



2937.203  Policy.

    (a) HCAs having a requirement for certain advisory and assistance 
services are required by the Department of Labor Manual Series (See DLMS 
2 836) to prepare a written justification for such services. Written 
justification must be submitted to the Assistant Secretary for 
Administration and Management for review by the Procurement Review 
Board, for Assistant Secretary for Administration and Management 
approval.
    (b) Regardless of the type of action planned, the justification in 
paragraph (a) of this section must include the following:
    (1) A statement of need, which certifies that the requested services 
do not unnecessarily duplicate any previously performed work.
    (2) Nature and scope of the need, and the results expected.
    (3) Extent to which in-house staff availability was assessed, and 
the reasons why procurement of outside services is necessary.
    (4) Any additional information or data that support the requirement 
for a contract.
    (5) Name(s) and title(s) of official(s) who will be assigned as 
project officer(s) to work with the contractor, and who can be contacted 
for additional Information.
    (6) A statement that the Government policy on advisory and 
assistance services has been reviewed and complies with FAR 37.203.



    Subpart 2937.6_Preference for Performance-Based Contracting (PBC)



2937.602  Elements of performance-based contracting.

    (a) Performance-based contracting is defined in FAR 37.101 and 
discussed in FAR 37.6. Although FAR Part 37 primarily addresses services 
contracts, PBC is not limited to these contracts. PBC is the preferred 
way of contracting for services. (See exceptions listed in FAR 37.102.) 
Generally, when contract performance risk under a PBC specification can 
be shifted to the contractor to allow for the operation of objective 
incentives, a contract type with objectively measurable incentives 
(e.g., Firm-Fixed-Price, Fixed-Price-Incentive-Fee, or Cost-Plus-
Incentive-Fee) is appropriate. However, when contractor performance 
(e.g., cost control, schedule, or quality/technical) is best evaluated 
subjectively using qualitative measures, a Cost-Plus-Award-Fee contract 
may be used.
    (b) A labor hour level-of-effort contract is not considered a PBC.



PARTS 2938_2941 [RESERVED]--Table of Contents




[[Page 45]]



                    SUBCHAPTER G_CONTRACT MANAGEMENT





PART 2942_CONTRACT ADMINISTRATION AND AUDIT SERVICES--Table of Contents




                 Subpart 2942.1_Contract Audit Services

Sec.
2942.101 Policy.

           Subpart 2942.15_Contractor Performance Information

2942.1501 Scope.
2942.1502 Policy.
2942.1503 Procedures.

    Authority: 5 U.S.C. 301, 40 U.S.C. 486(c).

    Source: 69 FR 22991, Apr. 27, 2004, unless otherwise noted.



                 Subpart 2942.1_Contract Audit Services



2942.101  Policy.

    The OASAM Division of Cost Determination is responsible for 
establishing billing rates and indirect cost rates as prescribed in FAR 
42.7 for the Department of Labor.



           Subpart 2942.15_Contractor Performance Information



2942.1501  Scope.

    This subpart provides policies and procedures for evaluating, 
maintaining, and releasing contractor performance information under DOL 
contracts.



2942.1502  Policy.

    DOL contracting officers are required to use or interface with the 
Past Performance Information Retrieval System (PPIRS), and specifically 
the National Institutes of Health's Contractor Performance System. The 
HCA is responsible for ensuring that a contractor performance evaluation 
system is generated to meet the requirements of FAR subpart 42.15, 
including compliance with subcontracting plans. Contracts, task orders, 
and delivery orders, exceeding the simplified acquisition threshold, 
should be formally evaluated in writing. Interim evaluations should be 
performed on contracts exceeding one year in duration. This will assist 
contractors with improving marginal performance and identifying any 
major deficiencies. It will also facilitate performance evaluations at 
contract completion, as well as determining whether to exercise contract 
options, if any.



2942.1503  Procedures.

    (a) In accordance with FAR 42.1502, the contracting officer will 
prepare an interim evaluation of a contractor's performance at least 
annually for submission to the Past Performance Information Retrieval 
System (PPIRS), and specifically the Contractor Performance System 
maintained by the National Institutes of Health.
    (b) The contracting officer, or designee, must determine who will 
evaluate a contractor's performance. The contracting officer's technical 
representative, program manager, contract specialists or administrators, 
and users are candidates likely to be selected to perform the 
evaluation.
    (c) A contractor's performance evaluation should be obtained from a 
person who monitored contractor performance when that individual's 
assignment of duties or employment terminates before physical completion 
of the contract. The areas of performance to be selected for evaluation 
should be tailored to the type of supplies or services normally acquired 
by the contracting activities and the type of contract. HCAs must ensure 
uniformity of the evaluation criteria within their contracting 
activities.
    (d) Release of contractor performance evaluation information.
    (1) Requests for performance evaluation information from the public 
must be processed in accordance with FOIA, as implemented by DOL under 
29 CFR part 70.
    (2) Release of a contractor's performance evaluation information to 
other Federal agencies is subject to FAR 42.1502. When the performance 
evaluation information is released to other federal agencies, it should 
be provided with a written statement that it is nonpublic information 
that must be

[[Page 46]]

processed under FOIA principles if a request for its disclosure is 
received.
    (e) Even though the retention period for past performance evaluation 
information is three years (see FAR 42.1503), the contractor's 
performance evaluation, any contractor rebuttal, and final decision 
become a part of the contract file. Therefore, disposal of the 
contractor's evaluation information must be accomplished in accordance 
with FAR 4.804.



PART 2943_CONTRACT MODIFICATIONS--Table of Contents




                      Subpart 2943.2_Change Orders

Sec.
2943.205 Contract clauses.

                          Subpart 2943.3_Forms

2943.301 Use of forms.

    Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).

    Source: 69 FR 22991, Apr. 27, 2004, unless otherwise noted.



                      Subpart 2943.2_Change Orders



2943.205  Contract clauses.

    HCAs may establish procedures, or office policies, when appropriate 
for authorizing the contracting officer to vary the 30-day period for 
submission of adjustment proposals to the clauses prescribed by FAR 
43.205.



                          Subpart 2943.3_Forms



2943.301  Use of forms.

    (a) FAR 43.301(a)(1)(vi) requires the use of Standard Form 30 (SF-
30) to execute any obligation or deobligation of contract funds after 
award. FAR 13.307(c)(3) allows, and the Department of Labor prefers, the 
use of the SF-30 for simplified acquisitions. The SF-30 also must be 
used to deobligate funds when effecting contract closeout when obligated 
funds exceed the final contract costs. In such an instance, the SF-30 
may be issued as an administrative modification on a unilateral basis if 
the contractor's financial release has been separately obtained.
    (b) The contracting officer must include, in any unilateral contract 
modification issued for contract closeout, a statement that the 
contractor has signed a release of claims and indicate the date the 
release of claims was signed by the contractor.



PART 2944_SUBCONTRACTING POLICIES AND PROCEDURES--Table of Contents




                         Subpart 2944.1_General

Sec.
2944.101 Waiver.

                  Subpart 2944.2_Consent To Subcontract

2944.201-1 Consent requirements.
2944.202 Contracting officer's evaluation.
2944.202-2 Considerations.
2944.203 Consent limitations.

         Subpart 2944.3_Contractors' Purchasing Systems Reviews

2944.302 Requirements.

    Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).

    Source: 69 FR 22991, Apr. 27, 2004, unless otherwise noted.



                         Subpart 2944.1_General.



2944.101  Waiver.

    The waiver of consent must be in writing, signed by the contracting 
officer, and included in the contract file. The waiver must include all 
supporting facts, including the rationale for waiving the consent to 
subcontract requirements.



                  Subpart 2944.2_Consent To Subcontract



2944.201-1  Consent requirements.

    In accordance with FAR 44.201-1(b) or FAR 44.201-2, advance 
notification and agreement are required for all cost-reimbursement, 
time-and-materials, or labor-hour subcontracts exceeding the simplified 
acquisition threshold.



2944.202  Contracting officer's evaluation.



2944.202-2  Considerations.

    The review required by FAR 44.202-2(a) must be documented in writing 
(including supporting facts and rationale), signed by the contracting 
officer, and included in the contract file.

[[Page 47]]



2944.203  Consent limitations.

    Any limitations placed on the consent to subcontract must be 
documented in writing (including supporting facts and rationale), signed 
by the contracting officer, and included in the contract file.



         Subpart 2944.3_Contractors' Purchasing Systems Reviews



2944.302  Requirements.

    The authority of the Assistant Secretary for Administration and 
Management under FAR 44.302(a), to raise or lower the $25 million review 
level for a contractor's purchasing system, may not be delegated. When a 
contractor's purchasing system review is required by the contracting 
officer, the effort must be coordinated with the OASAM Business 
Operations Center's Division of Acquisition Management Services and the 
Division of Cost Determination.



PART 2945_GOVERNMENT PROPERTY--Table of Contents




                         Subpart 2945.1_General

Sec.
2945.104 Review and correction of contractors' property control systems.
2945.105 Records of Government property.

       Subpart 2945.3_Providing Government Property to Contractors

2945.302 Providing facilities.

     Subpart 2945.4_Contractor Use and Rental of Government Property

2945.403 Rental-use and charges clause.

    Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).

    Source: 69 FR 22991, Apr. 27, 2004, unless otherwise noted.



                         Subpart 2945.1_General



2945.104  Review and correction of contractors' property control systems.

    When the Government's property administrator determines that review 
and approval of the contractor's property control system rests with DOL, 
the Government's property administrator must review the system to 
determine whether the contractor will be able to meet the requirements 
of FAR 45.104. The review must be completed, signed by the appointed 
property administrator, and retained in the contract file.



2945.105  Records of Government property.

    Contracting officers must maintain a file on any Government-
furnished property (GFP) in the possession of contractors. As a minimum, 
the file must contain the following:
    (a) A copy of the applicable portions of the contract that list the 
GFP;
    (b) Contracting officer's letters assigning the GFP administrator to 
the contract;
    (c) Written evidence that the contractor's property control system 
was reviewed and approved as required by FAR 45.104;
    (d) If applicable, documentation of the request and approval or 
denial of the contractor's requests to acquire or fabricate special test 
equipment in accordance with FAR 45.307 or other property;
    (e) The contractor's written notice of receipt of the GFP and any 
reported discrepancies thereto, as required by FAR 45.502-1 and 45.502-
2, respectively;
    (f) Any other documents pertaining to or affecting the status of the 
GFP in the possession of contractors or subcontractors under the 
contract;
    (g) Documentation of the screening and disposal of all GFP as 
required by FAR 45.6.



       Subpart 2945.3_Providing Government Property to Contractors



2945.302  Providing facilities.

    The HCA is authorized to make the determination to provide 
facilities to a contractor as prescribed in FAR 45.302-1(a)(4).

[[Page 48]]



     Subpart 2945.4_Contractor Use and Rental of Government Property



2945.403  Rental-use and charges clause.

    The HCA must make the determination to charge rent on the basis of 
use under the clause at FAR 52.245-9 when the contracting officer 
provides access to Government production and research property, as 
prescribed in FAR 45.403(a).



PARTS 2946-2951 [RESERVED]--Table of Contents




[[Page 49]]



                      SUBCHAPTER H_CLAUSE AND FORMS





PART 2952_SOLICITATION PROVISIONS AND CONTRACT CLAUSES--Table of Contents




               Subpart 52.2_Text of Provisions and Clauses

Sec.
2952.201-70 Contracting Officer's Technical Representative (COTR).

    Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).

    Source: 69 FR 22991, Apr. 27, 2004, unless otherwise noted.



               Subpart 52.2_Text of Provisions and Clauses



2952.201-70  Contracting Officer's Technical Representative (COTR).

    Insert the following clause into contracts requiring COTR 
representation under 2901.603.71:

    Contracting officer's technical representative (COTR) May 2004
    (a) Mr./Ms. (Name) of (Organization) (Room No.), (Building), 
(Address), (Area Code & Telephone No.), is hereby designated to act as 
contracting officer's technical representative (COTR) under this 
contract.
    (b) The COTR is responsible, as applicable, for: receiving all 
deliverables; inspecting and accepting the supplies or services provided 
hereunder in accordance with the terms and conditions of this contract; 
providing direction to the contractor which clarifies the contract 
effort, fills in details or otherwise serves to accomplish the 
contractual scope of work; evaluating performance; and certifying all 
invoices/vouchers for acceptance of the supplies or services furnished 
for payment.
    (c) The COTR does not have the authority to alter the contractor's 
obligations under the contract, and/or modify any of the expressed 
terms, conditions, specifications, or cost of the agreement. If, as a 
result of technical discussions, it is desirable to alter/change 
contractual obligations or the scope of work, the contracting officer 
must issue such changes.



PART 2953_FORMS--Table of Contents




                         Subpart 2953.1_General

Sec.
2953.100 Request for Recommendation by Procurement Review Board DL 1-
          490.
2953.101 Simplified Acquisition Documentation Checklist DL 1-2216.
2953.102 Quotation for Simplified Acquisitions DL 1-2078.
2953.103 Acquisition Screening and Review--over $100,000 DL 1-2004.

    Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).

    Source: 69 FR 22991, Apr. 27, 2004, unless otherwise noted.



                         Subpart 2953.1_General



2953.100  Request for Recommendation by Procurement Review Board DL 1-490.

    The following form must be used by the requisitioning office to 
submit a request for review by the Procurement Review Board as specified 
in DOLAR 2901 and 2943. This form must be submitted through the 
Assistant Secretary for the program office to the Director, Division of 
Acquisition Management Services, for scheduling before the Procurement 
Review Board.

[[Page 50]]

[GRAPHIC] [TIFF OMITTED] TR27AP04.000


[[Page 51]]


[GRAPHIC] [TIFF OMITTED] TR27AP04.001


[[Page 52]]


[GRAPHIC] [TIFF OMITTED] TR27AP04.002


[[Page 53]]


[GRAPHIC] [TIFF OMITTED] TR27AP04.003


[[Page 54]]





2953.101  Simplified Acquisition Documentation Checklist DL 1-2216.

    The following checklist must be used to document all simplified 
acquisitions at or below the simplified acquisition threshold.

[[Page 55]]

[GRAPHIC] [TIFF OMITTED] TR27AP04.004


[[Page 56]]





2953.102  Quotation for Simplified Acquisitions DL 1-2078.

    The following form must be used to document all simplified 
acquisitions above the micro-purchase threshold and below the simplified 
acquisition threshold. This form may also be used to document commercial 
acquisitions on a fixed price basis up to $5 million.
[GRAPHIC] [TIFF OMITTED] TR27AP04.005


[[Page 57]]





2953.103  Acquisition Screening and Review--over $100,000 DL 1-2004.

    The requiring organization must complete the following form for all 
acquisitions above the simplified acquisition threshold. This form will 
then be submitted through the contracting officer to the Office of Small 
Business Programs for review.
[GRAPHIC] [TIFF OMITTED] TR27AP04.006


[[Page 59]]



     CHAPTER 30--DEPARTMENT OF HOMELAND SECURITY, HOMELAND SECURITY 
                      ACQUISITION REGULATION (HSAR)




                          (Parts 3000 to 3099)

  --------------------------------------------------------------------

                          SUBCHAPTER A--GENERAL
Part                                                                Page
3001            Federal Acquisition Regulations System......          61
3002            Definitions of words and terms..............          66
3003            Improper business practices and personal 
                    conflicts Of interest...................          67
3004            Administrative matters......................          68
                   SUBCHAPTER B--ACQUISITION PLANNING
3005            Publicizing contract actions................          71
3006            Competition requirements....................          71
3007            Acquisition planning [Reserved]
3008            Required sources of supplies and services [Reserved]
3009            Contractor qualifications...................          72
3010            Market research [Reserved]
3011            Describing agency needs.....................          74
3012            Acquisition of commercial items [Reserved]

            SUBCHAPTER C--CONTRACT METHODS AND CONTRACT TYPES
3013            Simplified acquisition procedures...........          77
3014            Sealed bidding [Reserved]
3015            Contracting by negotiation..................          78
3016            Types of contracts..........................          79
3017            Special contracting methods.................          80
3018            [Reserved]

                  SUBCHAPTER D--SOCIOECONOMIC PROGRAMS
3019            Small business programs.....................          83
3020-3021       [Reserved]

[[Page 60]]

3022            Application of labor laws to government 
                    acquisitions............................          83
3023            Environment, conservation, occupational 
                    safety, and drug-free workplace.........          85
3024            Protection of privacy and freedom of 
                    information.............................          85
3025            Foreign acquisition [Reserved]
3026            Other socioeconomic programs [Reserved]
3027            Patents, data and copyrights................          86
3028            Bonds and insurance.........................          87
             SUBCHAPTER E--GENERAL CONTRACTING REQUIREMENTS
3029            Taxes [Reserved]
3030            Cost accounting standards administration....          91
3031            Contract cost principles and procedures.....          91
3032            Contract financing..........................          91
3033            Protests, disputes, and appeals.............          92
3034            Major system acquisition [Reserved]

             SUBCHAPTER F--SPECIAL CATEGORIES OF CONTRACTING
3035            Research and development contracting........          93
3036            Construction and architect-engineer 
                    contracts...............................          93
3037            Service contracting.........................          93
3038            Federal supply schedule contracting [Reserved]
3039            Acquisition of information technology [Reserved]
3040            [Reserved]
3041            Acquisition of utility services [Reserved]

                    SUBCHAPTER G--CONTRACT MANAGEMENT
3042            Contract administration and audit services..          97
3043            Contract modifications [Reserved]
3044            Subcontracting policies and procedures [Reserved]
3045            Government property.........................          97
3046            Quality assurance...........................          98
3047            Transportation..............................         101
3048            Value engineering [Reserved]
3049            Termination of contracts [Reserved]
3050            Extraordinary contractual actions [Reserved]
3051            Use of government sources by contractors [Reserved]

                     SUBCHAPTER H--CLAUSES AND FORMS
3052            Solicitation provisions and contract clauses         103
3053            Forms.......................................         122

[[Page 61]]



                          SUBCHAPTER A_GENERAL





PART 3001_FEDERAL ACQUISITION REGULATIONS SYSTEM--Table of Contents




               Subpart 3001.1_Purpose, Authority, Issuance

Sec.
3001.101 Purpose.
3001.102 Statement of Guiding Principles for the Federal Acquisition 
          System.
3001.104 Applicability.
3001.105 Issuance.
3001.105-1 Publication and code arrangement.
3001.105-2 Arrangement of regulations.
3001.105-3 Copies.
3001.106 OMB Approval under the Paperwork Reduction Act.

              Subpart 3001.3_Agency Acquisition Regulations

3001.301 Policy.
3001.301-70 Amendment of HSAR.
3001.301-71 Effective date.
3001.301-72 HSAC or HSAR Notice numbering.
3001.303 Publication and codification.
3001.304 Agency control and compliance procedures.

                 Subpart 3001.4_Deviations from the FAR

3001.403 Individual deviations.
3001.404 Class deviations.

     Subpart 3001.6_Career Development, Contracting Authority, and 
                            Responsibilities

3001.601 General.
3001.602 Contracting Officers.
3001.602-3 Ratification of unauthorized commitments.
3001.603 Selection, appointment, and termination of appointment.
3001.603-1 General.

               Subpart 3001.7_Determinations and Findings

3001.704 Content.

 Subpart 3001.70_Other Determinations, Waivers, Exceptions, Approvals, 
                        Reviews, and Submittals.

3001.7000 Coordination and approval.
3001.7001 Content.

    Authority: 41 U.S.C. 418b (a) and (b).

    Source: 68 FR 67871, Dec. 4, 2003, unless otherwise note.



               Subpart 3001.1_Purpose, Authority, Issuance



3001.101  Purpose.

    The Department of Homeland Security Acquisition Regulation (HSAR) 
establishes uniform acquisition policies and procedures, which implement 
and supplement the Federal Acquisition Regulation (FAR).



3001.102  Statement of Guiding Principles for the Federal Acquisition System.

    (d) The FAR and this supplement are to be interpreted permissively, 
if consistent with statutory and regulatory requirements, policy, and 
sound professional judgment.



3001.104  Applicability.

    (a) The following order of precedence applies to resolve any 
acquisition regulation or procedural inconsistency found within HSAR or 
the Homeland Security Acquisition Manual (HSAM):
    (1) Statute;
    (2) FAR or other applicable regulation or Executive Order;
    (3) HSAR;
    (4) Department of Homeland Security (DHS) Directives; and
    (5) HSAM.
    (b) The Transportation Security Administration (TSA) exception to 
this regulation is authorized by the Aviation and Transportation 
Security Act of 2001 (Section 101(a) of Public Law 107-71). However, see 
(HSAR) 48 CFR 3033.211, regarding Board of Contract Appeals (BCA).
    (c) For nonappropriated fund contracts, the FAR and HSAR will be 
followed to the maximum extent feasible excluding provisions determined 
by counsel not to apply to Nonappropriated Fund institutions (NAFIs). 
Contracting terms may provide for mutual agreement as to the Board of 
Contract Appeals jurisdiction but this policy will not confer court 
jurisdiction concerning NAFIs that does not otherwise exist.

[[Page 62]]



3001.105  Issuance.



3001.105-1  Publication and code arrangement.

    (a) The HSAR is published in:
    (1) The Federal Register and
    (2) Cumulated form in the Code of Federal Regulations (CFR).



3001.105-2  Arrangement of regulations.

    (a) General. The HSAR, which encompasses both Department-wide and 
organizational element-unique guidance, conforms to the arrangement and 
numbering system prescribed by (FAR) 48 CFR 1.105-2. Guidance that is 
unique to an organization with Head of the Contracting Activity (HCA) 
authority contains the organization's acronym directly preceding the 
cite. The following acronyms apply:

Bureau of Customs and Border Protection (CBP)
Bureau of Immigration and Customs Enforcement (ICE)
DHS Office of Procurement Operations (OPO)
Federal Emergency and Management Agency (FEMA) (Includes all elements of 
    the Emergency Preparedness and Response Directorate)
Federal Law Enforcement Training Center (FLETC)
Transportation Security Administration (TSA)
U.S. Coast Guard (USCG)
U.S. Secret Service (Secret Service)



3001.105-3  Copies.

    The HSAR is available in the Federal Register and electronically at 
http://www.dhs.gov/dhspublic/.



3001.106  OMB Approval under the Paperwork Reduction Act.

    (a) The Office of Management and Budget (OMB) has assigned the 
following control numbers that must appear on the upper right-hand 
corner of the face page of each solicitation, contract, modification, 
and order:

OMB Control No. 1600-002 (Contract related forms)
OMB Control No. 1600-005 (Offeror submissions)
OMB Control No. 1600-003 (Contractor submissions)
OMB Control No. 1600-004 (Protests)

    (b) OMB regulations and OMB's approval and assignment of control 
numbers are conditioned upon not requiring more than three copies 
(including the original) of any document of information. OMB has granted 
a waiver to permit the Department to require up to eight copies of 
proposal packages, including proprietary data, for solicitations, 
provided that contractors who submit only an original and two copies 
will not be placed at a disadvantage.



              Subpart 3001.3_Agency Acquisition Regulations



3001.301  Policy.

    (a)(1) The HSAR is issued for Departmental guidance according to the 
policy cited in (FAR) 48 CFR 1.301. The HSAR establishes uniform 
Homeland Security policies and procedures for all acquisition activities 
within the Department of the Homeland Security, except the TSA. OE 
supplemental acquisition regulations to be inserted in the HSAR as a 
HSAR supplement regulation must be reviewed and approved by the Chief 
Procurement Officer (CPO) before the CPO submits the proposed coverage 
for publication in the Federal Register according to (FAR) 48 CFR 1.501.
    (2)(i) The CPO is authorized to issue internal agency guidance at 
any organizational level. Department-wide procedures are contained in 
the HSAM. The HCA may implement internal procedures or supplement the 
FAR, HSAR, or HSAM as provided in HSAM 3001.3. The HCA may issue 
procedures or delegate this authority to any organizational level deemed 
appropriate. OE procedures may be more restrictive or require higher 
approval levels than those permitted by the HSAM, unless otherwise 
specified.
    (ii) Individuals granted authority in the HSAR may delegate that 
authority, unless the FAR or HSAR specifically state that the authority 
is not delegable.
    (b) The Under Secretary of Management established procedures through 
Management Directive (MD) 0490.1, entitled Federal Register Notice and 
Rules,

[[Page 63]]

to ensure that agency acquisition regulations are published for comment 
in the Federal Register in conformance with FAR procedures at (FAR) 48 
CFR subpart 1.5.



3001.301-70  Amendment of HSAR.

    (a) Request for changes to the regulation may be recommended by DHS 
personnel, other Government agencies, or the public. Change requests are 
to be submitted in the following format to the Department of Homeland 
Security, Attn: Office of the Under Secretary of Management, Chief 
Procurement Officer, Washington, DC 20598.
    (1) Problem: Succinctly state the problem(s) created by current HSAR 
requirements or processes and describe the factual or legal reasons for 
requesting a regulatory change.
    (2) Recommendation: Identify the recommended change by using the 
current language and lining through the words to be deleted and 
inserting proposed language in brackets. If the change is extensive, 
deleted language may be displayed by forming a box with diagonal lines 
connecting the corners.
    (3) Discussion: Explain why the change is necessary and how the 
change will solve the problem. Address any cost or administrative impact 
on Government activities, offerors, and contractors. Provide any other 
helpful information and documents such as statutes, legal decisions, 
regulations, reports, etc.
    (4) Point of Contact: Provide a point of contact for answering 
questions regarding the recommendation, along with a telephone number, 
e-mail or other method of reaching the contact.
    (b) The HSAR is maintained by the CPO through the HSAR/HSAM change 
process (i.e., input from various OEs including representatives 
specifically designated to formulate Departmental acquisition policies 
and procedures).
    (1) Homeland Security Acquisition Circular (HSAC). HSAC (see (HSAR) 
48 Chapter 3001.301-72) will be used to amend (HSAR) 48 Chapter 30.
    (2) HSAR Notices will be issued (with a specified expiration date) 
when interim guidance is necessary under any of the following 
circumstances:
    (i) To promulgate, as rapidly as possible, selected material in a 
general or narrative manner, in advance of a HSAC issuance;
    (ii) To disseminate other acquisition related information; or
    (iii) To issue guidance that is expected to be effective for a 
period of 1 year or less.



3001.301-71  Effective date.

    Unless otherwise stated, the following applies--
    (a) Statements in HSACs or HSAR Notices that the content is ``upon a 
specified date,'' or that changes in the document are ``to be used upon 
receipt,'' mean that any new or revised provisions, clauses, procedures, 
or forms must be included in solicitations or contracts issued 
thereafter; and
    (b) Unless expressly directed by statute or regulation, if 
solicitations have been issued prior to the HSAC or HSAR notice receipt 
or publication, the new information (e.g., forms and clauses) need not 
be included if the Chief of the Contracting Office (COCO) determines, in 
writing, that including the new information would not be in the best 
interests of the Government.



3001.301-72  HSAC or HSAR Notice numbering.

    HSACs and HSAR Notices will be numbered consecutively on a fiscal 
year basis beginning with number ``01'' prefixed by the last two digits 
of the fiscal year (e.g., HSAR Notices 03-01 and 03-02 indicate the 
first two HSAR Notices issued in fiscal year 2003).



3001.303  Publication and codification.

    (a) The HSAR is issued as chapter 30 of Title 48 of the CFR.
    (1) The FAR numbering illustrations at (FAR) 48 CFR 1.105-2 apply to 
the HSAR.
    (2) Coverage within HSAR 48 CFR chapter 30 is identified by the 
prefix ``30'' followed by the complete FAR cite which may extend 
downward to the subparagraph level (e.g., (HSAR) 48 CFR 3001.101).
    (3) Coverage in HSAR Chapter 30 that supplements the FAR will use 
part, subpart, section and subsection numbers ending in ``70'' through 
``89''. A series of numbers beginning with ``70'' is used for provisions 
and clauses (e.g., (HSAR) 48 CFR 3001.301-70).

[[Page 64]]

    (4) Coverage in HSAR 48 CFR chapter 30, other than that identified 
with a ``70'' or higher number, which implements the FAR uses the 
identical number sequence and caption of the FAR segment being 
implemented which may extend downward to the subparagraph level. 
Subparagraph numbers/letters may not be shown as sequential, but may be 
shown by the specific paragraph/subparagraph implemented from the FAR 
(e.g., (HSAR) 48 CFR 3003.301 contains subparagraphs (a) and (b) because 
only these subparagraphs, correlating to FAR, are being supplemented by 
(HSAR) 48 CFR chapter 30).
    (5) Organizational Element-unique guidance. Supplementary material 
for which there is no counterpart in the FAR or HSAR shall be identified 
using chapter, part, subpart, section, or subsection numbers of ``90'' 
and up (e.g., the U.S. Coast Guard's acronym is ``USCG''; an USCG-unique 
clause pertaining to ``Inspection and/or Acceptance'' would be 
designated ``USCG 3052.246-90'').
    (6) References and citations. Cross references to the FAR in the 
HSAR will be cited by ``FAR'' followed by the FAR numbered cite, and 
cross reference to the HSAM in the HSAR will be cited by ``HSAM'' 
followed by the HSAM numbered cite.
    (7) Department/agency and OE supplements must parallel the FAR and 
HSAR numbering, except department/agency supplemental numbering uses 
subsection numbering of 90 and up, instead of 70 and up.

                                           Table 1-1.--HSAR Numbering
----------------------------------------------------------------------------------------------------------------
                               FAR                                   Is implemented as      Is supplemented as
----------------------------------------------------------------------------------------------------------------
19..............................................................              3019                  3019.70
19.5............................................................              3019.5                3019.570
19.501..........................................................              3019.501              3019.501-70
19.501-1........................................................              3019.501-1            3019.501-170
----------------------------------------------------------------------------------------------------------------



3001.304  Agency control and compliance procedures.

    (a) The HSAR is under the direct oversight and control of the 
Homeland Security, Office of the Chief Procurement Officer (OCPO), which 
is responsible for evaluation, review, and issuance of all Department-
wide acquisition regulations and guidance. Each HCA may supplement the 
HSAR with OE guidance. Supplementation should be kept to a minimum. OEs 
proposing to issue regulatory supplements or use solicitation or 
contract clauses on a repetitive basis must obtain legal review by the 
OE's legal counsel and forward supplements to the CPO for concurrence 
prior to publication in the Federal Register.
    (c) The CPO is responsible for evaluating all regulatory coverage in 
agency acquisition regulations to determine if the substance could apply 
to other agencies and to make recommendation for inclusion in the FAR.



             Subpart 3001.4_Deviations from the FAR and HSAR



3001.403  Individual deviations.

    Unless precluded by law, executive order, or other regulation, the 
HCA is authorized to approve individual deviation (except with respect 
to (FAR) 48 CFR 30.201-3, 30.201-4; the requirements of the Cost 
Accounting Standards board rules and regulations at 48 CFR chapter 99 
(FAR appendix); and part 50). Submit requests per (HSAR) 48 CFR 
3001.7000(a), including complete documentation of the justification for 
the deviation (See HSAM 3001.403).



3001.404  Class deviations.

    (a) Unless precluded by law, executive order, or other regulation, 
the CPO is authorized to approve class deviations (except (FAR) 48 CFR 
30.201-3, 30.201-4; the requirements of the Cost Accounting Standards 
board rules and regulations at 48 CFR Chapter 99 (FAR Appendix); and 
Part 50). Submit requests per (HSAR) 48 CFR 3001.7000(a), including 
complete documentation of the justification for the deviation, and

[[Page 65]]

the number and type of contract actions affected. Include a copy of the 
approved deviation in each contract file. The CPO will transmit a copy 
of each approved deviation to the FAR Secretariat.



     Subpart 3001.6_Career Development, Contracting Authority, and 
                            Responsibilities



3001.601  General.

    DHS Delegation Number 0200.1, Delegation to the Directorate of 
Management, delegates authority from the Secretary to the Under 
Secretary of Management to manage the acquisition function. DHS 
Delegation 0700, Delegation to the Chief Procurement Officer for 
Acquisition and Financial Assistance Management, delegates this 
authority from the Under Secretary of Management to the Chief 
Procurement Officer.



3001.602  Contracting officers.



3001.602-3  Ratification of unauthorized commitments.

    Department of Homeland Security (DHS) policy requires that 
acquisitions be made only by Government officials having authority to 
enter into such acquisitions. Acquisitions made by other than authorized 
personnel are contrary to Departmental policy and may be considered 
matters of serious misconduct on the part of an employee making an 
unauthorized commitment, and may result in disciplinary action being 
taken against an employee who makes an unauthorized commitment.



3001.603  Selection, appointment, and termination of appointment.



3001.603-1  General.

    Under DHS Delegations, the Heads of the Contracting Activity (HCA), 
with authority to redelegate no lower than the COCO, are authorized to 
select and appoint contracting officers and terminate their appointment.



               Subpart 3001.7_Determinations and Findings



3001.704  Content.

    The following format shall be used for all determinations and 
findings (D&Fs), unless otherwise specified in the FAR or the HSAR. The 
contracting officer is responsible for preparing D&Fs, and requirements 
and technical personnel are responsible for the accuracy and adequacy of 
the supporting factual information, which shall be furnished to the 
contracting officer.
    Insert specific information indicated in brackets.

                       Determination and Findings

    Under [insert citation for appropriate statutory and/or regulatory 
basis for D&F], the Department of Homeland Security, [insert contracting 
activity], is granted authority to [insert nature and/or description of 
the action being approved].

                                Findings

    [Findings that detail the particular circumstances, facts, or 
reasoning essential to support the determination.]

                              Determination

    [A determination, based on the findings, that the proposed action is 
justified under the applicable statute or regulation.] [Expiration date 
of the D&F, if required.]

[Signature of authorized official]

Name and Title

[month, day, and year]

Date



 Subpart 3001.70_Other Determinations, Waivers, Exceptions, Approvals, 
                         Reviews, and Submittals



3001.7000  Coordination and approval.

    Documents requiring CPO approval. Requests shall be prepared in 
writing by the contracting officer and submitted through the HCA to the 
CPO for approval.



3001.7001  Content.

    The general format at (HSAR) 48 CFR 3001.704 shall be used to 
provide a justification to support the requested determination, waiver, 
exception or approval.

[[Page 66]]



PART 3002_DEFINITIONS OF WORDS AND TERMS--Table of Contents




                       Subpart 3002.1_Definitions

Sec.
3002.101 Definitions.

                      Subpart 3002.2_Abbreviations

3002.270 Abbreviations.

    Authority: 41 U.S.C. 418b (a) and (b).

    Source: 68 FR 67871, Dec. 4, 2003, unless otherwise note.



                       Subpart 3002.1_Definitions



3002.101  Definitions.

    Chief Information Officer (CIO) means the Director of the Office of 
the CIO.
    Chief of the Contracting Office (COCO) means the individual(s) 
responsible for managing the contracting office(s) within an 
organizational element (OE).
    Chief Procurement Officer (CPO) means the Senior Procurement 
Executive (SPE).
    Contracting activity includes all the contracting offices within an 
OE and is the same as the term ``procuring activity.''
    Contracting officer means an individual authorized by virtue of 
position or by appointment to perform the functions assigned by the 
Federal Acquisition Regulation and the Homeland Security Acquisition 
Regulation.
    Head of Contracting Activity (HCA) means the individual responsible 
for direct management of the entire acquisition function within an 
organizational element.
    Head of the Agency means the Secretary of the Department of Homeland 
Security, or, by delegation, the Under Secretary of Management. ``Legal 
counsel'' means the Department of Homeland Security Office of General 
Counsel or OE office providing legal services to the contracting 
organization.
    Legal review means review by legal counsel.
    Major system means an acquisition as defined in Management Directive 
Number 1400, Investment Review Process.
    Micro-purchase threshold means $2,500 (see (HSAR) 48 CFR 3013-70), 
except it means--
    (1) $2,000 for construction subject to the Davis-Bacon Act; and
    (2) $7,500 for acquisitions of supplies or services, except for 
construction subject to the Davis-Bacon, if the Secretary determines in 
writing that the mission of the Department (described in Pub. L. 107-
296, Sec. 101) would be seriously impaired without the use of such 
authorities, Act (Pub. L. 107-296, section 833).
    Organizational Element (OE) means the following entities for 
purposes of this chapter:
    (1) Bureau of Customs and Border Protection (CBP);
    (2) Bureau of Immigration and Customs Enforcement (ICE);
    (3) DHS Office of Procurement Operations (OPO);
    (4) Federal Emergency Management Agency (FEMA) (Includes all 
elements of the Emergency Preparedness and Response Directorate);
    (5) Federal Law Enforcement Training Center (FLETC);
    (6) Transportation Security Administration (TSA); (TSA is exempt 
from the HSAR and HSAM according to the ``Aviation and Transportation 
Security Act of 2001'');
    (7) U.S. Coast Guard (USCG); and
    (8) U.S. Secret Service (Secret Service).
    Senior Procurement Executive (SPE) for the Department of Homeland 
Security is the Chief Procurement Officer (CPO).
    Simplified acquisition threshold means $100,000 (see (HSAR) 48 CFR 
3013-70), except that for acquisitions of supplies or services that, if 
the Secretary determines in writing that the mission of the Department 
(described in Pub. L. 107-296, section 101) would be seriously impaired 
without the use of such authorities from November 25, 2002 to December 
30, 2007 (Pub. L. 107-296, section 833(c)), the term means--
    (1) $200,000 for any contract to be awarded and performed, or 
purchase to be made, inside the United States; and
    (2) $300,000 for any contract to be awarded and performed, or 
purchase to be made, outside the United States.



                      Subpart 3002.2_Abbreviations



3002.270  Abbreviations.

CFO Chief Financial Officer

[[Page 67]]

CIO Chief Information Officer
COCO Chief of the Contracting Office
COR Contracting Officers Representative
COTR Contracting Officer's Technical Representative
CPO Chief Procurement Officer
D&F Determination and Findings
DOTBCA Department of Transportation Board of Contract Appeals
FOIA Freedom of Information Act
HCA Head of Contracting Activity
J & A Justification and Approval for Other than Full and Open 
          Competition
KO Contracting officer
MD Management Directive
OCPO Office of the Chief Procurement Officer
OE Organizational Element
OIG Office of the Inspector General
OSDBU Office of Small and Disadvantaged Business Utilization
PCR SBA's Procurement Center Representative
RFP Request for Proposal
SBA Small Business Administration
SBS Small Business Specialist
SPE Senior Procurement Executive



PART 3003_IMPROPER BUSINESS PRACTICES AND PERSONAL CONFLICTS OF INTEREST
--Table of Contents




                        Subpart 3003.1_Safeguards

Sec.
3003.101 Standards of conduct.
3003.101-3 Agency regulations.

      Subpart 3003.2_Contractor Gratuities to Government Personnel

3003.203 Reporting suspected violations of the Gratuities clause.
3003.204 Treatment of violations.

        Subpart 3003.3_Reports Of Suspected Antitrust Violations

3003.301 General.

                     Subpart 3003.4_Contingent Fees

3003.405 Misrepresentations or violations of the Covenant Against 
          Contingent Fees.

            Subpart 3003.5_Other Improper Business Practices

3003.502 Subcontractor kickbacks.
3003.502-2 Subcontractor kickbacks.

    Subpart 3003.9_Whistleblower Protections for Contractor Employees

3003.901 Definitions.

    Authority: 41 U.S.C. 418b (a) and (b).

    Source: 68 FR 67871, Dec. 4, 2003, unless otherwise note.



                        Subpart 3003.1_Safeguards



3003.101  Standards of conduct.



3003.101-3  Agency regulations.

    (a) Government-wide and Department of Homeland Security regulations 
governing the conduct and responsibilities of employees are contained in 
5 CFR parts 2635 and 3101, and MD 0480, Ethics/Standards of Conduct.



      Subpart 3003.2_Contractor Gratuities to Government Personnel



3003.203  Reporting suspected violations of the Gratuities clause.

    (a) Suspected violations of the Gratuities clause shall be reported 
to the contracting officer responsible for the acquisition (or the COCO 
if the contracting officer is suspected of the violation). The 
contracting officer (or the COCO) shall obtain from the person reporting 
the violation, and any witnesses to the violation, the following 
information:
    (1) The date, time, and place of the suspected violation;
    (2) The name and title (if known) of the individual(s) involved in 
the violation; and
    (3) The details of the violation (e.g., the gratuity offered or 
intended) to obtain a contract or favorable treatment under a contract.
    (4) The person reporting the violation and witnesses (if any) shall 
be requested to sign and date the information certifying that the 
information furnished is true and correct.
    (b) The contracting officer shall submit the report to the COCO 
(unless the alleged violation was directly reported to the COCO) and the 
Head of the Contracting Activity (HCA) for further action. The COCO and 
HCA will determine, with the advice of OE legal counsel, whether the 
case warrants submission to the OIG, or other investigatory 
organization.



3003.204  Treatment of violations.

    (a) The HCA is the individual to determine whether a Gratuities 
clause

[[Page 68]]

violation has occurred. If the HCA has been personally and substantially 
involved in the specific procurement, the advice of Government legal 
counsel should be sought to determine whether an alternate decision 
maker should be designated.
    (b) The COCO shall ensure that the hearing procedures required by 
(FAR) 48 CFR 3.204(b) are afforded to the contractor. Government legal 
counsel shall be consulted regarding the appropriateness of the hearing 
procedures that are established.
    (c) If the HCA determines that the alleged gratuities violation 
occurred during the ``conduct of an agency procurement'' the COCO shall 
consult with Government legal counsel regarding the approach for 
appropriate processing of either the Procurement Integrity Act violation 
or the Gratuities violation.



        Subpart 3003.3_Reports Of Suspected Antitrust Violations



3003.301   General.

    (b) The procedures at (HSAR) 48 CFR 3003.203 shall be followed for 
suspected antitrust violations, except reports of suspected antitrust 
violations shall be coordinated with legal counsel for referral to the 
Department of Justice, if deemed appropriate.



                     Subpart 3003.4_Contingent Fees



3003.405  Misrepresentations or violations of the Covenant Against 
Contingent Fees.

    (a) The procedures at (HSAR) 48 CFR 3003.203 shall be followed for 
misrepresentation or violations of the covenant against contingent fees.
    (b)(4) The procedures at (HSAR) 48 CFR 3003.203 shall be followed 
for misrepresentation or violations of the covenant against contingent 
fees, except reports of misrepresentation or violations of the covenant 
against contingent fees shall be coordinated with legal counsel for 
referral to the Department of Justice, if deemed appropriate.



            Subpart 3003.5_Other Improper Business Practices



3003.502  Subcontractor kickbacks.



3003.502-2  Subcontractor kickbacks.

    (g) The DHS OIG shall receive the prime contractor or subcontractors 
written report.



    Subpart 3003.9_Whistleblower Protections for Contractor Employees



3003.901  Definitions.

    Authorized official of an agency means the Department of Homeland 
Security's CPO.



PART 3004_ADMINISTRATIVE MATTERS--Table of Contents




                    Subpart 3004.1_Contract Execution

Sec.
3004.103 Contract clause.

                     Subpart 3004.4_Contract Clause

3004.470-4 Contract clause.

                Subpart 3004.8_Government Contract Files

3004.804 Closeout of contract files.
3004.804-1 Closeout by the office administering the contract.
3004.804-5 Procedures for closing out contract files.
3004.804-570 Supporting closeout documents.

    Authority: 41 U.S.C. 418b (a) and (b).

    Source: 68 FR 67871, Dec. 4, 2003, unless otherwise note.



                    Subpart 3004.1_Contract Execution



3004.103  Contract clause.

    Insert the clause at (FAR) 48 CFR 52.204-1, Approval of Contract, in 
each solicitation where approval to award the resulting contract is 
required above the contracting officer level.



                     Subpart 3004.4_Contract Clause



3004.470-4  Contract clause.

    The contracting officer shall insert a clause substantially the same 
as the

[[Page 69]]

clause at (HSAR) 48 CFR 3052.204-70, Security Requirements for 
Unclassified Information Technology Resources, in solicitations and 
contracts which require submission of an IT Security Plan.



                Subpart 3004.8_Government Contract Files



3004.804  Closeout of contract files.



3004.804-1  Closeout by the office administering the contract.

    (b) The quick closeout procedures under (FAR) 48 CFR 42.708 may be 
used for the settlement of indirect costs under contracts when the 
estimated amount (excluding any fixed fee) of the contract is $3 million 
or less if determined appropriate by the contracting officer.



3004.804-5  Procedures for closing out contract files.



3004.804-570  Supporting closeout documents.

    (a) When applicable and prior to contract closure, the contracting 
officer shall obtain the listed DHS and Department of Defense (DOD) 
forms from the contractor for closeout.
    (1) DHS Form 0700-03, Contractor's Release (e.g., see (FAR) 48 CFR 
52.216-7);
    (2) DHS Form 0700-02, Contractor's Assignment of Refunds, Rebates, 
Credits and Other Amounts (e.g., see (FAR) 48 CFR 52.216-7);
    (3) DHS Form 0700-01, Cumulative Claim and Reconciliation Statement 
(e.g., see (FAR) 48 CFR 4.804-5(a)(13); and
    (4) DD Form 882, Report of Inventions and Subcontracts (e.g., see 
(FAR) 48 CFR 52.227-14).
    (b) The forms listed in this section (see (HSAR) 48 CFR part 3053) 
are used primarily for the closeout of cost-reimbursement, time-and-
materials, and labor-hour contracts. The forms may also be used for 
closeout of other contract types to protect the Government's interest.

[[Page 71]]



                    SUBCHAPTER B_ACQUISITION PLANNING





PART 3005_PUBLICIZING CONTRACT ACTIONS--Table of Contents




                  Subpart 3005.4_Release of Information

Sec.
3005.402 General public.

   Subpart 3005.90_Publicizing Contract Actions for Personal Services 
                               Contracting

3005.9000 Applicability (USCG).

    Authority: 41 U.S.C. 418b (a) and (b).

    Source: 68 FR 67871, Dec. 4, 2003, unless otherwise note.



                  Subpart 3005.4_Release of Information



3005.402  General public.

    Requests for other specific records information shall be processed 
according to the DHS Freedom of Information Act rules and regulations 
(HSAR) 48 CFR 3024.203.



   Subpart 3005.90_Publicizing Contract Actions for Personal Services 
                              Contracting.



3005.9000  Applicability (USCG).

    Contracts awarded by the U.S. Coast Guard using the procedures in 
(HSAR) 48 CFR 3037.104-91 are expressly authorized under section 1091 of 
Title 10 U.S.C. as amended by Public Law 107-296, for the Coast Guard 
and are exempt from the requirements of (FAR) 48 CFR part 5.



PART 3006_COMPETITION REQUIREMENTS--Table of Contents




   Subpart 3006.2_Full and Open Competition After Exclusion of Sources

Sec.
3006.202 Establishing or maintaining alternative sources.

           Subpart 3006.3_Other Than Full and Open Competition

3006.302 Circumstances permitting other than full and open competition.
3006.302-7 Public interest.

                  Subpart 3006.5_Competition Advocates

3006.501 Requirement.
3006.502 Duties and responsibilities.

     Subpart 3006.90_Competition Requirements for Personal Services 
                               Contracting

3006.9000 Applicability (USCG).

    Authority: 41 U.S.C. 418b (a) and (b).

    Source: 68 FR 67871, Dec. 4, 2003, unless otherwise note.



   Subpart 3006.2_Full and Open Competition After Exclusion of Sources



3006.202  Establishing or maintaining alternative sources.

    (b)(1) The HCA is delegated authority to approve a D&F in support of 
a contract action award under the authority of (FAR) 48 CFR 6.202(a). 
Submit D&F in the format per (HSAR) 48 CFR 3001.704.



           Subpart 3006.3_Other Than Full and Open Competition



3006.302  Circumstances permitting other than full and open competition.



3006.302-7  Public interest.

    (c)(1)(ii) Requests shall be prepared in writing by the contracting 
officer, using the format found in (HSAR) 48 CFR 3001.704, and submitted 
through the HCA to the CPO for review and transmittal to the Secretary 
for approval.



                  Subpart 3006.5_Competition Advocates



3006.501  Requirement.

    The DHS Senior Competition Advocate (SCA) is located in the Office 
of the Chief Procurement Officer (OCPO).



3006.502  Duties and responsibilities.

    (a) OE competition advocates will submit an annual report to the 
Departmental Advocate for Competition.

[[Page 72]]



     Subpart 3006.90_Competition Requirements For Personal Services 
                               Contracting



3006.9000  Applicability (USCG).

    Contracts awarded by the U.S. Coast Guard using the procedures in 
(HSAR) 48 CFR 3037.104-91 are expressly authorized under Section 1091 of 
Title 10 U.S.C. as amended, for the Coast Guard and are exempt from the 
competition requirements of (FAR) 48 CFR part 6.



PART 3007_ACQUISITION PLANNING [RESERVED]--Table of Contents






PART 3008_REQUIRED SOURCES OF SUPPLIES AND SERVICES [RESERVED]
--Table of Contents






PART 3009_CONTRACTOR QUALIFICATIONS--Table of Contents




           Subpart 3009.1_Responsible Prospective Contractors

Sec.
3009.104-70 Prohibition on contracts with corporate expatriates.
3009.104-71 General.
3009.104-72 Definitions.
3009.104-73 Special rules.
3009.104-74 Waiver.
3009.104-75 Clause.

         Subpart 3009.4_Debarment, Suspension, and Ineligibility

3009.470 Reserve Officer Training Corps and military recruiting on 
          campus.
3009.470-1 Definition.
3009.470-2 Policy.
3009.470-3 Procedures.
3009.470-4 Contract clause.

   Subpart 3009.5_Organizational and Consultant Conflicts of Interest

3009.507 Solicitation provisions.

    Authority: 41 U.S.C. 418b (a) and (b).

    Source: 68 FR 67871, Dec. 4, 2003, unless otherwise note.



           Subpart 3009.1_Responsible Prospective Contractors



3009.104-70  Prohibition on contracts with corporate expatriates.



3009.104-71  General.

    DHS may not enter into any contract with a foreign incorporated 
entity, which is treated as an inverted domestic corporation under 
subsection (b) of section 835 of the Homeland Security Act, Pub. L. 107-
296.



3009.104-72  Definitions.

    As used in this subpart--
    Expanded Affiliated Group means an affiliated group as defined in 
section 1504(a) of the Internal Revenue Code of 1986 (without regard to 
section 1504(b) of such Code), except that section 1504 of such Code 
shall be applied by substituting `more than 50 percent' for `at least 80 
percent' each place it appears.
    Foreign Incorporated Entity means any entity which is, or but for 
subsection (b) of section 835 of the Homeland Security Act, Pub. L. 107-
296, would be, treated as a foreign corporation for purposes of the 
Internal Revenue Code of 1986.
    Inverted Domestic Corporation. A foreign incorporated entity shall 
be treated as an inverted domestic corporation if, pursuant to a plan 
(or a series of related transactions)--
    (1) The entity completes after the date of enactment of this Act, 
the direct or indirect acquisition of substantially all of the 
properties held directly or indirectly by a domestic corporation or 
substantially all of the properties constituting a trade or business of 
a domestic partnership;
    (2) After the acquisition at least 80 percent of the stock (by vote 
or value) of the entity is held--
    (i) In the case of an acquisition with respect to a domestic 
corporation, by former shareholders of the domestic corporation by 
reason of holding stock in the domestic corporation; or
    (ii) In the case of an acquisition with respect to a domestic 
partnership, by former partners of the domestic partnership by reason of 
holding a capital or profits interest in the domestic partnership; and

[[Page 73]]

    (3) The expanded affiliated group which after the acquisition 
includes the entity does not have substantial business activities in the 
foreign country in which or under the law of which the entity is created 
or organized when compared to the total business activities of such 
expanded affiliated group.
    Person, domestic, and foreign have the meanings given such terms by 
paragraphs (1), (4), and (5) of section 7701(a) of the Internal Revenue 
Code of 1986, respectively.



3009.104-73  Special rules.

    The following special rules shall apply when determining whether a 
foreign incorporated entity should be treated as an inverted domestic 
corporation.
    (a) Certain stock disregarded. For the purpose of treating a foreign 
incorporated entity as an inverted domestic corporation these shall not 
be taken into account in determining ownership:
    (1) Stock held by members of the expanded affiliated group which 
includes the foreign incorporated entity; or
    (2) Stock of such entity which is sold in a public offering related 
to the acquisition described in subsection (b)(1) of section 835 of the 
Homeland Security Act (the Act), Pub. L. 107-296.
    (b) Plan deemed in certain cases. If a foreign incorporated entity 
acquires directly or indirectly substantially all of the properties of a 
domestic corporation or partnership during the 4-year period beginning 
on the date which is after the date of enactment of this Act and which 
is 2 years before the ownership requirements of subsection (b)(2) of the 
Act are met, such actions shall be treated as pursuant to a plan.
    (c) Certain transfers disregarded. The transfer of properties or 
liabilities (including by contribution or distribution) shall be 
disregarded if such transfers are part of a plan a principal purpose of 
which is to avoid the purposes of this section.
    (d) Special rule for related partnerships. For purposes of applying 
subsection (b) to the acquisition of a domestic partnership, except as 
provided in regulations, all domestic partnerships which are under 
common control (within the meaning of section 482 of the Internal 
Revenue Code of 1986) shall be treated as a partnership.
    (e) Treatment of certain rights. (1) Certain rights shall be treated 
as stocks to the extent necessary to reflect the present value of all 
equitable interests incident to the transaction, as follows:
    (i) Warrants;
    (ii) Options;
    (iii) Contracts to acquire stock;
    (iv) Convertible debt instruments;
    (v) Others similar interests.
    (2) Rights labeled as stocks shall not be treated as stocks whenever 
it is deemed appropriate to do so to reflect the present value of the 
transaction or to disregard transactions whose recognition would defeat 
the purpose of section 835 of the Act.



3009.104-74  Waiver.

    (a) The Secretary shall waive subsection (a) of section 835 of Pub. 
L. 107-296 with respect to any specific contract if the Secretary 
determines that the waiver is required in the interest of homeland 
security, or to prevent the loss of any jobs in the United States or 
prevent the Government from incurring any additional costs that 
otherwise would not occur.
    (b) Contractors shall submit waiver requests to the CPO. If a waiver 
is granted, a copy of the approved waiver shall be attached with the bid 
or proposal.



3009.104-75  Clause.

    Insert the provision (HSAR) 48 CFR 3052.209-70, Prohibition on 
Contracts with Corporate Expatriates, in all solicitations and 
contracts.



         Subpart 3009.4_Debarment, Suspension, and Ineligibility



3009.470  Reserve Officer Training Corps and military recruiting on campus.



3009.470-1  Definition.

    Institution of higher education as used in this section, means an 
institution that meets the requirements of 20 U.S.C. 1001 and includes 
all subelements of such an institution.

[[Page 74]]



3009.470-2  Policy.

    (a) Except as provided in paragraph (b) of this subsection, 10 
U.S.C. 983 prohibits the Department of Homeland Security from providing 
funds by contract or grant to an institution of higher education if the 
Secretary of Defense determines that the institution has a policy or 
practice that prohibits or in effect prevents--
    (1) The Secretary of a military department from maintaining, 
establishing, or operating a unit of the Senior Reserve Officer Training 
Corps (ROTC) at that institution;
    (2) A student at that institution from enrolling in a unit of the 
Senior ROTC at another institution of higher education;
    (3) The Secretary of a military department or the Secretary of 
Homeland Security from gaining entry to campuses, or access to students 
on campuses, for purposes of military recruiting; or
    (4) Military recruiters from accessing certain information 
pertaining to students enrolled at that institution.
    (b) The prohibition in paragraph (a) of this subsection does not 
apply to an institution of higher education if the Secretary of Defense 
determines that--
    (1) The institution (and each subelement of that institution) has 
ceased the policy or practice described in paragraph (a) of this 
subsection; or
    (2) The institution involved has a long-standing policy of pacifism 
based on historical religious affiliation.



3009.470-3  Procedures.

    Whenever the Secretary of Defense determines that an institution of 
higher education (including any subelement of such institution) is 
ineligible and the provisions of 10 U.S.C. 983 apply:
    (a) The Secretary of Defense will list the institution on the List 
of Parties Excluded from Federal Procurement and Nonprocurement Programs 
published by the General Services Administration (also see (FAR) 48 CFR 
9.404 and 32 CFR part 216); and
    (b) The Department of Homeland Security--
    (1) Shall not solicit offers from, award contracts to, or consent to 
subcontracts with the institution;
    (2) Shall make no further payments under existing contracts with the 
institution; and
    (3) Shall terminate existing contracts with the institution.



3009.470-4  Contract clause.

    Insert the clause at (HSAR) 48 CFR 3052.3009-71, Reserve Officer 
Training Corps and Military Recruiting on Campus, in all solicitations 
and contracts with institutions of higher education.



   Subpart 3009.5_Organizational and Consultant Conflicts of Interest



3009.507  Solicitation provisions.

    The contracting officer may insert the provision at (HSAR) 48 CFR 
3052.209-72, ``Disclosure of Conflicts of Interest'' in all 
solicitations for negotiated acquisitions, and when simplified 
acquisitions procedures in (FAR) 48 CFR Part 13, are not used. The 
contracting officer shall ensure the conditions enumerated in (FAR) 48 
CFR 9.507-2 warrant inclusion.



PART 3010_MARKET RESEARCH [RESERVED]--Table of Contents






PART 3011_DESCRIBING AGENCY NEEDS--Table of Contents




     Subpart 3011.1_Selecting and Developing Requirements Documents

Sec.
3011.103 Market acceptance.

            Subpart 3011.2_Using and Maintaining Requirements

3011.204-70 Solicitation provisions and contract clauses.
3011.204-90 Solicitation provisions and contract clause (USCG).

                    Subpart 3011.5_Liquidated Damages

3011.501 Policy.

                Subpart 3011.6_Priorities and Allocations

3011.602 General.

    Authority: 41 U.S.C. 418b (a) and (b).

    Source: 68 FR 67871, Dec. 4, 2003, unless otherwise note.

[[Page 75]]



     Subpart 3011.1_Selecting and Developing Requirements Documents



3011.103  Market acceptance.

    (a) Contracting officers may act on behalf of the head of the agency 
in this subpart only. Contracting officers may, under appropriate 
circumstances, require offerors to make the required demonstrations.



       Subpart 3011.2_Using and Maintaining Requirements Documents



3011.204-70  Solicitation provisions and contract clauses.

    The contracting officer shall insert the clause at (HSAR) 48 CFR 
3052.211-70, Index for Specifications, when an index or table of 
contents may be furnished with the specification.



3011.204-90  Solicitation provision and contract clause (USCG).

    (a) For U.S. Coast Guard contracts, the contracting officer shall 
insert the USCG clause at (HSAR) 48 CFR 3052.211-90, Bar Coding 
Requirement, (also see (HSAR) 48 CFR 3013.302-70) when the bar coding of 
supplies is necessary.
    (b) See (HSAR) 48 CFR 3013.302-590 for a provision which is required 
when the USCG clause at HSAR 3052.211-90, Bar Coding Requirement, is 
used with simplified acquisition procedures.



                    Subpart 3011.5_Liquidated Damages



3011.501  Policy.

    (d) The HCA may reduce or waive the amount of liquidated damages 
assessed under a contract, if the Commissioner, Financial Management 
Service, or designee approves.



                Subpart 3011.6_Priorities and Allocations



3011.602  General.

    (c) The following DHS OEs may assign priority ratings on contracts 
and orders placed with contractors to acquire products, materials, and 
services under the Defense Priorities and Allocations System (DPAS) 
regulations (15 CFR part 700):
    (1) The U.S. Coast Guard in support of certified national defense 
related programs; and
    (2) The Federal Emergency Management Agency in support of emergency 
preparedness activities.



PART 3012_ACQUISITION OF COMMERCIAL ITEMS [RESERVED]--Table of Contents




[[Page 77]]



            SUBCHAPTER C_CONTRACT METHODS AND CONTRACT TYPES





PART 3013_SIMPLIFIED ACQUSITION PROCEDURES--Table of Contents




                        Subpart 3013.1_Procedures

Sec.
3013.106 Soliciting competition, evaluation of quotations or offers, 
          award and documentation.
3013.106-190 Soliciting competition (USCG).

              Subpart 3013.3_Simplified Acquisition Methods

3013.302 Purchase orders.
3013.302-590 Clauses (USCG).

        Subpart 3013.70_Special Streamlined Acquisition Authority

3013.7000 General.
3013.7001 Delegations.
3013.7002 Reporting requirements.
3013.7003 Micro-purchase authority.
3013.7004 Simplified acquisition authority.
3013.7005 Test program for certain commercial items.

    Authority: 41 U.S.C. 418b (a) and (b).

    Source: 68 FR 67871, Dec. 4, 2003, unless otherwise note.



                        Subpart 3013.1_Procedures



3013.106  Soliciting competition, evaluation of quotations or offers, 
award and documentation.



3013.106-190  Soliciting competition (USCG).

    For the U.S. Coast Guard, the contracting officer shall insert the 
USCG provision at (HSAR) 48 CFR 3052.213-90, Evaluation Factor for Coast 
Guard Performance of Bar Coding Requirement, in requests for quotations 
when the USCG clause at (HSAR) 48 CFR 3052.211-90, Bar Coding 
Requirement, is used with simplified acquisition procedures.



              Subpart 3013.3_Simplified Acquisition Methods



3013.302  Purchase orders.



3013.302-590  Clauses (USCG).

    For the U.S. Coast Guard, the contracting officer shall insert the 
USCG clause at (HSAR) 48 CFR 3052.211-90, Bar Coding Requirement, in 
requests for quotations and purchase orders issued by the Inventory 
Control Points when bar coding of supplies is necessary.



        Subpart 3013.70_Special Streamlined Acquisition Authority



3013.7000  General.

    (a) The Secretary may use special streamlined acquisition authority 
set forth in Public Law 107-296, section 833, with respect to any 
procurement made during the period beginning on November 25, 2002 and 
ending September 30, 2007 where if the Secretary determines in writing 
the mission of the Department (described in Pub. L. 107-296, section 
101) would be seriously impaired without the use of such authorities.
    (b) The Secretary may deem any item or service to be a commercial 
item for the purpose of federal procurement laws for procurements 
described in (HSAR) 48 CFR 3013.7005.



3013.7001  Delegations.

    The Secretary may delegate this authority to an officer of the 
Department who is appointed by the President with the advice and consent 
of the Senate. Delegations of this authority are discussed in HSAM 3013.



3013.7002  Reporting requirements.

    (a) The Secretary shall submit to the Committee on Government Reform 
of the House of Representatives and the Committee on Governmental 
Affairs of the Senate--
    (1) Notification of such determination; and
    (2) The justification for such determination.

[[Page 78]]

    (b) This report shall be submitted no later than seven days after 
the date of any determination. Reporting requirements and procedures are 
discussed in HSAM 3013.



3013.7003  Micro-purchase authority.

    (a) When the streamlined acquisition authority is exercised, the 
micro-purchase threshold is raised to $7,500.
    (b) The authority in this section may be exercised only by 
individuals designated by the Secretary. The number of employees shall 
be--
    (1) Fewer than the number of employees of the Department that are 
authorized to make purchases without obtaining competitive quotations.
    (2) Sufficient to ensure the geographic dispersal of the 
availability of the use of the procurement authority under such 
paragraph at locations reasonably considered to be potential terrorist 
targets; and
    (3) Sufficiently limited to allow for careful monitoring of 
employees designated under each paragraph.
    (c) Procurements made under this authority shall be subject to 
review by a designated supervisor on not less than a monthly basis. The 
supervisor responsible for the review shall be responsible for no more 
than seven employees making procurements under this authority.



3013.7004  Simplified acquisition authority.

    When the streamlined acquisition authority is exercised, the 
simplified acquisition threshold shall be:
    (a) $200,000 in the case of a contract to be awarded and performed, 
or purchase to be made, within the United States; and
    (b) $300,000 in the case of a contract to be awarded and performed, 
or purchase to be made, outside of the United States.



3013.7005  Test program for certain commercial items.

    When the streamlined authority is exercised, the $5,000,000 
limitation provided in (FAR) 48 CFR subpart 13.5 is increased to 
$7,500,000.



PART 3014_SEALED BIDDING [RESERVED]--Table of Contents






PART 3015_CONTRACTING BY NEGOTIATION--Table of Contents




   Subpart 3015.2_Solicitation and Receipt of Proposals andInformation

Sec.
3015.204-3 Contract clauses.
3015.207-70 Handling proposals and information.

                     Subpart 3015.4_Contract Pricing

3015.404-470 Payment of profit or fee.

                  Subpart 3015.6_Unsolicited Proposals

3015.602 Policy.
3015.603 General.
3015.604 Agency points of contact.
3015.606 Agency procedures.
3015.606-1 Receipt and initial review.
3015.606-2 Evaluation.

    Authority: 41 U.S.C. 418b (a) and (b).

    Source: 68 FR 67871, Dec. 4, 2003, unless otherwise note.



  Subpart 3015.2_Solicitation and Receipt of Proposals and Information



3015.204-3  Contract clauses.

    The contracting officer shall insert clause (HSAR) 48 CFR 3052.215-
70, Key Personnel or Facilities, in solicitations and contracts when the 
selection for award is substantially based on the offeror's possession 
of special capabilities regarding personnel or facilities.



3015.207-70  Handling proposals and information.

    (b) Proposals and information may be released outside the Government 
for evaluation and similar purposes if qualified personnel are not 
available to thoroughly evaluate or analyze proposals or information. 
The contracting officer shall document the file in such cases.



                     Subpart 3015.4_Contract Pricing



3015.404-470  Payment of profit or fee.

    The contracting officer shall not pay profit or fee on undefinitized 
contracts

[[Page 79]]

or undefinitized contract modifications. Any profit or fee earned shall 
be paid after the contract or modification is definitized.



                  Subpart 3015.6_Unsolicited Proposals



3015.602  Policy.

    The Department of Homeland Security (DHS) encourages new and 
innovative proposals and ideas that will sustain or enhance the DHS 
mission, which is stipulated in the Homeland Security Act of 2002, Pub. 
L. 107-296.



3015.603  General.

    (a) Costs associated with the time and effort to prepare a proposal 
are solely the responsibility of and assumed by the offeror that is 
submitting the proposal.



3015.604  Agency points of contact.

    (a) The DHS does not have a central clearinghouse for distributing 
information or assistance regarding unsolicited proposals. Each HCA is 
responsible for disseminating the information required at (FAR) 48 CFR 
15.604(a). General information concerning DHS's scope of 
responsibilities and functions is available at http://www.dhs.gov/
dhspublic/.



3015.606  Agency procedures.

    (a) The agency authority to establish procedures for receiving, 
reviewing and evaluating, and timely disposing of unsolicited proposals, 
consistent with the requirements of (FAR) 48 CFR 15.6 and this subpart, 
is delegated to each HCA.
    (b) The agency authority to establish points of contact (see (FAR) 
48 CFR 15.604) to coordinate the receipt and handling of unsolicited 
proposals is delegated to each HCA. Contracting offices are designated 
as the receiving point for unsolicited proposals. Persons within DHS 
(e.g., technical personnel) who receive proposals shall forward them to 
their cognizant contracting office.



3015.606-1  Receipt and initial review.

    (a) The agency contact point shall make an initial review 
determination within seven calendar days after receiving a proposal.
    (b) If the proposal meets the requirements at (FAR) 48 CFR 15.606-
1(a), the agency contact point shall acknowledge receipt within three 
calendar days after making the initial review determination and advise 
the offeror of the general timeframe for completing the evaluation.
    (c) If the proposal does not meet the requirements of (FAR) 48 CFR 
15.606-1(a), the agency contact point shall return the proposal within 
three calendar days after making the determination. The offeror shall be 
informed, in writing, of the reasons for returning the proposal.



3015.606-2  Evaluation.

    (a) Comprehensive evaluations should be completed within sixty 
calendar days after making the initial review determination. If 
additional time is needed, then the agency contact point shall advise 
the offeror accordingly and provide a new evaluation completion date. 
The evaluating office shall neither reproduce nor disseminate the 
proposal to other offices without the consent of the contracting office 
from which the proposal was received for evaluation. If the evaluating 
office requires additional information from the offeror, the evaluator 
shall convey this request to the responsible contracting office. The 
evaluator shall not directly contact the proposal originator.
    (b) If the evaluators recommend accepting the proposal, the 
responsible contracting officer shall ensure compliance with all of the 
requirements of (FAR) 48 CFR 15.607.



PART 3016_TYPES OF CONTRACTS--Table of Contents




                  Subpart 3016.2_Fixed-Price Contracts

Sec.
3016.203 Fixed-price contracts with economic price adjustment.
3016.203-4 Contract clauses.
3016.203-470 Solicitation provision.

                   Subpart 3016.4_Incentive Contracts

3016.406 Contract clauses.

              Subpart 3016.5_Indefinite-Delivery Contracts

3016.505 Ordering.

[[Page 80]]

   Subpart 3016.6_Time-and-Materials, Labor-Hour, and Letter Contracts

3016.603 Letter contracts.
3016.603-4 Contract clauses.

    Authority: 41 U.S.C. 418b (a) and (b).

    Source: 68 FR 67871, Dec. 4, 2003, unless otherwise note.



                  Subpart 3016.2_Fixed-Price Contracts



3016.203  Fixed price contracts with economic price adjustments.



3016.203-4  Contract clauses.

    (d)(2) Any clause using this method shall be prepared and approved 
by the contracting officer.



3016.203-470  Solicitation provision.

    The contracting officer shall insert a provision substantially the 
same as (HSAR) 48 CFR 3052.216-70, Evaluation of Offers Subject to an 
Economic Price Adjustment Clause, in solicitations containing an 
economic price adjustment clause.



                   Subpart 3016.4_Incentive Contracts



3016.406  Contract clauses.

    (e)(1)(i) The contracting officer shall insert a clause 
substantially the same as (HSAR) 48 CFR 3052.216-71, Determination of 
Award Fee, in solicitations and contracts that includes an award fee.
    (ii) The contracting officer shall insert a clause substantially the 
same as (HSAR) 48 CFR 3052.216-72, Performance Evaluation Plan, in all 
solicitations and contracts that includes an award fee.
    (iii) The contracting officer shall insert a clause substantially 
the same as (HSAR) 48 CFR 3052.216-73, Distribution of Award Fee, in all 
solicitations and contracts that includes an award fee.



              Subpart 3016.5_Indefinite-Delivery Contracts



3016.505  Ordering.

    (b)(5) The OE Competition Advocate is designated as the OE Task and 
Delivery Order Ombudsman, unless otherwise provided in OE procedures.
    (i) If any corrective action is needed after reviewing complaints 
from contractors on task and delivery order contracts, the OE Ombudsman 
shall provide a written determination of such action to the contracting 
officer.
    (ii) Issues that cannot be resolved within the OE, shall be 
forwarded to the DHS Task and Delivery Order Ombudsman for review and 
resolution.



   Subpart 3016.6_Time-and-Materials, Labor-Hour, and Letter Contracts



3016.603  Letter contracts.



3016.603-4  Contract clauses.

    The contracting officer shall insert a clause substantially the same 
as (HSAR) 48 CFR 3052.216-74, Settlement of Letter Contract, in all 
definitized letter contracts.



PART 3017_SPECIAL CONTRACTING METHODS--Table of Contents




                         Subpart 3017.2_Options

Sec.
3017.202 Use of options.

                Subpart 3017.4_Leader Company Contracting

3017.402 Limitations.

          Subpart 3017.70_Energy Savings Performance Contracts

3017.7000 Policy.

 Subpart 3017.90_Fixed Price Contracts for Vessel Repair, Alteration or 
                               Conversion

3017.9000 Clauses (USCG).

    Authority: 41 U.S.C. 418b (a) and (b).

    Source: 68 FR 67871, Dec. 4, 2003, unless otherwise note.



                         Subpart 3017.2_Options.



3017.202  Use of options.

    (a) Contracting officers shall not use unpriced options.

[[Page 81]]



                Subpart 3017.4_Leader Company Contracting



3017.402  Limitations.

    (a)(4) Submit requests per (HSAR) 48 CFR 3001.7000(a).



          Subpart 3017.70_Energy Savings Performance Contracts



3017.7000  Policy.

    DHS and its OEs may enter into Energy Savings Performance Contracts 
under 42 U.S.C. 8287, as amended subject to the requirements of 10 CFR 
part 436. Proposed contracts under this section shall be coordinated 
with the CPO.



 Subpart 3017.90_Fixed Price Contracts for Vessel Repair, Alteration or 
                               Conversion



3017.9000  Clauses (USCG).

    For the U.S. Coast Guard, the following clauses are to be used in 
specific solicitations and contracts:
    (a) The clauses in (HSAR) 48 CFR 3052.217-90 through (HSAR) 48 CFR 
3052.217-93 and (HSAR) 48 CFR 3052.217-95 through (HSAR) 48 CFR 
3052.217-99 shall be included and clause (HSAR) 48 CFR 3052.217-94 may 
be included in sealed bid fixed-price solicitations and contracts for 
vessel repair, alteration, or conversion which are to be performed 
within the United States, its possessions, or Puerto Rico. The 
contracting officer may, in whole or in part (such as after incidents), 
increase the dollar amounts in the clause at (HSAR) 48 CFR 3052.217-
95(b)(6) and (c)(1) consistent with contract size, inflation, and other 
circumstances.
    (b) Unless inappropriate, the clauses in (HSAR) 48 CFR 3052.217-90 
through (HSAR) 48 CFR 3052.217-93 and (HSAR) 48 CFR 3052.217-95 through 
(HSAR) 48 CFR 3052.217-99 should be included and (HSAR) 48 CFR 3052.217-
94 may be included in negotiated solicitations and contracts to be 
performed outside the United States. The contracting officer may, in 
whole or in part (such as after incidents), increase the dollar amounts 
in the clause at (HSAR) 48 CFR 3052.217-95(b)(6) and (c)(1) consistent 
with contract size, inflation, and other circumstances.
    (c) The clause at (HSAR) 48 CFR 3052.217-100, Guarantee, shall be 
used where general guarantee provisions are deemed desirable by the 
contracting officer.
    (1) When inspection and acceptance tests will afford full protection 
to the Government in ascertaining conformance to specifications and the 
absence of defects and deficiencies, no guarantee clause for that 
purpose shall be included in the contract.
    (2) The customary guarantee period, to be inserted in the first 
sentence of the clause at (HSAR) 48 CFR 3052.217-100, Guarantee, is 60 
days. However, in certain instances, the contracting officer may desire 
to include a clause in a contract for a guarantee period of more than 60 
days. In such instances:
    (i) Where, after full inquiry, it has been determined that such 
longer guarantee period will not involve increased costs, a longer 
guarantee period may be substituted by the contracting officer for the 
usual 60 days; or
    (ii) Where the full inquiry discloses that such longer guarantee 
period will involve, or is reasonably expected to involve, increased 
costs, such facts and the reasons for the need for such longer period 
shall be set forth in letter form to the COCO, requesting approval for 
use of guarantee period in excess of 60 days. Upon approval, the longer 
period may be inserted by the contracting officer in the first sentence 
of the clause at (HSAR) 48 CFR 3052.217-100, Guarantee.



PART 3018 [RESERVED]--Table of Contents




[[Page 83]]



                   SUBCHAPTER D_SOCIOECONOMIC PROGRAMS





PART 3019_SMALL BUSINESS PROGRAMS--Table of Contents




                         Subpart 3019.2_Policies

Sec.
3019.201 General policy.

        Subpart 3019.7_The Small Business Subcontracting Program

3019.705 Responsibilities of the contracting officer under the 
          subcontracting assistance program.
3019.705-1 General support for the program.
3019.708 Contract clauses.
3019.708-70 DHS solicitation and contract clauses.

    Authority: 41 U.S.C. 418b (a) and (b).

    Source: 68 FR 67871, Dec. 4, 2003, unless otherwise note.



                         Subpart 3019.2_Policies



3019.201  General policy.

    (d) The Director, Office of Small and Disadvantaged Business 
Utilization is responsible for the implementation and execution of the 
small and small disadvantaged business programs required by the Small 
Business Act.



        Subpart 3019.7_The Small Business Subcontracting Program



3019.705  Responsibilities for the contracting officer under the 
subcontracting program.



3019.705-1  General support for the program.

    Contracting officers will consider making the submission of a 
subcontracting plan part of the evaluation criteria. Contracting 
officers may also consider an offerors past performance in previous 
subcontracting plan goals and efforts to achieve those goals.



3019.708  Contract clauses.



3019.708-70  DHS solicitation and contract clauses.

    (a) The contracting officer shall insert the clause at (HSAR) 48 CFR 
3052.219-70, Small Business and Small Disadvantaged Business 
Subcontracting Reporting, in solicitations and contracts containing the 
clause at (FAR) 48 CFR 52.219-9.
    (b) The contracting officer shall insert the clause at (HSAR) 48 CFR 
3052.219-71, DHS Mentor-Prot[eacute]g[eacute] Program in all 
solicitations that anticipate the need for a subcontracting plan.
    (c) The contracting officer shall insert the clause at (HSAR) 48 CFR 
3052.219-72, Evaluation of Prime Contractor Participation in the Mentor-
Prot[eacute]g[eacute] Program, in all solicitations containing (HSAR) 48 
CFR 3052.219-71, Mentor-Prot[eacute]g[eacute] Program and (FAR) 48 CFR 
52.219-9 Small Business Subcontracting Plan.



PART 3020_3021 [RESERVED]--Table of Contents






PART 3022_APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS
--Table of Contents




                   Subpart 3022.1_Basic Labor Policies

Sec.
3022.101 Labor relations.
3022.101-70 Admittance of union representatives to DHS installations.
3022.101-71 Contract clauses.

   Subpart 3022.4_Labor Standards for Contracts Involving Construction

3022.406 Administration and enforcement.
3022.406-9 Withholding from or suspension of contract payments.

                   Subpart 3022.90_ Local Hire (USCG)

3022.9000 Policy (USCG).
3022.9001 Contract clause (USCG).

    Authority: 41 U.S.C. 418b (a) and (b).

    Source: 68 FR 67871, Dec. 4, 2003, unless otherwise note.

[[Page 84]]



                   Subpart 3022.1_Basic Labor Policies



3022.101  Labor relations.



3022.101-70  Admittance of union representatives to DHS installations.

    (a) It is the policy of DHS to admit labor union representatives of 
contractor employees to DHS installations to visit work sites and 
transact labor union business with contractors, their employees, or 
union stewards pursuant to existing union collective bargaining 
agreements. Their presence shall not interfere with the contractor's 
work progress under a DHS contract nor violate safety or security 
regulations that may be applicable to persons visiting the installation. 
Union representatives will not be permitted to conduct meetings, collect 
union dues, or make speeches concerning union matters while visiting a 
work site.
    (b) Whenever a union representative is denied entry to a work site, 
the person denying entry shall make a written report to the DHS labor 
coordinator and OE labor advisor, if any, within two working days after 
the request for entry is denied. The report shall include the reason(s) 
for the denial, the name of the representative denied entry, the union 
affiliation and number, and the name and title of the person that denied 
the entry.



3022.101-71  Contract clauses.

    (a) The contracting officer, may, when applicable, insert the clause 
at (HSAR) 48 CFR 3052.222-70, Strikes or Picketing Affecting Timely 
Completion of the Contract Work, in solicitations and contracts.
    (b) The contracting officer may, when applicable, insert the clause 
at (HSAR) 48 CFR 3052.222-71, Strikes or Picketing Affecting Access to a 
DHS Facility, in solicitations and contracts.



   Subpart 3022.4_Labor Standards for Contracts Involving Construction



3022.406  Administration and enforcement.



3022.406-9  Withholding from or suspension of contract payments.

    (c) Disposition of contract payments withheld or suspended.
    (1) Forwarding wage underpayments to the Comptroller General. The 
contracting officer shall ensure that a completed DHS Form 0700-04, 
Employee Claim for Wage Restitution, is obtained from each employee 
claiming restitution under the contract. The Comptroller General (Claims 
Division) shall receive this form with a completed SF 1093, Schedule of 
Withholding Under the Davis-Bacon Act and/or the Contract Work Hours and 
Safety Standards Act, before payment can be made to the employee.



                    Subpart 3022.90_Local Hire (USCG)



3022.9000  Policy (USCG).

    As required by 14 U.S.C. 666, the U.S. Coast Guard shall include a 
provision for local hire in each contract for construction or services 
to be performed in whole or in part in a State that has an unemployment 
rate in excess of the national average rate of unemployment as 
determined by the Secretary of Labor.



3022.9001  Contract clause (USCG).

    For the U.S. Coast Guard, the contracting officer shall insert the 
USCG clause at (HSAR) 48 CFR 3052.222-90, Local Hire Provision, in all 
solicitations and contracts as stated in (HSAR) 48 CFR 3022.9000.

[[Page 85]]



PART 3023_ENVIRONMENT, ENERGY AND WATER EFFICIENCY, RENEWABLE ENERGY 

TECHNOLOGIES, OCCUPATIONAL SAFETY, AND DRUG-FREE WORKPLACE
--Table of Contents




  Subpart 3023.3_Hazardous Material Identification and Material Safety 
                                  Data

Sec.
3023.303 Contract clause.

                   Subpart 3023.5_Drug-Free Workplace

3023.501 Applicability.
3023.506 Suspension of payments, termination of contract, and debarment 
          and suspension actions.

Subpart 3023.10_Federal Compliance with Right-to-Know Laws and Pollution 
                         Prevention Requirements

3023.1002 Applicability.

         Subpart 3023.90_Safety Requirements for USCG Contracts

3023.9000 Contract Clause (USCG).

    Authority: 41 U.S.C. 418b (a) and (b).

    Source: 68 FR 67871, Dec. 4, 2003, unless otherwise note.



  Subpart 3023.3_Hazardous Material Identification and Material Safety 
                                  Data



3023.303  Contract clause.

    The contracting officer shall insert the clause at (HSAR) 48 CFR 
3052.223-70, Removal or Disposal of Hazardous Substances--Applicable 
Licenses and Permits, in solicitations and contracts involving the 
removal or disposal of hazardous waste material.



                   Subpart 3023.5_Drug-Free Workplace



3023.501  Applicability.

    (d) The head of the law enforcement organizational element may 
determine that (FAR) 48 CFR 23.501 does not apply. This authority may 
not be redelegated.



3023.506  Suspension of payments, termination of contract, and debarment 
and suspension actions.

    (e) Submit requests per (HSAR) 48 CFR 3001.7000(b).



Subpart 3023.10_Federal Compliance With Right-to-Know Laws and Pollution 
                              Requirements



3023.1002  Applicability.

    DHS MD 5110, Environmental Compliance, provides guidance and 
direction for compliance with environmental laws.



         Subpart 3023.90_Safety Requirements for USCG Contracts



3023.9000  Contract clause (USCG).

    For the U.S. Coast Guard, where all or part of a contract will be 
performed on Government-owned or leased property, the contracting 
officer shall insert the clause at (HSAR) 48 CFR 3052.223-90, Accident 
and Fire Reporting.



PART 3024_PROTECTION OF PRIVACY AND FREEDOM OF INFORMATION
--Table of Contents




             Subpart 3024.1_Protection of Individual Privacy

Sec.
3024.102-70 General.

                Subpart 3024.2_Freedom of Information Act

3024.203 Policy.

    Authority: 41 U.S.C. 418b (a) and (b).

    Source: 68 FR 67871, Dec. 4, 2003, unless otherwise note.



             Subpart 3024.1_Protection of Individual Privacy



3024.102-70  General.

    Procedures for implementing the Privacy Act of 1974 are contained in 
Departmental regulations under 6 CFR part 5, subpart B, Privacy Act.

[[Page 86]]



                Subpart 3024.2_Freedom of Information Act



3024.203  Policy.

    (a) The Department's implementation of the Freedom of Information 
Act is codified in regulations 6 CFR part 5, subpart B, FOIA. 
Information request concerning awards beyond those routinely handled by 
contracting officers (e.g., identification of successful offerors, 
public announcements, debriefings, surety notices under HSAR 3028.106-6) 
shall be submitted to the FOIA Office of the Organizational Element 
making the award. The FOIA office for the DHS Office of Operations only, 
is Departmental Disclosure Officer (DDO), DHS, Washington, DC 20528 or 
foia@dhs.gov.
    (b) See (FAR) 48 CFR 15.207(b) on safeguarding proposals.



PART 3025_FOREIGN ACQUISITION [RESERVED]--Table of Contents






PART 3026_OTHER SOCIOECONOMIC PROGRAMS [RESERVED]--Table of Contents






PART 3027_PATENTS, DATA, AND COPYRIGHTS--Table of Contents




                         Subpart 3027.2_Patents

Sec.
3027.205 Adjustment of royalties.
3027.208 Use of patented technology under the North American Free Trade 
          Agreement.

         Subpart 3027.3_Patent Rights Under Government Contracts

3027.304-1 General.
3027.304-5 Appeals.
3027.305-4 Administration of Patent Rights Clause.
3027.306 Licensing background patent rights to third parties.

              Subpart 3027.4_Rights in Data and Copyrights

3027.404 Basic Rights in Data clause.
3027.409 Solicitation provisions and contract clauses.

    Authority: 41 U.S.C. 418b (a) and (b).

    Source: 68 FR 67871, Dec. 4, 2003, unless otherwise note.



                         Subpart 3027.2_Patents



3027.205  Adjustment of royalties.

    (a) Reports shall be made to OE legal counsel. Contracting Officers 
shall coordinate actions with the COCO and HCA.



3027.208  Use of patented technology under the North American Free Trade 
Agreements.

    (f) Contracting officers shall ensure compliance.



         Subpart 3027.3_Patent Rights under Government Contracts



3027.304-1  General.

    Interim and final invention reports and notification of all 
subcontracts for experimental, developmental, or research work (FAR) 48 
CFR 27.304-1(e)(2)(ii) may be submitted on DD Form 882, Report of 
Inventions and Subcontracts.



3027.304-5  Appeals.

    (a) Contracting officers are authorized to take the specified 
actions.
    (b) Appeals shall be made to the CPO.



3027.305  Administration of Patent Rights Clauses.



3027.305-4  Conveyance of invention rights acquired by the Government.

    The contracting officer shall ensure that solicitations and 
contracts which include a patent rights clause include a means for the 
contractor to report inventions made in the course of contract 
performance and at contract completion. This requirement may be 
fulfilled by requiring the contractor to submit a DD Form 882, Report of 
Inventions and Subcontract.



3027.306  Licensing background patent rights to third parties.

    (b) The CPO shall make the required determinations and notifications 
under this subpart.

[[Page 87]]



              Subpart 3027.4_Rights in Data and Copyrights



3027.404  Basic rights in data clause.

    (f)(1)(iii) The DHS will use Alternate IV of the (FAR) 48 CFR clause 
52.227-14 in all contracts containing the basic clause, unless the HCA 
approves an exclusion. Approval at a level above the contracting officer 
is required for the contract to exclude items or categories of data from 
Alternative IV.



3027.409  Solicitation provisions and contract clauses.

    Alternate IV of the (FAR) 48 CFR clause 52.227-14 shall be included 
in solicitations and contracts containing the basic clause unless the 
HCA approves an exclusion. Additional non-conflicting alternates may be 
used.



PART 3028_BONDS AND INSURANCE--Table of Contents




          Subpart 3028.1_Bonds and Other Financial Protections

Sec.
3028.106 Administration.
3028.106-6 Furnishing information.
3028.106-70 Execution and administration of bonds.
3028.106-490 Contract clause (USCG).

                        Subpart 3028.3_Insurance

3028.306 Insurance under fixed-price contracts.
3028.306-90 Contracts for lease of aircraft (USCG).
3028.307 Insurance under cost-reimbursement contracts.
3028.307-1 Group insurance plans.
3028.310 Contract clause for work on a Government installation.
3028.310-70 Contract clause.
3028.311 Solicitation provision and contract clause on liability 
          insurance under cost-reimbursement contracts.
3028.311-1 Contract clause.

    Authority: 41 U.S.C. 418b (a) and (b).

    Source: 68 FR 67871, Dec. 4, 2003, unless otherwise note.



          Subpart 3028.1_Bonds and Other Financial Protections



3028.106  Administration.



3028.106-6  Furnishing information.

    (b) The contracting officer shall, upon request, furnish the name 
and address of the prime contractor's surety or sureties to employees, 
suppliers, and subcontractors having a contractual or employment 
relationship with prime contractors, subcontractors or suppliers. When 
furnishing surety information, the inquirer may also be informed that:
    (1) Persons believing that they have legal remedies under the Miller 
Act are cautioned to consult their own legal advisor regarding the 
proper steps to take to obtain remedies.
    (2) On construction contracts exceeding $2,000, if the contracting 
officer is informed (through routine compliance checking, a complaint, 
or a request for information) that a laborer, mechanic, apprentice, 
trainee, watchman, or guard employed by the contractor or subcontractor 
at any tier may have been paid wages less than those required by the 
applicable labor standards provisions of the contract, the contracting 
officer shall promptly initiate an investigation in accordance with 
(FAR) 48 CFR Subpart 22.4, irrespective of the employee's rights under 
the Miller Act. When an employee's request for information is involved, 
the contracting officer shall inform the inquirer that such 
investigation will be made. Such investigation is required pursuant to 
the provisions of the Davis-Bacon Act, Contract Work Hours and Safety 
Standards Act, and Copeland (Anti-Kickback) Act for assuring proper 
payment to such employees.
    (c) When furnishing a copy of a payment bond and contract in 
accordance with (FAR) 48 CFR 28.106-6(c), the requirement for a copy of 
the contract may be satisfied by furnishing a machine-duplicate copy of 
the contractor's first pages which show the contract number and date, 
the contractor's name and signature, the contracting officer's 
signature, and the description of the contract work. The

[[Page 88]]

contracting officer furnishing the copies shall place the statement 
``Certified to be a true and correct copy'' followed by a signature, 
title and name of the OE. The fee for furnishing the requested certified 
copies shall be determined according to the DHS Freedom of Information 
Act regulation, 6 CFR part 5, subpart B, FOIA.



3028.106-70  Execution and administration of bonds.

    (a) The contracting officer shall notify the surety within 30 days, 
of the contractor's failure to perform in accordance with the terms of 
the contract.
    (b) When a partnership is a principal on a bond, the names of all 
the members of the firm shall be listed in the bond following the name 
of the firm, and the phrase ``a partnership composed of.'' If a 
principal is a corporation, the state of incorporation shall also appear 
on the bond.
    (c) Performance or payment bond(s) other than an annual bond shall 
not predate the contract to which it pertains.
    (d) Bonds may be filed with the original contract to which they 
apply, or all bonds can be separately maintained and reviewed quarterly 
for validity. If separately maintained, each contract file shall cross-
reference the applicable bonds.



3028.106-490  Contract clause (USCG).

    For the U.S. Coast Guard, the contracting officer shall insert the 
USCG clause at (HSAR) 48 CFR 3052.228-90. Notification of Miller Act 
Payment Bond Protection, in solicitation and contracts, and shall 
require its first-tier subcontractors to insert the clause in all of 
their subcontracts, when payment bonds are required.



                        Subpart 3028.3_Insurance



3028.306  Insurance under fixed-price contracts.



3028.306-90  Contracts for lease of aircraft (USCG).

    (a) For the U.S. Coast Guard, the contracting officer shall insert 
the clauses at (HSAR) 48 CFR 3052.228-91 through 3052.228-93, unless 
otherwise indicated by the specific instructions for their use, in any 
contract for the lease of aircraft (including aircraft used in out-
service flight training).
    (b) For the U.S. Coast Guard, the contracting officer shall insert 
the clause at (HSAR) 48 CFR 3052.228-91, Loss of or Damage to Leased 
Aircraft, in any contract for the lease of aircraft, except in the 
following circumstances:
    (1) When the hourly rental rate does not exceed $250 and the total 
rental cost for any single transaction is not in excess of $2,500:
    (2) When the cost of hull insurance does not exceed 10 percent of 
the contract rate; or
    (3) When the lessor's insurer does not grant a credit for uninsured 
hours, thereby preventing the lessor from granting the same to the 
Government.
    (c) For the U.S. Coast Guard, the contracting officer shall insert 
the clause at (HSAR) 48 CFR 3052.228-92, Fair Market Value of Aircraft, 
when fair market value of the aircraft can be determined.
    (d) 49 U.S.C. 44112, as amended, provides that no lessor of an 
aircraft under a bona fide lease of 30 days or more shall be liable by 
reason of his interest as lessor or title-holder of the aircraft for any 
injury to or death of persons, or damage to or loss of property, unless 
such aircraft is in the actual possession or control of such person at 
the time of such injury, death, damage or loss. On short-term or 
intermittent-use leases, however, the owner may be liable for damage 
caused by operation of the aircraft. It is usual for the aircraft owner 
to retain insurance covering this liability during the term of such 
lease. Such insurance can, often for little or no increase in premium, 
be made to cover the Government's exposure to liability as well. In 
order to take advantage of this coverage, the Risks and Indemnities 
clause at (HSAR) 48 CFR 3052.228-93 prescribed in paragraph (d)(1) of 
this section shall be used.
    (1) For the U.S. Coast Guard, the contracting officer shall insert 
the clause at (HSAR) 48 CFR 3052.228-93, Risk and Indemnities, in any 
contract for out-service flight training or for the lease of aircraft 
when the Government will

[[Page 89]]

have exclusive use of the aircraft for a period of less than thirty 
days.
    (2) For the U.S. Coast Guard, any contract for out-service flight 
training shall include a clause in the contract schedule stating 
substantially that the contractor's personnel shall at all times during 
the course of the training be in command of the aircraft and that at no 
time shall other personnel be permitted to take command of the aircraft.



