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



[[Page 1]]

          

          48


          Chapters 7 to 14

                         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 7--Agency for International Development            3
          Chapter 8--Department of Veterans Affairs                141
          Chapter 9--Department of Energy                          293
          Chapter 10--Department of the Treasury                   575
          Chapter 12--Department of Transportation                 591
          Chapter 13--Department of Commerce                       655
          Chapter 14--Department of the Interior                   761
  Finding Aids:
      Table of CFR Titles and Chapters........................     831
      Alphabetical List of Agencies Appearing in the CFR......     851
      List of CFR Sections Affected...........................     861

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

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

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

[[Page v]]



                               EXPLANATION

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

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

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

LEGAL STATUS

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

HOW TO USE THE CODE OF FEDERAL REGULATIONS

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

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

OMB CONTROL NUMBERS

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

[[Page 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 
volumes. For the period beginning January 1, 2001, a ``List of CFR 
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 
editorially to indicate that a portion of the CFR was left vacant and 
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 
valid, the Director of the Federal Register must approve it. The legal 
effect of incorporation by reference is that the material is treated as 
if it were published in full in the Federal Register (5 U.S.C. 552(a)). 
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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CFR INDEXES AND TABULAR GUIDES

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separate volume, revised annually as of January 1, entitled CFR Index 
and Finding Aids. This volume contains the Parallel Table of Authorities 
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alphabetical list of agencies publishing in the CFR are also included in 
this volume.
    An index to the text of ``Title 3--The President'' is carried within 
that volume.

[[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

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

INQUIRIES

    For a legal interpretation or explanation of any regulation in this 
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the top of odd-numbered pages.
    For inquiries concerning CFR reference assistance, call 202-741-6000 
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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, Robert J. Sheehan, III was Chief Editor. The Code 
of Federal Regulations publication program is under the direction of 
Michael L. White, assisted by Ann Worley.

[[Page 1]]



            TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM




                  (This book contains chapters 7 to 14)

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

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

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

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

chapter 10--Department of the Treasury......................        1033

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

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

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

[[Page 3]]



             CHAPTER 7--AGENCY FOR INTERNATIONAL DEVELOPMENT




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


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

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

[[Page 4]]

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

[Reserved]

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

[[Page 5]]

                          SUBCHAPTER A_GENERAL

             PART 701_FEDERAL ACQUISITION REGULATION SYSTEM

               Subpart 701.1_Purpose, Authority, Issuance

Sec.

Sec. 701.105 OMB approval under the Paperwork Reduction Act.

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


Sec. 701.301 Policy.

Sec. 701.303 Publication and codification.

             Subpart 701.4_Deviations from the FAR or AIDAR


Sec. 701.402 Policy.

Sec. 701.470 Procedure.

      Subpart 701.6_Career Development, Contracting Authority, and 
                            Responsibilities


Sec. 701.601 General.

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

Sec. 701.602-3 Ratification of unauthorized commitments.

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

Sec. 701.603-70 Designation of contracting officers.

                Subpart 701.7_Determinations and Findings


Sec. 701.704 Content.

Sec. 701.707 Signatory authority.

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

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

               Subpart 701.1_Purpose, Authority, Issuance



Sec. 701.105  OMB approval under the Paperwork Reduction Act.

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

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

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

[[Page 6]]

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

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

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

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



Sec. 701.301  Policy.

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

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



Sec. 701.303  Publication and codification.

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

[[Page 7]]

such material will be numerically keyed to the AIDAR.

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

             Subpart 701.4_Deviations from the FAR or AIDAR



Sec. 701.402  Policy.

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



Sec. 701.470  Procedure.

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

[[Page 8]]

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

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

      Subpart 701.6_Career Development, Contracting Authority, and 
                            Responsibilities



Sec. 701.601  General

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

[[Page 9]]

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

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



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

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

[62 FR 40466, July 29, 1997]



Sec. 701.602-3  Ratification of unauthorized commitments.

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

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



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



Sec. 701.603-70  Designation of contracting officers.

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

[[Page 10]]

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

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

                Subpart 701.7_Determinations and Findings



Sec. 701.704  Content.

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

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



Sec. 701.707  Signatory authority.

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

[58 FR 8702, Feb. 17, 1993]

                 PART 702_DEFINITIONS OF WORDS AND TERMS

                       Subpart 702.170_Definitions

Sec.

Sec. 702.170-1 USAID.

Sec. 702.170-2 Administrator.

Sec. 702.170-3 Contracting activities.

Sec. 702.170-4 Cooperating country.

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

Sec. 702.170-6 Executive agency.

Sec. 702.170-7 Foreign Assistance Act.

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

Sec. 702.170-9 Head of agency.

Sec. 702.170-10 Head of the contracting activity.

Sec. 702.170-11 Mission.

Sec. 702.170-12 Overseas.

Sec. 702.170-13 Procurement Executive.

Sec. 702.170-14 [Reserved]

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

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

Sec. 702.170-17 Automated Directives System.

                   Subpart 702.270_Definitions Clause


Sec. 702.270-1 Definitions clause.

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

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

                       Subpart 702.170_Definitions



Sec. 702.170-1  USAID.

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



Sec. 702.170-2  Administrator.

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



Sec. 702.170-3  Contracting activities.

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

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

[[Page 11]]



Sec. 702.170-4  Cooperating country.

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



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

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



Sec. 702.170-6  Executive agency.

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



Sec. 702.170-7  Foreign Assistance Act.

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



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

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



Sec. 702.170-9  Head of agency.

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

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



Sec. 702.170-10  Head of the contracting activity.

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

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



Sec. 702.170-11  Mission.

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



Sec. 702.170-12  Overseas.

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



Sec. 702.170-13  Procurement Executive.

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

[64 FR 42041, Aug. 3, 1999]



Sec. 702.170-14  [Reserved]



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

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

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



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

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

[[Page 12]]

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

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



Sec. 702.170-17  Automated Directives System.

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

[64 FR 42041, Aug. 3, 1999]

                   Subpart 702.270_Definitions Clause



Sec. 702.270-1  Definitions clause.

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

 PART 703_IMPROPER BUSINESS PRACTICES AND PERSONAL CONFLICTS OF INTEREST

                        Subpart 703.1_Safeguards

Sec.

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

Sec. 703.104-10.1 Violations or possible violations.

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

                        Subpart 703.1_Safeguards



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

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

[64 FR 16648, Apr. 6, 1999]



Sec. 703.104-10.1  Violations or possible violations.

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

[64 FR 16648, Apr. 6, 1999]

                     PART 704_ADMINISTRATIVE MATTERS

    Subpart 704.4_Safeguarding Classified Information Within Industry

Sec.

Sec. 704.404 Contract clause.

Subpart 704.8--Contract Files [Reserved]

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

    Subpart 704.4_Safeguarding Classified Information Within Industry



Sec. 704.404  Contract clause.

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

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

Subpart 704.8--Contract Files [Reserved]

[[Page 13]]

                    SUBCHAPTER B_ACQUISITION PLANNING

                  PART 705_PUBLICIZING CONTRACT ACTIONS

Sec.

Sec. 705.002 Policy.

           Subpart 705.2_Synopsis of Proposed Contract Actions


Sec. 705.202 Exceptions.

Sec. 705.207 Preparation and transmittal of certain synopses.

Sec. 705.502 Authority.

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



Sec. 705.002  Policy.

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

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

           Subpart 705.2_Synopsis of Proposed Contract Actions



Sec. 705.202  Exceptions.

    (a) [Reserved]
    (b) The head of the U.S. Agency for International Development has 
determined after consultation with the Administrator for Federal 
Procurement Policy and the Administrator of the Small Business 
Administration, that advance notice is not appropriate or reasonable for 
contract actions described in 706.302-70(b)(1) through (b)(3).
    (c) Advance notice is not required for contract actions undertaken 
in accordance with 706.302-71.

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



Sec. 705.207  Preparation and transmittal of certain synopses.

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

For exceptions, see 726.7005.

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



Sec. 705.502  Authority.

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

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

                    PART 706_COMPETITION REQUIREMENTS

Sec.

Sec. 706.003 Definitions.

Subparts 706.1-706.2 [Reserved]

[[Page 14]]

           Subpart 706.3_Other Than Full and Open Competition


Sec. 706.302-5 Authorized or required by statute.

Sec. 706.302-70 Impairment of foreign aid programs.

Sec. 706.302-71 Small disadvantaged businesses.

Sec. 706.303-1 Requirements.

                   Subpart 706.5_Competition Advocates


Sec. 706.501 Requirement.

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



Sec. 706.003  Definitions.

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

[50 FR 40528, Oct. 4, 1985]

Subparts 706.1-706.2 [Reserved]

           Subpart 706.3_Other Than Full and Open Competition



Sec. 706.302-5  Authorized or required by statute.

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

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



Sec. 706.302-70  Impairment of foreign aid programs.

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

[[Page 15]]

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

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



Sec. 706.302-71  Small disadvantaged businesses.

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

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



Sec. 706.303-1  Requirements.

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

[50 FR 16086, Apr. 24, 1985]

                   Subpart 706.5_Competition Advocates



Sec. 706.501  Requirement.

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

[[Page 16]]

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

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

                      PART 707_ACQUISITION PLANNING

Subpart 707.1--Acquisition Plans [Reserved]

                   PART 709_CONTRACTOR QUALIFICATIONS

Sec.

          Subpart 709.4_Debarment, Suspension and Ineligibility


Sec. 709.403 Definitions.

           Subpart 709.5_Organizational Conflicts of Interest


Sec. 709.503 Waiver.

Sec. 709.507-2 Contract clause.

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

          Subpart 709.4_Debarment, Suspension and Ineligibility



Sec. 709.403  Definitions.

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

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

           Subpart 709.5_Organizational Conflicts of Interest



Sec. 709.503  Waiver.

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

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



Sec. 709.507-2  Contract clause.

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

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

                    PART 711_DESCRIBING AGENCY NEEDS

Sec.

Sec. 711.002-70 Metric system waivers.

Sec. 711.002-71 Solicitation provisions and contract clauses.

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



Sec. 711.002-70  Metric system waivers.

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

[[Page 17]]

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

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



Sec. 711.002-71  Solicitation provisions and contract clauses.

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

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

[[Page 18]]

           SUBCHAPTER C_CONTRACTING METHODS AND CONTRACT TYPES

               PART 713_SIMPLIFIED ACQUISITION PROCEDURES

Sec.

Sec. 713.000 Scope of part.

                          Subpart 713.1_General


Sec. 713.101 Definitions.

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

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



Sec. 713.000  Scope of part.

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

                          Subpart 713.1_General



Sec. 713.101  Definitions.

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

                         PART 714_SEALED BIDDING

           Subpart 714.4_Opening of Bids and Award of Contract

Sec.

Sec. 714.406-3 Other mistakes disclosed before award.

Sec. 714.406-4 Disclosure of mistakes after award.

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

           Subpart 714.4_Opening of Bids and Award of Contract



Sec. 714.406-3  Other mistakes disclosed before award.

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

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



Sec. 714.406-4  Disclosure of mistakes after award.

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

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

                   PART 715_CONTRACTING BY NEGOTIATION

                     Subpart 715.3_Source Selection

Sec.

Sec. 715.303 Responsibilities.

Sec. 715.303-70 Responsibilities of USAID evaluation committees.

Sec. 715.305 Proposal evaluation.

Sec. 715.370 Alternative source selection procedures.

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

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

                   Subpart 715.6_Unsolicited Proposals


Sec. 715.602 Policy.

Sec. 715.604 Agency points of contact.

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

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

[[Page 19]]

                     Subpart 715.3_Source Selection



Sec. 715.303  Responsibilities.



Sec. 715.303-70  Responsibilities of USAID evaluation committees.

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

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



Sec. 715.305  Proposal evaluation.

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

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



Sec. 715.370  Alternative source selection procedures.

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

[64 FR 16649, Apr. 6, 1999]



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

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

[[Page 20]]

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

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

[[Page 21]]



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

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

[[Page 22]]

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

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

                   Subpart 715.6_Unsolicited Proposals



Sec. 715.602  Policy.

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

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



Sec. 715.604  Agency points of contact.

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

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

                       PART 716_TYPES OF CONTRACTS

               Subpart 716.3_Cost Reimbursement Contracts

Sec.

Sec. 716.303 Cost-sharing contracts.

Sec. 716.306 [Reserved]

Sec. 709.406 Contract clauses.

Subpart 716.5 [Reserved]

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

               Subpart 716.3_Cost Reimbursement Contracts



Sec. 716.303  Cost-sharing contracts.

    (a)-(b) [Reserved]

[[Page 23]]

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

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



Sec. 716.306  [Reserved]



Sec. 716.406  Contract clauses.

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

[64 FR 5007, Feb. 2, 1999]

Subpart 716.5 [Reserved]

                  PART 717_SPECIAL CONTRACTING METHODS

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

                 Subpart 717.70_Pharmaceutical Products



Sec. 717.700  General.

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

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

[[Page 24]]

                   SUBCHAPTER D_SOCIOECONOMIC PROGRAMS

                    PART 719_SMALL BUSINESS PROGRAMS

                         Subpart 719.2_Policies

Sec.

Sec. 719.270 Small business policies.

Sec. 719.271 Agency program direction and operation.

Sec. 719.271-1 General.

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

Sec. 719.271-3 USAID contracting officers.

Sec. 719.271-4 Heads of contracting activities.

Sec. 719.271-5 Cognizant technical officers.

Sec. 719.271-6 Small business screening procedure.

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

Sec. 719.272 Small disadvantaged business policies.

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


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

Sec. 719.273-1 Purpose.

Sec. 719.273-2 Definitions.

Sec. 719.273-3 Incentives for prime contractor participation.

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

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

Sec. 719.273-6 Application process.

Sec. 719.273-7 OSDBU review of application.

Sec. 719.273-8 Developmental assistance.

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

Sec. 719.273-10 Internal controls.

Sec. 719.273-11 Solicitation provision and contract clause.

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

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

                         Subpart 719.2_Policies



Sec. 719.270  Small business policies.

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

[[Page 25]]

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

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



Sec. 719.271  Agency program direction and operation.



Sec. 719.271-1  General.

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



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

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

[[Page 26]]

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

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



Sec. 719.271-3  USAID contracting officers.

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

[[Page 27]]

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

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



Sec. 719.271-4  Heads of contracting activities.

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

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



Sec. 719.271-5  Cognizant technical officers.

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

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



Sec. 719.271-6  Small business screening procedure.

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

[[Page 28]]

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

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



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

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



Sec. 719.272  Small disadvantaged business policies.

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

[[Page 29]]

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

[58 FR 8702, Feb. 17, 1993]

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

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



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



Sec. 719.273-1  Purpose.

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



Sec. 719.273-2  Definitions.

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



Sec. 719.273-3  Incentives for prime contractor participation.

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

[[Page 30]]

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



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

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



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

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

[[Page 31]]

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



Sec. 719.273-6  Application process.

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



Sec. 719.273-7  OSDBU review of application.

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

[[Page 32]]

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



Sec. 719.273-8  Developmental assistance.

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



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

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



Sec. 719.273-10  Internal controls.

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

[[Page 33]]



Sec. 719.273-11  Solicitation provision and contract clause.

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

      PART 722_APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITION

                   Subpart 722.1_Basic Labor Policies

Sec.

Sec. 722.103 Overtime.

Sec. 722.103-1 Definitions.

Sec. 722.103-2 Policy.

Sec. 722.103-3 [Reserved]

Sec. 722.103-4 Approvals.

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

               Subpart 722.8_Equal Employment Opportuntity


Sec. 722.805-70 Procedures.

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

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

                   Subpart 722.1_Basic Labor Policies



Sec. 722.103  Overtime.



Sec. 722.103-1  Definitions.

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



Sec. 722.103-2  Policy.

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

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



Sec. 722.103-3  [Reserved]



Sec. 722.103-4  Approvals.

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

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



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

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

[[Page 34]]

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

               Subpart 722.8_Equal Employment Opportunity



Sec. 722.805-70  Procedures.

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

[[Page 35]]

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

[[Page 36]]

other records related to unsuccessful offers, and retained for at least 
six months following award.

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

        PART 724_PROTECTION OF PRIVACY AND FREEDOM OF INFORMATION

                Subpart 724.2_Freedom of Information Act

Sec.

Sec. 724.202 Policy.

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

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

                Subpart 724.2_Freedom of Information Act



Sec. 724.202  Policy.

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

                      PART 725_FOREIGN ACQUISITION

                 Subpart 725.1_Buy American Act_Supplies

Sec.

Sec. 725.170 Exceptions for Foreign Assistance Act functions.

                     Subpart 725.4_Trade Agreements


Sec. 725.403 Exceptions.

             Subpart 725.70_Source, Origin, and Nationality


Sec. 725.701 General.

Sec. 725.702 Designation of authorized geographic code.

Sec. 725.703 Contractor employees.

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

Sec. 725.705 Local procurement--contract clause.

Sec. 725.706 Geographic source waivers.

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

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

                 Subpart 725.1_Buy American Act_Supplies



Sec. 725.170  Exceptions for Foreign Assistance Act functions.

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

                     Subpart 725.4_Trade Agreements



Sec. 725.403  Exceptions.

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

[61 FR 39093, July 26, 1996]

             Subpart 725.70_Source, Origin, and Nationality



Sec. 725.701  General.

    USAID's source, origin and nationality requirements for program-
funded contracts and subcontracts are established in 22 CFR part 228, 
Rules on Source, Origin and nationality for Commodities and Services 
Financed by USAID. These policies as they apply to

[[Page 37]]

subcontracts and purchases under USAID program-funded contracts have 
been incorporated into the contract clauses referenced in 725.704 and 
725.705 of this subpart.

[62 FR 40468, July 29, 1997]



Sec. 725.702  Designation of authorized geographic code.

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

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



Sec. 725.703  Contractor employees.

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

[51 FR 34985, Oct. 1, 1986]



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

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

[62 FR 40468, July 29, 1997]



Sec. 725.705  Local procurement--contract clause.

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

[62 FR 40468, July 29, 1997]



Sec. 725.706  Geographic source waivers.

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

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

                  PART 726_OTHER SOCIOECONOMIC PROGRAMS

            Subpart 726.70_Disadvantaged Enterprises Program

Sec.

Sec. 726.7001 Scope of subpart.

Sec. 726.7002 Definitions.

Sec. 726.7003 Policy.

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

Sec. 726.7005 Exceptions.

Sec. 726.7006 Determination of status as a disadvantaged enterprise.

Sec. 726.7007 Requirement for subcontracting with disadvantaged 
          enterprises.

Sec. 726.7008 Limitations on subcontracting.

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


Sec. 726.7101 Policy.

Sec. 726.7102 PD 20 provision.

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

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

[[Page 38]]

            Subpart 726.70_Disadvantaged Enterprises Program



Sec. 726.7001  Scope of subpart.

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

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



Sec. 726.7002  Definitions.

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

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



Sec. 726.7003  Policy.

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

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

[[Page 39]]



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

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

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



Sec. 726.7005  Exceptions.

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

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



Sec. 726.7006  Determination of status as a disadvantaged enterprise.

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

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



Sec. 726.7007  Requirement for subcontracting with disadvantaged 
          enterprises.

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

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



Sec. 726.7008  Limitations on subcontracting.

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

[[Page 40]]

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

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

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



Sec. 726.7101  Policy.

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

[61 FR 39093, July 26, 1996]



Sec. 726.7102  PD 20 provision.

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

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

[61 FR 39093, July 26, 1996]

[[Page 41]]

              SUBCHAPTER E_GENERAL CONTRACTING REQUIREMENTS

                 PART 727_PATENTS, DATA, AND COPYRIGHTS

               Subpart 727.4_Rights in Data and Copyrights

Sec.

Sec. 727.404 Basic rights in data clause.

Sec. 727.409 Solicitation provisions and contract clauses.

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

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

               Subpart 727.4_Rights in Data and Copyrights



Sec. 727.404  Basic rights in data clause.

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



Sec. 727.409  Solicitation provisions and contract clauses.

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

                      PART 728_BONDS AND INSURANCE

                           Subpart 728.1_Bonds

Sec.

Sec. 728.105-1 Advance payment bonds.

                         Subpart 728.3_Insurance


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

Sec. 728.307-2 Liability.

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

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

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

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

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

                           Subpart 728.1_Bonds



Sec. 728.105-1  Advance payment bonds.

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

[[Page 42]]

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

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

                         Subpart 728.3_Insurance



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

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

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



Sec. 728.307-2  Liability.

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

[53 FR 50630, Dec. 16, 1988]

[[Page 43]]



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

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

[59 FR 33446, June 29, 1994]



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

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

[53 FR 50630, Dec. 16, 1988]



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

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

[53 FR 50630, Dec. 16, 1988]

            PART 731_CONTRACT COST PRINCIPLES AND PROCEDURES

                       Subpart 731.1_Applicability

Sec.

Sec. 731.109 Advance agreements.

          Subpart 731.2_Contracts With Commercial Organizations


Sec. 731.205-6 Compensation for personal services.

Sec. 731.205-46 Travel costs.

Sec. 731.205-70 Overseas recruitment incentive.

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

          Subpart 731.3_Contracts With Educational Institutions


Sec. 731.370 Predetermined fixed rates for indirect costs.

Sec. 731.371 Compensation for personal services.

Sec. 731.372 Fringe benefits.

Sec. 731.373 Overseas recruitment incentive.

          Subpart 731.7_Contracts With Nonprofit Organizations


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

Sec. 731.771 Bid and proposal costs.

Sec. 731.772 Compensation for personal services.

Sec. 731.773 Independent research and development costs.

Sec. 731.774 Overseas recruitment incentive.

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

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

                       Subpart 731.1_Applicability



Sec. 731.109  Advance agreements.

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

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

          Subpart 731.2_Contracts With Commercial Organizations



Sec. 731.205-6  Compensation for personal services.

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

[[Page 44]]

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

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



Sec. 731.205-46  Travel costs.

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

[57 FR 5236, Feb. 13, 1992]



Sec. 731.205-70  Overseas recruitment incentive.

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

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

[57 FR 5236, Feb. 13, 1992]



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

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

[[Page 45]]

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

[64 FR 16649, Apr. 6, 1999]

          Subpart 731.3_Contracts With Educational Institutions



Sec. 731.370  Predetermined fixed rates for indirect costs.

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



Sec. 731.371  Compensation for personal services.

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

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



Sec. 731.372  Fringe benefits.

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

[57 FR 5236, Feb. 13, 1992]



Sec. 731.373  Overseas recruitment incentive.

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

[57 FR 5236, Feb. 13, 1992]

          Subpart 731.7_Contracts With Nonprofit Organizations



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

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

[[Page 46]]

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

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


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

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

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



Sec. 731.771  Bid and proposal costs.

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



Sec. 731.772  Compensation for personal services.

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

[57 FR 5236, Feb. 13, 1992]



Sec. 731.773  Independent research and development costs.

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



Sec. 731.774  Overseas recruitment incentive.

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

[57 FR 5236, Feb. 13, 1992]

                       PART 732_CONTRACT FINANCING

                          Subpart 732.1_General

Sec.

Sec. 732.111 Contract clauses.

                     Subpart 732.4_Advance Payments


Sec. 732.401 Statutory authority.

[[Page 47]]


Sec. 732.402 General.

Sec. 732.403 Applicability.

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

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

Sec. 732.406-72 Establishing an LOC.

Sec. 732.406-73 LOC contract clause.

Sec. 732.406-74 Revocation of the LOC.

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

                          Subpart 732.1_General



Sec. 732.111  Contract clauses.

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

[61 FR 39094, July 26, 1996]

                     Subpart 732.4_Advance Payments

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



Sec. 732.401  Statutory authority.

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

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



Sec. 732.402  General.

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

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



Sec. 732.403  Applicability.

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



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

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



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

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

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

[[Page 48]]



Sec. 732.406-72  Establishing an LOC.

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

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



Sec. 732.406-73  LOC contract clause.

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

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



Sec. 732.406-74  Revocation of the LOC.

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

                PART 733_PROTESTS, DISPUTES, AND APPEALS

                         Subpart 733.1_Protests

Sec.

Sec. 733.101 Definitions.

