[Title 48 CFR ]
[Code of Federal Regulations (annual edition) - October 1, 2007 Edition]
[From the U.S. Government Printing Office]



[[Page i]]

          

          48


          Chapters 7 to 14

                         Revised as of October 1, 2007


          Federal Acquisition Regulations System
          



________________________

          Containing a codification of documents of general 
          applicability and future effect

          As of October 1, 2007
          With Ancillaries
                    Published by
                    Office of the Federal Register
                    National Archives and Records
                    Administration
                    A Special Edition of the Federal Register

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                            Table of Contents



                                                                    Page
  Explanation.................................................       v

  Title 48:
          Chapter 7--Agency for International Development            3
          Chapter 8--Department of Veterans Affairs                141
          Chapter 9--Department of Energy                          279
          Chapter 10--Department of the Treasury                   547
          Chapter 12--Department of Transportation                 563
          Chapter 13--Department of Commerce                       625
          Chapter 14--Department of the Interior                   659
  Finding Aids:
      Table of CFR Titles and Chapters........................     679
      Alphabetical List of Agencies Appearing in the CFR......     697
      List of CFR Sections Affected...........................     707

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

                     Cite this Code: CFR
                     To cite the regulations in 
                       this volume use title, 
                       part and section number. 
                       Thus, 48 CFR 701.105 
                       refers to title 48, part 
                       701, section 105.

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

[[Page v]]



                               EXPLANATION

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

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

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

LEGAL STATUS

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

HOW TO USE THE CODE OF FEDERAL REGULATIONS

    The Code of Federal Regulations is kept up to date by the individual 
issues of the Federal Register. These two publications must be used 
together to determine the latest version of any given rule.
    To determine whether a Code volume has been amended since its 
revision date (in this case, October 1, 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.

EFFECTIVE AND EXPIRATION DATES

    Each volume of the Code contains amendments published in the Federal 
Register since the last revision of that volume of the Code. Source 
citations for the regulations are referred to by volume number and page 
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Code a note has been inserted to reflect the future effective date. In 
those instances where a regulation published in the Federal Register 
states a date certain for expiration, an appropriate note will be 
inserted following the text.

OMB CONTROL NUMBERS

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

[[Page 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.

OBSOLETE PROVISIONS

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

CFR INDEXES AND TABULAR GUIDES

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

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appearing in the Code of Federal Regulations.

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[[Page vii]]

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

October 1, 2007.

[[Page ix]]



                               THIS TITLE

    Title 48--Federal Acquisition Regulations System is composed of 
seven volumes. The chapters in these volumes are arranged as follows: 
Chapter 1 (parts 1 to 51), chapter 1 (parts 52 to 99), chapter 2 (parts 
201 to 299), chapters 3 to 6, chapters 7 to 14, chapters 15 to 28 and 
chapter 29 to end. The contents of these volumes represent all current 
regulations codified under this title of the CFR as of October 1, 2007.

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

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

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

    For this volume, Robert J. Sheehan was Chief Editor. The Code of 
Federal Regulations publication program is under the direction of 
Michael L. White, assisted by Ann Worley.


[[Page 1]]



            TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM




                  (This book contains chapters 7 to 14)

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

chapter 7--Agency for International Development.............         701

chapter 8--Department of Veterans Affairs...................         801

chapter 9--Department of Energy.............................         901

chapter 10--Department of the Treasury......................        1001

chapter 12--Department of Transportation....................        1201

chapter 13--Department of Commerce..........................        1301

chapter 14--Department of the Interior......................        1401

[[Page 3]]



             CHAPTER 7--AGENCY FOR INTERNATIONAL DEVELOPMENT




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


  Editorial Note: Nomenclature changes to chapter 7 appear at 62 FR 
40466, July 29, 1997, and corrected at 62 FR 45334, August 27, 1997.

                          SUBCHAPTER A--GENERAL
Part                                                                Page
701             Federal Acquisition Regulation System.......           5
702             Definitions of words and terms..............          10
703             Improper business practices and personal 
                    conflicts of interest...................          12
704             Administrative matters......................          12
                   SUBCHAPTER B--ACQUISITION PLANNING
705             Publicizing contract actions................          13
706             Competition requirements....................          13
707             Acquisition planning........................          16
709             Contractor qualifications...................          16
711             Describing agency needs.....................          16
          SUBCHAPTER C--CONTRACTING METHODS AND CONTRACT TYPES
713             Simplified acquisition procedures...........          18
714             Sealed bidding..............................          18
715             Contracting by negotiation..................          18
716             Types of contracts..........................          22
717             Special contracting methods.................          23
                  SUBCHAPTER D--SOCIOECONOMIC PROGRAMS
719             Small business programs.....................          24
722             Application of labor laws to government 
                    acquisition.............................          33
724             Protection of privacy and freedom of 
                    information.............................          36
725             Foreign acquisition.........................          36
726             Other socioeconomic programs................          37
             SUBCHAPTER E--GENERAL CONTRACTING REQUIREMENTS
727             Patents, data, and copyrights (Eff. 10-18-
                    07).....................................          41

[[Page 4]]

728             Bonds and insurance.........................          41
731             Contract cost principles and procedures.....          43
732             Contract financing..........................          46
733             Protests, disputes, and appeals.............          48
             SUBCHAPTER F--SPECIAL CATEGORIES OF CONTRACTING
734             Major system acquisition....................          52
736             Construction and architect-engineer 
                    contracts...............................          52
737

[Reserved]

                    SUBCHAPTER G--CONTRACT MANAGEMENT
742             Contract administration.....................          54
745             Government property.........................          56
747             Transportation..............................          56
749             Termination of contracts....................          56
750             Extraordinary contractual actions...........          57
                     SUBCHAPTER H--CLAUSES AND FORMS
752             Solicitation provisions and contract clauses          63
753             Forms.......................................          91
Appendixes A-C to Chapter 7 [Reserved]
Appendix D to Chapter 7--Direct USAID Contracts With a U.S. 
  Citizen or a U.S. Resident Alien for Personal Services 
  Abroad....................................................          92
Appendix E to Chapter 7 [Reserved]
Appendix F to Chapter 7--Use of Collaborative Assistance 
  Method for Title XII Activities...........................         117
Appendixes G-H to Chapter 7 [Reserved]
Appendix I to Chapter 7--USAID's Academic Publication Policy         121
Appendix J to Chapter 7--Direct USAID Contracts With a 
  Cooperating Country National and With a Third Country 
  National for Personal Services Abroad.....................         122

[[Page 5]]

                          SUBCHAPTER A_GENERAL

             PART 701_FEDERAL ACQUISITION REGULATION SYSTEM

               Subpart 701.1_Purpose, Authority, Issuance

Sec.

Sec. 701.105 OMB approval under the Paperwork Reduction Act.

  Subpart 701.3_U.S. Agency for International Development Acquisition 
                               Regulation


Sec. 701.301 Policy.

Sec. 701.303 Publication and codification.

             Subpart 701.4_Deviations from the FAR or AIDAR


Sec. 701.402 Policy.

Sec. 701.470 Procedure.

      Subpart 701.6_Career Development, Contracting Authority, and 
                            Responsibilities


Sec. 701.601 General.

Sec. 701.602-1 Authority of contracting officers in resolving audit 
          recommendations.

Sec. 701.602-3 Ratification of unauthorized commitments.

Sec. 701.603 Selection, appointment, and termination of appointment.

Sec. 701.603-70 Designation of contracting officers.

                Subpart 701.7_Determinations and Findings


Sec. 701.704 Content.

Sec. 701.707 Signatory authority.

    Authority: Sec. 621, Pub. L. 87-195, 75 Stat. 445, (22 U.S.C. 2381) 
as amended; E.O. 12163, Sept. 29, 1979, 44 FR 56673; 3 CFR, 1979 Comp., 
p. 435.

    Source: 49 FR 13236, Apr. 3, 1984, unless otherwise noted.

               Subpart 701.1_Purpose, Authority, Issuance



Sec. 701.105  OMB approval under the Paperwork Reduction Act.

    (a) The following information collection and record keeping 
requirements established by USAID have been approved by OMB, and 
assigned an OMB control number and approval/expiration dates as 
specified below:

------------------------------------------------------------------------
                                                                 Burden
                                      OMB control   Expiration    hours
            AIDAR segment                 No.          date        per
                                                                 report
------------------------------------------------------------------------
733.7003(c).........................    0412-0520   08/31/2000        40
752.209-70..........................    0412-0520   08/31/2000         4
752.219-8...........................    0412-0520   08/31/2000         1
752.245-70..........................    0412-0520   08/31/2000        .5
752.245-71..........................    0412-0520   08/31/2000         1
752.7001(a).........................    0412-0520   08/31/2000        .5
752.7001(b).........................    0412-0520   08/31/2000        .5
752.7002(j).........................    0412-0520   08/31/2000         1
752.7003............................    0412-0520   08/31/2000         8
752.7004(b)(4)......................    0412-0520   08/31/2000        .5
752.7032............................    0412-0520   08/31/2000         2
752.7033............................    0412-0536   08/31/2000         4
------------------------------------------------------------------------

    (b) The information requested by the AIDAR sections listed in 
paragraph (a) is necessary to allow USAID to prudently administer public 
funds. It lets USAID make reasonable assessments of contractor 
capabilities and responsibility of costs. Information is required in 
order for a contractor and/or its employee to obtain a benefit-usually 
taking the form of payment under a government contract.
    (c) Public reporting burden for these collections of information is 
estimated as shown in paragraph (a) of this section. The estimated 
burden includes the time for reviewing instructions, searching existing 
data sources, gathering and maintaining the data needed, and completing 
and reviewing the collection of information. Send comments regarding the 
burden estimates or any other aspects of these collections of 
information, including suggestions for

[[Page 6]]

reducing the burden, to: U.S. Agency for International (USAID), Office 
of Acquisition and Assistance, Policy Division (M/OAA/P), Room 7.08-
082U, 1300 Pennsylvania Avenue, N.W. Washington, D.C. 20523-7801; and 
Office of Management and Budget (OMB), Paperwork Reduction Project 
(0412-0520), Washington, D.C. 20503.

[59 FR 33445, June 29, 1994, as amended at 61 FR 39090, July 26, 1996; 
62 FR 40466, July 29, 1997; 64 FR 16648, Apr. 6, 1999; 72 FR 19670, Apr. 
19, 2007]

  Subpart 701.3_U.S. Agency for International Development Acquisition 
                               Regulation

    Source: 64 FR 42040, Aug. 3, 1999, unless otherwise noted.



Sec. 701.301  Policy.

    (a) Responsibility. Subject to the direction of the Administrator, 
the Director, Office of Acquisition and Assistance (``M/OAA Director'') 
is responsible for:
    (1) Developing and maintaining necessary uniform procurement 
policies, procedures, and standards;
    (2) Providing assistance to the contracting activities as 
appropriate;
    (3) Keeping the Administrator and Executive Staff fully informed on 
procurement matters which should be brought to their attention; and
    (4) All agency head duties and authorities stated in (48 CFR) FAR 
subpart 1.3, in accordance with (48 CFR) AIDAR 701.601. These 
responsibilities include but are not limited to developing, issuing, and 
maintaining the USAID Acquisition Regulation (``AIDAR'', 48 CFR chapter 
7), USAID's supplement to the Federal Acquisition Regulation (48 CFR 
Chapter 1), in coordination with the General counsel and such other 
offices as may be appropriate.
    (b) Applicability. (1) Unless a deviation is specifically authorized 
in accordance with subpart 701.4, or unless otherwise provided, the FAR 
and AIDAR apply to all contracts (regardless of currency of payment, or 
whether funds are appropriated or non-appropriated) to which USAID is a 
direct party.
    (2) At Missions where joint administrative services are arranged, 
procuring offices may apply the Department of State Acquisition 
Regulation (48 CFR chapter 6) for all administrative and technical 
support contracts except in defined areas. The Office of Administrative 
Services will furnish the defined areas and administrative guidelines 
for procurement to the overseas Missions. Administrative and local 
support services include the procurement accountability, maintenance and 
disposal of all office and residential equipment and furnishings, 
vehicles and expendable supplies purchased with administrative and/or 
technical support funds, either dollars or local currency.

[64 FR 42040, Aug. 3, 1999, as amended at 72 FR 19670, Apr. 19, 2007]



Sec. 701.303  Publication and codification.

    (a) The AIDAR is USAID's Acquisition Regulation supplementing the 
FAR (48 CFR chapter 1) and is published as chapter 7 of Title 48, Code 
of Federal Regulations. AIDAR Circulars shall be used to promulgate 
changes to the AIDAR and shall be published in compliance with (48 CFR) 
FAR part 1.
    (b) Appendices. Significant procurement policies and procedures that 
do not correspond to or conveniently fit into the FAR system described 
in FAR 1.1 and 1.303 may be published as Appendices to the AIDAR. 
Appendices follow the main text of the AIDAR in a section entitled 
``Appendices to Chapter 7'' and contain a table of contents and the 
individual appendices identified by letter and subject title (e.g., 
``Appendix D--Direct USAID Contracts with a U.S. Citizen or a U.S. 
Resident Alien for Personal Services Abroad'').
    (c) Only the M/OAA Director has the authority to issue internal 
agency guidance applicable to all agency contracts. The heads of the 
various USAID contracting activities (see subparts 701.6 and 702.10) may 
issue operating instructions and procedures consistent with the FAR, 
AIDAR, and other Agency regulations, policies, and procedures for 
application within their organizations. One copy of each such issuance 
shall be forwarded to the Office of Acquisition and Assistance, Policy 
Division (M/OAA/POL). Insofar as possible,

[[Page 7]]

such material will be numerically keyed to the AIDAR.

[64 FR 42040, Aug. 3, 1999, as amended at 72 FR 19670, Apr. 19, 2007]

             Subpart 701.4_Deviations from the FAR or AIDAR



Sec. 701.402  Policy.

    It is the policy of USAID that deviation from the mandatory 
requirements of the FAR and AIDAR shall be kept at a minimum and be 
granted only if it is essential to effect necessary procurement and when 
special and exceptional circumstances make such deviation clearly in the 
best interest of the Government.



Sec. 701.470  Procedure.

    (a) Deviation from the FAR or AIDAR affecting one contract or 
transaction.
    (1) Deviations which affect only one contract or procurement will be 
made only after prior approval by the head of the contracting activity. 
Deviation requests containing the information listed in paragraph (c) of 
this section shall be submitted sufficiently in advance of the effective 
date of such deviation to allow adequate time for consideration and 
evaluation by the head of the contracting activity.
    (2) Requests for such deviations may be initiated by the responsible 
USAID contracting officer who shall obtain clearance and approvals as 
may be required by the head of the contracting activity. Prior to 
submission of the deviation request to the head of the contracting 
activity for approval, the contracting officer shall obtain written 
comments from the Office of Acquisition and Assistance, Policy Division 
(M/OAA/P), hereinafter referred to as ``M/OAA/P''. The M/OAA/P shall 
normally be allowed 10 working days prior to the submission of the 
deviation request to the head of the contracting activity to review the 
request and to submit comments. If the exigency of the situation 
requires more immediate action, the requesting office may arrange with 
the M/OAA/P for a shorter review period. In addition to a copy of the 
deviation request, the M/OAA/P shall be furnished any background or 
historical data which will contribute to a more complete understanding 
of the deviation. The comments of the M/OAA/P shall be made a part of 
the deviation request file which is forwarded to the head of the 
contracting activity.
    (3) Coordination with the Office of General Counsel, as appropriate, 
should also be effected prior to approval of a deviation by the head of 
the contracting activity.
    (b) Class deviations from the FAR or AIDAR: Class deviations are 
those which affect more than one contract or contractor.
    (1) Class deviations from the AIDAR will be processed in the same 
manner as prescribed in paragraph (a) of this section. Individual heads 
of contracting activities have authority to approve class deviations 
affecting only contracts within their own contracting activities, except 
that the Director, M/OAA, has authority to approve class deviations that 
affect more than one contracting activity.
    (2) Class deviations from the FAR shall be considered jointly by 
USAID and the Chairperson of the Civilian Agency Acquisition Council (C/
CAAC) (FAR 1.404) unless, in the judgement of the head of the 
contracting activity, after due consideration of the objective of 
uniformity, circumstances preclude such consultation. The head of the 
contracting activity shall certify on the face of the deviation the 
reason for not coordinating with the C/CAAC. In such cases, the M/OAA/P, 
shall be responsible for notifying the C/CAAC of the class deviation.
    (3) Class deviations from the FAR shall be processed as follows:
    (i) The request shall be processed in the same manner as paragraph 
(a) of this section, except that the M/OAA/P, shall be allowed 15 
working days prior to the submission of the deviation request to the 
head of the contracting activity to effect the necessary coordination 
with the C/CAAC and to submit comments. If the exigency of the situation 
requires more immediate action, the requesting office may arrange with 
the M/OAA/P for a shorter review and coordination period. The comments 
of the C/CAAC and the M/OAA/P shall be made a part of the deviation 
request

[[Page 8]]

file which is forwarded to the head of the contracting activity.
    (ii) The request shall be processed in the same manner as paragraph 
(a) of this section if the request is not being jointly considered by 
USAID and the C/CAAC.
    (4) Deviations involving basic agreements or other master type 
contracts are considered to involve more than one contract.
    (5) Unless the approval is sooner rescinded, class deviations shall 
expire 2 years from the date of approval provided that deviation 
authority shall continue to apply to contracts or task orders which are 
active at the time the class deviation expires. Authority to continue 
the use of such deviation beyond 2 years may be requested in accordance 
with the procedures prescribed in paragraph (a) of this section.
    (6) Expiration dates shall be shown on all class deviations.
    (c) Requests for deviation shall contain a complete description of 
the deviation, the effective date of the deviation, the circumstances in 
which the deviation will be used, a specific reference to the regulation 
being deviated from, an indication as to whether any identical or 
similar deviations have been approved in the past, a complete 
justification of the deviation including any added or decreased cost to 
the Government, the name of the contractor, and the contract or task 
order number.
    (d) Register of deviations: Separate registers shall be maintained 
by the procuring activities of the deviations granted from the FAR and 
AIDAR. Each deviation shall be recorded in its appropriate register and 
shall be assigned a control number as follows: the symbol of the 
procuring activity, the abbreviation ``DEV'', the fiscal year, the 
serial number [issued in consecutive order during each fiscal year] 
assigned to the particular deviation and the suffix ``c'' if it is a 
class deviation, e.g. CM-DEV-85-1, CM-DEV-85-2c. The control number 
shall be embodied in the document authorizing the deviation and shall be 
cited in all references to the deviation.
    (e) Central record of deviations: Copies of approved deviations 
shall be furnished promptly to the M/OAA/P, who shall be responsible for 
maintaining a central record of all deviations that are granted.
    (f) Semiannual report of class deviations:
    (1) USAID contracting officers shall submit a semiannual report to 
the M/OAA/P of all contract actions effected under class deviations to 
the FAR and AIDAR which have been approved pursuant to paragraph (b) of 
this section.
    (2) The report shall contain the applicable deviation control 
number, the contractor's name, contract number and task order number (if 
appropriate).
    (3) The report shall cover the 6-month periods ending June 30 and 
December 31, respectively, and shall be submitted within 20 working days 
after the end of the reporting period.

[49 FR 13236, Apr. 3, 1984, as amended at 50 FR 50302, Dec. 10, 1985; 55 
FR 6802, Feb. 27, 1990; 56 FR 67224, Dec. 30, 1991; 59 FR 33445, June 
29, 1994; 61 FR 39090, July 26, 1996; 72 FR 19670, Apr. 19, 2007]

      Subpart 701.6_Career Development, Contracting Authority, and 
                            Responsibilities



Sec. 701.601  General

    (a)(1) Pursuant to the delegations in ADS 103.5.10, the M/OAA 
Director is authorized to act as the Head of the Agency for all purposes 
described in the Federal Acquisition Regulation (FAR, 48 CFR Chapter 1), 
except for the authority in (48 CFR) FAR sections 6.302-7(a)(2), 6.302-
7(c)(1), 17.602(a), 19.201(c), 27.306(a), 27.306(b), and 30.201-5, or 
where the ``head of the agency'' authority is expressly not delegable 
under the FAR or AIDAR. Further, the M/OAA Director is responsible for 
implementing the procurement related aspects of the Foreign Assistance 
Act, Executive Order 11223, the Office of Federal Procurement Policy 
Act, and other statutory and Executive Branch procurement policies and 
requirements applicable to USAID operations, except for those 
authorities and responsibilities delegated to the Procurement Executive 
as specified in ADS 103.5.10f.
    (2) The M/OAA Director has specified authority to:
    (i) Select and appoint contracting officers and terminate their 
appointments in accordance with section 1.603

[[Page 9]]

of the Federal Acquisition Regulation; and
    (ii) Exercise in person or by delegation the authorities stated in 
subpart 1.4 of the Federal Acquisition Regulation with regard to 
deviations from that regulation.
    (b) Except as otherwise prescribed, the head of each contracting 
activity (as defined in 702.170) is responsible for the procurement of 
supplies and services under or assigned to the procurement cognizance of 
his or her activity. The heads of USAID contracting activities are 
vested with broad authority to carry out the programs and activities for 
which they are responsible. This authority includes authority to execute 
contracts and the establishment of procurement policies, procedures, and 
standards appropriate for their programs and activities, subject to 
government-wide and USAID requirements and restrictions, such as those 
found at 701.376-4 and particularly 701.603-70, the USAID policy 
regarding the direct-hire status of contracting officers.
    (c) The authority of heads of contracting activities to execute 
contracts is limited as follows:
    (1) Director, Office of U.S. Foreign Disaster Assistance. Authority 
to execute contracts for disaster relief purposes during the first 72 
hours of a disaster in a cumulative total amount not to exceed $500,000. 
Authority to execute simplified acquisitions up to $50,000 at any time. 
May issue warrants for simplified acquisitions up to $50,000 to 
qualified individuals on his or her staff.
    (2) Director, Center for Human Capacity Development (G/HCD). 
Authority to execute simplified acquisitions up to $10,000. Unlimited 
authority for procuring participant training based on published catalog 
prices, using M/OAA/E approved forms. May issue warrants for simplified 
acquisitions up to $10,000 to qualified individuals on his or her staff.
    (3) Overseas heads of contracting activities. Authority to sign 
contracts where the cumulative amount of the contract, as amended, does 
not exceed $250,000 (or local currency equivalent) for personal services 
contracts or $100,000 (or local currency equivalent) for all other 
contracts. May issue warrants for simplified acquisitions up to $50,000 
to qualified individuals on his or her staff.

[53 FR 4980, Feb. 19, 1988, as amended at 55 FR 6802, Feb. 27, 1990; 56 
FR 67224, Dec. 30, 1991; 58 FR 8702, Feb. 17, 1993; 59 FR 33445, June 
29, 1994; 60 FR 11912, Mar. 3, 1995; 61 FR 39090, July 26, 1996; 62 FR 
40466, July 29, 1997; 64 FR 42041, Aug. 3, 1999; 72 FR 19670, Apr. 19, 
2007]



Sec. 701.602-1  Authority of contracting officers in resolving audit 

recommendations.

    With the exception of termination settlements subject to part 749, 
Termination of Contracts, contracting officers shall have the authority 
to negotiate and enter into settlerments with contractors for costs 
questioned under audit reports, or to issue a contracting officer's 
final decision pursuant to the disputes clauses (in the event that 
questioned costs are not settled by negotiated agreement) in accordance 
with ADS Chapter 591.5.20. The negotiated settlement or final decision 
shall be final, subject only to a contractor's appeal, either under the 
provisions of the Contract Disputes Act of 1978, as amended (41 U.S.C. 
601-613), or to the courts. Policies and procedures for resolving audit 
recommendations are in accordance with ADS Chapters 591 and 592.

[62 FR 40466, July 29, 1997]



Sec. 701.602-3  Ratification of unauthorized commitments.

    (a) [Reserved]
    (b) Policy. (1) [Reserved]
    (2) In order to maintain management oversight and controls on 
unauthorized commitments, authority to ratify unauthorized commitments 
within USAID is reserved to the M/OAA Director.

[53 FR 6829, Mar. 3, 1988, as amended at 64 FR 42040, Aug. 3, 1999; 72 
FR 19670, Apr. 19, 2007]



Sec. 701.603  Selection, appointment, and termination of appointment.



Sec. 701.603-70  Designation of contracting officers.

    A contracting officer represents the U.S. Government through the 
exercise of his/her delegated authority to negotiate, sign, and 
administer contracts on behalf of the U.S. Government. The

[[Page 10]]

contracting officer's duties are sensitive, specialized, and 
responsible. In order to insure proper accountability, and to preclude 
possible security, conflict of interest, or jurisdiction problems, it is 
USAID policy that USAID contracting officers must be U.S. citizen 
direct-hire employees of the U.S. Government.

[49 FR 13236, Apr. 3, 1984, as amended at 61 FR 39091, July 26, 1996]

                Subpart 701.7_Determinations and Findings



Sec. 701.704  Content.

    There is no USAID-prescribed format or form for determinations and 
findings (D&Fs). D&Fs are to contain the information specified in FAR 
1.704 and any information which may be required by the FAR or AIDAR 
section under which the D&F is issued.

[58 FR 8702, Feb. 17, 1993, as amended at 62 FR 40466, July 29, 1997]



Sec. 701.707  Signatory authority.

    Unless otherwise specified in the FAR or AIDAR section under which 
the D&F is issued, the Contracting Officer is the signing official.

[58 FR 8702, Feb. 17, 1993]

                 PART 702_DEFINITIONS OF WORDS AND TERMS

                       Subpart 702.170_Definitions

Sec.

Sec. 702.170-1 USAID.

Sec. 702.170-2 Administrator.

Sec. 702.170-3 Contracting activities.

Sec. 702.170-4 Cooperating country.

Sec. 702.170-5 Cooperating country national (CCN).

Sec. 702.170-6 Executive agency.

Sec. 702.170-7 Foreign Assistance Act.

Sec. 702.170-8 Government, Federal, State, local and political 
          subdivisions.

Sec. 702.170-9 Head of agency.

Sec. 702.170-10 Head of the contracting activity.

Sec. 702.170-11 Mission.

Sec. 702.170-12 Overseas.

Sec. 702.170-13 Procurement Executive.

Sec. 702.170-14 [Reserved]

Sec. 702.170-15 Third country national (TCN).

Sec. 702.170-16 U.S. national (USN).

Sec. 702.170-17 Automated Directives System.

                   Subpart 702.270_Definitions Clause


Sec. 702.270-1 Definitions clause.

    Authority: Sec. 621, Pub. L. 87-195, 75 Stat. 445, (22 U.S.C. 2381) 
as amended; E.O. 12163, Sept. 29, 1979, 44 FR 56673; 3 CFR, 1979 Comp., 
p. 435.

    Source: 49 FR 13238, Apr. 3, 1984, unless otherwise noted.

                       Subpart 702.170_Definitions



Sec. 702.170-1  USAID.

    USAID means the U.S. Agency for International Development and its 
predecessor agencies, including the International Cooperation 
Administration (ICA).



Sec. 702.170-2  Administrator.

    Administrator means the Administrator or Deputy Administrator of the 
U.S. Agency for International Development.



Sec. 702.170-3  Contracting activities.

    The contracting activities within USAID are:
    (a) The USAID/Washington activities. The contracting activities 
located in Washington are the Office of Acquisition and Assistance, 
Office of Foreign Disaster Assistance, and Center for Human Capacity 
Development (G/HCD). Subject to the limitations stated in 702.170-10, 
these contracting activities are responsible for procurement related to 
programs and activities for their areas. The Office of Acquisition and 
Assistance is responsible for procurements which do not fall within the 
responsibility of other contracting activities, or which are otherwise 
assigned to it.
    (b) The overseas field contracting activities. Each USAID Mission or 
post overseas is a contracting activity, responsible for procurement 
related to its programs and activities, subject to the limitations in 
702.170-10(b), which sets forth the contracting authority for Mission 
Directors and principal USAID officers at posts.

[50 FR 16085, Apr. 24, 1985, as amended at 50 FR 40528, Oct. 4, 1985; 50 
FR 50302, Dec. 10, 1985; 51 FR 20651, June 6, 1986; 56 FR 67224, Dec. 
30, 1991; 61 FR 39091, July 26, 1996; 62 FR 40466, July 29, 1997; 72 FR 
19670, Apr. 19, 2007]

[[Page 11]]



Sec. 702.170-4  Cooperating country.

    Cooperating country means a foreign country in which there is a 
program or activity administered by USAID.



Sec. 702.170-5  Cooperating country national (CCN).

    Cooperating country national (CCN) means an individual who is a 
cooperating country citizen or a non-cooperating country citizen 
lawfully admitted for permanent residence in the cooperating country.



Sec. 702.170-6  Executive agency.

    Executive agency includes the U.S. Agency for International 
Development (USAID) and its predecessor agencies, including the 
International Cooperation Administration.



Sec. 702.170-7  Foreign Assistance Act.

    Foreign Assistance Act means the Foreign Assistance Act of 1961, as 
amended (22 U.S.C., Chapter 32).



Sec. 702.170-8  Government, Federal, State, local and political 

subdivisions.

    As used in the FAR and AIDAR, these terms do not refer to foreign 
entities except as otherwise stated.



Sec. 702.170-9  Head of agency.

    Head of agency means, for USAID, the Administrator, and the Deputy 
Administrator, and in accordance with the responsibilities and 
limitations set forth in 701.601(a)(1), the M/OAA Director.

[50 FR 52780, Dec. 26, 1985, as amended at 64 FR 42041, Aug. 3, 1999; 72 
FR 19670, Apr. 19, 2007]



Sec. 702.170-10  Head of the contracting activity.

    (a) The heads of USAID contracting activities are listed below. The 
limits of their contracting authority are set forth in 701.601.
    (1) USAID/Washington Heads of Contracting Activities:
    (i) Director, Office of Acquisition and Assistance;
    (ii) Director, Office of U.S. Foreign Disaster Assistance; and
    (iii) Director, Center for Human Capacity Development (G/HCD).
    (2) Overseas Heads of Contracting Activities: Each Mission Director 
or principal USAID officer at post (e.g. USAID Representative, USAID 
Affairs Officer, etc.)
    (b) Individuals serving in the positions listed in (a)(1) and (a)(2) 
of this section in an ``Acting'' capacity may exercise the authority 
delegated to that position.

[53 FR 4980, Feb. 19, 1988, as amended at 56 FR 67224, Dec. 30, 1991; 61 
FR 39091, July 26, 1996; 62 FR 40466, July 29, 1997; 72 FR 19670, Apr. 
19, 2007]



Sec. 702.170-11  Mission.

    Mission means the USAID mission or the principal USAID office or 
representative (including an embassy designated to so act) in a foreign 
country in which there is a program or activity administered by USAID.



Sec. 702.170-12  Overseas.

    Overseas means outside the United States, its possessions, and 
Puerto Rico.



Sec. 702.170-13  Procurement Executive.

    ``Procurement Executive'' is synonymous with ``Senior Procurement 
Executive'' as defined in FAR 2.101 and means the USAID official who is 
responsible for the management direction of USAID's assistance and 
acquisition (``A&A'') system, as so delegated and more fully described 
in ADS 103.5.10f.

[64 FR 42041, Aug. 3, 1999]



Sec. 702.170-14  [Reserved]



Sec. 702.170-15  Third country national (TCN).

    Third country national (TCN) means an individual who is neither a 
cooperating country national nor a U.S. national, but is a citizen of a 
country included in Geographic Code 935 (see 22 CFR 228.3).

[49 FR 13238, Apr. 3, 1984. Redesignated at 50 FR 16086, Apr. 24, 1985, 
as amended at 62 FR 40466, July 29, 1997]



Sec. 702.170-16  U.S. national (USN).

    U.S. national (USN) means an individual who is a U.S. citizen or a 
non-

[[Page 12]]

U.S. citizen lawfully admitted for permanent residence in the United 
States.

[49 FR 13238, Apr. 3, 1984. Redesignated at 50 FR 16086, Apr. 24, 1985]



Sec. 702.170-17  Automated Directives System.

    ``Automated Directives System'' (``ADS'') sets forth the Agency's 
policies and essential procedures, as well as supplementary 
informational references. It contains six functional series, interim 
policy updates, valid USAID handbook chapters, a resource library, and a 
glossary. References to ``ADS'' throughout this chapter 7 are references 
to the Automated Directives System. Procurement-related sections of this 
system are accessible to the general public at the following internet 
address: http://www.info.usaid.gov/pubs/ads. The entire ADS is available 
on the ADS Compact Disk (ADS CD), which may be purchased from the Agency 
at cost by submitting a completed ADS CD order form. To request a fax 
copy of the ADS CD order form, send an e-mail with your fax number to 
ADS@USAID.GOV.

[64 FR 42041, Aug. 3, 1999]

                   Subpart 702.270_Definitions Clause



Sec. 702.270-1  Definitions clause.

    Use the appropriate clause in 752.202-1, in addition to the clause 
in FAR 52.202-1.

 PART 703_IMPROPER BUSINESS PRACTICES AND PERSONAL CONFLICTS OF INTEREST

                        Subpart 703.1_Safeguards

Sec.

Sec. 703.104-5 Disclosure, protection, and marking of proprietary and 
          source information.

Sec. 703.104-10.1 Violations or possible violations.

    Authority: Sec. 621, Pub. L. 87-195, 75 Stat. 445, (22 U.S.C. 2381) 
as amended; E.O. 12163, Sept. 29, 1979, 44 FR 56673; 3 CFR, 1979 Comp., 
p. 435.

                        Subpart 703.1_Safeguards



Sec. 703.104-5  Disclosure, protection, and marking of proprietary and 

source information.

    A Contracting Office may authorize release of proprietary and/or 
source selection information outside the Government for evaluation 
purposes pursuant to FAR 15.305(c) and (AIDAR) 48 CFR 715.305(c).

[64 FR 16648, Apr. 6, 1999]



Sec. 703.104-10.1  Violations or possible violations.

    Requests for concurrence under paragraph (a)(1) of FAR 3.104-10 
shall be forwarded to one level above the Contracting Officer.

[64 FR 16648, Apr. 6, 1999]

                     PART 704_ADMINISTRATIVE MATTERS

    Subpart 704.4_Safeguarding Classified Information Within Industry

Sec.

Sec. 704.404 Contract clause.

Subpart 704.8--Contract Files [Reserved]

    Authority: Sec. 621, Pub. L. 87-195, 75 Stat. 445, (22 U.S.C. 2381) 
as amended; E.O. 12163, Sept. 29, 1979, 44 FR 56673; 3 CFR, 1979 Comp., 
p. 435.

    Subpart 704.4_Safeguarding Classified Information Within Industry



Sec. 704.404  Contract clause.

    If the contract involves access to classified (``Confidential'', 
``Secret'', or ``Top Secret''), or administratively controlled 
(``Sensitive But Unclassified'') information, use the contract clause in 
752.204-2.

[49 FR 13239, Apr. 3, 1984. Redesignated at 54 FR 16122, Apr. 21, 1989, 
as amended at 62 FR 40467, July 29, 1997]

Subpart 704.8--Contract Files [Reserved]

[[Page 13]]

                    SUBCHAPTER B_ACQUISITION PLANNING

                  PART 705_PUBLICIZING CONTRACT ACTIONS

Sec.

Sec. 705.002 Policy.

           Subpart 705.2_Synopsis of Proposed Contract Actions


Sec. 705.202 Exceptions.

Sec. 705.207 Preparation and transmittal of certain synopses.

Sec. 705.502 Authority.

    Authority: Sec. 621, Pub. L. 87-195, 75 Stat. 445 (22 U.S.C. 2381), 
as amended; E.O. 12163, Sept. 29, 1979, 44 FR 56673, 3 CFR, 1979 Comp., 
p. 435; 40 U.S.C. 474.



Sec. 705.002  Policy.

    (a) USAID's Office of Small and Disadvantaged Business Utilization 
maintains an USAID Consultant Registry Information System (ACRIS), which 
serves as a reference source and an indication of a prospective 
contractor's interest in performing USAID contracts. Prospective 
contractors are invited to file the appropriate form (Standard Forms 
254/255, Architect-Engineer and Related Services Questionnaire; or USAID 
Form 1420-50, USAID Consultant Registry Information System (ACRIS) 
Organization and Individual Profile) with USAID's Office of Small and 
Disadvantaged Business Utilization (Department of State, U.S. Agency for 
International Development, Washington, DC 20523-1414--Attention: Office 
of Small and Disadvantaged Business Utilization). These forms should be 
updated annually.
    (b) USAID policy is to include all Commerce Business Daily Notices 
and solicitations on the Internet.

[50 FR 40976, Oct. 8, 1985, and 50 FR 51396, Dec. 17, 1985, as amended 
at 52 FR 21058, June 4, 1987; 56 FR 2699, Jan. 24, 1991; 62 FR 40467, 
July 29, 1997]

           Subpart 705.2_Synopsis of Proposed Contract Actions



Sec. 705.202  Exceptions.

    (a) [Reserved]
    (b) The head of the U.S. Agency for International Development has 
determined 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 for 
contract actions described in 706.302-70(b)(1) through (b)(3).
    (c) Advance notice is not required for contract actions undertaken 
in accordance with 706.302-71.

[51 FR 42845, Nov. 26, 1986, as amended at 54 FR 28069, July 5, 1989; 55 
FR 8469, Mar. 8, 1990; 55 FR 39154, Sept. 25, 1990; 56 FR 27208, June 
13, 1991; 57 FR 5235, Feb. 13, 1992]



Sec. 705.207  Preparation and transmittal of certain synopses.

    The responsible contracting officer shall notify USAID's Office of 
Small and Disadvantaged Business Utilization (OSDBU) at least seven 
business days before publicizing a solicitation in the Commerce Business 
Daily for an acquisition:
    (a) Which is to be funded from amounts referred to in section 
706.302-71(a); and
    (b) Which is expected to exceed $100,000.

For exceptions, see 726.7005.

[56 FR 27208, June 13, 1991, as amended at 62 FR 40467, July 29, 1997]



Sec. 705.502  Authority.

    (a) The M/OAA Director, acting as head of the Agency under the 
authority of 701.601(a)(1), hereby authorizes USAID contracting officers 
to place paid advertisements and notices in newspapers and periodicals. 
Contracting officers shall document the contract file to reflect 
consideration of the requirements of (48 CFR) FAR 5.101(b)(4).

[64 FR 5006, Feb. 2, 1999, as amended at 64 FR 42042, Aug. 3, 1999; 72 
FR 19670, Apr. 19, 2007]

                    PART 706_COMPETITION REQUIREMENTS

Sec.

Sec. 706.003 Definitions.

Subparts 706.1-706.2 [Reserved]

[[Page 14]]

           Subpart 706.3_Other Than Full and Open Competition


Sec. 706.302-5 Authorized or required by statute.

Sec. 706.302-70 Impairment of foreign aid programs.

Sec. 706.302-71 Small disadvantaged businesses.

Sec. 706.303-1 Requirements.

                   Subpart 706.5_Competition Advocates


Sec. 706.501 Requirement.

    Authority: Sec. 621, Pub. L. 87-195, 75 Stat. 445 (22 U.S.C. 2381), 
as amended; E.O. 12163, Sept. 29, 1979, 44 FR 56673, 3 CFR, 1979 Comp., 
p. 435; 40 U.S.C. 474.



Sec. 706.003  Definitions.

    Procuring activity means ``contracting activity'', as defined in 
702.170-3.

[50 FR 40528, Oct. 4, 1985]

Subparts 706.1-706.2 [Reserved]

           Subpart 706.3_Other Than Full and Open Competition



Sec. 706.302-5  Authorized or required by statute.

    Certain annual appropriations acts authorize USAID to contract with 
certain disadvantaged enterprises using other than full and open 
competition. The provisions implementing this authority are set forth in 
706.302-71 and part 726.

[58 FR 8702, Feb. 17, 1993, as amended at 62 FR 40467, July 29, 1997]



Sec. 706.302-70  Impairment of foreign aid programs.

    (a) Authority. (1) Citation: 40 U.S.C. 474.
    (2) Full and open competition need not be obtained when it would 
impair or otherwise have an adverse effect on programs conducted for the 
purposes of foreign aid, relief, and rehabilitation.
    (b) Application. This authority may be used for:
    (1) An award under section 636(a)(3) of the Foreign Assistance Act 
of 1961, as amended, involving a personal services contractor serving 
abroad;
    (2) An award of $250,000 or less by an overseas contracting 
activity;
    (3)(i) An award for which the Assistant Administrator responsible 
for the project or program makes a formal written determination, with 
supporting findings, that compliance with full and open competition 
procedures would impair foreign assistance objectives, and would be 
inconsistent with the fulfillment of the foreign assistance program; or
    (ii) Awards for countries, regions, projects, or programs for which 
the Administrator of USAID makes a formal written determination, with 
supporting findings, that compliance with full and open competition 
procedures would impair foreign assistance objectives, and would be 
inconsistent with the fulfillment of the foreign assistance program.
    (4) Awards under AIDAR 715.370-1 (Title XII selection procedure--
general) or 715.370-2 (Title XII selection procedure--collaborative 
assistance).
    (5) An award for the continued provision of highly specialized 
services when award to another resource would result in substantial 
additional costs to the government or would result in unacceptable 
delays.
    (c) Limitations. (1) Offers shall be requested from as many 
potential offerors as is practicable under the circumstances. While the 
authority at 706.302-70(b)(5) is for use when the contracting officer 
determines that the incumbent contractor is the only practicable, 
potential offeror, the requirement to publicize the intended award, as 
required in FAR 5.201, still applies.
    (2) The contract file must include appropriate explanation and 
support justifying the award without full and open competition, as 
provided in FAR 6.303, except that determinations made under 706.302-
70(b)(3) will not be subject to the requirement for contracting officer 
certification or to approvals in accord with FAR 6.304.
    (3) The authority in 706.302-70(b)(3)(i) shall be used only when no 
other authority provided in FAR 6.302 or AIDAR 706.302 is suitable. The 
specific foreign assistance objective which would be impaired must be 
identified and explained in the written determination and finding. Prior 
consultation with the Agency Competition Advocate (see 706.501) is 
required before executing the written determination and finding, and 
this consultation must

[[Page 15]]

be reflected in the determination and finding.
    (4) Use of the authority in 706.302-70(b)(5) for proposed follow-on 
amendments in excess of one year or over $250,000 is subject to the 
approval of the Agency Competition Advocate. For all other follow-on 
amendments using this authority, the contracting officer's certification 
required in FAR 6.303-2(a)(12) will serve as approval.

[50 FR 40976, Oct. 8, 1985, and 50 FR 51395, Dec. 17, 1985, as amended 
at 54 FR 28069, July 5, 1989; 54 FR 46389, Nov. 3, 1989; 57 FR 5235, 
Feb. 13, 1992; 61 FR 39091, July 26, 1996; 62 FR 40467, July 29, 1997; 
64 FR 42042, Aug. 3, 1999]



Sec. 706.302-71  Small disadvantaged businesses.

    (a) Authority. (1) Citations: Sec. 579, Pub. L. 101-167 (Fiscal Year 
(FY) 1990), Sec. 567, Pub. L. 101-513 (FY 1991), Sec. 567, Pbu. L. 102-
145 (FY 1992), Sec. 562, Pub. L. 102-391 (FY 1993), Sec. 558, Pub. L. 
103-87 (FY 1994), and Sec. 555, Pub. L. 103-306 (FY 1995).
    (2) Except to the extent otherwise determined by the Administrator, 
not less than ten percent of the amounts made available through the 
appropriations cited in paragraph (a)(1) of this section for development 
assistance and for assistance for famine recovery and development in 
Africa shall be used only for activities of disadvantaged enterprises 
(as defined in 726.7002). In order to achieve its goal, USAID is 
authorized in the cited statutes to use other than full and open 
competition to award contracts to small business concerns owned and 
controlled by socially and economically disadvantaged individuals (small 
disadvantaged businesses as defined in 726.7002), historically black 
colleges and universities, colleges and universities having a student 
body of which more than 40 percent of the students are Hispanic 
Americans, and private voluntary organizations which are controlled by 
individuals who are socially and economically disadvantaged, as the 
terms are defined in 726.7002.
    (b) Application. This authority may be used only if the Agency 
determines in accordance with 726.7004 that:
    (1) The acquisition is to be funded from amounts referred to in 
paragraph (a) of this section;
    (2) Award of the acquisition to an eligible organization is 
appropriate to meet the requirement in paragraph (a)(2) of this section; 
and
    (3) After considering whether the acquisition can be made under the 
authority of section 8(a), award under section 8(a) is not practicable.
    (c) Limitations. (1) Offers shall be requested from as many 
potential offerors as is practicable under the circumstances.
    (2) Use of this authority is not subject to the requirements in FAR 
6.303 and FAR 6.304, provided that the contract file includes a 
certification by the contracting officer stating that the procurement is 
being awarded pursuant to 706.302-71 and that the application 
requirements and limitations of 706.302-71 (b) and (c) have been 
complied with.

[56 FR 27208, June 13, 1991, as amended at 58 FR 8702, Feb. 17, 1993; 61 
FR 51235, Oct. 1, 1996; 62 FR 40467, July 29, 1997]



Sec. 706.303-1  Requirements.

    (a)-(c) [Reserved]
    (d) USAID project procurements are generally not subject to the 
Trade Agreements Acts of 1979 (see 725.403 of this chapter). To the 
extent procurements are made under the authority of FAR 6.302-3(a)(2)(i) 
or FAR 6.302-7 with Operating Expenses (OE) Funds, the Contracting 
Officer shall send a copy of the justification to the Office of the 
United States Trade Representative, 600 17th Street, NW., Washington, DC 
20506, ATTN: Director, International Procurement Policy.

[50 FR 16086, Apr. 24, 1985]

                   Subpart 706.5_Competition Advocates



Sec. 706.501  Requirement.

    The USAID Administrator delegated the authority to designate the 
agency competition advocate and a competition advocate for each agency 
procuring activity (see 706.003 of this part) to the M/OAA Director. The 
M/OAA Director, under the Administrator's delegation, has designated the 
M/OAA Deputy Director for Policy, Evaluation and Support as the Agency's 
competition advocate and the deputy head of each

[[Page 16]]

contracting activity as the competition advocate for each activity. The 
competition advocate for M/OAA is the Deputy Director for Operations. If 
there is no deputy, the head of the contracting activity is designated 
the competition advocate for that activity. The competition advocate's 
duties may not be redelegated, but can be exercised by persons serving 
as acting deputy (or acting head) of the contracting activity. For 
definitions of contracting activity and head of contracting activity, 
see 702.170-3 and 702.170-10, respectively.

[59 FR 33446, June 29, 1994, as amended at 64 FR 5006, Feb. 2, 1999; 64 
FR 42040, Aug. 3, 1999; 72 FR 19670, Apr. 19, 2007]

                      PART 707_ACQUISITION PLANNING

Subpart 707.1--Acquisition Plans [Reserved]

                   PART 709_CONTRACTOR QUALIFICATIONS

Sec.

          Subpart 709.4_Debarment, Suspension and Ineligibility


Sec. 709.403 Definitions.

           Subpart 709.5_Organizational Conflicts of Interest


Sec. 709.503 Waiver.

Sec. 709.507-2 Contract clause.

    Authority: Sec. 621, Pub. L. 87-195, 75 Stat. 445, (22 U.S.C. 2381) 
as amended; E.O. 12163, Sept. 29, 1979, 44 FR 56673; 3 CFR, 1979 Comp., 
p. 435.

          Subpart 709.4_Debarment, Suspension and Ineligibility



Sec. 709.403  Definitions.

    Debarring official in USAID is the M/OAA Director.
    Suspending official in USAID is the M/OAA Director.

[62 FR 40467, July 29, 1997, as amended at 64 FR 42040, Aug. 3, 1999; 72 
FR 19670, Apr. 19, 2007]

           Subpart 709.5_Organizational Conflicts of Interest



Sec. 709.503  Waiver.

    For purposes of approving waivers or further delegating the 
authority to approve waivers pursuant to FAR 9.503, the M/OAA Director 
is the Agency head (see AIDAR 701.601(a)(1)). The M/OAA Director hereby 
delegates the authority to approve waivers pursuant to FAR 9.503 to the 
heads of USAID contracting activities, as defined in AIDAR 702.170-10.

[64 FR 42042, Aug. 3, 1999, as amended at 72 FR 19670, Apr. 19, 2007]



Sec. 709.507-2  Contract clause.

    (a)-(b) [Reserved]
    (c) In order to avoid problems from organizational conflicts of 
interest that may be discovered after award of a contract, the clause 
found at 752.209-71 shall be inserted in all contracts whenever the 
solicitation or resulting contract or both include a provision in 
accordance with (48 CFR) FAR 9.507-1, or a clause in accordance with (48 
CFR) FAR 9.507-2, establishing a restraint on the contractor's 
eligibility for future contracts.

[58 FR 42255, Aug. 9, 1993, as amended at 64 FR 5006, Feb. 2, 1999]

                    PART 711_DESCRIBING AGENCY NEEDS

Sec.

Sec. 711.002-70 Metric system waivers.

Sec. 711.002-71 Solicitation provisions and contract clauses.

    Authority: Sec. 621, Pub. L. 87-195, 75 Stat. 445, (22 U.S.C. 2381) 
as amended; E.O. 12163, Sept. 29, 1979, 44 FR 56673; 3 CFR, 1979 Comp., 
p. 435.



Sec. 711.002-70  Metric system waivers.

    (a) Criteria. The FAR 11.002(b) requirement to use the metric system 
of measurement for specifications and quantitative data that are 
incorporated in or required by USAID contracts may be waived when USAID 
determines in writing that such usage is impractical or is likely to 
cause U.S. firms to experience significant inefficiencies or the loss of 
markets.

[[Page 17]]

    (b) Authorization. (1) The USAID Metric Executive (as designated in 
ADS chapter 323), the contracting officer, and the USAID official who 
approves the procurement requirement are authorized to waive the metric 
requirement for one of the above reasons. The USAID Metric Executive is 
authorized to overrule a decision to grant a waiver, or to nullify a 
blanket waiver made by another approving official so long as a 
contractor's rights under an executed contract are not infringed upon.
    (2) A blanket waiver for a class of multiple transactions may be 
issued for a term not to exceed three years.
    (3) When a waiver will be based upon the adverse impact on U.S. 
firms, clearance from the USAID Metric Executive and the Office of Small 
and Disadvantaged Business Utilization (SDB) will be obtained prior to 
authorization.
    (c) Records and reporting. (1) The basis for each waiver and any 
plans to adapt similar requirements to metric specifications in future 
procurements should be documented in the contract file.
    (2) Each procurement activity will maintain a log of the waivers 
from the metric requirements which are authorized for its procurements. 
The logs shall list the commodity/service being procured, total dollar 
value of the procured item(s), waiver date, authorizing official, basis 
for waiver, and USAID actions that can promote metrication and lessen 
the need for future waivers.
    (3) Within 30 days of the closing of each fiscal year, each USAID/W 
procurement activity and each Mission will submit a copy of the metric 
waiver log for the year to the USAID Metric Executive. (Mission logs are 
to be consolidated in a Mission report for the procurement activity and 
for the nonprocurement activities maintaining such logs under the USAID 
Metric Transition Plan.) Repetitive purchases of commercially produced 
and marketed items and classes of items may be consolidated in reporting 
procurements that do not exceed $10,000 cumulatively during the 
reporting period.

[57 FR 23321, June 3, 1992, as amended at 59 FR 33446, June 29, 1994. 
Redesignated and amended at 61 FR 39091, July 26, 1996. Redesignated and 
amended at 62 FR 40467, July 29, 1997]



Sec. 711.002-71  Solicitation provisions and contract clauses.

    The contracting officer shall insert the clause at 752.211-70 in all 
USAID-direct solicitations and contracts.

[57 FR 23321, June 3, 1992. Redesignated and amended at 61 FR 39091, 
July 26, 1996]

[[Page 18]]

           SUBCHAPTER C_CONTRACTING METHODS AND CONTRACT TYPES

               PART 713_SIMPLIFIED ACQUISITION PROCEDURES

Sec.

Sec. 713.000 Scope of part.

                          Subpart 713.1_General


Sec. 713.101 Definitions.

    Authority: Sec. 621, Pub. L. 87-195, 75 Stat. 445, (22 U.S.C. 2381) 
as amended; E.O. 12163, Sept. 29, 1979, 44 FR 56673; 3 CFR 1979 Comp., 
p. 435.

    Source: 61 FR 39091, July 26, 1996, unless otherwise noted.



Sec. 713.000  Scope of part.

    The simplified acquisition threshold applies to the cost of supplies 
and services, exclusive of the cost of transportation and other 
accessorial costs if their destination is outside the United States.

                          Subpart 713.1_General



Sec. 713.101  Definitions.

    Accessorial costs means the cost of getting supplies or services to 
their destination in the cooperating country (and the travel costs of 
returning personnel to the U.S. or other point of hire). It does not 
include costs such as allowances or differentials related to maintaining 
personnel at post which are to be considered as part of the base costs 
within the simplified acquisition threshold.

                         PART 714_SEALED BIDDING

           Subpart 714.4_Opening of Bids and Award of Contract

Sec.

Sec. 714.406-3 Other mistakes disclosed before award.

Sec. 714.406-4 Disclosure of mistakes after award.

    Authority: Sec. 621, Pub. L. 87-195, 75 Stat. 445, (22 U.S.C. 2381) 
as amended; E.O. 12163, Sept. 29, 1979, 44 FR 56673; 3 CFR, 1979 Comp., 
p. 435.

           Subpart 714.4_Opening of Bids and Award of Contract



Sec. 714.406-3  Other mistakes disclosed before award.

    The M/OAA Director is the designated central authority to make the 
determinations described in FAR 14.406-3.

[49 FR 13240, Apr. 3, 1984, as amended at 54 FR 46389, Nov. 3, 1989; 64 
FR 42040, Aug. 3, 1999; 72 FR 19670, Apr. 19, 2007]



Sec. 714.406-4  Disclosure of mistakes after award.

    The M/OAA Director is the designated central authority to make the 
determinations described in FAR 14.406-4.

[49 FR 13240, Apr. 3, 1984, as amended at 64 FR 42040, Aug. 3, 1999; 72 
FR 19670, Apr. 19, 2007]

                   PART 715_CONTRACTING BY NEGOTIATION

                     Subpart 715.3_Source Selection

Sec.

Sec. 715.303 Responsibilities.

Sec. 715.303-70 Responsibilities of USAID evaluation committees.

Sec. 715.305 Proposal evaluation.

Sec. 715.370 Alternative source selection procedures.

Sec. 715.370-1 Title XII selection procedure--general.

Sec. 715.370-2 Title XII selection procedure--collaborative assistance.

                   Subpart 715.6_Unsolicited Proposals


Sec. 715.602 Policy.

Sec. 715.604 Agency points of contact.

    Authority: Sec. 621, Pub. L. 87-195, 75 Stat. 445 (22 U.S.C. 2381) 
as amended; E.O. 12163, Sept. 29, 1979, 44 FR 56673; 3 CFR, 1979 Comp., 
p. 435.

    Source: 49 FR 13240, Apr. 3, 1984, unless otherwise noted.

[[Page 19]]

                     Subpart 715.3_Source Selection



Sec. 715.303  Responsibilities.



Sec. 715.303-70  Responsibilities of USAID evaluation committees.

    (a) Establishment and composition of USAID evaluation committees. A 
technical evaluation committee shall be established for each proposed 
procurement. In each case, the committee shall be composed of a chair 
representing the cognizant technical office, a representative of the 
contracting office (who shall be a non-voting member of the committee), 
and representatives from other concerned offices as appropriate.
    (b) Technical evaluation procedures. (1) The contracting officer 
will receive all proposals and provide to the chair a listing and copies 
of the technical proposals and instructions for conducting the 
evaluation.
    (2) The chair will promptly call a meeting of the committee to 
evaluate the proposals received. The evaluation shall be based on the 
evaluation factors set forth in the solicitation document.
    (3) The chair shall prepare and provide to the Contracting Officer 
written documentation summarizing the results of the evaluation of each 
proposal, including an assessment of past performance information in 
accordance with FAR 15.305(a)(2). The documentation shall include 
narrative justification of the evaluation results.
    (4) The contracting officer is responsible for reviewing the 
documentation justifying the evaluation results to determine that it is 
adequate and complete. The contracting officer shall return a 
justification determined to be inadequate to the chair for revision.
    (5) No member of the USAID evaluation committee shall hold 
discussions with any offeror before or during the USAID evaluation 
committee's proceedings, nor shall any information about the proposals 
be provided to anyone not on the committee without first obtaining the 
contracting officer's consent.

[61 FR 39091, July 26, 1996. Redesignated and amended at 64 FR 16648, 
Apr. 6, 1999]



Sec. 715.305  Proposal evaluation.

    (a)(1) [Reserved]
    (2) USAID shall use the information on offerors made available from 
the NIH Contractor Performance System to evaluate past performance. 
(Access to the system by USAID contracting office personnel is 
authorized by the USAID Past Performance Coordinator, E-mail address: 
AIDNET: Past Performance@op.spu@aidw/Internet: 
pastperformance@usaid.gov.)
    (b) A justification is to be written by the Contracting Officer and 
placed in the official file to support the decision to reject all 
proposals and to cancel the procurement.
    (c) The Contracting Officer may authorize release of proposals 
outside the Government for evaluation--
    (1) When an Evaluation Assistance Contract (EAC) is required to 
provide technical advisory or other services relating to the evaluation 
of proposals; or
    (2) When an individual other than a government employee, known as a 
Non-Government Evaluator (NGE), is selected to serve as a member of a 
USAID technical evaluation committee, the Contracting Officer shall 
obtain a signed and dated certification and agreement from each NGE and 
EAC that they will safeguard the proposals and information therein and 
that they perceive no actual or potential conflict of interests. (An 
acceptable certification appears under ADS Chapter 302).

[64 FR 16648, Apr. 6, 1999; 64 FR 25405, May 11, 1999, as amended at 65 
FR 36642, June 9, 2000]



Sec. 715.370  Alternative source selection procedures.

    The following selection procedures may be used, when appropriate, 
for activities covered under Title XII of the Foreign Assistance Act of 
1961, as amended.

[64 FR 16649, Apr. 6, 1999]



Sec. 715.370-1  Title XII selection procedure--general.

    (a) General. The Deputy Administrator has determined, as provided in 
AIDAR 706.302-70(b)(3)(ii) that use of this Title XII source selection 
procedure is necessary so as not to impair or affect USAID's ability to 
administer Title XII of the Foreign Assistance

[[Page 20]]

Act. This determination is reflected in AIDAR 706.302-70(b)(4). This 
constitutes authority for other than full and open competition when 
selecting Title XII institutions to perform Title XII projects.
    (b) Scope of subsection. This subsection prescribes policies and 
procedures for the selection of institutions eligible under Title XII of 
the Foreign Assistance Act of 1961, as amended, to perform activities 
authorized under Title XII.
    (c) Applicability. The provisions of this subsection are applicable 
when the project office certifies that the activity is authorized under 
Title XII, and determines that use of the Title XII selection procedure 
is appropriate.
    (d) Solicitation, evaluation, and selection procedures. (1) 
Competition shall be sought among eligible Title XII institutions to the 
maximum practicable extent; this requirement shall be deemed satisfied 
when a contractor is selected under the procedures of this subsection.
    (2) The project office shall--
    (i) Prepare selection criteria for evaluation of eligible 
institutions for use in preparing the source list, determining 
predominantly qualified sources, and selecting the contractor;
    (ii) Prepare an initial list of eligible institutions considered 
qualified to perform the proposed activity;
    (iii) Provide a statement describing qualifications and areas of 
expertise considered essential, a statement of work, estimate of 
personnel requirements, special requirements (logistic support, 
government furnished property, and so forth) for the contracting 
officer's use in preparing the request for technical proposal (RFTP).
    (iv) Send a memorandum incorporating the certification and 
determination required by paragraph (c) of this section, together with 
the information required by paragraphs (d)(2) (i) through (iii) of this 
section, with the ``Action'' copy of the PIO/T to the contracting 
officer, requesting him/her to prepare and distribute the RFTP.
    (3) Upon receipt and acceptance of the project officer's request, 
the contracting officer shall prepare the RFTP. The RFTP shall contain 
sufficient information to enable an offeror to submit a responsive and 
complete technical proposal. This includes a definitive statement of 
work, an estimate of the personnel required, and special provisions 
(such as logistic support, government furnished equipment, and so 
forth), a proposed contract format, and evaluation criteria. No cost or 
pricing data will be requested or required by the RFTP. The RFTP will be 
distributed to the eligible institutions recommended by the project 
office. The RFTP will be synopsized, as required by FAR 5.201, and will 
normally allow a minimum of 60 days for preparation and submission of a 
proposal.
    (4) Upon receipt of responses to the RFTP by the contracting 
officer, an evaluation committee will be established as provided for in 
715.608 of this subpart.
    (5) The evaluation committee will evaluate all proposals in 
accordance with the criteria set forth in the RFTP, and will prepare a 
selection memorandum which shall:
    (i) State the evaluation criteria;
    (ii) List all of the eligible institutions whose proposals were 
reviewed;
    (iii) Report on the ranking and rationale therefor for all 
proposals;
    (iv) Indicate the eligible institution or institutions considered 
best qualified.
    (6) The evaluation committee will submit the selection memorandum to 
the contracting officer for review and approval.
    (7) The contracting officer will either approve the selection 
memorandum, or return it to the evaluation committee for reconsideration 
for specified reasons.
    (8) If the selection memorandum is approved, the contracting officer 
shall obtain cost, pricing, and other necessary data from the 
recommended institution or institutions and shall conduct negotiations. 
If a satisfactory contract cannot be obtained, the contracting officer 
will so advise the evaluation committee. The evaluation committee may 
then recommend an alternate institution or institutions.

[52 FR 6158, Mar. 2, 1987, as amended at 54 FR 28069, July 5, 1989; 55 
FR 6802, Feb. 27, 1990. Redesignated at 64 FR 16648, Apr. 6, 1999]

[[Page 21]]



Sec. 715.370-2  Title XII selection procedure--collaborative assistance.

    (a) General. (48 CFR) AIDAR 706.302-70(b)(4) provides authority for 
other than full and open competition when selecting Title XII 
institutions to perform Title XII activities.
    (b) Scope of subsection. This subsection prescribes policies and 
procedures for the selection of institutions eligible under Title XII of 
the Foreign Assistance Act of 1961, as amended, to perform activities 
authorized under Title XII, where USAID has determined, in accordance 
with paragraph (c) of this subsection, that use of the collaborative 
assistance contracting system is appropriate. See AIDR Appendix F (of 
this chapter)--Use of Collaborative Assistance Method for Title XII 
Activities for a more complete definition and discussion of the 
collaborative assistance method.
    (c) Determinations. The following findings and determinations must 
be made prior to initiating any contract actions under the collaborative 
assistance method:
    (1) The cognizant technical office makes a preliminary finding that 
an activity:
    (i) Is authorized by Title XII; and
    (ii) Should be classed as collaborative assistance because a 
continuing collaborative relationship between USAID, the host country, 
and the contractor is required from design through completion of the 
activity, and USAID, host country, and contractor participation in a 
continuing review and evaluation of the activity is essential for its 
proper execution.
    (2) Based upon this preliminary finding, the cognizant technical 
office shall establish an evaluation panel consisting of a 
representative of the cognizant technical office as chairman, a 
representative of the contracting officer, and any other representatives 
considered appropriate by the chairman to review the proposed activity 
for its appropriateness under the collaborative assistance method.
    (3) If supported by the panel's findings, the chairman will make a 
formal written determination that the collaborative assistance method is 
the appropriate contracting method for the Title XII activity in 
question.
    (d) Evaluation and selection. (1) Competition shall be sought among 
eligible Title XII institutions to the maximum practicable extent; this 
requirement shall be deemed satisfied when a contractor is selected 
under the procedures of this section.
    (2) The evaluation panel shall:
    (i) Prepare evaluation and selection criteria;
    (ii) Prepare an initial source list of eligible institutions 
considered qualified to perform the proposed project; and
    (iii) Evaluate the list, using the evaluation criteria previously 
determined, for the purpose of making a written determination of the 
sources considered most capable of performing the project.
    (3) The chairman of the evaluation panel will prepare a memorandum 
requesting the contracting officer to prepare a request for expressions 
of interest from qualified sources and setting forth:
    (i) The formal determinations required by paragraph (c) of this 
section;
    (ii) The evaluation criteria which have been determined; and
    (iii) The recommended source list and the rationale therefor.
    (4) The contracting officer will prepare a request for an expression 
of interest (REI), containing sufficient information to permit an 
offeror to determine its interest in the project, and to discuss the 
project with USAID representatives, if appropriate. The REI should 
include a concise statement of the purpose of the activity, any special 
conditions or qualifications considered important, a brief description 
of the selection procedure and evaluation criteria which will be used, 
the proposed contract format, and any other information considered 
appropriate. The REI will be issued to the sources recommended by the 
panel, and to others, as appropriate; it will be synopsized, as required 
by FAR 5.201, and it will normally allow a minimum of 60 days for 
preparation of an expression of interest. Guidelines for preparation of 
expressions of interest are contained in attachment 1 to AIDAR appendix 
F.
    (5) The contracting officer will transmit all expressions of 
interest to the evaluation panel for evaluation and selection 
recommendation. The panel

[[Page 22]]

may conduct on site evaluations at its discretion, as part of the 
evaluation process.
    (6) The chairman of the evaluation panel will prepare a written 
selection recommendation with supporting justification, recommending 
that negotiations be conducted with the prospective contractor(s) 
selected by the evaluation panel. The selection recommendation shall be 
transmitted to the contracting officer together with the complete 
official file on the project which was being maintained by the 
evaluation panel.
    (7) The contracting officer will review the selection 
recommendation, obtain necessary cost and other data, and proceed to 
negotiate with the recommended sources.

[52 FR 6159, Mar. 2, 1987, as amended at 54 FR 28069, July 5, 1989; 55 
FR 6802, Feb. 27, 1990; 62 FR 40467, July 29, 1997; 62 FR 45334, Aug. 
27, 1997; 62 FR 47532, Sept. 9, 1997. Redesignated at 64 FR 16648, Apr. 
6, 1999]

                   Subpart 715.6_Unsolicited Proposals



Sec. 715.602  Policy.

    (a) USAID encourages the submission of unsolicited proposals which 
contribute new ideas consistent with and contributing to the 
accomplishment of the Agency's objectives. However, the requirements for 
contractor resources are normally quite program specific, and thus 
widely varied, and must be responsive to host country needs. Futher, 
USAID's projects are usually designed in collaboration with the 
cooperating country. These factors can limit both the need for, and 
USAID's ability to use unsolicited proposals. Therefore, prospective 
offerors are encouraged to contact USAID to determine the Agency's 
technical and geographical requirements as related to the offeror's 
interests before preparing and submitting a formal unsolicited proposal.
    (b) USAID's basic policies and procedures regarding unsolicited 
proposals are those established in FAR subpart 15.6 and this subpart.
    (c) For detailed information on unsolicited proposals, see 715.604; 
for initial contact point within USAID, see 715.604(c).

[49 FR 13240, Apr. 3, 1984. Redesignated and amended at 64 FR 16648, 
16649, Apr. 6, 1999; 64 FR 25405, May 11, 1999]



Sec. 715.604  Agency points of contact.

    (a) Information concerning USAID's policies for unsolicited 
proposals is available from the U.S. Agency for International 
Development, Evaluation Division, Room 7.08-005, 1300 Pennsylvania 
Avenue, NW., Washington, DC 20523-7803.
    (b) The information available concerns:
    (1) Contact points within USAID;
    (2) Definitions;
    (3) Characteristics of a suitable proposal;
    (4) Determination of contractor responsibility;
    (5) Organizational conflict of interest;
    (6) Cost sharing; and
    (7) Procedures for submission and evaluation of proposals.
    (c) Initial inquiries and subsequent unsolicited proposals should be 
submitted to the address specified in paragraph (a) of this section.

[49 FR 13240, Apr. 3, 1984, as amended at 50 FR 50302, Dec. 10, 1985; 52 
FR 21058, June 4, 1987; 56 FR 2699, Jan. 24, 1991; 56 FR 67224, Dec. 30, 
1991; 59 FR 33446, June 29, 1994. Redesignated and amended at 64 FR 
16648, 16649, Apr. 6, 1999]

                       PART 716_TYPES OF CONTRACTS

               Subpart 716.3_Cost Reimbursement Contracts

Sec.

Sec. 716.303 Cost-sharing contracts.

Sec. 716.306 [Reserved]

Sec. 709.406 Contract clauses.

Subpart 716.5 [Reserved]

    Authority: Sec. 621, Pub. L. 87-195, 75 Stat. 445 (22 U.S.C. 2381) 
as amended: E.O. 12163, Sept. 29, 1979, 44 FR 56673; 3 CFR, 1979 Comp., 
p. 435.

               Subpart 716.3_Cost Reimbursement Contracts



Sec. 716.303  Cost-sharing contracts.

    (a)-(b) [Reserved]

[[Page 23]]

    (c) Limitations. In addition to the limitations specified in FAR 
16.301-3, prior approval of the M/OAA Director (see 701.601(a)(1)) is 
required in order to use a cost-sharing contract with an educational 
institution.

[54 FR 46390, Nov. 3, 1989, as amended at 64 FR 42042, Aug. 3, 1999; 72 
FR 19670, Apr. 19, 2007]



Sec. 716.306  [Reserved]



Sec. 716.406  Contract clauses.

    The Contracting Officer shall include the clause at 752.216-70, 
Award Fee, in solicitations and contracts when an award-fee contract is 
contemplated.

[64 FR 5007, Feb. 2, 1999]

Subpart 716.5 [Reserved]

                  PART 717_SPECIAL CONTRACTING METHODS

    Authority: Sec. 621, Pub. L. 87-195, 75 Stat. 445, (22 U.S.C. 2381) 
as amended; E.O. 12163, Sept. 29, 1979, 44 FR 56673; 3 CFR, 1979 Comp., 
p. 435.

                 Subpart 717.70_Pharmaceutical Products



Sec. 717.700  General.

    Section 606(c) of the Foreign Assistance Act bars procurement by the 
Government of drug and pharmaceutical products manufactured outside the 
United States if their manufacture involves the use of or is covered by 
an unexpired U.S. patent which has not been held invalid by an 
unappealed or unappealable court decision unless the manufacture is 
expressly authorized by the patent owner. Applicable policies and 
procedures are set forth in USAID Automated Directive System Chapter 
312.

[49 FR 13243, Apr. 3, 1984, as amended at 61 FR 39092, July 26, 1996]

[[Page 24]]

                   SUBCHAPTER D_SOCIOECONOMIC PROGRAMS

                    PART 719_SMALL BUSINESS PROGRAMS

                         Subpart 719.2_Policies

Sec.

Sec. 719.270 Small business policies.

Sec. 719.271 Agency program direction and operation.

Sec. 719.271-1 General.

Sec. 719.271-2 The USAID Office of Small and Disadvantaged Business 
          Utilization (SDB).

Sec. 719.271-3 USAID contracting officers.

Sec. 719.271-4 Heads of contracting activities.

Sec. 719.271-5 Cognizant technical officers.

Sec. 719.271-6 Small business screening procedure.

Sec. 719.271-7 Reports on procurement actions that are exempted from 
          screening.

Sec. 719.272 Small disadvantaged business policies.

 Subpart 719.273_The U.S. Agency for International Development (USAID) 
                  Mentor-Prot[eacute]g[eacute] Program


Sec. 719.273 The U.S. Agency for International Development Mentor-
          Prot[eacute]g[eacute] Program.

Sec. 719.273-1 Purpose.

Sec. 719.273-2 Definitions.

Sec. 719.273-3 Incentives for prime contractor participation.

Sec. 719.273-4 Eligibility of Mentor and Prot[eacute]g[eacute] firms.

Sec. 719.273-5 Selection of Prot[eacute]g[eacute] firms.

Sec. 719.273-6 Application process.

Sec. 719.273-7 OSDBU review of application.

Sec. 719.273-8 Developmental assistance.

Sec. 719.273-9 Obligations under the Mentor-Prot[eacute]g[eacute] 
          Program.

Sec. 719.273-10 Internal controls.

Sec. 719.273-11 Solicitation provision and contract clause.

    Authority: 42 U.S.C. 7254, 40 U.S.C. 486(c), 42 U.S.C. 2201.

    Source: 49 FR 13243, Apr. 3, 1984, unless otherwise noted.

                         Subpart 719.2_Policies



Sec. 719.270  Small business policies.

    (a) In keeping with section 602 of the Foreign Assistance Act of 
1961 (22 U.S.C. 2352), as amended, USAID shall, insofar as practicable 
and to the maximum extent consistent with the accomplishment of the 
purposes of said Act, assist United States small business to participate 
equitably in the furnishing of supplies and services for Foreign 
Assistance activities.
    (b) It is the policy of USAID to:
    (1) Fully endorse and carry out the Government's small business 
program for placing a fair proportion of its purchases and contracts for 
supplies, construction (including maintenance and repair), research and 
development, and services (including personal, professional, and 
technical services) with small business, including minority small 
business concerns; and
    (2) Increase their participation in USAID procurement.
    (c) In furtherance of this policy:
    (1) Cognizant technical officers shall make positive efforts (see 
719.271-5) to identify potentially qualified small and minority business 
firms during precontract development of activities and shall, with the 
responsible contracting officers, assure that such firms are given full 
opportunity to participate equitably;
    (2) Small business set-asides shall be made for all contracts to be 
executed in USAID/Washington which qualify for small business set-aside 
action under Part 19 of the FAR; and
    (3) Consideration shall be given in appropriate cases to the award 
of the contract to the Small Business Administration for subcontracting 
to small business firms pursuant to section 8(a) of the Small Business 
Act (15 U.S.C. 637(a)).
    (d) This program shall be implemented by all USAID/Washington 
contracting activities in order to attain these policy objectives. In 
accordance with 719.271, all USAID/Washington direct-procurement 
requirements which exceed the simplified acquisition threshold shall be 
screened for small business opportunities by the Office of Small and 
Disadvantaged Business Utilization (SDB) except those exempted by 
719.271-6(a).
    (e) Where practicable and desirable, small business and minority 
business enterprise award goals will be established for the respective 
USAID/Washington procuring activities to provide incentive for 
contracting personnel to increase awards to small firms. The

[[Page 25]]

goals will be set by SDB after consultation with the respective head of 
the contracting activity (see subsection 702.170-10).
    (f) In the event of a disagreement between SDB and the contracting 
officer concerning: (1) A recommended set-aside, or (2) a request for 
modification or withdrawal of a class or individual set-aside, complete 
documentation of the case including the reasons for disagreement shall 
be transmitted within five working days to the head of the contracting 
activity (see 719.271-6(e)) for a decision. Procurement action shall be 
suspended pending a decision.
    (g) The above suspension shall not apply where the contracting 
officer:
    (1) Certifies in writing, with supporting information, that in order 
to protect the public interest award must be made without delay;
    (2) Promptly provides a copy of said certification to SDB; and
    (3) Includes a copy of the certification in the contract file.
    (h) SDB shall be the Small Business Advisor and Minority Business 
Procurement Policy Manager for all USAID/Washington procuring 
activities.
    (i) The details on the Agency's direction and operation of the small 
business program are set forth in 719.271.
    (j) No decision rendered, or action taken, under the coverage set 
forth in 719.271 shall preclude the Small Business Administration from 
appealing directly to the USAID Administrator as provided for in part 19 
of the FAR.

[49 FR 13243, Apr. 3, 1984, as amended at 52 FR 21058, June 4, 1987; 56 
FR 67224, Dec. 30, 1991; 61 FR 39092, July 26, 1996; 62 FR 40468, July 
29, 1997]



Sec. 719.271  Agency program direction and operation.



Sec. 719.271-1  General.

    The purpose of this section is to prescribe responsibilities and 
procedures for carrying out the small business program policy set forth 
in 219.270, and in part 19 of the FAR. Small Business concerns are 
defined in FAR subpart 19.1; in addition, small business concerns are 
concerns organized for profit. Nonprofit organizations are not 
considered small business concerns. Small disadvantaged business 
enterprises are defined in FAR subpart 19.1. Small disadvantaged 
business enterprises are included in the term ``small business'' when 
used in this subpart; specific reference to disadvantaged business 
enterprises is for added emphasis.



Sec. 719.271-2  The USAID Office of Small and Disadvantaged Business 

Utilization (SDB).

    (a) SDB is responsible for administering, implementing, and 
coordinating the Agency's small business (including minority business 
enterprises) program.
    (b) SDB, headed by the Director SDB, who also serves as the Minority 
Business Procurement Manager, shall be specifically responsible for:
    (1) Developing policies, plans, and procedures for a coordinated 
Agency-wide small business and minority business enterprise procurement 
program;
    (2) Advising and consulting regularly with USAID/Washington 
procuring activities on all phases of their small business program, 
including, where practicable and desirable, the establishment of small 
business and minority business enterprise award goals;
    (3) Collaborating with officials of the Small Business 
Administration (SBA), other Government Agencies, and private 
organizations on matters affecting the Agency's small business program;
    (4) Developing and maintaining an USAID Consultant Registry 
Information System (ACRIS) of bidders/offerors (annotated to identify 
small business and minority business enterprise firms) capable of 
furnishing services for use by the USAID contracting activities;
    (5) Cooperating with contracting officers in administering the 
performance of contractors subject to the Small Business and Minority 
Business Enterprises Subcontracting Program clauses;
    (6) Developing a plan of operation designed to increase the share of 
contracts awarded to small business concerns, including small minority 
business enterprises;
    (7) Establishing small business class set-aside for types and 
classes of items of services where appropriate;

[[Page 26]]

    (8) Reviewing each procurement requisition to make certain 
individual or class set-asides are initiated on all suitable USAID/
Washington proposed contract actions in excess of the simplified 
acquisition threshold which are subject to screening (see 719.271-6);
    (9) Maintaining a program designed to:
    (i) Locate capable small business sources for current and future 
procurements through GSA and other methods;
    (ii) Utilize every source available to determine if an item is 
obtainable from small business; and
    (iii) Develop adequate small business competition on all appropriate 
procurements;
    (10) Taking action to assure that unnecessary qualifications, 
restrictive specifications, or other features (such as inadequate 
procurement lead time) of the programming or procurement process, which 
may prevent small business participation in the competitive process, are 
modified to permit such participation where an adequate product or 
service can be obtained;
    (11) Recommending that portions of large planned procurements or 
suitable components of end items or services be purchased separately so 
small firms may compete;
    (12) On proposed non-competitive procurements, recommending to the 
contracting officer that the procurement be made competitive when, in 
the opinion of SDB, there are small business or minority business 
enterprises believed competent to furnish the required goods or 
services, and supplying the contracting officer a list of such firms;
    (13) Assisting small business concerns with individual problems;
    (14) Promoting increased awareness by the technical staff of the 
availability of small business firms;
    (15) Making available to GSA copies of solicitations when so 
requested;
    (16) Counseling non-responsive or non-responsible small business 
bidders/offerors to help them participate more effectively in future 
solicitations; and
    (17) Examining bidders lists to make certain small business firms 
are appropriately identified and adequately represented for both 
negotiated and advertised procurements.

[49 FR 13243, Apr. 3, 1984, as amended at 52 FR 21058, June 4, 1987; 61 
FR 39092, July 26, 1996; 62 FR 40468, July 29, 1997]



Sec. 719.271-3  USAID contracting officers.

    With respect to procurement activities within their jurisidiction, 
contracting officers are responsible for:
    (a) Being thoroughly familiar with part 19 of the FAR and this 
section dealing with the small business program;
    (b) Screening abstracts of bids and other award data to determine 
set-aside potential for future procurements;
    (c) Assuring that small business concerns and minority business 
enterprises are appropriately identified on source lists and abstracts 
of bids or proposals by an ``S'' and ``M'', respectively, or other 
appropriate symbol;
    (d) Reviewing types and classes of items and services to determine 
where small business set-asides can be applied;
    (e) Recommending that portions of large planned procurements of 
suitable components of end items or services be purchased separately so 
small firms may compete;
    (f) Making a unilateral determination for total or partial small 
business set-asides in accordance with Subpart 19.5 of the Federal 
Acquisition Regulations;
    (g) Submitting proposed procurement actions for USAID/Washington 
contracts to SDB for screening (see 719.271-6);
    (h) Taking action to assure that unnecessary qualifications, 
restrictive specifications or other features (such as inadequate 
procurement lead time) of the programming or procurement process which 
may prevent small business participation in the competitive process are 
modified to permit such participation where an adequate product or 
service can be obtained;
    (i) Prior to rendering a final decision on a proposed non-
competitive procurement action, and as part of his/her findings and 
determinations, the contracting officer shall consider the 
recommendations, if any, of SDB together

[[Page 27]]

with the latter's list of additional sources;
    (j) As appropriate, referring small business concerns, including 
small minority business enterprises, to SDB for information and advice;
    (k) Promoting increased awareness by the technical staff of the 
availability of small business concerns;
    (l) Making available to SDB copies of solicitations when requested;
    (m) Assisting SDB in counseling non-responsive or non-responsible 
small business bidders/offerors to help them to participate more 
effectively in future solicitations; and
    (n) Including the Small Business and Minority Business Enterprises 
Subcontracting Program clauses in all contracts where required by part 
19 of the FAR.

[49 FR 13243, Apr. 3, 1984, as amended at 61 FR 39092, July 26, 1996; 62 
FR 40468, July 29, 1997]



Sec. 719.271-4  Heads of contracting activities.

    In order for the agency small business program to be effective, the 
active support of top management is required. The heads of the 
contracting activities shall be responsible for:
    (a) Rendering decisions in cases resulting from non-acceptances by 
their contracting officers of set-aside recommendations made by SDB;
    (b) Consulting with SDB in establishing small business and minority 
business enterprise award goals, where practicable and desirable; and
    (c) Advising cognizant technical officers of their responsibilities 
as set forth in 719.271-5.

[49 FR 13243, Apr. 3, 1984, as amended at 61 FR 39092, July 26, 1996]



Sec. 719.271-5  Cognizant technical officers.

    Since the procurement process starts with the establishment of a 
requirement, the actions of the cognizant technical officers can affect 
the opportunity of small business to participate equitably; therefore, 
each cognizant technical officer shall, during the formulation of 
activities which will require contractual implementation:
    (a) Consult with SDB on the availability and capabilities of small 
business firms to permit making a tentative set-aside determination 
where appropriate; and
    (b) Provide sufficient procurement lead time in the activity 
implementation schedule to allow potential small business participation.

[49 FR 13243, Apr. 3, 1984, as amended at 61 FR 39092, July 26, 1996]



Sec. 719.271-6  Small business screening procedure.

    (a) General. All USAID/Washington proposed contract actions in 
excess of the simplified acquisition threshold shall be screened by SDB, 
with the exception of:
    (1) Class set-asides and those unilaterally set-aside by contracting 
officers (719.271-3(f));
    (2) Those where the contracting officer certifies in writing that 
the public exigency will not permit the delay incident to screening 
(719.271-7(b));
    (3) ``Institution building'' contracts (contracts for development of 
a counterpart capability in the host country) with educational or 
nonprofit institutions; or collaborative assistance contracts pursuant 
to AIDAR 715.370-2.
    (4) Those involving the payment of tuition and fees for participant 
training at academic institutions; and
    (5) Personal services contract requirements (see 719.270).
    (b) Preparation of Form USAID 1410-14 (the Small Business/Minority 
Business Enterprise Procurement Review Form). (1) The contracting 
officer shall prepare the subject form in an original and 3 copies and 
forward the original and 2 copies to SDB within one working day of 
receipt by the contracting activity of a procurement requisition.
    (2) The contracting officer will attach to his/her transmittal a 
complete copy of the procurement request and a copy of the recommended 
source list as furnished by the technical office and supplemented by 
him/her.
    (3) The contracting officer shall complete blocks 2, 3, 4, 5, 9, and 
10 (when appropriate) prior to submittal to SDB.
    (c) Screening of Form USAID 1410-14 by SDB. (1) SDB will screen the 
contracting officer's recommendations on set-aside potential, small 
business subcontracting opportunities, and section 8(a) subcontracting, 
and furnish him/her with either a written concurrence

[[Page 28]]

in his/her recommendations or written counter-recommendations on the 
original and duplicate copy within five working days from receipt of the 
form from the contracting officer.
    (2) SDB will complete Blocks 1, 6, 7, 8, 11, and 12 (when 
appropriate) prior to returning the screened form to the contracting 
officer.
    (d) Concurrence or rejection procedure. (1) The contracting officer 
shall complete Block 13 upon receipt of the original and duplicate copy 
of the screened form from SDB.
    (2) If the contracting officer rejects the SDB counter-
recommendation, he/she shall return the original and duplicate forms 
with his/her written reasons for rejection to SDB within two working 
days.
    (3) Upon receipt of the contracting officer's rejection, SDB may: 
(i) accept, or (ii) appeal, the rejection. In the case of acceptance of 
the contracting officer's rejection, SDB shall annotate Block 14 when it 
renders a decision and return the original form to the contracting 
officer within two working days.
    (e) Appeal procedure. (1) When informal efforts fail to resolve the 
set-aside disagreement between the contracting officer and SDB, the 
latter official may appeal the contracting officer's decision to the 
head of the contracting activity. Such an appeal will be made within 
five working days after receipt of the contracting officer's rejection.
    (2) In the case of an appeal, SDB will send the original and 
duplicate form, with the appeal noted in Block 14, directly to the head 
of the contracting activity with its written reasons for appealing. The 
contracting officer will be notified of SDB's appeal by means of a copy 
of the written reasons for appealing.
    (3) The head of the contracting activity shall render a decision on 
the appeal (complete Block 15) within three working days after receipt 
of same and return the original to SDB and the duplicate to the 
contracting officer.

[49 FR 13243, Apr. 3, 1984, as amended at 52 FR 21058, June 4, 1987; 61 
FR 39092, July 26, 1996; 62 FR 40468, July 29, 1997; 64 FR 42042, Aug. 
3, 1999]



Sec. 719.271-7  Reports on procurement actions that are exempted from 

screening.

    (a) Unilateral and class set-asides. The contracting officer shall 
prepare Form USAID 1410-14 as stated in 719.271-6, but forward only the 
duplicate copy with the documentation required by Block 5 of the form to 
SDB. The original will be filed in the contract file.
    (1) If, upon review of the material submitted under 719.271-7(a) 
above, SDB concludes that it would be practicable to accomplish all or a 
portion of the procurement involved under section 8(a) subcontracting, 
it shall so advise the contracting officer in writing within five days 
after receipt of such material.
    (2) Such advice shall be considered a counter-recommendation and 
shall be processed in accordance with 719.271-6 (d) and (e).
    (b) Public exigency exemption. The contracting officer shall prepare 
Form USAID 1410-14 as stated in 719.271-6, but forward only the 
duplicate copy with the documentation required by Block 5 of the form to 
SDB. In addition to the documentation called for in 719.271-6, the 
contracting officer shall furnish a copy of his/her written 
determination exempting the procurement from screening. The 
determination shall cite the pertinent facts which led to his/her 
decision. This exemption is not intended to be used as substitute for 
good procurement planning and lead-time; SDB will report abuses of this 
exemption to the head of the contracting activity for appropriate action 
in accordance with 719.271-4(c).
    (c) Institution building contract (IBC) exemption. The contracting 
officer shall prepare Form USAID 1410-14 as stated in 719.271-6, but 
forward only the duplicate copy with the documentation required by Block 
5 of the form to SDB.
    (d) Personal services contract exemption. Preparation of Form USAID 
1410-14 is not required for personal services contracts.



Sec. 719.272  Small disadvantaged business policies.

    In addition to the requirements in FAR part 19, part 726 provides 
for contracting and subcontracting with small

[[Page 29]]

disadvantaged businesses and other disadvantaged enterprises based on 
provisions of the foreign assistance appropriations acts.

[58 FR 8702, Feb. 17, 1993]

 Subpart 719.273_The U.S. Agency for International Development (USAID) 
                  Mentor-Prot[eacute]g[eacute] Program

    Source: 72 FR 32543, June 13, 2007, unless otherwise noted.



Sec. 719.273  The U.S. Agency for International Development (USAID) 

Mentor-Prot[eacute]g[eacute] Program.



Sec. 719.273-1  Purpose.

    The USAID Mentor-Prot[eacute]g[eacute] Program is designed to assist 
small business, including veteran-owned small business, service-disabled 
veteran-owned small business, HUBZone, small socially and economically 
disadvantaged business, and women-owned small business in enhancing 
their capabilities to perform contracts and sub-contracts for USAID and 
other Federal agencies. The Mentor-Prot[eacute]g[eacute] Program is also 
designed to improve the performance of USAID contractors and 
subcontractors by providing developmental assistance to 
Prot[eacute]g[eacute] entities, fostering the establishment of long-term 
business relationships between small business and prime contractors, and 
increasing the overall number of small business that receive USAID 
contract and subcontract awards. A firm's status as a 
Prot[eacute]g[eacute] under a USAID contract shall not have an effect on 
the firm's eligibility to seek other prime contracts or subcontracts.



Sec. 719.273-2  Definitions.

    Throughout, the term ``small business'' includes all categories of 
small firms as defined by the Small Business Administration (SBA) on 
whose behalf the Office of Small and Disadvantaged Business Utilization 
(OSDBU) is chartered to advocate, including small business, small 
disadvantaged business, women-owned small business, veteran-owned and 
service-disabled veteran-owned small business and small business located 
in HUBZones, as those terms are defined in 13 CFR part 124. The 
determination of affiliation is a function of the SBA.
    (a) A ``Mentor'' is a prime contractor that elects to promote and 
develop small business subcontractors by providing developmental 
assistance designed to enhance the business success of the 
Prot[eacute]g[eacute].
    (b) ``Program'' refers to the USAID Mentor-Prot[eacute]g[eacute] 
Program as described in this Chapter.
    (c) ``Prot[eacute]g[eacute]'' means a small business, small 
disadvantaged business, women-owned small business, HUBZone small 
business, veteran-owned small business or service-disabled veteran owned 
small business that is the recipient of developmental assistance 
pursuant to a Mentor-Prot[eacute]g[eacute] Agreement.



Sec. 719.273-3  Incentives for prime contractor participation.

    (a) Under the Small Business Act, 15 U.S.C. 637(d)(4)(E), USAID is 
authorized to provide appropriate incentives to encourage subcontracting 
opportunities for small business consistent with the efficient and 
economical performance of the contract. This authority is limited to 
negotiated procurements. FAR 19.202-1 provides additional guidance.
    (b) Costs incurred by a Mentor to provide developmental assistance, 
as described in 719.273-8 to fulfill the terms of their agreement(s) 
with a Prot[eacute]g[eacute] firm(s), are not reimbursable as a direct 
cost under a USAID contract. If USAID is the mentor's responsible audit 
agency under FAR 42.703-1, USAID will consider these costs in 
determining indirect cost rates. If USAID is not the responsible audit 
agency, mentors are encouraged to enter into an advance agreement with 
their responsible audit agency on the treatment of such costs when 
determining indirect cost rates.
    (c) In addition to subparagraph (b) above, contracting officers may 
give Mentors evaluation credit under FAR 15.101-1 considerations for 
subcontracts awarded pursuant to their Mentor-Prot[eacute]g[eacute] 
Agreements and their subcontracting plans. Therefore:

[[Page 30]]

    (1) Contracting officers may evaluate subcontracting plans 
containing Mentor-Prot[eacute]g[eacute] arrangements more favorably than 
subcontracting plans without Mentor-Prot[eacute]g[eacute] Agreements.
    (2) Contracting officers may assess the prime contractor's 
compliance with the subcontracting plans submitted in previous contracts 
as a factor in evaluating past performance under FAR 15.305(a)(2)(v) and 
determining contractor responsibility 19.705-5(a)(1).
    (d) OSDBU Mentoring Award. A non-monetary award will be presented 
annually to the Mentoring firm providing the most effective 
developmental support of a Prot[eacute]g[eacute]. The Mentor-
Prot[eacute]g[eacute] Program Manager will recommend an award winner to 
the Director of the Office of Small and Disadvantaged Business 
Utilization (OSDBU).
    (e) OSDBU Mentor-Prot[eacute]g[eacute] Annual Conference. At the 
conclusion of each year in the Mentor-Prot[eacute]g[eacute] Program, 
Mentor firms will be invited to brief contracting officers, program 
leaders, office directors and other guests on Program progress.



Sec. 719.273-4  Eligibility of Mentor and Prot[eacute]g[eacute] firms.

    Eligible business entities approved as Mentors may enter into 
agreements (hereafter referred to as ``Mentor-Prot[eacute]g[eacute] 
Agreement'' or ``Agreement'' and explained in section 719.273-6) with 
eligible Prot[eacute]g[eacute]s. Mentors provide appropriate 
developmental assistance to enhance the capabilities of 
Prot[eacute]g[eacute]s to perform as contractors and/or subcontractors. 
Eligible small business entities capable of providing developmental 
assistance may be approved as Mentors. Prot[eacute]g[eacute]s may 
participate in the Program in pursuit of a prime contract or as 
subcontractors under the Mentor's prime contract with the USAID, but are 
not required to be a subcontractor to a USAID prime contractor or be a 
USAID prime contractor. Notwithstanding eligibility requirements in this 
section, USAID reserves the right to limit the number of participants in 
the Program in order to insure its effective management of the Mentor-
Prot[eacute]g[eacute] Program.
    (a) Eligibility. A Mentor:
    (1) May be either a large or small business entity;
    (2) Must be eligible for award of Government contracts;
    (3) Must be able to provide developmental assistance that will 
enhance the ability of Prot[eacute]g[eacute]s to perform as prime 
contractors or subcontractors; and
    (4) Will be encouraged to enter into arrangements with entities with 
which it has established business relationships.
    (b) Eligibility. A Prot[eacute]g[eacute]:
    (1) Must be a small business, veteran-owned small business, service-
disabled veteran-owned small business, HUBZone, small socially and 
economically disadvantaged business, and women-owned small business);
    (2) Must meet the size standard corresponding to the NAICS code that 
the Mentor prime contractor believes best describes the product or 
service being acquired by the subcontract; and
    (3) Eligible for award of government contracts.
    (c) Prot[eacute]g[eacute]s may have multiple Mentors. 
Prot[eacute]g[eacute]s participating in Mentor-Prot[eacute]g[eacute] 
programs in addition to USAID's Program should maintain a system for 
preparing separate reports of Mentoring activity so that results of the 
USAID Program can be reported separately from any other agency program.
    (d) A Prot[eacute]g[eacute] firm shall self-certify to a Mentor firm 
that it meets the requirements set forth in paragraph (b) of this 
section and possess related certifications granted by the Small Business 
Administration (e.g., HUBZone, 8(a), etc.). Mentors may rely in good 
faith on written representations by potential Prot[eacute]g[eacute]s 
that they meet the specified eligibility requirements. HUBZone and small 
disadvantaged business status eligibility and documentation requirements 
are determined according to 13 CFR part 124.



Sec. 719.273-5  Selection of Prot[eacute]g[eacute] firms.

    (a) Mentor firms will be solely responsible for selecting 
Prot[eacute]g[eacute] firms. Mentors are encouraged to select from a 
broad base of small business including small disadvantaged business, 
women-owned small business, veteran-owned small business, service-
disabled veteran-owned small business, and

[[Page 31]]

HUBZone firms whose core competencies support USAID's mission.
    (b) Mentors may have multiple Prot[eacute]g[eacute]s. However, to 
preserve the integrity of the Program and assure the quality of 
developmental assistance provided to Prot[eacute]g[eacute]s, USAID 
reserves the right to limit the total number of Prot[eacute]g[eacute]s 
participating under each Mentor firm for the Mentor-
Prot[eacute]g[eacute] Program.
    (c) The selection of Prot[eacute]g[eacute] firms by Mentor firms may 
not be protested, except that any protest regarding the size or 
eligibility status of an entity selected by a Mentor shall be handled in 
accordance with the Federal Acquisition Regulation (FAR) and the Small 
Business Administration regulations.



Sec. 719.273-6  Application process.

    Entities interested in becoming a Mentor firm must apply in writing 
to the USAID Office of Small and Disadvantaged Business Utilization 
(OSDBU) by submitting form AID 321-1 (OMB Control number 0412-0574 
approved on 5/22/2007). The application shall contain the Mentor-
Prot[eacute]g[eacute] Agreement and shall be evaluated for approval. 
Evaluations will consider the nature and extent of technical and 
managerial support as well as any proposed financial assistance in the 
form of equity investment, loans, joint-venture, and traditional 
subcontracting support. The Mentor-Prot[eacute]g[eacute] Agreement must 
contain:
    (a) Names, addresses, phone numbers, and e-mail addresses (if 
available) of Mentor and Prot[eacute]g[eacute] firm(s) and a point of 
contact for both Mentor and Prot[eacute]g[eacute];
    (b) A description of the developmental assistance that will be 
provided by the Mentor to the Prot[eacute]g[eacute], including a 
description of the work or product contracted for (if any), a schedule 
for providing assistance, and criteria for evaluation of the 
Prot[eacute]g[eacute]'s developmental success;
    (c) A listing of the number and types of subcontracts to be awarded 
to the Prot[eacute]g[eacute];
    (d) Duration of the Agreement, including rights and responsibilities 
of both parties (Mentor and Prot[eacute]g[eacute]);
    (e) Termination procedures, including procedures for the parties' 
voluntary withdrawal from the Program. The Agreement shall require the 
Mentor or the Prot[eacute]g[eacute] to notify the other firm in writing 
at least 30 days in advance of its intent to voluntarily terminate the 
Agreement;
    (f) Procedures requiring the parties to notify OSDBU immediately 
upon receipt of termination notice from the other party;
    (g) A plan for accomplishing the work or product contracted for 
should the Agreement be terminated; and
    (h) Other terms and conditions, as appropriate.



Sec. 719.273-7  OSDBU review of application.

    (a) OSDBU will review the information to establish the Mentor and 
Prot[eacute]g[eacute] eligibility and to ensure that the information 
that is in section 719.273-6 is included. If the application relates to 
a specific contract, then OSDBU will consult with the responsible 
contracting officer on the adequacy of the proposed Agreement, as 
appropriate. OSDBU will complete its review no later than 30 calendar 
days after receipt of the application or after consultation with the 
contracting officer, whichever is later. Application for and enrollment 
into the Program are free and open to the public.
    (b) After OSDBU completes its review and provides written approval, 
the Mentor may execute the Agreement and implement the developmental 
assistance as provided under the Agreement. OSDBU will provide a copy of 
the Mentor-Prot[eacute]g[eacute] Agreement to the USAID contracting 
officer for any USAID contracts affected by the Agreement.
    (c) The Agreement defines the relationship between the Mentor and 
Prot[eacute]g[eacute] firms only. The Agreement itself does not create 
any privity of contract or contractual relationship between the Mentor 
and USAID nor the Prot[eacute]g[eacute] and USAID.
    (d) If the application is disapproved, the Mentor may provide 
additional information for reconsideration. OSDBU will complete review 
of any supplemental material no later than 30 days after its receipt. 
Upon finding deficiencies that USAID considers correctable, OSDBU will 
notify the Mentor

[[Page 32]]

and Prot[eacute]g[eacute] and request correction of deficiencies to be 
provided within 15 days.



Sec. 719.273-8  Developmental assistance.

    The forms of developmental assistance a Mentor can provide to a 
Prot[eacute]g[eacute] include and are not limited to the following:
    (a) Guidance relating to--
    (1) Financial management;
    (2) Organizational management;
    (3) Overall business management/planning;
    (4) Business development; and
    (5) Technical assistance.
    (b) Loans;
    (c) Rent-free use of facilities and/or equipment;
    (d) Property;
    (e) Temporary assignment of personnel to a Prot[eacute]g[eacute] for 
training; and
    (f) Any other types of permissible, mutually beneficial assistance.



Sec. 719.273-9  Obligations under the Mentor-Prot[eacute]g[eacute] 

Program.

    (a) A Mentor or Prot[eacute]g[eacute] may voluntarily withdraw from 
the Program. However, in no event shall such withdrawal impact the 
contractual requirements under any prime contract.
    (b) Mentor and Prot[eacute]g[eacute] entities shall submit to the 
USAID Office of Small and Disadvantaged Business Utilization (OSDBU) 
annual reports on progress under the Mentor-Prot[eacute]g[eacute] 
Agreement. USAID will evaluate annual reports by considering the 
following:
    (1) Specific actions taken by the Mentor during the evaluation 
period to increase the participation of their Prot[eacute]g[eacute](s) 
as suppliers to the Federal Government and to commercial entities;
    (2) Specific actions taken by the Mentor during the evaluation 
period to develop technical and administrative expertise of a 
Prot[eacute]g[eacute] as defined in the Agreement;
    (3) The extent to which the Prot[eacute]g[eacute] has met the 
developmental objectives in the Agreement;
    (4) The extent to which the Mentor's participation in the Mentor-
Prot[eacute]g[eacute] Program impacted the Prot[eacute]g[eacute]'(s) 
ability to receive contract(s) and subcontract(s) from private firms and 
Federal agencies other than USAID; and, if deemed necessary;
    (5) Input from the Prot[eacute]g[eacute] on the nature of the 
developmental assistance provided by the Mentor.
    (c) OSDBU will submit annual reports to the relevant contracting 
officer regarding participating prime contractor(s)' performance in the 
Program.
    (d) Mentor and Prot[eacute]g[eacute] firms shall submit an 
evaluation to OSDBU at the conclusion of the mutually agreed upon 
Program period, the conclusion of the contract, or the voluntary 
withdrawal by either party from the Program, whichever comes first.



Sec. 719.273-10  Internal controls.

    (a) OSDBU will oversee the Program and will work in concert with the 
Mentor-Prot[eacute]g[eacute] Program Manager and relevant contracting 
officers to achieve Program objectives. OSDBU will establish internal 
controls as checks and balances applicable to the Program. These 
controls will include:
    (1) Reviewing and evaluating Mentor applications for validity of the 
provided information;
    (2) Reviewing annual progress reports submitted by Mentors and 
Prot[eacute]g[eacute]s on Prot[eacute]g[eacute] development to measure 
Prot[eacute]g[eacute] progress against the plan submitted in the 
approved Agreement;
    (3) Reviewing and evaluating financial reports and invoices 
submitted by the Mentor to verify that USAID is not charged by the 
Mentor for providing developmental assistance to the 
Prot[eacute]g[eacute]; and
    (4) Limiting the number of participants in the Mentor-
Prot[eacute]g[eacute] Program within a reporting period, in order to 
insure the effective management of the Program.
    (b) USAID may rescind approval of an existing Mentor-
Prot[eacute]g[eacute] Agreement if it determines that such action is in 
USAID's best interest. The rescission shall be in writing and sent to 
the Mentor and Prot[eacute]g[eacute] after approval by the Director of 
OSDBU. Rescission of an Agreement does not change the terms of any 
subcontract between the Mentor and the Prot[eacute]g[eacute].

[[Page 33]]



Sec. 719.273-11  Solicitation provision and contract clause.

    (a) The Contracting Officer shall insert the provision at AIDAR 
752.219-70 in all unrestricted solicitations exceeding $550,000 
($1,000,000 for construction) that offer subcontracting opportunities.
    (b) The Contracting Officer shall insert the clause at AIDAR 
752.219-71 in all contracts where the prime contractor has signed a 
Mentor-Prot[eacute]g[eacute] Agreement with USAID.

      PART 722_APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITION

                   Subpart 722.1_Basic Labor Policies

Sec.

Sec. 722.103 Overtime.

Sec. 722.103-1 Definitions.

Sec. 722.103-2 Policy.

Sec. 722.103-3 [Reserved]

Sec. 722.103-4 Approvals.

Sec. 722.170 Employment of third country nationals (TCN's) and 
          cooperating country nationals (CCN's).

               Subpart 722.8_Equal Employment Opportuntity


Sec. 722.805-70 Procedures.

    Authority: Sec. 621, Pub. L. 87-195, 75 Stat. 445, (22 U.S.C. 2381) 
as amended; E.O. 12163, Sept. 29, 1979, 44 FR 56673; 3 CFR, 1979 Comp., 
p. 435.

    Source: 49 FR 13246, Apr. 3, 1984, unless otherwise noted.

                   Subpart 722.1_Basic Labor Policies



Sec. 722.103  Overtime.



Sec. 722.103-1  Definitions.

    Compensatory time off means leave equal to overtime worked, which, 
unless otherwise authorized in a contract or approved by a contracting 
officer, must be taken not later than the end of the calendar month 
following that in which the overtime is worked.



Sec. 722.103-2  Policy.

    (a) Most contracts covered by this regulation call for the 
performance of professional or technical services overseas on a cost-
reimbursement basis. The compensation for employees performing such 
services is normally fixed on a monthly or annual basis, and the 
contracts usually state minimum work week hours. It is not expected that 
these employees will receive additional pay, overtime or shift premiums, 
or compensatory time off.
    (b) When the contracting officer determines it is in the best 
interests of the Government, specific provision may be made in contracts 
to permit such benefits for non-technical and non-professional employees 
serving overseas, subject to approvals to be required in the contract.

[49 FR 13246, Apr. 3, 1984. Redesignated at 61 FR 39092, July 26, 1996]



Sec. 722.103-3  [Reserved]



Sec. 722.103-4  Approvals.

    The contracting officer may make the determinations referred to in 
FAR 22.103-4.

[49 FR 13246, Apr. 3, 1984. Redesignated at 61 FR 39092, July 26, 1996]



Sec. 722.170  Employment of third country nationals (TCN's) and 

cooperating country nationals (CCN's).

    (a) General. It is USAID policy that cooperating country nationals 
(CCN's) and third country nationals (TCN's), who are hired abroad for 
work in a cooperating country under USAID-direct contracts, generally be 
extended the same benefits, and be subject to the same restrictions as 
TCN's and CCN's employed as direct hires by the USAID Mission. 
Exceptions to this policy may be granted either by the Mission Director 
or the Assistant Administrator having program responsibility for the 
project. (TCN's and CCN's who are hired to work in the United States 
shall be extended benefits and subject to restrictions on the same basis 
as U.S. citizens who work in the United States.)
    (b) Compensation. Compensation, including merit or promotion 
increases paid to TCN's and CCN's may not, without the approval of the 
Mission Director or the Assistant Administrator having program 
responsibility for the project, exceed the prevailing compensation paid 
to personnel performing comparable work in the cooperating

[[Page 34]]

country as determined by the USAID Mission. Unless otherwise authorized 
by the Mission Director or the Assistant Administrator having program 
responsibility for the project, the compensation of such TCN and CCN 
employees shall be paid in the currency of the cooperating country.
    (c) Allowances and differentials. TCN's and CCN's, hired abroad for 
work in a cooperating country, are not eligible for allowances or 
differentials under USAID-direct contracts, unless authorized by the 
Mission Director or the Assistant Administrator having program 
responsibility for the project.
    (d) Country and security clearances. The contractor shall insure 
that the necessary clearances, including security clearances, if 
required, have been obtained for TCN and CCN employees in accordance 
with any such requirements set forth in the contract or required by the 
USAID Mission, prior to the TCN or CCN starting work under the contract.
    (e) Physical fitness. Contractors are required to insure that 
prospective TCN and CCN employees are examined prior to employment to 
determine whether the prospective employee meets the minimum physical 
requirements of the position and is free from any contagious disease.
    (f) Workweek, holidays, and leave. The workweek, holidays, and leave 
for TCN and CCN employees shall be the same as for all other employees 
of the contractor, under the terms of the contract; however, TCN and CCN 
employees are not eligible for home leave or military leave unless 
authorized by the Mission Director or the Assistant Administrator having 
program responsibility for the project.
    (g) Travel and transportation for TCN's and CCN's. Travel and 
transportation shall be provided TCN and CCN employees on the same basis 
as for all other employees of the contractor, under the terms of the 
contract.
    (h) Household effects and motor vehicles. USAID will not provide 
household effects to TCN and CCN employees; such employees may ship 
their household effects and motor vehicles to their place of employment 
on the same basis as for all other employees of the contractor, under 
the terms of the contract unless they are residents of the cooperating 
country.

               Subpart 722.8_Equal Employment Opportunity



Sec. 722.805-70  Procedures.

