[Title 48 CFR ]
[Code of Federal Regulations (annual edition) - October 1, 2010 Edition]
[From the U.S. Government Printing Office]



[[Page 1]]

          

          48


          Chapters 3 to 6

                         Revised as of October 1, 2010


          Federal Acquisition Regulations System
          



________________________

          Containing a codification of documents of general 
          applicability and future effect

          As of October 1, 2010
          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 3--Health and Human Services                       3
          Chapter 4--Department of Agriculture                     139
          Chapter 5--General Services Administration               209
          Chapter 6--Department of State                           339
  Finding Aids:
      Table of CFR Titles and Chapters........................     427
      Alphabetical List of Agencies Appearing in the CFR......     447
      List of CFR Sections Affected...........................     457

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

                     Cite this Code: CFR
                     To cite the regulations in 
                       this volume use title, 
                       part and section number. 
                       Thus, 48 CFR 301.101 
                       refers to title 48, part 
                       301, section 101.

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

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                               EXPLANATION

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

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

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

LEGAL STATUS

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

HOW TO USE THE CODE OF FEDERAL REGULATIONS

    The Code of Federal Regulations is kept up to date by the individual 
issues of the Federal Register. These two publications must be used 
together to determine the latest version of any given rule.
    To determine whether a Code volume has been amended since its 
revision date (in this case, October 1, 2010), 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

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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 eleven separate 
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Sections Affected'' is published at the end of each CFR volume.

``[RESERVED]'' TERMINOLOGY

    The term ``[Reserved]'' is used as a place holder within the Code of 
Federal Regulations. An agency may add regulatory information at a 
``[Reserved]'' location at any time. Occasionally ``[Reserved]'' is used 
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not accidentally dropped due to a printing or computer error.

INCORPORATION BY REFERENCE

    What is incorporation by reference? Incorporation by reference was 
established by statute and allows Federal agencies to meet the 
requirement to publish regulations in the Federal Register by referring 
to materials already published elsewhere. For an incorporation to be 
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This material, like any other properly issued regulation, has the force 
of law.
    What is a proper incorporation by reference? The Director of the 
Federal Register will approve an incorporation by reference only when 
the requirements of 1 CFR part 51 are met. Some of the elements on which 
approval is based are:
    (a) The incorporation will substantially reduce the volume of 
material published in the Federal Register.
    (b) The matter incorporated is in fact available to the extent 
necessary to afford fairness and uniformity in the administrative 
process.
    (c) The incorporating document is drafted and submitted for 
publication in accordance with 1 CFR part 51.
    What if the material incorporated by reference cannot be found? If 
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this volume.
    An index to the text of ``Title 3--The President'' is carried within 
that volume.

[[Page vii]]

    The Federal Register Index is issued monthly in cumulative form. 
This index is based on a consolidation of the ``Contents'' entries in 
the daily Federal Register.
    A List of CFR Sections Affected (LSA) is published monthly, keyed to 
the revision dates of the 50 CFR titles.

REPUBLICATION OF MATERIAL

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INQUIRIES

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    Raymond A. Mosley,
    Director,
    Office of the Federal Register.
    October 1, 2010.







[[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, 2010.

    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, Cheryl E. Sirofchuck 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 3 to 6)

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

chapter 3--Health and Human Services........................         301

chapter 4--Department of Agriculture........................         401

chapter 5--General Services Administration..................         501

chapter 6--Department of State..............................         601

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                  CHAPTER 3--HEALTH AND HUMAN SERVICES




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

                          SUBCHAPTER A--GENERAL
Part                                                                Page
301             HHS Acquisition Regulation System...........           5
302             Definitions of words and terms..............          17
303             Improper business practices and personal 
                    conflicts of interest...................          21
304             Administrative matters......................          22
           SUBCHAPTER B--COMPETITION AND ACQUISITION PLANNING
305             Publicizing contract actions................          31
306             Competition requirements....................          32
307             Acquisition planning........................          35
308             Required sources of supplies and services...          42
309             Contractor qualifications...................          43
310             Market research.............................          45
311             Describing agency needs.....................          46
312             Acquisition of commercial items.............          48
          SUBCHAPTER C--CONTRACTING METHODS AND CONTRACT TYPES
313             Simplified acquisition procedures...........          49
314             Sealed bidding..............................          50
315             Contracting by negotiation..................          51
316             Types of contracts..........................          69
317             Special contracting methods.................          71
                  SUBCHAPTER D--SOCIOECONOMIC PROGRAMS
319             Small business programs.....................          76
322             Application of labor laws to Government 
                    acquisitions............................          78
323             Environment, energy and water efficiency, 
                    renewable energy technologies, 
                    occupational safety, and drug-free 
                    workplace...............................          78
324             Protection of privacy and freedom of 
                    information.............................          79
             SUBCHAPTER E--GENERAL CONTRACTING REQUIREMENTS
327             Patents, data, and copyrights...............          82
328             Bonds and insurance.........................          82

[[Page 4]]

330             Cost accounting standards...................          82
331             Contract cost principles and procedures.....          82
332             Contract financing..........................          83
333             Protests, disputes, and appeals.............          84
             SUBCHAPTER F--SPECIAL CATEGORIES OF CONTRACTING
334             Major system acquisition....................          89
335             Research and development contracting........          91
337             Service contracting--general................          92
339             Acquisition of information technology.......          93
                    SUBCHAPTER G--CONTRACT MANAGEMENT
342             Contract administration.....................          98
                     SUBCHAPTER H--CLAUSES AND FORMS
352             Solicitation provisions and contract clauses         103
353             Forms.......................................         129
                       SUBCHAPTERS I-L [RESERVED]
                   SUBCHAPTER M--HHS SUPPLEMENTATIONS
370             Special programs affecting acquisition......         131

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                          SUBCHAPTER A_GENERAL

               PART 301_HHS ACQUISITION REGULATION SYSTEM

             Subpart 301.1_Purpose, Authority, and Issuance

Sec.

Sec. 301.101 Purpose.

Sec. 301.103 Authority.

Sec. 301.106 Office of Management and Budget approval under the 
          Paperwork Reduction Act.

                      Subpart 301.2_Administration


Sec. 301.270 Executive Committee for Acquisition.

                  Subpart 301.4_Deviations From the FAR


Sec. 301.403 Individual deviations.

Sec. 301.404 Class deviations.

Sec. 301.470 Procedure.

      Subpart 301.6_Career Development, Contracting Authority, and 
                            Responsibilities


Sec. 301.602 Contracting Officers.

Sec. 301.602-3 Ratification of unauthorized commitments.

Sec. 301.603 Selection, appointment, and termination of appointment of 
          Contracting Officers.

Sec. 301.603-1 General.

Sec. 301.603-2 Selection and appointment.

Sec. 301.603-3 Interim appointments.

Sec. 301.603-4 Termination of appointments.

Sec. 301.603-70 Delegation of Contracting Officer responsibilities.

Sec. 301.603-71 Waivers to warrant standards.

Sec. 301.603-72 FAC-C and HHS SAC certification requirements.

Sec. 301.603-73 Additional HHS training requirements.

Sec. 301.603-74 Requirement for retention of FAC-C and HHS SAC 
          certification.

Sec. 301.604 Training and certification of Contracting Officers' 
          Technical Representatives.

Sec. 301.604-70 General.

Sec. 301.604-71 HCA authorities and responsibilities.

Sec. 301.604-72 Requirements for certification maintenance.

Sec. 301.604-73 Certification policy exception.

Sec. 301.604-74 Additional COTR training requirements.

Sec. 301.605 Contracting Officer designation of Contracting Officer 
          Technical Representative.

Sec. 301.606 Training requirements for Project Officers.

Sec. 301.606-70 General.

Sec. 301.606-71 Project Officer training.

Sec. 301.606-72 Delegation of authority to HCAs.

Sec. 301.606-73 Requirements for continuous learning maintenance.

Sec. 301.606-74 Training policy exception.

Sec. 301.606-75 Additional Project Officer training requirements.

Sec. 301.607 Certification of Program and Project Managers.

Sec. 301.607-70 General.

Sec. 301.607-71 FAC-P/PM levels and requirements.

Sec. 301.607-72 Applicability.

Sec. 301.607-73 Certification waivers.

Sec. 301.607-74 Certification transfers.

Sec. 301.607-75 Maintenance of FAC-P/PM certification.

Sec. 301.607-76 FAC-P/PM application process.

Sec. 301.607-77 Governance.

Sec. 301.607-78 Contracting Officer designation of a Program/Project 
          Manager as the Contracting Officer's Technical Representative.

Sec. 301.608 Training requirements for purchase cardholders, Approving 
          Officials, and Agency/Organization Program Coordinators.

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

    Source: 74 FR 62398, Nov. 27, 2009, unless otherwise noted.

             Subpart 301.1_Purpose, Authority, and Issuance



Sec. 301.101  Purpose.

    (a) The Department of Health and Human Services (HHS) Acquisition 
Regulation (HHSAR) establishes uniform HHS acquisition policies and 
procedures that conform to the Federal Acquisition Regulations (FAR) 
System.
    (b) The HHSAR implements FAR policies and procedures and provides 
additional policies and procedures that supplement the FAR.
    (c) The HHSAR contains HHS policies and procedures that govern the 
acquisition process or otherwise control acquisition relationships 
between HHS' contracting activities and contractors.

[74 FR 62398, Nov. 27, 2009, as amended at 75 FR 21509, Apr. 26, 2010]



Sec. 301.103  Authority.

    (b) The Assistant Secretary for Financial Resources (ASFR) 
prescribes the HHSAR under the authority of 5

[[Page 6]]

U.S.C. 301 and section 205(c) of the Federal Property and Administrative 
Services Act of 1949, as amended (40 U.S.C. 486(c), as delegated by the 
Secretary.
    (c) The HHSAR is issued in the Code of Federal Regulations (CFR) as 
Chapter 3 of Title 48, Department of Health and Human Services 
Acquisition Regulation. It may be referenced as ``48 CFR Chapter 3.''



Sec. 301.106  Office of Management and Budget approval under the 
          Paperwork Reduction Act.

    (a) The Paperwork Reduction Act of 1980 (44 U.S.C 3501 et seq.) 
imposes a requirement on Federal agencies to obtain approval from the 
Office of Management and Budget (OMB) before collecting the same 
information from 10 or more members of the public.
    (b) The following OMB control numbers apply to the information 
collection and recordkeeping requirements contained in this chapter:

------------------------------------------------------------------------
                                                             OMB control
                     HHSAR segment No.                           No.
------------------------------------------------------------------------
315.4......................................................    0990-0139
342.7101...................................................    0990-0131
352.233-70.................................................    0990-0133
352.270-1..................................................    0990-0129
352.270-2..................................................    0990-0129
352.270-3..................................................    0990-0129
352.270-5..................................................    0990-0130
352.270-8..................................................    0990-0128
352.270-9..................................................    0990-0128
370.1......................................................    0990-0129
370.2......................................................    0990-0129
------------------------------------------------------------------------

    (c) The Contracting Officer shall insert the clause in 352.201-70, 
Paperwork Reduction Act, in solicitations, contracts, and orders that 
include a requirement to collect the same information from 10 or more 
persons.

                      Subpart 301.2_Administration



Sec. 301.270  Executive Committee for Acquisition.

    (a) The Associate Deputy Assistant Secretary for Acquisition 
(Associate DAS for Acquisition) has established the Executive Committee 
for Acquisition (ECA) to facilitate the planning, development, and 
implementation of HHS acquisition policies and procedures and to share 
successful acquisition practices.
    (b) The ECA consists of members and alternates from the following 
organizations:
    (1) ASFR/Office of Grants and Acquisition Policy and Accountability
    (OGAPA)/Division of Acquisition (DA).
    (2) Agency for Healthcare Research and Quality (AHRQ).
    (3) Assistant Secretary for Preparedness and Response/Office of 
Acquisitions Management, Contracts and Grants (ASPR/OAMCG).
    (4) Centers for Disease Control and Prevention (CDC).
    (5) Centers for Medicare and Medicaid Services (CMS).
    (6) Food and Drug Administration (FDA).
    (7) Health Resources and Services Administration (HRSA).
    (8) Indian Health Service (IHS).
    (9) National Institutes of Health (NIH).
    (10) Program Support Center (PSC).
    (11) Substance Abuse and Mental Health Services Administration 
(SAMHSA).
    (c) The Associate DAS for Acquisition is the Chair of the ECA. The 
Chair will call all meetings and direct all ECA activities.

[74 FR 62398, Nov. 27, 2009, as amended at 75 FR 21509, Apr. 26, 2010]

                  Subpart 301.4_Deviations From the FAR



Sec. 301.403  Individual deviations.

    Contracting activities shall prepare requests for individual 
deviations to either the FAR or HHSAR in accordance with 301.470.



Sec. 301.404  Class deviations.

    Contracting activities shall prepare requests for class deviations 
to either the FAR or HHSAR in accordance with 301.470.



Sec. 301.470  Procedure.

    (a) Contracting activities shall prepare deviation requests in 
memorandum form and forward them through the Head of the Contracting 
Activity (HCA) to the Associate DAS for Acquisition. The Associate DAS 
for

[[Page 7]]

Acquisition (non-delegable) is the official authorized to approve all 
deviation requests. Contracting activities may request a deviation 
telephonically or by e-mail in an exigent situation, but shall confirm 
the request by memorandum as soon as possible.
    (b) A deviation request shall clearly set forth the--
    (1) Nature of the deviation, including what contract(s)/
contractor(s) is involved;
    (2) Identification of the FAR or HHSAR citation from which the 
deviation is needed;
    (3) Circumstances under which the deviation will be used;
    (4) Intended effect of the deviation;
    (5) Period of applicability;
    (6) Rationale for the deviation (Note: The Contracting Officer shall 
include a copy of pertinent background papers, such as a contractor's 
request, as part of the deviation request.); and
    (7) Suggested wording for the deviation, if applicable.

      Subpart 301.6_Career Development, Contracting Authority, and 
                            Responsibilities



Sec. 301.602  Contracting Officers.



Sec. 301.602-3  Ratification of unauthorized commitments.

    (b) Policy.
    (1) The Government is not bound by agreements with, or contractual 
commitments made to, prospective contractors by individuals who do not 
have delegated contracting authority. However, an authorized official 
may later ratify and execute otherwise proper contracts that were made 
by individuals without contracting authority or by Contracting Officers 
in excess of their delegated authority. The ratification shall be in the 
form of a written document that clearly states that ratification of a 
previously unauthorized act is intended.
    (2) The HCA is the official authorized to ratify an unauthorized 
commitment--but see paragraph (b)(3) of this section.
    (3) The HCA may redelegate ratification authority for actions up to 
$100,000 to the Chief of the Contracting Office (CCO). No other 
redelegations are authorized.
    (c) Limitations.
    (5) The concurrence of legal counsel concerning an unauthorized 
commitment is optional. If a contracting activity determines that a 
legal review is necessary, the HCA or CCO shall coordinate the request 
for ratification with the Office of General Counsel (OGC), General Law 
Division (GLD).
    (e) Procedures.
    (1) The individual who is responsible for the unauthorized 
commitment shall provide the reviewing Contracting Officer all records 
and documents concerning the commitment and a complete written statement 
of facts, including a description of the requirement; the estimated or 
agreed upon price; the funds citation; an explanation of why the 
contracting office was not used and why the proposed contractor was 
selected; a list of other sources considered; and a statement as to 
whether the contractor has commenced work or an item has been delivered.
    (2) The Contracting Officer shall review the submitted material and, 
if the Contracting Officer determines that the ratification request has 
merit, prepare it for ratification. The Contracting Officer shall 
forward the ratification document and related materials to the HCA or 
CCO, as appropriate, with any comments or information which the 
approving official should consider in evaluating the ratification 
request.
    (3) If the HCA or CCO approves the ratification request, the 
Contracting Officer shall issue a purchase order or contract, as 
appropriate, upon return of the approved ratification document and file.



Sec. 301.603  Selection, appointment, and termination of appointment of 
          Contracting Officers.



Sec. 301.603-1  General.

    (a) The HCA (non-delegable) shall select, appoint, and terminate the 
appointment of Contracting Officers--i.e., those individuals who are 
authorized to obligate the Government to the expenditure of funds for 
contracts and orders with dollar values that exceed (or

[[Page 8]]

are expected to exceed) the micro-purchase threshold. The procedures for 
selecting and appointing Contracting Officers apply to HHS employees. 
HCAs may not issue HHS Contracting Officer warrants to contractor 
personnel. OPDIVs shall follow local procedures in the event that the 
signature of another authorized official, in addition to that of the 
HCA, is required to appoint or terminate the appointment of Contracting 
Officers.
    (b) The HCA shall use Standard Form (SF) 1402, ``Certificate of 
Appointment,'' (also known as a warrant) to appoint personnel, whether 
in the General Schedule (GS) 1102 series or other series, as Contracting 
Officers. The SF 1402 shall indicate the Contracting Officer's warrant 
level--i.e., maximum dollar signature authority (e.g., $1 million or 
``unlimited'') and any other limitations or restrictions. The HCA shall 
make changes to a Contracting Officer appointment (other than a 
termination of an appointment as provided in 301.603-4) by issuing a 
revised SF 1402. FAR 1.603-1 prescribes the requirements for preparing 
and maintaining Contracting Officer warrants.
    (c) Before an HCA may appoint an individual as a Contracting 
Officer, the individual must be certified in accordance with either the 
Federal Acquisition Certification in Contracting (FAC-C) program or the 
HHS Simplified Acquisition Certification (SAC) program, as appropriate, 
at the level required for the warrant authority requested. See 301.603-
72 and the HHS Contracting Workforce Training and Certification 
Handbook.
    (d) The dollar amount of an individual transaction determines 
whether a Contracting Officer has the authority to sign it in accordance 
with the delegated authority specified on the SF 1402. For new or 
follow-on awards, the dollar amount of an individual transaction is the 
amount obligated at the time of contract or order award plus any 
potential option amounts or future funding amounts established by the 
transaction. However, under an existing contract or order, when an 
option is subsequently exercised or a contact or order is otherwise 
modified to add funding, the dollar amount of the modification 
(individual transaction) determines whether a Contracting Officer has 
the necessary delegated authority to sign it.
    (e) For individuals that will exercise acquisition authorities 
(other than solely purchase card authorities) at or below the micro-
purchase threshold, the HCA may--
    (1) Use a document other than the SF 1402, such as a memorandum, 
that indicates a maximum dollar signature authority for individual 
transactions; and
    (2) Determine training requirements for individuals who will 
exercise acquisition authorities at dollar levels below the micro-
purchase threshold level.



Sec. 301.603-2  Selection and appointment.

    Contracting activities shall provide nominations for appointment of 
Contracting Officers through appropriate acquisition channels to the HCA 
for review. The HCA shall appoint an individual as a Contracting Officer 
only when a valid organizational need is demonstrated and after 
considering such factors as volume of actions, complexity of work, and 
structure of the requesting organization. The HCA shall also ensure that 
a Contracting Officer candidate meets the FAC-C or HHS SAC certification 
requirements, as appropriate. Consistent with FAR 1.603-2, the HCA shall 
determine the documentation required when the requested appointment and 
authority will not exceed the micro-purchase threshold.



Sec. 301.603-3  Interim appointments.

    If it is essential to appoint an individual as a Contracting Officer 
who does not yet fully meet the FAC-C or HHS SAC certification 
requirements for the signature authority sought, the HCA (non-delegable) 
may make an interim appointment for up to 2 years. If an extension of 
time has been granted, but the individual does not complete the 
certification requirements by the extended date, the HCA's approval for 
the interim appointment will automatically terminate on that date.



Sec. 301.603-4  Termination of appointments.

    The HCA shall terminate or revoke Contracting Officer appointments 
in accordance with FAR 1.603-4.

[[Page 9]]



Sec. 301.603-70  Delegation of Contracting Officer responsibilities.

    (a) Contracting Officers may re-delegate their acquisition 
responsibilities that do not involve the obligation or deobligation of 
funds, but involve the expenditure of previously obligated funds (such 
as approval of contractor scientific meeting travel and subcontract 
consent) to acquisition staff (for example, those in the GS-1100 series) 
by means of a written memorandum that clearly delineates the delegation 
and its limits. See 301.604 for responsibilities that Contracting 
Officers may delegate to technical personnel.
    (b) Contracting Officers may designate individuals as ordering or 
approving officials to make purchases or place/approve orders under 
blanket purchase agreements (BPAs), indefinite-delivery, indefinite 
quantity (IDIQ) contracts, or other pre-established mechanisms. Ordering 
officials are not Contracting Officers.



Sec. 301.603-71  Waivers to warrant standards.

    There may be an unusual circumstance that requires issuance of a 
warrant to an individual who does not fully meet the FAC-C or HHS SAC 
certification program requirements. Contracting activities shall provide 
any request for a waiver of the FAC-C program requirements and policies 
in writing to the Senior Procurement Executive (SPE), through the HCA, 
for review and approval. The SPE (non-delegable) will either approve or 
disapprove in writing the request for waiver. The HCA (non-delegable) 
may approve or disapprove a waiver of the HHS SAC program requirements.



Sec. 301.603-72  FAC-C and HHS SAC certification requirements.

    (a) The FAC-C certification program is available to all acquisition 
staff who are/will be involved as Contracting Officers or Contract 
Specialists in acquisitions exceeding the simplified acquisition 
threshold. Personnel who, as part of prior certification programs, have 
completed some or all of the required training or have attained 
certification thereunder are not required to re-take training courses, 
but shall follow FAC-C training requirements when considering additional 
or required core training, if needed. See 301.603-74 for information 
regarding retention of certification, including the requirement to earn 
continuous learning points (CLPs). FAC-C certification also does not 
apply to--
    (1) The SPE;
    (2) Senior level officials responsible for delegating acquisition 
authority;
    (3) Personnel who are not in the GS-1102 series whose warrants are 
used to acquire emergency goods and services; or
    (4) Personnel who are not in the GS-1102 series whose warrants are 
so limited as to be outside the scope of this program, as determined by 
the Chief Acquisition Officer (CAO). (Note: The HHS CAO has determined 
that individuals with warrants which are limited to simplified 
acquisitions are deemed to be outside the scope of the FAC-C program.)
    (b) HHS does not require personnel with Contracting Officer warrants 
issued prior to January 1, 2007 to be FAC-C certified unless they are 
seeking a change in authority on or after that date. Individuals 
applying for a new Contracting Officer warrant or an increase in warrant 
authority on or after January 1, 2007, regardless of GS series, must be 
FAC-C certified at the level appropriate for the warrant authority 
sought. To obtain an unlimited warrant, FAC-C Level III certification is 
required. (Note: New Contracting Officer warrants are defined in the 
Office of Federal Procurement Policy's (OFPP's) FAC-C memorandum, dated 
January 20, 2006, as warrants issued to employees for the first time at 
a department or agency.)
    (c) The FAC-C certification is based on three sets of requirements: 
Education, training, and experience, and the requirements are 
cumulative--i.e., an individual must meet the requirements of each 
previous certification level before attaining a higher level 
certification. The FAC-C certification requirements, including 
additional HHS-specific training requirements for certain types of 
acquisitions, are specified in the HHS Contracting Workforce Training 
and Certification Handbook.

[[Page 10]]

    (d) HHS SAC certification is based on three sets of requirements: 
Training, experience, and satisfactory performance rating. Personnel who 
are involved in the award of simplified acquisitions must meet the 
appropriate HHS SAC certification requirements. (Note: While personnel 
who are FAC-C certified are not required to obtain HHS SAC certification 
in order to award simplified acquisitions, they should obtain 
appropriate training before doing so.) The HHS SAC certification 
requirements, including additional HHS-specific training requirements 
for certain types of acquisitions, are specified in the HHS Contracting 
Workforce Training and Certification Handbook.



Sec. 301.603-73  Additional HHS training requirements.

    HHS acquisition personnel are required to complete, as applicable, 
the additional training requirements specified below. These courses may 
be used as electives for the purpose of satisfying FAC-C requirements or 
as continuous learning for maintenance of FAC-C or SAC certifications.
    (a) Earned value management training. Effective January 1, 2010, all 
personnel in the GS-1102 series who are responsible for, or may become 
responsible for, the award or administration of any contract to which 
earned value management (EVM) is applied pursuant to 334.201(a) or (b) 
must successfully complete an EVM training course before they commence 
administration of the contract or are authorized to award the contract. 
After completion of the initial course, a refresher course is required 
every 2 years. This course is in addition to the training requirements 
for FAC-C certification at the specified levels. Determination of course 
suitability shall be made by the Operating Division (OPDIV) HCA, in 
conjunction with HHS' Office of the Chief Information Officer (OCIO) or 
Office of Facilities Management and Policy (OFMP), as appropriate. To be 
eligible, the basic and refresher courses must each be 8 hours or more 
in length.
    (b) Performance based acquisition training. Effective January 1, 
2010, all GS-1102s, who award or administer service contracts, are 
required to complete a Performance-Based Acquisition (PBA) course prior 
to assuming such responsibilities. Refresher training in PBA is required 
every 4 years. To be eligible, a course must be 8 hours or more in 
length. Determination of course suitability shall be made by the HCA.
    (c) Federal appropriations law training. Effective January 1, 2010, 
all GS-1102s and GS-1105s are required to complete both HHS University's 
classroom-based and on-line Federal appropriations law course, by 
January 1, 2011 (for current employees) and within 1 year of entering on 
duty (for new employees). Employees are required to take the HHS 
University on-line course as refresher training every year. 
Determination of course equivalency shall be made by the HCA.
    (d) Green purchasing training. Effective January 1, 2010, all GS-
1102s and GS-1105s are required to complete green purchasing training by 
January 1, 2011 (for current employees) and within 1 year of entering on 
duty (for new employees). Refresher training is required every 2 years. 
To be eligible, a course must be 4 hours or more in length. 
Determination of course suitability shall be made by the HCA.
    (e) Section 508 training. When the HHS Office on Disability (OD) so 
requires, all GS-1102s, GS-1105s and GS-1106s who award or administer 
acquisitions that involve electronic information technology (EIT) 
products or services (subject to Section 508 of the Rehabilitation Act 
of 1973 and pertinent HHSAR provisions), must complete all applicable OD 
sponsored training. For information on frequency, timing, and duration 
of the training requirement, personnel shall consult with the HHS OD.
    (f) Training policy exceptions--(1) EVM training. In the event that 
there is an urgent requirement for a Contracting Officer/Contract 
Specialist to award or administer a project to which EVM will be 
applied, and the individual has not yet met the EVM training 
requirement, the HCA (non-delegable) may authorize the individual to 
perform the position duties, provided that the individual meets the 
training requirement within 9 months from the date of assignment to the 
contract. If the individual does not complete the training requirement 
within 9 months, the

[[Page 11]]

HCA's approval for the individual's assignment to the contract will 
automatically terminate on that date. The Contract Specialist is not 
required to take the class as long as the Contract Specialist is working 
under the direction of a Contracting Officer who has taken an EVM 
course.
    (2) Other additional HHS training. The HCA (non-delegable) may grant 
a time extension of up to 9 months to an individual to complete the PBA, 
Federal appropriations law, green purchasing, and Section 508 training 
requirements, including completion of refresher training. If the 
individual does not complete the training requirement within the 
extension period, the HCA's approval will automatically terminate on 
that date.

[74 FR 62398, Nov. 27, 2009, as amended at 75 FR 21509, Apr. 26, 2010]



Sec. 301.603-74  Requirement for retention of FAC-C and HHS SAC 
          certification.

    To maintain FAC-C certification, all warranted Contracting Officers, 
regardless of series, as well as Contract Specialists, must earn 80 CLPs 
every 2 years. To maintain HHS SAC certification, all individuals with 
delegated Contracting Officer authority, including those in the GS-1102, 
GS-1105, GS-1106, and non-1100 series, must earn a minimum of 40 hours 
(CLPs) every 2 years after completing all mandatory training 
requirements. FAC-C and HHS SAC certification will expire if the CLPs 
are not earned every 2 years (from the date of initial certification or 
re-certification) and, if applicable, may result in a loss of warrant 
authority. (Note: The certification programs' continuous learning 
requirement applies to all applicable personnel, including those who 
were certified under prior certification programs.)



Sec. 301.604  Training and certification of Contracting Officers' 
          Technical Representatives.



Sec. 301.604-70  General.

    In accordance with the Federal Acquisition Certification for 
Contracting Officers' Technical Representatives (FAC-COTR) program, HHS 
has established a training program for certification and designation of 
personnel as COTRs--see HHS' Federal Acquisition Certification for 
Contracting Officers' Technical Representatives Program Handbook (COTR 
Handbook), dated January 2009, for information on the methods for 
earning FAC-COTR certification. See also 302.101(c) for further 
information regarding the definition of a COTR and when designation of a 
COTR is appropriate. All references to COTRs also apply to their 
alternates.

[74 FR 62398, Nov. 27, 2009, as amended at 75 FR 21509, Apr. 26, 2010]



Sec. 301.604-71  HCA authorities and responsibilities.

    (a) HCAs are authorized to determine (1) equivalencies for the Basic 
Contracting Officer's Technical Representative Course; (2) course 
prerequisites; and (3) approve completion of CLP continuous learning 
activities, education, and training for maintenance of COTR 
certification. This authority does not apply to EVM training--see 
301.603-73. Course equivalencies must meet the Federal Acquisition 
Institute's (FAI's) required COTR competencies. HCAs may re-delegate the 
authorities in (1) and (2) to OPDIV Acquisition Career Managers (ACMs) 
or other comparable officials.
    (b) In addition to the authorities specified in 301.604-71(a), HCAs 
or their designees (except where the authority is shown as non-
delegable) are responsible for--
    (1) Reviewing a candidate's qualifications to be a COTR;
    (2) Granting, suspending, denying, and revoking COTR certifications 
and their continuance;
    (3) Authorizing (non-delegable) an individual to perform COTR duties 
on an interim basis for up to 90 days--see 301.604-73; and
    (4) Determining (non-delegable) on a case-by-case basis whether to 
postpone (for up to 90 days) withdrawal of any interim COTR delegation 
for failure of a candidate to qualify for certification--see 301.604-73.



Sec. 301.604-72  Requirements for certification maintenance.

    Maintaining HHS FAC-COTR certification requires at least 40 relevant 
CLPs every 2 years. See Appendix A of

[[Page 12]]

OFPP's FAC-COTR memorandum, dated November 26, 2007, and HHS' COTR 
Handbook for information on CLPs.

[75 FR 21509, Apr. 26, 2010]



Sec. 301.604-73  Certification policy exception.

    (a) In the event that an individual who is not currently certified 
under HHS' FAC-COTR program is urgently required to serve as a COTR, the 
head of the sponsoring program office (Program Manager) or designee 
(e.g., the immediate supervisor) may request, and the HCA (non-
delegable) may authorize, the individual to perform the designated 
duties on an interim basis for up to 6 months, provided that--
    (1) The individual agrees to become certified during that period and 
provides evidence of training course registration; and
    (2) Prior to assignment to the contract, the individual meets with 
the cognizant Contracting Officer to discuss the role and specific 
responsibilities of a COTR and the interrelationships, as applicable, 
among the Project Officer, Contracting Officer, Program/Project Manager, 
and COTR functions.
    (b) If an extension has been granted, but the individual does not 
complete the training by the extended date, the HCA's approval for the 
individual's assignment to the contract will automatically terminate on 
that date.



Sec. 301.604-74  Additional COTR training requirements.

    (a) See HHS' COTR Handbook for information on additional COTR 
training requirements.
    (b) Training policy exceptions--(1) EVM training. In the event that 
there is an urgent requirement for a COTR to administer a contract to 
which EVM will be applied, and the individual has not yet met the EVM 
training requirement, the HCA (non-delegable) may authorize the 
individual to perform the position duties, provided that the individual 
meets the training requirement within 9 months from the date of 
assignment to the contract. If the individual does not complete the 
training requirement within 9 months, the HCA's approval for the 
individual's assignment to the contract will automatically terminate on 
that date. In addition, during any extension period, the COTR must work 
under the direction of a COTR, or Program/Project Manager who has taken 
an EVM course.
    (2) Other additional HHS training. The HCA (non-delegable) may grant 
a time extension of up to 9 months to a COTR to complete the PBA, 
Federal appropriations law, and green purchasing training requirements, 
including completion of refresher training. If the individual does not 
complete the training requirement within the extension period, the HCA's 
approval will automatically terminate on that date.

[75 FR 21509, Apr. 26, 2010]



Sec. 301.605  Contracting Officer designation of Contracting Officer 
          Technical Representative.

    The Contracting Officer shall ensure that a COTR candidate is 
currently certified under HHS' FAC-COTR program before delegating 
authority to that individual to act as a COTR. Even if an individual is 
FAC-COTR-certified, a candidate becomes a COTR only when a Contracting 
Officer provides in writing the authorities the individual may exercise 
for a specified contract or order. Authority for such designations rests 
solely with the Contracting Officer. The Contracting Officer shall 
retain in the contract or order file the individual's active FAC-COTR 
certificate. In the event that the HCA has granted an exception--see 
301.604-73, the Contracting Officer shall include the HCA's approval in 
the file.



Sec. 301.606  Training requirements for Project Officers.



Sec. 301.606-70  General.

    HHS has established a program for training personnel for 
certification and designation as Project Officers. See 302.101(g) for 
further information regarding the definition of a Project Officer and 
when designation of a Project Officer is appropriate. All references to 
Project Officers also apply to their alternates. Program Managers or 
their designees are authorized to designate individuals to serve as 
Project Officers. (Note: If an individual will also serve as the COTR 
for a proposed project, the

[[Page 13]]

individual shall comply with the training certification requirements for 
COTRs--see 301.604.)



Sec. 301.606-71  Project Officer training.

    Before an individual may perform the duties of a Project Officer, 
including development of an Acquisition Plan (AP) or other acquisition 
request documentation--see 307.71, for a proposed project, the Program 
Manager or designee shall designate an individual as a Project Officer 
in writing by means of a memorandum to the Project Officer candidate 
with a copy to the cognizant Contracting Officer. A Project Officer must 
successfully complete HHS University's Basic Contracting Officer's 
Technical Representative Course or equivalent and any OPDIV-specific 
course prerequisites. The Project Officer must provide a course 
completion certificate to the Contracting Officer with any AP or other 
acquisition request documentation submitted. See HHS' COTR Handbook for 
additional information on the basic training requirement for Project 
Officers and guidance on the training requirement for technical proposal 
evaluators in 315.305(a)(3)(ii).

[74 FR 62398, Nov. 27, 2009, as amended at 75 FR 21509, Apr. 26, 2010]



Sec. 301.606-72  Delegation of authority to HCAs.

    HCAs are authorized to determine equivalencies for the Basic 
Contracting Officer's Technical Representative Course and any OPDIV-
specific course prerequisites. This authority may be re-delegated to 
OPDIV acquisition ACMs or other comparable officials.



Sec. 301.606-73  Requirements for continuous learning maintenance.

    Designated Project Officers require at least 40 relevant CLPs every 
2 years. See HHS' COTR Handbook for information on CLPs.

[75 FR 21510, Apr. 26, 2010]



Sec. 301.606-74  Training policy exception.

    (a) In the event that an individual who has not successfully 
completed the required training course is urgently required to serve as 
a Project Officer, the Program Manager or designee may authorize the 
individual to perform the designated duties on an interim basis for up 
to 6 months, provided that--
    (1) The individual agrees to take the Basic Contracting Officer's 
Technical Representative course during that period and provides evidence 
of course registration; and
    (2) The individual meets, prior to assignment to the project, with 
the cognizant Contracting Officer to discuss the specific role and 
responsibilities of a Project Officer and the interrelationships, as 
applicable, among the Project Officer, Contracting Officer, Program/
Project Manager, and COTR functions.
    (b) If an extension of time has been granted, but the individual 
fails to complete the training by the extended date, the Program 
Manager's or designee's approval for the individual's assignment to the 
project will automatically terminate on that date.

[74 FR 62398, Nov. 27, 2009. Redesignated at 75 FR 21509, Apr. 26, 2010]



Sec. 301.606-75  Additional Project Officer training requirements.

    (a) See HHS' COTR Handbook for information on additional training 
requirements.
    (b) Training policy exceptions--(1) EVM training. In the event that 
there is an urgent requirement to assign a Project Officer to a contract 
project to which EVM will be applied, and the individual has not yet met 
the EVM training requirement, the HCA (non-delegable) may authorize the 
individual to perform the position duties, provided that the individual 
meets the training requirement within 3 months from the date of 
submission of the AP or other acquisition request documentation to the 
contracting office. If the individual does not complete the training 
requirement within the extension period, the HCA's approval for the 
individual's assignment to the project will automatically terminate on 
that date. In addition, during any extension period, the Project Officer 
must work under the direction of a Project Officer, COTR, or Program/
Project Manager who has taken an EVM course.
    (2) Other additional HHS training. The HCA (non-delegable) may grant 
a time extension of up to 9 months to a Project Officer to complete the 
PBA,

[[Page 14]]

Federal appropriations law, and green purchasing training requirements, 
including completion of refresher training. If the individual does not 
complete the training requirement within the extension period, the HCA's 
approval will automatically terminate on that date.

[75 FR 21510, Apr. 26, 2010]



Sec. 301.607  Certification of Program and Project Managers.



Sec. 301.607-70  General.

    In accordance with the Federal Acquisition Certification--Program 
and Project Managers (FAC-P/PM) program, HHS has established a 
certification program for Program or Project Managers. See HHS' Federal 
Acquisition Certification--Program and Project Managers Handbook (P/PM 
Handbook) for information on the methods for earning FAC-P/PM 
certification.



Sec. 301.607-71  FAC-P/PM levels and requirements.

    (a)(1) The FAC-P/PM certification program specifies three different 
levels of certification, depending on the core competency, training, and 
experience required to manage different types of acquisitions--
    (i) Entry/Apprentice--Level I;
    (ii) Mid-level/Journeyman--Level II; and
    (iii) Senior/Expert--Level III.
    (2) Each FAC-P/PM certification level is independent of the others--
i.e., applicants for the Senior/Expert level need not have been 
certified at the Mid-level/Journeyman or Entry/Apprentice levels. 
General and specific core competencies, training, and required 
experience vary by certification level. (Note: Individuals certified 
under the FAC-P/PM program meet the general competency and experience 
standards for P/PM certification. However, IT Program and Project 
Managers should attain/demonstrate IT-specific P/PM requirements. See 
Appendix C, Federal Acquisition Certification--Program and Project 
Managers--Information Technology Technical Competencies, in the P/PM 
Handbook for additional information.
    (b)(1) Competencies. An applicant can satisfy the competency 
requirements through:
    (i) Successful completion of training;
    (ii) Completion of comparable education or certification programs;
    (iii) Demonstration of knowledge, skills, and abilities; or
    (iv) Any combination of these three.
    (2) The FAI describes the following three sets of general core 
competencies on its Web site:
    (3) General Business Competencies: Includes decision-making, 
interpersonal skills, oral communication, team-building, and writing.
    (4) Technical Competencies: Includes contracting, financial 
management, quality assurance, and risk management.
    (5) Essential Competencies and Proficiencies: Includes management 
processes, systems engineering, test and evaluation, contracting, and 
business.
    (6) Specific core competencies also apply to the three certification 
levels. See Chapter 2, Federal Acquisition Certification--Program and 
Project Managers--Requirements and Performance Accountability, in the P/
PM Handbook for additional information.
    (c) Training. (1) Suggested training includes coursework, varying 
from 16-24 hours in duration, in:
    (i) Acquisition;
    (ii) Project management;
    (iii) leadership and interpersonal skills;
    (iv) Government-specific training; and
    (v) Earned value management and cost estimating.
    (2) The depth of the training for each course required may vary by 
certification level.
    (d) Experience. Experience requirements vary by certification level. 
For example, for certification at the Entry/Apprentice--Level I, at 
least 1 year of project management experience within the last 5 years is 
required. The Mid-level/Journeyman--Level II requires at least 2 years 
of program or project management experience within the last 5 years. The 
Senior/Expert--Level III requires at least 4 years of program and 
project management experience on Federal projects within the last 5 
years.

[[Page 15]]

    (e) Additional OPDIV guidance. OPDIVs may issue supplemental 
guidance and requirements for selection and assignment of Program and 
Project Managers and require additional skills and competencies to meet 
organizational or mission needs. However, OPDIVs may not reduce the 
requirements specified in the P/PM Handbook.



Sec. 301.607-72  Applicability.

    (a) The FAC-P/PM certification prerequisites and continuous learning 
requirements apply to all HHS employees who seek to obtain a FAC-P/PM 
certification. Although obtaining a FAC-P/PM certification qualifies 
employees to serve as a Program or Project Manager, it does not ensure 
their selection or designation as such. (Note: Contractors and their 
employees are not eligible to be certified or to serve as Program or 
Project Managers.)
    (b) Mandatory certification is limited to major and non-major IT and 
construction capital investment acquisitions. Consistent with OFPP 
guidance, HHS requires FAC-P/PM Level III certification for Program and 
Project Managers responsible for major IT and construction capital 
investments--i.e., those requiring preparation of an OMB Exhibit 300, 
HHS Form 300, or equivalent. An individual must obtain FAC-P/PM Level 
III certification within 1 year from the date of being assigned to such 
a major capital investment. Also, HHS requires that an individual obtain 
FAC-P/PM Level II or I certification for non-major IT and construction--
i.e., tactical or supporting, capital investments, respectively, within 
2 years from the date of being assigned to such a non-major capital 
investment. See Appendix A, Federal Acquisition Certification--Program 
and Project Managers--HHS Projects and Programs with Associated 
Certification Levels, in the P/PM Handbook for additional information 
regarding major and non-major IT and construction capital investments. 
FAC-P/PM certification for other types of investments [e.g., advanced 
research and development (R & D)] is encouraged, but is not mandatory.



Sec. 301.607-73  Certification waivers.

    (a) Waivers to certification requirements may be approved in certain 
situations. Waivers for additional time to complete certification 
requirements are not necessary for the first year following an 
assignment to a major IT or construction capital investment and for 2 
years following an assignment to a non-major capital investment. For 
waivers beyond those periods (for up to 1 additional year), the HHS 
Chief Information Officer (CIO) (for IT programs and projects) and the 
Deputy Assistant Secretary for Facilities Management and Policy (DASFMP) 
(for construction programs and projects) are delegated authority to 
approve waiver requests. The HHS CAO is the only individual authorized 
to approve waiver requests for additional time beyond the initial 1-year 
waiver period.
    (b) Approval of a waiver request does not relieve an individual from 
meeting the certification requirements. Also, unlike FAC-P/PM 
certifications, waivers issued by other Federal departments and agencies 
do not transfer to HHS, since a waiver is agency-specific.



Sec. 301.607-74  Certification transfers.

    (a) HHS recognizes and accepts FAC-P/PM certifications issued by 
other Federal departments and agencies. In addition, HHS complies with 
FAI determinations as to which certifications by organizations outside 
the Federal government are eligible for full or partial consideration 
under FAC-P/PM. See FAI's Web site, and Chapter 3, Federal Acquisition 
Certification--Program and Project Managers--Application and 
Certification Procedures, in the P/PM Handbook for additional 
information.
    (b) A certification transfer should not be initiated when an 
individual, who holds a current FAC-P/PM certification from another 
Federal department or agency, becomes an HHS employee. Instead, the 
individual must apply for recertification (which will result in issuance 
of an HHS certification) at the time the candidate's immediate 
supervisor performs the bi-annual assessment to determine whether the 
individual has met the HHS FAC-P/PM CLP requirements.

[[Page 16]]



Sec. 301.607-75  Maintenance of FAC-P/PM certification.

    (a) FAC-P/PM certification lasts for 2 years. To maintain FAC-P/PM 
certification, HHS Program and Project Managers are required to earn 80 
CLPs of skills currency every 2 years, starting from the date of their 
initial certification or recertification, and document completion of all 
training. If the required CLPs are not earned within each 2-year period, 
a FAC-P/PM certification will lapse. Lapsed certifications may be 
reinstated when 80 CLPs have been accumulated.
    (b) Continuous learning activities related to FAC-P/PM include, but 
are not limited to--
    (1) Training activities, such as teaching, self-directed study, and 
mentoring;
    (2) Courses completed to achieve certification at the next higher 
level;
    (3) Professional activities, such as attending/speaking/presenting 
at professional seminars/symposia/conferences, publishing papers, and 
attending workshops;
    (4) Educational activities, such as formal training and formal 
academic programs; and
    (5) Experience, such as developmental or rotational assignments.
    See Appendix F, Federal Acquisition Certification--Program and 
Project Managers--Guidance on Meeting Requirements for Continuous 
Learning Points, in the P/PM Handbook for additional information.



Sec. 301.607-76  FAC-P/PM application process.

    The P/PM Handbook contains application procedures and forms to be 
completed for basic certification; certification transfer; certification 
through fulfillment; recertification; and certification waiver. 
Applicants for HHS FAC-P/PM certification actions shall comply with the 
requirements and procedures specified in the P/PM Handbook and refer any 
questions to their OPDIV ACM for resolution.



Sec. 301.607-77  Governance.

    The Departmental ACM, in ASFR/OGAPA/DA, serves as the Departmental 
FAC-P/PM Program Manager and is responsible for administering the 
program. To support the overall management of the FAC-P/PM certification 
program at the OPDIV level, Executive Officers and their HCAs may either 
use their existing ACM or designate an additional ACM, whose 
professional background includes program and project management. See 
Appendix B, Federal Acquisition Certification--Program and Project 
Managers--Roles and Responsibilities, in the P/PM Handbook for 
additional information.

[74 FR 62398, Nov. 27, 2009. Redesignated at 75 FR 21510, Apr. 26, 2010]



Sec. 301.607-78  Contracting Officer designation of a Program/Project 
          Manager as the Contracting Officer's Technical Representative.

    Personnel who are FAC-P/PM certified, at any level, meet the 
requirements for FAC-COTR certification and are, therefore, not required 
to obtain FAC-COTR certification to serve as a COTR for an HHS 
acquisition. However, for those individuals serving as a Program or 
Project Manager under a FAC-P/PM certification waiver--see 301.607-73, 
the Contracting Officer shall ensure that the individual meets the 
requirements of HHS' FAC-COTR program before delegating authority to 
that individual to act as a COTR. See 301.605 for additional information 
regarding the Contracting Officer's designation of a COTR.

[74 FR 62398, Nov. 27, 2009. Redesignated at 75 FR 21510, Apr. 26, 2010]



Sec. 301.608  Training requirements for purchase cardholders, Approving 
          Officials, and Agency/Organization Program Coordinators.

    Training requirements for purchase cardholders, Approving Officials, 
and Agency/Organization Program Coordinators are listed in the following 
table:

         HHS Purchase Card Training Program, by Authority Level
------------------------------------------------------------------------
                                                      Required training
        Authority \a\          Program participant           \b\
------------------------------------------------------------------------
Up to $3,000................  Prospective/newly     Basic purchase card
                               appointed purchase    training (HHS
                               cardholders and       University course
                               Approving Officials.  or an OPDIV
                                                     equivalent course).
                              Purchase card         Yearly refresher
                               holders and           purchase card
                               Approving Officials.  training.

[[Page 17]]

 
$3,001 to $25,000...........  Prospective/newly     
                               appointed purchase    Basic purchase card
                               cardholders and       training (HHS
                               Approving Officials.  University course
                                                     or an equivalent).
                                                    
                                                     Basic simplified
                                                     acquisition
                                                     procedures (e.g.,
                                                     DAU's CON 237).
                                                    
                                                     Advanced simplified
                                                     acquisition
                                                     procedures or
                                                     Appropriations law.
                              Purchase card         Yearly refresher
                               holders and           purchase card
                               Approving Officials.  training.
$25,001 to $100,000.........  Prospective/newly     
                               appointed purchase    Basic purchase card
                               cardholders and       training (HHS
                               Approving Officials.  University course
                                                     or an OPDIV
                                                     equivalent course).
                                                    
                                                     Basic simplified
                                                     acquisition
                                                     procedures (e.g.,
                                                     DAU's CON 237).
                                                    
                                                     Advanced simplified
                                                     acquisition
                                                     procedures or
                                                     Appropriations law.
                                                    
                                                     CON 100 (Shaping
                                                     Smart Business
                                                     Arrangements).
                                                    
                                                     CON 110 (Mission
                                                     Support Planning).
                              Purchase cardholders  Yearly refresher
                               and Approving         purchase card
                               Officials.            training.
Not applicable..............  Prospective/newly     
                               appointed Agency/     Basic purchase card
                               Organization          training (HHS
                               Program               University course
                               Coordinators.         or an OPDIV
                                                     equivalent course).
                                                    
                                                     Basic simplified
                                                     acquisition
                                                     procedures or DAU's
                                                     CON 237.
                                                    
                                                     Advanced simplified
                                                     acquisition
                                                     procedures or
                                                     appropriations law.
                                                    
                                                     CON 100 (Shaping
                                                     Smart Business
                                                     Arrangements).
                                                    
                                                     CON 110 (Mission
                                                     Support Planning).
                              Agency/Organization   Yearly refresher
                               Program               purchase card
                               Coordinators.         training
                                                     (attendance at
                                                     GSA's annual
                                                     training conference
                                                     satisfies refresher
                                                     training).
------------------------------------------------------------------------
\a\ Cardholders and Approving Officials with authorized increases in
  delegation of procurement authority (DPA) have up to 3 months to
  complete the training requirements for the new DPA.
\b\ CON 237, CON 100, and CON 110 are available at the DAU Web site at
  http://www.dau.mil/registrar/enroll.asp. CON 100 is also offered
  through HHS University (see Web site at: http://learning.hhs.gov).

                 PART 302_DEFINITIONS OF WORDS AND TERMS

                        Subpart 302.1_Definitions

Sec.

Sec. 302.101 Definitions.

                    Subpart 302.2_Definitions Clause


Sec. 302.201 Contract clause.

         Subpart 302.70_Common HHSAR Acronyms and Abbreviations


Sec. 302.7000 Common HHSAR acronyms and abbreviations.

            Subpart 302.71_HHS Standard Templates and Formats


Sec. 302.7100 HHS standard templates and formats

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

    Source: 74 FR 62398, Nov. 27, 2009, unless otherwise noted.

                        Subpart 302.1_Definitions



Sec. 302.101  Definitions.

    (a) Agency head or head of the Agency, unless otherwise stated, 
means the head of the OPDIV for: AHRQ; CDC; CMS; FDA; HRSA; IHS; NIH; 
SAMHSA; and ASFR for the Office of the Secretary (OS), including PSC. 
The Assistant Secretary for Preparedness and Response (ASPR) is the head 
of the agency for BARDA contracting functions.
    (b) Chief of the Contracting Office is typically a mid-level 
management official, usually an office director, division director, or 
branch chief, who manages and monitors the daily contract operations of 
an OPDIV or major component of an OPDIV. The CCO is subordinate to the 
HCA, except where the same individual is the HCA and CCO.
    (c) Contracting Officer's Technical Representative is a Federal 
employee whom a Contracting Officer has designated in writing to act as 
the Contracting Officer's representative in monitoring and administering 
specified aspects of contractor performance after award of a

[[Page 18]]

contract or order that exceeds the simplified acquisition threshold. 
(Note: In accordance with local procedures, OPDIVs may designate COTRs 
for contracts or orders estimated to be less than the simplified 
acquisition threshold.) These activities may include verifying that:
    (1) The contractor's performance meets the standards set forth in 
the contract;
    (2) The contractor meets the contract/order's technical requirements 
by the specified delivery date(s) or within the period of performance; 
and
    (3) The contractor performs within the fixed price or cost ceiling 
stated in the contract or order. COTRs must meet the training and 
certification requirements specified in 301.604.
    (d) Head of the contracting activity is an official who has overall 
responsibility for managing a contracting activity--i.e., the 
organization within an OPDIV or other HHS organization which has been 
delegated broad authority regarding the conduct of acquisition 
functions.
    (1) The HHS HCAs are as follows:

AHRQ: Director, Division of Contracts Management.
ASPR: Director, Office of Acquisitions Management, Contracts and Grants.
CDC: Director, Procurement and Grants Office.
CMS: Director, Office of Acquisition and Grants Management.
FDA: Director, Office of Acquisitions and Grant Services.
HRSA: Director, Office of Acquisition Management and Policy.
IHS: Director, Division of Acquisition Policy.
NIH: Director, Office of Acquisition and Logistics Management.
PSC: Director, Strategic Acquisition Service.
SAMHSA: Director, Division of Contracts Management.

    (2) Each HCA shall conduct an effective and efficient acquisition 
program; establish adequate controls to ensure compliance with 
applicable laws, regulations, procedures, and the dictates of good 
management practices; and conduct periodic reviews to evaluate and 
determine the extent of adherence to prescribed policies and regulations 
and the need for guidance and training.
    (3) HCAs may redelegate their authorities to the extent that 
redelegation is not prohibited by the terms of their respective 
delegations of authority, by law, by the FAR, by the HHSAR, or by other 
regulations. To ensure proper control of redelegated acquisition 
authorities, HCAs shall maintain a file containing successive 
delegations of HCA authority through the Contracting Officer level.
    (e) Program Manager is a federal employee whom an OPDIV official or 
designee one level above the head of the sponsoring program office has 
designated in writing to act as a Program Manager for a group of related 
major or non-major IT or construction capital investments--see HHS' P/PM 
Handbook. See also Appendix D, Relationship between Program Management 
and Project Management, of OFFP memorandum entitled ``The Federal 
Acquisition Certification for Program and Project Managers,'' dated 
April 25, 2007. Program Managers must meet the FAC-P/PM certification 
requirements in 301.607. A Program Manager may also be delegated 
authority to act as the COTR for a major or non-major IT or construction 
capital investment--see 301.604.
    (f) Project Manager is a federal employee whom a head of the 
sponsoring program office (Program Manager) or designee has designated 
in writing to act as a Project Manager for a major or non-major IT or 
construction capital investment--see HHS' P/PM Handbook. See also 
Appendix D, Relationship between Program Management and Project 
Management, of OFFP memorandum entitled ``The Federal Acquisition 
Certification for Program and Project Managers,'' dated April 25, 2007. 
Project Managers must meet the FAC-P/PM certification requirements in 
301.607. A Project Manager may also be delegated authority to act as the 
COTR for a major or non-major IT or construction capital investment--see 
301.604.
    (g) Project Officer is a Federal employee whom a head of the 
sponsoring program office (Program Manager) or designee has designated 
in writing to act as a Project Officer and provide guidance, 
information, and assistance to the Contracting Officer for all technical 
aspects of a proposed project before award of a contract or order that 
is

[[Page 19]]

estimated to exceed the simplified acquisition threshold. (Note: In 
accordance with local procedures, OPDIVs may designate Project Officers 
for contracts or orders estimated to be less than the simplified 
acquisition threshold.) Project Officers must meet the training 
requirements in 301.606. Project Officers are often delegated authority 
to also act as the COTR on a contract or order--see 301.604.

[74 FR 62398, Nov. 27, 2009, as amended at 75 FR 21510, Apr. 26, 2010]

                    Subpart 302.2_Definitions Clause



Sec. 302.201  Contract clause.

    The Contracting Officer shall insert the clause in FAR 52.202-1, 
Definitions, in solicitations and contracts, except as cited below. This 
is an authorized FAR deviation.
    (a) In accordance with FAR 52.202-1(a)(1), the Contracting Officer 
shall insert paragraph (a) in 352.202-1 in place of paragraph (a) of the 
FAR clause.
    (b) In accordance with FAR 52.202-1(a)(1), the Contracting Officer 
shall insert paragraph (b), or its alternate in 352.202-1, to the end of 
the FAR clause. The Contracting Officer shall insert paragraph (b) when 
a fixed-priced contract is contemplated and the alternate to paragraph 
(b) when a cost-reimbursement contract is contemplated.

         Subpart 302.70_Common HHSAR Acronyms and Abbreviations



Sec. 302.7000  Common HHSAR acronyms and abbreviations.

    (a) The HHSAR cites numerous acquisition-related and organizational 
acronyms and abbreviations. Each of these is established where first 
cited in the text, following the use of the unabbreviated term, and are 
used in subsequent subparts of that part or any other part of the HHSAR.
    (b) The table below cites, for reference purposes, the most commonly 
used acronyms and abbreviations--i.e., those that have applicability to 
multiple parts of the HHSAR, and where they are first cited. They are 
listed alphabetically. The HHSAR also contains other acronyms and 
abbreviations, which because they are cited only in one HHSAR part, 
subpart, section, or in reference to a particular topic, are not listed 
in the table. An example is DCIS (Departmental Contracts Information 
System) cited in subpart 304.602.

----------------------------------------------------------------------------------------------------------------
          Acronym/abbreviation                          Term                   Where first cited in the HHSAR
----------------------------------------------------------------------------------------------------------------
A & E...................................  Architect and engineer            304.803-70(b).
                                           (contracts).
AHRQ....................................  Agency for Healthcare Research    301.270(b).
                                           and Quality.
AP......................................  Acquisition Plan................  301.606-71.
ASFR....................................  Assistant Secretary for           301.103(b).
                                           Financial Resources (in OS).
ASPR/OAMCG..............................  Assistant Secretary for           301.270(b).
                                           Preparedness and Response,
                                           Office of Acquisitions
                                           Management, Contracts and
                                           Grants.
Associate DAS for Acquisition...........  Associate Deputy Assistant        301.270(a).
                                           Secretary for Acquisition (in
                                           OS/ASFR/OGAPA/DA).
BPA or BPAs.............................  Blanket Purchase Agreement(s)...  301.603-70(b).
CA......................................  Competition Advocate............  306.202(a).
CAO.....................................  Chief Acquisition Officer (for    301.603-72(a)(4).
                                           HHS).
CCO.....................................  Chief of the Contracting Office.  301.602-3(b)(3).
CDC.....................................  Centers for Disease Control and   301.270(b).
                                           Prevention.
CFR.....................................  Code of Federal Regulations.....  301.103(c).
CIO.....................................  Chief Information Officer (for    301.607-73(a).
                                           HHS).
CMS.....................................  Centers for Medicare and          301.270(b).
                                           Medicaid Services.
COTR....................................  Contracting Officer's Technical   301.604-70.
                                           Representative.
D&F.....................................  Determination and Findings......  306.202(b)(1).
DA......................................  Division of Acquisition (in       301.270(b).
                                           ASFR) in OS.
DASFMP..................................  Deputy Assistant Secretary for    301.607-73(a).
                                           Facilities Management and
                                           Policy.
DAS/GAPA................................  Deputy Assistant Secretary for    309.403.
                                           Grants and Acquisition Policy
                                           and Accountability.
EIT.....................................  Electronic information            301.603-73(e).
                                           technology.
EVM.....................................  Earned value management.........  301.603-73(a).
FAR.....................................  Federal Acquisition Regulation..  301.101(a).
FDA.....................................  Food and Drug Administration....  301.270(b).
FedBizOpps..............................  Federal Business Opportunities..  305.205(a).
FSS.....................................  Federal Supply Schedule.........  304.803-70(b).
GLD.....................................  General Law Division (typically   301.602-3(c)(5).
                                           referred to with ``OGC'').
GSA.....................................  General Services Administration.  304.803-70(b).

[[Page 20]]

 
GWAC....................................  Government-wide acquisition       304.803-70(b).
                                           contract.
HCA.....................................  Head of the Contracting Activity  301.470(a).
HHS.....................................  (Department of) Health and Human  301.101(a).
                                           Services.
HHSAR...................................  Health and Human Services         301.101(a).
                                           Acquisition Regulation.
HRSA....................................  Health Resources and Services     301.270(b).
                                           Administration.
HUBZone.................................  Historically Underutilized        305.205(a)(2).
                                           Business Zone.
IDIQ....................................  indefinite-delivery, indefinite-  301.603-70(b).
                                           quantity (contract type).
IHS.....................................  Indian Health Service...........  301.270(b).
IT......................................  information technology..........  301.604-74(a).
JOFOC...................................  Justification for Other than      306.303-1(b)(1).
                                           Full and Open Competition.
NIH.....................................  National Institutes of Health...  301.270(b).
OCIO....................................  Office of the Chief Information   301.603-73(a).
                                           Officer (for HHS).
OFMP....................................  Office of Facilities Management   301.603-73(a).
                                           and Policy (for HHS).
OGAPA...................................  Office of Grants and Acquisition  301.270(b).
                                           Policy and Accountability.
OGC.....................................  Office of the General Counsel...  301.602-3(c)(5).
OIG.....................................  Office of the Inspector General.  303.104-7(a)(2)(i).
OMB.....................................  Office of Management and Budget.  301.106.
OPDIV...................................  Operating Division..............  301.603-73(a).
OS......................................  Office of the Secretary.........  302.101(a).
OSDBU...................................  Office of Small and               307.104(a)(4).
                                           Disadvantaged Business
                                           Utilization (in OS).
Pub. L..................................  Public Law......................  304.604.
PWS.....................................  performance work statement        304.1300(c).
                                           (typically cited with SOW).
PSC.....................................  Program Support Center (in OS)..  301.270(b).
R&D.....................................  research and development........  301.607-72(b).
RFI.....................................  Request for Information.........  305.205(a).
SAMHSA..................................  Substance Abuse and Mental        301.270(b).
                                           Health Services Administration.
SBS.....................................  Small Business Specialist (in     307.104(a)(4).
                                           OSDBU).
SF......................................  Standard Form...................  301.603-1(b).
SOW.....................................  statement of work [inclusive of   304.1300(c).
                                           specification(s)] and typically
                                           cited with PWS.
SPE.....................................  Senior Procurement Executive--    301.603-71.
                                           i.e., Associate DAS for
                                           Acquisition.
STAFFDIV................................  Staff Division (in OS)..........  311.7001(b).
----------------------------------------------------------------------------------------------------------------


[74 FR 62398, Nov. 27, 2009, as amended at 75 FR 21510, Apr. 26, 2010]

            Subpart 302.71_HHS Standard Templates and Formats



Sec. 302.7100  HHS standard templates and formats.

    HHS has developed standard templates and formats for preparation of 
various acquisition documents, reports, and plans. The templates and 
formats, which contain instructions for their completion, may be 
accessed on the ASFR/OGAPA/DA Internet Web site. A complete listing of 
the standard templates and formats and where they are referenced in the 
text are cited in the table below:

------------------------------------------------------------------------
       Title of template/format                  HHSAR reference
------------------------------------------------------------------------
Acquisition Plan......................  307.7103.
Acquisition Plan Waiver Request.......  307.7101(b)(2).
Acquisition Strategy..................  307.104-70.
Annual Acquisition Plan...............  307.104(a)(5).
Competition Advocate Report...........  306.502(b).
Contract File Checklists..............  304.803-70.
FedBizOpps R & D Sources Sought Notice  305.205(a)(3).
FedBizOpps Request for Information....  315.201(e)(4).
FedBizOpps Small Business Sources       319.202-2(a)(3).
 Sought Notice.
FedBizOpps Sources Sought Notice......  310.001(a)(3)(iv).
Justification for Other than Full and   306.303-1(b)(1).
 Open Competition.
Limited Source Justification..........  308.405-6(g)(1)(i).
Request for Information...............  315.201(e)(4).
------------------------------------------------------------------------


[[Page 21]]

 PART 303_IMPROPER BUSINESS PRACTICES AND PERSONAL CONFLICTS OF INTEREST

                        Subpart 303.1_Safeguards

Sec.

Sec. 303.101 Standards of conduct.

Sec. 303.101-3 Agency regulations.

Sec. 303.1047-7 Violations or possible violations of the Procurement 
          Integrity Act.

Sec. 303.1003 Requirements.

       Subpart 303.2_Contractor Gratuities to Government Personnel


Sec. 303.203 Reporting suspected violations of the Gratuities clause.

         Subpart 303.3_Reports of Suspected Antitrust Violations


Sec. 303.303 Reporting suspected antitrust violations.

                      Subpart 303.4_Contingent Fees


Sec. 303.405 Misrepresentations or violations of the Covenant Against 
          Contingent Fees clause.

Subpart 303.6_Contracts With Government Employees or Organizations Owned 
                          or Controlled by Them


Sec. 303.602 Exceptions.

             Subpart 303.7_Voiding and Rescinding Contracts


Sec. 303.704 Policy.

 Subpart 303.8_Limitation on the Payment of Funds To Influence Federal 
                              Transactions


Sec. 303.808-70 Solicitation provision and contract clause.

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

    Source: 74 FR 62398, Nov. 27, 2009, unless otherwise noted.

                        Subpart 303.1_Safeguards



Sec. 303.101  Standards of conduct.



Sec. 303.101-3  Agency regulations.

    (a)(3) The HHS Standards of Conduct are prescribed in 45 CFR part 
73.



Sec. 303.104-7  Violations or possible violations of the Procurement 
          Integrity Act.

    (a)(1) The Contracting Officer shall submit to the HCA for review 
and approval the determination (along with supporting documentation) 
that a reported violation or possible violation of the statutory 
prohibitions has no impact on the pending award or selection of a 
contractor for award.
    (2) The Contracting Officer shall refer the determination that a 
reported violation or possible violation of the statutory prohibitions 
has an impact on the pending award or selection of a contractor, along 
with all related information available, to the HCA, if the HCA is in the 
Senior Executive Service (SES), or to another SES official designated by 
the OPDIV. That individual shall--
    (i) Refer the matter immediately to the Associate DAS for 
Acquisition for review, who may consult with OGC-GLD and the Office of 
the Inspector General (OIG), as appropriate; and
    (ii) Determine the necessary action in accordance with FAR 3.104-
7(c) and (d). The HCA shall obtain the approval or concurrence of the 
Associate DAS for Acquisition before proceeding with an action.
    (b) The HCA (non-delegable) shall act with respect to actions taken 
under the FAR clause 52.203-10, Price or Fee Adjustment for Illegal or 
Improper Authority.



Sec. 303.1003  Requirements.

    (b) The Contracting Officer, when notified of a possible contractor 
violation of Federal criminal law, in accordance with FAR 3.1003(b), 
shall--
    (1) Notify the OIG at http://www.oig.hhs.gov/fraud/hotline;
    (2) Notify the HCA; and
    (3) Cooperate with any investigation by the OIG; and in coordination 
with the HCA, OIG, OGC and the affected program office, pursue 
appropriate remedies.
    (c)(2) The Contracting Officer shall specify the title of HHS' 
hotline poster (``Report Fraud'') and the Web site where the poster can 
be obtained (http://oig.hhs.gov/fraud/hotline/OIG--Hotline--Poster.pdf) 
in subparagraph (b)(3) of the clause at FAR 52.203-14.

[74 FR 62398, Nov. 27, 2009, as amended at 75 FR 21510, Apr. 26, 2010]

[[Page 22]]

       Subpart 303.2_Contractor Gratuities to Government Personnel



Sec. 303.203  Reporting suspected violations of the Gratuities clause.

    HHS personnel shall report suspected violations of the Gratuities 
clause to the Contracting Officer, who will in turn report the matter to 
the OGC Ethics Division for disposition. The OGC Ethics Division shall 
identify, and notify the Contracting Officer of, the form and content of 
the required report.

         Subpart 303.3_Reports of Suspected Antitrust Violations



Sec. 303.303  Reporting suspected antitrust violations.

    (h) The HCA shall provide a copy of the draft OPDIV report of 
suspected antitrust violations to the SPE. If the SPE concurs with the 
draft report, the SPE will provide it to the OGC-GLD for its review. If 
the OGD-GLD concurs with the draft report, the SPE will provide the 
signed OGC-approved report to the Attorney General.

                      Subpart 303.4_Contingent Fees



Sec. 303.405  Misrepresentations or violations of the Covenant Against 
          Contingent Fees clause.

    (a) HHS personnel shall promptly report suspected misrepresentations 
or violations of the Covenant Against Contingent Fees clause to the 
Contracting Officer.
    (b)(4) The HCA shall provide a copy of the draft OPDIV report of 
suspected covenant against contingency fees misrepresentations or 
violations to the SPE. If the SPE concurs with the draft report, the SPE 
will provide it to the OGC-GLD for its review. If the OGD-GLD concurs 
with the draft report, the SPE will provide the signed OGC-approved 
report to the Attorney General.

Subpart 303.6_Contracts With Government Employees or Organizations Owned 
                          or Controlled by Them



Sec. 303.602  Exceptions.

    The HCA (non-delegable) is the official authorized to approve an 
exception to the policy stated in FAR 3.601.

             Subpart 303.7_Voiding and Rescinding Contracts



Sec. 303.704  Policy.

    (a) For purposes of implementing FAR subpart 3.7, the HCA (non-
delegable) shall exercise the authorities granted to the ``agency head 
or designee.''

 Subpart 303.8_Limitation on the Payment of Funds To Influence Federal 
                              Transactions



Sec. 303.808-70  Solicitation provision and contract clause.

    The Contracting Officer shall insert the clause in 352.203-70, Anti-
lobbying, in solicitations and contracts that exceed the simplified 
acquisition threshold.

                     PART 304_ADMINISTRATIVE MATTERS

                   Subpart 304.6_Contracting Reporting

Sec.

Sec. 304.602 General.

Sec. 304.604 Responsibilities.

                 Subpart 304.8_Government Contract Files


Sec. 304.803-70 Contract/order file organization and use of checklists.

Sec. 304.804-70 Contract closeout audits.

              Subpart 304.13_Personal Identity Verification


Sec. 304.1300 Policy.

  Subpart 304.70_Acquisition Instrument Identification Numbering System


Sec. 304.7000 Scope of subpart.

Sec. 304.7001 Numbering acquisitions.

[[Page 23]]

     Subpart 304.71_Review and Approval of Proposed Contract Awards


Sec. 304.7100 Policy.

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

    Source: 74 FR 62398, Nov. 27, 2009, unless otherwise noted.

                    Subpart 304.6_Contract Reporting



Sec. 304.602  General.

    HHS' Departmental Contracts Information System (DCIS) captures and 
stores HHS' Individual Contract Award Reports (ICARs) and forwards 
copies of them to the Federal Procurement Data System--Next Generation 
(FPDS-NG). All HHS contracting activities shall use the DCIS, in 
accordance with the most current version of the ``User Manual for the 
Enhanced Departmental Contracts Information System,'' (DCIS Users' 
Manual) available at http://dcis.hhs.gov. For the purposes of this 
policy, reporting shall include inputting and submitting report data 
through DCIS into FPDS-NG.



Sec. 304.604  Responsibilities.

    In order for HHS to meet its reporting requirements and ensure 
compliance with the Federal Funding Accountability and Transparency Act 
(Transparency Act), Public Law (Pub. L.) 109-282, HHS acquisition 
officials and staff must report their contract information accurately 
and timely. Ensuring accuracy and timeliness also requires effective and 
efficient data verification and validation at the time of and following 
reporting.
    Following are descriptions of the organizational roles and 
responsibilities associated with contract reporting, including data 
input, oversight, and quality control; training of acquisition staff on 
reporting responsibilities; and operating, managing, and maintaining 
DCIS.
    (a) ASFR/OGAPA/DA. The ASFR/OGAPA/DA shall do the following:
    (1) Oversee and provide policy guidance for OPDIV contract reporting 
by--
    (i) Establishing and implementing an effective HHS-wide ICAR data 
verification and validation program; and
    (ii) Identifying cross-cutting trends through periodic testing of 
selected ICAR data, including Transparency Act data fields.
    (2) Ensure that DCIS is properly managed and maintained, including--
    (i) Verifying that data included therein meets FPDS-NG and 
Transparency Act accuracy and timeliness standards;
    (ii) Updating the DCIS Users' Manual periodically; and
    (iii) Prescribing standard HHS-wide DCIS training.
    (3) Certify annually that HHS ICAR information is complete and 
accurate.
    (b) HCA. Each HCA (non-delegable) shall--
    (1) Ensure that all reportable ICAR information is collected, 
submitted, and received within the time frames and under the 
circumstances specified in FAR Subpart 4.6.
    Note: Each CCO shall prepare and submit accurate ICAR data in 
accordance with HCA guidance.;
    (2) Provide continuing oversight, including implementing an OPDIV-
level data verification and validation program, to ensure ICAR data 
quality and timeliness;
    (3) Establish a continuous training program for acquisition staff to 
ensure the quality and timeliness of ICAR data; and
    (4) Certify annually to HHS' SPE that OPDIV ICAR information is 
complete and accurate.
    (c) Contracting Officer. As part of a normal file review, required 
under 304.7101, the Contracting Officer shall--
    (1) Ensure that all reportable contracts and orders, including BPA 
orders and modifications thereto, are reported;
    (2) Review and approve proposed ICAR data for completeness and 
accuracy prior to signing contracts/orders and modifications; and
    (3) Correct all DCIS data discrepancies before signing the 
associated contract, order, or modification.
    (d) OPDIV DCIS coordinator/focal point. The OPDIV DCIS coordinator/
focal point shall--
    (1) Identify data errors and ensure their timely correction as part 
of the DCIS quality control process;

[[Page 24]]

    (2) Conduct remedial staff training, as appropriate, to improve data 
accuracy and timeliness; and
    (3) Represent the OPDIV as a member of the DCIS Configuration 
Committee.
    (e) DCIS Configuration Committee. The DCIS Configuration Committee 
is composed of the HHS DCIS manager, other ASFR/OGAPA/DA acquisition 
management staff, as required; and each OPDIV's DCIS coordinator/focal 
point. The Committee shall ensure that the DCIS is properly maintained 
and shall evaluate and recommend changes to DCIS to improve its 
functionality, features, and quality control, as appropriate.

                 Subpart 304.8_Government Contract Files



Sec. 304.803-70  Contract/order file organization and use of checklists.

    (a) To provide a consistent approach to the organization and content 
of HHS contract and order files, OPDIVs shall use the folder filing 
system and accompanying file checklists specified in 304.803-70(b), in 
accordance with the guidance therein and the instructions specified as 
``Contract and Order File Folders, Checklists, and Instructions. The 
checklists are available on the ASFR/OGAPA/DA Internet.
    (b) The checklist requirements apply to files for (i) negotiated, 
sealed-bid, and Architect-Engineer (A & E) acquisitions; (ii) orders 
awarded and BPAs established under General Services Administration (GSA) 
Federal Supply Schedule (FSS) contracts; (iii) orders placed under all 
types of indefinite-delivery contracts, including task orders under 
Government-wide Acquisition Contracts (GWACs); and (iv) modifications 
under the types of acquisitions specified in (i), (ii), and (iii). 
Simplified acquisitions, including those for commercial items, are 
exempt from these checklist requirements. However, HHS contracting 
activities shall adhere to the simplified acquisition file documentation 
and retention requirements of FAR 13.106-3(b). For commercial item 
acquisitions using the negotiated or sealed bid methods, HHS contracting 
activities shall use the applicable checklist.
    (1) A complete contract or order file may consist of the following 
folders that are titled as indicated below for the specified acquisition 
methods:

----------------------------------------------------------------------------------------------------------------
       Acquisition method            Folder title        Folder title        Folder title        Folder title
----------------------------------------------------------------------------------------------------------------
Negotiated......................  Presolicitation to  Unsuccessful        Administration and  Reports and
                                   Award.              Proposals.          Closeout.           Deliverables.
Sealed-bid......................  Presolicitation to  Unsuccessful Bids.  Administration and  N/A.
                                   Award.                                  Closeout.
A & E...........................  Preannouncement to  Unsuccessful        Administration and  Reports and
                                   Award.              Qualifications      Closeout.           Deliverables.
                                                       Statements.
Task orders.....................  Presolicitation to  Unsuccessful        Administration and  Reports and
                                   Award.              Proposals.          Closeout.           Deliverables.
GSA FSS.........................  Presolicitation to  Unsuccessful        Administration and  N/A.
                                   Award.              Quotations/Oral     Closeout.
                                                       Presentations.
----------------------------------------------------------------------------------------------------------------

    (2) Although the use of the checklists is mandatory, each OPDIV 
contracting office is permitted to make certain checklist changes or 
additions as specified in ``Use and modification of checklists'' under 
``File checklists and tab dividers'' in the instructions.
    (3) OPDIVs using or planning to use electronic filing capabilities 
shall adhere to the folder and tab nomenclature requirements identified 
herein to the maximum extent practicable.



Sec. 304.804-70  Contract closeout audits.

    (a) Contracting Officers shall rely, to the maximum extent possible, 
on single audits to close physically completed cost-reimbursement 
contracts with colleges and universities, hospitals, non-profit 
organizations, and State and local governments. In addition, where 
appropriate, a sample of these contracts or an individual contract may 
be selected for audit, in accordance with paragraph (b) of this section.

[[Page 25]]

    (b) Contracting Officers shall request contract closeout audits on 
physically completed, cost-reimbursement, contracts with for-profit 
organizations in accordance with the following:
    (1) The OIG and the Associate DAS for Acquisition, in conjunction 
with the OPDIV's cost advisory/audit focal point, determine which 
contracts or contractors will be audited, which audit agency will 
perform the audit, and the type and scope of closeout audit to be 
performed. These decisions are based on the needs of the customer, risk 
analysis, return on investment, and the availability of audit resources. 
When an audit is warranted prior to closing a contract, the Contracting 
Officer shall submit the audit request to the OIG's Office of Audit 
Services, through the OPDIV's cost advisory/audit focal point.
    (2) Except where a Contracting Officer suspects misrepresentation or 
fraud, the Contracting Officer shall not request contract closeout field 
audits, if the cost of performance is likely to exceed the potential 
cost recovery. Contracting Officers may close contracts that are not 
selected for a field audit on the basis of a desk review, subject to any 
later on-site audit findings. In those situations, the release executed 
by the contractor shall contain the following statement: ``The 
Contractor agrees, pursuant to the clause in this contract entitled 
``Allowable Cost'' or ``Allowable Cost and Fixed Fee,'' as appropriate, 
that it will refund to the Government the amount of any sustained audit 
exceptions resulting from any audit made after final payment.''

              Subpart 304.13_Personal Identity Verification



Sec. 304.1300  Policy.

    (a) Definitions. The following definitions apply to this subpart:
    (1) Access: ``Physical'' entry to and/or exit from a facility/area 
of a facility (such as a building or room in a building) or ``logical'' 
entry into an information system, such as a researcher up-loading data/
information through a secure Web site or a contractor accessing an HHS-
controlled information system from its own facility. It does not include 
access to a public Web site, whether by an HHS contractor or member of 
the public, because such Web sites do not require permission to access. 
In the case of sensitive data/information that exists in hard copy, 
``access'' means providing a contractor the right to view or use 
written/typed data or information for the purpose described in a 
contract.
    (2) Long-term: Greater than 6 months in duration.
    (3) Routine: On a regular, non-intermittent basis, which is at least 
once per week during the contract or order period of performance.
    (4) Sensitive data/information: As defined by the Computer Security 
Act of 1987, any data/information, ``the loss, misuse, or unauthorized 
access to or modification of which, could adversely affect the national 
interest or the conduct of Federal programs, or the privacy to which 
individuals are entitled under section 552a of the Title 5 of U.S.C. 
(the Privacy Act), but which has not been specifically authorized under 
criteria established by an Executive order or an act of Congress to be 
kept secret in the interest of national defense or foreign policy.'' 
Examples include individuals' social security numbers; other personal 
identification information, such as individuals' health, medical, or 
psychological information; proprietary research data; and confidential 
legal data.
    (5) Short-term: Six (6) months or less in duration.
    (b) Homeland Security Presidential Directive (HSPD-12), entitled, 
``Policy for a Common Identification Standard for Federal Employees and 
Contractors,'' was issued on August 27, 2004, to enhance security and 
reduce identity fraud related to contractor physical access to 
Federally-controlled facilities and/or logical access to Federally-
controlled information systems.
    (1) The HSPD-12 requirements related to routine, long-term physical 
access to HHS-controlled facilities and logical access to HHS-controlled 
information systems, including contractor personnel background checks/
investigations (termed herein as ``more stringent'' access procedures), 
apply to all solicitations and new contracts or orders for services, 
including services

[[Page 26]]

incidental to supply contracts/orders, regardless of dollar amount, 
where the contractor will require such access (FAR 4.1303). In addition, 
HHS has determined that, when a contractor has routine, long-term access 
to sensitive data/information, whether it exists in an HHS-controlled 
information system or in hard copy, that data/information must also be 
protected and controlled in accordance with HSPD-12's more stringent 
access procedures--see 304.1300(e).
    (2) When a contractor's access to HHS-controlled facilities, 
information systems, and/or sensitive data/information is of routine but 
short-term duration, an OPDIV shall use the applicable guidance cited in 
OMB memorandum M-05-24 related to ``short-term'' access to determine 
appropriate protections and limit/control contractor access--see 
304.1300(f)]. However, if the Project Officer determines greater access 
controls are necessary, an OPDIV may protect and control facilities, 
information systems, and/or sensitive data information in accordance 
with HSPD-12's more stringent access procedures.
    (3) When a contractor's access to HHS-controlled facilities, 
information systems, and/or sensitive data/information is not routine, 
regardless of duration, HHS has determined that OPDIVs shall use the 
applicable guidance cited in OMB memorandum M-05-24 related to 
``occasional visitors'' to determine appropriate protections and limit/
control contractor access--see 304.1300(g).
    (4) Summary table of contractor access circumstances and HSPD-12 
requirements.

------------------------------------------------------------------------
                                                       HSPD-12 security
                                    HSPD-12 access    notice required in
         Type of access               procedures         solicitation/
                                       required        contract SOW/PWS?
                                                       [see 304.1300(e)]
------------------------------------------------------------------------
Routine, long-term, physical      More stringent      YES.
 access to HHS-controlled          access procedures
 facilities.                       apply.
Routine, long-term logical        More stringent      YES.
 access to an HHS-controlled       access procedures
 information system that does      apply.
 not contain sensitive HHS data/
 information.
Routine, long-term access to      More stringent      YES.
 sensitive HHS data/information,   access procedures
 whether it exists in an HHS-      apply.
 controlled information system
 (logical access) or in hard
 copy.
Routine, short-term access to     If greater access   YES.
 HHS-controlled facilities,        controls are
 information systems, and/or       deemed necessary,
 sensitive HHS data/information.   more stringent
                                   access procedures
                                   apply.
If greater access controls are    NO, but contractor
 not deemed necessary,             staff must be
 applicable guidance cited in      provided with the
 OMB memorandum M-05-24 related    OPDIV
 to ``short-term'' access to       documentation on
 determine appropriate             the rules of
 protections and limit/control     behavior and
 contractor access.                consequences for
                                   violation [see
                                   304.1300(f)].
Non-routine access, regardless    Applicable          NO, but contractor
 of duration, to HHS-controlled    guidance cited in   staff must be
 facilities, information           OMB memorandum M-   provided with the
 systems, and/or sensitive HHS     05-24 related to    OPDIV
 data/information.                 ``occasional        ``occasional
                                   visitors'' to       visitor'' policy
                                   determine           and procedures
                                   appropriate         [see
                                   protections and     304.1300(g)].
                                   limit/control
                                   contractor access.
------------------------------------------------------------------------

    (c) As part of the acquisition planning process, the Project Officer 
shall determine whether, based on the nature of the requirement, 
contractor personnel may require access to HHS-controlled facilities 
and/or information systems, including sensitive data/information, in 
order to perform the contract/order Statement of Work (SOW)/Performance 
Work Statement (PWS). If contractor access is required, the Project 
Officer must assess, based on information available at that point in the 
process, the type, frequency, and duration of such access. Following 
that determination, the Project Officer shall consult with OPDIV and/or 
local building and IT security officials/staff, and officials/staff 
involved with personnel security, including the designated personnel 
security representative, to determine appropriate security requirements 
and, as necessary, adjust project requirements to minimize security and 
access issues. The Project Officer shall comply with HSPD-12 and the

[[Page 27]]

following implementing guidance in making these judgments and 
determinations:
    (1) OMB memorandum M-05-24, Implementation of Homeland Security 
Presidential Directive (HSPD) 12--Policy for a Common Identification 
Standard for Federal Employees and Contractors, dated August 5, 2005.
    (2) National Institutes of Standards and Technology Federal 
Information Processing Standard Publication (FIPS PUB) 201), dated 
February 25, 2005, which can be accessed at: http://csrc.nist.gov/
publications/.
    (3) FAR (FAR 4.13 and 52.204-9).
    (4) Any HHS and OPDIV implementation thereof.
    (d) If, as part of the acquisition planning process, the Project 
Officer determines that contractor access will not be required, the 
Project Officer should so state in the AP (or other acquisition request 
document)--see 307.7101. If an AP does not address access issues or 
indicates contractor access is not required, and it appears an 
acquisition may involve access requirements, the Contracting Officer 
shall request that the Project Officer address or reconsider the initial 
access determination. The Project Officer's determination shall be 
final.
    (e) If HSPD-12's more stringent access procedures are expected to 
apply, because access will be routine and of long-term duration, or is 
routine and of short-term duration, but greater access controls are 
deemed necessary, the Project Officer shall include the following ``HHS-
Controlled Facilities and Information Systems Security'' notice in a 
separate, clearly designated ``Security'' section of the SOW/PWS. (Note: 
The Contracting Officer is responsible for tailoring the language in the 
solicitation and contract/order in accordance with the instructions 
provided below.)

    ``XXX Security.

       HHS-Controlled Facilities and Information Systems Security

    (a) To perform the work specified herein, Contractor personnel are 
expected to have routine (1) physical access to an HHS-controlled 
facility; (2) logical access to an HHS-controlled information system; 
(3) access to sensitive HHS data or information, whether in an HHS-
controlled information system or in hard copy; or (4) any combination of 
circumstances (1) through (3). (b) To gain routine physical access to an 
HHS facility, logical access to an HHS-controlled information system, 
and/or access to sensitive data or information, the Contractor and its 
employees shall comply with Homeland Security Presidential Directive 
(HSPD)-12, Policy for a Common Identification Standard for Federal 
Employees and Contractors; Office of Management and Budget memorandum 
(M-05-24); and Federal Information Processing Standards Publication 
(FIPS PUB) Number 201; and with the personal identity verification and 
investigation procedures contained in the following documents:
    (1) HHS Information Security Program Policy.
    (2) HHS Office of Security and Drug Testing, Personnel Security/
Suitability Handbook, dated February 1, 2005.
    (3) HHS HSPD-12 Policy Document, v. 2.0.
    (4)
    Note: Based upon information provided by the Project Officer, the 
Contracting Officer shall insert references to OPDIV and/or local 
procedural guideline(s), if any; indicate if they are readily accessible 
to the public; and, if so, specify where they may be found. If they are 
not readily accessible, the Contracting Officer shall attach a copy to 
the solicitation and contract and reference the guideline(s) here.
    (c) This contract/order will entail the following position 
sensitivity level(s): --------------------.
    Note: At the time of solicitation, based upon information provided 
by the Project Officer, the Contracting Officer shall specify all known 
levels. If the position sensitivity levels are not known at that time, 
the Contracting Officer shall insert the words ``To Be Determined at the 
Time of Award.'' However, the Contracting Officer must include the 
definitive position sensitivity levels in the awarded contract/order.
    (d) The personnel investigation procedures for Contractor personnel 
require that the Contractor prepare and submit background check/
investigation forms based on the type of investigation required. The 
minimum Government investigation for a non-sensitive position is a 
National Agency Check and Inquiries (NACI) with fingerprinting. More 
restricted positions--i.e., those above non-sensitive, require more 
extensive documentation and investigation.
    Note: The Contracting Officer shall include the following sentence 
in each solicitation as the concluding sentence in paragraph (d)): ``As 
part of its proposal, and if the anticipated position sensitivity levels 
are specified in paragraph (c) above, the Offeror shall notify the 
Contracting Officer of (1) its proposed personnel who will be subject to 
a background check/investigation and (2) whether any of its proposed 
personnel who

[[Page 28]]

will work under the contract have previously been the subject of 
national agency checks or background investigations.''
    (The Contracting Officer shall include the following sentence in 
each contract/order as the concluding sentence in paragraph (d) in lieu 
of the solicitation language: ``The Contractor shall notify the 
Contracting Officer in advance when any new personnel, who are subject 
to a background check/investigation, will work under the contract and if 
they have previously been the subject of national agency checks or 
background investigations.'')
    (e) Investigations are expensive and may delay performance, 
regardless of the outcome of the investigation. Delays associated with 
rejections and consequent re-investigations may not be excusable in 
accordance with the FAR clause, Excusable Delays--see FAR 52.249-14.
    Note: The Contracting Officer shall include the following sentence 
in each solicitation as the concluding sentence in paragraph (e): 
``Accordingly, if position sensitivity levels are specified in paragraph 
(c), the Offeror shall ensure that the employees it proposes for work 
under this contract have a reasonable chance for approval.'' The 
Contracting Officer shall include the following sentence in each 
contract/order as the concluding sentence in paragraph (e) in lieu of 
the solicitation language: ``Accordingly, the Contractor shall ensure 
that any additional employees whose names it submits for work under this 
contract have a reasonable chance for approval.''
    (f) Typically, the Government investigates personnel at no cost to 
the Contractor. However, multiple investigations for the same position 
may, at the Contracting Officer's discretion, justify reduction(s) in 
the contract price of no more than the cost of the additional 
investigation(s).
    (g) The Contractor shall include language similar to this ``HHS-
Controlled Facilities and Information Systems Security'' language in all 
subcontracts that require subcontractor personnel to have the same 
frequency and duration of (1) physical access to an HHS-controlled 
facility; (2) logical access to an HHS-controlled information system; 
(3) access to sensitive HHS data/information, whether in an HHS-
controlled information system or in hard copy; or (4) any combination of 
circumstances (1) through (3).
    (h) The Contractor shall direct inquiries, including requests for 
forms and assistance, to the Contracting Officer or designee.
    (i) Within 7 calendar days after the Government's final acceptance 
of the work under this contract, or upon termination of the contract, 
the Contractor shall return all identification badges to the Contracting 
Officer or designee.''

    (f) When a contractor's access to HHS-controlled facilities, 
information systems, and/or sensitive data/information is of routine, 
but short-term duration, and greater access controls are not deemed 
necessary, the Contracting Officer and Project Officer shall use the 
applicable guidance cited in OMB memorandum M-05-24, dated August 5, 
2005, specifically Attachment A, ``HSPD-12 Implementation Guidance for 
Federal Departments and Agencies,'' to ensure that--
    (1) Adequate OPDIV access controls are applied, and a contractor is 
granted only limited/controlled access to facilities, systems, and/or 
sensitive data/information, consistent with the requirements of the 
acquisition;
    (2) Contractor staff are provided with clear OPDIV documentation on 
the rules of behavior and consequences of their violation before being 
granted access to facilities, systems, and/or sensitive data/
information;
    (3) Contractor security violations are documented and reported to 
the appropriate OPDIV authority within 24 hours of their occurrence; and
    (4) Identity credentials issued to contractor staff are visually and 
electronically distinguishable from credentials issued to individuals to 
whom the more stringent HSPD-12 access procedures apply.
    Note to paragraph (f): However, as indicated in 304.1300(e), if the 
Project Officer determines greater access controls are necessary, an 
OPDIV may protect and control facilities, information systems, and/or 
sensitive data information in accordance with HSPD-12's more stringent 
access procedures.
    (g) When a contractor's access to HHS-controlled facilities, 
information systems, and/or sensitive data/information is not routine, 
regardless of duration, the Contracting Officer and Project Officer 
shall use the applicable guidance cited in OMB memorandum M-05-24, dated 
August 5, 2005, specifically Attachment A, ``HSPD-12 Implementation 
Guidance for Federal Departments and Agencies,'' related to ``occasional 
visitors'' to determine appropriate protections and limit/control 
contractor access to ensure that--
    (1) Adequate OPDIV access controls are applied, and the contractor 
is granted only limited/controlled access to facilities, systems, and/or 
sensitive

[[Page 29]]

data/information, consistent with the requirements of the acquisition; 
and
    (2) OPDIV visitor policies, including contractor personnel identity 
badging requirements, are enforced and are provided to the contractor.

  Subpart 304.70_Acquisition Instrument Identification Numbering System



Sec. 304.7000  Scope of subpart.

    This subpart prescribes policy and procedures for assigning 
identification numbers to contracts and related instruments, including 
solicitation documents, purchase orders, and delivery orders. The HCA 
(non-delegable) shall establish a numbering system within an OPDIV.



Sec. 304.7001  Numbering acquisitions.

    (a) Acquisitions which require numbering. Contracting activities 
shall number the following acquisitions and related instruments in 
accordance with the system prescribed in paragraphs (b), (c) and (d) of 
this section:
    (1) Contracts, including letter contracts, that exceed the micro-
purchase threshold or the acquisition of personal property or 
nonpersonal services. (Note: The Contracting Officer shall also assign 
the letter contract number to the superseding definitized contract.)
    (2) Basic ordering agreements (BOAs) and BPAs.
    (3) Requests for proposals and invitations for bids.
    (4) Requests for quotations.
    (b) Numbering system for contracts. The Contracting Officer shall 
assign a number consisting of the following to all contracts which 
require numbering (paragraph (a)(1) of this section):
    (1) The three-digit identification code (HHS) of the Department.
    (2) A one-digit alphabetic identification code of the servicing 
agency.

AHRQ: A
ASPR/OAMCG: O
CDC: D
CMS: M
FDA: F
HRSA: H
IHS: I
NIH: N
PSC: P
SAMHSA: S

    (3) The three-digit numeric identification code assigned by ASFR/
OGAPA/DA to the contracting office within the servicing agency.
    (4) A four-digit fiscal year designation (e.g., 2009, 2010).
    (5) A five-digit alphanumeric tracking number, the content of which 
is determined by the contracting office within the servicing agency.
    (6) A one-digit code describing the type of contract action. For 
example, the National Cancer Institute, NIH, may number its first 
contract for fiscal year 2009 as HHSN261200900001C. (Note: When more 
than one code may apply in a specific situation, or for additional 
codes, refer to the DCIS Users' Manual or consult with the cognizant 
DCIS coordinator/focal point for guidance on which code governs.):

A Commercial Item Acquisitions (including purchases using simplified 
acquisition procedures in accordance with the FAR subpart 13.5 Test 
program)
C New Definitive Contract
P Purchases using simplified acquisition procedures (other than 
commercial items)
I IDC
O BOA
B BPA
F Facilities Contract
U Contracts placed with or through other Government departments, GSA 
contracts, or against mandatory source contracts such as AbilityOne and 
Federal Prison Industries (UNICOR)
L Lease Agreement
W Government-wide Acquisition Contract (GWAC)
E Letter Contract
G Federal Supply Schedule
M Micro-purchase
Q Multi-agency contract

    (c) Numbering system for orders. The Contracting Officer shall 
assign order numbers (e.g., task order numbers) to orders issued under 
contracts. The order number shall be up to a seventeen-digit number 
consisting of the following:
    (1) The three-digit identification code (HHS) of the Department.
    (2) A one-digit numeric identification code of the servicing agency:

AHRQ: A
ASPR/OAMCG: O
CDC: D
CMS: M
FDA: F
HRSA: H

[[Page 30]]

IHS: I
NIH: N
PSC: P
SAMHSA: S

    (3) The three-digit numeric identification code assigned by ASFR/
OGAPA/DA to the contracting office within the servicing agency.
    (4) An alphanumeric tracking number, up to ten characters, the 
content of which is determined by the contracting office within the 
servicing agency.
    (d) Numbering system for solicitations. The HCA is responsible for 
developing a numbering system for solicitations listed in paragraphs 
(a)(3) and (a)(4) of this section.
    (e) Assignment of identification codes. ASFR/OGAPA/DA shall assign 
each contracting office a three-digit identification code. HCAs shall 
request from ASFR/OGAPA/DA the assignment of codes for newly established 
contracting offices. A listing of the contracting office identification 
codes currently in use is contained in the DCIS Users' Manual, available 
at http://dcis.hhs.gov.

[74 FR 62398, Nov. 27, 2009, as amended at 75 FR 21510, Apr. 26, 2010]

     Subpart 304.71_Review and Approval of Proposed Contract Actions



Sec. 304.7100  Policy.

    (a) The HCA (non-delegable) shall establish review and approval 
procedures for proposed contract actions to ensure that--
    (1) Contractual documents are in conformance with law, established 
policies and procedures, and sound business practices;
    (2) Contract awards properly reflect the mutual understanding of the 
parties; and
    (3) The Contracting Officer is informed of deficiencies and items of 
questionable acceptability, and takes corrective action.
    (b) The HCA shall designate acquisition officials to serve as 
reviewers. Each HCA shall establish the criteria for determining which 
contracts to review.
    (c) Officials assigned responsibility for review and approval of 
contract actions shall possess qualifications in the field of 
acquisition commensurate with the level of review performed. However, if 
an official is to serve as the Contracting Officer and sign the 
contractual document, an appropriate official at least one level above 
the Contracting Officer shall perform the review and approval function.
    (d) The Contracting Officer shall review all contractual documents, 
regardless of dollar value, prior to award to ensure the requirements of 
paragraph (a) of this section are met.

[[Page 31]]

            SUBCHAPTER B_COMPETITION AND ACQUISITION PLANNING

                  PART 305_PUBLICIZING CONTRACT ACTIONS

           Subpart 305.2_Synopsis of Proposed Contract Actions

Sec.

Sec. 305.202 Exceptions.

Sec. 305.205 Special situations.

                Subpart 305.3_Synopses of Contract Awards


Sec. 305.303 Announcement of contract awards.

                    Subpart 305.5_Paid Advertisements


Sec. 305.502 Authority.

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

    Source: 74 FR 62398, Nov. 27, 2009, unless otherwise noted.

           Subpart 305.2_Synopsis of Proposed Contract Actions



Sec. 305.202  Exceptions.

    (b) When the Contracting Officer deems an advance notice is not 
appropriate or reasonable, the Contracting Officer shall prepare a 
memorandum citing all pertinent facts and details and send it through 
appropriate acquisition channels, including the HCA, to Associate DAS 
for Acquisition requesting an exception to synopsizing. The Associate 
DAS for Acquisition shall review the request and decide whether an 
exception is appropriate and reasonable. If it is, the Associate DAS for 
Acquisition shall take the necessary coordinating actions required by 
FAR 5.202(b). ASFR/OGAPA/DA shall promptly notify the contracting office 
of the Associate DAS for Acquisition's determination on the request.



Sec. 305.205  Special situations.

    (a) An OPDIV may issue an advance notice, entitled ``Research and 
Development Sources Sought,'' in Federal Business Opportunities 
(FedBizOpps), in accordance with the requirements of FAR 5.205(a). The 
primary purpose of an R & D Sources Sought notice is to identify all 
potential sources, regardless of organizational type and size 
classification, and determine their capabilities to fulfill a potential 
Government requirement. The notice is not intended to solicit technical, 
scientific, or business information for project planning purposes 
regarding existing or possible solutions. In the latter instance, a 
Request for Information (RFI) may be used--see FAR 15.201(e) and 
315.201(e).
    (1) When using an R & D Sources Sought notice, an OPDIV shall not 
request that potential sources provide more than the minimum information 
necessary--see FAR 10.001(b), to determine whether they have the 
apparent capability to perform a requirement and, therefore, whether 
they should be included in any future competition. The notice and the 
information received shall not be used to determine how well respondents 
can perform a requirement, which can only be evaluated in response to a 
solicitation. Accordingly, the notice shall not be used to--
    (i) Obtain capability statements that are evaluated and determined 
acceptable or unacceptable;
    (ii) Require cost/price proposals or detailed technical solutions;
    (iii) Identify a prospective sole source; or
    (iv) Exclude small business concerns.
    (2) While not the primary intent of an R & D Sources Sought notice, 
in addition to seeking information regarding all potential qualified R & 
D sources, the notice may request that respondents provide information 
regarding their organizational size classification. For example, the 
notice may ask respondents to identify whether they are small 
businesses; Historically Underutilized Business (HUB) Zone small 
businesses; service-disabled, veteran-owned small businesses; 8(a) small 
businesses; veteran-owned small businesses; woman-owned small 
businesses; or small disadvantaged businesses in order to determine the 
appropriate acquisition method, including whether a set-aside is 
possible. However, such a

[[Page 32]]

notice shall not be used solely to determine the size classification of 
respondents for a proposed R & D acquisition. In such instances, a 
``Small Business Sources Sought'' notice may be used (see 319.202-2), in 
lieu of the procedures in this section.
    (3) OPDIVs shall follow the standard HHS instructions for completing 
an R & D Sources Sought notice. The template for the notice is available 
on the ASFR/OGAPA/DA Internet Web site. The Contracting Officer shall 
post the notice in FedBizOpps by selecting and completing a Sources 
Sought notice, accessible on the FedBizOpps ``Notices'' page at: http://
www.fedbizopps.gov. Additional information may be included in the notice 
in accordance with OPDIV procedures. The Contracting Officer shall 
document, in the form of a memorandum to the file, the results of the 
review by technical personnel of information submitted in response to 
the notice, including whether each respondent appears to be capable of 
performing the requirement. The Contracting Officer shall attach a copy 
of the analysis provided by the technical personnel to the memorandum.
    (4) In instances where a sufficient number of sources has not been 
identified to compete for a non-R & D project, an OPDIV may use the 
procedures specified in 310.001, including the issuance of a ``Sources 
Sought'' notice, as appropriate, in lieu of the procedures in this 
section.

                Subpart 305.3_Synopses of Contract Awards



Sec. 305.303  Announcement of contract awards.

    (a) Public Announcement. The Contracting Officer shall report awards 
over $3.5 million, not otherwise exempt under FAR 5.303, to the Office 
of the Assistant Secretary for Legislation (OASL) (Congressional 
Liaison). The Contracting Officer shall e-mail a copy of the contract or 
award document face page to grantfax@hhs.gov prior to the day of award 
or in sufficient time to allow OASL to make an announcement by 5 p.m. 
Washington, DC time on the day of award.

[75 FR 21510, Apr. 26, 2010]

                    Subpart 305.5_Paid Advertisements



Sec. 305.502  Authority.

    The Contracting Officer may advertise or place notices in newspapers 
and periodicals to announce that the contracting office is seeking 
proposals, quotations, or bids, as appropriate.

                    PART 306_COMPETITION REQUIREMENTS

   Subpart 306.2_Full and Open Competition After Exclusion of Sources

Sec.

Sec. 306.202 Establishing or maintaining alternative sources.

           Subpart 306.3_Other Than Full and Open Competition


Sec. 306.302 Circumstances permitting other than full and open 
          competition.

Sec. 306.302-1 Only one responsible source and no other supplies or 
          services will satisfy agency requirements.

Sec. 306.302-7 Public interest.

Sec. 306.303 Justifications.

Sec. 306.303-1 Requirements.

Sec. 306.304 Approval of the justification.

                   Subpart 306.5_Competition Advocates


Sec. 306.501 Requirement.

Sec. 306.502 Duties and responsibilities.

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

    Source: 74 FR 62398, Nov. 27, 2009, unless otherwise noted.

   Subpart 306.2_Full and Open Competition After Exclusion of Sources



Sec. 306.202  Establishing or maintaining alternative sources.

    (a) The reference to the agency head in FAR 6.202 (a) shall mean the 
appropriate Competition Advocate (CA) cited in 306.501.
    (b)(1) The Contracting Officer shall prepare the required 
determination and

[[Page 33]]

findings (D & F) based on the data provided by program personnel. The 
appropriate CA (non-delegable) shall sign the D & F.

           Subpart 306.3_Other Than Full and Open Competition



Sec. 306.302  Circumstances permitting other than full and open 
          competition.



Sec. 306.302-1  Only one responsible source and no other supplies or 
          services will satisfy agency requirements.

    (a)(2)(iv) Follow-on contracts for the continuation of R & D studies 
on long-term social and health programs, research studies, or clinical 
trials may be deemed to be available only from the original source when 
it is likely that award to any other source would result in unacceptable 
delays in fulfilling HHS' or the OPDIV's requirements.
    (b) Application.
    (5) when the head of the sponsoring program office has determined 
that the activity must acquire only specified makes or models of 
technical equipment or parts to meet the activity's program 
responsibility to test and evaluate certain kinds and types of products, 
and only one source is available. (Note: This criterion is limited to 
testing and evaluation purposes only and not for initial outfitting or 
repetitive acquisitions. Project Officers shall support the use of this 
criterion with citations from their agency's legislation and the 
technical rationale for the item of equipment required.)



Sec. 306.302-7  Public interest.

    (a) Authority.
    (2) Agency head, in this instance, means the Secretary.
    (c) Limitations. The Contracting Officer shall prepare a written 
request for approval and provide it through appropriate acquisition 
channels, including the HCA and Associate DAS for Acquisition, to the 
Secretary. The request shall include a D & F for the Secretary's 
signature that contains all pertinent information to support the 
justification for exercising the exemption to competition and a letter 
for the Secretary's signature notifying Congress of the determination to 
award a contract under the authority of 41 U.S.C. 253(c)(7).



Sec. 306.303  Justifications.



Sec. 306.303-1  Requirements.

    (b) The responsible Program Office must provide a written 
justification whenever it requests that goods or services be acquired 
without obtaining full and open competition. The justification must be 
submitted with the AP or other acquisition request document--see Subpart 
307.71. The Project Officer has responsibility for preparing the 
justification with assistance, as necessary, from the Contracting 
Officer.
    (1) Justifications for acquisitions at or below the simplified 
acquisition threshold may be in the form of a paragraph or paragraphs 
contained in the requisition or other acquisition request document. 
Justifications for acquisitions in excess of the simplified acquisition 
threshold shall be in the form of a separate, self-contained document, 
prepared in accordance with FAR 6.303 and 306.303, and titled 
``Justification for Other Than Full and Open Competition'' (JOFOC). HHS 
requires use of a standard format for a JOFOC. The template for the 
justification is available on the ASFR/OGAPA/DA Internet Web site. 
Additional information may be included in the JOFOC template in 
accordance with OPDIV procedures.
    (2) Regardless of the dollar amount of the acquisition, 
justifications shall--
    (i) Fully describe what is to be acquired;
    (ii) Provide a specific explanation of why it is not feasible to 
obtain full and open competition;
    (iii) Be supported by verifiable facts, rather than untested or 
unsubstantiated opinions or conclusions; and
    (iv) Be written in a manner to permit an individual without 
technical knowledge of the requirement to understand the supporting 
rationale.
    (3) Preliminary arrangements with, or verbal or written commitments 
to, a proposed sole-source contractor shall be avoided given the 
statutory requirement to obtain full and open competition to the maximum 
extent practicable.

[[Page 34]]

    (4) Justifications for orders to be placed under FSS contracts that 
limit consideration of contractors shall comply with FAR 8.405-6 and 
308.405-6.



Sec. 306.304  Approval of the justification.

    Certification, concurrence, and approval requirements. The Project 
Officer, the Project Officer's immediate supervisor, the head of the 
sponsoring program office, and the Contracting Officer shall certify 
that the justification is accurate and complete by signing the JOFOC. 
For acquisitions in the dollar amount cited in FAR 6.304(a)(2) through 
(a)(4), the CCO, if applicable, and the HCA shall indicate their review 
of, and concurrence with, the justification by signing the JOFOC.
    (a) The approving officials for JOFOCs are as follows:
    (1) The Contracting Officer shall exercise this approval authority 
unless a higher approval level is required by OPDIV procedures.
    (2) The CAs are listed in 306.501. This approval authority is not 
delegable.
    (3) The CA shall exercise this approval authority, except where the 
individual designated as the CA does not meet the requirements of FAR 
6.304 (a)(3)(ii). This approval authority is not delegable.
    (4) HHS' SPE is the Associate DAS for Acquisition.
    (c) A class justification shall be processed in the same manner as 
an individual justification. A class justification may consist of 
contracts/orders for the same or related supplies and services or other 
contract/order actions that require essentially identical 
justifications.

                   Subpart 306.5_Competition Advocates



Sec. 306.501  Requirement.

    The HHS CA is the Director, Strategic Acquisition Service, PSC. The 
CAs for each of HHS' contracting activities are as follows:

AHRQ: Director, Office of Performance Accountability, Resources and 
Technology
ASPR/OAMCG: Chief of Acquisition Policy
CDC: Chief Information Officer
CMS: Chief Operating Officer
FDA: Deputy Commissioner for Administration
HRSA: Associate Administrator, Office of Operations
IHS: Director, Office of Management Services
NIH: Senior Scientific Advisor for Extramural Research, Office of 
Extramural Research (R&D) and Senior Advisor to the Director (other than 
R&D)
    PSC: Director, Strategic Acquisition Service
    SAMHSA: Executive Officer

[74 FR 62398, Nov. 27, 2009, as amended at 75 FR 21510, Apr. 26, 2010]



Sec. 306.502  Duties and responsibilities.