Sec. 733.103-70 Protests to the agency.

Sec. 733.103-71 Filing of protest.

Sec. 733.103-72 Responsibilities.

Sec. 733.103-73 Protests excluded from consideration.

        Subpart 733.27_USAID Procedures for Disputes and Appeals


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

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

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

                         Subpart 733.1_Protests

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



Sec. 733.101  Definitions.

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

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



Sec. 733.103-70  Protests to the agency.

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

[[Page 49]]



Sec. 733.103-71  Filing of protest.

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

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



Sec. 733.103-72  Responsibilities.

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

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



Sec. 733.103-73  Protests excluded from consideration.

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

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

        Subpart 733.27_USAID Procedures for Disputes and Appeals



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

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

[[Page 50]]

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

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



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

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

[[Page 51]]

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

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

[[Page 52]]

             SUBCHAPTER F_SPECIAL CATEGORIES OF CONTRACTING

                    PART 734_MAJOR SYSTEM ACQUISITION

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



Sec. 734.002-70  USAID policy.

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

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

         PART 736_CONSTRUCTION AND ARCHITECT-ENGINEER CONTRACTS

                Subpart 736.6_Architect-Engineer Services

Sec.

Sec. 736.602-2 Evaluation boards.

Sec. 736.602-3 Evaluation board functions.

Sec. 736.602-4 Selection authority.

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

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

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

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

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

                Subpart 736.6_Architect-Engineer Services



Sec. 736.602-2  Evaluation boards.

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

[54 FR 46391, Nov. 3, 1989]



Sec. 736.602-3  Evaluation board functions.

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

[[Page 53]]

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



Sec. 736.602-4  Selection authority.

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



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

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

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



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

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

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



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

    See 736.602-3(c)(5).

                           PART 737 [RESERVED]

[[Page 54]]

                    SUBCHAPTER G_CONTRACT MANAGEMENT

                    PART 742_CONTRACT ADMINISTRATION

                    Subpart 742.7_Indirect Cost Rates

Sec.

Sec. 742.770 Negotiated indirect cost rate agreement.

         Subpart 742.11_Production, Surveillance, and Reporting


Sec. 742.1170 Performance monitoring and progress reporting.

Sec. 742.1170-1 General.

Sec. 742.1170-2 Applicability.

Sec. 742.1170-3 Policy.

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

            Subpart 742.15_Contractor Performance Information


Sec. 742.1501 [Reserved]

Sec. 742.1502 Policy.

Sec. 742.1503 Procedures.

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

                    Subpart 742.7_Indirect Cost Rates



Sec. 742.770  Negotiated indirect cost rate agreement.

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

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

         Subpart 742.11_Production, Surveillance, and Reporting

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



Sec. 742.1170  Performance monitoring and progress reporting.



Sec. 742.1170-1  General.

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



Sec. 742.1170-2  Applicability.

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

[[Page 55]]

in accordance with FAR 48 CFR subpart 42.15 and internal Agency 
procedures, although they may be used by USAID personnel or their 
authorized representatives when evaluating the contractor's performance. 
Furthermore, the policies, procedures, and limitations of this section 
do not apply to technical reports, studies, papers, etc., the 
acquisition of which may be part of or even the sole purpose of the 
contract.



Sec. 742.1170-3  Policy.

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



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

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

            Subpart 742.15_Contractor Performance Information

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



Sec. 742.1501  [Reserved]



Sec. 742.1502  Policy.

    (a) USAID contracting officers shall report contractor performance 
information at least annually, employing

[[Page 56]]

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

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



Sec. 742.1503  Procedures.

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

                      PART 745_GOVERNMENT PROPERTY

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

                          Subpart 745.1_General



Sec. 745.106  Contract clauses.

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

[64 FR 5008, Feb. 2, 1999]

                         PART 747_TRANSPORTATION

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

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



Sec. 747.507  Contract clauses.

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

[64 FR 5008, Feb. 2, 1999]

                    PART 749_TERMINATION OF CONTRACTS

                    Subpart 749.1_General Principles

Sec.

Sec. 749.100 Scope of subpart.

Sec. 749.111 Review of proposed settlements.

Sec. 749.111-70 Termination settlement review boards.

Sec. 749.111-71 Required review and approval.

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

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

                    Subpart 749.1_General Principles



Sec. 749.100  Scope of subpart.

    The Foreign Aid and Related Agencies Appropriation Act, 1963, and 
subsequent appropriation Acts, have imposed the following requirement:
    None of the funds appropriated or made available pursuant to this 
Act for carrying out the Foreign Assistance Act of 1961, as amended, may 
be used for making payments on any contract for procurement to which the 
United States is a party entered into after the date of enactment of 
this Act which

[[Page 57]]

does not contain a provision authorizing the termination of such 
contract for the convenience of the United States.
    See, for example, section 110 of the Foreign Assistance and Related 
Agencies Appropriation Act, 1965.



Sec. 749.111  Review of proposed settlements.



Sec. 749.111-70  Termination settlement review boards.

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

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



Sec. 749.111-71  Required review and approval.

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

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

               PART 750_EXTRAORDINARY CONTRACTUAL ACTIONS

Sec.

Sec. 750.000 Scope of part.

Subpart 750.70 [Reserved]

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


Sec. 750.7100 Scope of subpart.

Sec. 750.7101 Authority.

Sec. 750.7102 General policy.

Sec. 750.7103 Definitions.

[[Page 58]]


Sec. 750.7104 Types of actions.

Sec. 750.7105 Approving authorities.

Sec. 750.7106 Standards for deciding cases.

Sec. 750.7106-1 General.

Sec. 750.7106-2 Amendments without consideration.

Sec. 750.7106-3 Mistakes.

Sec. 750.7106-4 Informal commitments.

Sec. 750.7107 Limitations upon exercise of authority.

Sec. 750.7108 Contractual requirements.

Sec. 750.7109 Submission of requests by contractors.

Sec. 750.7109-1 Filing requests.

Sec. 750.7109-2 Form of requests by contractors.

Sec. 750.7109-3 Facts and evidence.

Sec. 750.7110 Processing cases.

Sec. 750.7110-1 Investigation.

Sec. 750.7110-2 Office of General Counsel coordination.

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

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

Sec. 750.7110-5 Contract files.

Sec. 750.7110-6 Inter-agency coordination.

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

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



Sec. 750.000  Scope of part.

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

Subpart 750.70 [Reserved]

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



Sec. 750.7100  Scope of subpart.

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



Sec. 750.7101  Authority.

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

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

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



Sec. 750.7102  General policy.

    Extra-contractual claims arising from foreign assistance contracts 
will be processed in accordance with this subpart, which is similar to 
that utilized to process claims for extraordinary relief under FAR Part 
50, as modified to meet the circumstances involved under the Foreign 
Assistance Act and the different authority involved.



Sec. 750.7103  Definitions.

    (a) The term approving authority as used in this subpart means an 
officer or

[[Page 59]]

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

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



Sec. 750.7104  Types of actions.

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



Sec. 750.7105  Approving authorities.

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

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



Sec. 750.7106  Standards for deciding cases.



Sec. 750.7106-1  General.

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



Sec. 750.7106-2  Amendments without consideration.

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



Sec. 750.7106-3  Mistakes.

    A contract may be amended or modified to corrrect or mitigate the 
effect of a mistake, including the following examples:
    (a) A mistake or ambiguity which consists of the failure to express 
or to express clearly in the written contract the agreements as both 
parties understood them;
    (b) A mistake on the part of the contractor which is so obvious that 
it was or should have been apparent to the contracting officer; and
    (c) A mutual mistake as to a material fact.

[[Page 60]]


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



Sec. 750.7106-4  Informal commitments.

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



Sec. 750.7107  Limitations upon exercise of authority.

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

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



Sec. 750.7108  Contractual requirements.

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



Sec. 750.7109  Submission of requests by contractors.



Sec. 750.7109-1  Filing requests.

    Any person (hereinafter called the ``contractor'') seeking an 
adjustment under standards set forth in 750.7106 may file a request in 
duplicate with the cognizant contracting officer or his/her duly 
authorized representative. If such filing is impracticable, requests 
will be deemed to be properly filed if filed with the Chief of the 
Office of Acquisition and Assistance, Evaluation Division

[[Page 61]]

(M/OAA/E) for forwarding to the cognizant contracting officer.

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



Sec. 750.7109-2  Form of requests by contractors.

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



Sec. 750.7109-3  Facts and evidence.

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

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



Sec. 750.7110  Processing cases.



Sec. 750.7110-1  Investigation.

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

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



Sec. 750.7110-2  Office of General Counsel coordination.

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

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



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

    Cases to be submitted for consideration by the M/OAA Director shall 
be prepared and forwarded by the cognizant contracting officer through 
M/OAA/E to the M/OAA Director by means of an action memorandum. M/OAA/E 
will review the action memorandum for accuracy and completeness. The 
action memorandum shall provide for approval or disapproval by the M/OAA 
Director of the disposition recommended by the contracting officer. The 
action memorandum shall address:
    (a) The nature of the case;
    (b) The basis for authority to act under section 750.7101;
    (c) The findings of fact essential to the case (see 750.7109-3) 
arranged chronologically with cross references to supporting enclosures;
    (d) The conclusions drawn from applying the standards for deciding 
cases, as set forth in 750.7106, to the findings of fact;
    (e) Compliance with the limitations upon exercise of authority, as 
set forth in section 750.7107 (for informal commitments, include 
statements addressing each of the limitations in paragraph (d) of 
750.7107):
    (f) Concurrences or comments obtained from the Office of General 
Counsel;
    (g) Verification of funds availability and the contracting officer's 
determination of cost/price reasonableness when the disposition 
recommended requires payment to a contractor;
    (h) The disposition recommended and, if contractual action is 
recommended with respect to cases falling within Section 4 of the 
Executive Order, the opinion of the contracting officer that such action 
is necessary to protect the foreign policy interest of the United 
States; and

[[Page 62]]

    (i) The action memorandum shall enclose all evidentiary materials, 
including the reports and comments of all cognizant Government or other 
officials, and a copy of the contractor's request. The action memorandum 
should provide the following information related to the contractor's 
request, as applicable:
    (1) Date of request;
    (2) Date request received by USAID:
    (3) Contract number;
    (4) Contractor's name and address;
    (5) Name, address, and phone number of contractor's representative;
    (6) Name, office symbol, and phone number of cognizant contracting 
officer;
    (7) Amount of request.

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



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

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

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



Sec. 750.7110-5  Contract files.

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

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



Sec. 750.7110-6  Inter-agency coordination.

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

[[Page 63]]

                     SUBCHAPTER H_CLAUSES AND FORMS

          PART 752_SOLICITATION PROVISIONS AND CONTRACT CLAUSES

              Subpart 752.2_Texts of Provisions and Clauses

Sec.

Sec. 752.200 Scope of subpart.

Sec. 752.202-1 Definitions.

Sec. 752.204-2 Security requirements.

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

Sec. 752.211-70 Language and measurement.

Sec. 752.216-70 Award fee.

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

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

Sec. 752.219-71 Mentor requirements and evaluation.

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

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

Sec. 725.225-71 Local procurement.

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

Sec. 752.226-2 Subcontracting with disadvantaged enterprises.

Sec. 752.226-3 Limitation on subcontracting.

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

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

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

Sec. 752.228-9 Cargo insurance.

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

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

Sec. 752.231-71 Salary supplements for HG employees.

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

Sec. 752.232-70 Letter of credit advance payment.

Sec. 752.242-70 Periodic progress reports.

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

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

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

             Subpart 752.70_Texts of USAID Contract Clauses


Sec. 752.7000 Scope of subpart.

Sec. 752.7001 Biographical data.

Sec. 752.7002 Travel and transportation.

Sec. 752.7003 Documentation for payment.

Sec. 752.7004 Emergency locator information.

Sec. 752.7005 Submission requirements for development experience 
          documents.

Sec. 752.7006 Notices.

Sec. 752.7007 Personnel compensation.

Sec. 752.7008 Use of Government facilities or personnel.

Sec. 752.7009 Marking.

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

Sec. 752.7011 Orientation and language training.

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

Sec. 752.7013 Contractor-mission relationships.

Sec. 752.7014 Notice of changes in travel regulations.

Sec. 752.7015 Use of pouch facilities.

Sec. 752.7016--752.7017 [Reserved]

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

Sec. 752.7019 Participant training.

Sec. 752.7020 [Reserved]

Sec. 752.7021 Changes in tuition and fees.

Sec. 752.7022 Conflicts between contract and catalog.

Sec. 752.7023 Required visa form for USAID participants.

Sec. 752.7024 Withdrawal of students.

Sec. 752.7025 Approvals.

Sec. 752.7026 [Reserved]

Sec. 752.7027 Personnel.

Sec. 752.7028 Differential and allowances.

Sec. 752.7029 Post privileges.

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

Sec. 752.7031 Leave and holidays.

Sec. 752.7032 International travel approval and notification 
          requirements.

Sec. 752.7033 Physical fitness.

Sec. 752.7034 Acknowledgement and disclaimer.

Sec. 752.7035 Public notices.

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

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

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

              Subpart 752.2_Texts of Provisions and Clauses



Sec. 752.200  Scope of subpart.

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

[[Page 64]]

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

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



Sec. 752.202-1  Definitions.

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

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

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

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

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

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

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

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

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

[[Page 65]]

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

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



Sec. 752.204-2  Security requirements.

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

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

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



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

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

 Organizational Conflicts of Interest Discovered After Award (JUN 1993)

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

                             (End of clause)

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



Sec. 752.211-70  Language and measurement.

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

                   Language and Measurement (JUN 1992)

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

                             (End of clause)

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

[[Page 66]]



Sec. 752.216-70  Award fee.

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

                          Award Fee (MAY 1997)

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

                             (End of clause)

[64 FR 5008, Feb. 2, 1999]



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

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

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

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



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

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

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

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

                           (End of provision)

[72 FR 32546, June 13, 2007]



Sec. 752.219-71  Mentor requirements and evaluation.

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

           Mentor Requirements and Evaluation (July 13, 2007)

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

[[Page 67]]

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

                             (End of clause)

[72 FR 32546, June 13, 2007]



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

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

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



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

    The following clause is required as prescribed in 725.704.

         Source, Origin and Nationality Requirements (FEB 1997)

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

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



Sec. 752.225-71  Local procurement.

    For use in any USAID contract involving performance overseas.

                      Local Procurement (FEB 1997)

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

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



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

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

           Disadvantaged Enterprise Representation (APR 1991)

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

[[Page 68]]

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

                           (End of provision)

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



Sec. 752.226-2  Subcontracting with disadvantaged enterprises.

    As prescribed in 726.7007, insert the following clause:

        Subcontracting With Disadvantaged Enterprises (APR 1997)

    Note: This clause does not apply to prime contractors that qualify 
as disadvantaged enterprises as described below.

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

                             (End of clause)

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

[[Page 69]]



Sec. 752.226-3  Limitation on subcontracting.

    As prescribed in 726.7008, insert the following clause:

                Limitations on Subcontracting (JUN 1993)

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

                             (End of clause)

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



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

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

                   Rights in Data--General (OCT 2007)

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

[72 FR 53164, Sept. 18, 2007]



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

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

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

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



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

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

    ( ) Insurance on private automobiles. If the Contractor or any of 
its employees or their dependents transport or cause to be transported 
(whether or not at contract expense) privately owned automobiles to the 
Cooperating Country, or they or any of them purchase an automobile 
within the Cooperating Country, the Contractor agrees to make certain 
that all such automobiles during such ownership within the Cooperating 
Country will be covered by a paid-up insurance policy issued by a 
reliable company providing the following minimum coverages or such other 
minimum coverages as may be set by the Mission Director, payable in 
United States dollars or its equivalent in the currency of the 
Cooperating Country: injury to persons, $10,000/$20,000; property 
damage, $5,000. The

[[Page 70]]

premium costs for such insurance shall not be a reimbursable cost under 
this contract. Copies of such insurance policies shall be preserved and 
made available as part of the Contractor's records which are required to 
be preserved and made available by the ``Audit and Records--
Negotiation'' clause of this contract.

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



Sec. 752.228-9  Cargo insurance.

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

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

[53 FR 50632, Dec. 16, 1988]



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

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

            Medical Evacuation (MEDEVAC) Services (JUL 2007)

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

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



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

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



Sec. 752.231-71  Salary supplements for HG employees.

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

             Salary Supplements for HG Employees (OCT 1998)

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

[64 FR 16649, Apr. 6, 1999]



Sec. 752.232-70  Letter of credit advance payment.

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

               Letter of Credit Advance Payment (OCT 1989)

    (a) Payment under this contract shall be by means of a Letter of 
Credit (LOC) in accordance with the terms and conditions of the LOC and 
any instructions issued by the USAID Office of Financial Management, 
Cash Management and Payment Division (FM/CMP).
    (b) As long as the LOC is in effect, the terms and conditions of the 
LOC and any instructions issued by FM/CMP constitute the payment 
conditions of this contract, superseding and taking precedence over any 
other clause of this contract concerning payment.

[[Page 71]]

    (c) If the LOC is revoked, payment may be made on a cost-
reimbursement basis, in accordance with the other clauses of this 
contract concerning payment.
    (d) Revocation of the LOC is at the discretion of FM/CMP after 
consultation with the contracting officer. Notification to the 
contractor of revocation must be in writing and must specify the reasons 
for such action. The contractor may appeal any such revocation to the 
contracting officer, in accordance with the Disputes clause of this 
contract. Pending final decision, payments under the contact will be in 
accordance with paragraph (c) of this clause.

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



Sec. 752.242-70  Periodic progress reports.

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

                  Periodic Progress Reports (OCT 2007)

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

[72 FR 53164, Sept. 18, 2007]



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

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

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

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

[[Page 72]]

 
\2\ Government furnished property listed in this Contract as
  nonexpendable.
\3\ Explain if transactions were not processed through or otherwise
  authorized by USAID.

                    Property Inventory Verifications

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

                          Authorized Signature

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



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

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

                Title to and Care of Property (APR 1984)

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

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



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

    As prescribed in 747.507, insert the following clause:

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

    (a) Under the provisions of the Cargo Preference Act of 1954 (46 
U.S.C. 1241(b)) at least 50 percent of the gross tonnage of equipment, 
materials, or commodities financed by USAID, or furnished without 
provision for reimbursement, or at least 75 percent of the gross tonnage 
of cargo moving under P.L. 480 financed by the U.S. Department of 
Agriculture, that may be transported in ocean vessels (computed 
separately for dry bulk carriers, dry cargo liners, and tankers) shall 
be transported in privately owned U.S.-flag commercial vessels.
    (b) In accordance with USAID regulations and consistent with the 
regulations of the Maritime Administration, USAID applies Cargo 
Preference requirements on the basis of programs or activities that 
generally include more than one contract. Thus, the amount of cargo 
fixed on privately owned U.S.-flag vessels under this contract may be 
more or less than the required 50 or 75 percent, depending on current 
compliance with Cargo Preference requirements. If freight under the 
contract is fixed on a U.S. flag vessel, Alternate I of this clause 
shall apply.
    (c)(1) The contractor shall submit one legible copy of a rated on-
board ocean bill of lading for each shipment to both the Division of 
National Cargo, Office of Cargo Preference, Maritime Administration, 
U.S. Department of Transportation, Washington, DC

[[Page 73]]

20590, and the Transportation Division, Office of Acquisition and 
Assistance, USAID, Washington, DC 20523-7900.
    (2) The contractor shall furnish these bill of lading copies within 
20 working days of the date of loading for shipments originating in the 
United States, or within 30 working days for shipments originating 
outside the United States. Each bill of lading copy shall contain the 
following information:
    (i) Sponsoring U.S. Government agency.
    (ii) Name of vessel.
    (iii) Vessel flag registry.
    (iv) Date of loading.
    (v) Port of loading.
    (vi) Port of final discharge.
    (vii) Description of commodity.
    (viii) Gross weight in pounds and cubic feet if available.
    (ix) Total ocean freight revenue in U.S. dollars.

                               Alternate I

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

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

             Subpart 752.70_Texts of USAID Contract Clauses



Sec. 752.7000  Scope of subpart.

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

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



Sec. 752.7001  Biographical data.

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

                      Biographical Data (JUL 1997)

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

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



Sec. 752.7002  Travel and transportation.

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

                  Travel and Transportation (JAN 1990)

    (a) General. The Contractor will be reimbursed for reasonable, 
allocable and allowable travel and transportation expenses incurred 
under and for the performance of this contract. Determination of 
reasonableness, allocability and allowability will be made by the 
Contracting Officer based on the applicable cost principles, the 
Contractor's established policies and procedures, USAID's established 
policies and procedures for USAID direct-hire employees, and the 
particular needs of the project being implemented by this contract. The 
following paragraphs provide specific guidance and limitations on 
particular items of cost.
    (b) International travel. For travel to and from post of assignment 
the Contractor shall be reimbursed for travel costs and travel 
allowances of travelers from place of residence in the United States (or 
other location provided that the cost of such travel does not exceed the 
cost of the travel from the employee's residence in the United States) 
to the post of duty in the Cooperating Country and return to place of 
residence in the United States (or other location provided that the cost 
of such travel does not exceed

[[Page 74]]

the cost of travel from the post of duty in the Cooperating Country to 
the employee's residence) upon completion of services by the individual. 
Reimbursement for travel will be in accordance with the applicable cost 
principles and the provisions of this contract, and will be limited to 
the cost of travel by the most direct and expeditious route. If a 
regular employee does not complete one full year at post of duty (except 
for reasons beyond his/her control), the costs of going to and from the 
post of duty for that employee and his/her dependents are not 
reimbursable hereunder. If the employee serves more than one year but 
less than the required service in the Cooperating Country (except for 
reasons beyond his/her control) the costs of going to the post of duty 
are reimbursable hereunder but the costs of going from post of duty to 
the employee's permanent, legal place of residence at the time he or she 
was employed for work under this contract or other location as approved 
by the Contracting Officer are not reimbursable under this contract for 
the employee and his/her dependents. When travel is by economy class 
accommodations, the Contractor will be reimbursed for the cost of 
transporting up to 22 pounds of accompanied personal baggage per 
traveler in addition to that regularly allowed with the economy ticket 
provided that the total number of pounds of baggage does not exceed that 
regularly allowed for first class travelers. Travel allowances for 
travelers shall not be in excess of the rates authorized in the 
Standardized Regulations (Government Civilians, Foreign Areas)--
hereinafter referred to as the Standardized Regulations--as from time to 
time amended, for not more than the travel time required by scheduled 
commercial air carrier using the most expeditious route. One stopover en 
route for a period of not to exceed 24 hours is allowable when the 
traveler uses economy class accommodations for a trip of 14 hours or 
more of scheduled duration. Such stopover shall not be authorized when 
travel is by indirect route or is delayed for the convenience of the 
traveler. Per diem during such stopover shall be paid in accordance with 
the established practice of the Contractor but not to exceed the amounts 
stated in the Standardized Regulations.
    (c) Local travel. Reimbursement for local travel in connection with 
duties directly referable to the contract shall not be in excess of the 
rates established by the Mission Director for the travel costs of 
travelers in the Cooperating Country. In the absence of such established 
rates the Contractor shall be reimbursed for actual travel costs of 
travelers in the Cooperating Country, if not provided by the Cooperating 
Government or the Mission, including travel allowances at rates not in 
excess of those prescribed by the Standardized Regulations.
    (d) Travel for consultation. The Contractor shall be reimbursed for 
the round trip of the Contractor's Chief of Party in the Cooperating 
Country or other designated Contractor employee or consultant in the 
Cooperating Country performing services required under this Contract, 
for travel from the Cooperating Country to the Contractor's office in 
the United States or to USAID/Washington for consultation and return on 
occasions deemed necessary by the Contractor and approved in advance, in 
writing, by the Contracting Officer or the Mission Director.
    (e) Special international travel and third country travel. For 
special travel which advances the purpose of the contract, which is not 
otherwise provided by the Cooperating Government, and with the prior 
written approval of the Contracting Officer or the Mission Director, the 
Contractor shall be reimbursed for--
    (i) The travel cost of travelers other than between the United 
States and the Cooperating Country and for local travel within other 
countries and
    (ii) Travel allowance for travelers while in travel status and while 
performing services hereunder in such other countries at rates not in 
excess of those prescribed by the Standardized Regulations.
    (f) Indirect travel for personal convenience. When travel is 
performed by an indirect route for the personal convenience of the 
traveler, the allowable costs of such travel will be computed on the 
basis of the cost of allowable air fare via the direct usually traveled 
route. If such costs include fares for air or ocean travel by foreign 
flag carriers, approval for indirect travel by such foreign flag 
carriers must be obtained from the Contracting Officer or the Mission 
Director before such travel is undertaken, otherwise only that portion 
of travel accomplished by United States-flag carriers will be 
reimbursable within the above limitation of allowable costs.
    (g) Limitation on travel by dependents. Travel costs and allowances 
will be allowed only for dependents of regular employees and such costs 
shall be reimbursed for travel from place of abode to assigned station 
in the Cooperating Country and return, only if dependent remains in the 
country for at least 9 months or one-half of the required tour of duty 
of the regular employee responsible for such dependent, whichever is 
greater. If the dependent is eligible for educational travel pursuant to 
the ``Differential and Allowances'' clause of this contract, time spent 
away from post resulting from educational travel will be counted as time 
at post.
    (h) Delays en route. The Contractor may grant to travelers under 
this contract reasonable delays en route while in travel status when 
such delays are caused by events