    (a) The procedures in this section apply, as appropriate, for all 
contracts excluding construction, which shall be handled in accordance 
with (48 CFR) FAR 22.804-2. Contracting officers are responsible for 
ensuring that the requirements of (48 CFR) FAR 22.8 and related clauses 
are met before awarding any contracts or consenting to subcontracts 
subject to these requirements.
    (b) Representations and Certifications. The first step in ensuring 
compliance with these requirements is to obtain all necessary 
representations and certifications (Reps and Certs) required by FAR 
22.810. The contracting officer must review the Reps and Certs to 
determine whether they have been completed and signed as required, and 
are acceptable.
    (1) If any of these Reps and Certs are incomplete or unsigned, the 
contracting officer must request that the offeror(s) complete and sign 
them, as necessary, unless the initial evaluation of the offeror's 
proposal results in the contracting officer's concluding that the 
offeror would not, in any event, be within a competitive range 
determined in accordance with (48 CFR) FAR 15.306(c), or would not be 
selected if award is to be made without discussions. A request as 
described in this paragraph (b)(1) constitutes either a clarification 
per (48 CFR) FAR 15.306(a) (``resolving minor or clerical errors'', 
paragraph (a)(2)), or a communication before establishment of 
competitive range per (48 CFR) FAR 15.306(b), not a discussion per (48 
CFR) FAR 15.306(d).
    (2) If completed and signed Reps and Certs raise questions 
concerning the offeror's compliance with EEO requirements, or if the 
contracting officer has information from any other source which calls 
into question the offeror's eligibility for award based on this section 
and (48 CFR) FAR 22.8, the contracting officer must refer the matter to 
the cognizant regional Department of Labor Office of Federal Contract

[[Page 35]]

Compliance Programs (OFCCP) regardless of the estimated value of the 
contract; only OFCCP may make a determination of non-compliance with EEO 
requirements.
    (c) OFCCP's National Preaward Registry. If the Reps and Certs are 
complete, signed, and deemed acceptable, and the contracting officer has 
no reason to doubt their accuracy, the contracting officer must then 
consult the OFCCP's National Preaward Registry at the internet website 
in 48 CFR 22.805(a)(4) (i) to see if the offeror is listed.
    (1) If the conditions stated in FAR 22.805(a) (4) are met (including 
the contract file documentation requirement in paragraph (a)(4)(iii)), 
then the Contracting Officer does not need to take any further action in 
verifying the offeror's compliance with the requirements of this subpart 
and (48 CFR) FAR 22.8.
    (2) If the offeror does not appear in the National Preaward 
Registry, and the estimated amount of the contract or subcontract is 
expected to be under $10 million then the contracting officer may rely 
on the Reps and Certs as sufficient verification of the offeror's 
compliance.
    (3) If the offeror does not appear in the National Preaward Registry 
and the estimated amount of the contract or subcontract is $10 million 
or more, then the contracting officer must request a preaward clearance 
from the appropriate OFCCP regional office, in accordance with 48 CFR 
22.805(a). If the initial contact with OFCCP is by telephone, the 
contracting officer and OFCCP are to mutually determine what information 
is to be included in the written verification request. The contracting 
officer may need to provide the following information in addition to the 
items listed in FAR 22.805(a)(5), if so requested by the OFCCP regional 
office:
    (i) Name, title, address, and telephone number of a contract person 
for the prospective contractor;
    (ii) A description of the type of organization (university, 
nonprofit, etc.) and its ownership (private, foreign, state, etc.).
    (iii) Names and addresses of the organizations in a joint venture 
(if any).
    (iv) Type of procurement (new contract--RFP or IFB, amendment, etc.) 
and the period of the contract.
    (v) Copy of approved Reps and Certs.
    (d) In the event that OFCCP reports that the offeror is not in 
compliance, negotiations with the offeror shall be terminated.
    (e) Documentation for the contract file. Every contract file must 
contain completed and signed Reps and Certs. The file must clearly show 
that these documents have been reviewed and accepted by the contracting 
officer. If the Reps and Certs were revised to make them acceptable (see 
paragraph (b) of this section), the file must also document what changes 
were required and why, and verify that the changes were made. The 
contracting officer shall also document the OFCCP National Preaward 
Registry review (see paragraph (c)(1) of this section), and, if the 
Registry does not include the offeror:
    (1) For contracts or modifications over $10,000 but less than $10 
million, the file must contain a statement from the contracting officer 
that the contractor is considered in compliance with EEO requirements, 
and giving the basis for this statement (see paragraph (c)(2) of this 
section). This statement may be in a separate memorandum to the file or 
in the memorandum of negotiation.
    (2) For contracts or modifications of $10 million or more, the file 
must document all communications with OFCCP regarding the offeror's 
compliance. Such documentation includes copies of any written 
correspondence and a record of telephone conversations, specifying the 
name, address, and telephone number of the person contacted, a summary 
of the information presented, and any advice given by OFCCP.
    (f) Documentation in the event of non-compliance. In the event OFCCP 
determines that a prospective contractor is not in compliance, a copy of 
OFCCP's written determination, and a summary of resultant action taken 
(termination of negotiations, notification of offeror and cognizant 
technical officer, negotiation with next offeror in competitive range, 
resolicitation, etc.) will be placed in the contract file for

[[Page 36]]

any contract which may result, together with other records related to 
unsuccessful offers, and retained for at least six months following 
award.

[64 FR 5007, Feb. 2, 1999; 64 FR 18481, Apr. 14, 1999]

        PART 724_PROTECTION OF PRIVACY AND FREEDOM OF INFORMATION

                Subpart 724.2_Freedom of Information Act

Sec.

Sec. 724.202 Policy.

    Authority: Sec. 621, Pub. L. 87-195, 75 Stat. 445, (22 U.S.C. 2381) 
as amended; E.O. 12163, Sept. 29, 1979, 44 FR 56673; 3 CFR, 1979 Comp., 
p. 435.

    Source: 49 FR 13248, Apr. 3, 1984, unless otherwise noted.

                Subpart 724.2_Freedom of Information Act



Sec. 724.202  Policy.

    The U.S. Agency for International Development's policies concerning 
implementation of the Freedom of Information Act are codified in 22 CFR 
part 212 (USAID Regulation 12).

                      PART 725_FOREIGN ACQUISITION

                 Subpart 725.1_Buy American Act_Supplies

Sec.

Sec. 725.170 Exceptions for Foreign Assistance Act functions.

                     Subpart 725.4_Trade Agreements


Sec. 725.403 Exceptions.

             Subpart 725.70_Source, Origin, and Nationality


Sec. 725.701 General.

Sec. 725.702 Designation of authorized geographic code.

Sec. 725.703 Contractor employees.

Sec. 725.704 Source, origin and nationality requirements--Contract 
          clause.

Sec. 725.705 Local procurement--contract clause.

Sec. 725.706 Geographic source waivers.

    Authority: Sec. 621, Pub. L. 87-195, 75 Stat. 445, (22 U.S.C. 2381) 
as amended; E.O. 12163, Sept. 29, 1979, 44 FR 56673; 3 CFR, 1979 Comp., 
p. 435.

    Source: 49 FR 13248, Apr. 3, 1984, unless otherwise noted.

                 Subpart 725.1_Buy American Act_Supplies



Sec. 725.170  Exceptions for Foreign Assistance Act functions.

    In addition to the exception stated in FAR 25.102 for purchases for 
use outside the United States, there is an exception for economic 
assistance functions performed under authority of the Foreign Assistance 
Act. This exception is stated in Executive Order 11223, dated May 12, 
1965 (30 FR 6635). U.S. procurement restrictions are applied by USAID, 
however, as shown elsewhere in this part. These restrictions are 
generally tighter than the Buy American Act. As a general rule, the 
tighter USAID restrictions will be used. In the case of certain 
procurements for use within the United States, the Buy American 
provision may be used instead in the interest of uniformity among 
Federal Agencies procuring for domestic use.

                     Subpart 725.4_Trade Agreements



Sec. 725.403  Exceptions.

    FAR 25.4 establishes procedures for purchases under the Trade 
Agreements Act of 1979 (including GATT's Agreement on Government 
Procurement) and the North American Free Trade Agreement (NAFTA). Under 
both such agreements, USAID's contracts for the purpose of providing 
foreign assistance are not subject to the procedures set forth in FAR 
25.4. In contrast, USAID's operating expense-type administrative 
purchases (i.e., purchases for the direct benefit and use of USAID) are 
subject to the procedures in FAR 25.4, unless otherwise exempted by one 
of the exemptions specified in FAR 25.4.

[61 FR 39093, July 26, 1996]

             Subpart 725.70_Source, Origin, and Nationality



Sec. 725.701  General.

    USAID's source, origin and nationality requirements for program-
funded contracts and subcontracts are established in 22 CFR part 228, 
Rules on

[[Page 37]]

Source, Origin and nationality for Commodities and Services Financed by 
USAID. These policies as they apply to subcontracts and purchases under 
USAID program-funded contracts have been incorporated into the contract 
clauses referenced in 725.704 and 725.705 of this subpart.

[62 FR 40468, July 29, 1997]



Sec. 725.702  Designation of authorized geographic code.

    (a) The authorized geographic code or codes for an USAID contract 
shall be specified in the Schedule of each contract and shown on its 
cover page. If no geographic code is specified, the authorized code will 
be deemed to be Geographic Code 000, the U.S.
    (b) Individual country and geographic codes are defined in the 
Agency Geographic Code Book.

[49 FR 13248, Apr. 3, 1984, as amended at 61 FR 39093, July 26, 1996]



Sec. 725.703  Contractor employees.

    (a) Except as specifically provided in paragraph (b) of this 
section, there are no nationality restrictions on employees or 
consultants of either contractors or subcontractors providing services 
under an USAID-financed contract, except that they must be citizens of a 
Geographic Code 935 country, or non-U.S. citizens lawfully admitted for 
permanent residence in the U.S.
    (b) For USAID-financed construction projects where the contract is 
awarded to a U.S. firm, at least half of the supervisors, and any other 
specified key personnel, working at the project site must be U.S. 
citizens or permanent legal residents of the United States. Exceptions 
may be authorized by the Mission Director in writing if special 
circumstances make compliance impractical.

[51 FR 34985, Oct. 1, 1986]



Sec. 725.704  Source, origin and nationality requirements--Contract 

clause.

    The clause in 752.225-70 is required in all USAID program-funded 
contracts under which the contractor may procure goods or services.

[62 FR 40468, July 29, 1997]



Sec. 725.705  Local procurement--contract clause.

    Local procurement may be undertaken in accordance with the 
provisions of 22 CFR 228.40. All contracts involving performance 
overseas shall contain the clause in 752.225-71.

[62 FR 40468, July 29, 1997]



Sec. 725.706  Geographic source waivers.

    (a) Authority to waive source, origin, nationality, and 
transportation services requirements is set forth in chapters 103 and 
310 of the ADS.
    (b) The contracting officer shall insert the authorized geographic 
code based on an approved geographic source waiver in the Schedule of 
the contract as provided for in 725.702. In addition, the contracting 
officer shall place a copy of any approved geographic source waiver in 
the official contract file.

[49 FR 13248, Apr. 3, 1984, as amended at 52 FR 4144, Feb. 10, 1987; 61 
FR 39093, July 26, 1996; 62 FR 40468, July 29, 1997]

                  PART 726_OTHER SOCIOECONOMIC PROGRAMS

            Subpart 726.70_Disadvantaged Enterprises Program

Sec.

Sec. 726.7001 Scope of subpart.

Sec. 726.7002 Definitions.

Sec. 726.7003 Policy.

Sec. 726.7004 Determination to use other than full and open competition.

Sec. 726.7005 Exceptions.

Sec. 726.7006 Determination of status as a disadvantaged enterprise.

Sec. 726.7007 Requirement for subcontracting with disadvantaged 
          enterprises.

Sec. 726.7008 Limitations on subcontracting.

   Subpart 726.71_Relocation of U.S. Businesses, Assistance to Export 
      Processing Zones, Internationally Recognized Workers' Rights


Sec. 726.7101 Policy.

Sec. 726.7102 PD 20 provision.

    Authority: Sec. 621, Pub. L. 87-195, 75 Stat. 445, (22 U.S.C. 2381) 
as amended; E.O.12163, Sept. 29, 1979, 44 FR 56673; 3 CFR, 1979 Comp., 
p. 435.

    Source: 55 FR 8470, Mar. 8, 1990, unless otherwise noted.

[[Page 38]]

            Subpart 726.70_Disadvantaged Enterprises Program



Sec. 726.7001  Scope of subpart.

    This subpart supplements FAR part 19 and implements the provisions 
of certain foreign assistance appropriations acts (see section 706.302-
71(a)) concerning disadvantaged enterprises which require, in general, 
that not less than ten percent of the aggregate amount made available 
for development assistance and for assistance for famine recovery and 
development in Africa shall be made available to disadvantaged 
enterprises. See part 705 and part 706 for additional provisions on 
publicizing contract actions and using other than full and open 
competition.

[58 FR 8702, Feb. 17, 1993. Redesignated and amended at 61 FR 39093, 
July 26, 1996; 62 FR 40468, July 29, 1997]



Sec. 726.7002  Definitions.

    (a) Controlled by socially and economically disadvantaged 
individuals means management and daily business are controlled by one or 
more such individuals.
    (b) Disadvantaged enterprises means U.S. organizations or 
individuals that are:
    (1) Business concerns (as defined in FAR 19.001) owned and 
controlled by socially and economically disadvantaged individuals;
    (2) Institutions designated by the Secretary of Education, pursuant 
to 34 CFR 608.2, as historically black colleges and universities;
    (3) Colleges or universities having a student body in which more 
than 40 percent of the students are Hispanic American; or
    (4) Private voluntary organizations which are controlled by 
individuals who are socially and economically disadvantaged.
    (c) Economically disadvantaged individuals has the same meaning as 
in FAR 19.001, except that the term includes women.
    (d) Owned by socially and economically disadvantaged individuals 
means at least 51 percent owned by one or more individuals who are both 
socially and economically disadvantaged, or a publicly owned business 
having at least 51 percent of its stock owned by one or more socially 
and economically disadvantaged individuals.
    (e) Small disadvantaged business means a small business concern (as 
defined in FAR 19.001) that is at least 51 percent unconditionally owned 
by one or more individuals who are both socially and economically 
disadvantaged (as defined in this section), or a publicly owned business 
that has at least 51 percent of its stock unconditionally owned by one 
or more socially and economically disadvantaged individuals (as defined 
in this section) and that has its management and daily business 
controlled by one or more such individuals.
    (f) Socially disadvantaged individuals has the same meaning as in 
FAR 19.001, except that the term includes women.

[56 FR 27209, June 13, 1991, as amended at 56 FR 52212, Oct. 18, 1991. 
Redesignated at 61 FR 39093, July 26, 1996]



Sec. 726.7003  Policy.

    USAID promotes participation in its projects by disadvantaged 
enterprises. In order to achieve the goals in foreign assistance 
appropriation acts, contracts which are to be funded from amounts made 
available from the appropriations cited in section 706.302-71(a)(1) are 
subject to the following policies:
    (a) Authority in section 8(a) of the Small Business Act (15 U.S.C. 
637(a)) shall be used to the maximum practicable extent;
    (b) Other than full and open competition in contracting with certain 
disadvantaged enterprises shall be authorized in accordance with 
706.302-71;
    (c) Subcontracting with disadvantaged enterprises shall be carried 
out in accordance with section 726.7007;
    (d) In accordance with 705.207, the Office of Small and 
Disadvantaged Business Utilization (OSDBU) shall be notified at least 
seven business days before publicizing a proposed procurement in excess 
of $100,000.

[56 FR 27209, June 13, 1991. Redesignated at 61 FR 39093, July 26, 1996, 
as amended at 62 FR 40468, July 29, 1997]

[[Page 39]]



Sec. 726.7004  Determination to use other than full and open 

competition.

    The determinations required in order to use the authority under 
706.302-71 for other than full and open competition shall be made by the 
contracting officer in consultation with the Director of OSDBU. In the 
event of a disagreement between the contracting officer and the Director 
of OSDBU, the head of the contracting activity shall make the final 
determination.

[55 FR 8470, Mar. 8, 1990. Redesignated at 61 FR 39093, July 26, 1996.]



Sec. 726.7005  Exceptions.

    The notification requirement in 705.207 and the subcontracting 
requirement in 726.7007 are based on statutory requirement and may not 
be deviated from under the provisions of subpart 701.4. By statute, the 
Administrator or designee may determine that these requirements do not 
apply to a particular contract or category of contracts. The M/OAA 
Director has been designated to make such determinations. One such 
determination concerning subcontracting is set out in 726.7007.

[58 FR 8702, Feb. 17, 1993. Redesignated at 61 FR 39093, July 26, 1996, 
as amended at 62 FR 40468, July 29, 1997; 64 FR 42040, Aug. 3, 1999; 72 
FR 19670, Apr. 19, 2007]



Sec. 726.7006  Determination of status as a disadvantaged enterprise.

    (a) To be eligible for an award under AIDAR 706.302-71 providing for 
other than full and open competition, the contractor must qualify, as of 
both the date of submission of its offer and the date of contract award, 
as a small disadvantaged business (as defined in 726.7002), an 
historically black college or university, a college or university in 
which more than 40 percent of the students are Hispanic Americans, or a 
private voluntary organization controlled by individuals who are 
socially and economically disadvantaged. The contracting officer shall 
insert the provision at 752.226-1 in any solicitation or contract to be 
awarded under the provisions of 706.302-71.
    (b) The contracting officer shall accept an offeror's 
representations and certifications under the provisions referenced above 
that it is a small disadvantaged business unless he or she determines 
otherwise based on information contained in a challenge of the offeror's 
status by the Small Business Administration or another offeror, or 
otherwise available to the contracting officer.

[55 FR 8470, Mar. 8, 1990, as amended at 56 FR 27209, June 13, 1991. 
Redesignated at 61 FR 39093, July 26, 1996, as amended at 62 FR 40468, 
July 29, 1997]



Sec. 726.7007  Requirement for subcontracting with disadvantaged 

enterprises.

    (a) In addition to the requirements in FAR subpart 19.7, any new 
contract or modification which constitutes new procurement (except for a 
contract or modification with a disadvantaged enterprise as defined in 
726.7002) with respect to which more than $500,000 is to be funded with 
amounts made available for development assistance or from the 
appropriations cited in section 706.302-71(a)(1) shall contain a 
provision requiring that not less than ten percent of the dollar value 
of the contract must be subcontracted to disadvantaged enterprises, 
including disadvantaged enterprises which are not small.
    (b) This requirement does not apply when the contracting officer, 
with the concurrence of the Director of OSDBU, certifies there is no 
realistic expectation of U.S. subcontracting opportunities and so 
documents the file. If the contracting officer and the Director of OSDBU 
do not agree, the determination will be made by the head of the 
contracting activity. See 726.7005 for guidance on other potential 
exceptions.
    (c) The contracting officer shall insert the clause in 752.226-2 in 
any solicitation or contract as provided in paragraph (a) of this 
section, unless exempted in accordance with the provisions of paragraph 
(b) of this section.

[55 FR 8470, Mar. 8, 1990, as amended at 56 FR 27209, June 13, 1991; 56 
FR 52213, Oct. 18, 1991; 58 FR 42255, Aug. 9, 1993. Redesignated at 61 
FR 39093, July 26, 1996, as amended at 62 FR 40468, July 29, 1997; 62 FR 
47532, Sept. 9, 1997]



Sec. 726.7008  Limitations on subcontracting.

    The contracting officer shall insert the clause at 752.226-3, 
Limitations on Subcontracting, in any solicitation and

[[Page 40]]

contract for technical assistance services which is to be awarded under 
the authority of 706.302-71.

[58 FR 42255, Aug. 9, 1993. Redesignated at 61 FR 51235, Oct. 1, 1996]

   Subpart 726.71_Relocation of U.S. Businesses, Assistance to Export 
      Processing Zones, Internationally Recognized Workers' Rights



Sec. 726.7101  Policy.

    USAID Policy Determination (PD) 20, ``Guidelines to Assure USAID 
Programs do not Result in the Loss of Jobs in the U.S.'' implemented 
statutory prohibitions on expenditure of appropriated funds. The PD 
contains a standard provision for inclusion in USAID-funded grants and 
inter-agency agreements and indicates that when the PD applies to a 
contract, appropriate provisions covering the subject matter are to be 
included. When the provisions of PD 20 do apply to a contract, the 
cognizant technical office shall provide to the contracting officer 
appropriate language tailored to the specific circumstances for the 
contract statement of work, or if applicable to the circumstances, the 
provision included in the PD (see 726.7102) may be used as a clause in 
the contract. The provision is not required in subcontracts.

[61 FR 39093, July 26, 1996]



Sec. 726.7102  PD 20 provision.

 Relocation of U.S. Businesses, Assistance to Export Processing Zones, 
          Internationally Recognized Workers' Rights (JAN 1994)

    No funds or other support provided hereunder may be used in an 
activity reasonably likely to involve the relocation or expansion 
outside of the United States of an enterprise located in the United 
States if non-U.S. production in such relocation or expansion replaces 
some or all of the production of, and reduces the number of employees 
at, said enterprise in the United States.
    No funds or other support provided hereunder may be used in an 
activity the purpose of which is the establishment or development in a 
foreign country of any export processing zone or designated area where 
the labor, environmental, tax, tariff, and safety laws of the country 
would not apply, without the prior approval of USAID.
    No funds or other support provided hereunder may be used in an 
activity which contributes to the violation of internationally 
recognized rights of workers in the recipient country, including those 
in any designated zone or area in that country.

[61 FR 39093, July 26, 1996]

[[Page 41]]

              SUBCHAPTER E_GENERAL CONTRACTING REQUIREMENTS

                 PART 727_PATENTS, DATA, AND COPYRIGHTS

               Subpart 727.4_Rights in Data and Copyrights

Sec.

Sec. 727.404 Basic rights in data clause.

Sec. 727.409 Solicitation provisions and contract clauses.

    Authority: Sec. 621, Pub. L. 87-195, 75 Stat. 445, (22 U.S.C. 2381) 
as amended; E.O. 12163, Sept. 29, 1979, 44 FR 56673; 3 CFR 1979 Comp., 
p. 435.

    Source: 72 FR 53163, Sept. 18, 2007, unless otherwise noted.

    Effective Date Note: At 72 FR 53163, Sept. 18, 2007, part 727 was 
added, effective October 18, 2007.

               Subpart 727.4_Rights in Data and Copyrights



Sec. 727.404  Basic rights in data clause.

    (a) through (f) [Reserved]
    (g) When the contract includes a requirement for the contractor to 
assign copyright to the government or another party, the contracting 
officer shall incorporate (48 CFR) 752.227-14 and/or include an express 
limitation or restriction in the contract. USAID contracting officers 
will assert such a right in limited circumstances in accordance with the 
principles as stated in (48 CFR) 27.402.



Sec. 727.409  Solicitation provisions and contract clauses.

    (a) When the contracting officer incorporates (48 CFR) FAR 52.227-
14, and if the release or publication of data first produced in the 
performance of the contract may be sensitive to U.S. Government 
relations with the cooperating country, the contracting officer must use 
the clause at (48 CFR) 752.227-14.
    (b) through (m) [Reserved]
    (n) The prescriptions for provisions and clauses in (48 CFR) FAR 
27.409 apply to all USAID contracts regardless of place of performance.

                      PART 728_BONDS AND INSURANCE

                           Subpart 728.1_Bonds

Sec.

Sec. 728.105-1 Advance payment bonds.

                         Subpart 728.3_Insurance


Sec. 728.305-70 Overseas worker's compensation and war-hazard 
          insurance--waivers and USAID insurance coverage.

Sec. 728.307-2 Liability.

Sec. 728.307-70 Medical Evacuation (MEDEVAC) Services (Mar 1993).

Sec. 728.309 Contract clause for worker's compensation insurance.

Sec. 728.313 Contract clauses for insurance of transportation or 
          transportation-related services.

    Authority: Sec. 621, Pub. L. 87-195, 75 Stat. 445, (22 U.S.C. 2381) 
as amended; E.O. 12163, Sept. 29, 1979, 44 FR 56673; 3 CFR, 1979 Comp., 
p. 435.

    Source: 49 FR 13249, Apr. 3, 1984, unless otherwise noted.

                           Subpart 728.1_Bonds



Sec. 728.105-1  Advance payment bonds.

    (a) Generally, advance payment bonds will not be required in 
connection with USAID contracts containing an advance payment provision. 
In lieu thereof, contracting officers will follow procedures set forth 
in FAR 32.409-3.
    (b) Whenever a contracting officer considers that an advance payment 
bond is necessary, the contracting officer will: (1) Establish a bond 
penalty that will adequately protect interests of the Government, (2) 
use the USAID Advance Payment Bond format, (3) place bond with a surety 
currently approved by the U.S. Treasury Department according to the 
latest Treasury Department Circular 570, (4) stipulate that the cost of 
the bond shall not exceed a rate of $7.50 per $1,000 per annum based on 
the penalty of the bond, without the prior written approval of the 
Office of Acquisition and Assistance, Policy Division (M/OAA/P).
    (c) Where the surety's obligation under an advance payment bond 
covers all advances made to the contractor

[[Page 42]]

during the term of the contract, no release should be issued to the 
surety until all advances made and to be made under the contract have 
been fully liquidated in accordance with the provisions of the contract, 
such as no-pay vouchers, reports of expenditures, or by refund. Where 
the surety's obligation under the bond is limited to advances made 
during a specified period of time, no release should be issued to the 
surety until all advances made and to be made during the specified 
period have been liquidated as aforesaid.

[49 FR 13249, Apr. 3, 1984, as amended at 50 FR 50302, Dec. 10, 1985; 55 
FR 6802, Feb. 27, 1990; 56 FR 67224, Dec. 30, 1991; 59 FR 33446, June 
29, 1994; 72 FR 19670, Apr. 19, 2007]

                         Subpart 728.3_Insurance



Sec. 728.305-70  Overseas worker's compensation and war-hazard 

insurance--waivers and USAID insurance coverage.

    (a) Upon the recommendation of the USAID Administrator, the 
Secretary of Labor may waive the applicability of the Defense Base Act 
(DBA) with respect to any contract, subcontract, or subordinate 
contract, work location, or classification of employees. Either the 
contractor or USAID can request a waiver from coverage. Such a waiver 
can apply to any employees who are not U.S. citizens, not residents of, 
or not hired in the United States. Waivers requested by the contractor 
are submitted to the contracting officer for approval and further 
submission to the Department of Labor, which grants the waiver. 
Application for a waiver is submitted on Labor Department Form BEC 565. 
USAID has a number of blanket waivers already in effect for certain 
countries that are applicable to its direct contracts with contractors 
performing in such countries. Where such waivers are granted from 
coverage under the DBA, the waiver is conditioned on providing other 
worker's compensation coverage to employees to which the waiver applies. 
Usually this takes the form of securing worker's compensation coverage 
of the country where work will be performed or of the country of the 
employee's nationality, whichever offers greater benefits. The 
Department of Labor has granted partial blanket waivers of DBA coverage 
applicable to USAID-financed contracts performed in certain countries, 
subject to two conditions:
    (1) Employees hired in the United States by the contractor, and 
citizens or residents of the United States are to be provided DBA 
insurance coverage;
    (2) Waived employees (i.e., employees who are neither U.S. citizens 
nor U.S. resident aliens, and who were hired outside the United States) 
will be provided worker's compensation benefits as required by the laws 
of the country in which they are working or the laws of their native 
country, whichever offers greater benefits. Information as to whether a 
DBA Waiver has been obtained by USAID for a particular country may be 
obtained from the cognizant USAID contracting officer.
    (b) To assist contractors in securing insurance at minimal rates for 
the workmen's compensation insurance required under the DBA, and to 
facilitate meeting insurance requirements for such coverage, USAID, 
after open and competitive negotiation, has entered into a contract with 
an insurance carrier to provide such coverage at a specified rate. The 
terms of this contract require the insurance carrier to provide 
coverage, and the contractor to make payments to and handle its claims 
with that insurance carrier. Contracting officers are responsible for 
explaining and advising contractors of the details of securing such 
insurance.

[49 FR 13249, Apr. 3, 1984, as amended at 52 FR 4144, Feb. 10, 1987. 
Redesignated at 53 FR 50630, Dec. 16, 1988, and amended at 54 FR 16122, 
Apr. 21, 1989; 56 FR 67224, Dec. 30, 1991]



Sec. 728.307-2  Liability.

    (a)-(b) [Reserved]
    (c) Automobile liability. In order to ensure that private 
automobiles used by contractor employees stationed overseas under an 
USAID contract are properly insured, USAID has established minimum 
required coverages as a supplement to the FAR clause at 52.228-7. This 
supplemental coverage is specified in AIDAR 752.228-7, and is to be used 
in all USAID-direct contracts involving performance overseas.

[53 FR 50630, Dec. 16, 1988]

[[Page 43]]



Sec. 728.307-70  Medical Evacuation (MEDEVAC) Services (Mar 1993).

    The Contracting Officer shall insert the clause at 752.228-70 in all 
contracts which require performance by contractor employees overseas.

[59 FR 33446, June 29, 1994]



Sec. 728.309  Contract clause for worker's compensation insurance.

    (a) Because of the volume of projects performed overseas resulting 
in contracts which require worker's compensation insurance, USAID has 
contracted with an insurance carrier to provide the required insurance 
for all USAID contractors. It is therefore necessary to supplement the 
FAR clause at 52.228-3 with the additional coverage specified in AIDAR 
752.228-3. The coverage specified in AIDAR 752.228-3 shall be used in 
addition to the coverage specified in FAR 52.228-3 in all USAID-direct 
contracts involving performance overseas.

[53 FR 50630, Dec. 16, 1988]



Sec. 728.313  Contract clauses for insurance of transportation or 

transportation-related services.

    (a) USAID is required by law to include language in all its direct 
contracts and subcontracts ensuring that all U.S. marine insurance 
companies have a fair opportunity to bid for marine insurance when such 
insurance is necessary or appropriate under the contract. USAID has 
therefore established a supplementary preface to the clause at FAR 
52.228-9. This supplementary preface is set forth in AIDAR 752.228-9, 
and is required for use in any USAID-direct contract where marine 
insurance is necessary or appropriate.

[53 FR 50630, Dec. 16, 1988]

            PART 731_CONTRACT COST PRINCIPLES AND PROCEDURES

                       Subpart 731.1_Applicability

Sec.

Sec. 731.109 Advance agreements.

          Subpart 731.2_Contracts With Commercial Organizations


Sec. 731.205-6 Compensation for personal services.

Sec. 731.205-46 Travel costs.

Sec. 731.205-70 Overseas recruitment incentive.

Sec. 731.205-71 Salary supplements for Host Government employees.

          Subpart 731.3_Contracts With Educational Institutions


Sec. 731.370 Predetermined fixed rates for indirect costs.

Sec. 731.371 Compensation for personal services.

Sec. 731.372 Fringe benefits.

Sec. 731.373 Overseas recruitment incentive.

          Subpart 731.7_Contracts With Nonprofit Organizations


Sec. 731.770 OMB Circular A-122; cost principles for nonprofit 
          organizations; USAID implementation.

Sec. 731.771 Bid and proposal costs.

Sec. 731.772 Compensation for personal services.

Sec. 731.773 Independent research and development costs.

Sec. 731.774 Overseas recruitment incentive.

    Authority: Sec. 621, Pub. L. 87-195, 75 Stat. 445, (22 U.S.C. 2381) 
as amended; E.O. 12163, Sept. 29, 1979, 44 FR 56673; 3 CFR, 1979 Comp., 
p. 435.

    Source: 49 FR 13250, Apr. 3, 1984, unless otherwise noted.

                       Subpart 731.1_Applicability



Sec. 731.109  Advance agreements.

    Advance agreements on selected costs may be negotiated with USAID 
contractors by the Overhead and Special Cost and Contract Close-Out 
Branch, Office of Acquisition and Assistance. Such advance 
understandings will be applicable to all USAID contracts with that 
contractor.

[49 FR 13250, Apr. 3, 1984, as amended at 50 FR 50302, Dec. 10, 1985; 51 
FR 20651, June 6, 1986; 72 FR 19670, Apr. 19, 2007]

          Subpart 731.2_Contracts With Commercial Organizations



Sec. 731.205-6  Compensation for personal services.

    (a) General. When establishing the workweek for employees overseas 
the contractor will take local and USAID Mission practice into account 
and will insure that the workweek is compatible with that of those USAID 
Mission and Cooperating Country employees with whom the contractor will 
be working.

[[Page 44]]

    (b) Salaries and wages. It is USAID policy that if an employee's 
base salary plus overseas recruitment incentive, if any (see AIDAR 
731.205-70) exceeds the USAID Contractor Salary Threshold (USAID CST), 
as stated in USAID's Automated Directives System (ADS) Chapter 302 USAID 
Direct Contracting (available at http://www.usaid.gov/policy/ads/300/
302.pdf), it will be allowable only if approved in writing by the 
contracting officer. The contracting officer shall only provide such 
approval after internal Agency procedures for review/approval of 
salaries in excess of the USAID CST in ADS 302 have been followed. USAID 
policies on compensation of third country national or cooperating 
country national employees are set forth in AIDAR 722.170.
    (d)-(l) [Reserved]
    (m) Fringe benefits. USAID's policies on certain fringe benefits 
related to overseas service, including but not limited to leave, 
holidays, differentials and allowances, etc. are set forth in the 
appropriate contract clauses in AIDAR subpart 752.70.

[57 FR 5235, Feb. 13, 1992, as amended at 60 FR 11913, Mar. 3, 1995; 62 
FR 40468, July 29, 1997; 64 FR 5008, Feb. 2, 1999; 72 FR 19669, Apr. 19, 
2007]



Sec. 731.205-46  Travel costs.

    It is USAID policy to require prior written approval of 
international travel by the Contacting Officer. See AIDAR 752.7032 for 
specific requirements and procedures.

[57 FR 5236, Feb. 13, 1992]



Sec. 731.205-70  Overseas recruitment incentive.

    Note: the term employee as used in this section means an employee 
who is a U.S. citizen or a U.S. resident alien.)

    (a) If a contractor employee serving overseas under a contract does 
not qualify for the exemption for overseas income provided under section 
911 of the U.S. Internal Revenue Code (26 U.S.C. 911), such employee is 
eligible to receive an overseas recruitment incentive (ORI), to the 
extent the ORI: Is authorized by the contractor's normal policy and 
practice; is deemed necessary by the contractor to recruit and retain 
qualified employees for overseas services; and does not exceed 10% of 
the base salary of the employee from date of arrival at overseas post to 
begin assignment to date of departure from post at the end of 
assignment. ORI is to be paid as a single payment at the end of the 
employee tour of duty overseas. The contractor shall take all reasonable 
and prudent steps to ensure that ORI is not paid to any employee who has 
received the IRS section 911 exemption.
    (b) In the event that an employee subsequently receives a section 
911 exclusion for any part of the base salary upon which this supplement 
has been paid, such supplement or appropriate portion thereof shall be 
reimbursed by the contractor to USAID with interest. The interest shall 
be calculated at the average U.S. Treasury rate in effect for the period 
that the contractor or his employee had the funds. Neither the 
contractor's nor the subcontractor's inability to collect refunds from 
eligible employees shall be used as a basis to excuse subsequent refunds 
by the contractor to USAID.

[57 FR 5236, Feb. 13, 1992]



Sec. 731.205-71  Salary supplements for Host Government employees.

    (a) Definitions. (1) A Host Government (HG) employee is a person 
paid by the HG, occupying an established position, either temporary or 
permanent, part-time or full-time, within a HG institution.
    (2) An HG institution is an organization in which the government 
owns at least a fifty percent share or receives at least fifty percent 
of its financial support from the government.
    (b) General. Salary supplement occurs when payments are made that 
augment an HG employee's base salary or premiums, overtime, extra 
payments, incentive payment and allowances for which the HG employee 
would qualify under HG rules or practices for the performance of his/
hers regular duties or work performed during his/hers regular office 
hours. Per diem, invitational travel, honoraria and payment for work 
carried out outside of normal working hours are not considered to be 
salary supplements subject to the provisions in USAID policy referenced 
in paragraph (c) of this section.

[[Page 45]]

    (c) Salary supplements are eligible for USAID financing only when 
authorized in accordance with USAID policy established in the cable 
State 119780 dated April 15, 1988 (on ADS-CD under USAID Handbooks, 
Handbook 1). If salary supplements have been authorized in a particular 
case, the Contracting Officer shall provide written approval to the 
contractor in order for such costs to be eligible. Any specific 
requirements or limitations shall be specified in the approval.
    (d) Contracting Officers shall insert the Clause at 752.231-71 in 
all contracts in which there is a possibility of the need of HG 
employees. It should also be inserted in all subsequent subcontracts.

[64 FR 16649, Apr. 6, 1999]

          Subpart 731.3_Contracts With Educational Institutions



Sec. 731.370  Predetermined fixed rates for indirect costs.

    Section 635(k) of the Foreign Assistance Act of 1961, as amended, 
authorizes USAID to use predetermined fixed rates in determining the 
indirect costs applicable under contracts with educational institutions.



Sec. 731.371  Compensation for personal services.

    (a) General. When establishing the workweek for employees overseas 
the contractor will take local and USAID Mission practice into account 
and will ensure that the workweek is compatible with that of those USAID 
Mission and Cooperating Country employees with whom the contractor will 
be working.
    (b) Salaries and wages. (1) The policies set forth in AIDAR 731.205-
6(b) are also applicable to contracts with a nonprofit organization.
    (2) In considering consulting income as a factor when determining 
allowable salary for service under a contract:
    (i) For faculty members working under annual appointments, salary 
for service under the contract may include the employee's on-campus 
salary plus ``consulting income'' (that is, income from employment other 
than the employee's regular on-campus appointment, excluding business or 
other activities not connected with the employee's profession) earned 
during the year preceding employment under the contract.
    (ii) For faculty members working under academic year appointments, 
salary for service under the contract may include the employee's on-
campus academic year salary plus ``consulting income'' as defined above 
earned during the year proceeding employment under the contract, or 
salary for service under the contract may be derived by annualizing the 
academic year salary (in which case ``consulting income'' may not be 
included).
    (3) USAID policies and compensation of third country national or 
cooperating country national employees are set forth in AIDAR 722.170.

[57 FR 5236, Feb. 13, 1992, as amended at 60 FR 11913, Mar. 3, 1995; 62 
FR 40469, July 29, 1997; 64 FR 5008, Feb. 2, 1999; 72 FR 19669, Apr. 19, 
2007]



Sec. 731.372  Fringe benefits.

    USAID's policies on certain fringe benefits related to overseas 
service, including but not limited to leave, holidays, differentials and 
allowances, etc. are set forth in the appropriate contract clauses in 
AIDAR 752.70.

[57 FR 5236, Feb. 13, 1992]



Sec. 731.373  Overseas recruitment incentive.

    USAID's policies regarding overseas recruitment incentives are set 
forth in AIDAR 731.205-70. These policies are also applicable to 
contracts with an educational institution.

[57 FR 5236, Feb. 13, 1992]

          Subpart 731.7_Contracts With Nonprofit Organizations



Sec. 731.770  OMB Circular A-122, cost principles for nonprofit 

organizations; USAID implementation.

    (a) Paragraph 6 of the transmittal letter for OMB Circular A-122 
specifies that ``Agencies shall designate a liaison official to serve as 
the agency representative on matters relating to the implementation of 
this Circular.'' The Director, Office of Acquisition and Assistance, has 
been so designated. The

[[Page 46]]

Overhead and Special Cost and Contract Close-Out Branch, Office of 
Acquisition and Assistance (OCC) provides staff assistance to the 
Director concerning OMB Circular A-122. OCC is also responsible for 
obtaining cognizance under the criteria in the transmittal letter for 
OMB Circular A-122; for liaison with other cognizant agencies; for 
authorizing exclusion of OMB Circular A-122 coverage for a particular 
nonprofit organization pursuant to paragraph 5 of the OMB Circular A-122 
transmittal letter; and for advice and assistance in applying OMB 
Circular A-122 cost principles.
    (b) Paragraph 4b of the OMB Circular A-122 transmittal letter 
contains a definition of prior approval as follows:

    Prior approval means securing the awarding agency's permission in 
advance to incur costs for those items that are designated as requiring 
prior approval by OMB Circular A-122. Generally, this permission will be 
in writing. Where an item of cost requiring prior approval is specified 
in the budget of an award, approval of the budget constitute approval of 
that cost.


Consequently, an award containing a budget constitutes prior approval of 
the direct cost item in the budget, unless otherwise annotated. 
Accordingly, award budgets should be appropriately annotated 
substantially as follows:

    Inclusion of any cost in the line item budget of this award does not 
obviate the requirement for prior approval of cost items designated as 
requiring prior approval by OMB Circular A-122 ; or
    In accordance with the requirements to OMB Circular No. A-122, 
approval is granted to incur costs for (name specific item or items) 
which are included in the budget of this award.

[49 FR 13250, Apr. 3, 1984, as amended at 50 FR 50302, Dec. 10, 1985; 51 
FR 20651, June 6, 1986; 56 FR 67225, Dec. 30, 1991; 72 FR 19670, Apr. 
19, 2007]



Sec. 731.771  Bid and proposal costs.

    Pending the establishment of Government-wide principles in 
Attachment B of OMB Circular A-122, USAID will treat bid and proposal 
costs as follows:
    (a) Bid and proposal costs are the costs of preparing bids, 
proposals, and applications for potential activities such as Government 
and non-Government grants, contracts and other agreements, including the 
development of scientific, cost, and other data needed to support such 
bids, proposals, and applications. Except as provided in (b) below, bid 
and proposal costs of the current accounting period of both successful 
and unsuccessful bids and proposals normally should be treated as 
indirect costs for allocation to all current activities, and no bid and 
proposal costs of past accounting periods will be allocable to the 
current period. However, if the organization's established practice is 
to treat bid and proposal costs by some other method, the results 
obtained may be accepted only if found to be reasonable and equitable.
    (b) Bid and proposal costs incurred by the organization to obtain 
unrestricted funds are to be treated as fund raising and allocated an 
appropriate share of indirect costs under the conditions described in 
paragraph B.3 of Attachment A to OMB Circular A-122.



Sec. 731.772  Compensation for personal services.

    The policies set for in AIDAR 731.205-6 are also applicable to 
contracts with a nonprofit organization.

[57 FR 5236, Feb. 13, 1992]



Sec. 731.773  Independent research and development costs.

    Pending establishment of Government-wide principles in Attachment B 
of OMB Circular A-122, USAID will apply the cost principles at FAR 
31.205-18 for independent research and development costs.



Sec. 731.774  Overseas recruitment incentive.

    USAID's policies regarding overseas recruitment incentives are set 
forth in AIDAR 731.205-70. These policies are also applicable to 
contracts with a nonprofit organization.

[57 FR 5236, Feb. 13, 1992]

                       PART 732_CONTRACT FINANCING

                          Subpart 732.1_General

Sec.

Sec. 732.111 Contract clauses.

                     Subpart 732.4_Advance Payments


Sec. 732.401 Statutory authority.

[[Page 47]]


Sec. 732.402 General.

Sec. 732.403 Applicability.

Sec. 732.406-70 Agency-issued letters of credit.

Sec. 732.406-71 Circumstances for use of an LOC.

Sec. 732.406-72 Establishing an LOC.

Sec. 732.406-73 LOC contract clause.

Sec. 732.406-74 Revocation of the LOC.

    Authority: Sec. 621, Pub. L. 87-195, 75 Stat. 445, (22 U.S.C. 2381) 
as amended; E.O. 12163, Sept. 29, 1979, 44 FR 56673; 3 CFR, 1979 Comp., 
p. 435.

                          Subpart 732.1_General



Sec. 732.111  Contract clauses.

    (a) [Reserved]
    (b) USAID may obtain short term and (less frequently) long-term 
indefinite quantity professional services through Agency-specific 
indefinite quantity contracts that are a combination of contract types. 
Rather than using the fixed-price payment clauses for indefinite 
quantity contracts, when these IQCs provide for fixed daily rates (which 
may include wages, overhead, general and administrative expenses, fringe 
benefits, and profit) for services and reimbursement of other direct 
costs (such as travel and transportation) at cost, then the payment 
clause at 752.232-7 shall be used in the contract.

[61 FR 39094, July 26, 1996]

                     Subpart 732.4_Advance Payments

    Source: 56 FR 67225, Dec. 30, 1991, unless otherwise noted.



Sec. 732.401  Statutory authority.

    (a) Sections 635 (b) of the Foreign Assistance Act and Executive 
Order 11223, May 12, 1965, 30 FR 6635, permit the making of advance 
payments with respect to functions authorized by the Foreign Assistance 
Act. Advance payments may also be made under section 305 of the Federal 
Property and Administrative Services Act of 1949, which provides 
authority, not otherwise available to USAID, to take a paramount lien.
    (b) The Act of August 28, 1968, Public Law 85-804 does not apply to 
USAID.

[56 FR 67225, Dec. 30, 1991, as amended at 62 FR 40469, July 29, 1997]



Sec. 732.402  General.

    (a)-(d) [Reserved]
    (e)(1) U.S. Dollar advances to for-profit organizations, including 
advances for disbursement to grantees, shall be processed and approved 
in accordance with ADS 583.5.6b.
    (2) All local currency advances to for-profit organizations require 
the approval of the Head of the Contracting Activity, after consultation 
with the Mission Controller.

[56 FR 67225, Dec. 30, 1991, as amended at 61 FR 39093, July 26, 1996; 
64 FR 5008, Feb. 2, 1999; 64 FR 42042, Aug. 3, 1999]



Sec. 732.403  Applicability.

    References to nonprofit contracts with nonprofit educational or 
research institutions for experimental, research and development work 
include nonprofit contracts with nonprofit institutions for: (a) 
technical assistance services provided to or for another country or 
countries, and (b) projects which concern studies, demonstrations and 
similar activities related to economic growth or the solution of social 
problems of developing countries.



Sec. 732.406-70  Agency-issued letters of credit.

    This subsection provides guidance on use of USAID issued letters of 
credit (LOC) for advance payments.



Sec. 732.406-71  Circumstances for use of an LOC.

    An LOC shall be used under the following circumstances:
    (a) The contracting officer has determined that an advance payment 
is necessary and appropriate in accordance with this subpart and the 
guidance provided in FAR 32.4;
    (b) USAID has, or expects to have, a continuing relationship of at 
least one year with the organization, and the annual amount required for 
advance financing will be at least $50,000; and
    (c) The Office of Financial Management, Cash Management and Payment 
Division (FM/CMP) agrees that the LOC payment method is appropriate.

[56 FR 67225, Dec. 30, 1991, as amended at 61 FR 39093, July 26, 1996]

[[Page 48]]



Sec. 732.406-72  Establishing an LOC.

    (a) While the contract will provide for the use of an LOC when it is 
justified under subsection 732.406-71, the LOC is a separate agreement 
between the contractor and FM/CMP, acting on behalf of the USAID 
Controller. The terms and conditions of the LOC are established by FM/
CMP/GIB.
    (b) In order to establish or amend an LOC, the contracting officer 
shall provide FM/CMP with the following information:
    (1) The name of the Contractor;
    (2) The official USAID contract number;
    (3) The obligated amount of the contract;
    (4) The budget plan code for the obligated funds;
    (5) The effective date and estimated completion date.
    (6) The contractor Federal Tax Identification Number.
    This information should be provided in writing to FM/CMP together 
with a request to establish or amend an LOC as early in the negotiation 
cycle as possible.
    (c) FM/CMP will prepare the LOC in accordance with USAID's LOC 
procedures; issue or amend and maintain the LOC in accordance with its 
terms and USAID procedures and regulations; and provide the contracting 
officer(s) a copy of each LOC and any other material governing its use 
at the time the LOC is issued or when it is amended or modified.

[56 FR 67225, Dec. 30, 1991, as amended at 61 FR 39093, July 26, 1996; 
64 FR 42042, Aug. 3, 1999]



Sec. 732.406-73  LOC contract clause.

    (a) If payment is to be provided by LOC, the contract shall contain 
the clause in subsection 752.232-70.
    (b) Contracting offices shall ensure that an appropriate (48 CFR) 
FAR payment clause is also included in the contract, in the event that 
the LOC is revoked pursuant to 732.406-74.

[56 FR 67225, Dec. 30, 1991, as amended at 64 FR 5008, Feb. 2, 1999]



Sec. 732.406-74  Revocation of the LOC.

    If during the term of the contract FM/CMP believes that the LOC 
should be revoked, FM/CMP may, after consultation with the cognizant 
contracting officer(s) and GC, revoke the LOC by written notification to 
the contractor. A copy of any such revocation notice will immediately be 
provided to the cognizant contracting officer(s).

                PART 733_PROTESTS, DISPUTES, AND APPEALS

                         Subpart 733.1_Protests

Sec.

Sec. 733.101 Definitions.

Sec. 733.103-70 Protests to the agency.

Sec. 733.103-71 Filing of protest.

Sec. 733.103-72 Responsibilities.

Sec. 733.103-73 Protests excluded from consideration.

        Subpart 733.27_USAID Procedures for Disputes and Appeals


Sec. 733.270-1 Designation of Armed Services Board of Contract Appeals 
          (ASBCA) to hear and determine appeals under USAID contracts.

Sec. 733.270-2 Special procedures regarding contract disputes appeals 
          promulgated pursuant to paragraph 2 of the Administrator's 
          designation.

    Authority: Sec. 621. Pub. L. 87-195, 73 Stat. 445 (22 U.S.C. 2381), 
as amended: E.O. 12163, Sept. 29, 1979, 44 FR 56673, 3 CFR, 1979 Comp. 
p. 435.

                         Subpart 733.1_Protests

    Source: 61 FR 39094, July 26, 1996, unless otherwise noted.



Sec. 733.101  Definitions.

    (a) All ``days'' referred to in this subpart are deemed to be 
``calendar days'', in accordance with FAR 33.101. In the case of USAID 
overseas offices with non-Saturday/Sunday weekend schedules, the 
official post weekend applies in lieu of Saturday and Sunday.
    (b) All other terms defined in FAR 33.101 are used herein with the 
same meaning.

[61 FR 39094, July 26, 1996, as amended at 64 FR 42042, Aug. 3, 1999]



Sec. 733.103-70  Protests to the agency.

    USAID follows the agency protest procedures in FAR 33.103, as 
supplemented by this section.

[[Page 49]]



Sec. 733.103-71  Filing of protest.

    (a) Protests must be in writing and addressed to the Contracting 
Officer for consideration by the M/OAA Director.
    (b) A protest shall include, in addition to the information required 
in FAR 33.103(d)(2), the name of the issuing Mission or office.
    (c) Material submitted by a protester will not be withheld from any 
interested party outside the government or from any government agency if 
the M/OAA Director decides to release such material, except to the 
extent that the withholding of such information is permitted or required 
by law or regulation.

[61 FR 39094, July 26, 1996; 61 FR 51235, Oct. 1, 1996, as amended at 64 
FR 42040, Aug. 3, 1999; 72 FR 19670, Apr. 19, 2007]



Sec. 733.103-72  Responsibilities.

    (a) M/OAA Director. The decision regarding an agency protest shall 
be made by the M/OAA Director within 30 days from the date a proper 
protest is filed unless the M/OAA Director determines that a longer 
period is necessary to resolve the protest, and so notifies the 
protester in writing. The M/OAA Director shall make his or her decision 
after personally reviewing and considering all aspects of the case as 
presented in the protest itself and in any documentation provided by the 
contracting officer, and after obtaining input and clearance from the 
Assistant General Counsel for Litigation and Enforcement (GC/LE). The 
decision shall be in writing and constitutes the final decision of the 
Agency.
    (b) Contracting Officer. The Contracting Officer is responsible for 
requesting an extension of the time for acceptance of offers as 
described in FAR 33.103(f)(2).

[61 FR 39094, July 26, 1996; 61 FR 51235, Oct. 1, 1996, as amended at 64 
FR 42040, Aug. 3, 1999; 72 FR 19670, Apr. 19, 2007]



Sec. 733.103-73  Protests excluded from consideration.

    (a) Contract administration. Disputes between a contractor and USAID 
are resolved pursuant to the disputes clause of the contract and the 
Contract Disputes Act of 1978.
    (b) Small business size standards and standard industrial 
classification. Challenges of established size standards or the size 
status of particular firms, and challenges of the selected standard 
industrial classification are for review solely by the Small Business 
Administration.
    (c) Procurement under Section 8(a) of the Small Business Act. 
Contracts are let under Section 8(a) of the Small Business Act to the 
Small Business Administration solely at the discretion of the 
Contracting Officer, and are not subject to review.
    (d) Protests filed in the General Accounting Office (GAO). Protests 
filed with the GAO will not be reviewed.
    (e) Procurements funded by USAID to which USAID is not a party. No 
protest of a procurement funded by USAID shall be reviewed unless USAID 
is a party to the acquisition agreement.
    (f) Subcontractor protests. Subcontractor protests will not be 
considered.
    (g) Judicial proceedings. Protests will not be considered when the 
matter involved is the subject of litigation before a court of competent 
jurisdiction or when the matter involved has been decided on the merits 
by a court of competent jurisdiction.
    (h) Determinations of responsibility by the contracting officer. A 
determination by the contracting officer that a bidder or offeror is or 
is not capable of performing a contract will not be reviewed by the M/
OAA Director.
    (i) Small Business Certificate of Competency Program. Any referral 
made to the Small Business Administration pursuant to section 8(b)(7) of 
the Small Business Act, or any issuance of, or refusal to issue, a 
certificate of competency under that section will not be reviewed by the 
M/OAA Director.

[61 FR 39094, July 26, 1996, as amended at 64 FR 42040, Aug. 3, 1999; 72 
FR 19670, Apr. 19, 2007]

        Subpart 733.27_USAID Procedures for Disputes and Appeals



Sec. 733.270-1  Designation of Armed Services Board of Contract Appeals 

(ASBCA) to hear and determine appeals under USAID contracts.

    (a) The ASBCA is hereby designated the authorized representative of 
the

[[Page 50]]

Administrator of the U.S. Agency for International Development (USAID) 
in hearing, considering, and determining as fully and finally as might 
the Administrator, appeals by contractors from decisions on disputed 
questions taken pursuant to the provisions of contracts requiring the 
determination of such appeals by the Administrator or his/her duly 
authorized representative or Board.
    (b) In acting under this designation, the ASBCA will follow such 
rules and procedures as are or may be prescribed for the conduct of 
Defense Department contract appeal cases, except for the rules entitled 
``Forwarding of Appeals'' (Rule 3) and ``Duties of the Contracting 
Officer'' (Rule 4), which subjects will be governed by procedures to be 
promulgated by the General Counsel of USAID with approval of the 
Chairman of the ASBCA.
    (c) The General Counsel of USAID will assure representation of the 
interests of the Government in proceedings before the ASBCA.
    (d) All officers and employees of USAID will cooperate with the 
ASBCA and Government counsel in the processing of appeals so as to 
assure their speedy and just determination.

[53 FR 4980, Feb. 19, 1988. Redesignated at 61 FR 39095, July 26, 1996; 
61 FR 51235, Oct. 1, 1996]



Sec. 733.270-2  Special procedures regarding contract disputes appeals 

promulgated pursuant to paragraph 2 of the Administrator's designation.

    (a) The following rules will apply, in lieu of Rules 3 and 4(a) of 
the ASBCA, to contract dispute appeals to the Administrator of the USAID 
or his/her authorized representative which are docketed with that Board.
    (b) Rule 3 (USAID)--Forwarding of Appeals. When a notice of appeal 
in any form has been received by the contracting officer, he/she shall 
endorse thereon the date of mailing (or date of receipt, if otherwise 
conveyed) and within 10 days shall forward said notice of appeal to the 
Board with a copy to the USAID General Counsel in Washington, DC. 
Following receipt by the Board of the original notice of an appeal 
(whether through the contracting officer or otherwise), the contractor, 
the contracting officer, and the USAID General Counsel will be promptly 
advised of its receipt, and the contractor will be furnished a copy of 
these rules.
    (c) Rule 4 (USAID). Preparation, Contents, Organization, Forwarding, 
and Status of Appeal File (Supersedes Rule 4, ``Duties of Contracting 
Officer'' of the ASBCA rules in effect on April 1, 1980).
    (d) Duties of Contracting Officer. Within 30 days of receipt of an 
appeal or advice that an appeal has been filed, the contracting officer 
shall assemble and transmit to the USAID General Counsel in Washington, 
DC, two copies of all documents pertinent to the appeal, including:
    (1) The decision and findings of fact from which appeal is taken;
    (2) The contract, including specifications and pertinent amendments, 
plans and drawings;
    (3) All correspondence between the parties pertinent to the appeal, 
including the letter or letters of claim in response to which the 
decision was issued;
    (4) All transcripts of any testimony taken during the course of 
proceedings, and affidavits or statements of any witnesses on the matter 
in dispute made prior to the filing of the notice of appeal with the 
Board; and
    (5) Any additional information considered pertinent.
    (e) The General Counsel will compile the appeal file from such 
documents, which file must contain the items enumerated in paragraphs 
(d) (1) through (5) of this section and will promptly, and in any event 
within 65 days after the appeal is docketed by the Board, transmit the 
appeal file to the Board. The General Counsel will notify the appellant 
when he/she has compiled the appeal file, will provide him/her with a 
list of its contents, and will afford him/her an opportunity to examine 
the complete file at the office of the Board and, if the General Counsel 
deems it appropriate, at any overseas location, for the purpose of 
satisfying himself/herself as to the contents, and furnishing or 
suggesting any additional documentation deemed pertinent to the appeal. 
After receipt of the foregoing file, as it may be augmented at

[[Page 51]]

the time of receipt, the Board will promptly advise the parties.

[53 FR 4980, Feb. 19, 1988. Redesignated at 61 FR 39095, July 26, 1996; 
61 FR 51235, Oct. 1, 1996; 62 FR 40469, July 29, 1997]

[[Page 52]]

             SUBCHAPTER F_SPECIAL CATEGORIES OF CONTRACTING

                    PART 734_MAJOR SYSTEM ACQUISITION

    Authority: Sec. 621, Pub. L. 87-195, 75 Stat. 445 (22 U.S.C. 2381), 
as amended; E.O. 12163, Sept. 29, 1979, 44 FR 56673, 3 CFR, 1979 Comp., 
p. 435.



Sec. 734.002-70  USAID policy.

    In order for an USAID acquisition to be considered a major system 
acquisition it must meet the criteria of OMB Circular A-109 and FAR part 
34, and must have an estimated value of $15 million or more during the 
first year of the contract. All major systems acquisition must be 
approved in advance by the M/OAA Director.

[55 FR 39976, Oct. 1, 1990, as amended at 64 FR 42040, Aug. 3, 1999; 72 
FR 19670, Apr. 19, 2007]

         PART 736_CONSTRUCTION AND ARCHITECT-ENGINEER CONTRACTS

                Subpart 736.6_Architect-Engineer Services

Sec.

Sec. 736.602-2 Evaluation boards.

Sec. 736.602-3 Evaluation board functions.

Sec. 736.602-4 Selection authority.

Sec. 736.602-5 Short selection process for procurements not to exceed 
          the simplified acquisition threshold.

Sec. 736.603 Collecting data on and appraising firms' qualifications.

Sec. 736.605 Government cost estimate for architect-engineer work.

    Authority: Sec. 621, Pub. L. 87-195, 75 Stat. 445, (22 U.S.C. 2381) 
as amended; E.O. 12163, Sept. 29, 1979, 44 FR 56673; 3 CFR, 1979 Comp., 
p. 435.

    Source: 49 FR 13254, Apr. 3, 1984, unless otherwise noted.

                Subpart 736.6_Architect-Engineer Services



Sec. 736.602-2  Evaluation boards.

    (a)-(b) [Reserved]
    (c) Each evaluation board will include a representative of the 
Contracting Officer and, as appropriate, the cognizant bureau.

[54 FR 46391, Nov. 3, 1989]



Sec. 736.602-3  Evaluation board functions.

    Agency architect-engineer evaluation boards shall perform the 
following functions:
    (a) Prepare a selection memorandum recommending no less than three 
firms which are considered most highly qualified to perform the required 
services for submission to the head of the contracting activity for his/
her approval. This selection memorandum shall include the information 
specified in 736.602-3(c).
    (b) In evaluating architect-engineer firms, the architect-engineer 
evaluation board shall apply the following criteria, other criteria 
established by Agency regulations, and any criteria set forth in the 
public notice on a particular contract:
    (1) Specialized experience of the firm (including each member of 
joint venture or association) with the type of service required;
    (2) Capacity of the firm to perform the work (including any 
specialized services) within the time limitations;
    (3) Past record of performance on contracts with USAID or other 
Government agencies and private industry with respect to such factors as 
control of costs, quality of work, and ability to meet schedules, to the 
extent such information is available;
    (4) Ability to assign an adequate number of qualified key personnel 
from the organization, including a competent supervising representative 
having considerable experience in responsible positions on work of a 
similar nature;
    (5) The portions of the work the architect-engineer is able to 
perform with its own forces when required;
    (6) Ability of the architect-engineer to furnish or to obtain 
required materials and equipment;
    (7) If the geographical or topographical aspects of the project are 
deemed vital, familiarity with the locality where the project is 
situated;
    (8) Financial capacity;
    (9) Responsibility of the architect-engineer under standards 
provided in FAR subpart 9.1. No contract may be

[[Page 53]]

awarded to a contractor that does not meet these standards;
    (10) Volume of work previously awarded to the firm by the Agency, 
with the object of effecting an equitable distribution of architect-
engineer contracts among qualified firms. Each architect-engineer 
evaluation board shall give favorable consideration, to the fullest 
extent practicable to the most highly qualified firms that have not had 
prior experience on Government projects (including small business firms 
and firms owned by the socially and/or economically deprived).
    (c) The evaluation board shall prepare a selection memorandum for 
the approval of the head of the contracting activity. The selection 
memorandum will be signed by the board chairman and cleared by each 
board member. The selection memorandum shall include the following 
information:
    (1) A listing by name of all firms reviewed by the board;
    (2) A listing of the evaluation criteria applied;
    (3) An analysis of the selection showing the rationale for the 
board's recommendation;
    (4) The board's recommendation of the three most highly qualified 
firms, in order of preference;
    (5) An independent Government cost estimate. The evaluation board 
shall require the project engineer to develop an independent Government 
estimate of the cost of the required architect-engineer services. 
Consideration shall be given to the estimated value of the services to 
be rendered, the scope, complexity, and the nature of the project and 
the estimated costs expected to be generated by the work. The 
independent Government estimate shall be revised as required during 
negotiations to correct noted deficiencies and reflect changes in or 
clarification of, the scope of the work to be performed by the 
architect-engineer. A cost estimate based on the application of 
percentage factors to cost estimates of the various segments of the work 
involved, e.g., construction project, may be developed for comparison 
purposes, but such a cost estimate shall not be used as a substitute for 
the independent Government estimate.



Sec. 736.602-4  Selection authority.

    (a) The head of the contracting activity or his/her authorized 
designee shall review the selection memorandum and shall either approve 
it or return it to the board for reconsideration for specified reasons.
    (b) Approval of the selection memorandum by the head of the 
contracting activity or his/her authorized designee shall serve as 
authorization for the contracting office to commence negotiation.



Sec. 736.602-5  Short selection process for procurements not to exceed 

the simplified acquisition threshold.

    References to FAR 36.602-3 and 36.602-4 contained in FAR 36.602-5 
shall be construed as references to 736.602-3 and 736.602-4 of this 
subpart.

[49 FR 13254, Apr. 3, 1984, as amended at 61 FR 39095, July 26, 1996]



Sec. 736.603  Collecting data on and appraising firms' qualifications.

    An USAID Consultant Registry Information System (ACRIS) is 
maintained in Washington by the USAID Office of Small and Disadvantaged 
Business Utilization. Architect-engineers wishing to perform contracts 
for USAID should file the appropriate form with that office, as provided 
in section 705.002. Procurements are publicized in the Commerce Business 
Daily, as provided in FAR part 5.

[49 FR 13254, Apr. 3, 1984, as amended at 52 FR 21059, June 4, 1987; 53 
FR 50631, Dec. 16, 1988]



Sec. 736.605  Government cost estimate for architect-engineer work.

    See 736.602-3(c)(5).

                           PART 737 [RESERVED]

[[Page 54]]

                    SUBCHAPTER G_CONTRACT MANAGEMENT

                    PART 742_CONTRACT ADMINISTRATION

                    Subpart 742.7_Indirect Cost Rates

Sec.

Sec. 742.770 Negotiated indirect cost rate agreement.

         Subpart 742.11_Production, Surveillance, and Reporting


Sec. 742.1170 Performance monitoring and progress reporting.

Sec. 742.1170-1 General.

Sec. 742.1170-2 Applicability.

Sec. 742.1170-3 Policy.

Sec. 742.1170-4 Progress reporting requirements and contract clause.

            Subpart 742.15_Contractor Performance Information


Sec. 742.1501 [Reserved]

Sec. 742.1502 Policy.

Sec. 742.1503 Procedures.

    Authority: Sec. 621, Pub. L. 87-195, 75 Stat. 445, (22 U.S.C. 2381) 
as amended; E.O. 12163, Sept. 29, 1979, 44 FR 56673; 3 CFR, 1979 Comp., 
p. 435.

                    Subpart 742.7_Indirect Cost Rates



Sec. 742.770  Negotiated indirect cost rate agreement.

    Except for educational institutions having a cognizant agency (as 
defined in OMB Circular A-88, 44 FR 70094, 12/5/79) other than USAID, 
USAID may establish negotiated overhead rates in a Negotiated Indirect 
Cost Rate Agreement, executed by both parties. The Negotiated Indirect 
Cost Rate Agreement is automatically incorporated in each contract 
between the parties and shall specify: (a) The final rate(s), (b) the 
base(s) to which the rate(s) apply, (c) the period(s) for which the 
rate(s) apply, (d) the items treated as direct costs, and (e) the 
contract(s) to which the rate(s) apply. The Negotiated Indirect Cost 
Rate Agreement shall not change any monetary ceiling, obligation, or 
specific cost allowance or disallowance provided for in each contract 
between the parties.

[49 FR 13256, Apr. 3, 1984; 53 FR 50631, Dec. 16, 1988]

         Subpart 742.11_Production, Surveillance, and Reporting

    Source: 72 FR 53163, Sept. 18, 2007, unless otherwise noted.

    Effective Date Note: At 72 FR 53163, September 18, 2007, Sec. Sec.  
742.1170--742.1170-4 (Subpart 742.11) was added, effective October 18, 
2007.



Sec. 742.1170  Performance monitoring and progress reporting.



Sec. 742.1170-1  General.

    Performance monitoring is a function of contract administration used 
to determine contractor progress towards achieving the goals and 
objectives of the contract and to identify any factors that may delay or 
prevent the accomplishment of those goals and objectives. Performance 
monitoring requires USAID personnel, particularly the cognizant 
technical officer, to maintain adequate knowledge of the contractor's 
activities and progress in order to ensure that USAID's objectives, as 
stated in the contract's Statement of Work, will be achieved.



Sec. 742.1170-2  Applicability.

    (a) This section applies to USAID non-personal, professional/
technical services contracts exceeding the simplified acquisition 
threshold, but may be applied to other USAID contracts, if the 
contracting officer and requiring office determine that doing so is in 
the best interests of the Agency. The contracting officer must ensure 
that this determination is documented in the contract file. This section 
does not apply to personal services contracts.
    (b) The underlying principles of FAR 48 CFR subpart 42.11 apply to 
USAID contracts and are inherent to this section. However, not all of 
the specific requirements and terminology in FAR 48 CFR subpart 42.11 
are compatible with the types of technical assistance contracts usually 
awarded by USAID. Therefore, this section 742.1170 applies when the 
requirements of FAR 48 CFR

[[Page 55]]

subpart 42.11 do not meet USAID requirements or are otherwise not 
appropriate.
    (c) The progress reports discussed in this section are separate from 
the performance evaluation reports prepared in accordance with FAR 48 
CFR subpart 42.15 and internal Agency procedures, although they may be 
used by USAID personnel or their authorized representatives when 
evaluating the contractor's performance. Furthermore, the policies, 
procedures, and limitations of this section do not apply to technical 
reports, studies, papers, etc., the acquisition of which may be part of 
or even the sole purpose of the contract.



Sec. 742.1170-3  Policy.

    (a) The contractor is responsible for timely contract performance. 
Performance monitoring by USAID does not obviate this responsibility.
    (b) The requiring office, particularly the cognizant technical 
officer and the contracting officer, will determine how to monitor the 
contractor's performance to protect the Government's interests, by 
considering:
    (1) The contract requirements for reporting progress;
    (2) The contract performance schedule;
    (3) The contractor's implementation plan or workplan;
    (4) The contractor's history of contract performance;
    (5) The contractor's experience with the services or supplies being 
provided under the contract;
    (6) The contractor's financial capability;
    (7) Any other factors the requiring office, particularly the 
cognizant technical officer and the contracting officer, considers 
appropriate and necessary to adequately monitor contractor performance 
(for example, the day-to-day working proximity of the cognizant 
technical officer or contracting officer to the contractor's place of 
performance).
    (c) In monitoring contractor performance, the requiring office 
(particularly the cognizant technical officer and contracting officer) 
must utilize any of the contractor's existing systems or processes for 
monitoring progress, provided that doing so is not contrary to the terms 
of the contract. The requiring officer or cognizant technical officer 
must not require anything from the contractor that is outside the scope 
or terms of the contract or may result in claims of waivers, of changes, 
or of other contract modifications. Further, progress reports shall not 
require information already available from other sources.



Sec. 742.1170-4  Progress reporting requirements and contract clause.

    (a) When the requiring office needs information on contract 
performance status on a regular basis, the contracting officer may 
require the contractor to submit periodic progress reports, tailored to 
address specific contract requirements but limited to only that 
information essential to USAID's needs in monitoring the contractor's 
progress.
    (b) Because the cognizant technical officer is the individual most 
familiar with the contractor's performance, the contractor must submit 
the progress reports directly to the cognizant technical officer. The 
cognizant technical officer must review the reports and advise the 
contracting officer, in writing, of any recommended action, including 
any action needed to address potential or actual delays in performance. 
The cognizant technical officer must so advise the contracting officer 
in sufficient time, typically thirty days, for him or her to take any 
action that the contracting officer determines is appropriate. The 
requirements of this paragraph do not relieve the contractor of 
notification requirements identified elsewhere in the contract.
    (c) The contracting officer must insert the clause at 752.242-70, 
Periodic Progress Reports, in solicitations and contracts that require 
progress reporting, as specified in this section. The contracting 
officer must include specific reporting instructions in the Schedule.

            Subpart 742.15_Contractor Performance Information

    Source: 65 FR 36642, June 9, 2000, unless otherwise noted.

[[Page 56]]



Sec. 742.1501  [Reserved]



Sec. 742.1502  Policy.

    (a) USAID contracting officers shall report contractor performance 
information at least annually, employing the procedures prescribed by 
the NIH Contractor Performance System. (Access to the system by USAID 
contracting office personnel is authorized by the USAID Past Performance 
Coordinator, E-mail address: AIDNET: Past Performance@op.spu@aidw/
Internet: pastperformance@usaid.gov.)
    (b) Performance for personal services contracts awarded under AIDAR 
Appendices D and J shall not be evaluated under the contractor 
performance reporting procedures prescribed in FAR subpart 42.15.

[65 FR 36642, June 9, 2000; 65 FR 39470, June 26, 2000]



Sec. 742.1503  Procedures.

    (a) [Reserved]
    (b) Personal services contractors shall be recognized as Government 
personnel for the purposes of the restriction on access to contractor 
performance information in FAR 42.1503(b).

                      PART 745_GOVERNMENT PROPERTY

    Authority: Sec. 621, Pub. L. 787-195, 75 Stat. 445, (22 U.S.C. 2381) 
as amended; E.O. 12163, Sept. 29, 1979, 44 FR 56673; 3 CFR 1979 Comp., 
p. 435.

                          Subpart 745.1_General



Sec. 745.106  Contract clauses.

    (a) The contracting officer shall insert the clause at 752.245-71 in 
all contracts under which the contractor will acquire property for use 
overseas and the contract funds were obligated under a Strategic 
Objective agreement (or similar agreement) with the cooperating country.
    (b) The contracting officer shall insert the applicable clause as 
required in (48 CFR) FAR 45.106 in all contracts under which the 
contractor will acquire property with funds not already obligated under 
a Strategic Objective agreement (or similar agreement) with the 
cooperating country.

[64 FR 5008, Feb. 2, 1999]

                         PART 747_TRANSPORTATION

    Authority: Sec. 621, Pub. L. 98-195, 75 Stat. 445 (22 U.S.C. 2381), 
as amended; E.O. 12163, Sept. 29, 1979, 44 FR 56673; 3 CFR 1979 Comp., 
p. 435.

         Subpart 747.5_Ocean Transportation by U.S.-Flag Vessels



Sec. 747.507  Contract clauses.

    Contracting officers shall insert the clause at 752.247-70 in 
solicitations and contracts solely for ocean transportation services, 
and in solicitations and contracts for goods and ocean transportation 
services when the ocean transportation will be fixed at the time the 
contract is awarded. Contracting Officers shall use (48 CFR) FAR 52.247-
64 as prescribed in (48 CFR) FAR 27.507(a) in other situations.

[64 FR 5008, Feb. 2, 1999]

                    PART 749_TERMINATION OF CONTRACTS

                    Subpart 749.1_General Principles

Sec.

Sec. 749.100 Scope of subpart.

Sec. 749.111 Review of proposed settlements.

Sec. 749.111-70 Termination settlement review boards.

Sec. 749.111-71 Required review and approval.

    Authority: Sec. 621, Pub. L. 87-195, 75 Stat. 445, (22 U.S.C. 2381) 
as amended; E.O. 12163, Sept. 29, 1979, 44 FR 56673; 3 CFR, 1979 Comp., 
p. 435.

    Source: 49 FR 13256, Apr. 3, 1984, unless otherwise noted.

                    Subpart 749.1_General Principles



Sec. 749.100  Scope of subpart.

    The Foreign Aid and Related Agencies Appropriation Act, 1963, and 
subsequent appropriation Acts, have imposed the following requirement:
    None of the funds appropriated or made available pursuant to this 
Act for carrying out the Foreign Assistance Act of 1961, as amended, may 
be used for making payments on any contract

[[Page 57]]

for procurement to which the United States is a party entered into after 
the date of enactment of this Act which does not contain a provision 
authorizing the termination of such contract for the convenience of the 
United States.
    See, for example, section 110 of the Foreign Assistance and Related 
Agencies Appropriation Act, 1965.



Sec. 749.111  Review of proposed settlements.



Sec. 749.111-70  Termination settlement review boards.

    (a) The USAID Settlement Review Board shall be composed of the 
following members or their delegates (except as provided under 749.111-
71(b)):
    (1) M/OAA Director;
    (2) Controller;
    (3) General Counsel.
    (b) The M/OAA Director or his/her delegate shall be designated as 
chairman of the board. Delegate members of the board shall have broad 
business and contracting experience and shall be senior USAID officials. 
Each member or his/her delegate must be in attendance in order to 
conduct business, and the board shall act by majority vote. No 
individual shall serve as a member of a board for the review of a 
proposed settlement if he/she has theretofore reviewed, approved or 
disapproved or recommended approval, disapproval or other action with 
respect to any substantive element of such settlement proposal.
    (c) The chairman shall appoint a nonvoting recorder who shall be 
responsible for receiving cases, scheduling and recording the 
proceedings at meetings, maintaining a log of all cases received by him/
her for the board, and other duties as assigned by the board.

[49 FR 13256, Apr. 3, 1984, as amended at 64 FR 42040, Aug. 3, 1999; 72 
FR 19670, Apr. 19, 2007]



Sec. 749.111-71  Required review and approval.

    (a) When required. The USAID Settlement Review Board shall receive 
and approve all USAID/W and Mission proposed settlements or 
determinations if:
    (1) The amount of settlement, by agreement or determination, 
involves $100,000 or more;
    (2) The settlement or determination is limited to adjustment of the 
fee of a cost-reimbursement contract or subcontract and: (i) In the case 
of complete termination, the fee, as adjusted, with respect to the 
terminated portion of the contract or subcontract is $100,000 or more; 
or (ii) in the case of a partial termination, the fee, as adjusted, with 
respect to the terminated portion of the contract or subcontract is 
$100,000 or more;
    (3) The head of the contracting activity concerned determines that a 
review of a specific case or class of cases is desirable; or
    (4) The contracting officer, in his/her discretion, desires review 
by the board.
    (b) Level of review. Proposed settlements in excess of $5 million 
shall be reviewed and approved by a board consisting of the M/OAA 
Director, the General Counsel, and the Controller, without power of 
redelegation.
    (c) Submission of information. The contracting officer shall submit 
to the board a statement of the proposed settlement agreement or 
determination, supported by such detailed information as is required for 
an adequate review. This information should normally include copies of: 
(1) The contractor's or subcontractor's settlement proposal, (2) the 
audit report, (3) the property disposal report and any required 
approvals in connection therewith, and (4) the contracting officer's 
memorandum explaining the settlement. The board may, in its discretion, 
require the submission of additional information.

[49 FR 13256, Apr. 3, 1984, as amended at 57 FR 5236, Feb. 13, 1992; 59 
FR 33446, June 29, 1994; 64 FR 42040, Aug. 3, 1999; 72 FR 19670, Apr. 
19, 2007]

               PART 750_EXTRAORDINARY CONTRACTUAL ACTIONS

Sec.

Sec. 750.000 Scope of part.

[[Page 58]]

Subpart 750.70 [Reserved]

  Subpart 750.71_Extraordinary Contractual Actions To Protect Foreign 
                  Policy Interests of the United States


Sec. 750.7100 Scope of subpart.

Sec. 750.7101 Authority.

Sec. 750.7102 General policy.

Sec. 750.7103 Definitions.

Sec. 750.7104 Types of actions.

Sec. 750.7105 Approving authorities.

Sec. 750.7106 Standards for deciding cases.

Sec. 750.7106-1 General.

Sec. 750.7106-2 Amendments without consideration.

Sec. 750.7106-3 Mistakes.

Sec. 750.7106-4 Informal commitments.

Sec. 750.7107 Limitations upon exercise of authority.

Sec. 750.7108 Contractual requirements.

Sec. 750.7109 Submission of requests by contractors.

Sec. 750.7109-1 Filing requests.

Sec. 750.7109-2 Form of requests by contractors.

Sec. 750.7109-3 Facts and evidence.

Sec. 750.7110 Processing cases.

Sec. 750.7110-1 Investigation.

Sec. 750.7110-2 Office of General Counsel coordination.

Sec. 750.7110-3 Submission of cases to the M/OP Director.

Sec. 750.7110-4 Processing by M/OAA Director.

Sec. 750.7110-5 Contract files.

Sec. 750.7110-6 Inter-agency coordination.

    Authority: Sec. 621, Pub. L. 87-195, 75 Stat. 445, (22 U.S.C. 2381) 
as amended; E.O. 12163, Sept. 29, 1979, 44 FR 56673; 3 CFR, 1979 Comp., 
p. 435.

    Source: 49 FR 13257, Apr. 3, 1984, unless otherwise noted.



Sec. 750.000  Scope of part.

    USAID is not among the agencies named in the Act or authorized by 
the President to take actions under it; however, see Subpart 750.71--
Extraordinary Contractual Actions to Protect Foreign Policy Interests of 
the United States.

Subpart 750.70 [Reserved]

  Subpart 750.71_Extraordinary Contractual Actions To Protect Foreign 
                  Policy Interests of the United States



Sec. 750.7100  Scope of subpart.

    This subpart sets forth the standards and the procedures for 
disposition of requests for extraordinary contractual actions under 
Executive Order 11223.



Sec. 750.7101  Authority.

    Under section 633 of the Foreign Assistance Act of 1961, 75 Stat. 
454 (22 U.S.C. 2933), as amended; Executive Order 11223, dated May 12, 
1965 (30 FR 6635), as amended; and Executive Order 12163, dated 
September 29, 1979 (44 FR 56673), as amended, the Administrator of the 
U.S. Agency for International Development has been granted authority to 
provide extraordinary contractual relief. The Authority is set forth in 
sections 3 and 4 of Executive Order 11223, as follows:

    Section 3. With respect to cost-type contracts heretofore or 
hereafter made with non-profit institutions under which no fee is 
charged or paid, amendments or modifications of such contracts may be 
made with or without consideration and may be utilized to accomplish the 
same things as any original contract could have accomplished, 
irrespective of the time or circumstances of the making, or of the form 
of the contract amended or modified, or of the amending or modifying 
contract and irrespective of rights which may have accrued under the 
contract or the amendments or modifications thereof.
    Section 4. With respect to contracts heretofore or hereafter made, 
other than those described in section 3 of this order, amendments and 
modifications of such contracts may be made with or without 
consideration and may be utilized to accomplish the same things as any 
original contract could have accomplished, irrespective of the time or 
circumstances of the making, or the form of the contract amended or 
modified, or of the amending or modifying contract, and irrespective of 
rights which may have accrued under the contract or the amendments or 
modifications thereof, if the Secretary of State or the Director of the 
United States International Development Cooperation Agency (with respect 
to functions vested in or delegated to Director) determines in each case 
that such action is necessary to protect the foreign policy interests of 
the United States.

[49 FR 49472, Dec. 20, 1984, as amended at 62 FR 40469, July 29, 1997; 
64 FR 42042, Aug. 3, 1999]



Sec. 750.7102  General policy.

    Extra-contractual claims arising from foreign assistance contracts 
will be processed in accordance with this

[[Page 59]]

subpart, which is similar to that utilized to process claims for 
extraordinary relief under FAR Part 50, as modified to meet the 
circumstances involved under the Foreign Assistance Act and the 
different authority involved.



Sec. 750.7103  Definitions.

    (a) The term approving authority as used in this subpart means an 
officer or official having been delegated authority to approve actions 
under the Executive Order. This authority is distinguished from 
authority to take appropriate contractual action pursuant to such 
approval.
    (b) The term the Executive Order shall mean Executive Order 11223 
(30 FR 6635) as amended, unless otherwise stated.
    (c) The term the Act shall mean the Foreign Assistance Act of 1961, 
as amended.

[49 FR 13257, Apr. 3, 1984, as amended at 49 FR 49472, Dec. 20, 1984]



Sec. 750.7104  Types of actions.

    Three types of actions may be taken by or pursuant to the direction 
of an approving authority under the Executive Order. These are 
contractual adjustments such as amendments without consideration, 
correction of mistakes, and formalization of informal commitments.



Sec. 750.7105  Approving authorities.

    All authority to approve actions under this subpart has been 
delegated to the M/OAA Director.

[50 FR 16086, Apr. 24, 1985, as amended at 64 FR 42040, Aug. 3, 1999; 72 
FR 19670, Apr. 19, 2007]



Sec. 750.7106  Standards for deciding cases.



Sec. 750.7106-1  General.

    The mere fact that losses occur under a Government contract is not, 
by itself, a sufficient basis for the exercise of the authority 
conferred by the Executive Order. Whether, in a particular case, 
appropriate action such as amendment without consideration, correction 
of a mistake or ambiguity in a contract, or formalization of an informal 
commitment, will protect the foreign policy interests of the United 
States is a matter of sound judgment to be made on the basis of all of 
the facts of such case. Although it is obviously impossible to predict 
or enumerate all the types of cases with respect to which action may be 
appropriate, examples of certain cases or types of cases where action 
may be proper are set forth in sections 750.7106-2 through 750.7106-4. 
Even if all of the factors contained in any of the examples are present, 
other factors or considerations in a particular case may warrant denial 
of the request. These examples are not intended to exclude other cases 
where the approving authority determines that the circumstances warrant 
action.



Sec. 750.7106-2  Amendments without consideration.

    (a) Where an actual or threatened loss under a foreign assistance 
contract, however caused, will impair the productive ability of a 
contractor whose continued performance of any foreign assistance 
contract or whose continued operation as a source of supply is found to 
be essential to protect the foreign policy interests of the United 
States, the contract may be adjusted but only to the extent necessary to 
avoid such impairment to the contractor's productive ability.
    (b) Where a contractor suffers a loss (not merely a diminution of 
anticipated profits) on a foreign assistance contract as a result of 
Government action, the character of the Government action will generally 
determine whether any adjustment in the contract will be made and its 
extent. Where the Government action is directed primarily at the 
contractor and is taken by the Government in its capacity as the other 
contracting party, the contract may be adjusted if fairness so requires; 
thus where such Government action, although not creating any liability 
on its part, increases the cost of performance, considerations of 
fairness may make appropriate some adjustment in the contract.



Sec. 750.7106-3  Mistakes.

    A contract may be amended or modified to corrrect or mitigate the 
effect of a mistake, including the following examples:

[[Page 60]]

    (a) A mistake or ambiguity which consists of the failure to express 
or to express clearly in the written contract the agreements as both 
parties understood them;
    (b) A mistake on the part of the contractor which is so obvious that 
it was or should have been apparent to the contracting officer; and
    (c) A mutual mistake as to a material fact.

Amending contracts to correct mistakes with the least possible delay 
normally will protect the foreign policy interests of the United States 
by expediting the procurement program and by giving contractors proper 
assurance that such mistakes will be corrected expeditiously and fairly.



Sec. 750.7106-4  Informal commitments.

    Informal commitments may be formalized under certain circumstances 
to permit payment to persons who have taken action without a formal 
contract; for example, where any person, pursuant to written or oral 
instructions from an officer or official of the Agency and relying in 
good faith upon the apparent authority of the officer or official to 
issue such instructions, has arranged to furnish or has furnished 
property or services to the agency and/or to a foreign assistance 
contractor or subcontractor without formal contractual coverage for such 
property or services. Formalization of commitments under such 
circumstances normally will protect the foreign policy interests of the 
United States by assuring persons that they will be treated fairly and 
paid expeditiously.



Sec. 750.7107  Limitations upon exercise of authority.

    (a) The Executive Order is not authority for:
    (1) The use of the cost-plus-a-percentage-of-cost system of 
contracting;
    (2) The making of any contract in violation of existing law relating 
to limitation on profit or fees;
    (3) The waiver of any bid, payment performance or other bond 
required by law.
    (b) No amendments, or modifications shall be entered into under the 
authority of the Executive Order:
    (1) Unless, with respect to cases falling within Section 4 of the 
Executive Order, a finding is made that the action is necessary to 
protect the foreign policy interests of the United States;
    (2) Unless other legal authority in the Agency is deemed to be 
lacking or inadequate;
    (3) Except within the limits of the amounts appropriated and the 
statutory contract authorization.
    (c) No contract shall be amended or modified unless the request 
therefor has been filed before all obligations (including final payment) 
under the contract have been discharged.
    (d) No informal commitment shall be formalized unless:
    (1) A request for payment has been filed within six months after 
arranging to furnish or furnishing property or services in reliance upon 
the commitment;
    (2) USAID has received the services satisfactorily performed, or has 
accepted property furnished in reliance on the commitment;
    (3) The USAID employees alleged to have made the informal commitment 
have accepted responsibility for making the informal commitment in 
question; and
    (4) USAID has taken appropriate action to prevent recurrence.

[49 FR 13257, Apr. 3, 1984, as amended at 50 FR 16088, Apr. 24, 1985; 53 
FR 4982, Feb. 19, 1988]



Sec. 750.7108  Contractual requirements.

    Every contract amended or modified pursuant to this subpart shall 
contain:
    (a) A citation of the Act and Executive Order.
    (b) A brief statement of the circumstances justifying the action;
    (c) A recital of the finding, with respect to cases falling within 
Section 4 of the Executive Order, that the action is necessary to 
protect the foreign policy interests of the United States.



Sec. 750.7109  Submission of requests by contractors.



Sec. 750.7109-1  Filing requests.

    Any person (hereinafter called the ``contractor'') seeking an 
adjustment under standards set forth in 750.7106 may file a request in 
duplicate with the

[[Page 61]]

cognizant contracting officer or his/her duly authorized representative. 
If such filing is impracticable, requests will be deemed to be properly 
filed if filed with the Chief of the Office of Acquisition and 
Assistance, Evaluation Division (M/OAA/E) for forwarding to the 
cognizant contracting officer.

[49 FR 13257, Apr. 3, 1984, as amended at 50 FR 50303, Dec. 10, 1985; 55 
FR 6802, Feb. 27, 1990; 56 FR 67225, Dec. 30, 1991; 59 FR 33446, June 
29, 1994; 72 FR 19670, Apr. 19, 2007]



Sec. 750.7109-2  Form of requests by contractors.

    The contractor's request shall normally consist of a letter to the 
contracting officer providing the information specified in FAR 50.303.



Sec. 750.7109-3  Facts and evidence.

    The contracting officer or the approving authority may, where 
considered appropriate, request the contractor to furnish the facts and 
evidence as described in FAR 50.304.

[49 FR 13257, Apr. 3, 1984, as amended at 62 FR 40469, July 29, 1997]



Sec. 750.7110  Processing cases.



Sec. 750.7110-1  Investigation.

    The Evaluation Division of the Office of Acquisition and Assistance 
(M/OAA/E) shall be responsible for assuring that the case prepared by 
the cognizant contracting officer makes a thorough investigation of all 
facts and issues relevant to each situation. Facts and evidence shall be 
obtained from contractor and Government personnel and shall include 
signed statements of material facts within the knowledge of the 
individuals where documentary evidence is lacking and audits where 
considered necessary to establish financial or cost related facts. The 
investigation shall establish the facts essential to meet the standards 
for deciding the particular case and shall address the limitations upon 
exercise of the authority of the M/OAA Director to approve the request.

[62 FR 40469, July 29, 1997, as amended at 64 FR 42042, Aug. 3, 1999; 72 
FR 19670, Apr. 19, 2007]



Sec. 750.7110-2  Office of General Counsel coordination.

    Prior to the submission of a case to the M/OAA Director recommending 
extraordinary contractual relief, the claim shall be fully developed by 
the cognizant contracting officer and concurrences or comments shall be 
obtained from the Office of General Counsel for the proposed relief to 
be granted. Such concurrences or comments shall be incorporated in or 
accompany the action memorandum submitted for consideration to the M/OAA 
Director in accordance with 750.7110-3.

[62 FR 40469, July 29, 1997, as amended at 64 FR 42040, Aug. 3, 1999; 72 
FR 19670, Apr. 19, 2007]



Sec. 750.7110-3  Submission of cases to the M/OP Director.

    Cases to be submitted for consideration by the M/OAA Director shall 
be prepared and forwarded by the cognizant contracting officer through 
M/OAA/E to the M/OAA Director by means of an action memorandum. M/OAA/E 
will review the action memorandum for accuracy and completeness. The 
action memorandum shall provide for approval or disapproval by the M/OAA 
Director of the disposition recommended by the contracting officer. The 
action memorandum shall address:
    (a) The nature of the case;
    (b) The basis for authority to act under section 750.7101;
    (c) The findings of fact essential to the case (see 750.7109-3) 
arranged chronologically with cross references to supporting enclosures;
    (d) The conclusions drawn from applying the standards for deciding 
cases, as set forth in 750.7106, to the findings of fact;
    (e) Compliance with the limitations upon exercise of authority, as 
set forth in section 750.7107 (for informal commitments, include 
statements addressing each of the limitations in paragraph (d) of 
750.7107):
    (f) Concurrences or comments obtained from the Office of General 
Counsel;
    (g) Verification of funds availability and the contracting officer's 
determination of cost/price reasonableness when the disposition 
recommended requires payment to a contractor;

[[Page 62]]

    (h) The disposition recommended and, if contractual action is 
recommended with respect to cases falling within Section 4 of the 
Executive Order, the opinion of the contracting officer that such action 
is necessary to protect the foreign policy interest of the United 
States; and
    (i) The action memorandum shall enclose all evidentiary materials, 
including the reports and comments of all cognizant Government or other 
officials, and a copy of the contractor's request. The action memorandum 
should provide the following information related to the contractor's 
request, as applicable:
    (1) Date of request;
    (2) Date request received by USAID:
    (3) Contract number;
    (4) Contractor's name and address;
    (5) Name, address, and phone number of contractor's representative;
    (6) Name, office symbol, and phone number of cognizant contracting 
officer;
    (7) Amount of request.

[62 FR 40469, July 29, 1997, as amended at 64 FR 42040, Aug. 3, 1999; 72 
FR 19670, Apr. 19, 2007]



Sec. 750.7110-4  Processing by M/OAA Director.

    When the action memorandum has been determined to be as accurate and 
complete as possible and has been prepared in accordance with this 
subpart, M/OAA/E will forward the action memorandum to the M/OAA 
Director. The M/OAA Director will sign and date the action memorandum 
indicating approval or disapproval of the disposition recommended by the 
contracting officer.

[62 FR 40469, July 29, 1997, as amended at 64 FR 42040, Aug. 3, 1999; 72 
FR 19670, Apr. 19, 2007]



Sec. 750.7110-5  Contract files.

    The fully executed action memorandum indicating approval/disapproval 
and a copy of the contractual document implementing any approved 
contractual action shall be placed in the contract file.

[62 FR 40469, July 29, 1997; 62 FR 47532, Sept. 9, 1997]



Sec. 750.7110-6  Inter-agency coordination.

    (a) General. Where a case involves matters of interest to more than 
one department or agency, USAID should maintain liaison with other 
departments and agencies of the Government and take such joint action as 
may be proper under the circumstances, including holding joint meetings.
    (b) Cases involving funds of other departments or agencies. Requests 
for adjustment within any category, involving the funds of another 
department or agency, shall not be approved by USAID until advice is 
requested and received from the department or agency whose funds are 
involved.

[[Page 63]]

                     SUBCHAPTER H_CLAUSES AND FORMS

          PART 752_SOLICITATION PROVISIONS AND CONTRACT CLAUSES

              Subpart 752.2_Texts of Provisions and Clauses

Sec.

Sec. 752.200 Scope of subpart.

Sec. 752.202-1 Definitions.

Sec. 752.204-2 Security requirements.

Sec. 752.209-71 Organizational conflicts of interest discovered after 
          award.

Sec. 752.211-70 Language and measurement.

Sec. 752.216-70 Award fee.

Sec. 752.219-8 Utilization of small business concerns and small 
          disadvantaged business concerns.

Sec. 752.219-70 USAID Mentor-Prot[eacute]g[eacute] Program.

Sec. 752.219-71 Mentor requirements and evaluation.

Sec. 752.225-9 Buy American Act--Trade Agreements Act--Balance of 
          Payments Program.

Sec. 725.225-70 Source, origin and nationality requirements.

Sec. 725.225-71 Local procurement.

Sec. 752.226-1 Determination of status as disadvantaged enterprise.

Sec. 752.226-2 Subcontracting with disadvantaged enterprises.

Sec. 752.226-3 Limitation on subcontracting.

Sec. 752.227-14 Rights in Data--general.

Sec. 752.228-3 Worker's compensation insurance (Defense Base Act).

Sec. 752.228-7 Insurance--liability to third persons

Sec. 752.228-9 Cargo insurance.

Sec. 752.228-70 Medical Evacuation (MEDEVAC) Services.

Sec. 752.229-70 Federal, state and local taxes.

Sec. 752.231-71 Salary supplements for HG employees.

Sec. 752.232-7 Payments under time-and-materials and labor-hour 
          contracts.

Sec. 752.232-70 Letter of credit advance payment.

Sec. 752.242-70 Periodic progress reports.

Sec. 752.245-70 Government property--USAID reporting requirements.

Sec. 752.245-71 Title to and care of property.

Sec. 752.247-70 Preference for privately owned U.S.-flag commercial 
          vessels.

             Subpart 752.70_Texts of USAID Contract Clauses


Sec. 752.7000 Scope of subpart.

Sec. 752.7001 Biographical data.

Sec. 752.7002 Travel and transportation.

Sec. 752.7003 Documentation for payment.

Sec. 752.7004 Emergency locator information.

Sec. 752.7005 Submission requirements for development experience 
          documents.

Sec. 752.7006 Notices.

Sec. 752.7007 Personnel compensation.

Sec. 752.7008 Use of Government facilities or personnel.

Sec. 752.7009 Marking.

Sec. 752.7010 Conversion of U.S. dollars to local currency.

Sec. 752.7011 Orientation and language training.

Sec. 752.7012 Protection of the individual as a research subject.

Sec. 752.7013 Contractor-mission relationships.

Sec. 752.7014 Notice of changes in travel regulations.

Sec. 752.7015 Use of pouch facilities.

Sec. 752.7016--752.7017 [Reserved]

Sec. 752.7018 Health and accident coverage for USAID participant 
          trainees.

Sec. 752.7019 Participant training.

Sec. 752.7020 [Reserved]

Sec. 752.7021 Changes in tuition and fees.

Sec. 752.7022 Conflicts between contract and catalog.

Sec. 752.7023 Required visa form for USAID participants.

Sec. 752.7024 Withdrawal of students.

Sec. 752.7025 Approvals.

Sec. 752.7026 [Reserved]

Sec. 752.7027 Personnel.

Sec. 752.7028 Differential and allowances.

Sec. 752.7029 Post privileges.

Sec. 752.7030 Inspection trips by contractor's officers and executives.

Sec. 752.7031 Leave and holidays.

Sec. 752.7032 International travel approval and notification 
          requirements.

Sec. 752.7033 Physical fitness.

Sec. 752.7034 Acknowledgement and disclaimer.

Sec. 752.7035 Public notices.

Subpart 752.3-70--USAID Clause Matrices [Reserved]

    Authority: Sec. 621, Pub. L. 87-195, 75 Stat. 445, (22 U.S.C. 2381) 
as amended; E.O. 12163, Sept. 29, 1979, 44 FR 56673; 3 CFR, 1979 Comp., 
p. 435.

    Source: 49 FR 13259, Apr. 3, 1984, unless otherwise noted.

              Subpart 752.2_Texts of Provisions and Clauses



Sec. 752.200  Scope of subpart.

    None of the clauses specified in this subpart are for use in USAID 
personal services contracts. For personal services contract clauses, see 
AIDAR Appendix D--Direct USAID Contracts

[[Page 64]]

with U.S. Citizens or U.S. Residents for Personal Services Abroad and 
AIDAR Appendix J--Direct USAID Contracts with Cooperating Country 
Nationals and with Third Country Nationals for Personal Services Abroad.

[49 FR 13259, Apr. 3, 1984, as amended at 51 FR 11450, Apr. 3, 1986; 51 
FR 12706, Apr. 15, 1986; 57 FR 5236, Feb. 13, 1992; 62 FR 40469, July 
29, 1997]



Sec. 752.202-1  Definitions.

    (a) As prescribed in 702.270 and in FAR Subpart 2.2, USAID contracts 
use the Definitions clause in FAR 52.202-1 and its Alternate I, as 
appropriate, and the following additional definitions.
    (b) Alternate 70. For use in all USAID contracts. Use in addition to 
the clause in FAR 52.202-1.

   USAID Definitions Clause--General Supplement for Use in All USAID 
                          Contracts (JAN 1990)

    (a) USAID shall mean the U.S. Agency for International Development.
    (b) Administrator shall mean the Administrator or the Deputy 
Administrator of USAID.
    (c) When this contract is with an educational institution Campus 
Coordinator shall mean the representative of the Contractor at the 
Contractor's home institution, who shall be responsible for coordinating 
the activities carried out under the contract.
    (d) When this contract is with an educational institution Campus 
Personnel shall mean representatives of the Contractor performing 
services under the contract at the Contractor's home institution and 
shall include the Campus Coordinator.
    (e) Consultant shall mean any especially well qualified person who 
is engaged, on a temporary or intermittent basis to advise the 
Contractor and who is not an officer or employee of the Contractor who 
performs other duties for the Contractor.
    (f) Contractor employee shall mean an employee of the Contractor 
assigned to work under this contract.
    (g) Cooperating Country or Countries shall mean the foreign country 
or countries in or for which services are to be rendered hereunder.
    (h) Cooperating Government shall mean the government of the 
Cooperating Country.
    (i) Federal Acquisition Regulations (FAR), when referred to herein 
shall include U.S. Agency for International Development Acquisition 
Regulations (AIDAR).
    (j) Government shall mean the United States Government.
    (k) Mission shall mean the United States AID Mission to, or 
principal USAID office in, the Cooperating Country.
    (l) Mission Director shall mean the principal officer in the Mission 
in the Cooperating Country, or his/her designated representative.

    (c) Alternate 71. For use in USAID contracts with an educational 
institution for participant training. Use in addition to the clauses in 
FAR 52.202-1 and in 752.202-1(b) of this chapter.

 USAID Definitions Clause--Supplement for Contracts With an Educational 
             Institution for Participant Training (APR 1984)

    (a) Catalog shall mean any medium by which the Institution publicly 
announces terms and conditions for enrollment in the Institution, 
including tuition and fees to be charged. This includes ``bulletins,'' 
``announcements,'' or any other similar word the Institution may use.
    (b) Director shall mean the individual who fills the USAID position 
of Director, Center for Human Capacity Development (G/HCD), or his/her 
authorized representative acting within the limits of his/her authority.
    (c) Fees shall mean those applicable charges directly related to 
enrollment in the Institution. This shall not include any permit charge 
(e.g., parking, vehicle registration), or charges for services of a 
personal nature (e.g., food, housing, laundry) unless specifically 
called for in this contract.
    (d) Institution shall mean the educational institution providing 
services hereunder. The terms ``Institution'' and ``Contractor'' are 
synonymous.
    (e) Tuition shall mean the amount of money charged by an institution 
for instruction, not including fees as described in this section.

    (d) Alternate 72. For use in all USAID contracts which involve any 
performance overseas. Use in addition to the clauses in FAR 52.202-1 and 
in 752.202-1(b) of this chapter.

   USAID Definitions Clause--Supplement for USAID Contracts Involving 
                     Performance Overseas (DEC 1986)

    (a) Contractor's Chief of Party shall mean the representative of the 
Contractor in the Cooperating Country who shall be responsible for 
supervision of the performance of all duties undertaken by the 
Contractor in the Cooperating Country.
    (b) Cooperating Country National (CCN) employee means an individual 
who meets the citizenship requirements of 48 CFR 702.170-5 and is hired 
while residing outside the

[[Page 65]]

United States for work in a cooperating country.
    (c) Dependents shall mean:
    (1) Spouse;
    (2) Children (including step and adopted children) who are unmarried 
and under 21 years of age or, regardless of age, are incapable of self 
support.
    (3) Parents (including step and legally adoptive parents), of the 
employee or of the spouse, when such parents are at least 51 percent 
dependent on the employee for support; and
    (4) Sisters and brothers (including step or adoptive sisters or 
brothers) of the employee, or of the spouse, when such sisters and 
brothers are at least 51 percent dependent on the employee for support, 
unmarried and under 21 years of age, or regardless of age, are incapable 
of self support.
    (d) Local currency shall mean the currency of the Cooperating 
Country.
    (e) Regular employee shall mean a Contractor employee appointed to 
serve one year or more in the Cooperating Country.
    (f)Short-term employee shall mean a Contractor employee appointed to 
serve less than one year in the Cooperating Country.
    (g) Third Country National (TCN) employee means an individual who 
meets the citizenship requirements of 48 CFR 702.170-15 and is hired 
while residing outside the United States for work in a Cooperating 
Country.

[49 FR 13259, Apr. 3, 1984, as amended at 52 FR 4145, Feb. 10, 1987; 52 
FR 38098, Oct. 14, 1987; 55 FR 6802, Feb. 27, 1990; 64 FR 42042, Aug. 3, 
1999]



Sec. 752.204-2  Security requirements.

    Pursuant to the Uniform State/USAID/USIA Regulations (Volume 12, 
Foreign Affairs Manual, Chapter 540), USAID applies the safeguards 
applicable to ``Confidential'' information to administratively 
controlled information designated as ``Sensitive But Unclassified''. 
Therefore, when the clause in FAR 52.204-2 is used in USAID contracts, 
pursuant to 704.404, paragraph (a) of the clause is revised as follows:

    (a) This clause applies to the extent that this contract involves 
access to classified (`Confidential', `Secret', or `Top Secret'), or 
administratively controlled (`Sensitive But Unclassified') information.

[49 FR 13259, Apr. 3, 1984, as amended at 49 FR 33668, Aug. 24, 1984; 62 
FR 40469, July 29, 1997; 64 FR 5008, Feb. 2, 1999]



Sec. 752.209-71  Organizational conflicts of interest discovered after 

award.

    As prescribed in 709.507-2, include the following clause in any 
solicitation containing a provision in accordance with (48 CFR) FAR 
9.507-1, or a clause in accordance with (48 CFR) FAR 9.507-2, 
establishing a restraint on the contractor's eligibility for future 
contracts.

 Organizational Conflicts of Interest Discovered After Award (JUN 1993)

    (a) The Contractor agrees that, if after award it discovers either 
an actual or potential organizational conflict of interest with respect 
to this contract, it shall make an immediate and full disclosure in 
writing to the Contracting Officer which shall include a description of 
the action(s) which the Contractor has taken or proposes to take to 
avoid, eliminate or neutralize the conflict.
    (b) The Contracting Officer shall provide the contractor with 
written instructions concerning the conflict. USAID reserves the right 
to terminate the contract if such action is determined to be in the best 
interest of the Government.

                             (End of clause)

[58 FR 42255, Aug. 9, 1993, as amended at 64 FR 5008, Feb. 2, 1999]



Sec. 752.211-70  Language and measurement.

    The following clause shall be used in all USAID-direct contracts.

                   Language and Measurement (JUN 1992)

    (a) The English language shall be used in all written communications 
between the parties under this contract with respect to services to be 
rendered and with respect to all documents prepared by the contractor 
except as otherwise provided in the contract or as authorized by the 
contracting officer.
    (b) Wherever measurements are required or authorized, they shall be 
made, computed, and recorded in metric system units of measurement, 
unless otherwise authorized by USAID in writing when it has found that 
such usage is impractical or is likely to cause U.S. firms to experience 
significant inefficiencies or the loss of markets. Where the metric 
system is not the predominant standard for a particular application, 
measurements may be expressed in both the metric and the traditional 
equivalent units, provided the metric units are listed first.

                             (End of clause)

[57 FR 23321, June 3, 1992. Redesignated at 61 FR 39095, July 26, 1996]

[[Page 66]]



Sec. 752.216-70  Award fee.

    As prescribed in 716.406, insert the following clause in 
solicitations and contracts in which an award-fee contract is 
contemplated.

                          Award Fee (MAY 1997)

    (a) The Government shall pay the Contractor for performing this 
contract such base fee and such additional fee as may be awarded, as 
provided in the Schedule.
    (b) Payment of the base fee and award fee shall be made as specified 
in the Schedule; provided, that after payment of 85 percent of the base 
fee and potential award fee, the Contracting Officer may withhold 
further payment of the base fee and award fee until a reserve is set 
aside in an amount that the Contracting Officer considers necessary to 
protect the Government's interest. This reserve shall not exceed 15 
percent of the total base fee and potential award fee or $100,000, 
whichever is less. The Contracting Officer shall release 75 percent of 
all fee withholds under this contract after receipt of the certified 
final indirect cost rate proposal covering the year of physical 
completion of this contract, provided the Contractor has satisfied all 
other contract terms and conditions, including the submission of the 
final patent and royalty reports, and is not delinquent in submitting 
final vouchers on prior years' settlements. The Contracting Officer may 
release up to 90 percent of the fee withholds under this contract based 
on the Contractor's past performance related to the submission and 
settlement of final indirect cost rate proposals.
    (c) Award fee determinations made by the Government under this 
contract are not subject to the Disputes clause.

                             (End of clause)

[64 FR 5008, Feb. 2, 1999]



Sec. 752.219-8  Utilization of small business concerns and small 

disadvantaged business concerns.

    The Foreign Assistance Act calls for USAID to give small businesses 
an opportunity to provide supplies and services for foreign assistance 
projects. To help USAID meet this obligation, the following paragraph is 
to be added to the clause prescribed in FAR 19.708(a):

    USAID small business provision. To permit USAID, in accordance with 
the small business provisions of the Foreign Assistance Act, to give 
small business firms an opportunity to participate in supplying 
equipment supplies and services financed under this contract, the 
Contractor shall, to the maximum extent possible, provide the following 
information to the Office of Small and Disadvantaged Business 
Utilization (OSDBU), USAID, Washington, DC 20523-1414, at least 45 days 
prior to placing any order in excess of the simplified acquisition 
threshold except where a shorter time is requested of, and granted by 
OSDBU:
    (1) Brief general description and quantity of commodities or 
services;
    (2) Closing date for receiving quotations or bids; and
    (3) Address where invitations or specifications may be obtained.

[49 FR 13259, Apr. 3, 1984, as amended at 52 FR 21059, June 4, 1987; 56 
FR 2699, Jan. 24, 1991; 61 FR 39095, July 26, 1996; 62 FR 40469, July 
29, 1997]



Sec. 752.219-70  USAID Mentor-Prot[eacute]g[eacute] Program.

    As prescribed in 719.273-11(a), insert the following provision:

       USAID Mentor-Prot[eacute]g[eacute] Program (July 13, 2007)

    (a) Large and small business are encouraged to participate in the 
USAID Mentor-Prot[eacute]g[eacute] Program (the ``Program''). Mentor 
firms provide eligible small business Prot[eacute]g[eacute]s with 
developmental assistance to enhance their business capabilities and 
ability to obtain Federal contracts.
    (b) Mentor firms are large prime contractors or eligible small 
business capable of providing developmental assistance. 
Prot[eacute]g[eacute] firms are small business as defined in 13 CFR 
parts 121, 124, and 126.
    (c) Developmental assistance is technical, managerial, financial, 
and other mutually beneficial assistance that aids 
Prot[eacute]g[eacute]s. The costs for developmental assistance are not 
chargeable to the contract.
    (d) Firms interested in participating in the Program are encouraged 
to contact the USAID Mentor-Prot[eacute]g[eacute] Program Manager (202-
712-1500) for more information.

                           (End of provision)

[72 FR 32546, June 13, 2007]



Sec. 752.219-71  Mentor requirements and evaluation.

    As prescribed in AIDAR 719.273-11(b), insert the following clause:

           Mentor Requirements and Evaluation (July 13, 2007)

    (a) Mentor and Prot[eacute]g[eacute] firms shall submit an 
evaluation of the overall experience in the Program to OSDBU at the 
conclusion of the mutually agreed upon Program period,

[[Page 67]]

the conclusion of the contract, or the voluntary withdrawal by either 
party from the Program, whichever occurs first. At the conclusion of 
each year in the Mentor-Prot[eacute]g[eacute] Program, the Mentor and 
Prot[eacute]g[eacute] will formally brief the USAID Mentor-
Prot[eacute]g[eacute] Program Manager regarding Program accomplishments 
under their Mentor-Prot[eacute]g[eacute] Agreement.
    (b) Mentor or Prot[eacute]g[eacute] shall notify OSDBU in writing, 
at least 30 calendar days in advance of the effective date of the firm's 
withdrawal from the Program.

                             (End of clause)

[72 FR 32546, June 13, 2007]



Sec. 752.225-9  Buy American Act--Trade Agreements Act--Balance of 

Payments Program.

    The clause prescribed by FAR 25.408(a)(2) is not generally included 
in USAID contracts when more stringent source requirements are stated in 
the contract or when inclusion is not appropriate under FAR 25.403, or 
725.403 of this chapter. (See Executive Order 11223, dated May 12, 1965, 
30 FR 6635.) The clause setting forth USAID's source restrictions is 
shown in section 752.225-70.

[49 FR 13259, Apr. 3, 1984, as amended at 54 FR 16122, Apr. 21, 1989; 59 
FR 33447, June 29, 1994; 62 FR 40470, July 29, 1997]



Sec. 752.225-70  Source, origin and nationality requirements.

    The following clause is required as prescribed in 725.704.