3028.307  Insurance under cost-reimbursement contracts.



3028.307-1  Group insurance plans.

    Plans shall be submitted to the contracting officer, who must obtain 
the advice of legal counsel.



3028.310  Contract clause for work on a Government installation.



3028.310-70  Contract clause.

    Insert a clause substantially similar to (HSAR) 48 CFR 3052.228-70, 
``Insurance,'' in all solicitations and contracts that contain the 
clause at (FAR) 47 CFR 52.228-5.



3028.311  Solicitation provision and contract clause on liability insurance 
under cost-reimbursement contracts.



3028.311-1  Contract clause.

    Insert a clause substantially similar to (HSAR) 48 CFR 3052.228-70, 
``Insurance,'' in all solicitations and contracts that contain the 
clause at (FAR) 48 CFR 52.228-7, unless waived by an official one level 
above the contracting officer.

[[Page 91]]



              SUBCHAPTER E_GENERAL CONTRACTING REQUIREMENTS





PART 3029_TAXES [RESERVED]--Table of Contents






PART 3030_COST ACCOUNTING STANDARDS ADMINISTRATION--Table of Contents




                 Subpart 3030.2_CAS Program Requirements

Sec.
3030.201 Contract requirements.
3030.201-5 Waiver.

    Authority: 41 U.S.C. 418b (a) and (b).

    Source: 68 FR 67871, Dec. 4, 2003, unless otherwise note.



                 Subpart 3030.2_CAS Program Requirements



3030.201  Contract requirements.



3030.201-5  Waiver.

    (b)(1) The CPO is authorized to waive the application of the Cost 
Accounting Standards to individual firm fixed-price contracts for the 
acquisition of commercial items. This authority may not be redelegated.
    (2) Submit waiver requests per (HSAR) 48 CFR 3001.7000(a), for 
review and transmittal by the CPO to the Cost Accounting Standard Board.



PART 3031_CONTRACT COST PRINCIPLES AND PROCEDURES--Table of Contents




         Subpart 3031.2_Contracts with Commercial Organizations

Sec.
3031.205 Selected costs.
3031.205-32 Precontract costs.

    Authority: 41 U.S.C. 418b (a) and (b).

    Source: 68 FR 67871, Dec. 4, 2003, unless otherwise note.



         Subpart 3031.2_Contracts with Commercial Organizations



3031.205  Selected costs.



3031.205-32  Precontract costs.

    (a) The decision to incur precontract costs is that of the 
contractor. DHS employees may not can authorize, demand, or require a 
contractor to incur precontract costs. The contracting officer must 
advise the prospective contractor that any costs incurred before 
contract award are incurred at the contractor's sole risk and that if 
negotiations fail to result in a binding contract, payment of these 
costs will not be made by the Government. See (HSAR) 48 CFR 3032.205-
32(b) regarding exception due to reconciliation of costs.
    (b) When the contracting officer determines that incurring 
precontract costs was necessary to meet the proposed contract delivery 
schedule of a cost-reimbursement contract, the clause at (HSAR) 48 CFR 
3052.231-70, Precontract Costs, may be inserted in the resultant 
contract.



PART 3032_CONTRACT FINANCING--Table of Contents




                     Subpart 3032.000_Scope of Part

Sec.
3032.003 Simplified acquisition procedures financing.
3032.006 Reduction or suspension of contract payments upon finding of 
          fraud.
3032.006-2 Definition.
3032.006-3 Responsibilities.

                Subpart 3032.11_Electronic Funds Transfer

3032.1110 Solicitation provision and contract clauses.

    Authority: 41 U.S.C. 418b (a) and (b).

    Source: 68 FR 67871, Dec. 4, 2003, unless otherwise note.



                     Subpart 3032.000_Scope of Part



3032.003  Simplified acquisition procedures financing.

    Contract financing may be permitted for purchases made under the 
authority of (FAR) 48 CFR Part 13. This authority is delegated to COCO 
and may not be redelegated.

[[Page 92]]



3032.006  Reduction or suspension of contract payments upon finding of fraud.



3032.006-2  Definition.

    The CPO is the DHS remedy coordination official (RCO).



3032.006-3  Responsibilities.

    (a) The CPO is authorized to establish specific procedures.
    (b) Reports shall be made through the HCA to the CPO.



                Subpart 3032.11_Electronic Funds Transfer



3032.1110   Solicitation provision and contract clauses.

    (a)(1) Contracting officer shall insert FAR 48 CFR 52.232-33, 
Payment by Electronic Funds Transfer--Central Contractor Registration, 
in all proposed solicitations and contracts.



PART 3033_PROTESTS, DISPUTES, AND APPEALS--Table of Contents




                   Subpart 3033.2_Disputes and Appeals

Sec.
3033.201 Definitions.
3033.211 Contracting officer's decision.
3033.214 Alternative disputes resolution (ADR).

    Authority: 41 U.S.C. 418b (a) and (b).

    Source: 68 FR 67871, Dec. 4, 2003, unless otherwise note.



                   Subpart 3033.2_Disputes and Appeals



3033.201   Definitions.

    Agency Board of Contract Appeals means the Department of 
Transportation Board of Contract Appeals (DOTBCA).



3033.211  Contracting officer's decision.

    For DHS contracts, the Board of Contract Appeals (BCA) noted in 
(FAR) 48 CFR 33.211 is the Department of Transportation Board of 
Contract Appeals (DOTBCA) (S-20), 400 7th Street, S.W., Washington, DC, 
20590. The DOTBCA Rules of Procedure are contained in 48 CFR Chapter 63, 
Part 6301. TSA shall use the DOTBCA for only Contract Disputes Act (CDA) 
requirements.



3033.214  Alternative dispute resolution (ADR).

    (c) The Administrative Dispute Resolution Act (ADRA) of 1996, as 
amended, 5 U.S.C. 571, et seq., authorizes and encourages agencies to 
use mediation, conciliation, arbitration, and other techniques for the 
prompt and informal resolution of disputes, and for other purposes. The 
DOTBCA ADR procedures are contained in 48 CFR chapter 63, section 
6302.30, ADR Methods (Rule 30), and will be distributed to the parties, 
if ADR procedures are used. These procedures may be obtained from the 
DOTBCA upon request. ADR procedures may be used when--
    (1) There is mutual consent by the parties to participate in the ADR 
process (with consent being obtained either before or after an issue in 
controversy has arisen);
    (2) Prior to the submission of a claim; and
    (3) In resolution of a formal claim.

              PART 3034_MAJOR SYSTEM ACQUISITION [RESERVED]

[[Page 93]]



             SUBCHAPTER F_SPECIAL CATEGORIES OF CONTRACTING





PART 3035_RESEARCH AND DEVELOPMENT CONTRACTING--Table of Contents




                     Subpart 3035.000_Scope of Part

Sec.
3035.003 Policy.

    Authority: 41 U.S.C. 418b (a) and (b).

    Source: 68 FR 67871, Dec. 4, 2003, unless otherwise note.



                     Subpart 3035.000_Scope of Part



3035.003   Policy.

    (b) Cost sharing shall be determined on a case by case basis. OEs 
may establish procedures for cost sharing.
    (c) Recoupment shall be determined on a case-by-case basis. 
Recoupment not otherwise required by law should be structured to address 
factors such as recovering the Department's fair share of its investment 
in nonrecurring costs related to the items acquired. Advice of legal 
counsel shall be obtained prior to establishing cost sharing policies 
and recoupment mechanisms under (FAR) 48 CFR 35.003(b) and (c).



PART 3036_CONSTRUCTION AND ARCHITECT-ENGINEER CONTRACTS--Table of Contents




     Subpart 3036.2_Special Aspects of Contracting for Construction

Sec.
3036.201 Evaluation of contractor performance.

                     Subpart 3036.5_Contract Clauses

3036-570 Special precautions for work at operating airports.

    Authority: 41 U.S.C. 418b (a) and (b).

    Source: 68 FR 67871, Dec. 4, 2003, unless otherwise note.



     Subpart 3036.2_Special Aspects of Contracting for Construction



3036.201   Evaluation of contractor performance.

    (a)(2) Performance reports shall be prepared and entered into the 
Contractor Performance System (CPS) on an annual basis for contracts 
exceeding one year, or as otherwise required by (FAR) 48 CFR 36.201. 
Access to reports is through the CPS or the government-wide system, Past 
Performance Information Retrieval System (PPIRS).



                     Subpart 3036.5_Contract Clauses



3036.570   Special precautions for work at operating airports.

    Where any acquisition will require work at an operating airport, 
insert the clause at (HSAR) 48 CFR 3052.236-70, Special Precautions for 
Work at Operating Airports, in solicitations and contracts.



PART 3037_SERVICE CONTRACTING--Table of Contents




                Subpart 3037.1_Service Contracts_General

Sec.
3037.103 Contracting officer responsibility.
3037.103-70 Contractor personnel access application.
3037.103-71 Conditional access to sensitive but unclassified 
          information.
3037.104 Personal services contracts.
3037.104-70 Personal services contracts.
3037.104-90 Personal services contracts (USCG).
3037.104-91 Personal services with individuals under the authority of 10 
          U.S.C. 1091 (USCG).
3037.110-70 Solicitation provisions and contract clauses.

    Authority: 41 U.S.C. 418b (a) and (b).

    Source: 68 FR 67871, Dec. 4, 2003, unless otherwise note.



                Subpart 3037.1_Service Contracts_General



3037.103   Contracting officer responsibility.



3037.103-70  Contractor personnel access application.

    Contractor personnel who will require recurring access to DHS 
facilities as part of contract performances shall complete HSIF Form 
3237, Contractor Personnel Access Application, before starting work 
under the contract. The

[[Page 94]]

completed form shall be submitted to the appropriate DHS office as 
designated in the contract. Contractor personnel may be required to 
complete additional forms, as necessary.



3037.103-71  Conditional access to sensitive but unclassified information.

    Contractor personnel who will require access to sensitive but 
unclassified information as part of contract performances shall complete 
HSIF Form 4024, Sensitive Information Non-Disclosure Agreement, before 
starting work under the contract. The completed form shall be submitted 
to the appropriate DHS office as designated in the contract. Additional 
requirements are established in clause (HSAR) 48 CFR 3052.237-71, 
Information Technology Systems Access for Contractors.



3037.104  Personal services contracts.



3037.104-70  Personal services contracts.

    (b)(i) Authorization to acquire the personal services of experts and 
consultants is included in Public Law 107-296, sections 832(1) and (2). 
This section includes authority to use personal service contracts 
without regard to the pay limitation of 5 U.S.C. 3109 when the services 
are necessary due to an urgent homeland security need.
    (A) Prepare each D&F in accordance with (FAR) 48 CFR 1.7 and include 
a determination that--
    (1) The duties are of a temporary or intermittent nature and not to 
exceed one year;
    (2) DHS personnel with necessary skills are not available;
    (3) Excepted appointment cannot be obtained;
    (4) A nonpersonal services contract is not practicable;
    (5) Statutory authority, Public Law 107-297, section 832(1) or 
section 832(2) and other legislation, apply;
    (6) If the pay limitation of 5 U.S.C. 3109 is exceeded, the D&F 
supports the rationale; and
    (7) Any other determination required by statues has been made.
    (B)(1) Except as provided in paragraph (b)(i)(B)(2) of this 
subsection, the COCO shall approve the D&F required by paragraph 
(b)(i)(A).
    (2) The HCA shall approve the D&F for personal service contracts for 
experts and consultant services that are acquired without regard to the 
pay limitation of 5 U.S.C. 3109. This determination shall include a 
finding that the services are necessary due to urgent homeland security 
needs.
    (i) The contract may provide for the same per diem and travel 
expenses authorized for a Government employee, including actual 
transportation and per diem in lieu of subsistence for travel between 
home or place of business and official duty station and only for travel 
outside the local area in support of the statement of work.
    (ii) Coordinate benefits, taxes, personnel ceilings, and maintenance 
of records with the appropriate office(s).



3037.104-90  Personal services contracts (USCG).

    (a) The U.S. Coast Guard HCA may enter into medical personal 
services contracts according to 10 U.S.C. 1091.
    (b) The authority of 10 U.S.C. 1091(a)(2) expires December 31, 2003.



3037.104-91   Personal services contracts with individuals under the 
authority of 10 U.S.C. 1091 (USCG).

    (a) Health care personal services contracts awarded to individuals 
shall be selected through procedures established in this section. 
Selections made using the procedures in this section are exempt by 
statute from (HSAR) 48 CFR part 3006 competition requirements (see 
(HSAR) 48 CFR 3006.9000 (USCG)) and from (FAR) 48 CFR Part 6 competition 
requirements.
    (b) The contracting officer shall provide adequate advance notice of 
contracting opportunities to individuals residing in the area of the 
facility. The notice should include the qualification criteria against 
which individuals responding shall be evaluated. Contracting officers 
shall solicit offerors through the most effective means of seeking 
competition, such as a local publication, which serves the area of the 
facility. Acquisitions of health care services using personal services 
contracts are exempt from posting and synopsis requirements of (FAR) 48 
CFR Part 5.

[[Page 95]]

    (c) The contracting officer shall provide the qualifications of 
individuals responding to the notice to the representative(s) 
responsible for evaluation and ranking according to the evaluation 
procedures. Individuals shall be considered solely on the professional 
qualifications established for the particular health care services being 
acquired and the Government's estimate of reasonable rates, fees, or 
costs. The representative(s) responsible for the evaluation and ranking 
shall provide the contracting officer with rationale for the ranking of 
the individuals consistent with the required qualifications.
    (d) Upon receipt of the ranked listing of offerors, the contracting 
officer shall either:
    (1) Enter into negotiations with the highest ranked offeror. If a 
mutually satisfactory contract cannot be negotiated, the contracting 
officer shall terminate negotiations with the highest ranked offeror and 
enter into negotiations with the next highest, or;
    (2) Enter into negotiations with all qualified offerors and select 
on the basis of qualifications and rates, fees, or other costs.
    (e) In the event only one individual responds to an advertised 
requirement, the contracting officer is authorized to negotiate the 
contract award. In this case, the individual must still meet the minimum 
qualifications of the requirement and the contracting officer must be 
able to make a determination that the price is fair and reasonable.
    (f) If a fair and reasonable price cannot be obtained from a 
qualified individual, the requirement should be canceled and acquired 
using procedures other than those set forth in this section.
    (g) The total amount paid to an individual in any year for health 
care services under a personal services contract shall not exceed the 
paycap in COMDTINST M4200.19 (series), Coast Guard Acquisition 
Procedures.
    (h) The contract may provide for the same per diem and travel 
expenses authorized for a Government employee, including actual 
transportation and per diem in lieu of subsistence for travel between 
home or place of business and official duty station and only for travel 
outside the local area in support of the statement of work.
    (i) Coordinate benefits, taxes and maintenance of records with the 
appropriate office(s).
    (j) The contracting officer shall insure that contract funds are 
sufficient to cover all contingency items that may be cited in the 
statement of work for health care services.



3037.110-70  Solicitation provisions and contract clauses.

    (a) Contracting officers shall insert the clause at (HSAR) 48 CFR 
3052.237-70, Qualifications of Contractor Employees, in all 
solicitations and contracts for services, which require contract 
employees to have recurring access to Government facilities, sensitive 
information, including proprietary data or resources. This may include 
Information Technology (IT) requirements for design, development, or 
operation and maintenance of sensitive application in non-DHS or DHS 
facilities.
    (b) In addition to the (HSAR) clause 48 CFR 3052.237-70, the 
contracting officer shall also include the contract clauses, (HSAR) 
clause 48 CFR 3052.237-71, ``Information Systems Access for 
Contractors'' and (HSAR) clause 48 CFR 3052.237-72, ``Contractor 
Personnel Screening for Unclassified Information Technology''
    (c) The contracting officer shall also include (HSAR) clause 48 CFR 
3052.204-70, ``Information Technology Security Plan'' in solicitations 
and contracts when the prescription at paragraph (a) above applies.



PART 3038_FEDERAL SUPPLY SCHEDULE CONTRACTING [RESERVED]--Table of Contents






PART 3039_ACQUISITION OF INFORMATION TECHNOLOGY [RESERVED]--Table of Contents






PART 3040 [RESERVED]--Table of Contents






PART 3041_ACQUISITION OF UTILITY SERVICES [RESERVED]--Table of Contents




[[Page 97]]



                    SUBCHAPTER G_CONTRACT MANAGEMENT





PART 3042_CONTRACT ADMINISTRATION AND AUDIT SERVICES--Table of Contents




             Subpart 3042.2_Contract Administration Services

Sec.
3042.202 Assignment of contract administration.
3042.202-70 Contract clauses.

           Subpart 3042.15_Contractor Performance Information

3042.1502 Policy.

     Subpart 3042.70_Contracting Officer's Technical Representative

3042.7000 Contract clause.

    Authority: 41 U.S.C. 418b (a) and (b).

    Source: 68 FR 67871, Dec. 4, 2003, unless otherwise note.



             Subpart 3042.2_Contract Administration Services



3042.202   Assignment of contract administration.



3042.202-70  Contract clauses.

    (a) The contracting officer may use the clause at (HSAR) 48 CFR 
3052.242-70, Dissemination of Information--Educational Institutions, in 
lieu of the clause at (HSAR) 48 CFR 3052.242-71, Dissemination of 
Contract Information, in DHS research contracts with educational 
institutions, except contracts that require the release or coordination 
of information.
    (b) The contracting officer may insert the clause at (HSAR) 48 CFR 
3052.242-71, Dissemination of Contract Information, in all DHS contracts 
except contracts that require the release or coordination of 
information.



           Subpart 3042.15_Contractor Performance Information



3042.1502  Policy.

    (a) OEs shall use the Contractor Performance System (CPS) for 
evaluating contractor performance in accordance with (FAR) 48 CFR 
42.1502 and part 1503.



     Subpart 3042.70_Contracting Officer's Technical Representative



3042.7000  Contract clause.

    The contracting officer shall insert the clause at (HSAR) 48 CFR 
3052.242-72, Contracting Officer's Technical Representative, in 
solicitations and contracts when it is intended that a representative 
will be assigned to the contract to perform functions of a technical 
nature.



PART 3043_CONTRACT MODIFICATIONS [RESERVED]--Table of Contents






PART 3044_SUBCONTRACTING POLICIES AND PROCEDURES [RESERVED]
--Table of Contents






PART 3045_GOVERNMENT PROPERTY--Table of Contents




 Subpart 3045.5_Management of Government Property in the Possession of 
                               Contractors

Sec.
3045.505 Records and reports of Government property.
3045.505-14 Reports of Government property.
3045.505-70 Solicitation provisions and contract clauses.
3045.508 Physical inventories.
3045.508-2 Reporting results of inventories.
3045.508-3 Quantitative and monetary control.
3045.511 Audit of property control system.

    Authority: 41 U.S.C. 418b (a) and (b).

    Source: 68 FR 67871, Dec. 4, 2003, unless otherwise note.



 Subpart 3045.5_Management of Government Property in the Possession of 
                               Contractors



3045.505   Records and reports of Government property.



3045.505-14  Reports of Government property.

    (a) When Government property is furnished to or acquired by the 
contractor to perform the contract, the contract shall require the 
contractor to submit

[[Page 98]]

annual reports (see (FAR) 48 CFR 45.505-14) to the contracting officer 
not later than September 15 of each year. The contractor's report shall 
be submitted on DHS Form 0700-05, Contractor Report of Government 
Property.



3045.505-70  Solicitation provisions and contract clauses.

    Contracting officers shall insert the clause at (HSAR) 48 CFR 
3052.245-70 in solicitations and contracts when the contract will 
require Government provided or contractor acquired property.



3045.508  Physical inventories.



3045.508-2  Reporting results of inventories.

    The inventory report shall also include the following:
    (a) Name and title of the individual(s) that performed the physical 
inventory;
    (b) An itemized, categorized listing of all property capitalized:
    (1) Land and rights therein;
    (2) Other real property;
    (3) Plant equipment;
    (4) Special test equipment; and
    (5) Special tooling;
    (c) An itemized listing of the property lost, damaged, destroyed, or 
stolen, the circumstances surrounding each incident, and the resolution 
of the incident; and
    (d) Any discrepancies between the physical inventory and the 
contractor's record of Government property.



3045.508-3  Quantitative and monetary control.

    Contracting officers shall require the contractor to provide the 
quantity and unit cost of each item of Government property reported 
under (HSAR) 48 CFR 3045.508-2(b) and (c).



3045.511  Audit of property control system.

    (a) The property administrator (or other Government official 
authorized by the contracting officer) shall audit the contractor's 
property control system whenever there are indications that the 
contractor's property control system may be deficient. Examples of 
deficiencies are:
    (1) Failure of the contractor to acknowledge receipt of GFP;
    (2) Failure of the contractor to submit the annual property reports 
required by (HSAR) 48 CFR 3045.505-14;
    (3) Failure of the contractor to reconcile its physical inventory 
with its property control record; or
    (4) Failure of the contractor to submit a Government property 
listing when requested by the property administrator.
    (b) When it is determined that the contractor's property control 
system is deficient, the property administrator, in coordination with 
the contracting officer, shall discuss the deficiencies with the 
contractor. If the contractor does not take action to correct the 
deficiencies, the contracting officer shall provide the contractor with 
a written notice of the deficiencies and the date all deficiencies shall 
be corrected.



PART 3046_QUALITY ASSURANCE--Table of Contents




                        Subpart 3046.7_Warranties

Sec.
3046.702 General.
3046.702-70 Additional definitions.
3046.703 Criteria for use of warranties.
3046.705 Limitations.
3046.706 Warranty terms and conditions.
3046.790 Additional USCG definitions (USCG).
3046.791 Use of warranties in major systems acquisitions by the USCG 
          (USCG).
3046.791-1 Policy (USCG).
3046.791-2 Tailoring warranty terms and conditions. (USCG).
3046.791-3 Warranties on Government-furnished property (USCG).
3046.792 Cost benefit analysis (USCG).
3046.793 Waiver and notification procedures (USCG).

    Authority: 41 U.S.C. 418b (a) and (b).

    Source: 68 FR 67871, Dec. 4, 2003, unless otherwise note.



                        Subpart 3046.7_Warranties



3046.702  General.



3046.702-70   Additional definitions.

    At no additional cost to the Government, means without an increase 
in price for firm-fixed-price contracts, without an increase in target 
or ceiling price for fixed price incentive contracts (see (FAR) 48 CFR 
46.707), or without

[[Page 99]]

an increase in estimated cost or fee for cost-reimbursement contracts.
    Defect means any condition or characteristic in any supplies or 
services furnished by the contractor under the contract that is not in 
compliance with the requirements of the contract.
    Design and manufacturing requirements means structural and 
engineering plans and manufacturing particulars, including precise 
measurements, tolerances, materials and finished product tests for the 
major system being produced.
    Major system means a system or major subsystem used directly by the 
Department of Homeland Security (DHS) to carry out its mission(s), as 
defined by HSAM Chapter 1234, Major Acquisition Policies and Procedures 
(for dollar threshold applicable to U.S. Coast Guard, See Coast Guard 
guidance at (HSAR) 48 CFR 3046.701-90). The term does not include:
    (1) Related support equipment, such as ground-handling equipment, 
training devices and accessories thereto, unless a cost effective 
warranty for the system would require inclusion of such items; or
    (2) Commercial items sold in substantial quantities to the general 
public as described in (FAR) 48 CFR part 2.
    Performance requirements means the operating capabilities, 
maintenance, and reliability characteristics of a system that are 
determined to be necessary for it to fulfill the requirement for which 
the system is designed.



3046.703  Criteria for use of warranties.

    (a) Major Systems. The use of warranties in the procurement of major 
systems by the USCG is mandatory, unless waived (see USCG guidance at 
(HSAR) 48 CFR 3046.792). Other OEs may use the procedures in USCG 
guidance in this part as a guideline for major systems acquisitions.



3046.705  Limitations.

    (a) The following restrictions are applicable to DHS contracts:
    (1) The USCG is required to include a warranty in cost reimbursement 
contracts for the production of major systems acquisitions.
    (2) Any warranty on major system acquisitions shall not apply in the 
case of any system or component thereof which has been furnished by the 
Government to a contractor except as indicated in the USCG guidance at 
(HSAR) 48 CFR 3046.791-3.
    (3) Any warranty obtained shall specifically exclude coverage of 
damage in time of war or national emergency.



3046.706  Warranty terms and conditions.

    (a) The contracting officer, in developing the warranty terms and 
conditions, shall consider the following, and, where appropriate and 
cost beneficial, shall:
    (1) Identify the affected line item(s) and the applicable 
specification(s);
    (2) Require that the line item's design and manufacture will conform 
to:
    (i) An identified revision of a top-level drawing; and/or
    (ii) An identified specification or revision thereof;
    (3) Require that the system conform to the specified Government 
performance requirements;
    (4) Require that all systems and components delivered under the 
contract will be free from defects in materials and workmanship;
    (5) State that in the event of failure due to nonconformance with 
specification and/or defects in material and workmanship, the contractor 
will bear the cost of all work necessary to achieve the specified 
performance requirements, including repair and/or replacement of all 
parts;
    (6) Require the timely replacement/repair of warranted items and 
specify lead times for replacement/repair where possible;
    (7) Identify the specific paragraphs containing Government 
performance requirements which must be met;
    (8) Ensure that any performance requirements identified as goals or 
objectives in excess of specification requirements are excluded from the 
warranty provision;
    (9) Define what constitutes the start of the warranty period (e.g., 
delivery, acceptance, in-service date), the ending of the warranty 
(e.g., passing a test or demonstration, or operation without failure for 
a specified time period), and circumstances requiring an extension of 
warranty duration (e.g., extending

[[Page 100]]

the warranty period as a result of mass defect correction during 
warranty period);
    (10) Identify what transportation costs will be paid by the 
contractor in conjunction with warranty coverage;
    (11) Identify any conditions which will not be covered by the 
warranty, other than the exclusion of combat damage; and
    (12) Identify any limitation on the total dollar amount of the 
contractor's warranty exposure, or agreement to share costs after a 
certain dollar threshold to avoid unnecessary warranty returns.
    (b) Any contract that contains a warranty clause shall contain 
warranty implementation procedures, including warranty notification 
content and procedures, and identify the individuals responsible for 
implementation of warranty provisions. The contract may also permit the 
contractor's participation in investigation of system failures, 
providing that the contractor is reimbursed at established rates for 
fault isolation work, and that the Government receives credit for any 
payments where equipment failure is covered by warranty provisions.



3046.790  Additional USCG definitions (USCG).

    For the USCG, in accordance with Public Law 99-190, the dollar 
threshold as it pertains to the inclusion of a warranty in major systems 
acquisitions is $10 million.



3046.791  Use of warranties in major systems acquisitions by the USCG 
(USCG).

    This subpart provides the policy for the USCG to use in obtaining 
warranties from contractors when contracting for the acquisition of a 
major system.



3046.791-1  Policy (USCG).

    The USCG shall include a warranty in all contracts for major systems 
acquisitions. When drafting warranty provisions/clauses for major 
systems acquisitions, the contracting officer shall ensure that the 
items listed at (HSAR) 48 CFR 3046.706 have been considered. The 
warranty shall also meet the following requirements:
    (a) For systems or components which are commercially available, such 
warranty as is normally provided by the manufacturer or supplier shall 
be obtained in accordance with (FAR) 48 CFR 46.703(d) and (FAR) 48 CFR 
46.710(b)(2).
    (b) For systems or components provided in accordance with either 
design and manufacturing or performance requirements as specified in the 
contract or any modification to that contract, a warranty of compliance 
with the stated requirements shall be obtained.
    (c) The warranty provided under paragraph (b) of this section shall 
provide that in the event the major system or any component thereof 
fails to meet the terms of the warranty provided, the contracting 
officer may:
    (1) Require the contractor to promptly take such corrective action 
as the contracting officer determines to be necessary at no additional 
cost to the Government, including repairing or replacing all parts 
necessary to achieve the requirements set forth in the contract;
    (2) Require the contractor to pay costs reasonably incurred by the 
United States in taking necessary corrective action; or
    (3) Equitably reduce the contract price.
    (d) Any warranty shall specifically exclude coverage of combat 
damage.



3046.791-2  Tailoring warranty terms and conditions (USCG).

    (a) As the objectives and circumstances vary considerably among 
major systems acquisition programs, contracting officers shall 
appropriately tailor the warranty on a case-by-case basis, including 
remedies, exclusions, limitations and durations, provided the tailoring 
is consistent with the specific requirements of this subpart and (FAR) 
48 CFR 46.706.
    (b) Contracting officers of major systems acquisitions may exclude 
from the terms of the warranty certain defects for specified supplies 
(exclusions) and may limit the contractor's liability under the terms of 
the warranty (limitations), as appropriate, if necessary to derive a 
cost-effective warranty in light of the technical risk,

[[Page 101]]

contractor financial risk, or other program uncertainties.
    (c) Contracting officers are encouraged to structure a broader and 
more comprehensive warranty where such is advantageous. Likewise, the 
contracting officer may narrow the scope of a warranty when appropriate 
(e.g., where it would be inequitable to require a warranty of all 
performance requirements because a contractor had not designed the 
system).
    (d) Contracting officers shall not include in a warranty clause any 
terms that require the contractor to incur liability for loss, damage, 
or injury to third parties.



3046.791-3  Warranties on Government-furnished property (USCG).

    A contractor for a major systems acquisition shall not be required 
to provide the warranties specified in (HSAR) 48 CFR 3046.790-1 on any 
property furnished to that contractor by the Government except for:
    (a) Defects in installation; and
    (b) Installation or modification in such a manner that invalidates a 
warranty provided by the manufacturer of the property.



3046.792  Cost benefit analysis (USCG).

    If a specific warranty is considered not to be cost beneficial by 
the contracting officer, a waiver request shall be initiated in 
accordance with guidance at (HSAR) 48 CFR 3046.793.



3046.793  Waiver and notification procedures (USCG).

    (a) The Secretary of Homeland Security, without delegation, may 
waive the requirement for a warranty for USCG major system acquisitions 
when the waiver is in the interest of national defense or if the 
warranty obtained would not be cost beneficial. A waiver may be granted 
provided that the Committees on Appropriations of the Senate and the 
House of Representatives, the Committee on Commerce, Science and 
Transportation of the Senate, and the Committee on Merchant Marine and 
Fisheries of the House of Representatives are notified, in writing, of 
the Secretary's intention to waive the warranty requirements and the 
reasons supporting such a determination prior to granting the waiver. 
The request for Secretarial waiver shall include, as a minimum:
    (1) A brief description of the major system and its stage of 
production (e.g., the number of units delivered and anticipated to be 
delivered during the life of the program);
    (2) The specific waiver requested, the duration of the waiver if it 
is to involve more than one contract, and the rationale for the waiver; 
and
    (3) All documentation supporting the request for waiver, such as a 
cost-benefit analysis.
    (b) The waiver request shall be forwarded to the Secretary, via the 
CPO. The USCG shall maintain a written record of each waiver granted and 
the Congressional notification and report made, together with supporting 
documentation.



PART 3047_TRANSPORTATION--Table of Contents




            Subpart 3047.3_Transportation in Supply Contracts

Sec.
3047.305 Solicitation provisions, contract clauses, and transportation 
          factors.
3047.305-70 Solicitation provision.

    Authority: 41 U.S.C. 418b (a) and (b).

    Source: 68 FR 67871, Dec. 4, 2003, unless otherwise note.



            Subpart 3047.3_Transportation in Supply Contracts



3047.305  Solicitation provisions, contract clauses, and transportation 
factors.



3047.305-70  Solicitation provisions.

    The contracting officer shall insert the following provisions in 
solicitations, as applicable:
    (a) (HSAR) 48 CFR 3052.247-70, F.o.b. Origin Information, with 
Alternates I or II, as applicable, shall be inserted in accordance with 
(FAR) 48 CFR 47.305-3(b);
    (b) (HSAR) 48 CFR 3052.247-71, F.o.b. Origin Only, shall be inserted 
in accordance with (FAR) 48 CFR 47.305-3(e); and
    (c) (HSAR) 48 CFR 3052.247-72, F.o.b. Destination Only, shall be 
inserted in

[[Page 102]]

accordance with (FAR) 48 CFR 47.305-4(b).



PART 3048_VALUE ENGINEERING [RESERVED]--Table of Contents






PART 3049_TERMINATION OF CONTRACTS [RESERVED]--Table of Contents






PART 3050_EXTRAORDINARY CONTRACTUAL ACTIONS [RESERVED]--Table of Contents






PART 3051_USE OF GOVERNMENT SOURCES BY CONTRACTORS [RESERVED]
--Table of Contents




[[Page 103]]



                     SUBCHAPTER H_CLAUSES AND FORMS





PART 3052_SOLICITATION PROVISIONS AND CONTRACT CLAUSES--Table of Contents




      Subpart 3052.1_Instructions for Using Provisions and Clauses

Sec.
3052.101 Using part 3052.

             Subpart 3052.2_Texts of Provisions and Clauses

3052.204-70 Security requirements for unclassified information 
          technology resources.
3052.209-70 Prohibition on contracts with corporate expatriates.
3052.209-71 Reserve Officer Training Corps and military recruiting on 
          campus.
3052.209-72 Disclosure of conflicts of interest.
3052.211-70 Index for specifications.
3052.211-90 Bar coding requirement (USCG).
3052.213-90 Evaluation factor for Coast Guard performance of bar coding 
          requirement (USCG).
3052.215-70 Key personnel or facilities.
3052.216-70 Evaluation of offers subject to an economic price adjustment 
          clause.
3052.216-71 Determination of award fee.
3052.216-72 Performance evaluation plan.
3052.216-73 Distribution of award fee.
3052.216-74 Settlement of letter contract.
3052.217-90 Delivery and shifting of vessel (USCG).
3052.217-91 Performance (USCG).
3052.217-92 Inspection and manner of doing work (USCG).
3052.217-93 Subcontracts (USCG).
3052.217-94 Lay days (USCG).
3052.217-95 Liability and insurance (USCG).
3052.217-96 Title (USCG).
3052.217-97 Discharge of liens (USCG).
3052.217-98 Delays (USCG).
3052.217-99 Department of Labor safety and health regulations for ship 
          repair (USCG).
3052.217-100 Guarantee (USCG).
3052.219-70 Small business subcontracting program reporting.
3052.219-71 DHS mentor-prot[eacute]g[eacute] program.
3052.219-72 Evaluation of prime contractor participation in the DHS 
          mentor-prot[eacute]g[eacute] program.
3052.222-70 Strikes or picketing affecting timely completion of the 
          contract work.
3052.222-71 Strikes or picketing affecting access to a DHS facility.
3052.222-90 Local hire (USCG).
3052.223-70 Removal or disposal of hazardous substances--applicable 
          licenses and permits.
3052.223-90 Accident and fire reporting (USCG).
3052.228-70 Insurance.
3052.228-90 Notification of Miller Act payment bond protection (USCG).
3052.228-91 Loss of or damage to leased aircraft (USCG).
3052.228-92 Fair Market value of aircraft (USCG).
3052.228-93 Risk and indemnities (USCG).
3052.231-70 Precontract costs.
3052.236-70 Special provisions for work at operating airports.
3052.237-70 Qualifications of contractor employees.
3052.237-71 Information technology systems access for contractors.
3052.237-72 Contractor personnel screening for unclassified information 
          technology access.
3052.242.70 Dissemination of information--educational institutions.
3052.242-71 Dissemination of contract information.
3052.242-72 Contracting officer's technical representative.
3052.245-70 Government property reports.
3052.247-70 F.o.b. origin information.
3052.247-71 F.o.b. origin only.
3052.247-72 F.o.b. destination only.

    Authority: 41 U.S.C. 418b (a) and (b).

    Source: 68 FR 67871, Dec. 4, 2003, unless otherwise note.



      Subpart 3052.1_Instructions for Using Provisions and Clauses



3052.101  Using part 3052.

    (b) Numbering.
    (2)(i) Provisions or clauses that supplement the FAR.
    (A) Agency-prescribed provisions and clauses permitted by HSAR and 
used on a standard basis (i.e., normally used in two or more 
solicitations or contracts regardless of contract type) shall be 
prescribed and contained in the HSAR. OEs desiring to use a provision or 
a clause on a standard basis shall submit a request containing a copy of 
the clause(s), justification for its use, and evidence of legal counsel 
review to the CPO in accordance with (HSAR) 48 CFR 3001.304 for possible 
inclusion in the HSAR.

[[Page 104]]

    (B) Provisions and clauses used on a one-time basis (i.e., non-
standard provisions and clauses) may be approved by the contracting 
officer, unless a higher level is designated by the OE. This authority 
is subject to:
    (1) Evidence of legal counsel review in the contract file;
    (2) Inserting these clauses in the appropriate sections of the 
uniform contract format; and
    (3) Ensuring the provisions and clauses do not deviate from the 
requirements of the FAR and HSAR.



              Subpart 3052.2_Text of Provisions and Clauses



3052.204-70   Security requirements for unclassified information--technology 
resources.

    As prescribed in (HSAR) 48 CFR 3004.470-4 Contract clauses, and 
(HSAR) 48 CFR 3037.110-70 (a) and (b), insert a clause substantially the 
same as follows:

Security Requirements for Unclassified Information Technology Resources 
                               (DED 2003)

    (a) The Contractor shall be responsible for Information Technology 
(IT) security for all systems connected to a DHS network or operated by 
the Contractor for DHS, regardless of location. This clause applies to 
all or any part of the contract that includes information technology 
resources or services for which the Contractor must have physical or 
electronic access to sensitive information contained in DHS unclassified 
systems that directly support the agency's mission. The security 
requirements include, but are not limited to, how the Department of 
Homeland Security's sensitive information is to be handled and protected 
at the Contractor's site, (including any information stored, processed, 
or transmitted using the Contractor's computer systems), the background 
investigation and/or clearances required, and the facility security 
required. This requirement includes information technology, hardware, 
software, and the management, operation, maintenance, programming, and 
system administration of computer systems, networks, and 
telecommunications systems. Examples of tasks that require security 
provisions include--
    (1) Acquisition, transmission or analysis of data owned by DHS with 
significant replacement cost should the contractor's copy be corrupted; 
and
    (2) Access to DHS networks or computers at a level beyond that 
granted the general public, (e.g. such as bypassing a firewall).
    (b) At the expiration of the contract, the contractor shall return 
all sensitive DHS information and IT resources provided to the 
contractor during the contract, and a certification that all DHS 
information has been purged from any contractor-owned system used to 
process DHS information. Organizational elements shall conduct reviews 
to ensure that the security requirements in the contract are implemented 
and enforced.
    (c) The Contractor shall provide, implement, and maintain an IT 
Security Plan. This plan shall describe the processes and procedures 
that will be followed to ensure appropriate security of IT resources 
that are developed, processed, or used under this contract. The plan 
shall describe those parts of the contract to which this clause applies. 
The Contractor's IT Security Plan shall be compliant with Federal laws 
that include, but are not limited to, the Computer Security Act of 1987 
(40 U.S.C. 1441 et seq.), and the Government Information Security Reform 
Act of 2000, and the Federal Information Security Management Act of 
2002. The plan shall meet IT security requirements in accordance with 
Federal policies and procedures that include, but are not limited to OMB 
Circular A-130, Management of Federal Information Resources, Appendix 
III, and Security of Federal Automated Information Resources;
    (d) Within----days after contract award, the contractor shall submit 
for approval an IT Security Plan. This plan shall be consistent with and 
further detail the approach contained in the offeror's proposal or quote 
that resulted in the award of this contract and in compliance with the 
requirements stated in this clause. The plan, as approved by the 
Contracting Officer, shall be incorporated into the contract as a 
compliance document.
    (e) Within 6 months after contract award, the contractor shall 
submit written proof of IT Security accreditation to DHS for approval by 
the DHS Contracting Officer. Accreditation will be according to the 
criteria of the Homeland Security Information Technology Security 
program Publication, DHS MD 4300.Pub., Volume I, Policy Guide, Part A, 
Sensitive Systems, which is available from the Contracting Officer upon 
request. This accreditation will include a final security plan, risk 
assessment, security test and evaluation, and disaster recovery plan/
continuity of operations plan. This accreditation, when accepted by the 
Contracting Officer, shall be incorporated into the contract as a 
compliance document, and shall include a final security plan, a risk 
assessment, security test and evaluation, and disaster recovery/
continuity of operations plan. The

[[Page 105]]

contractor shall comply with the approved accreditation documentation.

                             (End of clause)



3052.209-70  Prohibition on contracts with corporate expatriates.

    As prescribed at (HSAR) 48 CFR 3009.104-75, insert the following 
clause:

     Prohibition on Contracts With Corporate Expatriates (DEC 2003)

    (a) Prohibitions.
    Section 835 of Public Law 107-296, prohibits the Department of 
Homeland Security from entering into any contract with a foreign 
incorporated entity after November 25, 2002, which is treated as an 
inverted domestic corporation as defined in this clause.
    The Secretary shall waive the prohibition with respect to any 
specific contract if the Secretary determines that the waiver is 
required in the interest of homeland security, or to prevent the loss of 
any jobs in the United States or prevent the Government from incurring 
any additional costs that otherwise would not occur.
    (b) Definitions. As used in this clause:
    Expanded Affiliated Group means an affiliated group as defined in 
section 1504(a) of the Internal Revenue Code of 1986 (without regard to 
section 1504(b) of such Code), except that section 1504 of such Code 
shall be applied by substituting `more than 50 percent' for `at least 80 
percent' each place it appears.
    Foreign Incorporated Entity means any entity which is, or but for 
subsection (b) of section 835 of the Homeland Security Act, Public Law 
107-296, would be, treated as a foreign corporation for purposes of the 
Internal Revenue Code of 1986.
    Inverted Domestic Corporation. A foreign incorporated entity shall 
be treated as an inverted domestic corporation if, pursuant to a plan 
(or a series of related transactions)--
    (1) The entity completes after November 25, 2002, the direct or 
indirect acquisition of substantially all of the properties held 
directly or indirectly by a domestic corporation or substantially all of 
the properties constituting a trade or business of a domestic 
partnership;
    (2) After the acquisition at least 80 percent of the stock (by vote 
or value) of the entity is held--
    (i) In the case of an acquisition with respect to a domestic 
corporation, by former shareholders of the domestic corporation by 
reason of holding stock in the domestic corporation; or
    (ii) In the case of an acquisition with respect to a domestic 
partnership, by former partners of the domestic partnership by reason of 
holding a capital or profits interest in the domestic partnership; and
    (3) The expanded affiliated group which after the acquisition 
includes the entity does not have substantial business activities in the 
foreign country in which or under the law of which the entity is created 
or organized when compared to the total business activities of such 
expanded affiliated group.
    Person, domestic, and foreign have the meanings given such terms by 
paragraphs (1), (4), and (5) of section 7701(a) of the Internal Revenue 
Code of 1986, respectively.
    (c) Special rules. The following definitions and special rules shall 
apply when determining whether a foreign incorporated entity should be 
treated as an inverted domestic corporation.
    (1) Certain stock disregarded. For the purpose of treating a foreign 
incorporated entity as an inverted domestic corporation these shall not 
be taken into account in determining ownership:
    (i) stock held by members of the expanded affiliated group which 
includes the foreign incorporated entity; or
    (ii) stock of such entity which is sold in a public offering related 
to the acquisition described in subsection (b)(1) of Section 835 of the 
Homeland Security Act, Public Law 107-296.
    (2) Plan deemed in certain cases. If a foreign incorporated entity 
acquires directly or indirectly substantially all of the properties of a 
domestic corporation or partnership during the 4-year period beginning 
on the date which is after the date of enactment of this Act and which 
is 2 years before the ownership requirements of subsection (b)(2) are 
met, such actions shall be treated as pursuant to a plan.
    (3) Certain transfers disregarded. The transfer of properties or 
liabilities (including by contribution or distribution) shall be 
disregarded if such transfers are part of a plan a principal purpose of 
which is to avoid the purposes of this section.
    (d) Special rule for related partnerships. For purposes of applying 
section 835(b) of Public Law 107-296 to the acquisition of a domestic 
partnership, except as provided in regulations, all domestic 
partnerships which are under common control (within the meaning of 
section 482 of the Internal Revenue Code of 1986) shall be treated as a 
partnership.
    (e) Treatment of Certain Rights.
    (1) Certain rights shall be treated as stocks to the extent 
necessary to reflect the present value of all equitable interests 
incident to the transaction, as follows:
    (i) Warrants;
    (ii) Options;
    (iii) Contracts to acquire stock;
    (iv) Convertible debt instruments;
    (v) Others similar interests.
    (2) Rights labeled as stocks shall not be treated as stocks whenever 
it is deemed appropriate to do so to reflect the present value of the 
transaction or to disregard

[[Page 106]]

transactions whose recognition would defeat the purpose of section 835.
    (f) Disclosure. By signing and submitting its offer, an offeror 
under this solicitation represents that it not a foreign incorporated 
entity that should be treated as an inverted domestic corporation 
pursuant to the criteria of Section 835 of the Homeland Security Act, 
Public Law 107-296 of November 25, 2002.
    (g) If a waiver has been granted, a copy of the approved waiver 
shall be attached to the bid or proposal.

                           (End of provision)



3052.209-71  Reserve Officer Training Corps and military recruiting on 
campus.

    As prescribed in (HSAR) 48 CFR 3009.470-4, use the following clause:

 Reserve Officer Training Corps and Military Recruiting on Campus (DEC 
                                  2003)

    (a) Definitions. Institution of higher education, as used in this 
clause, means an institution that meets the requirements of 20 U.S.C. 
1001 and includes all subelements of such an institution.
    (b) Limitation on contract award. Except as provided in paragraph 
(c) of this clause, an institution of higher education is ineligible for 
contract award if the Secretary of Defense determines that the 
institution has a policy or practice (regardless of when implemented) 
that prohibits or in effect prevents--
    (1) The Secretary of a military department from maintaining, 
establishing, or operating a unit of the Senior Reserve Officer Training 
Corps (ROTC) (in accordance with 10 U.S.C. 654 and other applicable 
Federal laws) at that institution;
    (2) A student at that institution from enrolling in a unit of the 
Senior ROTC at another institution of higher education;
    (3) The Secretary of a military department or the Secretary of 
Homeland Security from gaining entry to campuses, or access to students 
(who are 17 years of age or older) on campuses, for purposes of military 
recruiting; or
    (4) Military recruiters from accessing, for purposes of military 
recruiting, the following information pertaining to students (who are 17 
years of age or older) enrolled at that institution:
    (i) Name.
    (ii) Address.
    (iii) Telephone number.
    (iv) Date and place of birth.
    (v) Educational level.
    (vi) Academic major.
    (vii) Degrees received.
    (viii) Most recent educational institution enrollment.
    (c) Exception. The limitation in paragraph (b) of this clause does 
not apply to an institution of higher education if the Secretary of 
Defense determines that--
    (1) The institution has ceased the policy or practice described in 
paragraph (b) of this clause; or
    (2) The institution has a long-standing policy of pacifism based on 
historical religious affiliation.
    (d) Agreement. The Contractor represents that it does not now have, 
and agrees that during performance of this contract it will not adopt, 
any policy or practice described in paragraph (b) of this clause, unless 
the Secretary of Defense has granted an exception in accordance with 
paragraph (c)(2) of this clause.
    (e) Notwithstanding any other clause of this contract, if the 
Secretary of Defense determines that the Contractor misrepresented its 
policies and practices at the time of contract award or has violated the 
agreement in paragraph (d) of this clause--
    (1) The Contractor will be ineligible for further payments under 
this and any other contracts with the Department of Homeland Security; 
and
    (2) The Government will terminate this contract for default for the 
Contractor's material failure to comply with the terms and conditions of 
award.

                             (End of clause)



3052.209-72  Disclosure of conflicts of interest.

    As prescribed in (HSAR) 48 CFR 3009.507, insert the following 
provision:

             Disclosure of Conflicts of Interest (DED 2003)

    The Department of Homeland Security (DHS) will award contracts only 
to those offerors whose objectivity is not impaired by conflicting 
interests. Based on this policy--
    (a) The offeror shall provide a statement in its proposal which 
describes in a concise manner all past, present or planned 
organizational, financial, contractual or other interest(s) with an 
organization whose interests may be substantially affected by 
Departmental activities, and which is related to the work under this 
solicitation. The interest(s) described shall include those of the 
proposer, its affiliates, proposed consultants, proposed subcontractors 
for more than 20% of the work and key personnel of the offeror and any 
subcontractor accounting for more than 20% of the contract. Past 
interest shall be limited to within one year of the date of the 
offeror's technical proposal. Key personnel, for purposes of this 
clause, shall include any person owning more than 20% interest in the 
company, and the company's corporate officers, its senior managers and

[[Page 107]]

any employees responsible for making a decision or taking an action on 
this contract where the decision or action can have an economic or other 
impact on the interests of a regulated or affected organization.
    (b) The offeror shall describe in detail why it believes, in light 
of the interest(s) identified in (a) above, that performance of the 
proposed contract can be accomplished in an impartial and objective 
manner.
    (c) In the absence of any relevant interest identified in (a) above, 
the offeror shall submit in its proposal a statement certifying that to 
its best knowledge and belief no affiliation exists relevant to possible 
conflicts of interest. The offeror must obtain the same information from 
potential subcontractors prior to award of a subcontract.
    (d) The Contracting Officer will review the statement submitted and 
may require additional relevant information from the offeror. All such 
information, and any other relevant information known to DHS, will be 
used to determine whether an award to the offeror may create a conflict 
of interest. If any such conflict of interest is found to exist, the 
Contracting Officer may (1) disqualify the offeror, or (2) determine 
that it is otherwise in the best interest of the United States to 
contract with the offeror and include appropriate provisions to mitigate 
or avoid such conflict in the contract awarded.
    (e) The refusal to provide the disclosure or representation, or any 
additional information required, may result in disqualification of the 
offeror for award. If nondisclosure or misrepresentation is discovered 
after award, the resulting contract may be terminated. If, after award, 
the Contractor discovers a conflict of interest with respect to the 
contract awarded as a result of this solicitation, which could not 
reasonably have been known prior to award, an immediate and full 
disclosure shall be made in writing to the Contracting Officer. The 
disclosure shall include a full description of the conflict, a 
description of the action the contractor has taken, or proposes to take, 
to avoid or mitigate such conflict. The Contracting Officer may, 
however, terminate the contract for convenience if he or she deems that 
termination is in the best interest of the Government.

                             (End of clause)



3052.211-70  Index for specifications.

    As prescribed in (HSAR) 48 CFR 3011.204-70 insert the following 
clause:

                   Index for Specifications (DEC 2003)

    If an index or table of contents is furnished in connection with 
specifications, it is understood that such index or table of contents is 
for convenience only. Its accuracy and completeness is not guaranteed, 
and it is not to be considered as part of the specifications. In case of 
discrepancy between the index or table of contents and the 
specifications, the specifications shall govern.

                             (End of clause)



3052.211-90  Bar coding requirement (USCG).

    As prescribed in USCG guidance at (HSAR) 48 CFR 3011.204-90(a) and 
3013.302-590, insert the following clause:

                   Bar Coding Requirements (DEC 2003)

    Item markings shall include bar coding in accordance with MIL-STD-
1189 as clarified below:
    (a) The stock number shall be bar coded with no prefixes, dashes, 
spaces, or suffixes encoded. The contract number, the delivery order, or 
call order number, when used, shall be bar coded with no spaces or 
dashes encoded.
    (b) Prefixes and suffixes to the stock number may be included in the 
OCR-A in-the-clear markings, but not in the bar code.
    (c) Preferred Bar Code Density (characters per inch as defined in 
MIL-STD-1189) is ``standard,'' but densities from ``standard'' to 
``low'' are acceptable.
    (d) OCR-A characters do not have to be machine-readable.
    (e) Bar coding shall be machine-readable.
    (f) Unless otherwise specified herein, minimum bar code height shall 
be 0.25 inch (6.4 mm) or 15 percent of the bar code length, whichever is 
greater.
    (g) The preferred position of the OCR-A characters is below the bar 
codes, but the OCR-A characters may be above the bar codes.
    (h) On outer containers contractors shall either:
    (1) Encode the stock numbers and contract number in one line of bar 
code with the stock number appearing first; or
    (2) Encode the item stock number and contract number on two labels, 
with the top label containing the stock number and the lower label 
containing the contract number.
    (i) On unit and intermediate containers, the item stock number in 
bar code with OCR-A below may be on the same label as the other data 
(identification markings) required by MIL-STD-129H. However, the bar 
code stock number shall appear on the top line with OCR-A characters on 
the second line; the OCR-A characters may include the stock number 
prefix and suffix, or alternatively, the complete stock number including 
any prefix and suffix, shall be repeated as part of the identification 
markings.
    (j) Exclusions from bar code markings are:
    (1) Multi-packs/consolidation containers (containers with two or 
more different stock numbers within).

[[Page 108]]

    (2) Reusable shipping containers used for multiple/ different stock 
number applications.
    (3) Items consigned to a prime contractor's plant for installation 
in production.

                             (End of clause)



3052.213-90  Evaluation factor for Coast Guard performance of bar coding 
requirement (USCG).

    As prescribed in USCG guidance at (HSAR) 48 CFR 3013.106-190, insert 
the following provision:

Evaluation Factor for Coast Guard Performance of Bar Coding Requirement 
                               (DEC 2003)

    If a small business cannot provide the bar coding requirement, as 
indicated elsewhere in the schedule, the contracting officer will apply 
the following formula to the quoted amounts:
    (a) Unit price quoted by small business $------
    (b) Add unit cost to the USCG to provide bar coding $------
    (c) Adjusted unit price (add lines a. and b.) $------

The line (c) amount will become the amount the contracting officer 
considered when determining the lowest quoted amount.

                           (End of provision)



3052.215-70  Key personnel or facilities.

    As prescribed in (HSAR) 48 CFR 3015.204-3, insert the following 
clause:

                 Key Personnel or Facilities. (DEC 2003)

    (a) The personnel or facilities specified below are considered 
essential to the work being performed under this contract and may, with 
the consent of the contracting parties, be changed from time to time 
during the course of the contract by adding or deleting personnel or 
facilities, as appropriate.
    (b) Before removing or replacing any of the specified individuals or 
facilities, the Contractor shall notify the Contracting Officer, in 
writing, before the change becomes effective. The Contractor shall 
submit sufficient information to support the proposed action and to 
enable the Contracting Officer to evaluate the potential impact of the 
change on this contract. The Contractor shall not remove or replace 
personnel or facilities until the Contracting Officer approves the 
change.
    The Key Personnel or Facilities under this Contract:

(specify key personnel or facilities)

                             (End of clause)



3052.216-70  Evaluation of offers subject to an economic price adjustment 
clause.

    As prescribed in (HSAR) 48 CFR 3016.203-470, insert a provision 
substantially the same as the following:

Evaluation of Offers Subject to an Economic Price Adjustment Clause (DEC 
                                  2003)

    Offers shall be evaluated without adding an amount for an economic 
price adjustment. Offers will be rejected which: (1) Increase the 
stipulated ceiling; (2) limit the downward adjustment; or (3) delete the 
economic price adjustment clause. If the offer stipulates a ceiling 
lower than that included in the solicitation, the lower ceiling will be 
incorporated into any resulting contract.

                           (End of provision)



3052.216-71  Determination of award fee.

    As prescribed in (HSAR) 48 CFR 3016.406(e)(1)(i), insert a clause 
substantially the same as the following:

                  Determination of Award Fee (DEC 2003)

    (a) The Government shall evaluate contractor performance at the end 
of each specified evaluation period(s) to determine the amount of award. 
The contractor agrees that the amount of award and the award fee 
methodology are unilateral decisions to be made at the sole discretion 
of the Government.
    (b) Contractor performance shall be evaluated according to a 
Performance Evaluation Plan. The contractor shall be periodically 
informed of the quality of its performance and areas in which 
improvements are expected.
    (c) The contractor shall be promptly advised, in writing, of the 
determination and reasons why the award fee was or was not earned. The 
contractor may submit a performance self-evaluation for each evaluation 
period. The amount of award is at the sole discretion of the Government 
but any self-evaluation received within ------ (insert number) days 
after the end of the current evaluation period will be given such 
consideration, as may be deemed appropriate by the Government.
    (d) The Government may specify that a fee not earned during a given 
evaluation period may be accumulated and be available for allocation to 
one or more subsequent periods. In that event, the distribution of award 
fee shall be adjusted to reflect such allocations.

[[Page 109]]

                             (End of clause)



3052.216-72  Performance evaluation plan.

    As prescribed in (HSAR) 48 CFR 3016.406(e)(i)(ii), insert a clause 
substantially the same as the following:

                 Performance Evaluation Plan (DEC 2003)

    (a) A Performance Evaluation Plan shall be unilaterally established 
by the Government based on the criteria stated in the contract and used 
for the determination of award fee. This plan shall include the criteria 
used to evaluate each area and the percentage of award fee (if any) 
available for each area. A copy of the plan shall be provided to the 
contractor ------ (insert number) calendar days prior to the start of 
the first evaluation period.
    (b) The criteria contained within the Performance Evaluation Plan 
may relate to: (1) Technical (including schedule) requirements if 
appropriate; (2) Management; and (3) Cost.
    (c) The Performance Evaluation Plan may, consistent with the 
contract, be revised unilaterally by the Government at any time during 
the period of performance. Notification of such changes shall be 
provided to the contractor ------ (insert number) calendar days prior to 
the start of the evaluation period to which the change will apply.

                             (End of clause)



3052.216-73  Distribution of award fee.

    As prescribed in (HSAR) 48 CFR 3016.406(e)(1)(iii), insert a clause 
substantially the same as the following:

                  Distribution of Award Fee (DEC 2003)

    (a) The total amount of award fee available under this contract is 
assigned according to the following evaluation periods and amounts:

Evaluation Period:
Available Award Fee:
(insert appropriate information)

    (b) Payment of the base fee and award fee shall be made, provided 
that after payment of 85 percent of the base fee and potential award 
fee, the Government may withhold further payment of the base fee and 
award fee until a reserve is set aside in an amount that the Government 
considers necessary to protect its interest. This reserve shall not 
exceed 15 percent of the total base fee and potential award fee or 
$100,000, whichever is less.
    (c) In the event of contract termination, either in whole or in 
part, the amount of award fee available shall represent a pro rata 
distribution associated with evaluation period activities or events as 
determined by the Government.
    (d) The Government will promptly make payment of any award fee upon 
the submission by the contractor to the contracting officer's authorized 
representative, of a public voucher or invoice in the amount of the 
total fee earned for the period evaluated. Payment may be made without 
using a contract modification.

                             (End of clause)



3052.216-74  Settlement of letter contract.

    As prescribed in (HSAR) 48 CFR 3016.603-4, insert a clause 
substantially the same as the following:

                Settlement of Letter Contract (DEC 2003)

    (a) This contract constitutes the definitive contract contemplated 
by letter contract ------ (insert number) issued on ------ (insert 
effective date). It supersedes the letter contract and its modification 
numbered---- (insert number(s)). To the extent there are inconsistencies 
between the definitive contract and the letter contract, the former 
governs.
    (b) The cost(s) and fee(s), or price(s), established in this 
definitive contract represents full and complete settlement of letter 
contract ------ (insert number) and modification numbered ------ (insert 
number(s)). Payment of the fee agreed upon or profit withheld pending 
definitization of the letter contract, may start immediately at the rate 
and times stated within this contract.

                             (End of clause)



3052.217-90  Delivery and Shifting of Vessel (USCG).

    As prescribed in the USCG guidance at (HSAR) 48 CFR 3017.9000(a) and 
(b), insert the following clause:

               Delivery and Shifting of Vessel (DEC 2003)

    The Government shall deliver the vessel to the Contractor at his 
place of business. Upon completion of the work, the Government shall 
accept delivery of the vessel at the Contractor's place of business. The 
Contractor shall provide, at no additional charge, upon 24 hours' 
advance notice, a tug or tugs and docking pilot, acceptable to the 
Contracting Officer, to assist in handling the vessel between (to and 
from) the Contractor's plant and the nearest point in a waterway 
regularly navigated by vessels of equal or greater draft and length. 
While the vessel is in the hands of the Contractor, any necessary 
towage, cartage, or other transportation between ship and shop or 
elsewhere, which may be incident to the work herein

[[Page 110]]

specified, shall be furnished by the Contractor without additional 
charge to the Government.

                             (End of clause)



3052.217-91  Performance (USCG).

    As prescribed in USCG guidance at (HSAR) 48 CFR 3017.9000(a) and 
(b), insert the following clause:

                         Performance (DEC 2003)

    (a) Upon the award of the contract, the Contractor shall promptly 
start the work specified and shall diligently prosecute the work to 
completion. The Contractor shall not start work until the contract has 
been awarded except in the case of emergency work ordered by the 
Contracting Officer in writing.
    (b) The Government shall deliver the vessel described in the 
contract at the time and location specified in the contract. Upon 
completion of the work, the Government shall accept delivery of the 
vessel at the time and location specified in the contract.
    (c) The Contractor shall without charge,--
    (1) Make available to personnel of the vessel while in dry dock or 
on a marine railway, sanitary lavatory and similar facilities at the 
plant acceptable to the Contracting Officer;
    (2) Supply and maintain suitable brows and gangways from the pier, 
dry dock, or marine railway to the vessel;
    (3) Treat salvage, scrap or other ship's material of the Government 
resulting from performance of the work as items of Government-furnished 
property, in accordance with the Government Property (Fixed Price 
Contracts) clause;
    (4) Perform, or pay the cost of, any repair, reconditioning or 
replacement made necessary as the result of the use by the Contractor of 
any of the vessel's machinery, equipment or fittings, including, but not 
limited to, winches, pumps, rigging, or pipe lines; and
    (5) Furnish suitable offices, office equipment and telephones at or 
near the site of the work for the Government's use.
    (d) The contract will state whether dock and sea trials are required 
to determine whether or not the Contractor has satisfactorily performed 
the work.
    (1) If dock and sea trials are required, the vessel shall be under 
the control of the vessel's commander and crew.
    (2) The Contractor shall not conduct dock and sea trials not 
specified in the contract without advance approval of the Contracting 
Officer. Dock and sea trials not specified in the contract shall be at 
the Contractor's expense and risk.
    (3) The Contractor shall provide and install all fittings and 
appliances necessary for dock and sea trials. The Contractor shall be 
responsible for care, installation, and removal of instruments and 
apparatus furnished by the Government for use in the trials.

                             (End of clause)



3052.217-92  Inspection and manner of doing work (USCG).

    As prescribed in USCG guidance at (HSAR) 48 CFR 3017.9000(a) and 
(b), insert the following clause:

             Inspection and Manner of Doing Work (DEC 2003)

    (a) The Contractor shall perform work in accordance with the 
contract, any drawings and specifications made a part of the job order, 
and any change or modification issued under the Changes clause.
    (b)(1) Except as provided in paragraph (b)(2) of this clause, and 
unless otherwise specifically provided in the contract, all operational 
practices of the Contractor and all workmanship, material, equipment, 
and articles used in the performance of work under this contract shall 
be in accordance with the best commercial marine practices and the rules 
and requirements of all appropriate regulatory bodies including, but not 
limited to the American Bureau of Shipping, the U.S. Coast Guard, and 
the Institute of Electrical and Electronic Engineers, in effect at the 
time of Contractor's submission of offer, and shall be intended and 
approved for marine use.
    (2) When Navy specifications are specified in the contract, the 
Contractor shall follow Navy standards of material and workmanship.
    (c) The Government may inspect and test all material and workmanship 
at any time during the Contractor's performance of the work.
    (1) If, prior to delivery, the Government finds any material or 
workmanship is defective or not in accordance with the contract, in 
addition to its rights under the Guarantee clause, the Government may 
reject the defective or nonconforming material or workmanship and 
require the Contractor to correct or replace it at the Contractor's 
expense.
    (2) If the Contractor fails to proceed promptly with the replacement 
or correction of the material or workmanship, the Government may replace 
or correct the defective or nonconforming material or workmanship and 
charge the Contractor the excess costs incurred.
    (3) As specified in the contract, the Contractor shall provide and 
maintain an inspection system acceptable to the Government.
    (4) The Contractor shall maintain complete records of all inspection 
work and shall make them available to the Government

[[Page 111]]

during performance of the contract and for 90 days after the completion 
of all work required.
    (d) The Contractor shall not permit any welder to work on a vessel 
unless the welder is, at the time of the work, qualified to the 
standards established by the U.S. Coast Guard, American Bureau of 
Shipping, or Department of the Navy for the type of welding being 
performed. Qualifications of a welder shall be as specified in the 
contract.
    (e) The Contractor shall--
    (1) Exercise reasonable care to protect the vessel from fire;
    (2) Maintain a reasonable system of inspection over activities 
taking place in the vicinity of the vessel's magazines, fuel oil tanks, 
or storerooms containing flammable materials.
    (3) Maintain a reasonable number of hose lines ready for immediate 
use on the vessel at all times while the vessel is berthed alongside the 
Contractor's pier or in dry dock or on a marine railway;
    (4) Unless otherwise provided in the contract, provide sufficient 
security patrols to reasonably maintain a fire watch for protection of 
the vessel when it is in the Contractor's custody;
    (5) To the extent necessary, clean, wash, and steam out or otherwise 
make safe, all tanks under alteration or repair.
    (6) Furnish the Contracting Officer a ``gas-free'' or ``safe-for-
hotwork'' certificate before any hot work is done on a tank;
    (7) Treat the contents of any tank as Government property in 
accordance with the Government Property (Fixed-Price Contracts) clause; 
and
    (8) Dispose of the contents of any tank only at the direction, or 
with the concurrence, of the Contracting Officer.
    (9) Be responsible for the proper closing of all openings to the 
vessel's underwater structure upon which work has been performed. The 
contractor additionally must advise the COTR of the status of all valves 
closures and openings for which the contractor's workers were 
responsible.
    (f) Except as otherwise provided in the contract, when the vessel is 
in the custody of the Contractor or in dry dock or on a marine railway 
and the temperature is expected to go as low as 35 Fahrenheit, the 
Contractor shall take all necessary steps to--
    (1) Keep all hose pipe lines, fixtures, traps, tanks, and other 
receptacles on the vessel from freezing; and
    (2) Protect the stern tube and propeller hubs from frost damage.
    (g) The Contractor shall, whenever practicable--
    (1) Perform the required work in a manner that will not interfere 
with the berthing and messing of Government personnel attached to the 
vessel; and
    (2) Provide Government personnel attached to the vessel access to 
the vessel at all times.
    (h) Government personnel attached to the vessel shall not interfere 
with the Contractor's work or workers.
    (i)(1) The Government does not guarantee the correctness of the 
dimensions, sizes, and shapes set forth in any contract, sketches, 
drawings, plans, or specifications prepared or furnished by the 
Government, unless the contract requires that the Contractor perform the 
work prior to any opportunity to inspect.
    (2) Except as stated in paragraph (i)(1) of this clause, and other 
than those parts furnished by the Government, and the Contractor shall 
be responsible for the correctness of the dimensions, sizes, and shapes 
of parts furnished under this agreement.
    (j) The Contractor shall at all times keep the site of the work on 
the vessel free from accumulation of waste material or rubbish caused by 
its employees or the work. At the completion of the work, unless the 
contract specifies otherwise, the Contractor shall remove all rubbish 
from the site of the work and leave the immediate vicinity of the work 
area ``broom clean.''

                             (End of clause)



3052.217-93  Subcontracts (USCG).

    As prescribed in USCG guidance at (HSAR) 48 CFR 3017.9000(a) and 
(b), insert the following clause:

                         Subcontracts (DEC 2003)

    (a) Nothing contained in the contract shall be construed as creating 
any contractual relationship between any subcontractor and the 
Government. The divisions or sections of the specifications are not 
intended to control the Contractor in dividing the work among 
subcontractors or to limit the work performed by any trade.
    (b) The Contractor shall be responsible to the Government for acts 
and omissions of its own employees, and of subcontractors and their 
employees. The Contractor shall also be responsible for the coordination 
of the work of the trades, subcontractors, and material men.
    (c) The Contractor shall, without additional expense to the 
Government, employ specialty subcontractors where required by the 
specifications.
    (d) The Government or its representatives will not undertake to 
settle any differences between the Contractor and its subcontractors, or 
between subcontractors.

[[Page 112]]

                             (End of clause)



3052.217-94  Lay days (USCG).

    As prescribed in USCG guidance at (HSAR) 48 CFR 3017.9000(a) and 
(b), insert the following clause:

                           Lay Days (DEC 2003)

    (a) Lay day time will be paid by the Government at the Contractor's 
stipulated bid price for this item of the contract when the vessel 
remains on the dry dock or marine railway as a result of any change that 
involves work in addition to that required under the basic contract.
    (b) No lay day time shall be paid until all items of the basic 
contract for which a price was established by the Contractor and for 
which docking of the vessel was required have been satisfactorily 
completed and accepted.
    (c) Days of hauling out and floating, whatever the hour, shall not 
be paid as lay day time, and days when no work is performed by the 
Contractor shall not be paid as lay day time.
    (d) Payment of lay day time shall constitute complete compensation 
for all costs, direct and indirect, to reimburse the Contractor for use 
of dry dock or marine railway.

                             (End of clause)



3052.217-95  Liability and insurance (USCG).

    As prescribed in USCG guidance at (HSAR) 48 CFR 3017.9000(a) and 
(b), insert the following clause:

                   Liability and Insurance (DEC 2003)

    (a) The Contractor shall exercise its best efforts to prevent 
accidents, injury, or damage to all employees, persons, and property, in 
and about the work, and to the vessel or part of the vessel upon which 
work is done.
    (b) Loss or damage to the vessel, materials, or equipment. (1) 
Unless otherwise directed or approved in writing by the Contracting 
Officer, the Contractor shall not carry insurance against any form of 
loss or damage to the vessel(s) or to the materials or equipment to 
which the Government has title or which have been furnished by the 
Government for installation by the Contractor. The Government assumes 
the risks of loss of and damage to that property.
    (2) The Government does not assume any risk with respect to loss or 
damage compensated for by insurance or otherwise or resulting from risks 
with respect to which the Contractor has failed to maintain insurance, 
if available, as required or approved by the Contracting Officer.
    (3) The Government does not assume risk of and will not pay for any 
costs of the following:
    (i) Inspection, repair, replacement, or renewal of any defects in 
the vessel(s) or material and equipment due to--
    (A) Defective workmanship performed by the Contractor or its 
subcontractors;
    (B) Defective materials or equipment furnished by the Contractor or 
its subcontractors; or
    (C) Workmanship, materials, or equipment which do not conform to the 
requirements of the contract, whether or not the defect is latent or 
whether or not the nonconformance is the result of negligence.
    (ii) Loss, damage, liability, or expense caused by, resulting from, 
or incurred as a consequence of any delay or disruption, willful 
misconduct or lack of good faith by the Contractor or any of its 
representatives that have supervision or direction of--
    (A) All or substantially all of the Contractor's business; or
    (B) All or substantially all of the Contractor's operation at any 
one plant.
    (4) As to any risk that is assumed by the Government, the Government 
shall be subrogated to any claim, demand or cause of action against 
third parties that exists in favor of the Contractor. If required by the 
Contracting Officer, the Contractor shall execute a formal assignment or 
transfer of the claim, demand, or cause of action.
    (5) No party other than the Contractor shall have any right to 
proceed directly against the Government or join the Government as a 
codefendant in any action.
    (6) Notwithstanding the foregoing, the Contractor shall bear the 
first $5,000 of loss or damage from each occurrence or incident, the 
risk of which the Government would have assumed under the provision of 
this paragraph (b).
    (c) Indemnification. The Contractor indemnifies the Government and 
the vessel and its owners against all claims, demands, or causes of 
action to which the Government, the vessel or its owner(s) might be 
subject as a result of damage or injury (including death) to the 
property or person of anyone other than the Government or its employees, 
or the vessel or its owner, arising in whole or in part from the 
negligence or other wrongful act of the Contractor, or its agents or 
employees, or any subcontractor, or its agents or employees.
    (1) The Contractor's obligation to indemnify under this paragraph 
shall not exceed the sum of $300,000 as a consequence of any single 
occurrence with respect to any one vessel.
    (2) The indemnity includes, without limitation, suits, actions, 
claims, costs, or demands of any kind, resulting from death, personal 
injury, or property damage occurring during the period of performance of

[[Page 113]]

work on the vessel or within 90 days after redelivery of the vessel. For 
any claim, etc., made after 90 days, the rights of the parties shall be 
as determined by other provisions of this contract and by law. The 
indemnity does apply to death occurring after 90 days where the injury 
was received during the period covered by the indemnity.
    (d) Insurance. (1) The Contractor shall, at its own expense, obtain 
and maintain the following insurance--
    (i) Casualty, accident, and liability insurance, as approved by the 
Contracting Officer, insuring the performance of its obligations under 
paragraph (c) of this clause.
    (ii) Workers Compensation Insurance (or its equivalent) covering the 
employees engaged on the work.
    (2) The Contractor shall ensure that all subcontractors engaged on 
the work obtain and maintain the insurance required in paragraph (d)(1) 
of this clause.
    (3) Upon request of the Contracting Officer, the Contractor shall 
provide evidence of the insurance required by paragraph (d) of this 
clause.
    (e) The Contractor shall not make any allowance in the contract 
price for the inclusion of any premium expense or charge for any reserve 
made on account of self-insurance for coverage against any risk assumed 
by the Government under this clause.
    (f) The Contractor shall give the Contracting Officer written notice 
as soon as practicable after the occurrence of a loss or damage for 
which the Government has assumed the risk.
    (1) The notice shall contain full details of the loss or damage.
    (2) If a claim or suit is later filed against the Contractor as a 
result of the event, the Contractor shall immediately deliver to the 
Government every demand, notice, summons, or other process received by 
the Contractor or its employees or representatives.
    (3) The Contractor shall cooperate with the Government and, upon 
request, shall assist in effecting settlements, securing and giving 
evidence, obtaining the attendance of witnesses, and in the conduct of 
suits. The Government shall reimburse the Contractor for expenses 
incurred in this effort, other than the cost of maintaining the 
Contractor's usual organization.
    (4) The Contractor shall not, except at its own expense, voluntarily 
make any payments, assume any obligation, or incur any expense other 
than what would be imperative for the protection of the vessel(s) at the 
time of the event.
    (g) In the event of loss of or damage to any vessel(s), material, or 
equipment which may result in a claim against the Government under the 
insurance provisions of this contract, the Contractor shall promptly 
notify the Contracting Officer of the loss or damage. The Contracting 
Officer may, without prejudice to any right of the Government, either--
    (1) Order the Contractor to proceed with replacement or repair, in 
which event the Contractor shall effect the replacement or repair;
    (i) The Contractor shall submit to the Contracting Officer a request 
for reimbursement of the cost of the replacement or repair together with 
whatever supporting documentation the Contracting Officer may reasonably 
require, and shall identify the request as being submitted under the 
Insurance clause of this contract.
    (ii) If the Government determines that the risk of the loss or 
damage is within the scope of the risks assumed by the Government under 
this clause, the Government will reimburse the Contractor for the 
reasonable allowable cost of the replacement or repair, plus a 
reasonable profit (if the work or replacement or repair was performed by 
the Contractor) less the deductible amount specified in paragraph (b) of 
this clause.
    (iii) Payments by the Government to the Contractor under this clause 
are outside the scope of and shall not affect the pricing structure of 
the contract, and are additional to the compensation otherwise payable 
to the Contractor under this contract; or
    (2) Decide that the loss or damage shall not be replaced or repaired 
and in that event, the Contracting Officer shall--
    (i) Modify the contract appropriately, consistent with the reduced 
requirements reflected by the unreplaced or unrepaired loss or damage; 
or
    (ii) Terminate the repair of any part or all of the vessel(s) under 
the Termination for Convenience of the Government clause of this 
contract.

                             (End of clause)



3052.217-96  Title (USCG).

    As prescribed in USCG guidance at (HSAR) 48 CFR 3017.9000(a) and 
(b), insert the following clause:

                            Title (DED 2003)

    (a) Unless otherwise provided, title to all materials and equipment 
to be incorporated in a vessel in the performance of this contract shall 
vest in the Government upon delivery at the location specified for the 
performance of the work.
    (b) Upon completion of the contract, or with the approval of the 
Contracting Officer during performance of the contract, all Contractor-
furnished materials and equipment not incorporated in, or placed on, any 
vessel, shall become the property of the Contractor, unless the 
Government has reimbursed the Contractor for the cost of the materials 
and equipments.

[[Page 114]]

    (c) The vessel, its equipment, movable stores, cargo, or other 
ship's materials shall not be considered Government-furnished property.

                             (End of clause)



3052.217-97  Discharge of liens (USCG).

    As prescribed in USCG guidance at (HSAR) 48 CFR 3017.9000(a) and 
(b), insert the following clause:

                      Discharge of Liens (DEC 2003)

    (a) The Contractor shall immediately discharge or cause to be 
discharged, any lien or right in rem of any kind, other than in favor of 
the Government, that exists or arises in connection with work done or 
materials furnished under this contract.
    (b) If any such lien or right in rem is not immediately discharged, 
the Government, at the expense of the Contractor, may discharge, or 
cause to be discharged, the lien or right.

                             (End of clause)



3052.217-98  Delays (USCG).

    As prescribed in USCG guidance at (HSAR) 48 CFR 3017.9000(a) and 
(b), insert the following clause:

                            Delays (DEC 2003)

    When during the performance of this contract the Contractor is 
required to delay work on a vessel temporarily, due to orders or actions 
of the Government respecting stoppage of work to permit shifting the 
vessel, stoppage of hot work to permit bunkering, stoppage of work due 
to embarking or debarking passengers and loading or discharging cargo, 
and the Contractor is not given sufficient advance notice or is 
otherwise unable to avoid incurring additional costs on account thereof, 
an equitable adjustment shall be made in the price of the contract 
pursuant to the ``Changes'' clause.

                             (End of clause)



3052.217-99  Department of Labor safety and health regulations for ship 
repairing (USCG).

    As prescribed in USCG guidance at (HSAR) 48 CFR 3017.9000(a) and 
(b), insert the following clause:

 Department of Labor Safety and Health Regulations for Ship Repair (DEC 
                                  2003)

    Nothing contained in this contract shall relieve the Contractor of 
any obligations it may have to comply with--
    (a) The Occupational Safety and Health Act of 1970 (29 U.S.C. 651, 
et seq.);
    (b) The Safety and Health Regulations for Ship Repairing (29 CFR 
part 1915); or
    (c) Any other applicable Federal, State, and local laws, codes, 
ordinances, and regulations.

                             (End of clause)



3052.217-100  Guarantee (USCG).

    As prescribed in USCG guidance at (HSAR) 48 CFR 3017.9000(c), insert 
the following clause:

                          Guarantee (DEC 2003)

    (a) In the event any work performed or materials furnished by the 
contractor prove defective or deficient within 60 days from the date of 
redelivery of the vessel(s), the Contractor, as directed by the 
Contracting Officer and at its own expense, shall correct and repair the 
deficiency to the satisfaction of the Contracting Officer.
    (b) If the Contractor or any subcontractor has a guarantee for work 
performed or materials furnished that exceeds the 60 day period, the 
Government shall be entitled to rely upon the longer guarantee until its 
expiration.
    (c) With respect to any individual work item identified as 
incomplete at the time of redelivery of the vessel(s), the guarantee 
period shall run from the date the item is completed.
    (d) If practicable, the Government shall give the Contractor an 
opportunity to correct the deficiency.
    (1) If the Contracting Officer determines it is not practicable or 
is otherwise not advisable to return the vessel(s) to the Contractor, or 
the Contractor fails to proceed with the repairs promptly, the 
Contracting Officer may direct that the repairs be performed elsewhere, 
at the Contractor's expense.
    (2) If correction and repairs are performed by other than the 
Contractor, the Contracting Officer may discharge the Contractor's 
liability by making an equitable deduction in the price of the contract.
    (e) The Contractor's liability shall extend for an additional 90-day 
guarantee period on those defects or deficiencies that the Contractor 
corrected.
    (f) At the option of the Contracting officer, defects and 
deficiencies may be left uncorrected. In that event, the Contractor and 
Contracting Officer shall negotiate an equitable reduction in the 
contract price. Failure to agree upon an equitable reduction shall 
constitute a dispute under the Disputes clause of this contract.

[[Page 115]]

                             (End of clause)



3052.219-70  Small Business subcontracting program reporting.

    As prescribed in (HSAR) 48 CFR 3019.708-70(a), insert the following 
clause:

     The Small Business Subcontracting Program Reporting (DEC 2003)

    (a) The Contractor shall submit the Summary Subcontract Report 
(Standard Form 295 (SF-295)) to the Department of Homeland Security, 
Office of Small and Disadvantaged Business Utilization, Washington, DC, 
20528.
    (b) The Contractor shall include this clause in all subcontracts 
that include the clause at (FAR) 48 CFR 52.219-9.

                             (End of clause)



3052.219-71  DHS mentor-prot[eacute]g[eacute] program.

    As prescribed in (HSAR) 48 CFR 3019.708-70(b), insert the following 
clause:

           DHS Mentor-Prot[eacute]g[eacute] Program (DEC 2003)

    (a) Large businesses are encouraged to participate in the DHS 
Mentor-Prot[eacute]g[eacute] program for the purpose of providing 
developmental assistance to eligible small business 
prot[eacute]g[eacute] entities to enhance their capabilities and 
increase their participation in DHS contracts.
    (b) The program consists of:
    (1) Mentor firms, which are large prime contractors capable of 
providing developmental assistance;
    (2) Prot[eacute]g[eacute] firms, which are small businesses, 
veteran-owned small businesses, service-disabled veteran-owned small 
businesses, HUBZone small businesses, small disadvantaged businesses, 
and women-owned small business concerns; and
    (3) Mentor-Prot[eacute]g[eacute] agreements, approved by the DHS 
OSDBU.
    (c) Mentor participation in the program means providing business 
developmental assistance to aid Prot[eacute]g[eacute]s in developing the 
requisite expertise to effectively compete for and successfully perform 
DHS contracts and subcontracts.
    (d) Large business prime contractors, serving as mentors in the DHS 
mentor-prot[eacute]g[eacute] program, are eligible for a post-award 
incentive for subcontracting plan credit by recognizing costs incurred 
by a mentor firm in providing assistance to a prot[eacute]g[eacute] firm 
and using this credit for purposes of determining whether the mentor 
firm attains a subcontracting plan participation goal applicable to the 
mentor firm under a DHS contract. The amount of credit given to a mentor 
firm for these prot[eacute]g[eacute] developmental assistance costs 
shall be calculated on a dollar for dollar basis and reported via the 
SF-295; for example, the mentor/large business prime contractor reports 
a $10,000 subcontract to the prot[eacute]g[eacute]/small business 
subcontractor and $5,000 of developmental assistance to the 
prot[eacute]g[eacute]/small business subcontractor as $15,000 ($10,000 
traditional subcontract plus $5,000 in developmental assistance for a 
total of $15,000).
    (e) Contractors interested in participating in the program are 
encouraged to contact the DHS OSDBU for more information.

                             (End of clause)



3052.219-72  Evaluation of prime contractor participation in the DHS 
mentor-prot[eacute]g[eacute] program.

    As prescribed in (HSAR) 48 CFR 3019.708-70(c), insert the following 
clause:

     Evaluation of Prime Contractor Participation in the DHS Mentor-
                Prot[eacute]g[eacute] Program (DEC 2003)

    This solicitation contains a source selection factor or subfactor 
regarding participation in the DHS Mentor-Prot[eacute]g[eacute] Program. 
In order to receive credit under the source selection factor or 
subfactor, the offeror shall provide a signed letter of mentor-
prot[eacute]g[eacute] agreement approval from the DHS OSDBU.

                             (End of clause)



3052.222-70  Strikes or picketing affecting timely completion of the 
contract work.

    As prescribed in (HSAR) 48 CFR 3022.101-71(a), insert the following 
clause:

 Strikes or Picketing Affecting Timely Completion of the Contract Work 
                               (DED 2003)

    Notwithstanding any other provision hereof, the Contractor is 
responsible for delays arising out of labor disputes, including but not 
limited to strikes, if such strikes are reasonably avoidable. A delay 
caused by a strike or by picketing which constitutes an unfair labor 
practice is not excusable unless the Contractor takes all reasonable and 
appropriate action to end such a strike or picketing, such as the filing 
of a charge with the National Labor Relations Board, the use of other 
available Government procedures, and the use of private boards or 
organizations for the settlement of disputes.

[[Page 116]]

                             (End of clause)



3052.222-71  Strikes or picketing affecting access to a DHS facility.

    As prescribed in (HSAR) 48 CFR 3022.101-71(b), insert the following 
clause:

   Strikes or Picketing Affecting Access to a DHS Facility (DEC 2003)

    If the Contracting Officer notifies the Contractor in writing that a 
strike or picketing: (a) is directed at the Contractor or subcontractor 
or any employee of either; and (b) impedes or threatens to impede access 
by any person to a DHS facility where the site of the work is located, 
the Contractor shall take all appropriate action to end such strike or 
picketing, including, if necessary, the filing of a charge of unfair 
labor practice with the National Labor Relations Board or the use of 
other available judicial or administrative remedies.

                             (End of clause)



3052.222-90  Local hire (USCG).

    As prescribed in USCG guidance at (HSAR) 48 CFR 3022.9001, insert 
the following clause:

                          Local Hire (DEC 2003)

    (a) When performing a contract in a State with an unemployment rate 
in excess of the national average determined by the Secretary of Labor, 
the Contractor shall employ individuals who are local residents and who, 
in the case of any craft or trade, possess or would be able to acquire 
promptly, the necessary skills.
    (b) Local resident defined. As used in this section, ``local 
resident'' means a resident of, or an individual who commutes daily to a 
State described in subsection (a).
    (c) The Secretary of Homeland Security may waive the requirements of 
this subsection in the interest of national security or economic 
efficiency.

                             (End of clause)



3052.223-70  Removal or disposal of hazardous substances--applicable 
licenses and permits.

    As prescribed in (HSAR) 48 CFR 3023.303, insert the following 
clause:

  Removal or Disposal of Hazardous Substances--Applicable Licenses and 
                           Permits (DEC 2003)

    The Contractor certifies that it has ---- does not have ---- all 
licenses and permits required by Federal, State, and local laws to 
perform hazardous substance(s) removal or disposal services. If the 
Contractor does not currently possess these documents, it shall obtain 
all requisite licenses and permits within ---- days after date of award. 
The Contractor shall provide evidence of said documents to the 
Contracting Officer or designated Government representative prior to 
commencement of work under the contract.

                             (End of clause)



3052.223-90  Accident and fire reporting (USCG).

    As prescribed in USCG guidance at (HSAR) 48 CFR 3023.9000(a), insert 
the following clause:

                 Accident and Fire Reporting (DEC 2003)

    (a) The Contractor shall report to the Contracting Officer any 
accident or fire occurring at the site of the work that causes:
    (1) A fatality or the loss of at least one lost workday on the part 
of any employee of the Contractor or subcontractor at any tier;
    (2) Damage of $1,000 or more to Federal real or personal property; 
either real or personal;
    (3) Damage of $1,000 or more to Contractor or subcontractor owned or 
leased motor vehicles or mobile equipment; or
    (4) Damage for which a contract time extension may be requested.
    (b) Accident and fire reports required by paragraph (a) above shall 
be accomplished by the following means:
    (1) Accidents or fires resulting in a death, hospitalization of five 
or more persons, or destruction of Federal real or personal property, 
the total value of which is estimated at $100,000 or more, shall be 
reported immediately by telephone to the Contracting Officer or his/her 
authorized representative and shall be confirmed by telegram, facsimile 
or e-mail transmission within 24 hours to the Contracting Officer. Such 
telegram or facsimile transmission shall state all known facts as to 
extent of injury and damage and as to cause of the accident or fire.
    (2) Other accident and fire reports required by paragraph (a) above 
may be reported by the Contractor using a state, private insurance 
carrier, or Contractor accident report form which provides for the 
statement of:
    (i) The extent of injury; and
    (ii) The damage and cause of the accident or fire.
    Such report shall be mailed or otherwise delivered to the 
Contracting Officer within 48 hours of the occurrence of the accident or 
fire.
    (c) The Contractor shall assure compliance by subcontractors at all 
tiers with the requirements of this clause.

[[Page 117]]

                             (End of clause)



3052.228-70  Insurance.

    As prescribed in (HSAR) 48 CFR 3028.310-70 and 3028.311-1, insert a 
clause substantially the same as follows. The contracting officer may 
specify additional kinds (e.g., aircraft public and passenger liability, 
vessel liability) or increased amounts of insurance.

                          Insurance (DEC 2003)

    In accordance with the clause entitled ``Insurance--Work on a 
Government Installation'' [or Insurance--Liability to Third Persons] in 
Section I, insurance of the following kinds and minimum amounts shall be 
provided and maintained during the period of performance of this 
contract:
    (a) Worker's compensation and employer's liability. The contractor 
shall, as a minimum, meet the requirements specified at (FAR) 48 CFR 
28.307-2(a).
    (b) General liability. The contractor shall, as a minimum, meet the 
requirements specified at (FAR) 48 CFR 28.307-2(b).
    (c) Automobile liability. The contractor shall, as a minimum, meet 
the requirements specified at (FAR) 48 CFR 28.307-2(c).

                             (End of clause)



3052.228-90  Notification of Miller Act payment bond protection (USCG).

    As prescribed in USCG guidance at (HSAR) 48 CFR 3028.106-490, insert 
the following clause:

      Notification of Miller Act Payment Bond Protection (DEC 2003)

    This notice clause shall be inserted by first tier subcontractors in 
all their subcontracts and shall contain information pertaining to the 
surety that provided the payment bond under the prime contract.
    (a) The prime contract is subject to the Miller Act (40 U.S.C. 270), 
under which the prime contractor has obtained a payment bond. This 
payment bond may provide certain unpaid employees, suppliers, and 
subcontractors a right to sue the bonding surety under the Miller Act 
for amounts owned for work performed and materials delivery under the 
prime contract.
    (b) Persons believing that they have legal remedies under the Miller 
Act should consult their legal advisor regarding the proper steps to 
take to obtain these remedies. This notice clause does not provide any 
party any rights against the Federal Government, or create any 
relationship, contractual or otherwise, between the Federal Government 
and any private party.
    (c) The surety which has provided the payment bond under the prime 
contract is:
________________________________________________________________________
(Name)
________________________________________________________________________
(Street Address)
________________________________________________________________________
(City, State, Zip Code)
________________________________________________________________________
(Contact & Tel. No.)
________________________________________________________________________

                             (End of clause)



3052.228-91  Loss of or damage to leased aircraft (USCG).

    As prescribed in USCG guidance at (HSAR) 48 CFR 3028.306-90(a) and 
(b), insert the following clause:

             Loss of or Damage to Leased Aircraft (DEC 2003)

    (a) The Government assumes all risk of loss of, or damage (except 
normal wear and tear) to, the leased aircraft during the term of this 
lease while the aircraft is in the possession of the Government.
    (b) In the event of damage to the aircraft, the Government, at its 
option, shall make the necessary repairs with its own facilities or by 
contract, or pay the Contractor the reasonable cost of repair of the 
aircraft.
    (c) In the event the aircraft is lost or damaged beyond repair, the 
Government shall pay the Contractor a sum equal to the fair market value 
of the aircraft at the time of such loss or damage, which value may be 
specifically agreed to in clause 3052.228-92, ``Fair Market Value of 
Aircraft,'' less the salvage value of the aircraft. However, the 
Government may retain the damaged aircraft or dispose of it as it 
wishes. In that event, the Contractor will be paid the fair market value 
of the aircraft as stated in the clause.
    (d) The Contractor agrees that the contract price does not include 
any cost attributable to hull insurance or to any reserve fund it has 
established to protect its interest in the aircraft. If, in the event of 
loss or damage to the leased aircraft, the Contractor receives 
compensation for such loss or damage in any form from any source, the 
amount of such compensation shall be:
    (1) Credited to the Government in determining the amount of the 
Government's liability; or
    (2) For an increment of value of the aircraft beyond the value for 
which the Government is responsible.
    (e) In the event of loss of or damage to the aircraft, the 
Government shall be subrogated to all rights of recovery by the 
Contractor against third parties for such loss or damage and the 
Contractor shall promptly assign such rights in writing to the 
Government.