[[Page 75]]

beyond the control of such traveler or Contractor. It is understood that 
if delay is caused by physical incapacitation, personnel shall be 
eligible for such sick leave as provided under the ``Leave and 
Holidays'' clause of this contract.
    (i) Travel by privately owned automobile. The Contractor shall be 
reimbursed for the cost of travel performed by a regular employee in 
his/her privately owned automobile at a rate not to exceed that 
authorized in the Federal Travel Regulations plus authorized per diem 
for the employee and for each of the authorized dependents traveling in 
the automobile, if the automobile is being driven to or from the 
Cooperating Country as authorized under the contract, provided that the 
total cost of the mileage and the per diem paid to all authorized 
travelers shall not exceed the total constructive cost of fare and 
normal per diem by all authorized travelers by surface common carrier or 
authorized air fare, whichever is less.
    (j) Emergency and irregular travel and transportation. Emergency 
transportation costs and travel allowances while en route, as provided 
in this section will also be reimbursed not to exceed amounts authorized 
by the Foreign Service Travel Regulations for USAID-direct hire 
employees in like circumstances under the following conditions:
    (1) The costs of going from post of duty in the Cooperating Country 
to the employee's permanent, legal place of residence at the time he or 
she was employed for work under this contract or other location for 
Contractor employees and dependents and returning to the post of duty, 
when the Contractor's Chief of Party, with the concurrence of the 
Contracting Officer or Mission Director makes a written determination 
that such travel is necessary for one of the reasons specified in 
subparagraphs (j)(1) (i) and (ii) of this section. A copy of the written 
determination shall be furnished to the Contracting Officer.
    (i) Need for medical care beyond that available within the area to 
which the employee is assigned, or serious effect on physical or mental 
health if residence is continued at assigned post of duty, subject in 
either case, to the limitations stated in the clause of this contract 
entitled ``Personnel--Physical Fitness of Employee and Dependents.'' The 
Mission Director may authorize a medical attendant to accompany the 
employee at contract expense if, based on medical opinion, such an 
attendant is necessary.
    (ii) Death, or serious illness or injury of a member of the 
immediate family of the employee or the immediate family of the 
employee's spouse.
    (2) When, for any reason, the Mission Director determines it is 
necessary to evacuate the Contractor's entire team (employees and 
dependents) or Contractor dependents only, the Contractor will be 
reimbursed for travel and transportation expenses and travel allowance 
while en route, for the cost of the individuals going from post of duty 
in the Cooperating Country to the employee's permanent, legal place of 
residence at the time he or she was employed for work under this 
contract or other approved location. The return of such employees and 
dependents may also be authorized by the Mission Director when, in his/
her discretion, he/she determines it is prudent to do so.
    (3) The Mission Director may also authorize emergency or irregular 
travel and transportation in other situations, when in his/her opinion, 
the circumstances warrant such action. The authorization shall include 
the kind of leave to be used and appropriate restrictions as to time 
away from post, transportation of personal and/or household effects, 
etc. Requests for such emergency travel shall be submitted through the 
Contractor's Chief of Party.
    (k) Home leave travel. To the extent that home leave has been 
authorized as provided in the ``Leave and Holidays'' clause of this 
contract, the cost of travel for home leave is reimbursable for travel 
costs and travel allowances of travelers from the post of duty in the 
Cooperating Country to place of residence in the United States (or other 
location provided that the cost of such travel does not exceed the cost 
of travel to the employee's residence in the United States) and return 
to the post of duty in the Cooperating Country. Reimbursement for travel 
will be in accordance with the applicable cost principles and the 
provisions of this contract, and will be limited to the cost of travel 
by the most direct and expeditious route. When travel is by economy 
class accommodations, the Contractor will be reimbursed for the cost of 
transporting up to 22 pounds of accompanied personal baggage per 
traveler in addition to that regularly allowed with the economy ticket 
provided that the total number of pounds of baggage does not exceed that 
regularly allowed for first class travelers. Travel allowances for 
travelers shall not be in excess of the rates authorized in the 
Standardized Regulations as from time to time amended, for not more than 
the travel time required by scheduled commercial air carrier using the 
most expeditious route. One stopover en route for a period of not to 
exceed 24 hours is allowable when the traveler uses economy class 
accommodations for a trip of 14 hours or more of scheduled duration. 
Such stopover shall not be authorized when travel is by indirect route 
or is delayed for the convenience of the traveler. Per diem during such 
stopover shall be paid in accordance with the established practice of 
the Contractor but not to exceed the amounts stated in the Standardized 
Regulations.
    (l) Rest and recuperation travel. The Contractor shall be reimbursed 
for the cost of travel performed by regular employees and

[[Page 76]]

dependents for purposes of rest and recuperation provided that such 
reimbursement does not exceed that authorized for USAID direct hire 
employees, and provided further that no reimbursement will be made 
unless approval is given by the Contractor's Chief of party.
    (m) Transportation of motor vehicles, personal effects and household 
goods. (1) Transportation, including packing and crating costs, will be 
paid for shipping from the point of origin in the United States (or 
other location as approved by the Contracting Officer) to post of duty 
in the Cooperating Country and return to point of origin in the United 
States (or other location as approved by the Contracting Officer) of one 
privately-owned vehicle for each regular employee, personal effects of 
travelers and household goods of each regular employee not to exceed the 
limitations in effect for such shipments for USAID direct hire employees 
in accordance with the Foreign Service Travel Regulations as in effect 
when shipment is made.
    (2) If a regular employee does not complete one full year at post of 
duty (except for reasons beyond his/her control), the costs for 
transportation of vehicles, effects and goods to and from the post of 
duty are not reimbursable hereunder. If the employee serves more than 
one year but less than the required service in the Cooperating Country 
(except for reasons beyond his/her control) the costs for transportation 
of vehicles, effects and goods to the post of duty are reimbursable 
hereunder but the costs for transportation of vehicles, effects and 
goods from post of duty to the employee's permanent, legal place of 
residence at the time he or she was employed for work under this 
contract or other location as approved by the Contracting Officer are 
not reimbursable under this contract.
    (3) The cost of transporting motor vehicles and household goods 
shall not exceed the cost of packing, crating and transportation by 
surface. In the event that the carrier does not require boxing or 
crating of motor vehicles for shipment to the Cooperating Country, the 
cost of boxing or crating is not reimbursable. The transportation of a 
privately-owned motor vehicle for a regular employee may be authorized 
by the Contractor as replacement of the last such motor vehicle shipped 
under this contract for the employee when the Mission Director or his/
her designee determines in advance and so notifies the Contractor in 
writing that the replacement is necessary for reasons not due to the 
negligence or malfeasance of the regular employee. The determination 
shall be made under the same rules and regulations that apply to Mission 
employees.
    (n) Unaccompanied baggage. Unaccompanied baggage is considered to be 
those personal belongings needed by the traveler immediately upon 
arrival at destination. To permit the arrival of effects to coincide 
with the arrival of regular employees and dependents, consideration 
should be given to advance shipments of unaccompanied baggage. The 
Contractor will be reimbursed for costs of shipment of unaccompanied 
baggage (in addition to the weight allowance for household effects) not 
to exceed the limitations in effect for USAID direct hire employees in 
accordance with the Foreign Service Travel Regulations as in effect when 
shipment is made.
    This unaccompanied baggage may be shipped as air freight by the most 
direct route between authorized points of origin and destination 
regardless of the modes of travel used. This provision is applicable to 
home leave travel and to short-term employees when these are authorized 
by the terms of this contract.
    (o) Storage of household effects. The cost of storage charges 
(including packing, crating, and drayage costs) in the U.S. of household 
goods of regular employees will be permitted in lieu of transportation 
of all or any part of such goods to the Cooperating Country under 
paragraph (m) above provided that the total amount of effects shipped to 
the Cooperating Country or stored in the U.S. shall not exceed the 
amount authorized for USAID direct hire employees under the Uniform 
Foreign Service Travel Regulations.
    (p) International ocean transportation. (1) Flag eligibility 
requirements for ocean carriage are covered by the ``Source and 
Nationality Requirements'' clause of this contract.
    (i) Transportation of things. Where U.S. flag vessels are not 
available, or their use would result in a significant delay, the 
Contractor may obtain a release from this requirement from the 
Transportation Division, Office of Acquisition and Assistance, U.S. 
Agency for International Development, Washington, DC. 20523-1419, or the 
Mission Director, as appropriate, giving the basis for the request.
    (ii) Transportation of persons. Where U.S. flag vessels are not 
available, or their use would result in a significant delay, the 
Contractor may obtain a release from this requirement from the 
Contracting Officer or the Mission Director, as appropriate.
    (2) Transportation of foreign-made vehicles. Reimbursement of the 
costs of transporting a foreign-made motor vehicle will be made in 
accordance with the provisions of the Foreign Service Travel 
Regulations.
    (3) Reduced rates on U.S. flag carriers. Reduced rates on United 
States flag carriers are in effect for shipments of household goods and 
personal effects of USAID contract personnel. These reduced rates are 
available provided the shipper states on the bill of lading that the 
cargo is ``Personal property-not for resale-payment of freight charges 
is at U.S. Government (USAID) expense and any special or diplomatic 
discounts accorded this type cargo are applicable.'' The Contractor

[[Page 77]]

will not be reimbursed for shipments of household goods or personal 
effects in an amount in excess of the reduced rates available in 
accordance with the foregoing.

                             (End of clause)

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



Sec. 752.7003  Documentation for payment.

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

                  Documentation for Payment (NOV 1998)

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

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

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

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

BY:_____________________________________________________________________

TITLE:__________________________________________________________________

DATE:___________________________________________________________________
    (b) Local currency payment. The Contractor is fully responsible for 
the proper expenditure and control of local currency, if any, provided 
under this contract. Local currency will be provided to the Contractor 
in accordance with written instructions provided by the Mission 
Director. The written instructions will also include accounting, 
vouchering, and reporting procedures. A copy of the instructions shall 
be provided to the Contractor's Chief of Party and to the Contracting 
Officer. The costs of bonding personnel responsible for local currency 
are reimbursable under this contract.
    (c) Upon compliance by the Contractor with all the provisions of 
this contract, acceptance by the Government of the work and final 
report, and a satisfactory accounting by the Contractor of all 
Government-owned property for which the Contractor had custodial 
responsiblity, the Government shall promptly pay to the Contractor any 
moneys (dollars or local currency) due under the completion voucher. The 
Government will make suitable reduction for any disallowance or 
indebtedness by the Contractor by applying the proceeds of the voucher 
first to such deductions and next to any unliquidated balance of advance 
remaining under this contract.
    (d) The Contractor agrees that all approvals of the Mission Director 
and the Contracting Officer which are required by the provisions of this 
contract shall be preserved and made available as part of the 
Contractor's records which are required to be presented and made 
available by the clause of this contract entitled ``Audit and Records--
Negotiation''.

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

[[Page 78]]



Sec. 752.7004  Emergency locator information.

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

                Emergency Locator Information (JUL 1997)

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

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



Sec. 752.7005  Submission requirements for development experience 
          documents.

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

 Submission Requirements for Development Experience Documents (OCT 1997)

    (a) Contract reports and information/intellectual products. (1) The 
Contractor shall submit to the Development Experience Information 
Division of the Center for Development Information and Evaluation (PPC/
DCIE/DI) in the Bureau for Policy and Program Coordination, copies of 
reports and information products which describe, communicate or organize 
program/project development assistance activities, methods, 
technologies, management, research, results and experience as outlined 
in the Agency's ADS Chapter 540, section E540.5.2b(3). Information may 
be obtained from the Cognizant Technical Officer (CTO). These reports 
include: assessments, evaluations, studies, development experience 
documents, technical reports and annual reports. The Contractor shall 
also submit to PPC/CDIE/DI copies of information products including 
training materials, publications, databases, computer software programs, 
videos and other intellectual deliverable materials required under the 
Contract Schedule. Time-sensitive materials such as newsletters, 
brochures, bulletins or periodic reports covering periods of less than a 
year are not to be submitted.
    (2) Upon contract completion, the contractor shall submit to PPC/
CDIE/DI an index of all reports and information/intellectual products 
referenced in paragraph (a)(1) of this clause.
    (b) Submission requirements--(1) Distribution. (i) The contractor 
shall submit contract reports and information/intellectual products 
(referenced in paragraph (a)(1) of this clause) in electronic format and 
hard copy (one copy) to U.S. Agency for International Development PPC/
CDIE/DI, Attn: ACQUISITIONS, Washington D.C. 20523 at the same time 
submission is made to the CTO.
    (ii) The contractor shall submit the reports index referenced in 
paragraph (a)(2) of this clause and any reports referenced in paragraph 
(a)(1) of this clause that have not been previously submitted to PPC/
CDIE/DI, within 30 days after completion of the contract to the address 
cited in paragraph (b)(1)(i) of this clause.
    (2) Format. (i) Descriptive information is required for all 
Contractor products submitted. The title page of all reports and 
information products shall include the contract number(s), contractor 
name(s), name of the USAID cognizant technical office, the publication 
or issuance date of the document, document title, author name(s), and 
strategic objective or activity title and associated number. In 
addition, all materials submitted in accordance with this clause shall 
have attached on a separate cover sheet the name, organization, address, 
telephone number, fax number, and Internet address of the submitting 
party.
    (ii) The hard copy report shall be prepared using non-glossy paper 
(preferably recycled and white or off-white) using black ink. Elaborate 
art work, multicolor printing and expensive bindings are not to be used. 
Whenever possible, pages shall be printed on both sides.
    (iii) The electronic document submitted shall consist of only one 
electronic file which comprises the complete and final equivalent of the 
hard copy submitted.
    (iv) Acceptable software formats for electronic documents include 
WordPerfect, Microsoft Word, ASCII, and Portable Document Format (PDF). 
Submission in Portable Document format is encouraged.
    (v) The electronic document submission shall include the following 
descriptive information:
    (A) Name and version of the application software used to create the 
file, e.g., WordPerfect Version 6.1 or ASCII or PDF.
    (B) The format for any graphic and/or image file submitted, e.g., 
TIFF-compatible.

[[Page 79]]

    (C) Any other necessary information, e.g. special backup or data 
compression routines, software used for storing/retrieving submitted 
data, or program installation instructions.

[64 FR 5010, Feb. 2, 1999]



Sec. 752.7006  Notices.

    The following clause shall be used in all USAID contracts.

                           Notices (APR 1984)

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

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



Sec. 752.7007  Personnel compensation.

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

                    Personnel Compensation (JUL 2007)

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

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



Sec. 752.7008  Use of Government facilities or personnel.

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

          Use of Government Facilities or Personnel (APR 1984)

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

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



Sec. 752.7009  Marking.

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

                           Marking (JAN 1993)

    (a) It is USAID policy that USAID-financed commodities and shipping 
containers, and project construction sites and other project locations 
be suitably marked with the USAID emblem. Shipping containers are also 
to be marked with the last five digits of the USAID financing document 
number. As a general rule, marking is not required for raw materials 
shipped in bulk (such as coal, grain, etc.), or for semifinished 
products which are not packaged.
    (b) Specific guidance on marking requirements should be obtained 
prior to procurement of commodities to be shipped, and as early as 
possible for project construction sites and other project locations. 
This guidance will be provided through the cognizant technical office 
indicated on the cover page of this contract, or by the Mission Director 
in the Cooperating Country to which commodities are being shipped, or in 
which the project site is located.

[[Page 80]]

    (c) Authority to waive marking requirements is vested with the 
Regional Assistant Administrators, and with Mission Directors.
    (d) A copy of any specific marking instructions or waivers from 
marking requirements is to be sent to the Contracting Officer; the 
original should be retained by the Contractor.

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



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

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

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

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

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



Sec. 752.7011  Orientation and language training.

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

              Orientation and Language Training (APR 1984)

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



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

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

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

    (a) Safeguarding the rights and welfare of human subjects in 
research conducted under a USAID contract is the responsibility of the 
contractor. USAID has adopted the Common Federal Policy for the 
Protection of Human Subjects. USAID's Policy is found in Part 225 of 
Title 22 of the Code of Federal Regulations (the ``Policy''). Additional 
interpretation, procedures, and implementation guidance of the Policy 
are found in USAID General Notice entitled ``Procedures for the 
Protection of Human Subjects in Research Supported by USAID'', issued 
April 19, 1995, as from time to time amended (a copy of which is 
attached to this contract). USAID's Cognizant Human Subjects Officer 
(CHSO) and USAID/W has oversight, guidance, and interpretation 
responsibility for the Policy.
    (b) Contractors must comply with the Policy when humans are the 
subject of research, as defined in 22 CFR 225.102(d), performed as part 
of the contract, and contractors must provide ``assurance'', as required 
by 22 CFR 225.103, that they follow and abide by the procedures in the 
Policy. See also Section 5 of the April 19, 1995, USAID General Notice 
which sets forth activities to which the Policy is applicable. The 
existence of a bona fide, applicable assurance approved by the 
Department of Health and Human Services (HHS) such as the ``multiple 
project assurance'' (MPA) will satisfy this requirement. Alternatively, 
contractors can provide an acceptable written assurance to USAID as 
described in 22 CFR 225.103. Such assurances must be determined by the 
CHSO to be acceptable prior to any applicable research being initiated 
or conducted under the contract. In some limited instances outside the 
U.S., alternative systems for the protection of human subjects may be 
used provided they are deemed ``at least equivalent'' to those

[[Page 81]]

outlined in Part 225 (see 22 CFR 225.101(h)). Criteria and procedures 
for making this determination are described in the General Notice cited 
in the preceding paragraph.
    (c) Since the welfare of the research subject is a matter of concern 
to USAID as well as to the contractor, USAID staff, consultants and 
advisory groups may independently review and inspect research, and 
research processes and procedures involving human subjects, and based on 
such findings, the CHSO may prohibit research which presents 
unacceptable hazards or otherwise fails to comply with USAID procedures. 
Informed consent documents must include the stipulation that the 
subject's records may be subject to such review.

[61 FR 39095, July 26, 1996]



Sec. 752.7013  Contractor-mission relationships.

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

               Contractor-Mission Relationships (OCT 1989)

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

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

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

                             (End of clause)

[54 FR 46391, Nov. 3, 1989]



Sec. 752.7014  Notice of changes in travel regulations.

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

           Notice of Changes in Travel Regulations (JAN 1990)

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

                             (End of clause)

[55 FR 6805, Feb. 27, 1990]

[[Page 82]]



Sec. 752.7015  Use of pouch facilities.

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

                   Use of Pouch Facilities (JUL 1997)

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

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



Sec. 752.7016--752.7017  [Reserved]



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

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

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

    (a) In accordance with the requirements of USAID Automated Directive 
System (ADS) 253.5.6b, the Contractor shall enroll all non-U.S. trainees 
(hereinafter referred to as ``participants''), whose training in the 
U.S. is financed by USAID under this contract, in USAID's Health and 
Accident Coverage (HAC) program. Sponsored trainees enrolled in third-
country or in-country training events are not eligible for USAID's HAC 
program, but the Contractor may obtain alternative local medical and 
accident insurance at contract expense, provided the cost is consistent 
with the cost principles in FAR 31.2.
    (b) When enrollment in the HAC program is required per paragraph (a) 
of this clause, the Contractor must enroll each participant in the HAC 
program through one of two designated contractors prior to the 
initiation of travel by the participant. USAID has developed an Agency-
wide database training management system, the Training Results and 
Information Network (``TraiNet''), which is the preferred system for 
managing USAID's participant training program, including enrollment in 
the HAC program. However, until such time as the USAID sponsoring unit 
(as defined in ADS 253) has given the Contractor access to USAID's 
``TraiNet'' software for trainee tracking and HAC enrollment, the 
Contractor must fill out and mail the Participant Data Form (PDF) (Form 
USAID 1381-4) to USAID. The Contractor can obtain information regarding 
each HAC program contractor, including contact information, and a supply 
of the PDF forms and instructions for completing and submitting them, by 
contacting the data base contractor serving the Global Center for Human 
Capacity Development (G/HCD).
    (c) The Contractor must ensure that HAC enrollment begins 
immediately upon the participant's departure for the United States for 
the purpose of participating in a training

[[Page 83]]

program financed by USAID, and that enrollment continues in full force 
and effect until the participant returns to his/her country of origin, 
or is released from USAID's responsibility, whichever is the sooner.
    (1) The HAC insurance provider, not the Contractor, shall be 
responsible for paying all reasonable and necessary medical 
reimbursement charges not otherwise covered by student health service or 
other insurance programs, subject to the availability of funds for such 
purposes, in accordance with the standards of coverage established by 
USAID under its HAC program and by the HAC providers' contracts.
    (2) After HAC enrollment, upon receipt of HAC services invoice from 
the selected HAC provider, the Contractor shall submit payment directly 
to the HAC provider.
    (3) The Contractor is responsible for ensuring that participants and 
any stakeholders (as defined in ADS 253) are advised that USAID is not 
responsible for any medical claims in excess of the coverages provided 
by the HAC program, or for medical claims not eligible for coverage 
under the HAC program, or not otherwise covered in this section.
    (d) The Contractor, to the extent that it is an educational 
institution with a mandatory student health service program, shall also 
enroll participants in that institution's student health service 
program. Medical costs which are covered under the institution's student 
health service shall not be eligible for payment under USAID's HAC 
program.
    (e) If the Contractor has a mandatory, non-waivable health and 
accident insurance program for students, the costs of such insurance 
will be allowable under this contract. Any claims eligible under such 
insurance will not be payable under USAID's HAC plan or under this 
contract. Even though the participant is covered by the Contractor's 
mandatory, non-waivable health and accident insurance program, the 
participant MUST be enrolled in USAID's more comprehensive HAC program.
    (f) Medical conditions pre-existing to the participant's sponsorship 
for training by USAID, discovered during the required pre-departure 
medical examination, are grounds for ineligibility for sponsorship 
unless specifically waived by the sponsoring unit, and covered through a 
separate insurance policy maintained by the participant or his employer, 
or a letter of guarantee from the participant or the employer (which 
thereby assumes liability for any related charges that might 
materialize. See ADS 253).

[64 FR 5010, Feb. 2, 1999]



Sec. 752.7019  Participant training.

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

                     Participant Training (JAN 1999)

    (a) Definitions. (1) Participant training is the training of any 
foreign national outside of his or her home country, using USAID funds.
    (2) A Participant is any foreign national being trained under this 
contract outside of his or her country.
    (b) Applicable regulations. Participant training conducted under 
this contract shall comply with the policies and essential procedures 
pertaining to training-related services contained in USAID Automated 
Directive System (ADS) Ch. 253 ``Training for Development Impact''. Any 
exceptions to ADS 253 requirements are specified as such within this 
contract. The current version of Chapter 253 may be obtained directly 
from the USAID website at http://www.info.usaid.gov/pubs/ads/200.
    (c) The contractor shall be reimbursed for the reasonable and 
allocable costs incurred in providing training to participants in the 
United States or other approved location provided such costs do not 
exceed the limitations in, or have been waived in accordance with, ADS 
253.5.5.