    (a) Each OPDIV CA shall prepare an annual Competition Advocate 
Report (CAR), covering the prior fiscal year, in accordance with the 
requirements of FAR 6.502(b)(2) and 306.502(b), and provide it to the 
HHS CA not later than November 16 of each year or the next business day, 
if the due date falls on a non-business day. NIH's two CAs shall prepare 
and sign a joint report covering their respective areas of 
responsibility.
    (b) HHS requires that each CAR be prepared in a standard format. The 
template for the report is available on the ASFR/OGAPA/DA Internet Web 
site. As long as the standard headings are included and required 
information is addressed, the OPDIV may include additional information 
in accordance with OPDIV procedures.
    (1) The CAR shall be based on information and data for all 
acquisitions that exceed the micro-purchase threshold for the applicable 
fiscal year, unless otherwise noted in the standard format.
    (2) Each OPDIV CA shall obtain the information and data needed for 
preparation of the CAR from the responsible HCA and/or the CCO, as 
appropriate, who shall assist the CA in preparing the CAR.
    (3) Prior to forwarding the CAR to the HHS CA, each OPDIV CA shall 
provide the CAR to the responsible HCA, who shall review and approve it 
for accuracy and completeness.
    (c) The HHS CA shall consolidate all OPDIV CARs and provide an HHS-
wide CAR that addresses all requirements of FAR 6.502(b) to the HHS SPE 
and the CAO by December 20 of each year or the next business day, if the 
due date falls on a non-business day.

[[Page 35]]

                      PART 307_ACQUISITION PLANNING

                   Subpart 307.1_Acquisition Planning

Sec.

Sec. 307.104 General procedures.

Sec. 307.104-70 Acquisition strategy.

Sec. 307.104-71 Purpose and timing.

Sec. 307.105 Contents of written acquisition plans.

Sec. 307.108-70 Telecommuting of contractor employees.

     Subpart 307.70_Considerations in Selecting an Award Instrument.


Sec. 307.7000 Scope of subpart.

Sec. 307.7001 Distinction between acquisition and assistance.

Sec. 307.7002 Procedures.

                    Subpart 307.71_Acquisition Plan.


Sec. 307.7100 Scope of subpart.

Sec. 307.7101 Policy.

Sec. 307.7102 Content.

Sec. 307.7103 Format.

Sec. 307.7104 Review and certification.

Sec. 307.7105 Transmittal.

Sec. 307.7106 Acquisition milestones.

Sec. 307.7107 Responsibilities.

Sec. 307.7108 Statement of work.

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

    Source: 74 FR 62398, Nov. 27, 2009, unless otherwise noted.

                   Subpart 307.1_Acquisition Planning



Sec. 307.104  General procedures.

    (a) Each contracting activity shall prepare an Annual Acquisition 
Plan (AAP) as far in advance of each fiscal year as possible, in 
accordance with the following:
    (1) The AAP shall contain all anticipated acquisition actions for 
the coming fiscal year that exceed the simplified acquisition threshold, 
including new acquisitions and contract/order modifications. The AAP 
must include--
    (i) The aggregate dollars planned for simplified acquisitions by 
quarter;
    (ii) Any long lead-time acquisitions that will be awarded in future 
fiscal years (see paragraph (c) below); and
    (iii) Proposed multi-agency and intra-agency contracts--see 317.70.
    (2) The HCA or the CCO, as appropriate, shall prepare the AAP and 
obtain the information needed for its preparation from the responsible 
program planning/budget office and/or the program offices.
    (3) Contracting activities shall use the AAP for reporting purposes 
and workload scheduling and monitoring.
    (4) The HCA/CCO and Small Business Specialist (SBS) in the Office of 
Small and Disadvantaged Business Utilization (OSDBU) shall review the 
AAP at least quarterly, with input from the cognizant program office, 
and modify it, as appropriate, during the fiscal year, with updated 
information, particularly regarding the specific acquisition method the 
contracting activity plans to use.
    (5) HHS requires use of a standard format for an AAP. The template 
for the plan is available on the ASFR/OGAPA/DA Internet Web site. For 
the data elements specified in the AAP format, the HCA/CCO may include 
information in addition to that required by the standard instructions 
accompanying the format.
    (b) As early as possible following completion of the AAP, the 
Contracting Officer shall initiate discussions with the assigned Project 
Officer, in consultation with the OSDBU SBS, for each action that 
exceeds the simplified acquisition threshold. As appropriate, the 
discussions shall include--
    (1) Determining the intended acquisition strategy and contract/order 
type, including the use of options;
    (2) Reviewing the SOW, if available, for adequacy and ensuring that 
a PWS is used for services, where practicable;
    (3) Evaluating the potential for, and maximizing the use of, 
competitive procedures;
    (4) Performing market research, identifying potential sources, and 
determining set-aside potential and small business subcontracting 
opportunities;
    (5) Assessing the availability of commercial items;
    (6) Determining required clearances/approvals and supporting 
documentation; and
    (7) Preparing an acquisition milestone schedule;
    (8) Determining the best multi- or intra-agency contracting activity 
to assist in awarding a contract on the requiring organization's behalf, 
if applicable; and

[[Page 36]]

    (9) Determining in the case of direct ordering that the chosen 
acquisition vehicle is the best way to obtain the required product or 
service, if a vehicle other than those listed in 317.7002(b) is 
proposed.
    (c) The HCA or designee (not lower than the CCO) shall establish 
standard lead-times for processing various types of acquisitions and 
applicable fiscal year deadlines for receipt of requirements to allow 
for well-planned and timely awards. The Project Officer shall initiate 
planning, to the extent possible, for certain requirements, such as 
major capital IT investments, major capital construction investments, 
and R & D projects that require peer review, at least 24 months before 
planned award, given the clearance/approval requirements and lead-time 
required for such complex acquisitions.
    (d) The outcome of the discussions referenced in paragraph (b) above 
shall be an agreement concerning the acquisition approach and 
documentation required. For those actions that require development of a 
written AP--see 307.7101, for which the Project Officer has ultimate 
responsibility, these discussions shall also result in an agreement 
concerning--
    (1) Which elements of the AP the Contracting Officer will assist the 
Project Officer in preparing; and
    (2) The date (as specified in the milestone schedule) the Project 
Officer will provide the AP to the CCO or designee.



Sec. 307.104-70  Acquisition strategy.

    Program and Project Managers responsible for major IT capital 
investments (and for any other investments designated by the HHS CIO, 
DASFMP, the CAO, or the cognizant HCA) shall prepare an acquisition 
strategy using the HHS acquisition strategy template. The template for 
the acquisition strategy is available on the ASFR/OGAPA/DA Internet Web 
site. Program and Project Managers must initiate the acquisition 
strategy for major IT capital investments as part of the planned 
investment's business case, usually during the Enterprise Performance 
Life Cycle concept phase.



Sec. 307.104-71  Purpose and timing.

    (a) The purpose of an acquisition strategy is to describe the 
overall approach for acquiring capabilities needed to fulfill 
investment/programmatic objectives. Acquisition strategy development 
requires identification of issues and risks that might impact an 
acquisition(s) to allow early action to eliminate or mitigate the issues 
and risks.
    (b) An acquisition strategy differs from an AP with respect to the 
timing of its development and the level of detail required.
    (1) An acquisition strategy is established at the inception (concept 
phase) of an investment/acquisition to support the business case, 
identify and mitigate risks, and begin the acquisition planning process. 
An acquisition strategy addresses the major issues surrounding business 
objectives, competitive forces, and various risks that need to be 
considered.
    (2) An acquisition strategy is a living document used throughout the 
investment's life-cycle. It should be continuously updated with the 
active involvement of the Program or Project Manager and the Contracting 
Officer at appropriate points, as plans for the investment/acquisition 
mature. An acquisition strategy ultimately will result in an AP--see 
307.71.
    (3) An AP, which is required to support proposed acquisitions 
expected to exceed $500,000 (inclusive of options, with certain 
exceptions)--see 307.7101, is developed closer to the time of 
solicitation. The AP addresses not only those issues in the acquisition 
strategy, but also the tactical details of how the acquisition will be 
executed.



Sec. 307.105  Contents of written acquisition plans.

    FAR 7.105 specifies the content requirements of a written AP. 
Subpart 307.71 incorporates and supplements those requirements.



Sec. 307.108-70  Telecommuting of contractor employees.

    (a) SOWs/PWSs shall permit offerors or contractors to specify their 
own place(s) of performance (hence authorize their employees to 
telecommute), except as follows:

[[Page 37]]

    (1) The Project Officer may restrict place of performance (hence 
restrict an offeror's or contractor's telecommuting) for any part of an 
SOW/PWS, after determining that the work or any portion thereof must be 
performed at a specified place of performance; or security would be 
compromised. The Project Officer must document this determination in 
writing and send a copy of the determination, along with the SOW/PWS, to 
the Contracting Officer. The Project Officer must also address in an HHS 
AP (or other acquisition request document) any performance requirements 
or security considerations that restrict place of performance--see 
307.71.
    (2) In accordance with FAR 7.108(a), if the Contracting Officer 
concurs with the Project Officer's determination in (a)(1) above, then 
the Contracting Officer must sign the Project Officer's determination; 
include it in the official contract file; and specify any prohibition 
against telecommuting in the solicitation and resultant contract.
    (3) In accordance with FAR 7.108(a), if the Contracting Officer 
decides to restrict a place of performance that the Project Officer did 
not restrict, then the Contracting Officer must document in writing the 
determination to preclude telecommuting in part or in whole; include the 
determination in the official contract file; and specify any prohibition 
against telecommuting in the solicitation and resultant contract.
    (b) If the Contracting Officer disagrees with the Project Officer's 
determination in (a)(1) above, then the Contracting Officer shall return 
both the SOW/PWS and determination to the Project Officer for further 
consideration.
    (c) The Contracting Officer shall ensure that authorized 
telecommuting of contractor employees does not result in increased cost 
or price to the Government.

     Subpart 307.70_Considerations in Selecting an Award Instrument



Sec. 307.7000  Scope of subpart.

    This subpart provides guidance on the appropriate selection of award 
instruments to fulfill program needs consistent with 31 U.S.C. 6301-
6308. This subpart explains the use of the contract as the award 
instrument for acquisition relationships and a grant or cooperative 
agreement as instruments for financial assistance relationships.



Sec. 307.7001  Distinction between acquisition and assistance.

    (a) 31 U.S.C. 6301-6308 requires the use of contracts to acquire 
property or services for the direct benefit or use of the Government and 
grants or cooperative agreements to transfer money, property, services, 
or anything of value to eligible entities to accomplish a public purpose 
of support or stimulation authorized by Federal statute.
    (b) OPDIVs shall use a contract as the legal instrument to reflect a 
relationship between the Government and an entity whenever the--
    (1) Principal purpose of the instrument is the acquisition, by 
purchase, lease, or barter, of property or services for the direct 
benefit or use of the Government; or
    (2) Government determines in a certain situation that specific needs 
can be satisfied best by using the acquisition process. However, this 
authority does not permit circumventing the criteria for use of 
acquisition or assistance instruments. Use of this authority is 
restricted to extraordinary circumstances and requires the Associate DAS 
for Acquisition's prior approval.
    (c) OPDIVs shall use a grant or cooperative agreement as the legal 
instrument to reflect a relationship between the Government and an 
entity whenever the principal purpose of the relationship is the 
transfer of money, property, services, or anything of value to 
accomplish a public purpose of support or stimulation authorized by 
Federal statute.
    (1) OPDIVs shall use a grant when no substantial programmatic 
involvement is anticipated between the Government and the recipient 
during performance of the contemplated activity.
    (2) OPDIVs shall use a cooperative agreement when substantial 
programmatic involvement is anticipated between the Government and the 
recipient during performance of the contemplated activity.

[[Page 38]]

    (d) As a general rule, OPDIVs shall use contracts for the following 
purposes:
    (1) Evaluation (including research of an evaluative nature) of the 
performance of Government programs or projects or grantee activity 
initiated by the funding agency for its direct benefit or use.
    (2) Technical assistance rendered to the Government, or on behalf of 
the Government, to any third party, including those receiving grants or 
cooperative agreements.
    (3) Surveys, studies, and research which provide specific 
information desired by the Government for its direct activities, or for 
dissemination to the public.
    (4) Consulting services or professional services of all kinds if 
provided to the Government or, on behalf of the Government, to any third 
party.
    (5) Training projects where the Government selects the individuals 
or specific groups whose members are to be trained or specifies the 
content of the curriculum (not applicable to fellowship awards).
    (6) Production of publications or audiovisual materials the 
Government requires primarily for the conduct of its direct operations.
    (7) Design or development of items for Government use or pursuant to 
agency definition or specifications.
    (8) Conferences conducted on the Government's behalf.
    (9) Generation of management information or other data for 
Government use.



Sec. 307.7002  Procedures.

    (a) OPDIV program officials shall use existing budget and program 
planning procedures to propose new activities and major changes in 
ongoing programs. OPDIV program officials shall meet with the HCA and 
the Chief Grants Management Officer, or their designees, as necessary, 
to determine whether award is to be made through the acquisition or 
assistance process. This determination shall normally occur prior to the 
time when the AAP is reviewed and approved so that the AAP will reflect 
all known proposed contract actions. The HCA shall fully document a 
shift from one award instrument to another in the appropriate files to 
show a fundamental change in program purpose that unequivocally 
justifies the rationale for the shift.
    (b) The Contracting Officer shall confirm the appropriateness of the 
use of the contract instrument when reviewing the AP or other 
acquisition request document.
    (c) OPDIVs shall ensure that the choice of instrument is in 
accordance with 31 U.S.C. 6301-6308 and applicable HHS policies. If, 
however, there are major individual transactions or programs which 
contain elements of both acquisition and assistance in such a way that 
they cannot be characterized as having a principal purpose of one or the 
other instrument, OPDIVs shall obtain guidance from ASFR/OGAPA/DA, 
through appropriate acquisition channels, including the HCA, before 
proceeding with a determination.
    (d) Any public notice, program announcement, solicitation, or 
request for applications or proposals, or request for quotations shall 
indicate whether the intended relationship will be one of acquisition or 
financial assistance and specify the award instrument the OPDIV will 
use.

                     Subpart 307.71_Acquisition Plan



Sec. 307.7100  Scope of subpart.

    FAR 7.102 requires acquisition planning for all acquisitions. This 
subpart establishes: (a) when a written AP is required; (b) its contents 
and format; and (c) the need for review of the AP to certify that it is 
accurate, complete, and in the proper format. This subpart also 
establishes the documentation requirements for those acquisitions not 
requiring an AP.



Sec. 307.7101  Policy.

    (a) An AP is required for all acquisitions, to be placed by an HHS 
contracting office, expected to exceed $500,000 (inclusive of options) 
with the following exceptions:
    (1) Letter contracts.
    (2) Unsolicited proposals.
    (3) Regulated utility services available from only one source.
    (4) Proposals under the Small Business Innovative Research (SBIR) 
and

[[Page 39]]

Small Business Technology Transfer (STTR) programs.
    (5) Acquisition of commercial items/services--see FAR 2.101, 
including orders placed under FSS contracts meeting the definition of a 
commercial item/service, and not exceeding $5.5 million [$11 million for 
acquisitions as described in FAR 13.500(e)].
    (6) Task orders or delivery orders of any dollar amount placed 
under--
    (i) An IDIQ contract, other than a GWAC; or
    (ii) A BPA, provided there is an approved acquisition planning 
document for the original action, and there is no significant deviation 
from that plan.
    (7) Orders of any dollar amount placed under HHS-wide strategic 
sourcing vehicles.
    (8) Contract/order modifications that--
    (i) Exercise options;
    (ii) Only provide additional funding; or
    (iii) Make changes authorized by the Changes clause.
    (9) Assisted acquisitions processed pursuant to an interagency 
agreement. However, the OPDIV must comply with the requirements 
specified in 317.5 Interagency Agreements under the Economy Act and 
317.70, Multi-agency and Intra-agency Contracts.
    (b) In urgent or other justifiable cases, such as an emergency 
acquisition--see FAR Part 18, the HCA may waive, in writing, the 
requirement for completion of an AP. An HCA shall not approve a waiver 
request based on the lack of advance planning.
    (1) The Project Officer, the Project Officer's immediate supervisor, 
the head of the sponsoring program office, the Contracting Officer, and 
other signatories shall sign the waiver request in accordance with OPDIV 
policies. In OPDIVs where a CCO(s) is designated, as defined in 302.101, 
the cognizant CCO also shall sign the waiver request.
    (2) HHS has established a standard format for preparing an AP waiver 
request. The template for the waiver request is available on the ASFR/
OGAPA/DA Internet Web site. Contracting activities shall use this format 
when requesting a waiver.
    (3) The OPDIV shall provide ASFR/OGAPA/DA a copy of any approved 
waiver request within 5 business days after HCA approval.
    (c) For those acquisitions not requiring an AP, other than assisted 
acquisitions processed pursuant to an interagency agreement--see 317.5 
and 317.70, the Project Officer shall provide an acquisition request 
document (e.g., memorandum, requisition, or other form of transmittal) 
to the CCO or designee, requesting completion of the required action. 
The request must include, as applicable: a SOW/PWS (including 
deliverables and reporting requirements); a certified funding document; 
source selection strategy and criteria; necessary clearances, approvals, 
and justifications (e.g., a JOFOC); a milestone schedule; and an 
independent Government cost estimate.) In addition, OPDIVs shall use the 
content requirements of the AP as a reference in determining what other 
information and documentation is necessary to support the intended 
acquisition. Alternatively, OPDIVs may prescribe use of an AP for 
acquisitions excepted under 307.7101(a)(1) through (a)(8).

[74 FR 62398, Nov. 27, 2009, as amended at 75 FR 21510, Apr. 26, 2010]



Sec. 307.7102  Content.

    In accordance with 307.105, the FAR, HHSAR, and other Federal 
requirements that OPDIVs must consider in developing an AP, as well as 
its format, are stipulated in 307.7103. An AP shall address each 
applicable element. As indicated in the instructions, elements that are 
not applicable to an individual acquisition shall be marked ``N/A.'' The 
scope and depth of an AP may vary depending on the nature, complexity, 
and estimated cost of the proposed acquisition. As a result of new or 
revised FAR requirements or other Federal directives, the--
    (a) HCA or designee may make any needed interim changes to the AP;
    (b) HCA or designee shall notify ASFR/OGAPA/DA of the need to revise 
the AP; and
    (c) ASFR/OGAPA/DA shall update the AP, which would supersede any 
interim HCA (or designee) changes made

[[Page 40]]

to the acquisition plan for future acquisitions.

[74 FR 62398, Nov. 27, 2009, as amended at 75 FR 21510, Apr. 26, 2010]



Sec. 307.7103  Format.

    (a) HHS has established a standard format for preparing an AP. The 
template for the AP is available on the ASFR/OGAPA/DA Internet Web site.
    (b) OPDIVs may use the prescribed format without modification or use 
it as a guideline, as long as the format used by the OPDIV complies with 
the requirements specified in subparagraphs (c) and (d) below.
    (c) An AP must consist of seven (7) parts with standard headings, as 
follows:

Part I Transmittal and Approval Form.
Part II Summary Sheet.
Part III Project Considerations and Information.
Part IV Clearance/Approval Checklist.
Part V Acquisition Milestone Schedule.
Part VI Independent Government Cost Estimate.
Part VII Attachments.

    (d) Within each of the seven parts, there are required components 
that an OPDIV cannot modify and specific areas where OPDIVs can make 
changes. The table in the Requirements and Responsibilities section of 
the AP cites the titles, paragraph/subparagraph headings, narrative, and 
other requirements that must appear in each part of an AP in the 
specified format, as well as permissible modifications.



Sec. 307.7104  Review and certification.

    Before the Project Officer transmits the AP to the CCO or designee--
see 307.7105, the head of the sponsoring program office (typically a 
Division Director or equivalent), Project Officer, Funds Certification 
Official, Contracting Officer, and other signatories in accordance with 
OPDIV policies, shall review the AP and certify that it provides all 
required information in the prescribed format and the following:
    (a) Vague and ambiguous language has been eliminated.
    (b) A thorough technical review of the SOW/PWS has been completed.
    (c) The project is structured by phases or tasks, as appropriate.
    (d) Methods are available to assess the contractor's performance.
    (e) The acquisition mechanism is appropriate--i.e., the principal 
purpose of the project is to acquire supplies or services for the direct 
benefit or use of the Government.
    (f) The planned obligation of appropriated funds for the project 
satisfies a bona fide need of the requiring office arising in the fiscal 
year for which the appropriation was made.



Sec. 307.7105  Transmittal.

    The Project Officer shall convey the signed AP to the CCO or 
designee by providing a completed Part I--Transmittal and Approval Form, 
with other parts of the AP attached, no later than the date agreed to in 
the acquisition milestone schedule, unless the officials establish a 
different date by mutual agreement.



Sec. 307.7106  Acquisition milestones.

    The Contracting Officer shall retain the acquisition milestone 
schedule in the contract file and update/revise it to track progress of 
the acquisition. The milestone schedule signatories (see the 
Requirements and Responsibilities section of the AP--Part V of the 
table) shall mutually agree to any revisions to the milestone dates that 
will impact meeting the scheduled award date. Milestone schedule 
signatories shall report a failure to meet established milestones to a 
higher level official in accordance with OPDIV procedures.



Sec. 307.7107  Responsibilities.

    The following table summarizes the responsibilities of the various 
organizations and officials for acquisition planning:

------------------------------------------------------------------------
                                      Responsible
     Acquisition planning        organization/official   HHSAR reference
------------------------------------------------------------------------
Make necessary interim changes  OPDIV HCA or designee.  307.7102.
 to the AP and notify ASFR/
 OGAPA/DA of changes needed.

[[Page 41]]

 
Update the AP to reflect new    ASFR/OGAPA/DA.........  307.7102.
 or revised FAR and other
 Federal directives.
Prepare the AAP and update it   OPDIV-HCA/CCO.........  307.104,
 quarterly, as appropriate.                              subparagraph
                                                         (a).
Establish standard acquisition  OPDIV-HCA/CCO.........  307.104,
 lead-times and deadlines for                            subparagraph
 receipt of requirements for                             (d).
 award in an applicable fiscal
 year.
Identify and plan               OPDIV-Project Officer.  307.104,
 requirements, particularly                              subparagraph
 complex, long lead-time                                 (d).
 acquisitions, well in advance
 of the fiscal year in which
 they are to be awarded.
(i) Participate in acquisition  OPDIV-Project Officer.  (i) 307.104,
 planning; (ii) prepare the                              subparagraph
 AP; and (iii) provide the AP                            (c);
 to the Contracting Officer.                            (ii) 307.104,
                                                         subparagraph
                                                         (e); and (iii)
                                                         307.7105.
(i) Participate in acquisition  OPDIV-Contracting       (i) 307.104,
 planning; and (ii) assist the   Officer.                subparagraph
 Project Officer in AP                                   (c);
 preparation.                                           (ii) 307.104,
                                                         subparagraph
                                                         (e).
Waive requirement for           OPDIV-HCA.............  307.7101,
 development of an AP when                               subparagraph
 justified.                                              (b).
Review and certify that an AP   OPDIV-Head of the       307.7104
 is complete, accurate, and in   Sponsoring Program
 the proper format.              Office, Project
                                 Officer, Funds
                                 Certification
                                 Official, Contracting
                                 Officer, and other
                                 signatories in
                                 accordance with OPDIV
                                 policies.
Meet established acquisition    OPDIV-Project Officer   307.7106.
 milestone dates.                and Contracting
                                 Officer.
------------------------------------------------------------------------



Sec. 307.7108  Statement of work.

    (a) General. An SOW describes the work or services a contractor is 
to perform in reaching an end result without describing the method that 
the contractor shall use, unless the method of performance is critical 
or required in order to obtain successful performance. An SOW shall be 
clear and concise; completely define the responsibilities of both the 
contractor and the Government; and be worded to make misinterpretation 
virtually impossible.
    (b) Term (level of effort)form and completion form SOWs. Term-form 
(level of effort) SOWs essentially require the furnishing of technical 
effort, which may include a report thereof, while completion-form SOWs 
require development of tangible items designed to meet specific 
performance and/or design characteristics--see FAR 16.306(d) for this 
distinction.
    (1) Term (or level of effort). A term or level of effort-form SOW is 
appropriate for research where the objective is to discover the 
feasibility of later development or to gather general information. A 
term or level of effort-form SOW specifies that some number of labor 
hours be expended on a particular course of research or that a certain 
number of tests be run, without reference to any intended conclusion.
    (2) Completion. A completion-form SOW is appropriate for development 
work where the feasibility of producing an end item is already known. A 
completion-form SOW may describe what is to be achieved through the 
contracted effort, such as development of new methods, new end items, or 
other tangible results.
    (c) Phasing. Individual research, development, or demonstration 
projects frequently lie well beyond the present state of the art and 
entail procedures and techniques of great complexity and difficulty. 
Under these circumstances, a contractor, no matter how carefully 
selected, may be unable to deliver the desired result. Moreover, the job 
of evaluating the contractor's progress is often difficult. Such a 
contract is frequently phased and often divided into stages of 
accomplishment, each of which the contractor must complete and the 
Contracting Officer approve before the contractor may proceed to the 
next phase or stage. Phasing makes it necessary to develop methods and 
controls, including reporting requirements for each phase of the 
contract and criteria for evaluation of the report submitted, that will 
provide, at the earliest possible time, appropriate data for making 
decisions relative to future phases. A phased contract, such as one for 
an R & D or demonstration project,

[[Page 42]]

may include stages of accomplishment. Within each phase, there may be a 
number of tasks that the SOW should include. When phases of work can be 
identified, the SOW shall provide for phasing and the solicitation shall 
require offerors to submit proposed costs by phases. The resultant 
contract shall reflect costs by phases, require the contractor to 
identify incurred costs by phases, establish delivery schedules by 
phase, and require the written acceptance of each phase. The Contracting 
Officer shall not allow contractors to incur costs for phases that are 
dependent upon successful completion of earlier phases until the 
Contracting Officer provides written acceptance of the prior work.
    (d) Elements of the SOW. The elements of the SOW may vary with the 
objective, complexity, size, and nature of the acquisition. In general, 
the SOW shall include the following:
    (1) Purpose of the project. This includes a general description of 
the objectives of the project and the desired results.
    (2) Background information. This includes a brief history of the 
project and the importance of the project to the overall program 
objectives.
    (3) A detailed description of the technical requirements. The SOW 
shall provide sufficient detail to accurately reflect the Government's 
requirement. It shall state what is to be accomplished without 
prescribing the method the contractor is to use and shall include 
performance standards, if applicable. See 307.104(b)(2) and FAR 37.602 
for guidance on preparation of a PWS. An SOW may include tasks and 
subtasks. The degree of breakout depends on the size and complexity of 
the project. An SOW shall indicate whether the tasks are sequential or 
concurrent.
    (4) Reference material. This includes an explanation of all 
reference material a contractor needs to carry out the project; the 
applicability of the reference material; and a statement as to where 
potential offerors can obtain the material.
    (5) Level of effort. When a level of effort is necessary, the SOW 
shall specify the number and type of personnel required, if known, and 
the type and degree of expertise.
    (6) Special requirements (as applicable). This includes providing, 
in a separate section, any unusual or special contractual requirements 
that may affect performance. For example, the SOW shall specify 
separately the work requirements to implement information security 
management requirements--see 339.71 for additional information.
    (7) Deliverables and reporting requirements. This includes clearly 
and completely describing all deliverables and reports, including the 
time frame for completion, the format, and the required number of 
copies.

           PART 308_REQUIRED SOURCES OF SUPPLIES AND SERVICES

                 Subpart 308.4_Federal Supply Schedules

Sec.

Sec. 308.404 Use of Federal Supply Schedules.

Sec. 308.405-6 Limited source justification and approval.

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

    Source: 74 FR 62398, Nov. 27, 2009, unless otherwise noted.

                 Subpart 308.4_Federal Supply Schedules



Sec. 308.404  Use of Federal Supply Schedules.

    (f) Technical Evaluation. When conducting a technical evaluation of 
quotations or proposals received under FAR Part 8, the provisions of 
315.305(a)(3) apply.



Sec. 308.405-6  Limited source justification and approval.

    (g)(1) As required by FAR 8.405-1 or 8.405-2, the responsible 
program office must provide a written justification whenever it requests 
an acquisition under the FSS program that restricts consideration of the 
number of schedule contractors or to an item peculiar to one 
manufacturer. The justification must be submitted with the AP or other 
acquisition request document--see 307.71. The Project Officer has 
responsibility for preparing the justification with assistance, as 
necessary, from the Contracting Officer.
    (i) Justifications for orders at or below the simplified acquisition

[[Page 43]]

threshold may be in the form of a paragraph or paragraphs contained in 
the requisition or other acquisition request document. Justifications 
for orders in excess of the simplified acquisition threshold shall be in 
the form of a separate, self-contained document, prepared in accordance 
with FAR 8.405-6(g) and 308.405-6(g), and titled ``Limited Source 
Justification'' (LSJ). HHS requires use of a standard format for an LSJ. 
The template for the justification is available on the ASFR/OGAPA/DA 
Internet Web site. Additional information may be included in the LSJ 
template in accordance with OPDIV procedures.
    (ii) Regardless of dollar amount of the acquisition, justifications 
shall--
    (A) Fully describe what is to be acquired;
    (B) Cite specific reasons that explain why it is necessary to 
restrict consideration of sources;
    (C) Be supported by verifiable facts rather than untested or 
unsubstantiated opinions or conclusions; and
    (D) Be written in a manner to permit an individual without technical 
knowledge of the requirement to understand the supporting rationale.
    (iii) Preliminary arrangements with, or verbal or written 
commitments to, a proposed contractor shall be avoided given the 
requirement to obtain competition for FSS orders using the procedures in 
FAR Subpart 8.4--see also FAR 6.102(d)(3).
    (iv) Justifications for non-FSS orders to be awarded without full 
and open competition shall comply with FAR 6.303 and 306.303.
    (h) Justification approvals.
    Certification, concurrence, and approval requirements. The Project 
Officer, the Project Officer's immediate supervisor, the head of the 
sponsoring program office, and the Contracting Officer shall certify 
that the justification is accurate and complete by signing the LSJ. For 
acquisitions in the dollar amount cited in FAR 8.405-6(h)(2) through 
(h)(4), the CCO, if applicable, and the HCA shall indicate their review 
of, and concurrence with, the justification by signing the LSJ. The 
approving officials for LSJs are as follows:
    (1) The Contracting Officer shall exercise this approval authority 
unless a higher approval level is required by OPDIV procedures.
    (2) The CAs are listed in 306.501. This approval authority is not 
delegable.
    (3) The CA shall exercise this approval authority, except where the 
individual designated as the competition advocate does not meet the 
requirements of FAR 8.405-6(h)(3)(ii). This approval authority is not 
delegable.
    (4) The HHS SPE is the Associate DAS for Acquisition.

                   PART 309_CONTRACTOR QUALIFICATIONS

         Subpart 309.4_Debarment, Suspension, and Ineligibility

Sec.

Sec. 309.403 Definitions.

Sec. 309.404 List of parties excluded from Federal procurement and non-
          procurement programs.

Sec. 309.405 Effect of listing.

Sec. 309.406 Debarment.

Sec. 309.406-3 Procedures.

Sec. 309.407 Suspension.

Sec. 309.407-3 Procedures.

Sec. 309.470 Reporting of suspected causes for debarment or suspension 
          or the taking of evasive actions.

Sec. 309.470-1 Situations where reports are required.

Sec. 309.470-2 Contents of reports.

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

    Source: 74 FR 62398, Nov. 27, 2009, unless otherwise noted.

         Subpart 309.4_Debarment, Suspension, and Ineligibility



Sec. 309.403  Definitions.

    Acquiring agency's head or designee, as used in the FAR, means, 
unless otherwise stated in this subpart, the HCA. The HCA may make the 
required justifications or determinations and take the necessary actions 
specified in FAR 9.405, 9.406 and 9.407, only after obtaining the 
written approval of the debarring or suspending official, as 
appropriate.
    Debarring official means the Deputy Assistant Secretary for Grants 
and Acquisition Policy and Accountability (DAS/GAPA).

[[Page 44]]

    Initiating official means the Contracting Officer, the HCA, the 
Associate DAS for Acquisition, or the Inspector General (IG).
    Suspending official means the DAS/GAPA.



Sec. 309.404  List of parties excluded from Federal procurement and non-
          procurement programs.

    (c) The ASFR/OGAPA/DA shall perform the actions required by FAR 
9.404(c).
    (4) The ASFR/OGAPA/DA shall maintain all documentation the 
initiating official submits to recommend the debarment or suspension 
action and all correspondence and other pertinent documentation 
generated during the review.



Sec. 309.405  Effect of listing.

    (a) The HCA (non-delegable) may, with the written concurrence of the 
debarring or suspending official, make the determinations referenced in 
FAR 9.405(a) regarding contracts.
    (1) If a Contracting Officer considers it necessary to award a 
contract, or consent to a subcontract with a debarred or suspended 
contractor, the Contracting Officer shall prepare a determination, 
including all pertinent documentation, and submit it through appropriate 
acquisition channels to the HCA. The documentation shall include the 
date by which approval is required and a compelling reason for the 
proposed action. Compelling reasons for award of a contract or consent 
to a subcontract with a debarred or suspended contractor include the 
following:
    (i) Only the cited contractor can provide the property or services.
    (ii) The urgency of the requirement dictates that HHS conduct 
business with the cited contractor.
    (2) If the HCA decides to approve the requested action, the HCA 
shall request the concurrence of the debarring or suspending official 
and, if given, shall inform the Contracting Officer in writing of the 
decision within the required time period.



Sec. 309.406  Debarment.



Sec. 309.406-3  Procedures.

    (a) Investigation and referral. When an apparent cause for debarment 
becomes known, the initiating official shall prepare a report containing 
the information required by 309.470-2, along with a written 
recommendation, and forward it through appropriate acquisition channels, 
including the HCA, to the Associate DAS for Acquisition in accordance 
with 309.470-1. The debarring official shall initiate an investigation.
    (b) Decision making process. The debarring official shall review the 
results of the investigation, if any, and make a written determination 
whether or not debarment procedures shall commence. The ASFR/OGAPA/DA 
shall promptly send a copy of the determination through appropriate 
acquisition channels to the initiating official and the Contracting 
Officer. If the debarring official determines that debarment procedures 
shall commence, the debarring official shall consult with OGC-GLD and 
then notify the contractor in accordance with FAR 9.406-3(c). If the 
proposed action is not based on a conviction or judgment and the 
contractor's submission in response to the notice raises a genuine 
dispute over facts material to the proposed debarment, the debarring 
official shall arrange for fact-finding hearings and take the necessary 
action specified in FAR 9.406-3(b)(2). The debarring official shall also 
ensure that written findings of facts are prepared and shall base the 
debarment decisions on the facts as found, after considering information 
and argument submitted by the contractor and any other information in 
the administrative record. The OGC-GLD shall represent HHS at any fact-
finding hearing and may present witnesses for HHS and question any 
witnesses presented by the contractor.



Sec. 309.407  Suspension.



Sec. 309.407-3  Procedures.

    (a) Investigation and referral. When an apparent cause for 
suspension becomes known, the initiating official shall prepare a report 
containing the information required by 309.470-2 along with a written 
recommendation and forward

[[Page 45]]

it through appropriate acquisition channels, including the HCA, to the 
suspending official in accordance with 309.470-1. The suspending 
official shall initiate an investigation.
    (b) Decision making process. The suspending official shall review 
the results of the investigation, if any, and make a written 
determination whether or not suspension shall occur. ASFR/OGAPA/DA shall 
send a copy of the determination through appropriate acquisition 
channels to the initiating official and the Contracting Officer. If the 
suspending official determines that suspension is necessary, the 
suspending official shall consult with OGC-GLD and then notify the 
contractor in accordance with FAR 9.407-3(c). If the action is not based 
on an indictment, and, subject to the provisions of FAR 9.407-3(b) (2), 
the contractor's submission in response to the notice raises a genuine 
dispute over facts material to the suspension, the suspending official 
shall, after imposing the suspension, arrange for fact-finding hearings 
and take the necessary actions specified in FAR 9.407-3(b)(2).



Sec. 309.470  Reporting of suspected causes for debarment or suspension 
          or the taking of evasive actions.



Sec. 309.470-1  Situations where reports are required.

    The Contracting Officer shall forward a report, incorporating the 
information required by 309.470-2, through appropriate acquisition 
channels, including the HCA, to the Associate DAS for Acquisition 
whenever a contractor--
    (a) Has committed, or is suspected of having committed, any of the 
acts described in FAR 9.406-2 or FAR 9.407-2; or
    (b) Is suspected of attempting to evade the prohibitions of 
debarment or suspension imposed under this subject, or any other 
comparable regulation, by changes of address, multiple addresses, 
formation of new companies, or by other devices.



Sec. 309.470-2  Contents of reports.

    The Contracting Officer shall coordinate each report prepared under 
309.470-1 with OGC-GLD and include the following information, when 
available:
    (a) Contractor name and address.
    (b) Name of the principal officers, partners, owners, or managers.
    (c) All known affiliates, subsidiaries, or parent firms, and the 
nature of the affiliation.
    (d) Description of the contract or contracts concerned, including 
the contract number and office identifying numbers or symbols; the 
amount of each contract; the amount paid to the contractor and the 
amount still due; and the percentage of work completed and to be 
completed.
    (e) The status of vouchers.
    (f) Whether contract funds have been assigned pursuant to the 
Assignment of Claims Act, as amended, (31 U.S.C. 3727, 41 U.S.C. 15), 
and, if so assigned, the name and address of the assignee and a copy of 
the assignment.
    (g) Whether any other contracts are outstanding with the contractor 
or any affiliates, and, if so, the amount of the contracts, whether 
these funds have been assigned pursuant to the Assignment of Claims Act, 
as amended, (31 U.S.C. 3727, 41 U.S.C. 15), and the amounts paid or due 
on the contracts.
    (h) A complete summary of all available pertinent evidence.
    (i) A recommendation as to the continuation of current contracts.
    (j) An estimate of damages, if any, sustained by the Government as a 
result of the contractor's action, including an explanation of the 
method used in making the estimate.
    (k) The comments and recommendations of the Contracting Officer and 
statements indicating whether the contractor should be suspended or 
debarred, whether any limitations are necessary, and the period of any 
proposed debarment.
    (l) As an enclosure, a copy of the contract(s) or pertinent excerpts 
therefrom, appropriate exhibits, testimony or statements of witnesses, 
copies of assignments, and other relevant documentation or a written 
summary of any information for which documentation is not available.

                        PART 310_MARKET RESEARCH

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

[[Page 46]]



Sec. Sec. 310.001  Policy.

    (a) OPDIVs are encouraged to conduct market research, to the maximum 
extent practicable, consistent with the urgency, complexity, and dollar 
value of a proposed acquisition, as well as their past experience with 
the same or similar requirements.
    (3)(i) An OPDIV may issue an advance notice, entitled ``Sources 
Sought'' in FedBizOpps in accordance with the requirements of FAR Part 
5, whenever a sufficient number of sources has not been identified to 
obtain adequate competition for a non-R & D project. The primary purpose 
of a Sources Sought notice is to identify all potential sources, 
regardless of organizational type and size classification, and determine 
their capabilities to fulfill a potential Government requirement. The 
notice is not intended to solicit technical, scientific, or business 
information for project planning purposes regarding existing or 
potential solutions. In the latter instance, an RFI may be used--see FAR 
15.201(e) and 315.201(e).
    (ii) When using a Sources Sought notice, an OPDIV shall not request 
that potential sources provide more than the minimum information 
necessary--see FAR 10.001(b), to determine whether they have the 
apparent capability to perform a requirement and, therefore, whether 
they should be included in any future competition. The notice and the 
information received shall not be used to determine how well respondents 
can perform a requirement, which can only be evaluated in response to a 
solicitation. Accordingly, the notice shall not be used to--
    (A) Obtain capability statements that are evaluated and determined 
acceptable or unacceptable;
    (B) Require cost/price proposals or detailed technical solutions;
    (C) Identify a prospective sole source; or
    (D) Exclude small business concerns.
    (iii) While not the primary intent of a Sources Sought notice, in 
addition to seeking information regarding all potential qualified 
sources, the notice may request that respondents provide information 
regarding their organizational size classification. For example, the 
notice may ask respondents to identify whether they are small 
businesses; HUBZone small businesses; service-disabled, veteran-owned 
small businesses; 8(a) small businesses; veteran-owned small businesses; 
woman-owned small businesses; or small disadvantaged businesses in order 
to determine the appropriate acquisition method, including whether a 
set-aside is possible. However, such a notice shall not be used solely 
to determine the size classification of respondents for a proposed non-R 
& D acquisition. In such instances, a ``Small Business Sources Sought'' 
notice may be used--see 319.202-2, in lieu of the procedures in this 
section.
    (iv) OPDIVs shall follow the standard HHS instructions for 
completing a Sources Sought notice. The Contracting Officer shall post 
the notice in FedBizOpps by selecting and completing a Sources Sought 
notice. The template for the notice is available on the ASFR/OGAPA/DA 
Internet Web site. Additional information may be included in the notice 
in accordance with OPDIV procedures. The Contracting Officer shall 
document, in the form of a memorandum to the file, the results of the 
review by technical personnel of information submitted in response to 
the notice, including whether each respondent appears to be capable of 
performing the requirement. The Contracting Officer shall attach a copy 
of the analysis provided by the technical personnel to the memorandum.
    (v) In instances where a sufficient number of sources has not been 
identified to compete for an R & D project, OPDIVs may use the 
procedures specified in 305.205, including the issuance of an ``R & D 
Sources Sought'' notice, as appropriate, in lieu of the procedures in 
this section.

[74 FR 62398, Nov. 27, 2009]

                    PART 311_DESCRIBING AGENCY NEEDS

           Subpart 311.70_Section 508 Accessibility Standards

Sec.

Sec. 311.7000 Defining electronic information technology requirements.

[[Page 47]]


Sec. 311.7001 Section 508 accessibility standards for HHS Web site 
          content and communication materials.

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

    Source: 74 FR 62398, Nov. 27, 2009, unless otherwise noted.

           Subpart 311.70_Section 508 Accessibility Standards



Sec. 311.7000  Defining electronic information technology requirements.

    HHS staff that define agency needs for EIT products and services, 
including EIT deliverables such as electronic documents and reports, and 
perform market research to meet those needs, shall document EIT 
requirements, identify the applicable Section 508 accessibility 
standards, and document the market research. OPDIVs may develop 
procedures for these activities, based on the level of agency investment 
and risk, and shall ensure any procedures developed are in conformance 
with FAR Part 10. Procedures for defining EIT requirements may, but are 
not required to, include the use of the Buy Accessible Wizard (http://
www.buyaccessible.gov), managed by GSA, or other Federal agency tools.



Sec. 311.7001  Section 508 accessibility standards for HHS Web site 
          content and communications materials.

    (a) Section 508 of the Rehabilitation Act of 1973 [29 U.S.C. 
794(d)], as amended by the Workforce Investment Act of 1998, (Section 
508) specifies the accessibility standards that apply to all new 
solicitations and new or existing contracts or orders, regardless of 
dollar amount, for communications products and services that require a 
contractor or consultant to produce content in any format that is 
specifically intended for publication on, or delivery via, an HHS-owned 
or -funded Web site.
    (b) Accordingly, before forwarding a request to the contracting/
ordering office for the acquisition of communications products and 
services, including content in any format, such as reports, documents, 
charts, posters, presentations (such as Microsoft PowerPoint), or video 
material that is specifically intended for publication on, or delivery 
via, an HHS-owned or -funded Web site, the Project Officer shall consult 
with the OPDIV/STAFF Division (DIV) Section 508 Official or Coordinator, 
as necessary, to determine the applicability of Section 508, identify 
applicable Section 508 accessibility standards, and resolve any related 
issues.
    (c) Based on those discussions, the Project Officer shall provide a 
statement in the AP (or other acquisition request document)--see 
307.7101, as to the applicability of Section 508. If Section 508 applies 
to an acquisition, the Project Officer shall include the following ``HHS 
Section 508 Accessibility Standards Notice'' language in a separate, 
clearly designated section of the SOW/PWS, and any additional 
information applicable to the acquisition's Section 508 accessibility 
standards [e.g., the list of applicable accessibility standards of the 
Architectural and Transportation Barriers Compliance Board (Access 
Board) Final Rule (36 CFR Part 1194)]. If an AP does not address these 
issues, and it appears an acquisition involves Section 508, or if the 
discussion of Section 508 applicability to the acquisition is inadequate 
or incomplete, the Contracting Officer shall request that the Project 
Officer modify the AP accordingly.

     HHS Section 508 Accessibility Standards Notice (September 2009)

    This contract is subject to Section 508 of the Rehabilitation Act 
(the Act) of 1973 (29 U.S.C. 794d), as amended by the Workforce 
Investment Act of 1998, and the Architectural and Transportation 
Barriers Compliance Board (Access Board) Electronic and Information 
Accessibility Provisions (36 CFR Part 1194). Section 508 of the Act 
requires that, unless an exception applies, all communications products 
and services that require a contractor or consultant to produce content 
in any format that is specifically intended for publication on, or 
delivery via, a Federally owned or Federally funded Web site permit the 
following:
    (1) Federal employees with disabilities to have access to and use 
information and data that is comparable to the access and use of 
information and data by Federal employees who are not individuals with 
disabilities.

[[Page 48]]

    (2) Members of the public with disabilities seeking information or 
services from a Federal agency to have access to and use of information 
and data that is comparable to the access and use of information and 
data by members of the public who are not individuals with disabilities.
    Note: Information about Section 508 of the Act is available at 
http://www.section508.gov/. The complete text of Section 508 can be 
accessed at http://www.access-board.gov/sec508/provisions.htm.
    Accordingly, regardless of format, all Web content or communications 
materials specifically produced for publication on, or delivery via, HHS 
Web sites, including text, audio, or video, under this contract shall 
conform to applicable Section 508 accessibility standards. Remediation 
of any materials that do not comply with the applicable accessibility 
standards of 36 CFR Part 1194 as set forth herein shall be the 
responsibility of the Contractor.
    The following Section 508 accessibility standards apply to the 
content or communications material identified in this SOW or PWS:
    Note: The Project Officer shall list the applicable accessibility 
standards of the Access Board Final Rule (36 CFR Part 1194) (e.g., ``36 
CFR 1194.21(a)-(j).'' Most Web-based text and communication must meet 
the accessibility standards in 36 CFR 1194.22, ``Web-based intranet and 
Internet information and applications.'' Additionally, 36 CFR 1194.41, 
``Information, documentation and support,'' and 36 CFR 1194.24 ``Video 
and multimedia products'' apply to all written, graphical, or broadcast 
video materials or products produced for HHS, including training. 36 CFR 
1194.41(c) specifies that support services for products shall 
accommodate the communication needs of end-users with disabilities.

                PART 312_ACQUISITION OF COMMERCIAL ITEMS

          Subpart 312.1_Acquisition of Commercial Items_General

Sec.

Sec. 312.101 Policy

  Subpart 312.2_Special Requirements for the Acquisition of Commercial 
                                 Items.


Sec. 312.202(d) Market research and description of agency need.

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

    Source: 74 FR 62398, Nov. 27, 2009, unless otherwise noted.

          Subpart 312.1_Acquisition of Commercial Items_General



Sec. 312.101  Policy.

    (a) It is HHS policy to leverage its buying power, reduce 
acquisition administrative costs, and develop long-term, mutually 
beneficial partnerships with best-in-class providers of products and 
services. Accordingly, HHS has implemented a Strategic Sourcing Program 
through which it awards BPAs or other contract vehicles to achieve 
savings for commercial items and services across HHS and make the 
acquisition process more efficient. OPDIVs shall use HHS' strategic 
sourcing vehicles to the maximum extent possible--see the HHS strategic 
sourcing portion of the ASFR/OGAPA/DA intranet site for further 
information.

  Subpart 312.2_Special Requirements for the Acquisition of Commercial 
                                  Items



Sec. 312.202(d)  Market research and description of agency need.

    Whenever an OPDIV/STAFFDIV requires EIT products and services 
subject to Section 508 of the Rehabilitation Act of 1973, as amended, 
commercially available products and services shall be acquired to the 
maximum extent possible while ensuring Section 508 compliance. 
Consistent with paragraph 4.3.1 of the HHS Section 508 policy--see 
Section 508 policy on the HHS Office on Disability Web site, if products 
and services are commercially available that meet some but not all of 
the applicable Section 508 accessibility standards, and no commercially 
available products or services meet all of the applicable Section 508 
accessibility standards, an OPDIV/STAFFDIV shall acquire the products 
and services that best meet the applicable Section 508 accessibility 
standards. Commercial nonavailability exception determinations for EIT 
products and services that do not meet some or all of the applicable 
Section 508 accessibility standards shall be processed in accordance 
with 339.203.

[[Page 49]]

           SUBCHAPTER C_CONTRACTING METHODS AND CONTRACT TYPES

               PART 313_SIMPLIFIED ACQUISITION PROCEDURES

Sec.

Sec. 313.003 Policy.

                        Subpart 313.1_Procedures.


Sec. 313.106-2 Evaluation of quotations or offers.

              Subpart 313.3_Simplified Acquisition Methods


Sec. 313.301 Government-wide commercial purchase card.

Sec. 313.303 Blanket purchase agreements.

Sec. 313.303-5 Purchases under blanket purchase agreements.

         Subpart 313.5_Test Program for Certain Commercial Items


Sec. 313.501 Special documentation requirements.

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

    Source: 74 FR 62398, Nov. 27, 2009, unless otherwise noted.



Sec. 313.003  Policy.

    EIT products and services, including EIT deliverables such as 
electronic documents and reports, acquired pursuant to FAR Part 13 shall 
comply with Section 508 of the Rehabilitation Act of 1973, as amended. 
Consistent with paragraph 4.3.1 of the HHS Section 508 policy--see 
Section 508 policy on HHS Office on Disability Web site, if products and 
services, including commercially available items, meet some but not all 
of the applicable Section 508 accessibility standards, and no 
commercially available products or services meet all of the applicable 
Section 508 accessibility standards, an OPDIV/STAFFDIV shall acquire the 
products and services that best meet the applicable Section 508 
accessibility standards. Commercial nonavailability exception 
determinations for EIT products and services that do not meet some or 
all of the applicable Section 508 accessibility standards shall be 
processed in accordance with 339.203.

                        Subpart 313.1_Procedures



Sec. 313.106-2  Evaluation of quotations or offers.

    (b)(5) Technical Evaluation. When conducting a technical evaluation 
of quotations or proposals received under FAR Part 13, the provisions of 
315.305(a)(3) apply.

              Subpart 313.3_Simplified Acquisition Methods



Sec. 313.301  Government-wide commercial purchase card.

    (b) HHS' procedures for the use and control of the Government-wide 
commercial purchase card may be found in the HHS Purchase Card Program 
Guide, available on the ASFR/OGAPA/DA Web site.
    (1) ASFR/OGAPA/DA has overall responsibility for monitoring the 
OPDIVs' implementation of the HHS purchase card program to foster 
compliance with FAR 13.301; OMB Circular A-123, Appendix B, ``Improving 
the Management of Government Charge Card Programs;'' GSA's SmartPay 
Program guidance; and HHS Purchase Card program standards.
    (2) The OPDIVs, through their designated Agency/Organization Program 
Coordinators, are responsible for establishing the necessary local 
procedures and appropriate training requirements to ensure effective 
implementation of the HHS purchase card program.
    (3) OPDIVs shall refer to 313.003 and the HHS Purchase Card Program 
Guide for information regarding acquiring EIT products and services 
subject to Section 508 of the Rehabilitation Act of 1973, as amended.



Sec. 313.303  Blanket purchase agreements.



Sec. 313.303-5  Purchases under blanket purchase agreements.

    (e)(5) HHS personnel that sign delivery documents, invoices, etc., 
verifying the receipt of an item or service shall forward such documents 
to the fiscal office or other paying office that the

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OPDIV designates. The fiscal or other paying officer shall use the 
signed document, invoice, etc., as the basis for payment. Alternatively, 
OPDIVs may use electronic methods to document, and transmit to the 
paying office, the receipt, inspection, and acceptance of items or 
services for payment purposes, provided such methods are authorized in 
local fiscal procedures. Contracting offices shall establish procedures 
to ensure that funds are available prior to placement of orders.

         Subpart 313.5_Test Program for Certain Commercial Items



Sec. 313.501  Special documentation requirements.

    (a)(1)
    (i) The justification requirements of 306.303-1(b) and 306.303-
1(b)(1) through (b)(4) apply to proposed noncompetitive acquisitions 
placed under FAR Subpart 13.5.
    (ii) The HHS standard format for JOFOCs cited in 306.303-1(b)(1) 
shall be used to support noncompetitive acquisitions in excess of the 
simplified acquisition threshold placed under FAR Subpart 13.5.
    (iii) The certification, concurrence, and approval requirements 
cited in 306.304 for JOFOCs apply to applicable noncompetitive 
acquisitions placed under FAR Subpart 13.5.
    (2)
    (i) The Contracting Officer shall exercise this approval authority 
unless a higher approval level is required by OPDIV procedures.
    (ii) The CAs are listed in 306.501. This approval authority is not 
delegable.
    (iii) The CA shall exercise this approval authority, except where 
the individual designated as the competition advocate does not meet the 
requirements of FAR 6.304(a)(3)(ii). This approval authority is not 
delegable.
    (iv) The HHS SPE is the Associate DAS for Acquisition.

                         PART 314_SEALED BIDDING

                   Subpart 314.1_Use of Sealed Bidding

Sec.

Sec. 314.103 Policy.

                   Subpart 314.2_Solicitation of Bids


Sec. 314.202 General rules for solicitation of bids.

Sec. 314.202-7 Facsimile bids.

           Subpart 314.4_Opening of Bids and Award of Contract


Sec. 314.404 Rejection of bids.

Sec. 314.404-1 Cancellation of invitations after opening.

Sec. 314.407 Mistakes in bids.

Sec. 314.407-3 Other mistakes disclosed before award.

Sec. 314.407-4 Mistakes after award.

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

    Source: 74 FR 62398, Nov. 27, 2009, unless otherwise noted.

                   Subpart 314.1_Use of Sealed Bidding



Sec. 314.103  Policy.

    EIT products and services, including EIT deliverables such as 
electronic documents and reports, acquired using sealed-bid procedures 
shall comply with Section 508 of the Rehabilitation Act of 1973, as 
amended. Consistent with paragraph 4.3.1 of the HHS Section 508 policy--
see Section 508 policy on HHS Office of Disability Web site, if products 
and services, including commercially available items, meet some but not 
all of the applicable Section 508 accessibility standards, and no 
commercially available products or services meet all of the applicable 
Section 508 accessibility standards, an OPDIV/STAFFDIV shall acquire the 
products and services that best meet the applicable Section 508 
accessibility standards. Commercial nonavailability exception 
determinations for EIT products and services that do not meet some or 
all of the applicable Section 508 accessibility standards shall be 
processed in accordance with 339.203.

                   Subpart 314.2_Solicitation of Bids



Sec. 314.202  General rules for solicitation of bids.



Sec. 314.202-7  Facsimile bids.

    (c) If the HCA (non-delegable) determines that the contracting 
activity will allow use of facsimile bids and proposals, the HCA shall 
prescribe internal procedures, in accordance with the

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FAR 14.202-7, to ensure uniform processing and control.

           Subpart 314.4_Opening of Bids and Award of Contract



Sec. 314.404  Rejection of bids.



Sec. 314.404-1  Cancellation of invitations after opening.

    (c) The HCA or CCO (non-delegable) shall make the agency head 
determinations specified in FAR 14.404-1.



Sec. 314.407  Mistakes in bids.



Sec. 314.407-3  Other mistakes disclosed before award.

    (e) The CCO (non-delegable) has the authority to make determinations 
under paragraphs (a), (b), (c), and (d) of FAR 14.407-3.
    (f) OGC-GLD shall concur in each proposed determination.
    (i) The CCO shall submit directly to OGC-GLD cases in which the 
evidence is not clear and convincing or is otherwise doubtful.



Sec. 314.407-4  Mistakes after award.

    (c) The HCA or the CCO (non-delegable), in consultation with OGC-
GLD, has the authority to make administrative determinations in 
connection with mistakes in bid alleged after award.
    (d) OGC-GLD shall concur in each proposed determination.

                   PART 315_CONTRACTING BY NEGOTIATION

   Subpart 315.2_Solicitation and Receipt of Proposals and Information

Sec.

Sec. 315.201 Exchanges with industry before receipt of proposals.

Sec. 315.204-5 Part IV--Representations and instructions.

Sec. 315.208 Submission, modification, revision, and withdrawal of 
          proposals.

Sec. 315.209 Solicitation provisions and contract clauses.

                     Subpart 315.3_Source Selection.


Sec. 315.303-70 Policy.

Sec. 315.304 Evaluation factors and significant subfactors.

Sec. 315.305 Proposal evaluation.

Sec. 315.306 Exchanges with offerors after receipt of proposals.

Sec. 315.307 Proposal revisions.

Sec. 315.370 Finalization of details with the selected source.

Sec. 315.371 Contract preparation and award.

Sec. 315.372 Preparation of negotiation memorandum.

                     Subpart 315.4_Contract Pricing


Sec. 315.404 Proposal analysis.

Sec. 315.404-2 Information to support proposal analysis.

Sec. 315.404-4 Profit.

                   Subpart 315.6_Unsolicited Proposals


Sec. 315.605 Content of unsolicited proposals.

Sec. 315.606 Agency procedures.

Sec. 315.606-1 Receipt and initial review.

Sec. 315.609 Limited use of data.

     Subpart 315.70_Acquisition of Electronic Information Technology


Sec. 315.7000 Section 508 accessibility standards.

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

    Source: 74 FR 62398, Nov. 27, 2009, unless otherwise noted.

   Subpart 315.2_Solicitation and Receipt of Proposals and Information



Sec. 315.201  Exchanges with industry before receipt of proposals.

    (e)(1) An OPDIV may issue an advance notice, entitled ``Request for 
Information,'' in accordance with the requirements of FAR 15.201(e), 
whenever it requires technical, scientific, and/or business information 
and input from the marketplace for project planning purposes regarding 
the availability of existing or potential solutions. An RFI may be used 
for any type of requirement, but is particularly appropriate for complex 
projects involving R & D, IT, construction, and other highly technical 
requirements. An RFI may also be issued to identify issues about the 
Government's requirements and the planned acquisition strategy. Use of 
an RFI generally is appropriate under the following conditions:
    (i) It is not clear whether the purpose and performance requirements 
of a potential or planned project are feasible, achievable, and 
complete.
    (ii) It is not certain that a solution, technical approach, or 
product needed to accomplish a potential or planned

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project exists or can be developed, particularly in the case of a new, 
highly specialized/unique Government program mandate.
    (iii) It is necessary to test the marketplace to determine if there 
are questions or concerns regarding the use of a new or innovative 
acquisition strategy or instrument previously untried to accomplish a 
potential or planned project.
    (iv) It is necessary to determine the general effort or time 
(estimate or rough order of magnitude) that may be required to 
accomplish a potential or planned project.
    Note: This type of information may be requested, only if it is 
necessary, broad in scope, and required for planning purposes. Detailed 
estimates must not be requested.
    (v) It is necessary to ensure that unduly restrictive technical or 
business/acquisition requirements are not made part of any resultant 
solicitation so that maximum competition is generated.
    (2) When using an RFI, an OPDIV shall not request that potential 
sources provide more than the minimum information necessary--see FAR 
10.001(b), to obtain the input required. The notice and the information 
received shall not be used to determine how well respondents can perform 
a requirement, which can only be evaluated in response to a 
solicitation. Accordingly, the notice shall not be used to--
    (i) Obtain capability statements that are evaluated and determined 
acceptable or unacceptable;
    (ii) Require cost/price proposals or detailed technical solutions;
    (iii) Identify a prospective sole source; or
    (iv) Exclude small business concerns.
    (3) While not the primary intent of an RFI, an OPDIV may 
additionally request that respondents provide information regarding 
their organizational size classification and capabilities when the OPDIV 
is uncertain whether any organization, acting individually or in 
partnership with others, can satisfy the requirement. For example, the 
notice may ask respondents to identify whether they are small 
businesses; HUBZone small businesses; service-disabled, veteran-owned 
small businesses; 8(a) small businesses; veteran-owned small businesses; 
woman-owned small businesses; or a small disadvantaged businesses. 
However, an RFI shall not be used solely to determine the availability 
of qualified sources for a proposed project or to determine their size 
classification. In such instances, as applicable, an R & D Sources 
Sought notice, Sources Sought notice, or Small Business Sources Sought 
notice may be used--see HHSAR 305.205, 310.001, and 319.202-2.
    (4) OPDIVs shall follow the standard HHS instructions for completing 
an RFI. The template for an RFI is available on the ASFR/OGAPA/DA 
Internet Web site. The Contracting Officer shall post the notice in 
FedBizOpps by selecting and completing a Special Notice, accessible on 
the FedBizOpps ``Notices'' page at: http://www.fedbizopps.gov. RFIs must 
be published, at a minimum, in FedBizOpps--see FAR 10.002(b)(2)(iii) and 
15.201(d). Additional information may be included in an RFI in 
accordance with OPDIV procedures. The Contracting Officer shall 
document, in the form of a memorandum to the file, the results of the 
review by technical personnel of information submitted in response to 
the notice, including whether each respondent appears to be capable of 
performing the requirement. The Contracting Officer shall attach a copy 
of the analysis provided by the technical personnel to the memorandum.



Sec. 315.204-5  Part IV--Representations and instructions.

    (c) Section M, Evaluation factors for award.
    (1) General.
    (i) The Project Officer shall develop technical evaluation factors 
and submit them to the Contracting Officer as part of the acquisition 
plan or other acquisition request documentation for inclusion in a 
solicitation. The Project Officer shall indicate the relative importance 
or weight of the evaluation factors based on the requirements of an 
individual acquisition. Since the evaluation factors will serve as the 
standard for proposal evaluation, they require careful selection.
    (ii) Only a formal amendment to a solicitation can change the 
evaluation factors. Evaluation of proposals shall

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include only those factors set forth in a solicitation.
    (2) Review of evaluation factors.
    (i) The Contracting Officer shall review evaluation factors to 
ensure they are consistent with the SOW/PWS. This review is not intended 
to dictate technical requirements to the program office or Project 
Officer, but rather to ensure that the evaluation factors are clear, 
concise, and fair, so that all potential offerors are fully aware of the 
bases for proposal evaluation and are given an equal opportunity to 
compete.
    (ii) The Project Officer and the Contracting Officer shall review 
the evaluation factors to ascertain the following:
    (A) The factors address the key programmatic concerns which the 
offerors must be aware of in preparing proposals.
    (B) The factors are specifically applicable to the current 
acquisition and are not restatements of factors from previous 
acquisitions which are not relevant.
    (C) The factors represent only the significant areas of importance, 
rather than a multitude of factors. (Note: All factors tend to lose 
importance, if too many are included; and using too many factors may 
prove as detrimental as using too few.)
    (3) Examples of topics that form a basis for evaluation factors. 
Typical examples of topics that form a basis for the development of 
evaluation factors are listed in the following paragraphs. These 
examples may assist in the development of actual evaluation factors for 
a specific acquisition, as appropriate.
    (i) Understanding of the SOW/PWS.
    (ii) Method of accomplishing the objectives and intent of the SOW/
PWS.
    (iii) Soundness of the scientific or technical approach for 
executing the requirements of the SOW/PWS, including, when applicable, 
preliminary layouts, sketches, diagrams, other graphic representations, 
calculations, curves, and other data necessary for presentation, 
substantiation, justification, or understanding of the approach.
    (iv) Special technical factors, such as experience or pertinent 
novel ideas in the specific branch of science or technology involved.
    (v) Feasibility or practicality of successfully accomplishing the 
requirements (including a statement and discussion of anticipated major 
difficulties and problem areas, and recommended approaches for their 
resolution).
    (vi) Availability of required special research, test, and other 
equipment or facilities.
    (vii) Managerial capability (ability to achieve delivery or 
performance requirements as demonstrated by the proposed use of 
management and other personnel resources, and to successfully manage the 
project, including subcontractor and/or consultant efforts, if 
applicable, as evidenced by the management plan and demonstrated by 
previous experience).
    (viii) Availability, qualifications, experience, education, and 
competence of professional, technical, and other personnel, including 
proposed subcontractors and consultants (as evidenced by resumes, 
endorsements, and explanations of previous efforts).
    (ix) Soundness of the proposed staff time or labor hours, propriety 
of personnel classifications (professional, technical, others), 
necessity for type and quantity of material and facilities proposed, 
validity of proposed subcontracting, and necessity of proposed travel.
    (x) Quality of offeror's past performance on recent projects of 
similar size and scope.
    (xi) Extent of proposed participation of small disadvantaged 
business concerns in performance of the contract.



Sec. 315.208  Submission, modification, revision, and withdrawal of 
          proposals.

    (b) In addition to the provision in FAR 52.215-1, Instructions to 
Offerors--Competitive Acquisition, if an HCA determines that certain 
classes of biomedical or behavioral R & D acquisitions are subject to 
conditions other than those specified in FAR 52.215-1(c)(3), the HCA may 
authorize for use in competitive solicitations for R & D, valued at more 
than the simplified acquisition threshold, the use of the provision in 
352.215-70, Late Proposals and Revisions. This is an authorized FAR 
deviation.

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    (2) When the provision at 352.215-70 is included in the solicitation 
and a proposal is received after the exact time specified for receipt, 
the Contracting Officer, with the assistance of cost and technical 
personnel, shall make a written determination as to whether the proposal 
meets the requirements of the provision at 352.215-70 and, therefore, 
can be considered.



Sec. 315.209  Solicitation provisions and contract clauses.

    (a) The Contracting Officer shall insert paragraph (e) in 352.215-1 
in place of paragraph (e) in the provision in FAR 52.215-1, Instructions 
to Offerors--Competitive Acquisition, in solicitations for competitive, 
negotiated acquisitions valued at more than the simplified acquisition 
threshold. This is an authorized FAR deviation.

                     Subpart 315.3_Source Selection



Sec. 315.303-70  Policy.

    (a) If an OPDIV is required by statute to use peer review for 
technical review of specified contracts, the requirements of those 
statutes, any implementing regulatory requirements, the Federal Advisory 
Committee Act, and as applicable, any approved HHSAR deviation(s) from 
this subpart take precedence over the otherwise applicable requirements 
of this subpart.
    (1) The statutes that require such review and implementing 
regulations are as follows: NIH--42 U.S.C. 289a and 42 CFR Part 52h; 
SAMHSA--42 U.S.C. 290aa-3, and AHRQ--42 U.S.C. 299c-1.



Sec. 315.304  Evaluation factors and significant subfactors.

    (a) A solicitation for EIT products and services, including EIT 
deliverables such as electronic documents and reports, shall include a 
separate technical evaluation factor (which may be in the form of a 
technical evaluation criterion or a mandatory qualification criterion, 
as appropriate) developed by the Contracting Officer, Project Officer, 
and the OPDIV Section 508 Coordinator to determine vendor compliance 
with applicable Section 508 accessibility standards. The technical 
evaluation panel's assessment of Section 508 accessibility standards 
conformance shall be based on the Section 508 Product Assessment 
Template--see Section 508 policy on Office of Disability Web site for 
the template, and on any other pertinent information that offerors 
provide in response to a solicitation. The HHS Office on Disability is 
responsible for providing technical assistance in Section 508 evaluation 
factor development.
    (b) Before conducting negotiations or making an award, the 
Contracting Officer shall provide a summary of the technical evaluation 
panel's assessment of vendor responses to the solicitation's Section 508 
evaluation factor for review by the Section 508 Official or designee. 
The Section 508 Official or designee shall indicate approval/disapproval 
of the evaluation panel's assessment. The Contracting Officer shall 
coordinate the resolution of any issues raised by the Section 508 
Official or designee with the chair of the technical evaluation panel or 
Project Officer, as appropriate. The acquisition process shall not 
proceed unless and until the Section 508 Official or designee has 
approved the technical evaluation panel's assessment. The Contracting 
Officer shall include the assessment in the official contract file. See 
339.203 regarding processing exception determination requests.



Sec. 315.305  Proposal evaluation.

    (a)(1) Cost or price evaluation.
    (i) The Contracting Officer shall evaluate proposals in accordance 
with the FAR 15.404. The extent of cost or price analysis in each case 
depends on the availability of competition, contract type, the proposed 
amount, and technical complexity.
    (A) For competitive firm-fixed-price and fixed price with economic 
price adjustment contracts, price analysis should be sufficient to 
determine price fairness and reasonableness.
    (B) When competition is not adequate for the above contract types, 
and for cost-reimbursement and time and materials contracts, cost 
analysis may be required. In such cases, the Contracting Officer shall 
request the Project Officer's assistance in analyzing the following cost 
elements, if

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applicable, to determine if the proposed amounts are necessary and 
reasonable for efficient contract performance:
    (1) The number and mix of proposed labor hours relative to the 
technical requirements.
    (2) Types, numbers and hours/days of proposed consultants.
    (3) The kinds and quantities of material, equipment, supplies, and 
services.
    (4) Kinds and quantities of IT.
    (5) Logic of proposed subcontracting.
    (6) Travel proposed, including number of trips, locations, purpose, 
and travelers.
    (7) Other direct costs not specified above.
    (ii) The Project Officer shall provide written comments, including 
the rationale for any exceptions to the cost elements. The Contracting 
Officer shall consider the Project Officer's comments for negotiations 
or to support award without discussions. The Contracting Officer shall 
also request assistance of a cost/price analyst, when necessary.
    (2) Past performance evaluation. When evaluating past performance, 
the Contracting Officer shall check references to obtain information 
concerning the performance history of offerors in compliance with FAR 
42.1502. The Contracting Officer may require the assistance of the 
Project Officer as well as other Government technical personnel in 
performing this function.
    (3) Technical evaluation.
    (i) Technical evaluation plan.
    (A) The Contracting Officer shall require a technical evaluation 
plan if the proposed acquisition either requires preparation of an AP--
see 307.71 or is otherwise sufficiently complex.
    (B) The technical evaluation plan shall include, at a minimum, the 
following elements:
    (1) A list of recommended technical evaluation panel members, their 
organizations, a list of their major consulting clients (if applicable), 
their qualifications, and curricula vitae (if applicable).
    (2) A statement that the technical evaluation panel will include 
non-Federal technical proposal evaluators, if applicable, and a 
determination that sufficient Federal technical proposal evaluators are 
unavailable--see FAR 37.204. A determination to use non-Federal proposal 
evaluators shall be signed at a level no lower than the HCA. A 
determination is not required, however, if non-Federal evaluators will 
be used in accordance with 315.303-70(a).
    (3) A statement that there is no apparent or actual conflict of 
interest regarding any recommended panel member.
    (4) A copy of each rating sheet, approved by the Contracting 
Officer, to ensure consistency with the evaluation criteria.
    (5) A brief description of the general evaluation approach.
    (6) A description of the methodology for evaluating key elements in 
the technical evaluation plan, including any solicitation evaluation 
factor involving the acquisition of EIT products and services subject to 
Section 508.
    (C) Except as provided in OPDIV procedures, a program office 
official at least one level above the Project Officer shall approve the 
technical evaluation plan.
    (D) The Project Officer shall provide the technical evaluation plan 
to the Contracting Officer for review and approval before the 
solicitation is issued. The Contracting Officer shall ensure that the 
evaluation criteria reflect the significant factors and subfactors 
relating to the evaluation when conducting the review of the plan.
    (ii) Technical evaluation panel.
    (A) General.
    (1) A technical evaluation panel is required for all acquisitions 
subject to this subpart that require preparation of an AP. The 
Contracting Officer may require a technical evaluation panel for 
acquisitions that do not require preparation of an AP, based on the 
complexity of the acquisition and the role that the technical evaluation 
will have in the award decision.
    (2) The technical evaluation process requires careful consideration 
regarding the size, composition, expertise, and function of the 
technical evaluation panel. The panel's efforts will influence the 
success or failure of the acquisition.
    (3) At least 50 percent of the HHS personnel on a technical 
evaluation

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panel shall have successfully completed HHS University's ``Basic 
Contracting Officer's Technical Representative'' course or an equivalent 
course within 4 years before assuming their designated role. This 
training requirement applies to evaluators performing the initial 
technical evaluation and any subsequent technical evaluations, but does 
not apply to peer review panel members. The Contracting Officer may 
waive this training requirement in exigent circumstances if documented 
in writing and approved by the Head of Contracting Activity. This 
training requirement applies to evaluators performing the initial 
technical evaluation and any subsequent technical evaluations. However, 
this training requirement does not apply to peer review panel members.
    (B) Role of the Project Officer.
    (1) The Project Officer provides guidance, information, and 
assistance to the Contracting Officer on all technical aspects of a 
proposed acquisition--see 302.101. The Project Officer may be a voting 
member of the technical evaluation panel and may serve as the 
chairperson of the panel unless prohibited by law or contracting 
activity procedures.
    (2) The Project Officer shall recommend panel members who have 
sufficient expertise in the technical aspects of the acquisition to be 
able to evaluate strengths and weaknesses in proposals.
    (3) The Project Officer shall ensure that persons possessing 
expertise and experience in addressing issues relative to sex, race, 
national origin, and disability are included as panel members for 
acquisitions to which such issues apply.
    (4) The Project Officer shall submit a list of recommended panel 
members to a program office official at least one level higher than him/
herself. This official shall review the list and select the chairperson.
    (5) The Project Officer shall arrange for adequate and secure 
working space for the panel.
    (C) Role of the Contracting Officer.
    (1) The term ``Contracting Officer,'' as used in this subpart, may 
be the Contracting Officer or a Contract Specialist possessing an 
appropriate FAC-C certification.
    (2) The Contracting Officer shall not serve as a member of the 
technical evaluation panel, but shall--
    (i) Address the initial meeting of the technical evaluation panel;
    (ii) Provide assistance to the evaluators as required; and
    (iii) Ensure that the scores adequately reflect the written 
technical report comments.
    (D) Conflict of interest.
    (1) If a panel member has an actual or apparent conflict of interest 
related to a proposal under evaluation, the individual cannot serve on 
the panel. If a suitable replacement is not available, the panel shall 
perform the review without a replacement.
    (2) For the purposes of this subpart, conflicts of interest are 
defined in the Standards of Ethical Conduct for Employees of the 
Executive Branch (5 CFR part 2635), Supplemental Standards of Ethical 
Conduct for Employees of the Department of Health and Human Services (5 
CFR part 5501), and the Procurement Integrity Act. For outside 
evaluators serving on the technical evaluation panel, see paragraph 
(a)(3)(ii)(F) of this section.
    (E) Continuity of evaluation process.
    (1) The technical evaluation panel shall evaluate all original 
proposals; make recommendations to the chairperson regarding strengths 
and weaknesses of proposals; if required by the Contracting Officer, 
assist the Contracting Officer during communications and discussions; 
and review supplemental, revised or final proposal revisions. To the 
extent possible, the same evaluators shall be available throughout the 
entire evaluation and selection process to ensure continuity and 
consistency in the treatment of proposals. The following are examples of 
circumstances when it would not be necessary for the technical 
evaluation panel to evaluate revised proposals submitted during the 
acquisition:
    (i) The answers to questions do not have a substantial impact on the 
proposal.
    (ii) Final proposal revisions are not materially different from the 
original proposals.

[[Page 57]]

    (iii) Revisions to the proposals are relatively minor and do not 
affect the rankings of the offerors.
    (2) The Contracting Officer, with the written concurrence of the 
technical evaluation panel chairperson, may decide not to have the panel 
evaluate the revised proposals. The Contracting Officer shall fully 
document such a decision in the contract file.
    (3) When the Contracting Officer considers technical evaluation 
panel meetings necessary, the attendance of evaluators is mandatory. 
When the chairperson determines that an evaluator's failure to attend 
the meetings is prejudicial to the evaluation, the chairperson shall 
remove or replace the individual after discussing the situation with the 
Contracting Officer and obtaining the Contracting Officer's concurrence 
and the approval of the official responsible for appointing the panel 
members.
    (4) When continuity of the evaluation process is not possible, and 
new evaluators are selected or the size of the evaluation panel is 
reduced, each panel member shall review all proposals at the current 
stage of the acquisition--i.e., initial proposal, final proposal 
revisions, etc. Also, the Contracting Officer shall provide guidance 
concerning what steps to take if an unusually large number of proposals 
is received, including how to determine what constitutes an unusually 
large number of proposals.
    (F) Use of outside evaluators.
    (1) Except when peer review is required by statute as provided in 
315.303-70(a), decisions to disclose proposals to evaluators outside of 
the Government shall be made by the official responsible for appointing 
panel members in accordance with OPDIV procedures. The avoidance of 
organization conflict of interest and competitive relationships must be 
taken into consideration when making the decision to use outside 
evaluators.
    (2) When a solicited proposal will be disclosed outside the 
Government for evaluation purposes, the following or similar conditions 
shall be part of the written agreement with the evaluator(s) prior to 
disclosure:

                   Conditions for Evaluating Proposals

    The evaluator agrees to use the data (trade secrets, business data, 
and technical data) contained in the proposal for evaluation purposes 
only. The foregoing requirement does not apply to data obtained from 
another source without restriction. Any notice or legend placed on the 
proposal by either HHS or the submitter of the proposal shall be applied 
to any reproduction or abstract provided to the evaluator or made by the 
evaluator. Upon completion of the evaluation, the evaluator shall return 
to the Government the furnished copy of the proposal or abstract, and 
all copies thereof, to the HHS office which initially furnished the 
proposal for evaluation. Unless authorized by the HHS initiating office, 
the evaluator shall not contact the submitter of the proposal concerning 
any aspects of its contents. The evaluator's employees and 
subcontractors shall abide by these conditions.

    (iii) Receipt of proposals.
    (A) After the closing date for the receipt of proposals set in the 
solicitation, the Contracting Officer shall forward the technical 
proposals, by memorandum, to the Project Officer or chairperson for 
evaluation. The Contracting Officer shall retain the business proposals 
for evaluation.
    (B) The transmittal memorandum shall include at least the following 
elements:
    (1) A list of the names of the organizations submitting proposals.
    (2) A reference to the need to preserve the integrity of the source 
selection process.
    (3) A statement that only the Contracting Officer is authorized to 
conduct discussions.
    (4) A requirement for a technical evaluation report in accordance 
with paragraph (a)(3)(vi) of this section.
    (5) The establishment of a date for receipt of the technical 
evaluation report.
    (iv) Convening the technical evaluation panel.
    (A) Normally, the technical evaluation panel convenes to evaluate 
proposals. However, there may be situations when the panel chairperson 
determines that it is not feasible for the panel to convene. Whenever 
the panel does not convene, the panel chairperson shall closely monitor 
the technical review to produce acceptable results.

[[Page 58]]

    (B) When a panel convenes, the chairperson shall control the 
technical proposals provided by the Contracting Officer for use during 
the evaluation process. The chairperson normally distributes the 
technical proposals prior to the initial panel meeting and establishes 
procedures for securing the proposals whenever they are not being 
evaluated to ensure their confidentiality. After an evaluation is 
completed, the chairperson shall return all proposals to the Contracting 
Officer.
    (C) The Contracting Officer shall address the initial meeting of the 
panel and state the basic rules for conducting the evaluation. The 
Contracting Officer shall provide written guidance to the panel, if the 
Contracting Officer cannot attend the initial panel meeting. The 
guidance shall include the following elements:
    (1) An explanation of the evaluation process and the role of 
evaluators throughout the process.
    (2) The need for evaluators to read and understand the solicitation, 
especially the SOW/PWS and evaluation criteria, prior to reading the 
proposals.
    (3) The need for evaluators to restrict the review to only the SOW/
PWS, the evaluation criteria, and the contents of the technical 
proposals.
    (4) The need for each evaluator to review all of the proposals.
    (5) The need for evaluators to identify ambiguities, 
inconsistencies, errors, and deficiencies.
    (6) The need for the evaluators to provide complete written 
documentation of the individual strengths and weaknesses for each 
proposal.
    (7) An instruction specifying that, until an award is made, they may 
not disclose information concerning the acquisition to any person not 
directly involved in the evaluation process.
    (8) An explanation of conflicts of interest.
    (v) Rating and ranking of proposals. The evaluators shall 
individually read each proposal, describe tentative strengths and 
weaknesses, and independently assign preliminary scores in relation to 
each evaluation factor set forth in the solicitation. The evaluators may 
then discuss in detail the individual strengths and weaknesses described 
by each evaluator and, if possible, arrive at a common understanding of 
the major strengths and weaknesses and the potential for correcting each 
offeror's weakness(es). Each evaluator shall assign a final score to 
each proposal, and the technical evaluation panel shall collectively 
rank the proposals. Normally, ranking is the result of adding the 
numerical scores assigned to the evaluation factors and determining the 
average for each offeror. The evaluators shall then identify whether 
each proposal is acceptable or unacceptable. The technical evaluation 
panel shall not employ predetermined cutoff scores.
    (vi) Technical evaluation report. The chairperson shall prepare a 
technical evaluation report and provide it to the Contracting Officer, 
who shall maintain it as a permanent record in the contract file. The 
report shall reflect the ranking of the proposals and identify each 
proposal as acceptable or unacceptable. The report shall also include a 
narrative evaluation specifying the strengths and weaknesses of each 
proposal, and any reservations, qualifications, or areas to be addressed 
that might bear upon the selection of sources for negotiation and award. 
The report shall include concrete technical reasons supporting any 
determination of unacceptability of a proposal and, for acceptable 
proposals, include specific points and questions for discussions or 
negotiations. The technical evaluation report shall also include a copy 
of each signed rating sheet, unless the Contracting Officer determines, 
in accordance with FAR 15.305(a)(3)(ii), and 315.305(a)(3)(vi), that the 
technical evaluation report includes appropriate and sufficiently 
detailed supporting narrative (with specific references to particular 
portions of offerors' proposals) to (1) fully and reasonably explain the 
basis for the technical evaluation panel's assessments of each proposal, 
including an evaluation rating of ``acceptable'' or ``unacceptable; and 
(2) support any recommendation to include or not include a proposal in 
the competitive range. However, when peer review of proposals is 
required as provided in 315.303-70(a), OPDIVs shall follow applicable 
peer review guidelines

[[Page 59]]

and practices regarding the submission, maintenance, and disposal of 
reviewer rating sheets.

[74 FR 62398, Nov. 27, 2009, as amended at 75 FR 21510, Apr. 26, 2010]



Sec. 315.306  Exchanges with offerors after receipt of proposals.

    (d) Exchanges with offerors after establishment of the competitive 
range. The Project Officer or technical evaluation panel shall develop 
technical questions as part of the technical evaluation report. The 
questions shall disclose the ambiguities, weaknesses, and deficiencies 
of offeror(s)' proposals. The Contracting Officer, with the assistance 
of the Project Officer or panel as required, shall prepare the 
management, past performance, and cost or price questions. The method of 
requesting offerors in the competitive range to submit additional 
information may vary depending on the complexity of the questions, the 
extent of additional information necessary, the time needed to analyze 
the responses, and the time frame for making the award. However, to the 
extent practicable, all questions and answers shall be in writing. The 
Contracting Officer shall give each offeror in the competitive range an 
equitable period of time for preparation of responses to questions to 
the extent practicable.



Sec. 315.307  Proposal revisions.

    (b) Final proposal revisions are subject to--
    (1) A final evaluation of price or cost and other salient factors by 
the Contracting Officer and Project Officer, with assistance from a 
cost/price analyst, as appropriate; and
    (2) An evaluation of technical factors by the technical evaluation 
panel, as necessary.
    The technical evaluation panel may rescore and re-rank technical 
proposals in the competitive range and prepare a technical evaluation 
report. To the extent practicable, the same evaluators who reviewed the 
original proposals shall perform the evaluation. The Contracting Officer 
and Project Officer shall conduct a final evaluation of past 
performance. The technical evaluation panel may be involved in the final 
evaluation of past performance, if the panel is comprised solely of 
Government personnel.



Sec. 315.370  Finalization of details with the selected source.

    (a) After selection of the successful proposal, the Contracting 
Officer may finalize details with the selected offeror, if necessary. 
However, the Contracting Officer shall not introduce any factor that 
could have an effect on the selection process after the common cutoff 
date for receipt of final proposal revisions, nor shall the finalization 
process in any way prejudice the competitive interest or rights of the 
unsuccessful offerors. The Contracting Officer shall restrict 
finalization of details with the selected offeror to definitizing the 
final agreement on terms and conditions, assuming none of these factors 
were involved in the selection process.
    (b) Whenever a change occurs in the requirements, the Contracting 
Officer shall reopen the competition, and provide all offerors 
submitting final proposal revisions an opportunity to resubmit proposals 
based on the revised requirements. If there is a question as to whether 
a change is material and would require the initiation of a new 
competition, the Contracting Officer shall obtain the advice of 
technical personnel and OGC-GLD before proceeding. Significant changes 
in the offeror's cost proposal may also necessitate a reopening of a 
competition, if the changes alter the factors involved in the original 
selection process.
    (c) Upon finalization of details, the Contracting Officer shall 
obtain a confirmation letter from the successful offeror which includes 
any revisions to its technical proposal, the agreed upon price or cost, 
and, as applicable, a certificate of current cost or pricing data.



Sec. 315.371  Contract preparation and award.

    (a) After completing any activities that may be necessary to 
finalize details with the selected offeror, the Contracting Officer 
shall--
    (1) Prepare the negotiation memorandum in accordance with 315.372;
    (2) Prepare the contract containing all agreed to terms and 
conditions and clauses required by law or regulation;

[[Page 60]]

    (3) Include in the contract file the pertinent documents referenced 
in FAR 4.803; and
    (4) Obtain the appropriate approval of the proposed contract 
award(s) in accordance with subpart 304.71 and contracting activity 
procedures.
    (b) After receiving the required approvals, the Contracting Officer 
shall--
    (1) Transmit the contract to the prospective contractor for 
signature; and
    (2) Inform the prospective contractor that the contract is not 
effective until the Contracting Officer transmits the fully executed 
contract to the contractor.
    (c) The Contracting Officer shall not sign or issue the contract 
until the finance office certifies that the funds are available for 
obligation.



Sec. 315.372  Preparation of negotiation memorandum.

    The Contracting Officer shall prepare a negotiation memorandum, or 
summary of negotiations, to document all actions leading to award of a 
contract and support the source selection decision discussed in FAR 
15.308. The memorandum also satisfies the requirement for preparation of 
a ``cost/price negotiation memorandum'' required by FAR 15.406-3. The 
memorandum shall be in sufficient detail to explain and support the 
rationale, judgments, and authorities upon which all actions were 
predicated. The memorandum shall document the negotiation process and 
reflect the negotiator's actions and judgments in concluding a 
satisfactory agreement for the Government. The memorandum shall address 
each item listed below. If an item is not applicable, the memorandum 
shall so state. The Contracting Officer may reference information 
already contained in the contract file rather than reiterate it.
    (a) Description of articles and services and period of performance. 
Provide a description of the articles or services, quantity, unit price, 
total contract amount, and period of contract performance.
    (b) Acquisition planning. Summarize or reference any acquisition 
planning activities that have taken place.
    (c) Synopsis of acquisition. Provide a statement as to whether the 
acquisition has or has not been publicized in accordance with FAR 
Subpart 5.2. Include a brief statement referencing the specific basis 
for exemption under the FAR, if applicable.
    (d) Contract type. Provide sufficient detail to support the type of 
contractual instrument recommended for the acquisition. If the contract 
is a cost-sharing type, explain the essential cost-sharing features.
    (e) Extent of competition. Discuss the extent to which full and open 
competition was solicited and obtained. Include the date of 
solicitation, sources solicited, and solicitation results. If a late 
proposal was received, discuss whether or not the late proposal was 
evaluated and the rationale for the decision.
    (f) Technical evaluation. Summarize or reference the results 
presented in the technical evaluation report.
    (g) Business evaluation. Summarize or reference results presented in 
the business report.
    (h) Past performance. Summarize or reference results of both the 
past performance evaluation and reference checks.
    (i) Competitive range (if applicable). Describe how the competitive 
range was determined, and indicate the offerors that were included in 
and excluded from the competitive range.
    (j) Cost breakdown and analysis. Include a complete cost breakdown 
together with the Contracting Officer's analysis of the estimated cost 
by individual cost elements. The analysis shall discuss the items 
specified in FAR 15.406-3 and other cost factors, such as--
    (1) A comparison of cost factors proposed for the current 
requirement with actual factors used in earlier contracts, using the 
same cost centers of the same supplier or cost centers of other sources 
having recent contracts for the same or similar item;
    (2) Any pertinent Government-conducted audit of the proposed 
contractor's record or any pertinent cost advisory report;
    (3) Any pertinent technical evaluation inputs as to necessity, 
allocability and reasonableness of labor, material and other direct 
expenses;

[[Page 61]]

    (4) Any other pertinent information to fully support the basis for 
the cost analysis;
    (5) If the contract is an incentive type, a discussion of all 
elements of profit and fee structure; and
    (6) A justification of the reasonableness of the contractor's 
proposed profit or fixed fee considering the requirements of FAR 15.404-
4 and 315.404-4.
    (k) Cost realism. Describe the cost realism analysis performed on 
proposals.
    (l) Government-furnished property and facilities. With respect to 
Government-furnished facilities, equipment, tooling, or other property, 
include the following:
    (1) If the Government will not provide property, a statement to that 
effect.
    (2) If the Government will provide property, a full description of 
it, its estimated dollar value, the basis of price comparison with 
competitors, and the basis of rental charge, if rental is involved.
    (3) If a decision to furnish property has not been made, a detailed 
explanation.
    (m) Negotiations. Include a statement as to the date and place of 
negotiations, and identify members of both the Government and contractor 
negotiating teams by area of responsibility. Include negotiation details 
relative to the SOW/PWS, terms and conditions, and special provisions. 
The results of cost or price negotiations shall include the information 
required by FAR 31.109 and 15.406-3. In addition, if the potential 
contractor provided cost or pricing data, specify the extent to which 
the Contracting Officer relied upon the factual cost or pricing data 
submitted and used it in negotiating the cost or price.
    (n) Other considerations. Include coverage of areas such as the 
following:
    (1) Financial data with respect to a contractor's capacity and 
stability.
    (2) Determination of contractor responsibility.
    (3) Details as to why the method of payment, such as progress 
payments, advance payments, etc., is necessary and cite any required D & 
F's.
    (4) Information with respect to obtaining a certificate of current 
cost or pricing data.
    (5) Other required special approvals.
    (6) If the contract represents an extension of previous work, the 
status of funds and performance under the prior contract(s). Also, the 
Project Officer shall provide sufficient information for the Contracting 
Officer to determine that the Government has obtained enough actual or 
potential value from the work previously performed to warrant 
continuation with the same contractor.
    (7) A statement that the Contracting Officer has explained the equal 
opportunity provisions of the proposed contract to the contractor, and 
the contractor is aware of its responsibilities. Also, state whether or 
not an Equal Employment Opportunity (EEO) clearance is required.
    (8) If the contract is for services, a statement, in accordance with 
FAR 37.103, that the services are nonpersonal in nature.
    (o) Terms and conditions. Identify the general and special clauses 
and conditions that are contained in the contract, such as option 
arrangements, multi-year contracting, anticipatory costs, deviations 
from standard clauses, etc. The Contracting Officer shall state the 
rationale for inclusion of any special terms and conditions and, where 
applicable, identify the document which granted approval for their use.
    (p) Recommendation. Briefly state the basis (or bases) for 
recommending award.
    (q) Signature. The Contracting Officer and the individual who 
prepared the negotiation memorandum must sign the document.

                     Subpart 315.4_Contract Pricing



Sec. 315.404  Proposal analysis.



Sec. 315.404-2  Information to support proposal analysis.

    (a)(2) When some or all information sufficient to determine the 
reasonableness of the proposed cost or price is already available or can 
be obtained by phone from the cognizant audit agency, the Contracting 
Officer may request less-than-complete field pricing support (specifying 
in the request the information needed) or may waive in writing the 
requirement for audit and

[[Page 62]]

field pricing support by documenting the file to indicate what 
information will be used instead of the audit report and the field 
pricing report.
    (3) When initiating audit and field pricing support, the Contracting 
Officer shall do so by sending a request to the cognizant Administrative 
Contracting Officer, with an information copy to the cognizant audit 
office. When field pricing support is not available, the Contracting 
Officer shall initiate an audit by sending, in accordance with agency 
procedures, two (2) copies of the request to the OIG Office of Audit 
Services, Regional Inspector General. In both cases, the Contracting 
Officer shall, in the request--
    (i) Prescribe the extent of the support needed;
    (ii) State the specific areas for which input is required;
    (iii) Include the information necessary to perform the review, such 
as the offeror's proposal and the applicable portions of the 
solicitation, particularly those describing requirements and delivery 
schedules;
    (iv) Provide the complete address of the location of the offeror's 
financial records that support the proposal;
    (v) Identify the office having audit responsibility, if other than 
the HHS Regional Audit Office; and
    (vi) Specify a due date for receipt of a verbal report and the 
written audit report. If the time available is not adequate to permit 
satisfactory coverage of the proposal, the auditor shall so advise the 
Contracting Officer and indicate the additional time needed. The 
Contracting Officer shall submit one copy of the audit request letter 
provided to the Office of Audit Services, Regional Inspector General and 
a complete copy of the contract price proposal to OIG Office of Audit 
Services. Whenever the Office of Audit Services has conducted an audit 
review, the Contracting Officer shall forward two (2) copies of the 
memorandum of negotiation to OIG Office of Audit Services.



Sec. 315.404-4  Profit.

    (b) Policy. (1) The structured approach for determining profit 
provides a technique for establishing a profit objective for 
negotiation. A profit objective is that part of the estimated contract 
price objective or value which, in the judgment of the Contracting 
Officer, constitutes an appropriate amount of profit for the acquisition 
being considered. This technique allows for consideration of the profit 
factors described in paragraph (d) of this section. The Contracting 
Officer's analysis of these factors shall be based on available 
information, such as proposals, audit data, assessment reports, and pre-
award surveys. The structured approach provides a basis for documenting 
the profit objective. The Contracting Officer shall explain any 
significant departure from this objective. The amount of documentation 
depends on the dollar value and complexity of the proposed acquisition. 
The profit objective is a part of the overall negotiation objective and 
is directly related to the cost objective and any proposed sharing 
arrangement. The profit objective shall exclude factors considered 
inapplicable to the acquisition.
    (ii) The Contracting Officer shall negotiate the profit objective at 
the same time as the other cost items and as a whole rather than as 
individual profit factors. The profit factor breakdown shall be part of 
the documentation. The Contracting Officer shall use the profit analysis 
factors in FAR 15.404-4(d) in lieu of the structured approach in the 
following circumstances:
    (A) Contracts not expected to exceed $100,000.
    (B) A & E contracts.
    (C) Management contracts for operations or maintenance of Government 
facilities.
    (D) Construction contracts.
    (E) Contracts primarily requiring delivery of material supplies by 
subcontractors
    (F) Termination settlements.
    (G) Cost-plus-award-fee contracts.
    However, the Contracting Officer may perform a structured profit 
analysis as an aid in arriving at an appropriate fee arrangement. The 
Contracting Officer may make other exceptions in the negotiation of 
contracts having unusual pricing situations, but shall justify in 
writing those situations where the structured approach is determined to 
be unsuitable.
    (c) Contracting Officer responsibilities. The Contracting Officer 
shall develop

[[Page 63]]

the profit objective, which shall realistically reflect the total 
overall effort of the contractor. The Contracting Officer shall not 
begin to develop the profit objective until he or she has completed a 
thorough review of the proposed contract work; conducted a review of all 
available knowledge regarding the contractor pursuant to FAR subpart 
9.1, including audit data, pre-award survey reports and financial 
statements, as appropriate; and completed an analysis of the 
contractor's cost estimate and comparison with the Government's estimate 
or projection of cost.
    (d) Profit-analysis factors--(1) Common factors. The Contracting 
Officer shall consider the following factors in all cases in which 
profit is negotiated and shall use the weight ranges listed after each 
factor in all instances where the structured approach is used.

------------------------------------------------------------------------
              Profit factors                      Weight ranges (%)
------------------------------------------------------------------------
Contractor Effort:
    Material acquisition..................  1 to 5.
  Direct labor............................  4 to 15.
  Overhead................................  4 to 9.
  General & Administrative (G & A)........  4 to 8.
  Other costs.............................  1 to 5.
Other Factors:
  Cost risk...............................  0 to 7.
  Investment..............................  -2 to +2.
  Performance.............................  -1 to +1.
  Socioeconomic programs..................  -.5 to +.5.
  Special situations
------------------------------------------------------------------------

    (i) The Contracting Officer shall measure ``Contractor Effort'' by 
assigning a profit percentage within the designated weight range to each 
element of contract cost. The categories listed are for reference 
purposes only, but are broad and basic enough to provide guidance for 
other elements of cost. The Contracting Officer shall not include 
facilities capital cost of money. ``Contractor Effort'' shall include a 
computed total dollar profit.
    (ii) The Contracting Officer shall use the total dollar profit for 
the ``Contractor Effort'' to calculate specific profit dollars for 
``Other Factors''--cost risk, investment, performance, socioeconomic 
programs, and special situations. The Contracting Officer shall multiply 
the total dollar profit for the ``Contractor Effort'' by the weight 
assigned to each of the elements in the ``Other Factors'' category. 
Facilities capital cost of money is not included. Form HHS 674, 
Structured Approach Profit/Fee Objective, shall be used.
    (iii) In making a judgment of the value of each factor, the 
Contracting Officer shall consider the definition, description, and 
purpose of the factors together with considerations for evaluating them.
    (iv) The structured approach was designed for arriving at profit 
objectives for other than nonprofit organizations. However, the 
Contracting Officer shall use the modified structured approach in 
paragraph (d)(1)(iv)(B) of this section to establish fee objectives for 
nonprofit organizations.
    (A) For purposes of this section, nonprofit organizations are 
defined as those business entities organized and operated exclusively 
for charitable, scientific, or educational purposes, no part of the net 
earnings of which inure to the benefit of any private shareholder or 
individual, and which are exempt from Federal income taxation under 
Section 501(c)(3) of the Internal Revenue Code.
    (B) For contracts with nonprofit organizations where fee is 
involved, the Contracting Officer shall subtract up to three percentage 
points from the total ``profit'' objective percentage. In determining 
the amount of this adjustment, the Contracting Officer shall consider 
the following factors:
    (1) Tax position benefits.
    (2) Granting of financing through advance payments.
    (3) Other pertinent factors which may work to either the advantage 
or disadvantage of the contractor in its position as a nonprofit 
organization.
    (2) Contractor effort. Contractor effort is a measure of how much 
the contractor is expected to contribute to the overall effort necessary 
to meet the contract performance requirement in an efficient manner. 
This factor, which is apart from the contractor's responsibility for 
contract performance, takes into account what resources are necessary 
and what steps the contractor must take to accomplish a conversion of 
ideas and material into the final service or product called for in the 
contract. This is a recognition that within a given performance output, 
or within a given sales dollar figure, necessary

[[Page 64]]

efforts on the part of individual contractors can vary widely in both 
value and quantity, and that the profit objective shall reflect the 
extent and nature of the contractor's contribution to total performance. 
A major consideration, particularly in connection with experimental or R 
& D work, is the difficulty or complexity of the work to be performed, 
and the unusual demands of the contract, such as whether the project 
involves a new approach unrelated to existing technology or equipment or 
only refinements to these items. The evaluation of this factor requires 
an analysis of the cost content of the proposed contract as follows:
    (i) Material acquisition (subcontracted items, purchased parts, and 
other material). Analysis of these cost items shall include an 
evaluation of the managerial and technical effort necessary to obtain 
the required subcontracted items, purchased parts, material or services. 
The Contracting Officer shall determine whether the contractor will 
obtain the items or services by routine order from readily available 
sources or by detailed subcontracts for which the prime contractor must 
develop complex specifications. The Contracting Officer shall also 
consider the managerial and technical efforts necessary for the prime 
contractor to select subcontractors and to perform subcontract 
administration functions, which may be substantial. Normally, the lowest 
unadjusted weight for direct material is two percent. A weighting of 
less than two percent may be appropriate only in unusual circumstances 
when there is a minimal contribution by the contractor.
    (ii) Direct labor (professional, service, manufacturing and other 
labor). Analysis of the various labor categories of the cost content of 
the contract shall include evaluation of the comparative quality and 
quantity of professional and semiprofessional talents, manufacturing and 
service skills, and experience to be employed. In evaluating 
professional and semiprofessional labor for the purpose of assigning 
profit dollars, the Contracting Officer shall consider the amount of 
notable scientific talent or unusual or scarce talent needed in contrast 
to nonprofessional effort, including the contribution this talent will 
provide toward the achievement of contract objectives. Since 
nonprofessional labor is relatively plentiful and the contractor may 
easily obtain it, it is less critical to the successful performance of 
contract objectives. Therefore, the Contracting Officer cannot weight it 
nearly as high as professional or semiprofessional labor. The 
Contracting Officer shall evaluate service contract labor in a like 
manner by assigning higher weights to engineering or professional type 
skills required for contract performance and considering the variety of 
manufacturing and other categories of labor skills required and the 
contractor's personnel resources for meeting those requirements. For 
purposes of evaluation, the Contracting Officer may separately 
categorize, as appropriate, certain types of labor (e.g., quality 
control, receiving and inspection), that do not fall within the 
definition of professional, service or manufacturing labor; but shall 
apply the same evaluation considerations as outlined in this paragraph.
    (iii) Overhead and G & A expense.
    (A) Analysis of these overhead items of cost shall include the 
evaluation of the makeup of these expenses and how much they contribute 
to contract performance. To the extent practicable, analysis shall 
include a determination of the amount of labor within these overhead 
pools and how this labor would be treated if it were considered direct 
labor under the contract. The Contracting Officer shall give the 
allocable labor elements the same profit considerations that they would 
receive if they were treated as direct labor. The other elements of 
these overhead pools require analysis to determine whether they are 
routine expenses, such as utilities and maintenance, and hence given 
lesser profit consideration, or whether they are significant 
contributing elements. The composite of the individual determinations in 
relation to the elements of the overhead pools shall be the profit 
consideration given the pools as a whole. The procedure for assigning 
relative values to these overhead expenses differs from the method used 
in assigning values of the direct labor. The upper and lower limits 
assignable to the direct labor are absolute. In the case of overhead

[[Page 65]]

expenses, individual expenses may be assigned values outside the range 
as long as the composite ratio is within the range.
    (B) It is not necessary that the contractor's accounting system 
break down overhead expenses within the classifications of research 
overhead, other overhead pools, and general administrative expenses, 
unless dictated otherwise by Cost Accounting Standards (CAS). The 
contractor whose accounting system reflects only one overhead rate on 
all direct labor need not change its system, if CAS exempt, to 
correspond with these classifications. The Contracting Officer, in an 
evaluation of such a contractor's overhead rate, may break out the 
applicable sections of the composite rate which could be classified as 
research overhead, other overhead pools, and general and administrative 
expenses, and follow the appropriate evaluation technique.
    (C) The Contracting Officer shall consider management problems that 
may surface in varying degrees and the management expertise exercised to 
solve them as an element of profit. For example, a contract for a new R 
& D program or an item which is on the cutting edge may cause more 
problems and require more managerial time and abilities of a higher 
order than a follow-on contract. If new contracts create more problems 
and require a higher profit weight, the Contracting Officer shall adjust 
follow-ons downward because many of the problems should have been 
solved. In any event, the evaluation shall consider the underlying 
managerial effort involved on a case-by-case basis.
    (D) It may not be necessary for the Contracting Officer to make a 
separate profit evaluation of overhead expenses, in connection with each 
acquisition action for substantially the same project with the same 
contractor. Where the Contracting Officer has made an analysis of the 
profit weight to be assigned to the overhead pool, the weight assigned 
may apply to future acquisitions with the same contractor unless there 
is a change in the cost composition of the overhead pool or contract 
circumstances, or unless the factors discussed in paragraph 
(d)(2)(iii)(C) of this section are involved.
    (iv) Other costs. Analysis of this factor shall include all other 
direct costs associated with contractor performance (e.g., travel and 
relocation, direct support, and consultants). Analysis of these items of 
cost shall include the significance of the cost of contract performance, 
nature of the cost, and how much they contribute to contract 
performance. Normally, travel costs require minimal administrative 
effort by the contractor and, therefore, usually receive a weight no 
greater than one percent. Also, the contractor may designate individuals 
as ``consultants,'' but in reality the contractor may obtain these 
individuals to supplement its workforce in the performance of routine 
duties required by contract. These costs would normally receive a 
minimum weight. However, there may be instances when contract 
performance may require the contractor to obtain the services of 
consultants having expertise in fields such as medicine or human 
services. In these instances, the contractor may expend greater 
managerial and technical effort to obtain these services and, 
consequently, the costs shall receive a much greater weight.
    (3) Other factors:
    (i) Contract cost risk. The contract type employed basically 
determines the degree of cost risk assumed by the contractor. For 
example, where a portion of the risk has been shifted to the Government 
through cost-reimbursement provisions, unusual contingency provisions, 
or other risk-reducing measures, the amount of profit shall be less than 
where the contractor assumes all the risk.
    (A) In developing the prenegotiation profit objective, the 
Contracting Officer shall consider the type of contract anticipated and 
the contractor risk associated therewith, when selecting the position in 
the weight range for profit that is appropriate for the risk the 
contractor will bear. This factor is one of the most important in 
arriving at the prenegotiation profit objective. Evaluation of this risk 
requires a determination of: The degree of cost responsibility assumed 
by the contractor; the reliability of the cost estimates in relation to 
the tasks assumed by the contractor; and the complexity of the

[[Page 66]]

tasks assumed by the contractor. This factor is specifically limited to 
the risk of contract costs. Risks associated with a contractor's 
reputation, a contractor's potential loss of a commercial market, or a 
contractor's loss of potential profits in other fields, are not within 
the scope of this factor.
    (B) The first and basic determination of the degree of cost 
responsibility assumed by the contractor is related to the sharing of 
total risk of contract cost by the Government and the contractor through 
the selection of contract type. The extremes are a cost-plus-fixed-fee 
contract requiring the contractor to use its best efforts to perform a 
task and a firm fixed-price contract for a service or a complex item. A 
cost-plus-fixed-fee contract would reflect a minimum assumption of cost 
responsibility, whereas a firm-fixed-price contract would reflect a 
complete assumption of cost responsibility. The determination of risk by 
contract type usually falls into the following percentage ranges:

------------------------------------------------------------------------
                                                                Percent
------------------------------------------------------------------------
Cost-reimbursement type contracts..........................          0-3
Fixed-price type contracts.................................          2-7
------------------------------------------------------------------------

    (C) The second determination is that of the reliability of the cost 
estimates. Sound price negotiation requires well-defined contract 
objectives and reliable cost estimates. Prior experience assists the 
contractor in preparing reliable cost estimates on new acquisitions for 
similar efforts. An excessive cost estimate reduces the likelihood that 
the cost of performance will exceed the contract price, thereby reducing 
the contractor's assumption of contract cost risk.
    (D) The third determination is that of the difficulty of the 
contractor's task. The contractor's task can be difficult or easy, 
regardless of the type of contract.
    (E) Contractors are likely to assume greater cost risk only if 
Contracting Officers objectively analyze the risk associated with 
proposed contracts and are willing to compensate contractors for it. 
Generally, a cost-plus-fixed fee contract will not justify a reward for 
risk in excess of 0.5 percent, nor will a firm fixed-price contract 
justify a reward of less than the minimum in the structured approach. 
The reward for risk, by contract type, will usually fall into the 
following percentage ranges:
    (1) Type of contract and percentage ranges for profit objectives 
based on structured approach for R & D and manufacturing contracts:

------------------------------------------------------------------------
                                                       Percent
------------------------------------------------------------------------
Cost-plus-fixed-fee.......................  0 to 0.5.
Cost-plus-incentive-fee: With cost          1 to 2.
 incentive only.
With multiple incentives..................  1.5 to 3.
Fixed-price-incentive: With cost incentive  2 to 4.
 only.
With multiple incentives..................  3 to 5.
Prospective price redetermination.........  3 to 5.
Firm-fixed-price..........................  5 to 7.
------------------------------------------------------------------------

    (2) Type of contract and percentage ranges for profit objectives 
based on the structured approach for service contracts:

------------------------------------------------------------------------
                                                       Percent
------------------------------------------------------------------------
Cost-plus-fixed-fee.......................  0 to 0.5.
Cost-plus-incentive-fee...................  1 to 2.
Fixed-price incentive.....................  2 to 3.
Firm-fixed-price..........................  3 to 4.
------------------------------------------------------------------------

    (F) These ranges may not be appropriate for all acquisitions. For 
instance, a fixed-price incentive contract with a low ceiling price and 
high incentive share may be tantamount to a firm fixed-price contract. 
In this situation, the Contracting Officer may determine that a basis 
exists for high confidence in the reasonableness of the estimate and 
that little opportunity exists for cost reduction without extraordinary 
efforts. On the other hand, a contract with a high ceiling and low 
incentive formula can be considered to contain cost-plus-incentive-fee 
contract features. In this situation, the Contracting Officer may 
determine that the Government is retaining much of the contract cost 
responsibility and that the risk the contractor assumes is minimal. 
Similarly, if a cost-plus-incentive-fee contract includes an unlimited 
downward (negative) fee adjustment on cost control, it could be 
comparable to a fixed-price-incentive contract. In such a pricing 
environment, the Contracting Officer may determine that the Government 
has transferred a greater amount of cost responsibility to the 
contractor than is typical under

[[Page 67]]

a normal cost-plus-incentive-fee contract.
    (G) The contractor's subcontracting program may have a significant 
impact on the contractor's acceptance of risk. It could cause risk to 
increase or decrease in terms of both cost and performance. This 
consideration shall be a part of the Contracting Officer's overall 
evaluation in selecting a factor to apply to cost risk. The Contracting 
Officer may determine, for instance, that the prime contractor has 
effectively transferred real cost risk to a subcontractor and the 
contract cost risk evaluation may, as a result, be below the range which 
would otherwise apply for the contract type being proposed. However, 
without any substantial transfer of cost risk from the prime contractor 
to a subcontractor, the Contracting Officer shall not lower the contract 
cost risk evaluation merely because a substantial portion of the 
contract costs represents subcontracts.
    (H) In making a contract cost risk evaluation for an acquisition 
that involves definitization of a letter contract, unpriced change 
orders, and unpriced orders under basic ordering agreements, the 
Contracting Officer shall consider the effect on total contract cost 
risk of partial performance before definitization. Under some 
circumstances, the total amount of cost risk may have been effectively 
reduced. Under other circumstances it may be apparent that the 
contractor's cost risk remains substantially unchanged. To be equitable, 
the Contracting Officer shall make the determination of profit weight 
for all recognized costs, both incurred and yet to be expended, 
considering all attendant circumstances--not merely the portion of costs 
incurred or percentage of work completed prior to definitization.
    (I) The Contracting Officer shall consider time-and-materials and 
labor-hour contracts to be cost-plus-fixed-fee contracts for the purpose 
of establishing profit weights in the evaluation of the contractor's 
assumption of contract cost risk, unless otherwise exempt from use of 
the structured approach under paragraph (b)(1)(ii) of this section.
    (ii) Investment. HHS encourages its contractors to perform their 
contracts with the minimum of financial, facilities, or other assistance 
from the Government. As such, it is the purpose of this factor to 
encourage the contractor to acquire and use its own resources to the 
maximum extent possible. The evaluation of this factor shall include an 
analysis of the following:
    (A) Facilities (including equipment). Evaluating how this factor 
contributes to the profit objective requires knowledge of the level of 
facilities utilization needed for contract performance, the source and 
financing of the required facilities, and the overall cost-effectiveness 
of the facilities offered. The Contracting Officer shall provide 
contractors with additional profit, if they furnish their own facilities 
and such contractor-furnished facilities contribute significantly to 
lower total contract costs. On the other hand, contractors that rely on 
the Government to provide or finance needed facilities shall receive a 
corresponding reduction in profit. Between these extremes, the 
Contracting Officer shall evaluate cases on their merits and make 
positive or negative adjustments in profit, as appropriate. When 
applicable, the contractor's computation of facilities capital cost of 
money under CAS 414 can help the Contracting Officer identify the level 
of facilities investment the contractor will employ in contract 
performance.
    (B) Payments. In analyzing this factor, the Contracting Officer 
shall consider the frequency of payments by the Government to the 
contractor. The key to this weighting is to give proper consideration to 
the impact the contract will have on the contractor's cash flow. 
Generally, negative consideration applies to advance payments and 
payments more frequent than monthly, with the Contracting Officer making 
a maximum reduction as the contractor's working capital approaches zero. 
The Contracting Officer shall generally give positive consideration for 
payments less frequent than monthly and for a capital turn-over rate on 
the contract less than the contractor's or the industry's normal capital 
turn-over rate.