[[Page 118]]

                             (End of clause)



3052.228-92  Fair market value of aircraft (USCG).

    As prescribed in USCG guidance at (HSAR) 48 CFR 3028.306-90(a) and 
(c), insert the following clause:

                Fair Market Value of Aircraft (DEC 2003)

    For purposes of the clause entitled ``Loss of or Damage to Leased 
Aircraft,'' the fair market value of the aircraft to be used in the 
performance of this contract shall be the lesser of the two values set 
out in paragraphs (a) and (b) below:
    (a) $------; or
    (b) If the contractor has insured the same aircraft against loss or 
destruction in connection with other operations, the amount of such 
insurance coverage on the date of the loss or damage for which the 
Government may be responsible under this contract.

                             (End of clause)



3052.228-93  Risk and indemnities (USCG).

    As prescribed in USCG guidance at (HSAR) 48 CFR 3028.306-90(a) and 
(d), insert the following clause:

                     Risk and Indemnities (DEC 2003)

    The Contractor hereby agrees to indemnify and hold harmless the 
Government, its officers and employees from and against all claims, 
demands, damages, liabilities, losses, suits and judgments (including 
all costs and expenses incident thereto) which may be suffered by, 
accrue against, be charged to or recoverable from the Government, its 
officers and employees by reason of injury to or death of any person 
other than officers, agents, or employees of the Government or by reason 
of damage to property of others of whatsoever kind (other than the 
property of the Government, its officers, agents or employees) arising 
out of the operation of the aircraft. In the event the Contractor holds 
or obtains insurance in support of this covenant, evidence of insurance 
shall be delivered to the Contracting Officer.

                             (End of clause)



3052.231-70  Precontract costs.

    As prescribed in (HSAR) 48 CFR 3031.205-32, insert the following 
clause:

                      Precontract Costs (DEC 2003)

    The Contractor shall be entitled to reimbursement for pre-contract 
costs incurred on or after ------ in an amount not to exceed $------ 
that, if incurred after this contract had been entered into, would have 
been reimbursable under this contract.

                             (End of clause)



3052.236-70  Special precautions for work at operating airports.

    As prescribed in (HSAR) 48 CFR 3036.570, insert the following 
clause:

      Special Precautions for Work at Operating Airports (DEC 2003)

    (a) When work is to be performed at an operating airport, the 
Contractor must arrange its work schedule so as not to interfere with 
flight operations. Such operations will take precedence over 
construction convenience. Any operations of the Contractor which would 
otherwise interfere with or endanger the operations of aircraft shall be 
performed only at times and in the manner directed by the Contracting 
Officer. The Government will make every effort to reduce the disruption 
of the Contractor's operation.
    (b) Unless otherwise specified by local regulations, all areas in 
which construction operations are underway shall be marked by yellow 
flags during daylight hours and by red lights at other times. The red 
lights along the edge of the construction areas within the existing 
aprons shall be the electric type of not less than 100 watts intensity 
placed and supported as required. All other construction markings on 
roads and adjacent parking lots may be either electric or battery type 
lights. These lights and flags shall be placed so as to outline the 
construction areas and the distance between any two flags or lights 
shall not be greater than 25 feet. The Contractor shall provide adequate 
watch to maintain the lights in working condition at all times other 
than daylight hours. The hour of beginning and the hour of ending of 
daylight will be determined by the Contracting Officer.
    (c) All equipment and material in the construction areas or when 
moved outside the construction area shall be marked with airport safety 
flags during the day and when directed by the Contracting Officer, with 
red obstruction lights at nights. All equipment operating on the apron, 
taxiway, runway, and intermediate areas after darkness hours shall have 
clearance lights in conformance with instructions from the Contracting 
Officer. No construction equipment shall operate within 50 feet of 
aircraft undergoing fuel operations. Open flames are not allowed on the 
ramp except at times authorized by the Contracting Officer.
    (d) Trucks and other motorized equipment entering the airport or 
construction area shall do so only over routes determined by the 
Contracting Officer. Use of runways, aprons, taxiways, or parking areas 
as truck or equipment routes will not be permitted

[[Page 119]]

unless specifically authorized for such use. Flag personnel shall be 
furnished by the Contractor at points on apron and taxiway for safe 
guidance of its equipment over these areas to assure right of way to 
aircraft. Areas and routes used during the contract must be returned to 
their original condition by the Contractor. Airport management shall 
establish the maximum speed allowed at the airport. Vehicles shall be 
operated so as to be under safe control at all times, weather and 
traffic conditions considered. Vehicles must be equipped with head and 
taillights during the hours of darkness.

                             (End of clause)



3052.237-70  Qualifications of contractor employees.

    As prescribed in (HSAR) 48 CFR 3037.110-70(a), insert the following 
clause:

            Qualifications of Contractor Employees (DEC 2003)

    (a) ``Sensitive Information'' is any information or proprietary data 
which if subject to unauthorized access, modification, loss, or misuse 
could adversely affect the national interest, the conduct of Federal 
programs, or the privacy to which individuals are entitled under 5 
U.S.C. 552a (The Privacy Act), but that has not been specifically 
authorized under criteria established by an Executive Order or an Act of 
Congress to be kept classified in the interest of national defense or 
foreign policy.
    (b) Work under this contract may involve access to sensitive 
information. Therefore, the Contractor shall not disclose, orally or in 
writing, any sensitive information to any person unless authorized in 
writing by the Contracting Officer. For those contractor employees 
authorized access to sensitive information, the contractor shall ensure 
that these persons receive training concerning the protection and 
disclosure of sensitive information both during and after contract 
performance.
    (c) Contractor employees working on this contract must complete such 
forms, as may be necessary for security or other reasons, including the 
conduct of background investigations to determine suitability. Completed 
forms shall be submitted as directed by the Contracting Officer. Upon 
the Contracting Officer's request, the Contractor's employees shall be 
fingerprinted, or subject to other investigations as required.
    (d) The Contracting Officer may require dismissal from work those 
employees deemed incompetent, careless, insubordinate, or otherwise 
objectionable, or whose continued employment is deemed contrary to the 
public interest or inconsistent with the best interest of national 
security.
    (e) Each employee of the Contractor shall be a citizen of the United 
States of America, or an alien who has been lawfully admitted for 
permanent residence as evidenced by an Alien Registration Receipt Card 
Form I-151. An alien authorized to work shall present evidence from the 
Bureau of Citizenship and Immigration Services that employment will not 
affect his or her immigration status.
    (f) The Contractor shall include the substance of this clause in all 
subcontracts at any tier where the subcontractor may have access to 
Government facilities, sensitive information, or resources.

                             (End of clause)



3052.237-71  Information technology systems access for contractors.

    As prescribed in (HSAR) 48 CFR 3037.110-70(a) and (b), insert a 
clause substantially as follows. The contracting officer may specify 
additional IT security requirements unique to an OE.

    Information Technology Systems Access for Contractors (DEC 2003)

    (a) No contractor personnel shall start work under this contract 
that involves actual or potential access to sensitive information until 
(1) approved for access, (2) they have received a security briefing, or 
current refresher, about Information Technology (IT) security, from the 
appropriate Organizational Element (OE) Information Systems Security 
Officer (ISSO); and (3) have signed a non-disclosure agreement form. 
This user security agreement is provided as an Attachment to this 
solicitation. By signing the user security agreement, the individual 
will be acknowledging their responsibility to properly use and safeguard 
all DHS OE information technology resources and information related 
thereto. The Contracting Officer Technical Representative (COTR) for 
this contract shall arrange the aforementioned security briefing. The 
ISSO is responsible for retaining the non-disclosure documents signed 
and submitted by the contractor employees as well evidence of security 
training.
    (b) The contractor shall have access only to those areas of DHS OE 
information technology resources explicitly stated in this contract or 
approved by the COTR in writing as necessary for performance of the work 
under this contract. Information technology assets includes computer 
equipment, networking equipment, telecommunications equipment, cabling, 
network drives, computer drives, network software, computer software, 
software programs, intranet sites, and Internet sites. Any attempts by 
contractor personnel to gain access to any information technology 
resources not expressly

[[Page 120]]

authorized by the statement of work, other terms and conditions in this 
contract, or as approved in writing by the COTR, is strictly prohibited. 
In the event of violation of this provision, DHS will take appropriate 
actions with regard to the contract.
    (c) Contractor access to DHS networks from a remote location is a 
temporary privilege for mutual convenience while the contractor performs 
business for the DHS OE. It is not a right, a guarantee of access, a 
condition of the contract, nor is it Government Furnished Equipment 
(GFE).
    (d) Contractor access will be terminated for unauthorized use. The 
contractor agrees to hold and save DHS harmless from any unauthorized 
use and agrees not to request additional time or money under the 
contract for any delays resulting from unauthorized use or access.

                             (End of clause)



3052.237-72  Contractor personnel screening for unclassified information 
technology access.

    As prescribed in 3037.110-70(a) and (b), insert a clause 
substantially as follows:

 Contractor Personnel Screening for Unclassified Information Technology 
                            Access (DEC 2003)

    (a) Contractor personnel requiring privileged access or limited risk 
assessment level. Guidance for selecting the appropriate level of 
screening is based on the risk of adverse impact to DHS missions, as 
indicated in FIPS PUB 199, Standards for Security Categorization of 
Federal Information and Information Systems (Initial Public Draft).
    (b) The Contractor shall afford DHS, including the Office of 
Inspector General, access to the Contractor's and subcontractors' 
facilities, installations, operations, documentation, databases and 
personnel used in performance of the contract. Access shall be provided 
to the extent required to carry out a program of IT inspection, 
investigation and audit to safeguard against threats and hazards to the 
integrity, availability and confidentiality of DHS data or to the 
function of computer systems operated on behalf of DHS, and to preserve 
evidence of computer crime.
    (c) The Contractor shall incorporate the substance of this clause in 
all subcontracts that meet the conditions in paragraph (a) of this 
clause.

                             (End of clause)



3052.242-70  Dissemination of information--educational institutions.

    As prescribed in (HSAR) 48 CFR 3042.203-70(a), insert the following 
clause:

    Dissemination of Information--Educational Institutions (DEC 2003)

    (a) The Department of Homeland Security (DHS) desires widespread 
dissemination of the results of funded non-sensitive research. The 
Contractor, therefore, may publish (subject to the provisions of the 
``Data Rights'' and ``Patent Rights'' clauses of the contract) research 
results in professional journals, books, trade publications, or other 
appropriate media (a thesis or collection of theses should not be used 
to distribute results because dissemination will not be sufficiently 
widespread). All costs of publication pursuant to this clause shall be 
borne by the Contractor and shall not be charged to the Government under 
this or any other Federal contract.
    (b) Any copy of material published under this clause shall contain 
acknowledgment of DHS's sponsorship of the research effort and a 
disclaimer stating that the published material represents the position 
of the author(s) and not necessarily that of DHS. Articles for 
publication or papers to be presented to professional societies do not 
require the authorization of the Contracting Officer prior to release. 
However, a printed or electronic copy of each article shall be 
transmitted to the Contracting Officer at least two weeks prior to 
release or publication.
    (c) Press releases concerning the results or conclusions from the 
research under this contract shall not be made or otherwise distributed 
to the public without prior written approval of the Contracting Officer.
    (d) Publication under the terms of this clause does not release the 
Contractor from the obligation of preparing and submitting to the 
Contracting Officer a final report containing the findings and results 
of research, as set forth in the schedule of the contract.

                             (End of clause)



3052.242-71  Dissemination of contract information.

    As prescribed in (HSAR) 48 CFR 3042.203-70(b), insert the following 
clause:

            Dissemination of Contract Information (DEC 2003)

    The Contractor shall not publish, permit to be published, or 
distribute for public consumption, any information, oral or written,

[[Page 121]]

concerning the results or conclusions made pursuant to the performance 
of this contract, without the prior written consent of the Contracting 
Officer. An electronic or printed copy of any material proposed to be 
published or distributed shall be submitted to the Contracting Officer.

                             (End of clause)



3052.242-72  Contracting officer's technical representative.

    As prescribed in (HSAR) 48 CFR 3042.7000, insert the following 
clause:

        Contracting Officer's Technical Representative (DEC 2003)

    (a) The Contracting Officer may designate Government personnel to 
act as the Contracting Officer's Technical Representative (COTR) to 
perform functions under the contract such as review or inspection and 
acceptance of supplies, services, including construction, and other 
functions of a technical nature. The Contracting Officer will provide a 
written notice of such designation to the Contractor within five working 
days after contract award or for construction, not less than five 
working days prior to giving the contractor the notice to proceed. The 
designation letter will set forth the authorities and limitations of the 
COTR under the contract.
    (b) The Contracting Officer cannot authorize the COTR or any other 
representative to sign documents, such as contracts, contract 
modifications, etc., that require the signature of the Contracting 
Officer.

                             (End of clause)



3052.245-70  Government property reports.

    As prescribed in (HSAR) 48 CFR 3045.505-70, insert the following 
clause:

                 Government Property Reports (DEC 2003)

    (a) The Contractor shall prepare an annual report of Government 
property in its possession and the possession of its subcontractors.
    (b) The report shall be submitted to the Contracting Officer not 
later than September 15 of each calendar year on Form DHS F 4220.43, 
Contractor Report of Government Property.

                             (End of clause)



3052.247-70  F.o.b. origin information.

    As prescribed in (HSAR) 48 CFR 3047.305-70(a), insert the following 
provision:

                  F.O.B. Origin Information (DEC 2003)

    The offeror shall furnish information with the offer:
    (a) Location of the offeror's actual shipping point(s) (street 
address, city, state, and zip code) from which supplies will be 
delivered to the Government;
    (b) Whether the offered shipping point has a private railroad 
siding, and the name of the rail carrier serving it;
    (c) When the offered shipping point does not have a private siding, 
the names and addresses of the nearest public rail siding and of the 
carrier serving it; and
    (d) The quantity of supplies to be shipped from each shipping point.

                           (End of provision)

                         Alternate I (DEC 2003)

    If delivery is ``f.o.b. origin, contractor's facility,'' and the 
designated facility is not covered by the line-haul transportation rate, 
add the following paragraph to the basic provision:
    (e) The charges required to deliver the shipment to the point where 
the line-haul rate is applicable.

                        Alternate II (Dec. 2003)

    When delivery is ``f.o.b. origin, freight allowed,'' add the 
following paragraph to the basic provision:
    (e) The basis on which transportation charges will be allowed, 
including the origin and destination from and to which transportation 
charges will be allowed.



3052.247-71  F.o.b. origin only.

    As prescribed in (HSAR) 48 CFR 3047.305-70(b), insert the following 
provision:

                      F.O.B. Origin Only (DEC 2003)

    Offers are invited on the basis of f.o.b. origin only. Offers 
submitted on any other basis will be rejected as nonresponsive.

                           (End of provision)



3052.247-72  F.o.b. destination only.

    As prescribed in (HSAR) 48 CFR 3047.305-70(c), insert the following 
provision:
F.O.B. Destination Only (DEC 2003)
    Offers are invited on the basis of f.o.b. destination only. Offers 
submitted on any other basis will be rejected as nonresponsive.

[[Page 122]]



PART 3053_FORMS--Table of Contents




                         Subpart 3053.1_General

Sec.
3053.101 Requirements for use of forms.
3053.103 Exceptions.

                  Subpart 3053.2_Prescription of Forms

3053.204-70 Administrative matters.
3053.222-70 Application of labor laws to Government acquisitions.
3053.227-70 Conveyance of invention rights acquired by the Government.
3053.245-70 Contractor report of government property.

                  Subpart 3053.3_Illustrations of Forms

3053.303 Agency forms.

    Authority: 41 U.S.C. 418b (a) and (b).

    Source: 68 FR 67871, Dec. 4, 2003, unless otherwise note.



                         Subpart 3053.1_General



3053.101  Requirements for use of forms.

    Unless excepted, forms prescribed in (FAR) 48 CFR part 53 and (HSAR) 
48 CFR part 3053 are required for use by all OEs.



3053.103  Exceptions.

    Requests for exceptions to forms contained in (FAR) 48 CFR part 53 
and to DHS forms in (HSAR) 48 CFR part 3053 shall be submitted, as 
prescribed in (FAR) 48 CFR 53.103, to the CPO.



                  Subpart 3053.2_Prescription of Forms



3053.204-70  Administrative matters.

    The following forms are prescribed for use in the closeout of 
applicable contracts, as specified in (HSAR) 48 CFR 3004.804-570:
    (a) DHS Form 0700-01, Cumulative Claim and Reconciliation Statement. 
(See (HSAR) 48 CFR 3004.804-570(a)(1).)
    (b) DHS Form 0700-02, Contractor's Assignment of Refunds, Rebates, 
Credits and Other Amounts. (See (HSAR) 48 CFR 3004.570(a)(2).)
    (c) DHS Form 0700-03, Contractor Release. (See (HSAR) 48 CFR 
3004.804-570(a)(3).)



3053.222-70  Application of labor laws to Government acquisitions.

    The following form is prescribed for use in connection with the 
application of labor laws, as specified in (HSAR) 48 CFR 3022.406-9: DHS 
Form 0070-04, Employee's Claim for Wage Restitution.



3053.227-70  Conveyance of invention rights acquired by the Government.

    The following form is prescribed for including a means for 
contractors to report inventions made in the course of contract 
performance, as specified in (HSAR) 48 CFR 3027.305-4: DD Form 882, 
Report of Inventions and Subcontracts.



3053.245-70  Report of Government property.

    The following form is prescribed for use by contractors to report 
Government property, as specified in (HSAR) 48 CFR 3045.505-14: DHS Form 
0070-05, Contractor's Report of Government Property.



                  Subpart 3053.3_Illustrations of Forms



3053.303  Agency forms.

    This section illustrates agency-specified forms. To access these 
forms go to: http://www.dhs.gov/dhspublic/display?theme=37.

------------------------------------------------------------------------
              Form name                             Form No.
------------------------------------------------------------------------
Cumulative Claim and Reconciliation    DHS Form 0070-01
 Statement.
Contractor's Assignment of Refunds,    DHS Form 0070-02
 Rebates, Credits and Other Amounts.
Contractor Release...................  DHS Form 0070-03
Employee's Claim for Wage Restitution  DHS Form 0070-04
Contractor's Report of Government      DHS Form 0070-05
 Property.
Report of Inventions and Subcontract.  DD 882
------------------------------------------------------------------------


[[Page 123]]



       CHAPTER 34--DEPARTMENT OF EDUCATION ACQUISITION REGULATION




                          (Parts 3400 to 3499)

  --------------------------------------------------------------------

                          SUBCHAPTER A--GENERAL
Part                                                                Page
3401            ED Acquisition Regulation System............         125
3402            Definitions of words and terms..............         126
3403            Improper business practices and personal 
                    conflicts of interest...................         126
3404            Administrative matters......................         127
3405            Publicizing contract actions................         127
           SUBCHAPTER B--COMPETITION AND ACQUISITION PLANNING
3408            Required sources of supplies and services...         129
3409            Contractor qualifications...................         129
3410            Specification standards and other purchase 
                    descriptions............................         129
          SUBCHAPTER C--CONTRACTING METHODS AND CONTRACT TYPES
3413            Small purchase and other simplified purchase 
                    procedures..............................         131
3414            Sealed bidding..............................         131
3415            Contracting by negotiation..................         131
3416            Types of contracts..........................         132
3417            Special contracting methods.................         133
                  SUBCHAPTER D--SOCIOECONOMIC PROGRAMS
3419            Small business and small disadvantaged 
                    business concerns.......................         134
3424            Protection of privacy and freedom of informa 
                    tion....................................         135
3425            Foreign acquisition.........................         135
             SUBCHAPTER E--GENERAL CONTRACTING REQUIREMENTS
3427            Patents, data, and copyrights...............         137
3428            Bonds and insurance.........................         137

[[Page 124]]

3432            Contract financing..........................         137
3433            Protests, disputes, and appeals.............         138
             SUBCHAPTER F--SPECIAL CATEGORIES OF CONTRACTING
3437            Service contracting.........................         140
                    SUBCHAPTER G--CONTRACT MANAGEMENT
3442            Contract administration.....................         141
3443            Contract modifications......................         141
3445            Government property.........................         141
3447            Transportation..............................         142
                     SUBCHAPTER H--CLAUSES AND FORMS
3452            Solicitation provisions and contract clauses         143

[[Page 125]]



                          SUBCHAPTER A_GENERAL





PART 3401_ED ACQUISITION REGULATION SYSTEM--Table of Contents




Sec.
3401.000 Scope of part.

               Subpart 3401.1_Purpose, Authority, Issuance

3401.103 Applicability.
3401.104 Issuance.
3401.104-2 Arrangement of regulations.
3401.104-3 Copies.

              Subpart 3401.3_Agency Acquisition Regulations

3401.304 Agency control and compliance procedures.

                        Subpart 3401.4_Deviations

3401.401 Definition.
3401.403 Individual deviations.
3401.404 Class deviations.

             Subpart 3401.5_Agency and Public Participation

3401.501 Solicitation of agency and public views.
3401.501-2 Opportunity for public comments.

        Subpart 3401.6_Contracting Authority and Responsibilities

3401.601 General.

    Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).

    Source: 53 FR 19119, May 26, 1988, unless otherwise noted.



3401.000  Scope of part.

    The Federal Acquisition Regulation System brings together, in title 
48 of the Code of Federal Regulations, the acquisition regulations 
applicable to all executive agencies of the Government. This part 
establishes a system of Department of Education (ED) acquisition 
regulations, referred to as the EDAR, for the codification and 
publication of policies and procedures of ED which implement and 
supplement the Federal Acquisition Regulation (FAR).



               Subpart 3401.1_Purpose, Authority, Issuance



3401.103  Applicability.

    The FAR and the EDAR apply to all acquisitions as defined in FAR 
part 2 except where expressly excluded.



3401.104  Issuance.



3401.104-2  Arrangement of regulations.

    The regulations in this chapter may be referred to as the Department 
of Education Acquisition Regulation or the EDAR. References to the EDAR 
are made in the same manner as references to the FAR (See FAR 1.104-
2(c)).



3401.104-3  Copies.

    Copies of the EDAR in the Federal Register and Code of Federal 
Regulations (CFR) form may be purchased from the Superintendent of 
Documents, Government Printing Office (GPO), Washington, DC 20402.



              Subpart 3401.3_Agency Acquisition Regulations



3401.304  Agency control and compliance procedures.

    The EDAR is subject to the same review procedures within the 
Department as other regulations of the Department.



                        Subpart 3401.4_Deviations



3401.401  Definition.

    A deviation from the EDAR has the same meaning as a deviation from 
the FAR.



3401.403  Individual deviations.

    An individual deviation from the FAR or the EDAR must be approved by 
the Head of the Contracting Activity (HCA).



3401.404  Class deviations.

    A class deviation from the FAR or the EDAR must be approved by the 
Procurement Executive.

[[Page 126]]



             Subpart 3401.5_Agency and Public Participation



3401.501  Solicitation of agency and public views.



3401.501-2  Opportunity for public comments.

    Unless the Secretary of Education (Secretary) approves an exception, 
the Department issues the EDAR, including any amendments to the EDAR, in 
accordance with the procedures for public participation in 5 U.S.C. 553.



        Subpart 3401.6_Contracting Authority and Responsibilities



3401.601  General.

    Contracting authority vests with the Secretary. The Secretary has 
delegated this authority to the Deputy Under Secretary for Management 
who has delegated this authority, with the right to redelegate, to the 
Procurement Executive and the HCA.



PART 3402_DEFINITIONS OF WORDS AND TERMS--Table of Contents




                       Subpart 3402.1_Definitions

Sec.
3402.101 [Reserved]

                    Subpart 3402.2_Definitions Clause

3402.201 Contract clause.

    Authority: 5 U.S.C. 301; 40 U.S.C. 486(c), unless otherwise noted.



                       Subpart 3402.1_Definitions



3402.101  [Reserved]



                    Subpart 3402.2_Definitions Clause



3402.201  Contract clause.

    The contracting officer shall insert the clause in 3452.202-1, 
Definitions, in all solicitations and contracts in lieu of the clause in 
FAR 52.202-1, except--
    (a) A fixed-price research and development contract that is expected 
to be $2,500 or less; or
    (b) A purchase order.

[53 FR 19119, May 26, 1988]



PART 3403_IMPROPER BUSINESS PRACTICES AND PERSONAL CONFLICTS OF INTEREST
--Table of Contents




                        Subpart 3403.1_Safeguards

Sec.
3403.101 Standards of conduct.
3403.101-3 Agency regulations.

      Subpart 3403.2_Contractor Gratuities To Government Personnel

3403.203 Reporting suspected violations of the Gratuities clause.

        Subpart 3403.3_Reports of Suspected Antitrust Violations

3403.301 General.

                     Subpart 3403.4_Contingent Fees

3403.409 Misrepresentations or violations of the Covenant Against 
          Contingent Fees.

  Subpart 3403.6_Contracts With Government Employees or Organizations 
                       Owned or Controlled by Them

3403.602 Exceptions.

    Authority: 5 U.S.C. 301; 40 U.S.C. 486(c)

    Source: 53 FR 19120, May 26, 1988, unless otherwise noted.



                        Subpart 3403.1_Safeguards



3403.101  Standards of conduct.



3403.101-3  Agency regulations.

    ED regulations on standards of conduct are in 34 CFR part 73.



      Subpart 3403.2_Contractor Gratuities to Government Personnel



3403.203  Reporting suspected violations of the Gratuities clause.

    (a) Suspected violations of the Gratuities clause must be reported 
to the HCA in writing detailing the circumstances.
    (b) The HCA evaluates the report with the assistance of the 
Designated Agency Ethics Officer. If the HCA determines that a violation 
may have occurred, the HCA refers the report to the Procurement 
Executive for disposition.

[[Page 127]]



        Subpart 3403.3_Reports of Suspected Antitrust Violations



3403.301  General.

    (a) [Reserved]
    (b) Any Departmental personnel who have evidence of a suspected 
antitrust violation in an acquisition shall--
    (1) Report that evidence through the HCA to the Office of the 
General Counsel for referral to the Attorney General; and
    (2) Provide a copy of that evidence to the Procurement Executive.



                     Subpart 3403.4_Contingent Fees



3403.409  Misrepresentations or violations of the Covenant Against 
Contingent Fees.

    Any Departmental personnel who suspect or have evidence of attempted 
or actual exercise of improper influence, misrepresentation of a 
contingent fee arrangement, or other violation of the Covenant Against 
Contingent Fees, shall report the matter promptly in accordance with the 
procedures in 3403.203.



  Subpart 3403.6_Contracts With Government Employees or Organizations 
                       Owned or Controlled by Them



3403.602  Exceptions.

    Exceptions under FAR 3.602 must be approved by the Deputy Under 
Secretary for Management.



PART 3404_ADMINISTRATIVE MATTERS--Table of Contents




    Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).



                    Subpart 3404.1_Contract Execution



3404.170  Ratification of unauthorized contract awards.

    The execution of otherwise proper contracts made by individuals 
without contracting authority, or by contracting officers acting in 
excess of the limits of their delegated authority, may be later ratified 
by the Department. To be effective, a ratification must be--
    (a) A written document clearly stating that ratification of a 
previously unauthorized act is intended; and
    (b) Signed by the HCA, or higher level official of the Department, 
who could have granted authority to enter into the commitment at the 
time it was made and still has the power to do so.

[53 FR 19120, May 26, 1988]



PART 3405_PUBLICIZING CONTRACT ACTIONS--Table of Contents




          Subpart 3405.2_Synopses of Proposed Contract Actions

Sec.
3405.270 Notices to perform market surveys.

                   Subpart 3405.5_Paid Advertisements

3405.502 Authority.

    Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).



          Subpart 3405.2_Synopses of Proposed Contract Actions



3405.270  Notices to perform market surveys.

    (a) If a sole-source contract is anticipated, the issuance of a 
notice of a proposed contract action that is detailed enough to permit 
submission of meaningful responses and subsequent evaluation of the 
responses by the Government, constitutes an acceptable market survey.
    (b) The notice must include--
    (1) A clear statement of the supplies or services to be procured;
    (2) Any capabilities or experience required of a contractor and any 
other factors relevant to those requirements; and
    (3) The criteria, including relative weights, to be used in the 
evaluation of responses.

[53 FR 19120, May 26, 1988]

[[Page 128]]



                   Subpart 3405.5_Paid Advertisements



3405.502  Authority.

    Authority to approve publication of paid advertisements in 
newspapers is delegated to the HCA.

[53 FR 19120, May 26, 1988]

[[Page 129]]



            SUBCHAPTER B_COMPETITION AND ACQUISITION PLANNING





PART 3408_REQUIRED SOURCES OF SUPPLIES AND SERVICES--Table of Contents




    Authority: 5 U.S.C. 301, 40 U.S.C. 486(c).



       Subpart 3408.8_Acquisition of Printing and Related Supplies



3408.870  Printing clause.

    The contracting officer shall insert the clause in 3452.208-70, 
Printing, in all solicitations and contracts other than purchase orders.

[53 FR 19120, May 26, 1988]



PART 3409_CONTRACTOR QUALIFICATIONS--Table of Contents




         Subpart 3409.4_Debarment, Suspension, and Ineligibility

3409.403 [Reserved]
3409.406 Debarment.
3409.406-3 Procedures.

           Subpart 3409.5_Organizational Conflicts of Interest

3409.502 Applicability.
3409.503 Waiver.
3409.507 Procedures.
3409.570 Offeror certification provision.

    Authority: 5 U.S.C. 301; 40 U.S.C. 486(c), unless otherwise noted.

    Source: 53 FR 19120, May 26, 1988, unless otherwise noted.



         Subpart 3409.4_Debarment, Suspension, and Ineligibility



3409.403  [Reserved]



3409.406  Debarment.



3409.406-3  Procedures.

    The debarring official may enter into a settlement with a contractor 
under which the contractor voluntarily excludes itself from, or 
restricts its participation in, Government contracting and 
subcontracting for a specified period.



           Subpart 3409.5_Organizational Conflicts of Interest



3409.502  Applicability.

    This subpart applies to all ED contracts except contracts with other 
Federal agencies. However, this subpart applies to contracts with the 
Small Business Administration (SBA) under the 8(a) program.



3409.503  Waiver.

    The HCA is designated as the official who may waive any general rule 
or procedure of FAR subpart 9.5 or of this subpart.



3409.507  Procedures.

    (a) If the effects of a potential or actual conflict of interest 
cannot be avoided, neutralized, or mitigated before award, the 
prospective contractor is not eligible for that award. If a potential or 
actual conflict of interest is identified after award and the effects 
cannot be avoided, neutralized, or mitigated, ED terminates the 
contract.
    (b) The Procurement Executive is designated as the official to 
conduct reviews and make final decisions under FAR 9.507(c)(4).



3409.570  Offeror certification provision.

    The contracting officer shall insert the provision in 3452.209-70, 
Organizational Conflict of Interest, in all solicitations.



PART 3410_SPECIFICATION STAND ARDS AND OTHER PURCHASE DESCRIPTIONS
--Table of Contents




                   Subpart 3410.7_Use of Metric System

Sec.
3410.701 Policy of the Department of Education with respect to use of 
          the metric system.
3410.702 Definitions.
3410.703 Responsibilities of the Department of Education with respect to 
          use of the metric system.

    Authority: 15 U.S.C. 205b.

[[Page 130]]


    Source: 58 FR 30088, May 25, 1993, unless otherwise noted.



                   Subpart 3410.7_Use of Metric System



3410.701  Policy of the Department of Education with respect to use of 
the metric system.

    It is the policy of the Department of Education to encourage use of 
the metric system in industry standards, consistent with the legal 
status of this system as the preferred system of weights and measures 
for United States trade and commerce.



3410.702  Definitions.

    Department means the United States Department of Education.
    Metric system (a) This term means the International System of Units 
established by the General Conference of Weights and Measures in 1960.
    (b) The units are listed in Federal Standard 376A, ``Preferred 
Metric Units for General Use by the Federal Government.''



3410.703  Responsibilities of the Department of Education with respect 
to use of the metric system.

    (a) Consistent with the Federal Acquisition Regulation System, 
contracting officers of the Department shall--
    (1) Accept, without prejudice, products and services dimensioned in 
metric units if they are offered at competitive prices and meet the 
needs of the Department; and
    (2) Ensure that acquisition planning considers these products and 
services.
    (b) Consistent with the policy in the Metric Conversion Act, as 
amended, and in 3410.701, if the metric system is the accepted system of 
weights and measures in a particular industry, the Department ensures 
that solicitations include specifications and purchase descriptions 
stated in metric units of measurement.
    (c) If the metric system is not the accepted system of weights and 
measures in a particular industry, the Department ensures that 
solicitations for procurements in excess of the small purchase threshold 
permit offerors to propose products or services in metric units of 
measurement, except when to do this would be detrimental to the purpose 
of the affected program.

[[Page 131]]



           SUBCHAPTER C_CONTRACTING METHODS AND CONTRACT TYPES





PART 3413_SMALL PURCHASE AND OTHER SIMPLIFIED PURCHASE PROCEDURES
--Table of Contents




    Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).



                         Subpart 3413.1_General



3413.107  Solicitation and evaluation of quotations.

    (a)-(c) [Reserved]
    (d) Information provided by ED. If ED provides information to a 
potential quoter concerning a request for quotations, that information 
must also be provided to all other potential quoters, by amending the 
request, if--
    (1) The information is necessary to quoters in submitting 
quotations; or
    (2) The lack of the information would be otherwise prejudicial to 
other potential quoters.
    (e) Late quotations. The procedures in FAR 15.412 must be used for 
quotations received after the time specified for receipt at the 
contracting activity, except that late quotations may be accepted if the 
contracting officer determines in writing prior to the award that it is 
in the best interest of the Government to do so.

[53 FR 19121, May 26, 1988]



PART 3414_SEALED BIDDING--Table of Contents




          Subpart 3414.4_Opening of Bids and Award of Contract

Sec.
3414.406 Mistakes in bids.
3414.406-3 Other mistakes disclosed before award.

    Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).



          Subpart 3414.4_Opening of Bids and Award of Contract



3414.406  Mistakes in bids.



3414.406-3  Other mistakes disclosed before award.

    (a)-(d) [Reserved]
    (e) Authority is delegated to the HCA to make determinations under 
FAR 14.406-3 (a) through (d).

[53 FR 19121, May 26, 1988]



PART 3415_CONTRACTING BY NEGOTIATION--Table of Contents




   Subpart 3415.4_Solicitation and Receipt of Proposals and Quotations

Sec.
3415.406-3 Part II--Contract clauses.
3415.407 Solicitation provisions.
3415.413-2 Alternate II.

                  Subpart 3415.5_Unsolicited Proposals

3415.505 Content of unsolicited proposals.
3415.506 Agency procedures.

                          Subpart 3415.9_Profit

3415.902 Policy.

    Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).

    Source: 53 FR 19121, May 26, 1988, unless otherwise noted.



   Subpart 3415.4_Solicitation and Receipt of Proposals and Quotations



3415.406-3  Part II--Contract clauses.

    The contracting officer shall insert the clause in 3452.215-33, 
Order of Precedence, in all contracts other than purchase orders. The 
contracting officer shall use this clause in lieu of the clause in FAR 
52.215-33.



3415.407  Solicitation provisions.

    (a) The Freedom of Information Act (FOIA), 5 U.S.C. 552, may require 
ED to release data contained in an offeror's proposal even if the 
offeror has identified the data as restricted in accordance with the 
provision in FAR 52.215-12. The solicitation provision in 3452.215-70, 
Release of Restricted Data, informs offerors that ED is required to 
consider release of restricted data under FOIA and Executive Order 
12600.
    (b) The contracting officer shall insert the provision in 3452.215-
70, in all solicitations that include a reference

[[Page 132]]

to FAR 52.215-12, Restriction on Disclosure and Use of Data.



3415.413-2  Alternate II.

    The Department uses the Alternate II procedures in FAR 15.413-2.



                  Subpart 3415.5_Unsolicited Proposals



3415.505  Content of unsolicited proposals.

    (a)-(c) [Reserved]
    (d) Each unsolicited proposal must contain the following 
certification:

              Unsolicited Proposal Certification by Offeror

    This is to certify, to the best of my knowledge and belief, that:
    a. This proposal has not been prepared under Government supervision.
    b. The methods and approaches stated in the proposal were developed 
by this offeror.
    c. Any contact with employees of the Department of Education has 
been within the limits of appropriate advance guidance set forth in FAR 
15.504.
    d. No prior commitments were received from departmental employees 
regarding acceptance of this proposal.

Date:___________________________________________________________________

Organization:___________________________________________________________

Name:___________________________________________________________________

Title:__________________________________________________________________

(This certification must be signed by a responsible person authorized to 
enter into contracts on behalf of the organization)



3415.506  Agency procedures.

    (a) [Reserved]
    (b)(1) The HCA is the contact point to coordinate the receipt and 
handling of unsolicited proposals.
    (2) Offerors shall direct unsolicited proposals to the HCA.



                          Subpart 3415.9_Profit



3415.902  Policy.

    (a) [Reserved]
    (b) The contracting officer shall establish the profit or fee 
portion of the Government prenegotiation objective in accordance with 48 
CFR chapter 3, part 315, subpart 315.9 (Department of Health and Human 
Services Acquisition Regulation).



PART 3416_TYPES OF CONTRACTS--Table of Contents




               Subpart 3416.3_Cost-Reimbursement Contracts

Sec.
3416.303 Cost-sharing contracts.
3416.307 Contract clauses.

   Subpart 3416.6_Time-and-Materials, Labor-Hour and Letter Contracts

3416.603 Letter contracts.
3416.603-3 Limitations.

                        Subpart 3416.7_Agreements

3416.701 Contract clause.
3416.702 Basic agreements.

    Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).

    Source: 53 FR 19121, May 26, 1988, unless otherwise noted.



               Subpart 3416.3_Cost-Reimbursement Contracts



3416.303  Cost-sharing contracts.

    (a) [Reserved]
    (b) Application. Costs that are not reimbursed under a cost-sharing 
contract may not be charged to the Government under any other grant, 
contract, cooperative agreement, or other arrangement.



3416.307  Contract clauses.

    (a) If the clause in FAR 52.216-7, Allowable cost and Payment, is 
used in a contract with a hospital, the contracting officer shall modify 
the clause by deleting the words ``subpart 31.2 of the Federal 
Acquisition Regulation (FAR)'' from paragraph (a) and substituting ``34 
CFR part 74, appendix E.''
    (b) The contracting officer shall insert the clause in 3452.216-70, 
Additional Cost Principles, in all solicitations of and resultant cost-
reimbursement contracts with nonprofit organizations other than 
educational institutional, hospitals, or organizations listed in 
Attachment C to Office of Management and Budget Circular A-122.

[[Page 133]]



   Subpart 3416.6_Time-and-Materials, Labor-Hour and Letter Contracts



3416.603  Letter contracts.



3416.603-3  Limitations.

    If the HCA is to sign a letter contract as the contracting officer, 
the Procurement Executive executes the written determination under FAR 
16.603-3.



                        Subpart 3416.7_Agreements



3416.701  Contract clause.

    The contracting officer shall insert the clause in 3452.216-71, 
Negotiated Overhead Rates--Fixed, in contracts with organizations that 
have fixed indirect cost rates with carryforward adjustments approved by 
the Government agency responsible for negotiating the organization's 
indirect cost rates.



3416.702  Basic agreements.

    (a)-(d) [Reserved]
    (e) Negotiated overhead rates. Basic agreements may include 
negotiated overhead rates for cost-reimbursement contracts. If a 
negotiated overhead rate is included, the bases to which the rate 
applies and the period of applicability must also be stated. All 
pertinent provisions such as final rates for past periods, provisional 
rates for current or future periods, ceilings, and any specific items to 
be treated as indirect costs must also be included.



PART 3417_SPECIAL CONTRACTING METHODS--Table of Contents




    Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).



                         Subpart 3417.2_Options



3417.207  Exercise of options.

    If any provision in a contract requires that an option may only be 
exercised within a specified time after funds become available, the same 
provision must specify that the date on which funds are available means 
the date funds become available to the contracting officer for 
obligation.

[53 FR 19122, May 26, 1988]

[[Page 134]]



                   SUBCHAPTER D_SOCIOECONOMIC PROGRAMS





PART 3419_SMALL BUSINESS AND SMALL DISADVANTAGED BUSINESS CONCERNS
--Table of Contents




      Subpart 3419.7_Subcontracting With Small Business and Small 
                     Disadvantaged Business Concerns

3419.705 Responsibilities of the contracting officer under the 
          subcontracting assistance program.
3419.705-2 Determining the need for a subcontracting plan.
3419.708 Solicitation provisions and contract clauses.

 Subpart 3419.8_Contracting With the Small Business Administration (The 
                              8(a) Program)

3419.801 General.
3419.870 Acquisition of technical requirements.

    Authority: 5 U.S.C.; 40 U.S.C. 486(c).

    Source: 53 FR 19122, May 26, 1988, unless otherwise noted.



      Subpart 3419.7_Subcontracting With Small Business and Small 
                     Disadvantaged Business Concerns



3419.705  Responsibilities of the contracting officer under the 
subcontracting assistance program.



3419.705-2  Determining the need for a subcontracting plan.

    Incremental funding actions must be included in determining whether 
an acquisition meets the dollar threshold requiring a subcontracting 
plan.



3419.708  Solicitation provisions and contract clauses.

    (a) [Reserved]
    (b) If the clause ``Small Business and Small Disadvantaged Business 
Subcontracting Plan'' (see FAR 52.219-9) must be used in a solicitation, 
a notification must be included in the solicitation that advises 
prospective offerors that subcontracting plans may be requested from all 
concerns determined to be in the competitive range.



 Subpart 3419.8_Contracting With the Small Business Administration (The 
                              8(a) Program)



3419.801  General.

    The signing of a contract document by the Small Business 
Administration (SBA) may be accepted by the contracting officer as the 
certification under FAR 19.801(b)(1).



3419.870  Acquisition of technical requirements.

    (a) Source selection. (1) Except where SBA selects a concern for an 
award under section 8(a) or under the circumstances in paragraph (a)(5) 
of this section, ED selects a nominee for an 8(a) award by SBA through a 
limited technical competition if technical aspects, methodology, or 
approach are of primary importance rather than price.
    (2) If limited technical competition is used, the concerns to be 
included are decided by the contracting officer in consultation with 
OSDBU and the Contracting Officer's Technical Representative (COTR).
    (3)(i) ED may require the concerns participating in the limited 
technical competition to submit written technical proposals. Otherwise, 
ED holds oral discussions with the participating concerns.
    (ii) In a limited technical competition, cost factors may not be 
included in the technical proposals nor considered during technical 
discussions of the proposals.
    (4) ED evaluates the concerns participating in a limited technical 
competition based on the written technical proposals or oral 
discussions. ED nominates, to SBA for subcontract award, the concern 
that the contracting officer determines to have the best technical 
capability to perform the contract requirements.
    (5) Instead of selecting a nominee through limited technical 
competition, ED may nominate one 8(a) concern to SBA if that concern has 
exclusive or predominant capability among 8(a)

[[Page 135]]

concerns by reason of experience, specialized facilities, or technical 
competence to perform the work within the time required.
    (6) Each concern nominated for a specific 8(a) requirement must be 
approved by OSDBU or SBA for that particular requirement before the 
contracting officer initiates negotiation of 8(a) award terms with the 
concern.
    (b) Negotiation of 8(a) award. The contracting officer shall give 
all possible assistance required by SBA with respect to SBA's 
negotiation of an 8(a) award.
    (c) Delegated 8(a) award administration. If SBA delegates 
responsibility to ED for administration of the 8(a) award, ED informs 
SBA of all 8(a) award modifications, progress payments, problems 
experienced by the subcontractor, and other pertinent matters requested 
by SBA.



PART 3424_PROTECTION OF PRIVACY AND FREEDOM OF INFORMATION--Table of Contents




             Subpart 3424.1_Protection of Individual Privacy

Sec.
3424.103 Procedures.

                Subpart 3424.2_Freedom of Information Act

3424.201 Authority.

    Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).



             Subpart 3424.1_Protection of Individual Privacy



3424.103  Procedures.

    (a) If the Privacy Act of 1974 applies to a contract, the 
contracting officer shall specify in the contract the disposition to be 
made of the system or systems of records upon completion of performance 
of the contract. For example, the contract may require the contractor to 
completely destroy the records, to remove personal identifiers, to turn 
the records over to ED, or to keep the records but take certain measures 
to keep the records confidential and protect the individuals' privacy.
    (b) If a notice of the system of records has not been published in 
the Federal Register, the contracting officer may proceed with the 
acquisition but shall not award the contract until the notice is 
published, unless the contracting officer determines, in writing, that 
portions of the contract may proceed without maintaining information 
subject to the Privacy Act. In this case, the contracting officer may--
    (1) Award the contract, authorizing performance only of those 
portions not subject to the Privacy Act; and
    (2) After the notice is published and effective, authorize 
performance of the remainder of the contract.

[53 FR 19123, May 26, 1988]



                Subpart 3424.2_Freedom of Information Act



3424.201  Authority.

    The Department's regulations implementing the Freedom of Information 
Act, 5 U.S.C. 552, are in 34 CFR part 5.

[53 FR 19123, May 26, 1988]



PART 3425_FOREIGN ACQUISITION--Table of Contents




                Subpart 3425.1_Buy American Act_Supplies

Sec.
3425.102 Policy.

               Subpart 3425.3_Balance of Payments Program

3425.302 Policy.

    Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).



                Subpart 3425.1_Buy American Act_Supplies



3425.102  Policy.

    (a) [Reserved]
    (b) The HCA approves determinations under FAR 25.120(a)(4).

[53 FR 19123, May 26, 1988]

[[Page 136]]



               Subpart 3425.3_Balance of Payments Program



3425.302  Policy.

    The HCA is designated to make all determinations under FAR 25.302. 
This authority may not be redelegated.

[53 FR 19123, May 26, 1988]

[[Page 137]]



              SUBCHAPTER E_GENERAL CONTRACTING REQUIREMENTS





PART 3427_PATENTS, DATA, AND COPYRIGHTS--Table of Contents




              Subpart 3427.4_Rights in Data and Copyrights

Sec.
3427.470 Publication and publicity clause.
3427.471 Paperwork Reduction Act clause.
3427.472 Advertising of awards clause.

    Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).

    Source: 53 FR 19123, May 26, 1988, unless otherwise noted.



              Subpart 3427.4_Rights in Data and Copyrights



3427.470  Publication and publicity clause.

    The contracting officer shall insert the clause in 3452.227-70, 
Publication and Publicity, in all solicitations and contracts other than 
purchase orders.



3424.471  Paperwork Reduction Act clause.

    The contracting officer shall insert the clause in 3452.227-71, 
Paperwork Reduction Act, in all solicitations and contracts.



3427.472  Advertising of awards clause.

    The contracting officer shall insert the clause in 3452.227-72, 
Advertising of Awards, in all solicitations and contracts other than 
purchase orders.



PART 3428_BONDS AND INSURANCE--Table of Contents




    Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).



                        Subpart 3428.3_Insurance



3428.370  Contract clause.

    The contracting officer shall insert the clause in 3452.228-70, 
Required Insurance, in all solicitations and resultant cost-
reimbursement contracts.

[53 FR 19123, May 26, 1988]



PART 3432_CONTRACT FINANCING--Table of Contents




                         Subpart 3432.1_General

Sec.
3432.170 Method of payment.

                     Subpart 3432.4_Advance Payments

3432.402 General.
3432.407 Interest.

                     Subpart 3432.7_Contract Funding

3432.704 Limitation of cost or funds.
3432.770 Prohibition against the use of ED funds to influence 
          legislation or appropriations.
3432.771 Provision for incremental funding.

    Authority: 5 U.S.C. 301; 40 U.S.C. 486(C).

    Source: 53 FR 19123, May 26, 1988, unless otherwise noted.



                         Subpart 3432.1_General



3432.170  Method of payment.

    The contracting officer shall insert the clause in 3452.232-72, 
Method of Payment, in all solicitations and contracts.



                     Subpart 3432.4_Advance Payments



3432.402  General.

    (a)-(d) [Reserved]
    (e) The HCA is designated to make determinations under FAR 
32.402(c)(1)(iii)(A). This authority may not be redelegated.



3432.407  Interest.

    The HCA is designated to authorize advance payments without interest 
under FAR 32.407(d).



                     Subpart 3432.7_Contract Funding



3432.704  Limitation of cost or funds.

    (a) Under the circumstances in FAR 32.704(a)(1), the contractor 
shall submit the following information in writing to the contracting 
officer:
    (1) Name and address of the contractor.

[[Page 138]]

    (2) Contract number and expiration date.
    (3) Contract items and amounts that will exceed the estimated cost 
of the contract or the limit of the funds allotted.
    (4) The elements of cost that changed from the original estimate 
(for example: labor, material, travel, overhead), furnished in the 
following format:
    (i) Original estimate.
    (ii) Costs incurred to date.
    (iii) Estimated cost to completion.
    (iv) Revised estimate.
    (v) Amount of adjustment.
    (5) The factors responsible for the increase, such as error in 
estimate or changed conditions.
    (6) The latest date by which funds must be available to the 
contractor to avoid delays in performance, work stoppage, or other 
impairments.
    (b) A fixed fee provided in a contract may not be changed if a cost 
overrun is funded. Changes in a fixed fee may be made only to reflect 
changes in the scope of work that justify an increase or decrease in the 
fee.



3432.770  Prohibition against the use of ED funds to influence legislation 
or appropriations.

    The contracting officer shall insert the clause at 3452.232-70, 
Prohibition Against the Use of ED Funds to Influence Legislation or 
Appropriations, in contracts with educational institutions, hospitals, 
and State and local governments. Contracts with commercial and nonprofit 
organizations shall be subject to the legislative lobbying prohibitions 
contained in FAR 31.205-22 and Office of Management and Budget Circular 
A-122, respectively.



3432.771  Provision for incremental funding.

    The contracting officer shall insert the provision in 3452.232-71, 
Incremental Funding, in a solicitation if a cost-reimbursement contract 
using incremental funding is contemplated.



PART 3433_PROTESTS, DISPUTES, AND APPEALS--Table of Contents




                         Subpart 3433.1_Protests

Sec.
3433.101 Definitions.
3433.103 Protests to the agency.

                   Subpart 3433.2_Disputes and Appeals

3433.203 Applicability.
3433.212 Contracting officer's duties upon appeal.
3433.214 Contract clause.

    Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).

    Source: 53 FR 19124, May 26, 1988, unless otherwise noted.



                         Subpart 3433.1_Protests



3433.101  Definitions.

    Filed, as used in this subpart, means that a document has been 
received by the contracting officer, the General Accounting Office 
(GAO), or the General Services Administration Board of Contract Appeals 
(GSBCA).



3433.103  Protests to the agency.

    (a)(1) Protests to ED based on alleged improprieties in any type of 
solicitation that are apparent before bid opening or the closing date 
for receipt of proposals, must be filed before bid opening or the 
closing date for receipt of proposals. In the case of negotiated 
acquisitions, protests based on alleged improprieties that do not exist 
in the initial solicitation, but that are added later, must be filed not 
later than the next closing date for receipt of proposals following the 
addition. In other cases, protests to ED must be filed not later than 
ten (10) Federal Government working days after a basis for protest is 
known or should have been known, whichever is earlier.
    (b) With the concurrence of the HCA, the contracting officer is 
authorized to make a determination, using the criteria in FAR 33.103(a), 
to award a contract before resolution of a protest.



                   Subpart 3433.2_Disputes and Appeals



3433.203  Applicability.

    The General Services Administration Board of Contract Appeals 
(GSBCA) is designated to hear any appeal from a final decision of a 
contracting officer issued pursuant to the ``Disputes'' clause in a 
contract. The rules and regulations of the GSBCA are in 48 CFR

[[Page 139]]

chapter 5, appendix B, and govern the processing of these appeals.



3433.212  Contracting officer's duties upon appeal.

    The Office of the General Counsel is designated as the Government 
Trial Attorney to represent the Government in the defense of appeals 
before the GSBCA.



3433.214  Contract clause.

    The contracting officer shall use the clause in FAR 52.233-1, 
Disputes, with its Alternate I.

[[Page 140]]



             SUBCHAPTER F_SPECIAL CATEGORIES OF CONTRACTING





PART 3437_SERVICE CONTRACTING--Table of Contents




                Subpart 3437.1_Service Contracts_General

Sec.
3437.102 Policy.

                   Subpart 3437.2_Consulting Services

3437.270 Consulting services reporting clause.
3437.271 Services of consultants clause.

    Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).

    Source: 53 FR 19124, May 26, 1988, unless otherwise noted.



                Subpart 3437.1_Service Contracts_General



3437.102  Policy.

    If a service contract requires one or more end items of supply, FAR 
subpart 37.1 and this subpart apply only to the required services.



                   Subpart 3437.2_Consulting Services



3437.270  Consulting services reporting clause.

    The contracting officer shall include the clause in 3452.237-70, 
Identification of Reports Under Consulting Services Contracts, in all 
solicitations and contracts for consulting services.



3437.271  Services of consultants clause.

    The contracting officer shall insert the clause in 3452.237-71, 
Services of Consultants, in all solicitations and resultant cost-
reimbursement contracts.

[[Page 141]]



                    SUBCHAPTER G_CONTRACT MANAGEMENT





PART 3442_CONTRACT ADMINISTRATION--Table of Contents




                   Subpart 3442.7_Indirect Cost Rates

Sec.
3442.705 Final indirect cost rates.

                   Subpart 3442.70_Contract Monitoring

3442.7001 Withholding of contract payments clause.
3442.7002 Litigation and claims clause.
3442.7003 Delays clause.

Subpart 3442.71_Accessibility of Meetings, Conferences, and Seminars to 
                        Persons With Disabilities

3442.7101 Policy and clause.

    Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).

    Source: 53 FR 19124, May 26, 1988, unless otherwise noted.



                   Subpart 3442.7_Indirect Cost Rates



3442.705  Final indirect cost rates.

    The Chief, Cost Determination Branch, Grants and Contracts Service, 
is delegated the authority to establish final indirect cost rates under 
FAR 42.705-1 and 42.705-2.



                   Subpart 3442.70_Contract Monitoring



3442.7001  Withholding of contract payments clause.

    (a) The contracting officer shall insert the clause in 3452.242-72, 
Withholding of Contract Payments, in all solicitations and contracts 
other than purchase orders.
    (b) ED may withhold contract payments if any report required to be 
submitted by the contractor is overdue, or if the contractor fails to 
perform or deliver work or services as required by the contract.
    (c) The contracting officer shall notify the contractor in writing 
that payments are being withheld in accordance with the clause.



3442.7002  Litigation and claims clause.

    The contracting officer shall insert the clause in 3452.242-70, 
Litigation and Claims, in all solicitations and resultant cost-
reimbursement contracts.



3442.7003  Delays clause.

    The contracting officer shall insert the clause in 3452.242-71, 
Notice to the Government of Delays, in all solicitations and contracts 
other than purchase orders.



Subpart 3442.71_Accessibility of Meetings, Conferences, and Seminars to 
                        Persons With Disabilities



3442.7101  Policy and clause.

    (a) It is the policy of ED that all meetings, conferences, and 
seminars be accessible to persons with disabilities.
    (b) The contracting officer shall insert the clause in 3452.242-73, 
Accessibility of Meetings, Conferences, and Seminars to Persons with 
Disabilities, in all solicitations and contracts.



PART 3443_CONTRACT MODIFICATIONS--Table of Contents




    Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).



3443.106  Contract clause.

    The contracting officer shall insert the clause in 3452.243-70, Key 
Personnel, in all solicitations and resultant cost-reimbursement 
contracts.

[53 FR 19125, May 26, 1988]



PART 3445_GOVERNMENT PROPERTY--Table of Contents




    Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).

[[Page 142]]



     Subpart 3445.4_Contractor Use and Rental of Government Property



3445.405  Contracts with foreign governments or international organizations.

    Requests by, or for the benefit of, foreign governments or 
international organizations to use ED production and research property 
must be approved by the HCA. The HCA shall determine the amount of cost 
to be recovered or rental charged, if any, based on the facts and 
circumstances of each case.

[53 FR 19125, May 26, 1988]



PART 3447_TRANSPORTATION--Table of Contents




    Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).



                     Subpart 3447.70_Foreign Travel



3447.7000  Foreign travel clause.

    The contracting officer shall insert the clause in 3452.247-70, 
Foreign Travel, in all solicitations and resultant cost-reimbursement 
contracts.

[53 FR 19125, May 26, 1988]

[[Page 143]]



                     SUBCHAPTER H_CLAUSES AND FORMS





PART 3452_SOLICITATION PROVISIONS AND CONTRACT CLAUSES--Table of Contents




             Subpart 3452.2_Texts of Provisions and Clauses

Sec.
3452.202-1 Definitions.
3452.208-70 Printing.
3452.209-70 Organizational conflict of interest.
3452.215-33 Order of precedence.
3452.215-70 Release of restricted data.
3452.216-70 Additional cost principles.
3452.216-71 Negotiated overhead rates--fixed.
3452.227-70 Publication and publicity.
3452.227-71 Paperwork Reduction Act.
3452.227-72 Advertising of awards.
3452.228-70 Required insurance.
3452.232-70 Prohibition against the use of ED funds to influence 
          legislation or appropriations.
3452.232-71 Incremental funding.
3452.232-72 Method of payment.
3452.237-70 Identification of reports under consulting services 
          contracts.
3452.237-71 Services of consultants.
3452.242-70 Litigation and claims.
3452.242-71 Notice to the Government of delays.
3452.242-72 Withholding of contract payments.
3452.242-73 Accessibility of meetings, conferences, and seminars to 
          persons with disabilities.
3452.243-70 Key personnel.
3452.247-70 Foreign travel.

    Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).

    Source: 53 FR 19125, May 26, 1988, unless otherwise noted.



             Subpart 3452.2_Texts of Provisions and Clauses



3452.202-1  Definitions.

    As prescribed in 3402.201, insert the following clause in 
solicitations and contracts:

                         Definitions (Aug 1987)

    (a) The term Secretary or Head of the Agency (also called Agency 
Head) means the Secretary or Under Secretary of the Department of 
Education; and the term his/her duly authorized representative means any 
person, persons, or board authorized to act for these officials.
    (b) The term contracting officer means a person with the authority 
to enter into, administer, and/or terminate contracts and make related 
determinations and findings. The term includes certain authorized 
representatives of the contracting officer acting within the limits of 
their authority as delegated by the contracting officer.
    (c) The term Contracting Officer's Technical Representative means 
the person representing the Government for the purpose of technical 
monitoring of contract performance. The Contracting Officer's Technical 
Representative (COTR) is not authorized to issue any instructions or 
directions which effect any increases or decreases in the scope of work 
or which would result in the increase or decrease of the cost or price 
of this contract or a change in the delivery dates or performance period 
of this contract.
    (d) The term Department or ED means the Department of Education.
    (e) Except as otherwise provided in this contract, the term 
subcontract includes, but is not limited to, purchase orders and changes 
and modifications to purchase orders under this contract.

                             (End of clause)



3452.208-70  Printing.

    As prescribed in 3408.870, insert the following clause in all 
solicitations and contracts other than purchase orders:

                           Printing (Aug 1987)

    Unless otherwise specified in this contract, the contractor shall 
not engage in, nor subcontract for, and printing (as that term is 
defined in Title I of the Government Printing and Binding Regulations in 
effect on the effective date of this contract) in connection with the 
performance of work under this contract; except that performance 
involving the reproduction of less than 5,000 production units of any 
one page, or less than 25,000 production units in the aggregate of 
multiple pages, shall not be deemed to be printing. A production unit is 
defined as one sheet, size 8\1/2\ by 11 inches, and one side and color 
only.

                             (End of clause)



3452.209-70  Organizational conflict of interest.

    As prescribed in 3409.570, insert the following provision in all 
certifications:

[[Page 144]]

             Organizational Conflict of Interest (Oct 1987)

    The offeror certifies that it (--) is (--) is not aware of any 
potential organization conflict of interest that it may have under this 
procurement. If the offeror is aware of any potential conflict of 
interest, the offeror shall submit a disclosure statement fully 
describing the situation. An organizational conflict of interest is as 
defined and illustrated in FAR 9.5.

                           (End of provision)



3452.215-33  Order of precedence.

    As prescribed in 3415.406-3, insert the following clause in 
contracts:

                     Order of Precedence (Aug 1987)

    Any inconsistency in this contract shall be resolved by giving 
precedence in the following order:
    (a) The Schedule (exclusing the work statement or specification).
    (b) The contract clauses (Section I).
    (c) Any incorporated documents, exhibits, or attachment, excluding 
the work statement or specifications and the contractor's proposal, 
representations, and certifications,
    (d) The work statement or specifications, and
    (e) The contractor's proposal, as amended, including representations 
and certifications.

                             (End of clause)



3452.215-70  Release of restricted data.

    As prescribed in 3415.407, insert the following provision in 
solicitations:

                  Release of Restricted Data (Aug 1987)

    (a) Offerors are hereby put on notice that regardless of their use 
of the legend set forth in FAR 52.215-12, Restriction on Disclosure and 
Use of Data, the Government may be required to release certain data 
contained in the proposal in response to a request for the data under 
the Freedom of Information Act. the Government's determination to 
withhold or disclose a record will be based upon the particular 
circumstance involving the data in question and whether the data may be 
exempted from disclosure under the Freedom of Information Act. In 
accordance with Executive Order 12600 and to the extent permitted by 
law, the Government will notify the offeror before it releases 
restricted data.
    (b) By submitting a proposal or quotation in response to this 
solicitation:
    (1) The offeror acknowledges that the Department may not be able to 
withhold nor deny access to data requested pursuant to the Act and that 
the Government's FOI officials shall make that determination;
    (2) The offeror agrees that the Government is not liable for 
disclosure if the Department has determined that disclosure is required 
by the Act;
    (3) The offeror acknowledges that proposals not resulting in a 
contract remain subject to the Act; and
    (4) The offeror agrees that the Government is not liable for 
disclosure or use of unmarked data and may use or disclose the data for 
any propose, including the release of the information pursuant to 
requests under the Act.
    (c) Offerors are cautioned that the Government reserves the right to 
reject any proposal submitted with (1) a restrictive legend or statement 
differing in substance from the one required by the solicitation 
provision in FAR 52.515-12, Restriction on Disclosure and Use of Data, 
or (2) a statement taking exceptions to the terms of (a) or (b) of this 
provision.

                           (End of provision)



3452.216-70  Additional cost principles.

    Insert the following clause in solicitations and contracts as 
prescribed in 3416.307(b):

                  Additional Cost Principles (Aug 1987)

    (a) Bid and Proposal Costs. Bid and proposal costs are the immediate 
costs of preparing bids, proposals, and applications for potential 
Federal and non-Federal grants, contracts, and other agreements, 
including the development of scientific, cost and other data needed to 
support the bids, proposals and applications. Bid and proposal costs of 
the current accounting period are allowable as indirect costs; bid and 
proposal costs of past accounting periods are unallowable as costs of 
the current period. However, if the organization's established practice 
is to treat these costs by some other method, they may be accepted if 
they are found to be reasonable and equitable. Bid and proposal costs do 
not include independent research and development costs or pre-award 
costs.
    (b) Independent research and development costs. Independent research 
and development is research and development that is not sponsored by 
Federal and non-Federal grants, contracts, or other agreements. 
Independent research and development shall be allocated its 
proportionate share of indirect costs on the same basic as the 
allocation of indirect costs of sponsored research and development. The 
costs of independent research and development, including its 
proportionate share of indirect costs, are unallowable.

[[Page 145]]

                             (End of clause)



3452.216-71  Negotiated overhead rates--fixed.

    Insert the following clause in cost-reimbursement contracts as 
prescribed in 3416.701:

               Negotiated Overhead Rates--Fixed (Aug 1987)

    (a) Notwithstanding the provisions of the clause entitled 
``Allowable Cost and Payment'', the allowable indirect costs under this 
contract shall be obtained by applying negotiated fixed overhead rates 
for the applicable period(s) to bases agreed upon by the parties, as 
specified below. A negotiated fixed rate(s) is based on an estimate of 
the costs which will be incurred during the period for which the rate(s) 
applies. If the application of the negotiated fixed rates(s) against the 
actual bases during a given fiscal period produces an amount greater or 
less than the indirect costs determined for that period, the greater or 
lesser amount(s) will be carried forward to a subsequent period.
    (b) The contractor, as soon as possible but no later than six months 
after the close of its fiscal year, or such other period as may be 
specified in the contract, shall submit to the contracting officer or 
the duly authorized representative, with a copy to the cognizant audit 
activity, a proposed fixed overhead rate or rates based on the 
contractor's actual cost experience during the fiscal year, including 
adjustment, if any, for amounts carried forward, together with 
supporting cost data. Negotiation of fixed overhead rates, including 
carry-forward adjustments, if any, by the contractor and the contracting 
officer, or the duly authorized representative, shall be undertaken as 
promptly as practicable after receipt of the contractor's proposal.
    (c) Allowability of costs and acceptability of cost allocation 
methods shall be determined in accordance with part 31 of the Federal 
Acquisition Regulation (FAR) in effect on the date of this contract.
    (d) The results of each negotiation shall be set forth in an 
amendment to this contract, which shall specify (1) the agreed fixed 
overhead rates, (2) the bases to which the rates apply, (3) the fiscal 
year, unless the parties agreed to a different period, for which the 
rates apply, and (4) the specific items treated as direct costs or any 
changes in the items previously agreed to be direct costs.
    (e) Pending establishment of fixed overhead rates for any fiscal 
year or different period agreed to by the parties, the contractor shall 
be reimbursed either at the rates fixed for the previous fiscal year or 
other period or at billing rates acceptable to the contracting officer, 
subject to appropriate adjustment when the final rates for the fiscal 
year or other period are established.
    (f) Any failure of the parties to agree on any fixed rate or rates 
or to the amount of any carry-forward adjustment under this clause shall 
not be considered a dispute for decision by the contracting officer 
within the meaning of the Disputes clause of this contract. If for any 
fiscal year or other period specified in the contract, the parties fail 
to agree to a fixed overhead rate or rates, it is agreed that the 
allowable indirect costs under this contract shall be obtained by 
applying negotiated final overhead rates, in accordance with the terms 
of the Allowable Cost and Payment clause, in effect on the date of this 
contract.
    (g) Submission of proposed fixed, provisional, and/or final overhead 
rates, together with appropriate data in support thereof, to the 
contracting officer or the duly authorized representative and agreements 
on fixed, provisional, and/or final overhead rates entered into between 
the contractor and the contracting officer or the duly authorized 
representative, as evidenced by negotiated overhead rate agreements 
signed by both parties, shall satisfy the requirements of paragraphs 
(b), (c), (d), and (e) of this clause.

                             (End of clause)



3452.227-70  Publication and publicity.

    As prescribed in 3427.470, insert the following clause in all 
solicitations and contracts other than purchase orders:

                  Publication and Publicity (Aug 1987)

    (a) Unless otherwise specified in this contract, the contractor is 
encouraged to publish and otherwise promote the results of its work 
under this contract. A copy of each article or work submitted by the 
contractor for publication shall be promptly sent to the Contracting 
Officer's Technical Representative. The contractor shall also inform the 
representative when the article or work is published and furnish a copy 
in the published form.
    (b) The contractor shall acknowledge the support of the Department 
of Education in publicizing the work under this contract in any medium. 
This acknowledgment shall read substantially as follows:
    ``This project has been funded at least in part with Federal funds 
from the U.S. Department of Education under contract number ----------. 
The content of this publication does not necessarily reflect the views 
or policies of the U.S. Department of Education nor does mention of 
trade names, commercial products, or organizations imply endorsement by 
the U.S. Government.''

[[Page 146]]

                             (End of clause)



3452.227-71  Paperwork Reduction Act.

    As prescribed in 3427.471, insert the following clause in all 
solicitations and contracts:

                   Paperwork Reduction Act (Aug 1987)

    (a) The Paperwork Reduction Act of 1980 (Pub. L. 96-511) applies to 
contractors that collect information for use or disclosure by the 
Federal Government.
    If the contractor will collect information requiring answers to 
identical questions from 10 or more people then no plan, questionnaire, 
interview guide, or other similar device for collecting information may 
be used without first obtaining clearance from the Deputy Under 
Secretary for Management (DUSM) or his/her delegate within the 
Department of Education (ED) and the Office of Management and Budget 
(OMB). Contractors and Contracting Officers' Technical Representatives 
shall be guided by the provisions of 5 CFR part 1320, Controlling 
Paperwork Burdens on the Public, and seek the advice of the Department's 
Paperwork Clearance Officer to determine the procedures for acquiring 
DUSM and OMB clearance.
    (b) The contractor shall obtain the required DUSM and OMB clearance 
through the Contracting Officer's Technical Representative before 
expending any funds or making public contacts for the collection of 
information described in paragraph (a) of this clause. The authority to 
expend funds and proceed with the collection shall be in writing by the 
contracting officer. The contractor must plan at least 120 days for DUSM 
and OMB clearance. Excessive delay caused by the Government which arises 
out of causes beyond the control and without the fault or negligence of 
the contractor will be considered in accordance with the Excusable 
Delays or Default clause of this contract.

                             (End of clause)



3452.227-72  Advertising of awards.

    As prescribed in 3427.472, insert the following clause in all 
solicitations and contracts other than purchase orders:

                    Advertising of Awards (Aug 1987)

    The contractor agrees not to refer to awards issued by the 
Department of Education in commercial advertising in such a manner as to 
state or imply that the product or service provided is endorsed by the 
Federal Government or is necessarily considered by the Government to be 
superior to other products or services.

                             (End of clause)



3452.228-70  Required insurance.

    As prescribed in 3428.370, insert the following clause in all 
solicitations and resultant cost-reimbursement contracts:

                      Required Insurance (Aug 1987)

    (a) The contractor shall procure and maintain such insurance as 
required by law or regulation, including but not limited to the 
requirements of FAR subpart 28.3 or by the written direction of the 
contracting officer. Prior written approval of the contracting officer 
shall be required with respect to any insurance policy the premiums for 
which the contractor proposes to treat as a direct cost under this 
contract and with respect to any proposed qualified program of self-
insurance. The terms of any other insurance policy shall be submitted to 
the contracting officer for approval upon request.
    (b) Unless otherwise authorized in writing by the contracting 
officer, the contractor shall not procure or maintain for its own 
protection any insurance covering loss or destruction of or damage to 
Government property.

                             (End of clause)



3452.232-70  Prohibition against the use of ED funds to influence 
legislation or appropriations.

    The following clause is to be used in accordance with 3432.770:

  Prohibition Against the Use of ED Funds to Influence Legislation or 
                        Appropriations (Apr 1987)

    No part of any funds under this contract shall be used to pay the 
salary and expenses of any contractor, or agency acting for the 
contractor, to engage in any activity designed to influence legislation 
or appropriations pending before the Congress.

                             (End of clause)



3452.232-71  Incremental funding.

    As prescribed in 3452.771, insert the following provision in 
solicitations:

                     Incremental Funding (Aug 1987)

    (a) Sufficient funds are not presently available to cover the total 
cost of the complete project described in this solicitation. However, it 
is the Government's intention to negotiate and award a contract using 
the incremental funding concepts described in the clause titled 
``Limitation of Funds'' in FAR 52.232-22. Under that clause, which will 
be included in the resultant contract, initial

[[Page 147]]

funds will be obligated under the contract to cover an estimated base 
performance period. Additional funds are intended to be allotted to the 
contract by contract modification, up to and including the full 
estimated cost of the entire period of performance. This intent 
notwithstanding, the Government will not be obligated to reimburse the 
contractor for cost incurred in excess of the periodic allotments, nor 
will the contractor be obligated to perform in excess of the amount 
allotted.
    (b) The Limitation of Cost clause in FAR 52.232-20 shall supersede 
the Limitation of Funds clause in the event the contract becomes fully 
funded.

                           (End of provision)



3452.232-72  Method of payment.

    As prescribed in 3432.170, insert the following clause in all 
solicitations and contracts:

                      Method of Payment (Aug 1987)

    (a) Payments under this contract will be made either by check or by 
wire transfer through the Treasury Financial Communications System at 
the option of the Government.
    (b) The contractor shall forward the following information in 
writing to (designated payment party) not later than seven days after 
receipt of notice of award.
    (1) Full name (where practicable), title, phone number, and complete 
mailing address of responsible official(s) to whom check payments are to 
be sent, and who may be contacted concerning the bank account 
information requested below.
    (2) The following bank account information required to accomplish 
wire transfers:
    (i) Name, address, and telegraphic abbreviation of the receiving 
financial institution:
    (ii) Receiving financial institution's nine-digit American Bankers 
Association (ABA) identifying number for routing transfer of funds. 
(Provide this number only if the receiving financial institution has 
access to the Federal Reserve Communications System.)
    (iii) Recipient's name and account number at the receiving financial 
institution to be credited with the funds.
    (iv) If the receiving financial institution does not have access to 
the Federal Reserve Communications System, provide the name of the 
correspondent financial institution through which the receiving 
financial institution receives electronic funds transfer messages. If a 
correspondent financial institution is specified, also provide the 
address and telegraphic abbreviation of that institution and its nine-
digit ABA identifying number for routing transfer of funds.
    (c) Any changes to the information furnished under paragraph (b) of 
this clause shall be furnished to (designated payment office) in writing 
at least 30 days before the effective date of the change. It is the 
contractor's responsibility to furnish these changes promptly to avoid 
payments to erroneous addresses or bank accounts.
    (d) The document furnishing the information required in paragraphs 
(b) and (c) must be dated and contain the signature, title, and 
telephone number of the contractor's official authorized to provide it, 
as well as the contractor's name and contract number.

                             (End of clause)



3452.237-70  Identification of reports under consulting services contracts.

    As prescribed in 3437.270, insert the following clause in all 
solicitations and contracts for consulting services:

 Identification of Reports Under Consulting Service Contracts (Aug 1987)

    The contractor shall set forth on the cover of every report 
submitted pursuant to this contract the following information:
    (a) Name and business address of the contractor; (b) contract 
number; (c) contract dollar amount; (d) whether the contract was 
competitively or noncompetitively awarded; (e) name of the Contracting 
Officer's Technical Representative and complete office identification 
and address; and (f) names of the managerial and professional personnel 
responsible for the content and preparation of the report.

                             (End of clause)



3452.237-71  Services of consultants.

    As prescribed in 3437.271, insert the following clause in all 
solicitations and resultant cost-reimbursement contracts:

                   Services of Consultants (Aug 1987)

    Except as otherwise expressly provided elsewhere in this contract, 
and notwithstanding the provisions of the clause of the contract 
entitled ``Subcontracts Under Cost-Reimbursement and Letter Contracts,'' 
the prior written approval of the contracting officer shall be required:
    (a) If any employee of the contractor is to be paid as a 
``consultant'' under this contract; and
    (b) For the utilization of the services of any consultant under this 
contract exceeding the daily rate set forth elsewhere in this contract 
or, if no amount is set forth, $150, exclusive of travel costs, or if 
the services of any consultant under this contract will exceed 10 days 
in any calendar year.

[[Page 148]]

    If that contracting officer's approval is required, the contractor 
shall obtain and furnish to the contracting officer information 
concerning the need for the consultant services and the reasonableness 
of the fees to be paid, including, but not limited to, whether fees to 
be paid to any consultant exceed the lowest fee charged by consultant to 
others for performing consultant services of a similar nature.

                             (End of clause)



3452.242-70  Litigation and claims.

    As prescribed in 3442.7002, insert the following clause in all 
solicitations and resultant cost-reimbursement contracts:

                    Litigation and Claims (Aug 1987)

    (a) The contractor shall give the contracting officer immediate 
notice in writing of:
    (1) Any action, filed against the contractor arising out of the 
performance of this contract, including any proceeding before any 
administrative agency or court of law, and also including, but not 
limited to, the performance of any subcontract hereunder; and
    (2) Any claim against the contractor for a cost which is allowable 
under the clause entitled ``Allowable Cost and Payment.''
    (b) Except as otherwise directed by the contracting officer, the 
contractor shall immediately furnish the contracting officer copies of 
all pertinent papers received under that action or claim.
    (c) If required by the contracting officer, the contractor shall:
    (1) Effect an assignment and subrogation in favor of the Government 
of all the contractor's rights and claim (except those against the 
Government) arising out of the action or claim against the contractor; 
and
    (2) Authorize the Government to settle or defend the action or claim 
and to represent the contractor in, or to take charge of, the action.
    (d) If the settlement or defense of an action or claim is undertaken 
by the Government, the contractor shall furnish all reasonable required 
assistance. However, if an action against the contractor is not covered 
by a policy of insurance, the contractor shall notify the contracting 
officer and proceed with the defense of the action in good faith.
    (e) To the extent not in conflict with any applicable policy of 
insurance, the contractor may, with the contracting officer's approval, 
settle any such action or claim.
    (f)(1) The Government shall not be liable for the expense of 
defending any action or for any costs resulting from the loss thereof to 
the extent that the contractor would have been compensated by insurance 
that was required by law, regulation, contract clause, or other written 
direction of the contracting officer, but which the contractor failed to 
secure through its own fault or negligence.
    (2) In any event, unless otherwise expressly provided in this 
contract, the contractor shall not be reimbursed or indemnified by the 
Government for any cost or expense of liability that the contractor may 
incur or be subject to by reason of any loss, injury, or damage, to the 
person or to real or personal property of any third parties as may arise 
from the performance of this contract.

                             (End of clause)



3452.242-71  Notice to the Government of delays.

    As prescribed in 3442.7003, insert the following clause in all 
solicitations and contracts other than purchase orders:

              Notice to the Government of Delays (Aug 1987)

    Whenever the contractor has knowledge that any actual or potential 
situation, including but not limited to labor disputes, is delaying or 
threatens to delay the timely performance of work under this contract, 
the contractor shall immediately give written notice thereof, including 
all relevant information with respect thereto, to the contracting 
officer.

                             (End of clause)



3452.242-72  Withholding of contract payments.

    As prescribed in 3442.7001, insert the following clause in all 
solicitations and contacts other than purchase orders:

               Withholding of Contract Payments (Aug 1987)

    Notwithstanding any other payment provisions of this contract, 
failure of the contractor to submit required reports when due or failure 
to perform or deliver required work, supplies, or services, or failure 
to meet any of the requirements of the contract, will result in the 
withholding of payments under this contract in such amounts as the 
contracting officer deems appropriate, unless the failure arises out of 
causes beyond the control, and without the fault of negligence, of the 
contractor, as defined by the clause entitled ``Excusable Delays'' or 
``Default'', as applicable. The Government shall promptly notify the 
contractor of its intention to withhold payment of any invoice or 
voucher submitted. Payment will be withheld until the failure is cured, 
a new delivery schedule is agreed upon, or payment is made as part of a 
termination settlement.

[[Page 149]]

                             (End of clause)



3452.242-73  Accessibility of meetings, conferences, and seminars to 
persons with disabilities.

    As prescribed in 3442.7101(b), insert the following clause in all 
solicitations and contracts:

  Accessibility of Meetings, Conferences, and Seminars to Persons With 
                         Disabilities (Aug 1987)

    The contractor shall assure that any meeting, conference, or seminar 
held pursuant to the contract will meet all applicable standards for 
accessibility to persons with disabilities pursuant to section 504 of 
the Rehabilitation Act of 1973, as amended (29 U.S.C. 794) and any 
implementing regulations of the Department.

                             (End of clause)



3452.243-70  Key personnel.

    As prescribed in 3443.106(b), insert the following clause in all 
solicitations and resultant cost-reimbursement contracts:

                        Key Personnel (Aug 1987)

    The personnel designated as key personnel in this contract are 
considered to be essential to the work being performed hereunder. Prior 
to diverting any of the specified individuals to other programs, or 
otherwise substituting any other personnel for specified personnel, the 
contractor shall notify the contracting officer reasonably in advance 
and shall submit justification (including proposed substitutions) in 
sufficient detail to permit evaluation of the impact on the contract 
effort. No diversion or substitution shall be made by the contractor 
without the written consent of the contracting officer; provided, that 
the contracting officer may ratify a diversion or substitution in 
writing and that ratification shall constitute the consent of the 
contracting officer required by this clause. The contract shall be 
modified to reflect that addition or deletion personnel.

                             (End of clause)



3452.247-70  Foreign travel.

    As prescribed in 3447.7000, insert the following clause in all 
solicitations and resultant cost-reimbursement contracts:

                        Foreign Travel (Aug 1987)

    Foreign travel shall not be undertaken without the prior written 
approval of the contracting officer. As used in this clause, ``foreign 
travel'' means travel outside the fifty States comprising the United 
States, the District of Columbia, and Canada.

                             (End of clause)

[[Page 151]]



                   CHAPTER 35--PANAMA CANAL COMMISSION




                          (Parts 3500 to 3599)

  --------------------------------------------------------------------

                          SUBCHAPTER A--GENERAL
Part                                                                Page
3501            Federal Acquisition Regulations System......         153
3502            Definitions of words and terms..............         159
3503            Improper business practices and personal 
                    conflicts of interest...................         160
3504            Administrative matters......................         163
           SUBCHAPTER B--COMPETITION AND ACQUISITION PLANNING
3505            Publicizing contract actions................         164
3506            Competition requirements....................         164
3507            Acquisition planning........................         166
3508            Required sources of supplies and services...         167
3509            Contractor qualifications...................         168
3510            Specifications, standards, and other 
                    purchase descriptions...................         175
          SUBCHAPTER C--CONTRACTING METHODS AND CONTRACT TYPES
3513            Small purchase and other simplified purchase 
                    procedures..............................         178
3514            Sealed bidding..............................         181
3515            Contracting by negotiation..................         182
3516            Types of contracts..........................         185
3517            Special contracting methods.................         187
                  SUBCHAPTER D--SOCIOECONOMIC PROGRAMS
3519            Small business and small disadvantaged 
                    business concerns.......................         189
3520            Labor surplus area concerns.................         189
3522            Application of labor laws to Government 
                    acquisitions............................         190
3524            Protection of privacy and freedom of 
                    information.............................         193

[[Page 152]]

3525            Foreign acquisition.........................         193
             SUBCHAPTER E--GENERAL CONTRACTING REQUIREMENTS
3527            Patents, data and copyrights................         198
3528            Bonds and insurance.........................         198
3529            Taxes.......................................         200
3531            Contract cost principles and procedures.....         201
3532            Contract financing..........................         201
3533            Protests, disputes, and appeals.............         204
             SUBCHAPTER F--SPECIAL CATEGORIES OF CONTRACTING
3536            Construction and architect-engineer 
                    contracts...............................         205
3537            Service contracting.........................         210
                    SUBCHAPTER G--CONTRACT MANAGEMENT
3542            Contract administration.....................         213
3543            Contract modifications......................         213
3547            Transportation..............................         213
3551            Use of Government sources by contractors....         213
                     SUBCHAPTER H--CLAUSES AND FORMS
3552            Solicitation provisions and contract clauses         215
3553            Forms.......................................         230
             SUBCHAPTER I--AGENCY SUPPLEMENTARY REGULATIONS
3570            Acquisition of Panamanian supplies and 
                    services................................         233

[[Page 153]]



                          SUBCHAPTER A_GENERAL





PART 3501_FEDERAL ACQUISITION REGULATIONS SYSTEM--Table of Contents




Sec.
3501.000 Scope of part.

               Subpart 3501.1_Purpose, Authority, Issuance

3501.101 Purpose.
3501.102 Authority.
3501.103 Applicability.
3501.104 Issuance.
3501.104-1 Publication and code arrangement.
3501.104-2 Arrangement of regulations.
3501.104-3 Copies.
3501.105 OMB approval under the Paperwork Reduction Act.

                      Subpart 3501.2_Administration

3501.201 Maintenance of the FAR.
3501.201-1 The two councils.

              Subpart 3501.3_Agency Acquisition Regulations

3501.301 Policy.
3501.303 Publication and codification.
3501.304 Agency control and compliance procedures.

             Subpart 3501.4_Deviations From the FAR and PAR

3501.401 Definition.
3501.403 Individual deviations.
3501.404 Class deviations.
3501.405 Deviations pertaining to treaties and executive agreements.

        Subpart 3501.6_Contracting Authority and Responsibilities

3501.601 General.
3501.602 Contracting officers.
3501.602-3 Ratification of unauthorized commitments.
3501.602-370 Procedures.
3501.603 Selection, appointment, and termination of appointment.
3501.603-1 General.
3501.670 Legal review of proposed contract actions.
3501.670-1 Contract actions requiring legal review.
3501.670-2 Documents to be submitted for legal review.
3501.670-3 General Counsel's legal review.

    Authority: 40 U.S.C. 486(c).

    Source: 55 FR 7635, Mar. 2, 1990, unless otherwise noted.



3501.000  Scope of part.

    This part sets forth basic policies and general information about 
the Panama Canal Commission Acquisition Regulation, referred to as the 
PAR, and its relationship to the Federal Acquisition Regulation, 
referred to as the FAR.



               Subpart 3501.1_Purpose, Authority, Issuance



3501.101  Purpose.

    (a) The Federal Acquisition Regulations System brings together, in 
title 48 of the Code of Federal Regulations (CFR), the acquisition 
regulations of all executive agencies of the United States Government. 
This subpart establishes the PAR as chapter 35 of title 48, CFR. The 
FAR, which is the primary document for all agencies within this system, 
is issued as chapter 1 of title 48, CFR.
    (b) The purpose of the PAR is to implement the FAR where further 
implementation is needed and to supplement the FAR when coverage is 
needed for subject matter not contained in the FAR. The PAR is not, by 
itself, a complete regulation. It must be used in conjunction with, and 
is subordinate to, the FAR.



3501.102  Authority.

    The PAR and amendments thereto are issued by the Administrator of 
the Panama Canal Commission (Commission) pursuant to the authority of 
section 205(c) of the Federal Property and Administrative Services Act 
of 1949 (40 U.S.C. 486(c)), as amended, and other applicable law.



3501.103  Applicability.

    The FAR and the PAR apply to all acquisitions of the Commission, 
except where expressly excluded.



3501.104  Issuance.



3501.104-1  Publication and code arrangement.

    (a) The PAR is published in--

[[Page 154]]

    (1) The Federal Register;
    (2) Cumulated form at 48 CFR chapter 35; and
    (3) A separate loose-leaf form.



3501.104-2  Arrangement of regulations.

    (a) General. The PAR is divided into the same parts, subparts, 
sections, subsections and paragraphs as is the FAR. However, when the 
FAR coverage is adequate by itself, there will be no corresponding PAR 
coverage.
    (b) Numbering. (1) Where the PAR implements the FAR, the 
implementing part, subpart, section or subsection of the PAR will be 
numbered and captioned, to the extent feasible, the same as the FAR 
part, subpart, section or subsection being implemented except that the 
implementation will be preceded with a 35 or a 350 such that there will 
always be four numbers to the left of the decimal. For example, the PAR 
implementation of FAR 1.104-1 is shown as 3501.104-1 and the PAR 
implementation of FAR subpart 24.1 is shown as subpart 3524.1. 
Similarly, individual paragraphs at the section and subsection levels of 
the PAR correspond, to the extent feasible, to the FAR paragraph 
designations that are being implemented.
    (2) Material which supplements the FAR as new parts, subparts, 
sections, or subsections will be assigned the numbers 70 and up. For 
example, there is no FAR coverage on the preferential acquisition of 
supplies and services obtainable in the Republic of Panama as provided 
for in Article IX of the Agreement in Implementation of Article III of 
the Panama Canal Treaty of 1977. This supplementary material is 
identified as part 3570.
    (3) Because the PAR implements the FAR only where further 
implementation is necessary, there are gaps in the PAR numbering and 
paragraphing sequence. For example, the PAR skips from part 3510 to part 
3513, from subpart 3501.4 to subpart 3501.6, and from section 3501.301 
to section 3501.303 because the FAR coverage at parts 11 and 12, subpart 
1.5, and section 1.302, respectively, does not require further 
implementation. Similarly, section 3501.405 of the PAR begins at 
paragraph (d) because paragraphs (a), (b), and (c) at FAR 1.405 do not 
require further implementation.
    (c) References and citations. (2) This regulation may be referred to 
as the Panama Canal Commission Acquisition Regulation or the PAR. 
References to PAR material outside this regulation may be cited in 
informal documents as PAR followed by the identifying number. For 
example, this subparagraph would be informally cited as PAR 3501.104-
2(c)(2). In formal documents outside this regulation, such as legal 
briefs, references to PAR material should include reference to title 48 
of the Code of Federal Regulations. For example, this subparagraph would 
be formally cited as 48 CFR 3501.104-2(c)(2).
    (3) References to FAR or PAR material within this regulation will be 
made as follows:
    (i) FAR parts or subparts will be referred to in those terms 
followed by the identifying number--for example, FAR part 1; FAR subpart 
1.1. FAR subdivisions below the subpart level (i.e., sections, 
subsections, paragraphs, subparagraphs, or subdivisions) will simply 
state FAR followed by the identifying number--for example, FAR 1.104-
2(c)(3)(i).
    (ii) PAR parts or subparts will be referred to only as part or 
subpart followed by the identifying number--for example, part 1; subpart 
1.1. PAR subdivisions below the subpart level will simply indicate the 
identifying number--for example, this subdivision would be cited as 
3501.104-2(c)(3)(ii).



3501.104-3  Copies.

    Copies of the PAR in Federal Register and CFR form may be purchased 
from the Superintendent of Documents, Government Printing Office (GPO), 
Washington, DC 20402. Copies of the loose-leaf PAR are distributed 
within the Panama Canal Commission and may be obtained from the 
Administrative Services Division, Records Management Branch, telephone 
(507) 52-7642.



3501.105  OMB approval under the Paperwork Reduction Act.

    The information collection and recordkeeping requirements contained 
in

[[Page 155]]

the PAR have been approved by the Office of Management and Budget (OMB) 
in accordance with the Paperwork Reduction Act of 1980 (Pub. L. 96-511). 
OMB control number 3207-0007 is assigned to the following PAR sections:

                              PAR Sections

3513.107(a)(4)(i)
3513.107(a)(4)(ii)
3513.107(a)(4)(iii)
3513.107(a)(4)(iv)
3515.804-6
3536.571



                      Subpart 3501.2_Administration



3501.201  Maintenance of the FAR.



3501.201-1  The two councils.

    (e)(2) The Commission's Procurement Executive, in consultation with 
the General Counsel, is responsible for overseeing the development of 
the agency position on proposed revisions to the FAR and responding to 
the FAR Secretariat when such action is appropriate.



              Subpart 3501.3_Agency Acquisition Regulations



3501.301  Policy.

    (a)(1) The Procurement Executive, in consultation with the General 
Counsel and such other agency officials as may be appropriate, is 
responsible for the development, preparation, and maintenance of PAR 
issuances by the Administrator. In addition, the Procurement Executive 
is authorized to issue internal policies, procedures, instructions, and 
guidelines to clarify or implement the FAR or PAR within the Commission. 
Such internal issuances are subject to review by the General Counsel.
    (2) Heads of contracting activities and division chiefs are 
authorized to issue internal guidance of the type described in FAR 
1.301(a)(2).
    (b) Public participation in the promulgation of the PAR shall be in 
the same manner as specified for the FAR in FAR subpart 1.5. Where 
solicitation of public comment on significant revisions is impracticable 
prior to promulgation, the revisions may be set forth in temporary 
regulations. Comments will be solicited on the temporary regulations and 
considered prior to formulating the final regulations.



3501.303  Publication and codification.

    (a) The PAR is codified as chapter 35 in title 48, Code of Federal 
Regulations.
    (c) The PAR replaces the former Part 87--Procurement, of the Panama 
Canal Administration and Regulations (PCAR), in its entirety.