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

[64 FR 5011, Feb. 2, 1999]



Sec. 752.7020  [Reserved]



Sec. 752.7021  Changes in tuition and fees.

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

                 Changes in Tuition and Fees (APR 1984)

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

[[Page 84]]

amounts of tuition and fees results in there being inadequate funds 
remaining in this contract to meet the costs of the next academic term, 
the Contractor will so advise USAID. USAID may then provide such 
additional funds as required to complete the program.



Sec. 752.7022  Conflicts between contract and catalog.

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

            Conflicts Between Contract and Catalog (APR 1984)

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



Sec. 752.7023  Required visa form for USAID participants.

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

          Required Visa Form for USAID Participants (APR 1984)

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



Sec. 752.7024  Withdrawal of students.

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

                    Withdrawal of Students (APR 1984)

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



Sec. 752.7025  Approvals.

    For use in all USAID contracts.

                          Approvals (APR 1984)

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



Sec. 752.7026  [Reserved]



Sec. 752.7027  Personnel.

    For use in all USAID services contracts involving performance 
overseas. Note that paragraphs (f) and (g) of this clause are for use 
only in cost reimbursement contracts.

                          Personnel (DEC 1990)

    (a) Clearance. (1) Individuals engaged or assigned within the United 
States. The contractor will obtain written notification from the 
Contracting Officer of Cooperating Country clearance of any employee 
sent outside the United States to perform duties under this contract.
    (2) Individuals engaged or assigned when outside the United States. 
No individual shall be engaged or assigned when outside the United 
States to perform work outside the United States under this contract 
unless authorized in the schedule or otherwise approved by the 
Contracting Officer or Mission Director. However, when services are 
performed in the Cooperating Country on a casual or irregular basis or 
in an emergency, exception to this provision can be made in accordance 
with instructions or regulations established by the Mission Director.
    (b) Physical fitness of employees and dependents. See the clause of 
this contract entitled Physical Fitness.
    (c) Conformity to laws and regulations of Cooperating Country. 
Contractor agrees to use its best efforts to assure that its employees 
and their dependents, while in the Cooperating Country, abide by all 
applicable laws and regulations of the Cooperating Country and political 
subdivisions thereof.
    (d) Importation or sale of personal property or automobiles. To the 
extent permitted by Cooperating Country laws, the importation and sale 
of personal property or automobiles by contractor employees and their 
dependents in the Cooperating Country shall be subject to the same 
limitations and prohibitions which apply to U.S. nationals employed by

[[Page 85]]

the Mission. This provision does not apply to employees or consultants 
who are citizens or legal residents of the Cooperating Country.
    (e) Economic and financial activities. Other than work to be 
performed under this contract for which an employee or consultant is 
assigned by the contractor, no such employee or consultant of the 
contractor shall engage, directly or indirectly, either in his/her own 
name or in the name or through the agency of another person, in any 
business, profession or occupation in the Cooperating Country or other 
foreign countries to which he/she is assigned, nor shall he make loans 
or investments to or in any business, profession or occupation in the 
Cooperating Country or other foreign countries in which he/she is 
assigned. This provision does not apply to employees or consultants who 
are citizens or legal residents of the Cooperating Country.

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

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

                             (End of clause)

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



Sec. 752.7028  Differential and allowances.

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

                 Differentials and Allowances (JUL 1996)

    (This clause does not apply to TCN or CCN employees. TCN and CCN 
employees are not eligible for differentials and allowances, unless 
specifically authorized by the cognizant Assistant Administrator or 
Mission Director. A copy of such authorization shall be retained and 
made available as part of the contractor's records which are required to 
be preserved and made available by the ``Examination of Records by the 
Comptroller General'' and ``Audit'' clauses of this contract).

    (a) Post differential. Post differential is an additional 
compensation for service at places in foreign areas where conditions of 
environment differ substantially from conditions of environment in the 
continental United States and warrant additional compensation as a 
recruitment and retention incentive. In areas where post differential is 
paid to USAID direct-hire employees, post differential not to exceed the 
percentage of salary as is provided such USAID employees in accordance 
with the Standardized Regulations (Government Civilians, Foreign Areas), 
Chapter 500 (except the limitation contained in Section 552, ``Ceiling 
on Payment'') Tables-Chapter 900, as from time to time amended, will be 
reimbursable hereunder for employees in respect to amounts earned during 
the time such employees actually spend overseas on work under this 
contract. When such post differential is provided to regular employees 
of the Contractor, it shall be payable beginning on the date of arrival 
at the post of assignment and continue, including periods away from post 
on official business, until the close of business on the day of 
departure from post of assignment en route to the United States. Sick or 
vacation leave taken at or away from the post of assignment will not 
interrupt the continuity of the assignment or require a discontinuance 
of such post differential payments, provided such leave is not taken 
within the United States or the territories of the United States. Post 
differential will not be payable while the employee is away from his/her 
post of assignment for purposes of home leave. Short-term employees 
shall be entitled to

[[Page 86]]

post differential beginning with the forty-third (43rd) day at post.
    (b) Living quarters allowance. Living quarters allowance is an 
allowance granted to reimburse an employee for substantially all of his/
her cost for either temporary or residence quarters whenever Government-
owned or Government-rented quarters are not provided to him/her at his/
her post without charge. Such costs are those incurred for temporary 
lodging (temporary lodging allowance) or one unit of residence quarters 
(living quarters allowance) and include rent, plus any costs not 
included therein for heat, light, fuel, gas, electricity and water. The 
temporary lodging allowance and the living quarters allowance are never 
both payable to an employee for the same period of time. The Contractor 
will be reimbursed for payments made to employees for a living quarters 
allowance for rent and utilities if such facilities are not supplied. 
Such allowance shall not exceed the amount paid USAID employees of 
equivalent rank in the Cooperating Country, in accordance with either 
the Standardized Regulations (Government Civilians, Foreign Areas), 
Chapter 130, as from time to time amended, or other rates approved by 
the Mission Director. Subject to the written approval of the Mission 
Director, short-term employees may be paid per diem (in lieu of living 
quarters allowance) at rates prescribed by the Federal Travel 
Regulations, as from time to time amended, during the time such short-
term employees spend at posts of duty in the Cooperating Country under 
this contract. In authorizing such per diem rates, the Mission Director 
shall consider the particular circumstances involved with respect to 
each such short-term employee including the extent to which meals and/or 
lodging may be made available without charge or at nominal cost by an 
agency of the United States Government or of the Cooperating Government, 
and similar factors.
    (c) Temporary quarters subsistence allowance. Temporary quarters 
subsistence allowance is a quarters allowance granted to an employee for 
the reasonable cost of temporary quarters incurred by the employee and 
his family for a period not in excess of (i) 90 days after first arrival 
at a new post in a foreign area or a period ending with the occupation 
of residence (permanent) quarters, if earlier, and (ii) 30 days 
immediately preceding final departure from the post subsequent to the 
necessary vacating of residence quarters, unless an extension is 
authorized in writing by the Mission Director. The Contractor will be 
reimbursed for payments made to employees and authorized dependents for 
temporary quarters subsistence allowance, in lieu of living quarters 
allowance, not to exceed the amount set forth in the Standardized 
Regulations (Government Civilians, Foreign Areas), Chapter 120, as from 
time to time amended.
    (d) Post allowance. Post allowance is a cost-of-living allowance 
granted to an employee officially stationed at a post where the cost of 
living, exclusive of quarters cost, is substantially higher than in 
Washington, DC. The Contractor will be reimbursed for payments made to 
employees for post allowance not to exceed those paid USAID employees in 
the Cooperating Country, in accordance with the Standardized Regulations 
(Government Civilians, Foreign Areas), Chapter 220, as from time to time 
amended.
    (e) Supplemental post allowance. Supplemental post allownce is a 
form of post allowance granted to an employee at his/her post when it is 
determined that assistance is necessary to defray extraordinary 
subsistence costs. The Contractor will be reimbursed for payments made 
to employees for supplemental post allowance not to exceed the amount 
set forth in the Standardized Regulations (Government Civilians, Foreign 
Areas), Chapter 230, as from time to time amended.
    (f) Educational allowance. Educational allowance is an allowance to 
assist an employee in meeting the extraordinary and necessary expenses, 
not otherwise compensated for, incurred by reason of his/her service in 
a foreign area in providing adequate elementary and secondary education 
for his/her children. The Contractor will be reimbursed for payments 
made to regular employees for educational allowances for their dependent 
children in amounts not to exceed those set forth in the Standardized 
(Regulations Government Civilians, Foreign Areas), Chapter 270, as from 
time to time amended.
    (g) Educational travel. Educational travel is travel to and from a 
school in the United States for secondary education (in lieu of an 
educational allowance) and for college education. The Contractor will be 
reimbursed for payments made to regular employees for educational travel 
for their dependent children provided such payment does not exceed that 
which would be payable in accordance with the Standardized Regulations 
(Government Civilians, Foreign Areas), Chapter 280, as from time to time 
amended. Educational travel shall not be authorized for regular 
employees whose assignment is less than two years.
    (h) Separate maintenance allowance. Separate maintenance allowance 
is an allowance to assist an employee who is compelled, by reason of 
dangerous, notably unhealthful, or excessively adverse living conditions 
at his/her post of assignment in a foreign area, or for the convenience 
of the Government, to meet the additional expense of maintaining his/her 
dependents elsewhere than at such post. The Contractor will be 
reimbursed for payments made to regular employees for a

[[Page 87]]

separate maintenance allowance not to exceed that made to Aid employees 
in accordance with the Standardized Regulations (Government Civilians, 
Foreign Areas), Chapter 260, as from time to time amended.
    (i) Payments during evacuation. The Standardized Regulations 
(Government Civilians, Foreign Areas) provide the authority for 
efficient, orderly, and equitable procedure for the payment of 
compensation, post differential and allowances in the event of an 
emergency evacuation of employees or their dependents, or both, from 
duty stations for military or other reasons or because of imminent 
danger to their lives. If evacuation has been authorized by the Mission 
Director the Contractor will be reimbursed for payments made to 
employees and authorized dependents evacuated from their post of 
assignment in accordance with the Standardized Regulations (Government 
Civilians, Foreign Areas), Chapter 600, and the Federal Travel 
Regulations, as from time to time amended.
    (j) Danger pay allowance. (1) The contractor will be reimbursed for 
payments made to its employees for danger pay not to exceed that paid 
USAID employees in the cooperating country, in accordance with the 
Standardized Regulations (Government Civilians, Foreign Areas), Chapter 
650, as from time to time amended.
    (2) Danger pay is an allowance that provides additional compensation 
above basic compensation to an employee in a foreign area where civil 
insurrection, civil war, terrorism or wartime conditions threaten 
physical harm or imminent danger to the health or well-being of the 
employee. The danger pay allowance is in lieu of that part of the post 
differential which is attributable to political violence. Consequently, 
the post differential may be reduced while danger pay is in effect to 
avoid dual crediting for political violence.

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



Sec. 752.7029  Post privileges.

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

                       Post Privileges (JUL 1993)

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

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



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

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

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

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



Sec. 752.7031  Leave and holidays.

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

                      Leave and Holidays (OCT 1989)

    (a) Vacation leave. (1) The Contractor may grant to its employees 
working under this contract vacations of reasonable duration in 
accordance with the Contractor's practice for its employees, but in no 
event shall such vacation leave be earned at a rate exceeding 26 work 
days per annum. Reimbursement for vacation leave is limited to the 
amount earned by employees while serving under this contract.
    For regular employees during their tour of duty in the Cooperating 
Country, vacation

[[Page 88]]

leave is provided under this contract primarily for purposes of 
affording necessary rest and recreation. The Contractor's Chief of 
Party, the employee and the Cooperating Country institution associated 
with this project shall develop vacation leave schedules early in the 
employee's tour of duty taking into consideration project requirements, 
employee preference and other factors.
    (2) Leave taken during the concluding weeks of an employee's tour 
shall be included in the established leave schedule and be limited to 
that amount of leave which can be earned during a twelve-month period 
unless approved in accordance with paragraph (a)(3) of this clause.
    (3) Vacation leave earned but not taken by the end of the employee's 
tour pursuant to paragraphs (a) (1) and (2) of this clause will be 
forfeited unless the requirements of the project precluded the employee 
from taking such leave, and the Contracting Officer (with the 
endorsement of the Mission) approves one of the following as an 
alternative:
    (i) Taking, during the concluding weeks of the employee's tour, 
leave not permitted under (a)(2) of this section, or
    (ii) Lump-sum payment for leave not taken provided such leave does 
not exceed the number of days which can be earned by the employee during 
a twelve-month period.
    (b) Sick Leave. Sick leave is earned by employees in accordance with 
the Contractor's usual practice but not to exceed 13 work days per annum 
or 4 hours every 2 weeks. Additional sick leave after use of accrued 
vacation leave may be advanced in accordance with Contractor's usual 
practice, if in the judgment of the Contractor's Chief of Party it is 
determined that such additional leave is in the best interest of the 
project. In no event shall such additional leave exceed 30 days. The 
Contractor agrees to reimburse USAID for leave used in excess of the 
amount earned during the employee's assignment under this contract. Sick 
leave earned and unused at the end of a regular tour of duty may be 
carried over to an immediately-succeeding tour of duty under this 
contract. The use of home leave authorized under this clause shall not 
constitute a break in service for the purpose of sick leave carry-over. 
Contractor employees will not be compensated for unused sick leave at 
the completion of their duties under this contract.
    (c) Home leave. (1) Home leave is leave earned for service abroad 
for use only in the United States, in the Commonwealth of Puerto Rico, 
or in the possessions of the United States.
    (2) A regular employee who is a U.S. citizen or resident and has 
served at least 2 years overseas, as defined in paragraph (c)(4) of this 
clause, under this contract and has not taken more than 30 workdays 
leave (vacation, sick, or leave without pay) in the United States, may 
be granted home leave of not more than 15 workdays for each such year of 
service overseas, provided that such regular employee agrees to return 
overseas upon completion of home leave under an additional 2 year 
appointment, or for a shorter period of not less than 1 year of overseas 
service under the contract if the Mission Director has approved in 
advance. Home leave must be taken in the United States, the Commonwealth 
of Puerto Rico, or the possessions of the United States; any days spent 
elsewhere will be charged to vacation leave or leave without pay.
    (3) Notwithstanding the requirement in paragraph (c)(2), of this 
clause, that the Contractor's regular employee must have served 2 years 
overseas under this contract to be eligible for home leave, Contractor 
may grant advance home leave to such regular employee subject to all of 
the following conditions:
    (i) Granting of advance home leave would in each case serve to 
advance the attainment of the objectives of this contract;
    (ii) The regular employee shall have served a minimum of 18 months 
in the Cooperating Country on his/her current tour of duty under this 
contract; and
    (iii) The regular employee shall have agreed to return to the 
Cooperating Country to serve out the remainder of his/her current tour 
of duty and an additional 2 year appointment under this contract, or 
such other additional appointment of not less than 1 year of overseas 
service as the Mission Director may approve.
    (4) The period of service overseas required under paragraph (c)(2) 
or paragraph (c)(3) of this clause shall include the actual days spent 
in orientation in the United States (less language training) and the 
actual days overseas beginning on the date of departure from the United 
States port of embarkation on international travel and continuing, 
inclusive of authorized delays en route, to the date of arrival at the 
United States port of debarkation from international travel. Allowable 
vacation and sick leave taken while overseas, but not leave without pay, 
shall be included in the required period of service overseas. An amount 
equal to the number of days vacation and sick leave taken in the United 
States, the Commonwealth of Puerto Rico, or the possessions of the 
United States will be added to the required period of service overseas.
    (5) Salary during travel to and from the United States for home 
leave will be limited to the time required for travel by the most 
expeditious air route. The Contractor will be responsible for 
reimbursing USAID for salary payments made during home leave if in spite 
of the undertaking of the new appointment the regular employee, except 
for reasons beyond his/her control as determined by the Contracting 
Officer, does not return overseas

[[Page 89]]

and complete the additional required service. Unused home leave is not 
reimbursable under this contract.
    (6) To the extent deemed necessary by the Contractor, regular 
employees in the United States on home leave may be authorized to spend 
not more than 5 days in work status for consultation at home office/
campus or at USAID/Washington before returning to their post of duty. 
Consultation at locations other than USAID/Washington or home office/
campus, as well as any time in excess of 5 days spent for consultation, 
must be approved by the Mission Director or the Contracting Officer.
    (7) Except as provided in the schedule or approved by the Mission 
Director or the Contracting Officer, home leave is not authorized for 
TCN or CCN employees.
    (d) Holidays. Holidays for Contractor employees serving in the 
United States shall be in accordance with the Contractor's established 
policy and practice. Holidays for Contractor employees serving overseas 
should take into consideration local practices and shall be established 
in collaboration with the Mission Director.
    (e) Military leave. Military leave of not more than 15 calendar days 
in any calendar year may be granted in accordance with the Contractor's 
usual practice to each regular employee whose appointment is not limited 
to 1 year or less and who is a reservist of the United States Armed 
Forces, provided that such military leave has been approved in advance 
by the cognizant Mission Director or Assistant Administrator. A copy of 
any such approval shall be provided to the Contracting Officer.
    (f) Leave Records. The Contractor's leave records shall be preserved 
and made available as part of the contractor's records which are 
required to be preserved and made available by the Examination of 
Records by the Comptroller General and Audit clauses of this contract.

                             (End of clause)

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



Sec. 752.7032  International travel approval and notification 
          requirements.

    For use in any USAID contract requiring international travel.

 International Travel Approval and Notification Requirements (JAN 1990)

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

                             (End of clause)

[55 FR 6805, Feb. 27, 1990]



Sec. 752.7033  Physical fitness.

    For use in all USAID contracts involving performance overseas.

                       Physical Fitness (JUL 1997)

    (The requirements of this provision do not apply to employees hired 
in the Cooperating Country or to authorized dependents who were already 
in the Cooperating Country when their sponsoring employee was hired.)
    (a) Assignments of less than 60 days in the Cooperating Country. The 
contractor shall require employees being assigned to the Cooperating 
Country for less than 60 days to be examined by a licensed doctor of 
medicine. The contractor shall require the doctor to provide to the 
contractor a written statement that in his/her medical opinion the 
employee is physically qualified to engage in the type of activity for 
which he/she is employed and the employee is physically able to reside 
in the country to which he/she is assigned. Under a cost reimbursement 
contract, if the contractor has no written statement of medical opinion 
on file prior to the departure for the Cooperating Country of any 
employee and such employee is unable to perform the type of activity for 
which he/she is employed or cannot complete his/her tour of duty because 
of any physical disability (other than physical disability arising from 
an accident while employed under this contract), the contractor shall be 
responsible for returning the disabled employee to his/her point of hire 
and providing a replacement at no additional cost to the Government. In 
addition, in the case of a cost reimbursement contract, the contractor 
shall not be entitled to reimbursement for any additional costs 
attributable to delays or other circumstances caused by the employee's 
inability to complete his/her tour of duty.

[[Page 90]]

    (b) Assignments of 60 days or more in the Cooperating Country. (1) 
The Contracting Officer shall provide the contractor with a reproducible 
copy of the ``USAID Contractor Employee Physical Examination Form''. 
This form is for collection of information; it has been reviewed and 
approved by OMB (see 701.105(a)). Information required by the Paperwork 
Reduction Act for reporting the burden estimate, the points of contact 
regarding burden estimate, and the OMB approval expiration date, are 
printed on the form. The contractor shall reproduce the form as 
required, and provide a copy to each employee and authorized dependent 
proposed for assignments of 60 days or more in the Cooperating Country. 
The contractor shall have the employee and all authorized dependents 
obtain a physical examination from a licensed physician, who will 
complete the form for each individual. The employee will deliver the 
physical examination form(s) to the embassy health unit in the 
Cooperating Country.
    (2) (The following information is provided for two purposes: To 
assist fixed price offerors to develop their price proposal, and to 
provide cost reimbursement contractors with guidance in determining 
reasonable and allowable costs.) As a contribution to the cost of 
medical examinations, USAID shall reimburse the contractor for the 
physical examination authorized in paragraph (a) of this section in an 
amount not to exceed $100 for the physical examination, plus 
reimbursement of charges for immunizations to the extent not covered by 
the contractor's health insurance policy. For physical examinations 
authorized in paragraph (b)(1) above, the USAID contribution to the cost 
of the examination shall be as follows:
    (i) For the employee and authorized dependents 12 years of age and 
over, one half of the cost of each examination up to a maximum USAID 
share of $300 per individual, plus reimbursement of charges for 
immunizations to the extent not covered by the contractor's health 
insurance policy.
    (ii) For authorized dependents under 12 years of age, one half of 
the cost of each examination up to a maximum USAID share of $120 per 
individual, plus reimbursement of charges for immunizations to the 
extent not covered by the contractor's health insurance policy.
    (iii) The contractor must obtain the prior written approval of the 
Contracting Officer to receive any USAID contributions higher than these 
limits.

                             (End of clause)

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



Sec. 752.7034  Acknowledgement and disclaimer.

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

                Acknowledgement and Disclaimer (DEC 1991)

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

                             (End of clause)

[57 FR 5237, Feb. 13, 1992]



Sec. 752.7035  Public notices.

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

[[Page 91]]

                        Public Notices (DEC 1991)

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

                             (End of clause)

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

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

                             PART 753_FORMS

                          Subpart 753.1_General

Sec.

Sec. 753.107 Obtaining forms.

                   Subpart 753.2_Prescription of Forms


Sec. 753.270 Prescription of USAID Forms.

                   Subpart 753.3_Illustration of Forms


Sec. 753.300 Scope of subpart.

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

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

                          Subpart 753.1_General



Sec. 753.107  Obtaining forms.

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

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

                   Subpart 753.2_Prescription of Forms



Sec. 753.270  Prescription of USAID forms.

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

                   Subpart 753.3_Illustration of Forms



Sec. 753.300  Scope of subpart.

    USAID forms are not illustrated in the AIDAR. Copies of any USAID 
form prescribed in the AIDAR may be obtained as provided in 753.107.



               Sec. Appendixes A-C to Chapter 7 [Reserved]



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

    1. General. (a) Purpose. This appendix sets forth the authority, 
policy, and procedures under which USAID contracts with a U.S. citizen 
or U.S. resident alien for personal services abroad.
    (b) Definitions. (1) Personal services contract (PSC) means a 
contract that, by its express terms or as administered, make the 
contractor personnel appear, in effect, Government employees (see FAR 
37.104).
    (2) Employer-employee relationship means an employment relationship 
under a service contract with an individual which occurs when, as a 
result of the contract's terms or the manner of its administration 
during performance, the contractor is subject to the relatively 
continuous supervision and control of a Government officer or employee.
    (3) Non-person services contract means a contract under which the 
personnel rendering the services are not subject either by the 
contract's terms or by the manner of its administration, to the 
supervision and control usually prevailing in relationships between the 
Government and its employees.
    (4) Independent contractor relationship means a contract 
relationship in which the contractor is not subject to the supervision

[[Page 92]]

and control prevailing in relationships between the Government and its 
employees. Under this relationship, the Government does not normally 
supervise the performance of the work, control the days of the week or 
hours of the day in which it is to be performed, or the location of 
performance.
    (5) Resident hire means a U.S. citizen who, at the time of hire as a 
PSC, resides in the cooperating country as a spouse or dependent of a 
U.S. citizen employed by a U.S. government agency or under any U.S. 
government-financed contract or agreement, or for reasons other than for 
employment with a U.S. government agency or under any U.S. government-
financed contract or agreement. A U.S. citizen for purposes of this 
definition also includes persons who at the time of contracting are 
lawfully admitted permanent residents of the United States.
    (6) U.S. resident alien means a non-U.S. citizen lawfully admitted 
for permanent residence in the United States.
    (7) Abroad means outside the United States and its territories and 
possessions.
    (8) USAID direct-hire employees means civilian employees appointed 
under USAID Handbook 25 procedures or superseding Automated Directive 
System (ADS) Chapters.