[[Page 68]]

    (iii) Performance (cost control and other past accomplishments). The 
Contracting Officer shall evaluate the contractor's past performance in 
areas such as: quality of services or products, meeting performance 
schedules, efficiency in cost control (including need for and 
reasonableness of costs incurred), accuracy and reliability of previous 
cost estimates, degree of cooperation (both business and technical), 
compliance with previous contract requirements, and management of 
subcontract programs. Where a contractor has consistently achieved 
excellent results in these areas in comparison with other contractors in 
similar circumstances, this performance merits a proportionately greater 
opportunity for profit. Conversely, a poor record in this regard 
warrants less profit.
    (iv) Federal socioeconomic programs. This factor, which may apply to 
special circumstances or particular acquisitions, relates to the extent 
of a contractor's successful participation in Government sponsored 
programs involving: Small businesses; HUBZone small businesses; service-
disabled, veteran-owned small businesses; 8(a) small businesses; women-
owned small businesses; small disadvantaged businesses; sheltered 
workshops for the disabled; mentor-prot[eacute]g[eacute]; energy 
conservation, etc. The Contracting Officer shall give positive 
consideration for the contractor's policies and practices that support 
Federal socioeconomic programs and contribute to successful results. 
Conversely, the Contracting Officer shall view failure or unwillingness 
on the part of the contractor to support Federal socioeconomic programs 
as evidence of poor performance for the purpose of establishing a profit 
objective.
    (v) Special situations.
    (A) Inventive and developmental contributions. The Contracting 
Officer shall consider the extent and nature of contractor-initiated and 
contractor-financed independent development in formulating the profit 
objective, provided that the Contracting Officer has made a 
determination that the effort will benefit the contract. Examples of 
profit weighting factors include contribution of the independent 
development to health and human service-related missions; the initiative 
demonstrated by the contractor in pursuing the independent development; 
the extent of the contractor's cost risk; and whether the independent 
development cost was recovered directly or indirectly from Government 
sources.
    (B) Unusual pricing agreements. Occasionally, unusual contract 
pricing arrangements are made with the contractor wherein it agrees to 
cost ceilings (e.g., a ceiling on overhead rates for conditions other 
than those discussed at FAR 42.707). In these circumstances, the 
Contracting Officer shall give the contractor favorable consideration in 
developing a profit objective.
    (C) Negative factors. Special situations need not be limited to 
those which only increase profit levels. A negative consideration may be 
appropriate when the contractor is expected to obtain spin-off-benefits 
as a direct result of the contract (e.g., products or services with 
commercial application).
    (4) Facilities capital cost of money. When facilities capital cost 
of money (cost of capital committed to facilities) is included as an 
item of cost in the contractor's proposal, the Contracting Officer shall 
reduce the profit objective in an amount equal to the amount of 
facilities capital cost of money allowed in accordance with the 
Facilities Capital Cost-of-Money cost principle. If the contractor does 
not propose this cost, the Contracting Officer shall insert a provision 
in the contract that makes facilities capital cost of money an 
unallowable cost.

                   Subpart 315.6_Unsolicited Proposals



Sec. 315.605  Content of unsolicited proposals.

    (d) Certification by offeror. To ensure against contacts between HHS 
personnel and prospective offerors that would exceed the limits of 
advance guidance set forth in FAR 15.604 and potentially result in an 
unfair advantage to an offeror, the Contracting Officer shall: Furnish 
the following certification template to any prospective offeror of an 
unsolicited proposal; and require that the executed certification be

[[Page 69]]

included in any resultant unsolicited proposal:

                          Unsolicited Proposal

                        Certification by Offeror

    This is to certify, to the best of my knowledge and belief, that--
    (a) This proposal has not been prepared under Government 
supervision;
    (b) The methods and approaches stated in the proposal were developed 
by this offeror;
    (c) Any contact with Department of Health and Human Services (HHS) 
personnel has been within the limits of appropriate advance guidance set 
forth in FAR 15.604; and
    (d) No prior commitments were received from HHS personnel regarding 
acceptance of this proposal.

Date:___________________________________________________________________
Organization____________________________________________________________
Name____________________________________________________________________
Title___________________________________________________________________

    (This certification shall be signed by a responsible management 
official of the proposing organization or by a person authorized to 
contractually obligate the organization.)



Sec. 315.606  Agency procedures.

    (a) The HCA is responsible for establishing procedures to comply 
with FAR 15.606(a).
    (b) The HCA or designee shall be the point of contact for 
coordinating the receipt and processing of unsolicited proposals.



Sec. 315.606-1  Receipt and initial review.

    (d) OPDIVs shall not refuse consideration of an unsolicited proposal 
because an organization initially submitted it as a grant application. 
However, OPDIVs shall not award contracts based on unsolicited proposals 
that have been rejected for grant awards due to lack of scientific 
merit.



Sec. 315.609  Limited use of data.

    An offeror shall use the legend, Use and Disclosure of Data, 
prescribed in FAR 15.609(a), to restrict the use of data for evaluation 
purposes only. However, data contained within the unsolicited proposal 
may need to be disclosed as a result of a request submitted pursuant to 
the Freedom of Information Act. Because of this possibility, the 
Contracting Officer shall provide the following notice to all 
prospective offerors of unsolicited proposals:

    ``The Government will attempt to comply with the ``Use and 
Disclosure of Data'' legend. However, the Government may not be able to 
withhold a record (data, document, etc.) or deny access to a record 
requested by an individual (the public) when an obligation is imposed on 
the Government under the Freedom of Information Act, 5 U.S.C. 552, as 
amended. The Government determination to withhold or disclose a record 
will be based upon the particular circumstances surrounding the record 
and on whether the record is exempt from disclosure under the Freedom of 
Information Act. Per FAR 15.609(e), the offeror should identify any 
records that it considers to be trade secrets, commercial or financial 
information, and privileged or confidential information.''

     Subpart 315.70_Acquisition of Electronic Information Technology



Sec. 315.7000  Section 508 accessibility standards.

    EIT products and services, including EIT deliverables such as 
electronic documents and reports, acquired using negotiated procedures 
shall comply with Section 508 of the Rehabilitation Act of 1973, as 
amended. Consistent with paragraph 4.3.1 of the HHS Section 508 policy--
see Section 508 policy on HHS Office on Disability Web site, if products 
and services, including commercially available items, meet some but not 
all of the applicable Section 508 accessibility standards, and no 
commercially available products or services meet all of the applicable 
Section 508 accessibility standards, an OPDIV/STAFFDIV shall acquire the 
products and services that best meet the applicable Section 508 
accessibility standards. Commercial nonavailability exception 
determinations for EIT products and services that do not meet some or 
all of the applicable Section 508 accessibility standards shall be 
processed in accordance with 339.203.

                       PART 316_TYPES OF CONTRACTS

               Subpart 316.3_Cost-reimbursement Contracts

Sec.

Sec. 316.307 Contract clauses.

[[Page 70]]

               Subpart 316.5_Indefinite-Delivery Contracts


Sec. 316.505 Ordering.

   Subpart 316.6_Time-and-Materials, Labor-Hour, and Letter Contracts


Sec. 316.603 Letter contracts.

Sec. 316.603-3 Limitations.

Sec. 316.603-70 Procedure for requesting authority to issue a letter 
          contract.

Sec. 316.603-71 Approval for modifications to letter contracts.

                        Subpart 316.7_Agreements


Sec. 316.770 Unauthorized types of agreements.

Sec. 316.770-2 Memoranda of understanding.

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

    Source: 74 FR 62398, Nov. 27, 2009, unless otherwise noted.

               Subpart 316.3_Cost-reimbursement Contracts



Sec. 316.307  Contract clauses.

    (a) If a contract for R & D is with a hospital (profit or 
nonprofit), the Contracting Officer shall modify the ``Allowable Cost 
and Payment'' clause at FAR 52.216-7 by deleting from paragraph (a) the 
words ``Subpart 31.2 of the Federal Acquisition Regulation (FAR)'' and 
substituting ``45 CFR Part 74 Appendix E.''
    (j) The Contracting Officer shall insert the clause in 352.216-70, 
Additional Cost Principles, in solicitations and contracts when a cost-
reimbursement contract is contemplated.

               Subpart 316.5_Indefinite-Delivery Contracts



Sec. 316.505  Ordering.

    (b)(5) The HHS task-order and delivery-order ombudsman is the 
Director, Strategic Acquisition Service, PSC. The task-order and 
delivery-order ombudsmen for each of the HHS contracting activities are 
as follows:

AHRQ: Director, Office of Performance Accountability, Resources and 
Technology
ASPR/OAMCG: Chief of Acquisition Policy
CDC: Chief Information Officer
CMS: Chief Operating Officer
FDA: Director, Office of Acquisitions and Grants Services
HRSA: Associate Administrator, Office of Operations
IHS: Director, Office of Management Services
NIH: Senior Scientific Advisor for Extramural Research, Office of 
Extramural Research (R & D) and Senior Advisor to the Director (Other 
than R & D)
PSC: Director, Strategic Acquisition Service
SAMHSA: Executive Officer

[74 FR 62398, Nov. 27, 2009, as amended at 75 FR 21511, Apr. 26, 2010]

   Subpart 316.6_Time-and-Materials, Labor-Hour, and Letter Contracts



Sec. 316.603  Letter contracts.



Sec. 316.603-3  Limitations.

    An official one level above the Contracting Officer shall make the 
written determination that no other contract type is suitable.



Sec. 316.603-70  Procedure for requesting authority to issue a letter 
          contract.

    The Contracting Officer shall include the following information in a 
memorandum requesting approval to award a letter contract:
    (a) Name and address of proposed contractor.
    (b) Location where contract is to be performed.
    (c) Contract number, including modification number, if possible.
    (d) Brief description of work and services to be performed.
    (e) Proposed performance or delivery schedule.
    (f) Amount of letter contract.
    (g) Estimated total amount of definitized contract.
    (h) Type of definitive contract to be executed (fixed price, cost-
reimbursement, etc.).
    (i) Statement of the necessity and advantage to the Government of 
the use of the proposed letter contract.
    (j) Statement of percentage of the estimated cost that the 
obligation of funds represents (in rare instances where the obligation 
represents 50 percent or more of the proposed estimated cost of the 
acquisition, the Contracting Officer shall include a justification for 
that obligation (e.g., the contractor requires a large initial outlay of 
funds for major subcontract awards or an extensive purchase of materials 
to meet an urgent delivery requirement)). In

[[Page 71]]

every case, documentation shall demonstrate that the amount to be 
obligated is not in excess of an amount reasonably required to perform 
the work.
    (k) Period of effectiveness of a proposed letter contract. (If more 
than 180 days, the Contracting Officer shall provide a detailed 
justification).
    (l) A statement of any substantive matters that need to be resolved.



Sec. 316.603-71  Approval for modifications to letter contracts.

    An official one level above the Contracting Officer shall approve 
all letter contract modifications. Contracting activities shall process 
requests for authority to issue letter contract modifications in the 
same manner as requests for authority to issue letter contracts. A 
request shall include the following:
    (a) Name and address of the contractor.
    (b) Description of work and services.
    (c) Date original request was approved and name/title of approving 
official.
    (d) Letter contract number and date issued.
    (e) Detailed justification as to why the letter contract cannot 
currently be definitized.
    (f) Detailed justification as to why the level of funding must be 
increased.
    (g) Detailed justification as to why the period of effectiveness 
must be increased beyond 180 days, if applicable.
    (h) If the funding of the letter contract is to be increased to more 
than 50 percent of the estimated cost of the acquisition, the 
Contracting Officer shall include the information required by 316.603-
70(j).

                        Subpart 316.7_Agreements



Sec. 316.770  Unauthorized types of agreements.



Sec. 316.770-2  Memoranda of understanding.

    Use of a ``memorandum of understanding,'' which purports to modify 
mandatory FAR and HHSAR provisions to make them acceptable to a 
prospective contractor, is not authorized because it may address matters 
contrary to the language of the solicitation or prospective contract. A 
memorandum of understanding does not bind the Government under the 
contract. The Contracting Officer shall make a change in a solicitation 
or contract only by amendment or modification, respectively. When a 
change to a prescribed contract clause is considered necessary, the 
Contracting Officer shall request a deviation.

                  PART 317_SPECIAL CONTRACTING METHODS

                  Subpart 317.1_Multi-year Contracting

Sec.

Sec. 317.104 General.

Sec. 317.105 Policy.

Sec. 317.105-1 Uses.

Sec. 317.107 Options.

Sec. 317.108 Congressional notification.

                          Subpart 317.2_Options


Sec. 317.204 Contracts.

Sec. 317.207 Exercise of options.

      Subpart 317.5_Interagency Acquisitions Under the Economy Act


Sec. 317.503 Determination and findings requirements.

         Subpart 317.70_Multi-agency and Intra-agency Contracts


Sec. 317.7000 Scope of subpart.

Sec. 317.7001 Definitions.

Sec. 317.7002 Potential multi-agency and intra-agency sources.

Sec. 317.7003 Documentation for multi-agency contracts.

Sec. 317.7004 Documentation for intra-agency contracts.

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

    Source: 74 FR 62398, Nov. 27, 2009, unless otherwise noted.

                  Subpart 317.1_Multi-year Contracting



Sec. 317.104  General.

    (b) The Senior Procurement Executive is the agency head for the 
purpose of FAR 17.104(b).

[[Page 72]]



Sec. 317.105  Policy.



Sec. 317.105-1  Uses.

    (a) Each HCA determination to use multi-year contracting, as defined 
in FAR 17.103, is limited to individual acquisitions where the full 
estimated cancellation ceiling does not exceed 20 percent of the total 
contract value over the multi-year term or $11.5 million, whichever is 
less. Cancellation ceiling provisions shall conform to the requirements 
of FAR 17.106-1(c). The determination is not delegable and shall address 
the issues in FAR 17.105-1(a) and the following:
    (1) The amount of, and basis for, the estimated cancellation 
ceiling.
    (2) Identification and assignment of a Contracting Officer holding a 
FAC-C Level III certification or, alternatively, one familiar with the 
application of this contracting method.
    (3) Availability of appropriations to fund the obligation of total 
contract costs for the first year of performance plus the estimated 
amount of the full cancellation ceiling.
    (4) Reasonable expectation that, throughout the contemplated 
contract performance period, the OPDIV, through its annual budget 
request, will seek funding for the contract at the level necessary to 
avoid contract cancellation; and
    (5) Program requirements are reasonably stable and the associated 
technical risks are not excessive--i.e., not of the nature or level to 
jeopardize contract completion or result in its cancellation.
    Upon SPE request, the HCA shall provide a copy of each determination 
(other than those specified in 317.105-1(b) below).
    (b)(1) SPE approval is required for any--
    (i) Individual determination to use multi-year contracting with a 
cancellation ceiling in excess of the limits in 317.105-1(a); or
    (ii) Class determination (see FAR Subpart 1.7).
    (2) A determination involving a cancellation ceiling in excess of 
the limits in 317.105-1(a) shall present a compelling justification for 
the estimated cancellation ceiling. When the estimated cancellation 
ceiling exceeds $11.5 million, the determination shall be accompanied by 
a draft congressional notification letter pursuant to FAR 17.108 and 
317.108.
    (c) The funding required for performance of each year of a multi-
year contract under FAR Subpart 17.1 and this subpart must be provided 
in full at the start of that program year.

[74 FR 62398, Nov. 27, 2009, as amended at 75 FR 21511, Apr. 26, 2010]



Sec. 317.107  Options.

    When used as part of a multi-year contract, options shall not be 
used to extend the performance of the original requirement for non-
severable services beyond 5 years. Options may serve as a means to 
acquire related services (severable or non-severable) and, upon being 
exercised, shall be funded from the then-current fiscal year's 
appropriation.

[75 FR 21511, Apr. 26, 2010]



Sec. 317.108  Congressional notification.

    (a) The SPE is the agency head for the purposes of FAR 17.108(a). 
Upon SPE approval of the determination required by 317.105-1(b)(1), the 
SPE will finalize and sign the congressional notification letter and 
provide it to the appropriate House and Senate committees.

                          Subpart 317.2_Options



Sec. 317.204  Contracts.

    (e) The total of the basic and option periods shall not exceed 10 
years in the case of services and the total of the basic and option 
quantities shall not exceed the requirement for 5 years in the case of 
supplies. These limitations do not apply to IT and R & D contracts. 
However, statutes applicable to various classes of contracts may place 
additional restrictions on the length of contracts.



Sec. 317.207  Exercise of options.

    (h) Before exercising an option for a subsequent performance period/
additional quantity under a multiple-year contract/order--see 339.201-
70(c), which involves the acquisition of EIT products and services, 
including EIT

[[Page 73]]

deliverables such as electronic documents and reports, subject to 
Section 508 of the Rehabilitation Act of 1973, as amended, the 
Contracting Officer shall ensure that the contractor has provided to the 
Contracting Officer and Project Officer a properly completed HHS Section 
508 Annual Report--see Section 508 policy on HHS Office on Disability 
Web site. The Contracting Officer shall request that the contractor 
provide the report in sufficient time for its review and approval by the 
Contracting Officer, Project Officer, and the Section 508 Official or 
designee, prior to exercise of an option. The Contracting Officer shall 
ensure that the report and all related approvals are made a part of the 
official contract/order file.

      Subpart 317.5_Interagency Acquisitions Under the Economy Act



Sec. 317.503  Determination and findings requirements.

    (a) In addition to the D & F contents specified in FAR 17.503(a)(1) 
and (2), each Assisted Contracting D & F shall address--
    (3) The servicing organization(s) contemplated (the assigned HHS 
contracting office shall be one of the servicing organizations 
contemplated);
    (4) For each organization and alternative approach contemplated, the 
anticipated benefits to the OPDIV; the anticipated costs, including 
associated fees or other compensation; and the contract/order placement 
timeframe;
    (5) The tradeoffs (cost, schedule, performance) among the approaches 
considered;
    (6) The recommended multi-agency or intra-agency contracting 
approach;
    (7) The conclusion that the contract to be awarded by the selected 
servicing organization is the most advantageous alternative to the 
Government, notwithstanding fees and the increased risk associated with 
assisted contracting; and
    (8) The steps that will be taken to ensure that contract funding 
will comply with the bona fide needs rule and the Anti-Deficiency Act.

[74 FR 62398, Nov. 27, 2009, as amended at 75 FR 21511, Apr. 26, 2010]

         Subpart 317.70_Multi-agency and Intra-agency Contracts



Sec. 317.7000  Scope of subpart.

    (a) This subpart prescribes policies for HHS' use of multi-agency 
and intra-agency contracting under all authorities. It does not apply 
when HHS transfers funds to another agency under an interagency 
agreement whose primary purpose is other than contracting on HHS' 
behalf.
    (b) For multi-agency contracts under the authority of the Economy 
Act, see FAR Subpart 17.5 and 317.503.
    (c) Multi-agency contracting authorities other than the Economy Act 
include but are not limited to the Clinger-Cohen Act [40 U.S.C. 
11302(e)]; the Government Management Reform Act (Pub. L. 103-356); Title 
III of the Federal Property and Administrative Services Act of 1949 (41 
U.S.C. 251, et seq.); and 40 U.S.C. 501, Services for Executive 
Agencies.



Sec. 317.7001  Definitions.

    As used in this subpart:
    Multi-agency contracting describes a procedure in which a Federal 
agency needing supplies or services obtains them using another Federal 
agency's contract (direct ordering), the contracting assistance of 
another Federal agency (assisted contracting), or both. In some cases, 
more than one servicing organization may be involved in assisted 
contracting.
    Intra-agency contracting describes a procedure in which an HHS 
OPDIV/STAFFDIV needing supplies or services obtains them by issuing an 
order under another HHS OPDIV/STAFFDIV's contract or agreement (e.g., a 
BPA--direct ordering); or using the contracting assistance of another 
OPDIV/STAFFDIV (assisted contracting); or both.
    Assisted contracting is a subset of multi-agency/intra-agency 
contracting in which a servicing contracting office

[[Page 74]]

other than the requesting organization's assigned contracting office 
contracts on behalf of the requesting organization.
    Direct ordering is a subset of multi-/intra-agency contracting in 
which a contracting or ordering officer issues an order under another 
OPDIV's or Federal agency's indefinite delivery vehicle (e.g., a GSA FSS 
schedule or a GWAC).
    Requesting organization refers to the organization with the 
requirement for a multi- or intra-agency contract.
    Servicing organization refers to an organization that assists a 
requesting organization by awarding a contract or order on its behalf. 
In the context of multi-agency contracting, the servicing organization 
and requesting organization must be in different Federal agencies. For 
intra-agency contracting, the servicing and requesting organizations 
must both be HHS organizations.



Sec. 317.7002  Potential multi-agency and intra-agency sources.

    (a) Prior to deciding to use multi-agency or intra-agency 
contracting, the requesting organization must perform sufficient market 
research to consider the relative merits and costs of available 
contracts and contracting offices for meeting the requesting 
organization's need.
    (b) Direct ordering conducted by HHS contracting officers using GSA 
vehicles, GWACs, and vehicles established under the Federal Strategic 
Sourcing Initiative does not require justification. HHS contracting 
officers should be cautious about using unfamiliar contract vehicles. 
When using vehicles other than those listed above, the Contracting 
Officer shall include in the contract file a D & F, which is prepared in 
consultation with the SBS, and which concludes that the chosen vehicle 
is the best way to obtain the required product or service.
    (c) With the exception of assisted contracts and direct order 
acquisitions to be placed pursuant to the authority of the Economy Act, 
which always require preparation of a supporting D & F--see FAR 17.503, 
proposed assisted contracts approved as part of an annual or updated 
acquisition plan require no additional documentation or approvals.
    (d) For proposed assisted contracts not approved as part of an 
annual or update acquisition plan, the requiring organization shall 
identify the potential servicing organization(s); summarize the services 
each source provides; and describe the compensation arrangement(s). The 
assigned contracting office shall be one of the alternatives considered. 
For multi-agency contract actions, this information shall be included in 
the Assisted Contracting D & F required in 317.7003(b).



Sec. 317.7003  Documentation for multi-agency contracts.

    (a) In the case of proposed direct ordering using vehicles other 
than those listed in 317.7002(b), the HHS contracting officer shall 
comply with the D & F requirement in 317.7003(b).
    (b) If a proposed assisted contract, using a servicing organization 
outside HHS, was not approved during preparation and review of the 
annual acquisition plan, including updates, then the program/project 
office or other requiring activity shall prepare an Assisted Contracting 
D & F, similar to the D & F specified in FAR 17.503, but augmented with 
the information specified in 317.503. The Project Officer or other 
requiring official shall be responsible for preparing and staffing this 
Assisted Contracting D & F.
    (1) For assisted contracts greater than or equal to $500,000 
(including the value of the base contract and all options and, for 
indefinite delivery vehicles, the value of the vehicle and all potential 
orders), the assigned HHS Contracting Officer shall review and approve 
or reject the Assisted Contracting D & F, annotated with the SBS' 
recommendation. The Contracting Officer's signature on the Assisted 
Contracting D&F signifies his/her concurrence that assisted contracting 
through the proposed servicing contracting office is in the best 
interest of the government. The Project Officer must retain a copy of 
the approved Assisted Contracting D & F.

[[Page 75]]

    (2) For assisted contracts less than $500,000, the HCA may delegate 
authority to the Project Officer or other requiring official to approve 
the required Assisted Contracting D & F. The $500,000 threshold includes 
the value of the base contract and all options and, for indefinite 
delivery vehicles, the value of the vehicle and all potential orders.
    (3) During a declared (Presidential or HHS Secretarial) emergency, 
funding and requirements documentation may be transferred to a servicing 
organization without an Assisted Contracting D & F. The Project Officer 
shall document his/her file, explaining the exigent circumstances.
    (c) Assisted contracts require supporting interagency agreements, as 
described in OFPP's memorandum, ``Interagency Acquisitions,'' dated June 
2008. Note that Part A of an interagency agreement can support multiple 
assisted contracts. Each interagency agreement shall address all the 
elements identified in OFPP's model interagency agreement (Appendix 2 of 
OFPP's ``Interagency Acquisitions''). The level of detail in HHS 
interagency agreements should be commensurate with the dollar value and 
complexity of the assisted contract. HHS requesting organizations shall 
not forward funding or requirements documentation outside HHS without a 
properly executed interagency agreement; and servicing activities within 
HHS (e.g., PSC and the NIH Information Technology Acquisition and 
Assessment Center), shall not contract on behalf of non-HHS requesting 
organizations without properly executed interagency agreements.



Sec. 317.7004  Documentation for intra-agency contracts.

    (a) In the case of proposed direct ordering, using vehicles other 
than those listed in 317.7002(b), the HHS contracting officer shall 
comply with the D & F requirement in 317.7003(b).
    (b) With the exception of assisted contracts and direct order 
acquisitions to be placed pursuant to the authority of the Economy Act, 
which always require preparation of a supporting D & F--see FAR 17.503, 
proposed assisted contracts approved as part of an annual or updated 
acquisition plan require no additional documentation or approvals.
    (c) For proposed assisted contracts not approved as part of an 
annual or updated acquisition plan, the requiring organization shall 
identify the potential servicing organization(s); summarize the services 
the source(s) provide(s); and describe the compensation arrangement(s). 
The assigned contracting office shall be one of the alternatives 
considered.
    (d) Assisted intra-agency contracts may require supporting intra-
agency agreements or other documentation as prescribed by OPDIV 
procedures.

[[Page 76]]

                   SUBCHAPTER D_SOCIOECONOMIC PROGRAMS

                    PART 319_SMALL BUSINESS PROGRAMS

                         Subpart 319.2_Policies

Sec.

Sec. 319.201 General policy.

Sec. 319.202-2 Locating small business sources.

Sec. 319.270-1 Solicitation provision and contract clause.

               Subpart 319.5_Set-Asides for Small Business


Sec. 319.501 General.

Sec. 319.506 Withdrawing or modifying set-asides.

 Subpart 319.7_Subcontracting With Small Business, Small Disadvantaged 
            Business, and Women-Owned Small Business Concerns


Sec. 319.705 Responsibilities of the Contracting Officer under the 
          subcontracting assistance program.

Sec. 319.705-5 Awards involving subcontracting plans.

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

    Source: 74 FR 62398, Nov. 27, 2009, unless otherwise noted.

                         Subpart 319.2_Policies



Sec. 319.201  General policy.

    (d) The functional management responsibilities for HHS' small 
business program (i.e., small businesses; veteran-owned small 
businesses; service-disabled, veteran-owned small businesses; HUBZone 
small businesses; small disadvantaged businesses; and women-owned small 
businesses) are delegated to the OSDBU Director. See the HHS Small 
Business Program manual for information on the HHS small business 
program, including SBS and Small Business Administration (SBA) 
Procurement Center Representative (PCR) acquisition review timeframes.
    (e)(1) One or more qualified SBSs will implement the HHS small 
business program and shall be co-located within the following OPDIVs: 
AHRQ; ASPR/OAMCG; CDC; CMS; FDA; HRSA; IHS; NIH; PSC; and SAMHSA. The 
OSDBU Director shall exercise full management authority over SBSs.
    (2) Within IHS, the primary SBS will be responsible for IHS' overall 
implementation of the HHS small business program; however, each IHS 
contracting office will have a small business technical advisor (SBTA) 
to carry out those functions and responsibilities to implement the small 
business program. The primary IHS SBS shall assist and provide guidance 
to respective SBTAs.

[74 FR 62398, Nov. 27, 2009, as amended at 75 FR 21511, Apr. 26, 2010]



Sec. 319.202-2  Locating small business sources.

    (a) OPDIVs shall foster, to the extent practicable, maximum 
participation by small businesses in HHS acquisitions. Prior to issuing 
a solicitation, the Contracting Officer shall make every reasonable 
effort to find small business concerns that can compete for the proposed 
requirement--see FAR 19.202, 10.001(2)(v), and 10.002(b)(1)(vii).
    (1) If it cannot be determined in advance (through market research 
under FAR Part 10, discussions between the Contracting Officer and the 
SBS, or other means--see FAR 15.201, whether a solicitation in excess of 
the simplified acquisition threshold can be set aside exclusively for 
small business participation [whether for small businesses; HUBZone 
small businesses; service-disabled, veteran-owned small businesses; or 
8(a) small business(es)], the Contracting Officer may publish a notice 
entitled ``Small Business Sources Sought'' in FedBizOpps. The purpose of 
a Small Business Sources Sought notice is to identify the availability 
and capability of qualified small business sources; and their size 
classification relative to the appropriate North American Industry 
Classification System (NAICs) code. This will assist the Government in 
determining the appropriate acquisition method, including whether a set-
aside is possible. However, to solicit technical, scientific, or 
business information for project planning purposes, an RFI may be used--
see 315.201(e).

[[Page 77]]

    (2) When using a Small Business Sought notice, an OPDIV shall not 
request that potential sources provide more than the minimum information 
necessary--see FAR 10.001(b), to determine whether they have the 
apparent capability to perform a requirement and, therefore, whether 
they should be included in any future competition. The notice and the 
information received shall not be used to determine how well respondents 
can perform a requirement, which can only be evaluated in response to a 
solicitation. Accordingly, the notice shall not be used to--
    (i) Obtain capability statements that are evaluated and determined 
acceptable or unacceptable;
    (ii) Require cost/price proposals or detailed technical solutions;
    (iii) Identify a prospective sole source; or
    (iv) Exclude small business concerns.
    (3) OPDIVs shall follow the standard HHS instructions for completing 
a ``Small Business Sources Sought'' notice.'' The template for the 
notice is available on the ASFR/OGAPA/DA Internet Web site. The 
Contracting Officer shall post the notice in FedBizOpps by selecting and 
completing a Sources Sought notice, accessible on the FedBizOpps 
``Notices'' page at: http://www.fedbizopps.gov. Additional information 
may be included in the notice in accordance with OPDIV procedures. The 
Contracting Officer shall document, in the form of a memorandum to the 
file, the results of the review by technical personnel of information 
submitted in response to the notice, including whether each respondent 
appears to be capable of performing the requirement. The Contracting 
Officer shall attach a copy of the analysis provided by the technical 
personnel to the memorandum.



Sec. 319.270-1  Solicitation provision and contract clause.

    (a) The Contacting Officer shall insert the provision in 352.219-70, 
Mentor-Prot[eacute]g[eacute] Program, in solicitations that include the 
clause in FAR 52.219-9, Small Business Subcontracting Plan. The 
provision requires that offerors provide the Contracting Officer a copy 
of their HHS Office of Small and Disadvantaged Business Utilization 
(OSDBU)-approved mentor-prot[eacute]g[eacute] agreement in response to a 
solicitation. (b) The Contacting Officer shall insert the clause in 
352.219-71, Mentor-Prot[eacute]g[eacute] Program Reporting Requirements, 
in contracts that include the clause in FAR 52.219-9, Small Business 
Subcontracting Plan, and which are awarded to a contractor with an HHS 
OSDBU-approved mentor-prot[eacute]g[eacute] agreement.

               Subpart 319.5_Set-Asides for Small Business



Sec. 319.501  General.

    (e) Subsequent to the Contracting Officer's recommendation on Form 
HHS 653, HHS Small Business Review Form, the SBS shall review each 
proposed acquisition strategy and either concur or not concur with the 
Contracting Officer's recommendation. The PCR shall also review the 
acquisition strategy and either concur or not concur with the 
Contracting Officer's recommendation. If the Contracting Officer 
disapproves the SBS's or the PCR's set-aside recommendation, the 
Contracting Officer shall document the reasons on Form HHS 653 and place 
the form in the contract file. The Contracting Officer shall make the 
final determination as to whether the proposed acquisition will be set-
aside or not.



Sec. 319.506  Withdrawing or modifying set-asides.

    (d) Immediately upon notice from the Contracting Officer, the SBS 
shall provide notification of all set-aside withdrawals to the OSDBU 
Director by both telephone and e-mail.

[[Page 78]]

 Subpart 319.7_Subcontracting With Small Business, Small Disadvantaged 
            Business, and Women-Owned Small Business Concerns



Sec. 319.705  Responsibilities of the Contracting Officer under the 
          subcontracting assistance program.



Sec. 319.705-5  Awards involving subcontracting plans.

    (a)(3) The Contracting Officer shall provide the PCR a period of 1 
to 5 working days to review the contract award package, depending upon 
the circumstances and complexity of the individual acquisition.

      PART 322_APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS

               Subpart 322.8_Equal Employment Opportunity

Sec.

Sec. 322.810 Solicitation provisions and contract clauses.

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

    Source: 74 FR 62398, Nov. 27, 2009, unless otherwise noted.

               Subpart 322.8_Equal Employment Opportunity



Sec. 322.810  Solicitation provisions and contract clauses.

    (h) The Contracting Officer shall insert the clause in 352.222-70, 
Contractor Cooperation in Equal Employment Opportunity Investigations, 
in solicitations, contracts, and orders that include the clause in FAR 
52.222-26, Equal Opportunity.

  PART 323_ENVIRONMENT, ENERGY AND WATER EFFICIENCY, RENEWABLE ENERGY 
       TECHNOLOGIES, OCCUPATIONAL SAFETY, AND DRUG-FREE WORKPLACE

                    Subpart 323.70_Safety and Health

Sec.

Sec. 323.7000 Scope of subpart.

Sec. 323.7001 Policy.

Sec. 323.7002 Actions required.

              Subpart 323.71_Green Purchasing Requirements


Sec. 323.7100 Policy.

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

    Source: 74 FR 62398, Nov. 27, 2009, unless otherwise noted.

                    Subpart 323.70_Safety and Health



Sec. 323.7000  Scope of subpart.

    This subpart prescribes the use of a safety and health clause in 
contracts involving hazardous materials or operations, and provides 
procedures for administering safety and health provisions.



Sec. 323.7001  Policy.

    Various statutes and regulations (e.g., the Walsh-Healy Act and 
Service Contract Act), require adherence to minimum safety and health 
standards by contractors engaged in potentially hazardous work. FAR 
subpart 23.3 serves as the primary reference regarding hazardous 
materials. The Contracting Officer shall follow the guidance in this 
subpart when the guidance in the FAR is not sufficient or does not meet 
the safety and health situation for an acquisition.



Sec. 323.7002  Actions required.

    (a) Contracting activities. The Contracting Officer shall insert the 
clause in 352.223-70, Safety and Health, or a clause substantially the 
same, in solicitations and contracts that involve hazardous materials or 
operations for the following types of requirements:
    (1) Services or products.
    (2) Research, development, or test projects.
    (3) Transportation of hazardous materials.
    (4) Construction, including construction of facilities on the 
contractor's premises.
    (b) Safety officers. OPDIV safety officers shall advise and assist 
initiators of acquisition requests and Contracting Officers in--
    (1) Determining whether safety and health provisions shall be part 
of a prospective contract;

[[Page 79]]

    (2) Evaluating a prospective contractor's safety and health 
programs; and
    (3) Conducting post-award reviews and surveillance to the extent 
deemed necessary.
    (c) Initiators. Initiators of acquisition requests for items 
described in paragraph (a) of this section shall--
    (1) During the preparation of an acquisition plan or other 
acquisition request documentation, and in the solicitation, ensure that 
hazardous materials and operations to be used in the performance of the 
contract are clearly identified; and
    (2) During the period of performance--
    (i) Apprise the Contracting Officer of any noncompliance with safety 
and health provisions identified in the contract; and
    (ii) Cooperate with the safety officer in conducting review and 
surveillance activities.

              Subpart 323.71_Green Purchasing Requirements



Sec. 323.7100  Policy.

    (a) The HHS guidelines and procedures for ``green purchasing'' may 
be found in the HHS Affirmative Procurement Plan (APP), ``Purchasing 
Environmentally Preferable Products and Services at the U.S. Department 
of Health and Human Services.'' The APP encompasses the acquisition and 
use of designated recycled content, and Energy Star[reg], 
Electronic Product Environmental Assessment Tool (EPEAT)-registered, 
energy-efficient, bio-based, and environmentally preferable products.
    (1) ASFR/OGAPA/DA has overall responsibility for monitoring the 
OPDIVs' implementation of HHS' APP to ensure compliance with Executive 
Order 13423, ``Strengthening Federal Environmental, Energy, and 
Transportation Management;'' the White House Council on Environmental 
Quality's Implementing Instructions for Executive Order 13423; Section 
6002 of the Resource Conservation and Recovery Act of 1976; Section 104 
of the Energy Policy Act of 2005; Section 9002 of the Farm Security and 
Rural Investment Act of 2002; Section 612 of the Clean Air Act of 1990; 
and FAR Part 23.
    (2) The OPDIVs, through their designated APP Program Managers, are 
responsible for establishing the necessary local procedures and 
appropriate training requirements to ensure effective implementation of 
the HHS APP.

        PART 324_PROTECTION OF PRIVACY AND FREEDOM OF INFORMATION

             Subpart 324.1_Protection of Individual Privacy

Sec.

Sec. 324.000 Scope of subpart.

Sec. 324.102 General.

Sec. 324.103 Procedures.

                Subpart 324.2_Freedom of Information Act


Sec. 324.203 Policy.

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

    Source: 74 FR 62398, Nov. 27, 2009, unless otherwise noted.

             Subpart 324.1_Protection of Individual Privacy



Sec. 324.000  Scope of subpart.

    This part prescribes policies and procedures that apply requirements 
of the Privacy Act of 1974 (5 U.S.C. 552a) and OMB Circular A-130, 
Revised, November 30, 2000, to HHS contracts and cites the Freedom of 
Information Act (5 U.S.C. 552, as amended).



Sec. 324.102  General.

    (a) It is HHS policy to protect the privacy of individuals to the 
maximum possible extent, while permitting the exchange of records 
required to fulfill HHS administrative and program responsibilities and 
its responsibilities for disclosing records to which the general public 
is entitled under the Freedom of Information Act (5 U.S.C. 552). The 
Privacy Act of 1974 and the HHS implementation under 45 CFR Part 5b 
apply ``when an agency provides by a contract for the operation by or on 
behalf of the agency of a system of records to accomplish any agency 
function * * *.'' The key factor is whether an HHS function is involved. 
Therefore, the Privacy Act requirements apply to an HHS contract when, 
under the contract, the contractor must maintain or

[[Page 80]]

operate a system of records to accomplish an HHS function.
    (e) The Project Officer, and, as necessary, the official designated 
as the OPDIV's Privacy Act Coordinator and OGC-GLD, shall determine the 
applicability of the Privacy Act to each proposed acquisition. The 
Project Officer is required to include a statement in the AP or other 
acquisition request document indicating whether the Privacy Act is or is 
not applicable to a proposed acquisition.
    (f) Whenever a Contracting Officer is informed that the Privacy Act 
is not applicable, but the resultant contract will involve the 
collection of individually identifiable personal data by the contractor, 
the Contracting Officer shall include provisions to protect the 
confidentiality of the records and the privacy of individuals identified 
in the records.

[74 FR 62398, Nov. 27, 2009, as amended at 75 FR 21511, Apr. 26, 2010]



Sec. 324.103  Procedures.

    (a) The Contracting Officer shall review all acquisition request 
documentation to determine whether the Privacy Act requirements are 
applicable. The Privacy Act requirements apply when a contract or order 
will require the contractor to design, develop, or operate any Privacy 
Act system of records on individuals to accomplish an agency function. 
When applicable, the Contracting Officer shall include the two Privacy 
Act clauses required by FAR 24.104 in the solicitation and contract or 
order. In addition, the Contracting Officer shall include the two FAR 
Privacy Act clauses, and other pertinent information specified in this 
subpart, in any modification which results in the Privacy Act 
requirements becoming applicable to a contract or order.
    (b)(1) The Contracting Officer shall identify in the SOW/PWS the 
system(s) of records to which the Privacy Act and the implementing 
regulations are applicable.
    (2) The Contracting Officer shall include the clause specified in 
352.224-70, Privacy Act, in solicitations, contracts, and orders that 
involve Privacy Act requirements to notify the contractor that it and 
its employees are subject to criminal penalties for violations of the 
Privacy Act (5 U.S.C. 552a(i)) to the same extent as HHS employees. The 
clause also requires the contractor to ensure that each of its employees 
knows the prescribed rules of conduct and each contractor employee is 
aware that he/she is subject to criminal penalties for violations of the 
Privacy Act. These requirements also apply to all subcontracts awarded 
under the contract or order that require the design, development, or 
operation of a system of records. The Contracting Officer shall send the 
contractor a copy of 45 CFR Part 5b, which includes the rules of conduct 
and other Privacy Act requirements.
    (c) The Contracting Officer shall specify in the contract SOW/PWS 
the disposition to be made of the system(s) of records upon completion 
of contract performance. The contract SOW/PWS may require the contractor 
to destroy the records, remove personal identifiers, or turn the records 
over to the Contracting Officer. If there is a legitimate need for a 
contractor to keep copies of the records after completion of a contract, 
the contractor must take measures, as approved by the Contracting 
Officer, to keep the records confidential and protect the individuals' 
privacy.
    (d) For any acquisition subject to Privacy Act requirements, the 
Project Officer, prior to award, or the COTR, after award, shall prepare 
and have published in the Federal Register a ``system notice,'' 
describing HHS' intent to establish a new system of records on 
individuals, to make modifications to an existing system, or to disclose 
information in regard to an existing system. The Project Officer shall 
attach a copy of the system notice to the acquisition plan or other 
acquisition request documentation. If a system notice is not attached, 
the Contracting Officer shall inquire about its status and shall obtain 
a copy from the Project Officer for inclusion in the contract file. If a 
system notice has not been published in the Federal Register, the 
Contracting Officer may proceed with the acquisition but shall not award 
the contract until the system notice is published and the Contracting 
Officer verifies its publication.

[[Page 81]]

                Subpart 324.2_Freedom of Information Act



Sec. 324.203  Policy.

    (a) The HHS regulation implementing the Freedom of Information Act 
(FOIA), 5 U.S.C. 552, as amended, is set forth in 45 CFR Part 5.
    (b) The Contracting Officer, upon receiving a FOIA request, shall 
follow HHS and OPDIV procedures. As necessary, the Contracting Officer 
shall coordinate all actions with the cognizant Freedom of Information 
(FOI) Officer and the OGC-GLD. Only the FOI Officer is authorized to 
release or deny release of records. The Contracting Officer shall be 
familiar with the entire FOIA regulation in 45 CFR Part 5.

[[Page 82]]

              SUBCHAPTER E_GENERAL CONTRACTING REQUIREMENTS

                 PART 327_PATENTS, DATA, AND COPYRIGHTS

               Subpart 327.4_Rights in Data and Copyrights

Sec.

Sec. 327.404-70 Solicitation provision and contract clause.

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

    Source: 74 FR 62398, Nov. 27, 2009, unless otherwise noted.

               Subpart 327.4_Rights in Data and Copyrights



Sec. 327.404-70  Solicitation provision and contract clause.

    The Contracting Officer shall insert the clause in 352.227-70, 
Publications and Publicity, in solicitations, contracts, and orders that 
involve requirements which could lead to the contractor's publishing the 
results of the award.

                      PART 328_BONDS AND INSURANCE

                         Subpart 328.3_Insurance

Sec.

Sec. 328.301 Policy.

Sec. 328.311 Solicitation provision and contract clause on liability 
          insurance under cost-reimbursement contracts.

Sec. 328.311-2 Agency solicitation provisions and contract clauses.

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

    Source: 74 FR 62398, Nov. 27, 2009, unless otherwise noted.

                         Subpart 328.3_Insurance



Sec. 328.301  Policy.

    It is HHS policy to limit the Government's reimbursement, of its 
contractors' liability to third persons for claims not covered by 
insurance in cost-reimbursement contracts, to the Limitation of Funds or 
Limitation of Cost clause of the contract. In addition, the amount of 
the Government's reimbursement cannot exceed the final judgments or 
settlements approved in writing by the Government.



Sec. 328.311  Solicitation provision and contract clause on liability 
          insurance under cost-reimbursement contracts.



Sec. 328.311-2  Agency solicitation provisions and contract clauses.

    The Contracting Officer shall insert the clause in 352.228-7, 
Insurance--Liability to Third Persons, in lieu of the clause in FAR 
52.228-7, Insurance--Liability to Third Persons, in solicitations and 
contracts when a cost-reimbursement contract is contemplated. The 
Contracting Officer shall insert Alternate I or II based on the 
conditions specified therein. This is an authorized FAR deviation.

                   PART 330_COST ACCOUNTING STANDARDS

                 Subpart 330.2_CAS Program Requirements

Sec.

Sec. 330.201 Contract requirements.

Sec. 330.201-5 Waiver.

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

    Source: 74 FR 62398, Nov. 27, 2009, unless otherwise noted.

                 Subpart 330.2_CAS Program Requirements



Sec. 330.201  Contract requirements.



Sec. 330.201-5  Waiver.

    (a) OPDIVs shall forward waiver requests through appropriate 
acquisition channels, including the HCA, to the Associate DAS for 
Acquisition (non-delegable) for review. Associate DAS for Acquisition 
shall exercise the waiver authority under FAR 30.201-5(a)(2).

            PART 331_CONTRACT COST PRINCIPLES AND PROCEDURES

                       Subpart 331.1_Applicability

Sec.

Sec. 331.101-70 Salary rate limitation.

Sec. 331.102-70 Pricing of adjustments.


[[Page 83]]


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

    Source: 74 FR 62398, Nov. 27, 2009, unless otherwise noted.

                       Subpart 331.1_Applicability



Sec. 331.101-70  Salary rate limitation.

    (a) Beginning in fiscal year 1990, Congress has stipulated in HHS 
appropriations acts and continuing resolutions that, under applicable 
NIH, SAMHSA, and AHRQ contracts, appropriated funds cannot be used to 
pay the direct salary of an individual at a rate in excess of the 
Federal Executive Schedule Level I.
    (b) The Contracting Officer shall insert the clause in 352.231-70, 
Salary Rate Limitation, in NIH, SAMHSA, and AHRQ solicitations and 
contracts that exceed the simplified acquisition threshold when a cost-
reimbursement, fixed-price level-of-effort, time-and-materials, or 
labor-hour contract is contemplated, including modifications of 
contracts of those types for projects that support extramural program 
activities. For purposes of this clause, for NIH: Projects that support 
extramural program activities are basic and applied research projects; 
and for SAMHSA and AHRQ: Projects that support extramural program 
activities are mission-related projects, exclusive of contracts for 
general support services.



Sec. 331.102-70  Pricing of adjustments.

    The Contracting Officer shall insert the clause in 352.231-71, 
Pricing of Adjustments, in solicitations and contracts when a fixed-
price contract is contemplated.

                       PART 332_CONTRACT FINANCING

         Subpart 332.4_Advance Payments for Non-Commercial Items

Sec.

Sec. 332.402 General.

Sec. 332.403 Applicability.

Sec. 332.407 Interest.

Sec. 332.409 Contracting Officer action.

Sec. 332.409-1 Recommendation for approval.

              Subpart 332.5_Progress Payments Based on Cost


Sec. 332.501 General.

Sec. 332.501-2 Unusual progress payments.

                     Subpart 332.7_Contract Funding


Sec. 332.703-70 Funding contracts during a continuing resolution.

Sec. 332.704 Limitation of cost or funds.

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

    Source: 74 FR 62398, Nov. 27, 2009, unless otherwise noted.

         Subpart 332.4_Advance Payments for Non-Commercial Items



Sec. 332.402  General.

    (e) The HCA (non-delegable) shall determine whether an advance 
payment is in the public interest in accordance with FAR 
32.402(c)(1)(iii)(A).



Sec. 332.403  Applicability.

    All R&D contracts with educational institutions located in the 
United States shall provide for financing by use of advance payments, in 
reasonable amounts, unless otherwise prohibited by law.



Sec. 332.407  Interest.

    (d) The HCA (non-delegable) shall make the determinations in FAR 
32.407(d). The HCA may also approve interest-free advance payments for 
educational institutions and other nonprofit organizations, whether 
public or private, performing work under nonprofit contracts (without 
fee) involving health services, educational programs, or social service 
programs, such as the following:
    (1) Community health representative services for an Indian Tribe.
    (2) Narcotic addict rehabilitative services.
    (3) Comprehensive health care services for Model Neighborhood 
programs.
    (4) Planning and development of health maintenance organizations.
    (5) Dissemination of information derived from educational research.
    (6) Surveys or demonstrations in the field of education.
    (7) Producing or distributing educational media for disabled persons 
including captioned films for the hearing impaired.
    (8) Operation of language or area centers.
    (9) Biomedical research and support services.

[[Page 84]]

    (10) Research surveys or demonstrations involving the training and 
placement of health personnel and health professionals, and 
dissemination of related information.
    (11) Surveys or demonstrations in the field of social service.



Sec. 332.409  Contracting Officer action.



Sec. 332.409-1  Recommendation for approval.

    The Contracting Officer shall transmit the information in FAR 
32.409-1 (or FAR 32.409-2) to the HCA by memorandum.

              Subpart 332.5_Progress Payments Based on Cost



Sec. 332.501  General.



Sec. 332.501-2  Unusual progress payments.

    (a)(3) The HCA (non-delegable) shall approve an unusual progress 
payment.

                     Subpart 332.7_Contract Funding



Sec. 332.703-70  Funding contracts during a continuing resolution.

    (a) Continuing resolutions. A continuing resolution (CR) is a 
legislative measure enacted to keep existing Federal programs 
functioning, generally at minimal levels, after the expiration of prior 
fiscal year budget authority and until passage of regular appropriation 
acts by Congress.
    (b) Operating guidance. Because the terms of CRs may vary, for each 
CR, specific operating guidance will be issued by the Office of the 
Assistant Secretary for Financial Resources (ASFR). This guidance will--
    (1) Establish the availability of funds for existing and new 
projects or activities (consistent with the language of the CR);
    (2) Identify any specific limits or constraints imposed; and
    (3) Establish the authorized level and timing of obligations 
permitted.
    (c) Contracting activities, in concert with program, budget and 
finance personnel, must carefully assess contract funding decisions to--
    (1) Ensure compliance with HHS guidance regarding the specific terms 
of a CR;
    (2) Maintain essential operations and activities; and
    (3) Guard against violations of the Anti-Deficiency Act--see FAR 
32.702.

[74 FR 62398, Nov. 27, 2009, as amended at 75 FR 21511, Apr. 26, 2010]



Sec. 332.704  Limitation of cost or funds.

    See subpart 342.71, ``Administrative Actions for Cost Overruns,'' 
for procedures for handling anticipated cost overruns.

                PART 333_PROTESTS, DISPUTES, AND APPEALS

                         Subpart 333.1_Protests

Sec.

Sec. 333.102 General.

Sec. 333.103 Protests to the agency.

Sec. 333.104 Protests to GAO.

                   Subpart 333.2_Disputes and Appeals


Sec. 333.203 Applicability.

Sec. 333.209 Suspected fraudulent claims.

Sec. 333.211 Contracting Officer's decision.

Sec. 333.212 Contracting Officer's duties upon appeal.

Sec. 333.212-70 Formats.

Sec. 333.213 Obligation to continue performance.

Sec. 333.215-70 Contract clauses.

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

    Source: 74 FR 62398, Nov. 27, 2009, unless otherwise noted.

                         Subpart 333.1_Protests



Sec. 333.102  General.

    (g)(1) The OGC-GLD serves as the liaison for protests lodged with 
the Government Accountability Office (GAO); is designated as the office 
responsible for all protests within HHS; and serves as the notification 
point with GAO for all protests.
    (2) Each contracting activity shall designate a protest control 
officer to serve as an advisor to the Contracting Officer and to monitor 
protests from the time of initial notification until the protest has 
been resolved. Contracting activities shall forward a copy of each 
appointment and termination of appointment of protest control officers 
through appropriate acquisition channels, including the HCA, to ASFR/
OGAPA/DA and the Deputy Associate General Counsel, OGC-GLD.

[[Page 85]]



Sec. 333.103  Protests to the agency.

    (f)(1) The Contracting Officer is authorized to make the 
determination, using the criteria in FAR 33.104(b), to award a contract 
notwithstanding the protest after obtaining the concurrence of the 
contracting activity's protest control officer and the OGC-GLD. If a 
protest has been lodged with the Secretary, is addressed to the 
Secretary, or requests referral to the Secretary, the Contracting 
Officer shall also obtain approval from Associate DAS for Acquisition 
and OGC-GLD before making the award.
    (2) The Contracting Officer shall require written confirmation of 
any oral protest. To be considered timely, the protester must file a 
written confirmation in accordance with the applicable provisions in FAR 
33.102(d)(2) and (e). In the following cases, the Contracting Officer 
shall forward written protests received before award through appropriate 
acquisition channels, including the HCA, to OGC-GLD for processing:
    (i) The protester requests referral to the Secretary of HHS.
    (ii) The protest is known to have been lodged with GAO or the 
Secretary or is addressed to either.
    (iii) The Contracting Officer entertains some doubt as to the proper 
action regarding the protest or believes it to be in the best interest 
of the Government that the Secretary or GAO consider the protest. 
Otherwise, the Contracting Officer may answer protests addressed to the 
Contracting Officer with the concurrence of the contracting activity's 
protest control officer and OGC-GLD.
    The Contracting Officer shall submit files concerning these protests 
in duplicate, or as otherwise specified by OGC-GLD, within 5 calendar 
days after protest receipt; mark the files ``IMMEDIATE ACTION--PROTEST 
BEFORE AWARD;'' and include any documents relevant to issues raised in 
the protest.
    (3) The Contracting Officer shall treat protests received after 
award as indicated in FAR 33.103(f)(3).



Sec. 333.104  Protests to GAO.

    (a) General procedures.
    (3)(ii) OGC-GLD shall process protests filed with GAO, whether pre- 
or post- award. The Contracting Officer shall prepare protest files as 
follows: assemble them in a secure binder, fastened at the left side 
with a fastener that will permit the full page to be read; include a 
numerical document index, with the first two positions reserved for the 
Contracting Officer's Statement of Facts and Circumstances and the 
second for OGC-GLD's Memorandum of Law, that is paginated and, as 
necessary for sizable files, divided into two or more volumes; and the 
cover of the report shall identify it as the protest file and include 
the solicitation number and the GAO Bid Protest file number--i.e., ``B- 
number.'' In addition, the Contracting Officer shall fold drawings and 
place them in an envelope in the binder and the solicitation/contract 
shall constitute a separate exhibit, if it is voluminous in size. The 
Contracting Officer shall distribute protest files as follows: four 
copies to OGC-GLD and one copy to the contracting activity's protest 
control officer. In addition to the items listed in FAR 
33.104(a)(3)(ii)(A) through (G), the protest file shall include the 
following documents:
    (H) The current status of award. (Note: When award has been made, 
this shall include whether performance has commenced, shipment or 
delivery has been made, or a stop work order has been issued.)
    (I) A copy of any mutual agreement to suspend work on a no-cost 
basis, when appropriate--see FAR 33.104(c)(4).
    (J) Copies of the notice of protest given offerors and other parties 
when the notice is appropriate--see FAR 33.104(a)(2).
    (K) A copy of the negotiation memorandum, when applicable.
    (L) The name and telephone number of the person in the contracting 
office who may be contacted for information relevant to the protest.
    (M) A copy of the competitive range determination.
    (N) The acquisition plan, source selection plan, and the source 
selection decision document.
    (O) The Contracting Officer's statement of facts and circumstances, 
including numbered findings of fact prepared with complete 
documentation,

[[Page 86]]

and all the facts and rationale, both favorable and unfavorable, to the 
Contracting Officer's position.
    (4) OGC-GLD shall make the necessary distributions referenced in FAR 
33.104(a)(4).
    (5) Unless an alternative arrangement is reached with OGC-GLD, the 
Contracting Officer shall furnish one copy of the protest file 
containing the documentation specified in paragraph (a)(3)(ii) of this 
section (with the exception of the Contracting Officer statement of 
facts and circumstances) and FAR 33.104(a)(3)(ii)(A) through (G) to OGC-
GLD within 5 calendar days from receipt of the protest. In addition, the 
Contracting Officer shall also accommodate any other OGC-GLD requests 
for documents which may be needed prior to the aforementioned 5-day time 
period. The Contracting Officer shall submit the Contracting Officer's 
statement of facts and circumstances and the additional copies of 
documentation within 14 calendar days from receipt of the protest. Since 
the statute allows only a short time period in which to respond to 
protests lodged with GAO, the Contracting Officer shall handle each 
protest on a priority basis. OGC-GLD shall submit copies of the protest 
file to GAO, the protestor, and any intervenors in accordance with FAR 
33.104(a)(4)(i).
    (6) Since OGC-GLD will furnish the protest file to GAO, the 
protestor, and any intervenors, comments on the file from the protestor 
and any intervenors will be sent to OGC-GLD.
    (7) OGC-GLD shall serve as the GAO point of contact for protests 
lodged with GAO.
    (b) Protests before award.
    (1) To make an award notwithstanding a protest, the Contracting 
Officer shall prepare a finding using the criteria in FAR 33.104(b)(1), 
have it executed by the HCA (non-delegable), and forward it, along with 
a written request for approval to make the award (addressed to the 
Associate DAS for Acquisition through OGC-GLD). Should OGC-GLD concur, 
it shall forward the request to the Associate DAS for Acquisition for 
final approval. The written request for approval shall contain all 
relevant documentation as attachments to the request, so that the 
information may be considered by Associate DAS for Acquisition.
    (2) If the request to make an award notwithstanding the protest is 
approved by the Associate DAS for Acquisition, OGC-GLD shall notify GAO. 
Whether the request is approved or not, OGC-GLD shall telephonically 
notify the contracting activity's protest control officer of the 
Associate DAS for Acquisition decision, and the contracting activity's 
protest control officer shall immediately notify the Contracting 
Officer. Should the Associate DAS for Acquisition approve the request, 
ASFR/OGAPA/DA shall send a copy of that written approval to the 
contracting activity's protest control officer.
    (c) Protests after award.
    (2) If the Contracting Officer believes performance should be 
allowed to continue notwithstanding a protest, the Contracting Officer 
shall prepare a written finding using the criteria in FAR 33.104(c)(2). 
The HCA (non-delegable) shall execute the written finding, which the 
contracting office shall forward pursuant to the procedures described in 
paragraph (b)(1) of this section. The notification procedures stated in 
paragraph (b)(2) of this section shall apply to protests after award.
    (d) Findings and notice. The Contracting Officer shall prepare the 
written notice required by FAR 33.104(d) and provide a copy to OGC-GLD. 
OGC-GLD shall provide copies to GAO, the protester, and any intervenors.
    (g) Notice to GAO. FAR 33.104(g) requires the agency to notify GAO, 
if the agency has not followed any of GAO's recommendations (other than 
costs) within 60 days after its decision. By the end of the 60-day 
period, the Contracting Officer shall notify OGC-GLD of the status of 
implementing the recommendations and reasons for any non-compliance. 
OGC-GLD shall serve as the designated official to comply with the 
requirements of FAR 33.104(g).
    (i) Express option. When GAO invokes the express option, the 
Contracting Officer shall prepare the complete protest file as described 
in paragraph (a)(3) of this section, to include the item in paragraph 
(a)(3)(i), and deliver it (hand-carry, if necessary) to OGC-GLD in time 
to meet the submittal date

[[Page 87]]

GAO established. OGC-GLD shall notify the Contracting Officer of the 
submittal date after GAO has finalized its requirements. If the 
Contracting Officer is not notified about a changed schedule, the 
timelines for a regular bid protest outlined in FAR 33.104(a)(3)(i) 
shall apply.

                   Subpart 333.2_Disputes and Appeals



Sec. 333.203  Applicability.

    (c) The Secretary has designated the Civilian Board of Contract 
Appeals (CBCA) as the authorized ``Board'' to hear and determine 
disputes for the Department.



Sec. 333.209  Suspected fraudulent claims.

    The Contracting Officer shall submit any instance of a contractor's 
suspected fraudulent claim to the OIG for investigation.



Sec. 333.211  Contracting Officer's decision.

    (a)(2) The Contracting Officer shall refer a proposed final decision 
to OGC-GLD, for advice as to the legal sufficiency and format before 
sending the final decision to the contractor. The Contracting Officer 
shall provide OGC-GLD with the pertinent documents with the submission 
of each proposed final decision.
    (4)(v) When using the paragraph in FAR 33.211 (a)(4)(v), the 
Contracting Officer shall insert the words ``Civilian'' before each 
mention of the term ``Board of Contract Appeals.''
    (h) At any time within the period of appeal, the Contracting Officer 
may modify or withdraw the final decision. If a contractor has appealed 
the final decision to the CBCA, the Contracting Officer shall forward 
the recommended action to OGC-GLD with a supplement to the contract file 
that supports the recommended correction or amendment.



Sec. 333.212  Contracting Officer's duties upon appeal.

    (a) The rules set forth in the ``Rules of the Civilian Board of 
Contract Appeals,'' or the rules established by the U.S. Court of 
Federal Claims, as appropriate, shall govern appeals.
    (b) The OGC-GLD is designated as the Government Trial Attorney to 
represent the Government in the defense of appeals before the CBCA. OGC-
GLD shall provide the decision by CBCA to the appropriate Contracting 
Officer for compliance in accordance with the CBCA's decision.
    (c) If an appeal is filed with the CBCA, the Contracting Officer 
shall assemble a file, within 30 days of receipt of an appeal or 
notification that an appeal has been filed, that consists of all 
documents pertinent to the appeal, including the following:
    (1) The decision and findings of fact from which the appeal is 
taken.
    (2) The contract, including specifications and pertinent 
modifications, 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 witness on the matter 
in dispute made prior to the filing of the notice of appeal with the 
CBCA.
    (5) Any additional information considered pertinent. The Contracting 
Officer shall furnish the appeal file to the Government Trial Attorney 
for review and approval. After approval, the Contracting Officer shall 
prepare four copies of the file--i.e., one for the CBCA, one for the 
appellant, one for the Government Trial Attorney, and one for the 
contracting office.
    (d) At all times after the filing of an appeal, the Contracting 
Officer shall render whatever assistance is requested by the Government 
Trial Attorney. When an appeal is set for hearing, the Contracting 
Officer shall provide Government witnesses and specified physical and 
documentary evidence to the Trial Attorney. The Trial Attorney shall 
ensure the presence of all witnesses and documentary evidence at both 
the prehearing conference and hearing.
    (e) If a contractor, which has filed an appeal with the CBCA, elects 
to accept fully the decision from which the appeal was taken, or any 
modification to

[[Page 88]]

it, and gives written notification of acceptance to the Government Trial 
Attorney or the concerned Contracting Officer, the Government Trial 
Attorney shall notify the CBCA of the disposition of the dispute in 
accordance with Rule 27 of the CBCA.
    (f) If the contractor has elected to appeal to the U.S. Court of 
Federal Claims, the U.S. Department of Justice will represent HHS. 
However, the Contracting Officer shall coordinate all actions through 
OGC-GLD.



Sec. 333.212-70  Formats.

    (a) Contracting activities shall use the following format in 
transmitting appeal files to CBCA:
Your reference:
(Docket No.)
(insert name)

Clerk of the Board, Civilian Board of Contract Appeals
1800 F. Street, Washington, DC 20405 (for regular mail delivery)
1800 M Street, 6th floor, Washington, DC 20036 [for overnight and 
physical (hand-carry) delivery]

Dear (insert name):
Transmitted herewith are documents relative to the appeal under Contract 
No. ---- with the ------------ (insert name of contractor) in accordance 
with the procedures under Rule 4. The Government Trial Attorney for this 
case is ------------ (insert General Law Division, Office of General 
Counsel, Department of Health and Human Services, 330 Independence 
Avenue, SW., Washington, DC 20201).

The request for payment of charges resulting from the processing of this 
appeal shall be addressed to: ------------ (insert name and address of 
cognizant finance office.)

     Sincerely yours,

     Contracting Officer

Enclosures

    (b) Contracting activities shall use the following format in 
notifying the appellant that the appeal file was submitted to CBCA:

________________________________________________________________________

________________________________________________________________________

________________________________________________________________________

(insert contractor name and address)
Dear ------------: (insert name)

An appeal file has been compiled relative to the appeal under Contract 
No. ------ (insert number), and has been submitted to the Civilian Board 
of Contract Appeals (CBCA). The enclosed duplicate of the appeal file is 
identical to that submitted to CBCA, except for contract documents which 
you already have been provided. You may furnish or suggest any 
additional information deemed pertinent to the appeal to CBCA according 
to their rules.

The CBCA will provide you with further information concerning this 
appeal.

     Sincerely yours,

     Contracting Officer

Enclosure



Sec. 333.213  Obligation to continue performance.

    (a) The Contracting Officer shall use the Disputes clause at FAR 
52.233-1 without the use of Alternate I. However, if the Contracting 
Officer determines that the Government's interest would be better served 
by use of paragraph (i) in Alternate I, the HCA or CCO shall approve its 
use.



Sec. 333.215-70  Contract clauses.

    (a) The Contracting Officer shall insert the clause in 352.233-70, 
Choice of Law (Overseas), in solicitations and contracts when 
performance will be outside the United States, its possessions, and 
Puerto Rico, except as otherwise provided in a government-to-government 
agreement.
    (b) The Contracting Officer shall insert the clause in 352.233-71, 
Litigation and Claims, in solicitations and contracts when a cost-
reimbursement, time-and-materials, or labor-hour contract is 
contemplated (other than a contract for a commercial item.)

[[Page 89]]

             SUBCHAPTER F_SPECIAL CATEGORIES OF CONTRACTING

                    PART 334_MAJOR SYSTEM ACQUISITION

              Subpart 334.2_Earned Value Management System

Sec.

Sec. 334.200 Definitions.

Sec. 334.201 Policy.

Sec. 334.202 Integrated Baseline Reviews (IBRs).

Sec. 334.203 Solicitation provisions and contract clauses.

Sec. 334.203-70 HHS solicitation provisions and contract clauses.

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

    Source: 74 FR 62398, Nov. 27, 2009, unless otherwise noted.

              Subpart 334.2_Earned Value Management System



Sec. 334.200  Definitions.

    As used in this subpart, the following definitions shall apply:
    Full EVMS means tracking and reporting of both the cost and schedule 
aspects of a contract using the principles and guidelines described in 
ANSI/EIA Standard-748, Earned Value Management Systems (using the 
version of the Standard that is in effect at the time of the 
solicitation).
    Partial EVMS means tracking and reporting of only the schedule 
aspects of a contract using the principles and guidelines described in 
ANSI/EIA Standard-748, Earned Value Management Systems (using the 
version of the Standard that is in effect at the time of the 
solicitation).



Sec. 334.201  Policy.

    (a) For acquisitions for development designated as major in 
accordance with both OMB Circular A-11 and HHS policy on major 
acquisitions; for acquisitions that involve substantial development, 
modification or enhancement; or for acquisitions that involve 
significant upgrade of operational or steady state systems or programs, 
use of an Earned Value Management System (EVMS) is required as follows:
    (1) For individual cost-reimbursement or fixed-price-incentive 
contracts (with incentive based on cost) valued at $10 million to $25 
million, including options, full EVMS (as defined in 334.200) is 
required and the contractor's EVMS shall comply with the guidelines in 
ANSI/EIA Standard-748.
    (2) For individual firm-fixed-price, term form (level-of-effort) of 
any type, time-and-materials, or labor-hour contracts valued at $10 
million to $25 million, including options, partial EVMS (as defined in 
334.200) is required and the contractor's EVMS shall comply with the 
guidelines in ANSI/EIA Standard-748.
    (3) For individual cost-reimbursement or fixed-price-incentive 
contracts (with incentive based on cost) valued at more than $25 
million, including options, full EVMS (as defined in 334.200) is 
required and the contractor's EVMS must be formally validated and 
accepted by the Government--i.e., the contractor's Cognizant Federal 
Agency (CFA), as defined in FAR 2.101 and described in FAR 42.003).
    (4) For individual firm-fixed-price, term form (level-of-effort) of 
any type, time-and-materials, or labor-hour contracts valued at more 
than $25 million, including options, partial EVMS (as defined in 
334.200) is required and the contractor's EVMS must be formally 
validated and accepted by the Government--i.e., the contractor's CFA.
    (5) For individual contracts of any type valued at less than $10 
million, including options, full or partial EVM application, as 
appropriate to the contract type involved, is optional. The 
recommendation to use EVM should be based upon a risk analysis by the 
Program Manager/Project Officer. A decision to use EVM at this level 
requires the prior approval of the cognizant HCA.
    (b) EVM is not required, but may be applied with prior written 
approval of the HCA, on contracts of any dollar amount meeting either of 
the following criteria:
    (1) The acquisition is for non-developmental support services (e.g., 
program office support, Independent Verification & Validation services), 
steady state operations, basic and applied research, and routine 
services

[[Page 90]]

(e.g., building maintenance, help-desk services, landscaping services).
    (2) The contract is for a commercial item(s) under FAR Part 12.
    (c) When full EVM is required on a prime contract, it applies to 
subcontracts issued there under if those subcontracts have a value and 
are of a type and subject matter that would have required the use of 
full EVM had they been prime contracts. However, if the prime contract 
requires the use of only partial EVM, any subcontracts to which EVM is 
made applicable, because of dollar value, contract type or subject 
matter, shall require only partial EVM.
    (d) When offerors are required to provide an EVMS plan as part of 
their proposals, the Contracting Officer shall request the assistance of 
the Project Officer (and/or an appropriate HHS-designated third party) 
in determining the adequacy of such proposed EVMS plans.
    (e) The selection or use of a particular contract type, if done only 
or primarily to avoid the application of full EVM to the acquisition is 
prohibited.



Sec. 334.202  Integrated Baseline Reviews (IBRs).

    (a) An IBR normally should be conducted as a post-award activity. A 
pre-award IBR may be conducted only if--
    (1) The AP contains documentation that demonstrates the need and 
rationale for a pre-award IBR, including an assessment of the impact on 
the source selection schedule and the expected benefits;
    (2) The use of a pre-award IBR is approved in writing by the HCA 
prior to the issuance of the solicitation;
    (3) The source selection plan specifically addresses how the results 
of a pre-award IBR will be used during source selection, including any 
weight to be given to it in source evaluation, and that same or similar 
rationale is clearly set forth in the solicitation; and,
    (4) Specific arrangements are made, and budget authority is 
provided, to compensate all offerors who prepare for or participate in a 
pre-award IBR; and the solicitation informs prospective offerors of the 
means for and conditions of such compensation.



Sec. 334.203  Solicitation provisions and contract clauses.

    The FAR EVMS solicitation provisions and contract clause shall not 
be used in HHS contracts. See 334.203-70 for the HHS solicitation 
provisions and contract clauses.



Sec. 334.203-70  HHS solicitation provisions and contract clauses.

    As provided in 334.201(a) and 334.202, the Contracting Officer shall 
insert the following:
    (a) The provision in 352.234-1, Notice of Earned Value Management 
System--Pre-Award IBR, in solicitations that will require the contractor 
to use an EVMS, whether full or partial, when the Government requires an 
IBR prior to award.
    (b) The provision in 352.234-2, Notice of Earned Value Management 
System--Post-Award IBR, in solicitations that will require the 
contractor to use an EVMS, whether full or partial, when the Government 
requires an IBR after contract award.
    (c) The clause in 352.234-3, Full Earned Value Management System, in 
solicitations and contracts, valued at, or greater than, $25 million, 
when a cost-reimbursement or fixed-price-incentive contract (where the 
incentive is based on cost) is contemplated, and which require a 
contractor to use full EVMS. The Contracting Officer shall use the 
clause with its Alternate I when the contract value is equal to or 
greater than $10 million, but less than $25 million.
    (d) The clause in 352.234-4, Partial Earned Value Management System, 
in solicitations and contracts, valued at, or greater than, $25 million, 
when a firm-fixed-price, time-and-materials, labor-hour, or term-form 
cost-plus-fixed-fee contract is contemplated, and which require a 
contractor to use partial EVMS. The Contracting Officer shall use the 
clause with its Alternate I when the contract value, is equal to or 
greater than $10 million, but less than $25 million.

[[Page 91]]

              PART 335_RESEARCH AND DEVELOPMENT CONTRACTING

Sec.

Sec. 335.070 Cost sharing.

Sec. 335.070-1 Policy.

Sec. 335.070-2 Amount of cost sharing.

Sec. 335.070-3 Method of cost sharing.

Sec. 335.070-4 Contract award.

Sec. 335.071 Special determinations and findings affecting research and 
          development contracting.

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

    Source: 74 FR 62398, Nov. 27, 2009, unless otherwise noted.



Sec. 335.070  Cost-sharing.



Sec. 335.070-1  Policy.

    (a) Contracting activities shall encourage performing organizations 
to contribute to the cost of performing R & D, through the use of cost-
sharing contracts, where there is a probability that the contractor will 
receive present or future benefits from participation, such as increased 
technical know-how, training for employees, acquisition of equipment, 
and use of background knowledge in future contracts. Cost-sharing is 
intended to serve the mutual interests of the Government and the 
performing organization by helping to ensure efficient utilization of 
the resources available for the conduct of R & D projects and by 
promoting sound planning and prudent fiscal policies of the performing 
organization. The Contracting Officer shall use a cost-sharing contract, 
unless the Contracting Officer determines that a request for cost-
sharing would not be appropriate because of the following circumstances:
    (1) The particular R & D objective or scope of effort for the 
project is specified by the Government rather than proposed by the 
performing organization. This would usually include any formal 
Government solicitation for a specific project.
    (2) The R & D effort has only minor relevance to the non-Federal 
activities of the performing organization, and the organization is 
proposing to undertake the R & D primarily as a service to the 
Government.
    (3) The organization has little or no non-Federal sources or funds 
from which to make a cost contribution. Organizations which are 
predominantly engaged in R & D and have little or no production or other 
service activities may not be in a favorable position to make a cost 
contribution. Accordingly, the Contracting Officer shall normally not 
request cost-sharing, if cost-sharing would require the Government to 
provide funds through some other means (such as fees) to enable the 
organization to cost-share.
    (b) The Contracting Officer has the responsibility for negotiating 
cost-sharing. Each R & D contract file shall indicate whether the 
Contracting Officer considered cost-sharing appropriate for that 
particular contract and in what amount. If cost sharing was not 
appropriate, the file must include a statement and factual basis for 
that decision (e.g., ``Because the contractor will derive no benefits 
from this award that can be applied to its commercial activities, cost-
sharing is not considered appropriate.'') The Contracting Officer shall 
coordinate with the Project Officer before documenting this decision.
    (c) If the Contracting Officer considers cost-sharing appropriate 
for an R & D contract and the contractor refuses to accept this type of 
contract, the Contracting Officer may make an award without cost-
sharing, if the Contracting Officer concludes that payment of the full 
cost of the R & D effort is necessary to obtain the services of that 
particular contractor.



Sec. 335.070-2  Amount of cost sharing.

    When cost-sharing is appropriate, the Contracting Officer shall use 
the following guidelines to determine the amount of cost participation 
by the contractor:
    (a) The amount of cost participation depends on the extent to which 
the R & D effort or results are likely to enhance the performing 
organization's capability, expertise, or competitive position, and the 
value of this enhancement to the performing organization. Therefore, 
contractor cost participation could reasonably range from as little as 
one percent or less of the total project cost to more than 50 percent of 
the total project cost. Ultimately, cost-sharing is a negotiable item. 
As

[[Page 92]]

such, the amount of cost-sharing shall be proportional to the 
anticipated value of the contractor's gain.
    (b) If the performing organization will not acquire title to, or the 
right to use, inventions, patents, or technical information resulting 
from the R & D project, it is normally appropriate to obtain less cost-
sharing than in cases in which the performer acquires these rights.
    (c) A fee or profit is not normally paid to the performing 
organization, if the organization is to contribute to the cost of the R 
& D effort, but the amount of cost-sharing may be reduced to reflect the 
fact that the organization is foregoing its normal fee or profit in the 
research. However, if the R & D is expected to be of only minor value to 
the performing organization, and if a statute does not require cost-
sharing, it may be appropriate for the performer to make a contribution 
in the form of a reduced fee or profit rather than sharing costs of the 
project.
    (d) The organization's participation may be considered over the 
total term of the project, so that a relatively high contribution in one 
year may be offset by a relatively low contribution in another.
    (e) A relatively low degree of cost-sharing may be appropriate, if 
an area of R & D requires special stimulus in the national interest.



Sec. 335.070-3  Method of cost sharing.

    Cost-sharing on individual contracts may be accomplished either by a 
contribution of part or all of one or more elements of allowable cost of 
the work being performed or by a fixed amount or stated percentage of 
the total allowable costs of the project. Contractors shall not charge 
costs contributed to the Government under any other instrument (e.g., 
grant or contract), including allocations to other instruments as part 
of any independent R & D program.



Sec. 335.070-4  Contract award.

    Consistent with HHS' objectives of competition and support of the 
small business program, Contracting Officers shall not award contracts 
solely on the basis of an organization's ability or willingness to cost-
share. Contracting Officers shall make awards primarily on the 
contractor's competence and only after adequate competition has been 
obtained among large and small business organizations, whenever 
possible. An offeror's willingness to share costs is not a technical 
evaluation consideration, but a business consideration, which is 
secondary to selecting the best qualified source.



Sec. 335.071  Special determinations and findings affecting research and 
          development contracting.

    OPDIV heads shall sign individual and class D & Fs for--
    (a) Acquisition or construction of equipment or facilities on 
property not owned by the United States pursuant to 42 U.S.C. 241(a)(7); 
and
    (b) Use of an indemnification provision in an R & D contract 
pursuant to 42 U.S.C. 241(a)(7).

                  PART 337_SERVICE CONTRACTING_GENERAL

                 Subpart 337.1_Service Contracts_General

Sec.

Sec. 337.103-70 Solicitation provisions and contract clauses.

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

    Source: 74 FR 62398, Nov. 27, 2009, unless otherwise noted.

                 Subpart 337.1_Service Contracts_General



Sec. 337.103-70  Solicitation provisions and contract clauses.

    (a) The Contracting Officer shall insert the clause in 352.237-70, 
Pro-Children Act, in solicitations, contracts, and orders that involve 
(a) kindergarten, elementary, or secondary education or library services 
or (b) health or daycare services that are provided to children under 
the age of 18 on a routine or regular basis pursuant to the Pro-Children 
Act of 1994.
    (b) The Contracting Officer shall insert the clause in 352.237-71, 
Crime Control Act--Reporting of Child Abuse, in solicitations, 
contracts, and orders that require performance on Federal

[[Page 93]]

land or in a Federally operated (or contracted) facility and involve the 
professions/activities performed by persons specified in the Crime 
Control Act of 1990, including, but not limited to, physicians, nurses, 
dentists, health care practitioners, optometrists, psychologists, 
emergency medical technicians, alcohol or drug treatment personnel, 
child care workers and administrators, emergency medical technicians and 
ambulance drivers.
    (c) The Contracting Officer shall insert the clause in 352.237-72, 
Crime Control Act--Requirement for Background Checks, in solicitations, 
contracts, and orders that involve providing child care services to 
children under the age of 18, including social services, health and 
mental health care, child- (day) care, education (whether or not 
directly involved in teaching), and rehabilitative programs covered 
under the Crime Control Act of 1990 (Act).

             PART 339_ACQUISITION OF INFORMATION TECHNOLOGY

                          Subpart 339.1_General

Sec.

Sec. 339.101 Policy.

           Subpart 339.2_Electronic and Information Technology


Sec. 339.201 Clarification.

Sec. 339.201-70 Required provision and contract clause.

Sec. 339.203 Approval of exceptions.

 Subpart 339.70_Use of General Services Administration Blanket Purchase 
            Agreements for Independent Risk Analysis Services


Sec. 339.7000 Policy.

Sec. 339.7001 Request for approval to make an award to other than a GSA 
          BPA holder.

Sec. 339.7002 Notice of intended award.

             Subpart 339.71_Information Security Management


Sec. 339.7100 Definitions.

Sec. 339.7101 Policy.

Sec. 339.7102 Applicability.

Sec. 339.7103 Solicitation and contract clause.

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

    Source: 74 FR 62398, Nov. 27, 2009, unless otherwise noted.

                          Subpart 339.1_General



Sec. 339.101  Policy.

    (d)(1) The Contracting Officer shall insert the clause in 352.239-
70, Standard for Security Configurations, in solicitations, contracts, 
and orders that involve the operation or acquisition of an information 
technology system (for definition of the latter term, see http://
www.hhs.gov/ocio/policy.)
    An HHS information security policy waiver, the template for which is 
available at: http://intranet.hhs.gov/infosec/policies--memos.html, must 
be approved in order to deviate from HHS OCIO Standard 2009-0001.001S, 
HHS Standard for Security Configurations Language in HHS Contracts, 
dated January 30, 2009. A copy of the approved waiver shall be forwarded 
to the Contracting Officer who, in turn, shall request a comparable 
deviation for the clause in 352.239-70.
    (2) The Contracting Officer shall insert the clause in 352.239-71, 
Standard for Encryption Language, in solicitations, contracts, and 
orders that involve the acquisition or lease of, or the requirement to 
use, desktop or laptop computers, mobile devices, or portable media to 
store or process HHS sensitive information that the Project Officer 
categorizes as moderate or high under Federal Information Processing 
Standard (FIPS) 199, Standards for Security Categorization of Federal 
Information and Information Systems, dated February 2004. An HHS 
information security policy waiver, the template for which is available 
at: http://intranet.hhs.gov/infosec/policies--memos.html, must be 
approved in order to deviate from HHS OCIO Standard 2009-0002.001S, HHS 
Standard for Encryption Language in HHS Contracts, dated January 30, 
2009. A copy of the approved waiver shall be forwarded to the 
Contracting Officer who, in turn, shall request a comparable deviation 
for the clause in 352.239-71.

           Subpart 339.2_Electronic and Information Technology



Sec. 339.201  Clarification.

    FAR Subpart 39.2, Electronic and Information Technology, requires 
Federal

[[Page 94]]

agencies to ensure that, when acquiring EIT, Federal employees with 
disabilities and members of the public with disabilities have access to 
and use of information and data that is comparable to individuals 
without disabilities. This EIT access requirement does not apply to a 
contractor's internal workplaces. EIT that is neither used nor accessed 
by Federal employees or members of the public is not subject to the 
Access Board accessibility standards. Contractors in their professional 
capacity are not members of the public for purposes of Section 508.



Sec. 339.201-70  Required provision and contract clause.

    (a) The Contracting Officer shall insert the provision in 352.239-
73(a), Electronic and Information Technology Accessibility, in 
solicitations valued at more than the micro-purchase threshold that 
involve the development, acquisition, maintenance, or use of EIT 
products and services subject to Section 508 of the Rehabilitation Act 
of 1973, as amended, including EIT deliverables such as electronic 
documents and reports. (Note: Exceptions to this requirement can be 
found in FAR 39.204.) After approval of the Section 508 Official or 
designee, the Contracting Officer may waive the requirement for offerors 
to provide an HHS Section 508 Product Assessment Template, if Section 
508 EIT conformance can be determined conclusively through other less 
formal methods. The Contracting Officer shall document in the award file 
any waiver for submission of the Product Assessment Template. The 
approval of a waiver by the Section 508 Official does not, however, 
eliminate the requirement for product assessment against Section 508 
accessibility standards.
    (b) The Contracting Officer shall insert the clause in 352.239-
73(b), Electronic and Information Technology Accessibility, in contracts 
and orders that involve the development, acquisition, maintenance, or 
use of EIT products and services, including EIT deliverables such as 
electronic documents and reports, subject to Section 508 of the 
Rehabilitation Act of 1973, as amended, unless the EIT products and 
services are incidental to the project. (Note: Other exceptions to this 
requirement can be found at FAR 39.204.)
    (c) When acquiring EIT products and services subject to Section 508 
of the Rehabilitation Act of 1973, as amended, in the following 
circumstances, the Contracting Officer shall insert the paragraph in 
352.239-73(c), Schedule for Contractor Submission of Section 508 Annual 
Report, which requires a contractor to provide an HHS Section 508 Annual 
Report, at the end of the clause in 352.239-73(b) and cite the schedule 
for report submission, where indicated:
    (1) New multiple-year contracts.
    (2) Existing multiple-year contracts, with a performance period of 1 
year or more remaining as of January 16, 2008 (the effective date of 
HHS' interim acquisition guidance).
    (3) New multiple-year task and delivery orders exceeding $100,000 
awarded under IDIQ or FSS contracts.
    (4) Existing multiple-year task and delivery orders exceeding 
$100,000 awarded under IDIQ or FSS contracts, with a task/delivery order 
performance period of 1 year or more remaining as of January 16, 2008.
    (5) New multiple-year BPA orders that exceed $100,000.
    (6) Existing multiple-year BPA orders with a performance period of 1 
year or more remaining as of January 16, 2008.
    (7) New multiple-year contracts with option periods/quantities.
    (8) Existing multiple-year contracts with option periods/quantities 
remaining as of January 16, 2008.
    (d) Before adding funds to a multiple-year contract or order--see 
339.201-70(c), that involves the acquisition of EIT products and 
services, including EIT deliverables such as electronic documents and 
reports, subject to Section 508 of the Rehabilitation Act of 1973, as 
amended, the Contracting Officer shall ensure that the contractor has 
provided to the Contracting Officer and COTR a properly completed HHS 
Section 508 Annual Report--see Section 508 policy on HHS Office on 
Disability Web site. The Contracting Officer shall request that the 
contractor provide the report in sufficient time for its review and 
approval by the Contracting Officer, COTR, and the Section 508 Official

[[Page 95]]

or designee, prior to funding performance beyond the currently funded 
contract performance period. The Contracting Officer shall ensure that 
the report and all related approvals are made a part of the official 
contract/order file. The Section 508 Official or designee shall monitor 
the Annual Reports, direct corrective measures to improve their 
submission and quality, and report improvement actions taken to the HHS 
Office on Disability.



Sec. 339.203  Approval of exceptions.

    (a) Procedures to document exception and determination requests are 
set forth in the OPDIV/STAFFDIV Section 508 Implementation Plans 
required by paragraph 4.1 of the HHS Section 508 policy.
    (b) In the development of an AP or other acquisition request 
document, the Contracting Officer shall ensure that all Section 508 
commercial non-availability or undue burden exception determination 
requests for applicable EIT requirements are: (1) Documented and 
certified in accordance with the requirements of paragraph 4.3, Section 
508 Compliance Exceptions, of the HHS Section 508 policy; (2) signed by 
the Project Officer; (3) approved by the OPDIV Section 508 Official or 
designee; and (4) included in the AP or other acquisition request 
document provided by the Project Officer to the contracting office.
    (c) In instances where a technical evaluation has been performed, 
and no organization's proposed products or services meet some or all of 
Section 508 accessibility standards, in order to proceed with the 
acquisition, the Contracting Officer shall provide an exception 
determination request along with the technical evaluation panel's 
assessment of the Section 508 evaluation factor to the designated 
Section 508 Official or designee for review and approval/disapproval. 
See 315.304 regarding obtaining approval of technical evaluation panel 
assessments by the Section 508 Official or designee. The Contracting 
Officer shall include the Section 508 Official's or designee's approval/
disapproval of the exception determination request in the official 
contract file and reference it, as appropriate, in all source selection 
documents. For further information, see paragraphs 4.3, Section 508 
Compliance Exceptions, and paragraph 11, Appendix A, of HHS Section 508 
policy--see Section 508 policy on HHS Office on Disability Web site.

 Subpart 339.70_Use of General Services Administration Blanket Purchase 
            Agreements for Independent Risk Analysis Services



Sec. 339.7000  Policy.

    GSA has established government-wide BPAs for independent risk 
analysis services, including verification and validation of in-house 
risk assessments. For information on ordering procedures, see the 
attachment to OMB memorandum (M-08-10), Use of Commercial Independent 
Risk Analysis Services Blanket Purchase Agreements (BPA), dated February 
4, 2008, available on the OMB Web site. HHS policy is for contracting 
activities to use the GSA BPA sources to the maximum practicable extent.



Sec. 339.7001  Request for approval to make an award to other than a GSA 
          BPA holder.

    The Contracting Officer, in conjunction with the OPDIV/STAFFDIV 
Chief Information Security Officer (CISO), may determine, as part of 
conducting market research for independent risk analysis services 
expected to exceed the micro-purchase threshold, that obtaining the 
required services from a source other than a GSA BPA holder will result 
in the best value to the Government. In that event, the Contracting 
Officer shall prepare a request for approval at least 15 business days 
prior to the planned date of the contract or order award and forward it 
through the HCA and the OPDIV/STAFFDIV CISO for concurrence, to the SPE. 
The SPE shall coordinate the processing of the request with the CAO and 
the HHS CIO. The request for approval shall briefly describe the 
services required, indicate the intended source's pricing and other 
terms and conditions, and provide the rationale for award to the 
intended source rather

[[Page 96]]

than the GSA BPA holders. The request may include additional supporting 
rationale to document the best value decision, as appropriate.



Sec. 339.7002  Notice of intended award.

    The CAO, or designee, in conjunction with the HHS CIO, will review 
the Contracting Officer's request for approval to make an award to other 
than a GSA BPA holder for independent risk analysis services and either 
approve or disapprove the request in writing. If the CAO, or designee, 
approves the request, upon approval, the CAO, or designee, shall send a 
notice of intended award to the designated GSA BPA Contracting Officer, 
with a copy to OMB's E-Government and Information Technology 
Administrator, at least 10 business days prior to the date of the 
proposed award explaining how it provides the best value to the 
Government. In the event of unusual and compelling urgency, the CAO, or 
designee, shall provide the notice of intended award to GSA as soon as 
practicable.

             Subpart 339.71_Information Security Management



Sec. 339.7100  Definitions.

    As used in this subpart, the following definitions shall apply:
    Adequate security means, in accordance with OMB Circular A-130, 
Management of Federal Information Resources, Appendix 3 (Security of 
Federal Automated Information Resources), security commensurate with the 
risk and magnitude of harm resulting from the loss, misuse, or 
unauthorized access to or modification of information.
    Federal information means, in accordance with OMB Circular A-130, 
Management of Federal Information Resources, Appendix 3 (Security of 
Federal Automated Information Resources), information created, 
collected, processed, disseminated, or disposed of by or for the Federal 
Government.
    Federal information system means an information system used or 
operated by an executive agency, by a contractor of an executive agency, 
or by another organization on behalf of an executive agency.
    Information means, in accordance with OMB Circular A-130, Management 
of Federal Information Resources, Appendix 3 (Security of Federal 
Automated Information Resources), any communication or representation of 
knowledge such as facts, data, or opinions in any medium or form, 
including textual, numerical, graphic, cartographic, narrative, or 
audiovisual forms.
    Information infrastructure means the underlying framework that 
information systems and assets rely on in processing, transmitting, 
receiving, or storing information electronically.
    Information security means protecting information and information 
systems from unauthorized access, use, disclosure, disruption, 
modification or destruction in order to provide--
    (1) Integrity, which means guarding against improper information 
modification or destruction, and includes ensuring information non-
repudiation and authenticity;
    (2) Confidentiality, which means preserving authorized restrictions 
on access and disclosure, including means of protecting personal privacy 
and proprietary information;
    (3) Availability, which means ensuring timely and reliable access to 
and use of information; and
    (4) Privacy, which means regulating the appropriate collection, 
maintenance, use, and dissemination of personal information by Federal 
executive branch agencies. It essentially prohibits disclosure without 
consent.
    Information system means a discrete set of information resources 
organized for the collection, processing, maintenance, transmission, and 
dissemination of information, in accordance with defined procedures, 
whether automated or manual.
    Information technology includes computers, ancillary equipment 
(including imaging peripherals, input, output, and storage devices 
necessary for security and surveillance), peripheral equipment designed 
to be controlled by the central processing unit of a computer, software, 
firmware and similar procedures, services (including support services) 
and related resources.

[[Page 97]]



Sec. 339.7101  Policy.

    HHS is responsible for implementing an information security program 
to ensure that its information systems and associated facilities, as 
well as those of its contractors, provide a level of security 
commensurate with the risk and magnitude of harm that could result from 
the loss, misuse, disclosure, or modification of the information 
contained in those systems. Each system's level of security shall 
protect the integrity, confidentiality, and availability of the 
information and comply with all security and privacy-related laws and 
regulations.



Sec. 339.7102  Applicability.

    Contracting Officers are responsible for ensuring that all 
information technology acquisitions comply with the Federal Information 
Security Management Act (FISMA), the HHS-OCIO Information Systems 
Security and Privacy Policy, and FISMA-related FAR and HHSAR 
requirements. This policy does not apply to national security systems as 
defined in FISMA.



Sec. 339.7103  Solicitation and contract clause.

    The Contracting Officer shall insert the clause in 352.239-72, 
Security Requirements for Federal Information Technology Resources, in 
solicitations and contracts that involve contractor access to Federal 
information or Federal information systems.

[[Page 98]]

                    SUBCHAPTER G_CONTRACT MANAGEMENT

                    PART 342_CONTRACT ADMINISTRATION

         Subpart 342.3_Contract Administration Office Functions

Sec.

Sec. 342.302 Contract administration functions.

                    Subpart 342.7_Indirect Cost Rates


Sec. 342.705 Final indirect cost rates.

                   Subpart 342.70_Contract Monitoring


Sec. 342.7000 Purpose.

Sec. 342.7001 Contract monitoring responsibilities.

Sec. 342.7002 Procedures to be followed when a contractor fails to 
          perform.

Sec. 342.7003 Withholding of contract payments.

Sec. 342.7003-1 Solicitation provisions and contract clauses.

Sec. 342.7003-2 Procedures to be followed when withholding payments.

         Subpart 342.71_Administrative Actions for Cost Overruns


Sec. 342.7100 Scope of subpart.

Sec. 342.7101 Contract administration.

Sec. 342.7101-1 General.

Sec. 342.7101-2 Procedures.

Sec. 342.7102 Contract modifications.

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

    Source: 74 FR 62398, Nov. 27, 2009, unless otherwise noted.

         Subpart 342.3_Contract Administration Office Functions



Sec. 342.302  Contract administration functions.

    (c)(1) In multiple-year contracts or orders, the OPDIV's Section 508 
Official or designee, as well as the Contracting Officer and COTR, shall 
review and approve all Section 508 Annual Reports before the Contracting 
Officer makes final payment or any option is exercised under any 
applicable contract/order. In contracts/orders of 1 year or less in 
duration, the aforementioned officials shall review and approve the 
Section 508 conformance certification before final payment is made. The 
Contracting Officer also shall ensure that the report and all related 
approvals are made a part of the official contract/order file.
    (2) The Contracting Officer shall insert the clause in 352.242-70, 
Key Personnel, in solicitations and contracts when the Contracting 
Officer will designate contractor key personnel. See FAR 35.015 for 
additional information regarding key personnel when contracting for R & 
D.
    (3) The Contracting Officer shall insert the clause in 352.242-71, 
Tobacco-free Facilities, in solicitations, contracts, and orders when 
some or all of the contractor's performance (including construction 
services), will take place on HHS-owned or controlled properties. The 
clause shall not be included if performance requires only that 
contractor staff attend occasional meetings on HHS properties. In that 
case, contractor employees are considered ``visitors.'' Further, for any 
proposed or existing construction contract or order, the Contracting 
Officer shall coordinate any exceptions to the policy, raised by an 
incumbent or potential contractor based on union or collective 
bargaining agreements, with the designated OPDIV tobacco-free policy 
contact point for final disposition.
    (4) The Contracting Officer shall insert the clause in 352.242-72, 
Native American Graves Protection and Repatriation Act, in 
solicitations, contracts, and orders that require performance on Tribal 
lands or are for construction on Federal or Tribal lands.

                    Subpart 342.7_Indirect Cost Rates



Sec. 342.705  Final indirect cost rates.

    (a) The Division of Cost Allocation, PSC, shall establish indirect 
cost rates, research patient care rates, and, as necessary, fringe 
benefit, computer, and other special costing rates for use in contracts 
awarded to State and local governments, colleges and universities, 
hospitals, and other nonprofit organizations.
    (b) The Division of Financial Advisory Services, NIH, shall 
establish indirect cost rates, fringe benefit rates,

[[Page 99]]

and similar rates for use in contracts awarded to commercial 
organizations.

                   Subpart 342.70_Contract Monitoring



Sec. 342.7000  Purpose.

    Contract monitoring is an essential element of contract 
administration that the Contracting Officer and the COTR perform 
jointly. This subpart describes HHS' operating concepts.



Sec. 342.7001  Contract monitoring responsibilities.

    (a) The contract establishes the obligations of both the Government 
and the contractor. The Contracting Officer is the only person 
authorized to modify the contract and shall confirm all modifications in 
writing.
    (b) The Contracting Officer shall ensure the contractor's compliance 
with all the terms and conditions of the contract. The Contracting 
Officer shall inform the contractor by letter (if not already stipulated 
in the contract) of the authorities and responsibilities of the 
Government personnel involved with the contract.
    (c) The Contracting Officer shall use program, technical, and other 
personnel for assistance and advice in monitoring the contractor's 
performance and in other areas of post-award administration. The 
Contracting Officer shall ensure that these individuals understand and 
carry out their assigned responsibilities. The individual roles and 
corresponding responsibilities typically involve, but are not limited 
to, the following:
    (1) The role of program and technical personnel in monitoring the 
contract is to assist and advise the Contracting Officer, and act as the 
COTR when so designated by the Contracting Officer. COTR activities 
include--
    (i) Providing technical monitoring during contract performance and 
advising the Contracting Officer relating to delivery, acceptance, or 
rejection of deliverables in accordance with the terms of the contract;
    (ii) Assessing contractor performance;
    (iii) Recommending necessary changes to the schedule of work and 
period of performance to accomplish the objectives of the contract (The 
COTR shall provide the Contracting Officer a written request along with 
an appropriate justification and a funding document, if additional funds 
are needed.);
    (iv) Reviewing invoices/vouchers and recommending approval/
disapproval by the Contracting Officer, including providing comments 
regarding anything unusual discovered in the review (Note: If a contract 
contains the Salary Rate Limitation clause specified in 352.231-70, the 
Contracting Officer, in conjunction with the COTR, shall monitor the 
contractor's invoices to ensure that the contractor is billing salaries, 
including those of subcontractors, at rates no higher than the Federal 
Executive Schedule salary rate limitation in effect on the date(s) the 
expense(s) was/were incurred.);
    (v) Reviewing and recommending approval or disapproval of 
subcontractors, overtime, travel, and key personnel changes; and
    (vi) Participating, as necessary, in various phases of the contract 
closeout process.
    (2) The roles of the contract administrator, auditor, cost analyst, 
and property administrator are to assist or advise the Contracting 
Officer in post-award administration. Such activities include--
    (i) Evaluating contractor systems and procedures, including 
accounting policies and procedures, purchasing policies and practices, 
property accounting and control, wage and salary plans and rate 
structures, personnel policies and practices, etc.;
    (ii) Processing disputes under the Disputes clause and any resultant 
appeals;
    (iii) Modifying or terminating the contract; and
    (iv) Determining the allowability of: costs charged in incentive or 
cost- reimbursement type contracts, and progress payments under fixed-
price contracts. This is important for awards to new organizations or 
those with financial weaknesses.
    (d) The Contracting Officer shall ensure that contractor performance 
and contract monitoring conform with contract terms and conditions. If 
performance is not satisfactory or if problems

[[Page 100]]

are anticipated, the Contracting Officer shall take immediate action to 
protect the Government's rights under the contract. The Contracting 
Officer shall notify appropriate officials of problems that cannot be 
resolved within contract limitations and whenever the contractor is not 
meeting contract or program objectives. The notification shall include a 
statement of corrective actions that the Contracting Officer is taking.



Sec. 342.7002  Procedures to be followed when a contractor fails to 
          perform.

    (a) The Contracting Officer shall initiate immediate action to 
protect the Government's rights whenever the contractor fails to comply 
with either the delivery or reporting terms of the contract. Compliance 
with the reporting terms includes those reports the contractor is 
required to submit directly to the payment office. The payment office 
shall notify the Contracting Officer promptly when the contractor does 
not submit such a report on time.
    (b) When the contract contains a termination for default clause, the 
contractor's failure to submit any report, perform services, or deliver 
work when required by the contract is considered a default in 
performance. The Contracting Officer shall immediately issue a formal 
10-day cure notice pursuant to FAR 49.607. The notice shall include a 
statement to the effect that payments will be withheld if the default is 
not cured within the time period specified in the notice or if the 
default is not determined to be excusable.
    (1) If the default is cured or is determined to be excusable, the 
Contracting Officer shall not initiate the withholding action.
    (2) If the default is not determined to be excusable or a response 
is not received within the allotted time, the Contracting Officer shall 
initiate withholding action on all contract payments and shall determine 
whether termination for default or other action would be in the best 
interest of the Government.
    (c) When the contract does not contain a termination for default 
clause, the Contracting Officer shall consider a contractor's failure to 
submit any required report, perform services, or deliver work when 
required by the contract a failure to perform. The Contracting Officer 
shall immediately issue a written notice to the contractor that: 
specifies the failure, and provides a 10-day period (or longer period if 
the Contracting Officer deems it necessary) within which the contractor 
shall either cure the failure or provide reasons for an excusable delay. 
The notice shall include a statement to the effect that payments will be 
withheld, if the default is not cured within the time period specified 
in the notice or if the default is not determined to be excusable.
    (1) If the contractor cures the failure or the Contracting Officer 
determines it to be excusable, the Contracting Officer shall not 
initiate the withholding action.
    (2) If the Contracting Officer does not determine the failure 
excusable or the contractor does not provide a response within the 
allotted time, the Contracting Officer shall initiate withholding action 
on all contract payments and shall determine whether termination for 
convenience or other action would be in the best interest of the 
Government.
    (d) The Contracting Officer shall consult FAR subpart 49.4 for 
further guidance before taking any of the actions described in this 
section.



Sec. 342.7003  Withholding of contract payments.



Sec. 342.7003-1  Solicitation provisions and contract clauses.

    (a) The Contracting Officer shall insert the clause in 352.242-73, 
Withholding of Contract Payments, and the clause in FAR 52.249-14, 
Excusable Delays, in solicitations and contracts when a cost-
reimbursement, time-and-materials, or labor-hour contract is 
contemplated.
    (b) The Contracting Officer shall insert the clause in 352.242-74, 
Final Decisions on Audit Findings, in solicitations and contracts when a 
cost-reimbursement contract is contemplated, except for those contracts 
with:
    (1) A foreign government or agency of that government; or
    (2) An international organization or a subsidiary body of that 
organization that the HCA determines would not be appropriate.

[[Page 101]]



Sec. 342.7003-2  Procedures to be followed when withholding payments.

    (a) When appropriate, the Contracting Officer shall withhold any 
contract payment when a required report is overdue or the contractor 
fails to perform or deliver required work or services. When making the 
determination to withhold contract payments in accordance with the 
Withholding of Contract Payments clause, the Contracting Officer shall 
immediately notify the servicing finance office in writing of the 
determination to withhold payments. The notice of suspension shall 
contain all information necessary for the finance office to identify the 
contract--i.e., contract number, task/delivery order number, and 
contractor name and address.
    (b) The Contracting Officer shall immediately notify the contractor 
in writing that payments have been suspended until the default or 
failure is cured.
    (c) When the contractor cures the default or failure, the 
Contracting Officer shall immediately notify, in writing, all recipients 
of the notice of withholding that the withholding is to be lifted and 
contract payments are to be resumed.
    (d) When taking any actions regarding the withholding of payments, 
the Contracting Officer shall not waive any of the Government's rights 
when corresponding with the contractor.

         Subpart 342.71_Administrative Actions for Cost Overruns



Sec. 342.7100  Scope of subpart.

    This subpart sets forth the procedures to follow when a cost overrun 
is anticipated. A cost overrun occurs when the allowable actual cost of 
performing a cost-reimbursement type contract exceeds the total 
estimated cost specified in the contract.



Sec. 342.7101  Contract administration.



Sec. 342.7101-1  General.