3501.304  Agency control and compliance procedures.

    (a) Whenever contracting activities and organizational components 
thereof wish to propose for publication in the Federal Register an 
agency acquisition regulation that they consider necessary to implement 
or supplement the FAR or PAR, they must prepare a memorandum that 
explains the need, background, justification, and significant aspects of 
the proposed regulation and send it to the Procurement Executive. The 
Procurement Executive and General Counsel will (1) review the proposed 
regulation to assure compliance with FAR part 1, and (2) either approve 
or disapprove it. If approved, the Procurement Executive will prepare 
the proposed regulation in Federal Register format for issuance by the 
Administrator.



             Subpart 3501.4_Deviations From the FAR and PAR



3501.401  Definition.

    A deviation from the PAR is defined in the same manner as a 
deviation from the FAR (see FAR 1.401).



3501.403  Individual deviations.

    Requests for individual deviations from the FAR and the PAR shall be 
submitted by the Head of the Contracting Activity (HCA) through the 
General Counsel to the Procurement Executive for approval. Requests 
submitted shall cite the specific part of the FAR or PAR from which it 
is desired to deviate, shall set forth the nature of the deviation(s), 
and shall give the reasons for the action requested. The Procurement 
Executive shall transmit copies of approved individual FAR deviations to 
the FAR Secretariat.

[[Page 156]]



3501.404  Class deviations.

    Requests for class deviations to the PAR shall be submitted in 
advance by the HCA through the General Counsel to the Procurement 
Executive for processing in accordance with FAR 1.404 and this section. 
Requests submitted shall include the same type of information as 
required for individual deviations as prescribed in 3501.403. The 
Procurement Executive may approve class deviations to the FAR and the 
PAR and shall transmit copies of approved class FAR deviations to the 
FAR Secretariat as required by FAR 1.404.



3501.405  Deviations pertaining to treaties and executive agreements.

    (d) The Procurement Executive is designated as the central control 
point within the Commission for transmittal of deviations from the FAR 
required to comply with treaties and executive agreements to which the 
United States is a party. Copies of the text of any deviation authorized 
in accordance with FAR 1.405 (b) or (c) shall be forwarded by the HCA to 
the Procurement Executive through the General Counsel for further 
transmittal to the FAR Secretariat.
    (e) When a deviation required to comply with a treaty or executive 
agreement is inconsistent with FAR coverage based on law, the 
Procurement Executive shall forward a request for deviation to the FAR 
Secretariat for processing as required by FAR 1.405(e).



        Subpart 3501.6_Contracting Authority and Responsibilities



3501.601  General.

    (a) Commission contracting activities are established within the 
General Services Bureau for the acquisition of supplies and services, 
and the Engineering and Construction Bureau for the acquisition of 
construction, including architect-engineer services and other services 
related to construction. The Directors of these bureaus are designated 
by the Administrator as Heads of Contracting Activities and are the 
officials who have the authority and responsibility to appoint 
contracting officers to contract for authorized supplies and services, 
including construction and architect-engineer services, that fall within 
the scope of their respective contracting activities.
    (b) In addition, bureau directors and heads of independent units are 
delegated contracting authority, not to exceed amounts established by 
the General Services Director, for the decentralized procurement of 
supplies and services on Division Purchase Orders (see 3513.505-71). 
This authority is granted to assist Commission activities in expediting 
minor purchases. Such authority may be redelegated pursuant to 3513.505-
71(b)(1)(ii).



3501.602  Contracting officers.



3501.602-3  Ratification of unauthorized commitments.

    (a) Definitions.
    Responsible contracting officer, as used in 3501.602-370, means the 
individual at the appropriate level of contracting authority who can 
execute any contractual document that may be required to formalize an 
unauthorized commitment. Depending on the circumstances, the term can 
apply to the existing contracting officer, the prospective contracting 
officer (when a purchase order or contract does not exist) or, in the 
case of a contracting officer who acted in excess of the limits of his 
delegated authority, the next individual in the chain of contracting 
authority who has the appropriate authority to execute the necessary 
contractual document.
    (b) Policy. (1) Unauthorized commitments do not legally obligate the 
Commission for the expenditure of funds. If an unauthorized commitment 
would have been valid had it been authorized by a contracting officer 
acting within the limits of his delegated authority, then the 
unauthorized commitment may be ratified in accordance with the 
procedures prescribed in 3501.602-370. If an unauthorized commitment is 
otherwise improper, it cannot be ratified and the Commission must deny 
legal liability, in which case the individual who made the unauthorized 
commitment may be personally liable for such action.

[[Page 157]]

    (2) The cognizant Head of the Contracting Activity (HCA) is the 
ratification official for the approval of unauthorized commitments and 
the Procurement Executive is the reviewing official for such approvals. 
The HCA may ratify an unauthorized commitment only if:
    (i) The conditions in FAR 1.602-3(c) are applicable, and
    (ii) The Procurement Executive concurs with the proposed 
ratification.



3501.602-370  Procedures.

    These procedures apply to all unauthorized commitments, whether 
written or oral and without regard to dollar value. Unauthorized 
commitments (other than claims to be processed in accordance with FAR 
subpart 33.2) shall be processed as follows:
    (a) Whenever it is discovered that any person is performing or has 
performed work as a result of an unauthorized commitment, that person 
shall be advised by the cognizant contracting office that such work is 
being or was performed at that person's own risk pending establishment 
of valid contractual coverage.
    (b) The individual who made the unauthorized commitment shall 
furnish to the responsible contracting officer all records and documents 
concerning the commitment and a complete, written statement of the facts 
including, but not limited to, a description of the work or product 
ordered; why the work or product was necessary to and for the benefit of 
the Commission; the estimated or agreed upon price; citation of funds 
available at time of commitment; the current status of performance by 
the actual or prospective contractor; the reason why normal acquisition 
procedures were not followed and, if a contract does not exist, a 
statement as to why the prospective contractor was selected including, 
if applicable, identification of other sources that were considered.
    (c) The responsible contracting officer shall--
    (1) Obtain from the head of the requisitioning office with 
appropriate approval authority:
    (i) Affirmation that the Commission has or will obtain a benefit 
from the unauthorized commitment,
    (ii) A written certification by the responsible funding 
certification officer that funds presently are available and were 
available at the time the unauthorized commitment was made, and when 
applicable,
    (iii) A statement of corrective action that office will take to 
preclude repetition of the incident;
    (2) Review and determine the adequacy of all facts, records, and 
documents furnished, and when necessary, obtain any additional material 
or information pertinent to the review and evaluation of the 
unauthorized commitment;
    (3) Determine whether the price is fair and reasonable, and state in 
the record the reason therefor;
    (4) Prepare, certify, and obtain any necessary written approval of a 
justification for other than full and open competition when required 
pursuant to FAR subpart 6.3;
    (5) State in the record the corrective action to be taken to 
preclude repetition of the incident if the individual that made the 
unauthorized commitment is under the supervision of the responsible 
contracting officer; and
    (6) Forward the request for ratification (i.e., all the information 
required in paragraphs (b) and (c) of this subsection) to the cognizant 
HCA, together with a written recommendation of an appropriate course of 
action including, at a minimum, a specific recommendation as to whether 
payment should be made and the reasons therefor.
    (d) The cognizant HCA, upon receipt and review of the request for 
ratification file, shall determine whether ratification is in order. If 
so, the HCA shall forward the file to the Procurement Executive for 
review. If not, the HCA shall return the file to the responsible 
contracting officer, together with a written explanation for the 
decision and instructions for disposition of the case.
    (e) The Procurement Executive shall review proposed ratifications 
submitted by HCAs. If the Procurement Executive concurs that 
ratification is in order, he shall obtain General Counsel concurrence 
that payment may be

[[Page 158]]

made and return the file to the cognizant HCA for that individual's 
ratification and subsequent return to the responsible contracting 
officer together with, when appropriate, instructions to issue a 
purchase order, contract, or contract modification, as applicable. If 
the Procurement Executive does not concur with the proposed 
ratification, he shall return the file to the HCA, together with a 
written explanation for the decision and instructions for disposition of 
the case. He will provide a copy to the General Counsel.



3501.603  Selection, appointment, and termination of appointment.



3501.603-1  General.

    Heads of Contracting Activities may appoint as contracting officers 
one or more capable and qualified individuals of their respective 
staffs. These appointments may be made by memoranda delegating 
contracting authority, including any limitations to such authority, to 
positions or to named individuals. Appointments shall be evidenced by a 
``Certificate of Appointment'', as required by FAR 1.603-3. If 
contracting authority is delegated to a position by memorandum, the 
``Certificate of Appointment'' shall state the name of the individual 
assigned to the position.



3501.670  Legal review of proposed contract actions.



3501.670-1  Contract actions requiring legal review.

    The following contract actions shall be submitted to the General 
Counsel for review for legal sufficiency:
    (a) All proposed contracts with an estimated cost of $100,000 or 
more (in advance of issuance);
    (b) All alleged mistakes in bids, other than apparent clerical 
mistakes that can be corrected pursuant to FAR 14.406-2;
    (c) All determinations and findings required under the FAR;
    (d) All proposed utility contracts;
    (e) All proposed contracts containing insurance requirements not 
prescribed in the FAR or this PAR;
    (f) In sealed bid procurements, all proposed awards to other than 
the lowest responsible and responsive bidder;
    (g) Rejections of all bids and cancellations of invitations for 
bids;
    (h) Proposed letter contracts;
    (i) Written protests, whether before or after award;
    (j) Unusual, novel, or unique proposed agreements, and unsolicited 
proposals that are to be negotiated pursuant to FAR subpart 15.5 and 
subpart 3515.5;
    (k) Proposed ADP contracts of $25,000 or more when purchase is to be 
from other than a Federal Supply Service contract source;
    (l) Termination actions, including pre-termination letters;
    (m) All actions taken under the Disputes clause, including final 
decisions;
    (n) Any action concerning suspension or debarment of an individual 
or concern;
    (o) Deviations from the FAR or PAR;
    (p) Any contract matter relating to litigation, disputes, or protest 
resolution before the courts of the United States or of the Republic of 
Panama, or before the Corps of Engineers Board of Contract Appeals or 
the Comptroller General of the United States;
    (q) Determinations of nonrespon si bility;
    (r) Any proposed contract modification, including proceed orders, 
which may result in a change in the contract price of more than $25,000, 
or any proposed contract modification or proceed order granting a time 
extension of more than 20 calendar days;
    (s) Any proposed contract modification resulting from either a 
contractor's settlement proposal under the Termination for Convenience 
clause, or a contractor's claim under the Suspension of Work clause, 
regardless of the contract value or the terms of the proposed 
modification;
    (t) Freedom of Information Act and Privacy Act matters involving 
contractors or arising under or in relation to any contract;
    (u) Administrative setoffs to recoup Government funds under any 
contract; and
    (v) Requests for approval of advance payments on contracts other 
than those excluded in FAR 32.404.

[[Page 159]]



3501.670-2  Documents to be submitted for legal review.

    The following documents are to be submitted in connection with 
contract actions requiring legal review pursuant to 3501.670-1:
    (a) For proposed construction contracts, a copy of the solicitation 
documents, excluding drawings, prior to the time they are furnished to 
prospective offerors, when feasible;
    (b) For all other proposed contracts and agreements, a copy of the 
document to be used in the solicitation and/or award, including any 
other documents, excluding drawings, which support the proposed 
procurement action, prior to the time they are mailed to the prospective 
offerors, when feasible;
    (c) For all other contract actions not specified in paragraph (a) or 
(b) of this subsection, a copy of the document itself and copies of all 
other documents, excluding drawings, relating to the action.



3501.670-3  General Counsel's legal review.

    (a) The General Counsel shall conduct a review of the legal 
sufficiency of the contract action. The General Counsel shall provide to 
the contracting officer a written determination of whether the proposed 
action is legally sufficient, or the details of any insufficiency and a 
recommended course of action to overcome the insufficiency. A 
contracting officer shall not take action which is contrary to a written 
and timely determination of legal insufficiency from the General 
Counsel.
    (b) The General Counsel shall complete the legal review as quickly 
as possible, with due regard to those procurement actions where 
circumstances dictate an unusually short period for completing the 
action.



PART 3502_DEFINITIONS OF WORDS AND TERMS--Table of Contents




    Authority: 40 U.S.C. 486(c); Article XI of the Agreement in 
Implementation of Article III of the Panama Canal Treaty of 1977.



                       Subpart 3502.1_Definitions



3502.101  Definitions.

    Administrator means the chief executive officer of the Panama Canal 
Commission. The Administrator, subject to the direction and under the 
supervision of the Board of Directors, exercises general and active 
control over the Commission's offices, business and operations, and 
general supervision over its officials, agents, attorneys, and 
employees. As contemplated at FAR 2.101, unless otherwise indicated, 
``Administrator'' also means the Commission's Deputy Administrator.
    Agency head means the Administrator of the Panama Canal Commission.
    Bureau Director means an official appointed by the Administrator to 
direct and manage one of the Commission's three operating bureaus.
    Commission means the Panama Canal Commission.
    Designated Agency Ethics Official means an individual appointed by 
the Administrator pursuant to the ``Ethics in Government Act of 1978'' 
to coordinate and manage the agency's ethics program and to act as the 
principal contact with the Office of Government Ethics.
    Designated contractors (sometimes referred to as ``special regime 
contractors'') means:
    (a)(1) Natural persons who are nationals or permanent residents of 
the United States, or
    (2) Corporations or other legal entities organized under the laws of 
the United States, any state thereof, or the District of Columbia, and 
which are under the effective control of such natural persons--
    (i) To whom contracts are awarded by the Panama Canal Commission for 
work to be performed in whole or in part in the Republic of Panama, and
    (ii) Who are so designated in writing by the Commission.
    (b) The term also includes subcontractors of designated contractors 
(1) who are nationals or permanent residents of the United States, or 
(2) which are corporations or other legal entities organized under the 
laws of the United States, any state thereof, or the District of 
Columbia, and which are

[[Page 160]]

under the effective control of United States nationals or permanent 
residents.
    Head of Independent Unit means an official appointed by the 
Administrator to direct and manage one of the Administrator's staff 
offices.
    Head of the Contracting Activity (HCA) means the General Services 
Director and the Engineering and Construction Director.
    Implementing Agreement means the Agreement in Implementation of 
Article III of the Panama Canal Treaty (TIAS 10031), signed at 
Washington, DC on September 7, 1977.
    Inspector General means the Office of the Inspector General.
    Procurement Executive means an individual designated as the senior 
procurement executive pursuant to 41 U.S.C. 414(3), by the Administrator 
from members of his staff. The Procurement Executive is delegated 
agency-wide responsibility to oversee development of procurement 
systems, establish procurement policy, evaluate procurement system 
performance in accordance with approved criteria, carry out specific 
responsibilities as assigned in this PAR, enhance career management of 
the procurement work force, and certify to the Administrator that 
procurement systems meet approved criteria.
    Treaty means the Panama Canal Treaty (TIAS 10030), signed at 
Washington, DC on September 7, 1977.

[55 FR 7638, Mar. 2, 1990]



PART 3503_IMPROPER BUSINESS PRACTICES AND PERSONAL CONFLICTS OF INTEREST
--Table of Contents




Sec.
3503.000 Scope of part.

                        Subpart 3503.1_Safeguards

3503.101 Standards of conduct.
3503.101-3 Agency regulations.
3503.103 Independent pricing.
3503.103-2 Evaluating the certification.

      Subpart 3503.2_Contractor Gratuities to Government Personnel

3503.203 Reporting suspected violations of the Gratuities clause.
3503.204 Treatment of violations.

        Subpart 3503.3_Reports of Suspected Antitrust Violations

3503.301 General.

                     Subpart 3503.4_Contingent Fees

3503.408 Evaluation of the SF 119.
3503.408-1 Responsibilities.
3503.409 Misrepresentations or violations of the Covenant Against 
          Contingent Fees.

            Subpart 3503.5_Other Improper Business Practices

3503.502 Subcontractor kickbacks.
3503.502-2 General.

  Subpart 3503.6_Contracts With Government Employees or Organizations 
                       Owned or Controlled by Them

3503.600-70 Scope of subpart.
3503.600-71 Definitions.
3503.601 Policy.
3503.602 Exceptions.
3503.603 Responsibilities of the contracting officer.
3503.670 Exclusions.

    Authority: 40 U.S.C. 486(c).

    Source: 55 FR 7638, Mar. 2, 1990, unless otherwise noted.



3503.000  Scope of part.

    This part implements FAR part 3, cites Commission regulations on 
employee responsibilities and conduct, establishes responsibility for 
reporting violations and related actions, and provides for authorization 
of exceptions to policy.



                        Subpart 3503.1_Safeguards



3503.101  Standards of conduct.



3503.101-3  Agency regulations.

    Commission regulations on Employee Responsibilities and Conduct are 
contained in the Commission's ``Employee Code of Conduct''. All 
personnel involved in acquisition actions shall become familiar with the 
statutory and regulatory prohibitions governing employee conduct. Any 
problems or questions concerning standards of conduct shall be referred 
to the Designated Agency Ethics Official.

[[Page 161]]



3503.103  Independent pricing.



3503.103-2  Evaluating the certification.

    (b)(3) Whenever an offer is rejected under FAR 3.103-2, or the 
Certificate of Independent Price Determination is suspected of being 
false, the contracting officer shall report the situation to the General 
Counsel through the cognizant Head of the Contracting Activity for 
referral to the Attorney General in accordance with FAR 3.303.



      Subpart 3503.2_Contractor Gratuities to Government Personnel



3503.203  Reporting suspected violations of the Gratuities clause.

    Any Commission employee who suspects that a violation of the 
Gratuities clause has occurred shall immediately report the suspected 
violation to the cognizant Head of the Contracting Activity. Upon being 
notified of the suspected violation, the HCA shall inform the Designated 
Agency Ethics Official and the Procurement Executive, by written 
memorandum, of the pertinent details of the suspected violation.



3503.204  Treatment of violations.

    (b) When the HCA determines that there is probable cause to believe 
that a violation of the Gratuities clause has been committed, the case 
shall be handled as provided in the Commission debarment and suspension 
procedures in subpart 3509.4.
    (c) The final decision as to which remedies the Commission may 
pursue if a violation of the Gratuities clause is found by the Debarment 
Committee (see 3509.406-3(b)), is reserved to the Administrator.



        Subpart 3503.3_Reports of Suspected Antitrust Violations



3503.301  General.

    (b) The contracting officer shall report any suspected violations of 
antitrust laws to the General Counsel through the cognizant Head of the 
Contracting Activity for referral to the Attorney General and the 
Commission's Debarment Committee in accordance with FAR subpart 3.3.



                     Subpart 3503.4_Contingent Fees



3503.408  Evaluation of the SF 119.



3503.408-1  Responsibilities.

    (b) The contracting officer's documentation of the evaluation of the 
Standard Form 119, Statement of Contingent or Other Fees, conclusions, 
and any proposed actions shall be reviewed by the cognizant Head of the 
Contracting Activity in coordination with the General Counsel.



3503.409  Misrepresentations or violations of the Covenant Against 
Contingent Fees.

    (a) Commission personnel who suspect or have evidence of attempted 
or actual exercise of improper influence, misrepresentations, or 
violations of the Covenant Against Contingent Fees shall report the 
matter promptly to the Designated Agency Ethics Official and the 
cognizant Head of the Contracting Activity.



            Subpart 3503.5_Other Improper Business Practices



3503.502  Subcontractor kickbacks.



3503.502-2  General.

    Any Commission employee who suspects that a violation of the Anti-
Kickback Act has occurred shall immediately report the suspected 
violation to the Designated Agency Ethics Official and the cognizant 
Head of the Contracting Activity. Suspected violations shall be treated 
in accordance with the debarment and suspension procedures at subpart 
3509.4.



  Subpart 3503.6_Contracts With Government Employees or Organizations 
                       Owned or Controlled by Them



3503.600-70  Scope of subpart.

    This subpart implements and supplements FAR subpart 3.6 and sets 
forth Commission policy and procedures for identifying and dealing with 
conflicts of interest and improper influence or

[[Page 162]]

favoritism in connection with contracts involving current or former 
Commission employees. This subpart does not apply to agreements with 
other departments or agencies of the Federal Government.



3503.600-71  Definitions.

    Commission employee means:
    (a) Any officer or employee of the Panama Canal Commission who is 
employed or appointed, with or without compensation, to serve more than 
130 days during any period of 365 consecutive days, or
    (b) Any officer or employee of the Commission who is retained, 
designated, appointed or employed to perform, with or without 
compensation, temporary duties either on a full-time or intermittent 
basis for not more than 130 days during any period of 365 consecutive 
days and who actually served more than 60 days during such 365-day 
period.



3503.601  Policy.

    Except as authorized at 3503.602 or excluded at 3503.670, no 
contract shall be awarded without competition to a--
    (a) Former Commission employee (or to a business concern or other 
organization owned or substantially owned or controlled by a former 
Commission employee) whose employment terminated within 365 calendar 
days before submission of an offer to the Commission; or
    (b) Prospective contractor which employs, or proposes to employ, a 
current Commission employee or a former Commission employee whose 
employment terminated within 365 calendar days before submission of an 
offer to the Commission, if either of the following conditions exist:
    (1) The current or former Commission employee is or was involved in 
developing or negotiating the offer for the prospective contractor.
    (2) The current or former Commission employee will be involved 
directly or indirectly in the management, administration, or performance 
of the contract.



3503.602  Exceptions.

    (a) The Director, Office of Executive Administration in his capacity 
as the Designated Agency Ethics Official may authorize an exception, in 
writing, to the policy in FAR 3.601 and 3503.601 for the reasons stated 
in FAR 3.602, if the exception would not involve a violation of 18 
U.S.C. 203, 18 U.S.C. 205, 18 U.S.C. 207, 18 U.S.C. 208, section 27 of 
the Office of Federal Procurement Policy Act, or Commission regulations 
in the ``Employee Code of Conduct''. The Director, Office of Executive 
Administration shall consult with the cognizant Bureau or Staff Director 
who originated the request and with the General Counsel before 
authorizing any exceptions.
    (b) This subpart does not apply to subcontracts, that is, agreements 
to undertake part of the work as an independent contractor. However, 
where subcontracts essentially create an ``employer-employee'' 
relationship between the Commission and the subcontractors, the subpart 
shall apply. In determining whether such a relationship exists, the 
contracting officer shall generally be guided by the standards of 
Chapter 304, Subchapter 1-4 of the ``Federal Personnel Manual'' in 
distinguishing between employees and independent contractors.



3503.603  Responsibilities of the contracting officer.

    Before awarding a contract, the contracting officer shall obtain an 
authorization under 3503.602 for any of the reasons stated in FAR 3.603.



3503.670  Exclusions.

    Former or current Commission employees who participated personally 
and substantially in the conduct of any Commission procurement of 
supplies or services, including those who were responsible for reviewing 
and approving the award, modification, or extension of any contract for 
such procurement, are excluded from the 365 calendar day ``before 
submission of an offer'' time period specified in 3503.601 (a) and (b). 
Instead, the time period for such employees shall be two years after the 
last date the employee participated personally and substantially in the 
conduct of any Commission procurement of supplies or services, or 
personally reviewed and approved the award, modification, or extension 
of any contract for such procurement. This two-year

[[Page 163]]

prohibition applies irrespective of whether the contract being sought is 
on a competitive or noncompetitive basis.



PART 3504_ADMINISTRATIVE MATTERS--Table of Contents




                    Subpart 3504.6_Contract Reporting

Sec.
3504.602 Federal Procurement Data System.
3504.903 Procedures.

    Authority: 40 U.S.C. 486(c).



                    Subpart 3504.6_Contract Reporting



3504.602  Federal Procurement Data System.

    (b) As indicated in the FPDS Reporting Manual, the Commission is 
exempt from the reporting requirements of the Federal Procurement Data 
System, except for the procurement data that is required to be provided 
in accordance with Public Law 96-39 (Trade Agreements Act of 1979) as 
prescribed by OFPP Policy Letter 80-8 (as amended).

[55 FR 7640, Mar. 2, 1990]



3504.903  Procedures.

    The Commission will report the information required under FAR 
4.902(b) directly to the IRS.

[55 FR 7640, Mar. 2, 1990]

[[Page 164]]



            SUBCHAPTER B_COMPETITION AND ACQUISITION PLANNING





PART 3505_PUBLICIZING CONTRACT ACTIONS--Table of Contents




Sec.
3505.000 Scope of part.

          Subpart 3505.2_Synopses of Proposed Contract Actions

3505.202 Exceptions.

                   Subpart 3505.5_Paid Advertisements

3505.502 Authority.
3505.503 Procedures.
3505.503-70 Authorization.

    Authority: 40 U.S.C. 486(c); Article IX of the Agreement in 
Implementation of Article III of the Panama Canal Treaty of 1977.

    Source: 55 FR 7640, Mar. 2, 1990, unless otherwise noted.



3505.000  Scope of part.

    This part implements FAR part 5 and provides Commission policies and 
procedures for publicizing contract opportunities, and provides for an 
additional exception to the requirements for use of ``Commerce Business 
Daily'' notices.



          Subpart 3505.2_Synopses of Proposed Contract Actions



3505.202  Exceptions.

    (a)(13) The contract action is one for which participation in the 
acquisition will be limited to sources in Panama pursuant to the 
conditions prescribed in 3570.102(e). The Procurement Executive will 
monitor and maintain a record of proposed contract actions that are 
exempt from the notice requirements of FAR 5.201 by operation of this 
exception.



                   Subpart 3505.5_Paid Advertisements



3505.502  Authority.

    (a) Newspapers. Authority to approve the publication of paid 
advertisements in newspapers is vested in the HCA or designee.



3505.503  Procedures.

    (a) General. When there is a reasonable probability that supplies or 
services (including construction) are available in Panama that are 
comparable in quality and price to those which may be obtained from 
other sources, and when local advertising is reasonably practical, the 
contracting officer shall request authorization from the HCA or designee 
to advertise the procurement action within the appropriate Panamanian 
market. The request for authorization shall include--
    (1) A description of the proposed procurement action and the 
supplies or services to be procured;
    (2) A description of how the determination was made that the 
Panamanian preference may apply; and
    (3) A summary of how the appropriate advertising market was 
identified.



3505.503-70  Authorization.

    The HCA or designee shall review the request for authorization of 
paid advertising and, if concurring, shall grant authorization in 
writing to the contracting officer to proceed. The written authorization 
shall specify any limitations on the advertising that are deemed 
appropriate. The HCA shall furnish a copy of each such authorization to 
the Procurement Executive.



PART 3506_COMPETITION REQUIREMENTS--Table of Contents




Sec.
3506.000 Scope of part.

           Subpart 3506.3_Other Than Full and Open Competition

3506.300 Scope of subpart.
3506.302-4 International agreement.
3506.303 Justifications.
3506.303-1 Requirements.
3506.303-2 Content.
3506.304 Approval of the justification.
3506.304-70 Class justifications.

                   Subpart 3506.5_Competition Advocate

3506.501 Requirement.


[[Page 165]]


    Authority: 40 U.S.C. 486(c); Article IX of the Agreement in 
Implementation of Article III of the Panama Canal Treaty of 1977.

    Source: 55 FR 7640, Mar. 2, 1990, unless otherwise noted.



3506.000  Scope of part.

    This part implements FAR part 6 and prescribes Commission policies 
and procedures related to competition requirements.



           Subpart 3506.3_Other Than Full and Open Competition



3506.300  Scope of subpart.

    This subpart provides guidance on:
    (a) The application of the Panama Canal Treaty of 1977 between the 
United States and Panama as an exemption to the requirement for full and 
open competition, and
    (b) The preparation and approval of individual and class 
Justifications for Other Than Full and Open Competition (JOFOC's).



3506.302-4  International agreement.

    (a) Authority. Article IX of the Agreement in Implementation of 
Article III of the Panama Canal Treaty of 1977 establishes that the 
Commission shall give preference to Panamanian supplies and services in 
its procurement activities. Such preference is understood to mean that 
if supplies or services (including construction) of comparable quality 
and price are available when required and can be obtained from sources 
both within and without the Republic of Panama, preference shall be 
afforded to those sources within the Republic of Panama to the maximum 
extent possible. When choosing between goods from sources within the 
Republic of Panama, preference shall be given to those with a larger 
percentage of components of Panamanian origin. This is not intended to 
require the purchase of Panamanian supplies and services, as defined 
herein, where superior quality or lower prices are available from other 
sources. Part 3570 sets forth specific guidance and policy with respect 
to the Commission's implementation of Article IX.
    (c) Limitations. Solicitations above the small purchase limitation 
that are intended for exclusive acquisition from sources in Panama shall 
be supported by a class or individual determination and findings as 
required by 3570.102(e).



3506.303  Justifications.



3506.303-1  Requirements.

    (c) The scope of the actual procurement shall not exceed the scope 
of the proposed procurement cited in the JOFOC. If a change to the 
contract exceeds this limitation, the contract change shall not be 
consummated until an amended JOFOC has been approved.
    (d) When contract actions are subject to the Agreement on Government 
Procurement and the authority of FAR 6.302-3(a)(2)(i) or 6.302-7 is 
being cited as the basis for not providing full and open competition, a 
copy of the justification shall be forwarded to the Procurement 
Executive as the point of contact with the Office of the United States 
Trade Representative.



3506.303-2  Content.

    In addition to the requirements of FAR 6.303-2, the justification 
shall include--
    (a) The type of contract;
    (b) A statement of delivery requirements;
    (c) The total estimated dollar value, including options, for the 
acquisitions covered by the justification; and
    (d) A copy of the approved Acquisition Plan when the acquisitions 
meet the criteria for a written Acquisition Plan under subpart 3507.1.



3506.304  Approval of the justification.

    (a) Except as noted at FAR 6.304(b), the approval of a justification 
for other than full and open competition shall be in writing and at the 
levels given below--
    (1) For a proposed contract not exceeding $100,000, the HCA is the 
approval authority. This approval is not required when the contract is 
one of those cited in FAR 6.304(a)(1) (i) through (iv).
    (2) For a proposed contract over $100,000, but not exceeding 
$1,000,000, the Competition Advocate is the approval authority.
    (3) For a proposed contract over $1,000,000, but not exceeding 
$5,000,000,

[[Page 166]]

the Procurement Executive is the approval authority.
    (4) For a proposed contract over $5,000,000, the Administrator is 
the approval authority.
    (b) Contracting officers shall consult with the Competition Advocate 
prior to submitting any justification for approval pursuant to paragraph 
(a) of this section.



3506.304-70  Class justifications.

    (a) Class justifications shall be approved in the same manner as 
individual justifications. To determine the approval level for a class 
justification, the aggregate estimated dollar value of all actions 
contemplated for one year shall be used to establish the appropriate 
dollar threshold for approval.
    (b) The following are examples of appropriate class justifications:
    (1) A basic ordering agreement (BOA) including all orders to be 
issued under the BOA for the term of the BOA;
    (2) Contracts to be awarded to more than one contractor to provide 
Government-furnished property for assembly into an end item, in which 
case the circumstances of the class justification must justify all the 
contracts proposed under the justification.
    (c) Requests for approval at any level must be submitted to the 
approval authority before release of the solicitation. The solicitation 
shall not be released until the justification is approved in writing 
(but see FAR 6.303-1(e)).
    (d) The Procurement Executive shall maintain a list of products, 
materials, and services that have been granted a class justification for 
exclusive acquisition from sources in Panama (see 3506.302-4(c)).



                   Subpart 3506.5_Competition Advocate



3506.501  Requirement.

    The Administrator shall designate in writing one Competition 
Advocate who shall serve as the agency and procuring activities 
competition advocate for all Commission acquisitions.



PART 3507_ACQUISITION PLANNING--Table of Contents




                    Subpart 3507.1_Acquisition Plans

Sec.
3507.103 Agency-head responsibilities.

         Subpart 3507.3_Contractor Versus Government Performance

3507.301 Policy.

    Authority: 40 U.S.C. 486(c).



                    Subpart 3507.1_Acquisition Plans



3507.103  Agency-head responsibilities.

    (c)(1) Formal acquisition planning provided at FAR subpart 7.1 is 
primarily designed for complex and costly acquisitions. However, the 
disciplines of the prescribed planning process are useful to all 
acquisitions, even if on a less formal basis.
    (2) Written acquisition plans shall be prepared for--
    (i) All development (see FAR 35.001) acquisitions whose estimated 
contractual cost is $1,000,000 or more annually;
    (ii) Supply, service, and construction acquisitions whose estimated 
contractual cost is $3,000,000 or more for any fiscal year. Excluded are 
repetitive requirements-type and fuel contracts.
    (d) The Acquisition Plan (AP) shall include all subsystems, 
Government-furnished property, major component contractual actions, and 
all other contracts which have a significant effect on the total 
program.
    (f) The planner for acquisitions requiring a formal, written plan 
shall be the program manager or other official having overall 
responsibility for the program concerned.
    (g)(1) The planner shall obtain the written concurrence of the 
appropriate contracting officer for each acquisition plan.
    (2) The Head of the Contracting Activity shall review and approve 
the acquisition plan and ensure that (i) the objectives of the AP are 
realistic and achievable, and (ii) solicitations and contracts are 
appropriately structured to equitably distribute the technical, 
financial, and business risks, considering the phase of the acquisition, 
the

[[Page 167]]

technical requirements, and business and legal constraints.
    (3) Acquisition plans shall be furnished by the cognizant HCA to the 
Procurement Executive.
    (j) When a need is urgent enough to require an unusually compressed 
delivery or performance schedule, and the preparation of a detailed 
written AP would interfere with the successful meeting of that schedule, 
the Procurement Executive may waive appropriate requirements of FAR 
subpart 7.1 and this subpart 3507.1. The waiver shall be in writing and 
shall specifically designate those requirements that are waived.

[55 FR 7641, Mar. 2, 1990]



         Subpart 3507.3_Contractor Versus Government Performance



3507.301  Policy.

    (a) For the purposes of OMB Circular No. A-76, a commercial source 
is defined as ``a business or other non-Federal activity located in the 
United States, its territories and possessions, the District of Columbia 
or the Commonwealth of Puerto Rico, which provides a commercial product 
or service.'' Accordingly, by virtue of the Commission's location in the 
Republic of Panama, FAR subpart 7.3 is not applicable to the Panama 
Canal Commission because commercial services would have to be contracted 
out to sources located in Panama. Commission policy regarding commercial 
services to be contracted out to sources in Panama is set forth in 
paragraph (b) of this section.
    (b) Commercial work and services shall be contracted out when there 
are available reliable local contractors and the expected cost is 
beneficial to the Commission. However, when commercial work/service to 
be done requires skills that the Commission should have and/or develop, 
then a careful evaluation shall be made before such work/service is 
contracted outside the agency. The cognizant Head of the Contracting 
Activity shall be the approving official for commercial work and 
services to be contracted out pursuant to this policy.

[55 FR 7641, Mar. 2, 1990]



PART 3508_REQUIRED SOURCES OF SUPPLIES AND SERVICES--Table of Contents




Sec.
3508.001 Priorities for use of Government supply sources.

          Subpart 3508.4_Ordering From Federal Supply Schedules

3508.404 Using schedules.
3508.404-1 Mandatory use.

    Authority: 40 U.S.C. 486(c); Article IX of the Agreement in 
Implementation of Article III of the Panama Canal Treaty of 1977.

    Source: 55 FR 7642, Mar. 2, 1990, unless otherwise noted.



3508.001  Priorities for use of Government supply sources.

    (a) Under Article IX of the Agreement in Implementation of Article 
III of the Panama Canal Treaty of 1977, the Panama Canal Commission is 
required under certain conditions to give preference, to the maximum 
extent possible, to procuring supplies and services obtainable in Panama 
(see 3506.302-4(a), subpart 3525.8, and part 3570). Therefore, when 
supplies or services are to be procured from sources in Panama under the 
preference requirement of Article IX, the mandatory use of sources for a 
like item of supply or service, as required by FAR part 8, shall not be 
applicable.



          Subpart 3508.4_Ordering From Federal Supply Schedules



3508.404  Using schedules.



3508.404-1  Mandatory use.

    When supplies or services are procured from sources in Panama under 
the preference requirement of Article IX, as stated in 3508.001(a), the 
mandatory use of a Federal Supply Schedule for a like item of supply or 
service shall not be applicable. When a procurement is not made under 
the Panamanian preference of Article IX, and delivery or performance is 
to be made in Panama, the mandatory supply schedule should be carefully 
evaluated for the following exceptions to mandatory use:
    (d) Geographic coverage. Each Federal Supply Schedule delineates the 
specific

[[Page 168]]

geographic area for which it is mandatory for use. The geographic area 
applies to the location where final delivery of the supplies is to be 
made, or the service to be performed, and not to the location of the 
ordering office. In most cases, the Republic of Panama will not be 
within the geographic limitations of the schedule and mandatory use will 
not be applicable. The mandatory use provisions of FAR 8.4 and 41 CFR 
101-26.4 are applicable to Commission offices located in the United 
States when ordering supplies or services to be delivered or performed 
in the United States for their own use.
    (e) Lower prices for identical items. The Commission may purchase 
products from any source pursuant to the conditions set forth in FAR 
8.404-1(e).



PART 3509_CONTRACTOR QUALIFICATIONS--Table of Contents




Sec.
3509.000 Scope of part.

           Subpart 3509.1_Responsible Prospective Contractors

3509.104-3 Application of standards.
3509.106 Preaward surveys.
3509.106-70 Professional type services preaward surveys.

                Subpart 3509.2_Qualification Requirements

3509.202 Policy.
3509.206 Acquisitions subject to qualification requirements.
3509.206-1 General.

         Subpart 3509.4_Debarment, Suspension and Ineligibility

3509.400 Scope of subpart.
3509.403 Definitions.
3509.404 List of parties excluded from Federal procurement and 
          nonprocurement programs.
3509.405 Effect of listing.
3509.405-1 Continuation of current contracts.
3509.405-2 Restrictions on subcontracting.
3509.406 Debarment.
3509.406-1 General.
3509.406-2 Causes for debarment.
3509.406-3 Procedures.
3509.406-70 Settlement.
3509.406-71 Voluntary exclusion.
3509.407 Suspension.
3509.407-2 Causes for suspension.
3509.407-3 Procedures.
3509.407-70 Settlement.
3509.407-71 Voluntary exclusion.
3509.470 Special notice.
3509.471 Equal application.

           Subpart 3509.5_Organizational Conflicts of Interest

3509.500 Scope of subpart.
3509.502 Applicability.
3509.503 Waiver.
3509.504 Contracting officer responsibilities.
3509.506 Information sources.
3509.507 Procedures.
3509.508 Solicitation provision and contract clause.
3509.508-1 Solicitation provision.
3509.508-2 Contract clause.

    Authority: 40 U.S.C. 486(c).

    Source: 55 FR 7642, Mar. 2, 1990, unless otherwise noted.



3509.000  Scope of part.

    This part implements FAR part 9 and provides Commission policy and 
procedures pertaining to: contractor's responsibility; debarment, 
suspension, and ineligibility; qualified products; and organizational 
conflicts of interest.



           Subpart 3509.1_Responsible Prospective Contractors



3509.104-3  Application of standards.

    (c) Satisfactory performance record. If the contracting officer 
invokes the presumption of nonresponsibility required by FAR 9.104-3(c), 
the contracting officer shall give notice, together with the reasons for 
invoking the presumption, to the Procurement Executive.



3509.106  Preaward surveys.



3509.106-70  Professional type services preaward surveys.

    (a) Generally, preaward surveys are not performed for acquisition of 
professional type services such as those provided by medical doctors, 
lawyers or other licensed and/or regulated professions.
    (b) To assist in making a determination of responsibility for 
professional type services, the types of information listed below shall 
be obtained from the offeror when applicable:
    (1) Organizational structure and plan contemplated to accomplish the 
service;

[[Page 169]]

    (2) Summary of experience in performing the same or similar service;
    (3) Resumes of key personnel with particular emphasis on academic 
accomplishments pertinent to the service to be performed;
    (4) Evidence of professional liability insurance, or evidence such 
insurance can be obtained;
    (5) Membership in professional organizations;
    (6) Information on pertinent state and local licenses; and
    (7) Information on the firm or key individuals that reflect their 
status or professional recognition in their field of endeavor, such as 
awards and published articles in professional journals or magazines.
    (c) When the statement of work includes a review of credentials by 
the requiring activity, this review should be considered a part of the 
preaward survey, and other information requested from the offeror should 
be minimized.



                Subpart 3509.2_Qualification Requirements



3509.202  Policy.

    (a)(1) The contracting officer shall ensure that the written 
justification required by FAR 9.202(a)(1) is prepared prior to 
establishing a requirement for testing or other quality assurance 
demonstration that must be completed by an offeror before the offeror is 
awarded a contract.



3509.206  Acquisitions subject to qualification requirements.



3509.206-1  General.

    (b) The contracting officer is designated to make the determination 
required by FAR 9.206-1(b).



         Subpart 3509.4_Debarment, Suspension and Ineligibility

    Source: 61 FR 3846, Feb. 2, 1996, unless otherwise noted.



3509.400  Scope of subpart.

    This subpart supplements, and shall be applied in conformity with, 
FAR subpart 9.4.



3509.403  Definitions.

    Debarring official means the Administrator of the Panama Canal 
Commission (hereinafter ``Commission''). In the event the Administrator 
is ineligible from participating personally in Commission actions with 
respect to the particular contractor, named individual or affiliate 
subject to the proposed debarment due to a conflict of interest or in 
view of a previously established recusal statement, the Commission 
Deputy Administrator shall be the debarring official.
    Fact-finding official means a person not employed by the Commission 
or any agency of the U.S. Government retained at Commission expense to 
conduct fact-finding under this subpart. The individual must have no 
prior knowledge of the particular subject matter and no conflict of 
interest with respect to any of the parties involved in the debarment or 
suspension action. He shall have knowledge of the laws and regulations 
governing the federal procurement system, and shall have experience in 
receiving evidence and formulating findings of fact.
    Suspending official means the Commission Administrator. In the event 
the Administrator is ineligible from participating personally in 
Commission actions with respect to the particular contractor, named 
individual or affiliate subject to the proposed suspension due to a 
conflict of interest or in view of a previously established recusal 
statement, the Commission Deputy Administrator shall be the suspending 
official.



3509.404  List of parties excluded from Federal procurement and 
nonprocurement programs.

    (c) The Commission Procurement Executive (hereinafter ``PE'') shall 
perform the actions required by FAR 9.404(c).



3509.405  Effect of listing.

    The PE is the designee of the agency head for the purposes of FAR 
9.405(a) and (d)(2) and (3) and may, upon the written recommendation of 
the pertinent Head of the Contracting Activity (hereinafter ``HCA''), 
make the determinations referenced therein.

[[Page 170]]



3509.405-1  Continuation of current contracts.

    The PE is the designee of the agency head for the purposes of FAR 
9.405-1(a) and (c) and may, upon the written recommendation of the 
pertinent HCA, take the actions referenced therein.



3509.405-2  Restrictions on subcontracting.

    (a) The PE is the designee of the agency head for the purposes of 
FAR 9.405-2(a) and may, upon the written recommendation of the pertinent 
HCA, take the action referenced therein.



3509.406  Debarment.



3509.406-1  General.

    (c) The PE is the designee of the agency head for the purposes of 
FAR 9.406-1(c) and may, upon the written recommendation of the pertinent 
HCA, take the action referenced therein.



3509.406-2  Causes for debarment.

    In addition to the causes listed in FAR 9.406-2, the use of a Panama 
Canal Commission employee or a member of the Commission's Board of 
Directors as an agent or advocate for a Commission contractor, or 
prospective contractor, shall be a cause for debarment.



3509.406-3  Procedures.

    (a) Investigation and referral.
    (1)(i) Any Commission official or employee who suspects or has 
knowledge of any conduct, statement, act, or omission of, or 
attributable to, a Commission contractor or a potential Commission 
contractor which could justify debarment under FAR subpart 9.4 or this 
subpart shall immediately report this information to the Commission 
General Counsel (hereinafter ``GC'') or to the appropriate contracting 
officer.
    (ii) Any Commission official or employee who suspects or has 
knowledge that a debarred individual or company has reestablished itself 
under a new name shall immediately report this information to the GC or 
to the appropriate contracting officer.
    (2) When the GC receives such information he shall refer the matter 
to the appropriate contracting officer for investigation and shall 
notify the PE and the pertinent HCA. When the contracting officer 
receives such information he shall notify the PE and the pertinent HCA.
    (3) The contracting officer shall, in coordination with the 
pertinent HCA, promptly investigate the matter, assemble all relevant 
information and prepare a written report containing all available 
evidentiary material, including copies of indictments and conviction 
notices when applicable, and the names of the owners and officers, as 
well as any affiliates, of the contractor in question. The written 
report shall include a recommendation whether a debarment action should 
be commenced and, if so, shall identify the causes for debarment, see 
FAR 9.406-2 and 3509.406-2 of this subpart, and identify each company 
and individual, including divisions of companies and affiliates, which 
the contracting officer recommends should be specifically named in the 
action.
    (4) The contracting officer shall submit his report to the pertinent 
HCA and a copy thereof to the PE and the GC. The HCA shall study the 
report and promptly advise the PE, in writing, whether or not he concurs 
in the contracting officer's recommendation and shall explain the 
reasons for his concurrence or nonconcurrence.
    (5) The PE shall study the contracting officer's report and the 
recommendation of the HCA. If the HCA and the PE agree that a debarment 
action should not be commenced, the PE shall so inform the debarring 
official and shall prepare a memorandum for record describing and 
closing the matter. If, however, either the HCA or the PE recommend that 
a debarment action should be commenced, the PE shall forward the 
contracting officer's report to the debarring official, together with 
the recommendation of the HCA as well as the PE's own written 
recommendation.
    (b) Decisionmaking process.
    (1) If the debarring official, after reviewing the contracting 
officer's report and the recommendations of the HCA and the PE, 
considering fully the provisions of FAR 9.402 and 9.406-1(a), and 
consulting with the GC, determines there is a reasonable basis to 
commence a debarment action, the debarring official shall instruct the 
PE to

[[Page 171]]

sign and send to each specifically named company, individual or 
affiliate to which the action is to apply, via certified mail, return 
receipt requested, either:
    (i) An informal notice of the Commission's intention to propose 
debarment, see 3509.406-3(b)(2) of this subpart; or
    (ii) A formal notice of the Commission's proposal to debar under FAR 
9.406-3(c).
    (2) An informal notice of the Commission's intention to propose 
debarment shall advise the addressee, in writing, of the following:
    (i) The issuance under FAR 9.406-3(c) of a formal notice of proposal 
to debar the addressee is seriously being considered by the Commission;
    (ii) The basic factual reasons for the contemplated debarment;
    (iii) The causes relied upon under FAR 9.406-2 and 3509.406-2 of 
this subpart;
    (iv) The Commission's procedures governing the debarment process;
    (v) The addressee's right to reply to the PE in writing within 21 
calendar days of receipt of the informal notice, and show cause why the 
Commission should not issue, to the addressee, a formal notice of 
proposal to debar under FAR 9.406-3(c) for the reasons and causes cited 
by the Commission;
    (vi) That, if the PE does not receive a reply from the addressee to 
the informal notice within 21 calendar days of the addressee's receipt 
of the informal notice, the Commission will issue to the addressee a 
formal notice of proposal to debar;
    (vii) The effect of the issuance of a formal notice of proposal to 
debar;
    (viii) The potential effect of an actual debarment; and
    (ix) That, while the Commission will carefully consider the content 
of a timely reply to the informal notice, the Commission reserves the 
right to issue a formal notice of proposal to debar without additional 
discussion or correspondence.
    (3) The PE shall study the timely reply of an addressee to an 
informal notice and shall forward the reply to the GC and the debarring 
official with the PE's evaluation and recommendation.
    (4) If, after reviewing a timely reply to an informal notice, as 
well as the views of the PE and the GC, the debarring official 
determines, considering fully the provisions of FAR 9.402 and 9.406-
1(a), that a formal debarment action should commence, the debarring 
official shall instruct the PE to sign and send a formal notice of 
proposal to debar to the addressee.
    (c) Notice of proposal to debar. In addition to the matters listed 
at FAR 9.406-3(c), a formal notice of proposal to debar shall advise the 
contractor and any specifically named individual or affiliate of the 
specific, fundamental allegations of material fact supporting the 
proposed debarment.
    (d) Debarring official's decision.
    (1) A submission in opposition to the Commission's formal notice of 
proposal to debar presented by a contractor, or any named individual or 
affiliate, shall include information and argument in opposition to the 
proposed debarment, including any additional specific information or 
documents that raise a genuine dispute over material facts. The 
submission shall be addressed to the PE.
    (2) If a timely submission in opposition to a formal notice of 
proposal to debar is not presented by a named contractor, individual or 
affiliate to whom a formal notice was sent, the PE shall, with respect 
only to each such contractor, individual or affiliate that failed to 
present a timely submission, study all the information in the 
administrative record and shall forward the entire record to the 
debarring official with an evaluation and recommendation whether to 
debar the nonresponding contractor, individual or affiliate and, if so, 
for what period of time.
    (3) If a timely submission in opposition to a formal notice of 
proposal to debar is submitted in actions based upon a conviction or 
civil judgment, the PE shall evaluate all the information in the 
administrative record, including the submission in opposition, and shall 
forward these materials to the debarring official with a recommendation 
whether to debar and, if so, for what period of time.
    (4)(i) If a timely submission in opposition to a formal notice of 
proposal to

[[Page 172]]

debar is presented in actions not based upon a conviction or civil 
judgment, the PE shall evaluate the formal notice of proposal to debar 
and the submission in opposition and shall determine, with the advice of 
the GC, if the submission raises a genuine dispute over any facts 
material to the proposed debarment. If it does not, the PE shall forward 
the entire administrative record, including the submission in 
opposition, to the debarring official with an evaluation and a 
recommendation whether to debar and, if so, for what period of time.
    (ii) If, however, the PE determines, in consultation with the GC, 
that a timely submission in opposition to a formal notice of proposal to 
debar in actions not based upon a conviction or civil judgment raises a 
genuine dispute over any fact material to the proposed debarment, the PE 
shall so advise the contractor, named individual or affiliate, and shall 
inquire whether a fact-finding hearing is desired. If a fact-finding 
hearing is not requested by the contractor, named individual or 
affiliate, the PE shall forward the entire administrative record, 
including the submission in opposition, to the debarring official with 
an evaluation and a recommendation whether to debar and, if so, for what 
period of time.
    (iii) If a fact-finding hearing is requested, the PE shall appoint a 
fact-finding official to whom all matters involving disputed material 
facts shall be referred. The PE will provide the fact-finding official 
with a copy of the entire administrative record including the submission 
in opposition. The fact-finding official shall study the Commission's 
notice(s) of proposal to debar and the submission(s) in opposition, and 
shall identify specifically the material facts in genuine dispute and so 
advise the pertinent contractor, named individual or affiliate, as well 
as the Commission's designated advocate in the Office of General 
Counsel. A fact-finding hearing shall be scheduled and conducted by the 
fact-finding official, and shall take place in a Commission facility in 
Panama unless the fact-finding official determines that fundamental 
fairness compels the use of another location. The rules governing the 
fact-finding hearing shall be established by the fact-finding official 
but shall conform fully with FAR 9.406-3(b)(2) and (d)(2) and (3).
    (5) The fact-finding official shall present written findings of fact 
and the transcribed record of the hearing, if made, to the debarring 
official within 21 calendar days from his receipt of the transcript or 
from the final day of the hearing if no transcript is ordered. The 
findings shall resolve each material fact previously determined to be in 
genuine dispute based on a preponderance of the evidence presented.
    (6) Upon receiving the complete administrative record and the 
evaluation and recommendation of the PE or, if there was a fact-finding 
hearing, upon receiving the hearing record and the findings of fact of 
the fact-finding official and the evaluation and recommendation of the 
PE, the debarring official shall, considering fully the provisions of 
FAR 9.402 and 9.406-1(a), make a final decision whether to impose 
debarment. If debarment is chosen, the debarring official shall also 
determine the period of debarment.
    (e) Notice of debarring official's decision. The debarring official 
shall promptly notify the contractor and any named individual or 
affiliate of the final decision in writing by certified mail, return 
receipt requested.



3509.406-70  Settlement.

    (a) At any time prior to the debarring official's issuance of a 
final decision whether to debar, the debarring official may, in the best 
interests of the U.S. Government, forgo or withdraw a proposed debarment 
by entering into a written agreement with the contractor, named 
individual or affiliate, in which the contractor, individual or 
affiliate agrees to perform, accomplish or implement such remedial 
measures or mitigating factors as are listed at FAR 9.406-1(a). The 
contractor, individual or affiliate shall also agree that its failure to 
observe any term or condition of the agreement shall constitute 
sufficient cause for the immediate imposition of debarment by the 
debarring official without entitlement to a fact-finding hearing.
    (b) The debarring official shall not enter into a settlement 
agreement if the proposed debarment is based on a

[[Page 173]]

conviction of or civil judgment for any of the causes in FAR 9.406-2(a).



3509.406-71  Voluntary exclusion.

    (a)(1) At any time prior to the debarring official's issuance of a 
final decision whether to debar, the debarring official may, in the best 
interests of the U.S. Government, forgo or withdraw a proposed debarment 
by entering into a written agreement with the contractor, named 
individual or affiliate, in which the contractor, individual or 
affiliate agrees to voluntarily refrain, for a specified period of time, 
from attempting to obtain, and from entering into, any contract, 
purchase agreement or other form of contractual relationship, regardless 
of dollar amount, with, as the debarring official may determine, either: 
(i) the Commission; or (ii) the Commission and one or more, or all, 
other agencies, departments or entities of the U.S. Government.
    (2) A voluntary exclusion will not be reported to the GSA nor appear 
in the ``List of Parties Excluded from Federal Procurement and 
Nonprocurement Programs,'' and if the contractor, individual or 
affiliate is currently listed due to a Commission notice of proposal to 
debar the PE will advise the GSA of the voluntary exclusion and request 
the immediate cessation of the listing. The contractor, individual or 
affiliate shall agree that its failure to observe any term or condition 
of the voluntary exclusion shall constitute sufficient cause for the 
immediate imposition of debarment by the debarring official without 
entitlement to a fact-finding hearing.
    (b) The debarring official shall not enter into a voluntary 
exclusion agreement if the proposed debarment is based on a conviction 
of or civil judgment for any of the causes in FAR 9.406-2(a).



3509.407  Suspension.



3509.407-2  Causes for suspension.

    In addition to the causes listed in FAR 9.407-2, the cause for 
debarment identified in 48 CFR (PAR) 3509.406-2 also applies to 
suspension actions.



3509.407-3  Procedures.

    (a) The procedures set forth in 48 CFR (PAR) 3509.406-3 for 
debarment also apply, insofar as they are compatible with the procedures 
set forth in FAR 9.407-3, to suspension actions except those procedures 
identified in paragraph (b) of this subsection.
    (b) The following procedures in 48 CFR (PAR) 3509.406-3 do not apply 
to suspension actions: 3509.406-3(b)(1)(i), 3509.406-3(b) (2) through 
(4) and 3509.406-3(c).
    (c) Notice of suspension. In addition to the matters listed at FAR 
9.407-3(c), in actions not based on an indictment, a notice of 
suspension shall advise the contractor and any specifically named 
individual or affiliate of the specific, fundamental allegations of 
material fact supporting the suspension.



3509.407-70  Settlement.

    Where a suspension is being considered, the suspending official may 
enter into a settlement agreement in the same manner and under the same 
terms as are provided in 48 CFR (PAR) 3509.406-70.



3509.407-71  Voluntary exclusion.

    Where a suspension is being considered, the suspending official may 
enter into a voluntary exclusion agreement in the same manner and under 
the same terms as are provided in 48 CFR (PAR) 3509.406-71.



3509.470  Special notice.

    The Commander in Chief, United States Southern Command, shall be 
notified by the Procurement Executive of the issuance of any Commission 
notice of proposal to debar and of any debarment or suspension decision 
made by the debarring or suspending official.



3509.471  Equal application.

    These procedures for debarment and suspension apply equally to all 
firms, individuals and affiliates doing business with the Panama Canal 
Commission regardless of their nationality, residence or location.

[[Page 174]]



           Subpart 3509.5_Organizational Conflicts of Interest



3509.500  Scope of subpart.

    This subpart establishes Commission policy and procedures for 
identifying, evaluating, and resolving organizational conflicts of 
interest. It is the Commission's policy to avoid, neutralize, or 
mitigate organizational conflicts of interest. If the Commission is 
unable to neutralize or mitigate the effects of a potential conflict of 
interest, it will disqualify the prospective contractor or will 
terminate the contract when potential or actual conflicts are identified 
after award.



3509.502  Applicability.

    This subpart applies to all Commission contracts except agreements 
with other Federal agencies.



3509.503  Waiver.

    The Commission's General Counsel is designated as the authority to 
waive any general rule or procedure of this subpart by determining that 
its application in a particular situation would not be in the 
Commission's interest. Any request for waiver must be in accordance with 
FAR 9.503.



3509.504  Contracting officer responsibilities.

    (a) Contracting officers will be responsible for determining the 
existence of actual and potential organizational conflicts of interest 
which would result from the award of the contract. The contracting 
officer will be guided by information submitted by offerors and by the 
contracting officer's own judgment. The contracting officer may obtain 
the advice of legal counsel and the assistance of technical specialists 
in evaluating potential organizational conflicts.
    (b) If it is determined that organizational conflicts of interest 
will be created by the award of the contract, the contracting officer 
may find an offeror nonresponsible.
    (c) Notwithstanding the existence of organizational conflicts of 
interest, it may be determined that the award of the contract would be 
in the best interest of the Commission. In that case, the contracting 
officer may, with the approval of the cognizant Head of the Contracting 
Activity, set terms and conditions which will reduce the organizational 
conflicts of interest to the greatest extent possible.
    (d) The contracting officer shall, in addition to any certifications 
required by this subpart, require in all solicitations for consulting 
services that the offeror submit as part of an offer a statement which 
discloses all relevant facts relating to existing or potential 
organizational conflicts of interest surrounding the contract, including 
disclosure of such conflicts of interest with respect to proposed 
subcontractors.



3509.506  Information sources.

    (a) Disclosure. At the request of the contracting officer, 
prospective Commission contractors responding to solicitations or 
submitting unsolicited proposals shall provide information to the 
contracting officer for use in identifying, evaluating, or resolving 
potential organizational conflicts of interest. The submittal may be a 
certification or a disclosure, pursuant to paragraphs (a)(1) or (2) of 
this section.
    (1) If the prospective contractor is not aware of any information 
bearing on the existence of any organizational conflict of interest, the 
contractor shall so certify.
    (2) Prospective contractors not certifying in accordance with 
paragraph (a)(1) of this section must provide a disclosure statement 
which describes concisely all relevant facts concerning any past, 
present, or planned interests relating to the work to be performed and 
bearing on whether they, including their chief executives, directors, or 
any proposed consultant or subcontractor, may have a potential 
organizational conflict of interest.
    (b) Failure to disclose information. Any prospective contractor 
failing to provide full disclosure, certification, or other required 
information will not be eligible for award. Nondisclosure or 
misrepresentation of any relevant information may also result in 
disqualification from award, termination of the contract for default, or 
debarment from Government contracts, as well as other legal action or 
prosecution. In response to solicitations requesting the

[[Page 175]]

information in paragraph (a) of this section, the Commission will 
consider any inadvertent failure to provide disclosure certification as 
a ``minor informality'' (as explained in FAR 14.405); however, the 
prospective contractor must correct the omission promptly.
    (c) Exception. When the contractor has previously submitted a 
conflict of interest certification or disclosure for a contract, only an 
update of such statement is required when the contract is modified.



3509.507  Procedures.

    (a) The contracting officer shall document in writing the resolution 
of any potential or actual conflicts of interest identified. This 
documentation shall be reviewed and approved by the General Counsel 
prior to award. If the organizational conflict of interest cannot be 
resolved, the contracting officer shall disqualify the prospective 
contractor from receiving the contract award.
    (b) The General Counsel shall review and make the final decision 
required at FAR 9.507(c)(4) on any contractor request for higher review 
of the contracting officer's decision.



3509.508  Solicitation provision and contract clause.



3509.508-1  Solicitation provision.

    The contracting officer shall insert the provision at 3552.209-70, 
Organizational Conflict of Interest Certification/Disclosure in 
solicitations that in the contracting officer's judgment may be 
susceptible to organizational conflicts of interest.



3509.508-2  Contract clause.

    The contracting officer shall insert the clause at 3552.209-71, 
Organizational Conflict of Interest, in solicitations and contracts that 
will include the provision at 3552.209-70, Organizational Conflict of 
Interest Certification/Disclosure.



PART 3510_SPECIFICATIONS, STANDARDS, AND OTHER PURCHASE DESCRIPTIONS
--Table of Contents




Sec.
3510.001 Definitions.
3510.004 Selecting specifications or descriptions for use.
3510.004-70 Brand name or equal purchase descriptions.
3510.007 Deviations.
3510.011 Solicitation provisions and contract clauses.

    Authority: 40 U.S.C. 486(c).

    Source: 55 FR 7644, Mar. 2, 1990, unless otherwise noted.



3510.001  Definitions.

    Salient characteristics mean those particular characteristics that 
specifically describe the essential physical and/or functional features 
of a brand name product. They are those essential physical and/or 
functional features which are identified in the specifications as a 
mandatory requirement which a proposed ``equal'' product must possess in 
order for the product to be considered responsive. The term excludes 
those physical and/or functional features of a brand name product that:
    (a) Are not essential to the needs of the Commission, or
    (b) Do not affect the suitability of the product for its intended 
use.



3510.004  Selecting specifications or descriptions for use.



3510.004-70  Brand name or equal purchase descriptions.

    (a) Purchase descriptions which contain references to one or more 
brand name products followed by the words ``or equal'' may be used only 
under the conditions indicated in FAR 10.004(b) (2) and (3) and shall be 
in accordance with this subsection. The office initiating the ``brand 
name or equal'' purchase request is responsible for documenting to the 
contracting officer's satisfaction that the conditions for its use are 
valid. Where feasible, all known acceptable brand name products should 
be referenced.
    (b) The words ``or equal'' should not be added when the contracting 
officer has determined, with the concurrence of the General Counsel and 
the signed approval of the cognizant HCA, that only a particular product 
meets the essential requirements of the Commission.
    (c) Brand name or equal purchase descriptions shall include, in 
addition to those characteristics set forth in FAR

[[Page 176]]

10.004(b)(1) to the extent they are applicable, the following type of 
information to clearly identify the specific item named by brand(s) and 
its salient characteristics:
    (1) Complete common generic identification of the item required;
    (2) Applicable model, make, or catalog number for each brand name 
product referenced, and identity, if applicable, of the commercial 
catalog in which it appears;
    (3) Name of manufacturer, producer, or distributor of each brand 
name product reference (and address if company is not well known); and
    (4) All salient characteristics of the brand name product or 
products which have been determined by the initiating office, with the 
concurrence of the contracting officer, to be essential to meet the 
Commission's minimum physical and/or functional requirements. The 
purchase description shall state or otherwise indicate that the salient 
characteristics are mandatory features which proposed equal products 
must possess in order to be considered responsive.
    (d) Except as provided in paragraph (e) of this subsection, when a 
brand name or equal purchase description is included in a solicitation, 
the following shall be inserted after each item so described in the 
solicitation schedule for completion by the offeror:

To be completed by offeror:
Manufacturer's Name:____________________________________________________
Manufacturer's Address:_________________________________________________
Brand Name of Product (if any):_________________________________________
    Note: Offerors are cautioned and advised to read provision 3552.210-
70, Brand Name Products or Equal, located elsewhere in this 
solicitation, prior to completing the above. As indicated therein, 
offerors proposing to furnish an ``equal'' product must furnish all 
descriptive material necessary to determine the acceptability of such 
product.

    (e) Where component parts of an end item are described in the 
solicitation by a brand name or equal purchase description and the 
contracting officer determines that application of the provision at 
3552.210-70 to such component parts would be impracticable, the 
requirements of paragraph (d) of this subsection and 3510.011(h) shall 
not apply with respect to such component parts. However, if the 
provision is included in the solicitation for other reasons, there shall 
also be included in the solicitation a statement to identify either the 
component parts (described by brand name or equal purchase descriptions) 
to which the provision applies or those to which it does not apply. 
Depending upon whether the former or latter alternative is used, the 
statement should be substantially as follows:

    The provision 3552.210-70, Brand Name Products or Equal, located 
elsewhere in this solicitation, applies to the following component 
parts: (List the component parts to which the provision applies.)

    or

    The provision 3552.210-70, Brand Name Products or Equal, located 
elsewhere in this solicitation, does not apply to the following 
component parts: (List the component parts to which the provision does 
not apply.)


This paragraph (e) also applies to accessories related to an end item 
where a brand name or equal purchase description of the accessories is a 
part of the description of the end item.
    (f) When considered appropriate by the contracting officer, 
solicitations incorporating brand name or equal purchase descriptions 
may require the submission of offer samples in the case of offerors 
proposing to furnish ``equal'' products; such samples shall not be 
required from offerors who offer brand name products referenced in 
purchase descriptions.
    (g) Offers proposing to furnish products other than those 
specifically referenced by brand name shall be considered for award when 
the contracting officer determines under provision 3552.210-70 that the 
offered products meet the salient characteristics identified in the 
purchase description. Offers shall not be rejected as nonresponsive for 
failure of the product to equal a characteristic of a brand name product 
if such characteristic was not specified as a salient characteristic in 
the brand name or equal purchase description. However, if it is clearly 
established that the unspecified characteristic is essential to the 
intended use, the solicitation is defective and no award shall be made. 
In such cases, the contracting officer should resolicit the 
requirements, using a purchase description that sets forth all salient 
characteristics.
    (h) The brand name or equal policies and procedures in this 
subsection may

[[Page 177]]

be used in small purchase acquisitions to the extent that they are 
applicable and practicable.
    (i) This subsection is not applicable to construction contracts 
since the use of equal equipment, materials, articles, or processes are 
covered by FAR clause 52.236-5, Material and Workmanship.



3510.007  Deviations.

    Heads of Contracting Activities are designated to authorize the 
deviations permitted under FAR 10.007 and are responsible for ensuring 
that the actions required by FAR 10.007 are accomplished.



3510.011  Solicitation provisions and contract clauses.

    (h) The contracting officer shall insert the provision at 3552.210-
70, Brand Name Products or Equal, in solicitations that call for the 
delivery of a brand name or equal product, selecting the language that 
is appropriate for (1) invitation for bids, or (2) requests for 
proposals, as parenthetically indicated in the provision. (However, see 
3510.004-70(e) regarding the applicability of the provision to component 
parts of an end item and to accessories related to an end item.)

[[Page 178]]



           SUBCHAPTER C_CONTRACTING METHODS AND CONTRACT TYPES





PART 3513_SMALL PURCHASE AND OTHER SIMPLIFIED PURCHASE PROCEDURES
--Table of Contents




Sec.
3513.000 Scope of part.

                         Subpart 3513.1_General

3513.105 Small business-small purchase set-asides.
3513.107 Solicitation and evaluation of quotations.

               Subpart 3513.2_Blanket Purchase Agreements

3513.201 General.
3513.203 Establishment of Blanket Purchase Agreements.
3513.203-1 General.
3513.204 Purchases under Blanket Purchase Agreements.

                     Subpart 3513.5_Purchase Orders

3513.505 Purchase order and related forms.
3513.505-2 Agency order forms in lieu of Optional Forms 347 and 348.
3513.505-70 Purchase requisition.
3513.505-71 Division Purchase Order.

    Authority: 40 U.S.C. 486(c).

    Source: 54 FR 7645, Mar. 2, 1990, unless otherwise noted.



3513.000  Scope of part.

    This part implements and supplements FAR part 13 and provides 
Commission policies and procedures relating to small business-small 
purchase set-asides, blanket purchase agreements, and purchase order 
forms.



                         Subpart 3513.1_General



3513.105  Small business-small purchase set-asides.

    (a) The requirements of Public Law 95-507 relating to setting aside 
acquisitions of supplies or services with an anticipated dollar value of 
$25,000 or less do not apply to such purchases when delivery or 
performance is to be made to or within the Republic of Panama. The 
requirements do apply to Commission offices located in the United States 
for the purchase of supplies or services for their own use and not for 
delivery or performance in Panama.



3513.107  Solicitation and evaluation of quotations.

    (a) Forms. (4) The following Commission forms may be used by the 
Logistical Support Division in lieu of Standard Form 18 for requesting 
small purchase price quotations:
    (i) Panama Canal Form No. 1821, Request For Quotation. This form may 
be used by the Purchasing and Contracts Branch for the solicitation of 
nonstock items and services. It must be used in conjunction with forms 
7071 and 7074 (see paragraph (a)(4)(iv) of this section).
    (ii) Panama Canal Form No. 1822, Request For Quotation Continuation. 
This form may be used with Panama Canal Form No. 1821 when additional 
space is needed.
    (iii) Panama Canal Form No. 2008, This Is A Request For Prices; It 
Is Not An Order. This form may be used by the Inventory Management 
Branch for the solicitation of standard stock items. It must be used in 
conjunction with forms 7071 and 7074 (see paragraph (a)(4)(iv) of this 
section).
    (iv) Panama Canal Commission Form 7071, General Contract Clauses And 
Provisions, Small Purchases; and Panama Canal Commission Form 7074, 
Information Sheet. These two forms shall be forwarded to prospective 
suppliers together with either Panama Canal Form No. 1821 or Panama 
Canal Form No. 2008, as applicable.



               Subpart 3513.2_Blanket Purchase Agreements



3513.201  General.

    (a) Except for the rental of construction equipment, blanket 
purchase agreements (BPA's) may be established only by contracting 
officers within the General Services Bureau. The contracting officers 
authorized to establish BPA's are:

[[Page 179]]

    (1) Chief, Inventory Management Branch for acquisition of inventory 
stocks;
    (2) Chief, New Orleans Branch for acquisition of parts in the New 
Orleans area for the Motor Transportation Division and such other items 
as may be designated by the General Services Director;
    (3) Chief, Construction Division, Engineering and Construction 
Bureau, for the rental of construction equipment; and
    (4) Chief, Purchasing and Contracts Branch for acquisition of 
supplies or services not covered under paragraphs (a) (1) through (3) of 
this section.

[55 FR 7645, Mar. 2, 1990; 55 FR 38331, Sept. 18, 1990]



3513.203  Establishment of Blanket Purchase Agreements.



3513.203-1  General.

    (a) Blanket purchase agreements may be established for supplies or 
services which are readily available and for which their purchase does 
not require detailed technical specifications, technical inspection, or 
complex terms and conditions.
    (b) Only the contracting officer (CO) and officials authorized by a 
CO and designated in the BPA shall be permitted to request deliveries. 
Delivery (call) orders shall usually be made by telephone or in person. 
Before placing a call order against the BPA, each requirement shall be 
screened for availability from Commission inventory sources and from the 
mandatory sources of supply prescribed in FAR part 8. Necessary controls 
shall be maintained by the person placing the call orders under the BPA 
to ensure that any limitation stated therein is not exceeded. The BPA 
identification number shall be specified each time a delivery is 
requested.
    (c) The procedure for establishing and using BPA's is prescribed in 
the Commission's Financial Systems Manual 14.020, covering BPA's in 
general, and 14.007, covering BPA's for automotive parts.



3513.204  Purchases under Blanket Purchase Agreements.

    (a) Individual call orders under a BPA shall not exceed the dollar 
limitation specified in the BPA, which limitation shall not exceed the 
dollar limitations established by the:
    (1) Engineering and Construction Director for the rental of 
construction equipment, and
    (2) General Services Director for all other BPA's.
    (b) Purchases under BPA's shall be documented on Panama Canal Form 
No. 3099, Request For Purchase/Call Order.



                     Subpart 3513.5_Purchase Orders



3513.505  Purchase order and related forms.



3513.505-2  Agency order forms in lieu of Optional Forms 347 and 348.

    The following Commission order forms may be used in lieu of Optional 
Forms 347 and 348 for the purposes described below:
    (a) Panama Canal Form No. 1010, Purchase Order. This form may be 
used by the Inventory Management Branch (1) for the small purchase 
acquisition of standard stock items, and (2) as a delivery order for 
ordering or scheduling deliveries against established contracts or from 
Government sources of supply.
    (b) Panama Canal Form No. 1820, Purchase Order. This form may be 
used by the Purchasing and Contracts Branch (1) for the small purchase 
acquisition of non-stock items and services, and (2) as a delivery order 
for ordering or scheduling deliveries against established contracts or 
from Government sources of supply.
    (c) Panama Canal Form No. 3083, Purchase Order Continuation. This 
form may be used with Panama Canal Form No. 1820 when additional space 
is needed.
    (d) Panama Canal Form No. 3163, Division Purchase Order. This form 
may be used by all activities having contracting authority for the 
decentralized procurement of supplies and services (see 3513.505-71).
    (e) Panama Canal Form No. 3163-MTD, Division Purchase Order. This 
form may be used by the Motor Transportation

[[Page 180]]

Division and the New Orleans Branch, Logistical Support Division for 
purchases of nonstandard stock automotive repair parts that do not 
exceed dollar amounts established by the General Services Director.



3513.505-70  Purchase requisition.

    Panama Canal Form No. 1821, Purchase Requisition, shall be used by 
requiring activities to request purchasing action by the Purchasing and 
Contracts Branch, Logistical Support Division. The procedure for using 
purchase requisitions is prescribed in the Commission's Financial 
Systems Manual 14.010.



3513.505-71  Division Purchase Order.

    (a) General. The Division Purchase Order (DPO), PCC Form No. 3163, 
may be used by all activities that have contracting authority for the 
decentralized procurement of supplies and services (see 3501.601(b)). 
When repetitive purchases within the authorized DPO dollar limitation 
are made for the same supplies or services, the activity shall request 
the Chief, Purchasing and Contracts Branch to establish a BPA (see 
subpart 3513.2). A detailed procedure for the use of the DPO is 
prescribed in the Commission's Financial Systems Manual 14.005, covering 
DPO's in general, and 14.007, covering DPO's for automotive parts.
    (b) Responsibilities. (1) Bureau directors and heads of independent 
units that use the DPO shall--
    (i) Ensure that, whenever practicable, the functions of procurement 
approval, receipt documentation, and payment approval in the use of a 
DPO are performed by three separate persons. In no case shall the same 
person be permitted to perform all three functions.
    (ii) Approve and sign all DPO's, subject to the conditions specified 
in paragraphs (b) (2)(iii) and (3) of this subsection, or appoint in 
writing by position or by name one or more purchasing agents to act as 
approval and signatory authority. Such appointees shall be at an 
organizational level sufficient to ensure responsible control over the 
obligation of funds that the DPO represents.
    (2) Designated purchasing agents shall--
    (i) Approve and sign DPO's within their delegated dollar authority.
    (ii) Supervise the use and issuance of DPO's and verify that such 
use and issuance are in compliance with the FAR, this PAR, and the 
Commission's Financial Systems Manual.
    (iii) Ensure that the following conditions exist before approving 
purchases to be made on DPO's:
    (A) There is a valid need for the supplies or services;
    (B) A unit fund controller has certified the availability of funds 
for the proposed purchase;
    (C) The vendor is reputable and the price is reasonable; and
    (D) The DPO is not being used as a means to purchase a known 
requirement in excess of the authorized DPO dollar limitation by 
fragmentizing the requirement (i.e., by breaking the total quantity of 
the requirement into smaller quantities that can be purchased on two or 
more DPO's, each of which does not exceed the authorized dollar 
limitation but which, collectively, will result in the purchase of the 
total quantity of the requirement).
    (3) Individuals authorized to approve and sign DPO's shall ensure 
that Government funds are not expended for standard stock items, 
unauthorized office supplies, furnishings, appliances, or for items that 
are intended solely for personal convenience or to satisfy personal 
desires of an official or that are nonessential to the needs of the 
Government and do not contribute to the fulfillment of the Commission's 
mission.
    (4) The General Services Director shall delegate authority for 
contracting by means of DPO's to bureau directors and heads of 
independent units. Such delegation shall be published from time to time 
in bulletin or memorandum form and shall conform to dollar limitations 
approved by the Administrator.
    (c) Panama Preference. DPO purchases shall conform to the Treaty 
preference given to supplies and services obtainable in Panama, as 
prescribed in subpart 3570.1.

[[Page 181]]



PART 3514_SEALED BIDDING--Table of Contents




Sec.
3514.000 Scope of part.

                   Subpart 3514.2_Solicitation of Bids

3514.201-6 Solicitation provisions.
3514.205 Solicitation mailing lists.
3514.205-1 Establishment of lists.

          Subpart 3514.4_Opening of Bids and Award of Contract

3514.404 Rejection of bids.
3514.404-1 Cancellation of invitations after opening.
3514.406 Mistakes in bids.
3514.406-3 Other mistakes disclosed before award.
3514.406-4 Mistakes after award.
3514.407 Award.
3514.407-1 General.
3514.407-6 Equal low bids.

    Authority: 40 U.S.C. 486(c); Article IX of the Agreement in 
Implementation of Article III of the Panama Canal Treaty of 1977.

    Source: 55 FR 7647, Mar. 2, 1990, unless otherwise noted.



3514.000  Scope of part.

    This part implements and supplements FAR part 14 by providing 
additional solicitation provisions and additional guidance on 
establishment of solicitation mailing lists, cancellation of invitations 
after opening, mistakes in bids, and contract award.



                   Subpart 3514.2_Solicitation of Bids



3514.201-6  Solicitation provisions.

    (a) In addition to the provisions prescribed in FAR 14.201-6, the 
contracting officer shall insert in all invitations for bids the 
provisions at--
    (1) 3552.214-70, Price--Sealed Bidding; and
    (2) 3552.214-73, Caution--Sealed Bidding.
    (b) The contracting officer shall insert the following provisions in 
all invitations for bids for construction. These provisions may also be 
used in invitations for bids for supplies or services if the contracting 
officer determines that their use is appropriate:
    (1) 3552.214-71, Additional Data To Be Submitted.
    (2) 3552.214-72, Rejection of Bids.
    (c) The contracting officer shall insert the provision at 3552.214-
74, All or None Award--Sealed Bidding, in invitations for bids for 
supplies or services if the contracting officer determines that award 
will be made on an ``all or none'' basis to one bidder for all items 
because of the nature of the items (e.g., supply items must interface or 
otherwise be fully compatible with each other; items covering services 
are so interrelated that it would be impracticable to split the award).
    (d)(1) The contracting officer shall insert the provision at 
3552.214-75, All or None Award--Sealed Bidding--Construction, in 
invitations for bids for construction work that is estimated to exceed 
$10,000 if the contracting officer determines:
    (i) To require bidding on all items, and
    (ii) That award will be made on an ``all or none'' basis to one 
bidder for all items.
    (2) If the construction work is not estimated to exceed $10,000, the 
contracting officer shall use the Alternate I version of provision 
3552.214-75.
    (3) If the contracting officer determines that:
    (i) The contract work, regardless of its estimated value, will be 
awarded to one bidder for all the work, and
    (ii) Bidding on all items will not be required, the Alternate II 
version of provision 3552.214-75 is to be used.

[55 FR 7647, Mar. 2, 1990; 55 FR 38331, Sept. 18, 1990]



3514.205  Solicitation mailing lists.



3514.205-1  Establishment of lists.

    (a) Each Commission contracting activity shall establish 
solicitation mailing lists as required by FAR 14.205-1.
    (b) In order to carry out the requirements of the Treaty to give 
preference to the acquisition of supplies and services obtainable from 
sources in the Republic of Panama, each Commission contracting activity 
shall develop solicitation lists of local companies which can provide 
such supplies or services.

[[Page 182]]



          Subpart 3514.4_Opening of Bids and Award of Contract



3514.404  Rejection of bids.



3514.404-1  Cancellation of invitations after opening.

    (c) The Procurement Executive, upon recommendation of the cognizant 
HCA, is authorized to make the determinations prescribed in FAR 14.404-
1(c) when an invitation is to be cancelled and all bids rejected after 
bid opening but prior to award.
    (e)(1) The Procurement Executive, upon recommendation of the 
cognizant HCA, may authorize the contracting officer to complete the 
acquisition through negotiation in the determination to cancel the 
invitation for bids when the conditions in FAR 14.404-1(c) (6) or (7) 
apply.



3514.406  Mistakes in bids.



3514.406-3  Other mistakes disclosed before award.

    The cognizant HCA is delegated the authority to make the 
administrative determinations in connection with mistakes in bids prior 
to award. This authority may not be redelegated. The General Counsel 
must review and concur with all determinations under FAR 14.406-3.



3514.406-4  Mistakes after award.

    (b) The cognizant HCA is authorized to make determinations on 
mistakes in bids disclosed after award. The General Counsel must review 
and concur with all determinations made under FAR 14.406.4.



3514.407  Award.



3514.407-1  General.

    (a) The contracting officer shall make a contract award to that 
responsible bidder whose bid, conforming to the invitation, will be most 
advantageous to the Government, considering only the price and price-
related factors contained in FAR 14.201-8. Particular attention shall be 
paid in supply contracts to evaluation of transportation costs to ensure 
that the award is made to the lowest overall responsive and responsible 
bidder.



3514.407-6  Equal low bids.

    (a) Contracts shall be awarded in the following order of priority 
when two or more low bids are equal in all respects:
    (1) Preference shall be given to the bidder whose supplies or 
services are obtainable in the Republic of Panama;
    (2) When two or more bidders offer supplies or services obtainable 
in Panama, preference shall be given to the bidder whose bid has a 
larger percentage of components of Panamanian origin;
    (3) If two or more bidders remain equally low after application of 
paragraphs (a) (1) and (2) of this subsection, the tie-breaking 
procedures prescribed in FAR 14.407-6(b) shall be followed;
    (4) The order of precedence established in FAR 14.407-6 (a) and (b).
    (c) When award is made by using the priorities under this 3514.407-
6, the contracting officer shall incorporate the written agreement 
prescribed in FAR 14.407-6(c) in the contract.



PART 3515_CONTRACTING BY NEGOTIATION--Table of Contents




Sec.
3515.000 Scope of part.

   Subpart 3515.4_Solicitation and Receipt of Proposals and Quotations

3515.407 Solicitation provisions.

                  Subpart 3515.5_Unsolicited Proposals

3515.500 Scope of subpart.
3515.502 Policy.
3515.503 General.
3515.504 Advance guidance.
3515.506 Agency procedures.
3515.506-1 Receipt and initial review.
3515.506-2 Evaluation.
3515.507 Contracting methods.
3515.508 Prohibitions.

                    Subpart 3515.8_Price Negotiation

3515.802 Policy.
3515.804 Cost or pricing data.
3515.804-2 Requiring certified cost or pricing data.
3515.804-3 Exemptions from or waiver of submission of certified cost or 
          pricing data.
3515.804-6 Procedural requirements.

                          Subpart 3515.9_Profit

3515.902 Policy.


[[Page 183]]


    Authority: 40 U.S.C. 486(c).

    Source: 55 FR 7648, Mar. 2, 1990, unless otherwise noted.



3515.000  Scope of part.

    This part implements and supplements FAR part 15 by providing 
additional solicitation provisions and by providing Commission policies 
and procedures on unsolicited proposals, price negotiations, and profit.



   Subpart 3515.4_Solicitation and Receipt of Proposals and Quotations



3515.407  Solicitation provisions.

    (a) In addition to the provisions prescribed in FAR 15.407, the 
contracting officer shall insert in solicitations the provisions at--
    (1) 3552.215-70, Price; and
    (2) 3552.215-71, Caution.
    (b) The contracting officer shall insert the provision at 3552.215-
72, All or None Award, in solicitations for supplies or services if the 
contracting officer determines that award will be made on an ``all or 
none'' basis to one offeror for all items because of the nature of the 
items (e.g., supply items must interface or otherwise be fully 
compatible with each other; items covering services are so interrelated 
that it would be impracticable to split the award). This provision may 
also be used in solicitations for construction if the contracting 
officer determines that its use is appropriate.



                  Subpart 3515.5_Unsolicited Proposals



3515.500  Scope of subpart.

    This subpart implements and supplements the policies and procedures 
governing unsolicited proposals prescribed in FAR subpart 15.5. It also 
establishes the Commission contact point for coordinating the receipt, 
evaluation, and disposition of unsolicited proposals.



3515.502  Policy.

    It is the policy of the Commission to receive, review, and consider 
for acceptance unsolicited proposals, as that term is defined in FAR 
15.501 and further described in FAR 15.503(c). As indicated in FAR 
15.502, such proposals may be accepted for sole source negotiation only 
when appropriate authority exists in FAR subpart 6.3 and when all 
conditions in FAR 15.507(b) have been complied with.



3515.503  General.

    (f) Unsolicited proposals for the performance of services are, 
except as discussed in this paragraph, unacceptable as the performance 
of services is unlikely to necessitate innovative and unique concepts. 
There may be rare instances in which an unsolicited proposal offers an 
innovative and unique approach to the accomplishment of a service. If 
such a proposal offers a previously unknown or an alternative approach 
to generally recognized techniques for the accomplishment of a specific 
service, and such approach will provide significantly greater economy or 
enhanced quality, it may be considered for acceptance, provided that 
such acceptance can be made in conformance with the policy in 3515.502.



3515.504  Advance guidance.

    (a) It is not uncommon for sales representatives and engineers to 
approach field personnel of the Commission to discuss their products or 
proposals. Bureau Directors and Heads of Independent Units shall take 
the necessary steps to ensure that Commission employees do not make any 
commitments, explicit or implied, on behalf of the Commission to 
eventually procure such products or proposals. Whenever any person 
orally makes an ``unsolicited proposal'', Commission personnel shall 
inform the offeror that unsolicited proposals must be in writing and 
that further information should be obtained from the Commission's 
Procurement Executive or Assistant Procurement Executive before the 
offeror proceeds with the submission of a written proposal. Commission 
personnel may provide copies, if practicable, of FAR subpart 15.5 and 
subpart 3515.5 of this regulation to persons interested in submitting 
unsolicited proposals.

[[Page 184]]



3515.506  Agency procedures.

    (a) In order to allow the Commission sufficient time to evaluate the 
unsolicited proposal and negotiate any resultant contract, prospective 
contractors should submit their proposals, in triplicate, well in 
advance of the time they desire to commence their effort or activity. A 
minimum of six months advance submission is suggested (see FAR 
15.505(c)(2)).
    (b) The Procurement Executive is the Commission contact point to 
coordinate the receipt and handling of unsolicited proposals within the 
commission.



3515.506-1  Receipt and initial review.

    (a) The Procurement Executive shall conduct an initial review of 
each unsolicited proposal to determine if it appears to (1) constitute a 
valid unsolicited proposal as described in FAR 15.503(c), and (2) meet 
the requirements contained in FAR 15.506-1(a). If so, the Procurement 
Executive shall acknowledge its receipt to the sender and initiate 
processing of the proposal for evaluation in accordance with 3515.506-2 
of this subpart. If the proposal does not meet the requirements of FAR 
15.506-1(a), or otherwise does not qualify as an unsolicited proposal, 
the Procurement Executive shall return it to the sender with appropriate 
comments.



3515.506-2  Evaluation.

    (a) Promptly after receipt of an unsolicited proposal deemed to 
satisfy the requirements of 3515.506-1(a), the Procurement Executive 
shall forward the original and all copies to the cognizant contracting 
officer for further coordination of the technical evaluation of the 
proposal. The cognizant contracting officer shall (1) determine the 
appropriate Commission organization that would fund the acquisition (see 
FAR 15.507(b)(3)) in the event the unsolicited proposal would be 
acceptable for a negotiated award pursuant to FAR 15.507(b), and (2) 
forward a copy to that organization for technical evaluation. If more 
than one organization has a potential interest in the proposal, or 
should otherwise be included in the evaluation phase because of its 
technical expertise, copies of the proposal shall be circulated to each 
such office.
    (b) Evaluating organizations shall complete their evaluations as 
quickly as practicable and forward them, together with all copies of the 
unsolicited proposal, to the cognizant contracting officer. Evaluations 
shall take into consideration the factors in FAR 15.506-2(a), shall be 
in writing, and shall include, in addition to a comprehensive technical 
analysis and conclusion(s), a recommendation as to the ultimate 
disposition of the proposal. When the recommendation is to accept the 
unsolicited proposal, the evaluation shall include the documentation 
required in FAR 15.507(b)(3).



3515.507  Contracting methods.

    (a) If the unsolicited proposal is not recommended for acceptance 
after technical evaluation, the cognizant contracting officer shall 
return the proposal and all copies thereof to the offeror, citing the 
reasons why the proposal is not acceptable. A copy of the letter shall 
be furnished to the Procurement Executive.
    (c) If the unsolicited proposal is acceptable as a basis for 
negotiation, the cognizant contracting officer shall:
    (1) Obtain the concurrence of the General Counsel before proceeding 
with negotiations, and
    (2) Advise the Procurement Executive in writing of such action.



3515.508  Prohibitions.

    (b) All unsolicited proposals received by units of the Commission 
shall be treated ``FOR OFFICIAL USE ONLY'' and shall be protected from 
unauthorized disclosure. No copies shall be made except as authorized by 
the Procurement Executive or cognizant contracting officer, as 
appropriate. All Commission personnel who handle a proposal are 
responsible for safeguarding the information therein, and shall not 
disclose the information to unauthorized personnel within or outside of 
the Commission.



                    Subpart 3515.8_Price Negotiation



3515.802  Policy.

    It is the policy of the Commission to obtain the cost or pricing 
data required pursuant to FAR 15.804 from all U.S. or

[[Page 185]]

foreign (including Panama) prime contractors and subcontractors.



3515.804  Cost or pricing data.



3515.804-2  Requiring certified cost or pricing data.

    When determining the contract amount for purposes of applying the 
dollar threshold at FAR 15.804-2(a) for requesting certified cost or 
pricing data, the value of the contract shall include any priced 
options. Exercise of a priced option is not considered a price 
adjustment and does not require submission of cost or pricing data.



3515.804-3  Exemptions from or waiver of submission of certified cost 
or pricing data.

    All findings rendered pursuant to FAR 15.804-3 (b)(2)(iii) and 
(c)(8) shall be approved by the cognizant HCA with the concurrence of 
the General Counsel. The exemptions permitted under FAR 15.804-3(g) and 
the waivers permitted under FAR 15.804-3(i) shall be authorized by the 
cognizant HCA with the concurrence of the General Counsel.



3515.804-6  Procedural requirements.

    For requests for proposals or modifications not exceeding $25,000, 
the contracting officer may require contractors to submit information 
for cost or price analysis on Panama Canal Form No. 6122, Cost 
Breakdown, at 3553.215.



                          Subpart 3515.9_Profit



3515.902  Policy.

    (a) The Commission shall use a structured approach to determine the 
profit or fee prenegotiation objective in acquisition actions of 
$500,000 or more that require cost analysis based on the profit analysis 
factors in FAR 15.905.
    (b) The following types of acquisitions are exempt from the 
requirements of the structured approach, but the contracting officer 
shall comply with FAR 15.905-1 when analyzing profit for these contracts 
or actions:
    (1) All actions which do not require cost analysis;
    (2) Architect-engineer contracts;
    (3) Construction contracts;
    (4) Contracts primarily requiring delivery of material supplied by 
subcontractors;
    (5) Termination settlements; and
    (6) Other professional services.
    (c) In developing a profit or fee prenegotiation objective, the 
contracting officer shall comply with the requirements in FAR 15.903.
    (d) When profit analysis is required, any amount proposed by the 
prospective contractor for the cost of money for facilities capital 
allowable under FAR 31.205-10 shall be deducted from the prenegotiation 
cost base objective before calculating the profit objective.
    (e) The cognizant HCA is responsible for establishing procedures to 
ensure compliance with this subpart.



PART 3516_TYPES OF CONTRACTS--Table of Contents




Sec.
3516.000 Scope of part.

               Subpart 3516.3_Cost-Reimbursement Contracts

3516.301 General.
3516.301-3 Limitations.

   Subpart 3516.6_Time-and-Materials, Labor-Hour, and Letter Contracts

3516.601 Time-and-materials contracts.
3516.603 Letter contracts.
3516.603-2 Application.
3516.603-3 Limitations.
3516.603-70 Information to be furnished when requesting authority to 
          issue a letter contract.
3516.603-71 Approval for modifications to letter contracts.

    Authority: 40 U.S.C. 486(c).

    Source: 55 FR 7650, Mar. 2, 1990, unless otherwise noted.



3516.000  Scope of part.

    This part implements and supplements FAR part 16. It provides 
Commission policies and procedures for preparation of determinations and 
findings authorizing use of cost-reimbursement contracts, and for use of 
time-and-materials and letter contracts.

[[Page 186]]



               Subpart 3516.3_Cost-Reimbursement Contracts



3516.301  General.



3516.301-3  Limitations.