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

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

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

    4. Policy. (a) General. USAID may finance, with either program or 
operating expense (OE) funds, the cost of personal services contracts as 
part of the Agency's program of foreign assistance by entering into a 
direct contract with an individual U.S. citizen or U.S. resident alien 
for personal services abroad.
    (1) Program funds. Under the authority of Section 635(h) of the FAA, 
program funds may be obligated for periods up to five years where 
necessary and appropriate to the accomplishment of the tasks involved.
    (2) Operating Expense Funds. Pursuant to USAID budget policy, OE 
funded salaries and other recurrent cost items may be forward funded for 
a period of up to three (3) months beyond the fiscal year in which these 
funds were obligated. Non-recurring cost items may be forward funded for 
periods not to exceed twenty-four (24) months where necessary and 
appropriate to accomplishment of the work. \2\
---------------------------------------------------------------------------

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

    (b) Limitations on Personal Services Contracts. (1) Personal 
services contracts may only be used when adequate supervision is 
available.
    (2) Personal services contracts may be used for commercial 
activities. Commercial activities provide a product or service which 
could be obtained from a commercial source. See Attachment A of OMB 
Circular A-76 for a representative list of such activities.
    (3) Notwithstanding any other provision of USAID directives, 
regulations or delegations, U.S. citizen personal services contractors 
(USPSCs) may be delegated or assigned any authority, duty or 
responsibility delegable to U.S. citizen direct-hire employees (USDH 
employees) except that:
    a. They may not supervise U.S. direct-hire employees of USAID or 
other U.S. Government agencies. They may supervise USPSCs and non-U.S. 
citizen employees.
    b. They may not be designated as Contracting Officers or delegated 
authority to sign obligating or subobligating documents.
    c. They may represent the agency, except that communications that 
reflect a final policy, planning or budget decision of the agency must 
be cleared by a USDH employee.
    d. They may participate in personnel selection matters, but may not 
be delegated authority to make a final decision on personnel selection.
    e. Exceptions to the limitations in this paragraph (b)(3) must be 
approved by the Assistant Administrator for Management (AA/M).

[[Page 93]]

    (c) Withholdings and Fringe Benefits. (1) Personal services 
contractors (PSCs) are Government employees for purposes of the Internal 
Revenue Code (Title 26 of the United States Code) and are, therefore, 
subject to social security (FICA) and Federal income tax (FIT) 
withholdings. As employees, they are ineligible for the ``foreign earned 
income'' exclusion under the Internal Revenue Service (IRS) regulations 
(see 26 CFR 1.911-3(c)(3)).
    (2) Personal services contractors are treated on par with other 
Government employees, except for programs based on any law administered 
by the Federal Office of Personnel Management (e.g., incentive awards, 
life insurance, health insurance, and retirement programs covered by 5 
CFR Parts 530, 531, 831, 870, 871, and 890). While PSCs are ineligible 
to participate in any of these programs, the following fringe benefits 
are provided as a matter of policy:
    (i) The employer's FICA contribution for retirement purposes.
    (ii) A contribution against the actual cost of the PSC's annual 
health and life insurance costs. Proof of health and life insurance 
coverage and its actual cost to the PSC shall be submitted to the 
Contracting Officer before any contribution is made. (See also paragraph 
4(c)(3) of this Appendix.)
    (A) The contribution for health insurance shall not exceed 50% of 
the actual cost to the PSC for his/her annual health insurance, or the 
maximum U.S. Government contribution for a direct-hire employee, as 
announced annually by the Office of Personnel Management, whichever is 
less. If the PSC is covered under a spouse's health insurance plan, 
where the spouse's employer pays some or all of the health insurance 
costs, the cost to the PSC for annual health insurance shall be 
considered to be zero.
    (B) The contribution for life insurance shall be up to 50% of the 
actual annual costs to the PSC for life insurance, not to exceed $500.00 
per year.
    (iii) PSCs shall receive the same percentage pay comparability 
adjustment as U.S. Government employees subject to the availability of 
funds.
    (iv) PSCs shall receive a 3% annual salary increase subject to 
satisfactory performance documented in their annual written evaluation. 
Such increase may not exceed 3% without a deviation. This 3% limitation 
also applies to extensions of the same service or negotiations for a new 
contract for the same or similar services unless a deviation has been 
approved.
    (v) PSCs shall receive the following allowances and differentials 
provided in the State Department's Standardized Regulations (Government 
Civilians Foreign Areas) on the same basis as U.S. Government employees 
(except for U.S. resident hires, see paragraph 4(d) and Section 12, 
General Provisions, Clause 22, ``U.S. Resident Hire Personal Services 
Contractors''):
    (A) Temporary lodging allowance (Section 120), \3\
---------------------------------------------------------------------------

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

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

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

    (F) Education allowance (Section 270), \4\
    (G) Educational travel (Section 280), \4\
    (H) Post differential (Section 500),
    (I) Payments during evacuation/authorized departure (Section 600), 
and
    (J) Danger pay (Section 650).
    (vi) Any allowance or differential that is not expressly stated in 
paragraph 4(c)(2)(v) is not authorized for any PSC unless a deviation is 
approved. The only exception is a consumables allowance if authorized 
for the post under Handbook 22 or superseding ADS Chapter.
    (vii) Health room services may be provided in accordance with the 
clause of this contract entitled ``Physical Fitness and Health Room 
Privileges.''
    (viii) PSCs are eligible to receive benefits for injury, disability, 
or death under the Federal Employees' Compensation Act since the law is 
administered by the Department of Labor not the Office of Personnel 
Management.
    (ix) PSCs are eligible to earn four hours of annual leave and four 
hours of sick leave for each two week period. However, PSCs with 
previous PSC service (not previous U.S. Government civilian or military 
service) earn either six hours of annual leave for each two week period 
if their previous PSC service exceeds 3 years (including 10 hours annual 
leave for the final pay period of a calendar year), or eight hours of 
annual leave for each two week period if their previous PSC service 
exceeds 15 years.
    (3) A PSC who is a spouse of a current or retired Civil Service, 
Foreign Service, or Military Service member and who is covered by their 
spouse's Government health or life insurance policy is ineligible for 
the contribution under paragraph 4(c)(2)(ii) of this appendix.
    (4) Retired U.S. Government employees shall not be paid additional 
contributions for health or life insurance under their contract (since 
the Government will normally have already paid its contribution for the 
retiree) unless the employee can prove to the satisfaction of the 
Contracting Officer that his/

[[Page 94]]

her health and life insurance does not provide or specifically excludes 
coverage overseas. If coverage overseas is excluded, then eligibility as 
cited in paragraph 4(c)(3) applies.
    (5) Retired U.S. Government employees may be awarded Personal 
Services Contracts without any reduction in or offset against their 
Government annuity.
    (d) U.S. Resident Hire Personal Services Contractors. U.S. resident-
hire PSCs are not eligible for any fringe benefits (except contributions 
for FICA, health insurance, and life insurance), including differentials 
and allowances unless such individuals can demonstrate to the 
satisfaction of the Contracting Officer that they have received similar 
benefits and allowances from their immediately previous employer in the 
cooperating country, or the Mission Director may determine that payment 
of such benefits would be consistent with the Mission's policy and 
practice and would be in the best interests of the U.S. Government.
    (e) Determining salary for personal services contractors. (1) There 
are two separate and distinct methods of establishing a salary for 
personal services contractors. Use of method number 1 is required unless 
justified and approved as provided for in paragraph (e)(1)(ii).
    (i) Method 1: Salaries for Personal Services Contractors shall be 
established based on the market value in the United States of the 
position being recruited for. This requires the Contracting Officer in 
coordination with the Technical Officer to determine the correct market 
value (a salary range) of the position to be filled. This method is 
required in establishing salary for all PSCs unless method 2 is 
authorized as provided for in paragraph (e)(1)(ii). Contract Information 
Bulletin (CIB) 96-8 dated February 23, 1996 provides a guide which 
contains information concerning Preparation of Scopes of Work, 
Determination of Salary Class Grade, Salary Class Bench Marks and Salary 
Class Review. The market value of the position then becomes the basis 
along with the applicants' certified salary history on the SF 171, 
``Personal Qualifications Statement'' for salary negotiations by the 
Contracting Officer. The SF 171 must be retained in the permanent 
contract file. Any position which is determined to be above the GS-13 
equivalent and exceeds six months in duration must be classified by M/
HR/POD. The crucial point is the establishment of a realistic and 
reasonable market value for a job. The final determination regarding the 
reasonableness of a salary level rests with the Contracting Officer. 
Paying salaries using this method avoids ``rank in person'' salaries 
which are in excess of the value of the job being contracted for.
    (ii) Method 2: If approved in writing by the Mission Director or the 
cognizant Assistant Administrator, based on written justification, 
salary may be negotiated based on the applicant's current earnings 
adjusted in accordance with the factors set out in paragraphs (e)(1)(ii) 
(A) through (C). This approval requirement cannot be redelegated. 
Current earnings must be certified by the contractor on the SF 171, (see 
paragraph 6(b)(3) of this appendix). This is guidance for establishing 
initial salaries, not subsequent increases, for the same contractor 
performing the same function.
    (A) As a rule, up to a 3 percent increase above current earnings may 
be given. However, a 3 percent increase is awarded only to a PSC whose 
earnings are based on a period of twelve months or more; 2 percent for 
established earnings of less than twelve months but not less than four 
months; or 1 percent for established earnings during the past four 
months.
    (B) Additional percentages may be given for the following factors. 
If a PSC has worked in a developing country for more than two years, an 
additional 1 percent may be awarded. Education related to the area of 
specialization and above the minimum qualification required may warrant 
an additional 1 percent, and those specialties for which there is keen 
competition in the employment market or a serious shortage category 
nationwide may be awarded an additional 2 percent. In addition, related 
technical experience over 5 years may increase the percentage by 1 and 
over ten years by 3.
    (C) All requests for an initial rate of pay above 10 percent over 
current earnings must be approved in writing by the appropriate 
Assistant Administrator or Mission Director. Current earnings are actual 
earnings for work reasonably related to the position for which the 
applicant is being considered. Paragraphs 4(e)(1)(ii) (A) through (C) 
apply only to salary setting method number 2 in paragraph 4 (e)(1)(ii).
    (2) When an applicant has no current earnings history (e.g., a 
person returning to the workforce after an absence of a number of years) 
or when an applicant's current earnings history doesn't accurately 
reflect the applicant's job market worth (e.g., a Peace Corps 
volunteer), every effort should be made to establish a market value for 
the position as a basis for negotiation, notwithstanding the lack of a 
current earnings history, provided that the applicant has the full 
qualifications for the job and could command a similar salary in the 
open job market.
    (3) This Appendix applies the ``USAID Contractor Salary Threshold 
(USAID CST)'' policy in Automated Directives System (ADS) Chapter 
302.3.6.8 to salaries for U.S. PSCs. Salaries in excess of the USAID 
CST, which is equivalent to the maximum rate for Federal agencies 
without a certified SES performance appraisal system, must be approved 
by the M/OAA Director in accordance with the approval procedures in ADS

[[Page 95]]

302.3.6.8(e). This approval cannot be re-delegated.
    (f) Incentive awards. U.S. PSCs are not eligible to receive monetary 
awards. They are eligible for non-monetary awards such as certificates.
    (g) Annual salary increase. PSC contracts written for more than one 
year should provide for a 3% annual increase based on satisfactory 
performance documented in their annual written evaluations.
    (h) Pay comparability adjustment. PSCs shall receive the same 
percentage pay comparability adjustment as that received by U.S. 
Government employees subject to the availability of funds.
    (i) Subcontracting. PSCs are U.S. Government employees and may not 
be called upon (or permitted) to subcontract out any part of their work. 
Funds for subcontracting have no place in the budget of a personal 
services contract. Support services, equipment, and supplies (e.g., 
typing and report preparation, paper, pens, computers, and furniture) 
should be furnished to PSCs just as they would be to direct-hire 
employees. To the extent that direct-hire personnel may be authorized to 
purchase supporting services or supplies under a travel authorization, 
so may PSCs; otherwise, contracts for personal services should not 
contain any funds for procurement.

    5. Soliciting for Personal Services Contracts. (a) Technical 
Officer's responsibilities. The Technical Officer will prepare a written 
detailed statement of duties and a statement of minimum qualifications 
to cover the position being recruited for. The statement shall be 
included in the procurement request (the Acquisition & Assistance 
Request Document) e.g., the request shall also include the following 
additional information as a minimum:
    (1) The specific foreign location(s) where the work is to be 
performed, including any travel requirements (with an estimate of 
frequency);
    (2) The length of the contract, with beginning and ending dates, 
plus any options for renewal or extension;
    (3) The basic education, training, experience, and skills required 
for the position;
    (4) An estimate of what a comparable GS/FS equivalent position 
should cost, including basic salary, allowances, and differentials, if 
appropriate; and
    (5) A list of Government or host country furnished items (e.g., 
housing).
    (b) Contracting Officer's responsibilities. (1) The Contracting 
Officer will prepare the solicitation for personal services which shall 
contain:
    (i) Three sets of SF 171s and SF 171As. (Upon receipt, one copy of 
each SF 171 and SF 171A shall be forwarded to the Project Officer.)
    (ii) A detailed statement of duties or a completed position 
description for the position being recruited for.
    (iii) A copy of the prescribed contract Cover Page, Contract 
Schedule, General Provisions as appropriate, as well as the FAR Clauses 
to be incorporated in full text and by reference.
    (iv) A copy of the USAID General Notice entitled ``Employee Review 
of the New Standards of Conduct''.
    (2) The Contracting Officer shall comply with the requirements of 
(48 CFR) AIDAR 706.302-70(c) as detailed in paragraph 5(c) except those 
recruited from the U.S.
    (c) Competition. (1) Under (48 CFR) AIDAR 706.302-70(b)(1), Personal 
Services Contracts (except those recruited from the U.S.) are exempt 
from the requirements for full and open competition with two limitations 
that must be observed by Contracting Officers:
    (i) Offers are to be requested from as many potential offerors as is 
practicable under the circumstances, and
    (ii) A justification supporting less than full and open competition 
must be prepared in accordance with FAR 6.303.
    (2) PSCs with Untied States citizens or resident aliens recruited 
from outside the cooperating country. Solicitations for PSCs recruited 
outside the cooperating country must be publicized via the Agency's 
External Home Page on the Internet under the caption ``Business & 
Procurement, USAID Procurements.'' Instructions regarding how to access 
the External Internet and the information to be provided have been 
approved and included in a CIB. A justification under FAR 6.303 is not 
required when this procedure is followed.
    (3) A class justification was approved by the USAID Procurement 
Executive to satisfy the requirements of (48 CFR) AIDAR 706.302-70(c)(2) 
for a justification in accordance with FAR 6.303. This class 
justification for Personal Services Contracts with U.S. Citizens may 
only be used for those who are recruited locally subject to the 
following conditions:
    (i) The position was publicized locally in accordance with 
established Mission policy or procedure, or the procedures in paragraph 
5(c)(ii) was followed;
    (ii) As an alternative to the procedures in paragraphs 5(c) (i) and 
(ii), at least 3 individuals were considered by consulting source lists 
(e.g., applications or resumes on hand) or conducting other informal 
solicitation.
    (iii) Extensions or renewals with the same individual for continuing 
services do not need to be publicized.
    (iv) A copy of the class justification (which was distributed to all 
USAID Contracting Officers via Contract Information Bulletin) must be 
included in the contract file, together with a written statement, signed 
by the Contracting Officer, that the contract is being awarded pursuant 
to (48 CFR) AIDAR

[[Page 96]]

706.302-70(b)(1); that the conditions for use of this class 
justification have been met; and that the cost of the contract is fair 
and reasonable.
    (4) If the appropriate competitive procedure in paragraph 5(3) is 
not followed, the Contracting Officer must prepare a separate 
justification as required under (48 CFR) AIDAR 706.302-70(c)(2).
    (5) Since the award of a Personal Services Contract is based on 
technical qualifications, not price, and since the SF 171, ``Personal 
Qualifications Statement'', and SF 171A, ``Continuation Sheet for 
Standard Form 171'', are used to solicit for such contracts, FAR 
subparts 15.4 and 15.5 and FAR parts 52 and 53 are inappropriate and 
shall not be used. Instead, the solicitation and selection procedures 
outlined in this Appendix shall govern.

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

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


[[Page 97]]


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

These modifications are not considered deviations subject to (48 CFR) 
AIDAR 701.470. (Justification and explanation of these modifications is 
to be included in the contract file);
    (g) Orientation is arranged in accordance with General Provision 23 
in section 12 of this Appendix;
    (h) The contractor has submitted the names, addresses, and telephone 
numbers of at least two persons who may be notified in the event of an 
emergency (this information is to be retained in the contract file);
    (i) The contract is complete and correct and all information 
required on the contract Cover Page (USAID Form 1420-36A) has been 
entered;
    (j) The contract has been signed by the Contracting Office and the 
contractor, and fully executed copies are properly distributed;
    (k) The following clearances, approvals and forms have been 
obtained, properly completed, and placed in the contract file before the 
contract is signed by both parties;
    (1) Evidence of job classification in the file by the Mission except 
for grade equivalents above GS-13. For those positions with grade 
equivalent above GS-13, evidence of job classification done by M/HR/POD;
    (2) Security clearance, including the completed SF 86, to the extent 
required by USAID Handbook 6, Security or superseding ADS Chapter, (see 
General Provisions 14 and 24 in section 12 of this Appendix);
    (3) Mission, host country, Human Resources Office, and technical 
office clearance, as appropriate;
    (4) Medical examinations and certifications as required by the 
contract general provision entitled ``Physical Fitness and Health Room 
Privileges'';
    (5) One original executed IRS Form W-4 entitled ``Employee's 
Withholding Allowance Certificate'', and one copy, shall be obtained. 
The original shall be sent to the Controller of the paying office and 
one shall be placed in the contract file;
    (6) Evidence of DAA/HR clearance that the position may be filled by 
PSC.
    (7) The approval for any salary in excess of the ``USAID Contractor 
Salary Threshold (USAID CST)'', which is equivalent to the maximum rate 
for Federal agencies without a certified SES performance appraisal 
system, in accordance with approval procedures in ADS 302.3.6.8(e) as 
required in Section 4.(e)(3);
    (8) A copy of the class justification or other appropriate 
explanation and support required by (48 CFR) AIDAR 706.302-70, if 
applicable;
    (9) Any deviation to the policy or procedures of this appendix, 
processed and approved under (48 CFR) AIDAR 701.470;
    (10) A fully executed SF 171, and a copy of the position 
classification, and approved deviation, if appropriate;
    (11) The Memorandum of Negotiation; and
    (12) The Contracting Officer's signed certification that competition 
requirements have been satisfied as described in paragraph 5(c) of the 
policy text of this Appendix. The certification shall be a part of the 
Memorandum of Negotiations.
    (l) Funds for the contract are properly obligated to preclude 
violation of the Anti-Deficiency Act, 31 U.S.C. 1341 (the Contracting 
Officer ensures that the contract has been properly recorded by the 
appropriate accounting office prior to its release for the signature of 
the selected contractor);
    (m) The contractor receives and understands the USAID General Notice 
entitled ``Employee Review of the New Standards of Conduct'' and a copy 
is attached to each contract as provided for in paragraph (c) of General 
Provision 1, section 12;
    (n) Agency conflict of interest requirements as set out in the 
General Notice ``Employee Review of the New Standards of Conduct'' are 
met by the contractor prior to his/her reporting for duty;
    (o) A copy of a Checklist for Personal Services contractors which 
may be in the format set out in this section or another format 
convenient for the Contracting Officer, provided that a memorandum 
containing all of the information described in this section 7 shall be 
prepared for each PSC and placed in the contract file;
    (p) The contractor understands that he/she is an employee of the 
United States for purposes of the Foreign Assistance Act of 1961, as 
amended, and the Internal Revenue Code (Title 26 of the United States 
Code). This subjects the employee to withholding for both FICA and 
Federal Income Tax and precludes the employee from receiving the Federal 
Earned Income Tax exclusion of 26 U.S.C. Section 911. See Special Note 
on the Cover Page of USAID Form 1420-36.
    (q) The contractor also understands that he/she may commence work 
prior to the completion of the security clearance. However, until such 
time as clearance is received, the contractor may not have access to 
classified or administratively controlled materials. Failure to obtain 
clearances will constitute cause for termination.

    8. Post Audit. The Inspector General, or his/her designee, audits 
the Personal Services Contracts of all contracting activities for

[[Page 98]]

the purpose of ensuring conformance to applicable policy and 
regulations.

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

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

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

[[Page 99]]

[GRAPHIC] [TIFF OMITTED] TR23JY97.000

                          Privacy Act Statement

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

[[Page 100]]

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

                                Schedule

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

                            Table of Contents

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

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

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

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

                     Article I--Statement of Duties

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

                 Article II--Period of Service Overseas

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

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

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

[[Page 101]]

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

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

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

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

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

           Article IV--Costs Reimbursable and Logistic Support

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

                               [Complete]

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

                               [Complete]

                     Article V--Precontract Expenses

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

                     Article VI--Additional Clauses

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

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

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

                            Table of Contents

                           (Optional Schedule)

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

Article I--Statement of Duties

[[Page 102]]

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

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

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

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

                     Article I--Statement of Duties.

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

                 Article II--Period of Service Overseas.

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

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

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

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

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

[[Page 103]]

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

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

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

           Article IV--Costs Reimbursable and Logistic Support

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

                               [Complete]

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

                     Article V--Precontract Expenses

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

                     Article VI--Additional Clauses

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

    12. General Provisions

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

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

                            Index of Clauses

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

[[Page 104]]

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

                       1. Definitions (June 1990)

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

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

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

[[Page 105]]

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

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

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

    (a) Workweek. The contractor's workweek shall not be less than 40 
hours, unless otherwise provided in the Contract Schedule, and shall 
coincide with the workweek for those employee of the Mission or the 
Cooperating Country agency most closely associated with the work of this 
contract. If the contract is for less than full time (40 hours weekly), 
the annual and sick leave earned shall be prorated (see the General 
Provision of this contract entitled Leave and Holidays).
    (b) Compensation (Pay Comparability) Adjustments. The PSC's 
compensation shall be adjusted to reflect the pay comparability 
adjustments, which are granted from time to time to U.S. direct-hire 
employees by Executive Order for the statutory pay systems (usually in 
January). Any adjustments authorized are subject to the availability of 
funds and shall not exceed that percentage stated in the Executive Order 
granting the adjustment. Further, the adjusted compensation may not 
exceed the annual ``USAID Contractor Salary Threshold (USAID CST)'', 
which is equivalent to the maximum rate for agencies without a certified 
SES performance appraisal system (or the equivalent hourly rate).

                    5. Leave and Holidays (APR 1997)

    (a) Vacation Leave. (1) The contractor shall earn vacation leave at 
the rate of 13 workdays per annum or 4 hours every 2 weeks. However, no 
vacation shall be earned if the tour of duty is less than 90 days.
    (2) Notwithstanding paragraph (a)(1) above, if the contractor has 
had previous PSC service (i.e., has served under other personal services 
contracts (PSCs) covered by Sec.

