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  <AMDDATE>Oct. 15, 2007</AMDDATE>
  <FMTR>
    <TITLEPG>
      <CODE>CODE OF FEDERAL REGULATIONS</CODE>
      <PRTPAGE P="1"/>
      <TITLENUM>48</TITLENUM>
      <PARTS>Chapter 1 (Parts 1 to 51)</PARTS>
      <REVISED>Revised as of October 1, 2007</REVISED>
      <SUBJECT>Federal Acquisition Regulations System</SUBJECT>
      <CONTAINS>Containing a codification of documents of general applicability and future effect</CONTAINS>
      <DATE>As of October 1, 2007</DATE>
      <ANCIL>With Ancillaries</ANCIL>
      <PUB>
        <P>Published by</P>
        <P>Office of the Federal Register</P>
        <P>National Archives and Records</P>
        <P>Administration</P>
      </PUB>
      <SPECED>A Special Edition of the Federal Register</SPECED>
    </TITLEPG>
    <BTITLE>
      <PRTPAGE P="?ii"/>
      <HD SOURCE="HED">U.S. GOVERNMENT OFFICIAL EDITION NOTICE</HD>
      <HD SOURCE="HED">Legal Status and Use of Seals and Logos</HD>
      <GPH DEEP="54" HTYPE="LEFT" SPAN="1">
        <GID>e:\seals\archives.ai</GID>
      </GPH>
      <P>The seal of the National Archives and Records Administration (NARA) authenticates the Code of Federal Regulations (CFR) as the official codification of Federal regulations established under the Federal Register Act. Under the provisions of 44 U.S.C. 1507, the contents of the CFR, a special edition of the Federal Register, shall be judicially noticed. The CFR is prima facie evidence of the original documents published in the Federal Register (44 U.S.C. 1510).</P>
      <P>It is prohibited to use NARA's official seal and the stylized Code of Federal Regulations logo on any republication of this material without the express, written permission of the Archivist of the United States or the Archivist's designee. Any person using NARA's official seals and logos in a manner inconsistent with the provisions of 36 CFR part 1200 is subject to the penalties specified in 18 U.S.C. 506, 701, and 1017.</P>
      <HD SOURCE="HED">Use of ISBN Prefix</HD>
      <P>This is the Official U.S. Government edition of this publication and is herein identified to certify its authenticity. Use of the 0-16 ISBN prefix is for U.S. Government Printing Office Official Editions only. The Superintendent of Documents of the U.S. Government Printing Office requests that any reprinted edition clearly be labeled as a copy of the authentic work with a new ISBN.</P>
      <GPO/>
      <GPH DEEP="18" HTYPE="LEFT" SPAN="1">
        <GID>e:\seals\gpologo.eps</GID>
      </GPH>
      <P>U . S . G O V E R N M E N T P R I N T I N G O F F I C E</P>
      <P>U.S. Superintendent of Documents • Washington, DC 20402-0001</P>
      <P>http://bookstore.gpo.gov</P>
      <P>Phone: toll-free (866) 512-1800; DC area (202) 512-1800</P>
    </BTITLE>
    <TOC>
      <PRTPAGE P="iii"/>
      <HD SOURCE="HED">Table of Contents</HD>
      <PGHD>Page</PGHD>
      <EXPL>
        <SUBJECT>Explanation</SUBJECT>
        <PG>v</PG>
      </EXPL>
      <TITLENO>
        <HD SOURCE="HED">Title 48:</HD>
        <CHAPTI>
          <SUBJECT>Chapter 1—Federal Acquisition Regulation</SUBJECT>
          <PG>3</PG>
        </CHAPTI>
      </TITLENO>
      <FAIDS>
        <HD SOURCE="HED">Finding Aids:</HD>
        <SUBJECT>Table of CFR Titles and Chapters</SUBJECT>
        <PG>1041</PG>
        <SUBJECT>Alphabetical List of Agencies Appearing in the CFR</SUBJECT>
        <PG>1059</PG>
        <SUBJECT>List of CFR Sections Affected</SUBJECT>
        <PG>1069</PG>
      </FAIDS>
    </TOC>
    <CITE>
      <PRTPAGE P="iv"/>
      <P>Cite this Code:<E T="01">CFR</E>
      </P>

      <CITEP>To cite the regulations in this volume use title, part and section number. Thus, <E T="01">48 CFR 1.000</E> refers to title 48, part 1, section 000.</CITEP>
    </CITE>
    <EXPLA>
      <PRTPAGE P="v"/>
      <HD SOURCE="HED">Explanation</HD>
      <P>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.</P>
      <P>Each volume of the Code is revised at least once each calendar year and issued on a quarterly basis approximately as follows:</P>
      <IPAR>
        <P SOURCE="P1">Title 1 through Title 16</P>
        <STUB>as of January 1</STUB>
        <P SOURCE="P1">Title 17 through Title 27</P>
        <STUB>as of April 1</STUB>
        <P SOURCE="P1">Title 28 through Title 41</P>
        <STUB>as of July 1</STUB>
        <P SOURCE="P1">Title 42 through Title 50</P>
        <STUB>as of October 1</STUB>
      </IPAR>
      <P>The appropriate revision date is printed on the cover of each volume.</P>
      <SIDEHED>
        <HD SOURCE="HED">LEGAL STATUS</HD>
        <P>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).</P>
      </SIDEHED>
      <SIDEHED>
        <HD SOURCE="HED">HOW TO USE THE CODE OF FEDERAL REGULATIONS</HD>
        <P>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.</P>
        <P>To determine whether a Code volume has been amended since its revision date (in this case, October 1, 2007), 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.</P>
      </SIDEHED>
      <SIDEHED>
        <HD SOURCE="HED">EFFECTIVE AND EXPIRATION DATES</HD>
        <P>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.</P>
      </SIDEHED>
      <SIDEHED>
        <HD SOURCE="HED">OMB CONTROL NUMBERS</HD>

        <P>The Paperwork Reduction Act of 1980 (Pub. L. 96-511) requires Federal agencies to display an OMB control number with their information collection request. <PRTPAGE P="vi"/>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.</P>
      </SIDEHED>
      <SIDEHED>
        <HD SOURCE="HED">OBSOLETE PROVISIONS</HD>
        <P>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.</P>
      </SIDEHED>
      <SIDEHED>
        <HD SOURCE="HED">CFR INDEXES AND TABULAR GUIDES</HD>

        <P>A subject index to the Code of Federal Regulations is contained in a separate volume, revised annually as of January 1, entitled CFR <E T="04">Index and Finding Aids.</E> 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.</P>
        <P>An index to the text of “Title 3—The President” is carried within that volume.</P>
        <P>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.</P>
        <P>A List of CFR Sections Affected (LSA) is published monthly, keyed to the revision dates of the 50 CFR titles.</P>
      </SIDEHED>
      <SIDEHED>
        <HD SOURCE="HED">REPUBLICATION OF MATERIAL</HD>
        <P>There are no restrictions on the republication of textual material appearing in the Code of Federal Regulations.</P>
      </SIDEHED>
      <SIDEHED>
        <HD SOURCE="HED">INQUIRIES</HD>
        <P>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.</P>
        <P>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.</P>
      </SIDEHED>
      <SIDEHED>
        <HD SOURCE="HED">SALES</HD>
        <P>The Government Printing Office (GPO) processes all sales and distribution of the CFR. For payment by credit card, call toll-free, 866-512-1800, or DC area, 202-512-1800, M-F 8 a.m. to 4 p.m. e.s.t. or fax your order to 202-512-2250, 24 hours a day. For payment by check, write to: US Government Printing Office-New Orders, P.O. Box 979050, St. Louis, MO 63197-9000. For GPO Customer Service call 202-512-1803.</P>
      </SIDEHED>
      <SIDEHED>
        <HD SOURCE="HED">ELECTRONIC SERVICES</HD>

        <P>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 <E T="03">www.gpoaccess.gov/nara</E> (“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, <E T="03">gpoaccess@gpo.gov.</E>
          <PRTPAGE P="vii"/>
        </P>

        <P>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 <E T="03">www.archives.gov/federal-register.</E> The NARA site also contains links to GPO Access.</P>
      </SIDEHED>
      <SIG>
        <NAME>Raymond A. Mosley,</NAME>
        <POSITION>Director,</POSITION>
        <OFFICE>Office of the Federal Register.</OFFICE>
      </SIG>
      <DATE>October 1, 2007.</DATE>
    </EXPLA>
    <THISTITL>
      <PRTPAGE P="ix"/>
      <HD SOURCE="HED">THIS TITLE</HD>
      <P>Title 48—<E T="04">Federal Acquisition Regulations System</E> 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, 2007.</P>

      <P>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 <E T="03">implementing</E> 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 <E T="03">supplementing</E> the Federal acquisition regulations.</P>
      <P>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).</P>
      <P>The first volume, containing chapter 1 (parts 1 to 51), includes an index to the Federal acquisition regulations.</P>
      <P>For this volume, Elmer Barksdale was Chief Editor. The Code of Federal Regulations publication program is under the direction of Michael L. White, assisted by Ann Worley.</P>
    </THISTITL>
  </FMTR>
  <TITLE>
    <LRH>48 CFR Ch. 1 (10-1-07 Edition)</LRH>
    <RRH>Federal Acquisition Regulation</RRH>
    <CFRTITLE>
      <TITLEHD>
        <PRTPAGE P="1"/>
        <HD SOURCE="HED">Title 48—Federal Acquisition Regulations System</HD>
        <P>(This book contains chapter 1, parts 1 to 51)</P>
      </TITLEHD>
      <CFRTOC>
        <PTHD>Part</PTHD>
        <CHAPTI>
          <SUBJECT>
            <E T="04">chapter 1</E>—Federal Acquisition Regulation</SUBJECT>
          <PG>1</PG>
        </CHAPTI>
      </CFRTOC>
    </CFRTITLE>
    <CHAPTER>
      <TOC>
        <TOCHD>
          <PRTPAGE P="3"/>
          <HD SOURCE="HED">CHAPTER 1—FEDERAL ACQUISITION REGULATION</HD>
        </TOCHD>
        <SUBCHAP>
          <HD SOURCE="HED">SUBCHAPTER A—GENERAL</HD>
        </SUBCHAP>
        <PTHD>Part</PTHD>
        <PGHD>Page</PGHD>
        <CHAPTI>
          <PT>1</PT>
          <SUBJECT>Federal Acquisition Regulations System</SUBJECT>
          <PG>5</PG>
          <PT>2</PT>
          <SUBJECT>Definitions of words and terms</SUBJECT>
          <PG>21</PG>
          <PT>3</PT>
          <SUBJECT>Improper business practices and personal conflicts of interest</SUBJECT>
          <PG>41</PG>
          <PT>4</PT>
          <SUBJECT>Administrative matters</SUBJECT>
          <PG>64</PG>
        </CHAPTI>
        <SUBCHAP>
          <HD SOURCE="HED">SUBCHAPTER B—ACQUISITION PLANNING</HD>
        </SUBCHAP>
        <CHAPTI>
          <PT>5</PT>
          <SUBJECT>Publicizing contract actions</SUBJECT>
          <PG>86</PG>
          <PT>6</PT>
          <SUBJECT>Competition requirements</SUBJECT>
          <PG>98</PG>
          <PT>7</PT>
          <SUBJECT>Acquisition planning</SUBJECT>
          <PG>110</PG>
          <PT>8</PT>
          <SUBJECT>Required sources of supplies and services</SUBJECT>
          <PG>123</PG>
          <PT>9</PT>
          <SUBJECT>Contractor qualifications</SUBJECT>
          <PG>146</PG>
          <PT>10</PT>
          <SUBJECT>Market research</SUBJECT>
          <PG>178</PG>
          <PT>11</PT>
          <SUBJECT>Describing agency needs</SUBJECT>
          <PG>180</PG>
          <PT>12</PT>
          <SUBJECT>Acquisition of commercial items</SUBJECT>
          <PG>194</PG>
        </CHAPTI>
        <SUBCHAP>
          <HD SOURCE="HED">SUBCHAPTER C—CONTRACTING METHODS AND CONTRACT TYPES</HD>
        </SUBCHAP>
        <CHAPTI>
          <PT>13</PT>
          <SUBJECT>Simplified acquisition procedures</SUBJECT>
          <PG>209</PG>
          <PT>14</PT>
          <SUBJECT>Sealed bidding</SUBJECT>
          <PG>227</PG>
          <PT>15</PT>
          <SUBJECT>Contracting by negotiation</SUBJECT>
          <PG>254</PG>
          <PT>16</PT>
          <SUBJECT>Types of contracts</SUBJECT>
          <PG>305</PG>
          <PT>17</PT>
          <SUBJECT>Special contracting methods</SUBJECT>
          <PG>332</PG>
          <PT>18</PT>
          <SUBJECT>Emergency acquisitions</SUBJECT>
          <PG>346</PG>
        </CHAPTI>
        <SUBCHAP>
          <HD SOURCE="HED">SUBCHAPTER D—SOCIOECONOMIC PROGRAMS</HD>
        </SUBCHAP>
        <CHAPTI>
          <PT>19</PT>
          <SUBJECT>Small business programs</SUBJECT>
          <PG>351</PG>
          <PT>20-21</PT>
          <RESERVED>[Reserved]</RESERVED>
          <PT>22</PT>
          <SUBJECT>Application of labor laws to Government acquisitions</SUBJECT>
          <PG>413</PG>
          <PT>23</PT>
          <SUBJECT>Environment, energy and water efficiency, renewable energy technologies, occupational safety, and drug-free workplace</SUBJECT>
          <PG>473</PG>
          <PT>24</PT>
          <SUBJECT>Protection of privacy and freedom of information</SUBJECT>
          <PG>485<PRTPAGE P="4"/>
          </PG>
          <PT>25</PT>
          <SUBJECT>Foreign acquisition</SUBJECT>
          <PG>487</PG>
          <PT>26</PT>
          <SUBJECT>Other socioeconomic programs</SUBJECT>
          <PG>510</PG>
        </CHAPTI>
        <SUBCHAP>
          <HD SOURCE="HED">SUBCHAPTER E—GENERAL CONTRACTING REQUIREMENTS</HD>
        </SUBCHAP>
        <CHAPTI>
          <PT>27</PT>
          <SUBJECT>Patents, data, and copyrights</SUBJECT>
          <PG>514</PG>
          <PT>28</PT>
          <SUBJECT>Bonds and insurance</SUBJECT>
          <PG>554</PG>
          <PT>29</PT>
          <SUBJECT>Taxes</SUBJECT>
          <PG>575</PG>
          <PT>30</PT>
          <SUBJECT>Cost accounting standards administration</SUBJECT>
          <PG>581</PG>
          <PT>31</PT>
          <SUBJECT>Contract cost principles and procedures</SUBJECT>
          <PG>596</PG>
          <PT>32</PT>
          <SUBJECT>Contract financing</SUBJECT>
          <PG>646</PG>
          <PT>33</PT>
          <SUBJECT>Protests, disputes, and appeals</SUBJECT>
          <PG>713</PG>
        </CHAPTI>
        <SUBCHAP>
          <HD SOURCE="HED">SUBCHAPTER F—SPECIAL CATEGORIES OF CONTRACTING</HD>
        </SUBCHAP>
        <CHAPTI>
          <PT>34</PT>
          <SUBJECT>Major system acquisition</SUBJECT>
          <PG>726</PG>
          <PT>35</PT>
          <SUBJECT>Research and development contracting</SUBJECT>
          <PG>730</PG>
          <PT>36</PT>
          <SUBJECT>Construction and architect-engineer contracts</SUBJECT>
          <PG>748</PG>
          <PT>37</PT>
          <SUBJECT>Service contracting</SUBJECT>
          <PG>760</PG>
          <PT>38</PT>
          <SUBJECT>Federal supply schedule contracting</SUBJECT>
          <PG>771</PG>
          <PT>39</PT>
          <SUBJECT>Acquisition of information technology</SUBJECT>
          <PG>773</PG>
          <PT>40</PT>
          <RESERVED>[Reserved]</RESERVED>
          <PT>41</PT>
          <SUBJECT>Acquisition of utility services</SUBJECT>
          <PG>777</PG>
        </CHAPTI>
        <SUBCHAP>
          <HD SOURCE="HED">SUBCHAPTER G—CONTRACT MANAGEMENT</HD>
        </SUBCHAP>
        <CHAPTI>
          <PT>42</PT>
          <SUBJECT>Contract administration and audit services</SUBJECT>
          <PG>787</PG>
          <PT>43</PT>
          <SUBJECT>Contract modifications</SUBJECT>
          <PG>818</PG>
          <PT>44</PT>
          <SUBJECT>Subcontracting policies and procedures</SUBJECT>
          <PG>823</PG>
          <PT>45</PT>
          <SUBJECT>Government property</SUBJECT>
          <PG>830</PG>
          <PT>46</PT>
          <SUBJECT>Quality assurance</SUBJECT>
          <PG>840</PG>
          <PT>47</PT>
          <SUBJECT>Transportation</SUBJECT>
          <PG>858</PG>
          <PT>48</PT>
          <SUBJECT>Value engineering</SUBJECT>
          <PG>895</PG>
          <PT>49</PT>
          <SUBJECT>Termination of contracts</SUBJECT>
          <PG>903</PG>
          <PT>50</PT>
          <SUBJECT>Extraordinary contractual actions</SUBJECT>
          <PG>944</PG>
          <PT>51</PT>
          <SUBJECT>Use of Government sources by contractors</SUBJECT>
          <PG>953</PG>
          <PT/>
          <SUBJECT>Federal Acquisition Regulation (FAR) Index</SUBJECT>
          <PG>959</PG>
        </CHAPTI>
      </TOC>
      <SUBCHAP TYPE="N">
        <PRTPAGE P="5"/>
        <HD SOURCE="HED">SUBCHAPTER A—GENERAL</HD>
        <PART>
          <EAR>Pt. 1</EAR>
          <HD SOURCE="HED">PART 1—FEDERAL ACQUISITION REGULATIONS SYSTEM</HD>
          <CONTENTS>
            <SECHD>Sec.</SECHD>
            <SECTNO>1.000</SECTNO>
            <SUBJECT>Scope of part.</SUBJECT>
            <SUBPART>
              <HD SOURCE="HED">Subpart 1.1—Purpose, Authority, Issuance</HD>
              <SECTNO>1.101</SECTNO>
              <SUBJECT>Purpose.</SUBJECT>
              <SECTNO>1.102</SECTNO>
              <SUBJECT>Statement of guiding principles for the Federal Acquisition System.</SUBJECT>
              <SECTNO>1.102-1</SECTNO>
              <SUBJECT>Discussion.</SUBJECT>
              <SECTNO>1.102-2</SECTNO>
              <SUBJECT>Performance standards.</SUBJECT>
              <SECTNO>1.102-3</SECTNO>
              <SUBJECT>Acquisition team.</SUBJECT>
              <SECTNO>1.102-4</SECTNO>
              <SUBJECT>Role of the acquisition team.</SUBJECT>
              <SECTNO>1.103</SECTNO>
              <SUBJECT>Authority.</SUBJECT>
              <SECTNO>1.104</SECTNO>
              <SUBJECT>Applicability.</SUBJECT>
              <SECTNO>1.105</SECTNO>
              <SUBJECT>Issuance.</SUBJECT>
              <SECTNO>1.105-1</SECTNO>
              <SUBJECT>Publication and code arrangement.</SUBJECT>
              <SECTNO>1.105-2</SECTNO>
              <SUBJECT>Arrangement of regulations.</SUBJECT>
              <SECTNO>1.105-3</SECTNO>
              <SUBJECT>Copies.</SUBJECT>
              <SECTNO>1.106</SECTNO>
              <SUBJECT>OMB approval under the Paperwork Reduction Act.</SUBJECT>
              <SECTNO>1.107</SECTNO>
              <SUBJECT>Certifications.</SUBJECT>
              <SECTNO>1.108</SECTNO>
              <SUBJECT>FAR conventions.</SUBJECT>
              <SECTNO>1.109</SECTNO>
              <SUBJECT>Statutory acquisition-related dollar thresholds—adjustment for inflation.</SUBJECT>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart 1.2—Administration</HD>
              <SECTNO>1.201</SECTNO>
              <SUBJECT>Maintenance of the FAR.</SUBJECT>
              <SECTNO>1.201-1</SECTNO>
              <SUBJECT>The two councils.</SUBJECT>
              <SECTNO>1.201-2</SECTNO>
              <SUBJECT>FAR Secretariat.</SUBJECT>
              <SECTNO>1.202</SECTNO>
              <SUBJECT>Agency compliance with the FAR.</SUBJECT>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart 1.3—Agency Acquisition Regulations</HD>
              <SECTNO>1.301</SECTNO>
              <SUBJECT>Policy.</SUBJECT>
              <SECTNO>1.302</SECTNO>
              <SUBJECT>Limitations.</SUBJECT>
              <SECTNO>1.303</SECTNO>
              <SUBJECT>Publication and codification.</SUBJECT>
              <SECTNO>1.304</SECTNO>
              <SUBJECT>Agency control and compliance procedures.</SUBJECT>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart 1.4—Deviations from the FAR</HD>
              <SECTNO>1.400</SECTNO>
              <SUBJECT>Scope of subpart.</SUBJECT>
              <SECTNO>1.401</SECTNO>
              <SUBJECT>Definition.</SUBJECT>
              <SECTNO>1.402</SECTNO>
              <SUBJECT>Policy.</SUBJECT>
              <SECTNO>1.403</SECTNO>
              <SUBJECT>Individual deviations.</SUBJECT>
              <SECTNO>1.404</SECTNO>
              <SUBJECT>Class deviations.</SUBJECT>
              <SECTNO>1.405</SECTNO>
              <SUBJECT>Deviations pertaining to treaties and executive agreements.</SUBJECT>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart 1.5—Agency and Public Participation</HD>
              <SECTNO>1.501</SECTNO>
              <SUBJECT>Solicitation of agency and public views.</SUBJECT>
              <SECTNO>1.501-1</SECTNO>
              <SUBJECT>Definition.</SUBJECT>
              <SECTNO>1.501-2</SECTNO>
              <SUBJECT>Opportunity for public comments.</SUBJECT>
              <SECTNO>1.501-3</SECTNO>
              <SUBJECT>Exceptions.</SUBJECT>
              <SECTNO>1.502</SECTNO>
              <SUBJECT>Unsolicited proposed revisions.</SUBJECT>
              <SECTNO>1.503</SECTNO>
              <SUBJECT>Public meetings.</SUBJECT>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart 1.6—Career Development, Contracting Authority, and Responsibilities</HD>
              <SECTNO>1.601</SECTNO>
              <SUBJECT>General.</SUBJECT>
              <SECTNO>1.602</SECTNO>
              <SUBJECT>Contracting officers.</SUBJECT>
              <SECTNO>1.602-1</SECTNO>
              <SUBJECT>Authority.</SUBJECT>
              <SECTNO>1.602-2</SECTNO>
              <SUBJECT>Responsibilities.</SUBJECT>
              <SECTNO>1.602-3</SECTNO>
              <SUBJECT>Ratification of unauthorized commitments.</SUBJECT>
              <SECTNO>1.603</SECTNO>
              <SUBJECT>Selection, appointment, and termination of appointment.</SUBJECT>
              <SECTNO>1.603-1</SECTNO>
              <SUBJECT>General.</SUBJECT>
              <SECTNO>1.603-2</SECTNO>
              <SUBJECT>Selection.</SUBJECT>
              <SECTNO>1.603-3</SECTNO>
              <SUBJECT>Appointment.</SUBJECT>
              <SECTNO>1.603-4</SECTNO>
              <SUBJECT>Termination.</SUBJECT>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart 1.7—Determinations and Findings</HD>
              <SECTNO>1.700</SECTNO>
              <SUBJECT>Scope of subpart.</SUBJECT>
              <SECTNO>1.701</SECTNO>
              <SUBJECT>Definition.</SUBJECT>
              <SECTNO>1.702</SECTNO>
              <SUBJECT>General.</SUBJECT>
              <SECTNO>1.703</SECTNO>
              <SUBJECT>Class determinations and findings.</SUBJECT>
              <SECTNO>1.704</SECTNO>
              <SUBJECT>Content.</SUBJECT>
              <SECTNO>1.705</SECTNO>
              <SUBJECT>Supersession and modification.</SUBJECT>
              <SECTNO>1.706</SECTNO>
              <SUBJECT>Expiration.</SUBJECT>
              <SECTNO>1.707</SECTNO>
              <SUBJECT>Signatory authority.</SUBJECT>
            </SUBPART>
          </CONTENTS>
          <AUTH>
            <HD SOURCE="HED">Authority:</HD>
            <P>40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 42 U.S.C. 2473(c).</P>
          </AUTH>
          <SOURCE>
            <HD SOURCE="HED">Source:</HD>
            <P>48 FR 42103, Sept. 19, 1983, unless otherwise noted.</P>
          </SOURCE>
          <SECTION>
            <SECTNO>1.000</SECTNO>
            <SUBJECT>Scope of part.</SUBJECT>
            <P>This part sets forth basic policies and general information about the Federal Acquisition Regulations System including purpose, authority, applicability, issuance, arrangement, numbering, dissemination, implementation, supplementation, maintenance, administration, and deviation. Subparts 1.2, 1.3, and 1.4 prescribe administrative procedures for maintaining the FAR System.</P>
          </SECTION>
          <SUBPART>
            <HD SOURCE="HED">Subpart 1.1—Purpose, Authority, Issuance</HD>
            <SECTION>
              <SECTNO>1.101</SECTNO>
              <SUBJECT>Purpose.</SUBJECT>

              <P>The Federal Acquisition Regulations System is established for the codification and publication of uniform policies and procedures for acquisition by all executive agencies. The Federal Acquisition Regulations System consists of the Federal Acquisition Regulation (FAR), which is the primary document, <PRTPAGE P="6"/>and agency acquisition regulations that implement or supplement the FAR. The FAR System does not include internal agency guidance of the type described in 1.301(a)(2).</P>
              <CITA>[48 FR 42103, Sept. 19, 1983, as amended at 51 FR 27116, July 29, 1986]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>1.102</SECTNO>
              <SUBJECT>Statement of guiding principles for the Federal Acquisition System.</SUBJECT>
              <P>(a) The vision for the Federal Acquisition System is to deliver on a timely basis the best value product or service to the customer, while maintaining the public's trust and fulfilling public policy objectives. Participants in the acquisition process should work together as a team and should be empowered to make decisions within their area of responsibility.</P>
              <P>(b) The Federal Acquisition System will—</P>
              <P>(1) Satisfy the customer in terms of cost, quality, and timeliness of the delivered product or service by, for example—</P>
              <P>(i) Maximizing the use of commercial products and services;</P>
              <P>(ii) Using contractors who have a track record of successful past performance or who demonstrate a current superior ability to perform; and</P>
              <P>(iii) Promoting competition;</P>
              <P>(2) Minimize administrative operating costs;</P>
              <P>(3) Conduct business with integrity, fairness, and openness; and</P>
              <P>(4) Fulfill public policy objectives.</P>
              <P>(c) The Acquisition Team consists of all participants in Government acquisition including not only representatives of the technical, supply, and procurement communities but also the customers they serve, and the contractors who provide the products and services.</P>
              <P>(d) The role of each member of the Acquisition Team is to exercise personal initiative and sound business judgment in providing the best value product or service to meet the customer's needs. In exercising initiative, Government members of the Acquisition Team may assume if a specific strategy, practice, policy or procedure is in the best interests of the Government and is not addressed in the FAR nor prohibited by law (statute or case law), Executive order or other regulation, that the strategy, practice, policy or procedure is a permissible exercise of authority.</P>
              <CITA>[60 FR 34733, July 3, 1995]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>1.102-1</SECTNO>
              <SUBJECT>Discussion.</SUBJECT>
              <P>(a) <E T="03">Introduction.</E> The statement of Guiding Principles for the Federal Acquisition System (System) represents a concise statement designed to be user-friendly for all participants in Government acquisition. The following discussion of the principles is provided in order to illuminate the meaning of the terms and phrases used. The framework for the System includes the Guiding Principles for the System and the supporting policies and procedures in the FAR.</P>
              <P>(b) <E T="03">Vision.</E> All participants in the System are responsible for making acquisition decisions that deliver the best value product or service to the customer. Best value must be viewed from a broad perspective and is achieved by balancing the many competing interests in the System. The result is a system which works better and costs less.</P>
              <CITA>[60 FR 34733, July 3, 1995]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>1.102-2</SECTNO>
              <SUBJECT>Performance standards.</SUBJECT>
              <P>(a) <E T="03">Satisfy the customer in terms of cost, quality, and timeliness of the delivered product or service.</E> (1) The principal customers for the product or service provided by the System are the users and line managers, acting on behalf of the American taxpayer.</P>
              <P>(2) The System must be responsive and adaptive to customer needs, concerns, and feedback. Implementation of acquisition policies and procedures, as well as consideration of timeliness, quality and cost throughout the process, must take into account the perspective of the user of the product or service.</P>
              <P>(3) When selecting contractors to provide products or perform services the Government will use contractors who have a track record of successful past performance or who demonstrate a current superior ability to perform.</P>

              <P>(4) The Government must not hesitate to communicate with the commercial sector as early as possible in the <PRTPAGE P="7"/>acquisition cycle to help the Government determine the capabilities available in the commercial marketplace. The Government will maximize its use of commercial products and services in meeting Government requirements.</P>
              <P>(5) It is the policy of the System to promote competition in the acquisition process.</P>
              <P>(6) The System must perform in a timely, high quality, and cost-effective manner.</P>
              <P>(7) All members of the Team are required to employ planning as an integral part of the overall process of acquiring products or services. Although advance planning is required, each member of the Team must be flexible in order to accommodate changing or unforeseen mission needs. Planning is a tool for the accomplishment of tasks, and application of its discipline should be commensurate with the size and nature of a given task.</P>
              <P>(b) <E T="03">Minimize administrative operating costs.</E> (1) In order to ensure that maximum efficiency is obtained, rules, regulations, and policies should be promulgated only when their benefits clearly exceed the costs of their development, implementation, administration, and enforcement. This applies to internal administrative processes, including reviews, and to rules and procedures applied to the contractor community.</P>
              <P>(2) The System must provide uniformity where it contributes to efficiency or where fairness or predictability is essential. The System should also, however, encourage innovation, and local adaptation where uniformity is not essential.</P>
              <P>(c) <E T="03">Conduct business with integrity, fairness, and openness.</E> (1) An essential consideration in every aspect of the System is maintaining the public's trust. Not only must the System have integrity, but the actions of each member of the Team must reflect integrity, fairness, and openness. The foundation of integrity within the System is a competent, experienced, and well-trained, professional workforce. Accordingly each member of the Team is responsible and accountable for the wise use of public resources as well as acting in a manner which maintains the public's trust. Fairness and openness require open communication among team members, internal and external customers, and the public.</P>
              <P>(2) To achieve efficient operations, the System must shift its focus from “risk avoidance” to one of “risk management.” The cost to the taxpayer of attempting to eliminate all risk is prohibitive. The Executive Branch will accept and manage the risk associated with empowering local procurement officials to take independent action based on their professional judgment.</P>
              <P>(3) The Government shall exercise discretion, use sound business judgment, and comply with applicable laws and regulations in dealing with contractors and prospective contractors. All contractors and prospective contractors shall be treated fairly and impartially but need not be treated the same.</P>
              <P>(d) <E T="03">Fulfill public policy objectives.</E> The System must support the attainment of public policy goals adopted by the Congress and the President. In attaining these goals, and in its overalll operations, the process shall ensure the efficient use of public resources.</P>
              <CITA>[60 FR 34734, July 3, 1995, as amended at 62 FR 51229, Sept. 30, 1997]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>1.102-3</SECTNO>
              <SUBJECT>Acquisition team.</SUBJECT>
              <P>The purpose of defining the Federal Acquisition Team (Team) in the Guiding Principles is to ensure that participants in the System are identified—beginning with the customer and ending with the contractor of the product or service. By identifying the team members in this manner, teamwork, unity of purpose, and open communication among the members of the Team in sharing the vision and achieving the goal of the System are encouraged. Individual team members will participate in the acquisition process at the appropriate time.</P>
              <CITA>[60 FR 34734, July 3, 1995]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>1.102-4</SECTNO>
              <SUBJECT>Role of the acquisition team.</SUBJECT>

              <P>(a) Government members of the Team must be empowered to make acquisition decisions within their areas of responsibility, including selection, negotiation, and administration of contracts consistent with the Guiding <PRTPAGE P="8"/>Principles. In particular, the contracting officer must have the authority to the maximum extent practicable and consistent with law, to determine the application of rules, regulations, and policies, on a specific contract.</P>
              <P>(b) The authority to make decisions and the accountability for the decision made will be delegated to the lowest level within the System, consistent with law.</P>
              <P>(c) The Team must be prepared to perform the functions and duties assigned. The Government is committed to provide training, professional development, and other resources necessary for maintaining and improving the knowledge, skills, and abilities for all Government participants on the Team, both with regard to their particular area of responsibility within the System, and their respective role as a team member. The contractor community is encouraged to do likewise.</P>
              <P>(d) The System will foster cooperative relationships between the Government and its contractors consistent with its overriding responsibility to the taxpayers.</P>
              <P>(e) The FAR outlines procurement policies and procedures that are used by members of the Acquisition Team. If a policy or procedure, or a particular strategy or practice, is in the best interest of the Government and is not specifically addressed in the FAR, nor prohibited by law (statute or case law), Executive order or other regulation, Government members of the Team should not assume it is prohibited. Rather, absence of direction should be interpreted as permitting the Team to innovative and use sound business judgment that is otherwise consistent with law and within the limits of their authority. Contracting officers should take the lead in encouraging business process innovations and ensuring that business decisions are sound.</P>
              <CITA>[60 FR 34734, July 3, 1995, as amended at 62 FR 44804, Aug. 22, 1997]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>1.103</SECTNO>
              <SUBJECT>Authority.</SUBJECT>
              <P>(a) The development of the FAR System is in accordance with the requirements of the Office of Federal Procurement Policy Act of 1974 (Pub. L. 93-400), as amended by Pub. L. 96-83.</P>
              <P>(b) The FAR is prepared, issued, and maintained, and the FAR System is prescribed, jointly by the Secretary of Defense, the Administrator of General Services, and the Administrator, National Aeronautics and Space Administration, under their several statutory authorities.</P>
              <CITA>[48 FR 42103, Sept. 19, 1983, as amended at 51 FR 27116, July 29, 1986. Redesignated at 60 FR 34733, July 3, 1995, as amended at 65 FR 36014, June 6, 2000]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>1.104</SECTNO>
              <SUBJECT>Applicability.</SUBJECT>
              <P>The FAR applies to all acquisitions as defined in part 2 of the FAR, except where expressly excluded.</P>
              <CITA>[48 FR 42103, Sept. 19, 1983. Redesignated at 60 FR 34733, July 3, 1995]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>1.105</SECTNO>
              <SUBJECT>Issuance.</SUBJECT>
            </SECTION>
            <SECTION>
              <SECTNO>1.105-1</SECTNO>
              <SUBJECT>Publication and code arrangement.</SUBJECT>
              <P>(a) The FAR is published in (1) the daily issue of the Federal Register, (2) cumulated form in the Code of Federal Regulations (CFR), and (3) a separate loose-leaf edition.</P>
              <P>(b) The FAR is issued as Chapter 1 of Title 48, CFR. Subsequent chapters are reserved for agency acquisition regulations that implement or supplement the FAR (see subpart 1.3). The CFR Staff will assign chapter numbers to requesting agencies.</P>
              <P>(c) Each numbered unit or segment (e.g., part, subpart, section, etc.) of an agency acquisition regulation that is codified in the CFR shall begin with the chapter number. However, the chapter number assigned to the FAR will not be included in the numbered units or segments of the FAR.</P>
              <CITA>[48 FR 42103, Sept. 19, 1983. Redesignated at 60 FR 34733, July 3, 1995]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>1.105-2</SECTNO>
              <SUBJECT>Arrangement of regulations.</SUBJECT>
              <P>(a) <E T="03">General.</E> The FAR is divided into subchapters, parts (each of which covers a separate aspect of acquisition), subparts, sections, and subsections.</P>
              <P>(b) <E T="03">Numbering.</E> (1) The numbering system permits the discrete identification of every FAR paragraph. The digits to the left of the decimal point represent the part number. The numbers to the right of the decimal point and to the <PRTPAGE P="9"/>left of the dash, represent, in order, the subpart (one or two digits), and the section (two digits). The number to the right of the dash represents the subsection. Subdivisons may be used at the section and subsection level to identify individual paragraphs. The following example illustrates the make-up of a FAR number citation (note that subchapters are not used with citations):</P>
              <GPH DEEP="72" SPAN="1">
                <GID>EC03AP91.000</GID>
              </GPH>

              <P>(2) Subdivisions below the section or subsection level consist of parenthetical alpha numerics using the following sequence: (a)(1)(i)(A)(<E T="03">1</E>)(<E T="03">i</E>).</P>
              <P>(c) <E T="03">References and citations.</E> (1) Unless otherwise stated, cross-references indicate parts, subparts, sections, subsections, paragraphs, subparagraphs, or subdivisions of this regulation.</P>
              <P>(2) This regulation may be referred to as the Federal Acquisition Regulation or the FAR.</P>
              <P>(3) Using the FAR coverage at 9.106-4(d) as a typical illustration, reference to the—</P>
              <P>(i) Part would be “FAR Part 9” outside the FAR and “Part 9” within the FAR.</P>
              <P>(ii) Subpart would be “FAR Subpart 9.1” outside the FAR and “Subpart 9.1” within the FAR.</P>
              <P>(iii) Section would be “FAR 9.106” outside the FAR and “9.106” within the FAR.</P>
              <P>(iv) Subsection would be “FAR 9.106-4” outside the FAR and “9.106-4” within the FAR.</P>
              <P>(v) Paragraph would be “FAR 9.106-4(d)” outside the FAR and “9.106-4(d)” within the FAR.</P>
              <P>(4) Citations of authority (e.g., statutes or executive orders) in the FAR shall follow the Federal Register form guides.</P>
              <CITA>[48 FR 42103, Sept. 19, 1983. Redesignated at 60 FR 34733, July 3, 1995, as amended at 65 FR 36015, June 6, 2000]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>1.105-3</SECTNO>
              <SUBJECT>Copies.</SUBJECT>
              <P>Copies of the FAR in <E T="04">Federal Register,</E> loose-leaf, CD-ROM and CFR form may be purchased from the Superintendent of Documents, Government Printing Office (GPO), Washington, DC 20402.</P>
              <CITA>[48 FR 42103, Sept. 19, 1983. Redesignated at 60 FR 34733, July 3, 1995, as amended at 62 FR 40236, July 25, 1997]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>1.106</SECTNO>
              <SUBJECT>OMB approval under the Paperwork Reduction Act.</SUBJECT>
              <P>The Paperwork Reduction Act of 1980 (Pub. L. 96-511) imposes a requirement on Federal agencies to obtain approval from the Office of Management and Budget (OMB) before collecting information from 10 or more members of the public. The information collection and recordkeeping requirements contained in this regulation have been approved by the OMB. The following OMB control numbers apply:</P>
              <GPOTABLE CDEF="s100,10" COLS="2" OPTS="L2">
                <BOXHD>
                  <CHED H="1">FAR segment</CHED>
                  <CHED H="1">OMB control No.</CHED>
                </BOXHD>
                <ROW>
                  <ENT I="01">3.103</ENT>
                  <ENT>9000-0018</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">3.4</ENT>
                  <ENT>9000-0003</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">4.102</ENT>
                  <ENT>9000-0033</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">4.7</ENT>
                  <ENT>9000-0034</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">4.9</ENT>
                  <ENT>9000-0097</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">4.602</ENT>
                  <ENT>9000-0145</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">4.603</ENT>
                  <ENT>9000-0145</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">5.405</ENT>
                  <ENT>9000-0036</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">7.2</ENT>
                  <ENT>9000-0082</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">8.5</ENT>
                  <ENT>9000-0113</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">9.1</ENT>
                  <ENT>9000-0011</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">9.2</ENT>
                  <ENT>9000-0020</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">14.201</ENT>
                  <ENT>9000-0034</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">14.202-4</ENT>
                  <ENT>9000-0040</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">14.202-5</ENT>
                  <ENT>9000-0039</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">14.205</ENT>
                  <ENT>9000-0037</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">14.214</ENT>
                  <ENT>9000-0105</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">14.407</ENT>
                  <ENT>9000-0038</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">14.5</ENT>
                  <ENT>9000-0041</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">15.2</ENT>
                  <ENT>9000-0037</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">15.209</ENT>
                  <ENT>9000-0034</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">15.4</ENT>
                  <ENT>9000-0013</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">15.404-1(f)</ENT>
                  <ENT>9000-0080</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">15.407-2</ENT>
                  <ENT>9000-0078</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">15.408</ENT>
                  <ENT>9000-0115</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">19.7</ENT>
                  <ENT>9000-0006</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">19.12</ENT>
                  <ENT>9000-0150</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">22.103</ENT>
                  <ENT>9000-0065</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">22.8</ENT>
                  <ENT>1215-0072</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">22.11</ENT>
                  <ENT>9000-0066</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">22.13</ENT>
                  <ENT>1215-0072</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">22.14</ENT>
                  <ENT>1215-0072</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">23.9</ENT>
                  <ENT>9000-0139</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">23.602</ENT>
                  <ENT>9000-0107</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">27.3</ENT>
                  <ENT>9000-0095</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">27.4</ENT>
                  <ENT>9000-0090</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">28.1</ENT>
                  <ENT>9000-0045</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">28.2</ENT>
                  <ENT>9000-0045</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">29.304</ENT>
                  <ENT>9000-0059</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">30.6</ENT>
                  <ENT>9000-0129</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">31.205-46</ENT>
                  <ENT>9000-0079</ENT>
                </ROW>
                <ROW>
                  <PRTPAGE P="10"/>
                  <ENT I="01">31.205-46(a)(3)</ENT>
                  <ENT>9000-0088</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">32</ENT>
                  <ENT>9000-0035</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">32.000</ENT>
                  <ENT>9000-0138</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">32.1</ENT>
                  <ENT>9000-0070 and <LI>9000-0138</LI>
                  </ENT>
                </ROW>
                <ROW>
                  <ENT I="01">32.2</ENT>
                  <ENT>9000-0138</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">32.4</ENT>
                  <ENT>9000-0073</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">32.5</ENT>
                  <ENT>9000-0010 and <LI>9000-0138</LI>
                  </ENT>
                </ROW>
                <ROW>
                  <ENT I="01">32.7</ENT>
                  <ENT>9000-0074</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">32.9</ENT>
                  <ENT>9000-0102</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">32.10</ENT>
                  <ENT>9000-0138</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">33</ENT>
                  <ENT>9000-0035</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">34.1</ENT>
                  <ENT>9000-0132</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">36.213-2</ENT>
                  <ENT>9000-0037</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">36.603</ENT>
                  <ENT>9000-0157</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">41.202(c)</ENT>
                  <ENT>9000-0125</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">42.7</ENT>
                  <ENT>9000-0013</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">42.12</ENT>
                  <ENT>9000-0076</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">42.13</ENT>
                  <ENT>9000-0076</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">43.205(f)</ENT>
                  <ENT>9000-0026</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">45</ENT>
                  <ENT>9000-0075</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">46</ENT>
                  <ENT>9000-0077</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">47</ENT>
                  <ENT>9000-0061</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">47.208</ENT>
                  <ENT>9000-0056</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">48</ENT>
                  <ENT>9000-0027</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">49</ENT>
                  <ENT>9000-0028</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">50</ENT>
                  <ENT>9000-0029</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">51.1</ENT>
                  <ENT>9000-0031</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">51.2</ENT>
                  <ENT>9000-0032</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">52.203-2</ENT>
                  <ENT>9000-0018</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">52.203-7</ENT>
                  <ENT>9000-0091</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">52.204-3</ENT>
                  <ENT>9000-0097</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">52.204-6</ENT>
                  <ENT>9000-0145</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">52.204-7</ENT>
                  <ENT>9000-0159</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">52.207-3</ENT>
                  <ENT>9000-0114</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">52.212-1(k)</ENT>
                  <ENT>9000-0159</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">52.212-3</ENT>
                  <ENT>9000-0136</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">52.212-4(t)</ENT>
                  <ENT>9000-0159</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">52.214-14</ENT>
                  <ENT>9000-0047</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">52.214-15</ENT>
                  <ENT>9000-0044</ENT>
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                <ROW>
                  <ENT I="01">52.214-16</ENT>
                  <ENT>9000-0044</ENT>
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                <ROW>
                  <ENT I="01">52.214-21</ENT>
                  <ENT>9000-0039</ENT>
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                <ROW>
                  <ENT I="01">52.214-26</ENT>
                  <ENT>9000-0034</ENT>
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                <ROW>
                  <ENT I="01">52.214-28</ENT>
                  <ENT>9000-0013</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">52.215-1(c)(2)(iv)</ENT>
                  <ENT>9000-0048</ENT>
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                <ROW>
                  <ENT I="01">52.215-1(d)</ENT>
                  <ENT>9000-0044</ENT>
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                <ROW>
                  <ENT I="01">52.215-2</ENT>
                  <ENT>9000-0034</ENT>
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                <ROW>
                  <ENT I="01">52.215-6</ENT>
                  <ENT>9000-0047</ENT>
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                <ROW>
                  <ENT I="01">52.215-9</ENT>
                  <ENT>9000-0078</ENT>
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                <ROW>
                  <ENT I="01">52.215-12</ENT>
                  <ENT>9000-0013</ENT>
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                <ROW>
                  <ENT I="01">52.215-13</ENT>
                  <ENT>9000-0013</ENT>
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                <ROW>
                  <ENT I="01">52.215-14</ENT>
                  <ENT>9000-0080</ENT>
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                <ROW>
                  <ENT I="01">52.215-19</ENT>
                  <ENT>9000-0115</ENT>
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                <ROW>
                  <ENT I="01">52.215-20</ENT>
                  <ENT>9000-0013</ENT>
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                <ROW>
                  <ENT I="01">52.215-21</ENT>
                  <ENT>9000-0013</ENT>
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                <ROW>
                  <ENT I="01">52.216-2</ENT>
                  <ENT>9000-0068</ENT>
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                <ROW>
                  <ENT I="01">52.216-3</ENT>
                  <ENT>9000-0068</ENT>
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                <ROW>
                  <ENT I="01">52.216-4</ENT>
                  <ENT>9000-0068</ENT>
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                <ROW>
                  <ENT I="01">52.216-5</ENT>
                  <ENT>9000-0071</ENT>
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                <ROW>
                  <ENT I="01">52.216-6</ENT>
                  <ENT>9000-0071</ENT>
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                <ROW>
                  <ENT I="01">52.216-7</ENT>
                  <ENT>9000-0069</ENT>
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                <ROW>
                  <ENT I="01">52.216-10</ENT>
                  <ENT>9000-0067</ENT>
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                <ROW>
                  <ENT I="01">52.216-15</ENT>
                  <ENT>9000-0069</ENT>
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                <ROW>
                  <ENT I="01">52.216-16</ENT>
                  <ENT>9000-0067</ENT>
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                <ROW>
                  <ENT I="01">52.216-17</ENT>
                  <ENT>9000-0067</ENT>
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                <ROW>
                  <ENT I="01">52.219-9</ENT>
                  <ENT>9000-0006</ENT>
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                <ROW>
                  <ENT I="01">52.219-10</ENT>
                  <ENT>9000-0006</ENT>
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                <ROW>
                  <ENT I="01">52.219-19</ENT>
                  <ENT>9000-0100</ENT>
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                <ROW>
                  <ENT I="01">52.219-20</ENT>
                  <ENT>9000-0100</ENT>
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                <ROW>
                  <ENT I="01">52.219-21</ENT>
                  <ENT>9000-0100</ENT>
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                <ROW>
                  <ENT I="01">52.219-22</ENT>
                  <ENT>9000-0150</ENT>
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                <ROW>
                  <ENT I="01">52.219-23</ENT>
                  <ENT>9000-0150</ENT>
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                <ROW>
                  <ENT I="01">52.219-25</ENT>
                  <ENT>9000-0150</ENT>
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                <ROW>
                  <ENT I="01">52.222-2</ENT>
                  <ENT>9000-0065</ENT>
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                <ROW>
                  <ENT I="01">52.222-4</ENT>
                  <ENT>1215-0119</ENT>
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                <ROW>
                  <ENT I="01">52.222-6</ENT>
                  <ENT>1215-0140</ENT>
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                <ROW>
                  <ENT I="01">52.222-8</ENT>
                  <ENT>1215-0149 and <LI>1215-0017</LI>
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                <ROW>
                  <ENT I="01">52.222-11</ENT>
                  <ENT>9000-0014</ENT>
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                <ROW>
                  <ENT I="01">52.222-18</ENT>
                  <ENT>9000-0127</ENT>
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                <ROW>
                  <ENT I="01">52.222-21</ENT>
                  <ENT>1215-0072</ENT>
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                <ROW>
                  <ENT I="01">52.222-22</ENT>
                  <ENT>1215-0072</ENT>
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                <ROW>
                  <ENT I="01">52.222-23</ENT>
                  <ENT>1215-0072</ENT>
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                <ROW>
                  <ENT I="01">52.222-25</ENT>
                  <ENT>1215-0072</ENT>
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                <ROW>
                  <ENT I="01">52.222-26</ENT>
                  <ENT>1215-0072</ENT>
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                <ROW>
                  <ENT I="01">52.222-27</ENT>
                  <ENT>1215-0072</ENT>
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                <ROW>
                  <ENT I="01">52.222-32</ENT>
                  <ENT>9000-0154</ENT>
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                <ROW>
                  <ENT I="01">52.222-35</ENT>
                  <ENT>1215-0072</ENT>
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                <ROW>
                  <ENT I="01">52.222-36</ENT>
                  <ENT>1215-0072</ENT>
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                <ROW>
                  <ENT I="01">52.222-41</ENT>
                  <ENT>1215-0017 and <LI>1215-0150</LI>
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                <ROW>
                  <ENT I="01">52.222-46</ENT>
                  <ENT>9000-0066</ENT>
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                <ROW>
                  <ENT I="01">52.223-4</ENT>
                  <ENT>9000-0134</ENT>
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                <ROW>
                  <ENT I="01">52.223-5</ENT>
                  <ENT>9000-0147</ENT>
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                <ROW>
                  <ENT I="01">52.223-6(b)(5)</ENT>
                  <ENT>9000-0101</ENT>
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                <ROW>
                  <ENT I="01">52.223-9</ENT>
                  <ENT>9000-0134</ENT>
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                <ROW>
                  <ENT I="01">52.223-13</ENT>
                  <ENT>9000-0139</ENT>
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                <ROW>
                  <ENT I="01">52.223-14</ENT>
                  <ENT>9000-0139</ENT>
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                <ROW>
                  <ENT I="01">52.225-2</ENT>
                  <ENT>9000-0024</ENT>
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                <ROW>
                  <ENT I="01">52.225-4</ENT>
                  <ENT>9000-0130</ENT>
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                <ROW>
                  <ENT I="01">52.225-6</ENT>
                  <ENT>9000-0025</ENT>
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                <ROW>
                  <ENT I="01">52.225-8</ENT>
                  <ENT>9000-0022</ENT>
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                <ROW>
                  <ENT I="01">52.225-9</ENT>
                  <ENT>9000-0141</ENT>
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                <ROW>
                  <ENT I="01">52.225-11</ENT>
                  <ENT>9000-0141</ENT>
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                <ROW>
                  <ENT I="01">52.225-18</ENT>
                  <ENT>9000-0161</ENT>
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                <ROW>
                  <ENT I="01">52.227-14</ENT>
                  <ENT>9000-0090</ENT>
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                <ROW>
                  <ENT I="01">52.227-15</ENT>
                  <ENT>9000-0090</ENT>
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                <ROW>
                  <ENT I="01">52.227-16</ENT>
                  <ENT>9000-0090</ENT>
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                <ROW>
                  <ENT I="01">52.227-17</ENT>
                  <ENT>9000-0090</ENT>
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                <ROW>
                  <ENT I="01">52.227-18</ENT>
                  <ENT>9000-0090</ENT>
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                <ROW>
                  <ENT I="01">52.227-19</ENT>
                  <ENT>9000-0090</ENT>
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                <ROW>
                  <ENT I="01">52.227-20</ENT>
                  <ENT>9000-0090</ENT>
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                <ROW>
                  <ENT I="01">52.227-21</ENT>
                  <ENT>9000-0090</ENT>
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                <ROW>
                  <ENT I="01">52.227-22</ENT>
                  <ENT>9000-0090</ENT>
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                <ROW>
                  <ENT I="01">52.227-23</ENT>
                  <ENT>9000-0090</ENT>
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                  <ENT I="01">52.228-1</ENT>
                  <ENT>9000-0045</ENT>
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                  <ENT>9000-0045</ENT>
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                  <ENT I="01">52.228-12</ENT>
                  <ENT>9000-0135</ENT>
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                  <ENT I="01">52.228-13</ENT>
                  <ENT>9000-0045</ENT>
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                  <ENT I="01">52.228-15</ENT>
                  <ENT>9000-0045</ENT>
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                  <ENT I="01">52.228-16</ENT>
                  <ENT>9000-0045</ENT>
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                  <ENT>9000-0070</ENT>
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                  <ENT>9000-0070</ENT>
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                  <ENT>9000-0070</ENT>
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                  <ENT>9000-0070</ENT>
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                  <ENT>9000-0070</ENT>
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                  <ENT>9000-0070</ENT>
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                  <ENT I="01">52.232-8</ENT>
                  <ENT>9000-0070</ENT>
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                  <ENT I="01">52.232-9</ENT>
                  <ENT>9000-0070</ENT>
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                  <ENT I="01">52.232-10</ENT>
                  <ENT>9000-0070</ENT>
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                  <ENT>9000-0010</ENT>
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                  <ENT>9000-0010</ENT>
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                  <ENT>9000-0010</ENT>
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                  <ENT>9000-0074</ENT>
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                  <ENT>9000-0062</ENT>
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                  <ENT>9000-0064</ENT>
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                  <ENT>9000-0026</ENT>
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                  <ENT I="01">52.246-12</ENT>
                  <ENT>9000-0077</ENT>
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                  <ENT I="01">52.246-15</ENT>
                  <ENT>9000-0077</ENT>
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                  <ENT>9000-0053</ENT>
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                  <ENT>9000-0061</ENT>
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                  <ENT I="01">52.247-30</ENT>
                  <ENT>9000-0061</ENT>
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                  <ENT I="01">52.247-31</ENT>
                  <ENT>9000-0061</ENT>
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                  <ENT I="01">52.247-32</ENT>
                  <ENT>9000-0061</ENT>
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                  <ENT>9000-0061</ENT>
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                  <ENT>9000-0061</ENT>
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                  <ENT I="01">52.247-35</ENT>
                  <ENT>9000-0061</ENT>
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                  <ENT I="01">52.247-36</ENT>
                  <ENT>9000-0061</ENT>
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                  <ENT I="01">52.247-37</ENT>
                  <ENT>9000-0061</ENT>
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                  <ENT I="01">52.247-38</ENT>
                  <ENT>9000-0061</ENT>
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                  <ENT I="01">52.247-39</ENT>
                  <ENT>9000-0061</ENT>
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                  <ENT>9000-0061</ENT>
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                  <ENT I="01">52.247-41</ENT>
                  <ENT>9000-0061</ENT>
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                  <ENT I="01">52.247-42</ENT>
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                  <ENT>9000-0061</ENT>
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                  <ENT I="01">52.247-51</ENT>
                  <ENT>9000-0057</ENT>
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                  <ENT>9000-0055</ENT>
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                  <ENT>9000-0054</ENT>
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                  <ENT>9000-0056</ENT>
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                  <ENT>9000-0027</ENT>
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                <ROW>
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                  <ENT>9000-0027</ENT>
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                  <ENT>9000-0027</ENT>
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                  <ENT>9000-0028</ENT>
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                <ROW>
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                  <ENT>9000-0028</ENT>
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                  <ENT>9000-0028</ENT>
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                  <ENT>9000-0028</ENT>
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                  <ENT>9000-0028</ENT>
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                  <ENT>9000-0045</ENT>
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                <ROW>
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                <ROW>
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                  <ENT>9000-0045</ENT>
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                <ROW>
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                  <ENT>9000-0045</ENT>
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                <ROW>
                  <ENT I="01">SF 273</ENT>
                  <ENT>9000-0045</ENT>
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                <ROW>
                  <ENT I="01">SF 274</ENT>
                  <ENT>9000-0045</ENT>
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                <ROW>
                  <ENT I="01">SF 275</ENT>
                  <ENT>9000-0045</ENT>
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                <ROW>
                  <ENT I="01">SF 294</ENT>
                  <ENT>9000-0006</ENT>
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                <ROW>
                  <ENT I="01">SF 295</ENT>
                  <ENT>9000-0007</ENT>
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                <ROW>
                  <ENT I="01">SF 312</ENT>
                  <ENT>9000-0150</ENT>
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                <ROW>
                  <ENT I="01">SF 330</ENT>
                  <ENT>9000-0157</ENT>
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                <ROW>
                  <ENT I="01">SF 1403</ENT>
                  <ENT>9000-0011</ENT>
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                <ROW>
                  <ENT I="01">SF 1404</ENT>
                  <ENT>9000-0011</ENT>
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                <ROW>
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                  <ENT>9000-0011</ENT>
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                <ROW>
                  <ENT I="01">SF 1406</ENT>
                  <ENT>9000-0011</ENT>
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                <ROW>
                  <ENT I="01">SF 1407</ENT>
                  <ENT>9000-0011</ENT>
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                <ROW>
                  <ENT I="01">SF 1408</ENT>
                  <ENT>9000-0011</ENT>
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                <ROW>
                  <ENT I="01">SF 1413</ENT>
                  <ENT>9000-0014</ENT>
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                <ROW>
                  <ENT I="01">SF 1416</ENT>
                  <ENT>9000-0045</ENT>
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                <ROW>
                  <ENT I="01">SF 1418</ENT>
                  <ENT>9000-0045</ENT>
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                <ROW>
                  <ENT I="01">SF 1428</ENT>
                  <ENT>9000-0075</ENT>
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                <ROW>
                  <ENT I="01">SF 1429</ENT>
                  <ENT>9000-0075</ENT>
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                <ROW>
                  <ENT I="01">SF 1435</ENT>
                  <ENT>9000-0012</ENT>
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                <ROW>
                  <ENT I="01">SF 1436</ENT>
                  <ENT>9000-0012</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">SF 1437</ENT>
                  <ENT>9000-0012</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">SF 1438</ENT>
                  <ENT>9000-0012</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">SF 1439</ENT>
                  <ENT>9000-0012</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">SF 1440</ENT>
                  <ENT>9000-0012</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">SF 1443</ENT>
                  <ENT>9000-0010</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">SF 1444</ENT>
                  <ENT>9000-0089</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">SF 1445</ENT>
                  <ENT>9000-0089</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">SF 1446</ENT>
                  <ENT>9000-0089</ENT>
                </ROW>
              </GPOTABLE>
              <CITA>[59 FR 67065, Dec. 28, 1994. Redesignated at 60 FR 34733, 34736, July 3, 1995, as amended at 60 FR 42650, 42665, Aug. 16, 1995; 60 FR 48211, Sept. 18, 1995; 60 FR 49710, Sept. 26, 1995; 61 FR 18916, Apr. 29, 1996; 61 FR 39188, July 26, 1996; 61 FR 67410, 67430, Dec. 20, 1996; 61 FR 69287, Dec. 31, 1996; 62 FR 227, 235, 271, Jan. 2, 1997; 62 FR 44806, 44810, Aug. 22, 1997; 62 FR 51229, 51270, Sept. 30, 1997; 63 FR 9050, 9051, Feb. 23, 1998; 63 FR 35720, June 30, 1998; 63 FR 36121, July 1, 1998; 63 FR 58602, Oct. 30, 1998; 63 FR 70292, Dec. 18, 1998; 64 FR 10532, 10549, Mar. 4, 1999; 64 FR 32748, June 17, 1999; 64 FR 51850, Sept. 24, 1999; 64 FR 72416, 72417, Dec. 27, 1999; 65 FR 16286, Mar. 27, 2000; 66 FR 53480, Oct. 22, 2001; 67 FR 13050, Mar. 20, 2002; 68 FR 43856, July 24, 2003; 68 FR 56672, Oct. 1, 2003; 68 FR 69231, Dec. 11, 2003; 69 FR 59699, Oct. 5, 2004; 71 FR 202, Jan. 3, 2006; 72 FR 27383, May 15, 2007; 72 FR 46327, Aug. 17, 2007]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>1.107</SECTNO>
              <SUBJECT>Certifications.</SUBJECT>
              <P>In accordance with Section 29 of the Office of Federal Procurement Policy Act (41 U.S.C. 425), as amended by Section 4301 of the Clinger-Cohen Act of 1996 (Public Law 104-106), a new requirement for a certification by a contractor or offeror may not be included in this chapter unless—</P>
              <P>(a) The certification requirement is specifically imposed by statute; or</P>

              <P>(b) Written justification for such certification is provided to the Administrator for Federal Procurement Policy <PRTPAGE P="12"/>by the Federal Acquisition Regulatory Council, and the Administrator approves in writing the inclusion of such certification requirement.</P>
              <CITA>[62 FR 44813, Aug. 22, 1997]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>1.108</SECTNO>
              <SUBJECT>FAR conventions.</SUBJECT>
              <P>The following conventions provide guidance for interpreting the FAR:</P>
              <P>(a) <E T="03">Words and terms.</E> Definitions in Part 2 apply to the entire regulation unless specifically defined in another part, subpart, section, provision, or clause. Words or terms defined in a specific part, subpart, section, provision, or clause have that meaning when used in that part, subpart, section, provision, or clause. Undefined words retain their common dictionary meaning.</P>
              <P>(b) <E T="03">Delegation of authority.</E> Each authority is delegable unless specifically stated otherwise (see 1.102-4(b)).</P>
              <P>(c) <E T="03">Dollar thresholds.</E> Unless otherwise specified, a specific dollar threshold for the purpose of applicability is the final anticipated dollar value of the action, including the dollar value of all options. If the action establishes a maximum quantity of supplies or services to be acquired or establishes a ceiling price or establishes the final price to be based on future events, the final anticipated dollar value must be the highest final priced alternative to the Government, including the dollar value of all options.</P>
              <P>(d) <E T="03">Application of FAR changes to solicitations and contracts.</E> Unless otherwise specified—</P>
              <P>(1) FAR changes apply to solicitations issued on or after the effective date of the change;</P>
              <P>(2) Contracting officers may, at their discretion, include the FAR changes in solicitations issued before the effective date, provided award of the resulting contract(s) occurs on or after the effective date; and</P>
              <P>(3) Contracting officers may, at their discretion, include the changes in any existing contract with appropriate consideration.</P>
              <P>(e) <E T="03">Citations.</E> When the FAR cites a statute, Executive order, Office of Management and Budget circular, Office of Federal Procurement Policy policy letter, or relevant portion of the Code of Federal Regulations, the citation includes all applicable amendments, unless otherwise stated.</P>
              <P>(f) <E T="03">Imperative sentences.</E> When an imperative sentence directs action, the contracting officer is responsible for the action, unless another party is expressly cited.</P>
              <CITA>[65 FR 36015, June 6, 2000]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>1.109</SECTNO>
              <SUBJECT>Statutory acquisition-related dollar thresholds—adjustment for inflation.</SUBJECT>
              <P>(a) 41 U.S.C. 431a requires that the FAR Council periodically adjust all statutory acquisition-related dollar thresholds in the FAR for inflation, except as provided in paragraph (c) of this section. This adjustment is calculated every 5 years, starting in October 2005, using the Consumer Price Index (CPI) for all-urban consumers, and supersedes the applicability of any other provision of law that provides for the adjustment of such acquisition-related dollar thresholds.</P>
              <P>(b) The statute defines an acquisition-related dollar threshold as a dollar threshold that is specified in law as a factor in defining the scope of the applicability of a policy, procedure, requirement, or restriction provided in that law to the procurement of supplies or services by an executive agency, as determined by the FAR Council.</P>

              <P>(c) The statute does not permit escalation of acquisition-related dollar thresholds established by the Davis-Bacon Act (40 U.S.C. 3141 through 3144, 3146, and 3147), the Service Contract Act of 1965 (41 U.S.C. 351, <E T="03">et seq.</E>), or the United States Trade Representative pursuant to the authority of the Trade Agreements Act of 1979 (19 U.S.C. 2511 <E T="03">et seq)</E>.</P>

              <P>(d) A matrix showing calculation of the most recent escalation adjustments of statutory acquisition-related dollar thresholds is available via the Internet at <E T="03">http://acquisition.gov/far/facsframe.html</E>.</P>
              <CITA>[71 FR 57365, Sept. 28, 2006]</CITA>
            </SECTION>
          </SUBPART>
          <SUBPART>
            <PRTPAGE P="13"/>
            <HD SOURCE="HED">Subpart 1.2—Administration</HD>
            <SECTION>
              <SECTNO>1.201</SECTNO>
              <SUBJECT>Maintenance of the FAR.</SUBJECT>
            </SECTION>
            <SECTION>
              <SECTNO>1.201-1</SECTNO>
              <SUBJECT>The two councils.</SUBJECT>
              <P>(a) Subject to the authorities discussed in 1.103, revisions to the FAR will be prepared and issued through the coordinated action of two councils, the Defense Acquisition Regulations Council (DAR Council) and the Civilian Agency Acquisition Council (CAA Council). Members of these councils shall—</P>
              <P>(1) Represent their agencies on a full-time basis;</P>
              <P>(2) Be selected for their superior qualifications in terms of acquisition experience and demonstrated professional expertise; and</P>
              <P>(3) Be funded by their respective agencies.</P>
              <P>(b) The chairperson of the CAA Council shall be the representative of the Administrator of General Services. The other members of this council shall be one each representative from the (1) Departments of Agriculture, Commerce, Energy, Health and Human Services, Homeland Security, Interior, Labor, State, Transportation, and Treasury, and (2) Environmental Protection Agency, Social Security Administration, Small Business Administration, and Department of Veterans Affairs.</P>
              <P>(c) The Director of the DAR Council shall be the representative of the Secretary of Defense. The operation of the DAR Council will be as prescribed by the Secretary of Defense. Membership shall include representatives of the military Departments, the Defense Logistics Agency, and the National Aeronautics and Space Administration.</P>
              <P>(d) Responsibility for processing revisions to the FAR is apportioned by the two councils so that each council has cognizance over specified parts or subparts.</P>
              <P>(e) Each council shall be responsible for—</P>
              <P>(1) Agreeing on all revisions with the other council;</P>

              <P>(2) Submitting to the FAR Secretariat (see 1.201-2) the information required under paragraphs 1.501-2(b) and (e) for publication in the <E T="04">Federal Register</E> of a notice soliciting comments on a proposed revision to the FAR;</P>
              <P>(3) Considering all comments received in response to notice of proposed revisions;</P>
              <P>(4) Arranging for public meetings;</P>
              <P>(5) Preparing any final revision in the appropriate FAR format and language; and</P>

              <P>(6) Submitting any final revision to the FAR Secretariat for publication in the <E T="04">Federal Register</E> and printing for distribution.</P>
              <CITA>[48 FR 42103, Sept. 19, 1983, as amended at 50 FR 2269, Jan. 15, 1985; 50 FR 26903, June 28, 1985; 51 FR 2649, Jan. 17, 1986; 54 FR 29280, July 11, 1989; 62 FR 64940, Dec. 9, 1997; 63 FR 9069, Feb. 23, 1998; 65 FR 16286, Mar. 27, 2000; 68 FR 69258, Dec. 11, 2003]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>1.201-2</SECTNO>
              <SUBJECT>FAR Secretariat.</SUBJECT>
              <P>(a) The General Services Administration is responsible for establishing and operating the FAR Secretariat to print, publish, and distribute the FAR through the Code of Federal Regulations system (including a loose-leaf edition with periodic updates).</P>
              <P>(b) Additionally, the FAR Secretariat shall provide the two councils with centralized services for—</P>
              <P>(1) Keeping a synopsis of current FAR cases and their status;</P>
              <P>(2) Maintaining official files;</P>
              <P>(3) Assisting parties interested in reviewing the files on completed cases; and</P>
              <P>(4) Performing miscellaneous administrative tasks pertaining to the maintenance of the FAR.</P>
              <CITA>[48 FR 42103, Sept. 19, 1983, as amended at 62 FR 40236, July 25, 1997]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>1.202</SECTNO>
              <SUBJECT>Agency compliance with the FAR.</SUBJECT>
              <P>Agency compliance with the FAR (see 1.304) is the responsibility of the Secretary of Defense (for the military departments and defense agencies), the Administrator of General Services (for civilian agencies other than NASA), and the Administrator of NASA (for NASA activities).</P>
            </SECTION>
          </SUBPART>
          <SUBPART>
            <PRTPAGE P="14"/>
            <HD SOURCE="HED">Subpart 1.3—Agency Acquisition Regulations</HD>
            <SECTION>
              <SECTNO>1.301</SECTNO>
              <SUBJECT>Policy.</SUBJECT>
              <P>(a)(1) Subject to the authorities in paragraph (c) below and other statutory authority, an agency head may issue or authorize the issuance of agency acquisition regulations that implement or supplement the FAR and incorporate, together with the FAR, agency policies, procedures, contract clauses, solicitation provisions, and forms that govern the contracting process or otherwise control the relationship between the agency, including any of its suborganizations, and contractors or prospective contractors.</P>
              <P>(2) Subject to the authorities in (c) below and other statutory authority, an agency head may issue or authorize the issuance of internal agency guidance at any organizational level (e.g., designations and delegations of authority, assignments of responsibilities, work-flow procedures, and internal reporting requirements).</P>

              <P>(b) Agency heads shall establish procedures to ensure that agency acquisition regulations are published for comment in the <E T="04">Federal Register</E> in conformance with the procedures in subpart 1.5 and as required by section 22 of the Office of Federal Procurement Policy Act, as amended (41 U.S.C. 418b), and other applicable statutes, when they have a significant effect beyond the internal operating procedures of the agency or have a significant cost or administrative impact on contractors or offerors. However, publication is not required for issuances that merely implement or supplement higher level issuances that have previously undergone the public comment process, unless such implementation or supplementation results in an additional significant cost or administrative impact on contractors or offerors or effect beyond the internal operating procedures of the issuing organization. Issuances under 1.301(a)(2) need not be publicized for public comment.</P>

              <P>(c) When adopting acquisition regulations, agencies shall ensure that they comply with the Paperwork Reduction Act (44 U.S.C. 3501, <E T="03">et seq.</E>) as implemented in 5 CFR part 1320 (see 1.105) and the Regulatory Flexibility Act (5 U.S.C. 601, <E T="03">et seq.</E>). Normally, when a law requires publication of a proposed regulation, the Regulatory Flexibility Act applies and agencies must prepare written analyses or certifications as provided in the law.</P>
              <P>(d) Agency acquisition regulations implementing or supplementing the FAR are, for—</P>
              <P>(1) The military departments and defense agencies, issued subject to the authority of the Secretary of Defense;</P>
              <P>(2) NASA activities, issued subject to the authorities of the Administrator of NASA; and</P>
              <P>(3) The civilian agencies other than NASA, issued by the heads of those agencies subject to the overall authority of the Administrator of General Services or independent authority the agency may have.</P>
              <CITA>[48 FR 42103, Sept. 19, 1983, as amended at 50 FR 2269, Jan. 15, 1985; 54 FR 5054, Jan. 31, 1989]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>1.302</SECTNO>
              <SUBJECT>Limitations.</SUBJECT>
              <P>Agency acquisition regulations shall be limited to—</P>
              <P>(a) Those necessary to implement FAR policies and procedures within the agency; and</P>
              <P>(b) Additional policies, procedures, solicitation provisions, or contract clauses that supplement the FAR to satisfy the specific needs of the agency.</P>
            </SECTION>
            <SECTION>
              <SECTNO>1.303</SECTNO>
              <SUBJECT>Publication and codification.</SUBJECT>

              <P>(a) Agency-wide acquisition regulations shall be published in the <E T="04">Federal Register</E> as required by law, shall be codified under an assigned chapter in Title 48, Code of Federal Regulations, and shall parallel the FAR in format, arrangement, and numbering system (but see 1.104-1(c)). Coverage in an agency acquisition regulation that implements a specific part, subpart, section, or subsection of the FAR shall be numbered and titled to correspond to the appropriate FAR number and title. Supplementary material for which there is no counterpart in the FAR shall be codified using chapter, part, subpart, section, or subsection numbers of 70 and up (e.g., for the Department of Interior, whose assigned chapter number in Title 48 is 14, part 1470, subpart 1401.70, section 1401.370, or subsection 1401.301-70.)<PRTPAGE P="15"/>
              </P>

              <P>(b) Issuances under 1.301(a)(2) need not be published in the <E T="04">Federal Register</E>.</P>
              <CITA>[48 FR 42103, Sept. 19, 1983, as amended at 50 FR 2269, Jan. 15, 1985]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>1.304</SECTNO>
              <SUBJECT>Agency control and compliance procedures.</SUBJECT>
              <P>(a) Under the authorities of 1.301(d), agencies shall control and limit issuance of agency acquisition regulations and, in particular, local agency directives that restrain the flexibilities found in the FAR, and shall establish formal procedures for the review of these documents to assure compliance with this part 1.</P>
              <P>(b) Agency acquisition regulations shall not—</P>
              <P>(1) Unnecessarily repeat, paraphrase, or otherwise restate material contained in the FAR or higher-level agency acquisition regulations; or</P>
              <P>(2) Except as required by law or as provided in subpart 1.4, conflict or be inconsistent with FAR content.</P>
              <P>(c) Agencies shall evaluate all regulatory coverage in agency acquisition regulations to determine if it could apply to other agencies. Coverage that is not peculiar to one agency shall be recommended for inclusion in the FAR.</P>
              <CITA>[48 FR 42103, Sept. 19, 1983, as amended at 61 FR 39190, July 26, 1996; 65 FR 16286, Mar. 27, 2000]</CITA>
            </SECTION>
          </SUBPART>
          <SUBPART>
            <HD SOURCE="HED">Subpart 1.4—Deviations from the FAR</HD>
            <SECTION>
              <SECTNO>1.400</SECTNO>
              <SUBJECT>Scope of subpart.</SUBJECT>
              <P>This subpart prescribes the policies and procedures for authorizing deviations from the FAR. Exceptions pertaining to the use of forms prescribed by the FAR are covered in part 53 rather than in this subpart.</P>
            </SECTION>
            <SECTION>
              <SECTNO>1.401</SECTNO>
              <SUBJECT>Definition.</SUBJECT>
              <P>
                <E T="03">Deviation</E> means any one or combination of the following:</P>
              <P>(a) The issuance or use of a policy, procedure, solicitation provision (see definition in 2.101), contract clause (see definition in 2.101), method, or practice of conducting acquisition actions of any kind at any stage of the acquisition process that is inconsistent with the FAR.</P>
              <P>(b) The omission of any solicitation provision or contract clause when its prescription requires its use.</P>
              <P>(c) The use of any solicitation provision or contract clause with modified or alternate language that is not authorized by the FAR (see definition of “modification” in 52.101(a) and definition of “alternate” in 2.101(a)).</P>

              <P>(d) The use of a solicitation provision or contract clause prescribed by the FAR on a <E T="03">substantially as follows</E> or <E T="03">substantially the same as</E> basis (see definitions in 2.101 and 52.101(a)), if such use is inconsistent with the intent, principle, or substance of the prescription or related coverage on the subject matter in the FAR.</P>
              <P>(e) The authorization of lesser or greater limitations on the use of any solicitation provision, contract clause, policy, or procedure prescribed by the FAR.</P>
              <P>(f) The issuance of policies or procedures that govern the contracting process or otherwise control contracting relationships that are not incorporated into agency acquisition regulations in accordance with 1.301(a).</P>
              <CITA>[48 FR 42103, Sept. 19, 1983, as amended at 66 FR 2118, Jan. 10, 2001]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>1.402</SECTNO>
              <SUBJECT>Policy.</SUBJECT>

              <P>Unless precluded by law, executive order, or regulation, deviations from the FAR may be granted as specified in this subpart when necessary to meet the specific needs and requirements of each agency. The development and testing of new techniques and methods of acquisition should not be stifled simply because such action would require a FAR deviation. The fact that deviation authority is required should not, of itself, deter agencies in their development and testing of new techniques and acquisition methods. Refer to 31.101 for instructions concerning deviations pertaining to the subject matter of part 31, Contract Cost Principles and Procedures. Deviations are not authorized with respect to 30.201-3 and 30.201-4, or the requirements of the Cost Accounting Standards Board (CASB) rules and regulations (48 CFR Chapter 99 (FAR Appendix)). Refer to 30.201-5 for instructions concerning <PRTPAGE P="16"/>waivers pertaining to Cost Accounting Standards.</P>
              <CITA>[48 FR 42103, Sept. 19, 1983, as amended at 52 FR 35612, Sept. 22, 1987; 62 FR 64914, Dec. 9, 1997]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>1.403</SECTNO>
              <SUBJECT>Individual deviations.</SUBJECT>
              <P>Individual deviations affect only one contract action, and, unless 1.405(e) is applicable, may be authorized by the agency head. The contracting officer must document the justification and agency approval in the contract file.</P>
              <CITA>[67 FR 13053, Mar. 20, 2002]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>1.404</SECTNO>
              <SUBJECT>Class deviations.</SUBJECT>
              <P>Class deviations affect more than one contract action. When an agency knows that it will require a class deviation on a permanent basis, it should propose a FAR revision, if appropriate. Civilian agencies, other than NASA, must furnish a copy of each approved class deviation to the FAR Secretariat.</P>
              <P>(a) For civilian agencies except NASA, class deviations may be authorized by agency heads or their designees, unless 1.405(e) is applicable. Delegation of this authority shall not be made below the head of a contracting activity. Authorization of class deviations by agency officials is subject to the following limitations:</P>
              <P>(1) An agency official who may authorize a class deviation, before doing so, shall consult with the chairperson of the Civilian Agency Acquisition Council (CAA Council), unless that agency official determines that urgency precludes such consultation.</P>
              <P>(2) Recommended revisions to the FAR shall be transmitted to the FAR Secretariat by agency heads or their designees for authorizing class deviations.</P>
              <P>(b) For DOD, class deviations shall be controlled, processed, and approved in accordance with the Defense FAR Supplement.</P>
              <P>(c) For NASA, class deviations shall be controlled and approved by the Assistant Administrator for Procurement. Deviations shall be processed in accordance with agency regulations.</P>
              <CITA>[48 FR 42103, Sept. 19, 1983, as amended at 56 FR 15148, Apr. 15, 1991; 59 FR 11387, March 10, 1994; 61 FR 67411, Dec. 20, 1996; 67 FR 13053, 13068, Mar. 20, 2002]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>1.405</SECTNO>
              <SUBJECT>Deviations pertaining to treaties and executive agreements.</SUBJECT>
              <P>(a) <E T="03">Executive agreements,</E> as used in this section, means Government-to-Government agreements, including agreements with international organizations, to which the United States is a party.</P>
              <P>(b) Any deviation from the FAR required to comply with a treaty to which the United States is a party is authorized, unless the deviation would be inconsistent with FAR coverage based on a law enacted after the execution of the treaty.</P>
              <P>(c) Any deviation from the FAR required to comply with an executive agreement is authorized unless the deviation would be inconsistent with FAR coverage based on law.</P>
              <P>(d) For civilian agencies other than NASA, a copy of the text deviation authorized under paragraph (b) or (c) of this section shall be transmitted to the FAR Secretariat through a central agency control point.</P>
              <P>(e) For civilian agencies other than NASA, if a deviation required to comply with a treaty or an executive agreement is not authorized by paragraph (b) or (c) of this section, then the request for deviation shall be processed through the FAR Secretariat to the Civilian Agency Acquisition Council.</P>
              <CITA>[48 FR 42103, Sept. 19, 1983, as amended at 61 FR 67411, Dec. 20, 1996]</CITA>
            </SECTION>
          </SUBPART>
          <SUBPART>
            <HD SOURCE="HED">Subpart 1.5—Agency and Public Participation</HD>
            <SOURCE>
              <HD SOURCE="HED">Source:</HD>
              <P>50 FR 2269, Jan. 15, 1985, unless otherwise noted.</P>
            </SOURCE>
            <SECTION>
              <SECTNO>1.501</SECTNO>
              <SUBJECT>Solicitation of agency and public views.</SUBJECT>
            </SECTION>
            <SECTION>
              <SECTNO> 1.501-1</SECTNO>
              <SUBJECT>Definition.</SUBJECT>
              <P>
                <E T="03">Significant revisions,</E> as used in this subpart, means revisions that alter the substantive meaning of any coverage in the FAR System having a significant cost or administrative impact on contractors or offerors, or a significant effect beyond the internal operating procedures of the issuing agency. This expression, for example, does not include editorial, stylistic, or other revisions <PRTPAGE P="17"/>that have no impact on the basic meaning of the coverage being revised.</P>
            </SECTION>
            <SECTION>
              <SECTNO>1.501-2</SECTNO>
              <SUBJECT>Opportunity for public comments.</SUBJECT>
              <P>(a) Views of agencies and nongovernmental parties or organizations will be considered in formulating acquisition policies and procedures.</P>

              <P>(b) The opportunity to submit written comments on proposed significant revisions shall be provided by placing a notice in the <E T="04">Federal Register.</E> Each of these notices shall include—</P>
              <P>(1) The text of the revision or, if it is impracticable to publish the full text, a summary of the proposal;</P>
              <P>(2) The address and telephone number of the individual from whom copies of the revision, in full text, can be requested and to whom comments thereon should be addressed; and</P>
              <P>(3) When 1.501-3(b) is applicable, a statement that the revision is effective on a temporary basis pending completion of the public comment period.</P>
              <P>(c) A minimum of 30 days and, normally, at least 60 days will be given for the receipt of comments.</P>
            </SECTION>
            <SECTION>
              <SECTNO>1.501-3</SECTNO>
              <SUBJECT>Exceptions.</SUBJECT>
              <P>(a) Comments need not be solicited when the proposed coverage does not constitute a significant revision.</P>
              <P>(b) Advance comments need not be solicited when urgent and compelling circumstances make solicitation of comments impracticable prior to the effective date of the coverage, such as when a new statute must be implemented in a relatively short period of time. In such case, the coverage shall be issued on a temporary basis and shall provide for at least a 30 day public comment period.</P>
            </SECTION>
            <SECTION>
              <SECTNO>1.502</SECTNO>
              <SUBJECT>Unsolicited proposed revisions.</SUBJECT>
              <P>Consideration shall also be given to unsolicited recommendations for revisions that have been submitted in writing with sufficient data and rationale to permit their evaluation.</P>
            </SECTION>
            <SECTION>
              <SECTNO>1.503</SECTNO>
              <SUBJECT>Public meetings.</SUBJECT>
              <P>Public meetings may be appropriate when a decision to adopt, amend, or delete coverage is likely to benefit from significant additional views and discussion.</P>
            </SECTION>
          </SUBPART>
          <SUBPART>
            <HD SOURCE="HED">Subpart 1.6—Career Development, Contracting Authority, and Responsibilities</HD>
            <SECTION>
              <SECTNO>1.601</SECTNO>
              <SUBJECT>General.</SUBJECT>
              <P>(a) Unless specifically prohibited by another provision of law, authority and responsibility to contract for authorized supplies and services are vested in the agency head. The agency head may establish contracting activities and delegate broad authority to manage the agency's contracting functions to heads of such contracting activities. Contracts may be entered into and signed on behalf of the Government only by contracting officers. In some agencies, a relatively small number of high level officials are designated contracting officers solely by virtue of their positions. Contracting officers below the level of a head of a contracting activity shall be selected and appointed under 1.603.</P>
              <P>(b) Agency heads may mutually agree to—</P>
              <P>(1) Assign contracting functions and responsibilities from one agency to another; and</P>
              <P>(2) Create joint or combined offices to exercise acquisition functions and responsibilities.</P>
              <CITA>[60 FR 49721, Sept. 26, 1995]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>1.602</SECTNO>
              <SUBJECT>Contracting officers.</SUBJECT>
            </SECTION>
            <SECTION>
              <SECTNO>1.602-1</SECTNO>
              <SUBJECT>Authority.</SUBJECT>
              <P>(a) Contracting officers have authority to enter into, administer, or terminate contracts and make related determinations and findings. Contracting officers may bind the Government only to the extent of the authority delegated to them. Contracting officers shall receive from the appointing authority (see 1.603-1) clear instructions in writing regarding the limits of their authority. Information on the limits of the contracting officers' authority shall be readily available to the public and agency personnel.</P>
              <P>(b) No contract shall be entered into unless the contracting officer ensures that all requirements of law, executive orders, regulations, and all other applicable procedures, including clearances and approvals, have been met.</P>
            </SECTION>
            <SECTION>
              <PRTPAGE P="18"/>
              <SECTNO>1.602-2</SECTNO>
              <SUBJECT>Responsibilities.</SUBJECT>
              <P>Contracting officers are responsible for ensuring performance of all necessary actions for effective contracting, ensuring compliance with the terms of the contract, and safeguarding the interests of the United States in its contractual relationships. In order to perform these responsibilities, contracting officers should be allowed wide latitude to exercise business judgment. Contracting officers shall—</P>
              <P>(a) Ensure that the requirements of 1.602-1(b) have been met, and that sufficient funds are available for obligation;</P>
              <P>(b) Ensure that contractors receive impartial, fair, and equitable treatment; and</P>
              <P>(c) Request and consider the advice of specialists in audit, law, engineering, information security, transportation, and other fields, as appropriate.</P>
              <CITA>[48 FR 42103, Sept. 19, 1983, as amended at 70 FR 57451, Sept. 30, 2005]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>1.602-3</SECTNO>
              <SUBJECT>Ratification of unauthorized commitments.</SUBJECT>
              <P>(a) <E T="03">Definitions</E>.</P>
              <P>
                <E T="03">Ratification,</E> as used in this subsection, means the act of approving an unauthorized commitment by an official who has the authority to do so.</P>
              <P>
                <E T="03">Unauthorized commitment,</E> as used in this subsection, means an agreement that is not binding solely because the Government representative who made it lacked the authority to enter into that agreement on behalf of the Government.</P>
              <P>(b) <E T="03">Policy.</E> (1) Agencies should take positive action to preclude, to the maximum extent possible, the need for ratification actions. Although procedures are provided in this section for use in those cases where the ratification of an unauthorized commitment is necessary, these procedures may not be used in a manner that encourages such commitments being made by Government personnel.</P>
              <P>(2) Subject to the limitations in paragraph (c) of this subsection, the head of the contracting activity, unless a higher level official is designated by the agency, may ratify an unauthorized commitment.</P>
              <P>(3) The ratification authority in subparagraph (b)(2) of this subsection may be delegated in accordance with agency procedures, but in no case shall the authority be delegated below the level of chief of the contracting office.</P>
              <P>(4) Agencies should process unauthorized commitments using the ratification authority of this subsection instead of referring such actions to the Government Accountability Office for resolution. (See 1.602-3(d).)</P>
              <P>(5) Unauthorized commitments that would involve claims subject to resolution under the Contract Disputes Act of 1978 should be processed in accordance with subpart 33.2, Disputes and Appeals.</P>
              <P>(c) <E T="03">Limitations.</E> The authority in subparagraph (b)(2) of this subsection may be exercised only when—</P>
              <P>(1) 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;</P>
              <P>(2) The ratifying official has the authority to enter into a contractual commitment;</P>
              <P>(3) The resulting contract would otherwise have been proper if made by an appropriate contracting officer;</P>
              <P>(4) The contracting officer reviewing the unauthorized commitment determines the price to be fair and reasonable;</P>
              <P>(5) The contracting officer recommends payment and legal counsel concurs in the recommendation, unless agency procedures expressly do not require such concurrence;</P>
              <P>(6) Funds are available and were available at the time the unauthorized commitment was made; and</P>
              <P>(7) The ratification is in accordance with any other limitations prescribed under agency procedures.</P>
              <P>(d) <E T="03">Nonratifiable commitments.</E> Cases that are not ratifiable under this subsection may be subject to resolution as recommended by the Government Accountability Office under its claim procedure (GAO Policy and Procedures Manual for Guidance of Federal Agencies, Title 4, Chapter 2), or as authorized by FAR part 50. Legal advice should be obtained in these cases.</P>
              <CITA>[53 FR 3689, Feb. 8, 1988, as amended at 60 FR 48225, Sept. 18, 1995; 71 FR 57380, Sept. 28, 2006]</CITA>
            </SECTION>
            <SECTION>
              <PRTPAGE P="19"/>
              <SECTNO>1.603</SECTNO>
              <SUBJECT>Selection, appointment, and termination of appointment.</SUBJECT>
            </SECTION>
            <SECTION>
              <SECTNO>1.603-1</SECTNO>
              <SUBJECT>General.</SUBJECT>
              <P>Subsection 414(4) of title 41, United States Code, requires agency heads to establish and maintain a procurement career management program and a system for the selection, appointment, and termination of appointment of contracting officers. Agency heads or their designees may select and appoint contracting officers and terminate their appointments. These selections and appointments shall be consistent with Office of Federal Procurement Policy's (OFPP) standards for skill-based training in performing contracting and purchasing duties as published in OFPP Policy Letter No. 92-3, Procurement Professionalism Program Policy—Training for Contracting Personnel, June 24, 1992.</P>
              <CITA>[59 FR 67015, Dec. 28, 1994]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>1.603-2</SECTNO>
              <SUBJECT>Selection.</SUBJECT>
              <P>In selecting contracting officers, the appointing official shall consider the complexity and dollar value of the acquisitions to be assigned and the candidate's experience, training, education, business acumen, judgment, character, and reputation. Examples of selection criteria include—</P>
              <P>(a) Experience in Government contracting and administration, commercial purchasing, or related fields;</P>
              <P>(b) Education or special training in business administration, law, accounting, engineering, or related fields;</P>
              <P>(c) Knowledge of acquisition policies and procedures, including this and other applicable regulations;</P>
              <P>(d) Specialized knowledge in the particular assigned field of contracting; and</P>
              <P>(e) Satisfactory completion of acquisition training courses.</P>
            </SECTION>
            <SECTION>
              <SECTNO>1.603-3</SECTNO>
              <SUBJECT>Appointment.</SUBJECT>
              <P>(a) Contracting officers shall be appointed in writing on an SF 1402, Certificate of Appointment, which shall state any limitations on the scope of authority to be exercised, other than limitations contained in applicable law or regulation. Appointing officials shall maintain files containing copies of all appointments that have not been terminated.</P>
              <P>(b) Agency heads are encouraged to delegate micro-purchase authority to individuals who are employees of an executive agency or members of the Armed Forces of the United States who will be using the supplies or services being purchased. Individuals delegated this authority are not required to be appointed on an SF 1402, but shall be appointed in writing in accordance with agency procedures.</P>
              <CITA>[61 FR 39190, July 26, 1996]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>1.603-4</SECTNO>
              <SUBJECT>Termination.</SUBJECT>
              <P>Termination of a contracting officer appointment will be by letter, unless the Certificate of Appointment contains other provisions for automatic termination. Terminations may be for reasons such as reassignment, termination of employment, or unsatisfactory performance. No termination shall operate retroactively.</P>
            </SECTION>
          </SUBPART>
          <SUBPART>
            <HD SOURCE="HED">Subpart 1.7—Determinations and Findings</HD>
            <SOURCE>
              <HD SOURCE="HED">Source:</HD>
              <P>50 FR 1726, Jan. 11, 1985; 50 FR 52429, Dec. 23, 1985, unless otherwise noted.</P>
            </SOURCE>
            <SECTION>
              <SECTNO>1.700</SECTNO>
              <SUBJECT>Scope of subpart.</SUBJECT>
              <P>This subpart prescribes general policies and procedures for the use of determinations and findings (D&amp;F's). Requirements for specific types of D&amp;F's can be found with the appropriate subject matter.</P>
            </SECTION>
            <SECTION>
              <SECTNO>1.701</SECTNO>
              <SUBJECT>Definition.</SUBJECT>
              <P>
                <E T="03">Determination and Findings</E> (D&amp;F) means a special form of written approval by an authorized official that is required by statute or regulation as a prerequisite to taking certain contract actions. The <E T="03">determination</E> is a conclusion or decision supported by the <E T="03">findings.</E> The findings are statements of fact or rationale essential to support the determination and must cover each requirement of the statute or regulation.</P>
              <CITA>[50 FR 1726, Jan. 11, 1985 (interim rule), and 50 FR 52429, Dec. 23, 1985 (final rule), as amended at 67 FR 13053, Mar. 20, 2002]</CITA>
            </SECTION>
            <SECTION>
              <PRTPAGE P="20"/>
              <SECTNO>1.702</SECTNO>
              <SUBJECT>General.</SUBJECT>
              <P>(a) A D&amp;F shall ordinarily be for an individual contract action. Unless otherwise prohibited, class D&amp;F's may be executed for classes of contract action (see 1.703). The approval granted by a D&amp;F is restricted to the proposed contract action(s) reasonably described in that D&amp;F. D&amp;F's may provided for a reasonable degree of flexibility. Furthermore, in their application, reasonable variations in estimated quantities or prices are permitted, unless the D&amp;F specifies otherwise.</P>
              <P>(b) When an option is anticipated, the D&amp;F shall state the approximate quantity to be awarded initially and the extent of the increase to be permitted by the option.</P>
            </SECTION>
            <SECTION>
              <SECTNO>1.703</SECTNO>
              <SUBJECT>Class determinations and findings.</SUBJECT>
              <P>(a) A class D&amp;F provides authority for a class of contract actions. A class may consist of contract actions for the same or related supplies or services or other contract actions that require essentially identical justification.</P>
              <P>(b) The findings in a class D&amp;F shall fully support the proposed action either for the class as a whole or for each action. A class D&amp;F shall be for a specified period, with the expiration date stated in the document.</P>
              <P>(c) The contracting officer shall ensure that individual actions taken pursuant to the authority of a class D&amp;F are within the scope of the D&amp;F.</P>
              <CITA>[50 FR 1726, Jan. 11, 1985 (interim rule), and 50 FR 52429, Dec. 23, 1985 (final rule), as amended at 67 FR 13053, Mar. 20, 2002]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>1.704</SECTNO>
              <SUBJECT>Content.</SUBJECT>
              <P>Each D&amp;F shall set forth enough facts and circumstances to clearly and convincingly justify the specific determination made. As a minimum, each D&amp;F shall include, in the prescribed agency format, the following information:</P>

              <P>(a) Identification of the agency and of the contracting activity and specific identifications of the document as a <E T="03">Determination and Findings</E>.</P>
              <P>(b) Nature and/or description of the action being approved.</P>
              <P>(c) Citation of the appropriate statute and/or regulation upon which the D&amp;F is based.</P>
              <P>(d) Findings that detail the particular circumstances, facts, or reasoning essential to support the determination. Necessary supporting documentation shall be obtained from appropriate requirements and technical personnel.</P>
              <P>(e) A determination, based on the findings, that the proposed action is justified under the applicable statute or regulation.</P>
              <P>(f) Expiration date of the D&amp;F, if required (see 1.706(b)).</P>
              <P>(g) The signature of the official authorized to sign the D&amp;F (see 1.706) and the date signed.</P>
            </SECTION>
            <SECTION>
              <SECTNO>1.705</SECTNO>
              <SUBJECT>Supersession and modification.</SUBJECT>
              <P>(a) If a D&amp;F is superseded by another D&amp;F, that action shall not render invalid any action taken under the original D&amp;F prior to the date of its supersession.</P>
              <P>(b) The contracting officer need not cancel the solicitation if the D&amp;F, as modified, supports the contract action.</P>
              <CITA>[50 FR 1726, Jan. 11, 1985 (interim rule), and 50 FR 52429, Dec. 23, 1985 (final rule), as amended at 67 FR 13053, Mar. 20, 2002]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>1.706</SECTNO>
              <SUBJECT>Expiration.</SUBJECT>
              <P>Expiration dates are required for class D&amp;F's and are optional for individual D&amp;F's. Authority to act under an individual D&amp;F expires when it is exercised or on an expiration date specified in the document, whichever occurs first. Authority to act under a class D&amp;F expires on the expiration date specified in the document. When a solicitation has been furnished to prospective offerors before the expiration date, the authority under the D&amp;F will continue until award of the contract(s) resulting from that solicitation.</P>
            </SECTION>
            <SECTION>
              <SECTNO>1.707</SECTNO>
              <SUBJECT>Signatory authority.</SUBJECT>
              <P>When a D&amp;F is required, it shall be signed by the appropriate official in accordance with agency regulations. Authority to sign or delegate signature authority for the various D&amp;F's is as shown in the applicable FAR part.</P>
            </SECTION>
          </SUBPART>
        </PART>
        <PART>
          <PRTPAGE P="21"/>
          <EAR>Pt. 2</EAR>
          <HD SOURCE="HED">PART 2—DEFINITIONS OF WORDS AND TERMS</HD>
          <CONTENTS>
            <SECHD>Sec.</SECHD>
            <SECTNO>2.000</SECTNO>
            <SUBJECT>Scope of part.</SUBJECT>
            <SUBPART>
              <HD SOURCE="HED">Subpart 2.1—Definitions</HD>
              <SECTNO>2.101</SECTNO>
              <SUBJECT>Definitions.</SUBJECT>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart 2.2—Definitions Clause</HD>
              <SECTNO>2.201</SECTNO>
              <SUBJECT>Contract clause.</SUBJECT>
            </SUBPART>
          </CONTENTS>
          <AUTH>
            <HD SOURCE="HED">Authority:</HD>
            <P>40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 42 U.S.C. 2473(c).</P>
          </AUTH>
          <SOURCE>
            <HD SOURCE="HED">Source:</HD>
            <P>48 FR 42107, Sept. 19, 1983, unless otherwise noted.</P>
          </SOURCE>
          <SECTION>
            <SECTNO>2.000</SECTNO>
            <SUBJECT>Scope of part.</SUBJECT>
            <P>(a) This part—</P>
            <P>(1) Defines words and terms that are frequently used in the FAR;</P>
            <P>(2) Provides cross-references to other definitions in the FAR of the same word or term; and</P>
            <P>(3) Provides for the incorporation of these definitions in solicitations and contracts by reference.</P>
            <P>(b) Other parts, subparts, and sections of this regulation (48 CFR chapter 1) may define other words or terms and those definitions only apply to the part, subpart, or section where the word or term is defined (see the Index for locations).</P>
            <CITA>[66 FR 2118, Jan. 10, 2001]</CITA>
          </SECTION>
          <SUBPART>
            <HD SOURCE="HED">Subpart 2.1—Definitions</HD>
            <SECTION>
              <SECTNO>2.101</SECTNO>
              <SUBJECT>Definitions.</SUBJECT>
              <P>(a) A word or a term, defined in this section, has the same meaning throughout this regulation (48 CFR chapter 1), unless—</P>
              <P>(1) The context in which the word or term is used clearly requires a different meaning; or</P>
              <P>(2) Another FAR part, subpart, or section provides a different definition for the particular part or portion of the part.</P>
              <P>(b) If a word or term that is defined in this section is defined differently in another part, subpart, or section of this regulation (48 CFR chapter 1, the definition in—</P>
              <P>(1) This section includes a cross-reference to the other definitions; and</P>
              <P>(2) That part, subpart, or section applies to the word or term when used in that part, subpart, or section.</P>
              <P>
                <E T="03">Acquisition</E> means the acquiring by contract with appropriated funds of supplies or services (including construction) by and for the use of the Federal Government through purchase or lease, whether the supplies or services are already in existence or must be created, developed, demonstrated, and evaluated. Acquisition begins at the point when agency needs are established and includes the description of requirements to satisfy agency needs, solicitation and selection of sources, award of contracts, contract financing, contract performance, contract administration, and those technical and management functions directly related to the process of fulfilling agency needs by contract.</P>
              <P>
                <E T="03">Acquisition planning</E> means the process by which the efforts of all personnel responsible for an acquisition are coordinated and integrated through a comprehensive plan for fulfilling the agency need in a timely manner and at a reasonable cost. It includes developing the overall strategy for managing the acquisition.</P>
              <P>
                <E T="03">Adequate evidence</E> means information sufficient to support the reasonable belief that a particular act or omission has occurred.</P>
              <P>
                <E T="03">Advisory and assistance services</E> means those services provided under contract by nongovernmental sources to support or improve: organizational policy development; decision-making; management and administration; program and/or project management and administration; or R&amp;D activities. It can also mean the furnishing of professional advice or assistance rendered to improve the effectiveness of Federal management processes or procedures (including those of an engineering and technical nature). In rendering the foregoing services, outputs may take the form of information, advice, opinions, alternatives, analyses, evaluations, recommendations, training and the day-to-day aid of support personnel needed for the successful performance of ongoing Federal operations. All advisory and assistance services are classified in one of the following definitional subdivisions:<PRTPAGE P="22"/>
              </P>
              <P>(1) Management and professional support services, <E T="03">i.e.,</E> contractual services that provide assistance, advice or training for the efficient and effective management and operation of organizations, activities (including management and support services for R&amp;D activities), or systems. These services are normally closely related to the basic responsibilities and mission of the agency originating the requirement for the acquisition of services by contract. Included are efforts that support or contribute to improved organization of program management, logistics management, project monitoring and reporting, data collection, budgeting, accounting, performance auditing, and administrative technical support for conferences and training programs.</P>
              <P>(2) Studies, analyses and evaluations, <E T="03">i.e.,</E> contracted services that provide organized, analytical assessments/evaluations in support of policy development, decision-making, management, or administration. Included are studies in support of R&amp;D activities. Also included are acquisitions of models, methodologies, and related software supporting studies, analyses or evaluations.</P>
              <P>(3) Engineering and technical services, <E T="03">i.e.,</E> contractual services used to support the program office during the acquisition cycle by providing such services as systems engineering and technical direction (see 9.505-1(b)) to ensure the effective operation and maintenance of a weapon system or major system as defined in OMB Circular No. A-109 or to provide direct support of a weapon system that is essential to research, development, production, operation or maintenance of the system.</P>
              <P>
                <E T="03">Affiliates</E> means associated business concerns or individuals if, directly or indirectly—</P>
              <P>(1) Either one controls or can control the other; or</P>
              <P>(2) A third party controls or can control both.</P>
              <P>
                <E T="03">Agency head</E> or <E T="03">head of the agency</E> means the Secretary, Attorney General, Administrator, Governor, Chairperson, or other chief official of an executive agency, unless otherwise indicated, including any deputy or assistant chief official of an executive agency.</P>
              <P>
                <E T="03">Alternate</E> means a substantive variation of a basic provision or clause prescribed for use in a defined circumstance. It adds wording to, deletes wording from, or substitutes specified wording for a portion of the basic provision or clause. The alternate version of a provision or clause is the basic provision or clause as changed by the addition, deletion, or substitution (see 52.105(a)).</P>
              <P>
                <E T="03">Architect-engineer services,</E> as defined in 40 U.S.C. 1102, means—</P>
              <P>(1) Professional services of an architectural or engineering nature, as defined by State law, if applicable, that are required to be performed or approved by a person licensed, registered, or certified to provide those services;</P>
              <P>(2) Professional services of an architectural or engineering nature performed by contract that are associated with research, planning, development, design, construction, alteration, or repair of real property; and</P>
              <P>(3) Those other professional services of an architectural or engineering nature, or incidental services, that members of the architectural and engineering professions (and individuals in their employ) may logically or justifiably perform, including studies, investigations, surveying and mapping, tests, evaluations, consultations, comprehensive planning, program management, conceptual designs, plans and specifications, value engineering, construction phase services, soils engineering, drawing reviews, preparation of operating and maintenance manuals, and other related services.</P>
              <P>
                <E T="03">Assignment of claims</E> means the transfer or making over by the contractor to a bank, trust company, or other financing institution, as security for a loan to the contractor, of its right to be paid by the Government for contract performance.</P>
              <P>
                <E T="03">Basic research</E> means that research directed toward increasing knowledge in science. The primary aim of basic research is a fuller knowledge or understanding of the subject under study, rather than any practical application of that knowledge.</P>
              <P>
                <E T="03">Best value</E> means the expected outcome of an acquisition that, in the <PRTPAGE P="23"/>Government's estimation, provides the greatest overall benefit in response to the requirement.</P>
              <P>
                <E T="03">Bid sample</E> means a product sample required to be submitted by an offeror to show characteristics of the offered products that cannot adequately be described by specifications, purchase descriptions, or the solicitation (e.g., balance, facility of use, or pattern).</P>
              <P>
                <E T="03">Broad agency announcement</E> means a general announcement of an agency's research interest including criteria for selecting proposals and soliciting the participation of all offerors capable of satisfying the Government's needs (see 6.102(d)(2)).</P>
              <P>
                <E T="03">Bundled contract</E> means a contract where the requirements have been consolidated by bundling. (See the definition of <E T="03">bundling.</E>)</P>
              <P>
                <E T="03">Bundling</E> means—</P>
              <P>(1) Consolidating two or more requirements for supplies or services, previously provided or performed under separate smaller contracts, into a solicitation for a single contract that is likely to be unsuitable for award to a small business concern due to—</P>
              <P>(i) The diversity, size, or specialized nature of the elements of the performance specified;</P>
              <P>(ii) The aggregate dollar value of the anticipated award;</P>
              <P>(iii) The geographical dispersion of the contract performance sites; or</P>
              <P>(iv) Any combination of the factors described in paragraphs (1)(i), (ii), and (iii) of this definition.</P>
              <P>(2) “Separate smaller contract” as used in this definition, means a contract that has been performed by one or more small business concerns or that was suitable for award to one or more small business concerns.</P>
              <P>(3) Single contract, as used in this definition, includes—</P>
              <P>(i) Multiple awards of indefinite-quantity contracts under a single solicitation for the same or similar supplies or services to two or more sources (see FAR 16.504(c)); and</P>
              <P>(ii) An order placed against an indefinite quantity contract under a—</P>
              <P>(A) Federal Supply Schedule contract; or</P>