    (c) The following format shall be used and executed by the 
contracting officer as the determination and findings authorizing the 
use of a cost-reimbursement contract:

                         PANAMA CANAL COMMISSION

                       Determination and Findings

              Authority to Use Cost-Reimbursement Contract

    I hereby find that:
    (1) The (Bureau/Division name) proposes to contract with (name of 
proposed contractor) for (describe work, service, or product) (identify 
program or project). The estimated cost is ($--------) (if contract is 
CPFF type, insert, (``plus a fixed fee of ($--------) which is ---- 
percent of the estimated cost exclusive of fee'').
    (2) (Set forth facts and circumstances that show why it is 
impracticable to acquire supplies or services of the kind or quality 
required without the use of the proposed type of contract or why the 
proposed method of contracting is likely to be less costly than other 
methods.)
    I hereby determine that:
    On the basis of the above findings, it is impracticable to acquire 
supplies or services of the kind or quality required without the use of 
a (cost, cost-sharing, or cost-plus-a-fixed fee*) type of contract, or 
the (cost, cost-sharing, or cost-plus-a-fixed fee*) method of 
contracting is likely to be less costly than other methods.

Date____________________________________________________________________
________________________________________________________________________
 (Signature)

    *Contracting officer inserts appropriate type of contract.

    The determination and findings for all cost-reimbursement and 
incentive/award fee type contracts shall be reviewed and approved by the 
HCA.



   Subpart 3516.6_Time-and-Materials, Labor-Hour, and Letter Contracts



3516.601  Time-and-materials contracts.

    (c) Limitations. The format prescribed in 3516.301-3(c) shall be 
used and executed by the contracting officer as the determination and 
findings authorizing the use of either a time-and-materials contract or 
a labor-hour contract, except that in lieu of the final paragraph insert 
the following:

    I hereby determine that:
    On the basis of the above findings, no other type of contract will 
suitably serve for the acquisition of the required supplies or services.



3516.603  Letter contracts.



3516.603-2  Application.

    (a) It is the policy of the Panama Canal Commission to refrain from 
issuing letter contracts. Exceptions to this policy will be permitted 
only in those cases in which all matters of a substantive nature, such 
as statements of work, delivery schedules, and general and special 
clauses have been resolved and agreed upon. Exceptions to this policy 
must be approved by the Administrator.



3516.603-3  Limitations.

    The cognizant HCA is designated to execute the prescribed 
determination that no other contract is suitable. However, if the 
cognizant HCA is to sign the letter contract as the contracting officer, 
the Procurement Executive shall execute the determination.



3516.603-70  Information to be furnished when requesting authority to 
issue a letter contract.

    The following information should be included by the contracting 
officer in any memorandum requesting approval to issue a letter 
contract:
    (a) Name and address of proposed contractor.
    (b) Location where contract is to be performed.
    (c) Contract number, including modification number, if possible.
    (d) Brief description of work and services to be performed.
    (e) Performance or delivery schedule.
    (f) Amount of letter contract.
    (g) Estimated total amount of definitized contract.
    (h) Type of contract to be executed (fixed price, cost-
reimbursement, etc.)
    (i) Statement of the necessity and advantage to the Commission of 
the use of the proposed letter contract.

[[Page 187]]

    (j) Statement of the percentage of the estimated cost of the 
proposed acquisition that the obligation of funds represents. In those 
rare instances in which the obligation represents 50 percent or more of 
the proposed estimated cost of the acquisition, a justification for that 
obligation must be included describing the basis and necessity for the 
obligation (e.g., the contractor requires a large initial outlay of 
funds for major subcontract awards or an extensive purchase of materials 
to meet an urgent delivery requirement). In every case, documentation 
must ensure that the amount to be obligated is not in excess of an 
amount reasonably required to perform the work.
    (k) Period of effectiveness of the proposed letter contract.
    (l) Statement of any substantive matters that need to be resolved.



3516.603-71  Approval for modifications to letter contracts.

    All letter contract modifications must be approved by the cognizant 
HCA responsible for the acquisition. Requests for authority to issue 
letter contract modifications shall be processed in the same manner as 
requests for authority to issue letter contracts and shall include the 
following:
    (a) Name and address of the contractor.
    (b) Description of work and services.
    (c) Date original request was approved and approving official.
    (d) Letter contract number and date issued.
    (e) Complete justification as to why the letter contract cannot be 
definitized at this time.
    (f) Complete justification as to why the level of funding must be 
increased.
    (g) Complete justification as to why the period of effectiveness is 
increased, if applicable.
    (h) If the funding of letter contracts is to be increased to more 
than 50 percent of the estimated cost of the acquisition, the 
information required by 3516.603-70(j) must be included.



PART 3517_SPECIAL CONTRACTING METHODS--Table of Contents




                         Subpart 3517.2_Options

Sec.
3517.200 Scope of subpart.
3517.203 Solicitations.
3517.204 Contracts.
3517.207 Exercise of options.

      Subpart 3517.5_Interagency Acquisitions Under the Economy Act

3517.500 Scope of subpart.
3517.501 Definitions.
3517.502 General.
3517.504 Ordering procedures.

    Authority: 40 U.S.C. 486(c).

    Source: 55 FR 7651, Mar. 2, 1990, unless otherwise noted.



                         Subpart 3517.2_Options



3517.200  Scope of subpart.

    This subpart does not apply to contracts for services involving:
    (a) Construction, alteration, or repair of real property;
    (b) Architect-engineer services;
    (c) Automatic data processing equipment systems; and
    (d) Telecommunication equipment and services.

However, it does not preclude the use of options in those contracts.



3517.203  Solicitations.

    (g)(2) The use of options for increased quantities of supplies or 
services which exceed 50 percent of the base quantity specified in the 
contract for a particular period shall be approved by the cognizant HCA 
prior to issuing the solicitation. In the case of supplies, the 50 
percent limitation applies only to contracts which have a base quantity 
of more than one.



3517.204  Contracts.

    (e) The use of option periods which, when combined with the base 
contract period, results in a total contract period of performance 
exceeding twelve months shall be approved by the cognizant HCA prior to 
issuing the solicitation. In no event, however, shall the total of the 
base and option periods exceed sixty (60) months in duration.

[[Page 188]]



3517.207  Exercise of options.

    (h) The contracting officer, if the contract so provides, may, 
subject to the conditions in FAR 17.204(d) and FAR 32.703-2, exercise an 
option contingent upon the availability of funds. Under no circumstances 
shall any action be taken which could be construed as creating a legal 
liability on the part of the Commission until a formal notice of 
availability of funds in the form of a contract modification has been 
issued by the contracting officer.



      Subpart 3517.5_Interagency Acquisitions Under the Economy Act



3517.500  Scope of subpart.

    This subpart prescribes policies and procedures applicable to the 
use of Interservice Support Agreements and Memorandums of Understanding.



3517.501  Definitions.

    Interservice Support Agreement (ISA) means an agreement entered into 
between the Panama Canal Commission and any other department or agency 
of the United States for the use of facilities, furnishing of supplies 
or services, or performance of functions. ISA's may be based upon 
Memorandums of Understanding.
    Memorandum of Understanding (MOU) means the basic document which 
outlines host-tenant relationships. MOU's serve as the standard for 
relationships between host units and supporting or supported activities.



3517.502  General.

    The General Services Director is the Commission official authorized 
to enter into ISA's. The Director, by written appointment, may delegate 
this authority to one or more contracting officers in the General 
Services Bureau. The determination and findings required by FAR 17.503 
shall be made by the General Services Director or the appointee(s), as 
applicable.



3517.504  Ordering procedures.

    (a) The procedures in FAR 17.504 shall apply to Commission ISA's.
    (b) When the other agency to an ISA is a DOD activity, the DOD forms 
and format normally shall be followed.

[[Page 189]]



                   SUBCHAPTER D_SOCIOECONOMIC PROGRAMS





PART 3519_SMALL BUSINESS AND SMALL DISADVANTAGED BUSINESS CONCERNS
--Table of Contents




                         Subpart 3519.2_Policies

Sec.
3519.201 General policy.
3519.202-3 Equal low bids.

    Authority: 40 U.S.C. 486(c); Article IX of the Agreement in 
Implementation of Article III of the Panama Canal Treaty of 1977.



                         Subpart 3519.2_Policies



3519.201  General policy.

    (a) Any acquisition which requires the solicitation of bids, 
proposals, or quotes from sources within Panama and also from sources 
within the United States shall not be restricted by any United States 
statute that is inconsistent with Article IX of the Agreement in 
Implementation of Article III of the Panama Canal Treaty.
    (d) The Chief, New Orleans Branch, Logistical Support Division, 
shall discharge the functions of the Small and Disadvantaged Business 
Utilization Specialist (SDBUS).

[55 FR 7651, Mar. 2, 1990]



3519.202-3  Equal low bids.

    In the event of equal low bids, contracts shall be awarded in the 
order of priority set forth in 3514.407-6.

[55 FR 7651, Mar. 2, 1990]



PART 3520_LABOR SURPLUS AREA CONCERNS--Table of Contents




                         Subpart 3520.1_General

Sec.
3520.102 General policy.
3520.103 Contract clause.

                        Subpart 3520.2_Set-asides

3520.201 Set-asides for labor surplus area concerns.
3520.201-1 Total set-asides.

        Subpart 3520.3_Labor Surplus Area Subcontracting Program

3520.301 General.

    Authority: 40 U.S.C. 486(c).

    Source: 55 FR 7651, Mar. 2, 1990, unless otherwise noted.



                         Subpart 3520.1_General



3520.102  General policy.

    Subject to the order of precedence in FAR 19.504, the Panama Canal 
Commission shall award appropriate contracts to eligible labor surplus 
area (LSA) concerns and encourage contractors to place subcontracts with 
LSA concerns only when all of the following circumstances exist:
    (a) The acquisition is to be performed within the United States, its 
territories and possessions, the Commonwealth of Puerto Rico, and the 
Trust Territory of the Pacific Islands.
    (b) The concern, together with its first-tier subcontractors, will 
perform substantially in labor surplus areas as defined in FAR 20.101; 
and
    (c) The value of the acquisition is estimated to exceed the small 
purchase limitation in FAR part 13.



3520.103  Contract clause.

    (b) The contract clause at FAR 52.220-1, Preference for Labor 
Surplus Area Concerns, shall be included in solicitations and contracts 
only as prescribed by FAR 20.103(b) and under those conditions set forth 
in 3520.102.



                        Subpart 3520.2_Set-asides



3520.201  Set-asides for labor surplus area concerns.



3520.201-1  Total set-asides.

    The contracting officer shall set aside the entire amount of an 
individual acquisition or class of acquisitions for LSA concerns only 
under those conditions set forth in 3520.102.



        Subpart 3520.3_Labor Surplus Area Subcontracting Program



3520.301  General.

    The provisions of FAR subpart 20.3 apply only under those conditions 
set forth in 3520.102.

[[Page 190]]



PART 3522_APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS
--Table of Contents




Sec.
3522.000 Scope of part.

                   Subpart 3522.1_Basic Labor Policies

3522.100 Scope of subpart.
3522.103 Overtime.
3522.103-4 Approvals.

                      Subpart 3522.2_Convict Labor

3522.270 Applicability.

       Subpart 3522.3_Contract Work Hours and Safety Standards Act

3522.370 Applicability.

   Subpart 3522.4_Labor Standards for Contracts Involving Construction

3522.402 Applicability.

            Subpart 3522.6_Walsh-Healey Public Contracts Act

3522.603 Applicability.
3522.608 Procedures.
3522.608-3 Protests against eligibility.
3522.608-4 Award pending final determination.
3522.608-6 Postaward.

               Subpart 3522.8_Equal Employment Opportunity

3522.803 Responsibilities.
3522.804 Affirmative action programs.
3522.804-2 Construction.
3522.805 Procedures.
3522.807 Exemptions.
3522.808 Complaints.
3522.809 Enforcement.
3522.810 Solicitation provisions and contract clauses.

        Subpart 3522.10_Service Contract Act of 1965, as Amended

3522.1003 Applicability.

        Subpart 3522.13_Special Disabled and Vietnam Era Veterans

3522.1302 Applicability.
3522.1303 Waivers.
3522.1306 Complaint procedures.

              Subpart 3522.14_Employment of the Handicapped

3522.1402 Applicability.
3522.1403 Waivers.
3522.1406 Complaint procedures.

    Authority: 40 U.S.C. 486(c).

    Source: 55 FR 7652, Mar. 2, 1990, unless otherwise noted.



3522.000  Scope of part.

    This part prescribes--
    (a) Labor laws of the United States and their application to 
acquisitions conducted by the Panama Canal Commission; and
    (b) Contracting policy and procedures for the implementation of 
pertinent labor laws in contracts with United States and Panamanian 
business concerns. (See subpart 3525.8 for policies and procedures 
pertaining specifically to contracts with Panamanian business concerns 
or others to which Panamanian laws may apply.)



                   Subpart 3522.1_Basic Labor Policies



3522.100  Scope of subpart.

    The provisions of FAR subpart 22.1 shall apply specifically to 
contracts with United States business concerns to the extent prescribed 
throughout FAR part 22.



3522.103  Overtime.



3522.103-4  Approvals.

    (a) Overtime requests by contractors may be approved under the 
conditions contemplated in FAR 22.103-4(a). Such approvals are required 
under cost-reimbursement, time-and-materials, and labor-hour contracts 
since such contracts place substantial cost risk on the Government.
    (b) The Commission officials for approval of contractor requests for 
overtime in cost-reimbursement contracts as contemplated in FAR 22.103-4 
(a), (b), and (f) are the cognizant Heads of Contracting Activities.



                      Subpart 3522.2_Convict Labor



3522.270  Applicability.

    As indicated at FAR 22.202, the policies and procedures in FAR 
subpart 22.2 are applicable only to contracts which are to be performed 
within any State,

[[Page 191]]

the District of Columbia, the Commonwealth of Puerto Rico, the Virgin 
Islands, Guam, American Samoa, or the Trust Territory of the Pacific 
Islands. The policies and procedures do not apply to contracts which are 
to be performed within the Republic of Panama or within any other 
foreign country.



       Subpart 3522.3_Contract Work Hours and Safety Standards Act



3522.370  Applicability.

    As indicated at FAR 22.305, the policies and procedures in FAR 
subpart 22.3 shall not be applied to contracts to be performed solely 
within the Republic of Panama, other foreign countries, or within a 
territory under United States jurisdiction other than a State, the 
District of Columbia, Puerto Rico, the Virgin Islands, Outer Continental 
Shelf Lands as defined in the Outer Continental Shelf Lands Act (43 
U.S.C. 1331), American Samoa, Guam, Wake Island, and Johnston Island.



   Subpart 3522.4_Labor Standards for Contracts Involving Construction



3522.402  Applicability.

    (c) Contracts to be performed outside the United States. As 
indicated by paragraphs (a) through (d) at FAR 22.407, the requirements 
of FAR subpart 22.4 do not apply to contracts for construction to be 
performed within the Republic of Panama or within any other foreign 
country.



            Subpart 3522.6_Walsh-Healey Public Contracts Act



3522.603  Applicability.

    As indicated at FAR 22.603 and FAR 22.604-2, the requirements and 
procedures of FAR subpart 22.6 and this subpart 3522.6 do not apply to 
contracts for supplies that are manufactured in the Republic of Panama 
or elsewhere outside the United States, Puerto Rico or the Virgin 
Islands.



3522.608  Procedures.



3522.608-3  Protests against eligibility.

    The contracting officer shall forward the determination of 
eligibility, after concurrence by legal counsel, to the cognizant Head 
of Contracting Activity (HCA) for referral to the Department of Labor 
(DOL) or to the Small Business Administration if the offeror is a small 
business.



3522.608-4  Award pending final determination.

    (a) If an offeror's eligibility case is pending review by the DOL or 
SBA, the contracting officer shall obtain the concurrence of legal 
counsel and approval of the cognizant HCA prior to making an award.



3522.608-6  Postaward.

    (c) In the event of a violation of a stipulation required under the 
Act, the contracting officer shall, with concurrence by legal counsel 
and approval by the cognizant HCA, notify the appropriate regional 
office of the DOL.



               Subpart 3522.8_Equal Employment Opportunity



3522.803  Responsibilities.

    (d) If the applicability of Executive Order 11246 and implementing 
regulations are questioned by any commercial firm or other entity with 
whom the Panama Canal Commission has contracted or contemplates 
contracting, the contracting officer shall route the matter to the 
cognizant HCA, who shall obtain the opinion of legal counsel.



3522.804  Affirmative action programs.



3522.804-2  Construction.

    (b) The HCA having construction contract responsibility shall 
maintain and distribute a current list of geographical areas subject to 
affirmative action requirements to the principally affected contracting 
officers. The list may be obtained from the regional Office of Federal 
Contract Compliance Policy (OFCCP).

[[Page 192]]



3522.805  Procedures.

    (a) The contracting officer shall obtain a preaward clearance as 
required by FAR 22.805(a) (2), (3), and (5). Where, as contemplated in 
FAR 22.805(a)(7), there exists a potential delay in award of an urgent 
and critical contract, and where the OFCCP advises of its inability to 
timely complete the review, a written justification for award shall be 
forwarded to the cognizant HCA for approval of award without preaward 
clearance.
    (b) The contracting officer shall obtain and maintain an adequate 
supply of the posters entitled ``Equal Opportunity is the Law'' for 
distribution to contractors when applicable.



3522.807  Exemptions.

    (b) Panama Canal Commission contracts are exempt from the Equal 
Employment Opportunity provisions of Executive Order 11246 to the extent 
that work is performed outside the United States by employees who were 
not recruited within the United States. (See FAR 22.801 for the meaning 
of ``United States'' as used herein.)
    (c) Requests for exemption pursuant to FAR 22.807(c) shall be 
submitted to the Director, OFCCP, through the cognizant HCA.



3522.808  Complaints.

    Information regarding all complaints and subsequent referrals shall 
be forwarded to the cognizant HCA.



3522.809  Enforcement.

    The Procurement Executive is designated to make the determinations 
that may be exercised against contractors pursuant to FAR 22.809.



3522.810  Solicitation provisions and contract clauses.

    All solicitation provisions and contract clauses prescribed in FAR 
22.810 are applicable to contracts awarded by the Panama Canal 
Commission unless an exemption exists or has been obtained in accordance 
with FAR 22.807 and 3522.807.



        Subpart 3522.10_Service Contract Act of 1965, as Amended



3522.1003  Applicability.

    As indicated at FAR 22.1003-2, the policies and procedures in FAR 
subpart 22.10 do not apply to service contracts to be performed in the 
Republic of Panama or elsewhere outside the United States. (See FAR 
22.1001 for the meaning of ``United States'' as used herein.)



        Subpart 3522.13_Special Disabled and Vietnam Era Veterans



3522.1302  Applicability.

    Panama Canal Commission contracts are exempt from the provisions of 
the Vietnam Era Veterans Readjustment Assistance Act of 1972 to the 
extent that the work is performed outside the United States by employees 
who were not recruited in the United States. (See FAR 22.1308(a)(1) for 
the meaning of ``United States'' as used herein.)



3522.1303  Waivers.

    (a) The Administrator of the Panama Canal Commission is the ``agency 
head'' or the ``head of a civilian agency'' for purposes of the 
provisions of FAR 22.1303 (a) and (b)(1), respectively.
    (c) Requests for waivers shall be forwarded to the cognizant HCA for 
referral to the administrator for approval.



3522.1306  Complaint procedures.

    The contracting officer shall forward written complaints to the 
cognizant HCA for subsequent referral to the Director, OFCCP.



              Subpart 3522.14_Employment of the Handicapped



3522.1402  Applicability.

    (a) Panama Canal Commission contracts are exempt from the 
Rehabilitation Act of 1973 to the extent that the work is performed 
outside the United States by employees who were not recruited within the 
United States. (See FAR 22.1408(a)(1) for the meaning of ``United 
States'' as used herein.)

[[Page 193]]



3522.1403  Waivers.

    (a) The Administrator of the Panama Canal Commission is the ``agency 
head'' or the ``head of a civilian agency'' for purposes of the 
provisions of FAR 22.1403 (a) and (b)(1), respectively.
    (c) Requests for waivers shall be forwarded through the cognizant 
HCA to the Administrator for approval.



3522.1406  Complaint procedures.

    Complaints regarding administration of the Act shall be forwarded to 
the cognizant HCA prior to submission to the OFCCP.



PART 3524_PROTECTION OF PRIVACY AND FREEDOM OF INFORMATION--Table of Contents




             Subpart 3524.1_Protection of Individual Privacy

Sec.
3524.102 General.

                Subpart 3524.2_Freedom of Information Act

3524.270 Procedures.

    Authority: 40 U.S.C. 486(c).



             Subpart 3524.1_Protection of Individual Privacy



3524.102  General.

    Personal information obtained by the agency to be used in 
determining an individual's right to a benefit, or to otherwise incur an 
obligation, will be solicited directly from the subject of the record to 
the extent practicable. The system manager responsible for the 
maintenance and dissemination of personal information about individuals 
shall ensure that the information is collected and disclosed in 
compliance with the provisions of the Privacy Act of 1974 and part 10 of 
35 CFR, this agency's regulations implementing the Act.

[55 FR 7653, Mar. 2, 1990]



                Subpart 3524.2_Freedom of Information Act



3524.270  Procedures.

    Freedom of Information Act (FOIA) requests for contractual 
information shall be processed in accordance with part 9 of 35 CFR.
    (a) Upon receipt, all FOIA requests shall be forwarded immediately 
to the Agency Records Officer (Chief, Administrative Services Division) 
for acknowledgment and processing within the statutory time limitations 
as stipulated in the Act.
    (b) Prior to release of any contractual information to FOIA 
requesters, the Agency Records Officer shall coordinate with other 
agency offices or officials having a substantial subject matter 
interest.

[55 FR 7653, Mar. 2, 1990]



PART 3525_FOREIGN ACQUISITION--Table of Contents




Sec.
3525.000 Scope of part.

                Subpart 3525.1_Buy American Act_Supplies

3525.102 Policy.

         Subpart 3525.2_Buy American Act_Construction Materials

3525.202 Policy.

               Subpart 3525.3_Balance of Payments Program

3525.300-70 Applicability.
3525.302 Policy.

     Subpart 3525.4_Purchases Under the Trade Agreements Act of 1979

3525.402 Policy.

         Subpart 3525.670_Customs and Duties, Republic of Panama

3525.670-1 Policy.
3525.670-2 Procedures.

        Subpart 3525.8_International Agreements and Coordination

3525.801 International agreements.
3525.801-70 Language.
3525.801-71 Choice of law.
3525.801-72 Immunity.
3525.801-73 Designated contractors.
3525.801-74 Panamanian preference.
3525.801-75 Customary local business usage.
3525.801-76 Contract clauses.


[[Page 194]]


    Authority: 40 U.S.C. 486(c); Article VIII of the Panama Canal Treaty 
of 1977 and Articles IX, XI, and XVI of the Agreement in Implementation 
of Article III of the Panama Canal Treaty of 1977.

    Source: 55 FR 7654, Mar. 2, 1990, unless otherwise noted.



3525.000  Scope of part.

    This part provides policies and procedures related to the 
application of the Buy American Act, the Balance of Payments Act, and 
purchases under the Trade Agreements Act of 1979 to Commission 
acquisitions. This part also provides policies and procedures for the 
application of international agreements to Commission acquisitions.



                Subpart 3525.1_Buy American Act_Supplies



3525.102  Policy.

    The Buy American Act does not apply to purchases of supplies, or 
services that involve the furnishing of supplies, for use in the 
Republic of Panama because such use is outside the United States, as 
provided in FAR 25.102(a)(1).

[55 FR 7654, Mar. 2, 1990; 55 FR 38331, Sept. 18, 1990]



         Subpart 3525.2_Buy American Act_Construction Materials



3525.202  Policy.

    The Buy American Act does not apply to contracts for the 
construction, alteration, or repair of any public building or public 
work in the Republic of Panama. The Act applies only to acquisitions for 
use inside the United States, as provided in FAR 25.202.



               Subpart 3525.3_Balance of Payments Program



3525.300-70  Applicability.

    In accordance with Article IX of the Agreement in Implementation of 
Article III of the Panama Canal Treaty, the Balance of Payments 
provisions limiting purchase of foreign products or services shall not 
apply to purchases for use by the Commission of--
    (a) Articles, materials, or supplies that are produced in Panama 
(mined, produced, or manufactured);
    (b) End products, the largest percentage of which are components of 
Panamanian origin; and
    (c) Services which are available in Panama.



3525.302  Policy.

    (a) The cognizant HCA is the official designated to make the 
determination required by FAR 25.302(b)(3) that a requirement can only 
be filled by a foreign end product or service, and that it is not 
feasible to forego filling it or to provide a domestic substitute.
    (b)(6) The Procurement Executive is the official designated to make 
the determination, with the assistance of legal counsel, that the 
acquisition of foreign end products or services is required by a treaty 
or executive agreement between governments.



     Subpart 3525.4_Purchases Under the Trade Agreements Act of 1979



3525.402  Policy.

    (c) Pursuant to a delegation from the United States Trade 
Representative under the authority provided by section 302(b)(2) of the 
Trade Agreements Act, the Administrator of the Panama Canal Commission 
is authorized to waive, on a case-by-case basis, the purchasing 
prohibition of section 302(a)(1) of the Act. The Administrator has 
delegated this waiver authority to the Procurement Executive.



         Subpart 3525.670_Customs and Duties, Republic of Panama



3525.670-1  Policy.

    (a) Article XVI of the Agreement in Implementation of Article III of 
the Panama Canal Treaty provides that all property imported into the 
Republic of Panama for the official use or benefit of the Commission, 
including that imported by its contractors or subcontractors in 
connection with the various activities authorized under said Agreement, 
shall be exempt from the payment of all customs duties or other import 
taxes and charges and from all license requirements.

[[Page 195]]

    (b) All property imported into the Republic of Panama free of 
customs duties and other taxes may be exported free of customs duties, 
export permits, export taxes, and other assessments. All property 
acquired in the Republic of Panama by, or in the name of, the Commission 
may be exported free of customs duties, export licenses, and other 
export taxes or charges.



3525.670-2  Procedures.

    When requested by the contractor or its representative, the 
contracting officer will initiate a cargo certification document stating 
that the property being imported is for the official use or benefit of 
the Commission. The cargo certification document is then processed by 
the Cargo Documentation Section of the Commission's Administrative 
Services Division for presentation by the contractor or representative 
to the appropriate authorities in the Republic of Panama.



        Subpart 3525.8_International Agreements and Coordination



3525.801  International agreements.

    The Panama Canal Treaty and the Agreement in Implementation of 
Article III of the Treaty affect the contracting activities of the 
Commission. Contracting officers shall give particular attention to the 
provisions in these agreements that pertain to acquisition procedures, 
contractors' taxes, facilities, and other matters relating to 
contracting.



3525.801-70  Language.

    (a) Solicitations and contracts shall be issued in the English 
language.
    (b) All offers, correspondence and documents related to 
solicitations and contracts shall be submitted in the English language.
    (c) Where inconsistencies between the terms of solicitations or 
contracts and any translation into another language occur, the English 
language meaning shall control.



3525.801-71  Choice of law.

    All matters relating to the validity, construction, interpretation, 
performance, and enforcement of any contract awarded by the Commission 
shall be determined in accordance with the applicable Federal law of the 
United States.



3525.801-72  Immunity.

    Under Article VIII of the Treaty, agencies and instrumentalities of 
the Government of the United States of America operating in the Republic 
of Panama pursuant to the Treaty and related agreements shall be immune 
from the jurisdiction of the Republic of Panama, and their 
installations, official archives and documents, shall be inviolable.



3525.801-73  Designated contractors.

    (a) Definition.
    Designated contractors means:
    (1)(i) Natural persons who are nationals or permanent residents of 
the United States, or
    (ii) Corporations or other legal entities organized under the laws 
of the United States, any state thereof, or the District of Columbia, 
and which are under the effective control of such natural persons--
    (A) To whom contracts are awarded by the Commission, and
    (B) Who are so designated in writing by the Commission.
    (2) The term also includes subcontractors of designated contractors:
    (i) Who are nationals or permanent residents of the United States, 
or
    (ii) Which are corporations or other legal entities organized under 
the laws of the United States, any state thereof, or the District of 
Columbia, and which are under the effective control of United States 
nationals or permanent residents.
    (3) Because Article XI of the Treaty's Implementing Agreement (see 
paragraph (b) of this subsection and 3502.101) imposes certain 
obligations and confers certain benefits on designated contractors, all 
of which are dependent upon their or their employees' physical presence 
in Panama, the term is understood to mean only those contractors and/or 
subcontractors that will perform all or a portion of the contract work 
in the Republic of Panama. Such contractors are normally designated at 
the time of contract award.

[[Page 196]]

    (b) Obligations and benefits. Designated contractors are subject to 
the laws and regulations of the Republic of Panama except for certain 
obligations and benefits established in Article XI of the Agreement in 
Implementation of Article III of the Treaty. These obligations and 
benefits are cited below.
    (1) The contractor must engage exclusively in activities related to 
the execution of the work for which the contractor has been contracted 
by the Commission or related to other works or activities authorized by 
the Republic of Panama.
    (2) The contractor must refrain from carrying out practices which 
may constitute violations of the laws of the Republic of Panama.
    (3) The contractor shall enter and depart from the territory of the 
Republic of Panama in accordance with procedures prescribed for United 
States citizen employees in Article XII of the Implementing Agreement.
    (4) The contractor must obtain a document indicating his/her 
identity as a contractor, which the proper authorities of the United 
States shall issue when they are satisfied that the contractor is duly 
qualified. This certificate shall be sufficient to permit the contractor 
to operate under Panamanian law as a contractor of the United States. 
Nevertheless, the authorities of the Republic of Panama may require the 
registration of the appropriate documents to establish juridical 
presence in the Republic of Panama.
    (5) The contractor shall not be obliged to pay any tax or other 
assessment to the Republic of Panama on income derived under a contract 
with the Commission, so long as the contractor is taxed in the United 
States at a rate substantially equivalent to the corresponding taxes and 
assessments of the Republic of Panama.
    (6) The contractor may move freely within the Republic of Panama, 
and shall have exemptions from customs duties and other charges, as 
provided for United States citizen employees in the Implementing 
Agreement.
    (7) The contractor may use public services and installations in 
accordance with the terms and conditions of Article XIII of the 
Implementing Agreement and, on a non-discriminatory basis, shall pay the 
Republic of Panama highway tolls and taxes on plates for private 
vehicles.
    (8) The contractor shall be exempt from any taxes imposed on 
depreciable assets belonging to the contractor, other than real estate, 
which are used exclusively for the execution of contracts with the 
United States.
    (9) The contractor may use the services and facilities provided for 
in Articles X and XVIII of the Agreement in Implementation of Article IV 
of the Panama Canal Treaty, to the extent such use is authorized by the 
United States; provided, however, that after five years from the entry 
into force of the Implementing Agreement, the use of military postal 
services by such contractors shall be limited to that related to the 
execution of contracts with the United States.
    (c) Notification of designation. The contracting officer shall, 
through the Director, Office of Executive Administration, advise 
contractors that they are ``designated contractors'' within the meaning 
of Article XI of the Implementing Agreement and advise them to review 
their obligations thereunder. Such designations shall be communicated to 
the authorities of the Republic of Panama by the authorities of the 
United States. Contracting officers shall maintain current lists of 
``designated contractors'' at all times.
    (d) Withdrawal of designation. The Commission shall withdraw the 
designation of a contractor when any of the following circumstances 
occur:
    (1) Completion or termination of the contract with the Commission.
    (2) Proof that during the life of the contract such contractors have 
engaged in the Republic of Panama in business activities not related to 
their contracts with the United States nor authorized by the Republic of 
Panama.
    (3) Proof that such contractors are engaged in practices which in 
the view of the Republic of Panama constitute serious violations of the 
laws of the Republic of Panama.


[[Page 197]]



The authorities of the United States shall notify the authorities of the 
Republic of Panama whenever the designation of a contractor has been 
withdrawn. If, within sixty days after notification of the withdrawal of 
the designation of a contractor who entered the territory of the 
Republic of Panama in the capacity of a contractor, the authorities of 
the Republic of Panama require such contractor to leave its territory, 
the United States shall ensure that the Republic of Panama shall not 
incur any expense due to the cost of transportation.
    (e) Impact on subcontractors, employees, and dependents. The 
provisions of this 3525.801-73 shall similarly apply to the 
subcontractors and to the employees of the contractors and 
subcontractors and their dependents who are nationals or residents of 
the United States. These employees and dependents shall not be subject 
to the Panamanian Social Security system.



3525.801-74  Panamanian preference.

    (a) Article IX of the Agreement in Implementation of Article III of 
the Treaty provides that:

    In procuring supplies and services, the Commission shall give 
preference to those obtainable in the Republic of Panama. Such 
preference shall apply to the maximum extent possible when such supplies 
and services are available as required, and are comparable in quality 
and price to those which may be obtained from other sources. For the 
comparison of prices there shall be taken into account the cost of 
transport to the Republic of Panama, including freight, insurance and 
handling, of the supplies and services which compete with Panamanian 
supplies and services. In the acquisition of goods in the Republic of 
Panama, preference shall be given to goods having a larger percentage of 
components of Panamanian origin.

    (b) Part 3570 provides guidance on the implementation of the 
Panamanian preference provisions of the Treaty's Implementing Agreement.



3525.801-75  Customary local business usage.

    In acquisitions conducted in the Republic of Panama, customary local 
business usage, where not inconsistent with the applicable Federal law 
of the United States, may be followed. When conflicts develop between 
local business usage and the requirements of the Federal Acquisition 
Regulation, the matter shall be referred to the Procurement Executive, 
who shall seek the opinion of legal counsel, as a deviation for 
processing as required by 3501.405 and FAR 1.405.



3525.801-76  Contract clauses.

    As used in this subsection, the term ``foreign'' means any country 
other than the United States. The contracting officer shall insert the 
following clauses in solicitations and contracts, as indicated below:
    (a) In lieu of FAR clause 52.225-14, Inconsistency Between English 
Version and Translation of Contract, the clause at 3552.225-70, 
Language, whenever foreign offers are anticipated or contracts are 
awarded to foreign contractors.
    (b) The clause at 3552.225-71, Notice of Applicability of United 
States Federal Law, whenever foreign offers are anticipated or contracts 
are awarded to foreign contractors.
    (c) The clause at 3552.225-72, Designated Contractors, whenever the 
contract work is to be performed in whole or in part in the Republic of 
Panama and offers are anticipated from, or contracts are awarded to, 
U.S. contractors.
    (d) The clause at 3552.225-73, Responsibility for Observance of 
Laws, Orders, and Regulations, whenever the contract work is to be 
performed in whole or in part in the Republic of Panama.

[[Page 198]]



              SUBCHAPTER E_GENERAL CONTRACTING REQUIREMENTS





PART 3527_PATENTS, DATA AND COPYRIGHTS--Table of Contents




    Authority: 40 U.S.C. 486(c).



         Subpart 3527.3_Patent Rights Under Government Contracts



3527.304-3  Contracts for construction work or architect-engineer services.

    (b) The contracting officer shall insert the clause at 3552.227-70, 
Government Rights, in all solicitations and contracts for architect-
engineer services or for construction involving architect-engineer 
services, except those that call for or can be expected to involve only 
``standard types of construction'' to be built by previously developed 
equipment, methods, and processes. (See FAR 27.304-3(b) for the meaning 
of the term ``standard types of construction''.)

[55 FR 7656, Mar. 2, 1990]



PART 3528_BONDS AND INSURANCE--Table of Contents




                          Subpart 3528.1_Bonds

Sec.
3528.100 Scope of subpart.
3528.101 Bid or proposal guarantees.
3528.101-3 Contract clauses.
3528.102 Performance and payment bonds for construction contracts.
3528.102-1 General.
3528.102-3 Solicitation requirements.
3528.103 Performance and payment bonds for other than construction 
          contracts.
3528.103-2 Performance bonds.
3528.103-3 Payment bonds.
3528.103-70 Contract clauses.

                         Subpart 3528.2_Sureties

3528.201 Requirements for sureties.
3528.202 Acceptability of corporate sureties.
3528.202-70 Corporate seals.

                        Subpart 3528.3_Insurance

3528.301 Policy.
3528.305 Overseas workers' compensation and war-hazard insurance.
3528.309 Contract clause for workers' compensation insurance.
3528.370 Contract clause for special Panama insurance.

    Authority: 40 U.S.C. 486(c); Article XVIII of the Agreement in 
Implementation of Article III of the Panama Canal Treaty of 1977.

    Source: 55 FR 7656, Mar. 2, 1990, unless otherwise noted.



                          Subpart 3528.1_Bonds



3528.100  Scope of subpart.

    Bid or proposal guarantees, performance bonds, and payment bonds in 
Panama Canal Commission acquisitions may be required in contracts for 
construction as that term is defined at FAR 36.102, and in contracts for 
other than construction as explained at FAR 28.103.



3528.101  Bid or proposal guarantees.



3528.101-3  Contract clauses.

    (a) When a guarantee is required, the contracting officer shall 
insert the clause at 3552.228-70, Bid Guarantee Amount, in sealed bid 
solicitations and contracts, or the clause at 3552.228-75, Proposal 
Guarantee, in negotiated solicitations and contracts, as applicable.
    (b) If the contract is to be negotiated, the contracting officer 
shall insert the clause at 3552.228-75, Proposal Guarantee, in lieu of 
the bid guarantee clause at FAR 52.228-1.



3528.102  Performance and payment bonds for construction contracts.



3528.102-1  General.

    (a) The Miller Act (40 U.S.C. 270a-270f) requires performance and 
payment bonds for any construction contract (including contracts for 
alteration, or repair of any public building or public work) exceeding 
$25,000, except that this requirement may be waived by the contracting 
officer for work to be performed in a foreign country upon the finding 
contemplated in FAR 28.102-1(a)(1). It has been determined by the Panama 
Canal Commission General Counsel, however, that the contracting officer 
may also establish requirements for such bonds for lesser dollar value 
contracts when it

[[Page 199]]

has been determined that the financial protection against damages is in 
the best interests of the Government. Accordingly, the provisions of 
3528.102-3 regarding solicitation requirements must be followed.



3528.102-3  Solicitation requirements.

    When performance or payment bonds are required, the contracting 
officer shall insert the clauses at 3552.228-71, Bonds and Insurance, 
and 3552.228-72, Bonds, in the solicitation and contract.



3528.103  Performance and payment bonds for other than construction contracts.



3528.103-2  Performance bonds.

    (a) Contracts for high dollar acquisitions of vital supplies, such 
as cargo lot shipments of Bunker C fuel oil, is another situation that 
may warrant a performance bond.



3528.103-3  Payment bonds.

    (a) A payment bond may be considered to be in the Government's 
interest when substantial progress payments are made before delivery of 
end items starts (for example, in the acquisition of tugboats and 
dredges).



3528.103-70  Contract clauses.

    (a) Performance bonds. When a performance bond for other than 
construction contracts is required pursuant to FAR 28.103-2(a), but a 
payment bond is not required, the contracting officer shall insert the 
clause at 3552.228-76, Performance Bond, in all such solicitations and 
contracts. If a payment bond is also required (see FAR 28.103-3(a) and 
3528.103-3(a)), the contracting officer shall insert the clause at 
3552.228-77, Performance and Payment Bonds, in lieu of clause 3552.228-
76.
    (b) Payment bonds. When a payment bond for other than construction 
contracts is required pursuant to FAR 28.103-3(a) and 3528.103-3(a), the 
contracting officer shall insert the clause at 3552.228-77, Performance 
and Payment Bonds, in all such solicitations and contracts.



                         Subpart 3528.2_Sureties



3528.201  Requirements for sureties.

    (a) In addition to those acceptable forms of security enumerated in 
FAR 28.201, contracting officers may accept such Panamanian sureties as 
may be approved in accordance with 3528.202(b).
    (b) Contracting officers may not preclude the use by any offeror of 
any type of security or surety permitted by FAR subpart 28.2 or this 
subpart.

[55 FR 7656, Mar. 2, 1990; 55 FR 38331, Sept. 18, 1990]



3528.202  Acceptability of corporate sureties.

    (b) The authority delegated to contracting officers in FAR 28.202(b) 
to determine the acceptability of sureties not appearing on Treasury 
Department Circular 570 for contracts performed in a foreign country is 
vested in the Chief Financial Officer of the Panama Canal Commission. 
The procedure for approving such sureties is prescribed in the 
Commission's Financial Systems Manual 99.333.

[55 FR 7656, Mar. 2, 1990. Redesignated and amended at 55 FR 38331, 
Sept. 18, 1990]



3528.202-70  Corporate seals.

    (a) In the event that a ``Corporate Seal,'' as required in the 
instructions for preparation of any standard form or document, is not 
used due to the dictates of custom, practice, or law within Panama or 
other foreign countries, such bonds shall be accepted provided the 
contracting officer is satisfied, with the concurrence of legal counsel, 
that the person signing the bond is authorized to bind the surety (see 
FAR 4.102).
    (b) In the case of acquisitions conducted using the sealed bid 
method described in FAR part 14, bids which do not include required bid 
bonds must be rejected as nonresponsive except as provided in FAR 
28.101-4. See also FAR 14.405 regarding minor informalities or 
irregularities in bids.



                        Subpart 3528.3_Insurance



3528.301  Policy.

    (b) In addition to the requirements of FAR 28.301(b), designated 
contractors

[[Page 200]]

(see 3525.801-73(a)), as prescribed at paragraph 7 of Article XVIII of 
the Agreement in Implementation of Article III of the Panama Canal 
Treaty of 1977, shall, upon initiation of work or construction 
activities, obtain appropriate insurance to cover civil liabilities in 
the Republic of Panama that may arise as a result of acts or omissions 
done in the performance of official duty by their employees. The 
insurance coverage shall include coverage for the tortious conduct of 
their employees. Such insurance may be obtained from insurance companies 
licensed to engage in such business within the Republic of Panama.



3528.305  Overseas workers' compensation and war-hazard insurance.

    (d) Pursuant to a waiver granted by the Secretary of Labor, 
effective January 22, 1980, the provisions of the Defense Base Act are 
not applicable to any public-work contract awarded by the Panama Canal 
Commission in the Panama Canal area with respect to non-U.S. citizen 
employees, i.e., any Panamanian or other foreign national, employed 
under such contracts. The waiver does not apply, however, to employees 
who are:
    (1) Hired in the United States by any contractor;
    (2) Residents of the United States; or
    (3) Citizens of the United States.

The waiver was granted with the proviso that the non-U.S. citizen 
employees thus exempted from the provisions of the Defense Base Act will 
be provided workers' compensation benefits prescribed in the Panamanian 
Social Security System.



3528.309  Contract clause for workers' compensation insurance.

    (a) In addition to FAR clause 52.228-3, Workers' Compensation 
Insurance (Defense Base Act), prescribed at FAR 28.309(a)(1), the 
contracting officer shall insert the clause at 3552.228-73, Non-U.S. 
Workers' Compensation Insurance, in all public-work solicitations and 
contracts in which the employment of Panamanian or other foreign 
nationals is anticipated (see 3528.305(d)).



3528.370  Contract clause for special Panama insurance.

    The contracting officer shall insert the clause at 3552.228-74, 
Special Panama Insurance, in all public-work solicitations and 
contracts:
    (a) Which are to be performed in whole or in part in the Republic of 
Panama, and
    (b) For which offers are anticipated from, or contracts are awarded 
to, U.S. contractors.



PART 3529_TAXES--Table of Contents




                     Subpart 3529.4_Contract Clauses

Sec.
3529.402 Foreign contracts.
3529.402-1 Foreign fixed-price contracts.

    Authority: 40 U.S.C. 486(c); Articles XI and XII of the Agreements 
in Implementation of Articles III and IV of the Panama Canal Treaty of 
1977, respectively.



                     Subpart 3529.4_Contract Clauses



3529.402  Foreign contracts.



3529.402-1  Foreign fixed-price contracts.

    (a) Procedures regarding FAR clause 52.229-6. In recognition of the 
fundamental purpose of paragraph 2(e) of Articles XI and XII of the 
Agreements in Implementation of Articles III and IV of the Panama Canal 
Treaty of 1977, respectively, representatives of the Governments of the 
United States and Panama approved an Agreement on Taxation of 
Contractors on August 6, 1986. This taxation agreement impacts on U.S. 
contractors in certain circumstances. In order to alert prospective 
contractors to this possibility, the following procedures shall apply 
regarding FAR clause 52.229-6:
    (1) The contracting officer shall supplement FAR clause 52.229-6, 
Taxes--Foreign Fixed-Price Contracts, by inserting the following note at 
the end of the clause in all solicitations and contracts, unless the 
acquisition is a small purchase under FAR part 13 that:
    (i) Will not require the contractor's presence in Panama, or
    (ii) Does not solicit U.S. offerors:
    Note: If the Contractor is a U.S. contractor, such contractor is 
advised that, pursuant to a taxation agreement between the

[[Page 201]]

Governments of the United States and Panama, U.S. contractors and 
subcontractors, including their U.S. citizen or U.S. permanent resident 
employees, may be required to file tax returns with, as well as provide 
corresponding U.S. tax information to, the Government of Panama on 
income arising under or relating to Panama Canal Commission contracts. 
This requirement is applicable when the contractor, subcontractor, or 
individual employee is present in the Republic of Panama in connection 
with one or more Commission contracts for more than 90 calendar days 
during the relevant tax year. This description of the stated requirement 
is not intended, nor should it be construed, to be a legal analysis of 
the taxation agreement. The Commission assumes no responsibility or 
liability for a contractor's or individual's obligation under the 
taxation agreement, nor for the interpretation of such agreement. A copy 
of the taxation agreement will be provided to the contractor or 
prospective contractor upon request to the contracting officer.
    (2) If clause 52.229-6 is incorporated by reference, rather than in 
full text, insert the note directly below the title of the clause.
    (3) Include elsewhere in the body of the solicitation the following 
note to alert offerors that clause 52.229-6 has been supplemented. In 
supply and service solicitations, this note should normally be inserted 
in Section B following the blanks provided for offerors to insert line 
item prices. In construction solicitations, the note should normally be 
attached to Standard Form 1442 or inserted in the solicitation's Special 
Conditions. In small purchase acquisitions, the note is to be included 
in the document requesting prices or by separate attachment to the 
document. If a U.S. contractor wins the small purchase award, the note 
shall be incorporated either (i) in full text, or (ii) by reference, on 
the purchase order or other award document.
    Note: Offerors' attention is directed to the note added at the end 
of clause 52.229-6, Taxes--Foreign Fixed-Price Contracts. The note is an 
advisory notice regarding possible tax obligations under certain 
circumstances of U.S. contractors, subcontractors, and their employees 
to the Government of Panama. If the circumstances appear to be 
applicable, offerors may obtain additional information by contacting the 
contracting office at the address or phone number provided elsewhere in 
this solicitation.
    (4) If additional information regarding the taxation agreement is 
requested of Panama Canal Commission employees, either before or after 
award, the individual who receives the request shall promptly notify the 
contracting officer and the Office of General Counsel who shall 
determine, in conjunction with the Office of Executive Administration, 
the appropriate action to be taken.
    (5) Contracting officers shall serve as the official liaison, for 
purposes of the taxation agreement, between offerors/contractors and the 
Commission. The taxation agreement provides for the classification of 
contractors into two categories, resident and non-resident, by 
representatives of the Governments of the United States and Panama 
according to criteria set forth in the agreement. The representative of 
the United States Government is the Assistant Director, Policy and 
Programs, Office of Executive Administration. Classifications, when 
confirmed by the two representatives, will be communicated to the 
respective contractors by the contracting officer.

[55 FR 7657, Mar. 2, 1990]



PART 3531_CONTRACT COST PRINCIPLES AND PROCEDURES--Table of Contents




    Authority: 40 U.S.C. 486(c).



         Subpart 3531.2_Contracts with Commercial Organizations



3531.205-46  Travel costs.

    (a) Fixed-price type contracts that provide for separate 
reimbursement of travel and per diem shall state that such reimbursement 
will not exceed rates established in applicable Federal Travel 
Regulations.
    (b) The clause at 3552.231-70, Travel Costs, shall be included in 
contracts as described in paragraph (a) of this subsection.

[55 FR 7658, Mar 2, 1990]



PART 3532_CONTRACT FINANCING--Table of Contents




Sec.
3532.000 Scope of part.

[[Page 202]]

                         Subpart 3532.1_General

3532.111 Contract clauses.

                     Subpart 3532.4_Advance Payments

3532.402 General.
3532.407 Interest.

                      Subpart 3532.6_Contract Debts

3532.600 Scope of subpart.
3532.601 Definition.
3532.602 General.
3532.603 Applicability.
3532.608 Negotiation of contract debts.
3532.608-70 Procedures.
3532.610 Demand for payment of contract debt.

                     Subpart 3532.7_Contract Funding

3532.705 Contract clauses.
3532.705-1 Clauses for contracting in advance of funds.

                   Subpart 3532.8_Assignment of Claims

3532.802 Conditions.
3532.806 Contract clause.

                      Subpart 3532.9_Prompt Payment

3532.901 Applicability.

    Authority: 40 U.S.C. 486(c).

    Source: 55 FR 7658, Mar. 2, 1990, unless otherwise noted.



3532.000  Scope of part.

    This part implements and supplements FAR part 32 and provides 
Commission policies and procedures for contract financing and other 
payment matters, including--
    (a) Advance payments;
    (b) Contract debts;
    (c) Assignment of claims; and
    (d) Prompt payment implementation.



                         Subpart 3532.1_General



3532.111  Contract clauses.

    (a)(7) The clause at 3552.232-70, Contract Payments, in 
solicitations and contracts for construction when the contracting 
officer determines that the value of materials delivered to the work 
site may be taken into account in preparing the progress payment 
estimate.
    (8) The clause at 3552.232-73, Invoices, in all solicitations and 
contracts except small purchases. The clause or a modified version of 
the clause may be used in small purchases.



                     Subpart 3532.4_Advance Payments



3532.402  General.

    (e)(1) The Procurement Executive is responsible for approving 
findings and determinations supporting the use of advance payments and 
approving contract terms concerning advance payments. These approvals 
must have the concurrence of the General Counsel.
    (2) The contracting officer shall coordinate proposed advance 
payment authorizations with the Accounting Division.



3532.407  Interest.

    (d) The Procurement Executive is authorized to approve advance 
payments without interest.



                      Subpart 3532.6_Contract Debts



3532.600  Scope of subpart.

    This subpart assigns responsibilities and provides procedures for 
the collection of contract debts, including collection of debts under 
contracts for the transportation of household goods.



3532.601  Definition.

    Responsible official, as used in this subpart, means the contracting 
officer.



3532.602  General.

    In addition to the examples cited in FAR 32.602, contract debts may 
include those arising from claims under contracts for the transportation 
of household goods.



3532.603  Applicability.

    When the Commission withholds payments due a contractor to satisfy a 
contractor's debt to the Government, the Debt Collection Act of 1982 and 
FAR subpart 32.6 apply. As a claim arising under a Government contract, 
any offset is governed by the Contract Disputes Act of 1979.

[[Page 203]]



3532.608  Negotiation of contract debts.



3532.608-70  Procedures.

    The Commission shall adhere to the following procedures prior to 
withholding a payment due a contractor to satisfy a debt owed by the 
contractor.
    (a) The Commission shall use all proper means available for 
collecting a contract debt as rapidly as possible. This includes direct 
communication to obtain full payment or to negotiate an appropriate 
settlement.
    (b) If the contractor fails to respond expeditiously and in good 
faith to contacts from the contracting officer, and if justifiable under 
the contract, the contracting officer shall promptly make a unilateral 
determination of the amount the contractor owes the Commission. The 
unilateral debt determination is made when neither payment nor a 
settlement has been reached. The unilateral debt determination is issued 
to the contractor by the contracting officer as a final decision under 
the Contract Disputes Act.
    (c) A demand for payment of the contract debt shall be made 
contemporaneously with the contracting officer's issuance of the 
unilateral debt determination to the contractor.



3532.610  Demand for payment of contract debt.

    (b) Demands for payment shall include, in addition to those items 
listed in FAR 32.610(b), the following:
    (1) The offer of an opportunity to inspect and copy the records of 
the Commission related to the debt, 31 U.S.C. 3716(a)(2).
    (2) The offer of an opportunity of a review of the Commission's 
decision relating to the debt, 31 U.S.C. 3716(3).
    (3) The offer of an opportunity to enter into an agreement with the 
Commission to repay the amount of the debt.
    (c) With respect to contracts for the transportation of household 
goods, claims by employees and, in turn, by the Commission, must be 
processed in a timely manner. The usual commercial terms for bills of 
lading require that any claim be filed against the contractor within 
nine months of shipment delivery. Government bills of lading are subject 
to these same rules and conditions. FAR clause 52.247-23, which is 
included in contracts for the transportation of household goods, 
specifies that the contractors will be notified of any damages within a 
maximum of 45 days from date of delivery.



                     Subpart 3532.7_Contract Funding



3532.705  Contract clauses.



3532.705-1  Clauses for contracting in advance of funds.

    In lieu of either of the clauses prescribed at FAR 32.705-1(a) and 
(b), the contracting officer may insert the clause at 3552.232-71, 
Availability of Funds, in solicitations and contracts--
    (a) That are to be awarded in one fiscal year with performance to 
begin in the following fiscal year, or
    (b) That are to extend into the following fiscal year, or
    (c) In situations when the circumstances in paragraphs (a) and (b) 
of this subsection both apply.



                   Subpart 3532.8_Assignment of Claims



3532.802  Conditions.

    (b) Panamanian firms may assign contracts to a local bank in 
accordance with recognized local banking practice.



3532.806  Contract clause.

    (a) In addition to the clauses prescribed in FAR 32.806, the 
contracting officer may insert the clause at 3552.232-72, Presentation 
of Statement of Release from Claims, in solicitations and contracts when 
appropriate, unless the contract will prohibit the assignment of claims.



                      Subpart 3532.9_Prompt Payment



3532.901  Applicability.

    In consonance with subpart 3570.1, Panamanian Preference, the 
Administrator has determined, pursuant to FAR 32.904, to extend coverage 
of the interest penalty provisions of FAR subpart 32.9 to contracts 
awarded to Commission vendors located in the Republic of Panama.

[[Page 204]]



PART 3533_PROTESTS, DISPUTES, AND APPEALS--Table of Contents




Sec.
3533.000 Scope of part.

                         Subpart 3533.1_Protests

3533.103 Protests to the agency.
3533.104 Protests to GAO.

                   Subpart 3533.2_Disputes and Appeals

3533.203 Applicability.

    Authority: 40 U.S.C. 486(c).

    Source: 55 FR 7659, Mar. 2, 1990, unless otherwise noted.



3533.000  Scope of part.

    This part prescribes Commission policies and procedures for filing 
protests and for processing contract disputes and appeals.



                         Subpart 3533.1_Protests



3533.103  Protests to the agency.

    (a) The cognizant Head of the Contracting Activity is the official 
designated to make the determination(s) required by FAR 33.103(a)(1), 
(2), or (3) whenever an award is contemplated notwithstanding the 
protest to the agency.
    (c)(1) Protests to the Commission based upon alleged improprieties 
in a solicitation which are apparent prior to bid opening or the closing 
date for receipt of initial proposals shall be filed with the 
contracting officer prior to bid opening or the closing date for receipt 
of initial proposals, or any extended bid opening or closing date for 
receipt of proposals.
    (2) All other protests to the Commission shall be filed with the 
contracting officer not later than 10 working days after the basis of 
the protest is known or should have been known.
    (d) The General Counsel shall review protests to the Commission as a 
matter of first priority, and advise the contracting officer 
expeditiously.
    (e) The contracting officer shall decide protests to the Commission 
within 10 working days from receipt of a protest and promptly inform the 
protestor and other interested parties of that decision.



3533.104  Protests to GAO.

    (a) General. Protests to the General Accounting Office (GAO) 
concerning Commission acquisitions shall be processed in accordance with 
FAR 33.104. The General Counsel shall prepare the report to GAO required 
at FAR 33.104(a)(5) and shall serve as the designated contact office for 
GAO. The contracting officer shall review protests to GAO as a matter of 
first priority, and shall advise, support, and furnish information to 
the General Counsel expeditiously.



                   Subpart 3533.2_Disputes and Appeals



3533.203  Applicability.

    Pursuant to an interagency agreement between the Panama Canal 
Commission and the Corps of Engineers Board of Contract Appeals 
(ENGBCA), the ENGBCA will hear appeals from final decisions of 
Commission contracting officers issued pursuant to the Contract Disputes 
Act.

[[Page 205]]



             SUBCHAPTER F_SPECIAL CATEGORIES OF CONTRACTING





PART 3536_CONSTRUCTION AND ARCHITECT-ENGINEER CONTRACTS--Table of Contents




                         Subpart 3536.1_General

Sec.
3536.101 Applicability.
3536.103 Methods of contracting.

     Subpart 3536.2_Special Aspects of Contracting for Construction

3536.201 Evaluation of contractor performance.
3536.203 Government estimate of construction costs.
3536.207 Pricing fixed-price construction contracts.
3536.207-70 Use of indefinite-delivery contracts.
3536.209 Construction contracts with architect-engineer firms.
3536.270 Special aspects of contracting for construction in Panama.
3536.270-1 General.
3536.270-2 Special contract considerations.

    Subpart 3536.3_Special Aspects of Sealed Bidding in Construction 
                               Contracting

3536.303 Invitations for bids.
3536.370 Additive items.
3536.371 Solicitation provisions.

                Subpart 3536.5_Contract Clauses and Form

3536.570 Special Panama Canal Commission contract clauses.
3536.571 Special Panama Canal Commission form.

               Subpart 3536.6_Architect-Engineer Services

3536.602 Selection of firms for architect-engineer contracts.
3536.602-2 Evaluation boards.
3536.602-4 Selection authority.
3536.602-5 Short selection processes for contracts not to exceed 
          $10,000.
3536.604 Performance evaluation.
3536.605 Government cost estimate for architect-engineer work.
3536.606 Negotiations.
3536.606-70 Modifications.
3536.670 Government rights to plans, specifications, and drawings.

    Authority: 40 U.S.C. 486(c).

    Source: 55 FR 7660, Mar. 2, 1990, unless otherwise noted.



                         Subpart 3536.1_General



3536.101  Applicability.

    (a) Construction, which includes alteration, maintenance, and repair 
of real property, and architect-engineer contracts are subject to the 
requirements in other parts of this regulation, which shall be followed 
when applicable.
    (b) When a requirement in this part is inconsistent with a 
requirement in another part of this regulation, this part 3536 shall 
take precedence if the acquisition of architect-engineer services is 
involved.



3536.103  Methods of contracting.

    (a) Notwithstanding the exception in FAR 36.103(a) for contracts to 
be performed outside the United States, construction in Panama shall be 
acquired using sealed bid procedures, unless one of the four conditions 
in FAR 6.401(a) cannot be met. In that event, the contracting officer 
shall document the contract file in accordance with FAR 6.401.
    (b) Contracting officers shall acquire architect-engineer services 
by negotiation, and select sources in accordance with applicable law, 
FAR subpart 36.6, and subpart 3536.6 of this regulation.



     Subpart 3536.2_Special Aspects of Contracting for Construction



3536.201  Evaluation of contractor performance.

    (a) Preparation of performance evaluation reports. The authorized 
representative of the contracting officer (COR) shall prepare the 
contractor performance report prescribed in FAR 36.201 within two weeks 
after final acceptance of the work or contract termination. Prior to 
submitting any report of unsatisfactory performance to the reviewing 
official, the COR shall advise the contractor of any proposed 
unsatisfactory rating and include any written comments from the 
contractor regarding such rating in the report (see FAR 36.201(a)(3)).

[[Page 206]]

    (b) Review of performance reports. The contracting officer shall 
review each performance report.
    (c) Distribution and use of performance reports. Information from 
the performance report shall not be released outside of the Commission, 
except to other Government agencies at their written request, and on 
condition that the information will not be made available outside the 
Government. Requests from non-Government sources for information from 
performance reports shall be processed in accordance with 35 CFR part 9.



3536.203  Government estimate of construction costs.

    (c) The overall amount of the Government's estimate shall not be 
disclosed prior to award under any circumstance to persons other than 
Commission personnel whose official duties, as determined by the 
contracting officer, require knowledge of the estimate.



3536.207  Pricing fixed-price construction contracts.



3536.207-70  Use of indefinite-delivery contracts.

    Any of the forms of indefinite-delivery contracts described in FAR 
subpart 16.5 may be used to contract for construction when deemed 
appropriate by the contracting officer.



3536.209  Construction contracts with architect-engineer firms.

    No contract for construction shall be awarded to the firm, or its 
subsidiaries or affiliates, that designed the project except with the 
approval of the Head of Contracting Activity.



3536.270  Special aspects of contracting for construction in Panama.



3536.270-1  General.

    In contracts which are entered into with Panamanian or other foreign 
contractors for performance in Panama, the term ``United States'' shall 
appear before the word ``Government.''



3536.270-2  Special contract considerations.

    When construction is to be performed in the Republic of Panama by 
designated United States contractors, Panamanian contractors, or others, 
the solicitation and contract should include references to the 
applicable laws, regulations, treaties, and agreements of the United 
States and the Republic of Panama (see subpart 3525.8) relating to:
    (a) The duty-free importation of material and equipment;
    (b) The payment of taxes applicable to contractors, personnel, 
materials, and equipment (see parts 3525 and 3529);
    (c) The applicability of workmen's compensation laws and other labor 
laws to citizens of the United States, citizens of Panama, and citizens 
of other countries (see subpart 3528.3);
    (d) The provision of utility services;
    (e) The provision of Commission or Government-owned materials or 
services;
    (f) The disposition of surplus materials and equipment;
    (g) The need for civil liability insurance for employees of 
contractors and subcontractors (see 3528.301);
    (h) The handling of claims and litigation;
    (i) The requirements for bid or proposal guarantees, performance 
bonds, and payment bonds (see subpart 3528.1);
    (j) Acceptability of sureties not listed in Treasury Department 
Circular 570 (see subpart 3528.2);
    (k) Consideration of Panamanian preference in accordance with part 
3570;
    (l) Any other special solicitation provisions prescribed in subpart 
3536.3; and
    (m) Any other problems which can be foreseen and appropriately 
resolved contractually.



    Subpart 3536.3_Special Aspects of Sealed Bidding in Construction 
                               Contracting



3536.303  Invitations for bids.



3536.370  Additive items.

    Prior to the issuance of an invitation for bids, the contracting 
officer shall ascertain that adequate funds have been certified as being 
available for the proposed acquisition. However, if funds

[[Page 207]]

appear to be insufficient for all features of the Government's 
requirement, the contracting officer shall insert in the invitation a 
solicitation provision for a base bid and one or more additive items, as 
prescribed at 3536.371(a) (7) or (8).



3536.371  Solicitation provisions.

    (a) The contracting officer shall insert the following provisions in 
invitations for bids for construction when applicable:
    (1) The provision at 3552.214-70, Price--Sealed Bidding, as 
prescribed at 3514.201-6(a)(1);
    (2) The provision at 3552.214-71, Additional Data To Be Submitted, 
as prescribed at 3514.201-6(b)(1);
    (3) The provision at 3552.214-72, Rejection of Bids, as prescribed 
at 3514.201-6(b)(2);
    (4) The provision at 3552.214-73, Caution--Sealed Bidding, as 
prescribed at 3514.201-6(a)(2);
    (5) The provision at 3552.214-75, All or None Award--Sealed 
Bidding--Construction, as prescribed at 3514.201-6(d);
    (6) The provision at 3552.236-70, Mailing of Correspondence and 
Bids, in all invitations for bids for construction;
    (7) The provision at 3552.236-71, Additive Items, in invitations for 
bids for construction that contain one or more additive bid items to be 
awarded with the base bid item in the numerical order of priority that 
the additive bid items appear in the bid schedule within the funds 
available;
    (8) The provision at 3552.236-71, Additive Items--Alternate I, in 
invitations for bids for construction that contain one or more additive 
bid items to be awarded with the base bid item in any combination within 
the funds available; and
    (9) The provision at 3552.236-72, Cost Limitation, in invitations 
for bids for construction that contain one or more items subject to 
statutory cost limitations, except when a waiver has been granted 
pursuant to FAR 36.205.
    (b) The contracting officer shall insert the following provisions in 
negotiated solicitations for construction when applicable:
    (1) The provision at 3552.215-70, Price, as prescribed at 
3515.407(a)(1);
    (2) The provision at 3552.215-71, Caution, as prescribed at 
3515.407(a)(2); and
    (3) The provision at 3552.215-72, All or None Award, as prescribed 
at 3515.407(b).
    (c) The contracting officer shall insert the provision at 3552.209-
70, Organizational Conflict of Interest Certification/Disclosure, in 
invitations for bids and negotiated solicitations for construction when 
applicable, as prescribed at 3509.508-1.



                Subpart 3536.5_Contract Clauses and Form



3536.570  Special Panama Canal Commission contract clauses.

    The contracting officer shall insert the following clauses in 
solicitations and contracts for construction when applicable:
    (a) The clause at 3552.225-70, Language, as prescribed at 3525.801-
76(a);
    (b) The clause at 3552.225-71, Notice of Applicability of United 
States Federal Law, as prescribed at 3525.801-76(b);
    (c) The clause at 3552.225-72, Designated Contractors, as prescribed 
at 3525.801-76(c);
    (d) The clause at 3552.225-73, Responsibility for Observance of 
Laws, Orders, and Regulations, as prescribed at 3525.801-76(d);
    (e) The clause at 3552.228-70, Bid Guarantee Amount, or the clause 
at 3552.228-75, Proposal Guarantee, as prescribed at 3528.101-3(a). If 
the proposal guarantee clause is used, the bid guarantee clause at FAR 
52.228-1 shall not be used (see 3528.101-3(b));
    (f) The clause at 3552.228-71, Bonds and Insurance, as prescribed at 
3528.102-3;
    (g) The clause at 3552.228-72, Bonds, as prescribed at 3528.102-3;
    (h) In addition to FAR clause 52.228-3, Workers' Compensation 
Insurance (Defense Base Act), the clause at 3552.228-73, Non-U.S. 
Workers' Compensation Insurance, as prescribed at 3528.309(a);
    (i) The clause at 3552.228-74, Special Panama Insurance, as 
prescribed at 3528.370;
    (j) In addition to FAR clause 52.232-5, Payments Under Fixed-Price 
Construction Contracts, the clause at 3552.232-70, Contract Payments, as 
prescribed at

[[Page 208]]

3532.111(a)(7), the clause at 3552.232-72, Presentation of Statement of 
Release from Claims, as prescribed at 3532.806(a), and the clause at 
3552.232-73, Invoices, as prescribed at 3532.111(a)(8);
    (k) The clause at 3552.236-73, Scope of Work, in all solicitations 
and contracts for construction;
    (l) In addition to FAR clause 52.236-10, Operations and Storage 
Areas, the clause at 3552.236-74, Work Sites, Yards, Shops, and Offices, 
when a fixed-price construction contract is contemplated;
    (m) The clause at 3552.236-75, Work Time Limitations, in all 
solicitations and contracts for construction;
    (n) In lieu of FAR clause 52.236-13, Accident Prevention, insert the 
clause at 3552.236-76, Accident Prevention, when a fixed-price 
construction contract is contemplated;
    (o) The clause at 3552.236-77, Working in Confined Spaces, when the 
contracting officer anticipates that the contractor may have to work in 
confined or enclosed spaces;
    (p) The clause at 3552.236-78, Safety Sign, when the contracting 
officer determines that the location of the work site warrants its 
inclusion;
    (q) The clause at 3552.236-79, Protection of Material and Work, in 
all solicitations and contracts for construction;
    (r) The clause at 3552.236-80, Toilet Facilities, when the 
contracting officer determines that the location of the work site 
warrants its inclusion;
    (s) The clause at 3552.236-81, Drinking Water, when the contracting 
officer determines that the location of the work site warrants its 
inclusion;
    (t) In addition to FAR clause 52.236-15, Schedules for Construction 
Contracts, the clause at 3552.236-82, Contract Bid Breakdown, when a 
fixed-price construction contract is contemplated and the period of 
actual work performance is expected to exceed 60 days;
    (u) In addition to FAR clause 52.236-21, Specifications and Drawings 
for Construction, and FAR clause 52.236-5, Material and Workmanship, the 
clauses at: 3552.236-83, Descriptive Data and Correspondence, 3552.236-
84, Instruction Books, and 3552.236-85, Record Drawings, when a fixed-
price construction contract is contemplated;
    (v) The clause at 3552.236-86, Restricted Areas, when the 
contracting officer anticipates that any portion of the contract work 
may have to be performed in a restricted area;
    (w) The clause at 3552.243-70, Modification Proposals--Price 
Breakdown, as prescribed at 3543.205;
    (x) The clause at 3552.244-70, Subcontractors, in all solicitations 
and contracts for construction;
    (y) The clause at 3552.236-87, Surplus Space, in all solicitations 
and contracts for construction. The clause may also be used in 
solicitations and contracts for supplies or services if the contracting 
officer determines that its use is appropriate.
    (z) The clause at 3552.209-71, Organizational Conflict of Interest, 
as prescribed at 3509.508-2.



3536.571  Special Panama Canal Commission form.

    Panama Canal Form 3062, Submittal Data For Approval, shall be used 
by contractors as a transmittal document when data and/or samples are to 
be submitted for the contracting officer's approval pursuant to FAR 
clause 52.236-5 or clause 3552.236-83 of this regulation.



               Subpart 3536.6_Architect-Engineer Services



3536.602  Selection of firms for architect-engineer contracts.



3536.602-2  Evaluation boards.

    (a) The Panama Canal Commission Architect-Engineer Evaluation Board 
is established as a central board within the Commission under authority 
delegated to the Director, Engineering and Construction Bureau. The 
Board shall perform all Commission architect-engineer evaluations, data 
collection, and files maintenance. The Commission Board shall be 
composed of not less than three nor more than five voting members and 
one non-voting advisory member from the contracting office. The 
following constitutes the minimum composition of the Board:
    (1) Member and Chairman--A designee of the Chief, Engineering 
Division;

[[Page 209]]

    (2) Member--A professional engineer or architect from a division of 
one of the Commission's other bureaus, to be designated by the Chairman;
    (3) Member--A program official initiating the requirement or a 
designated representative; and
    (4) Advisory Member--A contracting officer or representative.
    (b) The Chief, Engineering Division may appoint additional voting 
members as may be appropriate for a particular project.
    (c) In the event of an emergency or extended absence, a member may 
designate, in writing, with the concurrence of the Chairman, an 
alternate experienced in architecture, engineering, or construction to 
serve in the member's absence.
    (d) The duties of the advisory member shall include, but not be 
limited to, assuring that--
    (1) The criteria set forth in the public notice are applied in the 
evaluation process; and
    (2) Actions taken during the evaluation process do not compromise 
subsequent procurement actions.



3536.602-4  Selection authority.

    The Director, Engineering and Construction Bureau shall serve as the 
Commission's selection authority for the evaluation board.



3536.602-5  Short selection processes for contracts not to exceed $10,000.

    Both short selection processes permitted by FAR 36.602-5 are 
authorized.



3536.604  Performance evaluation.

    Evaluation of architect-engineer contracts shall be in accordance 
with the procedures prescribed in 3536.201, except that SF 1421, 
Performance Evaluation (Architect-Engineer), shall be used in lieu of SF 
1420, and that a copy of the performance evaluation shall be provided to 
the Architect-Engineer Evaluation Board for its files pursuant to FAR 
36.604(c).



3536.605  Government cost estimate for architect-engineer work.

    (b) The overall amount of the Government's cost estimate shall not 
be disclosed under any circumstance to persons other than Government 
personnel whose official duties, in the judgment of the contracting 
officer, require knowledge of the estimate.



3536.606  Negotiations.

    (a) Negotiations shall be conducted with the first selected 
architect-engineer until a price which is fair and reasonable and not in 
excess of the Government estimate, revised to correct errors of fact or 
judgment, has been obtained. When the negotiations result in a price in 
excess of the Government estimate, as revised, the contracting officer 
shall terminate the negotiations and request a proposal from the 
architect-engineer next in order of preference.
    (1) In no event shall a contract for architect-engineer services for 
the preparation of designs, plans, drawings and specifications exceed 
the statutory limitation of six percent (6 percent) of the estimated 
construction costs of the project. If the contract also covers any type 
of services other than the preparation of designs, plans, drawings and 
specifications, the part of the contract price for such other services 
shall not be subject to the six percent (6 percent) limitation.



3536.606-70  Modifications.

    When a modification involves work not initially included in the 
contract, the limitation on the total contract price set forth in 
3536.606(a)(1) is applicable, as applied to the revised total estimated 
construction costs. When redesign is required and the contract is 
modified, the following method shall be used to insure that the six 
percent (6 percent) statutory limitation is not exceeded:
    (a) The estimated construction cost of the redesigned features will 
be added to the original estimated construction cost;
    (b) The contract cost for the original design will be added to the 
contract cost for redesign; and
    (c) The total contract design cost obtained by paragraph (b) of this 
subsection will be divided by the total construction cost obtained by 
paragraph (a) of this subsection. The resulting percentage may not 
exceed the six percent (6 percent) statutory limitation.

[[Page 210]]



3536.670  Government rights to plans, specifications, and drawings.

    All solicitations and contracts for architect-engineer services or 
for construction involving architect-engineer services, except those 
involving ``standard types of construction'', shall contain the clause 
at 3552.227-70, Government Rights, as prescribed at 3527.304-3(b).



PART 3537_SERVICE CONTRACTING--Table of Contents




Sec.
3537.000 Scope of part.

                Subpart 3537.1_Service Contracts_General

3537.102 Policy.
3537.104 Personal services contracts.
3537.104-70 Procedures.

             Subpart 3537.2_Advisory and Assistance Services

3537.200 Scope of subpart.
3537.202 Policy.
3537.204 Exclusions.
3537.206 Requesting activity responsibilities.
3537.206-70 Procedures.
3537.270 Duration.

    Authority: 40 U.S.C. 486(c).

    Source: 55 FR 7662, Mar. 2, 1990, unless otherwise noted.



3537.000  Scope of part.

    This part implements FAR part 37 and provides additional Commission 
policies and procedures for the acquisition of personal and nonpersonal 
services, including advisory and assistance services.



                Subpart 3537.1_Service Contracts_General



3537.102  Policy.

    (a) The Commission's policy regarding the contracting out of 
commercial services is set forth at 3507.301.



3537.104  Personal services contracts.

    (b) Authority for the acquisition by contract of the personal 
services of experts and consultants is found at 5 U.S.C. 3109 which 
provides that, when authorized by an appropriation or other statute, the 
head of an agency may acquire by contract the temporary (not to exceed 
one year) or intermittent services of experts or consultants. For the 
purpose of this section, the terms ``experts'' and ``consultants'' are 
not interchangeable. Consequently, their meanings are distinguishable 
from the meaning of the collective term ``Individual experts and 
consultants'' at FAR 37.203(a). As used herein, an ``expert'' is an 
individual who is a recognized professional or highly skilled 
practitioner normally used to perform or supervise an operating 
function, rather than to provide advisory or consulting services. A 
``consultant'', as used herein, is an individual possessing special, 
current knowledge or skill who primarily serves in an advisory capacity 
in a particular field, rather than in the performance or supervision of 
an operating function. Acquiring the personal services of individual 
experts or consultants shall be subject to the limitations applicable to 
advisory and assistance services at FAR 37.202(c). In addition, the 
services of individual experts and consultants shall be acquired through 
personal services contracts only--
    (1) When the services required cannot be obtained by appointment in 
accordance with standard Commission personnel procedures, and
    (2) If the nature of the duties to be performed is temporary (not 
more than one year) or intermittent (not cumulatively more than 130 days 
in one year). Accordingly, no such contract shall be entered into for 
longer than one year at a time.



3537.104-70  Procedures.

    Requests for the acquisition of personal services should include:
    (a) A description of the services to be performed;
    (b) Name and address of the person or firm;
    (c) Background material to show the unique qualifications of such 
person or firm to accomplish the requirement;
    (d) Place where the duties are to be performed and the period of 
service;
    (e) The estimated cost; and
    (f) Determinations that:
    (1) It is not feasible to obtain personnel with the necessary skills

[[Page 211]]

through standard Commission personnel appointment procedures;
    (2) A nonpersonal services contract is not practicable; and
    (3) Existing staffing is inadequate to furnish the services.



             Subpart 3537.2_Advisory and Assistance Services



3537.200  Scope of subpart.

    This subpart provides additional policy and management controls for 
the acquisition of personal and nonpersonal advisory and assistance 
services.



3537.202  Policy.

    (d) The acquisition of advisory and assistance services shall 
conform to the Competition in Contracting Act of 1984. Preference shall, 
however, be given to sources located in the Republic of Panama when the 
services are available as required and are comparable in quality and 
price to those which may be obtained from other sources (see part 3570). 
However, see subpart 3503.6 concerning contracts with current or former 
Commission employees.



3537.204  Exclusions.

    In addition to the exclusions or exemptions identified at FAR 
37.204, the services of arbitrators for the resolution of labor disputes 
are exempted from the definition of advisory and assistance services. As 
authorized by section 7121 of the Federal Service Labor-Management 
Relations Act, 5 U.S.C. 7121, the procedure for the contracting of 
arbitrators shall be governed by the negotiated grievance procedure set 
forth in the individual collective bargaining agreements between the 
Commission and the various certified representatives (i.e., unions).



3537.206  Requesting activity responsibilities.

    (c) Requests for the acquisition of advisory and assistance services 
shall include the documentation required at FAR 37.206 (a), (b), and 
(d), and shall be prepared by the initiating bureau director or head of 
independent unit and forwarded to the Administrator for approval, 
through, in turn, the Personnel Director; General Counsel; Chief 
Financial Officer; and the General Services Director for their review 
and concurrence. Before the proposal is routed to the Administrator, the 
General Services Director will add the cognizant contracting officer's 
determination as to whether or not the requested acquisition constitutes 
advisory and assistance services as described in FAR subpart 37.2. As 
mandated by FAR 37.207, the contracting officer's determination shall be 
final.

[55 FR 7662, Mar. 2, 1990; 55 FR 38331, Sept. 18, 1990]



3537.206-70  Procedures.

    (a) When a request has been approved pursuant to 3537.206(c), the 
initiating bureau director or head of independent unit shall--
    (1) Forward all papers to the cognizant contracting officer for 
processing the contract action. If not already included in the request 
for approval, the forwarding official shall provide the contracting 
officer with a work statement that is specific and complete, including: 
a detailed description of services to be performed; the place where the 
services are to be performed; the period of performance; the names and 
addresses of potential contractors (if applicable); and any other 
information the contracting officer considers to be pertinent.
    (2) Coordinate with the Director, Office of Executive Administration 
or the contracting officer, as applicable, to obtain certification as a 
Panama Canal Commission designated contractor, entry/exit permits, 
identification cards, and any other required legal documents.
    (3) Prepare replies to all inquiries from the General Accounting 
Office, the Office of Management and Budget, and the Congress, in 
coordination with the Personnel Director, Chief Financial Officer, 
General Counsel and the contracting officer, as may be necessary.
    (b) At the conclusion of the contract, the initiating bureau 
director or head of independent unit shall furnish to the contracting 
officer the written evaluation required at FAR 37.205.



3537.270  Duration.

    No contract for advisory and assistance services shall be entered 
into for

[[Page 212]]

longer than one year at a time. In unusual circumstances, and when 
approved by the Administrator, options for additional one-year 
extensions may be used when the need for continuity of services carries 
beyond a one-year period. In no case shall the total period under a 
specific contract exceed the basic year plus four additional optional 
years.

[[Page 213]]



                    SUBCHAPTER G_CONTRACT MANAGEMENT





PART 3542_CONTRACT ADMINISTRATION--Table of Contents




    Authority: 40 U.S.C. 486(c).



         Subpart 3542.12_Novation and Change-of-Name Agreements



3542.1200-70  Policy.

    When ``CORPORATE SEALS,'' as required in the instructions for 
preparation and execution of novation agreements in FAR 42.1204 and in 
agreements to recognize contractor's change of name in FAR 42.1205, are 
not used due to the dictates of custom, practice, or law within the 
Republic of Panama or other foreign countries, the contracting officer 
may execute such agreements, provided the contracting officer, with the 
concurrence of legal counsel, is satisfied that the persons signing such 
agreements are authorized to bind their companies.

[55 FR 7663, Mar. 2, 1990]



PART 3543_CONTRACT MODIFICATIONS--Table of Contents




    Authority: 40 U.S.C. 486(c).



                      Subpart 3543.2_Change Orders



3543.205  Contract clauses.

    The contracting officer shall insert the clause at 3552.243-70, 
Modification Proposals--Price Breakdown, in all solicitations and 
contracts for construction.

[55 FR 7664, Mar. 2, 1990]



PART 3547_TRANSPORTATION--Table of Contents




            Subpart 3547.3_Transportation in Supply Contracts

Sec.
3547.306 Transportation factors in the evaluation of offers.
3547.370 Solicitation provision.

    Authority: 40 U.S.C. 486(c); Article IX of the Agreement in 
Implementation of Article III of the Panama Canal Treaty of 1977.



            Subpart 3547.3_Transportation in Supply Contracts



3547.306  Transportation factors in the evaluation of offers.

    For purposes of evaluating comparability of costs of supplies 
obtainable in the Republic of Panama with those obtainable from other 
sources, pursuant to the Panamanian preference provisions of the Panama 
Canal Treaty's Implementing Agreement (see part 3570), consideration 
shall be given to transportation costs to the Republic of Panama, 
including freight, insurance and handling of supplies.

[55 FR 7664, Mar. 2, 1990]



3547.370  Solicitation provision.

    The contracting officer shall insert the provision at 3552.247-70, 
Evaluation of Delivery Terms in Contract Awards, in solicitations that 
include alternate terms of delivery, i.e., f.o.b. destination (New 
Orleans) and c.i.f. destination (Panama).

[55 FR 7664, Mar. 2, 1990]



PART 3551_USE OF GOVERNMENT SOURCES BY CONTRACTORS--Table of Contents




       Subpart 3551.1_Contractor Use of Government Supply Sources

Sec.
3551.102 Authorization to use Government supply sources.
3551.103 Ordering from Government supply sources.

    Authority: 40 U.S.C. 486(c).



       Subpart 3551.1_Contractor Use of Government Supply Sources



3551.102  Authorization to use Government supply sources.

    (a) When a contractor is performing one of the types of contracts 
specified in FAR 51.101, the contracting officer shall consider whether 
to allow the contractor to use Government supply sources. In addition to 
the factors listed for consideration at FAR 51.102(a),

[[Page 214]]

the contracting officer shall consider whether--
    (1) Materials necessary to the performance of the contract are not 
available locally except at Government sources; and
    (2) Materials, though available to the contractor, require such a 
long lead time for delivery that contractor performance is threatened if 
Government sources are not used.
    (e)(4) In those instances where contractor-furnished equipment and 
materials required by a contract have been authorized by the contracting 
officer to be obtained through Government sources as Government-
furnished equipment and materials, for reasons established by FAR part 
51, the contracting officer shall negotiate a change to the contract 
reducing the price by the commercial cost plus transportation costs.

[55 FR 7664, Mar. 2, 1990]



3551.103  Ordering from Government supply sources.

    (b) ``Contracting agency'' as used in FAR 51.103(b) shall mean the 
cognizant Commission contracting officer.

[55 FR 7664, Mar. 2, 1990]

[[Page 215]]



                     SUBCHAPTER H_CLAUSES AND FORMS





PART 3552_SOLICITATION PROVISIONS AND CONTRACT CLAUSES--Table of Contents




             Subpart 3552.2_Texts of Provisions and Clauses

Sec.
3552.209-70 Organizational Conflict of Interest Certification/
          Disclosure.
3552.209-71 Organizational Conflict of Interest.
3552.210-70 Brand Name Products or Equal.
3552.214-70 Price--Sealed Bidding.
3552.214-71 Additional Data To Be Submitted.
3552.214-72 Rejection of Bids.
3552.214-73 Caution--Sealed Bidding.
3552.214-74 All or None Award--Sealed Bidding.
3552.214-75 All or None Award--Sealed Bidding--Construction.
3552.215-70 Price.
3552.215-71 Caution.
3552.215-72 All or None Award.
3552.225-70 Language.
3552.225-71 Notice of Applicability of United States Federal Law.
3552.225-72 Designated Contractors.
3552.225-73 Responsibility for Observance of Laws, Orders, and 
          Regulations.
3552.227-70 Government Rights.
3552.228-70 Bid Guarantee Amount.
3552.228-71 Bonds and Insurance.
3552.228-72 Bonds.
3552.228-73 Non-U.S. Workers' Compensation Insurance.
3552.228-74 Special Panama Insurance.
3552.228-75 Proposal Guarantee.
3552.228-76 Performance Bond.
3552.228-77 Performance and Payment Bonds.
3552.231-70 Travel Costs.
3552.232-70 Contract Payments.
3552.232-71 Availability of Funds.
3552.232-72 Presentation of Statement of Release From Claims.
3552.232-73 Invoices.
3552.236-70 Mailing of Correspondence and Bids.
3552.236-71 Additive Items.
3552.236-72 Cost Limitation.
3552.236-73 Scope of Work.
3552.236-74 Work Sites, Yards, Shops, and Offices.
3552.236-75 Work Time Limitations.
3552.236-76 Accident Prevention.
3552.236-77 Working in Confined Spaces.
3552.236-78 Safety Sign.
3552.236-79 Protection of Material and Work.
3552.236-80 Toilet Facilities.
3552.236-81 Drinking Water.
3552.236-82 Contract Bid Breakdown.
3552.236-83 Descriptive Data and Correspondence.
3552.236-84 Instruction Books.
3552.236-85 Record Drawings.
3552.236-86 Restricted Areas.
3552.236-87 Surplus Space.
3552.243-70 Modification Proposals--Price Breakdown.
3552.244-70 Subcontractors.
3552.247-70 Evaluation of Delivery Terms in Contract Awards.

    Authority: 40 U.S.C. 486(c); Articles IX and XI of the Agreement in 
Implementation of Article III of the Panama Canal Treaty of 1977.

    Source: 55 FR 7664, Mar. 2, 1990, unless otherwise noted.



             Subpart 3552.2_Texts of Provisions and Clauses



3552.209-70  Organizational Conflict of Interest Certification/Disclosure.

    As prescribed in 3509.508-1, insert the following provision:

 Organizational Conflict of Interest Certification/Disclosure (Jan 1990)

    (a) An ``organizational conflict of interest'' exists when the 
nature of the work to be performed under a proposed Government contract 
may, without some restriction on future activities, (1) result in an 
unfair competitive advantage to the contractor, or (2) impair the 
contractor's objectivity in performing the contract work.
    (b) The offeror certifies, to the best of its knowledge and belief, 
that it [ ] is, [ ] is not (check applicable block) aware of any 
information bearing on the existence of any potential organizational 
conflict of interest. If the offeror is aware of information bearing on 
whether a potential conflict may exist, the offeror shall provide a 
disclosure statement with its offer which describes all relevant 
information concerning any past, present, or planned interests bearing 
on whether it (including its chief executives and directors, or any 
proposed consultant or subcontractor) may have a potential 
organizational conflict of interest.
    (c) The offeror should refer to FAR subpart 9.5 and PAR subpart 
3509.5 for policies and procedures for avoiding, neutralizing, or 
mitigating organizational conflicts of interest.
    (d) If the Contracting Officer determines that a potential conflict 
exists, the offeror

[[Page 216]]

shall not receive an award unless the conflict can be avoided or 
otherwise resolved through the inclusion of a special contract clause or 
other appropriate means. The terms of any special clause are subject to 
negotiation.

                           (End of provision)



3552.209-71  Organizational Conflict of Interest.

    As prescribed in 3509.508-2, insert the following clause:

             Organizational Conflict of Interest (Jan 1990)

    (a) The Contractor warrants that, to the best of the Contractor's 
knowledge and belief: (1) There are no relevant facts or circumstances 
which could give rise to an organizational conflict of interest, as 
defined in provision 3552.209-70, Organizational Conflict of Interest 
Certification/Disclosure, of the solicitation; or (2) That the 
Contractor has disclosed all such relevant information.
    (b) The Contractor agrees that if an actual or potential 
organizational conflict of interest is discovered after award, the 
Contractor will make a full disclosure in writing to the Contracting 
Officer. This disclosure shall include a description of actions which 
the Contractor has taken or proposes to take, after consultation with 
the Contracting Officer, to avoid, mitigate, or neutralize the actual or 
potential conflict.
    (c) Remedies--The Panama Canal Commission may terminate this 
contract for convenience, in whole or in part, if it deems such 
termination necessary to avoid an organizational conflict of interest. 
If the Contractor was aware of a potential organizational conflict of 
interest prior to award or discovered an actual or potential conflict 
after award and did not disclose or misrepresented relevant information 
to the Contracting Officer, the Government may terminate the contract 
for default, debar the Contractor from Government contracting, or pursue 
such other remedies as may be permitted by law or this contract.
    (d) The contractor further agrees to insert in any subcontract or 
consultant agreement hereunder, terms which shall conform substantially 
to the language of this clause, including this paragraph (d).

                             (End of clause)



3552.210-70  Brand Name Products or Equal.

    As prescribed in 3510.011(h), insert the following provision:

                 Brand Name Products or Equal (Jan 1990)

    (As used in this provision, the term ``brand name'' includes 
identification of products by make and model.)
    (a) If items called for by this (invitation for bids/request for 
proposals) have been identified in the schedule by a ``brand name or 
equal'' description, such identification is characteristic of products 
that will be satisfactory. (Bids/Proposals) offering ``equal'' products 
(including products of the brand name manufacturer other than the one 
described by brand name) will be considered for award if such products 
are clearly identified in the (bids/proposals) and are determined by the 
Government to meet fully the salient characteristics, requirements 
listed in the invitation.
    (b) Unless the (bidder/offeror) clearly indicates in its (bid/
proposal) that it is offering an ``equal'' product, its (bid/proposal) 
shall be considered as offering a brand name product referenced in the 
(invitation for bids/request for proposals).
    (c)(1) If the (bidder/offeror) proposes to furnish an ``equal'' 
product, the brand name, if any, of the product to be furnished shall be 
inserted in the space identified in the (bid/proposal). The evaluation 
of (bids/proposals) and the determination as to equality of the product 
offered shall be the responsibility of the Government and will be based 
on information furnished by the (bidder/offeror) or identified in its 
(bid/proposal) as well as other information reasonably available to the 
purchasing activity. Caution to (bidders/offerors): the purchasing 
activity is not responsible for locating or securing any information 
which is not identified in the (bid/proposal) and reasonably available 
to the purchasing activity. Accordingly, to ensure that sufficient 
information is available, the (bidder/offeror) shall furnish as part of 
its (bid/proposal) all descriptive material (such as cuts, 
illustrations, drawings, or other information) necessary for the 
purchasing activity to (i) determine whether the product offered meets 
the salient characteristics requirement of the (invitation for bids/
request for proposals), and (ii) establish exactly what the (bidder/
offeror) proposes to furnish and what the Government would be binding 
itself to purchase by making an award. The information furnished may 
include specific references to information previously furnished or to 
information otherwise available to the purchasing activity.
    (2) If the (bidder/offeror) proposes to modify a product so as to 
make it conform to the requirements of the (invitation for bids/request 
for proposals). It shall (i) include in its (bid/proposal) a clear 
description of such proposed modifications, and (ii) clearly mark any 
descriptive material to show the proposed modifications.

[[Page 217]]

    (3) Modifications proposed after (bid/proposal) opening to make a 
product conform to a brand name product referenced in the (invitation 
for bids/request for proposals) will not be considered.

                           (End of provision)



3552.214-70  Price--Sealed Bidding.

    As prescribed in 3514.201-6(a)(1), insert the following provision:

                    Price--Sealed Bidding (Jan 1990)

    Only bids stating a firm, fixed-price expressed in U.S. dollars 
shall be considered for award. Bids that qualify the bid price in terms 
of the rate of exchange between U.S. dollars and a foreign currency will 
be rejected as nonresponsive.

                           (End of provision)



3552.214-71  Additional Data To Be Submitted.