         Source, Origin and Nationality Requirements (FEB 1997)

    (a) Except as may be specifically approved by the Contracting 
Officer, all commodities (e.g., equipment, materials, vehicles, 
supplies) and services (including commodity transportation services) 
which will be financed under this contract with U.S. dollars shall be 
procured in accordance with the requirements in 22 CFR part 228, ``Rules 
on Source, Origin and Nationality for Commodities and Services Financed 
by USAID.'' The authorized source for procurement is Geographic Code 000 
unless otherwise specified in the schedule of this contract. Guidance on 
eligibility of specific goods or services may be obtained from the 
Contracting Officer.
    (b) Ineligible goods and services. The Contractor shall not procure 
any of the following goods or services under this contract:
    (1) Military equipment,
    (2) Surveillance equipment,
    (3) Commodities and services for support of police and other law 
enforcement activities,
    (4) Abortion equipment and services,
    (5) Luxury goods and gambling equipment, or
    (6) Weather modification equipment.
    (c) Restricted goods. The Contractor shall not procure any of the 
following goods or services without the prior written approval of the 
Contracting Officer:
    (1) Agricultural commodities,
    (2) Motor vehicles,
    (3) Pharmaceuticals and contraceptive items,
    (4) Pesticides,
    (5) Fertilizer,
    (6) Used equipment, or
    (7) U.S. government-owned excess property.
    If USAID determines that the Contractor has procured any of these 
specific restricted goods under this contract without the prior written 
authorization of the Contracting Officer, and has received payment for 
such purposes, the Contracting Officer may require the contractor to 
refund the entire amount of the purchase.

[62 FR 40470, July 29, 1997; 62 FR 45334, Aug. 27, 1997]



Sec. 752.225-71  Local procurement.

    For use in any USAID contract involving performance overseas.

                      Local Procurement (FEB 1997)

    (a) Local procurement involves the use of appropriated funds to 
finance the procurement of goods and services supplied by local 
businesses, dealers, or producers, with payment normally being in the 
currency of the cooperating country.
    (b) All locally-financed procurements must be covered by source/
origin and nationality waivers as set forth in subpart F of 22 CFR part 
228 except as provided for in 22 CFR 228.40, Local procurement.

[62 FR 40470, July 29, 1997; 62 FR 45334, Aug. 27, 1997; 62 FR 47532, 
Sept. 9, 1997]



Sec. 752.226-1  Determination of status as disadvantaged enterprise.

    As prescribed in 726.7006(a), insert the following provision:

           Disadvantaged Enterprise Representation (APR 1991)

    The offeror/contractor shall submit a representation in the 
following form to the contracting officer:
    (a) Representation. The offeror represents that:
    (1) It [squ] is, [squ] is not a small disadvantaged business.

[[Page 68]]

    (2) It [squ] is, [squ] is not an historically black college or 
university, as designated by the Secretary of Education pursuant to 34 
CFR 608.2.
    (3) It [squ] is, [squ] is not a college or university having a 
student body in which more than 40 percent of the students are Hispanic 
American.
    (4) It [squ] is, [squ] is not a private voluntary organization which 
is controlled by individuals who are socially and economically 
disadvantaged.
    (b) Definitions. (1) Asian Pacific Americans, as used in this 
provision means United States citizens whose origins are in Japan, 
China, the Philippines, Vietnam, Korea, Samoa, Guam, the U.S. Trust 
Territory of the Pacific Islands (Republic of Palau), the Northern 
Mariana Islands, Laos, Kampuchea (Cambodia), Taiwan, Burma, Thailand, 
Malaysia, Indonesia, Singapore, Brunei, Republic of the Marshall 
Islands, or the Federated States of Micronesia.
    (2) Controlled by socially and economically disadvantaged 
individuals means management and daily business are controlled by one or 
more such individuals.
    (3) Native Americans, as used in this provision means American 
Indians, Eskimos, Aleuts, and native Hawaiians.
    (4) Owned by socially and economically disadvantaged individuals 
means at least 51 percent owned by one or more individuals who are both 
socially and economically disadvantaged, or a publicly owned business 
having at least 51 percent of its stock owned by one or more socially 
and economically disadvantaged individuals.
    (5) Small business concern, as used in this provision, means a U.S. 
concern, including its affiliates, that is independently owned and 
operated, not dominant in the field of operation in which it is bidding 
on Government contracts, and qualifies as a small business under the 
criteria and size standards in 13 CFR part 121.
    (6) Small disadvantaged business, as used in this provision, means a 
small business concern that:
    (i) Is at least 51 percent owned by one or more individuals who are 
both socially and economically disadvantaged, or a publicly owned 
business having at least 51 percent of its stock owned by one or more 
socially and economically disadvantaged individuals; and
    (ii) Has its management and daily business controlled by one or more 
such individuals.
    (7) Subcontinent Asian Americans, as used in this provision, means 
United States citizens whose origins are in India, Pakistan, Bangladesh, 
Sri Lanka, Bhutan, or Nepal.
    (c) Qualified groups. The offeror shall presume that socially and 
economically disadvantaged individuals include Black Americans, Hispanic 
Americans, Native Americans, Asian-Pacific Americans, Subcontinent Asian 
Americans, and women.

                           (End of provision)

[56 FR 27209, June 13, 1991, as amended at 62 FR 40470, July 29, 1997]



Sec. 752.226-2  Subcontracting with disadvantaged enterprises.

    As prescribed in 726.7007, insert the following clause:

        Subcontracting With Disadvantaged Enterprises (APR 1997)

    Note: This clause does not apply to prime contractors that qualify 
as disadvantaged enterprises as described below.
    (a) Not less than ten (10) percent of the dollar value of this 
contract shall be subcontracted to disadvantaged enterprises as 
described in paragraph (b) of this clause.
    (b) Disadvantaged enterprises are U.S. organizations or individuals 
that are:
    (1) Business concerns (as defined in FAR 19.001) owned and 
controlled by socially and economically disadvantaged individuals;
    (2) Institutions designated by the Secretary of Education, pursuant 
to 34 CFR 608.2, as historically black colleges and universities:
    (3) Colleges and universities having a student body in which more 
than 40 percent of the students are Hispanic American; or
    (4) Private voluntary organizations which are controlled by 
individuals who are socially and economically disadvantaged.
    (c) Definitions. (1) Controlled by socially and economically 
disadvantaged individuals means management and daily business are 
controlled by one or more such individuals.
    (2) Owned by socially and economically disadvantaged individuals 
means at least 51 percent owned by one or more individuals who are both 
socially and economically disadvantaged, or a publicly owned business 
having at least 51 percent of its stock owned by one or more socially 
and economically disadvantaged individuals.
    (3) Socially and economically disadvantaged individuals has the same 
meaning as in FAR 19.001, except that the term also includes women.
    (d) Contractors should require representations from their 
subcontractors regarding their status as a disadvantaged enterprise. 
Contractors acting in good faith may rely on such representations by 
their subcontractors.

                             (End of clause)

[56 FR 27210, June 13, 1991, as amended at 62 FR 40470, July 29, 1997]

[[Page 69]]



Sec. 752.226-3  Limitation on subcontracting.

    As prescribed in 726.7008, insert the following clause:

                Limitations on Subcontracting (JUN 1993)

    By submission of an offer and execution of a contract, the Offeror/
Contractor agrees that in performance of the contract, at least 51 
percent of the cost of contract performance incurred for personnel shall 
be expended for employees of the contractor or employees of other 
disadvantaged enterprises eligible under the terms of 706.302-71. For 
the purposes of this clause, independent contractors hired by the 
contractor shall be considered employees of the contractor.

                             (End of clause)

[58 FR 42255, Aug. 9, 1993, as amended at 62 FR 40470, July 29, 1997]



Sec. 752.227-14  Rights in Data--general.

    As prescribed in 727.409(b), insert the following clause:
    Rights in Data--

                           General (OCT 2007)

    The following paragraph (d) replaces paragraph (d) of (48 CFR) FAR 
52.227-14 Rights in Data--General.
    (d) Release, publication and use of data.
    (1) For all data first produced or specifically used by the 
Contractor in the performance of this contract in the United States, its 
territories, or Puerto Rico, the Contractor shall have the right to use, 
release to others, reproduce, distribute, or publish such data, except 
to the extent such data may be subject to the Federal export control or 
national security laws or regulations, or unless otherwise provided in 
this paragraph of this clause or expressly set forth in this contract 
[see paragraph (d)(3) for limitations on contracts performed outside of 
the US].
    (2) The Contractor agrees that to the extent it receives or is given 
access to data necessary for the performance of this contract which 
contain restrictive markings, the Contractor shall treat the data in 
accordance with such markings unless otherwise specifically authorized 
in writing by the Contracting Officer.
    (3) For all data first produced or specifically used by the 
Contractor in the overseas performance of this contract, the Contractor 
shall not release, reproduce, distribute, or publish such data without 
the written permission of the Contracting Officer. The government also 
may require the contractor to assign copyright to the government or 
another party as circumstances warrant or as specifically stated 
elsewhere in the contract.

[72 FR 53164, Sept. 18, 2007]

    Effective Date Note: At 72 FR 53164, Sept. 18, 2007, Sec.  752.227-
14 was added, effective October 18, 2007.



Sec. 752.228-3  Worker's compensation insurance (Defense Base Act).

    As prescribed in 728.309, the following supplemental coverage is to 
be added to the clause specified in FAR 52.228-3 by the USAID 
contracting officer.

    (a) The Contractor agrees to procure Defense Base Act (DBA) 
insurance pursuant to the terms of the contract between USAID and 
USAID's DBA insurance carrier unless the Contractor has a DBA self 
insurance program approved by the Department of Labor or has an approved 
retrospective rating agreement for DBA.
    (b) If USAID or the contractor has secured a waiver of DBA coverage 
(see AIDAR 728.305-70(a)) for contractor's employees who are not 
citizens of, residents of, or hired in the United States, the contractor 
agrees to provide such employees with worker's compensation benefits as 
required by the laws of the country in which the employees are working, 
or by the laws of the employee's native country, whichever offers 
greater benefits.
    (c) The Contractor further agrees to insert in all subcontracts 
hereunder to which the DBA is applicable, a clause similar to this 
clause, including this sentence, imposing on all subcontractors a like 
requirement to provide overseas workmen's compensation insurance 
coverage and obtain DBA coverage under the USAID requirements contract.

[53 FR 50631, Dec. 16, 1988, as amended at 54 FR 16122, Apr. 21, 1989; 
56 FR 67226, Dec. 30, 1991]



Sec. 752.228-7  Insurance--liability to third persons.

    As prescribed in 728.307-2(c), the following paragraph is to be 
added to the clause specified in FAR 52.228-7 as either paragraph (h) 
(if FAR 52.228-7 Alternate I is not used) or (i) (if FAR 52.228-7 
Alternate I is used):

    ( ) Insurance on private automobiles. If the Contractor or any of 
its employees or their dependents transport or cause to be transported 
(whether or not at contract expense) privately owned automobiles to the 
Cooperating Country, or they or any of them purchase an automobile 
within the Cooperating Country, the Contractor agrees to make certain 
that all such automobiles during such ownership within the Cooperating 
Country

[[Page 70]]

will be covered by a paid-up insurance policy issued by a reliable 
company providing the following minimum coverages or such other minimum 
coverages as may be set by the Mission Director, payable in United 
States dollars or its equivalent in the currency of the Cooperating 
Country: injury to persons, $10,000/$20,000; property damage, $5,000. 
The premium costs for such insurance shall not be a reimbursable cost 
under this contract. Copies of such insurance policies shall be 
preserved and made available as part of the Contractor's records which 
are required to be preserved and made available by the ``Audit and 
Records--Negotiation'' clause of this contract.

[53 FR 50632, Dec. 16, 1988, as amended at 54 FR 16122, Apr. 21, 1989; 
62 FR 40470, July 29, 1997]



Sec. 752.228-9  Cargo insurance.

    As prescribed in 728.313(a), the following preface is to be used 
preceding the text of the clause at FAR 52.228-9:

    Preface: To the extent that marine insurance is necessary or 
appropriate under this contract, the contractor shall ensure that U.S. 
marine insurance companies are offered a fair opportunity to bid for 
such insurance. This requirement shall be included in all subcontracts 
under this contract.

[53 FR 50632, Dec. 16, 1988]



Sec. 752.228-70  Medical Evacuation (MEDEVAC) Services.

    As prescribed in 728.307-70, for use in all contracts requiring 
performance overseas:

            Medical Evacuation (MEDEVAC) Services (JUL 2007)

    (a) Contractor must provide MEDEVAC service coverage to all U.S. 
citizen, U.S. resident alien, and Third Country National employees and 
their authorized dependents (hereinafter ``individual'') while overseas 
under a USAID-financed direct contract. USAID will reimburse reasonable, 
allowable, and allocable costs for MEDEVAC service coverage incurred 
under the contract. The Contracting Officer will determine the 
reasonableness, allowability, and allocability of the costs based on the 
applicable cost principles and in accordance with cost accounting 
standards.
    (b) Exceptions. (i) The Contractor is not required to provide 
MEDEVAC insurance to eligible employees and their dependents with a 
health program that includes sufficient MEDEVAC coverage as approved by 
the Contracting Officer.
    (ii) The Mission Director may make a written determination to waive 
the requirement for such coverage. The determination must be based on 
findings that the quality of local medical services or other 
circumstances obviate the need for such coverage for eligible employees 
and their dependents located at post.
    (c) Contractor must insert a clause similar to this clause in all 
subcontracts that require performance by contractor employees overseas.

[59 FR 33447, June 29, 1994, as amended at 72 FR 19669, Apr. 19, 2007]



Sec. 752.229-70  Federal, state and local taxes.

    For contracts involving performance overseas the clauses prescribed 
in FAR 29.401-3 or 29.401-4 may be modified to specify that the taxes 
referred to are United States taxes.



Sec. 752.231-71  Salary supplements for HG employees.

    As prescribed in 731.205-71, for use in all contracts with a 
possible need or services of a HG employee. The clause should also be 
inserted in all subsequent sub-contracts.

             Salary Supplements for HG Employees (OCT 1998)

    (a) Salary supplements are payments made that augment an employee's 
base salary or premiums, overtime, extra payments, incentive payment and 
allowances for which the HG employee would qualify under HG rules or 
practice for the performance of his/hers regular duties or work 
performed during his/hers regular office hours. Per diem, invitational 
travel, honoraria and payment for work carried out outside of normal 
working hours are not considered to be salary supplements.
    (b) Salary supplements to HG Employees are not allowable without the 
written approval of the Contracting Officer.

[64 FR 16649, Apr. 6, 1999]



Sec. 752.232-7  Payments under time-and-materials and labor-hour 

contracts.

    USAID uses the payment provision contained in FAR 52.232-7 in 
indefinite quantity contracts for professional services up to 120 days, 
as provided in USAIDAR 716.501(c). When this provision is used the 
following preamble will be included:

    For the purposes of this clause certain terms shall be interpreted 
as follows:
    The term contract(s) includes ``delivery order(s)''; ``hour(s)'', or 
``hourly'' may be calculated in terms of ``day(s)'' or ``daily (8

[[Page 71]]

hours)'' and ``materials'' includes ``other direct costs''.

[50 FR 11450, Apr. 3, 1986]

    Effective Date Note: At 72 FR 53164, Sept. 18, 2007, Sec.  752.232-7 
was removed, effective October 18, 2007.



Sec. 752.232-70  Letter of credit advance payment.

    As required by 732.406-73 insert the following clause in contracts 
being paid by Letter of Credit.

                    Letter of Credit Advance Payment
                               (OCT 1989)

    (a) Payment under this contract shall be by means of a Letter of 
Credit (LOC) in accordance with the terms and conditions of the LOC and 
any instructions issued by the USAID Office of Financial Management, 
Cash Management and Payment Division (FM/CMP).
    (b) As long as the LOC is in effect, the terms and conditions of the 
LOC and any instructions issued by FM/CMP constitute the payment 
conditions of this contract, superseding and taking precedence over any 
other clause of this contract concerning payment.
    (c) If the LOC is revoked, payment may be made on a cost-
reimbursement basis, in accordance with the other clauses of this 
contract concerning payment.
    (d) Revocation of the LOC is at the discretion of FM/CMP after 
consultation with the contracting officer. Notification to the 
contractor of revocation must be in writing and must specify the reasons 
for such action. The contractor may appeal any such revocation to the 
contracting officer, in accordance with the Disputes clause of this 
contract. Pending final decision, payments under the contact will be in 
accordance with paragraph (c) of this clause.

[49 FR 13259, Apr. 3, 1984, as amended at 49 FR 33668, Aug. 24, 1984; 54 
FR 46391, Nov. 3, 1989; 56 FR 67226, Dec. 30, 1991; 59 FR 33447, June 
29, 1994]



Sec. 752.242-70  Periodic progress reports.

    As prescribed in 742.1170-3(c), insert the following clause in 
contracts for which periodic progress reports are required from the 
contractor. The term ``contract'' shall be interpreted as ``task order'' 
or ``delivery order'' when this clause is used in an indefinite-delivery 
contract.

                  Periodic Progress Reports (OCT 2007)

    (a) The contractor shall prepare and submit progress reports as 
specified in the contract schedule. These reports are separate from the 
interim and final performance evaluation reports prepared by USAID in 
accordance with FAR 42.15 and internal Agency procedures, but they may 
be used by USAID personnel or their authorized representatives when 
evaluating the contractor's performance.
    (b) During any delay in furnishing a progress report required under 
this contract, the contracting officer may withhold from payment an 
amount not to exceed US$25,000 (or local currency equivalent) or 5 
percent of the amount of this contract, whichever is less, until such 
time as the contractor submits the report or the contracting officer 
determines that the delay no longer has a detrimental effect on the 
Government's ability to monitor the contractor's progress.

[72 FR 53164, Sept. 18, 2007]

    Effective Date Note: At 72 FR 53164, Sept. 18, 2007, Sec.  752.242-
70 was added, effective October 18, 2007.



Sec. 752.245-70  Government property--USAID reporting requirements.

    In response to a GAO audit recommendation, USAID contracts, except 
for those for commercial items, must contain the following preface and 
reporting requirement as additions to the appropriate Government 
Property clause prescribed by FAR 45.106.

    Preface: to be inserted preceding the text of the FAR clause.
    The term Government furnished property wherever it may appear in the 
following clause, shall mean (1) non-expendable personal property owned 
by or leased to the U.S. Government and furnished to the contractor and 
(2) personal property furnished either prior to or during the 
performance of this contract by any U.S. Government accountable officer 
to the contractor for use in connection with performance of this 
contract and identified by such officer as accountable. The term 
government property, wherever it may appear in the following clause, 
shall mean government-furnished property and non-expendable personal 
property title to which vests in the U.S. Government under this 
contract. Non-expendable property, for purposes of this contract, is 
defined as property which is complete in itself, does not lose its 
identity or become a component part of another article when put into 
use; is durable, with an expected service life of two years or more; and 
which has a unit cost of more than $500.
    Reporting Requirement: to be inserted following the text of the FAR 
clause.
    Reporting Requirements: The contractor will submit an annual report 
on all non-expendable property in a form and manner acceptable to USAID 
substantially as follows:

[[Page 72]]



      Annual Report of Government Property in Contractor's Custody
        [(Name of contractor) as of (end of contract year), 19xx]
------------------------------------------------------------------------
                                              Furniture and
                                              furnishings--      Other
              Motor vehicles               ------------------ nonexpend-
                                                     Living      able
                                            Office  quarters   property
------------------------------------------------------------------------
A. Value of property as of last report....  ......  ........  ..........
B. Transactions during this reporting       ......  ........  ..........
 period...................................
1. Acquisitions (add):
  a. Purchased by contractor \1\..........  ......  ........  ..........
  b. Transferred from USAID \2\...........  ......  ........  ..........
  c. Transferred from others, without       ......  ........  ..........
   reimbursement \3\......................
2. Disposals (deduct):
  a. Returned to USAID....................  ......  ........  ..........
  b. Transferred to USAID--contractor       ......  ........  ..........
   purchased..............................
  c. Transferred to other Government        ......  ........  ..........
   agencies \3\...........................
  d. Other disposals \3\..................  ......  ........  ..........
C. Value of property as of reporting date.  ......  ........  ..........
D. Estimated average age of contractor      ......  ........  ..........
 held property............................
------------------------------------------------------------------------
                                             Years    Years     Years
------------------------------------------------------------------------
\1\ Property which is complete in itself, does not lose its identity or
  become a component part of another article when put into use; is
  durable, with an expected service life of two years or more; and which
  has a unit cost of more than $500.
\2\ Government furnished property listed in this Contract as
  nonexpendable.
\3\ Explain if transactions were not processed through or otherwise
  authorized by USAID.

                    Property Inventory Verifications

    I attest that (1) physical inventories of Government property are 
taken not less frequently than annually; (2) the accountability records 
maintained for Government property in our possession are in agreement 
with such inventories; and (3) the total of the detailed accountability 
records maintained agrees with the property value shown opposite line C 
above, and the estimated average age of each category of property is as 
cited opposite line D above.
________________________________________________________________________

                          Authorized Signature

[49 FR 13259, Apr. 3, 1984, as amended at 62 FR 40470, July 29, 1997]



Sec. 752.245-71  Title to and care of property.

    As prescribed in 745.106(a), the following clause shall be included 
in all contracts when the contractor will acquire property under the 
contract for use overseas and the contract funds were obligated under a 
Strategic Objective agreement (or similar agreement) with the 
cooperating country.

                Title to and Care of Property (APR 1984)

    (a) Title to all non-expendable property purchased with contract 
funds under this contract and used in the Cooperating Country, shall at 
all times be in the name of the Cooperating Government, or such public 
or private agency as the Cooperating Government may designate, unless 
title to specified types or classes of non-expendable property is 
reserved to USAID under provisions set forth in the schedule of this 
contract; but all such property shall be under the custody and control 
of Contractor until the owner of title directs otherwise, or completion 
of work under this contract or its termination, at which time custody 
and control shall be turned over to the owner of title or disposed of in 
accordance with its instructions. All performance guaranties and 
warranties obtained from suppliers shall be taken in the name of the 
title owner. (Non-expendable property is property which is complete in 
itself, does not lose its identity or become a component part of another 
article when put into use; is durable, with an expected service life of 
two years or more; and which has a unit cost of $500 of more.)
    (b) Contractor shall prepare and establish a program, to be approved 
by the Mission, for the receipt, use, maintenance, protection, custody, 
and care of non-expendable property for which it has custodial 
responsibility, including the establishment of reasonable controls to 
enforce such program.
    (c)(1) For non-expendable property to which title is reserved to the 
U.S. Government under provisions set forth in the schedule of this 
contract, Contractor shall submit an annual report on all non-expendable 
property under its custody as required in the clause of this contract 
entitled ``Government Property''.
    (2) For non-expendable property titled to the Cooperating 
Government, the Contractor shall, within 90 days after completion of 
this contract, or at such other date as may be fixed by the Contracting 
Officer, submit an inventory schedule covering all items of non-
expendable property under its custody, which have not been consumed in 
the performance of this contract. The Contractor shall also indicate 
what disposition has been made of such property.

[49 FR 13259, Apr. 3, 1984, as amended at 62 FR 40470, July 29, 1997; 64 
FR 5009, Feb. 2, 1999]



Sec. 752.247-70  Preference for privately owned U.S.-flag commercial 

vessels.

    As prescribed in 747.507, insert the following clause:

[[Page 73]]

 Preference for Privately Owned U.S.-Flag Commercial Vessels (OCT 1996)

    (a) Under the provisions of the Cargo Preference Act of 1954 (46 
U.S.C. 1241(b)) at least 50 percent of the gross tonnage of equipment, 
materials, or commodities financed by USAID, or furnished without 
provision for reimbursement, or at least 75 percent of the gross tonnage 
of cargo moving under P.L. 480 financed by the U.S. Department of 
Agriculture, that may be transported in ocean vessels (computed 
separately for dry bulk carriers, dry cargo liners, and tankers) shall 
be transported in privately owned U.S.-flag commercial vessels.
    (b) In accordance with USAID regulations and consistent with the 
regulations of the Maritime Administration, USAID applies Cargo 
Preference requirements on the basis of programs or activities that 
generally include more than one contract. Thus, the amount of cargo 
fixed on privately owned U.S.-flag vessels under this contract may be 
more or less than the required 50 or 75 percent, depending on current 
compliance with Cargo Preference requirements. If freight under the 
contract is fixed on a U.S. flag vessel, Alternate I of this clause 
shall apply.
    (c)(1) The contractor shall submit one legible copy of a rated on-
board ocean bill of lading for each shipment to both the Division of 
National Cargo, Office of Cargo Preference, Maritime Administration, 
U.S. Department of Transportation, Washington, DC 20590, and the 
Transportation Division, Office of Acquisition and Assistance, USAID, 
Washington, DC 20523-7900.
    (2) The contractor shall furnish these bill of lading copies within 
20 working days of the date of loading for shipments originating in the 
United States, or within 30 working days for shipments originating 
outside the United States. Each bill of lading copy shall contain the 
following information:
    (i) Sponsoring U.S. Government agency.
    (ii) Name of vessel.
    (iii) Vessel flag registry.
    (iv) Date of loading.
    (v) Port of loading.
    (vi) Port of final discharge.
    (vii) Description of commodity.
    (viii) Gross weight in pounds and cubic feet if available.
    (ix) Total ocean freight revenue in U.S. dollars.

                               Alternate I

    (d) If freight is fixed on a U.S. flag vessel, except as provided in 
paragraph (e) of this clause, the contractor shall use privately owned 
U.S. flag commercial vessels, and no others, in the ocean transportation 
of any supplies to be furnished under this contract.
    (e) If such vessels are not available, or not available at rates 
that are fair and reasonable for privately owned U.S. flag commercial 
vessels, the Contractor shall notify the contracting officer and request 
either authorization to ship in foreign-flag vessels or designation of 
available U.S.-flag vessels. If the Contractor is authorized in writing 
by the Contracting Officer to ship the supplies in foreign-flag vessels, 
the contract price shall be equitably adjusted to reflect the difference 
in costs of shipping the suppliers in privately owned U.S.-flag 
commercial vessels and foreign-flag vessels.

[64 FR 5009, Feb. 2, 1999, as amended at 72 FR 19670, Apr. 19, 2007]

             Subpart 752.70_Texts of USAID Contract Clauses



Sec. 752.7000  Scope of subpart.

    Subpart 752.70 contains the text of USAID-specific contract clauses 
for which there is no FAR equivalent. The clauses in this subpart do not 
apply to contracts for personal services. For personal service contract 
clauses see AIDAR Appendix D--Direct USAID Contracts with U.S. Citizens 
or U.S. Residents for Personal Services Abroad and AIDAR Appendix J--
Direct USAID Contracts with Cooperating Country Nationals and with Third 
Country Nationals for Personal Services Abroad.

[49 FR 13259, Apr. 3, 1984, as amended at 57 FR 5237, Feb. 13, 1992]



Sec. 752.7001  Biographical data.

    The following clause is to be included in all USAID cost 
reimbursement contracts.

                      Biographical Data (JUL 1997)

    The Contractor agrees to furnish to the Contracting Officer on USAID 
Form 1420-17, ``Contractor Employee Biographical Data Sheet'', 
biographical information on the following individuals to be employed in 
the performance of the contract: (1) All individuals to be sent outside 
the United States, or (2) any employees designated as ``key personnel''. 
Biographical data in the form usually maintained by the Contractor on 
the other individuals employed under the contract shall be available for 
review by USAID at the Contractor's headquarters. A supply of USAID Form 
1420-17 will be provided with this contract. The Contractor may 
reproduce additional copies as necessary.

[62 FR 40470, July 29, 1997; 62 FR 45334, Aug. 27, 1997; 62 FR 47532, 
Sept. 9, 1997]

[[Page 74]]



Sec. 752.7002  Travel and transportation.

    For use in cost reimbursement contracts performed in whole or in 
part overseas.

                  Travel and Transportation (JAN 1990)

    (a) General. The Contractor will be reimbursed for reasonable, 
allocable and allowable travel and transportation expenses incurred 
under and for the performance of this contract. Determination of 
reasonableness, allocability and allowability will be made by the 
Contracting Officer based on the applicable cost principles, the 
Contractor's established policies and procedures, USAID's established 
policies and procedures for USAID direct-hire employees, and the 
particular needs of the project being implemented by this contract. The 
following paragraphs provide specific guidance and limitations on 
particular items of cost.
    (b) International travel. For travel to and from post of assignment 
the Contractor shall be reimbursed for travel costs and travel 
allowances of travelers from place of residence in the United States (or 
other location provided that the cost of such travel does not exceed the 
cost of the travel from the employee's residence in the United States) 
to the post of duty in the Cooperating Country and return to place of 
residence in the United States (or other location provided that the cost 
of such travel does not exceed the cost of travel from the post of duty 
in the Cooperating Country to the employee's residence) upon completion 
of services by the individual. Reimbursement for travel will be in 
accordance with the applicable cost principles and the provisions of 
this contract, and will be limited to the cost of travel by the most 
direct and expeditious route. If a regular employee does not complete 
one full year at post of duty (except for reasons beyond his/her 
control), the costs of going to and from the post of duty for that 
employee and his/her dependents are not reimbursable hereunder. If the 
employee serves more than one year but less than the required service in 
the Cooperating Country (except for reasons beyond his/her control) the 
costs of going to the post of duty are reimbursable hereunder but the 
costs of going from post of duty to the employee's permanent, legal 
place of residence at the time he or she was employed for work under 
this contract or other location as approved by the Contracting Officer 
are not reimbursable under this contract for the employee and his/her 
dependents. When travel is by economy class accommodations, the 
Contractor will be reimbursed for the cost of transporting up to 22 
pounds of accompanied personal baggage per traveler in addition to that 
regularly allowed with the economy ticket provided that the total number 
of pounds of baggage does not exceed that regularly allowed for first 
class travelers. Travel allowances for travelers shall not be in excess 
of the rates authorized in the Standardized Regulations (Government 
Civilians, Foreign Areas)--hereinafter referred to as the Standardized 
Regulations--as from time to time amended, for not more than the travel 
time required by scheduled commercial air carrier using the most 
expeditious route. One stopover en route for a period of not to exceed 
24 hours is allowable when the traveler uses economy class 
accommodations for a trip of 14 hours or more of scheduled duration. 
Such stopover shall not be authorized when travel is by indirect route 
or is delayed for the convenience of the traveler. Per diem during such 
stopover shall be paid in accordance with the established practice of 
the Contractor but not to exceed the amounts stated in the Standardized 
Regulations.
    (c) Local travel. Reimbursement for local travel in connection with 
duties directly referable to the contract shall not be in excess of the 
rates established by the Mission Director for the travel costs of 
travelers in the Cooperating Country. In the absence of such established 
rates the Contractor shall be reimbursed for actual travel costs of 
travelers in the Cooperating Country, if not provided by the Cooperating 
Government or the Mission, including travel allowances at rates not in 
excess of those prescribed by the Standardized Regulations.
    (d) Travel for consultation. The Contractor shall be reimbursed for 
the round trip of the Contractor's Chief of Party in the Cooperating 
Country or other designated Contractor employee or consultant in the 
Cooperating Country performing services required under this Contract, 
for travel from the Cooperating Country to the Contractor's office in 
the United States or to USAID/Washington for consultation and return on 
occasions deemed necessary by the Contractor and approved in advance, in 
writing, by the Contracting Officer or the Mission Director.
    (e) Special international travel and third country travel. For 
special travel which advances the purpose of the contract, which is not 
otherwise provided by the Cooperating Government, and with the prior 
written approval of the Contracting Officer or the Mission Director, the 
Contractor shall be reimbursed for (i) the travel cost of travelers 
other than between the United States and the Cooperating Country and for 
local travel within other countries and (ii) travel allowance for 
travelers while in travel status and while performing services hereunder 
in such other countries at rates not in excess of those prescribed by 
the Standardized Regulations.
    (f) Indirect travel for personal convenience. When travel is 
performed by an indirect route for the personal convenience of the

[[Page 75]]

traveler, the allowable costs of such travel will be computed on the 
basis of the cost of allowable air fare via the direct usually traveled 
route. If such costs include fares for air or ocean travel by foreign 
flag carriers, approval for indirect travel by such foreign flag 
carriers must be obtained from the Contracting Officer or the Mission 
Director before such travel is undertaken, otherwise only that portion 
of travel accomplished by United States-flag carriers will be 
reimbursable within the above limitation of allowable costs.
    (g) Limitation on travel by dependents. Travel costs and allowances 
will be allowed only for dependents of regular employees and such costs 
shall be reimbursed for travel from place of abode to assigned station 
in the Cooperating Country and return, only if dependent remains in the 
country for at least 9 months or one-half of the required tour of duty 
of the regular employee responsible for such dependent, whichever is 
greater. If the dependent is eligible for educational travel pursuant to 
the ``Differential and Allowances'' clause of this contract, time spent 
away from post resulting from educational travel will be counted as time 
at post.
    (h) Delays en route. The Contractor may grant to travelers under 
this contract reasonable delays en route while in travel status when 
such delays are caused by events beyond the control of such traveler or 
Contractor. It is understood that if delay is caused by physical 
incapacitation, personnel shall be eligible for such sick leave as 
provided under the ``Leave and Holidays'' clause of this contract.
    (i) Travel by privately owned automobile. The Contractor shall be 
reimbursed for the cost of travel performed by a regular employee in 
his/her privately owned automobile at a rate not to exceed that 
authorized in the Federal Travel Regulations plus authorized per diem 
for the employee and for each of the authorized dependents traveling in 
the automobile, if the automobile is being driven to or from the 
Cooperating Country as authorized under the contract, provided that the 
total cost of the mileage and the per diem paid to all authorized 
travelers shall not exceed the total constructive cost of fare and 
normal per diem by all authorized travelers by surface common carrier or 
authorized air fare, whichever is less.
    (j) Emergency and irregular travel and transportation. Emergency 
transportation costs and travel allowances while en route, as provided 
in this section will also be reimbursed not to exceed amounts authorized 
by the Foreign Service Travel Regulations for USAID-direct hire 
employees in like circumstances under the following conditions:
    (1) The costs of going from post of duty in the Cooperating Country 
to the employee's permanent, legal place of residence at the time he or 
she was employed for work under this contract or other location for 
Contractor employees and dependents and returning to the post of duty, 
when the Contractor's Chief of Party, with the concurrence of the 
Contracting Officer or Mission Director makes a written determination 
that such travel is necessary for one of the reasons specified in 
subparagraphs (j)(1) (i) and (ii) of this section. A copy of the written 
determination shall be furnished to the Contracting Officer.
    (i) Need for medical care beyond that available within the area to 
which the employee is assigned, or serious effect on physical or mental 
health if residence is continued at assigned post of duty, subject in 
either case, to the limitations stated in the clause of this contract 
entitled ``Personnel--Physical Fitness of Employee and Dependents.'' The 
Mission Director may authorize a medical attendant to accompany the 
employee at contract expense if, based on medical opinion, such an 
attendant is necessary.
    (ii) Death, or serious illness or injury of a member of the 
immediate family of the employee or the immediate family of the 
employee's spouse.
    (2) When, for any reason, the Mission Director determines it is 
necessary to evacuate the Contractor's entire team (employees and 
dependents) or Contractor dependents only, the Contractor will be 
reimbursed for travel and transportation expenses and travel allowance 
while en route, for the cost of the individuals going from post of duty 
in the Cooperating Country to the employee's permanent, legal place of 
residence at the time he or she was employed for work under this 
contract or other approved location. The return of such employees and 
dependents may also be authorized by the Mission Director when, in his/
her discretion, he/she determines it is prudent to do so.
    (3) The Mission Director may also authorize emergency or irregular 
travel and transportation in other situations, when in his/her opinion, 
the circumstances warrant such action. The authorization shall include 
the kind of leave to be used and appropriate restrictions as to time 
away from post, transportation of personal and/or household effects, 
etc. Requests for such emergency travel shall be submitted through the 
Contractor's Chief of Party.
    (k) Home leave travel. To the extent that home leave has been 
authorized as provided in the ``Leave and Holidays'' clause of this 
contract, the cost of travel for home leave is reimbursable for travel 
costs and travel allowances of travelers from the post of duty in the 
Cooperating Country to place of residence in the United States (or other 
location provided that the cost of such travel does not exceed the cost 
of travel to the employee's residence in the United States) and return 
to the post of duty in the Cooperating Country. Reimbursement for travel 
will be in

[[Page 76]]

accordance with the applicable cost principles and the provisions of 
this contract, and will be limited to the cost of travel by the most 
direct and expeditious route. When travel is by economy class 
accommodations, the Contractor will be reimbursed for the cost of 
transporting up to 22 pounds of accompanied personal baggage per 
traveler in addition to that regularly allowed with the economy ticket 
provided that the total number of pounds of baggage does not exceed that 
regularly allowed for first class travelers. Travel allowances for 
travelers shall not be in excess of the rates authorized in the 
Standardized Regulations as from time to time amended, for not more than 
the travel time required by scheduled commercial air carrier using the 
most expeditious route. One stopover en route for a period of not to 
exceed 24 hours is allowable when the traveler uses economy class 
accommodations for a trip of 14 hours or more of scheduled duration. 
Such stopover shall not be authorized when travel is by indirect route 
or is delayed for the convenience of the traveler. Per diem during such 
stopover shall be paid in accordance with the established practice of 
the Contractor but not to exceed the amounts stated in the Standardized 
Regulations.
    (l) Rest and recuperation travel. The Contractor shall be reimbursed 
for the cost of travel performed by regular employees and dependents for 
purposes of rest and recuperation provided that such reimbursement does 
not exceed that authorized for USAID direct hire employees, and provided 
further that no reimbursement will be made unless approval is given by 
the Contractor's Chief of party.
    (m) Transportation of motor vehicles, personal effects and household 
goods. (1) Transportation, including packing and crating costs, will be 
paid for shipping from the point of origin in the United States (or 
other location as approved by the Contracting Officer) to post of duty 
in the Cooperating Country and return to point of origin in the United 
States (or other location as approved by the Contracting Officer) of one 
privately-owned vehicle for each regular employee, personal effects of 
travelers and household goods of each regular employee not to exceed the 
limitations in effect for such shipments for USAID direct hire employees 
in accordance with the Foreign Service Travel Regulations as in effect 
when shipment is made.
    (2) If a regular employee does not complete one full year at post of 
duty (except for reasons beyond his/her control), the costs for 
transportation of vehicles, effects and goods to and from the post of 
duty are not reimbursable hereunder. If the employee serves more than 
one year but less than the required service in the Cooperating Country 
(except for reasons beyond his/her control) the costs for transportation 
of vehicles, effects and goods to the post of duty are reimbursable 
hereunder but the costs for transportation of vehicles, effects and 
goods from post of duty to the employee's permanent, legal place of 
residence at the time he or she was employed for work under this 
contract or other location as approved by the Contracting Officer are 
not reimbursable under this contract.
    (3) The cost of transporting motor vehicles and household goods 
shall not exceed the cost of packing, crating and transportation by 
surface. In the event that the carrier does not require boxing or 
crating of motor vehicles for shipment to the Cooperating Country, the 
cost of boxing or crating is not reimbursable. The transportation of a 
privately-owned motor vehicle for a regular employee may be authorized 
by the Contractor as replacement of the last such motor vehicle shipped 
under this contract for the employee when the Mission Director or his/
her designee determines in advance and so notifies the Contractor in 
writing that the replacement is necessary for reasons not due to the 
negligence or malfeasance of the regular employee. The determination 
shall be made under the same rules and regulations that apply to Mission 
employees.
    (n) Unaccompanied baggage. Unaccompanied baggage is considered to be 
those personal belongings needed by the traveler immediately upon 
arrival at destination. To permit the arrival of effects to coincide 
with the arrival of regular employees and dependents, consideration 
should be given to advance shipments of unaccompanied baggage. The 
Contractor will be reimbursed for costs of shipment of unaccompanied 
baggage (in addition to the weight allowance for household effects) not 
to exceed the limitations in effect for USAID direct hire employees in 
accordance with the Foreign Service Travel Regulations as in effect when 
shipment is made.
    This unaccompanied baggage may be shipped as air freight by the most 
direct route between authorized points of origin and destination 
regardless of the modes of travel used. This provision is applicable to 
home leave travel and to short-term employees when these are authorized 
by the terms of this contract.
    (o) Storage of household effects. The cost of storage charges 
(including packing, crating, and drayage costs) in the U.S. of household 
goods of regular employees will be permitted in lieu of transportation 
of all or any part of such goods to the Cooperating Country under 
paragraph (m) above provided that the total amount of effects shipped to 
the Cooperating Country or stored in the U.S. shall not exceed the 
amount authorized for USAID direct hire employees under the Uniform 
Foreign Service Travel Regulations.
    (p) International ocean transportation. (1) Flag eligibility 
requirements for ocean carriage are covered by the ``Source and 
Nationality Requirements'' clause of this contract.

[[Page 77]]

    (i) Transportation of things. Where U.S. flag vessels are not 
available, or their use would result in a significant delay, the 
Contractor may obtain a release from this requirement from the 
Transportation Division, Office of Acquisition and Assistance, U.S. 
Agency for International Development, Washington, DC. 20523-1419, or the 
Mission Director, as appropriate, giving the basis for the request.
    (ii) Transportation of persons. Where U.S. flag vessels are not 
available, or their use would result in a significant delay, the 
Contractor may obtain a release from this requirement from the 
Contracting Officer or the Mission Director, as appropriate.
    (2) Transportation of foreign-made vehicles. Reimbursement of the 
costs of transporting a foreign-made motor vehicle will be made in 
accordance with the provisions of the Foreign Service Travel 
Regulations.
    (3) Reduced rates on U.S. flag carriers. Reduced rates on United 
States flag carriers are in effect for shipments of household goods and 
personal effects of USAID contract personnel. These reduced rates are 
available provided the shipper states on the bill of lading that the 
cargo is ``Personal property-not for resale-payment of freight charges 
is at U.S. Government (USAID) expense and any special or diplomatic 
discounts accorded this type cargo are applicable.'' The Contractor will 
not be reimbursed for shipments of household goods or personal effects 
in an amount in excess of the reduced rates available in accordance with 
the foregoing.

                             (End of clause)

[55 FR 6803, Feb. 27, 1990, as amended at 56 FR 2699, Jan. 24, 1991; 72 
FR 19670, Apr. 19, 2007]



Sec. 752.7003  Documentation for payment.

    The following clause is required in all USAID direct contracts, 
excluding fixed price contracts:

                  Documentation for Payment (NOV 1998)

    (a) Claims for reimbursement or payment under this contract must be 
submitted to the Paying Office indicated in the schedule of this 
contract. The cognizant technical officer (CTO) is the authorized 
representative of the Government to approve vouchers under this 
contract. The Contractor must submit either paper or fax versions of the 
SF-1034--Public Voucher for Purchases and Services Other Than Personal. 
Each voucher shall be identified by the appropriate USAID contract 
number, in the amount of dollar expenditures made during the period 
covered.
    (1) The SF 1034 provides space to report by line item for products 
or services provided. The form provides for the information to be 
reported with the following elements:

                                               Total Expenditures
                                       [Document Number: XXX-X-XX-XXXX-XX]
----------------------------------------------------------------------------------------------------------------
                                                                            Amt. vouchered to    Amt. vouchered
              Line item No.                          Description                   date           this period
----------------------------------------------------------------------------------------------------------------
001.....................................  Product/Service Desc. for Line             $XXXX.XX          $ XXXX.XX
                                           Item 001.
002.....................................  Product/Service Desc. for Line              XXXX.XX            XXXX.XX
                                           Item 002.
                                                                           -------------------------------------
      Total.............................  ................................            XXXX.XX            XXXX.XX
----------------------------------------------------------------------------------------------------------------

    (2) The fiscal report shall include the following certification 
signed by an authorized representative of the Contractor:

    The undersigned hereby certifies to the best of my knowledge and 
belief that the fiscal report and any attachments have been prepared 
from the books and records of the Contractor in accordance with the 
terms of this contract and are correct: the sum claimed under this 
contract is proper and due, and all the costs of contract performance 
(except as herewith reported in writing) have been paid, or to the 
extent allowed under the applicable payment clause, will be paid 
currently by the Contractor when due in the ordinary course of business; 
the work reflected by these costs has been performed, and the quantities 
and amounts involved are consistent with the requirements of this 
Contract; all required Contracting Officer approvals have been obtained; 
and appropriate refund to USAID will be made promptly upon request in 
the event of disallowance of costs not reimbursable under the terms of 
this contract.

BY:_____________________________________________________________________

TITLE:__________________________________________________________________

DATE:___________________________________________________________________
    (b) Local currency payment. The Contractor is fully responsible for 
the proper expenditure and control of local currency, if any, provided 
under this contract. Local currency will be provided to the Contractor 
in accordance with written instructions provided by the Mission 
Director. The written instructions will also include accounting, 
vouchering, and reporting procedures. A copy of the instructions shall 
be provided to the Contractor's Chief of Party and to the

[[Page 78]]

Contracting Officer. The costs of bonding personnel responsible for 
local currency are reimbursable under this contract.
    (c) Upon compliance by the Contractor with all the provisions of 
this contract, acceptance by the Government of the work and final 
report, and a satisfactory accounting by the Contractor of all 
Government-owned property for which the Contractor had custodial 
responsiblity, the Government shall promptly pay to the Contractor any 
moneys (dollars or local currency) due under the completion voucher. The 
Government will make suitable reduction for any disallowance or 
indebtedness by the Contractor by applying the proceeds of the voucher 
first to such deductions and next to any unliquidated balance of advance 
remaining under this contract.
    (d) The Contractor agrees that all approvals of the Mission Director 
and the Contracting Officer which are required by the provisions of this 
contract shall be preserved and made available as part of the 
Contractor's records which are required to be presented and made 
available by the clause of this contract entitled ``Audit and Records--
Negotiation''.

[53 FR 6829, Mar. 3, 1988, as amended at 64 FR 5009, Feb. 2, 1999]



Sec. 752.7004  Emergency locator information.

    The following clause is to be included in all contracts requiring 
travel overseas.

                Emergency Locator Information (JUL 1997)

    The Contractor agrees to provide the following information to the 
Mission Administrative Officer on or before the arrival in the host 
country of every contract employee or dependent:
    (1) The individual's full name, home address, and telephone number.
    (2) The name and number of the contract, and whether the individual 
is an employee or dependent.
    (3) The contractor's name, home office address, and telephone 
number, including any after-hours emergency number(s), and the name of 
the contractor's home office staff member having administrative 
responsibility for the contract.
    (4) The name, address, and telephone number(s) of each individual's 
next of kin.
    (5) Any special instructions pertaining to emergency situations such 
as power of attorney designees or alternate contact persons.

[62 FR 40470, July 29, 1997; 62 FR 45334, Aug. 27, 1997]



Sec. 752.7005  Submission requirements for development experience 

documents.

    The following clause shall be included in all USAID professional/
technical contracts in which development experience documents are likely 
to be produced.

 Submission Requirements for Development Experience Documents (OCT 1997)

    (a) Contract Reports and Information/Intellectual Products. (1) The 
Contractor shall submit to the Development Experience Information 
Division of the Center for Development Information and Evaluation (PPC/
DCIE/DI) in the Bureau for Policy and Program Coordination, copies of 
reports and information products which describe, communicate or organize 
program/project development assistance activities, methods, 
technologies, management, research, results and experience as outlined 
in the Agency's ADS Chapter 540, section E540.5.2b(3). Information may 
be obtained from the Cognizant Technical Officer (CTO). These reports 
include: assessments, evaluations, studies, development experience 
documents, technical reports and annual reports. The Contractor shall 
also submit to PPC/CDIE/DI copies of information products including 
training materials, publications, databases, computer software programs, 
videos and other intellectual deliverable materials required under the 
Contract Schedule. Time-sensitive materials such as newsletters, 
brochures, bulletins or periodic reports covering periods of less than a 
year are not to be submitted.
    (2) Upon contract completion, the contractor shall submit to PPC/
CDIE/DI an index of all reports and information/intellectual products 
referenced in paragraph (a)(1) of this clause.
    (b) Submission requirements--(1) Distribution. (i) The contractor 
shall submit contract reports and information/intellectual products 
(referenced in paragraph (a)(1) of this clause) in electronic format and 
hard copy (one copy) to U.S. Agency for International Development PPC/
CDIE/DI, Attn: ACQUISITIONS, Washington D.C. 20523 at the same time 
submission is made to the CTO.
    (ii) The contractor shall submit the reports index referenced in 
paragraph (a)(2) of this clause and any reports referenced in paragraph 
(a)(1) of this clause that have not been previously submitted to PPC/
CDIE/DI, within 30 days after completion of the contract to the address 
cited in paragraph (b)(1)(i) of this clause.
    (2) Format. (i) Descriptive information is required for all 
Contractor products submitted. The title page of all reports and 
information products shall include the contract number(s), contractor 
name(s), name of

[[Page 79]]

the USAID cognizant technical office, the publication or issuance date 
of the document, document title, author name(s), and strategic objective 
or activity title and associated number. In addition, all materials 
submitted in accordance with this clause shall have attached on a 
separate cover sheet the name, organization, address, telephone number, 
fax number, and Internet address of the submitting party.
    (ii) The hard copy report shall be prepared using non-glossy paper 
(preferably recycled and white or off-white) using black ink. Elaborate 
art work, multicolor printing and expensive bindings are not to be used. 
Whenever possible, pages shall be printed on both sides.
    (iii) The electronic document submitted shall consist of only one 
electronic file which comprises the complete and final equivalent of the 
hard copy submitted.
    (iv) Acceptable software formats for electronic documents include 
WordPerfect, Microsoft Word, ASCII, and Portable Document Format (PDF). 
Submission in Portable Document format is encouraged.
    (v) The electronic document submission shall include the following 
descriptive information:
    (A) Name and version of the application software used to create the 
file, e.g., WordPerfect Version 6.1 or ASCII or PDF.
    (B) The format for any graphic and/or image file submitted, e.g., 
TIFF-compatible.
    (C) Any other necessary information, e.g. special backup or data 
compression routines, software used for storing/retrieving submitted 
data, or program installation instructions.

[64 FR 5010, Feb. 2, 1999]



Sec. 752.7006  Notices.

    The following clause shall be used in all USAID contracts.

                           Notices (APR 1984)

    Any notice given by any of the parties hereunder shall be sufficient 
only if in writing and delivered in person or sent by telegraph, cable, 
or registered or regular mail as follows:
    To USAID: Administrator, U.S. Agency for International Development, 
Washington, DC 20523-0061. Attention: Contracting Officer (the name of 
the cognizant Contracting Officer with a copy to the appropriate Mission 
Director).
    To Contractor: At Contractor's address shown on the cover page of 
this contract, or to such other address as either of such parties shall 
designate by notice given as herein required. Notices hereunder shall be 
effective when delivered in accordance with this clause or on the 
effective date of the notice, whichever is later.

[49 FR 13259, Apr. 3, 1984, as amended at 56 FR 2699, Jan. 24, 1991; 61 
FR 39095, July 26, 1996]



Sec. 752.7007  Personnel compensation.

    The following clause shall be used in all USAID cost-reimbursement 
contracts.

                    Personnel Compensation (JUL 2007)

    (a) Direct compensation of the Contractor's personnel will be in 
accordance with the Contractor's established policies, procedures, and 
practices, and the cost principles applicable to this contract.
    (b) Reimbursement of the employee's base annual salary plus overseas 
recruitment incentive, if any, which exceed the USAID Contractor Salary 
Threshold (USAID CST) stated in USAID Automated Directives System (ADS) 
Chapter 302 USAID Direct Contracting, must be approved in writing by the 
Contracting Officer, as prescribed in 731.205-6(b) or 731.371(b), as 
applicable.

[49 FR 13259, Apr. 3, 1984, as amended at 49 FR 33669, Aug. 24, 1984; 61 
FR 39095, July 26, 1996; 62 FR 40470, July 29, 1997; 72 FR 19669, Apr. 
19, 2007]



Sec. 752.7008  Use of Government facilities or personnel.

    The following clause is for use in all USAID non-commercial 
contracts.

          Use of Government Facilities or Personnel (APR 1984)

    (a) The Contractor and any employee or consultant of the Contractor 
is prohibited from using U.S. Government facilities (such as office 
space or equipment) or U.S. Government clerical or technical personnel 
in the performance of the services specified in the contract, unless the 
use of Government facilities or personnel is specifically authorized in 
the contract, or is authorized in advance, in writing, by the 
Contracting Officer.
    (b) If at any time it is determined that the Contractor, or any of 
its employees or consultants have used U.S. Government facilities or 
personnel without authorization either in the contract itself, or in 
advance, in writing, by the Contracting Officer, then the amount payable 
under the contract shall be reduced by an amount equal to the value of 
the U.S. Government facilities or personnel used by the Contractor, as 
determined by the Contracting Officer.
    (c) If the parties fail to agree on an adjustment made pursuant to 
this clause, it shall be considered a dispute, and shall be dealt

[[Page 80]]

with under the terms of the clause of this contract entitled 
``Disputes''.

[49 FR 13259, Apr. 3, 1984, as amended at 62 FR 40470, July 29, 1997]



Sec. 752.7009  Marking.

    The following clause is for use in all USAID contracts performed in 
whole or in part overseas.

                           Marking (JAN 1993)

    (a) It is USAID policy that USAID-financed commodities and shipping 
containers, and project construction sites and other project locations 
be suitably marked with the USAID emblem. Shipping containers are also 
to be marked with the last five digits of the USAID financing document 
number. As a general rule, marking is not required for raw materials 
shipped in bulk (such as coal, grain, etc.), or for semifinished 
products which are not packaged.
    (b) Specific guidance on marking requirements should be obtained 
prior to procurement of commodities to be shipped, and as early as 
possible for project construction sites and other project locations. 
This guidance will be provided through the cognizant technical office 
indicated on the cover page of this contract, or by the Mission Director 
in the Cooperating Country to which commodities are being shipped, or in 
which the project site is located.
    (c) Authority to waive marking requirements is vested with the 
Regional Assistant Administrators, and with Mission Directors.
    (d) A copy of any specific marking instructions or waivers from 
marking requirements is to be sent to the Contracting Officer; the 
original should be retained by the Contractor.

[49 FR 13259, Apr. 3, 1984, as amended at 58 FR 8703, Feb. 17, 1993]



Sec. 752.7010  Conversion of U.S. dollars to local currency.

    For use in all USAID non-commercial contracts involving performance 
overseas.

         Conversion of U.S. Dollars to Local Currency (APR 1984)

    Upon arrival in the Cooperation Country, and from time to time as 
appropriate, the Contractor's Chief of Party shall consult with the 
Mission Director who shall provide, in writing, the procedure the 
Contractor and its employees shall follow in the conversion of United 
States dollars to local currency. This may include, but is not limited 
to, the conversion of said currency through the cognizant U.S. 
Disbursing Officer or Mission Controller, as appropriate.

[49 FR 13259, Apr. 3, 1984, as amended at 62 FR 40470, July 29, 1997]



Sec. 752.7011  Orientation and language training.

    For use in all USAID cost-reimbursement contracts involving 
performance overseas.

              Orientation and Language Training (APR 1984)

    (a) Regular employees shall receive a maximum of 2 weeks USAID 
sponsored orientation before travel overseas. The dates of orientation 
shall be selected by the Contractor from the orientation schedule 
provided by USAID.
    (b) Participation in USAID sponsored orientation in no way relieves 
the Contractor of its responsibility for assuring that all employees, 
regular and short-term, are properly oriented. As an addition to or 
substitution for USAID's sponsored orientation for regular employees, 
the following types of orientation may be authorized taking into 
consideration specific job requirements, the employee's prior overseas 
experience, or unusual circumstances.
    (1) Modified orientation.
    (2) Language training, particularly when significant for operating 
capabilities.
    (3) Orientation and language training for regular employee's 
dependents.
    (4) Contractor-sponsored orientation.
    (5) Orientation in all matters related to the administrative, 
logistical, and technical aspects of the employee's movement to, and 
tour of duty in, the Cooperating Country.
    (c) Authorization for an additional or alternate orientation 
program, if any, shall be either set forth in the schedule or provided 
in writing by the Contracting Officer.
    (d) Travel expenses not to exceed one round trip from regular 
employee's residence to place of orientation and return will be 
reimbursed, pursuant to the cost principles applicable to this contract. 
Allowable salary costs during the period of orientation are also 
reimbursable.



Sec. 752.7012  Protection of the individual as a research subject.

    This clause is for use in any USAID contract which involves research 
using human subjects.

      Protection of the Individual as a Research Subject (AUG 1995)

    (a) Safeguarding the rights and welfare of human subjects in 
research conducted under a USAID contract is the responsibility of the 
contractor. USAID has adopted the Common

[[Page 81]]

Federal Policy for the Protection of Human Subjects. USAID's Policy is 
found in Part 225 of Title 22 of the Code of Federal Regulations (the 
``Policy''). Additional interpretation, procedures, and implementation 
guidance of the Policy are found in USAID General Notice entitled 
``Procedures for the Protection of Human Subjects in Research Supported 
by USAID'', issued April 19, 1995, as from time to time amended (a copy 
of which is attached to this contract). USAID's Cognizant Human Subjects 
Officer (CHSO) and USAID/W has oversight, guidance, and interpretation 
responsibility for the Policy.
    (b) Contractors must comply with the Policy when humans are the 
subject of research, as defined in 22 CFR 225.102(d), performed as part 
of the contract, and contractors must provide ``assurance'', as required 
by 22 CFR 225.103, that they follow and abide by the procedures in the 
Policy. See also Section 5 of the April 19, 1995, USAID General Notice 
which sets forth activities to which the Policy is applicable. The 
existence of a bona fide, applicable assurance approved by the 
Department of Health and Human Services (HHS) such as the ``multiple 
project assurance'' (MPA) will satisfy this requirement. Alternatively, 
contractors can provide an acceptable written assurance to USAID as 
described in 22 CFR 225.103. Such assurances must be determined by the 
CHSO to be acceptable prior to any applicable research being initiated 
or conducted under the contract. In some limited instances outside the 
U.S., alternative systems for the protection of human subjects may be 
used provided they are deemed ``at least equivalent'' to those outlined 
in Part 225 (see 22 CFR 225.101(h)). Criteria and procedures for making 
this determination are described in the General Notice cited in the 
preceding paragraph.
    (c) Since the welfare of the research subject is a matter of concern 
to USAID as well as to the contractor, USAID staff, consultants and 
advisory groups may independently review and inspect research, and 
research processes and procedures involving human subjects, and based on 
such findings, the CHSO may prohibit research which presents 
unacceptable hazards or otherwise fails to comply with USAID procedures. 
Informed consent documents must include the stipulation that the 
subject's records may be subject to such review.

[61 FR 39095, July 26, 1996]



Sec. 752.7013  Contractor-mission relationships.

    For use in all USAID contracts involving performance overseas. Note 
that paragraph (f) of this clause is applicable only in contracts with 
an educational institution.

               Contractor-Mission Relationships (OCT 1989)

    (a) The Contractor acknowledges that this contract is an important 
part of the United States Foreign Assistance Program and agrees that its 
operations and those of its employees in the Cooperating Country will be 
carried out in such a manner as to be fully commensurate with the 
responsibility which this entails.
    (b) The Mission Director is the chief representative of USAID in the 
Cooperating Country. In this capacity, he/she is responsible for both 
the total USAID program in the cooperating country including certain 
administrative responsibilities set forth in this contract, and for 
advising USAID regarding the performance of the work under the contract 
and its effect on the United States Foreign Assistance Program. Although 
the Contractor will be responsible for all professional, technical, and 
administrative details of the work called for by the contract, it shall 
be under the guidance of the Mission Director in matters relating to 
foreign policy. The Chief of Party shall keep the Mission Director 
currently informed of the progress of the work under the contract.
    (c) In the event the conduct of any Contractor employee is not in 
accordance with the preceding paragraphs, the Contractor's Chief of 
Party shall consult with the Mission Director and the employee involved 
and shall recommend to the Contractor a course of action with regard to 
such employee.
    (d) The parties recognize the right of the U.S. Ambassador to direct 
the removal from a country of any U.S. citizen or the discharge from 
this contract of any third-country national or cooperating-country 
national when, at the discretion of the Ambassador, the interests of the 
United States so require. Under these circumstances termination of an 
employee and replacement by an acceptable substitute shall be at no cost 
to USAID.
    (e) If it is determined that the services of such employee shall be 
terminated, the Contractor shall use its best efforts to cause the 
return of such employee to the United States or point of origin as 
appropriate.

[The following paragraph (f) is applicable if the contract is with an 
educational institution:]

    (f) It is understood by the parties that the Contractor's 
responsibilities shall not be restrictive of academic freedom. 
Notwithstanding these academic freedoms, the Contractor's employees, 
while in the Cooperating Country, are expected to show respect for its 
conventions, customs, and institutions, to abide by applicable laws and 
regulations, and not to interfere in its internal political affairs.

[[Page 82]]

                             (End of clause)

[54 FR 46391, Nov. 3, 1989]



Sec. 752.7014  Notice of changes in travel regulations.

    The following clause is for use in cost-reimbursement contracts 
involving work overseas.

           Notice of Changes in Travel Regulations (JAN 1990)

    (a) Changes in travel, differential, and allowance regulations shall 
be effective on the beginning of the Contractor's next pay period 
following the effective date of the change as published in the 
applicable travel regulations (the Standardized Regulations (Government 
Civilians, Foreign Areas), the Uniform State/USAID/USIA Foreign Service 
Travel Regulations, and the Federal Travel Regulations).
    (b) The Standardized Regulations (Government Civilians Foreign 
Areas), and the Federal Travel Regulations are available from the 
Superintendent of Documents, U.S. Government Printing Office, 
Washington, DC 20402.
    (c) Information regarding the Uniform State/USAID/USIA Foreign 
Service Travel Regulations as referenced in the ``Travel and 
Transportation'' clause of this contract may be obtained from the 
Contracting Officer.

                             (End of clause)

[55 FR 6805, Feb. 27, 1990]



Sec. 752.7015  Use of pouch facilities.

    For use in all USAID non-commercial contracts exceeding the 
simplified acquisition threshold and involving performance overseas.

                   Use of Pouch Facilities (JUL 1997)

    (a) Use of diplomatic pouch is controlled by the Department of 
State. The Department of State has authorized the use of pouch 
facilities for USAID contractors and their employees as a general 
policy, as detailed in paragraphs (a)(1) through (a)(7) of this clause; 
however, the final decision regarding use of pouch facilities rests with 
the Embassy or USAID Mission. In consideration of the use of pouch 
facilities as hereinafter stated, the Contractor and its employees agree 
to indemnify and hold harmless the Department of State and USAID against 
loss or damage occurring in pouch transmission.
    (1) Contractors and their employees are authorized use of the pouch 
for transmission and receipt of up to a maximum of 2 pounds per shipment 
of correspondence and documents needed in the administration of foreign 
assistance programs.
    (2) U.S. citizen employeed of U.S. contractors are authorized use of 
the pouch for personal mail up to a maximum of one pound per shipment 
(but see paragraph (a)(3) of this clause).
    (3) Merchandise, parcels, magazines, or newspapers are not 
considered to be personal mail for purposes of this clause, and are not 
authorized to be sent or received by pouch.
    (4) Official mail as authorized by paragraph (a)(1) of this clause 
should be addressed as follows: Individual or Organization name, 
followed by the symbol ``C'', city Name of Post, U.S. Agency for 
International Development, Washington, DC 20523-0001.
    (5) Personal mail pursuant to paragraph (a)(2) of this clause should 
be sent to the address specified in paragraph (a)(4) of this clause, but 
without the name of the organization.
    (6) Mail sent via the diplomatic pouch may not be in violation of 
U.S. Postal laws and may not contain material ineligible for pouch 
transmission.
    (7) USAID contractor personnel are not authorized use of military 
postal facilities (APO/FPO). This is an Adjutant General's decision 
based on existing laws and regulations governing military postal 
facilities and is being enforced worldwide. Posts having access to APO/
FPO facilities and using such for diplomatic pouch dispatch, may, 
however, accept official mail from Contractors and letter mail from 
their employees for the pouch, provided of course, adequate postage is 
affixed.
    (b) The Contractor shall be responsible for advising its employees 
of this authorization and these guidelines and limitations on use of 
pouch facilities.
    (c) Specific additional guidance on use of pouch facilities in 
accordance with this clause is available from the Post Communication 
Center at the Embassy or USAID Mission.

[49 FR 13259, Apr. 3, 1984, as amended at 56 FR 2699, Jan. 24, 1991; 57 
FR 5237, Feb. 13, 1992; 62 FR 40471, July 29, 1997; 62 FR 45334, Aug. 
27, 1997]



Sec. 752.7016--752.7017  [Reserved]



Sec. 752.7018  Health and accident coverage for USAID participant 
          trainees.

    For use in any USAID contract under which USAID participants are 
trained.

 Health and Accident Coverage for USAID Participant Trainees (JAN 1999)

    (a) In accordance with the requirements of USAID Automated Directive 
System (ADS) 253.5.6b, the Contractor shall enroll all non-U.S. trainees 
(hereinafter referred to as
      

[[Page 83]]

``participants''), whose training in the U.S. is financed by USAID under 
this contract, in USAID's Health and Accident Coverage (HAC) program. 
Sponsored trainees enrolled in third-country or in-country training 
events are not eligible for USAID's HAC program, but the Contractor may 
obtain alternative local medical and accident insurance at contract 
expense, provided the cost is consistent with the cost principles in FAR 
31.2.
    (b) When enrollment in the HAC program is required per paragraph (a) 
of this clause, the Contractor must enroll each participant in the HAC 
program through one of two designated contractors prior to the 
initiation of travel by the participant. USAID has developed an Agency-
wide database training management system, the Training Results and 
Information Network (``TraiNet''), which is the preferred system for 
managing USAID's participant training program, including enrollment in 
the HAC program. However, until such time as the USAID sponsoring unit 
(as defined in ADS 253) has given the Contractor access to USAID's 
``TraiNet'' software for trainee tracking and HAC enrollment, the 
Contractor must fill out and mail the Participant Data Form (PDF) (Form 
USAID 1381-4) to USAID. The Contractor can obtain information regarding 
each HAC program contractor, including contact information, and a supply 
of the PDF forms and instructions for completing and submitting them, by 
contacting the data base contractor serving the Global Center for Human 
Capacity Development (G/HCD).
    (c) The Contractor must ensure that HAC enrollment begins 
immediately upon the participant's departure for the United States for 
the purpose of participating in a training program financed by USAID, 
and that enrollment continues in full force and effect until the 
participant returns to his/her country of origin, or is released from 
USAID's responsibility, whichever is the sooner.
    (1) The HAC insurance provider, not the Contractor, shall be 
responsible for paying all reasonable and necessary medical 
reimbursement charges not otherwise covered by student health service or 
other insurance programs, subject to the availability of funds for such 
purposes, in accordance with the standards of coverage established by 
USAID under its HAC program and by the HAC providers' contracts.
    (2) After HAC enrollment, upon receipt of HAC services invoice from 
the selected HAC provider, the Contractor shall submit payment directly 
to the HAC provider.
    (3) The Contractor is responsible for ensuring that participants and 
any stakeholders (as defined in ADS 253) are advised that USAID is not 
responsible for any medical claims in excess of the coverages provided 
by the HAC program, or for medical claims not eligible for coverage 
under the HAC program, or not otherwise covered in this section.
    (d) The Contractor, to the extent that it is an educational 
institution with a mandatory student health service program, shall also 
enroll participants in that institution's student health service 
program. Medical costs which are covered under the institution's student 
health service shall not be eligible for payment under USAID's HAC 
program.
    (e) If the Contractor has a mandatory, non-waivable health and 
accident insurance program for students, the costs of such insurance 
will be allowable under this contract. Any claims eligible under such 
insurance will not be payable under USAID's HAC plan or under this 
contract. Even though the participant is covered by the Contractor's 
mandatory, non-waivable health and accident insurance program, the 
participant MUST be enrolled in USAID's more comprehensive HAC program.
    (f) Medical conditions pre-existing to the participant's sponsorship 
for training by USAID, discovered during the required pre-departure 
medical examination, are grounds for ineligibility for sponsorship 
unless specifically waived by the sponsoring unit, and covered through a 
separate insurance policy maintained by the participant or his employer, 
or a letter of guarantee from the participant or the employer (which 
thereby assumes liability for any related charges that might 
materialize. See ADS 253).

[64 FR 5010, Feb. 2, 1999]



Sec. 752.7019  Participant training.

    For use in any USAID direct contract involving training of USAID 
participants.

                     Participant Training (JAN 1999)

    (a) Definitions. (1) Participant training is the training of any 
foreign national outside of his or her home country, using USAID funds.
    (2) A Participant is any foreign national being trained under this 
contract outside of his or her country.
    (b) Applicable regulations. Participant training conducted under 
this contract shall comply with the policies and essential procedures 
pertaining to training-related services contained in USAID Automated 
Directive System (ADS) Ch. 253 ``Training for Development Impact''. Any 
exceptions to ADS 253 requirements are specified as such within this 
contract. The current version of Chapter 253 may be obtained directly 
from the USAID website at http://www.info.usaid.gov/pubs/ads/200.
    (c) The contractor shall be reimbursed for the reasonable and 
allocable costs incurred in providing training to participants in the 
United States or other approved location

[[Page 84]]

provided such costs do not exceed the limitations in, or have been 
waived in accordance with, ADS 253.5.5.

    Note: Academic rates are available through a special website 
monitored by the United States Information Agency. The website for 
academic programs is: http://www.iie.org/fulbright/posts/restrict. U.S.-
based participants receive the standardized U.S. travel per diem rates 
maintained by GSA for short-term training (website: http://
policyworks.gov).

[64 FR 5011, Feb. 2, 1999]



Sec. 752.7020  [Reserved]



Sec. 752.7021  Changes in tuition and fees.

    For use in contracts for participant training with an educational 
institution.

                 Changes in Tuition and Fees (APR 1984)

    While educational programs for participants will be established 
utilizing the Contractor's currently applicable tuition and fee 
schedule, the parties understand that such standard tuition and fees may 
be subject to change during the course of the program. If such event 
results in an increase in the cost of the program, USAID agrees to pay 
such increased standard tuition and fees in the next applicable academic 
term as a condition for the continuation of the program. If such change 
results in a decrease in the cost of the program, the Contractor agrees 
to charge to USAID only the amount of such revised standard tuition and 
fees in the next applicable academic term. The Contractor shall 
undertake to keep USAID currently advised as to changes in its standard 
tuition and fees. At such time as increases in the amounts of tuition 
and fees results in there being inadequate funds remaining in this 
contract to meet the costs of the next academic term, the Contractor 
will so advise USAID. USAID may then provide such additional funds as 
required to complete the program.



Sec. 752.7022  Conflicts between contract and catalog.

    For use in contracts for participant training with an educational 
institution.

            Conflicts Between Contract and Catalog (APR 1984)

    In the event of any inconsistency between the provisions of this 
contract and any catalog, or other document incorporated in this 
contract by reference or otherwise or any of the Contractor's rules and 
regulations, the provisions of this contract shall govern.



Sec. 752.7023  Required visa form for USAID participants.

    For use in any USAID direct contract which involves training of 
USAID participants.

          Required Visa Form for USAID Participants (APR 1984)

    The Contractor shall insure that any foreign student brought to the 
United States for training under this contract uses visa form IAP 66A 
``Certificate for Exchange Visitor (J-1) Status''.



Sec. 752.7024  Withdrawal of students.

    For use in contracts for participant training with an educational 
institution.

                    Withdrawal of Students (APR 1984)

    (a) The Government may, at its option and at any time, withdraw any 
student.
    (b) The Contractor may request withdrawal by the Government of any 
student for academic or disciplinary reasons.
    (c) If such withdrawal occurs prior to the end of a term, the 
Government shall pay any tuition and fees due for the current term in 
which the student may be enrolled, and the Contractor shall credit the 
Government with any charges eligible for refund under the Contractor's 
standard procedures for civilian students in effect on the effective 
date of such withdrawal.
    (d) Withdrawal of students by the Government shall not be the basis 
for any special charge or claim by the Contractor other than as provided 
by the Contractor's standard procedures.



Sec. 752.7025  Approvals.

    For use in all USAID contracts.

                          Approvals (APR 1984)

    All approvals required to be given under the contract by the 
Contracting Officer or the Mission Director shall be in writing and, 
except when extraordinary circumstances make it impracticable, shall be 
requested by the Contractor sufficiently in advance of the contemplated 
action to permit approval, disapproval or other disposition prior to 
that action. If, because of existing conditions, it is impossible to 
obtain prior written approval, the approving official may, at his 
discretion, ratify the action after the fact.



Sec. 752.7026  [Reserved]



Sec. 752.7027  Personnel.

    For use in all USAID services contracts involving performance 
overseas. Note that paragraphs (f) and (g) of this

[[Page 85]]

clause are for use only in cost reimbursement contracts.

                          Personnel (DEC 1990)

    (a) Clearance.
    (1) Individuals Engaged or Assigned Within the United States. The 
contractor will obtain written notification from the Contracting Officer 
of Cooperating Country clearance of any employee sent outside the United 
States to perform duties under this contract.
    (2) Individuals Engaged or Assigned When Outside the United States. 
No individual shall be engaged or assigned when outside the United 
States to perform work outside the United States under this contract 
unless authorized in the schedule or otherwise approved by the 
Contracting Officer or Mission Director. However, when services are 
performed in the Cooperating Country on a casual or irregular basis or 
in an emergency, exception to this provision can be made in accordance 
with instructions or regulations established by the Mission Director.
    (b) Physical fitness of employees and dependents. See the clause of 
this contract entitled Physical Fitness.
    (c) Conformity to laws and regulations of Cooperating Country. 
Contractor agrees to use its best efforts to assure that its employees 
and their dependents, while in the Cooperating Country, abide by all 
applicable laws and regulations of the Cooperating Country and political 
subdivisions thereof.
    (d) Importation or sale of personal property or automobiles. To the 
extent permitted by Cooperating Country laws, the importation and sale 
of personal property or automobiles by contractor employees and their 
dependents in the Cooperating Country shall be subject to the same 
limitations and prohibitions which apply to U.S. nationals employed by 
the Mission. This provision does not apply to employees or consultants 
who are citizens or legal residents of the Cooperating Country.
    (e) Economic and Financial Activities. Other than work to be 
performed under this contract for which an employee or consultant is 
assigned by the contractor, no such employee or consultant of the 
contractor shall engage, directly or indirectly, either in his/her own 
name or in the name or through the agency of another person, in any 
business, profession or occupation in the Cooperating Country or other 
foreign countries to which he/she is assigned, nor shall he make loans 
or investments to or in any business, profession or occupation in the 
Cooperating Country or other foreign countries in which he/she is 
assigned. This provision does not apply to employees or consultants who 
are citizens or legal residents of the Cooperating Country.

    [The following paragraphs (f) and (g) are applicable only to cost 
reimbursement contracts.]

    (f) Duration of Appointments. (1) Regular employees will normally be 
appointed for a minimum of 2 years which period includes orientation 
(less language training) in the United States and authorized 
international travel under the contract except:
    (i) An appointment may be made for less than 2 years if the contract 
has less than 2 years but more than 1 year to run provided that if the 
contract is extended the appointment shall also be extended to the full 
2 years. This provision shall be reflected in the employment agreement 
prior to employment under this contract.
    (ii) When a 2-year appointment is not required, appointment may be 
made for less than 2 years but in no event less than 1 year.
    (iii) When the normal tour of duty established for USAID personnel 
at a particular post is less than 2 years, then a normal appointment 
under this contract may be of the same duration.
    (iv) When the contractor is unable to make appointments of regular 
employees for a full 2 years, the contractor may make appointments of 
less than 2 but not less than 1 year, provided that such appointment is 
approved by the Contracting Officer.
    (2) Services required for less than 1 year will be considered short-
term appointments and the employee will be considered a short-term 
employee.
    (g) Employment of Dependents. If any person who is employed for 
services in the Cooperating Country under this contract is either (1) a 
dependent of an employee of the U.S. Government working in the 
Cooperating Country, or (2) a dependent of a contractor employee working 
under a contract with the U.S. Government in the Cooperating Country, 
such person shall continue to hold the status of a dependent. He or she 
shall be entitled to salary for the time services are actually performed 
in the Cooperating Country, and differential and allowances as 
established by the Standardized Regulations (Government Civilians, 
Foreign Areas).

                             (End of clause)

[56 FR 7587, Feb. 25, 1991, as amended at 62 FR 40471, July 29, 1997]



Sec. 752.7028  Differential and allowances.

    The following clause is for use in all USAID cost reimbursement 
contracts performed in whole or in part overseas.

                 Differentials and Allowances (JUL 1996)

    (This clause does not apply to TCN or CCN employees. TCN and CCN 
employees are not eligible for differentials and allowances, unless 
specifically authorized by the cognizant Assistant Administrator or 
Mission Director.

[[Page 86]]

A copy of such authorization shall be retained and made available as 
part of the contractor's records which are required to be preserved and 
made available by the ``Examination of Records by the Comptroller 
General'' and ``Audit'' clauses of this contract).

    (a) Post differential. Post differential is an additional 
compensation for service at places in foreign areas where conditions of 
environment differ substantially from conditions of environment in the 
continental United States and warrant additional compensation as a 
recruitment and retention incentive. In areas where post differential is 
paid to USAID direct-hire employees, post differential not to exceed the 
percentage of salary as is provided such USAID employees in accordance 
with the Standardized Regulations (Government Civilians, Foreign Areas), 
Chapter 500 (except the limitation contained in Section 552, ``Ceiling 
on Payment'') Tables-Chapter 900, as from time to time amended, will be 
reimbursable hereunder for employees in respect to amounts earned during 
the time such employees actually spend overseas on work under this 
contract. When such post differential is provided to regular employees 
of the Contractor, it shall be payable beginning on the date of arrival 
at the post of assignment and continue, including periods away from post 
on official business, until the close of business on the day of 
departure from post of assignment en route to the United States. Sick or 
vacation leave taken at or away from the post of assignment will not 
interrupt the continuity of the assignment or require a discontinuance 
of such post differential payments, provided such leave is not taken 
within the United States or the territories of the United States. Post 
differential will not be payable while the employee is away from his/her 
post of assignment for purposes of home leave. Short-term employees 
shall be entitled to post differential beginning with the forty-third 
(43rd) day at post.
    (b) Living quarters allowance. Living quarters allowance is an 
allowance granted to reimburse an employee for substantially all of his/
her cost for either temporary or residence quarters whenever Government-
owned or Government-rented quarters are not provided to him/her at his/
her post without charge. Such costs are those incurred for temporary 
lodging (temporary lodging allowance) or one unit of residence quarters 
(living quarters allowance) and include rent, plus any costs not 
included therein for heat, light, fuel, gas, electricity and water. The 
temporary lodging allowance and the living quarters allowance are never 
both payable to an employee for the same period of time. The Contractor 
will be reimbursed for payments made to employees for a living quarters 
allowance for rent and utilities if such facilities are not supplied. 
Such allowance shall not exceed the amount paid USAID employees of 
equivalent rank in the Cooperating Country, in accordance with either 
the Standardized Regulations (Government Civilians, Foreign Areas), 
Chapter 130, as from time to time amended, or other rates approved by 
the Mission Director. Subject to the written approval of the Mission 
Director, short-term employees may be paid per diem (in lieu of living 
quarters allowance) at rates prescribed by the Federal Travel 
Regulations, as from time to time amended, during the time such short-
term employees spend at posts of duty in the Cooperating Country under 
this contract. In authorizing such per diem rates, the Mission Director 
shall consider the particular circumstances involved with respect to 
each such short-term employee including the extent to which meals and/or 
lodging may be made available without charge or at nominal cost by an 
agency of the United States Government or of the Cooperating Government, 
and similar factors.
    (c) Temporary quarters subsistence allowance. Temporary quarters 
subsistence allowance is a quarters allowance granted to an employee for 
the reasonable cost of temporary quarters incurred by the employee and 
his family for a period not in excess of (i) 90 days after first arrival 
at a new post in a foreign area or a period ending with the occupation 
of residence (permanent) quarters, if earlier, and (ii) 30 days 
immediately preceding final departure from the post subsequent to the 
necessary vacating of residence quarters, unless an extension is 
authorized in writing by the Mission Director. The Contractor will be 
reimbursed for payments made to employees and authorized dependents for 
temporary quarters subsistence allowance, in lieu of living quarters 
allowance, not to exceed the amount set forth in the Standardized 
Regulations (Government Civilians, Foreign Areas), Chapter 120, as from 
time to time amended.
    (d) Post allowance. Post allowance is a cost-of-living allowance 
granted to an employee officially stationed at a post where the cost of 
living, exclusive of quarters cost, is substantially higher than in 
Washington, DC. The Contractor will be reimbursed for payments made to 
employees for post allowance not to exceed those paid USAID employees in 
the Cooperating Country, in accordance with the Standardized Regulations 
(Government Civilians, Foreign Areas), Chapter 220, as from time to time 
amended.
    (e) Supplemental post allowance. Supplemental post allownce is a 
form of post allowance granted to an employee at his/her post when it is 
determined that assistance is necessary to defray extraordinary 
subsistence costs. The Contractor will be reimbursed for payments made 
to employees for supplemental post allowance not to exceed the

[[Page 87]]

amount set forth in the Standardized Regulations (Government Civilians, 
Foreign Areas), Chapter 230, as from time to time amended.
    (f) Educational allowance. Educational allowance is an allowance to 
assist an employee in meeting the extraordinary and necessary expenses, 
not otherwise compensated for, incurred by reason of his/her service in 
a foreign area in providing adequate elementary and secondary education 
for his/her children. The Contractor will be reimbursed for payments 
made to regular employees for educational allowances for their dependent 
children in amounts not to exceed those set forth in the Standardized 
(Regulations Government Civilians, Foreign Areas), Chapter 270, as from 
time to time amended.
    (g) Educational travel. Educational travel is travel to and from a 
school in the United States for secondary education (in lieu of an 
educational allowance) and for college education. The Contractor will be 
reimbursed for payments made to regular employees for educational travel 
for their dependent children provided such payment does not exceed that 
which would be payable in accordance with the Standardized Regulations 
(Government Civilians, Foreign Areas), Chapter 280, as from time to time 
amended. Educational travel shall not be authorized for regular 
employees whose assignment is less than two years.
    (h) Separate maintenance allowance. Separate maintenance allowance 
is an allowance to assist an employee who is compelled, by reason of 
dangerous, notably unhealthful, or excessively adverse living conditions 
at his/her post of assignment in a foreign area, or for the convenience 
of the Government, to meet the additional expense of maintaining his/her 
dependents elsewhere than at such post. The Contractor will be 
reimbursed for payments made to regular employees for a separate 
maintenance allowance not to exceed that made to Aid employees in 
accordance with the Standardized Regulations (Government Civilians, 
Foreign Areas), Chapter 260, as from time to time amended.
    (i) Payments during evacuation. The Standardized Regulations 
(Government Civilians, Foreign Areas) provide the authority for 
efficient, orderly, and equitable procedure for the payment of 
compensation, post differential and allowances in the event of an 
emergency evacuation of employees or their dependents, or both, from 
duty stations for military or other reasons or because of imminent 
danger to their lives. If evacuation has been authorized by the Mission 
Director the Contractor will be reimbursed for payments made to 
employees and authorized dependents evacuated from their post of 
assignment in accordance with the Standardized Regulations (Government 
Civilians, Foreign Areas), Chapter 600, and the Federal Travel 
Regulations, as from time to time amended.
    (j) Danger pay allowance. (1) The contractor will be reimbursed for 
payments made to its employees for danger pay not to exceed that paid 
USAID employees in the cooperating country, in accordance with the 
Standardized Regulations (Government Civilians, Foreign Areas), Chapter 
650, as from time to time amended.
    (2) Danger pay is an allowance that provides additional compensation 
above basic compensation to an employee in a foreign area where civil 
insurrection, civil war, terrorism or wartime conditions threaten 
physical harm or imminent danger to the health or well-being of the 
employee. The danger pay allowance is in lieu of that part of the post 
differential which is attributable to political violence. Consequently, 
the post differential may be reduced while danger pay is in effect to 
avoid dual crediting for political violence.

[49 FR 13259, Apr. 3, 1984, as amended at 51 FR 11450, Apr. 3, 1986; 53 
FR 50632, Dec. 16, 1988; 61 FR 39096, July 26, 1996; 61 FR 51235, Oct. 
1, 1996]



Sec. 752.7029  Post privileges.

    For use in all USAID non-commercial contracts involving performance 
overseas.

                       Post Privileges (JUL 1993)

    (a) Routine health room services may be available, subject to post 
policy, to U.S. citizen contractors and their authorized dependents 
(regardless of citizenship) at the post of duty. These services do not 
include hospitalization, or predeparture or end of tour medical 
examinations. The services normally include such medications as may be 
available, immunizations and preventive health measures, diagnostic 
examinations and advice, and home visits as medically indicated. 
Emergency medical treatment is provided to U.S. citizen employees and 
dependents, whether or not they may have been granted access to routine 
health room services, on the same basis as it would be to any U.S. 
citizen in an emergency medical situation in the country.
    (b) Privileges such as the use of APO, PX's, commissaries, and 
officer's clubs are established at posts abroad pursuant to agreements 
between the U.S. and Cooperating Governments. These facilities are 
intended for and usually limited to members of the official U.S. 
establishment including the Embassy, USAID Mission, U.S. Information 
Service, and the Military. Normally, the

[[Page 88]]

agreements do not permit these facilities to be made available to 
nonofficial Americans.

[49 FR 13259, Apr. 3, 1984, as amended at 56 FR 7587, Feb. 25, 1991; 58 
FR 58596, Nov. 2, 1993; 62 FR 40471, July 29, 1997]



Sec. 752.7030  Inspection trips by contractor's officers and executives.

    For use in cost reimbursement contracts with an educational 
institution involving performance overseas.

   Inspection Trips by Contractor's Officers and Executives (APR 1984)

    Provided it is approved by the Mission Director, the Contractor may 
send the Campus Coordinator, a professional member of its staff as an 
alternate to the Campus Coordinator, or such of its senior officials 
(e.g., president, vice presidents, deans, or department heads) to the 
Cooperating Country as may be required to review the progress of the 
work under this contract. Except for the Campus Coordinator or his/her 
alternate, no direct salary charges will be paid hereunder with respect 
to any such officials.



Sec. 752.7031  Leave and holidays.

    For use in all USAID cost-reimbursement contracts for technical or 
professional services.

                      Leave and Holidays (OCT 1989)

    (a) Vacation leave. (1) The Contractor may grant to its employees 
working under this contract vacations of reasonable duration in 
accordance with the Contractor's practice for its employees, but in no 
event shall such vacation leave be earned at a rate exceeding 26 work 
days per annum. Reimbursement for vacation leave is limited to the 
amount earned by employees while serving under this contract.
    For regular employees during their tour of duty in the Cooperating 
Country, vacation leave is provided under this contract primarily for 
purposes of affording necessary rest and recreation. The Contractor's 
Chief of Party, the employee and the Cooperating Country institution 
associated with this project shall develop vacation leave schedules 
early in the employee's tour of duty taking into consideration project 
requirements, employee preference and other factors.
    (2) Leave taken during the concluding weeks of an employee's tour 
shall be included in the established leave schedule and be limited to 
that amount of leave which can be earned during a twelve-month period 
unless approved in accordance with paragraph (a)(3) of this clause.
    (3) Vacation leave earned but not taken by the end of the employee's 
tour pursuant to paragraphs (a) (1) and (2) of this clause will be 
forfeited unless the requirements of the project precluded the employee 
from taking such leave, and the Contracting Officer (with the 
endorsement of the Mission) approves one of the following as an 
alternative:
    (i) Taking, during the concluding weeks of the employee's tour, 
leave not permitted under (a)(2) of this section, or
    (ii) Lump-sum payment for leave not taken provided such leave does 
not exceed the number of days which can be earned by the employee during 
a twelve-month period.
    (b) Sick Leave. Sick leave is earned by employees in accordance with 
the Contractor's usual practice but not to exceed 13 work days per annum 
or 4 hours every 2 weeks. Additional sick leave after use of accrued 
vacation leave may be advanced in accordance with Contractor's usual 
practice, if in the judgment of the Contractor's Chief of Party it is 
determined that such additional leave is in the best interest of the 
project. In no event shall such additional leave exceed 30 days. The 
Contractor agrees to reimburse USAID for leave used in excess of the 
amount earned during the employee's assignment under this contract. Sick 
leave earned and unused at the end of a regular tour of duty may be 
carried over to an immediately-succeeding tour of duty under this 
contract. The use of home leave authorized under this clause shall not 
constitute a break in service for the purpose of sick leave carry-over. 
Contractor employees will not be compensated for unused sick leave at 
the completion of their duties under this contract.
    (c) Home leave. (1) Home leave is leave earned for service abroad 
for use only in the United States, in the Commonwealth of Puerto Rico, 
or in the possessions of the United States.
    (2) A regular employee who is a U.S. citizen or resident and has 
served at least 2 years overseas, as defined in paragraph (c)(4) of this 
clause, under this contract and has not taken more than 30 workdays 
leave (vacation, sick, or leave without pay) in the United States, may 
be granted home leave of not more than 15 workdays for each such year of 
service overseas, provided that such regular employee agrees to return 
overseas upon completion of home leave under an additional 2 year 
appointment, or for a shorter period of not less than 1 year of overseas 
service under the contract if the Mission Director has approved in 
advance. Home leave must be taken in the United States, the Commonwealth 
of Puerto Rico, or the possessions of the United States; any days spent 
elsewhere will be charged to vacation leave or leave without pay.
    (3) Notwithstanding the requirement in paragraph (c)(2), of this 
clause, that the Contractor's regular employee must have served 2 years 
overseas under this contract to be eligible for home leave, Contractor 
may grant

[[Page 89]]

advance home leave to such regular employee subject to all of the 
following conditions:
    (i) Granting of advance home leave would in each case serve to 
advance the attainment of the objectives of this contract;
    (ii) The regular employee shall have served a minimum of 18 months 
in the Cooperating Country on his/her current tour of duty under this 
contract; and
    (iii) The regular employee shall have agreed to return to the 
Cooperating Country to serve out the remainder of his/her current tour 
of duty and an additional 2 year appointment under this contract, or 
such other additional appointment of not less than 1 year of overseas 
service as the Mission Director may approve.
    (4) The period of service overseas required under paragraph (c)(2) 
or paragraph (c)(3) of this clause shall include the actual days spent 
in orientation in the United States (less language training) and the 
actual days overseas beginning on the date of departure from the United 
States port of embarkation on international travel and continuing, 
inclusive of authorized delays en route, to the date of arrival at the 
United States port of debarkation from international travel. Allowable 
vacation and sick leave taken while overseas, but not leave without pay, 
shall be included in the required period of service overseas. An amount 
equal to the number of days vacation and sick leave taken in the United 
States, the Commonwealth of Puerto Rico, or the possessions of the 
United States will be added to the required period of service overseas.
    (5) Salary during travel to and from the United States for home 
leave will be limited to the time required for travel by the most 
expeditious air route. The Contractor will be responsible for 
reimbursing USAID for salary payments made during home leave if in spite 
of the undertaking of the new appointment the regular employee, except 
for reasons beyond his/her control as determined by the Contracting 
Officer, does not return overseas and complete the additional required 
service. Unused home leave is not reimbursable under this contract.
    (6) To the extent deemed necessary by the Contractor, regular 
employees in the United States on home leave may be authorized to spend 
not more than 5 days in work status for consultation at home office/
campus or at USAID/Washington before returning to their post of duty. 
Consultation at locations other than USAID/Washington or home office/
campus, as well as any time in excess of 5 days spent for consultation, 
must be approved by the Mission Director or the Contracting Officer.
    (7) Except as provided in the schedule or approved by the Mission 
Director or the Contracting Officer, home leave is not authorized for 
TCN or CCN employees.
    (d) Holidays. Holidays for Contractor employees serving in the 
United States shall be in accordance with the Contractor's established 
policy and practice. Holidays for Contractor employees serving overseas 
should take into consideration local practices and shall be established 
in collaboration with the Mission Director.
    (e) Military leave. Military leave of not more than 15 calendar days 
in any calendar year may be granted in accordance with the Contractor's 
usual practice to each regular employee whose appointment is not limited 
to 1 year or less and who is a reservist of the United States Armed 
Forces, provided that such military leave has been approved in advance 
by the cognizant Mission Director or Assistant Administrator. A copy of 
any such approval shall be provided to the Contracting Officer.
    (f) Leave Records. The Contractor's leave records shall be preserved 
and made available as part of the contractor's records which are 
required to be preserved and made available by the Examination of 
Records by the Comptroller General and Audit clauses of this contract.

                             (End of clause)

[54 FR 46392, Nov. 3, 1989, as amended at 56 FR 2699, Jan. 24, 1991]



Sec. 752.7032  International travel approval and notification 

requirements.

    For use in any USAID contract requiring international travel.

 International Travel Approval and Notification Requirements (JAN 1990)

    Prior written approval by the Contracting Officer is required for 
all interrnational travel directly and identifiably funded by USAID 
under this contract. The Contractor shall therefore present to the 
Contracting Officer an itinerary for each planned international trip, 
showing the name of the traveler, purpose of the trip, origin/
destination (and intervening stops), and dates of travel, as far in 
advanced of the proposed travel as possible, but in no event less than 
three weeks before travel is planned to commence. The Contracting 
Officer's prior written approval may be in the form of a letter or 
telegram or similar device or may be specifically incorporated into the 
schedule of the contract. At least one week prior to commencement of 
approved international travel, the Contractor shall notify the cognizant 
Mission, with a copy to the Contracting Officer, of planned travel, 
identifying the travellers and the dates and times of arrival.

[[Page 90]]

                             (End of clause)

[55 FR 6805, Feb. 27, 1990]



Sec. 752.7033  Physical fitness.

    For use in all USAID contracts involving performance overseas.

                       Physical Fitness (JUL 1997)

    (The requirements of this provision do not apply to employees hired 
in the Cooperating Country or to authorized dependents who were already 
in the Cooperating Country when their sponsoring employee was hired.)
    (a) Assignments of less than 60 days in the Cooperating Country. The 
contractor shall require employees being assigned to the Cooperating 
Country for less than 60 days to be examined by a licensed doctor of 
medicine. The contractor shall require the doctor to provide to the 
contractor a written statement that in his/her medical opinion the 
employee is physically qualified to engage in the type of activity for 
which he/she is employed and the employee is physically able to reside 
in the country to which he/she is assigned. Under a cost reimbursement 
contract, if the contractor has no written statement of medical opinion 
on file prior to the departure for the Cooperating Country of any 
employee and such employee is unable to perform the type of activity for 
which he/she is employed or cannot complete his/her tour of duty because 
of any physical disability (other than physical disability arising from 
an accident while employed under this contract), the contractor shall be 
responsible for returning the disabled employee to his/her point of hire 
and providing a replacement at no additional cost to the Government. In 
addition, in the case of a cost reimbursement contract, the contractor 
shall not be entitled to reimbursement for any additional costs 
attributable to delays or other circumstances caused by the employee's 
inability to complete his/her tour of duty.
    (b) Assignments of 60 days or more in the Cooperating Country. (1) 
The Contracting Officer shall provide the contractor with a reproducible 
copy of the ``USAID Contractor Employee Physical Examination Form''. 
This form is for collection of information; it has been reviewed and 
approved by OMB (see 701.105(a)). Information required by the Paperwork 
Reduction Act for reporting the burden estimate, the points of contact 
regarding burden estimate, and the OMB approval expiration date, are 
printed on the form. The contractor shall reproduce the form as 
required, and provide a copy to each employee and authorized dependent 
proposed for assignments of 60 days or more in the Cooperating Country. 
The contractor shall have the employee and all authorized dependents 
obtain a physical examination from a licensed physician, who will 
complete the form for each individual. The employee will deliver the 
physical examination form(s) to the embassy health unit in the 
Cooperating Country.
    (2) (The following information is provided for two purposes: To 
assist fixed price offerors to develop their price proposal, and to 
provide cost reimbursement contractors with guidance in determining 
reasonable and allowable costs.) As a contribution to the cost of 
medical examinations, USAID shall reimburse the contractor for the 
physical examination authorized in paragraph (a) of this section in an 
amount not to exceed $100 for the physical examination, plus 
reimbursement of charges for immunizations to the extent not covered by 
the contractor's health insurance policy. For physical examinations 
authorized in paragraph (b)(1) above, the USAID contribution to the cost 
of the examination shall be as follows:
    (i) For the employee and authorized dependents 12 years of age and 
over, one half of the cost of each examination up to a maximum USAID 
share of $300 per individual, plus reimbursement of charges for 
immunizations to the extent not covered by the contractor's health 
insurance policy.
    (ii) For authorized dependents under 12 years of age, one half of 
the cost of each examination up to a maximum USAID share of $120 per 
individual, plus reimbursement of charges for immunizations to the 
extent not covered by the contractor's health insurance policy.
    (iii) The contractor must obtain the prior written approval of the 
Contracting Officer to receive any USAID contributions higher than these 
limits.

                             (End of clause)

[56 FR 7588, Feb. 25, 1991, as amended at 58 FR 58596, Nov. 2, 1993; 62 
FR 40471, July 29, 1997; 62 FR 45334, Aug. 27, 1997]



Sec. 752.7034  Acknowledgement and disclaimer.

    For use in any USAID contract which funds or partially funds 
publications, videos, or other information/media products.

                Acknowledgement and Disclaimer (DEC 1991)

    (a) USAID shall be prominently acknowledged in all publications, 
videos or other information/media products funded or partially funded 
through this contract, and the product shall state that the views 
expressed by the author(s) do not necessarily reflect those of USAID. 
Acknowledgements should identify the sponsoring USAID Office and

[[Page 91]]

Bureau or Mission as well as the U.S. Agency for International 
Development substantially as follows:
    ``This (publication, video or other information/media product 
(specify)) was made possible through support provided by the Office of 
------, Bureau for ------, U.S. Agency for International Development, 
under the terms of Contract No. ------. The opinions expressed herein 
are those of the author(s) and do not necessarily reflect the views of 
the U.S. Agency for International Development.''
    (b) Unless the contractor is instructed otherwise by the cognizant 
technical office, publications, videos or other information/media 
products funded under this contract and intended for general readership 
or other general use will be marked with the USAID logo and/or U.S. 
AGENCY FOR INTERNATIONAL DEVELOPMENT appearing either at the top or at 
the bottom of the front cover or, if more suitable, on the first inside 
title page for printed products, and in equivalent/appropriate location 
in videos or other information/media products. Logos and markings of co-
sponsors or authorizing institutions should be similarly located and of 
similar size and appearance.

                             (End of clause)

[57 FR 5237, Feb. 13, 1992]



Sec. 752.7035  Public notices.

    The following clause is for use when the cognizant technical office 
determines that the contract is of public interest, and that both the 
public and the Government would benefit from public notices concerning 
the contract, and requests that the Contracting Officer include the 
clause in the contract.

                        Public Notices (DEC 1991)

    It is USAID's policy to inform the public as fully as possible of 
its programs and activities. The contractor is encouraged to give public 
notice of the receipt of this contract and, from time to time, to 
announce progress and accomplishments. Press releases or other public 
notices should include a statement substantially as follows: ``The U.S. 
Agency for International Development administers the U.S. foreign 
assistance program providing economic and humanitarian assistance in 
more than 80 countries worldwide.'' The contractor may call on USAID's 
Legislative and Public Affairs (LPA) for advice regarding public 
Notices. The contractor is requested to provide copies of notices or 
announcements to the cognizant technical officer and to USAID's 
Legislative and Public Affairs (LPA) as far in advance of release as 
possible.

                             (End of clause)

[57 FR 5237, Feb. 13, 1992, as amended at 60 FR 11913, Mar. 3, 1995]

Subpart 752.3-70--USAID Clause Matrices [Reserved]

                             PART 753_FORMS

                          Subpart 753.1_General

Sec.

Sec. 753.107 Obtaining forms.

                   Subpart 753.2_Prescription of Forms


Sec. 753.270 Prescription of USAID Forms.

                   Subpart 753.3_Illustration of Forms


Sec. 753.300 Scope of subpart.

    Authority: Sec. 621, Pub. L. 87-195, 75 Stat. 445 (22 U.S.C. 2381), 
as amended; E.O. 12163, Sept. 29, 1979 44 FR 56673, 3 CFR, 1979 Comp., 
p. 435.

    Source: 53 FR 50632, Dec. 16, 1988, unless otherwise noted.

                          Subpart 753.1_General



Sec. 753.107  Obtaining forms.

    Copies of any USAID Form referenced in the AIDAIR may be obtained 
from the U.S. Agency for International Development, Washington, DC 
20523-0001, Attention: M/AS/ISS, Distribution, Room B-929 N.S., or from 
the congnizant Contracting Officer.

[53 FR 50632, Dec. 16, 1988, as amended at 56 FR 2699, Jan. 24, 1991; 56 
FR 67226, Dec. 30, 1991; 59 FR 33447, June 29, 1994; 62 FR 40471, July 
29, 1997]

                   Subpart 753.2_Prescription of Forms



Sec. 753.270  Prescription of USAID forms.

    The requirements for use of USAID forms are contained in parts 701 
through 752 where the subject matter applicable to the form is 
addressed.

                   Subpart 753.3_Illustration of Forms



Sec. 753.300  Scope of subpart.

    USAID forms are not illustrated in the AIDAR. Copies of any USAID 
form

[[Page 92]]

prescribed in the AIDAR may be obtained as provided in 753.107.

                 Appendixes A-C to Chapter 7 [Reserved]

Appendix D to Chapter 7--Direct USAID Contracts With a U.S. Citizen or a 
            U.S. Resident Alien for Personal Services Abroad

    1. General. (a) Purpose. This appendix sets forth the authority, 
policy, and procedures under which USAID contracts with a U.S. citizen 
or U.S. resident alien for personal services abroad.
    (b) Definitions. (1) Personal services contract (PSC) means a 
contract that, by its express terms or as administered, make the 
contractor personnel appear, in effect, Government employees (see FAR 
37.104).
    (2) Employer-employee relationship means an employment relationship 
under a service contract with an individual which occurs when, as a 
result of the contract's terms or the manner of its administration 
during performance, the contractor is subject to the relatively 
continuous supervision and control of a Government officer or employee.
    (3) Non-person services contract means a contract under which the 
personnel rendering the services are not subject either by the 
contract's terms or by the manner of its administration, to the 
supervision and control usually prevailing in relationships between the 
Government and its employees.
    (4) Independent contractor relationship means a contract 
relationship in which the contractor is not subject to the supervision 
and control prevailing in relationships between the Government and its 
employees. Under this relationship, the Government does not normally 
supervise the performance of the work, control the days of the week or 
hours of the day in which it is to be performed, or the location of 
performance.
    (5) Resident hire means a U.S. citizen who, at the time of hire as a 
PSC, resides in the cooperating country as a spouse or dependent of a 
U.S. citizen employed by a U.S. government agency or under any U.S. 
government-financed contract or agreement, or for reasons other than for 
employment with a U.S. government agency or under any U.S. government-
financed contract or agreement. A U.S. citizen for purposes of this 
definition also includes persons who at the time of contracting are 
lawfully admitted permanent residents of the United States.
    (6) U.S. resident alien means a non-U.S. citizen lawfully admitted 
for permanent residence in the United States.
    (7) Abroad means outside the United States and its territories and 
possessions.
    (8) USAID direct-hire employees means civilian employees appointed 
under USAID Handbook 25 procedures or superseding Automated Directive 
System (ADS) Chapters.

    2. Legal Basis. (a) Section 635(b) of the Foreign Assistance Act of 
1961, as amended (hereinafter referred to as the ``FAA'') provides the 
Agency's contracting authority.
    (b) Section 636(a)(3) of the FAA (22 U.S.C. 2396(a)(3)) authorizes 
the Agency to enter into personal services contracts with individuals 
for personal services abroad and provides further that such individuals 
``* * * shall not be regarded as employees of the U.S. Government for 
the purpose of any law administered by the Civil Service Commission.'' 
\1\
---------------------------------------------------------------------------

    \1\ The Civil Service Commission is now the Federal Office of 
Personnel Management.

    3. Applicability. (a) This appendix applies to all personal services 
contracts with U.S. citizens or U.S. resident aliens to provide 
assistance abroad under Section 636(a)(3) of the FAA.
    (b) This appendix does not apply to:
    (1) Nonpersonal services contracts with U.S. citizens or U.S. 
resident aliens; such contracts are covered by the basic text of the FAR 
(48 CFR Chapter 1) and the AIDAR (48 CFR Chapter 7).
    (2) Personal services contracts with individual Cooperating Country 
Nationals (CCNs) or Third Country Nationals (TCNs). Such contracts are 
covered by Appendix J of this chapter.
    (3) Other personal services arrangements covered by USAID Handbook 
25--Employment and Promotion or superseding ADS Chapters.
    (4) Interagency agreements (e.g., PASAs and RSSAs covered by ADS 
306--Interagency Agreements.