              <P>(B) Task-order contract or delivery-order contract awarded by another agency (<E T="03">i.e.,</E> Governmentwide acquisition contract or multi-agency contract).</P>
              <P>(4) This definition does not apply to a contract that will be awarded and performed entirely outside of the United States.</P>
              <P>
                <E T="03">Business Partner Network (BPN)</E> means an integrated electronic infrastructure the Government uses to manage (<E T="03">i.e.</E>, collect, validate, access and maintain) the information it needs to transact business with its contractors. The BPN is located at <E T="03">http://www.bpn.gov</E>.</P>
              <P>
                <E T="03">Business unit</E> means any segment of an organization, or an entire business organization that is not divided into segments.</P>
              <P>
                <E T="03">Central Contractor Registration (CCR) database</E> means the primary Government repository for contractor information required for the conduct of business with the Government.</P>
              <P>
                <E T="03">Change-of-name agreement</E> means a legal instrument executed by the contractor and the Government that recognizes the legal change of name of the contractor without disturbing the original contractual rights and obligations of the parties.</P>
              <P>
                <E T="03">Change order</E> means a written order, signed by the contracting officer, directing the contractor to make a change that the Changes clause authorizes the contracting officer to order without the contractor's consent.</P>
              <P>
                <E T="03">Claim</E> means a written demand or written assertion by one of the contracting parties seeking, as a matter of right, the payment of money in a sum certain, the adjustment or interpretation of contract terms, or other relief arising under or relating to the contract. However, a written demand or written assertion by the contractor seeking the payment of money exceeding $100,000 is not a claim under the Contract Disputes Act of 1978 until certified as required by the Act. A voucher, invoice, or other routine request for payment that is not in dispute when submitted is not a claim. The submission may be converted to a claim, by written notice to the contracting officer as provided in 33.206(a), if it is disputed either as to liability or amount or is not acted upon in a reasonable time.<PRTPAGE P="24"/>
              </P>
              <P>
                <E T="03">Classified acquisition</E> means an acquisition in which offerors must have access to classified information to properly submit an offer or quotation, to understand the performance requirements, or to perform the contract.</P>
              <P>
                <E T="03">Classified contract</E> means any contract in which the contractor or its employees must have access to classified information during contract performance. A contract may be a classified contract even though the contract document itself is unclassified.</P>
              <P>
                <E T="03">Classified information</E> means any knowledge that can be communicated or any documentary material, regardless of its physical form or characteristics, that—</P>
              <P>(1)(i) Is owned by, is produced by or for, or is under the control of the United States Government; or</P>
              <P>(ii) Has been classified by the Department of Energy as privately generated restricted data following the procedures in 10 CFR 1045.21; and</P>
              <P>(2) Must be protected against unauthorized disclosure according to Executive Order 12958, Classified National Security Information, April 17, 1995, or classified in accordance with the Atomic Energy Act of 1954.</P>
              <P>
                <E T="03">Cognizant Federal agency</E> means the Federal agency that, on behalf of all Federal agencies, is responsible for establishing final indirect cost rates and forward pricing rates, if applicable, and administering cost accounting standards for all contracts in a business unit.</P>
              <P>
                <E T="03">Commercial component</E> means any component that is a commercial item.</P>
              <P>
                <E T="03">Commercial item</E> means—</P>
              <P>(1) Any item, other than real property, that is of a type customarily used by the general public or by non-governmental entities for purposes other than governmental purposes, and—</P>
              <P>(i) Has been sold, leased, or licensed to the general public; or</P>
              <P>(ii) Has been offered for sale, lease, or license to the general public;</P>
              <P>(2) Any item that evolved from an item described in paragraph (1) of this definition through advances in technology or performance and that is not yet available in the commercial marketplace, but will be available in the commercial marketplace in time to satisfy the delivery requirements under a Government solicitation;</P>
              <P>(3) Any item that would satisfy a criterion expressed in paragraphs (1) or (2) of this definition, but for—</P>
              <P>(i) Modifications of a type customarily available in the commercial marketplace; or</P>
              <P>(ii) Minor modifications of a type not customarily available in the commercial marketplace made to meet Federal Government requirements. Minor modifications means modifications that do not significantly alter the nongovernmental function or essential physical characteristics of an item or component, or change the purpose of a process. Factors to be considered in determining whether a modification is minor include the value and size of the modification and the comparative value and size of the final product. Dollar values and percentages may be used as guideposts, but are not conclusive evidence that a modification is minor;</P>
              <P>(4) Any combination of items meeting the requirements of paragraphs (1), (2), (3), or (5) of this definition that are of a type customarily combined and sold in combination to the general public;</P>
              <P>(5) Installation services, maintenance services, repair services, training services, and other services if—</P>
              <P>(i) Such services are procured for support of an item referred to in paragraph (1), (2), (3), or (4) of this definition, regardless of whether such services are provided by the same source or at the same time as the item; and</P>
              <P>(ii) The source of such services provides similar services contemporaneously to the general public under terms and conditions similar to those offered to the Federal Government;</P>
              <P>(6) Services of a type offered and sold competitively in substantial quantities in the commercial marketplace based on established catalog or market prices for specific tasks performed or specific outcomes to be achieved and under standard commercial terms and conditions. For purposes of these services—</P>
              <P>(i) <E T="03">Catalog price</E> means a price included in a catalog, price list, schedule, or other form that is regularly maintained by the manufacturer or vendor, is either published or otherwise available for inspection by customers, and <PRTPAGE P="25"/>states prices at which sales are currently, or were last, made to a significant number of buyers constituting the general public; and</P>
              <P>(ii) <E T="03">Market prices</E> means current prices that are established in the course of ordinary trade between buyers and sellers free to bargain and that can be substantiated through competition or from sources independent of the offerors.</P>
              <P>(7) Any item, combination of items, or service referred to in paragraphs (1) through (6) of this definition, notwithstanding the fact that the item, combination of items, or service is transferred between or among separate divisions, subsidiaries, or affiliates of a contractor; or</P>
              <P>(8) A nondevelopmental item, if the procuring agency determines the item was developed exclusively at private expense and sold in substantial quantities, on a competitive basis, to multiple State and local governments.</P>
              <P>
                <E T="03">Common item</E> means material that is common to the applicable Government contract and the contractor's other work.</P>
              <P>
                <E T="03">Component</E> means any item supplied to the Government as part of an end item or of another component, except that for use in—</P>
              <P>(1) Part 25, see the definition in 25.003;</P>
              <P>(2) 52.225-1 and 52.225-3, see the definition in 52.225-1(a) and 52.225-3(a); and</P>
              <P>(3) 52.225-9 and 52.225-11, see the definition in 52.225-9(a) and 52.225-11(a).</P>
              <P>
                <E T="03">Computer software</E> means computer programs, computer data bases, and related documentation.</P>
              <P>
                <E T="03">Consent to subcontract</E> means the contracting officer's written consent for the prime contractor to enter into a particular subcontract.</P>
              <P>
                <E T="03">Construction</E> means construction, alteration, or repair (including dredging, excavating, and painting) of buildings, structures, or other real property. For purposes of this definition, the terms “buildings, structures, or other real property” include, but are not limited to, improvements of all types, such as bridges, dams, plants, highways, parkways, streets, subways, tunnels, sewers, mains, power lines, cemeteries, pumping stations, railways, airport facilities, terminals, docks, piers, wharves, ways, lighthouses, buoys, jetties, breakwaters, levees, canals, and channels. Construction does not include the manufacture, production, furnishing, construction, alteration, repair, processing, or assembling of vessels, aircraft, or other kinds of personal property.</P>
              <P>
                <E T="03">Contiguous United States (CONUS)</E> means the 48 contiguous States and the District of Columbia.</P>
              <P>
                <E T="03">Contingency operation</E> (10 U.S.C. 101(a)(13)) means a military operation that—</P>
              <P>(1) Is designated by the Secretary of Defense as an operation in which members of the armed forces are or may become involved in military actions, operations, or hostilities against an enemy of the United States or against an opposing military force; or</P>
              <P>(2) Results in the call or order to, or retention on, active duty of members of the uniformed services under section 688, 12301(a), 12302, 12304, 12305, or 12406 of 10 U.S.C., chapter 15 of 10 U.S.C, or any other provision of law during a war or during a national emergency declared by the President or Congress.</P>
              <P>
                <E T="03">Continued portion of the contract</E> means the portion of a contract that the contractor must continue to perform following a partial termination.</P>
              <P>
                <E T="03">Contract</E> means a mutually binding legal relationship obligating the seller to furnish the supplies or services (including construction) and the buyer to pay for them. It includes all types of commitments that obligate the Government to an expenditure of appropriated funds and that, except as otherwise authorized, are in writing. In addition to bilateral instruments, contracts include (but are not limited to) awards and notices of awards; job orders or task letters issued under basic ordering agreements; letter contracts; orders, such as purchase orders, under which the contract becomes effective by written acceptance or performance; and bilateral contract modifications. Contracts do not include grants and cooperative agreements covered by 31 U.S.C. 6301, <E T="03">et seq.</E> For discussion of various types of contracts, see part 16.</P>
              <P>
                <E T="03">Contract administration office</E> means an office that performs—<PRTPAGE P="26"/>
              </P>
              <P>(1) Assigned postaward functions related to the administration of contracts; and</P>
              <P>(2) Assigned preaward functions.</P>
              <P>
                <E T="03">Contract clause</E> or <E T="03">clause</E> means a term or condition used in contracts or in both solicitations and contracts, and applying after contract award or both before and after award.</P>
              <P>
                <E T="03">Contract modification</E> means any written change in the terms of a contract (see 43.103).</P>
              <P>
                <E T="03">Contracting</E> means purchasing, renting, leasing, or otherwise obtaining supplies or services from nonfederal sources. Contracting includes description (but not determination) of supplies and services required, selection and solicitation of sources, preparation and award of contracts, and all phases of contract administration. It does not include making grants or cooperative agreements.</P>
              <P>
                <E T="03">Contracting activity</E> means an element of an agency designated by the agency head and delegated broad authority regarding acquisition functions.</P>
              <P>
                <E T="03">Contracting office</E> means an office that awards or executes a contract for supplies or services and performs postaward functions not assigned to a contract administration office (except for use in part 48, see also 48.001).</P>
              <P>
                <E T="03">Contracting officer</E> 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. “Administrative contracting officer (ACO)” refers to a contracting officer who is administering contracts. “Termination contracting officer (TCO)” refers to a contracting officer who is settling terminated contracts. A single contracting officer may be responsible for duties in any or all of these areas. Reference in this regulation (48 CFR chapter 1) to administrative contracting officer or termination contracting officer does not—</P>
              <P>(1) Require that a duty be performed at a particular office or activity; or</P>
              <P>(2) Restrict in any way a contracting officer in the performance of any duty properly assigned.</P>
              <P>
                <E T="03">Conviction</E> means a judgment or conviction of a criminal offense by any court of competent jurisdiction, whether entered upon a verdict or a plea, and includes a conviction entered upon a plea of <E T="03">nolo contendere.</E> For use in subpart 23.5, see the definition at 23.503.</P>
              <P>
                <E T="03">Cost or pricing data</E> (10 U.S.C. 2306a(h)(1) and 41 U.S.C. 254b) means all facts that, as of the date of price agreement or, if applicable, an earlier date agreed upon between the parties that is as close as practicable to the date of agreement on price, prudent buyers and sellers would reasonably expect to affect price negotiations significantly. Cost or pricing data are data requiring certification in accordance with 15.406-2. Cost or pricing data are factual, not judgmental; and are verifiable. While they do not indicate the accuracy of the prospective contractor's judgment about estimated future costs or projections, they do include the data forming the basis for that judgment. Cost or pricing data are more than historical accounting data; they are all the facts that can be reasonably expected to contribute to the soundness of estimates of future costs and to the validity of determinations of costs already incurred. They also include such factors as—</P>
              <P>(1) Vendor quotations;</P>
              <P>(2) Nonrecurring costs;</P>
              <P>(3) Information on changes in production methods and in production or purchasing volume;</P>
              <P>(4) Data supporting projections of business prospects and objectives and related operations costs;</P>
              <P>(5) Unit-cost trends such as those associated with labor efficiency;</P>
              <P>(6) Make-or-buy decisions;</P>
              <P>(7) Estimated resources to attain business goals; and</P>
              <P>(8) Information on management decisions that could have a significant bearing on costs.</P>
              <P>
                <E T="03">Cost realism</E> means that the costs in an offeror's proposal—</P>
              <P>(1) Are realistic for the work to be performed;</P>
              <P>(2) Reflect a clear understanding of the requirements; and</P>

              <P>(3) Are consistent with the various elements of the offeror's technical proposal.<PRTPAGE P="27"/>
              </P>
              <P>
                <E T="03">Cost sharing</E> means an explicit arrangement under which the contractor bears some of the burden of reasonable, allocable, and allowable contract cost.</P>
              <P>
                <E T="03">Customs territory of the United States</E> means the 50 States, the District of Columbia, and Puerto Rico.</P>
              <P>
                <E T="03">Data Universal Numbering System (DUNS) number</E> means the 9-digit number assigned by Dun and Bradstreet, Inc. (D&amp;B), to identify unique business entities.</P>
              <P>
                <E T="03">Data Universal Numbering System +4 (DUNS+4) number</E> means the DUNS number assigned by D&amp;B plus a 4-character suffix that may be assigned by a business concern. (D&amp;B has no affiliation with this 4-character suffix.) This 4-character suffix may be assigned at the discretion of the business concern to establish additional CCR records for identifying alternative Electronic Funds Transfer (EFT) accounts (<E T="03">see</E> subpart 32.11) for the same concern.</P>
              <P>
                <E T="03">Day</E> means, unless otherwise specified, a calendar day.</P>
              <P>
                <E T="03">Debarment</E> means action taken by a debarring official under 9.406 to exclude a contractor from Government contracting and Government-approved subcontracting for a reasonable, specified period; a contractor that is excluded is “debarred.”</P>
              <P>
                <E T="03">Delivery order</E> means an order for supplies placed against an established contract or with Government sources.</P>
              <P>
                <E T="03">Depreciation</E> means a charge to current operations that distributes the cost of a tangible capital asset, less estimated residual value, over the estimated useful life of the asset in a systematic and logical manner. It does not involve a process of valuation. Useful life refers to the prospective period of economic usefulness in a particular contractor's operations as distinguished from physical life; it is evidenced by the actual or estimated retirement and replacement practice of the contractor.</P>
              <P>
                <E T="03">Descriptive literature</E> means information provided by an offeror, such as cuts, illustrations, drawings, and brochures, that shows a product's characteristics or construction of a product or explains its operation. The term includes only that information needed to evaluate the acceptability of the product and excludes other information for operating or maintaining the product.</P>
              <P>
                <E T="03">Design-to-cost</E> means a concept that establishes cost elements as management goals to achieve the best balance between life-cycle cost, acceptable performance, and schedule. Under this concept, cost is a design constraint during the design and development phases and a management discipline throughout the acquisition and operation of the system or equipment.</P>
              <P>
                <E T="03">Direct cost</E> means any cost that is identified specifically with a particular final cost objective. Direct costs are not limited to items that are incorporated in the end product as material or labor. Costs identified specifically with a contract are direct costs of that contract. All costs identified specifically with other final cost objectives of the contractor are direct costs of those cost objectives.</P>
              <P>
                <E T="03">Drug-free workplace</E> means the site(s) for the performance of work done by the contractor in connection with a specific contract where employees of the contractor are prohibited from engaging in the unlawful manufacture, distribution, dispensing, possession, or use of a controlled substance.</P>
              <P>
                <E T="03">Earned value management system</E> means a project management tool that effectively integrates the project scope of work with cost, schedule and performance elements for optimum project planning and control. The qualities and operating characteristics of an earned value management system are described in American National Standards Institute/Electronics Industries Alliance (ANSI/EIA) Standard-748, Earned Value Management Systems. (See OMB Circular A-11, Part 7.)</P>
              <P>
                <E T="03">Effective date of termination</E> means the date on which the notice of termination requires the contractor to stop performance under the contract. If the contractor receives the termination notice after the date fixed for termination, then the effective date of termination means the date the contractor receives the notice.</P>
              <P>
                <E T="03">Electronic and information technology (EIT)</E> has the same meaning as “information technology” except EIT also includes any equipment or interconnected system or subsystem of equipment that is used in the creation, <PRTPAGE P="28"/>conversion, or duplication of data or information. The term EIT, includes, but is not limited to, telecommunication products (such as telephones), information kiosks and transaction machines, worldwide websites, multimedia, and office equipment (such as copiers and fax machines).</P>
              <P>
                <E T="03">Electronic commerce</E> means electronic techniques for accomplishing business transactions including electronic mail or messaging, World Wide Web technology, electronic bulletin boards, purchase cards, electronic funds transfer, and electronic data interchange.</P>
              <P>
                <E T="03">Electronic data interchange (EDI)</E> means a technique for electronically transferring and storing formatted information between computers utilizing established and published formats and codes, as authorized by the applicable Federal Information Processing Standards.</P>
              <P>
                <E T="03">Electronic Funds Transfer (EFT)</E> means any transfer of funds, other than a transaction originated by cash, check, or similar paper instrument, that is initiated through an electronic terminal, telephone, computer, or magnetic tape, for the purpose of ordering, instructing, or authorizing a financial institution to debit or credit an account. The term includes Automated Clearing House transfers, Fedwire transfers, and transfers made at automatic teller machines and point-of-sale terminals. For purposes of compliance with 31 U.S.C. 3332 and implementing regulations at 31 CFR part 208, the term “electronic funds transfer” includes a Governmentwide commercial purchase card transaction.</P>
              <P>
                <E T="03">End product</E> means supplies delivered under a line item of a Government contract, except for use in part 25 and the associated clauses at 52.225-1, 52.225-3, and 52.225-5, see the definitions in 25.003, 52.225-1(a), 52.225-3(a), and 52.225-5(a).</P>
              <P>
                <E T="03">Energy-efficient product</E> means a product that—</P>
              <P>(1) Meets Department of Energy and Environmental Protection Agency criteria for use of the Energy Star trademark label; or</P>
              <P>(2) Is in the upper 25 percent of efficiency for all similar products as designated by the Department of Energy's Federal Energy Management Program.</P>
              <P>
                <E T="03">Energy-efficient standby power devices</E> means products that use—</P>
              <P>(1) External standby power devices, or that contain an internal standby power function; and</P>
              <P>(2) No more than one watt of electricity in their standby power consuming mode or meet recommended low standby levels as designated by the Department of Energy Federal Energy Management Program.</P>
              <P>
                <E T="03">Energy-savings performance contract</E> means a contract that requires the contractor to—</P>
              <P>(1) Perform services for the design, acquisition, financing, installation, testing, operation, and where appropriate, maintenance and repair, of an identified energy conservation measure or series of measures at one or more locations;</P>
              <P>(2) Incur the costs of implementing the energy savings measures, including at least the cost (if any) incurred in making energy audits, acquiring and installing equipment, and training personnel in exchange for a predetermined share of the value of the energy savings directly resulting from implementation of such measures during the term of the contract; and</P>
              <P>(3) Guarantee future energy and cost savings to the Government.</P>
              <P>
                <E T="03">Environmentally preferable</E> means products or services that have a lesser or reduced effect on human health and the environment when compared with competing products or services that serve the same purpose. This comparison may consider raw materials acquisition, production, manufacturing, packaging, distribution, reuse, operation, maintenance, or disposal of the product or service.</P>
              <P>
                <E T="03">Excess personal property</E> means any personal property under the control of a Federal agency that the agency head determines is not required for its needs or for the discharge of its responsibilities.</P>
              <P>
                <E T="03">Excluded Parties List System</E> means an electronic database maintained and posted by the General Services Administration containing the list of all parties suspended, proposed for debarment, debarred, declared ineligible, or excluded or disqualified under the nonprocurement common rule by agencies, <PRTPAGE P="29"/>Government corporations, or by the Government Accountability Office.</P>
              <P>
                <E T="03">Executive agency</E> means an executive department, a military department, or any independent establishment within the meaning of 5 U.S.C. 101, 102, and 104(1), respectively, and any wholly owned Government corporation within the meaning of 31 U.S.C. 9101.</P>
              <P>
                <E T="03">Facilities capital cost of money</E> means “cost of money as an element of the cost of facilities capital” as used at 48 CFR 9904.414—Cost Accounting Standard—Cost of Money as an Element of the Cost of Facilities Capital.</P>
              <P>
                <E T="03">Facsimile</E> means electronic equipment that communicates and reproduces both printed and handwritten material. If used in conjunction with a reference to a document; e.g., facsimile bid, the terms refers to a document (in the example given, a bid) that has been transmitted to and received by the Government via facsimile.</P>
              <P>
                <E T="03">Federal Acquisition Computer Network (FACNET) Architecture</E> is a Government system that provides user access, employs nationally and internationally recognized data formats, and allows the electronic data interchange of acquisition information between the private sector and the Federal Government.</P>
              <P>
                <E T="03">Federal agency</E> means any executive agency or any independent establishment in the legislative or judicial branch of the Government (except the Senate, the House of Representatives, the Architect of the Capitol, and any activities under the Architect's direction).</P>
              <P>
                <E T="03">Federally-controlled facilities</E> means—</P>
              <P>(1) Federally-owned buildings or leased space, whether for single or multi-tenant occupancy, and its grounds and approaches, all or any portion of which is under the jurisdiction, custody or control of a department or agency;</P>
              <P>(2) Federally-controlled commercial space shared with non-government tenants. For example, if a department or agency leased the 10th floor of a commercial building, the Directive applies to the 10th floor only;</P>
              <P>(3) Government-owned, contractor-operated facilities, including laboratories engaged in national defense research and production activities; and</P>
              <P>(4) Facilities under a management and operating contract, such as for the operation, maintenance, or support of a Government-owned or Government-controlled research, development, special production, or testing establishment.</P>
              <P>
                <E T="03">Federally-controlled information system</E> means an information system (44 U.S.C. 3502(8) used or operated by a Federal agency, or a contractor or other organization on behalf of the agency (44 U.S.C. 3544(a)(1)(A)).</P>
              <P>
                <E T="03">Federally Funded Research and Development Centers (FFRDC's)</E> means activities that are sponsored under a broad charter by a Government agency (or agencies) for the purpose of performing, analyzing, integrating, supporting, and/or managing basic or applied research and/or development, and that receive 70 percent or more of their financial support from the Government; and—</P>
              <P>(1) A long-term relationship is contemplated;</P>
              <P>(2) Most or all of the facilities are owned or funded by the Government; and</P>
              <P>(3) The FFRDC has access to Government and supplier data, employees, and facilities beyond that common in a normal contractual relationship.</P>
              <P>
                <E T="03">Final indirect cost rate</E> means the indirect cost rate established and agreed upon by the Government and the contractor as not subject to change. It is usually established after the close of the contractor's fiscal year (unless the parties decide upon a different period) to which it applies. For cost-reimbursement research and development contracts with educational institutions, it may be predetermined; that is, established for a future period on the basis of cost experience with similar contracts, together with supporting data.</P>
              <P>
                <E T="03">First article</E> means a preproduction model, initial production sample, test sample, first lot, pilot lot, or pilot models.</P>
              <P>
                <E T="03">First article testing</E> means testing and evaluating the first article for conformance with specified contract requirements before or in the initial stage of production.</P>
              <P>
                <E T="03">F.o.b.</E> means free on board. This term is used in conjunction with a physical point to determine—<PRTPAGE P="30"/>
              </P>
              <P>(1) The responsibility and basis for payment of freight charges; and</P>
              <P>(2) Unless otherwise agreed, the point where title for goods passes to the buyer or consignee.</P>
              <P>
                <E T="03">F.o.b. destination</E> means free on board at destination; <E T="03">i.e.,</E> the seller or consignor delivers the goods on seller's or consignor's conveyance at destination. Unless the contract provides otherwise, the seller or consignor is responsible for the cost of shipping and risk of loss. For use in the clause at 52.247-34, see the definition at 52.247-34(a).</P>
              <P>
                <E T="03">F.o.b. origin</E> means free on board at origin; <E T="03">i.e.,</E> the seller or consignor places the goods on the conveyance. Unless the contract provides otherwise, the buyer or consignee is responsible for the cost of shipping and risk of loss. For use in the clause at 52.247-29, see the definition at 52.247-29(a).</P>
              <P>
                <E T="03">F.o.b. * * *</E> (For other types of F.o.b., see 47.303).</P>
              <P>
                <E T="03">Forward pricing rate agreement</E> means a written agreement negotiated between a contractor and the Government to make certain rates available during a specified period for use in pricing contracts or modifications. These rates represent reasonable projections of specific costs that are not easily estimated for, identified with, or generated by a specific contract, contract end item, or task. These projections may include rates for such things as labor, indirect costs, material obsolescence and usage, spare parts provisioning, and material handling.</P>
              <P>
                <E T="03">Forward pricing rate recommendation</E> means a rate set unilaterally by the administrative contracting officer for use by the Government in negotiations or other contract actions when forward pricing rate agreement negotiations have not been completed or when the contractor will not agree to a forward pricing rate agreement.</P>
              <P>
                <E T="03">Freight</E> means supplies, goods, and transportable property.</P>
              <P>
                <E T="03">Full and open competition,</E> when used with respect to a contract action, means that all responsible sources are permitted to compete.</P>
              <P>
                <E T="03">General and administrative (G&amp;A) expense</E> means any management, financial, and other expense which is incurred by or allocated to a business unit and which is for the general management and administration of the business unit as a whole. G&amp;A expense does not include those management expenses whose beneficial or causal relationship to cost objectives can be more directly measured by a base other than a cost input base representing the total activity of a business unit during a cost accounting period.</P>
              <P>
                <E T="03">Governmentwide acquisition contract (GWAC)</E> means a task-order or delivery-order contract for information technology established by one agency for Governmentwide use that is operated—</P>
              <P>(1) By an executive agent designated by the Office of Management and Budget pursuant to 40 U.S.C. 11302(e); or</P>
              <P>(2) Under a delegation of procurement authority issued by the General Services Administration (GSA) prior to August 7, 1996, under authority granted GSA by former section 40 U.S.C. 759, repealed by Pub. L. 104-106. The Economy Act does not apply to orders under a Governmentwide acquisition contract.</P>
              <P>
                <E T="03">Governmentwide point of entry (GPE)</E> means the single point where Government business opportunities greater than $25,000, including synopses of proposed contract actions, solicitations, and associated information, can be accessed electronically by the public. The GPE is located at <E T="03">http://www.fedbizopps.gov.</E>
              </P>
              <P>
                <E T="03">Head of the agency</E> (see “agency head”).</P>
              <P>
                <E T="03">Head of the contracting activity</E> means the official who has overall responsibility for managing the contracting activity.</P>
              <P>
                <E T="03">Historically black college or university</E> means an institution determined by the Secretary of Education to meet the requirements of 34 CFR 608.2. For the Department of Defense, the National Aeronautics and Space Administration, and the Coast Guard, the term also includes any nonprofit research institution that was an integral part of such a college or university before November 14, 1986.</P>
              <P>
                <E T="03">HUBZone</E> means a historically underutilized business zone that is an area located within one or more qualified census tracts, qualified nonmetropolitan counties, or lands within the external boundaries of an Indian reservation.<PRTPAGE P="31"/>
              </P>
              <P>
                <E T="03">HUBZone small business concern</E> means a small business concern that appears on the List of Qualified HUBZone Small Business Concerns maintained by the Small Business Administration.</P>
              <P>
                <E T="03">Humanitarian or peacekeeping operation</E> means a military operation in support of the provision of humanitarian or foreign disaster assistance or in support of a peacekeeping operation under chapter VI or VII of the Charter of the United Nations. The term does not include routine training, force rotation, or stationing (10 U.S.C. 2302(8) and 41 U.S.C. 259(d)).</P>
              <P>
                <E T="03">In writing, writing,</E> or <E T="03">written</E> means any worded or numbered expression that can be read, reproduced, and later communicated, and includes electronically transmitted and stored information.</P>
              <P>
                <E T="03">Indirect cost</E> means any cost not directly identified with a single final cost objective, but identified with two or more final cost objectives or with at least one intermediate cost objective.</P>
              <P>
                <E T="03">Indirect cost rate</E> means the percentage or dollar factor that expresses the ratio of indirect expense incurred in a given period to direct labor cost, manufacturing cost, or another appropriate base for the same period (see also “final indirect cost rate”).</P>
              <P>
                <E T="03">Ineligible</E> means excluded from Government contracting (and subcontracting, if appropriate) pursuant to statutory, Executive order, or regulatory authority other than this regulation (48 CFR chapter 1) and its implementing and supplementing regulations; for example, pursuant to the Davis-Bacon Act and its related statutes and implementing regulations, the Service Contract Act, the Equal Employment Opportunity Acts and Executive orders, the Walsh-Healey Public Contracts Act, the Buy American Act, or the Environmental Protection Acts and Executive orders.</P>
              <P>
                <E T="03">Information other than cost or pricing data</E> means any type of information that is not required to be certified in accordance with 15.406-2 and is necessary to determine price reasonableness or cost realism. For example, such information may include pricing, sales, or cost information, and includes cost or pricing data for which certification is determined inapplicable after submission.</P>
              <P>
                <E T="03">Information security</E> means protecting information and information systems from unauthorized access, use, disclosure, disruption, modification, or destruction in order to provide—</P>
              <P>(1) Integrity, which means guarding against improper information modification or destruction, and includes ensuring information nonrepudiation and authenticity;</P>
              <P>(2) Confidentiality, which means preserving authorized restrictions on access and disclosure, including means for protecting personal privacy and proprietary information; and</P>
              <P>(3) Availability, which means ensuring timely and reliable access to, and use of, information.</P>
              <P>
                <E T="03">Information technology</E> means any equipment, or interconnected system(s) or subsystem(s) of equipment, that is used in the automatic acquisition, storage, analysis, evaluation, manipulation, management, movement, control, display, switching, interchange, transmission, or reception of data or information by the agency.</P>
              <P>(1) For purposes of this definition, equipment is used by an agency if the equipment is used by the agency directly or is used by a contractor under a contract with the agency that requires—</P>
              <P>(i) Its use; or</P>
              <P>(ii) To a significant extent, its use in the performance of a service or the furnishing of a product.</P>
              <P>(2) The term “information technology” includes computers, ancillary equipment (including imaging peripherals, input, output, and storage devices necessary for security and surveillance), peripheral equipment designed to be controlled by the central processing unit of a computer, software, firmware and similar procedures, services (including support services), and related resources.</P>
              <P>(3) The term “information technology” does not include any equipment that—</P>
              <P>(i) Is acquired by a contractor incidental to a contract; or</P>

              <P>(ii) Contains imbedded information technology that is used as an integral part of the product, but the principal <PRTPAGE P="32"/>function of which is not the acquisition, storage, analysis, evaluation, manipulation, management, movement, control, display, switching, interchange, transmission, or reception of data or information. For example, HVAC (heating, ventilation, and air conditioning) equipment, such as thermostats or temperature control devices, and medical equipment where information technology is integral to its operation, are not information technology.</P>
              <P>
                <E T="03">Inherently governmental function</E> means, as a matter of policy, a function that is so intimately related to the public interest as to mandate performance by Government employees. This definition is a policy determination, not a legal determination. An inherently governmental function includes activities that require either the exercise of discretion in applying Government authority, or the making of value judgments in making decisions for the Government. Governmental functions normally fall into two categories: the act of governing, <E T="03">i.e.,</E> the discretionary exercise of Government authority, and monetary transactions and entitlements.</P>
              <P>(1) An inherently governmental function involves, among other things, the interpretation and execution of the laws of the United States so as to—</P>
              <P>(i) Bind the United States to take or not to take some action by contract, policy, regulation, authorization, order, or otherwise;</P>
              <P>(ii) Determine, protect, and advance United States economic, political, territorial, property, or other interests by military or diplomatic action, civil or criminal judicial proceedings, contract management, or otherwise;</P>
              <P>(iii) Significantly affect the life, liberty, or property of private persons;</P>
              <P>(iv) Commission, appoint, direct, or control officers or employees of the United States; or</P>
              <P>(v) Exert ultimate control over the acquisition, use, or disposition of the property, real or personal, tangible or intangible, of the United States, including the collection, control, or disbursement of Federal funds.</P>
              <P>(2) Inherently governmental functions do not normally include gathering information for or providing advice, opinions, recommendations, or ideas to Government officials. They also do not include functions that are primarily ministerial and internal in nature, such as building security, mail operations, operation of cafeterias, housekeeping, facilities operations and maintenance, warehouse operations, motor vehicle fleet management operations, or other routine electrical or mechanical services.</P>
              <P>
                <E T="03">Inspection</E> means examining and testing supplies or services (including, when appropriate, raw materials, components, and intermediate assemblies) to determine whether they conform to contract requirements.</P>
              <P>
                <E T="03">Insurance</E> means a contract that provides that for a stipulated consideration, one party undertakes to indemnify another against loss, damage, or liability arising from an unknown or contingent event.</P>
              <P>
                <E T="03">Invoice</E> means a contractor's bill or written request for payment under the contract for supplies delivered or services performed (see also “proper invoice”).</P>
              <P>
                <E T="03">Irrevocable letter of credit</E> means a written commitment by a federally insured financial institution to pay all or part of a stated amount of money, until the expiration date of the letter, upon the Government's (the beneficiary) presentation of a written demand for payment. Neither the financial institution nor the offeror/contractor can revoke or condition the letter of credit.</P>
              <P>
                <E T="03">Labor surplus area</E> means a geographical area identified by the Department of Labor in accordance with 20 CFR part 654, subpart A, as an area of concentrated unemployment or underemployment or an area of labor surplus.</P>
              <P>
                <E T="03">Labor surplus area concern</E> means a concern that together with its first-tier subcontractors will perform substantially in labor surplus areas. Performance is substantially in labor surplus areas if the costs incurred under the contract on account of manufacturing, production, or performance of appropriate services in labor surplus areas exceed 50 percent of the contract price.<PRTPAGE P="33"/>
              </P>
              <P>
                <E T="03">Latent defect</E> means a defect that exists at the time of acceptance but cannot be discovered by a reasonable inspection.</P>
              <P>
                <E T="03">Major system</E> means that combination of elements that will function together to produce the capabilities required to fulfill a mission need. The elements may include hardware, equipment, software, or any combination thereof, but exclude construction or other improvements to real property. A system is a major system if—</P>
              <P>(1) The Department of Defense is responsible for the system and the total expenditures for research, development, test, and evaluation for the system are estimated to be more than $173.5 million or the eventual total expenditure for the acquisition exceeds $814.5 million;</P>
              <P>(2) A civilian agency is responsible for the system and total expenditures for the system are estimated to exceed $1.8 million or the dollar threshold for a “major system” established by the agency pursuant to Office of Management and Budget Circular A-109, entitled “Major System Acquisitions,” whichever is greater; or</P>
              <P>(3) The system is designated a “major system” by the head of the agency responsible for the system (10 U.S.C. 2302 and 41 U.S.C. 403).</P>
              <P>
                <E T="03">Make-or-buy program</E> means that part of a contractor's written plan for a contract identifying those major items to be produced or work efforts to be performed in the prime contractor's facilities and those to be subcontracted.</P>
              <P>
                <E T="03">Market research</E> means collecting and analyzing information about capabilities within the market to satisfy agency needs.</P>
              <P>
                <E T="03">Master solicitation</E> means a document containing special clauses and provisions that have been identified as essential for the acquisition of a specific type of supply or service that is acquired repetitively.</P>
              <P>
                <E T="03">May</E> denotes the permissive. However, the words “no person may * * *” mean that no person is required, authorized, or permitted to do the act described.</P>
              <P>
                <E T="03">Micro-purchase</E> means an acquisition of supplies or services using simplified acquisition procedures, the aggregate amount of which does not exceed the micro-purchase threshold.</P>
              <P>
                <E T="03">Micro-purchase threshold</E> means $3,000, except it means—</P>
              <P>(1) For acquisitions of construction subject to the Davis-Bacon Act, $2,000;</P>
              <P>(2) For acquisitions of services subject to the Service Contract Act, $2,500; and</P>
              <P>(3) For acquisitions of supplies or services that, as determined by the head of the agency, are to be used to support a contingency operation or to facilitate defense against or recovery from nuclear, biological, chemical, or radiological attack, as described in 13.201(g)(1), except for construction subject to the Davis-Bacon Act (41 U.S.C. 428a)—</P>
              <P>(i) $15,000 in the case of any contract to be awarded and performed, or purchase to be made, inside the United States; and</P>
              <P>(ii) $25,000 in the case of any contract to be awarded and performed, or purchase to be made, outside the United States.</P>
              <P>
                <E T="03">Minority Institution</E> means an institution of higher education meeting the requirements of section 1046(3) of the Higher Education Act of 1965 (20 U.S.C. 1067k), including a Hispanic-serving institution of higher education, as defined in section 316(b)(1) of the Act (20 U.S.C. 1101a).</P>
              <P>
                <E T="03">Multi-agency contract (MAC)</E> means a task-order or delivery-order contract established by one agency for use by Government agencies to obtain supplies and services, consistent with the Economy Act (see 17.500(b)). Multi-agency contracts include contracts for information technology established pursuant to 40 U.S.C. 11314(a)(2).</P>
              <P>
                <E T="03">Must</E> (see “shall”).</P>
              <P>
                <E T="03">National defense</E> means any activity related to programs for military or atomic energy production or construction, military assistance to any foreign nation, stockpiling, or space.</P>
              <P>
                <E T="03">Neutral person</E> means an impartial third party, who serves as a mediator, fact finder, or arbitrator, or otherwise functions to assist the parties to resolve the issues in controversy. A neutral person may be a permanent or temporary officer or employee of the Federal Government or any other individual who is acceptable to the parties. <PRTPAGE P="34"/>A neutral person must have no official, financial, or personal conflict of interest with respect to the issues in controversy, unless the interest is fully disclosed in writing to all parties and all parties agree that the neutral person may serve (5 U.S.C. 583).</P>
              <P>
                <E T="03">Nondevelopmental item</E> means—</P>
              <P>(1) Any previously developed item of supply used exclusively for governmental purposes by a Federal agency, a State or local government, or a foreign government with which the United States has a mutual defense cooperation agreement;</P>
              <P>(2) Any item described in paragraph (1) of this definition that requires only minor modification or modifications of a type customarily available in the commercial marketplace in order to meet the requirements of the procuring department or agency; or</P>
              <P>(3) Any item of supply being produced that does not meet the requirements of paragraphs (1) or (2) solely because the item is not yet in use.</P>
              <P>
                <E T="03">Novation agreement</E> means a legal instrument—</P>
              <P>(1) Executed by the—</P>
              <P>(i) Contractor (transferor);</P>
              <P>(ii) Successor in interest (transferee); and</P>
              <P>(iii) Government; and</P>
              <P>(2) By which, among other things, the transferor guarantees performance of the contract, the transferee assumes all obligations under the contract, and the Government recognizes the transfer of the contract and related assets.</P>
              <P>
                <E T="03">Offer</E> means a response to a solicitation that, if accepted, would bind the offeror to perform the resultant contract. Responses to invitations for bids (sealed bidding) are offers called “bids” or “sealed bids”; responses to requests for proposals (negotiation) are offers called “proposals”; however, responses to requests for quotations (simplified acquisition) are “quotations”, not offers. For unsolicited proposals, see subpart 15.6.</P>
              <P>
                <E T="03">Offeror</E> means offeror or bidder.</P>
              <P>
                <E T="03">Online Representations and Certifications Application (ORCA)</E> means the primary Government repository for contractor submitted representations and certifications required for the conduct of business with the Government. ORCA is part of the Business Partner Network (BPN). ORCA is located at <E T="03">http://orca.bpn.gov</E>.</P>
              <P>
                <E T="03">Option</E> means a unilateral right in a contract by which, for a specified time, the Government may elect to purchase additional supplies or services called for by the contract, or may elect to extend the term of the contract.</P>
              <P>
                <E T="03">Organizational conflict of interest</E> means that because of other activities or relationships with other persons, a person is unable or potentially unable to render impartial assistance or advice to the Government, or the person's objectivity in performing the contract work is or might be otherwise impaired, or a person has an unfair competitive advantage.</P>
              <P>
                <E T="03">Outlying areas</E> means—</P>
              <P>(1) <E T="03">Commonwealths.</E> (i) Puerto Rico.</P>
              <P>(ii) The Northern Mariana Islands;</P>
              <P>(2) <E T="03">Territories.</E> (i) American Samoa.</P>
              <P>(ii) Guam.</P>
              <P>(iii) U.S. Virgin Islands; and</P>
              <P>(3) <E T="03">Minor outlying islands.</E> (i) Baker Island.</P>
              <P>(ii) Howland Island.</P>
              <P>(iii) Jarvis Island.</P>
              <P>(iv) Johnston Atoll.</P>
              <P>(v) Kingman Reef.</P>
              <P>(vi) Midway Islands.</P>
              <P>(vii) Navassa Island.</P>
              <P>(viii) Palmyra Atoll.</P>
              <P>(ix) Wake Atoll.</P>
              <P>
                <E T="03">Overtime</E> means time worked by a contractor's employee in excess of the employee's normal workweek.</P>
              <P>
                <E T="03">Overtime premium</E> means the difference between the contractor's regular rate of pay to an employee for the shift involved and the higher rate paid for overtime. It does not include shift premium, <E T="03">i.e.,</E> the difference between the contractor's regular rate of pay to an employee and the higher rate paid for extra-pay-shift work.</P>
              <P>
                <E T="03">Ozone-depleting substance</E> means any substance the Environmental Protection Agency designates in 40 CFR part 82 as—</P>
              <P>(1) Class I, including, but not limited to, chlorofluorocarbons, halons, carbon tetrachloride, and methyl chloroform; or</P>
              <P>(2) Class II, including, but not limited to, hydrochlorofluorocarbons.</P>
              <P>
                <E T="03">Partial termination</E> means the termination of a part, but not all, of the <PRTPAGE P="35"/>work that has not been completed and accepted under a contract.</P>
              <P>
                <E T="03">Performance-based acquisition (PBA)</E> means an acquisition structured around the results to be achieved as opposed to the manner by which the work is to be performed.</P>
              <P>
                <E T="03">Performance Work Statement (PWS)</E> means a statement of work for performance-based acquisitions that describes the required results in clear, specific and objective terms with measurable outcomes.</P>
              <P>
                <E T="03">Personal property</E> means property of any kind or interest in it except real property, records of the Federal Government, and naval vessels of the following categories:</P>
              <P>(1) Battleships;</P>
              <P>(2) Cruisers;</P>
              <P>(3) Aircraft carriers;</P>
              <P>(4) Destroyers; and</P>
              <P>(5) Submarines.</P>
              <P>
                <E T="03">Personal services contract</E> means a contract that, by its express terms or as administered, makes the contractor personnel appear to be, in effect, Government employees (see 37.104).</P>
              <P>
                <E T="03">Plant clearance officer</E> means an authorized representative of the contracting officer, appointed in accordance with agency procedures, responsible for screening, redistributing, and disposing of contractor inventory from a contractor's plant or work site. The term “Contractor's plant” includes, but is not limited to, Government-owned contractor-operated plants and Federal installations as may be required under the scope of the contract.</P>
              <P>
                <E T="03">Pollution prevention</E> means any practice that—</P>
              <P>(1)(i) Reduces the amount of any hazardous substance, pollutant, or contaminant entering any waste stream or otherwise released into the environment (including fugitive emissions) prior to recycling, treatment, or disposal; and</P>
              <P>(ii) Reduces the hazards to public health and the environment associated with the release of such substances, pollutants, and contaminants;</P>
              <P>(2) Reduces or eliminates the creation of pollutants through increased efficiency in the use of raw materials, energy, water, or other resources; or</P>
              <P>(3) Protects natural resources by conservation.</P>
              <P>
                <E T="03">Power of attorney</E> means the authority given one person or corporation to act for and obligate another, as specified in the instrument creating the power; in corporate suretyship, an instrument under seal that appoints an attorney-in-fact to act in behalf of a surety company in signing bonds (see also “attorney-in-fact” at 28.001).</P>
              <P>
                <E T="03">Preaward survey</E> means an evaluation of a prospective contractor's capability to perform a proposed contract.</P>
              <P>
                <E T="03">Preponderance of the evidence</E> means proof by information that, compared with that opposing it, leads to the conclusion that the fact at issue is more probably true than not.</P>
              <P>
                <E T="03">Pricing</E> means the process of establishing a reasonable amount or amounts to be paid for supplies or services.</P>
              <P>
                <E T="03">Procurement</E> (see “acquisition”).</P>
              <P>
                <E T="03">Procuring activity</E> means a component of an executive agency having a significant acquisition function and designated as such by the head of the agency. Unless agency regulations specify otherwise, the term “procuring activity” is synonymous with “contracting activity.”</P>
              <P>
                <E T="03">Projected average loss</E> means the estimated long-term average loss per period for periods of comparable exposure to risk of loss.</P>
              <P>
                <E T="03">Proper invoice</E> means an invoice that meets the minimum standards specified in 32.905(b).</P>
              <P>
                <E T="03">Purchase order,</E> when issued by the Government, means an offer by the Government to buy supplies or services, including construction and research and development, upon specified terms and conditions, using simplified acquisition procedures.</P>
              <P>
                <E T="03">Qualification requirement</E> means a Government requirement for testing or other quality assurance demonstration that must be completed before award of a contract.</P>
              <P>
                <E T="03">Qualified products list (QPL)</E> means a list of products that have been examined, tested, and have satisfied all applicable qualification requirements.</P>
              <P>
                <E T="03">Receiving report</E> means written evidence that indicates Government acceptance of supplies delivered or services performed (see subpart 46.6). Receiving reports must meet the requirements of 32.905(c).<PRTPAGE P="36"/>
              </P>
              <P>
                <E T="03">Recovered material</E> means waste materials and by-products recovered or diverted from solid waste, but the term does not include those materials and by-products generated from, and commonly reused within, an original manufacturing process. For use in subpart 11.3 for paper and paper products, see the definition at 11.301.</P>
              <P>
                <E T="03">Registered in the CCR database</E> means that—</P>
              <P>(1) The contractor has entered all mandatory information, including the DUNS number or the DUNS+4 number, into the CCR database; and</P>
              <P>(2) The Government has validated all mandatory data fields, to include validation of the Taxpayer Identification Number (TIN) with the Internal Revenue Service (IRS), and has marked the record “Active”. The contractor will be required to provide consent for TIN validation to the Government as a part of the CCR registration process.</P>
              <P>
                <E T="03">Renewable energy</E> means energy produced by solar, wind, geothermal, and biomass power.</P>
              <P>
                <E T="03">Renewable energy technology</E> means—</P>
              <P>(1) Technologies that use renewable energy to provide light, heat, cooling, or mechanical or electrical energy for use in facilities or other activities; or</P>
              <P>(2) The use of integrated whole-building designs that rely upon renewable energy resources, including passive solar design.</P>
              <P>
                <E T="03">Residual value</E> means the proceeds, less removal and disposal costs, if any, realized upon disposition of a tangible capital asset. It usually is measured by the net proceeds from the sale or other disposition of the asset, or its fair value if the asset is traded in on another asset. The estimated residual value is a current forecast of the residual value.</P>
              <P>
                <E T="03">Responsible audit agency</E> means the agency that is responsible for performing all required contract audit services at a business unit.</P>
              <P>
                <E T="03">Responsible prospective contractor</E> means a contractor that meets the standards in 9.104.</P>
              <P>
                <E T="03">Scrap</E> means personal property that has no value except its basic metallic, mineral, or organic content.</P>
              <P>
                <E T="03">Segment</E> means one of two or more divisions, product departments, plants, or other subdivisions of an organization reporting directly to a home office, usually identified with responsibility for profit and/or producing a product or service. The term includes—</P>
              <P>(1) Government-owned contractor-operated (GOCO) facilities; and</P>
              <P>(2) Joint ventures and subsidiaries (domestic and foreign) in which the organization has—</P>
              <P>(i) A majority ownership; or</P>
              <P>(ii) Less than a majority ownership, but over which it exercises control.</P>
              <P>
                <E T="03">Self-insurance</E> means the assumption or retention of the risk of loss by the contractor, whether voluntarily or involuntarily. Self-insurance includes the deductible portion of purchased insurance.</P>
              <P>
                <E T="03">Senior procurement executive</E> means the individual appointed pursuant to section 16(3) of the Office of Federal Procurement Policy Act (41 U.S.C. 414(3)) who is responsible for management direction of the acquisition system of the executive agency, including implementation of the unique acquisition policies, regulations, and standards of the executive agency.</P>
              <P>
                <E T="03">Service-disabled veteran-owned small business concern</E>—</P>
              <P>(1) Means a small business concern—</P>
              <P>(i) Not less than 51 percent of which is owned by one or more service-disabled veterans or, in the case of any publicly owned business, not less than 51 percent of the stock of which is owned by one or more service-disabled veterans; and</P>
              <P>(ii) The management and daily business operations of which are controlled by one or more service-disabled veterans or, in the case of a service-disabled veteran with permanent and severe disability, the spouse or permanent caregiver of such veteran.</P>
              <P>(2) Service-disabled veteran means a veteran, as defined in 38 U.S.C. 101(2), with a disability that is service-connected, as defined in 38 U.S.C. 101(16).</P>
              <P>
                <E T="03">Shall</E> denotes the imperative.</P>
              <P>
                <E T="03">Shipment</E> means freight transported or to be transported.</P>
              <P>
                <E T="03">Shop drawings</E> means drawings submitted by the construction contractor or a subcontractor at any tier or required under a construction contract, showing in detail either or both of the following:<PRTPAGE P="37"/>
              </P>
              <P>(1) The proposed fabrication and assembly of structural elements.</P>
              <P>(2) The installation (<E T="03">i.e.,</E> form, fit, and attachment details) of materials or equipment.</P>
              <P>
                <E T="03">Should</E> means an expected course of action or policy that is to be followed unless inappropriate for a particular circumstance.</P>
              <P>
                <E T="03">Signature</E> or <E T="03">signed</E> means the discrete, verifiable symbol of an individual which, when affixed to a writing with the knowledge and consent of the individual, indicates a present intention to authenticate the writing. This includes electronic symbols.</P>
              <P>
                <E T="03">Simplified acquisition procedures</E> means the methods prescribed in part 13 for making purchases of supplies or services.</P>
              <P>
                <E T="03">Simplified acquisition threshold</E> means $100,000, except for acquisitions of supplies or services that, as determined by the head of the agency, are to be used to support a contingency operation or to facilitate defense against or recovery from nuclear, biological, chemical, or radiological attack (41 U.S.C. 428a), the term means—</P>
              <P>(1) $250,000 for any contract to be awarded and performed, or purchase to be made, inside the United States; and</P>
              <P>(2) $1 million for any contract to be awarded and performed, or purchase to be made, outside the United States.</P>
              <P>
                <E T="03">Single, Governmentwide point of entry,</E> means the one point of entry to be designated by the Administrator of OFPP that will allow the private sector to electronically access procurement opportunities Governmentwide.</P>
              <P>
                <E T="03">Small business subcontractor</E> means a concern, including affiliates, that for subcontracts valued at—</P>
              <P>(1) $10,000 or less, does not have more than 500 employees; and</P>
              <P>(2) More than $10,000, does not have employees or average annual receipts exceeding the size standard in 13 CFR part 121 (see 19.102) for the product or service it is providing on the subcontract.</P>
              <P>
                <E T="03">Small disadvantaged business concern</E> (except for 52.212-3(c)(2) and 52.219-1(b)(2) for general statistical purposes and 52.212-3(c)(7)(ii), 52.219-22(b)(2), and 52.219-23(a) for joint ventures under the price evaluation adjustment for small disadvantaged business concerns), means an offeror that represents, as part of its offer, that it is a small business under the size standard applicable to the acquisition; and either—</P>
              <P>(1) It has received certification as a small disadvantaged business concern consistent with 13 CFR part 124, subpart B; and</P>
              <P>(i) No material change in disadvantaged ownership and control has occurred since its certification;</P>
              <P>(ii) Where the concern is owned by one or more disadvantaged individuals, the net worth of each individual upon whom the certification is based does not exceed $750,000 after taking into account the applicable exclusions set forth at 13 CFR 124.104(c)(2); and</P>
              <P>(iii) It is identified, on the date of its representation, as a certified small disadvantaged business concern in the data base maintained by the Small Business Administration (PRO-Net); or</P>
              <P>(2) For a prime contractor, it has submitted a completed application to the Small Business Administration or a private certifier to be certified as a small disadvantaged business concern in accordance with 13 CFR part 124, subpart B, and a decision on that application is pending, and that no material change in disadvantaged ownership and control has occurred since it submitted its application. In this case, a contractor must receive certification as a small disadvantaged business by the Small Business Administration prior to contract award.</P>
              <P>
                <E T="03">Sole source acquisition</E> means a contract for the purchase of supplies or services that is entered into or proposed to be entered into by an agency after soliciting and negotiating with only one source.</P>
              <P>
                <E T="03">Solicitation</E> means any request to submit offers or quotations to the Government. Solicitations under sealed bid procedures are called “invitations for bids.” <E T="03">Solicitations</E> under negotiated procedures are called “requests for proposals.” Solicitations under simplified acquisition procedures may require submission of either a quotation or an offer.</P>
              <P>
                <E T="03">Solicitation provision</E> or <E T="03">provision</E> means a term or condition used only in solicitations and applying only before contract award.<PRTPAGE P="38"/>
              </P>
              <P>
                <E T="03">Source selection information</E> means any of the following information that is prepared for use by an agency for the purpose of evaluating a bid or proposal to enter into an agency procurement contract, if that information has not been previously made available to the public or disclosed publicly:</P>
              <P>(1) Bid prices submitted in response to an agency invitation for bids, or lists of those bid prices before bid opening.</P>
              <P>(2) Proposed costs or prices submitted in response to an agency solicitation, or lists of those proposed costs or prices.</P>
              <P>(3) Source selection plans.</P>
              <P>(4) Technical evaluation plans.</P>
              <P>(5) Technical evaluations of proposals.</P>
              <P>(6) Cost or price evaluations of proposals.</P>
              <P>(7) Competitive range determinations that identify proposals that have a reasonable chance of being selected for award of a contract.</P>
              <P>(8) Rankings of bids, proposals, or competitors.</P>
              <P>(9) Reports and evaluations of source selection panels, boards, or advisory councils.</P>
              <P>(10) Other information marked as “Source Selection Information—See FAR 2.101 and 3.104” based on a case-by-case determination by the head of the agency or the contracting officer, that its disclosure would jeopardize the integrity or successful completion of the Federal agency procurement to which the information relates.</P>
              <P>
                <E T="03">Special competency</E> means a special or unique capability, including qualitative aspects, developed incidental to the primary functions of the Federally Funded Research and Development Centers to meet some special need.</P>
              <P>
                <E T="03">Special test equipment</E> means either single or multipurpose integrated test units engineered, designed, fabricated, or modified to accomplish special purpose testing in performing a contract. It consists of items or assemblies of equipment including foundations and similar improvements necessary for installing special test equipment, and standard or general purpose items or components that are interconnected and interdependent so as to become a new functional entity for special testing purposes. Special test equipment does not include material, special tooling, real property, and equipment items used for general testing purposes or property that with relatively minor expense can be made suitable for general purpose use.</P>
              <P>
                <E T="03">Special tooling</E> means jigs, dies, fixtures, molds, patterns, taps, gauges, and all components of these items including foundations and similar improvements necessary for installing special test equipment, and which are of such a specialized nature that without substantial modification or alteration their use is limited to the development or production of particular supplies or parts thereof or to the performance of particular services. Special tooling does not include material, special test equipment, real property, equipment, machine tools, or similar capital items.</P>
              <P>
                <E T="03">State and local taxes</E> means taxes levied by the States, the District of Columbia, outlying areas of the United States, or their political subdivisions.</P>
              <P>
                <E T="03">Statement of Objectives (SOO)</E> means a Government-prepared document incorporated into the solicitation that states the overall performance objectives. It is used in solicitations when the Government intends to provide the maximum flexibility to each offeror to propose an innovative approach.</P>
              <P>
                <E T="03">Substantial evidence</E> means information sufficient to support the reasonable belief that a particular act or omission has occurred.</P>
              <P>
                <E T="03">Substantially as follows</E> or <E T="03">substantially the same as,</E> when used in the prescription and introductory text of a provision or clause, means that authorization is granted to prepare and utilize a variation of that provision or clause to accommodate requirements that are peculiar to an individual acquisition; provided that the variation includes the salient features of the FAR provision or clause, and is not inconsistent with the intent, principle, and substance of the FAR provision or clause or related coverage of the subject matter.</P>
              <P>
                <E T="03">Supplemental agreement</E> means a contract modification that is accomplished by the mutual action of the parties.<PRTPAGE P="39"/>
              </P>
              <P>
                <E T="03">Supplies</E> means all property except land or interest in land. It includes (but is not limited to) public works, buildings, and facilities; ships, floating equipment, and vessels of every character, type, and description, together with parts and accessories; aircraft and aircraft parts, accessories, and equipment; machine tools; and the alteration or installation of any of the foregoing.</P>
              <P>
                <E T="03">Surety</E> means an individual or corporation legally liable for the debt, default, or failure of a principal to satisfy a contractual obligation. The types of sureties referred to are as follows:</P>
              <P>(1) An individual surety is one person, as distinguished from a business entity, who is liable for the entire penal amount of the bond.</P>
              <P>(2) A corporate surety is licensed under various insurance laws and, under its charter, has legal power to act as surety for others.</P>
              <P>(3) A cosurety is one of two or more sureties that are jointly liable for the penal sum of the bond. A limit of liability for each surety may be stated.</P>
              <P>
                <E T="03">Suspension</E> means action taken by a suspending official under 9.407 to disqualify a contractor temporarily from Government contracting and Government-approved subcontracting; a contractor that is disqualified is “suspended.”</P>
              <P>
                <E T="03">Task order</E> means an order for services placed against an established contract or with Government sources.</P>
              <P>
                <E T="03">Taxpayer Identification Number (TIN)</E> means the number required by the IRS to be used by the offeror in reporting income tax and other returns. The TIN may be either a Social Security Number or an Employer Identification Number.</P>
              <P>
                <E T="03">Termination for convenience</E> means the exercise of the Government's right to completely or partially terminate performance of work under a contract when it is in the Government's interest.</P>
              <P>
                <E T="03">Termination for default</E> means the exercise of the Government's right to completely or partially terminate a contract because of the contractor's actual or anticipated failure to perform its contractual obligations.</P>
              <P>
                <E T="03">Terminated portion of the contract</E> means the portion of a contract that the contractor is not to perform following a partial termination. For construction contracts that have been completely terminated for convenience, it means the entire contract, notwithstanding the completion of, and payment for, individual items of work before termination.</P>
              <P>
                <E T="03">Termination inventory</E> means any property purchased, supplied, manufactured, furnished, or otherwise acquired for the performance of a contract subsequently terminated and properly allocable to the terminated portion of the contract. It includes Government-furnished property. It does not include any facilities, material, special test equipment, or special tooling that are subject to a separate contract or to a special contract requirement governing their use or disposition.</P>
              <P>
                <E T="03">Unallowable cost</E> means any cost that, under the provisions of any pertinent law, regulation, or contract, cannot be included in prices, cost-reimbursements, or settlements under a Government contract to which it is allocable.</P>
              <P>
                <E T="03">Unique and innovative concept,</E> when used relative to an unsolicited research proposal, means that—</P>
              <P>(1) In the opinion and to the knowledge of the Government evaluator, the meritorious proposal—</P>
              <P>(i) Is the product of original thinking submitted confidentially by one source;</P>
              <P>(ii) Contains new, novel, or changed concepts, approaches, or methods;</P>
              <P>(iii) Was not submitted previously by another; and</P>
              <P>(iv) Is not otherwise available within the Federal Government.</P>
              <P>(2) In this context, the term does not mean that the source has the sole capability of performing the research.</P>
              <P>
                <E T="03">United States,</E> when used in a geographic sense, means the 50 States and the District of Columbia, except as follows:</P>
              <P>(1) For use in subpart 22.8, see the definition at 22.801.</P>
              <P>(2) For use in subpart 22.10, see the definition at 22.1001.</P>
              <P>(3) For use in subpart 22.13, see the definition at 22.1301.</P>
              <P>(4) For use in Subpart 22.16, see the definition at 22.1601.</P>

              <P>(5) For use in part 25, see the definition at 25.003.<PRTPAGE P="40"/>
              </P>
              <P>(6) For use in subpart 47.4, see the definition at 47.401.</P>
              <P>
                <E T="03">Unsolicited proposal</E> means a written proposal for a new or innovative idea that is submitted to an agency on the initiative of the offeror for the purpose of obtaining a contract with the Government, and that is not in response to a request for proposals, Broad Agency Announcement, Small Business Innovation Research topic, Small Business Technology Transfer Research topic, Program Research and Development Announcement, or any other Government-initiated solicitation or program.</P>
              <P>
                <E T="03">Value engineering</E> means an analysis of the functions of a program, project, system, product, item of equipment, building, facility, service, or supply of an executive agency, performed by qualified agency or contractor personnel, directed at improving performance, reliability, quality, safety, and life-cycle costs (section 36 of the Office of Federal Procurement Policy Act, 41 U.S.C. 401, <E T="03">et seq.</E>). For use in the clause at 52.248-2, see the definition at 52.248-2(b).</P>
              <P>
                <E T="03">Value engineering change proposal</E> (VECP)-(1) means a proposal that—</P>
              <P>(i) Requires a change to the instant contract to implement; and</P>
              <P>(ii) Results in reducing the overall projected cost to the agency without impairing essential functions or characteristics, provided that it does not involve a change—</P>
              <P>(A) In deliverable end item quantities only;</P>
              <P>(B) In research and development (R&amp;D) items or R&amp;D test quantities that are due solely to results of previous testing under the instant contract; or</P>
              <P>(C) To the contract type only.</P>
              <P>(2) For use in the clauses at—</P>
              <P>(i) 52.248-2, see the definition at 52.248-2(b); and</P>
              <P>(ii) 52.248-3, see the definition at 52.248-3(b).</P>
              <P>
                <E T="03">Veteran-owned small business concern</E> means a small business concern—</P>
              <P>(1) Not less than 51 percent of which is owned by one or more veterans (as defined at 38 U.S.C. 101(2)) or, in the case of any publicly owned business, not less than 51 percent of the stock of which is owned by one or more veterans; and</P>
              <P>(2) The management and daily business operations of which are controlled by one or more veterans.</P>
              <P>
                <E T="03">Virgin material</E> means—</P>
              <P>(1) Previously unused raw material, including previously unused copper, aluminum, lead, zinc, iron, other metal or metal ore; or</P>
              <P>(2) Any undeveloped resource that is, or with new technology will become, a source of raw materials.</P>
              <P>
                <E T="03">Voluntary consensus standards</E> means common and repeated use of rules, conditions, guidelines or characteristics for products, or related processes and production methods and related management systems. Voluntary Consensus Standards are developed or adopted by domestic and international voluntary consensus standard making bodies (<E T="03">e.g.</E>, International Organization for Standardization (ISO) and ASTM-International). See OMB Circular A-119.</P>
              <P>
                <E T="03">Warranty</E> means a promise or affirmation given by a contractor to the Government regarding the nature, usefulness, or condition of the supplies or performance of services furnished under the contract.</P>
              <P>
                <E T="03">Waste reduction</E> means preventing or decreasing the amount of waste being generated through waste prevention, recycling, or purchasing recycled and environmentally preferable products.</P>
              <P>
                <E T="03">Women-owned small business concern</E> means a small business concern—</P>
              <P>(1) That is at least 51 percent owned by one or more women; or, in the case of any publicly owned business, at least 51 percent of the stock of which is owned by one or more women; and</P>

              <P>(2) Whose management and daily business operations are controlled by one or more women.<PRTPAGE P="41"/>
              </P>
              <P>
                <E T="03">Writing</E> or <E T="03">written</E> (see “in writing”).</P>
              <CITA>[66 FR 2118, Jan. 10, 2001, as amended at 66 FR 20896, Apr. 25, 2001; 66 FR 22083, May 2, 2001; 66 FR 27012, May 15, 2001; 66 FR 27409, May 16, 2001; 66 FR 53484, 53486, 53488, Oct. 22, 2001; 66 FR 65350, 65352, 65354, Dec. 18, 2001; 67 FR 6114, Feb. 8, 2002; 67 FR 13055, Mar. 20, 2002; 67 FR 42313, June 27, 2002; 67 FR 56121, Aug. 30, 2002; 67 FR 56118, Aug. 30, 2002; 68 FR 4049, Jan. 27, 2003; 68 FR 28080, May 22, 2003; 68 FR 28091, May 22, 2003; 68 FR 43858, July 24, 2003; 68 FR 56672, 56678, Oct. 1, 2003; 68 FR 60004, Oct. 20, 2003; 68 FR 69247, Dec. 11, 2003; 69 FR 8313, Feb. 23, 2004; 69 FR 17744, 17766, Apr. 5, 2004; 69 FR 25275, May 5, 2004; 69 FR 34227, 34228, June 18, 2004; 69 FR 76351, 76353, 76345, 76349, 76351, Dec. 20, 2004; 70 FR 11738, Mar. 9, 2005; 70 FR 43578, July 27, 2005; 70 FR 57451, 57454, Sept. 30, 2005; 70 FR 69100, Nov. 14, 2005; 71 FR 210, 217, Jan. 3, 2006; 71 FR 20297, 20299, Apr. 19, 2006; 71 FR 36924, June 28, 2006; 71 FR 38245, July 5, 2006; 71 FR 57365, Sept. 28, 2006; 71 FR 67774, Nov. 22, 2006; 71 FR 74676, Dec. 12, 2006; 72 FR 27383, May 15, 2007]</CITA>
            </SECTION>
          </SUBPART>
          <SUBPART>
            <HD SOURCE="HED">Subpart 2.2—Definitions Clause</HD>
            <SECTION>
              <SECTNO>2.201</SECTNO>
              <SUBJECT>Contract clause.</SUBJECT>
              <P>Insert the clause at 52.202-1, Definitions, in solicitations and contracts that exceed the simplified acquisition threshold.</P>
              <CITA>[69 FR 34228, June 18, 2004]</CITA>
            </SECTION>
          </SUBPART>
        </PART>
        <PART>
          <EAR>Pt. 3</EAR>
          <HD SOURCE="HED">PART 3—IMPROPER BUSINESS PRACTICES AND PERSONAL CONFLICTS OF INTEREST</HD>
          <CONTENTS>
            <SECHD>Sec.</SECHD>
            <SECTNO>3.000</SECTNO>
            <SUBJECT>Scope of part.</SUBJECT>
            <SUBPART>
              <HD SOURCE="HED">Subpart 3.1—Safeguards</HD>
              <SECTNO>3.101</SECTNO>
              <SUBJECT>Standards of conduct.</SUBJECT>
              <SECTNO>3.101-1</SECTNO>
              <SUBJECT>General.</SUBJECT>
              <SECTNO>3.101-2</SECTNO>
              <SUBJECT>Solicitation and acceptance of gratuities by Government personnel.</SUBJECT>
              <SECTNO>3.101-3</SECTNO>
              <SUBJECT>Agency regulations.</SUBJECT>
              <SECTNO>3.102</SECTNO>
              <SUBJECT>[Reserved]</SUBJECT>
              <SECTNO>3.103</SECTNO>
              <SUBJECT>Independent pricing.</SUBJECT>
              <SECTNO>3.103-1</SECTNO>
              <SUBJECT>Solicitation provision.</SUBJECT>
              <SECTNO>3.103-2</SECTNO>
              <SUBJECT>Evaluating the certification.</SUBJECT>
              <SECTNO>3.103-3</SECTNO>
              <SUBJECT>The need for further certifications.</SUBJECT>
              <SECTNO>3.104</SECTNO>
              <SUBJECT>Procurement integrity.</SUBJECT>
              <SECTNO>3.104-1</SECTNO>
              <SUBJECT>Definitions.</SUBJECT>
              <SECTNO>3.104-2</SECTNO>
              <SUBJECT>General.</SUBJECT>
              <SECTNO>3.104-3</SECTNO>
              <SUBJECT>Statutory and related prohibitions, restrictions, and requirements.</SUBJECT>
              <SECTNO>3.104-4</SECTNO>
              <SUBJECT>Disclosure, protection, and marking of contractor bid or proposal information and source selection information.</SUBJECT>
              <SECTNO>3.104-5</SECTNO>
              <SUBJECT>Disqualification.</SUBJECT>
              <SECTNO>3.104-6</SECTNO>
              <SUBJECT>Ethics advisory opinions regarding prohibitions on a former official's acceptance of compensation from a contractor.</SUBJECT>
              <SECTNO>3.104-7</SECTNO>
              <SUBJECT>Violations or possible violations.</SUBJECT>
              <SECTNO>3.104-8</SECTNO>
              <SUBJECT>Criminal and civil penalties, and further administrative remedies. </SUBJECT>
              <SECTNO>3.104-9</SECTNO>
              <SUBJECT>Contract clauses.</SUBJECT>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart 3.2—Contractor Gratuities to Government Personnel</HD>
              <SECTNO>3.201</SECTNO>
              <SUBJECT>Applicability.</SUBJECT>
              <SECTNO>3.202</SECTNO>
              <SUBJECT>Contract clause.</SUBJECT>
              <SECTNO>3.203</SECTNO>
              <SUBJECT>Reporting suspected violations of the Gratuities clause.</SUBJECT>
              <SECTNO>3.204</SECTNO>
              <SUBJECT>Treatment of violations.</SUBJECT>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart 3.3—Reports of Suspected Antitrust Violations</HD>
              <SECTNO>3.301</SECTNO>
              <SUBJECT>General.</SUBJECT>
              <SECTNO>3.302</SECTNO>
              <SUBJECT>Definitions.</SUBJECT>
              <SECTNO>3.303</SECTNO>
              <SUBJECT>Reporting suspected antitrust violations.</SUBJECT>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart 3.4—Contingent Fees</HD>
              <SECTNO>3.400</SECTNO>
              <SUBJECT>Scope of subpart.</SUBJECT>
              <SECTNO>3.401</SECTNO>
              <SUBJECT>Definitions.</SUBJECT>
              <SECTNO>3.402</SECTNO>
              <SUBJECT>Statutory requirements.</SUBJECT>
              <SECTNO>3.403</SECTNO>
              <SUBJECT>Applicability.</SUBJECT>
              <SECTNO>3.404</SECTNO>
              <SUBJECT>Contract clause.</SUBJECT>
              <SECTNO>3.405</SECTNO>
              <SUBJECT>Misrepresentations or violations of the Covenant Against Contingent Fees.</SUBJECT>
              <SECTNO>3.406</SECTNO>
              <SUBJECT>Records.</SUBJECT>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart 3.5—Other Improper Business Practices</HD>
              <SECTNO>3.501</SECTNO>
              <SUBJECT>Buying-in.</SUBJECT>
              <SECTNO>3.501-1</SECTNO>
              <SUBJECT>Definition.</SUBJECT>
              <SECTNO>3.501-2</SECTNO>
              <SUBJECT>General.</SUBJECT>
              <SECTNO>3.502</SECTNO>
              <SUBJECT>Subcontractor kickbacks.</SUBJECT>
              <SECTNO>3.502-1</SECTNO>
              <SUBJECT>Definitions.</SUBJECT>
              <SECTNO>3.502-2</SECTNO>
              <SUBJECT>Subcontractor kickbacks.</SUBJECT>
              <SECTNO>3.502-3</SECTNO>
              <SUBJECT>Contract clause.</SUBJECT>
              <SECTNO>3.503</SECTNO>
              <SUBJECT>Unreasonable restrictions on subcontractor sales.</SUBJECT>
              <SECTNO>3.503-1</SECTNO>
              <SUBJECT>Policy.</SUBJECT>
              <SECTNO>3.503-2</SECTNO>
              <SUBJECT>Contract clause.</SUBJECT>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart 3.6—Contracts With Government Employees or Organizations Owned or Controlled by Them</HD>
              <SECTNO>3.601</SECTNO>
              <SUBJECT>Policy.</SUBJECT>
              <SECTNO>3.602</SECTNO>
              <SUBJECT>Exceptions.</SUBJECT>
              <SECTNO>3.603</SECTNO>
              <SUBJECT>Responsibilities of the contracting officer.</SUBJECT>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart 3.7—Voiding and Rescinding Contracts</HD>
              <SECTNO>3.700</SECTNO>
              <SUBJECT>Scope of subpart.</SUBJECT>
              <SECTNO>3.701</SECTNO>
              <SUBJECT>Purpose.</SUBJECT>
              <SECTNO>3.702</SECTNO>
              <SUBJECT>Definition.</SUBJECT>
              <SECTNO>3.703</SECTNO>
              <SUBJECT>Authority.<PRTPAGE P="42"/>
              </SUBJECT>
              <SECTNO>3.704</SECTNO>
              <SUBJECT>Policy.</SUBJECT>
              <SECTNO>3.705</SECTNO>
              <SUBJECT>Procedures.</SUBJECT>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart 3.8—Limitation on the Payment of Funds To Influence Federal Transactions</HD>
              <SECTNO>3.800</SECTNO>
              <SUBJECT>Scope of subpart.</SUBJECT>
              <SECTNO>3.801</SECTNO>
              <SUBJECT>Definitions.</SUBJECT>
              <SECTNO>3.802</SECTNO>
              <SUBJECT>Statutory prohibition and requirement.</SUBJECT>
              <SECTNO>3.803</SECTNO>
              <SUBJECT>Exceptions.</SUBJECT>
              <SECTNO>3.804</SECTNO>
              <SUBJECT>Policy.</SUBJECT>
              <SECTNO>3.805</SECTNO>
              <SUBJECT>Exemption.</SUBJECT>
              <SECTNO>3.806</SECTNO>
              <SUBJECT>Processing suspected violations.</SUBJECT>
              <SECTNO>3.807</SECTNO>
              <SUBJECT>Civil penalties.</SUBJECT>
              <SECTNO>3.808</SECTNO>
              <SUBJECT>Solicitation provision and contract clause.</SUBJECT>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart 3.9—Whistleblower Protections for Contractor Employees</HD>
              <SECTNO>3.900</SECTNO>
              <SUBJECT>Scope of subpart.</SUBJECT>
              <SECTNO>3.901</SECTNO>
              <SUBJECT>Definitions.</SUBJECT>
              <SECTNO>3.902</SECTNO>
              <SUBJECT>Applicability.</SUBJECT>
              <SECTNO>3.903</SECTNO>
              <SUBJECT>Policy.</SUBJECT>
              <SECTNO>3.904</SECTNO>
              <SUBJECT>Procedures for filing complaints.</SUBJECT>
              <SECTNO>3.905</SECTNO>
              <SUBJECT>Procedures for investigating complaints.</SUBJECT>
              <SECTNO>3.906</SECTNO>
              <SUBJECT>Remedies.</SUBJECT>
            </SUBPART>
          </CONTENTS>
          <AUTH>
            <HD SOURCE="HED">Authority:</HD>
            <P>40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 42 U.S.C. 2473(c).</P>
          </AUTH>
          <SOURCE>
            <HD SOURCE="HED">Source:</HD>
            <P>48 FR 42108, Sept. 19, 1983, unless otherwise noted.</P>
          </SOURCE>
          <SECTION>
            <SECTNO>3.000</SECTNO>
            <SUBJECT>Scope of part.</SUBJECT>
            <P>This part prescribes policies and procedures for avoiding improper business practices and personal conflicts of interest and for dealing with their apparent or actual occurrence.</P>
          </SECTION>
          <SUBPART>
            <HD SOURCE="HED">Subpart 3.1—Safeguards</HD>
            <SECTION>
              <SECTNO>3.101</SECTNO>
              <SUBJECT>Standards of conduct.</SUBJECT>
            </SECTION>
            <SECTION>
              <SECTNO>3.101-1</SECTNO>
              <SUBJECT>General.</SUBJECT>
              <P>Government business shall be conducted in a manner above reproach and, except as authorized by statute or regulation, with complete impartiality and with preferential treatment for none. Transactions relating to the expenditure of public funds require the highest degree of public trust and an impeccable standard of conduct. The general rule is to avoid strictly any conflict of interest or even the appearance of a conflict of interest in Government-contractor relationships. While many Federal laws and regulations place restrictions on the actions of Government personnel, their official conduct must, in addition, be such that they would have no reluctance to make a full public disclosure of their actions.</P>
            </SECTION>
            <SECTION>
              <SECTNO>3.101-2</SECTNO>
              <SUBJECT>Solicitation and acceptance of gratuities by Government personnel.</SUBJECT>
              <P>As a rule, no Government employee may solicit or accept, directly or indirectly, any gratuity, gift, favor, entertainment, loan, or anything of monetary value from anyone who (a) has or is seeking to btain Government business with the employee's agency, (b) conducts activities that are regulated by the employee's agency, or (c) has interests that may be substantially affected by the performance or nonperformance of the employee's official duties. Certain limited exceptions are authorized in agency regulations.</P>
            </SECTION>
            <SECTION>
              <SECTNO>3.101-3</SECTNO>
              <SUBJECT>Agency regulations.</SUBJECT>

              <P>(a) Agencies are required by Executive Order 11222 of May 8, 1965, and 5 CFR part 735 to prescribe <E T="03">Standards of Conduct.</E> These agency standards contain—</P>
              <P>(1) Agency-authorized exceptions to 3.101-2; and</P>
              <P>(2) Disciplinary measures for persons violating the standards of conduct.</P>
              <P>(b) Requirements for employee financial disclosure and restrictions on private employment for former Government employees are in Office of Personnel Management and agency regulations implementing Public Law 95-521, which amended 18 U.S.C. 207.</P>
            </SECTION>
            <SECTION>
              <SECTNO>3.102</SECTNO>
              <RESERVED>[Reserved]</RESERVED>
            </SECTION>
            <SECTION>
              <SECTNO>3.103</SECTNO>
              <SUBJECT>Independent pricing.</SUBJECT>
            </SECTION>
            <SECTION>
              <SECTNO>3.103-1</SECTNO>
              <SUBJECT>Solicitation provision.</SUBJECT>
              <P>The contracting officer shall insert the provision at 52.203-2, Certificate of Independent Price Determination, in solicitations when a firm-fixed-price contract or fixed-price contract with economic price adjustment is contemplated, unless—</P>
              <P>(a) The acquisition is to be made under the simplified acquisition procedures in part 13;</P>
              <P>(b) [Reserved]</P>

              <P>(c) The solicitation is a request for technical proposals under two-step sealed bidding procedures; or<PRTPAGE P="43"/>
              </P>
              <P>(d) The solicitation is for utility services for which rates are set by law or regulation.</P>
              <CITA>[48 FR 42108, Sept. 19, 1983, as amended at 50 FR 1727, Jan. 11, 1985; 50 FR 52429, Dec. 23, 1985; 55 FR 25526, June 21, 1990; 60 FR 34744, July 3, 1995]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>3.103-2</SECTNO>
              <SUBJECT>Evaluating the certification.</SUBJECT>
              <P>(a) <E T="03">Evaluation guidelines.</E> (1) None of the following, in and of itself, constitutes <E T="03">disclosure</E> as it is used in subparagraph (a)(2) of the Certificate of Independent Price Determination (hereafter, the certificate):</P>
              <P>(i) The fact that a firm has published price lists, rates, or tariffs covering items being acquired by the Government.</P>
              <P>(ii) The fact that a firm has informed prospective customers of proposed or pending publication of new or revised price lists for items being acquired by the Government.</P>
              <P>(iii) The fact that a firm has sold the same items to commercial customers at the same prices being offered to the Government.</P>
              <P>(2) For the purpose of subparagraph (b)(2) of the certificate, an individual may use a blanket authorization to act as an agent for the person(s) responsible for determining the offered prices if—</P>
              <P>(i) The proposed contract to which the certificate applies is clearly within the scope of the authorization; and</P>
              <P>(ii) The person giving the authorization is the person within the offeror's organization who is responsible for determining the prices being offered at the time the certification is made in the particular offer.</P>
              <P>(3) If an offer is submitted jointly by two or more concerns, the certification provided by the representative of each concern applies only to the activities of that concern.</P>
              <P>(b) <E T="03">Rejection of offers suspected of being collusive.</E> (1) If the offeror deleted or modified subparagraph (a)(1) or (a)(3) or paragraph (b) of the certificate, the contracting officer shall reject the offeror's bid or proposal.</P>
              <P>(2) If the offeror deleted or modified subparagraph (a)(2) of the certificate, the offeror must have furnished with its offer a signed statement of the circumstances of the disclosure of prices contained in the bid or proposal. The chief of the contracting office shall review the altered certificate and the statement and shall determine, in writing, whether the disclosure was made for the purpose or had the effect of restricting competition. If the determination is positive, the bid or proposal shall be rejected; if it is negative, the bid or proposal shall be considered for award.</P>
              <P>(3) Whenever an offer is rejected under subparagraph (1) or (2) above, or the certificate is suspected of being false, the contracting officer shall report the situation to the Attorney General in accordance with 3.303.</P>
              <P>(4) The determination made under subparagraph (2) above shall not prevent or inhibit the prosecution of any criminal or civil actions involving the occurrences or transactions to which the certificate relates.</P>
              <CITA>[48 FR 42108, Sept. 19, 1983, as amended at 55 FR 25526, June 21, 1990]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>3.103-3</SECTNO>
              <SUBJECT>The need for further certifications.</SUBJECT>
              <P>A contractor that properly executed the certificate before award does not have to submit a separate certificate with each proposal to perform a work order or similar ordering instrument issued pursuant to the terms of the contract, where the Government's requirements cannot be met from another source.</P>
            </SECTION>
            <SECTION>
              <SECTNO>3.104</SECTNO>
              <SUBJECT>Procurement integrity.</SUBJECT>
            </SECTION>
            <SECTION>
              <SECTNO>3.104-1</SECTNO>
              <SUBJECT>Definitions.</SUBJECT>
              <P>As used in this section—</P>
              <P>
                <E T="03">Agency ethics official</E> means the designated agency ethics official described in 5 CFR 2638.201 or other designated person, including—</P>
              <P>(1) Deputy ethics officials described in 5 CFR 2638.204, to whom authority under 3.104-6 has been delegated by the designated agency ethics official; and</P>
              <P>(2) Alternate designated agency ethics officials described in 5 CFR 2638.202(b).</P>
              <P>
                <E T="03">Compensation</E> means wages, salaries, honoraria, commissions, professional fees, and any other form of compensation, provided directly or indirectly for <PRTPAGE P="44"/>services rendered. Compensation is indirectly provided if it is paid to an entity other than the individual, specifically in exchange for services provided by the individual.</P>
              <P>
                <E T="03">Contractor bid or proposal information</E> means any of the following information submitted to a Federal agency as part of or in connection with a bid or proposal to enter into a Federal agency procurement contract, if that information has not been previously made available to the public or disclosed publicly:</P>
              <P>(1) Cost or pricing data (as defined by 10 U.S.C. 2306a(h)) with respect to procurements subject to that section, and section 304A(h) of the Federal Property and Administrative Services Act of 1949 (41 U.S.C. 254b(h)), with respect to procurements subject to that section.</P>
              <P>(2) Indirect costs and direct labor rates.</P>
              <P>(3) Proprietary information about manufacturing processes, operations, or techniques marked by the contractor in accordance with applicable law or regulation.</P>
              <P>(4) Information marked by the contractor as “contractor bid or proposal information” in accordance with applicable law or regulation.</P>
              <P>(5) Information marked in accordance with 52.215-1(e).</P>
              <P>
                <E T="03">Decision to award a subcontract or modification of subcontract</E> means a decision to designate award to a particular source.</P>
              <P>
                <E T="03">Federal agency procurement</E> means the acquisition (by using competitive procedures and awarding a contract) of goods or services (including construction) from non-Federal sources by a Federal agency using appropriated funds. For broad agency announcements and small business innovative research programs, each proposal received by an agency constitutes a separate procurement for purposes of the Act.</P>
              <P>
                <E T="03">In excess of $10,000,000</E> means—</P>
              <P>(1) The value, or estimated value, at the time of award, of the contract, including all options;</P>
              <P>(2) The total estimated value at the time of award of all orders under an indefinite-delivery, indefinite-quantity, or requirements contract;</P>
              <P>(3) Any multiple award schedule contract, unless the contracting officer documents a lower estimate;</P>
              <P>(4) The value of a delivery order, task order, or an order under a Basic Ordering Agreement;</P>
              <P>(5) The amount paid or to be paid in settlement of a claim; or</P>
              <P>(6) The estimated monetary value of negotiated overhead or other rates when applied to the Government portion of the applicable allocation base.</P>
              <P>
                <E T="03">Official</E> means—</P>
              <P>(1) An officer, as defined in 5 U.S.C. 2104;</P>
              <P>(2) An employee, as defined in 5 U.S.C. 2105;</P>
              <P>(3) A member of the uniformed services, as defined in 5 U.S.C. 2101(3); or</P>
              <P>(4) A special Government employee, as defined in 18 U.S.C. 202.</P>
              <P>
                <E T="03">Participating personally and substantially in a Federal agency procurement</E> means—</P>
              <P>(1) Active and significant involvement of an official in any of the following activities directly related to that procurement:</P>
              <P>(i) Drafting, reviewing, or approving the specification or statement of work for the procurement.</P>
              <P>(ii) Preparing or developing the solicitation.</P>
              <P>(iii) Evaluating bids or proposals, or selecting a source.</P>
              <P>(iv) Negotiating price or terms and conditions of the contract.</P>
              <P>(v) Reviewing and approving the award of the contract.</P>
              <P>(2) <E T="03">Participating personally</E> means participating directly, and includes the direct and active supervision of a subordinate's participation in the matter.</P>
              <P>(3) <E T="03">Participating substantially</E> means that the official's involvement is of significance to the matter. Substantial participation requires more than official responsibility, knowledge, perfunctory involvement, or involvement on an administrative or peripheral issue. Participation may be substantial even though it is not determinative of the outcome of a particular matter. A finding of substantiality should be based not only on the effort devoted to a matter, but on the importance of the effort. While a series of peripheral involvements may be insubstantial, the single act of approving or participating <PRTPAGE P="45"/>in a critical step may be substantial. However, the review of procurement documents solely to determine compliance with regulatory, administrative, or budgetary procedures, does not constitute substantial participation in a procurement.</P>
              <P>(4) Generally, an official will not be considered to have participated personally and substantially in a procurement solely by participating in the following activities:</P>
              <P>(i) Agency-level boards, panels, or other advisory committees that review program milestones or evaluate and make recommendations regarding alternative technologies or approaches for satisfying broad agency-level missions or objectives.</P>
              <P>(ii) The performance of general, technical, engineering, or scientific effort having broad application not directly associated with a particular procurement, notwithstanding that such general, technical, engineering, or scientific effort subsequently may be incorporated into a particular procurement.</P>
              <P>(iii) Clerical functions supporting the conduct of a particular procurement.</P>
              <P>(iv) For procurements to be conducted under the procedures of OMB Circular A-76, participation in management studies, preparation of in-house cost estimates, preparation of “most efficient organization” analyses, and furnishing of data or technical support to be used by others in the development of performance standards, statements of work, or specifications.</P>
              <P>
                <E T="03">Source selection evaluation board</E> means any board, team, council, or other group that evaluates bids or proposals.</P>
              <CITA>[67 FR 13059, Mar. 20, 2002]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>3.104-2</SECTNO>
              <SUBJECT>General.</SUBJECT>
              <P>(a) This section implements section 27 of the Office of Federal Procurement Policy Act (the Procurement Integrity Act) (41 U.S.C. 423) referred to as “the Act”). Agency supplementation of 3.104, including specific definitions to identify individuals who occupy positions specified in 3.104-3(d)(1)(ii), and any clauses required by 3.104 must be approved by the senior procurement executive of the agency, unless a law establishes a higher level of approval for that agency.</P>
              <P>(b) Agency officials are reminded that there are other statutes and regulations that deal with the same or related prohibited conduct, for example—</P>
              <P>(1) The offer or acceptance of a bribe or gratuity is prohibited by 18 U.S.C. 201 and 10 U.S.C. 2207. The acceptance of a gift, under certain circumstances, is prohibited by 5 U.S.C. 7353 and 5 CFR part 2635;</P>
              <P>(2) Contacts with an offeror during the conduct of an acquisition may constitute “seeking employment,”(see subpart F of 5 CFR part 2636 and 3.104-3(c)(2)). Government officers and employees (employees) are prohibited by 18 U.S.C. 208 and 5 CFR part 2635 from participating personally and substantially in any particular matter that would affect the financial interests of any person with whom the employee is seeking employment. An employee who engages in negotiations or is otherwise seeking employment with an offeror or who has an arrangement concerning future employment with an offeror must comply with the applicable disqualification requirements of 5 CFR 2635.604 and 2635.606. The statutory prohibition in 18 U.S.C. 208 also may require an employee's disqualification from participation in the acquisition even if the employee's duties may not be considered “participating personally and substantially,” as this term is defined in 3.104-1;</P>
              <P>(3) Post-employment restrictions are covered by 18 U.S.C. 207 and 5 CFR parts 2637 and 2641, that prohibit certain activities by former Government employees, including representation of a contractor before the Government in relation to any contract or other particular matter involving specific parties on which the former employee participated personally and substantially while employed by the Government. Additional restrictions apply to certain senior Government employees and for particular matters under an employee's official responsibility;</P>

              <P>(4) Parts 14 and 15 place restrictions on the release of information related to procurements and other contractor information that must be protected under 18 U.S.C. 1905;<PRTPAGE P="46"/>
              </P>
              <P>(5) Release of information both before and after award (see 3.104-4) may be prohibited by the Privacy Act (5 U.S.C. 552a), the Trade Secrets Act (18 U.S.C. 1905), and other laws; and</P>
              <P>(6) Using nonpublic information to further an employee's private interest or that of another and engaging in a financial transaction using nonpublic information are prohibited by 5 CFR 2635.703.</P>
              <CITA>[67 FR 13059, Mar. 20, 2002]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>3.104-3</SECTNO>
              <SUBJECT>Statutory and related prohibitions, restrictions, and requirements.</SUBJECT>
              <P>(a) <E T="03">Prohibition on disclosing procurement information (subsection 27(a) of the Act).</E> (1) A person described in paragraph (a)(2) of this subsection must not, other than as provided by law, knowingly disclose contractor bid or proposal information or source selection information before the award of a Federal agency procurement contract to which the information relates. (See 3.104-4(a).)</P>
              <P>(2) Paragraph (a)(1) of this subsection applies to any person who—</P>
              <P>(i) Is a present or former official of the United States, or a person who is acting or has acted for or on behalf of, or who is advising or has advised the United States with respect to, a Federal agency procurement; and</P>
              <P>(ii) By virtue of that office, employment, or relationship, has or had access to contractor bid or proposal information or source selection information.</P>
              <P>(b) <E T="03">Prohibition on obtaining procurement information (subsection 27(b) of the Act).</E> A person must not, other than as provided by law, knowingly obtain contractor bid or proposal information or source selection information before the award of a Federal agency procurement contract to which the information relates.</P>
              <P>(c) <E T="03">Actions required when an agency official contacts or is contacted by an offeror regarding non-Federal employment (subsection 27(c) of the Act).</E> (1) If an agency official, participating personally and substantially in a Federal agency procurement for a contract in excess of the simplified acquisition threshold, contacts or is contacted by a person who is an offeror in that Federal agency procurement regarding possible non-Federal employment for that official, the official must—</P>
              <P>(i) Promptly report the contact in writing to the official's supervisor and to the agency ethics official; and</P>
              <P>(ii) Either reject the possibility of non-Federal employment or disqualify himself or herself from further personal and substantial participation in that Federal agency procurement (see 3.104-5) until such time as the agency authorizes the official to resume participation in that procurement, in accordance with the requirements of 18 U.S.C. 208 and applicable agency regulations, because—</P>
              <P>(A) The person is no longer an offeror in that Federal agency procurement; or</P>
              <P>(B) All discussions with the offeror regarding possible non-Federal employment have terminated without an agreement or arrangement for employment.</P>
              <P>(2) A contact is any of the actions included as “seeking employment” in 5 CFR 2635.603(b). In addition, unsolicited communications from offerors regarding possible employment are considered contacts.</P>
              <P>(3) Agencies must retain reports of employment contacts for 2 years from the date the report was submitted.</P>
              <P>(4) Conduct that complies with subsection 27(c) of the Act may be prohibited by other criminal statutes and the Standards of Ethical Conduct for Employees of the Executive Branch. See 3.104-2(b)(2).</P>
              <P>(d) <E T="03">Prohibition on former official's acceptance of compensation from a contractor (subsection 27(d) of the Act).</E> (1) A former official of a Federal agency may not accept compensation from a contractor that has been awarded a competitive or sole source contract, as an employee, officer, director, or consultant of the contractor within a period of 1 year after such former official—</P>

              <P>(i) Served, at the time of selection of the contractor or the award of a contract to that contractor, as the procuring contracting officer, the source selection authority, a member of a source selection evaluation board, or the chief of a financial or technical evaluation team in a procurement in which that contractor was selected for <PRTPAGE P="47"/>award of a contract in excess of $10,000,000;</P>
              <P>(ii) Served as the program manager, deputy program manager, or administrative contracting officer for a contract in excess of $10,000,000 awarded to that contractor; or</P>
              <P>(iii) Personally made for the Federal agency a decision to—</P>
              <P>(A) Award a contract, subcontract, modification of a contract or subcontract, or a task order or delivery order in excess of $10,000,000 to that contractor;</P>
              <P>(B) Establish overhead or other rates applicable to a contract or contracts for that contractor that are valued in excess of $10,000,000;</P>
              <P>(C) Approve issuance of a contract payment or payments in excess of $10,000,000 to that contractor; or</P>
              <P>(D) Pay or settle a claim in excess of $10,000,000 with that contractor.</P>
              <P>(2) The 1-year prohibition begins on the date—</P>
              <P>(i) Of contract award for positions described in paragraph (d)(1)(i) of this subsection, or the date of contractor selection if the official was not serving in the position on the date of award;</P>
              <P>(ii) The official last served in one of the positions described in paragraph (d)(1)(ii) of this subsection; or</P>
              <P>(iii) The official made one of the decisions described in paragraph (d)(1)(iii) of this subsection.</P>
              <P>(3) Nothing in paragraph (d)(1) of this subsection may be construed to prohibit a former official of a Federal agency from accepting compensation from any division or affiliate of a contractor that does not produce the same or similar products or services as the entity of the contractor that is responsible for the contract referred to in paragraph (d)(1) of this subsection.</P>
              <CITA>[67 FR 13059, Mar. 20, 2002]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>3.104-4</SECTNO>
              <SUBJECT>Disclosure, protection, and marking of contractor bid or proposal information and source selection information.</SUBJECT>
              <P>(a) Except as specifically provided for in this subsection, no person or other entity may disclose contractor bid or proposal information or source selection information to any person other than a person authorized, in accordance with applicable agency regulations or procedures, by the agency head or the contracting officer to receive such information.</P>
              <P>(b) Contractor bid or proposal information and source selection information must be protected from unauthorized disclosure in accordance with 14.401, 15.207, applicable law, and agency regulations.</P>
              <P>(c) Individuals unsure if particular information is source selection information, as defined in 2.101, should consult with agency officials as necessary. Individuals responsible for preparing material that may be source selection information as described at paragraph (10) of the “source selection information” definition in 2.101 must mark the cover page and each page that the individual believes contains source selection information with the legend “Source Selection Information—See FAR 2.101 and 3.104.” Although the information in paragraphs (1) through (9) of the definition in 2.101 is considered to be source selection information whether or not marked, all reasonable efforts must be made to mark such material with the same legend.</P>
              <P>(d) Except as provided in paragraph (d)(3) of this subsection, the contracting officer must notify the contractor in writing if the contracting officer believes that proprietary information, contractor bid or proposal information, or information marked in accordance with 52.215-1(e) has been inappropriately marked. The contractor that has affixed the marking must be given an opportunity to justify the marking.</P>
              <P>(1) If the contractor agrees that the marking is not justified, or does not respond within the time specified in the notice, the contracting officer may remove the marking and release the information.</P>
              <P>(2) If, after reviewing the contractor's justification, the contracting officer determines that the marking is not justified, the contracting officer must notify the contractor in writing before releasing the information.</P>
              <P>(3) For technical data marked as proprietary by a contractor, the contracting officer must follow the procedures in 27.404(h).</P>
              <P>(e) This section does not restrict or prohibit—<PRTPAGE P="48"/>
              </P>
              <P>(1) A contractor from disclosing its own bid or proposal information or the recipient from receiving that information;</P>
              <P>(2) The disclosure or receipt of information, not otherwise protected, relating to a Federal agency procurement after it has been canceled by the Federal agency, before contract award, unless the Federal agency plans to resume the procurement;</P>
              <P>(3) Individual meetings between a Federal agency official and an offeror or potential offeror for, or a recipient of, a contract or subcontract under a Federal agency procurement, provided that unauthorized disclosure or receipt of contractor bid or proposal information or source selection information does not occur; or</P>
              <P>(4) The Government's use of technical data in a manner consistent with the Government's rights in the data.</P>
              <P>(f) This section does not authorize—</P>
              <P>(1) The withholding of any information pursuant to a proper request from the Congress, any committee or subcommittee thereof, a Federal agency, the Comptroller General, or an Inspector General of a Federal agency, except as otherwise authorized by law or regulation. Any release containing contractor bid or proposal information or source selection information must clearly identify the information as contractor bid or proposal information or source selection information related to the conduct of a Federal agency procurement and notify the recipient that the disclosure of the information is restricted by section 27 of the Act;</P>
              <P>(2) The withholding of information from, or restricting its receipt by, the Comptroller General in the course of a protest against the award or proposed award of a Federal agency procurement contract;</P>
              <P>(3) The release of information after award of a contract or cancellation of a procurement if such information is contractor bid or proposal information or source selection information that pertains to another procurement; or</P>
              <P>(4) The disclosure, solicitation, or receipt of bid or proposal information or source selection information after award if disclosure, solicitation, or receipt is prohibited by law. (See 3.104-2(b)(5) and subpart 24.2.)</P>
              <CITA>[67 FR 13059, Mar. 20, 2002]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>3.104-5</SECTNO>
              <SUBJECT>Disqualification.</SUBJECT>
              <P>(a) <E T="03">Contacts through agents or other intermediaries.</E> Employment contacts between the employee and the offeror, that are conducted through agents, or other intermediaries, may require disqualification under 3.104-3(c)(1). These contacts may also require disqualification under other statutes and regulations. (See 3.104-2(b)(2).)</P>
              <P>(b) <E T="03">Disqualification notice.</E> In addition to submitting the contact report required by 3.104-3(c)(1), an agency official who must disqualify himself or herself pursuant to 3.104-3(c)(1)(ii) must promptly submit written notice of disqualification from further participation in the procurement to the contracting officer, the source selection authority if other than the contracting officer, and the agency official's immediate supervisor. As a minimum, the notice must—</P>
              <P>(1) Identify the procurement;</P>
              <P>(2) Describe the nature of the agency official's participation in the procurement and specify the approximate dates or time period of participation; and</P>
              <P>(3) Identify the offeror and describe its interest in the procurement.</P>
              <P>(c) <E T="03">Resumption of participation in a procurement.</E> (1) The official must remain disqualified until such time as the agency, at its sole and exclusive discretion, authorizes the official to resume participation in the procurement in accordance with 3.104-3(c)(1)(ii).</P>

              <P>(2) After the conditions of 3.104-3(c)(1)(ii)(A) or (B) have been met, the head of the contracting activity (HCA), after consultation with the agency ethics official, may authorize the disqualified official to resume participation in the procurement, or may determine that an additional disqualification period is necessary to protect the integrity of the procurement process. In determining the disqualification period, the HCA must consider any factors that create an appearance that the disqualified official acted without complete impartiality in the procurement. The HCA's reinstatement decision should be in writing.<PRTPAGE P="49"/>
              </P>
              <P>(3) Government officer or employee must also comply with the provisions of 18 U.S.C. 208 and 5 CFR part 2635 regarding any resumed participation in a procurement matter. Government officer or employee may not be reinstated to participate in a procurement matter affecting the financial interest of someone with whom the individual is seeking employment, unless the individual receives—</P>
              <P>(i) A waiver pursuant to 18 U.S.C. 208(b)(1) or (b)(3); or</P>
              <P>(ii) An authorization in accordance with the requirements of subpart F of 5 CFR part 2635.</P>
              <CITA>[67 FR 13059, Mar. 20, 2002]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>3.104-6</SECTNO>
              <SUBJECT>Ethics advisory opinions regarding prohibitions on a former official's acceptance of compensation from a contractor.</SUBJECT>
              <P>(a) An official or former official of a Federal agency who does not know whether he or she is or would be precluded by subsection 27(d) of the Act (see 3.104-3(d)) from accepting compensation from a particular contractor may request advice from the appropriate agency ethics official before accepting such compensation.</P>
              <P>(b) The request for an advisory opinion must be in writing, include all relevant information reasonably available to the official or former official, and be dated and signed. The request must include information about the—</P>
              <P>(1) Procurement(s), or decision(s) on matters under 3.104-3(d)(1)(iii), involving the particular contractor, in which the individual was or is involved, including contract or solicitation numbers, dates of solicitation or award, a description of the supplies or services procured or to be procured, and contract amount;</P>
              <P>(2) Individual's participation in the procurement or decision, including the dates or time periods of that participation, and the nature of the individual's duties, responsibilities, or actions; and</P>
              <P>(3) Contractor, including a description of the products or services produced by the division or affiliate of the contractor from whom the individual proposes to accept compensation.</P>
              <P>(c) Within 30 days after receipt of a request containing complete information, or as soon thereafter as practicable, the agency ethics official should issue an opinion on whether the proposed conduct would violate subsection 27(d) of the Act.</P>
              <P>(d)(1) If complete information is not included in the request, the agency ethics official may ask the requester to provide more information or request information from other persons, including the source selection authority, the contracting officer, or the requester's immediate supervisor.</P>
              <P>(2) In issuing an opinion, the agency ethics official may rely upon the accuracy of information furnished by the requester or other agency sources, unless he or she has reason to believe that the information is fraudulent, misleading, or otherwise incorrect.</P>
              <P>(3) If the requester is advised in a written opinion by the agency ethics official that the requester may accept compensation from a particular contractor, and accepts such compensation in good faith reliance on that advisory opinion, then neither the requester nor the contractor will be found to have knowingly violated subsection 27(d) of the Act. If the requester or the contractor has actual knowledge or reason to believe that the opinion is based upon fraudulent, misleading, or otherwise incorrect information, their reliance upon the opinion will not be deemed to be in good faith.</P>
              <CITA>[67 FR 13059, Mar. 20, 2002]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>3.104-7</SECTNO>
              <SUBJECT>Violations or possible violations.</SUBJECT>
              <P>(a) A contracting officer who receives or obtains information of a violation or possible violation of subsection 27(a), (b), (c), or (d) of the Act (see 3.104-3) must determine if the reported violation or possible violation has any impact on the pending award or selection of the contractor.</P>

              <P>(1) If the contracting officer concludes that there is no impact on the procurement, the contracting officer must forward the information concerning the violation or possible violation and documentation supporting a determination that there is no impact on the procurement to an individual designated in accordance with agency procedures.<PRTPAGE P="50"/>
              </P>
              <P>(i) If that individual concurs, the contracting officer may proceed with the procurement.</P>
              <P>(ii) If that individual does not concur, the individual must promptly forward the information and documentation to the HCA and advise the contracting officer to withhold award.</P>
              <P>(2) If the contracting officer concludes that the violation or possible violation impacts the procurement, the contracting officer must promptly forward the information to the HCA.</P>
              <P>(b) The HCA must review all information available and, in accordance with agency procedures, take appropriate action, such as—</P>
              <P>(1) Advise the contracting officer to continue with the procurement;</P>
              <P>(2) Begin an investigation;</P>
              <P>(3) Refer the information disclosed to appropriate criminal investigative agencies;</P>
              <P>(4) Conclude that a violation occurred; or</P>
              <P>(5) Recommend that the agency head determine that the contractor, or someone acting for the contractor, has engaged in conduct constituting an offense punishable under subsection 27(e) of the Act, for the purpose of voiding or rescinding the contract.</P>
              <P>(c) Before concluding that an offeror, contractor, or person has violated the Act, the HCA may consider that the interests of the Government are best served by requesting information from appropriate parties regarding the violation or possible violation.</P>
              <P>(d) If the HCA concludes that section 27 of the Act has been violated, the HCA may direct the contracting officer to—</P>
              <P>(1) If a contract has not been awarded—</P>
              <P>(i) Cancel the procurement;</P>
              <P>(ii) Disqualify an offeror; or</P>
              <P>(iii) Take any other appropriate actions in the interests of the Government.</P>
              <P>(2) If a contract has been awarded—</P>
              <P>(i) Effect appropriate contractual remedies, including profit recapture under the clause at 52.203-10, Price or Fee Adjustment for Illegal or Improper Activity, or, if the contract has been rescinded under paragraph (d)(2)(ii) of this subsection, recovery of the amount expended under the contract;</P>
              <P>(ii) Void or rescind the contract with respect to which—</P>
              <P>(A) The contractor or someone acting for the contractor has been convicted for an offense where the conduct constitutes a violation of subsection 27(a) or (b) of the Act for the purpose of either—</P>
              <P>(<E T="03">1</E>) Exchanging the information covered by the subsections for anything of value; or</P>
              <P>(<E T="03">2</E>) Obtaining or giving anyone a competitive advantage in the award of a Federal agency procurement contract; or</P>
              <P>(B) The agency head has determined, based upon a preponderance of the evidence, that the contractor or someone acting for the contractor has engaged in conduct constituting an offense punishable under subsection 27(e)(1) of the Act; or</P>
              <P>(iii) Take any other appropriate actions in the best interests of the Government.</P>
              <P>(3) Refer the matter to the agency suspending or debarring official.</P>
              <P>(e) The HCA should recommend or direct an administrative or contractual remedy commensurate with the severity and effect of the violation.</P>
              <P>(f) If the HCA determines that urgent and compelling circumstances justify an award, or award is otherwise in the interests of the Government, the HCA, in accordance with agency procedures, may authorize the contracting officer to award the contract or execute the contract modification after notifying the agency head.</P>
              <P>(g) The HCA may delegate his or her authority under this subsection to an individual at least one organizational level above the contracting officer and of General Officer, Flag, Senior Executive Service, or equivalent rank.</P>
              <CITA>[67 FR 13059, Mar. 20, 2002]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>3.104-8</SECTNO>
              <SUBJECT>Criminal and civil penalties, and further administrative remedies.</SUBJECT>