    Upon receipt of information that a contractor's accumulated cost and 
projected expenditures will exceed the limit of funds obligated by the 
contract, the Contracting Officer shall coordinate immediately with the 
appropriate program office to determine whether the contract should be 
modified or terminated. If the Contracting Officer receives information 
from a source other than the contractor that a cost overrun is 
anticipated, the Contracting Officer shall verify the information with 
the contractor and remind the contractor of the notification 
requirements of the Limitation of Cost clause.



Sec. 342.7101-2  Procedures.

    (a) Upon notification that a cost overrun is anticipated, the 
Contracting Officer shall inform the contractor to submit a request for 
additional funds, which shall include the following:
    (1) Name and address of contractor.
    (2) Contract number and expiration date.
    (3) Contract item(s) and amount(s) creating overrun.
    (4) The elements of cost which changed from the original estimate--
i.e., labor, material, travel, and overhead, to be furnished in the 
following format:
    (i) Original estimate.
    (ii) Costs incurred to date.
    (iii) Estimated cost to completion.
    (iv) Revised estimate.
    (v) Amount of adjustment.
    (5) The factors responsible for the increase (e.g., error in 
estimate, changed conditions).
    (6) The latest date by which funds must be available for commitment 
to avoid contract slippage, work stoppage, or other program impairment.
    (b) When the contractor submits a notice of a projected overrun, the 
Contracting Officer shall--
    (1) Immediately advise the appropriate program office and furnish 
the office a copy of the notice and any other data received;
    (2) Request audit or cost advisory services, and technical support, 
as necessary, for evaluation of information and data received; and
    (3) Maintain continuous communications with the program office to 
obtain: a timely written decision and justification to continue the 
contract with additional funds (including verification of funds 
availability); or a timely written decision and request to terminate the 
contract.

[[Page 102]]

    (c) After receiving the decision by the program office, the 
Contracting Officer shall promptly notify the contractor in writing of 
the following:
    (1) The specified amount of additional funds allotted to the 
contract.
    (2) Work shall be discontinued when the allotted funds are 
exhausted, and any work performed after that date is at the contractor's 
risk.
    (3) The Government is considering whether to allot additional funds 
to the contract and will notify the contractor as soon as possible, but 
that any work performed after the currently allotted funds are exhausted 
is at the contractor's risk. (Timely, formal notification of the 
Government's intention is essential to preclude loss of contractual 
rights in the event of dispute, termination, or litigation.)
    (d) If the program office permits, the Contracting Officer shall 
refrain from issuing any contractual documents that require new work or 
an extension of time, pending resolution of the projected overrun.



Sec. 342.7102  Contract modifications.

    (a) Modifications to contracts containing the Limitation of Cost 
clause shall include either--
    (1) A provision which: Increases the estimated or ceiling amount in 
the Limitation of Cost clause of the contract; and states that such 
clause will thereafter apply to the increased amount; or
    (2) A provision stating that the estimated or ceiling amount in the 
Limitation of Cost clause is not changed by the modification.
    (b) The Contracting Officer shall not change a fixed-fee in a 
contract when funding a cost overrun. The Contracting Officer shall make 
changes in fixed-fee only to reflect changes in the SOW/PWS that justify 
an increase or decrease in fee.

[[Page 103]]

                     SUBCHAPTER H_CLAUSES AND FORMS

          PART 352_SOLICITATION PROVISIONS AND CONTRACT CLAUSES

       Subpart 352.1_Instructions for Using Provisions and Clauses

Sec.

Sec. 352.100 Scope of subpart.

Sec. 352.101-70 Application of provisions and clauses.

              Subpart 352.2_Texts of Provisions and Clauses


Sec. 352.201-70 Paperwork Reduction Act.

Sec. 352.202-1 Definitions.

Sec. 352.203-70 Anti-lobbying.

Sec. 352.215-1 Instructions to offerors--competitive acquisition.

Sec. 352.215-70 Late proposals and revisions.

Sec. 352.216-70 Additional cost principles.

Sec. 352.219-70 Mentor-prot[eacute]g[eacute] program.

Sec. 352.219-71 Mentor-prot[eacute]g[eacute] program reporting 
          requirements.

Sec. 352.222-70 Contractor cooperation in equal employment opportunity 
          investigations.

Sec. 352.223-70 Safety and health.

Sec. 352.224-70 Privacy Act.

Sec. 352.227-70 Publications and publicity.

Sec. 352.228-7 Insurance--liability to third persons.

Sec. 352.231-70 Salary rate limitation.

Sec. 352.231-71 Pricing of adjustments.

Sec. 352.233-70 Choice of law (overseas).

Sec. 352.233-71 Litigation and claims.

Sec. 352.234-1 Notice of earned value management system--pre-award 
          Integrated Baseline Review.

Sec. 352.234-2 Notice of earned value management system--post-award 
          Integrated Baseline Review.

Sec. 352.234-3 Full earned value management system.

Sec. 352.234-4 Partial earned value management system.

Sec. 352.237-70 Pro-Children Act.

Sec. 352.237-71 Crime Control Act--reporting of child abuse.

Sec. 352.237-72 Crime Control Act--requirement for background checks.

Sec. 352.239-70 Standard for security configurations.

Sec. 352.239-71 Standard for encryption language.

Sec. 352.239-72 Security requirements for Federal information technology 
          resources.

Sec. 352.239-73 Electronic information and technology accessibility.

Sec. 352.242-70 Key personnel.

Sec. 352.242-71 Tobacco-free facilities.

Sec. 352.242-72 Native American Graves Protections and Repatriation Act.

Sec. 352.242-73 Withholding of contract payments.

Sec. 352.242-74 Final decisions on audit findings.

Sec. 352.270-1 Accessibility of meetings, conferences, and seminars to 
          persons with disabilities.

Sec. 352.270-2 Indian preference.

Sec. 352.270-3 Indian preference program.

Sec. 352.270-4 Protection of human subjects.

Sec. 352.270-5 Care of laboratory animals.

Sec. 352.270-6 Restriction on use of human subjects.

Sec. 352.270-7 Conference sponsorship request and conference materials 
          disclaimer.

Sec. 352.270-8 Prostitution and related activities.

Sec. 352.270-9 Non-discrimination for conscience.

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

    Source: 74 FR 62398, Nov. 27, 2009, unless otherwise noted.

       Subpart 352.1_Instructions for Using Provisions and Clauses



Sec. 352.100  Scope of subpart.

    This subpart provides guidance for applying HHS provisions and 
clauses in solicitations, contracts, and orders.



Sec. 352.101-70  Application of provisions and clauses.

    (a) Unless otherwise qualified (e.g., by the type of contract 
contemplated, the nature of the requirement, or dollar amount) in a 
prescription for a solicitation provision or contract clause specified 
in Part 352 or elsewhere in the HHSAR, the term ``contract'' means--
    (1) An award, including modifications thereunder, that exceeds the 
simplified acquisition threshold, including a task order or delivery 
order, whether placed under a GSA FSS contract, an IDIQ contract, a 
GWAC, or a BPA, and a purchase order placed under the authority of FAR 
subpart 13.5); and
    (2) A bilateral award--i.e., when both the Contracting Officer and 
the contractor sign the award document, that exceeds the micro-purchase 
threshold but which does not exceed the simplified acquisition 
threshold.
    (b) When the term ``order'' is specified in a prescription for a 
solicitation provision or order clause, it means an order that exceeds 
the micro-purchase

[[Page 104]]

threshold but which does not exceed the simplified acquisition 
threshold, except those bilateral awards specified in (a)(2) above.
    (c) If a clause is included in the master instrument (e.g., in an 
IDIQ contract or a BPA), it is not necessary to also include the clause 
in a task order or delivery order thereunder.
    (d) When a dollar amount or dollar threshold is specified (e.g., $25 
million or simplified acquisition threshold), the dollar amount of the 
award (contract or order) includes any options thereunder.

              Subpart 352.2_Texts of Provisions and Clauses



Sec. 352.201-70  Paperwork Reduction Act.

    As prescribed in 301.106(b), the Contracting Officer shall insert 
the following clause:

                 Paperwork Reduction Act (January 2006)

    (a) This contract involves a requirement to collect or record 
information calling either for answers to identical questions from 10 or 
more persons other than Federal employees, or information from Federal 
employees which is outside the scope of their employment, for use by the 
Federal government or disclosure to third parties; therefore, the 
Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) shall apply to 
this contract. No plan, questionnaire, interview guide or other similar 
device for collecting information (whether repetitive or single time) 
may be used without the Office of Management and Budget (OMB) first 
providing clearance. Contractors and the Contracting Officer's Technical 
Representative shall be guided by the provisions of 5 CFR Part 1320, 
Controlling Paperwork Burdens on the Public, and seek the advice of the 
HHS operating division or Office of the Secretary Reports Clearance 
Officer to determine the procedures for acquiring OMB clearance.
    (b) The Contractor shall not expend any funds or begin any data 
collection until OMB Clearance is received. Once OMB Clearance is 
received from the Contracting Officer's Technical Representative, the 
Contracting Officer shall provide the Contractor with written 
notification authorizing the expenditure of funds and the collection of 
data. The Contractor shall allow at least 120 days for OMB clearance. 
The Contracting Officer will consider excessive delays caused by the 
Government which arise out of causes beyond the control and without the 
fault or negligence of the Contractor in accordance with the Excusable 
Delays or Default clause of this contract.

                             (End of clause)



Sec. 352.202-1  Definitions.

    As prescribed in FAR 2.201, the Contracting Officer shall insert the 
clause in FAR 52.202-1, Definitions, as revised by 302.201:

                       Definitions (January 2006)

    (a) In accordance with 52.202-1(a)(1), substitute the following as 
paragraph (a):

    ``(a) The term ``Secretary'' or ``Head of the Agency'' (also called 
``Agency Head'') means the Secretary, Deputy Secretary, or any Assistant 
Secretary, Administrator or Commissioner of the Department of Health and 
Human Services; and the term ``his/her duly authorized representative'' 
means any person, persons, or board authorized to act for the 
Secretary.''

    (b) In accordance with 52.202-1(a)(1), add the following paragraph 
(h):

    ``(h) The term ``Contracting Officer's Technical Representative'' 
means the person who monitors the technical aspects of contract 
performance. The Contracting Officer's Technical Representative is not 
authorized to issue any instructions or directions which cause any 
increase or decrease in the Statement of Work/Performance Work 
Statement/Specifications which would result in the increase or decrease 
in the price of this contract, or changes in the delivery schedule or 
period of performance of this contract. If applicable, the Contracting 
Officer's Technical Representative is not authorized to receive or act 
upon any notification or revised cost estimate provided by the 
Contractor in accordance with the Limitation of Cost or Limitation of 
Funds clauses of this contract.''



Sec. 352.203-70  Anti-lobbying.

    As prescribed in 303.808-70, the Contracting Officer shall insert 
the following clause:

                      Anti-Lobbying (January 2006)

    Pursuant to the current HHS annual appropriations act, except for 
normal and recognized executive-legislative relationships, the 
Contractor shall not use any HHS contract funds for (i) publicity or 
propaganda purposes; (ii) the preparation, distribution, or use of any 
kit, pamphlet, booklet, publication, radio, television or video 
presentation designed to support or defeat legislation pending before 
the Congress or any State

[[Page 105]]

legislature, except in presentation to the Congress or any State 
legislature itself; or (iii) payment of salary or expenses of the 
Contractor, or any agent acting for the Contractor, related to any 
activity designed to influence legislation or appropriations pending 
before the Congress or any State legislature.

                             (End of clause)



Sec. 352.215-1  Instructions to offerors--competitive acquisition.

    As prescribed in 315.209, the Contracting Officer shall insert the 
following paragraph (e) in the provision in FAR 52.215-1, Instructions 
to Offerors--Competitive Acquisition:

    (e) Restriction on disclosure and use of data.
    (1) The proposal submitted in response to this request may contain 
data (trade secrets; business data (e.g., commercial information, 
financial information, cost and pricing data); and technical data) which 
the offeror, including its prospective subcontractor(s), does not want 
used or disclosed for any purpose other than for evaluation of the 
proposal. The use and disclosure of any data may be so restricted; 
provided, that the Government determines that the data is not required 
to be disclosed under the Freedom of Information Act, 5 U.S.C. 552, as 
amended, and the offeror marks the cover sheet of the proposal with the 
following statements, specifying the particular portions of the proposal 
which are to be restricted:
    ``Unless disclosure is required by the Freedom of Information Act, 5 
U.S.C. 552, as amended, (the Act) as determined by Freedom of 
Information (FOI) officials of the Department of Health and Human 
Services (HHS), data contained in the portions of this proposal which 
the offeror has specifically identified by page number, paragraph, etc. 
as containing restricted information shall not be used or disclosed 
except for evaluation purposes.
    The offeror acknowledges that HHS may not be able to withhold a 
record (e.g., data, document, etc.) nor deny access to a record 
requested pursuant to the Act and that the HHS' FOI officials must make 
that determination. The offeror hereby agrees that the Government is not 
liable for disclosure if HHS has determined that disclosure is required 
by the Act.
    If a contract is awarded to the offeror as a result of, or in 
connection with, the submission of this proposal, the Government shall 
have the right to use or disclose the data to the extent provided in the 
contract. Proposals not resulting in a contract remain subject to the 
Act.
    The offeror also agrees that the Government is not liable for 
disclosure or use of unmarked data and may use or disclose the data for 
any purpose, including the release of the information pursuant to 
requests under the Act. The data subject to this restriction are 
contained in pages (insert page numbers, paragraph designations, etc. or 
other identification).''
    (2) In addition, the offeror must mark each page of data it wishes 
to restrict with the following statement
    ``Use or disclosure of data contained on this page is subject to the 
restriction on the cover sheet of this proposal or quotation.''
    (3) Offerors are cautioned that proposals submitted with restrictive 
statements or statements differing in substance from those cited above 
may not be considered for award. The Government reserves the right to 
reject any proposal submitted with nonconforming statement(s).



Sec. 352.215-70  Late proposals and revisions.

    As prescribed in 315.208, the Contracting Officer shall insert the 
following provision:

               Late Proposals and Revisions (January 2006)

    Notwithstanding the procedures contained in FAR 52.215-1(c)(3) of 
the provision of this solicitation entitled Instructions to Offerors--
Competitive Acquisition, the Government may consider a proposal received 
after the date specified for receipt if it appears to offer the best 
value to the Government and it was received before proposals were 
distributed for evaluation, or within 5 calendar days after the exact 
time specified for receipt, whichever is earlier.

                           (End of provision)



Sec. 352.216-70  Additional cost principles.

    As prescribed in 316.307(j), the Contracting Officer shall insert 
the following clause:

                Additional Cost Principles (January 2006)

    (a) Bid and proposal (B & P) costs. (1) B & P costs are the 
immediate costs of preparing bids, proposals, and applications for 
potential Federal and non-Federal contracts, grants, and agreements, 
including the development of scientific, cost, and other data needed to 
support the bids, proposals, and applications.
    (2) B & P costs of the current accounting period are allowable as 
indirect costs.
    (3) B & P costs of past accounting periods are unallowable in the 
current period. However, if the organization's established practice is 
to treat these costs by some other method, they may be accepted if they 
are found to be reasonable and equitable.

[[Page 106]]

    (4) B & P costs do not include independent research and development 
(IR & D) costs covered by the following paragraph, or pre-award costs 
covered by paragraph 36 of Attachment B to OMB Circular A-122.
    (b) IR & D costs. (1) IR & D is research and development conducted 
by an organization which is not sponsored by Federal or non-Federal 
contracts, grants, or other agreements.
    (2) IR & D shall be allocated its proportionate share of indirect 
costs on the same basis as the allocation of indirect costs to sponsored 
research and development.
    (3) The cost of IR & D, including its proportionate share of 
indirect costs, is unallowable.

                             (End of clause)



Sec. 352.219-70  Mentor-prot[eacute]g[eacute] program.

    As prescribed in 319.270-1(a), the Contracting Officer shall insert 
the following provision:

           Mentor-Prot[eacute]g[eacute] Program (January 2010)

    (a) Large business prime contractors serving as mentors in the HHS 
Mentor-Prot[eacute]g[eacute] program are eligible for HHS subcontracting 
plan credit, and shall submit a copy of their HHS Office of Small and 
Disadvantaged Business Utilization (OSDBU)-approved mentor 
prot[eacute]g[eacute] agreements as part of their offers. The amount of 
credit provided by the Contracting Officer to a mentor firm for 
prot[eacute]g[eacute] firm developmental assistance costs shall be 
calculated on a dollar for dollar basis and reported by the mentor firm 
in the Summary Subcontract Report via the Electronic Subcontracting 
Reporting System (eSRS) at http://www.esrs.gov. The mentor firm and 
prot[eacute]g[eacute] firm shall submit to the Contracting Officer a 
signed joint statement agreeing on the dollar value of the developmental 
assistance the mentor firm provided. (For example, a mentor firm would 
report a $10,000 subcontract awarded to a prot[eacute]g[eacute] firm and 
provision of $5,000 of developmental assistance as $15,000 of 
developmental assistance.) The mentor firm may use this additional 
credit towards attaining its subcontracting plan participation goal 
under this contract.
    (b) The program consists of--
    (1) Mentor firms--large businesses that: (i) demonstrate the 
interest, commitment, and capability to provide developmental assistance 
to small business prot[eacute]g[eacute] firms; and (ii) have a Mentor-
Prot[eacute]g[eacute] agreement approved by HHS' OSDBU;
    (2) Prot[eacute]g[eacute] firms--firms that: (i) seek developmental 
assistance; (ii) qualify as small businesses, veteran-owned small 
businesses, service-disabled veteran-owned small businesses, HUBZone 
small businesses, small disadvantaged businesses, or woman-owned 
businesses; and (iii) have a Mentor-Prot[eacute]g[eacute] agreement 
approved by HHS' OSDBU; and
    (3) Mentor-Prot[eacute]g[eacute] agreements--joint agreements, 
approved by HHS' OSDBU, which detail the specific terms, conditions, and 
responsibilities of the mentor-prot[eacute]g[eacute] relationship.

                           (End of provision)

[74 FR 62398, Nov. 27, 2009, as amended at 75 FR 21511, Apr. 26, 2010]



Sec. 352.219-71  Mentor-prot[eacute]g[eacute] program reporting 
          requirements.

    As prescribed in 319.270-1(b), the Contracting Officer shall insert 
the following clause:

  Mentor-Prot[eacute]g[eacute] Program Reporting Requirements (January 
                                  2010)

    The Contractor shall comply with all reporting requirements 
specified in its Mentor-Prot[eacute]g[eacute] agreement approved by HHS' 
OSDBU.

                             (End of clause)

[74 FR 62398, Nov. 27, 2009, as amended at 75 FR 21511, Apr. 26, 2010]



Sec. 352.222-70  Contractor cooperation in equal employment opportunity 
          investigations.

    As prescribed in 322.810(h), the Contracting Officer shall insert 
the following clause:

 Contractor Cooperation in Equal Employment Opportunity Investigations 
                             (January 2010)

    (a) In addition to complying with the clause in FAR 52.222-26, Equal 
Opportunity, the Contractor shall, in good faith, cooperate with the 
Department of Health and Human Services (Agency) in investigations of 
Equal Employment Opportunity (EEO) complaints processed pursuant to 29 
CFR Part 1614. For purposes of this clause, the following definitions 
apply:
    (1) ``Complaint'' means a formal or informal complaint that has been 
lodged with Agency management, Agency EEO officials, the Equal 
Employment Opportunity Commission (EEOC), or a court of competent 
jurisdiction.
    (2) ``Contractor employee'' means all current Contractor employees 
who work or worked under this contract. The term also includes current 
employees of subcontractors who work or worked under this contract. In 
the case of Contractor and subcontractor employees, who worked under 
this contract, but who are no longer employed by

[[Page 107]]

the Contractor or subcontractor, or who have been assigned to another 
entity within the Contractor's or subcontractor's organization, the 
Contractor shall provide the Agency with that employee's last known 
mailing address, e-mail address, and telephone number, if that employee 
has been identified as a witness in an EEO complaint or investigation.
    (3) ``Good faith cooperation'' cited in paragraph (a) includes, but 
is not limited to, making Contractor employees available for: (i) Formal 
and informal interviews by EEO counselors or other Agency officials 
processing EEO complaints; (ii) formal or informal interviews by EEO 
investigators charged with investigating complaints of unlawful 
discrimination filed by Federal employees; (iii) reviewing and signing 
appropriate affidavits or declarations summarizing statements provided 
by such Contractor employees during the course of EEO investigations; 
(iv) producing documents requested by EEO counselors, EEO investigators, 
Agency employees, or the EEOC in connection with a pending EEO 
complaint; and (v) preparing for and providing testimony in hearings 
before the EEOC and U.S. District Court.
    (b) The Contractor shall include the provisions of this clause in 
all subcontract solicitations and subcontracts awarded at any tier under 
this contract.
    (c) Failure on the part of the Contractor or its subcontractors to 
comply with the terms of this clause may be grounds for the Contracting 
Officer to terminate this contract for default.

                             (End of clause)

[74 FR 62398, Nov. 27, 2009, as amended at 75 FR 21511, Apr. 26, 2010]



Sec. 352.223-70  Safety and health.

    As prescribed in 323.7002, the Contracting Officer shall insert the 
following clause:

                    Safety and Health (January 2006)

    (a) To help ensure the protection of the life and health of all 
persons, and to help prevent damage to property, the Contractor shall 
comply with all Federal, State, and local laws and regulations 
applicable to the work being performed under this contract. These laws 
are implemented or enforced by the Environmental Protection Agency, 
Occupational Safety and Health Administration (OSHA) and other 
regulatory/enforcement agencies at the Federal, State, and local levels.
    (1) In addition, the Contractor shall comply with the following 
regulations when developing and implementing health and safety operating 
procedures and practices for both personnel and facilities involving the 
use or handling of hazardous materials and the conduct of research, 
development, or test projects:
    (i) 29 CFR 1910.1030, Bloodborne pathogens; 29 CFR 1910.1450, 
Occupational exposure to hazardous chemicals in laboratories; and other 
applicable occupational health and safety standards issued by OSHA and 
included in 29 CFR Part 1910. These regulations are available at http://
www.osha.gov.
    (ii) Nuclear Regulatory Commission Standards and Regulations, 
pursuant to the Energy Reorganization Act of 1974 (42 U.S.C. 5801 et 
seq.). The Contractor may obtain copies from the U.S. Nuclear Regulatory 
Commission, Washington, DC 20555-0001.
    (2) The following Government guidelines are recommended for 
developing and implementing health and safety operating procedures and 
practices for both personnel and facilities:
    (i) Biosafety in Microbiological and Biomedical Laboratories, CDC. 
This publication is available at http://www.cdc.gov/OD/ohs/biosfty/
bmbl4/bmbl4toc.htm.
    (ii) Prudent Practices for Safety in Laboratories (1995), National 
Research Council, National Academy Press, 500 Fifth Street, NW., Lockbox 
285, Washington, DC 20055 (ISBN 0-309-05229-7). This publication is 
available at http://www.nap.edu/catalog/4911.html.
    (b) Further, the Contractor shall take or cause to be taken 
additional safety measures as the Contracting Officer, in conjunction 
with the Contracting Officer's Technical Representative or other 
appropriate officials, determines to be reasonably necessary. If 
compliance with these additional safety measures results in an increase 
or decrease in the cost or time required for performance of any part of 
work under this contract, the Contracting Officer will make an equitable 
adjustment in accordance with the applicable ``Changes'' clause set 
forth in this contract.
    (c) The Contractor shall maintain an accurate record of, and 
promptly report to the Contracting Officer, all accidents or incidents 
resulting in the exposure of persons to toxic substances, hazardous 
materials or hazardous operations; the injury or death of any person; or 
damage to property incidental to work performed under the contract and 
all violations for which the Contractor has been cited by any Federal, 
State or local regulatory/enforcement agency. The report shall include a 
copy of the notice of violation and the findings of any inquiry or 
inspection, and an analysis addressing the impact these violations may 
have on the work remaining to be performed. The report shall also state 
the required action(s), if any, to be taken to correct any violation(s) 
noted by

[[Page 108]]

the Federal, State or local regulatory/enforcement agency and the time 
frame allowed by the agency to accomplish the necessary corrective 
action.
    (d) If the Contractor fails or refuses to comply with the Federal, 
State or local regulatory/enforcement agency's directive(s) regarding 
any violation(s) and prescribed corrective action(s), the Contracting 
Officer may issue an order stopping all or part of the work until 
satisfactory corrective action (as approved by the Federal, State or 
local regulatory/enforcement agencies) has been taken and documented to 
the Contracting Officer. No part of the time lost due to any stop work 
order shall be subject to a claim for extension of time or costs or 
damages by the Contractor.
    (e) The Contractor shall insert the substance of this clause in each 
subcontract involving toxic substances, hazardous materials, or 
hazardous operations. The Contractor is responsible for the compliance 
of its subcontractors with the provisions of this clause.

                             (End of clause)



Sec. 352.224-70  Privacy Act.

    As prescribed in 324.103(b)(2), the Contracting Officer shall insert 
the following clause:

                       Privacy Act (January 2006)

    This contract requires the Contractor to perform one or more of the 
following: (a) Design; (b) develop; or (c) operate a Federal agency 
system of records to accomplish an agency function in accordance with 
the Privacy Act of 1974 (Act) (5 U.S.C. 552a(m)(1)) and applicable 
agency regulations. The term ``system of records'' means a group of any 
records under the control of any agency from which information is 
retrieved by the name of the individual or by some identifying number, 
symbol, or other identifying particular assigned to the individual. 
Violations of the Act by the Contractor and/or its employees may result 
in the imposition of criminal penalties (5 U.S.C. 552a(i)). The 
Contractor shall ensure that each of its employees knows the prescribed 
rules of conduct and that each employee is aware that he/she is subject 
to criminal penalties for violation of the Act to the same extent as 
Department of Health and Human Services employees. These provisions also 
apply to all subcontracts the Contractor awards under this contract 
which require the design, development or operation of the designated 
system(s) of records [5 U.S.C. 552a(m)(1)]. The contract work statement: 
(a) identifies the system(s) of records and the design, development, or 
operation work the Contractor is to perform; and (b) specifies the 
disposition to be made of such records upon completion of contract 
performance.

                             (End of clause)



Sec. 352.227-70  Publications and publicity.

    As prescribed in 327.404-70, the Contracting Officer shall insert 
the following clause:

                Publications and Publicity (January 2006)

    (a) Unless otherwise specified in this contract, the Government 
encourages the Contractor to publish the results of its work under this 
contract. A copy of each article the Contractor submits for publication 
shall be promptly sent to the Contracting Officer's Technical 
Representative. The Contractor shall also inform the Contracting 
Officer's Technical Representative when the article or other publication 
is published, and furnish a copy of it as finally published.
    (b) Unless authorized by the Contracting Officer's Technical 
Representative, the Contractor shall not display the HHS logo on any 
publications.

                             (End of clause)



Sec. 352.228-7  Insurance--liability to third persons.

    As prescribed in 328.311-2, the Contracting Officer shall insert the 
following clause and either Alternate I or II, as appropriate:

            Insurance--Liability to Third Persons (Dec. 1991)

    (a)(1) Except as provided in paragraph (a)(2) immediately following, 
or in paragraph (h) of this clause [if the clause has a paragraph (h)], 
the Contractor shall provide and maintain workers' compensation, 
employer's liability, comprehensive general liability (bodily injury), 
comprehensive automobile liability (bodily injury and property damage) 
insurance, and such other insurance as the Contracting Officer may 
require under this contract.
    (2) The Contractor may, with the approval of the Contracting 
Officer, maintain a self-insurance program; provided that, with respect 
to workers' compensation, the Contractor is qualified pursuant to 
statutory authority.
    (3) All insurance required by this paragraph shall be in form and 
amount and for those periods as the Contracting Officer may require or 
approve and with insurers approved by the Contracting Officer.
    (b) The Contractor agrees to submit for the Contracting Officer's 
approval, to the extent and in the manner required by the Contracting 
Officer, any other insurance that is maintained by the Contractor in 
connection

[[Page 109]]

with performance of this contract and for which the Contractor seeks 
reimbursement.
    (c) Except as provided in paragraph (h) of this clause [if the 
clause has a paragraph (h)], the Contractor shall be reimbursed--
    (1) For that portion of the reasonable cost of insurance allocable 
to this contract, and required or approved under this clause; and
    (2) For certain liabilities (and expenses incidental to such 
liabilities) to third persons not compensated by insurance or otherwise 
within the funds available under the Limitation of Cost or the 
Limitation of Funds clause of this contract. These liabilities must 
arise out of the performance of this contract, whether or not caused by 
the negligence of the Contractor or the Contractor's agents, servants, 
or employees, and must be represented by final judgments or settlements 
approved in writing by the Government. These liabilities are for--
    (i) Loss of or damage to property (other than property owned, 
occupied, or used by the Contractor, rented to the Contractor, or in the 
care, custody, or control of the Contractor); or
    (ii) Death or bodily injury.
    (d) The Government's liability under paragraph (c) of this clause is 
limited to the amounts reflected in final judgments, or settlements 
approved in writing by the Government, but in no event to exceed the 
funds available under the Limitation of Cost or Limitation of Funds 
clause of this contract. Nothing in this contract shall be construed as 
implying that, at a later date, the Government will request, or the 
Congress will appropriate, funds sufficient to meet any deficiencies.
    (e) The Government shall not reimburse the Contractor for 
liabilities (and expenses incidental to such liabilities)--
    (1) For which the Contractor is otherwise responsible under the 
express terms of any clause specified in the Schedule or elsewhere in 
the contract;
    (2) For which the Contractor has failed to insure or to maintain 
insurance as required by the Contracting Officer; or
    (3) That result from willful misconduct or lack of good faith on the 
part of the Contractor's directors, officers, managers, superintendents, 
or other representatives who have supervision or direction of --
    (i) All or substantially all of the Contractor's business;
    (ii) All or substantially all of the Contractor's operations at any 
one plant or separate location in which this contract is being 
performed; or
    (iii) A separate and complete major industrial operation in 
connection with the performance of this contract.
    (f) The provisions of paragraph (e) of this clause shall not 
restrict the right of the Contractor to be reimbursed for the cost of 
insurance maintained by the Contractor in connection with the 
performance of this contract, other than insurance required in 
accordance with this clause; provided, that such cost is allowable under 
the Allowable Cost and Payment clause of this contract.
    (g) If any suit or action is filed or any claim is made against the 
Contractor, the cost and expense of which may be reimbursable to the 
Contractor under this contract, and the risk of which is then uninsured 
or is insured for less than the amount claimed, the Contractor shall--
    (1) Immediately notify the Contracting Officer and promptly furnish 
copies of all pertinent papers received;
    (2) Authorize Government representatives to collaborate with counsel 
for the insurance carrier in settling or defending the claim when the 
amount of the liability claimed exceeds the amount of coverage; and
    (3) Authorize Government representatives to settle or defend the 
claim and to represent the Contractor in or to take charge of any 
litigation, if required by the Government, when the liability is not 
insured or covered by the bond. The Contractor may, at its own expense, 
be associated with the Government representatives in any such claim or 
litigation.

                             (End of clause)

    Alternate I (APR 1984). If the successful offeror represents in its 
offer that it is partially immune from tort liability as a State agency, 
the Contracting Officer shall add the following paragraph (h) to the 
basic clause:

    (h) Notwithstanding paragraphs (a) and (c) of this clause--
    (1) The Government does not assume any liability to third persons, 
nor will the Government reimburse the Contractor for its liability to 
third persons, with respect to loss due to death, bodily injury, or 
damage to property resulting in any way from the performance of this 
contract or any subcontract under this contract; and
    (2) The Contractor need not provide or maintain insurance coverage 
as required by paragraph (a) of this clause; provided, that the 
Contractor may obtain any insurance coverage deemed necessary, subject 
to approval by the Contracting Officer as to form, amount, and duration. 
The Contractor shall be reimbursed for the cost of such insurance and, 
to the extent provided in paragraph (c) of this clause, for liabilities 
to third persons for which the Contractor has obtained insurance 
coverage as provided in this paragraph, but for which such coverage is 
insufficient in amount.

[[Page 110]]

                             (End of clause)

    Alternate II (APR 1984). If the successful offeror represents in its 
offer that it is totally immune from tort liability as a State agency, 
the Contracting Officer shall substitute the following paragraphs (a) 
and (b) for paragraphs (a) and (b) of the basic clause:

    (a) The Government does not assume any liability to third persons, 
nor will the Government reimburse the Contractor for its liability to 
third persons, with respect to loss due to death, bodily injury, or 
damage to property resulting in any way from the performance of this 
contract or any subcontract under this contract.
    (b) If any suit or action is filed, or if any claim is made against 
the Contractor, the cost and expense of which may be reimbursable to the 
Contractor under this contract, the Contractor shall immediately notify 
the Contracting Officer and promptly furnish copies of all pertinent 
papers received by the Contractor. The Contractor shall, if Government 
requires, authorize Government representatives to settle or defend the 
claim and to represent the Contractor in or take charge of any 
litigation. The Contractor may, at its own expense, be associated with 
the Government representatives in any such claims or litigation.

                             (End of clause)



Sec. 352.231-70  Salary rate limitation.

    As prescribed in 331.101-70, the Contracting Officer shall insert 
the following clause:

                  Salary Rate Limitation (January 2010)

    (a) Pursuant to the current and applicable prior HHS appropriations 
acts, the Contractor shall not use contract funds to pay the direct 
salary of an individual at a rate in excess of the Federal Executive 
Schedule Level I in effect on the date an expense is incurred.
    (b) For purposes of the salary rate limitation, the terms ``direct 
salary,'' ``salary,'' and ``institutional base salary'' have the same 
meaning and are collectively referred to as ``direct salary'' in this 
clause. An individual's direct salary is the annual compensation that 
the Contractor pays for an individual's direct effort (costs) under the 
contract. Direct salary excludes any income that an individual may be 
permitted to earn outside of duties to the Contractor. Direct salary 
also excludes fringe benefits, overhead, and general and administrative 
expenses (also referred to as indirect costs or facilities and 
administrative [F&A] costs).
    Note: The salary rate limitation does not restrict the salary that 
an organization may pay an individual working under an HHS contract or 
order; it merely limits the portion of that salary that may be paid with 
Federal funds.
    (c) The salary rate limitation also applies to individuals under 
subcontracts. If this is a multiple-year contract or order, it may be 
subject to unilateral modification by the Contracting Officer to ensure 
that an individual is not paid at a rate that exceeds the salary rate 
limitation provision established in the HHS appropriations act in effect 
when the expense is incurred regardless of the rate initially used to 
establish contract or order funding.
    (d) See the salaries and wages pay tables on the U.S. Office of 
Personnel Management Web site for Federal Executive Schedule salary 
levels that apply to the current and prior periods.

                             (End of clause)

[74 FR 62398, Nov. 27, 2009, as amended at 75 FR 21511, Apr. 26, 2010]



Sec. 352.231-71  Pricing of adjustments.

    As prescribed in 331.102-70, the Contracting Officer shall insert 
the following clause:

                  Pricing of Adjustments (January 2001)

    When costs are a factor in determination of a contract price 
adjustment pursuant to the ``Changes'' clause or any provision of this 
contract, the applicable cost principles and procedures set forth below 
shall form the basis for determining such costs:

------------------------------------------------------------------------
               Principles                     Types of organizations
------------------------------------------------------------------------
(a) Subpart 31.2 of the Federal          Commercial.
 Acquisition Regulation.
(b) Subpart 31.3 of the Federal          Educational.
 Acquisition Regulation.
(c) Subpart 31.6 of the Federal          State, local, and Federally
 Acquisition Regulation.                  recognized
                                         Indian Tribal governments.
(d) 45 CFR Part 74 Appendix E..........  Hospitals (performing research
                                          and development contracts
                                          only).
(e) Subpart 31.7 of the Federal          Other nonprofit organizations.
 Acquisition Regulation.
------------------------------------------------------------------------


[[Page 111]]

                             (End of clause)



Sec. 352.233-70  Choice of law (overseas).

    As prescribed in 333.215-70(a), the Contracting Officer shall insert 
the following clause:

                 Choice of Law (Overseas) (January 2010)

    This contract shall be construed in accordance with the substantive 
laws of the United States of America. By the execution of this contract, 
the Contractor expressly agrees to waive any rights to invoke the 
jurisdiction of local national courts where this contract is performed 
and agrees to accept the exclusive jurisdiction of the Civilian Board of 
Contract Appeals and the United States Court of Federal Claims for 
hearing and determination of any and all disputes that may arise under 
the Disputes clause of this contract.

                             (End of clause)

[74 FR 62398, Nov. 27, 2009, as amended at 75 FR 21511, Apr. 26, 2010]



Sec. 352.233-71  Litigation and claims.

    As prescribed in 333.215-70(b), the Contracting Officer shall insert 
the following clause:

                  Litigation and Claims (January 2006)

    (a) The Contractor shall provide written notification immediately to 
the Contracting Officer of any action, including any proceeding before 
an administrative agency, filed against the Contractor arising out of 
the performance of this contract, including, but not limited to the 
performance of any subcontract hereunder; and any claim against the 
Contractor the cost and expense of which is allowable under the clause 
entitled ``Allowable Cost and Payment.''
    (b) Except as otherwise directed by the Contracting Officer, the 
Contractor shall furnish immediately to the Contracting Officer copies 
of all pertinent papers received by the Contractor with respect to such 
action or claim. To the extent not in conflict with any applicable 
policy of insurance, the Contractor may, with the Contracting Officer's 
approval, settle any such action or claim. If required by the 
Contracting Officer, the Contractor shall effect an assignment and 
subrogation in favor of the Government of all the Contractor's rights 
and claims (except those against the Government) arising out of any such 
action or claim against the Contractor; and authorize representatives of 
the Government to settle or defend any such action or claim and to 
represent the Contractor in, or to take charge of, any action.
    (c) If the Government undertakes a settlement or defense of an 
action or claim, the Contractor shall furnish all reasonable assistance 
in effecting a settlement or asserting a defense. Where an action 
against the Contractor is not covered by a policy of insurance, the 
Contractor shall, with the approval of the Contracting Officer, proceed 
with the defense of the action in good faith. The Government shall not 
be liable for the expense of defending any action or for any costs 
resulting from the loss thereof to the extent that the Contractor would 
have been compensated by insurance which was required by law or 
regulation or by written direction of the Contracting Officer, but which 
the Contractor failed to secure through its own fault or negligence. In 
any event, unless otherwise expressly provided in this contract, the 
Government shall not reimburse or indemnify the Contractor for any 
liability loss, cost, or expense, which the Contractor may incur or be 
subject to by reason of any loss, injury or damage, to the person or to 
real or personal property of any third parties as may accrue during, or 
arise from, the performance of this contract.

                             (End of clause)



Sec. 352.234-1  Notice of earned value management system--pre-award 
          Integrated Baseline Review.

    As prescribed in 334.203-70(a), the Contracting Officer shall insert 
the following provision:

Notice of Earned Value Management System--Pre-Award Integrated Baseline 
                          Review (October 2008)

    The offeror shall provide documentation that its proposed Earned 
Value Management System (EVMS) complies with the EVMS guidelines in 
ANSI/EIA Standard-748 (current version at time of solicitation).
    (a) If the offeror proposes to use a system that currently does not 
meet the requirements of paragraph (a) of this provision, the offeror 
shall submit a comprehensive plan for compliance with the guidelines.
    (1) The plan shall--
    (i) Describe the EVMS the offeror intends to use in performance of 
the contract;
    (ii) Distinguish between the offeror's existing management system 
and modifications proposed to meet the guidelines;
    (iii) Describe the management system and its application in terms of 
the EVMS guidelines;
    (iv) Describe the proposed procedure for application of the EVMS 
requirements to subcontractors;
    (v) Provide documentation describing the process and results, 
including Government participation if applicable, of any third-party 
evaluation or self-evaluation of the

[[Page 112]]

system's compliance with the EVMS guidelines; and
    (vi) Provide a schedule of events leading up to formal validation 
and Government acceptance of the offeror's EVMS, if the value of the 
offeror's proposal, including options, is $25 million or more.
    (2) The offeror shall provide information and assistance, as 
required by the Contracting Officer, to support review of the plan.
    (3) The Contracting Officer will review the offeror's EVMS 
implementation plan prior to contract award.
    (4) The offeror's EVMS plan must provide milestones indicating when 
the offeror anticipates that the EVMS will be compliant with the ANSI/
EIS Standard-748 guidelines.
    (b) The offeror shall identify in its offer the subcontractors, or 
subcontracted effort if subcontractors have not been identified, to 
which the requirements of EVMS will be applied. Prior to contract award, 
the offeror and HHS shall agree on the subcontractors, or subcontracted 
effort, subject to the EVMS requirement.
    (c) HHS will conduct an Integrated Baseline Review (IBR) prior to 
contract award. The offeror shall be compensated as set forth elsewhere 
in this solicitation for its preparation for and participation in the 
IBR.

                           (End of provision)



Sec. 352.234-2  Notice of earned value management system--post-award 
          Integrated Baseline Review.

    As prescribed in 334.203-70(b), the Contracting Officer shall insert 
the following provision:

Notice of Earned Value Management System--Post-Award Integrated Baseline 
                          Review (October 2008)

    (a) The offeror shall provide documentation that its proposed Earned 
Value Management System (EVMS) complies with the EVMS guidelines in 
ANSI/EIA Standard-748 (current version in effect at time of 
solicitation).
    (b) If the offeror proposes to use a system that currently does not 
meet the requirements of paragraph (a) of this provision, the offeror 
shall submit a comprehensive plan for compliance with the guidelines.
    (1) The plan shall--
    (i) Describe the EVMS the offeror intends to use in performance of 
the contract;
    (ii) Distinguish between the offeror's existing management system 
and modifications proposed to meet the guidelines;
    (iii) Describe the management system and its application in terms of 
the EVMS guidelines;
    (iv) Describe the proposed procedure for application of the EVMS 
requirements to subcontractors;
    (v) Provide documentation describing the process and results, 
including Government participation if applicable, of any third-party 
evaluation or self-evaluation of the system's compliance with the EVMS 
guidelines; and
    (vi) Provide a schedule of events leading up to formal validation 
and Government acceptance of the offeror's EVMS, if the value of the 
offeror's proposal, including options, is $25 million or more.
    (2) The offeror shall provide information and assistance, as 
required by the Contracting Officer, to support review of the plan.
    (3) The Contracting Officer will review the offeror's EVMS 
implementation plan prior to contract award.
    (4) The offeror's EVMS plan must provide milestones indicating when 
the offeror anticipates that the EVM system will be compliant with the 
ANSI/EIA Standard-748 guidelines.
    (c) The offeror shall identify in its offer the subcontractors, or 
subcontracted effort if subcontractors have not been identified, to 
which the requirements of EVMS will be applied. Prior to contract award, 
the offeror and HHS shall agree on the subcontractors, or subcontracted 
effort, subject to the EVMS requirement.
    (d) HHS will conduct an Integrated Baseline Review after contract 
award.

                           (End of provision)



Sec. 352.234-3  Full earned value management system.

    As prescribed in 334.203-70(c), the Contracting Officer shall insert 
the following clause:

           Full Earned Value Management System (October 2008)

    (a) The Contractor shall use an Earned Value Management System 
(EVMS) that has been validated and accepted by the Cognizant Federal 
Agency (CFA) as being compliant with the guidelines in ANSI/EIA 
Standard-748 (current version at the time of award) to manage this 
contract. If the Contractor's current EVMS has not been validated and 
accepted by the CFA at the time of award, see paragraph (b) of this 
clause. The Contractor shall submit EVM reports in accordance with the 
requirements of this contract.
    (b) If, at the time of award, the Contractor's EVM system has not 
been validated and accepted by the CFA as complying with EVMS guidelines 
in ANSI/EIA Standard-748 (current version at time of award), the 
Contractor shall--

[[Page 113]]

    (1) Apply the current system to the contract; and
    (2) Take necessary and timely actions to meet the milestones in the 
Contractor's EVMS plan approved by the Contracting Officer.
    (c) HHS requires the Contractor to obtain validation and acceptance 
of its EVM system by the CFA during the base period of performance of 
this contract. The Contracting Officer or designee will conduct a 
Compliance Review to assess the Contractor's compliance with its 
approved plan. If the Contractor does not follow the approved 
implementation schedule or correct all resulting system deficiencies 
noted during the Compliance Review within a reasonable time, the 
Contracting Officer may take remedial action, which may include, but is 
not limited to, suspension of or reduction in progress payments, or a 
reduction in fee.
    (d) HHS will conduct an Integrated Baseline Review (IBR). If a pre-
award IBR has not been conducted, a post-award IBR will be conducted by 
HHS as early as practicable, but no later than 90 days after contract 
award. The Contracting Officer may also require an IBR as part of the 
exercise of an option or the incorporation of a major modification.
    (e) Unless a waiver is granted by the CFA, Contractor-proposed EVMS 
changes require approval of the CFA prior to implementation. The CFA 
will advise the Contractor of the acceptability of such changes within 
30 calendar days after receipt of the notice of proposed changes from 
the Contractor. If the advance approval requirements are waived by the 
CFA, the Contractor shall disclose EVMS changes to the CFA at least 14 
calendar days prior to the effective date of implementation.
    (f) The Contractor shall provide access to all pertinent records and 
data requested by the Contracting Officer or a duly authorized 
representative as necessary to permit Government surveillance to ensure 
that the EVMS conforms, and continues to conform, with the requirements 
referenced in paragraph (a) of this clause.
    (g) The Contractor shall require the subcontractors specified below 
to comply with the requirements of the clause: (Insert list of 
applicable subcontractors.)
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________

                             (End of clause)

                      (Alternate I) (October 2008)

    As prescribed in 334.203-70(c), the Contracting Officer shall 
substitute the following paragraphs (a), (b), and (c) for paragraphs 
(a), (b), and (c) of the basic clause and delete paragraph (e) of the 
basic clause:

    (a) The Contractor shall use an Earned Value Management System 
(EVMS) that is compliant with the guidelines in ANSI/EIA Standard-748 
(current version at the time of award) to manage this contract. If the 
Contractor's current EVMS is not compliant at the time of award, see 
paragraph (b) of this clause. The Contractor shall submit EVM reports in 
accordance with the requirements of this contract.
    (b) If, at the time of award, the Contractor's EVM system is not in 
compliance with the EVMS guidelines in ANSI/EIA Standard-748 (current 
version at time of award), the Contractor shall--
    (1) Apply the current system to the contract; and
    (2) Take necessary and timely actions to meet the milestones in the 
Contractor's EVMS plan approved by the Contracting Officer.
    (c) HHS will not formally validate or accept the Contractor's EVMS 
with respect to this contract. The use of the Contractor's EVMS for this 
contract does not imply HHS acceptance of the Contractor's EVMS for 
application to future contracts. The Contracting Officer or designee 
will conduct a Compliance Review to assess the Contractor's compliance 
with its approved plan. If the Contractor does not follow the approved 
implementation schedule or correct all resulting system deficiencies 
noted during the Compliance Review within a reasonable time, the 
Contracting Officer may take remedial action that may include, but is 
not limited to, suspension of or reduction in progress payments, or a 
reduction in fee.



Sec. 352.234-4  Partial earned value management system.

    As prescribed in 334.203-70(d), the Contracting Officer shall insert 
the following clause:

          Partial Earned Value Management System (October 2008)

    (a) The Contractor shall use an Earned Value Management System 
(EVMS) that has been validated and accepted by the Cognizant Federal 
Agency (CFA) as being compliant with the schedule-related guidelines in 
ANSI/EIA Standard-748 (current version at the time of award) to manage 
this contract. If the Contractor's current EVMS has not been validated 
and accepted by the CFA at the time of award, see paragraph (b) of this 
clause. The Contractor shall submit EVM reports in accordance with the 
requirements of this contract.
    (b) If, at the time of award, the Contractor's EVM system has not 
been validated and accepted by the CFA as complying with the

[[Page 114]]

schedule-related EVMS guidelines in ANSI/EIA Standard-748 (current 
version at time of award), the Contractor shall--
    (1) Apply the current system to the contract; and
    (2) Take necessary and timely actions to meet the milestones in the 
Contractor's EVMS plan approved by the Contracting Officer.
    (c) HHS requires the Contractor to obtain validation and acceptance 
of the schedule-related portions of its EVM system by the CFA during the 
base period of performance of this contract. The Contracting Officer or 
designee will conduct a Compliance Review to assess the Contractor's 
compliance with its approved plan. If the Contractor does not follow the 
approved implementation schedule or correct all resulting system 
deficiencies noted during the Compliance Review within a reasonable 
time, the Contracting Officer may take remedial action, which may 
include, but is not limited to, suspension of or reduction in progress 
payments, or a reduction in fee.
    (d) HHS will conduct an Integrated Baseline Review (IBR). If a pre-
award IBR has not been conducted, a post-award IBR will be conducted by 
HHS as early as practicable, but no later than 90 days after contract 
award. The Contracting Officer may also require an IBR as part of the 
exercise of an option or the incorporation of a major modification.
    (e) Unless a waiver is granted by the CFA, Contractor-proposed EVMS 
changes require approval of the CFA prior to implementation. The CFA 
will advise the Contractor of the acceptability of such changes within 
30 calendar days after receipt of the notice of proposed changes from 
the Contractor. If the advance approval requirements are waived by the 
CFA, the Contractor shall disclose EVMS changes to the CFA at least 14 
calendar days prior to the effective date of implementation.
    (f) The Contractor shall provide access to all pertinent records and 
data requested by the Contracting Officer or a duly authorized 
representative as necessary to permit Government surveillance to ensure 
that the EVMS conforms, and continues to conform, with the requirements 
referenced in paragraph (a) of this clause.
    (g) The Contractor shall require the subcontractors specified below 
to comply with the requirements of the clause: (Insert list of 
applicable subcontractors.)
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________

                             (End of clause)

                      (Alternate I) (October 2008)

    As prescribed in 334.203-70(d), the Contracting Officer shall 
substitute the following paragraphs (a), (b), and (c) for paragraphs 
(a), (b), and (c) of the basic clause and delete paragraph (e) of the 
basic clause:

    (a) The Contractor shall use an Earned Value Management System 
(EVMS) that is compliant with the schedule-related guidelines in ANSI/
EIA Standard-748 (current version at the time of award) to manage this 
contract. If the Contractor's current EVMS is not compliant at the time 
of award, see paragraph (b) of this clause. The Contractor shall submit 
EVM reports in accordance with the requirements of this contract.
    (b) If, at the time of award, the Contractor's schedule-related EVM 
system is not in compliance with the schedule-related EVMS guidelines in 
ANSI/EIA Standard-748 (current version at time of award), or the 
Contractor does not have an existing schedule control system that is 
compliant with such guidelines, the Contractor shall--
    (1) Apply the current system to the contract; and
    (2) Take necessary and timely actions to meet the milestones in the 
Contractor's EVMS plan approved by the Contracting Officer.
    (c) HHS will not formally validate or accept the Contractor's 
schedule-related EVMS with respect to this contract. The use of the 
Contractor's EVMS for this contract does not imply HHS acceptance of the 
Contractor's EVMS for application to future contracts. The Contracting 
Officer or designee will conduct a Compliance Review to assess the 
Contractor's compliance with its approved plan. If the Contractor does 
not follow the approved implementation schedule or correct all resulting 
system deficiencies noted during the Compliance Review within a 
reasonable time, the Contracting Officer may take remedial action that 
may include, but is not limited to, suspension of or reduction in 
progress payments, or a reduction in fee.



Sec. 352.237-70  Pro-Children Act.

    As prescribed in 337.103-70(a), the Contracting Officer shall insert 
the following clause:

                     Pro-Children Act (January 2006)

    (a) Public Law 103-227, Title X, Part C, also known as the Pro-
Children Act of 1994 (Act), 20 U.S.C. 7183, imposes restrictions on 
smoking in facilities where certain Federally funded children's services 
are provided. The

[[Page 115]]

Act prohibits smoking within any indoor facility (or portion thereof), 
whether owned, leased, or contracted for, that is used for the routine 
or regular provision of (i) kindergarten, elementary, or secondary 
education or library services or (ii) health or day care services that 
are provided to children under the age of 18. The statutory prohibition 
also applies to indoor facilities that are constructed, operated, or 
maintained with Federal funds.
    (b) By acceptance of this contract or order, the Contractor agrees 
to comply with the requirements of the Act. The Act also applies to all 
subcontracts awarded under this contract for the specified children's 
services. Accordingly, the Contractor shall ensure that each of its 
employees, and any subcontractor staff, is made aware of, understand, 
and comply with the provisions of the Act. Failure to comply with the 
Act may result in the imposition of a civil monetary penalty in an 
amount not to exceed $1,000 for each violation and/or the imposition of 
an administrative compliance order on the responsible entity. Each day a 
violation continues constitutes a separate violation.

                             (End of clause)



Sec. 352.237-71  Crime Control Act--reporting of child abuse.

    As prescribed in 337.103-70(b), the Contracting Officer shall insert 
the following clause:

   Crime Control Act of 1990--Reporting of Child Abuse (January 2006)

    (a) Public Law 101-647, also known as the Crime Control Act of 1990 
(Act), imposes responsibilities on certain individuals who, while 
engaged in a professional capacity or activity, as defined in the Act, 
on Federal land or in a Federally-operated (or contracted) facility, 
learn of facts that give the individual reason to suspect that a child 
has suffered an incident of child abuse.
    (b) The Act designates ``covered professionals'' as those persons 
engaged in professions and activities in eight different categories 
including, but not limited to, physicians, dentists, medical residents 
or interns, hospital personnel and administrators, nurses, health care 
practitioners, chiropractors, osteopaths, pharmacists, optometrists, 
podiatrists, emergency medical technicians, ambulance drivers, alcohol 
or drug treatment personnel, psychologists, psychiatrists, mental health 
professionals, child care workers and administrators, and commercial 
film and photo processors. The Act defines the term ``child abuse'' as 
the physical or mental injury, sexual abuse or exploitation, or 
negligent treatment of a child.
    (c) Accordingly, any person engaged in a covered profession or 
activity under an HHS contract or subcontract, regardless of the purpose 
of the contract or subcontract, shall immediately report a suspected 
child abuse incident in accordance with the provisions of the Act. If a 
child is suspected of being harmed, the appropriate State Child Abuse 
Hotline, local child protective services (CPS), or law enforcement 
agency shall be contacted. For more information about where and how to 
file a report, the Childhelp USA, National Child Abuse Hotline (1-800-4-
A-CHILD) shall be called. Any covered professional failing to make a 
timely report of such incident shall be guilty of a Class B misdemeanor.
    (d) By acceptance of this contract or order, the Contractor agrees 
to comply with the requirements of the Act. The Act also applies to all 
applicable subcontracts awarded under this contract. Accordingly, the 
Contractor shall ensure that each of its employees, and any 
subcontractor staff, is made aware of, understand, and comply with the 
provisions of the Act.

                             (End of clause)



Sec. 352.237-72  Crime Control Act--requirement for background checks.

    As prescribed in 337.103-70(c), the Contracting Officer shall insert 
the following clause:

 Crime Control Act of 1990--Requirement for Background Checks (January 
                                  2006)

    (a) Public Law 101-647, also known as the Crime Control Act of 1990 
(Act), requires that all individuals involved with the provision of 
child care services to children under the age of 18 undergo a criminal 
background check. ``Child care services'' include, but are not limited 
to, social services, health and mental health care, child (day) care, 
education (whether or not directly involved in teaching), and 
rehabilitative programs. Any conviction for a sex crime, an offense 
involving a child victim, or a drug felony, may be grounds for denying 
employment or for dismissal of an employee providing any of the services 
listed above.
    (b) The Contracting Officer will provide the necessary information 
to the Contractor regarding the process for obtaining the background 
check. The Contractor may hire a staff person provisionally prior to the 
completion of a background check, if at all times prior to the receipt 
of the background check during which children are in the care of the 
newly-hired person, the person is within the sight and under the 
supervision of a previously investigated staff person.
    (c) By acceptance of this contract or order, the Contractor agrees 
to comply with the requirements of the Act. The Act also applies to all 
applicable subcontracts awarded under this contract. Accordingly, the 
Contractor

[[Page 116]]

shall ensure that each of its employees, and any subcontractor staff, is 
made aware of, understand, and comply with the provisions of the Act.

                             (End of clause)



Sec. 352.239-70  Standard for security configurations.

    As prescribed in 339.101(d)(1), the Contracting Officer shall insert 
the following clause:

           Standard for Security Configurations (January 2010)

    (a) The Contractor shall configure its computers that contain HHS 
data with the applicable Federal Desktop Core Configuration (FDCC) (see 
http://nvd.nist.gov/fdcc/index.cfm) and ensure that its computers have 
and maintain the latest operating system patch level and anti-virus 
software level.
    Note: FDCC is applicable to all computing systems using Windows 
XPTM and Windows VistaTM, including desktops and 
laptops--regardless of function--but not including servers.
    (b) The Contractor shall apply approved security configurations to 
information technology (IT) that is used to process information on 
behalf of HHS. The following security configuration requirements apply:
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
    Note: The Contracting Officer shall specify applicable security 
configuration requirements in solicitations and contracts based on 
information provided by the Project Officer, who shall consult with the 
OPDIV/STAFFDIV Chief Information Security Officer.
    (c) The Contractor shall ensure IT applications operated on behalf 
of HHS are fully functional and operate correctly on systems configured 
in accordance with the above configuration requirements. The Contractor 
shall use Security Content Automation Protocol (SCAP)-validated tools 
with FDCC Scanner capability to ensure its products operate correctly 
with FDCC configurations and do not alter FDCC settings--see http://
nvd.nist.gov/validation.cfm. The Contractor shall test applicable 
product versions with all relevant and current updates and patches 
installed. The Contractor shall ensure currently supported versions of 
information technology products meet the latest FDCC major version and 
subsequent major versions.
    (d) The Contractor shall ensure IT applications designed for end 
users run in the standard user context without requiring elevated 
administrative privileges.
    (e) The Contractor shall ensure hardware and software installation, 
operation, maintenance, update, and patching will not alter the 
configuration settings or requirements specified above.
    (f) The Contractor shall (1) include Federal Information Processing 
Standard (FIPS) 201-compliant (see http://csrc.nist.gov/publications/
fips/fips201-1/FIPS-201-1-chng1.pdf), Homeland Security Presidential 
Directive 12 (HSPD-12) card readers with the purchase of servers, 
desktops, and laptops; and (2) comply with FAR Subpart 4.13, Personal 
Identity Verification.
    (g) The Contractor shall ensure that its subcontractors (at all 
tiers) which perform work under this contract comply with the 
requirements contained in this clause.

                             (End of clause)

[74 FR 62398, Nov. 27, 2009, as amended at 75 FR 21511, Apr. 26, 2010]



Sec. 352.239-71  Standard for encryption language.

    As prescribed in 339.101(d)(2), the Contracting Officer shall insert 
the following clause:

             Standard for Encryption Language (January 2010)

    (a) The Contractor shall use Federal Information Processing Standard 
(FIPS) 140-2-compliant encryption (Security Requirements for 
Cryptographic Module, as amended) to protect all instances of HHS 
sensitive information during storage and transmission. (Note: The 
Government has determined that HHS information under this contract is 
considered ``sensitive'' in accordance with FIPS 199, Standards for 
Security Categorization of Federal Information and Information Systems, 
dated February 2004.)
    (b) The Contractor shall verify that the selected encryption product 
has been validated under the Cryptographic Module Validation Program 
(see http://csrc.nist.gov/cryptval/) to confirm compliance with FIPS 
140-2 (as amended). The Contractor shall provide a written copy of the 
validation documentation to the Contracting Officer and the Contracting 
Officer's Technical Representative.
    (c) The Contractor shall use the Key Management Key (see FIPS 201, 
Chapter 4, as amended) on the HHS personal identification verification 
(PIV) card; or alternatively, the Contractor shall establish and use a 
key recovery mechanism to ensure the ability for authorized personnel to 
decrypt and recover all encrypted information (see http://csrc.nist.gov/
drivers/documents/ombencryption-guidance.pdf). The Contractor shall 
notify the Contracting Officer and the Contracting Officer's Technical 
Representative of personnel authorized to decrypt and recover all 
encrypted information.

[[Page 117]]

    (d) The Contractor shall securely generate and manage encryption 
keys to prevent unauthorized decryption of information in accordance 
with FIPS 140-2 (as amended).
    (e) The Contractor shall ensure that this standard is incorporated 
into the Contractor's property management/control system or establish a 
separate procedure to account for all laptop computers, desktop 
computers, and other mobile devices and portable media that store or 
process sensitive HHS information.
    (f) The Contractor shall ensure that its subcontractors (at all 
tiers) which perform work under this contract comply with the 
requirements contained in this clause.

                             (End of clause)

[74 FR 62398, Nov. 27, 2009, as amended at 75 FR 21511, Apr. 26, 2010]



Sec. 352.239-72  Security requirements for Federal information 
          technology resources.

    As prescribed in 339.7103, the Contracting Officer shall insert the 
following clause:

   Security Requirements for Federal Information Technology Resources 
                             (January 2010)

    (a) Applicability. This clause applies whether the entire contract 
or order (hereafter ``contract''), or portion thereof, includes 
information technology resources or services in which the Contractor has 
physical or logical (electronic) access to, or operates a Department of 
Health and Human Services (HHS) system containing, information that 
directly supports HHS' mission. The term ``information technology 
(IT)'', as used in this clause, includes computers, ancillary equipment 
(including imaging peripherals, input, output, and storage devices 
necessary for security and surveillance), peripheral equipment designed 
to be controlled by the central processing unit of a computer, software, 
firmware and similar procedures, services (including support services) 
and related resources. This clause does not apply to national security 
systems as defined in FISMA.
    (b) Contractor responsibilities. The Contractor is responsible for 
the following:
    (1) Protecting Federal information and Federal information systems 
in order to ensure their--
    (i) Integrity, which means guarding against improper information 
modification or destruction, and includes ensuring information non-
repudiation and authenticity;
    (ii) Confidentiality, which means preserving authorized restrictions 
on access and disclosure, including means for protecting personal 
privacy and proprietary information; and.
    (iii) Availability, which means ensuring timely and reliable access 
to and use of information.
    (2) Providing security of any Contractor systems, and information 
contained therein, connected to an HHS network or operated by the 
Contractor, regardless of location, on behalf of HHS.
    (3) Adopting, and implementing, at a minimum, the policies, 
procedures, controls, and standards of the HHS Information Security 
Program to ensure the integrity, confidentiality, and availability of 
Federal information and Federal information systems for which the 
Contractor is responsible under this contract or to which it may 
otherwise have access under this contract. The HHS Information Security 
Program is outlined in the HHS Information Security Program Policy, 
which is available on the HHS Office of the Chief Information Officer's 
(OCIO) Web site.
    (c) Contractor security deliverables. In accordance with the 
timeframes specified, the Contractor shall prepare and submit the 
following security documents to the Contracting Officer for review, 
comment, and acceptance:
    (1) IT Security Plan (IT-SP)--due within 30 days after contract 
award. The IT-SP shall be consistent with, and further detail the 
approach to, IT security contained in the Contractor's bid or proposal 
that resulted in the award of this contract. The IT-SP shall describe 
the processes and procedures that the Contractor will follow to ensure 
appropriate security of IT resources that are developed, processed, or 
used under this contract. If the IT-SP only applies to a portion of the 
contract, the Contractor shall specify those parts of the contract to 
which the IT-SP applies.
    (i) The Contractor's IT-SP shall comply with applicable Federal laws 
that include, but are not limited to, the Federal Information Security 
Management Act (FISMA) of 2002 (Title III of the E-Government Act of 
2002, Public Law 107-347), and the following Federal and HHS policies 
and procedures:
    (A) Office of Management and Budget (OMB) Circular A-130, Management 
of Federal Information Resources, Appendix III, Security of Federal 
Automated Information Resources.
    (B) National Institute of Standards and Technology (NIST) Special 
Publication (SP) 800-18, Guide for Developing Security Plans for Federal 
Information Systems, in form and content, and with any pertinent 
contract Statement of Work/Performance Work Statement (SOW/PWS) 
requirements. The IT-SP shall identify and document appropriate IT 
security controls consistent with the sensitivity of the information and 
the requirements of Federal Information Processing Standard (FIPS) 200, 
Recommended Security Controls for Federal Information

[[Page 118]]

Systems. The Contractor shall review and update the IT-SP in accordance 
with NIST SP 800-26, Security Self-Assessment Guide for Information 
Technology Systems and FIPS 200, on an annual basis.
    (C) HHS-OCIO Information Systems Security and Privacy Policy.
    (ii) After resolution of any comments provided by the Government on 
the draft IT-SP, the Contracting Officer shall accept the IT-SP and 
incorporate the Contractor's final version into the contract for 
Contractor implementation and maintenance. On an annual basis, the 
Contractor shall provide to the Contracting Officer verification that 
the IT-SP remains valid.
    (2) IT Risk Assessment (IT-RA)--due within 30 days after contract 
award. The IT-RA shall be consistent, in form and content, with NIST SP 
800-30, Risk Management Guide for Information Technology Systems, and 
any additions or augmentations described in the HHS-OCIO Information 
Systems Security and Privacy Policy. After resolution of any comments 
provided by the Government on the draft IT-RA, the Contracting Officer 
shall accept the IT-RA and incorporate the Contractor's final version 
into the contract for Contractor implementation and maintenance. The 
Contractor shall update the IT-RA on an annual basis.
    (3) FIPS 199 Standards for Security Categorization of Federal 
Information and Information Systems Assessment (FIPS 199 Assessment)--
due within 30 days after contract award. The FIPS 199 Assessment shall 
be consistent with the cited NIST standard. After resolution of any 
comments by the Government on the draft FIPS 199 Assessment, the 
Contracting Officer shall accept the FIPS 199 Assessment and incorporate 
the Contractor's final version into the contract.
    (4) IT Security Certification and Accreditation (IT-SC&A)--due 
within 3 months after contract award. The Contractor shall submit 
written proof to the Contracting Officer that an IT-SC&A was performed 
for applicable information systems--see paragraph (a) of this clause. 
The Contractor shall perform the IT-SC&A in accordance with the HHS 
Chief Information Security Officer's Certification and Accreditation 
Checklist; NIST SP 800-37, Guide for the Security Certification and 
Accreditation of Federal Information Systems; and NIST SP 800-53, 
Recommended Security Controls for Federal Information Systems. An 
authorized senior management official shall sign the draft IT-SC&A and 
provide it to the Contracting Officer for review, comment, and 
acceptance.
    (i) After resolution of any comments provided by the Government on 
the draft IT-SC&A, the Contracting Officer shall accept the IT-SC&A and 
incorporate the Contractor's final version into the contract as a 
compliance requirement.
    (ii) The Contractor shall also perform an annual security control 
assessment and provide to the Contracting Officer verification that the 
IT-SC&A remains valid. Evidence of a valid system accreditation includes 
written results of:
    (A) Annual testing of the system contingency plan; and
    (B) The performance of security control testing and evaluation.
    (d) Personal identity verification. The Contractor shall identify 
its employees with access to systems operated by the Contractor for HHS 
or connected to HHS systems and networks. The Contracting Officer's 
Technical Representative (COTR) shall identify, for those identified 
employees, position sensitivity levels that are commensurate with the 
responsibilities and risks associated with their assigned positions. The 
Contractor shall comply with the HSPD-12 requirements contained in 
``HHS-Controlled Facilities and Information Systems Security'' 
requirements specified in the SOW/PWS of this contract.
    (e) Contractor and subcontractor employee training. The Contractor 
shall ensure that its employees, and those of its subcontractors, 
performing under this contract complete HHS-furnished initial and 
refresher security and privacy education and awareness training before 
being granted access to systems operated by the Contractor on behalf of 
HHS or access to HHS systems and networks. The Contractor shall provide 
documentation to the COTR evidencing that Contractor employees have 
completed the required training.
    (f) Government access for IT inspection. The Contractor shall afford 
the Government access to the Contractor's and subcontractors' 
facilities, installations, operations, documentation, databases, and 
personnel used in performance of this contract to the extent required to 
carry out a program of IT inspection (to include vulnerability testing), 
investigation, and audit to safeguard against threats and hazards to the 
integrity, confidentiality, and availability, of HHS data or to the 
protection of information systems operated on behalf of HHS.
    (g) Subcontracts. The Contractor shall incorporate the substance of 
this clause in all subcontracts that require protection of Federal 
information and Federal information systems as described in paragraph 
(a) of this clause, including those subcontracts that--
    (1) Have physical or electronic access to HHS' computer systems, 
networks, or IT infrastructure; or
    (2) Use information systems to generate, store, process, or exchange 
data with HHS or on behalf of HHS, regardless of whether the data 
resides on a HHS or the Contractor's information system.

[[Page 119]]

    (h) Contractor employment notice. The Contractor shall immediately 
notify the Contracting Officer when an employee either begins or 
terminates employment (or is no longer assigned to the HHS project under 
this contract), if that employee has, or had, access to HHS information 
systems or data.
    (i) Document information. The Contractor shall contact the 
Contracting Officer for any documents, information, or forms necessary 
to comply with the requirements of this clause.
    (j) Contractor responsibilities upon physical completion of the 
contract. The Contractor shall return all HHS information and IT 
resources provided to the Contractor during contract performance and 
certify that all HHS information has been purged from Contractor-owned 
systems used in contract performance.
    (k) Failure to comply. Failure on the part of the Contractor or its 
subcontractors to comply with the terms of this clause shall be grounds 
for the Contracting Officer to terminate this contract.

                             (End of clause)

[74 FR 62398, Nov. 27, 2009, as amended at 75 FR 21511, Apr. 26, 2010]



Sec. 352.239-73  Electronic information and technology accessibility.

    (a) As prescribed in 339.201-70(a), the Contracting Officer shall 
insert the following provision:

   Electronic and Information Technology Accessibility (January 2010)

    (a) Section 508 of the Rehabilitation Act of 1973 (29 U.S.C. 794d), 
as amended by the Workforce Investment Act of 1998, and the 
Architectural and Transportation Barriers Compliance Board Electronic 
and Information (EIT) Accessibility Standards (36 CFR Part 1194), 
require that, unless an exception applies, all EIT products and services 
developed, acquired, maintained, or used by any Federal department or 
agency permit--
    (1) Federal employees with disabilities to have access to and use 
information and data that is comparable to the access and use of 
information and data by Federal employees who are not individuals with 
disabilities; and
    (2) Members of the public with disabilities seeking information or 
services from a Federal agency to have access to and use of information 
and data that is comparable to the access and use of information and 
data by members of the public who are not individuals with disabilities.
    (b) Accordingly, any vendor submitting a proposal/quotation/bid in 
response to this solicitation must demonstrate compliance with the 
established EIT accessibility standards. Information about Section 508 
is available at http://www.section508.gov/. The complete text of Section 
508 Final Provisions can be accessed at http://www.access-board.gov/
sec508/provisions.htm.
    (c) The Section 508 accessibility standards applicable to this 
solicitation are identified in the Statement of Work/Specification/
Performance Work Statement. In order to facilitate the Government's 
evaluation to determine whether EIT products and services proposed meet 
applicable Section 508 accessibility standards, offerors must prepare an 
HHS Section 508 Product Assessment Template, in accordance with its 
completion instructions, and provide a binding statement of conformance. 
The purpose of the template is to assist HHS acquisition and program 
officials in determining that EIT products and services proposed support 
applicable Section 508 accessibility standards. The template allows 
vendors or developers to self-evaluate their products or services and 
document in detail how they do or do not conform to a specific Section 
508 accessibility standard. Instructions for preparing the HHS Section 
508 Evaluation Template may be found under Section 508 policy on the HHS 
Office on Disability Web site (http://www.hhs.gov/od).
    (d) Respondents to this solicitation must also provide any 
additional detailed information necessary for determining applicable 
Section 508 accessibility standards conformance, as well as for 
documenting EIT products or services that are incidental to the project, 
which would constitute an exception to Section 508 requirements. If a 
vendor claims its products or services, including EIT deliverables such 
as electronic documents and reports, meet applicable Section 508 
accessibility standards in its completed HHS Section 508 Product 
Assessment Template, and it is later determined by the Government--i.e., 
after award of a contract/order, that products or services delivered do 
not conform to the described accessibility standards in the Product 
Assessment Template, remediation of the products or services to the 
level of conformance specified in the vendor's Product Assessment 
Template will be the responsibility of the Contractor and at its 
expense.

                           (End of provision)

    (b) As prescribed in 339.201-70(b), the Contracting Officer shall 
insert the following clause:

   Electronic and Information Technology Accessibility (January 2010)

    (a) Pursuant to Section 508 of the Rehabilitation Act of 1973 (29 
U.S.C. 794d), as amended by the Workforce Investment Act of 1998, all 
electronic and information technology

[[Page 120]]

(EIT) products and services developed, acquired, maintained, or used 
under this contract/order must comply with the ``Electronic and 
Information Technology Accessibility Provisions'' set forth by the 
Architectural and Transportation Barriers Compliance Board (also 
referred to as the ``Access Board'') in 36 CFR part 1194. Information 
about Section 508 is available at http://www.section508.gov/. The 
complete text of Section 508 Final Provisions can be accessed at http://
www.access-board.gov/sec508/provisions.htm.
    (b) The Section 508 accessibility standards applicable to this 
contract/order are identified in the Statement of Work/Specification/
Performance Work Statement. The Contractor must provide a written 
Section 508 conformance certification due at the end of each contract/
order exceeding $100,000 when the contract/order duration is one year or 
less. If it is determined by the Government that EIT products and 
services provided by the Contractor do not conform to the described 
accessibility standards in the Product Assessment Template, remediation 
of the products or services to the level of conformance specified in the 
Contractor's Product Assessment Template will be the responsibility of 
the Contractor at its own expense.
    (c) In the event of a modification(s) to this contract/order, which 
adds new EIT products or services or revises the type of, or 
specifications for, products or services the Contractor is to provide, 
including EIT deliverables such as electronic documents and reports, the 
Contracting Officer may require that the contractor submit a completed 
HHS Section 508 Product Assessment Template to assist the Government in 
determining that the EIT products or services support Section 508 
accessibility standards. Instructions for documenting accessibility via 
the HHS Section 508 Product Assessment Template may be found under 
Section 508 policy on the HHS Office on Disability Web site (http://
www.hhs.gov/od).

    (c) As prescribed in 339.201-70(c), the Contracting Officer shall 
add the following paragraph to the end of clause 352.239-73(b):

    Prior to the Contracting Officer exercising an option for a 
subsequent performance period/additional quantity or adding funding for 
a subsequent performance period under this contract, as applicable, the 
Contractor must provide a Section 508 Annual Report to the Contracting 
Officer and Project Officer. Unless otherwise directed by the 
Contracting Officer in writing, the Contractor shall provide the cited 
report in accordance with the following schedule. Instructions for 
completing the report are available in the Section 508 policy on the HHS 
Office on Disability Web site under the heading Vendor Information and 
Documents. The Contractor's failure to submit a timely and properly 
completed report may jeopardize the Contracting Officer's exercising an 
option or adding funding, as applicable.

     Schedule for Contractor Submission of Section 508 Annual Report

    (To be completed by the Contracting Officer at time of contract/
order award.)

[74 FR 62398, Nov. 27, 2009, as amended at 75 FR 21512, Apr. 26, 2010]



Sec. 352.242-70  Key personnel.

    As prescribed in 342.302(c)(2), the Contracting Officer shall insert 
the following clause:

                      Key Personnel (January 2006)

    The key personnel specified in this contract are considered to be 
essential to work performance. At least 30 days prior to diverting any 
of the specified individuals to other programs or contracts (or as soon 
as possible, if an individual must be replaced, for example, as a result 
of leaving the employ of the Contractor), the Contractor shall notify 
the Contracting Officer and shall submit comprehensive justification for 
the diversion or replacement request (including proposed substitutions 
for key personnel) to permit evaluation by the Government of the impact 
on performance under this contract. The Contractor shall not divert or 
otherwise replace any key personnel without the written consent of the 
Contracting Officer. The Government may modify the contract to add or 
delete key personnel at the request of the contractor or Government.

                             (End of clause)



Sec. 352.242-71  Tobacco-free facilities.

    As prescribed in 342.302(c)(3), the Contracting Officer shall insert 
the following clause:

                 Tobacco-free Facilities (January 2006)

    In accordance with Department of Health and Human Services (HHS) 
policy, the Contractor and its staff are prohibited from using tobacco 
products of any kind (e.g., cigarettes, cigars, pipes, and smokeless 
tobacco) while on any HHS property, including use in personal or company 
vehicles operated by Contractor employees while on an HHS property. This 
policy also applies to all subcontracts awarded under the contract or 
order. The term ``HHS properties'' includes all properties owned, 
controlled and/or leased by HHS when totally occupied by HHS, including 
all indoor and outdoor areas of such properties. Where HHS only 
partially occupies such properties, it includes all HHS-

[[Page 121]]

occupied interior space. Where HHS leases space in a multi-occupant 
building or complex, the tobacco-free HHS policy will apply to the 
maximum area permitted by both law and current lease agreements. The 
Contractor shall ensure that each of its employees, and any 
subcontractor staff, is made aware of, understand, and comply with this 
policy.

                             (End of clause)



Sec. 352.242-72  Native American Graves Protection and Repatriation Act.

    As prescribed in 342.302(c)(4), the Contracting Officer shall insert 
the following clause:

  Native American Graves Protection and Repatriation Act (January 2006)

    (a) Public Law 101-601, dated November 16, 1990, also known as the 
Native American Graves Protection and Repatriation Act (Act), imposes 
certain responsibilities on individuals and organizations when they 
discover Native American cultural items (including human remains) on 
Federal or Tribal lands.
    (b) In the event the Contractor discovers Native American cultural 
items (including human remains, associated funerary objects, 
unassociated funerary objects, sacred objects and cultural patrimony), 
as defined in the Act during contract performance, the Contractor 
shall--
    (i) Immediately cease activity in the area of the discovery;
    (ii) Notify the Contracting Officer of the discovery; and
    (iii) Make a reasonable effort to protect the items discovered 
before resuming such activity. Upon receipt of the Contractor's 
discovery notice, the Contracting Officer will notify the appropriate 
authorities as required by the Act.
    (c) Unless otherwise specified by the Contracting Officer, the 
Contractor may resume activity in the area on the 31st calendar day 
following the date that the appropriate authorities certify receipt of 
the discovery notice. The Contracting Officer shall provide to the 
Contractor the date that the appropriate authorities certify receipt of 
the discovery notice and the date on which the Contractor may resume 
activities.

                             (End of clause)



Sec. 352.242-73  Withholding of contract payments.

    As prescribed in 342.7003-1(a), the Contracting Officer shall insert 
the following clause:

             Withholding of Contract Payments (January 2006)

    Notwithstanding any other payment provisions of this contract, 
failure of the Contractor to submit required reports when due or failure 
to perform or deliver required work, supplies, or services, may result 
in the withholding of payments under this contract unless such failure 
arises out of causes beyond the control, and without the fault or 
negligence of the Contractor as defined by the clause entitled 
``Excusable Delays'' or ``Default,'' as applicable. The Government will 
immediately notify the Contractor of its intention to withhold payment 
of any invoice or voucher submitted.

                             (End of clause)



Sec. 352.242-74  Final decisions on audit findings.

    As prescribed in 342.7003-1(b), the Contracting Officer shall insert 
the following clause:

             Final Decisions on Audit Findings (April 1984)

    For the purpose of issuing final decisions under the Disputes clause 
of this contract concerning monetary audit findings, the Contracting 
Officer is the individual authorized to make such decisions.

                             (End of clause)



Sec. 352.270-1  Accessibility of meetings, conferences, and seminars to 
          persons with disabilities.

    As prescribed in 370.102, the Contracting Officer shall insert the 
following clause:

  Accessibility of Meetings, Conferences, and Seminars to Persons With 
                       Disabilities (January 2001)

    The Contractor agrees as follows:
    (a) Planning. The Contractor shall develop a plan to assure that any 
meeting, conference, or seminar held pursuant to this contract will meet 
or exceed the minimum accessibility standards set forth in 28 CFR 
36.101-36.500 and Appendix A: ADA Accessibility Guidelines (ADAAG). The 
Contractor shall submit the plan to the Contracting Officer's Technical 
Representative for approval prior to initiating action. (The Contractor 
may submit a consolidated or master plan for contracts requiring 
numerous meetings, conferences, or seminars in lieu of separate plans.)
    (b) Facilities. Any facility the Contractor intends to utilize for 
meetings, conferences, or seminars in performance of this contract shall 
be in compliance with 28 CFR 36.101-

[[Page 122]]

36.500 and Appendix A. The Contractor shall determine, by an on-site 
inspection, that the facility meets these requirements. (1) Parking. 
Parking shall be in compliance with 228 CFR 36.101-36.500 and Appendix 
A.
    (2) Entrances. Entrances shall be in compliance with 28 CFR 36.101-
36.500 and Appendix A.
    (3) Meeting Rooms. Meeting rooms, including seating arrangements, 
shall be in compliance with 28 CFR 36.101-36.500 and Appendix A. In 
addition, stages, speaker platforms, etc. which are to be used by 
persons in wheelchairs must be accessible by ramps or lifts. When used, 
the ramp may not necessarily be independently negotiable if space does 
not permit. However, the Contracting Officer's Technical Representative 
must approve any slope over 1:12, and the Contractor must provide 
assistance to negotiate access to the stage or platform.
    (4) Restrooms. Restrooms shall be in compliance with 28 CFR 36.101-
36.500 and Appendix A.
    (5) Eating Facilities. Eating facilities in the meeting facility 
must also comply with 28 CFR 36.101-36.500 and Appendix A.
    (6) Overnight Facilities. If overnight accommodations are required, 
the facility providing the overnight accommodations shall also comply 
with 28 CFR 36.101-36.500 and Appendix A.
    (7) Water Fountains. Water fountains shall comply with 28 CFR 
36.101-36.500 and Appendix A.
    (8) Telephones. Public telephones shall comply with 28 CFR 36.101-
36.500 and Appendix A.
    (c) Provisions of Services for Attendees with Sensory Impairments.
    (1) The Contractor, in planning the meeting, conference, or seminar, 
shall include in all announcements and other materials pertaining to the 
meeting, conference, or seminar a notice indicating that services will 
be made available to persons with sensory impairments attending the 
meeting, if requested within five (5) days of the date of the meeting, 
conference, or seminar. The announcement(s) and other material(s) shall 
indicate that persons with sensory impairments may contact a specific 
person(s), at a specific address and phone number(s), to make their 
service requirements known. The phone number(s) shall include a 
telecommunication device for the deaf (TDD).
    (2) The Contractor shall provide, at no additional cost to the 
individual, those services required by persons with sensory impairments 
to ensure their complete participation in the meeting, conference, or 
seminar.
    (3) At a minimum, when requested in advance, the Contractor shall 
provide the following services:
    (i) For persons with hearing impairments, qualified interpreters. 
Also, the meeting rooms shall be adequately illuminated so signing by 
interpreters can be easily seen.
    (ii) For persons with vision impairments, readers and/or cassette 
materials, as necessary, to enable full participation. Also, meeting 
rooms shall be adequately illuminated.
    (iii) Agenda and other conference material(s) shall be translated 
into a usable form for persons with sensory impairments. Readers, 
Braille translations, large print text, and/or tape recordings are all 
acceptable. These materials shall be available to individuals with 
sensory impairments upon their arrival.
    (4) The Contractor shall make a reasonable effort to ascertain the 
number of individuals with sensory impairments who plan to attend the 
meeting, conference, or seminar. However, if the Contractor can 
determine that there will be no person with sensory impairment in 
attendance, the provision of those services under paragraph (c) of this 
clause for the non-represented group, or groups, is not required.

                             (End of clause)



Sec. 352.270-2  Indian preference.

    As prescribed in 370.202(a), the Contracting Officer shall insert 
the following clause:

                     Indian Preference (April 1984)

    (a) The Contractor agrees to give preference in employment 
opportunities under this contract to Indians who can perform required 
work, regardless of age (subject to existing laws and regulations), sex, 
religion, or Tribal affiliation. To the extent feasible and consistent 
with the efficient performance of this contract, the Contractor further 
agrees to give preference in employment and training opportunities under 
this contract to Indians who are not fully qualified to perform 
regardless of age (subject to existing laws and regulations), sex, 
religion, or Tribal affiliation. The Contractor also agrees to give 
preference to Indian organizations and Indian-owned economic enterprises 
in the awarding of any subcontracts to the extent feasible and 
consistent with the efficient performance of this contract. The 
Contractor shall maintain statistical records as are necessary to 
indicate compliance with this paragraph.
    (b) In connection with the Indian employment preference requirements 
of this clause, the Contractor shall provide opportunities for training 
incident to such employment. Such training shall include on-the-job, 
classroom or apprenticeship training which is designed to increase the 
vocational effectiveness of an Indian employee.
    (c) If the Contractor is unable to fill its employment and training 
opportunities after

[[Page 123]]

giving full consideration to Indians as required by this clause, the 
Contractor may satisfy those needs by selecting persons other than 
Indians in accordance with the clause of this contract entitled ``Equal 
Opportunity.''
    (d) If no Indian organizations or Indian-owned economic enterprises 
are available under reasonable terms and conditions, including price, 
for awarding of subcontracts in connection with the work performed under 
this contract, the Contractor agrees to comply with the provisions of 
this contract involving utilization of small businesses; HUBZone small 
businesses; service-disabled, veteran-owned small businesses; 8(a) small 
businesses; veteran-owned small businesses; women-owned small 
businesses; or small disadvantaged businesses.
    (e) As used in this clause,
    (1) ``Indian'' means a person who is a member of an Indian Tribe. If 
the Contractor has reason to doubt that a person seeking employment 
preference is an Indian, the Contractor shall grant the preference but 
shall require the individual to provide evidence within 30 days from the 
Tribe concerned that the person is a member of the Tribe.
    (2) ``Indian Tribe'' means an Indian Tribe, pueblo, band, nation, or 
other organized group or community, including Alaska Native village or 
regional or village corporation as defined in or established pursuant to 
the Alaska Native Claims Settlement Act (85 Stat. 688; 43 U.S.C. 1601) 
which is recognized as eligible for the special programs and services 
provided by the United States to Indians because of their status as 
Indians.
    (3) ``Indian organization'' means the governing body of any Indian 
Tribe or entity established or recognized by such governing body in 
accordance with the Indian Financing Act of 1974 (88 Stat. 77; 25 U.S.C. 
1451).
    (4) ``Indian-owned economic enterprise'' means any Indian-owned 
commercial, industrial, or business activity established or organized 
for the purpose of profit, provided that such Indian ownership shall 
constitute not less than 51 percent of the enterprise, and that 
ownership shall encompass active operation and control of the 
enterprise.
    (f) The Contractor agrees to include the provisions of this clause, 
including this paragraph (f) of this clause, in each subcontract awarded 
at any tier under this contract.
    (g) In the event of noncompliance with this clause, the Contracting 
Officer may terminate the contract in whole or in part or may impose any 
other sanctions authorized by law or by other provisions of the 
contract.

                             (End of clause)



Sec. 352.270-3  Indian preference program.

    As prescribed in 370.202(b), the Contracting Officer shall insert 
the following clause:

                Indian Preference Program (January 2006)

    (a) In addition to the requirements of the clause of this contract 
entitled ``Indian Preference,'' the Contractor agrees to establish and 
conduct an Indian preference program which will expand opportunities for 
Indians to receive preference for employment and training in connection 
with the work to be performed under this contract, and which will expand 
the opportunities for Indian organizations and Indian-owned economic 
enterprises to receive a preference in the awarding of subcontracts. In 
this connection, the Contractor shall perform the following:
    (1) Designate a liaison officer who will maintain liaison with the 
Government and the Tribe(s) on Indian preference matters; supervise 
compliance with the provisions of this clause; and administer the 
Contractor's Indian preference program.
    (2) Advise its recruitment sources in writing and include a 
statement in all advertisements for employment that Indian applicants 
will be given preference in employment and training incident to such 
employment.
    (3) Not more than 20 calendar days after award of the contract, post 
a written notice in the Tribal office of any reservations on which or 
near where the work under this contract is to be performed that sets 
forth the Contractor's employment needs and related training 
opportunities. The notice shall include the approximate numbers and 
types of employees needed; the approximate dates of employment; the 
experience or special skills required for employment, if any; training 
opportunities available; and other pertinent information necessary to 
advise prospective employees of any other employment requirements. The 
Contractor shall also request the Tribe(s) on or near whose 
reservation(s) the work is to be performed to provide assistance to the 
Contractor in filling its employment needs and training opportunities. 
The Contracting Officer will advise the Contractor of the name, 
location, and phone number of the Tribal officials to contact in regard 
to the posting of notices and requests for Tribal assistance.
    (4) Establish and conduct a subcontracting program which gives 
preference to Indian organizations and Indian-owned economic enterprises 
as subcontractors and suppliers under this contract. The Contractor 
shall give public notice of existing subcontracting opportunities and, 
to the extent feasible and consistent with the efficient performance of 
this contract, shall solicit bids or proposals

[[Page 124]]

only from Indian organizations or Indian-owned economic enterprises. The 
Contractor shall request assistance and information on Indian firms 
qualified as suppliers or subcontractors from the Tribe(s) on or near 
whose reservation(s) the work under the contract is to be performed. The 
Contracting Officer will advise the Contractor of the name, location, 
and phone number of the Tribal officials to be contacted in regard to 
the request for assistance and information. Public notices and 
solicitations for existing subcontracting opportunities shall provide an 
equitable opportunity for Indian firms to submit bids or proposals by 
including--
    (i) A clear description of the supplies or services required, 
including quantities, specifications, and delivery schedules which 
facilitate the participation of Indian firms;
    (ii) A statement indicating that preference will be given to Indian 
organizations and Indian-owned economic enterprises in accordance with 
section 7(b) of Public Law 93-638 [88 Stat. 2205; 25 U.S.C. 450e(b)];
    (iii) Definitions for the terms ``Indian organization'' and 
``Indian-owned economic enterprise'' as prescribed under the ``Indian 
Preference'' clause of this contract;
    (iv) A statement to be completed by the bidder or offeror that it is 
an Indian organization or Indian-owned economic enterprise; and
    (v) A closing date for receipt of bids or proposals which provides 
sufficient time for preparation and submission of a bid or proposal. If 
after soliciting bids or proposals from Indian organizations and Indian-
owned economic enterprises, no responsive bid or acceptable proposal is 
received, the Contractor shall comply with the requirements of paragraph 
(d) of the ``Indian Preference'' clause of this contract. If one or more 
responsible bids or acceptable proposals are received, award shall be 
made to the low responsible bidder or acceptable offeror if the price is 
determined to be reasonable. If the low responsive bid or acceptable 
proposal is determined to be unreasonable as to price, the Contractor 
shall attempt to negotiate a reasonable price and award a subcontract. 
If a reasonable price cannot be agreed upon, the Contractor shall comply 
with the requirements of paragraph (d) of the ``Indian Preference'' 
clause of this contract.
    (5) Maintain written records under this contract which indicate--
    (i) The numbers of Indians seeking employment for each employment 
position available under this contract;
    (ii) The number and types of positions filled by Indians and non-
Indians;
    (iii) The total number of Indians employed under this contract;
    (iv) For those positions where there are both Indian and non-Indian 
applicants, and a non-Indian is selected for employment, the reason(s) 
why the Indian applicant was not selected;
    (v) Actions taken to give preference to Indian organizations and 
Indian-owned economic enterprises for subcontracting opportunities which 
exist under this contract;
    (vi) Reasons why preference was not given to Indian firms as 
subcontractors or suppliers for each requirement where it was determined 
by the Contractor that such preference would not be consistent with the 
efficient performance of the contract; and
    (vii) The number of Indian organizations and Indian-owned economic 
enterprises contacted, and the number receiving subcontract awards under 
this contract.
    (6) Submit to the Contracting Officer for approval a quarterly 
report which summarizes the Contractor's Indian preference program and 
indicates the number and types of available positions filled by Indians 
and non-Indians, and the dollar amounts of all subcontracts awarded to 
Indian organizations and Indian-owned economic enterprises, and to all 
other firms.
    (7) Maintain records pursuant to this clause and keep them available 
for review by the Government for one year after final payment under this 
contract, or for such longer period as may be required by any other 
clause of this contract or by applicable law or regulation.
    (b) For purposes of this clause, the following definitions of terms 
shall apply:
    (1) The terms ``Indian,'' ``Indian Tribe,'' ``Indian Organization,'' 
and ``Indian-owned economic enterprise'' are defined in the clause of 
this contract entitled ``Indian Preference.''
    (2) ``Indian reservation'' includes Indian reservations, public 
domain Indian Allotments, former Indian reservations in Oklahoma, and 
land held by incorporated Native groups, regional corporations, and 
village corporations under the provisions of the Alaska Native Claims 
Settlement Act (85 Stat. 688; 43 U.S.C. 1601 et seq.)
    (3) ``On or near an Indian Reservation'' means on a reservation or 
reservations or within that area surrounding an Indian reservation(s) 
where a person seeking employment could reasonably be expected to 
commute to and from in the course of a work day.
    (c) Nothing in the requirements of this clause shall be interpreted 
to preclude Indian Tribes from independently developing and enforcing 
their own Indian preference requirements. Such requirements must not 
conflict with any Federal statutory or regulatory requirement dealing 
with the award and administration of contracts.
    (d) The Contractor agrees to include the provisions of this clause, 
including this paragraph (d), in each subcontract awarded at any tier 
under this contract and to notify the Contracting Officer of such 
subcontracts.

[[Page 125]]

    (e) In the event of noncompliance with this clause, the Contracting 
Officer may terminate the contract in whole or in part or may impose any 
other sanctions authorized by law or by other provisions of the 
contract.

                             (End of clause)



Sec. 352.270-4  Protection of human subjects.

    (a) As prescribed in 370.303(a), the Contracting Officer shall 
insert the following provision:

  Notice to Offerors of Requirements of 45 CFR Part 46, Protection of 
                      Human Subjects (January 2006)

    (a) Copies of the Department of Health and Human Services (HHS) 
regulations for the protection of human subjects, 45 CFR Part 46, are 
available from the Office for Human Research Protections (OHRP), 
Bethesda, Maryland 20892. The regulations provide a systematic means, 
based on established ethical principles, to safeguard the rights and 
welfare of individuals who participate as subjects in research 
activities supported or conducted by HHS.
    (b) The regulations define a human subject as a living individual 
about whom an investigator (whether professional or student) conducting 
research obtains data through intervention or interaction with the 
individual, or identifiable private information. The regulations extend 
to the use of human organs, tissue, and body fluids from individually 
identifiable human subjects as well as to graphic, written, or recorded 
information derived from individually identifiable human subjects. The 
use of autopsy materials is governed by applicable State and local law 
and is not directly regulated by 45 CFR Part 46.
    (c) Activities in which the only involvement of human subjects will 
be in one or more of the categories set forth in 45 CFR 46.101(b)(1-6) 
are exempt from coverage.
    (d) Inappropriate designations of the noninvolvement of human 
subjects or of exempt categories of research in a project may result in 
delays in the review of a proposal. The Government's Project Officer 
will make a final determination of whether the proposed activities are 
covered by the regulations or are in an exempt category, based on the 
information provided in the proposal. In doubtful cases, the Project 
Officer will consult with OHRP.
    (e) In accordance with 45 CFR Part 46, offerors being considered for 
award shall file with OHRP an acceptable Assurance of Compliance with 
the regulations, specifying review procedures and assigning 
responsibilities for the protection of human subjects. The initial and 
continuing review of a research project by an institutional review board 
shall ensure that: the rights and welfare of the human subjects involved 
are adequately protected; the risks to the subjects are reasonable in 
relation to both the potential benefits, if any, to the subjects and the 
importance of the knowledge to be gained; and informed consent will be 
obtained by methods that are adequate and appropriate. HHS regulations 
for the protection of human subjects (45 CFR Part 46), information 
regarding OHRP registration and assurance requirements/processes, and 
OHRP contact information can be accessed at the OHRP Web site (at  
http://www.hhs.gov/ohrp/).
    (f) Offerors may consult with OHRP for advice or guidance concerning 
either regulatory requirements or ethical issues pertaining to research 
involving human subjects.

                           (End of provision)

    (b) As prescribed in 370.304(a), the Contracting Officer shall 
insert the following clause:

               Protection of Human Subjects (January 2006)

    (a) The Contractor agrees that the rights and welfare of human 
subjects involved in research under this contract shall be protected in 
accordance with 45 CFR Part 46 and with the Contractor's current 
Assurance of Compliance on file with the Office for Human Research 
Protections (OHRP), Department of Health and Human Services. The 
Contractor further agrees to provide certification at least annually 
that the Institutional Review Board has reviewed and approved the 
procedures, which involve human subjects in accordance with 45 CFR Part 
46 and the Assurance of Compliance.
    (b) The Contractor shall bear full responsibility for the 
performance of all work and services involving the use of human subjects 
under this contract and shall ensure that work is conducted in a proper 
manner and as safely as is feasible. The parties hereto agree that the 
Contractor retains the right to control and direct the performance of 
all work under this contract. The Contractor shall not deem anything in 
this contract to constitute the Contractor or any subcontractor, agent 
or employee of the Contractor, or any other person, organization, 
institution, or group of any kind whatsoever, as the agent or employee 
of the Government. The Contractor agrees that it has entered into this 
contract and will discharge its obligations, duties, and undertakings 
and the work pursuant thereto, whether requiring professional judgment 
or otherwise, as an independent contractor without imputing liability on 
the part of the Government for the acts of the Contractor or its 
employees.

[[Page 126]]

    (c) If at any time during the performance of this contract, the 
Contracting Officer determines, in consultation with OHRP that the 
Contractor is not in compliance with any of the requirements and/or 
standards stated in paragraphs (a) and (b) above, the Contracting 
Officer may immediately suspend, in whole or in part, work and further 
payments under this contract until the Contractor corrects the 
noncompliance. The Contracting Officer may communicate the notice of 
suspension by telephone with confirmation in writing. If the Contractor 
fails to complete corrective action within the period of time designated 
in the Contracting Officer's written notice of suspension, the 
Contracting Officer may, after consultation with OHRP, terminate this 
contract in whole or in part, and the Contractor's name may be removed 
from the list of those contractors with approved Human Subject 
Assurances.

                             (End of clause)



Sec. 352.270-5  Care of laboratory animals.

    (a) As prescribed in 370.403(a), the Contracting Officer shall 
insert the following provision:

Notice to Offerors of Requirement for Compliance With the Public Health 
  Service Policy on Humane Care and Use of Laboratory Animals (January 
                                  2006)

    The Public Health Service (PHS) Policy on Humane Care and Use of 
Laboratory Animals (PHS Policy) establishes a number of requirements for 
research activities involving animals. Before award may be made to an 
applicant organization, the organization shall file, with the Office of 
Laboratory Animal Welfare (OLAW), National Institutes of Health (NIH), a 
written Animal Welfare Assurance (Assurance) which commits the 
organization to comply with the provisions of the PHS Policy, the Animal 
Welfare Act, and the Guide for the Care and Use of Laboratory Animals 
(National Academy Press, Washington, DC). In accordance with the PHS 
Policy, applicant organizations must establish an Institutional Animal 
Care & Use Committee (IACUC), qualified through the experience and 
expertise of its members, to oversee the institution's animal program, 
facilities and procedures. Applicant organizations are required to 
provide verification of IACUC approval prior to release of an award 
involving live vertebrate animals. No award involving the use of animals 
shall be made unless OLAW approves the Assurance and verification of 
IACUC approval for the proposed animal activities has been provided to 
the Contracting Officer. Prior to award, the Contracting Officer will 
notify Contractor(s) selected for projects that involve live vertebrate 
animals that an Assurance and verification of IACUC approval are 
required. The Contracting Officer will request that OLAW negotiate an 
acceptable Assurance with those Contractor(s) and request verification 
of IACUC approval. For further information, contact OLAW at NIH, 6705 
Rockledge Drive, RKL1, Suite 360, MSC 7982 Bethesda, Maryland 20892-7982 
(E-mail: olaw@od.nih.gov; Phone: 301-496-7163).

                           (End of provision)

    (b) As prescribed in 370.404, the Contracting Officer shall insert 
the following clause:

             Care of Live Vertebrate Animals (October 2009)

    (a) Before undertaking performance of any contract involving animal-
related activities where the species is regulated by USDA, the 
Contractor shall register with the Secretary of Agriculture of the 
United States in accordance with 7 U.S.C. 2136 and 9 CFR sections 2.25 
through 2.28. The Contractor shall furnish evidence of the registration 
to the Contracting Officer.
    (b) The Contractor shall acquire vertebrate animals used in research 
from a dealer licensed by the Secretary of Agriculture under 7 U.S.C. 
2133 and 9 CFR Sections 2.1-2.11, or from a source that is exempt from 
licensing under those sections.
    (c) The Contractor agrees that the care, use and intended use of any 
live vertebrate animals in the performance of this contract shall 
conform with the Public Health Service (PHS) Policy on Humane Care of 
Use of Laboratory Animals (PHS Policy), the current Animal Welfare 
Assurance (Assurance), the Guide for the Care and Use of Laboratory 
Animals (National Academy Press, Washington, DC) and the pertinent laws 
and regulations of the United States Department of Agriculture (see 7 
U.S.C. 2131 et seq. and 9 CFR Subchapter A, Parts 1-4). In case of 
conflict between standards, the more stringent standard shall govern.
    (d) If at any time during performance of this contract, the 
Contracting Officer determines, in consultation with the Office of 
Laboratory Animal Welfare (OLAW), National Institutes of Health (NIH), 
that the Contractor is not in compliance with any of the requirements 
and standards stated in paragraphs (a) through (c) above, the 
Contracting Officer may immediately suspend, in whole or in part, work 
and further payments under this contract until the Contractor corrects 
the noncompliance. Notice of the suspension may be communicated by 
telephone and confirmed in writing. If the Contractor fails to complete 
corrective action within the period of time designated in the 
Contracting Officer's written notice of suspension, the Contracting 
Officer may, in consultation with OLAW, NIH, terminate

[[Page 127]]

this contract in whole or in part, and the Contractor's name may be 
removed from the list of those contractors with approved Assurances.
    Note: The Contractor may request registration of its facility and a 
current listing of licensed dealers from the Regional Office of the 
Animal and Plant Health Inspection Service (APHIS), USDA, for the region 
in which its research facility is located. The location of the 
appropriate APHIS Regional Office, as well as information concerning 
this program may be obtained by contacting the Animal Care Staff, USDA/
APHIS, 4700 River Road, Riverdale, Maryland 20737 (E-mail: 
ace@aphis.usda.gov; Web site: (http://www.aphis.usda.gov/animal--
welfare).

                             (End of clause)



Sec. 352.270-6  Restriction on use of human subjects.

    As prescribed in 370-304(b), the Contracting Officer shall insert 
the following clause:

           Restriction on Use of Human Subjects (January 2006)

    Pursuant to 45 CFR part 46, Protection of Human Research Subjects, 
the Contractor shall not expend funds under this award for research 
involving human subjects or engage in any human subjects research 
activity prior to the Contracting Officer's receipt of a certification 
that the research has been reviewed and approved by the Institutional 
Review Board (IRB) designated under the Contractor's Federal-wide 
assurance of compliance. This restriction applies to all collaborating 
sites, whether domestic or foreign, and subcontractors. The Contractor 
must ensure compliance by collaborators and subcontractors.

                             (End of clause)



Sec. 352.270-7  Conference sponsorship request and conference materials 
          disclaimer.

    As prescribed in 370.602, the Contracting Officer shall insert the 
following clause:

   Conference Sponsorship Request and Conference Materials Disclaimer 
                             (January 2010)

    (a) If HHS is not the sole provider of funding under this conference 
contract, then prior to the Contractor claiming HHS conference 
sponsorship, the Contractor shall submit a written request (including 
rationale) to the Contracting Officer for permission to claim such HHS 
sponsorship.
    (b) Whether or not HHS is the conference sponsor, the Contractor 
shall include the following statement on conference materials, including 
promotional materials, agendas, and Web sites:
    ``This conference was funded, in whole or in part, through a 
contract (insert contract number) with the Department of Health and 
Human Services (HHS) (insert name of OPDIV/STAFFDIV). The views 
expressed in written conference materials and by speakers and moderators 
at this conference, do not necessarily reflect the official policies of 
HHS, nor does mention of trade names, commercial practices, or 
organizations imply endorsement by the U.S. Government.''
    (c) Unless authorized by the Contracting Officer's Technical 
Representative, the Contractor shall not display the HHS logo on any 
conference materials.

                             (End of clause)

[74 FR 62398, Nov. 27, 2009, as amended at 75 FR 21512, Apr. 26, 2010]



Sec. 352.270-8  Prostitution and related activities.

    As prescribed in 370.701, the Contracting Officer shall insert the 
following clause:

           Prostitution and Related Activities (January 2010)

    (a) The U.S. Government is opposed to prostitution and related 
activities, which are inherently harmful and dehumanizing and contribute 
to the phenomenon of trafficking in persons.
    (b) Neither the Contractor nor any subcontractor(s) shall use 
Government funds provided under this contract to promote or advocate the 
legalization or practice of prostitution or sex trafficking. (Note: The 
term ``contract'' includes ``order'' wherever it appears in this 
clause.) The Contractor shall not construe anything in the preceding 
sentence to preclude providing individuals with palliative care, 
treatment, or post-exposure pharmaceutical prophylaxis, and necessary 
pharmaceuticals and commodities, including test kits, condoms, and, when 
proven effective, microbicides.
    (c) The Government does not require the Contractor to endorse or 
utilize a multisectoral approach to combating HIV/AIDS, or endorse, 
utilize, or participate in a prevention method or treatment program to 
which it has a religious or moral objection. Any information the 
Contractor provides about the use of condoms as part of projects or 
activities that are funded in connection with this contract shall be 
medically accurate and shall include the public health benefits and 
failure rates of such use.
    (d) In addition, the Contractor shall have a policy explicitly 
opposing prostitution and sex trafficking. The preceding sentence shall

[[Page 128]]

not apply to any ``exempt organizations'' (i.e., the Global Fund to 
Fight AIDS, Tuberculosis and Malaria; the World Health Organization; the 
International AIDS Vaccine Initiative; and any United Nations agency), 
or to any contractors that are awarded ``specified types of commercial 
contracts'' as set forth below.
    (e) The following definitions apply for purposes of this clause:
    (1) ``Commercial sex act'' means any sex act on account of which 
anything of value is given to or received by any person.
    (2) ``Prostitution'' means procuring or providing any commercial sex 
act.
    (3) ``Sex trafficking'' means the recruitment, harboring, 
transportation, provision, or obtaining of a person for the purpose of a 
commercial sex act [22 U.S.C. 7102(9)].
    (4) ``Specified types of commercial contracts'' means contracts 
awarded for commercial items and services as defined in Federal 
Acquisition Regulation (FAR) 2.101, such as pharmaceuticals, medical 
supplies, logistics support, data management, and freight forwarding. 
Notwithstanding the preceding definition of ``specified types of 
commercial contracts,'' contracts for the purposes specified in 
paragraphs (e)(4)(i) through (iii) of this clause, that are awarded to 
implement HIV/AIDS programs, require that the Contractor have a policy 
explicitly opposing prostitution and sex trafficking--
    (i) Supplies or services provided directly to the final populations 
receiving such supplies or services in host countries;
    (ii) Technical assistance and training furnished directly to host 
country individuals or entities for the provision of supplies or 
services to the final populations receiving such supplies and services; 
or
    (iii) The types of services listed in FAR 37.203(b)(1)-(6) that 
involve giving advice about substantive policies of a recipient, giving 
advice regarding the activities referenced in paragraphs (e)(4)(i) and 
(ii) of this clause, or making decisions or functioning in a recipient's 
chain of command (e.g., providing managerial or supervisory services; 
approving financial transactions, personnel actions, etc.).
    (f) The Contractor must have and maintain ``objective integrity and 
independence'' from any organization that engages in activities 
inconsistent with a policy opposing prostitution and sex trafficking. 
HHS will consider the Contractor to have objective integrity and 
independence from such an organization if the--
    (1) Organization is a legally separate entity;
    (2) Organization receives no transfer of Leadership Act funds, and 
Leadership Act funds do not subsidize activities inconsistent with a 
policy opposing prostitution and sex trafficking; and
    (3) Contractor is physically and financially separate from the 
organization. Mere bookkeeping separation of Leadership Act funds from 
other funds is not sufficient. HHS will determine, on a case-by-case 
basis, and based on the totality of the facts, whether sufficient 
physical and financial separation exists. The presence or absence of any 
one factor below will not be determinative. Factors relevant to this 
determination shall include, but not be limited to, the following:
    (i) The existence of separate personnel, management, and governance.
    (ii) The existence of separate accounts, accounting records, and 
timekeeping records.
    (iii) The degree of separation from facilities, equipment, and 
supplies used by the organization to conduct activities inconsistent 
with a policy opposing prostitution and sex trafficking, and the extent 
of such activities by the organization.
    (iv) The extent to which--
    (A) Signs and other forms of identification that distinguish the 
Contractor from the organization are present, and
    (B) Signs and materials that could be associated with the 
organization or activities inconsistent with a policy opposing 
prostitution and sex trafficking are absent.
    (v) The extent to which the U.S. Government, HHS, and the project 
name are protected from public association with an organization and its 
activities that are inconsistent with a policy opposing prostitution and 
sex trafficking in materials, such as publications, conferences, and 
press or public statements.
    (g) The Contractor shall include, as express terms and conditions, 
the applicable provisions of this clause in all subcontract 
solicitations and subcontracts awarded under this contract. The 
Contractor agrees that HHS may, at any reasonable time, inspect the 
documents and materials the Contractor maintains or prepares in the 
usual course of its operations that relate to the Contractor's 
compliance with this clause.
    (h) As a prerequisite to award and payment of any Government funds 
under this contract, the Contractor shall certify compliance with this 
clause for the performance period funded by the contract. The Contractor 
shall provide the three following compliance certifications in a written 
statement addressed to the Contracting Officer:
    (1) Organizational Integrity Certification:
    ``I certify that (insert Contractor's name), which will be the 
recipient of Government funds made available through this contract, has 
objective integrity and independence from any organization that engages 
in activities inconsistent with a policy opposing prostitution and sex 
trafficking.''
    (2) Subcontractor Compliance Certification:
    ``I certify that (insert Contractor's name) will include the 
Organizational Integrity

[[Page 129]]

certification in any subcontract awarded under this contract and will 
require such subcontractor to provide the same certification that the 
Contractor provided.''
    (3) Acknowledgment Certification:
    ``I certify that (insert Contractor's name) acknowledges that these 
certifications are a prerequisite to receipt of Government funds in 
connection with this contract, and that any violation of these 
certifications by the Contractor or subcontractor(s) at any level shall 
be grounds for termination of the contract by HHS in accordance with the 
Federal Acquisition Regulation, Part 49, as well as any other remedies 
provided by law.''
    Note: In the case of existing contracts, the Contracting Officer 
shall add the certification requirements whenever the contract is 
modified to extend the period of performance or add funds, including any 
options that may be exercised. In so doing, the Contracting Officer 
shall delete in paragraph (h) the language ``As a prerequisite to award 
and payment of any Government funds under this contract,'' and replace 
it with: ``As a prerequisite to continuation of this contract and 
payment of any Government funds under it,''.
    (i) A person(s) authorized to bind the Contractor and any 
subcontractor(s) shall execute the certifications. The Contractor shall 
provide its certifications to the Contracting Officer. A 
subcontractor(s) shall provide its certifications to the Contractor. The 
Contracting Officer may request that the Contractor provide any 
subcontractor certifications. In addition, the Contractor and any 
subcontractors shall provide renewed certifications for any modification 
that extends the contract period of performance or adds funds to the 
contract, including any options that may be exercised.
    (j) This clause does not affect the applicability of the FAR clause 
at 52.222-50 entitled, ``Combating Trafficking in Persons.''