    4. Policy. (a) General. USAID may finance, with either program or 
operating expense (OE) funds, the cost of personal services contracts as 
part of the Agency's program of foreign assistance by entering into a 
direct contract with an individual U.S. citizen or U.S. resident alien 
for personal services abroad.
    (1) Program funds. Under the authority of Section 635(h) of the FAA, 
program funds may be obligated for periods up to five years where 
necessary and appropriate to the accomplishment of the tasks involved.
    (2) Operating Expense Funds. Pursuant to USAID budget policy, OE 
funded salaries and other recurrent cost items may be forward funded for 
a period of up to three (3) months beyond the fiscal year in which these 
funds were obligated. Non-recurring cost items

[[Page 93]]

may be forward funded for periods not to exceed twenty-four (24) months 
where necessary and appropriate to accomplishment of the work.\2\
---------------------------------------------------------------------------

    \2\ If there is a need, these contracts may be written for 5 years 
also but funded only as outlined in paragraph 4(a) of this Appendix.
---------------------------------------------------------------------------

    (b) Limitations on Personal Services Contracts. (1) Personal 
services contracts may only be used when adequate supervision is 
available.
    (2) Personal services contracts may be used for commercial 
activities. Commercial activities provide a product or service which 
could be obtained from a commercial source. See Attachment A of OMB 
Circular A-76 for a representative list of such activities.
    (3) Notwithstanding any other provision of USAID directives, 
regulations or delegations, U.S. citizen personal services contractors 
(USPSCs) may be delegated or assigned any authority, duty or 
responsibility delegable to U.S. citizen direct-hire employees (USDH 
employees) except that:
    a. They may not supervise U.S. direct-hire employees of USAID or 
other U.S. Government agencies. They may supervise USPSCs and non-U.S. 
citizen employees.
    b. They may not be designated as Contracting Officers or delegated 
authority to sign obligating or subobligating documents.
    c. They may represent the agency, except that communications that 
reflect a final policy, planning or budget decision of the agency must 
be cleared by a USDH employee.
    d. They may participate in personnel selection matters, but may not 
be delegated authority to make a final decision on personnel selection.
    e. Exceptions to the limitations in this paragraph (b)(3) must be 
approved by the Assistant Administrator for Management (AA/M).
    (c) Withholdings and Fringe Benefits. (1) Personal services 
contractors (PSCs) are Government employees for purposes of the Internal 
Revenue Code (Title 26 of the United States Code) and are, therefore, 
subject to social security (FICA) and Federal income tax (FIT) 
withholdings. As employees, they are ineligible for the ``foreign earned 
income'' exclusion under the Internal Revenue Service (IRS) regulations 
(see 26 CFR 1.911-3(c)(3)).
    (2) Personal services contractors are treated on par with other 
Government employees, except for programs based on any law administered 
by the Federal Office of Personnel Management (e.g., incentive awards, 
life insurance, health insurance, and retirement programs covered by 5 
CFR Parts 530, 531, 831, 870, 871, and 890). While PSCs are ineligible 
to participate in any of these programs, the following fringe benefits 
are provided as a matter of policy:
    (i) The employer's FICA contribution for retirement purposes.
    (ii) A contribution against the actual cost of the PSC's annual 
health and life insurance costs. Proof of health and life insurance 
coverage and its actual cost to the PSC shall be submitted to the 
Contracting Officer before any contribution is made. (See also paragraph 
4(c)(3) of this Appendix.)
    (A) The contribution for health insurance shall not exceed 50% of 
the actual cost to the PSC for his/her annual health insurance, or the 
maximum U.S. Government contribution for a direct-hire employee, as 
announced annually by the Office of Personnel Management, whichever is 
less. If the PSC is covered under a spouse's health insurance plan, 
where the spouse's employer pays some or all of the health insurance 
costs, the cost to the PSC for annual health insurance shall be 
considered to be zero.
    (B) The contribution for life insurance shall be up to 50% of the 
actual annual costs to the PSC for life insurance, not to exceed $500.00 
per year.
    (iii) PSCs shall receive the same percentage pay comparability 
adjustment as U.S. Government employees subject to the availability of 
funds.
    (iv) PSCs shall receive a 3% annual salary increase subject to 
satisfactory performance documented in their annual written evaluation. 
Such increase may not exceed 3% without a deviation. This 3% limitation 
also applies to extensions of the same service or negotiations for a new 
contract for the same or similar services unless a deviation has been 
approved.
    (v) PSCs shall receive the following allowances and differentials 
provided in the State Department's Standardized Regulations (Government 
Civilians Foreign Areas) on the same basis as U.S. Government employees 
(except for U.S. resident hires, see paragraph 4(d) and Section 12, 
General Provisions, Clause 22, ``U.S. Resident Hire Personal Services 
Contractors''):
    (A) Temporary lodging allowance (Section 120),\3\
---------------------------------------------------------------------------

    \3\ Mission Directors may authorize per diem in lieu of these 
allowances.
---------------------------------------------------------------------------

    (B) Living quarters allowance (Section 130),\3\
    (C) Post allowance (Section 220),\3\
    (D) Supplemental post allowance (Section 230),\3\
    (E) Separate maintenance allowance (Section 260),\4\
---------------------------------------------------------------------------

    \4\ These allowances are not authorized for short tours (i.e., less 
than a year).
---------------------------------------------------------------------------

    (F) Education allowance (Section 270),\4\
    (G) Educational travel (Section 280),\4\
    (H) Post differential (Section 500),
    (I) Payments during evacuation/authorized departure (Section 600), 
and

[[Page 94]]

    (J) Danger pay (Section 650).
    (vi) Any allowance or differential that is not expressly stated in 
paragraph 4(c)(2)(v) is not authorized for any PSC unless a deviation is 
approved. The only exception is a consumables allowance if authorized 
for the post under Handbook 22 or superseding ADS Chapter.
    (vii) Health room services may be provided in accordance with the 
clause of this contract entitled ``Physical Fitness and Health Room 
Privileges.''
    (viii) PSCs are eligible to receive benefits for injury, disability, 
or death under the Federal Employees' Compensation Act since the law is 
administered by the Department of Labor not the Office of Personnel 
Management.
    (ix) PSCs are eligible to earn four hours of annual leave and four 
hours of sick leave for each two week period. However, PSCs with 
previous PSC service (not previous U.S. Government civilian or military 
service) earn either six hours of annual leave for each two week period 
if their previous PSC service exceeds 3 years (including 10 hours annual 
leave for the final pay period of a calendar year), or eight hours of 
annual leave for each two week period if their previous PSC service 
exceeds 15 years.
    (3) A PSC who is a spouse of a current or retired Civil Service, 
Foreign Service, or Military Service member and who is covered by their 
spouse's Government health or life insurance policy is ineligible for 
the contribution under paragraph 4(c)(2)(ii) of this appendix.
    (4) Retired U.S. Government employees shall not be paid additional 
contributions for health or life insurance under their contract (since 
the Government will normally have already paid its contribution for the 
retiree) unless the employee can prove to the satisfaction of the 
Contracting Officer that his/her health and life insurance does not 
provide or specifically excludes coverage overseas. If coverage overseas 
is excluded, then eligibility as cited in paragraph 4(c)(3) applies.
    (5) Retired U.S. Government employees may be awarded Personal 
Services Contracts without any reduction in or offset against their 
Government annuity.
    (d) U.S. Resident Hire Personal Services Contractors. U.S. resident-
hire PSCs are not eligible for any fringe benefits (except contributions 
for FICA, health insurance, and life insurance), including differentials 
and allowances unless such individuals can demonstrate to the 
satisfaction of the Contracting Officer that they have received similar 
benefits and allowances from their immediately previous employer in the 
cooperating country, or the Mission Director may determine that payment 
of such benefits would be consistent with the Mission's policy and 
practice and would be in the best interests of the U.S. Government.
    (e) Determining Salary for Personal Services Contractors. (1) There 
are two separate and distinct methods of establishing a salary for 
personal services contractors. Use of method number 1 is required unless 
justified and approved as provided for in paragraph (e)(1)(ii).
    (i) Method 1: Salaries for Personal Services Contractors shall be 
established based on the market value in the United States of the 
position being recruited for. This requires the Contracting Officer in 
coordination with the Technical Officer to determine the correct market 
value (a salary range) of the position to be filled. This method is 
required in establishing salary for all PSCs unless method 2 is 
authorized as provided for in paragraph (e)(1)(ii). Contract Information 
Bulletin (CIB) 96-8 dated February 23, 1996 provides a guide which 
contains information concerning Preparation of Scopes of Work, 
Determination of Salary Class Grade, Salary Class Bench Marks and Salary 
Class Review. The market value of the position then becomes the basis 
along with the applicants' certified salary history on the SF 171, 
``Personal Qualifications Statement'' for salary negotiations by the 
Contracting Officer. The SF 171 must be retained in the permanent 
contract file. Any position which is determined to be above the GS-13 
equivalent and exceeds six months in duration must be classified by M/
HR/POD. The crucial point is the establishment of a realistic and 
reasonable market value for a job. The final determination regarding the 
reasonableness of a salary level rests with the Contracting Officer. 
Paying salaries using this method avoids ``rank in person'' salaries 
which are in excess of the value of the job being contracted for.
    (ii) Method 2: If approved in writing by the Mission Director or the 
cognizant Assistant Administrator, based on written justification, 
salary may be negotiated based on the applicant's current earnings 
adjusted in accordance with the factors set out in paragraphs (e)(1)(ii) 
(A) through (C). This approval requirement cannot be redelegated. 
Current earnings must be certified by the contractor on the SF 171, (see 
paragraph 6(b)(3) of this appendix). This is guidance for establishing 
initial salaries, not subsequent increases, for the same contractor 
performing the same function.
    (A) As a rule, up to a 3 percent increase above current earnings may 
be given. However, a 3 percent increase is awarded only to a PSC whose 
earnings are based on a period of twelve months or more; 2 percent for 
established earnings of less than twelve months but not less than four 
months; or 1 percent for established earnings during the past four 
months.
    (B) Additional percentages may be given for the following factors. 
If a PSC has worked in a developing country for more

[[Page 95]]

than two years, an additional 1 percent may be awarded. Education 
related to the area of specialization and above the minimum 
qualification required may warrant an additional 1 percent, and those 
specialties for which there is keen competition in the employment market 
or a serious shortage category nationwide may be awarded an additional 2 
percent. In addition, related technical experience over 5 years may 
increase the percentage by 1 and over ten years by 3.
    (C) All requests for an initial rate of pay above 10 percent over 
current earnings must be approved in writing by the appropriate 
Assistant Administrator or Mission Director. Current earnings are actual 
earnings for work reasonably related to the position for which the 
applicant is being considered. Paragraphs 4(e)(1)(ii) (A) through (C) 
apply only to salary setting method number 2 in paragraph 4 (e)(1)(ii).
    (2) When an applicant has no current earnings history (e.g., a 
person returning to the workforce after an absence of a number of years) 
or when an applicant's current earnings history doesn't accurately 
reflect the applicant's job market worth (e.g., a Peace Corps 
volunteer), every effort should be made to establish a market value for 
the position as a basis for negotiation, notwithstanding the lack of a 
current earnings history, provided that the applicant has the full 
qualifications for the job and could command a similar salary in the 
open job market.
    (3) This Appendix applies the ``USAID Contractor Salary Threshold 
(USAID CST)'' policy in Automated Directives System (ADS) Chapter 
302.3.6.8 to salaries for U.S. PSCs. Salaries in excess of the USAID 
CST, which is equivalent to the maximum rate for Federal agencies 
without a certified SES performance appraisal system, must be approved 
by the M/OAA Director in accordance with the approval procedures in ADS 
302.3.6.8(e). This approval cannot be re-delegated.
    (f) Incentive Awards. U.S. PSCs are not eligible to receive monetary 
awards. They are eligible for non-monetary awards such as certificates.
    (g) Annual Salary Increase. PSC contracts written for more than one 
year should provide for a 3% annual increase based on satisfactory 
performance documented in their annual written evaluations.
    (h) Pay Comparability Adjustment. PSCs shall receive the same 
percentage pay comparability adjustment as that received by U.S. 
Government employees subject to the availability of funds.
    (i) Subcontracting. PSCs are U.S. Government employees and may not 
be called upon (or permitted) to subcontract out any part of their work. 
Funds for subcontracting have no place in the budget of a personal 
services contract. Support services, equipment, and supplies (e.g., 
typing and report preparation, paper, pens, computers, and furniture) 
should be furnished to PSCs just as they would be to direct-hire 
employees. To the extent that direct-hire personnel may be authorized to 
purchase supporting services or supplies under a travel authorization, 
so may PSCs; otherwise, contracts for personal services should not 
contain any funds for procurement.

    5. Soliciting for Personal Services Contracts. (a) Technical 
Officer's Responsibilities. The Technical Officer will prepare a written 
detailed statement of duties and a statement of minimum qualifications 
to cover the position being recruited for. The statement shall be 
included in the procurement request (the Acquisition & Assistance 
Request Document) e.g., the request shall also include the following 
additional information as a minimum:
    (1) The specific foreign location(s) where the work is to be 
performed, including any travel requirements (with an estimate of 
frequency);
    (2) The length of the contract, with beginning and ending dates, 
plus any options for renewal or extension;
    (3) The basic education, training, experience, and skills required 
for the position;
    (4) An estimate of what a comparable GS/FS equivalent position 
should cost, including basic salary, allowances, and differentials, if 
appropriate; and
    (5) A list of Government or host country furnished items (e.g., 
housing).
    (b) Contracting Officer's Responsibilities. (1) The Contracting 
Officer will prepare the solicitation for personal services which shall 
contain:
    (i) Three sets of SF 171s and SF 171As. (Upon receipt, one copy of 
each SF 171 and SF 171A shall be forwarded to the Project Officer.)
    (ii) A detailed statement of duties or a completed position 
description for the position being recruited for.
    (iii) A copy of the prescribed contract Cover Page, Contract 
Schedule, General Provisions as appropriate, as well as the FAR Clauses 
to be incorporated in full text and by reference.
    (iv) A copy of the USAID General Notice entitled ``Employee Review 
of the New Standards of Conduct''.
    (2) The Contracting Officer shall comply with the requirements of 
(48 CFR) AIDAR 706.302-70(c) as detailed in paragraph 5(c) except those 
recruited from the U.S.
    (c) Competition. (1) Under (48 CFR) AIDAR 706.302-70(b)(1), Personal 
Services Contracts (except those recruited from the U.S.) are exempt 
from the requirements for full and open competition with two limitations 
that must be observed by Contracting Officers:

[[Page 96]]

    (i) Offers are to be requested from as many potential offerors as is 
practicable under the circumstances, and
    (ii) A justification supporting less than full and open competition 
must be prepared in accordance with FAR 6.303.
    (2) PSCs With Untied States Citizens or Resident Aliens Recruited 
from Outside the Cooperating Country. Solicitations for PSCs recruited 
outside the cooperating country must be publicized via the Agency's 
External Home Page on the Internet under the caption ``Business & 
Procurement, USAID Procurements.'' Instructions regarding how to access 
the External Internet and the information to be provided have been 
approved and included in a CIB. A justification under FAR 6.303 is not 
required when this procedure is followed.
    (3) A class justification was approved by the USAID Procurement 
Executive to satisfy the requirements of (48 CFR) AIDAR 706.302-70(c)(2) 
for a justification in accordance with FAR 6.303. This class 
justification for Personal Services Contracts with U.S. Citizens may 
only be used for those who are recruited locally subject to the 
following conditions:
    (i) The position was publicized locally in accordance with 
established Mission policy or procedure, or the procedures in paragraph 
5(c)(ii) was followed;
    (ii) As an alternative to the procedures in paragraphs 5(c) (i) and 
(ii), at least 3 individuals were considered by consulting source lists 
(e.g., applications or resumes on hand) or conducting other informal 
solicitation.
    (iii) Extensions or renewals with the same individual for continuing 
services do not need to be publicized.
    (iv) A copy of the class justification (which was distributed to all 
USAID Contracting Officers via Contract Information Bulletin) must be 
included in the contract file, together with a written statement, signed 
by the Contracting Officer, that the contract is being awarded pursuant 
to (48 CFR) AIDAR 706.302-70(b)(1); that the conditions for use of this 
class justification have been met; and that the cost of the contract is 
fair and reasonable.
    (4) If the appropriate competitive procedure in paragraph 5(3) is 
not followed, the Contracting Officer must prepare a separate 
justification as required under (48 CFR) AIDAR 706.302-70(c)(2).
    (5) Since the award of a Personal Services Contract is based on 
technical qualifications, not price, and since the SF 171, ``Personal 
Qualifications Statement'', and SF 171A, ``Continuation Sheet for 
Standard Form 171'', are used to solicit for such contracts, FAR 
subparts 15.4 and 15.5 and FAR parts 52 and 53 are inappropriate and 
shall not be used. Instead, the solicitation and selection procedures 
outlined in this Appendix shall govern.

    6. Negotiating a Personal Services Contract. Negotiating a Personal 
Services Contract is significantly different from negotiating a 
nonpersonal services contract because it establishes an employer-
employee relationship; therefore, the selection procedures are more akin 
to the personnel selection procedures.
    (a) Technical Officer's Responsibilities. The Technical Officer 
shall be responsible for reviewing and evaluating the applications 
(i.e., SF 171s) received in response to the solicitation issued by the 
Contracting Officer. If deemed appropriate, interviews may be conducted 
with the applicants before the final selection is submitted to the 
Contracting Officer.
    (b) Contracting Officer's Responsibilities. (1) The Contracting 
Officer shall forward a copy of each SF 171 received under the 
solicitation to the Project Officer for evaluation.
    (2) On receipt of the Technical Officer's recommendation, the 
Contracting Officer shall conduct negotiations with the recommended 
applicant. Normally, the Contracting Officer shall negotiate only the 
salary (see the salary setting coverage in paragraph 4(e) of this 
Appendix). The terms and conditions of the contract, including 
differentials and allowances, are not negotiable or waivable without a 
properly approved deviation (see (48 CFR) AIDAR 701.470). If the 
Contracting Officer can negotiate a salary that is fair and reasonable, 
then the award shall be made.
    (3) The Contracting Officer shall use the certified salary history 
on the SF 171 as the basis for salary negotiations, along with the 
market value of the position being recruited for (unless approval not to 
use market value has been granted under paragraph 4(e)(1)(ii)), and the 
Technical Officer's cost estimate.
    (4) The Contracting Officer will obtain two copies of IRS Form W-4, 
``Employee's Withholding Allowance Certificate'', from the successful 
applicant. (Upon receipt, the Contracting Officer will forward one copy 
of the W-4 to the Office of the Controller.)
    (5) Security clearance is required for all U.S. citizens entering 
into USAID PSCs. The Contracting Officer will obtain four sets of SF 86, 
``Security Investigation Data for Sensitive Position'', from the 
successful applicant and forward them to the Office of Security. PSCs 
may receive a preliminary clearance and be placed under contract prior 
to receipt of clearance provided the appropriate paper work has been 
completed, reviewed by IG/SEC/PSI and acknowledged as a ``no objection'' 
to the appropriate Mission. See General Provision 24 in section 12 of 
this Appendix.

    7. Executing a Personal Services Contract. Contracting Officers or 
Heads of Contracting Activities, whether USAID/W or Mission, may execute 
Personal Services Contracts, provided that the amount of the contract

[[Page 97]]

does not exceed the contracting authority that has been redelegated to 
them. In executing a Personal Services Contract, the Contracting Officer 
is responsible for insuring that:
    (a) The proposed contract is within his/her delegated authority;
    (b) A Request Number covering the proposed contract has been 
received;
    (c) The position has been classified by either the Mission or M/HR/
POD (see CIB 96-8) and the classification is in the contract file;
    (d) The proposed Statement of Duties is contractible, contains a 
statement of minimum qualifications from the technical office requesting 
the services, and is suitable to the use of a Personal Services Contract 
in that:
    (1) Performance of the proposed work requires or is best suited for 
an employer-employee relationship, and is thus not suited to the use of 
a non-personal services contract;
    (2) The Statement of Duties does not require performance of any 
function normally reserved for Federal employees (see paragraph 4(b) of 
this Appendix); and
    (3) There is no apparent conflict of interest involved (if the 
Contracting Officer believes that a conflict of interest may exist, the 
question should be referred to the cognizant legal counsel);
    (e) Selection of the contractor is documented and justified. (48 
CFR) AIDAR 706.302-70(b)(1) provides an exception to the requirement for 
full and open competition for Personal Services Contracts abroad (see 
paragraph 5(c) of this Appendix);
    (f) The standard contract format prescribed for Personal Services 
Contracts (Sections 10, 11, 12 and 13 to this Appendix) is used; or that 
any necessary deviations are processed as required by (48 CFR) AIDAR 
701.470.

    (Note: The prescribed contract format is designed for use with 
contractors who are residing in the U.S. when hired. If the contract is 
with a U.S. citizen residing in the cooperating country when hired, 
contract provisions governing physical fitness and travel/transportation 
expenses, and home leave, allowances, and orientation should be suitably 
modified (see paragraph 4(d) of this Appendix)).

These modifications are not considered deviations subject to (48 CFR) 
AIDAR 701.470. (Justification and explanation of these modifications is 
to be included in the contract file);
    (g) Orientation is arranged in accordance with General Provision 23 
in section 12 of this Appendix;
    (h) The contractor has submitted the names, addresses, and telephone 
numbers of at least two persons who may be notified in the event of an 
emergency (this information is to be retained in the contract file);
    (i) The contract is complete and correct and all information 
required on the contract Cover Page (USAID Form 1420-36A) has been 
entered;
    (j) The contract has been signed by the Contracting Office and the 
contractor, and fully executed copies are properly distributed;
    (k) The following clearances, approvals and forms have been 
obtained, properly completed, and placed in the contract file before the 
contract is signed by both parties;
    (1) Evidence of job classification in the file by the Mission except 
for grade equivalents above GS-13. For those positions with grade 
equivalent above GS-13, evidence of job classification done by M/HR/POD;
    (2) Security clearance, including the completed SF 86, to the extent 
required by USAID Handbook 6, Security or superseding ADS Chapter, (see 
General Provisions 14 and 24 in section 12 of this Appendix);
    (3) Mission, host country, Human Resources Office, and technical 
office clearance, as appropriate;
    (4) Medical examinations and certifications as required by the 
contract general provision entitled ``Physical Fitness and Health Room 
Privileges'';
    (5) One original executed IRS Form W-4 entitled ``Employee's 
Withholding Allowance Certificate'', and one copy, shall be obtained. 
The original shall be sent to the Controller of the paying office and 
one shall be placed in the contract file;
    (6) Evidence of DAA/HR clearance that the position may be filled by 
PSC.
    (7) The approval for any salary in excess of the ``USAID Contractor 
Salary Threshold (USAID CST)'', which is equivalent to the maximum rate 
for Federal agencies without a certified SES performance appraisal 
system, in accordance with approval procedures in ADS 302.3.6.8(e) as 
required in Section 4.(e)(3);
    (8) A copy of the class justification or other appropriate 
explanation and support required by (48 CFR) AIDAR 706.302-70, if 
applicable;
    (9) Any deviation to the policy or procedures of this appendix, 
processed and approved under (48 CFR) AIDAR 701.470;
    (10) A fully executed SF 171, and a copy of the position 
classification, and approved deviation, if appropriate;
    (11) The Memorandum of Negotiation; and
    (12) The Contracting Officer's signed certification that competition 
requirements have been satisfied as described in paragraph 5(c) of the 
policy text of this Appendix. The certification shall be a part of the 
Memorandum of Negotiations.
    (l) Funds for the contract are properly obligated to preclude 
violation of the Anti-Deficiency Act, 31 U.S.C. 1341 (the Contracting 
Officer ensures that the contract has been

[[Page 98]]

properly recorded by the appropriate accounting office prior to its 
release for the signature of the selected contractor);
    (m) The contractor receives and understands the USAID General Notice 
entitled ``Employee Review of the New Standards of Conduct'' and a copy 
is attached to each contract as provided for in paragraph (c) of General 
Provision 1, section 12;
    (n) Agency conflict of interest requirements as set out in the 
General Notice ``Employee Review of the New Standards of Conduct'' are 
met by the contractor prior to his/her reporting for duty;
    (o) A copy of a Checklist for Personal Services contractors which 
may be in the format set out in this section or another format 
convenient for the Contracting Officer, provided that a memorandum 
containing all of the information described in this section 7 shall be 
prepared for each PSC and placed in the contract file;
    (p) The contractor understands that he/she is an employee of the 
United States for purposes of the Foreign Assistance Act of 1961, as 
amended, and the Internal Revenue Code (Title 26 of the United States 
Code). This subjects the employee to withholding for both FICA and 
Federal Income Tax and precludes the employee from receiving the Federal 
Earned Income Tax exclusion of 26 U.S.C. Section 911. See Special Note 
on the Cover Page of USAID Form 1420-36.
    (q) The contractor also understands that he/she may commence work 
prior to the completion of the security clearance. However, until such 
time as clearance is received, the contractor may not have access to 
classified or administratively controlled materials. Failure to obtain 
clearances will constitute cause for termination.

    8. Post Audit. The Inspector General, or his/her designee, audits 
the Personal Services Contracts of all contracting activities for the 
purpose of ensuring conformance to applicable policy and regulations.

    9. Contracting Format. The prescribed Contract Cover Page, Contract 
Schedule, General Provisions, and appropriate Federal Acquisition 
Regulations (FAR) clauses for Personal Services Contracts covered by 
this appendix are included as follows:
    10. Form USAID 1420-36, ``Cover Page'' and ``Schedule''.
    11. Optional Schedule With a U.S. Citizen or U.S. Resident Alien.
    12. General Provisions.
    13. FAR Clauses to be Incorporated in Full Text in Personal Services 
Contracts.
    14. FAR Clauses to be incorporated by reference in Personal Services 
Contracts.

    10. Form USAID 1420-36, ``Cover Page'' and ``Schedule''.

    Contract With a U.S. Citizen or U.S. Resident Alien for Personal 
         Services Abroad--Form AID 1420-36A (11/96) (Cover Page)

[[Page 99]]

[GRAPHIC] [TIFF OMITTED] TR23JY97.000

                          Privacy Act Statement

    This information is provided pursuant to Public Law 93-579 (Privacy 
Act of 1974), December 31, 1974, for individuals who complete this form.
    The Executive Office of the President, Office of Management and 
Budget has required

[[Page 100]]

that all departments and agencies comply with the reporting requirements 
of Section 6041 of the Internal Revenue Code, Section 6041 states that 
all departments and agencies making payments totalling $600 or more in 
one year to a recipient for services provided must be reported to the 
Internal Revenue Service (IRS). The SSN and all financial numbers will 
be disclosed to U.S. Agency for International Development (USAID) 
payroll office personnel and personnel in the Department of the 
Treasury, Division of Disbursements. USAID will use this SSN to complete 
Form W-2 of the Code on employee compensation. Disclosure by the 
personal services contractor of the SSN is necessary to obtain the 
services, benefits or processes provided by this contract. Disclosure of 
the SSN may be made outside USAID (a) pursuant to any applicable routine 
use listed in USAID's Notice for implementing the Privacy Act as 
published in the Federal Register or (b) when disclosure by virtue of a 
contract being a public document after signatures is authorized under 
the Freedom of Information Act.

                                Schedule

    (The Illustrated Schedule consists of this Table of Contents--
Articles I-VI, and the General Provisions.)

                            Table of Contents

Article I--Statement of Duties
Article II--Period of Service Overseas
Article III--Contractor's Compensation and Reimbursement in U.S. Dollars
Article IV--Costs Reimbursable and Logistic Support
Article V--Precontract Expenses
Article VI--Additional Clauses

    General Provisions:
    The following provisions numbered as shown below omitting number(s) 
------, are the General Provisions (GPs) of this Contract:

1. Definitions
2. Laws and Regulations Applicable Abroad
3. Physical Fitness and Health Room Privileges
4. Workweek and Compensation (Pay Comparability Adjustments)
5. Leave and Holidays
6. Differential and Allowances
7. Social Security, Federal Income Tax and Foreign Earned Income
8. Advance of Dollar Funds
9. Insurance
10. Travel and Transportation Expenses
11. Payment
12. Conversion of U.S. Dollars to Local Currency
13. Post of Assignment Privileges
14. Security Requirements
15. Contractor-Mission Relationships
16. Termination
17. Release of Information
18. Notices
19. Reports
20. Use of Pouch Facilities
21. Biographical Data
22. Resident Hire PSC
23. Orientation and Language Training
24. Conditions for Contracting Prior to Receipt of Security Clearance
25. Medical Evacuation Services
26. Governing Law

    For each tour of duty, attach the applicable General Provisions.
    Schedule: (Note: Use of the following Schedule Articles are not 
mandatory. They are intended to serve as guidelines for contracting 
offices in drafting contract schedules. Article language may be changed 
to suit the needs of the particular contract).

                     Article I--Statement of Duties

    (The statement of duties shall include:
    A. General statement of the purpose of the contract.
    B. Statement of duties to be performed.
    C. Any USAID consultation or orientation.)

                 Article II--Period of Service Overseas

    Within ------ days after written notice from the Contracting Officer 
that all clearances, including the doctor's statement of medical opinion 
required under General Provision Clause 4, have been received or unless 
another date is specified by the Contracting Officer in writing, the 
contractor shall proceed to ------ where he/she shall promptly commence 
performance of the duties specified above. The contractor's period of 
service overseas shall be approximately ------ in ------. (Specify time 
of duties in each location as well as authorized stopovers with purpose 
of each.)

Article III--Contractor's Compensation and Reimbursement in U.S. Dollars

    A. Except to the extent reimbursement is payable in the currency of 
the Cooperating Country pursuant to Article IV, USAID shall pay the 
contractor compensation after it has accrued and reimburse him/her in 
U.S. dollars for necessary and reasonable costs actually incurred by 
him/her in the performance of this contract within the categories listed 
in paragraph C, below, and subject to the conditions and limitations 
applicable thereto as set out herein and in the attached General 
Provisions (GP).
    B. The amount budgeted and available as personal compensation to the 
contractor is calculated to cover a calendar period of approximately --
---- (days) (weeks) (months) (years) which is to include:
    (1) vacation, sick, and home leave which may be earned during the 
contractor's tour of duty (GP Clause 5);

[[Page 101]]

    (2) ------ days for authorized travel (GP Clause 10); and
    (3) ------ days for orientation and consultation in the United 
States (GP Clause 23).
    C. Allowable Costs: 1. Compensation at the rate of $------ per 
(year) (month) (week) (day). Adjustments in compensation (pay) for 
periods when the contractor is not in compensable pay status shall be 
calculated as follows:
    Rate of $------ per (day) (hour).
    Contingency for Compensation (Pay Comparability) Adjustments. $----
--.
    Annual Salary increase (3%) $------.
    2. Overtime (Unless specifically authorized in the Schedule of this 
contract, no overtime hours shall be allowed hereunder.) $------.
    * 3. Overseas Differential (Ref. GP Clause No. 6.) Rate $------ and 
Contingency $------=Total $------.
---------------------------------------------------------------------------

    * If post differential is applicable to the assigned post, a 
contingency for the adjusted amount of differential resulting from 
compensation (pay comparability) adjustment should be included.
---------------------------------------------------------------------------

    ** 4. Allowances in Cooperating Country (Ref. GP Clause 6.) $------.
---------------------------------------------------------------------------

    ** Do not include the value of any costs to be paid or reimbursed in 
local currency.
---------------------------------------------------------------------------

    ** 5. Travel and Transportation (Ref. GP Clause 10.) (Includes the 
value of GTRs furnished by the Government, not payable to contractor). 
$------.
    a. United States $------
    b. International $------
    c. Cooperating and Third Country $------
    Subtotal Item 5 $------
    ** 6. Subsistence or Per Diem (Ref. GP Clause 10.)
    a. Untied States $------
    b. International $------
    c. Cooperating and Third Country $------.
    Subtotal Item 6 $------
    7. Other Direct Costs.
    a. Health and Life Insturance $------
    b. Precontract Costs, passport, visa, inoculations, etc. (Ref. GP 
Clause 8.) $------
    c. Physical Examination (Ref. GP Clause 3.) $------
    d. Communications, Miscellaneous. $------
    Subtotal Item 7 $------
    8. F.I.C.A.-U.S.G. Contribution (not payable to contractor). $------
    D. Maximum U.S.-Dollar Obligation:
    In no event shall the maximum U.S.-dollar obligation under this 
contract exceed $------. Contractor shall keep a close account of all 
obligations he/she incurs and accrues hereunder and promptly notify the 
Contracting Officer whenever in his/her opinion the said maximum is not 
sufficient to cover all compensation and costs reimbursable in U.S. 
dollars which he/she anticipates under the contract.

           Article IV--Costs Reimbursable and Logistic Support

    A. General: The contractor shall be provided with or reimbursed in 
local currency (------) for the following:

                               [Complete]

    B. Method of Payment of Local Currency Costs: Those contract costs 
which are specified as local currency costs in paragraph A above, if not 
furnished in kind by the cooperating government or the Mission, shall be 
paid to the contractor in a manner adapted to the local situation, based 
on vouchers submitted in accordance with General Provision Clause 11. 
The documentation for such costs shall be on such forms and in such 
manner as the Mission Director shall prescribe.

                               [Complete]

                     Article V--Precontract Expenses

    No expense incurred before execution of this contract will be 
reimbursed unless such expense was incurred after receipt and acceptance 
of a precontract expense letter issued to the contractor by the 
Contracting Officer, and then only in accordance with the provisions and 
limitations contained in such letter. The rights and obligations created 
by such letter shall be considered as merged into this contract.

                     Article VI--Additional Clauses

    (Additional Schedule Clauses may be added such as the implementation 
of General Provisions or Additional Clauses.)

    11.Optional Schedule With a U.S. Citizen or U.S. Resident Alien

     A U.S. Citizen or a U.S. Resident Alien PSC Contract No. ------

                            Table of Contents

                           (Optional Schedule)

    (Use of the Optional Schedule is not mandatory. It is intended to 
serve as an alternate procedure for OE funded U.S. PSCs or U.S. Resident 
Alien PSCs. The Schedule is for use when the Contracting Officer 
anticipates incremental recurring cost funded contracts.
    Use of the Optional Schedule eliminates the need to amend the 
contract each time funds are obligated. However, the Contracting Officer 
is required to amend each contract not less than twice during a 12 month 
period to ensure that the contract record of obligations is up to date 
and agrees with the figures in the master funding document.)
    The Schedule on pages ------ thru ------ consists of this Table of 
Contents and the following Articles:

Article I--Statement of Duties

[[Page 102]]

Article II--Period of Service Overseas
Article III--Contractor's Compensation and Reimbursement in U.S. Dollars
Article IV--Costs Reimbursable and Logistic Support
Article V--Precontract Expenses
Article VI--Additional Clauses

    General Provisions:
    The following provisions, numbered as shown below, omitting 
number(s) ------, are the General Provisions (GP) of this Contract:

1. Definitions
2. Laws and Regulations Applicable Abroad
3. Physical Fitness and Health Room Privileges
4. Workweek and Compensation (Pay Comparability Adjustments)
5. Leave and Holidays
6. Differential and Allowances
7. Social Security and Federal Income Tax
8. Advance of Dollar Funds
9. Insurance
10. Travel and Transportation Expenses
11. Payment
12. Conversion of U.S. Dollars of Local Currency
13. Post of Assignment Privileges
14. Security Requirements
15. Contractor-Mission Relationships
16. Termination
17. Release of Information
18. Notices
19. Reports
20. Use of Pouch Facilities
21. Biographical Data
22. Resident Hire PSC
23. Orientation and Language Training
24. Conditions for Contracting Prior to Receipt of Security Clearance
25. Medical Evacuation Services
26. Governing Law

    For each tour of duty, attach the applicable General Provisions.

                     Article I--Statement of Duties.

    (The statement of duties shall include:
    A. General statement of the purpose of the contract.
    B. Statement of duties to be performed.
    C. Any USAID consultation or orientation.)

                 Article II--Period of Service Overseas.

    Within ------ days after written notice form the Contracting Officer 
that all clearances, including the doctor's statement of medical opinion 
required under General Provision Clause 3, have been received or unless 
another date is specified by the Contracting Officer in writing, the 
contractor shall proceed to ------ where he/she shall promptly commence 
performance of the duties specified above. The contractor's period of 
service overseas shall be approximately ------ in ------. (Specify time 
of duties in each location as well as authorized stopovers with purpose 
of each.)

    Article III--Contractor's Compensation and Reimbursement in U.S. 
                                Dollars.

    A. Except to the extent reimbursement is payable in the currency of 
the Cooperating Country pursuant to Article IV, USAID shall pay the 
contractor compensation after it has accrued and reimburse him/her in 
U.S. dollars for necessary and reasonable costs actually incurred by 
him/her in the performance of this contract within the categories listed 
in paragraph C, below, and subject to the conditions and limitations 
applicable thereto as set out herein and in the attached General 
Provisions (GP).
    B. The amount budgeted and available as personal compensation to the 
contractor is calculated to cover a calendar period of approximately --
---- (days) (weeks) (months) (years) which is to include:
    1. Vacation, sick, and home leave which may be earned during the 
contractor's tour of duty (GP Clause 5);
    2. ------ days for authorized travel (GP Clause 10); and
    3. ------ days for orientation and consultation in the United States 
(GP Clause 23).
    C. Allowable Costs: 1. The following illustrative budget details 
allowable costs under this contract and provides estimated incremental 
recurrent cost funding in the total amount shown. Additional funds for 
the full term of this contract will be provided by the preparation of a 
master PSC funding document issued by the Mission Controller for the 
purpose of providing additional funding for a specific period. The 
master PSC funding document will be attached to this contract and will 
form a part of the executed contract while also serving to amend the 
budget.
    2. Compensation at the rate of $------ per (year) (month) (week) 
(day). Adjustments in compensation (pay) for periods when the contractor 
is not in compensable pay status shall be calculated as follows:
    Rate of $------ per (day) (hour).
    Contingency for Compensation (Pay Comparability Adjustments.) $----
--
    Annual Salary increase (3%) $------
    3. Overtime (Unless specifically authorized in the Schedule of this 
contract, no overtime hours shall be allowed hereunder.) $------
    * 4. Overseas Differential (Ref. GP Clause No. 6.) Rate $------ and 
Contingency $------ = Total $------.
    ** 5. Allowances in Cooperating Country (Ref. GP Clause 6.) $------
---------------------------------------------------------------------------

    * If post differential is applicable to the assigned post, a 
contingency for the adjusted amount of differential resulting from 
compensation (pay comparability) adjustment should be included.

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

[[Page 103]]

    ** 6. Travel and Transportation (Ref. GP Clause 10.) (Includes the 
value of GTRs furnished by the Government, not payable to contractor). 
$------.
---------------------------------------------------------------------------

    ** Do not include the value of any costs to be paid or reimbursed in 
local currency.
---------------------------------------------------------------------------

    a. United States $------
    b. International $------
    c. Cooperating and Third Country $------
    Subtotal Item 6 $------
    **7. Subsistence or Per Diem (Ref. GP Clause 10.)
    a. United States $------
    b. International $------
    c. Cooperating and Third Country $------
    Subtotal Item 7 $------
    **8. Other Direct Costs
    a. Health and Life Insurance (Ref. GP Clause 9.) $------
    b. Precontract Costs, passport, visa, inoculations, etc. (Ref. GP 
Clause 8.) $------
    c. Physical Examination (Ref. GP Clause 3.) $------
    d. Communications, Miscellaneous Subtotal Item 8 $------
    9. F.I.C.A.--U.S.G. contribution (not payable to contractor). $----
--
    D. Maximum U.S.-Dollar Obligation: In no event shall the maximum 
U.S.-dollar obligation under this contract exceed $------.
    E. Salary changes and personnel-related contract actions will be 
made by processing the same forms as used in making such changes and 
actions for direct-hire employees. When issued by the Contracting 
Officer, the forms utilized will be attached to the contract and will 
form a part of the contract terms and conditions.
    F. Any adjustment or increase in the compensation granted to direct-
hire employees will be allowed for in PSCs subject to the availability 
of funds. Such an adjustment will be effected by a mass pay adjustment 
notice from the Contracting Officer, which will be attached to the 
contract and form a part of the executed contract.
    G. At the end of each year of satisfactory service, PSC contractors 
will be eligible to receive an increase equal to 3% pending availability 
of funds provided their services have been satisfactory. Such increase 
will be effected by the execution of an SF-1126, payroll change slip 
which is to be attached to each contract and each action forms a part of 
the official contract file.
    H. The master PSC funding document may not exceed the term or 
estimated total cost of this contract. Notwithstanding that additional 
funds are obligated under this contract through the issuance and 
attachment of the master PSC funding document, all other contract terms 
and conditions remain in full effect.

           Article IV--Costs Reimbursable and Logistic Support

    A. General: The contractor shall be provided with or reimbursed in 
local currency (------) for the following:

                               [Complete]

    B. Method of Payment of Local Currency Costs: Those contract costs 
which are specified as local currency costs in paragraph A above, if not 
furnished in kind by the cooperating government or the Mission, shall be 
paid to the contractor in a manner adapted to the local situation, based 
on vouchers submitted in accordance with General Provision Clause 12. 
The documentation for such costs shall be on such forms and in such 
manner as the Mission Director shall prescribe.

                     Article V--Precontract Expenses

    No expense incurred before execution of this contract will be 
reimbursed unless such expense was incurred after receipt and acceptance 
of a precontract expense letter issued to the contractor by the 
Contracting Officer, and then only in accordance with the provisions and 
limitations contained in such letter. The rights and obligations created 
by such letter shall be considered as merged into this contract.

                     Article VI--Additional Clauses

    (Additional Schedule Clauses may be added such as the implementation 
of General Provisions or Additional Clauses.)

    12. General Provisions

   Contract With a U.S. Citizen or a U.S. Resident Alien for Personal 
                             Services Abroad

    The following clauses are to be used (when applicable), for both 
tours of duty of less than 1 year as well as 1 year or more.

                            Index of Clauses

1. Definitions
2. Compliance with Laws and Regulations Applicable Abroad
3. Physical Fitness and Health Room Privileges
4. Workweek and Compensation (Pay Comparability Adjustments)
5. Leave and Holidays
6. Differential and Allowances
7. Social Security, Federal Income Tax, and Foreign Earned Income
8. Advance of Dollar Funds
9. Insurance
10. Travel and Transportation Expenses
11. Payment
12. Conversion of U.S. Dollars to Local Currency
13. Post of Assignment Privileges
14. Security Requirements
15. Contractor-Mission Relationships
16. Termination

[[Page 104]]

17. Release of Information
18. Notices
19. Reports
20. Use of Pouch Facilities
21. Biographical Data
22. U.S. Resident Hire Personal Services Contractor
23. Orientation and Language Training
24. Conditions for Contracting Prior to Receipt of Security Clearance
25. Medical Evacuation (MEDEVAC) Services
26. Governing Law

                       1. Definitions (June 1990)

    (a) USAID shall mean the U.S. Agency for International Development.
    (b) Administrator shall mean the Administrator or the Deputy 
Administrator of USAID.
    (c) Contracting Officer shall mean 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.
    (d) Contractor shall mean the individual engaged to serve under this 
contract.
    (e) Cooperating Country shall mean the foreign country in or for 
which services are to be rendered hereunder.
    (f) Cooperating Government shall mean the government of the 
Cooperating Country.
    (g) Government shall mean the United States Government.
    (h) Local currency shall mean the currency of the Cooperating 
Country.
    (i) Mission shall mean the United States USAID Mission, or principal 
USAID office, in the Cooperating Country, or USAID/Washington (USAID/W).
    (j) Mission Director shall mean the principal officer in the Mission 
in the Cooperating Country, or his/her designated representative.
    (k) Technical Officer shall mean the USAID official to whom the 
contractor reports, and who is responsible for monitoring the 
contractor's performance.
    (l) Tour of duty shall mean the contractor's period of service under 
this contract and shall include orientation in the United States (less 
language training), authorized leave, and international travel.
    (m) Traveler shall mean--
    (1) The contractor in authorized travel status or
    (2) Dependents of the contractor who are in authorized travel 
status.
    (n) Dependents means:
    (1)Spouse.
    (2) Children (including step and adopted children) who are unmarried 
and under 21 years of age or, regardless of age, are incapable of self-
support.
    (3) Parents (including step and legally adoptive parents) of the 
employee or of the spouse, when such parents are at least 51 percent 
dependent on the contractor for support.
    (4) Sisters and brothers (including step or adoptive sisters or 
brothers) of the contractor, or of the spouse, when such sisters and 
brothers are at least 51 percent dependent on the contractor for 
support, unmarried and under 21 years of age, or regardless of age, are 
incapable of self-support.
    (o) U.S. Resident Alien, as used in this contract, shall mean an 
alien immigrant, legally resident in the United States, the Commonwealth 
of Puerto Rico, or the possessions of the United States, and having a 
valid ``Alien Registration and Receipt Card'' (Immigration and 
Naturalization Service forms I-151 or I-551).
    (p) U.S. Resident Hire Personal Services Contractor (PSC) means a 
U.S. citizen who, at the time of hiring as a PSC, resides in the 
Cooperating Country:
    (1) As a spouse or dependent of a U.S. citizen employed by a U.S. 
Government Agency or under any U.S. Government-financed contract or 
agreement, or
    (2) For reasons other than for employment with a U.S. Government 
Agency or under any U.S. Government-financed contract or agreement. A 
U.S. citizen for purposes of this definition also includes a person who 
at the time of contracting, is a lawfully admitted permanent resident of 
the United States.

  2. Compliance With Laws and Regulations Applicable Abroad (July 1993)

    (a) Conformity to Laws and Regulations of the Cooperating Country. 
Contractor agrees that, while in the cooperating country, he/she as well 
as authorized dependents will abide by all applicable laws and 
regulations of the cooperating country and political subdivisions 
thereof.
    (b) Purchase or Sale of Personal Property or Automobiles. To the 
extent permitted by the cooperating country, the purchase, sale, import, 
or export of personal property or automobiles in the cooperating country 
by the contractor shall be subject to the same limitations and 
prohibitions which apply to Mission U.S.-citizen direct-hire employees.
    (c) Code of Conduct. The contractor shall, during his/her tour of 
duty under this contract, be considered an ``employee'' (or if his/her 
tour of duty is for less than 130 days, a ``special Government 
employee'') for the purposes of, and shall be subject to, the provisions 
of 18 U.S.C. 202(a) and the USAID General Notice entitled ``Employee 
Review of the New Standards of Conduct'' pursuant to 5 CFR part 2635. 
The contractor acknowledges receipt of a copy of these documents by his/
her acceptance of this contract.

[[Page 105]]

         3. Physical Fitness and Health Room Privileges (APR 7)

    (a) Physical Fitness. (1) For all assignments outside of the United 
States the contractor and any authorized dependents shall be required to 
be examined by a licensed doctor of medicine, and the contractor shall 
obtain from the doctor a statement of medical opinion that, in the 
doctor's opinion, the contractor is physically able to engage in the 
type of activity for which he/she is to be employed under the contract, 
and the contractor and any dependents are physically able to reside in 
the Cooperating Country. A copy of the statement(s) shall be provided to 
the Contracting Officer prior to the contractor's departure for the 
Cooperating Country, or for a U.S. resident hire, before he/she starts 
work under the contract.
    (2) For assignments of 60 days or more in the Cooperating Country, 
the Contracting Officer shall provide the contractor and all authorized 
dependents copies of the ``USAID Contractor Employee Physical 
Examination Form''. This form is for collection of information; it has 
been reviewed and approved by OMB, and assigned Control No. 0412-0536. 
Information required by the Paperwork Reduction Act (burden estimate, 
points of contract, and OMB approval expiration date) is printed on the 
form. The contractor and all authorized dependents shall obtain a 
physical examination from a licensed physician, who will complete the 
form for each individual. The contractor will deliver the physical 
examination form(s) to the Embassy health unit in the Cooperating 
Country. A copy of the doctor's statement of medical opinion at the end 
of the form which identifies the contractor or dependent by name may be 
used to meet the requirement in (a)(1) above.
    (3) For end-of-tour the contractor and his/her authorized dependents 
are authorized physical examinations within 60 days after completion of 
the contractor's tour-of-duty.
    (b) Reimbursement. (1) As a contribution to the cost of medical 
examinations required by paragraph (a)(1) of this clause, USAID shall 
reimburse the contractor not to exceed $100 for each physical 
examination, plus reimbursement of charges for immunizations.
    (2) As a contribution to the cost of medical examinations required 
by paragraph (a)(2) of this clause the contractor shall be reimbursed in 
an amount not to exceed half of the cost of the examination up to a 
maximum USAID share of $300 per examination plus reimbursement of 
charges for immunizations for himself/herself and each authorized 
dependent 12 years of age or over. The USAID contribution for authorized 
dependents under 12 years of age shall not exceed half of the cost of 
the examination up to a maximum share of $120 per individual plus 
reimbursement of charges for immunizations. The contractor must obtain 
the prior written approval of the Contracting Officer to receive any 
USAID obligations higher than these limits.
    (c) Health Room Privileges. Routine health room services may be 
available, subject to post policy and in accordance with the 
requirements of paragraph (a) of this clause, to U.S. citizen 
contractors and their authorized dependents (regardless of citizenship) 
at the post of duty. These services do not include hospitalization or 
predeparture examinations. The services normally include such 
medications as may be available, immunizations and preventive health 
measures, diagnostic examinations and advice, and home visits as 
medically indicated. Emergency medical treatment is provided to U.S. 
citizen contractor employees and dependents, whether or not they may 
have been granted access to routine health room services, on the same 
basis as it would be to any U.S. citizen in an emergency medical 
situation in the country.

 4. Workweek and Compensation (Pay Comparability Adjustments) (JUL 2007)

    (a) Workweek. The contractor's workweek shall not be less than 40 
hours, unless otherwise provided in the Contract Schedule, and shall 
coincide with the workweek for those employee of the Mission or the 
Cooperating Country agency most closely associated with the work of this 
contract. If the contract is for less than full time (40 hours weekly), 
the annual and sick leave earned shall be prorated (see the General 
Provision of this contract entitled Leave and Holidays).
    (b) Compensation (Pay Comparability) Adjustments. The PSC's 
compensation shall be adjusted to reflect the pay comparability 
adjustments, which are granted from time to time to U.S. direct-hire 
employees by Executive Order for the statutory pay systems (usually in 
January). Any adjustments authorized are subject to the availability of 
funds and shall not exceed that percentage stated in the Executive Order 
granting the adjustment. Further, the adjusted compensation may not 
exceed the annual ``USAID Contractor Salary Threshold (USAID CST)'', 
which is equivalent to the maximum rate for agencies without a certified 
SES performance appraisal system (or the equivalent hourly rate).

                    5. Leave and Holidays (APR 1997)

    (a) Vacation Leave. (1) The contractor shall earn vacation leave at 
the rate of 13 workdays per annum or 4 hours every 2 weeks. However, no 
vacation shall be earned if the tour of duty is less than 90 days.
    (2) Notwithstanding paragraph (a)(1) above, if the contractor has 
had previous PSC service (i.e., has served under other personal services 
contracts (PSCs) covered by Sec.

[[Page 106]]

636(a)(3) of the FAA), he/she shall earn vacation leave at the rate of 
either 6 hours every two weeks (10 hours for the final pay period of a 
calendar year) cumulative PSC service exceeding 3 years, or 8 hours 
every two weeks for cumulative PSC service exceeding 15 years. Former 
Civil Service, Foreign Service, or a Military Service experience is not 
creditable towards PSC service for annual leave purposes.
    (3) It is understood that vacation leave is provided under this 
contract primarily for the purposes of affording necessary rest and 
recreation during the tour of duty in the Cooperating Country. The 
Contractor in consultation with the USAID Mission shall develop a 
vacation leave schedule early in his/her tour of duty taking into 
consideration project requirements, employee preference and other 
factors. All vacation leave earned by the contractor must be used during 
his/her tour of duty. All vacation leave earned by the contractor but 
not taken by the end of his/her tour of duty will be forfeited unless 
the requirements of the activity precluded the employee from taking such 
leave and the Contracting Officer, with the endorsement of the Mission 
Director, approves one of the following as an alternative:
    (i) Taking leave during the concluding weeks of the employee's tour, 
or
    (ii) Lump-sum payment for leave not taken provided such leave does 
not exceed the number of days which can be earned by the employee during 
a twelve month period.
    (4) With the approval of the Mission Director, and if the 
circumstances warrant, a contractor may be granted advance vacation 
leave in excess in that earned, but in no case shall a contractor be 
granted advance vacation leave in excess of that which he/she will earn 
over the life of the contract. The contractor agrees to reimburse USAID 
for leave used in excess of the amount earned during the contractor's 
assignment under the contract.
    (b) Sick Leave. Sick leave is earned at a rate not to exceed 13 
work-days per annum or 4 hours every 2 weeks. Unused sick leave may be 
carried over under an extension of this contract for the same or similar 
services at the same Mission, but the contractor will not be compensated 
for unused sick leave at the completion of this contract. No leave my be 
carried over from one post to another.
    (c) Home Leave. (1) Home leave is leave earned for service abroad 
for use only in the United States, in the Commonwealth of Puerto Rico, 
or in the possessions of the United States.
    (2) A contractor who is a U.S. citizen or U.S. resident alien and 
has served as least 2 years overseas, as defined in paragraph (c)(4) 
below, under personal services contract in this Mission, and has not 
taken more than 30 workdays leave (vacation, sick, or leave without pay) 
in the United States, may be granted home leave of not more than 15 work 
days for each such year of service overseas; provided, that the 
contractor agrees to return overseas upon completion of home leave under 
an additional 2 year appointment, or for such shorter period of not less 
than 1 year of overseas service under the contract as the Mission 
Director may approve in advance. Home leave must be taken in the United 
States, the Commonwealth of Puerto Rico, or the possessions of the 
United States, and any days spent elsewhere will be charged to vacation 
leave or leave without pay.
    (3) Notwithstanding the requirement in paragraph (c)(2) above that 
the contractor must have served 2 years overseas under personal services 
contract with this Mission to be eligible for home leave, the contractor 
may be granted advance home leave subject to all of the following 
conditions:
    (i) Granting of leave home leave would in each case serve to advance 
the attainment of the objectives of this contract;
    (ii) The contractor has served a minimum of 18 months in the 
Cooperating Country on his/her current tour of duty under this contract; 
and
    (iii) The contractor agrees to return to the Cooperating Country to 
serve out the remainder of his/her current tour of duty and an 
additional 2 year appointment under this or subsequent contract, or such 
other additional appointment of not less than 1 year of overseas service 
as the Mission Director may approve.
    (4) The period of service overseas required under paragraph (c)(2), 
or paragraph (c)(3) above, shall include the actual days in orientation 
in the United States (less language training) and the actual days 
overseas beginning on the date of departure from the U.S. port of 
embarkation on international travel and continuing, inclusive of 
authorized delays enroute, to the date of arrival at the U.S. port of 
debarkation from international travel. Allowable vacation and sick leave 
taken while overseas, but not leave without pay, shall be included in 
the required period of service overseas. An amount equal to the number 
of days of vacation and sick leave taken in the United States, the 
Commonwealth of Puerto Rico, or the possessions of the United States 
will be added to the required period of service overseas.
    (5) Salary during the travel to and from the United States for home 
leave will be limited to the time required for travel by the most 
expeditious air route. The contractor will be responsible for 
reimbursing USAID for payments made during home leave, if, in spite of 
the undertaking of the new appointment, the contractor, except for 
reasons beyond his/her control as determined by the Contracting Officer, 
does not return overseas and complete the additional required service. 
Unused home leave is not reimbursable under this contract.

[[Page 107]]

    (6) To the extent deemed necessary by the Contracting Officer, a 
contractor in the United States on home leave may be authorized to spend 
not more than 5 days in work status for consultation at USAID/Washington 
before returning to post duty. Consultation at locations other than 
USAID/Washington as well as any time in excess of 5 days spent for 
consultation, must be approved by the Mission Director or the 
Contracting Officer.
    (d) Holidays. The contractor, while serving abroad, shall be 
entitled to all holidays granted by the Mission to U.S.-citizen direct-
hire employees.
    (e) Military Leave. Military leave of not more than 15 calendar days 
in any calendar year may be granted to a contractor who is a reservist 
of the Armed Forces, provided that military leave has been approved in 
advance by the Contracting Officer or the Mission Director. A copy of 
any such approval shall be part of the contract file.
    (f) Leave Without Pay. Leave without pay may be granted only with 
the written approval of the Contracting Officer or Mission Director.
    (g) Compensatory Time. Compensatory leave may be granted only with 
the written approval of the Contracting Officer or Mission Director in 
rare instances when it has been determined absolutely essential and used 
under those guidelines which apply to direct-hire employees.
    (h) Leave Records. The contractor shall maintain current leave 
records for himself/herself and make them available, as requested by the 
Mission Director or the Contracting Officer.

               6. Differential and Allowances (June 1990)

    (a) The following differential and allowances will be granted to the 
contractor and his/her authorized dependents to the same extent and on 
the same basis as they are granted to U.S. citizen direct-hire employees 
at the Mission by the Standardized Regulations (Government Civilians, 
Foreign Areas), as from time to time amended, except as noted to the 
contrary below:

            Applicable Reference to Standardized Regulations
------------------------------------------------------------------------
 
------------------------------------------------------------------------
(1) Post Differential........................  Chapter 500 and Tables in
                                                Chapter 900.
(2) Living Quarters Allowance................  Section 130.
(3) Temporary Lodging Allowance..............  Section 120.
(4) Post Allowance...........................  Section 220.
(5) Supplemental Post Allowance..............  Section 230.
(6) Payments During Evacuation...............  Section 600.
(7) Education Allowance......................  Section 270.
(8) Separate Maintenance Allowance...........  Section 260.
(9) Danger Pay Allowance.....................  Section 650.
(10) Education Travel........................  Section 280.
------------------------------------------------------------------------

    (1) Post Differential. Post differential is an additional 
compensation for service at places in foreign areas where conditions of 
environment differ substantially from conditions of environment in the 
continental United States and warrant additional compensation as a 
recruitment and retention incentive. In areas where post differential is 
paid to USAID direct-hire employees, post differential not to exceed the 
percentage of salary as is provided such USAID employees in accordance 
with the Standardized Regulations (Government Civilians, Foreign Areas) 
Chapter 500 (except the limitation contained in Section 552, ``Ceiling 
on Payment'') Tables--Chapter 900, as from time to time amended, will be 
reimbursable hereunder for employees in respect to amounts earned during 
the time such employees actually spend overseas on work under this 
contract. When such post differential is provided to the contractor, it 
shall be payable beginning on the date of arrival at the post of 
assignment and continue, including periods away from post on official 
business, until the close of business on the day of departure from post 
of assignment enroute to the United States. Sick or vacation leave taken 
at or away from the post of assignment will not interrupt the continuity 
of the assignment or require a discontinuance of such post differential 
payments, provided such leave is not taken within the United States or 
the territories of the United States. Post differential will not be 
payable while the employee is away from his/her post of assignment for 
purposes of home leave. Short-term employees shall be entitled to pose 
differential beginning with the forty-third (43rd) day at post.
    (2) Living Quarters Allowance. Living quarters allowance is an 
allowance granted to reimburse an employee for substantially all of his/
her cost for either temporary or residence quarters whenever Government-
owned or Government-rented quarters are not provided to him/her at his/
her post without

[[Page 108]]

charge. Such costs are those incurred for temporary lodging (temporary 
lodging allowance) or one unit of residence quarters (living quarters 
allowance) and include rent, plus any costs not included therein for 
heat, light, fuel, gas, electricity and water. The temporary lodging 
allowance and the living quarters allowance are never both payable to an 
employee for the same period of time. The contractor will receive living 
quarters allowance for payment of rent and utilities if such facilities 
are not supplied. Such allowance shall not exceed the amount paid USAID 
employees of equivalent rank in the Cooperating Country, in accordance 
with either the Standardized Regulations (Government Civilians, Foreign 
Areas), Chapter 130, as from time to time amended, or other rates 
approved by the Mission Director. Subject to the written approval of the 
Mission Director, short-term employees may be paid per diem (in lieu of 
living quarters allowance) at rates prescribed by the Federal Travel 
Regulations, as from time to time amended, during the time such short-
term employees spend at posts of duty in the Cooperating Country under 
this contract. In authorizing such per diem rates, the Mission Director 
shall consider the particular circumstances involved with respect to 
each such short-term employee including the extent to which meals and/or 
lodging may be made available without charge or at nominal cost by an 
agency of the United States Government or of the Cooperating Government, 
and similar factors.
    (3) Temporary Lodging Allowance. Temporary lodging allowance is a 
quarters allowance granted to an employee for the reasonable cost of 
temporary quarters incurred by the employee and his/her family for a 
period not in excess of (i) three months after first arrival at a new 
post in a foreign area or a period ending with the occupation of 
residence (permanent) quarters, if earlier, and (ii) one month 
immediately preceding final departure from the post subsequent to the 
necessary vacating of residence quarters. The contractor will receive 
temporary lodging allowance for himself/herself and authorized 
dependents, in lieu of living quarters allowance, not to exceed the 
amount set forth in the Standardized Regulations (Government Civilians, 
Foreign Areas), Chapter 120, as from time to time amended.
    (4) Post Allowance. Post allowance is a cost-of-living allowance 
granted to an employee officially stationed at a post where the cost of 
living, exclusive of quarters cost, is substantially higher than in 
Washington, D.C. The contractor will receive post allowance payments not 
to exceed those paid USAID employees in the Cooperating Country, in 
accordance with the Standardized Regulations (Government Civilians, 
Foreign Areas), Chapter 220, as from time to time amended.
    (5) Supplemental Post Allowance. Supplemental post allowance is a 
form of post allowance granted to an employee at his/her post when it is 
determined that assistance is necessary to defray extraordinary 
subsistence costs. The contractor will receive supplemental post 
allowance payments not to exceed the amount set forth in the 
Standardized Regulations (Government Civilians, Foreign Areas), Chapter 
230, as from time to time amended.
    (6) Payments During Evacuation. The Standardized Regulations 
(Government Civilians, Foreign Areas) provide the authority for 
efficient, orderly, and equitable procedure for the payment of 
compensation, post differential and allowances in the event of an 
emergency evacuation of employees or their dependents, or both, from 
duty stations for military or other reasons or because of imminent 
danger to their lives. If evacuation has been authorized by the Mission 
Director, the contractor will receive payments during evacuation for 
himself/herself and authorized dependents evacuated from their post of 
assignment in accordance with the Standardized Regulations (Government 
Civilians, Foreign Areas), Chapter 600, and the Federal Travel 
Regulations, as from time to time amended.
    (7) Educational Allowance. Educational allowance is an allowance to 
assist the contractor in meeting the extraordinary and necessary 
expenses, not otherwise compensated for, incurred by reason of his/her 
service in a foreign area in providing adequate elementary and secondary 
education for his/her children. The contractor will receive educational 
allowance payments for his/her dependent children in amounts not to 
exceed those set forth in Standardized Regulations (Government 
Civilians, Foreign Areas), Chapter 270, as from time to time amended.
    (8) Separate Maintenance Allowance. Separate maintenance allowance 
is an allowance to assist an employee who is compelled by reason of 
dangerous, notably unhealthful, or excessively adverse living conditions 
at his/her post of assignment in a foreign area, or for the convenience 
of the Government, to meet the additional expense of maintaining his/her 
dependents elsewhere than at such post. The contractor will receive 
separate maintenance allowance payments not to exceed that made to USAID 
employees in accordance with the Standardized Regulations (Government 
Civilians, Foreign Areas), Chapter 260, as from time to time amended.
    (9) Danger Pay Allowance. Danger pay allowance is an allowance to 
provide additional compensation above basic compensation to employees in 
foreign areas where civil insurrection, civil war, terrorism or wartime 
conditions threaten physical harm or imminent danger to the health or 
well-

[[Page 109]]

being of the employee. The danger pay allowance is in lieu of that part 
of the post differential which is attributable to political violence. 
Consequently, the post differential may be reduced while danger pay is 
in effect to avoid dual crediting for political violence. The contractor 
shall be allowed danger pay allowance not to exceed that paid USAID 
employees in the Cooperating Country, in accordance with the 
Standardized Regulations (Government Civilians, Foreign Areas), Chapter 
650, as from time to time amended.
    (10) Educational Travel. Educational travel is travel to and from a 
school in the United States for secondary education (in lieu of an 
educational allowance) and for college education. The contractor will 
receive educational travel payments for his/her dependent children 
provided such payment does not exceed that which would be payable in 
accordance with the Standardized Regulations (Government Civilians, 
Foreign Areas), Chapter 280, as from time to time amended. Educational 
travel shall not be authorized for contractors whose assignment is less 
than two years.
    (b) The allowances provided in paragraphs (a) (1) through (10) of 
this provision shall be paid to the contractor in dollars or in the 
currency of the Cooperating Country in accordance with practice 
prevailing at the Mission, or the Mission Director may direct that the 
contractor be paid a per diem in lieu thereof as prescribed by the 
Standardized Regulations (Government Civilians, Foreign Areas), as from 
time to time amended.

7. Social Security, Federal Income Tax, and Foreign Earned Income (June 
                                  1990)

    (a) Since the contractor is an employee, F.I.C.A. contributions and 
U.S. Federal Income Tax withholding shall be deducted in accordance with 
regulations and rulings of the Social Security Administration and the 
U.S. Internal Revenue Service, respectively.
    (b) As an employee, the contractor is not eligible for the ``foreign 
earned income'' exclusion under the IRS Regulations (see 26 CFR 1.911-
3(c)(3)).

                  8. Advance of Dollar Funds (APR 1997)

    If requested by the contractor and authorized in writing by the 
Contracting Officer, USAID will arrange for an advance of funds to 
defray the initial cost of travel, travel allowances, authorized 
precontract expenses, and shipment of personal property. The advance 
shall be granted on the same basis as to a USAID U.S.-citizen direct-
hire employee in accordance with USAID Handbook 22, Chapter 4 or 
superseding ADS Chapter.

                         9. Insurance (APR 1997)

    (a) Worker's Compensation Benefits. The contractor shall be provided 
worker's compensation benefits in accordance with the Federal Employees' 
Compensation Act.
    (b) Health and Life Insurance. (1) The contractor shall be provided 
a maximum contribution of up to 50% against the actual costs of the 
contractor's annual health insurance costs, provided that such costs may 
not exceed the maximum U.S. Government contribution for direct-hire 
personnel as announced annually by the Office of Personnel Management.
    (2) The contractor shall be provided a contribution of up to 50% 
against the actual costs of annual life insurance not to exceed $500.00 
per year.
    (3) Retired U.S. Government employees shall not be paid additional 
contributions for health or life insurance under their contracts. The 
Government will normally have already paid its contribution for the 
retiree unless the employee can prove to the satisfaction of the 
Contracting Officer that his/her health and life insurance does not 
provide or specifically excludes coverage overseas. In such case, the 
contractor would be eligible for contributions under paragraphs (b) (1) 
or (2) as appropriate.
    (4) Proof of health and life insurance coverage shall be submitted 
to the Contracting Officer before any contribution is paid. On 
assignments of less than one year, costs for health and life insurance 
shall be prorated and paid accordingly.
    (5) A contractor who is a spouse of a current or retired Civil 
Service, Foreign Service, or Military Service member and who is covered 
by their spouse's Government health or life insurance policy is 
ineligible for the contribution under paragraphs (b)(1) or (b)(2) of 
this provision.
    (c) Insurance on Private Automobiles. If the contractor or his/her 
dependents transport, or cause to be transported, privately owned 
automobile(s) to the Cooperating Country, or any of them purchase an 
automobile within the Cooperating Country, the contractor agrees to 
ensure that all such automobile(s) during such ownership within the 
Cooperating Country will be covered by a current, i.e., not in arrears, 
insurance policy issued by a reliable company providing the following 
minimum coverage, or such other minimum coverage as may be set by the 
Mission Director, payable in U.S. dollars or its equivalent in the 
currency of the Cooperating Country: injury to persons, $10,000/$20,000; 
property damage, $5,000. The contractor further agrees to deliver, or 
cause to be delivered to the Mission Director, the insurance policies 
required by this clause or satisfactory proof of the existence thereof, 
before such automobile(s) operated within the Cooperating Country. The 
premium costs for such insurance shall not be a reimbursable cost under 
this contract.

[[Page 110]]

           10. Travel and Transportation Expenses (July 1993)

    (a) General. (1) USAID/Washington Office of Administrative Services, 
or such other office as may be designated by that office, may furnish 
Transportation Requests (TR's) to the contractor for transportation 
authorized by this contract originating in the United States, and the 
executive or administrative officer at the Mission may furnish TR's for 
such authorized transportation which is payable in local currency or is 
to originate overseas. When transportation is not provided by the 
Government-issued TR, the contractor shall procure his/her own 
transportation, the costs of which will be reimbursed in accordance with 
the terms of this contract.
    (2) The contractor will be reimbursed for reasonable, allocable and 
allowable travel and transportation expenses incurred under and for the 
performance of this contract. Determination of reasonableness, 
allocability and allowability will be made by the Contracting Officer in 
accordance with USAID's established policies and procedures for USAID 
direct-hire employees, and the particular needs of the activity being 
implemented by this contract. The following paragraphs provide specific 
guidance and limitations on particular items of cost.
    (b) U.S. Travel and Transportation. The contractor shall be 
reimbursed for actual transportation costs and travel allowances in the 
United States as authorized in the Contract Schedule or approved in 
advance by the Contracting Officer or the Mission Director. 
Transportation costs and travel allowances shall not be reimbursed in 
any amount greater than the cost of, and time required for, economy-
class commercially scheduled air travel by the most expeditious route 
except as otherwise provided in paragraph (g) of this provision unless 
economy air travel is not available and the contractor certifies to this 
in his/her voucher or other documents submitted for reimbursement.
    (c) International Travel. For travel to and from post of assignment, 
the contractor shall be reimbursed for travel costs and travel 
allowances from place of residence in the United States (or other 
location provided that the cost of such travel does not exceed the cost 
of the travel from the contractor's residence in the United States) to 
the post of duty in the Cooperating Country and return to place of 
residence in the United States (or other location provided that the cost 
of such travel does not exceed the cost of travel from the post of duty 
in the Cooperating Country to the contractor's residence) upon 
completion of services by the individual. Reimbursement for travel will 
be in accordance with USAID's established policies and procedures for 
its direct-hire employees and the provisions of this contract, and will 
be limited to the cost of travel by the most direct and expeditious 
route. If the contract is for longer than one year and the contractor 
does not complete one full year at post of duty (except for reasons 
beyond his/her control), the costs of going to and from the post of duty 
for the contractor and his/her dependents are not reimbursable 
hereunder. If the contractor serves more than one year but less than the 
required service in the Cooperating Country (except for reasons beyond 
his/her control) the costs of going to the post of duty are reimbursable 
hereunder but the costs of going from post of duty to the contractor's 
permanent, legal place of residence at the time he or she was employed 
for work under this contract, or other location as approved by the 
Contracting Officer, are not reimbursable under this contract for the 
contractor and his/her dependents. When travel is by economy class 
accommodations, the contractor will be reimbursed for the cost of 
transporting up to 10 kilograms/22 pounds of accompanied personal 
baggage per traveler in addition to that regularly allowed with the 
economy ticket provided that the total number of pounds of baggage does 
not exceed that regularly allowed for first class travelers. Travel 
allowances for travelers shall not be in excess of the rates authorized 
in the Standardized Regulations (Government Civilians, Foreign Areas)-
hereinafter referred to as the Standardized Regulations--as from time to 
time amended, for not more than the travel time required by scheduled 
commercial air carrier using the most expeditious route. One stopover 
enroute for a period of not to exceed 24 hours is allowable when the 
traveler uses economy class accommodations for a trip of 14 hours or 
more of scheduled duration. Such stopover shall not be authorized when 
travel is by indirect route or is delayed for the convenience of the 
traveler. Per diem during such stopover shall be paid in accordance with 
the Federal Travel Regulations as from time to time amended.
    (d) Local Travel. Reimbursement for local travel in connection with 
duties directly referable to the contract shall not be in excess of the 
rates established by the Mission Director for the travel costs of 
travelers in the Cooperating Country. In the absence of such established 
rates the contractor shall be reimbursed for actual travel costs in the 
Cooperating Country or the Mission, including travel allowances at rates 
not in excess of those prescribed by the Standardized Regulations.
    (e) Indirect Travel for Personal Convenience. When travel is 
performed by an indirect route for the personal convenience of the 
traveler, the allowable costs of such travel will be computed on the 
basis of the cost of allowable air fare via the direct usually traveled 
route. If such costs include fares for air or ocean travel by foreign 
flag carriers, approval for indirect travel by such foreign flag

[[Page 111]]

carriers must be obtained from the Contracting Officer or the Mission 
Director before such travel is undertaken, otherwise only that portion 
of travel accomplished by the United States-flag carriers will be 
reimbursable within the above limitation of allowable costs.
    (f) Limitation on Travel by Dependents. Travel costs and allowances 
will be allowed for authorized dependents of the contractor and such 
costs shall be reimbursed for travel from place of abode to assigned 
station in the Cooperating Country and returned, only if the dependent 
remains in the Cooperating Country for at least 9 months or one-half of 
the required tour of duty of the contractor, whichever is greater, 
except as otherwise authorized hereunder for education, medical or 
emergency visitation travel. If the dependent is eligible for 
educational travel pursuant to the ``Differential and Allowances'' 
clause of this contract, time spent away from post resulting from 
educational travel will be counted as time at post.
    (g) Delays Enroute. The contractor may be granted reasonable delays 
enroute while in travel status when such delays are caused by events 
beyond the control of the contractor and are not due to circuitous 
routine. It is understood that if delay is caused by physical 
incapacitation, he/she shall be eligible for such sick leave as provided 
under the ``Leave and Holidays'' clause of this contract.
    (h) Travel by Privately Owned Automobile (POV). If travel by POV is 
authorized in the contract schedule or approved by the Contracting 
Officer, the contractor shall be reimbursed for the cost of travel 
performed in his/her POV at a rate not to exceed that authorized in the 
Federal Travel Regulations plus authorized per diem for the employee and 
for each of the authorized dependents traveling in the POV, if the POV 
is being driven to or from the Cooperating Country as authorized under 
the contract, provided that the total cost of the mileage and the per 
diem paid to all authorized travelers shall not exceed the total 
constructive cost of fare and normal per diem by all authorized 
travelers by surface common carrier or authorized air fare, whichever is 
less.
    (i) Emergency and Irregular Travel and Transportation. Emergency 
transportation costs and travel allowances while enroute, as provided in 
this section, will be reimbursed not to exceed amounts authorized by the 
Foreign Service Travel Regulations for USAID-direct hire employees in 
like circumstances under the following conditions:
    (1) The costs of going from post of duty in the Cooperating Country 
to the employee's permanent, legal place of residence at the time he or 
she was employed for work under this contract or other location for 
contractor employees and dependents and returning to the post of duty, 
subject to the prior written approval of the Mission Director that such 
travel is necessary for one of the following reasons.
    (i) Need for medical care beyond that available within the area to 
which the employee is assigned, or serious effect on physical or mental 
health if residence is continued at assigned post of duty. The Mission 
Director may authorize a medical attendant to accompany the employee at 
contract expense if, based on medical opinion, such an attendant is 
necessary.
    (ii) Death, or serious illness or injury of a member of the 
immediate family of the employee or the immediate family of the 
employee's spouse.
    (2) When, for any reason, the Mission Director determines it is 
necessary to evacuate the contractor or contractor's dependents, the 
contractor will be reimbursed for travel and transportation expenses and 
travel allowance while enroute, for the cost of the individuals going 
from post of duty in the Cooperating Country to the employee's 
permanent, legal place of residence at the time he or she was employed 
for work under this contract or other approved location. The return of 
such employees and dependents may also be authorized by the Mission 
Director when, in his/her discretion, he/she determines it is prudent to 
do so.
    (3) The Mission Director may also authorize emergency or irregular 
travel and transportation in other situations, when in his/her opinion, 
the circumstances warrant such action. The authorization shall include 
the kind of leave to be used and appropriate restrictions as to time 
away from post, transportation of personal and household effects, etc.
    (j) Home Leave Travel. To the extend that home leave has been 
authorized as provided in the ``Leave and Holidays'' clause of this 
contract, the cost of travel for home leave is reimbursable for travel 
costs and travel allowances of travelers from the post of duty in the 
Cooperating Country to place of residence in the United States (or other 
location provided that the cost of such travel does not exceed the cost 
of travel to the contractor's residence in the United States) and return 
to the post of duty in the Cooperating Country. Reimbursement for travel 
will be in accordance with the Uniform State/USAID/USIA Foreign Service 
Travel Regulations, as from time to time amended, and will be limited to 
the cost of travel by the most direct and expeditious route. Travel 
allowances for travelers shall be in accordance with the rates 
authorized in the Standardized Regulations as from time to time amended, 
for not more than the travel time required by scheduled commercial air 
carrier using the most expeditious route using economy class. One 
stopover enroute for a period of not to exceed 24 hours is allowable 
when the traveler uses economy class accommodations for a

[[Page 112]]

trip of 14 hours or more of scheduled duration. Such stopover shall not 
be authorized when travel is by indirect route or is delayed for the 
convenience of the traveler or the traveler uses other than economy 
class. Per diem during such stopover shall be paid in accordance with 
the Standardized Regulations.
    (k) Rest and Recuperations Travel. If approved in writing by the 
Mission Director, the contractor and his/her dependents shall be allowed 
rest and recuperation travel on the same basis as authorized USAID 
direct-hire Mission employees and their dependents.
    (l) Transportation of Motor Vehicles, Personal Effects and Household 
Goods. (1) Transportation costs will be paid on the same basis as for 
USAID direct-hire employees serving the same length tour of duty, as 
authorized in the schedule. Transportation, including packing and 
crating costs, will be paid for shipping from the point of origin in the 
United States (or other location as approved by the Contracting Officer) 
to post of duty in the Cooperating Country and return to point of origin 
in the United States (or other location as approved by the Contracting 
Officer) of one privately-owned vehicle for the contractor, personal 
effects of the contractor and authorized dependents, and household goods 
of the contractor not to exceed the limitations in effect for such 
shipments for USAID direct-hire employees in accordance with the Foreign 
Service Travel Regulations in effect at the time shipment is made. These 
limitations may be obtained from the Contracting Officer.
    (2) The cost of transporting motor vehicles and household goods 
shall not exceed the cost of packing, crating, and transportation by 
surface common carrier. In the event that the carrier does not require 
boxing or crating of motor vehicles for shipment to the Cooperating 
Country, the cost of boxing or crating is not reimbursable. The 
transportation of a privately owned motor vehicle for a contractor may 
be authorized as a replacement of the last such motor vehicle shipped 
under this contract for such contractor when the Mission Director 
determines, in advance, and so notifies the contractor in writing, that 
the replacement is necessary for reasons not due to the negligence or 
malfeasance of the contractor. The determination shall be made under the 
same rules and regulations that apply to authorized Mission U.S. citizen 
direct-hire employees.
    (m) Unaccompanied Baggage. Unaccompanied baggage is considered to be 
those personal belongings needed by the traveler immediately upon 
arrival of the contractor and dependents, and consideration should be 
given to advance shipments of unaccompanied baggage. The contractor will 
be reimbursed for costs of shipment of unaccompanied baggage (in 
addition to the weight allowance for household effects) not to exceed 
the limitations in effect for USAID direct-hire employees in accordance 
with the Foreign Service Travel Regulations as in effect when shipment 
is made. These limitations are available from the Contracting Officer. 
This unaccompanied baggage may be shipped as air freight by the most 
direct route between authorized points of origin and destination 
regardless of the modes of travel used. This provision is applicable to 
home leave travel when authorized by the terms of this contract.
    (n) International Ocean Transportation--(1)(i) Transportation of 
things. Where U.S. flag vessels are not available, or their use would 
result in a significant delay, the contractor may obtain a release from 
the requirement to use U.S. flag vessels from the Transportation 
Division, Office of Acquisition and Assistance, U.S. Agency for 
International Development, Washington, D.C. 20523-1419, or the Mission 
Director, as appropriate, giving the basis for the request.
    (ii) Transportation of persons. Where U.S. flag vessels are not 
available, or their use would result in a significant delay, the 
contractor may obtain a release from the requirement to use U.S. flag 
vessels from the Contracting Officer or the Mission Director, as 
appropriate.
    (2) Transportation of foreign-made vehicles. Reimbursement of the 
costs of transporting a foreign-made motor vehicle will be made in 
accordance with the provisions of the Foreign Service Travel 
Regulations.
    (3) Reduced rates on U.S.-flag carriers are in effect for shipments 
of household goods and personal effects of USAID contractors between 
certain locations. These reduced rates are available provided the 
shipper furnishes to the carrier at the time of the issuance of the Bill 
of Lading documentary evidence that the shipment is for the account of 
USAID. The Contracting Officer will, on request, furnish to the 
contractor current information concerning the availability of a reduced 
rate with respect to any proposed shipment. The contractor will not be 
reimbursed for shipments of household goods or personal effects in 
amounts in excess of the reduced rates which are available in accordance 
with the foregoing.
    (o) Storage of household effects. The cost of storage charges 
(including packing, crating, and drayage costs) in the U.S. of household 
goods of the contractor will be permitted in lieu of transportation of 
all or any part of such goods to the Cooperating Country under paragraph 
(l) above provided that the total amount of effects shipped to the 
Cooperating Country or stored in the U.S. shall not exceed the amount 
authorized for USAID direct-hire employees under the Uniform Foreign 
Service Travel Regulations. These amounts are available from the 
Contracting Officer.

[[Page 113]]

                         11. Payment (Aug 1996)

    (a) Once each month, or at more frequent intervals, if approved by 
the paying office indicated on the Cover Page, the contractor may submit 
to such office form SF 1034 ``Public Voucher for Purchases and Services 
Other Than Personal'' (original) and SF 1034-A (three copies), or 
whatever other form is locally required or accepted. Each voucher shall 
be identified by the USAID contract number and properly executed in the 
amount of dollars claimed during the period covered. The voucher forms 
shall be supported by:
    (1) The contractor's detailed invoice, in original and two copies, 
indicating for each amount claimed the paragraph of the contract under 
which payment is to be made, supported when applicable as follows:
    (i) For compensation--a statement showing period covered, days 
worked, and days when contractor was in authorized travel, leave, or 
stopover status for which compensation is claimed. All claims for 
compensation will be accompanied by, or will incorporate, a 
certification signed by the Project Officer covering days or hours 
worked, or authorized travel or leave time for which compensation is 
claimed.
    (ii) For travel and transportation--a statement of itinerary with 
attached carrier's receipt and/or passenger's coupons, as appropriate.
    (iii) For reimbursable expenses--an itemized statement supported by 
original receipts.
    (2) The first voucher submitted shall account for, and liquidate the 
unexpended balance of any funds advanced to the contractor.
    (b) A final voucher shall be submitted by the contractor promptly 
following completion of the duties under this contract but in no event 
later than 120 days (or such longer period as the Contracting Officer 
may in his/her discretion approve in writing) from the date of such 
completion. The contractor's claim, which includes his/her final 
settlement of compensation, shall not be paid until after the 
performance of the duties required under the terms of this contract has 
been approved by USAID. On receipt and approval of the voucher 
designated by the contractor as the ``final voucher'' submitted on Form 
SF 1034 (original) and SF 1034-A (three copies), together with a refund 
check for the balance remaining on hand of any funds which may have been 
advanced to the contractor, the Government shall pay any amounts due and 
owing the contractor.
    (c) If approved by the paying office time and attendance may be 
submitted for PSCs in the same manner as is approved for direct-hire 
personnel.

       12. Conversion of U.S. Dollars to Local Currency (Dec 1985)

    Upon arrival in the Cooperating Country, and from time to time as 
appropriate, the contractor shall consult with the Mission Director or 
his/her authorized representative who shall provide, in writing, the 
policy the contractor shall follow in the conversion of U.S. dollars to 
local currency. This may include, but not be limited to the conversion 
of said currency through the cognizant U.S. Disbursing Officer, or 
Mission Controller, as appropriate.

              13. Post of Assignment Privileges (July 1993)

    Privileges such as the use of APO, PX's, commissaries and officers 
clubs are established at posts abroad under agreements between the U.S. 
and host governments. These facilities are intended for and usually 
limited to members of the official U.S. establishment including the 
Embassy, USAID Mission, U.S. Information Service and the Military. 
Normally, the agreements do not permit these facilities to be made 
available to non-official Americans. However, in those cases where 
facilities are open to non-official Americans, they may be used.

                  14. Security Requirements (June 1990)

    (a) This entire provision shall apply to the extent that this 
contract involves access to classified information (``Confidential'', 
``Secret'', or ``Top Secret'') or access to administratively controlled 
information (``Limited Official Use''). Contractors that are not U.S. 
citizens shall not have access to classified or administratively 
controlled information.
    (b) The contractor (1) shall be responsible for safeguarding all 
classified or administratively controlled information in accordance with 
appropriate instructions furnished by the USAID Office of Security (IG/
SEC), as referenced in paragraph (d) of this provision and shall not 
supply, disclose, or otherwise permit access to classified information 
or administratively controlled information to any unauthorized person; 
(2) shall not make or permit to be made any reproductions of classified 
information or administratively controlled information except with the 
prior written authorization of the Contracting Officer or Mission 
Director; (3) shall submit to the Contracting Officer, at such times as 
the Contracting Officer may direct, an accounting of all reproductions 
of classified or administratively controlled information; and (4) shall 
not incorporate in any other project any matter which will disclose 
classified and/or administratively controlled information except with 
the prior written authorization of the Contracting Officer.
    (c) The contractor shall follow the procedures for classifying, 
marking, handling, transmitting, disseminating, storing, and destroying 
official material in accordance with

[[Page 114]]

the regulations in the Foreign Affairs Manual, Chapter 5 (5 FAM 900), a 
copy of which will be furnished by the Contracting Officer or Mission 
Director.
    (d) The contractor agrees to submit immediately to the Mission 
Director or Contracting Officer a complete detailed report, 
appropriately classified, of any information which the contractor may 
have concerning existing or threatened espionage, sabotage, or 
subversive activity.
    (e) The Government agrees that, when necessary, it shall indicate by 
security classification or administratively controlled designation, the 
degree of importance to the national defense of information to be 
furnished by the contractor to the Government or by the Government to 
the contractor, and the Government shall give written notice of such 
security classification or administratively controlled designation to 
the contractor and of any subsequent changes thereof. The contractor is 
authorized to rely on any letter or other written instrument signed by 
the Contracting Officer changing a security classification or 
administratively controlled designation of information.
    (f) The contractor agrees to certify after completion of his/her 
assignment under this contract that he/she has surrendered or disposed 
of all classified and/or administratively controlled information in his/
her custody in accordance with applicable security instructions.

             15. Contractor-Mission Relationships (Dec 1985)

    (a) The contractor acknowledges that this contract is an important 
part of the U.S. Foreign Assistance Program and agrees that his/her 
duties will be carried out in such a manner as to be fully commensurate 
with the responsibilities which this entails.
    (b) While in the Cooperating Country, the contractor is expected to 
show respect for the conventions, customs, and institutions of the 
Cooperating Country and not interfere in its political affairs.
    (c) If the contractor's conduct is not in accordance with paragraph 
(b) of this provision, the contract may be terminated under General 
Provision 16 of this contract. The Contractor recognizes the right of 
the U.S. Ambassador to direct his/her immediate removal from any country 
when, in the discretion of the Ambassador, the interests of the United 
States so require.
    (d) The Mission Director is the chief representative of USAID in the 
Cooperating Country. In this capacity, he/she is responsible for the 
total USAID Program in the Cooperating Country including certain 
administrative responsibilities set forth in this contract and for 
advising USAID regarding the performance of the work under the contract 
and its effect on the U.S. Foreign Assistance Program. The contractor 
will be responsible for performing his/her duties in accordance with the 
statement of duties called for by the contract. However, he/she shall be 
under the general policy guidance of the Mission Director, and shall 
keep the Mission Director or his/her designated representative currently 
informed of the progress of the work under this contract.

                       16. Termination (Nov 1989)

    (This is an approved deviation to be used in place of the clause 
specified in FAR 52.249-12.)
    (a) The Government may terminate performance of work under this 
contract in whole or, from time to time, in part:
    (1) For cause, which may be effected immediately after establishing 
the facts warranting the termination, by giving written notice and a 
statement of reasons to the contractor in the event (i) the Contractor 
commits a breach or violation of any obligations herein contained, (ii) 
a fraud was committed in obtaining this contract, or (iii) the 
contractor is guilty (as determined by USAID) of misconduct in the 
Cooperating Country. Upon such a termination, the contractor's right to 
compensation shall cease when the period specified in such notice 
expires or the last day on which the contractor performs services 
hereunder, whichever is earlier. No costs of any kind incurred by the 
contractor after the date such notice is delivered shall be reimbursed 
hereunder except the cost of return transportation (not including travel 
allowances), if approved by the Contracting Officer. If any costs 
relating to the period subsequent to such date have been paid by USAID, 
the contractor shall promptly refund to USAID any such prepayment as 
directed by the Contracting Officer.
    (2) For the convenience of USAID, by giving not less than 15 
calendar days advance written notice to the contractor. Upon such a 
termination, contractor's right to compensation shall cease when the 
period specified in such notice expires except that the contractor shall 
be entitled to any unused vacation leave, return transportation costs 
and travel allowances and transportation of unaccompanied baggage costs 
at the rate specified in the contract and subject to the limitations 
which apply to authorized travel status.
    (3) For the convenience of USAID, when the contractor is unable to 
complete performance of his/her services under the contract by reason of 
sickness or physical or emotional incapacity based upon a certification 
of such circumstances by a duly qualified doctor of medicine approved by 
the Mission. The contract shall be deemed terminated upon delivery to 
the Contractor of a termination notice. Upon such a termination, the 
contractor shall not be entitled to compensation except to the extent of 
any unused vacation or sick leave but shall be

[[Page 115]]

entitled to return transportation, travel allowances, and unaccompanied 
baggage costs at rates specified in the contract and subject to the 
limitations which apply to authorized travel status.
    (b) The contractor, with the written consent of the Contracting 
Officer, may terminate this contract upon at least 15 days' written 
notice to the Contracting Officer.

                  17. Release of Information (Dec 1985)

    All rights in data and reports shall become the property of the U.S. 
Government. All information gathered under this contract by the 
Contractor and all reports and recommendations hereunder shall be 
treated as confidential by the Contractor and shall not, without the 
prior written approval of the Contracting Officer, be made available to 
any person, party, or government, other than USAID, except as otherwise 
expressly provided in this contract.

                         18. Notices (Dec 1985)

    Any notice, given by any of the parties hereunder, shall be 
sufficient only if in writing and delivered in person or sent by 
telegraph, telegram, registered, or regular mail as follows:
    To USAID: Administrator, U.S. Agency for International Development, 
Washington, D.C. 20523-0001, Attention: Contracting Officer.
    (name of the cognizant Contracting Officer with a copy to the 
appropriate Mission Director).
    To Contractor:
    At his/her post of duty while in the Cooperating Country and at the 
Contractor's address shown on the Cover Page of this contract or to such 
other address as either of such parties shall designate by notice given 
as herein required. Notices hereunder shall be effective in accordance 
with this clause or on the effective date of the notice, whichever is 
later.

                         19. Reports (June 1987)

    (a) The Contractor shall prepare and submit 2 copies of each 
technical report required by the schedule of this contract to the Bureau 
for Program and Policy Coordination, Center for Development Information 
and Evaluation, Development Information Division (PPC/CDIE/DI). All 
documents should be mailed to:
    PPC/CDIE/DI, Acquisitions, Room 209, SA-18, U.S. Agency for 
International Development, Washington, D.C. 20523-1802.
    The title page of all reports forwarded to PPC/CDIE/DI pursuant to 
this paragraph shall include a descriptive title, the author's name(s), 
contract number, project number and title, contractor's name, name of 
the USAID project office, and the publication or insurance date of the 
report.
    (b) When preparing reports, the contractor shall refrain from using 
elaborate art work, multicolor printing and expensive paper/binding, 
unless it is specifically authorized in the Contract Schedule. Wherever 
possible, pages should be printed on both sides using single spaced 
type.

                 20. Use of Pouch Facilities (July 1993)

    (a) Use of diplomatic pouch is controlled by the Department of 
State. The Department of State has authorized the use of pouch 
facilities for USAID contractors and their employees as a general 
policy, as detailed in paragraphs (a)(1) through (a)(6) of this 
provision. However, the final decision regarding use of pouch facilities 
rests with the Embassy or USAID Mission. In consideration of the use of 
pouch facilities as hereinafter stated, the Contractor agrees to 
indemnify and hold harmless the Department of State and USAID for loss 
or damage occurring in pouch transmission.
    (1) Contractors are authorized use of the pouch for transmission and 
receipt of up to a maximum of 0.90 kilogram/2 pounds per shipment of 
correspondence and documents needed in the administration of foreign 
assistance programs.
    (2) U.S. citizen contractors are authorized use of the pouch for 
personal mail up to a maximum of 0.45 kilogram/one pound per shipment 
(but see (a)(3) below). Non-U.S. citizen Contractors are not permitted 
use of the pouch for personal mail except to the extent that such use 
may be authorized by the Chief of Mission.
    (3) Merchandise, parcels, magazines, or newspapers are not 
considered to be personal mail for purpose of this clause, and are not 
authorized to be sent or received by pouch.
    (4) Official and personal mail under paragraphs (a) (1) and (2) of 
this provision, sent by pouch, should be addressed as follows:
    Individual's Name (C), U.S. Agency for International Development, 
Washington, D.C. 20523-0001.
    (5) Mail sent via the diplomatic pouch may not be in violation of 
U.S. Postal laws and may not contain material ineligible for pouch 
transmission.
    (6) Use of military postal facilities (APO/FPO) is authorized to 
U.S. contractors on the same basis as approved for direct-hire employees 
at the USAID Mission. Posts having access to APO/FPO facilities and 
using such for diplomatic pouch dispatch, may, however, accept official 
and personal mail for the pouch provided, of course, adequate postage is 
affixed when onward transmission (mail to other than USAID/W) through 
U.S. postal channels is required.
    (b) The contractor shall be responsible for compliance with these 
guidelines and limitations on use of pouch facilities.
    (c) Specific additional guidance on use of pouch facilities in 
accordance with this

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clause is available from the Post Communication Center at the Embassy or 
USAID Mission.

                    21. Biographical Data (June 1990)

    (a) The contractor agrees to furnish biographical information to the 
Contracting Officer on forms (SF 171 and 171As) provided for that 
purpose.
    (b) Emergency locator information. The contractor agrees to provide 
the following information to the Mission Administrative Officer on 
arrival in the host country regarding himself/herself and dependents:
    (1) Contractor's full name, home address, and telephone number 
including any after-hours emergency number(s).
    (2) The name and number of the contract, and whether the individual 
is the contractor or the contractor's dependent.
    (3) The name, address, and home and office telephone number(s) of 
each individual's next of kin.
    (4) Any special instructions pertaining to emergency situations such 
as power of attorney designees or alternate contact persons.

     22. U.S. Resident Hire Personal Services Contractor (June 1990)

    A contractor meeting the definition of a U.S. Resident Hire PSC 
contained in Section 12, General Provisions, Clause 1, Definitions, 
shall be subject to U.S. Federal Income Tax, but shall not be eligible 
for any fringe benefits (except contributions for FICA, health insurance 
and life insurance), allowances, or differentials, including but not 
limited to travel and transportation, medical, orientation, home leave, 
etc., unless such individual can demonstrate to the satisfaction of the 
Contracting Officer that he/she has received similar benefits/allowances 
from their immediately previous employer in the Cooperating Country, or 
the Mission Director determines that payment of such benefits would be 
consistent with the Mission's policy and practice and would be in the 
best interest of the U.S. Government.

            23. Orientation and Language Training (July 1993)

    (a) Except as set forth in paragraph (b)(4) below, the Contractor 
shall receive a maximum of 2 weeks USAID orientation before travel 
overseas. The dates of orientation shall be selected by the Contractor 
and approved by the Contracting Officer from the orientation schedule 
provided by USAID.
    (b) As either set forth in the Contract Schedule, or provided in 
writing by the Contracting Officer, the following may be authorized 
taking into consideration specific job requirements, contractor's prior 
overseas experience, or unusual circumstances, in connection with 
orientation of individual Contractors:
    (1) Modified orientation,
    (2) Language training,
    (3) Orientation for Contractor's dependents at contract expense.
    (4) Waiver of orientation for individual contractor.
    (c) Transportation costs and travel allowances not to exceed one 
round trip from the Contractor's residence to place of orientation and 
return will be reimbursed, pursuant to Clause 10 of the General 
Provisions, entitled ``Travel and Transportation Expenses,'' if the 
orientation is more than 80 kilometers/50 miles from the contractor's 
residence.
    Allowable salary costs during the period of orientation are also 
reimbursable.

 24. Conditions for Contracting Prior to Receipt of Security Clearance 
                               (July 1993)

    (a) U.S. Resident Hire PSC. The contractor may commence work prior 
to the completion of the security clearance. However, until such time as 
clearance is received, the contractor shall have no access to classified 
or administratively controlled materials. Further, failure to obtain 
clearance will constitute cause for contract termination in accordance 
with paragraph (a)(2) of General Provision 16 of this contract.
    (b) U.S. PSC--Non-Resident Hire. The contractor may elect to 
commence travel to post immediately to begin work prior to completion of 
the security clearance. However, until such time as security clearance 
is received, the contractor shall:
    (1) Have no access to classified or administratively controlled 
materials;
    (2) Be authorized to travel to post himself/herself only; and
    (3) Be authorized no entitlements other than those normally 
authorized for short term (less than a year) employees at post. Even if 
the contract is for one year or more, dependents may not accompany 
contractor unless at his/her expense, and transportation/storage of 
household/personal effects and motor vehicle will not be financed by 
USAID prior to the receipt of the security clearance. Upon receipt of 
clearance, the Contracting Officer will authorize reimbursement of any 
such costs borne at contractor's expense prior to clearance provided 
they are reasonable, allocable and allowable. If appropriate given the 
length of time remaining, the Contracting Officer will authorize 
dependent travel and shipment/storage of motor vehicle and effects. 
Allowances which would not be provided to short term employees will be 
authorized after clearance is received provided that the contractor is 
otherwise entitled to such benefits. Failure to obtain the security 
clearance will constitute cause for contract termination in accordance 
with paragraph (a)(2) of General Provision 16 of this contract.

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          25. Medical Evacuation (MEDEVAC) Services (JUL 2007)

    (a) The PSC must obtain MEDEVAC service coverage including coverage 
for authorized dependents while performing personal services abroad.
    USAID will reimburse the total cost of MEDEVAC insurance to the PSC. 
The PSC must provide proof of coverage to the CO in order to receive 
reimbursement.
    (b) Exceptions. (1) A PSC and authorized dependents with a health 
insurance program that includes sufficient MEDEVAC coverage as approved 
by the Contracting Officer are not required to obtain MEDEVAC service 
coverage.
    (2) The Mission Director at the post of assignment may make a 
written determination to waive the requirement for such coverage. The 
determination must be based on findings that the quality of local 
medical services or other circumstances obviate the need for such 
coverage for PSCs and their dependents located at post.

                      26. Governing Law (Nov 1996)

    This contract is established under the procurement authorities of 
the United States Government and shall be interpreted in accordance with 
the body of Federal Procurement Law in the United States. This contract 
is a complete statement of the duties, compensation, benefits, leave, 
notice, termination, and the like; therefore, the laws of the country of 
performance with respect to labor and contract matters shall not apply 
to either the carrying out of the obligations of the parties or to the 
interpretation of this agreement.

    13. FAR Clauses to be Incorporated in Full Text in Personal Services 
Contracts.
    The following FAR Clauses are always to be used along with the 
General Provisions. They are required in full text.
1. Covenant Against Contingent Fees 52.203-5
2. Electronic Funds Transfer Payment Methods 52.232-28
3. Disputes 52.233-1 (Alternate 1)
4. Preference for U.S. Flag Air Carriers 52.247-63

    14. FAR Clauses to be Incorporated by Reference in Personal Services 
Contracts
    The following FAR Clauses are to be used along with the General 
Provisions, and when appropriate, be incorporated in each personal 
services contract by reference:
1. Anti-Kickback Procedures 52.203-7
2. Limitation on Payments to Influence Certain Federal Transactions 
          52.203-12
3. Audit and Records--Negotiation 52.215-2
4. Privacy Act Notification 52.224-1
5. Privacy Act 52.224-2
6. Taxes--Foreign Cost Reimbursement Contracts 52.229-8
7. Interest 52.232-17
8. Limitation of Cost 52.232-20
9. Limitation of Funds 52.232-22
10. Assignment of Claims 52.232-23
11. Protection of Government Buildings, Equipment, and Vegetation 
          52.237-2
12. Notice of Intent to Disallow Costs 52.242-1
13. Inspection 52.246-5
14. Limitation of Liability--Services 52.246-25

[62 FR 39453, July 23, 1997, as amended at 64 FR 42040, Aug. 3, 1999; 72 
FR 19670, Apr. 19, 2007]

                   Appendix E to Chapter 7 [Reserved]

  Appendix F to Chapter 7--Use of Collaborative Assistance Method for 
                          Title XII Activities

                             1. Introduction

    This appendix provides a detailed description of the collaborative 
assistance method of contracting. This is a specialized contracting 
system which may be used for contracting with educational institutions 
eligible under, and for activities authorized under, Title XII of the 
Foreign Assistance Act of 1961, as amended, under the circumstances 
described in AIDAR 715.613-71.

                               2. Purpose

    The collaborative assistance system is designed to:
    (a) Increase the joint implementation authority and responsibility 
of the contractor and the LDC;
    (b) Encourage more effective collaboration between all participating 
parties (USAID, host country, and contractor) at important stages, 
including the design stage of a technical assistance project.

                                3. Policy

    The collaborative assistance approach represents an alternative 
method for long-term technical assistance which involves professional 
collaboration with eligible Title XII institutions and LDC counterparts 
for a problem-solving type activity to develop new institutional forms 
and capabilities, to devise operating systems and policies, and to 
conduct joint research and development--including training. In such an 
activity, the difficulty in defining, in advance, precise and 
objectively verifiable contractor inputs and long-term project content 
as a basis for payment usually requires a flexible approach to project 
design, contracting, and project implementation. Such flexibility is 
also essential to the collaborative style which is responsive to LDC 
desires in problem areas of great complexity and varying uncertainty. 
Other types of technical assistance, which are usually shorter in term 
are amenable to

[[Page 118]]

more precise definition in advance, or involve closely defined and 
relatively standardized services, or are otherwise more analogous to 
commodity resource transfers, may be suitable for other contracting 
methods, e.g., certain forms of institution building, on-the-job 
training, resource surveys, etc. The collaborative assistance method is 
an approved method for providing technical assistance when used in 
accordance with the circumstances outlined above, and with the 
guidelines set forth in paragraph 4, below.

                      4. Implementation Procedures

    (a) Introduction. This paragraph 4, provides background information, 
guidelines and procedures to effect the implementation of the policy set 
forth in paragraph 3 of this appendix.
    (b) Conditions and practices. In order for this policy to work 
effectively even when the proposed activity fits the criteria described 
under Policy, there must also be:
    (1) Acceptance of the notion that the host country, in consultation 
with the contractor, is in the best position to make tactical, day-to-
day decisions on project inputs within agreed-upon limitations and 
output expectations;
    (2) Sufficient trust and respect between the Agency and the 
contractor to allow this flexible implementation authority;
    (3) A direct-hire project monitor with appropriate background to be 
knowledgeable of progress and to assist in an advisory and facilitative 
capacity, both during and between periodic reviews. In addition, the 
following important conditions must be met:
    (i) Adequate preproject communication between, and identification of 
assistance required by, the host government and USAID;
    (ii) Full joint planning and improved project design (``Joint'' as 
used herein refers to the primary parties, i.e., the collaborating 
institutions, as well as the host government and USAID. In some 
instances, it can also include other donors.);
    (iii) Careful contractor selection, i.e., matching of the 
contractor's technical and managerial capabilities to the anticipated 
requirements of the overseas activity;
    (iv) Establishment of relationships between host country, USAID and 
contractor staff to include host country leadership, flexible 
implementation authority, and effective management by the contractor;
    (v) Improved joint project evaluation, feedback, and replanning; and
    (vi) Simplified administrative procedures and greater reliance on 
in-country logistical support.
    (c) Project Stages and Contractor Involvement. In the long-term 
technical assistance projects as described above, there are four 
discrete but sometimes overlapping decision stages which take place--
with the principal contractor usually involved in the last three.
    (1) Problem analysis and project identification. After the host 
government has indicated a desire for U.S. collaboration on a particular 
problem and the USAID field mission has determined that the proposed 
activity is consistent with its program goals and priorities, 
considerable effort is usually necessary to refine further the project 
purpose and type of assistance required and provide a basis for 
contractor selection. This is a crucial step and is focused on results 
sought--on what the prospective contractor is expected to produce in 
relation to resources to be used and to project purpose. It should 
result in a clear understanding of what the LDC wants, and an overall 
plan which includes agreement on specific objectives or outputs, 
acceptable types of activities and inputs and an initial budget--
resulting in project documentation. At this step, USAID makes decisions 
it cannot delegate on what it will support and at what cost. If needed 
to supplement its direct-hire expertise, USAID can use outside 
consultants for analysis and advice but retains the ultimate decision 
for itself in collaboration with, but independent of, the requesting 
host government. (Normally, the proposed contractor for project 
definition and subsequent implementation should not have been involved 
in the problem analysis and project identification stage as a consultant 
to either the host country government, host institution, or USAID. If a 
potential contractor has been so involved, particular care must be taken 
to prevent actual or apparent organizational conflicts of interest in 
the procurement that follows. This could require at a minimum, a careful 
assessment and complete documentation of reasons for selection.)
    Normally, there will need to be some mutual interaction between the 
overall planning stage outlined here and the detailed planning and 
design work which follows in the next phase. There will usually be some 
overlap, with preliminary decisions in this stage providing a basis for 
selection of implementing agents for stage (2) which in turn proceeds 
through some preliminary planning to guide completion of stage (1) as a 
basis for long-term contracting.
    (2) Project definition. At this stage, having selected the 
implementing agent, the U.S. and LDC organizations which will be 
collaborating in carrying out the project are encouraged to work out, to 
their mutual \3/8\satisfaction, the particulars of what to do and how to 
do it (i.e., detailed project design) within the context of LDC 
leadership and responsibility and the general agreements and budget 
reached in stage (1). The emphasis here is on the technical approach to 
be utilized and the scheduling and management of project inputs. This 
may involve a short-term reconnaissance and/or an extensive period of 
detailed joint planning and feeling out of what is feasible during a 
preliminary

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operating phase of the project, possibly lasting as much as a year or 
more. This stage recognizes the importance, for the problem-solving or 
ground breaking types of technical assistance, of involving the U.S. and 
LDC implementing organizations together as soon as the detailed design 
work begins. USAID's role here is to facilitate, not direct, the joint 
planning, assure consistency with prior agreements or concur in changes, 
affirm that the implementing parties have agreed on a reasonable project 
design, and prepare or cause to be prepared the documentation required 
for stage (3), including any amendments that might be required to the 
project documentation. If and when a decision is made by the host 
government and USAID to proceed into the operating phase with the same 
contractor, the U.S. intermediary should be treated as a cooperating 
partner in the negotiation of the subsequent long-term operating 
agreement(s) with the host government, host institution and USAID.
    (3) Implementation. The results of the approach outlined in the 
stage above should include, in addition to a better understanding and 
more meaningful commitment by all parties, the following specific 
products:
    (i) A jointly developed life-of-project design which reflects the 
commitment of all parties and includes clear statements of purpose, 
principal outputs, eligible types of activity and expenditure limits, 
critical assumptions, and major progress indicators;
    (ii) A workplan and input schedule for the first two years or at 
least as long as the expenditure period for the next obligation of 
project funds;
    (iii) Provisions for any administrative support, special services or 
other inputs by the host country, contractor, and/or USAID; and
    (iv) A plan for periodic joint evaluation and review or progress and 
subsequent workplans, normally annually, with the participation of all 
parties.
    Appropriate elements of these agreements and understandings are now 
embodied in a contract for project implementation, as described in 
paragraph (d)(3)(i) of the section on Contracting Implications. This 
contract allows the U.S. intermediary to apply its judgment, reflecting 
close collaboration with its LDC colleagues, in adjusting the flow of 
USAID-financed inputs and in making other operational decisions with a 
minimum of requirements for prior USAID approvals or contract amendments 
as long as the contractor stays within the bounds of the approved 
overall plan and budget. In this phase, USAID will give technical 
assistance contractors the authority and responsibility for using their 
specialized expertise to the fullest extent in the scheduling and 
managing of project inputs.
    (4) Monitoring, joint evaluation and replanning. With increased 
flexibility and responsibility for implementation placed with the 
technical assistance contractor, the host government, and/or 
institutional collaborator, improved and timely progress reporting and 
periodic, joint, and structured reviews of results and evolving plans 
are imperative as a basis for monitoring and evaluating contractor 
performance, revalidating or adjusting project design, and for 
determining future funding levels and commitments.
    Both the contractor's annual report and the joint review should be 
structured within the framework of purpose, outputs, performance 
indicators, etc., originally established in the project indentification 
phase--as modified by detailed project design--and reflected in the 
Project Agreement and other pertinent documentation. The field review 
will normally serve as the occasion for discussing changes in or 
additions to previously agreed-to workplans as well as proposing changes 
in purpose, types of activities authorized and budgets which require 
contract amendment. Obviously, the appropriate host government, host 
institution, and senior contractor officials should be thoroughly 
involved in the process, which will have to be adapted to the conditions 
within specific projects and countries. An important USAID 
responsibility is to assure that there is appropriate host country 
participation in developing and improving project plans prior to new 
obligations of funds. The special requirements and responsibilities of 
the various parties shall also be reflected in the project agreement and 
contract terms and in guidelines on the content of annual reports, 
evaluation procedures, etc.
    Standard checking on services actually delivered as a basis for 
reimbursement will be continued including appropriate audit of 
expenditures.
    (d) Contracting implications. The principal elements of change in 
present contracting practices, as detailed below, are earlier selection 
and involvement of the prime contractor, contracting by major stages of 
project design and operations, minimizing the need for precontract 
negotiations and contract amendments and USAID approvals, and providing 
technical assistance contractors with the authority and responsibility 
needed to manage implementation within the approved program bounds.
    (1) Selection. The early involvement of the contractor in the 
definition stage of a long-term technical assistance project, after 
USAID decides what it wants to undertake in stage (1), does not alter 
the Agency's responsibility to select its contractors carefully and in 
full compliance with appropriate contracting regulations and selection 
procedures. What is required here is that contractor selection be 
carried out at an earlier stage than has sometimes been the Agency 
practice in the past or with other types of

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contracts and in anticipation that the contractor, assuming adequate 
performance, will participate in all subsequent phases until final 
completion.
    (2) Contracting stages. In contracting, the initial design stage 
should be separated from the longer term implementation stage without 
any USAID commitment to undertake the second until it has exercised its 
independent judgment based on the product of the first plus any outside 
expert appraisal it and the host country want to use.
    The long-term implementation stage itself may be further subdivided 
into contract periods which permit time between predetermined events for 
analysis, determination of new project requirements, and evaluation of 
performance prior to initiating the next phase by contract amendment/
extension. If, for any reason, such an examination does not appear to 
warrant project continuation, then termination of the project and/or 
contract would be the next step.
    (3) Flexible implementation authority. While good project design 
will eliminate or diminish many operational problems, the very nature of 
long-term technical assistance requires flexible implementation within 
agreed purposes, ultimate outputs, types of activity and available 
financing. With these key variables for USAID management control 
established, contracts should be written so as to minimize the need for 
amendments and USAID approval of changes in input particulars. This can 
be facilitated, both for the USAID, host country, institution, and the 
contractor by:
    (i) Retention of operational plan in contract and removal of 
workplan. The contract narrative will contain the life-of-the-project 
Operational Plan, consistent with the project design as developed in 
stage (2) and reflected in the project documentation (and subsequent 
amendments thereto). The Operational Plan includes a statement of the 
purpose to be achieved, the outputs to be produced by the contractor and 
the types of activities to be undertaken, the more significant 
indicators of progress, a general description of the type of inputs that 
are authorized and intended to be provided during the life of the 
project, and the overall budget.
    In order to allow adjustments at the implementation level without 
going through the contract amendment process, the detailed but short-
term workplan containing specific descriptions and scheduling of all 
inputs such as numbers and types of staff, participants, commodities, 
etc., and specific activities, will not be a part of the contract. It is 
a working document to be modified in the field when the situation 
demands. The latest version will be available as a supporting document 
to justify proposed new obligation levels. Normally, the workplan and 
derived budget will cover a rolling two year period, i.e., each year 
another yearly increment is added after review and approval.
    (ii) Budget flexibility. To support this implementation flexibility, 
contract budget or fiscal controls will be shifted from fixed line items 
for each input category to program categories, permitting the technical 
assistance contractor to adjust amounts and timing to achieve previously 
approved types of activity. This same type of flexibility should apply 
to any local currency supplied for project operations and/or contractor 
staff support. While an essential corollary to eliminating the workplan 
from the contract, this is not a unique procedure under cost 
reimbursement type contracts when the contractor has demonstrated 
adequate management capability.
    (iii) Negotiation of advance understandings. To permit university 
and international research center contractors to manage their activities 
in accordance with their own policies and procedures and thereby sharpen 
their management responsibility while achieving substantial savings in 
time and reduced documentation, USAID may negotiate advance 
understandings with its technical assistance contractors on dollar costs 
and administrative procedures that would be included by reference in its 
subsequent contracts. Upon receipt of a request from the contractor that 
their policies be reviewed and approved for usage in their contract in 
lieu of the standard terms and conditions, OP/PS/OCC, USAID/W will 
initiate negotiations of such policies in an expeditious manner. The 
approved policies will be used in all relevant relations involving the 
Agency and respective contractors in lieu of traditional contract 
standard provisions, whenever this may be appropriate. This does not 
apply to local currency costs and host government procedures which must 
be negotiated in each case.
    The purpose of the practices listed above is not only to give a 
qualified contractor the authority to adjust the composition and timing 
of inputs but to assign to it clear responsibility for managing such 
resources, as the evolving circumstances require, to achieve the agreed-
upon outputs on a cost efficient basis. It should also reduce the delay 
and paperwork involved in frequent but minor contract amendments, and 
approvals. For the agency as a whole, both in the Mission and in USAID/
W, these have involved a large workload and cost.
    (e) Role of USAID. Nothing in this appendix is intended to delegate, 
diminish or otherwise modify USAID's final responsibility for the 
prudent management of public funds and its own programs. Rather in 
withdrawing from the day-to-day involvement in and responsibility for 
the management of adjustment of the flow of inputs during the 
implementation, the best use of limited agency staff and time can be 
devoted to protecting

[[Page 121]]

the public interest in gaining maximum results from the funds 
appropriated for technical assistance by:
    (1) Seeking optimum identification in terms of LDC priorities and 
U.S. capabilities;
    (2) Mobilizing and selecting the best U.S. professional talent to 
design and carry out the project;
    (3) Monitoring what is happening to assure adequacy of processes, 
get a feel of results, assure actual delivery of inputs being financed;
    (4) Assuring that the attention of USAID's implementation agents and 
LDC colleagues stay well focused on project purpose and results to be 
achieved (outputs) and the relation to these of what is being done and 
actual results;
    (5) Providing intermediaries adequate authority and responsibility 
to adjust inputs promptly and sensitively to the evolving project 
situations.
    Attention to these considerations, and to achievements of the 
preimplementation conditions prescribed above, should greatly increase 
the chances for successful project completion and impact on a cost 
effective basis, which is the final measurement of prudent management.