              <P>Criminal and civil penalties, and administrative remedies, may apply to conduct that violates the Act (see 3.104-3). See 33.102(f) for special rules regarding bid protests. See 3.104-7 for administrative remedies relating to contracts.<PRTPAGE P="51"/>
              </P>
              <P>(a) An official who knowingly fails to comply with the requirements of 3.104-3 is subject to the penalties and administrative action set forth in subsection 27(e) of the Act.</P>
              <P>(b) An offeror who engages in employment discussion with an official subject to the restrictions of 3.104-3, knowing that the official has not complied with 3.104-3(c)(1), is subject to the criminal, civil, or administrative penalties set forth in subsection 27(e) of the Act.</P>
              <P>(c) An official who refuses to terminate employment discussions (see 3.104-5) may be subject to agency administrative actions under 5 CFR 2635.604(d) if the official's disqualification from participation in a particular procurement interferes substantially with the individual's ability to perform assigned duties.</P>
              <CITA>[67 FR 13059, Mar. 20, 2002]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>3.104-9</SECTNO>
              <SUBJECT>Contract clauses.</SUBJECT>
              <P>In solicitations and contracts for other than commercial items that exceed the simplified acquisition threshold, insert the clauses at—</P>
              <P>(a) 52.203-8, Cancellation, Rescission, and Recovery of Funds for Illegal or Improper Activity; and</P>
              <P>(b) 52.203-10, Price or Fee Adjustment for Illegal or Improper Activity.</P>
              <CITA>[67 FR 13059, Mar. 20, 2002]</CITA>
            </SECTION>
          </SUBPART>
          <SUBPART>
            <HD SOURCE="HED">Subpart 3.2—Contractor Gratuities to Government Personnel</HD>
            <SECTION>
              <SECTNO>3.201</SECTNO>
              <SUBJECT>Applicability.</SUBJECT>
              <P>This subpart applies to all executive agencies, except that coverage concerning exemplary damages applies only to the Department of Defense (10 U.S.C. 2207).</P>
            </SECTION>
            <SECTION>
              <SECTNO>3.202</SECTNO>
              <SUBJECT>Contract clause.</SUBJECT>
              <P>The contracting officer shall insert the clause at 52.203-3, Gratuities, in solicitations and contracts with a value exceeding the simplified acquisition threshold, except those for personal services and those between military departments or defense agencies and foreign governments that do not obligate any funds appropriated to the Department of Defense.</P>
              <CITA>[61 FR 39200, July 26, 1996]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>3.203</SECTNO>
              <SUBJECT>Reporting suspected violations of the Gratuities clause.</SUBJECT>
              <P>Agency personnel shall report suspected violations of the Gratuities clause to the contracting officer or other designated official in accordance with agency procedures. The agency reporting procedures shall be published as an implementation of this section 3.203 and shall clearly specify—</P>
              <P>(a) What to report and how to report it; and</P>
              <P>(b) The channels through which reports must pass, including the function and authority of each official designated to review them.</P>
            </SECTION>
            <SECTION>
              <SECTNO>3.204</SECTNO>
              <SUBJECT>Treatment of violations.</SUBJECT>
              <P>(a) Before taking any action against a contractor, the agency head or a designee shall determine, after notice and hearing under agency procedures, whether the contractor, its agent, or another representative, under a contract containing the Gratuities clause—</P>
              <P>(1) Offered or gave a gratuity (e.g., an entertainment or gift) to an officer, official, or employee of the Government; and</P>
              <P>(2) Intended by the gratuity to obtain a contract or favorable treatment under a contract (intent generally must be inferred).</P>
              <P>(b) Agency procedures shall afford the contractor an opportunity to appear with counsel, submit documentary evidence, present witnesses, and confront any person the agency presents. The procedures should be as informal as practicable, consistent with principles of fundamental fairness.</P>
              <P>(c) When the agency head or designee determines that a violation has occurred, the Government may—</P>
              <P>(1) Terminate the contractor's right to proceed;</P>
              <P>(2) Initiate debarment or suspension measures as set forth in subpart 9.4; and</P>
              <P>(3) Assess exemplary damages, if the contract uses money appropriated to the Department of Defense.</P>
            </SECTION>
          </SUBPART>
          <SUBPART>
            <PRTPAGE P="52"/>
            <HD SOURCE="HED">Subpart 3.3—Reports of Suspected Antitrust Violations</HD>
            <SECTION>
              <SECTNO>3.301</SECTNO>
              <SUBJECT>General.</SUBJECT>
              <P>(a) Practices that eliminate competition or restrain trade usually lead to excessive prices and may warrant criminal, civil, or administrative action against the participants. Examples of anticompetitive practices are collusive bidding, follow-the-leader pricing, rotated low bids, collusive price estimating systems, and sharing of the business.</P>
              <P>(b) Contracting personnel are an important potential source of investigative leads for antitrust enforcement and should therefore be sensitive to indications of unlawful behavior by offerors and contractors. Agency personnel shall report, in accordance with agency regulations, evidence of suspected antitrust violations in acquisitions for possible referral to (1) the Attorney General under 3.303 and (2) the agency office responsible for contractor debarment and suspension under subpart 9.4.</P>
              <CITA>[48 FR 42108, Sept. 19, 1983, as amended at 50 FR 1727, Jan. 11, 1985; 50 FR 52429, Dec. 23, 1985]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>3.302</SECTNO>
              <SUBJECT>Definitions.</SUBJECT>
              <P>As used in this subpart—</P>
              <P>
                <E T="03">Identical bids</E> means bids for the same line item that are determined to be identical as to unit price or total line item amount, with or without the application of evaluation factors (e.g., discount or transportation cost).</P>
              <P>
                <E T="03">Line item</E> means an item of supply or service, specified in a solicitation, that the offeror must separately price.</P>
              <CITA>[49 FR 12974, Mar. 30, 1984, as amended at 66 FR 2127, Jan. 10, 2001; 67 FR 13055, Mar. 20, 2002]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>3.303</SECTNO>
              <SUBJECT>Reporting suspected antitrust violations.</SUBJECT>
              <P>(a) Agencies are required by 41 U.S.C. 253b(i) and 10 U.S.C. 2305(b)(9) to report to the Attorney General any bids or proposals that evidence a violation of the antitrust laws. These reports are in addition to those required by subpart 9.4.</P>
              <P>(b) The antitrust laws are intended to ensure that markets operate competitively. Any agreement or mutual understanding among competing firms that restrains the natural operation of market forces is suspect. Paragraph (c) below identifies behavior patterns that are often associated with antitrust violations. Activities meeting the descriptions in paragraph (c) are not necessarily improper, but they are sufficiently questionable to warrant notifying the appropriate authorities, in accordance with agency procedures.</P>
              <P>(c) Practices or events that may evidence violations of the antitrust laws include—</P>
              <P>(1) The existence of an <E T="03">industry price list</E> or <E T="03">price agreement</E> to which contractors refer in formulating their offers;</P>
              <P>(2) A sudden change from competitive bidding to identical bidding;</P>
              <P>(3) Simultaneous price increases or follow-the-leader pricing;</P>
              <P>(4) Rotation of bids or proposals, so that each competitor takes a turn in sequence as low bidder, or so that certain competitors bid low only on some sizes of contracts and high on other sizes;</P>
              <P>(5) Division of the market, so that certain competitors bid low only for contracts let by certain agencies, or for contracts in certain geographical areas, or on certain products, and bid high on all other jobs;</P>
              <P>(6) Establishment by competitors of a collusive price estimating system;</P>
              <P>(7) The filing of a joint bid by two or more competitors when at least one of the competitors has sufficient technical capability and productive capacity for contract performance;</P>
              <P>(8) Any incidents suggesting direct collusion among competitors, such as the appearance of identical calculation or spelling errors in two or more competitive offers or the submission by one firm of offers for other firms; and</P>
              <P>(9) Assertions by the employees, former employees, or competitors of offerors, that an agreement to restrain trade exists.</P>
              <P>(d) Identical bids shall be reported under this section if the agency has some reason to believe that the bids resulted from collusion.</P>

              <P>(e) For offers from foreign contractors for contracts to be performed outside the United States and its outlying areas, contracting officers may refer <PRTPAGE P="53"/>suspected collusive offers to the authorities of the foreign government concerned for appropriate action.</P>
              <P>(f) Agency reports shall be addressed to the Attorney General, U.S. Department of Justice, Washington, DC 20530, Attention: Assistant Attorney General, Antitrust Division, and shall include—</P>
              <P>(1) A brief statement describing the suspected practice and the reason for the suspicion; and</P>
              <P>(2) The name, address, and telephone number of an individual in the agency who can be contacted for further information.</P>
              <P>(g) Questions concerning this reporting requirement may be communicated by telephone directly to the Office of the Assistant Attorney General, Antitrust Division.</P>
              <CITA>[48 FR 42108, Sept. 19, 1983, as amended at 49 FR 12974, Mar. 30, 1984; 50 FR 1727, Jan. 11, 1985; 50 FR 52429, Dec. 23, 1985; 55 FR 25526, June 21, 1990; 65 FR 36030, June 6, 2000; 68 FR 28080, May 22, 2003]</CITA>
            </SECTION>
          </SUBPART>
          <SUBPART>
            <HD SOURCE="HED">Subpart 3.4—Contingent Fees</HD>
            <SECTION>
              <SECTNO>3.400</SECTNO>
              <SUBJECT>Scope of subpart.</SUBJECT>
              <P>This subpart prescribes policies and procedures that restrict contingent fee arrangements for soliciting or obtaining Government contracts to those permitted by 10 U.S.C. 2306(b) and 41 U.S.C. 254(a).</P>
            </SECTION>
            <SECTION>
              <SECTNO>3.401</SECTNO>
              <SUBJECT>Definitions.</SUBJECT>
              <P>As used in this subpart—</P>
              <P>
                <E T="03">Bona fide agency,</E> means an established commercial or selling agency, maintained by a contractor for the purpose of securing business, that neither exerts nor proposes to exert improper influence to solicit or obtain Government contracts nor holds itself out as being able to obtain any Government contract or contracts through improper influence.</P>
              <P>
                <E T="03">Bona fide employee,</E> means a person, employed by a contractor and subject to the contractor's supervision and control as to time, place, and manner of performance, who neither exerts nor proposes to exert improper influence to solicit or obtain Government contracts nor holds out as being able to obtain any Government contract or contracts through improper influence.</P>
              <P>
                <E T="03">Contingent fee,</E> means any commission, percentage, brokerage, or other fee that is contingent upon the success that a person or concern has in securing a Government contract.</P>
              <P>
                <E T="03">Improper influence,</E> means any influence that induces or tends to induce a Government employee or officer to give consideration or to act regarding a Government contract on any basis other than the merits of the matter.</P>
              <CITA>[48 FR 42108, Sept. 19, 1983, as amended at 66 FR 2127, Jan. 10, 2001]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>3.402</SECTNO>
              <SUBJECT>Statutory requirements.</SUBJECT>
              <P>Contractors' arrangements to pay contingent fees for soliciting or obtaining Government contracts have long been considered contrary to public policy because such arrangements may lead to attempted or actual exercise of improper influence. In 10 U.S.C. 2306(b) and 41 U.S.C. 254(a), Congress affirmed this public policy but permitted certain exceptions. These statutes—</P>
              <P>(a) Require in every negotiated contract a warranty by the contractor against contingent fees;</P>
              <P>(b) Permit, as an exception to the warranty, contingent fee arrangements between contractors and bona fide employees or bona fide agencies; and</P>
              <P>(c) Provide that, for breach or violation of the warranty by the contractor, the Government may annul the contract without liability or deduct from the contract price or consideration, or otherwise recover, the full amount of the contingent fee.</P>
            </SECTION>
            <SECTION>
              <SECTNO>3.403</SECTNO>
              <SUBJECT>Applicability.</SUBJECT>
              <P>This subpart applies to all contracts. Statutory requirements for negotiated contracts are, as a matter of policy, extended to sealed bid contracts.</P>
              <CITA>[48 FR 42108, Sept. 19, 1983, as amended at 50 FR 1727, Jan. 11, 1985; 50 FR 52429, Dec. 23, 1985]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>3.404</SECTNO>
              <SUBJECT>Contract clause.</SUBJECT>
              <P>The contracting officer shall insert the clause at 52.203-5, Covenant Against Contingent Fees, in all solicitations and contracts exceeding the simplified acquisition threshold, other than those for commercial items (see parts 2 and 12).</P>
              <CITA>[61 FR 39188, July 26, 1996]</CITA>
            </SECTION>
            <SECTION>
              <PRTPAGE P="54"/>
              <SECTNO>3.405</SECTNO>
              <SUBJECT>Misrepresentations or violations of the Covenant Against Contingent Fees.</SUBJECT>
              <P>(a) Government 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 to the contracting officer or appropriate higher authority in accordance with agency procedures.</P>
              <P>(b) When there is specific evidence or other reasonable basis to suspect one or more of the violations in paragraph (a) above, the chief of the contracting office shall review the facts and, if appropriate, take or direct one or more of the following, or other, actions:</P>
              <P>(1) If before award, reject the bid or proposal.</P>
              <P>(2) If after award, enforce the Government's right to annul the contract or to recover the fee.</P>
              <P>(3) Initiate suspension or debarment action under subpart 9.4.</P>
              <P>(4) Refer suspected fraudulent or criminal matters to the Department of Justice, as prescribed in agency regulations.</P>
              <CITA>[48 FR 42108, Sept. 19, 1983. Redesignated at 61 FR 39188, July 26, 1996]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>3.406</SECTNO>
              <SUBJECT>Records.</SUBJECT>
              <P>For enforcement purposes, agencies shall preserve any specific evidence of one or more of the violations in 3.405(a), together with all other pertinent data, including a record of actions taken. Contracting offices shall not retire or destroy these records until it is certain that they are no longer needed for enforcement purposes. If the original record is maintained in a central file, a copy must be retained in the contract file.</P>
              <CITA>[48 FR 42108, Sept. 19, 1983. Redesignated and amended at 61 FR 39188, July 26, 1996]</CITA>
            </SECTION>
          </SUBPART>
          <SUBPART>
            <HD SOURCE="HED">Subpart 3.5—Other Improper Business Practices</HD>
            <SECTION>
              <SECTNO>3.501</SECTNO>
              <SUBJECT>Buying-in.</SUBJECT>
            </SECTION>
            <SECTION>
              <SECTNO>3.501-1</SECTNO>
              <SUBJECT>Definition.</SUBJECT>
              <P>
                <E T="03">Buying-in</E> as used in this section, means submitting an offer below anticipated costs, expecting to—</P>
              <P>(1) Increase the contract amount after award (e.g., through unnecessary or excessively priced change orders); or</P>
              <P>(2) Receive follow-on contracts at artificially high prices to recover losses incurred on the buy-in contract.</P>
              <CITA>[48 FR 42108, Sept. 19, 1983, as amended at 66 FR 2127, Jan. 10, 2001]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>3.501-2</SECTNO>
              <SUBJECT>General.</SUBJECT>
              <P>(a) Buying-in may decrease competition or result in poor contract performance. The contracting officer must take appropriate action to ensure buying-in losses are not recovered by the contractor through the pricing of (1) change orders or (2) follow-on contracts subject to cost analysis.</P>
              <P>(b) The Government should minimize the opportunity for buying-in by seeking a price commitment covering as much of the entire program concerned as is practical by using—</P>
              <P>(1) Multiyear contracting, with a requirement in the solicitation that a price be submitted only for the total multiyear quantity; or</P>
              <P>(2) Priced options for additional quantities that, together with the firm contract quantity, equal the program requirements (see subpart 17.2).</P>
              <P>(c) Other safeguards are available to the contracting officer to preclude recovery of buying-in losses (e.g., amortization of nonrecurring costs (see 15.408, Table 15-2, paragraph A., column (2) under “Formats for Submission of Line Item Summaries) and treatment of unreasonable price quotations (see 15.405).</P>
              <CITA>[48 FR 42108, Sept. 19, 1983, as amended at 62 FR 51270, Sept. 30, 1997]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>3.502</SECTNO>
              <SUBJECT>Subcontractor kickbacks.</SUBJECT>
            </SECTION>
            <SECTION>
              <SECTNO>3.502-1</SECTNO>
              <SUBJECT>Definitions.</SUBJECT>
              <P>As used in this section—</P>
              <P>
                <E T="03">Kickback,</E> means any money, fee, commission, credit, gift, gratuity, thing of value, or compensation of any <PRTPAGE P="55"/>kind which is provided, directly or indirectly, to any prime contractor, prime contractor employee, subcontractor, or subcontractor employee for the purpose of improperly obtaining or rewarding favorable treatment in connection with a prime contract or in connection with a subcontract relating to a prime contract.</P>
              <P>
                <E T="03">Person,</E> means a corporation, partnership, business association of any kind, trust, joint-stock company, or individual.</P>
              <P>
                <E T="03">Prime contract,</E> means a contract or contractual action entered into by the United States for the purpose of obtaining supplies, materials, equipment, or services of any kind.</P>
              <P>
                <E T="03">Prime Contractor,</E> means a person who has entered into a prime contract with the United States.</P>
              <P>
                <E T="03">Prime Contractor employee,</E> as used in this section, means any officer, partner, employee, or agent of a prime contractor.</P>
              <P>
                <E T="03">Subcontract,</E> means a contract or contractural action entered into by a prime contractor or subcontractor for the purpose of obtaining supplies, materials, equipment, or service of any kind under a prime contract.</P>
              <P>
                <E T="03">Subcontractor,</E> (1) means any person, other than the prime contractor, who offers to furnish or furnishes any supplies, materials, equipment, or services of any kind under a prime contract or a subcontract entered into in connection with such prime contract, and (2) includes any person who offers to furnish or furnishes general supplies to the prime contractor or a higher tier subcontractor.</P>
              <P>
                <E T="03">Subcontractor employee,</E> as used in this section, means any officer, partner, employee, or agent of a subcontractor.</P>
              <CITA>[52 FR 6121, Feb. 27, 1987, as amended at 53 FR 34226, Sept. 2, 1988; 66 FR 2127, Jan. 10, 2001]</CITA>
              <EDNOTE>
                <HD SOURCE="HED">Editorial Note:</HD>
                <P>At 66 FR 2127, Jan. 10, 2001, as amended at 66 FR 14260, Mar. 9, 2001, section 3.502-1 was amended by redesignating paragraphs (a) and (b) as (1) and (2). There are no designated paragraphs (a) and (b) in section 3.502-1.</P>
              </EDNOTE>
            </SECTION>
            <SECTION>
              <SECTNO>3.502-2</SECTNO>
              <SUBJECT>Subcontractor kickbacks.</SUBJECT>
              <P>The Anti-Kickback Act of 1986 (41 U.S.C. 51-58) was passed to deter subcontractors from making payments and contractors from accepting payments for the purpose of improperly obtaining or rewarding favorable treatment in connection with a prime contract or a subcontract relating to a prime contract. The Act—</P>
              <P>(a) Prohibits any person from—</P>
              <P>(1) Providing, attempting to provide, or offering to provide any kickback;</P>
              <P>(2) Soliciting, accepting, or attempting to accept any kickbacks; or</P>
              <P>(3) Including, directly or indirectly, the amount of any kickback in the contract price charged by a subcontractor to a prime contractor or a higher tier subcontractor or in the contract price charged by a prime contractor to the United States.</P>
              <P>(b) Imposes criminal penalties on any person who knowingly and willfully engages in the prohibited conduct addressed in paragraph (a) of this subsection.</P>
              <P>(c) Provides for the recovery of civil penalties by the United States from any person who knowingly engages in such prohibited conduct and from any person whose employee, subcontractor, or subcontractor employee provides, accepts, or charges a kickback.</P>
              <P>(d) Provides that—</P>
              <P>(1) The contracting officer may offset the amount of a kickback against monies owed by the United States to the prime contractor under the prime contract to which such kickback relates;</P>
              <P>(2) The contracting officer may direct a prime contractor to withhold from any sums owed to a subcontract under a subcontractor of the prime contract the amount of any kickback which was or may be offset against the prime contractor under subparagraph (d)(1) of this subsection; and</P>
              <P>(3) An offset under subparagraph (d)(1) or a direction under subparagraph (d)(2) of this subsection is a claim by the Government for the purposes of the Contract Disputes Act of 1978.</P>
              <P>(e) Authorizes contracting officers to order that sums withheld under subparagraph (d)(2) of this subsection be paid to the contracting agency, or if the sum has already been offset against the prime contractor, that it be retained by the prime contractor.</P>

              <P>(f) Requires the prime contractor to notify the contracting officer when the <PRTPAGE P="56"/>withholding under subparagraph (d)(2) of this subsection has been accomplished unless the amount withheld has been paid to the Government.</P>
              <P>(g) Requires a prime contractor or subcontractor to report in writing to the inspector general of the contracting agency, the head of the contracting agency if the agency does not have an inspector general, or the Department of Justice any possible violation of the Act when the prime contractor or subcontractor has reasonable grounds to believe such violation may have occurred.</P>
              <P>(h) Provides that, for the purpose of ascertaining whether there has been a violation of the Act with respect to any prime contract, the Government Accountability Office and the inspector general of the contracting agency, or a representative of such contracting agency designated by the head of such agency if the agency does not have an inspector general, shall have access to and may inspect the facilities and audit the books and records, including any electronic data or records, of any prime contractor or subcontractor under a prime contract awarded by such agency.</P>
              <P>(i) Requires each contracting agency to include in each prime contract exceeding $100,000 for other than commercial items (see part 12), a requirement that the prime contractor shall—</P>
              <P>(1) Have in place and follow reasonable procedures designed to prevent and detect violations of the Act in its own operations and direct business relationships (e.g., company ethics rules prohibiting kickbacks by employees, agents, or subcontractors; education programs for new employees and subcontractors, explaining policies about kickbacks, related company procedures and the consequences of detection; procurement procedures to minimize the opportunity for kickbacks; audit procedures designed to detect kickbacks; periodic surveys of subcontractors to elicit information about kickbacks; procedures to report kickbacks to law enforcement officials; annual declarations by employees of gifts or gratuities received from subcontractors; annual employee declarations that they have violated no company ethics rules; personnel practices that document unethical or illegal behavior and make such information available to prospective employers); and</P>
              <P>(2) Cooperate fully with any Federal agency investigating a possible violation of the Act.</P>
              <P>(j) Notwithstanding paragraph (i) of this subsection, a prime contractor shall cooperate fully with any Federal government agency investigating a violation of Section 3 of the Anti-Kickback Act of 1986 (41 U.S.C. 51-58).</P>
              <CITA>[52 FR 6121, Feb. 27, 1987; 52 FR 9989, Mar. 27, 1987, as amended at 53 FR 34226, Sept. 2, 1988; 60 FR 48235, Sept. 18, 1995; 61 FR 39191, July 26, 1996; 62 FR 235, Jan. 2, 1997; 71 FR 57380, Sept. 28, 2006]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>3.502-3</SECTNO>
              <SUBJECT>Contract clause.</SUBJECT>
              <P>The contracting officer shall insert the clause at 52.203-7, Anti-Kickback Procedures, in solicitations and contracts exceeding the simplified acquisition threshold, other than those for commercial items (see part 12).</P>
              <CITA>[60 FR 48235, Sept. 18, 1995, as amended at 61 FR 39190, July 26, 1996]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>3.503</SECTNO>
              <SUBJECT>Unreasonable restrictions on subcontractor sales.</SUBJECT>
            </SECTION>
            <SECTION>
              <SECTNO>3.503-1</SECTNO>
              <SUBJECT>Policy.</SUBJECT>
              <P>10 U.S.C. 2402 and 41 U.S.C. 253(g) require that subcontractors not be unreasonably precluded from making direct sales to the Government of any supplies or services made or furnished under a contract. However, this does not preclude contractors from asserting rights that are otherwise authorized by law or regulation.</P>
              <CITA>[50 FR 35475, Aug. 30, 1985, and 51 FR 27116, July 29, 1986]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>3.503-2</SECTNO>
              <SUBJECT>Contract clause.</SUBJECT>
              <P>The contracting officer shall insert the clause at 52.203-6, Restrictions on Subcontractor Sales to the Government, in solicitations and contracts exceeding the simplified acquisition threshold. For the acquisition of commercial items, the contracting officer shall use the clause with its Alternate I.</P>
              <CITA>[60 FR 48235, Sept. 18, 1995, as amended at 61 FR 39190, July 26, 1996]</CITA>
            </SECTION>
          </SUBPART>
          <SUBPART>
            <PRTPAGE P="57"/>
            <HD SOURCE="HED">Subpart 3.6—Contracts With Government Employees or Organizations Owned or Controlled by Them</HD>
            <SECTION>
              <SECTNO>3.601</SECTNO>
              <SUBJECT>Policy.</SUBJECT>
              <P>(a) Except as specified in 3.602, a contracting officer shall not knowingly award a contract to a Government employee or to a business concern or other organization owned or substantially owned or controlled by one or more Government employees. This policy is intended to avoid any conflict of interest that might arise between the employees' interests and their Government duties, and to avoid the appearance of favoritism or preferential treatment by the Government toward its employees.</P>
              <P>(b) For purposes of this subpart, special Government employees (as defined in 18 U.S.C. 202) performing services as experts, advisors, or consultants, or as members of advisory committees, are not considered Government employees unless—</P>
              <P>(1) The contract arises directly out of the individual's activity as a special Government employee;</P>
              <P>(2) In the individual's capacity as a special Government employee, the individual is in a position to influence the award of the contract; or</P>
              <P>(3) Another conflict of interest is determined to exist.</P>
              <CITA>[55 FR 34864, Aug. 24, 1990]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>3.602</SECTNO>
              <SUBJECT>Exceptions.</SUBJECT>
              <P>The agency head, or a designee not below the level of the head of the contracting activity, may authorize an exception to the policy in 3.601 only if there is a most compelling reason to do so, such as when the Government's needs cannot reasonably be otherwise met.</P>
            </SECTION>
            <SECTION>
              <SECTNO>3.603</SECTNO>
              <SUBJECT>Responsibilities of the contracting officer.</SUBJECT>
              <P>(a) Before awarding a contract, the contracting officer shall obtain an authorization under 3.602 if—</P>
              <P>(1) The contracting officer knows, or has reason to believe, that a prospective contractor is one to which award is otherwise prohibited under 3.601; and</P>
              <P>(2) There is a most compelling reason to make an award to that prospective contractor.</P>
              <P>(b) The contracting officer shall comply with the requirements and guidance in subpart 9.5 before awarding a contract to an organization owned or substantially owned or controlled by Government employees.</P>
            </SECTION>
          </SUBPART>
          <SUBPART>
            <HD SOURCE="HED">Subpart 3.7—Voiding and Rescinding Contracts</HD>
            <SOURCE>
              <HD SOURCE="HED">Source:</HD>
              <P>51 FR 27116, July 29, 1986, unless otherwise noted.</P>
            </SOURCE>
            <SECTION>
              <SECTNO>3.700</SECTNO>
              <SUBJECT>Scope of subpart.</SUBJECT>
              <P>(a) This subpart prescribes Governmentwide policies and procedures for exercising discretionary authority to declare void and rescind contracts in relation to which—</P>
              <P>(1) There has been a final conviction for bribery, conflict of interest, disclosure or receipt of contractor bid or proposal information or source selection information in exchange for a thing of value or to give anyone a competitive advantage in the award of a Federal agency procurement contract, or similar misconduct; or</P>
              <P>(2) There has been an agency head determination that contractor bid or proposal information or source selection information has been disclosed or received in exchange for a thing of value, or for the purpose of obtaining or giving anyone a competitive advantage in the award of a Federal agency procurement contract.</P>
              <P>(b) This subpart does not prescribe policies or procedures for, or govern the exercise of, any other remedy available to the Government with respect to such contracts, including but not limited to, the common law right of avoidance, rescission, or cancellation.</P>
              <CITA>[51 FR 27116, July 29, 1986, as amended at 62 FR 232, Jan. 2, 1997]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>3.701</SECTNO>
              <SUBJECT>Purpose.</SUBJECT>
              <P>This subpart provides—</P>

              <P>(a) An administrative remedy with respect to contracts in relation to which there has been—<PRTPAGE P="58"/>
              </P>
              <P>(1) A final conviction for bribery, conflict of interest, disclosure or receipt of contractor bid or proposal information or source selection information in exchange for a thing of value or to give anyone a competitive advantage in the award of a Federal agency procurement contract, or similar misconduct; or</P>
              <P>(2) An agency head determination that contractor bid or proposal information or source selection information has been disclosed or received in exchange for a thing of value, or for the purpose of obtaining or giving anyone a competitive advantage in the award of a Federal agency procurement contract; and</P>
              <P>(b) A means to deter similar misconduct in the future by those who are involved in the award, performance, and administration of Government contracts.</P>
              <CITA>[62 FR 232, Jan. 2, 1997]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>3.702</SECTNO>
              <SUBJECT>Definition.</SUBJECT>
              <P>
                <E T="03">Final conviction</E> means a conviction, whether entered on a verdict or plea, including a plea of <E T="03">nolo contendere,</E> for which sentence has been imposed.</P>
            </SECTION>
            <SECTION>
              <SECTNO>3.703</SECTNO>
              <SUBJECT>Authority.</SUBJECT>
              <P>(a) Section 1(e) of Pub. L. 87-849, 18 U.S.C. 218 (<E T="03">the Act</E>), empowers the President or the heads of executive agencies acting under regulations prescribed by the President, to declare void and rescind contracts and other transactions enumerated in the Act, in relation to which there has been a final conviction for bribery, conflict of interest, or any other violation of Chapter 11 of Title 18 of the United States Code (18 U.S.C. 201-224). Executive Order 12448, November 4, 1983, delegates the President's authority under the Act to the heads of the executive agencies and military departments.</P>
              <P>(b) Subsection 27(e)(3) of the Office of Federal Procurement Policy Act (41 U.S.C. 423) (the OFPP Act), as amended, requires a Federal agency, upon receiving information that a contractor or a person has engaged in conduct constituting a violation of subsection 27 (a) or (b) of the OFPP Act, to consider recission of a contract with respect to which—</P>
              <P>(1) The contractor or someone acting for the contractor has been convicted for an offense punishable under subsection 27(e)(1) of the OFPP Act; or</P>
              <P>(2) The head of the agency, or designee, has determined, based upon a preponderance of the evidence, that the contractor or someone acting for the contractor has engaged in conduct constituting such an offense.</P>
              <CITA>[51 FR 27116, July 29, 1986, as amended at 62 FR 232, Jan. 2, 1997]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>3.704</SECTNO>
              <SUBJECT>Policy.</SUBJECT>
              <P>(a) In cases in which there is a final conviction for any violation of 18 U.S.C. 201-224 involving or relating to contracts awarded by an agency, the agency head or designee shall consider the facts available and, if appropriate, may declare void and rescind contracts, and recover the amounts expended and property transferred by the agency in accordance with the policies and procedures of this subpart.</P>
              <P>(b) Since a final conviction under 18 U.S.C. 201-224 relating to a contract also may justify the conclusion that the party involved is not presently responsible, the agency should consider initiating debarment proceedings in accordance with subpart 9.4, Debarment, Suspension, and Ineligibility, if debarment has not been initiated or is not in effect at the time the final conviction is entered.</P>
              <P>(c) If there is a final conviction for an offense punishable under subsection 27(e) of the OFPP Act, or if the head of the agency, or designee, has determined, based upon a preponderance of the evidence, that the contractor or someone acting for the contractor has engaged in conduct constituting such an offense, then the head of the contracting activity shall consider, in addition to any other penalty prescribed by law or regulation—</P>
              <P>(1) Declaring void and rescinding contracts, as appropriate, and recovering the amounts expended under the contracts by using the procedures at 3.705 (see 3.104-7); and</P>
              <P>(2) Recommending the initiation of suspension or debarment proceedings in accordance with subpart 9.4.</P>
              <CITA>[51 FR 27116, July 29, 1986, as amended at 62 FR 232, Jan. 2, 1997; 67 FR 13063, Mar. 20, 2002]</CITA>
            </SECTION>
            <SECTION>
              <PRTPAGE P="59"/>
              <SECTNO>3.705</SECTNO>
              <SUBJECT>Procedures.</SUBJECT>
              <P>(a) <E T="03">Reporting.</E> The facts concerning any final conviction for any violation of 18 U.S.C. 201-224 involving or relating to agency contracts shall be reported promptly to the agency head or designee for that official's consideration. The agency head or designee shall promptly notify the Civil Division, Department of Justice, that an action is being considered under this subpart.</P>
              <P>(b) <E T="03">Decision.</E> Following an assessment of the facts, the agency head or designee may declare void and rescind contracts with respect to which a final conviction has been entered, and recover the amounts expended and the property transferred by the agency under the terms of the contracts involved.</P>
              <P>(c) <E T="03">Decision-making process.</E> Agency procedures governing the voiding and rescinding decision-making process shall be as informal as is practicable, consistent with the principles of fundamental fairness. As a minimum, however, agencies shall provide the following:</P>
              <P>(1) A notice of the proposed action to declare void and rescind the contract shall be made in writing and sent by certified mail, return receipt requested.</P>
              <P>(2) A thirty calendar day period after receipt of the notice, for the contractor to submit pertinent information before any final decision is made.</P>
              <P>(3) Upon request made within the period for submission of pertinent information, an opportunity shall be afforded for a hearing at which witnesses may be presented, and any witness the agency presents may be confronted. However, no inquiry shall be made regarding the validity of a conviction.</P>
              <P>(4) If the agency head or designee decides to declare void and rescind the contracts involved, that official shall issue a written decision which—</P>
              <P>(i) States that determination;</P>
              <P>(ii) Reflects consideration of the fair value of any tangible benefits received and retained by the agency; and</P>
              <P>(iii) States the amount due, and the property to be returned, to the agency.</P>
              <P>(d) <E T="03">Notice of proposed action.</E> The notice of the proposed action, as a minimum shall—</P>
              <P>(1) Advise that consideration is being given to declaring void and rescinding contracts awarded by the agency, and recovering the amounts expended and property transferred therefor, under the provisions of 18 U.S.C. 218;</P>
              <P>(2) Specifically identify the contracts affected by the action;</P>
              <P>(3) Specifically identify the offense or final conviction on which the action is based;</P>
              <P>(4) State the amounts expended and property transferred under each of the contracts involved, and the money and the property demanded to be returned;</P>
              <P>(5) Identify any tangible benefits received and retained by the agency under the contract, and the value of those benefits, as calculated by the agency;</P>
              <P>(6) Advise that pertinent information may be submitted within 30 calendar days after receipt of the notice, and that, if requested within that time, a hearing shall be held at which witnesses may be presented and any witness the agency presents may be confronted; and</P>
              <P>(7) Advise that action shall be taken only after the agency head or designee issues a final written decision on the proposed action.</P>
              <P>(e) <E T="03">Final agency decision.</E> The final agency decision shall be based on the information available to the agency head or designee, including any pertinent information submitted or, if a hearing was held, presented at the hearing. If the agency decision declares void and rescinds the contract, the final decision shall specify the amounts due and property to be returned to the agency, and reflect consideration of the fair value of any tangible benefits received and retained by the agency. Notice of the decision shall be sent promptly by certified mail, return receipt requested. Rescission of contracts under the authority of the Act and demand for recovery of the amounts expended and property transferred therefor, is not a claim within the meaning of the Contract Disputes Act of 1978 (CDA), 41 U.S.C. 601-613, or part 33. Therefore, the procedures required by the CDA and the FAR for the issuance of a final contracting officer decision are not applicable to final <PRTPAGE P="60"/>agency decisions under this subpart, and shall not be followed.</P>
              <CITA>[51 FR 27116, July 29, 1986, as amended at 62 FR 232, Jan. 2, 1997]</CITA>
            </SECTION>
          </SUBPART>
          <SUBPART>
            <HD SOURCE="HED">Subpart 3.8—Limitations on the Payment of Funds To Influence Federal Transactions</HD>
            <SOURCE>
              <HD SOURCE="HED">Source:</HD>
              <P>55 FR 3190, Jan. 30, 1990, unless otherwise noted.</P>
            </SOURCE>
            <SECTION>
              <SECTNO>3.800</SECTNO>
              <SUBJECT>Scope of subpart.</SUBJECT>
              <P>This subpart prescribes policies and procedures implementing 31 U.S.C. 1352, “Limitation on use of appropriated funds to influence certain Federal contracting and financial transactions.”</P>
              <CITA>[72 FR 46329, Aug. 17, 2007]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>3.801</SECTNO>
              <SUBJECT>Definitions.</SUBJECT>
              <P>As used in this subpart—</P>
              <P>
                <E T="03">Agency</E> means <E T="03">executive agency</E> as defined in 2.101.</P>
              <P>
                <E T="03">Covered Federal action</E> means any of the following actions:</P>
              <P>(1) Awarding any Federal contract.</P>
              <P>(2) Making any Federal grant.</P>
              <P>(3) Making any Federal loan.</P>
              <P>(4) Entering into any cooperative agreement.</P>
              <P>(5) Extending, continuing, renewing, amending, or modifying any Federal contract, grant, loan, or cooperative agreement.</P>
              <P>
                <E T="03">Indian tribe</E> and <E T="03">tribal organization</E> have the meaning provided in section 4 of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450b) and include Alaskan Natives.</P>
              <P>
                <E T="03">Influencing or attempting to influence</E> means making, with the intent to influence, any communication to or appearance before an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with any covered Federal action.</P>
              <P>
                <E T="03">Local government</E> means a unit of government in a State and, if chartered, established, or otherwise recognized by a State for the performance of a governmental duty, including a local public authority, a special district, an intrastate district, a council of governments, a sponsor group representative organization, and any other instrumentality of a local government.</P>
              <P>
                <E T="03">Officer or employee of an agency</E> includes the following individuals who are employed by an agency:</P>
              <P>(1) An individual who is appointed to a position in the Government under Title 5, United States Code, including a position under a temporary appointment.</P>
              <P>(2) A member of the uniformed services, as defined in subsection 101(3), Title 37, United States Code.</P>
              <P>(3) A special Government employee, as defined in section 202, Title 18, United States Code.</P>
              <P>(4) An individual who is a member of a Federal advisory committee, as defined by the Federal Advisory Committee Act, Title 5, United States Code, appendix 2.</P>
              <P>
                <E T="03">Person</E> means an individual, corporation, company, association, authority, firm, partnership, society, State, and local government, regardless of whether such entity is operated for profit or not for profit. This term excludes an Indian tribe, tribal organization, or any other Indian organization eligible to receive Federal contracts, grants, cooperative agreements, or loans from an agency, but only with respect to expenditures by such tribe or organization that are made for purposes specified in paragraph 3.802(a) and are permitted by other Federal law.</P>
              <P>
                <E T="03">Reasonable compensation</E> means, with respect to a regularly employed officer or employee of any person, compensation that is consistent with the normal compensation for such officer or employee for work that is not furnished to, not funded by, or not furnished in cooperation with the Federal Government.</P>
              <P>
                <E T="03">Reasonable payment</E> means, with respect to professional and other technical services, a payment in an amount that is consistent with the amount normally paid for such services in the private sector.</P>
              <P>
                <E T="03">Recipient</E> includes the contractor and all subcontractors. This term excludes an Indian tribe, tribal organization, or any other Indian organization eligible to receive Federal contracts, grants, cooperative agreements, or loans from <PRTPAGE P="61"/>an agency, but only with respect to expenditures by such tribe or organization that are made for purposes specified in paragraph 3.802(a) and are permitted by other Federal law.</P>
              <P>
                <E T="03">Regularly employed</E> means, with respect to an officer or employee of a person requesting or receiving a Federal contract, an officer or employee who is employed by such person for at least 130 working days within 1 year immediately preceding the date of the submission that initiates agency consideration of such person for receipt of such contract. An officer or employee who is employed by such person for less than 130 working days within 1 year immediately preceding the date of the submission that initiates agency consideration of such person shall be considered to be regularly employed as soon as he or she is employed by such person for 130 working days.</P>
              <P>
                <E T="03">State</E> means a State of the United States, the District of Columbia, an outlying area of the United States, an agency or instrumentality of a State, and multi-State, regional, or interstate entity having governmental duties and powers.</P>
              <CITA>[72 FR 46329, Aug. 17, 2007]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>3.802</SECTNO>
              <SUBJECT>Statutory prohibition and requirement.</SUBJECT>
              <P>(a) 31 U.S.C. 1352 prohibits a recipient of a Federal contract, grant, loan, or cooperative agreement from using appropriated funds to pay any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with any covered Federal actions.</P>
              <P>(1) For purposes of this subpart the term “appropriated funds” does not include profit or fee from a covered Federal action.</P>
              <P>(2) To the extent a person can demonstrate that the person has sufficient monies, other than Federal appropriated funds, the Government shall assume that these other monies were spent for any influencing activities that would be unallowable if paid for with Federal appropriated funds.</P>
              <P>(b) 31 U.S.C. 1352 also requires offerors to furnish a declaration consisting of both a certification and a disclosure, with periodic updates of the disclosure after contract award. These requirements are contained in the provision at 52.203-11, Certification and Disclosure Regarding Payments to Influence Certain Federal Transactions, and the clause at 52.203-12, Limitation on Payments to Influence Certain Federal Transactions.</P>
              <CITA>[72 FR 46329, Aug. 17, 2007]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>3.803</SECTNO>
              <SUBJECT>Exceptions.</SUBJECT>
              <P>(a) The prohibition of paragraph 3.802(a) does not apply under the following conditions:</P>
              <P>(1) <E T="03">Agency and legislative liaison by own employees.</E> (i) Payment of reasonable compensation made to an officer or employee of a person requesting or receiving a covered Federal action if the payment is for agency and legislative liaison activities not directly related to a covered Federal action. For purposes of this paragraph, providing any information specifically requested by an agency or Congress is permitted at any time.</P>
              <P>(ii) Participating with an agency in discussions that are not related to a specific solicitation for any covered Federal action, but that concern—</P>
              <P>(A) The qualities and characteristics (including individual demonstrations) of the person's products or services, conditions or terms of sale, and service capabilities; or</P>
              <P>(B) The application or adaptation of the person's products or services for an agency's use.</P>
              <P>(iii) Providing prior to formal solicitation of any covered Federal action any information not specifically requested but necessary for an agency to make an informed decision about initiation of a covered Federal action.</P>
              <P>(iv) Participating in technical discussions regarding the preparation of an unsolicited proposal prior to its official submission.</P>
              <P>(v) Making capability presentations prior to formal solicitation of any covered Federal action when seeking an award from an agency pursuant to the provisions of the Small Business Act, as amended by Pub. L. 95-507, and subsequent amendments.</P>
              <P>(2) <E T="03">Professional and technical services.</E> (i) Payment of reasonable compensation made to an officer or employee of <PRTPAGE P="62"/>a person requesting or receiving a covered Federal action, if payment is for professional or technical services rendered directly in the preparation, submission, or negotiation of any bid, proposal, or application for that Federal action or for meeting requirements imposed by or pursuant to law as a condition for receiving that Federal action;</P>
              <P>(ii) Any reasonable payment to a person, other than an officer or employee of a person requesting or receiving a covered Federal action, if the payment is for professional or technical services rendered directly in the preparation, submission, or negotiation of any bid, proposal, or application for that Federal action, or for meeting requirements imposed by or pursuant to law as a condition for receiving that Federal action. Persons other than officers or employees of a person requesting or receiving a covered Federal action include consultants and trade associations.</P>
              <P>(iii) As used in paragraph (a)(2) of this section “professional and technical services” are limited to advice and analysis directly applying any professional or technical discipline. For example, drafting of a legal document accompanying a bid or proposal by a lawyer is allowable. Similarly, technical advice provided by an engineer on the performance or operational capability of a piece of equipment rendered directly in the negotiation of a contract is allowable. However, communications with the intent to influence made by a professional or a technical person are not allowable under this section unless they provide advice and analysis directly applying their professional or technical expertise and unless the advice or analysis is rendered directly and solely in the preparation, submission or negotiation of a covered Federal action. Thus, for example, communications with the intent to influence made by a lawyer that do not provide legal advice or analysis directly and solely related to the legal aspects of his or her client's proposal, but generally advocate one proposal over another, are not allowable under this section because the lawyer is not providing professional legal services. Similarly, communications with the intent to influence made by an engineer providing an engineering analysis prior to the preparation or submission of a bid or proposal are not allowable under this section since the engineer is providing technical services but not directly in the preparation, submission or negotiation of a covered Federal action.</P>
              <P>(iv) Requirements imposed by or pursuant to law as a condition for receiving a covered Federal award include those required by law or regulation and any other requirements in the actual award documents.</P>
              <P>(b) Only those communications and services expressly authorized by paragraph (a) of this section are permitted.</P>
              <P>(c) The disclosure requirements of paragraph 3.802(b) do not apply with respect to payments of reasonable compensation made to regularly employed officers or employees of a person.</P>
              <CITA>[72 FR 46329, Aug. 17, 2007]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>3.804</SECTNO>
              <SUBJECT>Policy.</SUBJECT>
              <P>The contracting officer shall obtain certifications and disclosures as required by the provision at 52.203-11, Certification and Disclosure Regarding Payments to Influence Certain Federal Transactions, prior to the award of any contract exceeding $100,000.</P>
              <CITA>[72 FR 46330, Aug. 17, 2007]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>3.805</SECTNO>
              <SUBJECT>Exemption.</SUBJECT>
              <P>The Secretary of Defense may exempt, on a case-by-case basis, a covered Federal action from the prohibitions of this subpart whenever the Secretary determines, in writing, that such an exemption is in the national interest. The Secretary shall transmit a copy of the exemption to Congress immediately after making the determination.</P>
              <CITA>[72 FR 46330, Aug. 17, 2007]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>3.806</SECTNO>
              <SUBJECT>Processing suspected violations.</SUBJECT>
              <P>The contracting officer shall report suspected violations of the requirements of 31 U.S.C. 1352 in accordance with agency procedures.</P>
              <CITA>[72 FR 46330, Aug. 17, 2007]</CITA>
            </SECTION>
            <SECTION>
              <PRTPAGE P="63"/>
              <SECTNO>3.807</SECTNO>
              <SUBJECT>Civil penalties.</SUBJECT>
              <P>Agencies shall impose and collect civil penalties pursuant to the provisions of the Program Fraud and Civil Remedies Act, 31 U.S.C. 3803 (except subsection (c)), 3804-3808, and 3812, insofar as the provisions therein are not inconsistent with the requirements of this subpart.</P>
              <CITA>[55 FR 3190, Jan. 30, 1990, as amended at 67 FR 6120, Feb. 8, 2002]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>3.808</SECTNO>
              <SUBJECT>Solicitation provision and contract clause.</SUBJECT>
              <P>(a) Insert the provision at 52.203-11, Certification and Disclosure Regarding Payments to Influence Certain Federal Transactions, in solicitations expected to exceed $100,000.</P>
              <P>(b) Insert the clause at 52.203-12, Limitation on Payments to Influence Certain Federal Transactions, in solicitations and contracts expected to exceed $100,000.</P>
              <CITA>[72 FR 46330, Aug. 17, 2007]</CITA>
            </SECTION>
          </SUBPART>
          <SUBPART>
            <HD SOURCE="HED">Subpart 3.9—Whistleblower Protections for Contractor Employees</HD>
            <SOURCE>
              <HD SOURCE="HED">Source:</HD>
              <P>60 FR 37776, July 21, 1995, unless otherwise noted.</P>
            </SOURCE>
            <SECTION>
              <SECTNO>3.900</SECTNO>
              <SUBJECT>Scope of subpart.</SUBJECT>

              <P>This subpart implements 10 U.S.C. 2409 and 41 U.S.C. 251, <E T="03">et seq.,</E> as amended by Sections 6005 and 6006 of the Federal Acquisition Streamlining Act of 1994 (Pub. L. 103-355).</P>
            </SECTION>
            <SECTION>
              <SECTNO>3.901</SECTNO>
              <SUBJECT>Definitions.</SUBJECT>
              <P>As used in this supart—</P>
              <P>
                <E T="03">Authorized official of an agency</E> means an officer or employee responsible for contracting, program management, audit, inspection, investigation, or enforcement of any law or regulation relating to Government procurement or the subject matter of the contract.</P>
              <P>
                <E T="03">Authorized official of the Department of Justice</E> means any person responsible for the investigation, enforcement, or prosecution of any law or regulation.</P>
              <P>
                <E T="03">Inspector General</E> means an Inspector General appointed under the Inspector General Act of 1978, as amended. In the Department of Defense that is the DOD Inspector General. In the case of an executive agency that does not have an Inspector General, the duties shall be performed by an official designated by the head of the executive agency.</P>
              <CITA>[48 FR 42108, Sept. 19, 1983, as amended at 66 FR 2127, Jan. 10, 2001]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>3.902</SECTNO>
              <SUBJECT>Applicability.</SUBJECT>
              <P>This subpart applies to all Government contracts.</P>
            </SECTION>
            <SECTION>
              <SECTNO>3.903</SECTNO>
              <SUBJECT>Policy.</SUBJECT>
              <P>Government contractors shall not discharge, demote or otherwise discriminate against an employee as a reprisal for disclosing information to a Member of Congress, or an authorized official of an agency or of the Department of Justice, relating to a substantial violation of law related to a contract (including the competition for or negotiation of a contract).</P>
            </SECTION>
            <SECTION>
              <SECTNO>3.904</SECTNO>
              <SUBJECT>Procedures for filing complaints.</SUBJECT>
              <P>(a) Any employee of a contractor who believes that he or she has been discharged, demoted, or otherwise discriminated against contrary to the policy in 3.903 may file a complaint with the Inspector General of the agency that awarded the contract.</P>
              <P>(b) The complaint shall be signed and shall contain—</P>
              <P>(1) The name of the contractor;</P>
              <P>(2) The contract number, if known; if not, a description reasonably sufficient to identify the contract(s) involved;</P>
              <P>(3) The substantial violation of law giving rise to the disclosure;</P>
              <P>(4) The nature of the disclosure giving rise to the discriminatory act; and</P>
              <P>(5) The specific nature and date of the reprisal.</P>
            </SECTION>
            <SECTION>
              <SECTNO>3.905</SECTNO>
              <SUBJECT>Procedures for investigating complaints.</SUBJECT>

              <P>(a) Upon receipt of a complaint, the Inspector General shall conduct an initial inquiry. If the Inspector General determines that the complaint is frivolous or for other reasons does not merit further investigation, the Inspector General shall advise the complainant that no further action on the complaint will be taken.<PRTPAGE P="64"/>
              </P>
              <P>(b) If the Inspector General determines that the complaint merits further investigation, the Inspector General shall notify the complainant, contractor, and head of the contracting activity. The Inspector General shall conduct an investigation and provide a written report of findings to the head of the agency or designee.</P>
              <P>(c) Upon completion of the investigation, the head of the agency or designee shall ensure that the Inspector General provides the report of findings to—</P>
              <P>(1) The complainant and any person acting on the complainant's behalf;</P>
              <P>(2) The contractor alleged to have committed the violation; and</P>
              <P>(3) The head of the contracting activity.</P>
              <P>(d) The complainant and contractor shall be afforded the opportunity to submit a written response to the report of findings within 30 days to the head of the agency or designee. Extensions of time to file a written response may be granted by the head of the agency or designee.</P>
              <P>(e) At any time, the head of the agency or designee may request additional investigative work be done on the complaint.</P>
            </SECTION>
            <SECTION>
              <SECTNO>3.906</SECTNO>
              <SUBJECT>Remedies.</SUBJECT>
              <P>(a) If the head of the agency or designee determines that a contractor has subjected one of its employees to a reprisal for providing information to a Member of Congress, or an authorized official of an agency or of the Department of Justice, the head of the agency or designee may take one or more of the following actions:</P>
              <P>(1) Order the contractor to take affirmative action to abate the reprisal.</P>
              <P>(2) Order the contractor to reinstate the person to the position that the person held before the reprisal, together with the compensation (including back pay), employment benefits, and other terms and conditions of employment that would apply to the person in that position if the reprisal had not been taken.</P>
              <P>(3) Order the contractor to pay the complainant an amount equal to the aggregate amount of all costs and expenses (including attorneys' fees and expert witnesses' fees) that were reasonably incurred by the complainant for, or in connection with, bringing the complaint regarding the reprisal.</P>
              <P>(b) Whenever a contractor fails to comply with an order, the head of the agency or designee shall request the Department of Justice to file an action for enforcement of such order in the United States district court for a district in which the reprisal was found to have occurred. In any action brought under this section, the court may grant appropriate relief, including injunctive relief and compensatory and exemplary damages.</P>
              <P>(c) Any person adversely affected or aggrieved by an order issued under this section may obtain review of the order's conformance with the law, and this subpart, in the United States Court of Appeals for a circuit in which the reprisal is alleged in the order to have occurred. No petition seeking such review may be filed more than 60 days after issuance of the order by the head of the agency or designee. Review shall conform to Chapter 7 of Title 5, United States Code.</P>
            </SECTION>
          </SUBPART>
        </PART>
        <PART>
          <EAR>Pt. 4</EAR>
          <HD SOURCE="HED">PART 4—ADMINISTRATIVE MATTERS</HD>
          <CONTENTS>
            <SECHD>Sec.</SECHD>
            <SECTNO>4.000</SECTNO>
            <SUBJECT>Scope of part.</SUBJECT>
            <SUBPART>
              <HD SOURCE="HED">Subpart 4.1—Contract Execution</HD>
              <SECTNO>4.101</SECTNO>
              <SUBJECT>Contracting officer's signature.</SUBJECT>
              <SECTNO>4.102</SECTNO>
              <SUBJECT>Contractor's signature.</SUBJECT>
              <SECTNO>4.103</SECTNO>
              <SUBJECT>Contract clause.</SUBJECT>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart 4.2—Contract Distribution</HD>
              <SECTNO>4.201</SECTNO>
              <SUBJECT>Procedures.</SUBJECT>
              <SECTNO>4.202</SECTNO>
              <SUBJECT>Agency distribution requirements.</SUBJECT>
              <SECTNO>4.203</SECTNO>
              <SUBJECT>Taxpayer identification information.</SUBJECT>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart 4.3—Paper Documents</HD>
              <SECTNO>4.300</SECTNO>
              <SUBJECT>Scope of subpart.</SUBJECT>
              <SECTNO>4.301</SECTNO>
              <SUBJECT>Definition.</SUBJECT>
              <SECTNO>4.302</SECTNO>
              <SUBJECT>Policy.</SUBJECT>
              <SECTNO>4.303</SECTNO>
              <SUBJECT>Contract clause.</SUBJECT>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart 4.4—Safeguarding Classified Information Within Industry</HD>
              <SECTNO>4.401</SECTNO>
              <SUBJECT>[Reserved]</SUBJECT>
              <SECTNO>4.402</SECTNO>
              <SUBJECT>General.</SUBJECT>
              <SECTNO>4.403</SECTNO>
              <SUBJECT>Responsibilities of contracting officers.</SUBJECT>
              <SECTNO>4.404</SECTNO>
              <SUBJECT>Contract clause.</SUBJECT>
            </SUBPART>
            <SUBPART>
              <PRTPAGE P="65"/>
              <HD SOURCE="HED">Subpart 4.5—Electronic Commerce in Contracting</HD>
              <SECTNO>4.500</SECTNO>
              <SUBJECT>Scope of subpart.</SUBJECT>
              <SECTNO>4.501</SECTNO>
              <SUBJECT>[Reserved]</SUBJECT>
              <SECTNO>4.502</SECTNO>
              <SUBJECT>Policy.</SUBJECT>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart 4.6—Contract Reporting</HD>
              <SECTNO>4.600</SECTNO>
              <SUBJECT>Scope of subpart.</SUBJECT>
              <SECTNO>4.601</SECTNO>
              <SUBJECT>Record requirements.</SUBJECT>
              <SECTNO>4.602</SECTNO>
              <SUBJECT>Federal Procurement Data System.</SUBJECT>
              <SECTNO>4.603</SECTNO>
              <SUBJECT>Solicitation provisions.</SUBJECT>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart 4.7—Contractor Records Retention</HD>
              <SECTNO>4.700</SECTNO>
              <SUBJECT>Scope of subpart.</SUBJECT>
              <SECTNO>4.701</SECTNO>
              <SUBJECT>Purpose.</SUBJECT>
              <SECTNO>4.702</SECTNO>
              <SUBJECT>Applicability.</SUBJECT>
              <SECTNO>4.703</SECTNO>
              <SUBJECT>Policy.</SUBJECT>
              <SECTNO>4.704</SECTNO>
              <SUBJECT>Calculation of retention periods.</SUBJECT>
              <SECTNO>4.705</SECTNO>
              <SUBJECT>Specific retention periods.</SUBJECT>
              <SECTNO>4.705-1</SECTNO>
              <SUBJECT>Financial and cost accounting records.</SUBJECT>
              <SECTNO>4.705-2</SECTNO>
              <SUBJECT>Pay administration records.</SUBJECT>
              <SECTNO>4.705-3</SECTNO>
              <SUBJECT>Acquisition and supply records.</SUBJECT>
              <SECTNO>4.706</SECTNO>
              <SUBJECT>[Reserved]</SUBJECT>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart 4.8—Government Contract Files</HD>
              <SECTNO>4.800</SECTNO>
              <SUBJECT>Scope of subpart.</SUBJECT>
              <SECTNO>4.801</SECTNO>
              <SUBJECT>General.</SUBJECT>
              <SECTNO>4.802</SECTNO>
              <SUBJECT>Contract files.</SUBJECT>
              <SECTNO>4.803</SECTNO>
              <SUBJECT>Contents of contract files.</SUBJECT>
              <SECTNO>4.804</SECTNO>
              <SUBJECT>Closeout of contract files.</SUBJECT>
              <SECTNO>4.804-1</SECTNO>
              <SUBJECT>Closeout by the office administering the contract.</SUBJECT>
              <SECTNO>4.804-2</SECTNO>
              <SUBJECT>Closeout of the contracting office files if another office administers the contract.</SUBJECT>
              <SECTNO>4.804-3</SECTNO>
              <SUBJECT>Closeout of paying office contract files.</SUBJECT>
              <SECTNO>4.804-4</SECTNO>
              <SUBJECT>Physically completed contracts.</SUBJECT>
              <SECTNO>4.804-5</SECTNO>
              <SUBJECT>Procedures for closing out contract files.</SUBJECT>
              <SECTNO>4.805</SECTNO>
              <SUBJECT>Storage, handling, and disposal of contract files.</SUBJECT>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart 4.9—Taxpayer Identification Number Information</HD>
              <SECTNO>4.900</SECTNO>
              <SUBJECT>Scope of subpart.</SUBJECT>
              <SECTNO>4.901</SECTNO>
              <SUBJECT>Definition.</SUBJECT>
              <SECTNO>4.902</SECTNO>
              <SUBJECT>General.</SUBJECT>
              <SECTNO>4.903</SECTNO>
              <SUBJECT>Reporting contract information to the IRS.</SUBJECT>
              <SECTNO>4.904</SECTNO>
              <SUBJECT>Reporting payment information to the IRS.</SUBJECT>
              <SECTNO>4.905</SECTNO>
              <SUBJECT>Solicitation provision.</SUBJECT>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart 4.10—Administrative Matters</HD>
              <SECTNO>4.1001</SECTNO>
              <SUBJECT>Policy.</SUBJECT>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart 4.11—Central Contractor Registration</HD>
              <SECTNO>4.1100</SECTNO>
              <SUBJECT>Scope.</SUBJECT>
              <SECTNO>4.1101</SECTNO>
              <SUBJECT>Definitions.</SUBJECT>
              <SECTNO>4.1102</SECTNO>
              <SUBJECT>Policy.</SUBJECT>
              <SECTNO>4.1103</SECTNO>
              <SUBJECT>Procedures.</SUBJECT>
              <SECTNO>4.1104</SECTNO>
              <SUBJECT>Solicitation provision and contract clauses.</SUBJECT>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart 4.12—Representations and certifications.</HD>
              <SECTNO>4.1200</SECTNO>
              <SUBJECT>Scope.</SUBJECT>
              <SECTNO>4.1201</SECTNO>
              <SUBJECT>Policy.</SUBJECT>
              <SECTNO>4.1202</SECTNO>
              <SUBJECT>Solicitation provision and contract clause.</SUBJECT>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart 4.13—Personal Identity Verification</HD>
              <SECTNO>4.1300</SECTNO>
              <SUBJECT>Scope of subpart.</SUBJECT>
              <SECTNO>4.1301</SECTNO>
              <SUBJECT>Policy.</SUBJECT>
              <SECTNO>4.1302</SECTNO>
              <SUBJECT>Acquisition of approved products and services for personal identity verification.</SUBJECT>
              <SECTNO>4.1303</SECTNO>
              <SUBJECT>Contract clause.</SUBJECT>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart 4.14—Reporting Subcontract Awards</HD>
              <SECTNO>4.1400</SECTNO>
              <SUBJECT>Scope of subpart.</SUBJECT>
              <SECTNO>4.1401</SECTNO>
              <SUBJECT>Contract clause.</SUBJECT>
            </SUBPART>
          </CONTENTS>
          <AUTH>
            <HD SOURCE="HED">Authority:</HD>
            <P>40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 42 U.S.C. 2473(c).</P>
          </AUTH>
          <SOURCE>
            <HD SOURCE="HED">Source:</HD>
            <P>48 FR 42113, Sept. 19, 1983, unless otherwise noted.</P>
          </SOURCE>
          <SECTION>
            <SECTNO>4.000</SECTNO>
            <SUBJECT>Scope of part.</SUBJECT>
            <P>This part prescribes policies and procedures relating to the administrative aspects of contract execution, contractor-submitted paper documents, distribution, reporting, retention, and files.</P>
            <CITA>[60 FR 28493, May 31, 1995]</CITA>
          </SECTION>
          <SUBPART>
            <HD SOURCE="HED">Subpart 4.1—Contract Execution</HD>
            <SECTION>
              <SECTNO>4.101</SECTNO>
              <SUBJECT>Contracting officer's signature.</SUBJECT>
              <P>Only contracting officers shall sign contracts on behalf of the United States. The contracting officer's name and official title shall be typed, stamped, or printed on the contract. The contracting officer normally signs the contract after it has been signed by the contractor. The contracting officer shall ensure that the signer(s) have authority to bind the contractor (see specific requirements in 4.102 of this subpart).</P>
              <CITA>[60 FR 34736, July 3, 1995]</CITA>
            </SECTION>
            <SECTION>
              <PRTPAGE P="66"/>
              <SECTNO>4.102</SECTNO>
              <SUBJECT>Contractor's signature.</SUBJECT>
              <P>(a) <E T="03">Individuals.</E> A contract with an individual shall be signed by that individual. A contract with an individual doing business as a firm shall be signed by that individual, and the signature shall be followed by the individual's typed, stamped, or printed name and the words “, an individual doing business as ___________” [<E T="03">insert name of firm</E>].</P>
              <P>(b) <E T="03">Partnerships.</E> A contract with a partnership shall be signed in the partnership name. Before signing for the Government, the contracting officer shall obtain a list of all partners and ensure that the individual(s) signing for the partnership have authority to bind the partnership.</P>
              <P>(c) <E T="03">Corporations.</E> A contract with a corporation shall be signed in the corporate name, followed by the word “by” and the signature and title of the person authorized to sign. The contracting officer shall ensure that the person signing for the corporation has authority to bind the corporation.</P>
              <P>(d) <E T="03">Joint venturers.</E> A contract with joint venturers may involve any combination of individuals, partnerships, or corporations. The contract shall be signed by each participant in the joint venture in the manner prescribed in paragraphs (a) through (c) above for each type of participant. When a corporation is participating, the contracting officer shall verify that the corporation is authorized to participate in the joint venture.</P>
              <P>(e) <E T="03">Agents.</E> When an agent is to sign the contract, other than as stated in paragraphs (a) through (d) above, the agent's authorization to bind the principal must be established by evidence satisfactory to the contracting officer.</P>
              <CITA>[48 FR 42113, Sept. 19, 1983, as amended at 62 FR 235, Jan. 2, 1997]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>4.103</SECTNO>
              <SUBJECT>Contract clause.</SUBJECT>
              <P>The contracting officer shall insert the clause at 52.204-1, Approval of Contract, in solicitations and contracts if required by agency procedures.</P>
              <CITA>[49 FR 26741, June 29, 1984]</CITA>
            </SECTION>
          </SUBPART>
          <SUBPART>
            <HD SOURCE="HED">Subpart 4.2—Contract Distribution</HD>
            <SECTION>
              <SECTNO>4.201</SECTNO>
              <SUBJECT>Procedures.</SUBJECT>
              <P>Contracting officers shall distribute copies of contracts or modifications within 10 working days after execution by all parties. As a minimum, the contracting officer shall—</P>
              <P>(a) Distribute simultaneously one signed copy or reproduction of the signed contract to the contractor and the paying office;</P>
              <P>(b) When a contract is assigned to another office for contract administration (see subpart 42.2), provide to that office—</P>
              <P>(1) One copy or reproduction of the signed contract and of each modification; and</P>
              <P>(2) A copy of the contract distribution list, showing those offices that should receive copies of modifications, and any changes to the list as they occur;</P>
              <P>(c) Distribute one copy to each accounting and finance office (funding office) whose funds are cited in the contract;</P>
              <P>(d) When the contract is not assigned for administration but contains a Cost Accounting Standards clause, provide one copy of the contract to the cognizant administrative contracting officer and mark the copy “FOR COST ACCOUNTING STANDARDS ADMINISTRATION ONLY” (see 30.601(b));</P>
              <P>(e) Provide one copy of each contract or modification that requires audit service to the appropriate field audit office listed in the “Directory of Federal Contract Audit Offices” (copies of this directory can be ordered from the U.S. Government Printing Office, Superintendent of Documents, Washington, DC 20402, referencing stock numbers 008-007-03189-9 and 008-007-03190-2 for Volumes I and II, respectively); and</P>
              <P>(f) Provide copies of contracts and modifications to those organizations required to perform contract administration support functions (e.g., when manufacturing is performed at multiple sites, the contract administration office cognizant of each location).</P>
              <CITA>[48 FR 42113, Sept. 19, 1983, as amended at 60 FR 34736, July 3, 1995]</CITA>
            </SECTION>
            <SECTION>
              <PRTPAGE P="67"/>
              <SECTNO>4.202</SECTNO>
              <SUBJECT>Agency distribution requirements.</SUBJECT>
              <P>Agencies shall limit additional distribution requirements to the minimum necessary for proper performance of essential functions. When contracts are assigned for administration to a contract administration office located in an agency different from that of the contracting office (see part 42), the two agencies shall agree on any necessary distribution in addition to that prescribed in 4.201 above.</P>
            </SECTION>
            <SECTION>
              <SECTNO>4.203</SECTNO>
              <SUBJECT>Taxpayer identification information.</SUBJECT>
              <P>(a) If the contractor has furnished a Taxpayer Identification Number (TIN) when completing the solicitation provision at 52.204-3, Taxpayer Identification, or paragraph (b) of the solicitation provision at 52.212-3, Offeror Representations and Certifications—Commercial Items, the contracting officer shall, unless otherwise provided in agency procedures, attach a copy of the completed solicitation provision as the last page of the copy of the contract sent to the payment office.</P>
              <P>(b) If the TIN or type of organization is derived from a source other than the provision at 52.204-3 or 52.212-3(b), the contracting officer shall annotate the last page of the contract or order forwarded to the payment office to state the contractor's TIN and type of organization, unless this information is otherwise provided to the payment office in accordance with agency procedures.</P>
              <P>(c) If the contractor provides its TIN or type of organization to the contracting officer after award, the contracting officer shall forward the information to the payment office within 7 days of its receipt.</P>
              <P>(d) <E T="03">Federal Supply Schedule contracts.</E> Each contracting officer that places an order under a Federal Supply Schedule contract (see Subpart 8.4) shall provide the TIN and type of organization information to the payment office in accordance with paragraph (b) of this section.</P>
              <P>(e) <E T="03">Basic ordering agreements and indefinite-delivery contracts (other than Federal Supply Schedule contracts).</E> (1) Each contracting officer that issues a basic ordering agreement or indefinite-delivery contract (other than a Federal Supply Schedule contract) shall provide to contracting officers placing orders under the agreement or contract (if the contractor is not required to provide this information to a central contractor registration database)—</P>
              <P>(i) A copy of the agreement or contract with a copy of the completed solicitation provision at 52.204-3 or 52.212-3(b) as the last page of the agreement or contract; or</P>
              <P>(ii) The contractor's TIN and type of organization information.</P>
              <P>(2) Each contracting officer that places an order under a basic ordering agreement or indefinite-delivery contract (other than a Federal Supply Schedule contract) shall provide the TIN and type of organization information to the payment office in accordance with paragraph (a) or (b) of this section.</P>
              <CITA>[63 FR 58588, Oct. 30, 1998, as amended at 68 FR 56672, Oct. 1, 2003]</CITA>
            </SECTION>
          </SUBPART>
          <SUBPART>
            <HD SOURCE="HED">Subpart 4.3—Paper Documents</HD>
            <SECTION>
              <SECTNO>4.300</SECTNO>
              <SUBJECT>Scope of subpart.</SUBJECT>
              <P>This subpart provides policies and procedures on contractor-submitted paper documents.</P>
              <CITA>[60 FR 28493, May 31, 1995]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>4.301</SECTNO>
              <SUBJECT>Definition.</SUBJECT>
              <P>
                <E T="03">Printed or copied double-sided,</E> as used in this subpart, means printing or reproducing a document so that information is on both sides of a sheet of paper.</P>
              <CITA>[65 FR 36017, June 6, 2000]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>4.302</SECTNO>
              <SUBJECT>Policy.</SUBJECT>
              <P>When electronic commerce methods (see 4.502) are not being used, a contractor should submit paper documents to the Government relating to an acquisition printed or copied double-sided on recycled paper whenever practicable. If the contractor cannot print or copy double-sided, it should print or copy single-sided on recycled paper.</P>
              <CITA>[65 FR 36017, June 6, 2000]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>4.303</SECTNO>
              <SUBJECT>Contract clause.</SUBJECT>

              <P>Insert the clause at 52.204-4, Printed or Copied Double-Sided on Recycled Paper, in solicitations and contracts <PRTPAGE P="68"/>that exceed the simplified acquisition threshold.</P>
              <CITA>[65 FR 36017, June 6, 2000]</CITA>
            </SECTION>
          </SUBPART>
          <SUBPART>
            <HD SOURCE="HED">Subpart 4.4—Safeguarding Classified Information Within Industry</HD>
            <SECTION>
              <SECTNO>4.401</SECTNO>
              <RESERVED>[Reserved]</RESERVED>
            </SECTION>
            <SECTION>
              <SECTNO>4.402</SECTNO>
              <SUBJECT>General.</SUBJECT>
              <P>(a) Executive Order 12829, January 6, 1993 (58 FR 3479, January 8, 1993), entitled “National Industrial Security Program” (NISP), establishes a program to safeguard Federal Government classified information that is released to contractors, licensees, and grantees of the United States Government. Executive Order 12829 amends Executive Order 10865, February 20, 1960 (25 FR 1583, February 25, 1960), entitled “Safeguarding Classified Information Within Industry,” as amended by Executive Order 10909, January 17, 1961 (26 FR 508, January 20, 1961).</P>
              <P>(b) The National Industrial Security Program Operating Manual (NISPOM) incorporates the requirements of these Executive Orders. The Secretary of Defense, in consultation with all affected agencies and with the concurrence of the Secretary of Energy, the Chairman of the Nuclear Regulatory Commission, and the Director of Central Intelligence, is responsible for issuance and maintenance of this Manual. The following DOD publications implement the program:</P>
              <P>(1) <E T="03">National Industrial Security Program Operating Manual</E> (NISPOM) (DOD 5220.22-M).</P>
              <P>(2) <E T="03">Industrial Security Regulation</E> (ISR) (DOD 5220.22-R).</P>
              <P>(c) Procedures for the protection of information relating to foreign classified contracts awarded to U.S. industry, and instructions for the protection of U.S. information relating to classified contracts awarded to foreign firms, are prescribed in Chapter 10 of the NISPOM.</P>
              <P>(d) Part 27, Patents, Data, and Copyrights, contains policy and procedures for safeguarding classified information in patent applications and patents.</P>
              <CITA>[48 FR 42113, Sept. 19, 1983, as amended at 61 FR 31617, June 20, 1996]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>4.403</SECTNO>
              <SUBJECT>Responsibilities of contracting officers.</SUBJECT>
              <P>(a) <E T="03">Presolicitation phase.</E> Contracting officers shall review all proposed solicitations to determine whether access to classified information may be required by offerors, or by a contractor during contract performance.</P>
              <P>(1) If access to classified information of another agency may be required, the contracting officer shall—</P>
              <P>(i) Determine if the agency is covered by the NISP; and</P>
              <P>(ii) Follow that agency's procedures for determining the security clearances of firms to be solicited.</P>
              <P>(2) If the classified information required is from the contracting officer's agency, the contracting officer shall follow agency procedures.</P>
              <P>(b) <E T="03">Solicitation phase.</E> Contracting officers shall—</P>
              <P>(1) Ensure that the classified acquisition is conducted as required by the NISP or agency procedures, as appropriate; and</P>
              <P>(2) Include (i) an appropriate Security Requirements clause in the solicitation (see 4.404), and (ii) as appropriate, in solicitations and contracts when the contract may require access to classified information, a requirement for security safeguards in addition to those provided in the clause (52.204-2, Security Requirements).</P>
              <P>(c) <E T="03">Award phase.</E> Contracting officers shall inform contractors and subcontractors of the security classifications and requirements assigned to the various documents, materials, tasks, subcontracts, and components of the classified contract as follows:</P>
              <P>(1) Agencies covered by the NISP shall use the Contract Security Classification Specification, DD Form 254. The contracting officer, or authorized representative, is the approving official for the form and shall ensure that it is prepared and distributed in accordance with the ISR.</P>
              <P>(2) Contracting officers in agencies not covered by the NISP shall follow agency procedures.</P>
              <CITA>[48 FR 42113, Sept. 19, 1983, as amended at 61 FR 31617, June 20, 1996]</CITA>
            </SECTION>
            <SECTION>
              <PRTPAGE P="69"/>
              <SECTNO>4.404</SECTNO>
              <SUBJECT>Contract clause.</SUBJECT>
              <P>(a) The contracting officer shall insert the clause at 52.204-2, Security Requirements, in solicitations and contracts when the contract may require access to classified information, unless the conditions specified in paragraph (d) below apply.</P>
              <P>(b) If a cost contract (see 16.302) for research and development with an educational institution is contemplated, the contracting officer shall use the clause with its Alternate I.</P>
              <P>(c) If a construction or architect-engineer contract where employee identification is required for security reasons is contemplated, the contracting officer shall use the clause with its Alternate II.</P>
              <P>(d) If the contracting agency is not covered by the NISP and has prescribed a clause and alternates that are substantially the same as those at 52.204-2, the contracting officer shall use the agency-prescribed clause as required by agency procedures.</P>
              <CITA>[48 FR 42113, Sept. 19, 1983, as amended at 61 FR 31617, June 20, 1996]</CITA>
            </SECTION>
          </SUBPART>
          <SUBPART>
            <HD SOURCE="HED">Subpart 4.5—Electronic Commerce in Contracting</HD>
            <AUTH>
              <HD SOURCE="HED">Authority:</HD>
              <P>40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42 U.S.C. 2473(c).</P>
            </AUTH>
            <SOURCE>
              <HD SOURCE="HED">Source:</HD>
              <P>63 FR 58592, Oct. 30, 1998, unless otherwise noted.</P>
            </SOURCE>
            <SECTION>
              <SECTNO>4.500</SECTNO>
              <SUBJECT>Scope of subpart.</SUBJECT>
              <P>This subpart provides policy and procedures for the establishment and use of electronic commerce in Federal acquisition as required by Section 30 of the Office of Federal Procurement Policy (OFPP) Act (41 U.S.C. 426).</P>
            </SECTION>
            <SECTION>
              <SECTNO>4.501</SECTNO>
              <RESERVED>[Reserved]</RESERVED>
            </SECTION>
            <SECTION>
              <SECTNO>4.502</SECTNO>
              <SUBJECT>Policy.</SUBJECT>
              <P>(a) The Federal Government shall use electronic commerce whenever practicable or cost-effective. The use of terms commonly associated with paper transactions (e.g., “copy,” “document,” “page,” “printed,” “sealed envelope,” and “stamped”) shall not be interpreted to restrict the use of electronic commerce. Contracting officers may supplement electronic transactions by using other media to meet the requirements of any contract action governed by the FAR (e.g., transmit hard copy of drawings).</P>
              <P>(b) Agencies may exercise broad discretion in selecting the hardware and software that will be used in conducting electronic commerce. However, as required by Section 30 of the OFPP Act (41 U.S.C. 426), the head of each agency, after consulting with the Administrator of OFPP, shall ensure that systems, technologies, procedures, and processes used by the agency to conduct electronic commerce—</P>
              <P>(1) Are implemented uniformly throughout the agency, to the maximum extent practicable;</P>
              <P>(2) Are implemented only after considering the full or partial use of existing infrastructures, (e.g., the Federal Acquisition Computer Network (FACNET));</P>
              <P>(3) Facilitate access to Government acquisition opportunities by small business concerns, small disadvantaged business concerns, women-owned, veteran-owned, HUBZone, and service-disabled veteran-owned small business concerns;</P>
              <P>(4) Include a single means of providing widespread public notice of acquisition opportunities through the Governmentwide point of entry and a means of responding to notices or solicitations electronically; and</P>
              <P>(5) Comply with nationally and internationally recognized standards that broaden interoperability and ease the electronic interchange of information, such as standards established by the National Institute of Standards and Technology.</P>
              <P>(c) Before using electronic commerce, the agency head shall ensure that the agency systems are capable of ensuring authentication and confidentiality commensurate with the risk and magnitude of the harm from loss, misuse, or unauthorized access to or modification of the information.</P>
              <P>(d) Agencies may accept electronic signatures and records in connection with Government contracts.</P>
              <CITA>[63 R 58592, Oct. 30, 1998, as amended at 66 FR 27409, May 16, 2001; 68 FR 28094, May 22, 2003; 70 FR 14954, Mar. 23, 2005]</CITA>
            </SECTION>
          </SUBPART>
          <SUBPART>
            <PRTPAGE P="70"/>
            <HD SOURCE="HED">Subpart 4.6—Contract Reporting</HD>
            <SECTION>
              <SECTNO>4.600</SECTNO>
              <SUBJECT>Scope of subpart.</SUBJECT>
              <P>This subpart prescribes uniform reporting requirements for the Federal Procurement Data System (FPDS).</P>
            </SECTION>
            <SECTION>
              <SECTNO>4.601</SECTNO>
              <SUBJECT>Record requirements.</SUBJECT>
              <P>(a) Each executive agency shall establish and maintain for a period of 5 years a computer file, by fiscal year, containing unclassified records of all procurements exceeding $3,000. This file shall be accessible to the public using FPDS-NG.</P>
              <P>(b) With respect to each procurement carried out using competitive procedures, agencies shall be able to access from the computer file, as a minimum, the following information:</P>
              <P>(1) The date of contract award.</P>
              <P>(2) Information identifying the source to whom the contract was awarded.</P>
              <P>(3) The property or services obtained by the Government under the procurement.</P>
              <P>(4) The total cost of the procurement.</P>
              <P>(5) Those procurements which result in the submission of a single bid or proposal so that they can be separately categorized and designated noncompetitive procurements using competitive procedures.</P>
              <P>(c) In addition to paragraph (b) of this section with respect to each procurement carried out using procedures other than competitive procedures, agencies shall be able to access—</P>
              <P>(1) The reason under subpart 6.3 for the use of such procedures; and</P>
              <P>(2) The identity of the organization or activity which conducted the procurement.</P>
              <P>(d) In addition to the information described in paragraphs (b) and (c) of this section, for procurements in excess of $3,000, agencies shall be able to access information on the following:</P>
              <P>(1) Awards to small disadvantaged businesses using either set-asides or full and open competition.</P>
              <P>(2) Awards to business concerns owned and controlled by women.</P>
              <P>(3) The number of offers received in response to a solicitation.</P>
              <P>(4) Task or delivery order contracts.</P>
              <P>(5) Contracts for the acquisition of commercial items.</P>
              <P>(6) Contracts or task orders treated as commercial items pursuant to 12.102(g).</P>
              <P>(e) In addition to the information described in paragraphs (b), (c), and (d) of this section, agencies must be able to access information from the computer file to identify bundled contracts with a total contract value, including all options, exceeding $5.5 million.</P>
              <P>(f) Agencies must transmit this information to the Federal Procurement Data System in accordance with its procedures.</P>
              <CITA>[50 FR 52429, Dec. 23, 1985, as amended at 52 FR 19802, May 27, 1987; 60 FR 42653, Aug. 16, 1995; 64 FR 72442, Dec. 27, 1999; 68 FR 69249, Dec. 11, 2003; 69 FR 34227, June 18, 2004; 71 FR 57365, Sept. 28, 2006]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>4.602</SECTNO>
              <SUBJECT>Federal Procurement Data System.</SUBJECT>
              <P>(a) The FPDS provides a comprehensive mechanism for assembling, organizing, and presenting contract placement data for the Federal Government. Federal agencies will now report data directly to the Federal Procurement Data System—Next Generation (FPDS-NG), which collects, processes, and disseminates official statistical data on Federal contracting. The data provide—</P>
              <P>(1) A basis for recurring and special reports to the President, the Congress, the Government Accountability Office, Federal executive agencies, and the general public;</P>
              <P>(2) A means of measuring and assessing the impact of Federal contracting on the Nation's economy and the extent to which small, veteran-owned small, service-disabled veteran-owned small, HUBZone small, small disadvantaged, and women-owned small business concerns are sharing in Federal contracts; and</P>
              <P>(3) Information for other policy and management control purposes, and for public access.</P>
              <P>(b) The FPDS Web site, <E T="03">https://www.fpds.gov,</E> provides instructions for submitting data. It also provides a complete list of departments, agencies, and other entities that submit data to the FPDS, as well as technical and end-user guidance, and a computer-based tutorial.<PRTPAGE P="71"/>
              </P>
              <P>(c)(1) Data collection points in each agency shall submit FPDS-required data on contract actions directly to FPDS-NG. Agencies must report all transactions over $3,000 and modifications to those transactions regardless of dollar value.</P>
              <P>(2) Agencies participating under the Small Business Competitiveness Demonstration Program (see Subpart 19.10) shall report as an individual contract action all awards, regardless of dollar value, in the designated industry groups.</P>
              <P>(3) Agencies may choose to report transactions at or below $3,000, including those made using the Governmentwide commercial purchase card, except as provided in paragraph (c)(2) of this section.</P>
              <P>(d) The contracting officer must identify and report (if it is not pre-populated by the Central Contractor Registration (CCR) database), a Contractor Identification Number for each successful offeror. A Data Universal Numbering System (DUNS) number, which is a nine-digit number assigned by Dun and Bradstreet Information Services to an establishment, is the Contractor Identification Number for Federal contractors. The DUNS number reported must identify the successful offeror's name and address exactly as stated in the offer and resultant contract. The contracting officer must ask the offeror to provide its DUNS number by using either the provision prescribed in paragraph (a) of 4.603 or the FAR clause prescribed at 4.1104. If the successful offeror does not provide its number, the contracting officer must contact the offeror and assist them in obtaining the DUNS number.</P>
              <P>(e) <E T="03">Unique Procurement Instrument Identifier (PIID).</E> (1) The FPDS requires that each reporting agency assign a unique identifier for every contract, purchase order, BOA, Basic Agreement, and BPA reported to FPDS. Such identifiers shall comply with the contract numbering guidelines established by the Joint Financial Management Improvement Project. The PIID shall consist of alpha characters in the first positions to indicate the agency, followed by alphanumeric characters identifying bureau, offices, or other administrative subdivisions. The last portion of the PIID shall be numbered sequentially. The PIID may include other elements, as appropriate, such as fiscal year. Delivery orders, task orders, and call numbers must be unique in combination with the basic reference contract vehicle identifier. When the basic reference contract is available for multi-agency use (GWAC, Federal Supply Schedule contract, etc.), an ordering agency shall use the same agency identification prefix for its delivery orders, task orders, and call numbers as it uses for its contractual instruments.</P>
              <P>(2) Agencies are required to have in place, no later than October 1, 2003, a process that will ensure that each PIID reported to FPDS is unique, Governmentwide, and will remain so for at least 20 years from the date of contract award. To eliminate the possibility of duplication between agencies, agencies must submit their proposed identifier to the Federal Procurement Data Center, which will maintain a registry of the identifiers on the FPDC website and validate their use in all transactions.</P>
              <P>(f)  When the contracting office receives written notification that a contractor has changed its size status in accordance with the clause at 52.219-28, Post-Award Small Business Program Rerepresentation, the contracting officer must submit a modification contract action report to ensure that the updated size status is entered in FPDS-NG.</P>
              <CITA>[48 FR 42113, Sept. 19. 1983. Redesignated at 50 FR 52429, Dec. 23, 1985, and amended at 54 FR 29280, July 11, 1989; 53 FR 43388, Oct. 26, 1988; 55 FR 52788, Dec. 21, 1990; 56 FR 41744, Aug. 22, 1991; 57 FR 60572, Dec. 21, 1992; 60 FR 48259, Sept. 18, 1995; 61 FR 67412, Dec. 20, 1996; 62 FR 40236, July 25, 1997; 65 FR 60544, Oct. 11, 2000; 68 FR 56680, Oct. 1, 2003; 68 FR 69249, Dec. 11, 2003; 71 FR 57365, 57380, Sept. 28, 2006; 72 FR 36854, July 5, 2007]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>4.603</SECTNO>
              <SUBJECT>Solicitation provisions.</SUBJECT>
              <P>(a) Insert the provision at 52.204-6, Data Universal Numbering System (DUNS) Number, in solicitations that—</P>
              <P>(1) Are expected to result in a requirement for the generation of an individual contract action report (see 4.602(c)); and</P>

              <P>(2) Do not contain the clause at 52.204-7, Central Contractor Registration.<PRTPAGE P="72"/>
              </P>
              <P>(b) Insert the provision at 52.204-5, Women-Owned Business (Other Than Small Business), in solicitations that—</P>
              <P>(1) Are not set aside for small business concerns;</P>
              <P>(2) Exceed the simplified acquisition threshold; and</P>
              <P>(3) Are for contracts that will be performed in the United States or its outlying areas.</P>
              <CITA>[61 FR 67412, Dec. 20, 1996, as amended at 63 FR 9050, Feb. 23, 1998; 64 FR 10532, Mar. 4, 1999; 68 FR 28080, May 22, 2003; 68 FR 56672, Oct. 1, 2003; 68 FR 69249, Dec. 11, 2003]</CITA>
            </SECTION>
          </SUBPART>
          <SUBPART>
            <HD SOURCE="HED">Subpart 4.7—Contractor Records Retention</HD>
            <SECTION>
              <SECTNO>4.700</SECTNO>
              <SUBJECT>Scope of subpart.</SUBJECT>
              <P>This subpart provides policies and procedures for retention of records by contractors to meet the records review requirements of the Government. In this subpart, the terms “contracts” and “contractors” include “subcontracts” and “subcontractors.”</P>
            </SECTION>
            <SECTION>
              <SECTNO>4.701</SECTNO>
              <SUBJECT>Purpose.</SUBJECT>
              <P>The purpose of this subpart is to generally describe records retention requirements and to allow reductions in the retention period for specific classes of records under prescribed circumstances.</P>
            </SECTION>
            <SECTION>
              <SECTNO>4.702</SECTNO>
              <SUBJECT>Applicability.</SUBJECT>
              <P>(a) This subpart applies to records generated under contracts that contain one of the following clauses:</P>
              <P>(1) Audit and Records—Sealed Bidding (52.214-26).</P>
              <P>(2) Audit and Records—Negotiation (52.215-2).</P>

              <P>(b) This subpart is not mandatory on Department of Energy contracts for which the Comptroller General allows alternative records retention periods. Apart from this exception, this subpart applies to record retention periods under contracts that are subject to Chapter 137, Title 10, U.S.C., or 40 U.S.C. 101, <E T="03">et seq.</E>
              </P>
              <CITA>[48 FR 42113, Sept. 19, 1983, as amended at 50 FR 1727, Jan. 11, 1985; 50 FR 52429, Dec. 23, 1985; 60 FR 42650, Aug. 16, 1995; 60 FR 48211, Sept. 18, 1995; 62 FR 258, Jan. 2, 1997; 70 FR 57454, Sept. 30, 2005]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>4.703</SECTNO>
              <SUBJECT>Policy.</SUBJECT>
              <P>(a) Except as stated in 4.703(b), contractors shall make available records, which includes books, documents, accounting procedures and practices, and other data, regardless of type and regardless of whether such items are in written form, in the form of computer data, or in any other form, and other supporting evidence to satisfy contract negotiation, administration, and audit requirements of the contracting agencies and the Comptroller General for (1) 3 years after final payment or, for certain records, (2) the period specified in 4.705 through 4.705-3, whichever of these periods expires first.</P>
              <P>(b) Contractors shall make available the foregoing records and supporting evidence for a longer period of time than is required in 4.703(a) if—</P>
              <P>(1) A retention period longer than that cited in 4.703(a) is specified in any contract clause; or</P>
              <P>(2) The contractor, for its own purposes, retains the foregoing records and supporting evidence for a longer period. Under this circumstance, the retention period shall be the period of the contractor's retention or 3 years after final payment, whichever period expires first.</P>
              <P>(3) The contractor does not meet the original due date for submission of final indirect cost rate proposals specified in subparagraph (d)(2) of the clause at 52.216-7, Allowable Cost and Payment. Under these circumstances, the retention periods in 4.705 shall be automatically extended one day for each day the proposal is not submitted after the original due date.</P>
              <P>(c) Nothing in this section shall be construed to preclude a contractor from duplicating or storing original records in electronic form unless they contain significant information not shown on the record copy. Original records need not be maintained or produced in an audit if the contractor or subcontractor provides photographic or electronic images of the original records and meets the following requirements:</P>

              <P>(1) The contractor or subcontractor has established procedures to ensure that the imaging process preserves accurate images of the original records, including signatures and other written <PRTPAGE P="73"/>or graphic images, and that the imaging process is reliable and secure so as to maintain the integrity of the records.</P>
              <P>(2) The contractor or subcontractor maintains an effective indexing system to permit timely and convenient access to the imaged records.</P>
              <P>(3) The contractor or subcontractor retains the original records for a minimum of one year after imaging to permit periodic validation of the imaging systems.</P>
              <P>(d) If the information described in paragraph (a) of this section is maintained on a computer, contractors shall retain the computer data on a reliable medium for the time periods prescribed. Contractors may transfer computer data in machine readable form from one reliable computer medium to another. Contractors' computer data retention and transfer procedures shall maintain the integrity, reliability, and security of the original computer data. Contractors shall also retain an audit trail describing the data transfer. For the record retention time periods prescribed, contractors shall not destroy, discard, delete, or write over such computer data.</P>
              <CITA>[48 FR 42113, Sept. 19, 1983, as amended at 51 FR 2649, Jan. 17, 1986; 53 FR 43388, Oct. 26, 1988; 54 FR 48982, Nov. 28, 1989; 59 FR 67015, Dec. 28, 1994; 60 FR 42650, Aug. 16, 1995; 62 FR 64915, Dec. 9, 1997; 72 FR 27383, May 15, 2007]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>4.704</SECTNO>
              <SUBJECT>Calculation of retention periods.</SUBJECT>
              <P>(a) The retention periods in 4.705 are calculated from the end of the contractor's fiscal year in which an entry is made charging or allocating a cost to a Government contract or subcontract. If a specific record contains a series of entries, the retention period is calculated from the end of the contractor's fiscal year in which the final entry is made. The contractor should cut off the records in annual blocks and retain them for block disposal under the prescribed retention periods.</P>
              <P>(b) When records generated during a prior contract are relied upon by a contractor for cost or pricing data in negotiating a succeeding contract, the prescribed periods shall run from the date of the succeeding contract.</P>
              <P>(c) If two or more of the record categories described in 4.705 are interfiled and screening for disposal is not practical, the contractor shall retain the entire record series for the longest period prescribed for any category of records.</P>
            </SECTION>
            <SECTION>
              <SECTNO>4.705</SECTNO>
              <SUBJECT>Specific retention periods.</SUBJECT>
              <P>The contractor shall retain the records identified in 4.705-1 through 4.705-3 for the periods designated, provided retention is required under 4.702. Records are identified in this subpart in terms of their purpose or use and not by specific name or form number. Although the descriptive identifications may not conform to normal contractor usage or filing practices, these identifications apply to all contractor records that come within the description.</P>
            </SECTION>
            <SECTION>
              <SECTNO>4.705-1</SECTNO>
              <SUBJECT>Financial and cost accounting records.</SUBJECT>
              <P>(a) Accounts receivable invoices, adjustments to the accounts, invoice registers, carrier freight bills, shipping orders, and other documents which detail the material or services billed on the related invoices: Retain 4 years.</P>
              <P>(b) Material, work order, or service order files, consisting of purchase requisitions or purchase orders for material or services, or orders for transfer of material or supplies: Retain 4 years.</P>
              <P>(c) Cash advance recapitulations, prepared as posting entries to accounts receivable ledgers for amounts of expense vouchers prepared for employees' travel and related expenses: Retain 4 years.</P>
              <P>(d) Paid, canceled, and voided checks, other than those issued for the payment of salary and wages: Retain 4 years.</P>
              <P>(e) Accounts payable records to support disbursements of funds for materials, equipment, supplies, and services, containing originals or copies of the following and related documents: remittance advices and statements, vendors' invoices, invoice audits and distribution slips, receiving and inspection reports or comparable certifications of receipt and inspection of material or services, and debit and credit memoranda: Retain 4 years.</P>
              <P>(f) Labor cost distribution cards or equivalent documents: Retain 2 years.</P>

              <P>(g) Petty cash records showing description of expenditures, to whom <PRTPAGE P="74"/>paid, name of person authorizing payment, and date, including copies of vouchers and other supporting documents: Retain 2 years.</P>
            </SECTION>
            <SECTION>
              <SECTNO>4.705-2</SECTNO>
              <SUBJECT>Pay administration records.</SUBJECT>
              <P>(a) Payroll sheets, registers, or their equivalent, of salaries and wages paid to individual employees for each payroll period; change slips; and tax withholding statements: Retain 4 years.</P>
              <P>(b) Clock cards or other time and attendance cards: Retain 2 years.</P>
              <P>(c) Paid checks, receipts for wages paid in cash, or other evidence of payments for services rendered by employees: Retain 2 years.</P>
              <CITA>[48 FR 42113, Sept. 19, 1983, as amended at 65 FR 36022, June 6, 2000; 67 FR 70517, Nov. 22, 2002]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>4.705-3</SECTNO>
              <SUBJECT>Acquisition and supply records.</SUBJECT>
              <P>(a) Store requisitions for materials, supplies, equipment, and services: Retain 2 years.</P>
              <P>(b) Work orders for maintenance and other services: Retain 4 years.</P>
              <P>(c) Equipment records, consisting of equipment usage and status reports and equipment repair orders: Retain 4 years.</P>
              <P>(d) Expendable property records, reflecting accountability for the receipt and use of material in the performance of a contract: Retain 4 years.</P>
              <P>(e) Receiving and inspection report records, consisting of reports reflecting receipt and inspection of supplies, equipment, and materials: Retain 4 years.</P>
              <P>(f) Purchase order files for supplies, equipment, material, or services used in the performance of a contract; supporting documentation and backup files including, but not limited to, invoices, and memoranda; e.g., memoranda of negotiations showing the principal elements of subcontract price negotiations (see 52.244-2): Retain 4 years.</P>
              <P>(g) Production records of quality control, reliability, and inspection: Retain 4 years.</P>
              <CITA>[48 FR 42113, Sept. 19, 1983, as amended at 63 FR 34060, June 22, 1998]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>4.706</SECTNO>
              <RESERVED>[Reserved]</RESERVED>
            </SECTION>
          </SUBPART>
          <SUBPART>
            <HD SOURCE="HED">Subpart 4.8—Government Contract Files</HD>
            <SECTION>
              <SECTNO>4.800</SECTNO>
              <SUBJECT>Scope of subpart.</SUBJECT>
              <P>This subpart prescribes requirements for establishing, maintaining, and disposing of contract files.</P>
              <CITA>[65 FR 36022, June 6, 2000]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>4.801</SECTNO>
              <SUBJECT>General.</SUBJECT>
              <P>(a) The head of each office performing contracting, contract administration, or paying functions shall establish files containing the records of all contractual actions.</P>
              <P>(b) The documentation in the files (see 4.803) shall be sufficient to constitute a complete history of the transaction for the purpose of—</P>
              <P>(1) Providing a complete background as a basis for informed decisions at each step in the acquisition process;</P>
              <P>(2) Supporting actions taken;</P>
              <P>(3) Providing information for reviews and investigations; and</P>
              <P>(4) Furnishing essential facts in the event of litigation or congressional inquiries.</P>
              <P>(c) The files to be established include—</P>
              <P>(1) A file for cancelled solicitations;</P>
              <P>(2) A file for each contract; and</P>
              <P>(3) A file such as a contractor general file, containing documents relating—for example—to (i) no specific contract, (ii) more than one contract, or (iii) the contractor in a general way (e.g., contractor's management systems, past performance, or capabilities).</P>
            </SECTION>
            <SECTION>
              <SECTNO>4.802</SECTNO>
              <SUBJECT>Contract files.</SUBJECT>
              <P>(a) A contract file should generally consist of—</P>
              <P>(1) The contracting office contract file, that documents the basis for the acquisition and the award, the assignment of contract administration (including payment responsibilities), and any subsequent actions taken by the contracting office;</P>

              <P>(2) The contract administration office contract file, that documents actions reflecting the basis for and the performance of contract administration responsibilities; and<PRTPAGE P="75"/>
              </P>
              <P>(3) The paying office contract file, that documents actions prerequisite to, substantiating, and reflecting contract payments.</P>
              <P>(b) Normally, each file should be kept separately; however, if appropriate, any or all of the files may be combined; e.g., if all functions or any combination of the functions are performed by the same office.</P>
              <P>(c) Files must be maintained at organizational levels that ensure—</P>
              <P>(1) Effective documentation of contract actions;</P>
              <P>(2) Ready accessibility to principal users;</P>
              <P>(3) Minimal establishment of duplicate and working files;</P>
              <P>(4) The safeguarding of classified documents; and</P>
              <P>(5) Conformance with agency regulations for file location and maintenance.</P>
              <P>(d) If the contract files or file segments are decentralized (e.g., by type or function) to various organizational elements or to other outside offices, responsibility for their maintenance must be assigned. A central control and, if needed, a locator system should be established to ensure the ability to locate promptly any contract files.</P>
              <P>(e) Contents of contract files that are contractor bid or proposal information or source selection information as defined in 2.101 must be protected from disclosure to unauthorized persons (see 3.104-4).</P>
              <P>(f) Agencies may retain contract files in any medium (paper, electronic, microfilm, etc.) or any combination of media, as long as the requirements of this subpart are satisfied.</P>
              <CITA>[48 FR 42113, Sept. 19, 1983, as amended at 54 FR 20496, May 11, 1989; 55 FR 36794, Sept. 6, 1990; 59 FR 67016, Dec. 28, 1994; 62 FR 232, Jan. 2, 1997; 67 FR 13063, Mar. 20, 2002]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>4.803</SECTNO>
              <SUBJECT>Contents of contract files.</SUBJECT>
              <P>The following are examples of the records normally contained, if applicable, in contract files:</P>
              <P>(a) <E T="03">Contracting office contract file.</E> (1) Purchase request, acquisition planning information, and other presolicitation documents.</P>
              <P>(2) Justifications and approvals, determinations and findings, and associated documents.</P>
              <P>(3) Evidence of availability of funds.</P>
              <P>(4) Synopsis of proposed acquisition as required by part 5 or a reference to the synopsis.</P>
              <P>(5) The list of sources solicited, and a list of any firms or persons whose requests for copies of the solicitation were denied, together with the reasons for denial.</P>
              <P>(6) Set-aside decision.</P>
              <P>(7) Government estimate of contract price.</P>
              <P>(8) A copy of the solicitation and all amendments thereto.</P>
              <P>(9) Security requirements and evidence of required clearances.</P>
              <P>(10) A copy of each offer or quotation, the related abstract, and records of determinations concerning late offers or quotations. Unsuccessful offers or quotations may be maintained separately, if cross-referenced to the contract file. The only portions of the unsuccessful offer or quotation that need be retained are—</P>
              <P>(i) Completed solicitation sections A, B, and K;</P>
              <P>(ii) Technical and management proposals;</P>
              <P>(iii) Cost/price proposals;</P>
              <P>(iv) Any other pages of the solicitation that the offeror or quoter has altered or annotated.</P>
              <P>(11) Contractor's representations and certifications (see 4.1201(c)).</P>
              <P>(12) Preaward survey reports or reference to previous preaward survey reports relied upon.</P>
              <P>(13) Source selection documentation.</P>
              <P>(14) Contracting officer's determination of the contractor's responsibility.</P>
              <P>(15) Small Business Administration Certificate of Competency.</P>
              <P>(16) Records of contractor's compliance with labor policies including equal employment opportunity policies.</P>
              <P>(17) Cost or pricing data and Certificates of Current Cost or Pricing Data or a required justification for waiver, or information other than cost or pricing data.</P>
              <P>(18) Packaging and transportation data.</P>
              <P>(19) Cost or price analysis.</P>
              <P>(20) Audit reports or reasons for waiver.</P>
              <P>(21) Record of negotiation.<PRTPAGE P="76"/>
              </P>
              <P>(22) Justification for type of contract.</P>
              <P>(23) Authority for deviations from this regulation, statutory requirements, or other restrictions.</P>
              <P>(24) Required approvals of award and evidence of legal review.</P>
              <P>(25) Notice of award.</P>
              <P>(26) The original of (i) the signed contract or award, (ii) all contract modifications, and (iii) documents supporting modifications executed by the contracting office.</P>
              <P>(27) Synopsis of award or reference thereto.</P>
              <P>(28) Notice to unsuccessful quoters or offerors and record of any debriefing.</P>
              <P>(29) Acquisition management reports (see subpart 4.6).</P>
              <P>(30) Bid, performance, payment, or other bond documents, or a reference thereto, and notices to sureties.</P>
              <P>(31) Report of postaward conference.</P>
              <P>(32) Notice to proceed, stop orders, and any overtime premium approvals granted at the time of award.</P>
              <P>(33) Documents requesting and authorizing modification in the normal assignment of contract administration functions and responsibility.</P>
              <P>(34) Approvals or disapprovals of requests for waivers or deviations from contract requirements.</P>
              <P>(35) Rejected engineering change proposals.</P>
              <P>(36) Royalty, invention, and copyright reports (including invention disclosures) or reference thereto.</P>
              <P>(37) Contract completion documents.</P>
              <P>(38) Documentation regarding termination actions for which the contracting office is responsible.</P>
              <P>(39) Cross-references to pertinent documents that are filed elsewhere.</P>
              <P>(40) Any additional documents on which action was taken or that reflect actions by the contracting office pertinent to the contract.</P>
              <P>(41) A current chronological list identifying the awarding and successor contracting officers, with inclusive dates of responsibility.</P>
              <P>(b) <E T="03">Contract administration office contract file.</E> (1) Copy of the contract and all modifications, together with official record copies of supporting documents executed by the contract administration office.</P>
              <P>(2) Any document modifying the normal assignment of contract administration functions and responsibility.</P>
              <P>(3) Security requirements.</P>
              <P>(4) Cost or pricing data, Certificates of Current Cost or Pricing Data, or information other than cost or pricing data; cost or price analysis; and other documentation supporting contractual actions executed by the contract administration office.</P>
              <P>(5) Preaward survey information.</P>
              <P>(6) Purchasing system information.</P>
              <P>(7) Consent to subcontract or purchase.</P>
              <P>(8) Performance and payment bonds and surety information.</P>
              <P>(9) Postaward conference records.</P>
              <P>(10) Orders issued under the contract.</P>
              <P>(11) Notice to proceed and stop orders.</P>
              <P>(12) Insurance policies or certificates of insurance or references to them.</P>
              <P>(13) Documents supporting advance or progress payments.</P>
              <P>(14) Progressing, expediting, and production surveillance records.</P>
              <P>(15) Quality assurance records.</P>
              <P>(16) Property administration records.</P>
              <P>(17) Documentation regarding termination actions for which the contract administration office is responsible.</P>
              <P>(18) Cross reference to other pertinent documents that are filed elsewhere.</P>
              <P>(19) Any additional documents on which action was taken or that reflect actions by the contract administration office pertinent to the contract.</P>
              <P>(20) Contract completion documents.</P>
              <P>(c) <E T="03">Paying office contract file.</E> (1) Copy of the contract and any modifications.</P>
              <P>(2) Bills, invoices, vouchers, and supporting documents.</P>
              <P>(3) Record of payments or receipts.</P>
              <P>(4) Other pertinent documents.</P>
              <CITA>[48 FR 42113, Sept. 19, 1983, as amended at 50 FR 1727, Jan. 11, 1985; 50 FR 52429, Dec. 23, 1985; 54 FR 5054, Jan. 31, 1989; 55 FR 36794, Sept. 6, 1990; 60 FR 48211, Sept. 18, 1995; 61 FR 39188, July 26, 1996; 61 FR 67430, Dec. 20, 1996; 62 FR 232, Jan. 2, 1997; 63 FR 9052, Feb. 23, 1998; 65 FR 46074, July 26, 2000; 66 FR 27409, May 16, 2001; 71 FR 57363, Sept. 28, 2006]</CITA>
            </SECTION>
            <SECTION>
              <PRTPAGE P="77"/>
              <SECTNO>4.804</SECTNO>
              <SUBJECT>Closeout of contract files.</SUBJECT>
            </SECTION>
            <SECTION>
              <SECTNO>4.804-1</SECTNO>
              <SUBJECT>Closeout by the office administering the contract.</SUBJECT>
              <P>(a) Except as provided in paragraph (c) below, time standards for closing out contract files are as follows:</P>
              <P>(1) Files for contracts using simplified acquisition procedures should be considered closed when the contracting officer receives evidence of receipt of property and final payment, unless otherwise specified by agency regulations.</P>
              <P>(2) Files for firm-fixed-price contracts, other than those using simplified acquisition procedures, should be closed within 6 months after the date on which the contracting officer receives evidence of physical completion.</P>
              <P>(3) Files for contracts requiring settlement of indirect cost rates should be closed within 36 months of the month in which the contracting officer receives evidence of physical completion.</P>
              <P>(4) Files for all other contracts should be closed within 20 months of the month in which the contracting officer receives evidence of physical completion.</P>
              <P>(b) When closing out the contract files at 4.804-1(a)(2), (3), and (4), the contracting officer shall use the closeout procedures at 4.804-5. However, these closeout actions may be modified to reflect the extent of administration that has been performed. Quick closeout procedures (see 42.708) should be used, when appropriate, to reduce administrative costs and to enable deobligation of excess funds.</P>
              <P>(c) A contract file shall not be closed if (1) the contract is in litigation or under appeal, or (2) in the case of a termination, all termination actions have not been completed.</P>
              <CITA>[48 FR 42113, Sept. 19, 1983, as amended at 54 FR 34752, Aug. 21, 1989; 60 FR 34746, July 3, 1995]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>4.804-2</SECTNO>
              <SUBJECT>Closeout of the contracting office files if another office administers the contract.</SUBJECT>
              <P>(a) Contract files for contracts using simplified acquisition procedures should be considered closed when the contracting officer receives evidence of receipt of property and final payment, unless otherwise specified by agency regulation.</P>
              <P>(b) All other contract files shall be closed as soon as practicable after the contracting officer receives a contract completion statement from the contract administration office. The contracting officer shall ensure that all contractual actions required have been completed and shall prepare a statement to that effect. This statement is authority to close the contract file and shall be made a part of the official contract file.</P>
              <CITA>[48 FR 42113, Sept. 19, 1983, as amended at 60 FR 34746, July 3, 1995]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>4.804-3</SECTNO>
              <SUBJECT>Closeout of paying office contract files.</SUBJECT>
              <P>The paying office shall close the contract file upon issuance of the final payment voucher.</P>
            </SECTION>
            <SECTION>
              <SECTNO>4.804-4</SECTNO>
              <SUBJECT>Physically completed contracts.</SUBJECT>
              <P>(a) Except as provided in paragraph (b) below, a contract is considered to be physically completed when—</P>
              <P>(1)(i) The contractor has completed the required deliveries and the Government has inspected and accepted the supplies;</P>
              <P>(ii) The contractor has performed all services and the Government has accepted these services; and</P>
              <P>(iii) All option provisions, if any, have expired; or</P>
              <P>(2) The Government has given the contractor a notice of complete contract termination.</P>
              <P>(b) Rental, use, and storage agreements are considered to be physically completed when—</P>
              <P>(1) The Government has given the contractor a notice of complete contract termination; or</P>
              <P>(2) The contract period has expired.</P>
              <CITA>[48 FR 42113, Sept. 19, 1983, as amended at 72 FR 27383, May 15, 2007]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>4.804-5</SECTNO>
              <SUBJECT>Procedures for closing out contract files.</SUBJECT>