    As prescribed in 3514.201-6(b)(1), insert the following provision:

               Additional Data to Be Submitted (Jan 1990)

    Prior to award of the contract, the Contracting Officer may require 
the apparent low bidder to furnish the following information:
    (a) Evidence establishing that the bidder maintains a permanent 
place of business and has satisfactory and acceptable financial 
resources to meet obligations incident to the work.
    (b) A brief description of work experience by the bidder and the 
location of major projects.
    (c) A list of key personnel which the bidder has available for 
prosecution of the work to be performed, and a brief summary of such 
personnel's experience in work similar to that required by this 
contract.
    (d) A complete list and description of all equipment, shops, yards, 
and storage facilities that the bidder now has or will have available 
for commencement and prosecution of the work.
    (e) Evidence establishing that the bidder positively meets 
responsibility requirements, such as experience, which are included in 
the solicitation.

                           (End of provision)



3552.214-72  Rejection of Bids.

    As prescribed in 3514.201-6(b)(2), insert the following provision:

                      Rejection of Bids (Jan 1990)

    Any bid will be rejected that is conditioned upon or proposes that 
the Panama Canal Commission agree to the use of a price adjustment 
clause calling for an upward revision of the bid price or to the use of 
a cost-plus-fixed-fee or comparable pricing arrangement. The right is 
reserved, as the interest of the Panama Canal Commission may require, to 
reject any and all bids and to waive any informality in the bids. A bid 
may be rejected if the bidder fails to furnish a guaranty and submit the 
data required with the bid; or if the bidder cannot show to the 
satisfaction of the Contracting Officer that it has the experience and 
owns or controls by firm option, or can procure the necessary plant to 
commence work within the time prescribed in the specifications and, 
thereafter, to prosecute and complete the work at the rate or time 
specified; or if the bidder cannot show that he is not already obligated 
to perform other work contemplated in this Solicitation. Any unbalanced 
bid which, in the opinion of the Contracting Officer, jeopardizes the 
interests of the Panama Canal Commission will be subject to rejection 
for that reason.

                           (End of provision)



3552.214-73  Caution--Sealed Bidding.

    As prescribed in 3514.201-6(a)(2), insert the following provision:

                   Caution--Sealed Bidding (Jan 1990)

    Bidders are cautioned that any condition, qualification, provision, 
or comment in their bid, or in a letter transmitting their bid, which in 
any way modifies, takes exception to, or is inconsistent with the 
specifications, requirements, or any of the terms, conditions, or 
provisions of this solicitation, may require the rejection of their bid 
as nonresponsive.

                           (End of provision)



3552.214-74  All or None Award--Sealed Bidding.

    As prescribed in 3514.201-6(c), insert the following provision:

              All or None Award--Sealed Bidding (Jan 1990)

    Notwithstanding paragraph (c) of provision 52.214-10, Contract 
Award--Sealed Bidding, award will be made on an ``all or none'' basis to 
one bidder for all items, in the quantities and at the unit prices 
specified for each item. Consequently, for the purpose of determining 
the most advantageous bid in accordance with paragraph (a) of provision 
52.214-10, the word ``price'' as used therein shall be

[[Page 218]]

construed to mean the bidder's aggregate price for all items. Any bid 
which fails to quote on all items, in the quantities specified for each 
item, shall be rejected as nonresponsive.

                           (End of provision)



3552.214-75  All or None Award--Sealed Bidding--Construction.

    As prescribed in 3514.201-6(d)(1), insert the following provision:

       All or None Award--Sealed Bidding--Construction (Jan 1990)

    Regarding paragraph (c) of provision 52.214-19, Contract Award--
Sealed Bidding--Construction, award will be made on an ``all or none'' 
basis to one bidder for all items. Consequently, for the purpose of 
determining the most advantageous bid in accordance with paragraph (a) 
of provision 52.214-19, the word ``price'' as used therein shall be 
construed to mean the bidder's aggregate price for all items. As 
indicated in paragraph (c) of provision 52.214-18, Preparation of Bids--
Construction, failure to bid on all items will disqualify the bid.

                           (End of provision)

    Alternate I (Jan 1990) If the construction work is not estimated to 
exceed $10,000, substitute the following text in place of the basic 
text:

    A contract award will be made on an ``all or none'' basis to one 
bidder for all items at the prices specified for each item. The award 
will be made, without discussions, to the overall low, responsible 
bidder whose bid, conforming to the solicitation, will be the most 
advantageous to the Government considering only the bidder's aggregate 
price for all items and the price-related factors, if any, specified 
elsewhere in the solicitation. Consequently, bidders are required to bid 
on all items. Failure to do so will disqualify the bid.

    Alternate II (Jan 1990) If the contracting officer determines that 
(a) the contract work, regardless of its estimated value, will be 
awarded to one bidder for all the work, and (b) bidding on all items 
will not be required, substitute the following text in place of the 
basic text:

    A contract award will be made on an ``all or none'' basis to one 
bidder for all the contract work. The award will be made, without 
discussions, to the overall low, responsible bidder whose bid, 
conforming to the solicitation, will be the most advantageous to the 
Government considering only the bidder's aggregate price for all items 
and the price-related factors, if any, specified elsewhere in the 
solicitation.



3552.215-70  Price.

    As prescribed in 3515.407(a)(1), insert the following provision:

                            Price (Jan 1990)

    Only offers stating a firm-fixed-price expressed in U.S. dollars 
shall be considered for award. Offers that qualify the offer price in 
terms of the rate of exchange between U.S. dollars and a foreign 
currency will be rejected as nonresponsive.

                           (End of provision)



3552.215-71  Caution.

    As prescribed in 3515.407(a)(2), insert the following provision:

                           Caution (Jan 1990)

    Offerors are cautioned that any condition, qualification, provision, 
or comment in their offer, or in a letter transmitting their offer, 
which in any way modifies, takes exception to, or is inconsistent with 
the specifications, requirements, or any of the terms, conditions, or 
provisions of this solicitation, may require the rejection of their 
offer as nonresponsive.

                           (End of provision)



3552.215-72  All or None Award.

    As prescribed in 3515.407(b), insert the following provision:

                      All or None Award (Jan 1990)

    Notwithstanding paragraph (d) of provision 52.215-16, Contract 
Award, a contract award will be made on an ``all or none'' basis to one 
offeror for all items, in the quantities and at the unit prices 
specified for each item. Consequently, for the purpose of determining 
the most advantageous offer in accordance with paragraph (a) of 
provision 52.215-16, the words ``cost or price'' as used therein shall 
be construed to mean the offeror's aggregate cost or price for all 
items. Therefore, offerors are cautioned to quote on all items, in the 
quantities specified for each item. Failure to do so will, in effect, 
eliminate the offeror from consideration for contract award in the event 
a contract is to be awarded on the basis of initial offers received 
without discussions, pursuant to paragraph (c) of provision 52.215-16.

[[Page 219]]

                           (End of provision)



3552.225-70  Language.

    As prescribed in 3525.801-76(a), Language, insert the following 
clause:

                           Language (Jan 1990)

    All offers, correspondence and documents required by this 
solicitation or contract must be submitted in the English language. In 
the event of inconsistency between any terms of this solicitation or 
contract and any translation thereof into another language, the English 
language meaning shall control.

                             (End of clause)



3552.225-71  Notice of Applicability of United States Federal Law.

    As prescribed in 3525.801-76(b), insert the following clause:

     Notice of Applicability of United States Federal Law (Jan 1990)

    All matters relating to the validity, construction, interpretation, 
performance and enforcement of the contract shall be determined in 
accordance with applicable federal law of the United States of America.

                             (End of clause)



3552.225-72  Designated Contractors.

    As prescribed in 3525.801-76(c), insert the following clause:

                    Designated Contractors (Jan 1990)

    Article XI, ``Contractors and Contractors' Personnel,'' of the 
Agreement in Implementation of Article III of the Panama Canal Treaty of 
1977, prescribes, among other things, that--
    (a) Whenever contracts are awarded by the Commission to natural 
persons who are nationals or permanent residents of the United States or 
to corporations or other legal entities organized under the laws of the 
United States and under the effective control of such persons, such 
contractors shall be so designated by the United States and such 
designations shall be communicated to the authorities of the Republic of 
Panama.
    (b) Designated contractors shall be subject to the laws and 
regulations of the Republic of Panama except with respect to the special 
provisions established by the above named international agreement, which 
enumerate such obligations and benefits as, among others:
    (1) Designated contractors must, while in Panama, engage exclusively 
in the work for which they have been contracted by U.S. Government 
agencies; and,
    (2) Designated contractors shall be accorded the same rights 
established for U.S. citizens employed by the U.S. Government in Panama 
pertaining to Panamanian immigration requirements, relief from the 
payment of certain Panamanian taxes and duties, and the use of certain 
facilities located on U.S. military installations in Panama.
    (c) The provisions of Article XI shall be similarly applied to the 
subcontractors and to the employees of the contractors and 
subcontractors and their dependents who are nationals or residents of 
the United States. These employees and dependents shall not be subject 
to the Panamanian Social Security System.
    (d) Upon withdrawal of the designation of a contractor, the 
Commission shall notify the authorities of the Republic of Panama.

                             (End of clause)



3552.225-73  Responsibility for Observance of Laws, Orders, and Regulations.

    As prescribed in 3525.801-76(d), insert the following clause:

  Responsibility for Observance of Laws, Orders, and Regulations (Jan 
                                  1990)

    The Contractor shall be responsible for complying with all 
applicable laws, regulations, standards and requirements, including 
traffic and vehicular laws and regulations, prescribed by the Republic 
of Panama for contractors performing work for the Panama Canal 
Commission (hereinafter referred to as the Commission). The Contractor 
shall similarly be responsible for complying with all laws, Executive 
Orders, and United States Government rules and regulations which the 
Commission, as an agency of the United States Government performing work 
in the Republic of Panama, is required to follow. The areas of legal 
competence have been agreed to between both countries pursuant to and in 
accordance with the Panama Canal Treaty of 1977, including such 
executive agreements and implementing legislation as may be in effect. 
Failure of the Contractor to familiarize himself with all laws, orders, 
rules, regulations or standards promulgated by either country, which are 
or may become applicable to the work under this contract, shall not 
constitute a basis for adjustments under the contract.

                             (End of clause)



3552.227-70  Government Rights.

    As prescribed in 3527.304-3(b), insert the following clause:

[[Page 220]]

                      Government Rights (Jan 1990)

    The Contractor may retain the entire right, title, and interest, 
throughout the world, to all drawings, designs, specifications, notes, 
and other works developed in the performance of this contract, provided 
that the Government shall have a nonexclusive, nontransferable, 
irrevocable, paid-up license to have and to use same on any other 
Government design or construction, and provided that the Contractor 
shall execute or have executed, upon request, and shall promptly deliver 
to the Federal agency, all instruments necessary to establish or to 
confirm said license.

                             (End of clause)



3552.228-70  Bid Guarantee Amount.

    As prescribed in 3528.101-3(a), insert the following clause:

                     Bid Guarantee Amount (Jan 1990)

    (a) The amount of the bid guarantee required by clause 52.228-1, Bid 
Guarantee, shall be 20 percent of the total amount of the bid, excluding 
options and additives if any, or $3,000,000, whichever is less.
    (b) If the bidder elects to furnish the guarantee in the form of a 
bid bond, the bond shall be submitted on Standard Form 24. Corporations 
executing the bond as sureties must be among those appearing on the 
current U.S. Treasury Department Circular 570, entitled ``Companies 
Holding Certificates of Authority as Acceptable Sureties on Federal 
Bonds and as Acceptable Reinsuring Companies'', and must be acting 
within the limitations set forth therein. If the contract work is to be 
performed in Panama, corporations that appear on the Panama Canal 
Commission's list of locally acceptable sureties, and that act within 
the limitations set forth therein, may be used in lieu of those 
appearing on Circular 570.

                             (End of clause)



3552.228-71  Bonds and Insurance.

    As prescribed in 3528.102-3, insert the following clause:

                     Bonds and Insurance (Jan 1990)

    The bidder who is awarded the contract shall be required to furnish 
performance and payment bonds, certificates of Workman's Compensation, 
if required, and public liability and automobile insurance as stipulated 
in the General Conditions. The payment by the Commission of the bond 
premiums to the Contractor shall not be made as increments of the 
individual progress payments and shall not be in addition to the 
contract price.

                             (End of clause)



3552.228-72  Bonds.

    As prescribed in 3528.102-3, insert the following clause:

                            Bonds (Jan 1990)

    (a) Corporations executing the bond as sureties must be among those 
appearing either on the Panama Canal Commission's list of locally 
acceptable sureties or on the U.S. Treasury Department's Circular 570, 
and must be acting within the limitations set forth therein.
    (b) Payment Bond: If the contract exceeds $2,000, the Contractor 
shall furnish a payment bond with good and sufficient surety or sureties 
acceptable to the Commission for the protection of persons furnishing 
material or labor in connection with the performance of the work under 
this contract on Standard Form 25-A. The penal sum of such payment bond 
shall be as follows: (1) When the contract price is $1,000,000 or less, 
50 percent of the contract price; (2) when the contract price is in 
excess of $1,000,000, but no more than $5,000,000, 40 percent of the 
contract price; (3) or $2,500,000 when the contract price is more than 
$5,000,000.
    (c) Performance Bond: If the contract exceeds $2,000, the Contractor 
shall furnish a performance bond with good and sufficient surety or 
sureties acceptable to the Commission in connection with the performance 
of the work under this agreement on Standard Form 25. The penal sum of 
such performance bond shall be 100 percent of the contract price.
    (d) The bonds herein shall not be dated prior to the date of the 
contract and shall be furnished by the Contractor to the Commission not 
later than 10 calendar days after award.

                             (End of clause)



3552.228-73  Non-U.S. Workers' Compensation Insurance.

    As prescribed in 3528.309(a), insert the following clause:

           Non-U.S. Workers' Compensation Insurance (Jan 1990)

    (a) Pursuant to a waiver granted by the Secretary of Labor, the 
provisions of the Defense Base Act (see clause 52.228-3) are not 
applicable to any public-work contract awarded by the Panama Canal 
Commission in the Panama Canal area with respect to non-U.S. citizen 
employees of Commission contractors. The waiver does not apply, however, 
to such employees who are:
    (1) Hired in the United States by any contractor; or
    (2) Residents of the United States.

[[Page 221]]

    (b) The waiver was granted with the proviso that non-U.S. citizen 
employees exempted from the provisions of the Defense Base Act by virtue 
of the waiver will be provided workers' compensation benefits prescribed 
in the Panamanian Social Security System. Accordingly, the Contractor 
shall provide workmen's insurance coverage (Seguros de Riesgos 
Profesionales) as provided by the Panamanian Social Security System in 
accordance with Cabinet Decree No. 68 of March 31, 1970, for all non-
U.S. citizen employees that are not covered by clause 52.228-3 of this 
contract. The Seguro de Riesgos Profesionales coverage shall be provided 
before the Contractor commences performance and shall be maintained 
until performance is completed.

                             (End of clause)



3552.228-74  Special Panama Insurance.

    As prescribed in 3528.370, insert the following clause:

                   Special Panama Insurance (Jan 1990)

    (a) ``Designated contractors'' shall, upon initiation of work or 
construction activities, obtain appropriate insurance to cover civil 
liabilities in the Republic of Panama that may arise as a result of acts 
or omissions done in the performance of official duty by their 
employees. The insurance coverage shall include coverage for the 
tortious conduct of their employees. Such insurance may be obtained from 
insurance companies licensed to engage in such business within the 
Republic of Panama.
    (b) The Contractor shall include this clause in all subcontracts.

                             (End of clause)



3552.228-75  Proposal Guarantee.

    As prescribed in 3528.101-3 (a) and (b), insert the following 
clause:

                      Proposal Guarantee (Jan 1990)

    (a) Failure to furnish a guarantee in the proper form and amount, by 
the time set for the receipt of offers, may be cause for rejection of 
the proposal.
    (b) The offeror shall furnish a guarantee in the form of a firm 
commitment, such as a bid bond, postal money order, certified check, 
cashier's check, irrevocable letter of credit, or, under Treasury 
Department regulations, certain bonds or notes of the United States. The 
amount of this guarantee shall be 20 percent of the total amount of the 
proposal price, excluding options and additives if any, or $3,000,000, 
whichever is less. The Contracting Officer will return guarantees, other 
than bid bonds, (1) to unsuccessful offerors as soon as practicable 
after the completion of the evaluation process, and (2) to the 
successful offeror upon execution of contractual documents and bonds 
(including any necessary coinsurance or reinsurance agreements), as 
required by the proposal as accepted.
    (c) If the successful offeror, upon acceptance of its bid by the 
Government within the period specified for acceptance, fails to execute 
all contractual documents or give a bond(s) as required by the 
solicitation within the time specified, the Contracting Officer may 
terminate the contract for default.
    (d) Unless otherwise specified in the proposal, the offeror will (1) 
allow 60 days for acceptance of its proposal, and (2) give bond within 
10 days after receipt of the forms by the offeror.
    (e) In the event the contract is terminated for default, the 
Contractor is liable for any cost of acquiring the work that exceeds the 
amount of its proposal, and the proposal guarantee is available to 
offset the difference.
    (f) Regarding paragraph (b) of this clause, if a bid bond is 
furnished, it must be submitted on Standard Form 24. Corporations 
executing the bond as sureties must be among those appearing on the U.S. 
Treasury Department's Circular 570, entitled ``Companies Holding 
Certificates of Authority as Acceptable Sureties on Federal Bonds and as 
Acceptable Reinsuring Companies'', and must be acting within the 
limitations set forth therein. If the contract work is to be performed 
in Panama, corporations that appear on the Panama Canal Commission's 
list of locally acceptable sureties, and that act within the limitations 
set forth therein, may be used in lieu of those appearing on Circular 
570.

                             (End of clause)



3552.228-76  Performance Bond.

    As prescribed in 3528.103-70(a), insert the following clause:

                       Performance Bond (Jan 1990)

    (a) The Contractor shall furnish a performance bond with good and 
sufficient surety or sureties in connection with the work under this 
contract on Standard Form 25, which requires that the surety or sureties 
must be among those appearing on the current U.S. Treasury Department 
Circular 570 (published in the Federal Register), and any amendments 
thereto, and must be acting within the limitations set forth therein. If 
the contract work is to be performed in Panama, corporations that appear 
on the Panama Canal Commission's list of locally acceptable sureties, 
and that act within the limitations set forth therein, may be used in 
lieu of those appearing on Circular 570. The bond is

[[Page 222]]

to be completed in accordance with the instructions on the reverse side 
of Standard Form 25.
    (b) The penal sum of such performance bond shall be 100 percent of 
the contract price. The bond must not be dated prior to the date of the 
contract and shall be furnished by the Contractor to the Contracting 
Officer not later than 30 calendar days after the date of receipt by the 
Contractor of notice of award of the contract. As used in Standard Form 
25, the term ``Government'' shall mean the ``Panama Canal Commission''.
    (c) Under the terms of Standard Form 25 and this contract, the penal 
obligation specified in paragraph (b) of this clause shall be in effect 
during the life of the contract and during all warranty periods 
stipulated in the contract.

                             (End of clause)



3552.228-77  Performance and Payment Bonds.

    As prescribed in 3528.103-70 (a) and (b), insert the following 
clause:

                Performance and Payment Bonds (Jan 1990)

    (a) General. (1) The bonds required by paragraphs (b) and (c) of 
this clause are to be completed in accordance with the instructions on 
the reverse side of the respective bond forms. Corporations executing 
the bonds as sureties must be among those appearing on the current U.S. 
Treasury Department Circular 570 (published in the Federal Register), 
and any amendments thereto, and must be acting within the limitations 
set forth therein. If the contract work is to be performed in Panama, 
corporations that appear on the Panama Canal Commission's list of 
locally acceptable sureties, and that act within the limitations set 
forth therein, may be used in lieu of those appearing on Circular 570.
    (2) The bonds must not be dated prior to the date of the contract 
and shall be furnished by the Contractor to the Contracting Officer not 
later than 30 calendar days after the date of receipt by the Contractor 
of notice of award of the contract.
    (b) Performance Bond. The Contractor shall furnish a performance 
bond on Standard Form 25 in connection with the performance of the work 
under this contract. The penal sum of such bond shall be 100 percent of 
the contract price.
    (c) Payment Bond. The Contractor shall furnish a payment bond on 
Standard Form 1416 for the protection of persons furnishing material 
and/or labor in the prosecution of the contract. The penal sum of such 
bond shall be as follows: (1) 50 percent of the contract price if such 
price is not more than $1,000,000; (2) 40 percent of the contract price 
if such price is more than $1,000,000 but not more than $5,000,000; or 
(3) $2,500,000 if the contract price is more than $5,000,000.

                             (End of clause)



3552.231-70  Travel Costs.

    As prescribed in 3531.205-46(b), insert the following clause:

                         Travel Costs (Jan 1990)

    Costs incurred by the Contractor for travel and per diem in the 
performance of this contract that are authorized elsewhere in this 
contract shall be reimbursed to the Contractor in accordance with the 
Federal Travel Regulations, prescribed by the General Services 
Administration, in effect on the dates of performance of this contract.

                             (End of clause)



3552.232-70  Contract Payments.

    As prescribed in 3532.111(a)7, insert the following clause:

                      Contract Payments (Jan 1990)

    (a) Contract payments, unless otherwise specified, will be made in 
United States currency, by check drawn on a local branch of a United 
States bank.
    (b) When the Contracting Officer determines that the value of 
materials delivered to the work site may be taken into account in 
preparing the progress payment estimate, the Contractor shall:
    (1) Compile the initial inventory list which shall be complete as 
regards to descriptions, quantities, nomenclatures, and prices, and 
shall be fully supported by certified invoices or other documentary 
evidence acceptable to the Contracting Officer. The list must be revised 
each month to show additions to the inventory, if any (supported by 
additional invoices), and deletions of material used during the month.
    (2) Submit monthly, subsequent lists for the material previously 
covered by certified invoices showing the exact status of remaining 
material based on a physical inventory.
    (3) Furnish inventory lists in duplicate at least five days prior to 
the date for submission of progress estimate for monthly payment.
    (c) In approving payments for material inventories, the Contracting 
Officer will authorize payment of 75 percent of the cost of material as 
part of the monthly payments, provided, however, that:
    (1) Any line item with a total value of less than $100 will be 
deleted; and
    (2) The total value of the inventory, exclusive of deleted line 
items, exceeds $1,000.

[[Page 223]]

                             (End of clause)



3552.232-71  Availability of Funds.

    As prescribed in 3532.705-1, insert the following clause:

                    Availability of Funds (Jan 1990)

    The authorization of performance of work under this contract during 
the initial contract period and any extension period(s) is contingent 
upon the availability of funds to procure this service. If the contract 
is awarded or extended, the Panama Canal Commission's obligation beyond 
the end of the fiscal year (September 30) in which the award or 
extension is made is contingent upon the availability of funds from 
which payment for the contract services can be made. No legal liability 
on the part of the Panama Canal Commission for payment of any money 
beyond the end of each fiscal year (September 30) shall arise unless or 
until funds are made available to the Contracting Officer for 
performance and written notice of such availability is given to the 
Contractor.

                             (End of clause)



3552.232-72  Presentation of Statement of Release From Claims.

    As prescribed in 3532.806(a), insert the following clause:

       Presentation of Statement of Release From Claims (Jan 1990)

    As a condition for final payment, the Contractor shall present a 
release of all claims against the Government arising by virtue of this 
contract. The release shall be applicable to all claims except those 
that the Contractor has specifically excepted in stated amounts from the 
operation of the release. A release may also be required of the assignee 
if the Contractor's claim to amounts payable under this contract has 
been assigned under the Assignment of Claims Act of 1940 (31 U.S.C. 203 
and 41 U.S.C. 15). The release is due within 14 days of final 
acceptance.

                             (End of clause)



3552.232-73  Invoices.

    As prescribed in 3532.111(a)(8), insert a clause substantially as 
follows:

                           Invoices (Jan 1990)

    (a) Invoices shall be submitted in an original and two copies to the 
office designated elsewhere in this contract.
    (b) To constitute a proper invoice for supply or service (other than 
architect-engineer service) contracts, the invoice must include the 
items listed in paragraph (a)(4), subdivisions (i) through (viii) of 
clause 52.232-25, Prompt Payment. The invoice must be accompanied by a 
copy of the packing list, showing weights and measurements (gross and 
net) and contents of each package, if applicable. If items are mailed, 
the insurance parcel post receipt or copy thereof must accompany the 
invoice.
    (c) To constitute a proper invoice for construction contracts, the 
invoice must include the items listed in paragraph (a)(2), subdivisions 
(i) through (ix) of clause 52.232-27, Prompt Payment for Construction 
Contracts.
    (d) To constitute a proper invoice for architect-engineer services, 
the invoice must include the items listed in paragraph (a)(3), 
subdivisions (i) through (viii) of clause 52.232-26, Prompt Payment for 
Fixed-Price Architect-Engineer Contracts.
    (e) If this contract requires a written release from the Contractor 
with respect to claims, the release must accompany the invoice.

                             (End of clause)



3552.236-70  Mailing of Correspondence and Bids.

    As prescribed in 3536.371(a)(6), insert the following provision:

              Mailing of Correspondence and Bids (Jan 1990)

    (a) Prospective bidders may submit inquiries concerning the 
specifications by writing the following:

(For local bidders)
Specifications and Estimates Branch
Engineering Division
Engineering and Construction Bureau
Balboa, Republic of Panama

(For other bidders)
Specifications and Estimates Branch
Engineering Division
Engineering and Construction Bureau
APO Miami 34011-5000

    (b) Bids to be mailed shall be addressed as follows:

(For local bidders)
Contracting Officer
Engineering and Construction Bureau
Panama Canal Commission
Balboa, Republic of Panama

(For other bidders)
Contracting Officer
Engineering and Construction Bureau
Panama Canal Commission
APO Miami 34011-5000

                           (End of provision)



3552.236-71  Additive Items.

    As prescribed in 3536.371(a)(7), insert the following provision:

[[Page 224]]

                        Additive Items (Jan 1990)

    (a) The low bidder for purposes of award shall be the conforming 
responsive bidder offering the lowest total price for the base bid item 
plus the largest number of additive bid items that can be awarded in the 
numerical order of priority listed in the schedule within the funds 
determined by the Contracting Officer to be available on the date of bid 
opening.
    (b) For example, when the amount of available funds is $100,000, and 
a bidder's base bid and bid for successive additives are $85,000, 
$10,000, $8,000, $6,000, and $4,000, respectively, the total amount of 
this bid for purposes of award would be $95,000 for the base bid plus 
the first additive, with the second, third and forth additives being 
omitted because the second additive ($8,000) would cause the total bid 
to exceed $100,000. If, for more than one bidder, the lowest total price 
for the base bid item plus the largest number of additive bid items that 
can be awarded are equal, then the low bidder for purposes of award 
shall be the one submitting the lowest price for the base bid item.
    (c) After the low bidder has been determined, the Contracting 
Officer shall be free to award the contract for the base bid item and 
any quantity of the additive bid items, but only in the numerical order 
of priority listed in the schedule, and provided that the total price is 
within the amount of funds available on the date of award and that the 
award does not exceed the price offered by any other conforming 
responsive bidder for the same bid items.
    (d) The Contracting Officer may reject a bid as nonresponsive if it 
is materially unbalanced as to prices for any of the different bid 
items. A bid is unbalanced when it is based on prices significantly less 
than cost for some work and prices which are significantly overstated 
for other work.

                           (End of provision)

    Alternate I (Jan 1990) If the additives may be awarded with the base 
bid item in any combination, substitute the following text in place of 
the basic text:

    (a) The low bidder for purposes of award shall be the conforming 
responsive bidder offering the lowest total price for the base bid item 
plus, in the numerical order of priority listed in the schedule, the 
largest number of additive bid items that can be awarded within the 
funds determined by the Contracting Officer to be available on the date 
of bid opening.
    (b) If, for all bidders, inclusion of the next additive bid item in 
the listed order of priority would make the award exceed such available 
funds, it shall be omitted and the next subsequent additive bid item or 
items shall be included if the prices on one or more bids allow award 
thereon within the funds available. For example, when the amount of 
available funds is $100,000, and a bidder's base bid and bid for 
successive additives are $85,000, $10,000, $8,000, $6,000, and $4,000, 
respectively, the total amount of this bid item for purposes of award 
would be $99,000 for the base bid plus the first ($10,000) and fourth 
($4,000) additives. All bids shall be evaluated and the low bidder 
determined on the basis of the same additive bid items, as above 
provided. If, for more than one bidder, the lowest total price for the 
base bid item plus the largest number of additive bid items that can be 
awarded are equal, then the low bidder for purposes of award shall be 
the one submitting the lowest price for the base bid item.
    (c) After the low bidder has been determined, the Contracting 
Officer shall be free to award the contract for the base bid item and 
any quantity and combination of the additive bid items regardless of 
their numerical order of priority listed in the schedule, provided that 
the total price is within the amount of funds available on the date of 
award and that the award does not exceed the price offered by any other 
conforming responsive bidder for the same bid items.
    (d) The Contracting Officer may reject a bid as nonresponsive if it 
is materially unbalanced as to prices for any of the different bid 
items. A bid is unbalanced when it is based on prices significantly less 
than cost for some work and prices which are significantly overstated 
for other work.



3552.236-72  Cost Limitation.

    As prescribed in 3536.371(a)(9), insert the following provision:

                       Cost Limitation (Jan 1990)

    A bid which does not contain separate bid prices for the items 
identified as subject to a cost limitation may be considered 
nonresponsive. By signing its bid, the bidder certifies that each price 
bid on items subject to a cost limitation includes an appropriate 
apportionment of all applicable estimated costs, direct and indirect, as 
well as overhead and profit. Bids may be rejected which (1) have been 
materially unbalanced for the purpose of bringing affected items within 
cost limitations, or (2) exceed the cost limitations unless such 
limitations have been waived by the Commission's Procurement Executive 
prior to award.

                           (End of provision)



3552.236-73  Scope of Work.

    As prescribed in 3536.570(k), insert the following clause:

[[Page 225]]

                        Scope of Work (Jan 1990)

    The Contractor shall furnish all plant, materials, equipment, 
supplies, labor and transportation, including, fuel, power, water 
(except any materials, equipment, utility or service, if any, specified 
herein to be furnished by the Commission), as required to accomplish all 
work under the contract, in strict accordance with the specifications, 
schedules, and drawings, all of which are made a part hereof, and 
including such detail drawings as may be furnished by the Contracting 
Officer from time to time during the prosecution of the work in 
explanation of said drawings.

                             (End of clause)



3552.236-74  Work Sites, Yards, Shops, and Offices.

    As prescribed in 3536.570(l), insert the following clause:

            Work Sites, Yards, Shows, and Offices (Jan 1990)

    (a) The term ``work site'' will embrace all areas wherein operations 
are conducted by the Contractor in connection with the contract, 
including Commission work areas, plant, shops, yards, offices, camps and 
other facilities. The Contractor may be permitted to use areas within 
the Canal Operating Area for storage-of-work purposes on a temporary 
basis.
    (b) Prior to commencement of work, the Contractor shall, upon 
request, submit for the approval of the Contracting Officer, prints in 
quadruplicate, showing the locations of its major plant, offices, 
buildings, shops, storage yards, and other construction appurtenances 
which it proposes to construct. The Contractor shall remove any 
structure which it may construct in Canal Operating Areas, and restore 
the work site to its original condition after completion of the work.
    (c) If, at any time during the progress of the work, areas which 
have been allocated to the Contractor are not being used by the 
Contractor or are not essential to the future execution of the work, as 
determined by the Contracting Officer, the Contractor shall, when so 
directed, promptly clean up and vacate such areas at no expense to the 
Commission. The Contractor shall keep the buildings and grounds in use 
by the contractor at the work site in an orderly and sanitary condition, 
subject to the approval of the Contracting Officer.
    (d) Only equipment and materials required or used in connection with 
the work under the contract may be stored in Canal Operating Areas. Upon 
completion of the contract, and before final payment is made, the 
Contractor shall remove all equipment and materials from such areas.

                             (End of clause)



3552.236-75  Work Time Limitations.

    As prescribed in 3536.570(m), insert the following clause:

                    Work Time Limitations (Jan 1990)

    No work shall be done on Sundays or on days treated as a holiday for 
employees of United States Government agencies in the Republic of 
Panama, unless authorized or directed by the Contracting Officer. 
Requests by the Contractor to work on such days must be made in writing 
at least three days in advance.

                             (End of clause)



3552.236-76  Accident Prevention.

    As prescribed in 3536.570(n), insert the following clause:

                     Accident Prevention (Jan 1990)

    (a) In performing this contract, the Contractor shall provide for 
protecting the lives and health of employees and other persons; 
preventing damage to property, materials, supplies and equipment; and 
avoiding work interruptions. For these purposes, the Contractor shall--
    (1) Provide appropriate safety barricades, signs, and signal lights;
    (2) Comply with the standards issued by the Secretary of Labor at 29 
CFR part 1926 and 29 CFR part 1910; and
    (3) Ensure that any additional measures the Contracting Officer 
determines to be reasonably necessary for this purpose are taken.
    (b) The Contractor shall maintain an accurate record of exposure 
data on all accidents incident to work performed under this contract 
resulting in death, traumatic injury, occupational disease, or damage to 
property, materials, supplies, or equipment. The Contractor shall report 
this data in the manner prescribed by the Contracting Officer.
    (c) The Contracting Officer shall notify the Contractor of any 
noncompliance with these requirements and of the corrective action 
required. This notice, when delivered to the Contractor or the 
Contractor's representative at the site of the work, shall be deemed 
sufficient notice of the noncompliance and corrective action required. 
After receiving the notice, the Contractor shall immediately take 
corrective action. If the Contractor fails or refuses to take corrective 
action promptly, the Contracting Officer may issue an order stopping all 
or part of the work until satisfactory corrective action has been taken. 
The Contractor shall not base any claim or request for equitable 
adjustment for

[[Page 226]]

additional time or money on any stop order issued under these 
circumstances.
    (d) The Contractor shall call to the attention of the Contracting 
Officer or his representative any unsafe condition which is not within 
the power of the Contractor to correct but which could be corrected by 
others.
    (e) The Contractor shall, when performing work of an electrical 
nature, or when working in close proximity to electrical equipment or 
circuits, observe the following:
    (1) Be responsible for determining that the facility on which his 
men are to work is de-energized, isolated, and identified with accepted 
tag out/lock out procedures. The Commission will de-energize or isolate 
the cable, conductor, bus, circuit breaker, or line on which the 
Contractor desires to work. The Commission will also re-energize the 
cable, conductor, bus, circuit breaker, or line upon which the 
Contractor has completed work and which he certifies is ready for 
service.
    (2) When performing work, such as painting, roofing or modifying 
buildings, in close proximity to electric wires, work shall be scheduled 
in such a manner that these wires shall be de-energized during the 
period men are working around them. Arrangements shall be made with the 
Contracting Officer's representative for de-energizing such service 
wires and, unless otherwise specified, work requests shall be furnished 
by the Contractor to the Commission's Electrical Division to cover such 
work.
    (3) Painting, alterations, and additions to Commission facilities 
frequently require work to be performed in close proximity to electrical 
equipment and circuits within buildings. When such work, in the opinion 
of the Contracting Officer, requires the de-energization of circuits, 
arrangement for de-energizing services will be made by the Contracting 
Officer with the agency involved.
    (4) De-energization of circuits required in paragraphs (e)(2) and 
(3) of this clause shall be scheduled in such a manner that prolonged 
service interruptions shall be avoided.
    (f) In addition to the above, the Contractor shall:
    (1) Submit, within 30 calendar days after date of award, a written 
outline of his proposed safety program for the contract. The safety 
program shall include frequent and appropriate safety training sessions 
for employees as a regular and integral part of the contract activities.
    (2) Submit for approval a list of the personal protective equipment, 
by type and manufacturer, to be used by employees in hazardous 
occupations.
    (3) Confer with representatives of the Contracting Officer to 
discuss and develop mutual understandings relative to administration of 
the overall safety program.
    (g) The Contractor shall be responsible for its subcontractors' 
compliance with this clause.

                             (End of clause)

[55 FR 7664, Mar. 2, 1990; 55 FR 38331, Sept. 18, 1990]



3552.236-77  Working in Confined Spaces.

    As prescribed in 3536.570(o), insert the following clause:

                  Working in Confined Spaces (Jan 1990)

    The Contractor shall comply with the Commission's policy regarding 
work to be performed in confined or enclosed spaces. This policy is set 
forth in a pamphlet entitled ``Panama Canal Commission Confined Spaces 
Policy'', which will be made available to the Contractor, or a 
prospective contractor, upon request to the Contracting Officer or his 
representative.

                             (End of clause)



3552.236-78  Safety Sign.

    As prescribed in 3536.570(p), insert the following clause:

                         Safety Sign (Jan 1990)

    The Contractor shall construct a safety sign at the work site at a 
location directed by the Contracting Officer. The sign shall be 6 feet 
by 4 feet in size and shall conform to the requirements of the sketch 
attached at the end of these General Conditions. The sign shall be 
erected as soon as possible, but not later than 10 days after work is 
initiated at the work site. No separate payment will be made for 
erecting and maintaining the safety sign.

                             (End of clause)



3552.236-79  Protection of Material and Work.

    As prescribed in 3536.570(q), insert the following clause:

               Protection of Material and Work (Jan 1990)

    The Contractor shall protect and preserve all material, supplies and 
equipment of every description (including property which may be 
furnished or owned by the Commission) and all work performed. All 
reasonable requests of the Contracting Officer to enclose or specially 
protect such property shall be complied with. If, as determined by the 
Contracting Officer, material, equipment, supplies, and work performed 
are not adequately protected by the Contractor, such property

[[Page 227]]

may be protected by the Commission, and the cost thereof may be charged 
to the Contractor or deducted from any payments due the Contractor.

                             (End of clause)



3552.236-80  Toilet Facilities.

    As prescribed in 3536.570(r), insert the following clause:

                      Toilet Facilities (Jan 1990)

    Unless otherwise noted, the Contractor shall provide and maintain 
adequate toilet facilities at the work site for the use of all personnel 
engaged in the work under the contract. The number, types and locations 
of such toilet facilities shall be approved by the Contracting Officer. 
These facilities, where connection to the sanitary sewer system is 
possible, will be connected and disconnected to the sewer system by the 
Commission at the expense of the Contractor. The toilet facilities shall 
be maintained by the Contractor in a clean and sanitary condition. Upon 
completion of the work, all toilet facilities shall be removed by the 
Contractor.

                             (End of clause)



3552.236-81  Drinking Water.

    As prescribed in 3536.570(s), insert the following clause:

                        Drinking Water (Jan 1990)

    Unless otherwise noted, the Contractor shall provide suitable 
drinking water and sanitary dispensing facilities for the Contractor's 
employees.

                             (End of clause)



3552.236-82  Contract Bid Breakdown.

    As prescribed in 3536.570(t), insert the following clause:

                    Contract Bid Breakdown (Jan 1990)

    The Contractor shall, within 10 days after receipt of the Notice to 
Proceed, or on receipt of request, submit for approval a breakdown of 
its bid in a form to be outlined by the Contracting Officer. 
Supplementary bid breakdowns of all or part of the bid shall be 
furnished if requested by the Contracting Officer. Payments to the 
Contractor shall be based upon the information presented in the approved 
bid breakdown.

                             (End of clause)



3552.236-83  Descriptive Data and Correspondence.

    As prescribed in 3536.570(u), insert the following clause:

             Descriptive Data and Correspondence (Jan 1990)

    (a) All catalogs, operating instructions, descriptive literature, 
references, specifications, drawings and notes relevant to the equipment 
furnished under the specifications, and correspondence shall be in the 
English language. All drawings shall be prepared in accordance with 
American Standard Drafting Room Practice as approved by the American 
National Standard Institute (ANSI) standards and in accordance with the 
following:
    (1) All dimensions shall be given in feet and inches.
    (2) All weights shall be avoirdupois scales.
    (3) All volume measurements shall be in cubic feet, cubic inches or 
U.S. gallons (231 cu. in/gal).
    (4) All heat quantities shall be in British thermal units (Btu's).
    (5) All instruments shall read in units of the English system, 
except gallons shall be U.S. gallons as noted in paragraph (a)(3) of 
this clause.
    (b) When required by the various sections of these specifications or 
when requested by the Contracting Officer, seven (7) copies (unless 
otherwise specified) of the following items shall be submitted by the 
Contractor to the Contracting Officer for approval.
    (1) Material Lists: Before any materials, fixtures or equipment are 
purchased, the Contractor shall submit a complete list of materials, 
fixtures and equipment to be incorporated in the work, together with the 
names and addresses of the manufacturers and their catalog numbers and 
trade names. A separate complete list shall be furnished for the 
equipment called for under each section of the specifications. No 
consideration will be given to partial lists submitted from time to 
time.
    (2) Descriptive Data: In order to establish quality or suitability 
of materials, fixtures and equipment, the Contractor shall furnish 
detailed information and descriptive data for the various items. 
Approval of items will be based on manufacturer's published ratings. Any 
items which are not in accordance with the specifications will be 
rejected. The product of any reputable manufacturer regularly engaged in 
the commercial production of specified equipment will not be excluded on 
the basis of minor differences, provided all essential requirements of 
this specification relative to materials, capacity, and performance are 
met.
    (3) Samples: (i) The Contractor shall submit all samples within a 
reasonable time before use to permit inspection and testing. Samples of 
materials subject to laboratory tests require, generally, a minimum of 
20 days for tests after receipt of sample by the Contracting Officer. 
However, considerably more

[[Page 228]]

time may be required depending on the nature of the tests and the 
ability of the laboratory to take care of current testing requirements.
    (ii) Samples of the sizes and numbers required by the Contracting 
Officer or specified in the contract shall be submitted (except when 
this requirement is waived by the Contracting Officer) with label on 
each, giving contract number, specification paragraph, name and 
materials, trade name, name of manufacturer, place of origin, name and 
location of building on which to be used, and name of Contractor 
submitting same.
    (iii) Samples shall be so packed as to ensure delivery at 
destination in good condition and with all transportation charges 
prepaid by sender.
    (iv) Samples of materials not subject to destructive tests, when 
approved, will be kept on file in the office of the Contracting Officer 
until the completion of the work, except samples of hardware or other 
items approved by the Contracting Officer, which may be suitably marked 
for identification and installed in the work. If the Contractor desires 
an approved sample for the Contractor's own file or for a manufacturer, 
the Contractor shall submit sufficient additional samples to permit the 
desired distribution. Samples approved or rejected will be returned to 
the Contractor only at the Contractor's request and expense.
    (v) Samples selected will be tested in accordance with the 
requirements of the applicable material specifications. If a sample 
fails to meet specification requirements, the cost of testing shall be 
at the expense of the Contractor. Failure of samples to pass specified 
requirements will be sufficient cause for refusal to consider for this 
work any further samples from the manufacturer whose materials have 
failed to pass the required tests.
    (c) Submittals: Each submittal shall be accompanied by the required 
number of Panama Canal Form 3062, Submittal Data For Approval, fully 
executed and certified by the Contractor. When possible, a single 
transmittal shall be used for all work of a section of the 
specifications, but in no instance shall a transmittal include work of 
more than one section. Each copy of each item submitted for approval 
shall also be properly identified as to the subject matter indicated 
thereon, the item of equipment or material to which it pertains, and the 
contract number under which it is submitted. Each point of difference 
between the proposed equipment or material and the specified equipment 
or material shall be clearly indicated on the submittal. The submittals 
shall be complete and shall be checked by both the materials or 
equipment supplier and the Contractor, and shall contain all required 
and necessary detailed information. Fabrication of the equipment and 
construction where involved shall not start until the submittals have 
been approved.
    (d) If approved by the Contracting Officer, each copy of the 
submittal will be identified as having received such approval by being 
stamped either ``Approved'' or ``Approved as Noted'', and one set will 
be returned to the Contractor. Such approved submittals need not be 
resubmitted. If, however, the set returned to the Contractor is stamped 
``Disapproved'', such submittal shall be resubmitted as expeditiously as 
possible. If the Contractor desires to have more than one copy returned 
for the Contractor's use, the Contractor must increase the number of 
copies submitted accordingly and must so indicate on the transmittal 
form.
    (e) The approval of submittals by the Contracting Officer shall not 
be construed as a complete check, but will indicate only that, in 
general, the materials, equipment, system, arrangement, detailing and 
method of construction are satisfactory. Approval will not relieve the 
Contractor of the responsibility for any error or omission which may 
exist, and the Contractor shall be responsible for the dimensions and 
design of adequate connections, details, satisfactory construction, 
installation and operation of all work in accordance with the contract 
provisions. Approval shall be subject to final, in-place inspection of 
the work.

                             (End of clause)



3552.236-84  Instruction Books.

    As prescribed in 3536.570(u), insert the following clause:

                      Instruction Books (Jan 1990)

    The Contractor shall deliver to the Contracting Officer nine (9) 
copies (unless otherwise specified) of all instruction books as called 
for under the various sections of the Technical Conditions. The 
instruction books shall be submitted and approved before work can be 
started on installation of the equipment to which they pertain. Each 
copy of the instruction books shall provide legible, complete and clear 
instructions, descriptions and data for installation, operation, 
maintenance and repair of the equipment as well as replacement parts 
lists. Each copy of an instruction book shall be bound in separate 
durable covers. Method of binding shall be post type or equivalent to 
permit insertion of replacement pages. Ring or spiral type loose leaf 
binders are not acceptable. Each copy shall be properly and indelibly 
identified with the name of the project, the contract number, and the 
name and location of the equipment to which it pertains.

[[Page 229]]

                             (End of clause)



3552.236-85  Record Drawings.

    As prescribed in 3536.570(u), insert the following clause:

                       Record Drawings (Jan 1990)

    The Contractor shall, during the progress of the work, keep a 
careful and current record, on a separate set of contract drawings, of 
all changes and corrections from the layouts shown on the drawings. 
These drawings shall be available for inspection at all times at the 
work site indicated by the drawings. If the Contracting Officer 
determines that the record drawings are seriously out of date, the 
Contracting Officer may require the Contractor to cease physical work on 
the portion of the work covered by the drawings until the drawings are 
brought up to date. Any costs of delays resulting from such actions by 
the Contracting Officer shall be borne by the Contractor. Upon 
completion, the Contractor shall revise one set of prints of contract 
drawings, furnished by the Contracting Officer, showing the work as 
actually constructed. These drawings shall be delivered to the 
Contracting Officer within 14 calendar days after receipt of the 
``Acceptance of Work'' letter. All revisions made to the contract 
drawings shall be shown so that they stand out against the unchanged 
items in the drawing.

                             (End of clause)



3552.236-86  Restricted Areas.

    As prescribed in 3536.570(v), insert the following clause:

                       Restricted Areas (Jan 1990)

    (a) If any of the work is located within a restricted area (such as 
locks areas, power stations, water purification plants, pump stations, 
and industrial areas), installation clearances, at no cost to the 
Contractor, will be required for all employees who must work in the 
restricted area. The Contractor shall submit to the Contracting Officer 
a listing of all employees to be cleared. The listing should be 
submitted at least 15 days before the anticipated starting date and 
should include the full name and cedula or identification card number of 
each employee and must be in alphabetical order.
    (b) Employees of the Contractor must carry their cedulas or 
identification cards at all times and produce them upon request of 
authorized personnel. The Contractor shall ensure that the Contractor's 
employees remain in the immediate area of work and do not wander 
indiscriminately about the restricted areas.

                             (End of clause)



3552.236-87  Surplus Space.

    As prescribed in 3536.570(y), insert the following clause:

                        Surplus Space (Jan 1990)

    Surplus space in Commission buildings, facilities, or land areas may 
be rented by Commission contractors, or by subcontractors through and in 
the name of a Commission contractor, for use in support of contract 
performance upon a written request by the Contractor to the Contracting 
Officer. The request shall include specific information regarding the 
location desired, the number of square feet required, and the type of 
activities to be conducted. If the request is accepted, the space 
assignment will be administered under the terms of a ``Letter of 
Authorization'' (LOA). Failure by the Contractor to comply with any of 
the terms of the LOA, or to completely remove itself from the rented 
space after the Contracting Officer has advised the Contractor that the 
LOA is terminated, shall be construed as a violation of this contract 
clause and shall entitle the Contracting Officer to take whatever action 
is appropriate under the contract, including termination for default and 
the withholding of final payment.

                             (End of clause)



3552.243-70  Modification Proposals--Price Breakdown.

    As prescribed in 3543.205 insert the following clause:

           Modification Proposals--Price Breakdown (Jan 1990)

    The Contractor shall furnish an itemized price breakdown, as 
required by the Contracting Officer, with the Contractor's proposal in 
connection with a contract modification. Unless otherwise directed, the 
breakdown shall be in sufficient detail to permit an analysis of all 
material, labor, equipment, subcontract and overhead costs as well as 
profit, and shall cover all work involved to accomplish the 
modification, whether deleted, added or changed. Any amount claimed for 
subcontracts shall be supported by a similar price breakdown. In 
addition, if the proposal includes a time extension, a justification 
therefore shall also be furnished. The proposal, together with the price 
breakdown and time extension justification, shall be furnished by such 
date as may be specified by the Contracting Officer.

[[Page 230]]

                             (End of clause)



3552.244-70  Subcontractors.

    As prescribed in 3536.570(x), insert the following clause:

                        Subcontractors (Jan 1990)

    If subcontracts have been awarded for work under this contract, the 
Contractor shall submit to the Contracting Officer, within 30 calendar 
days after the date of award, a statement on the Commission's standard 
``Subcontractors'' form setting forth the name and address of the 
subcontractor, a summary description of the work subcontracted and a 
description of subcontractor's previous experience in related work. If, 
at any time, the Contracting Officer determines that any subcontractor's 
performance is unsatisfactory, the Contracting Officer will notify the 
contractor accordingly, and steps will be taken immediately for 
cancellation of such subcontract. Subletting by subcontractors shall be 
subject to the same regulations. Nothing contained in this contract 
shall create any contractual relation between the subcontractor and the 
Commission. Subcontractors and their employees shall be considered to be 
employees of the Contractor.

                             (End of clause)



3552.247-70  Evaluation of Delivery Terms in Contract Awards.

    As prescribed in 3547.370, insert the following provision:

       Evaluation of Delivery Terms in Contract Awards (Jan 1990)

    (a) When competing offers are received which specify the two 
different allowable terms of delivery, the offers will be evaluated at 
the actual or constructive landed cost in the Republic of Panama in 
accordance with the procedures stated below. In this connection, and for 
evaluation purposes only, the point of delivery will be the Port of 
Balboa, Panama or the Port of Cristobal, Panama for all offerors. 
Therefore, offerors quoting on an f.o.b. destination New Orleans basis 
shall furnish the total cubic measurement for each item being offered in 
order to apply the following procedures:
    (1) F.o.b. Destination New Orleans: Offers quoting delivery in the 
United States are required on an f.o.b. destination New Orleans, 
Louisiana basis since transportation from New Orleans will be by a 
vessel, operating pursuant to a U.S. Government contract, which will 
discharge at the Port of Balboa. In order to compare these offers with 
offers quoting c.i.f. destination Panama, the following factors will be 
applied:
    (i) Ocean freight, New Orleans to Balboa $-------- (Contracting 
Officer insert appropriate amount) per measurement ton of 40 cubic feet 
(MTON). This rate includes stevedoring and handling fees.
    (ii) A self-insured loss factor of one percent of the dollar value 
of the offer price.
    (iii) If the delivery port specified in the Commission solicitation 
is Cristobal, transportation from Balboa to Cristobal will be calculated 
at the rate of $-------- (Contracting Officer insert appropriate amount) 
per MTON.
    (2) C.i.f. Destination Panama: Foreign offerors proposing to ship 
from foreign countries, U.S. offerors preferring to ship directly to 
Panama, and Panamanian offerors proposing to ship from stock within the 
Republic of Panama, are required to ship on a c.i.f. Balboa, Panama or 
Cristobal, Panama basis, as applicable.
    (b) Failure to furnish the total cubic measurements of the 
individual items could result in the rejection of the offer. Moreover, 
if actual total cubic measurements vary from the information furnished 
and the award was made to the Contractor on the constructive cost based 
on the erroneous information, the Contractor will be charged for the 
difference between the actual cost and the price of the next low 
responsive offeror.

                           (End of provision)



PART 3553_FORMS--Table of Contents




Sec.
3553.000 Scope of part.

                         Subpart 3553.1_General

3553.107 Obtaining forms.

                  Subpart 3553.2_Prescription of Forms

3553.200 Scope of subpart.
3553.213 Small purchase and other simplified purchase procedures (Forms 
          1010, 1820, 1821, 1822, 2008, 3083, 3163, 3163-MTD, 7071, 
          7074).
3553.215 Contracting by negotiation (Form 6122).
3553.236 Construction and architect-engineer contracts (Form 3062).

                  Subpart 3553.3_Illustration of Forms

3553.300 Scope of subpart.

    Authority: 40 U.S.C. 486(c).

    Source: 55 FR 7673, Mar. 2, 1990, unless otherwise noted.

[[Page 231]]



3553.000  Scope of part.

    This part prescribes Panama Canal Commission forms to be used in 
various acquisitions and other information pertaining to the forms.



                         Subpart 3553.1_General



3553.107  Obtaining forms.

    Commission forms may be obtained from the cognizant Commission 
contracting office or by written request as indicated below:
    (a) For all forms prescribed at 3553.213, write to: Panama Canal 
Commission, Logistical Support Division, APO Miami 34011-5000;
    (b) For the forms prescribed at 3553.215 and 3553.236, write to: 
Panama Canal Commission, Construction Division, APO Miami 34011-5000.



                  Subpart 3553.2_Prescription of Forms



3553.200  Scope of subpart.

    This subpart prescribes Commission forms for use in the acquisition 
of supplies and services, including construction. The subpart is 
arranged by subject matter in the same order as, and is keyed to, the 
parts of the PAR in which the form usage requirements are addressed.



3553.213  Small purchase and other simplified purchase procedures 
(Forms 1010, 1820, 1821, 1822, 2008, 3083, 3163, 3163-MTD, 7071, 7074).

    The following forms are prescribed as stated below for use in small 
purchases, orders under existing contracts or agreements, and orders 
from required sources of supplies and services:
    (a) Panama Canal Form No. 1010, Purchase Order. This form may be 
used by the Inventory Management Branch in lieu of Optional Forms 347 
and 348 for the purposes specified in 3513.505-2(a).
    (b) Panama Canal Form No. 1820, Purchase Order. This form may be 
used by the Purchasing and Contract Branch in lieu of Optional Form 347 
for the purposes specified in 3513.505-2(b).
    (c) Panama Canal Form No. 1821, Purchase Requisition. This is a 6-
sheet snap-out form. The first, fifth, and sixth sheets are entitled 
``Purchase Requisition'' (the second, third and fourth sheets are 
explained in following paragraph (d)). The purchase requisition is an 
internal document that is prescribed for use only by Commission 
activities to request purchasing action by the Purchasing and Contracts 
Branch (see 3513.505-70).
    (d) Panama Canal Form No. 1821, Request for Quotation. This is a 6-
sheet snap-out form. The second, third and fourth sheets are entitled 
``Request for Quotation'' (the first, fifth, and sixth sheets are 
explained in paragraph (c) of this section). As specified at 
3513.107(a)(4)(i), this form may be used by the Purchasing and Contracts 
Branch in lieu of Standard Form 18 for the solicitation of nonstock 
items and services.
    (e) Panama Canal Form No. 1822, Request For Quotation Continuation. 
As specified at 3513.107(a)(4)(ii), this form may be used with Panama 
Canal Form No. 1821 when additional space is needed.
    (f) Panama Canal Form No. 2008, This Is A Request For Prices; It Is 
Not An Order. As specified at 3513.107(a)(4)(iii), this form may be used 
by the Inventory Management Branch in lieu of Standard Form 18 for the 
solicitation of standard stock items.
    (g) Panama Canal Form No. 3083, Purchase Order Continuation. As 
specified at 3513.505-2(c), this form may be used with Panama Canal Form 
No. 1820, in lieu of Optional Form 348, when additional space is needed.
    (h) Panama Canal Form No. 3163, Division Purchase Order. As 
specified at 3513.505-2(d), this form may be used by all activities 
having contracting authority in lieu of Optional Form 347 for the 
decentralized procurement of supplies and services.
    (i) Panama Canal Form No. 3163-MTD, Division Purchase Order. As 
specified at 3513.505-2(e), this form may be used by the Motor 
Transportation Division and the New Orleans Branch, Logistical Support 
Division in lieu of Optional Form 347 for purchases of nonstandard stock 
automotive repair parts that do not exceed dollar amounts established by 
the General Services Director.
    (j) Panama Canal Commission Form 7071, General Contract Clauses and 
Provisions, Small Purchases. As specified at

[[Page 232]]

3513.107(a)(4)(iv), this form shall be forwarded to prospective 
suppliers together with either Panama Canal Form No. 1821 or Panama 
Canal Form No. 2008, as applicable.
    (k) Panama Canal Commission Form 7074, Information Sheet. As 
specified at 3513.107(a)(4)(iv), this form shall be forwarded to 
prospective suppliers together with either Panama Canal Form No. 1821 or 
Panama Canal Form No. 2008, as applicable.



3553.215  Contracting by negotiation (Form 6122).

    As specified at 3515.804-6, Panama Canal Form No. 6122, Cost 
Breakdown, may be used by the contracting officer to require contractors 
to submit information for cost or price analysis in connection with 
requests for proposals or modifications not exceeding $25,000.



3553.236  Construction and architect-engineer contracts (Form 3062).

    As specified at 3536.571, Panama Canal Form 3062, Submittal Data For 
Approval, shall be used by contractors as a transmittal document when 
data is to be submitted for the contracting officer's approval pursuant 
to FAR clause 52.236-5 or clause 3552.236-83 of this regulation.



                  Subpart 3553.3_Illustration of Forms



3553.300  Scope of subpart.

    PAR forms are not illustrated in the PAR. Persons wishing to obtain 
copies of Commission forms prescribed in the PAR may do so in accordance 
with 3553.107.

[[Page 233]]



              SUBCHAPTER I_AGENCY SUPPLEMENTARY REGULATIONS





PART 3570_ACQUISITION OF PANAMANIAN SUPPLIES AND SERVICES--Table of Contents




Sec.
3570.000 Scope of part.

                  Subpart 3570.1_Panamanian Preference

3570.101 Determination and definitions.
3570.102 Policy.

    Authority: 40 U.S.C. 486(c); Article IX of the Agreement in 
Implementation of Article III of the Panama Canal Treaty of 1977.

    Source: 55 FR 7674, Mar. 2, 1990, unless otherwise noted.



3570.000  Scope of part.

    This part provides guidance on implementation of Article IX of the 
Agreement in Implementation of Article III of the Panama Canal Treaty of 
1977 as it relates to the preferential acquisition of supplies and 
services obtainable in the Republic of Panama. (The pertinent Article IX 
language is set forth at 3525.801-74.)



                  Subpart 3570.1_Panamanian Preference



3570.101  Determination and definitions.

    (a) It has been determined by the Administrator of the Panama Canal 
Commission that the acquisition of supplies and services obtainable in 
the Republic of Panama is required under the conditions contemplated by 
Article IX.
    (b) For the purposes of this determination, the following words and 
terms, as used in Article IX and this part 3570, shall have the meanings 
stated below:
    Comparable in quality and price means the supplies or services (1) 
must conform to the purchase description, specifications, or statement 
of work that sets forth the Commission's requirements; and (2) can be 
acquired at a price equal to or lower than the price for similarly 
conforming supplies or services obtainable from sources outside the 
Republic of Panama.
    Goods means manufactured or unmanufactured articles, materials and 
supplies.
    Obtainable in the Republic of Panama means the supplies or services 
can be obtained from sources in the Republic of Panama.
    Panamanian origin means goods that are grown, mined, or produced in 
the Republic of Panama; or in the case of goods which consist in whole 
or in part of materials from another country, have been substantially 
transformed by processes performed in the Republic of Panama into new 
and different articles of commerce with a name, character, or use 
distinct from that of the article or articles from which they were so 
transformed.
    Supplies, pursuant to the definition in FAR 2.101, means ``all 
property except land or interest in land.'' Accordingly, the term 
includes construction.



3570.102  Policy.

    (a) When supplies or services can be obtained from sources both 
within and without the Republic of Panama, and the following conditions 
exist, preference shall be afforded to those sources within Panama to 
the maximum extent possible:
    (1) The supplies or services can be provided at the time they are 
required;
    (2) The supplies or services are comparable in quality and price to 
those that can be obtained from sources outside Panama; and
    (3) The sources in Panama:
    (i) Are determined to be responsible prospective contractors 
pursuant to FAR subpart 9.1, and
    (ii) Can comply in all material respects with the terms and 
conditions of the acquisition document.
    (b) In the comparison of prices with respect to subparagraph (a)(2) 
of this section, there shall be taken into account the cost of transport 
to the Republic of Panama, including freight, insurance, and handling. 
The cost of insurance shall be calculated at one percent (1%) of the 
value of the supplies, or any supplies incidental to services, in the 
event the contract does not require insurance.

[[Page 234]]

    (c) When choosing between goods from sources within Panama that are 
otherwise equal, preference shall be given to those goods having a 
larger percentage of components of Panamanian origin.
    (d) When conducting an acquisition of supplies or services for which 
the estimated cost is not expected to exceed the small purchase 
limitation in FAR part 13, participation may be limited to sources in 
Panama unless the contracting officer determines that there is no 
reasonable expectation of obtaining quotations from two or more such 
sources that:
    (1) Will be responsive to the required delivery time, and
    (2) Will be comparable in quality and price to supplies or services 
from sources outside Panama.
    (e)(1) In order to conduct an acquisition of supplies or services 
above the small purchase limitation and limit participation in the 
acquisition to sources in Panama, the contracting officer shall:
    (i) Prepare and submit a class or an individual determination and 
findings to the Procurement Executive, and
    (ii) Obtain that official's written approval of such determination 
and findings.
    (2) The determination and findings must clearly document that:
    (i) An acquisition limited to such sources would result in obtaining 
supplies or services at the time they are required that would be 
comparable in quality and price to those obtainable from sources outside 
Panama, or
    (ii) An acquisition from sources outside Panama would be 
impracticable because of the nature of the acquisition (e.g., a 
requirements type contract where deliveries must be made within a very 
short time span by trucks or pipeline from stockpiles or storage 
facilities located in Panama).

[[Page 235]]



             CHAPTER 44--FEDERAL EMERGENCY MANAGEMENT AGENCY




                          (Parts 4400 to 4499)

  --------------------------------------------------------------------

                          SUBCHAPTER A--GENERAL
Part                                                                Page
4401            Federal Emergency Management Agency (FEMA) 
                    Acquisition Regulation System...........         230
4402            Definition of words and terms...............         240
4403            Improper business practices and personal 
                    conflicts of interest...................         240
           SUBCHAPTER B--COMPETITION AND ACQUISITION PLANNING
4405            Publicizing contract actions................         242
4406            Competition requirements....................         242
4408            Required sources of supplies and services...         242
4409            Contractor qualifications...................         243
4412            Contract delivery or performance............         243
          SUBCHAPTER C--CONTRACTING METHODS AND CONTRACT TYPES
4414            Sealed bidding..............................         245
4415            Contracting by negotiation..................         245
4416            Types of contracts..........................         247
4417            Special contracting methods.................         249
                  SUBCHAPTER D--SOCIOECONOMIC PROGRAMS
4419            Small business and small disadvantaged 
                    business concerns.......................         250
4424            Protection of privacy and freedom of 
                    information.............................         250
4426            Other socioeconomic programs................         250
             SUBCHAPTER E--GENERAL CONTRACTING REQUIREMENTS
4429            Taxes.......................................         251
4432            Contract financing..........................         251

[[Page 236]]

4433            Protests, disputes and appeals..............         251
             SUBCHAPTER F--SPECIAL CATEGORIES OF CONTRACTING
4435            Research and development contracting........         252
4436            Construction and architect-engineer 
                    contracts...............................         252
4450            Extraordinary contractual actions...........         252
                     SUBCHAPTER H--CLAUSES AND FORMS
4452            Solicitation provisions and contract clauses         254

[[Page 237]]



                          SUBCHAPTER A_GENERAL





PART 4401_FEDERAL EMERGENCY MANAGEMENT AGENCY (FEMA) ACQUISITION 
REGULATION SYSTEM--Table of Contents




Sec.
4401.000 Scope of part.

               Subpart 4401.1_Purpose, Authority, Issuance

4401.101 Purpose.
4401.103 Applicability.
4401.104 Issuance.
4401.104-1 Publication and code arrangement.
4401.104-3 Copies.

              Subpart 4401.3_Agency Acquisition Regulations

4401.301 Policy.
4401.303 Codification and public participation.

                 Subpart 4401.4_Deviations From the FAR

4401.403 Individual deviations.
4401.404 Class deviations.
4401.405 Deviations pertaining to treaties and executive agreements.

        Subpart 4401.6_Contracting Authority and Responsibilities

4401.600-70 Scope of subpart.
4401.601 General.
4401.603 Selection, appointment, and termination of appointment.
4401.603-2 Selection.
4401.603-3 Appointment.

               Subpart 4401.7_Determinations and Findings

4401.707-70 Signature authority.

   Subpart 4401.70_Procurement Contracts Versus Assistance Instruments

4401.7000 Scope of subpart.
4401.7001 Procurement contracts.
4401.7001-1 Situations for use.
4401.7001-2 Examples.
4401.7002 Assistance.
4401.7002-1 Grants.
4401.7002-2 Cooperative agreements.
4401.7002-3 Examples of unsubstantial involvement.
4401.7002-4 Examples of substantial involvement.

    Authority: 40 U.S.C. 486(c); Reorganization Plan No. 3 of 1978.

    Source: 50 FR 31316, Aug. 1, 1985, unless otherwise noted.



4401.000  Scope of part.

    This part sets forth policies and procedures concerning the Federal 
Emergency Management Agency Acquisition Regulation (FEMAAR) System.



               Subpart 4401.1_Purpose, Authority, Issuance



4401.101  Purpose.

    FEMAAR is a supplement to the Federal Acquisition Regulation (FAR) 
and is established for the codification and publication of uniform 
policies and procedures for acquisitions by FEMA.



4401.103  Applicability.

    This regulation applies to all acquisitions within FEMA, but not to 
placement or administration of cooperative agreements or grants.



4401.104  Issuance.



4401.104-1  Publication and code arrangement.

    (a) The FEMAAR is published in (1) the daily issue of the Federal 
Register and (2) cumulated form in the Code of Federal Regulations 
(CFR).
    (b) The FEMAAR is issued as chapter 44 of title 48, CFR.



4401.104-3  Copies.

    Copies of the FEMAAR in Federal Register and CFR form may be 
purchased from the Superintendent of Documents, Government Printing 
Office, Washington, DC 20402. Agency offices may request copies of the 
FEMAAR from the Policy and Evaluation Division, Office of Acquisition 
Management.



              Subpart 4401.3_Agency Acquisition Regulations



4401.301  Policy.

    Policies, procedures, and guidance of an internal nature may be 
issued

[[Page 238]]

through internal FEMA issuances such as manuals, standard operating 
procedures, directives or instructions.



4401.303  Codification and public participation.

    If subject matter in FAR requires no implementation, the FEMAAR will 
not contain a corresponding part, subpart, section, or subsection 
number. FAR subject matter governs.



                 Subpart 4401.4_Deviations From the FAR



4401.403  Individual deviations.

    The Director, Office of Acquisition Management, must authorize 
individual deviations in advance. Requests for authorization must:
    (a) Cite the specific parts of the FAR or FEMAAR from which it is 
desired to deviate;
    (b) Describe the deviation fully;
    (c) Indicate the circumstances which require the deviation;
    (d) Give reasons supporting the action requested; and
    (e) Give reasons why the action is in the best interest of the 
Government.



4401.404  Class deviations.

    The Director, Office of Acquisition Management, must authorize class 
deviations in advance.



4401.405  Deviations pertaining to treaties and executive agreements.

    The Director, Office of Acquisition Management, is the central 
control point for all deviations including those pertaining to treaties 
and executive agreements.



        Subpart 4401.6_Contracting Authority and Responsibilities



4401.600-70  Scope of subpart.

    This subpart deals with the placement of contracting authority and 
responsibility within the agency, the selection and designation of 
contracting officers, and the authority of contracting officers.



4401.601  General.

    The Director, Office of Acquisition Management, is designated the 
head of contracting activities and FEMA's procurement executive. The 
Director, Office of Acquisition Management, shall establish policy 
throughout the agency; monitor the overall effectiveness and efficiency 
of the agency's contracting offices; establish controls to assure 
compliance with laws, regulations, and procedures; and delegate 
contracting officer authority. The Director, Office of Acquisition 
Management, shall exercise the authority delegated under 44 CFR 2.67 
FEMA Organization, Functions and Delegations.



4401.603  Selection, appointment, and termination of appointment.



4401.603-2  Selection.

    In the areas of experience, training, and education, the following 
shall be required unless contracting authority is limited to a 
simplified purchase procedures. Waiver of any of these criteria shall be 
in writing:
    (a) An individual contracting officer or an individual appointed to 
a position having contracting officer authority shall have a minimum of 
two years experience performing contracting, procurement, or purchasing 
functions in a Government or commercial contracting office. 
Additionally, where a contracting officer will work in a specialized 
field, experience in the field shall be a criterion for the appointment.
    (b) An individual contracting officer or an individual appointed to 
a position having contracting officer authority shall have the 
equivalent of a bachelor's degree from an accedited college or 
institution with major studies in business administration, law, 
accounting, or related fields. The appointing official may waive this 
requirement when a candidate is otherwise qualified by virtue of 
extensive contract-related experience and training, business acumen, 
judgment, character, reputation, and ethics.
    (c) An individual contracting officer or an individual appointed to 
a position having contracting authority shall have successfully 
completed training courses in both Government basic procurement and 
Government contract administration, each of not less than 80 class 
hours. Incumbents not meeting

[[Page 239]]

the special training requirements shall be given 24 months to meet the 
minimum qualification standards.



4401.603-3  Appointment.

    Except for disaster-related activities and unusual circumstances as 
determined by the head of the contracting activity, it is policy to 
delegate contracting officer authority to individuals rather than to 
positions. The head of the contracting activity is the appointing 
authority. Except where the delegation of authority specifically 
includes the authority for further redelegation, no other delegations or 
redelegations may be made. Delegations of contracting officer authority 
shall include a clear statement of such authority and its 
responsibilities and limitations.



               Subpart 4401.7_Determinations and Findings



4401.707-70  Signature authority.

    The head of the contracting activity shall sign all class 
Determination and Findings (D & F's) not otherwise reserved to the 
agency head.



   Subpart 4401.70_Procurement Contracts Versus Assistance Instruments



4401.7000  Scope of subpart.

    This subpart describes the situations appropriate for the use of 
procurement contracts, grants, or cooperative agreements and provides 
examples of each.



4401.7001  Procurement contracts.



4401.7001-1  Situations for use.

    Procurement contracts are to be used whenever the principal purpose 
of the instrument is acquisition by purchase, lease, or barter of 
property or services for the direct benefit or use of the Federal 
Government.



4401.7001-2  Examples.

    Procurement contracts normally will be used when the principal 
purpose of the relationship is:
    (a) Evaluation (including research if an evaluation character) of 
the performance of Government program, projects, or grantee activity 
initiated by FEMA.
    (b) Projects funded by administrative funds.
    (c) Technical assistance rendered on behalf of the Government to any 
third party including those receiving grants or cooperative agreements.
    (d) Surveys, studies, and research which provide specific 
information desired by the Government for its direct activities or for 
dissemination to the public.
    (e) Consulting or professional services of all kinds if provided to 
the Government or, on behalf of the Government, to any third party.
    (f) Planning for Government use.
    (g) Conferences conducted in behalf of the Government.
    (h) Production of publications or audiovisual materials required 
primarily for the conduct of the direct operations of the Government.
    (i) Design or development of items for Government use or pursuant to 
agency definition or specifications.
    (j) Generation of management information or other data for 
Government use.



4401.7002  Assistance.

    Assistance may take the form of either grants or cooperative 
agreements and include:
    (a) General financial assistance (stimulation or support) to 
eligible recipients under specific legislation authorizing such 
assistance.
    (b) Financial assistance (stimulation or support) to a specific 
program activity eligible for such assistance under specific legislation 
authorizing such assistance.



4401.7002-1  Grants.

    Grants are to be used whenever the principal purpose of the 
relationship is to transfer money, property, services, or anything else 
of value to a recipient to accomplish a public purpose. The support or 
stimulation to be accomplished by this transfer must be authorized by 
Federal statute and substantial involvement is not anticipated.

[[Page 240]]



4401.7002-2  Cooperative agreements.

    Cooperative agreements are to be used whenever the principal purpose 
of the relationship is the transfer of money, property, service, or 
anything else of value to recipients to accomplish a public purpose. The 
support or stimulation to be accomplished by this transfer must be 
authorized by Federal statute and substantial involvement is 
anticipated.



4401.7002-3  Examples of unsubstantial involvement.

    Involvement is not substantial and a grant is the proper instrument 
when the following types of involvement are planned:
    (a) Approval of recipient plans prior to award.
    (b) Normal Federal stewardship such as site visits, performance 
reporting, financial reporting, and audits to ensure that objectives, 
terms, and conditions of the grants are met.
    (c) Unanticipated involvement to correct deficiencies in project or 
financial performance from the terms of the grants.
    (d) General statutory requirements understood in advance of the 
award such as civil rights, environmental protection, and provision for 
the handicapped.
    (e) Review of performance after completion.
    (f) General administrative requirements, such as those included in 
OMB Circulars A-21, A-95, A-110, and A-102.



4401.7002-4  Examples of substantial involvement.

    Involvement is substantial and a cooperative agreement is the proper 
instrument when the following types of involvement are planned:
    (a) Agency review and approval of one stage before work can begin on 
a subsequent stage during the period covered by the cooperative 
agreement.
    (b) Agency and recipient collaboration or joint participation in the 
performance of the assisted activities.
    (c) Highly prescriptive agency requirements prior to award limiting 
recipient discretion with respect to scope of services offered, 
organizational structure, staffing, mode of operation and other 
management processes, coupled with close agency monitoring or 
operational involvement during performance over and above the normal 
exercise of Federal stewardship responsibilities to ensure compliance 
with these requirements.
    (d) General administrative requirements beyond those included in OMB 
Circulars A-102 and A-110.



PART 4402_DEFINITION OF WORDS AND TERMS--Table of Contents




    Authority: 40 U.S.C. 486(c); Reorganization Plan No. 3 of 1978.



                       Subpart 4402.1_Definitions



4402.100  Definitions.

    Agency means the Federal Emergency Management Agency (FEMA).
    Director means the Director of the Federal Emergency Management 
Agency.
    Interagency agreement means an agreement between two or more 
agencies, bureaus, or departments of the Federal Government by which 
supplies, services, or property are provided to, or obtained from, one 
or more agencies, bureaus, or departments of the Federal Government. 
Funds are transferred between the parties as consideration for the 
supplies, services, or property.
    Memorandum of Understanding means an agreement between two or more 
agencies, bureaus, or departments of the Federal Government or other 
entity. Funds are not transferred between the parties.
    Program office means any office which generates requests for 
procurement actions.
    Project officer means the program office representative cognizant 
over the technical aspects of a given procurement action.

[50 FR 31318, Aug. 1, 1985]



PART 4403_IMPROPER BUSINESS PRACTICES AND PERSONAL CONFLICTS OF INTEREST
--Table of Contents




                        Subpart 4403.1_Safeguards

Sec.
4403.101-2 Solicitation and acceptance of gratuities by Government 
          personnel.

[[Page 241]]

4403.101-3 Agency regulations.
4403.103 Independent pricing.
4403.103-2 Evaluating the certification.

      Subpart 4403.2_Contractor Gratuities to Government Personnel

4403.203 Reporting suspected violations of the Gratuities clause.
4403.204 Treatment of violations.

  Subpart 4403.6_Contracts With Government Employees or Organizations 
                       Owned or Controlled by Them

4403.602 Exceptions.

    Authority: 40 U.S.C. 486(c); Reorganization Plan No. 3 of 1978.

    Source: 50 FR 31319, Aug. 1, 1985, unless otherwise noted.



                        Subpart 4403.1_Safeguards



4403.101-2  Solicitation and acceptance of gratuities by Government personnel.

    Exceptions to the prohibition against soliciting or accepting 
gratuities are explained in 44 CFR part 3, subpart B.



4403.101-3  Agency regulations.

    FEMA ``Standards and Conduct'' are published in 44 CFR part 3. They 
include requirements for financial disclosure.



4403.103  Independent pricing.



4403.103-2  Evaluating the certification.

    The Director, Office of Acquisition Management, is authorized to 
make the determination described in FAR 3.103-2(b)(2).



      Subpart 4403.2_Contractor Gratuities to Government Personnel



4403.203  Reporting suspected violations of the Gratuities clause.

    Suspected violations shall be reported in the FEMA Office of the 
Inspector General. A report shall include all facts and circumstances 
relevant to the case.



4403.204  Treatment of violations.

    Following review and any necessary investigation, the Inspector 
General shall make recommendations to the Director or a designee. If 
action is to be taken against a contractor, the contractor shall be 
given the opportunity for a hearing in accordance with FAR 3.204(b).



  Subpart 4403.6_Contracts With Government Employees or Organizations 
                       Owned or Controlled by Them



4403.602  Exceptions.

    The Director, Office of Acquisition Management, may authorize an 
exception to the policy in FAR 3.601, based on facts and circumstances 
provided by the program office.

[[Page 242]]



            SUBCHAPTER B_COMPETITION AND ACQUISITION PLANNING





PART 4405_PUBLICIZING CONTRACT ACTIONS--Table of Contents




Sec.
4405.001 Policy.

              Subpart 4405.2_Synopsis of Proposed Contracts

4405.206 Synopsis of subcontract opportunities.

                   Subpart 4405.5_Paid Advertisements

4405.502 Authority.

    Authority: 40 U.S.C. 486(c); Reorganizational Plan No. 3 of 1978.

    Source: 50 FR 31319, Aug. 1, 1985, unless otherwise noted.



4405.001  Policy.

    The agency shall continually search for and develop information on 
sources (including small businesses owned and controlled by one or more 
socially or economically disadvantaged individuals) competent to provide 
supplies or services. Advance publicity, including use of the Commerce 
Business Daily to the fullest extent practicable, shall be used for this 
purpose. The search should include a review of data or brochures 
furnished by sources seeking to do business with the agency. It also 
should include program personnel, small business specialists, and 
contracting officers to obtain information and recommendations with 
respect to potential sources and to consider seeking other sources by 
publication of proposed procurements.



              Subpart 4405.2_Synopsis of Proposed Contracts



4405.206  Synopsis of subcontract opportunities.

    Unless it is not in the Government's interest, the contracting 
officer shall make the solicitation source list available to firms 
requesting it for subcontracting opportunities on contracts exceeding 
the small purchase threshold.



                   Subpart 4405.5_Paid Advertisements



4405.502  Authority.

    In accordance with 44 CFR 2.72(a) authority to approve publication 
of paid advertisement in newspapers has been delegated to the Director, 
Office of Administrative Support.



PART 4406_COMPETITION REQUIREMENTS--Table of Contents




    Authority: 40 U.S.C. 486(c); Reorganization Plan No. 3 of 1978.



                   Subpart 4406.5_Competition Advocate



4406.501  Requirement.

    The Chief, Policy and Planning Division, Office of Acquisition 
Management is designated FEMA's Competition Advocate.

[50 FR 31319, Aug. 1, 1985]



PART 4408_REQUIRED SOURCES OF SUPPLIES AND SERVICES--Table of Contents




    Authority: 40 U.S.C. 486(c); Reorganization Plan No. 3 of 1978.



       Subpart 4408.8_Acquisition of Printing and Related Supplies



4408.802  Policy.

    Contracting officers shall obtain approval from the Director, Office 
of Administrative Support, FEMA's central printing authority before 
contracting for printing.

[50 FR 31319, Aug. 1, 1985]

[[Page 243]]



PART 4409_CONTRACTOR QUALIFICATIONS--Table of Contents




         Subpart 4409.4_Debarment, Suspension, and Ineligibility

Sec.
4409.404 Consolidated list of debarred, suspended, and ineligible 
          contractors.
4409.406 Debarment.
4409.406-1 General.
4409.406-3 Procedures.
4409.407 Suspension.
4409.407-1 General.
4409.407-3 Procedures.

    Authority: 40 U.S.C. 486(c); Reorganization Plan No. 3 of 1978.

    Source: 50 FR 31319, Aug. 1, 1985, unless otherwise noted.



         Subpart 4409.4_Debarment, Suspension, and Ineligibility



4409.404  Consolidated list of debarred, suspended, and ineligible 
contractors.

    The Director, Office of Acquisition Management, will notify GSA, 
maintain records, establish procedures, and direct inquiries as required 
by FAR 9.404(c).



4409.406  Debarment.



4409.406-1  General.

    The Chief of Staff shall be the debarring official.

[50 FR 31319, Aug. 1, 1985, as amended at 55 FR 28207, July 10, 1990]



4409.406-3  Procedures.

    (a) Determination to debar or take other action concerning a firm or 
individual for a cause listed in FAR 9.406-2 shall be made by the Chief 
of Staff. Whenever cause for debarment becomes known to any contracting 
officer, the matter shall be submitted, with recommendations of the 
Director, Office of Acquisition Management, via the Office of General 
Counsel, to the Chief of Staff for appropriate action. The documented 
file of the case will be included in the submission.
    (b) If the Chief of Staff concurs in the proposed debarment, a 
notice of proposal to debar shall be issued by the Chief of Staff or 
designee.
    (c) The Chief of Staff or designee shall conduct any hearings 
requested in connection with debarment proceedings. The firm or 
individual shall have the opportunity to appear with witnesses and 
counsel to present facts or circumstances showing cause why such firm or 
individual should not be debarred. If the firm or individual elects not 
to appear, or if the firm or individual does not respond within 30 days 
from receipt of the written notice, the reviewing authority will make 
the decision based on the facts on record and such additional evidence 
as may be furnished by the parties involved. After consideration of the 
facts, the reviewing authority shall notify the firm or individual of 
the final decision.
    (d) Appeals may be taken within 30 days after receipt by the firm or 
individual of a decision to debar. Appeals shall be filed with the 
Director, FEMA, who shall make a decision based on the record. The 
Director's decision shall be final.

[50 FR 31319, Aug. 1, 1985, as amended at 55 FR 28207, July 10, 1990]



4409.407  Suspension.



4409.407-1  General.

    The Chief of Staff shall be the suspending official.

[50 FR 31319, Aug. 1, 1985, as amended at 55 FR 28207, July 10, 1990]



4409.407-3  Procedures.

    (a) Any contracting officer may recommend suspension of bidders. 
These recommendations shall be accompanied by the documented file in the 
case and be submitted through the Director, Office of Acquisition 
Management, via the Office of General Counsel, to the Chief of Staff. 
The Chief of Staff shall issue the notice of suspension.
    (b) The Director, Office of Acquisition Management, shall develop 
and maintain suspension procedures.

[50 FR 31319, Aug. 1, 1985, as amended at 55 FR 28207, July 10, 1990]



PART 4412_CONTRACT DELIVERY OR PERFORMANCE--Table of Contents




    Authority: 40 U.S.C. 486(c); Reorganization Plan No. 3 of 1978.

[[Page 244]]



         Subpart 4412.3_Priorities, Allocations, and Allotments



4412.303  Procedures.

    Rejected rated orders or ACM orders shall be sent to the Department 
of Commerce through the head of the contracting activity.

[50 FR 31320, Aug. 1, 1985]

[[Page 245]]



           SUBCHAPTER C_CONTRACTING METHODS AND CONTRACT TYPES





PART 4414_SEALED BIDDING--Table of Contents




          Subpart 4414.4_Opening of Bids and Award of Contract

Sec.
4414.401 Receipt and safeguarding of bids.
4414.402 Opening of bids.
4414.406 Mistakes in bids.
4414.406-3 Other mistakes disclosed before award.

    Authority: 40 U.S.C. 486(c); Reorganization Plan No. 3 of 1978.

    Source: 50 FR 31320, Aug. 1, 1985, unless otherwise noted.



          Subpart 4414.4_Opening of Bids and Award of Contract



4414.401  Receipt and safeguarding of bids.

    (a) Envelopes or other outer coverings containing identified bids 
shall be stamped or otherwise marked to show the office of receipt, the 
time of day received, and the date. The individual receiving the bids 
shall then initial under the marking.
    (b) A copy of the envelope or other covering bearing the 
documentation of a bid that was opened by mistake shall be retained in 
the file.



4414.402  Opening of bids.

    The contracting officer, or duly authorized representative, shall be 
designated as the bid opening officer.



4414.406  Mistakes in bids.



4414.406-3  Other mistakes disclosed before award.

    The Director, Office of Acquisition Management, is delegated the 
authority to make the determinations concerning mistakes in bid other 
than obvious clerical errors discovered prior to award. Each such 
determination shall be approved by the Office of General Counsel prior 
to notification of the bidder.



PART 4415_CONTRACTING BY NEGOTIATION--Table of Contents




   Subpart 4415.4_Solicitation and Receipt of Proposals and Quotations

Sec.
4415.413 Disclosure and use of information before award.
4415.413-2 Alternate II.
4415.413-70 Policy.
4415.413-71 Release of information during the solicitation phase.
4415.413-72 Disposition of unsuccessful proposals.

                  Subpart 4415.5_Unsolicited Proposals

4415.500 Scope of subpart.
4415.505-1 Content of unsolicited proposals.
4415.505-2 Unsolicited renewal proposals.
4415.506 Agency procedures.
4415.506-1 Receipt and initial review.

                     Subpart 4415.6_Source Selection

4415.612 Formal source selection.
4415.612-70 Scope.
4415.612-71 Key participants.

                    Subpart 4415.8_Price Negotiation

4415.803 General.

 Subpart 4415.10_Preaward, Award and Postaward Notifications, Protests, 
                              and Mistakes

4415.1003 Debriefing of unsuccessful offerors.

    Authority: 40 U.S.C. 486(c); Reorganization Plan No. 3 of 1978.

    Source: 50 FR 31320, Aug. 1, 1985, unless otherwise noted.



   Subpart 4415.4_Solicitation and Receipt of Proposals and Quotations



4415.413  Disclosure and use of information before award.



4415.413-2  Alternate II.

    These alternate FAR procedures may be used if approved in writing by 
the head of the contracting activity.

[[Page 246]]



4415.413-70  Policy.

    It is FEMA policy to use information contained in proposals only for 
evaluation purposes unless information (a) is generally available to the 
public, (b) is already the property of the Government, (c) is already 
available to the Government with unrestricted use rights, or (d) is or 
has been made available to the Government without restriction.



4415.413-71  Release of information during the solicitation phase.

    No information shall be released during the solicitation phase, 
except as follows: Each solicitation for a negotiated acquisition shall 
name an individual in the contracting office to respond to inquiries 
concerning the solicitation and evaluation of proposals resulting from 
the solicitation. All questions whether of a procedural or substantive 
nature shall be directed to that individual. No one else shall exchange 
comments with offerors or potential offerors. Questions requiring 
clarification of substantive portions of the solicitation shall be 
answered by amendment of the solicitation. A copy of the amendment shall 
be sent to each recipient of the solicitation.



4415.413-72  Disposition of unsuccessful proposals.

    Unsuccessful proposals shall be disposed of as follows:
    (a) All but one copy of each unsuccessful proposal shall be 
destroyed as soon as practicable after contract award. The one remaining 
copy of each shall be retained in the official contract file.
    (b) Unsuccessful proposals shall not be used for purposes other than 
internal reference unless (1) written permission has been obtained from 
the offeror or (2) the proposal expressly states that unrestricted use 
is given to the Government regardless of its success in the competition.



                  Subpart 4415.5_Unsolicited Proposals



4415.500  Scope of subpart.

    This subpart sets forth procedures for controlling the receipt, 
evaluation, and timely disposition of unsolicited proposals.



4415.505-1  Content of unsolicited proposals.

    FEMA's Appropriation Act (Public Law 100--404, Section 407) requires 
the contractor to cost share if a research contract results from an 
unsolicited proposal. This requirement may be waived only when it would 
not be equitable for the Government to require cost sharing. To waive, 
(a) the offeror must certify in writing to the contracting officer that 
it has no commercial, production, educational, or service activities on 
which to use the results of the research and that it has no means of 
recovering any cost on such projects; and (b) the contracting officer 
must make a written determination that there is no measurable gain to 
the performing organization and no mutuality of interest. This 
determination shall be placed in the contract file. (See 4416.303.)

[50 FR 31320, Aug. 1, 1985, as amended at 55 FR 28207, July 10, 1990]



4415.505-2  Unsolicited renewal proposals.

    Renewal proposals, i.e., those for the extension or augmentation of 
current contracts, are subject to the same FAR and FEMA regulations, 
including the requirements of the Competition in Contracting Act, as are 
proposals for new contracts.

[55 FR 28207, July 10, 1990]



4415.506  Agency procedures.

    (a) The Office of Acquisition Management is the point of contact for 
the receipt, acknowledgment, and handling of unsolicited proposals. 
Unsolicited proposals and requests for additional information regarding 
their preparation shall be submitted to: Federal Emergency Management 
Agency, Office of Acquisition Management, Policy & Evaluation Division, 
500 C Street SW, room 726, Washington, DC 20472.
    (b) Unsolicited proposals submitted to FEMA program, regional or 
field offices, or misdirected proposals, shall be immediately fowarded 
by recipients to the Headquarters Office of Acquisition Management.

[[Page 247]]

    (c) Unsolicited proposals shall be submitted in an original and five 
copies at least six months in advance of the date the offeror desires to 
begin work so that there will be enough time to evaluate the proposal 
and negotiate a contract.

[50 FR 31320, Aug. 1, 1985, as amended at 55 FR 28207, July 10, 1990]



4415.506-1  Receipt and initial review.

    (a) The Office of Acquisition Management shall acknowledge an 
unsolicited proposal. Simultaneously, copies of the proposal shall be 
sent to the appropriate program offices for evaluation.
    (b) Information Requirements. The Office of Acquisition Management 
shall keep records of unsolicited proposals received and shall provide 
prompt status information to requestors. The records shall include, as a 
minimum, the number of unsolicited proposals received, funded, and 
rejected during the fiscal year, the identity of the proposers and the 
office to which each was referred. These numbers shall be broken out by 
source (large business, small business, university, or nonprofit 
institutions).

[50 FR 31320, Aug. 1, 1985, as amended at 55 FR 28207, July 10, 1990]



                     Subpart 4415.6_Source Selection

    Source: 55 FR 28207, July 10, 1990, unless otherwise noted.



4415.612  Formal source selection.



4415.612-70  Scope.

    (a) Formal source selection procedures shall apply to competitively 
negotiated acquisition when the estimated cost exceeds $25,000.
    (b) Formal source selection procedures do not apply to the 
acquisition of Architect-Engineer Services, acquisition from other 
Government agencies (including State and local), or any other 
acquisition which is specifically exempted by the Director.



4415.612-71  Key participants.

    (a) A proposal evaluation team shall be formed to conduct the 
technical evaluation of proposals. For acquisitions estimated to cost 
$10 million or less, the team shall be called the Technical Evaluation 
Panel (TEP) and shall consist of at least three (3) voting members. For 
acquisitions in excess of $10 milion, or those whose estimated cost does 
not exceed $10 million, but the selected source is likely to receive 
funding for future phase(s) of the same project, and the aggregate 
amount of such funding (including the current acquisition) is estimated 
to exceed $10 million, the team shall be called the Source Evaluation 
Board (SEB) and shall consist of at least five (5) voting members.
    (b) The Source Selection Official or the Contracting Officer, 
depending upon the dollar amount of the proposed award and any 
anticipated additions to it, shall select a source for contract award. 
For acquisitions estimated to exceed $10 million, the program head, 
i.e., Associate Director/Administrator, of the acquiring office shall be 
the Source Selection Official. For acquisitions estimated to cost $10 
million or less, the Contracting Officer shall be the Source Selection 
Official.



                    Subpart 4415.8_Price Negotiation



4415.803  General.

    When all efforts to get a contractor to agree to a reasonable price 
or fee have failed, the contracting officer shall refer the matter to 
the head of the contracting activity.



 Subpart 4415.10_Preaward, Award and Postaward Notifications, Protests, 
                              and Mistakes



4415.1003  Debriefing of unsuccessful offerors.

    Any unsuccessful offeror may write for a debriefing within two 
months after contract award. The contracting officer shall provide the 
debriefing.



PART 4416_TYPES OF CONTRACTS--Table of Contents




               Subpart 4416.3_Cost-Reimbursement Contracts

Sec.
4416.303 Cost-sharing contracts.