  Attachment to Appendix F--Guidelines for Requests for Expressions of 
                                Interest

                      A. Length and Level of Detail

    A Request for Expression of Interest (REI) should include more than 
just a short letter expressing interest, but should not be in the detail 
of a technical proposal (RFTP). The REI is not the only source of 
information that can or should be used for selection, but at least a 
minimum level of information should be contained in each document. A ten 
page paper that responds to the selection criteria included in every REI 
should be sufficient for evaluation purposes. The selection criteria 
should specify the technical inputs required for successful execution of 
the project and normally require a response in three general areas:
    1. A description of the institution's capability to address the 
problem described in the REI.
    2. Any related experience, whether in the country or region or in 
the problem area.
    3. A demonstrable commitment of the institution to support the 
project.
    The responses should address the capability, experience, and 
commitment to the particular project.

                    B. Specific Personnel Information

    The response should specify within the areas set out in the 
selection criteria the following planning and personnel factors.
    1. The design team plan and the scope of work for each member.
    2. A list of candidates for the design team and their credentials.
    3. A list of possible candidates for long-term assignment to the 
project. (Since there has been no project design, the specific technical 
assistance slots and technical responsibilities are vague. But it is 
expected that at least half of the personnel needs can be estimated 
early in the project. The institution should make its best guess for the 
team and present to the Agency the persons or types of persons with whom 
they are likely to contract.)

                   C. Multiple Institution Submissions

    Joint effort on the part of several institutions is encouraged when 
appropriate. A single institution may submit an expression of interest 
for part of the project without knowledge of other collaborators or it 
may submit information in response to A and B of this attachment as part 
of a suggested collection of institutions. In either case, a proposed 
plan for cooperation is necessary.
    However, such joint efforts must specify the division of 
responsibilities for the planning and personnel factors indicated in B 
of this attachment. Often USAID will identify the need for cooperation 
and suggest such an effort in the REI. Even if USAID does not suggest 
collaboration, joint efforts with a description of the cooperation would 
be an appropriate way to respond to an REI.

(Sec. 621, Pub. L. 87-195, 75 Stat. 445, (22 U.S.C. 2381) as amended; 
E.O. 12163, Sept. 29, 1979, 44 FR 56673; 3 CFR, 1979 Comp., p. 435)

[49 FR 13301, Apr. 3, 1984, as amended at 49 FR 33669, Aug. 24, 1984; 50 
FR 16089, Apr. 24, 1985; 51 FR 20652, June 6, 1986; 52 FR 6160, Mar. 2, 
1987]

                 Appendixes G-H to Chapter 7 [Reserved]

      Appendix I to Chapter 7--USAID's Academic Publication Policy

                         1. Statement of Policy

    This is a statement of USAID policy on publication, or release to 
parties other than those specifically authorized, of unclassified 
materials gathered or developed under contracts with academic 
institutions.

                        2. Underlying Principles

    USAID favors and encourages the publication of scholarly research as 
well as the maximum availability, distribution, and use of knowledge 
developed in its program.
    This policy statement does not deal with material that is classified 
for security reasons. It does deal with considerations of national 
interest, not of sufficient gravity to warrant security classification, 
but serious enough to affect adversely the conduct of

[[Page 122]]

U.S. assistance programs. Consequently, in addition to the requirements 
of courtesy, propriety, and confidence which normally guide scholars in 
their work, there should also be consideration of the potential 
repercussions of publication on the successful execution of development 
and other cooperative programs in which the United States and foreign 
countries are involved.

                       3. Operational Definitions

    The Agency draws a distinction between two kinds of manuscripts 
which a scholar may wish to publish:
    (a) A report which is prepared and delivered to the Agency under the 
terms of the contract (a ``contract manuscript''); and
    (b) An article or book based upon experience and information gained 
under an USAID contract but not prepared or delivered under the contract 
(a ``non-contract manuscript'').
    There are two kinds of actions, to be specified in the contract, 
which the Agency can take upon notification of a contractor's desire to 
publish:
    (a) Comment only, under which USAID and the foreign government 
involved may review the manuscript, and have their comments considered 
seriously by the contractor prior to publication; and
    (b) Authorization for release, which USAID may withhold if 
reconciliation between the national interest and the author's interest 
is impossible.

                          4. Policy Statements

    (a) USAID, as a general rule, will not require an academic 
institution to obtain permission to publish the written work produced 
under a contract. It will ask for the opportunity to review the 
manuscript for comment only, prior to publication.
    In the case of a contract manuscript, USAID reserves the right to 
disclaim endorsement of the opinions expressed; if it is a noncontract 
manuscript, USAID reserves the right to disassociate itself from 
sponsorship or publication.
    (b) On the other hand, USAID may reserve the right of authorization 
for release in those exceptional cases where conditions exist making it 
reasonably foreseeable, in light of the contract's scope of work and the 
manner and place of performance, that the written work to be prepared 
and delivered under the contract may have adverse repercussions on the 
relations and programs of the United States. Where this right is 
reserved, it must be so specified in the contract. In determining where 
to reserve such right, USAID will consider all relevant factors, 
including:
    (1) The extent to which prompt and full performance of the contract 
will require access, facilitated by reason of the contract, to 
information not generally available to scholars;
    (2) The extent to which the work involves matters of political 
concern to foreign countries, particularly where any substantial part of 
the work is to be performed therein;
    (3) The extent to which, by reason of USAID's close involvement and 
cooperation in the performance of the contract, the work product may be 
so identified with USAID itself as to prevent effective disclaimer of 
USAID endorsement thereof;
    (4) The extent to which the objective of the contract is to provide 
advice to USAID or to a foreign government of immediate operational 
significance in the conduct of the USAID program or the implementation 
of governmental programs in the host country;
    (5) The desires of the host country.

                            5. Implementation

    The successful implementation of this policy on publication rests on 
a thorough understanding and acceptance of these principles by USAID and 
the prospective contractor. The actual publications provision for a 
particular contract, then, would be so worded as to reflect the 
agreement reached in the contract negotations.
    USAID's concern with noncontract manuscripts is related to the 
identification of a manuscript with the U.S. Government. This concern 
will be modified by the passage of time following termination of the 
contract.
    In the normal case of prepublication review for USAID comment, the 
institution will submit a copy of the manuscript not later than the date 
of submission to the publisher. This gives the Agency time to comment if 
it is deemed appropriate. However, in the case of review for 
authorization, timely notification of USAID's response will be given, 
consistent with the size of the manuscript and the number and location 
of the parties involved.
    The Agency will make every effort to expedite this review procedure 
in accordance with the underlying principle described at the beginning 
of this policy statement.

(Sec. 621, Pub. L. 87-195, 75 Stat. 445, (22 U.S.C. 2381) as amended; 
E.O. 12163, Sept. 29, 1979, 44 FR 56673; 3 CFR, 1979 Comp., p. 435)

[49 FR 13304, Apr. 3, 1984]

   Appendix J to Chapter 7--Direct USAID Contracts With a Cooperating 
Country National and With a Third Country National for Personal Services 
                                 Abroad

                               1. General

    (a) Purpose. This appendix sets forth the authority, policy, and 
procedures under which USAID contracts with cooperating

[[Page 123]]

country nationals or third country nationals for personal services 
abroad.
    (b) Definitions. For the purpose of this appendix:
    (1) Personal services contract (PSC) means a contract that, by its 
express terms or as administered, make the contractor personnel appear, 
in effect, Government employees (see FAR 37.104).
    (2) Employer-employee relationship means an employment relationship 
under a service contract with an individual which occurs when, as a 
result of (i) the contract's terms or (ii) the manner of its 
administration during performance, the contractor is subject to the 
relatively continuous supervision and control of a Government officer or 
employee.
    (3) Non-personal services contract means a contract under which the 
personnel rendering the services are not subject either by the 
contract's terms or by the manner of its administration, to the 
supervision and control usually prevailing in relationships between the 
Government and its employees.
    (4) Independent contractor relationship means a contract 
relationship in which the contractor is not subject to the supervision 
and control prevailing in relationships between the Government and its 
employees. Under these relationships, the Government does not normally 
supervise the performance of the work, or the manner in which it is to 
be performed, control the days of the week or hours of the day in which 
it is to be performed, or the location of performance.
    (5) Contractor means a cooperating country national or a third 
country national who has entered into a contract pursuant to this 
appendix.
    (6) Cooperating country means the country in which the employing 
USAID Mission is located.
    (7) Cooperating country national (CCN) means an individual who is a 
cooperating country citizen or a non-cooperating country citizen 
lawfully admitted for permanent residence in the cooperating country.
    (8) Third Country National (TCN) means an individual
    (i) Who is neither a citizen nor a permanent legal resident alien of 
the United States nor of the country to which assigned for duty, and
    (ii) Who is eligible for return to his/her home country or country 
of recruitment at U.S. Government expense [see Section 12, General 
Provision 9 paragraph (n)].

                             2. Legal Basis

    (a) Section 635(b) of the Foreign Assistance Act of 1961, as 
amended, hereinafter referred to as the ``FAA'', provides the Agency's 
contracting authority.
    (b) Section 636(a)(3) of the FAA authorizes the Agency to enter into 
personal services contracts with individuals for personal services 
abroad and provides further that such individuals ``* * * shall not be 
regarded as employees of the U.S. Government for the purpose of any law 
administered by the Civil Service Commission.''\1\
---------------------------------------------------------------------------

    \1\The Civil Service Commission is now the Federal Office of 
Personnel Management.
---------------------------------------------------------------------------

                            3. Applicability

    (a) This appendix applies to all personal services contracts with 
CCNs or TCNs to provide assistance abroad under Section 636(a)(3) of the 
FAA.
    (b) This appendix does not apply to:
    (1) Contracts for non-personal services with TCNs or CCNs; such 
contracts are covered by the basic text of the FAR and AIDAR.
    (2) Personal services contracts with U.S. citizens or U.S. resident 
aliens for personal services abroad; such contracts are covered by 
Appendix D of this chapter.
    (3) Appointments of experts and consultants as USAID direct-hire 
employees; such appointments are covered by USAID Handbook 25, 
Employment and Promotion or superseding Chapters of the Automated 
Directive System (ADS).

                                4. Policy

    (a) General. USAID may finance, with either program or operating 
expense (OE) funds, the cost of personal services as part of the 
Agency's program of foreign assistance by entering into a direct 
contract with a CCN or a TCN for personal services abroad.
    (1) Program funds. Under the authority of Section 636(h) of the FAA, 
program funds may be obligated for periods up to five years where 
necessary and appropriate to the accomplishment of the tasks involved.
    (2) Operating expense funds. Pursuant to USAID budget policy, OE 
funded salaries and other recurrent cost items may be forward funded for 
a period of up to three (3) months beyond the fiscal year in which these 
funds were obligated. Non-recurring cost items may be forward funded for 
periods not to exceed twenty-four (24) months where necessary and 
appropriate to accomplishment of the work.\2\
---------------------------------------------------------------------------

    \2\If there is a need, these contracts may be written for 5 years 
but only funded as outlined above.
---------------------------------------------------------------------------

    (b) Limitations on Personal Services Contracts.
    (1) Personal services contracts may only be used when adequate 
supervision is available.
    (2) Personal services contracts may be used for commercial 
activities. Commercial activities provide a product or service which 
could be obtained from a commercial source. See Attachment A of OMB 
Circular A-76 for a representative list of such activities.

[[Page 124]]

    (3) Notwithstanding any other provision of USAID directives, 
regulations or delegations, Cooperating Country or Third Country 
Nationals may be delegated or assigned any authority, duty or 
responsibility, delegated or assigned U.S. citizen direct-hire employees 
(USDH employees) except that:
    a. They may not supervise USDH employees of USAID or other U.S. 
Government agencies. They may supervise USPSCs and non-U.S. citizen 
employees.
    b. They may not be designated a Contracting Officer or delegated 
authority to sign obligating or subobligating documents.
    c. They may represent the agency, except that communications that 
reflect a final policy, planning or budget decision of the agency must 
be cleared by a USDH employee.
    d. They may participate in personnel selection matters but may not 
be delegated authority to make a final decision on personnel selection.
    e. Services which involve security classified material.
    (4) Exceptions. Exceptions to the limitations in (b)(3) must be 
approved by the Assistant Administrator for Management (AA/M).
    (c) Conditions of Employment.
    (1) General. For the purpose of any law administered by the U.S. 
Office of Personnel Management, USAID PSC contractors are not to be 
regarded as employees of the U.S. Government, are not included under any 
retirement or pension program of the U.S. Government, and are not 
eligible for the Incentive Awards Program covered by Uniform State/
USAID/USIA regulations. Each USAID Mission is expected to participate in 
the Joint Special Embassy Incentive Awards Program. The program is 
administered by a joint committee which establishes procedures for 
submission, review and approval of proposed awards. Other than these 
exceptions, CCNs and TCNs who are hired for work in a cooperating 
country under PSCs generally will be extended the same benefits and be 
subject to the same restrictions as Foreign Service Nationals (FSNs) 
employed as direct-hires by the USAID Mission.
    (2) Compensation. (i) It is USAID's general policy (see AIDAR 
722.170) that PSC compensation may not, without the approval of the 
Mission Director or Assistant Administrator, exceed the prevailing 
compensation paid to personnel performing comparable work in the 
cooperating country. Compensation for TCN or CCN personal services 
contractors set in accordance with the provisions of 4c(2)(ii) below 
satisfies this requirement.
    (ii) In accordance with Section 408(a)(1) of the Foreign Service Act 
of 1980, a local compensation plan forms the basis for all compensation 
payments to FSNs which includes CCNs and TCNs. The plan is each post's 
official system of position classification and pay, consisting of the 
local salary schedule which includes salary rates, statements 
authorizing fringe benefit payments, and other pertinent facets of 
compensation for TCNs and CCNs, and the local position classification 
system as reflected in the Local Employee Position Classification 
Handbook (LEPCH) or equivalent in effect at the Mission. Compensation 
for PSCs will be in accordance with the local compensation plan, to the 
extent that it covers employees of the type or category being employed, 
unless the Mission Director determines otherwise. If the Mission 
Director determines that compensation in accordance with the local plan 
would be inappropriate in a particular instance, then compensation will 
be set in accordance with (in order of preference):
    (A) Any other Mission policies on foreign national employee 
compensation; or
    (B) Paragraphs 4(c) (d), (e), (g), (h), and (i) of Appendix D. When 
compensation is set in accordance with this exception, the record shall 
be documented in writing with a justification prepared by the requesting 
office and approved by the Mission Director.
    (iii) The earning of leave (annual and sick), allowances and 
differential (if applicable), salaries and all other related benefits 
cannot be enumerated in this Appendix as they vary from Mission to 
Mission and are based upon the compensation plan for each.
    (iv) Unless otherwise authorized, the currency in which compensation 
is paid to contractors shall be in accordance with the prevailing local 
compensation practice of the post.
    (v) CCN and TCN contractors are eligible for allowances and 
differential on the same basis as direct-hire FSN employees under the 
post compensation plan.
    (vi) A USAID PSC who is a spouse of a current or retired U.S. Civil 
Service, U.S. Foreign Service, or U.S. military service member, and who 
is covered by their spouse's government health or life insurance policy, 
is ineligible for a contribution towards the costs of annual health and 
life insurance.
    (vii) Retired CCNs and TCNs may be awarded personal services 
contracts without any reduction in or offset against their Government 
annuity.
    (3) Incentives Awards. (i) All Cooperating Country Nationals direct-
hire and Personal Services Contractors (PSCs) and Third Country 
Nationals (PSCs) of the Foreign Affairs Community are eligible for the 
Joint Special Embassy Incentive Awards Program.
    (ii) Meritorious Step Increases for USAID FSN PSCs may be authorized 
provided the granting of such increases is the general practice locally.
    (iii) The Joint Country Awards Committee administers each post's 
(Embassy) award program, including establishment of procedures for 
submission, review and approval of proposed awards.

[[Page 125]]

    (4) Training. CCN and TCN PSCs are eligible for most of the training 
courses offered in the Training Course Schedule. However, applications 
will be processed on a case-by-case basis and are required to be 
approved by the Contracting Officer.

              5. Soliciting for Personal Services Contracts

    (a) Technical Officer's Responsibilities. The Technical Officer will 
prepare a written detailed statement of duties and a statement of 
minimum qualifications to cover the position being recruited for; the 
statement shall be included in the procurement request. The procurement 
request shall also include the following additional information as a 
minimum:
    (1) The specific foreign location(s) where the work is to be 
performed, including any travel requirements (with an estimate of 
frequency);
    (2) The length of the contract, with beginning and ending dates, 
plus any options for renewal or extension;
    (3) The basic education, training, experience, and skills required 
for the position;
    (4) A certification from the officer in the Mission responsible for 
the LEPCH or equivalent that the position has been reviewed and is 
properly classified as to a title, series and grade in accordance with 
the LEPCH. If the position does not fall within the LEPCH or equivalent 
system, and estimate of compensation based on subparagraphs 4(c)(2)(ii) 
(A) or (B) of this Appendix after consultations or in coordination with 
the contract officer or executive officer;
    (5) A list of Government or host country furnished items (e.g., 
housing).
    (b) Contracting Officer's Responsibilities. (1) The Contracting 
Officer will prepare the solicitation for personal services which shall 
contain:
    (i) Three sets of certified biographical data and salary history. 
(Upon receipt, one copy of the above information shall be forwarded to 
the Project Officer);
    (ii) A detailed statement of duties or a completed position 
description for the position being recruited for;
    (iii) A copy of the prescribed contract Cover Page, Contract 
Schedule, and General Provisions as well as the FAR Clause to be 
included in full text and a list of those to be incorporated by 
reference; and
    (iv) A copy of General Notice entitled ``Employee Review of the New 
Standards of Conduct'' dated October 30, 1992.
    (2) The Contracting Officer shall comply with the limitations of 
AIDAR 706.302-70(c) as detailed in paragraph 5(c) below.
    (c) Competition. (1) Under AIDAR 706.302-70(b)(1), Personal Services 
Contracts are exempt from the requirements for full and open competition 
with two limitations that must be observed by Contracting Officers:
    (i) Offers are to be requested from as many potential offerors as is 
practicable under the circumstances, and
    (ii) a justification supporting less than full and open competition 
must be prepared in accordance with FAR 6.303.
    (2) A class justification was approved by the USAID Procurement 
Executive to satisfy the requirements of AIDAR 706.302-70(c)(2) for a 
justification in accordance with FAR 6.303. Use of this class 
justification for Personal Services Contracts with Cooperating Country 
Nationals and Third Country Nationals is subject to the following 
conditions:
    (i) New contracts are publicized consistent with Mission/Embassy 
practice on announcement of direct hire FSN positions. Renewals or 
extensions with the same individual for continuing service do not need 
to be publicized.
    (ii) A copy of the class justification (which was distributed to all 
USAID Contracting Officers via Contract Information Bulletin) must be 
included in the contract file, together with a written statement, signed 
by the Contracting Officer, that the contract is being awarded pursuant 
to AIDAR 706.302-70(b)(1); that the conditions for use of this class 
justification have been met; and that the cost of the contract is fair 
and reasonable. If the conditions in paragraphs (2)(i) and (ii) are not 
followed, the Contracting Officer must prepare a separate justification 
as required under AIDAR 706.302-70(c)(2).
    (3) Since the award of a personal services contract is based on 
technical qualifications, not price, and since the biographical data and 
salary history are used to solicit for such contracts, FAR Subparts 15.4 
and 15.5 are inappropriate and shall not be used. Instead, the 
solicitation and selection procedures outlined in this Appendix shall 
govern.

               6. Negotiating a Personal Services Contract

    Negotiating a Personal Services Contract is significantly different 
from negotiating a nonpersonal services contract because it establishes 
an employer-employee relationship; therefore, the selection and 
negotiations procedures are more akin to the personal selection 
procedures.
    (a) Technical Officer's Responsibilities. The Technical Officer 
shall be responsible for reviewing and evaluating the applications 
received in response to the solicitation issued by the Contracting 
Officer. If deemed appropriate, interviews may be conducted with the 
applicants before the final selection is submitted to the Contracting 
Officer.
    (b) Contracting Officer's Responsibilities.
    (1) The Contracting Officer shall forward a copy of biographical 
data and salary history received under the solicitation to the Technical 
Officer for evaluation.
    (2) On receipt of the Technical Officer's recommendation, the 
Contracting Officer

[[Page 126]]

shall conduct negotiations with the recommended applicant. The terms and 
conditions of the contract will normally be in accordance with the local 
compensation plan which forms the basis for all compensation on payments 
paid to FSNs which includes CCNs and TCNs.
    (3) The Contracting Officer shall use the certified salary history 
on the certified statement of biographical data and salary history as 
the basis for salary negotiations, along with the Technical Officer's 
cost estimate.
    (4) The Contracting Officer will obtain necessary data for a 
security and suitability clearance to the extent required by USAID 
Handbook 6, Security or superseding ADS Chapters.

                7. Executing a Personal Services Contract

    Contracting activities, whether USAID/W or Mission, may execute 
Personal Services Contracts, provided that the amount of the contract 
does not exceed the contracting authority that has been redelegated to 
them. See AIDAR 701.601. In executing a personal service contract, the 
Contracting Officer is responsible for insuring that:
    (a) The proposed contract is within his/her delegated authority;
    (b) A written detailed statement of duties covering the proposed 
contract has been received;
    (c) The proposed scope of work is contractible, contains a statement 
of minimum qualifications from the technical office requesting the 
services, and is suitable for a personal services contract in that:
    (1) Performance of the proposed work requires or is best suited for 
an employer-employee relationship, and is thus not suited to the use of 
a non-personal services contract;
    (2) The scope of work does not require performance of any function 
normally reserved for direct-hire Federal employees (under paragraph 
4(b) of this Appendix); and
    (3) There is no apparent conflict of interest involved (if the 
Contracting Officer believes that a conflict of interest may exist, the 
question should be referred to the cognizant legal counsel);
    (d) Selection of the contractor is documented and justified (AIDAR 
706.302-70(b)(1) provides an exception to the requirement for full and 
open competition for Personal Services Contracts abroad; see paragraph 
5(c) of this Appendix);
    (e) The standard contract format prescribed for a Cooperating 
Country National and a Third Country National personal services contract 
(Sections 9, 10, 11, 12, and 13 of this Appendix as appropriate) is 
used, or that any necessary deviations are processed as required by 
AIDAR 701.470;
    (f) The contractor has submitted the names, addresses, and telephone 
numbers of at least two persons who may be notified in the event of an 
emergency (this information is to be retained in the contract file);
    (g) The contract is complete and correct and all information 
required on the contract Cover Page (USAID form 1420-36B) has been 
entered;
    (h) The contract has been signed by the Contracting Officer and the 
contractor, and fully executed copies are properly distributed;
    (i) The following clearances, approvals and forms have been 
obtained, properly completed, and placed in the contract file before the 
contract is signed by both parties:
    (1) Security clearance to the extent required by USAID Handbook 6, 
Security or other superseding Chapters of the Automated Directives 
System;
    (2) Mission, host country, and technical office clearance, as 
appropriate;
    (3) Medical clearance(s) based on a full medical examination(s) and 
statement of medical opinion by a licensed physician. The physician's 
medical opinion must be in the possession of the Contracting Officer 
prior to signature of contract. If a TCN is recruited, medical clearance 
requirements apply to the contractor and each dependent who is 
authorized to accompany the contractor;
    (4) The approval for any salary in excess of ES-6, in accordance 
with Appendix G of this chapter;
    (5) A copy of the class justification or other appropriate 
explanation and support required by AIDAR 706.302-70, if applicable;
    (6) Any deviation to the policy or procedures of this Appendix, 
processed and approved under AIDAR 701.470;
    (7) The memorandum of negotiation;
    (j) The position description is classified in accordance with the 
LEPCH, and the proposed salary is consistent with the local compensation 
plan or the alternate procedures established in 4(c)(2)(ii) above;
    (k) Funds for the contract are properly obligated to preclude 
violation of the Anti-Deficiency Act, 31 U.S.C. 134 (the Contracting 
Officer ensures that the contract has been properly recorded by the 
appropriate accounting office prior to its release for the signature of 
the selected contractor);
    (l) The contractor receives and understands USAID General Notice 
entitled ``Employee Review of the New Standards of Conduct'' dated 
October 30, 1992 and a copy is attached to each contract, as provided 
for in paragraph (c) of General Provision 2, Section 12;
    (m) Agency conflict of interest requirements, as set out in the 
above notice are also met by the contractor prior to his/her reporting 
for duty;
    (n) A copy of a Checklist for Personal Services Contractors which 
may be in the form set out above or another form convenient for the 
contracting officer, provided that a form containing all of the 
information described

[[Page 127]]

in this paragraph 7 shall be prepared for each PSC and placed in the 
contract file;
    (o) In consultation with the regional legal advisor and/or the 
regional contracting officer, the contract is modified by deleting from 
the General Provisions (Sections 12 and 13 of this Appendix) the 
inapplicable clause(s) by a listing in the Schedule; and
    (p) The block entitled, ``Acquisition and Assistance Request 
Document'' on the Cover Page of the contract format is completed by 
inserting the four-segment technical number as prescribed in USAID 
Handbook 18, the USAID Code Book Appendix D or superseding ADS Chapter 
if the PSC is project-funded.

                          8. Contracting Format

    The prescribed Contract Cover Page, Contract Schedules, General 
Provisions and FAR Clauses for personal service contracts for TCNs and 
CCNs covered by this Appendix are included as follows:
    9. ``Cover Page'' for a Contract with a Cooperating Country National 
or with a Third Country National for Personal Services.
    10. ``Schedule'' for a Contract with a Cooperating Country National 
or Third Country National Personal Services Contracts.
    11. ``Optional Schedule'' for a Contract with a Cooperating Country 
National or Third Country National Personal Services Contracts.
    [Use of the Optional Schedule is intended to serve as an alternate 
procedure for OE funded Foreign Service National PSCs. The schedule was 
developed for use when the Contracting Officer anticipates incremental 
recurring cost funded contracts. It should be noted that the Optional 
Schedule eliminates the need to amend the contract each time funds are 
obligated. However, the Contracting Officer is required to amend each 
contract not less than twice during a 12 month period to ensure that the 
contract record of obligations is up to date and agrees with the figures 
in the master funding document.]
    12. ``General Provisions'' for a Contract With a Cooperating Country 
National or With a Third Country National for Personal Services.
    13. FAR Clauses to be incorporated in full text as well as by 
reference in Personal Services Contracts.

9. ``Cover page'' for a Contract With a Cooperating Country National or 
          With a Third Country National for Personal Services.

    --AID Form 1420-36B (11/96)

[[Page 128]]

[GRAPHIC] [TIFF OMITTED] TR11AU97.005

 10. ``Schedule'' for a Contract With a Cooperating Country National or 
           Third Country National Personal Services Contracts

Contract No.------
Table of Contents
    The Schedule on pages ------ through ------ consists of this Table 
of Contents, the following Articles, and General Provisions:
Article I Statement of Duties

[[Page 129]]

Article II Period of Service
Article III Contractor's Compensation and Reimbursement
Article IV Costs Reimbursable and Logistic Support
Article V Precontract Expenses
Article VI Additional Clauses

General Provisions

    The following provisions, numbered as shown below, omitting 
number(s) ------, are the General Provisions (GPs) of this Contract:

1. Definitions
2. Compliance with Applicable Laws and Regulations
3. Physical Fitness
4. Security
5. Workweek
6 Leave and Holidays
7. Social Security and Cooperating Country Taxes
8. Insurance
9. Travel and Transportation
10. Payment
11. Contractor-Mission Relationships
12. Termination
13. Allowances
14. Advance of Dollar Funds
15. Conversion of U.S. Dollars to Local Currency
16. Post of assignment Privileges
17. Release of Information
18. Notices
19. Incentive Awards
20. Training
21. Medical Evacuation Services

    Schedule

    Note: Use of the following Schedule is not mandatory.

    The Schedule is intended to serve as a guideline and as a checklist 
for contracting offices in drafting contract schedules. Article language 
shall be changed to suit the needs of the particular contract. Special 
attention should be given to the financial planning sections where 
unnecessary line items should be eliminated.

                     Article I--Statement of Duties

    [The statement of duties shall include:
    A. General statement of the purpose of the contract.
    B. Statement of duties to be performed.
    C. Orientation or training to be provided by USAID.]

                      Article II--Period of Service

    Within ------ days after written notice from the Contracting Officer 
that all clearances, including the statement of medical opinion required 
under General Provision Clause 3, have been received, unless another 
date is specified by the contracting officer in writing, the contractor 
shall proceed to ------ and shall promptly commence performance of the 
duties specified above. The contractor's period of service shall be 
approximately ------ in ------. (Specify time of duties in each 
location.)

        Article III--Contractor's Compensation and Reimbursement

    A. Except as reimbursement may be specifically authorized by the 
Mission Director or contracting officer, USAID shall pay the contractor 
compensation after it has accrued and make reimbursements, if any are 
due, in currency of the post or for necessary and reasonable costs 
actually incurred in the performance of this contract within the 
categories listed in Paragraph D, below, and subject to the conditions 
and limitations applicable thereto as set out herein and in the attached 
General Provisions (GPs).
    B. The amount budgeted and available as personal compensation to the 
contractor is calculated to cover a calendar period of approximately --
---- (days) (weeks) (months) (years) (which is to include) (1) vacation 
and sick leave which may be earned during contractor's tour of duty (GP 
Clause No. 6), (2) ------ days for authorized travel (GP Clause 9), and 
(3) ------ days for orientation and consultation if required by the 
Statement of Duties.
    C. The contractor shall earn vacation leave at the rate of ------ 
days per year under the contract (provided the contract is in force for 
at least 90 days) and shall earn sick leave at the rate of ------ days 
per year under the contract.
    D. Allowable Costs.
    1. Compensation at the rate of LC ------ per (year) (month) (week) 
(day), equivalent to Grade FSN-------/------ in accordance with the 
Mission's Local Compensation Plan. If during the effective period of 
this contract the Local Compensation Plan is revised, contractor's 
compensation will be revised accordingly and contractor will be notified 
in writing by the contracting officer. Adjustments in compensation for 
periods when the contractor is not in compensable pay status shall be 
calculated as follows: Rate of LC ------ per (day) (hour).
    LC ------
    2. Overtime (Unless specifically authorized in the Schedule of this 
contract, no overtime hours shall be allowed hereunder.)
    3. Travel and Transportation (Ref. GP Clause 9). (Includes the value 
of TRs furnished by the Government, not payable to contractor).

a. United States--$------
b. International--$------
c. Cooperating and Third Country--$------, LC ------

    Subtotals Item 3--$------, LC ------

    4. Subsistence or Per Diem (Ref. GP Clause 9).

a. United States--$------

[[Page 130]]

b. International--$------
c. Cooperating and Third Country--$------, LC------
    Subtotals Item 4--$------, LC------

    5. Other Direct Costs

a. Physical Examination (Ref. GP Clause 3)--LC------
b. Miscellaneous--LC------
    Subtotal Item--LC------

    Total Estimated Costs (Lines 1 thru 5) $------ LC ------
    E. Maximum U.S. Dollar and Local Currency Obligation.
    In no event shall the maximum U.S. Dollar obligation under this 
contract exceed $------ nor shall the maximum local currency obligation 
exceed LC ------. Contractor shall keep a close account of all 
obligations incurred and accrued hereunder and promptly notify the 
contracting officer whenever it appears that the said maximum is not 
sufficient to cover all compensation and costs reimbursable which are 
anticipated under the contract.
    F. Under the Joint Incentive Awards Program for FSN monetary awards 
will be made pending availability of funds. The increase for the award 
will be effected by the execution of an SF-1126 which will be attached 
to the contract and will form a part of the contract. In no event may 
costs under the contract exceed the total amount obligated.
    Meritorious Step Increases for FSN PSCs may be authorized provided 
the granting of such increase is the general practice locally.

           Article IV--Costs Reimbursable And Logistic Support

    A. General.
    The contractor shall be provided with or reimbursed in local 
currency

(------) for the following: [Complete]

    B. Method of Payment of Local Currency Costs.
    Those contract costs which are specified as local currency costs in 
Paragraph A, above, if not furnished in kind by the cooperating 
government or the Mission, shall be paid to the contractor in a manner 
adapted to the local situation, based on vouchers submitted in 
accordance with GP Clause 10. The documentation for such costs shall be 
on such forms and in such manner as the Mission Director shall 
prescribe.
    C. Cooperating or U.S. Government Furnished Equipment and 
Facilities.
    [List any logistical support, equipment, and facilities to be 
provided by the cooperating government or the U.S. Government at no cost 
to this contract; e.g., office space, supplies, equipment, secretarial 
support, etc., and the conditions, if any, for use of such equipment.]

                     Article V--Precontract Expenses

    No expense incurred before signing of this contract will be 
reimbursed unless such expense was incurred after receipt and acceptance 
of a precontract expense letter issued to the contractor by the 
Contracting Officer, and then only in accordance with the provisions and 
limitations contained in such letter. The rights and obligations created 
by such letter shall be considered as merged into this contract.

                     Article VI--Additional Clauses

    [Additional Schedule Clauses may be added to meet specific 
requirements of an individual contract.]

11. Optional Schedule for a Contract With a Cooperating Country National 
          or Third Country National Personal Services Contracts

Contract No. ------
Table of Contents
(Optional Schedule)
    [Use of the Optional Schedule is not mandatory. It is intended to 
serve as an alternate procedure for OE funded Cooperating Country 
National and Third Country National PSCs. The schedule was developed for 
use when the Contracting Officer anticipates incremental recurring cost 
funded contracts.
    It should be noted that use of the Optional Schedule eliminates the 
need to amend the contract each time funds are obligated. However, 
Contracting Officer is required to amend each contract not less than 
twice during a 12 month period to ensure that the contract record of 
obligations is up to date and agrees with the figures in the master 
funding document.]
    The Schedule on pages ------ through ------ consists of this Table 
of Contents and the following Articles:

Article I Statement of Duties
Article II Period of Service
Article III Contractor's Compensation and Reimbursement
Article IV Costs Reimbursable and Logistic Support
Article V Precontract Expenses
Article VI Additional Clauses

General Provisions

    The following provisions, numbered as shown below, omitting 
number(s) ------, are the General Provisions (GPs) of this contract.

1. Definitions
2. Compliance with Applicable Laws and Regulations
3. Physical Fitness
4. Security
5. Workweek
6. Leave and Holidays
7. Social Security and Cooperating Country Taxes
8. Insurance

[[Page 131]]

9. Travel and Transportation
10. Payment
11. Contractor-Mission Relationships
12. Termination
13. Allowances
14. Advance of Dollar Funds
15. Conversion of U.S. Dollars to Local Currency
16. Post of Assignment Privileges
17. Release of Information
18. Notices
19. Incentive Awards
20. Training
21. Medical Evacuation Services

                     Article I--Statement of Duties

    [The statement of duties shall include:
    A. General statement of the purpose of the contract.
    B. Statement of duties to be performed.
    C. Orientation or training to be provided by USAID.]

                      Article II--Period of Service

    Employment under this contract is of a continuing nature. Its 
duration is expected to be part of a series of sequential contracts; all 
contract provisions and clauses and regulatory requirements concerning 
availability of funds and the specific duration of this contract shall 
apply.
    Within 10 days after written notice from the Contracting Offices 
that all clearances have been received, unless another date is specified 
by the Contracting Officer in writing, the contractor shall proceed to 
(name place) and shall promptly commence performance of the duties 
specified in Article I of this contract. The contractor's period of 
service shall be approximately (specify duration from date to date).

        Article III--Contractor's Compensation and Reimbursement

    A. Except as reimbursement may be specifically authorized by the 
Mission Director or Contracting Officer, USAID shall pay the contractor 
compensation after it has accrued and make reimbursements, if any are 
due in currency of the cooperating country (LC) in accordance with the 
prevailing practice of the post or for necessary and reasonable costs 
actually incurred in the performance of this contract within the 
categories listed in paragraph E, below, and subject to the conditions 
and limitations applicable thereto as set out herein and in the attached 
General Provisions (GPs).
    B. The amount budgeted and available as personal compensation to the 
contractor is calculated to cover a calendar period of approximately --
---- (days) (weeks) (months) (years) (which is to include) (1) vacation 
and sick leave which may be earned during the contractor's tour of duty 
(GP Clause No. 6), (2) ------ days for authorized travel (GP Clause 9), 
and (3) ------ days for orientation and consultation if required by the 
Statement of Duties.
    C. The contractor shall earn vacation leave at the rate of ------ 
days per year under the contract (provided the contract is in force for 
at least 90 days) and shall earn sick leave at the rate of ------ days 
per year under the contract.
    D. All employee rights and benefits from the previous contract or 
employment, i.e., accumulated annual and sick leave balances, original 
service computation dates, reserve fund contributions, accumulated 
compensatory time, social security contributions, seniority and 
longevity bonuses are considered allowable costs and as a continuation 
as long as the break in service does not exceed three days.
    E. Allowable Costs.
    1. The following illustrative budget details allowable costs under 
this contract and provides estimated incremental recurrent cost funding 
in the total amount shown. Additional funds for the full term of this 
contract will be provided by the preparation of a master PSC funding 
document issued by the Mission Controller for the purpose of providing 
additional funding for a specific period. The master PSC funding 
document will be attached to this contract and will form a part of the 
executed contract while also serving to amend the budget.
    2. Overtime (Unless specifically authorized in the Schedule of this 
contract, no overtime hours shall be allowed hereunder.)
    LC------
    3. Travel and Transportation (Ref. GP Clause 9). (Includes the value 
of TRs furnished by the Government, not payable to contractor).

a. United States--$------
b. International--$------
c. Cooperating and Third Country--$------, LC ------
    Subtotals Item 3--$------, LC ------

    4. Subsistence or Per Diem (Ref. GP Clause 9.)

a. United States--$------
b. International--$------
c. Cooperating and Third Country--$------, LC ------
    Subtotals Item 4--$------, LC ------

    5. Other Direct Costs.

a. Physical Examination (Ref. GP Clause 3)--$------, LC ------
b. Miscellaneous--$------, LC ------
    Subtotals Item 5--$------, LC ------

Total Estimated Costs (Lines 1 thru 5) $------, LC ------

    F. Allowable costs compensation and all terms and benefits of 
employment under this contract will be in accordance with the Mission's 
local compensation plan. Salary

[[Page 132]]

changes and personnel-related contract actions will be made by 
processing the same forms as used in making such changes and actions for 
direct-hire FSN employees. When issued by the Contracting Officer, the 
forms utilized will be attached to the contract and will form a part of 
the contract terms and conditions.
    Any adjustment or increase in the compensation granted to direct-
hire employees under the local compensation plan will be allowed for in 
PSCs subject to the availability of funds. Such an adjustment will be 
effected by a mass pay adjustment notice from the Contracting Officer, 
which will be attached to the contract and form a part of the executed 
contract.
    At the end of each year of satisfactory service, PSC contractors 
will be eligible to receive an increase equal to one annual step 
increase as shown in the local compensation plan, pending availability 
for funds. Such increase will be effected by the execution of an SF-
1126, Payroll Change Slip which is to be attached to each contract and 
each action forms a part of the official contract file.
    Under the Joint Inventive Awards Program for FSNs, monetary awards 
will be made pending availability of funds. The increase for the award 
will be effected by the execution of an SF-1126 which will be attached 
to the contract and will form a part of the contract. In no event may 
costs under the contract exceed the total amount obligated.
    Meritorious Step Increases for FSN PSCs may be authorized provided 
the granting of such increase is the general practice locally.
    The master PSC funding document may not exceed the term or estimated 
total cost of this contract. Notwithstanding that additional funds are 
obligated under this contract through the issuance and attachment of the 
master PSC funding document, all other contract terms and conditions 
remain in full effect.

           Article IV--Costs Reimbursable and Logistic Support

    A. General.
    The contractor shall be provided with or reimbursed in local 
currency

------ for the following: [Complete]

    B. Method of Payment of Local Currency Costs.
    Those contract costs which are specified as local currency costs in 
Paragraph A, above, if not furnished in kind by the cooperating 
government or the Mission, shall be paid to the contractor in a manner 
adapted to the local situation, based on vouchers submitted in 
accordance with GP Clause 10. The documentation for such costs shall be 
on such forms and in such manner as the Mission Director shall 
prescribe.
    C. Cooperating or U.S. Government Furnished Equipment and 
Facilities.
    [List any logistical support, equipment, and facilities to be 
provided by the cooperating government or the U.S. Government at no cost 
to this contract; e.g., office space, supplies, equipment, secretarial 
support, etc., and the conditions, if any, for use of such equipment.]

                     Article V--Precontract Expenses

    No expense incurred before signing of this contract will be 
reimbursed unless such expense was incurred after receipt and acceptance 
of a precontract expense letter issued to the contractor by the 
Contracting Officer, and then only in accordance with the provisions and 
limitations contained in such letter. The rights and obligations created 
by such letter shall be considered as merged into this contract.

                     Article VI--Additional Clauses

    [Additional Schedule Clauses may be added to meet specific 
requirements of an individual contract.]

    12. General Provisions for a Contract With a Cooperating Country 
     National or With a Third Country National for Personal Services

    To be used to contract with cooperating country nationals or third 
country nationals for personal services.

Index of Clauses
1. Definitions
2. Compliance with Applicable Laws and Regulations
3. Physical Fitness
4. Security
5. Workweek
6. Leave and Holidays
7. Social Security and Cooperating Country Taxes
8. Insurance
9. Travel and Transportation
10. Payment
11. Contractor-Mission Relationships
12. Termination
13. Allowances
14. Advance of Dollar Funds
15. Conversion of U.S. Dollars to Local Currency
16. Post of Assignment Privileges
17. Release of Information
18. Notices
19. Incentive Awards
20. Training
21. Medical Evacuation Services

1. Definitions (JUL 1993)
    [For use in both Cooperating Country National (CCN) and Third 
Country National (TCN) Contracts].
    (a) USAID shall mean the U.S. Agency for International Development.
    (b) Administrator shall mean the Administrator or the Deputy 
Administrator of the U.S. Agency for International Development.

[[Page 133]]

    (c) Contracting Officer shall mean 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.
    (d) Cooperating Country National shall mean the individual engaged 
to serve in the Cooperating Country under this contract.
    (e) Cooperating Country shall mean the foreign country in or for 
which services are to be rendered hereunder.
    (f) Cooperating Government shall mean the government of the 
Cooperating Country.
    (g) Government shall mean the United States Government.
    (h) Economy Class air travel shall mean a class of air travel which 
is less than business or first class.
    (i) Local Currency shall mean the currency of the cooperating 
country.
    (j) Mission shall mean the United States USAID Mission to, or 
principal USAID office in, the Cooperating Country.
    (k) Mission Director shall mean the principal officer in the Mission 
in the Cooperating Country, or his/her designated representative.
    (l) Third Country National shall mean an individual (i) who is 
neither a citizen of the United States nor of the country to which 
assigned for duty, and (ii) who is eligible for return travel to the 
TCN's home country or country from which recruited at U.S. Government 
expenses, and (iii) who is on a limited assignment for a specific period 
of time.
    (m) Tour of Duty shall mean the contractor's period of service under 
this contract and shall include, authorized leave and international 
travel.
    (n) Traveler shall mean the contractor or dependents of the 
contractor who are in authorized travel status.
    (o) Dependents shall mean spouse and children (including step and 
adopted children who are unmarried and under 21 years of age or, 
regardless of age, are incapable of self-support.

2. Compliance With Laws and Regulations Applicable Abroad (JUL 1993)

    [For use in both CCN and TCN Contracts].
    (a) Conformity to Laws and Regulations of the Cooperating Country.
    Contractor agrees that, while in the cooperating country, he/she as 
well as authorized dependents will abide by all applicable laws and 
regulations of the cooperating country and political subdivisions 
thereof.
    (b) Purchase or Sale of Personal Property or Automobiles. [For TCNs 
Only].
    To the extent permitted by the cooperating country, the purchase, 
sale, import, or export of personal property or automobiles in the 
cooperating country by the contractor shall be subject to the same 
limitations and prohibitions which apply to Mission U.S.-citizen direct-
hire employees.
    (c) Code of Conduct.
    The contractor shall, during his/her tour of duty under this 
contract, be considered an ``employee'' (or if his/her tour of duty is 
for less than 130 days, a ``special Government employee'') for the 
purposes of, and shall be subject to, the provisions of 18 U.S.C. 202(a) 
the AID General Notice entitled Employee Review of the New Standards of 
Conduct. The contractor acknowledges receipt of a copy of these 
documents by his/her acceptance of this contract.

    3. Physical Fitness (JUL 1993)

    [For use in both CCN and TCN Contracts].
    (a) Cooperating Country National.
    The contractor shall be examined by a licensed doctor of medicine, 
and shall obtain a statement of medical opinion that, in the doctor's 
opinion, the contractor is physically qualified to engage in the type of 
activity for which he/she is to be employed under the contract. A copy 
of the medical opinion shall be provided to the Contracting Officer 
before the contractor starts work under the contract. The contractor 
shall be reimbursed for the cost of the physical examination based on 
the rates prevailing locally for such examinations in accordance with 
Mission practice.
    (b) Third Country National.
    (i) The contractor shall obtain a physical examination for himself/
herself and any authorized dependents by a licensed doctor of medicine. 
The contractor shall obtain a statement of medical opinion from the 
doctor that, in the doctor's opinion, the contractor is physically 
qualified to engage in the type of activity for which he/she is to be 
employed under the contract, and the contractor's authorized dependents 
are physically qualified to reside in the cooperating country. A copy of 
that medical opinion shall be provided to the Contracting Officer prior 
to the dependents' departure for the cooperating country.
    (ii) The contractor shall be reimbursed for the cost of the physical 
examinations mentioned above as follows: (1) based on those rates 
prevailing locally for such examinations in accordance with Mission 
practice or (2) if not done locally, not to exceed $100 per examination 
for the contractor's dependents of 12 years of age and over and not to 
exceed $40 per examination for contractor's dependents under 12 years of 
age. The contractor shall also be reimbursed for the cost of all 
immunizations normally authorized and extended to FSN employees.

4. Security (JUL 1993)

    [For use in both CCN and TCN Contracts].
    (a) The contractor is obligated to notify immediately the 
Contracting Officer if the

[[Page 134]]

contractor is arrested or charged with any offense during the term of 
this contract.
    (b) The contractor shall not normally have access to classified or 
administratively controlled information and shall take conscious steps 
to avoid receiving or learning of such information. However, based on 
contractor's need to know, Mission may authorize access to 
administratively controlled information for performance of assigned 
scope of work on a case-by-case basis in accordance with USAID Handbook 
6 or superseding ADS Chapters.
    (c) The contractor agrees to submit immediately to the Mission 
Director or Contracting Officer a complete detailed report, marked 
``Privileged Information'', of any information which the contractor may 
have concerning existing or threatened espionage, sabotage, or 
subversive activity against the United States of America or the USAID 
Mission or the cooperating country government.

5. Workweek (OCT 1987)

    [For use in both CCN and TCN Contracts].
    The contractor's workweek shall not be less than 40 hours, unless 
otherwise provided in the Schedule, and shall coincide with the workweek 
for those employees of the Mission or the cooperating country agency 
must closely associated with the work of this contract. If approved in 
advance in writing, overtime worked by the contractor shall be paid in 
accordance with the procedures governing premium compensation applicable 
to direct-hire foreign service national employees. If the contract is 
for less than full time (40 hours weekly), the leave earned shall be 
prorated.

6. Leave and Holidays (OCT 1987)

    [For use in both CCN and TCN Contracts].
    (a) Vacation Leave.
    The contractor may accrue, accumulate, use and be paid for vacation 
leave in the same manner as such leave is accrued, accumulated, used and 
paid to foreign service national direct-hire employees of the Mission. 
No vacation leave shall be earned if the contract is for less than 90 
days. Unused vacation leave may be carried over under an extension or 
renewal of the contract as long as it conforms to Mission policy and 
practice. With the approval of the Mission Director, and if the 
circumstances warrant, a contractor may be granted advance vacation 
leave in excess of that earned, but in no case shall a contractor be 
granted advance vacation leave in excess of that which he/she will earn 
over the life of the contract. The contractor agrees to reimburse USAID 
for leave used in excess of the amount earned during the contractor's 
assignment under the contract.
    (b) Sick Leave.
    The contractor may accrue, accumulate, and use sick leave in the 
same manner as such leave is accrued, accumulated and used by foreign 
service national direct-hire employees of the Mission. Unused sick leave 
may be carried over under an extension of the contract. The contractor 
will not be paid for sick leave earned but unused at the completion of 
this contract.
    (c) Leave Without Pay.
    Leave without pay may be granted only with the written approval of 
the Contracting Officer or Mission Director.
    (d) Holidays.
    The contractor shall be entitled to all holidays granted by the 
Mission to direct-hire cooperating country national employees who are on 
comparable assignments.

7. Social Security and Cooperating Country Taxes (DEC 1986)

    [For use in both CCN and TCN Contracts].
    Funds for Social Security, retirement, pension, vacation or other 
cooperating country programs as required by local law shall be deducted 
and withheld in accordance with laws and regulations and rulings of the 
cooperating country or any agreement concerning such withholding entered 
into between the cooperating government and the United States 
Government.

8. Insurance (JUL 1993)

    [For use in both CCN and TCN Contracts].
    (a) Worker's Compensation Benefits.
    The contractor shall be provided worker's compensation benefits 
under the Federal Employees Compensation Act.
    (b) Health and Life Insurance.
    The contractor shall be provided personal health and life insurance 
benefits on the same basis as they are granted to direct-hire CCNs and 
TCN employees at the post under the Post Compensation Plan.
    (c) Insurance on Private Automobiles--Contractor Responsibility [For 
use in TCN contracts]. If the contractor or dependents transport, or 
cause to be transported, any privately owned automobile(s) to the 
cooperating country, or any of them purchase an automobile within the 
cooperating country, the contractor agrees to ensure that all such 
automobile(s) during such ownership within the cooperating country will 
be covered by a paid-up insurance policy issued by a reliable company 
providing the following minimum coverages, or such other minimum 
coverages as may be set by the Mission Director, payable in U.S. dollars 
or its equivalent in the currency of the cooperating country: injury to 
persons, $10,000/$20,000; property damage, $5,000. The contractor 
further agrees to deliver, or cause to be delivered to the Mission 
Director, copies of the insurance policies required by this clause or 
satisfactory proof of the existence thereof, before such automobile(s) 
is operated within the cooperating country. The premium costs for such 
insurance shall not be a reimbursable cost under this contract.

[[Page 135]]

    (d) Claims for Private Personal Property Losses [For use in TCN 
contracts]. The contractor shall be reimbursed for private personal 
property losses in accordance with USAID Handbook 23, ``Overseas 
Support'', Chapter 10, or superseding ADS Chapter.

9. Travel and Transportation Expenses (JUL 1993)

    [For use in both CCN and TCN Contracts as appropriate].
    (a) General. The contractor will be reimbursed in currency 
consistent with the prevailing practice at post and at the rates 
established by the Mission Director for authorized travel in the 
cooperating country in connection with duties directly referable to work 
under this contract. In the absence of such established rates, the 
contractor shall be reimbursed for actual costs of authorized travel in 
the cooperating country if not provided by the cooperating government or 
the Mission in connection with duties directly referable to work 
hereunder, including travel allowances at rates prescribed by USAID 
Handbook 22, ``Foreign Service Travel Regulations'' or superseding ADS 
Chapters as from time to time amended. The Executive or Administrative 
Officer at the Mission may furnish Transportation Requests (TR's) for 
transportation authorized by this contract which is payable in local 
currency or is to originate outside the United States. When 
transportation is not provided by Government issued TR, the contractor 
shall procure the transportation, and the costs will be reimbursed. The 
following paragraphs provide specific guidance and limitations on 
particular items of cost.
    (b) International Travel. For travel to and from post of assignment 
the TCN contractor shall be reimbursed for travel costs and travel 
allowances from place of residence in the country of recruitment (or 
other location provided that the cost of such travel does not exceed the 
cost of the travel from the place of residence) to the post of duty in 
the cooperating country and return to place of residence in the country 
of recruitment (or other location provided that the cost of such travel 
does not exceed the cost of travel from the post of duty in the 
cooperating country to the contractor's residence) upon completion of 
services by the individual. Reimbursement for travel will be in 
accordance with USAID's established policies and procedures for its CCN 
and TCN direct-hire employees and the provisions of this contract, and 
will be limited to the cost of travel by the most direct and expeditious 
route. If the contract is for longer than one year and the contractor 
does not complete one full year at post of duty (except for reasons 
beyond his/her control), the cost of going to and from the post of duty 
for the contractor and his/her dependents are not reimbursable 
hereunder. If the contractor serves more than one year but less than the 
required service in the cooperating country (except for reasons beyond 
his/her control) costs of going to the post of duty are reimbursable 
hereunder but the cost of going from post of duty to the contractor's 
permanent, legal place of residence at the time he or she was employed 
for work under this contract are not reimbursable under this contract 
for the contractor and his/her dependents. When travel is by economy 
class accommodations, the contractor will be reimbursed for the cost of 
transporting up to 10 kilograms/22 pounds of accompanied personal 
baggage per traveler in addition to that regularly allowed with the 
economy ticket provided that the total number of pounds of baggage does 
not exceed that regularly allowed for first class travelers. Travel 
allowances for travelers shall not be in excess of the rates authorized 
in the Standardized Regulations (Government Civilians, Foreign Areas) 
hereinafter referred to as the Standardized Regulations--as from time to 
time amended, for not more than the travel time required by scheduled 
commercial air carrier using the most expeditious route. One stopover 
enroute for a period of not to exceed 24 hours is allowable when the 
traveler uses economy class accommodations for a trip of 14 hours or 
more of scheduled duration. Such stopover shall not be authorized when 
travel is by indirect route or is delayed for the convenience of the 
traveler. Per diem during such stopover shall be paid in accordance with 
the Federal Travel Regulations as from time to time amended.
    (c) Local Travel. Reimbursement for local travel in connection with 
duties directly referable to the contract shall not be in excess of the 
rates established by the Mission Director for the travel costs of 
travelers in the Cooperating Country. In the absence of such established 
rates the contractor shall be reimbursed for actual travel costs in the 
Cooperating Country by the Mission, including travel allowances at rates 
not in excess of those prescribed by the Standardized Regulations.
    (d) Indirect Travel for Personal Convenience of a TCN. When travel 
is performed by an indirect route for the personal convenience of the 
traveler, the allowable costs of such travel will be computed on the 
basis of the cost of allowable air fare via the direct usually traveled 
route. If such costs include fares for air or ocean travel by foreign 
flag carriers, approval for indirect travel by such foreign flag 
carriers must be obtained from the Contracting Officer or the Mission 
Director before such travel is undertaken, otherwise only that portion 
of travel accomplished by the United States-flag carriers will be 
reimbursable within the above limitation of allowable costs.
    (e) Limitation on Travel by TCN Dependents. Travel costs and 
allowances will be allowed

[[Page 136]]

for authorized dependents of the contractor and such costs shall be 
reimbursed for travel from place of abode in the country of recruitment 
to the assigned station in the Cooperating Country and return, only if 
the dependent remains in the Cooperating Country for at least 9 months 
or one-half of the required tour of duty of the contract, whichever is 
greater, except as otherwise authorized hereunder for education, 
medical, or emergency visitation travel. Dependents of the TCN 
contractor must return to the country of recruitment or home country 
within thirty days of the termination or completion of the contractor's 
employment, otherwise such travel will not be reimbursed under this 
contract.
    (f) Delays Enroute. The contractor may be granted reasonable delays 
enroute while in travel status when such delays are caused by events 
beyond the control of the contractor and are not due to circuitous 
routing. It is understood that if delay is caused by physical 
incapacitation, he/she shall be eligible for such sick leave as provided 
under the ``Leave and Holidays'' clause of this contract.
    (g) Travel by Privately Owned Automobile (POV). If travel by POV is 
authorized in the contract schedule or approved by the Contracting 
Officer, the contractor shall be reimbursed for the cost of travel 
performed in his/her POV at a rate not to exceed that authorized in the 
Federal Travel Regulations plus authorized per diem for the employee 
and, if the POV is being driven to or from the cooperating country as 
authorized under the contract, for each of the authorized dependents 
traveling in the POV, provided that the total cost of the mileage and 
per diem paid to all authorized travelers shall not exceed the total 
constructive cost of fare and normal per diem by all authorized 
travelers by surface common carrier or authorized air fare, whichever is 
less.
    (h) Emergency and Irregular Travel and Transportation. [For TCNs 
only]. Emergency transportation costs and travel allowances while 
enroute, as provided in this section, will be reimbursed not to exceed 
amounts authorized by the Foreign Service Travel Regulations for FSN 
direct-hire employees in like circumstances under the following 
conditions:
    (1) The costs of going from post of duty in the cooperating country 
to another approved location for the contractor and authorized 
dependents and returning to post of duty, subject to the prior written 
approval of the Mission Director, when such travel is necessary for one 
of the following reasons:
    (i) Need for medical care beyond that available within the area to 
which contractor is assigned.
    (ii) Serious effect on physical or mental health if residence is 
continued at assigned post of duty.
    (iii) Serious illness, injury, or death of a member of the 
contractor's immediate family or a dependent, including preparation and 
return of the remains of a deceased contractor or his/her dependents.
    (2) Emergency evacuation when ordered by the principal U.S. 
Diplomatic Officer in the cooperating country. Transportation and travel 
allowances at safe haven and the transportation of household effects and 
automobile or storage thereof when authorized by the Mission Director, 
shall be payable in accordance with established Government regulations.
    (3) The Mission Director may also authorize emergency or irregular 
travel and transportation in other situations when in his/her opinion 
the circumstances warrant such action. The authorization shall include 
the kind of leave to be used and appropriate restrictions as to time 
away from post, transportation of personal and household effects, etc.
    (i) Country of Recruitment Travel and Transportation. [For TCNs 
only]. The contractor shall be reimbursed for actual transportation 
costs and travel allowances in the country of recruitment as authorized 
in the Schedule or approved in advance by the Contracting Officer or the 
Mission Director. Transportation costs and travel allowances shall not 
be reimbursed in any amount greater than the cost of, and time required 
for, economy-class commercial-scheduled air travel by the most 
expeditious route except as otherwise provided in paragraph (h) above, 
unless economy air travel is not available and the contractor adequately 
documents this to the satisfaction of the Contracting Officer in 
documents submitted with the voucher.
    (j) Rest and Recuperation Travel. [For TCNs only].
    If approved in writing by the Mission Director, the contractor and 
his/her dependents shall be allowed rest and recuperation travel on the 
same basis as direct-hire TCN employees and their dependents at the post 
under the local compensation plan.
    (k) Transportation of Personal Effects (Excluding Automobiles and 
Household Goods). [For TCNs only].
    (1) General. Transportation costs will be paid on the same basis as 
for direct-hire employees at post serving the same length tour of duty, 
as authorized in the schedule. Transportation, including packing and 
crating costs, will be paid for shipping from contractor's residence in 
the country of recruitment or other location, as approved by the 
Contracting Officer (provided that the cost of transportation does not 
exceed the cost from the contractor's residence) to post of duty in the 
cooperating country and return to the country of recruitment or other 
location provided the cost of transportation of the

[[Page 137]]

personal effects of the contractor not to exceed the limitations in 
effect for such shipments for USAID direct-hire employees in accordance 
with the Foreign Service Travel Regulations in effect at the time 
shipment is made. These limitations may be obtained from the Contracting 
Officer. The cost of transporting household goods shall not exceed the 
cost of packing, crating, and transportation by surface common carrier.
    (2) Unaccompanied Baggage. Unaccompanied baggage is considered to be 
those personal belongings needed by the traveler immediately upon 
arrival of the contractor and dependents. To permit the arrival of 
effects to coincide with the arrival of the contractor and dependents, 
consideration should be given to advance shipments of unaccompanied 
baggage. The contractor will be reimbursed for costs of shipment of 
unaccompanied baggage (in addition to the weight allowance for household 
effects) not to exceed the limitations in effect for USAID direct-hire 
employees in accordance with the Foreign Service Travel Regulations in 
effect when shipment is made. These limitations are available from the 
Contracting Officer. This unaccompanied baggage may be shipped as air 
freight by the most direct route between authorized points of origin and 
destination regardless of the modes of travel used.
    (l) Reduced Rates on U.S.-Flag Carriers. Reduced rates on U.S.-flag 
carriers are in effect for shipments of household goods and personal 
effects of USAID contractors between certain locations. These reduced 
rates are available provided the shipper furnishes to the carrier at the 
time of the issuance of the Bill of Lading documentary evidence that the 
shipment is for the account of USAID. The Contracting Officer will, on 
request, furnish to the contractor current information concerning the 
availability of a reduced rate with respect to any proposed shipment. 
The contractor will not be reimbursed for shipments of household goods 
or personal effects in amounts in excess of the reduced rates which are 
available in accordance with the foregoing.
    (m) Transportation of things. [For TCNs Only]. Where U.S. flag 
vessels are not available, or their use would result in a significant 
delay, the contractor may obtain a release from the requirement to use 
U.S. flag vessels from the Transportation Division, Office of 
Acquisition and Assistance, U.S. Agency for International Development, 
Washington, DC 20523-1419, or the Mission Director, as appropriate, 
giving the basis for the request.
    (n) Repatriation Travel. [For TCNs Only]. Notwithstanding other 
provisions of this Clause 9, a TCN must return to the country of 
recruitment or to the TCN's home country within 30 days after 
termination or completion of employment or forfeit all right to 
reimbursement for repatriation travel. The return travel obligation 
[repatriation travel] assumed by the U.S. Government may have been the 
obligation of another employer in the area of assignment if the employee 
has been in substantially continuous employment which provided for the 
TCN's return to home country or country from which recruited.
    (o) Storage of household effects. [For TCNs Only]. The cost of 
storage charges (including packing, crating, and drayage costs) in the 
country of recruitment of household goods of regular employees will be 
permitted in lieu of transportation of all or any part of such goods to 
the Cooperating Country under paragraph (k) above provided that the 
total amount of effects shipped to the Cooperating Country or stored in 
the country of recruitment shall not exceed the amount authorized for 
USAID direct-hire employees under the Foreign Service Travel 
Regulations. These amounts are available from the Contracting Officer.

10. Payment (MAY 1997)

    [For use in both CCN and TCN Contracts].
    (a) Payment of compensation shall be based on written documentation 
supporting time and attendance which may be (1) maintained by the 
Mission in the same way as for direct-hire CCNs and TCNs or (2) the 
contractor may submit such written documentation in a form acceptable to 
Mission policy and practice as required for other personal services 
contractors and as directed by the Mission Controller or paying office. 
The documentation will also provide information required to be filed 
under cooperating country laws to permit withholding by USAID of funds, 
if required, as described in the clause of these General Provisions 
entitled Social Security and Cooperating Country Taxes.
    (b) Any other payments due under this contract shall be as 
prescribed by Mission policy for the type of payment being made.

11. Contractor-Mission Relationships (DEC 1986)

    [For use in both CCN and TCN Contracts].
    (a) The contractor acknowledges that this contract is an important 
part of the U.S. Foreign Assistance Program and agrees that his/her 
duties will be carried out in such a manner as to be fully commensurate 
with the responsibilities which this entails. Favorable relations 
between the Mission and the Cooperating Government as well as with the 
people of the cooperating country require that the contractor shall show 
respect for the conventions, customs, and institutions of the 
cooperating country and not become involved in any illegal political 
activities.
    (b) If the contractor's conduct is not in accordance with paragraph 
(a), the contract may be terminated pursuant to the General

[[Page 138]]

Provision of this contract, entitled ``Termination.'' If a TCN, the 
contractor recognizes the right of the U.S. Ambassador to direct his/her 
immediate removal from any country when, in the discretion of the 
Ambassador, the interests of the United States so require.
    (c) The Mission Director is the chief representative of USAID in the 
cooperating country. In this capacity, he/she is responsible for the 
total USAID Program in the cooperating country including certain 
administrative responsibilities set forth in this contract and for 
advising USAID regarding the performance of the work under the contract 
and its effect on the U.S. Foreign Assistance Program. The contractor 
will be responsible for performing his/her duties in accordance with the 
statement of duties called for by the contract. However, he/she shall be 
under the general policy guidance of the Mission Director and shall keep 
the Mission Director or his/her designated representative currently 
informed of the progress of the work under this contract.

12. Termination (NOV 1989)

    [For use in both CCN and TCN Contracts].
    (This is an approved deviation to be used in place of the clause 
specified in FAR 52.249-12.)
    (a) The Government may terminate performance of work under this 
contract in whole or, from time to time, in part:
    (1) For cause, which may be effected immediately after establishing 
the facts warranting the termination, by giving written notice and a 
statement of reasons to the contractor in the event (i) the contractor 
commits a breach or violation of any obligations herein contained, (ii) 
a fraud was committed in obtaining this contract, or (iii) the 
contractor is guilty (as determined by USAID) of misconduct in the 
cooperating country. Upon such a termination, the contractor's right to 
compensation shall cease when the period specified in such notice 
expires or the last day on which the contractor performs services 
hereunder, whichever is earlier. No costs of any kind incurred by the 
contractor after the date such notice is delivered shall be reimbursed 
hereunder except the cost of return transportation (not including travel 
allowances), if approved by the Contracting Officer. If any costs 
relating to the period subsequent to such date have been paid by USAID, 
the contractor shall promptly refund to USAID any such prepayment as 
directed by the Contracting Officer.
    (2) For the convenience of USAID, by giving not less than 15 
calender days advance written notice to the contractor. Upon such a 
termination, contractor's right to compensation shall cease when the 
period specified in such notice expires except that the contractor shall 
be entitled to any accrued, unused vacation leave, return transportation 
costs and travel allowances and transportation of unaccompanied baggage 
costs at the rates specified in the contract and subject to the 
limitations which apply to authorized travel status.
    (3) For the convenience of USAID, when the contractor is unable to 
complete performance of his/her services under the contract by reason of 
sickness or physical or emotional incapacity based upon a certification 
of such circumstances by a duly qualified doctor of medicine approved by 
the Mission. The contract shall be deemed terminated upon delivery to 
the contractor of a termination notice. Upon such a termination, the 
contractor shall not be entitled to compensation except to the extent of 
any accrued, unused vacation leave, but shall be entitled to return 
transportation, travel allowances, and unaccompanied baggage costs at 
rates specified in the contract and subject to the limitations which 
apply to authorized travel status.
    (b) The contractor, with the written consent of the Contracting 
Officer, may terminate this contract upon at least 15 days' written 
notice to the Contracting Officer.

13. Allowances (DEC 1986)

    [For TCNs only].
    Allowances will be granted to the contractor and authorized 
dependents on the same basis as to direct-hire TCN employees at the post 
under the Post Compensation Plan. The allowances provided shall be paid 
to the contractor in the currency of the cooperating country or in 
accordance with the practice prevailing at the Mission.

14. Advance of Dollar Funds (DEC 1986)

    [For TCNs only].
    If requested by the contractor and authorized in writing by the 
Contracting Officer, USAID will arrange for an advance of funds to 
defray the initial cost of travel, travel allowances, authorized 
precontract expenses, and shipment of personal property. The advance 
shall be granted on the same basis as to an USAID U.S.-citizen direct-
hire employee in accordance with USAID Handbook 22, Chapter 4 or 
superseding ADS Chapters.

15. Conversion of U.S. Dollars to Local Currency (DEC 1986)

    [For TCNs only].
    Upon arrival in the cooperating country, and from time to time as 
appropriate, the contractor shall consult with the Mission Director or 
his/her authorized representative who shall provide, in writing, the 
policy the contractor shall follow in the conversion of one currency to 
another currency. This may include, but not be limited to, the 
conversion of said currency through the cognizant U.S. Disbursing 
Officer, or Mission Controller, as appropriate.

16. Post of Assignment Privileges (DEC 1986)

    [For TCNs only].

[[Page 139]]

    Privileges such as the use of APO, PX's, commissaries and officer's 
clubs are established at posts abroad pursuant to agreements between the 
U.S. and host governments. These facilities are intended for and usually 
limited to U.S. citizen members of the official U.S. Mission including 
the Embassy, USAID, Peace Corps, U.S. Information Services and the 
Military. Normally, the agreements do not permit these facilities to be 
made available to non-U.S. citizens if they are under contract to the 
United States Government. However, in those cases where the facilities 
are open to TCN contractor personnel, they may be used.

17. Release Of Information (DEC 1986)

    [For use in both CNN and TCN Contracts].
    All rights in data and reports shall become the property of the U.S. 
Government. All information gathered under this contract by the 
contractor and all reports and recommendations hereunder shall be 
treated as privileged information by the contractor and shall not, 
without the prior written approval of the Contracting Officer, be made 
available to any person, party, or government, other than USAID, except 
as otherwise expressly provided in this contract.

18. Notices (DEC 1986)

    [For use in both CNN and TCN Contracts].
    Any notice, given by any of the parties hereunder, shall be 
sufficient only if in writing and delivered in person or sent by 
telegraph, telegram, registered, or regular mail as follows:
    (a) TO USAID: To the Mission Director of the Mission in the 
Cooperating Country with a copy to the appropriate Contracting Officer.
    (b) TO THE CONTRACTOR: At his/her post of duty while in the 
Cooperating Country and at the contractor's address shown on the Cover 
Page of this contract or to such other address as either of such parties 
shall designate by notice given as herein required.
    Notices hereunder shall be effective when delivered in accordance 
with this clause or on the effective date of the notice, whichever is 
later.

19. Incentive Awards (DEC 1996)

    [For CNN and TCN Contracts].
    (a) All Cooperating Country National (CCN) Personal Services 
Contractors (PSCs) and Third Country Nationals (TCNs) of the Foreign 
Affairs Community are eligible for the Joint Embassy Incentive Awards 
Program. The program is administered by each post's (Embassy) Joint 
Country Awards Committee.
    (b) Meritorious Step Increases
    Meritorious step increases may be granted to CNNs and TCNs paid 
under the local compensation plan provided the granting of such 
increases is the general practice locally.

20. Training (JUL 1993)

    [For CNN and TCN Contracts].
    The contractor may be provided job related training to develop 
growth potential, expand capabilities and increase knowledge and skills. 
The training may be funded under the personal services contract.

21. Medical Evacuation (MEDEVAC) Services (JUL 2007)

    [For TCN Contracts Only].
    (a) The PSC must obtain MEDEVAC service coverage including coverage 
for authorized dependents while performing personal services abroad.
    (b) Exceptions. (1) A PSC and authorized dependents with a health 
insurance program that includes sufficient MEDEVAC coverage as approved 
by the Contracting Officer are not required to obtain MEDEVAC service 
coverage.
    (2) The Mission Director at the post of assignment may make a 
written determination to waive the requirement for such coverage. The 
determination must be based on findings that the quality of local 
medical services or other circumstances obviate the need for such 
coverage for PSCs and their dependents located at post.

                             13. FAR Clauses

    The following FAR Clauses are always to be used along with the 
General Provisions. They are required in full text.

1. Covenant Against Contingent Fees 52.203-5
2. Disputes 52.233-1 (Alternate 1)
3. Preference for U.S. Flag Air Carriers 52.247-63
    The following FAR Clauses are to be used along with the General 
Provisions, and when appropriate, be incorporated in each personal 
services contract by reference:

1. Anti-Kickback Procedures 52.203-7
2. Limitation on Payments to Influence Certain Federal Transactions 
52.203-12
3. Audit and Records--Negotiation 52.215-2
4. Privacy Act Notification 552.224-1
5. Privacy Act 52.224-2
6. Taxes--Foreign Cost Reimbursement Contracts 52.229-8
7. Interest 52.232-17
8. Limitation of Cost 52.232-20
9. Limitation of Funds 52.232-22
10. Assignment of Claims 52.232-23
11. Protection of Government Buildings, Equipment, and Vegetation 
52.237-2
12. Notice of Intent to Disallow Costs 52.242-1
13. Inspection 52.246-5
14. Limitation of Liability--Services 52.246-25

[62 FR 42929, Aug. 11, 1997, as amended at 72 FR 19670, Apr. 19, 2007]

[[Page 141]]



                CHAPTER 8--DEPARTMENT OF VETERANS AFFAIRS




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

                          SUBCHAPTER A--GENERAL
Part                                                                Page
801             Veterans Affairs Acquisition Regulations 
                    System..................................         143
802             Definitions of words and terms..............         159
803             Improper business practices and personal 
                    conflicts of interest...................         159
804             Administrative matters......................         161
                   SUBCHAPTER B--ACQUISITION PLANNING
805             Publicizing contract actions................         162
806             Competition requirements....................         162
807             Acquisition planning........................         165
808             Required sources of supplies and services...         166
809             Contractor qualifications...................         167
811             Describing agency needs.....................         171
812             Acquisition of commercial items.............         176
          SUBCHAPTER C--CONTRACTING METHODS AND CONTRACT TYPES
813             Simplified acquisition procedures...........         178
814             Sealed bidding..............................         179
815             Contracting by negotiation..................         185
816             Types of contracts..........................         187
817             Special contracting methods.................         188
                  SUBCHAPTER D--SOCIOECONOMIC PROGRAMS
819             Small business and small disadvantaged 
                    business concerns.......................         190
822             Application of labor laws to Government 
                    acquisitions............................         196
824             Protection of privacy and freedom of 
                    information.............................         197
825             Foreign acquisition.........................         197
             SUBCHAPTER E--GENERAL CONTRACTING REQUIREMENTS
828             Bonds and insurance.........................         201
829             Taxes.......................................         203

[[Page 142]]

831             Contract cost principles and procedures.....         204
832             Contract financing..........................         207
833             Protests, disputes, appeals.................         209
             SUBCHAPTER F--SPECIAL CATEGORIES OF CONTRACTING
836             Construction and architect-engineer 
                    contracts...............................         214
837             Service contracting.........................         220
                    SUBCHAPTER G--CONTRACT MANAGEMENT
842             Contract administration.....................         224
846             Quality assurance...........................         226
847             Transportation..............................         229
849             Termination of contracts....................         230
                     SUBCHAPTER H--CLAUSES AND FORMS
852             Solicitation provisions and contract clauses         233
853             Forms.......................................         260
           SUBCHAPTER I--DEPARTMENT SUPPLEMENTARY REGULATIONS
870             Special procurement controls................         263
871             Loan guaranty and vocational rehabilitation 
                    and counseling programs.................         265
873             Simplified acquisition procedures for 
                    health-care resources...................         270

[[Page 143]]

                          SUBCHAPTER A_GENERAL

        PART 801_VETERANS AFFAIRS ACQUISITION REGULATIONS SYSTEM

Sec.

Sec. 801.000 Scope of part.

               Subpart 801.1_Purpose, Authority, Issuance


Sec. 801.101 Purpose.

Sec. 801.103 Authority.

Sec. 801.104 Applicability.

Sec. 801.104-70 Exclusions.

                      Subpart 801.2_Administration


Sec. 801.201-1 The two councils.

            Subpart 801.3_Department Acquisition Regulations


Sec. 801.301 Policy.

Sec. 801.301-70 Paperwork Reduction Act requirements.

Sec. 801.303 Publication and codification.

Sec. 801.304 Department control and compliance procedures.

              Subpart 801.4_Deviations From the FAR or VAAR


Sec. 801.403 Individual deviations.

Sec. 801.404 Class deviations.

      Subpart 801.6_Career Development, Contracting Activity, and 
                            Responsibilities


Sec. 801.601 General.

Sec. 801.602 Contracting officers.

Sec. 801.602-2 Responsibilities.

Sec. 801.602-3 Ratification of unauthorized commitments.

Sec. 801.602-70 Legal/technical review requirements to be met prior to 
          contract execution.

Sec. 801.602-71 Processing contracts for legal/technical review.

Sec. 801.602-72 Documents to be submitted for legal review.

Sec. 801.602-73 Certification by reviewing official.

Sec. 801.602-74 Results of General Counsel's legal review.

Sec. 801.603 Selection, appointment, and termination of appointment.

Sec. 801.603-1 General.

Sec. 801.603-70 Representatives of contracting officers.

Sec. 801.603-71 Representatives of contracting officers; receipt of 
          equipment, supplies, and nonpersonal services.

Sec. 801.670 Special and limited delegation.

Sec. 801.670-1 Issue of Government bills of lading--transportation of 
          remains of deceased beneficiaries.

Sec. 801.670-2 Issue of Government bills of lading--transportation of 
          property.

Sec. 801.670-3 Medical, dental, and ancillary service.

Sec. 801.670-4 National Cemetery System.

Sec. 801.670-5 Letters of agreement.

Sec. 801.680 Contracting authority of the Inspector General.

Sec. 801.690 VA Contracting Officer Certification Program.

Sec. 801.690-1 Definitions.

Sec. 801.690-2 General.

Sec. 801.690-3 Responsibility for administration of Contracting Officer 
          Certification Program (COCP).

Sec. 801.690-4 Selection.

Sec. 801.690-5 Appointment.

Sec. 801.690-6 Termination.

Sec. 801.690-7 Interim appointment provisions.

Sec. 801.690-8 Distribution of SF 1402, Certificate of Appointment.

Sec. 801.690-9 Post appointment maintenance of certifications. 
          [Reserved]

    Authority: 38 U.S.C. 501 and 40 U.S.C. 486(c).

    Source: 49 FR 12583, Mar. 29, 1984, unless otherwise noted.



Sec. 801.000  Scope of part.

    This part prescribes general policies and background regarding the 
Veterans Affairs Acquisition Regulation (VAAR). It includes information 
regarding the maintenance and administration of the VAAR and includes 
procedures for deviations from the VAAR and the Federal Acquisition 
Regulation (FAR).

[49 FR 12583, Mar. 29, 1984, as amended at 54 FR 31961, Aug. 3, 1989; 63 
FR 69217, Dec. 16, 1998]

               Subpart 801.1_Purpose, Authority, Issuance



Sec. 801.101  Purpose.

    (a) This subpart establishes Chapter 8, Veterans Affairs Acquisition 
Regulation, of Title 48--Federal Acquisition Regulation System, Code of 
Federal Regulations.

[[Page 144]]

    (b) The VAAR must be utilized in conjunction with the FAR. The VAAR 
cannot be utilized by itself.

[49 FR 12583, Mar. 29, 1984, as amended at 63 FR 69217, Dec. 16, 1998]



Sec. 801.103  Authority.

    The VAAR and any amendments thereto are issued by the Secretary of 
Veterans Affairs as provided by 38 U.S.C. 501 and the Federal Property 
and Administrative Services Act of 1949 (40 U.S.C. 486(c)).

[49 FR 12583, Mar. 29, 1984, as amended at 54 FR 31961, Aug. 3, 1989. 
Redesignated and amended at 63 FR 69217, Dec. 16, 1998]



Sec. 801.104  Applicability.

    (a) The FAR and the VAAR apply to all acquisitions of the Department 
(including construction) made with appropriated funds and procurements 
made with Supply Fund monies (38 U.S.C. 8121).
    (b) The FAR and VAAR will apply to the special procurement programs 
authorized by Title 38 U.S. Code (Viz., Veterans Canteen Service and the 
Loan Guaranty programs), to the extent indicated in the VAAR.

[49 FR 12583, Mar. 29, 1984, as amended at 54 FR 40062, Sept. 29, 1989. 
Redesignated and amended at 63 FR 69217, Dec. 16, 1998]



Sec. 801.104-70  Exclusions.

    The FAR and VAAR will not apply to purchases and contracts which 
utilize General Post Funds when such regulations would infringe upon a 
donor's prerogative to specify the exact item to be purchased and/or the 
source of supply.

[49 FR 12583, Mar. 29, 1984. Redesignated at 67 FR 49257, July 30, 2002]

                      Subpart 801.2_Administration



Sec. 801.201-1  The two councils.

    A designee of the Office of Acquisition and Materiel Management will 
represent the Department of Veterans Affairs on the CAA (Civilian Agency 
Acquisition) Council.

[49 FR 12583, Mar. 29, 1984, as amended at 54 FR 31962, Aug. 3, 1989]

            Subpart 801.3_Department Acquisition Regulations



Sec. 801.301  Policy.

    (a) VAAR, amendments and interim changes thereto will be issued by 
the Secretary of Veterans Affairs after necessary reviews by cognizant 
VA officials.
    (b) Implementing procedures, instructions and guidelines necessary 
to implement the VAAR and the FAR may be issued by the heads of 
contracting activities. Such issuances may include delegations of 
authority, review and approval for acquisition action up to the dollar 
level delegated to that contracting activity by this regulation as well 
as providing procedural guidance for users. Such issuances will be the 
minimum necessary to provide a logical implementation of FAR and VAAR 
requirements and will be internal to the facility, i.e., it will not 
specify reporting/recordkeeping requirements for the public (see 
801.301-70(b)).

[49 FR 12583, Mar. 29, 1984, as amended at 52 FR 28559, July 31, 1987; 
54 FR 31962, Aug. 3, 1989; 61 FR 20491, May 7, 1996]



Sec. 801.301-70  Paperwork Reduction Act requirements.

    (a) It is the policy of the Government to keep to the minimum the 
amount of recordkeeping and reporting required of the public. This 
objective applies to the Department of Veterans Affairs acquisition 
system.
    (b) Contractors will not be requested to maintain systems of records 
unless prescribed in FAR or VAAR.
    (1) A deviation to this prohibition may be processed in accordance 
with 801.403 in order to allow the contracting officer to require 
contractor reporting or recordkeeping beyond that prescribed in the FAR 
and VAAR. The request for deviation will clearly specify what 
information or recordkeeping will be required and why it is required. 
The request will be signed by the head of the contracting activity.
    (2) The Deputy Assistant Secretary for Acquisition and Materiel 
Management (95) will review the request and upon concurrence will 
likewise submit the request to Office of Management

[[Page 145]]

and Budget (OMB) for approval as prescribed by the Paperwork Reduction 
Act of 1980. If approved, the Deputy Assistant Secretary for Acquisition 
and Materiel Management will send the approval back to the requester 
with the OMB clearance number.
    (c) In accordance with the Paperwork Reduction Act of 1980 (Pub. L. 
96-511), the reporting or recordkeeping provisions that are included in 
this VAAR have been approved by OMB and have been given the following 
approval numbers:

------------------------------------------------------------------------
                                                             Current OMB
   48 CFR part or section where identified and described     control No.
------------------------------------------------------------------------
809.504(d).................................................    2900-0418
819.7003...................................................    2900-0445
836.606-71.................................................    2900-0422
852.207-70.................................................    2900-0590
852.219-70.................................................    2900-0584
852.211-70.................................................    2900-0587
852.211-74.................................................    2900-0588
852.211-75.................................................    2900-0586
852.211-77.................................................    2900-0585
852.214-70.................................................    2900-0593
852.236-72.................................................    2900-0422
852.236-79.................................................    2900-0422
852.236-80 (Alt. I)........................................    2900-0422
852.236-82 through 852.236-85..............................    2900-0422
852.236-88.................................................    2900-0422
852.236-89.................................................    2900-0622
852.236-91.................................................    2900-0623
852.237-7..................................................    2900-0590
852.237-71.................................................    2900-0590
852.270-03.................................................    2900-0589
871.201-2..................................................    2900-0416
------------------------------------------------------------------------


[49 FR 12583, Mar. 29, 1984, as amended at 50 FR 790, Jan. 7, 1985; 54 
FR 31962, Aug. 3, 1989; 54 FR 40062, Sept. 29, 1989; 63 FR 17335, Apr. 
9, 1998; 63 FR 69217, Dec. 16, 1998; 67 FR 49258, July 30, 2002; 68 FR 
3467, Jan. 24, 2003]



Sec. 801.303  Publication and codification.

    The VAAR is codified as chapter 8 of title 48, Code of Federal 
Regulations. Codified changes to the VAAR will be published in the 
Federal Register. The Deputy Assistant Secretary for Acquisition and 
Materiel Management arranges distribution of the issues to VA 
contracting activities and the Office of Acquisition and Materiel 
Management should be notified of changes to the distribution list.

[49 FR 12583, Mar. 29, 1984, as amended at 54 FR 31962, Aug. 3, 1989]



Sec. 801.304  Department control and compliance procedures.

    Office of Acquisition and Materiel Management is responsible for 
ensuring that the VAAR and amendments thereto are developed as 
prescribed by the FAR.

[49 FR 12583, Mar. 29, 1984, as amended at 54 FR 31962, Aug. 3, 1989]

              Subpart 801.4_Deviations From the FAR or VAAR



Sec. 801.403  Individual deviations.

    (a) When contracting officers consider it necessary to deviate from 
the policies set forth in the FAR or VAAR, a request for authority to do 
so will be submitted to the Deputy Assistant Secretary for Acquisition 
and Materiel Management (93). The request will clearly set forth the 
circumstances warranting the deviation and nature of the deviation.
    (b) When a deviation in an individual case is authorized by the 
Deputy Assistant Secretary for Acquisition and Materiel Management, the 
authorization will be filed in the purchase or contract file, whichever 
is appropriate.

[54 FR 31962, Aug. 3, 1989, as amended at 61 FR 20491, May 7, 1996]



Sec. 801.404  Class deviations.

    The Deputy Assistant Secretary for Acquisition and Materiel 
Management is responsible for determining the need for class deviations. 
If determined necessary, the Deputy Assistant Secretary for Acquisition 
and Materiel Management will request deviation authority from the Deputy 
Secretary through the Senior Procurement Executive as well as complying 
with the provisions in FAR 1.404.

[49 FR 12583, Mar. 29, 1984, as amended at 52 FR 49016, Dec. 29, 1987; 
54 FR 31962, Aug. 3, 1989]

      Subpart 801.6_Career Development, Contracting Activity, and 
                            Responsibilities



Sec. 801.601  General.

    (a) This subpart establishes general contracting officer authority 
and responsibility. However, other provisions

[[Page 146]]

in both the FAR and the VAAR contain some contracting officer 
limitations and it is incumbent upon each contracting officer to be 
aware of those limitations.
    (b) Personnel, other than those designated in 801.602, may determine 
quality, quantity and delivery requirements for items or services to be 
purchased. However, under no circumstances will individuals who have not 
been delegated contracting authority commit the Government for purchases 
of supplies, equipment or services. Individuals making such commitments 
may be held financially liable for the amount of the obligation.



Sec. 801.602  Contracting officers.

    (a) Except as otherwise provided by law, VA regulations, VAAR and 
FAR, the authority vested in the Secretary to do the following is 
delegated to the Senior Procurement Executive and is further delegated 
to the Procurement Executive:
    (1) Execute, award, and administer contracts, purchase orders, and 
other agreements (including interagency agreements) for the expenditure 
of funds involved in the acquisition of personal property, service 
(including architect-engineer services), construction, issuing 
Government bills of lading, and for the sale of personal property, 
leases, sales agreements and other transactions;
    (2) Prescribe and publish acquisition policies and procedures;
    (3) Establish clear lines of contracting authority;
    (4) Manage and enhance career development of the procurement work 
force;
    (5) Examine, in coordination with the Office of Federal Procurement 
Policy, the procurement system to determine specific areas where 
Governmentwide performance standards should be established and applied, 
and to participate in the development of Governmentwide procurement 
policies, regulations and standards; and,
    (6) Oversee the competition advocate program.
    (b) Further delegation to execute, award, and administer contracts, 
purchase orders and other agreements will be made in accordance with the 
Contracting Officer Certification Program as prescribed in (VAAR) 48 CFR 
801.670 and 801.690.

[61 FR 1526, Jan. 22, 1996]



Sec. 801.602-2  Responsibilities.

    (a) In the administration of a contract, many problems can and do 
arise that make the advice and assistance of the General Counsel either 
desirable or necessary. The final decision as to the action to be taken, 
however, must be made by the contracting officer in each instance. To 
reduce to the absolute minimum the possibility of litigation resulting 
from his/her decision, the contracting officer shall, except as provided 
in paragraph (c) of this section, submit the problem through channels in 
sufficient detail to the General Counsel for advice or assistance.
    (b) While legal review and concurrence of the General Counsel is 
required prior to a default termination, in some cases where a quick 
response is necessary, this review can be expedited by express mailing 
or telefaxing the default letter and related documents which are 
required to make an evaluation directly to the General Counsel (025). 
The default termination letter should contain, at a minimum, the 
following:
    (1) The proposed termination (FAR 49.102);
    (2) An explanation of what necessitated the default, including the 
reasons why the contracting officer considers the contractor to be in 
default;
    (3) A statement that the factors set forth in FAR 49.402-3(f) have 
been fully considered; and
    (4) Final decision language and appeal rights.
    (c) Contracts containing a mutual termination clause may be 
terminated without reference to the General Counsel.

[49 FR 12583, Mar. 29, 1984, as amended at 54 FR 31962, Aug. 3, 1989]



Sec. 801.602-3  Ratification of unauthorized commitments.

    (a) Contracting officers shall not ratify contractual commitments 
made by other VA personnel without prior approval as prescribed below. 
Such unauthorized commitments include commitments made by other 
contracting

[[Page 147]]

officers which exceed their respective contracting authority as well as 
unauthorized commitments made by individuals lacking contracting 
authority.
    (1) At field stations, for supplies, services and construction, the 
approving authority is the director of the field facility concerned.
    (2) For central office contracting officers, for supplies, services, 
and construction, the approving authorities are the heads of the 
administrations and directors of the staff offices concerned, and the 
Deputy Assistant Secretary for Acquisition and Materiel Management.
    (3) For acquisitions of leasehold interest in real property the 
approving authority is:
    (i) The Chief Facilities Management Officer, Office of Facilities 
Management, for 1-5,000 square feet, and for 1-100 parking spaces 
costing less than $50,000 per annum.
    (ii) The Assistant Secretary for Management for 5,001-20,000 square 
feet, and for parking spaces exceeding 100 which cost less than $100,000 
per annum.
    (iii) The Deputy Secretary for 20,001 square feet and above, and for 
parking spaces exceeding 100 which cost more than $100,000 per annum.
    (4) This approval authority shall not be redelegated.
    (b) Requests received by contracting officers for ratification of 
commitments made by personnel lacking contracting authority shall be 
processed as follows:
    (1) The individual who made the unauthorized contractual commitment 
shall furnish the contracting officer all records and documents 
concerning the commitment and a complete written statement of facts, 
including, but not limited to, a statement as to why the procurement 
office was not utilized, why the proposed contractor was selected and a 
list of other sources considered, description of work to be performed or 
products to be furnished, estimated or agreed contract price, citation 
of appropriation available, and a statement of whether the contractor 
has commenced performance.
    (2) The contracting officer will review the file and forward it to 
the approving authority specified in paragraph (a) of this section with 
any comments or information which should be considered in evaluation of 
the request for ratification. If legal review is desirable, the 
approving authority will coordinate the request for ratification with 
the Office of the General Counsel or the District Counsel, as 
appropriate.
    (3) If ratification is authorized, the file will be returned to the 
contracting officer for issuance of a purchase order or contract, as 
appropriate.
    (c) In the case of otherwise proper contract awards made by 
contracting officers in excess of the limits of their delegated 
authority, the need for ratification will be brought to the attention of 
the head of the contracting activity. That individual will take such 
action as may be indicated to preclude future instances of such awards.

[54 FR 31962, Aug. 3, 1989, as amended at 61 FR 11585, Mar. 21, 1996; 63 
FR 69217, Dec. 16, 1998]



Sec. 801.602-70  Legal/technical review requirements to be met prior to 

contract execution.

    (a) The following categories of proposed contracts and agreements 
will be reviewed and concurred in by the Office of Acquisition and 
Materiel Management prior to contract execution. (Additionally, the 
Office of Acquisition and Materiel Management may, when considered 
necessary, request preaward technical review regardless of dollar 
value). Office of General Counsel legal reviews of such proposed 
contracts and agreements will be performed when requested and determined 
necessary by the Office of Acquisition and Materiel Management. 
(Excluded from this requirement is the National Acquisition Center which 
will perform its own technical reviews at the thresholds herein 
prescribed. The National Acquisition Center will receive preaward legal 
review of solicitation from the General Counsel staff located in Hines, 
Illinois).
    (1) All negotiated and sealed bid contracts (except as specified in 
(a)(2) and (a)(3)) exceeding $250,000 in either appropriated or 
nonappropriated funds. This includes indefinite quantity contracts when 
expenditures of $250,000 or more can reasonably be expected, and 
multiyear contracts in which $250,000

[[Page 148]]

or more will be expended over the life of the contract. (Note also that 
multiyear contracts also require review any time the cancellation 
ceiling exceeds 20 percent of the contract amount (see 817.1)).
    (2) All fixed price, sealed bid construction contracts involving 
$500,000 or more in either appropriated or unappropriated funds.
    (3) All 8(a) contracts exceeding $500,000.
    (4) All proposed agreements and contracts coming within the purview 
of one or more of the following:
    (i) Contracts for insurance.
    (ii) Utility service agreements involving $50,000 or more.
    (iii) Contracts for consulting services (see subpart 837.2) and 
management and professional services (see 837.271).
    (iv) Contracts for research or research and development involving 
$50,000 or more.
    (v) Automatic data processing equipment, when purchased from other 
than a Federal Supply Schedule contract, involving $50,000 or more.
    (vi) Competitive contracts exceeding $1.5 million and noncompetitive 
contracts exceeding $500,000 for the acquisition of scarce medical 
specialist services acquired under the authority of 38 U.S.C. 7409.
    (vii) Competitive contracts exceeding $1.5 million and 
noncompetitive contracts exceeding $500,000 for the acquisition of 
health-care resources acquired under the authority of 38 U.S.C. 8151-
8153.
    (viii) Agreements with other Federal agencies regardless of dollar 
value. Those agreements of $5,000 or more will be forwarded to General 
Counsel for legal review. VA/DoD Sharing Agreements executed under the 
authority of Public Law 97-174 (38 U.S.C. 8111) and sections 201-206 of 
Public Law 102-585 are exempt from review by the Office of Acquisition 
and Materiel Management; however, they must be approved in accordance 
with VA Manual M-1, Part I, Chapter 1, Section XI.
    (ix) Contracts for ADP software exceeding $10,000.
    (x) ADP software licensing agreements for ADP software exceeding 
$10,000 (all software licensing agreements require technical review).
    (5) All proposed letter contracts and ensuing formal contracts 
involving expenditures of $5,000 or more.
    (6) Any proposed agreement that is unique, novel or unusual 
(including all consignment agreements, regardless of anticipated dollar 
value--except those established and provided in Federal Supply Schedule 
Contracts).
    (7) Step One of two-step sealed bid procurements when the 
anticipated value is more than $200,000.
    (b) The following categories of proposed contractual actions require 
the concurrence of the General Counsel:
    (1) Contract modifications, terminations (including final decision 
(cure) letters), disputes and claims in excess of $25,000 ($50,000 for 
contracts awarded by the Office of Facilities Management).
    (2) Contract modifications granting a time extension of more than 20 
days.
    (3) Assignment of claims.
    (4) Proposed awards to other than the low evaluated bidder/offeror.
    (c) In addition to the requirements of paragraphs (a) and (b) of 
this section, the following require review and concurrence of the 
General Counsel:
    (1) Changes or revisions to all contract clauses.
    (2) Changes or revisions to prescribed VA contract forms.
    (d) Utility construction and connection contracts which are 
developed in the Office of Facilities Management and cost $50,000 or 
more will be be reviewed by General Counsel and the Chief Facilities 
Management Officer, Office of Facilities Management.
    (e) When legal assistance is requested by any Central Office 
contracting activity, the contracting officer will brief the General 
Counsel regarding the facts and points of issue to facilitate prompt 
resolution.
    (f) With regard to solicitations and contracts awarded and 
administered by the Central Office contracting activities, the General 
Counsel will be requested to participate in conferences where it is 
expected that legal problems or contract provisions will be considered, 
and in meetings attended by legal representatives of private parties or 
other Government agencies. Assigned procurement counsel will be 
requested to participate in the drafting

[[Page 149]]

of correspondence involving controversial or sensitive contractual 
matters of a significant nature.
    (g) All protests against award will be reviewed by General Counsel 
in accordance with the provisions specified in 48 CFR 833.103.
    (h) Excluded from these legal review requirements are:
    (1) Agreements, licenses, easements, or deeds dealing with 
management, sale, or lease of properties acquired by VA as a result of 
liquidation of guaranteed, direct, acquired or vendee loans.
    (2) Orders or contracts for procurement of leased telecommunications 
systems, installation of and changes to telephone PBX systems at 
individual Department of Veterans Affairs locations or orders issued 
under GSA area-wide contracts with the American Telephone and Telegraph 
Company and local telephone companies.
    (i) If a change order (unilateral agreement) is essential for the 
logical process of the contract, the Office of Acquisition and Materiel 
Management, Acquisition Review Division shall be called prior to issuing 
the document. (This requirement does not apply to change orders issued 
by the Office of Facilities Management.)
    (j) The following apparent low responsive and responsible bids/
offers with the respective solicitations will be submitted for the 
review of the Deputy Assistant Secretary for Acquisition and Materiel 
Management, Acquisition Review Division, prior to award:
    (1) Negotiated contract actions in the Office of Facilities 
Management which exceed $2 million.
    (2) Bids/offers for construction contracts to be awarded by VHA 
facilities which exceed $5 million.
    (3) Bids/offers for service contracts, including A/E, which exceed 
$2 million, and
    (4) Bids/offers for supply contracts which exceed $5 million in 
total evaluated cost (excluding FSS contracts awarded by VA National 
Acquisition Center).

[49 FR 12583, Mar. 29, 1984, as amended at 50 FR 791, Jan. 7, 1985; 51 
FR 23066, June 25, 1986; 52 FR 28559, July 31, 1987; 52 FR 49016, Dec. 
29, 1987; 54 FR 31963, Aug. 3, 1989; 55 FR 31391, Aug. 2, 1990; 58 FR 
31914, June 7, 1993; 61 FR 11585, Mar. 21, 1996; 68 FR 3468, Jan. 24, 
2003]



Sec. 801.602-71  Processing contracts for legal/technical review.

    (a) All competitively awarded solicitations requiring legal and/or 
technical review will have such reviews completed prior to opening of 
bids or proposals. The contracting officer will fully evaluate technical 
and legal review comments prior to opening bids or proposals. Potential 
bidders/offerors will be advised of changes to the solicitation by 
amendment and afforded sufficient time for evaluation prior to opening 
of bids or offers.
    (b) Veterans Health Administration (VHA) Field Facilities, VA 
National Acquisition Center. (1) Proposed contracts or agreements 
specified in 801.602-70(a) (1), (2), (3), (4) (iii) through (v), (5), 
(6) and (7) will be forwarded by the contracting officer directly to the 
Deputy Assistant Secretary for Acquisition and Materiel Management, 
Acquisition Review Division. The Deputy Assistant Secretary for 
Acquisition and Materiel Management will review the submissions and when 
applicable, forward them directly to the General Counsel (025).
    (2) Proposed contracts and agreements for scarce medical specialist 
services or for the mutual use or exchange of use of health-care 
resources, as specified in 801.602-70(a)(4)(vi) and (a)(4)(vii), will be 
forwarded to Central Office in accordance with Veterans Health 
Administration directives and VA Manual M-1, Part 1, Chapter 34, for 
review and submission to the Office of the General Counsel (025).
    (3) Proposed interagency agreements specified in 801.602-
70(a)(4)(viii) will be forwarded by the approving official to the Deputy 
Assistant Secretary for Acquisition and Materiel Management, Program 
Development and Evaluation Division. The Deputy Assistant Secretary for 
Acquisition and Materiel Management will review the submissions and 
forward them directly to the General Counsel (025).
    (4) Proposed facility-level modification specified in 801.607-70(b) 
will be forwarded by the contracting officer to General Counsel (025), 
through the Deputy Assistant Secretary for Acquisition and Materiel 
Management, Acquisition Review Division.

[[Page 150]]

    (5) Proposed final decisions or settlement agreements specified in 
801.602-70(b) will be forwarded by the contracting officer directly to 
the Deputy Assistant Secretary for Acquisition and Materiel Management. 
The Deputy Assistant Secretary for Acquisition and Materiel Management 
will review the submissions and forward them to the General Counsel 
(025).
    (6) Proposed revisions to contract clauses specified in 801.602-
70(c) will be forwarded by the contracting officer directly to the 
Deputy Assistant Secretary for Acquisition and Materiel Management. If 
concurred in, the Deputy Assistant Secretary for Acquisition and 
Materiel Management will forward them directly to the General Counsel.
    (c) Veterans Benefits Administration field facilities. (1) All 
proposed State reimbursement contracts and Guidance Center and 
Vocational Rehabilitation contracts which are anticipated to ultimately 
involve the expenditure of $100,000 or more, will be forwarded by the 
contracting officer directly to the Director, Vocational Rehabilitation 
and Education Service, for review and approval. The Director, Vocational 
Rehabilitation and Education Service will review the submissions and 
forward them to the General Counsel.
    (2) Any other proposed agreement or contract specified in 801.602-
70(a) will be forwarded by the facility Director to the Chief Benefits 
Director for Field Operations (201) for coordination with Director(s) of 
the concerned service(s) and submission to the General Counsel.
    (3) Any other element of contracting falling within 801.602-70 (b) 
and (c) will be processed in accordance with paragraph (b)(2) of this 
section.
    (d) Central office. Any element of contracting prescribed for legal 
review in 801.602-70 originating in central office, will be submitted 
for legal review by the contracting officer, or approving official in 
the case of agreements with other Government agencies through the Deputy 
Assistant Secretary for Acquisition and Materiel Management, Acquisition 
Review Division. (Except that in the case of Office of Facilities 
Management contracts, a selected sample of contracts will be processed 
through the Office of Acquisition and Materiel Management, Acquisition 
Review Division. All other Office of Facilities Management contract 
actions identified in 801.602-70 will be sumitted for legal review in 
accordance with Office of Facilities Management procedures).
    (e) All bids/offers required to be reviewed prior to award in 
accordance with 801.602-70(j), will be forwarded to the Deputy Assistant 
Secretary for Acquisition and Materiel Management, Acquisition Review 
Division, with a cover letter identifying:
    (1) The date in which the award is anticipated;
    (2) Responsibility determination results or efforts ongoing;
    (3) Determinations of price reasonableness;
    (4) Explanation of proposed award to other than low responsible 
bidder/offeror.

[49 FR 12583, Mar. 29, 1984, as amended at 52 FR 28559, July 31, 1987; 
52 FR 49017, Dec. 29, 1987; 54 FR 31963, Aug. 3, 1989; 54 FR 40062, 
Sept. 29, 1989; 61 FR 11585, Mar. 21, 1996; 68 FR 3468, Jan. 24, 2003]



Sec. 801.602-72  Documents to be submitted for legal review.

    The following documents are to be submitted for legal review:
    (a) For proposed construction contracts, one copy of all 
solicitation documents, excluding drawings. These documents will be 
submitted no later than at the time they are furnished to prospective 
bidders. Where feasible, these documents should be submitted for review 
prior to the time they are furnished to prospective bidders.
    (b) For proposed contracts and agreements for scarce medical 
specialist services or for the mutual use or exchange of use of health-
care resources, as specified in 801.602-70(a)(4)(vi) and (a)(4)(vii), 
the documents referred to in VA Manual M-1, Part 1, Chapter 34.
    (c) For all other proposed contracts and agreements, a copy of the 
documents to be used in the solicitation and/or award of contract, 
including any other documents which support the proposed procurement 
action, e.g., justification and approval in the case of noncompetitive 
procurement. Solicitation documents will be submitted no later than at 
the time they are mailed

[[Page 151]]

to prospective bidders. Where feasible, these documents should be 
submitted for review prior to the time they are mailed to prospective 
bidders.
    (d) For contract modifications described in 801.602-70(b) and 
801.602-71(b)(4) and (d):
    (1) A draft of the proposed modification. This shall be prepared on 
an SF (Standard Form) 30, Amendment of Solicitation/Modification of 
Contract, and shall specify the exact language to be used. Changes in 
work, time and cost must be specifically described;
    (2) A statement describing the need for the changed work. This 
should also be accompanied by any backup documentation, including a copy 
of the general statement of work in the original contract plus any 
existing contract language which will be modified. Include a statement 
that the work covered by the proposed modification is or is not within 
the original scope of the contract, setting forth fully the facts 
considered in reaching the conclusion;
    (3) A statement containing an analysis on what necessitated the 
modification, e.g., design error, technical change, medical center 
requirements;
    (4) The contracting officer's technical representative (COTR) 
technical evaluation of the proposed change;
    (5) For construction modifications and, where applicable for 
architect-engineer (A/E) modifications, a copy of drawings which the 
COTR has marked up to delineate the proposed changed work. If 
appropriate, include a copy of the pertinent technical specifications. 
Whenever a proposed contract modification involves numerous changes to 
drawings and specifications for a Central Office project, the drawings 
and specifications will be available for review in the office of the 
Project Director;
    (6) Costing information including:
    (i) The contractor's cost proposal in the format required by the 
contract.
    (ii) The COTR's independent cost evaluation.
    (iii) The A/E's independent cost evaluation.
    (iv) Contracting officer's Price Negotiation Memorandum (PNM) in 
accordance with VAAR 815.808. For Office of Facilities Management 
contracts, the PNM may be submitted by either the contracting officer or 
COTR.
    (v) For A/E contracts, a listing of the fees awarded in the original 
contract and previous modifications.
    (vi) For A/E working drawing contracts, a statement regarding the 
actual or estimated cost of the original construction and any estimated 
change to the overall project cost as a result of the proposed 
modification.
    (vii) Any other relevant costing information, such as independent 
market research, which was or will be used as negotiation criteria.
    (7) A concurrence on the memorandum from the appropriate office 
indicating that funds are available or a statement concerning the 
actions which must be taken to secure the required funds; and
    (8) The names and telephone numbers of the contracting officer and 
COTR.
    (e) For bids/offers submitted as required by 801.602-70(j), the 
following documents will be provided:
    (1) Request for contract action, including justification of need.
    (2) The solicitation.
    (3) Abstracts of bids/offers.
    (4) Price negotiations memorandum, if applicable.
    (5) Justification and approval (see FAR 6.303), if applicable.
    (6) Documents relevant to determination of contractor's 
responsibility.
    (7) Documents relevant to price reasonableness.

[49 FR 12583, Mar. 29, 1984, as amended at 51 FR 23066, June 25, 1986; 
52 FR 28559, July 31, 1987; 52 FR 49017, Dec. 29, 1987; 54 FR 31964, 
Aug. 3, 1989; 54 FR 40062, Sept. 29, 1989; 61 FR 11586, Mar. 21, 1996; 
61 FR 20491, May 7, 1996; 68 FR 3468, Jan. 24, 2003]



Sec. 801.602-73  Certification by reviewing official.

    In submitting proposed agreements or contracts received from field 
stations to the General Counsel, the Central Office reviewing officials 
will state on the transmittal memorandum or within the file that the 
proposal conforms to the Federal Acquisition Regulations and Department 
of Veterans Affairs Acquisition Regulations to the best of their 
knowledge.

[49 FR 12583, Mar. 29, 1984, as amended at 61 FR 11586, Mar. 21, 1996]

[[Page 152]]



Sec. 801.602-74  Results of General Counsel's legal review.

    (a) Upon completion of the review, the General Counsel will advise 
the appropriate Central Office activity or contracting officers as to 
whether the proposal was approved as submitted or provide them with the 
recommended changes. The appropriate Central Office activity will advise 
the contracting officer as to whether: (1) The submission was approved 
as is, or (2) provide a copy of the changes required. Where changes are 
required, the contracting officer will take immediate action to amend 
the solicitation document.
    (b) The General Counsel's review will be completed as expeditiously 
as possible, with due regard to those procurement actions where 
circumstances dictate an unusually short period for completing 
procurement action.



Sec. 801.603  Selection, appointment, and termination of appointment.



Sec. 801.603-1  General.

    The policy and procedures for the selection, appointment, and 
termination of appointment of contracting officers are established in 
VAAR 801.690, The Contracting Officer Certification Program, and as 
otherwise provided in VAAR 801.670 and its subsections.

[52 FR 24010, June 26, 1987]



Sec. 801.603-70  Representatives of contracting officers.

    (a) In carrying out the responsibilities of FAR 1.602-2, the 
contracting officer may designate another Government contracting 
officer, or other Government employees, or another contractor:
    (1) To furnish technical guidance and advice or generally supervise 
the work performed under the contract. Such designations will be in 
writing and will define the scope and limitation of the representative's 
authority; and, will be addressed to the designee with a copy to be 
forwarded to the contractor except as indicated in 801.603-71. Except as 
provided in paragraph (c) of this section representatives will not be 
authorized to make any commitments or changes which will affect the 
price, quantity, quality or delivery terms. (All changes to a contract 
must be authorized by a contracting officer acting within the scope of 
his/her authority.)
    (2) To take actions authorized in the contract, such as issue 
delivery orders, reject unsatisfactory items, order replacement of such 
items (materials or services) and, when necessary, declare contractor in 
default on specific delivery orders. Except for blood, this authority 
will be delegated only to other Government contracting officers under 
centralized indefinite delivery type contracts and the contract will so 
state. Centralized contracts for blood will provide that contracting 
officers at ordering offices are authorized to designate representatives 
and alternate representatives to place delivery orders subject to the 
same restrictions stated in paragraph (a)(3) of this section.
    (3) To place oral or other informal delivery orders for items such 
as, but not limited to, bread, milk, and blood against local indefinite 
delivery type contracts on which blanket purchase arrangements have been 
established and funds have been obligated. The designation of 
representatives and alternates will be in writing and will define the 
scope and limitations of the representative's authority, and will be 
addressed to the employee(s) with a copy to the contractor. Such 
designations will be made only by the prime contracting officer and are 
not redelegable.
    (b) In the administration of research and development contracts, any 
representative appointed pursuant to this section must be acceptable 
both to the contracting officer and the administration head or staff 
office director concerned. When it is necessary to designate a 
representative under this paragraph (b), the clause in 852.270-1 will be 
observed.