                             (End of clause)

[74 FR 62398, Nov. 27, 2009, as amended at 75 FR 21512, Apr. 26, 2010]



Sec. 352.270-9  Non-discrimination for conscience.

    As prescribed in 370.702, the Contracting Officer shall insert the 
following provision:

            Non-discrimination for Conscience (January 2010)

    (a) Section 301(d) of the United States Leadership Against HIV/AIDS, 
Tuberculosis, and Malaria Act, as amended, provides that an 
organization, including a faith-based organization, that is otherwise 
eligible to receive assistance under section 104A of the Foreign 
Assistance Act of 1961, under the United States Leadership Against HIV/
AIDS, Tuberculosis, and Malaria Act of 2003, under the Tom Lantos and 
Henry J. Hyde United States Global Leadership Against HIV/AIDS, 
Tuberculosis, and Malaria Reauthorization Act of 2008, or under any 
amendment to the foregoing Acts for HIV/AIDS prevention, treatment, or 
care--
    (1) Shall not be required, as a condition of receiving such 
assistance, to--
    (i) Endorse or utilize a multisectoral or comprehensive approach to 
combating HIV/AIDS; or
    (ii) Endorse, utilize, make a referral to, become integrated with, 
or otherwise participate in any program or activity to which the 
organization has a religious or moral objection.
    (2) Shall not be discriminated against under the provisions of law 
in subparagraph (a) for refusing to meet any requirement described in 
paragraph (a)(1) in this solicitation.
    (b) Accordingly, an offeror who believes this solicitation contains 
work requirements that would require it to endorse or utilize a 
multisectoral or comprehensive approach to combating HIV/AIDS, or to 
endorse, utilize, make referral to, become integrated with, or otherwise 
participate in a program or activity to which it has a religious or 
moral objection, shall identify those work requirements it has excluded 
in its technical proposal.
    (c) The Government acknowledges that an offeror has specific rights, 
as cited in paragraph (b) of this provision, to exclude certain work 
requirements in this solicitation from its proposal. However, the 
Government reserves the right to not make an award to an offeror whose 
proposal does not comply with the salient work requirements of the 
solicitation. Any exercise of that Government right will be made by the 
Head of the Contracting Activity.

                           (End of provision)

[74 FR 62398, Nov. 27, 2009, as amended at 75 FR 21512, Apr. 26, 2010]

                             PART 353_FORMS

                  Subpart 353.3_Illustrations of Forms

Sec.

Sec. 353.370-674 Form HHS 674, Structured Approach Profit/Fee Objective.

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

    Source: 74 FR 62398, Nov. 27, 2009, unless otherwise noted.

[[Page 130]]

                  Subpart 353.3_Illustrations of Forms



Sec. 353.370-674  Form HHS 674, Structured Approach Profit/Fee 
          Objective.

    This form is available from local cost advisory personnel or PSC.

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

                       SUBCHAPTERS I	L [RESERVED]

                        PARTS 354	369 [RESERVED]

[[Page 131]]

                    SUBCHAPTER M_HHS SUPPLEMENTATIONS

             PART 370_SPECIAL PROGRAMS AFFECTING ACQUISITION

 Subpart 370.1_Accessibility of Meetings, Conferences, and Seminars to 
                        Persons With Disabilities

Sec.

Sec. 370.101 Policy.

Sec. 370.102 Responsibilities.

      Subpart 370.2_Indian Preference in Employment, Training, and 
                      Subcontracting Opportunities


Sec. 370.201 Statutory requirements.

Sec. 370.202 Applicability.

Sec. 370.203 Definitions.

Sec. 370.204 Compliance enforcement.

Sec. 370.205 Tribal preference requirements.

           Subpart 370.3_Acquisitions Involving Human Subjects


Sec. 370.300 Scope of subpart.

Sec. 370.301 Policy.

Sec. 370.302 Types of assurances.

Sec. 370.303 Notice to offerors.

Sec. 370.304 Contract clauses.

   Subpart 370.4_Acquisitions Involving the Use of Laboratory Animals


Sec. 370.400 Scope of subpart.

Sec. 370.401 Policy.

Sec. 370.402 Assurances.

Sec. 370.403 Notice to offerors.

Sec. 370.404 Contract clause.

           Subpart 370.5_Acquisitions Under the Buy Indian Act


Sec. 370.500 Scope of subpart.

Sec. 370.501 Policy.

Sec. 370.502 Definitions.

Sec. 370.503 Requirements.

Sec. 370.504 Competition.

Sec. 370.505 Responsibility determinations.

            Subpart 370.6_Conference Funding and Sponsorship


Sec. 370.600 Policy.

Sec. 370.601 Funding and sponsorship.

Sec. 370.602 Contract clause.

           Subpart 370.7_Acquisitions under the Leadership Act


Sec. 370.700 Scope of subpart.

Sec. 370.701 Contract clause.

Sec. 370.702 Solicitation provision.

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

    Source: 74 FR 62398, Nov. 27, 2009, unless otherwise noted.

 Subpart 370.1_Accessibility of Meetings, Conferences, and Seminars to 
                        Persons With Disabilities



Sec. 370.101  Policy.

    (a) It is HHS policy that all meetings, conferences, and seminars be 
accessible to persons with disabilities. For the purpose of this policy, 
accessibility is defined as both physical access to meeting, conference, 
and seminar sites, and aids and services to enable individuals with 
sensory disabilities to fully participate in meetings, conferences, and 
seminars.
    (b) In regard to acquisition, the policy is applicable to all 
contracts where the SOW/PWS requires the contractor to conduct meetings, 
conferences, or seminars that are open to the public or involve HHS 
personnel, but not to ad hoc meetings that may be necessary or 
incidental to contract performance.



Sec. 370.102  Responsibilities.

    (a) The Contracting Officer shall insert the clause in 352.270-1, 
Accessibility of Meetings, Conferences, and Seminars to Persons with 
Disabilities, in solicitations, contracts, and orders when the SOW/PWS 
requires the contractor to conduct meetings, conferences, or seminars in 
accordance with 370.101(b).
    (b) The COTR shall obtain, review, and approve the contractor's 
plan, which is to be submitted in response to paragraph (a) of the 
contract clause in 352.270-1. A consolidated or master plan for 
contracts requiring numerous meetings, conferences, or seminars is 
acceptable. The COTR, prior to approving the plan, shall consult with 
the OPDIV or other designated organization responsible for monitoring 
compliance with the Architectural Barriers Act of 1968 and the Americans 
with Disabilities Act of 1990, to ensure that the contractor's plan 
meets the accessibility requirements of the contract

[[Page 132]]

clause. The COTR shall request the responsible organization to review, 
and determine the adequacy of, the contractor's plan, and respond to the 
COTR, in writing, within 10 working days of receiving the request from 
the COTR.

      Subpart 370.2_Indian Preference in Employment, Training, and 
                      Subcontracting Opportunities



Sec. 370.201  Statutory requirements.

    Section 7(b) of the Indian Self-Determination and Education 
Assistance Act, Public Law 93-638, 88 Stat. 2205, 25 U.S.C. 450e(b), 
requires:
    ``Any contract, subcontract, grant, or subgrant pursuant to this 
Act, the Act of April 16, 1934 (48 Stat. 596), as amended, or any other 
Act authorizing Federal contracts with or grants to Indian organizations 
or for the benefit of Indians, shall require that to the greatest extent 
feasible:
    (1) Preferences and opportunities for training and employment in 
connection with the administration of such contracts or grants shall be 
given to Indians; and
    (2) Preference in the award of subcontracts and subgrants in 
connection with the administration of such contracts or grants shall be 
given to Indian organizations and to Indian-owned economic enterprises 
as defined in section 3 of the Indian Financing Act of 1974 (88 Stat. 
77).''



Sec. 370.202  Applicability.

    The Indian Preference clause set forth in 352.270-2 and the Indian 
Preference Program clause set forth in 352.270-3 implement section 7(b) 
of Public Law 93-638 for all HHS activities. Contracting activities 
shall use the clauses as follows, except that solicitations issued and 
contracts awarded pursuant to Title I of Public Law 93-638 (25 U.S.C. 
450 et seq.) are exempted:
    (a) The Contracting Officer shall insert the clause in 352.270-2, 
Indian Preference, in solicitations, contracts, and orders when--
    (1) The award is (or will be) made pursuant to an act specifically 
authorizing such awards with Indian organizations; or
    (2) The work to be performed is specifically for the benefit of 
Indians and is in addition to any incidental benefits which might 
otherwise accrue to the general public.
    (b) The Contracting Officer shall insert the clause in 352.270-3, 
Indian Preference Program, in solicitations, contracts, and orders 
when--
    (1) The dollar amount of the acquisition is expected to equal or 
exceed $50,000 for nonconstruction work or $100,000 for construction 
work;
    (2) The Indian Preference clause is included in the solicitation, 
contract, or order; and
    (3) The Contracting Officer makes the determination, prior to 
solicitation, that performance will take place in whole or in 
substantial part on or near an Indian reservation(s). In addition, the 
Contracting Officer may insert the Indian Preference Program clause in 
solicitations, contracts, and orders below the $50,000 or $100,000 level 
for nonconstruction or construction contracts, respectively, but which 
meet the requirements of paragraphs (b)(2) and (3) of this section 
370.202, and, in the opinion of the Contracting Officer, offer 
substantial opportunities for Indian employment, training, and 
subcontracting.



Sec. 370.203  Definitions.

    For purposes of this Subpart 370.2, the following definitions shall 
apply:
    (a) Indian means a person who is a member of an Indian Tribe. If the 
contractor has reason to doubt that a person seeking employment 
preference is an Indian, the contractor shall grant the preference but 
shall require the individual to provide evidence within 30 days from the 
Tribe concerned that the person is a member of the Tribe.
    (b) Indian Tribe means an Indian Tribe, pueblo, band, nation, or 
other organized group or community, including any Alaska Native Village 
or regional or village corporation as defined in or established pursuant 
to the Alaska Native Claims Settlement Act (85 Stat. 688, 43 U.S.C. 
1601), which is recognized as eligible for the special programs and 
services provided by the United States to Indians because of their 
status as Indians.

[[Page 133]]

    (c) Indian organization means the governing body of any Indian 
Tribe, or entity established or recognized by such governing body, in 
accordance with the Indian Financing Act of 1974 (88 Stat. 77, 25 U.S.C. 
1451).
    (d) Indian-owned economic enterprise means any Indian-owned 
commercial, industrial, or business activity established or organized 
for the purpose of profit, provided that such Indian ownership shall 
constitute not less than 51 percent of the enterprise, and the ownership 
shall encompass active operation and control of the enterprise.
    (e) Indian reservation includes Indian reservations, public domain 
Indian allotments, former Indian reservations in Oklahoma, and land held 
by incorporated Native groups, regional corporations, and village 
corporations under the provisions of the Alaska Native Claims Settlement 
Act (85 Stat. 688, 43 U.S.C. 1601 et seq.)
    (f) On or near an Indian Reservation means on a reservation or 
reservations or within that area surrounding an Indian reservation(s) 
where a person seeking employment could reasonably be expected to 
commute to and from in the course of a work day.



Sec. 370.204  Compliance enforcement.

    (a) The contracting activity shall conduct periodic reviews to 
ensure contractor compliance with the requirements of the clauses in 
352.270-2 and 352.270-3. The Indian Tribe(s) concerned may assist in the 
conduct of these reviews.
    (b) The Contracting Officer shall promptly investigate and resolve 
complaints of noncompliance with the requirements of the clauses in 
352.270-2 and 352.270-3 that are filed in writing with the contracting 
activity.



Sec. 370.205  Tribal preference requirements.

    (a) When the contractor will perform work under a contract on an 
Indian reservation, the Contracting Officer may supplement the clause in 
352.270-3 by adding specific Indian preference requirements of the Tribe 
on whose reservation the work is to be performed. The contracting 
activity and the Tribe shall jointly develop supplemental requirements 
for the contract. Supplemental preference requirements shall represent a 
further implementation of the requirements of section 7(b) of Public Law 
93-638 and require the approval of the affected program director and 
OGC-GLD, or a regional attorney, before the Contracting Officer adds 
them to a solicitation and resultant contract. Any supplemental 
preference requirements the Contracting Officer adds to the clause in 
352.270-3 shall also be part of the solicitation and clearly identified, 
to ensure uniform understanding of the additional requirements by all 
prospective bidders or offerors.
    (b) Nothing in this part shall preclude tribes from independently 
developing and enforcing their own Tribal preference requirements. Such 
independently developed Tribal preference requirements shall not, except 
as provided in paragraph (a) of this section, become a requirement in 
contracts covered under this 370.2, and shall not conflict with any 
Federal statutory or regulatory requirement concerning the award and 
administration of contracts.

           Subpart 370.3_Acquisitions Involving Human Subjects



Sec. 370.300  Scope of subpart.

    This subpart applies to all R & D activities involving human 
subjects conducted under contract--see 45 CFR 46.102(d) and (f).



Sec. 370.301  Policy.

    It is HHS policy that the Contracting Officer shall not award a 
contract involving human subjects until a prospective contractor has 
provided acceptable assurance that the activity will be subject to 
initial and continuing review by an appropriate Institutional Review 
Board (IRB) as described in HHS regulations at 45 CFR 46.103. The 
Contracting Officer shall require an applicable Federal-wide assurance 
(FWA), approved by the HHS Office for Human Research Protections (OHRP), 
of each contractor, subcontractor, or cooperating institution having 
responsibility for human subjects involved in performance of a contract. 
OHRP is responsible for negotiating assurances covering all HHS-
supported or HHS-conducted activities involving

[[Page 134]]

human subjects. OHRP shall provide guidance to Contracting Officers 
regarding non-award or termination of a contract due to inadequate 
assurance or breach of assurance for protection of human subjects.



Sec. 370.302  Types of assurances.

    (a) If an institution does not currently hold an FWA, it should 
submit one. An FWA listed in OHRP's current ``List of Registered 
Institutional Review Boards (IRBs)/Independent Ethics Committees (IECs) 
and Approved Assurances'' is acceptable for the purposes of this policy.
    (b) The OHRP Web site includes links to instructions and the forms 
for submitting both a domestic and international FWA at: http://
www.hhs.gov/ohrp/assurances/assurances--index.html. To expedite approval 
of a FWA, as well as any update/renewal, the institution shall use the 
OHRP Electronic Submission System. Once the institution ``submits'' an 
electronic file to OHRP, the institution must fax or mail (but not both) 
a copy of the signature page to initiate the review process. The 
institution shall mail the FWA to the OHRP, U.S. Department of Health 
and Human Services, 1101 Wootton Parkway, Suite 200, Rockville, Maryland 
20852, or fax it to OHRP at 240-453-8202 (but not both).



Sec. 370.303  Notice to offerors.

    (a) The Contracting Officer shall insert the provision in 352.270-
4(a), Notice to Offerors of Requirements of 45 CFR Part 46, Protection 
of Human Subjects, in solicitations that involve human subjects.
    (b) Institutions having an OHRP-approved FWA shall certify IRB 
approval of submitted proposals in the manner required by instructions 
for completion of the contract proposal; by completion of an OMB Form 
No. 0990-0263, ``Protection of Human Subjects Assurance Identification/
IRB Certification/Declaration of Exemption (Common Rule); or by letter 
indicating the institution's OHRP-assigned FWA number, the date of IRB 
review and approval, and the type of review (convened or expedited). The 
date of IRB approval must not be more than 12 months prior to the 
deadline for proposal submission.
    (c) The Contracting Officer generally will not request FWAs for 
contractors, subcontractors, or cooperating institutions prior to 
determination that a contract proposal has been selected for 
negotiation. When a contractor submits an FWA, it provides certification 
for the initial contract period. No additional documentation is 
required. If the contract provides for additional years to complete the 
project, the contractor shall certify the noncompetitive renewal 
proposal in the manner described in the preceding paragraph.



Sec. 370.304  Contract clauses.

    (a) The Contracting Officer shall insert the clause in 352.270-4(b), 
Protection of Human Subjects, in solicitations, contracts, and orders 
that involve human subjects.
    (b) The Contracting Officer shall insert the clause in 352.270-6, 
Restriction on Use of Human Subjects, in contracts and orders if the 
contractor has an approved Federal-wide assurance of compliance in 
place, but cannot certify prior to award that the research has been 
reviewed and approved by the IRB designated under the contractor's 
Federal-wide assurance of compliance, because definite plans for 
involvement of human subjects are not set forth in the proposal (e.g., 
projects in which human subjects' involvement will depend upon 
completion of instruments, prior animal studies, or purification of 
compounds). Under these conditions, the Contracting Officer may make the 
award without the requisite certification, as long as the Contracting 
Officer includes appropriate conditions in the contract or order.

   Subpart 370.4_Acquisitions Involving the Use of Laboratory Animals



Sec. 370.400  Scope of subpart.

    This subpart applies to all R & D, research training, biological 
testing, housing and maintenance, and other activities involving live 
vertebrate animals conducted under contract (see

[[Page 135]]

Public Health Service Policy on Humane Care and Use of Laboratory 
Animals (PHS Policy), Rev. 1986, Repr. 1996).

[75 FR 21512, Apr. 26, 2010]



Sec. 370.401  Policy.

    (a) It is HHS policy that contracting activities shall not award a 
contract involving live vertebrate animals until the contractor has 
given acceptable assurance that the work under the contract will be 
subject to initial and continuing review by an appropriate Institutional 
Animal Care and Use Committee (IACUC) as described in the PHS Policy at 
IV.B.6. and 7. The Contracting Officer shall require an applicable Full 
Animal Welfare Assurance or Inter-institutional Agreement/Assurance, 
approved by the Office of Laboratory Animal Welfare (OLAW), NIH, of each 
contractor, subcontractor, or cooperating institution having 
responsibility for animal care and use involved in performance of the 
contract--see PHS Policy II., IV.A., and V.B.
    (b) The OLAW, NIH, is responsible for negotiating assurances 
covering all HHS/PHS-supported or HHS/PHS-conducted activities involving 
the care and use of live vertebrate animals. OLAW shall provide guidance 
to Contracting Officers regarding adequate animal care, and use, 
approval, disapproval, restriction, or withdrawal of approval of 
assurances--see PHS Policy V.A.



Sec. 370.402  Assurances.

    (a) Assurances may be one of two following types:
    (1) Full Animal Welfare Assurance (AWA). An AWA describes the 
institution's complete program for the care and use of animals, 
including but not limited to the facilities, occupational health, 
training, veterinary care, IACUC procedures and lines of authority and 
responsibility. An AWA listed in OLAW's list of institutions which have 
an approved full AWA is acceptable for purposes of this policy.
    (2) Inter-institutional Agreement/Assurance (IAA). An IAA describes 
the arrangements between an offeror and usually a subcontractor where 
animal activities will occur. An IAA is limited to the specific award or 
single project.
    (b) The Contracting Officer shall forward copies of proposals 
selected for negotiation and requiring an assurance to the Assurance 
Branch, Office of Laboratory Animal Welfare, NIH MSC 7507, 6100 
Executive Blvd., Room 3B01, Rockville, Maryland 20892, as early as 
possible to secure the necessary assurances.
    (c) A contractor providing animal care services at an assured 
entity, such as a Government-owned, contractor-operated (GOCO) site, 
does not need a separate assurance. GOCO site assurances normally cover 
such contractor services.



Sec. 370.403  Notice to offerors.

    (a) The Contracting Officer shall insert the provision in 352.270-
5(a), Notice to Offerors of Requirement for Compliance with the Public 
Health Service Policy on Humane Care and Use of Laboratory Animals, in 
solicitations that involve live vertebrate animals.
    (b) Offerors having a full AWA on file with OLAW shall submit IACUC 
approval of the use of animals in the manner required by instructions 
for completion of the contract proposal, but prior to the technical 
review of the proposal. The date of IACUC approval must not be more than 
36 months prior to the deadline for proposal submission.
    (c) It is not necessary for non-assured offerors to submit 
assurances or IACUC approval with proposals. OLAW shall contact 
contractors, subcontractors and cooperating institutions to negotiate 
necessary assurances and verify IACUC approvals when requested by the 
Contracting Officer.

[74 FR 62398, Nov. 27, 2009, as amended at 75 FR 21512, Apr. 26, 2010]



Sec. 370.404  Contract clause.

    The Contracting Officer shall insert the clause in 352.270-5(b), 
Care of Live Vertebrate Animals, in solicitations, contracts, and orders 
that involve live vertebrate animals.

[75 FR 21512, Apr. 26, 2010]

[[Page 136]]

           Subpart 370.5_Acquisitions Under the Buy Indian Act



Sec. 370.500  Scope of subpart.

    This subpart sets forth the policy on preferential acquisition from 
Indians under the negotiation authority of the Buy Indian Act. This 
subpart applies only to acquisitions made by or on behalf of IHS.



Sec. 370.501  Policy.

    (a) The IHS shall utilize the negotiation authority of the Buy 
Indian Act to give preference to Indians whenever the use of that 
authority is authorized and is practicable. The Buy Indian Act, 25 
U.S.C. 47, prescribes the application of the advertising requirements of 
section 3709 of the Revised Statutes to the acquisition of Indian 
supplies. As specified in 25 U.S.C. 47, the Buy Indian Act provides 
that, so far as may be practicable, Indian labor shall be employed, and 
purchases of the products (including, but not limited to printing, 
notwithstanding any other law) of Indian industry may be made in open 
market in the discretion of the Secretary of the Interior.
    (b) Due to the transfer of authority from the Department of the 
Interior to HHS, the Secretary of HHS is authorized to use the Buy 
Indian Act in the acquisition of products of Indian industry, in 
connection with the maintenance and operation of hospital and health 
facilities for Indians, and for the conservation of the health of 
Indians. This authority has been delegated exclusively to IHS and is not 
available for use by any other HHS component (unless that component is 
making an acquisition on behalf of IHS). However, the Buy Indian Act 
itself does not exempt IHS from meeting the statutorily mandated small 
business goals.
    (c) Subsequent legislation, particularly Public Law 94-437 and 
Public Law 96-537, have emphasized the use of the Buy Indian Act 
negotiation authority.



Sec. 370.502  Definitions.

    (a) Buy Indian contract means any contract involving activities 
covered by the Buy Indian Act that is negotiated under the provisions of 
41 U.S.C. 252(c) and 25 U.S.C. 47 between an Indian firm and a 
Contracting Officer representing IHS.
    (b) Indian means a member of any Tribe, pueblo, band, group, village 
or community that is recognized by the Secretary of the Interior as 
being Indian or any individual or group of individuals that is 
recognized by the Secretary of the Interior or the Secretary of HHS. The 
Secretary of HHS in making determinations may take into account the 
determination of the Tribe with which affiliation is claimed.
    (c) Indian firm means a sole enterprise, partnership, corporation, 
or other type of business organization owned, controlled, and operated 
by one or more Indians (including, for the purpose of sections 301 and 
302 of Public Law 94-437, former or currently Federally recognized 
Indian tribes in the State of New York) or by an Indian firm; or a 
nonprofit firm organized for the benefit of Indians and controlled by 
Indians (see 370.503(a)).
    (d) Product of Indian industry means anything produced by Indians 
through either physical labor or intellectual effort involving the use 
and application of their skills.



Sec. 370.503  Requirements.

    (a) Indian ownership. The degree of Indian ownership of an Indian 
firm shall be at least 51 percent during the period covered by a Buy 
Indian contract.
    (b) Joint ventures. An Indian firm may enter into a joint venture 
with other entities for specific projects as long as the Indian firm is 
the managing partner. However, the Contracting Officer shall approve the 
joint venture prior to the award of a contract under the Buy Indian Act.
    (c) Bonds. In the case of contracts for the construction, 
alteration, or repair of public buildings or public works, the Miller 
Act (40 U.S.C. 270a-270f) and FAR part 28 require performance and 
payment bonds. Bonds are not required in the case of contracts with 
Indian tribes or public nonprofit organizations serving as governmental 
instrumentalities of an Indian Tribe. However, bonds are required when 
dealing with private business entities that are owned by an Indian Tribe 
or members of an Indian

[[Page 137]]

Tribe. The Contracting Officer may require bonds of private business 
entities that are joint ventures with, or subcontractors of, an Indian 
Tribe or a public nonprofit organization serving as a governmental 
instrumentality of an Indian Tribe. A bid guarantee or bid bond is 
required only when a performance or payment bond is required.
    (d) Indian preference in employment, training and subcontracting. 
Contracts awarded under the Buy Indian Act are subject to the 
requirements of section 7(b) of the Indian Self-Determination and 
Education Assistance Act 25 U.S.C. 450e, which requires that preference 
be given to Indians in employment, training, and subcontracting. The 
Contracting Officer shall include the Indian Preference clause specified 
in 352.270-2 in all Buy Indian solicitations and resultant contracts. 
The Contracting Officer shall use the Indian Preference Program clause 
specified in 352.270-3 as prescribed in 370.202(b). The Contracting 
Officer shall follow all requirements specified in subpart 370.2 which 
are applicable to a Buy Indian acquisition (e.g., sections 370.204 and 
370.205).
    (e) Subcontracting. A contractor shall not subcontract to other than 
Indian firms more than 50 percent of the work under a prime contract 
awarded pursuant to the Buy Indian Act. For this purpose, work to be 
performed does not include the provision of materials, supplies, or 
equipment.
    (f) Wage rates. The Contracting Officer shall include a 
determination of the minimum wage rates by the Secretary of Labor as 
required by the Davis-Bacon Act (40 U.S.C. 276a) in all contracts 
awarded under the Buy Indian Act for over $2,000 for construction, 
alteration, or repair, including painting and decorating, of public 
buildings and public works, except contracts with Indian tribes or 
public nonprofit organizations serving as governmental instrumentalities 
of an Indian Tribe. The Contracting Officer shall include the wage rate 
determination in contracts with private business entities, even if they 
are owned by an Indian Tribe or a member of an Indian Tribe and in 
connection with joint ventures with, or subcontractors of, an Indian 
Tribe or a public nonprofit organization serving as a governmental 
instrumentality of an Indian Tribe.



Sec. 370.504  Competition.

    (a) Contracts awarded under the Buy Indian Act are subject to 
competition among Indians or Indian concerns to the maximum extent 
practicable. When the Contracting Officer determines that competition is 
not practicable, a JOFOC is required in accordance with 306.303.
    (b) The Contracting Officer shall: synopsize and publicize 
solicitations in FedBizOpps and provide copies of the synopses to the 
Tribal office of the Indian Tribal government directly concerned with 
the proposed acquisition as well as to Indian concerns and others having 
a legitimate interest. The synopses shall state that the acquisitions 
are restricted to Indian firms under the Buy Indian Act.



Sec. 370.505  Responsibility determinations.

    (a) The Contracting Officer may award a contract under the Buy 
Indian Act only if the Contracting Officer determines that the project 
or function to be contracted is likely to be: satisfactorily performed 
under that contract; and properly completed or maintained under that 
contract.
    (b) The Contracting Officer shall make the determination specified 
in paragraph (a) of this section in writing prior to the award of a 
contract. The determination shall reflect an analysis of the standards 
set forth in FAR9.104-1.

            Subpart 370.6_Conference Funding and Sponsorship



Sec. 370.600  Policy.

    It is HHS policy that the conferences it funds or sponsors shall: be 
consistent with HHS missions, objectives, and policies; represent an 
efficient and effective use of taxpayer funds; and be able to withstand 
public scrutiny.



Sec. 370.601  Funding and sponsorship.

    Funding a conference through an HHS contract does not automatically 
imply HHS (OPDIV/STAFFDIV) conference sponsorship, unless the conference 
is funded entirely by HHS.

[[Page 138]]

Also, HHS staff attendance or participation at a conference does not 
imply HHS conference sponsorship. Accordingly, for other than conference 
contracts funded entirely by HHS, prior to a contractor claiming HHS 
conference sponsorship, the contractor must provide to the Contracting 
Officer a written request for permission to claim HHS as the conference 
sponsor--see 370.602. The OPDIV/STAFFDIV head, or designee, shall 
approve such requests.



Sec. 370.602  Contract clause.

    To ensure that a contractor:
    (a) Properly requests approval to claim HHS as the conference 
sponsor, where HHS is not the sole provider of conference funding; and
    (b) Includes an appropriate Federal funding disclosure and content 
disclaimer statement on conference materials, the Contracting Officer 
shall include the clause in 352.270-7, Conference Sponsorship Request 
and Conference Materials Disclaimer, in solicitations, contracts, and 
orders that provide funding, in whole or in part, to support a 
conference.

           Subpart 370.7_Acquisitions Under the Leadership Act



Sec. 370.700  Scope of subpart.

    This subpart sets forth the acquisition requirements regarding 
implementation of HIV/AIDS programs under the President's Emergency Plan 
for AIDS Relief under the Leadership Act of 2003, and under the Tom 
Lantos and Henry J. Hyde United States Global Leadership Against HIV/
AIDS, Tuberculosis, and Malaria Reauthorization Act of 2008 (Emergency 
Plan reauthorization legislation), which was signed by the President on 
July 30, 2008.



Sec. 370.701  Contract clause.

    The Contracting Officer shall insert the clause in 352.270-8, 
Prostitution and Related Activities, in solicitations, contracts, and 
orders, and in existing contracts and orders (whenever they are modified 
to extend the period of performance or add funds, including any options 
that may be exercised): in connection with the implementation of HIV/
AIDS programs under the President's Emergency Plan for AIDS Relief; or 
where the contractor will receive funding under the United States 
Leadership Against HIV/AIDS, Tuberculosis and Malaria Act of 2003. 
(Note: See 370.702 and 352.270-9 for the ``Non-discrimination for 
Conscience'' provision that must also be included in applicable 
solicitations.) In resolving any issues/complaints that offerors/
contractors may raise about meeting the requirements specified in the 
clause, the Contracting Officer shall consult with the Office of Global 
Health Affairs, Office of the General Counsel, the Project Officer, and 
other HHS officials, as appropriate.



Sec. 370.702  Solicitation provision.

    The Contracting Officer shall insert the provision in 352.270-9, 
Non-discrimination for Conscience, in solicitations valued at more than 
the micro-purchase threshold: in connection with the implementation of 
HIV/AIDS programs under the President's Emergency Plan for AIDS Relief; 
or where the contractor will receive funding under the United States 
Leadership Against HIV/AIDS, Tuberculosis and Malaria Act of 2003. 
(Note: See 370.701 and 352.270-8 for the ``Prostitution and Related 
Activities'' clause that must also be included in applicable 
solicitations, contracts, and orders.) In resolving any issues/
complaints that offerors may raise about meeting the requirements 
specified in the provision, the Contracting Officer shall consult with 
the Office of Global Health Affairs, Office of the General Counsel, the 
Project Officer, and other HHS officials, as appropriate.

[[Page 139]]



                  CHAPTER 4--DEPARTMENT OF AGRICULTURE




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                          SUBCHAPTER A--GENERAL
Part                                                                Page
401             Agriculture Acquisition Regulation System...         141
402             Definitions of words and terms..............         146
403             Improper business practices and personal 
                    conflicts of interest...................         146
404             Administrative matters......................         148
           SUBCHAPTER B--COMPETITION AND ACQUISITION PLANNING
405             Publicizing contract actions................         150
406             Competition requirements....................         150
407             Acquisition planning........................         151
408             Required sources of supplies and services...         152
409             Contractor qualifications...................         154
410             Market research.............................         156
411             Describing agency needs.....................         156
412             Acquisition of commercial items.............         157
          SUBCHAPTER C--CONTRACTING METHODS AND CONTRACT TYPES
413             Simplified acquisition procedures...........         159
414             Sealed bidding..............................         159
415             Contracting by negotiation..................         160
416             Types of contracts..........................         162
417             Special contracting methods.................         163
418

[Reserved]

                  SUBCHAPTER D--SOCIOECONOMIC PROGRAMS
419             Small business programs.....................         164
420-421

[Reserved]

422             Application of labor laws to Government 
                    acquisitions............................         165
423             Environment, energy and water efficiency, 
                    renewable energy technologies, 
                    occupational safety, and drug-free 
                    workplace...............................         167
424             Protection of privacy and freedom of 
                    information.............................         169
425             Foreign acquisition.........................         170

[[Page 140]]

426             Other socioeconomic programs................         171
             SUBCHAPTER E--GENERAL CONTRACTING REQUIREMENTS
427             Patents, data, and copyrights...............         172
428             Bonds and insurance.........................         172
429

[Reserved]

430             Cost accounting standards administration....         173
431             Contract cost principles and procedures.....         174
432             Contract financing..........................         174
433             Protests, disputes and appeals..............         178
             SUBCHAPTER F--SPECIAL CATEGORIES OF CONTRACTING
434             Major system acquisition....................         180
435             Research and development contracting........         181
436             Construction and architect-engineer 
                    contracts...............................         181
437             Service contracting.........................         184
438

[Reserved]

439             Acquisition of information technology.......         185
440

[Reserved]

441             Acquisition of utility services.............         186
                    SUBCHAPTER G--CONTRACT MANAGEMENT
442             Contract administration.....................         187
443-444

[Reserved]

445             Government property.........................         187
446             Quality assurance...........................         188
447             Transportation..............................         188
448

[Reserved]

449             Termination of contracts....................         189
450             Extraordinary contractual actions...........         189
451

[Reserved]

                     SUBCHAPTER H--CLAUSES AND FORMS
452             Solicitation provisions and contract clauses         191
453             Forms.......................................         201
                 SUBCHAPTER I--FOOD ASSISTANCE PROGRAMS
470             Commodity acquisitions......................         203

[[Page 141]]

                          SUBCHAPTER A_GENERAL

           PART 401_AGRICULTURE ACQUISITION REGULATION SYSTEM

Sec.

Sec. 401.000 Scope of part.

               Subpart 401.1_Purpose, Authority, Issuance


Sec. 401.101 Purpose.

Sec. 401.103 Authority.

Sec. 401.104 Applicability.

Sec. 401.105 Issuance.

Sec. 401.105-1 Publication and code arrangement.

Sec. 401.105-2 Arrangement of regulations.

Sec. 401.105-3 Copies.

Sec. 401.106 OMB approval under the Paperwork Reduction Act.

Sec. 401.170 Electronic access to regulatory information.

                      Subpart 401.2_Administration


Sec. 401.201 Maintenance of the FAR.

Sec. 401.201-1 The two councils.

              Subpart 401.3_Agency Acquisition Regulations


Sec. 401.301 Policy.

Sec. 401.304 Agency control and compliance procedures.

Sec. 401.370 Exclusions.

Sec. 401.371 AGAR Advisories.

Sec. 401.372 Departmental directives.

             Subpart 401.4_Deviations From the FAR and AGAR


Sec. 401.402 Policy.

Sec. 401.403 Individual deviations.

Sec. 401.404 Class deviations.

        Subpart 401.6_Contracting Authority and Responsibilities


Sec. 401.601 General.

Sec. 401.602 Contracting officers.

Sec. 401.602-3 Ratification of unauthorized commitments.

Sec. 401.603 Selection, appointment, and termination of appointment.

Sec. 401.603-1 General.

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

    Source: 61 FR 53646, Oct. 15, 1996, unless otherwise noted.



Sec. 401.000  Scope of part.

    This part presents basic policies and general information about the 
Department of Agriculture's (USDA) Acquisition Regulation, subsequently 
referred to as the AGAR. The AGAR is an integral part of the Federal 
Acquisition Regulations System.

               Subpart 401.1_Purpose, Authority, Issuance



Sec. 401.101  Purpose.

    (a) The AGAR provides for the codification and publication of 
uniform policies and procedures for acquisitions by contracting 
activities within USDA.
    (b) The purpose of the AGAR is to implement the Federal Acquisition 
Regulation (FAR), where further implementation is needed, and to 
supplement the FAR when coverage is needed for subject matter not 
covered in the FAR. The AGAR is not by itself a complete document, as it 
must be used in conjunction with the FAR.



Sec. 401.103  Authority.

    The AGAR and amendments thereto are issued under 5 U.S.C. 301 and 40 
U.S.C. 486(c). The Senior Procurement Executive (SPE) has the delegated 
authority to promulgate Departmental acquisition regulations.



Sec. 401.104  Applicability.

    The FAR and AGAR apply to all USDA acquisitions of supplies and 
services (including construction) which obligate appropriated funds, 
unless otherwise specified in this chapter or excepted by law.



Sec. 401.105  Issuance.



Sec. 401.105-1  Publication and code arrangement.

    (a) The AGAR is codified in the Code of Federal Regulations (CFR) as 
Chapter 4 of Title 48, Federal Acquisition Regulations System, to 
implement and supplement Chapter 1 which constitutes the FAR. Parts 400 
through 499 have been assigned to USDA by the Office of the Federal 
Register.
    (b) The AGAR and its subsequent changes are published in:

[[Page 142]]

    (1) Daily issues of the Federal Register,
    (2) Cumulative form in the CFR, and,
    (3) Electronic form on the USDA Departmental Administration 
Procurement Homepage (see 401.170).
    (c) Section 553(a)(2) of the Administrative Procedure Act, 5 U.S.C. 
553, provides an exception from the standard public rulemaking 
procedures to the extent that the rule involves a matter relating to 
agency management or personnel or to public property, loans, grants, 
benefits, or contracts. In 1971, Secretary of Agriculture Hardin 
announced a voluntary partial waiver from the Administrative Procedure 
Act exception, and USDA agencies generally are required to provide 
notice and an opportunity for public comment on proposed rules (36 FR 
13804, July 24, 1971). The AGAR has been promulgated and may be revised 
from time to time in accordance with the rulemaking procedures of the 
Administrative Procedure Act. The USDA also is required to publish for 
public comment procurement regulations in the Federal Register, pursuant 
to the Office of Federal Procurement Policy Act (41 U.S.C. 418b), and 
FAR 1.301.

[61 FR 53646, Oct. 15, 1996, as amended at 70 FR 44, Jan. 3, 2005]



Sec. 401.105-2  Arrangement of regulations.

    AGAR coverage parallels the FAR in format, arrangement, and 
numbering system. However, subdivisions below the section and subsection 
levels may not always correlate directly to FAR designated paragraphs 
and subparagraphs.



Sec. 401.105-3  Copies.

    Copies of the AGAR published in CFR form may be purchased from the 
Superintendent of Documents, Government Printing Office, Washington, 
D.C. 20402. Requests should reference Chapter 4 of Title 48 CFR.



Sec. 401.106  OMB approval under the Paperwork Reduction Act.

    The following OMB control numbers apply to USDA solicitations and 
specified information collections within the AGAR:

------------------------------------------------------------------------
                                                             OMB Control
                        AGAR segment                             No.
------------------------------------------------------------------------
411.170....................................................    0505-0014
415.2......................................................    0505-0013
436.575....................................................    0505-0011
437.110....................................................    0505-0015
437.270....................................................    0505-0016
452.211-1..................................................    0505-0014
452.215-71.................................................    0505-0013
452.236-75.................................................    0505-0011
452.237-74.................................................    0505-0015
452.237-76.................................................    0505-0016
------------------------------------------------------------------------


[61 FR 53646, Oct. 15, 1996, as amended at 64 FR 52674, Sept. 30, 1999]



Sec. 401.170  Electronic access to regulatory information.

    The USDA Departmental Administration Procurement Homepage provides 
access to the AGAR, AGAR amendments (circulars), AGAR Advisories, and 
other USDA procurement policy and guidance in electronic form. The 
Internet address for the Procurement Homepage is URL http://
www.usda.gov/procurement/.

[63 FR 26994, May 15, 1998, as amended at 70 FR 44, Jan. 3, 2005]

                      Subpart 401.2_Administration



Sec. 401.201  Maintenance of the FAR.



Sec. 401.201-1  The two councils.

    (a) USDA's representative on the Civilian Agency Acquisition Council 
is designated by the SPE.
    (b) The Procurement Policy Division will coordinate proposed FAR 
revisions within USDA.

[61 FR 53646, Oct. 15, 1996, as amended at 70 FR 44, Jan. 3, 2005]

              Subpart 401.3_Agency Acquisition Regulations



Sec. 401.301  Policy.

    (a) The SPE, subject to the authorities in 401.103 and FAR 1.301, 
may issue and publish Departmental regulations, that together with the 
FAR, constitute Department-wide policies, procedures, solicitation 
provisions, and contract clauses governing the contracting process or 
otherwise controlling the relationship between USDA (including any of 
its contracting activities) and contractors or prospective contractors.

[[Page 143]]

    (b) Each designated head of a contracting activity (HCA) is 
authorized to issue or authorize the issuance of, at any organizational 
level, internal guidance which does not have a significant effect beyond 
the internal operating procedures of the activity, or a significant cost 
or administrative impact on offerors or contractors. Internal guidance 
issued by contracting activities will not be published in the Federal 
Register. HCA's shall ensure that the guidance, procedures, or 
instructions issued--
    (1) Are consistent with the policies and procedures contained in 
this chapter;
    (2) Follow the format, arrangement, and numbering system of this 
chapter to the extent practicable;
    (3) Contain no material which duplicates, paraphrases, or is 
inconsistent with this chapter; and
    (4) Are numbered and identified by use of alphabetical suffixes to 
the chapter number as follows:

4A [Reserved]
4B Agricultural Research Service.
4C Farm Service Agency.
4D Rural Development (mission area).
4E Food Safety and Inspection Service.
4F [Reserved]
4G Forest Service.
4H [Reserved]
4I Natural Resources Conservation Service.
4J [Reserved]
4K Food and Nutrition Service.
4L Animal and Plant Health Inspection Service.
4M [Reserved]
4N Departmental Administration.
4O-4P [Reserved]
4R Office of Inspector General.
4S [Reserved]

[61 FR 53646, Oct. 15, 1996, as amended at 70 FR 44, Jan. 3, 2005]



Sec. 401.304  Agency control and compliance procedures.

    (a) The AGAR System is under the direct oversight and control of the 
SPE, who is responsible for review and issuance of all Department-wide 
acquisition regulations published in the Federal Register to assure 
compliance with FAR part 1.
    (b) The SPE is also responsible for review and issuance of 
unpublished, Department-wide internal guidance under the AGAR System.
    (c) HCA's are responsible for establishment and implementation of 
formal procedures for oversight and control of unpublished internal 
guidance issued within the contracting activity to implement FAR or AGAR 
requirements. These procedures shall be subject to the review and 
approval by the SPE.
    (d) The SPE is responsible for evaluating coverage under the AGAR 
System to determine applicability to other agencies and for recommending 
coverage to the FAR Secretariat for inclusion in the FAR.
    (e) Recommendations for revision of existing FAR coverage or new FAR 
coverage shall be submitted by the HCA to the SPE for further action.



Sec. 401.370  Exclusions.

    Subject to the policies of FAR subpart 1.3, certain USDA acquisition 
policies and procedures may be excluded from the AGAR under 
appropriately justified circumstances, such as:
    (a) Subject matter which is effective for a period less than 12 
months.
    (b) Subject matter which is instituted on an experimental basis for 
a reasonable period.
    (c) Acquisition procedures instituted on an interim basis to comply 
with the requirements of statute, regulation, Executive Order, OMB 
Circular, or OFPP Policy Letter.



Sec. 401.371  AGAR Advisories.

    The SPE may issue AGAR Advisories, consistent with the policies of 
the FAR and the AGAR, for the following purposes:
    (a) To communicate Department-wide policy and/or procedural guidance 
to contracting activities;
    (b) To delegate to procurement officials authority to make 
determinations or to take action to implement the policies of the FAR or 
the AGAR; and,
    (c) To establish internal policy and procedures on an interim basis, 
prior to incorporation in the AGAR or in a Departmental Directive.
    (d) AGAR Advisories are only available in electronic format on the 
USDA

[[Page 144]]

Procurement Web site at http://www.usda.gov/procurement/.

[61 FR 53646, Oct. 15, 1996, as amended at 70 FR 44, Jan. 3, 2005]



Sec. 401.372  Departmental directives.

    Subject to the policies of FAR 1.3, USDA from time to time may issue 
internal directives to establish procedures, standards, guidance, or 
methods of performing duties, functions, or operations. Such directives 
include Departmental Regulations (DR's), Departmental Notices, and 
Secretary's Memoranda.

             Subpart 401.4_Deviations From the FAR and AGAR



Sec. 401.402  Policy.

    Requests for authority to deviate from the provisions of the FAR or 
the AGAR shall be submitted in writing as far in advance as the 
exigencies of the situation will permit. Each request for deviation 
shall contain the following:
    (a) A statement of the deviation desired, including identification 
of the specific paragraph number(s) of the FAR and AGAR;
    (b) The reason why the deviation is considered necessary or would be 
in the best interest of the Government;
    (c) If applicable, the name of the contractor and identification of 
the contract affected;
    (d) A statement as to whether the deviation has been requested 
previously and, if so, circumstances of the previous request;
    (e) A description of the intended effect of the deviation;
    (f) A statement of the period of time for which the deviation is 
needed; and
    (g) Any pertinent background information which will contribute to a 
full understanding of the desired deviation.



Sec. 401.403  Individual deviations.

    In individual cases, deviations from either the FAR or the AGAR will 
be authorized only when essential to effect a necessary acquisition or 
where special circumstances make such deviations clearly in the best 
interest of the Government. Except for cost principles, HCA's may 
approve individual deviations from the AGAR, after coordinating with the 
General Counsel and the SPE. No deviations from the FAR or AGAR may be 
authorized at the contracting office level. A copy of each deviation and 
its supporting documentation shall be provided to the SPE. Deviations 
from the FAR shall not be made unless such action is authorized by the 
SPE after consultation with the Office of the General Counsel and any 
other appropriate office, on the basis of a written justification 
stating clearly the special circumstances involved.



Sec. 401.404  Class deviations.

    Where deviations from the FAR or AGAR are considered necessary for 
classes of contracts, requests for authority to deviate shall be 
submitted in writing to the SPE for approval. The SPE may authorize 
class deviations from the FAR without consulting the Chairperson of the 
Civilian Agency Acquisition Council where urgency precludes 
consultation. The SPE shall subsequently inform the Chairperson of the 
Civilian Agency Acquisition Council of the deviation including the 
circumstances under which it was required.

        Subpart 401.6_Contracting Authority and Responsibilities



Sec. 401.601  General.

    (a) The authority and responsibility vested in the Secretary to 
manage USDA's acquisition function is delegated through the Assistant 
Secretary for Administration to the SPE. This broad authority includes, 
but is not limited to, the following responsibilities:
    (1) Prescribing and publishing Departmental acquisition policies, 
regulations, and procedures.
    (2) Taking any necessary actions consistent with policies, 
regulations, and procedures with respect to purchases, contracts, 
leases, and other transactions.
    (3) Designating contracting officers.
    (4) Establishing clear lines of contracting authority.
    (5) Evaluating and monitoring the performance of USDA's acquisition 
system.

[[Page 145]]

    (6) Managing and enhancing career development of the contracting 
work force.
    (7) Participating in the development of Government-wide acquisition 
policies, regulations, and standards; and determining specific areas 
where government-wide performance standards should be established and 
applied.
    (8) Determining areas of Department-unique standards and developing 
unique Department-wide standards.
    (9) Certifying to the Secretary that the acquisition system meets 
approved standards.
    (b) The SPE may delegate contracting authority to the Heads of 
Contracting Activities (HCA's) and the responsibility to manage their 
acquisition function.
    (c) Unless prohibited by the FAR, the AGAR, or by other applicable 
statutes and regulations, the SPE may redelegate to HCA's the authority 
to make determinations as the agency head in order to implement the 
policies and procedures of the FAR. Such delegations shall be in 
writing, but need not be published.
    (d) Unless prohibited by the FAR, the AGAR, or by other applicable 
statutes or regulations, each HCA may designate one individual from the 
contracting activity to carry out the functions of the HCA (HCAD). The 
HCAD may exercise all authority delegated to the HCA.



Sec. 401.602  Contracting officers.



Sec. 401.602-3  Ratification of unauthorized commitments.

    (a) Definitions. Ratification, as used in this section, means the 
signed, documented action taken by an authorized official to approve and 
sanction a previously unauthorized commitment.
    Unauthorized commitment, as used in this section, means an agreement 
made by a Government representative who lacked the authority to enter 
into a contract on behalf of the Government.
    (b) Policy. The HCA may delegate ratification authority to the chief 
of the contracting office.
    (c) Procedure. Whenever an official of the cognizant contracting 
activity who is authorized to ratify unauthorized commitments learns 
that a person or firm has assumed work as a result of an unauthorized 
commitment, that official shall take the following actions:
    (1) Immediately inform any person who is performing work as a result 
of an unauthorized commitment that the work is being performed at that 
person's risk;
    (2) Inform the individual who made the unauthorized commitment of 
the seriousness of the act and the possible consequences;
    (3) Ensure that the individual who made the unauthorized commitment 
furnishes all records and documents concerning the commitment and a 
complete, written statement of facts, including, but not limited to: a 
statement as to why a contracting officer was not used; why the vendor 
was selected and a list of sources considered; a description of work to 
be performed or products to be furnished; the estimated or agreed price; 
whether an appropriation is available for the work; and whether 
performance has begun. Under exceptional circumstances, such as when the 
individual who made the unauthorized commitment is no longer available 
to attest to the circumstances of the unauthorized commitment, the 
ratifying official may waive these requirements; and
    (4) Decide whether ratification is proper and proceed as follows:
    (i) If ratification is not justifiable, provide the cognizant 
program office, contracting office, and the unauthorized contractor with 
an explanation of the decision not to ratify.
    (ii) If ratification appears adequately justified, ratify the action 
and retain or assign the contract to a successor contracting officer if 
necessary.
    (iii) Maintain related approval, decisional, and background 
documents in the contract file for audit purposes.
    (iv) Notify the cognizant program supervisor or line officer about 
the final disposition of the case; the notification may include a 
recommendation that the unauthorized commitment should be further 
considered a violation of USDA's employee conduct regulations.

[[Page 146]]



Sec. 401.603  Selection, appointment, and termination of appointment.



Sec. 401.603-1  General.

    An HCA may delegate contracting authority to the extent authorized 
by the SPE in a general delegation of acquisition authority, by 
appointing qualified individuals as contracting officers, in accordance 
with the USDA Contracting Officer Warrant System, Departmental 
Regulation 5001-1.

                 PART 402_DEFINITIONS OF WORDS AND TERMS

Sec.

Sec. 402.000 Scope of part.

                        Subpart 402.1_Definitions


Sec. 402.101 Definitions.

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

    Source: 61 FR 53646, Oct. 15, 1996, unless otherwise noted.



Sec. 402.000  Scope of part.

    As used throughout this chapter, the following words and terms are 
used as defined in this subpart unless the context in which they are 
used clearly requires a different meaning, or a different definition is 
prescribed for a particular part or portion of a part.

                        Subpart 402.1_Definitions



Sec. 402.101  Definitions.

    Acquisition official means an individual who has been delegated 
authority to manage or to exercise acquisition functions and 
responsibilities.
    Agency head or Head of the Agency means the Secretary of 
Agriculture, Deputy Secretary, or the Assistant Secretary for 
Administration.
    Head of the contracting activity (HCA) means the official who has 
overall responsibility for managing the contracting activity (i.e., 
Chief, Forest Service; Administrator, Agricultural Research Service; 
etc.), or the individual designated by such an official to carry out the 
functions of the HCA.
    Senior Procurement Executive (SPE) means the agency official 
appointed as such by the head of the agency pursuant to Executive Order 
12931. The Director, Office of Procurement and Property Management, has 
been designated as the USDA SPE.

[61 FR 53646, Oct. 15, 1996, as amended at 63 FR 26994, May 15, 1998]

 PART 403_IMPROPER BUSINESS PRACTICES AND PERSONAL CONFLICTS OF INTEREST

                        Subpart 403.1_Safeguards

Sec.

Sec. 403.101 Standards of conduct.

Sec. 403.101-3 Agency regulations.

Sec. 403.104 Procurement integrity.

Sec. 403.104-5 [Reserved]

Sec. 403.104-7 Violations or possible violations.

       Subpart 403.2_Contractor Gratuities to Government Personnel


Sec. 403.203 Reporting suspected violations of the gratuities clause.

Sec. 403.204 Treatment of violations.

         Subpart 403.3_Reports of Suspected Antitrust Violations


Sec. 403.303 Reporting suspected antitrust violations.

                      Subpart 403.4_Contingent Fees


Sec. 403.405 Misrepresentations or violations of the Covenant Against 
          Contingent Fees.

             Subpart 403.5_Other Improper Business Practices


Sec. 403.502 Subcontractor kickbacks.

Subpart 403.6_Contracts With Government Employees or Organizations Owned 
                          or Controlled by Them


Sec. 403.602 Exceptions.

Sec. 403.603 Responsibilities of the contracting officer.

 Subpart 403.8_Limitation on the Payment of Funds To Influence Federal 
                              Transactions


Sec. 403.806 Processing suspected violations

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

    Source: 61 FR 53646, Oct. 15, 1996, unless otherwise noted.

[[Page 147]]

                        Subpart 403.1_Safeguards



Sec. 403.101  Standards of conduct.



Sec. 403.101-3  Agency regulations.

    (a) The standards of conduct for USDA procurement officials are the 
uniform standards established by the Office of Government Ethics in 5 
CFR Part 2635, Standards of Ethical Conduct for Employees of the 
Executive Branch, and FAR 3.104, Procurement integrity.
    (b) Procurement officials and other employees who require advice 
concerning the application of standards of conduct to any acquisition 
issue shall obtain ethics advisory opinions from ethics advisory 
officials in their agency personnel offices.



Sec. 403.104  Procurement integrity.



Sec. 403.104-5  [Reserved]



Sec. 403.104-7  Violations or possible violations.

    The contracting officer shall forward information concerning any 
violation or possible violation of the Procurement Integrity Act (41 
U.S.C. 423) to the chief of the contracting office.

[61 FR 53646, Oct. 15, 1996, as amended at 63 FR 26995, May 15, 1998. 
Redesignated and amended at 70 FR 44, Jan. 3, 2005]

       Subpart 403.2_Contractor Gratuities to Government Personnel



Sec. 403.203  Reporting suspected violations of the gratuities clause.

    A suspected violation of the contract clause, FAR 52.203-3, 
Gratuities, shall be reported immediately to the cognizant contracting 
officer in writing, stating the circumstances surrounding the 
incident(s), the date(s), and names of all parties involved. The 
contracting officer shall review the report for completeness, add any 
additional information deemed necessary and a recommendation for action, 
and submit the report to the HCA.



Sec. 403.204  Treatment of violations.

    The HCA shall review the report and consult with the Offices of 
General Counsel and Inspector General to determine whether further 
action should be pursued. If it is found that the facts and 
circumstances warrant further action, the HCA shall give the contractor 
a formal written notice which summarizes the reported violation and 
affords the contractor the opportunity to make a written or oral 
response within a reasonable, specified period after receipt of the 
notice. The notice shall be sent by certified mail with return receipt 
requested. Oral presentations shall follow the procedures outlined in 
FAR 3.204(b). The HCA shall furnish copies of any adverse determination 
to the contracting officer and the Department Debarring Officer for 
their subsequent considerations under FAR 3.204(c)(1) and (2), 
respectively.

         Subpart 403.3_Reports of Suspected Antitrust Violations



Sec. 403.303  Reporting suspected antitrust violations.

    Contracting officers shall report the circumstances of suspected 
violations of antitrust laws to the Office of Inspector General in 
accordance with procedures in Departmental Regulations (1700 series).

                      Subpart 403.4_Contingent Fees



Sec. 403.405  Misrepresentations or violations of the Covenant Against 
          Contingent Fees.

    (a) A suspected misrepresentation or violation of the Covenant 
Against Contingent Fees shall be documented in writing by the 
contracting officer and reported immediately to the chief of the 
contracting office. The chief of the contracting office shall determine 
if a violation has occurred and report any violation to the Office of 
Inspector General. The chief of the contracting office shall take action 
in accordance with FAR 3.405(b).
    (b) If the chief of the contracting office decides to refer the case 
to the Department of Justice, it should be referred through the Office 
of Inspector General with a copy of the report and referral submitted 
through the HCA to the Senior Procurement Executive.

[61 FR 53646, Oct. 15, 1996. Redesignated and amended at 70 FR 44, Jan. 
3, 2005]

[[Page 148]]

             Subpart 403.5_Other Improper Business Practices



Sec. 403.502  Subcontractor kickbacks.

    Contracting officers shall report the circumstances of suspected 
violations of the Anti-Kickback Act (41 U.S.C. 51-58) to the Office of 
Inspector General in accordance with procedures in Departmental 
Regulations (1700 series).

[61 FR 53646, Oct. 15, 1996, as amended at 70 FR 44, Jan. 3, 2005]

Subpart 403.6_Contracts With Government Employees or Organizations Owned 
                          or Controlled by Them



Sec. 403.602  Exceptions.

    The HCA is authorized to accept a contract from the policy in FAR 
3.601.



Sec. 403.603  Responsibilities of the contracting officer.

    The contracting officer, when requesting authorization under 
403.602, shall prepare a written determination and findings for the 
signature of the HCA. The determination shall document compliance with 
FAR 3.603, specifying the compelling reason(s) for award, and shall be 
placed in the contract file.

 Subpart 403.8_Limitation on the Payment of Funds To Influence Federal 
                              Transactions



Sec. 403.806  Processing suspected violations.

    Suspected violations of the requirements of 31 U.S.C. 1352 shall be 
referred to the Office of Inspector General in accordance with 
procedures in Departmental Regulations (1700 series).

                     PART 404_ADMINISTRATIVE MATTERS

                   Subpart 404.2_Contract Distribution

Sec.

Sec. 404.203 Taxpayer identification information.

    Subpart 404.4_Safeguarding Classified Information Within Industry


Sec. 404.403 Responsibilities of contracting officers.

                    Subpart 404.6_Contract Reporting


Sec. 404.601 [Reserved]

Sec. 404.602 Federal Procurement Data System.

                 Subpart 404.8_Government Contract Files


Sec. 404.870 Document numbering system.

             Subpart 404.11_Central Contractor Registration


Sec. 404.1103 Procedures.

                   Subpart 404.70_Precontract Notices


Sec. 404.7001 Solicitation provision.

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

    Source: 61 FR 53646, Oct. 15, 1996, unless otherwise noted.

                   Subpart 404.2_Contract Distribution



Sec. 404.203  Taxpayer identification information.

    (a) If the contractor furnishes taxpayer identification number (TIN) 
and type of organization information pursuant to solicitation provision 
52.204-3 or 52.212-3, and the USDA Office of the Chief Financial 
Officer, Controller Operations Division, New Orleans will be the payment 
office, that information will be entered into the Foundation Financial 
Information System (FFIS) in accordance with FFIS Vendor Table 
Maintenance Procedures set forth in FFIS Bulletins issued by the Office 
of the Chief Financial Officer and AGAR Advisories issued by the Office 
of Procurement and Property Management.
    (b) Separate submission of the TIN or type of organization 
information, in accordance with 52.204-3 or 52.212-3, is not required 
for contractors registered in the Central Contractor Registration (CCR) 
database.

[70 FR 44, Jan. 3, 2005]

[[Page 149]]

    Subpart 404.4_Safeguarding Classified Information Within Industry



Sec. 404.403  Responsibilities of contracting officers.

    When a proposed solicitation is likely to require access to 
classified information, the contracting officer shall consult with the 
Information Security Staff, Personnel and Document Security Division, 
Office of Procurement and Property Management, regarding the procedures 
that must be followed.

[70 FR 44, Jan. 3, 2005]

                    Subpart 404.6_Contract Reporting



Sec. 404.601  [Reserved]



Sec. 404.602  Federal Procurement Data System.

    (a) Contracting activities shall report contract actions into the 
Federal Procurement Data System in accordance with the instructions 
issued or distributed by the SPE.
    (b) The unique identifier for each contract action reported to the 
Federal Procurement Data System shall begin with the two-letter USDA 
Agency Prefix ``AG''.

[70 FR 44, Jan. 3, 2005]

                 Subpart 404.8_Government Contract Files



Sec. 404.870  Document numbering system.

    The SPE shall issue AGAR Advisories to establish and maintain a 
numbering system for USDA contracts, modifications, and delivery/task 
orders. USDA contracting offices shall number contracts, modifications, 
and orders in accordance with this numbering system.

[70 FR 44, Jan. 3, 2005]

             Subpart 404.11_Central Contractor Registration



Sec. 404.1103  Procedures.

    (a) Contracting officers and other USDA employees shall not enter 
information into the Central Contractor Registration (CCR) database on 
behalf of prospective contractors. Prospective contractors who are 
unable to register on-line at the CCR Web site should be advised to 
submit a written application to CCR for registration into the CCR 
database. USDA employees may assist prospective contractors by 
downloading the registration template, CCR handbook, and other 
information from the CCR Web site and providing copies of that material 
to requesters. Written applications for registration may be submitted to 
Department of Defense Central Contractor Registration, 74 Washington 
Ave., Suite 7, Battle Creek, MI 49017-3084.
    (b) Verification that the prospective contractor is registered in 
the CCR database shall be done via the CCR Internet Web site http://
www.ccr.gov. This verification process using the CCR Web site applies 
both to acquisitions executed using USDA legacy procurement systems and 
the USDA Integrated Acquisition System.
    (c) AGAR Advisories issued by the Office of Procurement and Property 
Management will address internal procedures for integration of 
contractor information in the CCR database with the USDA FFIS payment 
system.

[70 FR 44, Jan. 3, 2005]

                   Subpart 404.70_Precontract Notices



Sec. 404.7001  Solicitation provision.

    The contracting officer shall insert the provision at 452.204-70, 
Inquiries, in all solicitations.

[[Page 150]]

            SUBCHAPTER B_COMPETITION AND ACQUISITION PLANNING

                  PART 405_PUBLICIZING CONTRACT ACTIONS

                Subpart 405.3_Synopses of Contract Awards

Sec.

Sec. 405.303 Announcement of contract awards.

                  Subpart 405.4_Release of Information


Sec. 405.403 Requests from Members of Congress.

Sec. 405.404 Release of long-range acquisition estimates.

Sec. 405.404-1 Release procedures.

                    Subpart 405.5_Paid Advertisements


Sec. 405.502 Authority.

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

    Source: 61 FR 53646, Oct. 15, 1996, unless otherwise noted.

                Subpart 405.3_Synopses of Contract Awards



Sec. 405.303  Announcement of contract awards.

    Contracting officers shall make information available on any 
contract award with an estimated total value over $1 million (including 
options) to their agency congressional liaison office in sufficient time 
for the agency to announce it by 5:00 p.m. Washington, DC time on the 
day of award. The agency congressional liaison office shall, concurrent 
with the public announcement, provide the award announcement information 
to the USDA Congressional Relations Office.

                  Subpart 405.4_Release of Information



Sec. 405.403  Requests from Members of Congress.

    The head of the contracting activity (HCA) is the agency head 
designee pursuant to FAR 5.403.

[61 FR 53646, Oct. 15, 1996, as amended at 70 FR 45, Jan. 3, 2005]



Sec. 405.404  Release of long-range acquisition estimates.



Sec. 405.404-1  Release procedures.

    (a) HCA's shall establish written procedures to control the release 
of long-range acquisition estimates, as authorized under FAR 5.404-1.
    (b) Classified information shall not be released without the 
approval of the Information Security Staff, Personnel and Document 
Security Division, Office of Procurement and Property Management. 
Departmental Manuals and Regulations (3400 series) contain guidance on 
classified information.

[61 FR 53646, Oct. 15, 1996, as amended at 70 FR 45, Jan. 3, 2005]

                    Subpart 405.5_Paid Advertisements



Sec. 405.502  Authority.

    (a) The authority vested in the agency head to authorize publication 
of paid advertisements in newspapers (44 U.S.C. 3702) is delegated, with 
power of redelegation, to HCA's. HCA redelegation of this authority 
shall be in writing.
    (b) Policies and procedures regarding prior authorization required 
for media other than newspapers are contained in USDA Departmental 
Regulations 1400 series.

                    PART 406_COMPETITION REQUIREMENTS

   Subpart 406.2_Full and Open Competition After Exclusion of Sources

Sec.

Sec. 406.202 Establishing or maintaining alternative sources.

           Subpart 406.3_Other Than Full and Open Competition


Sec. 406.302 Circumstances permitting other than full and open 
          competition.

Sec. 406.302-70 Otherwise authorized by law.

                   Subpart 406.5_Competition Advocates


Sec. 406.501 Requirements.


[[Page 151]]


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

    Source: 61 FR 53646, Oct. 15, 1996, unless otherwise noted.

   Subpart 406.2_Full and Open Competition After Exclusion of Sources



Sec. 406.202  Establishing or maintaining alternative sources.

    The Senior Procurement Executive is authorized to make 
determinations pursuant to FAR 6.202(a) and sign the determination and 
findings required by FAR 6.202(b).

           Subpart 406.3_Other Than Full and Open Competition



Sec. 406.302  Circumstances permitting other than full and open 
          competition.



Sec. 406.302-70  Otherwise authorized by law.

    (a) Authority. Section 1472 of the National Agricultural Research, 
Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3318) (the Act) 
authorizes the Secretary of Agriculture to award contracts, without 
competition, to further research, extension, or teaching programs in the 
food and agricultural sciences.
    (b) Limitations. The use of this authority is limited to those 
instances where it can be determined that contracting without full and 
open competition is in the best interest of the Government and necessary 
to the accomplishment of the research, extension, or teaching program. 
Therefore:
    (1) Contracts under the authority of the Act shall be awarded on a 
competitive basis to the maximum practicable extent.
    (2) When full and open competition is not deemed appropriate, the 
contracting officer shall make a written justification on a case-by-case 
basis in accordance with procedures in FAR 6.303 and 6.304.

                   Subpart 406.5_Competition Advocates



Sec. 406.501  Requirements.

    (a) The Chief, Procurement Policy Division, Office of Procurement 
and Property Management, has been designated as the Competition Advocate 
for USDA.
    (b) Each HCA shall designate a competition advocate for the 
contracting activity. The HCA shall forward a copy of the designation 
memorandum to the Competition Advocate for USDA.

[70 FR 45, Jan. 3, 2005]

                      PART 407_ACQUISITION PLANNING

                     Subpart 407.1_Acquisition Plans

Sec.

Sec. 407.103 Agency-head responsibilities.

Sec. 407.170 Advance acquisition plans.

Subpart 407.3 [Reserved]

             Subpart 407.5_Inherently Governmental Functions


Sec. 407.503 Policy.

    Authority: 5 U.S.C. 301 and 40 U.S.C.

    Source: 61 FR 53646, Oct. 15, 1996, unless otherwise noted.

                     Subpart 407.1_Acquisition Plans



Sec. 407.103  Agency-head responsibilities.

    Heads of Contracting Activities (HCA's) shall develop procedures to 
comply with FAR 7.103.



Sec. 407.170  Advance acquisition plans.

    Each HCA shall maintain an advance acquisition planning system.

[70 FR 45, Jan. 3, 2005]

Subpart 407.3 [Reserved]

             Subpart 407.5_Inherently Governmental Functions



Sec. 407.503  Policy.

    (a) HCA's shall establish procedures to ensure that requesting 
activities

[[Page 152]]

provide the written determination required by FAR 7.503(e), when 
submitting requests for procurement of services.
    (b) In the event of a disagreement as to whether the functions to be 
performed are inherently governmental, the HCA may refer the matter to 
the Senior Procurement Executive (SPE) for resolution. When submitting 
disagreements to the SPE for resolution the HCA shall provide a summary 
of the areas of disagreement, supported by the following:
    (1) The HCA's assessment of whether the services are ``inherently 
governmental'';
    (2) The basis for that assessment (include references to the 
definition and policy in FAR subpart 7.5 and/or Office of Federal 
Procurement Policy letter 92-1);
    (3) A copy of the statement of work; and,
    (4) The requesting activity's written determination in accordance 
with FAR 7.503(e).
    (c) Such disagreements shall be resolved prior to issuance of the 
solicitation.

[61 FR 53646, Oct. 15, 1996, as amended at 63 FR 26995, May 15, 1998]

           PART 408_REQUIRED SOURCES OF SUPPLIES AND SERVICES

                 Subpart 408.4_Federal Supply Schedules

Sec.

Sec. 408.404 Using schedules.

Sec. 408.404-3 Requests for waivers.

 Subpart 408.7_Acquisition From Nonprofit Agencies Employing People Who 
                     Are Blind or Severely Disabled


Sec. 408.701 Definitions.

Sec. 408.705 Procedures.

Sec. 408.705-2 Direct order process.

Sec. 408.705-3 Allocation process.

Sec. 408.705-4 Compliance with orders.

Sec. 408.706 Purchase exemptions.

Sec. 408.707 Prices.

Sec. 408.711 Quality complaints.

Sec. 408.712 Specification changes.

Sec. 408.714 Communications with the central nonprofit agencies and the 
          Committee.

       Subpart 408.8_Acquisition of Printing and Related Supplies


Sec. 408.802 Policy.

                Subpart 408.11_Leasing of Motor Vehicles


Sec. 408.1103 Contract requirements.

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

    Source: 61 FR 53646, Oct. 15, 1996, unless otherwise noted.

                 Subpart 408.4_Federal Supply Schedules



Sec. 408.404  Using schedules.



Sec. 408.404-3  Requests for waivers.

    A copy of the request for a waiver and the approval shall be placed 
in the contract file to support the acquisition of items off schedule.

 Subpart 408.7_Acquisition From Nonprofit Agencies Employing People Who 
                     Are Blind or Severely Disabled

    Source: 61 FR 53646, Oct. 15, 1996, unless otherwise noted.

    Editorial Note: Nomenclature changes to subpart 408.7 appear at 70 
FR 45, Jan. 3, 2005.



Sec. 408.701  Definitions.

    Committee Member is the Presidential appointee representing USDA as 
a member of the Committee for Purchase from People Who Are Blind or 
Severely Disabled.
    Organization head is the Under Secretary or Assistant Secretary of a 
mission area or the head of a USDA staff office.

[70 FR 45, Jan. 3, 2005]



Sec. 408.705  Procedures.

    (a) The organization head shall appoint one person as Javits-Wagner-
O'Day Act (JWOD) Liaison to represent the organization and to coordinate 
the organization's actions with the Committee Member.
    (b) JWOD advocates may represent more than one organization. 
Liaisons need not be acquisition officials.
    (c) The organization head shall issue and maintain a performance 
plan to promote and enhance the organization's acquisitions from JWOD 
participating nonprofit agencies.
    (d) The performance plan shall:

[[Page 153]]

    (1) Announce the organization's support for the JWOD Act;
    (2) Establish a promotion program for the products and services 
provided by the JWOD participating nonprofit agencies;
    (3) Provide for the JWOD Liaison's role in acquisition planning;
    (4) Establish measurable program goals for growth or other 
accomplishment in the organization's JWOD program actions; and
    (5) Establish an awards program for successful participation in the 
JWOD program.

[61 FR 53646, Oct. 15, 1996, as amended at 70 FR 45, Jan. 3, 2005]



Sec. 408.705-2  Direct order process.

    (a) The chief of a contracting office may apply to a central 
nonprofit agency for authorization to order specific supplies or 
services directly from a JWOD participating nonprofit agency.
    (b) A copy of the application should be provided to the JWOD Liaison 
who will inform the USDA Committee Member.



Sec. 408.705-3  Allocation process.

    (a) The chief of a contracting office may apply to a central 
nonprofit agency for a production allocation of specific supplies or 
services to a JWOD participating nonprofit agency.
    (b) A copy of the application should be provided to the JWOD Liaison 
who will inform the USDA Committee Member.



Sec. 408.705-4  Compliance with orders.

    Prior to attempting to resolve a failure to perform by a 
participating nonprofit agency with the Committee, the chief of the 
contracting office should provide advance notice to the JWOD Liaison who 
will inform the USDA Committee Member.



Sec. 408.706  Purchase exemptions.

    Prior to applying to the Committee for a purchase exemption, the 
chief of the contracting office should provide advance notice to the 
JWOD Liaison who will inform the USDA Committee Member.



Sec. 408.707  Prices.

    Prior to applying for a price revision, the chief of the contracting 
office should provide advance notice to the JWOD Liaison who will inform 
the USDA Committee Member.



Sec. 408.711  Quality complaints.

    Prior to attempting to resolve a complaint regarding the quality of 
goods or services provided by participating nonprofit agency with the 
Committee, the chief of the contracting office should provide advance 
notice to the JWOD Liaison who will inform the USDA Committee Member.



Sec. 408.712  Specification changes.

    Prior to providing 90-days advance notification to the Committee on 
actions that affect supplies and services on the Procurement List, the 
chief of the contracting office should provide advance notice to the 
JWOD Liaison who will inform the USDA Committee Member.



Sec. 408.714  Communications with the central nonprofit agencies and the 
          Committee.

    Any matter requiring referral to the Committee shall be provided to 
the JWOD Liaison who will coordinate the matter with the Committee 
Member.

       Subpart 408.8_Acquisition of Printing and Related Supplies



Sec. 408.802  Policy.

    (a) The Director, Office of Communications (OC) has been designated 
as the central printing authority in USDA, with the authority to 
represent the USDA before the Joint Committee on Printing (JCP), the 
Government Printing Office, and other Federal and State agencies on all 
matters related to printing.
    (b) Prior to contracting for any of the items defined in FAR 8.801, 
the contracting officer shall verify that the requisite approval has 
been received by the publication liaison officer or requisitioner.
    (c) The approval from OC or the approval authority designated by OC 
shall be maintained in the contract file.

[[Page 154]]

                Subpart 408.11_Leasing of Motor Vehicles



Sec. 408.1103  Contract requirements.

    If the requirement includes the need for the vendor to provide 
operational maintenance such as fueling, lubrication, or other fluid 
changes or replenishment, the contracting officer shall include in the 
contract:
    (1) A requirement for the use of fluids and lubricants containing 
the maximum available amounts of recovered materials, and alternative 
fuels whenever available; and
    (2) A preference for retreaded tires meeting the Federal retread 
specifications, tires with the maximum recovered material content, or 
retreading services for the tires on the vehicle.

[70 FR 45, Jan. 3, 2005]

                   PART 409_CONTRACTOR QUALIFICATIONS

          Subpart 409.4_Debarment, Suspension and Ineligibility

Sec.

Sec. 409.403 Definitions.

Sec. 409.404 List of parties excluded from Federal procurement and 
          nonprocurement programs.

Sec. 409.405 Effect of listing.

Sec. 409.405-1 Continuation of current contracts.

Sec. 409.405-2 Restrictions on subcontracting.

Sec. 409.406 Debarment.

Sec. 409.406-3 Procedures.

Sec. 409.407 Suspension.

Sec. 409.407-3 Procedures.

    Subpart 409.5_Organizational and Consultant Conflicts of Interest


Sec. 409.503 Waiver.

    Authority: 40 U.S.C. 121, 41 U.S.C. 421.

    Source: 61 FR 53646, Oct. 15, 1996, unless otherwise noted.

          Subpart 409.4_Debarment, Suspension and Ineligibility



Sec. 409.403  Definitions.

    Debarring official. Pursuant to the Secretary's delegations of 
authority in 7 CFR 2.24, the Senior Procurement Executive (SPE) is 
designated as the debarring official (Department Debarring Officer) with 
the following exceptions:
    (a) For commodity contracts awarded on behalf of the Commodity 
Credit Corporation (CCC), the Executive Vice President, CCC, or his 
designee is designated as the debarring official pursuant to 7 CFR part 
1407.
    (b) For contracts awarded under the School Lunch and Surplus Removal 
Programs (42 U.S.C. 1755 and 7 U.S.C. 612c), the Department Debarring 
Officer has delegated debarring authority to the Agricultural Marketing 
Service (AMS).

[63 FR 26995, May 15, 1998]



Sec. 409.404  List of parties excluded from Federal procurement and 
          nonprocurement programs.

    The Department Debarring Officer is USDA's single point of contact 
with GSA for debarment and suspension actions taken under this subpart. 
The debarring official for AMS shall notify the Department Debarring 
Officer of each debarment and suspension action by promptly submitting a 
copy of the debarment or suspension notice and any later changes to the 
debarment or suspension status. The Department Debarring Officer will 
forward a copy of each notice to GSA for inclusion in the Government-
wide list.



Sec. 409.405  Effect of listing.

    Compelling reasons are considered to be present where failure to 
contract with the debarred or suspended contractor would seriously harm 
the agency's programs and prevent accomplishment of mission 
requirements. The SPE is authorized to make the determinations under FAR 
9.405. Requests for such determinations shall be submitted through the 
head of the contracting activity (HCA) to the SPE.



Sec. 409.405-1  Continuation of current contracts.

    The HCA is authorized to make the determinations under FAR 9.405-1.



Sec. 409.405-2  Restrictions on subcontracting.

    The HCA is authorized to approve subcontracts with debarred or 
suspended subcontractors under FAR 9.405-2.

[[Page 155]]



Sec. 409.406  Debarment.



Sec. 409.406-3  Procedures.

    (a) Investigation and referral. When a contracting officer becomes 
aware of possible irregularities or any information which may be 
sufficient cause for debarment, the case shall be immediately referred 
through the HCA to the debarring official. The case must be accompanied 
by a complete statement of the facts (including a copy of any criminal 
indictments, if applicable) along with a recommendation for action. 
Where the statement of facts indicates the irregularities to be possible 
criminal offenses, or for any other reason further investigation is 
considered necessary, the matter shall be referred to the HCA who should 
consult with the Office of Inspector General to determine if further 
investigation is required prior to referring to the debarring official.
    (b) Decision-making process. If, after reviewing the recommendations 
and consulting with the Office of Inspector General and Office of the 
General Counsel, as appropriate, the debarring official determines 
debarment is justified, the debarring official shall initiate the 
proposed debarment in accordance with FAR 9.406-3(c) and notify the HCA 
of the action taken.
    (c) Fact-finding proceeding. For actions listed under FAR 9.406-
3(b)(2), the contractor shall be given the opportunity to appear at an 
informal hearing. The hearing should be held at a location and time that 
is convenient to the parties concerned, if at all possible. The 
contractor and any specifically named affiliates may be represented by 
counsel or any duly authorized representative. Witnesses may be called 
by either party. The proceedings shall be conducted expeditiously and in 
such a manner that each party will have an opportunity to present all 
information considered pertinent to the proposed debarment. The 
contractor shall be provided a copy of a transcript of the proceedings 
under the conditions established in FAR 9.406-3(b)(2)(ii).



Sec. 409.407  Suspension.



Sec. 409.407-3  Procedures.

    (a) Investigation and referral. When a contracting officer becomes 
aware of possible irregularities or any information which may be 
sufficient cause for suspension, the case shall be immediately referred 
through the HCA to the debarring official. The case must be accompanied 
by a complete statement of the facts along with a recommendation for 
action. Where the statement of facts indicates the irregularities to be 
possible criminal offenses, or for any other reason further 
investigation is considered necessary, the matter shall be referred to 
the HCA who should consult with the Office of Inspector General to 
determine if further investigation is required prior to referring it to 
the debarring official.
    (b) Decision-making process. If, after reviewing the recommendations 
and consulting with the Office of Inspector General and Office of the 
General Counsel, as appropriate, the debarring official determines 
suspension is justified, the debarring official shall initiate the 
proposed suspension in accordance with FAR 9.407-3(c) and notify the HCA 
of the action taken.
    (c) Fact-finding proceedings. For actions listed under FAR 9.407-
3(b)(2), the contractor shall be given the opportunity to appear at an 
informal hearing, similar in nature to the hearing for debarments as 
discussed in 409.406-3(c).

    Subpart 409.5_Organizational and Consultant Conflicts of Interest



Sec. 409.503  Waiver.

    (a) The HCA, on a non-delegable basis, is authorized to waive any 
general rule or procedure in FAR 9.5 when in the Government's interest.
    (b) Each request for waiver shall include:
    (1) The general rule or procedure proposed to be waived;
    (2) An analysis of the potential conflict, including the benefits 
and detriments to the Government and prospective contractors;

[[Page 156]]

    (3) A discussion of why the conflict cannot be avoided, neutralized, 
or mitigated; and
    (4) Advice of counsel obtained under FAR 9.504(b).

                        PART 410_MARKET RESEARCH

Sec.

Sec. 410.001 Policy.

Sec. 410.002 Procedures.

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

    Source: 70 FR 45, Jan. 3, 2005, unless otherwise noted.



Sec. 410.001  Policy.

    In addition to those uses listed in FAR 10.001, agencies must use 
the results of market research to--
    (a) Ensure the minimum use of hazardous or toxic materials;
    (b) Ensure the maximum use of biobased products and biofuels; and
    (c) Identify products and services on or eligible for addition to 
the Javits-Wagner-O'Day Act Procurement List in order to achieve USDA's 
goal to increase participation in this program.



Sec. 410.002  Procedures.

    Market research must include obtaining information on the commercial 
quality assurance practices as an alternative for Government inspection 
and testing prior to tender for acceptance.

                    PART 411_DESCRIBING AGENCY NEEDS

      Subpart 411.1_Selecting and Developing Requirements Documents

Sec.

Sec. 411.101 Order of precedence for requirements documents.

Sec. 411.103 Market acceptance.

Sec. 411.106 Purchase descriptions for service contracts.

Sec. 411.170 Brand name or equal.

Sec. 411.171 Solicitation provisions and contract clauses.

       Subpart 411.2_Using and Maintaining Requirements Documents


Sec. 411.202 Maintenance of standardization documents.

             Subpart 411.4_Delivery or Performance Schedules


Sec. 411.404 Contract clauses.

                Subpart 411.6_Priorities and Allocations


Sec. 411.600 Scope of subpart.

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

    Source: 61 FR 53646, Oct. 15, 1996, unless otherwise noted.

      Subpart 411.1_Selecting and Developing Requirements Documents



Sec. 411.101  Order of precedence for requirements documents.

    (a) Office of Management and Budget (OMB) Circular A-119 establishes 
a Federal policy requiring the use of voluntary consensus standards in 
lieu of government-unique standards except where inconsistent with law 
or otherwise impractical.
    (b) The HCA is authorized to submit the determination required by 
OMB Circular A-119 that a voluntary standard is inconsistent with law or 
otherwise impracticable. The HCA must submit the determination to OMB 
through the National Institute of Standards and Technology in accordance 
with the Circular with a copy provided to the SPE.

[70 FR 45, Jan. 3, 2005]



Sec. 411.103  Market acceptance.

    (a) The head of the contracting activity (HCA) may determine that 
offerors must demonstrate, in accordance with FAR 11.103(a), the market 
acceptability of their items to be offered.
    (b) The contracting officer shall place a copy of this 
determination, signed by the HCA, in the solicitation file.



Sec. 411.106  Purchase descriptions for service contracts.

    When contract personnel are to be used, the requiring official shall 
record on the requisition his or her determination whether harm to the 
Government might occur should contractor

[[Page 157]]

personnel fail to identify themselves as non-Government officials.

[61 FR 53646, Oct. 15, 1996. Redesignated at 70 FR 45, Jan. 3, 2005]



Sec. 411.170  Brand name or equal.

    (a) A ``brand name or equal'' purchase description shall include the 
following type of information:
    (1) Identification of the item by generic description.
    (2) Make, model number, catalog designation, or other description, 
and identification of a commercial catalog where it is listed.
    (3) Name of manufacturer, producer, or distributor of the item and 
complete address.
    (4) All salient characteristics of the ``brand name or equal'' 
product or products which have been determined by the requisitioner to 
be essential to the Government's minimum requirements.
    (b) [Reserved]



Sec. 411.171  Solicitation provisions and contract clauses.

    (a) Contracting officers shall insert the provision at 452.211-70, 
Brand Name or Equal, in solicitations, other than those for 
construction, where ``brand name or equal'' purchase descriptions are 
used.
    (b) Contracting officers shall insert the clause at 452.211-71, 
Equal Products Offered, in solicitations, other than those for 
construction, where the provision at 452.211-70 is included.
    (c) Contracting officers shall insert the clause at 452.211-72, 
Statement of Work/Specifications, when the description (statement of 
work) or specification(s) is included in Section J of the solicitation.
    (d) Contracting officers shall insert the clause at 452.211-73, 
Attachment to Statement of Work/Specifications, when there are 
attachments to the description (statement of work) or specifications.

[63 FR 26995, May 15, 1998]

       Subpart 411.2_Using and Maintaining Requirements Documents



Sec. 411.202  Maintenance of standardization documents.

    Recommendations for changes to standardization documents are to be 
submitted through the Senior Procurement Executive, who will coordinate 
the submission of these recommendations to the cognizant preparing 
activity.

             Subpart 411.4_Delivery or Performance Schedules



Sec. 411.404  Contract clauses.

    (a) The contracting officer shall insert the clause at 452.211-74, 
Period of Performance, when it is necessary to specify a period of 
performance, beginning on the date of award, date of receipt of notice 
of award, or a specified date.
    (b) The contracting officer shall insert the clause at 452.211-75, 
Effective Period of the Contract, when it is necessary to specify the 
effective period of the contract.

[63 FR 26995, May 15, 1998]

                Subpart 411.6_Priorities and Allocations



Sec. 411.600  Scope of subpart.

    The Defense Priorities and Allocation System (DPAS) excludes USDA 
activities (see 15 CFR 700.18(b)). USDA Contracting Officers are not 
authorized to place rated orders under DPAS.

                PART 412_ACQUISITION OF COMMERCIAL ITEMS

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

[[Page 158]]

   Subpart 412.3_Solicitation Provisions and Contract Clauses for the 
                     Acquisition of Commercial Items



Sec. 412.302  Tailoring of provisions and clauses for the acquisition of 
          commercial items.

    The head of the contracting activity is authorized to approve 
waivers in accordance with FAR 12.302(c). The approved waiver may be 
either for an individual contract or for a class of contracts for the 
specific item. The approved waiver and supporting documentation shall be 
incorporated into the contract file.

[61 FR 53646, Oct. 15, 1996]

[[Page 159]]

           SUBCHAPTER C_CONTRACTING METHODS AND CONTRACT TYPES

               PART 413_SIMPLIFIED ACQUISITION PROCEDURES

              Subpart 413.3_Simplified Acquisition Methods

Sec.

Sec. 413.301 Governmentwide commercial purchase card.

Sec. 413.306 SF 44, Purchase Order-Invoice-Voucher.

Sec. 413.307 Forms.

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

    Source: 64 FR 45895, Aug. 23, 1999, unless otherwise noted.

              Subpart 413.3_Simplified Acquisition Methods



Sec. 413.301  Governmentwide commercial purchase card.

    USDA policy and procedures on use of the Governmentwide commercial 
purchase card are established in Departmental Regulation Series 5000.



Sec. 413.306  SF 44, Purchase Order-Invoice-Voucher.

    The Standard Form 44 (and the previously prescribed USDA Form AD-
744) is not authorized for use within USDA.



Sec. 413.307  Forms.

    Form AD-838, Purchase Order, is prescribed for use by USDA in lieu 
of Optional Forms (OFs) 347 and 348 except that use of the OF 347 and OF 
348 is authorized when utilizing the USDA Integrated Acquisition System.

[70 FR 45, Jan. 3, 2005]

                         PART 414_SEALED BIDDING

                   Subpart 414.2_Solicitation of Bids

Sec.

Sec. 414.201 Preparation of invitations for bids.

Sec. 414.201-6 Solicitation provision.

           Subpart 414.4_Opening of Bids and Award of Contract


Sec. 414.404 Rejection of bids.

Sec. 414.404-1 Cancellation of invitations after opening.

Sec. 414.407 Mistakes in bids.

Sec. 414.407-3 Other mistakes disclosed before award.

Sec. 414.407-4 Mistakes after award.

Sec. 414.409 Information to bidders.

Sec. 414.409-2 Award of classified contracts.

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

    Source: 61 FR 53646, Oct. 15, 1996, unless otherwise noted.

                   Subpart 414.2_Solicitation of Bids



Sec. 414.201  Preparation of invitations for bids.



Sec. 414.201-6  Solicitation provision.

    The contracting officer shall insert the provision 452.214-70, Award 
by Lot, when multiple items are segregated into clearly identifiable 
lots and the contracting officer wants to reserve the right to award by 
item within a lot, if award in that manner would be advantageous to the 
Government.

           Subpart 414.4_Opening of Bids and Award of Contract



Sec. 414.404  Rejection of bids.



Sec. 414.404-1  Cancellation of invitations after opening.

    An acquisition official at a level above the contracting officer is 
authorized to make the determinations under FAR 14.404-1(c) and (e)(1).



Sec. 414.407  Mistakes in bids.



Sec. 414.407-3  Other mistakes disclosed before award.

    The authority to make the determinations under FAR 14.407-3(a), (b), 
and (d) is delegated, without power of redelegation, to the head of the 
contracting activity. The authority to make the determination under FAR 
14.407-3(c) is delegated to the contracting officer. Each determination 
pursuant to FAR 14.407-3 shall have the concurrence of the Office of the 
General Counsel (OGC).

[[Page 160]]



Sec. 414.407-4  Mistakes after award.

    If a mistake in bid is disclosed after award, the contracting 
officer shall make a final determination in accordance with the 
provisions of FAR 14.407-4 (b) and (c) and shall coordinate each 
proposed determination with OGC. Such coordination shall, at a minimum, 
consist of the contracting officer providing the proposed determination 
and the case file to OGC for comment.



Sec. 414.409  Information to bidders.



Sec. 414.409-2  Award of classified contracts.

    Disposition of classified information shall be in accordance with 
Departmental Regulation and Manual (3400 Series) and in accordance with 
direction issued by the Information Security Staff, Personnel and 
Document Security Division, Office of Procurement and Property 
Management.

[70 FR 45, Jan. 3, 2005]

                   PART 415_CONTRACTING BY NEGOTIATION

   Subpart 415.2_Solicitation and Receipt of Proposals and Information

Sec.

Sec. 415.204 Contract format.

Sec. 415.207 Handling proposals and information.

Sec. 415.209 Solicitation provisions and contract clauses.

                     Subpart 415.3_Source Selection


Sec. 415.303 Responsibilities.

Sec. 415.305 Proposal evaluation.

                     Subpart 415.4_Contract Pricing


Sec. 415.404-4 Profit.

Subpart 415.5_Preaward, Award, and Postaward Notifications, Protests and 
                                Mistakes


Sec. 415.570 Post-award conference.

                   Subpart 415.6_Unsolicited Proposals


Sec. 415.604 Agency points of contact.

Sec. 415.606 Agency procedures.

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

    Source: 64 FR 52674, Sept. 30, 1999, unless otherwise noted.

   Subpart 415.2_Solicitation and Receipt of Proposals and Information



Sec. 415.204  Contract format.

    The Senior Procurement Executive is authorized to exempt contracts 
from the uniform contract format.



Sec. 415.207  Handling proposals and information.

    (a) Throughout the source selection process, agency personnel and 
non-Government evaluators with access to proposal information shall 
disclose neither the number of offerors nor their identity except as 
authorized by FAR subpart 15.5. (See also FAR 5.403.)
    (b) The contracting officer shall obtain the following written 
agreement from the non-Government evaluator prior to the release of any 
proposal to that evaluator.

         Agreement Governing the Use and Disclosure of Proposals

RFP_____________________________________________________________________
Offeror_________________________________________________________________
    1. To the best of my knowledge and belief, no conflict of interest 
exists that may diminish my capacity to perform an impartial and 
objective review of the offeror's proposal, or may otherwise result in a 
biased opinion or an unfair advantage. If a potential conflict of 
interest arises or if I identify such a conflict, I agree to notify the 
Government promptly concerning the potential conflict. In determining 
whether any potential conflict of interest exists, I agree to review 
whether my or my employer's relationships with other persons or 
entities, including, but not limited to, ownership of stocks, bonds, 
other outstanding financial interests or commitments, employment 
arrangements (past, present, or under consideration), and, to the extent 
known by me, all financial interests and employment arrangements of my 
spouse, minor children, and other members of my immediate household, may 
place me in a position of conflict, real or apparent, with the 
evaluation proceedings.
    2. I agree to use proposal information only for evaluation purposes. 
I understand that any authorized restriction on disclosure placed upon 
the proposal by the prospective contractor or subcontractor or by the 
Government shall be applied to any reproduction or abstracted 
information of the proposal. I agree to use my best effort to safeguard 
such information physically, and not to disclose the contents of, or 
release any information relating to, the proposal(s) to anyone outside 
of the Source Evaluation Board or other

[[Page 161]]

panel assembled for this acquisition, the Contracting Officer, or other 
individuals designated by the Contracting Officer.
    3. I agree to return to the Government all copies of proposals, as 
well as any abstracts, upon completion of the evaluation.
________________________________________________________________________
(Name and Organization)
________________________________________________________________________
(Date)

                           (End of provision)

    (c) The release of a proposal to a non-Government evaluator for 
evaluation does not constitute the release of information for purposes 
of the Freedom of Information Act (5 U.S.C. 552).
    (d) The contracting officer shall attach a cover page bearing the 
following notice: GOVERNMENT NOTICE FOR HANDLING PROPOSALS--This 
proposal shall be used and disclosed for evaluation purposes only. 
Attach a copy of this Government notice to every reproduction or 
abstract of the proposal. Any authorized restrictive notices which the 
submitter places on this proposal shall be strictly complied with. 
Disclosure of this proposal outside the Government for evaluation 
purposes shall be made only to the extent authorized by, and in 
accordance with, FAR 3.104-4, FAR 15.207, and AGAR 415.207.

[64 FR 52674, Sept. 30, 1999; 64 FR 54963, Oct. 8, 1999, as amended at 
70 FR 46, Jan. 3, 2005]



Sec. 415.209  Solicitation provisions and contract clauses.

    (a) The provision at 452.215-71, Instructions for the Preparation of 
Technical and Business Proposals, may be used when offerors will be 
required to submit technical and business proposals. Contracting 
officers should tailor the clause to reflect the degree of information 
required for the specific acquisition.
    (b) The contracting officer shall insert the provision at 452.215-
72, Amendments to Proposals, in solicitations which require the 
submittal of lengthy, complex technical proposals.

                     Subpart 415.3_Source Selection



Sec. 415.303  Responsibilities.

    The head of the contracting activity (HCA) is authorized to appoint 
an individual other than the contracting officer as the source selection 
authority.



Sec. 415.305  Proposal evaluation.

    HCAs are responsible for establishing procedures regarding the 
release of cost information to the members of the technical evaluation 
team.

                     Subpart 415.4_Contract Pricing



Sec. 415.404-4  Profit.

    (a)(1) USDA will use a structured approach to determine the profit 
or fee prenegotiation objective in acquisition actions when price 
negotiation is based on cost analysis.
    (2) The following types of acquisitions are exempt from the 
requirements of the structured approach, but the contracting officer 
shall comply with FAR 15.404-4(d) when analyzing profit for these 
contracts or actions:
    (i) Architect-engineer contracts;
    (ii) Construction contracts;
    (iii) Contracts primarily requiring delivery of material supplied by 
subcontractors;
    (iv) Termination settlements; and
    (v) Cost-plus-award-fee contracts;
    (b) Unless otherwise restricted by contracting activity procedures, 
the Contracting Officer may use another Federal agency's structured 
approach if that approach has been formalized and is maintained as part 
of that Agency's acquisition regulations (i.e., included in that 
Agency's assigned chapter of title 48 of the Code of Federal 
Regulations).
    (c) The HCA is responsible for establishing procedures to ensure 
compliance with this subpart.

Subpart 415.5_Preaward, Award, and Postaward Notifications, Protests and 
                                Mistakes



Sec. 415.570  Post-award conference.

    If a postaward conference is necessary, the contracting officer 
shall insert clause 452.215-73, Post-Award Conference.

[[Page 162]]

                   Subpart 415.6_Unsolicited Proposals



Sec. 415.604  Agency points of contact.

    HCAs are responsible for establishing procedures to ensure 
compliance with the requirements of FAR 15.604.



Sec. 415.606  Agency procedures.

    HCAs are responsible for establishing the procedures for control of 
unsolicited proposals required by FAR 15.606(a) and for identifying the 
contact points as required by FAR 15.606(b).

                       PART 416_TYPES OF CONTRACTS

Sec.

Sec. 416.000 Scope of part.

                   Subpart 416.2_Fixed-Price Contracts


Sec. 416.203 Fixed-price contracts with economic price adjustment.

Sec. 416.203-4 Contract clauses.

                    Subpart 416.4_Incentive Contracts


Sec. 416.405 Cost-reimbursement incentive contracts.

Sec. 416.405-2 Cost-plus-award-fee contracts.

Sec. 416.406 Contract clauses.

Sec. 416.470 Solicitation provision.

               Subpart 416.5_Indefinite-Delivery Contracts


Sec. 416.505 Ordering.

Sec. 416.506 Solicitation provision and contract clauses.

   Subpart 416.6_Time-and-Materials, Labor-Hour, and Letter Contracts


Sec. 416.603 Letter contracts.

Sec. 416.603-2 Application.

Sec. 416.603-4 Contract clauses.

Sec. 416.670 Contract clauses.

                        Subpart 416.7_Agreements


Sec. 416.702 Basic agreements.

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

    Source: 61 FR 53646, Oct. 15, 1996, unless otherwise noted.



Sec. 416.000  Scope of part.

    Heads of contracting activities (HCA's) are authorized to establish 
written procedures allowing the use of any contract type described in 
FAR part 16 for acquisitions made under simplified acquisition 
procedures in FAR part 13.

                   Subpart 416.2_Fixed-Price Contracts



Sec. 416.203  Fixed-price contracts with economic price adjustment.



Sec. 416.203-4  Contract clauses.

    An economic price adjustment clause based on cost indexes of labor 
or material may be used under the conditions listed in FAR 16.203-4(d) 
after approval by the HCA and consultation with the Office of the 
General Counsel.

                    Subpart 416.4_Incentive Contracts



Sec. 416.405  Cost-reimbursement incentive contracts.



Sec. 416.405-2  Cost-plus-award-fee contracts.

    The HCA may designate an acquisition official other than the 
contracting officer as the fee determination official (FDO) to make the 
final determination of the award fee. The designated official must have 
warranted contracting authority at the same level as the contracting 
officer or higher, and shall not have participated in preparing the 
contractor performance evaluation. If the HCA does not designate an FDO, 
the chief of the contracting office shall act as the FDO.

[61 FR 53646, Oct. 15, 1996. Redesignated at 63 FR 26995, May 15, 1998.]



Sec. 416.406  Contract clauses.

    The contracting officer shall insert a clause substantially the same 
as the clause at 452.216-70, Award Fee, in solicitations and contracts 
which contemplate the award of cost-plus-award-fee contracts.

[61 FR 53646, Oct. 15, 1996. Redesignated at 63 FR 26995, May 15, 1998.]



Sec. 416.470  Solicitation provision.

    The contracting officer shall insert the provision at 452.216-71, 
Base Fee and Award Fee Proposal, in solicitations which contemplate the 
award of a cost-plus-award-fee contract.

[[Page 163]]

               Subpart 416.5_Indefinite-Delivery Contracts



Sec. 416.505  Ordering.

    (a) The Chief, Procurement Policy Division, Office of Procurement 
and Property Management, has been designated as the Departmental Task 
Order Ombudsman.
    (b) Each HCA shall designate a task order ombudsman for the 
contracting activity. The HCA shall forward a copy of the designation 
memorandum to the Departmental Task Order Ombudsman. Contracting 
activity ombudsmen shall review and resolve complaints from contractors 
concerning task or delivery orders placed by the contracting activity.
    (c) Any contractor who is not satisfied with the resolution of a 
complaint by a contracting activity ombudsman may request the 
Departmental Task Order Ombudsman to review the complaint.

[61 FR 53646, Oct. 15, 1996, as amended at 70 FR 46, Jan. 3, 2005]



Sec. 416.506  Solicitation provision and contract clauses.

    (a) The contracting officer shall insert a provision substantially 
the same as the provision at 452.216-72, Evaluation Quantities-
Indefinite-Delivery Contract, in solicitations which contemplate the 
award of indefinite-quantity or requirements contracts to establish the 
basis on which offers will be evaluated.
    (b) The contracting officer shall insert the clause at 452.216-73, 
Minimum and Maximum Contract Amounts, in indefinite-delivery, 
indefinite-quantity contracts when the clause at FAR 52.216-18 is used.

   Subpart 416.6_Time-and-Materials, Labor-Hour, and Letter Contracts



Sec. 416.603  Letter contracts.



Sec. 416.603-2  Application.

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



Sec. 416.603-4  Contract clauses.

    The contracting officer shall insert the clause at 452.216-75, 
Letter Contract, in a definitive contract superseding a letter contract.



Sec. 416.670  Contract clauses.

    The contracting officer shall limit the Government's obligation 
under a time-and-materials or labor-hour contract by inserting the 
clause at 452.216-74, Ceiling Price.

                        Subpart 416.7_Agreements



Sec. 416.702  Basic agreements.

    Promptly after execution by the Government, the HCA shall furnish to 
the Senior Procurement Executive a copy of each basic agreement 
negotiated with contractors in accordance with FAR 16.702.

                  PART 417_SPECIAL CONTRACTING METHODS

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

                          Subpart 417.2_Options



Sec. 417.204  Contracts.

    The head of the contracting activity is authorized to approve 
contracts which exceed the 5 year limitation in FAR 17.204(e).

[61 FR 53646, Oct. 15, 1996]

                           PART 418 [RESERVED]

[[Page 164]]

                   SUBCHAPTER D_SOCIOECONOMIC PROGRAMS

                    PART 419_SMALL BUSINESS PROGRAMS

                         Subpart 419.2_Policies

Sec.

Sec. 419.201 General policy.

Sec. 419.201-70 Office of Small and Disadvantaged Business Utilization 
          (OSDBU).

Sec. 419.201-71 Small business coordinators.

Sec. 419.201-73 Reports.

               Subpart 419.5_Set-Asides for Small Business


Sec. 419.508 Solicitation provisions and contract clauses.

     Subpart 419.6_Certificates of Competency and Determinations of 
                             Responsibility


Sec. 419.602 Procedures.

Sec. 419.602-1 Referral.

Sec. 419.602-3 Resolving differences between the agency and the Small 
          Business Administration.

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

    Source: 61 FR 53646, Oct. 15, 1996, unless otherwise noted.

                         Subpart 419.2_Policies

    Source: 70 FR 46, Jan. 3, 2005, unless otherwise noted.



Sec. 419.201  General policy.

    It is the policy of USDA to provide maximum practicable contracting 
and subcontracting opportunities to small business (SB), small 
disadvantaged business (SDB), HUBZone small business, women-owned 
business (WOB), veteran-owned small business (VOSB), and service-
disabled veteran-owned small business (SDVOSB) concerns.



Sec. 419.201-70  Office of Small and Disadvantaged Business Utilization 
          (OSDBU).

    The Office of Small and Disadvantaged Business Utilization (OSDBU) 
develops rules, policy, procedures and guidelines for the effective 
administration of USDA's small business program that includes all 
categories named under 419.201.



Sec. 419.201-71  Small business coordinators.

    The head of the contracting activity (HCA) or a representative of 
the HCA shall designate in writing a small business coordinator in each 
contracting office. Supervisors of small business coordinators are 
encouraged to provide sufficient time for the coordinators to carry out 
their small business program duties. Coordinators' duties shall include, 
but not be limited to, the following:
    (a) Reviewing each proposed acquisition expected to exceed the 
simplified acquisition threshold prior to its solicitation. The 
coordinator shall:
    (1) Recommend section 8(a), HUBZone, or SDVOSB action and identify 
potential contractors, or
    (2) Identify available SDB, WOB, and VOSB to be solicited by 
competitive procedures. Coordinators shall document the contract file 
with recommendations made and actions taken.
    (b) Participating in goal-setting procedures and planning activities 
and establishing aggressive SDB, WOB, and SDVOSB goals based on the 
annual review of advance acquisition plans.
    (c) Participating in the review of those contracts which require the 
successful offeror to submit written plans for the utilization of small 
businesses as subcontractors to include all preference program areas in 
419.201.
    (d) Ensuring that purchases exceeding $2,500 and not exceeding the 
simplified acquisition threshold are reserved exclusively for small 
businesses, including all preference program areas named in 419.201. 
This policy shall be implemented unless the contracting officer is 
unable to obtain offers from two or more small business concerns that 
are competitive with market prices and in terms of quality and delivery 
of the goods or services being purchased.
    (e) Maintaining comprehensive source listings of small businesses.