              <P>(a) The contract administration office is responsible for initiating (automated or manual) administrative closeout of the contract after receiving evidence of its physical completion. At the outset of this process, the contract administration office must review the <PRTPAGE P="78"/>contract funds status and notify the contracting office of any excess funds the contract administration office might deobligate. When complete, the administrative closeout procedures must ensure that—</P>
              <P>(1) Disposition of classified material is completed;</P>
              <P>(2) Final patent report is cleared;</P>
              <P>(3) Final royalty report is cleared;</P>
              <P>(4) There is no outstanding value engineering change proposal;</P>
              <P>(5) Plant clearance report is received;</P>
              <P>(6) Property clearance is received;</P>
              <P>(7) All interim or disallowed costs are settled;</P>
              <P>(8) Price revision is completed;</P>
              <P>(9) Subcontracts are settled by the prime contractor;</P>
              <P>(10) Prior year indirect cost rates are settled;</P>
              <P>(11) Termination docket is completed;</P>
              <P>(12) Contract audit is completed;</P>
              <P>(13) Contractor's closing statement is completed;</P>
              <P>(14) Contractor's final invoice has been submitted; and</P>
              <P>(15) Contract funds review is completed and excess funds deobligated.</P>
              <P>(b) When the actions in paragraph (a) above have been verified, the contracting officer administering the contract must ensure that a contract completion statement, containing the following information, is prepared:</P>
              <P>(1) Contract administration office name and address (if different from the contracting office).</P>
              <P>(2) Contracting office name and address.</P>
              <P>(3) Contract number.</P>
              <P>(4) Last modification number.</P>
              <P>(5) Last call or order number.</P>
              <P>(6) Contractor name and address.</P>
              <P>(7) Dollar amount of excess funds, if any.</P>
              <P>(8) Voucher number and date, if final payment has been made.</P>
              <P>(9) Invoice number and date, if the final approved invoice has been forwarded to a disbursing office of another agency or activity and the status of the payment is unknown.</P>
              <P>(10) A statement that all required contract administration actions have been fully and satisfactorily accomplished.</P>
              <P>(11) Name and signature of the contracting officer.</P>
              <P>(12) Date.</P>
              <P>(c) When the statement is completed, the contracting officer must ensure that—</P>
              <P>(1) The signed original is placed in the contracting office contract file (or forwarded to the contracting office for placement in the files if the contract administration office is different from the contracting office); and</P>
              <P>(2) A signed copy is placed in the appropriate contract administration file if administration is performed by a contract administration office.</P>
              <CITA>[48 FR 42113, Sept. 19, 1983, as amended at 54 FR 34752, Aug. 21, 1989; 64 FR 72445, Dec. 27, 1999]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>4.805</SECTNO>
              <SUBJECT>Storage, handling, and disposal of contract files.</SUBJECT>

              <P>(a) Agencies must prescribe procedures for the handling, storing, and disposing of contract files. These procedures must take into account documents held in all types of media, including microfilm and various electronic media. Agencies may change the original medium to facilitate storage as long as the requirements of Part 4, law, and other regulations are satisfied. The process used to create and store records must record and reproduce the original document, including signatures and other written and graphic images completely, accurately, and clearly. Data transfer, storage, and retrieval procedures must protect the original data from alteration. Unless law or other regulations require signed originals to be kept, they may be destroyed after the responsible agency official verifies that record copies on alternate media and copies reproduced from the record copy are accurate, complete, and clear representations of the originals. Agency procedures for contract file disposal must include provisions that the documents specified in paragraph (b) of this section may not be destroyed before the times indicated, and may be retained longer if the responsible agency official determines that the files have future value to the Government. When original documents have been converted to alternate media for storage, the requirements in paragraph (b) of this section <PRTPAGE P="79"/>also apply to the record copies in the alternate media.</P>
              <P>(b) If administrative records are mixed with program records and cannot be economically segregated, the entire file should be kept for the period of time approved for the program records. Similarly, if documents described in the following table are part of a subject or case file that documents activities that are not described in the table, they should be treated in the same manner as the files of which they are a part. The retention periods for acquisitions at or below the simplified acquisition threshold also apply to acquisitions conducted prior to July 3, 1995, that used small purchase procedures. The retention periods for acquisitions above the simplified acquisition threshold also apply to acquisitions conducted prior to July 3, 1995, that used other than small purchase procedures.</P>
              <GPOTABLE CDEF="s50,r50" COLS="2" OPTS="L2">
                <BOXHD>
                  <CHED H="1">Document</CHED>
                  <CHED H="1">Retention period</CHED>
                </BOXHD>
                <ROW RUL="s">
                  <ENT I="01">(1) Records pertaining to Contract Disputes Act actions</ENT>
                  <ENT>6 years and 3 months after final action or decision for files created prior to October 1, 1979. 1 year after final action or decision for files created on or after October 1, 1979.</ENT>
                </ROW>
                <ROW RUL="s">
                  <ENT I="01">(2) Contracts (and related records or documents, including successful proposals) exceeding the simplified acquisition threshold for other than construction</ENT>
                  <ENT>6 years and 3 months after final payment.</ENT>
                </ROW>
                <ROW RUL="s">
                  <ENT I="01">(3) Contracts (and related records or documents, including successful proposals) at or below the simplified acquisition threshold for other than construction</ENT>
                  <ENT>3 years after final payment.</ENT>
                </ROW>
                <ROW>
                  <ENT I="11">(4) Construction contracts:</ENT>
                </ROW>
                <ROW RUL="s">
                  <ENT I="03">(i) Above $2,000</ENT>
                  <ENT>6 years and 3 months after final payment.</ENT>
                </ROW>
                <ROW RUL="s">
                  <ENT I="03">(ii) $2,000 or less</ENT>
                  <ENT>3 years after final payment.</ENT>
                </ROW>
                <ROW RUL="s">
                  <ENT I="03">(iii) Related records or documents, including successful proposals, except for contractor's payrolls (see (b)(4)(iv))</ENT>
                  <ENT>Same as contract file.</ENT>
                </ROW>
                <ROW RUL="s">
                  <ENT I="03">(iv) Contractor's payrolls submitted in accordance with Department of Labor regulations, with related certifications, anti-kickback affidavits, and other related papers</ENT>
                  <ENT>3 years after contract completion unless contract performance is the subject of an enforcement action on that date.</ENT>
                </ROW>
                <ROW>
                  <ENT I="11">(5) Solicited and unsolicited unsuccessful offers, quotations, bids, and proposals:</ENT>
                </ROW>
                <ROW RUL="s">
                  <ENT I="03">(i) Relating to contracts above the simplified acquisition threshold</ENT>
                  <ENT>If filed separately from contract file, until contract is completed. Otherwise, the same as related contract file.</ENT>
                </ROW>
                <ROW RUL="s">
                  <ENT I="03">(ii) Relating to contracts at or below the simplified acquisition threshold</ENT>
                  <ENT>1 year after date of award or until final payment, whichever is later.</ENT>
                </ROW>
                <ROW RUL="s">
                  <ENT I="01">(6) Files for canceled solicitations</ENT>
                  <ENT>5 years after cancellation.</ENT>
                </ROW>
                <ROW RUL="s">
                  <ENT I="01">(7) Other copies of procurement file records used by component elements of a contracting office for administrative purposes</ENT>
                  <ENT>Upon termination or completion.</ENT>
                </ROW>
                <ROW RUL="s">
                  <ENT I="01">(8) Documents pertaining generally to the contractor as described at 4.801(c)(3)</ENT>
                  <ENT>Until superseded or obsolete.</ENT>
                </ROW>
                <ROW RUL="s">
                  <ENT I="01">(9) Data submitted to the Federal Procurement Data System (FPDS). Electronic data file maintained by fiscal year, containing unclassified records of all procurements other than simplified acquisitions, and information required under 4.601</ENT>
                  <ENT>5 years after submittal to FPDS.</ENT>
                </ROW>
                <ROW>
                  <ENT I="01">(10) Investigations, cases pending or in litigation (including protests), or similar matters</ENT>
                  <ENT>Until final clearance or settlement, or, if related to a document identified in (b)(1)-(9), for the retention period specified for the related document, whichever is later.</ENT>
                </ROW>
              </GPOTABLE>
              <CITA>[65 FR 36022, June 6, 2000]</CITA>
            </SECTION>
          </SUBPART>
          <SUBPART>
            <HD SOURCE="HED">Subpart 4.9—Taxpayer Identification Number Information</HD>
            <AUTH>
              <HD SOURCE="HED">Authority:</HD>
              <P>40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42 U.S.C. 2473(c).</P>
            </AUTH>
            <SOURCE>
              <HD SOURCE="HED">Source:</HD>
              <P>63 FR 58589, Oct. 30, 1998, unless otherwise noted.</P>
            </SOURCE>
            <SECTION>
              <SECTNO>4.900</SECTNO>
              <SUBJECT>Scope of subpart.</SUBJECT>

              <P>This subpart provides policies and procedures for obtaining—<PRTPAGE P="80"/>
              </P>
              <P>(a) Taxpayer Identification Number (TIN) information that may be used for debt collection purposes; and</P>
              <P>(b) Contract information and payment information for submittal to the payment office for Internal Revenue Service (IRS) reporting purposes.</P>
            </SECTION>
            <SECTION>
              <SECTNO>4.901</SECTNO>
              <SUBJECT>Definition.</SUBJECT>
              <P>
                <E T="03">Common parent,</E> as used in this subpart, means that corporate entity that owns or controls an affiliated group of corporations that files its Federal income tax returns on a consolidated basis, and of which the offeror is a member.</P>
              <CITA>[60 FR 28493, May 31, 1995, as amended at 66 FR 2127, Jan. 10, 2001]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>4.902</SECTNO>
              <SUBJECT>General.</SUBJECT>
              <P>(a) <E T="03">Debt collection.</E> 31 U.S.C. 7701(c) requires each contractor doing business with a Government agency to furnish its TIN to that agency. 31 U.S.C. 3325(d) requires the Government to include, with each certified voucher prepared by the Government payment office and submitted to a disbursing official, the TIN of the contractor receiving payment under the voucher. The TIN may be used by the Government to collect and report on any delinquent amounts arising out of the contractor's relationship with the Government.</P>
              <P>(b) <E T="03">Information reporting to the IRS.</E> The TIN is also required for Government reporting of certain contract information (see 4.903) and payment information (see 4.904) to the IRS.</P>
            </SECTION>
            <SECTION>
              <SECTNO>4.903</SECTNO>
              <SUBJECT>Reporting contract information to the IRS.</SUBJECT>
              <P>(a) 26 U.S.C. 6050M, as implemented in 26 CFR, requires heads of Federal executive agencies to report certain information to the IRS.</P>
              <P>(b)(1) The required information applies to contract modifications—</P>
              <P>(i) Increasing the amount of a contract awarded before January 1, 1989, by $50,000 or more; and</P>
              <P>(ii) Entered into on or after April 1, 1990.</P>
              <P>(2) The reporting requirement also applies to certain contracts and modifications thereto in excess of $25,000 entered into on or after January 1, 1989.</P>
              <P>(c) The information to report is—</P>
              <P>(1) Name, address, and TIN of the contractor;</P>
              <P>(2) Name and TIN of the common parent (if any);</P>
              <P>(3) Date of the contract action;</P>
              <P>(4) Amount obligated on the contract action; and</P>
              <P>(5) Estimated contract completion date.</P>
              <P>(d) Transmit the information to the IRS through the Federal Procurement Data System (see Subpart 4.6 and implementing instructions).</P>
            </SECTION>
            <SECTION>
              <SECTNO>4.904</SECTNO>
              <SUBJECT>Reporting payment information to the IRS.</SUBJECT>
              <P>26 U.S.C. 6041 and 6041A, as implemented in 26 CFR, in part, require payors, including Government agencies, to report to the IRS, on Form 1099, payments made to certain contractors. 26 U.S.C. 6109 requires a contractor to provide its TIN if a Form 1099 is required. The payment office is responsible for submitting reports to the IRS.</P>
            </SECTION>
            <SECTION>
              <SECTNO>4.905</SECTNO>
              <SUBJECT>Solicitation provision.</SUBJECT>
              <P>The contracting officer shall insert the provision at 52.204-3, Taxpayer Identification, in solicitations that—</P>
              <P>(a) Do not include the clause at 52.204-7, Central Contractor Registration; and</P>
              <P>(b) Are not conducted under the procedures of part 12.</P>
              <CITA>[68 FR 56672, Oct. 1, 2003]</CITA>
            </SECTION>
          </SUBPART>
          <SUBPART>
            <HD SOURCE="HED">Subpart 4.10—Administrative Matters</HD>
            <SOURCE>
              <HD SOURCE="HED">Source:</HD>
              <P>62 FR 51230, Sept. 30, 1997, unless otherwise noted.</P>
            </SOURCE>
            <SECTION>
              <SECTNO>4.1001</SECTNO>
              <SUBJECT>Policy.</SUBJECT>
              <P>Contracts may identify the items or services to be acquired as separately identified line items. Contract line items should provide unit prices or lump sum prices for separately identifiable contract deliverables, and associated delivery schedules or performance periods. Line items may be further subdivided or stratified for administrative purposes (e.g., to provide for traceable accounting classification citations).</P>
              <CITA>[62 FR 51230, Sept. 30, 1997]</CITA>
            </SECTION>
          </SUBPART>
          <SUBPART>
            <PRTPAGE P="81"/>
            <HD SOURCE="HED">Subpart 4.11—Central Contractor Registration</HD>
            <SOURCE>
              <HD SOURCE="HED">Source:</HD>
              <P>68 FR 56672, Oct. 1, 2003, unless otherwise noted.</P>
            </SOURCE>
            <SECTION>
              <SECTNO>4.1100</SECTNO>
              <SUBJECT>Scope.</SUBJECT>
              <P>This subpart prescribes policies and procedures for requiring contractor registration in the Central Contractor Registration (CCR) database, a part of the Business Partner Network (BPN) to—</P>
              <P>(a) Increase visibility of vendor sources (including their geographical locations) for specific supplies and services; and</P>
              <P>(b) Establish a common source of vendor data for the Government.</P>
            </SECTION>
            <SECTION>
              <SECTNO>4.1101</SECTNO>
              <SUBJECT>Definition.</SUBJECT>
              <P>As used in this subpart—</P>
              <P>
                <E T="03">Agreement</E> means basic agreement, basic ordering agreement, or blanket purchase agreement.</P>
              <CITA>[48 FR 42113, Sept. 19, 1983, as amended at 69 FR 76345, Dec. 20, 2004]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>4.1102</SECTNO>
              <SUBJECT>Policy.</SUBJECT>
              <P>(a) Prospective contractors shall be registered in the CCR database prior to award of a contract or agreement, except for—</P>
              <P>(1) Purchases that use a Governmentwide commercial purchase card as both the purchasing and payment mechanism, as opposed to using the purchase card only as a payment method;</P>
              <P>(2) Classified contracts (<E T="03">see</E> 2.101) when registration in the CCR database, or use of CCR data, could compromise the safeguarding of classified information or national security;</P>
              <P>(3) Contracts awarded by—</P>
              <P>(i) Deployed contracting officers in the course of military operations, including, but not limited to, contingency operations as defined in 10 U.S.C. 101(a)(13) or humanitarian or peacekeeping operations as defined in 10 U.S.C. 2302(7); or</P>
              <P>(ii) Contracting officers in the conduct of emergency operations, such as responses to natural or environmental disasters or national or civil emergencies, e.g., Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121);</P>

              <P>(4) Contracts to support unusual or compelling needs (<E T="03">see</E> 6.302-2);</P>
              <P>(5) Awards made to foreign vendors for work performed outside the United States, if it is impractical to obtain CCR registration; and</P>

              <P>(6) Micro-purchases that do not use the electronic funds transfer (EFT) method for payment and are not required to be reported (<E T="03">see</E> subpart 4.6).</P>
              <P>(b) If practical, the contracting officer shall modify the contract or agreement awarded under paragraph (a)(3) or (a)(4) of this section to require CCR registration.</P>
              <P>(c)(1)(i) If a contractor has legally changed its business name, “doing business as” name, or division name (whichever is shown on the contract), or has transferred the assets used in performing the contract, but has not completed the necessary requirements regarding novation and change-of-name agreements in Subpart 42.12, the contractor shall provide the responsible contracting officer a minimum of one business day's written notification of its intention to change the name in the CCR database; comply with the requirements of Subpart 42.12; and agree in writing to the timeline and procedures specified by the responsible contracting officer. The contractor must provide with the notification sufficient documentation to support the legally changed name.</P>
              <P>(ii) If the contractor fails to comply with the requirements of paragraph (g)(1)(i) of the clause at 52.204-7, Central Contractor Registration, or fails to perform the agreement at 52.204-7(g)(1)(i)(C), and, in the absence of a properly executed novation or change-of-name agreement, the CCR information that shows the contractor to be other than the contractor indicated in the contract will be considered to be incorrect information within the meaning of the “Suspension of Payment” paragraph of the EFT clause of the contract.</P>

              <P>(2) The contractor shall not change the name or address for electronic funds transfer payments (EFT) or manual payments, as appropriate, in the CCR record to reflect an assignee for the purpose of assignment of claims (<E T="03">see</E> subpart 32.8, Assignment of Claims).<PRTPAGE P="82"/>
              </P>
              <P>(3) Assignees shall be separately registered in the CCR database. Information provided to the contractor's CCR record that indicates payments, including those made by EFT, to an ultimate recipient other than that contractor will be considered to be incorrect information within the meaning of the “Suspension of payment” paragraph of the EFT clause of the contract.</P>
              <CITA>[48 FR 42113, Sept. 19, 1983, as amended at 43586, July 27, 2005]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>4.1103</SECTNO>
              <SUBJECT>Procedures.</SUBJECT>
              <P>(a) Unless the acquisition is exempt under 4.1102, the contracting officer—</P>
              <P>(1) Shall verify that the prospective contractor is registered in the CCR database (see paragraph (b) of this section) before awarding a contract or agreement. Contracting officers are encouraged to check the CCR early in the acquisition process, after the competitive range has been established, and then communicate to the unregistered offerors that they must register;</P>
              <P>(2) Should use the DUNS number or, if applicable, the DUNS+4 number, to verify registration—</P>
              <P>(i) Via the Internet at <E T="03">http://www.ccr.gov</E>;</P>
              <P>(ii) By calling toll-free: 1-888-227-2423, commercial: (269) 961-5757, or Defense Switched Network (DSN) (used at certain Department of Defense locations): 932-5757; or</P>
              <P>(iii) As otherwise provided by agency procedures; and</P>
              <P>(3) Need not verify registration before placing an order or call if the contract or agreement includes the clause at 52.204-7, or 52.212-4(t), or a similar agency clause.</P>

              <P>(b) If the contracting officer, when awarding a contract or agreement, determines that a prospective contractor is not registered in the CCR database and an exception to the registration requirements for the award does not apply (<E T="03">see</E> 4.1102), the contracting officer shall—</P>

              <P>(1) If the needs of the requiring activity allow for a delay, make award after the apparently successful offeror has registered in the CCR database. The contracting officer shall advise the offeror of the number of days it will be allowed to become registered. If the offeror does not become registered by the required date, the contracting officer shall award to the next otherwise successful registered offeror following the same procedures (<E T="03">i.e.,</E> if the next apparently successful offeror is not registered, the contracting officer shall advise the offeror of the number of days it will be allowed to become registered, etc.); or</P>
              <P>(2) If the needs of the requiring activity do not allow for a delay, proceed to award to the next otherwise successful registered offeror, provided that written approval is obtained at one level above the contracting officer.</P>
              <P>(c) Agencies shall protect against improper disclosure of contractor CCR information.</P>
              <P>(d) The contracting officer shall, on contractual documents transmitted to the payment office, provide the DUNS number, or, if applicable, the DUNS+4, in accordance with agency procedures.</P>
              <CITA>[59 FR 67018, Dec. 28, 1994, as amended at 71 FR 36924, June 28, 2006]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>4.1104</SECTNO>
              <SUBJECT>Solicitation provision and contract clauses.</SUBJECT>
              <P>Except as provided in 4.1102(a), use the clause at 52.204-7, Central Contractor Registration, in solicitations and contracts.</P>
              <CITA>[59 FR 67018, Dec. 28, 1994, as amended at 71 FR 36924, June 28, 2006]</CITA>
            </SECTION>
          </SUBPART>
          <SUBPART>
            <HD SOURCE="HED">Subpart 4.12—Representations and Certifications</HD>
            <SOURCE>
              <HD SOURCE="HED">Source:</HD>
              <P>69 FR 76345, Dec. 20, 2004, unless otherwise noted.</P>
            </SOURCE>
            <SECTION>
              <SECTNO>4.1200</SECTNO>
              <SUBJECT>Scope.</SUBJECT>
              <P>This subpart prescribes policies and procedures for requiring submission and maintenance of representations and certifications via the Online Representations and Certifications Application (ORCA) to—</P>
              <P>(a) Eliminate the administrative burden for contractors of submitting the same information to various contracting offices; and</P>
              <P>(b) Establish a common source for this information to procurement offices across the Government.</P>
              <CITA>[69 FR 76345, Dec. 20, 2004, as amended at 72 FR 36854, July 5, 2007]</CITA>
            </SECTION>
            <SECTION>
              <PRTPAGE P="83"/>
              <SECTNO>4.1201</SECTNO>
              <SUBJECT>Policy.</SUBJECT>

              <P>(a) Prospective contractors shall complete electronic annual representations and certifications at <E T="03">http://orca.bpn.gov</E> in conjunction with required registration in the Central Contractor Registration (CCR) database (see FAR 4.1102).</P>
              <P>(b)(1) Prospective contractors shall update the representations and certifications submitted to ORCA as necessary, but at least annually, to ensure they are kept current, accurate, and complete. The representations and certifications are effective until one year from date of submission or update to ORCA.</P>
              <P>(2) When the conditions in paragraph (b) of the clause at 52.219-28, Post-Award Small Business Program Rerepresentation, apply, contractors that represented they were small businesses prior to award of a contract must update the representations and certifications in ORCA as directed by the clause. Contractors that represented they were other than small businesses prior to award of a contract may update the representations and certifications in ORCA as directed by the clause, if their size status has changed since contract award.</P>
              <P>(c) Data in ORCA is archived and is electronically retrievable. Therefore, when a prospective contractor has completed representations and certifications electronically via ORCA, the contracting officer must reference the date of ORCA verification in the contract file, or include a paper copy of the electronically-submitted representations and certifications in the file. Either of these actions satisfies contract file documentation requirements of 4.803(a)(11). However, if an offeror identifies changes to ORCA data pursuant to the FAR provisions at 52.204-8(c) or 52.212-3(k), the contracting officer must include a copy of the changes in the contract file.</P>
              <CITA>[69 FR 76345, Dec. 20, 2004, as amended at 71 FR 57363, Sept. 28, 2006; 72 FR 36854, July 5, 2007]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>4.1202</SECTNO>
              <SUBJECT>Solicitation provision and contract clause.</SUBJECT>
              <P>Except for commercial item solicitations issued under FAR Part 12, insert in solicitations the provision at 52.204-8, Annual Representations and Certifications. When the clause at 52.204-7, Central Contractor Registration, is included in the solicitation, do not include the following representations and certifications:</P>
              <P>(a) 52.203-2, Certificate of Independent Price Determination.</P>
              <P>(b) 52.203-11, Certification and Disclosure Regarding Payments to Influence Certain Federal Transactions.</P>
              <P>(c) 52.204-3, Taxpayer Identification.</P>
              <P>(d) 52.204-5, Women-Owned Business (Other Than Small Business).</P>
              <P>(e) 52.209-5, Certification Regarding Debarment, Suspension, Proposed Debarment, and Other Responsibility Matters.</P>
              <P>(f) 52.214-14, Place of Performance—Sealed Bidding.</P>
              <P>(g) 52.215-6, Place of Performance.</P>
              <P>(h) 52.219-1, Small Business Program Representations (Basic &amp; Alternate I).</P>
              <P>(i) 52.219-2, Equal Low Bids.</P>
              <P>(j) 52.219-19, Small Business Concern Representation for the Small Business Competitiveness Demonstration Program.</P>
              <P>(k) 52.219-21, Small Business Size Representation for Targeted Industry Categories Under the Small Business Competitiveness Demonstration Program.</P>
              <P>(l) 52.219-22, Small Disadvantaged Business Status (Basic &amp; Alternate I).</P>
              <P>(m) 52.222-18, Certification Regarding Knowledge of Child Labor for Listed End Products.</P>
              <P>(n) 52.222-22, Previous Contracts and Compliance Reports.</P>
              <P>(o) 52.222-25, Affirmative Action Compliance.</P>
              <P>(p) 52.222-38, Compliance with Veterans' Employment Reporting Requirements.</P>
              <P>(q) 52.222-48, Exemption from Application of Service Contract Act Provisions—Contractor Certification.</P>
              <P>(r) 52.223-4, Recovered Material Certification.</P>
              <P>(s) 52.223-9, Estimate of Percentage of Recovered Material Content for EPA-Designated Products (Alternate I only).</P>
              <P>(t) 52.223-13, Certification of Toxic Chemical Release Reporting.</P>
              <P>(u) 52.225-2, Buy American Act Certificate.<PRTPAGE P="84"/>
              </P>
              <P>(v) 52.225-4, Buy American Act—Free Trade Agreements—Israeli Trade Act Certificate (Basic, Alternate I &amp; II).</P>
              <P>(w) 52.225-6, Trade Agreements Certificate.</P>
              <P>(x) 52.226-2, Historically Black College or University and Minority Institution Representation.</P>
              <P>(y) 52.227-6, Royalty Information (Basic &amp; Alternate I).</P>
              <P>(z) 52.227-15, Representation of Limited Rights Data and Restricted Computer Software.</P>
              <CITA>[69 FR 76345, Dec. 20, 2004, as amended at 71 FR 36931, June 28, 2006]</CITA>
            </SECTION>
          </SUBPART>
          <SUBPART>
            <HD SOURCE="HED">Subpart 4.13—Personal Identity Verification</HD>
            <SOURCE>
              <HD SOURCE="HED">Source:</HD>
              <P>72 FR 46335, Aug. 17, 2007, unless otherwise noted.</P>
            </SOURCE>
            <SECTION>
              <SECTNO>4.1300</SECTNO>
              <SUBJECT>Scope of subpart.</SUBJECT>
              <P>This subpart provides policy and procedures associated with Personal Identity Verification as required by—</P>
              <P>(a) Federal Information Processing Standards Publication (FIPS PUB) Number 201, “Personal Identity Verification of Federal Employees and Contractors”; and</P>
              <P>(b) Office of Management and Budget (OMB) Guidance M-05-24, dated August 5, 2005, “Implementation of Homeland Security Presidential Directive (HSPD) 12—Policy for a Common Identification Standard for Federal Employees and Contractors.”</P>
            </SECTION>
            <SECTION>
              <SECTNO>4.1301</SECTNO>
              <SUBJECT>Policy.</SUBJECT>
              <P>(a) Agencies must follow FIPS PUB Number 201 and the associated OMB implementation guidance for personal identity verification for all affected contractor and subcontractor personnel when contract performance requires contractors to have routine physical access to a Federally-controlled facility and/or routine access to a Federally-controlled information system.</P>
              <P>(b) Agencies must include their implementation of FIPS PUB 201 and OMB Guidance M-05-24 in solicitations and contracts that require the contractor to have routine physical access to a Federally-controlled facility and/or routine access to a Federally-controlled information system.</P>
              <P>(c) Agencies must designate an official responsible for verifying contractor employee personal identity.</P>
            </SECTION>
            <SECTION>
              <SECTNO>4.1302</SECTNO>
              <SUBJECT>Acquisition of approved products and services for personal identity verification.</SUBJECT>
              <P>(a) In order to comply with FIPS PUB 201, agencies must purchase only approved personal identity verification products and services.</P>
              <P>(b) Agencies may acquire the approved products and services from the GSA, Federal Supply Schedule 70, Special Item Number (SIN) 132-62, HSPD-12 Product and Service Components, in accordance with ordering procedures outlined in FAR Subpart 8.4.</P>
              <P>(c) When acquiring personal identity verification products and services not using the process in paragraph (b) of this section, agencies must ensure that the applicable products and services are approved as compliant with FIPS PUB 201 including—</P>
              <P>(1) Certifying the products and services procured meet all applicable Federal standards and requirements;</P>
              <P>(2) Ensuring interoperability and conformance to applicable Federal standards for the lifecycle of the components; and</P>
              <P>(3) Maintaining a written plan for ensuring ongoing conformance to applicable Federal standards for the lifecycle of the components.</P>

              <P>(d) For more information on personal identity verification products and services see <E T="03">http://www.idmanagement.gov</E>.</P>
            </SECTION>
            <SECTION>
              <SECTNO>4.1303</SECTNO>
              <SUBJECT>Contract clause.</SUBJECT>
              <P>The contracting officer shall insert the clause at 52.204-9, Personal Identity Verification of Contractor Personnel, in solicitations and contracts when contract performance requires contractors to have routine physical access to a Federally-controlled facility and/or routine access to a Federally-controlled information system. The clause shall not be used when contractors require only intermittent access to Federally-controlled facilities.</P>
            </SECTION>
          </SUBPART>
          <SUBPART>
            <PRTPAGE P="85"/>
            <HD SOURCE="HED">Subpart 4.14—Reporting Subcontract Awards</HD>
            <SOURCE>
              <HD SOURCE="HED">Source</HD>
              <P>72 FR 51309, Sept. 6, 2007, unless otherwise noted.</P>
            </SOURCE>
            <SECTION>
              <SECTNO>4.1400</SECTNO>
              <SUBJECT>Scope of subpart.</SUBJECT>
              <P>This subpart implements section 2(d) of the Federal Funding Accountability and Transparency Act of 2006 (Pub. L. No. 109-282) by establishing a pilot program for a single searchable website, which will eventually be available to the public at no charge, that includes information on Federal subcontracts. This pilot program will expire not later than January 1, 2009. Information reported under the pilot program will not be disclosed to the public.</P>
            </SECTION>
            <SECTION>
              <SECTNO>4.1401</SECTNO>
              <SUBJECT>Contract clause.</SUBJECT>
              <P>(a) Except as provided in paragraph (b) of this section, insert the clause at 52.204-10, Reporting Subcontract Awards, in all solicitations and contracts with values of $500,000,000 or more when the contract will be awarded and performed in the United States.</P>
              <P>(b) The clause is not required in—</P>
              <P>(1) Solicitations and contracts for commercial items issued under FAR Part 12; or</P>
              <P>(2) Classified solicitations and contracts.</P>
            </SECTION>
          </SUBPART>
        </PART>
      </SUBCHAP>
      <SUBCHAP TYPE="P">
        <PRTPAGE P="86"/>
        <HD SOURCE="HED">SUBCHAPTER B—ACQUISITION PLANNING</HD>
        <PART>
          <EAR>Pt. 5</EAR>
          <HD SOURCE="HED">PART 5—PUBLICIZING CONTRACT ACTIONS</HD>
          <CONTENTS>
            <SECHD>Sec.</SECHD>
            <SECTNO>5.000</SECTNO>
            <SUBJECT>Scope of part.</SUBJECT>
            <SECTNO>5.001</SECTNO>
            <SUBJECT>Definition.</SUBJECT>
            <SECTNO>5.002</SECTNO>
            <SUBJECT>Policy.</SUBJECT>
            <SECTNO>5.003</SECTNO>
            <SUBJECT>Governmentwide point of entry.</SUBJECT>
            <SUBPART>
              <HD SOURCE="HED">Subpart 5.1—Dissemination of Information</HD>
              <SECTNO>5.101</SECTNO>
              <SUBJECT>Methods of disseminating information.</SUBJECT>
              <SECTNO>5.102</SECTNO>
              <SUBJECT>Availability of solicitations.</SUBJECT>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart 5.2—Synopses of Proposed Contract Actions</HD>
              <SECTNO>5.201</SECTNO>
              <SUBJECT>General.</SUBJECT>
              <SECTNO>5.202</SECTNO>
              <SUBJECT>Exceptions.</SUBJECT>
              <SECTNO>5.203</SECTNO>
              <SUBJECT>Publicizing and response time.</SUBJECT>
              <SECTNO>5.204</SECTNO>
              <SUBJECT>Presolicitation notices.</SUBJECT>
              <SECTNO>5.205</SECTNO>
              <SUBJECT>Special situations.</SUBJECT>
              <SECTNO>5.206</SECTNO>
              <SUBJECT>Notice of subcontracting opportunities.</SUBJECT>
              <SECTNO>5.207</SECTNO>
              <SUBJECT>Preparation and transmittal of synopses.</SUBJECT>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart 5.3—Synopses of Contract Awards</HD>
              <SECTNO>5.301</SECTNO>
              <SUBJECT>General.</SUBJECT>
              <SECTNO>5.302</SECTNO>
              <SUBJECT>Preparation and transmittal of synopses of awards.</SUBJECT>
              <SECTNO>5.303</SECTNO>
              <SUBJECT>Announcement of contract awards.</SUBJECT>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart 5.4—Release of Information</HD>
              <SECTNO>5.401</SECTNO>
              <SUBJECT>General.</SUBJECT>
              <SECTNO>5.402</SECTNO>
              <SUBJECT>General public.</SUBJECT>
              <SECTNO>5.403</SECTNO>
              <SUBJECT>Requests from Members of Congress.</SUBJECT>
              <SECTNO>5.404</SECTNO>
              <SUBJECT>Release of long-range acquisition estimates.</SUBJECT>
              <SECTNO>5.404-1</SECTNO>
              <SUBJECT>Release procedures.</SUBJECT>
              <SECTNO>5.404-2</SECTNO>
              <SUBJECT>Announcements of long-range acquisition estimates.</SUBJECT>
              <SECTNO>5.405</SECTNO>
              <SUBJECT>Exchange of acquisition information.</SUBJECT>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart 5.5—Paid Advertisements</HD>
              <SECTNO>5.501</SECTNO>
              <SUBJECT>Definitions.</SUBJECT>
              <SECTNO>5.502</SECTNO>
              <SUBJECT>Authority.</SUBJECT>
              <SECTNO>5.503</SECTNO>
              <SUBJECT>Procedures.</SUBJECT>
              <SECTNO>5.504</SECTNO>
              <SUBJECT>Use of advertising agencies.</SUBJECT>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart 5.6—Publicizing Multi-Agency Use Contracts</HD>
              <SECTNO>5.601</SECTNO>
              <SUBJECT>Governmentwide database of contracts.</SUBJECT>
            </SUBPART>
          </CONTENTS>
          <AUTH>
            <HD SOURCE="HED">Authority:</HD>
            <P>40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 42 U.S.C. 2473(c).</P>
          </AUTH>
          <SOURCE>
            <HD SOURCE="HED">Source:</HD>
            <P>48 FR 42119, Sept. 19, 1983, unless otherwise noted.</P>
          </SOURCE>
          <SECTION>
            <SECTNO>5.000</SECTNO>
            <SUBJECT>Scope of part.</SUBJECT>
            <P>This part prescribes policies and procedures for publicizing contract opportunities and award information.</P>
          </SECTION>
          <SECTION>
            <SECTNO>5.001</SECTNO>
            <SUBJECT>Definition.</SUBJECT>
            <P>
              <E T="03">Contract action,</E> as used in this part, means an action resulting in a contract, as defined in subpart 2.1, including actions for additional supplies or services outside the existing contract scope, but not including actions that are within the scope and under the terms of the existing contract, such as contract modifications issued pursuant to the Changes clause, or funding and other administrative changes.</P>
            <CITA>[67 FR 13053, Mar. 20, 2002]</CITA>
          </SECTION>
          <SECTION>
            <SECTNO>5.002</SECTNO>
            <SUBJECT>Policy.</SUBJECT>
            <P>Contracting officers must publicize contract actions in order to—</P>
            <P>(a) Increase competition;</P>
            <P>(b) Broaden industry participation in meeting Government requirements; and</P>
            <P>(c) Assist small business concerns, veteran-owned small business concerns, service-disabled veteran-owned small business concerns, HUBZone small business concerns, small disadvantaged business concerns, and women-owned small business concerns in obtaining contracts and subcontracts.</P>
            <CITA>[50 FR 52429, Dec. 23, 1985, as amended at 60 FR 48259, Sept. 18, 1995; 65 FR 60544, Oct. 11, 2000]</CITA>
          </SECTION>
          <SECTION>
            <SECTNO>5.003</SECTNO>
            <SUBJECT>Governmentwide point of entry.</SUBJECT>
            <P>For any requirement in the FAR to publish a notice, the contracting officer must transmit the notices to the GPE.</P>
            <CITA>[68 FR 56678, Oct. 1, 2003]</CITA>
          </SECTION>
          <SUBPART>
            <HD SOURCE="HED">Subpart 5.1—Dissemination of Information</HD>
            <SECTION>
              <SECTNO>5.101</SECTNO>
              <SUBJECT>Methods of disseminating information.</SUBJECT>

              <P>(a) As required by the Small Business Act (15 U.S.C. 637(e)) and the Office of Federal Procurement Policy Act (41 U.S.C. 416), contracting officers must <PRTPAGE P="87"/>disseminate information on proposed contract actions as follows:</P>
              <P>(1) For proposed contract actions expected to exceed $25,000, by synopsizing in the GPE (see 5.201).</P>
              <P>(2) For proposed contract actions expected to exceed $10,000, but not expected to exceed $25,000, by displaying in a public place, or by any appropriate electronic means, an unclassified notice of the solicitation or a copy of the solicitation satisfying the requirements of 5.207(c). The notice must include a statement that all responsible sources may submit a response which, if timely received, must be considered by the agency. The information must be posted not later than the date the solicitation is issued, and must remain posted for at least 10 days or until after quotations have been opened, whichever is later.</P>
              <P>(i) If solicitations are posted instead of a notice, the contracting officer may employ various methods of satisfying the requirements of 5.207(c). For example, the contracting officer may meet the requirements of 5.207(c) by stamping the solicitation, by a cover sheet to the solicitation, or by placing a general statement in the display room.</P>
              <P>(ii) The contracting officer need not comply with the display requirements of this section when the exemptions at 5.202(a)(1), (a)(4) through (a)(9), or (a)(11) apply, when oral or Federal Acquisition Computer Network (FACNET) solicitations are used, or when providing access to a notice of proposed contract action and solicitation through the GPE and the notice permits the public to respond to the solicitation electronically.</P>
              <P>(iii) Contracting officers may use electronic posting of requirements in a place accessible by the general public at the Government installation to satisfy the public display requirement. Contracting offices using electronic systems for public posting that are not accessible outside the installation must periodically publicize the methods for accessing the information.</P>
              <P>(b) In addition, one or more of the following methods may be used:</P>
              <P>(1) Preparing periodic handouts listing proposed contracts, and displaying them as in 5.101(a)(2).</P>
              <P>(2) Assisting local trade associations in disseminating information to their members.</P>
              <P>(3) Making brief announcements of proposed contracts to newspapers, trade journals, magazines, or other mass communication media for publication without cost to the Government.</P>
              <P>(4) Placing paid advertisements in newspapers or other communications media, subject to the following limitations:</P>
              <P>(i) Contracting officers shall place paid advertisements of proposed contracts only when it is anticipated that effective competition cannot be obtained otherwise (see 5.205(d)).</P>
              <P>(ii) Contracting officers shall not place advertisements of proposed contracts in a newspaper published and printed in the District of Columbia unless the supplies or services will be furnished, or the labor performed, in the District of Columbia or adjoining counties in Maryland or Virginia (44 U.S.C. 3701).</P>
              <P>(iii) Advertisements published in newspapers must be under proper written authority in accordance with 44 U.S.C. 3702 (see 5.502(a)).</P>
              <CITA>[48 FR 42119, Sept. 19, 1983, as amended at 50 FR 1728, Jan. 11, 1985; 50 FR 52429, Dec. 23, 1985; 51 FR 27117, July 29, 1986; 52 FR 21885, June 9, 1987; 56 FR 41731, Aug. 22, 1991; 60 FR 34736, 34746, July 3, 1995; 61 FR 39191, July 26, 1996; 62 FR 12692, Mar. 17, 1997; 63 FR 58592, Oct. 30, 1998; 66 FR 27409, May 16, 2001; 68 FR 56678, Oct. 1, 2003]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>5.102</SECTNO>
              <SUBJECT>Availability of solicitations.</SUBJECT>

              <P>(a)(1) Except as provided in paragraph (a)(5) of this section, the contracting officer must make available through the GPE solicitations synopsized through the GPE, including specifications, technical data, and other pertinent information determined necessary by the contracting officer. Transmissions to the GPE must be in accordance with the interface description available via the Internet at <E T="03">http://www.fedbizopps.gov.</E>
              </P>

              <P>(2) The contracting officer is encouraged, when practicable and cost-effective, to make accessible through the GPE additional information related to a solicitation.<PRTPAGE P="88"/>
              </P>
              <P>(3) The contracting officer must ensure that solicitations transmitted to FACNET are forwarded to the GPE to satisfy the requirements of paragraph (a)(1) of this section.</P>
              <P>(4) When an agency determines that a solicitation contains information that requires additional controls to monitor access and distribution (e.g., technical data, specifications, maps, building designs, schedules, etc.), the information shall be made available through the Federal Technical Data Solution (FedTeDS) unless an exception in paragraph (a)(5) of this section applies. When FedTeDS is used, it shall be used in conjunction with the GPE to meet the synopsis and advertising requirements of this part.</P>
              <P>(5) The contracting officer need not make a solicitation available through the GPE, or make other information available through FedTeDS as required in paragraph (a)(4) of this section, when—</P>
              <P>(i) Disclosure would compromise the national security (e.g., would result in disclosure of classified information, or information subject to export controls) or create other security risks. The fact that access to classified matter may be necessary to submit a proposal or perform the contract does not, in itself, justify use of this exception;</P>
              <P>(ii) The nature of the file (e.g., size, format) does not make it cost-effective or practicable for contracting officers to provide access to the solicitation through the GPE;</P>
              <P>(iii) Agency procedures specify that the use of FedTeDS does not provide sufficient controls for the information to be made available and an alternative means of distributing the information is more appropriate; or</P>
              <P>(iv) The agency's senior procurement executive makes a written determination that access through the GPE is not in the Government's interest.</P>
              <P>(6) When an acquisition contains brand name specifications, the contracting officer shall include with the solicitation the justification or documentation required by 6.302-1(c), 13.106-1(b), or 13.501, redacted as necessary (see 6.305).</P>
              <P>(b) When the contracting officer does not make a solicitation available through the GPE pursuant to paragraph (a)(5) of this section, the contracting officer—</P>
              <P>(1) Should employ other electronic means (e.g., CD-ROM or electronic mail) whenever practicable and cost-effective. When solicitations are provided electronically on physical media (e.g., disks) or in paper form, the contracting officer must—</P>
              <P>(i) Maintain a reasonable number of copies of solicitations, including specifications and other pertinent information determined necessary by the contracting officer (upon request, potential sources not initially solicited should be mailed or provided copies of solicitations, if available);</P>
              <P>(ii) Provide copies on a “first-come-first-served” basis, for pickup at the contracting office, to publishers, trade associations, information services, and other members of the public having a legitimate interest (for construction, see 36.211); and</P>
              <P>(iii) Retain a copy of the solicitation and other documents for review by and duplication for those requesting copies after the initial number of copies is exhausted; and</P>
              <P>(2) May require payment of a fee, not exceeding the actual cost of duplication, for a copy of the solicitation document.</P>
              <P>(c) In addition to the methods of disseminating proposed contract information in 5.101(a) and (b), provide, upon request to small business concerns, as required by 15 U.S.C. 637(b)—</P>
              <P>(1) A copy of the solicitation and specifications. In the case of solicitations disseminated by electronic data interchange, solicitations may be furnished directly to the electronic address of the small business concern;</P>
              <P>(2) The name and telephone number of an employee of the contracting office who will answer questions on the solicitation; and</P>
              <P>(3) Adequate citations to each applicable major Federal law or agency rule with which small business concerns must comply in performing the contract.</P>

              <P>(d) When electronic commerce (see subpart 4.5) is used in the solicitation process, availability of the solicitation may be limited to the electronic medium.<PRTPAGE P="89"/>
              </P>
              <P>(e) Provide copies of a solicitation issued under other than full and open competition to firms requesting copies that were not initially solicited, but only after advising the requester of the determination to limit the solicitation to a specified firm or firms as authorized under part 6.</P>
              <P>(f) This section 5.102 applies to classified contracts to the extent consistent with agency security requirements (see 5.202(a)(1)).</P>
              <CITA>[66 FR 27409, May 16, 2001, as amended at 71 FR 20297, Apr. 19, 2006; 71 FR 57359, Sept. 28, 2006]</CITA>
            </SECTION>
          </SUBPART>
          <SUBPART>
            <HD SOURCE="HED">Subpart 5.2—Synopses of Proposed Contract Actions</HD>
            <SECTION>
              <SECTNO>5.201</SECTNO>
              <SUBJECT>General.</SUBJECT>
              <P>(a) As required by the Small Business Act (15 U.S.C. 637(e)) and the Office of Federal Procurement Policy Act (41 U.S.C. 416), agencies must make notices of proposed contract actions available as specified in paragraph (b) of this section.</P>
              <P>(b)(1) For acquisitions of supplies and services, other than those covered by the exceptions in 5.202 and the special situations in 5.205, the contracting officer must transmit a notice to the GPE, for each proposed—</P>
              <P>(i) Contract action meeting the threshold in 5.101(a)(1);</P>
              <P>(ii) Modification to an existing contract for additional supplies or services that meets the threshold in 5.101(a)(1); or</P>
              <P>(iii) Contract action in any amount when advantageous to the Government.</P>
              <P>(2) When transmitting notices to FACNET, contracting officers must ensure the notice is forwarded to the GPE.</P>
              <P>(c) The primary purposes of the notice are to improve small business access to acquisition information and enhance competition by identifying contracting and subcontracting opportunities.</P>
              <P>(d) The GPE may be accessed via the Internet at <E T="03">http://www.fedbizopps.gov.</E>
              </P>
              <CITA>[66 FR 27410, May 16, 2001, as amended at 68 FR 56678, Oct. 1, 2003]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>5.202</SECTNO>
              <SUBJECT>Exceptions.</SUBJECT>
              <P>The contracting officer need not submit the notice required by 5.201 when—</P>
              <P>(a) The contracting officer determines that—</P>
              <P>(1) The synopsis cannot be worded to preclude disclosure of an agency's needs and such disclosure would compromise the national security (e.g., would result in disclosure of classified information). The fact that a proposed solicitation or contract action contains classified information, or that access to classified matter may be necessary to submit a proposal or perform the contract does not, in itself, justify use of this exception to synopsis;</P>
              <P>(2) The proposed contract action is made under the conditions described in 6.302-2 (or, for purchases conducted using simplified acquisition procedures, if unusual and compelling urgency precludes competition to the maximum extent practicable) and the Government would be seriously injured if the agency complies with the time periods specified in 5.203;</P>
              <P>(3) The proposed contract action is one for which either the written direction of a foreign government reimbursing the agency for the cost of the acquisition of the supplies or services for such government, or the terms of an international agreement or treaty between the United States and a foreign government or international organizations, has the effect of requiring that the acquisition shall be from specified sources;</P>
              <P>(4) The proposed contract action is expressly authorized or required by a statute to be made through another Government agency, including acquisitions from the Small Business Administration (SBA) using the authority of section 8(a) of the Small Business Act (but see 5.205(f)), or from a specific source such as a workshop for the blind under the rules of the Committee for the Purchase from the Blind and Other Severely Handicapped;</P>
              <P>(5) The proposed contract action is for utility services other than telecommunications services and only one source is available;</P>
              <P>(6) The proposed contract action is an order placed under Subpart 16.5;</P>

              <P>(7) The proposed contract action results from acceptance of a proposal <PRTPAGE P="90"/>under the Small Business Innovation Development Act of 1982 (Pub. L. 97-219);</P>
              <P>(8) The proposed contract action results from the acceptance of an unsolicited research proposal that demonstrates a unique and innovative concept (see 2.101) and publication of any notice complying with 5.207 would improperly disclose the originality of thought or innovativeness of the proposed research, or would disclose proprietary information associated with the proposal. This exception does not apply if the proposed contract action results from an unsolicited research proposal and acceptance is based solely upon the unique capability of the source to perform the particular research services proposed (see 6.302-1(a)(2)(i);</P>
              <P>(9) The proposed contract action is made for perishable subsistence supplies, and advance notice is not appropriate or reasonable;</P>
              <P>(10) The proposed contract action is made under conditions described in 6.302-3, or 6.302-5 with regard to brand name commercial items for authorized resale, or 6.302-7, and advance notice is not appropriate or reasonable;</P>
              <P>(11) The proposed contract action is made under the terms of an existing contract that was previously synopsized in sufficient detail to comply with the requirements of 5.207 with respect to the current proposed contract action;</P>
              <P>(12) The proposed contract action is by a Defense agency and the proposed contract action will be made and performed outside the United States and its outlying areas, and only local sources will be solicited. This exception does not apply to proposed contract actions covered by the World Trade Organization Government Procurement Agreement or a Free Trade Agreement (see Subpart 25.4);</P>
              <P>(13) The proposed contract action—</P>
              <P>(i) Is for an amount not expected to exceed the simplified acquisition threshold;</P>
              <P>(ii) Will be made through a means that provides access to the notice of proposed contract action through the GPE; and</P>
              <P>(iii) Permits the public to respond to the solicitation electronically; or</P>
              <P>(14) The proposed contract action is made under conditions described in 6.302-3 with respect to the services of an expert to support the Federal Government in any current or anticipated litigation or dispute.</P>
              <P>(b) The head of the agency determines in writing after consultation with the Administrator for Federal Procurement Policy and the Administrator of the Small Business Administration, that advance notice is not appropriate or reasonable.</P>
              <CITA>[50 FR 1728, Jan. 11, 1985, as amended at 50 FR 52430, Dec. 23, 1985; 51 FR 27117, July 29, 1986; 53 FR 27463, July 20, 1988; 54 FR 46004, Oct. 31, 1989; 56 FR 15148, Apr. 15, 1991; 56 FR 41744, Aug. 22, 1991; 59 FR 545, Jan. 5, 1994; 60 FR 34746, July 3, 1995; 60 FR 42653, Aug. 16, 1995; 60 FR 49725, Sept. 26, 1995; 61 FR 39192, July 26, 1996; 63 FR 58592, 58593, Oct. 30, 1998; 66 FR 2127, Jan. 10, 2001; 66 FR 27410, May 16, 2001; 68 FR 28080, May 22, 2003; 69 FR 77872, Dec. 28, 2004]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>5.203</SECTNO>
              <SUBJECT>Publicizing and response time.</SUBJECT>
              <P>Whenever agencies are required to publicize notice of proposed contract actions under 5.201, they must proceed as follows:</P>

              <P>(a) An agency must transmit a notice of proposed contract action to the GPE (<E T="03">see</E> 5.201). All publicizing and response times are calculated based on the date of publication. The publication date is the date the notice appears on the GPE. The notice must be published at least 15 days before issuance of a solicitation except that, for acquisitions of commercial items, the contracting officer may—</P>
              <P>(1) Establish a shorter period for issuance of the solicitation; or</P>
              <P>(2) Use the combined synopsis and solicitation procedure (see 12.603).</P>

              <P>(b) The contracting officer must establish a solicitation response time that will afford potential offerors a reasonable opportunity to respond to each proposed contract action, (including actions via FACNET or for which the notice of proposed contract action and solicitation information is accessible through the GPE), in an amount estimated to be greater than $25,000, but not greater than the simplified acquisition threshold; or each contract action for the acquisition of commercial items in an amount estimated to <PRTPAGE P="91"/>be greater than $25,000. The contracting officer should consider the circumstances of the individual acquisition, such as the complexity, commerciality, availability, and urgency, when establishing the solicitation response time.</P>
              <P>(c) Except for the acquisition of commercial items (see 5.203(b)), agencies shall allow at least a 30-day response time for receipt of bids or proposals from the date of issuance of a solicitation, if the proposed contract action is expected to exceed the simplified acquisition threshold.</P>
              <P>(d) Agencies shall allow at least a 30 day response time from the date of publication of a proper notice of intent to contract for architect-engineer services or before issuance of an order under a basic ordering agreement or similar arrangement if the proposed contract action is expected to exceed the simplified acquisition threshold.</P>
              <P>(e) Agencies must allow at least a 45-day response time for receipt of bids or proposals from the date of publication of the notice required in 5.201 for proposed contract actions categorized as research and development if the proposed contract action is expected to exceed the simplified acquisition threshold.</P>
              <P>(f) Nothing in this subpart prohibits officers or employees of agencies from responding to requests for information.</P>
              <P>(g) Contracting officers may, unless they have evidence to the contrary, presume the notice was published one day after transmission to the GPE. This presumption does not negate the mandatory waiting or response times specified in paragraphs (a) through (d) of this section. Upon learning that a particular notice has not in fact been published within the presumed timeframes, contracting officers should consider whether the date for receipt of offers can be extended or whether circumstances have become sufficiently compelling to justify proceeding with the proposed contract action under the authority of 5.202(a)(2).</P>
              <P>(h) In addition to other requirements set forth in this section, for acquisitions covered by the World Trade Organization Government Procurement Agreement or a Free Trade Agreement (see subpart 25.4), the period of time between publication of the synopsis notice and receipt of offers must be no less than 40 days. However, if the acquisition falls within a general category identified in an annual forecast, the availability of which is published, the contracting officer may reduce this time period to as few as 10 days.</P>
              <CITA>[50 FR 52430, Dec. 23, 1985, as amended at 51 FR 31425, Sept. 3, 1986; 60 FR 34747, July 3, 1995; 60 FR 48236, Sept. 18, 1995; 61 FR 39192, July 26, 1996; 62 FR 263, Jan. 2, 1997; 62 FR 10710, Mar. 10, 1997; 63 FR 58592, 58593, Oct. 30, 1998; 66 FR 27410, May 16, 2001; 68 FR 56678, Oct. 1, 2003; 69 FR 1053, Jan. 7, 2004; 69 FR 77872, Dec. 28, 2004]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>5.204</SECTNO>
              <SUBJECT>Presolicitation notices.</SUBJECT>
              <P>Contracting officers must provide access to presolicitation notices through the GPE (see 15.201 and 36.213-2). The contracting officer must synopsize a proposed contract action before issuing any resulting solicitation (see 5.201 and 5.203).</P>
              <CITA>[66 FR 27411, May 16, 2001]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>5.205</SECTNO>
              <SUBJECT>Special situations.</SUBJECT>
              <P>(a) <E T="03">Research and development (R&amp;D) advance notices.</E> Contracting officers may transmit to the GPE advance notices of their interest in potential R&amp;D programs whenever market research does not produce a sufficient number of concerns to obtain adequate competition. Advance notices must not be used where security considerations prohibit such publication. Advance notices will enable potential sources to learn of R&amp;D programs and provide these sources with an opportunity to submit information which will permit evaluation of their capabilities. Contracting officers must consider potential sources which respond to advance notices for a subsequent solicitation. Advance notices must be entitled “Research and Development Sources Sought,” cite the appropriate Numbered Note, and include the name and telephone number of the contracting officer or other contracting activity official from whom technical details of the project can be obtained. This will enable sources to submit information for evaluation of their R&amp;D capabilities. Contracting officers must synopsize (see 5.201) all subsequent solicitations for R&amp;D contracts, including <PRTPAGE P="92"/>those resulting from a previously synopsized advance notice, unless one of the exceptions in 5.202 applies.</P>
              <P>(b) <E T="03">Federally Funded Research and Development Centers.</E> Before establishing a Federally Funded Research and Development Center (FFRDC) (see Part 35) or before changing its basic purpose and mission, the sponsor must transmit at least three notices over a 90-day period to the GPE and the <E T="04">Federal Register,</E> indicating the agency's intention to sponsor an FFRDC or change the basic purpose and mission of an FFRDC. The notice must indicate the scope and nature of the effort to be performed and request comments. Notice is not required where the action is required by law.</P>
              <P>(c) <E T="03">Special notices.</E> Contracting officers may transmit to the GPE special notices of procurement matters such as business fairs, long-range procurement estimates, prebid or preproposal conferences, meetings, and the availability of draft solicitations or draft specifications for review.</P>
              <P>(d) <E T="03">Architect-engineering services.</E> Contracting officers must publish notices of intent to contract for architect-engineering services as follows:</P>
              <P>(1) Except when exempted by 5.202, contracting officers must transmit to the GPE a synopsis of each proposed contract action for which the total fee (including phases and options) is expected to exceed $25,000.</P>
              <P>(2) When the total fee is expected to exceed $10,000 but not exceed $25,000, the contracting officer must comply with 5.101(a)(2). When the proposed contract action is not required to be synopsized under paragraph (d)(1) of this section, the contracting officer must display a notice of the solicitation or a copy of the solicitation in a public place at the contracting office. Other optional publicizing methods are authorized in accordance with 5.101(b).</P>
              <P>(e) <E T="03">Public-private competitions under OMB Circular A-76.</E> (1) The contracting officer shall make a formal public announcement for each streamlined or standard competition. The public announcement shall include, at a minimum, the agency, agency component, location, type of competition (streamlined or standard), activity being competed, incumbent service providers, number of Government personnel performing the activity, name of the Competitive Sourcing Official, name of the contracting officer, name of the Agency Tender Official, and projected end date of the competition.</P>
              <P>(2) The contracting officer shall announce the end of the streamlined or standard competition by making a formal public announcement of the performance decision. (See OMB Circular A-76.)</P>
              <P>(f) <E T="03">Section 8(a) competitive acquisition.</E> When a national buy requirement is being considered for competitive acquisition limited to eligible 8(a) concerns under subpart 19.8, the contracting officer must transmit a synopsis of the proposed contract action to the GPE. The synopsis may be transmitted to the GPE concurrent with submission of the agency offering (see 19.804-2) to the Small Business Administration (SBA). The synopsis should also include information—</P>
              <P>(1) Advising that the acquisition is being offered for competition limited to eligible 8(a) concerns;</P>
              <P>(2) Specifying the North American Industry Classification System (NAICS) code;</P>
              <P>(3) Advising that eligibility to participate may be restricted to firms in either the developmental stage or the developmental and transitional stages; and</P>
              <P>(4) Encouraging interested 8(a) firms to request a copy of the solicitation as expeditiously as possible since the solicitation will be issued without further notice upon SBA acceptance of the requirement for the section 8(a) program.</P>
              <CITA>[66 FR 27411, May 16, 2001, as amended at 68 FR 43856, July 24, 2003; 68 FR 56678, Oct. 1, 2003; 71 FR 20299, Apr. 19, 2006]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>5.206</SECTNO>
              <SUBJECT>Notices of subcontracting opportunities.</SUBJECT>

              <P>(a) The following entities may transmit a notice to the GPE to seek competition for subcontracts, to increase participation by qualified HUBZone small business, small, small disadvantaged, women-owned small business, veteran-owned small business and service-disabled veteran-owned small business concerns, and to meet established subcontracting plan goals:<PRTPAGE P="93"/>
              </P>
              <P>(1) A contractor awarded a contract exceeding $100,000 that is likely to result in the award of any subcontracts.</P>
              <P>(2) A subcontractor or supplier, at any tier, under a contract exceeding $100,000, that has a subcontracting opportunity exceeding $10,000.</P>
              <P>(b) The notices must describe—</P>
              <P>(1) The business opportunity;</P>
              <P>(2) Any prequalification requirements; and</P>
              <P>(3) Where to obtain technical data needed to respond to the requirement.</P>
              <CITA>[64 FR 72442, Dec. 27, 1999, as amended at 65 FR 46054, July 26, 2000; 66 FR 27412, May 16, 2001; 68 FR 56678, Oct. 1, 2003; 69 FR 25275, May 5, 2004]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>5.207</SECTNO>
              <SUBJECT>Preparation and transmittal of synopses.</SUBJECT>
              <P>(a) <E T="03">Content.</E> Each synopsis transmitted to the GPE must address the following data elements, as applicable:</P>
              <P>(1) Action Code.</P>
              <P>(2) Date.</P>
              <P>(3) Year.</P>
              <P>(4) Government Printing Office (GPO) Billing Account Code.</P>
              <P>(5) Contracting Office Zip Code.</P>
              <P>(6) Classification Code.</P>
              <P>(7) Contracting Office Address.</P>
              <P>(8) Subject.</P>
              <P>(9) Proposed Solicitation Number.</P>
              <P>(10) Opening and Closing Response Date.</P>
              <P>(11) Contact Point or Contracting Officer.</P>
              <P>(12) Contract Award and Solicitation Number.</P>
              <P>(13) Contract Award Dollar Amount.</P>
              <P>(14) Contract Line Item Number.</P>
              <P>(15) Contract Award Date.</P>
              <P>(16) Contractor.</P>
              <P>(17) Description.</P>
              <P>(18) Place of Contract Performance.</P>
              <P>(19) Set-aside Status.</P>
              <P>(b) <E T="03">Transmittal.</E> Transmissions to the GPE must be in accordance with the interface description available via the Internet at <E T="03">http://www.fedbizopps.gov.</E>
              </P>
              <P>(c) <E T="03">General format for “Description.”</E> Prepare a clear and concise description of the supplies or services that is not unnecessarily restrictive of competition and will allow a prospective offeror to make an informed business judgment as to whether a copy of the solicitation should be requested including the following, as appropriate:</P>
              <P>(1) National Stock Number (NSN) if assigned.</P>

              <P>(2) Specification and whether an offeror, its product, or service must meet a qualification requirement in order to be eligible for award, and identification of the office from which additional information about the qualification requirement may be obtained (<E T="03">see</E> subpart 9.2).</P>
              <P>(3) Manufacturer, including part number, drawing number, etc.</P>
              <P>(4) Size, dimensions, or other form, fit or functional description.</P>
              <P>(5) Predominant material of manufacture.</P>
              <P>(6) Quantity, including any options for additional quantities.</P>
              <P>(7) Unit of issue.</P>
              <P>(8) Destination information.</P>
              <P>(9) Delivery schedule.</P>
              <P>(10) Duration of the contract period.</P>
              <P>(11) For a proposed contract action in an amount estimated to be greater than $25,000 but not greater than the simplified acquisition threshold, enter—</P>
              <P>(i) A description of the procedures to be used in awarding the contract (e.g., request for oral or written quotation or solicitation); and</P>
              <P>(ii) The anticipated award date.</P>
              <P>(12) For Architect-Engineer projects and other projects for which the supply or service codes are insufficient, provide brief details with respect to: location, scope of services required, cost range and limitations, type of contract, estimated starting and completion dates, and any significant evaluation factors.</P>
              <P>(13) Numbered notes (<E T="03">see</E> paragraph (e) of this section), including instructions for set-asides for small businesses.</P>

              <P>(14) In the case of noncompetitive contract actions (including those that do not exceed the simplified acquisition threshold), identify the intended source (<E T="03">see</E> paragraph (e) of this section) and insert a statement of the reason justifying the lack of competition.</P>
              <P>(15) Insert a statement that all responsible sources may submit a bid, proposal, or quotation which shall be considered by the agency.</P>

              <P>(16) If solicitations synopsized through the GPE will not be made <PRTPAGE P="94"/>available through the GPE, provide information on how to obtain the solicitation.</P>
              <P>(17) If the solicitation will be made available to interested parties through electronic data interchange, provide any information necessary to obtain and respond to the solicitation electronically.</P>

              <P>(18) If the technical data required to respond to the solicitation will not be furnished as part of such solicitation, identify the source in the Government, such as FedTeDS (<E T="03">https://www.fedteds.gov</E>), from which the technical data may be obtained.</P>
              <P>(d) <E T="03">Set-asides.</E> When the proposed acquisition provides for a total or partial small business set-aside, HUBZone small business set-aside, or a service-disabled veteran-owned small business set-aside, the appropriate Numbered Note will be cited.</P>
              <P>(e) <E T="03">Numbered notes.</E> Numbered Notes are footnotes to be used by contracting officers to eliminate the unnecessary duplication of information that appears in various announcements. An explanation of the numbered notes appears at <E T="03">http://www.fedbizopps.gov.</E>
              </P>
              <P>(f) <E T="03">Codes to be used in Synopses to identify services or supplies.</E> Contracting officers must use one of the classification codes identified at <E T="03">http://www.fedbizopps.gov/</E> to identify services or supplies in synopses.</P>
              <P>(g) <E T="03">Cancellation of synopsis.</E> Contracting officers should not publish notices of solicitation cancellations (or indefinite suspensions) of proposed contract actions in the GPE. Cancellations of solicitations must be made in accordance with 14.209 and 14.404-1.</P>
              <CITA>[68 FR 56678, Oct. 1, 2003, as amended at 69 FR 25276, May 5, 2004; 71 FR 220, Jan. 3, 2006; 71 FR 20298, Apr. 19, 2006]</CITA>
            </SECTION>
          </SUBPART>
          <SUBPART>
            <HD SOURCE="HED">Subpart 5.3—Synopses of Contract Awards</HD>
            <SECTION>
              <SECTNO>5.301</SECTNO>
              <SUBJECT>General.</SUBJECT>
              <P>(a) Except for contract actions described in paragraph (b) of this section and as provided in 5.003, contracting officers must synopsize through the GPE awards exceeding $25,000 that are—</P>
              <P>(1) Covered by the World Trade Organization Government Procurement Agreement or a Free Trade Agreement (see Subpart 25.4); or</P>
              <P>(2) Likely to result in the award of any subcontracts. However, the dollar threshold is not a prohibition against publicizing an award of a smaller amount when publicizing would be advantageous to industry or to the Government.</P>
              <P>(b) A notice is not required under paragraph (a) of this section if—</P>
              <P>(1) The notice would disclose the executive agency's needs and the disclosure of such needs would compromise the national security;</P>
              <P>(2) The award results from acceptance of an unsolicited research proposal that demonstrates a unique and innovative research concept and publication of any notice would disclose the originality of thought or innovativeness of the proposed research or would disclose proprietary information associated with the proposal;</P>
              <P>(3) The award results from a proposal submitted under the Small Business Innovation Development Act of 1982 (Pub. L. 97-219);</P>
              <P>(4) The contract action is an order placed under Subpart 16.5;</P>
              <P>(5) The award is made for perishable subsistence supplies;</P>
              <P>(6) The award is for utility services, other than telecommunications services, and only one source is available;</P>
              <P>(7) The contract action—</P>
              <P>(i) Is for an amount not greater than the simplified acquisition threshold;</P>
              <P>(ii) Was made through a means where access to the notice of proposed contract action was provided through the GPE; and</P>
              <P>(iii) Permitted the public to respond to the solicitation electronically; or</P>
              <P>(8) The award is for the services of an expert to support the Federal Government in any current or anticipated litigation or dispute pursuant to the exception to full and open competition authorized at 6.302-3.</P>

              <P>(c) With respect to acquisitions covered by the World Trade Organization Government Procurement Agreement or a Free Trade Agreement, contracting officers must submit synopses <PRTPAGE P="95"/>in sufficient time to permit their publication in the GPE not later than 60 days after award.</P>
              <CITA>[52 FR 19802, May 27, 1987, as amended at 53 FR 27463, July 20, 1988; 60 FR 34747, July 3, 1995; 60 FR 42653, Aug. 16, 1995; 60 FR 49725, Sept. 26, 1995; 63 FR 58593, Oct. 30, 1998; 64 FR 72418, Dec. 27, 1999; 66 FR 27412, May 16, 2001; 68 FR 56679, Oct. 1, 2003; 69 FR 77872, Dec. 28, 2004]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>5.302</SECTNO>
              <SUBJECT>Preparation and transmittal of synopses of awards.</SUBJECT>
              <P>Contracting officers shall transmit synopses of contract awards in the same manner as prescribed in 5.207.</P>
              <CITA>[55 FR 52790, Dec. 21, 1990]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>5.303</SECTNO>
              <SUBJECT>Announcement of contract awards.</SUBJECT>
              <P>(a) <E T="03">Public announcement.</E> Contracting officers shall make information available on awards over $3.5 million (unless another dollar amount is specified in agency acquisition regulations) in sufficient time for the agency concerned to announce it by 5 p.m. Washington, DC, time on the day of award. Agencies shall not release information on awards before the public release time of 5 p.m. Washington, DC time. Contracts excluded from this reporting requirement include—</P>
              <P>(1) Those placed with the Small Business Administration under section 8(a) of the Small Business Act;</P>
              <P>(2) Those placed with foreign firms when the place of delivery or performance is outside the United States and its outlying areas; and</P>
              <P>(3) Those for which synopsis was exempted under 5.202(a)(1).</P>
              <P>(b) <E T="03">Local announcement.</E> Agencies may also release information on contract awards to the local press or other media. When local announcements are made for contract awards in excess of the simplified acquisition threshold, they shall include—</P>
              <P>(1) For awards after sealed bidding, a statement that the contract was awarded after competition by sealed bidding, the number of offers solicited and received, and the basis for selection (e.g., the lowest responsible bidder); or</P>
              <P>(2) For awards after negotiation, the information prescribed by 15.503(b), and after competitive negotiation (either price or design competition), a statement to this effect, and in general terms the basis for selection.</P>
              <CITA>[48 FR 42119, Sept. 19, 1983, as amended at 50 FR 1729, Jan. 11, 1985; 50 FR 52429, Dec. 23, 1985; 52 FR 30076, Aug. 12, 1987; 55 FR 3881, Feb. 5, 1990; 56 FR 67128, Dec. 27, 1991; 59 FR 67017, Dec. 28, 1994; 60 FR 34747, July 3, 1995; 60 FR 42653, Aug. 16, 1995; 61 FR 39190, July 26, 1996; 61 FR 69289, Dec. 31, 1996; 62 FR 51270, Sept. 30, 1997; 68 FR 28080, May 22, 2003; 71 FR 57365, Sept. 28, 2006]</CITA>
            </SECTION>
          </SUBPART>
          <SUBPART>
            <HD SOURCE="HED">Subpart 5.4—Release of Information</HD>
            <SECTION>
              <SECTNO>5.401</SECTNO>
              <SUBJECT>General.</SUBJECT>
              <P>(a) A high level of business security must be maintained in order to preserve the integrity of the acquisition process. When it is necessary to obtain information from potential contractors and others outside the Government for use in preparing Government estimates, contracting officers shall ensure that the information is not publicized or discussed with potential contractors.</P>
              <P>(b) Contracting officers may make available maximum information to the public, except information—</P>
              <P>(1) On plans that would provide undue or discriminatory advantage to private or personal interests;</P>
              <P>(2) Received in confidence from an offeror;</P>
              <P>(3) Otherwise requiring protection under Freedom of Information Act (see subpart 24.2) or Privacy Act (see subpart 24.1); or</P>
              <P>(4) Pertaining to internal agency communications (e.g., technical reviews, contracting authority or other reasons, or recommendations referring thereto).</P>
              <P>(c) This policy applies to all Government personnel who participate directly or indirectly in any stage of the acquisition cycle.</P>
            </SECTION>
            <SECTION>
              <SECTNO>5.402</SECTNO>
              <SUBJECT>General public.</SUBJECT>
              <P>Contracting officers shall process requests for specific information from the general public, including suppliers, in accordance with subpart 24.1 or 24.2, as appropriate.</P>
            </SECTION>
            <SECTION>
              <PRTPAGE P="96"/>
              <SECTNO>5.403</SECTNO>
              <SUBJECT>Requests from Members of Congress.</SUBJECT>
              <P>Contracting officers shall give Members of Congress, upon their request, detailed information regarding any particular contract. When responsiveness would result in disclosure of classified matter, business confidential information, or information prejudicial to competitive acquisition, the contracting officer shall refer the proposed reply, with full documentation, to the agency head and inform the legislative liaison office of the action.</P>
              <CITA>[48 FR 42119, Sept. 19, 1983, as amended at 50 FR 1729, Jan. 11, 1985; 50 FR 52429, Dec. 23, 1985; 68 FR 43856, July 24, 2003]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>5.404</SECTNO>
              <SUBJECT>Release of long-range acquisition estimates.</SUBJECT>
              <P>To assist industry planning and to locate additional sources of supply, it may be desirable to publicize estimates of unclassified long-range acquisition requirements. Estimates may be publicized as far in advance as possible.</P>
            </SECTION>
            <SECTION>
              <SECTNO>5.404-1</SECTNO>
              <SUBJECT>Release procedures.</SUBJECT>
              <P>(a) <E T="03">Application.</E> The agency head, or a designee, may release long-range acquisition estimates if the information will—</P>
              <P>(1) Assist industry in its planning and facilitate meeting the acquisition requirements;</P>
              <P>(2) Not encourage undesirable practices (e.g., attempts to corner the market or hoard industrial materials); and</P>
              <P>(3) Not indicate the existing or potential mobilization of the industry as a whole.</P>
              <P>(b) <E T="03">Conditions.</E> The agency head shall ensure that—</P>
              <P>(1) Classified information is released through existing security channels in accordance with agency security regulations;</P>
              <P>(2) The information is publicized as widely as practicable to all parties simultaneously by any of the means described in this part;</P>
              <P>(3) Each release states that (i) the estimate is based on the best information available, (ii) the information is subject to modification and is in no way binding on the Government, and (iii) more specific information relating to any individual item or class of items will not be furnished until the proposed action is synopsized through the GPE or the solicitation is issued;</P>
              <P>(4) Each release contains the name and address of the contracting officer that will process the acquisition;</P>
              <P>(5) Modifications to the original release are publicized as soon as possible, in the same manner as the original; and</P>
              <P>(6) Each release—</P>
              <P>(i) Is coordinated in advance with small business, public information, and public relations personnel, as appropriate;</P>
              <P>(ii) Contains, if applicable, a statement that small business set-asides may be involved, but that a determination can be made only when acquisition action is initiated; and</P>
              <P>(iii) Contains the name or description of the item, and the estimated quantity to be acquired by calendar quarter, fiscal year, or other period. It may also contain such additional information as the number of units last acquired, the unit price, and the name of the last supplier.</P>
              <CITA>[48 FR 42119, Sept. 19, 1983, as amended at 60 FR 48259, Sept. 18, 1995; 66 FR 27412, May 16, 2001]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>5.404-2</SECTNO>
              <SUBJECT>Announcements of long-range acquisition estimates.</SUBJECT>
              <P>Further publicizing, consistent with the needs of the individual case, may be accomplished by announcing through the GPE that long-range acquisition estimates have been published and are obtainable, upon request, from the contracting officer.</P>
              <CITA>[66 FR 27412, May 16, 2001]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>5.405</SECTNO>
              <SUBJECT>Exchange of acquisition information.</SUBJECT>

              <P>(a) When the same item or class of items is being acquired by more than one agency, or by more than one contracting activity within an agency, the exchange and coordination of pertinent information, particularly cost and pricing data, between these agencies or contracting activities is necessary to promote uniformity of treatment of major issues and the resolution of particularly difficult or controversial issues. The exchange and coordination of information is particularly beneficial during the period of acquisition <PRTPAGE P="97"/>planning, presolicitation, evaluation, and pre-award survey.</P>
              <P>(b) When substantial acquisitions of major items are involved or when the contracting activity deems it desirable, the contracting activity shall request appropriate information (on both the end item and on major subcontracted components) from other agencies or contracting activities responsible for acquiring similar items. Each agency or contracting activity receiving such a request shall furnish the information requested. The contracting officer, early in a negotiation of a contract, or in connection with the review of a subcontract, shall request the contractor to furnish information as to the contractor's or subcontractor's previous Government contracts and subcontracts for the same or similar end items and major subcontractor components.</P>
            </SECTION>
          </SUBPART>
          <SUBPART>
            <HD SOURCE="HED">Subpart 5.5—Paid Advertisements</HD>
            <SECTION>
              <SECTNO>5.501</SECTNO>
              <SUBJECT>Definitions.</SUBJECT>
              <P>As used in this subpart—</P>
              <P>
                <E T="03">Advertisement,</E> means any single message prepared for placement in communication media, regardless of the number of placements.</P>
              <P>
                <E T="03">Publication,</E> means (1) the placement of an advertisement in a newspaper, magazine, trade or professional journal, or any other printed medium, or (2) the broadcasting of an advertisement over radio or television.</P>
              <CITA>[48 FR 42119, Sept. 19, 1983, as amended at 66 FR 2127, Jan. 10, 2001]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>5.502</SECTNO>
              <SUBJECT>Authority.</SUBJECT>
              <P>(a) <E T="03">Newspapers.</E> Authority to approve the publication of paid advertisements in newspapers is vested in the head of each agency (44 U.S.C. 3702). This approval authority may be delegated (5 U.S.C. 302 (b)). Contracting officers shall obtain written authorization in accordance with agency procedures before advertising in newspapers.</P>
              <P>(b) <E T="03">Other media.</E> Unless the agency head determines otherwise, advance written authorization is not required to place advertisements in media other than newspapers.</P>
            </SECTION>
            <SECTION>
              <SECTNO>5.503</SECTNO>
              <SUBJECT>Procedures.</SUBJECT>
              <P>(a) <E T="03">General.</E> (1) Orders for paid advertisements may be placed directly with the media or through an advertising agency. Contracting officers shall give small, small disadvantaged, women-owned, veteran-owned, HUBZone, and service-disabled veteran-owned small business concerns maximum opportunity to participate in these acquisitions.</P>
              <P>(2) The contracting officer shall use the SF 1449 for paper solicitations. The SF 1449 shall be used to make awards or place orders unless the award/order is made by using electronic commerce or by using the Governmentwide commercial purchase card for micropurchases.</P>
              <P>(b) <E T="03">Rates.</E> Advertisements may be paid for at rates not over the commercial rates charged private individuals, with the usual discounts (44 U.S.C. 3703).</P>
              <P>(c) <E T="03">Proof of advertising.</E> Every invoice for advertising shall be accompanied by a copy of the advertisement or an affidavit of publication furnished by the publisher, radio or television station, or advertising agency concerned (44 U.S.C. 3703). Paying offices shall retain the proof of advertising until the Government Accountability Office settles the paying office's account.</P>
              <P>(d) <E T="03">Payment.</E> Upon receipt of an invoice supported by proof of advertising, the contracting officer shall attach a copy of the written authority (see 5.502(a)) and submit the invoice for payment under agency procedures.</P>
              <CITA>[48 FR 42119, Sept. 19, 1983, as amended at 54 FR 48982, Nov. 28, 1989; 60 FR 34747, July 3, 1995; 60 FR 48259, Sept. 18, 1995; 61 FR 39192, July 26, 1996; 63 FR 58593, Oct. 30, 1998; 70 FR 14954, Mar. 23, 2005; 71 FR 57380, Sept. 28, 2006]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>5.504</SECTNO>
              <SUBJECT>Use of advertising agencies.</SUBJECT>
              <P>(a) <E T="03">General.</E> Basic ordering agreements may be placed with advertising agencies for assistance in producing and placing advertisements when a significant number will be placed in several publications and in national media. Services of advertising agencies include, but are not limited to, counseling as to selection of the media for placement of the advertisement, contacting the media in the interest of the Government, placing orders, selecting <PRTPAGE P="98"/>and ordering typography, copywriting, and preparing rough layouts.</P>
              <P>(b) <E T="03">Use of commission-paying media.</E> The services of advertising agencies in placing advertising with media often can be obtained at no cost to the Government, over and above the space cost, as many media give advertising agencies a commission or discount on the space cost that is not given to the Government.</P>
              <P>(c) <E T="03">Use of noncommission-paying media.</E> Some media do not grant advertising agencies a commission or discount, meaning the Government can obtain the same rate as the advertising agency. If the advertising agency agrees to place advertisements in noncommission-paying media as a no-cost service, the basic ordering agreement shall so provide. If the advertising agency will not agree to place advertisements at no cost, the agreement shall (1) provide that the Government may place orders directly with the media, or (2) specify an amount that the Government will pay if the agency places the orders.</P>
              <P>(d) <E T="03">Art work, supplies, and incidentals.</E> The basic ordering agreement also may provide for the furnishing by the advertising agency of art work, supplies, and incidentals, including brochures and pamphlets, but not their printing. <E T="03">Incidentals</E> may include telephone calls, telegrams, and postage incurred by the advertising agency on behalf of the Government.</P>
            </SECTION>
          </SUBPART>
          <SUBPART>
            <HD SOURCE="HED">Subpart 5.6—Publicizing Multi-Agency Use Contracts</HD>
            <SOURCE>
              <HD SOURCE="HED">Source:</HD>
              <P>68 FR 43862, July 24, 2003, unless otherwise noted.</P>
            </SOURCE>
            <SECTION>
              <SECTNO>5.601</SECTNO>
              <SUBJECT>Governmentwide database of contracts.</SUBJECT>

              <P>(a) A Governmentwide database of contracts and other procurement instruments intended for use by multiple agencies is available via the Internet at <E T="03">http://www.contractdirectory.gov.</E> This searchable database is a tool that may be used to identify existing contracts and other procurement instruments that may be used to fulfill Government needs.</P>
              <P>(b) The contracting activity shall—</P>
              <P>(1) Enter the information specified at <E T="03">http://www.contractdirectory.gov,</E> in accordance with the instructions on that Web site, within ten days of award of a Governmentwide acquisition contract (GWAC), multi-agency contract, Federal Supply Schedule contract, or any other procurement instrument intended for use by multiple agencies, including blanket purchase agreements (BPAs) under Federal Supply Schedule contracts.</P>
              <P>(2) Enter the information specified at <E T="03">http://www.contractdirectory.gov</E> in accordance with the instructions on that Web site by October 31, 2003, for all contracts and other procurement instruments intended for use by multiple agencies that were awarded before July 24, 2003.</P>
            </SECTION>
          </SUBPART>
        </PART>
        <PART>
          <EAR>Pt. 6</EAR>
          <HD SOURCE="HED">PART 6—COMPETITION REQUIREMENTS</HD>
          <CONTENTS>
            <SECHD>Sec.</SECHD>
            <SECTNO>6.000</SECTNO>
            <SUBJECT>Scope of part.</SUBJECT>
            <SECTNO>6.001</SECTNO>
            <SUBJECT>Applicability.</SUBJECT>
            <SECTNO>6.002</SECTNO>
            <SUBJECT>Limitations.</SUBJECT>
            <SECTNO>6.003</SECTNO>
            <SUBJECT>[Reserved]</SUBJECT>
            <SUBPART>
              <HD SOURCE="HED">Subpart 6.1—Full and Open Competition</HD>
              <SECTNO>6.100</SECTNO>
              <SUBJECT>Scope of subpart.</SUBJECT>
              <SECTNO>6.101</SECTNO>
              <SUBJECT>Policy.</SUBJECT>
              <SECTNO>6.102</SECTNO>
              <SUBJECT>Use of competitive procedures.</SUBJECT>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart 6.2—Full and Open Competition After Exclusion of Sources</HD>
              <SECTNO>6.200</SECTNO>
              <SUBJECT>Scope of subpart.</SUBJECT>
              <SECTNO>6.201</SECTNO>
              <SUBJECT>Policy.</SUBJECT>
              <SECTNO>6.202</SECTNO>
              <SUBJECT>Establishing or maintaining alternative sources.</SUBJECT>
              <SECTNO>6.203</SECTNO>
              <SUBJECT>Set-asides for small business concerns.</SUBJECT>
              <SECTNO>6.204</SECTNO>
              <SUBJECT>Section 8(a) competition.</SUBJECT>
              <SECTNO>6.205</SECTNO>
              <SUBJECT>Set-asides for HUBZone small business concerns.</SUBJECT>
              <SECTNO>6.206</SECTNO>
              <SUBJECT>Set-asides for service-disabled veteran-owned small business concerns.</SUBJECT>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart 6.3—Other Than Full and Open Competition</HD>
              <SECTNO>6.300</SECTNO>
              <SUBJECT>Scope of subpart.</SUBJECT>
              <SECTNO>6.301</SECTNO>
              <SUBJECT>Policy.</SUBJECT>
              <SECTNO>6.302</SECTNO>
              <SUBJECT>Circumstances permitting other than full and open competition.</SUBJECT>
              <SECTNO>6.302-1</SECTNO>
              <SUBJECT>Only one responsible source and no other supplies or services will satisfy agency requirements.</SUBJECT>
              <SECTNO>6.302-2</SECTNO>
              <SUBJECT>Unusual and compelling urgency.</SUBJECT>
              <SECTNO>6.302-3</SECTNO>
              <SUBJECT>Industrial mobilization; engineering, developmental, or research capability; or expert services.</SUBJECT>
              <SECTNO>6.302-4</SECTNO>
              <SUBJECT>International agreement.</SUBJECT>
              <SECTNO>6.302-5</SECTNO>
              <SUBJECT>Authorized or required by statute.<PRTPAGE P="99"/>
              </SUBJECT>
              <SECTNO>6.302-6</SECTNO>
              <SUBJECT>National security.</SUBJECT>
              <SECTNO>6.302-7</SECTNO>
              <SUBJECT>Public interest.</SUBJECT>
              <SECTNO>6.303</SECTNO>
              <SUBJECT>Justifications.</SUBJECT>
              <SECTNO>6.303-1</SECTNO>
              <SUBJECT>Requirements.</SUBJECT>
              <SECTNO>6.303-2</SECTNO>
              <SUBJECT>Content.</SUBJECT>
              <SECTNO>6.304</SECTNO>
              <SUBJECT>Approval of the justification.</SUBJECT>
              <SECTNO>6.305</SECTNO>
              <SUBJECT>Availability of the justification.</SUBJECT>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart 6.4—Sealed Bidding and Competitive Proposals</HD>
              <SECTNO>6.401</SECTNO>
              <SUBJECT>Sealed bidding and competitive proposals.</SUBJECT>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart 6.5—Competition Advocates</HD>
              <SECTNO>6.501</SECTNO>
              <SUBJECT>Requirement.</SUBJECT>
              <SECTNO>6.502</SECTNO>
              <SUBJECT>Duties and responsibilities.</SUBJECT>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart 6.6—Stafford Act Preference for Local Area Contractor</HD>
              <SECTNO>6.601</SECTNO>
              <SUBJECT>Scope of subpart.</SUBJECT>
              <SECTNO>6.602</SECTNO>
              <SUBJECT>Set-asides for local firms during a major disaster or emergency.</SUBJECT>
              <SECTNO>6.603</SECTNO>
              <SUBJECT>Use of procedures other than set-aside.</SUBJECT>
            </SUBPART>
          </CONTENTS>
          <AUTH>
            <HD SOURCE="HED">Authority:</HD>
            <P>40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 42 U.S.C. 2473(c).</P>
          </AUTH>
          <SOURCE>
            <HD SOURCE="HED">Source:</HD>
            <P>50 FR 1729, Jan. 11, 1985; 50 FR 52429, Dec. 23, 1985, unless otherwise noted.</P>
          </SOURCE>
          <SECTION>
            <SECTNO>6.000</SECTNO>
            <SUBJECT>Scope of part.</SUBJECT>

            <P>This part prescribes policies and procedures to promote full and open competition in the acquisition process and to provide for full and open competition, full and open competition after exclusion of sources, other than full and open competition, and competition advocates. This part does not deal with the results of competition (<E T="03">e.g.,</E> adequate price competition), that are addressed in other parts (<E T="03">e.g.,</E> part 15).</P>
            <CITA>[66 FR 2127, Jan. 10, 2001]</CITA>
          </SECTION>
          <SECTION>
            <SECTNO>6.001</SECTNO>
            <SUBJECT>Applicability.</SUBJECT>
            <P>This part applies to all acquisitions except—</P>
            <P>(a) Contracts awarded using the simplified acquisition procedures of part 13 (but see 13.501 for requirements pertaining to sole source acquisition of commercial items under subpart 13.5).</P>
            <P>(b) Contracts awarded using contracting procedures (other than those addressed in this part) that are expressly authorized by statute;</P>
            <P>(c) Contract modifications, that are within the scope of the contract, including the exercise of priced options that were evaluated as part of the original competition (see 17.207(f));</P>
            <P>(d) Orders placed under requirements contracts or definite-quantity contracts;</P>
            <P>(e) Orders placed under indefinite-quantity contracts that were entered into pursuant to this part when—</P>
            <P>(1) The contract was awarded under subpart 6.1 or 6.2 and all responsible sources were realistically permitted to compete for the requirements contained in the order; or</P>
            <P>(2) The contract was awarded under subpart 6.3 and the required justification and approval adequately covers the requirements contained in the order; or</P>
            <P>(f) Orders placed against task order and delivery order contracts entered into pursuant to subpart 16.5.</P>
            <CITA>[50 FR 52431, Dec. 23, 1985, as amended at 55 FR 52790, Dec. 21, 1990; 60 FR 34747, July 3, 1995; 60 FR 49725, Sept. 26, 1995; 62 FR 263, Jan. 2, 1997; 62 FR 64917, Dec. 9, 1997]</CITA>
          </SECTION>
          <SECTION>
            <SECTNO>6.002</SECTNO>
            <SUBJECT>Limitations.</SUBJECT>
            <P>No agency shall contract for supplies or services from another agency for the purpose of avoiding the requirements of this part.</P>
          </SECTION>
          <SECTION>
            <SECTNO>6.003</SECTNO>
            <RESERVED>[Reserved]</RESERVED>
          </SECTION>
          <SUBPART>
            <HD SOURCE="HED">Subpart 6.1—Full and Open Competition</HD>
            <SECTION>
              <SECTNO>6.100</SECTNO>
              <SUBJECT>Scope of subpart.</SUBJECT>
              <P>This subpart prescribes the policy and procedures that are to be used to promote and provide for full and open competition.</P>
            </SECTION>
            <SECTION>
              <SECTNO>6.101</SECTNO>
              <SUBJECT>Policy.</SUBJECT>
              <P>(a) 10 U.S.C. 2304 and 41 U.S.C. 253 require, with certain limited exceptions (see subparts 6.2 and 6.3), that contracting officers shall promote and provide for full and open competition in soliciting offers and awarding Government contracts.</P>

              <P>(b) Contracting officers shall provide for full and open competition through use of the competitive procedure(s) contained in this subpart that are best suited to the circumstances of the contract action and consistent with the <PRTPAGE P="100"/>need to fulfill the Government's requirements efficiently (10 U.S.C. 2304 and 41 U.S.C. 253).</P>
              <CITA>[50 FR 1729, Jan. 11, 1985, and 50 FR 52429, Dec. 23, 1985, as amended at 62 FR 51230, Sept. 30, 1997]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>6.102</SECTNO>
              <SUBJECT>Use of competitive procedures.</SUBJECT>
              <P>The competitive procedures available for use in fulfilling the requirement for full and open competition are as follows:</P>
              <P>(a) <E T="03">Sealed bids.</E> (See 6.401(a).)</P>
              <P>(b) <E T="03">Competitive proposals.</E> (See 6.401(b).) If sealed bids are not appropriated under (a) above, contracting officers shall request competitive proposals or use the other competitive procedures under (c) or (d) below.</P>
              <P>(c) <E T="03">Combination of competitive procedures.</E> If sealed bids are not appropriate, contracting officers may use any combination of competitive procedures (e.g., two-step sealed bidding).</P>
              <P>(d) <E T="03">Other competitive procedures.</E> (1) Selection of sources for architect-engineer contracts in accordance with the provisions of 40 U.S.C. 1102 <E T="03">et seq.</E> is a competitive procedure (see subpart 36.6 for procedures).</P>
              <P>(2) Competitive selection of basic and applied research and that part of development not related to the development of a specific system or hardware procurement is a competitive procedure if award results from—</P>
              <P>(i) A broad agency announcement that is general in nature identifying areas of research interest, including criteria for selecting proposals, and soliciting the participation of all offerors capable of satisfying the Government's needs; and</P>
              <P>(ii) A peer of scientific review.</P>
              <P>(3) Use of multiple award schedules issued under the procedures established by the Administrator of General Services consistent with the requirement of 41 U.S.C. 259(b)(3)(A) for the multiple award schedule program of the General Services Administration is a competitive procedure.</P>
              <CITA>[50 FR 1729, Jan. 11, 1985; 50 FR 52429, Dec. 23, 1985, as amended at 53 FR 27463, July 20, 1988; 59 FR 53716, Oct. 25, 1994; 70 FR 57454, Sept. 30, 2005]</CITA>
            </SECTION>
          </SUBPART>
          <SUBPART>
            <HD SOURCE="HED">Subpart 6.2—Full and Open Competition After Exclusion of Sources</HD>
            <SECTION>
              <SECTNO>6.200</SECTNO>
              <SUBJECT>Scope of subpart.</SUBJECT>
              <P>This subpart prescribes policies and procedures for providing for full and open competition after excluding one or more sources.</P>
            </SECTION>
            <SECTION>
              <SECTNO>6.201</SECTNO>
              <SUBJECT>Policy.</SUBJECT>
              <P>Acquisitions made under this subpart require use of the competitive procedures prescribed in 6.102.</P>
              <CITA>[64 FR 51831, Sept. 24, 1999]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>6.202</SECTNO>
              <SUBJECT>Establishing or maintaining alternative sources.</SUBJECT>
              <P>(a) Agencies may exclude a particular source from a contract action in order to establish or maintain an alternative source or sources for the supplies or services being acquired if the agency head determines that to do so would—</P>
              <P>(1) Increase or maintain competition and likely result in reduced overall costs for the acquisition, or for any anticipated acquisition;</P>
              <P>(2) Be in the interest of national defense in having a facility (or a producer, manufacturer, or other supplier) available for furnishing the supplies or services in case of a national emergency or industrial mobilization;</P>
              <P>(3) Be in the interest of national defense in establishing or maintaining an essential engineering, research, or development capability to be provided by an educational or other nonprofit institution or a federally funded research and development center;</P>
              <P>(4) Ensure the continuous availability of a reliable source of supplies or services;</P>
              <P>(5) Satisfy projected needs based on a history of high demand; or</P>
              <P>(6) Satisfy a critical need for medical, safety, or emergency supplies.</P>
              <P>(b)(1) Every proposed contract action under the authority of paragraph (a) above shall be supported by a determination and findings (D&amp;F) (see subpart 1.7) signed by the head of the agency or designee. This D&amp;F shall not be made on a class basis.</P>

              <P>(2) Technical and requirements personnel are responsible for providing all <PRTPAGE P="101"/>necessary data to support their recommendation to exclude a particular source.</P>
              <P>(3) When the authority in (a)(1) above is cited, the findings shall include a description of the estimated reduction in overall costs and how the estimate was derived.</P>
              <CITA>[50 FR 1729, Jan. 11, 1985, as amended at 60 FR 42653, Aug. 16, 1995]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>6.203</SECTNO>
              <SUBJECT>Set-asides for small business concerns.</SUBJECT>
              <P>(a) To fulfill the statutory requirements relating to small business concerns, contracting officers may set aside solicitations to allow only such business concerns to compete. This includes contract actions conducted under the Small Business Innovation Research Program established under Pub. L. 97-219.</P>
              <P>(b) No separate justification or determination and findings is required under this part to set aside a contract action for small business concerns.</P>
              <P>(c) Subpart 19.5 prescribes policies and procedures that shall be followed with respect to set-asides.</P>
              <CITA>[60 FR 48259, Sept. 18, 1995]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>6.204</SECTNO>
              <SUBJECT>Section 8(a) competition.</SUBJECT>
              <P>(a) To fulfill statutory requirements relating to section 8(a) of the Small Business Act, as amended by Pub. L. 100-656, contracting officers may limit competition to eligible 8(a) contractors (see subpart 19.8).</P>
              <P>(b) No separate justification or determination and findings is required under this part to limit competition to eligible 8(a) contractors.</P>
              <CITA>[54 FR 46005, Oct. 31, 1989]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>6.205</SECTNO>
              <SUBJECT>Set-asides for HUBZone small business concerns.</SUBJECT>
              <P>(a) To fulfill the statutory requirements relating to the HUBZone Act of 1997 (15 U.S.C. 631 note), contracting officers in participating agencies (see 19.1302) may set aside solicitations to allow only qualified HUBZone small business concerns to compete (see 19.1305).</P>
              <P>(b) No separate justification or determination and findings is required under this part to set aside a contract action for qualified HUBZone small business concerns.</P>
              <CITA>[63 FR 70267, Dec. 18, 1998]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>6.206</SECTNO>
              <SUBJECT>Set-asides for service-disabled veteran-owned small business concerns.</SUBJECT>

              <P>(a) To fulfill the statutory requirements relating to the Veterans Benefits Act of 2003 (15 U.S.C. 657f), contracting officers may set-aside solicitations to allow only service-disabled veteran-owned small business concerns to compete (<E T="03">see</E> 19.1405).</P>
              <P>(b) No separate justification or determination and findings are required under this part to set aside a contract action for service-disabled veteran-owned small business concerns.</P>
              <CITA>[69 FR 25276, May 5, 2004]</CITA>
            </SECTION>
          </SUBPART>
          <SUBPART>
            <HD SOURCE="HED">Subpart 6.3—Other Than Full and Open Competition</HD>
            <SECTION>
              <SECTNO>6.300</SECTNO>
              <SUBJECT>Scope of subpart.</SUBJECT>
              <P>This subpart prescribes policies and procedures, and identifies the statutory authorities, for contracting without providing for full and open competition.</P>
            </SECTION>
            <SECTION>
              <SECTNO>6.301</SECTNO>
              <SUBJECT>Policy.</SUBJECT>
              <P>(a) 41 U.S.C. 253(c) and 10 U.S.C. 2304(c) each authorize, under certain conditions, contracting without providing for full and open competition. The Department of Defense, Coast Guard, and National Aeronautics and Space Administration are subject to 10 U.S.C. 2304(c). Other executive agencies are subject to 41 U.S.C. 253(c). Contracting without providing for full and open competition or full and open competition after exclusion of sources is a violation of statute, unless permitted by one of the exceptions in 6.302.</P>
              <P>(b) Each contract awarded without providing for full and open competition shall contain a reference to the specific authority under which it was so awarded. Contracting officers shall use the U.S. Code citation applicable to their agency. (See 6.302.)</P>

              <P>(c) Contracting without providing for full and open competition shall not be justified on the basis of (1) a lack of advance planning by the requiring activity or (2) concerns related to the <PRTPAGE P="102"/>amount of funds available (e.g., funds will expire) to the agency or activity for the acquisition of supplies or services.</P>
              <P>(d) When not providing for full and open competition, the contracting officer shall solicit offers from as many potential sources as is practicable under the circumstances.</P>
              <P>(e) For contracts under this subpart, the contracting officer shall use the contracting procedures prescribed in 6.102 (a) or (b), if appropriate, or any other procedures authorized by this regulation.</P>
            </SECTION>
            <SECTION>
              <SECTNO>6.302</SECTNO>
              <SUBJECT>Circumstances permitting other than full and open competition.</SUBJECT>
              <P>The following statutory authorities (including applications and limitations) permit contracting without providing for full and open competition. Requirements for justifications to support the use of these authorities are in 6.303.</P>
              <CITA>[50 FR 52431, Dec. 23, 1985]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>6.302-1</SECTNO>
              <SUBJECT>Only one responsible source and no other supplies or services will satisfy agency requirements.</SUBJECT>
              <P>(a) <E T="03">Authority.</E> (1) Citations: 10 U.S.C. 2304(c)(1) or 41 U.S.C. 253(c)(1).</P>
              <P>(2) When the supplies or services required by the agency are available from only one responsible source, or, for DoD, NASA, and the Coast Guard, from only one or a limited number of responsible sources, and no other type of supplies or services will satisfy agency requirements, full and open competition need not be provided for.</P>
              <P>(i) Supplies or services may be considered to be available from only one source if the source has submitted an unsolicited research proposal that:</P>
              <P>(A) Demonstrates a unique and innovative concept (see definition at 2.101), or, demonstrates a unique capability of the source to provide the particular research services proposed;</P>
              <P>(B) Offers a concept or services not otherwise available to the Government; and</P>
              <P>(C) Does not resemble the substance of a pending competitive acquisition. (See 10 U.S.C. 2304(d)(1)(A) and 41 U.S.C. 253(d)(1)(A).)</P>
              <P>(ii) Supplies may be deemed to be available only from the original source in the case of a follow-on contract for the continued development or production of a major system or highly specialized equipment, including major components thereof, when it is likely that award to any other source would result in (A) substantial duplication of cost to the Government that is not expected to be recovered through competition, or (B) unacceptable delays in fulfilling the agency's requirements. (See 10 U.S.C. 2304(d)(1)(B) or 41 U.S.C. 253(d)(1)(B).)</P>
              <P>(iii) For DoD, NASA, and the Coast Guard, services may be deemed to be available only from the original source in the case of follow-on contracts for the continued provision of highly specialized services when it is likely that award to any other source would result in (A) substantial duplication of cost to the Government that is not expected to be recovered through competition, or (B) unacceptable delays in fulfilling the agency's requirements. (See 10 U.S.C. 2304(d)(1)(B)).</P>
              <P>(b) <E T="03">Application.</E> This authority shall be used, if appropriate, in preference to the authority in 6.302-7; it shall not be used when any of the other circumstances is applicable. Use of this authority may be appropriate in situations such as the following (these examples are not intended to be all-inclusive and do not consitute authority in and of themselves):</P>
              <P>(1) When there is a reasonable basis to conclude that the agency's minimum needs can only be satisfied by (i) unique supplies or services available from only one source or only one supplier with unique capabilities; or, (ii) for DoD, NASA, and the Coast Guard, unique supplies or services available from only one or a limited number of sources or from only one or a limited number of suppliers with unique capabilities.</P>

              <P>(2) The existence of limited rights in data, patent rights, copyrights, or secret processes; the control of basic raw material; or similar circumstances, make the supplies and services available from only one source (however, the mere existence of such rights or circumstances does not in and of itself justify the use of these authorities) (see part 27).<PRTPAGE P="103"/>
              </P>
              <P>(3) When acquiring utility services (see 41.101), circumstances may dictate that only one supplier can furnish the service (see 41.202); or when the contemplated contract is for construction of a part of a utility system and the utility company itself is the only source available to work on the system.</P>
              <P>(4) When the agency head has determined in accordance with the agency's standardization program that only specified makes and models of technical equipment and parts will satisfy the agency's needs for additional units or replacement items, and only one source is available.</P>
              <P>(c) <E T="03">Application for brand name descriptions.</E> An acquisition that uses a brand name description or other purchase description to specify a particular brand name, product, or feature of a product, peculiar to one manufacturer does not provide for full and open competition regardless of the number of sources solicited. It shall be justified and approved in accordance with FAR 6.303 and 6.304. The justification should indicate that the use of such descriptions in the acquisition is essential to the Government's requirements, thereby precluding consideration of a product manufactured by another company. See 5.102(a)(6) for the requirement to post the brand name justification. (Brand-name or equal descriptions, and other purchase descriptions that permit prospective contractors to offer products other than those specifically referenced by brand name, provide for full and open competition and do not require justifications and approvals to support their use.)</P>
              <P>(d) <E T="03">Limitations.</E> (1) Contracts awarded using this authority shall be supported by the written justifications and approvals described in 6.303 and 6.304.</P>
              <P>(2) For contracts awarded using this authority, the notices required by 5.201 shall have been published and any bids and proposals must have been considered. (See 15.402(g).)</P>
              <CITA>[50 FR 52431, Dec. 23, 1985, as amended at 52 FR 21886, June 9, 1987; 53 FR 27463, July 20, 1988; 56 FR 29127, June 25, 1991; 59 FR 67018, Dec. 28, 1994; 66 FR 2128, Jan. 10, 2001; 71 FR 57359, Sept. 28, 2006]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>6.302-2</SECTNO>
              <SUBJECT>Unusual and compelling urgency.</SUBJECT>
              <P>(a) <E T="03">Authority.</E> (1) Citations: 10 U.S.C. 2304(c)(2) or 41 U.S.C. 253(c)(2).</P>
              <P>(2) When the agency's need for the supplies or services is of such an unusual and compelling urgency that the Government would be seriously injured unless the agency is permitted to limit the number of sources from which it solicits bids or proposals, full and open competition need not be provided for.</P>
              <P>(b) <E T="03">Application.</E> This authority applies in those situations where (1) an unusual and compelling urgency precludes full and open competition, and (2) delay in award of a contract would result in serious injury, financial or other, to the Government.</P>
              <P>(c) <E T="03">Limitations.</E> (1) Contracts awarded using this authority shall be supported by the written justifications and approvals described in 6.303 and 6.304. These justifications may be made and approved after contract award when preparation and approval prior to award would unreasonably delay the acquisition.</P>
              <P>(2) This statutory authority requires that agencies shall request offers from as many potential sources as is practicable under the circumstances.</P>
              <CITA>[50 FR 52431, Dec. 23, 1985]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>6.302-3</SECTNO>
              <SUBJECT>Industrial mobilization; engineering, developmental, or research capability; or expert services.</SUBJECT>
              <P>(a) <E T="03">Authority.</E> (1) Citations: 10 U.S.C. 2304(c)(3) or 41 U.S.C. 253(c)(3).</P>
              <P>(2) Full and open competition need not to be provided for when it is necessary to award the contract to a particular source or sources in order—</P>
              <P>(i) To maintain a facility, producer, manufacturer, or other supplier available for furnishing supplies or services in case of a national emergency or to achieve industrial mobilization,</P>
              <P>(ii) To establish or maintain an essential engineering, research, or development capability to be provided by an educational or other nonprofit institution or a federally funded research and development center, or</P>