[49 FR 12583, Mar. 29, 1984, as amended at 52 FR 24010, June 26, 1987; 
54 FR 40062, Sept. 29, 1989]



Sec. 801.603-71  Representatives of contracting officers; receipt of 

equipment, supplies, and nonpersonal services.

    (a) Except as provided in paragraphs (b), (c) and (d) of this 
section, any contracting officer may, without prior notification to the 
contractor or vendor,

[[Page 153]]

designate the Chief, Storage and Distribution Section, or other 
competent personnel, to represent him/her in receiving and inspecting 
supplies, equipment and services at his/her facility. Duties such as, 
but not limited to, the following will be performed by these designees:
    (1) The inspection and certification as to compliance with the 
quality and quantity requirements of the purchase order or contract; and
    (2) Inspection of supplies and equipment for condition and quantity 
and the acceptance of supplies, equipment, and services, based on 
quality inspection made by other authorized representatives.
    (b) The Director, Library Services, VA Central Office, and the 
Chief, Library Service, at a field facility, are designated the 
representatives of the contracting officer to receive, inspect and 
accept library books, newspapers, and periodicals. Purchase documents 
will specify that delivery will be made direct to the library.

[49 FR 12583, Mar. 29, 1984, as amended at 54 FR 31964, Aug. 3, 1989; 54 
FR 40062, Sept. 29, 1989; 61 FR 11586, Mar. 21, 1996; 63 FR 69217, Dec. 
16, 1998]



Sec. 801.670  Special and limited delegation.

    The authority vested in the Secretary to execute, award and 
administer contracts, purchase orders and other agreements for the 
expenditure of funds involved in the acquisition of the specific 
services set forth in this 801.670 and its subsections, is hereby 
delegated to the Senior Procurement Executive for further delegation to 
those employees appointed or designated to the positions specified in 
these subsections.

[49 FR 12583, Mar. 29, 1984, as amended at 54 FR 31964, Aug. 3, 1989]



Sec. 801.670-1  Issue of Government bills of lading--transportation of 

remains of deceased beneficiaries.

    The Chief, Medical Administration Service (MAS), or the person 
designated by the medical center director to perform MAS functions, at a 
Department of Veterans Affairs medical center, is delegated authority to 
issue and to sign as ``Issuing Officer,'' Government bills of lading for 
the shipment of the remains of beneficiaries expiring in a Department of 
Veterans Affairs medical center.

[49 FR 12583, Mar. 29, 1984. Redesignated at 52 FR 24010, June 26, 1987, 
as amended at 63 FR 69217, Dec. 16, 1998]



Sec. 801.670-2  Issue of Government bills of lading--transportation of 

property.

    (a) Authority to issue and sign Government bills of lading for the 
transportation of supplies, material, and equipment is delegated to the 
following:
    (1) Chief, Warehouse Section, VA Forms and Publications Depot.
    (2) Traffic Manager, Office of Acquisition and Materiel Management, 
Central Office.
    (b) The employees named in paragraph (a) of this section may 
designate one or more of their subordinates as a contracting officer; 
and, authority is hereby delegated to such subordinates to issue and 
sign Government bills of lading for the transportation of supplies, 
material, and equipment. Designations will be in writing and 
specifically set forth the scope and limitation of the designee's 
authority.

[49 FR 12583, Mar. 29, 1984. Redesignated at 52 FR 24010, June 26, 1987, 
and amended at 54 FR 31964, Aug. 3, 1989; 54 FR 40062, Sept. 29, 1989; 
63 FR 69217, Dec. 16, 1998]



Sec. 801.670-3  Medical, dental, and ancillary service.

    (a) The Chief of Staff, the physician assigned the responsibility 
for the ambulatory care function, and Chief, Medical Administration 
Service (MAS), or the person designated by the medical center director 
to perform MAS funtions, at a Department of Veterans Affairs facility 
are delegated authority to execute authorizations for medical, dental, 
and ancillary services under $10,000 per authorization when such 
services are not available from existing contracts or agreements. Forms 
specified in part 853 of this chapter will be used for this purpose and 
when ordering such services from existing contracts.
    (b) The contracting officers named in paragraph (a) of this section 
may designate one or more of their subordinates to execute the forms for 
purposes stated in paragraph (a) of this section.

[[Page 154]]

Designations will be in writing and will specifically set forth the 
scope and limitations of the designee's authority.

[49 FR 12583, Mar. 29, 1984, as amended at 50 FR 791, Jan. 7, 1985. 
Redesignated at 52 FR 24010, June 26, 1987, and amended at 54 FR 31964, 
Aug. 3, 1989; 63 FR 69217, Dec. 16, 1998]



Sec. 801.670-4  National Cemetery System.

    Authority for the National Cemetery System to procure supplies, 
equipment and nonpersonal services is delegated as follows:
    (a) Authority to issue and sign Government bills of lading for the 
transportation of headstones and markers is further delegated to:
    (1) Chief, Centralized Contracting Division, Office of Operations 
Support.
    (2) Freight Rate Specialist, Office of Operations Support.
    (b) Authority to procure, in emergency situations when the servicing 
supply organization cannot be utilized, and in accordance with the 
provisions of FAR Part 13, supplies, equipment, and nonpersonal services 
(including construction) required for the operation of national 
cemeteries is delegated to:
    (1) Director, National Cemetery System, and Director, Office of 
Field Operations, National Cemetery System.
    (2) Director, National Cemetery Area Office.
    (c) Authority to procure items and nonpersonal services up to $300 
per transaction for the operation of national cemeteries is delegated to 
the Director of each national cemetery. The authority is to be used only 
in emergency situations when the servicing supply organization cannot be 
utilized, and the method of purchase is limited to the use of SF 44, 
Purchase Order--Invoice--Voucher, (FAR 13.306).

[49 FR 12583, Mar. 29, 1984. Redesignated and amended at 52 FR 24010, 
June 26, 1987; 54 FR 31964, Aug. 3, 1989; 63 FR 69217, Dec. 16, 1998]



Sec. 801.670-5  Letters of agreement.

    (a) Authority to execute, award, and administer letters of agreement 
(subject to the limitation prescribed in 837.2) is delegated to the 
following:
    (1) General Counsel.
    (2) Deputy Assistant Secretary for Human Resources Management.
    (3) Under Secretary for Health.
    (4) Under Secretary for Benefits.
    (5) Under Secretary for Memorial Affairs.
    (6) Deputy Assistant Secretary for Acquisition and Materiel 
Management
    (7) Inspector General.
    (8) Directors, Regional Medical Education Centers (limited to 
obtaining instructors and training pursuant to section 7471 of Title 38, 
United States Code).
    (9) Directors, Domiciliary and Medical Centers and Research and 
Development Service Directors authorized to sign for the Chief Research 
and Development Officer (limited to obtaining peer review of research 
(see 837.2)).
    (b) The contracting officers named in paragraphs (a) (1) through (7) 
of this section may designate one or more subordinates, and authority to 
execute letters of agreement is hereby delegated to such subordinates. 
Such subordinates will be no more than one organizational level below 
the contracting officers designated in paragraph (a) of this section, 
except that the Under Secretary for Health may designate the Veterans 
Integrated Service Network Directors. All such designations will be in 
writing, will specifically state the scope and limitations of the 
designees' contractual authority, and will also specifically prohibit 
further delegation by the designees. Copies of the delegation will be 
submitted to the Office of Acqusition and Materiel Management, 
Acquisition Administration Team.
    (c) Copies of all letters of agreement issued by the designees 
identified in paragraphs (a) and (b) of this section will be forwarded 
to the servicing contracting activity in order that the procurement 
action may be entered into the Federal Procurement Data System.

[49 FR 12583, Mar. 29, 1984, as amended at 50 FR 791, Jan. 7, 1985. 
Redesignated at 52 FR 24010, June 26, 1987, and further amended at 54 FR 
31964, Aug. 3, 1989; 54 FR 40062, Sept. 29, 1989; 61 FR 11586, Mar. 21, 
1996; 63 FR 69218, Dec. 16, 1998]



Sec. 801.680  Contracting authority of the Inspector General.

    (a) As provided by section 6(a) of Pub. L. 95-452 (October 12, 
1978), the Inspector General is authorized to enter into contracts and 
other arrangements for audits, studies, analyses, and other

[[Page 155]]

services with public agencies and with private persons, and to make such 
payments as may be necessary to carry out the provisions of the Act, to 
the extent and in such amounts as may be provided in advance by 
appropriations Acts.
    (b) In exercising the special authority provided in paragraph (a) of 
this section, the Inspector General may request the assistance of the 
servicing Acquisition and Materiel Management Service in developing 
appropriate contract or agreement documents.
    (c) If, in the opinion of the Inspector General, a reason to 
exercise the special authority does not exist, the services required by 
the Inspector General shall be obtained by the servicing Acquisition and 
Materiel Management Service or the local purchase and contract activity 
in accordance with the provisions of FAR and VAAR.
    (d) Contracts entered into under the authority of paragraph (a) of 
this section are subject to the provisions of the Federal Acquisition 
Regulation. In addition, such contracts are subject to those provisions 
of VAAR which implement and supplement the FAR on matters other than 
those stemming from or related to delegations of the Secretary's 
contracting authority (e.g., management controls and approvals specified 
in subpart 837.2 will not apply to contract actions under the contract 
authority of the Inspector General).

[49 FR 12583, Mar. 29, 1984, as amended at 50 FR 791, Jan. 7, 1985; 54 
FR 31964, Aug. 3, 1989; 61 FR 11586, Mar. 21, 1996; 63 FR 69218, Dec. 
16, 1998]



Sec. 801.690  VA Contracting Officer Certification Program.

    The policy and procedures for the VA-wide Contracting Officer 
Certification Program (COCP) are established in this section and 
subsections.

[52 FR 24010, June 26, 1987]



Sec. 801.690-1  Definitions.

    (a) Head of the Contracting Activity (HCA) means an individual who 
has overall responsibility for managing the procurement program assigned 
to the activity. HCA designations are prescribed in VAAR 802.100. The 
HCA has the authority to appoint contracting officers with authority to 
conduct procurements of up to and including $25,000 or the maximum order 
limitation for orders placed against established contracts, and 
terminate such appointments.
    (b) Recommending official means an individual who is authorized by 
VAAR 801.690 and its subsections to recommend to a designating official 
that an individual be appointed as a contracting officer.
    (c) Designating official means an individual who is authorized to 
appoint and terminate contracting officers.
    (d) Contracting Officer Certification Board (COCB) means the group 
of Department officials, listed in VAAR 801.690-3(c), that evaluates and 
recommends to the designating official individuals as contracting 
officers at the Intermediate and Senior levels of authority, which 
levels are described in VAAR 801.690-2(c).
    (e) Contracting Officer Certification Program (COCP) means a program 
designated by Department management for the selection, appointment, and 
termination of appointment of contracting officers. Training, 
experience, education, performance, and conduct are the objective 
criteria reviewed prior to appointment as contracting officer.
    (f) Qualifications means an employee's record of training, 
experience, education, performance, and conduct which are reviewed prior 
to designation as contracting officer. These ``qualifications'' are not 
identical, supplemental, or related to the position qualification 
requirements published by the Office of Personnel Management in Handbook 
X-118.
    (g) Appointment means the delegation of authority to any employee to 
enter into, administer or terminate contracts, and make related 
determinations and findings. Appointment provisions are identified in 
801.690-5.
    (h) Certification means an evaluation that the candidate has the 
experience, education and training to perform properly the duties of a 
contracting officer.
    (i) Selection means that an employee has been appointed or certified 
as a contracting officer. The ``selection'' process is not identical, 
supplemental or related to any process whereby an

[[Page 156]]

employee is placed into a position by any competitive action (merit 
promotion) or noncompetitive action (reassignment, reinstatement). 
Selection provisions are identified in 801.690-4.
    (j) Termination means the revocation of contracting authority of a 
contracting officer by the designating official. Termination provisions 
are identified in 801.690-6.
    (k) Acquisition Training Program (ATP) means a program designed to 
provide contracting officers with classroom knowledge to further develop 
their acquisition skills.

[52 FR 24010, June 26, 1987, as amended at 54 FR 31964, Aug. 3, 1989; 54 
FR 40062, Sept. 29, 1989]



Sec. 801.690-2  General.

    (a) The VA COCP applies to all programs of the Department of 
Veterans Affairs except for those contracting officers appointed 
pursuant to the Inspector General Act (Pub. L. 95-452).
    (b) A certification of appointment is not required for contracting 
officers designated in 801.670 who exercise special and limited 
delegations of authority.
    (c) The COCP is based on three levels of authority:
    (1) Basic. Expenditures up to and including $25,000 or the maximum 
order limitation for orders placed against established contracts.
    (2) Intermediate. Expenditures up to and including $100,000 for 
negotiation and $1,000,000 for sealed bids.
    (3) Senior. Unlimited.

[52 FR 24011, June 26, 1987, as amended at 54 FR 31964, Aug. 3, 1989]



Sec. 801.690-3  Responsibility for administration of Contracting Officer 

Certification Program (COCP).

    (a) The Deputy Assistant Secretary for Acquisition and Materiel 
Management (A&MM). The Deputy Assistant Secretary for A&MM is 
responsible for:
    (1) Administering the COCP to ensure that the certification board 
evaluates, recommends acceptance, rejection, or termination of 
applicants at the Senior and Intermediate Levels according to the 
requirements of the COCP.
    (2) Developing additional training and the level of certification as 
required by the COCP.
    (3) Serving as the designating official, and in that capacity 
appoints or terminates contracting officers at the Senior and 
Intermediate Levels of authority.
    (b) Heads of contracting activities (HCA). The HCA is responsible 
for:
    (1) Implementing and maintaining an effective and efficient program 
for the procurement of personal property and nonpersonal services 
assigned to the activity.
    (2) Establishing adequate controls to ensure compliance with 
applicable laws and regulations.
    (3) Appointing or terminating appointments of contracting officers 
at the Basic Level within their activity. Each HCA will establish 
procedures for the appointment or termination of appointment of 
contracting officers at the Basic Level to include maintenance of 
records on individual training and experience, as well as appointment 
and termination actions.
    (4) Recommending to the designating official the appointment or 
termination of appointment of contracting officers at the Intermediate 
and Senior Levels of authority based on candidate qualifications, as 
well as a valid organizational need.
    (c) Contracting Officer Certification Board (COCB). The COCB may 
receive, evaluate, and recommend to the designating official, candidates 
for contracting officer positions at the Intermediate and Senior Levels. 
The board will be chaired by the Associate Deputy Assistant Secretary 
for Acquisitions, OA&MM, and membership will consist of:
    (1) Chief Administrative Officer (VHA) (or designee),
    (2) Deputy Facilities Management Officer (or designee),
    (3) Acquisition Training Officer, and
    (4) Additional members to be selected on an ad hoc basis depending 
on the organizational need for certified contracting officers.
    (d) Acquisition Training Officer (ATO). The ATO in the OA&MM will 
serve as the Executive Secretary to the COCB. The ATO will coordinate 
all requests for certification with the COCB. Upon the decision by the 
Deputy Assistant Secretary for A&MM, the ATO will respond to the HCA 
with a copy of the

[[Page 157]]

appropriate action. In addition, the ATO will maintain records on the 
development and administration of the Contracting Officer Certification 
Program (COCP) as well as the records on individual training, 
certification and termination actions at the Intermediate and Senior 
Contracting Officer Level. The ATO will identify all records created and 
maintained and ensure they are scheduled for disposal by the Office of 
Acquisition and Materiel Management Records Officer.

[52 FR 24011, June 26, 1987, as amended at 54 FR 31964, Aug. 3, 1989; 54 
FR 40062, Sept. 29, 1989; 63 FR 69218, Dec. 16, 1998]



Sec. 801.690-4  Selection.

    (a) Contracting officers (CO) shall be appointed only in those 
instances where a valid organizational need for certified personnel can 
be demonstrated. Such factors to be considered in making these 
assessments include complexity of work, volume of actions and 
organizational structure.
    (b) Requests for appointment of contracting officers will be made in 
writing. Request for appointments at the Senior and Intermediate Level 
will be signed by the HCA and forwarded to the Acquisition Training 
Officer (90) for processing. The request for appointment will include at 
a minimum a justification of need, and a qualification statement for the 
candidate. Requests for appointment of HCAs as contracting officers will 
be made at one level above the head of the contracting activity.
    (c) The COCB and HCAs (limited to Basic Level) will evaluate 
candidates for CO certifications based on training, experience, and 
performance, and consideration of academic education, in addition to 
meeting standards of ethical conduct and avoiding conflicts of interest. 
Minimum qualifications of contracting officers are based on a 
combination of training, experience, and performance with consideration 
of relevant academic credit or degrees earned. The following minimum 
requirements are established for designation of contracting officers:
    (1) Basic level. (i) Training--Forty hours of basic acquisition or 
small purchase training that can be accomplished on the job or in 
formalized courses of instruction. If on-the-job training is conducted, 
it must be documented for the record and include a brief description of 
the duties and responsibilities that comprised that training.
    (ii) Experience. Three years of progressive assignments in an 
acquisition related field within the last five years and demonstrated 
broad technical ability related to acquisition.
    (iii) Performance--Satisfactory rating.
    (iv) Education (desired)--High school diploma.
    (2) Intermediate level--(i) Training--(A) ATP Level I--Basic 
Acquisition.
    (B) ATP Level II--Advanced Contract Administration.
    (C) ATP Level III--Cost and Price Analysis.

ATP courses may include tests or other assessments to indicate what 
information has been learned by the student. An assessment will then be 
made to determine if additional formal or on-the-job training is needed.
    (ii) Experience. Two years of progressive work assignments in an 
acquisition related field leading to broader technical ability within 
the last five years.
    (iii) Performance. Satisfactory rating.
    (iv) Education (desired). Associate degree.
    (3) Senior level--(i) Training--(A) ATP Level I--Fundamentals of 
Acquisition.
    (B) ATP Level II--Advanced Contract Administration.
    (C) ATP Level III--Cost and Price Analysis.
    (D) ATP Level IV--Contract Negotiation.


ATP courses may include tests or other assessments to indicate what 
information has been learned by the student. An assessment will then be 
made to determine if additional formal or on-the-job training is needed.
    (ii) Experience. Three years of progressive assignments in an 
acquisition related field within the last five years and demonstrated 
broad technical ability related to acquisition.
    (iii) Performance. Satisfactory rating.
    (iv) Education (desired). Bachelor degree.

[[Page 158]]

    (d) Other training courses may be substituted for the prescribed 
core curriculum provided that the training meets equivalent content and 
difficulty per course. Recommending officials must fully document and 
justify equivalent courses when recommending candidates for appointment 
as contracting officers. The COCB will review and determine if 
equivalent courses may be appropriately substituted. HCAs are 
responsible for providing their subordinates with advice and assistance 
necessary to complete required training.
    (e) Candidates who achieve additional academic credit beyond the 
desired education level may be eligible to receive credit toward 
experience for this additional academic credit. Substitutions of this 
nature must be fully justified and documented by the recommending 
official and forwarded to the COCB for evaluation and appropriate 
action. Candidates will receive a maximum credit of 1 year of experience 
when substitutions are approved for the Intermediate and Senior Level. A 
maximum credit of 6 months may be approved by the HCA for the Basic 
Level.
    (f) Candidates who do not meet the minimum qualifications 
established in this section, may be granted interim appointments in 
accordance with 801.690-7.
    (g) The Privacy Act of 1974 applies to the information collected 
during the selection and appointment of contracting officers.

[52 FR 24011, June 26, 1987, as amended at 54 FR 31965, Aug. 3, 1989; 63 
FR 69218, Dec. 16, 1998]



Sec. 801.690-5  Appointment.

    (a) The recommending official may recommend candidates for 
appointment as contracting officers to the designating official. Only 
the Deputy Assistant Secretary for A&MM or the HCA is authorized to sign 
the Standard Form 1402, Certification of Appointment.
    (b) Specific limitations imposed upon the authority of contracting 
officer shall be set forth in certificates of appointment or otherwise 
conveyed in writing to appoint contracting officers.
    (c) Appointment of COs at specific levels does not preclude 
imposition of administrative reviews, approvals, or other limitations 
for program management purposes.

[52 FR 24012, June 26, 1987, as amended at 54 FR 31965, Aug. 3, 1989]



Sec. 801.690-6  Termination.

    (a) The designating official may revoke the appointment of a 
contracting officer at any time after evaluation of written 
recommendations by an HCA or other management officials based on:
    (1) The fact that the need for the appointment no longer exists;
    (2) Personnel actions such as resignation or retirement;
    (3) Cause. (Cause covers such areas as, e.g., unsatisfactory 
performance, official misconduct pending criminal or administrative 
investigations, failure to meet training requirements.)
    (b) Situations involving termination of contracting authority of 
contracting officers for cause should be discussed with the servicing 
Human Resorces Service to determine impact, if any, on the employee's 
continued employment.

[54 FR 31965, Aug. 3, 1989, as amended at 63 FR 69218, Dec. 16, 1998]



Sec. 801.690-7  Interim appointment provisions.

    (a) Individuals who do not meet all minimum qualifications as 
described in 801.690-4, may be appointed on an interim basis to ensure 
availability of procurement support. Requests to the designating 
official for interim appointments shall include information on the 
candidate's training, experience, performance, education, and 
justification for the interim appointment. All minimum training 
requirements shall be scheduled for individuals issued interim 
appointments and completed within a reasonable period of time. At least 
two required courses or equivalents will normally be completed each year 
after the date of appointment. Failure to complete minimum training 
requirements within the time frame may result in the loss of the interim 
appointment.
    (b) If training requirements are met during the interim appointment 
period

[[Page 159]]

through the ATP, a permanent warrant may be issued by the designating 
official upon satisfactory completion of all the required courses. Where 
equivalent courses have been completed, appropriate documentation 
(copies of course certificates) must be submitted before a permanent 
warrant can be issued.
    (c) Instances that may require the use of interim appointments may 
include, but are not limited to the following:
    (1) Organization changes;
    (2) Sudden extreme increases in the number of procurement requests; 
and
    (3) New hires or promotions into GS-1102 series.
    (d) Interim appointments shall normally not exceed a 2 year period.

[52 FR 24012, June 26, 1987, as amended at 54 FR 31965, Aug. 3, 1989]



Sec. 801.690-8  Distribution of SF 1402, Certificate of Appointment

    (a) The original SF 1402, Certificate of Appointment, shall be 
provided to the appointed contracting officer and displayed at the 
contracting officer's duty station.
    (b) A copy of the certificate will be filed in the delegation of 
authority file and another copy will be furnished to the fiscal 
activity.
    (c) Each certificate will be serially numbered.

[54 FR 31965, Aug. 3, 1989]



Sec. 801.690-9  Post appointment maintenance of certifications. 

[Reserved]

                 PART 802_DEFINITIONS OF WORDS AND TERMS

                        Subpart 802.1_Definitions



Sec. 802.100  Definitions

    (a) In VA, head of the contracting activity means the Director, 
Acquisition Management Service, Central Office; Deputy Assistant 
Secretary for Facilities, Central Office; Director, Building and Supply 
Service, Central Office; Director, Publications Service, Central Office; 
Director, Monument Service, Central Office; Director, Vocational 
Rehabilitation and Education Service, Central Office; Director, Loan 
Guaranty Service, Central Office; Director, VA Marketing Center; Chief, 
Supply Service, at a field facility; and the Director, Regional Office.
    (b) Procurement Executive means the Deputy Assistant Secretary for 
Acquisition and Materiel Management.
    (c) Senior Procurement Executive means the Assistant Secretary for 
Management (004). The Senior Procurement Executive is responsible for 
the management direction of the VA acquisition systems.

(38 U.S.C. 501 and 40 U.S.C. 486(c))

[52 FR 24013, June 26, 1987, as amended at 52 FR 28559, July 31, 1987; 
54 FR 40062, Sept. 29, 1989; 61 FR 1527, Jan. 22, 1996]

 PART 803_IMPROPER BUSINESS PRACTICES AND PERSONAL CONFLICTS OF INTEREST

                        Subpart 803.1_Safeguards

Sec.

Sec. 803.101 Standards of conduct.

Sec. 803.101-3 Department regulations.

       Subpart 803.2_Contractor Gratuities to Government Personnel


Sec. 803.203 Reporting suspected violations of the Gratuities Clause.

         Subpart 803.3_Reports of Suspected Antitrust Violations


Sec. 803.303 Reporting suspected antitrust violations.

                      Subpart 803.4_Contingent Fees


Sec. 803.405 Misrepresentations or violations of the Convenant Against 
          Contingent Fees.

             Subpart 803.5_Other Improper Business Practices


Sec. 803.502 Subcontractor kickbacks.

  Subpart 803.70_Contractor Responsibility To Avoid Improper Business 
                                Practices


Sec. 803.7000 Policy.

Sec. 803.7001 Display of VA hotline poster.

Sec. 803.7002 Contract clause.

    Authority: 38 U.S.C. 501 and 40 U.S.C. 486(c).

    Source: 49 FR 12592, Mar. 29, 1984, unless otherwise noted.

[[Page 160]]

                        Subpart 803.1_Safeguards



Sec. 803.101  Standards of conduct.



Sec. 803.101-3  Department regulations.

    (a) Standards of conduct for all VA employees, including contracting 
officials, are found in 38 CFR part 0.
    (b) Requirements for employee financial disclosure are contained in 
38 CFR part 0, subpart B. Generally contracting officers and all 
supervisory contracting officials must file financial disclosure 
statements.

[49 FR 12592, Mar. 29, 1984, as amended at 61 FR 20491, May 7, 1996; 63 
FR 69218, Dec. 16, 1998; 64 FR 30442, June 8, 1999]

       Subpart 803.2_Contractor Gratuities to Government Personnel



Sec. 803.203  Reporting suspected violations of the Gratuities Clause.

    (a) Suspected violations of the Gratuities Clause will be reported 
to the head of the contracting activity through the contracting officer. 
The head of the contracting activity will confirm that violations are 
evident and that reporting these violations to officials designated in 
paragraph (b) would be warranted.
    (b) When violations of the Gratuities Clause warrant actions 
described in FAR 3.204(c) the head of the contracting activity will 
request instructions from the VA General Counsel (025) through the 
Deputy Assistant Secretary for Acquisition and Materiel Management.

[49 FR 12592, Mar. 29, 1984, as amended at 61 FR 1527, Jan. 22, 1996]

         Subpart 803.3_Reports of Suspected Antitrust Violations



Sec. 803.303  Reporting suspected antitrust violations.

    Instances of possible antitrust violations will be reported by 
procurement activities in accordance with FAR 3.303 to the Deputy 
Assistant Secretary for Acquisition and Materiel Management for review 
and submission to the General Counsel, who will determine whether or not 
to submit the case to the Attorney General.

[49 FR 12592, Mar. 29, 1984, as amended at 61 FR 1527, Jan. 22, 1996]

                      Subpart 803.4_Contingent Fees



Sec. 803.405  Misrepresentations or violations of the Covenant Against 

Contingent Fees.

    Before taking any administrative action the heads of the contracting 
activity shall consult with their respective VA District Counsels. 
Contracting officers in Central Office shall consult with the Office of 
the General Counsel.

[49 FR 12592, Mar. 29, 1984, as amended at 50 FR 791, Jan. 7, 1985; 61 
FR 20491, May 7, 1996. Redesignated at 63 FR 69218, Dec. 16, 1998]

             Subpart 803.5_Other Improper Business Practices



Sec. 803.502  Subcontractor kickbacks.

    Suspected violations of the Anti-kickback Act will be reported to 
the Office of the General Counsel.

  Subpart 803.70_Contractor Responsibililty To Avoid Improper Business 
                                Practices

    Source: 57 FR 58718, Dec. 11, 1992, unless otherwise noted.



Sec. 803.7000  Policy.

    It is Department of Veterans Affairs' (VA) policy to contract with 
companies that conduct business with the highest degree of integrity and 
honesty. To demonstrate this commitment to integrity and honesty, 
contractors should have standards of conduct and internal control 
systems that are designed to promote such standards, to facilitate the 
timely discovery and disclosure of improper conduct in connection with 
Government contracts, and to assure that corrective measures are 
promptly instituted and carried out. For example, a contractor's system 
of management controls should provide for--
    (a) A written code of business ethics and standards of conduct and 
an ethics training program for all employees;

[[Page 161]]

    (b) A mechanism, such as a hotline, by which employees may report 
suspected instances of improper conduct, and instructions that encourage 
employees to make such reports;
    (c) Disciplinary action for improper conduct;
    (d) Periodic reviews of company business practices, procedures, 
policies, and internal controls for compliance with standards of conduct 
and the special requirements of Government contracting;
    (e) Internal and/or external audits as appropriate;
    (f) Timely reporting to appropriate Government officials of any 
suspected or possible violations of law in connection with Government 
contracts or any other irregularities in connection with such contracts; 
and
    (g) Full cooperation with any Government agencies responsible for 
either investigation or corrective actions.

[57 FR 58718, Dec. 11, 1992, as amended at 63 FR 69218, Dec. 16, 1998]



Sec. 803.7001  Display of VA hotline poster.

    Contractors who are awarded a VA contract of--
    (a) $500,000 or more for supplies or services, or
    (b) $3 million or more for construction, and who have not 
established an internal reporting mechanism and program, as described in 
803.7000(b), shall be required to display prominently in common work 
areas within business segments performing work under VA contracts, the 
VA hotline poster prepared by the VA Office of Inspector General.



Sec. 803.7002  Contract clause.

    The contracting officer shall insert the clause at 852.203-71, 
Display of VA hotline poster, in solicitations and contracts expected to 
equal or exceed the dollar thresholds established in 803.7001.

                     PART 804_ADMINISTRATIVE MATTERS

                    Subpart 804.1_Contract Execution

    Authority: 38 U.S.C. 501 and 40 U.S.C. 486(c).



Sec. 804.101  Contracting officer's signature.

    In the event a contracting officer's name and title has been typed, 
stamped or printed on the contract and the contracting officer is not 
available to sign the contract, a designee may sign for the contracting 
officer. Such designee must be a contracting officer as specified in 
801.602 and must have specific contracting authority to cover the 
contract to be signed.

[49 FR 12592, Mar. 29, 1984, as amended at 61 FR 20492, May 7, 1996]

[[Page 162]]

                    SUBCHAPTER B_ACQUISITION PLANNING

                  PART 805_PUBLICIZING CONTRACT ACTIONS

              Subpart 805.2_Synopses of Proposed Contracts

Sec.

Sec. 805.202 Exceptions.

Sec. 805.205 Special situations.

Sec. 805.207 Preparation and transmittal of synopses.

    Authority: 38 U.S.C. 501 and 40 U.S.C. 486(c).

              Subpart 805.2_Synopses of Proposed Contracts



Sec. 805.202  Exceptions.

    In accordance with FAR 5.202, the contract actions in 806.302-5 do 
not require synopsizing.

[51 FR 23066, June 25, 1986 and 52 FR 28559, July 31, 1987; 61 FR 20492, 
May 7, 1996]



Sec. 805.205  Special situations.

    Contracting officers are hereby delegated authority to procure paid 
advertising in a daily newspaper circulated in the local area, for the 
purpose of publicizing a proposed procurement of architect-engineer 
services expected not to exceed $10,000.

[49 FR 12592, Mar. 29, 1984, as amended at 63 FR 69218, Dec. 16, 1998]



Sec. 805.207  Preparation and transmittal of synopses.

    At such time as an architect-engineer evaluation board is ready to 
advertise for architect-engineer services, it must establish the 
geographic area within which architect-engineer firms (including joint 
ventures) will be considered. The area determined must be large enough 
to assure selection of three to five firms highly qualified for the 
particular project involved, but not so large as to make the evaluation 
process unduly burdensome.

[49 FR 12592, Mar. 29, 1984, as amended at 50 FR 791, Jan. 7, 1985; 51 
FR 23066, June 25, 1986; 52 FR 28559, July 31, 1987; 54 FR 40063, Sept. 
29, 1989; 61 FR 20492, May 7, 1996]

                    PART 806_COMPETITION REQUIREMENTS

           Subpart 806.3_Other Than Full and Open Competition

Sec.

Sec. 806.302-3 Industrial mobilization; or experimental, development, or 
          research work.

Sec. 806.302-5 Authorized or required by statute.

Sec. 806.302-7 Public interest.

Sec. 806.304 Approval of the justification.

         Subpart 806.4_Sealed Bidding and Competitive Proposals


Sec. 806.401 Sealed bidding and competitive proposals.

                   Subpart 806.5_Competition Advocates


Sec. 806.501 Requirement.

Sec. 806.502 Duties and responsibilities.

Sec. 806.570 Planning requirements.

    Authority: 38 U.S.C. 501 and 40 U.S.C. 486(c).

    Source: 51 FR 23066, June 25, 1986, unless otherwise noted.

           Subpart 806.3_Other Than Full and Open Competition



Sec. 806.302-3  Industrial mobilization; or experimental, development, 

or research work.

    Research authorized to be conducted by the Department of Veterans 
Affairs in accordance with the provisions of title 38, U.S. Code, will 
be negotiated under the authority of 41 U.S.C. 253(c)(3) (except 
prosthetics research authorized by 38 U.S.C. 7303 will be negotiated 
under the authority of 41 U.S.C. 253(c)(5), regardless of the dollar 
amount). Such acquisitions require justifications and approvals required 
by FAR 6.303 and 48 CFR 806.304.

[51 FR 23066, June 25, 1986, as amended at 61 FR 20492, May 7, 1996; 63 
FR 69218, Dec. 16, 1998]



Sec. 806.302-5  Authorized or required by statute.

    (a) Scarce Medical Specialist contracts negotiated under the 
authority of 38 U.S.C. 7409 are approved for other than full and open 
competition only

[[Page 163]]

when such contracts are with institutions affiliated with the Department 
of Veterans Affairs pursuant to 38 U.S.C. 7302. The justification and 
approval requirements of FAR 6.303 and 806.304 are still applicable.
    (b) Contracts or agreements for the mutual use or exchange of use of 
health-care resources, consisting of commercial services, the use of 
medical equipment or space, or research, negotiated under the authority 
of 38 U.S.C. 8151-8153, are approved for other than full and open 
competition only when such contracts or agreements are with institutions 
affiliated with the Department of Veterans Affairs, pursuant to 38 
U.S.C. 7302, with medical practice groups or other approved entities 
associated with affiliated institutions (entities will be approved if 
determined legally to be associated with affiliated institutions), or 
with blood banks, organ banks, or research centers. The justification 
and approval requirements of FAR 6.303 and VAAR 806.304 do not apply to 
such contracts or agreements.
    (c) Contracts or agreements for the mutual use or exchange of use of 
health-care resources, consisting of commercial services or the use of 
medical equipment or space, negotiated under the authority of 38 U.S.C. 
8151-8153, and not acquired under the authority of paragraph (b) of this 
section, may be conducted without regard to any law or regulation that 
would otherwise require the use of competitive procedures for procuring 
resources, provided the procurement is conducted in accordance with the 
simplified procedures contained in (VAAR) 48 CFR part 873. The 
justification and approval requirements of FAR 6.303 and 806.304 shall 
apply to such contracts or agreements conducted on a sole source basis.
    (d) Various other sections of Title 38, United States Code, 
authorize the Secretary to enter into certain contracts, and certain 
types of contracts, without regard to any other provision of law. The 
justification and approval requirements specified in FAR 6.303 and 
806.304 are still applicable. VA contracting officers entering into 
contracts using other than competitive procedures for any of the 
following items or services, estimated to cost in excess of the 
simplified acquisition threshold, will cite, in addition to 41 U.S.C. 
253(c)(5), the appropriate section of Title 38, United States Code, as 
their authority to do so.
    (1) Contracts for orthopedic and prosthetic appliances and related 
services including research. 38 U.S.C. 8123.
    (2) Contracts to purchase or sell merchandise, equipment, fixtures, 
supplies and services for the operation of the Veterans Canteen Service. 
38 U.S.C. 7802.
    (3) Contracts or leases for the operation of parking facilities 
established under the authority of 38 U.S.C. 8109(b), provided that the 
establishment, operation, and maintenance of such facilities have been 
authorized by the Secretary or designee. 38 U.S.C. 8109(f).
    (4) Contracts for laundry and other common services such as the 
purchase of steam, may be noncompetitively negotiated with non-profit, 
tax-exempt, educational, medical, or community institutions, when 
specifically approved by the Secretary or designee and when such 
services are not reasonably available from private commercial sources. 
38 U.S.C. 8122(c).
    (5) Contracts or agreements with public or private agencies for 
services or translators. 38 U.S.C. 513.
    (6) Contracts for nursing home care. 38 U.S.C. 1720.

[51 FR 23066, June 25, 1986, as amended at 52 FR 28560, July 31, 1987; 
54 FR 40063, Sept. 29, 1989; 61 FR 20492, May 7, 1996; 63 FR 69218, Dec. 
16, 1998; 68 FR 3468, Jan. 24, 2003]



Sec. 806.302-7  Public interest.

    Use of 41 U.S.C. 253(c)(7) to support contract award using other 
than full and open competition will require a D&F prepared in accordance 
with FAR subpart 1.7 and VAAR subpart 801.7 and signed by the Secretary. 
The D&F will be prepared by the contracting officer and submitted by the 
head of contracting activity (Subpart 802.1) to the Agency Competition 
Advocate (806.501). The submission will include:
    (a) The date of expected contract award (Note: Congress must be 
notified 30 days prior to award), and

[[Page 164]]

    (b) A justification prepared by the contracting officer in 
accordance with FAR 6.303.

[51 FR 23066, June 25, 1986, as amended at 61 FR 20492, May 7, 1996]



Sec. 806.304  Approval of the justification.

    (a) Approvals of justifications as specified in FAR 6.304, prepared 
in accordance with FAR 6.303, will be approved as follows:
    (1) For a proposed contract not exceeding $100,000, one contracting 
level above the contracting officer (see Subpart 801.6). However, if the 
contracting officer is also the head of the contracting activity 
approval will be made by:
    (i) The medical center director for acquisitions at Veterans Health 
Administration (VHA) medical facilities, or
    (ii) The Agency Competition Advocate (806.501(a)) in all other 
cases.
    (2) For a proposed contract over $100,000 but not exceeding 
$1,000,000, by the Contracting Activity Competition Advocate 
(806.501(b)). However, if the Contracting Activity Competition Advocate 
is also the contracting officer, approval will be made by:
    (i) The medical center director for acquisitions at VHA medical 
facilities, or
    (ii) The Agency Competition Advocate in all other cases.
    (3) For a proposed contract over $1,000,000 but not exceeding 
$10,000,000 by the Agency Competition Advocate (806.501(a)).
    (4) For a proposed contract over $10,000,000 by the Senior 
Procurement Executive (See 802.100).
    (b) Class justifications as specified in FAR 6.304(c), will be 
approved by the Agency Competition Advocate regardless of dollar amount.

[51 FR 23066, June 25, 1986, and 52 FR 28559, July 31, 1987, as amended 
at 54 FR 40063, Sept. 29, 1989; 61 FR 20492, May 7, 1996; 63 FR 69218, 
Dec. 16, 1998]

         Subpart 806.4_Sealed Bidding and Competitive Proposals



Sec. 806.401  Sealed bidding and competitive proposals.

    Contracting officers shall solicit sealed bids if the contract is 
expected to exceed the small purchase limitation or expected to exceed 
$1,000 for contracts made for repairs to property acquired by VA under 
38 U.S.C. Chapter 37 and the criteria in FAR 6.401(a) are met. The 
contract file shall include any findings by the contracting officer that 
sealed bidding is not appropriate.

[51 FR 23066, June 25, 1986, and 52 FR 28559, July 31, 1987, as amended 
at 54 FR 40063, Sept. 29, 1989]

                   Subpart 806.5_Competition Advocates



Sec. 806.501  Requirement.

    (a) The Associated Deputy Assistant Secretary for Acquisitions (90A) 
is designated as the Agency Competition Advocate.
    (b) The Executive Director and Chief Operating Officers, VA National 
Acquisition Center, or designee, will serve as the Competition Advocate 
for the Center. Each head of the contracting activity (see Subpart 
802.1) or designee will serve as the Contracting Activity Competition 
Advocate in all other cases.

[51 FR 23066, June 25, 1986, and 52 FR 28559, July 31, 1987, as amended 
at 54 FR 40063, Sept. 29, 1989; 61 FR 1527, Jan. 22, 1996; 63 FR 69218, 
Dec. 16, 1998]



Sec. 806.502  Duties and responsibilities.

    In addition to the responsibilities identified in FAR 6.502(a), the 
Agency Competition Advocate will coordinate the competition advocacy 
program as it is implemented at all VA contracting activities. The 
Agency Competition Advocate will:
    (a) Establish program guidelines to be used by contracting activity 
competition advocates;
    (b) Assist contracting activity competition advocates with obstacles 
to promoting competition;
    (c) Utilize supply technical surveys, other facility reports, and 
the Federal Procurement Data System to monitor

[[Page 165]]

contracting activity compliance with the advocacy program;

[51 FR 23066, June 25, 1986, as amended at 61 FR 20492, May 7, 1996]



Sec. 806.570  Planning requirements.

    Competition Plan. Each Contracting Activity Competition Advocate 
shall develop a Competition Plan and incorporate the Plan in the 
internal operating procedures of the facility or organization in which 
the contracting activity is located. It is essential that the plan be 
endorsed and supported by top level management and be clearly understood 
by the services and offices that the contracting activity support. As a 
minimum, the plan shall include:
    (a) The appoval requirements for other than full and open 
competition specified in FAR 6.304;
    (b) A description of the synopsizing requirements contained in FAR 
Subpart 5.2 in order that the necessity for Advance Procurement Planning 
is fully understood;
    (c) A description of how the Competition Plan should be integrated 
into Advance Procurement Planning;
    (d) Identification of any known obstacles to competition and a 
proposal for overcoming them;
    (e) A method for otherwise increasing competition for contracts on 
the basis of cost and other significant factors.

[51 FR 23066, June 25, 1986, as amended at 61 FR 20492, May 7, 1996; 63 
FR 69218, Dec. 16, 1998]

                      PART 807_ACQUISITION PLANNING

         Subpart 807.3_Contractor Versus Government Performance

Sec.

Sec. 807.300 Scope of subpart.

Sec. 807.304 Procedures.

Sec. 807.304-73 Bid opening/receipt of proposals.

Sec. 807.304-75 Bid acceptance.

Sec. 807.304-76 Contract effective date.

Sec. 807.304-77 Right of first refusal.

    Authority: 38 U.S.C. 501; 40 U.S.C. 486(c).

    Source: 53 FR 43210, Oct. 26, 1988, unless otherwise noted.

         Subpart 807.3_Contractor Versus Government Performance



Sec. 807.300  Scope of subpart.

    This subpart prescribes basic procedures and principles to be 
followed in performing the contracting aspect of the OMB Circular A-76 
cost comparison process.



Sec. 807.304  Procedures.



Sec. 807.304-73  Bid opening/receipt of proposals.

    The date established for bid opening or receipt of proposals will 
normally be 90 days after sending the request for publication to the 
Commerce Business Daily (CBD) (65 days after issuing the solicitation).



Sec. 807.304-75  Bid acceptance.

    Bid acceptance shall be 90 days from bid opening/receipt of 
proposals in order to accommodate the time necessary to evaluate bids/
offers, finalize the cost comparison and process any appeals. 
Contracting officers will insert ``90 days'' in FAR clause 52.214-15.



Sec. 807.304-76  Contract effective date.

    (a) A transition from in-house performance to contract requires a 
period of time from contract award to beginning of contract performance 
(contract effective date). This time is necessary to allow for personnel 
adjustments, e.g., right of first refusal process, and to allow a 
reasonable period for the contractor to make necessary resource 
reallocations. The contract effective date should be carefully 
considered in conjunction with the A-76 Task Group and must be specified 
in the solicitation.
    (b) Although outplacement planning to minimize the effect of any 
necessary reduction in force should be initiated in advace of bid 
opening/receipt of proposals as prescribed by Office of Personnel and 
Labor Relations, there are also employee and labor organization 
reduction-in-force notice requirements which must be satisfied.
    (c) When bargaining unit employees will be affected, facility 
officials also

[[Page 166]]

should review and comply with any employee or labor organization notice 
requirements in applicable negotiated agreements.



Sec. 807.304-77  Right of first refusal.

    (a) In addition to the Right of First Refusal clause specified in 
FAR 52.207-3, the contracting officer will include the clause ``Report 
of Employment Under Commercial Activities'' in 852.207-70. This clause 
is primarily intended to verify that the contractor is meeting its 
obligation to provide adversely affected Federal workers the first 
opportunity for employment openings, for which they qualify, created by 
the contract.
    (b) The Report of Employment Under Commercial Activities clause is 
also prescribed to avoid inappropriate severance payment. In order to 
implement the clause, the contracting officer (or Contracting Officer's 
Technical Representative (COTR)) must first obtain a list from the 
servicing personnel office of Federal employees, including their Social 
Security numbers, who will be adversely affected as a result of the 
anticipated contract. The list should be requested as soon as a 
preliminary determination is made to contract out a function subject to 
A-76. (Contracting officers may designate a COTR to coordinate the 
information and reporting requirements.)

           PART 808_REQUIRED SOURCES OF SUPPLIES AND SERVICES

Sec.

Sec. 808.001 Priorities for use of Government supply sources.

          Subpart 808.4_Ordering From Federal Supply Schedules


Sec. 808.401 General.

    Authority: 38 U.S.C. 501 and 40 U.S.C. 486(c).

    Source: 49 FR 12593, Mar. 29, 1984, unless otherwise noted.



Sec. 808.001  Priorities for use of Government supply sources.

    (a) Procurement will be effected from the following sources in the 
descending order of priority as indicated herein:
    (1) VA excess.
    (2) Other government agencies excess.
    (3) Federal Prison Industries.
    (4) Procurement list of products available from the Committee for 
Purchase From People Who Are Blind or Severely Disabled.
    (5) GSA stock and other Government agency inventory.
    (6) VA decentralized contracts.
    (7) Mandatory Federal Supply Schedule contracts.
    (8) Optional use Federal Supply Schedule contracts.
    (9) Commercial concerns, educational, or nonprofit institutions, as 
applicable.
    (b) Public exigency. A source lower in priority may be utilized in a 
public exigency as defined in FAR 6.302-2 and in Federal Property 
Management Regulation 41 CFR 101-25.101-5. Justification for each 
deviation must be included in the procurement file.
    (c) Eligible Beneficiaries. When it is determined that a therapeutic 
benefit to eligible beneficiaries will result from personal selection of 
shoes, clothing and incidentals, acquisition from the Veterans Canteen 
Service or commercial sources is authorized. When dress shoes similar to 
Federal Prison Industries, Inc., Style No. 86-A are purchased from 
commercial sources, FPI clearance No. 1206 will be cited on the purchase 
document.

[49 FR 12593, Mar. 29, 1984, as amended at 51 FR 23068, June 25, 1986; 
52 FR 28559, July 31, 1987; 54 FR 40063, Sept. 29, 1989; 61 FR 20492, 
May 7, 1996; 63 FR 69219, Dec. 16, 1998]

          Subpart 808.4_Ordering From Federal Supply Schedules



Sec. 808.401  General.

    The Executive Director and Chief Operating Officer, VA National 
Acquisition Center, advertises, negotiates, awards the contracts, and is 
responsible for contract administration for FSS (Federal Supply 
Schedule) Groups 65 and 89. The Executive Director and Chief Operating 
Officer issues the Federal Supply Schedules containing the

[[Page 167]]

necessary information for placing delivery orders with the contractors 
for the above FSS Groups.

[49 FR 12593, Mar. 29, 1984, as amended at 63 FR 69219, Dec. 16, 1998]

                   PART 809_CONTRACTOR QUALIFICATIONS

            Subpart 809.1_Responsible Prospective Contractors

Sec.

Sec. 809.104-2 Special standards.

Sec. 809.106-1 Conditions for preaward surveys.

                    Subpart 809.2_Qualified Products


Sec. 809.206 Acquiring qualified products.

Sec. 809.270 Qualified products for convenience/labor saving foods.

         Subpart 809.4_Debarment, Suspension, and Ineligibility


Sec. 809.400 Scope of subpart.

Sec. 809.403 Definitions.

Sec. 809.404 Consolidated list of debarred, suspended, and ineligible 
          contractors.

Sec. 809.405 Effect of listing.

Sec. 809.406 Debarment.

Sec. 809.406-1 General.

Sec. 809.406-3 Procedures.

Sec. 809.406-4 Period of debarment.

Sec. 809.407 Suspension.

Sec. 809.407-1 General.

Sec. 809.407-3 Procedures.

           Subpart 809	5_Organizational Conflicts of Interest


Sec. 809.504 Contracting officer's responsibilities.

Sec. 809.505 General rules.

Sec. 809.508-2 Contract clause.

  Subpart 809.7_Defense Production Pools and Research and Development 
                                  Pools


Sec. 809.702 Contracting with pools.

    Authority: 38 U.S.C. 210, 40 U.S.C. 486(c) and 42 U.S.C. 2453(c).

    Source: 49 FR 12594, Mar. 29, 1984, unless otherwise noted.

            Subpart 809.1_Responsible Prospective Contractors



Sec. 809.104-2  Special standards.

    Standards applicable to subsistence will be established based on 
preaward surveys prescribed by 809.106-1.



Sec. 809.106-1  Conditions for preaward surveys.

    (a) Preaward on-site evaluation will be made for contracts covering 
the products and services of bakeries, dairies, ice cream plants and 
laundry and dry cleaning activities. A committee under the direction of 
the contracting officer and composed of representatives of the medical 
service and/or using service chiefs or designees appointed by the 
facility director will inspect and evaluate the plant, personnel, 
equipment and processes of the prospective contractor. Prior to any 
inspection, the contracting officer will inquire whether the plant has 
been recently inspected and approved by another Department of Veterans 
Affairs facility or Federal agency. Approved inspection reports of 
another Department of Veterans Affairs facility will be accepted by 
Department of Veterans Affairs facilities and approved inspection 
reports of other Federal agencies may be accepted as satisfactory 
evidence that the facilities of the bidder meet the requirements of the 
Invitation for Bid, provided inspection was made not more than 6 months 
prior to the proposed contract period.
    (b) Preaward on-site evaluation of dairy plants will not be made by 
the Department of Veterans Affairs when acceptable bids are received 
from suppliers of those dairy products designated as No. 1 in the 
Federal Specifications. Suppliers must have received, prior to opening 
of bids, a pasteurized milk rating of 90 percent or more for the type of 
product being supplied, on the basis of the U.S. Public Health Service 
milk ordinance and code. Such rating must be current (not over 2 years 
old), and will have been determined by certified State milk sanitation 
rating officer in the State of origin or by the Public Health Service 
and will continue at 90 percent or more during the period of the 
contract. Firms not so rated may only offer dairy products designated as 
No. 2 in the Federal Specifications. Award to such firms may be made 
only after completion of a preaward on-site evaluation conducted in 
accordance with paragraph (a) of this section.
    (c) Prior to any open market purchase of fresh bakery products (such 
as

[[Page 168]]

pies, cakes, cookies), the plant where these products are produced or 
prepared will be inspected and evaluated as provided in paragraph (a) of 
this section. On-site evaluation will be made at least annually and 
recorded on VA Form 10-2079, Inspection Report of Bakery.

[49 FR 12594, Mar. 29, 1984, as amended at 54 FR 30044, July 18, 1989; 
54 FR 40063, Sept. 29, 1989]

                    Subpart 809.2_Qualified Products



Sec. 809.206  Acquiring qualified products.

    (a) Federal Qualified Products Lists are lists of products qualified 
under the applicable Federal or interim Federal specification. Such 
lists may be used as authorized by the appropriate administration or 
staff office. Requests to receive copies of existing Federal Qualified 
Products Lists will be submitted to the Deputy Assistant Secretary for 
Acquisition and Materiel Management (91) for transmittal to General 
Services Administration. Requests to establish a Federal Qualified 
Products List for a commodity will be submitted to the Deputy Assistant 
Secretary for Acquisition and Materiel Management (91), supported by one 
or more of the following justifications:
    (1) The time required for testing after award would unduly delay 
delivery of the supplies being purchased.
    (2) The cost of repetitive testing would be excessive.
    (3) The tests would require expensive or complicated testing 
apparatus not commonly available.
    (4) The interest of the Government requires assurance, prior to 
award, that the product is satisfactory for its intended use.
    (5) The determination of acceptability would require performance 
data to supplement technical requirements in the specification.
    (b) VA Qualified Products Lists are lists of products qualified by 
VA under VA specifications or purchase descriptions. Such lists may be 
established as authorized by the appropriate administration or staff 
office.
    (1) VA Qualified Products Lists will be supported by one or more of 
the justifications in 809.206(a) or the following:
    (i) Where tests result in substantial or repetitive rejections, or
    (ii) Where professional requirements of performance, balance, 
design, or construction cannot economically be developed into clear 
specifications, and professional judgment is required in determining the 
acceptability of items meeting VA requirements.
    (2) In the event that the requirement for VA Qualified Products List 
is established for any given product, known suppliers of the type of 
item required will be notified and given an opportunity to submit 
samples for inspection, and test based upon guarantee that they will 
deliver the item to be inspected, provided the item is acceptable. A 
qualified products list shall not be used as a means of restricting 
competition to favored suppliers. All suppliers so desiring shall be 
given an opportunity to have their products tested for acceptability.
    (3) Costs involved in the inspection and test will be borne by VA. 
The supplier will be required to bear the cost of the sample and its 
transportation to the inspecting point. After inspection, the sample 
shall be returned to the supplier ``as is'' unless it is destroyed by 
inspection or disposed of or retained by VA as authorized by the 
supplier.
    (4) Items which have been accepted for the qualified products list 
will be subject to constant review for compliance with the applicable 
specification. Where there is a variance between the specification and 
item, the supplier shall be requested to furnish an item that conforms 
to the specification. Failure or inability on the part of the supplier 
to provide an item that conforms to the specification will be sufficient 
cause to consider the item unacceptable in response to subsequent 
invitations.
    (5) The acceptance of an item for the qualified products list does 
not guarantee acceptance in any future purchase, nor does it constitute 
a waiver of the requirements of the specifications as to acceptance, 
inspection, testing or other provisions of any future contract involving 
such item.
    (6) Bid invitations covering products which have been included in a 
qualified products list will include the clause set

[[Page 169]]

forth in FAR 52.209-1 or 52.209-2 as applicable.

[49 FR 12594, Mar. 29, 1984, as amended at 54 FR 30044, July 18, 1989; 
54 FR 40063, Sept. 29, 1989]



Sec. 809.270  Qualified products for convenience/labor saving foods.

    (a) Each VA medical district's Dietetic Service representative is 
delegated authority to establish a common Qualified Products List for 
convenience/labor-saving foods for the use of medical centers within 
his/her respective district. The medical district Dietetic Service 
representative will notify the Director, Dietetic Service, VA Central 
Office, of the establishment of each Qualified Products List and 
amendments to each established list.
    (b) Each medical center is authorized to use its district Qualified 
Products List. Each medical center may test food of its own choice, but 
will submit test results to the district Dietetic Service 
representative. The Dietetic Service representative will coordinate and 
consolidate the test results and recommendations of individual medical 
centers with other medical centers within the district in order to avoid 
unnecessary duplication.
    (c) The approved medical district Qualified Products List will be 
furnished each Supply office within the district. The Supply Services 
will have access to complete and accurate records of established 
Qualified Products Lists and all test results. These records will be 
made available to the Office of Acquisition and Materiel Management, VA 
Central Office, upon request.

[49 FR 12594, Mar. 29, 1984, as amended at 54 FR 30044, July 18, 1989]

         Subpart 809.4_Debarment, Suspension, and Ineligibility



Sec. 809.400  Scope of subpart.

    This subpart prescribes procedures for debarring or suspending 
contractors and the inclusion of those contractors on the consolidated 
list of debarred, suspended or ineligible bidders.



Sec. 809.403  Definitions.

    Fact-finding as used in this subpart shall mean a gathering of facts 
which is accomplished through informal meetings with the contractor, 
submissions of information, either verbally or in writing, by the 
contractor, and any other method deemed appropriate by the debarring 
official.

[49 FR 12594, Mar. 29, 1984, as amended at 50 FR 791, Jan. 7, 1985]



Sec. 809.404  Consolidated list of debarred, suspended, and ineligible 

contractors.

    (a) The Office of Acquisition and Materiel Management (93) shall be 
responsible for the action described in FAR 9.404(c) (1), (2), (4) and 
(6).
    (b) The Office of Acquisition and Materiel Management (91) shall be 
responsible for the actions described by FAR 9.404(c) (3) and (5).

[49 FR 12594, Mar. 29, 1984, as amended at 54 FR 30044, July 18, 1989]



Sec. 809.405  Effect of listing.

    The Deputy Assistant Secretary for Acquisition and Materiel 
Management shall make the determinations required by FAR 9.405(a) and 
9.405-2 to solicit from, award contracts to, or consent to subcontracts 
with contractors whose names are included on the consolidated list of 
debarred, suspended or ineligible contractors.

[49 FR 12594, Mar. 29, 1984, as amended at 54 FR 30044, July 18, 1989]



Sec. 809.406  Debarment.



Sec. 809.406-1  General.

    (a) The Deputy Assistant Secretary for Acquisition and Materiel 
Management is the debarring official for the Department of Veterans 
Affairs.
    (b) Any Department of Veterans Affairs employee may submit a 
recommendation to the Deputy Assistant Secretary for Acquisition and 
Materiel Management that a firm or individual be debarred by the 
Department of Veterans Affairs.
    (c) Such recommendations must be supported by documentary evidence 
of a cause listed in FAR 9.406-2.

[[Page 170]]



Sec. 809.406-3  Procedures.

    (a) The Deputy Assistant Secretary for Acquisition and Materiel 
Management shall, upon a receipt of a recommendation for debarment, 
appoint a designee to conduct an investigation, initiate debarment and 
present the facts to the debarring official for consideration and 
action.
    (b) The appointed designee shall issue the proposed debarment notice 
as required by FAR 9.406-3(c).
    (1) If no reply is received from the firm or individual to the 
notice of proposed debarment, the case will be referred to the debarring 
official for decision on the basis of information available.
    (2) When a reply is received, the information provided will be 
considered by the appointed designee prior to making a recommendation to 
the debarring official. If the contractor's submission in opposition to 
the debarment raises a genuine dispute over facts material to the 
proposed debarment, the designee appointed by the Deputy Assistant 
Secretary for Acquisition and Materiel Management will conduct a fact-
finding as prescribed by FAR 9.406-3(b)(2).
    (3) Upon completion of the fact-finding with respect to disputed 
facts, a written findings of facts will be provided to the debarring 
official.
    (4) The debarring official shall make a decision on the basis of all 
information available including findings of facts, and/or arguments 
submitted by the contractor.

[49 FR 12594, Mar. 29, 1984, as amended at 50 FR 791, Jan. 7, 1985]



Sec. 809.406-4  Period of debarment.

    The period of debarment will be based upon the circumstances 
involved but will not, except in unusual circumstances, exceed a period 
of 3 years. The Deputy Assistant Secretary for Acquisition and Materiel 
Management may for those firms or individuals debarred by the Department 
of Veterans Affairs decide to remove the debarment, reduce the period of 
debarment, or amend the scope of the debarment, if indicated, after 
review of documentary evidence submitted by or in behalf of the 
contractor setting forth the appropriate grounds for granting of such 
relief. Such grounds may be, but are not limited to, newly discovered 
material evidence, reversal of a conviction, bona fide change of 
ownership or management or the elimination of the cause for which 
debarment was imposed.



Sec. 809.407  Suspension.



Sec. 809.407-1  General.

    The Deputy Assistant Secretary for Acquisition and Materiel 
Management is the suspending official for the Department of Veterans 
Affairs.



Sec. 809.407-3  Procedures.

    (a) Suspension may be recommended by any Department of Veterans 
Affairs employee. These recommendations will be submitted to the Deputy 
Assistant Secretary for Acquisition and Materiel Management and must be 
supported by documentary evidence of a cause listed in FAR 9.407-2.
    (b) The Deputy Assistant Secretary for Acquisition and Materiel 
Management shall designate an official to initiate suspension, conduct 
an investigation and present the facts to the suspending official for 
consideration and appropriate action.
    (c) The designee shall issue the proposed suspension notice as 
required by FAR 9.407-3(c).
    (1) If no reply is received from the contractor to the notice of 
proposed suspension, the case will be referred to the suspending 
official for decision on the basis of information available.
    (2) When a reply is received, the information provided will be 
considered by the official conducting the suspension proceedings prior 
to referring the case with recommendations to the suspending official. 
If the contractor's submission in opposition to the suspension raises a 
genuine dispute over facts material to the proposed suspension, the 
designee of the Deputy Assistant Secretary for Acquisition and Materiel 
Management will conduct a fact-finding as prescribed by FAR 9.407-
3(b)(2).
    (3) Upon completion of the informal hearing with respect to the 
disputed facts, a written findings of facts will be prepared and 
presented to the suspending official.

[[Page 171]]

    (4) The suspending official shall make a decision on the basis of 
all information available including findings of facts, and/or arguments 
submitted by the contractor.

           Subpart 809.5_Organizational Conflicts of Interest



Sec. 809.504  Contracting officer's responsibilities.

    (a) Contracting officers will be responsible for determining the 
existence of actual and/or potential organizational conflicts of 
interest which would result from the award of the contract. The 
contracting officer will be guided by information submitted by offerors 
and by his/her own judgment. The contracting officer may obtain the 
advice of legal counsel and the assistance of technical specialists in 
evaluating potential organizational conflicts.
    (b) If it is determined that organizational conflicts of interest 
will be created by the award of the contract, the contracting officer 
may find an offeror nonresponsible.
    (c) Notwithstanding the existence of organizational conflicts of 
interest, it may be determined that the award of the contract would be 
in the best interest of the Government. In that case, the contracting 
officer may set terms and conditions which will reduce the 
organizational conflicts of interest to the greatest extent possible, 
with the approval of the head of the contracting activity.
    (d) The contracting officer will, in addition to any certifications 
required by this subpart, require in all solicitations for consulting 
services that the offeror submit as part of an offer a statement which 
discloses all relevant facts relating to existing or potential 
organizational conflicts of interest surrounding the contract and/or the 
proposed use of subcontractors during the contract.



Sec. 809.505  General rules.

    The determination that organizational conflicts of interest exist 
can only be made when facts surrounding individual contracting 
situations are known. Therefore, it is up to the contracting officer to 
exercise common sense, good judgment and sound discretion in making such 
a determination and to take steps to mitigate to the greatest extent 
possible organizational conflicts of interest. The contracting officer 
will be guided by at least two underlying principles. These are that 
organizational conflicts of interest may result from (a) conflicting 
roles and interests of the contractor, in which case he/she would be 
unable to give unbiased and objective advice or may otherwise produce a 
biased work product; or (b) unfair competitive advantage which exceeds a 
normal flow of benefits from the award of the contract.



Sec. 809.508-2  Contract clause.

    The representation in 852.209-70, Organizational Conflicts of 
Interest, will be made a part of all solicitations for consulting 
services.

[49 FR 12594, Mar. 29, 1984, as amended at 50 FR 791, Jan. 7, 1985]

  Subpart 809.7_Defense Production Pools and Research and Development 
                                  Pools



Sec. 809.702  Contracting with pools.

    Department of Veterans Affairs contracting officers will be advised 
of, consider bids from, and make awards to, Small Business and Defense 
Production Pools. The Chief Medical Director, or designee, will notify 
the appropriate administrations and staff offices when such pools are 
approved.

[49 FR 12594, Mar. 29, 1984, as amended at 54 FR 40063, Sept. 29, 1989]

                    PART 811_DESCRIBING AGENCY NEEDS

Sec.

Sec. 811.001 Definitions.

      Subpart 811.1_Selecting and Developing Requirements Documents


Sec. 811.104 Items particular to one manufacturer.

Sec. 811.104-70 Purchase descriptions.

Sec. 811.104-71 Bid evaluation and award.

Sec. 811.104-72 Procedure for negotiated procurements.

[[Page 172]]

       Subpart 811.2_Using and Maintaining Requirements Documents


Sec. 811.202 Maintenance of standardization documents.

Sec. 811.204 Solicitation provisions and contract clauses.

             Subpart 811.4_Delivery or Performance Schedules


Sec. 811.404 Contract clauses.

                    Subpart 811.5_Liquidated Damages


Sec. 811.502 Policy.

Sec. 811.504 Contract clauses.

                Subpart 811.6_Priorities and Allocations


Sec. 811.602 General.

    Authority: 38 U.S.C. 501 and 40 U.S.C. 486(c).

    Source: 63 FR 17335, Apr. 9, 1998, unless otherwise noted.



Sec. 811.001  Definitions.

    (a) Brand name product means a commercial product described by brand 
name and make or model number or other appropriate nomenclature by which 
such product is offered for sale to the public by the particular 
manufacturer, producer or distributor.
    (b) Salient characteristics are those particular characteristics 
that specifically describe the essential physical and functional 
features of the material or service required. They are those essential 
physical or functional features which are identified in the 
specifications as a mandatory requirement which a proposed ``equal'' 
product or material must possess in order for the bid to be considered 
responsive. Bidders must furnish all descriptive literature and bid 
samples required by the solicitation to establish such ``equality''.

      Subpart 811.1_Selecting and Developing Requirements Documents



Sec. 811.104  Items particular to one manufacturer.

    (a) Specifications shall be written in accordance with FAR 11.002 
unless otherwise justified by the specification writer and approved by 
the contracting officer as described in paragraph (b) of this section. 
The contract file shall be documented accordingly.
    (b) When it is determined that a particular physical or functional 
characteristic of only one product will meet the minimum requirements of 
the Department of Veterans Affairs (see FAR 11.104) or that a ``brand 
name or equal'' purchase description will be used, the specification 
writer, whether agency personnel, architect-engineer, or consultant with 
which the Department of Veterans Affairs has contracted, shall 
separately identify the item(s) to the contracting officer and provide a 
full written justification of the reason the particular characteristic 
is essential to the Government's requirements or why the ``brand name or 
equal'' purchase description is necessary. The contracting officer shall 
make the final determination whether restrictive specifications or 
``brand name or equal'' purchase descriptions will be included in the 
solicitation.
    (c) Purchase descriptions that contain references to one or more 
brand name products may be used only in accordance with 811.104-70, 
811.104-71, and 811.104-72. In addition, purchase descriptions that 
contain references to one or more brand name products shall be followed 
by the words ``or equal,'' except when the acquisition is fully 
justified under FAR 6.3 and VAAR 806.3. Acceptable brand name products 
should be listed in the solicitation. Where a ``brand name or equal'' 
purchase description is used, prospective contractors must be given the 
opportunity to offer products other than those specifically referenced 
by brand name if such other products are determined by the Government to 
fully meet the salient characteristics listed in the invitation. The 
contract file will be documented in accordance with paragraph (b) of 
this section, justifying the need for use of a brand name or equal 
description.
    (d) ``Brand name or equal'' purchase descriptions shall set forth 
those salient physical, functional, or other characteristics of the 
referenced products which are essential to the minimum needs of the 
Government. For example, when interchangeability of parts is required, 
such requirement

[[Page 173]]

should be specified. Purchase descriptions shall contain the following 
information to the extent available and include such other information 
as is necessary to describe the item required:
    (1) Complete common generic identification of the item required;
    (2) Applicable model, make or catalog number for each brand name 
product referenced, and identity of the commercial catalog in which it 
appears; and
    (3) Name of manufacturer, producer or distributor of each brand name 
product referenced (and address if not well known).
    (e) When necessary to describe adequately the item required, an 
applicable commercial catalog description or pertinent extract may be 
used if such description is identified in the solicitation as being that 
of the particular named manufacturer, producer or distributor. The 
contracting officer will insure that a copy of any catalogs referenced 
(except parts catalogs) is available on request for review by bidders at 
the purchasing office.
    (f) Except as noted in paragraph (d) of this section, purchase 
descriptions shall not include either minimum or maximum restrictive 
dimensions, weights, materials or other salient characteristics which 
are unique to a brand name product or which would tend to eliminate 
competition or other products which are only marginally outside the 
restrictions. However, purchase description may include restrictive 
dimensions, weights, materials or other salient characteristics if such 
restrictions are determined in writing by the user to be essential to 
the Government's requirements, the brand name of the product is included 
in the purchase description, and all other determinations required by 
811.104 are made.



Sec. 811.104-70  Purchase descriptions.

    (a) When any purchase description, including a ``brand name or 
equal'' purchase description, is used in a solicitation for a supply 
contract to describe required items of mechanical equipment, the 
solicitation will include the clauses in 852.211-70 (Service Data 
Manual) and in 852.211-71 (Guarantee).
    (b) Solicitations using ``brand name or equal'' purchase 
descriptions will contain the ``brand name or equal'' clause in 852.211-
77, and the provision set forth at FAR 52.214-21, Descriptive 
Literature. Contracting officers are cautioned to review the 
requirements at FAR 14.202-5(d) when utilizing the descriptive 
literature provision.
    (c) Except as provided in paragraph 811.104-70(d), when a ``brand 
name or equal'' purchase description is included in an invitation for 
bids, the following shall be inserted after each item so described in 
the solicitation, for completion by the bidder:

                               Bidding on:

Manufacturer name_______________________________________________________

Brand___________________________________________________________________

No._____________________________________________________________________

    (d)(1) When component parts of an end item are described in the 
solicitation by a ``brand name or equal'' purchase description and the 
contracting officer determines that the clause in 811.104-70(b) is 
inapplicable to such component parts, the requirements of 811.104-70(c) 
shall not apply with respect to such component parts. In such cases, if 
the clause is included in the solicitation for other reasons, a 
statement substantially as follows also shall be included:

    The clause entitled ``Brand Name or Equal'' does not apply to the 
following component parts (list the component parts to which the clause 
does not apply): and

    (2) In the alternative, if the contracting officer determines that 
the clause in 811.104-70(b) shall apply to only certain such component 
parts, the requirements of 811.104-70(c) shall apply to such component 
parts and a statement substantially as follows also shall be included:

    The clause entitled ``Brand Name or Equal'' applies to the following 
component parts (list the component parts to which the clause applies):

    (e) When a solicitation contains ``brand name or equal'' purchase 
descriptions, bidders who offer brand name products, including component 
parts, referenced in such descriptions shall not be required to furnish 
bid samples of the referenced brand name products. However, 
solicitations may

[[Page 174]]

require the submission of bid samples in the case of bidders offering 
``or equal'' products. If bid samples are required, the solicitation 
shall include the provision set forth at FAR 52.214-20, Bid Samples. The 
bidder must still furnish all descriptive literature in accordance with 
and for the purpose set forth in the ``Brand Name or Equal'' clause, 
852.211-77(c)(1) and (2), even though bid samples may not be required.



Sec. 811.104-71  Bid evaluation and award.

    (a) Bids offering products that differ from brand name products 
referenced in a ``brand name or equal'' purchase description shall be 
considered for award when the contracting officer determines in 
accordance with the terms of the clause at 852.211-77 that the offered 
products are clearly identified in the bids and are equal in all 
material respects to the products specified.
    (b) Award documents shall identify, or incorporate by reference, an 
identification of the specific products which the contractor is to 
furnish. Such identification shall include any brand name and make or 
model number, descriptive material, and any modifications of brand name 
products specified in the bid. Included in this requirement are those 
instances when the descriptions of the end items contain ``brand name or 
equal'' purchase descriptions of component parts or of accessories 
related to the end item, and the clause at 852.211-77 was applicable to 
such component parts or accessories (see 811.104-70(d)(2)).



Sec. 811.104-72  Procedure for negotiated procurements.

    (a) The policies and procedures prescribed in 811.104-70 and 
811.104-71 should be used as a guide in developing adequate purchase 
descriptions for negotiated procurements.
    (b) The clause at 852.211-77 may be adapted for use in negotiated 
procurements. If use of the clause is not practicable (as may be the 
case in unusual and compelling urgency purchases), suppliers shall be 
suitably informed that proposals offering products different from the 
products referenced by brand name will be considered if the contracting 
officer determines that such offered products are equal in all material 
respects to the products referenced.

       Subpart 811.2_Using and Maintaining Requirements Documents



Sec. 811.202  Maintenance of standardization documents.

    (a) Military and departmental specifications. Contracting officers 
may, when they deem it to be advantageous to the Department of Veterans 
Affairs, utilize these specifications when procuring supplies and 
equipment costing less than the simplified acquisition threshold. 
However, when purchasing items of perishable subsistence, contracting 
officers shall observe only those exemptions set forth in paragraphs 
(b)(2) and (b)(3) of this section.
    (b) Nutrition and Food Service specifications. (1) The Department of 
Veterans Affairs has adopted for use in the procurement of packinghouse 
products, the purchase descriptions and specifications set forth in the 
Institutional Meat Purchase Specifications (IMPS), and the IMPS General 
Requirements, which have been developed by the U.S. Department of 
Agriculture. Purchase descriptions and specifications for dairy 
products, poultry, eggs, fresh and frozen fruits and vegetables, as well 
as certain packinghouse products selected from the IMPS especially for 
Department of Veterans Affairs use, are contained in Part IV of the 
Federal Supply Catalog, Stock List, FSC Group 89, Subsistence, 
Publication No. C8900-SL. A copy of Part IV of this catalog and the IMPS 
may be obtained from any Department of Veterans Affairs contracting 
officer.
    (2) The military specifications for meat and meat products contained 
in Part IV of the Federal Supply Catalog, Stock List, FSC Group 89, 
Subsistence, shall be used by the Department of Veterans Affairs only 
when purchasing such items of subsistence from the Defense Logistics 
Agency (DLA). Military specifications for poultry, eggs, and egg 
products contained in Part IV of the Federal Supply Catalog, Stock List, 
FSC Group 89, Subsistence, may be used when purchasing either from DLA 
or from local dealers.

[[Page 175]]

    (3) Except as authorized in part 846 of this chapter, contracting 
officers shall not deviate from the specifications contained in Part IV 
of the Federal Supply Catalog, Stock List, FSC Group 89, Subsistence, 
and the IMPS without prior approval of the Deputy Assistant Secretary 
for Acquisition and Materiel Management.
    (4) Items of meat, cured pork and poultry not listed in either Part 
IV of the Federal Supply Catalog, Stock List, FSC Group 89, Subsistence, 
or the IMPS, will not be purchased without prior approval of the Deputy 
Assistant Secretary for Acquisition and Materiel Management.
    (c) Department of Veterans Affairs specifications. (1) The Director, 
Publications Service, is responsible for developing, publishing, and 
distributing Department of Veterans Affairs specifications covering 
printing and binding.
    (2) Department of Veterans Affairs specifications, as they are 
revised, are placed in stock in the VA Forms and Publications Depot. 
Facility requirements for these specifications will be requisitioned 
from that source.
    (d) Government paper specification standards. (1) Invitations for 
bids, requests for proposals, purchase orders, or other procurement 
instruments covering the purchase of paper stocks to be used in 
duplicating or printing, or which specify the paper stocks to be used in 
buying printing, binding, or duplicating, will require that such paper 
stocks be in accordance with the Government Paper Specification 
Standards issued by the Joint Committee on Printing of Congress.
    (2) All binding or rebinding of books, magazines, pamphlets, 
newspapers, slip cases and boxes will be procured in accordance with 
Government Printing Office (GPO) specifications and will be procured 
from the servicing GPO Regional Printing Procurement Office or, when 
appropriate, from commercial sources.
    (3) There are three types of binding/rebinding: Class A (hard 
cover); Perfect (glued); and Lumbinding (sewn). The most suitable type 
of binding will be procured to satisfy the requirements, based upon the 
intended use of the bound material.



Sec. 811.204  Solicitation provisions and contract clauses.

    Specifications. When product specifications are cited in an 
invitation for bids or requests for proposals, the citation shall 
include desired options and shall conform to the following:

    Shall be type ----------, grade ----------, in accordance with (type 
of specification) No. --------, dated------------ and amendment -------- 
dated ----------, except paragraphs -------- and ---------- which are 
amended as follows:

             Subpart 811.4_Delivery or Performance Schedules



Sec. 811.404  Contract clauses.

    When delivery is required by or on a particular date, the time of 
delivery clause set forth in FAR 52.211-8 as it relates to f.o.b. 
destination contracts will state that the delivery date specified is the 
date by which the shipment is to be delivered, not the shipping date. In 
f.o.b. origin contracts, the clause will state that the date specified 
is the date shipment is to be accepted by the carrier.

                    Subpart 811.5_Liquidated Damages



Sec. 811.502  Policy.

    Liquidated damages provisions will not be routinely included in 
supply or construction contracts, regardless of dollar amount. The 
decision to include liquidated damages provisions will conform to the 
criteria in FAR 11.502. In making this decision, consideration will be 
given to whether the necessity for timely delivery or performance as 
required in the contract schedule is so critical that a probable 
increase in contract price is justified. Liquidated damages provisions 
will not be included as insurance against selection of a non-responsible 
bidder, as a substitute for efficient contract administration, or as a 
penalty for failure to perform on time.



Sec. 811.504  Contract clauses.

    When the liquidated damages clause prescribed in FAR 52.211-11 or 
52.211-12

[[Page 176]]

is to be used and where partial performance may be utilized to the 
advantage of the Government, the clause in 852.211-78 will be included 
in the contract.

                Subpart 811.6_Priorities and Allocations



Sec. 811.602  General.

    (a) Priorities and allocations of critical materials are controlled 
by the Department of Commerce. Essentially, such priorities and 
allocations are restricted to projects having a direct connection with 
supporting current defense needs. The Department of Veterans Affairs is 
not authorized to assign a priority rating to its purchase orders or 
contracts involving the acquisition or use of critical materials.
    (b) In those instances where it has been technically established 
that it is not feasible to use a substitute material, the Department of 
Commerce has agreed to assist us in obtaining critical materials for 
maintenance and repair projects. They will also, where possible, render 
assistance in connection with the purchase of new items, which may be in 
short supply because of their use in connection with the defense effort.
    (c) Contracting officers having problems in acquiring critical 
materials will ascertain all the facts necessary to enable the 
Department of Commerce to render assistance to the Department of 
Veterans Affairs in acquiring these materials. The contracting officer 
will submit a request for assistance containing the following 
information to the Deputy Assistant Secretary for Acquisition and 
Materiel Management (90):
    (1) A description of the maintenance and repair project or the new 
item, whichever is applicable;
    (2) The critical material and the amount required;
    (3) The contractor's sources of supply, including any addresses. If 
the source is other than the manufacturer or producer, also list the 
name and address of the manufacturer or producer;
    (4) The Department of Veterans Affairs contract or purchase order 
number;
    (5) The contractor's purchase order number, if known, and the 
delivery time requirement as stated in the solicitation or offer;
    (6) The additional time the contractor claims will be necessary to 
effect delivery if priority assistance is not provided;
    (7) The nature and extent of the emergency that will be generated at 
the station, e.g.,
    (i) damage to the physical plant,
    (ii) impairment of the patient care program,
    (iii) creation of safety hazards, and
    (iv) any other pertinent condition that will result because of 
failure to secure assistance in obtaining the critical materials; and
    (8) If applicable, a statement that the item required is for use in 
a construction contract which was authorized by the Chief Facilities 
Management Officer, Office of Facilities Management, to be awarded and 
administered by the facility contracting officer.

                PART 812_ACQUISITION OF COMMERCIAL ITEMS

   Subpart 812.3_Solicitation Provisions and Contract Clauses for the 
                     Acquisition of Commercial Items

Sec.

Sec. 812.301 Solicitation provisions and contract clauses for the 
          acquisition of commercial items.

Sec. 812.302 Tailoring of provisions and clauses for the acquisition of 
          commercial items.

    Authority: 38 U.S.C. 501 and 40 U.S.C. 486(c).

    Source: 63 FR 17338, Apr. 9, 1998, unless otherwise noted.



Sec. 812.301  Solicitation provisions and contract clauses for the 

acquisition of commercial items.

    (a) Notwithstanding prescriptions contained elsewhere in the VAAR, 
when acquiring commercial items, contracting officers shall be required 
to use only those provisions and clauses prescribed in this part.
    (b) The provision and clause in the following VAAR sections shall be 
used, in accordance with the prescriptions contained therein or 
elsewhere in the

[[Page 177]]

VAAR, in requests for quotations, solicitations, or contracts for the 
acquisition of commercial items:
    (1) 852.219-70, Veteran-owned small business.
    (2) 852.270-4, Commercial advertising.
    (c) The provisions and clauses in the following VAAR sections must 
be used, when appropriate, in accordance with the prescriptions 
contained therein or elsewhere in the VAAR, in requests for quotations, 
solicitations, or contracts for the acquisition of commercial items:
    (1) 852.207-70, Report of employment under commercial activities.
    (2) 852.211-71, Guarantee clause.
    (3) 852.211-72, Inspection.
    (4) 852.211-73, Frozen processed foods.
    (5) 852.211-74, Telecommunications equipment.
    (6) 852.211-75, Technical industry standards.
    (7) 852.214-70, Caution to bidders-bid envelopes.
    (8) 852.216-70, Estimated quantities for requirements contracts.
    (9) 852.229-70, Purchases from patient's funds.
    (10) 852.229-71, Purchases for patients using Government funds and/
or personal funds of patients.
    (11) 852.233-70, Protest content.
    (12) 852.237-7, Indemnification and Medical Liability Insurance.
    (13) 852.237-70, Contractor responsibilities.
    (14) 852.237-71, Indemnification and insurance (vehicle and aircraft 
service contracts).
    (15) 852.252-1, Provisions or clauses requiring completion by the 
offeror or prospective contractor.
    (16) 852.270-1, Representatives of contracting officers.
    (17) 852.270-2, Bread and bakery products.
    (18) 852.270-3, Purchase of shellfish.
    (d) The clauses in the following VAAR sections shall be used, when 
appropriate, in accordance with the prescriptions contained therein or 
elsewhere in the VAAR, in requests for quotations, solicitations, or 
contracts for the acquisition of commercial items, provided the 
contracting officer determines that use of the clauses is consistent 
with customary commercial practices.
    (1) 852.211-70, Requirements for operating and maintenance manuals.
    (2) 852.211-77, Brand name or equal.
    (e) The contracting officer shall insert the clause in 852.271-70, 
Services provided eligible beneficiaries, by reference, in all requests 
for quotations, solicitations, and contracts meeting the prescription 
contained therein.
    (f) Clauses are not required for micro-purchases using the 
procedures of this part or part 813. However, this does not prohibit the 
use of any clause prescribed in this part or elsewhere in this chapter 
in micro-purchases when determined by the contracting officer to be in 
the Government's best interest.
    (g) When soliciting for commercial services or the use of medical 
equipment or space under the authority of part 873 and 38 U.S.C. 8151-
8153, the provisions and clauses in the following VAAR sections may be 
used in accordance with the prescriptions contained therein or elsewhere 
in the VAAR:
    (1) 852.273-70, Late offers.
    (2) 852.273-71, Alternative negotiation techniques.
    (3) 852.273-72, Alternative evaluation.
    (4) 852.273-73, Evaluation--health-care resources.
    (5) 852.273-74, Award without exchanges.

[63 FR 17338, Apr. 9, 1998, as amended at 64 FR 69934, Dec. 15, 1999; 68 
FR 3468, Jan. 24, 2003]



Sec. 812.302  Tailoring of provisions and clauses for the acquisition of 

commercial items.

    Agency procedures for approval of waivers: Waivers to tailor 
solicitations in a manner that is inconsistent with customary commercial 
practice shall be prepared by contracting officers in accordance with 
FAR 12.302(c). Waiver requests shall be submitted to the contracting 
officer's next higher level supervisor for approval. Approved requests 
shall be retained in the contract file.

[[Page 178]]

           SUBCHAPTER C_CONTRACTING METHODS AND CONTRACT TYPES

               PART 813_SIMPLIFIED ACQUISITION PROCEDURES

                        Subpart 813.1_Procedures

Sec.

Sec. 813.106-70 Oral purchase orders.

              Subpart 813.3_Simplified Acquisition Methods


Sec. 813.302 Purchase orders.

Sec. 813.302-5 Clauses.

Sec. 813.307 Forms.

    Authority: 38 U.S.C. 501 and 40 U.S.C. 486(c).

                        Subpart 813.1_Procedures



Sec. 813.106-70  Oral purchase orders.

    Oral purchase orders, when considered advantageous to the Department 
of Veterans Affairs, may be used for transactions not in excess of 
$2,500. This limitation does not apply to delivery orders against 
existing contracts, e.g., delivery orders against FSS Contracts. The 
transaction will be assigned a purchase order number and receipt 
documentation will be obtained on the copies of the purchase request 
utilized as a property voucher and receiving report. Documentation as to 
competition will be in accordance with FAR 13.106-3.

[52 FR 28560, July 31, 1987. Redesignated and amended at 64 FR 69935, 
Dec. 15, 1999]

              Subpart 813.3_Simplified Acquisition Methods



Sec. 813.302  Purchase orders.



Sec. 813.302-5  Clauses.

    When using VA Forms 90-2138 or 90-2138-ADP for maintenance contracts 
involving services performed on Government property which have the 
potential for property damage and liability claims, the contracting 
officer shall insert in the purchase order the Contractor 
Responsibilities clause found at 852.237-70. Applicable maintenance 
contracts include but are not limited to window washing, pest control, 
and elevator maintenance.

[64 FR 69935, Dec. 15, 1999]



Sec. 813.307  Forms.

    (a) VA Form 90-2138, Order for Supplies or Services, VA Form 90-
2139, Order for Supplies or Services (Continuation), VA Form 90-2138-
ADP, Purchase Order for Supplies or Services, and VA Form 2139-ADP, 
Order for Supplies and Services (Continuation), provide in one set of 
forms a purchase or delivery order, vendor's invoice, and receiving 
report. They will be used in lieu of but in the same manner as Optional 
Form 347, Order for Supplies or Services, Optional Form 348, Order for 
Supplies or Services Schedule--Continuation, and Standard Form 1449, 
Solicitation/Contract/Order for Commercial Items.
    (b) The following order forms are for use when ordering the 
indicated medical, dental and ancillary services up to $10,000 per 
authorization when such services are not available under existing 
contracts.
    (1) VA Form 10-7078, Authorization and Invoice for Medical and 
Hospital Services.
    (2) VA Form 10-7079, Request for Outpatient Medical Services.
    (3) VA Form 10-2570d, Dental Record, Authorization and Invoice for 
Outpatient Services.
    (c) In authorizing patient travel as set forth in VA Manual MP-1, 
Part II, Chapter 3, VA Form 10-2511, Authority and Invoice for Travel by 
Ambulance or Other Hired Vehicle, will be used as provided by that 
manual.
    (d) Standard Form 182, Request, Authorization, Agreement, and 
Certification of Training, will be utilized for the procurement of 
training in the manner prescribed in 870.104.
    (e) VA Form 10-2421, Prosthetics Authorization and Invoice, will be 
used for indicated procurements not in excess of $300.

[49 FR 12599, Mar. 29, 1984. Redesignated and amended at 64 FR 69934, 
Dec. 15, 1999]

[[Page 179]]

                         PART 814_SEALED BIDDING

                   Subpart 814.1_Use of Sealed Bidding

Sec.

Sec. 814.103 Policy.

Sec. 814.103-1 General.

Sec. 814.104 Types of contracts.

Sec. 814.104-70 Fixed-price contracts with escalation.

                   Subpart 814.2_Solicitation of Bids


Sec. 814.201 Preparation of invitations for bids.

Sec. 814.202 General rules for solicitation of bids.

Sec. 814.202-4 Bid samples.

Sec. 814.203 Methods of soliciting bids.

Sec. 814.203-1 Mailing or delivery to prospective bidders.

Sec. 814.204 Records of invitations for bids and records of bids.

Sec. 814.205 Solicitation mailing lists.

Sec. 814.205-1 Establishment of lists.

Sec. 814.205-2 Removal of names from solicitation mailing lists.

Sec. 814.205-5 Release of solicitation mailing lists.

Sec. 814.208 Amendment of invitation for bids (construction).

                    Subpart 814.3_Submission of Bids


Sec. 814.301 Responsiveness of bids.

Sec. 814.302 Bid submission.

Sec. 814.304 Late bids, late modifications of bids, or late withdrawal 
          of bids.

Sec. 814.304-2 Notification to late bidders.

Sec. 814.304-4 Records.

           Subpart 814.4_Opening of Bids and Award of Contract


Sec. 814.402 Opening of bids.

Sec. 814.403 Recording of bids.

Sec. 814.404 Rejection of bids.

Sec. 814.404-1 Cancellation of invitations after opening.

Sec. 814.404-2 Rejection of individual bids.

Sec. 814.404-70 Questions involving the responsiveness of a bid.

Sec. 814.407 Mistakes in bids.

Sec. 814.407-3 Other mistakes disclosed before award.

Sec. 814.407-4 Mistakes after award.

Sec. 814.408 Award.

Sec. 814.408-70 Award when only one bid is received.

Sec. 814.408-71 Recommendation for award (construction).

Sec. 814.409 Information to bidders.

    Authority: 38 U.S.C. 501 and 40 U.S.C. 486(c).

    Source: 49 FR 12599, Mar. 29, 1984, unless otherwise noted.

                   Subpart 814.1_Use of Sealed Bidding



Sec. 814.103  Policy.



Sec. 814.103-1  General.

    Contracts in excess of the small purchase limitation or in excess of 
$1,000 for contracts made for repairs to property acquired by the 
Department of Veterans Affairs under chapter 37, title 38, United States 
Code, will be made by sealed bidding when all of the elements necessary 
for sealed bidding as prescribed in FAR 6.401(a) are present.

[51 FR 23068, June 25, 1986, and 52 FR 28559, July 31, 1987, as amended 
at 54 FR 40063, Sept. 29, 1989]



Sec. 814.104  Types of contracts.



Sec. 814.104-70  Fixed-price contracts with escalation.

    When contracts of this nature are authorized pursuant to 816.102(b), 
contracting officers will be guided by the provisions of FAR 16.203.

                   Subpart 814.2_Solicitation of Bids



Sec. 814.201  Preparation of invitations for bids.

    (a) Invitations for bids for supplies, equipment and services will 
be serially numbered at the time of issue. The number will consist of 
the station or National Acquisition Center division number, the serial 
number of the invitation, and the fiscal year in which issued, e.g., 
101-24-84. A series beginning with the number 1 will be started each 
fiscal year. Invitations for bids for supplies, equipment and services 
which are issued, accepted and become contracts in the same fiscal year 
but, because of procurement leadtime, will not be performed until the 
ensuing fiscal year will be numbered in the series of the year in which 
they are issued. However, invitations issued in one fiscal year that 
will result in a contract that will become effective and performed only 
in the ensuing fiscal year will be numbered in the ensuing fiscal year 
series.
    (b) Invitations for construction contracts will bear the applicable 
IFB number and project number, if assigned.

[[Page 180]]

    (c) In order to preclude adverse criticism of the Department of 
Veterans Affairs by prospective bidders relative to the disclosure of 
bid prices prior to bid opening, the provision entitled ``Caution to 
Bidders Bid-Envelopes,'' as set forth in 852.214-70, will be prominently 
placed in all invitations for bids.
    (d) To realize the greatest possible price advantage for the 
Government, items that may be processed by a contractor to effect a 
reduction in cost factors such as production, inspection and delivery, 
may be listed for award on both individual item and summary item bases. 
Items will be listed individually and, in addition, a summary price will 
be solicited for those items the contracting officer determines to be of 
a related character and normally handled by a majority of prospective 
bidders.
    (1) When different products are to be combined for a summary price, 
the quantity, unit and unit price columns opposite the summary item will 
be crossed out, e.g.:

(Item No.) Summary bid for furnishing items ------ to ------ inclusive 
on an all or none basis:

----------------------------------------------------------------------------------------------------------------
               Quantity                          Unit                  Unit Price                Summary
----------------------------------------------------------------------------------------------------------------
XX...................................  XX.....................  XX.....................  $ XX
----------------------------------------------------------------------------------------------------------------
(Bidder will enter summary amount.)

    (2) When a single unit price is solicited for a single product for 
delivery to various destinations, or for multiple deliveries, the total 
quantity required will be listed opposite the summary item, e.g.:

(Item No.) Summary bid for furnishing items ------ to ------ inclusive 
on all or none basis:

----------------------------------------------------------------------------------------------------------------
               Quantity                          Unit                  Unit Price                Summary
----------------------------------------------------------------------------------------------------------------
XX...................................  XX.....................  XX.....................  $ XX
----------------------------------------------------------------------------------------------------------------
(Bidder will enter unit price and summary amount.)

    (3) Invitations containing a summary bid request will contain the 
following statement:

    The award will be made on either an individual item basis or summary 
bid basis, whichever results in the lowest cost to the Government. 
Therefore, to assure proper evaluation of all bids, a bidder quoting a 
summary bid price must also quote a price on each individual item 
included in the summary bid price.

    (e) Bid invitations for supplies, equipment, or services (other than 
construction) must define the extent to which alternate bids will be 
authorized and considered. Alternates specified on construction projects 
will be considered for acceptance only as a part of the basic item.
    (1) When an alternate item will be considered only if no bids or 
insufficient bids are received on the item desired, the clause set forth 
in 852.214-71(a) will be included in the invitation.
    (2) When an alternate item will be considered on an equal basis with 
the item specified, the clause set forth in 852.214-71(b) will be 
included in the invitation.
    (3) In addition to the clauses referenced in paragraph (e) (1) or 
(2) of this section, the clause set forth in 852.214-71(c) will be 
included in the invitation when bids will be allowed on different 
packaging, unit designation, etc.
    (f) When a contracting officer determines that it will be 
advantageous to the Government to make the award by group or groups of 
items, a provision for such award will be included in the invitation for 
bids.
    (1) This may apply when:
    (i) The items in the group or groups are readily available from the 
sources to be solicited; and
    (ii) It is desirable to make a minimum number of contracts; or
    (iii) Furniture or fixtures are required for a single project and 
uniformity of design is desirable; or
    (iv) The articles required will be assembled and used as a unit.
    (2) Solicitations for supplies and services, other than 
construction, will contain the provision set forth in FAR 52.214-22.
    (3) Solicitations for construction contracts which solicit prices on 
an item and alternate item basis (when it is intended that a single 
aggregate award will be made for all items in the solicitation within 
certain fiscal limitations) will contain a statement as to the order of 
priority in which the alternate items will be awarded. This priority 
will be based on the relative importance of an item, the Department of 
Veterans Affairs' estimate, and the

[[Page 181]]

amount of funds available. Such schedules will be substantially as 
follows:

    Item No. 1--Furnish all labor, material, equipment, etc., to paint 
buildings No. 1, 2, and 3, $------.
    Alternate items in order of priority. Furnish all labor, material, 
equipment, etc., to paint:
    Item No. 2--Building No. 1 only $------.
    Item No. 3--Building No. 2 only $------.


A single award will be made on Item No. 1, but in the event the offer 
exceeds the funds available, a single award will be made on Item No. 2, 
or a combination of Item Nos. 2 and 3. Offerors should quote a price on 
each item listed.

[49 FR 12599, Mar. 29, 1984, as amended at 50 FR 791, Jan. 7, 1985; 51 
FR 23068, June 25, 1986; 52 FR 28559, July 31, 1987; 52 FR 49017, Dec. 
29, 1987; 54 FR 30044, July 18, 1989; 63 FR 69219, Dec. 16, 1998]



Sec. 814.202  General rules for solicitation of bids.



Sec. 814.202-4  Bid samples.

    When it has been determined that samples are necessary to the proper 
awarding of a contract, the provision set forth in 852.214-73 will be 
added to the provision in FAR 52.214-20.

[49 FR 12599, Mar. 29, 1984, as amended at 52 FR 49017, Dec. 29, 1987]



Sec. 814.203  Methods of soliciting bids.



Sec. 814.203-1  Mailing or delivery to prospective bidders.

    The contracting officer will include either a bid envelope, or 
Optional Form 17, Sealed Bid Label, with each invitation for bids 
furnished to prospective bidders.

[49 FR 12599, Mar. 29, 1984, as amended at 51 FR 23068, June 25, 1986; 
52 FR 28559, July 31, 1987; 58 FR 48974, Sept. 21, 1993]



Sec. 814.204  Records of invitations for bids and records of bids.

    (a) A single register will be established and maintained by the 
issuing office on a fiscal year basis for all solicitations by 
invitations for bid or requests for proposal number, date of issue, date 
of opening, commodity or service involved and disposition, i.e., 
contract number or purchase order number or, when applicable, no award.
    (b) Maintenance of the contract file prescribed by part 804 and 
retention of canceled Invitation for Bid files will fulfill the 
requirements set forth in FAR 14.204.



Sec. 814.205  Solicitation mailing lists.



Sec. 814.205-1  Establishment of lists.

    From the solicitations mailing list applications received, each 
contracting activity will compile and keep current a Solicitations 
Mailing List file. The lists will be maintained according to the 
commodity classification or group of items normally listed on the same 
invitation for bids.

[49 FR 12599, Mar. 29, 1984, as amended at 51 FR 23068, June 25, 1986; 
52 FR 28559, July 31, 1987]



Sec. 814.205-2  Removal of names from solicitation mailing lists.

    Except as provided for in FAR 14.205-2, no Department of Veterans 
Affairs contracting officer, or other employee, shall remove from the 
solicitation mailing list the name of any prospective solicitation.

[49 FR 12599, Mar. 29, 1984, as amended at 51 FR 23068, June 25, 1986; 
52 FR 28559, July 31, 1987]



Sec. 814.205-5  Release of solicitation mailing lists.

    When invitations for bids for supply and service contracts have been 
issued, contracting officers may furnish, upon request of an individual 
or institution having a bona fide interest in such information, a list 
of the prospective bidders to whom invitations for bids were submitted. 
The provisions of FAR 14.205-5 will be observed with respect to 
invitations for bids for construction contracts.



Sec. 814.208  Amendment of invitation for bids (construction).

    Amendments will be sent to holders of drawings and specifications by 
certified mail, return receipt requested. (Amendments may be made by 
telegram, if time does not permit mailing.)

[[Page 182]]

                    Subpart 814.3_Submission of Bids



Sec. 814.301  Responsiveness of bids.

    Where the timeliness of the submission of a bid, modification or 
withdrawal cannot be administratively determined in accordance with FAR 
14.301, the matter will be submitted by the contracting officer directly 
to the Comptroller General for decision. The submission will include 
copies of all pertinent papers. A copy of each submission will be 
forwarded to the Deputy Assistant Secretary for Acquisition and Materiel 
Management.



Sec. 814.302  Bid submission.

    A bid hand-carried by the bidder or his agent will be considered 
late unless delivered to the addressee designated in the bid invitation 
prior to the time set for opening.

[49 FR 12599, Mar. 29, 1985, as amended at 50 FR 791, Jan. 7, 1985]



Sec. 814.304  Late bids, late modifications of bids, or late withdrawal 
          of bids.



Sec. 814.304-2  Notification to late bidders.

    The notification to late bidders will specify the final date by 
which the evidence must be received to be considered. This date must be 
within the time allowed by the apparent low bidder for acceptance of his 
bid.



Sec. 814.304-4  Records.

    All bids received by mail (or telegram where authorized) will be 
time and date stamped immediately upon receipt at the VA installation 
mail room and in the office of the addressee designated in the 
invitation. This will firmly establish the time of receipt of bids, or 
when bids are received in the office of the addressee subsequent to the 
time of opening, and it will establish whether or not the delay was due 
to mishandling on the part of VA.

[49 FR 12599, Mar. 29, 1984, as amended at 54 FR 40063, Sept. 29, 1989; 
63 FR 69219, Dec. 16, 1998]

           Subpart 814.4_Opening of Bids and Award of Contract



Sec. 814.402  Opening of bids.

    (a) The contracting officer shall serve as, or designate, a bid 
opening officer, and shall also designate a recorder.
    (b) The form and amount of bid security and name of surety will be 
read aloud and recorded.

[49 FR 12599, Mar. 29, 1985, as amended at 50 FR 792, Jan. 7, 1985]



Sec. 814.403  Recording of bids.

    The information required for bid evaluation shall be recorded on the 
appropriate Abstract of Offers form (SF 1409 or OF 1419). The evaluation 
data may be recorded on supplemental sheets or forms such as VA Form 10-
2237b, Request for Dietetic Supplies, providing that such supplemental 
sheets or forms are covered by one of the forms authorized above for 
recording bid or price data. In addition to those instructions set forth 
in FAR 14.403, the bid opening officer shall certify on the abstract the 
date and hour at which the bids were opened. Where erasures, 
strikeovers, or changes in price are noted at the time of opening, a 
statement to that effect will also be included on, or attached to, the 
abstract or record of bids.

[49 FR 12599, Mar. 29, 1985, as amended at 61 FR 11586, Mar. 21, 1996; 
63 FR 69219, Dec. 16, 1998]



Sec. 814.404  Rejection of bids.



Sec. 814.404-1  Cancellation of invitations after opening.

    (a) A copy of each invitation for bids which is canceled as provided 
for in FAR 14.404-1, together with the abstract showing to whom such 
bids were sent, will be filed in a separate folder identified by the 
invitation number. Invitations for bids which result in no bids being 
received will be handled in like manner. In each instance the abstract 
will be annotated to show why an award was not made. These folders will 
be retained for the current and two succeeding fiscal years.
    (b) The authority to approve cancellation of invitations for bid 
after

[[Page 183]]

opening and the authority to approve the acquisition after cancellation 
as provided in FAR 14.404-1(e) is delegated to the head of the 
contracting activity. The contracting officer will submit a D&F to the 
head of the contracting activity for signature.

[49 FR 12599, Mar. 29, 1984, as amended at 51 FR 23068, June 25, 1986; 
52 FR 28560, July 31, 1987; 63 FR 69219, Dec. 16, 1998]



Sec. 814.404-2  Rejection of individual bids.

    (a) When a bid that is being considered for an award is found to be 
incomplete, e.g., all pages of the invitation have not been returned by 
the bidder, the contracting officer will take whichever of the following 
actions that is appropriate:
    (1) Make a determination that the bid as submitted is in such a form 
that acceptance would create a valid and binding contract, requiring the 
contractor to perform in accordance with all of the material terms and 
conditions of the invitation. Such a determination may be based on the 
fact that the bid as submitted includes evidence that the offeror 
intends to be bound by all the material terms and conditions of the 
invitation.
    (2) Make a determination that the bid as submitted is in such form 
that acceptance would not create a valid and binding contract.
    (b) When a single bid is received in response to a solicitation, the 
offer shall not be rejected simply because it specifies a bid acceptance 
time which is shorter than that contained in the solicitation, unless a 
compelling reason exists for rejecting such a bid. Insufficient time to 
properly evaluate an offer shall be considered a compelling reason for 
rejection; however, the contracting officer will first request the 
offeror to extend the acceptance date of the bid to allow for proper 
evaluation.
    Note: In those cases where more than one bid is received, an 
individual bid which is not in compliance with the Government's bid 
acceptance time shall be rejected as nonresponsive since consideration 
of such an offer would unfairly disadvantage other bidders.



Sec. 814.404-70  Questions involving the responsiveness of a bid.

    Questions involving the responsiveness of a bid which cannot be 
resolved by the contracting officer may be submitted to the Comptroller 
General through the Deputy Assistant Secretary for Acquisition and 
Materiel Management, Acquisition Administration Team, or the Chief 
Facilities Management Officer, Office of Facilities Management, as 
appropriate. Pertinent documentation must accompany the submission.

[49 FR 12599, Mar. 29, 1984, as amended at 54 FR 40063, Sept. 29, 1989; 
61 FR 11586, Mar. 21, 1996; 63 FR 69219, Dec. 16, 1998]



Sec. 814.407  Mistakes in bids.



Sec. 814.407-3  Other mistakes disclosed before award.

    (a) In accordance with the provisions of the FAR 14.407-3(e), the 
authority of the Secretary to make the administrative determinations set 
forth in FAR 14.407-3 (a), (b), (c), and (d) is hereby delegated, 
without power of redelegation, to the Deputy Assistant Secretary for 
Acquisition and Materiel Management. This delegation in no way impairs 
the delegations contained in Comptroller General decision B-122003, 
dated November 22, 1954.
    (b) When a bidder alleges a mistake in his or her bid prior to 
award, after complying with the provisions of FAR 14.407-3, the 
contracting officer will submit the complete file to the Deputy 
Assistant Secretary for Acquisition and Materiel Management, Acquisition 
Administration Team, for an administrative determination. Based upon the 
evidence submitted, the Deputy Assistant Secretary for Acquisition and 
Materiel Management will determine the action to be taken by the 
contracting officer. Prior to its release to the contracting officer, 
this determination will be submitted to the General Counsel (025) for 
approval. Pending receipt of the determination, no award shall be made.
    (c) Based on the evidence, when the Deputy Assistant Secretary for 
Acquisition and Materiel Management believes that the case should be 
submitted to the Comptroller General for

[[Page 184]]

decision, he/she will prepare the submission and forward it to the 
Comptroller General through the General Counsel (025). The decision of 
the Comptroller General will be furnished to the contracting officer by 
the Deputy Assistant Secretary for Acquisition and Materiel Management, 
Acquisition Administration Team. A copy of each such decision will be 
furnished to the General Counsel (025).

[49 FR 12599, Mar. 29, 1984, as amended at 54 FR 30044, July 18, 1989; 
61 FR 11586, Mar. 21, 1996. Redesignated and amended at 63 FR 69219, 
Dec. 16, 1998]



Sec. 814.407-4  Mistakes after award.

    (a) When a contracting officer corrects a mistake in bid pursuant to 
FAR 14.407-4(a), a copy of the contract amendment or supplemental 
agreement together with a copy of the contracting officer's 
determination will be forwarded to the Deputy Assistant Secretary for 
Acquisition and Materiel Management, Acquisition Administration Team 
Division.
    (b) For mistakes in bid alleged after award, the contracting 
officer's proposed determination, prepared in accordance with FAR 
14.407-4, will be forwarded to the General Counsel (025) through the 
Deputy Assistant Secretary for Acquisition and Materiel Management, 
Acquisition Administration Team, for legal coordination. The results of 
this coordination will be transmitted to the contracting officer by the 
Deputy Assistant Secretary for Acquisition and Materiel Management, 
Acquisition Administration Team. The final determination on the alleged 
mistake in bid after award will be made by the contracting officer.
    (c) The Deputy Assistant Secretary for Acquisition and Materiel 
Management, Acquisition Administration Team, will maintain the agency 
records of mistakes in bids after award required by FAR 14.407-4.

[49 FR 12599, Mar. 29, 1984, as amended at 54 FR 30044, July 18, 1989, 
as amended at 61 FR 11586, Mar. 21, 1996. Redesignated and amended at 63 
FR 69219, Dec. 16, 1998]



Sec. 814.408  Award.



Sec. 814.408-70  Award when only one bid is received.

    When only one bid is received in response to an invitation for bids, 
such bid may be considered and accepted if (a) the specifications used 
in the invitation were not restrictive, (b) adequate competition was 
solicited, (c) the price is reasonable, and (d) the bid is otherwise in 
accordance with the invitation for bids. Such determination will be made 
in writing, and included on or attached to the abstract of bids.

[49 FR 12599, Mar. 29, 1984. Redesignated at 63 FR 69219, Dec. 16, 1998]



Sec. 814.408-71  Recommendation for award (construction).

    (a) For Central Office contracts, the Chief Facilities Management 
Officer, Office of Facilities Management, after analyzing all bids 
received, will submit a memorandum to the Secretary (00) recommending 
award or other disposition of the project. A copy of each of the 
following will accompany the memorandum:
    (1) The invitation.
    (2) Each bid received.
    (3) The abstract.
    (4) Any other pertinent data.
    (b) On facility level contracts, the Chief, Engineering Service, 
will analyze all bids received and submit to the contracting officer a 
memorandum recommending award or other disposition of the project. 
However, the final decision to accept or reject the lowest responsive 
bid and the determination as to the responsibility of a prospective 
contractor shall be made by the contracting officer alone.

[49 FR 12599, Mar. 29, 1984, as amended at 54 FR 30044, July 18, 1989; 
54 FR 40063, Sept. 29, 1989; 61 FR 11586, Mar. 21, 1996. Redesignated at 
63 FR 69219, Dec. 16, 1998]



Sec. 814.409  Information to bidders.

    (a) Prior to award, no information as to probable acceptance or 
rejection of any offer shall be given to any bidder or other person 
outside the Department of Veterans Affairs.
    (b) Except as provided in paragraphs (c) and (d) of this section, 
information as to performance under contract or an accepted bid is not 
public information

[[Page 185]]

and will be released to persons outside VA only upon the authority of 
the immediate supervisor of the contracting officer.
    (c) Except as provided in paragraph (d) of this section, the 
contracting officer may furnish information as to performance under a 
contract to those having a legitimate interest, such as banks, other 
financial companies and Government departments and agencies.
    (d) When litigation is involved, all information will be furnished 
through the General Counsel (025).

[49 FR 12599, Mar. 29, 1984, as amended at 54 FR 30045, July 18, 1989; 
54 FR 40063, Sept. 29, 1989. Redesignated at 63 FR 69219, Dec. 16, 1998]

                   PART 815_CONTRACTING BY NEGOTIATION

                   Subpart 815.5_Unsolicited Proposals

Sec.

Sec. 815.504 Advance guidance.

Sec. 815.506 Department procedures.

Sec. 815.506-1 Receipt and initial review.

                     Subpart 815.6_Source Selection


Sec. 815.607 Disclosure of mistakes before award.

                     Subpart 815.8_Price Negotiation


Sec. 815.804-70 Preproduction and start-up and other nonrecurring costs.

Sec. 815.805-4 Technical analysis.

    Authority: 38 U.S.C. 501 and 40 U.S.C. 486(c).

    Source: 49 FR 12604, Mar. 29, 1984, unless otherwise noted.

                   Subpart 815.5_Unsolicited Proposals

    Source: 51 FR 6005, Feb. 19, 1986, unless otherwise noted.



Sec. 815.504  Advance guidance.