[[Page 165]]

    (f) Upon written request, providing small businesses (in the 
preference program areas named in 419.201) the bidders' mailing lists of 
individuals receiving solicitations which will contain the 
subcontracting clause entitled ``Utilization of Small Business 
Concerns'' (FAR 52.219-8). These lists may be limited to those supplies 
or services of major interest to the requesting firms.
    (g) Developing a program of contacts with local and small (to 
include all preference program areas named in 419.201) trade, business, 
and professional associations and organizations and Indian tribal 
councils to apprise them of USDA's program needs and recurring contract 
requirements.
    (h) Periodically meeting with program managers to discuss 
requirements of the small business preference program, to explore the 
feasibility of breaking large complex requirements into smaller lots 
suitable for participation by small firms, and to encourage program 
managers to meet with these firms so that their capabilities can be 
demonstrated.
    (i) Establishing internal operating procedures which implement the 
requirements of the regulations as set forth in this part 419.
    (j) Compiling data and preparing all reports pertaining to the small 
business program activities, and ensuring that these reports are 
accurate, complete and up-to-date.
    (k) Assisting and counseling small business firms.
    (l) Reviewing proposed large contract requirements that may be 
bundled to determine the potential for breaking out components suitable 
for purchase from small business firms.
    (m) Ensuring that the SBA Resident Procurement Center Representative 
(PCR) is provided an opportunity and reasonable time to review any 
solicitation that meets the dollar threshold for small business 
(including all preference program areas named in 419.201) subcontracting 
plans.



Sec. 419.201-73  Reports.

    The Director, OSDBU, shall be responsible for submitting reports 
concerning USDA's progress and achievements in the procurement 
preference program.

               Subpart 419.5_Set-Asides for Small Business



Sec. 419.508  Solicitation provisions and contract clauses.

    The contracting officer shall insert the provision at 452.219-70, 
Size Standard and NAICS Code Information, in solicitations that are set 
aside for small businesses.

[61 FR 53646, Oct. 15, 1996, as amended at 66 FR 49317, Sept. 27, 2001]

     Subpart 419.6_Certificates of Competency and Determinations of 
                             Responsibility



Sec. 419.602  Procedures.



Sec. 419.602-1  Referral.

    Contracting officers shall refer determinations of non-
responsibility regarding small businesses directly to the SBA Regional 
Office servicing the location where the contractor's office (home) is 
located.



Sec. 419.602-3  Resolving differences between the agency and the Small 
          Business Administration.

    The HCA is authorized to appeal the issuance of a COC to SBA 
Headquarters as provided by FAR 19.602-3(a).

[63 FR 26995, May 15, 1998]

                        PARTS 420	421 [RESERVED]

      PART 422_APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS

                   Subpart 422.1_Basic Labor Policies

Sec.

Sec. 422.103 Overtime.

Sec. 422.103-4 Approvals.

       Subpart 422.3_Contract Work Hours and Safety Standards Act


Sec. 422.302 Liquidated damages and overtime pay.

[[Page 166]]

   Subpart 422.4_Labor Standards for Contracts Involving Construction


Sec. 422.404 Davis-Bacon Act wage determinations.

Sec. 422.404-6 Modifications of wage determinations.

Sec. 422.406 Administration and enforcement.

Sec. 422.406-8 Investigations.

             Subpart 422.6_Walsh-Healey Public Contracts Act


Sec. 422.604 Exemptions.

Sec. 422.604-2 Regulatory exemptions.

Sec. 422.608 [Reserved]

               Subpart 422.8_Equal Employment Opportunity


Sec. 422.803 Responsibilities.

Sec. 422.804 Affirmative action programs.

Sec. 422.804-2 Construction.

Sec. 422.807 Exemptions.

 Subpart 422.13_Special Disabled Veterans, Veterans of the Vietnam Era, 
                       and Other Eligible Veterans


Sec. 422.1305 Waivers.

Sec. 422.1308 Complaint procedures.

         Subpart 422.14_Employment of Workers With Disabilities


Sec. 422.1403 Waivers.

Sec. 422.1406 Complaint procedures.

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

    Source: 61 FR 53646, Oct. 15, 1996, unless otherwise noted.

                   Subpart 422.1_Basic Labor Policies



Sec. 422.103  Overtime.



Sec. 422.103-4  Approvals.

    Requests for the use of overtime shall be approved by an acquisition 
official at a level above the contracting officer in accordance with the 
procedures in FAR 22.103-4 (a) and (b).

       Subpart 422.3_Contract Work Hours and Safety Standards Act



Sec. 422.302  Liquidated damages and overtime pay.

    Heads of contracting activities (HCA's) are authorized to review 
determinations of liquidated damages due under section 104(c) of the 
Contract Work Hours and Safety Standards Act, and to take remedial 
action, if appropriate, in accordance with FAR 22.302(c). Contractors or 
subcontractors may request review of administrative determinations of 
liquidated damages by written notice to the contracting officer. The 
contracting officer shall promptly forward appeals of liquidated damages 
determinations to the HCA.

   Subpart 422.4_Labor Standards for Contracts Involving Construction



Sec. 422.404  Davis-Bacon Act wage determinations.



Sec. 422.404-6  Modifications of wage determinations.

    HCA's are authorized to request extension of the 90 day period for 
award after bid opening as provided in FAR 22.404-6(b)(6).



Sec. 422.406  Administration and enforcement.



Sec. 422.406.8  Investigations.

    Reports of violations shall be forwarded to the HCA, who shall 
process such reports in accordance with FAR 22.406-8(d).

             Subpart 422.6_Walsh-Healey Public Contracts Act



Sec. 422.604  Exemptions.



Sec. 422.604-2  Regulatory exemptions.

    The Assistant Secretary for Administration can request the Secretary 
of Labor to exempt contracts from the Walsh-Healey Public Contracts Act 
pursuant to FAR 22.604-2(b). A written finding justifying the request 
for exemption shall be prepared for the Assistant Secretary's signature 
and submitted by the HCA to the Senior Procurement Executive (SPE) for 
referral to the Assistant Secretary.

[61 FR 53646, Oct. 15, 1996, as amended at 70 FR 46, Jan. 3, 2005]

[[Page 167]]



Sec. 422.608  [Reserved]

               Subpart 422.8_Equal Employment Opportunity



Sec. 422.803  Responsibilities.

    The contracting office shall submit questions involving the 
applicability of Executive Order 11246 and FAR subpart 22.8 through the 
HCA to the SPE for resolution.



Sec. 422.804  Affirmative action programs.



Sec. 422.804-2  Construction.

    The HCA shall ensure that each contracting office, awarding 
nonexempt construction contracts, maintains a current listing of covered 
geographical areas subject to affirmative action requirements specifying 
goals for minorities and women in covered construction trades.



Sec. 422.807  Exemptions.

    (a) The Assistant Secretary for Administration is authorized to make 
the determination in FAR 22.807(a)(1) that a contract is essential to 
the national security.
    (b) The contracting officer shall submit requests for exemptions 
under FAR 22.807(a)(1), (a)(2), and (b)(5) through the HCA to the SPE 
for determination by the Assistant Secretary of Administration or 
referral to the Deputy Assistant Secretary for Federal Contract 
Compliance Programs, Department of Labor, as appropriate.

[61 FR 53646, Oct. 15, 1996, as amended at 70 FR 46, Jan. 3, 2005]

 Subpart 422.13_Special Disabled Veterans, Veterans of the Vietnam Era, 
                       and Other Eligible Veterans

    Source: 70 FR 46, Jan. 3, 2005, unless otherwise noted.



Sec. 422.1305  Waivers.

    (a) The Assistant Secretary for Administration is authorized to make 
the waiver determination in FAR 22.1305(b) that a contract is essential 
to the national security.
    (b) The contracting officer shall submit requests for exemptions 
under FAR 22.1305(a) and (b) through the HCA to the SPE for 
determination by the Assistant Secretary for Administration or referral 
to the Deputy Assistant Secretary for Federal Contract Compliance 
Programs, Department of Labor as appropriate.



Sec. 422.1308  Complaint procedures.

    The contracting officer shall forward complaints received about the 
administration of the Vietnam Era Veterans Readjustment Assistance Act 
directly to the Department of Labor as prescribed in FAR 22.1308.

         Subpart 422.14_Employment of Workers With Disabilities



Sec. 422.1403  Waivers.

    (a) The Assistant Secretary for Administration is authorized to make 
the waiver determinations under FAR 22.1403(a) and (b) with the 
concurrence of the Deputy Assistant Secretary for Federal Contract 
Compliance Programs, Department of Labor.
    (b) The contracting officer shall submit requests for waivers 
through the HCA to the SPE for determination by the Assistant Secretary 
for Administration.

[61 FR 53646, Oct. 15, 1996, as amended at 70 FR 46, Jan. 3, 2005]



Sec. 422.1406  Complaint procedures.

    The contracting officer shall forward complaints received about the 
administration of Section 503 of the Rehabilitation Act of 1973, as 
amended, directly to the OFCCP as prescribed in FAR 22.1406.

  PART 423_ENVIRONMENT, ENERGY AND WATER EFFICIENCY, RENEWABLE ENERGY 
       TECHNOLOGIES, OCCUPATIONAL SAFETY, AND DRUG-FREE WORKPLACE

Subpart 423.1 [Reserved]

     Subpart 423.2_Energy and Water Efficiency and Renewable Energy

Sec.

Sec. 423.202 Policy.

[[Page 168]]

                Subpart 423.4_Use of Recovered Materials


Sec. 423.400 Scope of subpart.

Sec. 423.402 [Reserved]

Sec. 423.403 Policy.

Sec. 423.404 Agency affirmative procurement programs.

Sec. 423.405 Procedures.

                    Subpart 423.5_Drug-Free Workplace


Sec. 423.506 Suspension of payments, termination of contract, and 
          debarment and suspension actions.

              Subpart 423.6_Notice of Radioactive Material


Sec. 423.601 Requirements.

 Subpart 423.7_Contracting for Environmentally Preferable Products and 
                                Services


Sec. 423.703 Policy.

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

    Source: 70 FR 47, Jan. 3, 2005, unless otherwise noted.

Subpart 423.1 [Reserved]

     Subpart 423.2_Energy and Water Efficiency and Renewable Energy



Sec. 423.202  Policy.

    Information on Energy Star, energy efficient, water efficient, and 
low standby products covered by this policy is available via the 
Internet at http://www.eere.energy.gov/femp/technologies/eeproducts.cfm.

                Subpart 423.4_Use of Recovered Materials



Sec. 423.400  Scope of subpart.

    This subpart implements and supplements FAR policies and procedures 
for acquiring products and services when preference is given to offers 
of products containing recovered materials. This subpart further 
supplements FAR subpart 23.4 by providing guidance for affirmative 
procurement programs in accordance with Executive Order 13101 and 42 
U.S.C. 6962.



Sec. 423.402  [Reserved]



Sec. 423.403  Policy.

    It is the policy of USDA to acquire and use Environmental Protection 
Agency (EPA) designated recycled content products.



Sec. 423.404  Agency affirmative procurement programs.

    The USDA affirmative procurement program (APP) policy applicable to 
all USDA agencies and staff offices is hereby established. The 
components of this APP include:
    (a) Recovered Materials Preference Program. In accord with the 
requirements of Section 402(c) of Executive Order 13101, Greening the 
Government Through Recycling, Waste Prevention, and Federal Acquisition, 
USDA agencies will include, in all applicable solicitations and 
contracts, a preference for products and services which meet or exceed 
the EPA purchasing guidelines as contained in the EPA product Recovered 
Materials Advisory Notices (RMANs). Agencies may choose an evaluation 
factor preference, or other method of indicating preference in accord 
with their agency needs. Agencies will, as appropriate, eliminate virgin 
material requirements in contract specifications and replace them with a 
statement of preference for recycled materials.
    (b) Promotion program. USDA agencies will actively promote a 
preference for recovered materials, environmentally preferable products, 
and biobased products in contacts with vendors, in written materials, 
and other appropriate opportunities.
    (c) Reasonable estimation of recovered materials used in the 
performance of contracts. USDA agencies annually will provide in writing 
to the USDA Senior Procurement Executive, in response to a call for data 
for the Resource Conservation and Recovery report, reasonable estimates, 
certification, and verification of recovered material used in the 
performance of contracts.
    (d) Annual review and monitoring of effectiveness of the program. 
USDA agencies will provide an annual assessment of the effectiveness of 
their affirmative

[[Page 169]]

procurement program actions in increasing the purchase and use of EPA 
designated products.
    (e) Purchase of EPA designated products. USDA agencies will require 
that 100% of purchases of EPA-designated products contain recovered 
material, unless the item cannot be acquired--
    (1) Competitively within a reasonable time frame;
    (2) Meeting appropriate performance standards; or
    (3) At a reasonable price.
    (f) The 100% purchase requirement of paragraph (e) of this section 
applies to all USDA agency purchases, including those at or below the 
micro-purchase threshold.



Sec. 423.405  Procedures.

    (a) The threshold of purchase for EPA designated items is $10,000 
per year at the USDA departmental, not individual agency, level. 
Therefore, the APP requirements above, including the 100% purchase 
requirement, apply at the individual agency and staff office level.
    (b) Contracting officers should refer to EPA's list of designated 
products and products identified as recycled content when purchasing 
supplies or services. Information on EPA designated products is 
available at: www.epa.gov/cpg/products.htm.
    (c) All agencies and USDA Contracting Officers must take necessary 
actions to carry out the provisions of the USDA APP policy described in 
this subpart.

                    Subpart 423.5_Drug-Free Workplace



Sec. 423.506  Suspension of payments, termination of contract, and 
          debarment and suspension actions.

    (a) The contracting officer may recommend waiver of the 
determination to suspend payments, to terminate a contract, or to debar 
or to suspend a contractor.
    (b) The recommendation shall be submitted through the HCA to the SPE 
and shall include a full description of the disruption of USDA 
operations should the determination not be waived.
    (c) The SPE will submit the request for a waiver to the Secretary 
with a recommendation for action.

              Subpart 423.6_Notice of Radioactive Material



Sec. 423.601  Requirements.

    The HCA shall establish a system of instructions to identify the 
installation/facility radiation protection officer.

 Subpart 423.7_Contracting for Environmentally Preferable Products and 
                                Services



Sec. 423.703  Policy.

    (a) USDA's Affirmative Procurement Program promotes energy-
efficiency, water conservation, and the acquisition of environmentally 
preferable products and services. In its acquisitions, USDA will support 
federal ``green purchasing'' principles in the acquisition of products 
and services that are environmentally preferable or that are biobased 
content products and services.
    (b) USDA agencies will actively promote this preference for 
environmentally preferable products and biobased products in contacts 
with vendors, in written materials, and other appropriate opportunities.

        PART 424_PROTECTION OF PRIVACY AND FREEDOM OF INFORMATION

             Subpart 424.1_Protection of Individual Privacy

Sec.

Sec. 424.103 Procedures.

Sec. 424.104 Contract clauses.

                Subpart 424.2_Freedom of Information Act


Sec. 424.203 Policy.

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

    Source: 61 FR 53646, Oct. 15, 1996, unless otherwise noted.

[[Page 170]]

             Subpart 424.1_Protection of Individual Privacy



Sec. 424.103  Procedures.

    USDA regulations implementing the Privacy Act are found in 7 CFR, 
subtitle A, part 1, subpart G. Contracting officers shall follow these 
regulations when responding to requests for information or awarding 
contracts that will involve the design, development, or operation of a 
system of records on individuals to accomplish agency functions.



Sec. 424.104  Contract clauses.

    When applicable, the contracting officer shall insert the clause at 
452.224-70, Confidentiality of Information, in contracts involving 
confidential information.

                Subpart 424.2_Freedom of Information Act



Sec. 424.203  Policy.

    USDA regulations implementing the Freedom of Information Act are 
found in 7 CFR, Subtitle A, Part 1, Subpart A. Contracting officers 
shall follow these regulations when responding to requests for 
information.

[70 FR 48, Jan. 3, 2005]

                      PART 425_FOREIGN ACQUISITION

                 Subpart 425.1_Buy American Act_Supplies

Sec.

Sec. 425.102 [Reserved]

Sec. 425.103 Exceptions.

Sec. 425.104 Nonavailable articles.

Sec. 425.105 Determining reasonableness of cost.

Sec. 425.108 [Reserved]

          Subpart 425.2_Buy American Act_Construction Materials


Sec. 425.202 Exceptions.

Sec. 425.203-425.204 [Reserved]

Subparts 425.3-425.4 [Reserved]

                      Subpart 425.6_Trade Sanctions


Sec. 425.602 Exceptions.

Subpart 425.9 [Reserved]

        Subpart 425.10_Additional Foreign Acquisition Regulations


Sec. 425.1001 Waiver of right to examination of records.

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

    Source: 61 FR 53646, Oct. 15, 1996, unless otherwise noted.

                 Subpart 425.1_Buy American Act_Supplies

    Source: 70 FR 48, Jan. 3, 2005, unless otherwise noted.



Sec. 425.102  [Reserved]



Sec. 425.103  Exceptions.

    (a) The Senior Procurement Executive (SPE) shall make the 
determination prescribed in FAR 25.103(a).
    (b) Copies of determinations of nonavailability in accordance with 
FAR 25.103(b)(2) or 25.202(a)(2), for articles, material or supplies not 
listed in FAR 25.104, may be submitted to the SPE for submission to the 
Civilian Agency Acquisition Council (CAAC).



Sec. 425.104  Nonavailable articles.

    Information required by FAR 25.104(b) shall be submitted to the SPE 
for submission to the CAAC.



Sec. 425.105  Determining reasonableness of cost.

    The SPE may make the determination prescribed in FAR 25.105(a). 
Requests for a determination by the SPE shall be submitted by the HCA, 
in writing, and shall provide a detailed justification supporting why 
evaluation factors higher than those listed in FAR 25.102(b)(1) and (2) 
should be applied to determine whether the offered price of a domestic 
end product is unreasonable.



Sec. 425.108  [Reserved]

          Subpart 425.2_Buy American Act_Construction Materials



Sec. 425.202  Exceptions.

    (a) The SPE shall make the determination prescribed in FAR 
25.202(a)(1).
    (b) If a contracting officer proposes that the use of a particular 
domestic

[[Page 171]]

construction material should be waived for a contract on the grounds 
that its use would be impracticable, the contracting officer shall 
submit a proposed determination with supporting information through the 
HCA to the SPE for approval or disapproval.

[63 FR 26995, May 15, 1998, as amended at 70 FR 48, Jan. 3, 2005]



Sec. 425.203-425.204  [Reserved]

Subparts 425.3-425.4 [Reserved]

                      Subpart 425.6_Trade Sanctions



Sec. 425.602  Exceptions.

    The Secretary, without power of redelegation, has the authority to 
make the necessary determination(s) and authorize award(s) of 
contract(s) in accordance with FAR 25.602(b).

[70 FR 48, Jan. 3, 2005]

Subpart 425.9 [Reserved]

        Subpart 425.10_Additional Foreign Acquisition Regulations



Sec. 425.1001  Waiver of right to examination of records.

    The SPE shall make the determination under FAR 25.1001(a)(2)(iii).

[70 FR 48, Jan. 3, 2005]

                  PART 426_OTHER SOCIOECONOMIC PROGRAMS

Subpart 426.70 [Reserved]

[[Page 172]]

              SUBCHAPTER E_GENERAL CONTRACTING REQUIREMENTS

                 PART 427_PATENTS, DATA, AND COPYRIGHTS

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

                          Subpart 427.1_General



Sec. 427.104  General guidance.

    As used in FAR part 27, the agency head or agency head designee is 
the Senior Procurement Executive, except under FAR 27.306(a) and (b). 
Under FAR 27.306(a) and (b), the agency head is the Secretary without 
power of redelegation.

[61 FR 53646, Oct. 15, 1996]

                      PART 428_BONDS AND INSURANCE

           Subpart 428.1_Bonds and Other Financial Protections

Sec.

Sec. 428.101 Bid guarantees.

Sec. 428.101-1 Policy on use.

Sec. 428.106 Administration.

Sec. 428.106-6 Furnishing information.

           Subpart 428.2_Sureties and Other Security for Bonds


Sec. 428.203 Acceptability of individual sureties.

Sec. 428.204 Alternatives in lieu of corporate or individual sureties.

Sec. 428.204-2 Certified or cashier's checks, bank drafts, money orders, 
          or currency.

                         Subpart 428.3_Insurance


Sec. 428.307 Insurance under cost-reimbursement contracts.

Sec. 428.307-1 Group insurance plans.

Sec. 428.310 Contract clause for work on a Government installation.

Sec. 428.370 Government-owned vehicles operated in foreign countries.

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

    Source: 61 FR 53646, Oct. 15, 1996, unless otherwise noted.

           Subpart 428.1_Bonds and Other Financial Protections



Sec. 428.101  Bid guarantees.



Sec. 428.101-1  Policy on use.

    The Senior Procurement Executive may authorize class waivers of the 
requirement to obtain bid guarantees.



Sec. 428.106  Administration.



Sec. 428.106-6  Furnishing information.

    Heads of contracting activities (HCA's) or their designees may 
furnish certified copies of bonds and the contracts for which they were 
given as provided by FAR 28.106-6(c). Requesters may be required to pay 
costs of certification and copying established by the Departmental Fee 
Schedule for records requests (7 CFR part 1, subpart A, appendix A).

           Subpart 428.2_Sureties and Other Security for Bonds



Sec. 428.203  Acceptability of individual sureties.

    Evidence of possible criminal or fraudulent activities by an 
individual surety shall be reported to the Office of Inspector General 
in accordance with Departmental Regulations (1700 series).



Sec. 428.204  Alternatives in lieu of corporate or individual sureties.

    HCA's shall establish procedures to ensure protection and conveyance 
of deposited securities of the types listed in FAR 28.204-1 through 
28.204-3.



Sec. 428.204-2  Certified or cashier's checks, bank drafts, money 
          orders, or currency.

    The contracting officer shall insert the provision at 452.228-70, 
Alternative Forms of Security, in a solicitation if a bond is required.

[[Page 173]]

                         Subpart 428.3_Insurance



Sec. 428.307  Insurance under cost-reimbursement contracts.



Sec. 428.307-1  Group insurance plans.

    Under cost-reimbursement contracts, before buying insurance under a 
group insurance plan, the contractor shall submit the plan to the 
contracting officer for review. During review, the contracting officer 
shall use all sources of information available, such as audits, industry 
practice, or other sources of information, to determine whether 
acceptance of the plan submitted would be in the Government's best 
interest.



Sec. 428.310  Contract clause for work on a Government installation.

    The contracting officer shall insert the clause at 452.228-71, 
Insurance Coverage, in solicitations and contracts which include the 
clause at FAR 52.228-5, Insurance--Work on a Government Installation. If 
property liability insurance is required, the contracting officer shall 
use the clause with its Alternate I.



Sec. 428.370  Government-owned vehicles operated in foreign countries.

    USDA is authorized to obtain insurance to cover liability incurred 
by any of its employees while acting within the scope of their 
employment and operating a Government-owned vehicle in a foreign 
country. (7 U.S.C. 2262).

                           PART 429 [RESERVED]

            PART 430_COST ACCOUNTING STANDARDS ADMINISTRATION

Sec.

Sec. 430.070 Definitions.

                 Subpart 430.2_CAS Program Requirements


Sec. 430.201 Contract requirements.

Sec. 430.201-5 Waiver.

Sec. 430.202 Disclosure requirements.

Sec. 430.202-2 Impracticality of submission.

Sec. 430.202-8 Subcontractor Disclosure Statements.

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

    Source: 61 FR 53646, Oct. 15, 1996, unless otherwise noted.



Sec. 430.070  Definitions.

    ACO, as used in this part and in FAR part 30, means administrative 
contracting officer as described in FAR part 42.

                 Subpart 430.2_CAS Program Requirements



Sec. 430.201  Contract requirements.



Sec. 430.201-5  Waiver.

    The Senior Procurement Executive (SPE), without the authority to 
further redelegate, is authorized to request the Cost Accounting 
Standards Board to waive the application of the Cost Accounting 
Standards (CAS). Contracting officers shall prepare waiver requests in 
accordance with 48 CFR chapter 99 (Appendix B, FAR loose-leaf edition), 
subsection 9903.201-5, and submit them to the SPE through the head of 
the contracting activity (HCA).



Sec. 430.202  Disclosure requirements.



Sec. 430.202-2  Impracticality of submission.

    (a) The Secretary, without the power to delegate, is authorized to 
determine, in accordance with FAR part 99 (Appendix B), subsection 
9903.202-2, that the Disclosure Statement is impractical to secure and 
to authorize award without obtaining the Disclosure Statement.
    (b) The request for this determination is to be prepared in 
accordance with FAR part 99 (Appendix B), subsection 9903.202-2 and is 
to contain the proposed report to the CASB.
    (c) Requests for a determination under paragraph (a) of this section 
shall be prepared by the contracting officer and submitted through the 
HCA to the SPE for concurrence and submittal to the Secretary.



Sec. 430.202-8  Subcontractor Disclosure Statements.

    (a) The Secretary, without the power to redelegate, is authorized to 
determine that the Disclosure Statement for a subcontractor is 
impractical to secure and to authorize award without obtaining the 
Disclosure Statement.
    (b) Requests for this determination are to be prepared and forwarded 
as described in 430.202-2.

[[Page 174]]

            PART 431_CONTRACT COST PRINCIPLES AND PROCEDURES

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

                       Subpart 431.1_Applicability



Sec. 431.101  Objectives.

    (a) The SPE is designated as the official authorized to give advance 
approval of an individual deviation concerning cost principles.
    (b) The SPE is designated as the official authorized to give advance 
approval of a class deviation concerning cost principles after 
coordination with the Civilian Agency Acquisition Council.
    (c) Requests for advance approval of class deviations concerning 
cost principles must be submitted to the SPE through the HCA.

[61 FR 53646, Oct. 15, 1996]

                       PART 432_CONTRACT FINANCING

Sec.

Sec. 432.001 Definitions.

Sec. 432.003 Simplified acquisition procedures financing.

Sec. 432.006 Reduction or suspension of contract payments upon finding 
          of fraud.

Sec. 432.006-2 Definitions.

Sec. 432.006-3 Responsibilities.

Sec. 432.006-4 Procedures.

Sec. 432.006-5 Reporting.

Sec. 432.007 Contract financing payments.

          Subpart 432.1_Non-Commercial Item Purchase Financing


Sec. 432.102 Description of contract financing methods.

Sec. 432.103 Progress payments under construction contracts.

Sec. 432.111 Contract clauses for non-commercial purchases.

Sec. 432.113 Customary contract financing.

Sec. 432.114 Unusual contract financing.

            Subpart 432.2_Commercial Item Purchase Financing


Sec. 432.202 General.

Sec. 432.202-1 Policy.

Sec. 432.202-4 Security for Government financing.

Sec. 432.206 Solicitation provisions and contract clauses.

Sec. 432.207 Administration and payment of commercial financing 
          payments.

          Subpart 432.3_Loan Guarantees for Defense Production


Sec. 432.301 Definitions.

         Subpart 432.4_Advance Payments for Non-Commercial Items


Sec. 432.402 General.

Sec. 432.406 Letters of credit.

Sec. 432.407 Interest.

Sec. 432.412 Contract clause.

                      Subpart 432.6_Contract Debts


Sec. 432.601 Definition.

Sec. 432.616 Compromise actions.

                     Subpart 432.7_Contract Funding


Sec. 432.703 Contract funding requirements.

Sec. 432.703-3 Contracts crossing fiscal years.

Sec. 432.770 USDA specific funding limitations.

                   Subpart 432.8_Assignment of Claims


Sec. 432.802 Conditions.

Sec. 432.803 Policies.

Sec. 432.805 Procedure.

Sec. 432.806 Contract clauses.

                      Subpart 432.9_Prompt Payment


Sec. 432.904 Determining payment due dates.

                Subpart 432.10_Performance-Based Payments


Sec. 432.1007 Administration and payment of performance-based payments.

    Authority: 40 U.S.C. 121, 41 U.S.C. 421.

    Source: 61 FR 53646, Oct. 15, 1996, unless otherwise noted.



Sec. 432.001  Definitions.

    The agency contract finance office is the office, other than the 
office of the requisitioner, providing funding or performing funding 
record keeping for the contract action.
    Responsible fiscal authority is that officer in the agency contract 
finance office with the responsibility to ensure that adequate funds are 
available and usable for the intended purpose.



Sec. 432.003  Simplified acquisition procedures financing.

    (a) The chief of the contracting office may approve contract 
financing on a contract to be entered under the simplified acquisition 
procedures. Class approvals may not be made.

[[Page 175]]

    (b) The signed approval must contain the supporting rationale for 
the action and an estimate of the cost and/or risk to the government.



Sec. 432.006  Reduction or suspension of contract payments upon finding 
          of fraud.



Sec. 432.006-2  Definitions.

    (a) The USDA remedy coordination official (RCO) is the Assistant 
Secretary for Administration.
    (b) For the purposes of this part, head of the agency means, 
exclusively, the Secretary or the Deputy Secretary.



Sec. 432.006-3  Responsibilities.

    When a contracting officer suspects that a request for advance, 
partial, or progress payment is based on fraud, the request shall be 
referred directly to the Office of Inspector General (OIG) in accordance 
with their instructions. A copy of the referral shall be submitted 
through the head of the contracting activity (HCA) to the Senior 
Procurement Executive (SPE).



Sec. 432.006-4  Procedures.

    (a) Immediately upon submittal of the referral described in 432.006-
3, the HCA and the contracting officer shall confer with the SPE and 
representatives of the OIG to discuss the potential for reduction or 
suspension of further payments based on the considerations listed in FAR 
32.006-4(d) (1) through (5).
    (b) The SPE will determine whether the contractor has contracts with 
other Departments or contracting activities and will involve them, as 
necessary, in the decision making process.
    (c) The OIG will determine the need for and the extent of an 
investigation.
    (d) Immediately upon completion of the OIG investigation (or, if 
deemed necessary by the OIG and the SPE, before completion of the 
investigation) the SPE, in coordination with the HCA, the contracting 
officer, and the OIG, shall make a report on the action to the RCO.
    (e) Upon receipt of the report, the RCO will submit a recommendation 
to the Secretary.
    (f) Upon receipt of the RCO's report the Secretary will:
    (1) Notify the contractor in writing, allowing 30 calendar days 
after receipt of the notice, that the contractor may submit in writing 
information and arguments in opposition to the recommendation; and
    (2) Consider the RCO's recommendation, the SPE's report, the 
response of the contractor, and any other relevant information in order 
to make an appropriate final determination.
    (g) This determination will be provided to the contractor and to the 
SPE for distribution to the agencies involved and for appropriate action 
under the determination.
    (h) The determination and the supporting documentation will be 
placed in the contract file(s) and a copy will be maintained by the SPE.
    (i) The contracting officer will advise the SPE of the actual date 
of the reduction or suspension action.
    (j) Not later than 150 calendar days after the actual date of the 
reduction or suspension action, the SPE will prepare for the RCO a 
review of the agency head's determination, and will propose a 
recommendation from the RCO to the agency head as to whether the 
reduction or suspension action should continue. The RCO will submit the 
recommendation (including a recommendation for the time period of a 
follow up review) to the agency head. This recommendation will be 
considered by the Secretary and handled as a final action described in 
paragraph (f) of this section.
    (k) The contract may not be closed nor final payment made prior to a 
final determination by the Secretary.



Sec. 432.006-5  Reporting.

    The annual report required by FAR 32.006-5 is to be prepared by the 
SPE and to be submitted to the Secretary within 90 calendar days after 
the end of the fiscal year. When signed by the Secretary, the report is 
to be maintained by the SPE.



Sec. 432.007  Contract financing payments.

    The HCA may prescribe, on a case-by-case basis, a shorter period for 
financing payments.

[61 FR 53646, Oct. 15, 1996. Redesignated at 70 FR 48, Jan. 3, 2005]

[[Page 176]]

          Subpart 432.1_Non-Commercial Item Purchase Financing



Sec. 432.102  Description of contract financing methods.

    Progress payments based on a percentage or stage of completion are 
authorized for use as a payment method under USDA contracts or 
subcontracts for construction, alteration or repair, and shipbuilding 
and conversion. Such payments also are authorized for service contracts, 
if the contracting officer determines that progress payments based on 
costs are not practicable and adequate safeguards are provided to 
administer progress payments based on a percentage or stage of 
completion. For all other contracts, progress payment provisions shall 
be based on costs except that the HCA may authorize progress payments 
based on a percentage or stage of completion on a case-by-case basis. 
Each authorization by the HCA shall include a determination and finding 
that progress payments based on costs cannot be employed practically and 
that there are adequate safeguards provided for the administration of 
progress payments based on a percentage or stage of completion.



Sec. 432.103  Progress payments under construction contracts.

    (a) When approving a progress payment under a construction contract, 
the contracting officer shall indicate the amount to be paid by the 
payment office and include in the contract file the rationale in support 
of the payment.
    (b) When a retainage is made on a progress payment under a 
construction contract, the contracting officer shall place in the 
contract file a written determination stating the reason(s) for the 
retainage.
    (c) When a progress payment under a construction contract has been 
approved, the amount to be paid, the amount of any retainage withheld, 
and the reason(s) for the retainage shall be provided to the contractor 
by the contracting officer in writing before the payment due date.
    (d) When the contractor, under a fixed-price construction contract, 
furnishes evidence to the contracting officer that the surety has been 
paid in full for bond premiums and requests reimbursement, the first 
subsequent progress payment shall include the total amount attributable 
to such bond premiums and the Government shall pay that amount in full. 
This amount paid for the bond premiums is not an amount in addition to 
the stated contract price.



Sec. 432.111  Contract clauses for non-commercial purchases.

    The contracting officer shall insert the clause at 452.232-70, 
Reimbursement for Bond Premiums--Fixed Price Construction Contracts, 
whenever the clause at FAR 52.232-5, Payments under Fixed-Price 
Construction Contracts, is used in a contract.

[61 FR 53646, Oct. 15, 1996, as amended at 63 FR 26995, May 15, 1998]



Sec. 432.113  Customary contract financing.

    The contracting officer may determine the necessity for customary 
contract financing. The determination and finding that customary 
contract financing is needed shall be placed in the contract file.



Sec. 432.114  Unusual contract financing.

    The HCA is authorized to approve unusual contract financing. The 
signed determination and finding supporting this approval shall be 
included in the contract file.

            Subpart 432.2_Commercial Item Purchase Financing



Sec. 432.202  General.



Sec. 432.202-1  Policy.

    In the case of unusual contract financing, the approval by the HCA 
shall be recorded in a determination and finding and maintained in the 
contract file.



Sec. 432.202-4  Security for Government financing.

    Prior to determining that an offeror's financial condition is 
adequate security, the contracting officer must obtain the concurrence 
of the funding activity in the proposed determination.

[[Page 177]]



Sec. 432.206  Solicitation provisions and contract clauses.

    The responsibility for administration of the liquidation provisions 
of a contract may not be transferred from the contracting officer.



Sec. 432.207  Administration and payment of commercial financing 
          payments.

    The responsibility for receiving, reviewing, and approval of 
contract financing requests may not be transferred from the contracting 
officer.

          Subpart 432.3_Loan Guarantees for Defense Production



Sec. 432.301  Definitions.

    Within this subpart, the ``agency'' or ``guaranteeing agency'' is 
the ``head of the contracting activity'' (HCA) and may not be 
redelegated.

         Subpart 432.4_Advance Payments for Non-Commercial Items



Sec. 432.402  General.

    The HCA is designated as the individual responsible for making the 
findings and determination, and for approval of the contract terms 
concerning advance payments.



Sec. 432.406  Letters of credit.

    The HCA is designated as the individual responsible for coordination 
with the Department of Treasury concerning letters of credit.



Sec. 432.407  Interest.

    (a) The HCA is designated as the individual who may authorize, on a 
case by case basis, advance payments without interest for the contract 
types described in FAR 32.407(d)(1), (2), (3), and (4). The signed 
determination and findings supporting these authorizations shall be 
included in the contract files.
    (b) The SPE is designated as the individual who may authorize 
advance payments without interest other than those described in 
paragraph (a) of this section.



Sec. 432.412  Contract clause.

    The decision to use Alternates I or III to clause 52.232-12 must be 
supported by a determination and finding.

                      Subpart 432.6_Contract Debts



Sec. 432.601  Definition.

    Responsible official means the contracting officer.



Sec. 432.616  Compromise actions.

    Compromise of a debt within the proceedings under appeal to the 
Civilian Board of Contract Appeals is the responsibility of the 
contracting officer.

[72 FR 31438, June 7, 2007]

                     Subpart 432.7_Contract Funding



Sec. 432.703  Contract funding requirements.



Sec. 432.703-3  Contracts crossing fiscal years.

    Funds appropriated to USDA may be used for one-year contracts which 
are to be performed in two fiscal years so long as the total amount for 
such contracts is obligated in the year for which the funds are 
appropriated (7 U.S.C. 2209c).



Sec. 432.770  USDA specific funding limitations.

    (a) The USDA is authorized to subscribe for newspapers as may be 
necessary to carry out its authorized work: Provided, that such 
subscriptions shall not be made unless provision is made therefor in the 
applicable appropriation and the cost thereof is not in excess of 
limitations prescribed therein (7 U.S.C. 2258).
    (b) The expenditure of any USDA appropriation for any consulting 
service through any contract, pursuant to section 3109 of Title 5 of the 
U.S. Code shall be limited to those contracts where such expenditures 
are a matter of public record and available for public inspection, 
except where otherwise provided under existing law, or under existing 
Executive Order issued pursuant to existing law (7 U.S.C. 2225a).

[[Page 178]]

                   Subpart 432.8_Assignment of Claims



Sec. 432.802  Conditions.

    Written notices of assignment and a true copy of the assigned 
instrument are to be sent to the contracting officer rather than the 
agency head. Other copies are distributed as directed in FAR 32.802.



Sec. 432.803  Policies.

    The HCA may make a determination of need to include a no-setoff 
commitment in a contract.



Sec. 432.805  Procedure.

    The information described in FAR 32.805 shall be filed with the 
contracting officer.



Sec. 432.806  Contract clauses.

    The contracting officer may make the determination whether to 
include the clause at FAR 52.232-23 in any purchase order expected to 
exceed the micro-purchase threshold.

                      Subpart 432.9_Prompt Payment



Sec. 432.904  Determining payment due dates.

    The payment terms for supplies and services on the Procurement List 
and provided by a Javits-Wagner-O'Day Act participating nonprofit agency 
are governed by FAR 8.709.

[61 FR 53646, Oct. 15, 1996. Redesignated at 70 FR 48, Jan. 3, 2005]

                Subpart 432.10_Performance-Based Payments



Sec. 432.1007  Administration and payment of performance-based payments.

    The responsibility for receiving, reviewing, and approval of 
performance-based payment requests may not be transferred from the 
contracting officer.

                 PART 433_PROTESTS, DISPUTES AND APPEALS

                         Subpart 433.1_Protests

Sec.

Sec. 433.102 General.

Sec. 433.103 Protests to the agency.

Sec. 433.104 [Reserved]

                   Subpart 433.2_Disputes and Appeals


Sec. 433.203 Applicability.

Sec. 433.203-70 Civilian Board of Contract Appeals.

Sec. 433.209 Suspected fraudulent claims.

    Authority: 40 U.S.C. 121, 41 U.S.C. 421.

    Source: 61 FR 53646, Oct. 15, 1996, unless otherwise noted.

                         Subpart 433.1_Protests



Sec. 433.102  General.

    (a) The Senior Procurement Executive (SPE) is responsible for 
coordinating the handling of bid protests lodged with the Government 
Accountability Office (GAO).
    (b) The head of the contracting activity (HCA), on a non-delegable 
basis, may resolve protests and authorize reimbursement of costs in 
accordance with FAR 33.102(b).

[61 FR 53646, Oct. 15, 1996, as amended at 70 FR 48, Jan. 3, 2005]



Sec. 433.103  Protests to the agency.

    (a) Actual or prospective bidders or offerors may file protests 
either with the HCA, as provided by 433.102(b), or with the contracting 
officer. Protesters who file protests with the HCA shall furnish a 
complete copy to the contracting officer no later than 1 day after the 
protest is filed with the HCA.
    (b) When a protest is received, the adjudicating official shall take 
prompt action towards resolution and notify the protester in writing of 
the action taken. The written final decision shall include a paragraph 
substantially as follows:

    This decision shall be final and conclusive unless a further written 
notice of protest is filed with the Government Accountability Office in 
accordance with 4 CFR part 21. Neither the filing of a protest with USDA 
nor the filing of a protest with the Government Accountability Office 
affects your right to file an action in a district court of the United 
States or the United States Court of Federal Claims.

[61 FR 53646, Oct. 15, 1996, as amended at 70 FR 48, Jan. 3, 2005]

[[Page 179]]



Sec. 433.104  [Reserved]

                   Subpart 433.2_Disputes and Appeals



Sec. 433.203  Applicability.

    The Assistant Secretary for Administration is authorized to 
determine the applicability of the Contract Disputes Act to contracts 
with foreign governments pursuant to FAR 33.203.



Sec. 433.203-70  Civilian Board of Contract Appeals.

    The organization, jurisdiction, and functions of the Civilian Board 
of Contract Appeals, together with its Rules of Procedure, are set out 
in 48 CFR part 6101.

[72 FR 31438, June 7, 2007]



Sec. 433.209  Suspected fraudulent claims.

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

[[Page 180]]

             SUBCHAPTER F_SPECIAL CATEGORIES OF CONTRACTING

                    PART 434_MAJOR SYSTEM ACQUISITION

                          Subpart 434.0_General

Sec.

Sec. 434.001 Definitions.

Sec. 434.002 Policy.

Sec. 434.003 Responsibilities.

Sec. 434.004 Acquisition strategy.

Sec. 434.005 General requirements.

Sec. 434.005-6 Full production.

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

    Source: 70 FR 49, Jan. 3, 2005, unless otherwise noted.

                          Subpart 434.0_General



Sec. 434.001  Definitions.

    Pursuant to OMB Circular No. A-109 (A-109) and the definition at FAR 
2.101, within USDA, a system shall be considered a major system if:
    (a) The total acquisition costs (for information technology, life 
cycle costs) are estimated to be $50 million or more, or
    (b) The system, regardless of estimated acquisition or life cycle 
costs, has been specifically designated to be a major system by the USDA 
Acquisition Executive or by the Major Information Technology Systems 
Executive.



Sec. 434.002  Policy.

    In addition to the policy guidance at FAR 34.002 and other parts of 
the FAR, the policies outlined in paragraph 6 of A-109 should serve as 
guidelines for all contracting activities in planning and developing 
systems, major or otherwise.



Sec. 434.003  Responsibilities.

    (a) The Secretary of Agriculture or other designated USDA key 
executive is responsible for making four key decisions in each major 
system acquisition process. These are listed in paragraph 9 of A-109 and 
elaborated on in paragraphs 10 through 13. The key executives of USDA 
(Secretary, Deputy Secretary, Under Secretaries and Assistant 
Secretaries) individually or as a group will participate in this 
decision making process.
    (b) The Chief Information Officer (CIO) is the Major Information 
Technology Systems Executive. For acquisitions of information 
technology, the CIO will ensure that A-109 is implemented in USDA and 
that the management objectives of the Circular are realized. The CIO is 
responsible for designating the program manager for each major 
information technology system acquisition, designating an acquisition to 
be a major information technology system acquisition, and approving the 
written charter and project control system for each major information 
technology system acquisition.
    (c) The Assistant Secretary for Administration (ASA) is the USDA 
Acquisition Executive for major system acquisitions other than 
acquisitions of information technology. The ASA will ensure that A-109 
is implemented in USDA and that the management objectives of the 
Circular are realized. The ASA is responsible for designating the 
program manager for each major system acquisition, designating an 
acquisition to be a major system acquisition, and approving the written 
charter and project control system for each major system acquisition.
    (d) Heads of contracting activities must:
    (1) Ensure compliance with the requirements of A-109, FAR Part 34 
and AGAR Part 434.
    (2) Ensure that potential major system acquisitions are brought to 
the attention of the USDA Acquisition Executive or the Major Information 
Technology Systems Executive, as appropriate.
    (3) Recommend qualified candidates for designation as program 
managers for each major system acquisition within their jurisdiction.
    (4) Ensure that program managers fulfill their responsibilities and 
discharge their duties.
    (5) Cooperate with the ASA and Major Information.
    Technology Systems Executive in implementing the requirements of A-
109.

[[Page 181]]

    (e) The program manager is responsible for planning and executing 
the major system acquisition, ensuring appropriate coordination with the 
USDA Acquisition Executive and Major Information Technology Systems 
Executive and other key USDA executives.



Sec. 434.004  Acquisition strategy.

    (a) The program manager will develop, in coordination with the 
Acquisition Executive or Major Information Technology Systems Executive, 
a written charter outlining the authority, responsibility, 
accountability, and budget for accomplishing the proposed objective.
    (b) The program manager will develop, subject to the approval of the 
Acquisition Executive or Major Information Technology Systems Executive, 
a project control system to schedule, monitor, and regularly report on 
all aspects of the project. The control system shall establish reporting 
periods and milestones consistent with the key decisions listed in 
paragraph 9 of A-109.
    (c) Upon initiation of the project, the program manager will report 
regularly to the Acquisition Executive or Major Information Technology 
Systems Executive.
    (d) Specific procedures and requirements for information technology 
systems are included in the USDA Information Technology Capital Planning 
and Investment Control Guide which can be accessed on the USDA OCIO Web 
site at http://www.ocio.usda.gov.



Sec. 434.005  General requirements.



Sec. 434.005-6  Full production.

    The Secretary or the USDA key executive designated by the Secretary 
for the specific program is the agency head for the purposes of FAR 
34.005-6.

              PART 435_RESEARCH AND DEVELOPMENT CONTRACTING

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



Sec. 435.010  Scientific and technical reports.

    Research and development contracts shall contain a provision 
requiring that the contractor send copies of all scientific and 
technical reports to the National Technical Information Service at the 
address indicated in FAR 35.010(b). The release of research and 
development contract results to other government activities and to the 
private sector is subject to the provisions of FAR subpart 4.4.

[61 FR 53646, Oct. 15, 1996]

         PART 436_CONSTRUCTION AND ARCHITECT-ENGINEER CONTRACTS

      Subpart 436.2_Special Aspects of Contracting for Construction

Sec.

Sec. 436.201 Evaluation of contractor performance.

Sec. 436.203 Government estimate of construction costs.

Sec. 436.204 Disclosure of the magnitude of construction projects.

Sec. 436.205 Statutory cost limitations.

Sec. 436.209 Construction contracts with architect-engineer firms.

Sec. 436.213 Special procedures for sealed bidding in construction 
          contracting.

Sec. 436.213-2 Presolicitation notices.

Subpart 436.3 [Reserved]

                     Subpart 436.5_Contract Clauses


Sec. 436.500 Scope of subpart.

Sec. 436.571 Prohibition against the use of lead-based paint.

Sec. 436.572 Use of premises.

Sec. 436.573 Archeological or historic sites.

Sec. 436.574 Control of erosion, sedimentation, and pollution.

Sec. 436.575 Maximum workweek-construction schedule.

Sec. 436.576 Samples and certificates.

Sec. 436.577 Emergency response.

Sec. 436.578 [Reserved]

Sec. 436.579 Opted timber sale road requirements.

                Subpart 436.6_Architect-Engineer Services


Sec. 436.601 Policy.

Sec. 436.601-3 Applicable contracting procedures.

Sec. 436.602 Selection of firms for architect-engineer contracts.

Sec. 436.602-1 Selection criteria.

Sec. 436.602-2 Evaluation boards.

Sec. 436.602-3 Evaluation board functions.

Sec. 436.602-4 Selection authority.

Sec. 436.602-5 Short selection process for contracts not to exceed the 
          simplified acquisition threshold.

Sec. 436.603 Collecting data on and appraising firms' qualifications.

[[Page 182]]


Sec. 436.604 Performance evaluation.

Sec. 436.605 Government cost estimate for architect-engineer work.

Sec. 436.609 Contract clauses.

Sec. 436.609-1 Design within funding limitations.

Sec. 436.670 Firms ineligible for award--construction.

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

    Source: 61 FR 53646, Oct. 15, 1996, unless otherwise noted.

      Subpart 436.2_Special Aspects of Contracting for Construction



Sec. 436.201  Evaluation of contractor performance.

    Preparation of performance evaluation reports. In addition to the 
requirements of FAR 36.201, performance evaluation reports shall be 
prepared for indefinite-delivery type contracts when either the contract 
maximum or the contracting activity's reasonable estimate of services to 
be ordered exceeds $500,000.00. For these contracts, performance 
evaluation reports shall be prepared for each order at the time of final 
acceptance of the work under the order.



Sec. 436.203  Government estimate of construction costs.

    For acquisitions using sealed bid procedures, the contracting 
officer may disclose the overall amount of the Government's estimate of 
construction costs following identification of the responsive bid most 
advantageous to the Government; verification of that bid's price 
reasonableness; and verification of the bidder's responsibility. For 
acquisitions using other than sealed bid procedures (e.g., negotiation), 
the contracting officer may disclose the overall amount of the estimate 
after contract award.



Sec. 436.204  Disclosure of the magnitude of construction projects.

    In the case of indefinite-delivery type contracts, the reasonable 
estimate of work to be done or the maximum in the solicitation, both 
including all options, is to be used to select the price range. 
Contracting officers may elect to use both a price range for the base 
period of services and the total, inclusive of options, to best describe 
the magnitude of the solicitation.



Sec. 436.205  Statutory cost limitations.

    (a) When it appears that funds available for a project may be 
insufficient for all the desired features of construction, the 
contracting officer may provide in the solicitation for a base bid item 
covering the work generally as specified and for one or more additive or 
deductive bid items which progressively add or omit specified features 
of the work in a stated order of priority. In this case, the contracting 
officer shall insert the provision at 452.236-70, Additive or Deductive 
Items, in solicitations for construction.
    (b) In the alternative to the process in paragraph (a) of this 
section, the contracting officer may use the policies and procedures 
found in FAR 17.2.



Sec. 436.209  Construction contracts with architect-engineer firms.

    The head of the contracting activity (HCA) is authorized to approve 
the award of a contract to construct a project, in whole or in part, to 
the firm (inclusive of its subsidiaries or affiliates) that designed the 
project.



Sec. 436.213  Special procedures for sealed bidding in construction 
          contracting.



Sec. 436.213-2  Presolicitation notices.

    The authority to waive a presolicitation notice is restricted to the 
HCA.

[63 FR 26995, May 15, 1998]

Subpart 436.3 [Reserved]

                     Subpart 436.5_Contract Clauses



Sec. 436.500  Scope of subpart.

    This subpart prescribes clauses for insertion in USDA solicitations 
and contracts for construction and for dismantling, demolition, or 
removal of improvements or structures. The contracting officer shall use 
the clauses as prescribed, in contracts that exceed the simplified 
acquisition threshold. The contracting officer may use the clauses if 
the contract amount is expected to be within the simplified acquisition 
threshold.

[[Page 183]]



Sec. 436.571  Prohibition against the use of lead-based paint.

    The contracting officer shall insert the clause at 452.236-71, 
Prohibition Against the Use of Lead-Based Paint, in solicitations and 
contracts, if the work involves construction or rehabilitation 
(including dismantling, demolition, or removal) of residential 
structures. This clause may be used in contracts for other than 
residential structures.



Sec. 436.572  Use of premises.

    The contracting officer shall insert the clause at 452.236-72, Use 
of Premises, if the contractor will be permitted to use land or premises 
administered by USDA.



Sec. 436.573  Archeological or historic sites.

    The contracting officer shall insert the clause at 452.236-73, 
Archeological or Historic Sites, if the contractor will be working in an 
area where such sites may be found. Use of the clause is optional in 
service contracts for on-the-ground work, e.g., reforestation, 
silvicultural, land stabilization, or other agricultural-related 
projects.



Sec. 436.574  Control of erosion, sedimentation, and pollution.

    The contracting officer shall insert the clause at 452.236-74, 
Control of Erosion, Sedimentation and Pollution, if there is a need for 
applying environmental controls in the performance of work. Use of the 
clause is optional in service contracts for on-the-ground e.g., 
reforestation, silvicultural, land stabilization, or other agricultural-
related projects.



Sec. 436.575  Maximum workweek-construction schedule.

    The contracting officer shall insert the clause at 452.236-75, 
Maximum Workweek-Construction Schedule, if the clause at FAR 52.236-15 
is used and the contractor's work schedule is restricted by access to 
the facility or must be coordinated with the schedule of contract 
administration personnel.

[63 FR 26996, May 15, 1998]



Sec. 436.576  Samples and certificates.

    The contracting officer shall insert the clause at 452.236-76, 
Samples and Certificates, in all contracts.



Sec. 436.577  Emergency response.

    The contracting officer may insert the clause at 452.236-77, 
Emergency Response, in construction contracts awarded for the Forest 
Service.



Sec. 436.578  [Reserved]



Sec. 436.579  Opted timber sale road requirements.

    The contracting officer shall insert the clause at 452.236-79, Opted 
Timber Sale Road Requirements, in road construction contracts resulting 
from a timber sale turnback.

                Subpart 436.6_Architect-Engineer Service



Sec. 436.601  Policy.



Sec. 436.601-3  Applicable contracting procedures.

    The technical official's listing of areas where recovered materials 
cannot be used shall be referred to the contracting activity's official 
designated in accordance with FAR 23.404. A copy of the listing and of 
any approval or disapproval by that official is to be retained in the 
solicitation file.



Sec. 436.602  Selection of firms for architect-engineer contracts.



Sec. 436.602-1  Selection criteria.

    The HCA is authorized to approve the use of design competition under 
the conditions in FAR 36.602-1(b).



Sec. 436.602-2  Evaluation boards.

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

[[Page 184]]



Sec. 436.602-3  Evaluation board functions.

    The selection report required in FAR 36.602-3(d) shall be prepared 
for the approval of the HCA. The HCA may authorize an acquisition 
official above the level of the contracting officer to execute the 
required approval.



Sec. 436.602-4  Selection authority.

    (a) The HCA shall serve as the selection authority in accordance 
with FAR 36.602-4. The HCA may authorize an acquisition official above 
the level of the contracting officer to serve as the selection 
authority.
    (b) A copy of the final selection, inclusive of the supporting 
documents, shall be provided to the contracting officer and maintained 
in the solicitation file.



Sec. 436.602-5  Short selection process for contracts not to exceed the 
          simplified acquisition threshold.

    The HCA may include either or both procedures in FAR 36.602-5 in the 
procedures for evaluation boards.



Sec. 436.603  Collecting data on and appraising firms' qualifications.

    (a) HCA's which require architect-engineer services shall establish 
procedures to comply with the requirements of FAR 36.603.
    (b) The procedures shall include a list of names, addresses, and 
phone numbers of offices or boards assigned to maintain architect-
engineer qualification data files. The list shall be updated annually.



Sec. 436.604  Performance evaluation.

    Preparation of performance evaluation reports. (a) In addition to 
the requirements of FAR 36.604, performance evaluation reports shall be 
prepared for indefinite-delivery type contracts when either the contract 
maximum or the contracting activities reasonable estimate of services to 
be ordered exceeds $25,000.00. For these contracts, performance 
evaluation reports shall be prepared for each order at the time of final 
acceptance of the work under the order.
    (b) The contracting officer may require a performance evaluation 
report on the work done by the architect-engineer after the completion 
of or during the construction of the designed project.



Sec. 436.605  Government cost estimate for architect-engineer work.

    The contracting officer may release the Government's total cost 
estimate in accordance with FAR 36.605(b).



Sec. 436.609  Contract clauses.



Sec. 436.609-1  Design within funding limitations.

    (a) Should the head of the contracting activity appoint a designee 
to make the determination in FAR 36.609-1(c)(1), the appointment may be 
to one no lower than the official authorized to commit program funds for 
the work being acquired.
    (b) The contracting officer, with the advice of appropriate 
technical representatives, may make the determination in FAR 36.609-
1(c)(2) or (3).
    (c) A copy of the determinations described in paragraph (b) and (c) 
of this section shall be maintained in the contract file.



Sec. 436.670  Firms ineligible for award--construction.

    The contracting officer shall insert the clause at 452.236-80, Firms 
Ineligible For Award--Construction, in the contract for architect-
engineering services except as provided in FAR 36.209 and AGAR 436.209.

                      PART 437_SERVICE CONTRACTING

                 Subpart 437.1_Service Contracts_General

Sec.

Sec. 437.104 Personal services contracts.

Sec. 437.110 Solicitation provisions and contract clauses.

             Subpart 437.2_Advisory and Assistance Services


Sec. 437.203 Policy.

Sec. 437.204 Guidelines for determining availability of personnel.

Sec. 437.270 Solicitation provisions and contract clauses.

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

    Source: 61 FR 53646, Oct. 15, 1996, unless otherwise noted.

[[Page 185]]

                 Subpart 437.1_Service Contracts_General



Sec. 437.104  Personal services contracts.

    USDA has the following specific statutory authorities to contract 
for personal services:
    (a) Section 706(a) of the Organic Act of 1944 (7 U.S.C. 2225) 
authorizes contracting with persons or organizations on a temporary 
basis, without regard to civil service compensation classification 
standards in 5 U.S.C., Chapter 51 and Subchapter III of Chapter 53, 
Provided:
    (1) That no expenditures shall be made unless specifically provided 
for in the applicable appropriation, and
    (2) Expenditures do not exceed any limitations prescribed in the 
appropriation.
    (b) 7 U.S.C. 1627 authorizes the Secretary of Agriculture to 
contract with technically qualified persons, firms or organizations to 
perform research, inspection, classification, technical, or other 
special services, without regard to the civil-service laws, Provided: it 
is for a temporary basis and for a term not to exceed six months in any 
fiscal year.



Sec. 437.110  Solicitation provisions and contract clauses.

    (a) The contracting officer shall insert a clause substantially the 
same as the clause at 452.237-70, Loss Damage, Destruction or Repair, in 
contracts for equipment rental, whether the equipment is furnished with 
or without operator.
    (b) The contracting officer shall insert a provision substantially 
the same as the clause at 452.237-71, Pre-Bid/Pre-Proposal Conference, 
in all solicitations if a conference with prospective offerors will be 
held prior to the submittal of bids or proposals.
    (c) The contracting officer shall insert the provision at 452.237-
73, Equipment Inspection visit, in solicitations if work is to be done 
on Government equipment and an offeror's inspection is encouraged for an 
understanding of the work to be performed prior to submittal of bids or 
proposals.
    (d) The contracting officer shall insert a clause substantially the 
same as the clause at 452.237-74, Key Personnel, in contracts if 
contract performance requires identification of the contractor's key 
personnel.
    (e) The contracting officer shall insert a clause substantially the 
same as the clause at 452.237-75, Restrictions Against Disclosure, in 
service contracts (including architect-engineer contracts) requiring 
restrictions on release of information developed or obtained in 
connection with performance of the contract.

             Subpart 437.2_Advisory and Assistance Services



Sec. 437.203  Policy.

    Contracting for advisory and assistance services is subject to the 
policy and procedures in Departmental Regulations (5000 series).



Sec. 437.204  Guidelines for determining availability of personnel.

    The head of the contracting activity (HCA) is authorized to approve 
the use of non-Government evaluators in proposal evaluation. Each such 
decision shall be supported by a written determination in accordance 
with FAR 37.204.

[64 FR 52675, Sept. 30, 1999]



Sec. 437.270  Solicitation and contract clauses.

    (a) The contracting officer shall insert a clause substantially the 
same as the clause at 452.237-76, Progress Reporting, in all contracts 
for advisory and assistance services. It may also be used in other 
service contracts.
    (b) The contracting officer shall insert a clause substantially the 
same as the clause at 452.237-78, Contracts with Consulting Firms for 
Services, in solicitations and contracts for consulting services which 
prohibit follow-on contracts with the contracting firm.

                           PART 438 [RESERVED]

             PART 439_ACQUISITION OF INFORMATION TECHNOLOGY

                          Subpart 439.1_General

Sec.

Sec. 439.101 Policy.


[[Page 186]]


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

                          Subpart 439.1_General



Sec. 439.101  Policy.

    (a) In addition to policy and regulatory guidance contained in the 
FAR and AGAR:
    (1) The USDA Information Technology Capital Planning and Investment 
Control Guide (CPIC) establishes requirements for the acquisition of 
information technology.
    (2) Specific thresholds at which USDA Office of the Chief 
Information Officer Information Technology Acquisition Approval is 
required have been established.
    (3) The procurement authority delegated to USDA Agencies is 
established in Departmental Regulations 5000 series.
    (4) The CPIC Guide and USDA CIO policy and procedural guidance are 
available on the USDA OCIO Web site at http://www.ocio.usda.gov. Notices 
of changes in the Information Technology Acquisition Approval Thresholds 
are also promulgated by AGAR Advisory.
    (b) Acquisition of on-line courseware libraries and learning 
management system services requires specific approval of the ASA and 
CIO. Information regarding the specific approval requirements and 
processes is promulgated by AGAR Advisory.

[70 FR 49, Jan. 3, 2005]

                           PART 440 [RESERVED]

                PART 441_ACQUISITION OF UTILITY SERVICES

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

                Subpart 441.2_Acquiring Utility Services



Sec. 441.201  Policy.

    As used in FAR 41.201(d)(2)(i) and 41.201(d)(3) the Federal agency 
head designee is the head of the contracting activity.

[61 FR 53646, Oct. 15, 1996]

[[Page 187]]

                    SUBCHAPTER G_CONTRACT MANAGEMENT

                    PART 442_CONTRACT ADMINISTRATION

  Subpart 442.1_Interagency Contract Administration and Audit Services

Sec.

Sec. 442.102 Procedures.

            Subpart 442.15_Contractor Performance Information


Sec. 442.1502 Policy.

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

    Source: 61 FR 53646, Oct. 15, 1996, unless otherwise noted.

  Subpart 442.1_Interagency Contract Administration and Audit Services



Sec. 442.102  Procedures.

    (a) The Office of Inspector General (OIG), Audit Division, has 
established a cross-servicing arrangement with the Defense Contract 
Audit Agency (DCAA) to provide contract audit services required by the 
FAR.
    (b) All contract audit services required by contracting officers, 
except those which can be accomplished in-house, shall be coordinated 
through the cognizant OIG Regional Inspector General--Auditing (RIG-A). 
Cognizance is determined on the basis of the contractor's location. 
There is no charge for DCAA audit services coordinated through OIG.
    (c) In order to ensure compliance with this requirement and to 
evaluate the results of audits, contracting officers shall forward to 
the RIG-A copies of all price negotiation memoranda prepared for 
contracts and contract modifications in excess of $500,000.

            Subpart 442.15_Contractor Performance Information



Sec. 442.1502  Policy.

    The Contractor Performance System (CPS), developed by the National 
Institutes of Health, is designated as the single USDA-wide system for 
maintaining contractor performance/evaluation information. Use of the 
CPS is mandatory. As a minimum, the CPS shall be accessed for contractor 
past performance information as part of proposal evaluation in 
accordance with FAR subpart 15.3, and information resulting from the 
evaluation of contractor performance in accordance with FAR subpart 
42.15 shall be entered into and maintained in this system. The CPS is a 
part of the USDA Acquisition Toolkit which can be accessed from the USDA 
Procurement Homepage at http://www.usda.gov/procurement/.

[66 FR 49867, Oct. 1, 2001]

                        PARTS 443	444 [RESERVED]

                      PART 445_GOVERNMENT PROPERTY

       Subpart 445.3_Providing Government Property to Contractors

Sec.

Sec. 445.302 Providing facilities.

Sec. 445.302-1 Policy.

     Subpart 445.4_Contractor Use and Rental of Government Property


Sec. 445.403 Rental--Use and Charges clause.

Sec. 445.407 Non-Government use of plant equipment.

Subpart 445.6 [Reserved]

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

    Source: 61 FR 53646, Oct. 15, 1996, unless otherwise noted.

       Subpart 445.3_Providing Government Property to Contractors



Sec. 445.302  Providing facilities.



Sec. 445.302-1  Policy.

    Heads of contracting activities (HCA's) are authorized to make 
determinations for providing facilities to a contractor as prescribed in 
FAR 45.302-1(a)(4).

[[Page 188]]

     Subpart 445.4_Contractor Use and Rental of Government Property



Sec. 445.403  Rental--Use and Charges clause.

    HCA's are authorized to make determinations for charging rent on the 
basis of use under the Use and Charges clause in FAR 52.245-9 as 
prescribed in FAR 45.403(a).



Sec. 445.407  Non-Government use of plant equipment.

    Requests for non-Government use of plant equipment as prescribed in 
FAR 45.407 shall be submitted by the HCA to the Senior Procurement 
Executive (SPE) for approval.

Subpart 445.6 [Reserved]

                       PART 446_QUALITY ASSURANCE

    Authority: 5 U.S.C. 30 and 40 U.S.C. 486(c).

                     Subpart 446.3_Contract Clauses



Sec. 446.370  Inspection and acceptance.

    The Contracting Officer shall insert the clause at 452.246-70, 
Inspection and Acceptance, in contracts where inspection and acceptance 
will be performed at the same location. The clause with its Alternate I 
is for use when inspection and acceptance will be performed at different 
locations.

[61 FR 53646, Oct. 15, 1996]

                         PART 447_TRANSPORTATION

            Subpart 447.3_Transportation in Supply Contracts

Sec.

Sec. 447.302 Place of delivery--F.O.B. point.

Sec. 447.305 Solicitation provisions, contract clauses, and 
          transportation factors.

Sec. 447.305-10 Packing, marking, and consignment instructions.

    Authority: 5 U.S.C. 30 and 40 U.S.C. 486(c).

    Source: 61 FR 53646, Oct. 15, 1996, unless otherwise noted.

            Subpart 447.3_Transportation in Supply Contracts



Sec. 447.302  Place of delivery--F.O.B. point.

    The contracting officer shall insert a clause substantially the same 
as the clause at 452.247-70, Delivery Location, in supply contracts when 
it is necessary to specify delivery locations. If appropriate, the 
clause may reference an attachment which lists various delivery 
locations and other delivery details (e.g., quantities to be delivered 
to each location, etc.).



Sec. 447.305  Solicitation provisions, contract clauses, and 
          transportation factors.



Sec. 447.305-10  Packing, marking, and consignment instructions.

    (a) The contracting officer shall insert a clause substantially the 
same as the clause at 452.247-71, Marking Deliverables, in solicitations 
and contracts if special marking on deliverables (other than reports) 
are required.
    (b) The contracting officer shall insert the clause at 452.247-72, 
Packing for Domestic Shipment, in contracts when item(s) will be 
delivered for immediate use to a destination in the continental United 
States; when the material specification or purchase description does not 
provide preservation, packaging, packing, and/or marking requirements; 
and/or when the requiring activity has not cited a specific 
specification for packaging.
    (c) The contracting officer shall insert the clause at 452.247-73, 
Packing for Overseas Shipment, in contracts when item(s) will be 
delivered to an overseas destination for immediate use, the material 
specification does not specify packing levels, and the required activity 
has not specified such requirements.

                           PART 448 [RESERVED]

[[Page 189]]

                    PART 449_TERMINATION OF CONTRACTS

                    Subpart 449.1_General Principles

Sec.

Sec. 449.106 Fraud or other criminal conduct.

Sec. 449.111 Review of proposed settlements.

                  Subpart 449.4_Termination for Default


Sec. 449.402 Termination of fixed-price contracts for default.

Sec. 449.402-3 Procedure for default.

               Subpart 449.5_Contract Termination Clauses


Sec. 449.501 General.

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

    Source: 61 FR 53646, Oct. 15, 1996, unless otherwise noted.

                    Subpart 449.1_General Principles



Sec. 449.106  Fraud or other criminal conduct.

    (a) If the contracting officer suspects fraud or other criminal 
conduct a written report documenting the facts shall be submitted by the 
head of the contracting activity (HCA) to the Office of Inspector 
General. Copies of documents or other information connected with the 
suspected fraud or criminal conduct shall be provided with the report. 
Concurrently, a copy of the report shall also be submitted to the Senior 
Procurement Executive.
    (b) Depending on the findings of the Office of Inspector General, 
the HCA may initiate suspension or debarment action as prescribed in FAR 
part 9.4 and part 409.4.



Sec. 449.111  Review of proposed settlements.

    Proposed settlement agreements shall be reviewed and approved in 
accordance with contracting activity procedures.

                  Subpart 449.4_Termination for Default



Sec. 449.402  Termination of fixed-price contracts for default.



Sec. 449.402-3  Procedure for default.

    In addition to the requirements of FAR 49.402-3(g), the notice of 
termination shall contain instructions regarding the disposition of any 
Government property in the possession of the contractor (see FAR 45.508-
1) and, in the case of construction contracts, such materials, 
appliances, and structures as may be on the site of the construction 
work. The notice shall also contain a statement concerning the liability 
of the contractor or its surety for any liquidated damages (see FAR 
49.402-7).

               Subpart 449.5_Contract Termination Clauses



Sec. 449.501  General.

    Use of special purpose termination clauses pursuant to the authority 
of FAR 49.501 shall be approved in advance by the HCA.

               PART 450_EXTRAORDINARY CONTRACTUAL ACTIONS

Sec.

Sec. 450.001 Definitions.

Subpart 450.1 [Reserved]

  Subpart 450.2_Delegation of and Limitations on Exercise of Authority


Sec. 450.201 Delegation of authority.

                   Subpart 450.3_Contract Adjustments


Sec. 450.303 Contract adjustment.

Sec. 450.303-1 Contractor requests.

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

    Source: 61 FR 53646, Oct. 15, 1996, unless otherwise noted.



Sec. 450.001  Definitions.

    Approving authority, as used in this part, means the Assistant 
Secretary for Administration.
    Secretarial level, as used in this part means the Assistant 
Secretary for Administration.

[[Page 190]]

Subpart 450.1 [Reserved]

  Subpart 450.2_Delegation of and Limitations on Exercise of Authority



Sec. 450.201  Delegation of authority.

    The Assistant Secretary for Administration is authorized to approve 
all actions under FAR part 50 except indemnification actions listed in 
FAR 50.201(d) which must be approved by the Secretary, without power of 
delegation.

                   Subpart 450.3_Contract Adjustments



Sec. 450.303  Contract adjustment.



Sec. 450.303-1  Contractor requests.

    Contractor requests shall be submitted to the contracting officer.

                           PART 451 [RESERVED]

[[Page 191]]

                     SUBCHAPTER H_CLAUSES AND FORMS

          PART 452_SOLICITATION PROVISIONS AND CONTRACT CLAUSES

              Subpart 452.2_Texts of Provisions and Clauses

Sec.

Sec. 452.204-70 Inquiries.

Sec. 452.211-70 Brand Name or Equal.

Sec. 452.211-71 Equal Products Offered.

Sec. 452.211-72 Statement of Work/Specifications.

Sec. 452.211-73 Attachments to Statement of Work/Specifications.

Sec. 452.211-74 Period of Performance.

Sec. 452.211-75 Effective Period of the Contract.

Sec. 452.214-70 Award by Lot.

Sec. 452.215-71 Instructions for the Preparation of Technical and 
          Business Proposals.

Sec. 452.215-72 Amendments to Proposals.

Sec. 452.215-73 Post Award Conference.

Sec. 452.216-70 Award Fee.

Sec. 452.216-71 Base Fee and Award Fee Proposal.

Sec. 452.216-72 Evaluation Quantities--Indefinite-Delivery Contract.

Sec. 452.216-73 Minimum and Maximum Contract Amounts.

Sec. 452.216-74 Ceiling Price.

Sec. 452.216-75 Letter Contract.

Sec. 452.219-70 Size Standard and NAICS Code Information.

Sec. 452.224-70 Confidentiality of Information.

Sec. 452.226-70--452.226-72 [Reserved]

Sec. 452.228-70 Alternative Forms of Security.

Sec. 452.228-71 Insurance Coverage.

Sec. 452.232-70 Reimbursement for Bond Premiums--Fixed-Price 
          Construction Contracts.

Sec. 452.236-70 Additive or Deductive Items.

Sec. 452.236-71 Prohibition Against the Use of Lead-Based Paint.

Sec. 452.236-72 Use of Premises.

Sec. 452.236-73 Archaeological or Historic Sites.

Sec. 452.236-74 Control of Erosion, Sedimentation, and Pollution.

Sec. 452.236-75 Maximum Workweek--Construction Schedule.

Sec. 452.236-76 Samples and Certificates.

Sec. 452.236-77 Emergency Response.

Sec. 452.236-78 [Reserved]

Sec. 452.236-79 Opted Timber Sale Road Requirements.

Sec. 452.236-80 Firms Ineligible for Award--Construction.

Sec. 452.237-70 Loss, Damage, Destruction or Repair.

Sec. 452.237-71 Pre-Bid/Pre-Proposal Conference.

Sec. 452.237-73 Equipment Inspection Visit.

Sec. 452.237-74 Key Personnel.

Sec. 452.237-75 Restrictions Against Disclosure.

Sec. 452.237-76 Progress Reporting.

Sec. 452.237-78 Contracts with Consulting Firms for Services.

Sec. 452.246-70 Inspection and Acceptance.

Sec. 452.247-70 Delivery Location.

Sec. 452.247-71 Marking Deliverables.

Sec. 452.247-72 Packing for Domestic Shipment.

Sec. 452.247-73 Packing for Overseas Shipment.

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

    Source: 61 FR 53646, Oct. 15, 1996, unless otherwise noted.

              Subpart 452.2_Texts of Provisions and Clauses



Sec. 452.204-70  Inquiries.

    As prescribed in 404.7001, insert the following provision:

                          Inquiries (FEB 1988)

    Inquiries and all correspondence concerning this solicitation should 
be submitted in writing to the Contracting Officer. Offerors should 
contact only the Contracting Officer issuing the solicitation about any 
aspect of this requirement prior to contract award.

                           (End of provision)



Sec. 452.211-70  Brand Name or Equal.

    As prescribed in 411.171, insert the following provision:

                     Brand Name or Equal (NOV 1996)

    (As used in this provision, the term ``brand name'' includes 
identification of products by make and model.)
    (a) If items called for by this solicitation have been identified 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. Offers of 
``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 offer (see clause 
452.211-71) and are determined by the Contracting Officer to meet fully 
the salient characteristics requirements listed in the solicitation.
    (b) Unless the offeror clearly indicates in its offer that it is 
offering an ``equal'' product, the offeror shall be considered as 
offering the brand name product(s) referenced in the solicitation.
    (c)(1) If the offeror proposes to furnish an ``equal'' product or 
products, the brand

[[Page 192]]

name(s), if any, and any other required information about the product(s) 
to be furnished shall be inserted in the space provided in the 
solicitation. The evaluation of offers and the determination as to the 
equality of the product(s) offered shall be the responsibility of the 
Government and will be based on information furnished by the offeror or 
identified in its offer as well as other information reasonably 
available to the contracting activity. Caution to offerors: The 
contracting activity is not responsible for locating or securing any 
information which is not identified in the offer and is not reasonably 
available to the contracting activity. Accordingly, to assure that 
sufficient information is available, the offeror must furnish as a part 
of its offer all descriptive material (such as cuts, illustrations, 
drawings, or other information) necessary for the contracting activity 
to (i) determine whether the product offered meets the salient 
characteristics requirement of the solicitation, and (ii) establish 
exactly what the offeror proposes to furnish and what the Government 
would be binding itself to purchase by making an award. The information 
furnished may include specific reference to information previously 
furnished or to information otherwise available to the contracting 
activity.
    (2) If an offeror proposes to modify a product so as to make it 
conform to the requirements of the solicitation, the offer shall include 
(i) a clear description of such proposed modifications and (ii) clearly 
marked descriptive material to show the proposed modifications.

                           (End of provision)

[61 FR 53646, Oct. 15, 1996. Redesignated at 63 FR 26996, May 15, 1998, 
as amended at 70 FR 50, Jan. 3, 2005]



Sec. 452.211-71  Equal Products Offered.

    As prescribed in 411.171, insert the following or substantially the 
same clause in solicitations seeking offers on a ``brand name or equal'' 
basis to allow offerors the opportunity to clearly identify the 
``equal'' item being offered, and to illustrate how that item meets the 
salient characteristics requirements of the Government.

                    Equal Products Offered (NOV 1996)

    (a) Offerors proposing to furnish an ``equal'' product, in 
accordance with the ``Brand Name or Equal'' provision of this 
solicitation, shall provide the following information for each offered 
``equal'' product:
Contract Line Item Number (if any):_____________________________________
Brand Name or Equal Product identified by the Government in this 
solicitation:___________________________________________________________
Offered Product Name:___________________________________________________
Catalog Description or part number:_____________________________________
________________________________________________________________________
Manufacturer's Name:____________________________________________________
Manufacturer's Address:_________________________________________________
________________________________________________________________________
________________________________________________________________________
    (b) Offerors are responsible for submitting all additional 
information on the above product necessary for the Contracting Officer 
to determine whether the product offered meets the ``brand name or 
equal'' product's salient characteristics listed in the solicitation.

                             (End of clause)

[61 FR 53646, Oct. 15, 1996. Redesignated at 63 FR 26996, May 15, 1998.]



Sec. 452.211-72  Statement of Work/Specifications.

    As prescribed in 411.171, insert the following clause:

               Statement of Work/Specifications (FEB 1988)

    The Contractor shall furnish the necessary personnel, material, 
equipment, services and facilities (except as otherwise specified), to 
perform the Statement of Work/Specifications referenced in Section J.

                             (End of clause)

[61 FR 53646, Oct. 15, 1996. Redesignated at 63 FR 26996, May 15, 1998.]



Sec. 452.211-73  Attachments to Statement of Work/Specifications.

    As prescribed in 411.171, insert the following clause:

       Attachments to Statement of Work/Specifications (FEB 1988)

    The attachments to the Statement of Work/Specifications listed in 
Section J are hereby made part of this solicitation and any resultant 
contract.

                             (End of clause)

[61 FR 53646, Oct. 15, 1996. Redesignated at 63 FR 26996, May 15, 1998.]



Sec. 452.211-74  Period of Performance.

    As prescribed in 411.404(a), insert the following clause:

                    Period of Performance (FEB 1988)

    The period of performance of this contract is from ------ through --
----.*

[[Page 193]]

                             (End of clause)

    * Contracting Officer shall insert the appropriate dates.

[61 FR 53646, Oct. 15, 1996. Redesignated at 63 FR 26996, May 15, 1998.]



Sec. 452.211-75  Effective Period of the Contract.

    As prescribed in 411.404(b), insert the following clause:

               Effective Period of the Contract (FEB 1988)

    The effective period of this contract is from ------ through ----
--.*

                             (End of clause)

    * Contracting Officer shall insert the appropriate dates.

[61 FR 53646, Oct. 15, 1996. Redesignated at 63 FR 26996, May 15, 1998.]



Sec. 452.214-70  Award by Lot.

    As prescribed in 414.201-6, insert a provision substantially as 
follows:

                         Award by Lot (NOV 1996)

    Subject to the Section L provision FAR 52.214-10, ``Contract Award--
Sealed Bidding,'' award will generally be made to a single bidder on 
each entire lot. However, the Government reserves the right to award by 
item within any lot when the contracting officer determines that it is 
advantageous to the Government.

                           (End of provision)



Sec. 452.215-71  Instructions for the Preparation of Technical and 
          Business Proposals.

    As prescribed in 415.209(a), insert a provision substantially as 
follows:

  Instructions for the Preparation of Technical and Business Proposals 
                               (SEP 1999)

    (a) General Instructions. Proposals submitted in response to this 
solicitation shall be furnished in the following format with the numbers 
of copies as specified below.
    (1) The proposal must include a technical proposal and business 
proposal. Each of the parts shall be separate and complete so that 
evaluation of one may be accomplished independently from evaluation of 
the other. The technical proposal must not contain reference to cost; 
however, resource information (such as data concerning labor hours and 
categories, materials, subcontracts, etc.) must be contained in the 
technical proposal so that the contractor's understanding of the 
statement of work may be evaluated.
    (2) Offerors may, at their discretion, submit alternate proposals or 
proposals which deviate from the requirement; provided, that an offeror 
also submit a proposal for performance of the work as specified in the 
statement of work. Any ``alternate'' proposal may be considered if 
overall performance would be improved or not compromised, and if it is 
in the best interest of the Government. Alternate proposals, or 
deviations from any requirement of this RFP, must be clearly identified.
    (3) The Government will evaluate proposals in accordance with the 
evaluation criteria set forth in Section M of this RFP.
    (4) Offerors shall submit their proposal(s) in the following format 
and the quantities specified:
    (a) ------* copies of the completed, signed offer (Sections A 
through K of the solicitation package)
    (b) ------* copies of the technical proposal
    (c) ------* copies of the business/cost proposal
    (b) Technical Proposal Instructions. The technical proposal will be 
used to make an evaluation and arrive at a determination as to whether 
the proposal will meet the requirements of the Government. Therefore, 
the technical proposal must present sufficient information to reflect a 
thorough understanding of the requirements and a detailed, description 
of the techniques, procedures and program for achieving the objectives 
of the specifications/statement of work. Proposals which merely 
paraphrase the requirements of the Government's specifications/ 
statement of work, or use such phrases as ``will comply'' or ``standard 
techniques will be employed'' will be considered unacceptable and will 
not be considered further. As a minimum, the proposal must clearly 
provide the following:
    (Contracting Officer shall identify in this section the minimum 
information required to evaluate each technical evaluation factor listed 
in Section M.)
    (c) Business Proposal Instructions.
    (1) Cost Proposal.
    In addition to any other requirements for cost/pricing information 
required in clause FAR 52.215-20, Requirements for Cost or Pricing Data 
or Information Other Than Cost or Pricing Data (OCT 1997), the following 
is required:
    (Contracting Officer shall identify additional information required 
if appropriate.)
    (2) Business Proposal.
    (a) Furnish financial statements for the last two years, including 
an interim statement for the current year, unless previously provided to 
the office issuing the RFP, in which case a statement as to when and 
where this information was provided may be furnished instead.

[[Page 194]]

    (b) Specify the financial capacity, working capital and other 
resources available to perform the contract without assistance from any 
outside source.
    (c) Provide the name, location, and intercompany pricing policy for 
other divisions, subsidiaries, parent company, or affiliated companies 
that will perform work or furnish materials under this contract.

                           (End of provision)

    *Contracting officer shall insert number of copies required.

[61 FR 53646, Oct. 15, 1996, as amended at 64 FR 52675, Sept. 30, 1999; 
70 FR 50, Jan. 3, 2005]



Sec. 452.215-72  Amendments to Proposals.

    As prescribed in 415.209(b), insert the following provision:

                   Amendments to Proposals (FEB 1988)

    Any changes to a proposal made by the offeror after its initial 
submittal shall be accomplished by replacement pages. Changes from the 
original page shall be indicated on the outside margin by vertical lines 
adjacent to the change. The offeror shall include the date of the 
amendment on the lower right corner of the changed pages.

                           (End of provision)

[61 FR 53646, Oct. 15, 1996, as amended at 64 FR 52675, Sept. 30, 1999]



Sec. 452.215-73  Post Award Conference.

    As prescribed in 415.570, insert a clause substantially as follows:

                    Post Award Conference (NOV 1996)

    A post award conference with the successful offeror is required. It 
will be scheduled within ------* days after the date of contract award. 
The conference will be held at: ------*.

                             (End of clause)

    * Contracting officer to insert number of days and location.

[61 FR 53646, Oct. 15, 1996, as amended at 64 FR 52675, Sept. 30, 1999]



Sec. 452.216-70  Award Fee.

    As prescribed in 416.405, insert a clause substantially as follows:

                          Award Fee (FEB 1988)

    The amount of award fee the Contractor earns, if any, is based on a 
subjective evaluation by the Government of the quality of the 
Contractor's performance in accordance with the award fee plan. The 
Government will determine the amount of award fee every ------* months 
beginning with ------*. The Fee Determination Official (FDO) will 
unilaterally determine the amount of award fee. The FDO's determination 
will be in writing to the Contractor and is not subject to the 
``Disputes'' clause. The Government may unilaterally change the award 
fee plan at any time and will provide such changes in writing to the 
Contractor prior to the beginning of the applicable evaluation period. 
The Contractor may submit a voucher for the earned award fee. Available 
award fee not earned during one period does not carry over to subsequent 
periods.

                             (End of clause)

    * Contracting Officer shall insert appropriate number of months.
    ** Contracting Officer shall insert appropriate date.



Sec. 452.216-71  Base Fee and Award Fee Proposal.

    As prescribed in 416.470, insert the following provision:

                 Base Fee and Award Proposal (FEB 1988)

    For the purpose of this solicitation, offerors shall propose a base 
fee of ------* percent of the total estimated cost proposed. The award 
fee shall not exceed ------* percent of the total estimated cost.

                           (End of provision)

    * Contracting Officer shall insert appropriate percentages.



Sec. 452.216-72  Evaluation Quantities--Indefinite-Delivery Contract.

    As prescribed in 416.506(a), insert a provision substantially as 
follows:

     Evaluation Quantities--Indefinite-Delivery Contract (FEB 1988)

    To evaluate offers for award purposes, the Government will apply the 
offeror's proposed fixed-prices/rates to the estimated quantities 
included in the solicitation, and will add other direct costs if 
applicable.

                           (End of provision)



Sec. 452.216-73  Minimum and Maximum Contract Amounts.

    As prescribed in 416.506(b), insert the following clause:

[[Page 195]]

             Minimum and Maximum Contract Amounts (FEB 1988)

    During the period specified in FAR clause 52.216-18, ORDERING, the 
Government shall place orders totaling a minimum of ------*, but not in 
excess of ------*.

                             (End of clause)

    * Contracting Officer shall insert appropriate quantity or dollar 
amounts.



Sec. 452.216-74  Ceiling Price.

    As prescribed in 416.670, insert the following clause:

                        Ceiling Price (FEB 1988)

    The ceiling price of this contract is $------*. The Contractor shall 
not make expenditures or incur obligations in the performance of this 
contract which exceed the ceiling price specified herein, except at the 
Contractor's own risk.

                             (End of clause)

    *Contracting Officer shall insert appropriate dollar amount.



Sec. 452.216-75  Letter Contract.

    As prescribed in 416.603-4, insert the following clause:

                       Letter Contract (FEB 1988)

    This contract replaces letter contract No. ------* dated ------* and 
all amendments thereto.

                             (End of clause)

    * Contracting Officer shall insert number and date.



Sec. 452.219-70  Size Standard and NAICS Code Information.

    As prescribed in 419.508, insert the following provision:

           Size Standard and NAICS Code Information (SEP 2001)

    The North American Industrial Classification System Code(s) and 
business size standard(s) describing the products and/or services to be 
acquired under this solicitation are listed below:

Contract line item(s): ------* NAICS Code ------* Size Standard ------*

                           (End of provision)

    * Contracting Officer shall insert the appropriate data for each 
contract line item in the solicitation. The data entry line may be 
duplicated as required to describe all of the contract line items or 
sub-items.

[61 FR 53646, Oct. 15, 1996, as amended at 66 FR 49317, Sept. 27, 2001]



Sec. 452.224-70  Confidentiality of Information.

    As prescribed in 424.104, insert a clause substantially as follows:

                Confidentiality of Information (FEB 1988)

    (a) Confidential information, as used in this clause, means--
    (1) information or data of a personal nature, proprietary about an 
individual, or (2) information or data submitted by or pertaining to an 
organization.
    (b) In addition to the types of confidential information described 
in (a)(1) and (2) above, information which might require special 
consideration with regard to the timing of its disclosure may derive 
from studies or research, during which public disclosure of primarily 
invalidated findings could create an erroneous conclusion which might 
threaten public health or safety if acted upon.
    (c) The Contracting Officer and the Contractor may, by mutual 
consent, identify elsewhere in this contract specific information and/or 
categories of information which the Government will furnish to the 
Contractor or that the Contractor is expected to generate which is 
confidential. Similarly, the Contracting Officer and the Contractor may, 
by mutual consent, identify such confidential information from time to 
time during the performance of the contract. Failure to agree will be 
settled pursuant to the ``Disputes'' clause.
    (d) If it is established that information to be utilized under this 
contract is subject to the Privacy Act, the Contractor will follow the 
rules and procedures of disclosure set forth in the Privacy Act of 1974, 
5 U.S.C. 552a, and implementing regulations and policies, with respect 
to systems of records determined to be subject to the Privacy Act.
    (e) Confidential information, as defined in (a)(1) and (2) above, 
shall not be disclosed without the prior written consent of the 
individual, institution or organization.
    (f) Written advance notice of at least 45 days will be provided to 
the Contracting Officer of the Contractor's intent to release findings 
of studies or research, which have the possibility of adverse effects on 
the public or the Federal agency, as described in (b) above. If the 
Contracting Officer does not pose any objections in writing within the 
45 day period, the Contractor may proceed with disclosure. Disagreements 
not resolved by the Contractor and Contracting Officer will be settled 
pursuant to the ``Disputes'' clause.

[[Page 196]]

    (g) Whenever the Contractor is uncertain with regard to the proper 
handling of material under the contract, or if the material in question 
is subject to the Privacy Act or is confidential information subject to 
the provisions of this clause, the Contractor shall obtain a written 
determination from the Contracting Officer prior to any release, 
disclosure, dissemination, or publication.
    (h) The provisions of paragraph (e) of this clause shall not apply 
when the information is subject to conflicting or overlapping provisions 
in other Federal, State or local laws.

                             (End of clause)



Sec. 452.226-70--452.226-72  [Reserved]



Sec. 452.228-70  Alternative Forms of Security.

    As prescribed in 428.204-2, insert the following provision:

                Alternative Forms of Security (NOV 1996)

    If furnished as security, money orders, drafts, cashiers checks, or 
certified checks shall be drawn payable to: ------*.

                           (End of provision)

    * Contracting Officer shall insert the name of the USDA contracting 
activity.



Sec. 452.228-71  Insurance Coverage.

    As prescribed in 428.310, insert the following clause:

                      Insurance Coverage (NOV 1996)

    Pursuant to FAR clause 52.228-5, Insurance-Work on a Government 
Installation, the Contractor will be required to present evidence to 
show, as a minimum, the amounts of insurance coverage indicated below:
    (a) Workers Compensation and Employer's Liability. The Contractor is 
required to comply with applicable Federal and State workers' 
compensation and occupational disease statutes. If occupational diseases 
are not compensable under those statutes, they shall be covered under 
the employer's liability section of the insurance policy, except when 
contract operations are so commingled with a Contractor's commercial 
operations that it would not be practical to require this coverage. 
Employer's liability coverage of at least $100,000 shall be required, 
except in States with exclusive or monopolistic funds that do not permit 
worker's compensation to be written by private carriers.
    (b) General Liability. The Contractor shall have bodily injury 
liability insurance coverage written on a comprehensive form of policy 
of at least $500,000 per occurrence.
    (c) Automobile Liability. The Contractor shall have automobile 
liability insurance written on a comprehensive form of policy. The 
policy shall provide for bodily injury and property damage liability 
covering the operation of all automobiles used in connection with 
performing the contract. Policies covering automobiles operated in the 
United States shall provide coverage of at least $200,000 per person and 
$500,000 per occurrence for bodily injury and $20,000 per occurrence for 
property damage or loss.
    (d) Aircraft Public and Passenger Liability. When aircraft are used 
in connection with performing the contract, the Contractor shall have 
aircraft public and passenger liability insurance. Coverage shall be at 
least $200,000 per person and $500,000 per occurrence for bodily injury, 
other than passenger injury. Coverage for passenger injury shall be at 
least $200,000 multiplied by the number of seats or passengers, 
whichever is greater.

                             (End of clause)

    Alternate I (NOV 1996). As prescribed in 428.310, substitute the 
following paragraph (b), when additionally the contractor must have 
property damage liability coverage:

    (b) General Liability. (1) The Contractor shall have bodily injury 
liability coverage written on a comprehensive form of policy of at least 
$500,000 per occurrence.
    (2) The Contractor shall have property damage liability insurance 
shall be required in the amount of ------* per occurrence.
    * Contracting Officer shall insert amount required.



Sec. 452.232-70  Reimbursement for Bond Premiums--Fixed-Price 
          Construction Contracts.

    As prescribed in 432.111, insert the following clause:

Reimbursement for Bond Premiums--Fixed-Price Construction Contracts (NOV 
                                  1996)

    The Contract Price includes the total amount for premiums that the 
Contractor attributes to the furnishing of performance and payment bonds 
required by the contract. Reimbursement for bond premiums under the 
clause at FAR 52.232-5, Payments Under Fixed-Price Construction, shall 
not cover any amount therefor not included in the contract price.

                             (End of clause)

[61 FR 53646, Oct. 15, 1996. Redesignated at 63 FR 26996, May 15, 1998, 
as amended at 70 FR 50, Jan. 3, 2005]

[[Page 197]]



Sec. 452.236-70  Additive or Deductive Items.

    As prescribed in 436.205, insert the following provision:

                 Additive or Deductive Items (FEB 1988)

    The low bidder for purposes of award shall be the conforming 
responsible bidder offering the low aggregate amount for the first or 
base bid item, plus or minus (in the order of priority listed in the 
schedule) those additive or deductive bid items providing the most 
features of the work within the funds determined by the government to be 
available before bids are opened. If addition of another bid item in the 
listed order of priority would make the award exceed such funds for all 
bidders, it shall be skipped and the next subsequent additive bid item 
in a lower amount shall be added if award therein can be made within 
such funds. For example, when the amount available is $100,000 and a 
bidder's base bid and four successive additives are $85,000, $10,000, 
$8,000, $6,000, and $4,000, the aggregate amount of the bid for purposes 
of award would be $99,000 for the base bid plus the first and fourth 
additives, the second and third additives being skipped because of each 
of them would cause the aggregate bid to exceed $100,000. In any case 
all bids shall be evaluated on the basis of the same additive or 
deductive bid items, determined as above provided. The listed order of 
priority need be followed only for determining the low bidder. After 
determination of the low bidder as stated, award in the best interests 
of the Government may be made on the selected first or base bid item and 
any combination of additive or deductive items for which funds are 
determined to be available at the time of the award, provided that award 
on such combination of bid items does not exceed the amount offered by 
any other conforming responsible bidder for the same combination of bid 
items.

                             (End of clause)



Sec. 452.236-71  Prohibition Against the Use of Lead-Based Paint.

    As prescribed in 436.571, insert the following clause:

       Prohibition Against the Use of Lead-Based Paint (NOV 1996)

    Neither the Contractor nor any subcontractor performing under this 
contract shall use paints containing more then 0.06 of 1 percent lead by 
weight (calculated as lead metal) in the total nonvolatile content of 
the paint, or the equivalent measure of lead in the dried film of paint 
already applied, or both.

                             (End of clause)



Sec. 452.236-72  Use of Premises.

    As prescribed in 436.572, insert the following clause:

                       Use of Premises (NOV 1996)

    (a) Before any camp, quarry, borrow pit, storage, detour, or bypass 
site, other than shown on the drawings, is opened or operated on USDA 
land or lands administered by the USDA, the Contractor shall obtain 
written permission from the Contracting Officer. A camp is interpreted 
to include a campsite or trailer parking area of any employee working on 
the project for the Contractor.
    (b) Unless excepted elsewhere in the contract, the Contractor shall 
(i) provide and maintain sanitation facilities for the work force at the 
site and (ii) dispose of solid waste in accordance with applicable 
Federal, State and local regulations.

                             (End of clause)



Sec. 452.236-73  Archaeological or Historic Sites.

    As prescribed in 436.573, insert the following clause:

               Archaeological or Historic Sites (FEB 1988)

    If a previously unidentified archaeological or historic site(s) is 
encountered, the Contractor shall discontinue work in the general area 
of the site(s) and notify the Contracting Officer immediately.

                             (End of clause)



Sec. 452.236-74  Control of Erosion, Sedimentation, and Pollution.

    As prescribed in 436.574, insert the following clause:

       Control of Erosion, Sedimentation, and Pollution (NOV 1996)

    (a) Operations shall be scheduled and conducted to minimize erosion 
of soils and to prevent silting and muddying of streams, rivers, 
irrigation systems, and impoundments (lakes, reservoirs, etc.).
    (b) Pollutants such as fuels, lubricants, bitumens, raw sewage, and 
other harmful materials shall not be discharged on the ground; into or 
nearby rivers, streams, or impoundments; or into natural or man-made 
channels. Wash water or waste from concrete or aggregate operations 
shall not be allowed to enter live streams prior to treatment by 
filtration, settling, or other means sufficient to reduce the sediment 
content to not more than that of the stream into which it is discharged.

[[Page 198]]

    (c) Mechanized equipment shall not be operated in flowing streams 
without written approval by the Contracting Officer.

                             (End of clause)



Sec. 452.236-75  Maximum Workweek--Construction Schedule.

    As prescribed in 436.575, insert the following clause:

           Maximum Workweek--Construction Schedule (NOV 1996)

    Within ---- calendar days after receipt of a written request from 
the Contracting Officer, the Contractor must submit the following in 
writing for approval:
    (a) A schedule as required by FAR clause 52.236-15, Schedules for 
Construction Contracts, and
    (b) The hours (including the daily starting and stopping times) and 
days of the week the Contractor proposes to carry out the work.
    The maximum workweek that will be approved is ----*.

                             (End of clause)

    * Contracting Officer shall insert appropriate number of days and 
hours and/or days.



Sec. 452.236-76  Samples and Certificates.

    As prescribed in 436.576, insert the following clause:

                   Samples and Certificates (FEB 1988)

    When required by the specifications or the Contracting Officer, 
samples, certificates, and test data shall be submitted after award of 
the contract, prepaid, in time for proper action by the Contracting 
Officer or his/her designated representative. Certificates and test data 
shall be submitted in triplicate to show compliance with materials and 
construction specified in the contract performance requirements.
    Samples shall be submitted in duplicate by the Contractor, except as 
otherwise specified, to show compliance with the contract requirements. 
Materials or equipment for which samples, certifications or test data 
are required shall not be used in the work until approved in writing by 
the Contracting Officer.

                             (End of clause)



Sec. 452.236-77  Emergency Response.

    As prescribed in 436.577, the following clause may be used in Forest 
Service construction contracts:

                      Emergency Response (NOV 1996)

    (a) Contractor's Responsibility for Fire Fighting. (1) The 
Contractor, under the provisions of FAR clause 52.236-9, Protection of 
Existing Vegetation, Structures, Equipment, Utilities, and Improvements, 
shall immediately extinguish all fires on the work site other than those 
fires in use as a part of the work.
    (2) The Contractor may be held liable for all damages and for all 
costs incurred by the Government for labor, subsistence, equipment, 
supplies, and transportation deemed necessary to control or suppress a 
fire set or caused by the Contractor or the Contractor's agents or 
employees.
    (b) Contractor's Responsibility for Notification in Case of Fire. 
The Contractor shall immediately notify the Government of any fires 
sighted on or in the vicinity of the work site.
    (c) Contractor's Responsibility for Responding to Emergencies. When 
directed by the Contracting Officer, the Contractor shall allow the 
Government to temporarily use employees and equipment from the work site 
for emergency work (anticipated to be restricted to fire fighting). An 
equitable adjustment for the temporary use of employees and equipment 
will be made under the Changes clause, FAR 52.243-4.

                             (End of clause)



Sec. 452.236-78  [Reserved]



Sec. 452.236-79  Opted Timber Sale Road Requirements.

    As prescribed in 436.579, insert the following clause:

             Opted Timber Sale Road Requirements (NOV 1996)

    This contract is for the construction of timber sale road(s) which a 
timber purchaser has opted to have the Government construct. The 
Government is obligated to make these roads available to the timber 
purchaser by ------*. Failure to make these roads available by this date 
could result in Government liability for delay to the timber purchaser 
for which the Contractor might become liable should the Contractor fail 
to complete this contract within the specified and allowed contract 
time.

                             (End of clause)

    * Contracting Officer shall insert appropriate date.



Sec. 452.236-80  Firms Ineligible for Award--Construction.

    As prescribed in 436.670, insert the following clause:

[[Page 199]]

           Firms Ineligible for Award--Construction (NOV 1996)

    The firm(s) and its subsidiaries or affiliates signatory to this 
contract shall be ineligible for award of any construction contract 
resulting from the design work performed under this contract.

                             (End of clause)



Sec. 452.237-70  Loss, Damage, Destruction or Repair.

    (a) As prescribed in 437.110(a), insert a clause substantially as 
follows:

             Loss, Damage, Destruction or Repair (FEB 1988)

    (a) For equipment furnished under this contract without operator, 
the Government will assume liability for any loss, damage or destruction 
of such equipment, not to exceed a total of $------* except that no 
reimbursement will be made for loss, damage or destruction due to (1) 
ordinary wear or tear, (2) mechanical failure, or (3) the fault or 
negligence of the Contractor or the Contractor's agents or employees.
    (b) For equipment furnished under this contract with operator, the 
Government shall not be liable for any loss, damage or destruction of 
such equipment, except for loss, damage or destruction resulting from 
the negligent or wrongful act(s) of Government employee(s) while acting 
within the scope of their employment.
    (c) All repairs to equipment furnished under this contract shall be 
made by the Contractor and reimbursement, if any, shall be determined in 
accordance with (a) or (b) above. Repairs shall be made promptly and 
equipment returned to use within ------** hours. In lieu of repairing 
equipment, the Contractor may furnish similar replacement equipment 
within the time specified. The Contractor may authorize the Government 
to make repairs upon the request of the Contracting Officer. In such 
case, the Contractor will be billed for labor and parts costs.

                             (End of clause)

    * Contracting Officer shall insert amount available in current funds 
to cover potential liability.
    ** Contracting Officer shall insert appropriate number of hours.



Sec. 452.237-71  Pre-Bid/Pre-Proposal Conference.

    As prescribed in 437.110(b), insert a provision substantially as 
follows:

               Pre-Bid/Pre-Proposal Conference (FEB 1988)

    (a) The Government is planning a pre-bid/pre-proposal conference, 
during which potential offerors may obtain a better understanding of the 
work required.
    (b) Offerors are encouraged to submit all questions in writing at 
least five (5) days prior to the conference. Questions will be 
considered at any time prior to or during the conference; however, 
offerors will be asked to confirm verbal questions in writing. 
Subsequent to the conference, an amendment to the solicitation 
containing an abstract of the questions and answers, and a list of 
attendees, will be disseminated.
    (c) In order to facilitate conference preparations, it is requested 
that the person named on the Standard Form 33 of this solicitation be 
contacted and advised of the number of persons who will attend.
    (d) The Government assumes no responsibility for any expense 
incurred by an offeror prior to contract award.
    (e) Offerors are cautioned that, notwithstanding any remarks or 
clarifications given at the conference, all terms and conditions of the 
solicitation remain unchanged unless they are changed by amendment to 
the solicitation. If the answers to conference questions, or any 
solicitation amendment, create ambiguities, it is the responsibility of 
the offeror to seek clarification prior to submitting an offer.
    (f) The conference will be held:

Date:___________________________________________________________________
Time:___________________________________________________________________
Location:_______________________________________________________________

                             (End of clause)



Sec. 452.237-73  Equipment Inspection Visit.

    As prescribed in 437.110(c), insert the following provision:

                  Equipment Inspection Visit (FEB 1988)

    Offerors are urged and expected to inspect the equipment on which 
maintenance or repairs are to be performed and to satisfy themselves 
regarding all conditions that may affect the cost of contract 
performance, to the extent that the information is reasonably 
obtainable. In no event shall failure to inspect the equipment 
constitute grounds for a claim after contract award.
    Offerors are invited to inspect the ------* at ------* by 
telephoning ------* on ------* for an appointment.

                             (End of clause)

    * Contracting Officer shall insert appropriate data.

[[Page 200]]



Sec. 452.237-74  Key Personnel.

    As prescribed in 437.110(d), insert a clause substantially as 
follows:

                        Key Personnel (FEB 1988)

    (a) The Contractor shall assign to this contract the following key 
personnel: ----------
    (b) During the first ninety (90) days of performance, the Contractor 
shall make no substitutions of key personnel unless the substitution is 
necessitated by illness, death, or termination of employment. The 
Contractor shall notify the Contracting Officer within 15 calendar days 
after the occurrence of any of these events and provide the information 
required by paragraph (c) below. After the initial 90-day period, the 
Contractor shall submit the information required by paragraph (c) to the 
Contracting Officer at least 15 days prior to making any permanent 
substitutions.
    (c) The Contractor shall provide a detailed explanation of the 
circumstances necessitating the proposed substitutions, complete resumes 
for the proposed substitutes, and any additional information requested 
by the Contracting Officer. Proposed substitutes should have comparable 
qualifications to those of the persons being replaced. The Contracting 
Officer will notify the Contractor within 15 calendar days after receipt 
of all required information of the decision on substitutions. The 
contract will be modified to reflect any approved changes of key 
personnel.

                             (End of clause)



Sec. 452.237-75  Restrictions Against Disclosure.

    As prescribed in 437.110(e), insert a clause substantially as 
follows:

               Restrictions Against Disclosure (FEB 1988)

    (a) The Contractor agrees, in the performance of this contract, to 
keep all information contained in source documents or other media 
furnished by the Government in the strictest confidence. The Contractor 
also agrees not to publish or otherwise divulge such information in 
whole or in part in any manner or form, or to authorize or permit others 
to do so, taking such reasonable measures as are necessary to restrict 
access to such information while in the Contractor's possession, to 
those employees needing such information to perform the work provided 
herein, i.e., on a ``need to know'' basis. The Contractor agrees to 
immediately notify in writing, the Contracting Officer, named herein, in 
the event that the Contractor determines or has reason to suspect a 
breach of this requirement.
    (b) The Contractor agrees not to disclose any information concerning 
the work under this contract to any persons or individual unless prior 
written approval is obtained from the Contracting Officer. The 
Contractor agrees to insert the substance of this clause in any 
consultant agreement or subcontract hereunder.

                             (End of clause)



Sec. 452.237-76  Progress Reporting.

    As prescribed in 437.270(a), insert a clause substantially as 
follows:

                      Progress Reporting (FEB 1988)

    The Contractor shall submit a progress report ------*, covering work 
accomplished during that period of the contract performance. The 
progress report shall be brief and factual and shall be prepared in 
accordance with the following format:
    (a) A cover page containing:
    (1) Contract number and title;
    (2) Type of report, sequence number of report, and period of 
performance being reported;
    (3) Contractor's name and address;
    (4) Author(s); and
    (5) Date of report.
    (b) Section I--An introduction covering the purpose and scope of the 
contract effort. This shall be limited to one paragraph in all but the 
first and final month's narrative.
    (c) Section II--A description of overall progress plus a separate 
description of each task or other logical segment of work on which 
effort was expended during the report period. The description shall 
include pertinent data and/or graphs in sufficient detail to explain any 
significant results achieved.
    (d) Section III--A description of current technical or substantive 
performance, and any problem(s) which may impede performance along with 
proposed corrective action.
    (e) Section IV--A planning schedule shall be included with the first 
progress report for all assigned tasks required under the contract, 
along with the estimated starting and completion dates for each task. 
The planning schedule shall be updated and submitted with each 
subsequent technical progress report, including an explanation of any 
difference between actual progress and planned progress, why the 
differences have occurred, and--if behind planned progress--what 
corrective steps are planned.
    (f) Section V--If applicable, financial information shall be 
submitted for each major task or line item cost.
    Data shall include:
    (1) The total estimated cost budgeted (fee excluded).
    (2) The estimated cost expended during the current reporting period.

[[Page 201]]

    (3) Identification of direct labor hours of prime contractor and 
subcontractor(s) and/or consultant(s), if applicable.
    (4) Total project to-date expenditures.
    (5) Total remaining funds.

                             (End of clause)

    * Contracting Officer shall insert frequency of reporting 
requirement.



Sec. 452.237-78  Contracts with Consulting Firms for Services.

    As prescribed in 437.270(b), insert a clause substantially as 
follows:

         Contracts with Consulting Firms for Services (FEB 1988)

    Offerors are specifically cautioned that any firm(s) receiving a 
contract award to provide the services described herein will be 
prohibited from competing for or receiving a follow-on contract to 
perform ------.*

                             (End of clause)

    * Contracting Officer shall insert the appropriate information.



Sec. 452.246-70  Inspection and Acceptance.

    As prescribed in 446.370, insert the following clause:

                  Inspection and Acceptance (FEB 1988)

    (a) The Contracting Officer or the Contracting Officer's duly 
authorized representative will inspect and accept the supplies and/or 
services to be provided under this contract.
    (b) Inspection and acceptance will be performed at: ------.*

                             (End of clause)

    * Contracting Officer shall insert appropriate identifying data.
    Alternate I (FEB 1988). As prescribed in 446.370, substitute a 
paragraph (b) and add a paragraph (c):

    (b) Inspection will be performed at: ------.*
    (c) Acceptance will be performed at: ------.*

                             (End of clause)



Sec. 452.247-70  Delivery Location.

    As prescribed in 447.302, insert a clause substantially as follows:

                      Delivery Location (FEB 1988)

    Shipment of deliverable items, other than reports, shall be to: ----
--.*

                             (End of clause)

    * Contracting Officer shall insert appropriate identifying data.