[[Page 106]]

636(a)(3) of the FAA), he/she shall earn vacation leave at the rate of 
either 6 hours every two weeks (10 hours for the final pay period of a 
calendar year) cumulative PSC service exceeding 3 years, or 8 hours 
every two weeks for cumulative PSC service exceeding 15 years. Former 
Civil Service, Foreign Service, or a Military Service experience is not 
creditable towards PSC service for annual leave purposes.
    (3) It is understood that vacation leave is provided under this 
contract primarily for the purposes of affording necessary rest and 
recreation during the tour of duty in the Cooperating Country. The 
Contractor in consultation with the USAID Mission shall develop a 
vacation leave schedule early in his/her tour of duty taking into 
consideration project requirements, employee preference and other 
factors. All vacation leave earned by the contractor must be used during 
his/her tour of duty. All vacation leave earned by the contractor but 
not taken by the end of his/her tour of duty will be forfeited unless 
the requirements of the activity precluded the employee from taking such 
leave and the Contracting Officer, with the endorsement of the Mission 
Director, approves one of the following as an alternative:
    (i) Taking leave during the concluding weeks of the employee's tour, 
or
    (ii) Lump-sum payment for leave not taken provided such leave does 
not exceed the number of days which can be earned by the employee during 
a twelve month period.
    (4) With the approval of the Mission Director, and if the 
circumstances warrant, a contractor may be granted advance vacation 
leave in excess in that earned, but in no case shall a contractor be 
granted advance vacation leave in excess of that which he/she will earn 
over the life of the contract. The contractor agrees to reimburse USAID 
for leave used in excess of the amount earned during the contractor's 
assignment under the contract.
    (b) Sick Leave. Sick leave is earned at a rate not to exceed 13 
work-days per annum or 4 hours every 2 weeks. Unused sick leave may be 
carried over under an extension of this contract for the same or similar 
services at the same Mission, but the contractor will not be compensated 
for unused sick leave at the completion of this contract. No leave my be 
carried over from one post to another.
    (c) Home Leave. (1) Home leave is leave earned for service abroad 
for use only in the United States, in the Commonwealth of Puerto Rico, 
or in the possessions of the United States.
    (2) A contractor who is a U.S. citizen or U.S. resident alien and 
has served as least 2 years overseas, as defined in paragraph (c)(4) 
below, under personal services contract in this Mission, and has not 
taken more than 30 workdays leave (vacation, sick, or leave without pay) 
in the United States, may be granted home leave of not more than 15 work 
days for each such year of service overseas; provided, that the 
contractor agrees to return overseas upon completion of home leave under 
an additional 2 year appointment, or for such shorter period of not less 
than 1 year of overseas service under the contract as the Mission 
Director may approve in advance. Home leave must be taken in the United 
States, the Commonwealth of Puerto Rico, or the possessions of the 
United States, and any days spent elsewhere will be charged to vacation 
leave or leave without pay.
    (3) Notwithstanding the requirement in paragraph (c)(2) above that 
the contractor must have served 2 years overseas under personal services 
contract with this Mission to be eligible for home leave, the contractor 
may be granted advance home leave subject to all of the following 
conditions:
    (i) Granting of leave home leave would in each case serve to advance 
the attainment of the objectives of this contract;
    (ii) The contractor has served a minimum of 18 months in the 
Cooperating Country on his/her current tour of duty under this contract; 
and
    (iii) The contractor agrees to return to the Cooperating Country to 
serve out the remainder of his/her current tour of duty and an 
additional 2 year appointment under this or subsequent contract, or such 
other additional appointment of not less than 1 year of overseas service 
as the Mission Director may approve.
    (4) The period of service overseas required under paragraph (c)(2), 
or paragraph (c)(3) above, shall include the actual days in orientation 
in the United States (less language training) and the actual days 
overseas beginning on the date of departure from the U.S. port of 
embarkation on international travel and continuing, inclusive of 
authorized delays enroute, to the date of arrival at the U.S. port of 
debarkation from international travel. Allowable vacation and sick leave 
taken while overseas, but not leave without pay, shall be included in 
the required period of service overseas. An amount equal to the number 
of days of vacation and sick leave taken in the United States, the 
Commonwealth of Puerto Rico, or the possessions of the United States 
will be added to the required period of service overseas.
    (5) Salary during the travel to and from the United States for home 
leave will be limited to the time required for travel by the most 
expeditious air route. The contractor will be responsible for 
reimbursing USAID for payments made during home leave, if, in spite of 
the undertaking of the new appointment, the contractor, except for 
reasons beyond his/her control as determined by the Contracting Officer, 
does not return overseas and complete the additional required service. 
Unused home leave is not reimbursable under this contract.

[[Page 107]]

    (6) To the extent deemed necessary by the Contracting Officer, a 
contractor in the United States on home leave may be authorized to spend 
not more than 5 days in work status for consultation at USAID/Washington 
before returning to post duty. Consultation at locations other than 
USAID/Washington as well as any time in excess of 5 days spent for 
consultation, must be approved by the Mission Director or the 
Contracting Officer.
    (d) Holidays. The contractor, while serving abroad, shall be 
entitled to all holidays granted by the Mission to U.S.-citizen direct-
hire employees.
    (e) Military Leave. Military leave of not more than 15 calendar days 
in any calendar year may be granted to a contractor who is a reservist 
of the Armed Forces, provided that military leave has been approved in 
advance by the Contracting Officer or the Mission Director. A copy of 
any such approval shall be part of the contract file.
    (f) Leave Without Pay. Leave without pay may be granted only with 
the written approval of the Contracting Officer or Mission Director.
    (g) Compensatory Time. Compensatory leave may be granted only with 
the written approval of the Contracting Officer or Mission Director in 
rare instances when it has been determined absolutely essential and used 
under those guidelines which apply to direct-hire employees.
    (h) Leave Records. The contractor shall maintain current leave 
records for himself/herself and make them available, as requested by the 
Mission Director or the Contracting Officer.

               6. Differential and Allowances (June 1990)

    (a) The following differential and allowances will be granted to the 
contractor and his/her authorized dependents to the same extent and on 
the same basis as they are granted to U.S. citizen direct-hire employees 
at the Mission by the Standardized Regulations (Government Civilians, 
Foreign Areas), as from time to time amended, except as noted to the 
contrary below:

            Applicable Reference to Standardized Regulations
------------------------------------------------------------------------
 
------------------------------------------------------------------------
(1) Post Differential........................  Chapter 500 and Tables in
                                                Chapter 900.
(2) Living Quarters Allowance................  Section 130.
(3) Temporary Lodging Allowance..............  Section 120.
(4) Post Allowance...........................  Section 220.
(5) Supplemental Post Allowance..............  Section 230.
(6) Payments During Evacuation...............  Section 600.
(7) Education Allowance......................  Section 270.
(8) Separate Maintenance Allowance...........  Section 260.
(9) Danger Pay Allowance.....................  Section 650.
(10) Education Travel........................  Section 280.
------------------------------------------------------------------------

    (1) Post differential. Post differential is an additional 
compensation for service at places in foreign areas where conditions of 
environment differ substantially from conditions of environment in the 
continental United States and warrant additional compensation as a 
recruitment and retention incentive. In areas where post differential is 
paid to USAID direct-hire employees, post differential not to exceed the 
percentage of salary as is provided such USAID employees in accordance 
with the Standardized Regulations (Government Civilians, Foreign Areas) 
Chapter 500 (except the limitation contained in Section 552, ``Ceiling 
on Payment'') Tables--Chapter 900, as from time to time amended, will be 
reimbursable hereunder for employees in respect to amounts earned during 
the time such employees actually spend overseas on work under this 
contract. When such post differential is provided to the contractor, it 
shall be payable beginning on the date of arrival at the post of 
assignment and continue, including periods away from post on official 
business, until the close of business on the day of departure from post 
of assignment enroute to the United States. Sick or vacation leave taken 
at or away from the post of assignment will not interrupt the continuity 
of the assignment or require a discontinuance of such post differential 
payments, provided such leave is not taken within the United States or 
the territories of the United States. Post differential will not be 
payable while the employee is away from his/her post of assignment for 
purposes of home leave. Short-term employees shall be entitled to pose 
differential beginning with the forty-third (43rd) day at post.
    (2) Living quarters allowance. Living quarters allowance is an 
allowance granted to reimburse an employee for substantially all of his/
her cost for either temporary or residence quarters whenever Government-
owned or Government-rented quarters are not provided to him/her at his/
her post without

[[Page 108]]

charge. Such costs are those incurred for temporary lodging (temporary 
lodging allowance) or one unit of residence quarters (living quarters 
allowance) and include rent, plus any costs not included therein for 
heat, light, fuel, gas, electricity and water. The temporary lodging 
allowance and the living quarters allowance are never both payable to an 
employee for the same period of time. The contractor will receive living 
quarters allowance for payment of rent and utilities if such facilities 
are not supplied. Such allowance shall not exceed the amount paid USAID 
employees of equivalent rank in the Cooperating Country, in accordance 
with either the Standardized Regulations (Government Civilians, Foreign 
Areas), Chapter 130, as from time to time amended, or other rates 
approved by the Mission Director. Subject to the written approval of the 
Mission Director, short-term employees may be paid per diem (in lieu of 
living quarters allowance) at rates prescribed by the Federal Travel 
Regulations, as from time to time amended, during the time such short-
term employees spend at posts of duty in the Cooperating Country under 
this contract. In authorizing such per diem rates, the Mission Director 
shall consider the particular circumstances involved with respect to 
each such short-term employee including the extent to which meals and/or 
lodging may be made available without charge or at nominal cost by an 
agency of the United States Government or of the Cooperating Government, 
and similar factors.
    (3) Temporary lodging allowance. Temporary lodging allowance is a 
quarters allowance granted to an employee for the reasonable cost of 
temporary quarters incurred by the employee and his/her family for a 
period not in excess of (i) three months after first arrival at a new 
post in a foreign area or a period ending with the occupation of 
residence (permanent) quarters, if earlier, and (ii) one month 
immediately preceding final departure from the post subsequent to the 
necessary vacating of residence quarters. The contractor will receive 
temporary lodging allowance for himself/herself and authorized 
dependents, in lieu of living quarters allowance, not to exceed the 
amount set forth in the Standardized Regulations (Government Civilians, 
Foreign Areas), Chapter 120, as from time to time amended.
    (4) Post allowance. Post allowance is a cost-of-living allowance 
granted to an employee officially stationed at a post where the cost of 
living, exclusive of quarters cost, is substantially higher than in 
Washington, DC. The contractor will receive post allowance payments not 
to exceed those paid USAID employees in the Cooperating Country, in 
accordance with the Standardized Regulations (Government Civilians, 
Foreign Areas), Chapter 220, as from time to time amended.
    (5) Supplemental post allowance. Supplemental post allowance is a 
form of post allowance granted to an employee at his/her post when it is 
determined that assistance is necessary to defray extraordinary 
subsistence costs. The contractor will receive supplemental post 
allowance payments not to exceed the amount set forth in the 
Standardized Regulations (Government Civilians, Foreign Areas), Chapter 
230, as from time to time amended.
    (6) Payments during evacuation. The Standardized Regulations 
(Government Civilians, Foreign Areas) provide the authority for 
efficient, orderly, and equitable procedure for the payment of 
compensation, post differential and allowances in the event of an 
emergency evacuation of employees or their dependents, or both, from 
duty stations for military or other reasons or because of imminent 
danger to their lives. If evacuation has been authorized by the Mission 
Director, the contractor will receive payments during evacuation for 
himself/herself and authorized dependents evacuated from their post of 
assignment in accordance with the Standardized Regulations (Government 
Civilians, Foreign Areas), Chapter 600, and the Federal Travel 
Regulations, as from time to time amended.
    (7) Educational allowance. Educational allowance is an allowance to 
assist the contractor in meeting the extraordinary and necessary 
expenses, not otherwise compensated for, incurred by reason of his/her 
service in a foreign area in providing adequate elementary and secondary 
education for his/her children. The contractor will receive educational 
allowance payments for his/her dependent children in amounts not to 
exceed those set forth in Standardized Regulations (Government 
Civilians, Foreign Areas), Chapter 270, as from time to time amended.
    (8) Separate maintenance allowance. Separate maintenance allowance 
is an allowance to assist an employee who is compelled by reason of 
dangerous, notably unhealthful, or excessively adverse living conditions 
at his/her post of assignment in a foreign area, or for the convenience 
of the Government, to meet the additional expense of maintaining his/her 
dependents elsewhere than at such post. The contractor will receive 
separate maintenance allowance payments not to exceed that made to USAID 
employees in accordance with the Standardized Regulations (Government 
Civilians, Foreign Areas), Chapter 260, as from time to time amended.
    (9) Danger pay allowance. Danger pay allowance is an allowance to 
provide additional compensation above basic compensation to employees in 
foreign areas where civil insurrection, civil war, terrorism or wartime 
conditions threaten physical harm or imminent danger to the health or 
well-being of the employee. The danger pay allowance is in lieu

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of that part of the post differential which is attributable to political 
violence. Consequently, the post differential may be reduced while 
danger pay is in effect to avoid dual crediting for political violence. 
The contractor shall be allowed danger pay allowance not to exceed that 
paid USAID employees in the Cooperating Country, in accordance with the 
Standardized Regulations (Government Civilians, Foreign Areas), Chapter 
650, as from time to time amended.
    (10) Educational travel. Educational travel is travel to and from a 
school in the United States for secondary education (in lieu of an 
educational allowance) and for college education. The contractor will 
receive educational travel payments for his/her dependent children 
provided such payment does not exceed that which would be payable in 
accordance with the Standardized Regulations (Government Civilians, 
Foreign Areas), Chapter 280, as from time to time amended. Educational 
travel shall not be authorized for contractors whose assignment is less 
than two years.
    (b) The allowances provided in paragraphs (a) (1) through (10) of 
this provision shall be paid to the contractor in dollars or in the 
currency of the Cooperating Country in accordance with practice 
prevailing at the Mission, or the Mission Director may direct that the 
contractor be paid a per diem in lieu thereof as prescribed by the 
Standardized Regulations (Government Civilians, Foreign Areas), as from 
time to time amended.

7. Social Security, Federal Income Tax, and Foreign Earned Income (June 
                                  1990)

    (a) Since the contractor is an employee, F.I.C.A. contributions and 
U.S. Federal Income Tax withholding shall be deducted in accordance with 
regulations and rulings of the Social Security Administration and the 
U.S. Internal Revenue Service, respectively.
    (b) As an employee, the contractor is not eligible for the ``foreign 
earned income'' exclusion under the IRS Regulations (see 26 CFR 1.911-
3(c)(3)).

                  8. Advance of Dollar Funds (APR 1997)

    If requested by the contractor and authorized in writing by the 
Contracting Officer, USAID will arrange for an advance of funds to 
defray the initial cost of travel, travel allowances, authorized 
precontract expenses, and shipment of personal property. The advance 
shall be granted on the same basis as to a USAID U.S.-citizen direct-
hire employee in accordance with USAID Handbook 22, Chapter 4 or 
superseding ADS Chapter.

                         9. Insurance (APR 1997)

    (a) Worker's compensation benefits. The contractor shall be provided 
worker's compensation benefits in accordance with the Federal Employees' 
Compensation Act.
    (b) Health and life insurance. (1) The contractor shall be provided 
a maximum contribution of up to 50% against the actual costs of the 
contractor's annual health insurance costs, provided that such costs may 
not exceed the maximum U.S. Government contribution for direct-hire 
personnel as announced annually by the Office of Personnel Management.
    (2) The contractor shall be provided a contribution of up to 50% 
against the actual costs of annual life insurance not to exceed $500.00 
per year.
    (3) Retired U.S. Government employees shall not be paid additional 
contributions for health or life insurance under their contracts. The 
Government will normally have already paid its contribution for the 
retiree unless the employee can prove to the satisfaction of the 
Contracting Officer that his/her health and life insurance does not 
provide or specifically excludes coverage overseas. In such case, the 
contractor would be eligible for contributions under paragraphs (b) (1) 
or (2) as appropriate.
    (4) Proof of health and life insurance coverage shall be submitted 
to the Contracting Officer before any contribution is paid. On 
assignments of less than one year, costs for health and life insurance 
shall be prorated and paid accordingly.
    (5) A contractor who is a spouse of a current or retired Civil 
Service, Foreign Service, or Military Service member and who is covered 
by their spouse's Government health or life insurance policy is 
ineligible for the contribution under paragraphs (b)(1) or (b)(2) of 
this provision.
    (c) Insurance on private automobiles. If the contractor or his/her 
dependents transport, or cause to be transported, privately owned 
automobile(s) to the Cooperating Country, or any of them purchase an 
automobile within the Cooperating Country, the contractor agrees to 
ensure that all such automobile(s) during such ownership within the 
Cooperating Country will be covered by a current, i.e., not in arrears, 
insurance policy issued by a reliable company providing the following 
minimum coverage, or such other minimum coverage as may be set by the 
Mission Director, payable in U.S. dollars or its equivalent in the 
currency of the Cooperating Country: injury to persons, $10,000/$20,000; 
property damage, $5,000. The contractor further agrees to deliver, or 
cause to be delivered to the Mission Director, the insurance policies 
required by this clause or satisfactory proof of the existence thereof, 
before such automobile(s) operated within the Cooperating Country. The 
premium costs for such insurance shall not be a reimbursable cost under 
this contract.

[[Page 110]]

           10. Travel and Transportation Expenses (July 1993)

    (a) General. (1) USAID/Washington Office of Administrative Services, 
or such other office as may be designated by that office, may furnish 
Transportation Requests (TR's) to the contractor for transportation 
authorized by this contract originating in the United States, and the 
executive or administrative officer at the Mission may furnish TR's for 
such authorized transportation which is payable in local currency or is 
to originate overseas. When transportation is not provided by the 
Government-issued TR, the contractor shall procure his/her own 
transportation, the costs of which will be reimbursed in accordance with 
the terms of this contract.
    (2) The contractor will be reimbursed for reasonable, allocable and 
allowable travel and transportation expenses incurred under and for the 
performance of this contract. Determination of reasonableness, 
allocability and allowability will be made by the Contracting Officer in 
accordance with USAID's established policies and procedures for USAID 
direct-hire employees, and the particular needs of the activity being 
implemented by this contract. The following paragraphs provide specific 
guidance and limitations on particular items of cost.
    (b) U.S. travel and transportation. The contractor shall be 
reimbursed for actual transportation costs and travel allowances in the 
United States as authorized in the Contract Schedule or approved in 
advance by the Contracting Officer or the Mission Director. 
Transportation costs and travel allowances shall not be reimbursed in 
any amount greater than the cost of, and time required for, economy-
class commercially scheduled air travel by the most expeditious route 
except as otherwise provided in paragraph (g) of this provision unless 
economy air travel is not available and the contractor certifies to this 
in his/her voucher or other documents submitted for reimbursement.
    (c) International travel. For travel to and from post of assignment, 
the contractor shall be reimbursed for travel costs and travel 
allowances from place of residence in the United States (or other 
location provided that the cost of such travel does not exceed the cost 
of the travel from the contractor's residence in the United States) to 
the post of duty in the Cooperating Country and return to place of 
residence in the United States (or other location provided that the cost 
of such travel does not exceed the cost of travel from the post of duty 
in the Cooperating Country to the contractor's residence) upon 
completion of services by the individual. Reimbursement for travel will 
be in accordance with USAID's established policies and procedures for 
its direct-hire employees and the provisions of this contract, and will 
be limited to the cost of travel by the most direct and expeditious 
route. If the contract is for longer than one year and the contractor 
does not complete one full year at post of duty (except for reasons 
beyond his/her control), the costs of going to and from the post of duty 
for the contractor and his/her dependents are not reimbursable 
hereunder. If the contractor serves more than one year but less than the 
required service in the Cooperating Country (except for reasons beyond 
his/her control) the costs of going to the post of duty are reimbursable 
hereunder but the costs of going from post of duty to the contractor's 
permanent, legal place of residence at the time he or she was employed 
for work under this contract, or other location as approved by the 
Contracting Officer, are not reimbursable under this contract for the 
contractor and his/her dependents. When travel is by economy class 
accommodations, the contractor will be reimbursed for the cost of 
transporting up to 10 kilograms/22 pounds of accompanied personal 
baggage per traveler in addition to that regularly allowed with the 
economy ticket provided that the total number of pounds of baggage does 
not exceed that regularly allowed for first class travelers. Travel 
allowances for travelers shall not be in excess of the rates authorized 
in the Standardized Regulations (Government Civilians, Foreign Areas)-
hereinafter referred to as the Standardized Regulations--as from time to 
time amended, for not more than the travel time required by scheduled 
commercial air carrier using the most expeditious route. One stopover 
enroute for a period of not to exceed 24 hours is allowable when the 
traveler uses economy class accommodations for a trip of 14 hours or 
more of scheduled duration. Such stopover shall not be authorized when 
travel is by indirect route or is delayed for the convenience of the 
traveler. Per diem during such stopover shall be paid in accordance with 
the Federal Travel Regulations as from time to time amended.
    (d) Local travel. Reimbursement for local travel in connection with 
duties directly referable to the contract shall not be in excess of the 
rates established by the Mission Director for the travel costs of 
travelers in the Cooperating Country. In the absence of such established 
rates the contractor shall be reimbursed for actual travel costs in the 
Cooperating Country or the Mission, including travel allowances at rates 
not in excess of those prescribed by the Standardized Regulations.
    (e) Indirect travel for personal convenience. When travel is 
performed by an indirect route for the personal convenience of the 
traveler, the allowable costs of such travel will be computed on the 
basis of the cost of allowable air fare via the direct usually traveled 
route. If such costs include fares for air or ocean travel by foreign 
flag carriers, approval for indirect travel by such foreign flag

[[Page 111]]

carriers must be obtained from the Contracting Officer or the Mission 
Director before such travel is undertaken, otherwise only that portion 
of travel accomplished by the United States-flag carriers will be 
reimbursable within the above limitation of allowable costs.
    (f) Limitation on travel by dependents. Travel costs and allowances 
will be allowed for authorized dependents of the contractor and such 
costs shall be reimbursed for travel from place of abode to assigned 
station in the Cooperating Country and returned, only if the dependent 
remains in the Cooperating Country for at least 9 months or one-half of 
the required tour of duty of the contractor, whichever is greater, 
except as otherwise authorized hereunder for education, medical or 
emergency visitation travel. If the dependent is eligible for 
educational travel pursuant to the ``Differential and Allowances'' 
clause of this contract, time spent away from post resulting from 
educational travel will be counted as time at post.
    (g) Delays enroute. The contractor may be granted reasonable delays 
enroute while in travel status when such delays are caused by events 
beyond the control of the contractor and are not due to circuitous 
routine. It is understood that if delay is caused by physical 
incapacitation, he/she shall be eligible for such sick leave as provided 
under the ``Leave and Holidays'' clause of this contract.
    (h) Travel by Privately Owned Automobile (POV). If travel by POV is 
authorized in the contract schedule or approved by the Contracting 
Officer, the contractor shall be reimbursed for the cost of travel 
performed in his/her POV at a rate not to exceed that authorized in the 
Federal Travel Regulations plus authorized per diem for the employee and 
for each of the authorized dependents traveling in the POV, if the POV 
is being driven to or from the Cooperating Country as authorized under 
the contract, provided that the total cost of the mileage and the per 
diem paid to all authorized travelers shall not exceed the total 
constructive cost of fare and normal per diem by all authorized 
travelers by surface common carrier or authorized air fare, whichever is 
less.
    (i) Emergency and Irregular Travel and Transportation. Emergency 
transportation costs and travel allowances while enroute, as provided in 
this section, will be reimbursed not to exceed amounts authorized by the 
Foreign Service Travel Regulations for USAID-direct hire employees in 
like circumstances under the following conditions:
    (1) The costs of going from post of duty in the Cooperating Country 
to the employee's permanent, legal place of residence at the time he or 
she was employed for work under this contract or other location for 
contractor employees and dependents and returning to the post of duty, 
subject to the prior written approval of the Mission Director that such 
travel is necessary for one of the following reasons.
    (i) Need for medical care beyond that available within the area to 
which the employee is assigned, or serious effect on physical or mental 
health if residence is continued at assigned post of duty. The Mission 
Director may authorize a medical attendant to accompany the employee at 
contract expense if, based on medical opinion, such an attendant is 
necessary.
    (ii) Death, or serious illness or injury of a member of the 
immediate family of the employee or the immediate family of the 
employee's spouse.
    (2) When, for any reason, the Mission Director determines it is 
necessary to evacuate the contractor or contractor's dependents, the 
contractor will be reimbursed for travel and transportation expenses and 
travel allowance while enroute, for the cost of the individuals going 
from post of duty in the Cooperating Country to the employee's 
permanent, legal place of residence at the time he or she was employed 
for work under this contract or other approved location. The return of 
such employees and dependents may also be authorized by the Mission 
Director when, in his/her discretion, he/she determines it is prudent to 
do so.
    (3) The Mission Director may also authorize emergency or irregular 
travel and transportation in other situations, when in his/her opinion, 
the circumstances warrant such action. The authorization shall include 
the kind of leave to be used and appropriate restrictions as to time 
away from post, transportation of personal and household effects, etc.
    (j) Home Leave Travel. To the extend that home leave has been 
authorized as provided in the ``Leave and Holidays'' clause of this 
contract, the cost of travel for home leave is reimbursable for travel 
costs and travel allowances of travelers from the post of duty in the 
Cooperating Country to place of residence in the United States (or other 
location provided that the cost of such travel does not exceed the cost 
of travel to the contractor's residence in the United States) and return 
to the post of duty in the Cooperating Country. Reimbursement for travel 
will be in accordance with the Uniform State/USAID/USIA Foreign Service 
Travel Regulations, as from time to time amended, and will be limited to 
the cost of travel by the most direct and expeditious route. Travel 
allowances for travelers shall be in accordance with the rates 
authorized in the Standardized Regulations as from time to time amended, 
for not more than the travel time required by scheduled commercial air 
carrier using the most expeditious route using economy class. One 
stopover enroute for a period of not to exceed 24 hours is allowable 
when the traveler uses economy class accommodations for a