    (a) Any inquiries from a potential offeror of an unsolicited 
proposal shall be referred to the appropriate VA contact point 
designated in 815.506(a). The contact point will determine the nature of 
the potential proposal and determine what technical/professional 
disciplines need be consulted to determine the VA need for such a 
proposal and the likelihood that a formal proposal would be favorably 
reviewed. In consultation with such technical/professional offices, the 
VA contact point will inform the potential proposer of any additional 
information required to provide advance guidance as well as the 
information specified in FAR 15.504.
    (b) The FAR contact point will maintain a record of advance guidance 
provided and the disposition/recommendation regarding the potential 
offer.



Sec. 815.506  Department procedures.

    (a) The Chief, Acquisition and Materiel Management Service, 
servicing the field facility and the Director, VA Marketing Center, 
Hines, Illinois are designated as the VA contact points for unsolicited 
proposals submitted at the facility level. The Deputy Assistant 
Secretary for Acquisition and Materiel Management is designated as the 
VA contact point for all unsolicited proposals received at VA Central 
Office.
    (b) Each unsolicited proposal received by the Department of Veterans 
Affairs will be submitted to the appropriate contact point.
    (c) The VA contact point will review the unsolicited proposal and 
ensure that it is complete as prescribed in FAR 15.505. If required 
information is not submitted, the VA contact point will:
    (1) Determine if advance guidance as specified in FAR 15.504 is 
necessary (2) request that the offeror provide the necessary information 
if it is determined that the formal evaluation prescribed in FAR 15.506-
2 is appropriate; and (3) establish an estimated due date for completion 
of the review process.

[51 FR 6005, Feb. 19, 1986, as amended at 54 FR 40063, Sept. 29, 1989; 
54 FR 42508, Oct. 17, 1989]



Sec. 815.506-1  Receipt and initial review.

    (a) When VA contact point determines that a comprehensive evaluation 
is to be undertaken (i.e., the proposal complies with the requirements 
in FAR 15.506-1(a) and is related to the mission of VA), the offeror 
will be contacted to ensure that all data that should be restricted in 
accordance with FAR 15.509 has been identified.
    (b) The VA contact point will maintain a log of all unsolicited 
proposals

[[Page 186]]

which will be evaluated. The log will indicate:
    (1) The date the proposal was received;
    (2) The date that the unsolicited proposal has been determined to 
warrant a comprehensive evaluation;
    (3) A description of the proposal;
    (4) The offices requested to evaluate the proposal and the date such 
offices are requested to return their evaluations;
    (5) The date the reviewing offices finalize their respective 
evaluation; and
    (6) The final disposition of the proposal.
    (c) Each office which is assigned responsibility for reviewing an 
unsolicited proposal will be advised of the need to evaluate the 
proposal against the criteria set forth in FAR 15.507(a) (1) through 
(3), i.e., is the proposal available to the Government without 
restriction from another source, does it closely resemble a pending 
competitive acquisition, is the proposal lacking in demonstrated 
innovation or uniqueness? If the reviewers conclude in the affirmative 
as to any one of these questions, the VA contact point shall be advised 
and return the proposal to the proposer.
    (d) With regard to an unsolicited proposal being processed at a 
field facility, if the reviewing offices conclude that the unsolicited 
proposal should be accepted and provide the justification and 
certification required by FAR 15.507, the VA contact point will obtain 
the prior approval of the Deputy Assistant Secretary for Acquisition and 
Materiel Management (93) prior to proceeding with negotiation. In order 
to obtain the approval, the VA contact point will submit all necessary 
documentation supporting the noncompetitive negotiation including any 
justification and approval required by FAR Subpart 6.3 and results of 
any synopsis required by FAR Subpart 5.2 The Deputy Assistant Secretary 
for Acquisition and Materiel Management will coordinate the proposal 
with the cognizant VA Central Office program official(s) and furnish the 
VA contact point with the final decision.
    (e) All copies of the unsolicited proposal will be controlled by the 
contact point by numbering each copy. If a reviewing office requires 
additional copies, the reviewing office will obtain approval of the VA 
contact point prior to duplication, numbering the copies as specified by 
the contact point. All copies will be returned to the VA contact point 
once review is completed.

[51 FR 6005, Feb. 19, 1986, as amended at 54 FR 40063, Sept. 29, 1989]

                     Subpart 815.6_Source Selection



Sec. 815.607  Disclosure of mistakes before award.

    The Head of the Contracting Activity (as defined in 802.1) is 
delegated authority to permit correction of mistakes in proposals before 
award consistent with FAR 15.607.

[54 FR 45736, Oct. 31, 1989]

                     Subpart 815.8_Price Negotiation



Sec. 815.804-70  Preproduction and start-up and other nonrecurring 

costs.

    In evaluating start-up and other nonrecurring costs, the extent to 
which these costs are included in the proposed price and the intent to 
absorb or recover any such costs in any future noncompetitive 
procurement or other pricing action will be determined. The contracting 
officer will ascertain, with the assistance of the Assistant Inspector 
General for Policy, Planning and Resources (53), as required or 
considered necessary, that payment of such costs is not duplicated. For 
example, cost of equipment paid for by the Government through a setup or 
connection agreement will not be included in depreciation costs of a 
subsequently negotiated agreement.

[49 FR 12604, Mar. 29, 1984, as amended at 50 FR 792, Jan. 7, 1985; 54 
FR 40063, Sept. 29, 1989]



Sec. 815.805-4  Technical analysis.

    (a) Contracting officers are responsible for the technical and 
administrative sufficiency of the contracts they enter into and ensuring 
that all legal and technical reviews are accomplished. To this end, 
initial and revised pricing of all negotiated prime contracts (including 
subcontract pricing

[[Page 187]]

under them) and contract modifications will be subject to technical 
analyses to the degree the contracting officer deems necessary (see 
801.602-70 for required legal reviews). Technical analyses of the 
proposals will be requested by the contracting officer from the 
appropriate technical personnel to address, as a minimum, the items set 
forth in FAR Subpart 15.805-4. Contracting officers shall not begin 
negotiation of or award any negotiated contracts or contract 
modifications before receipt, analysis and consideration of documented 
technical evaluations for every procurement action requiring such 
analysis under the conditions prescribed in FAR 15.805-4. The results of 
such analyses will be documented in the contract file and will also be 
made available to the auditor performing the preaward audit required by 
815.805-5.
    (b) When, in the opinion of the contracting officer, the complexity 
of the proposed contract warrants, he/she will submit the proposed 
contract to the Deputy Assistant Secretary for Acquisition and Materiel 
Management (93) for review and comment. When deemed advisable, the 
Deputy Assistant Secretary for Acquisition and Materiel Management (93) 
will request the General Counsel to accomplish a legal review. This 
review is in addition to the legal review specified in 801.602-70.

                       PART 816_TYPES OF CONTRACTS

                 Subpart 816.1_Selecting Contract Types

Sec.

Sec. 816.102 Policies.

                 Subpart 816.70_Unauthorized Agreements


Sec. 816.7001 Letters of availability.

    Authority: 38 U.S.C. 501 and 40 U.S.C. 486(c).

                 Subpart 816.1_Selecting Contract Types



Sec. 816.102  Policies.

    (a) Contracts which include an economic price adjustment provision 
other than those contracts awarded by the National Cemetery System for 
monuments or those contracts that contain the clause for service 
contracts (FAR 22.1006(c)) require the prior approval of the Deputy 
Assistant Secretary for Acquisition and Materiel Management (90). The 
request for approval shall clearly set forth the need for the provision.
    (b) Any contract involving direct obligation of appropriations and 
which extends beyond the appropriation of the year in which the contract 
period begins or which is for more than one fiscal year, is to contain 
provisions to the effect that:
    (1) It is made for the period covered by the contract, subject to 
the availability of appropriations in the ensuing year(s), and
    (2) No service is to be performed by the contractor after September 
30 of each fiscal year unless and until specifically authorized by the 
contracting officer or representative.
    (c) Architect-engineer contracts, construction contracts, or 
professional engineer contracts, financed by ``no year appropriations'' 
are not subject to the requirements of paragraph (b) of this section.

[49 FR 12607, Mar. 29, 1984, as amended at 50 FR 792, Jan. 7, 1985; 54 
FR 30045, July 18, 1989; 61 FR 20492, May 7, 1996]

                 Subpart 816.70_Unauthorized Agreements



Sec. 816.7001  Letters of availability.

    (a) Description. A letter of availability (sometimes inappropriately 
called a letter of intent) is a letter to a supplier primarily for the 
purpose of obtaining a place on the supplier's production or delivery 
schedule for long lead time items. Such a letter typically indicates 
that products or services are being considered for procurement, but that 
the statement of intent is not to be construed as a commitment. Such 
letters of availability are sometimes solicited by prospective 
contractors, or they may be originated by Government personnel. A letter 
of availability is distinguished from a letter contract which is 
specifically authorized in FAR 16.603.
    (b) Policy. (1) Unless specifically authorized by the Deputy 
Assistant Secretary for Acquisition and Materiel Management, letters of 
availability are not to be utilized for the following reasons:

[[Page 188]]

    (i) While such letters of availability may disclaim Government 
liability, they may induce potential contractors to initiate costly 
preparations in anticipation of contract award.
    (ii) Procurements announced in such letters do not always 
materialize. The result may be costly to the Government, the prospective 
contractor, or both. If the author of the letter of availability is an 
authorized contracting officer of the Department, the Government may be 
bound by action, even though the action is contrary to sound procurement 
practices and/or fiscal regulations. If the author of the letter of 
availability lacks procurement authority, the prospective contractor may 
incur substantial expenditures which may not be recovered from the 
Government, but for which the prospective contractor may seek to hold 
the unauthorized author personally liable.
    (iii) The issuance of a letter of availability may violate the 
``Anti-Deficiency Act'' (31 U.S.C. 1341).
    (2) It is recognized that potential contractors have a need to 
obtain procurement information at the earliest possible moment in order 
to make timely preparations. To this end, procurement personnel are 
expected to act as efficiently and expeditiously as possible on all 
procurement actions.

[49 FR 12607, Mar. 29, 1974, as amended at 54 FR 30044, July 18, 1989; 
54 FR 40064, Sept. 29, 1989]

                  PART 817_SPECIAL CONTRACTING METHODS

                  Subpart 817.1_Multi-Year Contracting

Sec.

Sec. 817.105 Policy.

Sec. 817.105-1 Uses.

                          Subpart 817.2_Options


Sec. 817.202 Use of options.

                Subpart 817.4_Leader Company Contracting


Sec. 817.402 Limitations.

    Authority: 38 U.S.C. 501 and 40 U.S.C. 486(c).

    Source: 49 FR 12608, Mar. 29, 1984, unless otherwise noted.

                  Subpart 817.1_Multi-Year Contracting



Sec. 817.105  Policy.



Sec. 817.105-1  Uses.

    (a) Pursuant to Title 38, United States Code, Chapter 1, Section 114 
(as amended by Pub. L. 101-237), multiyear contracting not exceeding 5 
years is authorized for obtaining supplies and services when the 
Secretary has made the following determinations:
    (1) Appropriations are available for obligation for the total 
payments for the fiscal year the contract is entered into plus the 
estimated amount of any cancellation charges.
    (2) The contract is in the best interest of the Government due to 
the effect it would have in:
    (i) Reducing cost;
    (ii) Achieving contract administration and other efficiencies;
    (iii) Increasing quality contract performance;
    (iv) Encouraging effective competition.
    (3) During the contract period:
    (i) There is a continuing need for the supplies or services;
    (ii) There is little likelihood of substantial changes in need for 
the supplies and services in terms of quantity or rate of delivery; and
    (iii) The specifications for the supplies or services are expected 
to be reasonably stable.
    (4) The risks relating to a prospective contractor's ability to 
perform in accordance with the specifications and other contract terms 
are not excessive;
    (5) The use of a multiyear contract will not inhibit competition 
from small business firms;
    (6) In the case of a pharmaceutical item for which a patent has 
expired less than 4 years before the solicitation issue date, there is 
no substantial likelihood that increased competition will occur during 
the term of the contact that would make the contract prices higher than 
would be reasonable.
    (b) The authority of the Secretary to enter into multiyear contracts 
and to make the determinations specified in 817.102-1(a) of this section 
is delegated as follows:

[[Page 189]]

    (1) Heads of contracting activities. For contracts not requiring 
legal/technical reviews pursuant to 801.602-70 (for purposes of 
determining applicability of the thresholds, the total dollar amount of 
the contract over its full multiyear term will be used), and which do 
not contain a first year cancellation ceiling which exceeds 20 percent 
of the total dollar amount of the contract over the full multi-year 
term.
    (2) Deputy Assistant Secretary for Acquisition and Materiel 
Management, will approve all proposed uses of multiyear contracts not 
authorized for approval by heads of contracting activities. For approval 
purposes, the head of the contracting activity will justify and document 
the use of a multiyear contract against each of the criteria specified 
in 817.102-1 (a)(1) through (a)(6) of this section. The justification 
will additionally delineate the cancellation ceiling and the method used 
for calculating that ceiling and will specify the advantages of 
multiyear contracts over other alternative methods, e.g., option year 
contracts.
    (c) Cancellation ceilings will be carefully developed in accordance 
with FAR 17.106-1.

[54 FR 980, Jan. 11, 1989, as amended at 57 FR 44129, Sept. 24, 1992. 
Redesignated and amended at 63 FR 69219, Dec. 16, 1998]

                          Subpart 817.2_Options



Sec. 817.202  Use of options.

    All solicitations developed pursuant to Office of Management and 
Budget Circular A-76 (Revised) cost comparisons will provide for one 
year renewal options as prescribed in FAR Subpart 17.2. Requests to use 
less or more than the prescribed contract period for Circular A-76 
(Revised) cost comparisons will be forwarded to the Deputy Assistant 
Secretary for Acquisition and Material Management (90).

[49 FR 12608, Mar. 29, 1984, as amended at 54 FR 980, Jan. 11, 1989; 57 
FR 44129, Sept. 24, 1992]

                Subpart 817.4_Leader Company Contracting



Sec. 817.402  Limitations.

    (a) Except as provided in 817.402(b), no leader company contracts 
shall be initiated or consummated.
    (b) The Deputy Assistant Secretary for Acquisition and Materiel 
Management (90) may designate a contracting officer to enter into a 
leader company contract when considered beneficial to the Department and 
the Government. When a contracting officer is designated the authority 
to enter into a leader company contract, the designation will be by name 
for a specific contract. The proposed contract with a determination and 
finding will be submitted for legal review in accordance with 801.602-
71.

[49 FR 12608, Mar. 29, 1984, as amended at 54 FR 980, Jan. 11, 1989; 54 
FR 40064, Sept. 29, 1989]

[[Page 190]]

                   SUBCHAPTER D_SOCIOECONOMIC PROGRAMS

    PART 819_SMALL BUSINESS AND SMALL DISADVANTAGED BUSINESS CONCERNS

Sec.

Sec. 819.000 Scope of part.

                         Subpart 819.2_Policies


Sec. 819.201 General policy.

Sec. 819.202-5 Data collection and reporting requirements.

Sec. 819.202-70 Additional responsibilities.

               Subpart 819.5_Set-Asides for Small Business


Sec. 819.502-2 Total set-asides.

Sec. 819.502-3 Partial set-asides.

     Subpart 819.6_Certificates of Competency and Determinations of 
                               Eligibility


Sec. 819.602-3 Appealing Small Business Administration's decision to 
          issue Certificates of Competency.

 Subpart 819.8_Contracting With the Small Business Administration (The 
                              8(a) Program)


Sec. 819.800 General.

Sec. 819.803 Selecting acquisitions for the 8(a) program.

Sec. 819.804 Evaluation, offering, and acceptance.

Sec. 819.806 Pricing the 8(a) contract.

Sec. 819.806-4 Funding business development expense.

Sec. 819.807 Estimating fair market price.

Sec. 819.807-70 Commitments of the Office of Facilities Mnaagement 
          funded projects for the 8(a) program.

Sec. 819.809-70 Procurement of supplies, services, and research and 
          development.

Sec. 819.809-71 Procurement of construction.

       Subpart 819.70_Veteran-Owned and Operated Small Businesses


Sec. 819.7001 Policy.

Sec. 819.7002 Definition.

Sec. 819.7003 Procedure.

Sec. 819.7004 Waiver of the use of veteran-owned firms.

    Authority: 38 U.S.C. 501 and 40 U.S.C. 486(c).

    Source: 49 FR 12608, Mar. 29, 1984, unless otherwise noted.



Sec. 819.000  Scope of part.

    This subpart sets forth the Department of Veterans Affairs small 
business program including section 8(a) contracts with Small Business 
Administration (SBA) and unilateral set-asides. It establishes 
responsibility for making such determinations, reviewing determinations 
and evaluation of the program.

[49 FR 12608, Mar. 29, 1984, as amended at 54 FR 40064, Sept. 29, 1989]

                         Subpart 819.2_Policies



Sec. 819.201  General policy.

    (a) The Director, Office of Small and Disadvantaged Business 
Utilization (OSDBU) (00SB) is responsible for the overall supervision of 
the Department of Veterans Affairs Small and Disadvantaged Business 
Utilization program and will assist administrations and key staff 
officials in developing their respective small business programs.
    (b) The Chief Facilities Management Officer will develop and 
coordinate the Department small business program, as it affects 
construction projects, with the OSDBU.
    (c) The Director, Veterans Canteen Service (VCS), will designate an 
employee of his/her organization to serve as liaison between the VCS and 
the Office of Small and Disadvantaged Business Utilization on small 
business problems affecting the VCS.
    (d) The Director, National Cemetery System; Under Secretary for 
Benefits; Chief Facilities Management Officer; Deputy Assistant 
Secretary for Administration; Director, Acquisition Operations and 
Analysis Service; Executive Director and Chief Operating Officer, VA 
National Acquisition Center; and Directors of field facilities with 
acquisition and materiel management activities will designate an 
employee of their respective organizations to serve as a small and small 
disadvantaged business specialist. This employee will

[[Page 191]]

be a full-time employee of the respective contracting activity, will be 
familiar with the supplies and services purchased at the activity, and 
will be fully cognizant of the regulations implementing the Small 
Business Act. The principal duties will include assisting the Small 
Business Administration Procurement Center Representative (if assigned) 
in activities and functions relating to sections 8 and 15 of the Small 
Business Act. The name, telephone number, and mailing symbol of each 
designee and any successor will be forwarded to the Director, Office of 
Small and Disadvantaged Business Utilization, through the Deputy 
Assistant Secretary for Acquisition and Materiel Management.

[49 FR 12608, Mar. 29, 1984, as amended at 52 FR 37317, Oct. 6, 1987; 54 
FR 40064, Sept. 29, 1989; 55 FR 49899, Dec. 3, 1990; 56 FR 44011, Sept. 
6, 1991; 63 FR 69219, Dec. 16, 1998]



Sec. 819.202-5  Data collection and reporting requirements.

    Administration heads, staff office directors and heads of 
contracting activities will, in addition to the responsibilities 
designated in FAR 19.202-5, cooperate with the Office of Small and 
Disadvantaged Business Utilization in formulating specific socio-
economic procurement goals and providing other data necessary for goal 
assessment.
    (a) Each VA acquisition activity shall establish goals for 
expenditure of funds with preferred businesses within their projected 
annual budget. The preference programs supported by VA are listed in 
paragraph (c) of this section. OSDBU is responsible for Department-wide 
goals and accomplishments and will approve or adjust each acquisition 
activity's goals.
    (b) A Procurement Preference Program Goals Report (Report Control 
Symbol 00-0427) shall be submitted annually by each acquisition activity 
to reach OSDBU by November 1. Each report shall contain total 
expenditure estimates and goals for the current fiscal year and 
explanations of the methods utilized to arrive at each proposed goal.
    (c) All acquisition activities shall submit information and 
procurement preference goals identified in paragraphs (c)(1) through 
(c)(8) of this section. In addition, the Office of Acquisition and 
Materiel Management, the VA National Acquisition Center and the Office 
of Facilities Management shall submit the information identified in 
paragraphs (c)(1) through (c)(11) of this section. Goals shall be 
expressed in dollars and rounded to the nearest thousand.
    (1) Estimate of the total procurement dollar expenditures (excluding 
delivery orders against General Services Administration (GSA) FSS 
contracts).
    (2) Small business awards (includes paragraphs (c)(3) through (c)(5) 
of this section).
    (3) Minority business direct awards.
    (4) SBA 8(a) awards.
    (5) Women-owned business awards.
    (6) Veteran-owned business awards (includes paragraphs (c)(8) and 
(c)(9) of this section).
    (7) Vietnam era veteran-owned business awards (including disabled 
Vietnam era veterans).
    (8) Disabled veteran-owned business awards (other than Vietnam era 
disabled veterans).
    (9) Estimate of total dollar value of subcontracts to be awarded by 
reporting prime contractors.
    (10) Subcontracts to be awarded to small business concerns by prime 
contractors.
    (11) Subcontracts to be awarded to small disadvantaged business 
concerns by prime contractors.
    (d) Anticipated problems in the attainment of the proposed goal in 
any category shall also be identified. This information will be used in 
negotiating the Department goals with SBA.
    (e) As an addendum to the report, each acquisition activity shall 
provide a narrative explaining the reason(s) for any shortfall(s) in the 
achievement of any previous fiscal year goal category. This explanation 
shall be specific and will be used by OSDBU to justify Department 
shortfalls.
    (f) Upon review by OSDBU of the proposed goals, each acquisition 
activity will be notified of the acceptance of goals as submitted, or of 
any deficiencies. If the goals are not acceptable, the acquisition 
activity will be requested to submit further written justification for 
the goals submitted. Based on documents submitted,

[[Page 192]]

OSDBU will make a final determination on the goal assignment.
    (g) Accomplishment of goals identified in paragraphs (c)(1) through 
(c)(8) of this section will be determined by OSDBU from data reported by 
acquisition activities into the VA Federal Procurement Data System 
(FPDS).
    (h) Achievement of subcontracting goals shall be reported by the 
Office of Facilities Management, the Office of Acquisition and Materiel 
Management, and the VA National Acquisition Center on a semiannual 
basis, to be received by OSDBU not later than April 30 for the period 
ending March 31, and November 1 for the period ending September 30.

[49 FR 12608, Mar. 29, 1984, as amended at 54 FR 40064, Sept. 29, 1989; 
55 FR 49900, Dec. 3, 1990; 56 FR 44011, Sept. 6, 1991; 63 FR 69220, Dec. 
16, 1998]



Sec. 819.202-70  Additional responsibilities.

    In addition to the duties designated in FAR 19.202, VA contracting 
officers will perform the following functions in furtherance of the 
small business program:
    (a) Develop a plan of operation to increase the share of contracts 
and purchase orders awarded to small business, including veteran, and 
Vietnam era and disabled veteran-owned concerns.
    (b) Promote the disadvantaged business program through the SBA 8(a) 
procedures set forth in Subpart 819.8.
    (c) Review the types and classes of items and services to be 
purchased to determine the applicability of individual small business 
set-asides. Class set-asides, established in accordance with criteria in 
FAR 19.503, shall be reviewed at least annually to determine whether 
items or services procured under a unilateral or joint set-aside should 
be modified or withdrawn. Updated lists of acquisitions reserved for 
small business on a class basis shall be maintained by heads of 
contracting activities.
    (d) On an annual basis, VA acquisition personnel shall request a 
Procurement Automated Source System (PASS) listing of veteran-owned, 
including Vietnam era and disabled, and woman-owned businesses capable 
of meeting identified requirements. Acquisition personnel will utilize 
PASS as a primary source file. Firms identified on the PASS list shall 
be included on solicitation mailing lists.
    (e) Assure that small business firms are identified on bid 
abstracts.
    (f) Assure that specifications are not unduly restrictive, thereby 
enabling small business participation to the maximum extent feasible.
    (g) Assist and counsel small business firms with individual 
problems.
    (h) Provide for counseling nonresponsive or nonresponsible small 
business bidders to help qualify them for future awards.
    (i) Attend conferences and meetings publicizing the small business 
program.
    (j) Promote the award of research contracts to small business firms.
    (k) Promote goals for small business, small business set-asides, 
small business subcontracting, 8(a) procurements, and purchases from 
women-owned businesses.
    (l) Review all urgent and sole source procurements to determine that 
they are sparingly made, thoroughly documented and approved by the head 
of the contracting activity.
    (m) If the acquisition activity is assigned an SBA Procurement 
Center Representative (PCR), assure that the representative is provided 
logistical support, cooperation, and access to all reasonably obtainable 
contract information directly pertinent to the PCR's official duties.
    (n) Encourage technical and requirements personnel to identify 
veteran-owned and women-owned small business sources.
    (o) Assure that plans are forwarded as specified in FAR 19.705-6(b).

[49 FR 12608, Mar. 29, 1984, as amended at 50 FR 792, Jan. 7, 1985; 51 
FR 23070, June 25, 1986; 52 FR 28559, July 31, 1987; 55 FR 49900, Dec. 
3, 1990; 56 FR 44011, Sept. 6, 1991; 63 FR 69220, Dec. 16, 1998]

               Subpart 819.5_Set-Asides for Small Business



Sec. 819.502-2  Total set-asides.

    (a) When a total small business set-aside is made, one of the 
following statements, as applicable, will be included in the 
solicitation for bids:

[[Page 193]]

    (1) Notice of total small business set-aside, page ----, applies to 
all items in this solicitation.
    (2) Notice of total small business set-aside, page ----, applies to 
items ---- through ---- in this solicitation.
    (b) Contracting officers must ensure that appropriate product or 
service classification and the related size standard are included in 
each solicitation.
    (c) All proposed procurement for construction anticipated to cost 
between $10,000 and $3 million and all proposed procurements for 
architect-engineer services construction projects of $3 million and less 
will be considered as though SBA had initiated a set-aside request. 
Determinations of the need to deviate from this policy made by the head 
of a contracting activity will require review by the Director, Office of 
Small and Disadvantaged Business Utilization.

[49 FR 12608, Mar. 29, 1984, as amended at 50 FR 792, Jan. 7, 1985; 63 
FR 69220, Dec. 16, 1998]



Sec. 819.502-3  Partial set-asides.

    When, in accordance with the provisions of FAR 19.502-3, it is 
determined that a particular procurement will be partially set aside for 
exclusive small business participation, the solicitation for bids shall 
state the appropriate product or service classification and appropriate 
size standard and the following statement shall be placed on the face 
page:

    Notice of partial small business set-aside, page ----, applies to 
Item ------ through Item ------ in this solicitation.

[63 FR 69220, Dec. 16, 1998]

     Subpart 819.6_Certificates of Competency and Determinations of 
                               Eligibility



Sec. 819.602-3  Appealing Small Business Administration's decision to 

issue Certificates of Competency.

    Formal VA appeals of an initial concurrence by the SBA Central 
Office in an SBA Regional Office decision to issue a Certificate of 
Competency (CoC) will be processed as follows:
    (a) When the contracting officer believes that VA should formally 
appeal the concurrence by the SBA Central Office in an SBA Regional 
Office decision to issue a CoC, the contracting officer will so notify 
the Deputy Assistant Secretary for Acquisition and Materiel Management 
(95B) in writing within five business days after receipt of the SBA 
Central Office's written confirmation of its determination. Within ten 
business days of the contracting officer's receipt of the SBA's written 
confirmation (or within a period acceptable to VA and the SBA), the 
Deputy Assistant Secretary for Acquisition and Materiel Management (95B) 
will advise the SBA Central Office that VA intends to file a formal 
appeal.
    (b) Within ten business days of the contracting officer's receipt of 
the SBA Central Office's written confirmation, the contracting officer 
will furnish an original and one copy of the appeal file to the Deputy 
Assistant Secretary for Acquisition and Materiel Management (95B). The 
file must contain a copy of the bid/offer from the firm considered 
nonresponsible, a copy of the bid/offer from the firm otherwise in line 
for award, a copy of the bid, a copy of the bid abstract, a copy of 
SBA's CoC Review Committee report, a copy of all correspondence with SBA 
on the matter, and the contracting officer's narrative statement 
establishing the error, omission, or other basis for disputing SBA's 
proposed responsibility determination.
    (c) The Deputy Assistant Secretary for Acquisition and Materiel 
Management (95B) will review the file prepared by the contracting 
officer. If the contracting officer's position is accepted, the Deputy 
Assistant Secretary for Acquisition and Materiel Management (95B) will 
transmit the formal appeal to the SBA Central Office within ten business 
days after notifying that office of VA's intent to appeal (or within a 
period acceptable to VA and the SBA). The contracting officer will be 
informed of the final SBA decision.
    (d) If, after the Central Office review, it is decided that a formal 
appeal should not be made to the SBA, the contracting officer will be 
advised of this decision and that the CoC should be accepted by VA. The 
SBA Central Office will also be advised that VA will

[[Page 194]]

not pursue its formal appeal. If the decision concerns major 
construction projects and the Office of Facilities Management disagrees 
with the decision made by the Deputy Assistant Secretary for Acquisition 
and Materiel Management, the matter will be referred to the Senior 
Procurement Executive for a final VA determination.

[52 FR 46083, Dec. 4, 1987, as amended at 54 FR 40064, Sept. 29, 1989; 
63 FR 69220, Dec. 16, 1998]

 Subpart 819.8_Contracting With the Small Business Administration (The 
                              8(a) Program)



Sec. 819.800  General.

    (a) No contract will be entered into with SBA under section 8(a) of 
the Small Business Act (15 U.S.C. 637(a)) unless a certification is made 
by the Administrator of that agency, or designee, that SBA is competent 
to perform the contract.
    (b) When it is determined that the requirements of the Department of 
Veterans Affairs are appropriate for inclusion in this program, the 
contracting officer will make this fact known to proper officials of the 
SBA regional office servicing his/her area. However, when projects 
funded from minor construction appropriation (between $400,000 and $2 
million) are proposed for 8(a) acquisition, the Director, Office of 
Small and Disadvantaged Business Utilization (OSDBU) (00SB), shall be 
contracted by telephone or notified in writing in order to afford the 
OSDBU an opportunity to identify possible 8(a) sources prior to 
apprising SBA officials. If the certification required by paragraph (a) 
of this section is received, the Department of Veterans Affairs 
contracting officer will secure from SBA the name(s) and location(s) of 
their subcontractor(s) and the unit price(s) to be paid. Should these 
prices be within a range acceptable to the Department of Veterans 
Affairs, the contracting officer will notify SBA of acceptance.
    (c) The contract will be made between the Department of Veterans 
Affairs and SBA and will be administered by the Department of Veterans 
Affairs.
    (d) In addition to meeting the requirements of 801.602-70, 
contracting officers will secure cost and pricing data prescribed in FAR 
15.403-4 and 815.804-2 when negotiating contracts under the SBA 8(a) 
program. Contracting officers will request an audit in accordance with 
815.805-5 on proposals in excess of $500,000 before negotiating any 
contract or modification.

[49 FR 12608, Mar. 29, 1984, as amended at 50 FR 792, Jan. 7, 1985; 54 
FR 40064, Sept. 29, 1989. Redesignated and amended at 63 FR 69220, Dec. 
16, 1998]



Sec. 819.803  Selecting acquisitions for the 8(a) program.

    The contracting officer will specify in writing the time limit for 
SBA to propose an acceptable 8(a) subcontractor. The time limit should 
be between 30 and 45 days, but may be extended by the contracting 
officer.

[50 FR 793, Jan. 7, 1985]



Sec. 819.804  Evaluation, offering, and acceptance.

    (a) The contracting officer will notify SBA in writing of the time 
limit for contract negotiations in accordance with FAR 19.804-2. The 
time limit, as a minimum, should be 45 days, but may be extended by the 
contracting officer.

[50 FR 793, Jan. 7, 1985, as amended at 63 FR 69220, Dec. 16, 1998]



Sec. 819.806  Pricing the 8(a) contract.

    In order to expedite the 8(a) process, SBA should be informed as 
soon as a disparity between the 8(a) offered price and the estimated 
fair market price is determined. The SBA and the VA contracting office 
should collaborate to determine if the disparity is:
    (a) A result of deficiencies in developing the fair market price, 
thereby requiring revision to the estimate;
    (b) A result of overpricing by the 8(a) company, thereby requiring 
further efforts to negotiate a decrease in the offered price; or
    (c) A legitimate differential which should be funded through the SBA 
business development expense.

[52 FR 37317, Oct. 6, 1987. Redesignated at 63 FR 69220, Dec. 16, 1998]

[[Page 195]]



Sec. 819.806-4  Funding business development expense.

    If SBA declines to fund the business development expense, it will be 
reported in accordance with 819.870.

[52 FR 37317, Oct. 6, 1987]



Sec. 819.807  Estimating fair market price.

    (a) Estimating the fair market price is a crucial initial step in 
determining what is a reasonable price for a negotiated 8(a) contract. 
For supplies and equipment, previous prices paid under competitive 
conditions, adjusted for inflation, may provide necessary data to make 
such an estimate.
    (b) Estimating fair market price for such services as architect-
engineer and construction may be accomplished through independent cost 
estimates and other pertinent data obtained from SBA when the estimated 
fair market price is not fully supportable from available documentation 
(see FAR 19.807).

[52 FR 37317, Oct. 6, 1987. Redesignated and amended at 63 FR 69220, 
Dec. 16, 1998]



Sec. 819.807-70  Commitments of Office of Facilities Management funded 

projects for the 8(a) program.

    Major and minor projects funded by the Office of Facilities 
Management (including those delegated to the VHA medical facilities) 
which have been committed to the 8(a) program will not be withdrawn from 
that program without the consent of the Office of Small and 
Disadvantaged Business Utilization (00SB). Requests for consent from 
00SB will normally be in writing and will clearly set forth the 
circumstances necessitating 8(a) withdrawal. If the contracting officer 
determines that time does not permit a written request, an oral request 
will be made. Such an oral request will be confirmed in writing.

[49 FR 12608, Mar. 29, 1984, as amended at 52 FR 46083, Dec. 4, 1987; 54 
FR 40064, Sept. 29, 1989; 63 FR 69220, Dec. 16, 1998]



Sec. 819.809-70  Procurement of supplies, services, and research and 

development.

    (a) Contracts for supplies, equipment and services other than 
construction will be prepared as any other prime contract and in 
accordance with FAR Subpart 19.8.
    (b) The Department of Veterans Affairs contracting officer will 
forward the prime contract to SBA in sufficient numbers to furnish two 
copies to SBA and one copy to each subcontractor. SBA will return the 
signed original to the Department of Veterans Affairs contracting 
officer.



Sec. 819.809-71  Procurement of construction.

    Construction projects which have been selected for inclusion in this 
program will be contracted for as provided in this section and FAR 
Subpart 19.8.
    (a) The contracting officer will submit, for each project so 
identified, the complete project listing including technical 
specifications, drawings and wage rates to the proper official of the 
appropriate SBA regional office. Should SBA select a competent 
subcontractor capable of performing the work, they will so certify to 
the Department of Veterans Affairs contracting officer. They will 
furnish him/her the name and complete address of the subcontractor(s), 
the project involved and the price(s) quoted. If the price quoted is 
within the range acceptable to the Department of Veterans Affairs, the 
contracting officer will indicate acceptance to SBA.
    (b) When the contracting officer receives Standard Form 1442, 
Solicitation, Offer and Award (Construction, Alteration, or Repair), 
signed by SBA and the subcontractor, and the performance and payment 
bonds, the contracting officer will forward a notice to proceed to the 
subcontractor.

       Subpart 819.70_Veteran-Owned and Operated Small Businesses

    Source: 50 FR 793, Jan. 7, 1985, unless otherwise noted.



Sec. 819.7001  Policy.

    (a) Pub. L. 93-237 amended the Small Business Act by directing SBA 
to give ``special consideration'' to veterans of the Armed Forces in all 
SBA programs. Consistent with and in furtherance of that statute, it is 
the policy of the Department of Veterans Affairs to encourage 
participation by veteran-

[[Page 196]]

owned and operated small businesses, including Vietnam era and disabled, 
in VA acquisitions.
    (b) All VA facilities having procurement requirements for which 
veteran-owned small businesses are known sources, will take affirmative 
action to solicit these firms and assist them in participating in VA 
acquisition opportunities.

[50 FR 793, Jan. 7, 1985, as amended at 55 FR 49900, Dec. 3, 1990]



Sec. 819.7002  Definition.

    A veteran-owned small business is a small business that is at least 
51 percent owned by a veteran who also controls and operates the 
business. Control in this context means exercising the power to make 
policy decisions. Operate in this context means actively involved in 
day-to-day management. For purposes of this definition, eligible 
veterans include:
    (a) Veterans who served in the U.S. Armed Forces and were discharged 
or released under conditions other than dishonorable.
    (b) Vietnam era veterans who served for a period of more than 180 
days, any part of which was between August 5, 1964, and May 7, 1975, and 
were discharged other than dishonorably.
    (c) Disabled veterans with a minimum compensable disability of 30 
percent, or a veteran who was discharged for disability.

[49 FR 12608, Mar. 29, 1984, as amended at 54 FR 40064, Sept. 29, 1989; 
55 FR 49900, Dec. 3, 1990]



Sec. 819.7003  Procedure.

    (a) To obtain information on business development for veteran-owned 
businesses and further identify veteran-owned small businesses, 
contracting officers shall contact the veterans affairs officers at the 
local SBA district office. When counselling small businesses, 
contracting officers shall determine if the business is veteran-owned 
and operated and ensure that SF 129s are completed properly to identify 
veteran-owned business.
    (b) The veteran-owned business representation in 852.219-70 shall be 
included in all solicitations.

[55 FR 49901, Dec. 3, 1990]



Sec. 819.7004  Waiver of the use of veteran-owned firms.

    It is the policy of the Department of Veterans Affairs to provide 
veteran-owned firms every opportunity to participate in the acquisition 
process. A contracting office wishing to waive this policy for a 
particular procurement involving other than small purchase procedures 
must first process a VA Form 90-2268. The contracting officer must 
clearly document on VAF 90-2268 the reasons that eligible veteran-owned 
firms are not intended to be solicited or quotations sought for the 
particular procurement. Exempt from this reporting requirement are SBA 
8(a) acquisitions.

[50 FR 793, Jan. 7, 1985, as amended at 52 FR 37317, Oct. 6, 1987; 52 FR 
46083, Dec. 4, 1987; 54 FR 40064, Sept. 29, 1989; 55 FR 49901, Dec. 3, 
1990; 63 FR 69220, Dec. 16, 1998]

      PART 822_APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS

       Subpart 822.3_Contract Work Hours and Safety Standards Act

Sec.

Sec. 822.304 Variations, tolerances, and exemptions.

   Subpart 822.4_Labor Standards for Contracts Involving Construction


Sec. 822.478 Contract terminations.

    Authority: 38 U.S.C. 501 and 40 U.S.C. 486(c).

    Source: 49 FR 12610, Mar. 29, 1984, unless otherwise noted.

       Subpart 822.3_Contract Work Hours and Safety Standards Act



Sec. 822.304  Variations, tolerances, and exemptions.

    When a contract is entered into for nursing home care, the clause 
prescribed by FAR 22.305 will be modified to reflect the variation 
contained in 29 CFR 5.15(d)(3) as set forth in 852.222-70.

[[Page 197]]

   Subpart 822.4_Labor Standards for Contracts Involving Construction



Sec. 822.478  Contract terminations.

    (a) Prior to terminating any contract because of violations of the 
labor standards provisions of the contract, contracting officers, other 
than those in the Office of Facilities Management will, through the 
Deputy Assistant Secretary for Acquisition and Materiel Management, 
present the facts in detail to the General Counsel for review. The 
contracting officer will be advised by the Deputy Assistant Secretary 
for Acquisition and Materiel Management as to the recommended action to 
be taken.
    (b) Prior to terminating a contract managed by the Office of 
Facilities Management for labor standards violation, the contracting 
officer will, through the Chief Facilities Management Officer, present 
the facts in detail to the General Counsel for review. The contracting 
officer will be advised by the Chief Facilities Management Officer, as 
to the recommended action.
    (c) If the contract is to be terminated, the Deputy Secretary for 
Acquisition and Materiel Management or the Chief Facilities Management 
Officer will submit the reports required by 29 CFR 5.7(d).

[49 FR 12610, Mar, 29, 1984, as amended at 54 FR 40064, Sept. 29, 1989; 
63 FR 69220, Dec. 16, 1998]

        PART 824_PROTECTION OF PRIVACY AND FREEDOM OF INFORMATION

             Subpart 824.1_Protection of Individual Privacy

Sec.

Sec. 824.102 General.

                Subpart 824.2_Freedom of Information Act


Sec. 824.202 Policy.

    Authority: 38 U.S.C. 210 and 40 U.S.C. 486(c).

             Subpart 824.1_Protection of Individual Privacy



Sec. 824.102  General.

    (a) The pertinent Department rules regarding the implementation of 
the Privacy Act of 1974 consist of 38 CFR 1.575 through 1.584.

[49 FR 12611, Mar. 29, 1984, as amended at 54 FR 40064, Sept. 29, 1989]

                Subpart 824.2_Freedom of Information Act



Sec. 824.202  Policy.

    Department rules implementing the Freedom of Information Act are 
contained in 38 CFR 1.550 through 1.559.

[49 FR 12611, Mar. 29, 1984; as amended at 54 FR 40064, Sept. 29, 1989]

                      PART 825_FOREIGN ACQUISITION

                 Subpart 825.1_Buy American Act_Supplies

Sec.

Sec. 825.102 Policy.

Sec. 825.102-70 Nonavailability in the United States.

Sec. 825.105 Evaluating offers.

Sec. 825.108 Excepted articles, materials and supplies.

          Subpart 825.2_Buy American Act_Construction Materials


Sec. 825.202 Policy.

Sec. 825.202-70 Nonavailability in the United States.

Sec. 825.203 Evaluating offers.

                Subpart 825.3_Balance of Payments Program


Sec. 825.302 Policy.

Sec. 825.302-70 Deviations from the Balance of Payments Program.

Sec. 825.304 Excess and near-excess foreign currencies.

Sec. 825.304-70 Determination of feasibility to use excess or near-
          excess foreign currency.

                    Subpart 825.6_Customs and Duties


Sec. 825.603 Procedures.

Sec. 825.603-70 Technical assistance.

         Subpart 825.7_Restrictions on Certain Foreign Purchases


Sec. 825.703 Exceptions.

[[Page 198]]

         Subpart 825.8_International Agreements and Coordination


Sec. 825.870 Technical assistance.

        Subpart 825.10_Additional Foreign Acquisition Regulations


Sec. 825.1001 Waiver of right to examination of records.

       Subpart 825.11_Solicitation Provisions and Contract Clauses


Sec. 825.1102 Solicitation provisions and contract clauses.

    Authority: 38 U.S.C. 501 and 40 U.S.C. 486(c).

    Source: 49 FR 12611, Mar. 29, 1984, unless otherwise noted.

                 Subpart 825.1_Buy American Act_Supplies



Sec. 825.102  Policy.



Sec. 825.102-70  Nonavailability in the United States.

    (a) If articles, materials, and supplies required for a particular 
procurement are not excepted in FAR 25.108, or when only foreign bids or 
offers are received, the determination concerning nonavailability 
required by FAR 25.108(b) will be prepared by the contracting officer 
for foreign construction materials costing less than $1 million. Each 
determination will be factually supported in writing and included in the 
contract file.
    (b) Nonavailability determinations for foreign materials costing 
over $1 million must be requested by field facility contracting officers 
from the Deputy Assistant Secretary for Acquisition and Materiel 
Management (95). Each request for a determination must be fully 
justified with all pertinent facts.
    (c) A copy of all determinations made in accordance with paragraph 
(a) of this section shall be forwarded to the Deputy Assistant Secretary 
for Acquisition and Materiel Management (95) concurrently with the 
submissions required by FAR 25.108 (b) and (c).

[49 FR 12611, Mar. 29, 1984, as amended at 50 FR 794, Jan. 7, 1985; 54 
FR 40064, Sept. 29, 1989; 63 FR 69220, Dec. 16, 1998]



Sec. 825.105  Evaluating offers.

    When a determination is required under FAR 25.105, the contracting 
officer will submit the proposed award to the Deputy Assistant Secretary 
for Acquisition and Materiel Management (95) for approval by the 
Secretary. The submission will contain all the facts, including a 
comparison of all the bids or offers received, and any other pertinent 
information upon which a determination may be made. If approved, a 
report of the transaction will be prepared and submitted by the Deputy 
Assistant Secretary for Acquisition and Materiel Management in 
accordance with Executive Order 10582, dated December 17, 1954, as 
amended.

[49 FR 12611, Mar. 29, 1984, as amended at 63 FR 69220, Dec. 16, 1998]



Sec. 825.108  Excepted articles, materials and supplies.

    The following items are added to the list of exceptions contained in 
FAR 25.108(d):

Glass, Wire
Glass, Lead
Insulin, Human.

[52 FR 32012, Aug. 25, 1987]

          Subpart 825.2_Buy American Act_Construction Materials



Sec. 825.202  Policy.



Sec. 825.202-70  Nonavailability in the United States.

    (a) If articles, materials, and supplies required for a particular 
procurement are not excepted in FAR 25.108, or when only foreign bids or 
offers are received, the determination concerning nonavailability 
required by FAR 25.202(a)(3) will be made by the contracting officer for 
foreign construction material costing $100,000 or less. Each 
determination will be factually supported in writing and included in the 
contract file.
    (b) Field facility contracting officers must request approval of 
nonavailability determinations from the Deputy Assistant Secretary for 
Acquisition and Materiel Management (95).
    (c) A copy of all determinations made in accordance with paragraph 
(a) of this section shall be forwarded to the

[[Page 199]]

Chief Facilities Management Officer, Office of Facilities Management, 
through the Deputy Assistant Secretary for Acquisition and Materiel 
Management (95).
    (d) Each solicitation will include the clause specified in 852.236-
89. This provision reflects the general policy of not authorizing 
nondomestic materials on VA construction contracts.

[49 FR 12611, Mar. 29, 1984, as amended at 50 FR 794, Jan. 7, 1985; 52 
FR 32012, Aug. 25, 1987; 54 FR 40064, Sept. 29, 1989; 63 FR 69220, Dec. 
16, 1998]



Sec. 825.203  Evaluating offers.

    When a contracting officer believes that the requirement of the 
``Buy American Act'' is impracticable as provided in FAR 25.202(a)(2), 
or that it would be advantageous to VA to deviate from the provisions of 
the Act as authorized by FAR 25.203, authority to consummate the 
contract will be requested. The request containing all the facts, 
including a comparison of all the bids or offers received and any other 
pertinent information upon which a determination may be made, will be 
submitted through the Deputy Assistant Secretary for Acquisition and 
Materiel Management (95), for approval by the Secretary. If approved, a 
report of the transaction will be prepared and transmitted by the Chief 
Facilities Management Officer, Office of Facilities Management, in 
accordance with Executive Order 10582, dated December 17, 1954, as 
amended.

[49 FR 12611, Mar. 29, 1984, as amended at 52 FR 32012, Aug. 25, 1987; 
54 FR 40064, Sept. 29, 1989; 63 FR 69220, Dec. 16, 1998]

                Subpart 825.3_Balance of Payments Program



Sec. 825.302  Policy.



Sec. 825.302-70  Deviations from the Balance of Payments Program.

    When a contracting officer believes that the requirement of the 
``Balance of Payments Program'' is not practicable as set forth in FAR 
25.302 (b)(2) or (b)(3), he/she will request authority to consummate the 
contract through the Deputy Assistant Secretary for Acquisition and 
Materiel Management (95) for approval. Each request must be fully 
justified, containing all pertinent facts.

[49 FR 12611, Mar. 29, 1984, as amended at 63 FR 69220, Dec. 16, 1998]



Sec. 825.304  Excess and near-excess foreign currencies.



Sec. 825.304-70  Determination of feasibility to use excess or near-
          excess foreign currency.

    In accordance with FAR 25.304(c), contracting officers will submit 
requests for determination to utilize excess or near-excess foreign 
currencies to the Deputy Assistant Secretary for Acquisition and 
Materiel Management (93).

                    Subpart 825.6_Customs and Duties



Sec. 825.603  Procedures.



Sec. 825.603-70  Technical assistance.

    Should the regulations contained in FAR 25.6 be inadequate to meet 
particular needs of a contracting officer in clearing items through 
customs and/or obtaining Duty Free Entry of goods, the nearest Regional 
Office of the United States Customs Service should be contacted for 
technical assistance. These offices are located as follows:

Regional Commissioner, U.S. Customs Service, 100 Summer St., Boston, 
Massachusetts 02110
Regional Commissioner, U.S. Customs Service, 99 S.E. 5th St., Miami, 
Florida 33131
Regional Commissioner, U.S. Customs Service, 585 Felipe St., Houston, 
Texas 77057
Regional Commissioner, U.S. Customs Service, 6 World Trade Center, New 
York, New York 10048
Regional Commissioner, U.S. Customs Service, 423 Canal St., New Orleans, 
Louisiana 70130
Regional Commissioner, U.S. Customs Service, 300 N. Los Angeles St., Los 
Angeles, California 90053
Regional Commissioner, U.S. Customs Service, 55 E. Monroe St., Chicago, 
Illinois 60603

[[Page 200]]

         Subpart 825.7_Restrictions on Certain Foreign Purchases



Sec. 825.703  Exceptions.

    When felt to be in the best interest of the Government, the 
contracting officer may request exceptions to the requirements of FAR 
25.7 for purchases in excess of $10,000 from the Secretary through the 
Deputy Assistant Secretary for Acquisition and Materiel Management (95). 
Each such request must be fully justified, containing all pertinent 
facts.

[49 FR 12611, Mar. 29, 1984, as amended at 63 FR 69220, Dec. 16, 1998]

         Subpart 825.8_International Agreements and Coordination



Sec. 825.870  Technical assistance

    Contracting officers may obtain technical information or guidance on 
international agreements and treaties for procurements outside the 
United States by contacting the Executive Director and Chief Operating 
Officer, VA National Acquisition Center.

[49 FR 12611, Mar. 29, 1984, as amended at 63 FR 69220, Dec. 16, 1998]

        Subpart 825.10_Additional Foreign Acquisition Regulations



Sec. 825.1001  Waiver of right to examination of records.

    (a) If the contracting officer determines that the ``Audit and 
Records--Negotiation'' clause with Alternate III should be used after 
all efforts to include the basic clause have failed, and provided that 
use of Alternate III of the clause is authorized in the instances cited 
in FAR 25.901, he/she may request, with appropriate documentation, a 
determination from the Secretary, through the Deputy Assistant Secretary 
for Acquisition and Materiel Management (95). The Secretary, should he/
she concur in the contracting officer's determination that the clause 
should be omitted, will then forward an agency request for omission of 
the clause to the Comptroller General for a final determination as 
required by FAR 25.901(c)(1).
    (b) All determinations to omit the ``Audit and Records--
Negotiation'' clause will be supported by a determination and findings 
prepared by the contracting officer containing the information set forth 
in FAR 25.901(d). The completed determination and findings will be made 
a part of the contract file. One copy of the determination and findings 
will be forwarded to the Deputy Assistant Secretary for Acquisition and 
Materiel Management (95).

[49 FR 12611, Mar. 29, 1984, as amended at 54 FR 40064, Sept. 29, 1989. 
Redesignated and amended at 63 FR 69220, Dec. 16, 1998. Further 
redesignated at 67 FR 49258, July 30, 2002]

       Subpart 825.11_Solicitation Provisions and Contract Clauses



Sec. 825.1102  Solicitation provisions and contract clauses.

    (a) The Buy American Act (41 U.S.C. 10a-d), except as modified by 
the Trade Agreements Act (TAA) and the North American Free Trade 
Agreement (NAFTA)), requires that only domestic construction material 
shall be used in the performance of contracts for construction. To 
clarify VA's position on foreign material, the contracting officer shall 
insert the clause at 852.236-89, Buy American Act, in solicitations and 
contracts for construction that contain the FAR clause at 52.225-9, Buy 
American Act'Balance of Payments Program'Construction Materials.
    (b) For solicitations and contracts for construction that include 
the FAR clause at 52.225-11, Buy American Act'Balance of Payment 
Program'Construction Materials Under Trade Agreements, with its 
Alternate I (i.e., subject only to the TAA), insert the clause at 
852.236-89, Buy American Act, with its Alternate I.
    (c) For solicitations and contracts that include the FAR clause at 
52.225-11 without its Alternate I (i.e., subject to both the TAA and 
NAFTA), insert the clause at 852.236-89, Buy American Act, with its 
Alternate II.

[67 FR 49258, July 30, 2002]

[[Page 201]]

              SUBCHAPTER E_GENERAL CONTRACTING REQUIREMENTS

                      PART 828_BONDS AND INSURANCE

           Subpart 828.1_Bonds and Other Financial Protections

Sec.

Sec. 828.101 Bid guarantees.

Sec. 828.101-2 Contract clause.

Sec. 828.101-70 Safekeeping and return of bid guarantee.

Sec. 828.106 Administration.

Sec. 828.106-6 Furnishing information.

Sec. 828.106-70 Bond premium adjustment.

           Subpart 828.2_Sureties and Other Security for Bonds


Sec. 828.203-7 Exclusion of individual sureties.

                         Subpart 828.3_Insurance


Sec. 828.306 Insurance under fixed-price contracts.

   Subpart 828.71_Indemnification of Contractors, Medical Research or 
                          Development Contracts


Sec. 828.7100 Scope of subpart.

Sec. 828.7101 General.

Sec. 828.7102 Extent of indemnification.

Sec. 828.7103 Financial protection.

    Authority: 38 U.S.C. 501 and 40 U.S.C. 486(c).

    Source: 49 FR 12612, Mar. 29, 1984, unless otherwise noted.

           Subpart 828.1_Bonds and Other Financial Protections



Sec. 828.101  Bid guarantees.



Sec. 828.101-2  Contract clause.

    Where a bid bond is required for supplies or services, the phrase 
``any cost of acquiring the work'' in paragraph (e) of the BID GUARANTEE 
clause in FAR 52.228-1 may be modified to refer to the cost of 
``supplies,'' ``services,'' etc.

[49 FR 12612, Mar. 29, 1984. Redesignated at 64 FR 40519, July 27, 
1999.]



Sec. 828.101-70  Safekeeping and return of bid guarantee.

    (a) Certified checks or other negotiable security furnished as bid 
security with the three lowest acceptable bids will be retained in a 
safe. These will be returned by any method that will provide evidence of 
receipt, or in person upon presentation of proper receipt, after the 
contract and contract bonds have been signed and approved.
    (b) Certified checks or other negotiable security furnished in 
support of other than the three lowest acceptable bids should be 
returned promptly to the respective bidders by any method that will 
provide evidence of receipt or in person upon presentation of proper 
receipt.
    (c) Commercial bid bonds are not returned unless specifically 
requested by the bidders, and, even if requested by any of the three low 
bidders, are not returned until the contract and contract bonds have 
been executed by the successful bidder, or all bids have been rejected.

[49 FR 12612, Mar. 29, 1984, as amended at 64 FR 40519, July 27, 1999]



Sec. 828.106  Administration.



Sec. 828.106-6  Furnishing information.

    For all contracts except contracts awarded by the Office of 
Facilities Management, the head of the contracting activity, as defined 
in 802.100, shall be the Department designee referenced in FAR 28.106-
6(c) to furnish copies of payment bonds to requestors. For contracts 
awarded by the Office of Facilities Management, the Office of Facilities 
Management contracting officer shall be the Department designee.

[64 FR 40519, July 27, 1999]



Sec. 828.106-70  Bond premium adjustment.

    When performance and payment bonds are required, the contract will 
contain the clause prescribed in 852.228-70.

[49 FR 12612, Mar. 29, 1984. Redesignated at 64 FR 40519, July 27, 1999]

           Subpart 828.2_Sureties and Other Security for Bonds

    Source: 64 FR 40519, July 27, 1999, unless otherwise noted.

[[Page 202]]



Sec. 828.203-7  Exclusion of individual sureties.

    The Deputy Assistant Secretary for Acquisition and Materiel 
Management is delegated authority to make the determinations referenced 
in FAR 28.203-7 to exclude individuals from acting as surety on bonds 
and to accept bonds from individuals named on the List of Parties 
Excluded from Federal Procurement and Nonprocurement Programs.

                         Subpart 828.3_Insurance



Sec. 828.306  Insurance under fixed-price contracts.

    (a) Term contracts, or contracts of a continuing nature, for 
ambulance, automobile and aircraft service, will contain the provision 
in 852.237-71.
    (b) Exceptions. The provisions of paragraph (a) of this section do 
not apply to emergency or sporadic ambulance service authorized by VA 
Manual MP-1, part II, chapter 3; or other emergency or sporadic vehicle 
or aircraft services. Provided, That such service is not used solely for 
the purpose of avoiding entering into a continuing contract. Provided 
further, That such services will be obtained from firms known to carry 
insurance coverage in accordance with State or local requirements.

[49 FR 12612, Mar. 29, 1984, as amended at 64 FR 40519, July 27, 1999]

   Subpart 828.71_Indemnification of Contractors, Medical Research or 
                          Development Contracts



Sec. 828.7100  Scope of subpart.

    (a) This subpart sets forth the policies and procedures concerning 
indemnification of contractors performing contracts covering medical 
research or development which involve risks of an unusually hazardous 
nature, as authorized by 38 U.S.C. 7317.
    (b) The authority to indemnify the contractor under this subpart 
does not create any rights to third parties which would not otherwise 
exist by law.
    (c) As used in this subpart the term ``contractor'' includes 
subcontractors of any tier under a contract containing an 
indemnification provision pursuant to 38 U.S.C. 7317.

[49 FR 12612, Mar. 29, 1984, as amended at 63 FR 69221, Dec. 16, 1998; 
64 FR 40519, July 27, 1999]



Sec. 828.7101  General.

    (a) The approval for the indemnification of contractors will be made 
by the Secretary of Veterans Affairs.
    (b) Contracting Officers shall submit requests for approval, 
together with all available information, to the Deputy Assistant 
Secretary for Acquisition and Materiel Management (95) for transmittal 
to the Secretary.

[49 FR 12612, Mar. 29, 1984, as amended at 54 FR 24173, June 6, 1989; 54 
FR 30044, July 18, 1989; 63 FR 69221, Dec. 16, 1998]



Sec. 828.7102  Extent of indemnification.

    (a) Any contract for medical research or development authorized by 
38 U.S.C. 7303, the performance of which involves a risk of an unusually 
hazardous nature, may provide that the Government will indemnify the 
contractor against either or both of the following, but only to the 
extent that they arise out of the direct performance of the contract and 
to the extent not covered by the financial protection required under 
828.7103.
    (1) Liability (including reasonable expenses of litigation or 
settlement) to third persons, except liability under State or Federal 
worker's injury compensation laws to employees of the contractor 
employed at the site of and in connection with the contract for which 
indemnification is granted, for death, bodily injury, or loss of or 
damage to property, from a risk that the contract defines as unusually 
hazardous.
    (2) Loss of or damage to property of the contractor from a risk that 
the contract defines as unusually hazardous.
    (b) A contract that provides for indemnification in accordance with 
this subpart must also provide for:
    (1) Notice to the contracting officer of any claim or suit against 
the contractor for death, bodily injury, or loss of or damage to 
property; and

[[Page 203]]

    (2) Control of or assistance in the defense by the Government, at 
its election, of such suit or claim for which indemnification is 
provided in the contract.

[49 FR 12612, Mar. 29, 1984, as amended at 63 FR 69221, Dec. 16, 1998]



Sec. 828.7103  Financial protection.

    (a) The amount of financial protection that the contractor is 
required to have and maintain to cover liability to third persons and 
loss of or damage to the contractor's property shall be the maximum 
amount of insurance available from private sources; however, the 
Secretary may establish a lesser amount after taking into consideration 
the cost and terms of private insurance.
    (b) The financial protection may include private insurance, private 
contractual indemnities, self-insurance, other proof of financial 
responsibility, or a combination of such forms to provide the maximum 
amount required. When the contractor elects to utilize self insurance, 
proof of such financial responsibility up to the maximum amount required 
will be furnished the contracting officer prior to award.

[49 FR 12612, Mar. 29, 1984, as amended at 64 FR 40519, July 27, 1999]

                             PART 829_TAXES

Sec.

Sec. 829.000 Scope of part.

                   Subpart 829.2_Federal Excise Taxes


Sec. 829.202 General exemptions.

Sec. 829.202-70 Tax exemptions for alcohol products.

    Authority: 38 U.S.C. 501 and 40 U.S.C. 486(c).

    Source: 49 FR 12614, Mar. 29, 1984, unless otherwise noted.



Sec. 829.000  Scope of part.

    This part prescribes policies and procedures for exemptions from 
Federal excise taxes imposed on alcohol products purchased for use in 
the Department of Veterans Affairs medical care program.

[64 FR 38593, July 19, 1999]

                   Subpart 829.2_Federal Excise Taxes



Sec. 829.202  General exemptions.



Sec. 829.202-70  Tax exemptions for alcohol products.

    (a) General. (1) The procurement of spirits free of tax for 
nonbeverage purposes is permitted to Government agencies by regulations 
of the Bureau of Alcohol, Tobacco, and Firearms (ATF) (see 27 CFR 
211.231-237, 213.141-146 and 240.720-722). The use of tax-free alcohol, 
whiskey, beer, wine and denatured spirits for nonbeverage purposes shall 
include but not be limited to medicinal and scientific purposes and in 
the treatment of patients.
    (2) Authority is hereby delegated to the Director, Marketing Center, 
Hines, Illinois, and to the Chief, Acquisition and Materiel Management 
Service, Department of Veterans Affairs medical facilities to sign 
application permits on Bureau of Alcohol, Tobacco, and Firearms (ATF) 
prescribed forms. This authority is not to be redelegated.
    (b) Whiskey, alcohol, and denatured alcohol. (1) Application forms 
for tax-free purchases are to be obtained from and submitted to the 
Director, Bureau of Alcohol, Tobacco, and Firearms, Washington, DC 
20226.
    (2) ATF Form 1486, Specially Denatured Spirits for Use of United 
States, is the application/permit required for denatured spirits, and 
ATF Form 1444, Tax-Free Spirits for Use of United States, is required 
for distilled spirits (whiskey and alcohol). These are continuing 
permits to procure items tax free. Copies must be made available to the 
supplier in support of each procurement.
    (3) Purchases for excise tax-free whiskey and alcohol, not available 
through the depot can only be made from a distillery or a bonded 
premises. In accordance with 27 CFR 213.144, the vendor will also 
support each shipment with ATF 1473, Shipment and Receipt Specifically 
Denatured Tax-Free, or Recovered Spirits. The ATF 1473 will be completed 
by the accountable officer and the original copy will be forwarded to 
the Regional Regulatory Administrator whose address is shown in item

[[Page 204]]

12 of the form. A copy of ATF 1473 will be retained in the purchase 
order file.
    (c) Wine. No tax exemption form or ATF permit is required for the 
tax-free procurement of wine. An extra copy of a properly executed 
purchase order or requisition document may be furnished to the supplier 
(retailer, wholesaler or winery) to facilitate record keeping.
    (d) Beer. Tax-free beer may be procured only from licensed breweries 
and only when such product is prescribed for therapeutic use of 
patients. The application for an ATF permit is to be submitted in letter 
form to the Director, Bureau of Alcohol, Tobacco, and Firearms, 
Washington, DC 20226. The following information is required.
    (1) Name and address of facility;
    (2) Specific purpose for which beer will be used;
    (3) Quantity proposed to buy each month, year, etc.;
    (4) Name and address of brewery; and
    (5) Copy of document authorizing contracting officer to sign 
request.
    A new permit is needed only when beer is to be purchased from a 
different brewery than the one for which the original permit was 
requested.

[49 FR 12614, Mar. 29, 1984, as amended at 54 FR 24173, June 6, 1989]

            PART 831_CONTRACT COST PRINCIPLES AND PROCEDURES

         Subpart 831.70_Contract Cost Principles and Procedures

Sec.

Sec. 831.7000 Scope of subpart.

Sec. 831.7001 Allowable costs under cost reimbursement vocational 
          rehabilitation and education contracts or agreements.

Sec. 831.7001-1 Tuition.

Sec. 831.7001-2 Special services or courses.

Sec. 831.7001-3 Books, supplies and equipment required to be personally 
          owned.

Sec. 831.7001-4 Medical services and hospital care.

Sec. 831.7001-5 Secretary's Decision No. 557.

Sec. 831.7001-6 Consumable instructional supplies.

Sec. 831.7001-7 Reimbursement for other supplies and services.

    Authority: 38 U.S.C. 501 and 40 U.S.C. 486(c).

    Source: 49 FR 12615, Mar. 29, 1984, unless otherwise noted.

         Subpart 831.70_Contract Cost Principles and Procedures



Sec. 831.7000  Scope of subpart.

    This subpart contains general cost principles and procedures for the 
determination and allowance of costs in connection with the negotiation 
and administration of cost reimbursement type contracts pertaining to 
the furnishing of vocational rehabilitation, education, and training to 
eligible veterans under chapter 31 of Title 38, United States Code.



Sec. 831.7001  Allowable costs under cost reimbursement vocational 
          rehabilitation and education contracts or agreements.



Sec. 831.7001-1  Tuition.

    (a) Except as provided in this section, when the contractor has a 
customary cost of tuition the charge to the Department of Veterans 
Affairs may not exceed that charged to similarly circumstanced 
nonveteran students; provided that where the contractor has more than 
one standard charge for the same service, the charge to the Department 
of Veterans Affairs will be the lowest price for the entire course, 
semester, quarter, or term which is offered or published.
    (b) VA will not normally pay tuition or incidental fees to 
institutions or establishments furnishing apprentice or other training 
on-the-job. VA may pay:
    (1) For such charges customarily made by nonprofit workshop or 
similar establishment for providing work adjustment training to 
similarly circumstanced nonveterans even though an incentive wage is 
paid the trainee as part of the training; or
    (2) For certain training expenses incurred by an employer providing 
on-the-job training following rehabilitation to the point of 
employability when such additional training is determined to be 
necessary by VA.
    (c) When the total cost of instruction is paid from Federal funds or 
a portion of the cost is covered by grants from the Federal Government, 
i.e., Smith-Hughes or other laws, excluding Federal Land Grant Funds, 
such subsidy

[[Page 205]]

will be taken into consideration in determining the charge to the 
Department of Veterans Affairs. The term, Federal Land Grant Funds, 
refers to those received under the Morrill-Nelson Act (Morrill Acts of 
1862 and 1890 and the Nelson amendment of 1907) and section 22 of the 
Bankhead-Jones Act of 1935.
    (d) Payments on behalf of a veteran who receives a fellowship, 
scholarship, grant-in-aid, assistantship, or similar award in complete 
or partial payment of tuition or fees or both will be made in accordance 
with the following:
    (1) The award will reduce, to the extent of the award, the amount of 
tuition or fee or both that is payable by the Department of Veterans 
Affairs.
    (2) Awards which are not paid in cash, except those which are made 
specifically for the purpose of defraying the cost of room and board in 
dormitories which will be disregarded, will reduce to the extent of the 
award the charges for which the Department of Veterans Affairs is 
responsible.
    (3) Cash awards may be retained by the veterans and will not be 
deducted from charges ordinarily paid by the Department of Veterans 
Affairs.
    (4) Waivers of tuition and fees provided under law by States or 
other Government authority will be utilized to reduce the charges 
payable by Department of Veterans Affairs in accordance with such 
waivers.
    (e) Enrollment fees in an amount sufficient to cover the cost of 
registration may be paid, provided the institution or training 
establishment usually makes such a charge, and it does not exceed that 
charge made to other students or trainees.

[49 FR 12615, Mar. 29, 1984, as amended at 54 FR 40064, Sept. 29, 1989]



Sec. 831.7001-2  Special services or courses.

    Special services or courses are those services requested by the 
Department of Veterans Affairs which are over and above those 
customarily required by the institution for similarly circumstanced 
nonveterans and are considered by the contracting officer to be 
necessary for the rehabilitation of the trainee. The costs of such 
special services or courses will be negotiated prior to being requested 
by the Department of Veterans Affairs.



Sec. 831.7001-3  Books, supplies and equipment required to be personally 

owned.

    (a) Reimbursement for books, supplies, or equipment and referred to 
as supplies, will be made as provided in this section.
    (1) Reimbursement will be made for those supplies customarily 
required to be owned personally by all students taking the same course 
or courses except that reimbursement may be made for items which are not 
specifically required by the school for pursuit of the course, but are 
determined to be needed by VA because of the demands of the course, 
general possession by other students, and the disadvantage imposed on 
the veterans by not having the item. In no instance will the supplies be 
in a greater variety, quality, or amount than required of nonveteran 
students. In this instance required is in contradistinction to requested 
or desirable to have or necessary for a future profession or job but not 
required by the institution of all students in the course.
    (2) When supplies are available in several prices, grades, or 
qualities, reimbursement may be made only for such quality or grade that 
will meet the requirements.
    (3) Partial payment agreements in which the Department of Veterans 
Affairs shares payment with the veterans is not allowable.
    (4) The costs incurred by the institution in connection with the 
veteran's thesis such as typing, printing, microfilming, or otherwise 
reproducing the required number of copies; research expenses when 
certified by the veterans committee chairman, major professor, 
department head, or appropriate dean that such expenses are required in 
order to complete the course requiring the preparation of a thesis are 
considered as supplies and are authorized for reimbursement.
    (5) When the institution operates a bookstore or supply store for 
all students the reimbursement for supplies issued to trainees will be 
no greater than charges made to nonveteran students.

[[Page 206]]

    (6) Where the institution, training establishment, or employer 
arranges for issuance of supplies to all students by stores or 
establishments not institutionally owned and to pay such store or 
establishment for supplies issued to trainees, reimbursement is 
allowable provided the charges are no greater than those paid by 
nonveterans or to the institutions whichever is the lesser.
    (7) Supplies purchased by the institution specifically for trainees 
will be reimbursed at the net cost to the institution.
    (8) Where the institution does not provide or arrange for issuance 
of generally required books, tools and supplies for students attending 
the facility, the institution, in cooperation with VA, may designate 
certain stores and establishments to provide generally required books, 
tools and supplies for veterans pursuing a vocational rehabilitation 
program. The vendor will be reimbursed in the same manner as for 
supplies provided or arranged for by the institutions.
    (9) Where it is customary in a survey subject to permit each student 
to obtain the aggregate of books for the subject on a rental basis 
(commonly referred to as a rental set) and the ownership or permanent 
possession by the student is not required, reimbursement is authorized 
for the rental charge provided it does not exceed the charge made to 
nonveteran students.
    (10) Educational and training institutions furnishing supplies to 
trainees which are required to be owned personally or on a rental basis 
by all students pursuing the same or similar course may be compensated 
for such services in an amount not exceeding 10 percent of the allowable 
charge for the supplies furnished or rented except:
    (i) Where the tuition covers the charges for supplies or rentals or 
a stipulated fee is assessed all students, handling charges are not 
allowable.
    (ii) The handling charge is not allowable for Government-owned books 
procured by the institution from the Library of Congress.
    (iii) In cases where an item of equipment will exceed $50 in cost, 
effort will be made to secure a lower handling charge than for those 
costing a lesser amount. The agreed percent for such handling charges 
will be included in the contract or added as an addendum.

[49 FR 12615, Mar. 29, 1984, as amended at 54 FR 40064, Sept. 29, 1989]



Sec. 831.7001-4  Medical services and hospital care.

    (a) VA may pay the customary student health fee when payment of the 
fee is required for similarly circumstanced nonveterans. If payment of 
the fee is not required for similarly circumstanced nonveterans payment, 
payment may be made if it is determined by the Veterans Health 
Administration that such payment is in the best interest of the veteran 
and the government.
    (b) Where medical services or hospital care not covered by the 
customary students health fee are available in the school operated 
facilities or arrangements have been made by the institution with 
doctors and hospitals in the immediate area, reimbursement by the 
Veterans Benefits Administration for such services may be made in a 
contract for such services provided that the Director, VA Medical 
Center, determines:
    (1) That such arrangements are necessary to provide timely medical 
care for veterans attending the facility under provisions of Chapter 31; 
and
    (2) The general rates established for such services do not exceed 
the rates established by the Under Secretary for Health.
    (c) VA may reimburse a rehabilitation facility for incidental 
medical services provided during a veteran's program at the facility.

[49 FR 12615, Mar. 29, 1984, as amended at 54 FR 40064, Sept. 29, 1989; 
63 FR 69221, Dec. 16, 1998]



Sec. 831.7001-5  Secretary's Decision No. 557.

    (a) Fees and expenses authorized under Secretary's Decision No. 557 
may be authorized for payment when the educational institution or 
training establishment makes such payments on behalf of the veteran.
    (b) Payment for fees and expenses not made by the educational 
institution or training establishment will be made in

[[Page 207]]

accordance with the applicable provisions of parts 812, 813 or 815 of 
this chapter and FAR parts 12, 13, or 15.

[49 FR 12615, Mar. 29, 1984, as amended at 63 FR 69221, Dec. 16, 1998]



Sec. 831.7001-6  Consumable instructional supplies.

    (a) Reimbursement for consumable instructional supplies which 
institutions require for the instruction of all students, veteran or 
nonveteran pursuing the same or comparable course or courses will be 
made when:
    (1) The supplies are entirely consumed in the fabrication of a 
required project.
    (2) The supplies are not consumed but are of such a nature that they 
cannot be salvaged from the end product for reuse for further 
instructions by disassembling or dismantling the end product.
    (b) Reimbursement for consumable instructional supplies is not 
allowable when:
    (1) The supplies can be salvaged for reuse.
    (2) The supplies used in a project which has been elected by the 
student as an alternate class project in order to produce an end product 
of greater value than that which is normally required to learn the 
skills of the occupation and which will become his property upon 
completion.
    (3) The supplies used in a project which has been selected by the 
institution to provide the student with a more elaborate end product 
than is required to provide adequate instruction as an inducement to the 
veteran to elect a particular course of study.
    (4) The salable value of the end product is equal to or greater than 
the cost of the supplies used in its fabrication or assembly and a 
reasonable use has not been made of such supplies so that they are not 
readily salvaged from the end product to be reused for instructional 
purposes.
    (5) The end product is of permanent value and retained by the 
institution.
    (6) A third party provides the articles or equipment for repair or 
improvement and for which he or she would otherwise pay a commercial 
price.
    (7) The number of projects resulting in end products in excess of 
the numbers normally required to teach the recognized job operations and 
processes of the occupation stipulated in the approved course of study.
    (8) The cost of supplies are included in the charge for tuition or 
as a fee designated for such purpose.

[49 FR 12615, Mar. 29, 1984, as amended at 54 FR 40064, Sept. 29, 1989]



Sec. 831.7001-7  Reimbursement for other supplies and services.

    Reimbursement shall be made for other services and assistance which 
may be authorized under provisions of applicable Chapter 31 regulations 
including but not limited to employment and self-employment, initial and 
extended evaluation, and independent living services.

[49 FR 12615, Mar. 29, 1984, as amended at 54 FR 40064, Sept. 29, 1989]

                       PART 832_CONTRACT FINANCING

          Subpart 832.1_Non-Commercial Item Purchase Financing


Sec. 832.111 Contract clauses for non-commercial purchases.

                     Subpart 832.4_Advance Payments

Sec.

Sec. 832.402 General.

Sec. 832.404 Exclusions.

             Subpart 832.5_Progress Payments Based on Costs


Sec. 832.502 Preaward matters.

Sec. 832.502-2 Contract finance office clearance.

                   Subpart 832.8_Assignment of Claims


Sec. 832.805 Procedure.

Sec. 832.805-70 Distribution/notification of assignment of claims.

    Authority: 38 U.S.C. 501 and 40 U.S.C. 486(c).

    Source: 49 FR 12616, Mar. 29, 1984, unless otherwise noted.

          Subpart 832.1_Non-Commercial Item Purchase Financing



Sec. 832.111  Contract clauses for non-commercial purchases.

    (a) In solicitations and contracts for construction that include the 
FAR clause at 52.232-5, Payments Under

[[Page 208]]

Fixed-Price Construction Contracts, but that do not contain a section 
entitled ``Network Analysis System (NAS),'' the contracting officer 
shall insert the clause at 852.236-82, Payments under fixed-price 
construction contracts (without NAS). When the solicitations or 
contracts include guarantee period services, the contracting officer 
shall use the clause with its Alternate I.
    (b) In solicitations and contracts for construction that include the 
FAR clause at 52.232-5, Payments Under Fixed-Price Construction 
Contracts, and that also contain a section entitled ``Network Analysis 
System (NAS),'' the contracting officer shall insert the clause at 
852.236-83, Payments under fixed-price construction contracts (including 
NAS). When the solicitations or contracts include guarantee period 
services, the contracting officer shall use the clause with its 
Alternate I.

[67 FR 49258, July 30, 2002]

                     Subpart 832.4_Advance Payments



Sec. 832.402  General.

    The determination required by FAR 32.402(c)(1)(iii) will be made by 
the Deputy Assistant Secretary for Acquisition and Materiel Management. 
Prior to award, contracting officers will submit, through channels, the 
information required by FAR 32.409-1 for such determinations.



Sec. 832.404  Exclusions.

    (a) Under the provisions of 31 U.S.C. 3324(d)(2), as amended, 
advance payment is authorized for subscriptions or other charges for 
newspapers, magazines, periodicals and other publications for official 
use of any office under the Government from appropriations available 
therefore, notwithstanding the provisions of 31 U.S.C. 3324(a). The term 
``other publications'' includes any publication printed, microfilmed, 
photocopied or magnetically or otherwise recorded for auditory or visual 
usage.
    (b) Under the provisions of 31 U.S.C. 1535, advance payment may be 
made for services and supplies obtained from another Government agency. 
This includes items such as coupons from the Government Printing Office 
and Operator Permits, Civilian Defense Radio System, and from the 
Federal Communications Commission.
    (c) Under the provisions of 5 U.S.C. 4109, advance payment may be 
made for all or any part of the necessary expenses for training 
Government employees in Government or non-Government facilities. This 
includes the purchase or rental of books, materials and supplies or 
services directly related to the training of a Government employee.

             Subpart 832.5_Progress Payments Based on Costs



Sec. 832.502  Preaward matters.



Sec. 832.502-2  Contract finance office clearance.

    Prior approval of actions listed in FAR 32.502-2 will be obtained 
from the Deputy Assistant Secretary for Acquisition and Materiel 
Management (95). Requests for approval shall be accompanied by full 
justification together with the recommendations of the contracting 
officer.

[49 FR 12616, Mar. 29, 1984, as amended at 63 FR 69221, Dec. 16, 1998]

                   Subpart 832.8_Assignment of Claims



Sec. 832.805  Procedure.



Sec. 832.805-70  Distribution/notification of assignment of claims.

    (a) The Contracting officer will file the retained copy of the 
notice of assignment and the certified copy of the original instrument 
of assignment with the General Accounting Office copy of the contract.
    (b) Contracting officers will notify field facilities of any 
recognized assignment of payments under contracts executed in Central 
Office or by the VA National Acquisition Center divisions in all cases 
where payment for articles and services under such contracts are

[[Page 209]]

certified and approved for payment in the field.

[49 FR 12616, Mar. 29, 1984, as amended at 54 FR 40065, Sept. 29, 1989; 
63 FR 69221, Dec. 16, 1998]

                  PART 833_PROTESTS, DISPUTES, APPEALS

                         Subpart 833.1_Protests

Sec.

Sec. 833.102 General.

Sec. 833.103 Protests to the Department.

Sec. 833.104 Protests to GAO.

Sec. 833.106 Solicitation provision.

                   Subpart 833.2_Disputes and Appeals


Sec. 833.209 Suspected fraudulent claims.

Sec. 833.211 Contracting officer's decision.

Sec. 833.212 Contracting officer's duties upon appeal.

Sec. 833.214 Alternative dispute resolution (ADR).

    Authority: 38 U.S.C. 501 and 40 U.S.C. 486(c).

                         Subpart 833.1_Protests



Sec. 833.102  General.

    Solicitations shall instruct interested parties (see FAR provision 
52.233-2) to deliver a copy of any protest filed with the General 
Accounting Office (GAO) to the contracting officer and the appropriate 
Central Office activity as follows:
    (a) For contracts to be awarded by the Office of Facilities 
Management: Chief Facilities Management Officer, Office of Facilities 
Management, Department of Veterans Affairs, 810 Vermont Avenue, NW., 
Washington, DC 20420.
    (b) For all other contracts: Deputy Assistant Secretary for 
Acquisition and Materiel Management, Acquisition Administration Team, 
Department of Veterans Affairs, 810 Vermont Avenue NW., Washington, DC 
20420.

[51 FR 23070, June 25, 1986, as amended at 52 FR 28559, July 31, 1987; 
54 FR 40065, Sept. 29, 1989; 58 FR 48974, Sept. 21, 1993; 61 FR 11586, 
Mar. 21, 1996; 63 FR 15318, Mar. 31, 1998]



Sec. 833.103  Protests to the Department.

    (a) Filing of protests. (1) An interested party may protest to the 
contracting officer or, as an alternative, may request an independent 
review by filing a protest with the Deputy Assistant Secretary for 
Acquisition and Materiel Management, Acquisition Administration Team, 
or, for solicitations issued by the Office of Facilities Management, the 
Chief Facilities Management Officer, Office of Facilities Management. A 
protest filed with the Deputy Assistant Secretary for Acquisition and 
Materiel Management or the Chief Facilities Management Officer will not 
be considered if the interested party has a protest on the same or 
similar issues pending with the contracting officer.
    (2) Protests must be in writing and addressed as follows:
    (i) Contracting officer protests--address where offer/bid is to be 
submitted;
    (ii) Deputy Assistant Secretary for Acquisition and Materiel 
Management, Acquisition Administration Team, Department of Veterans 
Affairs, 810 Vermont Avenue, NW., Washington, DC 20420; or
    (iii) Chief Facilities Management Officer, Office of Facilities 
Management, Department of Veterans Affairs, 810 Vermont Avenue, NW., 
Washington, DC 20420.
    (3) Protests regarding certain issues may be dismissed by VA without 
consideration of the merits or forwarded to another agency for 
appropriate action. Among these protests are the following:
    (i) Contract administration. The administration of an existing 
contract is within the discretion of the contracting agency. Disputes 
between a contractor and the Department are resolved pursuant to the 
disputes clause of the contract and the Contract Disputes Act of 1978. 
41 U.S.C. 601-613.
    (ii) Small business size standards and standard industrial 
classification. Challenges of established size standards or the size 
status of particular firms, and challenges of the selected standard 
industrial classification are for review solely by the Small Business 
Administration. 15 U.S.C. 637(b)(6); 13 CFR 121.3-6 (1984).
    (iii) Small business certificate of competency program. Any referral 
made to the Small Business Administration pursuant to section 8(b)(7) of 
the Small

[[Page 210]]

Business Act, or any issuance of a certificate of competency or refusal 
to issue a certificate under such section is not reviewed in accordance 
with bid protest procedures absent a showing of possible fraud or bad 
faith on the part of Government officials.
    (iv) Protests under section 8(a) of the Small Business Act. Since 
contracts are let under section 8(a) of the Small Business Act to the 
Small Business Administration at the contracting officer's discretion 
and on such terms as agreed upon by the procuring agency and the Small 
Business Administration, the decision to place or not to place a 
procurement under the 8(a) subcontract are not subject to review absent 
a showing of possible fraud or bad faith on the part of Government 
officials or that regulations may have been violated. 15 U.S.C. 637(a).
    (v) Affirmative determination of responsibility by the Contracting 
Officer. Because a determination that a bidder or offeror is capable of 
performing a contract is based in large measure on subjective judgments 
which generally are not readily susceptible to reasoned review, an 
affirmative determination of responsibility will not be reviewed, absent 
a showing that such determination was made fraudulently or in bad faith 
or that definitive responsibility criteria in the solicitation were not 
met.
    (vi) Walsh-Healey Public Contract Act. Challenges of the legal 
status of a firm as a regular dealer or manufacturer within the meaning 
of the Walsh-Healey Act is for determination solely by the procuring 
agency, the Small Business administration (if a small business is 
involved) and the Secretary of Labor. 41 U.S.C. 35-45.
    (vii) Subcontractor protests. The contracting agency will not 
consider subcontractor protests except where the subcontract is by or 
for the Government.
    (viii) Judicial proceedings. The contracting agency will not 
consider protests where the matter involved is the subject of litigation 
before a court of competent jurisdiction.
    (b) Where appropriate, alternative dispute resolution (ADR) 
procedures may be used to resolve protests at any stage in the protest 
process. The Department of Veterans Affairs Board of Contract Appeals 
(VABCA) is an independent and neutral entity within the Department of 
Veterans Affairs and is available to serve as the third-party neutral 
(Neutral) for bid protests. If ADR is used, the Department of Veterans 
Affairs will not furnish any documentation in an ADR proceeding beyond 
what is allowed by the Federal Acquisition Regulation.
    (c) Action upon receipt of protest. For protests filed with the 
contracting officer, the head of the contracting activity (HCA) shall be 
the approving official for the determinations identified in FAR 
33.103(f)(1) and (f)(3). If the HCA is also the contracting officer, the 
approving official shall be the Deputy Assistant Secretary for 
Acquisition and Materiel Management. For protests filed with the Deputy 
Assistant Secretary for Acquisition and Materiel Management, Acquisition 
Administration Team, or the Chief Facilities Management Officer, Office 
of Facilities Management, those individuals shall be the approving 
officials for the determinations identified in FAR 33.103(f)(1) and 
(f)(3).
    (d) Requests for GAO advance decisions. When a written protest has 
been filed with the contracting officer and the contracting officer 
considers it desirable to do so, the contracting officer may request an 
advance decision from the Comptroller General. The submission to the 
Comptroller General will be sent through the Deputy Assistant Secretary 
for Acquisition and Materiel Management, Acquisition Administration Team 
or the Chief Facilities Management Officer, Office of Facilities 
Management, as appropriate, and will include the material indicated in 
FAR 33.104(a)(2). The contracting officer shall notify the protesting 
individual or firm promptly in writing of the decision of the 
Comptroller General.
    (e) Protest after award. When a written protest is filed with the 
contracting officer after contract award:
    (1) If FAR 33.103(f)(3) requires suspension of contract performance, 
the contracting officer shall seek to obtain a mutual agreement with the 
contractor to suspend performance on a no-cost basis and, if successful, 
shall document the suspension with a supplemental

[[Page 211]]

agreement. If unsuccessful, the contracting officer shall issue a stop-
work order in accordance with contract clause FAR 52.233-3, Protest 
After Award.
    (2) If suspension of contract performance is not required by FAR 
33.103(f)(3) and if the contracting officer determines that the award 
was proper, the contracting officer shall furnish the protester a 
written explanation of the basis for the award which is responsive to 
the allegations of the protest. The contracting officer shall advise the 
protester that the protester may appeal the determination to the Deputy 
Assistant Secretary for Acquisition and Materiel Management, Acquisition 
Administration Team, or the Chief Facilities Management Officer, Office 
of Facilities Management, in the case of a contract awarded by the 
Office of Facilities Management, or the Comptroller General, as 
specified in internal Department guidance.
    (3) If suspension of contract performance is not required by FAR 
33.103(f)(3) but the contracting officer determines that the award is 
questionable, the contracting officer may consult with the Office of the 
General Counsel (025) and shall advise the contractor of the protest and 
invite the contractor to submit comments and relevant information. The 
contracting officer shall submit the case promptly to the Deputy 
Assistant Secretary for Acquisition and Materiel Management, Acquisition 
Administration Team, or the Chief Facilities Management Officer, Office 
of Facilities Management, in the case of a contract awarded by the 
Office of Facilities Management, who may consult with the Office of the 
General Counsel (025) and who shall either advise the contracting 
officer of the appropriate action to take, or submit the case to the 
Comptroller General for a decision. The contracting officer shall 
provide interested parties with a copy of the final decision.
    (f) Agency appellate review of contracting officer's protest 
decision. An interested party may request an independent review of a 
contracting officer's protest decision by filing an appeal with the 
Deputy Assistant Secretary for Acquisition and Materiel Management or, 
for solicitations issued by the Office of Facilities Management, with 
the Chief Facilities Management Officer, Office of Facilities 
Management. To be considered timely, the appeal must be received by the 
Deputy Assistant Secretary for Acquisition and Materiel Management or, 
for solicitations issued by the Office of Facilities Management, by the 
Chief Facilities Management Officer, Office of Facilities Management, 
within 10 calendar days of the date the interested party knew, or should 
have known, whichever is earlier, of the basis for the appeal. Appeals 
shall be addressed as provided in paragraphs (a)(2)(ii) or (iii) of this 
section. Appeals shall not extend GAO's timeliness requirements for 
appeals to GAO. By filing an appeal as provided herein, an interested 
party may waive its rights to further appeal to the Comptroller General 
at a later date. Agency responses to appeals submitted to the agency 
shall be reviewed and concurred in by the Office of the General Counsel 
(025).

[51 FR 23070, June 25, 1986, as amended at 52 FR 28560, July 31, 1987; 
52 FR 49017, Dec. 29, 1987; 54 FR 40065, Sept. 29, 1989; 58 FR 48974, 
Sept. 21, 1993; 61 FR 11586, Mar. 21, 1996; 61 FR 20492, May 7, 1996; 63 
FR 15318, 15319, Mar. 31, 1998]



Sec. 833.104  Protests to GAO.

    (a) General. (1) When a protest before or after award has been 
lodged with the General Accounting Office (GAO), the contracting officer 
will prepare a report to be forwarded to the Deputy Assistant Secretary 
for Acquisition and Materiel Management, Acquisition Resources Service, 
or the Chief Facilities Management Officer, Office of Facilities 
Management, as appropriate, within 5 workdays after receipt of verbal 
notice of the protest or receipt of a copy of the protest, whichever 
occurs first, for preparation of the Department report. The report 
should include a copy of the documentation indicated in FAR 
33.104(a)(3)(ii).
    (2) Contracting officers are responsible for the notification 
procedures outlined in FAR 33.104(a)(2).
    (b) Protests before award. When the Department has received notice 
from the GAO of a preaward protest filed directly with GAO, award shall 
not be

[[Page 212]]

made until the matter is resolved, unless the Deputy Assistant Secretary 
for Acquisition and Materiel Management, Acquisition Resources Service, 
or the Chief Facilities Management Officer, Office of Facilities 
Management, as appropriate, approves the head of contracting activity 
findings required by FAR 33.104(b)(1) and GAO has been notified pursuant 
to FAR 33.104(b)(2).
    (c) Protests after award. Protests after award shall be handled in a 
manner consistent with procedures identified for protests before award. 
Although persons involved or affected by the filing of a protest may be 
limited, at least the contractor shall be furnished the notice of the 
protest and its basis by the contracting officer. When VA receives from 
GAO, within ten calendar days after award, a notice of protest filed 
directly with GAO, and it is determined by the head of the contracting 
activity pursuant to FAR 33.104(c)(2) that contract performance should 
be authorized, the written findings will first be approved by the Deputy 
Assistant Secretary for Acquisition and Materiel Management, Acquisition 
Resources Service (or the Chief Facilities Management Officer, Office of 
Facilities Management, as appropriate), and the GAO must be notified as 
required by FAR 33.104(c)(3).

[51 FR 23070, June 25, 1986, as amended at 52 FR 28560, July 31, 1987; 
54 FR 40065, Sept. 29, 1989; 58 FR 48974, Sept. 21, 1993; 61 FR 11586, 
Mar. 21, 1996; 64 FR 69221, Dec. 16, 1998]



Sec. 833.106  Solicitation provision.

    (a) The contracting officer shall insert the provision at 852.233-
70, Protest Content, in each solicitation where the total value of all 
contract awards under the solicitation is expected to exceed the 
simplified acquisition threshold.
    (b) The contracting officer shall insert the provision at 852.233-
71, Alternate Protest Procedure, in each solicitation where the total 
value of all contract awards under the solicitation is expected to 
exceed the simplified acquisition threshold.

[63 FR 15319, Mar. 31, 1998]

                   Subpart 833.2_Disputes and Appeals



Sec. 833.209  Suspected fraudulent claims.

    Matters relating to suspected fraudulent claims will be referred to 
the Assistant Inspector General, Office of Investigations (51) for 
investigation and referral to the Department of Justice. No collection, 
recovery or other settlement action will be initiated while the matter 
is in the hands of the Department of Justice without first obtaining the 
concurrence of the U.S. Attorney concerned, through the Inspector 
General.

[51 FR 23070, June 25, 1986]



Sec. 833.211  Contracting officer's decision.

    (a) When a dispute cannot be settled by agreement and a final 
decision under the Disputes clause of the contract is necessary, the 
contracting officer shall furnish the contractor his/her final decision 
in the matter.
    (b) The decision must be identified as a final decision, be in 
writing, and include a statement of facts in sufficient detail to enable 
the contractor to fully understand the decision and the basis on which 
it was made. It will normally be in the form of a statement of the claim 
or other description of the dispute with necessary references to the 
pertinent contract provisions. It will set forth those facts relevant to 
the dispute, with which the contractor and the contracting officer are 
in agreement, and as clearly as possible, the area of disagreement.
    (c) Except as provided in paragraph (d) of this section, the 
decision shall, in addition to the material required by FAR 
33.211(a)(4), contain the following:

    The Department of Veterans Affairs Board of Contract Appeals (VABCA) 
is the authorized representative of the Secretary for hearing and 
determining such disputes. The rules of the VABCA are published in 
section 1.783, of Title 38, Code of Federal Regulations. The address of 
the Board is 810 Vermont Avenue, NW., Washington, DC 20420.

[51 FR 23070, June 25, 1986, as amended at 52 FR 28561, July 31, 1987; 
54 FR 40065, Sept. 29, 1989; 61 FR 20492, May 7, 1996]

[[Page 213]]



Sec. 833.212  Contracting officer's duties upon appeal.

    (a) When a notice of appeal in any form has been received by the 
contracting officer, that officer will endorse thereon the date of 
mailing (or date of receipt, if otherwise conveyed) and within 10 days, 
will forward said original notice of appeal and a copy of the 
contracting officer's final decision letter to the Department of 
Veterans Affairs Board of Contract Appeals (VABCA). Copies of the notice 
of appeal and the final decision letter will be transmitted concurrently 
to the Deputy Assistant Secretary for Acquisition and Materiel 
Management, Acquisition Resources Service and the Assistant General 
Counsel (025). (In cases of construction contracts administered by the 
Office of Facilities Management, copies of appeal and final decision 
letter need not be transmitted to the Deputy Assistant Secretary for 
Acquisition and Materiel Management, Acquisition Resources Service.)
    (b) Within 20 days of receipt of an appeal, or advice that an appeal 
has been filed, the contracting officer will assemble and transmit to 
the VABCA, through the Office of General Counsel (025), an appeal file 
consisting of all documents pertinent to the appeal, including:
    (1) The decision and findings of fact from which the appeal is 
taken;
    (2) The contract, including specifications and pertinent amendments, 
plans and drawings;
    (3) All correspondence between the parties pertinent to the appeal, 
including the letter or letters of claim in response to which the 
decision was issued;
    (4) Transcripts of any testimony taken during the course of 
proceedings and affidavits or statements of any witnesses on the matter 
in dispute made prior to the filing of the notice of appeal with the 
VABCA; and
    (5) Any additional information considered pertinent.

[51 FR 23070, June 25, 1986; 51 FR 44179, Dec. 8, 1986; 61 FR 11586, 
Mar. 21, 1996; 64 FR 69221, Dec. 16, 1998]



Sec. 833.214  Alternative dispute resolution (ADR).

    (a) Contracting officers and contractors are encouraged to use 
alternative dispute resolution (ADR) procedures to resolve contract 
disputes before they become appealable disputes by using the Department 
of Veterans Affairs' ADR Program.
    (b) Under the Department's ADR Program, the Department of Veterans 
Affairs Board of Contract Appeals (VABCA or Board) Chair, who is the 
Department's Dispute Resolution Specialist, will appoint a Board member 
or hearing examiner (at no cost to either party) to serve as a Neutral 
to aid in resolving matters before they become appealable disputes. The 
administrative judges and hearing examiners are trained Neutrals and are 
available to assist in ADR proceedings.
    (c) Under the ADR Program, the parties are able to select the ADR 
process they believe will help resolve the matter. Everything discussed 
during the ADR meeting is confidential. In the event a Board member 
serves as a Neutral in a matter that is not resolved using ADR, that 
Board member shall keep all discussions confidential and shall have no 
further input or contact with the parties or other Board members in 
subsequent Board activities (ref. the Administrative Dispute Resolution 
Act, 5 U.S.C. 571-583; and, Federal Acquisition Regulation, Subpart 
33.2).
    (d) The Department of Veterans Affairs and contractors are also 
encouraged to use ADR in disputes appealed to the VABCA.

[63 FR 15319, Mar. 31, 1998]

[[Page 214]]

             SUBCHAPTER F_SPECIAL CATEGORIES OF CONTRACTING

         PART 836_CONSTRUCTION AND ARCHITECT-ENGINEER CONTRACTS

      Subpart 836.2_Special Aspects of Contracting for Construction

Sec.

Sec. 836.202 Specifications.

Sec. 836.203 Government estimate of construction costs.

Sec. 836.204 Disclosure of the magnitude of construction projects.

Sec. 836.206 Liquidated damages.

Sec. 836.209 Construction contracts with architect-engineer firms.

Sec. 836.213-4 Notice of award.

Sec. 836.213-70 Notice to proceed.

                     Subpart 836.5_Contract Clauses


Sec. 836.500 Scope of subpart.

Sec. 836.501 Performance of work by the contractor.

Sec. 836.513 Accident prevention.

Sec. 836.521 Specifications and drawings for construction.

Sec. 836.570 Correspondence.

Sec. 836.571 Reference to ``standards.''

Sec. 836.572 Government supervision.

Sec. 836.573 Daily report of workers and materials.

Sec. 836.574 Subcontractors and work coordination.

Sec. 836.575 Schedule of work progress.

Sec. 836.576 Supplementary labor standards provisions.

Sec. 836.577 Worker's compensation.

Sec. 836.578 Contract changes--supplement.

Sec. 836.579 Special notes.

                Subpart 836.6_Architect-Engineer Services


Sec. 836.602 Selection of firms for achitect-engineer contracts.

Sec. 836.602-1 Selection criteria.

Sec. 836.602-2 Evaluation boards.

Sec. 836.602-4 Selection authority.

Sec. 836.602-5 Short selection process for contracts not to exceed the 
          simplified acquisition threshold.

Sec. 836.603 Collecting data on and appraising firms' qualifications.

Sec. 836.606 Collecting data on and appraising firms' qualifications.

Sec. 836.606-70 General.

Sec. 836.606-71 Architect-engineer's proposal.

Sec. 836.606-72 Contract price.

Sec. 836.606-73 Application of 6-percent architect-engineer fee 
          limitation.

    Authority: 38 U.S.C. 501 and 40 U.S.C. 486(c).

    Source: 49 FR 12618, Mar. 29, 1984, unless otherwise noted.

      Subpart 836.2_Special Aspects of Contracting for Construction



Sec. 836.202  Specifications.

    (a) The procedures described in part 811 shall be applicable to 
construction specifications.
    (b) The use of ``brand name or equal'' or other restrictive 
specifications by contract architect-engineers is specifically 
prohibited without the prior written approval of the contracting officer 
during the design stage. The contracting officer shall inform the 
prospective architect-engineers of this requirement during the 
negotiation phase, prior to award of a contract for design.
    (c) If it is determined that only one product will meet the 
Government's minimum needs and VA will not allow the submission of 
``equal'' products, the bidders must be placed on notice that the 
``brand name or equal'' provisions of the ``Material and Workmanship'' 
clause found at FAR 52.236.5, and any other provision which may 
authorize the submission of an ``equal'' product, will not apply. In 
order to properly alert bidders to this requirement, the contracting 
officer shall include the clause found at 852.236-90, ``Restriction on 
Submission and Use of Equal Products,'' in the solicitation.

[52 FR 282, Jan. 5, 1987, as amended at 53 FR 7756, Mar. 10, 1988; 53 FR 
9631, Mar. 24, 1988; 54 FR 40065, Sept. 29, 1989; 61 FR 20492, May 7, 
1996; 63 FR 17338, Apr. 9, 1998; 67 FR 49258, July 30, 2002]



Sec. 836.203  Government estimate of construction costs.

    The overall amount of the Government estimate shall not be disclosed 
until after award of the contract. After award, the overall amount may 
then be disclosed upon request.

[67 FR 49258, July 30, 2002]

[[Page 215]]



Sec. 836.204  Disclosure of the magnitude of construction projects.

    In lieu of the estimated price ranges described in FAR 36.204, the 
magnitude of VA projects should be identified in advance notices and 
solicitations in terms of one of the following price ranges:
    (a) Less than $25,000;
    (b) Between $25,000 and $100,000;
    (c) Between $100,000 and $250,000;
    (d) Between $250,000 and $500,000;
    (e) Between $500,000 and $1,000,000;
    (f) Between $1,000,000 and $2,000,000;
    (g) Between $2,000,000 and $5,000,000;
    (h) Between $5,000,000 and $10,000,000;
    (i) Between $10,000,000 and $20,000,000;
    (j) Between $20,000,000 and $50,000,000;
    (k) Between $50,000,000 and $100,000,000;
    (l) More than $100,000,000.


(This section has been promulgated as a deviation to the FAR as provided 
in FAR Subpart 1.4.)

[53 FR 1631, Jan. 21, 1988]



Sec. 836.206  Liquidated damages.

    Liquidated damage provisions may be included in construction 
contracts when the criteria of 811.502 is met. If partial performance 
may be accepted and utilized to the advantage of the Government, the 
clause substantially as set forth in 852.211-78 will be included in 
addition to the clause set forth in FAR 52.211-12.

[49 FR 12618, Mar. 29, 1984, as amended at 63 FR 17338, Apr. 9, 1998]



Sec. 836.209  Construction contracts with architect-engineer firms.

    When it is considered necessary or advantageous to award a contract 
for construction of a design-bid-build project, as defined at FAR 
36.102, to the firm or person that designed the project, prior approval 
will be requested from the facility director or manager or, for National 
Cemetery Administration contracts, the Director, Office of Construction 
Management, for contracts involving nonrecurring maintenance (NRM) funds 
or from the Chief Facilities Management Officer, Office of Facilities 
Management, for contracts involving construction funds. Complete 
justification will be furnished in the request. This section does not 
apply to design-build contracts, as defined at FAR 36.102.

[67 FR 49258, July 30, 2002]



Sec. 836.213-4  Notice of award.

    The contracting officer shall provide the contractor a notice of 
award (letter of acceptance) for any contract award in excess of 
$25,000.

[67 FR 49259, July 30, 2002]



Sec. 836.213-70  Notice to proceed.

    (a) Construction contractors will be given a written ``Notice to 
Proceed'' with the work. A letter notice to proceed will normally be 
sent only after performance and payment bonds and the completed contract 
forms, where applicable, have been returned by the contractor and are 
accepted by the contracting officer. If the urgency of the work or other 
proper reason requires the contractor to begin work immediately, the 
award letter may include the ``Notice to Proceed'' with the reservation 
that payments are contingent upon receipt and approval of the required 
bonds.
    (b) If the contract provides for liquidated damages, the notice to 
proceed will be sent by certified mail, return receipt requested, or any 
other method that provides signed evidence of receipt. The notice to 
proceed will advise the contractor that the work will be completed 
within ---- (insert contract time for completion) calendar days from the 
date of receipt shown on the certified mail receipt card returned by the 
post office or on the proof of delivery provided by the delivery 
service.
    (c) If the contract does not provide for liquidated damages, 
certified mail is not required. Notices to proceed for these contracts 
will establish a date for completion taking into consideration the time 
required for the notice to arrive by regular mail.
    (d) At the time the notice to proceed is sent to the contractor, a 
copy will be furnished to the resident engineer or the Chief, 
Engineering Service. A copy of the notice to proceed will be filed with 
copy A of the contract. When certified mail or other method of delivery 
is used, the certified mail receipt card returned by the post office or 
the proof of delivery provided by the delivery

[[Page 216]]

service will be attached to the copy of the notice to proceed. Copies of 
the notice to proceed will be filed with copies C and D of the contract 
after the date of receipt has been established and indicated thereon.

[49 FR 12618, Mar. 29, 1984, as amended at 50 FR 794, Jan. 7, 1985; 61 
FR 11587, Mar. 21, 1996; 61 FR 20492, May 7, 1996. Redesignated and 
amended at 67 FR 49259, July 30, 2002]

                     Subpart 836.5_Contract Clauses



Sec. 836.500  Scope of subpart.

    (a) The clauses and provisions prescribed in this subpart are set 
forth for use in fixed-price construction contracts in addition to those 
in FAR Subpart 52.2.
    (b) Additional clauses and provisions not inconsistent with those in 
FAR Subparts 36.5 and 52.2 and those prescribed in this subpart are 
authorized when determined necessary or desirable by the contracting 
officer, and when approved as provided in subpart 801.4.
    (c) Clauses and provisions inconsistent with those contained in FAR 
Subpart 36.5 and 52.2 and this subpart, but considered essential to the 
procurement of Department of Veterans Affairs requirements, shall not be 
used unless the deviation procedure set forth in subpart 801.4 has been 
complied with.

[49 FR 12629, Mar. 29, 1984, as amended at 50 FR 796, Jan. 7, 1985. 
Redesignated and amended at 67 FR 49260, July 30, 2002]



Sec. 836.501  Performance of work by the contractor.

    The contracting officer shall insert the clause at 852.236-72, 
Performance of work by the contractor, in solicitations and contracts 
for construction that contain the FAR clause at 52.236-1, Performance of 
Work by the Contractor. When the solicitations and contracts include a 
section entitled ``Network Analysis System (NAS),'' the contracting 
officer shall use the clause with its Alternate I.

[67 FR 49259, July 30, 2002]



Sec. 836.513  Accident prevention.

    The contracting officer shall insert the clause at 852.236-87, 
Accident Prevention, in all solicitations that contain the clause at FAR 
52.236-13, Accident prevention, or its Alternate.

[58 FR 48974, Sept. 21, 1993; 58 FR 58730, Nov. 3, 1993]



Sec. 836.521  Specifications and drawings for construction.

    The contracting officer shall insert the clause at 852.236-71, 
Specifications and drawings for construction, in solicitations and 
contracts for construction that contain the FAR clause at 52.236-21, 
Specifications and Drawings for Construction.

[67 FR 49259, July 30, 2002]



Sec. 836.570  Correspondence.

    The contracting officer shall insert the clause at 852.236-76, 
Correspondence, in solicitations and contracts for construction expected 
to exceed the micro-purchase threshold.

[67 FR 49259, July 30, 2002]



Sec. 836.571  Reference to ``standards.''

    The contracting officer shall insert the clause at 852.236-77, 
Reference to ``standards,'' in solicitations and contracts for 
construction expected to exceed the micro-purchase threshold.

[67 FR 49259, July 30, 2002]



Sec. 836.572  Government supervision.

    The contracting officer shall insert the clause at 852.236-78, 
Government supervision, in solicitations and contracts for construction 
expected to exceed the micro-purchase threshold.

[67 FR 49259, July 30, 2002]



Sec. 836.573  Daily report of workers and materials.

    The contracting officer shall insert the clause at 852.236-79, Daily 
report of workers and materials, in solicitations and contracts for 
construction expected to exceed the simplified acquisition threshold. 
The contracting officer may, when in the best interest of the 
Government, insert the clause in solicitations and contracts for 
construction when the contract amount is expected to be at or below the 
simplified acquisition threshold.

[67 FR 49259, July 30, 2002]

[[Page 217]]



Sec. 836.574  Subcontractors and work coordination.

    The contracting officer shall insert the clause at 852.236-80, 
Subcontracts and work coordination, in solicitations and contracts for 
construction expected to exceed the micro-purchase threshold. When the 
solicitations or contracts are for new construction work with complex 
mechanical-electrical work, the contracting officer may use the clause 
with its Alternate I.

[67 FR 49259, July 30, 2002]



Sec. 836.575  Schedule of work progress.

    The contracting officer shall insert the clause at 852.236-84, 
Schedule of work progress, in solicitations and contracts for 
construction that are expected to exceed the micro-purchase threshold 
and that do not contain a section entitled ``Network Analysis System 
(NAS).''

[67 FR 49259, July 30, 2002]



Sec. 836.576  Supplementary labor standards provisions.

    The contracting officer shall insert the clause at 852.236-85, 
Supplementary labor standards provisions, in solicitations and contracts 
for construction that are expected to exceed the micro-purchase 
threshold.

[67 FR 49259, July 30, 2002]



Sec. 836.577  Worker's compensation.

    The contracting officer shall insert the clause at 852.236-86, 
Worker's compensation, in solicitations and contracts for construction 
that are expected to exceed the micro-purchase threshold.

[67 FR 49259, July 30, 2002]



Sec. 836.578  Contract changes--supplement.

    (a) The contracting officer shall insert the clause at 852.236-88, 
Contract changes--supplement, in solicitations and contracts for 
construction that are expected to exceed the micro-purchase threshold.
    (b) When negotiated changes exceed $500,000, paragraph (a) of the 
clause at 852.236-88 will apply. Because paragraph (a) does not provide 
ceiling rates for indirect expenses, the contractor must supply cost 
breakdowns and other supporting data on its rates for indirect expenses 
as part of its price proposal. The contracting officer must negotiate 
the rates for indirect expenses with the contractor and may request an 
audit in accordance with FAR 15.404-2. When the negotiated change will 
be $500,000 or less, paragraph (b) of the clause at 852.236-88 will 
apply.
    (c) As provided in FAR 15.403-4, proposals exceeding the cost or 
pricing data threshold shall be accompanied by certificates of current 
cost or pricing data. The contracting officer, if authorized by the head 
of the contracting activity, may require the submission of cost or 
pricing data for proposals valued at less than the cost or pricing data 
threshold specified in FAR 15.403-4(a)(1) and may require that the data 
be certified in accordance with FAR 15.403-4(a)(2).
    (d) It is emphasized that the indirect cost rates in paragraph (b) 
of the clause at 852.236-88, for changes costing $500,000 or less, are 
ceiling rates only and the contracting officer must negotiate the 
indirect expense rates within the ceiling limitations. The clause is a 
result of an approved FAR deviation pursuant to subpart 801.4.