Sec. 452.247-71  Marking Deliverables.

    As prescribed in 447.305-10(a), insert a clause substantially as 
follows:

                     Marking Deliverables (FEB 1988)

    (a) The contract number shall be placed on or adjacent to all 
exterior mailing or shipping labels of deliverable items called for by 
the contract.
    (b) Mark deliverables, except reports, for: ------.*

                             (End of clause)

    * Contracting Officer shall insert the appropriate information.



Sec. 452.247-72  Packing for Domestic Shipment.

    As prescribed in 447.305-10(b), insert the following clause:

                Packing for Domestic Shipment (FEB 1988)

    Material shall be packed for shipment in such a manner that will 
insure acceptance by common carriers and safe delivery at destination. 
Containers and closures shall comply with the Interstate Commerce 
Commission regulations, Uniform Freight Classification Rules, or 
regulations of other carriers as applicable to the mode of 
transportation.

                             (End of clause)



Sec. 452.247-73  Packing for Overseas Shipment.

    As prescribed in 447.305-10(c), insert the following clause:

                Packing for Overseas Shipment (FEB 1988)

    Supplies shall be packed for overseas shipment in accordance with 
the best commercial export practice suitable for water movement to 
arrive undamaged at ultimate destination.

                             (End of clause)

                             PART 453_FORMS

Sec.

Sec. 453.000 Scope of part.

                          Subpart 453.1_General


Sec. 453.103 Exceptions.

Sec. 453.108 Recommendations concerning forms.

[[Page 202]]

                   Subpart 453.2_Prescription of Forms


Sec. 453.200 Scope of subpart.

Sec. 453.213 Simplified Acquisition and other simplified purchase 
          procedures (AD-838).

Sec. 453.270 Request for contract action (AD-700).

                  Subpart 453.3_Illustrations of Forms


Sec. 453.300 Scope of subpart.

Sec. 453.303 Agency forms.

Sec. 453.303-700 Procurement Request (AD-700).

Sec. 453.303-838 Purchase Order (AD-838).

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

    Source: 61 FR 53646, Oct. 15, 1996, unless otherwise noted.



Sec. 453.000  Scope of part.

    This part:
    (a) Prescribes USDA (AD) forms for use in acquisition,
    (b) Contains requirements and information generally applicable to AD 
forms and forms prescribed by FAR part 53, and
    (c) Illustrates AD forms.

                          Subpart 453.1_General



Sec. 453.103  Exceptions.

    (a) The contracting officer shall submit a request for exceptions to 
forms prescribed in FAR part 53 through the head of the contracting 
activity (HCA) to the Senior Procurement Executive (SPE) for referral to 
the GSA.
    (b) Requests for exceptions to AD forms prescribed in part 453 shall 
be handled as individual or class deviations, as appropriate (see 
subpart 401.4).



Sec. 453.108  Recommendations concerning forms.

    Contracting officers shall submit recommendations for new forms or 
to revise, eliminate, or consolidate forms prescribed by FAR part 53 and 
part 453 through the HCA to the SPE.

                   Subpart 453.2_Prescription of Forms



Sec. 453.200  Scope of subpart.

    This subpart prescribes USDA (AD) forms for use in acquisition. 
Consistent with the approach used in FAR subpart 53.2, this subpart is 
arranged by subject matter, in the same order as, and keyed to, the 
parts of the AGAR in which the form usage requirements are addressed.



Sec. 453.213  Simplified Acquisition and other simplified purchase 
          procedures (AD-838).

    Form AD-838, Purchase Order, is prescribed for use as a Simplified 
Acquisition Procedure/delivery order/task order document in lieu of OF 
347 and OF 348, except that use of the OF 347 and OF 348 is authorized 
when utilizing the USDA Integrated Acquisition System (See 413.307).

[70 FR 50, Jan. 3, 2005]



Sec. 453.270  Request for contract action (AD-700).

    Form AD-700, Procurement Request, may be used as a contract 
requisition document by contracting activities in USDA.

                  Subpart 453.3_Illustrations of Forms



Sec. 453.300  Scope of subpart.

    This subpart contains illustrations of USDA (AD) forms for use in 
acquisitions. Forms are not illustrated in the Federal Register or Code 
of Federal Regulations. Individual copies may be obtained from any USDA 
contracting activity or the office of the SPE.



Sec. 453.303  Agency forms.



Sec. 453.303-700  Procurement Request (AD-700).



Sec. 453.303-838  Purchase Order (AD-838).

[[Page 203]]

                  SUBCHAPTER I_FOOD ASSISTANCE PROGRAMS

                     PART 470_COMMODITY ACQUISITIONS

Sec.

Sec. 470.000 Scope of part.

Sec. 470.101 Definitions.

Sec. 470.102 Policy.

Sec. 470.103 United States origin of agricultural products.

Sec. 470.200 [Reserved]

Sec. 470.201 Acquisition of commodities and freight shipment for Foreign 
          Agricultural Service programs.

Sec. 470.202 Acquisition of commodities for United States Agency for 
          International Development (USAID) programs.

Sec. 470.203 Cargo preference.

    Authority: 5 U.S.C. 301; 7 U.S.C. 1691 through 1726b; 1731 through 
1736g-3; 1736o; 1736o-1; 40 U.S.C. 121(c); 46 U.S.C. 53305, 55314 and 
55316.

    Source: 74 FR 13079, Mar. 26, 2009, unless otherwise noted.



Sec. 470.000  Scope of part.

    This part sets forth the policies, procedures and requirements 
governing the procurement of agricultural commodities by the Department 
of Agriculture for use:
    (a) Under any domestic feeding and assistance program administered 
by the Food and Nutrition Service; and
    (b) Under Title II of the Food for Peace Act (7 U.S.C. 1721 et 
seq.); the Food for Progress Act of 1985; the McGovern-Dole 
International Food for Education and Child Nutrition Program; and any 
other international food assistance program.



Sec. 470.101  Definitions.

    The following definitions are applicable to this part:
    Commingled product means grains, oilseeds, rice, pulses, other 
similar commodities and the products of such commodities, when such 
commodity or product is normally stored on a commingled basis in such a 
manner that the commodity or product produced in the United States 
cannot be readily distinguished from a commodity or product not produced 
in the United States.
    Department means the Department of Agriculture.
    Food and Nutrition Service means such agency located within the 
Department of Agriculture.
    Foreign Agriculture Service means such agency located within the 
Department of Agriculture.
    Free alongside ship (f.a.s.) (* * * named port of shipment) means a 
term of sale which means the seller fulfills its obligation to deliver 
when the goods have been placed alongside the vessel on the quay or in 
lighters at the named port of shipment. The buyer bears all costs and 
risks of loss of or damage to the goods from that moment.
    Free carrier (FCA) (* * * named place) means a term of sale which 
means the seller fulfills its obligation when the seller has handed over 
the goods, cleared for export, into the charge of the carrier named by 
the buyer at the named place or point. If no precise point is indicated 
by the buyer, the seller may choose, within the place or range 
stipulated, where the carrier should take the goods into their charge.
    Grantee organization means an organization which will receive 
commodities from the United States Agency for International Development 
under Title II of the Food for Peace Act (7 U.S.C. 1721 et seq.) or from 
the Foreign Agricultural Service under the Food for Progress Act of 
1985; the McGovern-Dole International Food for Education and Child 
Nutrition Program; and any other international food assistance program.
    Ingredient means spices, vitamins, micronutrients, desiccants, and 
preservatives when added to an agricultural commodity product.
    Last contract lay day means the last day specified in an ocean 
freight contract by which the carriage of goods must start for contract 
performance.
    Lowest landed cost means, as authorized by 46 U.S.C. 55314(c), with 
respect to an agricultural product acquired under this part the lowest 
aggregate cost for the acquisition of such product and the shipment of 
such product to a foreign destination.
    Multi-port voyage charter means the charter of an ocean carrier in 
which

[[Page 204]]

the carrier will stop at two or more ports to discharge cargo.



Sec. 470.102  Policy.

    (a) Policy. It is the policy of the Department to follow the 
policies and procedures set forth in the Federal Acquisition Regulation 
(FAR) as supplemented by the Agriculture Acquisition Regulation, 
including this part, in the procurement of agricultural commodities and 
products of agricultural commodities that are used in domestic feeding 
and international feeding and development programs.
    (b) Electronic submission. To the maximum extent possible, the use 
of electronic submission of solicitation-related documents shall be used 
with respect to the acquisition of agricultural commodities and related 
freight; however, to the extent that a solicitation allows for the 
submission of written information in addition to information in an 
electronic format and there is a discrepancy in such submissions, the 
information submitted in a written format shall prevail unless the 
electronic submission states that a specific existing written term is 
superseded by the electronic submission.
    (c) Freight. With respect to the acquisition of freight for the 
shipment of agricultural commodities and products of agricultural 
commodities, the provisions of the FAR, including part 47, shall be 
utilized and various types of services to be obtained may include multi-
trip voyage charters.



Sec. 470.103  United States origin of agricultural products.

    (a) Products of United States origin. As provided by 7 U.S.C. 
1732(2) and 1736o-1(a) commodities and the products of agricultural 
commodities acquired for use in international feeding and development 
programs shall be products of United States origin. A product shall not 
be considered to be a product of the United States if it contains any 
ingredient that is not produced in the United States if that ingredient 
is:
    (1) Produced in the United States; and
    (2) Commercially available in the United States at fair and 
reasonable prices from domestic sources.
    (b) Use by the Food and Nutrition Service. Commodities and the 
products of agricultural commodities acquired for use by the Food and 
Nutrition Service shall be a product of the United States, except as may 
otherwise be required by law, and shall be considered to be such a 
product if it is grown, processed, and otherwise prepared for sale or 
distribution exclusively in the United States except with respect to 
ingredients. Ingredients from non-domestic sources will be allowed to be 
utilized as a United States product if such ingredients are not 
otherwise:
    (1) Produced in the United States; and
    (2) Commercially available in the United States at fair and 
reasonable prices from domestic sources.
    (c) Commingled product. (1) Except as provided in paragraph (c)(2) 
of this section, a commingled product shall be considered to be a 
product of the United States if the offeror can establish that the 
offeror has in inventory at the time the contract for the commodity or 
product is awarded to the offeror, or obtains during the contract 
performance period specified in the solicitation, or a combination 
thereof, a sufficient quantity of the commodity or product that was 
produced in the United States to fulfill the contract being awarded, and 
all unfulfilled contracts that the offeror entered into to provide such 
commingled product to the United States.
    (2) To the extent the Department has determined a commodity is one 
that is generally commingled, but is also one which can be readily 
stored on an identity preserved basis with respect to its country of 
origin, the Department may require that the commodity procured by the 
Department shall be of 100 percent United States origin.
    (d) Product derived from animals. With respect to the procurement of 
products derived from animals, the solicitation will set forth any 
specific requirement that is applicable to the country in which the 
animal was bred, raised, slaughtered or further processed.

[[Page 205]]



Sec. 470.200  [Reserved]



Sec. 470.201  Acquisition of commodities and freight shipment for 
          Foreign Agricultural Service programs.

    (a) Lowest landed cost and delivery considerations. (1) Except as 
provided in paragraphs (a)(3) and (4) of this section, in contracts for 
the Foreign Agricultural Service for commodities and related freight 
shipment for delivery to foreign destinations, the contracting officer 
shall consider the lowest landed cost of delivering the commodity to the 
intended destination. This lowest landed cost determination will be 
calculated on the basis of rates and service for that portion of the 
commodities being purchased that is determined is necessary and 
practicable to meet 46 U.S.C. 55314(c)(3) and cargo preference 
requirements and on an overall (foreign and U.S. flag) basis for the 
remaining portion of the commodities being procured and the additional 
factors set forth in this section. Accordingly, the solicitations issued 
with respect to a commodity procurement or a related freight procurement 
will specify that in the event an offer submitted by a party is the 
lowest offered price, the contracting officer reserves the right to 
reject such offer if the acceptance of another offer for the commodity 
or related freight, when combined with other offers for commodities or 
related freight, results in a lower landed cost to the Department.
    (2) The Department may contact any port prior to award to determine 
the port's cargo handling capabilities, including the adequacy of the 
port to receive, accumulate, handle, store, and protect the cargo. 
Factors considered in this determination may include, but not be limited 
to, the adequacy of building structures, proper ventilation, freedom 
from insects and rodents, cleanliness, and overall good housekeeping and 
warehousing practices. The Department may consider the use of another 
coastal range or port if a situation exists at a port that may adversely 
affect the ability of the Department to have the commodity delivered in 
a safe and timely manner. Such situations include:
    (i) A port is congested;
    (ii) Port facilities are overloaded;
    (iii) A vessel would not be able to dock and load cargo without 
delay;
    (iv) Labor disputes or lack of labor may prohibit the loading of the 
cargo onboard a vessel in a timely manner; or
    (v) Other similar situation that may adversely affect the ability of 
the Department to have the commodity delivered in a timely manner.
    (3) Use of other than lowest landed cost. In order to ensure that 
commodities are delivered in a timely fashion to foreign destinations 
and without damage, the contracting officer may award an acquisition 
without regard to the lowest land cost process set forth in paragraph 
(a)(1) of this section if:
    (i) The solicitation specifies that the lowest land cost process 
will not be followed in the completion of the contract; or
    (ii) After issuance of the solicitation, it is determined that:
    (A) Internal strife at the foreign destination or urgent 
humanitarian conditions threatens the lives of persons at the foreign 
destination;
    (B) A specific port's cargo handling capabilities (including the 
adequacy of the port to receive, accumulate, handle, store, and protect 
commodities) and other similar factors may adversely affect the delivery 
of such commodities through damage or untimely delivery. Such similar 
factors include, but are not limited to: port congestion; overloaded 
facilities at the port; vessels not being able to dock and load cargo 
without delay due to conditions at the port; labor disputes or lack of 
labor may prohibit the loading of the cargo onboard a vessel in a timely 
manner; and the existence of inadequate or unsanitary warehouse and 
other supporting facilities;
    (C) The total transit time of a carrier, as it relates to a final 
delivery date at the foreign destination may impair the timely delivery 
of the commodity;
    (D) Other similar situations arise that materially affect the 
administration of the program for which the commodity or freight is 
being procured; or
    (E) The contracting officer determines that extenuating 
circumstances preclude awards on the basis of lowest-landed cost, or 
that efficiency and cost-savings justify use of types of ocean

[[Page 206]]

service that would not involve an analysis of freight. However, in all 
such cases, commodities would be transported in compliance with cargo 
preference requirements. Examples of extenuating circumstances are 
events such as internal strife at the foreign destination or urgent 
humanitarian conditions threatening the lives of persons at the foreign 
destination. Other types of services may include, but are not limited 
to, multi-trip voyage charters, indefinite delivery/indefinite quantity 
(IDIQ), delivery cost and freight (C & F), delivery cost insurance and 
freight (CIF), and indexed ocean freight costs.
    (4) If a contracting officer determines that action may be 
appropriate under paragraph (a)(3) of this section, prior to the 
acceptance of any applicable offer, the contracting officer will provide 
to the Head of Contracting Activity Designee a written request to obtain 
commodities and freight in a manner other than on a lowest landed cost 
basis consistent with Title 48 Code of Federal Regulations. This request 
shall include a statement of the reasons for not using lowest landed 
cost basis. The Head of the Contracting Activity Designee, or the 
designee one level above the contracting officer, may either accept or 
reject this request and shall document this determination.
    (b) Multiple offers or delivery points. If more than one offer for 
the sale of commodities is received or more than one delivery point has 
been designated in such offers, in order to achieve a combination of a 
freight rate and commodity award that produces the lowest landed cost 
for the delivery of the commodity to the foreign destination, the 
contracting officer shall evaluate offers submitted on a delivery point 
by delivery point basis; however, consideration shall be given to 
prioritized ocean transport service in determining lowest landed cost.
    (c) Freight shipping and rates. (1) In determining the lowest-landed 
cost, the Department shall use the freight rates offered in response to 
solicitations issued by the Department or, if applicable, the grantee 
organization.
    (2) Freight rates offered must be submitted as specified in the 
solicitation issued by the Department or, if applicable, the grantee 
organization. Any such solicitation issued by a grantee organization 
must contain the following elements:
    (i) If directed by the Department, include a closing time for the 
receipt of written freight offers and state that late written freight 
offers will not be considered;
    (ii) Provide that freight offers are required to have a canceling 
date no later than the last contract lay day specified in the 
solicitation;
    (iii) Provide the same deadline for receipt of written freight 
offers from both U.S. flag vessel and non-U.S. flag vessels; and
    (iv) Be received and opened prior to any related offer for 
acquisition of commodities to be shipped.
    (3) The Department may require organizations that will receive 
commodities from the Department to submit information relating to the 
capacity of a U.S. port, or, if applicable, a terminal, prior to the 
acquisition of such commodities or freight.
    (d) Freight rate notification. If the Department is not the party 
procuring freight with respect to a shipment of an agricultural 
commodity for delivery to a foreign destination, the organization that 
will receive commodities from the Department, or its shipping agent, 
shall be notified by the Department of the vessel freight rate used in 
determining the commodity contract award and the organization will be 
responsible for finalizing the charter or booking contract with the 
vessel representing the freight rate.



Sec. 470.202  Acquisition of commodities for United States Agency for 
          International Development (USAID) programs.

    (a) Lowest landed cost and delivery considerations. (1) Except as 
provided in paragraphs (a)(3) and (e)(2) of this section, with respect 
to the acquisition of agricultural commodities for delivery to foreign 
destinations and related freight to transport such commodities under 
Title II of Public Law 480, contracts will be entered into in a manner 
that will result in the lowest landed cost of such commodity delivery to 
the

[[Page 207]]

intended destination. This lowest landed cost determination shall be 
calculated on the basis of rates and service for that portion of the 
commodities being purchased that is determined is necessary and 
practicable to meet 46 U.S.C. 55314(c)(3) and cargo preference 
requirements and on an overall (foreign and U.S. flag) basis for the 
remaining portion of the commodities being procured and the additional 
factors set forth in this section. Accordingly, the solicitations issued 
with respect to a commodity procurement or a freight procurement will 
specify that in the event an offer submitted by a party is the lowest 
offered price, the contracting officer reserves the right to reject such 
offer if the acceptance of another offer for the commodity or freight, 
when combined with other offers for commodities or freight, results in a 
lower landed cost to USAID.
    (2) The Department may contact any port prior to award to determine 
the port's cargo handling capabilities, including the adequacy of the 
port to receive, accumulate, handle, store, and protect the cargo. 
Factors which will be considered in this determination will include, but 
not be limited to, the adequacy of building structures, proper 
ventilation, freedom from insects and rodents, cleanliness, and overall 
good housekeeping and warehousing practices. The Department may consider 
the use of another coastal range or port if a situation exists at a port 
that may adversely affect the ability of the Department to have the 
commodity delivered in a safe and/or timely manner. Such situations 
include:
    (i) A port is congested;
    (ii) Port facilities are overloaded;
    (iii) A vessel would not be able to dock and load cargo without 
delay;
    (iv) Labor disputes or lack of labor may prohibit the loading of the 
cargo onboard a vessel in a timely manner; or
    (v) Other similar situation that may adversely affect the ability of 
the Department to have the commodity delivered in a timely manner.
    (3) Use of other than lowest landed cost. In order to ensure that 
commodities are delivered in a timely fashion to foreign destinations 
and without damage, the Department may complete an acquisition without 
regard to the lowest land cost process set forth in paragraph (a)(1) of 
this section, if:
    (i) The solicitation specifies that the lowest land cost process 
will not be followed in the completion of the contract; or
    (ii) After issuance of the solicitation, it is determined that:
    (A) Internal strife at the foreign destination or urgent 
humanitarian conditions threatens the lives of persons at the foreign 
destination;
    (B) A specific port's cargo handling capabilities (including the 
adequacy of the port to receive, accumulate, handle, store, and protect 
commodities) and other similar factors will adversely affect the 
delivery of such commodities without damage or in a timely manner. Such 
similar factors include, but are not limited to: port congestion; 
overloaded facilities at the port; vessels would not be able to dock and 
load cargo without delay; labor disputes or lack of labor may prohibit 
the loading of the cargo onboard a vessel in a timely manner; and the 
existence of inadequate or unsanitary warehouse and other supporting 
facilities;
    (C) The total transit time of a carrier, as it relates to a final 
delivery date at the foreign destination may impair the ability of the 
Department to achieve timely delivery of the commodity; or
    (D) Other similar situations arise that materially affect the 
administration of the program for which the commodity or freight is 
being procured.
    (4) If the contracting officer determines that action may be 
appropriate under paragraph (a)(3) of this section, prior to the 
acceptance of any applicable offer, the contracting officer shall 
provide to the head of contracting activity designee and to USAID, a 
written request to obtain commodities and freight in a manner other than 
on a lowest landed cost basis. This request shall include a statement of 
the reasons for not using lowest landed cost basis. The head of 
contracting authority designee, or one level above the contracting 
officer, with the concurrence of USAID, shall, on an expedited basis, 
either accept or reject this request and shall document this 
determination in writing and provide a copy to USAID.

[[Page 208]]

    (b) Freight shipping and rates. (1) In determining lowest-landed 
cost as specified in paragraph (a) of this section, the Department shall 
use vessel rates offered in response to solicitations issued by USAID or 
grantee organizations receiving commodities under 7 U.S.C. 1731 et seq.
    (2) USAID may require, or direct a grantee organization to require, 
an ocean carrier to submit offers electronically through a Web-based 
system maintained by the Department. If electronic submissions are 
required, the Department may, at its discretion, accept corrections to 
such submissions that are submitted in a written form other than by use 
of such Web-based system.
    (c) Delivery date. The contracting officer shall consider total 
transit time, as it relates to a final delivery date, in order to 
satisfy Public Law 480 Title II program requirements.
    (d) Delivery points. (1) Commodities offered for delivery free 
alongside ship Great Lakes port range or intermodal bridge-point Great 
Lakes port range that represent the overall (foreign and U.S. flag) 
lowest landed cost will be awarded on a lowest landed cost basis. 
Tonnage allocated on this basis will not be reevaluated on a lowest 
landed cost U.S.-flag basis unless the contracting officer determines 
that 25 percent of the total annual tonnage of bagged, processed, or 
fortified commodities furnished under 7 U.S.C. 1731 et seq. has been, or 
will be, transported from the Great Lakes port range during that fiscal 
year.
    (2) The contracting officer shall consider commodity offers as 
offers for delivery ``intermodal bridge-point Great Lakes port range'' 
only if:
    (i) The offer specifies delivery at a marine cargo-handling facility 
that is capable of loading ocean going vessels at a Great Lakes port, as 
well as loading ocean going conveyances such as barges and container 
vans, and
    (ii) The commodities will be moved from one transportation 
conveyance to another at such a facility.
    (e) Multiple awards or delivery points. (1) If more than one offer 
for the sale of commodities is received or more than one delivery point 
has been designated in such offers, in order to achieve a combination of 
a freight rate and commodity award that produces the lowest landed cost 
for the delivery of the commodity to the foreign destination, the 
contracting officer shall evaluate offers submitted on a delivery point 
by delivery point basis; however, consideration shall be given to 
prioritized ocean transport service in determining lowest landed cost.
    (2) The contracting officer may determine that extenuating 
circumstances preclude awards on the basis of lowest landed cost. 
However, in all such cases, commodities may be transported in compliance 
with cargo preference requirements as determined by USAID.
    (3) The contracting officer shall notify USAID or, if applicable, 
the grantee organization, that its shipping agent will be notified of 
the vessel freight rate used in determining the commodity contract 
award. The grantee organization or USAID will be responsible for 
finalizing the charter or booking contract with the vessel representing 
the freight rate so used.



Sec. 470.203  Cargo preference.

    An agency having responsibility under this subpart shall administer 
its programs, with respect to this subpart, in accordance with 
regulations prescribed by the Secretary of Transportation.

[[Page 209]]



               CHAPTER 5--GENERAL SERVICES ADMINISTRATION




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

                          SUBCHAPTER A--GENERAL
Part                                                                Page
501             General Services Administration Acquisition 
                    Regulation System.......................         211
502             Definitions of words and terms..............         213
503             Improper business practices and personal 
                    conflicts of interest...................         214
504             Administrative matters......................         216
           SUBCHAPTER B--COMPETITION AND ACQUISITION PLANNING
505

[Reserved]

509             Contractor qualifications...................         218
511             Describing agency needs.....................         221
512             Acquisition of commercial items.............         225
          SUBCHAPTER C--CONTRACTING METHODS AND CONTRACT TYPES
513

[Reserved]

514             Sealed bidding..............................         226
515             Contracting by negotiation..................         231
516             Types of contracts..........................         237
517             Special contracting methods.................         238
                  SUBCHAPTER D--SOCIOECONOMIC PROGRAMS
519             Small business programs.....................         240
522             Application of labor laws to Government 
                    acquisitions............................         246
523             Environment, conservation, occupational 
                    safety and drug-free workplace..........         248
525             Foreign acquisition.........................         248
             SUBCHAPTER E--GENERAL CONTRACTING REQUIREMENTS
527             Patents, data, and copyrights...............         249
528             Bonds and insurance.........................         249
529             Taxes.......................................         249
532             Contract financing..........................         250

[[Page 210]]

533             Protests, disputes, and appeals.............         252
             SUBCHAPTER F--SPECIAL CATEGORIES OF CONTRACTING
536             Construction and architect-engineer 
                    contracts...............................         254
537             Service contracting.........................         258
538             Federal supply schedule contracting.........         259
                    SUBCHAPTER G--CONTRACT MANAGEMENT
541             Acquisition of utility services.............         266
542             Contract administration and audit services..         266
543             Contract modifications......................         266
546             Quality assurance...........................         266
547

[Reserved]

549             Termination of contracts....................         267
                     SUBCHAPTER H--CLAUSES AND FORMS
552             Solicitation provisions and contract clauses         268
553             Forms.......................................         325
               SUBCHAPTER I--SPECIAL CONTRACTING PROGRAMS
570             Acquiring leasehold interests in real 
                    property................................         326

[[Page 211]]

                          SUBCHAPTER A_GENERAL

 PART 501_GENERAL SERVICES ADMINISTRATION ACQUISITION REGULATION SYSTEM

               Subpart 501.1_Purpose, Authority, Issuance

Sec.

Sec. 501.101 Purpose.

Sec. 501.103 Authority.

Sec. 501.104 Applicability.

Sec. 501.105 Issuance.

Sec. 501.105-1 Publication and code arrangement.

Sec. 501.105-2 Arrangement of regulations.

Sec. 501.105-3 Copies.

Sec. 501.106 OMB approval under the Paperwork Reduction Act.

             Subpart 501.4_Deviations From the FAR and GSAR


Sec. 501.402 Policy.

Sec. 501.403 Individual deviations.

Sec. 501.404 Class deviations.

Sec. 501.404-70 Contract action.

Sec. 501.404-71 Deviations to the nonregulatory GSAM.

    Authority: 40 U.S.C. 121(c).

    Source: 64 FR 37203, July 9, 1999, unless otherwise noted.

               Subpart 501.1_Purpose, Authority, Issuance



Sec. 501.101  Purpose.

    (a) The General Services Acquisition Regulation (GSAR) contains 
agency acquisition policies and practices, contract clauses, 
solicitation provisions, and forms that control the relationship between 
GSA and contractors and prospective contractors.
    (b) GSAR address rules directly to you, the contracting officer, 
unless otherwise indicated.



Sec. 501.103  Authority.

    GSA's Senior Procurement Executive issues the GSAR under the 
authority of the Federal Property and Administrative Services Act of 
1949, as amended.



Sec. 501.104  Applicability.

    (a) General. The GSAR applies to contracts for suppliers or 
services, including construction.
    (b) Acquisition of leasehold interests in real property. Part 570 
establishes rules for the acquisition of leasehold interests in real 
property. Other provisions of 48 CFR chapter 5 (GSAR) do not apply to 
leases of real property unless specifically cross-reference in part 570.
    (c) Relationship to state. Some GSAR rules implement and interpret 
laws and other authorities affecting procurement. A GSAR rule 
specifically directed by statute has the force and effect of law.
    (d) GSAR/FAR Relationship. The GSAR may deviate from the Federal 
Acquisition Regulation (FAR) if authorized. If the GSAR does not 
implement the FAR, the FAR alone governs.



Sec. 501.105  Issuance.



Sec. 501.105-1  Publication and code arrangement.

    The GSAR is published in the following sources:
    (a) Daily issue of the Federal Register.
    (b) Annual Code of Federal Regulations (CFR), as Chapter 5 of Title 
48.
    (c) GSA Acquisition Manual distributed within GSA.
    (d) GSA Home Page at http://www/gas.gov. Click on either 
``Government Agencies'' or on ``Business and Industry,'' the click on 
``Acquisition.''



Sec. 501.105-2  Arrangement of regulations.

    (a) The GSAR numbers and captions policies and procedures to 
correspond to how they appear in the FAR, e.g., 1.104 in the FAR is 
501.104 in the GSAR.
    (b) GSAR rules not implementing the FAR have numbers beginning with 
70, e.g., part 570, subsection 515.209-70.
    (c) The GSAR may have gaps in its numbering scheme because a FAR 
rule may not require GSAR implementation.



Sec. 501.105-3  Copies.

    The GSAR in CFR form may be purchased from: Superintendent of 
Documents, Government Printing Office, Washington, DC 20402.

[[Page 212]]



Sec. 501.106  OMB approval under the Paperwork Reduction Act.

------------------------------------------------------------------------
               GSAR Reference                      OMB Control No.
------------------------------------------------------------------------
509.105-1(a)...............................  3090-0007
511.140-70.................................  3090-0203
511.204(c).................................  3090-0246
514.201-1(a)...............................  3090-0163
514.201-7(a)...............................  3090-0200
516.203-4(a)(1)............................  3090-0243
516.506....................................  3090-0248
519.70.....................................  3090-0286
519.708(b).................................  3090-0252
522.406-6..................................  1215-0149
523.370....................................  3090-0205
532.111(c).................................  3090-0080
532.905-70.................................  9000-0102
532.905-71.................................  3090-0080
537.110(a).................................  3090-0197
537.110(b).................................  3090-0006
538.273(a)(1)..............................  3090-0250
538.273(a)(3)..............................  3090-0262
538.273(b)(1)..............................  3090-0121
542.1107...................................  3090-0027
546.307-70.................................  3090-0027
546.302-71.................................  3090-0027
552.211-77.................................  3090-0246
552.214-71.................................  3090-0200
552.216-70.................................  3090-0243
552.216-72.................................  3090-0248
552.216-73.................................  3090-0248
552.219-72.................................  3090-0252
552.219-75.................................  3090-0286
552.219-76.................................  3090-0286
552.223-72.................................  3090-0205
552.232-72.................................  3090-0080
552.237-70.................................  3090-0197
552.237-71.................................  3090-0006
552.238-70.................................  3090-0250
552.238-72.................................  3090-0262
552.238-74.................................  3090-0121, 3090-0250
552.242-70.................................  3090-0027
552.246-70.................................  3090-0027
552.246-71.................................  3090-0027
GSA-72-A...................................  3090-0121
GSA-527....................................  3090-0007
GSA-618-D..................................  1215-0149
GSA-1142...................................  3090-0080
GSA-1364...................................  3090-0086
GSA-1678...................................  3090-0027
GSA-2419...................................  9000-0102
570.702(c).................................  3090-0086
------------------------------------------------------------------------


[64 FR 37203, July 9, 1999, as amended at 65 FR 41378, July 5, 2000; 68 
FR 41288, July 11, 2003; 74 FR 21273, May 7, 2009; 74 FR 41063, Aug. 14, 
2009; 74 FR 47738, Sept. 17, 2009; 74 FR 66253, Dec. 15, 2009]

    Editorial Note: At 74 FR 66253, Dec. 15, 2009, the table in Sec. 
501.106 was amended by removing the GSAR reference number ``511.104-70'' 
and its corresponding OMB Control Number ``3090-0203''; however, the 
amendment could not be done because this reference number is not found 
in the table.

             Subpart 501.4_Deviations From the FAR and GSAR



Sec. 501.402  Policy.

    Uniformity is a goal of GSA's Acquisition Regulation System. Despite 
this desire for uniformity, a contracting activity may take any of the 
following actions:
    (a) Develop and test new procedures and techniques.
    (b) Adopt alternate procedures in the public interest for unique 
programmatic or managerial requirements
    (c) Deviate from a regulatory provision implementing a statutory 
requirement provided the deviation does not violate the underlying 
statute. Deviations must not be used to defeat the FAR and GSAR approval 
requirements.



Sec. 501.403  Individual deviations.

    (a) An individual deviation affects only one contract action.
    (1) The Head of the Contracting Activity (HCA) must approve an 
individual deviation to the FAR. The authority to grant an individual 
deviation may not be re-delegated. A copy of the deviation must be 
provided to GSA's Senior Procurement Executive (SPE).
    (2) An individual deviation to the GSAR must be approved by the HCA. 
The authority to grant an individual deviation may be re-delegated to 
the Contracting Director.
    (b) If GSA delegates authority to another agency and requires 
compliance with the GSAR as a condition of the delegation, the 
Contracting Director in the agency receiving the delegation may approve 
individual deviations from the GSAR unless the agency head receiving the 
delegation designates another official.
    (c) Send a copy of each deviation to GSA's SPE (V).

[64 FR 37203, July 9, 1999, as amended at 70 FR 15779, Mar. 29, 2005]



Sec. 501.404  Class deviations.

    (a) A class deviation affects more than one contract action. A 
deviation for any solicitation that will result in multiple awards or 
any solicitation under the multiple award Federal Supply Schedule 
program is considered to

[[Page 213]]

be a class deviation. Each award under such a solicitation is considered 
an individual contract action.
    (1) A class deviation to the FAR must be forwarded by the cognizant 
HCA to GSA's SPE for approval. Prior to approving a class deviation to 
the FAR, the SPE will consult with the Chairman of the Civilian Agency 
Acquisition Council (CAAC) in accordance with FAR 1.404(a)(1).
    (2) A class deviation to the GSAR must be forwarded by the cognizant 
HCA to GSA's SPE for approval.
    (3) When an HCA knows that a proposed class deviation will be 
required on a permanent basis, the HCA should propose or recommend an 
appropriate FAR and/or GSAR revision.
    (b) If GSA delegates authority to another agency and requires 
compliance with the GSAR as a condition of the delegation, the HCA in 
the agency receiving the delegation may approve class deviations from 
the GSAR unless the agency head receiving the delegation designates 
another official.
    (c) Send a copy of each deviation to GSA's SPE (V).
    (d) A request for class deviations must be supported by statements 
that fully describe the need for and the nature of the deviation.
    (e) Class deviations from the GSAR:
    (1) Expire in 12 months if not extended.
    (2) May be rescinded earlier by GSA's SPE or by officials designated 
under paragraph (a) of this section without prejudice to any action 
taken previously.

[64 FR 37203, July 9, 1999, as amended at 70 FR 15780, Mar. 29, 2005]



Sec. 501.404-70  Contract action.

    Contract action. A contract action, for the purpose of determining 
whether an individual or class deviation is appropriate, has the same 
meaning as that used for reporting contract actions to Federal 
Procurement Data System--Next Generation (FPDS-NG). A contract action 
includes, but is not limited to, any of the following:
    (a) Initial letter contract.
    (b) Definitive contract superseding letter contract.
    (c) New definitive contract.
    (d) Purchase order/BPA calls using simplified acquisition 
procedures.
    (e) Orders under single award indefinite delivery contracts.
    (f) Orders under BOA.
    (g) Order/modification under Federal schedule contract.
    (h) Modification.
    (i) Termination for Default.
    (j) Termination for Convenience.
    (k) Order under multiple award contract.
    (l) Initial load of Federal schedule contract.

[70 FR 15780, Mar. 29, 2005]



Sec. 501.404-71  Deviations to the nonregulatory GSAM.

    Handle individual and class deviations to the nonregulatory 
(unshaded) part of the GSAM as stated in 501.403 and 501.404.

[70 FR 15780, Mar. 29, 2005]

                 PART 502_DEFINITIONS OF WORDS AND TERMS

    Authority: 40 U.S.C. 486(c).

    Source: 64 FR 37204, July 9, 1999, unless otherwise noted.

                        Subpart 502.1_Definitions



Sec. 502.101  Definitions.

    Agency competition advocate means the GSA Competition Advocate in 
the Office of the Chief Acquisition Officer.
    Assigned counsel means the attorney employed by the Office of 
General Counsel (including offices of Regional Counsel) assigned to 
provide legal review or assistance.
    Contracting activity competition advocate means the individual 
designated in writing by the Head of the Contracting Activity (HCA). 
This authority may not be redelegated. The HCA must ensure that the 
designated competition advocate is not assigned any duty or 
responsibility that is inconsistent with the advocacy function. The 
identity of the designated official shall be communicated to procuring 
staff and the Senior Procurement Executive.
    Contracting director means:
    (a) Except in the Federal Acquisition Service (FAS), a director of a 
Central

[[Page 214]]

Office or Regional office Division responsible for performing 
contracting or contract administration functions.
    (b) In FAS Central Office--
    (1) The Assistant Commissioner for Assisted Acquisition Services or 
designee;
    (2) The Assistant Commissioner for General Supplies and Services or 
designee;
    (3) The Assistant Commissioner for Integrated Technology Services or 
designee;
    (4) The Assistant Commissioner for Travel, Motor Vehicle and Card 
Services or designee; and
    (5) The Assistant Commissioner for Acquisition Management or 
designee for support offices with contracting functions.
    (c) In FAS Regions, the Assistant Regional Commissioner or designee.
    Contracting officer's representative (COR), contracting officer's 
technical representative (COTR), or contract administrator means a 
Government employee designated in writing by the contracting officer to 
perform specific limited activities for the contracting officer, such as 
contract administration.
    Debarring official or ``suspending official'' means the Senior 
Procurement Executive or a designee.
    Head of the contracting activity means the Deputy Chief Acquisition 
Officer; Commissioners of the Federal Acquisition Service (FAS) or 
Public Buildings Service (PBS); or Regional Commissioners. The Deputy 
Chief Acquisition Officer serves as the HCA for Central Office 
contracting activities outside of FAS and PBS.
    Senior procurement executive means the Deputy Chief Acquisition 
Officer.
    Senior program official means a person reporting to, and designated 
by, the HCA to have overall program responsibility for determining how 
the agency will meet its needs. The official should have a position of 
authority over the participating offices. Examples include Assistant 
Regional Commissioners or Deputy Commissioners.

[74 FR 39564, Aug. 7, 2009]

 PART 503_IMPROPER BUSINESS PRACTICES AND PERSONAL CONFLICTS OF INTEREST

                        Subpart 503.1_Safeguards

Sec.

Sec. 503.104 Procurement integrity.

       Subpart 503.2_Contractor Gratuities to Government Personnel


Sec. 503.204 Treatment of violations.

Subpart 503.4--Contingent Fees

             Subpart 503.5_Other Improper Business Practices


Sec. 503.570 Advertising.

Sec. 503.570-1 Policy.

Sec. 503.570-2 Contract clause.

             Subpart 503.7_Voiding and Rescinding Contracts


Sec. 503.703 Authority.

      Subpart 503.10_Contractor Code of Business Ethics and Conduct


Sec. 503.1004 Contract clauses.

    Authority: 40 U.S.C. 121(c).

    Source: At 64 FR 37204, July 9, 1999, unless otherwise noted.

                        Subpart 503.1_Safeguards



Sec. 503.104  Procurement integrity.

       Subpart 503.2_Contractor Gratuities to Government Personnel



Sec. 503.204  Treatment of violations.

    (a) The Senior Procurement Executive, or designee, makes 
determinations under FAR 3.204.
    The Senior Procurement Executive, or designee, takes all the 
following actions:
    (1) Coordinates with legal counsel;
    (2) Initiates proceedings under FAR 3.204(a) by notifying the 
contractor that GSA is considering action against the contractor for a 
violation of the Gratuities clause. Notice is sent by a certified letter 
to the last known address of the party, its counsel, or agent for 
service of process. In the case of a business, notice is sent to any 
partner,

[[Page 215]]

principal officer, director, owner or co-owner; and
    (3) Presumes receipt if no return receipt is received within 10 
calendar days after mailing the notice.
    (b) The contractor has 30 calendar days to exercise its rights under 
FAR 3.204(b), unless the Senior Procurement Executive, or designee, 
grants an extension.
    (c) If there is a dispute of fact material to making a 
determination, the Senior Procurement Executive, or designee, may refer 
the matter to an agency fact-finding official, designated by the 
Suspension and Debarment Official, in accordance with GSAR 509.403. 
Referrals for fact-finding are not made in cases arising from a 
conviction or indictment as defined in FAR 9.403. If a referral is made, 
the fact-finding official takes all the following actions:
    (1) Gives the contractor an opportunity to dispute material facts 
relating to the determinations under FAR 3.204(a)(1) and (2);
    (2) Conducts proceedings under rules consistent with FAR 3.204(b);
    (3) Schedules a hearing within 20 calendar days of receipt of the 
referral. The contractor or GSA may request an extension for good cause; 
and
    (4) Delivers to the Senior Procurement Executive, or designee, 
written findings of fact (together with a transcription of the 
proceedings, if made) within 20 calendar days after the hearing record 
closes. The findings must resolve any material disputes of fact by a 
preponderance of the evidence.
    (d) The Senior Procurement Executive, or designee, may reject the 
findings of the fact-finding official only if the findings are clearly 
erroneous or arbitrary and capricious.
    (e) In cases arising from conviction or indictment, or in which 
there are no disputes of material fact, the Senior Procurement 
Executive, or designee, conducts the hearing required by FAR 3.204(b).
    (f) If the Gratuities clause was violated, the contractor may 
present evidence of mitigating factors to the Senior Procurement 
Executive, or designee, in accordance with FAR 3.204(b) either orally or 
in writing, consistent with a schedule the Senior Procurement Executive, 
or designee, establishes. The Senior Procurement Executive, or designee, 
exercises the Government's rights under FAR 3.204(c) only after 
considering mitigating factors.

[64 FR 37204, July 9, 1999, as amended at 74 FR 51511, Oct. 7, 2009]

Subpart 503.4--Contingent Fees

             Subpart 503.5_Other Improper Business Practices



Sec. 503.570  Advertising.



Sec. 503.570-1  Policy.

    GSA policy precludes contractors from making references to GSA 
contracts in commercial advertising in a manner that states or implies 
the Government approves or endorses the product or service or considers 
it superior to other products or services. The intent of this policy is 
to prevent the appearance of Government bias toward any product or 
service.

[64 FR 37204, July 9, 1999, as amended at 74 FR 51511, Oct. 7, 2009]



Sec. 503.570-2  Contract clause.

    Insert the clause at 552.203-71, Restriction on Advertising, in 
solicitations and contracts, including acquisitions of leasehold 
interests in real property, if the contract amount is expected to exceed 
the simplified acquisition threshold.

             Subpart 503.7_Voiding and Rescinding Contracts



Sec. 503.703  Authority.

    Pursuant to FAR 3.703 and 3.705(b), the authority to void or rescind 
contracts resides with the Senior Procurement Executive.

[74 FR 51512, Oct. 7, 2009]

      Subpart 503.10_Contractor Code of Business Ethics and Conduct



Sec. 503.1004  Contract clauses.

    (a) The FAR threshold for the clause at 52.203-14, Display of 
Hotline Poster(s), is $5,000,000. However, GSA has exercised the 
authority provided at FAR 3.1004(b)(1)(i) to establish a lower 
threshold, $1,000,000, for inclusion of

[[Page 216]]

the clause when the contract or order is funded with disaster assistance 
funds.
    (b) The information required to be inserted in the clause at FAR 
52.203-14, Display of Hotline Poster(s), is as follows:
    (1) Poster: GSA Office of Inspector General ``FRAUDNET HOTLINE''; 
and
    (2) Obtain from: Contracting Officer.

[74 FR 51512, Oct. 7, 2009]

                     PART 504_ADMINISTRATIVE MATTERS

    Subpart 504.4_Safeguarding Classified Information Within Industry

Sec.

Sec. 504.402 General.

Sec. 504.475 Return of classified information.

            Subpart 504.5_Electronic Commerce in Contracting


Sec. 504.500 Scope of subpart.

Sec. 504.502 Policy.

Sec. 504.570 Procedures for using the EPS.

                    Subpart 504.6_Contract Reporting


Sec. 504.602-71 Federal Procurement Data System--Public access to data.

    Authority: 40 U.S.C. 486(c).

    Source: 64 FR 37205, July 9, 1999, unless otherwise noted.

    Subpart 504.4_Safeguarding Classified Information Within Industry



Sec. 504.402  General.

    (a) This subpart:
    (1) Prescribes procedures for safeguarding classified information 
required to be disclosed to contractors in connection with the 
solicitation of offers, and the award, performance, and termination of 
contracts.
    (2) Implements the requirements of the Department of Defense's 
Industrial Security Regulation (ISR) and Industrial Security Manual for 
Safeguarding Classified Information (ISM). By agreement, the Department 
of Defense (DOD) will act for, and on behalf of, GSA in rendering 
security services required for safeguarding classified information 
released by GSA to U.S. industry.
    (b) As used in this subpart, the term:
    (1) ``Contractor(s)'' means prospective contractors, subcontractors, 
vendors, and suppliers.
    (2) ``U.S. industry'' means those industries (including educational 
and research institutions) located within the United States, its 
possessions, and the Commonwealth of Puerto Rico.



Sec. 504.475  Return of classified information.

    (a) You must recover classified information unless it has been 
destroyed as provided in paragraph 19 of the ISM. The Government agency 
that provided classified information to a GSA contractor is responsible 
for the return of the information.
    (b) You must ensure that classified information furnished to 
prospective offerors, offerors, or contractors is returned immediately 
after any of the following:
    (1) After bid opening or closing date for receipt of proposals by 
non-responding offerors.
    (2) After contract award by unsuccessful offerors.
    (3) Upon termination or completion of the contract.
    (4) Upon notification that authorization to release classified 
information has been withdrawn.
    (5) After notification that a facility:
    (i) Does not have adequate means to safeguard classified 
information.
    (ii) Has had its security clearance revoked or inactivated.
    (6) Whenever otherwise instructed by the authority responsible for 
the security classification.

            Subpart 504.5_Electronic Commerce in Contracting



Sec. 504.500  Scope of subpart.

    This subpart provides policy and procedure for use of GSA's 
Electronic Posting System (EPS).



Sec. 504.502  Policy.

    (a) The EPS is GSA's primary vehicle for disseminating synopses and 
written solicitations. GSA intends that the EPS will substitute for, not 
supplement, paper copies of solicitations.

[[Page 217]]

(Note that FAR 2.101 defines ``in writing'' or ``written'' to include 
``electronically transmitted and stored information.'')
    (b) This policy does not apply to orders placed against existing 
contracts, including Federal Supply Service schedule contracts.
    (c) Nothing in this policy limits your authority to obtain oral 
quotations or proposals as authorized by regulation (e.g., FAR 13.106-1 
or FAR 15.203(f)).



Sec. 504.570  Procedures for using the EPS.

    (a) You must use the EPS to issue any synopsis required by FAR part 
5 or GSAR part 505.
    (b) You must issue each written solicitation on the EPS, except as 
provided in paragraphs (c)(2) and (d) of this section.
    (c) Although GSA intends that the EPS will substitute for paper 
copies of solicitations, web-based transactions are not practical in 
some industries or in some geographic areas at this time.
    (1) If you expect that electronic access to a solicitation will 
result in adequate competition, distribute the solicitation only through 
the EPS. Include the following notice in the related synopsis:

    GSA is issuing this solicitation only electronically. Interested 
parties may access the solicitation at http://www.eps.gov. This site 
provides instructions for downloading the solicitation file.

    (2) If you believe that distribution of paper copies is necessary to 
ensure adequate competition, document the file to justify distribution 
of paper copies. Include the notice in paragraph (c)(1) of this section 
in the related synopsis, leaving out the first sentence.
    (d) In some cases, release of construction drawings must be 
controlled to ensure adequate security. In other cases, an exhibit or 
attachment incorporated in a solicitation may not be available 
electronically. In either of these cases, you must explain in both the 
synopsis and the solicitation how interested parties may obtain a copy. 
In addition to the notice required by paragraph (c), include a notice 
substantially the same as follows in both the synopsis and solicitation. 
Tailor the notice as necessary for the particular acquisition.

    This solicitation incorporates documents which are not available 
electronically. See [Identify the solicitation section that lists the 
subject documents]. Interested parties may request copies of these 
documents by writing the Contracting Officer at the address in [Identify 
address block in the solicitation].

    (e) The Electronic Posting System Manual provides detailed 
instructions for using the EPS. The Manual is available at http://
www.eps.gov/buyer.html.

                    Subpart 504.6_Contract Reporting



Sec. 504.602-71  Federal Procurement Data System--Public access to data.

    (a) The FPDS database. The General Services Administration awarded a 
contract for creation and operation of the Federal Procurement Data 
System (FPDS) database. That database includes information reported by 
departments and agencies as required by Federal Acquisition Regulation 
(FAR) Subpart 4.6. One of the primary purposes of the FPDS database is 
to provide information on Government procurement to the public.
    (b) Fee for direct hook-up. To the extent that a member of the 
public requests establishment of real-time integration of reporting 
services to run reports from another application, a one-time charge of 
$2,500 for the original integration must be paid by the requestor. This 
one-time charge covers the setup and certification required for an 
integrator to access the FPDS database and for technical assistance to 
help integrators use the web services. The fee will be paid to the FPDS 
contractor and credited to invoices submitted to GSA by the FPDS 
contractor.

[69 FR 77662, Dec. 28, 2004]

[[Page 218]]

            SUBCHAPTER B_COMPETITION AND ACQUISITION PLANNING

                           PART 505 [RESERVED]

                   PART 509_CONTRACTOR QUALIFICATIONS

            Subpart 509.1_Responsible Prospective Contractors

Sec.

Sec. 509.105 Procedures.

Sec. 509.105-1 Obtaining information.

Sec. 509.105-2 Determinations and documentation.

Sec. 509.106-2 Requests for preaward surveys.

Subpart 509.2 [Reserved]

            Subpart 509.3_First Article Testing and Approval


Sec. 509.306 Solicitation requirements.

Sec. 509.308-1 Testing performed by the contractor.

Sec. 509.308-2 Testing performed by the Government.

         Subpart 509.4_Debarment, Suspension, and Ineligibility


Sec. 509.401 Applicability.

Sec. 509.403 Definitions.

Sec. 509.405 Effect of listing.

Sec. 509.405-1 Continuation of current contracts.

Sec. 509.405-2 Restrictions on subcontracting.

Sec. 509.406 Debarment.

Sec. 509.406-1 General.

Sec. 509.406-3 Procedures.

Sec. 509.407 Suspension.

Sec. 509.407-1 General.

Sec. 509.407-3 Procedures.

    Authority: 40 U.S.C. 121(c).

    Source: 64 FR 37207, July 9, 1999, unless otherwise noted.

            Subpart 509.1_Responsible Prospective Contractors



Sec. 509.105  Procedures.



Sec. 509.105-1  Obtaining information.

    (a)  From a prospective contractor. FAR 9.105-1 lists a number of 
sources of information that a contracting officer may utilize before 
making a determination of responsibility. The contracting officer may 
request information directly from a prospective contractor using GSA 
Form 527, Contractor's Qualifications and Financial Information, but 
only after exhausting other available sources of information.
    (b) From Government personnel. The contracting officer may solicit 
and consider information from any appropriate activities, e.g., legal 
counsel, quality control, contract management, credit and finance, and 
auditors before determining that an offeror is responsible.

[74 FR 12732, Mar. 25, 2009]



Sec. 509.105-2  Determinations and documentation.

    (a) The contracting officer shall provide written notification to a 
prospective contractor determined not responsible. Include the basis for 
the determination. Notification provides the prospective contractor with 
the opportunity to correct any problem for future solicitations.
    (b) Due to the potential for de facto debarment, the contracting 
officer shall avoid making repeated determinations of nonresponsibility 
based on the same past performance information.
    (c) To provide for timely consideration of the need to institute 
action to debar a contractor, the contracting officer shall submit a 
copy of each nonresponsibility determination, other than those based on 
capacity or financial capability, to the Suspension and Debarment 
Official in the Office of the Chief Acquisition Officer.

[74 FR 12732, Mar. 25, 2009]



Sec. 509.106-2  Requests for preaward surveys.

    Federal Supply Service (FSS). Contracting activities in FSS may use 
GSA Form 353, Performance Evaluation & Facilities Report, in lieu of SF 
1403 through 1406. Complete Section I in accordance with instructions in 
553.370-353-I.

Subpart 509.2 [Reserved]

[[Page 219]]

            Subpart 509.3_First Article Testing and Approval



Sec. 509.306  Solicitation requirements.

    The clauses at FAR 52.209-3 and 52.209-4 do not cover all the 
solicitation requirements described in FAR 9.306. If a solicitation 
contains a testing and approval requirement, the contracting officer 
must address the requirements in FAR 9.306(d) and (f) through (j) in the 
solicitation's Section H, special contract requirements.

[74 FR 12732, Mar. 25, 2009]



Sec. 509.308-1  Testing performed by the contractor.

    In FSS solicitations and contracts that will require the contractor 
to perform testing, insert 552.209-72, Supplemental Requirements for 
First Article Approval--Contractor Testing, and FAR 52.209-3, Alternate 
I.



Sec. 509.308-2  Testing performed by the Government.

    In FSS solicitations and contracts that will have the Government 
responsible for first article testing, insert 552.209.73, Supplemental 
Requirements for First Article Approval--Government Testing, and FAR 
52.209-4, Alternate I.

         Subpart 509.4_Debarment, Suspension, and Ineligibility



Sec. 509.401  Applicability.

    This subpart applies to all the following:
    (a) Acquisitions of personal property, nonpersonal services, 
construction, and space in buildings.
    (b) Acquisition of transportation services (Federal Management 
Regulation (FMR) Parts 102-117 and 102-118 (41 CFR parts 102-117 and 
102-118)).
    (c) Contracts for disposal of personal property (FMR Parts 102-36 
through 102-38 (41 CFR parts 102-36 through 102-38)).
    (d) Covered transactions as defined by 41 CFR part 105-68.

[74 FR 12732, Mar. 25, 2009]



Sec. 509.403  Definitions.

    Debarring official means the Suspension and Debarment Official 
within the Office of the Chief Acquisition Officer.
    Fact-finding official, means the Suspension and Debarment Official 
or a designee.
    Notice means a letter sent by certified mail, return receipt 
requested, to the last known address of a party, its counsel, or agent 
for service of process. In the case of a business, such notice may be 
sent to any partner, principal officer, director, owner or co-owner, or 
joint venturer. If no return receipt is received within 10 calendar days 
of mailing, receipt will then be presumed.
    Suspending official means the Suspension and Debarment Official 
within the Office of the Chief Acquisition Officer.

[64 FR 37207, July 9, 1999, as amended at 74 FR 12732, Mar. 25, 2009]



Sec. 509.405  Effect of listing.



Sec. 509.405-1  Continuation of current contracts.

    (a) When a contractor appears on the current EPLS, consider 
terminating a contract under any of the following circumstances:
    (1) Any circumstances giving rise to the debarment or suspension 
also constitute a default in the contractor's performance of the 
contract.
    (2) The contractor presents a significant risk to the Government in 
completing the contract.
    (3) The conduct that provides the cause of the suspension, proposed 
debarment, or debarment involved a GSA contract.
    (b) Before terminating a contract when a contractor appears on the 
current EPLS, consider the following factors:
    (1) Seriousness of the cause for debarment or suspension.
    (2) Extent of contract performance.
    (3) Potential costs of termination and reprocurement.
    (4) Need for or urgency of the requirement, contract coverage, and 
the impact of delay for reprocurement.
    (5) Availability of other safeguards to protect the Government's 
interest until completion of the contract.
    (6) Availability of alternate competitive sources to meet the 
requirement

[[Page 220]]

(e.g., other multiple award contracts, readily available commercial 
items.)
    (c) The responsibilities of the agency head under FAR 9.405-1 are 
delegated to the GSA Suspension and Debarment Official.

[74 FR 12732, Mar. 25, 2009]



Sec. 509.405-2  Restrictions on subcontracting.

    The responsibilities of the agency head under FAR 9.405-2(a) are 
delegated to the GSA Suspension and Debarment Official.

[74 FR 12732, Mar. 25, 2009]



Sec. 509.406  Debarment.



Sec. 509.406-1  General.

    The Suspension and Debarment Official is the designee under FAR 
9.406-1(c).

[74 FR 12733, Mar. 25, 2009]



Sec. 509.406-3  Procedures.

    (a) Investigation and referral. (1) Refer to the Suspension and 
Debarment Official matters involving serious contract improprieties or 
performance deficiencies. Performance deficiencies that continue over a 
period of time or apply to more than one contract may warrant debarment 
consideration.
    (2) Refer possible criminal or fraudulent activities to the Office 
of the Inspector General (OIG). See 5 CFR 6701.107, Reporting Waste, 
Fraud, Abuse, and Corruption. If, after investigation, the OIG believes 
a cause for debarment exists, it will refer the matter to the Suspension 
and Debarment Official for consideration of debarment action.
    (b) Reports. Include in referrals to the Suspension and Debarment 
Official a report that contains at least the following:
    (1) The recommendation and supporting rationale.
    (2) A list of parties to be considered for possible debarment, 
including the contractor, principals, and affiliates. Include last known 
home and business addresses, zip codes, and DUNS Numbers.
    (3) A statement of facts.
    (4) Copies of documentary evidence and a list of witnesses. Include 
addresses and telephone numbers. Determine their availability to appear 
at a fact-finding proceeding and identify the subject matter of their 
testimony.
    (5) GSA's acquisition history with the contractor. Include recent 
experience, copies of the pertinent contracts, and an explanation of 
impact debarment would have on GSA programs. OIG referrals do not 
require this explanation; the Suspension and Debarment Official will 
obtain the information directly from the contracting activity(s).
    (6) A list of any known active or potential criminal investigations, 
criminal or civil proceedings, or administrative claims before the Board 
of Contract Appeals.
    (c) Review. The Suspension and Debarment Official will review the 
report, and after coordinating with assigned legal counsel--
    (1) Initiate debarment action;
    (2) Decline debarment action;
    (3) Request additional information; or
    (4) Refer the matter to the OIG for further investigation and 
development of a case file.
    (d) Decisionmaking process. (1) The Suspension and Debarment 
Official will provide:
    (i) Notice of declinations, proposed debarments, and decisions to 
the referring activity.
    (ii) Notice of proposed debarment to each party being considered for 
debarment.
    (iii) Decision notices to each party after considering information 
in the administrative record and information and argument submitted by 
the affected party or parties.
    (2) A party proposed for debarment:
    (i) Has 30 calendar days after receipt of the notice to respond to 
the Suspension and Debarment Official or the debarment becomes final.
    (ii) May request and receive a copy of the administrative record 
that was the basis for the proposed debarment. If information is 
withheld, the party will be notified and provided the reason.
    (iii) May request the opportunity to present information and 
argument in person to the Suspension and Debarment Official. The 
Suspension and Debarment Official will schedule an oral presentation 
within 20 calendar days of

[[Page 221]]

receipt of the request, unless a longer period of time is requested by 
the party. An oral presentation is informal and a transcript usually is 
not made. The party may supplement the oral presentation with written 
information and arguments.
    (iv) May identify to the Suspension and Debarment Official material 
facts in dispute and the bases. For an action other than one based on a 
conviction of civil judgment, a party may request review and a written 
finding by a fact-finding official.
    (3) Following a review of the record and, if needed, a presentation 
by the contractor in opposition to the proposed action, the Suspension 
and Debarment Official will determine whether there is a genuine dispute 
of material fact. If so, the Suspension and Debarment Official will 
initiate the fact-finding process. The fact-finding official will:
    (i) Establish a date for a fact-finding proceeding, normally to be 
held within 45 days of the determination of who will function as the 
fact-finding official.
    (ii) Grant extensions for good cause.
    (iii) Provide notice of the scheduled hearing.
    (iv) Provide the parties with a schedule for exchange of documents 
and witness lists.
    (v) Develop an official transcript of the fact-finding proceeding.
    (vi) Provide the Government's representative and the contractor with 
an opportunity to present evidence relevant to the facts at issue. The 
contractor may appear in person or through a representative.
    (vii) Conduct hearings under rules consistent with FAR 9.406-3 
pertaining to fact finding. Neither the Federal Rules of Evidence nor 
the Federal Rules of Civil Procedure govern fact finding. Hearsay 
evidence may be presented and will be given appropriate weight by the 
fact-finding official.
    (viii) Provide for witness testimony. Witnesses may testify in 
person. Witnesses are subject to cross examination.
    (ix) Prepare written findings of fact based on a preponderance of 
the evidence and submit them to both the Suspension and Debarment 
Official and the contractor within 20 calendar days following the 
conclusion of the fact-finding proceeding.

[64 FR 37207, July 9, 1999, as amended at 74 FR 12733, Mar. 25, 2009]



Sec. 509.407  Suspension.



Sec. 509.407-1  General.

    The Suspension and Debarment Official is the designee under FAR 
9.407-1(d).

[64 FR 37207, July 9, 1999, as amended at 74 FR 12733, Mar. 25, 2009]



Sec. 509.407-3  Procedures.

    (a) General. The procedures in 509.406-3 apply to suspension actions 
except as noted in paragraph (b) of this section.
    (b) Fact-finding. (1) Fact-finding will not be conducted in an 
action:
    (i) Based on an indictment.
    (ii) When the Suspension and Debarment Official finds no genuine 
dispute of material facts.
    (2) If the action is not based on an indictment, the Suspension and 
Debarment Official must coordinate with the Department of Justice or 
state prosecutorial authority through OIG. Based on the advice received, 
the Suspension and Debarment Official will determine if fact-finding 
would impair substantial interests of the Federal or state Government. 
In an action not based on an indictment, a suspended party may:
    (i) Identify to the Suspension and Debarment Official material facts 
in dispute and the bases.
    (ii) Request review and a written finding by a fact-finding official 
to resolve genuine disputes of material fact. For procedures involving a 
genuine dispute of material fact, see 509.406-3(d)(3).

[64 FR 37207, July 9, 1999, as amended at 74 FR 12733, Mar. 25, 2009]

                    PART 511_DESCRIBING AGENCY NEEDS

       Subpart 511.2_Using and Maintaining Requirements Documents

Sec.

Sec. 511.204 Solicitation provisions and contract clauses.

[[Page 222]]

             Subpart 511.4_Delivery or Performance Schedules


Sec. 511.404 Contract clauses.

                Subpart 511.6_Priorities and Allocations


Sec. 511.600 Scope of subpart.

Sec. 511.601 [Reserved]

Sec. 511.602 General.

Sec. 511.603 Procedures.

    Authority: 40 U.S.C. 121(c).

    Source: 64 FR 37209, July 9, 1999, unless otherwise noted.

       Subpart 511.2_Using and Maintaining Requirements Documents



Sec. 511.204  Solicitation provisions and contract clauses.

    (a) Federal specifications. The contracting officer shall insert the 
clause at 552.211-72, Reference to Specifications in Drawings, in 
solicitations and contracts citing Federal or agency specifications that 
contain drawings.
    (b) Supply contracts that exceed the simplified acquisition 
threshold. (1) The contracting officer shall include the clause at 
552.211-73, Marking, in solicitations and contracts for supplies when 
deliveries may be made to both civilian and military activities and the 
contract amount is expected to exceed the simplified acquisition 
threshold.
    (2) The contracting officer shall include the clause at 552.211-75, 
Preservation, Packaging, and Packing, in solicitations and contracts for 
supplies expected to exceed the simplified acquisition threshold. The 
contracting officer may also include the clause in contracts estimated 
to be at or below the simplified acquisition threshold when appropriate. 
The contracting officer shall use Alternate I in solicitations and 
contracts for--
    (i) Federal Supply Schedule 70 and the Consolidated Products and 
Services Schedule containing information technology Special Item 
Numbers; or
    (ii) Federal Supply Schedules for recovery purchasing (see 
538.7102).
    (3) The contracting officer shall insert a clause substantially the 
same as the clause at 552.211-76, Charges for Packaging, Packing, and 
Marking, in solicitations and contracts for supplies to be delivered to 
GSA distribution centers.
    (4) The contracting officer shall include the clause 552.211-85, 
Consistent Pack and Package Requirements, in solicitations and contracts 
for supplies when deliveries may be made to both civilian and military 
activities and the contract amount is expected to exceed the simplified 
acquisition threshold.
    (5) The contracting officer shall include the clause 552.211-86, 
Maximum Weight Per Shipping Container, in solicitations and contracts 
for supplies when deliveries may be made to both civilian and military 
activities and the contract amount is expected to exceed the simplified 
acquisition threshold.
    (6) The contracting officer shall include the clause 552.211-87, 
Export Packing, in solicitations and contracts for supplies when 
deliveries may be made to both civilian and military activities and the 
contract amount is expected to exceed the simplified acquisition 
threshold.
    (7) The contracting officer shall include the clause 552.211-88, 
Vehicle Export Preparation, in solicitations and contracts for supplies 
when deliveries may be made to both civilian and military activities and 
the contract amount is expected to exceed the simplified acquisition 
threshold.
    (8) The contracting officer shall include the clause at 552.211-89, 
Non-Manufactured Wood Packaging Material for Export, in solicitations 
and contracts for supplies when deliveries may be made to both civilian 
and military activities overseas and the contract amount is expected to 
exceed the simplified acquisition threshold.
    (9) The contracting officer shall include the clause 552.211-90, 
Small Parts, in solicitations and contracts for supplies when deliveries 
may be made to both civilian and military activities and the contract 
amount is expected to exceed the simplified acquisition threshold.
    (10) The contracting officer shall include the clause 552.211-91, 
Vehicle Decals, Stickers, and Data Plates, in solicitations and 
contracts for supplies when deliveries may be made to both civilian and 
military activities and the contract amount is expected to exceed the 
simplified acquisition threshold.

[[Page 223]]

    (11) The contracting officer shall include the clause 552.211-92, 
Radio Frequency Identification (RFID) using Passive Tags, in 
solicitations and contracts for supplies when deliveries may be made to 
military activities and the contract amount is expected to exceed the 
simplified acquisition threshold.
    (12) The contracting officer shall include the clause 552.211-93, 
Unique Item Identification (UID), in solicitations and contracts for 
supplies when deliveries may be made to military activities and a single 
item exceeds $5,000.00 in cost.
    (c) Supply contracts. The contracting officer shall include the 
clause at 552.211-77, Packing List, in solicitations and contracts for 
supplies, including purchases over the micropurchase threshold. Use 
Alternate I in solicitations and contracts for--
    (1) FSS Schedule 70 and the Consolidated Products and Services 
Schedule containing information technology Special Item Numbers; or
    (2) Federal Supply Schedules for recovery purchasing (see 538.7102).

[74 FR 66253, Dec. 15, 2009]

             Subpart 511.4_Delivery or Performance Schedules



Sec. 511.404  Contract clauses.

    In supply contracts, the contracting officer shall use the clauses 
as specified in this section.
    (a) Shelf-life items. The contracting officer shall use the 
following clauses in solicitations and contracts that require delivery 
of shelf-life items within a specified number of months from the date of 
manufacture or production:
    (1) The contracting officer shall insert 552.211-79, Acceptable Age 
of Supplies, if the required shelf-life period is 12 months or less, and 
lengthy acceptance testing may be involved. For items having a limited 
shelf-life, substitute Alternate I when required by the director of the 
portfolio concerned.
    (2) The contracting officer shall insert 552.211-80, Age on 
Delivery, if the required shelf-life period is more than 12 months, or 
when source inspection can be performed within a short time period.
    (b) Stock replenishment contracts. The contracting officer shall 
insert 552.211-81, Time of Shipment, in solicitations and stock 
replenishment contracts that do not include the Availability for 
Inspection, Testing, and Shipment/Delivery clause at 552.211-83 and 
require shipment within 45 calendar days after receipt of the order. If 
shipment is required in more than 45 days, the contracting officer shall 
use Alternate I.
    (c) Indeterminate testing time. The contracting officer shall insert 
552.211-83, Availability for Inspection, Testing, and Shipment/Delivery, 
in solicitations and contracts that provide for source inspection by 
Government personnel and that require lengthy testing for which time 
frames cannot be determined in advance. If the contract is for stock 
items, the contracting officer shall use Alternate I.
    (d) The contracting officer shall insert the clause at 552.211-94, 
Time of Delivery, in solicitations and contracts for supplies for the 
Stock Program when neither of the FAR delivery clauses (FAR 52.211-8 or 
52.211-9) is suitable.

[74 FR 66253, Dec. 15, 2009]

                Subpart 511.6_Priorities and Allocations

    Source: 69 FR 55934, Sept. 16, 2004, unless otherwise noted.



Sec. 511.600  Scope of subpart.

    Pursuant to the Defense Priorities and Allocations System (DPAS) 
Delegation 3, the Department of Commerce (DOC) has delegated to GSA the 
authority to use the DPAS under certain conditions. DPAS Delegation 3 
restricts use of DPAS authority to GSA supply system procurement in 
support of the Department of Defense (DoD), Department of Energy (DoE), 
and Federal Emergency Management Agency (FEMA) approved programs.

[74 FR 66254, Dec. 15, 2009]

[[Page 224]]



Sec. 511.601  [Reserved]



Sec. 511.602  General.

    (a) The purpose of the DPAS is to assure the timely availability of 
industrial resources to meet current national defense, energy, and civil 
emergency preparedness program requirements and to provide an operating 
system to support rapid industrial response in a national emergency. The 
primary statutory authority for the DPAS is Title I of the Defense 
Production Act of 1950, as amended, with additional authority from the 
Selective Service Act of 1948 and the Robert T. Stafford Disaster Relief 
and Emergency Assistance Act. Executive Orders 12919 and 12742 delegate 
to the DOC authority to administer the DPAS. Within the DOC, the Office 
of Strategic Industries and Economic Security (SIES) is assigned 
responsibility for DPAS implementation, administration, and compliance.
    (b) The DPAS is published in the Code of Federal Regulations at 15 
CFR part 700. This regulation provides an overview, a detailed 
explanation of operations and procedures, and other implementing 
guidance, including information on special priorities assistance and 
compliance.
    (c) Orders placed under DPAS are ``rated orders.'' Rated orders must 
receive preferential treatment only as necessary to meet delivery 
requirements. Rated orders are identified by a rating symbol of either 
``DX'' or ``DO'' followed by a program identification symbol. All ``DO'' 
rated orders have equal priority with each other and take preference 
over unrated orders. All ``DX'' rated orders have equal priority with 
each other and take preference over ``DO'' rated orders and unrated 
orders. A program identification symbol indicates which approved program 
is supported by the rated order.
    (d) The authority delegated to GSA shall not be used to support the 
procurement of any items that--
    (1) Are commonly available in commercial markets for general 
consumption;
    (2) Do not require major modification when purchased for approved 
program use;
    (3) Are readily available in sufficient quantity so as to cause no 
delay in meeting approved program requirements; or
    (4) Are to be used primarily for administrative purposes (including 
Federal Supply Classification (FSC) classes, groups, or items), such as 
for personnel or financial management. The Commissioner, FAS, shall 
issue additional guidance, as may be necessary, to ensure effective 
implementation of its delegated DPAS authority.

[74 FR 66254, Dec. 15, 2009]



Sec. 511.603  Procedures.

    (a) A DPAS rating may be placed against an entire contract at time 
of award or an individual order issued under an existing, otherwise 
unrated, contract. FAR 11.604 requires contracting officers to insert 
the provision at 52.211-14, Notice of Priority Rating for National 
Defense, Emergency Preparedness, and Energy Program Use, in 
solicitations when the contract or order to be awarded will be a rated 
order and to insert the clause at 52.211-15, Defense Priority and 
Allocation Requirements, in contracts that are rated orders.
    (b) In addition to the FAR provision and clause referenced in 
paragraph (a) of this section, the contract or order must include the 
following (see 15 CFR 700.12):
    (1) The appropriate priority rating symbol (i.e., either ``DO'' or 
``DX'') along with the program identification symbol. When GSA 
contracting officers place DO rated orders, they must use program 
identification symbol ``K1''. When placing a DX-rated order for other 
agencies, GSA contracting officers must use the requesting agency 
program identification symbol from the DoD Master Urgency List and may 
only do so when GSA is acting as the procuring agent for DoD or DoE and 
has received a ``DX'' rated contract or order from either department.
    (2) A required delivery date. The words ``as soon as possible'' or 
``immediately'' do not constitute a required delivery date. Use of 
either a specific date or a specified number of days ARO (after receipt 
of order) is acceptable.

[[Page 225]]

    (3) The written signature on a manually placed order, or the digital 
signature or name on an electronically placed order of an individual 
authorized to place rated orders.
    (4) A statement that reads substantially as follows: ``This is a 
rated order certified for national defense use, and you are required to 
follow all the provisions of the Defense Priorities and Allocations 
System regulation (15 CFR part 700)''.
    (c) Multiple and Single Award Schedule contracts are not rated at 
time of award.

[74 FR 66254, Dec. 15, 2009]

                PART 512_ACQUISITION OF COMMERCIAL ITEMS

    Authority: 40 U.S.C. 486(c).

   Subpart 512.3_Solicitation Provisions and Contract Clauses for the 
                     Acquisition of Commercial Items



Sec. 512.301  Solicitation provisions and contract clauses for the 
          acquisition of commercial items.

    (a) Solicitation provisions and clauses. Insert these provisions or 
clauses in solicitations or solicitations and contracts, respectively, 
in accordance with the instructions provided:
    (1) 552.212-71, Contract Terms and Conditions Applicable to GSA 
Acquisition of Commercial Items, when listed clauses apply. The clause 
provides for incorporation by reference of terms and conditions which 
are, to the maximum extent practicable, consistent with customary 
commercial practice. If necessary, tailor this clause.
    (2) 552.212-72, Contract Terms and Conditions Required to Implement 
Statutes or Executive Orders Applicable to GSA Acquisitions of 
Commercial Items, when listed clauses apply. The clause provides for the 
incorporation by reference of terms and conditions required to implement 
provisions of law or executive orders that apply to commercial item 
acquisitions.
    (b) Discretionary use of GSAR provisions and clauses. Consistent 
with the limitations contained in FAR 12.302(c), include in 
solicitations and contracts by addendum other GSAR provisions and 
clauses.
    (c) Use of additional provisions and clauses. The Senior Procurement 
Executive must approve the use of a provision or clause that is either 
not:
    (1) Prescribed in the FAR or GSAR for use in contracts for 
commercial items.
    (2) Consistent with customary commercial practice.
    (d) In solicitations issued in conjunction with the policy and 
procedures in FAR part 14, Sealed Bidding; or FAR part 15, Contracting 
by Negotiation, include the two notices in paragraphs (d)(1) and (d)(2) 
of this section, except that acquisitions of leasehold interests in real 
property, must include only the notice in paragraph (d)(1) of this 
section.
    (1) The information collection requirements contained in this 
solicitation/contract are either required by regulation or approved by 
the Office of Management and Budget pursuant to the Paperwork Reduction 
Act and assigned OMB Control No. 3090-0163.
    (2) The General Services Administration's hours of operation are 8 
a.m. to 4:30 p.m. Requests for preaward debriefings postmarked or 
otherwise submitted after 4:30 p.m. will be considered submitted the 
following business day. Requests for postaward debriefings delivered 
after 4:30 p.m. will be considered received and filed the following 
business day.

[75 FR 5242, Feb. 2, 2010]

[[Page 226]]

           SUBCHAPTER C_CONTRACTING METHODS AND CONTRACT TYPES

                           PART 513 [RESERVED]

                         PART 514_SEALED BIDDING

                   Subpart 514.2_Solicitation of Bids

Sec.

Sec. 514.201 Preparation of invitations for bids.

Sec. 514.201-1 Uniform contract format.

Sec. 514.201-2 Part I--The Schedule.

Sec. 514.201-6 Solicitation provisions.

Sec. 514.201-7 Contract clauses.

Sec. 514.202 General rules for solicitation of bids.

Sec. 514.202-4 Bid samples.

Sec. 514.202-5 Descriptive literature.

Sec. 514.203-1 Transmittal to prospective bidders.

Sec. 514.270 Aggregate awards.

Sec. 514.270-1 Definition.

Sec. 514.270-2 Guidelines for use.

Sec. 514.270-3 Evaluation factors for award.

Sec. 514.270-4 Grouping line items for aggregate award.

Sec. 514.270-5 Evaluation methodologies for aggregate awards.

Sec. 514.270-6 Guidelines for using the weight factors method.

Sec. 514.270-7 Guidelines for using the price list method.

           Subpart 514.4_Opening of Bids and Award of Contract


Sec. 514.407 Mistakes in bids.

Sec. 514.407-3 Other mistakes disclosed before award.

Sec. 514.407-4 Mistakes after award.

    Authority: 40 U.S.C. 486(c).

    Source: 64 FR 37211, July 9, 1999, unless otherwise noted.

                   Subpart 514.2_Solicitation of Bids



Sec. 514.201  Preparation of invitations for bids.



Sec. 514.201-1  Uniform contract format.

    Include the following notice in each solicitation:

    The information collection requirements contained in this 
solicitation/contract, are either required by regulation or approved by 
the Office of Management and Budget pursuant to the Paperwork Reduction 
Act and assigned OMB Control No. 3090-0162.



Sec. 514.201-2  Part I--The Schedule.

    (a) When using Standard Form 33, Solicitation, Offer and Award, 
include the following cautionary notice:
    ``Notice to Bidders--Use Item 13 of the Standard Form 33, 
Solicitation, Offer and Award, to offer prompt payment discounts. The 
Prompt Payment clause of this solicitation sets forth payment terms. Do 
not insert any statement in Item 13 that requires payment sooner than 
the time stipulated in the Prompt Payment clause (See FAR 52.232-25, 
52.232-26, or 52.232-27, as applicable). EXAMPLE: If you insert ``NET 
20'' in Item 13, GSA will reject your bid as nonresponsive because the 
entry contradicts the 30 day payment terms specified in the Prompt 
Payment clause.''
    (b) When using other authorized forms (e.g., Standard Form 1447, 
Solicitation/Contract; Standard Form 1449, Solicitation/Contract/Order 
for Commercial Items), include the notice in paragraph (a) of this 
section. Change the reference to the form number, form title, and item 
number accordingly.

[74 FR 47738, Sept. 17, 2009]



Sec. 514.201-6  Solicitation provisions.

    When considering all or none bids, insert the provision at 552.214-
70, ``All or None'' Bids, in the solicitation.

[74 FR 47739, Sept. 17, 2009]



Sec. 514.201-7  Contract clauses.

    Stock replenishment contracts. For some stock replenishment 
contracts, individual contractors may be unable to furnish the 
Government's monthly requirements. The contracting officer may determine 
that progressive awards will be more expedient. In such cases, insert a 
clause substantially the same as the clause at 552.214-71, Progressive 
Awards and Monthly Quantity Allocations, in the solicitation and 
contract.

[74 FR 47739, Sept. 17, 2009]

[[Page 227]]



Sec. 514.202  General rules for solicitation of bids.



Sec. 514.202-4  Bid samples.

    (a) Requirements for samples in invitations for bids. (1) When bid 
samples are required, the contracting officer shall require bidders to 
submit samples produced by the manufacturer whose products will be 
supplied under the contract.
    (2) The FAR limits use of bid samples to cases where the contracting 
officer cannot describe some characteristics of a product adequately in 
the specification or purchase description. This usually applies to 
subjective characteristics. The contracting officer may determine that 
there is a need to examine objective characteristics of bid samples to 
determine the responsiveness of a bid. The contracting officer should 
base the determination on past experience or other valid considerations. 
In the solicitation, separately list ``Subjective Characteristics'' and 
``Objective Characteristics''.
    (3) A provision appears at 552.214-72, Bid Sample Requirements. This 
provision may be modified to fit the circumstances of a procurement.
    (b) Handling bid samples. (1) Samples from accepted bids must be 
retained for the period of contract performance. If there are no 
outstanding claims regarding the contract, the contracting officer may 
authorize disposal of the samples at the end of the contract term 
following the bidder's instructions.
    (2) If the contracting officer anticipates a claim regarding the 
contract, the contracting officer shall require that the bid samples be 
retained until the claim is resolved.
    (3) The contracting officer shall require that samples from 
unsuccessful bids be retained until award. After award, these samples 
may be disposed of following the bidder's instructions.

[74 FR 47739, Sept. 17, 2009]



Sec. 514.202-5  Descriptive literature.

    Requirements for Invitations for bids. When using brand name or 
equal purchase descriptions, the provision at FAR 52.211-6 satisfies the 
requirement for descriptive literature.

[74 FR 47739, Sept. 17, 2009]



Sec. 514.203-1  Transmittal to prospective bidders.

    Prospective bidders, as used in FAR 14.203-1, include both the 
following:
    (a) The incumbent contractor, except when its written response to 
the notice of contract action under FAR subpart 5.2 states a negative 
interest.
    (b) Bidders that responded to recent solicitations for the same or 
similar items.



Sec. 514.270  Aggregate awards.



Sec. 514.270-1  Definition.

    Aggregate award means an arrangement whereby two or more separately-
priced line items are combined for award to that bidder whose bid will 
result in the lowest overall cost to the Government for the line items 
as a group. The individual price for each item does not have to be the 
lowest bid received. (See also the definition of a ``line item'' in FAR 
3.302.)



Sec. 514.270-2  Guidelines for use.

    (a) GSA usually solicits prices and reserves the right to make award 
for individual line items. In some cases it serves GSA's best interest 
to combine two or more line items for an aggregate award. Such cases 
include when:
    (1) Users desire uniformity of design, style, and finish (e.g., 
suites of household furniture).
    (2) The articles will be assembled and used as a unit, and different 
manufacturers' components may not be interchangeable.
    (3) Users have high demand for certain articles, but demand for 
related articles is insufficient to attract competitive bids (e.g., 
various sized of socket wrenches). Awarding the low-demand articles in 
conjunction with the high-demand articles may encourage competition.
    (4) Awarding the low-demand articles in conjunction with the high-
demand articles may encourage competition.
    (5) One location (delivery point) has a large requirement, and 
another location has a requirement too small to individually attract 
competitive bids.

[[Page 228]]

    (6) Awarding and administering numerous small contracts for similar 
articles or services is impractical.
    (b) Before deciding to combine items for aggregate award, the 
contracting officer should consider the following factors:
    (1) The capability of bidders to furnish the types and quantities of 
supplies or services in the aggregate.
    (2) How grouping delivery points will affect bidders.
    (3) Which combinations will accurately project the lowest overall 
cost to the Government.
    (c) The contracting officer should not use an aggregate award if it 
will significantly restrict the number of eligible bidders.

[64 FR 37211, July 9, 1999, as amended at 74 FR 47739, Sept. 17, 2009]



Sec. 514.270-3  Evaluation factors for award.

    The solicitation should clearly state the basis for evaluating bids 
for aggregate award, require bidders to submit a price on each item 
within the group or a percentage to be added or subtracted from a list 
price, and advise bidders that failure to submit prices as required 
within a group makes a bid ineligible for award for that group.

[74 FR 47739, Sept. 17, 2009]



Sec. 514.270-4  Grouping line items for aggregate award.

    (a) Supplies and services. This subsection applies to acquisitions 
of supplies and services.
    (b) Effect on compeition. Provide for full and open competition when 
grouping items for award. Grouping items for award may preclude a 
significant of firms from bidding. This occurs if firms are unable to 
provide all the types or quanities of supplies or services, or make 
deliveries to the various delivery points included in the prospective 
aggregate group.
    (c) Grouping different articles. Include only related articles in an 
aggregate group. Related articles are those normally manufactured or 
produced by a majority of prospective bidders. Grouping unrelated 
articles often restricts competition unnecessarily.
    (d) Grouping geographic locations or delivery points. Consider the 
following guidelines before deciding to group different geographic 
locations or delivery points:
    (1) A delivery point may have sufficient requirements so that 
individual shipments involve economic production runs and carload or 
truckload quanities. In this case, list it as a separate line item.
    (2) The types of bidders (i.e., small or large firms, manufacturers 
or distributors, etc.) who responded to previous solicitations can 
provide important information. For example, if previous bidders are 
distributors with franchises in certain territories, grouping different 
territories could tend to restrict competition.
    (3) Transportation costs can affect competition and pricing. They 
may constitute a significant portion of the total delivered cost. Obtain 
the advice and assistance of transportation specialists before grouping 
geographic locations or delivery points. Depending upon the supplies 
being acquired:
    (i) Grouping widespread geographic locations or delivery points may 
reduce competition or result in higher prices. It can cause the loss of 
``area pricing'' advantages provided by a supplier with a single 
production point.
    (ii) Conversely, for many small commercial items (hand tools, locks, 
etc.), manufacturers may quote the same price for delivery anywhere in 
the U.S.
    (iii) Tariff boundaries can also affect how manufacturers price 
deliveries to different areas.

[64 FR 37211, July 9, 1999, as amended at 74 FR 47739, Sept. 17, 2009]



Sec. 514.270-5  Evaluation methodologies for aggregate awards.

    (a) Definite quantity contracts without options. For definite 
quantity contracts without options, the evaluated bid price is the total 
bid price, as adjusted for any price-related factors identified in the 
solicitation. This reflects the actual cost to the Government and will 
identify the most advantageous bid.
    (b) Indefinite quantity contracts, requirements contracts, and 
options. Indefinite quantity and requirements contracts use estimated 
quantities. Options involve the probability of whether and when the 
options will be exercised. These situations may result in

[[Page 229]]

unbalanced bids (see FAR 15.404-1(g)), leading to inaccurate evaluation 
of the projected cost and award to other than the most advantageous bid. 
To avoid unbalanced bids, GSA has two preferred methods for evaluating 
bids for aggregate awards: weight factors and price list.
    (1) Weight factors method. Assign a weight to each item in a group. 
The weight is based on the portion of quantities that item represents. 
To evaluate bids, multiply each unit price by its weight factor, then 
total the results.
    (2) Price list method. Establish prices for bidders to use as a base 
for preparing their bids. Prepare a list that identifies a base price 
for each item in a group. Bidders bid a percentage factor to add to or 
subtract from the base price.



Sec. 514.270-6  Guidelines for using the weight factors method.

    (a) Use the weight factors method when there are reliable estimates 
for the quantities needed in an acquisition. Reliable estimates of 
quantities form the foundation for:
    (1) Accurate evaluation of the projected cost of each bid.
    (2) An appropriate determination of which bid is most advantageous 
to the Government for the aggregate group.
    (b) Assign a weight factor to each item in a group. Develop the 
weight factor by calculating the portion of the total quantity in a 
defined group that each item represents.
    (c) To evaluate bid prices, first multiply the price bid for each 
item (unit price X quantity) by its weight factor. Then, add the 
subtotals together to project the cost for the aggregate group.
    (d) Estimated quantities may be reduced to smaller numbers by a 
common denominator. This may help facilitate the computations involved 
in evaluating bids.
    (e) Consider all price-related factors identified in the 
solicitation. Award to the responsive and responsible bidder with the 
lowest evaluated overall cost to the Government for the aggregate group. 
This represents the most advantageous bid.

[64 FR 37211, July 9, 1999, as amended at 74 FR 47739, Sept. 17, 2009]



Sec. 514.270-7  Guidelines for using the price list method.

    (a) General. The price list method helps avoid unbalanced bidding 
when making aggregate awards, but lack accurate estimates of anticipated 
quantities. This method establishes base prices for bidders to use in 
preparing their bids.
    (b) Solicitation requirements. When using the price list method, in 
the solicitation:
    (1) Include the price list.
    (2) Include an estimate of requirements.
    (3) Require the bidder to express its price as ``net'' or as a 
percentage added to or subtracted from the list prices for each group. 
Require the bidder to quote only one percentage factor for each group. 
This means that the bidder provides one percentage factor that applies 
to every item in a group; not a separate percentage for each item. 
``Net'' indicates the bidder chooses to submit the list prices as its 
bid.
    (4) Identify the percentage factor in paragraph (b)(3) of this 
section as a price related evaluation factor.
    (c) Developing list prices. Price lists may be developed using one 
or more of the following sources:
    (1) Industry published prices.
    (2) Industry surveys.
    (3) Government cost estimates based on knowledge of the supplies or 
services and previous contract prices.
    (d) First time use for an item or service. The first time the 
contracting officer uses list prices for an item or service, give 
prospective bidders an opportunity to review the proposed list. Also 
provide information on how GSA will use the list prices. This 
information may be provided in a draft solicitation.
    (e) Balanced prices. Ensure that the list prices for the grouped 
items bear a reasonable and balanced relationship to one another. Prices 
may be used from previous awards made using the weight factors method to 
develop price lists. Review those prices first to ensure they did not 
result from unbalanced bidding.
    (f) Evaluation and award. Consider all price-related factors 
identified in the solicitation. Award to the responsive and responsible 
bidder whose percentage factor produces the most favorable

[[Page 230]]

price to the Government. This represents the most advantageous bid.
    (g) Example. The following illustrates a bidding schedule 
arrangement for a group of items for aggregate award under the price 
list method:

 Drills, Twist, High Speed, Under Federal Specification (No. and Date), and Amendment (No. and Date), Amendment
                      (No. and Date) Wire Gauge Sizes, Straight Shank, Short Length, Type C
----------------------------------------------------------------------------------------------------------------
     Item No.        National Stock No.       Drill size       Est. quantity         Unit           List price
----------------------------------------------------------------------------------------------------------------
                                           Group 1 (Items 1 through 5)
----------------------------------------------------------------------------------------------------------------
1.................      5133-00-189-9246  1.................           2,800  Pkg...............          $11.16
2.................      5133-00-189-9247  2.................           2,400  Pkg...............           11.16
3.................      5133-00-189-9248  3.................           2,800  Pkg...............           10.44
4.................      5133-00-189-9249  4.................           1,600  Pkg...............           10.80
5.................      5133-00-189-9250  5.................           2,000  Pkg...............           10.80
----------------------------------------------------------------------------------------------------------------

    The bid on each item above is the list price shown minus/plus ---- 
percent. (Bidder, insert ``net'' or a single percentage amount in the 
blank space and cross out minus or plus, as appropriate.)
    (h) Special considerations for contracts for store stock items. Show 
estimated quantities only if estimates of demand for each item within a 
group can be derived from Government records or verified contractor 
sales reports. Use only current estimates. If the Government's needs 
cannot be estimated, the solicitation may include past orders. (See CG 
Decision, B-209037, 82-2 CPD para 323 (1982).)
    (i) Special considerations for repair and alteration contracts. In 
the solicitation:
    (1) List the estimated quantities for work to be performed during 
both normal working hours and outside of normal working hours.
    (2) State the percent of work anticipated to be performed during 
normal working hours.
    (3) List the unit prices for work to be performed during both normal 
working hours and outside of normal working hours.
    (4) Define ``normal'' in terms of hours and days of the week.
    (5) Advise bidders of the previous year's total expenditures or 
portions of that total attributable to the listed items.
    (6) If providing quantity estimates, state that the estimates are 
for information only and do not constitute guarantees or commitments to 
order items under the contract.
    (7) Solicit two percentage factors for the line item unit prices 
listed: one for the unit prices for work performed during normal working 
hours and the second for the unit prices for work performed outside of 
normal working hours.
    (8) When the solicitation further groups unit prices by trade or 
business category, multiple percentages may be required.
    (9) For the evaluated bid price, add together the following 
percentages:
    (i) The percentage of work performed during normal work hours 
multiplied by the total estimate adjusted by the bidder's percentage 
factor for that portion of the work, plus
    (ii) The percentage of work performed during other than normal 
working hours multiplied by the total estimate adjusted by the bidder's 
percentage factor for that portion of the work.
    (10) Consider other price-related factors identified in the 
solicitation. Make award to the responsible and responsive bidder 
submitting the lowest overall evaluated bid price for the aggregate 
group. This represents the most advantageous bid.

[64 FR 37211, July 9, 1999, as amended at 74 FR 47739, Sept. 17, 2009]

[[Page 231]]

           Subpart 514.4_Opening of Bids and Award of Contract



Sec. 514.407  Mistakes in bids.



Sec. 514.407-3  Other mistakes disclosed before award.

    Delegation of authority by head of the agency. Under FAR 14.407-
3(e), contracting directors (see 502.101) are authorized, without power 
of redelegation, to make:
    (a) The determinations regarding corrections and withdrawals under 
FAR 14.407-3(a), (b), and (c); and
    (b) The corollary determinations not to permit withdrawal or 
correction under FAR 14.407-3(d).

[74 FR 47740, Sept. 17, 2009]



Sec. 514.407-4  Mistakes after award.

    The contracting director and assigned counsel are required to review 
and approve the contracting officer's determinations under FAR 14.407-
4(b) and (c).

[74 FR 47740, Sept. 17, 2009]

                   PART 515_CONTRACTING BY NEGOTIATION

   Subpart 515.2_Solicitation and Receipt of Proposals and Information

Sec.

Sec. 515.204 Contract format.

Sec. 515.204-1 Uniform contract format.

Sec. 515.205 Issuing solicitations.

Sec. 515.209 Solicitation provisions and contract clauses.

Sec. 515.209-70 Examination of records by GSA clause.

                     Subpart 515.3_Source Selection


Sec. 515.305 Proposal evaluation.

Sec. 515.305-70 Use of outside evaluators.

                     Subpart 515.4_Contract Pricing


Sec. 515.408 Solicitation provisions and contract clauses.

 Subpart 515.5_Preaward, Award, and Postaward Notifications, Protests, 
                              and Mistakes


Sec. 515.506 Postaward debriefing of offerors.

                      Subpart 515.70_Use of Samples


Sec. 515.7002 Procedures.

    Authority: 40 U.S.C. 486(c).

    Source: 64 FR 37214, July 9, 1999, unless otherwise noted.

   Subpart 515.2_Solicitation and Receipt of Proposals and Information



Sec. 515.204  Contract format.



Sec. 515.204-1  Uniform contract format.

    (a) The uniform contract format is not required for leases of real 
property.
    (b) Each solicitation and contract must include the two notices in 
paragraphs (b)(1) and (b)(2) of this section, except that acquisitions 
of interests in real property, must include only the notice in (b)(1):
    (1) ``The information collection requirements contained in this 
solicitation/contract are either required by regulation or approved by 
the Office of Management and Budget pursuant to the Paperwork Reduction 
Act and assigned OMB Control No. 3090-0163.''
    (2) ``GSA's hours of operation are 8:00 a.m. to 4:30 p.m. Requests 
for preaward debriefings postmarked or otherwise submitted after 4:30 
p.m. will be considered submitted the following business day. Requests 
for postaward debriefings delivered after 4:30 p.m. will be considered 
received and filed the following business day.''



Sec. 515.205  Issuing solicitations.

    Potential sources, as used in FAR 15.205, include both of the 
following:
    (a) The incumbent contractor, except when its written response to 
the notice of contract action under FAR subpart 5.2 states a negative 
interest.
    (b) Offerors that responded to recent solicitations for the same or 
similar items.



Sec. 515.209  Solicitation provisions and contract clauses.



Sec. 515.209-70  Examination of records by GSA clause.

             Clause for Other Than Multiple Award Schedules

    (a) For other than multiple award schedule (MAS) contracts, insert 
the clause at 552.215-70, Examination of Records by GSA, in 
solicitations and

[[Page 232]]

contracts over $100,000, including acquisitions of leasehold interests 
in real property, that meet any of the following conditions:
    (1) Involve the use or disposition of Government-furnished property.
    (2) Provide for advance payments, progress payments based on cost, 
or guaranteed loan.
    (3) Contain a price warranty or price reduction clause.
    (4) Involve income to the Government where income is based on 
operations under the control of the contractor.
    (5) Include an economic price adjustment clause where the adjustment 
is not based solely on an established, third party index.
    (6) Are requirements, indefinite-quantity, or letter type contracts 
as defined in FAR part 6.
    (7) Are subject to adjustment based on a negotiated cost escalation 
base.
    (8) Contain the provision of FAR 52.223-4, Recovered Material 
Certification.
    (b) You may modify the clause at 552.215-70 to define the specific 
area of audit (e.g., the use or disposition of Government-furnished 
property, compliance with the price reduction clause). Counsel and the 
Assistant Inspector General--Auditing or Regional Inspector General--
Auditing, as appropriate, must concur in any modifications to the 
clause.

                   Clause for Multiple Award Schedules

    (c) Insert the clause at 552.215-71, Examination of Records by GSA 
(Multiple Award Schedule), in solicitations and contracts for MAS 
contracts.
    (d) With the Senior Procurement's Executive approval, you may modify 
the clause at 552.215-71 to provide for post-award access to and the 
right to examine records to verify that the pre-award/modification 
pricing, sales or other data related to the supplies or services offered 
under the contract which formed the basis for the award/modification was 
accurate, current, and complete. The following procedures apply:
    (1) Such a modification of the clause must provide for the right of 
access to expire 2 years after award or modification.
    (2) Before modifying the clause, you must make a determination that 
absent such access there is a likelihood of significant harm to the 
Government and submit it to the Senior Procurement Executive for 
approval.
    (3) The determinations under paragraph (d)(2) of this section must 
be made on a schedule-by-schedule basis.

                     Subpart 515.3_Source Selection



Sec. 515.305  Proposal evaluation.

    (a) Restrictions placed on a proposal by the submitter. If you 
receive a proposal with more restrictive conditions than those in the 
provision at FAR 52.215-1(e), ask whether the submitter is willing to 
accept the conditions of the paragraph at FAR 52.215-1(e). If the 
submitter refuses, consult with legal counsel on whether to accept the 
proposal as marked or return it.
    (b) Actions before releasing proposal. Before releasing any proposal 
to an evaluator you must take all the following actions:
    (1) Obtain the signed original ``Conflict of Interest Acknowledgment 
and Nondisclosure Agreement'' from each Government and nongovernment 
individual serving as an evaluator. Use the Acknowledgment/Agreement in 
Figure 515.3-1.
    (i) For employees of other Executive agencies, replace the reference 
in paragraph (c) of the Acknowledgement/Agreement to GSA's supplemental 
standards with a reference to the applicable agency.
    (ii) for nongovernment evaluators, substitute paragraph (c) of the 
Acknowledgement/Agreement with the following language and delete 
paragraph (h):

    (c) I have read and understand the requirements of subsection 27(a) 
and 27(b) of the Office of Federal Procurement Policy Act (41 U.S.C. 
423).

    (2) Attach to each proposal a cover page bearing the following 
notice:

                Government Notice for Handling Proposals

    To anyone receiving this proposal or proposal abstract:
    (1) This proposal must be used and disclosed for evaluation purposes 
only.

[[Page 233]]

    (2) You must apply a copy of this Government notice to any 
reproduction or abstract of this proposal.
    (3) You must comply strictly with any authorized restrictive notices 
which the submitter places on this proposal.
    (4) You must not disclose this proposal outside the Government for 
evaluation purposes except to the extent authorized by, and in 
accordance with, the procedures in 48 CFR 515.305-71.



Sec. 515.305-70  Use of outside evaluators.

    (a) Conditions. To use outside evaluators, you must meet the 
restrictions in FAR 37.203 and 537.2.
    (b) Limitations on disclosing proposal information. You may disclose 
proposal information outside the Government before the Government's 
decision as to contract award only to the extent authorized in this 
section. Disclosure and handling must comply with FAR 3.1 and 503.1.
    (c) Solicitation notice. Include in the solicitation a notice 
substantially as follows:

                    Notice About Releasing Proposals

    (1) The Government intends to disclose proposals received in 
response to this solicitation to nongovernment evaluators.
    (2) Each evaluator will sign and provide to GSA a ``Conflict of 
Interest Acknowledgment and Nondisclosure Agreement.''

 Figure 515.3-1--Conflict of Interest Acknowledgment and Nondisclosure 
                                Agreement

     Conflict of Interest Acknowledgment and Nondisclosure Agreement

    For proposals submitted in response to GAS solicitation no. --------
, I agree to the following:
    (a) To the best of my knowledge and belief, no conflict of interest 
exists that may either:
    (1) Diminish my capacity to impartially review the proposals 
submitted.
    (2) Or result in a biased opinion or unfair advantage.
    (b) In making the above statement, I have considered all the 
following factors that might place me in a position of conflict, real or 
apparent, with the evaluation proceedings:
    (1) All my stocks, bonds, other outstanding financial interests or 
commitments.
    (2) All my employment arrangements (past, present, and under 
consideration).
    (3) As far as I know, all financial interests and employment 
arrangements of my spouse, minor children, and other members of my 
immediate household.
    (c) I have read and understand the requirements of the Standards of 
Ethical Conduct for Employees of the Executive Branch (5 CFR Part 2635) 
and Supplemental Standards of Ethical Conduct for Employees of the 
General Service Administration (5 CFR Part 6701).
    (d) I have a continuing obligation to disclose any circumstances 
that may create an actual or apparent conflict of interest. If I learn 
of any such conflict, I will report it immediately to the Contracting 
Officer. I will perform no more duties related to evaluating proposals 
until I receive instructions on the matter.
    (e) I will use proposal information for evaluation purposes only. I 
understand that any authorized restriction on disclosure placed on the 
proposal by the prospective contractor, prospective subcontractor, or 
the Government applies to any reproduction or abstracted information of 
the proposal.
    (f) I will use my best efforts to safeguard proposal information 
physically. I will not disclose the contents of, nor release any 
information about, the proposals to anyone other than:
    (1) The Source Selection Evaluation Board or other panel assembled 
to evaluate proposals submitted in response to the solicitation 
identified above.
    (2) Other individuals designed by the contracting Officer.
    (g) After completing evaluation, I will return to the Government all 
copies of the proposals and any abstracts.
    (h) GSA Appropriations Act restriction: These restrictions are 
consistent with and do not supersede, conflict with or otherwise alter 
the employee obligations, rights, or liabilities created by Executive 
Order No. 12958; section 7211 of title 5, United States Code (governing 
disclosure of Congress); section 1034 of title 10, United States Code, 
as amended by the Military Whistleblower Protection Act (governing 
disclosure to Congress by members of the military); section 2302(b)(8) 
of title 5, United States Codes, as amended by the Whistleblower 
Protection Act (governing disclosures of illegality, waste, fraud, abuse 
or public health or safety threats); the Intelligence Identities 
Protection Act of 1982 (50 U.S.C. 421 et seq.) (governing disclosures 
that could expose confidential Government agents); and the statutes 
which protect against disclosure that may compromise the national 
security, including sections 641, 793, 794, 798, and 952 of title 18, 
United States Code, and section 4(b) of the Subversive Activities Act of 
1950 (50 U.S.C. 783(b). The definitions, requirements, obligations, 
rights, sanctions, and liabilities created by said Executive order and 
listed statutes are incorporated into this agreement and are 
controlling.

[[Page 234]]

________________________________________________________________________
(Enter name of evaluator and organization)
________________________________________________________________________
Date

                     Subpart 515.4_Contract Pricing



Sec. 515.408  Solicitation provisions and contract clauses.

      MAS Requests for Information Other Than Cost or Pricing Data

    (a) You should use Alternative IV of the FAR provision at 52.215-20, 
Requirements for Cost or Pricing Data or Information Other than Cost or 
Pricing Data, for MAS contracts to provide the format for submission of 
information other than cost or pricing data for MAS contracts. To 
provide uniformity in request under the MAS program, you should insert 
the following in paragraph (b) of the provision:
    (1) An offer prepared and submitted in accordance with the clause at 
552.212-70, Preparation of Offer (Multuiple Award Schedule).
    (2) Commercial sales practices. The Offeror shall submit information 
in the format provided in this solicitation in accordance with the 
instructions at Figure 515.4 of the GSA Acquisition Regulation (48 CFR 
515-2), or submit information in the Offeror's own format.
    (3) Any additional supporting information requested by the 
Contracting Officer. The Contracting Officer may require additional 
supporting information, but only to the extent necessary to determine 
whether the price(s) offered is fair and reasonable.
    (4) By submission of an offer in response to this solicitation, the 
Offeror grants the Contracting Officer or an authorized representative 
the right to examine, at any time before initial award, books, records, 
documents, papers, and other directly pertinent records to verify the 
pricing, sales and other data related to the supplies or services 
proposed in order to determine the reasonableness of price(s). Access 
does not extend to Offeror's cost or profit information of other data 
relevant solely to the Offeror's determination of the prices to be 
offered in the catalog or marketplace.
    (b) Insert the following format for commercial sales practices in 
the exhibits or attachments section of the solicitation and resulting 
contract (see FAR 12.303).

                    Commercial Sales Practices Format

Name of Offeror ---------- SIN(s) ------

    Note: Please refer to Clause 552.212-70, Preparation of Offer 
(Multiple Award Schedule), for additional information concerning your 
offer. Provide the following information for each SIN (or group of SINs 
or SubSIN for which information is the same).

    (1) Provide the dollar value of sales to the general public at or 
based on an established catalog or market price during the previous 12-
month period or the offerors last fiscal year: $--------. State 
beginning and ending of the 12 month period. Beginning -------- ending 
--------. In the event that a dollar value is not an appropriate measure 
of the sales, provide and describe your own measure of the sales of the 
item(s).
    (2) Show your total projected annual sales to the Government under 
this contract for the contract term, excluding options, for each SIN 
offered. If you currently hold a Federal Supply Schedule contract for 
the SIN the total projected annual sales should be based on your 
mostrecent 12 months of sales under that contract.

SIN ------------ $------------
SIN ------------ $------------
SIN ------------ $------------

    (3) Based on your written discounting policies (standard commercial 
sales practices in the event you do not have written discounting 
policies), are the discounts and any concessions which you offer the 
Government equal to or better than your best price (discount and 
concessions in any combination) offered to any customer acquiring the 
same items regardless of quantity or terms and conditions? YES---- NO--
-- (See definition of ``concession'' and ``discount'' in 552.212-70.)
    (4)(a) Based on your written discounting policies (standard 
commercial sales practices in the event you do not have written 
discounting policies), provide information as requested for each SIN (or 
group of SINs for which the information is the same) in accordance with 
the instructions at Figure 515.4, which is provided in this solicitation 
for your convenience. The information should be provided in the chart 
below or in an equivalent format developed by the offeror. Rows should 
be added to accommodate as many customers as required.

----------------------------------------------------------------------------------------------------------------
                                                      Column 3  Quantity/                          Column 5
       Column 1  Customer         Column 2  Discount        Volume        Column 4  FOB Term      Concessions
----------------------------------------------------------------------------------------------------------------
 
 
 
----------------------------------------------------------------------------------------------------------------


[[Page 235]]

    (b) Do any deviations from your written policies or standard 
commercial sales practices disclosed in the above chart ever result in 
better discounts (lower prices) or concessions than indicated? YES-- 
NO--. If YES, explain deviations in accordance with the instructions at 
Figure 515.4, which is provided in this solicitation for your 
convenience.
    (5) If you are a dealer/reseller without significant sales to the 
general public, you should provide manufacturers' information required 
by paragraphs (1) through (4) above for each item/SINoffered, if the 
manufacturer's sales under any resulting contract are expected to exceed 
$500,000. You must also obtain written authorization from the 
manufacturer(s) for Government access, at any time before award or 
before agreeing to a modification, to the manufacturer's sales records 
for the purpose of verifying the information submitted by the 
manufacturer. The information is required in order to enable the 
Government to make a determination that the offered price is fair and 
reasonable. To expedite the review and processing of offers, you should 
advise the manufacturer(s) of this requirement. The contracting officer 
may require the information be submitted on electronic media with 
commercially available spreadsheet(s). The information may be provided 
by the manufacturer directly to the Government. If the manufacturer's 
item(s) is being offered by multiple dealers/resellers, only one copy of 
the requested information should be submitted to the Government. In 
addition, you must submit the following information along with a listing 
of contact information regarding each of the manufacturers whose 
products and/or services are included in the offer (include the 
manufacturer's name, address, the manufacturer's contact point, 
telephone number, and FAX number) for each model offered by SIN:
    (a) Manufacturer's Name.
    (b) Manufacturer's Part Number.
    (c) Dealer's/Reseller's Part Number.
    (d) Product Description.
    (e) Manufacturer's List Price.
    (f) Dealer's/Reseller's percentage discount from list price or net 
prices.

                             (End of format)

    (c) Include the instructions for completing the commercial sales 
practices format in Figure 515.4 in solicitations issued under the MAS 
program.