[[Page 112]]

trip of 14 hours or more of scheduled duration. Such stopover shall not 
be authorized when travel is by indirect route or is delayed for the 
convenience of the traveler or the traveler uses other than economy 
class. Per diem during such stopover shall be paid in accordance with 
the Standardized Regulations.
    (k) Rest and Recuperations Travel. If approved in writing by the 
Mission Director, the contractor and his/her dependents shall be allowed 
rest and recuperation travel on the same basis as authorized USAID 
direct-hire Mission employees and their dependents.
    (l) Transportation of Motor Vehicles, Personal Effects and Household 
Goods. (1) Transportation costs will be paid on the same basis as for 
USAID direct-hire employees serving the same length tour of duty, as 
authorized in the schedule. Transportation, including packing and 
crating costs, will be paid for shipping from the point of origin in the 
United States (or other location as approved by the Contracting Officer) 
to post of duty in the Cooperating Country and return to point of origin 
in the United States (or other location as approved by the Contracting 
Officer) of one privately-owned vehicle for the contractor, personal 
effects of the contractor and authorized dependents, and household goods 
of the contractor not to exceed the limitations in effect for such 
shipments for USAID direct-hire employees in accordance with the Foreign 
Service Travel Regulations in effect at the time shipment is made. These 
limitations may be obtained from the Contracting Officer.
    (2) The cost of transporting motor vehicles and household goods 
shall not exceed the cost of packing, crating, and transportation by 
surface common carrier. In the event that the carrier does not require 
boxing or crating of motor vehicles for shipment to the Cooperating 
Country, the cost of boxing or crating is not reimbursable. The 
transportation of a privately owned motor vehicle for a contractor may 
be authorized as a replacement of the last such motor vehicle shipped 
under this contract for such contractor when the Mission Director 
determines, in advance, and so notifies the contractor in writing, that 
the replacement is necessary for reasons not due to the negligence or 
malfeasance of the contractor. The determination shall be made under the 
same rules and regulations that apply to authorized Mission U.S. citizen 
direct-hire employees.
    (m) Unaccompanied Baggage. Unaccompanied baggage is considered to be 
those personal belongings needed by the traveler immediately upon 
arrival of the contractor and dependents, and consideration should be 
given to advance shipments of unaccompanied baggage. The contractor will 
be reimbursed for costs of shipment of unaccompanied baggage (in 
addition to the weight allowance for household effects) not to exceed 
the limitations in effect for USAID direct-hire employees in accordance 
with the Foreign Service Travel Regulations as in effect when shipment 
is made. These limitations are available from the Contracting Officer. 
This unaccompanied baggage may be shipped as air freight by the most 
direct route between authorized points of origin and destination 
regardless of the modes of travel used. This provision is applicable to 
home leave travel when authorized by the terms of this contract.
    (n) International Ocean Transportation--(1)(i) Transportation of 
things. Where U.S. flag vessels are not available, or their use would 
result in a significant delay, the contractor may obtain a release from 
the requirement to use U.S. flag vessels from the Transportation 
Division, Office of Acquisition and Assistance, U.S. Agency for 
International Development, Washington, D.C. 20523-1419, or the Mission 
Director, as appropriate, giving the basis for the request.
    (ii) Transportation of persons. Where U.S. flag vessels are not 
available, or their use would result in a significant delay, the 
contractor may obtain a release from the requirement to use U.S. flag 
vessels from the Contracting Officer or the Mission Director, as 
appropriate.
    (2) Transportation of foreign-made vehicles. Reimbursement of the 
costs of transporting a foreign-made motor vehicle will be made in 
accordance with the provisions of the Foreign Service Travel 
Regulations.
    (3) Reduced rates on U.S.-flag carriers are in effect for shipments 
of household goods and personal effects of USAID contractors between 
certain locations. These reduced rates are available provided the 
shipper furnishes to the carrier at the time of the issuance of the Bill 
of Lading documentary evidence that the shipment is for the account of 
USAID. The Contracting Officer will, on request, furnish to the 
contractor current information concerning the availability of a reduced 
rate with respect to any proposed shipment. The contractor will not be 
reimbursed for shipments of household goods or personal effects in 
amounts in excess of the reduced rates which are available in accordance 
with the foregoing.
    (o) Storage of household effects. The cost of storage charges 
(including packing, crating, and drayage costs) in the U.S. of household 
goods of the contractor will be permitted in lieu of transportation of 
all or any part of such goods to the Cooperating Country under paragraph 
(l) above provided that the total amount of effects shipped to the 
Cooperating Country or stored in the U.S. shall not exceed the amount 
authorized for USAID direct-hire employees under the Uniform Foreign 
Service Travel Regulations. These amounts are available from the 
Contracting Officer.

[[Page 113]]

                         11. Payment (AUG 1996)

    (a) Once each month, or at more frequent intervals, if approved by 
the paying office indicated on the Cover Page, the contractor may submit 
to such office form SF 1034 ``Public Voucher for Purchases and Services 
Other Than Personal'' (original) and SF 1034-A (three copies), or 
whatever other form is locally required or accepted. Each voucher shall 
be identified by the USAID contract number and properly executed in the 
amount of dollars claimed during the period covered. The voucher forms 
shall be supported by:
    (1) The contractor's detailed invoice, in original and two copies, 
indicating for each amount claimed the paragraph of the contract under 
which payment is to be made, supported when applicable as follows:
    (i) For compensation--a statement showing period covered, days 
worked, and days when contractor was in authorized travel, leave, or 
stopover status for which compensation is claimed. All claims for 
compensation will be accompanied by, or will incorporate, a 
certification signed by the Project Officer covering days or hours 
worked, or authorized travel or leave time for which compensation is 
claimed.
    (ii) For travel and transportation--a statement of itinerary with 
attached carrier's receipt and/or passenger's coupons, as appropriate.
    (iii) For reimbursable expenses--an itemized statement supported by 
original receipts.
    (2) The first voucher submitted shall account for, and liquidate the 
unexpended balance of any funds advanced to the contractor.
    (b) A final voucher shall be submitted by the contractor promptly 
following completion of the duties under this contract but in no event 
later than 120 days (or such longer period as the Contracting Officer 
may in his/her discretion approve in writing) from the date of such 
completion. The contractor's claim, which includes his/her final 
settlement of compensation, shall not be paid until after the 
performance of the duties required under the terms of this contract has 
been approved by USAID. On receipt and approval of the voucher 
designated by the contractor as the ``final voucher'' submitted on Form 
SF 1034 (original) and SF 1034-A (three copies), together with a refund 
check for the balance remaining on hand of any funds which may have been 
advanced to the contractor, the Government shall pay any amounts due and 
owing the contractor.
    (c) If approved by the paying office time and attendance may be 
submitted for PSCs in the same manner as is approved for direct-hire 
personnel.

       12. Conversion of U.S. Dollars to Local Currency (DEC 1985)

    Upon arrival in the Cooperating Country, and from time to time as 
appropriate, the contractor shall consult with the Mission Director or 
his/her authorized representative who shall provide, in writing, the 
policy the contractor shall follow in the conversion of U.S. dollars to 
local currency. This may include, but not be limited to the conversion 
of said currency through the cognizant U.S. Disbursing Officer, or 
Mission Controller, as appropriate.

              13. Post of Assignment Privileges (JUL 1993)

    Privileges such as the use of APO, PX's, commissaries and officers 
clubs are established at posts abroad under agreements between the U.S. 
and host governments. These facilities are intended for and usually 
limited to members of the official U.S. establishment including the 
Embassy, USAID Mission, U.S. Information Service and the Military. 
Normally, the agreements do not permit these facilities to be made 
available to non-official Americans. However, in those cases where 
facilities are open to non-official Americans, they may be used.

                  14. Security Requirements (June 1990)

    (a) This entire provision shall apply to the extent that this 
contract involves access to classified information (``Confidential'', 
``Secret'', or ``Top Secret'') or access to administratively controlled 
information (``Limited Official Use''). Contractors that are not U.S. 
citizens shall not have access to classified or administratively 
controlled information.
    (b) The contractor (1) shall be responsible for safeguarding all 
classified or administratively controlled information in accordance with 
appropriate instructions furnished by the USAID Office of Security (IG/
SEC), as referenced in paragraph (d) of this provision and shall not 
supply, disclose, or otherwise permit access to classified information 
or administratively controlled information to any unauthorized person; 
(2) shall not make or permit to be made any reproductions of classified 
information or administratively controlled information except with the 
prior written authorization of the Contracting Officer or Mission 
Director; (3) shall submit to the Contracting Officer, at such times as 
the Contracting Officer may direct, an accounting of all reproductions 
of classified or administratively controlled information; and (4) shall 
not incorporate in any other project any matter which will disclose 
classified and/or administratively controlled information except with 
the prior written authorization of the Contracting Officer.
    (c) The contractor shall follow the procedures for classifying, 
marking, handling, transmitting, disseminating, storing, and destroying 
official material in accordance with

[[Page 114]]

the regulations in the Foreign Affairs Manual, Chapter 5 (5 FAM 900), a 
copy of which will be furnished by the Contracting Officer or Mission 
Director.
    (d) The contractor agrees to submit immediately to the Mission 
Director or Contracting Officer a complete detailed report, 
appropriately classified, of any information which the contractor may 
have concerning existing or threatened espionage, sabotage, or 
subversive activity.
    (e) The Government agrees that, when necessary, it shall indicate by 
security classification or administratively controlled designation, the 
degree of importance to the national defense of information to be 
furnished by the contractor to the Government or by the Government to 
the contractor, and the Government shall give written notice of such 
security classification or administratively controlled designation to 
the contractor and of any subsequent changes thereof. The contractor is 
authorized to rely on any letter or other written instrument signed by 
the Contracting Officer changing a security classification or 
administratively controlled designation of information.
    (f) The contractor agrees to certify after completion of his/her 
assignment under this contract that he/she has surrendered or disposed 
of all classified and/or administratively controlled information in his/
her custody in accordance with applicable security instructions.

             15. Contractor-Mission Relationships (DEC 1985)

    (a) The contractor acknowledges that this contract is an important 
part of the U.S. Foreign Assistance Program and agrees that his/her 
duties will be carried out in such a manner as to be fully commensurate 
with the responsibilities which this entails.
    (b) While in the Cooperating Country, the contractor is expected to 
show respect for the conventions, customs, and institutions of the 
Cooperating Country and not interfere in its political affairs.
    (c) If the contractor's conduct is not in accordance with paragraph 
(b) of this provision, the contract may be terminated under General 
Provision 16 of this contract. The Contractor recognizes the right of 
the U.S. Ambassador to direct his/her immediate removal from any country 
when, in the discretion of the Ambassador, the interests of the United 
States so require.
    (d) The Mission Director is the chief representative of USAID in the 
Cooperating Country. In this capacity, he/she is responsible for the 
total USAID Program in the Cooperating Country including certain 
administrative responsibilities set forth in this contract and for 
advising USAID regarding the performance of the work under the contract 
and its effect on the U.S. Foreign Assistance Program. The contractor 
will be responsible for performing his/her duties in accordance with the 
statement of duties called for by the contract. However, he/she shall be 
under the general policy guidance of the Mission Director, and shall 
keep the Mission Director or his/her designated representative currently 
informed of the progress of the work under this contract.

                       16. Termination (NOV 1989)

    (This is an approved deviation to be used in place of the clause 
specified in FAR 52.249-12.)
    (a) The Government may terminate performance of work under this 
contract in whole or, from time to time, in part:
    (1) For cause, which may be effected immediately after establishing 
the facts warranting the termination, by giving written notice and a 
statement of reasons to the contractor in the event (i) the Contractor 
commits a breach or violation of any obligations herein contained, (ii) 
a fraud was committed in obtaining this contract, or (iii) the 
contractor is guilty (as determined by USAID) of misconduct in the 
Cooperating Country. Upon such a termination, the contractor's right to 
compensation shall cease when the period specified in such notice 
expires or the last day on which the contractor performs services 
hereunder, whichever is earlier. No costs of any kind incurred by the 
contractor after the date such notice is delivered shall be reimbursed 
hereunder except the cost of return transportation (not including travel 
allowances), if approved by the Contracting Officer. If any costs 
relating to the period subsequent to such date have been paid by USAID, 
the contractor shall promptly refund to USAID any such prepayment as 
directed by the Contracting Officer.
    (2) For the convenience of USAID, by giving not less than 15 
calendar days advance written notice to the contractor. Upon such a 
termination, contractor's right to compensation shall cease when the 
period specified in such notice expires except that the contractor shall 
be entitled to any unused vacation leave, return transportation costs 
and travel allowances and transportation of unaccompanied baggage costs 
at the rate specified in the contract and subject to the limitations 
which apply to authorized travel status.
    (3) For the convenience of USAID, when the contractor is unable to 
complete performance of his/her services under the contract by reason of 
sickness or physical or emotional incapacity based upon a certification 
of such circumstances by a duly qualified doctor of medicine approved by 
the Mission. The contract shall be deemed terminated upon delivery to 
the Contractor of a termination notice. Upon such a termination, the 
contractor shall not be entitled to compensation except to the extent of 
any unused vacation or sick leave but shall be

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entitled to return transportation, travel allowances, and unaccompanied 
baggage costs at rates specified in the contract and subject to the 
limitations which apply to authorized travel status.
    (b) The contractor, with the written consent of the Contracting 
Officer, may terminate this contract upon at least 15 days' written 
notice to the Contracting Officer.

                  17. Release of Information (DEC 1985)

    All rights in data and reports shall become the property of the U.S. 
Government. All information gathered under this contract by the 
Contractor and all reports and recommendations hereunder shall be 
treated as confidential by the Contractor and shall not, without the 
prior written approval of the Contracting Officer, be made available to 
any person, party, or government, other than USAID, except as otherwise 
expressly provided in this contract.

                         18. Notices (DEC 1985)

    Any notice, given by any of the parties hereunder, shall be 
sufficient only if in writing and delivered in person or sent by 
telegraph, telegram, registered, or regular mail as follows:
    To USAID: Administrator, U.S. Agency for International Development, 
Washington, D.C. 20523-0001, Attention: Contracting Officer.
    (name of the cognizant Contracting Officer with a copy to the 
appropriate Mission Director).
    To Contractor:
    At his/her post of duty while in the Cooperating Country and at the 
Contractor's address shown on the Cover Page of this contract or to such 
other address as either of such parties shall designate by notice given 
as herein required. Notices hereunder shall be effective in accordance 
with this clause or on the effective date of the notice, whichever is 
later.

                         19. Reports (June 1987)

    (a) The Contractor shall prepare and submit 2 copies of each 
technical report required by the schedule of this contract to the Bureau 
for Program and Policy Coordination, Center for Development Information 
and Evaluation, Development Information Division (PPC/CDIE/DI). All 
documents should be mailed to:
    PPC/CDIE/DI, Acquisitions, Room 209, SA-18, U.S. Agency for 
International Development, Washington, D.C. 20523-1802.
    The title page of all reports forwarded to PPC/CDIE/DI pursuant to 
this paragraph shall include a descriptive title, the author's name(s), 
contract number, project number and title, contractor's name, name of 
the USAID project office, and the publication or insurance date of the 
report.
    (b) When preparing reports, the contractor shall refrain from using 
elaborate art work, multicolor printing and expensive paper/binding, 
unless it is specifically authorized in the Contract Schedule. Wherever 
possible, pages should be printed on both sides using single spaced 
type.

                 20. Use of Pouch Facilities (July 1993)

    (a) Use of diplomatic pouch is controlled by the Department of 
State. The Department of State has authorized the use of pouch 
facilities for USAID contractors and their employees as a general 
policy, as detailed in paragraphs (a)(1) through (a)(6) of this 
provision. However, the final decision regarding use of pouch facilities 
rests with the Embassy or USAID Mission. In consideration of the use of 
pouch facilities as hereinafter stated, the Contractor agrees to 
indemnify and hold harmless the Department of State and USAID for loss 
or damage occurring in pouch transmission.
    (1) Contractors are authorized use of the pouch for transmission and 
receipt of up to a maximum of 0.90 kilogram/2 pounds per shipment of 
correspondence and documents needed in the administration of foreign 
assistance programs.
    (2) U.S. citizen contractors are authorized use of the pouch for 
personal mail up to a maximum of 0.45 kilogram/one pound per shipment 
(but see (a)(3) below). Non-U.S. citizen Contractors are not permitted 
use of the pouch for personal mail except to the extent that such use 
may be authorized by the Chief of Mission.
    (3) Merchandise, parcels, magazines, or newspapers are not 
considered to be personal mail for purpose of this clause, and are not 
authorized to be sent or received by pouch.
    (4) Official and personal mail under paragraphs (a) (1) and (2) of 
this provision, sent by pouch, should be addressed as follows:
    Individual's Name (C), U.S. Agency for International Development, 
Washington, D.C. 20523-0001.
    (5) Mail sent via the diplomatic pouch may not be in violation of 
U.S. Postal laws and may not contain material ineligible for pouch 
transmission.
    (6) Use of military postal facilities (APO/FPO) is authorized to 
U.S. contractors on the same basis as approved for direct-hire employees 
at the USAID Mission. Posts having access to APO/FPO facilities and 
using such for diplomatic pouch dispatch, may, however, accept official 
and personal mail for the pouch provided, of course, adequate postage is 
affixed when onward transmission (mail to other than USAID/W) through 
U.S. postal channels is required.
    (b) The contractor shall be responsible for compliance with these 
guidelines and limitations on use of pouch facilities.
    (c) Specific additional guidance on use of pouch facilities in 
accordance with this

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clause is available from the Post Communication Center at the Embassy or 
USAID Mission.

                    21. Biographical Data (June 1990)

    (a) The contractor agrees to furnish biographical information to the 
Contracting Officer on forms (SF 171 and 171As) provided for that 
purpose.
    (b) Emergency locator information. The contractor agrees to provide 
the following information to the Mission Administrative Officer on 
arrival in the host country regarding himself/herself and dependents:
    (1) Contractor's full name, home address, and telephone number 
including any after-hours emergency number(s).
    (2) The name and number of the contract, and whether the individual 
is the contractor or the contractor's dependent.
    (3) The name, address, and home and office telephone number(s) of 
each individual's next of kin.
    (4) Any special instructions pertaining to emergency situations such 
as power of attorney designees or alternate contact persons.

     22. U.S. Resident Hire Personal Services Contractor (June 1990)

    A contractor meeting the definition of a U.S. Resident Hire PSC 
contained in Section 12, General Provisions, Clause 1, Definitions, 
shall be subject to U.S. Federal Income Tax, but shall not be eligible 
for any fringe benefits (except contributions for FICA, health insurance 
and life insurance), allowances, or differentials, including but not 
limited to travel and transportation, medical, orientation, home leave, 
etc., unless such individual can demonstrate to the satisfaction of the 
Contracting Officer that he/she has received similar benefits/allowances 
from their immediately previous employer in the Cooperating Country, or 
the Mission Director determines that payment of such benefits would be 
consistent with the Mission's policy and practice and would be in the 
best interest of the U.S. Government.

            23. Orientation and Language Training (July 1993)

    (a) Except as set forth in paragraph (b)(4) below, the Contractor 
shall receive a maximum of 2 weeks USAID orientation before travel 
overseas. The dates of orientation shall be selected by the Contractor 
and approved by the Contracting Officer from the orientation schedule 
provided by USAID.
    (b) As either set forth in the Contract Schedule, or provided in 
writing by the Contracting Officer, the following may be authorized 
taking into consideration specific job requirements, contractor's prior 
overseas experience, or unusual circumstances, in connection with 
orientation of individual Contractors:
    (1) Modified orientation,
    (2) Language training,
    (3) Orientation for Contractor's dependents at contract expense.
    (4) Waiver of orientation for individual contractor.
    (c) Transportation costs and travel allowances not to exceed one 
round trip from the Contractor's residence to place of orientation and 
return will be reimbursed, pursuant to Clause 10 of the General 
Provisions, entitled ``Travel and Transportation Expenses,'' if the 
orientation is more than 80 kilometers/50 miles from the contractor's 
residence.
    Allowable salary costs during the period of orientation are also 
reimbursable.

 24. Conditions for Contracting Prior to Receipt of Security Clearance 
                               (July 1993)

    (a) U.S. Resident Hire PSC. The contractor may commence work prior 
to the completion of the security clearance. However, until such time as 
clearance is received, the contractor shall have no access to classified 
or administratively controlled materials. Further, failure to obtain 
clearance will constitute cause for contract termination in accordance 
with paragraph (a)(2) of General Provision 16 of this contract.
    (b) U.S. PSC--Non-Resident Hire. The contractor may elect to 
commence travel to post immediately to begin work prior to completion of 
the security clearance. However, until such time as security clearance 
is received, the contractor shall:
    (1) Have no access to classified or administratively controlled 
materials;
    (2) Be authorized to travel to post himself/herself only; and
    (3) Be authorized no entitlements other than those normally 
authorized for short term (less than a year) employees at post. Even if 
the contract is for one year or more, dependents may not accompany 
contractor unless at his/her expense, and transportation/storage of 
household/personal effects and motor vehicle will not be financed by 
USAID prior to the receipt of the security clearance. Upon receipt of 
clearance, the Contracting Officer will authorize reimbursement of any 
such costs borne at contractor's expense prior to clearance provided 
they are reasonable, allocable and allowable. If appropriate given the 
length of time remaining, the Contracting Officer will authorize 
dependent travel and shipment/storage of motor vehicle and effects. 
Allowances which would not be provided to short term employees will be 
authorized after clearance is received provided that the contractor is 
otherwise entitled to such benefits. Failure to obtain the security 
clearance will constitute cause for contract termination in accordance 
with paragraph (a)(2) of General Provision 16 of this contract.

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          25. Medical Evacuation (MEDEVAC) Services (JUL 2007)

    (a) The PSC must obtain MEDEVAC service coverage including coverage 
for authorized dependents while performing personal services abroad.
    USAID will reimburse the total cost of MEDEVAC insurance to the PSC. 
The PSC must provide proof of coverage to the CO in order to receive 
reimbursement.
    (b) Exceptions. (1) A PSC and authorized dependents with a health 
insurance program that includes sufficient MEDEVAC coverage as approved 
by the Contracting Officer are not required to obtain MEDEVAC service 
coverage.
    (2) The Mission Director at the post of assignment may make a 
written determination to waive the requirement for such coverage. The 
determination must be based on findings that the quality of local 
medical services or other circumstances obviate the need for such 
coverage for PSCs and their dependents located at post.

                      26. Governing Law (NOV 1996)

    This contract is established under the procurement authorities of 
the United States Government and shall be interpreted in accordance with 
the body of Federal Procurement Law in the United States. This contract 
is a complete statement of the duties, compensation, benefits, leave, 
notice, termination, and the like; therefore, the laws of the country of 
performance with respect to labor and contract matters shall not apply 
to either the carrying out of the obligations of the parties or to the 
interpretation of this agreement.