[67 FR 49259, July 30, 2002]



Sec. 836.579  Special notes.

    The contracting officer shall insert the clause at 852.236-91, 
Special notes, in solicitations and contracts for construction that are 
expected to exceed the micro-purchase threshold.

[67 FR 49259, July 30, 2002]

                Subpart 836.6_Architect-Engineer Services



Sec. 836.602  Selection of firms for architect-engineer contracts.



Sec. 836.602-1  Selection criteria.

    In addition to the evaluation criteria set forth in FAR 36.602-1, 
the board will consider the factors set forth in this section as they 
apply to the project or purpose of the selection. Values will be 
assigned to each factor in determining the relative qualifications of 
the firms identified as qualified through the

[[Page 218]]

preselection process. The values may be confirmed or adjustments may be 
made as a result of the discussions.
    (a) Reputation and standing of the firm and its principal officials 
with respect to professional performance, general management, and 
cooperativeness.
    (b) Record of significant claims against the client because of 
improper or incomplete architectural and engineering services.
    (c) Specific experience and qualifications of personnel proposed for 
assignment to the project and their record of working together as a 
team.

[49 FR 12618, Mar. 29, 1984, as amended at 61 FR 20493, May 7, 1996; 67 
FR 49259, July 30, 2002]



Sec. 836.602-2  Evaluation boards.

    Central Office architect-engineer contractors will be selected by 
the board appointed by the Chief Facilities Management Officer, Office 
of Facilities Management. Field facility architect-engineer contractors 
will be selected by the board appointed by the facility director.
    (a) The evaluation board for the Office of Facilities Management 
will be chaired by the Director, A/E Evaluation and Program Support 
Service. The Project Director or Project Manager will be designated to 
act as Chair when necessary. The board's members, as appointed by the 
Chief Facilities Management Officer, Office of Facilities Management, 
will include the appropriate Project Manager and as many qualified 
professional architects or engineers from the Office of Facilities 
Management technical services as may be considered appropriate for the 
particular project. Additional members from the Office of Facilities 
Management or from other VA administrations and staff offices will be 
designated for projects when appropriate.
    (b) The evaluation board for a VA field facility will consist of no 
less than two members, one of whom will be the head of the contracting 
activity (HCA) (or the senior contracting officer at the facility if 
there is no HCA on site) and the other the Chief, Engineering Service, 
or their alternates. Where a facility has two or more engineers on its 
staff, an additional engineer will be appointed to the board. The 
chairperson of the board will be the senior engineer.
    (c) The evaluation board for National Cemetery Administration (NCA) 
contracts will be appointed by the Director, Office of Construction 
Management, and will consist of no less than three members, one of whom 
will serve as the board's Chair, and one of whom will be an NCA senior 
level contracting officer.

[49 FR 12618, Mar. 29, 1984, as amended at 53 FR 1631, Jan. 21, 1988; 54 
FR 40065, Sept. 29, 1989; 61 FR 11587, Mar. 21, 1996; 64 FR 69221, Dec. 
16, 1998; 67 FR 49260, July 30, 2002]



Sec. 836.602-4  Selection authority.

    The Chief Facilities Management Officer, Office of Facilities 
Management (for Central Office contracts), the Director, Office of 
Construction Management (for National Cemetery Administration 
contracts), and) and the facility director (for field facility 
contracts), or persons acting in those capacities, are designated as the 
approving officials for the recommendations of the evaluation boards.

[49 FR 12618, Mar. 29, 1984, as amended at 53 FR 1631, Jan. 21, 1988; 61 
FR 11587, Mar. 21, 1996; 67 FR 49260, July 30, 2002]



Sec. 836.602-5  Short selection process for contracts not to exceed the 

simplified acquisition threshold.

    Either of the procedures provided in FAR 36.602-5 may be used to 
select firms for architect-engineer contracts not expected to exceed the 
simplified acquisition threshold.

[67 FR 49260, July 30, 2002]



Sec. 836.603  Collecting data on and appraising firms' qualifications.

    The Chief Facilities Management Officer, Office of Facilities 
Management, for Central Office; the Director, Office of Construction 
Management, for National Cemetery Administration acquisitions; and the 
Chief, Engineering Service, for field facilities, are responsible for 
collecting Standard Forms 254 and 255 and for maintaining a data file on 
architect-engineer qualifications.

[67 FR 49260, July 30, 2002]

[[Page 219]]



Sec. 836.606  Negotiations.



Sec. 836.606-70  General.

    To assure that the fee limitation is not violated, the contracting 
officer will maintain suitable records to be able to isolate the amount 
in the total fee to which the 6-percent limitation applies.

[49 FR 12618, Mar. 29, 1984, as amended at 61 FR 20493, May 7, 1996]



Sec. 836.606-71  Architect-engineer's proposal.

    The use of VA Form 08-6298, Architect-Engineer Fee Proposal, is 
mandatory for obtaining the proposal and supporting cost or pricing data 
from the contractor and subcontractor in the negotiation of all 
architect-engineer contracts for design services when the contract price 
is estimated to be $50,000 or over. In obtaining architect-engineer 
services for research study, seismic study, master planning study, 
construction management and other related services contracts, VA Form 
08-6298 shall also be used but supplemented or modified as needed for 
the particular project type.

[49 FR 12618, Mar. 29, 1984, as amended at 61 FR 20493, May 7, 1996]



Sec. 836.606-72  Contract price.

    Where negotiations with the top-rated firm are unsuccessful, the 
contracting officer will terminate the negotiations and undertake 
negotiations with the firm next in order of preference after 
authorization by the Chief Facilities Management Officer, Office of 
Facilities Management, or the facility director. Recommendation for 
award of the contract at the negotiated fee, will be submitted with a 
copy of the negotiation memorandum prepared in accordance with FAR 
15.406-3 and, whenever a field pricing report has been received, to the 
Chief Facilities Management Officer, Office of Facilities Management, or 
the facility director, as appropriate.

[52 FR 282, Jan. 5, 1987, as amended at 54 FR 40065, Sept. 29, 1989; 61 
FR 11587, Mar. 21, 1996; 64 FR 69221, Dec. 16, 1998]



Sec. 836.606-73  Application of 6-percent architect-engineer fee 

limitation.

    (a) The 6-percent fee limitation does not apply to the following 
architect or engineer services:
    (1) Investigative services including but not limited to:
    (i) Determination of program requirements including schematic or 
preliminary plans and estimates.
    (ii) Determination of feasibility of proposed project.
    (iii) Preparation of measured drawings of existing facility.
    (iv) Subsurface investigation.
    (v) Structural, electrical, and mechanical investigation of existing 
facility.
    (vi) Surveys: Topographic, boundary, utilities, etc.
    (2) Special consultant services not normally available in 
organizations of architects or engineers not specifically applied to the 
actual preparation of working drawings or specifications of the project 
for which the services are required.
    (3) Other:
    (i) Reproduction of approved designs through models, color 
renderings, photographs, or other presentation media.
    (ii) Travel and per diem allowances other than those required for 
the development and review of working drawings and specifications.
    (iii) Supervision or inspection of construction, review of shop 
drawings or samples, and other services performed during the 
construction phase.
    (iv) All other services that are not integrally a part of the 
production and delivery of plans, designs, and specifications.
    (4) The cost of reproducing drawings and specifications for bidding 
and their distribution to prospective bidders and plan file rooms.
    (b) The total cost of the architect or engineer services contracted 
for may not exceed 6 percent of the estimated cost of the construction 
project plus the estimated cost of related services and activities such 
as those shown in paragraph (a) of this section. To support project 
submissions, VA Form 10-1193, Application for Health Care Facility 
Project, and VA Form 10-6238, EMIS Construction Program-Estimate

[[Page 220]]

Worksheet, will be used and the proposed technical services shown where 
necessary and applicable.

[49 FR 12618, Mar. 29, 1984, as amended at 61 FR 20493, May 7, 1996; 67 
FR 49260, July 30, 2002]

                      PART 837_SERVICE CONTRACTING

                 Subpart 837.1_Service Contracts_General

Sec.

Sec. 837.103 Contracting officer responsibility.

Sec. 837.104 Personal services contracts.

             Subpart 837.2_Advisory and Assistance Services


Sec. 837.203 Policy.

Sec. 837.270 Special controls for letters of agreement.

    Subpart 837.3_Dismantling, Demolition, or Removal of Improvements


Sec. 837.300 Scope of subpart.

             Subpart 837.4_Nonpersonal Health-Care Services


Sec. 837.403 Contract clause.

                    Subpart 837.70_Mortuary Services


Sec. 837.7001 General.

Sec. 837.7002 List of qualified funeral directors.

Sec. 837.7003 Funeral authorization.

Sec. 837.7004 Administrative necessity.

Sec. 837.7005 Unclaimed remains--all other cases.

    Authority: 38 U.S.C. 501 and 40 U.S.C. 486(c).

    Source: 49 FR 12620, Mar. 29, 1984, unless otherwise noted.

                 Subpart 837.1_Service Contracts_General



Sec. 837.103  Contracting officer responsibility.

    When the contracting officer determines that legal assistance is 
necessary in determining whether a proposed service contract is for 
personal or nonpersonal services, he/she shall gather all the pertinent 
facts and request the opinion of District Counsel responsible for 
servicing the VA facility involved.



Sec. 837.104  Personal services contracts.

    (a) Personal service contracts having an employer-employee 
relationship shall not be awarded but will be consummated in accordance 
with VA Manual MP-5, Parts I and II.
    (b) In addition to the elements used in assessing whether or not a 
contract is personal in nature identified in FAR 37.104(d), the 
following circumstances may also indicate a possible personal service 
contract.
    (1) The contract does not call for an end product which is 
adequately described in the contract.
    (2) The contract price or fee is based on the time actually worked 
rather than the results to be accomplished.
    (3) Office space, equipment and supplies for contract performance 
are to be furnished by the Department of Veterans Affairs.
    (4) Contractor personnel are to be used interchangeably with 
Department of Veterans Affairs personnel to perform the same function.
    (5) The Department of Veterans Affairs retains the right to control 
and direct the means and methods by which contractor personnel 
accomplish the work.

[49 FR 12620, Mar. 29, 1984, as amended at 50 FR 794, Jan. 7, 1985; 61 
FR 20493, May 7, 1996]

             Subpart 837.2_Advisory and Assistance Services



Sec. 837.203  Policy.

    For the purpose of this subpart the definition of advisory and 
assistance services shall, in addition to examples listed in FAR 37.203, 
include services to obtain peer review of research proposals.

[64 FR 69221, Dec. 16, 1998]



Sec. 837.270  Special controls for letters of agreement.

    (a) Letters of agreement may be used to procure advisory and 
assistance services and advisory board memberships only by those 
individuals designated in 801.670-5 and individuals delegated authority 
under the conditions specified in paragraph (b) of that section, and 
will be limited to a value of $500 per letter and to an accumulated 
annual total of $2,500 to any individual

[[Page 221]]

or firm. Letters of agreement should only be used where normal 
procurement channels are not feasible and only for obtaining the 
following services:
    (1) Advisory and assistance services including peer review of 
research proposals and advisory board memberships.
    (2) Management and professional services (837.271)
    (3) Instructors and training obtained pursuant to section 7472 of 
Title 38, United States Code.
    (b) The delegated official will perform or have performed for each 
letter of agreement all those duties and requirements prescribed in this 
subpart, as modified by paragraphs (c) and (d) of this section. That 
official will also insure that all reporting requirements are completed 
for each action.
    (c) The administration head or staff office director will be the 
highest level approving official for each procurement action which does 
not exceed $500 in consulting fees (excluding travel, per diem and other 
travel-related costs) and which does not award more than an accumulated 
total of $2,500 per year in consulting fees to any individual or firm. 
(Advisory and assistance services anticipated to exceed these dollar 
limitations will not be obtained through letters of agreement.)
    (d) Justifications for letters of agreement will provide a statement 
of need and will certify that such services do not unnecessarily 
duplicate any previously performed work or services. The justification 
will also certify that the procurement action will not violate post-
employment restrictions prescribed in the Ethics in Government Act and 
803.101-3.
    (e) Copies of all advisory and assistance services procurements 
accomplished through letters of agreement shall be provided to the local 
servicing purchase and contract office for entry into the Federal 
Procurement Data System.

[49 FR 12620, Mar. 29, 1984, as amended at 50 FR 794, Jan. 7, 1985; 54 
FR 40065, Sept. 29, 1989; 64 FR 69221, Dec. 16, 1998]

    Subpart 837.3_Dismantling, Demolition, or Removal of Improvements



Sec. 837.300  Scope of subpart.

    Contracting officers should be cognizant of the requirements 
contained in VA Manual MP-3, Part II, Chapter 6, for approval necessary 
prior to entering into a contract for disposal of VA real property. Such 
approval(s) shall be included in the contract file.

             Subpart 837.4_Nonpersonal Health-Care Services



Sec. 837.403  Contract clause.

    The contracting officer shall insert the clause at 852.237-7, 
Indemnification and Medical Liability Insurance, in lieu of FAR Clause 
52.237-7, in solicitations and contracts for nonpersonal health-care 
services, including solicitations and contracts for nonpersonal health-
care services awarded under the authority of 38 U.S.C. 8151-8153 and 
(VAAR) 48 CFR part 873. The contracting officer may include the clause 
in bilateral purchase orders for nonpersonal health-care services 
awarded under the procedures in FAR parts 12, 13, 14, or 15 and (VAAR) 
48 CFR parts 812, 813, 814, or 815.

[61 FR 52709, Oct. 8, 1996, as amended at 63 FR 69222, Dec. 16, 1998; 68 
FR 3469, Jan. 24, 2003]

                    Subpart 837.70_Mortuary Services



Sec. 837.7001  General.

    This subpart establishes the policies and procedures governing the 
procurement of funeral and burial services for deceased beneficiaries of 
the Department of Veterans Affairs, as provided in 38 U.S.C. 2303.

[61 FR 52709, Oct. 8, 1996, as amended at 63 FR 69222, Dec. 16, 1998]



Sec. 837.7002  List of qualified funeral directors.

    Contracting officers will establish, in coordination with cognizant 
Medical Administration Service personnel or other personnel designated 
by the medical center director to perform these functions, a list of 
funeral directors capable of performing the burial services

[[Page 222]]

specified in 837.7003. The contracting officer will attempt to establish 
a commitment to perform these services within the statutory limitation 
of $300. Each funeral director must be fully licensed in the 
jurisdiction in which the business operates. If there has been no prior 
experience with the funeral director which would ensure the adequacy of 
the funeral director's services and casket, arrangements will be made 
prior to contract negotiation to inspect the premises and the casket to 
be provided, and to check with the local business bureau and/or Chamber 
of Commerce.

[ 49 FR 12620, Mar. 29, 1984, as amended at 61 FR 20493, May 7, 1996; 63 
FR 69222, Dec. 16, 1998]



Sec. 837.7003  Funeral authorization.

    (a) When a veteran dies while receiving care in a Department of 
Veterans Affairs health care facility or in a non-Department of Veterans 
Affairs institution at Department of Veterans Affairs expense, and the 
decedent's remains are unclaimed, the Chief, Medical Administration 
Service, or the person designated by the medical center to perform these 
functions, will forward to the head of the contracting activity, a 
properly executed VA Form 10-2065, Funeral Arrangements, requesting that 
funeral and burial services for the deceased be procured. Burial will be 
made in the nearest National Cemetery having available grave space.
    (b) The contracting officer will enter into negotiations with local 
funeral directors to procure a complete funeral and burial service 
within the statutory allowance of $300. This service will consist of and 
will be specified on the purchase order, VA Form 90-2138, Order for 
Supplies or Services, or VA Form 90-2138-ADP, Purchase Order for 
Supplies or Services, as follows:
    (1) Preparation of the body, embalming.
    (2) Clothing.
    (3) Casket. (The casket, as a minimum, will be constructed from 
thick, strong particle board and must be of sufficient strength to 
support the weight of an adult human body. Cardboard or press paper or 
similar materials are not acceptable).
    (4) Securing all necessary permits.
    (5) Ensuring that a United States Flag (provided the funeral 
director in accordance with Veterans Health Administration Manual M-1, 
Part I, paragraph 14.40) accompanies the casket to place of burial.
    (c) An additional allowance for transportation of the body to the 
place of burial is provided in 38 U.S.C. 2303(a)(1)(B). This allowance 
will cover the transportation cost of shipment of the body by common 
carrier or by hearse from the VA facility to the funeral home and to the 
place of burial, any charges for an outside (shipment) box, and the 
charges for securing all necessary permits for removal or shipment of 
the body. These costs are not chargeable against the $300 allowance.
    (d) In accordance with Veterans Health Administration Manual M-1, 
Part I, paragraph 14.37, the contracting officer will designate the 
Chief, Medical Administration Service, or representative, or the person 
designated by the medical center director to perform these functions, to 
be responsible for the medical inspection of the mortuary services 
performed and inspection of the merchandise furnished. This designee 
will also be responsible for certifying receipt on the receiving report.
    (e) The head of the contracting activity will assist the Chief, 
Medical Administration Service, or the person designated by the medical 
center director to perform these functions, in developing the local 
procedures specified in Veterans Health Administration Manual M-1, Part 
I, paragraph 14.37c.

[49 FR 12620, Mar. 29, 1984, as amended at 50 FR 794, Jan. 7, 1985; 54 
FR 40065, Sept. 29, 1989; 63 FR 69222, Dec. 16, 1998]



Sec. 837.7004  Administrative necessity.

    (a) When persons die under Department of Veterans Affairs care who 
are not legally entitled to such care at Department of Veterans Affairs 
expense, and no relatives or friends will claim the remains, and the 
municipal, county or State officials refuse to provide for final 
disposition, arrangements will be made and expenses assumed for burial 
locally under separate contractual agreement.
    (b) When a full and complete funeral and burial service as 
prescribed in

[[Page 223]]

837.7003 cannot be obtained by the contracting officer within the 
statutory allowance, he/she will, prior to taking any further action, 
secure from the facility director a written determination that the 
disposition of the remains must be accomplished by the Department of 
Veterans Affairs as an administrative necessity. The facility director 
will also authorize in writing the expenditure of such additional funds 
as may be necessary for this purpose. The amount of these additional 
funds will be held to the minimum, keeping in mind, however, that the 
deceased must be given a proper and fitting interment.
    (c) The determination and authorization by the facility director 
will be made a part of the contract file.

[49 FR 12620, Mar. 29, 1984, as amended at 50 FR 794, Jan. 7, 1985; 54 
FR 40065, Sept. 29, 1989]



Sec. 837.7005  Unclaimed remains--all other cases.

    Requests for information on the disposition of the unclaimed remains 
of a veteran whose death occurs while not under the direct care or 
treatment of the Department of Veterans Affairs will be referred to the 
Veterans Services Officer for processing in accordance with Veterans 
Benefits Administration Manual M27-1, Part II. This manual is available 
at any Department of Veterans Affairs regional office, medical center or 
VA office.

[49 FR 12620, Mar. 29, 1984, as amended at 50 FR 794, Jan. 7, 1985]

[[Page 224]]

                    SUBCHAPTER G_CONTRACT MANAGEMENT

                    PART 842_CONTRACT ADMINISTRATION

Sec.

Sec. 842.000 Scope of part.

Sec. 842.070 Definition.

  Subpart 842.1_Interagency Contract Administration and Audit Services


Sec. 842.101 Policy.

Sec. 842.102 Procedures.

           Subpart 842.2_Assignment of Contract Administration


Sec. 842.202 Assignment of contract administration.

                    Subpart 842.7_Indirect Cost Rates


Sec. 842.705 Final indirect cost rates.

                   Subpart 842.8_Disallowance of Costs


Sec. 842.801-70 Audit assistance prior to disallowing costs.

Sec. 842.803 Disallowing cost after incurrence.

          Subpart 842.12_Novation and Change-of-Name Agreements


Sec. 842.1203 Processing agreements.

    Authority: 38 U.S.C. 501 and 40 U.S.C. 486(c).

    Source: 49 FR 12624, Mar. 29, 1984, unless otherwise noted.



Sec. 842.000  Scope of part.

    This part applies to all contracts, whether sealed bid or 
negotiated. (See 801.602-70 for requirements for legal review of certain 
contract administration actions.)

[49 FR 12624, Mar. 29, 1984, as amended at 50 FR 794, Jan. 7, 1985; 51 
FR 23072, June 25, 1986; 52 FR 28559, July 31, 1987]



Sec. 842.070  Definition.

    Contract Administration is the coordination of actions required for 
the performance of a contract including the guidance and supervision 
necessary to assure that all contractural obligations are fulfilled.

  Subpart 842.1_Interagency Contract Administration and Audit Services



Sec. 842.101  Policy.

    (a) Pursuant to FAR policy encouraging interagency cross-servicing 
in field contract support services, contracting officers of the 
Department of Veterans Affairs will utilize the support services of 
other agencies to the extent feasible. Examples of such services are: 
preaward surveys; quality assurance and technical inspection of contract 
items; and review of contractors' procurement systems. Requirements for 
support services available from any other Government department or 
agency will be obtained on the basis of an approved negotiated 
interagency support agreement.
    (b) An interagency support agreement is a written instrument of 
understanding executed between the parties to the agreement. The 
agreement should state clearly the accord which has been reached between 
the two parties involved, especially the obligations assumed by the 
rights granted each. The agreement will be specific with respect to 
resources to be provided by both the supplying and receiving activities. 
It will also provide for funding and reimbursement arrangements, and 
clauses permitting revisions, modifications thereto, or cancellation 
thereof, will be included.



Sec. 842.102  Procedures.

    (a) The Department of Defense Directory of Contract Administration 
Services Components and the Directory of Federal Contract Audit Offices 
are available through the Department of Veterans Affairs Forms and 
Publications Depot.
    (b) Proposed interagency support agreements with any other 
Government department or agency involving the expenditures of Department 
of Veterans Affairs funds of $5,000 of more will be forwarded by the 
facility director (or Central Office official) to the Deputy Assistant 
Secretary for Acquisition and Materiel Management (93),

[[Page 225]]

who will transmit with recommendation to the General Counsel for legal 
review and approval, as required by 801.602-70(a)(4).
    (1) Proposed agreements, both new and renewal, will be submitted in 
an original and four copies so as to reach Central Office 60 days prior 
to the effective date of the agreement.
    (2) Complete justification for all proposed agreements will be 
submitted, as approval depends on the adequacy of the justification.

[49 FR 12624, Mar. 29, 1984, as amended at 50 FR 794, Jan. 7, 1985; 63 
FR 69222, Dec. 16, 1998]

           Subpart 842.2_Assignment of Contract Administration



Sec. 842.202  Assignment of contract administration.

    Proposed assignments of contract administration responsibility 
outside of the procuring activity will be forwarded by the facility 
director to the Deputy Assistant Secretary for Acquisition and Materiel 
Management (95), who will transmit the proposal to the General Counsel 
for legal review and approval, as required by 801.602-70(a)(6) and 
801.602-71. Complete justification will be provided, specifically 
addressing the need for and benefits to be provided by assignment of 
contract administration. (See 801.603-70 for policy on designating 
representatives of contracting officers, and 48 CFR 9904 (FAR Appendix 
B) for policy on contracts involving Cost Accounting Standards.)

[49 FR 12624, Mar. 29, 1984, as amended at 50 FR 794, Jan. 7, 1985; 63 
FR 69222, Dec. 16, 1998]

                    Subpart 842.7_Indirect Cost Rates



Sec. 842.705  Final indirect cost rates.

    (a) Contracting officers will request audits on proposed final 
indirect cost rates and billing rates for use in cost reimbursement, 
fixed price incentive and fixed price redeterminable contracts as 
described in FAR Subpart 42.7 unless the quick-closeout procedures 
described in FAR 42.708 are used. In this case, the contracting officers 
will perform a review and validation of the contractor's data submitted 
for accuracy and reasonableness of the proposed rates for negotiating 
the settlement of indirect costs for a specific contract.
    (b) Contracting officers in the Office of Acquisition and Materiel 
Management and Office of Facilities Management who are located in the VA 
Central Office have the option to request audits directly from the 
cognizant audit agencies or requesting audits through the Assistant 
Inspector General, Office of Departmental Reviews and Management Support 
(53C). All other contracting officers located in the VA Central Office 
and the Office of the General Counsel will send requests for audit to 
the Assistant Inspector, Office of Departmental Reviews and Management 
Support (53C). Contracting officers located at field facilities, VA 
National Acquisition Center and supply depots are required to arrange 
for the audits through the Deputy Assistant Secretary for Acquisition 
and Materiel Management or the Chief Facilities Management Officer. The 
Assistant Inspector General, Office of Departmental Reviews and 
Management Support (53C) will provide such accounting assistance or 
technical advice as is deemed desirable by the contracting officers.

[49 FR 12624, Mar. 29, 1984, as amended at 52 FR 49017, Dec. 29, 1987; 
54 FR 40065, Sept. 29, 1989; 63 FR 69222, Dec. 16, 1998]

                   Subpart 842.8_Disallowance of Costs



Sec. 842.801-70  Audit assistance prior to disallowing costs.

    When a contracting officer determines during the performance of a 
cost reimbursement, fixed price incentive or fixed price redetermination 
contract exceeding the thresholds specified in FAR 15.403-4, that costs 
should be disallowed, audit assistance will be requested. Such requests 
submitted by field facility contracting officers will be directed to the 
Deputy Assistant Secretary for Acquisition and Materiel Management (95) 
for review and forwarding to the Assistant Inspector General, Office of 
Audit (52), or other recognized audit agency, e.g., the Defense Contract 
Audit Agency.

[49 FR 12624, Mar. 29, 1984, as amended 63 FR 69222, Dec. 16, 1998]

[[Page 226]]



Sec. 842.803  Disallowing cost after incurrence.

    Contracting officers may approve contractors' vouchers for payment 
and process them to the servicing fiscal office. Such approval must be 
within the limitations of the contracting officer and the contract for 
which the voucher is submitted must be within the contracting officers 
delegation of contracting authority. (Note 842.801-70 regarding 
disallowing costs.)

          Subpart 842.12_Novation and Change-of-Name Agreements



Sec. 842.1203  Processing agreements.

    Prior to execution of novation and change-of-name agreements by a 
Department of Veterans Affairs contracting officer, he/she will forward 
the agreement and related documents to the Office of the General Counsel 
for review as to legal sufficiency. The documents will be submitted 
through the same channels as those prescribed for legal review of 
contracts in 801.602-72.

[49 FR 12624, Mar. 29, 1984, as amended 63 FR 69222, Dec. 16, 1998]

                       PART 846_QUALITY ASSURANCE

                     Subpart 846.3_Contract Clauses

Sec.

Sec. 846.302-70 Inspection.

Sec. 846.312 Construction contacts.

           Subpart 846.4_Government Contract Quality Assurance


Sec. 846.408-70 Inspection of subsistence.

Sec. 846.408-71 Waiver of USDA inspection and specifications.

Sec. 846.470 Use of commercial organizations for inspections and grading 
          services.

Sec. 846.471 Determination authority.

Sec. 846.472 Inspection of repairs for properties under the Loan 
          Guaranty and Direct Loan Programs.

Sec. 846.472-1 Repairs of $1,000 or less.

Sec. 846.472-2 Repairs in excess of $1,000.

                        Subpart 846.7_Warranties


Sec. 846.710 Construction contracts.

Sec. 846.710-70 Special warranties.

Sec. 846.710-71 Warranty for construction--guarantee period services.

    Authority: 38 U.S.C. 501 and 40 U.S.C. 486(c).

    Source: 49 FR 12625, Mar. 29, 1984, unless otherwise noted.

                     Subpart 846.3_Contract Clauses



Sec. 846.302-70  Inspection.

    Contracts for property will include the clause 852.211-72(a), 
``Rejected Goods,'' except that contracts for packinghouse, dairy 
products, bread and bakery products, and fresh and frozen fruits and 
vegetables will include the clause prescribed in 852.211-72(b), 
``Rejected Goods.''

[49 FR 12625, Mar. 29, 1984, as amended at 67 FR 49260, July 30, 2002]



Sec. 846.312  Construction contacts.

    The contracting officer shall insert the clause at 852.236-74, 
Inspection of construction, in solicitations and contracts for 
construction that contain the FAR clause at 52.246-12, Inspection of 
Construction.

[67 FR 49260, July 30, 2002]

           Subpart 846.4_Government Contract Quality Assurance



Sec. 846.408-70  Inspection of subsistence.

    (a) The contracting officer will determine at the time of issuance 
of the solicitation whether inspection for specification compliance will 
be made: (1) Prior to shipment by representatives of the U.S. Department 
of Agriculture (USDA) or the Department of Commerce, or (2) at the time 
of delivery by personnel of the purchasing activity. The place of 
inspection will be indicated in the solicitation.
    (b) Since the requirement for USDA or Department of Commerce 
inspections and certifications results in additional contractor costs 
which may be ultimately reflected in bid prices, the contracting 
officer, in consultation with the Chief, Nutrition and Food Service, 
must evaluate the need for such inspections. The evaluation shall 
include the following:
    (1) The quality assurance already provided by other mandatory 
inspection systems;
    (2) The proposed suppliers' own quality control system;
    (3) Experience with the proposed suppliers;

[[Page 227]]

    (4) The feasibility of prequalifying suppliers' quality assurance 
systems and subsequently waiving certifications for future 
solicitations; and
    (5) The cost of the inspections.
    (c) When either the USDA or the Department of Commerce is indicated 
as the inspection activity, the solicitation will also provide that the 
contractor is responsible for:
    (1) Arranging and paying for inspection services.
    (2) Obtaining from the inspection activity a certificate indicating 
the product complies with specifications. Such certificate, or copy, 
should accompany the shipment or be furnished to the receiving 
installation prior to shipment. The contractor shall notify the 
installation when the certificate is not immediately available.
    (3) Seeing that acceptable products are covered by an inspection 
agency checkloading certificate or stamped by the inspector as 
prescribed by the contracting officer. Products not so identified shall 
be rejected.
    (4) Furnishing samples for inspection at his/her expense.
    (5) Indicating the address where inspection will be made.
    (d) The contracting officer will furnish a copy of the purchase 
document to the inspecting activity.

[49 FR 12625, Mar. 29, 1984, as amended at 51 FR 37027, Oct. 17, 1986; 
54 FR 40065, Sept. 29, 1989; 63 FR 69222, Dec. 16, 1998]



Sec. 846.408-71  Waiver of USDA inspection and specifications.

    (a) Contracting officers may purchase butter; cheese (except cottage 
cheese); sausage; meat food products; \1\ bacon, smoked; and bacon, 
Canadian style, without reference to the specifications in Part IV of 
the Federal Supply Catalog, Stock List, FSC Group 89, Subsistence, 
Publication No. C900-SL, and the USDA inspection requirements, when the 
amount of an item to be purchased will not exceed 500 pounds per 
delivery. When these items are procured together with items that are not 
exempt, the solicitation shall include the following:
---------------------------------------------------------------------------

    \1\ Meat food products shall mean processed foods containing meat in 
substantial proportion and other listed ingredients including seasoning, 
e.g., frankfurters, coldcuts. Whole or prefabricated meats, e.g., pork 
chops, hamburger, are considered meats, not meat food products.

    Items * * * are not required to be in accordance with the 
specifications contained in Part IV of the Federal Supply Catalog, Stock 
List, FSC Group 89, Subsistence, Publication No. C900-SL, and the 
special USDA inspection is not required. Inspection for quality and 
condition will be made by VA upon delivery at destination. These items 
---------------------------------------------------------------------------
are, however, subject to the quality controls stated herein.

    (b) As appropriate, the following statements shall be included in 
each invitation for bid, request for proposal or purchase order:
    (1) Butter. This product must be graded by the USDA and labeled 
``Grade A'' or the grade specified herein.
    (2) Sausage and meat food products:
    (i) This product must be a high commercial product and shall have 
been prepared in a federally inspected plant and bear the USDA 
establishment number stamp which evidences that it is sound, healthful, 
wholesome and fit for human consumption; and
    (ii) This product must bear a label complying with the Federal Food, 
Drug and Cosmetic Act which requires that all ingredients be listed 
according to the order of their predominance.
    (3) Bacon, smoked; and bacon, Canadian style. This product must be a 
high commercial product and shall have been prepared in a federally 
inspected plant and bear the USDA establishment number stamp which 
evidences that it is sound, healthful, wholesome, and fit for human 
consumption.
    (c) When using a ``brand name or equal'' purchase description every 
brand name item that is known to be acceptable and available in the area 
will be listed.

[49 FR 12625, Mar. 29, 1984, as amended at 51 FR 37028, Oct. 17, 1986; 
63 FR 69222, Dec. 16, 1998]



Sec. 846.470  Use of commercial organizations for inspections and 

grading services.

    Commercial organizations may be used for inspection and grading 
services when it is determined that the results of a technical 
inspection or grading are dependent upon the application

[[Page 228]]

of scientific principles or specialized techniques, and it is further 
determined that:
    (a) The Department of Veterans Affairs is unable to employ the 
personnel qualified to properly perform the services and is unable to 
locate another Federal agency capable of providing the service.
    (b) The inspection or grading results issued by a private 
organization are essential to verify the acceptance or rejection of a 
special commodity.
    (c) The services may be performed without direct Government 
supervision.

[49 FR 12625, Mar. 29, 1984, as amended at 54 FR 40065, Sept. 29, 1989]



Sec. 846.471  Determination authority.

    The determinations required in 846.470 will be made by:
    (a) The Chief Facilities Management Officer, Office of Facilities 
Management, for those items and services for which purchase authority 
has been assigned to him/her.
    (b) The Director, Veterans Canteen Service, for those items and 
services purchased, or contracted for, by the Veterans Canteen Service 
(except those items purchased from Department of Veterans Affairs supply 
sources).
    (c) The Deputy Assistant Secretary for Acquisition and Materiel 
Management for all other supplies, equipment and services.

[49 FR 12625, Mar. 29, 1984, as amended at 63 FR 69222, Dec. 16, 1998]



Sec. 846.472  Inspection of repairs for properties under the Loan 

Guaranty and Direct Loan Programs.

    Final inspection will be made of all repair programs upon 
completion. In addition such intermediate or progress inspections will 
be made on extensive or technical jobs as specified in the contract.



Sec. 846.472-1  Repairs of $1,000 or less.

    (a) Generally, inspections required will be made by the management 
broker. If the property has not been assigned to a management broker or 
if it has been determined that the nature of the repairs requires 
supervision by a technician, the inspection will be made by a qualified 
fee or staff inspector.
    (b) There is no form prescribed for this inspection but VA Form 26-
1839, Compliance Inspection Report, may be used if desired. Regardless 
of the form in which the report is submitted, it will be in sufficient 
detail to identify the contractor, property, and the repair program and 
to enable the contracting officer to make a determination that the work 
is being performed satisfactorily or completed in accordance with the 
terms of the contract.



Sec. 846.472-2  Repairs in excess of $1,000.

    (a) The final inspection and any intermediate or progress 
inspections on repairs exceeding $1,000 will be made by a qualified fee 
or staff inspector. If a management broker is qualified to supervise 
major repairs, he/she may be authorized to conduct the inspections.
    (b) Report of inspections will be made on VA Form 26-1839, 
Compliance Inspection Report. The form will be completed to identify the 
property, contractor, and repair program and will also include such 
detailed information to enable the contracting officer to make a 
determination that the work is being performed satisfactorily or that it 
has been completed in accordance with the contract terms. Any 
deficiencies noted will be itemized and explained in detail.

                        Subpart 846.7_Warranties

    Source: 67 FR 49260, July 30, 2002, unless otherwise noted.



Sec. 846.710  Construction contracts.

    Contracting officers shall insert the FAR clause at 52.246-21, 
Warranty of Construction, in solicitations and contracts for 
construction that are expected to exceed the micro-purchase threshold.



Sec. 846.710-70  Special warranties.

    The contracting officer shall insert the clause at 852.246-1, 
Special warranties, in solicitations and contracts for construction that 
include the FAR clause at 52.246-21, Warranty for Construction.

[[Page 229]]



Sec. 846.710-71  Warranty for construction--guarantee period services.

    The contracting office shall insert the clause at 852.246-2, 
Warranty for construction'guarantee period services, in solicitations 
and contracts for construction that include the FAR clause at 52.246-21, 
Warranty for Construction, and also include guarantee period services.

                         PART 847_TRANSPORTATION

            Subpart 847.3_Transportation in Supply Contracts

Sec.

Sec. 847.303-1 F.o.b. origin.

Sec. 847.303-70 F.o.b. origin, freight prepaid, transportation charges 
          to be included on the invoice.

Sec. 847.304 Determination of delivery terms.

Sec. 847.304-1 General.

Sec. 847.305-70 Potential destinations known but quantities unknown.

    Authority: 38 U.S.C. 501 and 40 U.S.C. 486(c).

    Source: 49 FR 12627, Mar. 29, 1984, unless otherwise noted.

            Subpart 847.3_Transportation in Supply Contracts



Sec. 847.303-1  F.o.b. origin.

    (a) Normally shipments falling within this category will be shipped 
on a Government bill of lading, except for those shipments covered by 41 
CFR 101-41.304-2.
    (b) Shipment of flat bronze markers by the vendor, as directed by 
the Chief, Centralized Contracting Division, or his/her designee, will 
be made by parcel post. VA Form 40-4952, Order for Headstone or Marker, 
will be used for this purpose.

[49 FR 12627, Mar. 29, 1984, as amended at 63 FR 69222, Dec. 16, 1998]



Sec. 847.303-70  F.o.b. origin, freight prepaid, transportation charges 

to be included on the invoice.

    (a) The delivery terms will be stated as ``f.o.b. origin, 
transportation prepaid, with transportation charges to be included on 
the invoice,'' under each of the following circumstances:
    (1) When it has been carefully determined that an f.o.b. origin 
purchase or delivery order will have transportation charges not in 
excess of $100 and the occasional exception does not exceed that amount 
by an unreasonable amount;
    (2) Single parcel shipments via express, courier, small package, or 
similar carriers, regardless of shipping cost, if the parcel shipped 
weighs 70 pounds or less and does not exceed 108 inches in length and 
girth combined;
    (3) Multi-parcel shipments via express, courier small package, or 
similar carriers for which transportation charges do not exceed $250 per 
shipment.
    (b) Orders issued on VA Form 90-2138, Orders for Supplies or 
Services, will direct the vendor's attention to shipping instructions on 
the reverse of the form. When VA Form 90-2138 is not used, the vendor 
will be instructed as follows:
    (1) Consistent with the terms of the contract, pack, mark and 
prepare shipment in conformance with carrier requirements to protect the 
personal property and assure assessment of the lowest applicable 
transportation charge.
    (2) Add transportation charges as a separate item on your invoice. 
The invoice must bear the following certification: ``The invoiced 
transportation charges have been paid and evidence of such payment will 
be furnished upon the Government's request.''
    (3) Do not include charges for insurance or valuation on the invoice 
unless the order specifically requires that the shipment be insured or 
the value be declared.
    (4) Do not prepay transportation charges on this order if such 
charges are expected to exceed $100. Ship collect and annotate the 
commercial bill of lading, ``To be converted to Government Bill of 
Lading.''
    (c) Each contracting officer is responsible for:
    (1) Making a diligent effort to obtain the most accurate estimate 
possible of transportation charges; and
    (2) Utilizing the authority in paragraph (a) of this section only 
when consistent with the circumstances in that paragraph.
    (d) When in accordance with FAR Subpart 28.3 and FAR 47.102 it is 
determined that a shipment is to be insured

[[Page 230]]

or the value declared, the vendor will be specifically instructed to do 
so on the order, when a written order is used. If the order is an oral 
order, all copies of the purchase request will be annotated to show that 
insurance/declared value was specifically requested.



Sec. 847.304  Determination of delivery terms.



Sec. 847.304-1  General.

    When alternative delivery terms are appropriate but the contracting 
officer elects to use only one in the invitation for bids, or request 
for proposals, he shall document the contract file to show his reasons 
for so doing.



Sec. 847.305-70  Potential destinations known but quantities unknown.

    When the VA National Acquisition Center contracts for decentralized 
procured items by all Department of Veterans Affairs installations, the 
evaluation of bids must follow specific procedures. To place each bid on 
an equal basis, even though specific quantities required by each 
hospital cannot be predetermined, an anticipated demand factor will be 
used in proportion to the number of hospital beds or patient workload. 
The clause prescribed in 852.247-70 shall be used in these instances.

[49 FR 12627, Mar. 29, 1984, as amended at 63 FR 69222, Dec. 16, 1998]

                    PART 849_TERMINATION OF CONTRACTS

                    Subpart 849.1_General Principles

Sec.

Sec. 849.106 Fraud or other criminal conduct.

Sec. 849.107 Audit of prime contract settlement proposals and 
          subcontract settlements.

Sec. 849.111 Review and approval of proposed settlements.

Sec. 849.111-70 Settlement review boards.

Sec. 849.111-71 Required review and approval.

Sec. 849.111-72 Submission of information.

                  Subpart 849.4_Termination for Default


Sec. 849.402 Termination of fixed-price contracts for default.

Sec. 849.402-6 Repurchase against contractor's account.

    Authority: 38 U.S.C. 501 and 40 U.S.C. 486(c).

    Source: 49 FR 12628, Mar. 29, 1984, unless otherwise noted.

                    Subpart 849.1_General Principles



Sec. 849.106  Fraud or other criminal conduct.

    When the circumstances set forth in FAR 49.106 are encountered, the 
contracting officer will immediately discontinue all negotiations. The 
contracting officer will submit all of the pertinent facts necessary to 
support his/her reasoning to the Deputy Assistant Secretary for 
Acquisition and Materiel Management (95), (or the Chief Facilities 
Management Officer (08) in the case of contracting officers from the 
Office of Facilities Management). The Deputy Assistant Secretary for 
Acquisition and Materiel Management (95), or the Chief Facilities 
Management Officer, Office of Facilities Management, will review the 
submission and fully develop the facts. If the evidence indicates fraud 
or other criminal conduct, the Deputy Assistant Secretary for 
Acquisition and Materiel Management or the Chief of Facilities 
Management Officer, Office of Facilities Management, will forward the 
submission with his/her recommendations, through channels (to include 
the General Counsel, if appropriate), to the Inspector General (51) for 
referral to the Department of Justice. The contracting officer will be 
advised by the Deputy Assistant Secretary for Acquisition and Materiel 
Management or the Chief Facilities Management Officer, Office of 
Facilities Management, as to any further action to be taken. Pending 
receipt of this advice, the matter will not be discussed with the 
contractor. No collection, recovery or other settlement action will be 
initiated while the matter is in the hands of the Department of Justice 
without first obtaining the concurrence of the U.S. Attorney concerned, 
through the Inspector General. If inquiry is made by the contractor, he/
she will be advised only that the proposal has been forwarded to higher 
authority.

[49 FR 12627, Mar. 29, 1984, as amended at 63 FR 69222, Dec. 16, 1998]

[[Page 231]]



Sec. 849.107  Audit of prime contract settlement proposals and 

subcontract settlements.

    Contracting officers will submit settlement proposals for review and 
audit prior to taking any further action, in accordance with the 
provisions and claim limitations applicable to prime and subcontractors 
as set forth in FAR 49.107. Contracting officers in the Office of 
Acquisition and Materiel Management and Office of Facilities Management 
who are located in the VA Central Office have the option to request 
audits directly from the cognizant audit agencies or to request audits 
through the Assistant Inspector General, Office of Departmental Reviews 
and Management Support (53C). All other contracting officers located in 
the VA Central Office and the Office of the General Counsel will send 
requests for audit to the Assistant Inspector General, Office of 
Departmental Reviews and Management Support (53C), to request audits 
directly from the cognizant agencies. Audit control numbers may be 
obtained verbally from the Deputy Assistant Secretary for Acquisition 
and Materiel Management (95).

[49 FR 12628, Mar. 29, 1984, as amended at 52 FR 42440, Nov. 5, 1987; 54 
FR 40065, Sept. 29, 1989; 63 FR 69223, Dec. 16, 1998]



Sec. 849.111  Review and approval of proposed settlements.



Sec. 849.111-70  Settlement review boards.

    The Deputy Assistant Secretary for Acquisition and Materiel 
Management and the Chief Facilities Management Officer will each 
establish within his/her own organization a settlement review board. The 
board may be established on a permanent or temporary basis. More than 
one such board may be established if settlements are to be made at 
different locations, if personnel with different qualifications are 
needed for different contracts, or if for other reasons, the 
establishment of more than one board is considered desirable. Each 
settlement review board should be composed of at least three qualified 
and disinterested employees. The membership of each board should include 
at least one lawyer and one accountant.

[49 FR 12628, Mar. 29, 1984, as amended at 63 FR 69223, Dec. 16, 1998]



Sec. 849.111-71  Required review and approval.

    Prior to executing a settlement agreement, or issuing a 
determination of the amount due under the termination clause of a 
contract, or approving or ratifying a subcontract settlement, the 
contracting officer shall submit each such settlement or determination 
for review and approval by a settlement review board if:
    (a) The amount of settlement, by agreement or determination, 
involves $50,000 or more; or
    (b) The settlement or determination is limited to adjustment of the 
fee of a cost-reimbursement contract or subcontract, and:
    (1) In the case of a complete termination, the fee, as adjusted, is 
$50,000 or more; or
    (2) In the case of a partial termination, the fee, as adjusted, with 
respect to the terminated portion of the contract or subcontract is 
$50,000 or more; or
    (c) The head of the contracting activity concerned determines that a 
review of a specific case or class of cases is desirable; or
    (d) The contracting officer, in his/her discretion, desires review 
by the settlement review board.



Sec. 849.111-72  Submission of information.

    (a) The contracting officer shall submit to the appropriate 
settlement review board a statement of the proposed settlement agreement 
or determination, supported by such detailed information as is required 
for an adequate review. This information should normally include copies 
of:
    (1) The contractor's or subcontractor's settlement proposal,
    (2) The audit report,
    (3) The property disposal report and any required approvals in 
connection therewith,
    (4) The contracting officer's memorandum explaining the settlement, 
and
    (5) Any other relevant material that will assist the board in 
arriving at a decision to approve or disapprove the

[[Page 232]]

proposal. The board may, in its discretion, require the submission of 
additional information.
    (b) When a review of a proposed settlement is required and the 
contract covers supplies, equipment or services, other than construction 
chargeable to Construction Appropriations, the contracting officer will 
submit the proposed settlement or determination to the settlement review 
board through the Deputy Assistant Secretary for Acquisition and 
Materiel Management.
    (c) When the contract covers construction chargeable to Construction 
Appropriations and review is required, the proposed settlement or 
determination will be submitted by the contracting officer to the 
settlement review board through the Chief Facilities Management Officer.

[49 FR 12628, Mar. 29, 1984, as amended at 63 FR 69223, Dec. 16, 1998]

                  Subpart 849.4_Termination for Default



Sec. 849.402  Termination of fixed-price contracts for default.



Sec. 849.402-6  Repurchase against contractor's account.

    (a) VA Form 90-2237, Request, Turn-in, and Receipt for Property or 
Services, or the file copy of the purchase order covering the purchase 
of supplies, equipment or services against a defaulting contractor shall 
be annotated to show the name of the defaulted contractor, the contract 
number, the contract price, the name of the contractor from whom 
procurement is made, the price paid, the competition secured and the 
difference in cost, if any, to the Department of Veterans Affairs. When 
reprocurement results in the payment of excess costs and the purchase is 
made through the Supply Fund, the excess costs, when collected, shall be 
deposited to the credit of the Supply Fund. In all other instances, the 
excess costs, when collected, shall be deposited to General Fund 
Receipts.
    (b) Contracting officers, when purchasing against a defaulted 
contractor, shall procure the items in a manner that will protect the 
interests of the contractor as well those of the Government.

[[Page 233]]

                     SUBCHAPTER H_CLAUSES AND FORMS

          PART 852_SOLICITATION PROVISIONS AND CONTRACT CLAUSES

       Subpart 852.1_Instructions for Using Provisions and Clauses

Sec.

Sec. 852.101 Using Part 852.

Sec. 852.102 Incorporating provisions and clauses by reference.

              Subpart 852.2_Texts of Provisions and Clauses


Sec. 852.203-71 Display of VA hotline poster.

Sec. 852.207-70 Report of employment under commercial activities.

Sec. 852.209-70 Organizational conflicts of interest.

Sec. 852.211-70 Requirements for operating and maintenance manuals.

Sec. 852.211-71 Guarantee clause.

Sec. 852.211-72 Inspection.

Sec. 852.211-73 Frozen processed foods.

Sec. 852.211-74 Telecommunications equipment.

Sec. 852.211-75 Technical industry standards.

Sec. 852.211-76 Noncompliance with packaging, packing and/or marking 
          requirements.

Sec. 852.211-77 Brand name or equal.

Sec. 852.211-78 Liquidated damages.

Sec. 852.214-70 Caution to bidders--bid envelopes.

Sec. 852.214-71 Alternate items.

Sec. 852.214-73 Bid samples.

Sec. 852.216-70 Estimated quantities for requirements contracts.

Sec. 852.219-70 Veteran-owned small business.

Sec. 852.222-70 Contract Work Hours and Safety Standards Act--nursing 
          home care contract supplement.

Sec. 852.228-70 Bond premium adjustment.

Sec. 852.229-70 Purchases from patient's funds.

Sec. 852.229-71 Purchases for patients using Government funds and/or 
          personal funds of patients.

Sec. 852.233-70 Protest content.

Sec. 852.233-71 Alternate Protest Procedure.

Sec. 852.236-71 Specifications and drawings for construction.

Sec. 852.236-72 Performance of work by the contractor.

Sec. 852.236-74 Inspection of construction.

Sec. 852.236-76 Correspondence.

Sec. 852.236-77 Reference to ``standards''.

Sec. 852.236-78 Government supervision.

Sec. 852.236-79 Daily report of workers and materials.

Sec. 852.236-80 Subcontracts and work coordination.

Sec. 852.236-81 Work coordination (alternate provision).

Sec. 852.236-82 Payments under fixed-price construction contracts 
          (without NAS).

Sec. 852.236-83 Payments under fixed-price construction contracts 
          (including NAS).

Sec. 852.236-84 Schedule of work progress.

Sec. 852.236-85 Supplementary labor standards provisions.

Sec. 852.236-86 Worker's compensation.

Sec. 852.236-87 Accident prevention.

Sec. 852.236-88 Contract changes--supplement.

Sec. 852.236-89 Buy American Act.

Sec. 852.236-90 Restriction on submission and use of equal products.

Sec. 852.236-91 Special notes.

Sec. 852.237-7 Indemnification and Medical Liability Insurance.

Sec. 852.237-70 Contractor responsibilities.

Sec. 852.237-71 Indemnification and insurance (vehicle and aircraft 
          service contracts).

Sec. 852.246-1 Special warranties.

Sec. 852.246-2 Warranty for construction--guarantee period services.

Sec. 852.247-70 Transportation provision for bid evaluation.

Sec. 852.252-1 Provisions or clauses requiring completion by the offeror 
          or prospective contractor.

Sec. 852.270-1 Representatives of contracting officers.

Sec. 852.270-2 Bread and bakery products.

Sec. 852.270-3 Purchase of shellfish.

Sec. 852.270-4 Commercial advertising.

Sec. 852.271-70 Services provided eligible beneficiaries.

Sec. 852.271-71 Visits to Department of Veterans Affairs guidance 
          centers.

Sec. 852.271-72 Time spent by counselee in counseling process.

Sec. 852.271-73 Use and publication of counseling results.

Sec. 852.271-74 Inspection.

Sec. 852.271-75 Extension of contract period.

Sec. 852.273-70 Late offers.

Sec. 852.273-71 Alternative negotiation techniques.

Sec. 852.273-72 Alternative evaluation.

Sec. 852.273-73 Evaluation--health-care resources.

Sec. 852.273-74 Award without exchanges.

    Authority: 38 U.S.C. 501; 40 U.S.C. 486(c)

[[Page 234]]

       Subpart 852.1_Instructions for Using Provisions and Clauses



Sec. 852.101  Using Part 852.

    Part 852 prescribes supplemental provisions and clauses to the FAR. 
Provision and clause numbering are as prescribed in FAR 52.101 (e.g, 
supplementary Architect-Engineer and Construction clauses are numbered 
852.236-70, 852.236-71, etc.).

[50 FR 794, Jan. 7, 1985]



Sec. 852.102  Incorporating provisions and clauses by reference.

    (a) As authorized by FAR 52.102(c), any 48 CFR chapter 8 (VAAR) 
provision or clause may be incorporated in a quotation, solicitation, or 
contract by reference, provided the contracting officer complies with 
the requirements stated in FAR 52.102(c)(1), (c)(2), and (c)(3). To 
ensure compliance with FAR 52.102(c)(1) and (c)(2), the contracting 
officer shall insert the provision found at 852.252-1, Provisions or 
clauses requiring completion by the offeror or prospective contractor, 
in full text in a quotation, solicitation, or contract if the quotation, 
solicitation, or contract incorporates by reference a FAR or 48 CFR 
chapter 8 (VAAR) provision or clause that requires completion by the 
offeror or prospective contractor and submittal with the quotation or 
offer.
    (b) For any FAR or 48 CFR chapter 8 (VAAR) provision or clause that 
requires completion by the contracting officer, the contracting officer 
shall, as a minimum, insert in the quotation, solicitation, or contract 
the title of the provision or clause and the full text of the paragraph 
that requires completion. The balance of the provision or clause may be 
incorporated by reference.
    (c) If one or more FAR or 48 CFR chapter 8 (VAAR) provisions, or 
portions thereof, are incorporated in a quotation or solicitation by 
reference, the contracting officer shall insert in the quotation or 
solicitation the provision found at FAR 52.252-1, Solicitation 
Provisions Incorporated by Reference.
    (d) If one or more FAR or 48 CFR chapter 8 (VAAR) clauses, or 
portions thereof, are incorporated in a quotation, solicitation, or 
contract by reference, the contracting officer shall insert in the 
quotation, solicitation, or contract the clause found at FAR 52.252-2, 
Clauses Incorporated by Reference.
    (e) If one or more FAR provisions or clauses, or portions thereof, 
are incorporated in a quotation, solicitation, or contract by reference, 
the contracting officer shall insert in the FAR provision or clause 
required by paragraph (c) or (d) of this section the following Internet 
address: http://www.arnet.gov/far/.
    (f) If one or more 48 CFR chapter 8 (VAAR) provisions or clauses, or 
portions thereof, are incorporated in a quotation, solicitation, or 
contract by reference, the contracting officer shall insert in the FAR 
provision or clause required by paragraph (c) or (d) of this section the 
following Internet address: http://www.va.gov/oa&mm/vaar/.

[64 FR 69935, Dec. 15, 1999]

              Subpart 852.2_Texts of Provisions and Clauses



Sec. 852.203-71  Display of VA hotline poster.

    As prescribed in 803.7002, insert the following clause:

                      Display of VA Hotline Poster

    (a) Except as provided in paragraph (c) below, the Contractor shall 
display prominently in common work areas within business segments 
performing work under VA contracts, VA Hotline posters prepared by the 
VA Office of Inspector General.
    (b) VA Hotline posters may be obtained from the VA Office of 
Inspector General (53E), P.O. Box 34647, Washington, DC 20043-4647.
    (c) The Contractor need not comply with paragraph (a) above, if the 
Contractor has established a mechanism, such as a hotline, by which 
employees may report suspected instances of improper conduct, and 
instructions that encourage employees to make such reports.

                             (End of clause)

[57 FR 58718, Dec. 11, 1992, as amended at 63 FR 69223, Dec. 16, 1998]



Sec. 852.207-70  Report of employment under commercial activities.

    As prescribed in 807.304-77 and 873.110, the following clause must 
be included

[[Page 235]]

in A-76 cost comparison solicitations and solicitations issued under the 
authority of 38 U.S.C. 8151-8153 which may result in the conversion, 
from in-house to contract performance, of work currently being performed 
by VA employees:

       Report of Employment Under Commercial Activities (OCT 1988)

    (a) Consistent with the Government post-employment conflict of 
interest regulations, the contractor shall give adversely affected 
Federal employees the right of first refusal for all employment openings 
under this contract for which they are qualified.
    (b) Definitions. (1) An ``adversely affected Federal employee'' is:
    (i) Any permanent Federal employee who is assigned to the government 
commercial activity, or
    (ii) Any employee identified for release from his or her competitive 
level or separated as a result of the contract.
    (2) ``Employment openings'' are position vacancies created by this 
contract which the contractor is unable to fill with personnel in the 
contractor's employee at the time of the contract award, including 
positions within a 50 mile radius of the commercial activity which 
indirectly arise in the contractor's organization as a result of the 
contractor's reassignment of employees due to the award of this 
contract.
    (3) The ``contract start date'' is the first day of contractor 
performance.
    (c) Filling employment openings. (1) For a period beginning with 
contract award and ending 90 days after the contract start date, no 
person other than an adversely affected Federal employee on the current 
listing provided by the contracting officer shall be offered an 
employment opening until all adversely affected and qualified Federal 
employees identified by the contracting officer have been offered the 
job and refused it.
    (2) The contractor may select any person for an employment opening 
when there are no qualified adversely affected Federal employees on the 
latest current listing provided by the contracting officer.
    (d) Contracting reporting requirements. (1) No later than five 
working days after contract award the contractor shall furnish the 
contracting officer with the following:
    (i) A list of employment openings including salaries and benefits,
    (ii) Sufficient job application forms for adversely affected Federal 
employees.
    (2) By contract start date, the contractor shall provide the 
contracting officer with the following:
    (i) The names of adversely affected Federal employees offered an 
employment opening,
    (ii) The date the offer was made,
    (iii) A brief description of the position,
    (iv) The date of acceptance of the offer and the effective date of 
employment,
    (v) The date of rejection of the offer, if applicable for salary and 
benefits contained in the rejected offer, and
    (vi) The names of any adversely affected Federal employees who 
applied but were not offered employment and the reason(s) for 
withholding an offer.
    (3) For the first 90 days after the contract start date, the 
contractor shall provide the contracting officer with the names of all 
persons hired or terminated under the contract within five working days 
of such hiring or termination.
    (e) Information provided to the contractor. (1) No later than 10 
working days after the contract award, the contracting officer shall 
furnish the contractor a current list of adversely affected Federal 
employees exercising the right of first refusal, along with their 
completed job application forms.
    (2) Between the contract award and start dates, the contracting 
officer shall inform the contractor of any reassignment or transfer of 
adversely affected employees to other Federal positions.
    (3) For a period up to 90 days after contract start date, the 
contracting officer will periodically provide the contractor with an 
updated listing of adversely affected Federal employees reflecting 
employees recently released from their competitive levels or separated 
as a result of the contract award.
    (f) Qualification determination. The contractor has a right under 
this clause to determine adequacy of the qualifications of adversely 
affected Federal employees for any employment openings. However, an 
adversely affected Federal employee who held a job in the Government 
commercial activity which directly corresponds to an employment opening 
shall be considered qualified for the job. Questions concerning the 
qualifications of adversely affected Federal employees for specific 
employment openings shall be referred to the contracting officer for 
determination. The contracting officer's determination shall be final 
and binding on all parties.
    (g) Relation to other statutes, regulations and employment policies. 
The requirements of this clause shall not modify or alter the 
contractor's responsibilities under statutes, regulations or other 
contract clauses pertaining to the hiring of veterans, minorities or 
handicapped persons.
    (h) Penalty for Noncompliance. Failure of the contractor to comply 
with any provision of this clause may be grounds for termination for 
default.

                             (End of clause)

[53 FR 43211, Oct. 26, 1988; 53 FR 46872, Nov. 21, 1988, as amended at 
68 FR 3469, Jan. 24, 2003]

[[Page 236]]



Sec. 852.209-70  Organizational conflicts of interest.

    The following provision will be used as prescribed in 809.508-2:

             Organizational Conflicts of Interest (APR 1984)

    (a) The offeror represents to the best of his/her knowledge and 
belief that the award of the contract would not involve organizational 
conflicts of interest as defined in this representation. The term 
organizational conflicts of interests shall mean that a relationship 
exists whereby an offeror or a contractor (including his/her chief 
executive, directors, proposed consultants and subcontractors) has 
interests which may: (1) Diminish his/her capacity to give impartial, 
technically sound, objective assistance and advice or may otherwise 
result in a biased work product; or (2) result in an unfair competitive 
advantage. It does not include the ``normal flow of benefits'' from the 
performance of a contract.
    (b) Based on this representation and any other information solicited 
by the contracting officer, it may be determined organizational 
conflicts of interest exist which would warrant disqualifying the 
contractor for award of the contract unless the organizational conflicts 
of interest can be mitigated to the contracting officer's satisfaction 
by negotiating terms and conditions of the contract to that effect. In 
the case of a formally advertised solicitation, the apparent successful 
offeror may enter into a supplemental agreement which mitigates the 
organizational conflicts of interest.
    (c) Nondisclosure or misrepresentations of organizational conflicts 
of interest at the time of the offer, or arising as a result of a 
modification to the contract, may result in the termination of the 
contract at no expense to the Government.

                           (End of provision)

[49 FR 12629, Mar. 29, 1984, as amended at 50 FR 794, Jan. 7, 1985]



Sec. 852.211-70  Requirements for operating and maintenance manuals.

    (a) Solicitations and requests for proposals for technical medical 
and other technical equipment and devices issued by a field facility 
will normally require the contractor to provide operating and 
maintenance manuals.
    (b) The purpose of the requirement is for the manufacturer to 
provide the Department of Veterans Affairs a manual or groups of manuals 
that will allow the in-house repair of the equipment purchased. Unless 
the facility Chief, Engineering Service, indicates that such service 
manuals are not needed, each invitation for bid or request for proposal 
for technical medical or other technical equipment and devices will 
include the following clauses for operating and maintenance manuals:

                     Service Data Manual (NOV 1984)

    (a) The successful bidder will supply operation/service 
(maintenance) manuals with each piece of equipment in the quantity 
specified in the solicitation and resulting purchase order. As a 
minimum, the manual(s) shall be bound and equivalent to the manual(s) 
provided the manufacturer's designated field service representative as 
well as comply with all the requirements in paragraphs (b) through (i) 
of this clause. Sections, headings and section sequence identified in 
(b) through (i) of this clause are typical and may vary between 
manufacturers. Variances in the sections, headings and section sequence, 
however, do not relieve the manufacturer of his responsibility in 
supplying the technical data called for therein.
    (b) Title Page and Front Matter--The title page shall include the 
equipment nomenclature, model number, effective date of the manual and 
the manufacturer's name and address. If the manual applies to a 
particular version of the equipment only, the title page shall also list 
that equipment's serial number. Front matter shall consist of the Table 
of Contents, List of Tables, List of Illustrations and a frontispiece 
(photograph or line drawing) depicting the equipment.
    (c) Section I, General Description--This section shall provide a 
generalized description of the equipment or devices and shall describe 
its purpose or intended use. Included in this section will be a table 
listing all pertinent equipment specifications, power requirements, 
environmental limitations and physical dimensions.
    (d) Section II, Installation--Section II shall provide pertinent 
installation information. It shall list all input and output connectors 
using applicable reference designators and functional names as they 
appear on the equipment. Included in this listing will be a brief 
description of the function of each connector along with the connector 
type. Instructions shall be provided as to the recommended method of 
repacking the equipment for shipment (packing material, labeling, etc.).
    (e) Section III, Operation--Section III will fully describe the 
operation of the equipment and shall include a listing of each control 
with a brief description of its function and step-by-step procedures for 
each operating

[[Page 237]]

mode. Procedures will use the control(s) nomenclature as it appears on 
the equipment and will be keyed to one or more illustrations of the 
equipment. Operating procedures will include any preoperational checks, 
calibration adjustments and operation tests. Notes, cautions and 
warnings shall be set off from the text body so they may easily be 
recognizable and will draw the attention of the reader. Illustrations 
should be used wherever possible depicting equipment connections for 
test, calibration, patient monitoring and measurements. For large, 
complex and/or highly versatile equipment capable of many operating 
modes and in other instances where the Operation Section is quite large, 
operational information may be bound separately in the form of an 
Operators Manual. The providing of a separate Operators Manual does not 
relieve the supplier of his responsibility for providing the minimum 
acceptable maintenance data specified herein.
    Where applicable, flow charts and narrative descriptions of software 
shall be provided. If programming is either built-in and/or user 
modifiable, a complete software listing shall be supplied. Equipment 
items with software packages shall also include diagnostic routines and 
sample outputs. Submission information shall be given in the Maintenance 
Section to identify equipment malfunctions which are software related.
    (f) Section IV, Principles of Operation--This section shall describe 
in narrative form the principles of operation of the equipment. 
Circuitry shall be discussed in sufficient detail to be understood by 
technicians and engineers who possess a working knowledge of electronics 
and a general familiarity with the overall application of the devices. 
The circuit descriptions should start at the overall equipment level and 
proceed to more detailed circuit descriptions. The overall description 
shall be keyed to a functional block diagram of the equipment. Circuit 
descriptions shall be keyed to schematic diagrams discussed in paragraph 
(i) below. It is recommended that for complex or special circuits, 
simplified schematics should be included in this section.
    (g) Section V, Maintenance--The maintenance section shall contain a 
list of recommended test equipment, special tools, preventive 
maintenance instructions and corrective information. The list of test 
equipment shall be that recommended by the manufacturer and shall be 
designated by manufacturer and model number. Special tools are those 
items not commercially available or those that are designed specifically 
for the equipment being supplied. Sufficent data will be provided to 
enable their purchase by the Department of Veterans Affairs. Preventive 
maintenance instructions shall consist of those recommended by the 
manufacturer to preclude unnecessary failures. Procedures and the 
recommended frequency of performance shall be included for visual 
inspection, cleaning, lubricating, mechanical adjustments and circuit 
calibration. Corrective maintenance shall consist of the data necessary 
to troubleshoot and rectify a problem and shall include procedures for 
realigning and testing the equipment. Troubleshooting shall include 
either a list of test points with the applicable voltage levels or 
waveforms that would be present under a certain prescribed set of 
conditions, a troubleshooting chart listing the symptom, probable cause 
and remedy, or a narrative containing sufficient data to enable a test 
technician or electronics engineer to determine and locate the probable 
cause of malfunction. Data shall also be provided describing the 
preferred method of repairing or replacing discrete components mounted 
on printed circuit boards or located in areas where special steps must 
be followed to disassemble the equipment. Procedures shall be included 
to realign and test the equipment at the completion of repairs and to 
restore it to its original operating condition. These procedures shall 
be supported by the necessary waveforms and voltage levels, and data for 
selecting matched components. Diagrams, either photographic or line, 
shall show the location of printed circuit board mounted components.
    (h) Section VI, Replacement Parts List--The replacement parts list 
shall list, in alphanumeric order, all electrical/electronic, mechanical 
and pneumatic components, their description, value and tolerance, true 
manufacturer and manufacturers' part number.
    (i) Section VII, Drawings--Wiring and schematic diagrams shall be 
included. The drawings will depict the circuitry using standard symbols 
and shall include the reference designations and component values or 
type designators. Drawings shall be clear and legible and shall not be 
engineering or productions sketches.

                             (End of clause)

    (c) Solicitations and requests for proposals for mechanical 
equipment (other than technical medical equipment and devices) issued by 
a field facility will include the following clause:

                     Service Data Manual (NOV 1984)

    The contractor agrees to furnish two copies of a manual, handbook or 
brochure containing operating, installation, and maintenance 
instructions (including pictures or illustrations, schematics, and 
complete repair/test guides as necessary). Where applicable, it will 
include electrical data and connection diagrams for all utilities. The 
instructions

[[Page 238]]

shall also contain a complete list of all replaceable parts showing part 
number, name, and quantity required.

                             (End of clause)

    (d) When the bid or proposal will result in the initial purchase 
(including each make and model) of a centrally procured item, the 
following clause will be used:

                     Service Data Manual (NOV 1984)

    The contractor agrees, when requested by the contracting officer, to 
furnish not more than three copies of the technical documentation 
required by paragraph 852.211-70(a) to the Service and Reclamation 
Division, Hines, Ill. In addition, the contractor agrees to furnish two 
additional copies of the technical documentation required by 852.211-
70(a) above with each piece of equipment sold as a result of the 
invitation for bid or request for proposal.

                             (End of clause)

[50 FR 795, Jan. 7, 1985; 54 FR 40065, Sept. 29, 1989; 61 FR 11587, Mar. 
21, 1996. Redesignated at 63 FR 17338, Apr. 9, 1998, and amended at 63 
FR 69223, Dec. 16, 1998]



Sec. 852.211-71  Guarantee clause.

    (a) When the bid or proposal will result in any purchase of 
equipment, the following clause will be used:

                          Guarantee (NOV 1984)

    The contractor guarantees the equipment against defective material, 
workmanship and performance for a period of ------,\1\ said guarantee to 
run from date of acceptance of the equipment by the Government. The 
contractor agrees to furnish, without cost to the Government, 
replacement of all parts and material which are found to be defective 
during the guarantee period. Replacement of material and parts will be 
furnished to the Government at the point of installation, if 
installation is within the continental United States, or f.o.b. the 
continental U.S. port to be designated by the contracting officer if 
installation is outside of the continental United States. Cost of 
installation of replacement material and parts shall be borne by the 
contractor. \2\
---------------------------------------------------------------------------

    \1\ Normally, insert one year. If industry policy covers a shorter 
or longer period, i.e., 90 days or for the life of the equipment, insert 
such period.
    \2\ The above clause will be modified to conform to standards of the 
industry involved.
---------------------------------------------------------------------------

                             (End of clause)

    (b) Where it is industry policy to furnish, but not install, 
replacement material and parts at the contractor's expense, the last 
sentence will be changed to indicate that cost of installation shall be 
borne by the Government. Where it is industry policy to: (1) Guarantee 
components for the life of the equipment (i.e., crystals in transmitters 
and receivers in radio communications systems); or (2) require that 
highly technical equipment be returned to the factory (at contractor's 
or Government's expense) for replacement of defective materials or 
parts, the clause used will be compatible with such policy.

[49 FR 12629, Mar. 29, 1984, as amended at 50 FR 794, 796, Jan. 7, 1985. 
Redesignated at 63 FR 17338, Apr. 9, 1998]



Sec. 852.211-72  Inspection.

    (a) Contracts for property, other than packing house and dairy 
products and fresh and frozen fruits and vegetables will contain the 
following clause:

                        Rejected Goods (NOV 1984)

    Rejected goods will be held subject to contractor's order for not 
more than 15 days, after which the rejected merchandise will be returned 
to the contractor's address at his/her risk and expense. Expenses 
incident to the examination and testing of materials or supplies which 
have been rejected will be charged to the contractor's account.

                             (End of clause)

    (b) Contracts for packinghouse and dairy products, bread and bakery 
products and for fresh and frozen fruits and vegetables will contain the 
following clause:

                             Rejected Goods

    The contractor shall remove rejected supplies within 48 hours after 
notice of rejection. Supplies determined to be unfit for human 
consumption will not be removed without permission of the local health 
authorities. Supplies not removed within the allowed time may be 
destroyed. The Department of Veterans Affairs will not be responsible 
for nor pay for products rejected. The contractor will be liable for 
costs incident to examination of rejected products.

[[Page 239]]

                             (End of clause)

[49 FR 12629, Mar. 29, 1984, as amended at 50 FR 794, Jan. 7, 1985. 
Redesignated at 63 FR 17338, Apr. 9, 1998]



Sec. 852.211-73  Frozen processed foods.

    The following clause will be included in all solicitations for the 
purchase of frozen processed foods, issued by a field facility:

                    Frozen Processed Foods (NOV 1984)

    The products delivered under this contract shall be in excellent 
condition, shall not show evidence of defrosting, refreezing, or freezer 
burn and shall be transported and delivered to the consignee at a 
temperature of 0 degrees Fahrenheit or lower.

                             (End of clause)

[49 FR 12629, Mar. 29, 1984, as amended at 50 FR 794, 796, Jan. 7, 1985; 
54 FR 40065, Sept. 29, 1989. Redesignated at 63 FR 17338, Apr. 9, 1998]



Sec. 852.211-74  Telecommunications equipment.

    (a) When a detailed purchase description of formal specification is 
the basis for solicitations for telecommunications equipment as defined 
in VA Manual MP-6, Part VIII, (available at any Department of Veterans 
Affairs facility), solicitations, including those for construction, will 
include the following provision:

                        Special Notice (APR 1984)

    Descriptive literature. The submission of descriptive literature 
with offers is not required and voluntarily submitted descriptive 
literature which qualifies the offer will require rejection of the 
offer.
    However, within 5 days after award of contract, the contractor will 
submit to the contracting officer literature describing the equipment 
he/she intends to furnish and indicating strict compliance with the 
specification requirements.
    The contracting officer will, by written notice to the contractor 
within 20 calendar days after receipt of the literature, approve, 
conditionally approve, or disapprove the equipment proposed to be 
furnished. The notice of approval or conditional approval will not 
relieve the contractor from complying with all requirements of the 
specifications and all other terms and conditions of this contract. A 
notice of conditional approval will state any further action required of 
the contractor. A notice of disapproval will cite reasons therefor.
    If the equipment is disapproved by the Government, the contractor 
will be subject to action under the Default provision of this contract. 
However, prior to default action the contractor will be permitted a 
period (at least 10 days) under that clause to submit additional 
descriptive literature on equipment originally offered or descriptive 
literature on other equipment.
    The Government reserves the right to require an equitable adjustment 
of the contract price for any extension of the delivery schedule 
necessitated by additional descriptive literature evaluations.

                           (End of provision)

    (b) The descriptive literature to be furnished by the contractor 
after award in accordance with paragraph (a) of this section is subject 
to the controls established in 870.112(b).
    (c) The time of delivery or performance to be specified in the 
solicitation will include the time required for submission, receipt, the 
evaluation and approval required by 870.112(b) of this chapter, and 
return to the contractor of the descriptive literature.

[49 FR 12629, Mar. 29, 1984, as amended at 50 FR 794, 796, Jan. 7, 1985. 
Redesignated at 63 FR 17338, Apr. 9, 1998]



Sec. 852.211-75  Technical industry standards.

    When items are required to conform to technical industry standards, 
such as those adopted by Underwriter's Laboratories, Incorporated; 
Factory Mutual Laboratories; American Gas Association; American Society 
Mechanical Engineers; National Electrical Manufacturers' Association; 
American Society Heating, Refrigeration and Air Conditioning Engineers; 
or similar organizations where such standards are generally recognized 
and accepted in the industry involved, the invitation for bids, request 
for proposals or request for quotations will so state. In no instance, 
where there is a multiple choice of laboratories, shall the invitation 
for bid, request for proposal or request for quotation indicate that the 
label or certificate of only one such laboratory is acceptable. The 
following provision will be used unless comparable provisions are 
contained in the item specification:

[[Page 240]]

                 Technical Industry Standards (APR 1984)

    The supplies or equipment required by this invitation for bid or 
request for proposal must conform to the standards of the ------\3\ and 
------\3\ as to ------.\4\ The successful bidder or offeror will be 
required to submit proof that the item(s) he furnishes conforms to this 
requirement. This proof may be in the form of a label or seal affixed to 
the equipment or supplies, warranting that they have been tested in 
accordance with and conform to the specified standards. The seal or 
label of any nationally recognized laboratory such as those listed by 
the National Fire Protection Association, Boston, Massachusetts, in the 
current edition of their publication ``Research on Fire,'' is 
acceptable. Proof may also be furnished in the form of a certificate 
from one of these laboratories certifying that the item(s) furnished 
have been tested in accordance with and conform to the specified 
standards.
---------------------------------------------------------------------------

    \3\ Insert name(s) of organization(s), the standards of which are 
pertinent to the Government's needs.
    \4\ Insert pertinent standards, i.e. fire and casualty, safety and 
fire protection, etc.
---------------------------------------------------------------------------

                           (End of provision)

[49 FR 12629, Mar. 29, 1984, as amended at 50 FR 794, 796, Jan. 7, 1985. 
Redesignated at 63 FR 17338, Apr. 9, 1998]



Sec. 852.211-76  Noncompliance with packaging, packing, and/or marking 

requirements.

    The following clause will be included in contracts for supplies for 
delivery to supply distribution warehouses or depots for storage and 
subsequent issue to a using activity. It may also be included when 
appropriate when delivery is direct to a using activity.

 Noncompliance with Packaging, Packing and/or Marking Requirements (JUL 
                                  1989)

    Failure to comply with the packaging, packing, and/or marking 
requirements indicated herein, or incorporated herein by reference, may 
result in rejection of the merchandise and request for replacement or 
repackaging, repacking, and/or marking. The Government reserves the 
right, without obtaining authority from the contractor, to perform the 
required repackaging, repacking, and/or marking services and charge the 
contractor at the actual cost to the Government for the same or have the 
required repackaging, repacking, and/or marking services performed 
commercially under Government order and charge the contractor at the 
invoice rate. In connection with any discount offered, time will be 
computed from the date of completion of such repackaging, repacking, 
and/or marking services.

                             (End of clause)

[49 FR 12629, Mar. 29, 1984, as amended at 50 FR 794, Jan. 7, 1985; 54 
FR 30045, July 18, 1989; 61 FR 11587, Mar. 21, 1996. Redesignated at 63 
FR 17338, Apr. 9, 1998]



Sec. 852.211-77  Brand name or equal.

    The brand name or equal clause when used as prescribed by 811.104 
will be as follows:

                     Brand Name or Equal (NOV 1984)

    (Note: As used in this clause, the term ``brand name'' includes 
identification of products by make and model.)
    (a) If items called for by this invitation for bids have been 
identified in the schedule by a ``brand name or equal'' description, 
such identification is intended to be descriptive, but not restrictive, 
and is to indicate the quality and characteristics of products that will 
be satisfactory. Bids offering ``equal'' products (including products of 
the brand name manufacturer other than the one described by brand name) 
will be considered for award if such products are clearly identified in 
the bids and are determined by the Government to meet fully the salient 
characteristics requirements listed in the invitation.
    (b) Unless the bidder clearly indicates in his bid that he is 
offering an ``equal'' product, his bid shall be considered as offering a 
brand name product referenced in the invitation for bids.
    (c)(1) If the bidder proposes to furnish an ``equal'' product, the 
brand name, if any, of the product to be furnished shall be inserted in 
the space provided in the Invitation for Bids, or such product shall be 
otherwise clearly identified in the bid. The evaluation of bids and the 
determination as to equality of the product offered shall be the 
responsibility of the Government and will be based on information 
furnished by the bidder or identified in his/her bid as well as other 
information reasonably available to the purchasing activity. CAUTION TO 
BIDDERS. The purchasing activity is not responsible for locating or 
securing any information which is not identified in the bid and 
reasonably available to the purchasing activity. Accordingly, to insure 
that sufficient information is available, the bidder must furnish as a 
part of his/her bid all descriptive material (such as cuts, 
illustration, drawings or other information) necessary for the 
purchasing activity to: (i) Determine whether the product offered meets 
the salient characteristics requirement of the Invitation for

[[Page 241]]

Bids, and (ii) establish exactly what the bidder proposes to furnish and 
what the Government would be binding itself to purchase by making an 
award. The information furnished may include specific references to 
information previously furnished or to information otherwise available 
to the purchasing activity.
    (2) If the bidder proposes to modify a product so as to make it 
conform to the requirements of the Invitation for Bids, he/she shall: 
(i) Include in his/her bid a clear description of such proposed 
modifications, and (ii) clearly mark any descriptive material to show 
the proposed modifications.
    (3) Modifications proposed after bid opening to make a product 
conform to a brand name product referenced in the Invitation for Bids 
will not be considered.

                             (End of clause)

[50 FR 796, Jan. 7, 1985, as amended at 53 FR 7756, Mar. 10, 1988. 
Redesignated and amended at 63 FR 17338, Apr. 9, 1998]



Sec. 852.211-78  Liquidated damages.

    As prescribed in 811.504 and 836.206, the contracting officer may 
insert the following clause when appropriate:

              Partial Performance and Acceptance (APR 1984)

    If any unit of the work contracted for is accepted in advance of the 
whole, the rate of liquidated damages assessed will be in the ratio that 
the value of the unaccepted work bears to the total amount of the 
contract. If a separate price for unaccepted work has not been stated in 
the contractor's bid, determination of the value thereof will be made 
from schedules of costs furnished by the contractor and approved by the 
contracting officer, as specified elsewhere in the contract.

                             (End of clause)

[49 FR 12629, Mar. 29, 1984, as amended at 50 FR 794, Jan. 7, 1985. 
Redesignated and amended at 63 FR 17338, Apr. 9, 1998]



Sec. 852.214-70  Caution to bidders--bid envelopes.

    As provided in 814.201, the following provision will be prominently 
placed on all IFB's:

              Caution to Bidders--Bid Envelopes (APR 1984)

    It is the responsibility of each bidder to take all necessary 
precautions, including the use of a proper mailing cover, to insure that 
the bid price cannot be ascertained by anyone prior to bid opening. If a 
bid envelope is furnished with this invitation, the bidder is requested 
to use this envelope in submitting the bid. The bidder may, however, 
when it suits a purpose, use any suitable envelope, identified by the 
invitation number and bid opening time and date. If a bid envelope is 
not furnished, the bidder will complete and affix the enclosed Optional 
Form 17, Sealed Bid Label, to the lower left-hand corner of the envelope 
used in submitting the bid.

                           (End of provision)

[49 FR 12629, Mar. 29, 1984, as amended at 50 FR 794, Jan. 7, 1985]



Sec. 852.214-71  Alternate items.

    As prescribed in 814.201, consideration of alternate items may be 
appropriate. The following provisions may be used under the specified 
conditions:
    (a) When an alternate item is to be considered only if no bids or 
insufficient bids are received on the item desired, the following will 
be included in the invitation:

                      Alternate Item(s) (APR 1984)

    Bids on ------ \5\ will be considered only if acceptable bids on --
---- \6\ are not received or do not satisfy the total requirement.
---------------------------------------------------------------------------

    \5\ Contracting officer will insert an alternate item that is 
considered acceptable.
    \6\ Contracting officer will insert the required item and item 
number.
---------------------------------------------------------------------------

                           (End of provision)

    (b) When an alternate item will be considered on an equal basis with 
the item specified, the following will be included in the invitation:

                      Alternate Item(s) (APR 1984)

    Bids ------ \5\ will be given equal consideration along with the --
---- \6\ and any such bids received may be accepted if to the advantage 
of the Government. Tie bids will be decided in favor of.\6\

                           (End of provision)

    (c) In addition to the clause in paragraph (a) or (b) of this 
section, the following provision will be included in the invitation when 
bids will be allowed on different packaging, unit designation, etc.

[[Page 242]]

               Alternate Packaging and Packing (APR 1984)

    The bidder's offer must clearly indicate the quantity, package size, 
unit, or other different feature upon which the quote is made. 
Evaluation of the alternate or multiple alternates will be made on a 
common denominator such as per ounce, per pound, etc., basis.

                           (End of provision)

[49 FR 12629, Mar. 29, 1984, as amended at 50 FR 794, 796, Jan. 7, 1985]



Sec. 852.214-73  Bid samples.

    As prescribed in 814.202-4, insert the following provision:

                         Bid Samples (SEP 1993)

    Any bid sample(s) furnished must be in the quantities specified in 
the solicitation and plainly marked with the complete lettering/
numbering and description of the related bid item(s); the number of the 
Invitation for Bids; and the name of the bidder submitting the bid 
sample(s). Cases or packages containing any bid sample(s) must be 
plainly marked ``Bid Sample(s)'' and all charges pertaining to the 
preparation and transportation of bid sample(s) must be prepaid by the 
bidder. Bid sample(s) must be received at the location specified in the 
solicitation by the time and date for receipt of bids.

                           (End of provision)

[58 FR 48974, Sept. 21, 1993]



Sec. 852.216-70  Estimated quantities for requirements contracts.

    (a) When definite quantities cannot be determined, solicitations for 
facility-level requirements contracts will contain the applicable clause 
as set forth below. Solicitations issued by the VA National Acquisition 
Center will contain provisions developed by that Center for particular 
application to its operations, subject to legal review as prescribed in 
801.602-70(c)(1).
    (b) The following clause will be used for general equipment, 
supplies and services:

                     Estimated Quantities (APR 1984)

    As it is impossible to determine the exact quantities that will be 
required during the contract term, each bidder whose bid is accepted 
wholly or in part will be required to deliver all articles or services 
that may be ordered during the contract term, except as he/she otherwise 
indicates in his/her bid and except as otherwise provided herein. Bids 
will be considered if made with the proviso that the total quantities 
delivered shall not exceed a certain specified quantity. Bids offering 
less than 75 percent of the estimated requirement or which provide that 
the Government shall guarantee any definite quantity, will not be 
considered. The fact that quantities are estimated shall not relieve the 
contractor from filling all orders placed under this contract to the 
extent of his/her obligation. Also, the Department of Veterans Affairs 
shall not be relieved of its obligation to order from the contractor all 
articles or services that may, in the judgment of the ordering officer, 
be needed except that in the public exigency procurement may be made 
without regard to this contract.

                             (End of clause)

    (c) The following clause will be used in local coal-hauling 
contracts.

                           Estimated Quantity

    The estimated requirements shown in this invitation for bids cover 
the requirements for the entire contract period. It is understood and 
agreed that during the period of this contract the Government may order 
and the contractor will haul such coal as may, in the opinion of the 
Government, be required, except that in the public exigency procurement 
may be made without regard to this contract.

                             (End of clause)

    (d) The following clause will be used for orthopedic, prosthetic, 
and optical supplies.

                               Quantities

    The supplies and/or services listed in the attached schedule will be 
furnished at such time and in such quantities as they are required.

                             (End of clause)

    (e) The following clause will be used for National Cemetery System 
contracts for monuments:

                     Estimated Quantities (JUL 1989)

    As it is impossible to determine the exact quantities that will be 
required during the contract term, each bidder whose bid is accepted 
wholly or in part will be required to deliver all articles that may be 
ordered during the contract term, except as he or she otherwise 
indicates in his or her bid and except as otherwise provided herein. 
Bids will be considered if made with the proviso that the total 
quantities delivered shall not exceed a certain specified quantity. The 
fact

[[Page 243]]

that quantities are estimated shall not relieve the contractor from 
filling all orders placed under this contract to the extent of his or 
her obligation. Also, the Department of Veterans Affairs shall not be 
relieved of its obligation to order from the contractor all articles 
that may, in the judgment of the ordering officer, be needed except that 
in the public exigency procurement may be made without regard to this 
contract.

                             (End of clause)

[49 FR 12629, Mar. 29, 1984, as amended at 50 FR 794, 796, Jan. 7, 1985; 
54 FR 30045, July 18, 1989; 63 FR 69223, Dec. 16, 1998]



Sec. 852.219-70  Veteran-owned small business.

    As prescribed in 819.7003(b), the following certification will be 
made a part of all solicitations and all requests for quotations:

                 Veteran-Owned Small Business (DEC 1990)

    The offeror represents that the firm submitting this offer ( ) is ( 
) is not, a veteran-owned small business, ( ) is ( ) is not, a Vietnam 
era veteran-owned small business, and ( ) is ( ) is not, a disabled 
veteran-owned small business. A veteran-owned small business is defined 
as a small business, at least 51 percent of which is owned by a veteran 
who also controls and operates the business. Control in this context 
means exercising the power to make policy decisions. Operate in this 
context means actively involved in day-to-day management. For the 
purpose of this definition, eligible veterans include:
    (a) A person who served in the U.S. Armed Forces and who was 
discharged or released under conditions other than dishonorable.
    (b) Vietnam era veterans who served for a period of more than 180 
days, any part of which was between August 5, 1964, and May 7, 1975, and 
were discharged under conditions other than dishonorable.
    (c) Disabled veterans with a minimum compensable disability of 30 
percent, or a veteran who was discharged for disability.

Failure to execute this representation will be deemed a minor 
informality and the bidder or offeror shall be permitted to satisfy the 
requirement prior to award (see FAR 14.405).

                           (End of provision)

[50 FR 796, Jan. 7, 1985; 54 FR 40065, Sept. 29, 1989, as amended at 55 
FR 49901, Dec. 3, 1990; 61 FR 11587, Mar. 21, 1996; 63 FR 17338, Apr. 9, 
1998]



Sec. 852.222-70  Contract Work Hours and Safety Standards Act--nursing 

home care contract supplement.

    As prescribed in 822.304, nursing home care contracts will include 
the following clause.

 Contract Workhours and Safety Standard Act--Nursing Home Care Contract 
                          Supplement (APR 1984)

    In the performance of any contract entered into pursuant to the 
provisions of 38 U.S.C. 1720 to provide nursing home care of veterans, 
no contractor or subcontractor under such contract shall be deemed in 
violation of Section 102 of the Contract Work Hours and Safety Standards 
Act by virtue of failure to pay the overtime wages required by such 
section for work in excess of 8 hours in any calendar day or 40 hours in 
the workweek to any individual employed by establishment which is an 
institution primarily engaged in the care of the sick, the aged, or the 
mentally ill or defective who reside on the premises if, pursuant to an 
agreement or understanding arrived at between the employer and the 
employee before performance of the work, a work period of 14 consecutive 
days is accepted in lieu of the workweek of 7 consecutive days for the 
purpose of overtime compensation and if such individual receives 
compensation for employment in excess of 8 hours in any workday and in 
excess of 80 hours in such 14-day period at a rate not less than 1\1/2\ 
times the regular rate at which the individual is employed, computed in 
accordance with the requirements of the Fair Labor Standards Act of 
1938, as amended.

                             (End of clause)

[49 FR 12629, Mar. 29, 1984, as amended at 50 FR 794, Jan. 7, 1985; 63 
FR 69223, Dec. 16, 1998]



Sec. 852.228-70  Bond premium adjustment.

    The following clause will be utilized as prescribed by 828.106-70.

                   Bond Premium Adjustment (APR 1984)

    When net changes in original contract price affect the premium of a 
Corporate Surety Bond by $5 or more, the Government in determining basis 
for final settlement, will provide for bond premium adjustment computed 
at the rate shown in the bond.

                             (End of clause)

[49 FR 12629, Mar. 29, 1984, as amended at 50 FR 794, Jan. 7, 1985; 64 
FR 40519, July 27, 1999]

[[Page 244]]



Sec. 852.229-70  Purchases from patient's funds.

    When contracts are for items to be purchased solely from personal 
funds of patients, the following tax provision will be used in lieu of 
the Federal, State and local tax clause in FAR 52.229-1 or, if the 
contract is for commercial items, in lieu of paragraph (k), Taxes, in 
FAR clause 52.212-4:

                      Sales or Use Taxes (APR 1984)

    The articles listed in this bid invitation will be purchased from 
personal funds of patients and prices bid herein include any sales or 
use tax heretofore imposed by any State, or by any duly constituted 
taxing authority therein, having jurisdiction to levy such a tax, 
applicable to the material in this bid.

                           (End of provision)

[49 FR 12629, Mar. 29, 1984, as amended at 50 FR 794, 796, Jan.7, 1985; 
63 FR 17339, Apr. 9, 1998]



Sec. 852.229-71  Purchases for patients using Government funds and/or 

personal funds of patients.

    When contracts are for items to be purchased from both Government 
funds and personal funds of patients, the following provision will be 
included as a part of the Federal, State, and local tax clause in FAR 
52.229-1 or, if the contract is for commercial items, as an addendum to 
FAR clause 52.212-4:

                      Sales or Use Taxes (APR 1984)

    Any article purchased from this contract, payable from personal 
funds of patients, will be subject to any applicable sales or use tax 
levied thereon by any State, or by duly constituted taxing authority 
therein having jurisdiction to levy such a tax; the total amount of the 
tax applicable to such purchase payable from personal funds of patients 
will be computed on the total amount of the order and will be shown as a 
separate item on the purchase order and invoice. The bidder shall 
identify the applicable taxes and rates in his/her bid.

                           (End of provision)

[49 FR 12629, Mar. 29, 1984, as amended at 50 FR 794, 796, Jan. 7, 1985; 
63 FR 17339, Apr. 9, 1998]



Sec. 852.233-70  Protest content.

    As prescribed in 833.106 of this chapter, insert the following 
provision in each solicitation where the total value of all contract 
awards under the solicitation is expected to exceed the simplified 
acquisition threshold:

                       Protest Content (JAN 1998)

    (a) Any protest filed by an interested party shall:
    (1) Include the name, address, fax number, and telephone number of 
the protester;
    (2) Identify the solicitation and/or contract number;
    (3) Include an original signed by the protester or the protester's 
representative, and at least one copy;
    (4) Set forth a detailed statement of the legal and factual grounds 
of the protest, including a description of resulting prejudice to the 
protester, and provide copies of relevant documents;
    (5) Specifically request a ruling of the individual upon whom the 
protest is served;
    (6) State the form of relief requested; and
    (7) Provide all information establishing the timeliness of the 
protest.
    (b) Failure to comply with the above may result in dismissal of the 
protest without further consideration.

                           (End of provision)

[63 FR 15320, Mar. 31, 1998]



Sec. 852.233-71  Alternate Protest Procedure.

    As prescribed in 833.106 of this chapter, insert the following 
provision in each solicitation where the total value of all contract 
awards under the solicitation is expected to exceed the simplified 
acquisition threshold:

                 Alternate Protest Procedure (JAN 1998)

    As an alternative to filing a protest with the contracting officer, 
an interested party may file a protest with the Deputy Assistant 
Secretary for Acquisition and Materiel Management, Acquisition 
Administration Team, Department of Veterans Affairs, 810 Vermont Avenue, 
NW, Washington, DC, 20420, or, for solicitations issued by the Office of 
Facilities Management, the Chief Facilities Management Officer, Office 
of Facilities Management, 810 Vermont Avenue, NW, Washington, DC 20420. 
The protest will not be considered if the interested party has a protest 
on the same or similar issues pending with the contracting officer.

[63 FR 15320, Mar. 31, 1998]

[[Page 245]]



Sec. 852.236-71  Specifications and drawings for construction.

    As prescribed in 836.521, insert the following clause:

         Specifications and Drawings for Construction (JUL 2002)

    The clause entitled ``Specifications and Drawings for Construction'' 
in FAR 52.236-21 is supplemented as follows:
    (a) The contracting officer's interpretation of the drawings and 
specifications will be final, subject to the disputes clause.
    (b) Large scale drawings supersede small scale drawings.
    (c) Dimensions govern in all cases. Scaling of drawings may be done 
only for general location and general size of items.
    (d) Dimensions shown of existing work and all dimensions required 
for work that is to connect with existing work shall be verified by the 
contractor by actual measurement of the existing work. Any work at 
variance with that specified or shown in the drawings shall not be 
performed by the contractor until approved in writing by the contracting 
officer.

                             (End of clause)

[49 FR 12629, Mar. 29, 1984, as amended at 50 FR 794, Jan. 7, 1985; 67 
FR 49260, July 30, 2002]



Sec. 852.236-72  Performance of work by the contractor.

    As prescribed in 836.501, insert the following clause:

            Performance of Work by the Contractor (JUL 2002)

    The clause entitled ``Performance of Work by the Contractor'' in FAR 
52.236-1 is supplemented as follows:
    (a) Contract work accomplished on the site by laborers, mechanics, 
and foremen/forewomen on the contractor's payroll and under his/her 
direct supervision shall be included in establishing the percent of work 
to be performed by the contractor. Cost of material and equipment 
installed by such labor may be included. The work by contractor's 
executive, supervisory and clerical forces shall be excluded in 
establishing compliance with the requirements of ths clause.
    (b) The contractor shall submit, simultaneously with the schedule of 
costs required by the Payments Under Fixed-Price Construction Contracts 
clause of the contract, a statement designating the branch or branches 
of contract work to be performed with his/her forces. The approved 
schedule of costs will be used in determining the value of a branch or 
branches, or portions thereof, of the work for the purpose of this 
article.
    (c) If, during the progress of work hereunder, the contractor 
requests a change in the branch or branches of the work to be performed 
by his/her forces and the contracting officer determines it to be in the 
best interests of the Government, the contracting officer may, at his/
her discretion, authorize a change in such branch or branches of said 
work. Nothing contained herein shall permit a reduction in the 
percentage of work to be performed by the contractor with his/her 
forces, it being expressly understood that this is a contract 
requirement without right or privilege of reduction.
    (d) In the event the contractor fails or refuses to meet the 
requirement of the FAR clause at 52.236-1, it is expressly agreed that 
the contract price will be reduced by 15 percent of the value of that 
portion of the percentage requirement that is accomplished by others. 
For the purpose of this clause, it is agreed that 15 percent is an 
acceptable estimate of the contractor's overhead and profit, or mark-up, 
on that portion of the work which the contractor fails or refuses to 
perform, with his/her own forces, in accordance with the FAR clause at 
52.236-1.

                             (End of clause)

    Alternate I (JUL 2002) For requirements which include Network 
Analysis System (NAS), substitute the following paragraphs (b) and (c) 
for paragraphs (b) and (c) of the basic clause:

    (b) The contractor shall submit, simultaneously with the cost per 
activity of the construction schedule required by Section 01311, NETWORK 
ANALYSIS SYSTEM, a responsibility code for all activities of the network 
for which the contractor's forces will perform the work. The cost of 
these activities will be used in determining the portions of the total 
contract work to be executed by the contractor's forces for the purpose 
of this article.
    (c) If, during progress of work hereunder, the contractor requests a 
change in activities of work to be performed by the contractor's forces 
and the contracting officer determines it to be in the best interest of 
the Government, the contracting officer may, at his or her discretion, 
authorize a change in such activities of said work.

[49 FR 12629, Mar. 29, 1984, as amended at 50 FR 794, 796, Jan. 7, 1985; 
53 FR 1631, Jan. 21, 1988; 53 FR 2669, Jan. 29, 1988; 67 FR 49260, July 
30, 2002]



Sec. 852.236-74  Inspection of construction.

    As prescribed in 846.312, insert the following clause:

[[Page 246]]

                  Inspection of Construction (JUL 2002)

    The clause entitled ``Inspection of Construction'' in FAR 52.246-12 
is supplemented as follows:
    (a) Inspection of materials and articles furnished under this 
contract will be made at the site by the resident engineer, unless 
otherwise provided for in the specifications.
    (b) Final inspection will not be made until the contract work is 
ready for beneficial use or occupancy. The contractor shall notify the 
contracting officer, through the resident engineer, fifteen (15) days 
prior to the date on which the work will be ready for final inspection.

                             (End of clause)

[49 FR 12629, Mar. 29, 1984, as amended at 50 FR 794, Jan. 7, 1985; 67 
FR 49261, July 30, 2002]



Sec. 852.236-76  Correspondence.

    As prescribed in 836.570, insert the following clause:

                        Correspondence (APR 1984)

    All correspondence relative to this contract shall bear 
Specification Number, Project Number, Department of Veterans Affairs 
Contract Number, title of project and name of facility.

                             (End of clause)

[49 FR 12629, Mar. 29, 1984, as amended at 50 FR 794, Jan. 7, 1985; 54 
FR 40066, Sept. 29, 1989; 67 FR 49261, July 30, 2002]



Sec. 852.236-77  Reference to ``standards.''

    As prescribed in 836.571, insert the following clause:

                  Reference to ``standards'' (JUL 2002)

    Any materials, equipment, or workmanship specified by references to 
number, symbol, or title of any specific Federal, Industry or Government 
Agency Standard Specification shall comply with all applicable 
provisions of such standard specifications, except as limited to type, 
class or grade, or modified in contract specifications. Reference to 
``Standards'' referred to in the contract specifications, except as 
modified, shall have full force and effect as though printed in detail 
in specifications.

                             (End of clause)

[49 FR 12629, Mar. 29, 1984, as amended at 50 FR 794, 797, Jan. 7, 1985; 
67 FR 49261, July 30, 2002]



Sec. 852.236-78  Government supervision.

    As prescribed in 836.572, insert the following clause:

                    Government Supervision (APR 1984)

    (a) The work will be under the direction of the Department of 
Veterans Affairs contracting officer, who may designate another VA 
employee to act as resident engineer at the construction site.
    (b) Except as provided below, the resident engineer's directions 
will not conflict with or change contract requirements.
    (c) Within the limits of any specific authority delegated by the 
contracting officer, the resident engineer may, by written direction, 
make changes in the work. The contractor shall be advised of the extent 
of such authority prior to execution of any work under the contract.

                             (End of clause)

[49 FR 12629, Mar. 29, 1984, as amended at 50 FR 794, Jan. 7, 1985; 67 
FR 49261, July 30, 2002]



Sec. 852.236-79  Daily report of workers and materials.

    As prescribed in 836.573, insert the following clause:

             Daily Report of Workers and Material (APR 1984)

    The contractor shall furnish to the resident engineer each day a 
consolidated report for the preceding work day in which is shown the 
number of laborers, mechanics, foremen/forewomen and pieces of heavy 
equipment used or employed by the contractor and subcontractors. The 
report shall bear the name of the firm, the branch of work which they 
perform such as concrete, plastering, masonry, plumbing, sheet metal 
work, etc. The report shall give a breakdown of employees by crafts, 
location where employed, and work performed. The report shall also list 
materials delivered to the site on the date covered by the report.

                             (End of clause)

[49 FR 12629, Mar. 29, 1984, as amended at 50 FR 794, Jan. 7, 1985; 67 
FR 49261, July 30, 2002q]



Sec. 852.236-80  Subcontracts and work coordination.

    As prescribed in 836.574, insert the following clause:

[[Page 247]]

              Subcontracts and Work Coordination (APR 1984)

    (a) Nothing contained in this contract shall be construed as 
creating any contractual relationship between any subcontractor and the 
Government. Divisions or sections of specifications are not intended to 
control the contractor in dividing work among subcontractors, or to 
limit work performed by any trade.
    (b) The contractor shall be responsible to the Government for acts 
and omissions of his/her own employees, and of the subcontractors and 
their employees. The contractor shall also be responsible for 
coordination of the work of the trades, subcontractors, and material 
suppliers.
    (c) The Government or its representatives will not undertake to 
settle any differences between the contractor and subcontractors or 
between subcontractors.
    (d) The Government reserves the right to refuse to permit employment 
on the work or require dismissal from the work of any subcontractor who, 
by reason of previous unsatisfactory work on Department of Veterans 
Affairs projects or for any other reason, is considered by the 
contracting officer to be incompetent or otherwise objectionable.

                             (End of clause)

    Alternate I (JUL 2002) For new construction work with complex 
mechanical-electrical work, the following paragraph relating to work 
coordination may be substituted for paragraph (b) of the basic clause:

    (b) The contractor shall be responsible to the Government for acts 
and omissions of his/her own employees, and subcontractors and their 
employees. The contractor shall also be responsible for coordination of 
the work of the trades, subcontractors, and material suppliers. The 
contractor shall, in advance of the work, prepare coordination drawings 
showing the location of openings through slabs, the pipe sleeves and 
hanger inserts, as well as the location and elevation of utility lines, 
including, but not limited to, conveyor systems, pneumatic tubes, ducts, 
and conduits and pipes 2 inches and larger in diameter. These drawings, 
including plans, elevations, and sections as appropriate shall clearly 
show the manner in which the utilities fit into the available space and 
relate to each other and to existing building elements. Drawings shall 
be of appropriate scale to satisfy the previously stated purposes, but 
not smaller than \3/8\-inch scale. Drawings may be composite (with 
distinctive colors for the various trades) or may be separate but fully 
coordinated drawings (such as sepias or photographic paper 
reproducibles) of the same scale. Separate drawings shall depict 
identical building areas or sections and shall be capable of being 
overlaid in any combination. The submitted drawings for a given area of 
the project shall show the work of all trades which will be involved in 
that particular area. Six complete composite drawings or six complete 
sets of separate reproducible drawings shall be received by the 
Government not less than 20 days prior to the scheduled start of the 
work in the area illustrated by the drawings, for the purpose of showing 
the contractor's planned methods of installation. The objectives of such 
drawings are to promote carefully planned work sequence and proper trade 
coordination, in order to assure the expeditious solutions of problems 
and the installation of lines and equipment as contemplated by the 
contract documents while avoiding or minimizing additional costs to the 
contractor and to the Government. In the event the contractor, in 
coordinating the various installations and in planning the method of 
installation, finds a conflict in location or elevation of any of the 
utilities with themselves, with structural items or with other 
construction items, he/she shall bring this conflict to the attention of 
the contracting officer immediately. In doing so, the contractor shall 
explain the proposed method of solving the problem or shall request 
instructions as to how to proceed if adjustments beyond those of usual 
trades coordination are necessary. Utilities installation work will not 
proceed in any area prior to the submission and completion of the 
Government review of the coordinated drawings for that area, nor in any 
area in which conflicts are disclosed by the coordination drawings until 
the conflicts have been corrected to the satisfaction of the contracting 
officer. It is the responsibility of the contractor to submit the 
required drawings in a timely manner consistent with the requirements to 
complete the work covered by this contract within the prescribed 
contract time.

[49 FR 12629, Mar. 29, 1984, as amended at 50 FR 794, Jan. 7, 1985; 67 
FR 49261, July 30, 2002]



Sec. 852.236-82  Payments under fixed-price construction contracts 

(without NAS).

    As prescribed in 832.111, insert the following clause in contracts 
that do not contain a section entitled ``Network Analysis System 
(NAS)'':

      Payments Under Fixed-Price Construction Contracts (APR 1984)

    The clause entitled ``Payments Under Fixed-Price Construction 
Contracts'' in FAR 52.232-5 is implemented as follows:
    (a) Retainage:
    (1) The contracting officer may retain funds:

[[Page 248]]

    (i) Where performance under the contract has been determined to be 
deficient or the contractor has performed in an unsatisfactory manner in 
the past; or
    (ii) As the contract nears completion, to ensure that deficiencies 
will be corrected and that completion is timely.
    (2) Examples of deficient performance justifying a retention of 
funds include, but are not restricted to, the following:
    (i) Unsatisfactory progress as determined by the contracting 
officer;
    (ii) Failure to meet schedule in Schedule of Work Progress;
    (iii) Failure to present submittals in a timely manner; or
    (iv) Failure to comply in good faith with approved subcontracting 
plans, certifications or contract requirements.
    (3) Any level of retention shall not exceed 10 percent either where 
there is determined to be unsatisfactory performance, or when the 
retainage is to ensure satisfactory completion. Retained amounts shall 
be paid promptly upon completion of all contract requirements, but 
nothing contained in this subparagraph shall be construed as limiting 
the contracting officer's right to withhold funds under other provisions 
of the contract or in accordance with the general law and regulations 
regarding the administration of Government contracts.
    (b) The contractor shall submit a schedule of cost to the 
contracting officer for approval within 30 calendar days after date of 
receipt of notice to proceed. Such schedule will be signed and submitted 
in triplicate. The approved cost schedule will be one of the bases for 
determining progress payments to the contractor for work completed. This 
schedule shall show cost by the branches of work for each building or 
unit of the contract, as instructed by the resident engineer.
    (1) The branches shall be subdivided into as many subbranches as are 
necessary to cover all component parts of the contract work.
    (2) Costs as shown on this schedule must be true costs and, should 
the resident engineer so desire, he/she may require the contractor to 
submit the original estimate sheets or other information to substantiate 
the detailed makeup of the schedule.
    (3) The sum of the subbranches, as applied to each branch, shall 
equal the total cost of such branch. The total cost of all branches 
shall equal the contract price.
    (4) Insurance and similar items shall be prorated and included in 
the cost of each branch of the work.
    (5) The cost schedule shall include separate cost information for 
the systems listed below. The percentages listed below are proportions 
of the cost listed in contractor's cost schedule and identify, for 
payment purposes, the value of the work to adjust, correct and test 
systems after the material has been installed. Payment of the listed 
percentages will be made only after the contractor has demonstrated that 
each of the systems is substantially complete and operates as required 
by the contract.

           Value of Adjusting, Correcting, and Testing System
------------------------------------------------------------------------
                            System                              Percent
------------------------------------------------------------------------
Pneumatic tube system........................................         10
Incinerators (medical waste and trash).......................          5
Sewage treatment plant equipment.............................          5
Water treatment plant equipment..............................          5
Washers (dish, cage, glass, etc.)............................          5
Sterilizing equipment........................................          5
Water distilling equipment...................................          5
Prefab temperature rooms (cold, constant temperature)........          5
Entire air-conditioning system (Specified under 600 Sections)          5
Entire boiler plant system (Specified under 700 Sections)....          5
General supply conveyors.....................................         10
Food service conveyors.......................................         10
Pneumatic soiled linen and trash system......................         10
Elevators and dumbwaiters....................................         10
Materials transport system...................................         10
Engine-generator system......................................          5
Primary switchgear...........................................          5
Secondary switchgear.........................................          5
Fire alarm system............................................          5
Nurse call system............................................          5
Intercom system..............................................          5
Radio system.................................................          5
TV (entertainment) system....................................          5
------------------------------------------------------------------------

    (c) In addition to this cost schedule, the contractor shall submit 
such unit costs as may be specifically requested. The unit costs shall 
be those used by the contractor in preparing his/her bid and will not be 
binding as pertaining to any contract changes.
    (d) The contracting officer will consider for monthly progress 
payments material and/or equipment procured by the contractor and stored 
on the construction site as space is available, or at a local approved 
location off the site, under such terms and conditions as such officer 
approves, including but not limited to the following:
    (1) The material or equipment is in accordance with the contract 
requirements and/or approved samples and shop drawings.
    (2) Only those materials and/or equipment as are approved by the 
resident engineer for storage will be included.
    (3) Such materials and/or equipment will be stored separately and 
will be readily available for inspection and inventory by the resident 
engineer.
    (4) Such materials and/or equipment will be protected against 
weather, theft and other hazards and will not be subjected to 
deterioration.
    (5) All of the other terms, provisions, conditions and covenants 
contained in the contract shall be and remain in full force and effect 
as therein provided.

[[Page 249]]

    (6) A supplemental agreement will be executed between the Government 
and the contractor with the consent of the contractor's surety for off-
site storage.
    (e) The contractor, prior to receiving a progress or final payment 
under this contract, shall submit to the contracting officer a 
certification that the contractor has made payment from proceeds of 
prior payments, or that timely payment will be made from t