[[Page 248]]

   Subpart 4416.6_Time-and-Materials, Labor-Hour, and Letter Contracts

4416.603 Letter contracts.
4416.603-3 Limitations.

    Authority: 40 U.S.C. 486(c); Reorganization Plan No. 3 of 1978.

    Source: 50 FR 31321, Aug. 1, 1985, unless otherwise noted.



               Subpart 4416.3_Cost-Reimbursement Contracts



4416.303  Cost-sharing contracts.

    (a) This subsection sets forth basis guidelines governing cost-
sharing contract.
    (b)(1) Cost sharing with non-Federal organizations shall be 
encouraged in contracts for basic or applied research in which both 
parties have considerable interest.
    (2) Contracting officers shall assure themselves of the following in 
determining contract type:
    (i) The research effort has more than minor relevance to the non-
Federal activities of the performing organization and is not primarily a 
service to the Government.
    (ii) The performing organization has adequate non-Federal sources of 
funds from which to make a cash contribution.
    (iii) The performing organization is engaged primarily in production 
or other service activities, as opposed to research and development, and 
is in a favorable position to make a cost contribution.
    (iv) The principal purpose of the contract is research.
    (v) Payment of the full cost of the project is not necessarily in 
order to obtain the services of the particular organization.
    (3) FEMA's Appropriation Act requires cost sharing by the contractor 
under research contracts resulting from unsolicited proposals. See 
4415.505-1.
    (c) Guidelines for determining the amount of cost sharing.
    (1) For educational institutions and other not-for-profit or non-
profit organizations, cost sharing may vary from 1 to 50 percent of the 
costs of the project. In some cases it may be appropriate for 
educational institutions to provide a higher degree of cost sharing, 
such as when the cost of the research consists primarily of the 
academic-year salary of faculty members, or when the equipment acquired 
by the institution for the project will be of significant value to the 
institution in its educational activities.
    (2) The amount of cost participation by commercial or industrial 
organizations may vary from 1 percent or less to more than 50 percent of 
total project cost, depending upon the extent to which the research 
effort is likely to enhance the performing organization's capability, 
expertise, or competitive position, and the value of such enhancement to 
the performing organization. Recognize, however, that organizations 
predominately engaged in research and development with little other 
activity may not be able to derive a monetary benefit from the research 
under Federal agreements.
    (3) A fee will usually not be paid to the performing organization if 
the organization is to contribute to the cost of the research effort, 
but the amount of cost sharing may be reduced to reflect the fact that 
the organization is foregoing normal fees on the research. However, if 
the research is expected to be of major value to the performing 
organization and if cost sharing is not required by statute, it may be 
appropriate for the performer to make a contribution in the form of a 
reduced fee rather than sharing the costs of the project.
    (4) Each cost-sharing contract negotiated shall contain the clause 
in 4452.216-70.

[50 FR 31321, Aug. 1, 1985, as amended at 55 FR 28208, July 10, 1990]



   Subpart 4416.6_Time-and-Materials, Labor-Hour, and Letter Contracts



4416.603  Letter contracts.



4416.603-3  Limitations.

    A letter contract may be used only if the head of the contracting 
activity executes a determination and finding that no other contract 
type is suitable.

[[Page 249]]



PART 4417_SPECIAL CONTRACTING METHODS--Table of Contents




    Authority: 40 U.S.C. 486(c); Reorganization Plan No. 3 of 1978.



                         Subpart 4417.70_General



4417.7001  Preference for local contractors.

    (a) This subsection establishes policies relating to local 
contractor preference to receive contract awards resulting from 
competitive solicitations under a Presidentially declared major disaster 
or emergency operation.
    (b) The geographic areas to which local contractor preference shall 
apply are those affected by the Presidentially declared disaster and 
designated in the Federal Register by the Associate Director, State and 
Local Programs and Support, or his designee. Geographical areas shall be 
identified by county or other political subdivision.
    (c) Pursuant to the provisions of Pub. L. 93-288, the provisions set 
forth in 4452.217-70 shall be included in each competitive solicitation 
for disaster relief response.
    (d) If the contracting officer determines it to be in the best 
interest of the Government, the provision set forth in 4452.217-70 need 
not be included in solicitations. Such determination shall be documented 
in the contract file with a findings and determination signed by the 
contracting officer and approved by the head of the contracting 
activity.
    (e) If the contracting officer makes the determination of paragraph 
(d) of this section, local participation may be encouraged by:
    (1) Setting the procurement aside for labor surplus area if the 
disaster area has been established as a labor surplus area;
    (2) Advertising only in the local disaster area; and/or
    (3) Dividing large requirements into several smaller requirements.

[50 FR 31322, Aug. 1, 1985]

[[Page 250]]



                   SUBCHAPTER D_SOCIOECONOMIC PROGRAMS





PART 4419_SMALL BUSINESS AND SMALL DISADVANTAGED BUSINESS CONCERNS
--Table of Contents




    Authority: 40 U.S.C. 486(c); Reorganization Plan No. 3 of 1978.



                         Subpart 4419.2_Policies



4419.201  General policy.

    (a) The Director, Office of Personnel and Equal Opportunity, is also 
the Director, Office of Small and Disadvantaged Business Utilization.
    (b) The Chief, Policy and Evaluation Division, Office of Acquisition 
Management, is the small business technical advisor.
    (c) Each contracting officer is a small and disadvantaged business 
utilization specialist.

[50 FR 31322, Aug. 1, 1985, as amended at 55 FR 28208, July 10, 1990]



PART 4424_PROTECTION OF PRIVACY AND FREEDOM OF INFORMATION--Table of Contents




    Authority: 40 U.S.C. 486(c); Reorganization Plan No. 3 of 1978.



                Subpart 4424.2_Freedom of Information Act



4424.202  Policy.

    FEMA's Freedom of Information Act policy is codified at 44 CFR part 
5.

[50 FR 31322, Aug. 1, 1985]



PART 4426_OTHER SOCIOECONOMIC PROGRAMS--Table of Contents




Sec.
4426.101 General policy.
4426.102 Accessibility of meetings, conferences and seminars to persons 
          with disabilities.

    Authority: 40 U.S.C. 486(c); Reorganization Plan No. 3 of 1978.



4426.101  General policy.

    Section 504 of the Rehabilitation Act of 1973, as amended, prohibits 
Federal agencies from discriminating against qualified persons on the 
grounds of disability. The law not only applies to internal employment 
practices but extends to agency interaction with members of the public 
who participate in FEMA programs. (FEMA's implementation of section 504 
of this Act is codified at 44 CFR part 16.)

[55 FR 28208, July 10, 1990]



4426.102  Accessibility of meetings, conferences and seminars to persons 
with disabilities.

    It is FEMA's policy to extend the provisions of the Rehabilitation 
Act of 1973, as amended, to vendors who interact with the public while 
under contract to FEMA. Therefore, FEMA Clause 4452.226-01, 
Accessibility of Meetings, Conferences, and Seminars to Persons with 
Disabilities, shall be included in FEMA contracts over $25,000 when in 
the performance of such contract the contractor will plan meetings, 
seminars and conferences which may be attended by persons with 
disabilities.

[55 FR 28208, July 10, 1990]

[[Page 251]]



              SUBCHAPTER E_GENERAL CONTRACTING REQUIREMENTS





PART 4429_TAXES--Table of Contents




    Authority: 40 U.S.C. 486(c); Reorganization Plan No. 3 of 1978.



                         Subpart 4429.1_General



4429.101  Resolving tax problems.

    (a) The Office of General Counsel is responsible, with FEMA, for 
handling all tax problems. It also is responsible for asking the 
Department of Justice for representation of intervention in proceedings 
concerning taxes.
    (b) The contracting officer shall request, in writing, the 
assistance of the Office of General Counsel in resolving a tax problem. 
The request shall detail the problem and include supporting information. 
The Office of General Counsel shall inform the contracting officer of 
the disposition of the tax problem and the contracting officer will tell 
the contractor.

[50 FR 31322, Aug. 1, 1985]



PART 4432_CONTRACT FINANCING--Table of Contents




    Authority: 40 U.S.C. 486(c); Reorganization Plan No. 3 of 1978.



                     Subpart 4432.4_Advance Payments



4432.402  General.

    The head of the contracting activity has responsibility and 
authority to make findings and determinations and to approve or 
disapprove contract terms.

[50 FR 31322, Aug. 1, 1985]



PART 4433_PROTESTS, DISPUTES AND APPEALS--Table of Contents




    Authority: 40 U.S.C. 486(c); Reorganization Plan No. 3 of 1978.



                 Subpart 4433.103_Protests to the Agency



4433.103  Protests to the agency.

    (a) Protests should be filed on a timely basis to the Contracting 
Officer specified in the solicitation or contract. Protests are 
considered timely if, when based on alleged improprieties in a 
solicitation which are apparent prior to the bid/proposal closing time, 
they are filed not later than the closing date, and in other cases they 
are filed within 10 working days after the basis of the protest is known 
or should have been known whichever is earlier.
    (b) If a protest is received prior to award, the Contracting Officer 
shall notify all offerors within one full working day after consultation 
with the Office of General Counsel (OGC). An award will not be made 
unless a written determination is approved by the Head of the 
Contracting Activity in accordance with the criteria set forth in FAR 
33.103.
    (c) If a protest is received after award, the Contracting Officer 
shall give careful consideration to suspending contract performance if 
it appears likely that the award may be invalidated and the Government's 
interest will not be harmed by a delay in the receipt of goods or 
services. The Contracting Officer's determination to suspend performance 
should be made in writing and approved by the Head of the Contracting 
Activity after consultation with OGC. If the decision is to proceed with 
contract award or continue with contract performance, the Contracting 
Officer shall include the written findings in the file and shall give 
written notice of the decision to the protestor and other interested 
parties.
    (d) The Contracting Officer/Contract Specialist shall prepare the 
final decision for approval by the Head of the Contracting Activity. The 
protestor shall be notified of the final decision regarding its protest 
within 30 working days after receipt of the protest.

[55 FR 28208, July 10, 1990]

[[Page 252]]



             SUBCHAPTER F_SPECIAL CATEGORIES OF CONTRACTING





PART 4435_RESEARCH AND DEVELOPMENT CONTRACTING--Table of Contents




    Authority: 40 U.S.C. 486(c); Reorganization Plan No. 3 of 1978.



4435.003  Policy.

    Cost-sharing policy for research and development contracts is stated 
in 4415.502-70.

[50 FR 31322, Aug. 1, 1985]



PART 4436_CONSTRUCTION AND ARCHITECT-ENGINEER CONTRACTS--Table of Contents




               Subpart 4436.6_Architect-Engineer Services

Sec.
4436.602-2 Evaluation boards.
4436.602-4 Selection authority.

    Authority: 40 U.S.C. 486(c); Reorganization Plan No. 3 of 1978.



               Subpart 4436.6_Architect-Engineer Services



4436.602-2  Evaluation boards.

    (a) Each architect-engineer evaluation board, permanent or ad hoc, 
shall have at least five voting members and one alternate. These will be 
Federal employees. A majority of the voting members will be from the 
program office.
    (b) During the selection process, a board member or advisor may 
have, or appear to have, a conflict of interest regarding a firm in the 
competition. Immediately upon becoming aware of a potential conflict or 
an appearance of a conflict, the member or advisor shall notify the 
board chairperson who shall, in turn, inform the Office of General 
Counsel. The Office of General Counsel shall make a final determination 
on the conflict issue.
    (c) The evaluation board is to be insulated from outside pressures. 
Information concerning board deliberations shall be divulged only to 
persons having a need-to-know.

[50 FR 31322, Aug. 1, 1985]



4436.602-4  Selection authority.

    (a) Heads of program offices which may require architect-engineer 
services are designated as selection authorities for acquisition of 
architect-engineer services.
    (b) A determination shall be sent to the contracting officer listing 
the selected firms in order of preference.

[50 FR 31322, Aug. 1, 1985]



PART 4450_EXTRAORDINARY CONTRACTUAL ACTIONS--Table of Contents




  Subpart 4450.2_Delegation of and Limitations on Exercise of Authority

Sec.
4440.201 Delegation of authority.
4450.202 Contract adjustment boards.

    Authority: 50 U.S.C. 1431-1435; E.O. 10789; E.O. 12148.



  Subpart 4450.2_Delegation of and Limitations on Exercise of Authority



4450.201  Delegation of authority.

    All authority granted by 48 CFR 50.101 may be exercised by the 
Director of the Federal Emergency Management Agency. Such authority to 
approve, authorize, and direct appropriate action under this Part and to 
make all appropriate determinations and findings which do not obligate 
the United States in excess of $50,000 are delegated to the Director, 
Office of Acquisition Management. Such authority to approve, and direct 
appropriate action under this Part and to make all appropriate 
determinations and findings which may obligate the United States in 
excess of $50,000 are delegated to the FEMA Contract Adjustment Board. 
The limitations contained in 48 CFR 50.201 and 50.202 apply.

[50 FR 31322, Aug. 1, 1985]



4450.202  Contract adjustment boards.

    As cases arise under the Act, the Director of FEMA may appoint, as 
needed, a FEMA Contract Adjustment Board consisting of one senior staff

[[Page 253]]

member, not otherwise involved with the action under consideration, from 
each of the following offices:
    (a) Acquisition Management, who shall act as Chairperson
    (b) General Counsel
    (c) Comptroller.

[50 FR 31322, Aug. 1, 1985]

[[Page 254]]



                     SUBCHAPTER H_CLAUSES AND FORMS





PART 4452_SOLICITATION PROVISIONS AND CONTRACT CLAUSES--Table of Contents




             Subpart 4452.2_Texts of Provisions and Clauses

Sec.
4452.216-70 Consideration and payment (Cost-Sharing).
4452.217-70 Preference for local contractors in Presidentially declared 
          major disasters or emergencies.
4452.226-1 Accessibility of meetings, conferences and seminars to 
          persons with disabilities.
4452.227-70 Reproduction of reports.
4452.227-71 Coordination of Federal reporting requirements.
4452.227-72 Publication.

    Authority: 40 U.S.C. 486(c); Reorganization Plan No. 3 of 1978.

    Source: 50 FR 31323, Aug. 1, 1985, unless otherwise noted.



             Subpart 4452.2_Texts of Provisions and Clauses



4452.216-70  Consideration and payment (Cost-Sharing).

    As prescribed in 4416.303, include the following clause in research 
and development contracts with non-Federal organizations:

           Consideration and Payment (Cost-Sharing) (Mar 1989)

    (a) The estimated cost for the performance of this contract is $----
----. The contractor agrees to bear without reimbursement by the 
Government ----% of the cost for performance hereunder. Such cost 
sharing shall be effected as set forth in paragraph (b) of this clause.
    (b) Public vouchers or invoice shall be submitted in an original and 
five (5) copies and shall show the total cost incurred for the period 
for which the voucher or invoice is submitted, the cumulative total of 
costs incurred through the billing period, and the percentage of costs 
to be reimbursed by the Government. However, the Government is not 
obligated to reimburse the contractor for the Government's share of the 
costs in excess of --------% of such amount. The Government shall not be 
obligated to reimburse the contractor for the Government's share of the 
costs in excess of $-------- nor is the contractor obligated by this 
contract to expend his own funds in excess of $--------.

                             (End of clause)

[55 FR 28208, July 10, 1990]



4452.217-70  Preference for local contractors in Presidentially declared 
major disasters or emergencies.

    Pursuant to the provisions of Pub. L. 93-288 and 4415.105-71, the 
following provisions shall be included in each competitive solicitation 
for on-site disaster relief response:

               Preference for Local Contractors (Apr 1984)

    In awarding any contract pursuant to this solicitation, the 
Government shall give preference to local organizations, firms, and 
individuals residing or doing business primarily in the geographic area 
identified as the disaster area.
    The contracting officer reserves the right to request offerors to 
furnish documentation to demonstrate eligibility for local contractor 
preference. To be eligible, the offeror shall have been residing (in the 
case of individuals) or doing the major portion of its business (in the 
case of business entities) in the disaster area.
    An offeror for which eligibility is established (local offeror) 
shall be permitted to meet the lowest price received from an otherwise 
eligible non-local offeror, provided that the proposed price from the 
local offeror does not exceed 130 percent of the price of the non-local 
offeror. The lowest priced local offeror within 130 percent of the 
lowest non-local offeror shall have the first chance to meet the non-
local price. If the local offeror meets the lowest non-local price and 
is determined to be responsible, award shall be made. If the non-local 
offer is not met, the next lowest local offeror within 130 percent shall 
have the chance to meet the lowest non-local price. This process shall 
continue until award is made to a local offeror within the 130 percent 
requirement or the supply of local offerors is exhausted and award made 
to the lowest non-local offeror.

                             (End of clause)



4452.226-1  Accessibility of meetings, conferences and seminars to persons 
with disabilities.

    Include the following clause in contracts under which the contractor 
will

[[Page 255]]

plan meetings, conferences and seminars which may be attended by persons 
with disabilities.

  Accessibility of Meetings, Conferences, and Seminars to Persons With 
                         Disabilities (Jan 1989)

    The Contractor agrees as follows:
    (a) Planning. The Contractor will develop a plan to assure that any 
meeting, conference, or seminar held pursuant to this contract will meet 
or exceed the minimum accessibility standards set forth below. This plan 
shall include a provision for ascertaining the number and types of 
disabled individuals planning to attend the meeting, conference, or 
seminar. The plan shall be submitted to the Contracting Officer for 
approval prior to initiating action. A consolidated or master plan for 
contracts requiring numerous meetings, conferences, or seminars may be 
submitted in lieu of separate plans.
    (b) Facilities. Any facility to be utilized for meetings, 
conferences, or seminars in performance of this contract shall be 
accessible to persons with disabilities. The Contractor shall determine, 
by an on-site inspection if necessary, that the following minimum 
accessibility requirements are met, or suitable modifications are made 
to meet these requirements, before the meeting:
    (1) Parking. (i) Where parking is available on or adjacent to the 
site one 12[foot] wide space must be set aside for the car of each 
mobility impaired attendee. The space need not be permanently striped 
but may be temporarily marked by signs, ropes, or other means 
satisfactory to carry out this provision.
    (ii) Where parking is not available on or adjacent to the site, 
valet parking or other alternative means must be available to assist 
disabled attendees. Alternate means must be satisfactory in the judgment 
of the Contracting Officer.
    (2) Entrances. (i) ``Entrances'' shall include at least one 
accessible entrance from the street/sidewalk level, and at least one 
accessible entrance from any available parking facility.
    (ii) The entrance shall be level or accessible by ramp with an 
incline that allows independent negotiation by a person in a wheelchair. 
In general, the slope of the incline shall be no more than 1 
rise per foot of ramp length (1:12).
    (iii) Entrance doorways shall be at least 30 in clear 
width and capable of operation by persons with disabilities. Revolving 
doors, regardless of foldback capability, will not meet this 
requirement.
    (3) Meeting Rooms. (i) Meeting room access from the main entrance 
area must be level or at an independently negotiable incline 
(approximately 1:12) and/or served by elevators from the main entrance 
level. All elevators shall be capable of accommodating a wheelchair 
29 wide by 45 long.
    (ii) Meeting rooms shall be on one level or, if on different levels, 
capable of being reached by elevators or by ramps that can be 
independently negotiated by a person in a wheelchair. Doorways to all 
meeting rooms shall be at least 30 in clear width.
    (iii) The interior of the meeting room shall be on one level or 
ramped so as to be independently negotiable for a person in a 
wheelchair.
    (iv) Stages, speaker platforms, etc. which are to be used by persons 
in wheelchairs must be accessible by ramps or lifts. When used, the 
ramps may not necessarily be independently negotiable if space does not 
permit. However, any slope over 1:12 must be approved by the Contracting 
Officer. Each case is to be judged on its own merits.
    (v) If a meeting room with fixed seating is utilized, seating 
arrangements for persons in wheelchairs shall be made so that these 
persons are incorporated into the group rather than isolated on the 
perimeter of the group.
    (4) Restrooms. (i) Restrooms shall have level access, signs 
indicating accessibility, and doorways at least 30 in clear 
width.
    (ii) Sufficient turning space within restrooms shall be provided for 
independent use by a person in a wheelchair 29 wide by 
45 long. A space 60 by 60 or 
63 by 56 of unobstructed floor space as measured 
12 above the floor is acceptable by standard; other layout 
will be accepted if it can be demonstrated that they are usable as 
indicated.
    (iii) There will be a restroom for each sex or a unisex restroom 
with at least one toilet stall capable of accommodating a wheelchair 
29 wide by 45 long (by standard, the minimum is 
3[foot]-0 by 43[foot]-83), with outswinging door 
or private curtains. Wall mounted grab bars are required.
    (iv) When separate restrooms have been set up for mobility impaired 
persons, they shall be located adjacent to the regular restrooms and 
shall be fully accessible.
    (5) Eating Facilities. (i) Eating facilities in the meeting facility 
must be accessible under the same general guidelines as are applied to 
meeting rooms.
    (ii) If the eating facility is a cafeteria, the food service area 
(cafeteria line) must allow sufficient room for independent wheelchair 
movement and accessibility to food for persons in wheelchairs, and 
cafeteria staff shall be available to assist disabled persons.
    (6) Overnight Facilities. If overnight accommodations are required:
    (i) Sufficient accessible guest rooms to accommodate each attendee 
who is disabled shall be located in the facility where the meeting, 
conference, or seminar is held, or in a facility housing the attendees 
which is conveniently located hereby, whichever is satisfactory to the 
Contracting Officer.

[[Page 256]]

    (ii) Overnight facilities shall provide for the same minimum 
accessibility requirements as the facility utilized for guest room 
access from the main entrance area shall be level, ramped at an 
independently negotiable incline (1:12), and/or served by elevators 
capable of accommodating a wheelchair 29 wide by 
45 long.
    (iii) Doorways to guest rooms, including the doorway to the 
bathroom, shall be at least 30 in clear width.
    (iv) Bathrooms shall have wall mounted grab bars at the tub and 
water closet.
    (v) Guest rooms for persons with a disability shall be provided at 
the same rate as a guest room for other attendees.
    (7) Water Fountains. Water fountains shall be accessible to disabled 
persons, or have cup dispensers for use by persons in wheelchairs.
    (c) Provisions of Services for Sensory Impaired Attendees.
    (1) The Contractor, in planning the meeting, conference, or seminar 
shall include in all announcements and other materials pertaining to the 
meeting, conference, or seminar a notice indicating that services will 
be made available to sensory impaired persons attending the meeting, if 
requested within five (5) days of the date of the meeting, conference, 
or seminar. The announcement(s) and other material(s) shall indicate 
that sensory impaired persons may contact a specific person(s), at a 
specific address and phone number(s), to make their service requirements 
known. The phone number(s) shall include a teletype number for the 
hearing impaired.
    (2) The Contractor shall provide, at no cost to the individual, 
those services required by persons with sensory impairments to insure 
their complete participation in the meeting, conference, or seminar.
    (3) As a minimum, when requested in advance, the Contractor shall 
provide the following services:
    (i) For hearing impaired persons, qualified interpreters. Provisions 
will also be made for volume controlled phone lines and, if necessary, 
transportation to local teletype equipment to enable hearing impaired 
individuals to receive and send meeting related calls. If local teletype 
equipment is not available, the Contractor shall provide on-site 
teletype equipment. Also, the meeting rooms will be adequately 
illuminated so signing by interpreters can be easily seen.
    (ii) For vision impaired persons, readers and/or cassette materials, 
as necessary, to enable full participation. Also, meeting rooms will be 
adequately illuminated.
    (iii) Agenda and other conference material(s) shall be translated 
into a usable form for the visually and hearing impaired. Readers, 
braille translations, and/or tape recordings are all acceptable. These 
materials shall be available to sensory impaired individuals upon their 
arrival.
    (4) The Contractor is responsible for making every effort to 
ascertain the number of sensory impaired individuals who plan to attend 
the meeting, conference, or seminar. However, if it can be determined 
that there will be no sensory impaired person (deaf and/or blind) in 
attendance, the provision of those services under paragraph (c) for the 
non-represented group, or groups, is not required.

(Approved by the Office of Management and Budget under control number 
3067-0213)

                             (End of clause)

[55 FR 28208, July 10, 1990]



4452.227-70  Reproduction of reports.

    Include the following clause in the contract when the product is a 
report, data or other written material.

                   Reproduction of Reports (Apr 1984)

    Reproduction of reports, data, or other written material, if 
required herein, is authorized provided that the material produced does 
not exceed 5,000 production units of any page and that items consisting 
of multiple pages do not exceed 25,000 production units in aggregate. 
The aggregate number of production units is to be determined by 
multiplying pages times copies. A production unit is one sheet, size 
8\1/2\x11 inches or less, printed on one side only, and in one color. 
All copy preparation to produce camera-ready copy for reproduction must 
be set by methods other than hot metal typesetting. The reports should 
be produced by methods employing stencils, masters, and plates which are 
to be used on single-unit duplicating equipment no larger than 11 by 17 
inches with a maximum image of 10\3/4\ by 14\1/4\ inches and are 
prepared by methods or devices that do not utilize reusable contact 
negatives and/or positives prepared with a camera requiring a darkroom. 
All reproducibles (camera-ready copies for reproduction by photo offset 
methods) shall become the property of the Government and shall be 
delivered to the Government with the report, data, or other written 
material.

                             (End of clause)



4452.227-71  Coordination of Federal reporting requirements.

    The following clause shall be included in contracts when 
appropriate:

          Coordination of Federal Reporting Services (Apr 1984)

    In the event that it is a contractual requirement to collect 
information from 10 or more public respondents, the provisions of 44

[[Page 257]]

U.S.C. chapter 35 (Coordination of Federal Reporting Requirements), 
shall apply to this contract. The contractor shall obtain through the 
project Officer the required office of Management and Budget clearance 
before making public contacts for the collection of data or expending 
any funds for such collection. The authority to proceed with the 
collection of data from public respondents and the expenditure of funds 
therefore shall be in writing signed by the Contracting Officer.

                             (End of clause)



4452.227-72  Publication.

    The following clause shall be used in all contracts under which it 
is anticipated that a report will be a product.

                         Publication (Apr 1984)

    (a) Definition. For the purpose of this clause ``publication'' 
includes (1) any document containing information intended for public 
consumption or (2) the act of, or any act which may result in, 
disclosing information to the public.
    (b) General. The results of the research and development and studies 
conducted under this contract are to be made available to the public 
through dedication, assignment to the Government, or other such means as 
the Director of the Federal Emergency Management Agency shall determine.
    (c) Reports furnished the Government. All intermediate and final 
reports of the research and development and studies conducted hereunder 
shall indicate on the cover or other initial page that the research and 
development and studies forming the basis for the report were conducted 
pursuant to a contract with the Federal Emergency Management Agency. 
Such reports are official Government property and may not be published 
or reproduced (in toto, in verbatim excerpt, or in a form approximating 
either of these) as an unofficial paper or article. The contractor or 
technical personnel (each employee or consultant working under the 
administrative direction of the contractor or any subcontractor 
hereunder) may publish such reports in whole or in part in a non-
Government publication only in accordance with this paragraph (c) and 
paragraph (e)(1) of this clause.
    (d) Publication by Government. The Government shall have full right 
to publish all information, data, and findings developed as a result of 
the research and development and studies conducted hereunder.
    (e) Publication by contractor on technical personnel.
    (1) Publication in whole or in part of contractor's reports 
furnished the Government. Unless such reports have been placed in the 
public domain by Government publication, the contractor or technical 
personnel (each employee or consultant working under the administrative 
direction of the contractor or any subcontractor hereunder) may publish 
a report furnished the Government, in toto or in verbatim excerpt, but 
consistent with paragraph (c) of this clause may not secure copyright 
therein, subject to the following conditions and the conditions in 
paragraph (e)(4) and paragraph (f).
    (i) During the first six months after submission of the full final 
report, if written permission to publish is obtained from the 
contracting officer.
    (ii) After six months following submission of the full report, and 
if paragraph (e)(3) is inapplicable, if a foreword or footnote in the 
non-Government publication indicates the source of the verbatim 
material.
    (2) Publication, except vebatim excerpts, concerning or based in 
whole or in part on results of research and development and studies 
hereunder. The contractor or technical personnel may issue a publication 
concerning or based in whole or in part on the results of the research 
and development and studies conducted under this contract and may secure 
copyright therein, but in so publishing is not authorized thereby to 
inhibit the unrestricted right of the Director of the Federal Emergency 
Management Agency to disclose or publish, in such manner as he may deem 
to be in the public interest, the results of such research and 
development and studies to the following conditions and the requirement 
in paragraph (e)(4):
    (i) During the first six months after submission of the full final 
report, and if paragraph (e)(3) is inapplicable, if written waiver of 
the waiting period is obtained from the contracting officer.
    (ii) After six months following submission of the full final report, 
and if paragraph (e)(3) is inapplicable, subject to Government exercise 
of an option that the publication contain a foreword or initial footnote 
substantially as follows:

The (research) (development) (studies) forming (part of) the basis for 
this publication were conducted pursuant to a contract with the Federal 
Emergency Management Agency. The substance of such (research) 
(development) (studies) is dedicated to the public. The author and 
publisher are solely responsible for the accuracy of statements or 
interpretations contained therein.

    (3) General conditions if FEMA determines that contractor's final 
report contains patentable subject matter developed in contract 
performance. If the contracting officer determines that the contractor's 
full final report contains patentable subject matter developed in the 
performance of this contract and so notifies the contractor in writing 
prior to six months from date of submission of such report, no 
publication of verbatim excerpts

[[Page 258]]

from contractor's reports or publication concerning or based in whole or 
in part on the results of the research and development and studies 
hereunder shall be made without the written consent of the contracting 
officer.
    (4) Copies of contractor and technical personnel publications to be 
furnished the Government. The contractor or technical personnel will 
furnish the contracting officer six copies of any publications which are 
based in whole or in part on the results of the research and development 
and studies conducted under this contract.
    (f) Administratively confidential information. The contractor shall 
not publish or otherwise disclose, except to the Government and except 
matters of public record any information or data obtained hereunder from 
private individuals, organizations, or public agencies in a publication 
whereby the information or data furnished by any particular person or 
establishment can be identified, except with the consent of such person 
or establishment.
    (g) Inclusion of provisions in contractor's agreements. The 
contractor shall include provisions appropriate to effectuate the 
purposes of this clause in all contracts of employment with persons who 
perform any part of the research or development or study under this 
contract and in any consultant's agreements or subcontracts involving 
research or development or study thereunder.

                             (End of clause)

[[Page 259]]



       CHAPTER 51--DEPARTMENT OF THE ARMY ACQUISITION REGULATIONS




                          (Parts 5100 to 5199)

  --------------------------------------------------------------------
Part                                                                Page
5108            Required sources of supplies and services...         261
5119            Small business and small disadvantaged 
                    business concerns.......................         261
5125            Foreign acquisition.........................         263
5145            Government property.........................         264
5152            Solicitations provisions and contract 
                    clauses.................................         265

[[Page 261]]



PART 5108_REQUIRED SOURCES OF SUPPLIES AND SERVICES--Table of Contents




    Authority: 5 U.S.C. 301, 10 U.S.C. 2202, DOD Directive 5000.35 and 
DOD FAR Supplement 201.301.



5108.070  Definitions.

    As used in this section:
    Memorandum of Understanding Planned Producer means an industrial 
firm which has indicated its willingness to produce specified military 
items in a declared national emergency by completing a Memorandum of 
Understanding with an accompanying Industrial Preparedness Program 
Production Capacity Survey (DD Form 1519 TEST). The firm is eligible to 
be solicited for all buys of the item(s) over $25,000 excluding 
acquisitions for which competition is restricted to the Restricted 
Specified Base or Limited Fee Planned Producers in accordance with an 
approved Justification and Approval.
    Limited Fee Planned Producer means an industrial firm which is 
contractually bound by inclusion of AFARS 5152.208-9001 in their 
contract to maintain production capacity for a negotiated length of 
time, to conduct subcontractor planning, and to produce specified 
military items in the event of a declared national emergency or in the 
event of a declared national emergency or contingencies short of a 
declared national emergency. The firm is eligible to be solicited for 
all buys of the item(s) over $25,000 except acquisitions for which 
competition is restricted to the Restricted Specified Base in accordance 
with an approved Justification and Approval.
    Restricted Specified Base Planned Producer means an industrial firm 
which is contractually bound to maintain production capacity for a 
negotiated length of time, to conduct subcontractor planning, and to 
produce specified military items in the event of a declared national 
emergency, or contingencies short of a declared national emergency. The 
firm is eligible to be solicited for all buys of the item(s) over 
$25,000.
    (g)(1)(i) Solicitation of Memorandum of Understanding Planned 
Producers in all acquisitions over $25,000 which are for items for which 
they have been designated as a Memorandum of Understanding Planned 
Producer except those restricted to the Restricted Specified Base 
Planned Producers or Limited Fee Planned Producers in accordance with an 
approved Justification and Approval.
    (ii) Solicitation of Limited Fee Planned Producers in all 
acquisitions over $25,000 which are for items for which they have been 
designated as a Limited Fee Planned Producer, except those restricted to 
the Restricted Specified Base.
    (iii) Solicitation of Restricted Specified Base Planned Producers in 
all acquisitions over $25,000 which are for items for which they have 
been designated as a Restricted Specified Base Planned Producer.
    (g)(4) The clause at 5152.208-9001 is to be used for all contracted 
planning efforts.

[54 FR 38682, Sept. 20, 1989]



PART 5119_SMALL BUSINESS AND SMALL DISADVANTAGED BUSINESS CONCERNS
--Table of Contents




  Subpart 5119.10_Small Business Competitiveness Demonstration Program

Sec.
5119.1001 General.
5119.1002 Definitions.
5119.1003 Purpose.
5119.1004 Participating agencies.
5119.1005 Applicability.
5119.1070 Procedures.
5119.1070-2 Emerging small business set-aside.
5119.1070-3 Identification and reporting.
5119.1071 Solicitation provisions and contract clauses.

    Authority: 5 U.S.C. 301, 10 U.S.C. 2202, DOD Directive 5000.35, FAR 
1.301 and DOD FAR Supplement 201.301.

    Source: 54 FR 15410, Apr. 18, 1989, unless otherwise noted.



  Subpart 5119.10_Small Business Competitiveness Demonstration Program



5119.1001  General.

    This subpart implements Pub. L. 100-656, section 722, ``Expanding 
Small Business Participation in Dredging'' (the

[[Page 262]]

Dredging Program). The Program will be conducted through 30 September 
1992.



5119.1002  Definitions.

    (S-90) ``Emerging Small Business Reserve Amount'' (ESBRA) means the 
dollar threshold for contracting opportunities in dredging, below which 
competition shall be conducted exclusively among emerging small business 
concerns. This amount is set forth in 5119.1070-2(a)(S-90).



5119.1003  Purpose.

    (c)(S-90) The purpose of the Dredging Program is to--
    (i) Expand small business and emerging small businesses (ESB) 
participation in contracting opportunities for dredging through 
restricted competition.
    (ii) Demonstrate the existence of a sufficient number of small 
businesses and ESBs which meet the current size standard for Standard 
Industrial Code (SIC) Code 1629 (Dredging and Surface Cleanup 
Activities) as an indicator of the adequacy of the current size 
standard.



5119.1004  Participating agencies.

    Participation in this Dredging Program is limited to the Department 
of the Army, Corps of Engineers.



5119.1005  Applicability.

    (S-90) The program shall apply to solicitations issued by the 
Department of the Army Corps of Engineers buying activities for the 
procurement of dredging under SIC 1629 (Dredging and Surface Cleanup 
Activities), limited to Federal Procurement Data Systems (FPDS) codes 
Y216 and Z216. This includes both maintenance dredging and new start 
(new work) construction dredging. Dredging to be performed by Government 
forces utilizing the Federally owned fleet pursuant to 33 U.S.C. 622 is 
not subject to the program.



5119.1070  Procedures.



5119.1070-2  Emerging small business set-aside.

    (a)(S-90) Solicitations for dredging shall be set-aside for 
exclusive competition among ESBs when the estimated award value is equal 
to or less than the emerging small business reserve amount (ESBRA) of 
$600,000. (Except that dredging acquisitions shall continue to be 
considered for placement under the 8(a) program (see FAR subpart 19.8) 
and for small disadvantaged business set-asides (see DFARS 219.502-72)). 
The ESBRA applies only to new awards. Modifications or follow-on awards 
to contracts having an initial award value in excess of the ESBRA are 
not subject to this requirement. The set-aside requirements in DFARS 
219.1070-2 (a) and (b) for designated industry groups acquisitions 
valued at $25,000 or less shall be complied with for all dredging 
program set-asides.
    (S-90) The contracting office shall include the applicable SIC Code 
and dollar size standard in the synopsis of proposed procurement as 
published in the Commerce Business Daily (CBD), in the presolicitation 
notice (construction contract) SF 1417 when issued, and in the 
solicitation documents.
    (S-91) The contracting officer shall consider use of the following 
initiatives to increase participation by small businesses and emerging 
small businesses:
    (1) Specifying of contract requirements and contractual terms and 
conditions which are conducive to competition among small business and 
emerging small business concerns, consistent with the mission or program 
requirements of the Department of the Army, Corp of Engineers.
    (2) Encouraging joint ventures, teaming agreements, and similar 
arrangements consistent with the Small Business Act (15 U.S.C. 637(d)) 
for the purpose of including small business concerns in contracting 
opportunities. However, no such joint venture shall exceed the 
applicable size standard.
    (3) Making maximum use of subcontracting through plans negotiated 
and enforced pursuant to section 8(d) of the Small Business Act. Goals 
may be specified in solicitations stating minimum percentages of 
subcontracting.



5119.1070-3  Identification and reporting.

    (b) Reporting shall be done in accordance with DFARS 204.6 
designated industry group requirements. Block

[[Page 263]]

B12A, DD Form 350, shall contain either the FPDS Code Y216 or Z216, as 
applicable, per 5119.1005 (S-90).



5119.1071  Solicitation provisions and contract clauses.

    (a) DFARS provision 252.219-7012 shall be inserted in all 
solicitations issued under the Small Business Dredging Program (SIC 
1629, limited to FPDS Service Codes Y216/Z216).
    (b) DFARS clause 252.219-7013 shall be inserted in all solicitations 
and contracts set-aside for emerging small businesses in accordance with 
5119.1070-2(a) (S-90).



PART 5125_FOREIGN ACQUISITION--Table of Contents




    Authority: 5 U.S.C 301, 10 U.S.C. 2202, DoD Directive 5000.35, FAR 
1.301 and DOD FAR Supplement 201.3.



5125.74-9000  Contractors Accompanying the Force--Deployment of Contractor 
Personnel in Support of Military Operations

                            Scope of Subpart

    (a) General. This subpart applies whenever contractors may be 
required to accompany the force in support of military operations, as 
defined in Joint Publication 1-02, ``DOD Dictionary of Military and 
Associated Terms.''
    (b) Coordination. There are many operational details that will 
affect the scope of work in contracts requiring deployment of contractor 
personnel in support of military operations. The requirements activity, 
in conjunction with the contracting activity, must coordinate with the 
appropriate logistics organization to determine what level of support 
(e.g., billeting, messing, clothing and equipment, access to medical 
facilities, pre-deployment processing) will be available to contractors.
    (i) DFARS 225.802-70 (Contracts for performance outside the United 
States and Canada) prescribes special procedures applicable to contracts 
requiring the performance of work in a foreign country by U.S. personnel 
or a third country contractor, or that will require logistics support 
for contractor employees, and the contracting activity is not under the 
command jurisdiction of a unified or specified command for the country 
involved. This provision generally requires the contracting activity to 
undertake certain coordination with the cognizant contract 
administration office for that country.
    (ii) In situations where no contract administration office has been 
designated, the contracting officer shall ensure, prior to contract 
award, that the responsible combatant command concurs with any contract 
provision that promises logistical support to U.S. or foreign national 
contractor personnel. This requirement may be satisfied through a 
memorandum executed by the requiring activity that documents combatant 
command approval of any logistical support specified in the main body of 
the contract or its statement of work.
    (c) Legal status of contractor personnel. The Status of Forces 
Agreements applicable to the Area of Operations (AO), as well as the 
Geneva Conventions and other international laws govern the legal status 
of contractor personnel. Contractor personnel's legal status will vary 
depending on the location and circumstances surrounding an incident.
    (d) Requirements offices and contracting officers should use the 
Army Contractors Accompanying the Force Guidebook for more detailed 
guidance, including sample contract language, and a listing of Army and 
DoD regulations and other resources. Contracting Officers may tailor 
this language as appropriate, but using the Guidebook will both answer 
many common questions and foster uniform handling of common issues. The 
Guidebook may be found on the Deputy Assistant Secretary of the Army 
(Procurement & Production) Web site at http://dasapp.saalt.army.mil/.
    (e) Solicitation provision and contract clause. The clause at Sec. 
5152.225-74-9000 shall be inserted in all solicitations and contracts 
that may require deployment of contractor personnel in support of 
military operations. It may be tailored to fit the specific 
circumstances of the procurement.

[68 FR 66739, Nov. 28, 2003]

[[Page 264]]



PART 5145_GOVERNMENT PROPERTY--Table of Contents




Sec.
5145.301 Definitions.
5145.302-3 Other contracts.
5145.303 Providing material.

    Authority: 5 U.S.C. 301, 10 U.S.C. 2202, DoD Directive 5000.35, and 
DoD FAR Supplement 201.301.

    Source: 54 FR 39538, Sept. 27, 1989, unless otherwise noted.



5145.301  Definitions.

    Other Government Property means all property, other than Special Use 
Property as defined below, which may be offered to a contractor for use 
in performance of installation support services contracts.
    Special Use Property means property that is (a) ``agency peculiar 
property'', (b) necessary for mobilization requirements; or (c) property 
for which it has been determined that title should remain with the 
Government.



5145.302-3  Other contracts.

    (S-90)(1) When it is determined that contractor use of existing 
Government facilities, other than special use property, in the 
performance of installation support services contracts, is in the best 
interest of the Government, the Government facilities will be offered to 
a contractor for use in the performance of the Government contract. 
Facilities provided to a contractor under this authority will not be 
replaced by the Government when they can no longer be used by the 
contractor. Nevertheless, it will be the contractor's responsibility to 
continue performance in accordance with the terms of the contract.
    (2)(i) New facilities shall not be purchased in order to provide 
them to contractors. Prior to offering existing facilities under this 
authority, a contracting officer shall make a written determination, 
based on the detailed justification provided by the approving officials 
and program/project manager, that such use is in the best interest of 
the Government. The written determination shall be kept in the contract 
file.
    (ii) Existing facilities offered for contractor use will be offered 
to all bidders/offerors for their consideration in the preparation of 
their bids and offers. Bidders/offerors may choose to use any or all of 
the facilities offered.
    (3) When it is determined that contractor use of special use 
property in the performance of installation support services contracts 
is in the best interest of the Government, such property will be 
provided. It will be accounted for and managed under the appropriate 
Government property clause. For example, FAR 52.245-2 for fixed-price 
contracts or FAR 52.245-5 for cost-reimbursement contracts and any 
appropriate provision from FAR 52.245-11, Facilities Use Clause.
    (S-91) Required Government property clauses for other than 
facilities contracts.
    (1) In addition to the clauses at FAR 52.245-2 and 52.245-19, the 
Contracting Officer shall insert the clause at 5152.245-9000, Government 
Property for Installation Support Services (Fixed-Price Contracts), in 
solicitations and contracts when a fixed-price contract is contemplated 
and Government property will be provided without being replaced by the 
Government.
    (2) The Contracting Officer shall insert the clause at 5152.245-
9001, Government Property for Installation Support Services (Cost-
Reimbursement Contracts), in solicitations and contracts when a cost-
reimbursement type contract is contemplated and the Government property 
will be provided without being replaced by the Government.



5145.303  Providing material.

    (S-90) Existing Government material on hand or being used prior to 
conversion to contractor performance of commercial activities may be 
offered to contractors if it is determined to be in the best interest of 
the Government per FAR 45.303-1. If the material is to be provided 
without replacement by the Government, the solicitation must state that 
it will not be replaced. If it is determined that the Government will be 
responsible for replacement of any of the material, those items must be 
listed on a separate Technical Exhibit and the solicitation state that 
replacement will be by the Government. These items will be governed by 
the appropriate Government Property clause

[[Page 265]]

in the contract in accordance with FAR 52.245-2 for fixed-price and FAR 
52.245-5 for cost-reimbursement type contracts.



PART 5152_SOLICITATIONS PROVISIONS AND CONTRACT CLAUSES--Table of Contents




Sec.
5152.208-9001 Industrial preparedness planning.
5152.225-74-9000 Contractors accompanying the force.
5152.245-9000 Government property for installation support services 
          (fixed-price contracts).
5152.245-9001 Government property for installation support services 
          (cost-reimbursement contracts).

    Authority: 5 U.S.C. 301, 10 U.S.C. 2202, DOD Directive 5000.35, and 
DOD FAR Supplement 201.301.



5152.208-9001  Industrial preparedness planning.

    As prescribed at 5108-070(g)(4) insert the following clause in full 
text in contracts where the contractor is designated a Limited Fee 
Planned Producer.

            Industrial Preparedness Planning (XXX 1989) (DEV)

    (a) The Government designates the contractor a Limited Fee Planned 
Producer (LFPP) for the item(s) listed in paragraph (e) of this clause. 
As an LFPP for the listed items, the contractor will be solicited for 
all acquisitions over $25,000 which are for the item(s), excluding those 
for which competition is restricted to the Restricted Specified Base 
pursuant to an approved Justification and Approval. The Government 
reserves the right to obtain the item(s) listed from sources other than 
the commercial marketplace, i.e. by assigning workload to a government-
owned facility.
    (b) The Contractor agrees to:
    (i) Update the Production Capacity Survey DD Form 1519 TEST for each 
item biennially;
    (ii) Accomplish subcontractor planning as required in paragraph (f) 
of this clause;
    (iii) Permit Government personnel access to records, manufacturing 
process data, plants and facilities in order to verify data on the 
Production Capacity Survey DD Form 1519 TEST.
    (iv) Maintain the surge/mobilization capacity set forth in the 
Production Planning Schedules during active production of the item and 
for a period of (negotiated number) years after physical completion of 
this production contract.
    (c) The Contractor is aware of the Government's dependence upon the 
Production Planning Schedules as a basis to take appropriate measures to 
ensure the adequacy of the United States Industrial Base. The Contractor 
also recognizes the Government's intention to convert Production 
Planning Schedule to contracts on a selective basis, as may be required 
to minimize materiel shortages during mobilization or to meet 
contingencies short of a declared national emergency. The Contractor 
agrees to accept contracts for the item(s) in accordance with the 
Production Planning Schedules. In the event mobilization or 
contingencies short of a declared national emergency occur after active 
production has ceased, and the allocated capacity is in use for the 
production of other item(s), the Contractor agrees to immediately 
discontinue production of such other item(s) if necessary to meet 
production schedules for the planned item(s). The Contractor further 
recognizes that it is the Government's intention to require that planned 
subcontractor support will be similarly converted to production 
subcontracts. Production delivery obligations under this clause are 
governed by Title I of the Defense Production Act of 1950, as amended 
(50 U.S.C. app. 2061, et seq.) (Defense Production Act) and as 
applicable are within the purview of the Defense Priorities and 
Allocation System.
    (d) For the listed item(s), the Contractor certifies by signing this 
contract that the plant capacity required to support the mobilization 
quantity listed on the Production Capacity Survey DD Form 1519 TEST will 
be dedicated exclusively for the production of that item at 
mobilization. Furthermore, the Contractor certifies that this capacity 
is not shared by any other mobilization production requirements.
    (e) This clause covers the item(s) listed below:

------------------------------------------------------------------------
             Item schedule No.               Item nomenclature (sample)
------------------------------------------------------------------------
M11111....................................  Fuze, Rocket MK987.
M22222....................................  Machine Gun, MK35.
------------------------------------------------------------------------

    (f) Subcontractors, suppliers and vendors provide many of the 
components of military end items. The lack of critical components could 
be one of the major limitations of the United States' ability to support 
its Armed Forces warfighting capabilities. Therefore, the Government 
designated critical components and/or subassemblies in Block 27 
of the attached Production Capacity Survey (DD Form 1519 TEST) are those 
for which the Contractor will conduct vertical planning if not produced 
in-house. Additional critical components and/or subassemblies may be 
identified by the Contractor in block 21 of the attached 
Production Capacity Survey (DD Form 1519 TEST). Foreign producers

[[Page 266]]

(other than Canada) will not be considered as a source of supply for 
critical components. Mandatory vertical (subcontractor) planning will be 
accomplished by the ASPPO and the Contractor for all critical components 
identified on the Production Capacity Survey, (DD Form 1519 TEST), by 
using a sub-tier Production Capacity Survey (DD Form 1519 TEST). The 
Contractor agrees to coordinate completion of the DD Form 1519 TEST and 
finalize prime and subcontractor planning with the Armed Services 
Production Planning Officer (ASPPO) having cognizance over the prime 
contractor's facility.
    (g) After completion of active production of the item(s), the 
Government will annually, or as changes occur but not more than 
annually, furnish the Contractor updated technical data for the item. 
The Contractor agrees to review the technical data and to report to the 
Government within 60 days of receipt of the data, the impact of 
technical changes, if any, to the current Production Planning Schedules 
at no additional cost to the Government.
    (h) Retention by the Contractor of the surge/mobilization capacity 
set forth in the Production Planning Schedules after completion of 
active production of the planned item(s) will not necessarily require 
that the Contractor maintain such capacity in idle status. Contractor 
utilization of capacity allocated for planned production for production 
of other non-planned items is consistent with the intent of any 
postproduction provisions of this contract, provided no degradation of 
surge/mobility capacity occurs as a result, and provided that the 
approval of the Contracting Officer with property cognizance is obtained 
for the use of any Government-owned property.

[54 FR 38683, Sept. 20, 1989]



5152.225-74-9000  Contractors Accompanying the Force.

    As prescribed at subpart 5125.74-9000(e) insert the following 
clause:

             Contractors Accompanying the Force (NOV. 2003)

    (a) General. (1) Performance of this contract may require deployment 
of Contractor Personnel in support of military operations. The 
Contractor acknowledges that such operations are inherently dangerous 
and accepts the risks associated with contract performance in this 
environment.
    (2) For purposes of this clause, the term ``Contractor Personnel'' 
refers to the Contractor's officers and employees. Unless otherwise 
specified (e.g., subparagraph (b) of this clause), this term does not 
include personnel who permanently reside in the country where contract 
performance will take place.
    (3) The Contractor shall ensure that Contractor Personnel working in 
an area of operations (AO, as defined in the Joint Publication 1-02, 
``DOD Dictionary of Military and Associated Terms'') are familiar and 
comply with applicable: (i) Military Service and Department of Defense 
regulations, directives, instructions, general orders, policies, and 
procedures, in particular Army Regulation 715-9 and Field Manual 3-
100.21; (ii) U.S., host country, local, and international laws and 
regulations; and (iii) treaties and international agreements (e.g., 
Status of Forces Agreements, Host Nation Support Agreements, and Defense 
Technical Agreements) relating to safety, health, force protection, and 
operations under this contract.
    (4) The Contractor shall ensure that this clause is included in all 
subcontracts.
    (b) Compliance with Combatant Command Orders. The Contractor shall 
ensure that Contractor Personnel, regardless of residency status, 
working in the AO comply with all orders, directives, and instructions 
of the combatant command relating to non-interference in military 
operations, force protection, health, and safety. The Combatant 
Commander or his subordinate commanders, in conjunction with the 
Contracting Officer or the Contracting Officer's Representative, may 
direct the Contractor, at the Contractor's own expense, to replace and, 
where applicable, repatriate any Contractor personnel who fail to comply 
with this provision. Such action may be taken at the Government's 
discretion without prejudice to its rights under any other provision of 
this contract, including the Termination for Default clause.
    (c) Contractor Personnel Administration. (1) In order to maintain 
accountability of all deployed personnel in the AO, the Contractor shall 
follow instructions issued by the Army Materiel Command's Logistics 
Support Element (AMC LSE) or other Contracting Officer's designated 
representative to provide, and keep current, requested data on 
Contractor Personnel for entry into military personnel database systems.
    (2) The Contractor shall coordinate with the AMC LSE or other 
Contracting Officer's designated representative for logistics support, 
as follows: (i) Upon initial entry into the AO; (ii) upon initiation of 
contract performance; (iii) upon relocation of contract operations 
within the AO; and (iv) upon exiting the AO.
    (3) Before deployment, the Contractor shall ensure that:
    (i) All Contractor Personnel complete two DD Forms 93, Record of 
Emergency Data Card. One copy of the completed form shall be returned to 
the Government official specified by the Contracting Officer's 
designated representative; the other shall be hand-carried by the 
individual employee to the AO.

[[Page 267]]

    (ii) All required security and background checks are completed.
    (iii) All medical screening and requirements are met.
    (4) The Contractor shall ensure that Contractor Personnel have 
completed all pre-deployment requirements specified by the Contracting 
Officer's designated representative (including processing through the 
designated Continental United States (CONUS) Replacement Center unless 
another deployment processing method is specifically authorized), and 
the Contractor shall notify the Contracting Officer's designated 
representative that these actions have been accomplished.
    (5) The Contractor shall have a plan for timely replacement of 
employees who are no longer available for deployment for any reason, 
including mobilization as members of the Reserve, injury, or death.
    (d) Clothing and Equipment Issue. (1) To help distinguish them from 
combatants, Contractor Personnel shall not wear military clothing unless 
specifically authorized by a written Department of Army waiver. 
Contractor Personnel may wear specific items of clothing and equipment 
required for safety and security such as ballistic or NBC (Nuclear, 
Biological, Chemical) protective clothing. The CONUS Replacement Center 
or the combatant command may provide to the Contractor Personnel 
military unique Organizational Clothing and Individual Equipment (OCIE) 
to ensure security and safety.
    (2) All issued OCIE shall be considered Government Furnished 
Property, and will be treated in accordance with Government Furnished 
Property clauses included elsewhere in this contract.
    (e) Weapons and Training. (1) Contractor Personnel may not possess 
privately owned firearms in the AO. The combatant command may issue 
weapons and ammunition to Contractor Personnel, with the employee's 
company's consent as well as the individual employees' consent, and may 
require weapons and other pre-deployment training.
    (2) The Contractor shall ensure that Contractor Personnel follow all 
instructions by the combatant command, as well as applicable Military 
Service and DoD regulations, regarding possession, use, safety, and 
accountability of weapons and ammunition.
    (3) All issued weapons, ammunition, and accessories (e.g., holsters) 
shall be considered Government Furnished Property. Upon redeployment or 
notification by the combatant command, the Contractor shall ensure that 
all Government issued weapons and unused ammunition are returned to the 
point of issue using a method that complies with Military Service 
regulations for issue and turn-in of firearms.
    (f) Vehicle and Equipment Operation. (1) The Contractor shall ensure 
that Contractor Personnel possess the required licenses to operate all 
vehicles or equipment necessary to perform the contract in the AO.
    (2) Contractor-owned or leased motor vehicles or equipment shall 
meet all requirements established by the combatant command and shall be 
maintained in a safe operating condition.
    (g) Passports, Visas and Customs. The Contractor is responsible for 
obtaining all passports, visas, and other documents necessary for 
Contractor Personnel to enter and exit any AO.
    (h) Purchasing Limited Resources. When the Combatant Command 
establishes a Commander-in-Chief Logistics Procurement Support Board 
(CLPSB), Joint Acquisition Review Board, or similar purchase review 
committee, the contractor will be required to coordinate local purchases 
of goods and services designated as limited, in accordance with 
instructions provided by the Administrative Contracting Officer or the 
Contracting Officer's designated representative.

                             (End of clause)

[68 FR 66740, Nov. 28, 2003]

Authority:5 U.S.C. 301, 10 U.S.C. 2202, DOD Directive 5000.35, FAR 1.301 
and DOD FAR Supplement 201.3.



5152.245-9000  Government property for installation support services 
(fixed-price contracts).

    As prescribed in 5145.302-3(91), insert the following:

   Government Property for Installation Support Services (Fixed-Price 
                       Contracts) (Oct 1989) (DEV)

    The Government property listed at Technical Exhibit ---- is provided 
``as is'' to the contractor for use in the performance of this contract. 
This property may be used by the Contractor until the Contractor no 
longer desires to use it for contract performance or the Contracting 
Officer withdraws it from use under this contract in accordance with FAR 
52.245-2(b). The Contractor will comply with instructions from the 
Contracting Officer relative to disposition of the property. No 
equitable adjustment or other claim will be payable to the Contractor 
based upon the condition or availability of the property, except as 
provided in FAR 52.245-19. The Contractor remains responsible for 
performance of the required services under this contract regardless of 
the length of time which the property provided hereunder remains 
operational. Property provided by or obtained by the Contractor under 
this contract remains Contractor property. Except as provided herein, 
the property listed at Technical Exhibit ---- will be governed by FAR 
52.245-2,

[[Page 268]]

Government Property (Fixed-Price Contracts), and FAR 52.245-19, 
Government Property Furnished ``as is''.

                             (End of clause)

[54 FR 39539, Sept. 27, 1989]



5152.245-9001  Government property for installation support services 
(cost-reimbursement contracts).

    As prescribed in 5145.302-3(S-91), insert the following clause:

      Government Property for Installation Support Services (Cost-
                Reimbursement Contracts) (Oct 1989) (DEV)

    (a) Government-furnished property. The Government property listed at 
Technical Exhibit ---- is provided to the contractor for use in the 
performance of this contract for installation support services. This 
property will be used, maintained and administered by the Contractor 
until it is no longer required by the Contractor. Cessation of such use 
of the property, and subsequent turn-in, must be approved by the 
Contracting Officer. The Contracting Officer will provide the Contractor 
with appropriate disposition instructions. The Contractor will continue 
to perform following such disposition with Contractor-owned property. No 
equitable adjustment or claim will be payable resulting from turn-in or 
unsuitability for intended use of this property. No change to this 
contract is indicated by approval of turn-in of the property. No delay 
claim or performance delay will be allowed based on unsuitability of 
property or turn-in. The Contractor's proposal includes an estimate of 
the costs for providing its own property for the period following turn-
in of Government property.
    (b) Changes in Government-furnished property. The Contracting 
Officer may, by written notice, decrease the Government-furnished 
property or substitute other property for the property being used by the 
contractor. In the case of this withdrawal of property by the 
Contracting Officer, an equitable adjustment may be appropriate. 
Nevertheless, even in the case of such withdrawal, the Contractor is 
obligated to continue performance under this contract.
    (c) Title in Government Property. (1) Title to the Property shall 
remain in the Government. Title to parts replaced by the Contractor in 
carrying out its normal maintenance obligations under paragraph (g) of 
this clause shall pass to and vest in the Government upon completion of 
their installation in the property.
    (2) Title to the property shall not be affected by their 
incorporation into or attachment to any property not owned by the 
Government, nor shall any item of the property become a fixture or lose 
its identity as personal property by being attached to any real 
property. The Contractor shall keep the property free and clear of all 
liens and encumbrances and, except as otherwise authorized by this 
contract or by the Contracting Officer, shall not remove or otherwise 
part with possession of, or permit the use by others of any of the 
property.
    (3) The Contractor may, with the written approval of the Contracting 
Officer, install, arrange, or rearrange, on Government furnished 
premises, readily removable machinery, equipment and other items 
belonging to the Contractor. Title to any such item shall remain in the 
Contractor even though it may be attached to real property owned by the 
Government, unless the Contracting Officer determines that it is so 
permanently attached that removal would cause substantial injury to 
Government property.
    (4) The Contractor shall not construct or install, at its own 
expense, any fixed improvement or structural alterations in Government 
buildings or other real property without advance written approval of the 
Contracting Officer. Fixed improvement or structural alterations as used 
herein, means any alteration or improvement in the nature of the 
building or other real property that, after completion, cannot be 
removed without substantial loss of value or damage to the premises. The 
term does not include foundations for production equipment.
    (d) Location of the property. The Contractor may use the property 
only at the installation location(s) specified in the schedule. Written 
approval of the Contracting Officer is required prior to moving the 
property to any other location. In granting this approval, the 
Contracting Officer may prescribe such terms and conditions as may be 
deemed necessary for protecting the Government's interest in the 
property involved. Those terms and conditions shall take precedence over 
any conflicting provisions of this contract.
    (e) Notice of use of the property. The Contractor shall notify the 
Contracting Officer in writing whenever any item of the property is no 
longer needed or usable for performing under this contract. The 
contracting officer will then make a decision as to disposition if 
agreement is reached with the Contractor that the property is no longer 
usable or suitable for its intended use.
    (f) Property Control. The Contractor shall maintain property control 
procedures and records, and a system of identification of the property, 
in accordance with the provisions of FAR subpart 45.5 in effect on the 
date of this contract.
    (g) Maintenance. (1) Except as otherwise provided in the Schedule, 
the Contractor shall protect, preserve, maintain (including normal parts 
replacement), and repair the property in accordance with sound 
industrial practice.

[[Page 269]]

    (2) No later than 45 days after the execution of this contract, the 
Contractor shall submit to the Contracting Officer a written proposed 
maintenance program, including a maintenance records system, in 
sufficient detail to show the adequacy of the proposed program. If the 
Contracting Officer agrees to the proposed program, it shall become the 
normal maintenance obligation of the Contractor. The Contractor's 
performance according to the approved program shall satisfy the 
Contractor's obligations under paragraphs (g) (1) and (5) of this 
clause.
    (3) The Contracting Officer may at any time direct the Contractor in 
writing to reduce the work required by the normal maintenance program. 
If such order reduces the cost of performing the maintenance, an 
appropriate equitable adjustment may be made.
    (4) The Contractor shall perform any maintenance work directed by 
the Contracting Officer in writing. Work in excess of the maintenance 
required under paragraphs (g)(1) through (g)(3) of this clause shall be 
at Government expense. The Contractor shall notify the Contracting 
Officer in writing when sound industrial practice requires maintenance 
in excess of the normal maintenance program. The Contracting Officer 
shall then make a determination whether to repair the facilities or 
whether the Contractor should provide contractor property while 
continuing to perform.
    (5) The Contractor shall keep records of all work done on the 
property and shall give the Government reasonable opportunity to inspect 
such records. When property is disposed of under this contract, the 
Contractor shall deliver the related records to the Government, or, if 
directed by the Contracting Officer, to third persons.
    (6) The Contractor's obligation under this clause for each item of 
property shall continue until the item is removed, abandoned, or 
disposed of in accordance with Contracting Officer's instructions.
    (h) Access. The Government and any persons designated by it shall, 
at all reasonable times have access to the premises where any of the 
property is located.
    (i) Indemnification of the Government. The Contractor shall 
indemnify the Government and hold it harmless against claims for injury 
to persons or damage to property of the Contractor or others arising 
from the Contractor's possession or use of the property under this 
contract. Nevertheless, this provision applies only to injury arising 
out of use of property provided under this clause.
    (j) Representation and warranties. (1) The Government makes no 
warranty, express or implied, regarding the condition or fitness for use 
of any property. To the extent practical, the Contractor shall be 
allowed to inspect all the property to be furnished by the Government.
    (2) If, however, the Contractor receives property in a condition not 
suitable for the intended use, the Contractor shall, within 30 days 
after receipt and installation thereof, so notify the Contracting 
Officer, detailing the facts, and, as directed by the Contracting 
Officer, and at Government expense, either return such item or otherwise 
dispose of it or effect repairs or modifications. If the determination 
is made by the Contracting Officer to require turn-in rather than repair 
of the property, then the Contractor will continue to perform the 
contract by using its own property, for which reimbursement will be made 
in accordance with applicable cost principles.
    (k) Limited risk of loss. (1) The Contractor shall not be liable for 
loss or destruction of, or damage to, the Government property provided 
under this contract or for expenses incidental to such loss, 
destruction, or damage, except as provided in paragraphs (k) (2) and (3) 
of this clause.
    (2) The Contractor shall be responsible for loss or destruction of, 
or damage to, the Government property provided under this contract 
(including expenses incidental to such loss, destruction, or damage)--
    (i) That results from a risk expressly required to be insured under 
this contract, but only to the extent of the insurance required to be 
purchased and maintained or to the extent of insurance actually 
purchased and maintained, whichever is greater;
    (ii) That results from a risk that is in fact covered by insurance 
or for which the Contractor is otherwise reimbursed, but only to the 
extent of such insurance or reimbursement:
    (iii) For which the Contractor is otherwise responsible under the 
express terms of this contract;
    (iv) That results from willful misconduct or lack of good faith on 
the part of the Contractor's managerial personnel; or
    (v) That results from a failure on the part of the Contractor, due 
to willful misconduct or lack of good faith on the part of the 
Contractor's managerial personnel, to establish and administer a program 
or system for the control, use, protection, preservation, maintenance, 
and repair of Government property as required by paragraph (f) of this 
clause.
    (3)(i) If the Contractor fails to act as provided by paragraph 
(k)(2)(v) of this clause, after being notified (by certified mail 
addressed to one of the Contractor's managerial personnel) of the 
Government's disapproval, withdrawal of approval, or nonacceptance of 
the system or program, it shall be conclusively presumed that such 
failure was due to willful misconduct or lack of good faith on the part 
of the Contractor's managerial personnel.
    (ii) In such event, any loss or destruction of, or damage to, the 
Government property shall be presumed to have resulted from such

[[Page 270]]

failure unless the Contractor can establish by clear and convincing 
evidence that such loss, destruction, or damage--
    (A) Did not result from the Contractor's failure to maintain an 
approved program or system; or
    (B) Occurred while an approved program or system was maintained by 
the Contractor.
    (4) If the Contractor transfers Government property to the 
possession and control of a subcontractor, the transfer shall not affect 
the liability of the Contractor for loss or destruction of, or damage 
to, the property as set forth above. However, the Contractor shall 
require the subcontractor to assume the risk of, and be responsible for, 
any loss or destruction of, or damage to, the property while in the 
subcontractor's possession or control, except to the extent that the 
subcontract, with the advance approval of the Contracting Officer, 
relieves the subcontractor from such liability. In the absence of such 
approval, the subcontract shall contain appropriate provisions requiring 
the return of all Government property in as good condition as when 
received, except for reasonable wear and tear or for its use in 
accordance with the provisions of the prime contract.
    (5) Upon loss or destruction of, or damage to, Government property 
provided under this contract, the Contractor shall so notify the 
Contracting Officer and shall communicate with the loss and salvage 
organization, if any, designated by the Contracting Officer. With the 
assistance of any such organization, the Contractor shall take all 
reasonable action to protect the Government property from further 
damage, separate the damaged and undamaged Government property, put all 
the affected Government property in the best possible order, and furnish 
to the Contracting Officer a statement of--
    (i) The lost, destroyed, or damaged Government property;
    (ii) The time and origin of the loss, destruction, or damage;
    (iii) All known interests in commingled property of which the 
Government property is a part; and
    (iv) The insurance, if any, covering any part of or interest in such 
commingled property.
    (6) The Contractor shall repair, renovate, and take such other 
action with respect to damaged Government property as the Contracting 
Officer directs. If the Government property is destroyed or damaged 
beyond practical repair, or is damaged and so commingled or combined 
with property of others (including the Contractor's) that separation is 
impractical, the Contractor may, with the approval of and subject to any 
conditions imposed by the Contracting Officer, sell such property for 
the account of the Government. Such sales may be made in order to 
minimize the loss to the Government, to permit the resumption of 
business, or to accomplish a similar purpose. The Contractor shall be 
entitled to an equitable adjustment in the contract price for the 
expenditures made in performing the obligations under this subparagraph 
(k)(6). However, the Government may directly reimburse the loss and 
salvage organization for any of their charges. The Contracting Officer 
shall give due regard to the Contractor's liability under this paragraph 
(k) when making any such equitable adjustment.
    (7) The Contractor shall not be reimbursed for, and shall not 
include as an item of overhead, the cost of insurance or of any reserve 
covering risk of loss or destruction of, or damage to, Government 
property, except to the extent that the Government may have expressly 
required the Contractor to carry such insurance under another provision 
of this contract.
    (8) In the event the Contractor is reimbursed or otherwise 
compensated for any loss or destruction of, or damage to, Government 
property, the Contractor shall use the proceeds to repair, renovate, or 
replace the lost, destroyed, or damaged Government property or shall 
otherwise credit the proceeds to, or equitably reimburse, the 
Government, as directed by the Contracting Officer.
    (9) The Contractor shall do nothing to prejudice the Government's 
rights to recover against third parties for any loss or destruction of, 
or damage to, Government property. Upon the request of the Contracting 
Officer, the Contractor shall, at the Government's expense, furnish to 
the Government all reasonable assistance and cooperation (including the 
prosecution of suit and the execution of instruments of assignment in 
favor of the Government) in obtaining recovery. In addition, where a 
subcontractor has not been relieved from liability for any loss or 
destruction of, or damage to, Government property, the Contractor shall 
enforce for the benefit of the Government the liability of the 
subcontractor for such loss, destruction, or damage.
    (1) Disposition of the facilities. (1) The provisions of this 
paragraph shall apply to facilities whose use has been terminated by 
either the Contracting Officer or the Contractor because the property is 
no longer suitable for intended use, no longer desired, or is withdrawn 
from use by the Government.
    (2) The Contractor shall dispose of the property provided hereunder 
in accordance with guidance provided by the Contracting Officer.
    (3) The Contracting Officer shall give disposition instructions 
within 60 days of agreement that the property should be returned to the 
Government.
    (4) The Government may remove or otherwise dispose of any facilities 
for which the Contractor's authority to use has been terminated.

[[Page 271]]

    (5) When Government property is returned to the Government, upon 
termination of the contract relationship between Government and 
Contractor or when Government furnished property is replaced by 
Contractor property, the Contracting Officer may direct repair of 
Government property necessitated by the change from Government to 
Contractor property such as removal of fixtures. When Contractor 
property is removed from Government property at the end of contract 
performance, the Government property will be restored to its condition 
prior to installation of Contractor property in accordance with 
Contracting officer direction.

                             (End of clause)

[54 FR 39539, Sept. 27, 1989]

[[Page 273]]



       CHAPTER 52--DEPARTMENT OF THE NAVY ACQUISITION REGULATIONS




                          (Parts 5200 to 5299)

  --------------------------------------------------------------------
Part                                                                Page
5215            Contracting by negotiation..................         275
5231            Contract cost principles and procedures.....         277
5242            Contract administration.....................         278
5243

[Reserved]

5252            Solicitation provisions and contract clauses         279

[[Page 275]]



PART 5215_CONTRACTING BY NEGOTIATION--Table of Contents




   Subpart 5215.4_Solicitation and Receipt of Proposals and Quotations

Sec.
5215.402 General.
5215.407 Solicitation provisions.

                     Subpart 5215.6_Source Selection

5215.605 Evaluation factors.
5215.608 Proposal evaluation.

                    Subpart 5215.8_Price Negotiation

5215.804-3 Exemptions from or waiver of submission of certified cost or 
          pricing data.

    Authority: 5 U.S.C. 301, 10 U.S.C. 2202, DOD Directive 5000.35.

    Source: 53 FR 16280, May 6, 1988, unless otherwise noted.



   Subpart 5215.4_Solicitation and Receipt of Proposals and Quotations



5215.402  General.

    (a) Competition is the cornerstone of Navy acquisition policy. As 
such, the preferred and predominant method of pricing in the Navy is 
through the use of competition, without the need for cost or pricing 
data and cost analysis. The Navy has found that not only does 
competition generate more favorable prices, but significant time and 
effort can be saved by relying on the forces of competition to establish 
prices, as opposed to the use of detailed cost analysis. This approach 
is not only consistent with the Competition in Contracting Act (CICA), 
but it affords the opportunity for significant efficiencies and 
reduction of procurement leadtime as a result of minimizing the 
requirement for cost or pricing data and associated audit reports. As 
competition is increasingly relied upon and the need for cost or pricing 
data is reduced, there may be a corresponding requirement for performing 
a cost realism evaluation for many competitive procurements to guard 
against unrealistically low prices which can lead to quality 
deficiencies, late deliveries, performance shortfalls, and cost 
overruns. In performing cost realism evaluation, only the minimum 
selected data to perform the cost realism evaluation is to be obtained, 
as opposed to full cost or pricing data which would be required when it 
is necessary to perform cost-based negotiations, such as in the case of 
sole source negotiations.



5215.407  Solicitation provisions.

    (S-90) During acquisition planning, an assessment shall be made as 
to the likelihood that adequate price competition will exist. If it is 
anticipated that an award will be based on adequate price competition, 
the solicitation shall include the provision at 5252.215-9000. If the 
procurement schedule is critical, this provision with its Alternate I 
shall be used so that there will be a minimum delay in the event that 
adequate price competition does not materialize and it is necessary to 
obtain cost or pricing data. Contracting officers must be judicious in 
the use of the Alternate I provision, as it may cause offerors to incur 
certain costs in preparing standby cost or pricing data in anticipation 
that it may be subsequently requested.



                     Subpart 5215.6_Source Selection



5215.605  Evaluation factors.

    (S-90)(1) When a cost realism evaluation will be performed, the 
source selection evaluation criteria shall include a notice that the 
proposed costs may be adjusted, for purposes of evaluation, based upon 
the results of the cost realism evaluation.
    (2) Technical criteria may include quality standards that are based 
on either a minimally acceptable approach or a cost/benefit approach. 
When the quality desired is that necessary to meet minimum needs, 
proposals should be evaluated for acceptability and award made to the 
lowest priced, technically acceptable offer. When the quality desired is 
the highest affordable or that representing the best value, proposals 
should be evaluated on a cost/benefit basis that would permit an award 
based on paying appropriate premiums for measured increments of quality. 
When a cost/benefit approach is used, cost must carry a weight of not 
less than 40% unless thoroughly justified.

[[Page 276]]

    (3) Cost realism evaluation. (i) Cost realism evaluation involves a 
summary level review of the cost portion (excluding profit/fee) of the 
offerors' proposals to determine if the overall costs proposed are 
realistic for the work to be performed. Cost realism evaluation differs 
from the detailed cost analysis usually undertaken in a noncompetitive 
procurement to determine the reasonableness of the various cost elements 
and profit/fee to arrive at a fair and reasonable price. Data submitted 
only for cost realism evaluation generally will not be certified.
    (ii) The purpose of cost realism evaluation is to:
    (A) Verify the offeror's understanding of the requirements;
    (B) Assess the degree to which the cost/price proposal reflects the 
approaches and/or risk assessments made in the technical proposal as 
well as the risk that the offeror will provide the supplies or services 
for the offered prices/costs; and
    (C) Assess the degree to which the cost included in the cost/price 
proposal accurately represents the work effort included in the technical 
proposal.
    (iii) Some examples of data and information that may be obtained to 
perform cost realism evaluation are:
    (A) Manloading (quantity and mix of labor hours);
    (B) Engineering, labor and overhead rates; and
    (C) Make or buy plans.

A price analysis approach where there is adequate price history may also 
be a suitable and efficient means to evaluate cost realism. The amount 
of data required will be dependent upon the complexity of the 
procurement and the data already obtained by the contracting officer 
(e.g. information on recent Forward Pricing Rate Agreements (FPRAs)).
    (iv) Cost realism evaluation generally will be performed as a part 
of the proposal evaluation process (see 5215.605) for all competitive 
solicitations where a cost reimbursement contract is contemplated. For 
competitive solicitations contemplating a fixed price, labor hour, or 
time and material type contract, a cost realism evaluation would be the 
exception and not the rule, although its use may be appropriate where 
the proposal evaluation process will encompass both a cost/price 
evaluation and a technical evaluation. Also, where the contracting 
officer suspects a ``buy-in'' (see FAR 3.501) or a misunderstanding of 
the requirements as a result of reviewing the initial offers, data and 
information should be obtained and a cost realism evaluation performed.
    (v) When cost realism data are required, the contracting officer 
shall not request a formal field pricing report but rather, shall 
request a review of only those specific areas of information necessary 
to allow the contracting officer to perform a cost realism evaluation. 
For example, the contracting officer may only need to know the current 
or FPRA labor and/or overhead rates. In these instances, the request for 
information from DCAA may be oral or written.



5215.608  Proposal evaluation.

    (a) When a cost realism evaluation will be performed in accordance 
with 5215.605(S-90), the resulting realistic cost estimate shall be used 
in the evaluation of cost.



                    Subpart 5215.8_Price Negotiation



5215.804-3  Exemptions from or waiver of submission of certified cost 
or pricing data.

    (a) General. As explained in 5215.402, cost or pricing data would 
not normally be obtained because the predominant portion of Navy 
procurements are awarded on the basis of adequate price competition.
    (b)(1)(iii) Adequate price competition may also exist where price is 
a secondary factor in the evaluation of proposals, as long as price is a 
substantial factor. Price, as used herein, means cost plus any fee or 
profit applicable to the contract price. Thus, in competitive 
acquisitions where adequate price competition is contemplated, the 
contracting officer shall not require the submission of cost or pricing 
data whether certified or not, as defined in FAR 15.801, regardless of 
the type of contract.
    (b)(3) Examples of contract awards for which prices may be based on 
adequate price competition and/or to have

[[Page 277]]

been established by adequate price competition are:
    (i) Contracts for items for which there are a limited number of 
sources and the prices at which award will be made are within a 
reasonable amount of each other and compare favorably with independent 
Government estimates and with prior prices paid;
    (ii) Any contract, including cost-type contracts, when cost is a 
significant evaluation factor; and
    (iii) Contracts for which there are dual sources.



PART 5231_CONTRACT COST PRINCIPLES AND PROCEDURES--Table of Contents




         Subpart 5231.2_Contracts with Commercial Organizations

Sec.
5231.205 Selected costs.
5231.205-90 Shipbuilding capability preservation agreements.

    Authority: 5 U.S.C. 301, 10 U.S.C. 2501, 10 U.S.C. 7315, DoD 
Directive 5000.35.

    Source: 62 FR 66827, Dec. 22, 1997, unless otherwise noted.



         Subpart 5231.2_Contracts With Commercial Organizations



5231.205  Selected costs.



5231.205-90  Shipbuilding capability preservation agreements.

    (a) Scope and authority. Where it would facilitate the achievement 
of the policy objectives set forth in 10 U.S.C. 2501(b), the Navy may 
enter into a shipbuilding capability preservation agreement with a 
contractor. As authorized by section 1027 of the National Defense 
Authorization Act for Fiscal Year 1998 (Public Law 105-85), such an 
agreement permits the contractor to claim certain indirect costs 
attributable to its private sector work as allowable costs on Navy 
shipbuilding contracts.
    (b) Definition. Incremental indirect cost, as used in this 
subsection, means an additional indirect cost that results from 
performing private sector work described in a shipbuilding capability 
preservation agreement.
    (c) Purpose and guidelines. The purpose of a shipbuilding capability 
preservation agreement is to broaden and strengthen the shipbuilding 
industrial base by providing an incentive for a shipbuilder to obtain 
new private sector work, thereby reducing the Navy's cost of doing 
business. The Navy will use the following guidelines to evaluate 
requests for shipbuilding capability preservation agreements:
    (1) The Assistant Secretary of the Navy for Research, Development 
and Acquisition must make a determination that an agreement would 
facilitate the achievement of the policy objectives set forth in 10 
U.S.C. 2501(b). The primary consideration in making this determination 
is whether an agreement would promote future growth in the amount of 
private sector work that a shipbuilder is able to obtain.
    (2) An agreement generally will be considered only for a shipbuilder 
with little or no private sector work.
    (3) The agreement shall apply to prospective private sector work 
only, and shall not extend beyond 5 years.
    (4) The agreement must project an overall benefit to the Navy, 
including net savings. This would be achieved by demonstrating that 
private sector work will absorb costs that otherwise would be absorbed 
by the Navy.
    (d) Cost-reimbursement rules. If the Navy enters into a shipbuilding 
capability preservation agreement with a contractor, the following cost-
reimbursement rules apply:
    (1) The agreement shall require the contractor to allocate the 
following costs to private sector work:
    (i) The direct costs attributable to the private sector work;
    (ii) The incremental indirect costs attributable to the private 
sector work; and
    (iii) The non-incremental indirect costs to the extent that the 
revenue attributable to the private sector work exceeds the sum of the 
costs specified in paragraphs (d)(1)(i) and (d)(1)(ii) of this 
subsection.
    (2) The agreement shall require that the sum of the costs specified 
in paragraphs (d)(1)(ii) and (d)(1)(iii) of this subsection not exceed 
the amount of indirect costs that would have been allocated to the 
private sector work in accordance with the contractor's established 
accounting practices.

[[Page 278]]

    (3) The Navy may agree to modify the amount calculated in accordance 
with paragraph (d)(1) of this subsection if it determines that a 
modification is appropriate to the particular situation. In so doing, 
the Navy may agree to the allocation of a smaller or larger portion of 
the amount calculated in accordance with paragraph (d)(1) of this 
subsection, to private sector work.
    (i) Any smaller amount shall not be less than the sum of the costs 
specified in paragraphs (d)(1)(i) and (d)(1)(ii) of this subsection.
    (ii) Any larger amount shall not exceed the sum of the costs 
specified in paragraph (d)(1)(i) of this subsection and the amount of 
indirect costs that would have been allocated to the private sector work 
in accordance with the contractor's established accounting practices.
    (iii) In determining whether such a modification is appropriate, the 
Navy will consider factors such as the impact of pre-existing firm-
fixed-price Navy contracts on the amount of costs that would be 
reimbursed by the Navy, the impact of pre-existing private sector work 
on the cost benefit that would be received by the contractor, and the 
extent to which allocating a smaller or larger portion of costs to 
private sector work would provide a sufficient incentive for the 
contractor to obtain additional private sector work.
    (e) Procedure. A contractor may submit a request for a shipbuilding 
capability preservation agreement, together with appropriate 
justification, through the Deputy Assistant Secretary of the Navy for 
Ships, to the Assistant Secretary of the Navy for Research, Development 
and Acquisition, who has approval or disapproval authority. The 
contractor should also provide an informational copy of any such request 
to the cognizant administrative contracting officer.



PART 5242_CONTRACT ADMINISTRATION--Table of Contents




    Authority: 5 U.S.C. 301, 10 U.S.C. 2202, DOD Directive 5000.35



  Subpart 5242.90_Refunds Require ments (Spares and Support Equipment)



5242.9000  Requests for refunds.

    (a) Policy. (1) This subpart establishes uniform policy and 
procedures on requesting refunds for spare parts or items of support 
equipment. This policy is not intended to diminish the responsibility of 
Navy contracting personnel to properly price spare parts and items of 
support equipment. Further, it is not intended to serve as a mechanism 
for the recovery of excess profits.
    (2) In accordance with the guidance set forth in paragraph (c) of 
this section, contracting activities shall request a refund whenever the 
contract price of any spare part or item of support equipment 
significantly exceeds the item's intrinsic value as defined in the 
clause at 5252.242-9000. Refunds shall be requested only for the 
difference between the intrinsic value of the item at the time an 
agreement on price was reached and the contract price. Refunds will not 
be requested to recoup the amount of cost decreases that occur over time 
due to productivity gains (beyond economic quantity considerations) or 
changes in market conditions.
    (b) Examples. The following are examples of circumstances which may 
establish a basis for a refund request or pricing adjustment:
    (1) A technical or engineering analysis results in a determination 
that the intrinsic value is significantly lower than the historical 
price.
    (2) The price paid for an item bought competitively in similar 
quantity and circumstances (e.g., urgency, delivery terms) is 
significantly less than the former sole source price.
    (3) Prices paid to the manufacturer of an item indicate the amount 
previously charged by the prime contractor for the item significantly 
exceeded the intrinsic value of the prime contractor's efforts in 
providing the item.
    (c) Solicitation provisions. The contracting officer shall insert 
the clause at 5252.242-9000 in solicitations, Basic Ordering Agreements, 
and contracts (as defined in FAR 2.101) which contain

[[Page 279]]

or may contain requirements for spare parts or items of support 
equipment, except those contracts awarded as a result of competitive 
small purchase procedures and orders under federal supply schedules. If 
added to existing contracts, the clause will not apply to items or 
components ordered by the Government prior to the date of incorporation 
of the clause into the contract. Heads of Contracting Activities (HCAs) 
are delegated, without power of redelegation, authority to establish 
monetary thresholds below which refunds will not be requested.

[51 FR 46671, Dec. 24, 1986]

                          PART 5243 [RESERVED]



PART 5252_SOLICITATION PROVISIONS AND CONTRACT CLAUSES--Table of Contents




             Subpart 5252.2_Texts of Provisions and Clauses

Sec.
5252.215-9000 Submission of cost or pricing data.
5252.242-9000 Refunds.
5252.243-9000--5252.243-9001 [Reserved]

    Authority: 5 U.S.C. 301, 10 U.S.C. 2405, DOD Directive 5000.35, and 
DFARS subparts 201.3 and 243.1.

    Source: 53 FR 16282, May 6, 1988, unless otherwise noted.



             Subpart 5252.2_Texts of Provisions and Clauses



5252.215-9000  Submission of cost or pricing data.

    As prescribed at 5215.407, insert the following provision:

              Submission of Cost or Pricing Data (Nov 1987)

    (a) It is expected that this contract will be awarded based upon a 
determination that there is adequate price competition; therefore, the 
offeror is not required to submit or certify cost or pricing data (SF 
1411) with its proposal.
    (b) If, after receipt of the proposals, the contracting officer 
determines that adequate price competition does not exist in accordance 
with FAR 15.804-3, the offeror shall provide certified cost or pricing 
data as requested by the contracting officer.

                             (End of clause)

    Alternate I (Nov 1987) As prescribed at 5215.407, substitute the 
following paragraph (b):

    (b) If, after receipt of the proposals, the contracting officer 
determines that adequate price competition does not exist, the offeror 
shall provide certified cost or pricing data as requested by the 
contracting officer. The offeror shall provide the requested data within 
\1\ calendar days from the date of the contracting officer's request.
---------------------------------------------------------------------------

    \1\ To be completed by the contracting officer.
---------------------------------------------------------------------------

                             (End of clause)



5252.242-9000  Refunds.

    As prescribed in 5242.9000 insert the following clause:

            Refunds (Spares and Support Equipment) (Dec 1986)

    (a) In the event that the price of a spare part or item of support 
equipment delivered under this contract significantly exceeds its 
intrinsic value, the contractor agrees to refund the difference. Refunds 
will only be made for the difference between the intrinsic value of the 
item at the time an agreement on price was reached and the contract 
price. Refunds will not be made to recoup the amount of cost decreases 
that occur over time due to productivity gains (beyond economic purchase 
quantity considerations) or changes in market conditions.
    (b) For purposes of this clause, the intrinsic value of an item is 
defined as follows:
    (1) If the item is one which is sold, or is substantially similar or 
functionally equivalent to one that is sold in substantial quantities to 
the general public, intrinsic value is the established catalog or market 
price, plus the value of any unique requirements, including delivery 
terms, inspection, packaging, or labeling.
    (2) If there is no comparable item sold in substantial quantities to 
the general public, intrinsic value is defined as the price an 
individual would expect to pay for the item based upon an economic 
quantity as defined in FAR 52.207-4, plus the value of any unique 
requirements, including delivery terms, inspection, packaging, or 
labeling.
    (c) At any time up to two years after delivery of a space part or 
item of support equipment, the contracting officer may notify the 
contractor that based on all information available at the time of the 
notice, the price of the part or item apparently exceeds its intrinsic 
value.
    (d) If notified in accordance with paragraph (c) of this clause, the 
contractor

[[Page 280]]

agrees to enter into good faith negotiations with the Government to 
determine if, and in what amount, the Government is entitled to a 
refund.
    (e) If agreement pursuant to paragraph (d) of this clause, cannot be 
reached, and the Navy's return of the new or unused item to the 
contractor is practical, the Navy, subject to the contractor's 
agreement, may elect to return the item to the contractor. Upon return 
of the item to its original point of government acceptance, the 
contractor shall refund in full the price paid. If no agreement pursuant 
to paragraph (d) of this clause is reached, and return of the item by 
the Navy is impractical, the contracting officer may, with the approval 
of the Head of the Contracting Activity, issue a contracting officer's 
final decision on the matter, subject to contractor appeal as provided 
in the Disputes clause.
    (f) The contractor will make refunds, as required under this clause, 
in accordance with instructions from the contracting officer.
    (g) The contractor shall not be liable for a refund if the 
contractor advised the contracting officer in a timely manner that the 
price it would propose for a spare part or item of support equipment 
exceeded its intrinsic value, and with such advice, specified the 
estimated proposed price, the estimated intrinsic value, and known 
alternative sources or items, if any, that can meet the requirement.
    (h) This clause does not apply to any spare parts or items of 
support equipment whose price is determined through adequate price 
competition. This clause also does not apply to any spare part or item 
of support equipment with a unit price in excess of $100,000; or in 
excess of $25,000 if the contractor submitted, and certified the 
currency, accuracy and completeness of, cost or pricing data applicable 
to the item.

                             (End of clause)



5252.243-9000--5252.243-9001  [Reserved]



 CHAPTER 53_DEPARTMENT OF THE AIR FORCE FEDERAL ACQUISITION REGULATION 
                          SUPPLEMENT [RESERVED]



[[Page 281]]



       CHAPTER 54--DEFENSE LOGISTICS AGENCY, DEPARTMENT OF DEFENSE




                          (Parts 5400 to 5499)

  --------------------------------------------------------------------
Part                                                                Page
5416            Types of contracts..........................         283
5433            Protests, disputes and appeals..............         283
5452            Solicitation provisions and contract clauses         283

[[Page 283]]



PART 5416_TYPES OF CONTRACTS--Table of Contents




                  Subpart 5416.2_Fixed Price Contracts

Sec.
5416.203 Fixed-price contracts with economic price adjustment.
5416.203-1 Description.
5416.203-3 Limitations.
5416.203-4 Contract clauses.

    Authority: Fixed Price Contracts

    Source: 64 FR 41835, Aug. 2, 1999, unless otherwise noted.



                  Subpart 5416.2_Fixed Price Contracts



 5416.203  Fixed-price contracts with economic price adjustment.



 5416.203-1  Description.

    (a)(S-90) Adjustments based on established prices. Established 
prices may reflect industry-wide and/or geographically based market 
price fluctuations for commodity groups, specific supplies or services, 
or contract end items.
    (c)(S-90) Adjustments based on cost indexes of labor or materials. 
These price adjustments may also be based on increases or decreases in 
indexes for commodity groups, specific supplies or services, or contract 
end items.



 5416.203-3  Limitations.

    (S-90) A fixed price contract with economic price adjustment may 
also be used to provide for price adjustments authorized in this 
section.



 5416.203-4  Contract clauses.

    (S-90) When the contracting officer determines that an existing EPA 
clause is not appropriate, the contracting officer may develop and use 
another EPA clause in accordance with 5416.203-1 (a)(S-90) or (c)(S-90). 
Established prices and cost indexes need not reflect changes in the 
costs or established prices of a specific contractor. The established 
price or cost index may be derived from sales prices in the marketplace, 
quotes, or assessments as reported or made available in a consistent 
manner in a publication, electronic database, or other form, by an 
independent trade association, Governmental body, or other third party 
independent of the contractor. More than one established price or cost 
index may be combined in a formula for economic price adjustment 
purposes in the absence of an appropriate single price or cost index.



PART 5433_PROTESTS, DISPUTES AND APPEALS--Table of Contents




    Authority: 10 U.S.C. Chapter 137.



5433.214.  Alternative Dispute Resolution (ADR).

    The contracting officer shall insert the provision in 5452.233 in 
all solicitations unless the conditions at FAR 33.203(b) apply.

[66 FR 27474, May 17, 2001]



PART 5452_SOLICITATION PROVISIONS AND CONTRACT CLAUSES--Table of Contents




             Subpart 5452.2_Texts of Provisions and Clauses

Sec.
5452.233-9001 Disputes: Agreement to Use Alternative Dispute Resolution 
          (ADR).
5452.249 Allocation.

    Authority: 5 U.S.C. 301, 10 U.S.C. 2202, 48 CFR part 1, subpart 1.3 
and 48 CFR part 201, subpart 201.3



             Subpart 5452.2_Texts of Provisions and Clauses



5452.233-9001  Disputes: Agreement to Use Alternative Dispute Resolution (ADR).