              <P>(iii) To acquire the services of an expert or neutral person for any current or anticipated litigation or dispute.<PRTPAGE P="104"/>
              </P>
              <P>(b) <E T="03">Application.</E> (1) Use of the authority in paragraph (a)(2)(i) above may be appropriate when it is necessary to—</P>
              <P>(i) Keep vital facilities or suppliers in business or make them available in the event of a national emergency;</P>
              <P>(ii) Train a selected supplier in the furnishing of critical supplies or services, prevent the loss of a supplier's ability and employees' skills, or maintain active engineering, research, or development work;</P>
              <P>(iii) Maintain properly balanced sources of supply for meeting the requirements of acquisition programs in the interest of industrial mobilization (when the quantity required is substantially larger than the quantity that must be awarded in order to meet the objectives of this authority, that portion not required to meet such objectives will be acquired by providing for full and open competition as appropriate under this part);</P>
              <P>(iv) Limit competition for current acquisition of selected supplies or services approved for production planning under the Department of Defense Industrial Preparedness Program to planned producers with whom industrial preparedness agreements for those items exist, or limit award to offerors who agree to enter into industrial preparedness agreements;</P>
              <P>(v) Create or maintain the required domestic capability for production of critical supplies by limiting competition to items manufactured in—</P>
              <P>(A) The United States or its outlying areas; or</P>
              <P>(B) The United States, its outlying areas, or Canada.</P>
              <P>(vi) Continue in production, contractors that are manufacturing critical items, where there would otherwise be a break in production; or</P>
              <P>(vii) Divide current production requirements among two or more contractors to provide for an adequate industrial mobilization base.</P>
              <P>(2) Use of the authority in paragraph (a)(2)(ii) above may be appropriate when it is necessary to—</P>
              <P>(i) Establish or maintain an essential capability for theoretical analyses, exploratory studies, or experiments in any field of science or technology;</P>
              <P>(ii) Establish or maintain an essential capability for engineering or developmental work calling for the practical application of investigative findings and theories of a scientific or technical nature; or</P>
              <P>(iii) Contract for supplies or services as are necessary incident to paragraphs (b)(2)(i) or (ii) above.</P>
              <P>(3) Use of the authority in paragraph (a)(2)(iii) of this section may be appropriate when it is necessary to acquire the services of either—</P>
              <P>(i) An expert to use, in any litigation or dispute (including any reasonably foreseeable litigation or dispute) involving the Government in any trial, hearing, or proceeding before any court, administrative tribunal, or agency, whether or not the expert is expected to testify. Examples of such services include, but are not limited to:</P>
              <P>(A) Assisting the Government in the analysis, presentation, or defense of any claim or request for adjustment to contract terms and conditions, whether asserted by a contractor or the Government, which is in litigation or dispute, or is anticipated to result in dispute or litigation before any court, administrative tribunal, or agency, or</P>
              <P>(B) Participating in any part of an alternative dispute resolution process, including but not limited to evaluators, fact finders, or witnesses, regardless of whether the expert is expected to testify; or</P>
              <P>(ii) A neutral person, e.g., mediators or arbitrators, to facilitate the resolution of issues in an alternative dispute resolution process.</P>
              <P>(c) <E T="03">Limitations.</E> Contracts awarded using this authority shall be supported by the written justifications and approvals described in 6.303 and 6.304.</P>
              <CITA>[50 FR 52431, Dec. 23, 1985, as amended at 60 FR 42654, Aug. 16, 1995; 60 FR 44548, Aug. 28, 1995; 62 FR 235, Jan. 2, 1997; 63 FR 58594, 58602, Oct. 30, 1998; 66 FR 2128, Jan. 10, 2001; 68 FR 28080, May 22, 2003]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>6.302-4</SECTNO>
              <SUBJECT>International agreement.</SUBJECT>
              <P>(a) <E T="03">Authority.</E> (1) Citations: 10 U.S.C. 2304(c)(4) or 41 U.S.C. 253(c)(4).</P>

              <P>(2) Full and open competition need not be provided for when precluded by the terms of an international agreement or a treaty between the United States and a foreign government or international organization, or the written directions of a foreign government <PRTPAGE P="105"/>reimbursing the agency for the cost of the acquisition of the supplies or services for such government.</P>
              <P>(b) <E T="03">Application.</E> This authority may be used in circumstances such as—</P>
              <P>(1) When a contemplated acquisition is to be reimbursed by a foreign country that requires that the product be obtained from a particular firm as specified in official written direction such as a Letter of Offer and Acceptance; or</P>
              <P>(2) When a contemplated acquisition is for services to be performed, or supplies to be used, in the sovereign territory of another country and the terms of a treaty or agreement specify or limit the sources to be solicited.</P>
              <P>(c) <E T="03">Limitations.</E> Except for DoD, NASA, and the Coast Guard, contracts awarded using this authority shall be supported by written justifications and approvals described in 6.303 and 6.304.</P>
              <CITA>[50 FR 52432, Dec. 23, 1985, as amended at 55 FR 52790, Dec. 21, 1990]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>6.302-5</SECTNO>
              <SUBJECT>Authorized or required by statute.</SUBJECT>
              <P>(a) <E T="03">Authority.</E> (1) Citations: 10 U.S.C. 2304(c)(5) or 41 U.S.C. 253(c)(5).</P>
              <P>(2) Full and open competition need not be provided for when (i) a statute expressly authorizes or requires that the acquisition be made through another agency or from a specified source, or (ii) the agency's need is for a brand name commercial item for authorized resale.</P>
              <P>(b) <E T="03">Application.</E> This authority may be used when statutes, such as the following, expressly authorize or require that acquisition be made from a specified source or through another agency:</P>
              <P>(1) Federal Prison Industries (UNICOR)—18 U.S.C. 4124 (see subpart 8.6);</P>
              <P>(2) Qualified Nonprofit Agencies for the Blind or other Severely Disabled—41 U.S.C. 46-48c (see subpart 8.7);</P>
              <P>(3) Government Printing and Binding—44 U.S.C. 501-504, 1121 (see subpart 8.8);</P>
              <P>(4) Sole source awards under the 8(a) Program—15 U.S.C. 637 (see subpart 19.8); or</P>
              <P>(5) Sole source awards under the HUBZone Act of 1997—15 U.S.C. 657a (see 19.1306).</P>
              <P>(6) Sole source awards under the Veterans Benefits Act of 2003 (15 U.S.C. 657f).</P>
              <P>(c) <E T="03">Limitations.</E> (1) This authority shall not be used when a provision of law requires an agency to award a new contract to a specified non-Federal Government entity unless the provision of law specifically—</P>
              <P>(i) Identifies the entity involved;</P>
              <P>(ii) Refers to 10 U.S.C. 2304(j) for armed services acquisitions or section 303(h) of the Federal Property and Administrative Services Act of 1949 for civilian agency acquisitions; and</P>
              <P>(iii) States that award to that entity shall be made in contravention of the merit-based selection procedures in 10 U.S.C. 2304(j) or section 303(h) of the Federal Property and Administrative Services Act, as appropriate. However, this limitation does not apply—</P>
              <P>(A) When the work provided for in the contract is a continuation of the work performed by the specified entity under a preceding contract; or</P>
              <P>(B) To any contract requiring the National Academy of Sciences to investigate, examine, or experiment upon any subject of science or art of significance to an executive agency and to report on those matters to the Congress or any agency of the Federal Government.</P>
              <P>(2) Contracts awarded using this authority shall be supported by the written justifications and approvals described in 6.303 and 6.304, except for—</P>
              <P>(i) Contracts awarded under (a)(2)(ii), (b)(2), or (b)(4) of this subsection; or</P>
              <P>(ii) Contracts awarded under (a)(2)(i) of this subsection when the statute expressly requires that the procurement be made from a specified source. (Justification and approval requirements apply when the statute authorizes, but does not require, that the procurement be made from a specified source.)</P>

              <P>(3) The authority in (a)(2)(ii) of this subsection may be used only for purchases of brand-name commercial items for resale through commissaries or other similar facilities. Ordinarily, these purchases will involve articles <PRTPAGE P="106"/>desired or preferred by customers of the selling activities (but see 6.301(d)).</P>
              <CITA>[50 FR 52432, Dec. 23, 1985, as amended at 51 FR 36971, Oct. 16, 1986; 54 FR 46005, Oct. 31, 1989; 60 FR 42654, Aug. 16, 1995; 61 FR 39200, July 26, 1996; 63 FR 70267, Dec. 18, 1998; 67 FR 13068, Mar. 20, 2002; 69 FR 25276, May 5, 2004; 71 FR 44547, Aug. 4, 2006]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>6.302-6</SECTNO>
              <SUBJECT>National security.</SUBJECT>
              <P>(a) <E T="03">Authority.</E> (1) Citations: 10 U.S.C. 2304(c)(6) or 41 U.S.C. 253(c)(6).</P>
              <P>(2) Full and open competition need not be provided for when the disclosure of the agency's needs would compromise the national security unless the agency is permitted to limit the number of sources from which it solicits bids or proposals.</P>
              <P>(b) <E T="03">Application.</E> This authority may be used for any acquisition when disclosure of the Government's needs would compromise the national security (e.g., would violate security requirements); it shall not be used merely because the acquisition is classified, or merely because access to classified matter will be necessary to submit a proposal or to perform the contract.</P>
              <P>(c) <E T="03">Limitations.</E> (1) Contracts awarded using this authority shall be supported by the written justifications and approvals described in 6.303 and 6.304.</P>
              <P>(2) See 5.202(a)(1) for synopsis requirements.</P>
              <P>(3) This statutory authority requires that agencies shall request offers from as many potential sources as is practicable under the circumstances.</P>
              <CITA>[50 FR 52432, Dec. 23, 1985]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>6.302-7</SECTNO>
              <SUBJECT>Public interest.</SUBJECT>
              <P>(a) <E T="03">Authority.</E> (1) Citations: 10 U.S.C. 2304(c)(7) or 41 U.S.C. 253(c)(7).</P>
              <P>(2) Full and open competition need not be provided for when the agency head determines that it is not in the public interest in the particular acquisition concerned.</P>
              <P>(b) <E T="03">Application.</E> This authority may be used when none of the other authorities in 6.302 apply.</P>
              <P>(c) <E T="03">Limitations.</E> (1) A written determination to use this authority shall be made in accordance with subpart 1.7, by (i) the Secretary of Defense, the Secretary of the Army, the Secretary of the Navy, the Secretary of the Air Force, the Secretary of Homeland Security for the Coast Guard, or the Administrator of the National Aeronautics and Space Administration; or (ii) the head of any other executive agency. This authority may not be delegated.</P>
              <P>(2) The Congress shall be notified in writing of such determination not less than 30 days before award of the contract.</P>
              <P>(3) If required by the head of the agency, the contracting officer shall prepare a justification to support the determination under paragraph (c)(1) above.</P>
              <P>(4) This Determination and Finding (D &amp; F) shall not be made on a class basis.</P>
              <CITA>[50 FR 52432, Dec. 23, 1985, as amended at 68 FR 69258, Dec. 11, 2003]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>6.303</SECTNO>
              <SUBJECT>Justifications.</SUBJECT>
            </SECTION>
            <SECTION>
              <SECTNO>6.303-1</SECTNO>
              <SUBJECT>Requirements.</SUBJECT>
              <P>(a) A contracting officer shall not commence negotiations for a sole source contract, commence negotiations for a contract resulting from an unsolicited proposal, or award any other contract without providing for full and open competition unless the contracting officer—</P>
              <P>(1) Justifies, if required in 6.302, the use of such actions in writing;</P>
              <P>(2) Certifies the accuracy and completeness of the justification; and</P>
              <P>(3) Obtains the approval required by 6.304.</P>
              <P>(b) Technical and requirements personnel are responsible for providing and certifying as accurate and complete necessary data to support their recommendation for other than full and open competition.</P>

              <P>(c) Justifications required by paragraph (a) above may be made on an individual or class basis. Any justification for contracts awarded under the authority of 6.302-7 shall only be made on an individual basis. Whenever a justification is made and approved on a class basis, the contracting officer must ensure that each contract action taken pursuant to the authority of the class justification and approval is within the scope of the class justification and approval and shall document the contract file for each contract action accordingly.<PRTPAGE P="107"/>
              </P>
              <P>(d) The justifications for contracts awarded under the authority cited in 6.302-2 may be prepared and approved within a reasonable time after contract award when preparation and approval prior to award would unreasonably delay the acquisitions.</P>
              <CITA>[50 FR 1729, Jan. 11, 1985, as amended at 50 FR 52433, Dec. 23, 1985; 55 FR 25526, June 21, 1990; 64 FR 72418, Dec. 27, 1999; 69 FR 77872, Dec. 28, 2004]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO> 6.303-2</SECTNO>
              <SUBJECT>Content.</SUBJECT>
              <P>(a) Each justification shall contain sufficient facts and rationale to justify the use of the specific authority cited. As a minimum, each justification shall include the following information:</P>
              <P>(1) Identification of the agency and the contracting activity, and specific identification of the document as a “Justification for other than full and open competition.”</P>
              <P>(2) Nature and/or description of the action being approved.</P>
              <P>(3) A description of the supplies or services required to meet the agency's needs (including the estimated value).</P>
              <P>(4) An identification of the statutory authority permitting other than full and open competition.</P>
              <P>(5) A demonstration that the proposed contractor's unique qualifications or the nature of the acquisition requires use of the authority cited.</P>
              <P>(6) A description of efforts made to ensure that offers are solicited from as many potential sources as is practicable, including whether a notice was or will be publicized as required by subpart 5.2 and, if not, which exception under 5.202 applies.</P>
              <P>(7) A determination by the contracting officer that the anticipated cost to the Government will be fair and reasonable.</P>
              <P>(8) A description of the market research conducted (see part 10) and the results or a statement of the reason market research was not conducted.</P>
              <P>(9) Any other facts supporting the use of other than full and open competition, such as:</P>
              <P>(i) Explanation of why technical data packages, specifications, engineering descriptions, statements of work, or purchase descriptions suitable for full and open competition have not been developed or are not available.</P>
              <P>(ii) When 6.302-1 is cited for follow-on acquisitions as described in 6.302-1(a)(2)(ii), an estimate of the cost to the Government that would be duplicated and how the estimate was derived.</P>
              <P>(iii) When 6.302-2 is cited, data, estimated cost, or other rationale as to the extent and nature of the harm to the Government.</P>
              <P>(10) A listing of the sources, if any, that expressed, in writing, an interest in the acquisition.</P>
              <P>(11) A statement of the actions, if any, the agency may take to remove or overcome any barriers to competition before any subsequent acquisition for the supplies or services required.</P>
              <P>(12) Contracting officer certification that the justification is accurate and complete to the best of the contracting officer's knowledge and belief.</P>
              <P>(b) Each justification shall include evidence that any supporting data that is the responsibility of technical or requirements personnel (e.g., verifying the Government's minimum needs or schedule requirements or other rationale for other than full and open competition) and which form a basis for the justification have been certified as complete and accurate by the technical or requirements personnel.</P>
              <CITA>[50 FR 1729, Jan. 11, 1985, as amended at 50 FR 52433, Dec. 23, 1985; 60 FR 48236, Sept. 18, 1995; 66 FR 27412, May 16, 2001]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>6.304</SECTNO>
              <SUBJECT>Approval of the justification.</SUBJECT>
              <P>(a) Except for paragraph (b) of this section, the justification for other than full and open competition shall be approved in writing—</P>
              <P>(1) For a proposed contract not exceeding $550,000, the contracting officer's certification required by 6.303-2(a)(12) will serve as approval unless a higher approving level is established in agency procedures.</P>
              <P>(2) For a proposed contract over $550,000 but not exceeding $11.5 million, by the competition advocate for the procuring activity designated pursuant to 6.501 or an official described in paragraph (a)(3) or (a)(4) of this section. This authority is not delegable.</P>

              <P>(3) For a proposed contract over $11.5 million, but not exceeding $57 million, or, for DoD, NASA, and the Coast Guard, not exceeding $78.5 million, by <PRTPAGE P="108"/>the head of the procuring activity, or a designee who—</P>
              <P>(i) If a member of the armed forces, is a general or flag officer; or</P>
              <P>(ii) If a civilian, is serving in a position in a grade above GS-15 under the General Schedule (or in a comparable or higher position under another schedule).</P>
              <P>(4) For a proposed contract over $57 million or, for DoD, NASA, and the Coast Guard, over $78.5 million, by the senior procurement executive of the agency designated pursuant to the OFPP Act (41 U.S.C. 414(3)) in accordance with agency procedures. This authority is not delegable except in the case of the Under Secretary of Defense for Acquisition, Technology, and Logistics, acting as the senior procurement executive for the Department of Defense.</P>
              <P>(b) Any justification for a contract awarded under the authority of 6.302-7, regardless of dollar amount, shall be considered approved when the determination required by 6.302-7(c)(1) is made.</P>
              <P>(c) A class justification for other than full and open competition shall be approved in writing in accordance with agency procedures. The approval level shall be determined by the estimated total value of the class.</P>
              <P>(d) The estimated dollar value of all options shall be included in determining the approval level of a justification.</P>
              <CITA>[50 FR 1729, Jan. 11, 1985, as amended at 50 FR 52433, Dec. 23, 1985; 54 FR 13023, Mar. 29, 1989; 55 FR 3881, Feb. 5, 1990; 55 FR 52790, Dec. 21, 1990; 60 FR 42654, 42665, Aug. 16, 1995; 61 FR 31618, June 20, 1996; 65 FR 24325, Apr. 25, 2000; 70 FR 11739, Mar. 9, 2005; 71 FR 57366, Sept. 28, 2006]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>6.305</SECTNO>
              <SUBJECT>Availability of the justification.</SUBJECT>
              <P>(a) The justification required by 6.303-1 and any related information shall be made available for public inspection as required by 10 U.S.C. 2304(f)(4) and 41 U.S.C. 253(f)(4). Contracting officers shall carefully screen all justifications for contractor proprietary data and remove all such data, and such references and citations as are necessary to protect the proprietary data, before making the justifications available for public inspection. Contracting officers shall also be guided by the exemptions to disclosure of information contained in the Freedom of Information Act (5 U.S.C. 552) and the prohibitions against disclosure in 24.202 in determining whether other data should be removed.</P>
              <P>(b) If a Freedom of Information request is received, contracting officers shall comply with subpart 24.2.</P>
              <CITA>[50 FR 1729, Jan. 11, 1985 and 50 FR 52429, Dec. 23, 1985, as amended at 62 FR 257, Jan. 2, 1997; 65 FR 16286, Mar. 27, 2000]</CITA>
            </SECTION>
          </SUBPART>
          <SUBPART>
            <HD SOURCE="HED">Subpart 6.4—Sealed Bidding and Competitive Proposals</HD>
            <SECTION>
              <SECTNO>6.401</SECTNO>
              <SUBJECT>Sealed bidding and competitive proposals.</SUBJECT>
              <P>Sealed bidding and competitive proposals, as described in Parts 14 and 15, are both acceptable procedures for use under Subparts 6.1, 6.2; and, when appropriate, under Subpart 6.3.</P>
              <P>(a) <E T="03">Sealed bids.</E> (See part 14 for procedures.) Contracting officers shall solicit sealed bids if—</P>
              <P>(1) Time permits the solicitation, submission, and evaluation of sealed bids;</P>
              <P>(2) The award will be made on the basis of price and other price-related factors;</P>
              <P>(3) It is not necessary to conduct discussions with the responding offerors about their bids; and</P>
              <P>(4) There is reasonable expectation of receiving more than one sealed bid.</P>
              <P>(b) <E T="03">Competitive proposals.</E> (See part 15 for procedures.)</P>
              <P>(1) Contracting officers may request competitive proposals if sealed bids are not appropriate under paragraph (a) above.</P>
              <P>(2) Because of differences in areas such as law, regulations, and business practices, it is generally necessary to conduct discussions with offerors relative to proposed contracts to be made and performed outside the United States and its outlying areas. Competitive proposals will therefore be used for these contracts unless discussions are not required and the use of sealed bids is otherwise appropriate.</P>
              <CITA>[50 FR 1729, Jan. 11, 1985; 50 FR 4221, Jan. 30, 1985; 50 FR 52429, Dec. 23, 1985; 54 FR 5054, Jan. 31, 1989; 64 FR 51833, Sept. 24, 1999; 68 FR 28080, May 22, 2003]</CITA>
            </SECTION>
          </SUBPART>
          <SUBPART>
            <PRTPAGE P="109"/>
            <HD SOURCE="HED">Subpart 6.5—Competition Advocates</HD>
            <SECTION>
              <SECTNO>6.501</SECTNO>
              <SUBJECT>Requirement.</SUBJECT>
              <P>As required by section 20 of the Office of Federal Procurement Policy Act, the head of each executive agency shall designate a competition advocate for the agency and for each procuring activity of the agency. The competition advocates shall—</P>
              <P>(a) Be in positions other than that of the agency senior procurement executive;</P>
              <P>(b) Not be assigned any duties or responsibilities that are inconsistent with 6.502 below; and</P>
              <P>(c) Be provided with staff or assistance (e.g., specialists in engineering, technical operations, contract administration, financial management, supply management, and utilization of small business concerns), as may be necessary to carry out the advocate's duties and responsibilities.</P>
              <CITA>[50 FR 1729, Jan. 11, 1985, and 50 FR 52429, Dec. 23, 1985, as amended at 60 FR 48259, Sept. 18, 1995]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>6.502</SECTNO>
              <SUBJECT>Duties and responsibilities.</SUBJECT>
              <P>(a) Agency and procuring activity competition advocates are responsible for promoting the acquisition of commercial items, promoting full and open competition, challenging requirements that are not stated in terms of functions to be performed, performance required or essential physical characteristics, and challenging barriers to the acquisition of commercial items and full and open competition such as unnecessarily restrictive statements of work, unnecessarily detailed specifications, and unnecessarily burdensome contract clauses.</P>
              <P>(b) Agency competition advocates shall—</P>
              <P>(1) Review the contracting operations of the agency and identify and report to the agency senior procurement executive—</P>
              <P>(i) Opportunities and actions taken to acquire commercial items to meet the needs of the agency;</P>
              <P>(ii) Opportunities and actions taken to achieve full and open competition in the contracting operations of the agency;</P>
              <P>(iii) Actions taken to challenge requirements that are not stated in terms of functions to be performed, performance required or essential physical characteristics;</P>
              <P>(iv) Any condition or action that has the effect of unnecessarily restricting the acquisition of commercial items or competition in the contract actions of the agency;</P>
              <P>(2) Prepare and submit an annual report to the agency senior procurement executive, in accordance with agency procedures, describing—</P>
              <P>(i) Such advocate's activities under this subpart;</P>
              <P>(ii) New initiatives required to increase the acquisition of commercial items;</P>
              <P>(iii) New initiatives required to increase competition;</P>
              <P>(iv) New initiatives to ensure requirements are stated in terms of functions to be performed, performance required or essential physical characteristics;</P>
              <P>(v) Any barriers to the acquisition of commercial items or competition that remain; and</P>
              <P>(vi) Other ways in which the agency has emphasized the acquisition of commercial items and competition in areas such as acquisition training and research;</P>
              <P>(3) Recommend to the senior procurement executive of the agency goals and plans for increasing competition on a fiscal year basis; and</P>
              <P>(4) Recommend to the senior procurement executive of the agency a system of personal and organizational accountability for competition, which may include the use of recognition and awards to motivate program managers, contracting officers, and others in authority to promote competition in acquisition.</P>
              <CITA>[60 FR 48236, Sept. 18, 1995, as amended at 67 FR 13053, Mar. 20, 2002]</CITA>
            </SECTION>
          </SUBPART>
          <SUBPART>
            <HD SOURCE="HED">Subpart 6.6—Stafford Act Preference for Local Area Contractor</HD>
            <SOURCE>
              <HD SOURCE="HED">Source:</HD>
              <P>71 FR 44547, Aug. 4, 2006, unless otherwise noted.</P>
            </SOURCE>
            <SECTION>
              <PRTPAGE P="110"/>
              <SECTNO>6.601</SECTNO>
              <SUBJECT>Scope of subpart.</SUBJECT>
              <P>This subpart prescribes competition policies and procedures for procurements under the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5150).</P>
            </SECTION>
            <SECTION>
              <SECTNO>6.602</SECTNO>
              <SUBJECT>Set-asides for local firms during a major disaster or emergency.</SUBJECT>
              <P>(a) To fulfill the statutory requirements relating to Pub. L. 109-218, part of the Stafford Act, contracting officers may set-aside solicitations to allow only offerors residing or doing business primarily in the area affected by such major disaster or emergency to compete (see Subpart 26.2).</P>
              <P>(b) No separate justification or determination and findings are required under this part to set-aside a contract action. The set-aside shall be based on a specific geographic area, within a Presidential declaration(s) of disaster or emergency.</P>
            </SECTION>
            <SECTION>
              <SECTNO>6.603</SECTNO>
              <SUBJECT>Use of procedures other than set-aside.</SUBJECT>
              <P>When implementing the Stafford Act preference by using procedures other than a set-aside under section 6.602, the requirements for a justification to support the use of this authority are in 6.303. These procurements qualify as other than full and open competition.</P>
            </SECTION>
          </SUBPART>
        </PART>
        <PART>
          <EAR>Pt. 7</EAR>
          <HD SOURCE="HED">PART 7—ACQUISITION PLANNING</HD>
          <CONTENTS>
            <SECHD>Sec.</SECHD>
            <SECTNO>7.000</SECTNO>
            <SUBJECT>Scope of part.</SUBJECT>
            <SUBPART>
              <HD SOURCE="HED">Subpart 7.1—Acquisition Plans</HD>
              <SECTNO>7.101</SECTNO>
              <SUBJECT>Definitions.</SUBJECT>
              <SECTNO>7.102</SECTNO>
              <SUBJECT>Policy.</SUBJECT>
              <SECTNO>7.103</SECTNO>
              <SUBJECT>Agency-head responsibilities.</SUBJECT>
              <SECTNO>7.104</SECTNO>
              <SUBJECT>General procedures.</SUBJECT>
              <SECTNO>7.105</SECTNO>
              <SUBJECT>Contents of written acquisition plans.</SUBJECT>
              <SECTNO>7.106</SECTNO>
              <SUBJECT>Additional requirements for major systems.</SUBJECT>
              <SECTNO>7.107</SECTNO>
              <SUBJECT>Additional requirements for acquisitions involving bundling.</SUBJECT>
              <SECTNO>7.108</SECTNO>
              <SUBJECT>Additional requirements for telecommuting.</SUBJECT>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart 7.2—Planning for the Purchase of Supplies in Economic Quantities</HD>
              <SECTNO>7.200</SECTNO>
              <SUBJECT>Scope of subpart.</SUBJECT>
              <SECTNO>7.201</SECTNO>
              <SUBJECT>[Reserved]</SUBJECT>
              <SECTNO>7.202</SECTNO>
              <SUBJECT>Policy.</SUBJECT>
              <SECTNO>7.203</SECTNO>
              <SUBJECT>Solicitation provision.</SUBJECT>
              <SECTNO>7.204</SECTNO>
              <SUBJECT>Responsibilities of contracting officers.</SUBJECT>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart 7.3—Contractor Versus Government Performance</HD>
              <SECTNO>7.300</SECTNO>
              <SUBJECT>[Reserved]</SUBJECT>
              <SECTNO>7.301</SECTNO>
              <SUBJECT>Definitions.</SUBJECT>
              <SECTNO>7.302</SECTNO>
              <SUBJECT>Policy.</SUBJECT>
              <SECTNO>7.303-7.304</SECTNO>
              <SUBJECT>[Reserved]</SUBJECT>
              <SECTNO>7.305</SECTNO>
              <SUBJECT>Solicitation provisions and contract clause.</SUBJECT>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart 7.4—Equipment Lease or Purchase</HD>
              <SECTNO>7.400</SECTNO>
              <SUBJECT>Scope of subpart.</SUBJECT>
              <SECTNO>7.401</SECTNO>
              <SUBJECT>Acquisition considerations.</SUBJECT>
              <SECTNO>7.402</SECTNO>
              <SUBJECT>Acquisition methods.</SUBJECT>
              <SECTNO>7.403</SECTNO>
              <SUBJECT>General Services Administration assistance.</SUBJECT>
              <SECTNO>7.404</SECTNO>
              <SUBJECT>Contract clause.</SUBJECT>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart 7.5—Inherently Governmental Functions</HD>
              <SECTNO>7.500</SECTNO>
              <SUBJECT>Scope of subpart.</SUBJECT>
              <SECTNO>7.501</SECTNO>
              <SUBJECT>[Reserved]</SUBJECT>
              <SECTNO>7.502</SECTNO>
              <SUBJECT>Applicability.</SUBJECT>
              <SECTNO>7.503</SECTNO>
              <SUBJECT>Policy.</SUBJECT>
            </SUBPART>
          </CONTENTS>
          <AUTH>
            <HD SOURCE="HED">Authority:</HD>
            <P>40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 42 U.S.C. 2473(c).</P>
          </AUTH>
          <SOURCE>
            <HD SOURCE="HED">Source:</HD>
            <P>48 FR 42124, Sept. 19, 1983, unless otherwise noted.</P>
          </SOURCE>
          <SECTION>
            <SECTNO>7.000</SECTNO>
            <SUBJECT>Scope of part.</SUBJECT>
            <P>This part prescribes policies and procedures for—</P>
            <P>(a) Developing acquisition plans;</P>
            <P>(b) Determining whether to use commercial or Government resources for acquisition of supplies or services;</P>
            <P>(c) Deciding whether it is more economical to lease equipment rather than purchase it; and</P>
            <P>(d) Determining whether functions are inherently governmental.</P>
            <CITA>[48 FR 42124, Sept. 19, 1983, as amended at 61 FR 2628, Jan. 26, 1996]</CITA>
          </SECTION>
          <SUBPART>
            <HD SOURCE="HED">Subpart 7.1—Acquisition Plans</HD>
            <SECTION>
              <SECTNO>7.101</SECTNO>
              <SUBJECT>Definitions.</SUBJECT>
              <P>As used in this subpart—</P>
              <P>
                <E T="03">Acquisition streamlining,</E> means any effort that results in more efficient and effective use of resources to design and develop, or produce quality systems. This includes ensuring that only necessary and cost-effective requirements are included, at the most appropriate time in the acquisition cycle, in solicitations and resulting contracts for the <PRTPAGE P="111"/>design, development, and production of new systems, or for modifications to existing systems that involve redesign of systems or subsystems.</P>
              <P>
                <E T="03">Life-cycle cost</E> means the total cost to the Government of acquiring, operating, supporting, and (if applicable) disposing of the items being acquired.</P>
              <P>
                <E T="03">Order</E> means an order placed under a—</P>
              <P>(1) Federal Supply Schedule contract; or</P>

              <P>(2) Task-order contract or delivery-order contract awarded by another agency, (<E T="03">i.e.,</E> Governmentwide acquisition contract or multi-agency contract).</P>
              <P>
                <E T="03">Planner,</E> means the designated person or office responsible for developing and maintaining a written plan, or for the planning function in those acquisitions not requiring a written plan.</P>
              <CITA>[48 FR 42124, Sept. 19, 1983, as amended at 50 FR 1735, Jan. 11, 1985; 50 FR 52429, Dec. 23, 1985; 53 FR 34226, Sept. 2, 1988; 60 FR 48236, Sept. 18, 1995; 66 FR 2128, Jan. 10, 2001; 67 FR 56118, Aug. 30, 2002]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>7.102</SECTNO>
              <SUBJECT>Policy.</SUBJECT>
              <P>(a) Agencies shall perform acquisition planning and conduct market research (see part 10) for all acquisitions in order to promote and provide for—</P>

              <P>(1) Acquisition of commercial items or, to the extent that commercial items suitable to meet the agency's needs are not available, nondevelopmental items, to the maximum extent practicable (10 U.S.C. 2377 and 41 U.S.C. 251, <E T="03">et seq.</E>); and</P>
              <P>(2) Full and open competition (see part 6) or, when full and open competition is not required in accordance with part 6, to obtain competition to the maximum extent practicable, with due regard to the nature of the supplies or services to be acquired (10 U.S.C. 2301(a)(5) and 41 U.S.C. 253a(a)(1)).</P>
              <P>(b) This planning shall integrate the efforts of all personnel responsible for significant aspects of the acquisition. The purpose of this planning is to ensure that the Government meets its needs in the most effective, economical, and timely manner. Agencies that have a detailed acquisition planning system in place that generally meets the requirements of 7.104 and 7.105 need not revise their system to specifically meet all of these requirements.</P>
              <CITA>[60 FR 48236, Sept. 18, 1995]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>7.103</SECTNO>
              <SUBJECT>Agency-head responsibilities.</SUBJECT>
              <P>The agency head or a designee shall prescribe procedures for—</P>
              <P>(a) Promoting and providing for full and open competition (see part 6) or, when full and open competition is not required in accordance with part 6, for obtaining competition to the maximum extent practicable, with due regard to the nature of the supplies and services to be acquired (41 U.S.C. 253a(a)(1)).</P>

              <P>(b) Encouraging offerors to supply commercial items, or to the extent that commercial items suitable to meet the agency needs are not available, nondevelopmental items in response to agency solicitations (10 U.S.C. 2377 and 41 U.S.C. 251, <E T="03">et seq.</E>); and</P>
              <P>(c) Ensuring that acquisition planners address the requirement to specify needs, develop specifications, and to solicit offers in such a manner to promote and provide for full and open competition with due regard to the nature of the supplies and services to be acquired (10 U.S.C. 2305(a)(1)(A) and 41 U.S.C. 253A(a)(1)). (See part 6 and 10.002.)</P>
              <P>(d) Establishing criteria and thresholds at which increasingly greater detail and formality in the planning process is required as the acquisition becomes more complex and costly, specifying those cases in which a written plan shall be prepared;</P>
              <P>(e) Writing plans either on a systems basis, on an individual contract basis, or on an individual order basis, depending upon the acquisition.</P>
              <P>(f) Ensuring that the principles of this subpart are used, as appropriate, for those acquisitions that do not require a written plan as well as for those that do;</P>
              <P>(g) Designating planners for acquisitions;</P>
              <P>(h) Reviewing and approving acquisition plans and revisions to these plans;</P>

              <P>(i) Establishing criteria and thresholds at which design-to-cost and life-cycle-cost techniques will be used;<PRTPAGE P="112"/>
              </P>
              <P>(j) Establishing standard acquisition plan formats, if desired, suitable to agency needs; and</P>
              <P>(k) Waiving requirements of detail and formality, as necessary, in planning for acquisitions having compressed delivery or performance schedules because of the urgency of the need.</P>
              <P>(l) Assuring that the contracting officer, prior to contracting, reviews:</P>
              <P>(1) The acquisition history of the supplies and services; and</P>
              <P>(2) A description of the supplies, including, when necessary for adequate description, a picture, drawing, diagram, or other graphic representation.</P>
              <P>(m) Ensuring that agency planners include use of the metric system of measurement in proposed acquisitions in accordance with 15 U.S.C. 205b (see 11.002(b)) and agency metric plans and guidelines.</P>
              <P>(n) Ensuring that agency planners—</P>
              <P>(1) Specify needs for printing and writing paper consistent with the minimum content standards specified in section 505 of Executive Order 13101 of September 14, 1998, Greening the Government through Waste Prevention, Recycling, and Federal Acquisition (see 11.303); and</P>
              <P>(2) Comply with the policy in 11.002(d) regarding procurement of products containing recovered materials, and environmentally preferable and energy-efficient products and services.</P>
              <P>(o) Ensuring that acquisition planners specify needs and develop plans, drawings, work statements, specifications, or other product descriptions that address Electronic and Information Technology Accessibility Standards (see 36 CFR part 1194) in proposed acquisitions (see 11.002(e)) and that these standards are included in requirements planning, as appropriate (see subpart 39.2).</P>
              <P>(p) Making a determination, prior to issuance of a solicitation for advisory and assistance services involving the analysis and evaluation of proposals submitted in response to a solicitation, that a sufficient number of covered personnel with the training and capability to perform an evaluation and analysis of proposals submitted in response to a solicitation are not readily available within the agency or from another Federal agency in accordance with the guidelines at 37.204.</P>
              <P>(q) Ensuring that no purchase request is initiated or contract entered into that would result in the performance of an inherently governmental function by a contractor and that all contracts or orders are adequately managed so as to ensure effective official control over contract or order performance.</P>
              <P>(r) Ensuring that knowledge gained from prior acquisitions is used to further refine requirements and acquisition strategies. For services, greater use of performance-based acquisition methods should occur for follow-on acquisitions.</P>
              <P>(s) Ensuring that acquisition planners, to the maximum extent practicable—</P>
              <P>(1) Structure contract requirements to facilitate competition by and among small business concerns; and</P>
              <P>(2) Avoid unnecessary and unjustified bundling that precludes small business participation as contractors (see 7.107) (15 U.S.C. 631(j)).</P>
              <P>(t) Ensuring that agency planners on information technology acquisitions comply with the capital planning and investment control requirements in 40 U.S.C. 11312 and OMB Circular A-130.</P>
              <P>(u) Ensuring that agency planners on information technology acquisitions comply with the information technology security requirements in the Federal Information Security Management Act (44 U.S.C. 3544), OMB's implementing policies including Appendix III of OMB Circular A-130, and guidance and standards from the Department of Commerce's National Institute of Standards and Technology.</P>
              <CITA>[48 FR 42124, Sept. 19, 1983, as amended at 50 FR 1735, Jan. 11, 1985; 50 FR 27561, July 3, 1985; 50 FR 52429, Dec. 23, 1985; 51 FR 27116, July 29, 1986; 57 FR 60574, Dec. 21, 1992; 60 FR 28495, May 31, 1995; 60 FR 48236, Sept. 18, 1995; 60 FR 49721, Sept. 26, 1995; 61 FR 2628, Jan. 26, 1996; 62 FR 40236, July 25, 1997; 62 FR 44814, Aug. 22, 1997; 64 FR 72442, Dec. 27, 1999; 65 FR 36017, June 6, 2000; 66 FR 20896, Apr. 25, 2001; 67 FR 56118, Aug. 30, 2002; 70 FR 57452, 57454, Sept. 30, 2005; 71 FR 217, Jan. 3, 2006]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>7.104</SECTNO>
              <SUBJECT>General procedures.</SUBJECT>

              <P>(a) Acquisition planning should begin as soon as the agency need is identified, preferably well in advance of the <PRTPAGE P="113"/>fiscal year in which contract award or order placement is necessary. In developing the plan, the planner shall form a team consisting of all those who will be responsible for significant aspects of the acquisition, such as contracting, fiscal, legal, and technical personnel. The planner should review previous plans for similar acquisitions and discuss them with the key personnel involved in those acquisitions. At key dates specified in the plan or whenever significant changes occur, and no less often than annually, the planner shall review the plan and, if appropriate, revise it.</P>
              <P>(b) Requirements and logistics personnel should avoid issuing requirements on an urgent basis or with unrealistic delivery or performance schedules, since it generally restricts competition and increases prices. Early in the planning process, the planner should consult with requirements and logistics personnel who determine type, quality, quantity, and delivery requirements.</P>
              <P>(c) The planner shall coordinate with and secure the concurrence of the contracting officer in all acquisition planning. If the plan proposes using other than full and open competition when awarding a contract, the plan shall also be coordinated with the cognizant competition advocate.</P>
              <P>(d)(1) The planner shall coordinate the acquisition plan or strategy with the cognizant small business specialist when the strategy contemplates an acquisition meeting the dollar amounts in paragraph (d)(2) of this section unless the contract or order is entirely reserved or set-aside for small business under part 19. The small business specialist shall notify the agency Office of Small and Disadvantaged Business Utilization if the strategy involves contract bundling that is unnecessary, unjustified, or not identified as bundled by the agency. If the strategy involves substantial bundling, the small business specialist shall assist in identifying alternative strategies that would reduce or minimize the scope of the bundling.</P>
              <P>(2)(i) The strategy shall be coordinated with the cognizant small business specialist in accordance with paragraph (d)(1) of this section if the estimated contract or order value is—</P>
              <P>(A) $7.5 million or more for the Department of Defense;</P>
              <P>(B) $5.5 million or more for the National Aeronautics and Space Administration, the General Services Administration, and the Department of Energy; and</P>
              <P>(C) $2 million or more for all other agencies.</P>
              <P>(ii) If the strategy contemplates the award of multiple contracts or orders, the thresholds in paragraph (d)(2)(i) of this section apply to the cumulative maximum potential value, including options, of the contracts and orders.</P>
              <CITA>[48 FR 42124, Sept. 19, 1983, as amended at 50 FR 1735, Jan. 11, 1985; 50 FR 52433, Dec. 23, 1985; 67 FR 56118, Aug. 30, 2002; 68 FR 60005, Oct. 20, 2003; 71 FR 57366, Sept. 28, 2006]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>7.105</SECTNO>
              <SUBJECT>Contents of written acquisition plans.</SUBJECT>
              <P>In order to facilitate attainment of the acquisition objectives, the plan must identify those milestones at which decisions should be made (see paragraph (b)(19) below). The plan must address all the technical, business, management, and other significant considerations that will control the acquisition. The specific content of plans will vary, depending on the nature, circumstances, and stage of the acquisition. In preparing the plan, the planner must follow the applicable instructions in paragraphs (a) and (b) below, together with the agency's implementing procedures. Acquisition plans for service contracts or orders must describe the strategies for implementing performance-based acquisition methods or must provide rationale for not using those methods (see subpart 37.6).</P>
              <P>(a) <E T="03">Acquisition background and objectives</E>—(1) <E T="03">Statement of need.</E> Introduce the plan by a brief statement of need. Summarize the technical and contractual history of the acquisition. Discuss feasible acquisition alternatives, the impact of prior acquisitions on those alternatives, and any related in-house effort.</P>
              <P>(2) <E T="03">Applicable conditions.</E> State all significant conditions affecting the acquisition, such as (i) requirements for compatibility with existing or future systems or programs and (ii) any <PRTPAGE P="114"/>known cost, schedule, and capability or performance constraints.</P>
              <P>(3) <E T="03">Cost.</E> Set forth the established cost goals for the acquisition and the rationale supporting them, and discuss related cost concepts to be employed, including, as appropriate, the following items:</P>
              <P>(i) <E T="03">Life-cycle cost.</E> Discuss how life-cycle cost will be considered. If it is not used, explain why. If appropriate, discuss the cost model used to develop life-cycle-cost estimates.</P>
              <P>(ii) <E T="03">Design-to-cost.</E> Describe the design-to-cost objective(s) and underlying assumptions, including the rationale for quantity, learning-curve, and economic adjustment factors. Describe how objectives are to be applied, tracked, and enforced. Indicate specific related solicitation and contractual requirements to be imposed.</P>
              <P>(iii) <E T="03">Application of should-cost.</E> Describe the application of should-cost analysis to the acquisition (see 15.407-4).</P>
              <P>(4) <E T="03">Capability or performance.</E> Specify the required capabilities or performance characteristics of the supplies or the performance standards of the services being acquired and state how they are related to the need.</P>
              <P>(5) <E T="03">Delivery or performance-period requirements.</E> Describe the basis for establishing delivery or performance-period requirements (see subpart 11.4). Explain and provide reasons for any urgency if it results in concurrency of development and production or constitutes justification for not providing for full and open competition.</P>
              <P>(6) <E T="03">Trade-offs.</E> Discuss the expected consequences of trade-offs among the various cost, capability or performance, and schedule goals.</P>
              <P>(7) <E T="03">Risks.</E> Discuss technical, cost, and schedule risks and describe what efforts are planned or underway to reduce risk and the consequences of failure to achieve goals. If concurrency of development and production is planned, discuss its effects on cost and schedule risks.</P>
              <P>(8) <E T="03">Acquisition streamlining.</E> If specifically designated by the requiring agency as a program subject to acquisition streamlining, discuss plans and procedures to:</P>
              <P>(i) Encourage industry participation by using draft solicitations, presolicitation conferences, and other means of stimulating industry involvement during design and development in recommending the most appropriate application and tailoring of contract requirements;</P>
              <P>(ii) Select and tailor only the necessary and cost-effective requirements; and</P>
              <P>(iii) State the timeframe for identifying which of those specifications and standards, originally provided for guidance only, shall become mandatory.</P>
              <P>(b) <E T="03">Plan of action</E>—(1) <E T="03">Sources.</E> Indicate the prospective sources of supplies or services that can meet the need. Consider required sources of supplies or services (<E T="03">see</E> Part 8) and sources identifiable through databases including the Governmentwide database of contracts and other procurement instruments intended for use by multiple agencies available at <E T="03">http://www.contractdirectory.gov.</E> Include consideration of small business, veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, small disadvantaged business, and women-owned small business concerns (see part 19), and the impact of any bundling that might affect their participation in the acquisition (see 7.107) (15 U.S.C. 644(e)). When the proposed acquisition strategy involves bundling, identify the incumbent contractors and contracts affected by the bundling. Address the extent and results of the market research and indicate their impact on the various elements of the plan (see part 10).</P>
              <P>(2) <E T="03">Competition.</E> (i) Describe how competition will be sought, promoted, and sustained throughout the course of the acquisition. If full and open competition is not contemplated cite the authority in 6.302, discuss the basis for the application of that authority, identify the source(s), and discuss why full and open competition cannot be obtained.</P>

              <P>(ii) Identify the major components or subsystems. Discuss component breakout plans relative to these major components or subsystems. Describe how competition will be sought, promoted, <PRTPAGE P="115"/>and sustained for these components or subsystems.</P>
              <P>(iii) Describe how competition will be sought, promoted, and sustained for spares and repair parts. Identify the key logistic milestones, such as technical data delivery schedules and acquisition method coding conferences, that affect competition.</P>
              <P>(iv) When effective subcontract competition is both feasible and desirable, describe how such subcontract competition will be sought, promoted, and sustained throughout the course of the acquisition. Identify any known barriers to increasing subcontract competition and address how to overcome them.</P>
              <P>(3) <E T="03">Source-selection procedures</E>. Discuss the source-selection procedures for the acquisition, including the timing for submission and evaluation of proposals, and the relationship of evaluation factors to the attainment of the acquisition objectives (see Subpart 15.3). When an EVMS is required (see FAR 34.202(a)) and a pre-award IBR is contemplated, the acquisition plan must discuss—</P>
              <P>(i) How the pre-award IBR will be considered in the source selection decision;</P>
              <P>(ii) How it will be conducted in the source selection process (see FAR 15.306); and</P>
              <P>(iii) Whether offerors will be directly compensated for the costs of participating in a pre-award IBR.</P>
              <P>(4) <E T="03">Acquisition considerations.</E> (i) For each contract contemplated, discuss contract type selection (<E T="03">see</E> part 16); use of multiyear contracting, options, or other special contracting methods (<E T="03">see</E> part 17); any special clauses, special solicitation provisions, or FAR deviations required (<E T="03">see</E> subpart 1.4); whether sealed bidding or negotiation will be used and why; whether equipment will be acquired by lease or purchase (<E T="03">see</E> subpart 7.4) and why; and any other contracting considerations. Provide rationale if a performance-based acquisition will not be used or if a performance-based acquisition for services is contemplated on other than a firm-fixed-price basis (see 37.102(a), 16.103(d), and 16.505(a)(3)).</P>
              <P>(ii) For each order contemplated, discuss—</P>

              <P>(A) For information technology acquisitions, how the capital planning and investment control requirements of 40 U.S.C. 11312 and OMB Circular A-130 will be met (<E T="03">see</E> 7.103(t) and part 39); and</P>
              <P>(B) Why this action benefits the Government, such as when—</P>
              <P>(<E T="03">1</E>) The agency can accomplish its mission more efficiently and effectively (<E T="03">e.g.,</E> take advantage of the servicing agency's specialized expertise; or gain access to contractors with needed expertise); or</P>
              <P>(<E T="03">2</E>) Ordering through an indefinite delivery contract facilitates access to small business concerns, including small disadvantaged business concerns, 8(a) contractors, women-owned small business concerns, HUBZone small business concerns, veteran-owned small business concerns, or service-disabled veteran-owned small business concerns.</P>
              <P>(5) <E T="03">Budgeting and funding.</E> Include budget estimates, explain how they were derived, and discuss the schedule for obtaining adequate funds at the time they are required (see subpart 32.7).</P>
              <P>(6) <E T="03">Product or service descriptions.</E> Explain the choice of product or service description types (including performance-based acquisition descriptions) to be used in the acquisition.</P>
              <P>(7) <E T="03">Priorities, allocations, and allotments.</E> When urgency of the requirement dictates a particularly short delivery or performance schedule, certain priorities may apply. If so, specify the method for obtaining and using priorities, allocations, and allotments, and the reasons for them (see subpart 11.6).</P>
              <P>(8) <E T="03">Contractor versus Government performance.</E> Address the consideration given to OMB Circular No. A-76 (see subpart 7.3).</P>
              <P>(9) <E T="03">Inherently governmental functions.</E> Address the consideration given to Subpart 7.5.</P>
              <P>(10) <E T="03">Management information requirements.</E> Discuss, as appropriate, what management system will be used by the Government to monitor the contractor's effort. If an Earned Value Management System is to be used, discuss the methodology the Government will employ to analyze and use the earned value data to assess and monitor contract performance. In addition, <PRTPAGE P="116"/>discuss how the offeror's/contractor's EVMS will be verified for compliance with the American National Standards Institute/Electronics Industries Alliance (ANSI/EIA) Standard-748, Earned Value Management Systems, and the timing and conduct of integrated baseline reviews (whether prior to or post award). (See 34.202.)</P>
              <P>(11) <E T="03">Make or buy.</E> Discuss any consideration given to make-or-buy programs (see subpart 15.407-2).</P>
              <P>(12) <E T="03">Test and evaluation.</E> To the extent applicable, describe the test program of the contractor and the Government. Describe the test program for each major phase of a major system acquisition. If concurrency is planned, discuss the extent of testing to be accomplished before production release.</P>
              <P>(13) <E T="03">Logistics considerations.</E> Describe—</P>
              <P>(i) The assumptions determining contractor or agency support, both initially and over the life of the acquisition, including consideration of contractor or agency maintenance and servicing (see subpart 7.3) and distribution of commercial items;</P>
              <P>(ii) The reliability, maintainability, and quality assurance requirements, including any planned use of warranties (see part 46);</P>
              <P>(iii) The requirements for contractor data (including repurchase data) and data rights, their estimated cost, and the use to be made of the data (see part 27); and</P>

              <P>(iv) Standardization concepts, including the necessity to designate, in accordance with agency procedures, technical equipment as <E T="03">standard</E> so that future purchases of the equipment can be made from the same manufacturing source.</P>
              <P>(14) <E T="03">Government-furnished property.</E> Indicate any Government property to be furnished to contractors, and discuss any associated considerations, such as its availability or the schedule for its acquisition (see 45.102).</P>
              <P>(15) <E T="03">Government-furnished information.</E> Discuss any Government information, such as manuals, drawings, and test data, to be provided to prospective offerors and contractors. Indicate which information that requires additional controls to monitor access and distribution (e.g., technical specifications, maps, building designs, schedules, etc.), as determined by the agency, is to be posted via the Federal Technical Data Solution (FedTeDS) (see 5.102(a)).</P>
              <P>(16) <E T="03">Environmental and energy conservation objectives.</E> Discuss all applicable environmental and energy conservation objectives associated with the acquisition (see part 23), the applicability of an environmental assessment or environmental impact statement (see 40 CFR part 1502), the proposed resolution of environmental issues, and any environmentally-related requirements to be included in solicitations and contracts.</P>
              <P>(17) <E T="03">Security considerations</E>. For acquisitions dealing with classified matters, discuss how adequate security will be established, maintained, and monitored (see Subpart 4.4). For information technology acquisitions, discuss how agency information security requirements will be met. For acquisitions requiring routine contractor physical access to a Federally-controlled facility and/or routine access to a Federally-controlled information system, discuss how agency requirements for personal identity verification of contractors will be met (see Subpart 4.13).</P>
              <P>(18) <E T="03">Contract administration.</E> Describe how the contract will be administered. In contracts for services, include how inspection and acceptance corresponding to the work statement's performance criteria will be enforced.</P>
              <P>(19) <E T="03">Other considerations.</E> Discuss, as applicable, standardization concepts, the industrial readiness program, the Defense Production Act, the Occupational Safety and Health Act, foreign sales implications, and any other matters germane to the plan not covered elsewhere.</P>
              <P>(20) <E T="03">Milestones for the acquisition cycle.</E> Address the following steps and any others appropriate:
              </P>
              <EXTRACT>
                <P>Acquisition plan approval.</P>
                <P>Statement of work.</P>
                <P>Specifications.</P>
                <P>Data requirements.</P>
                <P>Completion of acquisition-package preparation.</P>
                <P>Purchase request.</P>

                <P>Justification and approval for other than full and open competition where applicable and/or any required D&amp;F approval.<PRTPAGE P="117"/>
                </P>
                <P>Issuance of synopsis.</P>
                <P>Issuance of solicitation.</P>
                <P>Evaluations of proposals, audits, and field reports.</P>
                <P>Beginning and completion of negotiations.</P>
                <P>Contract preparation, review, and clearance.</P>
                <P>Contract award.</P>
              </EXTRACT>
              
              <P>(21) <E T="03">Identification of participants in acquisition plan preparation.</E> List the individuals who participated in preparing the acquisition plan, giving contact information for each.</P>
              <CITA>[48 FR 42124, Sept. 19, 1983, as amended at 50 FR 1735, Jan. 11, 1985; 50 FR 52429, Dec. 23, 1985, and 51 FR 27116, July 29, 1986; 53 FR 17856, May 18, 1988; 53 FR 34226, Sept. 2, 1988; 60 FR 28495, May 31, 1995; 60 FR 48237, Sept. 18, 1995; 61 FR 2628, Jan. 26, 1996; 62 FR 40236, July 25, 1997; 62 FR 44814, Aug. 22, 1997; 62 FR 51230, 51270, Sept. 30, 1997; 63 FR 70267, Dec. 18, 1998; 64 FR 72442, Dec. 27, 1999; 65 FR 60544, Oct. 11, 2000; 67 FR 56118, Aug. 30, 2002; 67 FR 70522, Nov. 22, 2002; 68 FR 43862, July 24, 2003; 68 FR 60005, Oct. 20, 2003; 70 FR 57452, 57454, Sept. 30, 2005; 71 FR 211, 217, Jan. 3, 2006; 71 FR 20298, 20299, Apr. 19, 2006; 71 FR 38245, July 5, 2006; 71 FR 67775, Nov. 22, 2006; 72 FR 27383, May 15, 2007]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>7.106</SECTNO>
              <SUBJECT>Additional requirements for major systems.</SUBJECT>
              <P>(a) In planning for the solicitation of a major system (see part 34) development contract, planners shall consider requiring offerors to include, in their offers, proposals to incorporate in the design of a major system—</P>
              <P>(1) Items which are currently available within the supply system of the agency responsible for the major system, available elsewhere in the national supply system, or commercially available from more than one source; and</P>
              <P>(2) Items which the Government will be able to acquire competitively in the future if they are likely to be needed in substantial quantities during the system's service life.</P>
              <P>(b) In planning for the solicitation of a major system (see part 34) production contract, planners shall consider requiring offerors to include, in their offers, proposals identifying opportunities to assure that the Government will be able to obtain, on a competitive basis, items acquired in connection with the system that are likely to be acquired in substantial quantities during the service life of the system. Proposals submitted in response to such requirements may include the following:</P>
              <P>(1) Proposals to provide the Government the right to use technical data to be provided under the contract for competitive future acquisitions, together with the cost to the Government, if any, of acquiring such technical data and the right to use such data.</P>
              <P>(2) Proposals for the qualification or development of multiple sources of supply for competitive future acquisitions.</P>
              <P>(c) In determining whether to apply paragraphs (a) and (b) above, planners shall consider the purposes for which the system is being acquired and the technology necessary to meet the system's required capabilities. If such proposals are required, the contracting officer shall consider them in evaluating competing offers. In noncompetitive awards, the factors in paragraphs (a) and (b) above, may be considered by the contracting officer as objectives in negotiating the contract.</P>
              <CITA>[50 FR 27561, July 3, 1985 and 51 FR 27116, July 29, 1986]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>7.107</SECTNO>
              <SUBJECT>Additional requirements for acquisitions involving bundling.</SUBJECT>
              <P>(a) Bundling may provide substantial benefits to the Government. However, because of the potential impact on small business participation, the head of the agency must conduct market research to determine whether bundling is necessary and justified (15 U.S.C. 644(e)(2)). Market research may indicate that bundling is necessary and justified if an agency or the Government would derive measurably substantial benefits (see 10.001(a)(2)(iv) and (a)(3)(vi)).</P>

              <P>(b) Measurably substantial benefits may include, individually or in any combination or aggregate, cost savings or price reduction, quality improvements that will save time or improve or enhance performance or efficiency, reduction in acquisition cycle times, better terms and conditions, and any other benefits. The agency must quantify the identified benefits and explain how their impact would be measurably substantial. Except as provided in <PRTPAGE P="118"/>paragraph (d) of this section, the agency may determine bundling to be necessary and justified if, as compared to the benefits that it would derive from contracting to meet those requirements if not bundled, it would derive measurably substantial benefits equivalent to—</P>
              <P>(1) Ten percent of the estimated contract or order value (including options) if the value is $86 million or less; or</P>
              <P>(2) Five percent of the estimated contract or order value (including options) or $8.6 million, whichever is greater, if the value exceeds $86 million.</P>
              <P>(c) Without power of delegation, the service acquisition executive for the military departments, the Under Secretary of Defense for Acquisition, Technology and Logistics for the defense agencies, or the Deputy Secretary or equivalent for the civilian agencies may determine that bundling is necessary and justified when—</P>
              <P>(1) The expected benefits do not meet the thresholds in paragraphs (b)(1) and (b)(2) of this section but are critical to the agency's mission success; and</P>
              <P>(2) The acquisition strategy provides for maximum practicable participation by small business concerns.</P>
              <P>(d) Reduction of administrative or personnel costs alone is not sufficient justification for bundling unless the cost savings are expected to be at least 10 percent of the estimated contract or order value (including options) of the bundled requirements.</P>
              <P>(e) Substantial bundling is any bundling that results in a contract or order that meets the dollar amounts specified in 7.104(d)(2). When the proposed acquisition strategy involves substantial bundling, the acquisition strategy must additionally—</P>
              <P>(1) Identify the specific benefits anticipated to be derived from bundling;</P>
              <P>(2) Include an assessment of the specific impediments to participation by small business concerns as contractors that result from bundling;</P>
              <P>(3) Specify actions designed to maximize small business participation as contractors, including provisions that encourage small business teaming;</P>
              <P>(4) Specify actions designed to maximize small business participation as subcontractors (including suppliers) at any tier under the contract, or order, that may be awarded to meet the requirements;</P>
              <P>(5) Include a specific determination that the anticipated benefits of the proposed bundled contract or order justify its use; and</P>
              <P>(6) Identify alternative strategies that would reduce or minimize the scope of the bundling, and the rationale for not choosing those alternatives.</P>
              <P>(f) The contracting officer must justify bundling in acquisition strategy documentation.</P>
              <P>(g) In assessing whether cost savings would be achieved through bundling, the contracting officer must consider the cost that has been charged or, where data is available, could be charged by small business concerns for the same or similar work.</P>
              <P>(h) The requirements of this section, except for paragraph (e), do not apply if a cost comparison analysis will be performed in accordance with OMB Circular A-76.</P>
              <CITA>[64 FR 72443, Dec. 27, 1999, as amended at 65 FR 46054, July 26, 2000; 68 FR 60005, Oct. 20, 2003; 71 FR 57366, Sept. 28, 2006]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>7.108</SECTNO>
              <SUBJECT>Additional requirements for telecommuting.</SUBJECT>
              <P>In accordance with section 1428 of Public Law 108-136, an agency shall generally not discourage a contractor from allowing its employees to telecommute in the performance of Government contracts. Therefore, agencies shall not—</P>
              <P>(a) Include in a solicitation a requirement that prohibits an offeror from permitting its employees to telecommute unless the contracting officer first determines that the requirements of the agency, including security requirements, cannot be met if telecommuting is permitted. The contracting officer shall document the basis for the determination in writing and specify the prohibition in the solicitation; or</P>

              <P>(b) When telecommuting is not prohibited, unfavorably evaluate an offer because it includes telecommuting, unless the contracting officer first determines that the requirements of the agency, including security requirements, would be adversely impacted if telecommuting is permitted. The contracting officer shall document the basis for the determination in writing <PRTPAGE P="119"/>and address the evaluation procedures in the solicitation.</P>
              <CITA>[69 FR 58702, Oct. 5, 2004]</CITA>
            </SECTION>
          </SUBPART>
          <SUBPART>
            <HD SOURCE="HED">Subpart 7.2—Planning for the Purchase of Supplies in Economic Quantities</HD>
            <SOURCE>
              <HD SOURCE="HED">Source:</HD>
              <P>50 FR 35475, Aug. 30, 1985, unless otherwise noted.</P>
            </SOURCE>
            <SECTION>
              <SECTNO>7.200</SECTNO>
              <SUBJECT>Scope of subpart.</SUBJECT>
              <P>This subpart prescribes policies and procedures for gathering information from offerors to assist the Government in planning the most advantageous quantities in which supplies should be purchased.</P>
            </SECTION>
            <SECTION>
              <SECTNO>7.201</SECTNO>
              <RESERVED>[Reserved]</RESERVED>
            </SECTION>
            <SECTION>
              <SECTNO>7.202</SECTNO>
              <SUBJECT>Policy.</SUBJECT>
              <P>(a) Agencies are required by 10 U.S.C. 2384(a) and 41 U.S.C. 253(f) to procure supplies in such quantity as (1) will result in the total cost and unit cost most advantageous to the Government, where practicable, and (2) does not exceed the quantity reasonably expected to be required by the agency.</P>
              <P>(b) Each solicitation for a contract for supplies is required, if practicable, to include a provision inviting each offeror responding to the solicitation (1) to state an opinion on whether the quantity of the supplies proposed to be acquired is economically advantageous to the Government, and (2) if applicable, to recommend a quantity or quantities which would be more economically advantageous to the Government. Each such recommendation is required to include a quotation of the total price and the unit price for supplies procured in each recommended quantity.</P>
            </SECTION>
            <SECTION>
              <SECTNO>7.203</SECTNO>
              <SUBJECT>Solicitation provision.</SUBJECT>
              <P>Contracting officers shall insert the provision at 52.207-4, Economic Purchase Quantity—Supplies, in solicitations for supplies. The provision need not be inserted if the solicitation is for a contract under the General Services Administration's multiple award schedule contract program, or if the contracting officer determines that (a) the Government already has the data, (b) the data is otherwise readily available, or (c) it is impracticable for the Government to vary its future requirements.</P>
              <CITA>[52 FR 30076, Aug. 12, 1987]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>7.204</SECTNO>
              <SUBJECT>Responsibilities of contracting officers.</SUBJECT>
              <P>(a) Contracting officers are responsible for transmitting offeror responses to the solicitation provision at 52.207-4 to appropriate inventory management/requirements development activities in accordance with agency procedures. The economic purchase quantity data so obtained are intended to assist inventory managers in establishing and evaluating economic order quantities for supplies under their cognizance.</P>
              <P>(b) In recognition of the fact that economic purchase quantity data furnished by offerors are only one of many data inputs required for determining the most economical order quantities, contracting officers should generally take no action to revise quantities to be acquired in connection with the instant procurement. However, if a significant price variation is evident from offeror responses, and the potential for significant savings is apparent, the contracting officer shall consult with the cognizant inventory manager or requirements development activity before proceeding with an award or negotiations. If this consultation discloses that the Government should be ordering an item of supply in different quantities and the inventory manager/requirements development activity concurs, the solicitation for the item should be amended or canceled and a new requisition should be obtained.</P>
            </SECTION>
          </SUBPART>
          <SUBPART>
            <HD SOURCE="HED">Subpart 7.3—Contractor Versus Government Performance</HD>
            <SOURCE>
              <HD SOURCE="HED">Source:</HD>
              <P>71 FR 20299, Apr. 19, 2006, unless otherwise noted.</P>
            </SOURCE>
            <SECTION>
              <SECTNO>7.300</SECTNO>
              <SUBJECT>[Reserved]</SUBJECT>
            </SECTION>
            <SECTION>
              <SECTNO>7.301</SECTNO>
              <SUBJECT>Definitions.</SUBJECT>

              <P>Definitions of “inherently governmental activity” and other terms applicable to this subpart are set forth at Attachment D of the Office of Management and Budget Circular No. A-76 <PRTPAGE P="120"/>(Revised), Performance of Commercial Activities, dated May 29, 2003 (the Circular).</P>
            </SECTION>
            <SECTION>
              <SECTNO>7.302</SECTNO>
              <SUBJECT>Policy.</SUBJECT>
              <P>(a) The Circular provides that it is the policy of the Government to—</P>
              <P>(1) Perform inherently governmental activities with Government personnel; and</P>
              <P>(2) Subject commercial activities to the forces of competition.</P>
              <P>(b) As provided in the Circular, agencies shall—</P>
              <P>(1) Not use contractors to perform inherently governmental activities;</P>
              <P>(2) Conduct public-private competitions in accordance with the provisions of the Circular and, as applicable, these regulations;</P>
              <P>(3) Give appropriate consideration relative to cost when making performance decisions between agency and contractor performance in public-private competitions;</P>
              <P>(4) Consider the Agency Tender Official an interested party in accordance with 31 U.S.C. 3551 to 3553 for purposes of filing a protest at the Government Accountability Office; and</P>
              <P>(5) Hear contests in accordance with OMB Circular A-76, Attachment B, Paragraph F.</P>
              <P>(c) When using sealed bidding in public-private competitions under OMB Circular A-76, contracting officers shall not hold discussions to correct deficiencies.</P>
            </SECTION>
            <SECTION>
              <SECTNO>7.303-7.304</SECTNO>
              <RESERVED>[Reserved]</RESERVED>
            </SECTION>
            <SECTION>
              <SECTNO>7.305</SECTNO>
              <SUBJECT>Solicitation provisions and contract clause.</SUBJECT>
              <P>(a) The contracting officer shall, when soliciting offers and tenders, insert in solicitations issued for standard competitions the provision at 52.207-1, Notice of Standard Competition.</P>
              <P>(b) The contracting officer shall, when soliciting offers, insert in solicitations issued for streamlined competitions the provision at 52.207-2, Notice of Streamlined Competition.</P>
              <P>(c) The contracting officer shall insert the clause at 52.207-3, Right of First Refusal of Employment, in all solicitations which may result in a conversion from in-house performance to contract performance of work currently being performed by the Government and in contracts that result from the solicitations, whether or not a public-private competition is conducted. The 10-day period in the clause may be varied by the contracting officer up to a period of 90 days.</P>
            </SECTION>
          </SUBPART>
          <SUBPART>
            <HD SOURCE="HED">Subpart 7.4—Equipment Lease or Purchase</HD>
            <SECTION>
              <SECTNO>7.400</SECTNO>
              <SUBJECT>Scope of subpart.</SUBJECT>
              <P>This subpart provides guidance pertaining to the decision to acquire equipment by lease or purchase. It applies to both the initial acquisition of equipment and the renewal or extension of existing equipment leases.</P>
            </SECTION>
            <SECTION>
              <SECTNO>7.401</SECTNO>
              <SUBJECT>Acquisition considerations.</SUBJECT>
              <P>(a) Agencies should consider whether to lease or purchase equipment based on a case-by-case evaluation of comparative costs and other factors. The following factors are the minimum that should be considered:</P>
              <P>(1) Estimated length of the period the equipment is to be used and the extent of use within that period.</P>
              <P>(2) Financial and operating advantages of alternative types and makes of equipment.</P>
              <P>(3) Cumulative rental payments for the estimated period of use.</P>
              <P>(4) Net purchase price.</P>
              <P>(5) Transportation and installation costs.</P>
              <P>(6) Maintenance and other service costs.</P>
              <P>(7) Potential obsolescence of the equipment because of imminent technological improvements.</P>
              <P>(b) The following additional factors should be considered, as appropriate, depending on the type, cost, complexity, and estimated period of use of the equipment:</P>
              <P>(1) Availability of purchase options.</P>
              <P>(2) Potential for use of the equipment by other agencies after its use by the acquiring agency is ended.</P>
              <P>(3) Trade-in or salvage value.</P>
              <P>(4) Imputed interest.</P>
              <P>(5) Availability of a servicing capability, especially for highly complex equipment; e.g., can the equipment be serviced by the Government or other sources if it is purchased?</P>
            </SECTION>
            <SECTION>
              <PRTPAGE P="121"/>
              <SECTNO>7.402</SECTNO>
              <SUBJECT>Acquisition methods.</SUBJECT>
              <P>(a) <E T="03">Purchase method.</E> (1) Generally, the purchase method is appropriate if the equipment will be used beyond the point in time when cumulative leasing costs exceed the purchase costs.</P>
              <P>(2) Agencies should not rule out the purchase method of equipment acquisition in favor of leasing merely because of the possibility that future technological advances might make the selected equipment less desirable.</P>
              <P>(b) <E T="03">Lease method.</E> (1) The lease method is appropriate if it is to the Government's advantage under the circumstances. The lease method may also serve as an interim measure when the circumstances—</P>
              <P>(i) Require immediate use of equipment to meet program or system goals; but</P>
              <P>(ii) Do not currently support acquisition by purchase.</P>
              <P>(2) If a lease is justified, a lease with option to purchase is preferable.</P>
              <P>(3) Generally, a long term lease should be avoided, but may be appropriate if an option to purchase or other favorable terms are included.</P>
              <P>(4) If a lease with option to purchase is used, the contract shall state the purchase price or provide a formula which shows how the purchase price will be established at the time of purchase.</P>
              <CITA>[50 FR 35475, Aug. 30, 1985, as amended at 59 FR 67026, Dec. 28, 1994]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>7.403</SECTNO>
              <SUBJECT>General Services Administration assistance.</SUBJECT>
              <P>(a) When requested by an agency, the General Services Administration (GSA) will assist in lease or purchase decisions by providing information such as—</P>
              <P>(1) Pending price adjustments to Federal Supply Schedule contracts;</P>
              <P>(2) Recent or imminent technological developments;</P>
              <P>(3) New techniques; and</P>
              <P>(4) Industry or market trends.</P>
              <P>(b) Agencies may request information from the following GSA offices:</P>
              <P>(1) Center for Strategic IT Analysis (MKS), Washington, DC 20405, for information on acquisition of information technology.</P>
              <P>(2) Federal Supply Service, Office of Acquisition (FC), Washington, DC 20406, for information on other types of equipment.</P>
              <CITA>[48 FR 42124, Sept. 19, 1983, as amended at 54 FR 29280, July 11, 1989; 61 FR 41468, Aug. 8, 1996; 62 FR 40236, July 25, 1997]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>7.404</SECTNO>
              <SUBJECT>Contract clause.</SUBJECT>
              <P>The contracting officer shall insert a clause substantially the same as the clause in 52.207-5, Option to Purchase Equipment, in solicitations and contracts involving a lease with option to purchase.</P>
              <CITA>[59 FR 67026, Dec. 28, 1994]</CITA>
            </SECTION>
          </SUBPART>
          <SUBPART>
            <HD SOURCE="HED">Subpart 7.5—Inherently Governmental Functions</HD>
            <SOURCE>
              <HD SOURCE="HED">Source:</HD>
              <P>61 FR 2628, Jan. 26, 1996, unless otherwise noted.</P>
            </SOURCE>
            <SECTION>
              <SECTNO>7.500</SECTNO>
              <SUBJECT>Scope of subpart.</SUBJECT>
              <P>The purpose of this subpart is to prescribe policies and procedures to ensure that inherently governmental functions are not performed by contractors. </P>
              <CITA>[61 FR 2628, Jan. 26, 1996, as amended at 71 FR 20300, Apr. 19, 2006]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>7.501</SECTNO>
              <RESERVED>[Reserved]</RESERVED>
            </SECTION>
            <SECTION>
              <SECTNO>7.502</SECTNO>
              <SUBJECT>Applicability.</SUBJECT>
              <P>The requirements of this subpart apply to all contracts for services. This subpart does not apply to services obtained through either personnel appointments, advisory committees, or personal services contracts issued under statutory authority.</P>
            </SECTION>
            <SECTION>
              <SECTNO>7.503</SECTNO>
              <SUBJECT>Policy.</SUBJECT>
              <P>(a) Contracts shall not be used for the performance of inherently governmental functions.</P>
              <P>(b) Agency decisions which determine whether a function is or is not an inherently governmental function may be reviewed and modified by appropriate Office of Management and Budget officials.</P>
              <P>(c) The following is a list of examples of functions considered to be inherently governmental functions or which shall be treated as such. This list is not all inclusive:</P>

              <P>(1) The direct conduct of criminal investigations.<PRTPAGE P="122"/>
              </P>
              <P>(2) The control of prosecutions and performance of adjudicatory functions other than those relating to arbitration or other methods of alternative dispute resolution.</P>
              <P>(3) The command of military forces, especially the leadership of military personnel who are members of the combat, combat support, or combat service support role.</P>
              <P>(4) The conduct of foreign relations and the determination of foreign policy.</P>
              <P>(5) The determination of agency policy, such as determining the content and application of regulations, among other things.</P>
              <P>(6) The determination of Federal program priorities for budget requests.</P>
              <P>(7) The direction and control of Federal employees.</P>
              <P>(8) The direction and control of intelligence and counter-intelligence operations.</P>
              <P>(9) The selection or non-selection of individuals for Federal Government employment, including the interviewing of individuals for employment.</P>
              <P>(10) The approval of position descriptions and performance standards for Federal employees.</P>
              <P>(11) The determination of what Government property is to be disposed of and on what terms (although an agency may give contractors authority to dispose of property at prices within specified ranges and subject to other reasonable conditions deemed appropriate by the agency).</P>
              <P>(12) In Federal procurement activities with respect to prime contracts—</P>
              <P>(i) Determining what supplies or services are to be acquired by the Government (although an agency may give contractors authority to acquire supplies at prices within specified ranges and subject to other reasonable conditions deemed appropriate by the agency);</P>
              <P>(ii) Participating as a voting member on any source selection boards;</P>
              <P>(iii) Approving any contractual documents, to include documents defining requirements, incentive plans, and evaluation criteria;</P>
              <P>(iv) Awarding contracts;</P>
              <P>(v) Administering contracts (including ordering changes in contract performance or contract quantities, taking action based on evaluations of contractor performance, and accepting or rejecting contractor products or services);</P>
              <P>(vi) Terminating contracts;</P>
              <P>(vii) Determining whether contract costs are reasonable, allocable, and allowable; and</P>
              <P>(viii) Participating as a voting member on performance evaluation boards.</P>
              <P>(13) The approval of agency responses to Freedom of Information Act requests (other than routine responses that, because of statute, regulation, or agency policy, do not require the exercise of judgment in determining whether documents are to be released or withheld), and the approval of agency responses to the administrative appeals of denials of Freedom of Information Act requests.</P>
              <P>(14) The conduct of Administrative hearings to determine the eligibility of any person for a security clearance, or involving actions that affect matters of personal reputation or eligibility to participate in Government programs.</P>
              <P>(15) The approval of Federal licensing actions and inspections.</P>
              <P>(16) The determination of budget policy, guidance, and strategy.</P>
              <P>(17) The collection, control, and disbursement of fees, royalties, duties, fines, taxes, and other public funds, unless authorized by statute, such as 31 U.S.C. 952 (relating to private collection contractors) and 31 U.S.C. 3718 (relating to private attorney collection services), but not including—</P>
              <P>(i) Collection of fees, fines, penalties, costs, or other charges from visitors to or patrons of mess halls, post or base exchange concessions, national parks, and similar entities or activities, or from other persons, where the amount to be collected is easily calculated or predetermined and the funds collected can be easily controlled using standard case management techniques; and</P>
              <P>(ii) Routine voucher and invoice examination.</P>
              <P>(18) The control of the treasury accounts.</P>
              <P>(19) The administration of public trusts.</P>

              <P>(20) The drafting of Congressional testimony, responses to Congressional correspondence, or agency responses to <PRTPAGE P="123"/>audit reports from the Inspector General, the Government Accountability Office, or other Federal audit entity.</P>
              <P>(d) The following is a list of examples of functions generally not considered to be inherently governmental functions. However, certain services and actions that are not considered to be inherently governmental functions may approach being in that category because of the nature of the function, the manner in which the contractor performs the contract, or the manner in which the Government administers contractor performance. This list is not all inclusive:</P>
              <P>(1) Services that involve or relate to budget preparation, including workload modeling, fact finding, efficiency studies, and should-cost analyses, etc.</P>
              <P>(2) Services that involve or relate to reorganization and planning activities.</P>
              <P>(3) Services that involve or relate to analysis, feasibility studies, and strategy options to be used by agency personnel in developing policy.</P>
              <P>(4) Services that involve or relate to the development of regulations.</P>
              <P>(5) Services that involve or relate to the evaluation of another contractor's performance.</P>
              <P>(6) Services in support of acquisition planning.</P>
              <P>(7) Contractors providing assistance in contract management (such as where the contractor might influence official evaluations of other contractors).</P>
              <P>(8) Contractors providing technical evaluation of contract proposals.</P>
              <P>(9) Contractors providing assistance in the development of statements of work.</P>
              <P>(10) Contractors providing support in preparing responses to Freedom of Information Act requests.</P>
              <P>(11) Contractors working in any situation that permits or might permit them to gain access to confidential business information and/or any other sensitive information (other than situations covered by the National Industrial Security Program described in 4.402(b)).</P>
              <P>(12) Contractors providing information regarding agency policies or regulations, such as attending conferences on behalf of an agency, conducting community relations campaigns, or conducting agency training courses.</P>
              <P>(13) Contractors participating in any situation where it might be assumed that they are agency employees or representatives.</P>
              <P>(14) Contractors participating as technical advisors to a source selection board or participating as voting or nonvoting members of a source evaluation board.</P>
              <P>(15) Contractors serving as arbitrators or providing alternative methods of dispute resolution.</P>
              <P>(16) Contractors constructing buildings or structures intended to be secure from electronic eavesdropping or other penetration by foreign governments.</P>
              <P>(17) Contractors providing inspection services.</P>
              <P>(18) Contractors providing legal advice and interpretations of regulations and statutes to Government officials.</P>
              <P>(19) Contractors providing special non-law enforcement, security activities that do not directly involve criminal investigations, such as prisoner detention or transport and non-military national security details.</P>
              <P>(e) Agency implementation shall include procedures requiring the agency head or designated requirements official to provide the contracting officer, concurrent with transmittal of the statement of work (or any modification thereof), a written determination that none of the functions to be performed are inherently governmental. This assessment should place emphasis on the degree to which conditions and facts restrict the discretionary authority, decision-making responsibility, or accountability of Government officials using contractor services or work products. Disagreements regarding the determination will be resolved in accordance with agency procedures before issuance of a solicitation.</P>
              <CITA>[61 FR 2628, Jan. 26, 1996, as amended at 62 FR 40236, July 25, 1997; 71 FR 57380, Sept. 28, 2006]</CITA>
            </SECTION>
          </SUBPART>
        </PART>
        <PART>
          <EAR>Pt. 8</EAR>
          <HD SOURCE="HED">PART 8—REQUIRED SOURCES OF SUPPLIES AND SERVICES</HD>
          <CONTENTS>
            <SECHD>Sec.</SECHD>
            <SECTNO>8.000</SECTNO>
            <SUBJECT>Scope of part.</SUBJECT>
            <SECTNO>8.001</SECTNO>
            <SUBJECT>General.<PRTPAGE P="124"/>
            </SUBJECT>
            <SECTNO>8.002</SECTNO>
            <SUBJECT>Priorities for use of Government supply sources.</SUBJECT>
            <SECTNO>8.003</SECTNO>
            <SUBJECT>Use of other Government supply sources.</SUBJECT>
            <SECTNO>8.004</SECTNO>
            <SUBJECT>Contract clause.</SUBJECT>
            <SUBPART>
              <HD SOURCE="HED">Subpart 8.1—Excess Personal Property</HD>
              <SECTNO>8.101</SECTNO>
              <SUBJECT>[Reserved]</SUBJECT>
              <SECTNO>8.102</SECTNO>
              <SUBJECT>Policy.</SUBJECT>
              <SECTNO>8.103</SECTNO>
              <SUBJECT>Information on available excess personal property.</SUBJECT>
              <SECTNO>8.104</SECTNO>
              <SUBJECT>Obtaining nonreportable property.</SUBJECT>
            </SUBPART>
            <SUBPART>
              <RESERVED>Subparts 8.2-8.3 [Reserved]</RESERVED>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart 8.4—Federal Supply Schedules</HD>
              <SECTNO>8.401</SECTNO>
              <SUBJECT>Definitions.</SUBJECT>
              <SECTNO>8.402</SECTNO>
              <SUBJECT>General.</SUBJECT>
              <SECTNO>8.403</SECTNO>
              <SUBJECT>Applicability.</SUBJECT>
              <SECTNO>8.404</SECTNO>
              <SUBJECT>Use of Federal Supply Schedules.</SUBJECT>
              <SECTNO>8.405</SECTNO>
              <SUBJECT>Ordering procedures for Federal Supply Schedules.</SUBJECT>
              <SECTNO>8.405-1</SECTNO>
              <SUBJECT>Ordering procedures for supplies, and services not requiring a statement of work.</SUBJECT>
              <SECTNO>8.405-2</SECTNO>
              <SUBJECT>Ordering procedures for services requiring a statement of work.</SUBJECT>
              <SECTNO>8.405-3</SECTNO>
              <SUBJECT>Blanket purchase agreements (BPAs).</SUBJECT>
              <SECTNO>8.405-4</SECTNO>
              <SUBJECT>Price reductions.</SUBJECT>
              <SECTNO>8.405-5</SECTNO>
              <SUBJECT>Small business.</SUBJECT>
              <SECTNO>8.405-6</SECTNO>
              <SUBJECT>Limited sources justification and approval.</SUBJECT>
              <SECTNO>8.405-7</SECTNO>
              <SUBJECT>Payment.</SUBJECT>
              <SECTNO>8.406</SECTNO>
              <SUBJECT>Ordering activity responsibilities.</SUBJECT>
              <SECTNO>8.406-1</SECTNO>
              <SUBJECT>Order placement.</SUBJECT>
              <SECTNO>8.406-2</SECTNO>
              <SUBJECT>Inspection and acceptance.</SUBJECT>
              <SECTNO>8.406-3</SECTNO>
              <SUBJECT>Remedies for nonconformance.</SUBJECT>
              <SECTNO>8.406-4</SECTNO>
              <SUBJECT>Termination for cause.</SUBJECT>
              <SECTNO>8.406-5</SECTNO>
              <SUBJECT>Termination for the Government's convenience.</SUBJECT>
              <SECTNO>8.406-6</SECTNO>
              <SUBJECT>Disputes.</SUBJECT>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart 8.5—Acquisition of Helium</HD>
              <SECTNO>8.500</SECTNO>
              <SUBJECT>Scope of subpart.</SUBJECT>
              <SECTNO>8.501</SECTNO>
              <SUBJECT>Definitions.</SUBJECT>
              <SECTNO>8.502</SECTNO>
              <SUBJECT>Policy.</SUBJECT>
              <SECTNO>8.503</SECTNO>
              <SUBJECT>Exception.</SUBJECT>
              <SECTNO>8.504</SECTNO>
              <SUBJECT>Procedures.</SUBJECT>
              <SECTNO>8.505</SECTNO>
              <SUBJECT>Contract clause.</SUBJECT>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart 8.6—Acquisition from Federal Prison Industries, Inc.</HD>
              <SECTNO>8.601</SECTNO>
              <SUBJECT>General.</SUBJECT>
              <SECTNO>8.602</SECTNO>
              <SUBJECT>Policy.</SUBJECT>
              <SECTNO>8.603</SECTNO>
              <SUBJECT>Purchase priorities.</SUBJECT>
              <SECTNO>8.604</SECTNO>
              <SUBJECT>Waivers.</SUBJECT>
              <SECTNO>8.605</SECTNO>
              <SUBJECT>Exceptions.</SUBJECT>
              <SECTNO>8.606</SECTNO>
              <SUBJECT>Evaluating FPI performance.</SUBJECT>
              <SECTNO>8.607</SECTNO>
              <SUBJECT>Performance as a subcontractor.</SUBJECT>
              <SECTNO>8.608</SECTNO>
              <SUBJECT>Protection of classified and sensitive information.</SUBJECT>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart 8.7—Acquisition From Nonprofit Agencies Employing People Who Are Blind or Severely Disabled</HD>
              <SECTNO>8.700</SECTNO>
              <SUBJECT>Scope of subpart.</SUBJECT>
              <SECTNO>8.701</SECTNO>
              <SUBJECT>Definitions.</SUBJECT>
              <SECTNO>8.702</SECTNO>
              <SUBJECT>General.</SUBJECT>
              <SECTNO>8.703</SECTNO>
              <SUBJECT>Procurement list.</SUBJECT>
              <SECTNO>8.704</SECTNO>
              <SUBJECT>Purchase priorities.</SUBJECT>
              <SECTNO>8.705</SECTNO>
              <SUBJECT>Procedures.</SUBJECT>
              <SECTNO>8.705-1</SECTNO>
              <SUBJECT>General.</SUBJECT>
              <SECTNO>8.705-2</SECTNO>
              <SUBJECT>Direct-order process.</SUBJECT>
              <SECTNO>8.705-3</SECTNO>
              <SUBJECT>Allocation process.</SUBJECT>
              <SECTNO>8.705-4</SECTNO>
              <SUBJECT>Compliance with orders.</SUBJECT>
              <SECTNO>8.706</SECTNO>
              <SUBJECT>Purchase exceptions.</SUBJECT>
              <SECTNO>8.707</SECTNO>
              <SUBJECT>Prices.</SUBJECT>
              <SECTNO>8.708</SECTNO>
              <SUBJECT>Shipping.</SUBJECT>
              <SECTNO>8.709</SECTNO>
              <SUBJECT>Payments.</SUBJECT>
              <SECTNO>8.710</SECTNO>
              <SUBJECT>Quality of merchandise.</SUBJECT>
              <SECTNO>8.711</SECTNO>
              <SUBJECT>Quality complaints.</SUBJECT>
              <SECTNO>8.712</SECTNO>
              <SUBJECT>Specification changes.</SUBJECT>
              <SECTNO>8.713</SECTNO>
              <SUBJECT>Optional acquisition of supplies and services.</SUBJECT>
              <SECTNO>8.714</SECTNO>
              <SUBJECT>Communications with the central nonprofit agencies and the Committee.</SUBJECT>
              <SECTNO>8.715</SECTNO>
              <SUBJECT>Replacement commodities.</SUBJECT>
              <SECTNO>8.716</SECTNO>
              <SUBJECT>Change-of-name and successor in interest procedures.</SUBJECT>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart 8.8—Acquisition of Printing and Related Supplies</HD>
              <SECTNO>8.800</SECTNO>
              <SUBJECT>Scope of subpart.</SUBJECT>
              <SECTNO>8.801</SECTNO>
              <SUBJECT>Definitions.</SUBJECT>
              <SECTNO>8.802</SECTNO>
              <SUBJECT>Policy.</SUBJECT>
            </SUBPART>
            <SUBPART>
              <RESERVED>Subparts 8.9-8.10 [Reserved]</RESERVED>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart 8.11—Leasing of Motor Vehicles</HD>
              <SECTNO>8.1100</SECTNO>
              <SUBJECT>Scope of subpart.</SUBJECT>
              <SECTNO>8.1101</SECTNO>
              <SUBJECT>Definitions.</SUBJECT>
              <SECTNO>8.1102</SECTNO>
              <SUBJECT>Presolicitation requirements.</SUBJECT>
              <SECTNO>8.1103</SECTNO>
              <SUBJECT>Contract requirements.</SUBJECT>
              <SECTNO>8.1104</SECTNO>
              <SUBJECT>Contract clauses.</SUBJECT>
            </SUBPART>
          </CONTENTS>
          <AUTH>
            <HD SOURCE="HED">Authority:</HD>
            <P>40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 42 U.S.C. 2473(c).</P>
          </AUTH>
          <SOURCE>
            <HD SOURCE="HED">Source:</HD>
            <P>48 FR 42129, Sept. 19, 1983, unless otherwise noted.</P>
          </SOURCE>
          <SECTION>
            <SECTNO>8.000</SECTNO>
            <SUBJECT>Scope of part.</SUBJECT>
            <P>This part deals with the acquisition of supplies and services from or through Government supply sources.</P>
          </SECTION>
          <SECTION>
            <SECTNO>8.001</SECTNO>
            <SUBJECT>General.</SUBJECT>

            <P>Regardless of the source of supplies or services to be acquired, information technology acquisitions shall comply with capital planning and investment <PRTPAGE P="125"/>control requirements in 40 U.S.C. 11312 and OMB Circular A-130.</P>
            <CITA>[67 FR 56119, Aug. 30, 2002, as amended at 70 FR 57454, Sept. 30, 2005]</CITA>
          </SECTION>
          <SECTION>
            <SECTNO>8.002</SECTNO>
            <SUBJECT>Priorities for use of Government supply sources.</SUBJECT>
            <P>(a) Except as required by 8.003, or as otherwise provided by law, agencies shall satisfy requirements for supplies and services from or through the sources and publications listed below in descending order of priority—</P>
            <P>(1) <E T="03">Supplies.</E> (i) Agency inventories;</P>
            <P>(ii) Excess from other agencies (see subpart 8.1);</P>
            <P>(iii) Federal Prison Industries, Inc. (see subpart 8.6);</P>
            <P>(iv) Supplies which are on the Procurement List maintained by the Committee for Purchase From People Who Are Blind or Severely Disabled (see Subpart 8.7);</P>
            <P>(v) Wholesale supply sources, such as stock programs of the General Services Administration (GSA) (see 41 CFR 101-26.3), the Defense Logistics Agency (see 41 CFR 101-26.6), the Department of Veterans Affairs (see 41 CFR 101-26.704), and military inventory control points;</P>
            <P>(vi) Mandatory Federal Supply Schedules (see subpart 8.4);</P>
            <P>(vii) Optional use Federal Supply Schedules (see subpart 8.4); and</P>
            <P>(viii) Commercial sources (including educational and nonprofit institutions).</P>
            <P>(2) <E T="03">Services.</E> (i) Services which are on the Procurement List maintained by the Committee for Purchase From People Who Are Blind or Severely Disabled (see Subpart 8.7);</P>
            <P>(ii) Mandatory Federal Supply Schedules (see subpart 8.4);</P>
            <P>(iii) Optional use Federal Supply Schedules (see subpart 8.4); and</P>
            <P>(iv) Federal Prison Industries, Inc. (see subpart 8.6), or commercial sources (including educational and nonprofit institutions).</P>
            <P>(b) Sources other than those listed in paragraph (a) may be used as prescribed in 41 CFR 101-26.301 and in an unusual and compelling urgency as prescribed in 6.302-2 and in 41 CFR 101-25.101-5.</P>
            <P>(c) The statutory obligation for Government agencies to satisfy their requirements for supplies available from the Committee for Purchase From People Who Are Blind or Severely Disabled also applies when contractors purchase the supply items for Government use.</P>
            <CITA>[48 FR 42129, Sept. 19, 1983, as amended at 50 FR 1735, Jan. 11, 1985; 50 FR 52429, Dec. 23, 1985; 54 FR 29280, July 11, 1989; 56 FR 15148, Apr. 15, 1991; 59 FR 53716, Oct. 25, 1994; 59 FR 67027, Dec. 28, 1994; 61 FR 2630, Jan. 26, 1996; 66 FR 65367, Dec. 1, 2001. Redesignated and amended at 67 FR 56119, Aug. 30, 2002; 69 FR 34229, June 18, 2004]</CITA>
          </SECTION>
          <SECTION>
            <SECTNO>8.003</SECTNO>
            <SUBJECT>Use of other Government supply sources.</SUBJECT>
            <P>Agencies shall satisfy requirements for the following supplies or services from or through specified sources, as applicable:</P>
            <P>(a) Public utility services (see part 41);</P>
            <P>(b) Printing and related supplies (see subpart 8.8);</P>
            <P>(c) Leased motor vehicles (see subpart 8.11);</P>
            <P>(d) Strategic and critical materials (e.g., metals and ores) from inventories exceeding National Defense Stockpile requirements (detailed information is available from the Defense National Stockpile Center, 8725 John J. Kingman Rd., Suite 3229, Fort Belvior, VA 22060-6223; and</P>
            <P>(e) Helium (see subpart 8.5—Acquisition of Helium).</P>
            <CITA>[48 FR 42129, Sept. 19, 1983, as amended at 57 FR 60576, Dec. 21, 1992; 59 FR 67018, Dec. 28, 1994; 59 FR 67030, Dec. 28, 1994; 61 FR 41468, Aug. 8, 1996; 62 FR 235, Jan. 2, 1997. Redesignated at 67 FR 56119, Aug. 30, 2002; 69 FR 34244, June 18, 2004]</CITA>
          </SECTION>
          <SECTION>
            <SECTNO>8.004</SECTNO>
            <SUBJECT>Contract clause.</SUBJECT>

            <P>Insert the clause at 52.208-9, Contractor Use of Mandatory Sources of Supply and Services, in solicitations and contracts that require a contractor to provide supplies or services for Government use that are on the Procurement List maintained by the Committee for Purchase from People Who Are Blind or Severely Disabled. The contracting officer shall identify in the contract schedule the supplies or services that must be purchased from a <PRTPAGE P="126"/>mandatory source and the specific source.</P>
            <CITA>[66 FR 65368, Dec. 18, 2001. Redesignated and amended at 67 FR 56119, Aug. 30, 2002; 69 FR 34230, June 18, 2004]</CITA>
          </SECTION>
          <SUBPART>
            <HD SOURCE="HED">Subpart 8.1—Excess Personal Property</HD>
            <SECTION>
              <SECTNO>8.101</SECTNO>
              <RESERVED>[Reserved]</RESERVED>
            </SECTION>
            <SECTION>
              <SECTNO>8.102</SECTNO>
              <SUBJECT>Policy.</SUBJECT>
              <P>When practicable, agencies must use excess personal property as the first source of supply for agency and cost-reimbursement contractor requirements. Agency personnel must make positive efforts to satisfy agency requirements by obtaining and using excess personal property (including that suitable for adaptation or substitution) before initiating a contract action.</P>
              <CITA>[67 FR 13053, Mar. 20, 2002]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>8.103</SECTNO>
              <SUBJECT>Information on available excess personal property.</SUBJECT>
              <P>Information regarding the availability of excess personal property can be obtained through—</P>
              <P>(a) Review of excess personal property catalogs and bulletins issued by the General Services Administration (GSA);</P>
              <P>(b) Personal contact with GSA or the activity holding the property;</P>
              <P>(c) Submission of supply requirements to the regional offices of GSA (GSA Form 1539, Request for Excess Personal Property, is available for this purpose); and</P>
              <P>(d) Examination and inspection of reports and samples of excess personal property in GSA regional offices.</P>
            </SECTION>
            <SECTION>
              <SECTNO>8.104</SECTNO>
              <SUBJECT>Obtaining nonreportable property.</SUBJECT>
              <P>GSA will assist agencies in meeting their requirements for supplies of the types excepted from reporting as excess by the Federal Management Regulations (41 CFR 102-36.90). Federal agencies requiring such supplies should contact the appropriate GSA regional office.</P>
              <CITA>[48 FR 42129, Sept. 19, 1983, as amended at 69 FR 17745, Apr. 5, 2004]</CITA>
            </SECTION>
          </SUBPART>
          <SUBPART>
            <RESERVED>Subparts 8.2-8.3 [Reserved]</RESERVED>
          </SUBPART>
          <SUBPART>
            <HD SOURCE="HED">Subpart 8.4—Federal Supply Schedules</HD>
            <SOURCE>
              <HD SOURCE="HED">Source:</HD>
              <P>At 69 FR 34234, June 18, 2004, unless otherwise noted.</P>
            </SOURCE>
            <SECTION>
              <SECTNO>8.401</SECTNO>
              <SUBJECT>Definitions.</SUBJECT>
              <P>As used in this subpart—</P>
              <P>
                <E T="03">Ordering activity</E> means an activity that is authorized to place orders, or establish blanket purchase agreements (BPA), against the General Services Administration's (GSA) Multiple Award Schedule contracts. A list of eligible ordering activities is available at <E T="03">http://www.gsa.gov/schedules</E> (click “For Customers Ordering from Schedules” and then “Eligibility to Use GSA Sources”).</P>
              <P>
                <E T="03">Multiple Award Schedule (MAS)</E> means contracts awarded by GSA or the Department of Veterans Affairs (VA) for similar or comparable supplies, or services, established with more than one supplier, at varying prices. The primary statutory authorities for the MAS program are Title III of the Federal Property and Administrative Services Act of 1949 (41 U.S.C. 251, <E T="03">et seq.</E>) and Title 40 U.S.C. 501, Services for Executive Agencies.</P>
              <P>
                <E T="03">Requiring agency</E> means the agency needing the supplies or services.</P>
              <P>
                <E T="03">Schedules e-Library</E> means the on-line source for GSA and VA Federal Supply Schedule contract award information. Schedules e-Library may be accessed at <E T="03">http://www.gsa.gov/elibrary</E>.</P>
              <P>
                <E T="03">Special Item Number (SIN)</E> means a group of generically similar (but not identical) supplies or services that are intended to serve the same general purpose or function.</P>
              <CITA>[69 FR 34234, June 18, 2004, as amended at 70 FR 43578, July 27, 2005]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>8.402</SECTNO>
              <SUBJECT>General.</SUBJECT>

              <P>(a) The Federal Supply Schedule program is also known as the GSA Schedules Program or the Multiple Award Schedule Program. The Federal Supply Schedule program is directed and managed by GSA and provides Federal agencies (see 8.002) with a simplified process for obtaining commercial supplies and services at prices associated with volume buying. Indefinite delivery contracts are awarded to provide <PRTPAGE P="127"/>supplies and services at stated prices for given periods of time. GSA may delegate certain responsibilities to other agencies (<E T="03">e.g.</E>, GSA has delegated authority to the VA to procure medical supplies under the VA Federal Supply Schedules program). Orders issued under the VA Federal Supply Schedule program are covered by this subpart. Additionally, the Department of Defense (DoD) manages similar systems of schedule-type contracting for military items; however, DoD systems are not covered by this subpart.</P>

              <P>(b) GSA schedule contracts require all schedule contractors to publish an “Authorized Federal Supply Schedule Pricelist” (pricelist). The pricelist contains all supplies and services offered by a schedule contractor. In addition, each pricelist contains the pricing and the terms and conditions pertaining to each Special Item Number that is on schedule. The schedule contractor is required to provide one copy of its pricelist to any ordering activity upon request. Also, a copy of the pricelist may be obtained from the Federal Supply Service by submitting a written e-mail request to <E T="03">schedules.infocenter@gsa.gov</E> or by telephone at 1-800-488-3111. This subpart, together with the pricelists, contain necessary information for placing delivery or task orders with schedule contractors. In addition, the GSA schedule contracting office issues Federal Supply Schedules publications that contain a general overview of the Federal Supply Schedule (FSS) program and address pertinent topics. Ordering activities may request copies of schedules publications by contacting the Centralized Mailing List Service through the Internet at <E T="03">http://www.gsa.gov/cmls</E>, submitting written e-mail requests to <E T="03">CMLS@gsa.gov</E>; or by completing GSA Form 457, FSS Publications Mailing List Application, and mailing it to the GSA Centralized Mailing List Service (7SM), P.O. Box 6477, Fort Worth, TX 76115. Copies of GSA Form 457 may also be obtained from the above-referenced points of contact.</P>

              <P>(c)(1) GSA offers an on-line shopping service called “GSA Advantage!” through which ordering activities may place orders against Schedules. (Ordering activities may also use GSA Advantage! to place orders through GSA's Global Supply System, a GSA wholesale supply source, formerly known as “GSA Stock” or the “Customer Supply Center.” FAR Subpart 8.4 is not applicable to orders placed through the GSA Global Supply System.) Ordering activities may access GSA Advantage! through the GSA Federal Supply Service Home Page (<E T="03">http://www.gsa.gov/fss</E>) or the GSA Federal Supply Schedule Home Page at <E T="03">http://www.gsa.gov/schedules</E>.</P>

              <P>(2) GSA Advantage! enables ordering activities to search specific information (<E T="03">i.e.</E>, national stock number, part number, common name), review delivery options, place orders directly with Schedule contractors (except see 8.405-6) and pay for orders using the Governmentwide commercial purchase card.</P>
              <P>(d) <E T="03">e-Buy</E>, GSA's electronic Request for Quotation (RFQ) system, is a part of a suite of on-line tools which complement GSA Advantage!. E-Buy allows ordering activities to post requirements, obtain quotes, and issue orders electronically. Ordering activities shall post an RFQ to e-Buy when an order contains brand name specifications (see 8.405-6). Ordering activities may access e-Buy at <E T="03">http://www.ebuy.gsa.gov.</E> For more information or assistance on either GSA Advantage! or e-Buy, contact GSA at Internet e-mail address <E T="03">gsa.advantage@gsa.gov.</E>
              </P>

              <P>(e) For more information or assistance regarding the Federal Supply Schedule Program, review the following Web site: <E T="03">http://www.gsa.gov/schedules.</E> Additionally, for on-line training courses regarding the Schedules Program, review the following Web site: <E T="03">http://fsstraining.gsa.gov.</E>
              </P>
              <P>(f) For administrative convenience, an ordering activity contracting officer may add items not on the Federal Supply Schedule (also referred to as open market items) to a Federal Supply Schedule blanket purchase agreement (BPA) or an individual task or delivery order only if—</P>

              <P>(1) All applicable acquisition regulations pertaining to the purchase of the items not on the Federal Supply Schedule have been followed (<E T="03">e.g.</E>, publicizing (Part 5), competition requirements (Part 6), acquisition of commercial items (Part 12), contracting methods <PRTPAGE P="128"/>(Parts 13, 14, and 15), and small business programs (Part 19));</P>
              <P>(2) The ordering activity contracting officer has determined the price for the items not on the Federal Supply Schedule is fair and reasonable;</P>
              <P>(3) The items are clearly labeled on the order as items not on the Federal Supply Schedule; and</P>
              <P>(4) All clauses applicable to items not on the Federal Supply Schedule are included in the order.</P>
              <CITA>[69 FR 34234, June 18, 2004, as amended at 71 FR 57359, Sept. 28, 2006]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>8.403</SECTNO>
              <SUBJECT>Applicability.</SUBJECT>
              <P>(a) Procedures in this subpart apply to—</P>
              <P>(1) Individual orders for supplies or services placed against Federal Supply Schedules contracts; and</P>
              <P>(2) BPAs established against Federal Supply Schedule contracts.</P>
              <P>(b) GSA may establish special ordering procedures for a particular schedule. In this case, that schedule will specify those special ordering procedures. Unless otherwise noted, special ordering procedures established for a Federal Supply Schedule take precedence over the procedures in 8.405.</P>
              <P>(c) In accordance with section 1427(b) of Public Law 108-136, for requirements that substantially or to a dominant extent specify performance of architect-engineer services (as defined in 2.101), agencies—</P>
              <P>(1) Shall use the procedures at Subpart 36.6; and</P>
              <P>(2) Shall not place orders for such requirements under a Federal Supply Schedule.</P>
              <CITA>[69 FR 34234, June 18, 2004, as amended at 70 FR 11738, Mar. 9, 2005]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>8.404</SECTNO>
              <SUBJECT>Use of Federal Supply Schedules.</SUBJECT>
              <P>(a) <E T="03">General</E>. Parts 13 (except 13.303-2(c)(3)), 14, 15, and 19 (except for the requirement at 19.202-1(e)(1)(iii)) do not apply to BPAs or orders placed against Federal Supply Schedules contracts (but see 8.405-5). BPAs and orders placed against a MAS, using the procedures in this subpart, are considered to be issued using full and open competition (see 6.102(d)(3)). Therefore, when establishing a BPA (as authorized by 13.303-2(c)(3)), or placing orders under Federal Supply Schedule contracts using the procedures of 8.405, ordering activities shall not seek competition outside of the Federal Supply Schedules or synopsize the requirement.</P>
              <P>(b) The contracting officer, when placing an order or establishing a BPA, is responsible for applying the regulatory and statutory requirements applicable to the agency for which the order is placed or the BPA is established. The requiring agency shall provide the information on the applicable regulatory and statutory requirements to the contracting officer responsible for placing the order.</P>
              <P>(c) <E T="03">Acquisition planning</E>. Orders placed under a Federal Supply Schedule contract—</P>
              <P>(1) Are not exempt from the development of acquisition plans (see subpart 7.1), and an information technology acquisition strategy (see Part 39);</P>
              <P>(2) Must comply with all FAR requirements for a bundled contract when the order meets the definition of “bundled contract” (see 2.101(b)); and</P>
              <P>(3) Must, whether placed by the requiring agency, or on behalf of the requiring agency, be consistent with the requiring agency's statutory and regulatory requirements applicable to the acquisition of the supply or service.</P>
              <P>(d) <E T="03">Pricing</E>. Supplies offered on the schedule are listed at fixed prices. Services offered on the schedule are priced either at hourly rates, or at a fixed price for performance of a specific task (<E T="03">e.g.</E>, installation, maintenance, and repair). GSA has already determined the prices of supplies and fixed-price services, and rates for services offered at hourly rates, under schedule contracts to be fair and reasonable. Therefore, ordering activities are not required to make a separate determination of fair and reasonable pricing, except for a price evaluation as required by 8.405-2(d). By placing an order against a schedule contract using the procedures in 8.405, the ordering activity has concluded that the order represents the best value (as defined in FAR 2.101) and results in the lowest overall cost alternative (considering price, special features, administrative costs, etc.) to meet the Government's <PRTPAGE P="129"/>needs. Although GSA has already negotiated fair and reasonable pricing, ordering activities may seek additional discounts before placing an order (see 8.405-4).</P>
            </SECTION>
            <SECTION>
              <SECTNO>8.405</SECTNO>
              <SUBJECT>Ordering procedures for Federal Supply Schedules.</SUBJECT>
              <P>Ordering activities shall use the ordering procedures of this section when placing an order or establishing a BPA for supplies or services. The procedures in this section apply to all schedules.</P>
            </SECTION>
            <SECTION>
              <SECTNO>8.405-1</SECTNO>
              <SUBJECT>Ordering procedures for supplies, and services not requiring a statement of work.</SUBJECT>