    Figure 515.4--Instructions for Commercial Sales Practices Format

    If you responded ``yes'' to question (3), on the Commercial Sales 
Practices Format in paragraph (b) of this section, complete the chart in 
question (4)(a) for the customer(s) who receive your best discount. If 
you responded ``no'', complete the chart in question (4)(a) showing your 
written policies or standard sales practices for all customers or 
customer categories to whom you sell at a price (discounts and 
concessions in combination) that is equal to or better than the price(s) 
offered to the Government under this solicitation or with which the 
Offeror has a current agreement to sell at a discount which equals or 
exceeds the discount(s) offered under this solicitation. Such agreement 
shall be in effect on the date the offer is submitted or contain an 
effective date during the proposed multiple award schedule contract 
period. If your offer is lower than your price to other customers or 
customers categories, you will be aligned with the customer or category 
of customer that receives your best price for purposes of the Price 
Reductions clause at 552.238-75. The Government expects you to provide 
information required by the format in accordance with these instructions 
that is, to the best of your knowledge and belief, current, accurate, 
and complete as of 14 calender days prior to its submission. You must 
also disclose any changes in your price list(s), discounts and/or 
discounting policies which occur after the offer is submitted, but 
before the close of negotiations. If your discount practices vary by 
model or product line, the discount information should be by model or 
product line as appropriate. You may limit the number of models or 
product lines reported to those which exceed 75% of actual historical 
Government sales (commercial sales may be substituted if Government 
sales are unavailable) value of the special item number (SIN).

   Column 1--Identify the Applicable Customer or Category of Customer

    A ``customer'' is any entity, except the Federal Government, which 
acquires supplies or services from the Offeror. The term customer 
includes, but is not limited to original equipment manufacturers, value 
added resellers, state and local Governments, distributors, educational 
institutions (an elementary, junior high, or degree granting school 
which maintains a regular faculty and established curriculum and an 
organized body of students), dealers, national accounts, and end users. 
In any instance where the Offeror is asked to disclose information for a 
customer, the Offeror may disclose information by category of customer 
if the Offeror's discount policies or practices are the same for all 
customers in the category. (Use a separate line for each customer or 
category of customer.)

                     Column 2--Identify the Discount

    The term ``discount'' is as defined in solicitation clause 552.212-
70, Preparation of Offer (Multiple Award Schedule). Indicate the best 
discount (based on your written discounting policies or standard 
commercial discounting

[[Page 236]]

practices if you do not have written discounting policies) at which you 
sell to the customer or category of customer identified in column 1, 
without regard to quantity; terms and conditions of the agreements under 
which the discounts are given; and whether the agreements are written or 
oral. Net prices or discounts off of other price lists should be 
expressed as percentage discounts from the price list which is the basis 
of your offer. If the discount disclosed is a combination of various 
discounts (prompt payment, quantity, etc.), the percentage should be 
broken out for each type of discount. If the price lists which are the 
basis of the discounts given to the customers identified in the chart 
are different than the price list submitted upon which your offer is 
based, identify the type or title and date of each price list. The 
contracting officer may require submission of these price lists. To 
expedite evaluation, offerors may provide these price lists at the time 
of submission.

           Column 3--Identify the Quantity or Volume of Sales

    Insert the minimum quantity or sales volume which the identified 
customer or category of customer must either purchase/order, per order 
or within a specified period, to earn a discount indicate the time 
period.

  Column 4--Indicate the FOB Delivery Term for Each Identified Customer

    See FAR 47.3 for an explanation of FOB delivery terms.

  Column 5--Indicate Concessions Regardless of Quantity Granted to the 
               Identified Customer or Category of Customer

    Concessions are defined in solicitation clause 552.12-70, 
Preparation of Offers (Multiple Award Schedule). If the space provided 
is inadequate, the disclosure should be made on a separate sheet by 
reference.
    If you respond ``yes'' to question 4(b) in the Commercial Sales 
Practices Format, provide an explanation of the circumstances under 
which you deviate from your written policies or standard commercial 
sales practices disclosed in the chart on the Commercial Sales Practices 
Format and explain how often they occur. Your explanation should include 
a discussion of situations that lead to deviations from standard 
practice, an explanation of how often they occur, and the controls you 
employ to assure the integrity of your pricing. Examples of typical 
deviations may include, but are not limited to, one time goodwill 
discounts to charity organizations or to compensate an otherwise 
disgruntled customer; a limited sale of obsolete or damaged goods; the 
sale of sample goods to a new customer, or the sales of prototype goods 
for testing purposes.
    If deviations from your written policies or standard commercial 
sales practices disclosed in the chart on the Commercial Sales Practices 
Format are so significant and/or frequent that the Contracting Officer 
cannot establish whether the price(s) offered is fair and reasonable, 
then you may be asked to provide additional information. The Contracting 
Officer may ask for information to demonstrate that you have made 
substantial sales of the item(s) in the commercial market consistent 
with the information reflected on the chart on the Commercial Sales 
Practices Format, a description of the conditions surrounding those 
sales deviations, or other information that may be necessary in order 
for the Contracting Officer to determine whether your offered price(s) 
is fair and reasonable. In cases where additional information is 
requested the Contracting Officer will target the request in order to 
limit the submission of data to that needed to establish the 
reasonableness of the offered price.

                             (End of figure)

    (d) Insert the clause at 552.215-72, Price Adjustment--Failure to 
Provide Accurate Information, in solicitations and contracts under the 
MAS program.
    (e) You should use Alternate IV of FAR 52.215-21, Requirements for 
Cost or Pricing Data or Information Other Than Cost or Pricing Data--
Modifications, to provide for submission of information other than cost 
or pricing data for MAS contracts. To provide for uniformity in requests 
under the MAS program, you should insert the following in paragraph (b) 
of the clause:
    (1) Information required by the clause at 552.243-72, Modifications 
(Multiple Award Schedule).
    (2) Any additional supporting information requested by the 
Contracting Officer. The Contracting Officer may require additional 
supporting information, but only to the extent necessary to determine 
whether the price(s) offered is fair and reasonable.
    (3) By submitting a request for modification, the Contractor grants 
the Contracting Officer or an authorized representative the right to 
examine, at any time before agreeing to a modification, books, record, 
documents, papers, and other directly pertinent records to verify the 
pricing, sales and other data related to the supplies or services 
proposed in order to determine the reasonableness of price(s). Access 
does not extent to Contractor's cost or profit information or other data 
related solely to the Contractor's determination of the prices to be 
offered in the catalog or marketplace.

[64 FR 37214, July 9, 1999, as amended at 65 FR 11247, Mar. 2, 2000]

[[Page 237]]

 Subpart 515.5_Preaward, Award, and Postaward Notifications, Protests, 
                              and Mistakes



Sec. 515.506  Postaward debriefing of offerors.

    For purposes of determining the date of receipt of a request for a 
post award debriefing, GSA's hours of operation are 8:00 a.m. to 4:30 
p.m. Request received after 4:30 p.m. will be considered received the 
following business day.

                      Subpart 515.70_Use of Samples



Sec. 515.7002  Procedures.

    (a) Unsolicited samples. The reference to FAR 14.404-2(d) in FAR 
14.202-4(g) does not apply.

    However, qualifications in the proposal that are at variance with 
the Government's requirements, constitute deficiencies. Resolve these as 
provided in FAR 15.306.

    (b) Solicitation requirements. (1) Use the clause at FR 52.214-20. 
The second sentence in paragraph (c) of the clause does not apply. 
Substitute a sentence substantially as follows:

    Failure of the bid samples to conform to all the required 
characteristics listed in the solicitation constitutes a deficiency in 
the proposal (see FAR 15.306).

    (2) In addition to listing subjective characteristics that you 
cannot adequately describe in the specification, you may list and 
evaluate objective characteristics. To include objective 
characteristics, you must determine that examination of such 
characteristics is essential to the acquisition of any acceptable 
product. Base your determination on past experience or other valid 
considerations.
    (c) FAR 52.215-1(c)(3) applies to samples received after the time 
set for receipt of offers.

                       PART 516_TYPES OF CONTRACTS

                   Subpart 516.2_Fixed Price Contracts

Sec.

Sec. 516.203-4 Contract clauses.

               Subpart 516.5_Indefinite-Delivery Contracts


Sec. 516.506 Solicitation provisions and contract clauses.

    Authority: 40 U.S.C. 121(c).

    Source: 64 FR 37218, July 9, 1999, unless otherwise noted.

                   Subpart 516.2_Fixed Price Contracts



Sec. 516.203-4  Contract clauses.

    (a) Special Order Program Contracts. In multiyear solicitations and 
contracts, after making the determination required by FAR 16.203-3, use 
552.216-71, Economic Price Adjustment Special Order Program Contracts, 
or a clause prepared as authorized in paragraph (a)(3) of this 
subsection.
    (1) If the contract includes one or more options to extend the term 
of the contract, use the clause with its Alternate I or a clause 
substantially the same as 552.216-71 with its Alternate I suitably 
modified.
    (2) In a contract requiring a minimum adjustment before the price 
adjustment mechanism is effectuated, use the basic clause with Alternate 
II or with Alternate I and Alternate II.
    (3) If the Producer Price Index is not an appropriate indicator for 
price adjustment, modify the clause to use an alternate indicator for 
adjusting prices. Similarly, if other aspects of 552.216-71 are not 
appropriate, use an alternate clause following established procedures.
    (b) Adjustments based on cost indexes of labor or material. (1) If 
the contracting officer decides to provide for adjustments based on cost 
indexes of labor or material, prepare a clause that defines each of the 
following elements:
    (i) The type of labor and/or material subject to adjustment;
    (ii) The labor rates, including any fringe benefits and/or unit 
prices of materials that may be increased or decreased;
    (iii) The index(es) that will be used to measure changes in price 
levels and the base period or reference point from which changes will be 
measured; and
    (iv) The period during which the price(s) will be subject to 
adjustment.

[[Page 238]]

    (2) The contracting director must approve use of this clause.

[75 FR 41095, July 15, 2010]

               Subpart 516.5_Indefinite-Delivery Contracts



Sec. 516.506  Solicitation provisions and contract clauses.

    (a) In solicitations and contracts for Special Order Program items, 
when the contract authorizes FAS and other activities to issue delivery 
or task orders, insert the clause at 552.216-72, Placement of Orders. If 
only FAS will issue delivery or task orders, insert the clause with its 
Alternate I.
    (b) In solicitations and contracts for GSA awarded ID/IQ contracts, 
insert clause 552.216-74, Task-Order and Delivery-Order Ombudsman.
    (c) If the clause at 552.216-72 is prescribed, insert the provision 
at 552.216-73, Ordering Information, in solicitations for Special Order 
Program items and in other FAS Program solicitations.

[75 FR 41096, July 15, 2010]

                  PART 517_SPECIAL CONTRACTING METHODS

                   Subpart 517.1_Multiyear Contracting

Sec.

Sec. 517.109 Contract clauses.

                          Subpart 517.2_Options


Sec. 17.200 Scope of subpart.

Sec. 17.202 Use of options.

Sec. 17.203 Solicitations.

Sec. 17.207 Exercise of options.

Sec. 17.208 Solicitation provisions and contract clauses.

    Authority: 40 U.S.C. 486(c).

    Source: 64 FR 37218, July 9, 1999, unless otherwise noted.

                   Subpart 517.1_Multiyear Contracting



Sec. 517.109  Contract clauses.

    Use of FAR 52.217-2, Cancellation Under Multi-year Contracts, is 
optional in multiyear contracts authorized by 40 U.S.C. 490(a)(14) for 
maintenance and repair of fixed equipment in federally-owned buildings 
and services and 40 U.S.C. 481(a)(3) for public utility services.

                          Subpart 517.2_Options



Sec. 517.200  Scope of subpart.

    (a) This subpart applies to all GSA contracts for supplies and 
services, including:
    (1) Services involving construction, alteration, or repair 
(including dredging, excavating, and painting) of buildings, bridges, 
roads, or other kinds of real property.
    (2) Architect-engineer services.
    (b) If a requirement in this subpart is inconsistent with FAR 17.2, 
this subpart takes precedence.



Sec. 517.202  Use of options.

    (a) Supplies or services. (1) You should use options when they meet 
one or more of the following objectives:
    (i) Reduce procurement lead time and associated costs.
    (ii) Ensure continuity of contract support.
    (iii) Improve overall contractor performance.
    (iv) Facilitate longer term contractual relationships with those 
contractors that continually meet or exceed quality performance 
expectations.
    (2) An option is normally in the Government's interest in the 
following circumstances:
    (i) You anticipate a need for additional supplies or services during 
the contract term.
    (ii) Multiyear contracting authority is not available or its use is 
inappropriate and you anticipate a need for additional supplies or 
services beyond the initial contract term.
    (iii) There is a need for continuity of supply or service support.
    (iv) Funds are not available for the entirety of the Government's 
needs, but are likely to become available during the contract term.
    (v) The initial contract will be used to evaluate the performance of 
an emerging small business.
    (3) Do not use an option if the market price is likely to change 
substantially and an economic price adjustment clause inadequately 
protects the Government's interest.

[[Page 239]]

    (b) Construction. For limitations on the use of options, see 536.213 
and 536.270.



Sec. 517.203  Solicitations.

    A solicitation that includes an option to extend should inform 
offerors that the contract could result in a long term contractual 
relationship subject to both of the following conditions:
    (a) Continuing need by GSA.
    (b) Level of contract performance that at least meets GSA's quality 
performance expectations.



Sec. 517.207  Exercise of options.

    Before exercising an option, you must:
    (a) Synopsize it unless you meet of the following conditions:
    (1) The option was evaluated as part of the original competition.
    (2) The contract action meets an exception in FAR 5.202.
    (b) Conclude that the contractor's performance under the contract 
met or exceeded the Government's expectation for quality performance, 
unless another circumstance justifies an extended contractual 
relationship.
    (c) Determine that the option price is fair and reasonable.



Sec. 517.208  Solicitation provisions and contract clauses.

    (a) For solicitations under FSS's Stock or Special Order Program, 
insert a provision substantially the same as the provision at 552.217-
70, Evaluation of Options, if both of the following conditions apply:
    (1) The solicitation contains an option to extend the term of the 
contract.
    (2) The contract will be fixed price and contain an economic price 
adjustment clause.
    (b) Insert the provision at 552.217-71, Notice Regarding Option(s), 
or a similar provision, in solicitations that include an option for 
increased quantities of supplies or services or an option to extend.

[[Page 240]]

                   SUBCHAPTER D_SOCIOECONOMIC PROGRAMS

                    PART 519_SMALL BUSINESS PROGRAMS

               Subpart 519.5_Set-Asides for Small Business

Sec.

Sec. 519.508 Soliciation provisions for contract clauses.

         Subpart 519.7_The Small Business Subcontracting Program


Sec. 519.708 Contract clauses.

Sec. 519.708-70 Solicitation provisions.

 Subpart 519.8_Contracting With the Small Business Administration (The 
                              8(a) Program)


Sec. 519.870 Direct 8(a) contracting.

Sec. 519.870-8 Contract clauses.

    Subpart 519.12_Small Disadvantaged Business Participation Program


Sec. 519.1202 Evaluation factor or subfactor.

Sec. 519.1202-2 Applicability.

         Subpart 519.70_GSA Mentor-Prot[eacute]g[eacute] Program


Sec. 519.7001 Scope of subpart.

Sec. 519.7002 Definitions.

Sec. 519.7003 General policy.

Sec. 519.7004 Incentives for prime contractors.

Sec. 519.7005 Measurement of program success.

Sec. 519.7006 Mentor firms.

Sec. 519.7007 Prot[eacute]g[eacute] firms.

Sec. 519.7008 Selection of prot[eacute]g[eacute] firms.

Sec. 519.7009 Application process.

Sec. 519.7010 Agreement contents.

Sec. 519.7011 Application review.

Sec. 519.7012 Developmental assistance.

Sec. 519.7013 Obligation.

Sec. 519.7014 Internal controls.

Sec. 519.7015 Reports.

Sec. 519.7016 Program review.

Sec. 519.7017 Contract clauses.

    Authority: 40 U.S.C. 486(c).

    Source: 64 FR 37219, July 9, 1999, unless otherwise noted.

               Subpart 519.5_Set-Asides for Small Business



Sec. 519.508  Solicitation provisions for contract clauses.

    Insert 552.219-70, Allocation of Orders--Partially Set-Asides Items, 
in solicitations and requirements type supply contracts that are 
partially set aside for small business.

         Subpart 519.7_The Small Business Subcontracting Program



Sec. 519.708  Contract clauses.



Sec. 519.708-70  Solicitation provisions.

    Insert the following provisions as directed:
    (a) 552.219-71, Notice to Offerors of Subcontracting Plan 
Requirements, on the cover page of solicitations containing the clause 
at FAR 52.219-9, Small Business Subcontracting Plan.
    (b) 552.219-72, Preparation, Submission, and Negotiations of 
Subcontracting Plans, in solicitations requiring submission of the 
subcontracting plan with initial offers.
    (c) 552.219-73, Goals for Subcontracting Plan as follows:
    (1) Use the basic provision in sealed bid solicitations containing 
FAR 52.219-9 if you are able to establish realistic target goals.
    (2) Use Alternate I in:
    (i) sealed bid solicitations if you cannot establish target goals.
    (ii) Negotiated solicitations that include FAR 52.219-9, but do not 
include 552.219-72.

 Subpart 519.8_Contracting With the Small Business Administration (The 
                              8(a) Program)



Sec. 519.870  Direct 8(a) contracting.



Sec. 519.870-8  Contract clauses.

    (a) Insert the following clauses in solicitations, contracts, and 
orders issued under the MOU:
    (1) Insert the clause at 552.219-74, Section 8(a) Direct Award.
    (2) Insert the clause at FAR 52.219-14, Limitation on 
Subcontracting.
    (3) Insert the clause at FAR 52.219-18, Notification of Competition 
Limited to Eligible 8(a) Concerns, Substitute the following paragraph 
for paragraph (c) of the clause. Add the word ``Deviation'' at the end 
of the clause title.


[[Page 241]]


    (c) Any award resulting from this solicitation will be made directly 
by the Contracting Officer to the successful 8(a) offeror selected 
through the evaluation criteria set forth in this solicitation.

    (b) Do not use the clauses at FAR 52.219-11, Special 8(a) Contract 
Conditions, FAR 52.219-12, Special 8(a) Subcontract Conditions, or FAR 
52.219-17, Section 8(a) Award.

    Subpart 519.12_Small Disadvantaged Business Participation Program



Sec. 519.1202  Evaluation factor or subfactor.



Sec. 519.1202-2  Applicability.

    In addition to the exception in FAR 19.1202-2, do not evaluate the 
extent of participation of SDB concerns in performance of multiple award 
schedule contracts when all fair and reasonable offers from responsible 
sources are accepted.

         Subpart 519.70_GSA Mentor-Prot[eacute]g[eacute] Program

    Source: 74 FR 41063, Aug. 14, 2009, unless otherwise noted.



Sec. 519.7001  Scope of subpart.

    The GSA Mentor-Prot[eacute]g[eacute] Program is designed to 
encourage and motivate GSA prime contractors to assist small businesses 
concerns, small disadvantaged businesses concerns, women-owned small 
businesses concerns, veteran-owned small business concerns, service-
disabled veteran-owned small businesses concerns, and HUBZone small 
businesses concerns, and enhance their capability of performing 
successfully on GSA contracts and subcontracts, foster the establishment 
of long-term business relationships between these small business 
entities and GSA prime contractors, and increase the overall number of 
small business entities that receive GSA contract and subcontract 
awards.



Sec. 519.7002  Definitions.

    The definitions of small business concern, small disadvantaged 
business concern, HUBZone small business concern, women-owned small 
business concern, veteran-owned small business concern, and service-
disabled veteran-owned small business concern are the same as found in 
FAR 2.101. Also see 13 CFR 121, 124, 125 and 126.
    (a) Mentor as used in the GSA Mentor-Prot[eacute]g[eacute] Program, 
is a prime contractor that elects, on a specific GSA contract, to 
promote and develop small business subcontractors by providing 
developmental assistance designed to enhance the business success of the 
prot[eacute]g[eacute].
    (b) Mentor-Prot[eacute]g[eacute] Program Manager means an employee 
in the Office of Small Business Utilization (OSBU) (E) designated by the 
Associate Administrator of OSBU to manage the Mentor-
Prot[eacute]g[eacute] Program.
    (c) Prot[eacute]g[eacute] as used in the GSA Mentor-
Prot[eacute]g[eacute] Program is a small business concern that is the 
recipient of developmental assistance pursuant to a mentor-
prot[eacute]g[eacute] arrangement on a specific GSA contract.



Sec. 519.7003  General policy.

    (a) A large business prime contractor that meets the requirements at 
section 519.7006, and is approved as a mentor firm by the Mentor-
Prot[eacute]g[eacute] Program Manager, may enter into an Agreement with 
a small business concern, small disadvantaged business concern, women-
owned small business concern, veteran-owned small business concern, 
service-disabled veteran-owned small business concern or HUBZone small 
business concern that meets the requirements for being a 
prot[eacute]g[eacute] (see 519.7007) in order to provide appropriate 
developmental assistance to enhance the capabilities of the 
prot[eacute]g[eacute] to perform successfully as a subcontractor and 
supplier.
    (b) A small business prime contractor that is capable of providing 
developmental assistance to prot[eacute]g[eacute]s, may also be approved 
as a mentor.
    (c) An active mentor-prot[eacute]g[eacute] arrangement requires the 
prot[eacute]g[eacute] to either be a current or newly selected 
subcontractor under the mentor's prime contract with GSA.
    (d) A small business concern's status as a prot[eacute]g[eacute] 
under a GSA contract shall not have an effect on its ability

[[Page 242]]

to seek other prime contracts or subcontracts.
    (e) Potential Mentors may submit an application for admittance to 
the Mentor-Prot[eacute]g[eacute] Program at any time as long as the 
requirements at section 519.7006 are met.
    (f) The determination of affiliation is a function of the SBA.



Sec. 519.7004  Incentives for prime contractors.

    (a) Under the Small Business Act, 15 U.S.C. 637(d)(4)(E), the GSA is 
authorized to provide appropriate incentives to prime contractors in 
order to encourage subcontracting opportunities for small business 
concerns consistent with the efficient and economical performance of the 
contract. This authority is limited to negotiated procurements, 
including the GSA Multiple Award Schedule contracts and the GSA 
Governmentwide Acquisition Contracts. It does not include orders under 
any GSA contracts.
    (b) Costs incurred by a mentor to provide developmental assistance, 
as described in section 519.7012 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 GSA contract. If GSA is the mentor's 
responsible audit agency under FAR 42.703-1, GSA will consider these 
costs in determining indirect cost rates. If GSA 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 paragraph (b) of this section, contracting 
officers may give mentors evaluation credit during the source selection 
process for subcontracts awarded under their subcontracting plans 
pursuant to their Mentor-Prot[eacute]g[eacute] Agreements. (See FAR 
15.101-1). Therefore:
    (1) Contracting officers may evaluate proposals with subcontracting 
plans containing Mentor-Prot[eacute]g[eacute] Agreements more favorably 
than proposals with subcontracting plans that do not include Mentor-
Prot[eacute]g[eacute] Agreements; and
    (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 certain circumstances 
(see FAR 15.304(c)(3) and 15.305(a)(2)(v)) and determining contractor 
responsibility FAR section 19.705-5(a)(1).
    (d) OSBU Mentoring Award. A non-monetary award may 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 Administrator of GSA.
    (e) OSBU 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 their experience and 
progress under the Program. Participation is voluntary.



Sec. 519.7005  Measurement of program success.

    The overall success of the GSA Mentor-Prot[eacute]g[eacute] Program 
encompassing all participating mentors and prot[eacute]g[eacute]s will 
be measured by the extent to which it results in:
    (a) An increase in the number, dollar value, and percentage of 
subcontracts awarded to prot[eacute]g[eacute]s by mentor firms under GSA 
contracts since the date of entry into the Program. The baseline that 
demonstrates an increase is determined by comparing the number and total 
dollar amount of subcontract awards made to the identified 
prot[eacute]g[eacute] firm(s) during the two preceding fiscal years (if 
any) that are listed in application;
    (b) An increase in the number and dollar value of contract and 
subcontract awards (including percentage of subcontract awards) to 
prot[eacute]g[eacute] firms since the date of the 
prot[eacute]g[eacute]'s entry into the Program (under GSA contracts and 
contracts awarded by other Federal agencies);
    (c) An increase in the number and dollar value of subcontracts 
awarded to a prot[eacute]g[eacute] firm by its mentor firm; and
    (d) An increase in subcontracting with prot[eacute]g[eacute] firms 
in industry categories where they have not traditionally participated 
within the mentor

[[Page 243]]

firm's activity (i.e., the prot[eacute]g[eacute] is expanding its field 
of expertise or is increasing its opportunities in areas where it has 
not traditionally performed).
    (e) Assessments of the semi-annual reports submitted by the mentors 
and ``Lessons Learned'' evaluation submitted by the mentors and 
prot[eacute]g[eacute]s to the GSA Mentor-Prot[eacute]g[eacute] Program 
Manager.



Sec. 519.7006  Mentor firms.

    (a) Mentors must be:
    (1) A large business prime contractor that is currently performing 
under an approved subcontracting plan as required by FAR 19.7 - Small 
business mentors are exempted; or
    (2) A small business prime contractor that can provide developmental 
assistance to enhance the capabilities of prot[eacute]g[eacute]s to 
perform as contractors, subcontractors, and suppliers;
    (b) Must be eligible (not listed in the ``Excluded Parties List 
System'') for U.S. Government contracts and not excluded from the 
Mentor-Prot[eacute]g[eacute] Program under section 519.7014(b);
    (c) Must be able to provide developmental assistance that will 
enhance the ability of prot[eacute]g[eacute]s to perform as contractors 
and subcontractors; and
    (d) Must provide semi-annual reports detailing the assistance 
provided and the cost incurred in supporting prot[eacute]g[eacute]s.



Sec. 519.7007  Prot[eacute]g[eacute] firms.

    (a) For selection as a prot[eacute]g[eacute], a firm must be:
    (1) A small business concern, small disadvantaged business concern, 
veteran-owned small business concern, service-disabled veteran-owned 
small business concern, HUBZone small business concern, or women-owned 
small business concern;
    (2) Small for the NAICS code the prime contractor/mentor assigns to 
the subcontract; and
    (3) Eligible (not listed in the ``Excluded Parties List System'') 
for U.S. Government contracts and not excluded from the Mentor-
Prot[eacute]g[eacute] Program under section 519.7014(b).
    (b) A prot[eacute]g[eacute] firm may self-represent to a mentor firm 
that it meets the requirements set forth in paragraph (a) of this 
section. Mentors may check the Central Contractor Registration (CCR) at 
www.ccr.gov to verify that the self-representation of the potential 
prot[eacute]g[eacute] meets the specified small business and 
socioeconomic category eligibility requirements (see FAR 19.703(b) and 
(d)). HUBZone and small disadvantaged business status eligibility and 
documentation requirements are determined according to 13 CFR parts 124 
and 126.
    (c) A prot[eacute]g[eacute] firm must not have another formal, 
active mentor-prot[eacute]g[eacute] relationship under GSA's Mentor-
Prot[eacute]g[eacute] Program but may have an active mentor-
prot[eacute]g[eacute] relationship under another agency's program.



Sec. 519.7008  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 concerns including small disadvantaged 
business concerns, women-owned small business concerns, veteran-owned 
small business concerns, service-disabled veteran-owned small business 
concerns, and HUBZone small business concerns. A prot[eacute]g[eacute] 
must be either a current subcontractor or a newly selected subcontractor 
for the prime contractor's GSA contract.
    (b) Mentor firms may have more than one prot[eacute]g[eacute]. GSA 
reserves the right to limit the number of prot[eacute]g[eacute]s 
participating under each mentor firm.
    (c) The selection of prot[eacute]g[eacute] firms by mentor firms is 
not protestable, except for a protest regarding the size or eligibility 
status of an entity selected by a mentor to be a prot[eacute]g[eacute]. 
Such protests shall be handled in accordance with FAR 19.703(b). The 
contracting officer shall notify the Office of Small Business 
Utilization (OSBU) of the protest.



Sec. 519.7009  Application process.

    (a) Prime contractors interested in becoming a mentor firm must 
apply in writing by submitting the GSA Form 3695 to the GSA Mentor-
Prot[eacute]g[eacute] Program Manager, at GSA Office of Small Business 
Utilization (E), Washington, DC 20405. The Application shall include the 
Mentor-Prot[eacute]g[eacute] Agreement and will be evaluated for 
approval based on

[[Page 244]]

the extent to which the company plans to provide developmental 
assistance.
    (b) The application must contain:
    (1) A statement that the mentor firm is currently performing under 
at least one active approved subcontracting plan (small business 
exempted) and the firm is eligible, as of the date of Application, for 
the award of Federal contracts;
    (2) The number of proposed prot[eacute]g[eacute] arrangements;
    (3) Data on all current GSA contracts, and subcontracts including 
the contract/subcontract number(s), type of contract(s), period of 
performance (including options), contract/subcontract value(s) including 
options, technical program effort(s) (program title), name of GSA 
Project Manager or Contracting Officer's Representative (including 
contact information), name of contracting officer(s) and contact 
information, and awarding GSA installation;
    (4) Data on total number and dollar value of subcontracts awarded 
under GSA prime contracts within the past 2 years and the number and 
dollar value of such subcontracts awarded to entities who are proposed 
prot[eacute]g[eacute]s;
    (5) Information on the proposed types of developmental assistance. 
For each proposed mentor-prot[eacute]g[eacute] relationship include 
information on the company's ability to provide developmental assistance 
to the identified prot[eacute]g[eacute] firm and how that assistance 
will potentially increase subcontracting opportunities for the 
prot[eacute]g[eacute] firm, including subcontracting opportunities in 
industry categories where these entities are not dominant in the 
company's current subcontractor base; and
    (6) Agreement information as listed in 519.7010.



Sec. 519.7010  Agreement contents.

    The contents of the Agreement must contain:
    (a) Names, addresses (including facsimile, e-mail, and homepage) and 
telephone numbers of mentor and prot[eacute]g[eacute] firms and the 
name, telephone number, and position title within both firms of the 
person who will oversee the Agreement.
    (b) An eligibility statement from the prot[eacute]g[eacute] stating 
that it is a small business, its primary NAICS code, and when applicable 
the type of small business (small disadvantaged business concern, 
HUBZone small business concern, women-owned small business concern, 
veteran-owned small business concern, or service-disabled veteran-owned 
small business concern).
    (c) A description of the type of developmental assistance that will 
be provided by the mentor firm to the prot[eacute]g[eacute] firm (see 
519.7012).
    (d) Milestones for providing the identified developmental 
assistance.
    (e) Factors to assess the prot[eacute]g[eacute] firm's developmental 
progress under the Program.
    (f) The anticipated dollar value and type of subcontracts that may 
be awarded to the prot[eacute]g[eacute] firm consistent with the extent 
and nature of mentor firm's business, and the period of time over which 
they may be awarded.
    (g) Program participation term: State the period of time over which 
the developmental assistance will be performed.
    (h) Mentor termination procedures: Describe the procedures 
applicable to the mentor firm when notifying the Prot[eacute]g[eacute] 
firm, in writing and at least 30 days in advance, of the mentor firm's 
intent to voluntarily withdraw its participation in the Program, or to 
terminate the Agreement.
    (i) Prot[eacute]g[eacute] termination procedures: Describe the 
procedures applicable to the prot[eacute]g[eacute] firm when notifying 
the mentor firm, in writing at least 30 days in advance, of the 
prot[eacute]g[eacute] firm's intent to terminate the Mentor-
Prot[eacute]g[eacute] Agreement.
    (j) Plan for accomplishing contract work should the Mentor-
Prot[eacute]g[eacute] Agreement be terminated or a party excluded under 
519.7014(b). The mentor's prime contract with GSA continues even if the 
Mentor-Prot[eacute]g[eacute] Agreement or the Mentor-
Prot[eacute]g[eacute] Program is discontinued.
    (k) The prot[eacute]g[eacute] must agree to provide input into the 
mentor firm's semi-annual reports (see 519.7015). The 
prot[eacute]g[eacute] must submit a ``Lessons Learned'' evaluation along 
with the mentor firm at the conclusion of the Mentor-
Prot[eacute]g[eacute] agreement.

[[Page 245]]

    (l) Other terms and conditions as specified by the Mentor-
Prot[eacute]g[eacute] Manager on a case-by-case basis.



Sec. 519.7011  Application review.

    (a) The Mentor-Prot[eacute]g[eacute] Program Manager will review the 
information specified in section 519.7009(b) and 519.7010 to establish 
the Mentor's and Prot[eacute]g[eacute]'s eligibility and to ensure all 
necessary information is included. If the application relates to a 
specific contract, then the Mentor-Prot[eacute]g[eacute] Program Manager 
will consult with the applicable contracting officer regarding the 
adequacy of the proposed Agreement, as appropriate. The Mentor-
Prot[eacute]g[eacute] Program Manager will complete its review no later 
than 30 days after receipt of the application. The contracting officer 
must provide feedback to the Program Manager no later than 10 days after 
receipt of the application.
    (b) After the Mentor-Prot[eacute]g[eacute] Program Manager completes 
its review and provides written approval, the Mentor may execute the 
Agreement and implement the developmental assistance as provided under 
the Agreement. The Mentor-Prot[eacute]g[eacute] Program Manager will 
provide a copy of the Mentor-Prot[eacute]g[eacute] Agreement to the GSA 
contracting officer for any GSA contracts affected by the Agreement.
    (c) The Agreement defines the relationship between the Mentor and 
the Prot[eacute]g[eacute] firms only. The Agreement itself does not 
create any privity of contract or contractual relationship between the 
Mentor and GSA nor the Prot[eacute]g[eacute] and GSA.
    (d) If the Agreement is disapproved, the Mentor may provide 
additional information for reconsideration. The Mentor-
Prot[eacute]g[eacute] Program Manager will complete the review of any 
supplemental information no later than 30 days after its receipt. Upon 
finding deficiencies that GSA considers correctable, the Mentor-
Prot[eacute]g[eacute] Program Manager will notify the Mentor and 
Prot[eacute]g[eacute] and request correction of the deficiencies to be 
provided within 15 days.



Sec. 519.7012  Developmental assistance.

    The forms of developmental assistance a mentor can provide to a 
prot[eacute]g[eacute] include:
    (a) Management guidance relating to--
    (1) Financial management;
    (2) Organizational management;
    (3) Overall business management/planning; and
    (4) Business development.
    (b) Engineering and other technical assistance.
    (c) Loans.
    (d) Rent-free use of facilities and/or equipment.
    (e) Temporary assignment of personnel to the prot[eacute]g[eacute] 
for purpose of training.
    (f) Any other types of developmental assistance approved by the GSA 
Mentor-Prot[eacute]g[eacute] Program Manager.



Sec. 519.7013  Obligation.

    (a) The mentor or prot[eacute]g[eacute] may terminate the Agreement 
in accordance with 519.7010. The mentor will notify the Mentor-
Prot[eacute]g[eacute] Program Manager and the contracting officer, in 
writing, at least 30 days in advance of the mentor firm's intent to 
voluntarily withdraw from the Program or to terminate the Agreement, or 
upon receipt of a prot[eacute]g[eacute]'s notice to withdraw from the 
Program.
    (b) Mentor and prot[eacute]g[eacute] firms will submit a ``Lessons 
Learned'' evaluation to the GSA Mentor-Prot[eacute]g[eacute] Program 
Manager at the conclusion or termination of each Mentor-
Prot[eacute]g[eacute] Agreement or withdrawal from the Mentor-
Prot[eacute]g[eacute] program.



Sec. 519.7014  Internal controls.

    (a) The GSA Mentor-Prot[eacute]g[eacute] Program Manager will manage 
the Program. Internal controls will be established by the Mentor-
Prot[eacute]g[eacute] Program Manager to achieve the stated Program 
objectives (by serving as checks and balances against undesired actions 
or consequences) such as:
    (1) Reviewing and evaluating mentor Applications for realism, 
validity and accuracy of provided information;
    (2) Monitoring each Mentor-Prot[eacute]g[eacute] Agreement by 
reviewing semi-annual progress reports submitted by mentors and 
prot[eacute]g[eacute]s on prot[eacute]g[eacute] development

[[Page 246]]

to measure prot[eacute]g[eacute] progress against the master plan 
contained in the approved Agreement;
    (3) Monitoring milestones in the Agreement (see 519.7010); and
    (4) Evaluating ``Lessons Learned'' submitted by the Mentor and the 
Prot[eacute]g[eacute] as required by section 519.7013 to improve the GSA 
Mentor-Prot[eacute]g[eacute] Program.
    (b)(1) GSA has the authority to exclude mentor or 
prot[eacute]g[eacute] firms from participating in the GSA Program.
    (2) GSA may rescind approval of an existing Mentor-
Prot[eacute]g[eacute] Agreement if it determines that such action is in 
GSA'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 OSBU. 
Rescission of an Agreement does not change the terms of any subcontract 
between the Mentor and the Prot[eacute]g[eacute].
    (3) Exclusion from the Program does not constitute a termination of 
the subcontract between the mentor and the prot[eacute]g[eacute].



Sec. 519.7015  Reports.

    (a) Semi-annual reports shall be submitted by the mentor to the GSA 
Mentor-Prot[eacute]g[eacute] Program manager to include information as 
outlined in section 552.219-76(c).
    (b) Prot[eacute]g[eacute]s must agree to provide input into the 
mentor firm's semi-annual reports detailing the assistance provided and 
goals achieved since agreement inception. However, for cost reimbursable 
contracts, costs associated with the preparation of these reports are 
unallowable costs under these Government contracts and will not be 
reimbursed by the Government.
    (c) The GSA contracting officer, or if applicable the technical 
program manager, shall include an assessment of the prime contractor's 
(mentor's) performance in the Mentor-Prot[eacute]g[eacute] Program in a 
quarterly ``Strengths and Weaknesses'' evaluation report. A copy of this 
assessment will be provided to the Mentor-Prot[eacute]g[eacute] Program 
Manager and to the mentor and prot[eacute]g[eacute].



Sec. 519.7016  Program review.

    At the conclusion of each year in the Mentor-Prot[eacute]g[eacute] 
Program (anniversary date of the Mentor-Prot[eacute]g[eacute] Program), 
the prime contractor and prot[eacute]g[eacute], as appropriate, will 
formally brief the GSA Mentor-Prot[eacute]g[eacute] Program Manager, the 
technical program manager, and the contracting officer regarding Mentor-
Prot[eacute]g[eacute] Program accomplishments pertaining to the approved 
Agreement.



Sec. 519.7017  Contract clauses.

    (a) The contracting officer shall insert the clause at 552.219-75, 
GSA Mentor-Prot[eacute]g[eacute] Program, in all unrestricted 
solicitations (not set aside) and contracts that exceed the simplified 
acquisition threshold that offer subcontracting opportunities or in the 
case of a small business, that can offer developmental assistance to a 
small business prot[eacute]g[eacute].
    (b) The contracting officer shall insert the clause at 552.219-76, 
Mentor Requirements and Evaluation, in contracts anticipated to exceed 
the simplified acquisition threshold where the prime contractor has 
signed a Mentor-Prot[eacute]g[eacute] Agreement with GSA.

      PART 522_APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS

Sec.

Sec. 522.001 Defintion.

                   Subpart 522.1_Basic Labor Policies


Sec. 522.101 Labor relations.

Sec. 522.101-1 General.

Sec. 522.103-5 Contract clauses.

   Subpart 522.4_Labor Standards for Contracts Involving Construction


Sec. 522.406 Administration and enforcement.

Sec. 522.406-6 Payrolls and statements.

               Subpart 522.8_Equal Employment Opportunity


Sec. 522.803 Responsibilities.

Sec. 522.804 Affirmative action programs.

Sec. 522.804-1 Nonconstruction.

Sec. 522.804-2 Construction.

Sec. 522.805 Procedures.

Sec. 522.807 Exemptions.

    Authority: 40 U.S.C. 121(c).

    Source: 64 FR 37220, July 9, 1999, unless otherwise noted.

[[Page 247]]



Sec. 522.001  Definition.

    Agency labor advisor, as used in this part, means the Director of 
the Contract Policy Division (VPC) within the Office of the Chief 
Acquisition Officer (OCAO).

[73 FR 46203, Aug. 8, 2008]

                   Subpart 522.1_Basic Labor Policies



Sec. 522.101  Labor relations.



Sec. 522.101-1  General.

    The Office of General Counsel (OGC) and the agency labor advisor 
shall--
    (a) Serve as the GSA points of contact on all contractor labor 
relations matters;
    (b) Initiate contact on contractor labor relations matters with 
national offices of labor organizations, Government departments, 
agencies or other governmental organizations. Contracting offices shall 
notify OGC and the agency labor advisor when they are contacted by such 
external organizations;
    (c) Serve as a clearinghouse for information on labor laws 
applicable to Government acquisitions; and
    (d) Respond to questions involving FAR Part 22, Application of Labor 
Laws to Government Acquisitions, or other contractor labor relations 
matters concerning GSA acquisition programs. OGC determines the agency's 
legal position.

[73 FR 46203, Aug. 8, 2008]



Sec. 522.103-5  Contract clauses.

    Insert FAR 52.222-1, Notice to the Government of Labor Disputes, in 
solicitations and contracts for DX rated orders under the Defense 
Priorities and Allocations System (DPAS). Information on the DPAS can be 
found at FAR Subpart 11.6, Priorities and Allocations.

[73 FR 46203, Aug. 8, 2008]

   Subpart 522.4_Labor Standards for Contracts Involving Construction



Sec. 522.406  Administration and enforcement.



Sec. 522.406-6  Payrolls and statements.

    Weekly payrolls and statements of compliance with respect to payment 
of wages are not required from a prime contractor or a subcontractor 
that personally performs work.

[73 FR 46203, Aug. 8, 2008]

               Subpart 522.8_Equal Employment Opportunity



Sec. 522.803  Responsibilities.

    Contracting officers should submit questions on the applicability of 
E.O. 11246 and implementing regulations to assigned legal counsel.

[64 FR 37220, July 9, 1999, as amended at 73 FR 46203, Aug. 8, 2008]



Sec. 522.804  Affirmative action programs.



Sec. 522.804-1  Nonconstruction.

    (a) The requirements of FAR 22.804 also apply to each contractor and 
subcontractor with 50 or more employees that either:
    (1) Serves as a depository of Government funds; or
    (2) Is a financial institution serving as an issuing and paying 
agent for U.S. savings bonds and savings notes.
    (b) The contractors, subcontractors, and financial institutions 
described in 522.804-1(a) must develop a written affirmative action 
compliance program for each of its establishments regardless of the 
contract or holding value, in accordance with 41 CFR 60-1.40.

[64 FR 37220, July 9, 1999, as amended at 73 FR 46203, Aug. 8, 2008]



Sec. 522.804-2  Construction.

    Goals for the employment of minorities and women in the construction 
industry are established by the Director, Office of Federal Contract 
Compliance Programs (OFCCP), Department of Labor. The current goal for 
the utilization of women is 6.9%, regardless of the location of the 
Federal contract. This

[[Page 248]]

goal was extended indefinitely by the Department of Labor in 1980. The 
current goals for minority participation vary by location and are listed 
in Appendix E of DOL's ``Technical Assistance Guide for Federal 
Construction Contractors.'' This guide can be accessed at http://
www.dol.gov/esa/ofccp/TAguides/ctaguide.htm.

[73 FR 46203, Aug. 8, 2008]



Sec. 522.805  Procedures.

    (a) To determine whether the contract meets the threshold in FAR 
22.805(a), contracting officers shall include the value of the basic 
contract plus priced options. A contract modification exercising a 
priced option is not a contract award under FAR 22.805(a)(1)(ii) and 
does not a require a preaward clearance.
    (b) Contracting officers shall submit preaward clearance requests 
directly to the appropriate OFCCP regional office. A list of these 
offices can be found at http://www.dol.gov/esa/contacts/ofccp/
ofcpkeyp.htm.
    (c) The EEO poster required by FAR 22.805(b) can be found at: http:/
/www.dol.gov/esa/regs/compliance/posters/pdf/eeopost.pdf. In addition to 
providing this poster to each non-exempt contractor, the contracting 
officer shall advise contractors to complete the Employer Information 
Report (EEO-1) at http://www.eeoc.gov/eeo1survey/index.html.

[64 FR 37220, July 9, 1999, as amended at 73 FR 46203, Aug. 8, 2008]



Sec. 522.807  Exemptions.

    The agency labor advisor submits a request for exemption.

 PART 523_ENVIRONMENT, CONSERVATION, OCCUPATIONAL SAFETY AND DRUG-FREE 
                                WORKPLACE

  Subpart 523.3_Hazardous Materials Identification and Material Safety 
                                  Data

Sec.

Sec. 523.303 Contract clause.

Sec. 523.370 Solicitation provision.

    Authority: 40 U.S.C. 486(c).

    Source: 64 FR 37220, July 9, 1999, unless otherwise noted.

  Subpart 523.3_Hazardous Materials Identification and Material Safety 
                                  Data



Sec. 523.303  Contract clause.

    (a) Insert 552.223-70, Hazardous Substances, in solicitations and 
contracts for packaged items subject to the Federal Hazardous Substances 
Act and the Hazardous Materials Transportation Act.
    (b) Insert 552.223-71, Nonconforming Hazardous Materials, in 
solicitations and contracts for supplies that contain hazardous 
materials.



Sec. 523.370  Solicitation provision.

    Insert 552.223-72, Hazardous Material Information, in any 
solicitation that provides for delivery of hazardous materials on an 
f.o.b. origin basis.

                      PART 525_FOREIGN ACQUISITION

Subpart 525.1--Buy American Act-Supplies [Reserved]

    Authority: 40 U.S.C. 121(c).

    Source: 64 FR 37221, July 9, 1999, unless otherwise noted.

[[Page 249]]

              SUBCHAPTER E_GENERAL CONTRACTING REQUIREMENTS

                 PART 527_PATENTS, DATA, AND COPYRIGHTS

    Authority: 40 U.S.C. 486(c).

    Source: 64 FR 37221, July 9, 1999, unless otherwise noted.

               Subpart 527.4_Rights in Data and Copyrights



Sec. 527.409  Solicitation provisions and contract clauses.

    Architect-Engineer Services and Construction Contracts Involving 
                       Architect-Engineer Services

    Insert the following in solicitations and contracts for architect-
engineer services and construction contracts involving architect-
engineer services:
    (a) Insert 552.227-70, Government Rights (Unlimited), instead of FAR 
52.227-17, Rights in Data-Special Works, in contracts, except if 
552.227-71 is prescribed.
    (b) If the Government requires sole property rights and exclusive 
control over the design and data, insert 552.227-71, Drawings and Other 
Data to Become Property of Government, instead of FAR 52.227-17.

                      PART 528_BONDS AND INSURANCE

           Subpart 528.2_Sureties and Other Security for Bonds

Sec.

Sec. 528.202 Acceptability of corporate sureties.

                         Subpart 528.3_Insurance


Sec. 528.310 Contract clause for work on a Government installation.

Sec. 528.311 Solicitation provision and contract clause on liability 
          insurance under cost-reimbursement contracts.

Sec. 528.311-1 Contract clause.

    Authority: 40 U.S.C. 121(c).

    Source: 64 FR 37221, July 9, 1999, unless otherwise noted.

           Subpart 528.2_Sureties and Other Security for Bonds



Sec. 528.202  Acceptability of corporate sureties.

    Corporate surety bonds must be manually signed by the Attorney-in-
Fact or officer of the surety company and the corporate seal affixed. 
The contracting officer may waive failure of the surety to affix the 
corporate seal as a minor informality. (See B-184120, July 2, 1975, 75-2 
CPD 9.)

[74 FR 17099, Apr. 14, 2009]

                         Subpart 528.3_Insurance



Sec. 528.310  Contract clause for work on a Government installation.

    Insert the clause at 552.228-5, Government as Additional Insured, in 
each solicitation and contract that meets all the following conditions:
    (a) The contract amount is expected to exceed the simplified 
acquisition threshold; and
    (b) The contract will require work to be performed on Government 
property.

[74 FR 17099, Apr. 14, 2009]



Sec. 528.311  Solicitation provision and contract clause on liability 
          insurance under cost-reimbursement contracts.



Sec. 528.311--1  Contract clause.

    Use the clause at FAR 52.228-7, Insurance--Liability to Third 
Persons, in solicitations and contracts, other than those for 
construction and those for architect-engineer services, when a cost-
reimbursement contract is contemplated, unless the head of the 
contracting activity waives the requirement for use of the clause.

[74 FR 17099, Apr. 14, 2009]

                             PART 529_TAXES

                     Subpart 529.4_Contract Clauses

Sec.

Sec. 529.401 Domestic contracts.

Sec. 529.401-70 Purchases at or under the simplified acquisition 
          threshold.

[[Page 250]]


Sec. 529.401-71 Contracts for supplies and services usable by the DC 
          Government.

    Authority: 40 U.S.C. 486(c).

    Source: 64 FR 37222, July 9, 1999, unless otherwise noted.

                     Subpart 529.4_Contract Clauses



Sec. 529.401  Domestic contracts.



Sec. 529.401-70  Purchases at or under the simplified acquisition 
          threshold.

    Insert 552.229-70, Federal, State, and Local Taxes, in purchases and 
contracts estimated to exceed the micropurchase threshold, but not the 
simplified acquisition threshold.



Sec. 529.401-71  Contracts for supplies and services usable by the DC 
          Government.

    Insert 552.229-71, Federal Tax-DC Government, in solicitations and 
contracts that permit the District of Columbia Government to place 
orders.

                       PART 532_CONTRACT FINANCING

          Subpart 532.1_Non-Commercial Item Purchase Financing

Sec.

Sec. 532.111 Contract clauses for non-commercial purchases.

                   Subpart 532.8_Assignment of Claims


Sec. 532.806 Contract clauses.

                      Subpart 532.9_Prompt Payment


Sec. 532.904 Determining payment due dates.

Sec. 532.905 Payment documentation and process.

Sec. 532.908 Contract clauses.

      Subpart 532.70_Authorizing Payment by Government Charge Card


Sec. 532.7002 Solicitation requirements.

Sec. 532.7003 Contract clause.

    Authority: 40 U.S.C. 121(c).

    Source: 64 FR 37222, July 9, 1999, unless otherwise noted.

          Subpart 532.1_Non-Commercial Item Purchase Financing



Sec. 532.111  Contract clauses for non-commercial purchases.

    For contracts that include the clause at FAR 52.232-5, Payments 
Under Fixed-Price Construction Contracts, the contracting officer shall 
provide the contractor with GSA Form 2419, Certification of Progress 
Payments Under Fixed-Price Construction Contracts, to be used to make 
the certification required by FAR 52.232-5(c).

[74 FR 54917, Oct. 26, 2009]

                   Subpart 532.8_Assignment of Claims



Sec. 532.806  Contract clauses.

    Insert the clause at 552.232-23, Assignment of Claims, in 
solicitations and requirements or indefinite quantity contracts under 
which more than one agency may place orders.

                      Subpart 532.9_Prompt Payment



Sec. 532.904  Determining payment due dates.

    Payment due dates for construction contracts are addressed at FAR 
32.904(d). The following procedures apply to construction and building 
service contracts:
    (a) The amount of final payment must include, as appropriate, 
deductions to cover any of the following:
    (1) Liquidated damages for late completion.
    (2) Liquidated damages for labor violations.
    (3) Amounts withheld for improper payment of labor wages.
    (4) The amount of unilateral change orders covering defects and 
omissions.
    (5) The agreed-upon dollar amount in a Deficiency Report, which is 
included in all applicable Operation and Maintenance (O&M) service 
contracts.
    (b) When the contract is for the performance of building services, 
the contracting officer shall include the clause at 552.232-72, Final 
Payment Under Building Services Contracts.

[74 FR 54917, Oct. 26, 2009]

[[Page 251]]



Sec. 532.905  Payment documentation and process.

    For contracts of the type shown in 532.7201(a)(1) through (4):
    (a) Contractors are to submit invoices or vouchers to the 
contracting officer for approval. Invoices must be annotated with the 
date of receipt, as required by FAR 32.905. That date will be used to 
determine interest penalties for late payments. The contracting officer 
or designee must review the processing of invoices or vouchers before 
payment to determine if the items and amounts claimed are consistent 
with the contract terms and represent prudent business transactions. The 
contracting officer must ensure that these payments are commensurate 
with physical and technical progress under the contract. If the 
contractor has not deducted questionable amounts from the invoice or 
amounts required to be withheld, the contracting officer must make the 
required deduction, except as provided in 532.7203. Subject to 532.7201, 
the contracting officer must note approval of any payment on (or 
attached to) the invoice or voucher submitted by the contractor and 
forward the invoice or voucher to the appropriate contract finance 
office for retention after certification and scheduling for payment by a 
disbursing office.
    (b) See GSAM 532.7203 for the handling of audit findings.

[74 FR 54917, Oct. 26, 2009]



Sec. 532.908  Contract clauses.

    (a) GSA has a FAR deviation that allows this agency to use the 
clause at 552.232-1, Payments, in lieu of the clause at FAR 52.232-1, 
Payments.
    (b) General. Before exercising the authority to modify the date for 
constructive acceptance or constructive approval of progress payments in 
paragraph (a)(5)(i) of the clause at FAR 52.232-25, Prompt Payment, the 
contracting officer must prepare a written justification explaining why 
a longer period is necessary. An official one level above the 
contracting officer must approve the justification. The time needed 
should be determined on a case-by-case basis, but the specified 
constructive acceptance period shall not exceed 30 days.
    (c) Stock, Special Order, and Schedules Programs. (1) GSA has 
obtained a FAR Deviation to authorize payment within 10 days of receipt 
of a proper invoice. The authority applies only to:
    (i) Orders placed by GSA under the referenced programs;
    (ii) That include FAR 52.232-33, Mandatory Information for 
Electronic Funds Transfer Payment; and
    (iii) For which the order is placed, and the contractor submits 
invoices, using EDI in accordance with the Trading Partner Agreement.
    (2) If the contract is for commercial items and will include FAR 
52.212-4, use the clause with its Alternate II. If the contract is not 
for commercial items, use the clause at 552.232-25, Prompt Payment, 
instead of FAR 52.232-25.

[74 FR 54918, Oct. 26, 2009]

      Subpart 532.70_Authorizing Payment by Government Charge Card



Sec. 532.7002  Solicitation requirements.

    (a) In solicitations for supplies and services, except FSS schedule 
solicitations, request offerors to indicate if they will accept payment 
by Governmentwide commercial purchase card. Identify the card brand(s) 
under the GSA SmartPay program that may be used to make payments under 
the contract, on the cover page or in Section L of the solicitation.
    (b) For FSS schedule contracts, identify the card brand(s) under the 
GSA SmartPay program that may be used to make payments under the 
contract in the contract award letter.
    (c) For orders placed by GSA, you may authorize payment by 
Governmentwide commercial purchase card only for orders that do not 
exceed $100,000 (see GSA Order, Guidance on Use of the Credit Card for 
Purchases (CFO 4200.1)).
    (d) Consider requesting offerors to designate different levels for 
which they may accept payment by Governmentwide commercial purchase 
card, for example:

    ``If awarded a contract under this solicitation, the offeror agrees 
to accept payment by

[[Page 252]]

Governmentwide commercial purchase card for orders of:

--$2,500 or less
--$25,000 or less
--$50,000 or less
--$100,000 or less''

[65 FR 11247, Mar. 2, 2000]



Sec. 532.7003  Contract clause.

    For indefinite-delivery, indefinite-quantity (IDIQ) contracts other 
than Schedules, insert the clause at 552.232-77, Payment By Government 
Charge Card, if the contract will provide for payment by Government 
charge card as an alternative method of payment for orders. For Schedule 
contracts that provide for payment using the Government charge card, use 
the clause(s) prescribed at part 538.

[74 FR 54918, Oct. 26, 2009]

                PART 533_PROTESTS, DISPUTES, AND APPEALS

                         Subpart 533.1_Protests

Sec.

Sec. 533.103 Protests to the agency.

Sec. 533.103-1 Filing a protest.

                   Subpart 533.2_Disputes and Appeals


Sec. 533.209 Suspected fraudulent claims.

Sec. 533.211 Contracting officer's decision.

    Authority: 40 U.S.C. 121(c).

    Source: 64 FR 37224, July 9, 1999, unless otherwise noted.

                         Subpart 533.1_Protests



Sec. 533.103  Protests to the agency.



Sec. 533.103-1  Filing a protest.

    (a) Any protester filing an agency protest has the choice of 
requesting either that the contracting officer or the Agency Protest 
Official decide the protest. If the protest is silent on this matter, 
the contracting officer will decide the protest. If a party requests a 
review at a level above the contracting officer, the Agency Protest 
Official will decide the protest. The decision by the Agency Protest 
Official for GSA is an alternative to a decision by the contracting 
officer on a protest. The Agency Protest Official for GSA will not 
consider an appeal of the contracting officer's decision on an agency 
protest.
    (b) If an agency protest is filed, the deciding official uses the 
procedures in FAR 33.103 and this section to resolve the protest. The 
deciding official will provide a fair and quick review of any protest 
filed with the agency.
    (c) The filing timeframes in FAR 33.103(e) apply. An agency protest 
is filed when the complete protest is received at the location the 
solicitation designates for serving protests. GSA's hours of operation 
are 8 a.m. to 4:30 p.m. Protests delivered after 4:30 p.m. will be 
considered received and filed the following business day.
    (d) The protest must meet all the following conditions:
    (1) Include the information required by FAR 33.103(d)(2).
    (2) Indicate that it is a protest to the agency.
    (3) Be filed in writing with the contracting officer.
    (4) State whether the protester chooses to have the contracting 
officer or the Agency Protest Official decide the protest. If the 
protest does not include the protester's choice, then the contracting 
officer will decide the protest (see paragraph (a) of this subsection).
    (e) The following procedures apply to information submitted in 
support of or in response to an agency protest:
    (1) GSA procedures do not provide for any discovery.
    (2) The deciding official has discretion to request additional 
information from either the agency or the protester, orally or in 
writing, as may be necessary to render a timely decision on the protest. 
However, protests are normally decided on the basis of information 
initially provided by the protester and the agency.
    (3) To the extent permitted by law and regulations, the parties may 
exchange relevant information.
    (4) The agency must make a written response to the protest within 
ten days unless another date is set by the deciding official.
    (5) The agency must also provide the protester with a copy of the 
response on the same day it files the protest response with the deciding 
official. If the agency believes it needs to redact or

[[Page 253]]

withhold any information in the response from the protester, it should 
identify and provide the information to the deciding official for in 
camera review.
    (f) A protester may represent itself or be represented by legal 
counsel. GSA will not reimburse the protester for any legal fees related 
to the agency protest.
    (g) GSA may dismiss or stay proceedings on an agency protest if a 
protest on the same or similar basis is filed with a protest forum 
outside of GSA.

[73 FR 74614, Dec. 9, 2008]

                   Subpart 533.2_Disputes and Appeals



Sec. 533.209  Suspected fraudulent claims.

    In GSA, the agency official responsible for investigating fraud is 
the Office of Inspector General.

[73 FR 74614, Dec. 9, 2008]



Sec. 533.211  Contracting officer's decision.

    The contracting officer's written decision must include the 
paragraph at FAR 33.211(a)(4)(v). The contracting officer shall state in 
the decision that a contractor's notice of appeal to the Civilian Board 
of Contract Appeals (CBCA) should include a copy of the contracting 
officer's decision.

[73 FR 74614, Dec. 9, 2008]

[[Page 254]]

             SUBCHAPTER F_SPECIAL CATEGORIES OF CONTRACTING

         PART 536_CONSTRUCTION AND ARCHITECT-ENGINEER CONTRACTS

                          Subpart 536.1_General

Sec.

Sec. 536.101 Applicability.

      Subpart 536.2_Special Aspects of Contracting for Construction


Sec. 536.213 Special procedures for sealed bidding in construction 
          contracting.

Sec. 536.213-3 Invitations for bids.

Sec. 536.213-370 Bids that include alternates.

Sec. 536.213-371 Bids that include options.

Sec. 536.213-372 Bids that include both alternates and options.

Sec. 536.270 Exercise of options.

Sec. 536.271 Project labor agreements.

                     Subpart 536.5_Contract Clauses


Sec. 536.570 Supplemental provisions and clauses.

Sec. 536.570-1 Definitions.

Sec. 536.570-2 Authorities and limitations.

Sec. 536.570-3 Specialist.

Sec. 536.570-4 Basis of award--construction contract.

Sec. 536.570-5 Working hours.

Sec. 536.570-6 Use of premises.

Sec. 536.570-7 Measurements.

Sec. 536.570-8 Specifications and drawings.

Sec. 536.570-9 Shop drawings, coordination drawings, and schedules.

Sec. 536.570-10 Samples.

Sec. 536.570-11 Heat.

Sec. 536.570-12 Use of equipment by the Government.

Sec. 536.570-13 Subcontracts.

Sec. 536.570-14 Requirement for a Project Labor Agreement.

                Subpart 536.6_Architect-Engineer Services


Sec. 536.602 Selection of firms for architect-engineer contracts.

Sec. 536.602-1 Selection criteria.

    Authority: 40 U.S.C. 486(c).

    Source: 64 FR 37224, July 9, 1999, unless otherwise noted.

                          Subpart 536.1_General



Sec. 536.101  Applicability.

    If a requirement in this part is inconsistent with a requirement in 
another GSAR part, this part takes precedence.

      Subpart 536.2_Special Aspects of Contracting for Construction



Sec. 536.213  Special procedures for sealed bidding in construction 
          contracting.



Sec. 536.213-3  Invitations for bids.



Sec. 536.213-370  Bids that include alternates.

    (a) The base bid must include all features essential to a sound and 
adequate building design. If it appears that funds available for a 
project may be insufficient to include all desired features in the base 
bid, you may issue a solicitation for a base bid and include one or more 
alternates in the order of priority. Use alternates only if they are 
clearly justified and involve substantial amounts of work in relation to 
the base bid. Their use must be limited and should involve only ``add'' 
alternates.
    (b) Before opening bids that include alternates, determine, and 
record in the contract file, the amount of funds available for the 
project. The amount recorded must be announced at the beginning of the 
bid opening. The amount is the controlling factor in determining the low 
bidder. This amount may be increased later when determining the 
alternate items to award to the low bidder if the following condition is 
met: the award amount of the base bid plus the combination of alternate 
items does not exceed the amount offered for the base bid and the same 
combination of alternate items by any other responsible bidder whose bid 
conforms to the solicitation. This requirement prevents the displacement 
of the low bidder by manipulating the alternates to be used.



Sec. 536.213-371  Bids that include options.

    (a) Subject to the limitations in paragraph (c) of this section, you 
may include options in contracts if it is in the Government's interest.
    (b) the appropriate use of options may include, but is not limited 
to, any of the following:
    (1) If additional work is anticipated but funds are not expected to 
be available at the time of award, and it would

[[Page 255]]

not be practicable to award a separate contract or to permit an 
additional contractor to work on the same site.
    (2) If fixed building equipment, e.g., elevators or escalators, will 
be installed under the construction contract and it is advantageous to 
have the installer of the equipment maintain and service the equipment 
during the warranty period.
    (c) You must not use options under any of the following conditions:
    (1) the prospective option represents known firm requirements for 
which funds are available unless competition for the option quantity is 
impracticable once the initial contract is awarded.
    (2) The contractor will incur undue risks; e.g., the price or 
availability of necessary materials or labor is not reasonably 
foreseeable.
    (d) Solicitations containing option provisions must state the period 
within which the options may be exercised.
    (e) Solicitations must state whether the basis of award is inclusive 
or exclusive of the options. Before issuing a solicitation that includes 
evaluated options, you must determine that there is reasonable certainty 
that funds will be made available to permit exercise of the option.



Sec. 536.213-372  Bids that include both alternates and options.

    (a) Solicitations may include both alternates and options if the 
conditions in 536.213-370, Bids that include alternates, and 536.213-
371, Bids that include options, are satisfied. In these solicitations, 
the low bidder for purposes of award is the responsible bidder offering 
the lowest aggregate price for the base bid and the alternates, in the 
order of priority listed in the solicitation, that provide the most work 
features within the funds available at bid opening, plus all options 
designated to be evaluated.
    (b) The basis of award may require the evaluation of options 
associated with alternates if the related alternate is selected.
    (c) Before opening bids that include both alternates and options, 
determine, and record in the contract file, the amount of funds 
available for the project (i.e., for the base bid and alternate work). 
The amount recorded must be announced at the beginning of the bid 
opening. This amount may be increased later when determining the 
alternate items to be awarded to the low bidder if the following 
condition is met: the award amount of the base bid and evaluated options 
plus the alternate items does not exceed the amount offered for the base 
bid, the evaluated options, and the same combination of alternate items 
by any other responsible bidder whose bid conforms to the solicitation.



Sec. 536.270  Exercise of options.

    (a) If exercising an option, notify the contractor, in writing, 
within the time period specified in the contract.
    (b) Exercise options only after determining that all the following 
conditions exist:
    (1) Funds are available.
    (2) The requirement covered by the option fulfills an existing 
Government need.
    (3) Exercising the option is the most advantageous method of 
satisfying the Government's need, price and other factors considered.
    (c) Before exercising an option, you must determine that the action 
complies with the option's terms and this section's requirements. 
Include your written determination in the contract file.
    (d) The contract modification, or other written document which 
notifies the contractor of the exercise of the option, must cite the 
option clause as authority. If exercising an unpriced or unevaluated 
option, cite the statutory authority permitting the use of other than 
full and open competition (see FAR 6.302 and 517.207).



Sec. 536.271  Project labor agreements.

    (a) Authority. This subpart implements the Presidential memorandum 
of June 5, 1997, on using project labor agreements (PLAs) on Federal 
construction projects. The Presidential memorandum authorizes executive 
departments and agencies to require PLAs on large and significant 
construction projects for facilities to be owned by a Federal department 
or agency.
    (b) Applicability. These policies and procedures apply to all GSA 
activities

[[Page 256]]

authorized to award contracts for construction of facilities to be owned 
by a Federal department or agency. You may use a PLA in leasehold 
arrangement, Federally funded projects, and other appropriate 
circumstances.
    (c) Definitions. Construction means construction, alteration, or 
repair (including dredging, excavating, and painting) of buildings, 
structures, or other real property. The terms buildings, structures, or 
other real property are defined further in Federal Acquisition 
Regulation (FAR) 36.102.
    Labor organization means a labor organization engaged in an industry 
affecting commerce, and any agent of such an organization, and includes 
any organization of any kind, and any agency, or employee representation 
committee, group, association, or plan so engaged in which employees 
participate and which exists for the purpose, in whole or in part, of 
dealing with employers concerning grievances, labor disputes, wages, 
rates of pay, hours, or other terms or conditions of employment, and any 
conference, general committee, joint or system board, or joint council 
so engaged which is subordinate to a national or international labor 
organization (42 U.S.C. 2000e(d)).
    Large and significant project means a Federal construction project 
with a total cost to the Federal Government of more than $5 million.
    Project Labor Agreement (PLA) means an agreement between the 
contractor, subcontractors, and the union(s) representing workers. Under 
a PLA, the contractor and subcontractors on a project and the union(s) 
agree on terms and conditions of employment for the project, 
establishing a framework for labor-management cooperation to advance the 
Government's procurement interest in cost, efficiency, and quality.
    (d) Policy. (1) You may, on a project-by-project basis, use a PLA on 
a large and significant project when both of the following conditions 
apply:
    (i) A PLA will advance the Government's procurement interests.
    (ii) No laws that apply to the specific construction project 
preclude the use of the PLA.
    (2) Do not require any contractor to enter into a PLA with any 
particular labor organization.
    (3) The use of a PLA is not intended to create any right or benefit, 
substantive or procedural enforceable by a nonfederal party against the 
United States, its departments, and agencies, its officers or employees, 
or any other person.
    (e) Procedures. (1) As part of procurement planning for construction 
projects with a total estimated cost to the Federal Government of more 
than $5 million, you may consider requiring a PLA.
    (2) To require a PLA, you must determine whether use of a PLA will 
advance the Government's procurement interests in all the following 
areas:
    (i) Cost, efficiency, and quality.
    (ii) Promoting labor-management stability.
    (iii) Promoting compliance with applicable legal requirements 
governing safety and health, equal employment opportunity, labor and 
employment standards, and other matters.
    (3) In making the determination required by paragraph (b) of this 
section, consult with the agency project or program manager and obtain 
guidance from the Agency Labor Advisor and assigned legal counsel. You 
should consider the following factors:
    (i) Whether past experience with construction projects in the 
location where the project will be performed indicates that a PLA will 
be effective.
    (ii) Whether delays in performance of the construction contract 
would have significant adverse impact on the mission of the agency or 
operation of the installation or facility.
    (iii) Whether any law applies to the specific construction project 
that would impede use of a PLA.
    (iv) Whether the labor organizations in the area can provide a 
reliable source of skilled, experienced building trades workers in all 
crafts needed on the job site for the project's duration (taking into 
consideration other major construction work in the area).
    (v) Whether the Government can benefit from uniform work rules and 
working conditions and established procedures for resolving labor 
disputes, no strike/no lock-out protections.
    (vi) Whether the Government can benefit from increased stability and

[[Page 257]]

labor peace that derives from greater labor-management cooperation.
    (vii) Whether the requirements for a PLA will unreasonably restrict 
competition.
    (viii) Other relevant information.
    (4) Document the rationale supporting your decision to require a PLA 
in the contract file.
    (5) Provide the following information to the Agency Labor Advisor 
(GSA Acquisition Policy Division (MVP)):
    (i) A brief description of the project.
    (ii) The estimated cost.
    (iii) A copy of the document supporting your decision to require a 
PLA.
    (iv) A copy of the solicitation.

                     Subpart 536.5_Contract Clauses



Sec. 536.570  Supplemental provisions and clauses.



Sec. 536.570-1  Definitions.

    Insert 552.236-70, Definitions, in solicitations and contracts if 
construction, dismantling, demolition, or removal of improvements is 
contemplated.



Sec. 536.570-2  Authorities and limitations.

    Insert 552.236-71, Authorities and Limitations, in solicitations and 
contracts if construction, dismantling, demolition, or removal of 
improvements is contemplated and the contract amount is expected to 
exceed the simplified acquisition threshold.



Sec. 536.570-3  Specialist.

    Insert 552.236-72, Specialist, in solicitations and contracts for 
construction if the technical sections of the contract require unusual 
experience or specialized facilities for adequate contract performance.



Sec. 536.570-4  Basis of award--construction contract.

    (a) Insert a provision substantially the same as 552.236-73, Basis 
of Award--Construction Contract, in solicitations for fixed-price 
construction contracts except if any of the following conditions apply:
    (1) The solicitation requires the submission of a lump-sum bid only.
    (2) The solicitation is for an indefinite quantity contract.
    (3) The contract amount is not expected to exceed the simplified 
acquisition threshold.
    (b) Instructions for use.

------------------------------------------------------------------------
     If the solicitation requests the
          submission of a . . .                  Then use the . . .
------------------------------------------------------------------------
(1) Base bid and unit prices.............  Basic provision.
(2) Base bid and options.................  Provision with its Alternate
                                            I.
(3) Base bid and alternates..............  Provision with its Alternate
                                            II.
(4) Base bid, alternates, and options....  Provision with its Alternate
                                            III.
------------------------------------------------------------------------



Sec. 536.570-5  Working hours.

    Insert 552.236-74, Working Hours, in solicitations and contracts if 
construction, dismantling, demolition, or removal of improvements is 
contemplated and the contract amount is expected to exceed the 
simplified acquisition threshold.



Sec. 536.570-6  Use of premises.

    Insert 552.236-75, Use of Premises, in solicitations and contracts 
if construction, dismantling, demolition, or removal of improvements is 
contemplated.



Sec. 536.570-7  Measurements.

    Insert 552.236-76, Measurements, in solicitations and contracts if 
construction, dismantling, demolition, or removal of improvements is 
contemplated.



Sec. 536.570-8  Specifications and drawings.

    Insert the clause at 552.236-77, Specifications and Drawings, in 
solicitations and contracts if construction, dismantling, demolition, or 
removal of improvements is contemplated and the contract amount is 
expected to exceed the simplified acquisition threshold.



Sec. 536.570-9  Shop drawings, coordination drawings, and schedules.

    Insert the clause at 552.236-78, Shop Drawings, Coordination 
Drawings, and Schedules, in solicitations and contracts if construction 
is contemplated and the contract amount is expected to exceed the 
simplified acquisition threshold.



Sec. 536.570-10  Samples.

    Insert the clause at 552.236-79, Samples, in solicitations and 
contracts for construction if the technical sections

[[Page 258]]

of the contract require the submission and approval of samples.



Sec. 536.570-11  Heat.

    Insert the clause at 552.236-80, Heat, in solicitations and 
contracts if construction, dismantling, demolition, or removal of 
improvements is contemplated.



Sec. 536.570-12  Use of equipment by the Government.

    Insert the clause at 552.236-81, Use of Equipment by the Government, 
in contracts requiring heating and air-conditioning of existing 
buildings if it may be necessary for the Government to operate all or 
part of the equipment before final acceptance of the contract.



Sec. 536.570-13  Subcontracts.

    Insert 552.236-82, Subcontracts, in solicitations and contracts for 
construction if the contract amount is expected to exceed the simplified 
acquisition threshold.



Sec. 536.570-14  Requirement for a Project Labor Agreement.

    Insert a clause substantially the same as 552.236-83, Requirement 
for a Project Labor Agreement, in solicitations and contracts that will 
require a project labor agreement.

                Subpart 536.6_Architect-Engineer Services



Sec. 536.602  Selection of firms for architect-engineer contracts.



Sec. 536.602-1  Selection criteria.

    (a) FAR 36.602-1 requires that agencies include ``location in the 
general geographical area of the project and knowledge of locality of 
the project'' as one of several selection criteria.
    (1) Do not use this evaluation factor as a minimum qualification 
requirement for determining whether a firm is eligible to compete for a 
proposed project.
    (2) This factor must not exceed 5 percent of the total weight of all 
evaluation criteria. In order to receive maximum score for this factor, 
the architect-engineer firm(s) must demonstrate that at least 35 percent 
of the architect-engineer contract services (based on the total contract 
price) will be accomplished within the geographical boundaries 
established for the project.
    (3) Under an approved class deviation from FAR 36.602-1(a)(5), this 
factor does not apply to projects that the Chief Architect of GSA 
determines have national significance.
    (b) The public announcement (Commerce Business Daily notice) for a 
proposed project should identify the general geographical area of the 
project by either:
    (1) A radius in miles or other appropriate unit of measure.
    (2) The Standard Metropolitan Statistical Area, county(ies), 
state(s) surrounding the project, or other appropriate geographic 
boundaries.
    (c) Architect-engineer selections under the Design Excellence 
Program must apply the geographical evaluation criteria in the second 
phase.
    (d) The public announcement (Commerce Business Daily notice) must 
provide the number of calendar days the architect-engineer of record has 
to establish a production capability within the general geographical 
area of the project. You may allow the architect-engineer of record up 
to 45 calendar days after contract award to establish this production 
capability.

[65 FR 11247, Mar. 2, 2000]

                      PART 537_SERVICE CONTRACTING

                 Subpart 537.1_Service Contracts_General

Sec.

Sec. 537.110 Solicitation provisions and contract clauses.

             Subpart 537.2_Advisory and Assistance Services


Sec. 537.201 Definitions.

Sec. 537.270 Contract clause.

    Authority: 40 U.S.C. 121(c).

    Source: 64 FR 37226, July 9, 1999, unless otherwise noted.

[[Page 259]]

                 Subpart 537.1_Service Contracts_General



Sec. 537.110  Solicitation provisions and contract clauses.

    The following provision and clauses apply to contracts for building 
services:
    (a) If the contract is expected to exceed the simplified acquisition 
threshold and it is not initiated with Ability One under the Javits-
Wagner-O'Day Act:
    (1) Insert 552.237-70, Qualifications of Offerors, in the 
solicitation.
    (2) Insert 552.237-71, Qualifications of Employees, in the 
solicitation and contract. If needed, use supplemental provisions or 
clauses to describe specific requirements for employees performing work 
on the contract.
    (b) Insert 552.237-72, Prohibition Regaring ``Quasi-Military Armed 
Forces,'' in solicitations and contracts for guard service.

[65 FR 41379, July 5, 2000, as amended at 74 FR 20606, May 5, 2009]

             Subpart 537.2_Advisory and Assistance Services



Sec. 537.201  Definitions.

    As used in this subpart--
    Evaluation or analysis of a proposal means proposal evaluation as 
described in FAR 15.305. It includes: Cost or price evaluation using 
cost or price analysis, as defined in FAR 15.404.
    Proposal means a proposal submitted for an initial contract award. 
(See FAR 37.203(d)). It does not include proposals submitted after 
contract award, such as value engineering proposals, proposals related 
to contract modifications, claims, or other contract administration 
actions.
    Readily available means that employees with the requisite training 
and capability are employed by the agency, capable of handling 
additional work relating to other duties as assigned by management, and 
that the travel and other costs associated with using covered personnel 
does not exceed the projected cost of a contract for evaluation and 
analysis services.
    Requisite training and capability means training and capability 
necessary to successfully perform the task or contract at issue in the 
time and in the manner required. It may include relevant experience, 
recent performance of work of similar size and scope, specific training 
and other factors that the contracting officer determines are necessary 
to the successful performance of the task or contract at issue.

[74 20606, May 5, 2009]



Sec. 537.270  Contract clause.

    Insert the clause at 552.237-73, Restriction on Disclosure of 
Information, in solicitations and contracts for proposal evaluation and 
analysis services.

              PART 538_FEDERAL SUPPLY SCHEDULE CONTRACTING

  Subpart 538.2_Establishing and Administering Federal Supply Schedules

Sec.

Sec. 538.270 Evaluation of multiple award schedule (MAS) offers.

Sec. 538.271 MAS contract awards.

Sec. 538.272 MAS price reductions.

Sec. 538.273 Contract clauses.

                  Subpart 538.70_Cooperative Purchasing


Sec. 538.7000 Scope of subpart.

Sec. 538.7001 Definitions.

Sec. 538.7002 General.

Sec. 538.7003 Policy.

Sec. 538.7004 Solicitation provisions and contract clauses.

                   Subpart 538.71_Recovery Purchasing


Sec. 538.7100 Scope of subpart.

Sec. 538.7101 Definitions.

Sec. 538.7102 General.

Sec. 538.7103 Policy.

Sec. 538.7104 Solicitation provisions and contract clauses.

    Authority: 40 U.S.C. 121(c).

    Source: 64 FR 37227, July 9, 1999, unless otherwise noted.

    Editorial Note: Nomenclature changes to part 538 appear at 69 FR 
28065, May 18, 2004.

  Subpart 538.2_Establishing and Administering Federal Supply Schedules



Sec. 538.270  Evaluation of multiple award schedule (MAS) offers.

    (a) The Government will seek to obtain the offeror's best price (the 
best

[[Page 260]]

price given to the most favored customer). However, the Government 
recognizes that the terms and conditions of commercial sales vary and 
there may be legitimate reasons why the best price is not achieved.
    (b) Establish negotiation objectives based on a review of relevant 
data and determine price reasonableness.
    (c) When establishing negotiation objectives and determining price 
reasonableness, compare the terms and conditions of the MAS solicitation 
with the terms and conditions of agreements with the offeror's 
commercial customers. When determining the Government's price 
negotiation objectives, consider the following factors:
    (1) Aggregate volume of anticipated purchases.
    (2) The purchase of a minimum quantity or a pattern of historic 
purchases.
    (3) Prices taking into consideration any combination of discounts 
and concessions offered to commercial customers.
    (4) Length of the contract period.
    (5) Warranties, training, and/or maintenance included in the 
purchase price or provided at additional cost to the product prices.
    (6) Ordering and delivery practices.
    (7) Any other relevant information, including differences between 
the MAS solicitation and commercial terms and conditions that may 
warrant differentials between the offer and the discounts offered to the 
most favored commercial customer(s). For example, an offeror may incur 
more expense selling to the Government than to the customer who receives 
the offeror's best price, or the customer (e.g., dealer, distributor, 
original equipment manufacturer, other reseller) who receives the best 
price may perform certain value-added functions for the offeror that the 
Government does not perform. In such cases, some reduction in the 
discount given to the Government may be appropriate. If the best price 
is not offered to the Government, you should ask the offeror to identify 
and explain the reason for any differences. Do not require offerors to 
provide detailed cost breakdowns.
    (d) You may award a contract containing pricing which is less 
favorable than the best price the offeror extends to any commercial 
customer for similar purchases if you make a determination that both of 
the following conditions exist:
    (1) The prices offered to the Government are fair and reasonable, 
even though comparable discounts were not negotiated.
    (2) Award is otherwise in the best interest of the Government.



Sec. 538.271  MAS contract awards.

    (a) MAS awards will be for commercial items as defined in FAR 2.101. 
Negotiate contracts as a discount from established catalog prices.
    (b) Before awarding any MAS contract, determine that the offered 
prices are fair and reasonable (see FAR subpart 15.4 and 538.270). 
Document the negotiation and your determination using FAR 15.406-3 as 
guidance.
    (c) State clearly in the award document the price/discount 
relationship between the Government and the identified commercial 
customer (or category of customers) on which the award is predicated.



Sec. 538.272  MAS price reductions.

    (a) Section 552.238-75, Price Reductions, requires the contractor to 
maintain during the contract period the negotiated price/discount 
relationship (and/or term and condition relationship) between the 
eligible ordering activities and the offeror's customer or category of 
customers on which the contract award was predicated (see 538.271(c)). 
If a change occurs in the contractor's commercial pricing or discount 
arrangement applicable to the identified commercial customer (or 
category of customers) that results in a less advantageous relationship 
between the eligible ordering activities and this customer or category 
of customers, the change constitutes a ``price reduction.''
    (b) Make sure that the contractor understands the requirements of 
section 552.238-75 and agrees to report to you all price reductions as 
provided for in the clause.

[64 FR 37227, July 9, 1999, as amended at 68 FR 24378, May 7, 2003]

[[Page 261]]



Sec. 538.273  Contract clauses.

    (a) Multiple award schedules. Insert in solicitations and contracts:
    (1) 552.238-70, Identification of Electronic Office Equipment 
Providing Accessibility for the Handicapped, if you include electronic 
office equipment items.
    (2) 552.238-71, Submission and Distribution of Authorized FSS 
Schedule Pricelists.
    (i) Use Alternate I, in solicitations and contracts for--
    (A) Federal Supply Schedule 70;
    (B) The Consolidated Schedule contracts containing information 
technology Special Item Numbers;
    (C) Federal Supply Schedule 84; and
    (D) Federal Supply Schedules for recovery purchasing (see 538.7102), 
use Alternate I.
    (ii) If GSA is not prepared to accept electronic submissions for a 
particular schedule delete--
    (A) The paragraph identifier ``(i)'' in (b)(1) and the word ``and'' 
at the end of paragraph (b)(1)(i); and
    (B) Paragraphs (b)(1)(ii) and (b)(3).
    (3) 552.238-72, Identification of Products That Have Environmental 
Attributes.
    (4) 552.238-73, Cancellation.
    (b) Multiple and single award schedules. Insert in solicitations and 
contracts:
    (1) 552.238-74, Industrial Funding Fee and Sales Reportings.
    (2) 552.238-75, Price Reductions. Use Alternate I in solicitations 
and contracts for--
    (i) Federal Supply Schedule 70;
    (ii) The Consolidated Schedule containing information technology 
Special Item Numbers;
    (iii) Federal Supply Schedule 84; and
    (iv) Federal Supply Schedules for recovery purchasing (see 
538.7102).

[64 FR 37227, July 9, 1999, as amended at 68 FR 24378, May 7, 2003; 68 
FR 41288, July 11, 2003; 68 FR 52128, Sept. 2, 2003; 72 FR 4652, Feb. 1, 
2007; 73 FR 54338, Sept. 19, 2008]

                  Subpart 538.70_Cooperative Purchasing

    Source: 68 FR 24378, May 7, 2003, unless otherwise noted.



Sec. 538.7000  Scope of subpart.

    This subpart prescribes policies and procedures that implement 
statutory provisions authorizing non-federal organizations to use--
    (a) Federal Supply Schedule 70;
    (b) The Consolidated Schedule contracts containing information 
technology Special Item Numbers (SINs); and
    (c) Federal Supply Schedule 84.

[73 FR 54338, Sept. 19, 2008]



Sec. 538.7001  Definitions.

    Ordering activity (also called ``ordering agency'' and ``ordering 
office'') means an eligible ordering activity (see 552.238-78) 
authorized to place orders under Federal supply schedule contracts.
    Schedule 70, as used in this subpart, means Schedule 70 information 
technology contracts, and Consolidated Products and Services Schedule 
contracts containing information technology SINs. The Consolidated 
Products and Services Schedule is a compilation of multiple individual 
Federal Supply Schedules; therefore, only the SINs that fall under 
Schedule 70 of the Consolidated Products and Services Schedule will 
apply to Cooperative Purchasing. No other Schedules, or SINs, containing 
information technology outside of Schedule 70 SINs, and Consolidated 
Products and Services Schedule contracts containing Schedule 70 SINs, 
will apply.
    Schedule 84 means the Federal Supply Schedule for alarm and signal 
systems, facility management systems, firefighting and rescue equipment, 
law enforcement and security equipment, marine craft and related 
equipment, special purpose clothing, and related services (as contained 
in Federal Supply Classification Code Group 84 or any amended or 
subsequent version of that Federal supply classification group).
    State and local government entities, as used in this subpart, means 
the states of the United States, counties, municipalities, cities, 
towns, townships, tribal governments, public authorities (including 
public or Indian housing agencies under the United States Housing Act of 
1937), school districts, colleges

[[Page 262]]

and other institutions of higher education, council of governments 
(incorporated or not), regional or interstate government entities, or 
any agency or instrumentality of the preceding entities (including any 
local educational agency or institution of higher education), and 
including legislative and judicial departments. The term does not 
include contractors of, or grantees of, State or local governments.
    (1) Local educational agency has the meaning given that term in 
section 8013 of the Elementary and Secondary Education Act of 1965 (20 
U.S.C. 7713).
    (2) Institution of higher education has the meaning given that term 
in section 101(a) of the Higher Education Act of 1965 (20 U.S.C. 
1001(a)).
    (3) Tribal government means--
    (i) The governing body of any Indian tribe, band, nation, or other 
organized group or community located in the continental United States 
(excluding the State of Alaska) that is recognized as eligible for the 
special programs and services provided by the United States to Indians 
because of their status as Indians; and
    (ii) Any Alaska Native regional or village corporation established 
pursuant to the Alaska Native Claims Settlement Act (43 U.S.C. 1601 et 
seq.).

[68 FR 24378, May 7, 2003, as amended at 73 FR 54338, Sept. 19, 2008]



Sec. 538.7002  General.

    (a) 40 U.S.C. 501, (the Act) authorizes the Administrator of General 
Services to procure and supply personal property and nonpersonal 
services for the use of Executive agencies. Under 40 U.S.C. 502, the 
goods and services available to executive agencies are also available to 
mixed ownership Government corporations, establishments within the 
legislative or judicial branches of Government (excepting the Senate, 
House of Representatives, Architect of the Capitol, and any activities 
under the direction of the Architect of the Capitol), the District of 
Columbia, and Qualified Non-profit Agencies.
    (b) Section 211 of the E-Government Act of 2002 amends 40 U.S.C. 502 
to authorize the Administrator of General Services to provide for use of 
certain Federal supply schedules of the GSA by a State or local 
government, which includes any State, local, regional, or tribal 
government, or any instrumentality thereof (including any local 
educational agency or institution of higher education).
    (c) Pub.L. 110-248, The Local Preparedness Acquisition Act, 
authorizes the Administrator of General Services to provide for the use 
by state or local governments of Federal Supply Schedules of the General 
Services Administration (GSA) for alarm and signal systems, facility 
management systems, firefighting and rescue equipment, law enforcement 
and security equipment, marine craft and related equipment, special 
purpose clothing, and related services (as contained in Schedule 84).
    (d) State and local governments are authorized to procure from 
Schedule 70 contracts, Consolidated Schedule contracts containing 
information technology SINs, and Schedule 84 contracts. A listing of the 
participating contractors and SINs for the products and services that 
are available through Schedule 70 contracts, the Consolidated Schedule 
contracts containing information technology SINs, and Schedule 84 
contracts, is available in GSA's Schedules e-Library at www.gsa.gov/
elibrary. Click on Schedules e-Library, and under Cooperative 
Purchasing, click on ``View authorized vendors.'' The contractors and 
the products and services available for Cooperative Purchasing will be 
labeled with the Cooperative Purchasing icon.

[68 FR 24378, May 7, 2003, as amended at 73 FR 54338, Sept. 19, 2008]



Sec. 538.7003  Policy.

    Preparing solicitations when schedules are open to eligible non-
federal entities. When opening Schedule 70, the Consolidated Schedule 
containing information technology SINs, and Schedule 84, for use by 
eligible non-federal entities, the contracting officer must make minor 
modifications to certain Federal Acquisition Regulation and GSAM 
provisions and clauses in order to make clear distinctions between the 
rights and responsibilities of the U.S. Government in its management and 
regulatory capacity pursuant to which it awards schedule contracts and 
fulfills associated Federal requirements versus

[[Page 263]]

the rights and responsibilities of eligible ordering activities placing 
orders to fulfill agency needs. Accordingly, the contracting officer is 
authorized to modify the following FAR provisions/clauses to delete 
``Government'' or similar language referring to the U.S. Government and 
substitute ``ordering activity'' or similar language when preparing 
solicitations and contracts to be awarded under Schedule 70, and the 
Consolidated Schedule containing information technology SINs, and 
Schedule 84. When such changes are made, the word ``(DEVIATION)'' shall 
be added at the end of the title of the provision or clause. These 
clauses include but are not limited to:
    (a) 52.212-4, Contract Terms and Conditions--Commercial Items.
    (b) 52.216-18, Ordering.
    (c) 52.216-19, Order Limitations.
    (d) 52.229-1, State and Local Taxes.
    (e) 52.229-3, Federal, State, and Local Taxes.
    (f) 52.232-7, Payments Under Time-and-Materials and Labor-Hour 
Contracts.
    (g) 52.232-17, Interest.
    (h) 52.232-19, Availability of Funds for the Next Fiscal Year.
    (i) 52.232-34, Payment by Electronic Funds Transfer--Other than 
Central Contractor Registration
    (j) 52.232-36, Payment by Third Party.
    (k) 52.237-3, Continuity of Services.
    (l) 52.246-4, Inspection of Services-Fixed Price.
    (m) 52.246-6, Inspection-Time-and-Material and Labor-Hour.
    (n) 52.247-34, F.O.B. Destination.
    (o) 52.247-38, F.O.B. Inland Carrier Point of Exportation.

[68 FR 24378, May 7, 2003, as amended at 73 FR 54338, Sept. 19, 2008]



Sec. 538.7004  Solicitation provisions and contract clauses.

    (a) The contracting officer shall insert the clause at 552.238-77, 
Definition (Federal Supply Schedules), in solicitations and contracts 
for--
    (1) Schedule 70;
    (2) The Consolidated Schedule containing information technology 
SINs; and
    (3) Schedule 84.
    (b) The contracting officer shall insert the clause at 552.238-78, 
Scope of Contract (Eligible Ordering Activities), in solicitations and 
contracts for--
    (1) Schedule 70; and
    (2) The Consolidated Schedule containing information technology 
SINs; and
    (3) Schedule 84.
    (c) The contracting officer shall insert the clause at 552.238-79, 
Use of Federal Supply Schedule Contracts by Certain Entities--
Cooperative Purchasing, in solicitations and contracts for--
    (1) Schedule 70;
    (2) The Consolidated Schedule containing information technology 
SINs; and
    (3) Schedule 84.
    (d) See 552.101-70 for authorized FAR deviations.

[73 FR 54339, Sept. 19, 2008]

                   Subpart 538.71_Recovery Purchasing

    Source: 72 FR 4653, Feb. 1, 2007, unless otherwise noted.



Sec. 538.7100  Scope of subpart.

    This subpart prescribes policies and procedures to implement the 
John Warner National Defense Authorization Act for Fiscal Year 2007 
(Pub. L. 109-364) authorizing non-federal organizations to use Federal 
Supply Schedule contracts to purchase products and services to be used 
for recovery from major disasters, terrorism or nuclear, biological, 
chemical, or radiological attack.



Sec. 538.7101  Definitions.

    The definitions in subsection 538.7001 shall apply for purposes of 
this subpart.



Sec. 538.7102  General.

    (a) Section 833 of the John Warner National Defense Authorization 
Act for Fiscal Year 2007 (Pub. L. 109-364) amends 40 U.S.C. 502 to 
authorize the Administrator of General Services to provide to State and 
local governments the use of Federal Supply Schedules of the GSA for 
purchase of products and services to be used to facilitate recovery from 
a major disaster declared by the President under the Robert T. Stafford 
Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121 et seq.) or 
to

[[Page 264]]

facilitate recovery from terrorism or nuclear, biological, chemical, or 
radiological attack. Section 833 requires the Secretary of Homeland 
Security to determine which products and services qualify before the 
Administrator provides for the use of the Federal Supply Schedules. Use 
of Federal supply schedules by State and local governments is voluntary. 
Agreement of a schedule contractor to offer recovery purchasing under 
the contract and acceptance of any order for recovery purchasing from a 
State or local government is voluntary.
    (b) State and local governments are authorized to use Federal Supply 
Schedules to procure products and services determined by the Secretary 
of Homeland Security to be used to facilitate recovery from major 
disasters, terrorism, or nuclear, biological, chemical, or radiological 
attack. A listing of the Federal Supply Schedules for the products and 
services is available in GSA's Schedules e-Library at Web site http://
www.gsaelibrary.gsa.gov. Click on the link, ``Disaster Recovery 
Purchasing, State and Local.'' The participating contractors and the 
products and services available for recovery purchasing will be labeled 
with the Disaster Recovery Purchasing ICON.
    (c) State and local governments that wish to use the Federal Supply 
Schedules to facilitate recovery from major disasters or attacks are 
responsible for ensuring that only authorized representatives of their 
governments place orders against these schedules and that procured 
products and services are used only for the purposes authorized by 
Section 833 of Public Law 109-364.



Sec. 538.7103  Policy.

    Preparing solicitations when schedules are open to eligible non-
federal entities. When opening the Federal Supply Schedules for products 
and services determined by the Secretary of Homeland Security, for use 
by eligible non-federal entities, the contracting officer must make 
minor modifications to certain Federal Acquisition Regulation (FAR) and 
GSAM provisions and clauses in order to make clear distinctions between 
the rights and responsibilities of the U.S. Government in its management 
and regulatory capacity pursuant to which it awards schedule contracts 
and fulfills associated Federal requirements versus the rights and 
responsibilities of eligible ordering activities placing orders to 
fulfill agency needs. Accordingly, the contracting officer is authorized 
to modify the following FAR provisions/clauses to delete ``Government'' 
or similar language referring to the U.S. Government and substitute 
``ordering activity'' or similar language when preparing solicitations 
and contracts to be awarded under the Federal Supply Schedules for 
products and services determined by the Secretary of Homeland Security. 
When such changes are made, the word ``(DEVIATION)'' shall be added at 
the end of the title of the provision or clause. These clauses include 
but are not limited to--
    (a) 52.212-4, Contract Terms and Conditions--Commercial Items.
    (b) 52.216-18, Ordering.
    (c) 52.216-19, Order Limitations.
    (d) 52.229-1, State and Local Taxes.
    (e) 52.229-3, Federal, State, and Local Taxes.
    (f) 52.232-7, Payments Under Time-and-Materials and Labor-Hour 
Contracts.
    (g) 52.232-17, Interest.
    (h) 52.232-19, Availability of Funds for the Next Fiscal Year.
    (i) 52.232-34, Payment by Electronic Funds Transfer--Other than 
Central Contractor Registration.
    (j) 52.232-36, Payment by Third Party.
    (k) 52.237-3, Continuity of Services.
    (l) 52.246-4, Inspection of Services-Fixed Price.
    (m) 52.246-6, Inspection-Time-and-Material and Labor-Hour.
    (n) 52.247-34, F.O.B. Destination.
    (o) 52.247-38, F.O.B. Inland Carrier Point of Exportation.



Sec. 538.7104  Solicitation provisions and contract clauses.

    (a) The contracting officer shall insert the clause at 552.238-76, 
Definition (Federal Supply Schedules)--Recovery Purchasing, in Federal 
Supply Schedule solicitations and contracts which contain products and 
services determined by the Secretary of Homeland Security to facilitate 
recovery from major disasters, terrorism, or nuclear,

[[Page 265]]

biological, chemical, or radiological attack.
    (b) The contracting officer shall insert the clause at 552.238-78, 
Scope of Contract (Eligible Ordering Activities), with Alternate I in 
Federal Supply Schedule solicitations and contracts which contain 
products and services determined by the Secretary of Homeland Security 
to facilitate recovery from major disasters, terrorism, or nuclear, 
biological, chemical, or radiological attack.
    (c) The contracting officer shall insert the clause at 552.238-80, 
Use of Federal Supply Schedule Contracts by Certain Entities--Recovery 
Purchasing, in Federal Supply Schedule solicitations and contracts which 
contain products and services determined by the Secretary of Homeland 
Security that facilitate recovery from major disasters, terrorism, or 
nuclear, biological, chemical, or radiological attack.
    (d) See 552.101-70 for authorized Federal Acquisition Regulation 
deviations.

[[Page 266]]

                    SUBCHAPTER G_CONTRACT MANAGEMENT

                PART 541_ACQUISITION OF UTILITY SERVICES

       Subpart 541.5_Solicitation Provisions and Contract Clauses

Sec.

Sec. 541.501 Solicitation provision and contract clauses.

    Authority: 40 U.S.C. 121(c).

       Subpart 541.5_Solicitation Provisions and Contract Clauses



Sec. 541.501  Solicitation provisions and contract clauses.

    In addition to the solicitation terms, provisions and contract 
clauses at FAR 41.501(c), the contracting officer shall include the 
following clauses--
    (a) 552.241-70, Availability of Funds for the Next Fiscal Year or 
Quarter. As prescribed in 541.501, insert the clause 552.241-70, 
Availability of Funds for the Next Fiscal Year or Quarter, instead of 
FAR 52.232-19, in all utility acquisitions; and
    (b) 552.241-71, Disputes (Utility Contracts). As prescribed in 
541.501, insert clause 552.241-71, Disputes (Utility Contracts), in 
solicitations and contracts for utility services subject to the 
jurisdiction and regulation of a utility rate commission.

[75 FR 48873, Aug. 12, 2010]

           PART 542_CONTRACT ADMINISTRATION AND AUDIT SERVICES

          Subpart 542.11_Production Surveillance and Reporting

Sec.

Sec. 542.1107 Contract clause.

    Authority: 40 U.S.C. 121(c).

    Source: 64 FR 37228, July 9, 1999, unless otherwise noted.

          Subpart 542.11_Production Surveillance and Reporting



Sec. 542.1107  Contract clause.

    The contracting officer shall insert 552.242-70, Status Report of 
Orders and Shipments, in solicitations and indefinite quantity and 
requirements contracts for Stock or Special Order Program items. The 
clause may be used in indefinite-delivery definite-quantity contracts 
for Stock or Special Order Program items when close monitoring is 
necessary because numerous shipments are involved.

[74 FR 863, Jan. 9, 2009]

                     PART 543_CONTRACT MODIFICATIONS

    Authority: 40 U.S.C. 486(c).

    Source: 64 FR 37228, July 9, 1999, unless otherwise noted.

                       Subpart 543.2_Change Orders



Sec. 543.205  Contract clauses.

    The contracting officer shall insert 552.243-71, Equitable 
Adjustments, in solicitations and contracts containing FAR 52.243-4, 
Changes.

[74 FR 864, Jan. 9, 2009]

                       PART 546_QUALITY ASSURANCE

                     Subpart 546.3_Contract Clauses

Sec.

Sec. 546.302 Fixed-price supply contracts.

Sec. 546.302-70 Source inspection by Quality Approved Manufacturer for 
          fixed-price supply contracts.

Sec. 546.302-71 Source inspection.

Sec. 546.302-72 Destination inspection.

Sec. 546.312 Construction contracts.

                        Subpart 546.7_Warranties


Sec. 546.708 Warranties of data.

Sec. 546.710 Contract clause.

    Authority: 40 U.S.C. 121(c).

    Source: 64 FR 37228, July 9, 1999, unless otherwise noted.

[[Page 267]]

                     Subpart 546.3_Contract Clauses



Sec. 546.302  Fixed-price supply contracts.



Sec. 546.302-70  Source inspection by Quality Approved Manufacturer for 
          fixed-price supply contracts.

    (a) For solicitations issued and contracts awarded by FAS that will 
exceed the simplified acquisition threshold and include the clause at 
52.246-2, Inspection of Supplies--Fixed-Price:
    (1) The contracting officer shall insert the clause at 552.246-70, 
Source Inspection by Quality Approved Manufacturer, in solicitations and 
contracts that provide for source inspection for the Stock and Special 
Order Programs.
    (2) The contracting officer may authorize inspection and testing at 
manufacturing plants or other facilities located outside the United 
States, Puerto Rico, or the U.S. Virgin Islands, under paragraph (a)(1) 
of the clause at 552.246-70 under any of the circumstances listed below 
after coordinating the authorization with QVOC and documenting the 
authorization in the file.
    (i) Inspection services are available from another Federal agency 
with primary inspection responsibility in the geographic area.
    (ii) An inspection interchange agreement exists with another agency 
for inspection at a contractor's plant.
    (iii) Other considerations will ensure more economical and effective 
inspection consistent with the Government's interest.
    (b) When the estimated value of the acquisition is below the 
simplified acquisition threshold and will include the clause at 52.246-
2, Inspection of Supplies--Fixed-Price, insert the clause at 552.246-70, 
Source Inspection by Quality Approved Manufacturer only:
    (1) In solicitations and contracts that support the Wildfire 
program.
    (2) In contracts when a pattern of acquisitions demonstrates an 
ongoing relationship with the contractor.

[74 FR 26108, June 1, 2009]



Sec. 546.302-71  Source inspection.

    For solicitations and contracts issued by FAS, if Government 
personnel at the source will perform inspection, insert 552.246-71, 
Source Inspection by Government.

[64 FR 37228, July 9, 1999, as amended at 74 FR 26108, June 1, 2009]



Sec. 546.302-72  Destination inspection.

    The contracting officer shall include the clause at 552.246-78, 
Inspection at Destination (JUL 09)in supply contracts that require 
inspection at destination.

[74 FR 26108, June 1, 2009]



Sec. 546.312  Construction contracts.

    Insert the clause at 552.246-72, Final Inspection and Tests, in 
solicitations and contracts for construction that include FAR 52.246-12, 
Inspection of Construction.

                        Subpart 546.7_Warranties



Sec. 546.708  Warranties of data.

    (a) The contracting officer shall use warranties of data only when 
both of the following conditions are applicable:
    (1) Use of a warranty is in the Government's interest and is 
documented; and
    (2) The contracting director concurs with the decision.
    (b) The contracting officer shall consult with the technical or 
specification manager responsible for developing any warranties of data.

[74 FR 26108, June 1, 2009]



Sec. 546.710  Contract clause.

    The Contracting officer shall insert the clause at 552.246-77, 
Additional Contract Warranty Provisions for Supplies of a Noncomplex 
Nature, when using the clause at 52.246-17 in solicitations and 
contracts.

[74 FR 26108, June 1, 2009]

                           PART 547 [RESERVED]

                    PART 549_TERMINATION OF CONTRACTS

    Authority: 40 U.S.C. 121(c).

Subpart 549.5 [Reserved]

[[Page 268]]

                     SUBCHAPTER H_CLAUSES AND FORMS

          PART 552_SOLICITATION PROVISIONS AND CONTRACT CLAUSES

Sec.

Sec. 552.000 Scope of part.

       Subpart 552.1_Instructions for Using Provisions and Clauses


Sec. 552.101-70 Using part 552.

Sec. 552.102 Incorporating provisions and clauses.

Sec. 552.103 Identification of provisions and clauses.

Sec. 552.104 Procedures for modifying and completing provisions and 
          clauses.

Sec. 552.105 Procedures for using alternates.

Sec. 552.107-70 Provisions and clauses prescribed in subpart 552.1.

              Subpart 552.2_Text of Provisions and Clauses


Sec. 552.200 Scope of subpart.

Sec. 552.203-71 Restriction on Advertising.

Sec. 552.211-70--522.211-71 [Reserved]

Sec. 552.211-72 Reference to Specifications in Drawings.

Sec. 552.211-73 Marking.

Sec. 552.211-74 [Reserved]

Sec. 552.211-75 Preservation, Packaging and Packing.

Sec. 552.211-76 Charges for packaging, packing, and marking.

Sec. 552.211-77 Packing List.

Sec. 552.211-78 [Reserved]

Sec. 552.211-79 Acceptable Age of Supplies.

Sec. 552.211-80 Age on Delivery.

Sec. 552.211-81 Time of Shipment.

Sec. 552.211-82 [Reserved]

Sec. 552.211-83 Availability for Inspection, Testing, and Shipment/
          Delivery.

Sec. 552.211-84 [Reserved]

Sec. 552.211-85 Consistent pack and package requirements.

Sec. 552.211-86 Maximum weight per shipping container.

Sec. 552.211-87 Export packing.

Sec. 552.211-88 Vehicle export preparation.

Sec. 552.211-89 Non-manufactured wood packaging material for export.

Sec. 552.211-90 Small parts.

Sec. 552.211-91 Vehicle decals, stickers, and data plates.

Sec. 552.211-92 Radio Frequency Identification (RFID) using passive 
          tags.

Sec. 552.211-93 Unique Item Identification (UID).

Sec. 552.211-94 Time of delivery.

Sec. 552.212-4 Contract Terms and Conditions--Commercial Items

Sec. 552.212-70 [Reserved]

Sec. 552.212-71 Contract Terms and Conditions Applicable to GSA 
          Acquisition of Commercial Items.

Sec. 552.212-72 Contract Terms and Conditions Required To Implement 
          Statutes or Executive Orders Applicable to GSA Acquisition of 
          Commercial Items.

Sec. 552.212-73 [Reserved]

Sec. 552.214-70 ``All or None'' Bids.

Sec. 552.214-71 Progressive Awards and Monthly Quantity Allocations.

Sec. 552.214-72 Bid Sample Requirements.

Sec. 552.215-70 Examination of Records by GSA.

Sec. 552.215-71 Examination of Records by GSA (Multiple Award Schedule).

Sec. 552.215-72 Price Adjustment--Failure To Provide Accurate 
          Information.

Sec. 552.216-70 Economic Price Adjustment--FSS Multiple Award Schedule 
          Contracts.

Sec. 552.216-71 Economic Price Adjustment--Special Order Program 
          Contracts.

Sec. 552.216-72 Placement of Orders.

Sec. 552.216-73 Ordering Information.

Sec. 552.216-74 Task-Order and Delivery-Order Ombudsman.

Sec. 552.217-70 Evaluation of Options.

Sec. 552.217-71 Notice Regarding Option(s).

Sec. 552.219-70 Allocation of Orders--Partially Set-Aside Items.

Sec. 552.219-71 Notice to Offerors of Subcontracting Plan Requirements.

Sec. 552.219-72 Preparation, Submission, and Negotiation of 
          Subcontracting Plans.

Sec. 552.219-73 Goals for Subcontracting Plan.

Sec. 552.219-74 Section 8(a) Direct Award.

Sec. 552.219-75 GSA Mentor-Prot[eacute]g[eacute] Program.

Sec. 552.219-76 Mentor Requirements and Evaluation.

Sec. 552.223-70 Hazardous Substances.

Sec. 552.223-71 Nonconforming Hazardous Materials.

Sec. 552.223-72 Hazardous Material Information.

Sec. 552.227-70 Government Rights (Unlimited).

Sec. 552.227-71 Drawings and Other Data To Become Property of 
          Government.

Sec. 552.228-5 Government as Additional Insured.

Sec. 552.229-70 Federal, State, and Local Taxes.

Sec. 552.229-71 Federal Excise Tax--DC Government.

Sec. 552.232-1 Payments.

Sec. 552.232-23 Assignment of Claims.

Sec. 552.232-25 Prompt Payment.

Sec