    As prescribed in 5433.214, insert the following provision:

  Disputes: Agreement to Use Alternative Dispute Resolution (ADR) (Apr 
                               2001)--DLAD

    (a) The parties agree to negotiate with each other to try to resolve 
any disputes that may arise. If unassisted negotiations are 
unsuccessful, the parties will use alternative dispute resolution (ADR) 
techniques to try to resolve the dispute. Litigation will only be 
considered as a last resort when ADR is unsuccessful or has been 
documented by the party rejecting ADR to be inappropriate for resolving 
the dispute.
    (b) Before either party determines ADR inappropriate, that party 
must discuss the use of ADR with the other party. The documentation 
rejecting ADR must be signed by

[[Page 284]]

an official authorized to bind the contractor (see FAR 52.233-1), or, 
for the Agency, by the contracting officer, and approved at a level 
above the contracting officer after consultation with the ADR Specialist 
and with legal counsel. Contractor personnel are also encouraged to 
include the ADR Specialist in their discussions with the contracting 
officer before determining ADR to be inappropriate.
    (c) If you wish to opt out of this clause, check here [ ]. Alternate 
wording may be negotiated with the contracting officer.

[66 FR 27474, May 17, 2001]



5452.249  Allocation.

    The Defense Fuel Supply Center is authorized to use the following 
clause in domestic and overseas petroleum solicitations/contracts, 
including those for Canal Zone and Puerto Rico, when a fixed-price 
contract is contemplated and the contract amount is expected to exceed 
the small purchase limitation.

                Allocation (DFSC 1995) (Deviation) (9F01)

    (a) Reduced Supplies.
    If, for any cause beyond the control and without the fault or 
negligence of the Contractor, the total supply of crude oil and/or 
refined petroleum product is reduced below the level that would have 
otherwise been available to the Contractor, the Contractor allocates to 
its regular customers its remaining available supplies of crude oil or 
product, then the Contractor may also allocate to the U.S. Government 
supplies to be delivered under this contract, provided--
    (1) Prompt notice of and evidence substantiating the necessity to 
allocate and describing the allocation rate for all the Contractor's 
customers are submitted to the Contracting Officer;
    (2) Allocation among the Contractor's regular customers is made on a 
fair and reasonable basis (except where allocation on a different basis 
is required by a governmental authority, agency or instrumentality); and
    (3) Reduction of the quantity of product due the Government under 
this contract shall not exceed the pro rata amount by which the 
Contractor reduces delivery to its other contractual customers.
    (b) Additional Supplies.
    If, after the event causing the shortage of crude oil and/or refined 
petroleum product as described in (a) above, additional supply becomes 
available to the Contractor, the Contracting Officer may choose any one 
of the following three possible courses of action:
    (1) Accept an updated pro rata reduction as outlined in (a);
    (2) Determine that continuance of the contract with the quantities 
as originally stated in the Schedule is in the best interests of the 
Government; or
    (3) Terminate the contract as permitted in (d) below.
    (c) Reduced Deliveries.
    If the Contractor believes that a law, regulation, or order of a 
foreign government requires the Contractor to deliver less than the 
quantity set forth in the Schedule for any location within that country, 
the Contractor may request allocation in accordance with (a) above. In 
addition to the criteria in (a) above, the Contractor's request shall 
cite--
    (1) The law, regulation or order, furnishing copies of the same;
    (2) The authority under which is imposed; and
    (3) The nature of the Government's waiver, exception, and 
enforcement procedure.
    The Contracting Officer will promptly review the matter and advise 
the Contractor whether or not the need to allocate has been 
substantiated. If the law, regulation, or order requiring the Contractor 
to reduce deliveries ceases to be effective, the Contractor shall resume 
deliveries in accordance with the original Schedule.
    (d) If, as a result of reduced deliveries permitted by (a), (b), or 
(c) above, the Contracting Officer decides that continuation of this 
contract is no longer in the best interests of the Government, the 
Government may terminate this contract or any quantity thereunder, by 
written notice, at no cost to the Government. However, the Government 
shall not be relieved of its obligation to pay for supplies actually 
delivered to and accepted by it.
    (e) Except as otherwise stated in (b) above, any volumes omitted 
pursuant to (a) or (b) above shall be deleted from this contract, and 
the Contractor shall have no continuing obligation, so far as this 
contract is concerned, to make up such omitted supplies.
    (f) For Posts, Camps, and Stations contracts, Department of Energy 
priority orders and allocation regulations will take precedence over any 
conflicting provisions of this clause.
    (g) For Bulk Fuels contracts, the provisions contained in (a) and 
(b) above shall be inoperative when the Secretary of Defense makes a 
written determination that it is essential to the National Defense that 
the Defense Fuel Supply Center be provided contract volumes exceeding 
the pro rata amount of product to which it would otherwise be entitled. 
However, in no case will the Contractor be required, under this 
contract, to supply more than 100% of the quantity specified in the 
Schedule.

                             (End of clause)

[60 FR 21992, May 4, 1995]

[[Page 285]]



               CHAPTER 57--AFRICAN DEVELOPMENT FOUNDATION




                          (Parts 5700 to 5799)

  --------------------------------------------------------------------

                   SUBCHAPTER B--ACQUISITION PLANNING
Part                                                                Page
5706            Competition requirements....................         287

[[Page 287]]



                    SUBCHAPTER B_ACQUISITION PLANNING





PART 5706_COMPETITION REQUIREMENTS--Table of Contents




    Authority: 40 U.S.C. 474.



           Subpart 5706.3_Other Than Full and Open Competition



5706.302-70  Impairment of foreign aid programs.

    (a) Full and open competition need not be obtained when it would 
impair or otherwise have an adverse effect on programs conducted for the 
purposes of foreign aid, relief and rehabilitation.
    (b) Application. This authority may be used for:
    (1) An award under section 506(a)(5) of the African Development 
Foundation Act involving a personal service contractor serving abroad;
    (2) An award of $100,000 or less for audit, evaluation or program 
support services to be provided abroad;
    (3) An award for which the President of the Foundation makes a 
formal written determination, with supporting findings, that compliance 
with full and open competition procedures would impair foreign 
assistance objectives, and would be inconsistent with the fulfillment of 
the Foundation program.
    (c) Limitation. (1) Offers shall be requested from as many potential 
offerors as is practicable under the circumstances.
    (2) The contract file must include an appropriate explanation and 
support justifying award without full and open competition, as provided 
in FAR 6.303, except that determinations made under paragraph (b)(3) of 
this section will not be subject to the requirement for contracting 
officer certification or to approvals in accord with FAR 6.304.

[53 FR 5578, Feb. 25, 1988]

[[Page 289]]



  CHAPTER 61--GENERAL SERVICES ADMINISTRATION BOARD OF CONTRACT APPEALS




                          (Parts 6100 to 6199)

  --------------------------------------------------------------------
Part                                                                Page
6101            Rules of procedure of the General Services 
                    Administration Board of Contract Appeals 
                    (standard proceedings)..................         291
 6102           Rules of procedure of the General Services 
                    Administration Board of Contract Appeals 
                    (expedited proceedings).................         320
6103            Rules of procedure for transportation rate 
                    cases...................................         322
6104            Rules of procedure for travel and relocation 
                    expenses cases..........................         324
6105            Rules of procedure for decisions authorized 
                    by 31 U.S.C. 3529.......................         326

[[Page 291]]



PART 6101_RULES OF PROCEDURE OF THE GENERAL SERVICES ADMINISTRATION BOARD 
OF CONTRACT APPEALS (STANDARD PROCEEDINGS)--Table of Contents




Sec.
6101.0 Foreword.
6101.1 Scope of rules; definitions; construction; rulings and orders; 
          panels; situs [Rule 101].
6101.2 Time: enlargement; computation [Rule 102].
6101.3 Service of papers [Rule 103].
6101.4 Appeal file [Rule 104].
6101.5 Filing cases; time limits for filing; docketing [Rule 105].
6101.6 Appearances; notice of appearance [Rule 106].
6101.7 Pleadings in appeals [Rule 107].
6101.8 Motions [Rule 108].
6101.9 Election of hearing or record submission [Rule 109].
6101.10 Conferences; conference memorandum; prehearing order; prehearing 
          and presubmission briefs [Rule 110].
6101.11 Submission on the record without a hearing [Rule 111].
6101.12 Record of Board proceedings [Rule 112].
6101.13-6101.14 [Reserved]
6101.15 General provisions governing discovery [Rule 115].
6101.16 Depositions [Rule 116].
6101.17 Interrogatories to parties; requests for admission; requests for 
          production of documents [Rule 117].
6101.18 Sanctions and other proceedings [Rule 118].
6101.19 Hearings: scheduling; notice; unexcused absences [Rule 119].
6101.20 Subpoenas [Rule 120].
6101.21 Hearing procedures [Rule 121].
6101.22 Admissibility and weight of evidence [Rule 122].
6101.23 Exhibits [Rule 123].
6101.24 Transcripts of proceedings; corrections [Rule 124].
6101.25 Briefs and memoranda of law [Rule 125].
6101.26 Consolidation; separate hearings; separate determination of 
          liability [Rule 126].
6101.27 Stay or suspension of proceedings; dismissals in lieu of stay or 
          suspension [Rule 127].
6101.28 Dismissals [Rule 128].
6101.29 Decisions: format; procedure [Rule 129].
6101.30 Full Board consideration [Rule 130].
6101.31 Clerical mistakes [Rule 131].
6101.32 Reconsideration; amendment of decisions; new hearings [Rule 
          132].
6101.33 Relief from decision or order [Rule 133].
6101.34 Harmless error [Rule 134].
6101.35 Award of costs [Rule 135].
6101.36 Payment of Board awards [Rule 136].
6101.37 Record on review of a Board decision [Rule 137].
6101.38 Office of the Clerk of the Board [Rule 138].
6101.39 Seal of the Board [Rule 139].
6101.40 Forms [Rule 140].

Appendix to Part 6101--Form Nos. 1-5
Form 1--Notice of Appeal, GSA Form 2465.
Form 2--Notice of Appearance.
Form 3--Subpoena, GSA Form 9534.
Form 4--Government Certificate of Finality.
Form 5--Appellant/Applicant Certificate of Finality.

    Authority: 41 U.S.C. 601-613.

    Source: 61 FR 52349, Oct. 7, 1996, unless otherwise noted.



6101.0  Foreword.

    (a) The General Services Administration Board of Contract Appeals 
was established under the Contract Disputes Act of 1978, 41 U.S.C. 601-
613, as an independent tribunal to hear and decide contract disputes 
between government contractors and the General Services Administration 
(GSA) and other executive agencies of the United States.
    (b) As an agency board established under the Contract Disputes Act, 
the Board is required to ``provide to the fullest extent practicable, 
informal, expeditious and inexpensive resolution of disputes.'' 41 
U.S.C. 607(e). The rules in part 6101 represent the Board's concerted 
effort to be responsive to this charge in standard proceedings. In 
further response to this mandate, the Board also uses a variety of 
techniques intended to shorten and simplify, when appropriate, the 
proceedings normally used to resolve contract disputes. These techniques 
are described in part 6102.
    (c) As indicated in part 6102, the Board fully supports the use of 
alternative dispute resolution (ADR) in all appropriate cases. To 
encourage the prompt, expert, and inexpensive resolution of contract 
disputes as promoted by the Federal Acquisition Streamlining Act of 
1994, Public Law 103-355, 108 Stat. 3243, the Board will also make a 
Board Neutral available for an ADR proceeding, as described in 6102.4, 
either before or after the issuance of a decision by a contracting 
officer of any

[[Page 292]]

agency if a joint written request is submitted to the Office of the 
Clerk of the Board by the parties.
    (d) The Board also conducts proceedings as required under other 
laws. In all matters before it, the Board will act in accordance with 
this part and Part 6102 and applicable standards of conduct so that the 
integrity, impartiality, and independence of the Board are preserved.



6101.1  Scope of rules; definitions; construction; rulings and orders; 
panels; situs [Rule 101].

    (a) Scope. The rules contained in this part and Part 6102 govern 
proceedings in all cases filed with the Board on or after October 7, 
1996, and all further proceedings in cases then pending, except to the 
extent that, in the opinion of the Board, their use in a particular case 
pending on the effective date would be infeasible or would work an 
injustice, in which event the former procedure applies. The Board will 
look to the rules in this part and Part 6102 for guidance in conducting 
other proceedings authorized by law.
    (b) Definitions--(1) Appeal; appellant. The term ``appeal'' means a 
contract dispute filed with the Board. The term ``appellant'' means a 
party filing an appeal.
    (2) Application; applicant. The term ``application'' means a 
submission to the Board of a request for award of costs, under the Equal 
Access to Justice Act, 5 U.S.C. 504, pursuant to 6101.35. The term 
``applicant'' means a party filing an application.
    (3) Board judge; judge. The term ``Board judge'' or ``judge'' means 
a member of the Board.
    (4) Case. The term ``case'' means an appeal, petition, or 
application.
    (5) Filing. (i) Any document, other than a notice of appeal or an 
application for award of costs, is filed when it is received by the 
Office of the Clerk of the Board during the Board's working hours. A 
notice of appeal or an application for award of costs is filed upon the 
earlier of:
    (A) Its receipt by the Office of the Clerk of the Board or
    (B) If mailed, the date on which it is mailed. A United States 
Postal Service postmark shall be prima facie evidence that the document 
with which it is associated was mailed on the date thereof.
    (ii) Facsimile transmissions to the Board and the parties are 
permitted. Parties are expected to submit their facsimile machine 
numbers with their filings. The Board's facsimile machine number is: 
(202) 501-0664. The filing of a document by facsimile transmission 
occurs upon receipt by the Board of the entire printed submission. 
Parties are specfically cautioned that deadlines for the filing of cases 
will not be extended merely because the Board's facsimile machine is 
busy or otherwise unavailable at the time on which the filing is due.
    (6) Party. The term ``party'' means an appeallant, applicant, 
petitioner, or respondent.
    (7) Petition; petitioner. The term ``petition'' means a request 
filed under 41 U.S.C. 605(c)(4) that the Board direct a contracting 
officer to issue a written decision on a claim. The term ``petitioner'' 
means a party submitting a petition.
    (8) Respondent. The term ``respondent'' means the Government agency 
whose decision, action, or inaction is the subject of an appeal, 
petition, or appplication.
    (9) Working day. The term ``working day'' means any date other than 
a Saturday, Sunday, or federal holiday.
    (10) Working hours. The Board's working hours are 8:00 a.m. to 4:30 
p.m., Eastern Time, on each working day.
    (c) Construction. The rules in this part and part 6102 shall be 
construed to secure the just, speedy, and inexpensive resolution of 
every case. The Board looks to the Federal Rules of Civil Procedure for 
guidance in construing those Board rules which are similar to Federal 
Rules.
    (d) Rulings, orders, and directions. The Board may apply the rules 
in this part and part 6102 and make such rulings and issue such orders 
and directions as are necessary to secure the just, speedy, and 
inexpensive resolution of every case before the Board. Any ruling, 
order, or direction that the Board may make or issue pursuant to the 
rules in this part and part 6102 may be made on the motion or request of 
any party or on the initiative of the Board.

[[Page 293]]

The Board may also amend, alter, or vacate a ruling, order, or direction 
upon such terms as are just. In making rulings and issuing orders and 
directions pursuant to the rules in this part and part 6102, the Board 
takes into consideration those Federal Rules of Civil Procedure which 
address matters not specifically covered in this part and part 6102.
    (e) Panels. Each case will be assigned to a panel consisting of 
three judges, with one member designated as the panel chairman, in 
accordance with such procedures as may be established by the Board. The 
panel chairman is responsible for processing the case, including 
scheduling and conducting proceedings and hearings. In addition, the 
panel chairman may, without participation by other panel members, decide 
an appeal under the small claims procedure (6102.2), rule on 
nondispositive motions (except for amounts in controversy under 
6102.2(a)(2)), and dismiss a case if no party objects (6101.28(c)). All 
other matters, except for those before the full Board under 6101.30, are 
decided for the Board by a majority of the panel.
    (f) Situs. The address of the Office of the Clerk of the Board is: 
Room 7022, General Services Administration Building, 18th and F Streets, 
NW., Washington, DC 20405. The Clerk's telephone number is: (202) 501-
0116. The Clerk's facsimile machine number is (202) 501-0664.



6101.2  Time: enlargement; computation [Rule 102].

    (a) Time for performing required actions. All time limitations 
prescribed in the rules in this part and part 6102 or in any order or 
direction given by the Board are maximums, and the action required 
should be accomplished in less time whenever possible.
    (b) Enlarging time. Upon request of a party for good cause shown, 
the Board may enlarge any time prescribed by the rules in this part and 
part 6102 or by an order or direction of the Board. The exception is the 
time limit for filing appeals (6101.5(b)(1)). A written request is 
required, but in exigent circumstances an oral request may be made and 
followed by a written request. An enlargement of time may be granted 
even through the request was filed after the time for taking the 
required action expired, but the party requesting the enlargement must 
show good cause for its inability to make the request before that time 
expired.
    (c) Computing time. Except as otherwise required by law, in 
computing a period of time prescribed by the rules in this part and part 
6102 or by order of the Board, the day from which the designated period 
of time begins to run shall not counted, but the last day of the period 
shall be counted unless that day is (1) a Saturday, a Sunday, or a 
federal holiday, or (2) a day on which the Office of the Clerk of the 
Board is required to close earlier than 4:30 p.m., or does not open at 
all, as in the case of inclement weather, in which event the period 
shall include the next working day. Except as otherwise provided in this 
paragraph, when the period of time prescribed or allowed is less than 11 
days, any intervening Saturday, Sunday, or federal holiday shall not be 
counted. When the period of time prescribed or allowed is 11 days or 
more, intervening Saturdays, Sundays, and federal holidays shall be 
counted. Time for filing any document or copy thereof with the Board 
expires when the Office of the Clerk of the Board closes on the last day 
on which such filing may be made.



6101.3  Service of papers [Rule 103].

    (a) On whom and when service must be made. When a party sends a 
document to the Board it must at the same time send a copy to the other 
party by mail or some other equally or more expeditious means of 
transmittal. Subpoenas (6101.20) and documents filed in camera 
(6101.12(h)) are exceptions to this requirement. Any papers required to 
be served on a party (except requests for discovery and responses 
thereto, unless ordered by the Board to be filed) shall be filed with 
the Board before service or within a reasonable time thereafter.
    (b) Proof of service. Except when service is not required, a party 
sending a document to the Board must indicate to the Board that a copy 
has also been sent to the other party. This may be done by certificate 
of service, by the notation of a photostatic copy (cc:), or

[[Page 294]]

by any other means that can reasonably be expected to indicate to the 
Board that the other party has been provided a copy.
    (c) Failure to make service. If a document sent to the Board by a 
party does not indicate that a copy has been served on the other party, 
the Board may return the document to the party that submitted it with 
such directions as it considers appropriate, or the Board may inquire 
whether a party has received a copy and note on the record the fact of 
inquiry and the response, and may also direct the party that submitted 
the document to serve a copy on the other party. In the absence of proof 
of service a document may be treated by the Board as not properly filed.



6101.4  Appeal file [Rule 104].

    (a) Submission to the Board by the contracting officer. (1) Within 
30 calendar days from receipt of notice that an appeal has been filed, 
or within such time as the Board may allow, the contracting officer 
shall file with the Board appeal file exhibits consisting of all 
documents and other tangible things relevant to the claim and to the 
contracting officer's decision which has been appealed, including:
    (i) The contracting officer's decision, if any, from which the 
appeal is taken;
    (ii) The contract, if any, including amendments, specifications, 
plans, and drawings;
    (iii) All correspondence between the parties that is relevant to the 
appeal, including the written claim or claims that are the subject of 
the appeal, and evidence of their certification, if any;
    (iv) Affidavits or statements of any witnesses on the matter in 
dispute and transcripts of any testimony taken before the filing of the 
notice of appeal;
    (v) All documents and other tangible things on which the contracting 
officer relied in making the decision, and any correspondence relating 
thereto;
    (vi) The abstract of bids, if relevant; and
    (vii) Any additional existing evidence or information deemed 
necessary to determine the merits of the appeal.
    (2) The contracting officer shall serve a copy of the appeal file on 
the appellant at the same time that the contracting officer files it 
with the Board, except that
    (i) The contracting officer need not serve on the appellant those 
documents furnished the Board in camera pursuant to 6101.12(h), and
    (ii) The contracting officer shall serve documents submitted under 
protective order only on those individuals who have been granted access 
to such documents by the Board. However, the contracting officer must 
serve on the appellant a list identifying the specific documents filed 
in camera or under protective order with the Board, giving sufficient 
details necessary for their recognition. This list must also be filed 
with the Board as an exhibit to the appeal file.
    (b) Submission to the Board by the appellant. Within 30 calendar 
days after filing of the respondent's appeal file exhibits, or within 
such time as the Board may allow, the appellant shall file with the 
Board for inclusion in the appeal file documents or other tangible 
things relevant to the appeal that have not been submitted by the 
contracting officer. The appellant shall serve a copy of its additional 
exhibits upon the respondent at the same time as it files them with the 
Board.
    (c) Submissions on order of the Board. The Board may, at any time 
during the pendency of the appeal, require any party to file other 
documents and tangible things as additional exhibits.
    (d) Organization of the appeal file. Appeal file exhibits may be 
originals or true, legible, and complete copies. They shall be arranged 
in chronological order within each submission, earliest documents first; 
bound in a loose-leaf binder on the left margin except where size or 
shape makes such binding impracticable; numbered; tabbed; and indexed. 
The numbering shall be consecutive, in whole arabic numerals (no 
letters, decimals, or fractions), and continuous from one submission to 
the next, so that the complete file, after all submissions, will consist 
of one set of consecutively numbered exhibits. In addition, the pages 
within each exhibit shall be numbered consecutively unless the exhibit 
already is paginated in a logical manner. Consecutive pagination of the 
entire file is not required. The index

[[Page 295]]

should include the date and a brief description of each exhibit and 
shall indicate which exhibits, if any, have been filed with the Board in 
camera or under protective order or otherwise have not been served on 
every other party.
    (e) Lengthy or bulky materials. The Board may waive the requirement 
to furnish other parties copies or duplicates of bulky, lengthy, or 
outsized materials submitted to the Board as exhibits.
    (f) Use of appeal file as evidence. All exhibits in the appeal file, 
except for those as to which an objection has been sustained, are part 
of the record upon which the Board will render its decision. Unless 
otherwise ordered by the Board, objection to any exhibit may be made at 
any time before the first witness is sworn or, if the appeal is 
submitted on the record pursuant to 6101.11, at any time prior to or 
concurrent with the first record submission. The Board may enlarge the 
time for such objections and will consider an objection made during a 
hearing if the ground for objection could not reasonably have been 
earlier known to the objecting party. If an objection is sustained, the 
Board will so note in the record.
    (g) When appeal file not required. Upon motion of a party, the Board 
may postpone or dispense with the submission of any or all appeal file 
exhibits.



6101.5  Filing cases; time limits for filing; docketing [Rule 105].

    (a) Filing cases. Filing of a case occurs as provided in 
6101.1(b)(5).
    (1) Notice of appeal. (i) A notice of appeal shall be in writing and 
should be signed by the appellant or by the appellant's attorney or 
authorized representative. If the appeal is from a contracting officer's 
decision, the notice of appeal should describe the decision in enough 
detail to enable the Board to differentiate that decision from any 
other; the appellant can satisfy this requirement by attaching to the 
notice of appeal a copy of the contracting officer's decision. If an 
appeal is taken from the failure of a contracting officer to issue a 
decision, the notice of appeal should describe in detail the claim that 
the contracting officer has failed to decide; the appellant can satisfy 
this requirement by attaching a copy of the written claim submission to 
the notice of appeal.
    (ii) A written notice in any form, including the one specified in 
the appendix to this part and part 6102, is sufficient to initiate an 
appeal. The notice of appeal should include the following information:
    (A) The number and date of the contract;
    (B) The name of the agency and the component thereof against which 
the claim has been asserted;
    (C) The name of the contracting officer whose decision or failure to 
decide is appealed and the date of the decision, if any;
    (D) A brief account of the circumstances giving rise to the appeal; 
and
    (E) An estimate of the amount of money in controversy, if any and if 
known.
    (iii) The appellant must send a copy of the notice of appeal to the 
contracting officer whose decision is appealed or, if there has been no 
decision, to the contracting officer before whom the appellant's claim 
is pending.
    (2) Petition. (i) A petition shall be in writing and signed by the 
petitioner or by the petitioner's attorney or authorized representative. 
The petition should describe in detail the claim that the contracting 
officer has failed to decide; the contractor can satisfy this 
requirement by attaching to the petition a copy of the written claim 
submission.
    (ii) The petition should include the following information:
    (A) The number and date of the contract;
    (B) The name of the agency and the component thereof against which 
the claim has been asserted; and
    (C) The name of the contracting officer whose decision is sought.
    (3) Application. An application for costs shall meet all 
requirements specified in 6101.35(c).
    (4) Other participation. The Board may, on motion, in its 
discretion, permit an entity to participate in a case in a special or 
limited way, such as by filing an amicus curiae brief.
    (b) Time limits for filing--(1) Appeals. (i) An appeal from a 
decision of a contracting officer shall be filed no later

[[Page 296]]

than 90 calendar days after the date the appellant receives that 
decision.
    (ii) An appeal may be filed with the Board should the contracting 
officer fail or refuse to issue a timely decision on a claim submitted 
in writing, properly certified if required.
    (2) Applications. An application for costs shall be filed within 30 
calendar days of a final disposition in the under-lying appeal, as 
provided in 6101.35(b).
    (c) Notice of docketing. Notices of appeal, petitions, and 
applications will be docketed by the Office of the Clerk of the Board, 
and a written notice of docketing will be sent promptly to all parties.



6101.6  Appearances; notice of appearance [Rule 106].

    (a) Appearances before the Board--(1) Appellant; petitioner; 
applicant. Any appellant, petitioner, or applicant may appear before the 
Board by an attorney-at-law licensed to practice in a state, 
commonwealth, or territory of the United States, or in the District of 
Columbia. An individual appellant, petitioner, or applicant may appear 
in his own behalf; a corporation, trust, or association may appear by 
one of its officers or by any other authorized employee; and a 
partnership may appear by one of its members or by any other authorized 
employee.
    (2) Respondent. The respondent may appear before the Board by an 
attorney-at-law licensed to practice in a state, commonwealth, or 
territory of the United States, or in the District of Columbia. 
Alternatively, if not prohibited by agency regulation or otherwise, the 
respondent may appear by the contracting officer or by the contracting 
officer's authorized representative.
    (b) Notice of appearance. Unless a notice of appearance is filed by 
some other person, the person signing the notice of appeal, petition, or 
application shall be deemed to have appeared on behalf of the appellant, 
petitioner, or applicant, and the head of the respondent agency's 
litigation office shall be deemed to have appeared on behalf of the 
respondent. A notice of appearance in the form specified in the appendix 
to this part and Part 6102 is sufficient. Attorneys representing parties 
before the Board are required to list the state bars to which they are 
admitted and their state bar numbers or other bar identifiers.
    (c) Withdrawal of appearance. Any person who has filed a notice of 
appearance and who wishes to withdraw from a case must file a motion 
which includes the name, address, telephone number, and facsimile 
machine number of the person who will assume responsibility for 
representation of the party in question. The motion shall state the 
grounds for withdrawal unless it is accompanied by a representation from 
the successor representative or existing co-counsel that the established 
case schedule will be met.



6101.7  Pleadings in appeals [Rule 107].

    (a) Pleadings required and permitted. Except as the Board may 
otherwise order, the Board requires the submission of a complaint and an 
answer. In appropriate circumstances, the Board may order or permit a 
reply to an answer.
    (b) Complaint. No later than 30 calendar days after the docketing of 
the appeal, the appellant shall file with the Board a complaint setting 
forth its claim or claims in simple, concise, and direct terms. The 
complaint should set forth the factual basis of the claim or claims, 
with appropriate reference to the contract provisions, and should state 
the amount in controversy, or an estimate thereof, if any and if known. 
No particular form is prescribed for a complaint, and the Board may 
designate the notice of appeal, a claim submission, or any other 
document as the complaint, either on its own initiative or on request of 
the appellant, if such document sufficiently states the factual basis 
and amount of the claim.
    (c) Answer. No later than 30 calendar days after the filing of the 
complaint or of the Board's designation of a complaint, the respondent 
shall file with the Board an answer setting forth simple, concise, and 
direct statements of its defenses to the claim or claims asserted in the 
complaint, as well as any affirmative defenses it chooses to assert. A 
dispositive motion or a motion for a more definite statement may be 
filed in lieu of the answer only with the permission of the Board. If no 
answer is timely filed, the board may enter a

[[Page 297]]

general denial, in which case the respondent may thereafter amend the 
answer to assert affirmative defenses only by leave of the Board and as 
otherwise prescribed by paragraph (f) of this section. The Board will 
inform the parties when it enters a general denial on behalf of the 
respondent.
    (d) Reply to an answer. If the Board orders or permits a reply to an 
answer, it shall be filed as directed by the Board.
    (e) Modifications to requirement for pleadings. If the appellant has 
elected the small claims procedure provided by 6102.2 or the accelerated 
procedure provided by 6102.3, the submission of pleadings shall be 
governed by the applicable section.
    (f) Amendment of pleadings. Each party to an appeal may amend its 
pleadings once without leave of the Board at any time before a 
responsive pleading is filed; if the pleading is one to which no 
responsive pleading is permitted, such amendment may be made at any time 
within 20 calendar days after it is served or, in small claims 
proceedings under 6102.2, within 10 working days after it is served. The 
Board may permit the parties to amend pleadings further on conditions 
fair to both parties. If a response to the unamended pleading was 
required by the rules in this part or by an order of the Board, a 
response to the amended pleading shall be filed no later than 30 
calendar days after the filing of the amended pleading or, in small 
claims proceedings, no later than 15 calendar days after the filing of 
the amended pleading. 6101.12(e) concerns amendments to pleadings to 
conform to the evidence.



6101.8  Motions [Rule 108].

    (a) How motions are made. Motions may be oral or written. A written 
motion shall indicate the relief sought and, either in the text of the 
motion or in an accompanying legal memorandum, the grounds therefor. In 
addition, a motion for summary relief shall comply with the requirements 
of paragraph (g) of this section. 6101.25 prescribes the form and 
content of legal memoranda. Oral motions shall be made on the record and 
in the presence of the other party.
    (b) When motions may be made. A motion filed in lieu of an answer 
pursuant to 6101.7(c) shall be filed no later than the date on which the 
answer is required to be filed or such later date as may be established 
by the Board. Any other dispositive motion shall be made as soon as 
practicable after the grounds therefor are known. Any other motion shall 
be made promptly or as required by this part.
    (c) Dispositive motions. The following dispositive motions may 
properly be made before the Board:
    (1) Motions to dismiss for lack of jurisdiction or for failure to 
state a claim upon which relief can be granted;
    (2) Motions to dismiss for failure to prosecute;
    (3) Motions for summary relief (analogous to summary judgment); and
    (4) Any other motion to dismiss.
    (d) Other motions. Other motions may be made in good faith and in 
proper form.
    (e) Jurisdictional questions. The Board may at any time consider the 
issue of its jurisdiction to decide a case. When all facts touching upon 
the Board's jurisdiction are not to record, or in other appropriate 
circumstances, a decision on a jurisdictional question may be deferred 
pending a hearing on the merits or the filing of record submissions.
    (f) Procedure. Unless otherwise directed by the Board, a party may 
respond to a written motion other than a motion pursuant to 6101.30, 
6101.31, 6101.32, or 6101.33 at any time within 20 calendar days after 
the filing of the motion. Responses to motions pursuant to 6101.30, 
6101.31, 6101.32, or 6101.33 may be made only as permitted or directed 
by the Board. The Board may permit hearing or oral argument on written 
motions and may require additional submissions from any of the parties.
    (g) Motions for summary relief. (1) A motion for summary relief 
should be filed only when a party believes that, based upon uncontested 
material facts, it is entitled to relief in whole or in part as a matter 
of law. A motion for summary relief should be filed as soon as feasible, 
to allow the Board to rule on the motion in advance of a scheduled 
hearing date.
    (2) With each motion for summary relief, there shall be served and 
filed a

[[Page 298]]

separate document titled Statement of Uncontested Facts, which shall 
contain in separately numbered paragraphs all of the material facts upon 
which the moving party bases its motion and as to which it contends 
there is no genuine issue. This statement shall include references to 
the supporting affidavits or declarations and documents, if any, and to 
the 6101.4 appeal file exhibits relied upon to support such statement.
    (3) An opposing party shall file with its opposition (or cross-
motion) a separate document titled Statement of Genuine Issues. This 
document shall identify, by reference to specific paragraph numbers in 
the moving party's Statement of Uncontested Facts, those facts as to 
which the opposing party claims there is a genuine issue necessary to be 
litigated. An opposing party shall state the precise nature of its 
disagreement and give its version of the facts. This statement shall 
include references to the supporting affidavits or declarations and 
documents, if any, and to the 6101.4 appeal file exhibits that 
demonstrate the existence of a genuine dispute. An opposing party may 
also file a Statement of Uncontested Facts as to any relevant matters 
not covered by the moving party's statement.
    (4) When a motion for summary relief is made and supported as 
provided in this section, an opposing party may not rest upon the mere 
allegations or denials of its pleadings, but the opposing party's 
response, by affidavits or as otherwise provided by this section, must 
set forth specific facts showing that there is a genuine issue of 
material fact. If the opposing party does not so respond, summary 
relief, if appropriate, shall be entered against that party. For good 
cause shown, if an opposing party cannot present facts essential to 
justify its opposition, the Board may defer ruling on the motion to 
permit affidavits to be obtained or depositions to be taken or other 
discovery to be conducted, or may made such other order as is just.
    (h) Effect of pending motion. Except as this part and part 6102 
provide or the Board may order, a pending motion shall not excuse the 
parties from proceeding with the case in accordance with this part and 
part 6102 and the orders and directions of the Board.



6101.9   Election of hearing or record submission [Rule 109].

    Each party shall inform the Board, in writing, whether it elects a 
hearing or submission of its case on the record pursuant to 6101.11. 
Such an election may be filed at any time unless a time for filing is 
prescribed by the Board. A party electing to submit its case on the 
record pursuant to 6101.11 may also elect to appear at a hearing solely 
to cross-examine any witness presented by the opposing party, provided 
that the Board is informed of that party's intention within 10 working 
days of its receipt of notice of the election of hearing by the other 
party. If a hearing is elected, the election should state where and when 
the electing party desires the hearing to be held and should explain the 
reasons for its choices. A hearing will be held if either party elects 
one. If a party's decision whether to elect a hearing is dependent upon 
the intentions of the other party, it shall consult with the other party 
before filing its election. If there is to be a hearing, it will be held 
at a time and place prescribed by the Board after consultation with the 
party or parties electing the hearing. The record submissions from a 
party that has elected to submit its case on the record shall be due as 
provided in 6101.11.



6101.10   Conferences; conference memorandum; prehearing order; prehearing 
and presubmission briefs [Rule 110].

    (a) Conferences. The Board may convene the parties in conference, 
either by telephone or in person, for any purpose. The conference may be 
stenographically or electronically recorded, at the discretion of the 
Board. Matters to be considered and actions to be taken at a conference 
may include:
    (1) Simplifying, clarifying, or severing the issues;
    (2) Stipulations, admissions, agreements, and rulings to govern the 
admissibility of evidence, understandings on matters already of record, 
or other similar means of avoiding unnecessary proof;

[[Page 299]]

    (3) Plans, schedules, and rulings to facilitate discovery;
    (4) Limiting the number of witnesses and other means of avoiding 
cumulative evidence;
    (5) Stipulations or agreements disposing of matters in dispute; or
    (6) Ways to expedite disposition of the case or to facilitate 
settlement of the dispute, including, if the parties and the Board 
agree, the use of alternative dispute resolution techniques, as provided 
in 6102.1 and 6102.4.
    (b) Conference memorandum. The Board may prepare a memorandum of the 
results of a conference or issue an order reflecting any actions taken, 
or both. A memorandum or order so issued shall be placed in the record 
of the case and sent to each party. Each party shall have 5 working days 
after receipt of a memorandum to object to the substance of it.
    (c) Prehearing order. The Board may issue a prehearing or 
presubmission order to govern the proceedings in a case.
    (d) Prehearing or presubmission briefs. A party may, by leave of the 
Board, file a prehearing or presubmission brief at any time before the 
hearing or upon or before the date on which first record submissions are 
due.



6101.11  Submission on the record without a hearing [Rule 111].

    (a) Submission on the record. (1) A party may elect to submit its 
case on the record without a hearing. A party submitting its case on the 
record may include in its written record submission or submissions:
    (i) Any relevant documents or other tangible things it wishes the 
Board to admit into evidence;
    (ii) Affidavits, depositions, and other discovery materials that set 
forth relevant evidence; and
    (iii) A brief or memorandum of law.
    (2) The Board may require the submission of additional evidence or 
briefs and may order oral argument in a case submitted on the record.
    (b) Time for submission. (1) If both parties have elected to submit 
the case on the record, the Board will issue an order prescribing the 
time for initial and, if appropriate, reply record submissions.
    (2) If one party has elected a hearing and the other party has 
elected to submit its case on the record, the party submitting on the 
record shall make its initial submission no later than the commencement 
of the hearing or at an earlier date if the Board so orders, and a 
further submission in the form of a brief at the time for submission of 
posthearing briefs.
    (c) Objections to evidence. Unless otherwise directed by the Board, 
objections to evidence (other than the appeal file and supplements 
thereto) in a record submission may be made within 10 working days after 
the filing of the submission. Replies to such objections, if any, may be 
made within 10 working days after the filing of the objection. The Board 
may rule on such objections in its opinion deciding the merits or 
otherwise disposing of the case.



6101.12  Record of Board proceedings [Rule 112].

    (a) Composition of the record for decision. (1) The record upon 
which any decision of the Board will be rendered consists of:
    (i) The notice of appeal, petition, or application;
    (ii) Appeal file exhibits other than those as to which objection has 
been sustained;
    (iii) Hearing exhibits other than those as to which an objection has 
been sustained;
    (iv) Pleadings;
    (v) Motions and responses thereto;
    (vi) Memoranda, orders, rulings, and directions to the parties 
issued by the Board;
    (vii) Documents and other tangible things admitted in evidence by 
the Board;
    (viii) Written transcripts or electronic recordings of proceedings;
    (ix) Stipulations and admissions by the parties;
    (x) Depositions, or parts thereof, received in evidence;
    (xi) Written interrogatories and responses received in evidence;
    (xii) Briefs and memoranda of law; and
    (xiii) Anything else that the Board may designate.
    (2) All other papers and documents in a case are part of the 
administrative

[[Page 300]]

record of the proceedings. The administrative record shall include file 
and hearing exhibits offered but not received in evidence in a case; it 
may also include correspondence with and between the parties, and 
depositions, interrogatories, offers of proof contained in the 
transcript, and other documents that are not part of the record for 
decision.
    (b) Time for entry into the record. Except as the Board may 
otherwise order, nothing other than posthearing briefs will be received 
into the record after a hearing is completed. In cases submitted on the 
record without a hearing, nothing will be received into the record after 
the time for filing of the last record submission. Briefs will be due as 
provided in 6101.25(b).
    (c) Closing of the record. Except as the Board may otherwise order, 
no proof shall be received in evidence after a hearing is completed or, 
in cases submitted on the record without a hearing, after notice by the 
Board to the parties that the record is closed and that the case is 
ready for decision.
    (d) Notice that the case is ready for decision. The Board will give 
written notice to the parties when the record is closed and the case is 
ready for decision.
    (e) Amendments to conform to the evidence. When issues within the 
proper scope of a case, but not raised in the pleadings, have been 
raised without objection or with permission of the Board at a hearing 
(see 6101.21(h)) or in record submissions, they shall be treated in all 
respects as if they had been raised in the pleadings. The Board may 
formally amend the pleadings to conform to the proof or may order that 
the record be deemed to contain pleadings so amended.
    (f) Enlargement of the record. The Board may at any time require or 
permit enlargement of the record with additional evidence and briefs. It 
may reopen the record to receive additional evidence and oral argument 
at a hearing.
    (g) Inspection of the record of proceedings; release of any paper, 
document, or tangible thing prohibited. Except for any part thereof that 
is subject to a protective order or deemed an in camera submission, the 
record of proceedings in a case shall be made available for inspection 
by any person. Such record shall be made available at the Office of the 
Clerk of the Board during the Board's normal working hours, as soon as 
practicable given the demands on the Board of processing the subject 
case and other cases. Except as provided in 6101.23(c) and 6101.37(d), 
no paper, document, or tangible thing which is part of the record of 
proceedings in a case may be released from the offices of the Board. 
Copies may be obtained by any person as provided in 6101.38(d). If such 
inspection or copying involves more than minimal costs to the Board, 
reimbursement will be required.
    (h) Protected and in camera submissions. (1) A party may by motion 
request that the Board receive and hold materials under conditions that 
would limit access to them on the ground that such documents are 
privileged or confidential, or sensitive in some other way. The moving 
party must state the grounds for such limited access. The board may also 
determine on its own initiative to hold materials under such conditions. 
The manner in which such materials will be held, the persons who shall 
have access to them, and the conditions (if any) under which such access 
will be allowed will be specified in an order of the Board. If the 
materials are held under such an order, they will be part of the record 
of the case. If the Board denies the motion, the materials may be 
returned to the party that submitted them. If the moving party asks, 
however, that the materials be placed in the administrative record, in 
camera, for the purpose of possible later review of the Board's denial, 
the Board will comply with the request.
    (2) A party may also ask, or the Board may direct, that testimony be 
received under protective order or in camera. The procedures under 
paragraph (h)(1) of this section shall be followed with respect to such 
request or direction.

[[Page 301]]



6101.13-6101.14  [Reserved]



6101.15  General provisions governing discovery [Rule 115].

    (a) Discovery methods. The parties may obtain discovery by one or 
more of the following methods:
    (1) Depositions upon oral examination or written questions;
    (2) Written interrogatories;
    (3) Requests for production of documents or other tangible things; 
and
    (4) Requests for admission.
    (b) Scope of discovery. Except as otherwise limited by order of the 
Board in accordance with this part and part 6102, the parties may obtain 
discovery regarding any matter, not privileged, which is relevant to the 
subject matter involved in the pending case, whether it relates to the 
claim or defense of a party, including the existence, description, 
nature, custody, condition, and location of any books, documents, or 
other tangible things, and the identity and location of persons having 
knowledge of any discoverable matter. It is not a ground for objection 
that the information sought will be inadmissible if the information 
sought appears reasonably calculated to lead to the discovery of 
admissible evidence.
    (c) Discovery limits. The Board may limit the frequency or extent of 
use of the discovery methods set forth in this section if it determines 
that:
    (1) The discovery sought is unreasonably cumulative or duplicative, 
or is obtainable from some other source that is more convenient, less 
burdensome, or less expensive;
    (2) The party seeking discovery has had ample opportunity by 
discovery in the case to obtain the information sought; or
    (3) The discovery is unduly burdensome and expensive, taking into 
account the needs of the case, the amount in controversy, limitations on 
the parties' resources, and the importance of the issues at stake.
    (d) Conduct of discovery. Parties may engage in discovery only to 
the extent the Board enters an order which either incorporates an agreed 
plan and schedule acceptable to the Board or otherwise permits such 
discovery as the moving party can demonstrate is required for the 
expeditious, fair, and reasonable resolution of the case.
    (e) Discovery conference. Upon request of a party or on its own 
initiative, the Board may at any time hold an informal meeting or 
telephone conference with the parties to identify the issues for 
discovery purposes; establish a plan and schedule for discovery; set 
limitations on discovery, if any; and determine such other matters as 
are necessary for the proper management of discovery. The Board may 
include in the conference such other matters as it deems appropriate in 
accordance with 6101.10.
    (f) Discovery objections. (1) In connection with any discovery 
procedure, the Board, on motion or on its own initiative, may make any 
order which justice requires to protect a party or person from 
annoyance, embarrassment, oppression, or undue burden or expense, 
including, but not limited to, one or more of the following:
    (i) That the discovery not be had;
    (ii) That the discovery be had only on specified terms and 
conditions, including a designation of the time and place, or that the 
scope of discovery be limited to certain matters;
    (iii) That the discovery be conducted with no one present except 
persons designated by the Board; and
    (iv) That confidential information not be disclosed or that it be 
disclosed only in a designated way.
    (2) Unless otherwise ordered by the Board, any objection to a 
discovery request must be filed within 15 calendar days after receipt. A 
party shall fully respond to any discovery request to which it does not 
file a timely objection. The parties are required to make a good faith 
effort to resolve objections to discovery requests informally.
    (3) A party receiving an objection to a discovery request, or a 
party which believes that another party's response to a discovery 
request is incomplete or entirely absent, may file a motion to compel a 
response, but such a motion must include a representation that the 
moving party has tried in good faith, prior to filing the motion, to 
resolve the matter informally. The motion to compel shall include a copy 
of each discovery request at issue and the response, if any.

[[Page 302]]

    (g) Failure to make or cooperate in discovery; sanctions. If a party 
fails
    (i) To appear for a deposition, after being served with a proper 
notice;
    (ii) To serve answers or objections to interrogatories submitted 
under 6101.17, after proper service of interrogatories; or
    (iii) To serve a written response to a request for inspection, 
production, and copying of any documents and things under 6101.17, the 
party seeking discovery may move the Board to impose appropriate 
sanctions under 6101.18.
    (h) Subpoenas. A party may request the issuance of a subpoena in aid 
of discovery under the provision of 6101.20.



6101.16  Depositions [Rule 116].

    (a) When depositions may be taken. Upon request of a party, the 
Board may order the taking of testimony of any person by deposition upon 
oral examination or written questions before an officer authorized to 
administer oaths at the place of examination. Attendance of witnesses 
may be compelled by subpoena as provided in 6101.20, and the Board may 
upon motion order that the testimony at a deposition be recorded by 
other than stenographic means, in which event the order may designate 
the manner of recording, preserving, and filing the deposition and may 
include other provisions to ensure that the recorded testimony will be 
accurate and trustworthy. If the order is made, a party may, 
nevertheless, arrange to have a stenographic transcription made at its 
own expense.
    (b) Depositions: time; place; manner of taking. The time, place, and 
manner of taking depositions, including the taking of depositions by 
telephone, shall be as agreed upon by the parties or, failing such 
agreement, as ordered by the Board. A deposition taken by telephone is 
taken at the place where the deponent is to answer questions.
    (c) Use of depositions. At a hearing on the merits or upon a motion 
or interlocutory proceeding, any part or all of a deposition, so far as 
admissible and as though the witness were then present and testifying, 
may be used against a party who was present or represented at the taking 
of the deposition or who had reasonable notice thereof, in accordance 
with any of the following provisions:
    (1) Any deposition may be used by a party for the purpose of 
contradicting or impeaching the testimony of the deponent as a witness.
    (2) The deposition of a party or of anyone who at the time of taking 
the deposition was an officer, director, or managing agent, or a person 
designated to testify on behalf of a public or private corporation, 
partnership or association, or governmental agency which is a party may 
be used by an adverse party for any purpose.
    (3) The deposition of a witness, whether or not a party, may be used 
by a party for any purpose in its own behalf if the Board finds that:
    (i) The witness is dead;
    (ii) The attendance of the witness at the place of hearing cannot be 
reasonably obtained, unless it appears that the absence of the witness 
was procured by the party offering the deposition;
    (iii) The witness is unable to attend or testify because of illness, 
infirmity, age, or imprisonment;
    (iv) The party offering the deposition has been unable to procure 
the attendance of the witness by subpoena; or
    (v) Upon request and notice, exceptional circumstances exist which 
make it desirable in the interest of justice and with due regard to the 
importance of presenting the testimony of witnesses orally in open 
hearing, to allow the deposition to be used.
    (4) If only part of a deposition is offered in evidence by a party, 
an adverse party may require the offering party to introduce any other 
part which in fairness ought to be considered with the part introduced.
    (d) Depositions pending appeal from a decision of the Board. (1) If 
an appeal has been taken from a decision of the Board, or before the 
taking of an appeal if the time therefor has not expired, the Board may 
allow the taking of depositions of witnesses to perpetuate their 
testimony for use in the event of further proceedings before the Board. 
In such case, the party that desires to perpetuate testimony may make a 
motion before the Board for leave to take the depositions as if the

[[Page 303]]

action were pending before the Board. The motion shall show:
    (i) The names and addresses of the persons to be examined and the 
substance of the testimony which the moving party expects to elicit from 
each; and
    (ii) The reasons for perpetuating the testimony of the persons 
named.
    (2) If the Board finds that the perpetuation of testimony is proper 
to avoid a failure or a delay of justice, it may order the depositions 
to be taken and may make orders of the character provided for in 6101.15 
and in this section. Thereupon, the depositions may be taken and used as 
prescribed in this part for depositions taken in actions pending before 
the Board. Upon request and for good cause shown, a judge may issue or 
obtain a subpoena, in accordance with 6101.20, for the purpose of 
perpetuating testimony by deposition during the pendency of an appeal 
from a Board decision.



6101.17  Interrogatories to parties; requests for admission; requests for 
production of documents [Rule 117].

    Upon order from the Board permitting such discovery, a party may 
serve on another party written interrogatories, requests for admission, 
and requests for production of documents.
    (a) Written interrogatories. Written interrogatories shall be 
answered separately in writing, signed under oath or accompanied by a 
declaration under penalty of perjury, and answered within 30 calender 
days after service. Objections shall be filed within the time limits set 
forth in 6101.15(f)(2). An interrogatory otherwise proper is not 
necessarily objectionable merely because an answer to the interrogatory 
may involve an opinion or contention that relates to fact or the 
application of law to fact, but the Board may order that such an 
interrogatory need not be answered until after designated discovery has 
been completed or until a conference has been held, or some other event 
has occurred.
    (b) Option to produce business records. Where the answer to an 
interrogatory may be derived or ascertained from the business records of 
the party upon which the interrogatory has been served, or from an 
examination, audit, or inspection of such business records, including a 
compilation, abstract, or summary thereof, and the burden of deriving or 
ascertaining the answer is substantially the same for the party serving 
the interrogatory as for the party served, it is a sufficient answer to 
such interrogatory to specify the records from which the answer may be 
derived or ascertained and to afford to the party serving the 
interrogatory reasonable opportunity to examine, audit, or inspect such 
records and to make copies, compilations, abstracts, or summaries 
thereof. Such specification shall be in sufficient detail to permit the 
interrogating party to locate and to identify, as readily as can the 
party served, the records from which the answer may be ascertained.
    (c) Written requests for admission. A written request for the 
admission of the truth of any matter, within the proper scope of 
discovery, that relates to statements or opinions of fact or of the 
application of law to fact, including the genuineness of any documents, 
is to be answered in writing and signed within 30 calendar days after 
service. Objections shall be filed within the time limits set forth in 
6101.15(f)(2). Otherwise, the matter therein may be deemed to be 
admitted. Any matter admitted is conclusively established for the 
purpose of the pending action, unless the Board on motion permits 
withdrawal or amendment of the admission. Any admission made by a party 
under this paragraph is for the purpose of the pending action only and 
is not an admission for any other purpose, nor may it be used against 
the party in any other proceeding.
    (d) Written requests for production of documents. A written request 
for the production, inspection, and copying of any documents and things 
shall be answered within 30 calendar days after service. Objections 
shall be filed within the time limits set forth in 6101.15(f)(2).
    (e) Change in time for response. Upon request of a party, or on its 
own initiative, the Board may prescribe a period of time other than that 
specified in this section.
    (f) Responses. A party that has responded to written 
interrogatories, requests for admission, or requests for

[[Page 304]]

production of documents, upon becoming aware of deficiencies or 
inaccuracies in its original responses, or upon acquiring additional 
information or additional documents relevant thereto, shall, as quickly 
as practicable, and as often as necessary, supplement its responses to 
the requesting party with correct and sufficient additional information 
and such additional documents as are necessary to give a complete and 
accurate response to the request.



6101.18  Sanctions and other proceedings [Rule 118].

    (a) Standards. All parties and their representatives, attorneys, and 
any expert/consultant retained by them or their attorneys, must obey 
directions and orders prescribed by the Board and adhere to standards of 
conduct applicable to such parties and persons. As to an attorney, the 
standards include the rules of professional conduct and ethics of the 
jurisdictions in which an attorney is licensed to practice, to the 
extent that those rules are relevant to conduct affecting the integrity 
of the Board, its process, and its proceedings. The Board will also look 
to voluntary professional guidelines in evaluating an individual's 
conduct.
    (b) Sanctions. When a party or its representative or attorney or any 
expert/consultant fails to comply with any direction or order issued by 
the Board (including an order to provide or permit discovery), or 
engages in misconduct affecting the Board, its process, or its 
proceedings, the Board may make such orders as are just, including the 
imposition of appropriate sanctions. The sanctions include:
    (1) Taking the facts pertaining to the matter in dispute to be 
established for the purpose of the case in accordance with the 
contention of the party submitting the discovery request;
    (2) Forbidding challenge of the accuracy of any evidence;
    (3) Refusing to allow the disobedient party to support or oppose 
designated claims or defenses;
    (4) Prohibiting the disobedient party from introducing in evidence 
designated documents or items of testimony;
    (5) Striking pleadings or parts thereof, or staying further 
proceedings until the order is obeyed;
    (6) Dismissing the case or any part thereof;
    (7) Enforcing the protective order and disciplining individuals 
subject to such other violation thereof, including disqualifying a 
party's representative, attorney, or expert/consultant from further 
participation in the case; or
    (8) Imposing such other sanctions as the Board deems appropriate.
    (c) Denial of access to protected material for prior violations of 
protective orders. The Board may in its discretion deny access to 
protected material to any person found to have previously violated the 
Board's protective order.
    (d) Disciplinary proceedings. (1) In addition to the other 
procedures in this section, the Board may discipline individual party 
representatives, attorneys, and experts/consultants for a violation of 
any Board order or direction or standard of conduct applicable to such 
individual where the violation seriously affects the integrity of the 
Board's process or proceedings. Sanctions may be public or private, and 
may include admonishment, disqualification from a particular matter, 
referral to an appropriate licensing authority, or such other action as 
circumstances may warrant.
    (2) The Board in its discretion may suspend an individual from 
appearing before the Board as a party representative, attorney, or 
expert/consultant if, after affording such individual notice and an 
opportunity to be heard, a majority of the members of the full Board 
determines such a sanction is warranted.



6101.19  Hearings: scheduling; notice; unexcused absences [Rule 119].

    (a) Scheduling of hearings. Hearings will be held at the time and 
place ordered by the Board and will be scheduled at the discretion of 
the Board. In scheduling hearings, the Board will consider the 
requirements of this part and part 6102, the need for orderly management 
of the Board's caseload, and the stated desires of the parties as 
expressed in their elections filed pursuant to 6101.9 or otherwise. The 
time or

[[Page 305]]

place for hearing may be changed by the Board at any time.
    (b) Notice of hearing. Notice of hearing will be by written order of 
the Board. Notice of changes in the hearing schedule will also be by 
written order when practicable but may be oral in exigent circumstances. 
Except as the Board may otherwise order, each party that plans to attend 
the hearing shall, within 10 working days of receipt of:
    (1) A written notice of hearing or
    (2) Any notice of a change in hearing schedule stating that an 
acknowledgment is required, notify the Board in writing that it will 
attend the hearing.
    (c) Unexcused absence from hearing. In the event of the unexcused 
absence of a party from a hearing, the hearing will proceed, and the 
absent party will be deemed to have elected to submit its case on the 
record pursuant to 6101.11.



6101.20  Subpoenas [Rule 120].

    (a) Voluntary cooperation in lieu of subpoena. Each party is 
expected to:
    (1) Cooperate by making available witnesses and evidence under its 
control, when requested by another party, without issuance of a 
subpoena; and
    (2) Secure voluntary attendance of third-party witnesses and 
production of evidence by third parties, and when practicable, without 
issuance of a subpoena.
    (b) General. Upon the written request of any party filed with the 
Office of the Clerk of the Board, or on the initiative of a judge, a 
subpoena may be issued that commands the person to whom it is directed 
to:
    (1) Attend and give testimony at a deposition in a city or county 
where that person resides or is employed or transacts business in 
person, or at another location convenient to that person that is 
specifically determined by the Board;
    (2) Attend and give testimony at a hearing; and
    (3) Produce the books, papers, documents, and other tangible things 
designated in the subpoena.
    (c) Request for subpoena. A request for a subpoena shall state the 
reasonable scope and general relevance to the case of the testimony and 
of any documentary evidence sought. A request for a subpoena shall be 
filed at least 15 calendar days before the testimony of a witness or 
documentary evidence is to be provided. The Board may, in its 
discretion, honor requests for subpoenas not made within this time 
limitation.
    (d) Form; issuance. Every subpoena shall be in the form specified in 
the appendix to this part and part 6102. Unless a party has the approval 
of a judge to submit a subpoena in blank (in whole or in part), a party 
shall submit to the judge a completed subpoena (save the ``Return on 
Service'' portion). In issuing a subpoena to a requesting party, the 
judge shall sign the subpoena. The party to whom the subpoena is issued 
shall complete the subpoena before service.
    (2) If the person subpoenaed is located in a foreign country, a 
letter rotatory or a subpoena may be issued and served under the 
circumstances and in the manner provided in 28 U.S.C. 1781-1784.
    (e) Service. (1) The party requesting a subpoena shall arrange for 
service. Service shall be made as soon as practicable after the subpoena 
has been issued.
    (2) A subpoena requiring the attendance of a witness at a deposition 
or hearing may be served at any place. A subpoena may be served by a 
United States marshal or deputy marshal, or by any other person who is 
not a party and not less than 18 years of age. Service of a subpoena 
upon a person named therein shall be made by personal delivery of a copy 
to that person and tender of the fees for one day's attendance and the 
mileage allowed by 28 U.S.C. 1821 or other applicable law; however, 
where the subpoena is issued on behalf of the Government, money payments 
need not be tendered in advance of attendance.
    (f) Proof of service. The person serving the subpoena shall make 
proof of service thereof to the Board promptly and in any event before 
the date on which the person served must respond to the subpoena. Proof 
of service shall be made by completion and execution and submission to 
the Board of the ``Return on Service'' portion of a duplicate copy of 
the subpoena issued by a judge. If service is made by a person other 
than a United States marshal or his deputy, that person shall make an 
affidavit as

[[Page 306]]

proof by executing the ``Return on Service'' in the presence of a 
notary.
    (g) Motion to quash or to modify. Upon written motion by the person 
subpoenaed or by a party, made within 14 calendar days after service, 
but in any event not later than the time specified in the subpoena for 
compliance, the Board may
    (1) Quash or modify the subpoena if it is unreasonable and 
oppressive or for other good cause shown, or
    (2) Require the party in whose behalf the subpoena was issued to 
advance the reasonable cost of producing subpoenaed documentary 
evidence. Where circumstances require, the Board may act upon such a 
motion at any time after a copy has been served upon opposing parties.
    (h) Contumacy or refusal to obey a subpoena. In a case of contumacy 
or refusal to obey a subpoena by a person who resides, is found, or 
transacts business within the jurisdiction of a United States district 
court, the Board shall apply to the court through the Attorney General 
of the United States for an order requiring the person to appear before 
the board to give testimony, produce evidence or both. If a person fails 
to obey such an order, the court may punish that person for contempt of 
court.



6101.21  Hearing procedures [Rule 121].

    (a) Nature and conduct of hearings. Except when necessary to 
maintain the confidentiality of protected material or testimony, or 
material submitted in camera, all hearings on the merits of cases shall 
be open to the public and conducted insofar as is convenient in regular 
hearing rooms. All other acts or proceedings may be done or conducted by 
the Board either in its offices or at other places.
    (b) Continuances; change of location. Whenever practicable, a 
hearing will be conducted in one continuous session or a series of 
consecutive sessions at a single location. However, the Board may at any 
time continue the hearing to a future date and may arrange to conduct 
the hearing in more than one location. The Board may also continue a 
hearing to permit a party to conduct additional discovery on conditions 
established by the Board. In exercising its discretion to continue a 
hearing or to change its location, the Board will give due consideration 
to the same elements (set forth in 6101.19(a)) that it considers in 
scheduling hearings.
    (c) Availability of witnesses, documents, and other tangible things. 
It is the responsibility of a party desiring to call any witness, or to 
use any document or other tangible thing as an exhibit in the course of 
a hearing, to ensure that whoever it wishes to call and whatever it 
wishes to use is available at the hearing.
    (d) Enlargement of the record. The Board may at any time during the 
conduct of a hearing require evidence or argument in addition to that 
put forth by the parties.
    (e) Examination of witnesses. Witnesses before the Board will 
testify under oath or affirmation. A party or the Board may obtain an 
answer from any witness to any question that is not the subject of an 
objection that the Board sustains.
    (f) Refusal to be sworn. If a person called as a witness refuses to 
be sworn or to affirm before testifying, the Board may direct that 
witness to do so and, in the event of continued refusal, the Board may 
permit the taking of testimony without oath or affirmation. 
Alternatively, the Board may refuse to permit the examination of that 
witness, in which event it may state for the record the inferences it 
draws from the witness's refusal to testify under oath or affirmation. 
Alternatively, the Board may issue a subpoena to compel that witness to 
testify under oath or affirmation, and in the event of the witness's 
continued refusal to swear or affirm, may seek enforcement of that 
subpoena pursuant to 6101.20(h).
    (g) Refusal to answer. If a witness refuses to answer a question put 
to him in the course of his testimony, the Board may direct that witness 
to answer and, in the event of continued refusal, the Board may state 
for the record the inferences if draws from the refusal to answer. 
Alternatively, the Board may issue a subpoena to compel that witness to 
testify and, in the event of the witness's continued refusal to testify, 
may seek enforcement of that subpoena pursuant to 6101.20(h).

[[Page 307]]

    (h) Issues not raised by pleadings. If evidence is objected to at a 
hearing on the ground that it is not within the issues raised by the 
pleadings, it may nevertheless be admitted by the Board if it is within 
the proper scope of the case. If such evidence is admitted, the Board 
may grant the objecting party a continuance to enable it to meet such 
evidence. If such evidence is admitted, the pleadings may be amended to 
conform to the evidence, as provided by 6101.12(e).
    (i) Delay by parties. If the Board determines that the hearing is 
being unreasonably delayed by the failure of a party to produce 
evidence, or by the undue prolongation of the presentation of evidence, 
it may, by written order or by ruling from the bench, prescribe a time 
or times within which the presentation of evidence must be concluded, 
establish time limits on the direct or cross-examination of witnesses, 
and enforce such order or ruling by appropriate sanctions.



6101.22  Admissibility and weight of evidence [Rule 122].

    (a) Admissibility. Any relevant evidence may be received. The Board 
may exclude relevant evidence to avoid unfair prejudice, confusion of 
the issues, undue delay, waste of time, or needless presentation of 
cumulative evidence. Hearsay evidence is admissible unless the Board 
finds it unreliable or untrustworthy.
    (b) Federal Rules of Evidence. As a general matter, and subject to 
the other provisions of this section, the Board will base its 
evidentiary rulings on the Federal Rules of Evidence.
    (c) Weight and credibility. The Board will determine the weight to 
be given to evidence and the credibility to be accorded witnesses.
    (d) Submission of evidence in camera. 6101.12(h) governs submissions 
in camera.



6101.23  Exhibits [Rule 123].

    (a) Marking of exhibits. (1) Documents and other tangible things 
offered in evidence by a party will be marked for identification by the 
Board during the hearing or, if it is convenient for the Board and the 
parties, before the commencement of the hearing. They will be numbered 
consecutively as the exhibits of the party offering them.
    (2) If a party elects to proceed on the record without a hearing 
pursuant to 6101.11, documentary evidence submitted by that party will 
be numbered consecutively by the Board as appeal file exhibits.
    (b) Copies as exhibits. Except upon objection sustained by the Board 
for good cause shown, copies of documents may be offered and received 
into evidence as exhibits, provided they are of equal legibility and 
quality as the originals, and such copies shall have the same force and 
effect as if they were the originals. If the Board so directs, a party 
offering a copy of a document as an exhibit shall have the original 
available at the hearing for examination by the Board and any other 
party. When the original of a document has been received into evidence 
as an exhibit, an accurate copy thereof may be substituted in evidence 
for the original by leave of the Board at any time.
    (c) Withdrawal of documentary exhibits and other papers. With the 
permission of the Board, a party may remove an exhibit during the course 
of a proceeding. Otherwise, except as provided in 6101.37(d), no 
withdrawal of any papers in the Board's file is permitted. Inspection of 
the file at the Board's offices is permitted by 6101.12(g).
    (d) Disposition of physical exhibits. Any physical (as opposed to 
documentary) exhibit may be disposed of by the Board at any time more 
than 90 calendar days after the expiration of the period for appeal from 
the decision of the Board, unless it has been earlier withdrawn by the 
party that submitted it.



6101.24  Transcripts of proceedings; corrections [Rule 124].

    (a) Transcripts Except as the Board may otherwise order, all 
hearings, other than those under the small claims procedure prescribed 
by 6102.2, will be stenographically or electronically recorded and 
transcribed. Any other hearing or conference will be recorded or 
transcribed only by order of the Board. Copies or transcriptions of 
stenographic or electronic recordings not ordered to be transcribed by 
the Board will be furnished to the parties

[[Page 308]]

or other persons only on conditions prescribed by the Board, which may 
include the payment of the costs of copying or transcription. Each party 
is responsible for obtaining its own copy of the transcript if one is 
prepared.
    (b) Corrections. Corrections to an official transcript will be made 
only when they involve errors affecting its substance. The Board may 
order such corrections on motion or on its own initiative, and only 
after notice to the parties giving them opportunity to object. Such 
corrections will ordinarily be made either by hand with pen and ink or 
by the appending of an errata sheet, but when no other method of 
correction is practicable the Board may require the reporter to provide 
substitute or additional pages.



6101.25  Briefs and memoranda of law [Rule 125].

    (a) Form and content of briefs and memoranda of law. Briefs and 
memoranda of law shall be typewritten on standard size 8\1/2\ by 11-inch 
paper. Otherwise, no particular form or organization is prescribed. 
Posthearing briefs should, at a minimum, succinctly set forth
    (1) The facts of the case with citations to those places in the 
record where supporting evidence can be found and
    (2) Argument with citations to supporting legal authorities. 
Memoranda of law should generally adhere as closely as practicable to 
the form and content of briefs.
    (b) Submission of posthearing briefs. Except as the Board may 
otherwise order, posthearing briefs shall be filed 30 calendar days 
after the Board's receipt of the transcript; reply briefs, if filed, 
shall be filed 15 calendar days after the parties' receipt of the 
initial posthearing briefs. The Board will notify the parties of the 
date of its receipt of the transcript. In the event one party has 
elected a hearing and the other party has elected to submit its case on 
the record pursuant to 6101.11, the filing of record submissions in the 
form of briefs shall be governed by this section.



6101.26  Consolidation; separate hearings; separate determination of liability [Rule 126].

    (a) Consolidation. When cases involving common questions of law or 
fact are pending, the Board may:
    (1) Order a joint hearing of any or all of the matters at issue in 
the cases;
    (2) Order the cases consolidated; or
    (3) Make such other orders concerning the proceedings therein as are 
intended to avoid unnecessary costs or delay.
    (b) Separate hearings. The Board may order a separate hearing of any 
case or cases or of any claims or issues or number of claims or issues 
therein. The Board may enter appropriate orders or decisions with 
respect to any claims or issues that are heard separately.
    (c) Separate determinations of liability. The Board may:
    (1) Limit a hearing to those issues of law and fact relating to the 
right of a party to recover, reserving the determination of the amount 
of recovery, if any, for other proceedings; and
    (2) In its decision of an appeal, irrespective of whether there is 
evidence in the record concerning the amount of recovery, and whether or 
not a stipulation or order has been made, reserve determination of the 
amount of recovery for other proceedings. In any instance in which the 
Board has reserved its determination of the amount of recovery for other 
proceedings, its decision on the question of the right to recover shall 
be final, subject to the provisions of 6101.30 through 6101.33.



6101.27  Stay or suspension of proceedings; dismissals in lieu of stay 
or suspension [Rule 127].

    (a) Stay of proceedings to obtain contracting officer's decision. 
The Board may in its discretion stay proceedings to permit a contracting 
officer to issue a decision when an appeal has been taken from the 
contracting officer's alleged failure to render a timely decision.
    (b) Suspension for other cause. The Board may suspend proceedings in 
a case for good cause. The order suspending proceedings will prescribe 
the duration of the suspension or the conditions on which it will 
expire. The order may also prescribe actions to be

[[Page 309]]

taken by the parties during the period of suspension or following its 
expiration.
    (c) Dismissal in lieu of stay or suspension. When circumstances 
beyond the control of the Board prevent the continuation of proceedings 
in a case, the Board may, in lieu of issuing an order suspending 
proceedings, dismiss the case without prejudice to reinstatement. Such a 
dismissal may require reinstatement by a date certain or within a 
certain period of time after the occurrence of a specified event. If the 
order of dismissal does not otherwise provide, it will be subject to the 
provisions of 6101.28(b).



6101.28  Dismissals [Rule 128].

    (a) Generally. A case may be dismissed by the Board on motion of 
either party. A case may also be dismissed for reasons cited by the 
Board in a show cause order to which response has been permitted. Every 
dismissal shall be with prejudice to reinstatement of the case unless a 
dismissal without prejudice has been requested by a party or specified 
in a show cause order.
    (b) Dismissal without prejudice. When a case has been dismissed 
without prejudice to its reinstatement and neither party has requested, 
within the period of time specified in this paragraph, that the case be 
reinstated, the case shall be deemed to have been dismissed with 
prejudice as of the expiration of 180 calendar days from the date of 
dismissal, or such other period as the Board may prescribe.
    (c) Issuance of order. An order of dismissal shall be issued by the 
panel of judges to which the case has been assigned if the motion is 
contested or if the Board is acting consequent to its own show cause 
order. An order of dismissal may be issued by the panel chairman alone 
if the motion to dismiss is not contested.



6101.29  Decisions: format; procedure [Rule 129].

    Except as provided in 6102.2 (small claims procedure), decisions of 
the Board will be made in writing upon the record as prescribed in 
6101.12. Each of the parties will be furnished a copy of the decision 
certified by the Office of the Clerk of the Board, and the date of the 
receipt thereof by each party will be established in the record.



6101.30  Full Board consideration [Rule 130].

    (a) Requests. (1) A request for full Board consideration is not 
favored. Ordinarily, full Board consideration will be ordered only when
    (i) It is necessary to secure or maintain uniformity of Board 
decisions, or
    (ii) The matter to be referred is one of exceptional importance.
    (2) A request for full Board consideration may be made by either 
party on any date which is both
    (i) After the panel to which the case is assigned has issued its 
decision on a motion for reconsideration or relief from decision and
    (ii) Within 10 working days after the date on which that party 
receives that decision. Any party making a request for full Board 
consideration shall state concisely in the motion the precise grounds on 
which the request is based.
    (3) The full Board on its own may initiate consideration of a matter
    (i) At any time while the case is before the Board,
    (ii) No later than the last date on which any party may file a 
motion for reconsideration or relief from decision or order, or
    (iii) If such a motion is filed by a party, within ten days after a 
panel has resolved it.
    (b) Consideration. Promptly after such a request is made, a ballot 
will be taken among the judges; if a majority of them favors the 
request, the request will be granted. The result of the vote will 
promptly be reported by the Board through an order. The concurring or 
dissenting view of any judge who wishes to express such a view may issue 
at the time of such order or at any time thereafter.
    (c) Decisions. If full Board consideration is granted, a vote shall 
be taken promptly on the pending matter. After this vote is taken, the 
Board shall promptly, by order, issue its determination, which shall 
include the concurring or dissenting view of any judge who wishes to 
express such a view.

[[Page 310]]



6101.31  Clerical mistakes [Rule 131].

    Clerical mistakes in decisions, orders, or other parts of the 
record, and errors arising therein through oversight or inadvertence, 
may be corrected by the Board at any time on its own initiative or upon 
motion of a party on such terms, if any, as the Board may prescribe. 
During the pendency of an appeal to another tribunal, such mistakes may 
be corrected only with leave of the appellate tribunal.



6101.32  Reconsideration; amendment of decisions; new hearings [Rule 132].

    (a) Grounds. Reconsideration may be granted, a decision or order may 
be altered or amended, or a new hearing may be granted, for any of the 
reasons stated in 6101.33(a) and the reasons established by the rules of 
common law or equity applicable as between private parties in the courts 
of the United States. Reconsideration, or a new hearing, may be granted 
on all or any of the issues. Arguments already made and 
reinterpretations of old evidence are not sufficient grounds for 
granting reconsideration. On granting a motion for a new hearing, the 
Board may open the decision if one has been issued, take additional 
testimony, amend findings of fact and conclusions of law, or make new 
findings and conclusions and direct the entry of a new decision.
    (b) Procedure. (1) Any motion under this section shall comply with 
the provisions of 6101.8 and shall set forth:
    (i) The reason or reasons why the Board should consider the motion; 
and
    (ii) The relief sought and the grounds therefor.
    (2) If the Board concludes that the reasons asserted for its 
consideration of the motion are insufficient, it may deny the motion 
without considering the relief sought and the grounds asserted therefor. 
If the Board grants the motion, it will issue an appropriate order which 
may include directions to the parties for further proceedings.
    (c) Time for filing. A motion for reconsideration, to alter or amend 
a decision or order, or for a new hearing shall be filed in an appeal or 
petition within 30 calendar days and in an application within 7 working 
days after the date of receipt by the moving party of the decision or 
order. Not later than 30 calendar days after issuance of a decision or 
order, the Board may, on its own initiative, order reconsideration or a 
new hearing or alter or amend a decision or order for any reason that 
would justify such action on motion of a party.
    (d) Effect of motion. A motion pending under this section does not 
affect the finality of a decision or suspend its operation.



6101.33  Relief from decision or order [Rule 133].

    (a) Grounds. The Board may relieve a party from the operation of a 
final decision or order for any of the following reasons:
    (1) Newly discovered evidence which could not have been earlier 
discovered, even through due diligence;
    (2) Justifiable or excusable mistake, inadvertence, surprise, or 
neglect;
    (3) Fraud, misrepresentation, or other misconduct of an adverse 
party;
    (4) The decision has been satisfied, released, or discharged, or a 
prior decision upon which it is based has been reversed or otherwise 
vacated, and it is no longer equitable that the decision should have 
prospective application;
    (5) The decision is void, whether for lack of jurisdiction or 
otherwise; or
    (6) Any other ground justifying relief from the operation of the 
decision or order.
    (b) Procedure. Any motion under this section shall comply with the 
provisions of 6101.8 and 6101.32(b), and will be considered and ruled 
upon by the Board as provided in 6101.32.
    (c) Time for filing. Any motion under this section shall be filed as 
soon as practicable after the discovery of the reasons therefor, but in 
any event no later than 120 calendar days or, in appeals under the small 
claims procedure of 6102.2, no later than 30 calendar days after the 
date of the moving party's receipt of the decision or order from which 
relief is sought. In considering the timeliness of a motion filed under 
this section, the Board may consider when the grounds therefor should 
reasonably have been known to the moving party.
    (d) Effect of motion. A motion pending under this section does not 
affect the

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finality of a decision or suspend its operation.



6101.34  Harmless error [Rule 134].

    No error in the admission or exclusion of evidence, and no error or 
defect in any ruling, order, or decision of the Board, and no other 
error in anything done or omitted to be done by the Board will be a 
ground for granting a new hearing or for vacating, reconsidering, 
modifying, or otherwise disturbing a decision or order of the Board 
unless refusal to act upon such error will prejudice a party or work a 
substantial injustice. At every stage of the proceedings the Board will 
disregard any error or defect that does not affect the substantial 
rights of the parties.



6101.35  Award of costs [Rule 135].

    (a) Applications for costs. An appropriate party in a proceeding 
before the Board may apply for an award of costs, including if 
applicable an award of attorney fees, under the Equal Access to Justice 
Act, 5 U.S.C. 504, or any other provision that may entitle that party to 
such an award, subsequent to the Board's decision in the proceeding. For 
purposes of this section, ``decision'' includes orders of dismissal 
resulting from settlement agreements that bring to an end the 
proceedings before the Board.
    (b) Time for filing. A party seeking an award may submit an 
application no later than 30 calendar days after a final disposition in 
the underlying appeal. In the case of an appeal that is adjudicated, the 
Board's decision becomes final (for purposes of this section) when it is 
not appealed to the United States Court of Appeals for the Federal 
Circuit within the time permitted for appeal or, if the decision is 
appealed, when the time for petitioning the Supreme Court for certiorari 
has expired. In the case of an appeal that is resolved as a result of 
settlement, the Board's disposition becomes final (for purposes of this 
section) after receipt by the applicant of the order granting or 
dismissing the appeal.
    (c) Application requirements. An application for costs shall:
    (1) Identify the applicant and the appeal for which costs are 
sought, and the amount being sought;
    (2) Establish that all applicable prerequisites for an award have 
been satisfied, including a succinct statement of why the applicant is 
eligible for an award of costs;
    (3) Be accompanied by an exhibit fully documenting any fees or 
expenses being sought, including the cost of any study, analysis, 
engineering report, test, project, or similar matter. The date and a 
description of all services rendered or costs incurred shall be 
submitted for each profession firm or individual whose services are 
covered by the application, showing the hours spent in connection with 
the proceeding by each individual, a description of the particular 
services performed by specific date, the rate at which each fee has been 
computed, any expenses for which reimbursement is sought, and the total 
amount paid or payable by the applicant on account of the sought-after 
costs. Except in exceptional circumstances, all exhibits supporting 
applications for fees or expenses sought shall be publicly available. 
The Board may require the applicant to provide vouchers, receipts, or 
other substantiation for any costs claimed and/or to submit to an audit 
by the Government of the claimed costs;
    (4) Be signed by the applicant or an authorized officer, employee, 
or attorney of the applicant;
    (5) Contain or be accompanied by a written verification under oath 
or affirmation, or declaration under penalty of perjury, that the 
information provided in the application is true and correct;
    (6) If the applicant asserts that it is a qualifying small business 
concern, contain evidence thereof; and
    (7) If the application requests reimbursement of attorney fees that 
exceed the statutory rate, explain why an increase in the cost of living 
or a special factor, such as the limited availability of qualified 
attorneys for the proceedings involved, justifies such fees.
    (d) Proceedings. (1) Within 30 calendar days after receipt by the 
respondent of an application under this section, the respondent may file 
an answer. The answer shall explain in detail any objects to the award 
requested and set out the legal and factual bases supporting the

[[Page 312]]

respondent's position. If the respondent contends that any fees for 
consultants or expert witnesses for which reimbursement is sought in the 
application exceed the highest rate of compensation for expert witnesses 
paid by the agency, the respondent shall include in the answer evidence 
of such highest rate.
    (2) Further proceedings shall be held only by order of the Board and 
only when necessary for full and fair resolution of the issues arising 
from the application. Such proceedings shall be minimized to the extent 
possible and shall not include relitigation of the case on the merits. A 
request that the Board order further proceedings under this section 
shall describe the disputed issues and explain why additional 
proceedings are necessary to resolve those issues.
    (e) Decision. Any award ordered by the Board shall be paid pursuant 
to 6101.36.



6101.36  Payment of Board awards [Rule 136].

    (a) Generally. When permitted by law, payment of Board awards may be 
made in accordance with 31 U.S.C. 1304. Awards by the Board pursuant to 
the Equal Access to Justice Act shall be directly payable by the 
respondent agency over which the applicant has prevailed in the 
underlying appeal.
    (b) Conditions for payment. Before a party may obtain payment of a 
Board award pursuant to 31 U.S.C. 1304, one of the following must occur:
    (1) Both parties must, by execution of a Certificate of Finality, 
waive their rights to relief under 6101.32 and 6101.33 and also their 
rights to appeal the decision of the Board; or
    (2) The time for filing an appeal must expire.
    (c) Procedure for filing of certificates of finality. Whenever the 
Board issues a decision or an order awarding a party any amount of 
money, it will attach to the copy of the decision sent to each party 
forms such as those illustrated in the appendix to this part and part 
6102. The conditions for payment prescribed in paragraph (b)(1) of this 
section are satisfied if each of the parties returns a completed and 
duly executed copy of this form to the Board. When the form is executed 
on behalf of an appellant or applicant by an attorney or other 
representative, proof of signatory authority shall also be furnished. 
Upon receipt of completed and duly executed Certificates of Finality 
from the parties, the Board will forward a copy of each such certificate 
(together with proof of signatory authority, if required) and a 
certified copy of its decision to the United States Department of the 
Treasury to be certified for payment.
    (d) Procedure in absence of certificate of finality. When one or 
both of the parties fails to submit a duly executed Certificate of 
Finality, but the conditions for payment have been satisfied as provided 
in paragraph (b)(2) of this section, the appellant or applicant may file 
a written request that the Board forward its decision to the United 
States Department of the Treasury for payment. Thereupon, the Board will 
forward a copy of that request and a certified copy of its decision to 
the United States Department of the Treasury to be certified for 
payment.
    (e) Stipulated award. When an appeal is settled, the parties may 
file with the Board a stipulation setting forth the amount of the award 
and stating
    (1) That they will not seek reconsideration of, or relief from, the 
Board's decision, and
    (2) That they will not appeal the decision. The Board will adopt the 
parties' stipulation by decision. The Board's decision under this 
paragraph is an adjudication of the case on the merits.



6101.37  Record on review of a Board decision [Rule 137].

    (a) Record on review. When a party has appealed a Board decision to 
the United States Court of Appeals for the Federal Circuit, the record 
on review shall consist of the decision sought to be reviewed, the 
record before the Board as described in 6101.12, and such other material 
as may be required by the Court of Appeals.
    (b) Notice. At the same time a party seeking review of a Board 
decision files a notice of appeal, that party shall provide a copy of 
the notice to the Board.
    (c) Filing of certified list of record materials. Promptly after 
service upon the

[[Page 313]]

Board of a copy of the notice of appeal of a Board decision, the Office 
of the Clerk of the Board shall file with the Clerk of the United States 
Court of Appeals for the Federal Circuit a certified list of all 
documents, transcripts of testimony, exhibits, and other materials 
constituting the record, or a list of such parts thereof as the parties 
may designate, adequately describing each. The Board will retain the 
record and transmit any part thereof to the Court upon the Court's order 
during the pendency of the appeal.
    (d) Request by attorney of record to review record. When a case is 
on appeal, an attorney of record may request permission from the Board 
to sign out the record on appeal to review and copy, for a reasonable 
period of time, if the attorney is unable to gain access to the record 
from another source.



6101.38  Office of the Clerk of the Board [Rule 138].

    (a) Open for the filing of papers. The Office of the Clerk of the 
Board shall receive all papers submitted for filing, and shall be open 
for this purpose from 8:00 a.m. to 4:30 p.m., Eastern Time, on each day 
that is not a Saturday, Sunday, federal holiday, a day on which the 
Office is required to close earlier than 4:30 p.m., or a day on which 
the Office does not open at all, as in the case of inclement weather.
    (b) Decisions and orders. The Office of the Clerk shall keep in such 
form and manner as the Board may prescribe a correct copy of each 
decision or order of the Board subject to review and any other order or 
decision which the Board may direct to be kept.
    (c) Docket. The Office of the Clerk shall keep a docket on which 
shall be entered the title and nature of all cases brought before the 
Board, the names of the persons filing such cases, the names of the 
attorneys or other persons appearing for the parties, and a record of 
all proceedings.
    (d) Copies and certification of papers. Upon the request of any 
person, copies of papers and documents in a case may be provided by the 
Office of the Clerk. If making such copies involves more than minimal 
costs to the Board, reimbursement will be required. When required, the 
Office of the Clerk will certify copies of papers and documents as a 
true record of the Board. Except as provided in 6101.23(c) and 
6101.37(d), the Office of the Clerk will not release original records in 
its possession to any person.



6101.39  Seal of the Board [Rule 139].

    The Seal of the Board shall be a circular boss, the center portion 
of which shall depict the Seal of the General Services Administration. 
The outer margin of the seal shall bear the legend ``Board of Contract 
Appeals.'' The Seal shall be the means of authentication of all records, 
notices, orders, dismissals, opinions, subpoenas, and certificates 
issued by the Board.



6101.40  Forms [Rule 140].

    The forms contained in the appendix to this part and part 6102 are 
sufficient under these parts and are intended to indicate the simplicity 
and brevity of statement which the rules in those parts contemplate. The 
subpoena form is a required form, and it may not be altered.

                  Appendix to Part 6101--Form Nos. 1-5

Form 1--Notice of Appeal, GSA Form 2465
Form 2--Notice of Appearance
Form 3--Subpoena, GSA Form 9534
Form 4--Government Certificate of Finality
Form 5--Appellant/Applicant Certificate of Finality

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PART 6102_RULES OF PROCEDURE OF THE GENERAL SERVICES ADMINISTRATION BOARD 
OF CONTRACT APPEALS (EXPEDITED PROCEEDINGS)--Table of Contents




Sec.
6102.1 Variation from standard proceedings [Rule 201].
6102.2 Small claims procedure [Rule 202].
6102.3 Accelerated procedure [Rule 203].
6102.4 Alternative dispute resolution [Rule 204].

    Authority: 41 U.S.C. 601-613.

    Source: 61 FR 52369, Oct. 7, 1996, unless otherwise noted.



6102.1  Variation from standard proceedings [Rule 201].

    The ultimate purpose of any Board proceeding is to resolve fairly 
and expeditiously any dispute properly before the Board. When, during 
the normal course of a Board proceeding, the parties agree that a change 
in established procedure will promote this end, the Board will make that 
change if it is deemed to be feasible and in the best interest of the 
parties, the Board, and the resolution of contract disputes. The 
following are examples of these changes:
    (a) Establishing an expedited schedule of proceedings, such as by 
limiting the times provided in part 6101 of this chapter for various 
filings, to facilitate a prompt resolution of the case;
    (b) Developing a record and rendering a decision on the issue of 
entitlement prior to reviewing the issue of quantum in a party's claim;
    (c) Developing a record and rendering a decision on any legal or 
factual issue in advance of others when that issue is deemed critical to 
resolving the case or effecting a settlement of any items in dispute; 
and
    (d) Developing a record regarding relevant facts through an on-the-
record round-table discussion with sworn witnesses, counsel, and the 
panel chairman rather than through formal direct and cross-examination 
of each of these same witnesses. This discussion shall be controlled by 
the panel chairman. It may be conducted, for example, through the 
presentation of narrative statements of witnesses or on an issue by 
issue basis. The panel chairman may also request that the parties' 
counsel or representatives present opening and/or closing statements in 
lieu of written briefs.



6102.2  Small claims procedure [Rule 202].

    (a) Election. (1) The small claims procedure is available solely at 
the appellant's election, and only when there is a monetary amount in 
dispute and that amount is $50,000 or less. Such election shall be made 
no later than 30 calendar days after the appellant's receipt of the 
agency answer, unless the panel chairman enlarges the time for good 
cause shown.
    (2) At the request of the Government, or on its own initiative, the 
Board may determine whether the amount in dispute is greater than 
$50,000, such that the election is inappropriate. The Government shall 
raise any objection to the election no later than 10 working days after 
receipt of a notice of election.
    (b) Decision. The panel chairman may issue a decision, which may be 
in summary form, orally or in writing. A decision which is issued orally 
shall be reduced to writing; however, such a decision takes effect at 
the time it is rendered, prior to being reduced to writing. A decision 
shall be final and conclusive and shall not be set aside except in case 
of fraud. A decision shall have no value as precedent.
    (c) Procedure. Promptly after receipt of the appellant's election of 
the small claims procedure, the Board shall establish a schedule of 
proceedings that will allow for the timely resolution of the appeal. 
Pleadings, discovery, and other prehearing activities may be restricted 
or eliminated.
    (d) Time of decision. Whenever possible, the panel chairman shall 
resolve an appeal under this procedure within 120 calendar days from the 
Board's receipt of the election. The time for processing an appeal under 
this procedure may be extended if the appellant has not adhered to the 
established schedule. Either party's failure to abide by the Board's 
schedule may result in the Board drawing evidentiary inference adverse 
to the party at fault.

[[Page 321]]



6102.3  Accelerated procedure [Rule 203].

    (a) Election. (1) The accelerated procedure is available solely at 
the appellant's election, and only when there is a monetary amount in 
dispute and that amount is $100,000 or less. Such election shall be made 
no later than 30 calendar days after the appellant's receipt of the 
agency answer, unless the panel chairman enlarges the time for good 
cause shown.
    (2) At the request of the Government, or on its own initiative, the 
Board may determine whether the amount in dispute is greater than 
$100,000, such that the election is inappropriate. The Government shall 
raise any objection to the election no later than 10 working days after 
receipt of a notice of election.
    (b) Decision. Each decision shall be rendered by the panel chairman 
with the concurrence of one of the other judges assigned to the panel; 
in the event the two judges disagree, the third judge assigned to the 
panel will participate in the decision.
    (c) Procedure. Promptly after receipt of the appellant's election of 
the accelerated procedure, the Board shall establish a schedule of 
proceedings that will allow for the timely resolution of the appeal. 
Pleadings may be simplified, and discovery and other prehearing 
activities may be restricted or eliminated.
    (d) Time of decision. Whenever possible, the panel chairman shall 
resolve an appeal under this procedure within 180 calendar days from the 
Board's receipt of the election. The time for processing an appeal under 
this procedure may be extended if the appellant has not adhered to the 
established schedule. Either party's failure to abide by the Board's 
schedule may result in the Board drawing evidentiary inferences adverse 
to the party at fault.



6102.4  Alternative dispute resolution [Rule 204].

    (a) Availability of ADR procedures. The Board will make its services 
available for ADR proceedings in contract and procurement matters 
involving any agency, regardless of whether the agency uses the Board to 
resolve its Contract Disputes Act appeals.
    (1) ADR subsequent to docketing of case at the Board. Parties are 
encouraged to consider the feasibility of using ADR as soon as their 
case is docketed. If, however, at any time during the course of a Board 
proceeding, the parties agree that their dispute may be resolved through 
the use of an ADR technique, the panel chairman may suspend proceedings 
for a reasonable period of time while the parties and the Board attempt 
to resolve the dispute in this manner. The use of an ADR technique will 
not toll any relevant statutory time limit for deciding the case.
    (2) Other ADR. Upon request, the Board will make a Board Neutral 
available for an ADR proceeding involving any agency in any contract or 
procurement matter at any stage of a procurement, even if no contracting 
officer decision has been issued or is contemplated. To initiate an ADR 
proceeding, the parties shall jointly request the ADR in writing and 
direct such request to the Office of the Clerk of the Board. For 
agencies other than GSA, the Board will provide ADR services on a 
reimbursable basis.
    (b) Conduct of ADR--(1) Selection of Board Neutral. If ADR is agreed 
to by the parties and the Board, the parties may request the appointment 
of one or more Board judges to act as a Board Neutral or Neutrals. The 
parties may request that the Board's chairman appoint a particular judge 
or judges as the Board Neutral, or ask the Board's chairman to appoint 
any judge or judges as the Neutral. If, when ADR has been requested for 
a case that has already been docketed with the Board, as provided in 
paragraph (a)(1) of this section, the parties may request that the panel 
chairman serve as the Board Neutral. In such a situation, if the ADR is 
unsuccessful,
    (i) If the ADR has involved mediation, the panel chairman shall not 
retain the case, and
    (ii) If the ADR has not involved mediation, the panel chairman, 
after considering the parties' views, shall decide whether to retain the 
case.
    (2) Retention and confidentiality of materials. The Board will 
review materials submitted by a party for an ADR proceeding, but will 
not retain such materials after the proceeding is concluded

[[Page 322]]

or otherwise terminated. Material created by a party for the purpose of 
an ADR proceeding is to be used solely for that proceeding unless the 
parties agree otherwise. Parties may request a protective order in an 
ADR proceeding in the manner provided in 6101.12(h).
    (c) Types of ADR. ADR is not defined by any single procedure or set 
of procedures. The Board will consider the use of any technique proposed 
by the parties which is deemed to be fair, reasonable, and in the best 
interest of the parties, the Board, and the resolution of contract 
disputes. The following are examples of available techniques:
    (1) Mediation. The Board Neutral, as mediator, aids the parties in 
settling their case. The mediator engages in ex parte discussions with 
the parties and facilitates the transmission of settlement offers. 
Although not authorized to render a decision in the dispute, the 
mediator may discuss with the parties, on a confidential basis, the 
strengths and weaknesses of their positions. No judge who has 
participated in discussions about the mediation will participate in a 
Board decision of the case if the ADR is unsuccessful.
    (2) Neutral case evaluation. The parties agree to present to the 
Board Neutral information on which the Board Neutral bases a non-
binding, oral, advisory opinion. The manner in which the information is 
presented will vary from case to case depending upon the agreement of 
the parties. Presentations generally fall between two extremes, ranging 
from