              <P>(a) Ordering activities shall use the procedures of this subsection when ordering supplies and services that are listed in the schedules contracts at a fixed price for the performance of a specific task, where a statement of work is not required (<E T="03">e.g.</E>, installation, maintenance, and repair).</P>
              <P>(b) <E T="03">Orders at or below the micro-purchase threshold</E>. Ordering activities may place orders at, or below, the micro-purchase threshold with any Federal Supply Schedule contractor that can meet the agency's needs. Although not required to solicit from a specific number of schedule contractors, ordering activities should attempt to distribute orders among contractors.</P>
              <P>(c) <E T="03">Orders exceeding the micro-purchase threshold but not exceeding the maximum order threshold</E>. (1) Ordering activities shall place orders with the schedule contractor that can provide the supply or service that represents the best value. Before placing an order, an ordering activity shall consider reasonably available information about the supply or service offered under MAS contracts by surveying at least three schedule contractors through the GSA Advantage! on-line shopping service, or by reviewing the catalogs or pricelists of at least three schedule contractors (see 8.405-5).</P>
              <P>(2) When an order contains brand name specifications, the contracting officer shall post the Request for Quote (RFQ) along with the justification or documentation as required by 8.405-6.</P>
              <P>(3) In addition to price, when determining best value, the ordering activity may consider, among other factors, the following:</P>
              <P>(i) Past performance.</P>
              <P>(ii) Special features of the supply or service required for effective program performance.</P>
              <P>(iii) Trade-in considerations.</P>
              <P>(iv) Probable life of the item selected as compared with that of a comparable item.</P>
              <P>(v) Warranty considerations.</P>
              <P>(vi) Maintenance availability.</P>
              <P>(vii) Environmental and energy efficiency considerations.</P>
              <P>(viii) Delivery terms.</P>
              <P>(d) <E T="03">Orders exceeding the maximum order threshold.</E> Each schedule contract has a maximum order threshold established on a SIN-by-SIN basis. Although a price reduction may be sought at any time, this threshold represents the point where, given the dollar value of the potential order, the ordering activity shall seek a price reduction. In addition to following the procedures in paragraph (c) of this section and before placing an order that exceeds the maximum order threshold or establishing a BPA (see 8.405-3), ordering activities shall—</P>
              <P>(1) Review (except see (c)(2) of this subsection) the pricelists of additional schedule contractors (the GSA Advantage! on-line shopping service can be used to facilitate this review);</P>
              <P>(2) Based upon the initial evaluation, seek price reductions from the schedule contractor(s) considered to offer the best value (see 8.404(d)); and</P>
              <P>(3) After seeking price reductions (see 8.405-4), place the order with the schedule contractor that provides the best value. If further price reductions are not offered, an order may still be placed.</P>
              <P>(e) <E T="03">Minimum documentation.</E> The ordering activity shall document—</P>
              <P>(1) The schedule contracts considered, noting the contractor from which the supply or service was purchased;</P>
              <P>(2) A description of the supply or service purchased; and</P>
              <P>(3) The amount paid.</P>
              <CITA>[69 FR 34234, June 18, 2004, as amended at 70 FR 43578, July 27, 2005; 71 FR 57359, Sept. 28, 2006]</CITA>
            </SECTION>
            <SECTION>
              <PRTPAGE P="130"/>
              <SECTNO>8.405-2</SECTNO>
              <SUBJECT>Ordering procedures for services requiring a statement of work.</SUBJECT>
              <P>(a) <E T="03">General.</E> Ordering activities shall use the procedures in this subsection when ordering services priced at hourly rates as established by the schedule contracts. The applicable services will be identified in the Federal Supply Schedule publications and the contractor's pricelists.</P>
              <P>(b) <E T="03">Statements of Work (SOWs).</E> All Statements of Work shall include the work to be performed; location of work; period of performance; deliverable schedule; applicable performance standards; and any special requirements (<E T="03">e.g.</E>, security clearances, travel, special knowledge). To the maximum extent practicable, agency requirements shall be performance-based statements (see subpart 37.6).</P>
              <P>(c) <E T="03">Request for Quotation procedures.</E> The ordering activity must provide the Request for Quotation (RFQ), which includes the statement of work and evaluation criteria (<E T="03">e.g.</E>, experience and past performance), to schedule contractors that offer services that will meet the agency's needs. The RFQ may be posted to GSA's electronic RFQ system, e-Buy (see 8.402(d)).</P>
              <P>(1) <E T="03">Orders at, or below, the micro-purchase threshold.</E> Ordering activities may place orders at, or below, the micro-purchase threshold with any Federal Supply Schedule contractor that can meet the agency's needs. The ordering activity should attempt to distribute orders among contractors.</P>
              <P>(2) <E T="03">For orders exceeding the micro-purchase threshold, but not exceeding the maximum order threshold.</E> (i) The ordering activity shall develop a statement of work, in accordance with 8.405-2(b).</P>
              <P>(ii) The ordering activity shall provide the RFQ (including the statement of work and evaluation criteria) to at least three schedule contractors that offer services that will meet the agency's needs.</P>
              <P>(iii) The ordering activity should request that contractors submit firm-fixed prices to perform the services identified in the statement of work.</P>
              <P>(3) <E T="03">For proposed orders exceeding the maximum order threshold or when establishing a BPA.</E> In addition to meeting the requirements of 8.405-2(c)(2), the ordering activity shall—</P>
              <P>(i) Provide the RFQ (including the statement of work and evaluation criteria) to additional schedule contractors that offer services that will meet the needs of the ordering activity. When determining the appropriate number of additional schedule contractors, the ordering activity may consider, among other factors, the following:</P>
              <P>(A) The complexity, scope and estimated value of the requirement.</P>
              <P>(B) The market search results.</P>
              <P>(ii) Seek price reductions.</P>
              <P>(4) The ordering activity shall provide the RFQ (including the statement of work and the evaluation criteria) to any schedule contractor who requests a copy of it.</P>
              <P>(d) <E T="03">Evaluation.</E> The ordering activity shall evaluate all responses received using the evaluation criteria provided to the schedule contractors. The ordering activity is responsible for considering the level of effort and the mix of labor proposed to perform a specific task being ordered, and for determining that the total price is reasonable. Place the order, or establish the BPA, with the schedule contractor that represents the best value (see 8.404(d)). After award, ordering activities should provide timely notification to unsuccessful offerors. If an unsuccessful offeror requests information on an award that was based on factors other than price alone, a brief explanation of the basis for the award decision shall be provided.</P>
              <P>(e) <E T="03">Minimum documentation.</E> The ordering activity shall document—</P>
              <P>(1) The schedule contracts considered, noting the contractor from which the service was purchased;</P>
              <P>(2) A description of the service purchased;</P>
              <P>(3) The amount paid;</P>
              <P>(4) The evaluation methodology used in selecting the contractor to receive the order;</P>
              <P>(5) The rationale for any tradeoffs in making the selection;</P>
              <P>(6) The price reasonableness determination required by paragraph (d) of this subsection; and</P>
              <P>(7) The rationale for using other than—</P>
              <P>(i) A firm-fixed price order; or<PRTPAGE P="131"/>
              </P>
              <P>(ii) A performance-based order.</P>
              <CITA>[69 FR 34234, June 18, 2004, as amended at 70 FR 43579, July 27, 2005]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>8.405-3</SECTNO>
              <SUBJECT>Blanket purchase agreements (BPAs).</SUBJECT>
              <P>(a)(1) <E T="03">Establishment.</E> Ordering activities may establish BPAs under any schedule contract to fill repetitive needs for supplies or services. BPAs may be established with one or more schedule contractors. The number of BPAs to be established is within the discretion of the ordering activity establishing the BPAs and should be based on a strategy that is expected to maximize the effectiveness of the BPA(s). In determining how many BPAs to establish, consider—</P>
              <P>(i) The scope and complexity of the requirement(s);</P>
              <P>(ii) The need to periodically compare multiple technical approaches or prices;</P>
              <P>(iii) The administrative costs of BPAs; and</P>
              <P>(iv) The technical qualifications of the schedule contractor(s).</P>

              <P>(2) Establishment of a single BPA, or multiple BPAs, shall be made using the same procedures outlined in 8.405-1 or 8.405-2. BPAs shall address the frequency of ordering, invoicing, discounts, requirements (<E T="03">e.g.</E> estimated quantities, work to be performed), delivery locations, and time.</P>
              <P>(3) When establishing multiple BPAs, the ordering activity shall specify the procedures for placing orders under the BPAs.</P>
              <P>(4) Establishment of a multi-agency BPA against a Federal Supply Schedule contract is permitted if the multi-agency BPA identifies the participating agencies and their estimated requirements at the time the BPA is established.</P>
              <P>(b) <E T="03">Ordering from BPAs</E>—(1) <E T="03">Single BPA.</E> If the ordering activity establishes one BPA, authorized users may place the order directly under the established BPA when the need for the supply or service arises.</P>
              <P>(2) <E T="03">Multiple BPAs.</E> If the ordering activity establishes multiple BPAs, before placing an order exceeding the micro-purchase threshold, the ordering activity shall—</P>
              <P>(i) Forward the requirement, or statement of work and the evaluation criteria, to an appropriate number of BPA holders, as established in the BPA ordering procedures; and</P>
              <P>(ii) Evaluate the responses received, make a best value determination (see 8.404(d)), and place the order with the BPA holder that represents the best value.</P>
              <P>(3) <E T="03">BPAs for hourly rate services.</E> If the BPA is for hourly rate services, the ordering activity shall develop a statement of work for requirements covered by the BPA. All orders under the BPA shall specify a price for the performance of the tasks identified in the statement of work.</P>
              <P>(c) <E T="03">Duration of BPAs.</E> BPAs generally should not exceed five years in length, but may do so to meet program requirements. Contractors may be awarded BPAs that extend beyond the current term of their GSA Schedule contract, so long as there are option periods in their GSA Schedule contract that, if exercised, will cover the BPA's period of performance.</P>
              <P>(d) <E T="03">Review of BPAs.</E> (1) The ordering activity that established the BPA shall review it at least once a year to determine whether—</P>
              <P>(i) The schedule contract, upon which the BPA was established, is still in effect;</P>
              <P>(ii) The BPA still represents the best value (see 8.404(d)); and</P>
              <P>(iii) Estimated quantities/amounts have been exceeded and additional price reductions can be obtained.</P>
              <P>(2) The ordering activity shall document the results of its review.</P>
              <CITA>[69 FR 34234, June 18, 2004, as amended at 70 FR 43579, July 27, 2005]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>8.405-4</SECTNO>
              <SUBJECT>Price reductions.</SUBJECT>

              <P>In addition to seeking price reductions before placing an order exceeding the maximum order threshold (see 8.405-1(d)), or in conjunction with the annual BPA review, there may be other reasons to request a price reduction. For example, ordering activities should seek a price reduction when the supply or service is available elsewhere at a lower price, or when establishing a BPA to fill recurring requirements. The potential volume of orders under <PRTPAGE P="132"/>BPAs, regardless of the size of individual orders, offers the opportunity to secure greater discounts. Schedule contractors are not required to pass on to all schedule users a price reduction extended only to an individual ordering activity for a specific order.</P>
            </SECTION>
            <SECTION>
              <SECTNO>8.405-5</SECTNO>
              <SUBJECT>Small business.</SUBJECT>
              <P>(a) Although the mandatory preference programs of Part 19 do not apply, orders placed against schedule contracts may be credited toward the ordering activity's small business goals. For purposes of reporting an order placed with a small business schedule contractor, an ordering agency may only take credit if the awardee meets a size standard that corresponds to the work performed. Ordering activities should rely on the small business representations made by schedule contractors at the contract level.</P>

              <P>(b) Ordering activities may consider socio-economic status when identifying contractor(s) for consideration or competition for award of an order or BPA. At a minimum, ordering activities should consider, if available, at least one small business, veteran-owned small business, service disabled veteran-owned small business, HUBZone small business, women-owned small business, or small disadvantaged business schedule contractor(s). GSA Advantage! and Schedules e-Library at <E T="03">http://www.gsa.gov/fss</E> contain information on the small business representations of Schedule contractors.</P>
              <P>(c) For orders exceeding the micro-purchase threshold, ordering activities should give preference to the items of small business concerns when two or more items at the same delivered price will satisfy the requirement.</P>
            </SECTION>
            <SECTION>
              <SECTNO>8.405-6</SECTNO>
              <SUBJECT>Limited sources justification and approval.</SUBJECT>
              <P>(a) Orders placed under Federal Supply Schedules are exempt from the requirements in Part 6. However, an ordering activity must justify its action when restricting consideration—</P>
              <P>(1) Of schedule contractors to fewer than required in 8.405-1 or 8.405-2; or</P>
              <P>(2) To an item peculiar to one manufacturer (<E T="03">e.g.</E>, a particular brand name, product, or a feature of a product, peculiar to one manufacturer). A brand name item, whether available on one or more schedule contracts, is an item peculiar to one manufacturer. Brand name specifications shall not be used unless the particular brand name, product, or feature is essential to the Government's requirements, and market research indicates other companies' similar products, or products lacking the particular feature, do not meet, or cannot be modified to meet, the agency's needs.</P>
              <P>(b) Circumstances that may justify restriction cited in paragraph (a)(1) of this subsection include—</P>
              <P>(1) Only one source is capable of responding due to the unique or specialized nature of the work;</P>
              <P>(2) The new work is a logical follow-on to an original Federal Supply Schedule order provided that the original order was placed in accordance with the applicable Federal Supply Schedule ordering procedures. The original order must not have been previously issued under sole source or limited source procedures;</P>
              <P>(3) An urgent and compelling need exists, and following the ordering procedures would result in unacceptable delays.</P>
              <P>(c) Ordering activities shall procure such requirements only if the need to do so is justified in writing and approved at the levels specified in paragraphs (f) and (h) of this subsection.</P>

              <P>(d) Except as provided in paragraph (e) of this subsection, when an order contains brand name specifications, the ordering activity shall post the following information along with the Request for Quotation (RFQ) to e-Buy (<E T="03">http://www.ebuy.gsa.gov</E>):</P>
              <P>(1) For proposed orders exceeding $25,000, but not exceeding the simplified acquisition threshold, the documentation required by paragraph (f) of this subsection.</P>
              <P>(2) For proposed orders exceeding the simplified acquisition threshold, the justification required by paragraph (g) of this subsection.</P>
              <P>(e) The posting requirement of paragraph (d) of this subsection does not apply when—</P>

              <P>(1) Disclosure would compromise the national security (<E T="03">e.g.</E>, would result in disclosure of classified information) or create other security risks. The fact <PRTPAGE P="133"/>that access to classified matter may be necessary to submit a proposal or perform the contract does not, in itself, justify use of this exception;</P>
              <P>(2) The nature of the file (<E T="03">e.g.</E>, size, format) does not make it cost-effective or practicable for contracting officers to provide access through e-Buy; or</P>
              <P>(3) The agency's senior procurement executive makes a written determination that access through e-Buy is not in the Government's interest.</P>
              <P>(f) <E T="03">Orders exceeding the micro-purchase threshold, but not exceeding the simplified acquisition threshold as defined in 2.101.</E> For proposed orders exceeding the micro-purchase threshold, but not exceeding the simplified acquisition threshold, the ordering activity contracting officer shall document the circumstances when restricting consideration.</P>
              <P>(g) <E T="03">Orders exceeding the simplified acquisition threshold.</E> (1) For proposed orders exceeding the simplified acquisition threshold, the requiring activity shall assist the ordering activity contracting officer in the preparation of the justification. The justification shall cite that the acquisition is conducted under the authority of the Multiple Award Schedule Program (see 8.401).</P>
              <P>(2) As a minimum, each justification shall include the following information:</P>
              <P>(i) Identification of the agency and the contracting activity, and specific identification of the document as a “Limited Source Justification.”</P>
              <P>(ii) Nature and/or description of the action being approved.</P>
              <P>(iii) A description of the supplies or services required to meet the agency's needs (including the estimated value).</P>
              <P>(iv) Identification of the justification rationale (see 8.405-6(a) and (b)) and, if applicable, a demonstration of the proposed contractor's unique qualifications to provide the required supply or service.</P>
              <P>(v) A determination by the ordering activity contracting officer that the order represents the best value consistent with 8.404(d).</P>
              <P>(vi) A description of the market research conducted among schedule holders and the results or a statement of the reason market research was not conducted.</P>
              <P>(vii) Any other facts supporting the justification.</P>
              <P>(viii) A statement of the actions, if any, the agency may take to remove or overcome any barriers that led to the restricted consideration before any subsequent acquisition for the supplies or services is made.</P>
              <P>(ix) The ordering activity contracting officer's certification that the justification is accurate and complete to the best of the contracting officer's knowledge and belief.</P>

              <P>(x) Evidence that any supporting data that is the responsibility of technical or requirements personnel (<E T="03">e.g.,</E> verifying the Government's minimum needs or requirements or other rationale for limited sources) and which form a basis for the justification have been certified as complete and accurate by the technical or requirements personnel.</P>
              <P>(h) <E T="03">Justification approvals.</E> (1) For proposed orders exceeding the simplified acquisition threshold, but not exceeding $550,000, the ordering activity contracting officer's certification that the justification is accurate and complete to the best of the ordering activity contracting officer's knowledge and belief will serve as approval, unless a higher approval level is established in accordance with agency procedures.</P>
              <P>(2) For a proposed order exceeding $550,000, but not exceeding $11.5 million, the justification must be approved by the competition advocate of the activity placing the order, or by an official named in paragraph (h)(3) or (h)(4) of this subsection. This authority is not delegable.</P>
              <P>(3) For a proposed order exceeding $11.5 million, but not exceeding $57 million (or, for DoD, NASA, and the Coast Guard, not exceeding $78.5 million), the justification must be approved by—</P>
              <P>(i) The head of the procuring activity placing the order;</P>
              <P>(ii) A designee who—</P>
              <P>(A) If a member of the armed forces, is a general or flag officer;</P>

              <P>(B) If a civilian, is serving in a position in a grade above GS-15 under the General Schedule (or in a comparable or higher position under another schedule); or<PRTPAGE P="134"/>
              </P>
              <P>(iii) An official named in paragraph (h)(4) of this subsection.</P>
              <P>(4) For a proposed order exceeding $57 million (or, for DoD, NASA, and the Coast Guard, over $78.5 million), the justification must be approved by the senior procurement executive of the agency placing the order. This authority is not delegable, except in the case of the Under Secretary of Defense for Acquisition, Technology, and Logistics, acting as the senior procurement executive for the Department of Defense.</P>
              <CITA>[69 FR 34234, June 18, 2004, as amended at 70 FR 43579, July 27, 2005; 71 FR 57359, 57366, Sept. 28, 2006]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>8.405-7</SECTNO>
              <SUBJECT>Payment.</SUBJECT>
              <P>Agencies may make payments for oral or written orders by any authorized means, including the Governmentwide commercial purchase card.</P>
              <CITA>[69 FR 34234, June 18, 2004. Redesignated at 70 FR 43580, July 27, 2005]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>8.406</SECTNO>
              <SUBJECT>Ordering activity responsibilities.</SUBJECT>
            </SECTION>
            <SECTION>
              <SECTNO>8.406-1</SECTNO>
              <SUBJECT>Order placement.</SUBJECT>
              <P>Ordering activities may place orders orally (except for services requiring a statement of work (SOW) or orders containing brand name specifications that exceed $25,000) or use Optional Form 347, an agency-prescribed form, or an established electronic communications format to order supplies or services from schedule contracts. The ordering activity shall place an order directly with the contractor in accordance with the terms and conditions of the pricelists (see 8.402(b)). Prior to placement of the order, the ordering activity shall ensure that the regulatory and statutory requirements of the requiring agency have been applied. Orders shall include the following information in addition to any information required by the schedule contract:</P>
              <P>(a) Complete shipping and billing addresses.</P>
              <P>(b) Contract number and date.</P>
              <P>(c) Agency order number.</P>
              <P>(d) F.o.b. delivery point; <E T="03">i.e.</E>, origin or destination.</P>
              <P>(e) Discount terms.</P>
              <P>(f) Delivery time or period of performance.</P>
              <P>(g) Special item number or national stock number.</P>
              <P>(h) A statement of work for services, when required, or a brief, complete description of each item (when ordering by model number, features and options such as color, finish, and electrical characteristics, if available, must be specified).</P>
              <P>(i) Quantity and any variation in quantity.</P>
              <P>(j) Number of units.</P>
              <P>(k) Unit price.</P>
              <P>(l) Total price of order.</P>
              <P>(m) Points of inspection and acceptance.</P>
              <P>(n) Other pertinent data; <E T="03">e.g.</E>, delivery instructions or receiving hours and size-of-truck limitation.</P>
              <P>(o) Marking requirements.</P>
              <P>(p) Level of preservation, packaging, and packing.</P>
              <CITA>[69 FR 34234, June 18, 2004, as amended at 71 FR 57360, Sept. 28, 2006]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>8.406-2</SECTNO>
              <SUBJECT>Inspection and acceptance.</SUBJECT>
              <P>(a) <E T="03">Supplies.</E> (1) Consignees shall inspect supplies at destination except when—</P>
              <P>(i) The schedule contract indicates that mandatory source inspection is required by the schedule contracting agency; or</P>
              <P>(ii) A schedule item is covered by a product description, and the ordering activity determines that the schedule contracting agency's inspection assistance is needed (based on the ordering volume, the complexity of the supplies, or the past performance of the supplier).</P>
              <P>(2) When the schedule contracting agency performs the inspection, the ordering activity will provide two copies of the order specifying source inspection to the schedule contracting agency. The schedule contracting agency will notify the ordering activity of acceptance or rejection of the supplies.</P>

              <P>(3) Material inspected at source by the schedule contracting agency, and determined to conform with the product description of the schedule, shall not be reinspected for the same purpose. The consignee shall limit inspection to kind, count, and condition on receipt.<PRTPAGE P="135"/>
              </P>
              <P>(4) Unless otherwise provided in the schedule contract, acceptance is conclusive, except as regards latent defects, fraud, or such gross mistakes as amount to fraud.</P>
              <P>(b) <E T="03">Services.</E> The ordering activity has the right to inspect all services in accordance with the contract requirements and as called for by the order. The ordering activity shall perform inspections and tests as specified in the order's quality assurance surveillance plan in a manner that will not unduly delay the work.</P>
            </SECTION>
            <SECTION>
              <SECTNO>8.406-3</SECTNO>
              <SUBJECT>Remedies for nonconformance.</SUBJECT>
              <P>(a) If a contractor delivers a supply or service, but it does not conform to the order requirements, the ordering activity shall take appropriate action in accordance with the inspection and acceptance clause of the contract, as supplemented by the order.</P>
              <P>(b) If the contractor fails to perform an order, or take appropriate corrective action, the ordering activity may terminate the order for cause or modify the order to establish a new delivery date (after obtaining consideration, as appropriate). Ordering activities shall follow the procedures at 8.406-4 when terminating an order for cause.</P>
            </SECTION>
            <SECTION>
              <SECTNO>8.406-4</SECTNO>
              <SUBJECT>Termination for cause.</SUBJECT>
              <P>(a)(1) An ordering activity contracting officer may terminate individual orders for cause. Termination for cause shall comply with FAR 12.403, and may include charging the contractor with excess costs resulting from repurchase.</P>
              <P>(2) The schedule contracting office shall be notified of all instances where an ordering activity contracting officer has terminated for cause an individual order to a Federal Supply Schedule contractor, or if fraud is suspected.</P>
              <P>(b) If the contractor asserts that the failure was excusable, the ordering activity contracting officer shall follow the procedures at 8.406-6, as appropriate.</P>
              <P>(c) If the contractor is charged excess costs, the following apply:</P>

              <P>(1) Any repurchase shall be made at as low a price as reasonable, considering the quality required by the Government, delivery requirement, and administrative expenses. Copies of all repurchase orders, except the copy furnished to the contractor or any other commercial concern, shall include the notation:
              </P>
              <EXTRACT>
                <FP>Repurchase against the account of ____ [<E T="03">insert contractor's name</E>] under Order ____ [<E T="03">insert number</E>] under Contract ____ [<E T="03">insert number</E>].</FP>
              </EXTRACT>
              
              <P>(2) When excess costs are anticipated, the ordering activity may withhold funds due the contractor as offset security. Ordering activities shall minimize excess costs to be charged against the contractor and collect or set-off any excess costs owed.</P>
              <P>(3) If an ordering activity is unable to collect excess repurchase costs, it shall notify the schedule contracting office after final payment to the contractor.</P>
              <P>(i) The notice shall include the following information about the terminated order:</P>
              <P>(A) Name and address of the contractor.</P>
              <P>(B) Schedule, contract, and order number.</P>
              <P>(C) National stock or special item number(s), and a brief description of the item(s).</P>
              <P>(D) Cost of schedule items involved.</P>
              <P>(E) Excess costs to be collected.</P>
              <P>(F) Other pertinent data.</P>
              <P>(ii) The notice shall also include the following information about the purchase contract:</P>
              <P>(A) Name and address of the contractor.</P>
              <P>(B) Item repurchase cost.</P>
              <P>(C) Repurchase order number and date of payment.</P>
              <P>(D) Contract number, if any.</P>
              <P>(E) Other pertinent data.</P>
              <P>(d) Only the schedule contracting officer may modify the contract to terminate for cause any, or all, supplies or services covered by the schedule contract. If the schedule contracting officer has terminated any supplies or services covered by the schedule contract, no further orders may be placed for those items. Orders placed prior to termination for cause shall be fulfilled by the contractor, unless terminated for the convenience of the Government by the ordering activity contracting officer.</P>
            </SECTION>
            <SECTION>
              <PRTPAGE P="136"/>
              <SECTNO>8.406-5</SECTNO>
              <SUBJECT>Termination for the Government's convenience.</SUBJECT>
              <P>(a) An ordering activity contracting officer may terminate individual orders for the Government's convenience. Terminations for the Government's convenience shall comply with FAR 12.403.</P>
              <P>(b) Before terminating orders for the Government's convenience, the ordering activity contracting officer shall endeavor to enter into a “no cost” settlement agreement with the contractor.</P>
              <P>(c) Only the schedule contracting officer may modify the schedule contract to terminate any, or all, supplies or services covered by the schedule contract for the Government's convenience.</P>
            </SECTION>
            <SECTION>
              <SECTNO>8.406-6</SECTNO>
              <SUBJECT>Disputes.</SUBJECT>
              <P>(a) <E T="03">Disputes pertaining to the performance of orders under a schedule contract.</E> (1) Under the Disputes clause of the schedule contract, the ordering activity contracting officer may—</P>
              <P>(i) Issue final decisions on disputes arising from performance of the order (but see paragraph (b) of this section); or</P>
              <P>(ii) Refer the dispute to the schedule contracting officer.</P>
              <P>(2) The ordering activity contracting officer shall notify the schedule contracting officer promptly of any final decision.</P>
              <P>(b) <E T="03">Disputes pertaining to the terms and conditions of schedule contracts.</E> The ordering activity contracting officer shall refer all disputes that relate to the contract terms and conditions to the schedule contracting officer for resolution under the Disputes clause of the contract and notify the schedule contractor of the referral.</P>
              <P>(c) <E T="03">Appeals.</E> Contractors may appeal final decisions to either the Board of Contract Appeals servicing the agency that issued the final decision or the U.S. Court of Federal Claims.</P>
              <P>(d) <E T="03">Alternative dispute resolution.</E> The contracting officer should use the alternative dispute resolution (ADR) procedures, to the maximum extent practicable (see 33.204 and 33.214).</P>
            </SECTION>
          </SUBPART>
          <SUBPART>
            <HD SOURCE="HED">Subpart 8.5—Acquisition of Helium</HD>
            <SOURCE>
              <HD SOURCE="HED">Source:</HD>
              <P>67 FR 13064, Mar. 20, 2002, unless otherwise noted.</P>
            </SOURCE>
            <SECTION>
              <SECTNO>8.500</SECTNO>
              <SUBJECT>Scope of subpart.</SUBJECT>

              <P>This subpart implements the requirements of the Helium Act (50 U.S.C. 167, <E T="03">et seq.</E>) concerning the acquisition of liquid or gaseous helium by Federal agencies or by Government contractors or subcontractors for use in the performance of a Government contract (also see 43 CFR part 3195).</P>
            </SECTION>
            <SECTION>
              <SECTNO>8.501</SECTNO>
              <SUBJECT>Definitions.</SUBJECT>
              <P>As used in this subpart—</P>
              <P>
                <E T="03">Bureau of Land Management</E> means the Department of the Interior, Bureau of Land Management, Amarillo Field Office, Helium Operations, 801 South Fillmore Street, Suite 500, Amarillo, TX 79101-3545.</P>
              <P>
                <E T="03">Federal helium supplier</E> means a private helium vendor that has an in-kind crude helium sales contract with the Bureau of Land Management (BLM) and that is on the BLM Amarillo Field Office's Authorized List of Federal Helium Suppliers available via the Internet at <E T="03">http://www.nm.blm.gov/www/amfo/amfo_home.html.</E>
              </P>
              <P>
                <E T="03">Major helium requirement</E> means an estimated refined helium requirement greater than 200,000 standard cubic feet (scf) (measured at 14.7 pounds per square inch absolute pressure and 70 degrees Fahrenheit temperature) of gaseous helium or 7510 liters of liquid helium delivered to a helium use location per year.</P>
            </SECTION>
            <SECTION>
              <SECTNO>8.502</SECTNO>
              <SUBJECT>Policy.</SUBJECT>
              <P>Agencies and their contractors and subcontractors must purchase major helium requirements from Federal helium suppliers, to the extent that supplies are available.</P>
            </SECTION>
            <SECTION>
              <SECTNO>8.503</SECTNO>
              <SUBJECT>Exception.</SUBJECT>
              <P>The requirements of this subpart do not apply to contracts or subcontracts in which the helium was acquired by the contractor prior to award of the contract or subcontract.</P>
            </SECTION>
            <SECTION>
              <PRTPAGE P="137"/>
              <SECTNO>8.504</SECTNO>
              <SUBJECT>Procedures.</SUBJECT>
              <P>The contracting officer must forward the following information to the Bureau of Land Management within 45 days of the close of each fiscal quarter:</P>
              <P>(a) The name of any company that supplied a major helium requirement.</P>
              <P>(b) The amount of helium purchased.</P>
              <P>(c) The delivery date(s).</P>
              <P>(d) The location where the helium was used.</P>
            </SECTION>
            <SECTION>
              <SECTNO>8.505</SECTNO>
              <SUBJECT>Contract clause.</SUBJECT>
              <P>Insert the clause at 52.208-8, Required Sources for Helium and Helium Usage Data, in solicitations and contracts if it is anticipated that performance of the contract involves a major helium requirement.</P>
            </SECTION>
          </SUBPART>
          <SUBPART>
            <HD SOURCE="HED">Subpart 8.6—Acquisition From Federal Prison Industries, Inc.</HD>
            <SOURCE>
              <HD SOURCE="HED">Source:</HD>
              <P>69 FR 16149, Mar. 26, 2004, unless otherwise noted.</P>
            </SOURCE>
            <SECTION>
              <SECTNO>8.601</SECTNO>
              <SUBJECT>General.</SUBJECT>
              <P>(a) Federal Prison Industries, Inc. (FPI), also referred to as UNICOR, is a self-supporting, wholly owned Government corporation of the District of Columbia.</P>
              <P>(b) FPI provides training and employment for prisoners confined in Federal penal and correctional institutions through the sale of its supplies and services to Government agencies (18 U.S.C. 4121-4128).</P>
              <P>(c) FPI diversifies its supplies and services to minimize adverse impact on private industry.</P>

              <P>(d) Supplies manufactured and services performed by FPI are listed in the FPI Schedule, which can be accessed at <E T="03">http://www.unicor.gov</E> or by submitting a written request to Federal Prison Industries, Inc., Department of Justice, Washington, DC 20534.</P>
              <P>(e) Agencies are encouraged to purchase FPI supplies and services to the maximum extent practicable.</P>
              <CITA>[69 FR 16149, Mar. 26, 2004, as amended at 70 FR 18958, Apr. 11, 2005]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>8.602</SECTNO>
              <SUBJECT>Policy.</SUBJECT>
              <P>(a) In accordance with 10 U.S.C. 2410n and Section 637 of Division H of the Consolidated Appropriations Act, 2005 (Pub. L. 108-447), and except as provided in paragraph (b) of this section, agencies shall—</P>
              <P>(1) Before purchasing an item of supply listed in the FPI Schedule, conduct market research to determine whether the FPI item is comparable to supplies available from the private sector that best meet the Government's needs in terms of price, quality, and time of delivery. This is a unilateral determination made at the discretion of the contracting officer. The arbitration provisions of 18 U.S.C. 4124(b) do not apply;</P>
              <P>(2) Prepare a written determination that includes supporting rationale explaining the assessment of price, quality, and time of delivery, based on the results of market research comparing the FPI item to supplies available from the private sector;</P>

              <P>(3) If the FPI item is comparable, purchase the item from FPI following the ordering procedures at <E T="03">http://www.unicor.gov,</E> unless a waiver is obtained in accordance with 8.604; and</P>
              <P>(4) If the FPI item is not comparable in one or more of the areas of price, quality, and time of delivery—</P>
              <P>(i) Acquire the item using—</P>
              <P>(A) Competitive procedures (<E T="03">e.g.,</E> the procedures in 6.102, the set-aside procedures in subpart 19.5, or competition conducted in accordance with part 13); or</P>
              <P>(B) The fair opportunity procedures in 16.505, if placing an order under a multiple award delivery-order contract;</P>
              <P>(ii) Include FPI in the solicitation process and consider a timely offer from FPI for award in accordance with the item description or specifications, and evaluation factors in the solicitation—</P>
              <P>(A) If the solicitation is available through the Governmentwide point of entry (FedBizOpps), it is not necessary to provide a separate copy of the solicitation to FPI;</P>
              <P>(B) If the solicitation is not available through FedBizOpps, provide a copy of the solicitation to FPI;</P>

              <P>(iii) When using a multiple award schedule issued under the procedures in Subpart 8.4 or when using the fair opportunity procedures in 16.505—<PRTPAGE P="138"/>
              </P>
              <P>(A) Establish and communicate to FPI the item description or specifications, and evaluation factors that will be used as the basis for selecting a source, so that an offer from FPI can be evaluated on the same basis as the contract or schedule holder; and</P>
              <P>(B) Consider a timely offer from FPI;</P>
              <P>(iv) Award to the source offering the item determined by the agency to provide the best value to the Government; and</P>

              <P>(v) When the FPI item is determined to provide the best value to the Government as a result of FPI's response to a competitive solicitation, follow the ordering procedures at <E T="03">http://www.unicor.gov</E>.</P>
              <P>(b) The procedures in paragraph (a) of this section do not apply if an exception in 8.605(b) through (g) applies.</P>
              <P>(c) In some cases where FPI and a JWOD participating nonprofit agency produce identical items (see 8.603), FPI grants a waiver to permit the Government to purchase a portion of its requirement from the JWOD participating nonprofit agency. When this occurs, the portion of the requirement for which FPI has granted a waiver—</P>
              <P>(1) Shall be purchased from the JWOD participating nonprofit agency using the procedures in subpart 8.7; and</P>
              <P>(2) Shall not be subject to the procedures in paragraph (a) of this section.</P>
              <P>(d) Disputes regarding price, quality, character, or suitability of supplies produced by FPI, except for determinations under paragraph (a)(1) of this section, are subject to arbitration as specified in 18 U.S.C. 4124. The statute provides that the arbitration shall be conducted by a board consisting of the Comptroller General of the United States, the Administrator of General Services, and the President, or their representatives. The decisions of the board are final and binding on all parties.</P>
              <CITA>[69 FR 16149, Mar. 26, 2004, as amended at 70 FR 18958, Apr. 11, 2005; 71 FR 222, Jan. 3, 2006]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>8.603</SECTNO>
              <SUBJECT>Purchase priorities.</SUBJECT>
              <P>FPI and nonprofit agencies participating in the Javits-Wagner-O'Day (JWOD) Program (see subpart 8.7) may produce identical supplies or services. When this occurs, ordering offices shall purchase supplies and services in the following priorities:</P>
              <P>(a) <E T="03">Supplies.</E> (1) Federal Prison Industries, Inc. (41 U.S.C. 48).</P>
              <P>(2) JWOD participating nonprofit agencies.</P>
              <P>(3) Commercial sources.</P>
              <P>(b) <E T="03">Services.</E> (1) JWOD participating nonprofit agencies.</P>
              <P>(2) Federal Prison Industries, Inc., or commercial sources.</P>
            </SECTION>
            <SECTION>
              <SECTNO>8.604</SECTNO>
              <SUBJECT>Waivers.</SUBJECT>
              <P>FPI may grant a waiver for purchase of supplies in the FPI Schedule from another source. FPI waivers ordinarily are of the following types:</P>
              <P>(a) General or blanket waivers issued when classes of supplies are not available from FPI.</P>

              <P>(b) Formal waivers issued in response to requests from offices desiring to acquire, from other sources, supplies listed in the FPI Schedule and not covered by a general waiver. Agencies shall process waiver requests in accordance with the procedures at <E T="03">http://www.unicor.gov.</E>
              </P>
            </SECTION>
            <SECTION>
              <SECTNO>8.605</SECTNO>
              <SUBJECT>Exceptions.</SUBJECT>
              <P>Purchase from FPI is not mandatory and a waiver is not required if—</P>
              <P>(a)(1) The contracting officer makes a determination that the FPI item of supply is not comparable to supplies available from the private sector that best meet the Government's needs in terms of price, quality, and time of delivery; and</P>
              <P>(2) The item is acquired in accordance with 8.602(a)(4);</P>
              <P>(b) Public exigency requires immediate delivery or performance;</P>
              <P>(c) Suitable used or excess supplies are available;</P>
              <P>(d) The supplies are acquired and used outside the United States;</P>
              <P>(e) Acquiring listed items totaling $2,500 or less;</P>
              <P>(f) Acquiring items that FPI offers exclusively on a competitive (non-mandatory) basis, as identified in the FPI Schedule; or</P>
              <P>(g) Acquiring services.</P>
              <CITA>[69 FR 16149, Mar. 26, 2004, as amended at 70 FR 18958, Apr. 11, 2005; 71 FR 223, Jan. 3, 2006]</CITA>
            </SECTION>
            <SECTION>
              <PRTPAGE P="139"/>
              <SECTNO>8.606</SECTNO>
              <SUBJECT>Evaluating FPI performance.</SUBJECT>
              <P>Agencies shall evaluate FPI contract performance in accordance with subpart 42.15. Performance evaluations do not negate the requirements of 8.602 and 8.604, but they may be used to support a waiver request in accordance with 8.604.</P>
            </SECTION>
            <SECTION>
              <SECTNO>8.607</SECTNO>
              <SUBJECT>Performance as a subcontractor.</SUBJECT>
              <P>Agencies shall not require a contractor, or subcontractor at any tier, to use FPI as a subcontractor for performance of a contract by any means, including means such as—</P>
              <P>(a) A solicitation provision requiring a potential contractor to offer to make use of FPI supplies or services;</P>
              <P>(b) A contract specification requiring the contractor to use specific supplies or services (or classes of supplies or services) offered by FPI; or</P>
              <P>(c) Any contract modification directing the use of FPI supplies or services.</P>
            </SECTION>
            <SECTION>
              <SECTNO>8.608</SECTNO>
              <SUBJECT>Protection of classified and sensitive information.</SUBJECT>
              <P>Agencies shall not enter into any contract with FPI that allows an inmate worker access to any—</P>
              <P>(a) Classified data;</P>
              <P>(b) Geographic data regarding the location of—</P>
              <P>(1) Surface and subsurface infrastructure providing communications or water or electrical power distribution;</P>
              <P>(2) Pipelines for the distribution of natural gas, bulk petroleum products, or other commodities; or</P>
              <P>(3) Other utilities; or</P>
              <P>(c) Personal or financial information about any individual private citizen, including information relating to such person's real property however described, without the prior consent of the individual.</P>
            </SECTION>
          </SUBPART>
          <SUBPART>
            <HD SOURCE="HED">Subpart 8.7—Acquisition From Nonprofit Agencies Employing People Who Are Blind or Severely Disabled</HD>
            <SECTION>
              <SECTNO>8.700</SECTNO>
              <SUBJECT>Scope of subpart.</SUBJECT>
              <P>This subpart prescribes the policies and procedures for implementing the Javits-Wagner-O'Day Act (41 U.S.C. 46-48c), referred to in this subpart as “the JWOD Act,” and the rules of the Committee for Purchase from People Who Are Blind or Severely Disabled (41 CFR chapter 51).</P>
              <CITA>[59 FR 67027, Dec. 28, 1994]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>8.701</SECTNO>
              <SUBJECT>Definitions.</SUBJECT>
              <P>As used in this subpart—</P>
              <P>
                <E T="03">Allocation,</E> means an action taken by a central nonprofit agency to designate the JWOD participating nonprofit agencies that will furnish definite quantities of supplies or perform specific services upon receipt of orders from ordering offices.</P>
              <P>
                <E T="03">Central nonprofit agency,</E> means National Industries for the Blind (NIB), which has been designated to represent people who are blind; or NISH, which has been designated to represent JWOD participating nonprofit agencies serving people with severe disabilities other than blindness.</P>
              <P>
                <E T="03">Committee,</E> means the Committee for Purchase from People Who Are Blind or Severely Disabled.</P>
              <P>
                <E T="03">Government</E> or <E T="03">entity of the Government</E> means any entity of the legislative or judicial branch, any executive agency, military department, Government corporation, or independent establishment, the U.S. Postal Service, or any nonappropriated-fund instrumentality of the Armed Forces.</P>
              <P>
                <E T="03">Ordering office</E> means any activity in an entity of the Government that places orders for the purchase of supplies or services under the JWOD Program.</P>
              <P>
                <E T="03">Procurement List,</E> means a list of supplies (including military resale commodities) and services that the Committee has determined are suitable for purchase by the Government under the Javits-Wagner-O'Day Act.</P>
              <P>
                <E T="03">Nonprofit agency serving people who are blind</E> or <E T="03">nonprofit agency serving people with other severe disabilities</E> (referred to jointly as JWOD participating nonprofit agencies) means a qualified nonprofit agency employing people who are blind or have other severe disabilities approved by the Committee to furnish a commodity or a service to the Government under the Act.</P>
              <CITA>[59 FR 67027, Dec. 28, 1994, as amended at 66 FR 2128, Jan. 10, 2001]</CITA>
            </SECTION>
            <SECTION>
              <PRTPAGE P="140"/>
              <SECTNO>8.702</SECTNO>
              <SUBJECT>General.</SUBJECT>
              <P>The Committee is an independent Government activity with members appointed by the President of the United States. It is responsible for—</P>
              <P>(a) Determining those supplies and services to be purchased by all entities of the Government from JWOD participating nonprofit agencies;</P>
              <P>(b) Establishing prices for the supplies and services; and</P>
              <P>(c) Establishing rules and regulations to implement the JWOD Act.</P>
              <CITA>[59 FR 67028, Dec. 28, 1994]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>8.703</SECTNO>
              <SUBJECT>Procurement list.</SUBJECT>

              <P>The Committee maintains a Procurement List of all supplies and services required to be purchased from JWOD participating nonprofit agencies. The Procurement List may be accessed at: <E T="03">http://www.jwod.gov/procurementlist.</E> Questions concerning whether a supply item or service is on the Procurement List may be submitted at Internet e-mail address <E T="03">info@jwod.gov</E> or referred to the Committee offices at the following address and telephone number: Committee for Purchase From People Who Are Blind or Severely Disabled, Jefferson Plaza 2, Suite 10800, 1421 Jefferson Davis Highway, Arlington, VA 22202-3259, (703) 603-7740.</P>
              <P>Many items on the Procurement List are identified in the General Services Administration (GSA) Supply Catalog and GSA's Customer Service Center Catalogs with a black square and the words “NIB/NISH Mandatory Source,” and in similar catalogs issued by the Defense Logistics Agency (DLA) and the Department of Veterans Affairs (VA). GSA, DLA, and VA are central supply agencies from which other Federal agencies are required to purchase certain supply items on the Procurement List.</P>
              <CITA>[59 FR 67028, Dec. 28, 1994; 69 FR 34230, June 18, 2004]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>8.704</SECTNO>
              <SUBJECT>Purchase priorities.</SUBJECT>
              <P>(a) The JWOD Act requires the Government to purchase supplies or services on the Procurement List, at prices established by the Committee, from JWOD participating nonprofit agencies if they are available within the period required. When identical supplies or services are on the Procurement List and the Schedule of Products issued by Federal Prison Industries, Inc., ordering offices shall purchase supplies and services in the following priorities:</P>
              <P>(1) Supplies:</P>
              <P>(i) Federal Prison Industries, Inc. (41 U.S.C. 48).</P>
              <P>(ii) JWOD participating nonprofit agencies.</P>
              <P>(iii) Commercial sources.</P>
              <P>(2) Services:</P>
              <P>(i) JWOD participating nonprofit agencies.</P>
              <P>(ii) Federal Prison Industries, Inc., or commercial sources.</P>
              <P>(b) No other provision of the FAR shall be construed as permitting an exception to the mandatory purchase of items on the Procurement List.</P>
              <P>(c) The Procurement List identifies those supplies for which the ordering office must obtain a formal waiver (8.604) from Federal Prison Industries, Inc., before making any purchases from JWOD participating nonprofit agencies.</P>
              <CITA>[48 FR 42129, Sept. 19, 1983, as amended at 51 FR 19713, May 30, 1986; 56 FR 15149, Apr. 15, 1991; 59 FR 67028, Dec. 28, 1994; 69 FR 16150, Mar. 26, 2004]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>8.705</SECTNO>
              <SUBJECT>Procedures.</SUBJECT>
            </SECTION>
            <SECTION>
              <SECTNO>8.705-1</SECTNO>
              <SUBJECT>General.</SUBJECT>
              <P>(a) Ordering offices shall obtain supplies and services on the Procurement List from the central nonprofit agency or its designated JWOD participating nonprofit agencies, except that supplies identified on the Procurement List as available from DLA, GSA, or VA supply distribution facilities shall be obtained through DLA, GSA, or VA procedures. If a distribution facility cannot provide the supplies, it shall inform the ordering office, which shall then order from the JWOD participating nonprofit agency designated by the Committee.</P>
              <P>(b) Supply distribution facilities in DLA and GSA shall obtain supplies on the Procurement List from the central nonprofit agency identified or its designated JWOD participating nonprofit agency.</P>
              <CITA>[48 FR 42129, Sept. 19, 1983, as amended at 59 FR 67028, 67029, Dec. 28, 1994]</CITA>
            </SECTION>
            <SECTION>
              <PRTPAGE P="141"/>
              <SECTNO>8.705-2</SECTNO>
              <SUBJECT>Direct-order process.</SUBJECT>
              <P>Central nonprofit agencies may authorize ordering offices to transmit orders for specific supplies or services directly to a JWOD participating nonprofit agency. The written authorization remains valid until it is revoked by the central nonprofit agency or the Committee. The central nonprofit agency shall specify the normal delivery or performance lead time required by the nonprofit agency. The ordering office shall reflect this lead time in its orders.</P>
              <CITA>[48 FR 42129, Sept. 19, 1983, as amended at 56 FR 67136, Dec. 27, 1991; 59 FR 67029, Dec. 28, 1994]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>8.705-3</SECTNO>
              <SUBJECT>Allocation process.</SUBJECT>
              <P>(a) When the direct order process has not been authorized, the ordering office shall submit a written request for allocation (requesting the designation of the JWOD participating nonprofit agency to produce the supplies or perform the service) to the central nonprofit agency designated in the Procurement List. Ordering offices shall request allocations in sufficient time for a reply, for orders to be placed, and for the nonprofit agency to produce the supplies or provide the service within the required delivery or performance schedule.</P>
              <P>(b) The ordering office's request to the central nonprofit agency for allocation shall include the following information:</P>
              <P>(1) For supplies—Item name, stock number, latest specification, quantity, unit price, date delivery is required, and destination to which delivery is to be made.</P>
              <P>(2) For services—Type and location of service required, latest specification, work to be performed, estimated volume, and required date or dates for completion.</P>
              <P>(3) Other requirements; e.g., packing, marking, as necessary.</P>
              <P>(c) When an allocation is received, the ordering office shall promptly issue an order to the specified JWOD participating nonprofit agency or to the central nonprofit agency, as instructed by the allocation. If the issuance of an order is to be delayed for more than 15 days beyond receipt of the allocation, or canceled, the ordering office shall advise the central nonprofit agency immediately.</P>
              <P>(d) Ordering offices may issue orders without limitation as to dollar amount and shall record them upon issuance as obligations. Each order shall include, as a minimum, the information contained in the request for allocation. Ordering offices shall also include additional instructions necessary for performance under the order; e.g., on the handling of Government-furnished property, reports required, and notification of shipment.</P>
              <CITA>[48 FR 42129, Sept. 19, 1983, as amended at 59 FR 67029, Dec. 28, 1994; 60 FR 34737, July 3, 1995]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>8.705-4</SECTNO>
              <SUBJECT>Compliance with orders.</SUBJECT>
              <P>(a) The central nonprofit agency shall inform the ordering office of changes in lead time experienced by its JWOD participating nonprofit agencies to minimize requests for extensions once the ordering office places an order.</P>
              <P>(b) The ordering office shall grant a request by a central nonprofit agency or JWOD participating nonprofit agency for revision in the delivery or completion schedule, if feasible. If extension of the delivery or completion date is not feasible, the ordering office shall notify the appropriate central nonprofit agency and request that it reallocate the order, or grant a purchase exception authorizing acquisition from commercial sources.</P>
              <P>(c) When a JWOD participating nonprofit agency fails to perform under the terms of an order, the ordering office shall make every effort to resolve the noncompliance with the nonprofit agency involved and to negotiate an adjustment before taking action to cancel the order. If the problem cannot be resolved with the nonprofit agency, the ordering office shall refer the matter for resolution first to the central nonprofit agency and then, if necessary, to the Committee.</P>

              <P>(d) When, after complying with 8.705-4(c), the ordering office determines that it must cancel an order, it shall notify the central nonprofit agency and, if practical, request a reallocation of the order. When the central nonprofit agency cannot reallocate the <PRTPAGE P="142"/>order, it shall grant a purchase exception permitting use of commercial sources, subject to approval by the Committee when the value of the purchase exception is $25,000 or more.</P>
              <CITA>[48 FR 42129, Sept. 19, 1983, as amended at 56 FR 67136, Dec. 27, 1991; 59 FR 67028, 67029, Dec. 28, 1994]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>8.706</SECTNO>
              <SUBJECT>Purchase exceptions.</SUBJECT>
              <P>(a) Ordering offices may acquire supplies or services on the Procurement List from commercial sources only if the acquisition is specifically authorized in a purchase exception granted by the designated central nonprofit agency.</P>
              <P>(b) The central nonprofit agency shall promptly grant purchase exceptions when—</P>
              <P>(1) The JWOD participating nonprofit agencies cannot provide the supplies or services within the time required, and commercial sources can provide them significantly sooner in the quantities required; or</P>
              <P>(2) The quantity required cannot be produced or provided economically by the JWOD participating nonprofit agencies.</P>
              <P>(c) The central nonprofit agency granting the exception shall specify the quantity and delivery or performance period covered by the exception.</P>
              <P>(d) When a purchase exception is granted, the contracting officer shall—</P>
              <P>(1) Initiate purchase action within 15 days following the date of the exception or any extension granted by the central nonprofit agency; and</P>
              <P>(2) Provide a copy of the solicitation to the central nonprofit agency when it is issued.</P>
              <P>(e) The Committee may also grant a purchase exception, under any circumstances it considers appropriate.</P>
              <CITA>[48 FR 42129, Sept. 19, 1983, as amended at 59 FR 67028, 67029, Dec. 28, 1994]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>8.707</SECTNO>
              <SUBJECT>Prices.</SUBJECT>
              <P>(a) The prices of items on the Procurement List are fair market prices established by the Committee. All prices for supplies ordered under this subpart are f.o.b. origin.</P>
              <P>(b) Prices for supplies are normally adjusted semiannually. Prices for services are normally adjusted annually.</P>
              <P>(c) The Committee may request the agency responsible for acquiring the supplies or service to assist it in establishing or revising the fair market price. The Committee has the authority to establish prices without prior coordination with the responsible contracting office.</P>
              <P>(d) Price changes shall normally apply to all orders received by the JWOD participating nonprofit agency on or after the effective date of the change. In special cases, after considering the views of the ordering office, the Committee may make price changes applicable to orders received by the JWOD participating nonprofit agency prior to the effective date of the change.</P>
              <P>(e) If an ordering office desires packing, packaging, or marking of supplies other than the standard pack as provided on the Procurement List, any difference in costs shall be included as a separate item on the nonprofit agency's invoice. The ordering office shall reimburse the nonprofit agency for these costs.</P>
              <P>(f) Ordering offices may make recommendations to the Committee at any time for price revisions for supplies and services on the Procurement List.</P>
              <CITA>[48 FR 42129, Sept. 19, 1983, as amended at 59 FR 67028, 67029, Dec. 28, 1994]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>8.708</SECTNO>
              <SUBJECT>Shipping.</SUBJECT>
              <P>(a) Delivery is accomplished when a shipment is placed aboard the vehicle of the initial carrier. The time of delivery is the date shipment is released to and accepted by the initial carrier.</P>
              <P>(b) Shipment is normally under Government bills of lading. However, for small orders, ordering offices may specify other shipment methods.</P>
              <P>(c) When shipments are under Government bills of lading, the bills of lading may accompany orders or be otherwise furnished promptly. Failure of an ordering office to furnish bills of lading or to designate a method of transportation may result in an excusable delay in delivery.</P>

              <P>(d) JWOD participating nonprofit agencies shall include transportation costs for small shipments paid by the nonprofit agencies as an item on the <PRTPAGE P="143"/>invoice. The ordering office shall reimburse the nonprofit agencies for these costs.</P>
              <CITA>[48 FR 42129, Sept. 19, 1983, as amended at 51 FR 19713, May 30, 1986; 59 FR 67028, Dec. 28, 1994]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>8.709</SECTNO>
              <SUBJECT>Payments.</SUBJECT>
              <P>The ordering office shall make payments for supplies or services on the Procurement List within 30 days after shipment or after receipt of a proper invoice or voucher.</P>
              <CITA>[59 FR 67028, Dec. 28, 1994]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>8.710</SECTNO>
              <SUBJECT>Quality of merchandise.</SUBJECT>
              <P>Supplies and services provided by JWOD participating nonprofit agencies shall comply with the applicable Government specifications and standards cited in the order. When no specifications or standards exist—</P>
              <P>(a) Supplies shall be of the highest quality and equal to similar items available on the commercial market; and</P>
              <P>(b) Services shall conform to good commercial practices.</P>
              <CITA>[48 FR 42129, Sept. 19, 1983, as amended at 59 FR 67029, Dec. 28, 1994]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>8.711</SECTNO>
              <SUBJECT>Quality complaints.</SUBJECT>
              <P>(a) When the quality of supplies or services received is unsatisfactory, the using activity shall take the following actions:</P>
              <P>(1) For supplies received from DLA supply centers, GSA supply distribution facilities, or Department of Veterans Affairs distribution division, notify the supplying agency.</P>
              <P>(2) For supplies or services received from JWOD participating nonprofit agencies, address complaints to the individual nonprofit agency involved, with a copy to the appropriate central nonprofit agency.</P>
              <P>(b) When quality problems cannot be resolved by the JWOD participating nonprofit agency and the ordering office, the ordering office shall first contact the central nonprofit agency and then, if necessary, the Committee for resolution.</P>
              <CITA>[48 FR 42129, Sept. 19, 1983, as amended at 59 FR 67029, Dec. 28, 1994]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>8.712</SECTNO>
              <SUBJECT>Specification changes.</SUBJECT>
              <P>(a) The contracting activity shall notify the JWOD participating nonprofit agency and appropriate central nonprofit agency of any change in specifications or descriptions. In the absence of such written notification, the JWOD participating nonprofit agency shall furnish the supplies or services under the specification or description cited in the order.</P>
              <P>(b) The contracting activity shall provide 90-days advance notification to the Committee and the central nonprofit agency on actions that affect supplies on the Procurement List and shall permit them to comment before action is taken, particularly when it involves—</P>
              <P>(1) Changes that require new national stock numbers or item designations;</P>
              <P>(2) Deleting items from the supply system;</P>
              <P>(3) Standardization; or</P>
              <P>(4) Developing new items to replace items on the Procurement List.</P>
              <P>(c) For services, the contracting activity shall notify the JWOD participating nonprofit agency and central nonprofit agency concerned at least 90 days prior to the date that any changes in the scope of work or other conditions will be required.</P>
              <P>(d) When, in order to meet its emergency needs, a contracting activity is unable to give the 90-day notification required in paragraphs (b) and (c) of this section, the contracting activity shall, at the time it places the order or change notice, inform the JWOD participating nonprofit agency and the central nonprofit agency in writing of the reasons that it cannot meet the 90-day notification requirement.</P>
              <CITA>[48 FR 42129, Sept. 19, 1983, as amended at 51 FR 19714, May 30, 1986; 59 FR 67029, Dec. 28, 1994]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>8.713</SECTNO>
              <SUBJECT>Optional acquisition of supplies and services.</SUBJECT>
              <P>(a) Ordering offices may acquire supplies and services not included on the Procurement List from a JWOD participating nonprofit agency that is the low responsive, responsible offeror under a solicitation issued by other authorized acquisition methods.</P>

              <P>(b) Ordering offices should forward solicitations to JWOD participating <PRTPAGE P="144"/>nonprofit agencies that may be qualified to provide the supplies or services required.</P>
              <CITA>[48 FR 42129, Sept. 19, 1983, as amended at 59 FR 67029, Dec. 28, 1994]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>8.714</SECTNO>
              <SUBJECT>Communications with the central nonprofit agencies and the Committee.</SUBJECT>
              <P>(a) The addresses of the central nonprofit agencies are:</P>
              <P>(1) National Industries for the Blind, 1310 Braddock Place, Alexandria, VA 22314-1691, (703) 310-0500; and</P>
              <P>(2) NISH, 8401 Old Courthouse Road, Vienna, VA 22182, (571) 226-4660.</P>
              <P>(b) Any matter requiring referral to the Committee shall be addressed to the Executive Director of the Committee, Jefferson Plaza 2, Suite 10800, 1421 Jefferson Davis Highway, Arlington, VA 22202-3259.</P>
              <CITA>[59 FR 67029, Dec. 28, 1994, as amended at 69 FR 34230, June 18, 2004; 71 FR 36941, June 28, 2006]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>8.715</SECTNO>
              <SUBJECT>Replacement commodities.</SUBJECT>
              <P>When a commodity on the Procurement List is replaced by another commodity which has not been previously acquired, and a qualified JWOD participating nonprofit agency can furnish the replacement commodity in accordance with the Government's quality standards and delivery schedules and at a fair market price, the replacement commodity is automatically on the Procurement List and shall be acquired from the JWOD participating nonprofit agency designated by the Committee. The commodity being replaced shall continue to be included on the Procurement List until there is no longer a requirement for that commodity.</P>
              <CITA>[51 FR 19714, May 30, 1986, as amended at 59 FR 67029, Dec. 28, 1994]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>8.716</SECTNO>
              <SUBJECT>Change-of-name and successor in interest procedures.</SUBJECT>
              <P>When the Committee recognizes a name change or a successor in interest for a JWOD participating nonprofit agency providing supplies or services on the Procurement List—</P>
              <P>(a) The Committee will provide a notice of a change to the Procurement List to the cognizant contracting officers; and</P>
              <P>(b) Upon receipt of a notice of a change to the Procurement List from the Committee, the contracting officer must—</P>
              <P>(1) Prepare a Standard Form (SF) 30, Amendment of Solicitation/Modification of Contract, incorporating a summary of the notice and attaching a list of contracts affected; and</P>
              <P>(2) Distribute the SF 30, including a copy to the Committee.</P>
              <CITA>[64 FR 51834, Sept. 24, 1999]</CITA>
            </SECTION>
          </SUBPART>
          <SUBPART>
            <HD SOURCE="HED">Subpart 8.8—Acquisition of Printing and Related Supplies</HD>
            <SECTION>
              <SECTNO>8.800</SECTNO>
              <SUBJECT>Scope of subpart.</SUBJECT>
              <P>This subpart provides policy for the acquisition of Government printing and related supplies.</P>
              <CITA>[52 FR 9037, Mar. 20, 1987]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>8.801</SECTNO>
              <SUBJECT>Definitions.</SUBJECT>
              <P>As used in this subpart—</P>
              <P>
                <E T="03">Government printing</E> means printing, binding, and blankbook work for the use of an executive department, independent agency, or establishment of the Government.</P>
              <P>
                <E T="03">Related supplies,</E> means supplies that are used and equipment that is usable in printing and binding operations.</P>
              <CITA>[48 FR 42129, Sept. 19, 1983, as amended at 52 FR 9037, Mar. 20, 1987; 66 FR 2128, Jan. 10, 2001]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>8.802</SECTNO>
              <SUBJECT>Policy.</SUBJECT>
              <P>(a) Government printing must be done by or through the Government Printing Office (GPO) (44 U.S.C. 501), unless—</P>
              <P>(1) The GPO cannot provide the printing service (44 U.S.C. 504);</P>
              <P>(2) The printing is done in field printing plants operated by an executive agency (44 U.S.C. 501(2));</P>
              <P>(3) The printing is acquired by an executive agency from allotments for contract field printing (44 U.S.C. 501(2)); or</P>
              <P>(4) The printing is specifically authorized by statute to be done other than by the GPO.</P>

              <P>(b) The head of each agency shall designate a central printing authority; that central printing authority may serve as the liaison with the Congressional Joint Committee on Printing <PRTPAGE P="145"/>(JCP) and the Public Printer on matters related to printing. Contracting officers shall obtain approval from their designated central printing authority before contracting in any manner, whether directly or through contracts for other supplies or services, for the items defined in 8.801 and for composition, platemaking, presswork, binding, and micrographics (when used as a substitute for printing).</P>
              <P>(c)(1) Further, 44 U.S.C. 1121 provides that the Public Printer may acquire and furnish paper and envelopes (excluding envelopes printed in the course of manufacture) in common use by two or more Government departments, establishments, or services within the District of Columbia, and provides for reimbursement of the Public Printer from available appropriations or funds. Paper and envelopes that are furnished by the Public Printer may not be acquired in any other manner.</P>
              <P>(2) Paper and envelopes for use by Executive agencies outside the District of Columbia and stocked by GSA shall be requisitioned from GSA in accordance with the procedures listed in Federal Property Management Regulations (FPMR) 41 CFR part 101, subpart 101-26.3.</P>
              <CITA>[48 FR 42129, Sept. 19, 1983, as amended at 52 FR 9037, Mar. 20, 1987; 54 FR 48982, Nov. 28, 1989; 59 FR 67032, Dec. 28, 1994]</CITA>
            </SECTION>
          </SUBPART>
          <SUBPART>
            <RESERVED>Subparts 8.9-8.10 [Reserved]</RESERVED>
          </SUBPART>
          <SUBPART>
            <HD SOURCE="HED">Subpart 8.11—Leasing of Motor Vehicles</HD>
            <SECTION>
              <SECTNO>8.1100</SECTNO>
              <SUBJECT>Scope of subpart.</SUBJECT>
              <P>This subpart covers the procedures for the leasing, from commercial concerns, of motor vehicles that comply with Federal Motor Vehicle Safety Standards and applicable State motor vehicle safety regulations. It does not apply to motor vehicles leased outside the United States and its outlying areas.</P>
              <CITA>[48 FR 42129, Sept. 19, 1983, as amended at 68 FR 28080, May 22, 2003]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>8.1101</SECTNO>
              <SUBJECT>Definitions.</SUBJECT>
              <P>As used in this subpart—</P>
              <P>
                <E T="03">Leasing,</E> means the acquisition of motor vehicles, other than by purchase from private or commercial sources, and includes the synonyms <E T="03">hire</E> and <E T="03">rent.</E>
              </P>
              <P>
                <E T="03">Motor vehicle</E> means an item of equipment, mounted on wheels and designed for highway and/or land use, that (1) derives power from a self-contained power unit or (2) is designed to be towed by and used in conjunction with self-propelled equipment.</P>
              <CITA>[48 FR 42129, Sept. 19, 1983, as amended at 66 FR 2128, Jan. 10, 2001]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>8.1102</SECTNO>
              <SUBJECT>Presolicitation requirements.</SUBJECT>
              <P>(a) Except as specified in 8.1102(b), before preparing solicitations for leasing of motor vehicles, contracting officers shall obtain from the requiring activity a written certification that—</P>
              <P>(1) The vehicles requested are of maximum fuel efficiency and minimum body size, engine size, and equipment (if any) necessary to fulfill operational needs, and meet prescribed fuel economy standards;</P>
              <P>(2) The head of the requiring agency, or a designee, has certified that the requested passenger automobiles (sedans and station wagons) larger than Type IA, IB, or II (small, subcompact, or compact) are essential to the agency's mission;</P>
              <P>(3) Internal approvals have been received; and</P>
              <P>(4) The General Services Administration has advised that it cannot furnish the vehicles.</P>
              <P>(b) With respect to requirements for leasing motor vehicles for a period of less than 60 days, the contracting officer need not obtain the certification specified in 8.1102(a)—</P>
              <P>(1) If the requirement is for type 1A, 1B, or II vehicles, which are by definition fuel efficient; or</P>
              <P>(2) If the requirement is for passenger vehicles larger than 1A, 1B, or II, and the agency has established procedures for advance approval, on a case-by-case basis, of such requirements.</P>
              <P>(c) Generally, solicitations shall not be limited to current-year production models. However, with the prior approval of the head of the contracting office, solicitations may be limited to current models on the basis of overall economy.</P>
              <CITA>[48 FR 42129, Sept. 19, 1983, as amended at 55 FR 25527, June 21, 1990]</CITA>
            </SECTION>
            <SECTION>
              <PRTPAGE P="146"/>
              <SECTNO>8.1103</SECTNO>
              <SUBJECT>Contract requirements.</SUBJECT>
              <P>Contracting officers shall include the following items in each contract for leasing motor vehicles:</P>
              <P>(a) Scope of contract.</P>
              <P>(b) Method of computing payments.</P>
              <P>(c) A listing of the number and type of vehicles required, and the equipment and accessories to be provided with each vehicle.</P>
              <P>(d) Responsibilities of the contractor or the Government for furnishing gasoline, motor oil, antifreeze, and similar items.</P>
              <P>(e) Unless it is determined that it will be more economical for the Government to perform the work, a statement that the contractor shall perform all maintenance on the vehicles.</P>
              <P>(f) A statement as to the applicability of pertinent State and local laws and regulations, and the responsibility of each party for compliance with them.</P>
              <P>(g) Responsibilities of the contractor or the Government for emergency repairs and services.</P>
            </SECTION>
            <SECTION>
              <SECTNO>8.1104</SECTNO>
              <SUBJECT>Contract clauses.</SUBJECT>
              <P>Insert the following clauses in solicitations and contracts for leasing of motor vehicles, unless the motor vehicles are leased in foreign countries:</P>
              <P>(a) The clause at 52.208-4, Vehicle Lease Payments.</P>
              <P>(b) The clause at 52.208-5, Condition of Leased Vehicles.</P>
              <P>(c) The clause at 52.208-6, Marking of Leased Vehicles.</P>
              <P>(d) A clause substantially the same as the clause at 52.208-7, Tagging of Leased Vehicles, for vehicles leased over 60 days (see subpart B of 41 CFR 102-34).</P>
              <P>(e) The provisions and clauses prescribed elsewhere in the FAR for solicitations and contracts for supplies when a fixed-price contract is contemplated, but excluding—</P>
              <P>(1) The clause at 52.211-16, Variation in Quantity;</P>
              <P>(2) The clause at 52.232-1, Payments;</P>
              <P>(3) The clause at 52.222-20, Walsh-Healey Public Contracts Act; and</P>
              <P>(4) The clause at 52.246-16, Responsibility for Supplies.</P>
              <CITA>[48 FR 42129, Sept. 19, 1983, as amended at 51 FR 19714, May 30, 1986; 60 FR 48237, Sept. 18, 1995; 68 FR 28080, May 22, 2003]</CITA>
            </SECTION>
          </SUBPART>
        </PART>
        <PART>
          <EAR>Pt. 9</EAR>
          <HD SOURCE="HED">PART 9—CONTRACTOR QUALIFICATIONS</HD>
          <CONTENTS>
            <SECHD>Sec.</SECHD>
            <SECTNO>9.000</SECTNO>
            <SUBJECT>Scope of part.</SUBJECT>
            <SUBPART>
              <HD SOURCE="HED">Subpart 9.1—Responsible Prospective Contractors</HD>
              <SECTNO>9.100</SECTNO>
              <SUBJECT>Scope of subpart.</SUBJECT>
              <SECTNO>9.101</SECTNO>
              <SUBJECT>Definition.</SUBJECT>
              <SECTNO>9.102</SECTNO>
              <SUBJECT>Applicability.</SUBJECT>
              <SECTNO>9.103</SECTNO>
              <SUBJECT>Policy.</SUBJECT>
              <SECTNO>9.104</SECTNO>
              <SUBJECT>Standards.</SUBJECT>
              <SECTNO>9.104-1</SECTNO>
              <SUBJECT>General standards.</SUBJECT>
              <SECTNO>9.104-2</SECTNO>
              <SUBJECT>Special standards.</SUBJECT>
              <SECTNO>9.104-3</SECTNO>
              <SUBJECT>Application of standards.</SUBJECT>
              <SECTNO>9.104-4</SECTNO>
              <SUBJECT>Subcontractor responsibility.</SUBJECT>
              <SECTNO>9.105</SECTNO>
              <SUBJECT>Procedures.</SUBJECT>
              <SECTNO>9.105-1</SECTNO>
              <SUBJECT>Obtaining information.</SUBJECT>
              <SECTNO>9.105-2</SECTNO>
              <SUBJECT>Determinations and documentation.</SUBJECT>
              <SECTNO>9.105-3</SECTNO>
              <SUBJECT>Disclosure of preaward information.</SUBJECT>
              <SECTNO>9.106</SECTNO>
              <SUBJECT>Preaward surveys.</SUBJECT>
              <SECTNO>9.106-1</SECTNO>
              <SUBJECT>Conditions for preaward surveys.</SUBJECT>
              <SECTNO>9.106-2</SECTNO>
              <SUBJECT>Requests for preaward surveys.</SUBJECT>
              <SECTNO>9.106-3</SECTNO>
              <SUBJECT>Interagency preaward surveys.</SUBJECT>
              <SECTNO>9.106-4</SECTNO>
              <SUBJECT>Reports.</SUBJECT>
              <SECTNO>9.107</SECTNO>
              <SUBJECT>Surveys of nonprofit agencies serving people who are blind or have other severe disabilities under the Javits-Wagner-O'Day (JWOD) Program.</SUBJECT>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart 9.2—Qualifications Requirements</HD>
              <SECTNO>9.200</SECTNO>
              <SUBJECT>Scope of subpart.</SUBJECT>
              <SECTNO>9.201</SECTNO>
              <SUBJECT>Definitions.</SUBJECT>
              <SECTNO>9.202</SECTNO>
              <SUBJECT>Policy.</SUBJECT>
              <SECTNO>9.203</SECTNO>
              <SUBJECT>QPL's, QML's, and QBL's.</SUBJECT>
              <SECTNO>9.204</SECTNO>
              <SUBJECT>Responsibilities for establishment of a qualification requirement.</SUBJECT>
              <SECTNO>9.205</SECTNO>
              <SUBJECT>Opportunity for qualification before award.</SUBJECT>
              <SECTNO>9.206</SECTNO>
              <SUBJECT>Acquisitions subject to qualification requirements.</SUBJECT>
              <SECTNO>9.206-1</SECTNO>
              <SUBJECT>General.</SUBJECT>
              <SECTNO>9.206-2</SECTNO>
              <SUBJECT>Contract clause.</SUBJECT>
              <SECTNO>9.206-3</SECTNO>
              <SUBJECT>Competition.</SUBJECT>
              <SECTNO>9.207</SECTNO>
              <SUBJECT>Changes in status regarding qualification requirements.</SUBJECT>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart 9.3—First Article Testing and Approval</HD>
              <SECTNO>9.301</SECTNO>
              <SUBJECT>Definition.</SUBJECT>
              <SECTNO>9.302</SECTNO>
              <SUBJECT>General.</SUBJECT>
              <SECTNO>9.303</SECTNO>
              <SUBJECT>Use.</SUBJECT>
              <SECTNO>9.304</SECTNO>
              <SUBJECT>Exceptions.</SUBJECT>
              <SECTNO>9.305</SECTNO>
              <SUBJECT>Risk.</SUBJECT>
              <SECTNO>9.306</SECTNO>
              <SUBJECT>Solicitation requirements.</SUBJECT>
              <SECTNO>9.307</SECTNO>
              <SUBJECT>Government administration procedures.</SUBJECT>
              <SECTNO>9.308</SECTNO>
              <SUBJECT>Contract clauses.</SUBJECT>
              <SECTNO>9.308-1</SECTNO>
              <SUBJECT>Testing performed by the contractor.</SUBJECT>
              <SECTNO>9.308-2</SECTNO>
              <SUBJECT>Testing performed by the Government.</SUBJECT>
            </SUBPART>
            <SUBPART>
              <PRTPAGE P="147"/>
              <HD SOURCE="HED">Subpart 9.4—Debarment, Suspension, and Ineligibility</HD>
              <SECTNO>9.400</SECTNO>
              <SUBJECT>Scope of subpart.</SUBJECT>
              <SECTNO>9.401</SECTNO>
              <SUBJECT>Applicability.</SUBJECT>
              <SECTNO>9.402</SECTNO>
              <SUBJECT>Policy.</SUBJECT>
              <SECTNO>9.403</SECTNO>
              <SUBJECT>Definitions.</SUBJECT>
              <SECTNO>9.404</SECTNO>
              <SUBJECT>List of Parties Excluded from Federal Procurement and Nonprocurement Programs.</SUBJECT>
              <SECTNO>9.405</SECTNO>
              <SUBJECT>Effect of listing.</SUBJECT>
              <SECTNO>9.405-1</SECTNO>
              <SUBJECT>Continuation of current contracts.</SUBJECT>
              <SECTNO>9.405-2</SECTNO>
              <SUBJECT>Restrictions on subcontracting.</SUBJECT>
              <SECTNO>9.406</SECTNO>
              <SUBJECT>Debarment.</SUBJECT>
              <SECTNO>9.406-1</SECTNO>
              <SUBJECT>General.</SUBJECT>
              <SECTNO>9.406-2</SECTNO>
              <SUBJECT>Causes for debarment.</SUBJECT>
              <SECTNO>9.406-3</SECTNO>
              <SUBJECT>Procedures.</SUBJECT>
              <SECTNO>9.406-4</SECTNO>
              <SUBJECT>Period of debarment.</SUBJECT>
              <SECTNO>9.406-5</SECTNO>
              <SUBJECT>Scope of debarment.</SUBJECT>
              <SECTNO>9.407</SECTNO>
              <SUBJECT>Suspension.</SUBJECT>
              <SECTNO>9.407-1</SECTNO>
              <SUBJECT>General.</SUBJECT>
              <SECTNO>9.407-2</SECTNO>
              <SUBJECT>Causes for suspension.</SUBJECT>
              <SECTNO>9.407-3</SECTNO>
              <SUBJECT>Procedures.</SUBJECT>
              <SECTNO>9.407-4</SECTNO>
              <SUBJECT>Period of suspension.</SUBJECT>
              <SECTNO>9.407-5</SECTNO>
              <SUBJECT>Scope of suspension.</SUBJECT>
              <SECTNO>9.408</SECTNO>
              <SUBJECT>Certification regarding debarment, suspension, proposed debarment, and other responsibility matters.</SUBJECT>
              <SECTNO>9.409</SECTNO>
              <SUBJECT>Solicitation provision and contract clause.</SUBJECT>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart 9.5—Organizational and Consultant Conflicts of Interest</HD>
              <SECTNO>9.500</SECTNO>
              <SUBJECT>Scope of subpart.</SUBJECT>
              <SECTNO>9.501</SECTNO>
              <SUBJECT>Definition.</SUBJECT>
              <SECTNO>9.502</SECTNO>
              <SUBJECT>Applicability.</SUBJECT>
              <SECTNO>9.503</SECTNO>
              <SUBJECT>Waiver.</SUBJECT>
              <SECTNO>9.504</SECTNO>
              <SUBJECT>Contracting officer responsibilities.</SUBJECT>
              <SECTNO>9.505</SECTNO>
              <SUBJECT>General rules.</SUBJECT>
              <SECTNO>9.505-1</SECTNO>
              <SUBJECT>Providing systems engineering and technical direction.</SUBJECT>
              <SECTNO>9.505-2</SECTNO>
              <SUBJECT>Preparing specifications or work statements.</SUBJECT>
              <SECTNO>9.505-3</SECTNO>
              <SUBJECT>Providing evaluation services.</SUBJECT>
              <SECTNO>9.505-4</SECTNO>
              <SUBJECT>Obtaining access to proprietary information.</SUBJECT>
              <SECTNO>9.506</SECTNO>
              <SUBJECT>Procedures.</SUBJECT>
              <SECTNO>9.507</SECTNO>
              <SUBJECT>Solicitation provisions and contract clause.</SUBJECT>
              <SECTNO>9.507-1</SECTNO>
              <SUBJECT>Solicitation provisions.</SUBJECT>
              <SECTNO>9.507-2</SECTNO>
              <SUBJECT>Contract clause.</SUBJECT>
              <SECTNO>9.508</SECTNO>
              <SUBJECT>Examples.</SUBJECT>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart 9.6—Contractor Team Arrangements</HD>
              <SECTNO>9.601</SECTNO>
              <SUBJECT>Definition.</SUBJECT>
              <SECTNO>9.602</SECTNO>
              <SUBJECT>General.</SUBJECT>
              <SECTNO>9.603</SECTNO>
              <SUBJECT>Policy.</SUBJECT>
              <SECTNO>9.604</SECTNO>
              <SUBJECT>Limitations.</SUBJECT>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart 9.7—Defense Production Pools and Research and Development Pools</HD>
              <SECTNO>9.701</SECTNO>
              <SUBJECT>Definition.</SUBJECT>
              <SECTNO>9.702</SECTNO>
              <SUBJECT>Contracting with pools.</SUBJECT>
              <SECTNO>9.703</SECTNO>
              <SUBJECT>Contracting with individual pool members.</SUBJECT>
            </SUBPART>
          </CONTENTS>
          <AUTH>
            <HD SOURCE="HED">Authority:</HD>
            <P>40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 42 U.S.C. 2473(c).</P>
          </AUTH>
          <AUTH>
            <HD SOURCE="HED">Authority:</HD>
            <P>40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 42 U.S.C. 2473(c).</P>
          </AUTH>
          <SOURCE>
            <HD SOURCE="HED">Source:</HD>
            <P>48 FR 42142, Sept. 19, 1983, unless otherwise noted.</P>
          </SOURCE>
          <SECTION>
            <SECTNO>9.000</SECTNO>
            <SUBJECT>Scope of part.</SUBJECT>
            <P>This part prescribes policies, standards, and procedures pertaining to prospective contractors' responsibility; debarment, suspension, and ineligibility; qualified products; first article testing and approval; contractor team arrangements; defense production pools and research and development pools; and organizational conflicts of interest.</P>
          </SECTION>
          <SUBPART>
            <HD SOURCE="HED">Subpart 9.1—Responsible Prospective Contractors</HD>
            <SECTION>
              <SECTNO>9.100</SECTNO>
              <SUBJECT>Scope of subpart.</SUBJECT>
              <P>This subpart prescribes policies, standards, and procedures for determining whether prospective contractors and subcontractors are responsible.</P>
            </SECTION>
            <SECTION>
              <SECTNO>9.101</SECTNO>
              <SUBJECT>Definition.</SUBJECT>
              <P>
                <E T="03">Surveying activity,</E> as used in this subpart, means the cognizant contract administration office or, if there is no such office, another organization designated by the agency to conduct preaward surveys.</P>
              <CITA>[48 FR 42142, Sept. 19, 1983, as amended at 66 FR 2128, Jan. 10, 2001]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>9.102</SECTNO>
              <SUBJECT>Applicability.</SUBJECT>
              <P>(a) This subpart applies to all proposed contracts with any prospective contractor that is located—</P>
              <P>(1) In the United States or its outlying areas; or</P>
              <P>(2) Elsewhere, unless application of the subpart would be inconsistent with the laws or customs where the contractor is located.</P>

              <P>(b) This subpart does not apply to proposed contracts with (1) foreign, State, or local governments; (2) other U.S. Government agencies or their instrumentalities; or (3) agencies for the <PRTPAGE P="148"/>blind or other severely handicapped (see subpart 8.7).</P>
              <CITA>[48 FR 42142, Sept. 19, 1983, as amended at 68 FR 28080, May 22, 2003]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>9.103</SECTNO>
              <SUBJECT>Policy.</SUBJECT>
              <P>(a) Purchases shall be made from, and contracts shall be awarded to, responsible prospective contractors only.</P>
              <P>(b) No purchase or award shall be made unless the contracting officer makes an affirmative determination of responsibility. In the absence of information clearly indicating that the prospective contractor is responsible, the contracting officer shall make a determination of nonresponsibility. If the prospective contractor is a small business concern, the contracting officer shall comply with subpart 19.6, Certificates of Competency and Determinations of Responsibility. (If Section 8(a) of the Small Business Act (15 U.S.C. 637) applies, see subpart 19.8.)</P>
              <P>(c) The award of a contract to a supplier based on lowest evaluated price alone can be false economy if there is subsequent default, late deliveries, or other unsatisfactory performance resulting in additional contractual or administrative costs. While it is important that Government purchases be made at the lowest price, this does not require an award to a supplier solely because that supplier submits the lowest offer. A prospective contractor must affirmatively demonstrate its responsibility, including, when necessary, the responsibility of its proposed subcontractors.</P>
              <CITA>[48 FR 42142, Sept. 19, 1983, as amended at 61 FR 67410, Dec. 20, 1996; 62 FR 44819, Aug. 22, 1997; 62 FR 48921, Sept. 17, 1997; 65 FR 80264, Dec. 20, 2000; 66 FR 17755, Apr. 3, 2001; 66 FR 66986, 66989, Dec. 27, 2001]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>9.104</SECTNO>
              <SUBJECT>Standards.</SUBJECT>
            </SECTION>
            <SECTION>
              <SECTNO>9.104-1</SECTNO>
              <SUBJECT>General standards.</SUBJECT>
              <P>To be determined responsible, a prospective contractor must—</P>
              <P>(a) Have adequate financial resources to perform the contract, or the ability to obtain them (see 9.104-3(a));</P>
              <P>(b) Be able to comply with the required or proposed delivery or performance schedule, taking into consideration all existing commercial and governmental business commitments;</P>
              <P>(c) Have a satisfactory performance record (see 48 CFR 9.104-3(b) and part 42, subpart 42.15). A prospective contractor shall not be determined responsible or nonresponsible solely on the basis of a lack of relevant performance history, except as provided in 9.104-2;</P>
              <P>(d) Have a satisfactory record of integrity and business ethics;</P>
              <P>(e) Have the necessary organization, experience, accounting and operational controls, and technical skills, or the ability to obtain them (including, as appropriate, such elements as production control procedures, property control systems, quality assurance measures, and safety programs applicable to materials to be produced or services to be performed by the prospective contractor and subcontractors) (see 9.104-3(a));</P>
              <P>(f) Have the necessary production, construction, and technical equipment and facilities, or the ability to obtain them (see 9.104-3(a)); and</P>
              <P>(g) Be otherwise qualified and eligible to receive an award under applicable laws and regulations.</P>
              <CITA>[48 FR 42142, Sept. 19, 1983, as amended at 51 FR 27119, July 29, 1986; 56 FR 55374, Oct. 25, 1991; 60 FR 16718, Mar. 31, 1995; 61 FR 67410, Dec. 20, 1996; 65 FR 80264, Dec. 20, 2000; 66 FR 17756, Apr. 3, 2001; 66 FR 66986, 66989, Dec. 27, 2001]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>9.104-2</SECTNO>
              <SUBJECT>Special standards.</SUBJECT>
              <P>(a) When it is necessary for a particular acquisition or class of acquisitions, the contracting officer shall develop, with the assistance of appropriate specialists, special standards of responsibility. Special standards may be particularly desirable when experience has demonstrated that unusual expertise or specialized facilities are needed for adequate contract performance. The special standards shall be set forth in the solicitation (and so identified) and shall apply to all offerors.</P>
              <P>(b) Contracting officers shall award contracts for subsistence only to those prospective contractors that meet the general standards in 9.104-1 and are approved in accordance with agency sanitation standards and procedures.</P>
            </SECTION>
            <SECTION>
              <PRTPAGE P="149"/>
              <SECTNO>9.104-3</SECTNO>
              <SUBJECT>Application of standards.</SUBJECT>
              <P>(a) <E T="03">Ability to obtain resources.</E> Except to the extent that a prospective contractor has sufficient resources or proposes to perform the contract by subcontracting, the contracting officer shall require acceptable evidence of the prospective contractor's ability to obtain required resources (see 9.104-1(a), (e), and (f)). Acceptable evidence normally consists of a commitment or explicit arrangement, that will be in existence at the time of contract award, to rent, purchase, or otherwise acquire the needed facilities, equipment, other resources, or personnel. Consideration of a prime contractor's compliance with limitations on subcontracting shall take into account the time period covered by the contract base period or quantites plus option periods or quantities, if such options are considered when evaluating offers for award.</P>
              <P>(b) <E T="03">Satisfactory performance record.</E> A prospective contractor that is or recently has been seriously deficient in contract performance shall be presumed to be nonresponsible, unless the contracting officer determines that the circumstances were properly beyond the contractor's control, or that the contractor has taken appropriate corrective action. Past failure to apply sufficient tenacity and perseverance to perform acceptably is strong evidence of nonresponsibility. Failure to meet the quality requirements of the contract is a significant factor to consider in determining satisfactory performance. The contracting officer shall consider the number of contracts involved and the extent of deficient performance in each contract when making this determination. If the pending contract requires a subcontracting plan pursuant to Subpart 19.7, The Small Business Subcontracting Program, the contracting officer shall also consider the prospective contractor's compliance with subcontracting plans under recent contracts.</P>
              <P>(c) <E T="03">Affiliated concerns.</E> Affiliated concerns (see <E T="03">Concern</E> in 19.001 and <E T="03">Affiliates</E> in 19.101) are normally considered separate entities in determining whether the concern that is to perform the contract meets the applicable standards for responsibility. However, the contracting officer shall consider the affiliate's past performance and integrity when they may adversely affect the prospective contractor's responsibility.</P>
              <P>(d)(1) <E T="03">Small business concerns.</E> If a small business concern's offer that would otherwise be accepted is to be rejected because of a determination of nonresponsibility, the contracting officer shall refer the matter to the Small Business Administration, which will decide whether or not to issue a Certificate of Competency (see subpart 19.6).</P>
              <P>(2) A small business that is unable to comply with the limitations on subcontracting at 52.219-14 may be considered nonresponsible.</P>
              <CITA>[48 FR 42142, Sept. 19, 1983, as amended at 53 FR 27463, July 20, 1988; 53 FR 34226, Sept. 2, 1988; 56 FR 55378, Oct. 25, 1991; 60 FR 48260, Sept. 18, 1995; 61 FR 67410, Dec. 20, 1996; 62 FR 44820, Aug. 22, 1997; 63 FR 70267, Dec. 18, 1998; 65 FR 80264, Dec. 20, 2000; 66 FR 66989, Dec. 27, 2001; 67 FR 13068, Mar. 20, 2002]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>9.104-4</SECTNO>
              <SUBJECT>Subcontractor responsibility.</SUBJECT>
              <P>(a) Generally, prospective prime contractors are responsible for determining the responsibility of their prospective subcontractors (but see 9.405 and 9.405-2 regarding debarred, ineligible, or suspended firms). Determinations of prospective subcontractor responsibility may affect the Government's determination of the prospective prime contractor's responsibility. A prospective contractor may be required to provide written evidence of a proposed subcontractor's responsibility.</P>
              <P>(b) When it is in the Government's interest to do so, the contracting officer may directly determine a prospective subcontractor's responsibility (e.g., when the prospective contract involves medical supplies, urgent requirements, or substantial subcontracting). In this case, the same standards used to determine a prime contractor's responsibility shall be used by the Government to determine subcontractor responsibility.</P>
            </SECTION>
            <SECTION>
              <SECTNO>9.105</SECTNO>
              <SUBJECT>Procedures.</SUBJECT>
            </SECTION>
            <SECTION>
              <SECTNO>9.105-1</SECTNO>
              <SUBJECT>Obtaining information.</SUBJECT>

              <P>(a) Before making a determination of responsibility, the contracting officer <PRTPAGE P="150"/>shall possess or obtain information sufficient to be satisfied that a prospective contractor currently meets the applicable standards in 9.104.</P>
              <P>(b)(1) Generally, the contracting officer shall obtain information regarding the responsibility of prospective contractors, including requesting preaward surveys when necessary (see 9.106), promptly after a bid opening or receipt of offers. However, in negotiated contracting, especially when research and development is involved, the contracting officer may obtain this information before issuing the request for proposals. Requests for information shall ordinarily be limited to information concerning (i) the low bidder or (ii) those offerors in range for award.</P>
              <P>(2) Preaward surveys shall be managed and conducted by the surveying activity.</P>
              <P>(i) If the surveying activity is a contract administration office—</P>
              <P>(A) That office shall advise the contracting officer on prospective contractors' financial competence and credit needs; and</P>
              <P>(B) The administrative contracting officer shall obtain from the auditor any information required concerning the adequacy of prospective contractors' accounting systems and these systems' suitability for use in administering the proposed type of contract.</P>
              <P>(ii) If the surveying activity is not a contract administration office, the contracting officer shall obtain from the auditor any information required concerning prospective contractors' financial competence and credit needs, the adequacy of their accounting systems, and these systems' suitability for use in administering the proposed type of contract.</P>
              <P>(3) Information on financial resources and performance capability shall be obtained or updated on as current a basis as is feasible up to the date of award.</P>
              <P>(c) In making the determination of responsibility (see 9.104-1(c)), the contracting officer shall consider relevant past performance information (see subpart 42.15). In addition, the contracting officer should use the following sources of information to support such determinations:</P>
              <P>(1) The Excluded Parties List System maintained in accordance with Subpart 9.4.</P>
              <P>(2) Records and experience data, including verifiable knowledge of personnel within the contracting office, audit offices, contract administration offices, and other contracting offices.</P>
              <P>(3) The prospective contractor—including bid or proposal information, questionnaire replies, financial data, information on production equipment, and personnel information.</P>
              <P>(4) Commercial sources of supplier information of a type offered to buyers in the private sector.</P>
              <P>(5) Preaward survey reports (see 9.106).</P>
              <P>(6) Other sources such as publications; suppliers, subcontractors, and customers of the prospective contractor; financial institutions; Government agencies; and business and trade associations.</P>
              <P>(7) If the contract is for construction, the contracting officer may consider performance evaluation reports (see 36.201(c)(2)).</P>
              <P>(d) Contracting offices and cognizant contract administration offices that become aware of circumstances casting doubt on a contractor's ability to perform contracts successfully shall promptly exchange relevant information.</P>
              <CITA>[48 FR 42142, Sept. 19, 1983, as amended at 51 FR 27119, July 29, 1986; 52 FR 9038, Mar. 20, 1987; 54 FR 19813, May 8, 1989; 60 FR 16718, Mar. 31, 1995; 60 FR 33065, June 26, 1995; 61 FR 39201, July 26, 1996; 69 FR 76349, Dec. 20, 2004]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>9.105-2</SECTNO>
              <SUBJECT>Determinations and documentation.</SUBJECT>
              <P>(a) <E T="03">Determinations.</E> (1) The contracting officer's signing of a contract constitutes a determination that the prospective contractor is responsible with respect to that contract. When an offer on which an award would otherwise be made is rejected because the prospective contractor is found to be nonresponsible, the contracting officer shall make, sign, and place in the contract file a determination of nonresponsibility, which shall state the basis for the determination.</P>

              <P>(2) If the contracting officer determines and documents that a responsive small business lacks certain elements <PRTPAGE P="151"/>of responsibility, the contracting officer shall comply with the procedures in subpart 19.6. When a certificate of competency is issued for a small business concern (see subpart 19.6), the contracting officer may accept the factors covered by the certificate without further inquiry.</P>
              <P>(b) <E T="03">Support documentation.</E> Documents and reports supporting a determination of responsibility or nonresponsibility, including any preaward survey reports and any applicable Certificate of Competency, must be included in the contract file.</P>
            </SECTION>
            <SECTION>
              <SECTNO>9.105-3</SECTNO>
              <SUBJECT>Disclosure of preaward information.</SUBJECT>
              <P>(a) Except as provided in subpart 24.2, Freedom of Information Act, information (including the preaward survey report) accumulated for purposes of determining the responsibility of a prospective contractor shall not be released or disclosed outside the Government.</P>
              <P>(b) The contracting officer may discuss preaward survey information with the prospective contractor before determining responsibility. After award, the contracting officer or, if it is appropriate, the head of the surveying activity or a designee may discuss the findings of the preaward survey with the company surveyed.</P>
              <P>(c) Preaward survey information may contain proprietary or source selection information and should be marked with the appropriate legend and protected accordingly (see 3.104-4).</P>
              <CITA>[48 FR 42142, Sept. 19, 1983, as amended by 54 FR 20496, May 11, 1989; 62 FR 232, Jan. 2, 1997; 67 FR 13063, Mar. 20, 2002]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>9.106</SECTNO>
              <SUBJECT>Preaward surveys.</SUBJECT>
            </SECTION>
            <SECTION>
              <SECTNO>9.106-1</SECTNO>
              <SUBJECT>Conditions for preaward surveys.</SUBJECT>
              <P>(a) A preaward survey is normally required only when the information on hand or readily available to the contracting officer, including information from commercial sources, is not sufficient to make a determination regarding responsibility. In addition, if the contemplated contract will have a fixed price at or below the simplified acquisition threshold or will involve the acquisition of commercial items (see part 12), the contracting officer should not request a preaward survey unless circumstances justify its cost.</P>
              <P>(b) When a cognizant contract administration office becomes aware of a prospective award to a contractor about which unfavorable information exists and no preaward survey has been requested, it shall promptly obtain and transmit details to the contracting officer.</P>
              <P>(c) Before beginning a preaward survey, the surveying activity shall ascertain whether the prospective contractor is debarred, suspended, or ineligible (see subpart 9.4). If the prospective contractor is debarred, suspended, or ineligible, the surveying activity shall advise the contracting officer promptly and not proceed with the preaward survey unless specifically requested to do so by the contracting officer.</P>
              <CITA>[48 FR 42142, Sept. 19, 1983, as amended at 51 FR 27489, July 31, 1986; 60 FR 48237, Sept. 18, 1995; 61 FR 39201, July 26, 1996]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>9.106-2</SECTNO>
              <SUBJECT>Requests for preaward surveys.</SUBJECT>
              <P>The contracting officer's request to the surveying activity (Preaward Survey of Prospective Contractor (General), SF 1403) shall—</P>
              <P>(a) Identify additional factors about which information is needed;</P>
              <P>(b) Include the complete solicitation package (unless it has previously been furnished), and any information indicating prior unsatisfactory performance by the prospective contractor;</P>
              <P>(c) State whether the contracting office will participate in the survey;</P>
              <P>(d) Specify the date by which the report is required. This date should be consistent with the scope of the survey requested and normally shall allow at least 7 working days to conduct the survey; and</P>
              <P>(e) When appropriate, limit the scope of the survey.</P>
            </SECTION>
            <SECTION>
              <SECTNO>9.106-3</SECTNO>
              <SUBJECT>Interagency preaward surveys.</SUBJECT>

              <P>When the contracting office and the surveying activity are in different agencies, the procedures of this section 9.106 and subpart 42.1 shall be followed along with the regulations of the agency in which the surveying activity is located, except that reasonable special <PRTPAGE P="152"/>requests by the contracting office shall be accommodated.</P>
              <CITA>[48 FR 42142, Sept. 19, 1983, as amended at 54 FR 20496, May 11, 1989; 55 FR 36795, Sept. 6, 1990; 62 FR 232, Jan. 2, 1997]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>9.106-4</SECTNO>
              <SUBJECT>Reports.</SUBJECT>
              <P>(a) The surveying activity shall complete the applicable parts of SF 1403, Preaward Survey of Prospective Contractor (General); SF 1404, Preaward Survey of Prospective Contractor—Technical; SF 1405, Preaward Survey of Prospective Contractor—Production; SF 1406, Preaward Survey of Prospective Contractor—Quality Assurance; SF 1407, Preaward Survey of Prospective Contractor—Financial Capability; and SF 1408, Preaward Survey of Prospective Contractor—Accounting System; and provide a narrative discussion sufficient to support both the evaluation ratings and the recommendations.</P>
              <P>(b) When the contractor surveyed is a small business that has received preferential treatment on an ongoing contract under Section 8(a) of the Small Business Act (15 U.S.C. 637) or has received a Certificate of Competency during the last 12 months, the surveying activity shall consult the appropriate Small Business Administration field office before making an affirmative recommendation regarding the contractor's responsibility or nonresponsibility.</P>
              <P>(c) When a preaward survey discloses previous unsatisfactory performance, the surveying activity shall specify the extent to which the prospective contractor plans, or has taken, corrective action. Lack of evidence that past failure to meet contractual requirements was the prospective contractor's fault does not necessarily indicate satisfactory performance. The narrative shall report any persistent pattern of need for costly and burdensome Government assistance (e.g., engineering, inspection, or testing) provided in the Government's interest but not contractually required.</P>
              <P>(d) When the surveying activity possesses information that supports a recommendation of complete award without an on-site survey and no special areas for investigation have been requested, the surveying activity may provide a short-form preaward survey report. The short-form report shall consist solely of the Preaward Survey of Prospective Contractor (General), SF 1403. Sections III and IV of this form shall be completed and block 21 shall be checked to show that the report is a short-form preaward report.</P>
            </SECTION>
            <SECTION>
              <SECTNO>9.107</SECTNO>
              <SUBJECT>Surveys of nonprofit agencies serving people who are blind or have other severe disabilities under the Javits-Wagner-O'Day (JWOD) Program.</SUBJECT>
              <P>(a) The Committee for Purchase From People Who Are Blind or Severely Disabled (Committee), as authorized by 41 U.S.C. 46-48c, determines what supplies and services Federal agencies are required to purchase from JWOD participating nonprofit agencies serving people who are blind or have other severe disabilities (see subpart 8.7). The Committee is required to find a JWOD participating nonprofit agency capable of furnishing the supplies or services before the nonprofit agency can be designated as a mandatory source under the JWOD Program. The Committee may request a contracting office to assist in assessing the capabilities of a nonprofit agency.</P>
              <P>(b) The contracting office, upon request from the Committee, shall request a capability survey from the activity responsible for performing preaward surveys, or notify the Committee that the JWOD participating nonprofit agency is capable, with supporting rationale, and that the survey is waived. The capability survey will focus on the technical and production capabilities and applicable preaward survey elements to furnish specific supplies or services being considered for addition to the Procurement List.</P>
              <P>(c) The contracting office shall use the Standard Form 1403 to request a capability survey of organizations employing people who are blind or have other severe disabilities.</P>
              <P>(d) The contracting office shall furnish a copy of the completed survey, or notice that the JWOD participating nonprofit agency is capable and the survey is waived, to the Executive Director, Committee for Purchase from People Who Are Blind or Severely Disabled.</P>
              <CITA>[59 FR 67029, Dec. 28, 1994]</CITA>
            </SECTION>
          </SUBPART>
          <SUBPART>
            <PRTPAGE P="153"/>
            <HD SOURCE="HED">Subpart 9.2—Qualifications Requirements</HD>
            <SOURCE>
              <HD SOURCE="HED">Source:</HD>
              <P>50 FR 35476, Aug. 30, 1985, unless otherwise noted.</P>
            </SOURCE>
            <SECTION>
              <SECTNO>9.200</SECTNO>
              <SUBJECT>Scope of subpart.</SUBJECT>
              <P>This subpart implements 10 U.S.C. 2319 and 41 U.S.C. 253(e) and prescribes policies and procedures regarding qualification requirements and the acquisitions that are subject to such requirements.</P>
            </SECTION>
            <SECTION>
              <SECTNO>9.201</SECTNO>
              <SUBJECT>Definitions.</SUBJECT>
              <P>As used in this subpart—</P>
              <P>
                <E T="03">Qualified bidders list (QBL)</E> means a list of bidders who have had their products examined and tested and who have satisfied all applicable qualification requirements for that product or have otherwise satisfied all applicable qualification requirements.</P>
              <P>
                <E T="03">Qualified manufacturers list (QML)</E> means a list of manufacturers who have had their products examined and tested and who have satisfied all applicable qualification requirements for that product.</P>
              <CITA>[50 FR 35476, Aug. 30, 1985, as amended at 53 FR 34227, Sept. 2, 1988; 66 FR 2128, Jan. 10, 2001]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>9.202</SECTNO>
              <SUBJECT>Policy.</SUBJECT>
              <P>(a)(1) The head of the agency or designee shall, before establishing a qualification requirement, prepare a written justification—</P>
              <P>(i) Stating the necessity for establishing the qualification requirement and specifying why the qualification requirement must be demonstrated before contract award;</P>
              <P>(ii) Estimating the likely costs for testing and evaluation which will be incurred by the potential offeror to become qualified; and</P>
              <P>(iii) Specifying all requirements that a potential offeror (or its product) must satisfy in order to become qualified. Only those requirements which are the least restrictive to meet the purposes necessitating the establishment of the qualification requirements shall be specified.</P>
              <P>(2) Upon request to the contracting activity, potential offerors shall be provided—</P>
              <P>(i) All requirements that they or their products must satisfy to become qualified;</P>
              <P>(ii) At their expense (but see 9.204(a)(2) with regard to small businesses), a prompt opportunity to demonstrate their abilities to meet the standards specified for qualification using qualified personnel and facilities of the agency concerned, or of another agency obtained through interagency agreements, or under contract, or other methods approved by the agency (including use of approved testing and evaluation services not provided under contract to the agency).</P>
              <P>(3) If the services in (a)(2)(ii) above are provided by contract, the contractors selected to provide testing and evaluation services shall be—</P>
              <P>(i) Those that are not expected to benefit from an absence of additional qualified sources; and</P>
              <P>(ii) Required by their contracts to adhere to any restriction on technical data asserted by the potential offeror seeking qualification.</P>
              <P>(4) A potential offeror seeking qualification shall be promptly informed as to whether qualification is attained and, in the event it is not, promptly furnished specific reasons why qualification was not attained.</P>

              <P>(b) When justified under the circumstances, the agency activity responsible for establishing a qualification requirement shall submit to the competition advocate for the procuring activity responsible for purchasing the item subject to the qualification requirement, a determination that it is unreasonable to specify the standards for qualification which a prospective offeror (or its product) must satisfy. After considering any comments of the competition advocate reviewing the determination, the head of the procuring activity may waive the requirements of 9.202(a)(1)(ii) through (4) above for up to 2 years with respect to the item subject to the qualification requirement. A copy of the waiver shall be furnished to the head of the agency or other official responsible for actions under 9.202(a)(1). The waiver authority provided in this paragraph does not apply with respect to qualification requirements contained in a QPL, QML, or QBL.<PRTPAGE P="154"/>
              </P>
              <P>(c) If a potential offeror can demonstrate to the satisfaction of the contracting officer that the potential offeror (or its product) meets the standards established for qualification or can meet them before the date specified for award of the contract, a potential offeror may not be denied the opportunity to submit and have considered an offer for a contract solely because the potential offeror—</P>
              <P>(1) Is not on a QPL, QML, or QBL maintained by the Department of Defense (DOD) or the National Aeronautics and Space Administration (NASA); or</P>
              <P>(2) Has not been identified as meeting a qualification requirement established after October 19, 1984, by DOD or NASA; or</P>
              <P>(3) Has not been identified as meeting a qualification requirement established by a civilian agency (not including NASA).</P>
              <P>(d) The procedures in subpart 19.6 for referring matters to the Small Business Administration are not mandatory on the contracting officer when the basis for a referral would involve a challenge by the offeror to either the validity of the qualification requirement or the offeror's compliance with such requirement.</P>
              <P>(e) The contracting officer need not delay a proposed award in order to provide a potential offeror with an opportunity to demonstrate its ability to meet the standards specified for qualification. In addition, when approved by the head of an agency or designee, a procurement need not be delayed in order to comply with 9.202(a).</P>
              <P>(f) Within 7 years following enforcement of a QPL, QML, or QBL by DOD or NASA, or within 7 years after any qualification requirement was originally established by a civilian agency other than NASA, the qualification requirement shall be examined and revalidated in accordance with the requirements of 9.202(a). For DOD and NASA, qualification requirements, other than QPL's, QML's, and QBL's, shall be examined and revalidated within 7 years after establishment of the requirement under 9.202(a). Any periods for which a waiver under 9.202(b) is in effect shall be excluded in computing the 7 years within which review and revalidation must occur.</P>
              <CITA>[50 FR 35476, Aug. 30, 1985, as amended at 53 FR 34227, Sept. 2, 1988]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>9.203</SECTNO>
              <SUBJECT>QPL's, QML's, and QBL's.</SUBJECT>
              <P>(a) Qualification and listing in a QPL, QML, or QBL is the process by which products are obtained from manufacturers or distributors, examined and tested for compliance with specification requirements, or manufacturers or potential offerors, are provided an opportunity to demonstrate their abilities to meet the standards specified for qualification. The names of successful products, manufacturers, or potential offerors are included on lists evidencing their status. Generally, qualification is performed in advance and independently of any specific acquisition action. After qualification, the products, manufacturers, or potential offerors are included in a Federal or Military QPL, QML, or QBL. (See 9.202(a)(2) with regard to any product, manufacturer, or potential offeror not yet included on an applicable list.)</P>
              <P>(b) Specifications requiring a qualified product are included in the following publications:</P>
              <P>(1) GSA Index of Federal Specifications, Standards and Commercial Item Descriptions.</P>

              <P>(2) Department of Defense Acquisition Streamlining and Standardization Information System (ASSIST) at (<E T="03">http://assist.daps.dla.mil</E>).</P>
              <P>(c) Instructions concerning qualification procedures are included in the following publications:</P>
              <P>(1) Federal Standardization Manual, FSPM-0001.</P>
              <P>(2) Defense Standardization Manual 4120.24-M, Appendix 2, as amended by Military Standards 961 and 962.</P>
              <P>(d) The publications listed in paragraphs (b) and (c) of this section are sold to the public. The publications in paragraphs (b)(1) and (c)(1) of this section may be obtained from the addressee in 11.201(d)(1). The publications in paragraphs (b)(2) and (c)(2) of this section may be obtained from the addressee in 11.201(d)(2).</P>
              <CITA>[50 FR 35476, Aug. 30, 1985, as amended at 53 FR 17857, May 18, 1988; 63 FR 34062, June 22, 1998; 67 FR 6120, Feb. 8, 2002; 71 FR 227, Jan. 3, 2006]</CITA>
            </SECTION>
            <SECTION>
              <PRTPAGE P="155"/>
              <SECTNO>9.204</SECTNO>
              <SUBJECT>Responsibilities for establishment of a qualification requirement.</SUBJECT>
              <P>The responsibilities of agency activities that establish qualification requirements include the following:</P>
              <P>(a) Arranging publicity for the qualification requirements. If active competition on anticipated future qualification requirements is likely to be fewer than two manufacturers or the products of two manufacturers, the activity responsible for establishment of the qualification requirements must—</P>
              <P>(1) Periodically furnish through the Governmentwide point of entry (GPE) a notice seeking additional sources or products for qualification unless the contracting officer determines that such publication would compromise the national security.</P>
              <P>(2) Bear the cost of conducting the specified testing and evaluation (excluding the costs associated with producing the item or establishing the production, quality control, or other system to be tested and evaluated) for a small business concern or a product manufactured by a small business concern which has met the standards specified for qualification and which could reasonably be expected to compete for a contract for that requirement. However, such costs may be borne only if it is determined in accordance with agency procedures that such additional qualified sources or products are likely to result in cost savings from increased competition for future requirements sufficient to amortize the costs incurred by the agency within a reasonable period of time, considering the duration and dollar value of anticipated future requirements. A prospective contractor requesting the United States to bear testing and evaluation costs must certify as to its status as a small business concern under section 3 of the Small Business Act in order to receive further consideration.</P>
              <P>(b) Qualifying products that meet specification requirements.</P>
              <P>(c) Listing manufacturers and suppliers whose products are qualified in accordance with agency procedures.</P>
              <P>(d) Furnishing QPL's, OML's, or QBL's or the qualification requirements themselves to prospective offerors and the public upon request (see 9.202(a)(2)(i) above).</P>
              <P>(e) Clarifying, as necessary, qualification requirements.</P>
              <P>(f) In appropriate cases, when requested by the contracting officer, providing concurrence in a decision not to enforce a qualification requirement for a solicitation.</P>
              <P>(g) Withdrawing or omitting qualification of a listed product, manufacturer or offeror, as necessary.</P>
              <P>(h) Advising persons furnished any list of products, manufacturers or offerors meeting a qualification requirement and suppliers whose products are on any such list that—</P>
              <P>(1) The list does not constitute endorsement of the product, manufacturer, or other source by the Government;</P>
              <P>(2) The products or sources listed have been qualified under the latest applicable specification;</P>
              <P>(3) The list may be amended without notice;</P>
              <P>(4) The listing of a product or source does not release the supplier from compliance with the specification; and</P>
              <P>(5) Use of the list for advertising or publicity is permitted. However, it must not be stated or implied that a particular product or source is the only product or source of that type qualified, or that the Government in any way recommends or endorses the products or the sources listed.</P>
              <P>(i) Reexamining a qualified product or manufacturer when—</P>
              <P>(1) The manufacturer has modified its product, or changed the material or the processing sufficiently so that the validity of previous qualification is questionable;</P>
              <P>(2) The requirements in the specification have been amended or revised sufficiently to affect the character of the product; or</P>
              <P>(3) It is otherwise necessary to determine that the quality of the product is maintained in conformance with the specification.</P>
              <CITA>[50 FR 35476, Aug. 30, 1985, as amended at 66 FR 27413, May 16, 2001; 68 FR 56679, Oct. 1, 2003]</CITA>
            </SECTION>
            <SECTION>
              <PRTPAGE P="156"/>
              <SECTNO>9.205</SECTNO>
              <SUBJECT>Opportunity for qualification before award.</SUBJECT>
              <P>(a) If an agency determines that a qualification requirement is necessary, the agency activity responsible for establishing the requirement must urge manufacturers and other potential sources to demonstrate their ability to meet the standards specified for qualification and, when possible, give sufficient time to arrange for qualification before award. The responsible agency activity must, before establishing any qualification requirement, furnish notice through the GPE. The notice must include—</P>
              <P>(1) Intent to establish a qualification requirement;</P>
              <P>(2) The specification number and name of the product;</P>
              <P>(3) The name and address of the activity to which a request for the information and opportunity described in 9.202(a)(2) should be submitted;</P>
              <P>(4) The anticipated date that the agency will begin awarding contracts subject to the qualification requirement;</P>
              <P>(5) A precautionary notice that when a product is submitted for qualification testing, the applicant must furnish any specific information that may be requested of the manufacturer before testing will begin; and</P>
              <P>(6) The approximate time period following submission of a product for qualification testing within which the applicant will be notified whether the product passed or failed the qualification testing (see 9.202(a)(4)).</P>
              <P>(b) The activity responsible for establishing a qualification requirement must keep any list maintained of those already qualified open for inclusion of additional products, manufacturers, or other potential sources.</P>
              <CITA>[50 FR 35476, Aug. 30, 1985, as amended at 64 FR 72418, Dec. 27, 1999; 66 FR 27413, May 16, 2001; 68 FR 56679, Oct. 1, 2003; 69 FR 77872, Dec. 28, 2004]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>9.206</SECTNO>
              <SUBJECT>Acquisitions subject to qualification requirements.</SUBJECT>
            </SECTION>
            <SECTION>
              <SECTNO>9.206-1</SECTNO>
              <SUBJECT>General.</SUBJECT>
              <P>(a) Agencies may not enforce any QPL, QML, or QBL without first complying with the requirements of 9.202(a). However, qualification requirements themselves, whether or not previously embodied in a QPL, QML, or QBL, may be enforced without regard to 9.202(a) if they are in either of the following categories:</P>
              <P>(1) Any qualification requirement established by statute prior to October 30, 1984, for civilian agencies (not including NASA); or</P>
              <P>(2) Any qualification requirement established by statute or administrative action prior to October 19, 1984, for DOD or NASA. Qualification requirements established after the above dates must comply with 9.202(a) to be enforceable.</P>
              <P>(b) Except when the agency head or designee determines that an emergency exists, whenever an agency elects, whether before or after award, not to enforce a qualification requirement which it established, the requirement may not thereafter be enforced unless the agency complies with 9.202(a).</P>
              <P>(c) If a qualification requirement applies, the contracting officer need consider only those offers identified as meeting the requirement or included on the applicable QPL, QML, or QBL, unless an offeror can satisfactorily demonstrate to the contracting officer that it or its product or its subcontractor or its product can meet the standards established for qualification before the date specified for award.</P>
              <P>(d) If a product subject to a qualification requirement is to be acquired as a component of an end item, the contracting officer must assure that all such components and their qualification requirements are properly identified in the solicitation since the product or source must meet the standards specified for qualification before award.</P>
              <P>(e) In acquisitions subject to qualification requirements, the contracting officer shall take the following steps:</P>

              <P>(1) Use presolicitation notices in appropriate cases to advise potential suppliers before issuing solicitations involving qualification requirements. The notices shall identify the specification containing the qualification requirement and establish an allowable time period, consistent with delivery requirements, for prospective offerors to demonstrate their abilities to meet <PRTPAGE P="157"/>the standards specified for qualification. The notice shall be publicized in accordance with 5.204. Whether or not a presolicitation notice is used, the general synopsizing requirements of subpart 5.2 apply.</P>
              <P>(2) Distribute solicitations to prospective contractors whether or not they have been identified as meeting applicable qualification requirements.</P>
              <P>(3) When appropriate, request in accordance with agency procedures that a qualification requirement not be enforced in a particular acquisition and, if granted, so specify in the solicitation (see 9.206-1(b)).</P>
              <P>(4) Forward requests from potential suppliers for information on a qualification requirement to the agency activity responsible for establishing the requirement.</P>
              <P>(5) Allow the maximum time, consistent with delivery requirements, between issuing the solicitation and the contract award. As a minimum, contracting officers shall comply with the time frames specified in 5.203 when applicable.</P>
              <CITA>[50 FR 35476, Aug. 30, 1985, as amended at 53 FR 34227, Sept. 2, 1988]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>9.206-2</SECTNO>
              <SUBJECT>Contract clause.</SUBJECT>
              <P>The contracting officer shall insert the clause at 52.209-1, Qualification Requirements, in solicitations and contracts when the acquisition is subject to a qualification requirement.</P>
              <CITA>[53 FR 34227, Sept. 2, 1988]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>9.206-3</SECTNO>
              <SUBJECT>Competition.</SUBJECT>
              <P>(a) <E T="03">Presolicitation.</E> If a qualification requirement applies to an acquisition, the contracting officer shall review the applicable QPL, QML, or QBL or other identification of those sources which have met the requirement before issuing a solicitation to ascertain whether the number of sources is adequate for competition. (See 9.204(a) for duties of the agency activity responsible for establishment of the qualification requirement.) If the number of sources is inadequate, the contracting officer shall request the agency activity which established the requirement to—</P>
              <P>(1) Indicate the anticipated date on which any sources presently undergoing evaluation will have demonstrated their abilities to meet the qualification requirement so that the solicitation could be rescheduled to allow as many additional sources as possible to qualify; or</P>
              <P>(2) Indicate whether a means other than the qualification requirement is feasible for testing or demonstrating quality assurance.</P>
              <P>(b) <E T="03">Postsolicitation.</E> The contracting officer shall submit to the agency activity which established the qualification requirement the names and addresses of concerns which expressed interest in the acquisition but are not included on the applicable QPL, QML, or QBL or identified as meeting the qualification requirement. The activity will then assist interested concerns in meeting the standards specified for qualification (see 9.202(a) (2) and (4)).</P>
              <CITA>[50 FR 35476, Aug. 30, 1985, as amended at 60 FR 34737, July 3, 1995]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>9.207</SECTNO>
              <SUBJECT>Changes in status regarding qualification requirements.</SUBJECT>
              <P>(a) The contracting officer shall promptly report to the agency activity which established the qualification requirement any conditions which may merit removal or omission from a QPL, QML, or QBL or affect whether a source should continue to be otherwise identified as meeting the requirement. These conditions exist when—</P>
              <P>(1) Products or services are submitted for inspection or acceptance that do not meet the qualification requirement;</P>
              <P>(2) Products or services were previously rejected and the defects were not corrected when resubmitted for inspection or acceptance;</P>
              <P>(3) A supplier fails to request reevaluation following change of location or ownership of the plant where the product which met the qualification requirement was manufactured (see the clause at 52.209-1, Qualification Requirements);</P>
              <P>(4) A manufacturer of a product which met the qualification requirement has discontinued manufacture of the product;</P>
              <P>(5) A source requests removal from a QPL, QML, or QBL;</P>

              <P>(6) A condition of meeting the qualification requirement was violated; e.g., <PRTPAGE P="158"/>advertising or publicity contrary to 9.204(h)(5);</P>
              <P>(7) A revised specification imposes a new qualification requirement;</P>
              <P>(8) Manufacturing or design changes have been incorporated in the qualification requirement;</P>
              <P>(9) The source is on the Excluded Parties List System (see Subpart 9.4); or</P>
              <P>(10) Performance of a contract subject to a qualification requirement is otherwise unsatisfactory.</P>
              <P>(b) After considering any of the above or other conditions reasonably related to whether a product or source continues to meet the standards specified for qualification, an agency may take appropriate action without advance notification. The agency shall, however, promptly notify the affected parties if a product or source is removed from a QPL, QML, or QBL, or will no longer be identified as meeting the standards specified for qualification. This notice shall contain specific information why the product or source no longer meets the qualification requirement.</P>
              <CITA>[50 FR 35476, Aug. 30, 1985, as amended at 53 FR 34227, Sept. 2, 1988; 56 FR 15149, Apr. 15, 1991; 60 FR 33065, June 26, 1995; 69 FR 76349, Dec. 20, 2004]</CITA>
            </SECTION>
          </SUBPART>
          <SUBPART>
            <HD SOURCE="HED">Subpart 9.3—First Article Testing and Approval</HD>
            <SECTION>
              <SECTNO>9.301</SECTNO>
              <SUBJECT>Definition.</SUBJECT>
              <P>
                <E T="03">Approval,</E> as used in this subpart, means the contracting officer's written notification to the contractor accepting the test results of the first article.</P>
              <CITA>[48 FR 42142, Sept. 19, 1983, as amended at 66 FR 2128, Jan. 10, 2001]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>9.302</SECTNO>
              <SUBJECT>General.</SUBJECT>
              <P>First article testing and approval (hereafter referred to as testing and approval) ensures that the contractor can furnish a product that conforms to all contract requirements for acceptance. Before requiring testing and approval, the contracting officer shall consider the—</P>
              <P>(a) Impact on cost or time of delivery;</P>
              <P>(b) Risk to the Government of foregoing such test; and</P>
              <P>(c) Availability of other, less costly, methods of ensuring the desired quality.</P>
            </SECTION>
            <SECTION>
              <SECTNO>9.303</SECTNO>
              <SUBJECT>Use.</SUBJECT>
              <P>Testing and approval may be appropriate when—</P>
              <P>(a) The contractor has not previously furnished the product to the Government;</P>
              <P>(b) The contractor previously furnished the product to the Government, but—</P>
              <P>(1) There have been subsequent changes in processes or specifications;</P>
              <P>(2) Production has been discontinued for an extended period of time; or</P>
              <P>(3) The product acquired under a previous contract developed a problem during its life.</P>
              <P>(c) The product is described by a performance specification; or</P>
              <P>(d) It is essential to have an approved first article to serve as a manufacturing standard.</P>
            </SECTION>
            <SECTION>
              <SECTNO>9.304</SECTNO>
              <SUBJECT>Exceptions.</SUBJECT>
              <P>Normally, testing and approval is not required in contracts for—</P>
              <P>(a) Research or development;</P>
              <P>(b) Products requiring qualification before award (e.g., when an applicable qualified products list exists (see subpart 9.2));</P>
              <P>(c) Products normally sold in the commercial market; or</P>
              <P>(d) Products covered by complete and detailed technical specifications, unless the requirements are so novel or exacting that it is questionable whether the products would meet the requirements without testing and approval.</P>
            </SECTION>
            <SECTION>
              <SECTNO>9.305</SECTNO>
              <SUBJECT>Risk.</SUBJECT>

              <P>Before first article approval, the acquisition of materials or components, or commencement of production, is normally at the sole risk of the contractor. To minimize this risk, the contracting officer shall provide sufficient time in the delivery schedule for acquisition of materials and components, and for production after receipt of first article approval. When Government requirements preclude this action, the contracting officer may, before approval of the first article, authorize the <PRTPAGE P="159"/>contractor to acquire specific materials or components or commence production to the extent essential to meet the delivery schedule (see Alternate II of the clause at 52.209-3, First Article Approval—Contractor Testing, and Alternate II of the clause at 52.209-4, First Article Approval—Government Testing. Costs incurred based on this authorization are allocable to the contract for (1) progress payments and (2) termination settlements if the contract is terminated for the convenience of the Government.</P>
            </SECTION>
            <SECTION>
              <SECTNO>9.306</SECTNO>
              <SUBJECT>Solicitation requirements.</SUBJECT>
              <P>Solicitations containing a testing and approval requirement shall—</P>
              <P>(a) Provide, in the circumstance where the contractor is to be responsible for the first article approval testing—</P>
              <P>(1) The performance or other characteristics that the first article must meet for approval;</P>
              <P>(2) The detailed technical requirements for the tests that must be performed for approval; and</P>
              <P>(3) The necessary data that must be submitted to the Government in the first article approval test report.</P>
              <P>(b) Provide, in the circumstance where the Government is to be responsible for the first article approval testing—</P>
              <P>(1) The performance or other characteristics that the first article must meet for approval; and</P>
              <P>(2) The tests to which the first article will be subjected for approval.</P>
              <P>(c) Inform offerors that the requirement may be waived when supplies identical or similar to those called for have previously been delivered by the offeror and accepted by the Government (see 52.209-3(h) and 52.209-4(i);</P>
              <P>(d) Permit the submission of alternative offers, one including testing and approval and the other excluding testing and approval (if eligible under 9.306(c));</P>
              <P>(e) State clearly the first article's relationship to the contract quantity (see paragraph (e) of the clause at 52.209-3, First Article Approval—Contractor Testing, or 52.209-4, First Article Approval—Government Testing);</P>
              <P>(f) Contain a delivery schedule for the production quantity (see 11.404). The delivery schedule may—</P>
              <P>(1) Be the same whether or not testing and approval is waived; or</P>
              <P>(2) Provide for earlier delivery when testing and approval is waived and the Government desires earlier delivery. In the latter case, any resulting difference in delivery schedules shall not be a factor in evaluation for award. The clause at 52.209-4, First Article Approval—Government Testing, shall contain the delivery schedule for the first article;</P>
              <P>(g) Provide for the submission of contract numbers, if any, to document the offeror's eligibility under 9.306(c);</P>
              <P>(h) State whether the approved first article will serve as a manufacturing standard; and</P>
              <P>(i) Include, when the Government is responsible for first article testing, the Government's estimated testing costs as a factor for use in evaluating offers (when appropriate).</P>
              <P>(j) Inform offerors that the prices for first articles and first article tests in relation to production quantities shall not be materially unbalanced (see 15.404-1(g)) if first article test items or tests are to be separately priced.</P>
              <CITA>[48 FR 42142, Sept. 19, 1983, as amended at 54 FR 34753, Aug. 21, 1989; 55 FR 25527, June 21, 1990; 60 FR 48237, Sept. 18, 1995; 62 FR 51270, Sept. 30, 1997]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>9.307</SECTNO>
              <SUBJECT>Government administration procedures.</SUBJECT>
              <P>(a) Before the contractor ships the first article, or the first article test report, to the Government laboratory or other activity responsible for approval at the address specified in the contract, the contract administration office shall provide that activity with as much advance notification as is feasible of the forthcoming shipment, and—</P>
              <P>(1) Advise that activity of the contractual requirements for testing and approval, or evaluation, as appropriate;</P>
              <P>(2) Call attention to the notice requirement in paragraph (b) of the clause at 52.209-3, First Article Approval—Contractor Testing, or 52.209-4, First Article Approval—Government Testing; and</P>

              <P>(3) Request that the activity inform the contract administration office of <PRTPAGE P="160"/>the date when testing or evaluation will be completed.</P>
              <P>(b) The Government laboratory or other activity responsible for first article testing or evaluation shall inform the contracting office whether to approve, conditionally approve, or disapprove the first article. The contracting officer shall then notify the contractor of the action taken and furnish a copy of the notice to the contract administration office. The notice shall include the first article shipment number, when available, and the applicable contract line item number. Any changes in the drawings, designs, or specifications determined by the contracting officer to be necessary shall be made under the Changes clause, and not by the notice of approval, conditional approval, or disapproval furnished the contractor.</P>
            </SECTION>
            <SECTION>
              <SECTNO>9.308</SECTNO>
              <SUBJECT>Contract clauses.</SUBJECT>
            </SECTION>
            <SECTION>
              <SECTNO>9.308-1</SECTNO>
              <SUBJECT>Testing performed by the contractor.</SUBJECT>
              <P>(a)(1) The contracting officer shall insert the clause at 52.209-3, First Article Approval—Contractor Testing, in solicitations and contracts when a fixed-price contract is contemplated and it is intended that the contract require (i) first article approval and (ii) that the contractor be required to conduct the first article testing.</P>
              <P>(2) If it is intended that the contractor be required to produce the first article and the production quantity at the same facility, the contracting officer shall use the clause with its Alternate I.</P>
              <P>(3) If it is necessary to authorize the contractor to purchase material or to commence production before first article approval, the contracting officer shall use the clause with its Alternate II.</P>
              <P>(b)(1) The contracting officer shall insert a clause substantially the same as the clause at 52.209-3, First Article Approval—Contractor Testing, in solicitations and contracts when a cost-reimbursement contract is contemplated and it is intended that the contract require (i) first article approval and (ii) that the contractor be required to conduct the first article test.</P>
              <P>(2) If it is intended that the contractor be required to produce the first article and the production quantity at the same facility, the contracting officer shall use a clause substantially the same as the clause at 52.209-3, First Article Approval—Contractor Testing, with its Alternate I.</P>
              <P>(3) If it is necessary to authorize the contractor to purchase material or to commence production before first article approval, the contracting officer shall use a clause substantially the same as the clause at 52.209-3, First Article Approval—Contractor Testing, with its Alternate II.</P>
            </SECTION>
            <SECTION>
              <SECTNO>9.308-2</SECTNO>
              <SUBJECT>Testing performed by the Government.</SUBJECT>
              <P>(a)(1) The contracting officer shall insert the clause at 52.209-4, First Article Approval—Government Testing, in solicitations and contracts when a fixed-price contract is contemplated and it is intended that the contract require first article approval and that the Government will be responsible for conducting the first article test.</P>
              <P>(2) If it is intended that the contractor be required to produce the first article and the production quantity at the same facility, the contracting officer shall use the basic clause with its Alternate I.</P>
              <P>(3) If it is necessary to authorize the contractor to purchase material or to commence production before first article approval, the contracting officer shall use the basic clause with its Alternate II.</P>
              <P>(b)(1) The contracting officer shall insert a clause substantially the same as the clause at 52.209-4, First Article Approval—Government Testing, in solicitations and contracts when a cost-reimbursement contract is contemplated and it is intended that the contract require first article approval and that the Government be responsible for conducting the first article test.</P>

              <P>(2) If it is intended that the contractor be required to produce the first article and the production quantity at the same facility, the contracting officer shall use a clause substantially the same as the clause at 52.209-4, First Article Approval—Government Testing, with its Alternate I.<PRTPAGE P="161"/>
              </P>
              <P>(3) If it is necessary to authorize the contractor to purchase material or to commence production before first article approval, the contracting officer shall use a clause substantially the same as the clause at 52.209-4, First Article Approval—Government Testing, with its Alternate II.</P>
            </SECTION>
          </SUBPART>
          <SUBPART>
            <HD SOURCE="HED">Subpart 9.4—Debarment, Suspension, and Ineligibility</HD>
            <SECTION>
              <SECTNO>9.400</SECTNO>
              <SUBJECT>Scope of subpart.</SUBJECT>
              <P>(a) This subpart—</P>
              <P>(1) Prescribes policies and procedures governing the debarment and suspension of contractors by agencies for the causes given in 9.406-2 and 9.407-2;</P>

              <P>(2) Provides for the listing of contractors debarred, suspended, proposed for debarment, and declared ineligible (see the definition of <E T="03">ineligible</E> in 2.101); and</P>
              <P>(3) Sets forth the consequences of this listing.</P>
              <P>(b) Although this subpart does cover the listing of ineligible contractors (9.404) and the effect of this listing (9.405(b)), it does not prescribe policies and procedures governing declarations of ineligibility.</P>
              <CITA>[48 FR 42142, Sept. 19, 1983, as amended at 54 FR 19814, May 8, 1989; 66 FR 2128, Jan. 10, 2001]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>9.401</SECTNO>
              <SUBJECT>Applicability.</SUBJECT>
              <P>In accordance with Public Law 103-355, Section 2455 (31 U.S.C. 6101, note), and Executive Order 12689, any debarment, suspension or other Government-wide exclusion initiated under the Nonprocurement Common Rule implementing Executive Order 12549 on or after August 25, 1995 shall be recognized by and effective for Executive Branch agencies as a debarment or suspension under this subpart. Similarly, any debarment, suspension, proposed debarment or other Government-wide exclusion initiated on or after August 25, 1995 under this subpart shall also be recognized by and effective for those agencies and participants as an exclusion under the Nonprocurement Common Rule.</P>
              <CITA>[60 FR 33065, June 26, 1995]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>9.402</SECTNO>
              <SUBJECT>Policy.</SUBJECT>
              <P>(a) Agencies shall solicit offers from, award contracts to, and consent to subcontracts with responsible contractors only. Debarment and suspension are discretionary actions that, taken in accordance with this subpart, are appropriate means to effectuate this policy.</P>
              <P>(b) The serious nature of debarment and suspension requires that these sanctions be imposed only in the public interest for the Government's protection and not for purposes of punishment. Agencies shall impose debarment or suspension to protect the Government's interest and only for the causes and in accordance with the procedures set forth in this subpart.</P>
              <P>(c) When more than one agency has an interest in the debarment or suspension of a contractor, consideration shall be given to designating one agency as the lead agency for making the decision. Agencies are encouraged to establish methods and procedures for coordinating their debarment or suspension actions.</P>
              <P>(d) Agencies shall establish appropriate procedures to implement the policies and procedures of this subpart.</P>
              <CITA>[48 FR 42142, Sept. 19, 1983, as amended at 54 FR 19814, May 8, 1989]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>9.403</SECTNO>
              <SUBJECT>Definitions.</SUBJECT>
              <P>As used in this subpart—</P>
              <P>
                <E T="03">Affiliates.</E> Business concerns, organizations, or individuals are affiliates of each other if, directly or indirectly, (1) either one controls or has the power to control the other, or (2) a third party controls or has the power to control both. Indicia of control include, but are not limited to, interlocking management or ownership, identity of interests among family members, shared facilities and equipment, common use of employees, or a business entity organized following the debarment, suspension, or proposed debarment of a contractor which has the same or similar management, ownership, or principal employees as the contract or that was debarred, suspended, or proposed for debarment.</P>
              <P>
                <E T="03">Agency</E> means any executive department, military department or defense agency, or other agency or independent establishment of the executive branch.<PRTPAGE P="162"/>
              </P>
              <P>
                <E T="03">Civil judgment</E> means a judgment or finding of a civil offense by any court of competent jurisdiction.</P>
              <P>
                <E T="03">Contractor</E> means any individual or other legal entity that—</P>
              <P>(1) Directly or indirectly (e.g., through an affiliate), submits offers for or is awarded, or reasonably may be expected to submit offers for or be awarded, a Government contract, including a contract for carriage under Government or commercial bills of lading, or a subcontract under a Government contract; or</P>
              <P>(2) Conducts business, or reasonably may be expected to conduct business, with the Government as an agent or representative of another contractor.</P>
              <P>
                <E T="03">Debarring official</E> means (1) an agency head or (2) a designee authorized by the agency head to impose debarment.</P>
              <P>
                <E T="03">Indictment</E> means indictment for a criminal offense. An information or other filing by competent authority charging a criminal offense is given the same effect as an indictment.</P>
              <P>
                <E T="03">Legal proceedings</E> means any civil judicial proceeding to which the Government is a party or any criminal proceeding. The term includes appeals from such proceedings.</P>
              <P>
                <E T="03">Nonprocurement Common Rule</E> means the procedures used by Federal Executive Agencies to suspend, debar, or exclude individuals or entities from participation in nonprocurement transactions under Executive Order 12549. Examples of nonprocurement transactions are grants, cooperative agreements, scholarships, fellowships, contracts of assistance, loans, loan guarantees, subsidies, insurance, payments for specified use, and donation agreements.</P>
              <P>
                <E T="03">Suspending official</E> means (1) an agency head or (2) a designee authorized by the agency head to impose suspension.</P>
              <P>
                <E T="03">Unfair trade practices</E> means the commission of any of the following acts by a contractor:</P>
              <P>(1) A violation of section 337 of the Tariff Act of 1930 (19 U.S.C. 1337) as determined by the International Trade Commission.</P>

              <P>(2) A violation, as determined by the Secretary of Commerce, of any agreement of the group known as the “Coordination Committee” for purposes of the Export Administration Act of 1979 (50 U.S.C. App. 2401, <E T="03">et seq.</E>) or any similar bilateral or multilateral export control agreement.</P>
              <P>(3) A knowingly false statement regarding a material element of a certification concerning the foreign content of an item of supply, as determined by the Secretary of the Department or the head of the agency to which such certificate was furnished.</P>
              <CITA>[48 FR 42142, Sept. 19, 1983, as amended at 54 FR 19814, May 8, 1989; 56 FR 15149, Apr. 15, 1991; 59 FR 11372, Mar. 10, 1994; 60 FR 33065, June 26, 1995; 66 FR 2128, Jan. 10, 2001]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>9.404</SECTNO>
              <SUBJECT>Excluded Parties List System.</SUBJECT>
              <P>(a) The General Services Administration (GSA)—</P>
              <P>(1) Operates the web-based Excluded Parties List System (EPLS);</P>
              <P>(2) Provides technical assistance to Federal agencies in the use of the EPLS; and</P>
              <P>(3) Includes in the list the name and telephone number of the official responsible for its maintenance and distribution.</P>
              <P>(b) The EPLS includes the—</P>
              <P>(1) Names and addresses of all contractors debarred, suspended, proposed for debarment, declared ineligible, or excluded or disqualified under the nonprocurement common rule, with cross-references when more than one name is involved in a single action;</P>
              <P>(2) Name of the agency or other authority taking the action;</P>
              <P>(3) Cause for the action (see 9.406-2 and 9.407-2 for causes authorized under this subpart) or other statutory or regulatory authority;</P>
              <P>(4) Effect of the action;</P>
              <P>(5) Termination date for each listing;</P>
              <P>(6) DUNS No.;</P>
              <P>(7) Social Security Number (SSN), Employer Identification Number (EIN), or other Taxpayer Identification Number (TIN), if available; and</P>
              <P>(8) Name and telephone number of the agency point of contact for the action.</P>
              <P>(c) Each agency must—</P>
              <P>(1) Obtain password(s) from GSA to access the EPLS for data entry;</P>

              <P>(2) Notify GSA in the event a password needs to be rescinded (<E T="03">e.g.,</E> when an agency employee leaves or changes function);<PRTPAGE P="163"/>
              </P>
              <P>(3) Enter the information required by paragraph (b) of this section within 5 working days after the action becomes effective;</P>
              <P>(4) Determine whether it is legally permitted to enter the SSN, EIN, or other TIN, under agency authority to suspend or debar;</P>
              <P>(5) Update EPLS, generally within 5 working days after modifying or rescinding an action;</P>
              <P>(6) In accordance with internal retention procedures, maintain records relating to each debarment, suspension, or proposed debarment taken by the agency;</P>
              <P>(7) Establish procedures to ensure that the agency does not solicit offers from, award contracts to, or consent to subcontracts with contractors whose names are in the EPLS, except as otherwise provided in this subpart;</P>
              <P>(8) Direct inquiries concerning listed contractors to the agency or other authority that took the action; and</P>
              <P>(9) Contact GSA for technical assistance with the EPLS, via the support e-mail address or on the technical support phone line available at the EPLS web site provided in paragraph (d) of this section.</P>
              <P>(d) The EPLS is available at <E T="03">http://epls.gov</E>.</P>
              <CITA>[69 FR 76349, Dec. 20, 2004]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>9.405</SECTNO>
              <SUBJECT>Effect of listing.</SUBJECT>

              <P>(a) Contractors debarred, suspended, or proposed for debarment are excluded from receiving contracts, and agencies shall not solicit offers from, award contracts to, or consent to subcontracts with these contractors, unless the agency head determines that there is a compelling reason for such action (<E T="03">see</E> 9.405-1(b), 9.405-2, 9.406-1(c), 9.407-1(d), and 23.506(e)). Contractors debarred, suspended, or proposed for debarment are also excluded from conducting business with the Government as agents or representatives of other contractors.</P>
              <P>(b) Contractors included in the EPLS as having been declared ineligible on the basis of statutory or other regulatory procedures are excluded from receiving contracts, and if applicable, subcontracts, under the conditions and for the period set forth in the statute or regulation. Agencies shall not solicit offers from, award contracts to, or consent to subcontracts with these contractors under those conditions and for that period.</P>
              <P>(c) Contractors debarred, suspended, or proposed for debarment are excluded from acting as individual sureties (see part 28).</P>
              <P>(d)(1) After the opening of bids or receipt of proposals, the contracting officer shall review the EPLS.</P>
              <P>(2) Bids received from any listed contractor in response to an invitation for bids shall be entered on the abstract of bids, and rejected unless the agency head determines in writing that there is a compelling reason to consider the bid.</P>
              <P>(3) Proposals, quotations, or offers received from any listed contractor shall not be evaluated for award or included in the competitive range, nor shall discussions be conducted with a listed offeror during a period of ineligibility, unless the agency head determines, in writing, that there is a compelling reason to do so. If the period of ineligibility expires or is terminated prior to award, the contracting officer may, but is not required to, consider such proposals, quotations, or offers.</P>
              <P>(4) Immediately prior to award, the contracting officer shall again review the EPLS to ensure that no award is made to a listed contractor.</P>
              <CITA>[48 FR 42142, Sept. 19, 1983, as amended at 52 FR 9038, Mar. 20, 1987; 54 FR 19814, May 8, 1989; 54 FR 48982, Nov. 28, 1989; 55 FR 21707, May 25, 1990; 56 FR 29127, June 25, 1991; 59 FR 67033, Dec. 28, 1994; 60 FR 33065, June 26, 1995; 65 FR 16286, Mar. 27, 2000; 68 FR 69251, Dec. 11, 2003; 69 FR 76349, Dec. 20, 2004]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>9.405-1</SECTNO>
              <SUBJECT>Continuation of current contracts.</SUBJECT>

              <P>(a) Notwithstanding the debarment, suspension, or proposed debarment of a contractor, agencies may continue contracts or subcontracts in existence at the time the contractor was debarred, suspended, or proposed for debarment unless the agency head directs otherwise. A decision as to the type of termination action, if any, to be taken should be made only after review by agency contracting and technical personnel and by counsel to ensure the propriety of the proposed action.<PRTPAGE P="164"/>
              </P>
              <P>(b) For contractors debarred, suspended, or proposed for debarment, unless the agency head makes a written determination of the compelling reasons for doing so, ordering activities shall not—</P>
              <P>(1) Place orders exceeding the guaranteed minimum under indefinite quantity contracts;</P>
              <P>(2) Place orders under optional use Federal Supply Schedule contracts, blanket purchase agreements, or basic ordering agreements; or</P>
              <P>(3) Add new work, exercise options, or otherwise extend the duration of current contracts or orders.</P>
              <CITA>[54 FR 19815, May 8, 1989, as amended at 59 FR 67033, Dec. 28, 1994; 68 FR 69251, Dec. 11, 2003]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>9.405-2</SECTNO>
              <SUBJECT>Restrictions on subcontracting.</SUBJECT>
              <P>(a) When a contractor debarred, suspended, or proposed for debarment is proposed as a subcontractor for any subcontract subject to Government consent (see subpart 44.2), contracting officers shall not consent to subcontracts with such contractors unless the agency head states in writing the compelling reasons for this approval action. (See 9.405(b) concerning declarations of ineligibility affecting subcontracting.)</P>
              <P>(b) The Government suspends or debars contractors to protect the Government's interests. By operation of the clause at 52.209-6, Protecting the Government's Interests When Subcontracting with Contractors Debarred, Suspended or Proposed for Debarment, contractors shall not enter into any subcontract in excess of $30,000 with a contractor that has been debarred, suspended, or proposed for debarment unless there is a compelling reason to do so. If a contractor intends to subcontract with a party that is debarred, suspended, or proposed for debarment as evidenced by the party's inclusion in the EPLS (see 9.404), a corporate officer or designee of the contractor is required by operation of the clause at 52.209-6, Protecting the Government's Interests when Subcontracting with Contractors Debarred, Suspended, or Proposed for Debarment, to notify the contracting officer, in writing, before entering into such subcontract. The notice must provide the following:</P>
              <P>(1) The name of the subcontractor;</P>
              <P>(2) The contractor's knowledge of the reasons for the subcontractor being in the EPLS;</P>
              <P>(3) The compelling reason(s) for doing business with the subcontractor notwithstanding its inclusion in the EPLS; and</P>
              <P>(4) The systems and procedures the contractor has established to ensure that it is fully protecting the Government's interests when dealing with such subcontractor in view of the specific basis for the party's debarment, suspension, or proposed debarment.</P>
              <P>(c) The contractor's compliance with the requirements of 52.209-6 will be reviewed during Contractor Purchasing System Reviews (see subpart 44.3).</P>
              <CITA>[54 FR 19815, May 8, 1989, as amended at 56 FR 29127, June 25, 1991; 59 FR 67033, Dec. 28, 1994; 60 FR 33066, June 26, 1995; 60 FR 48237, Sept. 18, 1995; 68 FR 69251, Dec. 11, 2003; 69 FR 76349, Dec. 20, 2004; 71 FR 57366, Sept. 28, 2006]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>9.406</SECTNO>
              <SUBJECT>Debarment.</SUBJECT>
            </SECTION>
            <SECTION>
              <SECTNO>9.406-1</SECTNO>
              <SUBJECT>General.</SUBJECT>
              <P>(a) It is the debarring official's responsibility to determine whether debarment is in the Government's interest. The debarring official may, in the public interest, debar a contractor for any of the causes in 9.406-2, using the procedures in 9.406-3. The existence of a cause for debarment, however, does not necessarily require that the contractor be debarred; the seriousness of the contractor's acts or omissions and any remedial measures or mitigating factors should be considered in making any debarment decision. Before arriving at any debarment decision, the debarring official should consider factors such as the following:</P>

              <P>(1) Whether the contractor had effective standards of conduct and internal control systems in place at the time of the activity which constitutes cause for debarment or had adopted such procedures prior to any Government investigation of the activity cited as a cause for debarment.<PRTPAGE P="165"/>
              </P>
              <P>(2) Whether the contractor brought the activity cited as a cause for debarment to the attention of the appropriate Government agency in a timely manner.</P>
              <P>(3) Whether the contractor has fully investigated the circumstances surrounding the cause for debarment and, if so, made the result of the investigation available to the debarring official.</P>
              <P>(4) Whether the contractor cooperated fully with Government agencies during the investigation and any court or administrative action.</P>
              <P>(5) Whether the contractor has paid or has agreed to pay all criminal, civil, and administrative liability for the improper activity, including any investigative or administrative costs incurred by the Government, and has made or agreed to make full restitution.</P>
              <P>(6) Whether the contractor has taken appropriate disciplinary action against the individuals responsible for the activity which constitutes cause for debarment.</P>
              <P>(7) Whether the contractor has implemented or agreed to implement remedial measures, including any identified by the Government.</P>
              <P>(8) Whether the contractor has instituted or agreed to institute new or revised review and control procedures and ethics training programs.</P>
              <P>(9) Whether the contractor has had adequate time to eliminate the circumstances within the contractor's organization that led to the cause for debarment.</P>
              <P>(10) Whether the contractor's management recognizes and understands the seriousness of the misconduct giving rise to the cause for debarment and has implemented programs to prevent recurrence.</P>
              <FP>The existence or nonexistence of any mitigating factors or remedial measures such as set forth in this paragraph (a) is not necessarily determinative of a contractor's present responsibility. Accordingly, if a cause for debarment exists, the contractor has the burden of demonstrating, to the satisfaction of the debarring official, its present responsibility and that debarment is not necessary.</FP>
              <P>(b) Debarment constitutes debarment of all divisions or other organizational elements of the contractor, unless the debarment decision is limited by its terms to specific divisions, organizational elements, or commodities. The debarring official may extend the debarment decision to include any affiliates of the contractor if they are (1) specifically named and (2) given written notice of the proposed debarment and an opportunity to respond (see 9.406-3(c)).</P>
              <P>(c) A contractor's debarment, or proposed debarment, shall be effective throughout the executive branch of the Government, unless the agency head or a designee (except see 23.506(e)) states in writing the compelling reasons justifying continued business dealings between that agency and the contractor.</P>
              <P>(d)(1) When the debarring official has authority to debar contractors from both acquisition contracts pursuant to this regulation and contracts for the purchase of Federal personal property pursuant to the Federal Property Management Regulations (FPMR) 101-45.6, that official shall consider simultaneously debarring the contractor from the award of acquisition contracts and from the purchase of Federal personal property.</P>
              <P>(2) When debarring a contractor from the award of acquisition contracts and from the purchase of Federal personal property, the debarment notice shall so indicate and the appropriate FAR and FPMR citations shall be included.</P>
              <CITA>[48 FR 42142, Sept. 19, 1983, as amended at 52 FR 6121, Feb. 27, 1987; 54 FR 19815, May 8, 1989; 55 FR 21707, May 25, 1990; 55 FR 30465, July 26, 1990; 56 FR 67129, Dec. 27, 1991; 59 FR 67033, Dec. 28, 1994]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>9.406-2</SECTNO>
              <SUBJECT>Causes for debarment.</SUBJECT>
              <P>The debarring official may debar—</P>
              <P>(a) A contractor for a conviction of or civil judgment for—</P>
              <P>(1) Commission of fraud or a criminal offense in connection with (i) obtaining, (ii) attempting to obtain, or (iii) performing a public contract or subcontract;</P>
              <P>(2) Violation of Federal or State antitrust statutes relating to the submission of offers;</P>

              <P>(3) Commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false <PRTPAGE P="166"/>statements, tax evasion, or receiving stolen property;</P>
              <P>(4) Intentionally affixing a label bearing a “Made in America” inscription (or any inscription having the same meaning) to a product sold in or shipped to the United States or its outlying areas, when the product was not made in the United States or its outlying areas (see Section 202 of the Defense Production Act (Public Law 102-558)); or</P>
              <P>(5) Commission of any other offense indicating a lack of business integrity or business honesty that seriously and directly affects the present responsibility of a Government contractor or subcontractor.</P>
              <P>(b)(1) A contractor, based upon a preponderance of the evidence for—</P>
              <P>(i) Violation of the terms of a Government contract or subcontract so serious as to justify debarment, such as—</P>
              <P>(A) Willful failure to perform in accordance with the terms of one or more contracts; or</P>
              <P>(B) A history of failure to perform, or of unsatisfactory performance of, one or more contracts.</P>
              <P>(ii) Violations of the Drug-Free Workplace Act of 1988 (Public Law 100-690), as indicated by—</P>
              <P>(A) Failure to comply with the requirements of the clause at 52.223-6, Drug-Free Workplace; or</P>
              <P>(B) Such a number of contractor employees convicted of violations of criminal drug statutes occurring in the workplace as to indicate that the contractor has failed to make a good faith effort to provide a drug-free workplace (see 23.504).</P>
              <P>(iii) Intentionally affixing a label bearing a “Made in America” inscription (or any inscription having the same meaning) to a product sold in or shipped to the United States or its outlying areas, when the product was not made in the United States or its outlying areas (see Section 202 of the Defense Production Act (Public Law 102-558)).</P>
              <P>(iv) Commission of an unfair trade practice as defined in 9.403 (see Section 201 of the Defense Production Act (Public Law 102-558)).</P>
              <P>(2) A contractor, based on a determination by the Secretary of Homeland Security or the Attorney General of the United States, that the contractor is not in compliance with Immigration and Nationality Act employment provisions (see Executive Order 12989, as amended by Executive Order 13286). Such determination is not reviewable in the debarment proceedings.</P>
              <P>(c) A contractor or subcontractor based on any other cause of so serious or compelling a nature that it affects the present responsibility of the contractor or subcontractor.</P>
              <CITA>[48 FR 42142, Sept. 19, 1983, as amended at 54 FR 4968, Jan. 31 ,1989; 54 FR 19815, May 8, 1989; 55 FR 21707, May 25, 1990; 59 FR 11372, Mar. 10, 1994; 61 FR 2633, Jan. 26, 1996; 61 FR 41473, Aug. 8, 1996; 61 FR 69291, Dec. 31, 1996; 68 FR 28080, May 22, 2003; 69 FR 34230, June 18, 2004]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>9.406-3</SECTNO>
              <SUBJECT>Procedures.</SUBJECT>
              <P>(a) <E T="03">Investigation and referral.</E> Agencies shall establish procedures for the prompt reporting, investigation, and referral to the debarring official of matters appropriate for that official's consideration.</P>
              <P>(b) <E T="03">Decisionmaking process.</E> (1) Agencies shall establish procedures governing the debarment decisionmaking process that are as informal as is practicable, consistent with principles of fundamental fairness. These procedures shall afford the contractor (and any specifically named affiliates) an opportunity to submit, in person, in writing, or through a representative, information and argument in opposition to the proposed debarment.</P>
              <P>(2) In actions not based upon a conviction or civil judgment, if it is found that the contractor's submission in opposition raises a genuine dispute over facts material to the proposed debarment, agencies shall also—</P>
              <P>(i) Afford the contractor an opportunity to appear with counsel, submit documentary evidence, present witnesses, and confront any person the agency presents; and</P>
              <P>(ii) Make a transcribed record of the proceedings and make it available at cost to the contractor upon request, unless the contractor and the agency, by mutual agreement, waive the requirement for a transcript.</P>
              <P>(c) <E T="03">Notice of proposal to debar.</E> A notice of proposed debarment shall be <PRTPAGE P="167"/>issued by the debarring official advising the contractor and any specifically named affiliates, by certified mail, return receipt requested—</P>
              <P>(1) That debarment is being considered;</P>
              <P>(2) Of the reasons for the proposed debarment in terms sufficient to put the contractor on notice of the conduct or transaction(s) upon which it is based;</P>
              <P>(3) Of the cause(s) relied upon under 9.406-2 for proposing debarment;</P>
              <P>(4) That, within 30 days after receipt of the notice, the contractor may submit, in person, in writing, or through a representative, information and argument in opposition to the proposed debarment, including any additional specific information that raises a genuine dispute over the material facts;</P>
              <P>(5) Of the agency's procedures governing debarment decisionmaking;</P>
              <P>(6) Of the effect of the issuance of the notice of proposed debarment; and</P>
              <P>(7) Of the potential effect of an actual debarment.</P>
              <P>(d) <E T="03">Debarring official's decision.</E> (1) In actions based upon a conviction or judgment, or in which there is no genuine dispute over material facts, the debarring official shall make a decision on the basis of all the information in the administrative record, including any submission made by the contractor. If no suspension is in effect, the decision shall be made within 30 working days after receipt of any information and argument submitted by the contractor, unless the debarring official extends this period for good cause.</P>
              <P>(2)(i) In actions in which additional proceedings are necessary as to disputed material facts, written findings of fact shall be prepared. The debarring official shall base the decision on the facts as found, together with any information and argument submitted by the contractor and any other information in the administrative record.</P>
              <P>(ii) The debarring official may refer matters involving disputed material facts to another official for findings of fact. The debarring official may reject any such findings, in whole or in part, only after specifically determining them to be arbitrary and capricious or clearly erroneous.</P>
              <P>(iii) The debarring official's decision shall be made after the conclusion of the proceedings with respect to disputed facts.</P>
              <P>(3) In any action in which the proposed debarment is not based upon a conviction or civil judgment, the cause for debarment must be established by a preponderance of the evidence.</P>
              <P>(e) <E T="03">Notice of debarring official's decision.</E> (1) If the debarring official decides to impose debarment, the contractor and any affiliates involved shall be given prompt notice by certified mail, return receipt requested—</P>
              <P>(i) Referring to the notice of proposed debarment;</P>
              <P>(ii) Specifying the reasons for debarment;</P>
              <P>(iii) Stating the period of debarment, including effective dates; and</P>
              <P>(iv) Advising that the debarment is effective throughout the executive branch of the Government unless the head of an agency or a designee makes the statement called for by 9.406-1(c).</P>
              <P>(2) If debarment is not imposed, the debarring official shall promptly notify the contractor and any affiliates involved, by certified mail, return receipt requested.</P>
              <CITA>[48 FR 42142, Sept. 19, 1983, as amended at 54 FR 19815, May 8, 1989; 59 FR 67033, Dec. 28, 1994]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>9.406-4</SECTNO>
              <SUBJECT>Period of debarment.</SUBJECT>
              <P>(a)(1) Debarment shall be for a period commensurate with the seriousness of the cause(s). Generally, debarment should not exceed 3 years, except that—</P>
              <P>(i) Debarment for violation of the provisions of the Drug-Free Workplace Act of 1988 (see 23.506) may be for a period not to exceed 5 years; and</P>
              <P>(ii) Debarments under 9.406-2(b)(2) shall be for one year unless extended pursuant to paragraph (b) of this subsection.</P>
              <P>(2) If suspension precedes a debarment, the suspension period shall be considered in determining the debarment period.</P>

              <P>(b) The debarring official may extend the debarment for an additional period, if that official determines that an extension is necessary to protect the Government's interest. However, a debarment may not be extended solely on <PRTPAGE P="168"/>the basis of the facts and circumstances upon which the initial debarment action was based. Debarments under 9.406-2(b)(2) may be extended for additional periods of one year if the Secretary of Homeland Security or the Attorney General determines that the contractor continues to be in violation of the employment provisions of the Immigration and Nationality Act. If debarment for an additional period is determined to be necessary, the procedures of 9.406-3 shall be followed to extend the debarment.</P>
              <P>(c) The debarring official may reduce the period or extent of debarment, upon the contractor's request, supported by documentation, for reasons such as—</P>
              <P>(1) Newly discovered material evidence;</P>
              <P>(2) Reversal of the conviction or civil judgment upon which the debarment was based;</P>
              <P>(3) Bona fide change in ownership or management;</P>
              <P>(4) Elimination of other causes for which the debarment was imposed; or</P>
              <P>(5) Other reasons the debarring offical deems appropriate.</P>
              <CITA>[48 FR 42142, Sept. 19, 1983, as amended at 54 FR 4968, Jan. 31 ,1989; 54 FR 19815, May 8, 1989; 55 FR 21707, May 25, 1990; 61 FR 41473, Aug. 8, 1996; 69 FR 34231, June 18, 2004]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>9.406-5</SECTNO>
              <SUBJECT>Scope of debarment.</SUBJECT>
              <P>(a) The fraudulent, criminal, or other seriously improper conduct of any officer, director, shareholder, partner, employee, or other individual associated with a contractor may be imputed to the contractor when the conduct occurred in connection with the individual's performance of duties for or on behalf of the contractor, or with the contractor's knowledge, approval, or acquiescence. The contractor's acceptance of the benefits derived from the conduct shall be evidence of such knowledge, approval, or acquiescence.</P>
              <P>(b) The fraudulent, criminal, or other seriously improper conduct of a contractor may be imputed to any officer, director, shareholder, partner, employee, or other individual associated with the contractor who participated in, knew of, or had reason to know of the contractor's conduct.</P>
              <P>(c) The fraudulent, criminal, or other seriously improper conduct of one contractor participating in a joint venture or similar arrangement may be imputed to other participating contractors if the conduct occurred for or on behalf of the joint venture or similar arrangement, or with the knowledge, approval, or acquiescence of these contractors. Acceptance of the benefits derived from the conduct shall be evidence of such knowledge, approval, or acquiescence.</P>
            </SECTION>
            <SECTION>
              <SECTNO>9.407</SECTNO>
              <SUBJECT>Suspension.</SUBJECT>
            </SECTION>
            <SECTION>
              <SECTNO>9.407-1</SECTNO>
              <SUBJECT>General.</SUBJECT>
              <P>(a) The suspending official may, in the public interest, suspend a contractor for any of the causes in 9.407-2, using the procedures in 9.407-3.</P>
              <P>(b)(1) Suspension is a serious action to be imposed on the basis of adequate evidence, pending the completion of investigation or legal proceedings, when it has been determined that immediate action is necessary to protect the Government's interest. In assessing the adequacy of the evidence, agencies should consider how much information is available, how credible it is given the circumstances, whether or not important allegations are corroborated, and what inferences can reasonably be drawn as a result. This assessment should include an examination of basic documents such as contracts, inspection reports, and correspondence.</P>
              <P>(b)(2) The existence of a cause for suspension does not necessarily require that the contractor be suspended. The suspending official should consider the seriousness of the contractor's acts or omissions and may, but is not required to, consider remedial measures or mitigating factors, such as those set forth in 9.406-1(a). A contractor has the burden of promptly presenting to the suspending official evidence of remedial measures or mitigating factors when it has reason to know that a cause for suspension exists. The existence or nonexistence of any remedial measures or mitigating factors is not necessarily determinative of a contractor's present responsibility.</P>

              <P>(c) Suspension constitutes suspension of all divisions or other organizational elements of the contractor, unless the <PRTPAGE P="169"/>suspension decision is limited by its terms to specific divisions, organizational elements, or commodities. The suspending official may extend the suspension decision to include any affiliates of the contractor if they are (1) specifically named and (2) given written notice of the suspension and an opportunity to respond (see 9.407-3(c)).</P>
              <P>(d) A contractor's suspension shall be effective throughout the executive branch of the Government, unless the agency head or a designee (except see 23.506(e)) states in writing the compelling reasons justifying continued business dealings between that agency and the contractor.</P>
              <P>(e)(1) When the suspending official has authority to suspend contractors from both acquisition contracts pursuant to this regulation and contracts for the purchase of Federal personal property pursuant to FPMR 101-45.6, that official shall consider simultaneously suspending the contractor from the award of acquisition contracts and from the purchase of Federal personal property.</P>
              <P>(2) When suspending a contractor from the award of acquisition contracts and from the purchase of Federal personal property, the suspension notice shall so indicate and the appropriate FAR and FPMR citations shall be included.</P>
              <CITA>[48 FR 42142, Sept. 19, 1983, as amended at 54 FR 4968, Jan. 31, 1989; 54 FR 19816, May 8, 1989; 56 FR 67130, Dec. 27, 1991; 59 FR 67033, Dec. 28, 1994]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>9.407-2</SECTNO>
              <SUBJECT>Causes for suspension.</SUBJECT>
              <P>(a) The suspending official may suspend a contractor suspected, upon adequate evidence, of—</P>
              <P>(1) Commission of fraud or a criminal offense in connection with (i) obtaining, (ii) attempting to obtain, or (iii) performing a public contract or subcontract;</P>
              <P>(2) Violation of Federal or State antitrust statutes relating to the submission of offers;</P>
              <P>(3) Commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, tax evasion, or receiving stolen property; or</P>
              <P>(4) Violations of the Drug-Free Workplace Act of 1988 (Public Law 100-690), as indicated by—</P>
              <P>(i) Failure to comply with the requirements of the clause at 52.223-6, Drug-Free Workplace; or</P>
              <P>(ii) Such a number of contractor employees convicted of violations of criminal drug statutes occurring in the workplace as to indicate that the contractor has failed to make a good faith effort to provide a drug-free workplace (see 23.504);</P>
              <P>(5) Intentionally affixing a label bearing a “Made in America” inscription (or any inscription having the same meaning) to a product sold in or shipped to the United States or its outlying areas, when the product was not made in the United States or its outlying areas (see Section 202 of the Defense Production Act (Public Law 102-558));</P>
              <P>(6) Commission of an unfair trade practice as defined in 9.403 (see section 201 of the Defense Production Act (Pub. L. 102-558)); or</P>
              <P>(7) Commission of any other offense indicating a lack of business integrity or business honesty that seriously and directly affects the present responsibility of a Government contractor or subcontractor.</P>
              <P>(b) Indictment for any of the causes in paragraph (a) above constitutes adequate evidence for suspension.</P>
              <P>(c) The suspending official may upon adequate evidence also suspend a contractor for any other cause of so serious or compelling a nature that it affects the present responsibility of a Government contractor or subcontractor.</P>
              <CITA>[48 FR 42142, Sept. 19, 1983, as amended at 54 FR 4968, Jan. 31, 1989; 55 FR 21707, May 25, 1990; 59 FR 11373, Mar. 10, 1994; 61 FR 2633, Jan. 26, 1996; 61 FR 69291, Dec. 31, 1996; 68 FR 28081, May 22, 2003]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>9.407-3</SECTNO>
              <SUBJECT>Procedures.</SUBJECT>
              <P>(a) <E T="03">Investigation and referral.</E> Agencies shall establish procedures for the prompt reporting, investigation, and referral to the suspending official of matters appropriate for that official's consideration.</P>
              <P>(b) <E T="03">Decisionmaking process.</E> (1) Agencies shall establish procedures governing the suspension decisionmaking <PRTPAGE P="170"/>process that are as informal as is practicable, consistent with principles of fundamental fairness. These procedures shall afford the contractor (and any specifically named affiliates) an opportunity, following the imposition of suspension, to submit, in person, in writing, or through a representative, information and argument in opposition to the suspension.</P>
              <P>(2) In actions not based on an indictment, if it is found that the contractor's submission in opposition raises a genuine dispute over facts material to the suspension and if no determination has been made, on the basis of Department of Justice advice, that substantial interests of the Government in pending or contemplated legal proceedings based on the same facts as the suspension would be prejudiced, agencies shall also—</P>
              <P>(i) Afford the contractor an opportunity to appear with counsel, submit documentary evidence, present witnesses, and confront any person the agency presents; and</P>
              <P>(ii) Make a transcribed record of the proceedings and make it available at cost to the contractor upon request, unless the contractor and the agency, by mutual agreement, waive the requirement for a transcript.</P>
              <P>(c) <E T="03">Notice of suspension.</E> When a contractor and any specifically named affiliates are suspended, they shall be immediately advised by certified mail, return receipt requested—</P>
              <P>(1) That they have been suspended and that the suspension is based on an indictment or other adequate evidence that the contractor has committed irregularities (i) of a serious nature in business dealings with the Government or (ii) seriously reflecting on the propriety of further Government dealings with the contractor—any such irregularities shall be described in terms sufficient to place the contractor on notice without disclosing the Government's evidence;</P>
              <P>(2) That the suspension is for a temporary period pending the completion of an investigation and such legal proceedings as may ensue;</P>
              <P>(3) Of the cause(s) relied upon under 9.407-2 for imposing suspension;</P>
              <P>(4) Of the effect of the suspension;</P>
              <P>(5) That, within 30 days after receipt of the notice, the contractor may submit, in person, in writing, or through a representative, information and argument in opposition to the suspension, including any additional specific information that raises a genuine dispute over the material facts; and</P>
              <P>(6) That additional proceedings to determine disputed material facts will be conducted unless (i) the action is based on an indictment or (ii) a determination is made, on the basis of Department of Justice advice, that the substantial interests of the Government in pending or contemplated legal proceedings based on the same facts as the suspension would be prejudiced.</P>
              <P>(d) <E T="03">Suspending official's decision.</E> (1) In actions (i) based on an indictment, (ii) in which the contractor's submission does not raise a genuine dispute over material facts, or (iii) in which additional proceedings to determine disputed material facts have been denied on the basis of Department of Justice advice, the suspending official's decision shall be based on all the information in the administrative record, including any submission made by the contractor.</P>
              <P>(2)(i) In actions in which additional proceedings are necessary as to disputed material facts, written findings of fact shall be prepared. The suspending official shall base the decision on the facts as found, together with any information and argument submitted by the contractor and any other information in the administrative record.</P>
              <P>(ii) The suspending official may refer matters involving disputed material facts to another official for findings of fact. The suspending official may reject any such findings, in whole or in part, only after specifically determining them to be arbitrary and capricious or clearly erroneous.</P>
              <P>(iii) The suspending official's decision shall be made after the conclusion of the proceedings with respect to disputed facts.</P>

              <P>(3) The suspending official may modify or terminate the suspension or leave it in force (for example, see 9.406-4(c) for the reasons for reducing the period or extent of debarment). However, a decision to modify or terminate the <PRTPAGE P="171"/>suspension shall be without prejudice to the subsequent imposition of (i) suspension by any other agency or (ii) debarment by any agency.</P>
              <P>(4) Prompt written notice of the suspending official's decision shall be sent to the contractor and any affiliates involved, by certified mail, return receipt requested.</P>
              <CITA>[48 FR 42142, Sept. 19, 1983, as amended at 51 FR 2649, Jan. 17, 1986]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>9.407-4</SECTNO>
              <SUBJECT>Period of suspension.</SUBJECT>
              <P>(a) Suspension shall be for a temporary period pending the completion of investigation and any ensuing legal proceedings, unless sooner terminated by the suspending official or as provided in this subsection.</P>
              <P>(b) If legal proceedings are not initiated within 12 months after the date of the suspension notice, the suspension shall be terminated unless an Assistant Attorney General requests its extension, in which case it may be extended for an additional 6 months. In no event may a suspension extend beyond 18 months, unless legal proceedings have been initiated within that period.</P>
              <P>(c) The suspending official shall notify the Department of Justice of the proposed termination of the suspension, at least 30 days before the 12-month period expires, to give that Department an opportunity to request an extension.</P>
              <CITA>[48 FR 42142, Sept. 19, 1983, as amended at 51 FR 2649, Jan. 17, 1986]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>9.407-5</SECTNO>
              <SUBJECT>Scope of suspension.</SUBJECT>
              <P>The scope of suspension shall be the same as that for debarment (see 9.406-5), except that the procedures of 9.407-3 shall be used in imposing suspension.</P>
            </SECTION>
            <SECTION>
              <SECTNO>9.408</SECTNO>
              <SUBJECT>Certification regarding debarment, suspension, proposed debarment, and other responsibility matters.</SUBJECT>
              <P>(a) When an offeror, in compliance with the provision at 52.209-5, Certification Regarding Debarment, Suspension, Proposed Debarment, and Other Responsibility Matters, indicates an indictment, charge, civil judgment, conviction, suspension, debarment, proposed debarment, ineligibility, or default of a contract, the contracting officer shall—</P>
              <P>(1) Request such additional information from the offeror as the contracting officer deems necessary in order to make a determination of the offeror's responsibility (but see 9.405); and</P>
              <P>(2) Notify, prior to proceeding with award, in accordance with agency procedures (see 9.406-3(a) and 9.407-3(a)), the agency official responsible for initiating debarment or suspension action, where an offeror indicates the existence of an indictment, charge, conviction, or civil judgment.</P>
              <P>(b) Offerors who do not furnish the certification or such information as may be requested by the contracting officer shall be given an opportunity to remedy the deficiency. Failure to furnish the certification or such information may render the offeror nonresponsible.</P>
              <CITA>[54 FR 19816, May 8, 1989]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>9.409</SECTNO>
              <SUBJECT>Solicitation provision and contract clause.</SUBJECT>
              <P>(a) The contracting officer shall insert the provision at 52.209-5, Certification Regarding Debarment, Suspension, Proposed Debarment, and Other Responsibility Matters, in solicitations where the contract value is expected to exceed the simplified acquisition threshold.</P>
              <P>(b) The contracting officer shall insert the clause at 52.209-6, Protecting the Government's Interests when Subcontracting with Contractors Debarred, Suspended, or Proposed for Debarment, in solicitations and contracts where the contract value exceeds $30,000.</P>
              <CITA>[60 FR 34748, July 3, 1995, as amended at 71 FR 57366, Sept. 28, 2006]</CITA>
            </SECTION>
          </SUBPART>
          <SUBPART>
            <HD SOURCE="HED">Subpart 9.5—Organizational and Consultant Conflicts of Interest</HD>
            <SECTION>
              <SECTNO>9.500</SECTNO>
              <SUBJECT>Scope of subpart.</SUBJECT>
              <P>This subpart:</P>
              <P>(a) Prescribes responsibilities, general rules, and procedures for identifying, evaluating, and resolving organizational conflicts of interest;</P>

              <P>(b) Provides examples to assist contracting officers in applying these rules and procedures to individual contracting situations; and<PRTPAGE P="172"/>
              </P>
              <P>(c) Implements section 8141 of the 1989 Department of Defense Appropriation Act, Pub. L. 100-463, 102 Stat. 2270-47 (1988).</P>
              <CITA>[55 FR 42685, Oct. 22, 1990, as amended at 65 FR 36014, June 6, 2000]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>9.501</SECTNO>
              <SUBJECT>Definition.</SUBJECT>
              <P>
                <E T="03">Marketing consultant,</E> as used in this subpart, means any independent contractor who furnishes advice, information, direction, or assistance to an offeror or any other contractor in support of the preparation or submission of an offer for a Government contract by that offeror. An independent contractor is not a marketing consultant when rendering—</P>
              <P>(1) Services excluded in subpart 37.2;</P>
              <P>(2) Routine engineering and technical services (such as installation, operation, or maintenance of systems, equipment, software, components, or facilities);</P>
              <P>(3) Routine legal, actuarial, auditing, and accounting services; and</P>
              <P>(4) Training services.</P>
              <CITA>[55 FR 42685, Oct. 22, 1990, as amended at 66 FR 2128, Jan. 10, 2001]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>9.502</SECTNO>
              <SUBJECT>Applicability.</SUBJECT>
              <P>(a) This subpart applies to contracts with either profit or nonprofit organizations, including nonprofit organizations created largely or wholly with Government funds.</P>
              <P>(b) The applicability of this subpart is not limited to any particular kind of acquisition. However, organizational conflicts of interest are more likely to occur in contracts involving—</P>
              <P>(1) Management support services;</P>
              <P>(2) Consultant or other professional services;</P>
              <P>(3) Contractor performance of or assistance in technical evaluations; or</P>
              <P>(4) Systems engineering and technical direction work performed by a contractor that does not have overall contractual responsibility for development or production.</P>
              <P>(c) An oganizational conflict of interest may result when factors create an actual or potential conflict of interest on an instant contract, or when the nature of the work to be performed on the instant contract creates an actual or potential conflict of interest on a future acquisition. In the latter case, some restrictions on future activities of the contractor may be required.</P>
              <P>(d) Acquisitions subject to unique agency organizational conflict of interest statutes are excluded from the requirements of this subpart.</P>
              <CITA>[48 FR 42142, Sept. 19, 1983, as amended at 55 FR 42686, Oct. 22, 1990; 56 FR 55377, Oct. 25, 1991]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>9.503</SECTNO>
              <SUBJECT>Waiver.</SUBJECT>
              <P>The agency head or a designee may waive any general rule or procedure of this subpart by determining that its application in a particular situation would not be in the Government's interest. Any request for waiver must be in writing, shall set forth the extent of the conflict, and requires approval by the agency head or a designee. Agency heads shall not delegate waiver authority below the level of head of a contracting activity.</P>
            </SECTION>
            <SECTION>
              <SECTNO>9.504</SECTNO>
              <SUBJECT>Contracting officer responsibilities.</SUBJECT>
              <P>(a) Using the general rules, procedures, and examples in this subpart, contracting officers shall analyze planned acquisitions in order to—</P>
              <P>(1) Identify and evaluate potential organizational conflicts of interest as early in the acquisition process as possible; and</P>
              <P>(2) Avoid, neutralize, or mitigate significant potential conflicts before contract award.</P>
              <P>(b) Contracting officers should obtain the advice of counsel and the assistance of appropriate technical specialists in evaluating potential conflicts and in developing any necessary solicitation provisions and contract clauses (see 9.506).</P>
              <P>(c) Before issuing a solicitation for a contract that may involve a significant potential conflict, the contracting officer shall recommend to the head of the contracting activity a course of action for resolving the conflict (see 9.506).</P>

              <P>(d) In fulfilling their responsibilities for identifying and resolving potential conflicts, contracting officers should avoid creating unnecessary delays, burdensome information requirements, <PRTPAGE P="173"/>and excessive documentation. The contracting officer's judgment need be formally documented only when a substantive issue concerning potential organizational conflict of interest exists.</P>
              <P>(e) The contracting officer shall award the contract to the apparent successful offeror unless a conflict of interest is determined to exist that cannot be avoided or mitigated. Before determining to withhold award based on conflict of interest considerations, the contracting officer shall notify the contractor, provide the reasons therefor, and allow the contractor a reasonable opportunity to respond. If the contracting officer finds that it is in the best interest of the United States to award the contract notwithstanding a conflict of interest, a request for waiver shall be submitted in accordance with 9.503. The waiver request and decision shall be included in the contract file.</P>
              <CITA>[48 FR 42142, Sept. 19, 1983, as amended at 55 FR 42686, Oct. 22, 1990; 56 FR 55377, Oct. 25, 1991]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>9.505</SECTNO>
              <SUBJECT>General rules.</SUBJECT>
              <P>The general rules in 9.505-1 through 9.505-4 prescribe limitations on contracting as the means of avoiding, neutralizing, or mitigating organizational conflicts of interest that might otherwise exist in the stated situations. Some illustrative examples are provided in 9.508. Conflicts may arise in situations not expressly covered in this section 9.505 or in the examples in 9.508. Each individual contracting situation should be examined on the basis of its particular facts and the nature of the proposed contract. The exercise of common sense, good judgment, and sound discretion is required in both the decision on whether a significant potential conflict exists and, if it does, the development of an appropriate means for resolving it. The two underlying principles are—</P>
              <P>(a) Preventing the existence of conflicting roles that might bias a contractor's judgment; and</P>
              <P>(b) Preventing unfair competitive advantage. In addition to the other situations described in this subpart, an unfair competitive advantage exists where a contractor competing for award for any Federal contract possesses—</P>
              <P>(1) Proprietary information that was obtained from a Government official without proper authorization; or</P>
              <P>(2) Source selection information (as defined in 2.101) that is relevant to the contract but is not available to all competitors, and such information would assist that contractor in obtaining the contract.</P>
              <CITA>[48 FR 42142, Sept. 19, 1983, as amended at 55 FR 42686, Oct. 22, 1990; 56 FR 55377, Oct. 25, 1991; 62 FR 232, Jan. 2, 1997; 64 FR 32748, June 17, 1999; 67 FR 13063, Mar. 20, 2002]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>9.505-1</SECTNO>
              <SUBJECT>Providing systems engineering and technical direction.</SUBJECT>
              <P>(a) A contractor that provides systems engineering and technical direction for a system but does not have overall contractual responsibility for its development, its integration, assembly, and checkout, or its production shall not (1) be awarded a contract to supply the system or any of its major components or (2) be a subcontractor or consultant to a supplier of the system or any of its major components.</P>
              <P>(b) Systems engineering includes a combination of substantially all of the following activities: determining specifications, identifying and resolving interface problems, developing test requirements, evaluating test data, and supervising design. Technical direction includes a combination of substantially all of the following activities: developing work statements, determining parameters, directing other contractors' operations, and resolving technical controversies. In performing these activities, a contractor occupies a highly influential and responsible position in determining a system's basic concepts and supervising their execution by other contractors. Therefore this contractor should not be in a position to make decisions favoring its own products or capabilities.</P>
            </SECTION>
            <SECTION>
              <SECTNO>9.505-2</SECTNO>
              <SUBJECT>Preparing specifications or work statements.</SUBJECT>

              <P>(a)(1) If a contractor prepares and furnishes complete specifications covering nondevelopmental items, to be used in a competitive acquisition, that <PRTPAGE P="174"/>contractor shall not be allowed to furnish these items, either as a prime contractor or as a subcontractor, for a reasonable period of time including, at least, the duration of the initial production contract. This rule shall not apply to—</P>
              <P>(i) Contractors that furnish at Government request specifications or data regarding a product they provide, even though the specifications or data may have been paid for separately or in the price of the product; or</P>
              <P>(ii) Situations in which contractors, acting as industry representatives, help Government agencies prepare, refine, or coordinate specifications, regardless of source, provided this assistance is supervised and controlled by Government representatives.</P>
              <P>(2) If a single contractor drafts complete specifications for nondevelopmental equipment, it should be eliminated for a reasonable time from competition for production based on the specifications. This should be done in order to avoid a situation in which the contractor could draft specifications favoring its own products or capabilities. In this way the Government can be assured of getting unbiased advice as to the content of the specifications and can avoid allegations of favoritism in the award of production contracts.</P>
              <P>(3) In development work, it is normal to select firms that have done the most advanced work in the field. These firms can be expected to design and develop around their own prior knowledge. Development contractors can frequently start production earlier and more knowledgeably than firms that did not participate in the development, and this can affect the time and quality of production, both of which are important to the Government. In many instances the Government may have financed the development. Thus, while the development contractor has a competitive advantage, it is an unavoidable one that is not considered unfair; hence no prohibition should be imposed.</P>
              <P>(b)(1) If a contractor prepares, or assists in preparing, a work statement to be used in competitively acquiring a system or services—or provides material leading directly, predictably, and without delay to such a work statement—that contractor may not supply the system, major components of the system, or the services unless—</P>
              <P>(i) It is the sole source;</P>
              <P>(ii) It has participated in the development and design work; or</P>
              <P>(iii) More than one contractor has been involved in preparing the work statement.</P>
              <P>(2) Agencies should normally prepare their own work statements. When contractor assistance is necessary, the contractor might often be in a position to favor its own products or capabilities. To overcome the possibility of bias, contractors are prohibited from supplying a system or services acquired on the basis of work statements growing out of their services, unless excepted in subparagraph (1) above.</P>
              <P>(3) For the reasons given in 9.505-2(a)(3), no prohibitions are imposed on development and design contractors.</P>
            </SECTION>
            <SECTION>
              <SECTNO>9.505-3</SECTNO>
              <SUBJECT>Providing evaluation services.</SUBJECT>
              <P>Contracts for the evaluation of offers for products or services shall not be awarded to a contractor that will evaluate its own offers for products or services, or those of a competitor, without proper safeguards to ensure objectivity to protect the Government's interests.</P>
              <CITA>[62 FR 12694, Mar. 17, 1997]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>9.505-4</SECTNO>
              <SUBJECT>Obtaining access to proprietary information.</SUBJECT>
              <P>(a) When a contractor requires proprietary information from others to perform a Government contract and can use the leverage of the contract to obtain it, the contractor may gain an unfair competitive advantage unless restrictions are imposed. These restrictions protect the information and encourage companies to provide it when necessary for contract performance. They are not intended to protect information (1) furnished voluntarily without limitations on its use or (2) available to the Government or contractor from other sources without restriction.</P>

              <P>(b) A contractor that gains access to proprietary information of other companies in performing advisory and assistance services for the Government must agree with the other companies to protect their information from unauthorized use or disclosure for as long as it remains proprietary and refrain <PRTPAGE P="175"/>from using the information for any purpose other than that for which it was furnished. The contracting officer shall obtain copies of these agreements and ensure that they are properly executed.</P>
              <P>(c) Contractors also obtain proprietary and source selection information by acquiring the services of marketing consultants which, if used in connection with an acquisition, may give the contractor an unfair competitive advantage. Contractors should make inquiries of marketing consultants to ensure that the marketing consultant has provided no unfair competitive advantage.</P>
              <CITA>[48 FR 42142, Sept. 19, 1983, as amended at 55 FR 42686, Oct. 22, 1990; 56 FR 55377, Oct. 25, 1991; 62 FR 235, Jan. 2, 1997]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>9.506</SECTNO>
              <SUBJECT>Procedures.</SUBJECT>
              <P>(a) If information concerning prospective contractors is necessary to identify and evaluate potential organizational conflicts of interest or to develop recommended actions, contracting officers should first seek the information from within the Government or from other readily available sources. Government sources include the files and the knowledge of personnel within the contracting office, other contracting offices, the cognizant contract administration and audit activities and offices concerned with contract financing. Non-Government sources include publications and commercial services, such as credit rating services, trade and financial journals, and business directories and registers.</P>
              <P>(b) If the contracting officer decides that a particular acquisition involves a significant potential organizational conflict of interest, the contracting officer shall, before issuing the solicitation, submit for approval to the chief of the contracting office (unless a higher level official is designated by the agency)—</P>
              <P>(1) A written analysis, including a recommended course of action for avoiding, neutralizing, or mitigating the conflict, based on the general rules in 9.505 or on another basis not expressly stated in that section;</P>
              <P>(2) A draft solicitation provision (see 9.507-1); and</P>
              <P>(3) If appropriate, a proposed contract clause (see 9.507-2).</P>
              <P>(c) The approving official shall—</P>
              <P>(1) Review the contracting officer's analysis and recommended course of action, including the draft provision and any proposed clause;</P>
              <P>(2) Consider the benefits and detriments to the Government and prospective contractors; and</P>
              <P>(3) Approve, modify, or reject the recommendations in writing.</P>
              <P>(d) The contracting officer shall—</P>
              <P>(1) Include the approved provision(s) and any approved clause(s) in the solicitation or the contract, or both;</P>
              <P>(2) Consider additional information provided by prospective contractors in response to the solicitation or during negotiations; and</P>
              <P>(3) Before awarding the contract, resolve the conflict or the potential conflict in a manner consistent with the approval or other direction by the head of the contracting activity.</P>
              <P>(e) If, during the effective period of any restriction (see 9.507), a contracting office transfers acquisition responsibility for the item or system involved, it shall notify the successor contracting office of the restriction, and send a copy of the contract under which the restriction was imposed.</P>
              <CITA>[55 FR 42686, Oct. 22, 1990, as amended at 62 FR 235, Jan. 2, 1997]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>9.507</SECTNO>
              <SUBJECT>Solicitation provisions and contract clause.</SUBJECT>
            </SECTION>
            <SECTION>
              <SECTNO>9.507-1</SECTNO>
              <SUBJECT>Solicitation provisions.</SUBJECT>
              <P>As indicated in the general rules in 9.505, significant potential organizational conflicts of interest are normally resolved by imposing some restraint, appropriate to the nature of the conflict, upon the contractor's eligibilty for future contracts or subcontracts. Therefore, affected solicitations shall contain a provision that—</P>
              <P>(a) Invites offerors' attention to this subpart;</P>
              <P>(b) States the nature of the potential conflict as seen by the contracting officer;</P>
              <P>(c) States the nature of the proposed restraint upon future contractor activities; and</P>

              <P>(d) Depending on the nature of the acquisition, states whether or not the <PRTPAGE P="176"/>terms of any proposed clause and the application of this subpart to the contract are subject to negotiation.</P>
              <CITA>[55 FR 42687, Oct. 22, 1990, as amended at 56 FR 55377, Oct. 25, 1991; 60 FR 34748, July 3, 1995; 60 FR 49721, Sept. 26, 1995; 62 FR 235, Jan. 2, 1997]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>9.507-2</SECTNO>
              <SUBJECT>Contract clause.</SUBJECT>
              <P>(a) If, as a condition of award, the contractor's eligibility for future prime contract or subcontract awards will be restricted or the contractor must agree to some other restraint, the solicitation shall contain a proposed clause that specifies both the nature and duration of the proposed restraint. The contracting officer shall include the clause in the contract, first negotiating the clause's final terms with the successful offeror, if it is appropriate to do so (see 9.508-1(d) of this subsection).</P>
              <P>(b) The restraint imposed by a clause shall be limited to a fixed term of reasonable duration, sufficient to avoid the circumstance of unfair competitive advantage or potential bias. This period varies. It might end, for example, when the first production contract using the contractor's specifications or work statement is awarded, or it might extend through the entire life of a system for which the contractor has performed systems engineering and technical direction. In every case, the restriction shall specify termination by a specific date or upon the occurrence of an identifiable event.</P>
              <CITA>[55 FR 42687, Oct. 22, 1990]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>9.508</SECTNO>
              <SUBJECT>Examples.</SUBJECT>
              <P>The examples in paragraphs (a) through (i) following illustrate situations in which questions concerning organizational conflicts of interest may arise. They are not all inclusive, but are intended to help the contracting officer apply the general rules in 9.505 to individual contract situations.</P>
              <P>(a) Company A agrees to provide systems engineering and technical direction for the Navy on the powerplant for a group of submarines (i.e., turbines, drive shafts, propellers, etc.). Company A should not be allowed to supply any powerplant components. Company A can, however, supply components of the submarine unrelated to the powerplant (e.g., fire control, navigation, etc.). In this example, the system is the powerplant, not the submarine, and the ban on supplying components is limited to those for the system only.</P>
              <P>(b) Company A is the systems engineering and technical direction contractor for system X. After some progress, but before completion, the system is canceled. Later, system Y is developed to achieve the same purposes as system X, but in a fundamentally different fashion. Company B is the systems engineering and technical direction contractor for system Y. Company A may supply system Y or its components.</P>
              <P>(c) Company A develops new electronic equipment and, as a result of this development, prepares specifications. Company A may supply the equipment.</P>
              <P>(d) XYZ Tool Company and PQR Machinery Company, representing the American Tool Institute, work under Government supervision and control to refine specifications or to clarify the requirements of a specific acquisition. These companies may supply the item.</P>
              <P>(e) Before an acquisition for information technology is conducted, Company A is awarded a contract to prepare data system specifications and equipment performance criteria to be used as the basis for the equipment competition. Since the specifications are the basis for selection of commercial hardware, a potential conflict of interest exists. Company A should be excluded from the initial follow-on information technology hardware acquisition.</P>
              <P>(f) Company A receives a contract to define the detailed performance characteristics an agency will require for purchasing rocket fuels. Company A has not developed the particular fuels. When the definition contract is awarded, it is clear to both parties that the agency will use the performance characteristics arrived at to choose competitively a contractor to develop or produce the fuels. Company A may not be awarded this follow-on contract.</P>

              <P>(g) Company A receives a contract to prepare a detailed plan for scientific and technical training of an agency's personnel. It suggests a curriculum <PRTPAGE P="177"/>that the agency endorses and incorporates in its request for proposals to institutions to establish and conduct the training. Company A may not be awarded a contract to conduct the training.</P>
              <P>(h) Company A is selected to study the use of lasers in communications. The agency intends to ask that firms doing research in the field make proprietary information available to Company A. The contract must require Company A to (1) enter into agreements with these firms to protect any proprietary information they provide and (2) refrain from using the information in supplying lasers to the Government or for any purpose other than that for which it was intended.</P>
              <P>(i) An agency that regulates an industry wishes to develop a system for evaluating and processing license applications. Contractor X helps develop the system and process the applications. Contractor X should be prohibited from acting as a consultant to any of the applicants during its period of performance and for a reasonable period thereafter.</P>
              <CITA>[48 FR 42142, Sept. 19, 1983. Redesignated at 55 FR 42687, Oct. 22, 1990; 61 FR 41469, Aug. 8, 1996]</CITA>
            </SECTION>
          </SUBPART>
          <SUBPART>
            <HD SOURCE="HED">Subpart 9.6—Contractor Team Arrangements</HD>
            <SECTION>
              <SECTNO>9.601</SECTNO>
              <SUBJECT>Definition.</SUBJECT>
              <P>
                <E T="03">Contractor team arrangement,</E> as used in this subpart, means an arrangement in which—</P>
              <P>(1) Two or more companies form a partnership or joint venture to act as a potential prime contractor; or</P>
              <P>(2) A potential prime contractor agrees with one or more other companies to have them act as its subcontractors under a specified Government contract or acquisition program.</P>
              <CITA>[48 FR 42142, Sept. 19, 1983, as amended at 66 FR 2128, Jan. 10, 2001]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>9.602</SECTNO>
              <SUBJECT>General.</SUBJECT>
              <P>(a) Contractor team arrangements may be desirable from both a Government and industry standpoint in order to enable the companies involved to (1) complement each other's unique capabilities and (2) offer the Government the best combination of performance, cost, and delivery for the system or product being acquired.</P>
              <P>(b) Contractor team arrangements may be particularly appropriate in complex research and development acquisitions, but may be used in other appropriate acquisitions, including production.</P>
              <P>(c) The companies involved normally form a contractor team arrangement before submitting an offer. However, they may enter into an arrangement later in the acquisition process, including after contract award.</P>
            </SECTION>
            <SECTION>
              <SECTNO>9.603</SECTNO>
              <SUBJECT>Policy.</SUBJECT>

              <P>The Government will recognize the integrity and validity of contractor team arrangements; <E T="03">provided,</E> the arrangements are identified and company relationships are fully disclosed in an offer or, for arrangements entered into after submission of an offer, before the arrangement becomes effective. The Government will not normally require or encourage the dissolution of contractor team arrangements.</P>
            </SECTION>
            <SECTION>
              <SECTNO>9.604</SECTNO>
              <SUBJECT>Limitations.</SUBJECT>
              <P>Nothing in this subpart authorizes contractor team arrangements in violation of antitrust statutes or limits the Government's rights to—</P>
              <P>(a) Require consent to subcontracts (see subpart 44.2);</P>
              <P>(b) Determine, on the basis of the stated contractor team arrangement, the responsibility of the prime contractor (see subpart 9.1);</P>
              <P>(c) Provide to the prime contractor data rights owned or controlled by the Government;</P>
              <P>(d) Pursue its policies on competitive contracting, subcontracting, and component breakout after initial production or at any other time; and</P>
              <P>(e) Hold the prime contractor fully responsible for contract performance, regardless of any team arrangement between the prime contractor and its subcontractors.</P>
            </SECTION>
          </SUBPART>
          <SUBPART>
            <PRTPAGE P="178"/>
            <HD SOURCE="HED">Subpart 9.7—Defense Production Pools and Research and Development Pools</HD>
            <SECTION>
              <SECTNO>9.701</SECTNO>
              <SUBJECT>Definition.</SUBJECT>
              <P>
                <E T="03">Pool,</E> as used in this subpart, means a group of concerns (see 19.001) that have—</P>
              <P>(1) Associated together in order to obtain and perform, jointly or in conjunction with each other, defense production or research and development contracts;</P>
              <P>(2) Entered into an agreement governing their organization, relationship, and procedures; and</P>
              <P>(3) Obtained approval of the agreement by either—</P>
              <P>(i) The Small Business Administration (SBA) under section 9 or 11 of the Small Business Act (15 U.S.C. 638 or 640) (see 13 CFR part 125); or</P>
              <P>(ii) A designated official under Part V of Executive Order 10480, August 14, 1953 (18 FR 4939, August 20, 1953) and section 708 of the Defense Production Act of 1950 (50 U.S.C. App. 2158).</P>
              <CITA>[48 FR 42142, Sept. 19, 1983, as amended at 51 FR 2649, Jan. 17, 1986; 66 FR 2128, Jan. 10, 2001]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>9.702</SECTNO>
              <SUBJECT>Contracting with pools.</SUBJECT>
              <P>(a) Except as specified in this subpart, a pool shall be treated the same as any other prospective or actual contractor.</P>
              <P>(b) The contracting officer shall not award a contract to a pool unless the offer leading to the contract is submitted by the pool in its own name or by an individual pool member expressly stating that the offer is on behalf of the pool.</P>
              <P>(c) Upon receipt of an offer submitted by a group representing that it is a pool, the contracting officer shall verify its approved status with the SBA District Office Director or other approving agency and document the contract file that the verification was made.</P>
              <P>(d) Pools approved by the SBA under the Small Business Act are entitled to the preferences and privileges accorded to small business concerns. Approval under the Defense Production Act does not confer these preferences and privileges.</P>
              <P>(e) Before awarding a contract to an unincorporated pool, the contracting officer shall require each pool member participating in the contract to furnish a certified copy of a power of attorney identifying the agent authorized to sign the offer or contract on that member's behalf. The contracting officer shall attach a copy of each power of attorney to each signed copy of the contract retained by the Government.</P>
              <CITA>[48 FR 42142, Setp. 19, 1983, as amended at 61 FR 67410, Dec. 20, 1996]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>9.703</SECTNO>
              <SUBJECT>Contracting with individual pool members.</SUBJECT>
              <P>(a) Pool members may submit individual offers, independent of the pool. However, the contracting officer shall not consider an independent offer by a pool member if that pool member participates in a competing offer submitted by the pool.</P>
              <P>(b) If a pool member submits an individual offer, independent of the pool, the contracting officer shall consider the pool agreement, along with other factors, in determining whether that pool member is a responsible prospective contractor under subpart 9.1.</P>
            </SECTION>
          </SUBPART>
        </PART>
        <PART>
          <EAR>Pt. 10</EAR>
          <HD SOURCE="HED">PART 10—MARKET RESEARCH</HD>
          <CONTENTS>
            <SECHD>Sec.</SECHD>
            <SECTNO>10.000</SECTNO>
            <SUBJECT>Scope of part.</SUBJECT>
            <SECTNO>10.001</SECTNO>
            <SUBJECT>Policy.</SUBJECT>
            <SECTNO>10.002</SECTNO>
            <SUBJECT>Procedures.</SUBJECT>
          </CONTENTS>
          <AUTH>
            <HD SOURCE="HED">Authority:</HD>
            <P>40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 42 U.S.C. 2473(c).</P>
          </AUTH>
          <SOURCE>
            <HD SOURCE="HED">Source:</HD>
            <P>60 FR 48237, Sept. 18, 1995, unless otherwise noted.</P>
          </SOURCE>
          <SECTION>
            <SECTNO>10.000</SECTNO>
            <SUBJECT>Scope of part.</SUBJECT>
            <P>This part prescribes policies and procedures for conducting market research to arrive at the most suitable approach to acquiring, distributing, and supporting supplies and services. This part implements requirements of 41 U.S.C. 253a(a)(1), 41 U.S.C 264b, and 10 U.S.C. 2377.</P>
          </SECTION>
          <SECTION>
            <SECTNO>10.001</SECTNO>
            <SUBJECT>Policy.</SUBJECT>
            <P>(a) Agencies must—</P>

            <P>(1) Ensure that legitimate needs are identified and trade-offs evaluated to acquire items that meet those needs;<PRTPAGE P="179"/>
            </P>
            <P>(2) Conduct market research appropriate to the circumstances—</P>
            <P>(i) Before developing new requirements documents for an acquisition by that agency;</P>
            <P>(ii) Before soliciting offers for acquisitions with an estimated value in excess of the simplified acquisition threshold;</P>
            <P>(iii) Before soliciting offers for acquisitions with an estimated value less than the simplified acquisition threshold when adequate information is not available and the circumstances justify its cost;</P>
            <P>(iv) Before soliciting offers for acquisitions that could lead to a bundled contract (15 U.S.C. 644(e)(2)(A)); and</P>
            <P>(v) Agencies shall conduct market research on an ongoing basis, and take advantage to the maximum extent practicable of commercially available market research methods, to identify effectively the capabilities, including the capabilities of small businesses and new entrants into Federal contracting, that are available in the marketplace for meeting the requirements of the agency in furtherance of a contingency operation or defense against or recovery from nuclear, biological, chemical, or radiological attack; and</P>
            <P>(3) Use the results of market research to—</P>
            <P>(i) Determine if sources capable of satisfying the agency's requirements exist;</P>
            <P>(ii) Determine if commercial items or, to the extent commercial items suitable to meet the agency's needs are not available, nondevelopmental items are available that—</P>
            <P>(A) Meet the agency's requirements;</P>
            <P>(B) Could be modified to meet the agency's requirements; or</P>
            <P>(C) Could meet the agency's requirements if those requirements were modified to a reasonable extent;</P>
            <P>(iii) Determine the extent to which commercial items or nondevelopmental items could be incorporated at the component level;</P>
            <P>(iv) Determine the practices of firms engaged in producing, distributing, and supporting commercial items, such as type of contract, terms for warranties, buyer financing, maintenance and packaging, and marking;</P>
            <P>(v) Ensure maximum practicable use of recovered materials (see subpart 23.4) and promote energy conservation and efficiency; and</P>
            <P>(vi) Determine whether bundling is necessary and justified (see 7.107) (15 U.S.C. 644(e)(2)(A)).</P>
            <P>(vii) Assess the availability of electronic and information technology that meets all or part of the applicable accessibility standards issued by the Architectural and Transportation Barriers Compliance Board at 36 CFR part 1194 (see Subpart 39.2).</P>
            <P>(b) When conducting market research, agencies should not request potential sources to submit more than the minimum information necessary.</P>
            <P>(c) If an agency contemplates awarding a bundled contract, the agency—</P>
            <P>(1) When performing market research, should consult with the local Small Business Administration procurement center representative (PCR). If a PCR is not assigned, see 19.402 (a); and</P>
            <P>(2) At least 30 days before release of the solicitation or 30 days prior to placing an order without a solicitation—</P>
            <P>(i) Must notify any affected incumbent small business concerns of the Government's intention to bundle the requirement; and</P>
            <P>(ii) Should notify any affected incumbent small business concerns of how the concerns may contact the appropriate Small Business Administration representative.</P>
            <CITA>[60 FR 48237, Sept. 18, 1995, as amended at 64 FR 72443, Dec. 27, 1999; 65 FR 46054, July 26, 2000; 66 FR 20896, Apr. 25, 2001; 68 FR 4049, Jan. 27, 2003; 68 FR 60005, Oct. 20, 2003; 69 FR 8313, Feb. 23, 2003; 71 FR 36925, June 28, 2006; 71 FR 74676, Dec. 12, 2006]</CITA>
          </SECTION>
          <SECTION>
            <SECTNO>10.002</SECTNO>
            <SUBJECT>Procedures.</SUBJECT>
            <P>(a) Acquisitions begin with a description of the Government's needs stated in terms sufficient to allow conduct of market research.</P>
            <P>(b) Market research is then conducted to determine if commercial items or nondevelopmental items are available to meet the Government's needs or could be modified to meet the Government's needs.</P>

            <P>(1) The extent of market research will vary, depending on such factors as <PRTPAGE P="180"/>urgency, estimated dollar value, complexity, and past experience. Market research involves obtaining information specific to the item being acquired and should include—</P>
            <P>(i) Whether the Government's needs can be met by—</P>
            <P>(A) Items of a type customarily available in the commercial marketplace;</P>
            <P>(B) Items of a type customarily available in the commercial marketplace with modifications; or</P>
            <P>(C) Items used exclusively for governmental purposes;</P>
            <P>(ii) Customary practices regarding customizing, modifying or tailoring of items to meet customer needs and associated costs;</P>
            <P>(iii) Customary practices, including warranty, buyer financing, discounts, contract type considering the nature and risk associated with the requirement, etc., under which commercial sales of the products or services are made;</P>
            <P>(iv) The requirements of any laws and regulations unique to the item being acquired;</P>
            <P>(v) The availability of items that contain recovered materials and items that are energy efficient;</P>
            <P>(vi) The distribution and support capabilities of potential suppliers, including alternative arrangements and cost estimates; and</P>
            <P>(vii) Size and status of potential sources (see part 19).</P>
            <P>(2) Techniques for conducting market research may include any or all of the following:</P>
            <P>(i) Contacting knowledgeable individuals in Government and industry regarding market capabilities to meet requirements.</P>
            <P>(ii) Reviewing the results of recent market research undertaken to meet similar or identical requirements.</P>
            <P>(iii) Publishing formal requests for information in appropriate technical or scientific journals or business publications.</P>

            <P>(iv) Querying the Governmentwide database of contracts and other procurement instruments intended for use by multiple agencies available at <E T="03">http://www.contractdirectory.gov</E> and other Government and commercial databases that provide information relevant to agency acquisitions.</P>
            <P>(v) Participating in interactive, on-line communication among industry, acquisition personnel, and customers.</P>
            <P>(vi) Obtaining source lists of similar items from other contracting activities or agencies, trade associations or other sources.</P>
            <P>(vii) Reviewing catalogs and other generally available product literature published by manufacturers, distributors, and dealers or available on-line.</P>
            <P>(viii) Conducting interchange meetings or holding presolicitation conferences to involve potential offerors early in the acquisition process.</P>
            <P>(c) If market research indicates commercial or nondevelopmental items might not be available to satisfy agency needs, agencies shall reevaluate the need in accordance with 10.001(a)(3)(ii) and determine whether the need can be restated to permit commercial or nondevelopmental items to satisfy the agency's needs.</P>
            <P>(d)(1) If market research establishes that the Government's need may be met by a type of item or service customarily available in the commercial marketplace that would meet the definition of a commercial item at subpart 2.1, the contracting officer shall solicit and award any resultant contract using the policies and procedures in part 12.</P>

            <P>(2) If market research establishes that the Government's need cannot be met by a type of item or service customarily available in the marketplace, part 12 shall not be used. When publication of the notice at 5.201 is required, the contracting officer shall include a notice to prospective offerors that the Government does not intend to use part 12 for the acquisition (<E T="03">see</E> 5.207(e)).</P>
            <P>(e) Agencies should document the results of market research in a manner appropriate to the size and complexity of the acquisition.</P>
            <CITA>[60 FR 48237, Sept. 18, 1995, as amended at 68 FR 43863, July 24, 2003; 68 FR 56679, 56682, Oct. 1, 2003; 71 FR 74676, Dec. 12, 2006]</CITA>
          </SECTION>
        </PART>
        <PART>
          <EAR>Pt. 11</EAR>
          <HD SOURCE="HED">PART 11—DESCRIBING AGENCY NEEDS</HD>
          <CONTENTS>
            <SECHD>Sec.</SECHD>
            <SECTNO>11.000</SECTNO>
            <SUBJECT>Scope of part.</SUBJECT>
            <SECTNO>11.001</SECTNO>
            <SUBJECT>Definitions.<PRTPAGE P="181"/>
            </SUBJECT>
            <SECTNO>11.002</SECTNO>
            <SUBJECT>Policy.</SUBJECT>
            <SUBPART>
              <HD SOURCE="HED">Subpart 11.1—Selecting and Developing Requirements Documents</HD>
              <SECTNO>11.101</SECTNO>
              <SUBJECT>Order of precedence for requirements documents.</SUBJECT>
              <SECTNO>11.102</SECTNO>
              <SUBJECT>Standardization program.</SUBJECT>
              <SECTNO>11.103</SECTNO>
              <SUBJECT>Market acceptance.</SUBJECT>
              <SECTNO>11.104</SECTNO>
              <SUBJECT>Use of brand name or equal purchase descriptions.</SUBJECT>
              <SECTNO>11.105</SECTNO>
              <SUBJECT>Items peculiar to one manufacturer.</SUBJECT>
              <SECTNO>11.106</SECTNO>
              <SUBJECT>Purchase descriptions for service contracts.</SUBJECT>
              <SECTNO>11.107</SECTNO>
              <SUBJECT>Solicitation provision.</SUBJECT>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart 11.2—Using and Maintaining Requirements Documents</HD>
              <SECTNO>11.201</SECTNO>
              <SUBJECT>Identification and availability of specifications.</SUBJECT>
              <SECTNO>11.202</SECTNO>
              <SUBJECT>Maintenance of standardization documents.</SUBJECT>
              <SECTNO>11.203</SECTNO>
              <SUBJECT>Customer satisfaction.</SUBJECT>
              <SECTNO>11.204</SECTNO>
              <SUBJECT>Solicitation provisions and contract clauses.</SUBJECT>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart 11.3—Acceptable Material</HD>
              <SECTNO>11.301</SECTNO>
              <SUBJECT>Definitions.</SUBJECT>
              <SECTNO>11.302</SECTNO>
              <SUBJECT>Policy.</SUBJECT>
              <SECTNO>11.303</SECTNO>
              <SUBJECT>Special requirements for printing and writing paper.</SUBJECT>
              <SECTNO>11.304</SECTNO>
              <SUBJECT>Contract clause.</SUBJECT>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart 11.4—Delivery or Performance Schedules</HD>
              <SECTNO>11.401</SECTNO>
              <SUBJECT>General.</SUBJECT>
              <SECTNO>11.402</SECTNO>
              <SUBJECT>Factors to consider in establishing schedules.</SUBJECT>
              <SECTNO>11.403</SECTNO>
              <SUBJECT>Supplies or services.</SUBJECT>
              <SECTNO>11.404</SECTNO>
              <SUBJECT>Contract clauses.</SUBJECT>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart 11.5—Liquidated Damages</HD>
              <SECTNO>11.500</SECTNO>
              <SUBJECT>Scope.</SUBJECT>
              <SECTNO>11.501</SECTNO>
              <SUBJECT>Policy.</SUBJECT>
              <SECTNO>11.502</SECTNO>
              <SUBJECT>Procedures.</SUBJECT>
              <SECTNO>11.503</SECTNO>
              <SUBJECT>Contract clauses.</SUBJECT>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart 11.6—Priorities and Allocations</HD>
              <SECTNO>11.600</SECTNO>
              <SUBJECT>Scope of subpart.</SUBJECT>
              <SECTNO>11.601</SECTNO>
              <SUBJECT>Definitions.</SUBJECT>
              <SECTNO>11.602</SECTNO>
              <SUBJECT>General.</SUBJECT>
              <SECTNO>11.603</SECTNO>
              <SUBJECT>Procedures.</SUBJECT>
              <SECTNO>11.604</SECTNO>
              <SUBJECT>Solicitation provisions and contract clauses.</SUBJECT>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart 11.7—Variation in Quantity</HD>
              <SECTNO>11.701</SECTNO>
              <SUBJECT>Supply contracts.</SUBJECT>
              <SECTNO>11.702</SECTNO>
              <SUBJECT>Construction contracts.</SUBJECT>
              <SECTNO>11.703</SECTNO>
              <SUBJECT>Contract clauses.</SUBJECT>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart 11.8—Testing</HD>
              <SECTNO>11.801</SECTNO>
              <SUBJECT>Preaward in-use evaluation.</SUBJECT>
            </SUBPART>
          </CONTENTS>
          <AUTH>
            <HD SOURCE="HED">Authority:</HD>
            <P>Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 42 U.S.C. 2473(c).</P>
          </AUTH>
          <SOURCE>
            <HD SOURCE="HED">Source:</HD>
            <P>60 FR 48238, Sept. 18, 1995, unless otherwise noted.</P>
          </SOURCE>
          <SECTION>
            <SECTNO>11.000</SECTNO>
            <SUBJECT>Scope of part.</SUBJECT>
            <P>This part prescribes policies and procedures for describing agency needs.</P>
          </SECTION>
          <SECTION>
            <SECTNO>11.001</SECTNO>
            <SUBJECT>Definitions.</SUBJECT>
            <P>As used in this part—</P>
            <P>
              <E T="03">Reconditioned</E> means restored to the original normal operating condition by readjustments and material replacement.</P>
            <P>
              <E T="03">Remanufactured</E> means factory rebuilt to original specifications.</P>
            <CITA>[62 FR 44810, Aug. 22, 1997, as amended at 63 FR 9051, Feb. 23, 1998; 65 FR 36017, June 6, 2000]</CITA>
          </SECTION>
          <SECTION>
            <SECTNO>11.002</SECTNO>
            <SUBJECT>Policy.</SUBJECT>
            <P>(a) In fulfilling requirements of 10 U.S.C. 2305(a)(1), 10 U.S.C. 2377, 41 U.S.C. 253a(a), and 41 U.S.C. 264b, agencies shall—</P>
            <P>(1) Specify needs using market research in a manner designed to—</P>
            <P>(i) Promote full and open competition (see part 6), or maximum practicable competition when using simplified acquisition procedures, with due regard to the nature of the supplies or services to be acquired; and</P>
            <P>(ii) Only include restrictive provisions or conditions to the extent necessary to satisfy the needs of the agency or as authorized by law.</P>
            <P>(2) To the maximum extent practicable, ensure that acquisition officials—</P>
            <P>(i) State requirements with respect to an acquisition of supplies or services in terms of—</P>
            <P>(A) Functions to be performed;</P>
            <P>(B) Performance required; or</P>
            <P>(C) Essential physical characteristics;</P>
            <P>(ii) Define requirements in terms that enable and encourage offerors to supply commercial items, or, to the extent that commercial items suitable to meet the agency's needs are not available, nondevelopmental items, in response to the agency solicitations;</P>

            <P>(iii) Provide offerors of commercial items and nondevelopmental items an opportunity to compete in any acquisition to fill such requirements;<PRTPAGE P="182"/>
            </P>
            <P>(iv) Require prime contractors and subcontractors at all tiers under the agency contracts to incorporate commercial items or nondevelopmental items as components of items supplied to the agency; and</P>
            <P>(v) Modify requirements in appropriate cases to ensure that the requirements can be met by commercial items or, to the extent that commercial items suitable to meet the agency's needs are not available, nondevelopmental items.</P>

            <P>(b) The Metric Conversion Act of 1975, as amended by the Omnibus Trade and Competitiveness Act of 1988 (15 U.S.C. 205a, <E T="03">et seq</E>.), designates the metric system of measurement as the preferred system of weights and measures for United States trade and commerce, and it requires that each agency use the metric system of measurement in its acquisitions, except to the extent that such use is impracticable or is likely to cause significant inefficiencies or loss of markets to United States firms. Requiring activities are responsible for establishing guidance implementing this policy in formulating their requirements for acquisitions.</P>
            <P>(c) To the extent practicable and consistent with subpart 9.5, potential offerors should be given an opportunity to comment on agency requirements or to recommend application and tailoring of requirements documents and alternative approaches. Requiring agencies should apply specifications, standards, and related documents initially for guidance only, making final decisions on the application and tailoring of these documents as a product of the design and development process. Requiring agencies should not dictate detailed design solutions prematurely (see 7.101 and 7.105(a)(8)).</P>

            <P>(d)(1) The Resource Conservation and Recovery Act of 1976 (42 U.S.C. 6901, <E T="03">et seq.</E>), Executive Order 13101 of September 14, 1998, Greening the Government through Waste Prevention, Recycling, and Federal Acquisition, Executive Order 13123 of June 3, 1999, Greening the Government through Efficient Energy Management, and Executive Order 13221 of July 31, 2001, Energy-Efficient Standby Power Devices, establish requirements for acquiring—</P>
            <P>(i) Products containing recovered materials;</P>
            <P>(ii) Environmentally preferable products and services;</P>
            <P>(iii) Energy-efficient products and services;</P>
            <P>(iv) Products and services that utilize renewable energy technologies; and</P>
            <P>(v) Products containing energy-efficient standby power devices.</P>

            <P>(2) Executive agencies shall consider use of recovered materials, energy- and water-efficient products and services, products containing energy-efficient standby power devices, environmentally preferable purchasing criteria developed by the EPA, and environmental objectives (<E T="03">see</E> Subparts 23.2 and 23.4, and 23.703(b)) when—</P>
            <P>(i) Developing, reviewing, or revising Federal and military specifications, product descriptions (including commercial item descriptions) and standards;</P>
            <P>(ii) Describing Government requirements for supplies and services; and</P>
            <P>(iii) Developing source-selection factors.</P>
            <P>(e) Some or all of the performance levels or performance specifications in a solicitation may be identified as targets rather than as fixed or minimum requirements.</P>
            <P>(f) In accordance with Section 508 of the Rehabilitation Act of 1973 (29 U.S.C. 794d), requiring activities must prepare requirements documents for electronic and information technology that comply with the applicable accessibility standards issued by the Architectural and Transportation Barriers Compliance Board at 36 CFR part 1194 (see subpart 39.2).</P>
            <P>(g) Agencies shall not include in a solicitation a requirement that prohibits an offeror from permitting its employees to telecommute unless the contracting officer executes a written determination in accordance with FAR 7.108(a).</P>
            <CITA>[60 FR 48238, Sept. 18, 1995, as amended at 61 FR 39192, July 26, 1996; 62 FR 263, Jan. 2, 1997; 62 FR 44810, Aug. 22, 1997; 62 FR 51230, Sept. 30, 1997; 65 FR 36017, June 6, 2000; 66 FR 20897, Apr. 25, 2001; 66 FR 65352, Dec. 18, 2001; 68 FR 43858, July 24, 2003; 69 FR 59702, Oct. 5, 2004]</CITA>
          </SECTION>
          <SUBPART>
            <PRTPAGE P="183"/>
            <HD SOURCE="HED">Subpart 11.1—Selecting and Developing Requirements Documents</HD>
            <SECTION>
              <SECTNO>11.101</SECTNO>
              <SUBJECT>Order of precedence for requirements documents.</SUBJECT>
              <P>(a) Agencies may select from existing requirements documents, modify or combine existing requirements documents, or create new requirements documents to meet agency needs, consistent with the following order of precedence:</P>
              <P>(1) Documents mandated for use by law.</P>
              <P>(2) Performance-oriented documents (<E T="03">e.g.</E>, a PWS or SOO). (See 2.101.)</P>
              <P>(3) Detailed design-oriented documents.</P>
              <P>(4) Standards, specifications and related publications issued by the Government outside the Defense or Federal series for the non-repetitive acquisition of items.</P>
              <P>(b) Agencies shall prepare requirements documents to achieve maximum practicable—</P>
              <P>(1) Energy efficiency, including using products containing energy-efficient standby power devices and renewable energy technologies; and</P>
              <P>(2) Use of recovered material, other materials that are environmentally preferable, energy- and water-efficient products, and renewable energy technologies (see subparts 23.2, 23.4, and 23.7).</P>

              <P>(c) In accordance with OMB Circular A-119, “Federal Participation in the Development and Use of Voluntary Consensus Standards and in Conformity Assessment Activities,“ agencies must use voluntary consensus standards, when they exist, in lieu of Government-unique standards, except where inconsistent with law or otherwise impractical. The private sector manages and administers voluntary consensus standards. Such standards are not mandated by law (<E T="03">e.g.,</E> industry standards such as ISO 9000).</P>
              <CITA>[60 FR 48238, Sept. 18, 1995, as amended at 62 FR 44810, Aug. 22, 1997; 64 FR 51834, Sept. 24, 1999; 66 FR 65352, Dec. 18, 2001; 68 FR 43858, July 24, 2003; 71 FR 218, Jan. 3, 2006]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>11.102</SECTNO>
              <SUBJECT>Standardization program.</SUBJECT>
              <P>Agencies shall select existing requirements documents or develop new requirements documents that meet the needs of the agency in accordance with the guidance contained in the Federal Standardization Manual, FSPM-0001; for DoD components, DoD 4120.24-M, Defense Standardization Program Policies and Procedures; and for IT standards and guidance, the Federal Information Processing Standards Publications (FIPS PUBS). The Federal Standardization Manual may be obtained from the General Services Administration (see address in 11.201(d)(1)). DoD 4120.24-M may be obtained from DoD (see 11.201(d)(2) or 11.201(d)(3)). FIPS PUBS may be obtained from the Government Printing Office (GPO), or the Department of Commerce's National Technical Information Service (NTIS) (see address in 11.201(d)(4)).</P>
              <CITA>[70 FR 57452, Sept. 30, 2005, as amended at 71 FR 228, Jan. 3, 2006]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>11.103</SECTNO>
              <SUBJECT>Market acceptance.</SUBJECT>
              <P>(a) Section 8002(c) of Pub. L. 103-355 provides that, in accordance with agency procedures, the head of an agency may, under appropriate circumstances, require offerors to demonstrate that the items offered—</P>
              <P>(1) Have either—</P>
              <P>(i) Achieved commercial market acceptance; or</P>
              <P>(ii) Been satisfactorily supplied to an agency under current or recent contracts for the same or similar requirements; and</P>
              <P>(2) Otherwise meet the item description, specifications, or other criteria prescribed in the public notice and solicitation.</P>
              <P>(b) Appropriate circumstances may, for example, include situations where the agency's minimum need is for an item that has a demonstrated reliability, performance or product support record in a specified environment. Use of market acceptance is inappropriate when new or evolving items may meet the agency's needs.</P>
              <P>(c) In developing criteria for demonstrating that an item has achieved commercial market acceptance, the contracting officer shall ensure the criteria in the solicitation—</P>

              <P>(1) Reflect the minimum need of the agency and are reasonably related to <PRTPAGE P="184"/>the demonstration of an item's acceptability to meet the agency's minimum need;</P>
              <P>(2) Relate to an item's performance and intended use, not an offeror's capability;</P>
              <P>(3) Are supported by market research;</P>
              <P>(4) Include consideration of items supplied satisfactorily under recent or current Government contracts, for the same or similar items; and</P>
              <P>(5) Consider the entire relevant commercial market, including small business concerns.</P>
              <P>(d) Commercial market acceptance shall not be used as a sole criterion to evaluate whether an item meets the Government's requirements.</P>
              <P>(e) When commercial market acceptance is used, the contracting officer shall document the file to—</P>
              <P>(1) Describe the circumstances justifying the use of commercial market acceptance criteria; and</P>
              <P>(2) Support the specific criteria being used.</P>
            </SECTION>
            <SECTION>
              <SECTNO>11.104</SECTNO>
              <SUBJECT>Use of brand name or equal purchase descriptions.</SUBJECT>
              <P>(a) While the use of performance specifications is preferred to encourage offerors to propose innovative solutions, the use of brand name or equal purchase descriptions may be advantageous under certain circumstances.</P>
              <P>(b) Brand name or equal purchase descriptions must include, in addition to the brand name, a general description of those salient physical, functional, or performance characteristics of the brand name item that an “equal” item must meet to be acceptable for award. Use brand name or equal descriptions when the salient characteristics are firm requirements.</P>
              <CITA>[64 FR 32742, June 17, 1999]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>11.105</SECTNO>
              <SUBJECT>Items peculiar to one manufacturer.</SUBJECT>
              <P>Agency requirements shall not be written so as to require a particular brand name, product, or a feature of a product, peculiar to one manufacturer, thereby precluding consideration of a product manufactured by another company, unless—</P>
              <P>(a)(1) The particular brand name, product, or feature is essential to the Government's requirements, and market research indicates other companies' similar products, or products lacking the particular feature, do not meet, or cannot be modified to meet, the agency's minimum needs;</P>
              <P>(2)(i) The authority to contract without providing for full and open competition is supported by the required justifications and approvals (see 6.302-1); or</P>
              <P>(ii) The basis for not providing for maximum practicable competition is documented in the file (see 13.106-1(b)) or justified (see 13.501) when the acquisition is awarded using simplified acquisition procedures.</P>
              <P>(3) The documentation or justification is posted for acquisitions over $25,000. (See 5.102(a)(6).)</P>
              <P>(b) For multiple award schedule orders, see 8.405-6.</P>
              <CITA>[60 FR 48238, Sept. 18, 1995, as amended at 61 FR 39192, July 26, 1996; 62 FR 263, Jan. 2, 1997; 62 FR 10710, Mar. 10, 1997. Redesignated and amended at 64 FR 32742, June 17, 1999; 71 FR 57360, Sept. 28, 2006]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>11.106</SECTNO>
              <SUBJECT>Purchase descriptions for service contracts.</SUBJECT>
              <P>In drafting purchase descriptions for service contracts, agency requiring activities shall ensure that inherently governmental functions (see subpart 7.5) are not assigned to a contractor. These purchase descriptions shall</P>
              <P>(a) Reserve final determination for Government officials;</P>
              <P>(b) Require proper identification of contractor personnel who attend meetings, answer Government telephones, or work in situations where their actions could be construed as acts of Government officials unless, in the judgment of the agency, no harm can come from failing to identify themselves; and</P>
              <P>(c) Require suitable marking of all documents or reports produced by contractors.</P>
              <CITA>[61 FR 2629, Jan. 26, 1996. Redesignated at 64 FR 32742, June 17, 1999]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>11.107</SECTNO>
              <SUBJECT>Solicitation provision.</SUBJECT>

              <P>(a) Insert the provision at 52.211-6, Brand Name or Equal, when brand name or equal purchase descriptions are included in a solicitation.<PRTPAGE P="185"/>
              </P>
              <P>(b) Insert the provision at 52.211-7, Alternatives to Government-Unique Standards, in solicitations that use Government-unique standards when the agency uses the transaction-based reporting method to report its use of voluntary consensus standards to the National Institute of Standards and Technology (see OMB Circular A-119, “Federal Participation in the Development and Use of Voluntary Consensus Standards and in Conformity Assessment Activities”). Use of the provision is optional for agencies that report their use of voluntary consensus standards to the National Institute of Standards and Technology using the categorical reporting method. Agencies that manage their specifications on a contract-by-contract basis use the transaction-based method of reporting. Agencies that manage their specifications centrally use the categorical method of reporting. Agency regulations regarding specification management describe which method is used.</P>
              <CITA>[64 FR 51835, Sept. 24, 1999]</CITA>
            </SECTION>
          </SUBPART>
          <SUBPART>
            <HD SOURCE="HED">Subpart 11.2—Using and Maintaining Requirements Documents</HD>
            <SECTION>
              <SECTNO>11.201</SECTNO>
              <SUBJECT>Identification and availability of specifications.</SUBJECT>
              <P>(a) Solicitations citing requirements documents listed in the General Services Administration (GSA) Index of Federal Specifications, Standards and Commercial Item Descriptions, the DoD Acquisition Streamlining and Standardization Information System (ASSIST), or other agency index shall identify each document's approval date and the dates of any applicable amendments and revisions. Do not use general identification references, such as “the issue in effect on the date of the solicitation.” Contracting offices will not normally furnish these cited documents with the solicitation, except when—</P>
              <P>(1) The requirements document must be furnished with the solicitation to enable prospective contractors to make a competent evaluation of the solicitation;</P>
              <P>(2) In the judgment of the contracting officer, it would be impracticable for prospective contractors to obtain the documents in reasonable time to respond to the solicitation; or</P>
              <P>(3) A prospective contractor requests a copy of a Government promulgated requirements document.</P>
              <P>(b) Contracting offices shall clearly identify in the solicitation any pertinent documents not listed in the GSA Index of Federal Specifications, Standards and Commercial Item Descriptions or ASSIST. Such documents shall be furnished with the solicitation or specific instructions shall be furnished for obtaining or examining such documents.</P>
              <P>(c) When documents refer to other documents, such references shall</P>
              <P>(1) Be restricted to documents, or appropriate portions of documents, that apply in the acquisition;</P>
              <P>(2) Cite the extent of their applicability;</P>
              <P>(3) Not conflict with other documents and provisions of the solicitation; and</P>
              <P>(4) Identify all applicable first tier references.</P>
              <P>(d)(1) The GSA Index of Federal Specifications, Standards and Commercial Item Descriptions, FPMR Part 101-29, may be purchased from the—General Services Administration, Federal Supply Service, Specifications Section, Suite 8100, 470 East L'Enfant Plaza, SW, Washington, DC 20407, Telephone (202) 619-8925.</P>
              <P>(2) Most unclassified Defense specifications and standards may be downloaded from the following ASSIST websites:</P>
              <P>(i) ASSIST (<E T="03">http://assist.daps.dla.mil</E>).</P>
              <P>(ii) Quick Search (<E T="03">http://assist.daps.dla.mil/quicksearch</E>).</P>
              <P>(iii) ASSISTdocs.com (<E T="03">http://assistdocs.com</E>).</P>
              <P>(3) Documents not available from ASSIST may be ordered from the Department of Defense Single Stock Point (DoDSSP) by—</P>
              <P>(i) Using the ASSIST Shopping Wizard (<E T="03">http://assist.daps.dla.mil/wizard</E>);</P>
              <P>(ii) Phoning the DoDSSP Customer Service Desk, (215) 697-2179, Mon-Fri, 0730 to 1600 EST; or</P>

              <P>(iii) Ordering from DoDSSP, Building 4, Section D, 700 Robbins Avenue, Philadelphia, PA 19111-5094, Telephone (215) 697-2667/2179, Facsimile (215) 697-1462.<PRTPAGE P="186"/>
              </P>
              <P>(4) The FIPS PUBS may be obtained from <E T="03">http://www.itl.nist.gov/fipspubs</E>/, or purchased from the Superintendent of Documents, U.S. Government Printing Office, Washington, DC 20402, Telephone (202) 512-1800, Facsimile (202) 512-2250; or National Technical Information Service (NTIS), 5285 Port Royal Road, Springfield, VA 22161, Telephone (703) 605-6000, Facsimile (703) 605-6900, Email: <E T="03">orders@ntis.gov</E>.</P>
              <P>(e) Agencies may purchase some nongovernment standards, including voluntary consensus standards, from the National Technical Information Service's Fedworld Information Network. Agencies may also obtain nongovernment standards from the standards developing organization responsible for the preparation, publication, or maintenance of the standard, or from an authorized document reseller. The National Institute of Standards and Technology can assist agencies in identifying sources for, and content of, nongovernment standards. DoD activities may obtain from the DoDSSP those nongovernment standards, including voluntary consensus standards, adopted for use by defense activities.</P>
              <CITA>[60 FR 48238, Sept. 18, 1995, as amended at 62 FR 40236, July 25, 1997; 63 FR 34063, June 22, 1998; 64 FR 51835, Sept. 24, 1999; 64 FR 72446, Dec. 27, 1999; 69 FR 76358, Dec. 20, 2004; 70 FR 57452, Sept. 30, 2005; 71 FR 228, Jan. 3, 2006]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>11.202</SECTNO>
              <SUBJECT>Maintenance of standardization documents.</SUBJECT>
              <P>(a) Recommendations for changes to standardization documents listed in the GSA Index of Federal Specifications, Standards and Commercial Item Descriptions should be submitted to the General Services Administration, Federal Supply Service, Office of Acquisition, Washington, DC 20406. Agencies shall submit recommendations for changes to standardization documents listed in the DoDISS to the cognizant preparing activity.</P>
              <P>(b) When an agency cites an existing standardization document but modifies it to meet its needs, the agency shall follow the guidance in Federal Standardization Manual and, for Defense components, DoD 4120.24-M, Defense Standardization Program Policies and Procedures.</P>
              <CITA>[60 FR 48238, Sept. 18, 1995, as amended at 69 FR 34244, June 18, 2004]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>11.203</SECTNO>
              <SUBJECT>Customer satisfaction.</SUBJECT>
              <P>Acquisition organizations shall communicate with customers to determine how well the requirements document reflects the customer's needs and to obtain suggestions for corrective actions. Whenever practicable, the agency may provide affected industry an opportunity to comment on the requirements documents.</P>
            </SECTION>
            <SECTION>
              <SECTNO>11.204</SECTNO>
              <SUBJECT>Solicitation provisions and contract clauses.</SUBJECT>
              <P>(a) The contracting officer shall insert the provision at 52.211-1, Availability of Specifications Listed in the GSA Index of Federal Specifications, Standards and Commercial Item Descriptions, FPMR Part 101-29, in solicitations that cite specifications listed in the Index that are not furnished with the solicitation.</P>
              <P>(b) The contracting officer shall insert the provision at 52.211-2, Availability of Specifications, Standards, and Data Item Descriptions Listed in the Acquisition Streamlining and Standardization Information System (ASSIST), in solicitations that cite specifications listed in the ASSIST that are not furnished with the solicitation.</P>
              <P>(c) The contracting officer shall insert a provision substantially the same as the provision at 52.211-3, Availability of Specifications Not Listed in the GSA Index of Federal Specifications, Standards and Commercial Item Descriptions, in solicitations that cite specifications that are not listed in the Index and are not furnished with the solicitation, but may be obtained from a designated source.</P>

              <P>(d) The contracting officer shall insert a provision substantially the same as the provision at 52.211-4, Availability for Examination of Specifications Not Listed in the GSA Index of Federal Specifications, Standards and Commercial Item Descriptions, in solicitations that cite specifications that are not listed in the Index and are <PRTPAGE P="187"/>available for examination at a specified location.</P>
              <CITA>[60 FR 48238, Sept. 18, 1995, as amended at 63 FR 34063, June 22, 1998; 71 FR 228, 2006]</CITA>
            </SECTION>
          </SUBPART>
          <SUBPART>
            <HD SOURCE="HED">Subpart 11.3—Acceptable Material</HD>
            <SOURCE>
              <HD SOURCE="HED">Source:</HD>
              <P>65 FR 36018, June 6, 2000, unless otherwise noted.</P>
            </SOURCE>
            <SECTION>
              <SECTNO>11.301</SECTNO>
              <SUBJECT>Definitions.</SUBJECT>
              <P>As used in this subpart—</P>
              <P>
                <E T="03">Postconsumer material</E> means a material or finished product that has served its intended use and has been discarded for disposal or recovery, having completed its life as a consumer item. Postconsumer material is a part of the broader category of “recovered material.” For paper and paper products, postconsumer material means “postconsumer fiber” defined by the U.S. Environmental Protection Agency (EPA) as—</P>
              <P>(1) Paper, paperboard, and fibrous materials from retail stores, office buildings, homes, and so forth, after they have passed through their end-usage as a consumer item, including: used corrugated boxes; old newspapers; old magazines; mixed waste paper; tabulating cards; and used cordage; or</P>
              <P>(2) All paper, paperboard, and fibrous materials that enter and are collected from municipal solid waste; but not</P>
              <P>(3) Fiber derived from printers' over-runs, converters' scrap, and over-issue publications.</P>
              <P>
                <E T="03">Recovered material</E> for paper and paper products, is defined by EPA in its Comprehensive Procurement Guideline as “recovered fiber” and means the following materials:</P>
              <P>(1) Postconsumer fiber.</P>
              <P>(2) Manufacturing wastes such as—</P>
              <P>(i) Dry paper and paperboard waste generated after completion of the papermaking process (that is, those manufacturing operations up to and including the cutting and trimming of the paper machine reel into smaller rolls or rough sheets) including: envelope cuttings, bindery trimmings, and other paper and paperboard waste resulting from printing, cutting, forming, and other converting operations; bag, box, and carton manufacturing wastes; and butt rolls, mill wrappers, and rejected unused stock; and</P>
              <P>(ii) Repulped finished paper and paperboard from obsolete inventories of paper and paperboard manufacturers, merchants, wholesalers, dealers, printers, converters, or others.</P>
            </SECTION>
            <SECTION>
              <SECTNO>11.302</SECTNO>
              <SUBJECT>Policy.</SUBJECT>
              <P>(a) Agencies must not require virgin material or supplies composed of or manufactured using virgin material unless compelled by law or regulation or unless virgin material is vital for safety or meeting performance requirements of the contract.</P>
              <P>(b)(1) When acquiring other than commercial items, agencies must require offerors to identify used, reconditioned, or remanufactured supplies; or unused former Government surplus property proposed for use under the contract. These supplies or property may not be used in contract performance unless authorized by the contracting officer.</P>
              <P>(2) When acquiring commercial items, the contracting officer must consider the customary practices in the industry for the item being acquired. The contracting officer may require offerors to provide information on used, reconditioned, or remanufactured supplies, or unused former Government surplus property proposed for use under the contract. The request for the information must be included in the solicitation, and to the maximum extent practicable must be limited to information or standards consistent with normal commercial practices.</P>
              <P>(c) When the contracting officer needs additional information to determine whether supplies meet minimum recovered material standards stated in the solicitation, the contracting officer may require offerors to submit additional information on the recycled content or related standards. The request for the information must be included in the solicitation. When acquiring commercial items, limit the information to the maximum extent practicable to that available under normal commercial practices.</P>
            </SECTION>
            <SECTION>
              <PRTPAGE P="188"/>
              <SECTNO>11.303</SECTNO>
              <SUBJECT>Special requirements for printing and writing paper.</SUBJECT>
              <P>(a) Section 505 of Executive Order 13101, Greening the Government through Waste Prevention, Recycling, and Federal Acquisition, establishes minimum recovered material content standards for agency purchases of printing and writing paper. Section 505 requires that 100 percent of an agency's purchases of printing and writing paper must meet or exceed one of the minimum content standards specified in paragraph (b) of this section.</P>
              <P>(b) For high-speed copier paper, offset paper, forms bond, computer printout paper, carbonless paper, file folders, white wove envelopes, writing and office paper, book paper, cotton fiber paper, and cover stock, the minimum content standard must be no less than 30 percent postconsumer materials. If paper containing 30 percent postconsumer material is not reasonably available, does not meet reasonable performance requirements, or is only available at an unreasonable price, then the agency must purchase paper containing no less than 20 percent postconsumer material.</P>
            </SECTION>
            <SECTION>
              <SECTNO>11.304</SECTNO>
              <SUBJECT>Contract clause.</SUBJECT>
              <P>Insert the clause at 52.211-5, Material Requirements, in solicitations and contracts for supplies that are not commercial items.</P>
            </SECTION>
          </SUBPART>
          <SUBPART>
            <HD SOURCE="HED">Subpart 11.4—Delivery or Performance Schedules</HD>
            <SOURCE>
              <HD SOURCE="HED">Source:</HD>
              <P>48 FR 42159, Sept. 19, 1983, unless otherwise noted. Redesignated at 60 FR 48241, Sept. 18, 1995.</P>
            </SOURCE>
            <SECTION>
              <SECTNO>11.401</SECTNO>
              <SUBJECT>General.</SUBJECT>
              <P>(a) The time of delivery or performance is an essential contract element and shall be clearly stated in solicitations. Contracting officers shall ensure that delivery or performance schedules are realistic and meet the requirements of the acquisition. Schedules that are unnecessarily short or difficult to attain—</P>
              <P>(1) Tend to restrict competition,</P>
              <P>(2) Are inconsistent with small business policies, and</P>
              <P>(3) May result in higher contract prices.</P>
              <P>(b) Solicitations shall, except when clearly unnecessary, inform bidders or offerors of the basis on which their bids or proposals will be evaluated with respect to time of delivery or performance.</P>
              <P>(c) If timely delivery or performance is unusually important to the Government, liquidated damages clauses may be used (see subpart 11.5).</P>
              <CITA>[48 FR 42159, Sept. 19, 1983. Redesignated and amended at 60 FR 48241, Sept. 18, 1995]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>11.402</SECTNO>
              <SUBJECT>Factors to consider in establishing schedules.</SUBJECT>
              <P>(a) <E T="03">Supplies or services.</E> When establishing a contract delivery or performance schedule, consideration shall be given to applicable factors such as the—</P>
              <P>(1) Urgency of need;</P>
              <P>(2) Industry practices;</P>
              <P>(3) Market conditions;</P>
              <P>(4) Transportation time;</P>
              <P>(5) Production time;</P>
              <P>(6) Capabilities of small business concerns;</P>
              <P>(7) Administrative time for obtaining and evaluating offers and for awarding contracts;</P>
              <P>(8) Time for contractors to comply with any conditions precedent to contract performance; and</P>
              <P>(9) Time for the Government to perform its obligations under the contract; e.g., furnishing Government property.</P>
              <P>(b) <E T="03">Construction.</E> When scheduling the time for completion of a construction contract, the contracting officer shall consider applicable factors such as the—</P>
              <P>(1) Nature and complexity of the project;</P>
              <P>(2) Construction seasons involved;</P>
              <P>(3) Required completion date;</P>
              <P>(4) Availability of materials and equipment;</P>
              <P>(5) Capacity of the contractor to perform; and</P>

              <P>(6) Use of multiple completion dates. (In any given contract, separate completion dates may be established for separable items of work. When multiple completion dates are used, requests for extension of time must be evaluated with respect to each item, <PRTPAGE P="189"/>and the affected completion dates modified when appropriate.)</P>
              <CITA>[48 FR 42159, Sept. 19, 1983. Redesignated and amended at 60 FR 48241, Sept. 18, 1995]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>11.403</SECTNO>
              <SUBJECT>Supplies or services.</SUBJECT>
              <P>(a) The contracting officer may express contract delivery or performance schedules in terms of—</P>
              <P>(1) Specific calendar dates;</P>
              <P>(2) Specific periods from the date of the contract; i.e., from the date of award or acceptance by the Government, or from the date shown as the effective date of the contract;</P>
              <P>(3) Specific periods from the date of receipt by the contractor of the notice of award or acceptance by the Government (including notice by receipt of contract document executed by the Government); or</P>
              <P>(4) Specific time for delivery after receipt by the contractor of each individual order issued under the contract, as in indefinite delivery type contracts and GSA schedules.</P>
              <P>(b) The time specified for contract performance should not be curtailed to the prejudice of the contractor because of delay by the Government in giving notice of award.</P>
              <P>(c) If the delivery schedule is based on the date of the contract, the contracting officer shall mail or otherwise furnish to the contractor the contract, notice of award, acceptance of proposal, or other contract document not later than the date of the contract.</P>
              <P>(d) If the delivery schedule is based on the date the contractor receives the notice of award, or if the delivery schedule is expressed in terms of specific calendar dates on the assumption that the notice of award will be received by a specified date, the contracting officer shall send the contract, notice of award, acceptance of proposal, or other contract document by certified mail, return receipt requested, or by any other method that will provide evidence of the date of receipt.</P>
              <P>(e) In invitations for bids, if the delivery schedule is based on the date of the contract, and a bid offers delivery based on the date the contractor receives the contract or notice of award, the contracting officer shall evaluate the bid by adding 5 calendar days (as representing the normal time for arrival through ordinary mail). If the contract or notice of award will be transmitted electronically, (1) the solicitation shall so state; and (2) the contracting officer shall evaluate delivery schedule based on the date of contract receipt or notice of award, by adding one working day. (The term “working day” excludes weekends and U.S. Federal holidays.) If the offered delivery date computed with mailing or transmittal time is later than the delivery date required by the invitation for bids, the bid shall be considered nonresponsive and rejected. If award is made, the delivery date will be the number of days offered in the bid after the contractor actually receives the notice of award.</P>
            </SECTION>
            <SECTION>
              <SECTNO>11.404</SECTNO>
              <SUBJECT>Contract clauses.</SUBJECT>
              <P>(a) <E T="03">Supplies or services.</E> (1) The contracting officer may use a time of delivery clause to set forth a required delivery schedule and to allow an offeror to propose an alternative delivery schedule. The clauses and their alternates may be used in solicitations and contracts for other than construction and architect-engineering substantially as shown, or they may be changed or new clauses written.</P>

              <P>(2) The contracting officer may insert in solicitations and contracts other than those for construction and architect-engineering, a clause substantially the same as the clause at 52.211-8, Time of Delivery, if the Government requires delivery by a particular time and the delivery schedule is to be based on the date of the contract. If the delivery schedule is expressed in terms of specific calendar dates or specific periods and is based on an assumed date of award, the contracting officer may use the clause with its Alternate I. If the delivery schedule is expressed in terms of specific calendar dates or specific periods and is based on an assumed date the contractor will receive notice of award, the contracting officer may use the clause with its Alternate II. If the delivery schedule is to be based on the actual date the contractor receives a written notice of award, the contracting officer may use the clause with its Alternate III.<PRTPAGE P="190"/>
              </P>
              <P>(3) The contracting officer may insert in solicitations and contracts other than those for construction and architect-engineering, a clause substantially the same as the clause at 52.211-9, Desired and Required Time of Delivery, if the Government desires delivery by a certain time but requires delivery by a specified later time, and the delivery schedule is to be based on the date of the contract. If the delivery schedule is expressed in terms of specific calendar dates or specific periods and is based on an assumed date of award, the contracting officer may use the clause with its Alternate I. If the delivery schedule is expressed in terms of specific calendar dates or specific periods and is based on an assumed date the contractor will receive notice of award, the contracting officer may use the clause with its Alternate II. If the delivery schedule is to be based on the actual date the contractor receives a written notice of award, the contracting officer may use the clause with its Alternate III.</P>
              <P>(b) <E T="03">Construction.</E> The contracting officer shall insert the clause at 52.211-10, Commencement, Prosecution, and Completion of Work, in solicitations and contracts when a fixed-price construction contract is contemplated. The clause may be changed to accommodate the issuance of orders under indefinite-delivery contracts. If the completion date is expressed as a specific calendar date, computed on the basis of the contractor receiving the notice to proceed by a certain day, the contracting officer may use the clause with its Alternate I.</P>
              <CITA>[48 FR 42159, Sept. 19, 1983, as amended at 56 FR 41732, Aug. 22, 1991. Redesignated and amended at 60 FR 48241, Sept. 18, 1995]</CITA>
            </SECTION>
          </SUBPART>
          <SUBPART>
            <HD SOURCE="HED">Subpart 11.5—Liquidated Damages</HD>
            <SOURCE>
              <HD SOURCE="HED">Source:</HD>
              <P>65 FR 46064, July 26, 2000, unless otherwise noted.</P>
            </SOURCE>
            <SECTION>
              <SECTNO>11.500</SECTNO>
              <SUBJECT>Scope.</SUBJECT>
              <P>This subpart prescribes policies and procedures for using liquidated damages clauses in solicitations and contracts for supplies, services, research and development, and construction. This subpart does not apply to liquidated damages for subcontracting plans (see 19.705-7) or liquidated damages related to the Contract Work Hours and Safety Standards Act (see subpart 22.3).</P>
            </SECTION>
            <SECTION>
              <SECTNO>11.501</SECTNO>
              <SUBJECT>Policy.</SUBJECT>
              <P>(a) The contracting officer must consider the potential impact on pricing, competition, and contract administration before using a liquidated damages clause. Use liquidated damages clauses only when—</P>
              <P>(1) The time of delivery or timely performance is so important that the Government may reasonably expect to suffer damage if the delivery or performance is delinquent; and</P>
              <P>(2) The extent or amount of such damage would be difficult or impossible to estimate accurately or prove.</P>
              <P>(b) Liquidated damages are not punitive and are not negative performance incentives (see 16.402-2). Liquidated damages are used to compensate the Government for probable damages. Therefore, the liquidated damages rate must be a reasonable forecast of just compensation for the harm that is caused by late delivery or untimely performance of the particular contract. Use a maximum amount or a maximum period for assessing liquidated damages if these limits reflect the maximum probable damage to the Government. Also, the contracting officer may use more than one liquidated damages rate when the contracting officer expects the probable damage to the Government to change over the contract period of performance.</P>
              <P>(c) The contracting officer must take all reasonable steps to mitigate liquidated damages. If the contract contains a liquidated damages clause and the contracting officer is considering terminating the contract for default, the contracting officer should seek expeditiously to obtain performance by the contractor or terminate the contract and repurchase (see subpart 49.4). Prompt contracting officer action will prevent excessive loss to defaulting contractors and protect the interests of the Government.</P>

              <P>(d) The head of the agency may reduce or waive the amount of liquidated damages assessed under a contract, if <PRTPAGE P="191"/>the Commissioner, Financial Management Service, or designee approves (see Treasury Order 145-10).</P>
            </SECTION>
            <SECTION>
              <SECTNO>11.502</SECTNO>
              <SUBJECT>Procedures.</SUBJECT>
              <P>(a) Include the applicable liquidated damages clause and liquidated damages rates in solicitations when the contract will contain liquidated damages provisions.</P>
              <P>(b) Construction contracts with liquidated damages provisions must describe the rate(s) of liquidated damages assessed per day of delay. The rate(s) should include the estimated daily cost of Government inspection and superintendence. The rate(s) should also include an amount for other expected expenses associated with delayed completion such as—</P>
              <P>(1) Renting substitute property; or</P>
              <P>(2) Paying additional allowance for living quarters.</P>
            </SECTION>
            <SECTION>
              <SECTNO>11.503</SECTNO>
              <SUBJECT>Contract clauses.</SUBJECT>
              <P>(a) Use the clause at 52.211-11, Liquidated Damages—Supplies, Services, or Research and Development, in fixed-price solicitations and contracts for supplies, services, or research and development when the contracting officer determines that liquidated damages are appropriate (see 11.501(a)).</P>
              <P>(b) Use the clause at 52.211-12, Liquidated Damages—Construction, in solicitations and contracts for construction, other than cost-plus-fixed-fee, when the contracting officer determines that liquidated damages are appropriate (see 11.501(a)). If the contract specifies more than one completion date for separate parts or stages of the work, revise paragraph (a) of the clause to state the amount of liquidated damages for delay of each separate part or stage of the work.</P>
              <P>(c) Use the clause at 52.211-13, Time Extensions, in solicitations and contracts for construction that use the clause at 52.211-12, Liquidated Damages—Construction, when that clause has been revised as provided in paragraph (b) of this section.</P>
            </SECTION>
          </SUBPART>
          <SUBPART>
            <HD SOURCE="HED">Subpart 11.6—Priorities and Allocations</HD>
            <SOURCE>
              <HD SOURCE="HED">Source:</HD>
              <P>51 FR 19714, May 30, 1986, unless otherwise noted. Redesignated at 60 FR 48241, Sept. 18, 1995.</P>
            </SOURCE>
            <SECTION>
              <SECTNO>11.600</SECTNO>
              <SUBJECT>Scope of subpart.</SUBJECT>
              <P>This subpart implements the Defense Priorities and Allocations System (DPAS), a Department of Commerce (DOC) regulation in support of authorized national defense programs (see 15 CFR part 700).</P>
              <CITA>[51 FR 19714, May 30, 1986, as amended at 56 FR 41744, Aug. 22, 1991]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>11.601</SECTNO>
              <SUBJECT>Definitions.</SUBJECT>
              <P>As used in this subpart—</P>
              <P>
                <E T="03">Authorized program,</E> means a program approved by the Federal Emergency Management Agency (FEMA) for priorities and allocations support under the Defense Production Act of 1950, as amended (50 U.S.C. app. 2061, <E T="03">et seq.</E>), to promote the national defense. Schedule I of the DPAS lists currently authorized programs.</P>
              <P>
                <E T="03">Controlled materials,</E> means the various shapes and forms of steel, copper, aluminum, and nickel alloys specified in Schedule II, and defined in Schedule III, of the DPAS.</P>
              <P>
                <E T="03">Delegate Agency,</E> means an agency of the U.S. Government authorized by delegation from DOC to place priority ratings on contracts that support authorized programs. Schedule I of the DPAS lists the Delegate Agencies.</P>
              <P>
                <E T="03">Rated order</E> means a prime contract for any product, service, or material (including controlled materials) placed by a Delegate Agency under the provisions of the DPAS in support of an authorized program and which requires preferential treatment, and includes subcontracts and purchase orders resulting under such contracts.</P>
              <CITA>[51 FR 19714, May 30, 1986. Redesignated at 60 FR 48241, Sept. 18, 1995; 66 FR 2128, Jan. 10, 2001]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>11.602</SECTNO>
              <SUBJECT>General.</SUBJECT>

              <P>(a) Under Title I of the Defense Production Act of 1950, as amended (50 U.S.C. app. 2061, <E T="03">et seq.</E>), the President <PRTPAGE P="192"/>is authorized (1) to require that contracts in support of the national defense be accepted and performed on a preferential or priority basis over all other contracts, and (2) to allocate materials and facilities in such a manner as to promote the national defense.</P>
              <P>(b) The Office of Industrial Resource Administration (OIRA), DOC, is responsible for administering and enforcing a system of priorities and allocations to carry out Title I of the Defense Production Act for industrial items. The DPAS has been established to promote the timely availability of the necessary industrial resources to meet current national defense requirements and to provide a framework to facilitate rapid industrial mobilization in case of national emergency.</P>
              <P>(c) The Delegate Agencies (see Schedule I of the DPAS) have been given authority by DOC to place rated orders in support of authorized programs. Other government agencies, Canada, and other friendly foreign nations may apply for special rating authority in support of authorized programs (see 15 CFR 700.55).</P>
              <P>(d) Rated orders shall be placed in accordance with the procedures in the DPAS. Contracting officers responsible for acquisitions in support of authorized programs shall be familiar with the DPAS and should provide guidance on the DPAS to contractors and suppliers receiving rated orders. Agency heads shall ensure compliance with the DPAS by contracting activities within their agencies.</P>
              <P>(e) Under the Defense Production Act, any willful violation of the Act, the DPAS, or any official action taken by DOC under the DPAS, is a crime punishable by a maximum fine of $10,000, one year in prison, or both (see 15 CFR 700.70 and 15 CFR 700.74).</P>
              <CITA>[51 FR 19714, May 30, 1986, as amended at 56 FR 41744, Aug. 22, 1991]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>11.603</SECTNO>
              <SUBJECT>Procedures.</SUBJECT>
              <P>(a) There are two levels of priority for rated orders established by the DPAS, identified by the rating symbols “DO” and “DX.” All DO rated orders have equal priority with each other and take preference over unrated orders. All DX rated orders have equal priority with each other and take preference over DO rated and unrated orders. DX ratings are used for special defense programs designated by the President to be of the highest national priority.</P>
              <P>(b) DOC may issue a Directive to compel a contractor or supplier to accept a rated order, to rearrange production or delivery schedules, or to improve shipments against particular rated orders. Directives issued by DOC take precedence over all rated and unrated orders as stated in the Directive.</P>
              <P>(c) In addition to any other contractual requirements, a valid rated order must contain (see 15 CFR 700.12) the following:</P>
              <P>(1) A priority rating consisting of the appropriate DO or DX rating symbol and a program of identification symbol to indicate the authorized program (see Schedule I of the DPAS).</P>
              <P>(2) A required delivery date or delivery dates.</P>
              <P>(3) The signature of an individual authorized by the agency to sign rated orders.</P>
              <P>(d) The DPAS has the following three basic elements which are essential to the operation of the system:</P>
              <P>(1) <E T="03">Mandatory acceptance of rated orders.</E> A rated order shall be accepted by a contractor or supplier unless rejected for the reasons provided for mandatory rejection in 15 CFR 700.13(b), or for optional rejection in 15 CFR 700.13(c).</P>
              <P>(2) <E T="03">Mandatory extension of priority ratings throughout the acquisition chain.</E> Contractors and suppliers receiving rated orders shall extend priority ratings to subcontractors or vendors when acquiring items to fill the rated orders (see 15 CFR 700.15).</P>
              <P>(3) <E T="03">Priority scheduling of production and delivery.</E> Contractors and suppliers receiving rated orders shall give the rated orders priority over other contracts as needed to meet delivery requirements (see 15 CFR 700.14).</P>
              <P>(e) Agencies shall provide contracting activities with specific guidance on the issuance of rated orders in support of agency programs.</P>

              <P>(f) Contracting officers shall follow agency procedural instructions concerning the use of rated orders in support of agency programs.<PRTPAGE P="193"/>
              </P>
              <P>(g) Contracting officers, contractors, or subcontractors at any tier, that experience difficulty placing rated orders, obtaining timely delivery under rated orders, locating a contractor or supplier to fill a rated order, ensuring that rated orders receive preferential treatment by contractors or suppliers, or require rating authority for items not automatically ratable under the DPAS, should promptly seek special priorities assistance in accordance with agency procedures (see 15 CFR 700.50-700.55).</P>
              <P>(h) Contracting officers shall report promptly any violations of the DPAS to DOC in accordance with agency procedures.</P>
              <CITA>[51 FR 19714, May 30, 1986, as amended at 56 FR 41744, Aug. 22, 1991]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>11.604</SECTNO>
              <SUBJECT>Solicitation provisions and contract clauses.</SUBJECT>
              <P>(a) Contracting officers shall insert the provision at 52.211-14, Notice of Priority Rating for National Defense Use, in solicitations when the contract to be awarded will be a rated order.</P>
              <P>(b) Contracting officers shall insert the clause at 52.211-15, Defense Priority and Allocation Requirements, in contracts that are rated orders.</P>
              <CITA>[51 FR 19714, May 30, 1986. Redesignated and amended at 60 FR 48241, Sept. 18, 1995]</CITA>
            </SECTION>
          </SUBPART>
          <SUBPART>
            <HD SOURCE="HED">Subpart 11.7—Variation in Quantity</HD>
            <SOURCE>
              <HD SOURCE="HED">Source:</HD>
              <P>48 FR 42159, Sept. 19, 1983, unless otherwise noted. Redesignated at 60 FR 48241, Sept. 18, 1995.</P>
            </SOURCE>
            <SECTION>
              <SECTNO>11.701</SECTNO>
              <SUBJECT>Supply contracts.</SUBJECT>
              <P>(a) A fixed-price supply contract may authorize Government acceptance of a variation in the quantity of items called for if the variation is caused by conditions of loading, shipping, or packing, or by allowances in manufacturing processes. Any permissible variation shall be stated as a percentage and it may be an increase, a decrease, or a combination of both; however, contracts for subsistence items may use other applicable terms of variation in quantity.</P>
              <P>(b) There should be no standard or usual variation percentage. The overrun or underrun permitted in each contract should be based upon the normal commercial practices of a particular industry for a particular item, and the permitted percentage should be no larger than is necessary to afford a contractor reasonable protection. The permissible variation shall not exceed plus or minus 10 percent unless a different limitation is established in agency regulations. Consideration shall be given to the quantity to which the percentage variation applies. For example, when delivery will be made to multiple destinations and it is desired that the quantity variation apply to the item quantity for each destination, this requirement must be stated in the contract.</P>
              <P>(c) Contractors are responsible for delivery of the specified quantity of items in a fixed-price contract, within allowable variations, if any. If a contractor delivers a quantity of items in excess of the contract requirements plus any allowable variation in quantity, particularly small dollar value overshipments, it results in unnecessary administrative costs to the Government in determining disposition of the excess quantity. Accordingly, the contract may include the clause at 52.211-17, Delivery of Excess Quantities, to provide that—</P>
              <P>(1) Excess quantities of items totaling up to $250 in value may be retained without compensating the contractor; and</P>
              <P>(2) Excess quantities of items totaling over $250 in value may, at the Government's option, be either returned at the contractor's expense or retained and paid for at the contract unit price.</P>
              <CITA>[48 FR 42159, Sept. 19, 1983, as amended at 54 FR 34753, Aug. 21, 1989; 62 FR 40236, July 25, 1997]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>11.702</SECTNO>
              <SUBJECT>Construction contracts.</SUBJECT>

              <P>Construction contracts may authorize a variation in estimated quantities of unit-priced items. When the variation between the estimated quantity and the actual quantity of a unit-priced item is more than plus or minus 15 percent, an equitable adjustment in the contract price shall be made upon the demand of either the Government or the contractor. The contractor may request an extension of time if the <PRTPAGE P="194"/>quantity variation is such as to cause an increase in the time necessary for completion. The contracting officer must receive the request in writing within 10 days from the beginning of the period of delay. However, the contracting officer may extend this time limit before the date of final settlement of the contract. The contracting officer shall ascertain the facts and make any adjustment for extending the completion date that the findings justify.</P>
            </SECTION>
            <SECTION>
              <SECTNO>11.703</SECTNO>
              <SUBJECT>Contract clauses.</SUBJECT>
              <P>(a) The contracting officer shall insert the clause at 52.211-16, Variation in Quantity, in solicitations and contracts, if authorizing a variation in quantity in fixed-price contracts for supplies or for services that involve the furnishing of supplies.</P>
              <P>(b) The contracting officer may insert the clause at 52.211-17, Delivery of Excess Quantities, in solicitations and contracts, when a fixed-price supply contract is contemplated.</P>
              <P>(c) The contracting officer shall insert the clause at 52.211-18, Variation in Estimated Quantity, in solicitations and contracts when a fixed-price construction contract is contemplated that authorizes a variation in the estimated quantity of unit-priced items.</P>
              <CITA>[48 FR 42159, Sept. 19, 1983, as amended at 54 FR 34753, Aug. 21, 1989. Redesignated and amended at 60 FR 48241, Sept. 18, 1995; 64 FR 10538, Mar. 4, 1999]</CITA>
            </SECTION>
          </SUBPART>
          <SUBPART>
            <HD SOURCE="HED">Subpart 11.8—Testing</HD>
            <SOURCE>
              <HD SOURCE="HED">Source:</HD>
              <P>62 FR 51230, Sept. 30, 1997, unless otherwise noted.</P>
            </SOURCE>
            <SECTION>
              <SECTNO>11.801</SECTNO>
              <SUBJECT>Preaward in-use evaluation.</SUBJECT>
              <P>Supplies may be evaluated under comparable in-use conditions without a further test plan, provided offerors are so advised in the solicitation. The results of such tests or demonstrations may be used to rate the proposal, to determine technical acceptability, or otherwise to evaluate the proposal (see 15.305).</P>
            </SECTION>
          </SUBPART>
        </PART>
        <PART>
          <EAR>Pt. 12</EAR>
          <HD SOURCE="HED">PART 12—ACQUISITION OF COMMERCIAL ITEMS</HD>
          <CONTENTS>
            <SECHD>Sec.</SECHD>
            <SECTNO>12.000</SECTNO>
            <SUBJECT>Scope of part.</SUBJECT>
            <SECTNO>12.001</SECTNO>
            <SUBJECT>Definition.</SUBJECT>
            <SUBPART>
              <HD SOURCE="HED">Subpart 12.1—Acquisition of Commercial Items—General</HD>
              <SECTNO>12.101</SECTNO>
              <SUBJECT>Policy.</SUBJECT>
              <SECTNO>12.102</SECTNO>
              <SUBJECT>Applicability.</SUBJECT>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart 12.2—Special Requirements for the Acquisition of Commercial Items</HD>
              <SECTNO>12.201</SECTNO>
              <SUBJECT>General.</SUBJECT>
              <SECTNO>12.202</SECTNO>
              <SUBJECT>Market research and description of agency need.</SUBJECT>
              <SECTNO>12.203</SECTNO>
              <SUBJECT>Procedures for solicitation, evaluation, and award.</SUBJECT>
              <SECTNO>12.204</SECTNO>
              <SUBJECT>Solicitation/contract form.</SUBJECT>
              <SECTNO>12.205</SECTNO>
              <SUBJECT>Offers.</SUBJECT>
              <SECTNO>12.206</SECTNO>
              <SUBJECT>Use of past performance.</SUBJECT>
              <SECTNO>12.207</SECTNO>
              <SUBJECT>Contract type.</SUBJECT>
              <SECTNO>12.208</SECTNO>
              <SUBJECT>Contract quality assurance.</SUBJECT>
              <SECTNO>12.209</SECTNO>
              <SUBJECT>Determination of price reasonableness.</SUBJECT>
              <SECTNO>12.210</SECTNO>
              <SUBJECT>Contract financing.</SUBJECT>
              <SECTNO>12.211</SECTNO>
              <SUBJECT>Technical data.</SUBJECT>
              <SECTNO>12.212</SECTNO>
              <SUBJECT>Computer software.</SUBJECT>
              <SECTNO>12.213</SECTNO>
              <SUBJECT>Other commercial practices.</SUBJECT>
              <SECTNO>12.214</SECTNO>
              <SUBJECT>Cost Accounting Standards.</SUBJECT>
              <SECTNO>12.215</SECTNO>
              <SUBJECT>Notification of overpayment.</SUBJECT>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart 12.3—Solicitation Provisions and Contract Clauses for the Acquisition of Commercial Items</HD>
              <SECTNO>12.300</SECTNO>
              <SUBJECT>Scope of subpart.</SUBJECT>
              <SECTNO>12.301</SECTNO>
              <SUBJECT>Solicitation provisions and contract clauses for the acquisition of commercial items.</SUBJECT>
              <SECTNO>12.302</SECTNO>
              <SUBJECT>Tailoring of provisions and clauses for the acquisition of commercial items.</SUBJECT>
              <SECTNO>12.303</SECTNO>
              <SUBJECT>Contract format.</SUBJECT>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart 12.4—Unique Requirements Regarding Terms and Conditions for Commercial Items</HD>
              <SECTNO>12.401</SECTNO>
              <SUBJECT>General.</SUBJECT>
              <SECTNO>12.402</SECTNO>
              <SUBJECT>Acceptance.</SUBJECT>
              <SECTNO>12.403</SECTNO>
              <SUBJECT>Termination.</SUBJECT>
              <SECTNO>12.404</SECTNO>
              <SUBJECT>Warranties.</SUBJECT>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart 12.5—Applicability of Certain Laws to the Acquisition of Commercial Items</HD>
              <SECTNO>12.500</SECTNO>
              <SUBJECT>Scope of subpart.</SUBJECT>
              <SECTNO>12.501</SECTNO>
              <SUBJECT>Applicability.</SUBJECT>
              <SECTNO>12.502</SECTNO>
              <SUBJECT>Procedures.</SUBJECT>
              <SECTNO>12.503</SECTNO>

              <SUBJECT>Applicability of certain laws to Executive agency contracts for the acquisition of commercial services.<PRTPAGE P="195"/>
              </SUBJECT>
              <SECTNO>12.504</SECTNO>
              <SUBJECT>Applicability of certain laws to subcontracts for the acquisition of commercial items.</SUBJECT>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart 12.6—Streamlined Procedures for Evaluation and Solicitation for Commercial Items</HD>
              <SECTNO>12.601</SECTNO>
              <SUBJECT>General.</SUBJECT>
              <SECTNO>12.602</SECTNO>
              <SUBJECT>Streamlined evaluation of offers.</SUBJECT>
              <SECTNO>12.603</SECTNO>
              <SUBJECT>Streamlined solicitation for commercial items.</SUBJECT>
            </SUBPART>
          </CONTENTS>
          <AUTH>
            <HD SOURCE="HED">Authority:</HD>
            <P>40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 42 U.S.C. 2473(c).</P>
          </AUTH>
          <SOURCE>
            <HD SOURCE="HED">Source:</HD>
            <P>60 FR 48241, Sept. 18, 1995, unless otherwise noted.</P>
          </SOURCE>
          <SECTION>
            <SECTNO>12.000</SECTNO>
            <SUBJECT>Scope of part.</SUBJECT>
            <P>This part prescribes policies and procedures unique to the acquisition of commercial items. It implements the Federal Government's preference for the acquisition of commercial items contained in Title VIII of the Federal Acquisition Streamlining Act of 1994 (Public Law 103-355) by establishing acquisition policies more closely resembling those of the commercial marketplace and encouraging the acquisition of commercial items and components.</P>
          </SECTION>
          <SECTION>
            <SECTNO>12.001</SECTNO>
            <SUBJECT>Definition.</SUBJECT>
            <P>
              <E T="03">Subcontract,</E> as used in this part, includes, but is not limited to, a transfer of commercial items between divisions, subsidiaries, or affiliates of a contractor or subcontractor.</P>
          </SECTION>
          <SUBPART>
            <HD SOURCE="HED">Subpart 12.1—Acquisition of Commercial Items—General</HD>
            <SECTION>
              <SECTNO>12.101</SECTNO>
              <SUBJECT>Policy.</SUBJECT>
              <P>Agencies shall—</P>
              <P>(a) Conduct market research to determine whether commercial items or nondevelopmental items are available that could meet the agency's requirements;</P>
              <P>(b) Acquire commercial items or nondevelopmental items when they are available to meet the needs of the agency; and</P>
              <P>(c) Require prime contractors and subcontractors at all tiers to incorporate, to the maximum extent practicable, commercial items or nondevelopmental items as components of items supplied to the agency.</P>
            </SECTION>
            <SECTION>
              <SECTNO>12.102</SECTNO>
              <SUBJECT>Applicability.</SUBJECT>
              <P>(a) This part shall be used for the acquisition of supplies or services that meet the definition of commercial items at section 2.101.</P>
              <P>(b) Contracting officers shall use the policies in this part in conjunction with the policies and procedures for solicitation, evaluation and award prescribed in part 13, Simplified Acquisition Procedures; part 14, Sealed Bidding; or part 15, Contracting by Negotiation, as appropriate for the particular acquisition.</P>
              <P>(c) Contracts for the acquisition of commercial items are subject to the policies in other parts of this chapter. When a policy in another part of this chapter is inconsistent with a policy in this part, this part 12 shall take precedence for the acquisition of commercial items.</P>
              <P>(d) The definition of commercial item in section 2.101 uses the phrase “purposes other than governmental purposes.” These purposes are those that are not unique to a government.</P>
              <P>(e) This part shall not apply to the acquisition of commercial items—</P>
              <P>(1) At or below the micro-purchase threshold;</P>
              <P>(2) Using the Standard Form 44 (see 13.306);</P>
              <P>(3) Using the imprest fund (see 13.305);</P>
              <P>(4) Using the Governmentwide commercial purchase card; or</P>
              <P>(5) Directly from another Federal agency.</P>
              <P>(f)(1) Contracting officers may treat any acquisition of supplies or services that, as determined by the head of the agency, are to be used to facilitate defense against or recovery from nuclear, biological, chemical, or radiological attack, as an acquisition of commercial items.</P>
              <P>(2) A contract in an amount greater than $16 million that is awarded on a sole source basis for an item or service treated as a commercial item under paragraph (f)(1) of this section but does not meet the definition of a commercial item as defined at FAR 2.101 shall not be exempt from—</P>
              <P>(i) Cost accounting standards (<E T="03">see</E> Subpart 30.2); or</P>
              <P>(ii) Cost or pricing data requirements (<E T="03">see</E> 15.403).<PRTPAGE P="196"/>
              </P>
              <P>(g)(1) In accordance with section 1431 of the National Defense Authorization Act for Fiscal Year 2004 (Pub. L. 108-136) (41 U.S.C. 437), the contracting officer also may use Part 12 for any acquisition for services that does not meet the definition of commercial item in FAR 2.101, if the contract or task order—</P>
              <P>(i) Is entered into on or before November 24, 2013;</P>
              <P>(ii) Has a value of $27 million or less;</P>
              <P>(iii) Meets the definition of performance-based acquisition at FAR 2.101;</P>
              <P>(iv) Uses a quality assurance surveillance plan;</P>
              <P>(v) Includes performance incentives where appropriate;</P>
              <P>(vi) Specifies a firm-fixed price for specific tasks to be performed or outcomes to be achieved; and</P>
              <P>(vii) Is awarded to an entity that provides similar services to the general public under terms and conditions similar to those in the contract or task order.</P>
              <P>(2) In exercising the authority specified in paragraph (g)(1) of this section, the contracting officer may tailor paragraph (a) of the clause at FAR 52.212-4 as may be necessary to ensure the contract's remedies adequately protect the Government's interests.</P>
              <CITA>[60 FR 48241, Sept. 18, 1995, as amended at 61 FR 39192, July 26, 1996; 62 FR 64917, Dec. 9, 1997; 64 FR 32743, June 17, 1999; 66 FR 53484, Oct. 22, 2001; 67 FR 56121, Aug. 30, 2002; 68 FR 4050, Jan. 27, 2003; 69 FR 8313, Feb. 23, 2004; 69 FR 34227, June 18, 2004; 69 FR 38955, June 29, 2004; 70 FR 33659, June 8, 2005; 71 FR 218, Jan. 3, 2006; 71 FR 57366, Sept. 28, 2006]</CITA>
            </SECTION>
          </SUBPART>
          <SUBPART>
            <HD SOURCE="HED">Subpart 12.2—Special Requirements for the Acquisition of Commercial Items</HD>
            <SECTION>
              <SECTNO>12.201</SECTNO>
              <SUBJECT>General.</SUBJECT>
              <P>Public Law 103-355 establishes special requirements for the acquisition of commercial items intended to more closely resemble those customarily used in the commercial marketplace. This subpart identifies those special requirements as well as other considerations necessary for proper planning, solicitation, evaluation and award of contracts for commercial items.</P>
            </SECTION>
            <SECTION>
              <SECTNO>12.202</SECTNO>
              <SUBJECT>Market research and description of agency need.</SUBJECT>
              <P>(a) Market research (see 10.001) is an essential element of building an effective strategy for the acquisition of commercial items and establishes the foundation for the agency description of need (see part 11), the solicitation, and resulting contract.</P>
              <P>(b) The description of agency need must contain sufficient detail for potential offerors of commercial items to know which commercial products or services may be suitable. Generally, for acquisitions in excess of the simplified acquisition threshold, an agency's statement of need for a commercial item will describe the type of product or service to be acquired and explain how the agency intends to use the product or service in terms of function to be performed, performance requirement or essential physical characteristics. Describing the agency's needs in these terms allows offerors to propose methods that will best meet the needs of the Government.</P>
              <P>(c) Follow the procedures in subpart 11.2 regarding the identification and availability of specifications, standards and commercial item descriptions.</P>
              <P>(d) Requirements documents for electronic and information technology must comply with the applicable accessibility standards issued by the Architectural and Transportation Barriers Compliance Board at 36 CFR part 1194 (see subpart 39.2).</P>
              <CITA>[60 FR 48241, Sept. 18, 1995, as amended at 62 FR 264, Jan. 2, 1997; 66 FR 20897, Apr. 25, 2001]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>12.203</SECTNO>
              <SUBJECT>Procedures for solicitation, evaluation, and award.</SUBJECT>

              <P>Contracting officers shall use the policies unique to the acquisition of commercial items prescribed in this part in conjunction with the policies and procedures for solicitation, evaluation and award prescribed in part 13, Simplified Acquisition Procedures; part 14, Sealed Bidding; or part 15, Contracting by Negotiation, as appropriate for the particular acquisition. The contracting officer may use the streamlined procedure for soliciting offers for commercial items prescribed in 12.603. For acquisitions of commercial items exceeding the simplified acquisition <PRTPAGE P="197"/>threshold but not exceeding $5.5 million ($11 million for acquisitions as described in 13.500(e)), including options, contracting activities shall employ the simplified procedures authorized by Subpart 13.5 to the maximum extent practicable.</P>
              <CITA>[60 FR 48241, Sept. 18, 1995, as amended at 62 FR 264, Jan. 2, 1997; 62 FR 64917, Dec. 9, 1997; 69 FR 8313, Feb. 23, 2004; 69 FR 76351, Dec. 20, 2004; 71 FR 57366, Sept. 28, 2006]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>12.204</SECTNO>
              <SUBJECT>Solicitation/contract form.</SUBJECT>
              <P>(a) The contracting officer shall use the Standard Form 1449, Solicitation/Contract/Order for Commercial Items, if (1) the acquisition is expected to exceed the simplified acquisition threshold; (2) a paper solicitation or contract is being issued; and (3) procedures at 12.603 are not being used. Use of the SF 1449 is nonmandatory but encouraged for commercial acquisitions not exceeding the simplified acquisition threshold.</P>
              <P>(b) Consistent with the requirements at 5.203 (a) and (h), the contracting officer may allow fewer than 15 days before issuance of the solicitation.</P>
              <CITA>[62 FR 264, Jan. 2, 1997]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>12.205</SECTNO>
              <SUBJECT>Offers.</SUBJECT>
              <P>(a) Where technical information is necessary for evaluation of offers, agencies should, as part of market research, review existing product literature generally available in the industry to determine its adequacy for purposes of evaluation. If adequate, contracting officers shall request existing product literature from offerors of commercial items in lieu of unique technical proposals.</P>
              <P>(b) Contracting officers should allow offerors to propose more than one product that will meet a Government need in response to solicitations for commercial items. The contracting officer shall evaluate each product as a separate offer.</P>
              <P>(c) Consistent with the requirements at 5.203(b), the contracting officer may allow fewer than 30 days response time for receipt of offers for commercial items, unless the acquisition is covered by the World Trade Organization Government Procurement Agreement or a Free Trade Agreement (see 5.203(h)).</P>
              <CITA>[60 FR 48241, Sept. 18, 1995, as amended at 62 FR 264, Jan. 2, 1997; 64 FR 72418, Dec. 27, 1999; 69 FR 1053, Jan. 7, 2004; 69 FR 77872, Dec. 28, 2004]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>12.206</SECTNO>
              <SUBJECT>Use of past performance.</SUBJECT>
              <P>Past performance should be an important element of every evaluation and contract award for commercial items. Contracting officers should consider past performance data from a wide variety of sources both inside and outside the Federal Government in accordance with the policies and procedures contained in subpart 9.1, section 13.106, or subpart 15.3, as applicable.</P>
              <CITA>[60 FR 48241, Sept. 18, 1995, as amended at 61 FR 39192, July 26, 1996; 62 FR 51270, Sept. 30, 1997; 62 FR 64917, Dec. 9, 1997]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>12.207</SECTNO>
              <SUBJECT> Contract type.</SUBJECT>
              <P>(a) Except as provided in paragraph (b) of this section, agencies shall use firm-fixed-price contracts or fixed-price contracts with economic price adjustment for the acquisition of commercial items.</P>
              <P>(b)(1) A time-and-materials contract or labor-hour contract (see Subpart 16.6) may be used for the acquisition of commercial services when—</P>
              <P>(i) The service is acquired under a contract awarded using—</P>
              <P>(A) Competitive procedures (<E T="03">e.g.</E>, the procedures in 6.102, the set-aside procedures in Subpart 19.5, or competition conducted in accordance with Part 13);</P>
              <P>(B) The procedures for other than full and open competition in 6.3 provided the agency receives offers that satisfy the Government's expressed requirement from two or more responsible offerors; or</P>
              <P>(C) The fair opportunity procedures in 16.505, if placing an order under a multiple award delivery-order contract; and</P>
              <P>(ii) The contracting officer—</P>

              <P>(A) Executes a determination and findings (D&amp;F) for the contract, in accordance with paragraph (b)(2) of this section (but see paragraph (c) of this section for indefinite-delivery contracts), that no other contract type authorized by this subpart is suitable;<PRTPAGE P="198"/>
              </P>
              <P>(B) Includes a ceiling price in the contract or order that the contractor exceeds at its own risk; and</P>
              <P>(C) Authorizes any subsequent change in the ceiling price only upon a determination, documented in the contract file, that it is in the best interest of the procuring agency to change the ceiling price.</P>
              <P>(2) Each D&amp;F required by paragraph (b)(1)(ii)(A) of this section shall contain sufficient facts and rationale to justify that no other contract type authorized by this subpart is suitable. At a minimum, the D&amp;F shall—</P>
              <P>(i) Include a description of the market research conducted (see 10.002(e));</P>
              <P>(ii) Establish that it is not possible at the time of placing the contract or order to accurately estimate the extent or duration of the work or to anticipate costs with any reasonable degree of certainty;</P>

              <P>(iii) Establish that the requirement has been structured to maximize the use of firm-fixed-price or fixed-price with economic price adjustment contracts (<E T="03">e.g.</E>, by limiting the value or length of the time-and-material/labor-hour contract or order; establishing fixed prices for portions of the requirement) on future acquisitions for the same or similar requirements; and</P>
              <P>(iv) Describe actions planned to maximize the use of firm-fixed-price or fixed-price with economic price adjustment contracts on future acquisitions for the same requirements.</P>
              <P>(3) See 16.601(d)(1) for additional approval required for contracts expected to extend beyond three years.</P>
              <P>(c)(1) Indefinite-delivery contracts (see Subpart 16.5) may be used when—</P>
              <P>(i) The prices are established based on a firm-fixed-price or fixed-price with economic price adjustment; or</P>
              <P>(ii) Rates are established for commercial services acquired on a time-and-materials or labor-hour basis.</P>
              <P>(2) When an indefinite-delivery contract is awarded with services priced on a time-and-materials or labor-hour basis, contracting officers shall, to the maximum extent practicable, also structure the contract to allow issuance of orders on a firm-fixed-price or fixed-price with economic price adjustment basis. For such contracts, the contracting officer shall execute the D&amp;F required by paragraph (b)(2) of this section, for each order placed on a time-and-materials or labor-hour basis. Placement of orders shall be in accordance with Subpart 8.4 or 16.5, as applicable.</P>
              <P>(3) If an indefinite-delivery contract only allows for the issuance of orders on a time-and-materials or labor-hour basis, the D&amp;F required by paragraph (b)(2) of this section shall be executed to support the basic contract and shall also explain why providing for an alternative firm-fixed-price or fixed-price with economic price adjustment pricing structure is not practicable. The D&amp;F for this contract shall be approved one level above the contracting officer. Placement of orders shall be in accordance with Subpart 16.5.</P>
              <P>(d) The contract types authorized by this subpart may be used in conjunction with an award fee and performance or delivery incentives when the award fee or incentive is based solely on factors other than cost (see 16.202-1 and 16.203-1).</P>
              <P>(e) Use of any contract type other than those authorized by this subpart to acquire commercial items is prohibited.</P>
              <CITA>[71 FR 74676, Dec. 12, 2006, as amended at 72 FR 6882, Feb. 13, 2007]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>12.208</SECTNO>
              <SUBJECT>Contract quality assurance.</SUBJECT>
              <P>Contracts for commercial items shall rely on contractors' existing quality assurance systems as a substitute for Government inspection and testing before tender for acceptance unless customary market practices for the commercial item being acquired include in-process inspection. Any in-process inspection by the Government shall be conducted in a manner consistent with commercial practice.</P>
            </SECTION>
            <SECTION>
              <SECTNO>12.209</SECTNO>
              <SUBJECT>Determination of price reasonableness.</SUBJECT>

              <P>While the contracting officer must establish price reasonableness in accordance with 13.106-3, 14.408-2, or subpart 15.4, as applicable, the contracting officer should be aware of customary commercial terms and conditions when pricing commercial items. Commercial item prices are affected by factors that include, but are not limited to, speed of <PRTPAGE P="199"/>delivery, length and extent of warranty, limitations of seller's liability, quantities ordered, length of the performance period, and specific performance requirements. The contracting officer must ensure that contract terms, conditions, and prices are commensurate with the Government's need.</P>
              <CITA>[66 FR 53484, Oct. 22, 2001]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>12.210</SECTNO>
              <SUBJECT>Contract financing.</SUBJECT>
              <P>Customary market practice for some commercial items may include buyer contract financing. The contracting officer may offer Government financing in accordance with the policies and procedures in part 32.</P>
            </SECTION>
            <SECTION>
              <SECTNO>12.211</SECTNO>
              <SUBJECT>Technical data.</SUBJECT>
              <P>Except as provided by agency-specific statutes, the Government shall acquire only the technical data and the rights in that data customarily provided to the public with a commercial item or process. The contracting officer shall presume that data delivered under a contract for commercial items was developed exclusively at private expense. When a contract for commercial items requires the delivery of technical data, the contracting officer shall include appropriate provisions and clauses delineating the rights in the technical data in addenda to the solicitation and contract (see part 27 or agency FAR supplements).</P>
            </SECTION>
            <SECTION>
              <SECTNO>12.212</SECTNO>
              <SUBJECT>Computer software.</SUBJECT>
              <P>(a) Commercial computer software or commercial computer software documentation shall be acquired under licenses customarily provided to the public to the extent such licenses are consistent with Federal law and otherwise satisfy the Government's needs. Generally, offerors and contractors shall not be required to—</P>
              <P>(1) Furnish technical information related to commercial computer software or commercial computer software documentation that is not customarily provided to the public; or</P>
              <P>(2) Relinquish to, or otherwise provide, the Government rights to use, modify, reproduce, release, perform, display, or disclose commercial computer software or commercial computer software documentation except as mutually agreed to by the parties.</P>
              <P>(b) With regard to commercial computer software and commercial computer software documentation, the Government shall have only those rights specified in the license contained in any addendum to the contract.</P>
            </SECTION>
            <SECTION>
              <SECTNO>12.213</SECTNO>
              <SUBJECT>Other commercial practices.</SUBJECT>
              <P>It is a common practice in the commercial marketplace for both the buyer and seller to propose terms and conditions written from their particular perspectives. The terms and conditions prescribed in this part seek to balance the interests of both the buyer and seller. These terms and conditions are generally appropriate for use in a wide range of acquisitions. However, market research may indicate other commercial practices that are appropriate for the acquisition of the particular item. These practices should be considered for incorporation into the solicitation and contract if the contracting officer determines them appropriate in concluding a business arrangement satisfactory to both parties and not otherwise precluded by law or Executive order.</P>
              <CITA>[62 FR 264, Jan. 2, 1997]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>12.214</SECTNO>
              <SUBJECT>Cost Accounting Standards.</SUBJECT>
              <P>Cost Accounting Standards (CAS) do not apply to contracts and subcontracts for the acquisition of commercial items when these contracts and subcontracts are firm-fixed-price or fixed-price with economic price adjustment (provided that the price adjustment is not based on actual costs incurred). See 48 CFR 30.201-1 for CAS applicability to fixed-price with economic price adjustment contracts and subcontracts for commercial items when the price adjustment is based on actual costs incurred. When CAS applies, the contracting officer shall insert the appropriate provisions and clauses as prescribed in 48 CFR 30.201.</P>
              <CITA>[63 FR 9054, Feb. 23, 1998]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>12.215</SECTNO>
              <SUBJECT>Notification of overpayment.</SUBJECT>

              <P>If the contractor notifies the contracting officer of a duplicate contract financing or invoice payment or that <PRTPAGE P="200"/>the Government has otherwise overpaid on a contract financing or invoice payment, the contracting officer must promptly provide instructions to the contractor, in coordination with the cognizant payment office, regarding timely disposition of the overpayment.</P>
              <CITA>[68 FR 56683, Oct. 1, 2003]</CITA>
            </SECTION>
          </SUBPART>
          <SUBPART>
            <HD SOURCE="HED">Subpart 12.3—Solicitation Provisions and Contract Clauses for the Acquisition of Commercial Items</HD>
            <SECTION>
              <SECTNO>12.300</SECTNO>
              <SUBJECT>Scope of subpart.</SUBJECT>
              <P>This subpart establishes provisions and clauses to be used when acquiring commercial items.</P>
            </SECTION>
            <SECTION>
              <SECTNO>12.301</SECTNO>
              <SUBJECT>Solicitation provisions and contract clauses for the acquisition of commercial items.</SUBJECT>
              <P>(a) In accordance with Section 8002 of Public Law 103-355 (41 U.S.C 264, note), contracts for the acquisition of commercial items shall, to the maximum extent practicable, include only those clauses—</P>
              <P>(1) Required to implement provisions of law or executive orders applicable to the acquisition of commercial items; or</P>
              <P>(2) Determined to be consistent with customary commercial practice.</P>
              <P>(b) Insert the following provisions in solicitations for the acquisition of commercial items, and clauses in solicitations and contracts for the acquisition of commercial items:</P>
              <P>(1) <E T="03">The provision at 52.212-1, Instructions to Offerors—Commercial Items.</E> This provision provides a single, streamlined set of instructions to be used when soliciting offers for commercial items and is incorporated in the solicitation by reference (see Block 27a, SF 1449). The contracting officer may tailor these instructions or provide additional instructions tailored to the specific acquisition in accordance with 12.302.</P>
              <P>(2) <E T="03">The provision at 52.212-3, Offeror Representations and Certifications—Commercial Items.</E> This provision provides a single, consolidated list of representations and certifications for the acquisition of commercial items and is attached to the solicitation for offerors to complete. This provision may not be tailored except in accordance with Subpart 1.4. Use the provision with its Alternate I in solicitations issued by DoD, NASA, or the Coast Guard that are expected to exceed the threshold at 4.601(a). Use the provision with its Alternate II in solicitations for acquisitions for which small disadvantaged business procurement mechanisms are authorized on a regional basis.</P>
              <P>(3) <E T="03">The clause at 52.212-4, Contract Terms and Conditions—Commercial Items.</E> This clause includes terms and conditions which are, to the maximum extent practicable, consistent with customary commercial practices and is incorporated in the solicitation and contract by reference (see Block 27, SF 1449). Use this clause with its Alternate I when a time-and-materials or labor-hour contract will be awarded. The contracting officer may tailor this clause in accordance with 12.302.</P>
              <P>(4) <E T="03">The clause at 52.212-5, Contract Terms and Conditions Required to Implement Statutes or Executive Orders—Commercial Items.</E> This clause incorporates by reference only those clauses required to implement provisions of law or executive orders applicable to the acquisition of commercial items. The contracting officer shall attach this clause to the solicitation and contract and, using the appropriate clause prescriptions, indicate which, if any, of the additional clauses cited in 52.2125(b) or (c) are applicable to the specific acquisition. When cost information is obtained pursuant to part 15 to establish the reasonableness of prices for commercial items, the contracting officer shall insert the clauses prescribed for this purpose in an addendum to the solicitation and contract. This clause may not be tailored. Use the clause with its Alternate I when the head of the agency has waived the examination of records by the Comptroller General in accordance with 25.1001.</P>
              <P>(c) When the use of evaluation factors is appropriate, the contracting officer may—</P>
              <P>(1) Insert the provision at 52.212-2, Evaluation—Commercial Items, in solicitations for commercial items (see 12.602); or</P>

              <P>(2) Include a similar provision containing all evaluation factors required <PRTPAGE P="201"/>by section 13.106, subpart 14.2 or subpart 15.3, as an addendum (see 12.302(d)).</P>
              <P>(d) <E T="03">Use of required provisions and clauses.</E> Notwithstanding prescriptions contained elsewhere in the FAR, when acquiring commercial items, contracting officers shall be required to use only those provisions and clauses prescribed in this part. The provisions and clauses prescribed in this part shall be revised, as necessary, to reflect the applicability of statutes and executive orders to the acquisition of commercial items.</P>
              <P>(e) <E T="03">Discretionary use of FAR provisions and clauses.</E> The contracting officer may include in solicitations and contracts by addendum other FAR provisions and clauses when their use is consistent with the limitations contained in 12.302. For example:</P>
              <P>(1) The contracting officer may include appropriate clauses when an indefinite-delivery type of contract will be used. The clauses prescribed at 16.506 may be used for this purpose.</P>
              <P>(2) The contracting officer may include appropriate provisions and clauses when the use of options is in the Government's interest. The provisions and clauses prescribed in 17.208 may be used for this purpose. If the provision at 52.212-2 is used, paragraph (b) provides for the evaluation of options.</P>
              <P>(3) The contracting officer may use the provisions and clauses contained in part 23 regarding the use of recovered material when appropriate for the item being acquired.</P>
              <P>(4) When setting aside under the Stafford Act (Subpart 26.2), include the representation at 52.226-3, the notice at 52.226-4, and the clause at 52.226-5 in the solicitation.  This representation is not in the Online Representations and Certifications Application (ORCA) Database.</P>
              <P>(f) Agencies may supplement the provisions and clauses prescribed in this part (to require use of additional provisions and clauses) only as necessary to reflect agency unique statutes applicable to the acquisition of commercial items or as may be approved by the agency senior procurement executive, or the individual responsible for representing the agency on the FAR Council, without power of delegation.</P>
              <CITA>[60 FR 48241, Sept. 18, 1995, as amended at 61 FR 39192, July 26, 1996; 61 FR 67430, Dec. 20, 1996; 62 FR 51270, Sept. 30, 1997; 62 FR 64917, Dec. 9, 1997; 63 FR 35720, June 30, 1998; 63 FR 52427, Sept. 30, 1998; 63 FR 70267, Dec. 18, 1998; 64 FR 32748, June 17, 1999; 64 FR 72418, Dec. 27, 1999; 67 FR 6120, Feb. 8, 2002; 67 FR 13065, Mar. 20, 2002; 67 FR 21538, Apr. 30, 2002; 71 FR 44548, Aug. 4, 2006; 71 FR 57363, Sept. 28, 2006; 71 FR 74677, Dec. 12, 2006]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>12.302</SECTNO>
              <SUBJECT>Tailoring of provisions and clauses for the acquisition of commercial items.</SUBJECT>
              <P>(a) <E T="03">General.</E> The provisions and clauses established in this subpart are intended to address, to the maximum extent practicable, commercial market practices for a wide range of potential Government acquisitions of commercial items. However, because of the broad range of commercial items acquired by the Government, variations in commercial practices, and the relative volume of the Government's acquisitions in the specific market, contracting officers may, within the limitations of this subpart, and after conducting appropriate market research, tailor the provision at 52.212-1, Instructions to Offerors-Commercial Items, and the clause at 52.212-4, Contract Terms and Conditions-Commercial Items, to adapt to the market conditions for each acquisition.</P>
              <P>(b) <E T="03">Tailoring 52.212-4, Contract Terms and Conditions—Commercial Items.</E> The following paragraphs of the clause at 52.212-4, Contract Terms and Conditions—Commercial Items, implement statutory requirements and shall not be tailored—</P>
              <P>(1) Assignments;</P>
              <P>(2) Disputes;</P>
              <P>(3) Payment (except as provided in subpart 32.11);</P>
              <P>(4) Invoice;</P>
              <P>(5) Other compliances; and</P>
              <P>(6) Compliance with laws unique to Government contracts.</P>
              <P>(c) <E T="03">Tailoring inconsistent with customary commercial practice.</E> The contracting officer shall not tailor any clause or otherwise include any additional terms or conditions in a solicitation or contract for commercial items in a manner that is inconsistent with customary commercial practice for the <PRTPAGE P="202"/>item being acquired unless a waiver is approved in accordance with agency procedures. The request for waiver must describe the customary commercial practice found in the marketplace, support the need to include a term or condition that is inconsistent with that practice and include a determination that use of the customary commercial practice is inconsistent with the needs of the Government. A waiver may be requested for an individual or class of contracts for that specific item.</P>
              <P>(d) Tailoring shall be by addenda to the solicitation and contract. The contracting officer shall indicate in Block 27a of the SF 1449 if addenda are attached. These addenda may include, for example, a continuation of the schedule of supplies/services to be acquired from blocks 18 through 21 of the SF 1449; a continuation of the description of the supplies/services being acquired; further elaboration of any other item(s) on the SF 1449; any other terms or conditions necessary for the performance of the proposed contract (such as options, ordering procedures for indefinite-delivery type contracts, warranties, contract financing arrangements, etc.).</P>
              <CITA>[60 FR 48241, Sept. 18, 1995, as amended at 61 FR 45772, Aug. 29, 1996; 61 FR 67430, Dec. 20, 1996; 62 FR 264, Jan. 2, 1997]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>12.303</SECTNO>
              <SUBJECT>Contract format.</SUBJECT>
              <P>Solicitations and contracts for the acquisition of commercial items prepared using this part 12 shall be assembled, to the maximum extent practicable, using the following format:</P>
              <P>(a) Standard Form (SF) 1449;</P>
              <P>(b) Continuation of any block from SF 1449, such as—</P>
              <P>(1) Block 10 if a price evaluation adjustment for small disadvantaged business concerns is applicable (the contracting officer shall indicate the percentage(s) and applicable line item(s)), if an incentive subcontracting clause is used (the contracting officer shall indicate the applicable percentage), or if set aside for emerging small businesses;</P>
              <P>(2) Block 18B for remittance address;</P>
              <P>(3) Block 19 for contract line item numbers;</P>
              <P>(4) Block 20 for schedule of supplies/services; or</P>
              <P>(5) Block 25 for accounting data;</P>
              <P>(c) Contract clauses—</P>
              <P>(1) 52.212-4, Contract Terms and Conditions—Commercial Items, by reference (see SF 1449, Block 27a);</P>
              <P>(2) Any addendum to 52.212-4; and</P>
              <P>(3) 52.212-5, Contract Terms and Conditions Required to Implement Statutes and Executive Orders;</P>
              <P>(d) Any contract documents, exhibits or attachments; and</P>
              <P>(e) Solicitation provisions—</P>
              <P>(1) 52.212-1, Instructions to Offerors—Commercial Items, by reference (see SF 1449, Block 27a);</P>
              <P>(2) Any addendum to 52.212-1;</P>
              <P>(3) 52.212-2, Evaluation—Commercial Items, or other description of evaluation factors for award, if used; and</P>
              <P>(4) 52.212-3, Offeror Representations and Certifications—Commercial Items.</P>
              <CITA>[60 FR 48241, Sept. 18, 1995; 60 FR 54817, Oct. 26, 1995; 61 FR 67430, Dec. 20, 1996; 63 FR 35720, June 30, 1997; 63 FR 36121, July 1, 1998; 64 FR 10536, Mar. 4, 1999; 71 FR 220, Jan. 3, 2006]</CITA>
            </SECTION>
          </SUBPART>
          <SUBPART>
            <HD SOURCE="HED">Subpart 12.4—Unique Requirements Regarding Terms and Conditions for Commercial Items</HD>
            <SECTION>
              <SECTNO>12.401</SECTNO>
              <SUBJECT>General.</SUBJECT>
              <P>This subpart provides—</P>
              <P>(a) Guidance regarding tailoring of the paragraphs in the clause at 52.212-4, Contract Terms and Conditions—Commercial Items, when the paragraphs do not reflect the customary practice for a particular market; and</P>
              <P>(b) Guidance on the administration of contracts for commercial items in those areas where the terms and conditions in 52.212-4 differ substantially from those contained elsewhere in the FAR.</P>
            </SECTION>
            <SECTION>
              <SECTNO>12.402</SECTNO>
              <SUBJECT>Acceptance.</SUBJECT>

              <P>(a) The acceptance paragraph in 52.212-4 is based upon the assumption that the Government will rely on the contractor's assurances that the commercial item tendered for acceptance conforms to the contract requirements. The Government inspection of commercial items will not prejudice its <PRTPAGE P="203"/>other rights under the acceptance paragraph. Additionally, although the paragraph does not address the issue of rejection, the Government always has the right to refuse acceptance of nonconforming items. This paragraph is generally appropriate when the Government is acquiring noncomplex commercial items.</P>
              <P>(b) Other acceptance procedures may be more appropriate for the acquisition of complex commercial items or commercial items used in critical applications. In such cases, the contracting officer shall include alternative inspection procedure(s) in an addendum and ensure these procedures and the postaward remedies adequately protect the interests of the Government. The contracting officer must carefully examine the terms and conditions of any express warranty with regard to the effect it may have on the Government's available postaward remedies (see 12.404).</P>
              <P>(c) The acquisition of commercial items under other circumstances such as on an “as is” basis may also require acceptance procedures different from those contained in 52.212-4. The contracting officer should consider the effect the specific circumstances will have on the acceptance paragraph as well as other paragraphs of the clause.</P>
            </SECTION>
            <SECTION>
              <SECTNO>12.403</SECTNO>
              <SUBJECT>Termination.</SUBJECT>
              <P>(a) <E T="03">General.</E> The clause at 52.212-4 permits the Government to terminate a contract for commercial items either for the convenience of the Government or for cause. However, the paragraphs in 52.212-4 entitled “Termination for the Government's Convenience” and “Termination for Cause” contain concepts which differ from those contained in the termination clauses prescribed in part 49. Consequently, the requirements of part 49 do not apply when terminating contracts for commercial items and contracting officers shall follow the procedures in this section. Contracting officers may continue to use part 49 as guidance to the extent that part 49 does not conflict with this section and the language of the termination paragraphs in 52.212-4.</P>
              <P>(b) <E T="03">Policy.</E> The contracting officer should exercise the Government's right to terminate a contract for commercial items either for convenience or for cause only when such a termination would be in the best interests of the Government. The contracting officer should consult with counsel prior to terminating for cause.</P>
              <P>(c) <E T="03">Termination for cause.</E> (1) The paragraph in 52.2124 entitled “Excusable Delay” requires contractors notify the contracting officer as soon as possible after commencement of any excusable delay. In most situations, this requirement should eliminate the need for a show cause notice prior to terminating a contract. The contracting officer shall send a cure notice prior to terminating a contract for a reason other than late delivery.</P>
              <P>(2) The Government's rights after a termination for cause shall include all the remedies available to any buyer in the marketplace. The Government's preferred remedy will be to acquire similar items from another contractor and to charge the defaulted contractor with any excess reprocurement costs together with any incidental or consequential damages incurred because of the termination.</P>
              <P>(3) When a termination for cause is appropriate, the contracting officer shall send the contractor a written notification regarding the termination. At a minimum, this notification shall—</P>
              <P>(i) Indicate the contract is terminated for cause;</P>
              <P>(ii) Specify the reasons for the termination;</P>
              <P>(iii) Indicate which remedies the Government intends to seek or provide a date by which the Government will inform the contractor of the remedy; and</P>
              <P>(iv) State that the notice constitutes a final decision of the contracting officer and that the contractor has the right to appeal under the Disputes clause (see 33.211).</P>
              <P>(d) <E T="03">Termination for the Government's convenience.</E> (1) When the contracting officer terminates a contract for commercial items for the Government's convenience, the contractor shall be paid—</P>

              <P>(i)(A) The percentage of the contract price reflecting the percentage of the work performed prior to the notice of the termination for fixed-price or <PRTPAGE P="204"/>fixed-price with economic price adjustment contracts; or</P>
              <P>(B) An amount for direct labor hours (as defined in the Schedule of the contract) determined by multiplying the number of direct labor hours expended before the effective date of termination by the hourly rate(s) in the Schedule; and</P>
              <P>(ii) Any charges the contractor can demonstrate directly resulted from the termination. The contractor may demonstrate such charges using its standard record keeping system and is not required to comply with the cost accounting standards or the contract cost principles in part 31. The Government does not have any right to audit the contractor's records solely because of the termination for convenience.</P>
              <P>(2) Generally, the parties should mutually agree upon the requirements of the termination proposal. The parties must balance the Government's need to obtain sufficient documentation to support payment to the contractor against the goal of having a simple and expeditious settlement.</P>
              <CITA>[60 FR 48241, Sept. 18, 1995, as amended at 71 FR 74677, Dec. 12, 2006]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>12.404</SECTNO>
              <SUBJECT>Warranties.</SUBJECT>
              <P>(a) <E T="03">Implied warranties.</E> The Government's post award rights contained in 52.212-4 are the implied warranty of merchantability, the implied warranty of fitness for particular purpose and the remedies contained in the acceptance paragraph.</P>
              <P>(1) The implied warranty of merchantability provides that an item is reasonably fit for the ordinary purposes for which such items are used. The items must be of at least average, fair or medium-grade quality and must be comparable in quality to those that will pass without objection in the trade or market for items of the same description.</P>
              <P>(2) The implied warranty of fitness for a particular purpose provides that an item is fit for use for the particular purpose for which the Government will use the items. The Government can rely upon an implied warranty of fitness for particular purpose when—</P>
              <P>(i) The seller knows the particular purpose for which the Government intends to use the item; and</P>
              <P>(ii) The Government relied upon the contractor's skill and judgment that the item would be appropriate for that particular purpose.</P>
              <P>(3) Contracting officers should consult with legal counsel prior to asserting any claim for a breach of an implied warranty.</P>
              <P>(b) <E T="03">Express warranties.</E> The Federal Acquisition Streamlining Act of 1994 (41 U.S.C. 264 note) requires contracting officers to take advantage of commercial warranties. To the maximum extent practicable, solicitations for commercial items shall require offerors to offer the Government at least the same warranty terms, including offers of extended warranties, offered to the general public in customary commercial practice. Solicitations may specify minimum warranty terms, such as minimum duration, appropriate for the Government's intended use of the item.</P>
              <P>(1) Any express warranty the Government intends to rely upon must meet the needs of the Government. The contracting officer should analyze any commercial warranty to determine if—</P>
              <P>(i) The warranty is adequate to protect the needs of the Government, e.g., items covered by the warranty and length of warranty;</P>
              <P>(ii) The terms allow the Government effective postaward administration of the warranty to include the identification of warranted items, procedures for the return of warranted items to the contractor for repair or replacement, and collection of product performance information; and</P>
              <P>(iii) The warranty is cost-effective.</P>
              <P>(2) In some markets, it may be customary commercial practice for contractors to exclude or limit the implied warranties contained in 52.212-4 in the provisions of an express warranty. In such cases, the contracting officer shall ensure that the express warranty provides for the repair or replacement of defective items discovered within a reasonable period of time after acceptance.</P>
              <P>(3) Express warranties shall be included in the contract by addendum (see 12.302).</P>
            </SECTION>
          </SUBPART>
          <SUBPART>
            <PRTPAGE P="205"/>
            <HD SOURCE="HED">Subpart 12.5—Applicability of Certain Laws to the Acquisition of Commercial Items</HD>
            <SECTION>
              <SECTNO>12.500</SECTNO>
              <SUBJECT>Scope of subpart.</SUBJECT>
              <P>As required by Section 34 of the Office of Federal Procurement Policy Act (41 U.S.C. 430), this subpart lists provisions of laws that are not applicable to contracts for the acquisition of commercial items, or are not applicable to subcontracts, at any tier, for the acquisition of a commercial item. This subpart also lists provisions of law that have been amended to eliminate or modify their applicability to either contracts or subcontracts for the acquisition of commercial items.</P>
            </SECTION>
            <SECTION>
              <SECTNO>12.501</SECTNO>
              <SUBJECT>Applicability.</SUBJECT>
              <P>(a) This subpart applies to any contract or subcontract at any tier for the acquisition of commercial items.</P>
              <P>(b) Nothing in this subpart shall be construed to authorize the waiver of any provision of law with respect to any subcontract if the prime contractor is reselling or distributing commercial items of another contractor without adding value. This limitation is intended to preclude establishment of unusual contractual arrangements solely for the purpose of Government sales.</P>
              <P>(c) For purposes of this subpart, contractors awarded subcontracts under subpart 19.8, Contracting with the Small Business Administration (the 8(a) Program), shall be considered prime contractors.</P>
            </SECTION>
            <SECTION>
              <SECTNO>12.502</SECTNO>
              <SUBJECT>Procedures.</SUBJECT>
              <P>(a) The FAR prescription for the provision or clause for each of the laws listed in 12.503 has been revised in the appropriate part to reflect its proper application to prime contracts for the acquisition of commercial items.</P>
              <P>(b) For subcontracts for the acquisition of commercial items or commercial components, the clauses at 52.212-5, Contract Terms and Conditions Required to Implement Statutes or Executive Orders—Commercial Items, and 52.244-6, Subcontracts for Commercial Items and Commercial Components, reflect the applicability of the laws listed in 12.504 by identifying the only provisions and clauses that are required to be included in a subcontract at any tier for the acquisition of commercial items or commercial components.</P>
            </SECTION>
            <SECTION>
              <SECTNO>12.503</SECTNO>
              <SUBJECT>Applicability of certain laws to Executive agency contracts for the acquisition of commercial services.</SUBJECT>
              <P>(a) The following laws are not applicable to Executive agency contracts for the acquisition of commercial items:</P>
              <P>(1) 41 U.S.C. 43, Walsh-Healey Act (see subpart 22.6).</P>
              <P>(2) 41 U.S.C. 254(a) and 10 U.S.C. 2306(b), Contingent Fees (see 3.404).</P>
              <P>(3) 41 U.S.C. 416(a)(6), Minimum Response Time for Offers under Office of Federal Procurement Policy Act (see 5.203).</P>
              <P>(4) 41 U.S.C. 701, <E T="03">et seq.,</E> Drug-Free Workplace Act of 1988 (see 23.501).</P>
              <P>(5) 31 U.S.C. 1354(a), Limitation on use of appropriated funds for contracts with entities not meeting veterans employment reporting requirements (see 22.1302).</P>
              <P>(6) 31 U.S.C. 6101 note, Pub. L. 109-282, Federal Funding Accountability and Transparency Act of 2006, requirement to report subcontract data.</P>
              <P>(b) Certain requirements of the following laws are not applicable to executive agency contracts for the acquisition of commercial items:</P>
              <P>(1) 40 U.S.C. 3701 <E T="03">et seq.,</E> Requirement for a certificate and clause under the Contract Work Hours and Safety Standards Act (see 22.305).</P>
              <P>(2) 41 U.S.C. 57(a) and (b), and 58, Requirement for a clause and certain other requirements related to the Anti-Kickback Act of 1986 (see 3.502).</P>
              <P>(3) 49 U.S.C. 40118, Requirement for a clause under the Fly American provisions (see 47.405).</P>
              <P>(c) The applicability of the following laws have been modified in regards to Executive agency contracts for the acquisition of commercial items:</P>
              <P>(1) 41 U.S.C. 253g and 10 U.S.C. 2402, Prohibition on Limiting Subcontractor Direct Sales to the United States (see 3.503).</P>

              <P>(2) 41 U.S.C. 254(d) and 10 U.S.C. 2306a, Truth in Negotiations Act (see 15.403).<PRTPAGE P="206"/>
              </P>
              <P>(3) 41 U.S.C. 422, Cost Accounting Standards (see 48 CFR chapter 99) (see 12.214).</P>
              <CITA>[60 FR 48241, Sept. 18, 1995, as amended at 61 FR 67418, Dec. 20, 1996; 62 FR 232, 236, Jan. 2, 1997; 62 FR 10710, Mar. 10, 1997; 62 FR 51270, Sept. 30, 1997; 64 FR 10532, Mar. 4, 1999; 64 FR 72416, Dec. 27, 1999; 66 FR 53488, Oct. 22, 2001; 70 FR 57454, Sept. 30, 2005; 71 FR 20302, Apr. 19, 2006; 72 FR 46341, Aug. 17, 2007; 72 FR 51310, Sept. 6, 2007]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>12.504</SECTNO>
              <SUBJECT>Applicability of certain laws to subcontracts for the acquisition of commercial items.</SUBJECT>
              <P>(a) The following laws are not applicable to subcontracts at any tier for the acquisition of commercial items or commercial components at any tier:</P>
              <P>(1) 10 U.S.C. 2631, Transportation of Supplies by Sea (except for the types of subcontracts listed at 47.504(d)).</P>
              <P>(2) 15 U.S.C. 644(d), Requirements relative to labor surplus areas under the Small Business Act (see subpart 19.2).</P>
              <P>(3) [Reserved]</P>
              <P>(4) 41 U.S.C. 43, Walsh-Healey Act (see subpart 22.6).</P>
              <P>(5) 41 U.S.C. 253d, Validation of Proprietary Data Restrictions (see subpart 27.4).</P>
              <P>(6) 41 U.S.C. 254(a) and 10 U.S.C. 2306(b), Contingent Fees (see subpart 3.4).</P>
              <P>(7) 41 U.S.C. 254d(c) and 10 U.S.C. 2313(c), Examination of Records of Contractor, when a subcontractor is not required to provide cost or pricing data (15.209(b)).</P>
              <P>(8) 41 U.S.C. 416(a)(6), Minimum Response Time for Offers under Office of Federal Procurement Policy Act (see subpart 5.2).</P>
              <P>(9) 41 U.S.C. 418a, Rights in Technical Data (see subpart 27.4).</P>
              <P>(10) 41 U.S.C. 701, <E T="03">et seq.,</E> Drug-Free Workplace Act of 1988 (see subpart 23.5).</P>
              <P>(11) 46 U.S.C. Appx 1241(b), Transportation in American Vessels of Government Personnel and Certain Cargo (see Subpart 47.5) (except for the types of subcontracts listed at 47.504(d)).</P>
              <P>(12) 49 U.S.C. 40118, Fly American provisions (see subpart 47.4).</P>

              <P>(b) The requirements for a certificate and clause under the Contract Work Hours and Safety Standards Act, 40 U.S.C. 3701, <E T="03">et seq.,</E> (see Subpart 22.3) are not applicable to subcontracts at any tier for the acquisition of commercial items or commercial components.</P>
              <P>(c) The applicability of the following laws have been modified in regards to subcontracts at any tier for the acquisition of commercial items or commercial components:</P>
              <P>(1) 41 U.S.C. 253g and 10 U.S.C. 2402, Prohibition on Limiting Subcontractor Direct Sales to the United States (see subpart 3.5).</P>
              <P>(2) 41 U.S.C. 254(d) and 10 U.S.C. 2306a, Truth in Negotiations Act (see subpart 15.4).</P>
              <P>(3) 41 U.S.C. 422, Cost Accounting Standards (48 CFR chapter 99) (see 12.214).</P>
              <CITA>[60 FR 48241, Sept. 18, 1996 as amended at 61 FR 67418, Dec. 20, 1996; 62 FR 232, 236, Jan. 2, 1997; 62 FR 51270, Sept. 30, 1997; 64 FR 72416, 72418, Dec. 27, 1999; 65 FR 46069, July 26, 2000; 68 FR 13203, Mar. 18, 2003; 70 FR 57454, Sept. 30, 2005; 72 FR 46330, Aug. 17, 2007]</CITA>
            </SECTION>
          </SUBPART>
          <SUBPART>
            <HD SOURCE="HED">Subpart 12.6—Streamlined Procedures for Evaluation and Solicitation for Commercial Items</HD>
            <SECTION>
              <SECTNO>12.601</SECTNO>
              <SUBJECT>General.</SUBJECT>
              <P>This subpart provides optional procedures for—</P>
              <P>(a) Streamlined evaluation of offers for commercial items; and</P>
              <P>(b) Streamlined solicitation of offers for commercial items for use where appropriate.</P>
              <P>These procedures are intended to simplify the process of preparing and issuing solicitations, and evaluating offers for commercial items consistent with customary commercial practices.</P>
            </SECTION>
            <SECTION>
              <SECTNO>12.602</SECTNO>
              <SUBJECT>Streamlined evaluation of offers.</SUBJECT>

              <P>(a) When evaluation factors are used, the contracting officer may insert a provision substantially the same as the provision at 52.212-2, Evaluation—Commercial Items, in solicitations for commercial items or comply with the procedures in 13.106 if the acquisition is being made using simplified acquisition procedures. When the provision at 52.212-2 is used, paragraph (a) of the provision shall be tailored to the specific acquisition to describe the evaluation factors and relative importance of those factors. However, when using the <PRTPAGE P="207"/>simplified acquisition procedures in part 13, contracting officers are not required to describe the relative importance of evaluation factors.</P>
              <P>(b) Offers shall be evaluated in accordance with the criteria contained in the solicitation. For many commercial items, the criteria need not be more detailed than technical (capability of the item offered to meet the agency need), price and past performance. Technical capability may be evaluated by how well the proposed products meet the Government requirement instead of predetermined subfactors. Solicitations for commercial items do not have to contain subfactors for technical capability when the solicitation adequately describes the item's intended use. A technical evaluation would normally include examination of such things as product literature, product samples (if requested), technical features and warranty provisions. Past performance shall be evaluated in accordance with the procedures in section 13.106 or subpart 15.3, as applicable. The contracting officer shall ensure the instructions provided in the provision at 52.212-1, Instructions to Offerors—Commercial Items, and the evaluation criteria provided in the provision at 52.212-2, Evaluation—Commercial Items, are in agreement.</P>
              <P>(c) Select the offer that is most advantageous to the Government based on the factors contained in the solicitation. Fully document the rationale for selection of the successful offeror including discussion of any tradeoffs considered.</P>
              <CITA>[60 FR 48241, Sept. 18, 1995, as amended at 61 FR 39192, July 26, 1996; 62 FR 264, Jan. 2, 1997; 62 FR 51270, Sept. 30, 1997; 62 FR 64917, Dec. 9, 1997]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>12.603</SECTNO>
              <SUBJECT>Streamlined solicitation for commercial items.</SUBJECT>
              <P>(a) When a written solicitation will be issued, the contracting officer may use the following procedure to reduce the time required to solicit and award contracts for the acquisition of commercial items. This procedure combines the synopsis required by 5.203 and the issuance of the solicitation into a single document.</P>
              <P>(b) When using the combined synopsis/solicitation procedure, the SF 1449 is not used for issuing the solicitation.</P>
              <P>(c) To use these procedures, the contracting officer shall—</P>
              <P>(1) Prepare the synopsis as described at 5.207.</P>
              <P>(2) In the Description, include the following additional information:</P>
              <P>(i) The following statement:
              </P>
              <EXTRACT>
                <P>This is a combined synopsis/solicitation for commercial items prepared in accordance with the format in FAR Subpart 12.6, as supplemented with additional information included in this notice. This announcement constitutes the only solicitation; proposals are being requested and a written solicitation will not be issued.</P>
              </EXTRACT>
              
              <P>(ii) The solicitation number and a statement that the solicitation is issued as an invitation to bid (IFB), request for quotation (RFQ) or request for proposal (RFP).</P>
              <P>(iii) A statement that the solicitation document and incorporated provisions and clauses are those in effect through Federal Acquisition Circular ___.</P>
              <P>(iv) A notice regarding any set-aside and the associated NAICS code and small business size standard. Also include a statement regarding the Small Business Competitiveness Demonstration Program, if applicable.</P>
              <P>(v) A list of contract line item number(s) and items, quantities and units of measure, (including option(s), if applicable).</P>
              <P>(vi) Description of requirements for the items to be acquired.</P>
              <P>(vii) Date(s) and place(s) of delivery and acceptance and FOB point.</P>
              <P>(viii) A statement that the provision at 52.212-1, Instructions to Offerors—Commercial, applies to this acquisition and a statement regarding any addenda to the provision.</P>
              <P>(ix) A statement regarding the applicability of the provision at 52.212-2, Evaluation—Commercial Items, if used, and the specific evaluation criteria to be included in paragraph (a) of that provision. If this provision is not used, describe the evaluation procedures to be used.</P>

              <P>(x) A statement advising offerors to include a completed copy of the provision at 52.212-3, Offeror Representations and Certifications—Commercial Items, with its offer.<PRTPAGE P="208"/>
              </P>
              <P>(xi) A statement that the clause at 52.212-4, Contract Terms and Conditions—Commercial Items, applies to this acquisition and a statement regarding any addenda to the clause.</P>
              <P>(xii) A statement that the clause at 52.212-5, Contract Terms and Conditions Required To Implement Statutes Or Executive Orders—Commercial Items, applies to this acquisition and a statement regarding which, if any, of the additional FAR clauses cited in the clause are applicable to the acquisition.</P>
              <P>(xiii) A statement regarding any additional contract requirement(s) or terms and conditions (such as contract financing arrangements or warranty requirements) determined by the contracting officer to be necessary for this acquisition and consistent with customary commercial practices.</P>
              <P>(xiv) A statement regarding the Defense Priorities and Allocations System (DPAS) and assigned rating, if applicable.</P>
              <P>(xv) A statement regarding any applicable Numbered Notes.</P>
              <P>(xvi) The date, time and place offers are due.</P>
              <P>(xvii) The name and telephone number of the individual to contact for information regarding the solicitation.</P>
              <P>(3) Allow response time for receipt of offers as follows:</P>
              <P>(i) Because the synopsis and solicitation are contained in a single document, it is not necessary to publicize a separate synopsis 15 days before the issuance of the solicitation.</P>
              <P>(ii) When using the combined synopsis and solicitation, contracting officers must establish a response time in accordance with 5.203(b) (but see 5.203(h)).</P>
              <P>(4) Publicize amendments to solicitations in the same manner as the initial synopsis and solicitation.</P>
              <CITA>[60 FR 48241, Sept. 18, 1995, as amended at 61 FR 41469, Aug. 8, 1996; 62 FR 264, Jan. 2, 1997; 65 FR 46056, July 26, 2000; 66 FR 27413, May 16, 2001; 68 FR 56679, Oct. 1, 2003]</CITA>
            </SECTION>
          </SUBPART>
        </PART>
      </SUBCHAP>
      <SUBCHAP TYPE="P">
        <PRTPAGE P="209"/>
        <HD SOURCE="HED">SUBCHAPTER C—CONTRACTING METHODS AND CONTRACT TYPES</HD>
        <PART>
          <EAR>Pt. 13</EAR>
          <HD SOURCE="HED">PART 13—SIMPLIFIED ACQUISITION PROCEDURES</HD>
          <CONTENTS>
            <SECHD>Sec.</SECHD>
            <SECTNO>13.000</SECTNO>
            <SUBJECT>Scope of part.</SUBJECT>
            <SECTNO>13.001</SECTNO>
            <SUBJECT>Definitions.</SUBJECT>
            <SECTNO>13.002</SECTNO>
            <SUBJECT>Purpose.</SUBJECT>
            <SECTNO>13.003</SECTNO>
            <SUBJECT>Policy.</SUBJECT>
            <SECTNO>13.004</SECTNO>
            <SUBJECT>Legal effect of quotations.</SUBJECT>
            <SECTNO>13.005</SECTNO>
            <SUBJECT>Federal Acquisition Streamlining Act of 1994 list of inapplicable laws.</SUBJECT>
            <SECTNO>13.006</SECTNO>
            <SUBJECT>Inapplicable provisions and clauses.</SUBJECT>
            <SUBPART>
              <HD SOURCE="HED">Subpart 13.1—Procedures</HD>
              <SECTNO>13.101</SECTNO>
              <SUBJECT>General.</SUBJECT>
              <SECTNO>13.102</SECTNO>
              <SUBJECT>Source list.</SUBJECT>
              <SECTNO>13.103</SECTNO>
              <SUBJECT>Use of standing price quotations.</SUBJECT>
              <SECTNO>13.104</SECTNO>
              <SUBJECT>Promoting competition.</SUBJECT>
              <SECTNO>13.105</SECTNO>
              <SUBJECT>Synopsis and posting requirements.</SUBJECT>
              <SECTNO>13.106</SECTNO>
              <SUBJECT>Soliciting competition, evaluation of quotations or offers, award and documentation.</SUBJECT>
              <SECTNO>13.106-1</SECTNO>
              <SUBJECT>Soliciting competition.</SUBJECT>
              <SECTNO>13.106-2</SECTNO>
              <SUBJECT>Evaluation of quotations or offers.</SUBJECT>
              <SECTNO>13.106-3</SECTNO>
              <SUBJECT>Award and documentation.</SUBJECT>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart 13.2—Actions at or Below the Micro-Purchase Threshold</HD>
              <SECTNO>13.201</SECTNO>
              <SUBJECT>General.</SUBJECT>
              <SECTNO>13.202</SECTNO>
              <SUBJECT>Purchase guidelines.</SUBJECT>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart 13.3—Simplified Acquisition Methods</HD>
              <SECTNO>13.301</SECTNO>
              <SUBJECT>Governmentwide commercial purchase card.</SUBJECT>
              <SECTNO>13.302</SECTNO>
              <SUBJECT>Purchase orders.</SUBJECT>
              <SECTNO>13.302-1</SECTNO>
              <SUBJECT>General.</SUBJECT>
              <SECTNO>13.302-2</SECTNO>
              <SUBJECT>Unpriced purchase orders.</SUBJECT>
              <SECTNO>13.302-3</SECTNO>
              <SUBJECT>Obtaining contractor acceptance and modifying purchase orders.</SUBJECT>
              <SECTNO>13.302-4</SECTNO>
              <SUBJECT>Termination or cancellation of purchase orders.</SUBJECT>
              <SECTNO>13.302-5</SECTNO>
              <SUBJECT>Clauses.</SUBJECT>
              <SECTNO>13.303</SECTNO>
              <SUBJECT>Blanket purchase agreements (BPAs).</SUBJECT>
              <SECTNO>13.303-1</SECTNO>
              <SUBJECT>General.</SUBJECT>
              <SECTNO>13.303-2</SECTNO>
              <SUBJECT>Establishment of BPAs.</SUBJECT>
              <SECTNO>13.303-3</SECTNO>
              <SUBJECT>Preparation of BPAs.</SUBJECT>
              <SECTNO>13.303-4</SECTNO>
              <SUBJECT>Clauses.</SUBJECT>
              <SECTNO>13.303-5</SECTNO>
              <SUBJECT>Purchases under BPAs.</SUBJECT>
              <SECTNO>13.303-6</SECTNO>
              <SUBJECT>Review procedures.</SUBJECT>
              <SECTNO>13.303-7</SECTNO>
              <SUBJECT>Completion of BPAs.</SUBJECT>
              <SECTNO>13.303-8</SECTNO>
              <SUBJECT>Optional clause.</SUBJECT>
              <SECTNO>13.304</SECTNO>
              <SUBJECT>[Reserved]</SUBJECT>
              <SECTNO>13.305</SECTNO>
              <SUBJECT>Imprest funds and third party drafts.</SUBJECT>
              <SECTNO>13.305-1</SECTNO>
              <SUBJECT>General.</SUBJECT>
              <SECTNO>13.305-2</SECTNO>
              <SUBJECT>Agency responsibilities.</SUBJECT>
              <SECTNO>13.305-3</SECTNO>
              <SUBJECT>Conditions for use.</SUBJECT>
              <SECTNO>13.305-4</SECTNO>
              <SUBJECT>Procedures.</SUBJECT>
              <SECTNO>13.306</SECTNO>
              <SUBJECT>SF 44, Purchase Order—Invoice—Voucher.</SUBJECT>
              <SECTNO>13.307</SECTNO>
              <SUBJECT>Forms.</SUBJECT>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart 13.4—Fast Payment Procedure</HD>
              <SECTNO>13.401</SECTNO>
              <SUBJECT>General.</SUBJECT>
              <SECTNO>13.402</SECTNO>
              <SUBJECT>Conditions for use.</SUBJECT>
              <SECTNO>13.403</SECTNO>
              <SUBJECT>Preparation and execution of orders.</SUBJECT>
              <SECTNO>13.404</SECTNO>
              <SUBJECT>Contract clause.</SUBJECT>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart 13.5—Test Program for Certain Commercial Items</HD>
              <SECTNO>13.500</SECTNO>
              <SUBJECT>Genera