    13. FAR Clauses to be Incorporated in Full Text in Personal Services 
Contracts.
    The following FAR Clauses are always to be used along with the 
General Provisions. They are required in full text.
1. Covenant Against Contingent Fees 52.203-5
2. Electronic Funds Transfer Payment Methods 52.232-28
3. Disputes 52.233-1 (Alternate 1)
4. Preference for U.S. Flag Air Carriers 52.247-63

    14. FAR Clauses to be Incorporated by Reference in Personal Services 
Contracts
    The following FAR Clauses are to be used along with the General 
Provisions, and when appropriate, be incorporated in each personal 
services contract by reference:
1. Anti-Kickback Procedures 52.203-7
2. Limitation on Payments to Influence Certain Federal Transactions 
          52.203-12
3. Audit and Records--Negotiation 52.215-2
4. Privacy Act Notification 52.224-1
5. Privacy Act 52.224-2
6. Taxes--Foreign Cost Reimbursement Contracts 52.229-8
7. Interest 52.232-17
8. Limitation of Cost 52.232-20
9. Limitation of Funds 52.232-22
10. Assignment of Claims 52.232-23
11. Protection of Government Buildings, Equipment, and Vegetation 
          52.237-2
12. Notice of Intent to Disallow Costs 52.242-1
13. Inspection 52.246-5
14. Limitation of Liability--Services 52.246-25

[62 FR 39453, July 23, 1997, as amended at 64 FR 42040, Aug. 3, 1999; 72 
FR 19670, Apr. 19, 2007]



                 Sec. Appendix E to Chapter 7 [Reserved]



Sec. Appendix F to Chapter 7--Use of Collaborative Assistance Method for 
                          Title XII Activities

                             1. Introduction

    This appendix provides a detailed description of the collaborative 
assistance method of contracting. This is a specialized contracting 
system which may be used for contracting with educational institutions 
eligible under, and for activities authorized under, Title XII of the 
Foreign Assistance Act of 1961, as amended, under the circumstances 
described in AIDAR 715.613-71.

                               2. Purpose

    The collaborative assistance system is designed to:
    (a) Increase the joint implementation authority and responsibility 
of the contractor and the LDC;
    (b) Encourage more effective collaboration between all participating 
parties (USAID, host country, and contractor) at important stages, 
including the design stage of a technical assistance project.

                                3. Policy

    The collaborative assistance approach represents an alternative 
method for long-term technical assistance which involves professional 
collaboration with eligible Title XII institutions and LDC counterparts 
for a problem-solving type activity to develop new institutional forms 
and capabilities, to devise operating systems and policies, and to 
conduct joint research and development--including training. In such an 
activity, the difficulty in defining, in advance, precise and 
objectively verifiable contractor inputs and long-term project content 
as a basis for payment usually requires a flexible approach to project 
design, contracting, and project implementation. Such flexibility is 
also essential to the collaborative style which is responsive to LDC 
desires in problem areas of great complexity and varying uncertainty. 
Other types of technical assistance, which are usually shorter in term 
are amenable to

[[Page 118]]

more precise definition in advance, or involve closely defined and 
relatively standardized services, or are otherwise more analogous to 
commodity resource transfers, may be suitable for other contracting 
methods, e.g., certain forms of institution building, on-the-job 
training, resource surveys, etc. The collaborative assistance method is 
an approved method for providing technical assistance when used in 
accordance with the circumstances outlined above, and with the 
guidelines set forth in paragraph 4, below.

                      4. Implementation Procedures

    (a) Introduction. This paragraph 4, provides background information, 
guidelines and procedures to effect the implementation of the policy set 
forth in paragraph 3 of this appendix.
    (b) Conditions and practices. In order for this policy to work 
effectively even when the proposed activity fits the criteria described 
under Policy, there must also be:
    (1) Acceptance of the notion that the host country, in consultation 
with the contractor, is in the best position to make tactical, day-to-
day decisions on project inputs within agreed-upon limitations and 
output expectations;
    (2) Sufficient trust and respect between the Agency and the 
contractor to allow this flexible implementation authority;
    (3) A direct-hire project monitor with appropriate background to be 
knowledgeable of progress and to assist in an advisory and facilitative 
capacity, both during and between periodic reviews. In addition, the 
following important conditions must be met:
    (i) Adequate preproject communication between, and identification of 
assistance required by, the host government and USAID;
    (ii) Full joint planning and improved project design (``Joint'' as 
used herein refers to the primary parties, i.e., the collaborating 
institutions, as well as the host government and USAID. In some 
instances, it can also include other donors.);
    (iii) Careful contractor selection, i.e., matching of the 
contractor's technical and managerial capabilities to the anticipated 
requirements of the overseas activity;
    (iv) Establishment of relationships between host country, USAID and 
contractor staff to include host country leadership, flexible 
implementation authority, and effective management by the contractor;
    (v) Improved joint project evaluation, feedback, and replanning; and
    (vi) Simplified administrative procedures and greater reliance on 
in-country logistical support.
    (c) Project Stages and Contractor Involvement. In the long-term 
technical assistance projects as described above, there are four 
discrete but sometimes overlapping decision stages which take place--
with the principal contractor usually involved in the last three.
    (1) Problem analysis and project identification. After the host 
government has indicated a desire for U.S. collaboration on a particular 
problem and the USAID field mission has determined that the proposed 
activity is consistent with its program goals and priorities, 
considerable effort is usually necessary to refine further the project 
purpose and type of assistance required and provide a basis for 
contractor selection. This is a crucial step and is focused on results 
sought--on what the prospective contractor is expected to produce in 
relation to resources to be used and to project purpose. It should 
result in a clear understanding of what the LDC wants, and an overall 
plan which includes agreement on specific objectives or outputs, 
acceptable types of activities and inputs and an initial budget--
resulting in project documentation. At this step, USAID makes decisions 
it cannot delegate on what it will support and at what cost. If needed 
to supplement its direct-hire expertise, USAID can use outside 
consultants for analysis and advice but retains the ultimate decision 
for itself in collaboration with, but independent of, the requesting 
host government. (Normally, the proposed contractor for project 
definition and subsequent implementation should not have been involved 
in the problem analysis and project identification stage as a consultant 
to either the host country government, host institution, or USAID. If a 
potential contractor has been so involved, particular care must be taken 
to prevent actual or apparent organizational conflicts of interest in 
the procurement that follows. This could require at a minimum, a careful 
assessment and complete documentation of reasons for selection.)
    Normally, there will need to be some mutual interaction between the 
overall planning stage outlined here and the detailed planning and 
design work which follows in the next phase. There will usually be some 
overlap, with preliminary decisions in this stage providing a basis for 
selection of implementing agents for stage (2) which in turn proceeds 
through some preliminary planning to guide completion of stage (1) as a 
basis for long-term contracting.
    (2) Project definition. At this stage, having selected the 
implementing agent, the U.S. and LDC organizations which will be 
collaborating in carrying out the project are encouraged to work out, to 
their mutual \3/8\satisfaction, the particulars of what to do and how to 
do it (i.e., detailed project design) within the context of LDC 
leadership and responsibility and the general agreements and budget 
reached in stage (1). The emphasis here is on the technical approach to 
be utilized and the scheduling and management of project inputs. This 
may involve a short-term reconnaissance and/or an extensive period of 
detailed joint planning and feeling out of what is feasible during a 
preliminary

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operating phase of the project, possibly lasting as much as a year or 
more. This stage recognizes the importance, for the problem-solving or 
ground breaking types of technical assistance, of involving the U.S. and 
LDC implementing organizations together as soon as the detailed design 
work begins. USAID's role here is to facilitate, not direct, the joint 
planning, assure consistency with prior agreements or concur in changes, 
affirm that the implementing parties have agreed on a reasonable project 
design, and prepare or cause to be prepared the documentation required 
for stage (3), including any amendments that might be required to the 
project documentation. If and when a decision is made by the host 
government and USAID to proceed into the operating phase with the same 
contractor, the U.S. intermediary should be treated as a cooperating 
partner in the negotiation of the subsequent long-term operating 
agreement(s) with the host government, host institution and USAID.
    (3) Implementation. The results of the approach outlined in the 
stage above should include, in addition to a better understanding and 
more meaningful commitment by all parties, the following specific 
products:
    (i) A jointly developed life-of-project design which reflects the 
commitment of all parties and includes clear statements of purpose, 
principal outputs, eligible types of activity and expenditure limits, 
critical assumptions, and major progress indicators;
    (ii) A workplan and input schedule for the first two years or at 
least as long as the expenditure period for the next obligation of 
project funds;
    (iii) Provisions for any administrative support, special services or 
other inputs by the host country, contractor, and/or USAID; and
    (iv) A plan for periodic joint evaluation and review or progress and 
subsequent workplans, normally annually, with the participation of all 
parties.
    Appropriate elements of these agreements and understandings are now 
embodied in a contract for project implementation, as described in 
paragraph (d)(3)(i) of the section on Contracting Implications. This 
contract allows the U.S. intermediary to apply its judgment, reflecting 
close collaboration with its LDC colleagues, in adjusting the flow of 
USAID-financed inputs and in making other operational decisions with a 
minimum of requirements for prior USAID approvals or contract amendments 
as long as the contractor stays within the bounds of the approved 
overall plan and budget. In this phase, USAID will give technical 
assistance contractors the authority and responsibility for using their 
specialized expertise to the fullest extent in the scheduling and 
managing of project inputs.
    (4) Monitoring, joint evaluation and replanning. With increased 
flexibility and responsibility for implementation placed with the 
technical assistance contractor, the host government, and/or 
institutional collaborator, improved and timely progress reporting and 
periodic, joint, and structured reviews of results and evolving plans 
are imperative as a basis for monitoring and evaluating contractor 
performance, revalidating or adjusting project design, and for 
determining future funding levels and commitments.
    Both the contractor's annual report and the joint review should be 
structured within the framework of purpose, outputs, performance 
indicators, etc., originally established in the project indentification 
phase--as modified by detailed project design--and reflected in the 
Project Agreement and other pertinent documentation. The field review 
will normally serve as the occasion for discussing changes in or 
additions to previously agreed-to workplans as well as proposing changes 
in purpose, types of activities authorized and budgets which require 
contract amendment. Obviously, the appropriate host government, host 
institution, and senior contractor officials should be thoroughly 
involved in the process, which will have to be adapted to the conditions 
within specific projects and countries. An important USAID 
responsibility is to assure that there is appropriate host country 
participation in developing and improving project plans prior to new 
obligations of funds. The special requirements and responsibilities of 
the various parties shall also be reflected in the project agreement and 
contract terms and in guidelines on the content of annual reports, 
evaluation procedures, etc.
    Standard checking on services actually delivered as a basis for 
reimbursement will be continued including appropriate audit of 
expenditures.
    (d) Contracting implications. The principal elements of change in 
present contracting practices, as detailed below, are earlier selection 
and involvement of the prime contractor, contracting by major stages of 
project design and operations, minimizing the need for precontract 
negotiations and contract amendments and USAID approvals, and providing 
technical assistance contractors with the authority and responsibility 
needed to manage implementation within the approved program bounds.
    (1) Selection. The early involvement of the contractor in the 
definition stage of a long-term technical assistance project, after 
USAID decides what it wants to undertake in stage (1), does not alter 
the Agency's responsibility to select its contractors carefully and in 
full compliance with appropriate contracting regulations and selection 
procedures. What is required here is that contractor selection be 
carried out at an earlier stage than has sometimes been the Agency 
practice in the past or with other types of

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contracts and in anticipation that the contractor, assuming adequate 
performance, will participate in all subsequent phases until final 
completion.
    (2) Contracting stages. In contracting, the initial design stage 
should be separated from the longer term implementation stage without 
any USAID commitment to undertake the second until it has exercised its 
independent judgment based on the product of the first plus any outside 
expert appraisal it and the host country want to use.
    The long-term implementation stage itself may be further subdivided 
into contract periods which permit time between predetermined events for 
analysis, determination of new project requirements, and evaluation of 
performance prior to initiating the next phase by contract amendment/
extension. If, for any reason, such an examination does not appear to 
warrant project continuation, then termination of the project and/or 
contract would be the next step.
    (3) Flexible implementation authority. While good project design 
will eliminate or diminish many operational problems, the very nature of 
long-term technical assistance requires flexible implementation within 
agreed purposes, ultimate outputs, types of activity and available 
financing. With these key variables for USAID management control 
established, contracts should be written so as to minimize the need for 
amendments and USAID approval of changes in input particulars. This can 
be facilitated, both for the USAID, host country, institution, and the 
contractor by:
    (i) Retention of operational plan in contract and removal of 
workplan. The contract narrative will contain the life-of-the-project 
Operational Plan, consistent with the project design as developed in 
stage (2) and reflected in the project documentation (and subsequent 
amendments thereto). The Operational Plan includes a statement of the 
purpose to be achieved, the outputs to be produced by the contractor and 
the types of activities to be undertaken, the more significant 
indicators of progress, a general description of the type of inputs that 
are authorized and intended to be provided during the life of the 
project, and the overall budget.
    In order to allow adjustments at the implementation level without 
going through the contract amendment process, the detailed but short-
term workplan containing specific descriptions and scheduling of all 
inputs such as numbers and types of staff, participants, commodities, 
etc., and specific activities, will not be a part of the contract. It is 
a working document to be modified in the field when the situation 
demands. The latest version will be available as a supporting document 
to justify proposed new obligation levels. Normally, the workplan and 
derived budget will cover a rolling two year period, i.e., each year 
another yearly increment is added after review and approval.
    (ii) Budget flexibility. To support this implementation flexibility, 
contract budget or fiscal controls will be shifted from fixed line items 
for each input category to program categories, permitting the technical 
assistance contractor to adjust amounts and timing to achieve previously 
approved types of activity. This same type of flexibility should apply 
to any local currency supplied for project operations and/or contractor 
staff support. While an essential corollary to eliminating the workplan 
from the contract, this is not a unique procedure under cost 
reimbursement type contracts when the contractor has demonstrated 
adequate management capability.
    (iii) Negotiation of advance understandings. To permit university 
and international research center contractors to manage their activities 
in accordance with their own policies and procedures and thereby sharpen 
their management responsibility while achieving substantial savings in 
time and reduced documentation, USAID may negotiate advance 
understandings with its technical assistance contractors on dollar costs 
and administrative procedures that would be included by reference in its 
subsequent contracts. Upon receipt of a request from the contractor that 
their policies be reviewed and approved for usage in their contract in 
lieu of the standard terms and conditions, OP/PS/OCC, USAID/W will 
initiate negotiations of such policies in an expeditious manner. The 
approved policies will be used in all relevant relations involving the 
Agency and respective contractors in lieu of traditional contract 
standard provisions, whenever this may be appropriate. This does not 
apply to local currency costs and host government procedures which must 
be negotiated in each case.
    The purpose of the practices listed above is not only to give a 
qualified contractor the authority to adjust the composition and timing 
of inputs but to assign to it clear responsibility for managing such 
resources, as the evolving circumstances require, to achieve the agreed-
upon outputs on a cost efficient basis. It should also reduce the delay 
and paperwork involved in frequent but minor contract amendments, and 
approvals. For the agency as a whole, both in the Mission and in USAID/
W, these have involved a large workload and cost.
    (e) Role of USAID. Nothing in this appendix is intended to delegate, 
diminish or otherwise modify USAID's final responsibility for the 
prudent management of public funds and its own programs. Rather in 
withdrawing from the day-to-day involvement in and responsibility for 
the management of adjustment of the flow of inputs during the 
implementation, the best use of limited agency staff and time can be 
devoted to protecting

[[Page 121]]

the public interest in gaining maximum results from the funds 
appropriated for technical assistance by:
    (1) Seeking optimum identification in terms of LDC priorities and 
U.S. capabilities;
    (2) Mobilizing and selecting the best U.S. professional talent to 
design and carry out the project;
    (3) Monitoring what is happening to assure adequacy of processes, 
get a feel of results, assure actual delivery of inputs being financed;
    (4) Assuring that the attention of USAID's implementation agents and 
LDC colleagues stay well focused on project purpose and results to be 
achieved (outputs) and the relation to these of what is being done and 
actual results;
    (5) Providing intermediaries adequate authority and responsibility 
to adjust inputs promptly and sensitively to the evolving project 
situations.
    Attention to these considerations, and to achievements of the 
preimplementation conditions prescribed above, should greatly increase 
the chances for successful project completion and impact on a cost 
effective basis, which is the final measurement of prudent management.

  Attachment to Appendix F--Guidelines for Requests for Expressions of 
                                Interest

                      A. Length and Level of Detail

    A Request for Expression of Interest (REI) should include more than 
just a short letter expressing interest, but should not be in the detail 
of a technical proposal (RFTP). The REI is not the only source of 
information that can or should be used for selection, but at least a 
minimum level of information should be contained in each document. A ten 
page paper that responds to the selection criteria included in every REI 
should be sufficient for evaluation purposes. The selection criteria 
should specify the technical inputs required for successful execution of 
the project and normally require a response in three general areas:
    1. A description of the institution's capability to address the 
problem described in the REI.
    2. Any related experience, whether in the country or region or in 
the problem area.
    3. A demonstrable commitment of the institution to support the 
project.
    The responses should address the capability, experience, and 
commitment to the particular project.

                    B. Specific Personnel Information

    The response should specify within the areas set out in the 
selection criteria the following planning and personnel factors.
    1. The design team plan and the scope of work for each member.
    2. A list of candidates for the design team and their credentials.
    3. A list of possible candidates for long-term assignment to the 
project. (Since there has been no project design, the specific technical 
assistance slots and technical responsibilities are vague. But it is 
expected that at least half of the personnel needs can be estimated 
early in the project. The institution should make its best guess for the 
team and present to the Agency the persons or types of persons with whom 
they are likely to contract.)

                   C. Multiple Institution Submissions

    Joint effort on the part of several institutions is encouraged when 
appropriate. A single institution may submit an expression of interest 
for part of the project without knowledge of other collaborators or it 
may submit information in response to A and B of this attachment as part 
of a suggested collection of institutions. In either case, a proposed 
plan for cooperation is necessary.
    However, such joint efforts must specify the division of 
responsibilities for the planning and personnel factors indicated in B 
of this attachment. Often USAID will identify the need for cooperation 
and suggest such an effort in the REI. Even if USAID does not suggest 
collaboration, joint efforts with a description of the cooperation would 
be an appropriate way to respond to an REI.

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

[49 FR 13301, Apr. 3, 1984, as amended at 49 FR 33669, Aug. 24, 1984; 50 
FR 16089, Apr. 24, 1985; 51 FR 20652, June 6, 1986; 52 FR 6160, Mar. 2, 
1987]



               Sec. Appendixes G-H to Chapter 7 [Reserved]



    Sec. Appendix I to Chapter 7--USAID's Academic Publication Policy

                         1. Statement of Policy

    This is a statement of USAID policy on publication, or release to 
parties other than those specifically authorized, of unclassified 
materials gathered or developed under contracts with academic 
institutions.

                        2. Underlying Principles

    USAID favors and encourages the publication of scholarly research as 
well as the maximum availability, distribution, and use of knowledge 
developed in its program.
    This policy statement does not deal with material that is classified 
for security reasons. It does deal with considerations of national 
interest, not of sufficient gravity to warrant security classification, 
but serious enough to affect adversely the conduct of

[[Page 122]]

U.S. assistance programs. Consequently, in addition to the requirements 
of courtesy, propriety, and confidence which normally guide scholars in 
their work, there should also be consideration of the potential 
repercussions of publication on the successful execution of development 
and other cooperative programs in which the United States and foreign 
countries are involved.

                       3. Operational Definitions

    The Agency draws a distinction between two kinds of manuscripts 
which a scholar may wish to publish:
    (a) A report which is prepared and delivered to the Agency under the 
terms of the contract (a ``contract manuscript''); and
    (b) An article or book based upon experience and information gained 
under an USAID contract but not prepared or delivered under the contract 
(a ``non-contract manuscript'').
    There are two kinds of actions, to be specified in the contract, 
which the Agency can take upon notification of a contractor's desire to 
publish:
    (a) Comment only, under which USAID and the foreign government 
involved may review the manuscript, and have their comments considered 
seriously by the contractor prior to publication; and
    (b) Authorization for release, which USAID may withhold if 
reconciliation between the national interest and the author's interest 
is impossible.

                          4. Policy Statements

    (a) USAID, as a general rule, will not require an academic 
institution to obtain permission to publish the written work produced 
under a contract. It will ask for the opportunity to review the 
manuscript for comment only, prior to publication.
    In the case of a contract manuscript, USAID reserves the right to 
disclaim endorsement of the opinions expressed; if it is a noncontract 
manuscript, USAID reserves the right to disassociate itself from 
sponsorship or publication.
    (b) On the other hand, USAID may reserve the right of authorization 
for release in those exceptional cases where conditions exist making it 
reasonably foreseeable, in light of the contract's scope of work and the 
manner and place of performance, that the written work to be prepared 
and delivered under the contract may have adverse repercussions on the 
relations and programs of the United States. Where this right is 
reserved, it must be so specified in the contract. In determining where 
to reserve such right, USAID will consider all relevant factors, 
including:
    (1) The extent to which prompt and full performance of the contract 
will require access, facilitated by reason of the contract, to 
information not generally available to scholars;
    (2) The extent to which the work involves matters of political 
concern to foreign countries, particularly where any substantial part of 
the work is to be performed therein;
    (3) The extent to which, by reason of USAID's close involvement and 
cooperation in the performance of the contract, the work product may be 
so identified with USAID itself as to prevent effective disclaimer of 
USAID endorsement thereof;
    (4) The extent to which the objective of the contract is to provide 
advice to USAID or to a foreign government of immediate operational 
significance in the conduct of the USAID program or the implementation 
of governmental programs in the host country;
    (5) The desires of the host country.

                            5. Implementation

    The successful implementation of this policy on publication rests on 
a thorough understanding and acceptance of these principles by USAID and 
the prospective contractor. The actual publications provision for a 
particular contract, then, would be so worded as to reflect the 
agreement reached in the contract negotations.
    USAID's concern with noncontract manuscripts is related to the 
identification of a manuscript with the U.S. Government. This concern 
will be modified by the passage of time following termination of the 
contract.
    In the normal case of prepublication review for USAID comment, the 
institution will submit a copy of the manuscript not later than the date 
of submission to the publisher. This gives the Agency time to comment if 
it is deemed appropriate. However, in the case of review for 
authorization, timely notification of USAID's response will be given, 
consistent with the size of the manuscript and the number and location 
of the parties involved.
    The Agency will make every effort to expedite this review procedure 
in accordance with the underlying principle described at the beginning 
of this policy statement.

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

[49 FR 13304, Apr. 3, 1984]



Sec. Appendix J to Chapter 7--Direct USAID Contracts With a Cooperating 

Country National and With a Third Country National for Personal Services 
                                 Abroad

                               1. General

    (a) Purpose. This appendix sets forth the authority, policy, and 
procedures under which USAID contracts with cooperating

[[Page 123]]

country nationals or third country nationals for personal services 
abroad.
    (b) Definitions. For the purpose of this appendix:
    (1) Personal services contract (PSC) means a contract that, by its 
express terms or as administered, make the contractor personnel appear, 
in effect, Government employees (see FAR 37.104).
    (2) Employer-employee relationship means an employment relationship 
under a service contract with an individual which occurs when, as a 
result of (i) the contract's terms or (ii) the manner of its 
administration during performance, the contractor is subject to the 
relatively continuous supervision and control of a Government officer or 
employee.
    (3) Non-personal services contract means a contract under which the 
personnel rendering the services are not subject either by the 
contract's terms or by the manner of its administration, to the 
supervision and control usually prevailing in relationships between the 
Government and its employees.
    (4) Independent contractor relationship means a contract 
relationship in which the contractor is not subject to the supervision 
and control prevailing in relationships between the Government and its 
employees. Under these relationships, the Government does not normally 
supervise the performance of the work, or the manner in which it is to 
be performed, control the days of the week or hours of the day in which 
it is to be performed, or the location of performance.
    (5) Contractor means a cooperating country national or a third 
country national who has entered into a contract pursuant to this 
appendix.
    (6) Cooperating country means the country in which the employing 
USAID Mission is located.
    (7) Cooperating country national (CCN) means an individual who is a 
cooperating country citizen or a non-cooperating country citizen 
lawfully admitted for permanent residence in the cooperating country.
    (8) Third Country National (TCN) means an individual
    (i) Who is neither a citizen nor a permanent legal resident alien of 
the United States nor of the country to which assigned for duty, and
    (ii) Who is eligible for return to his/her home country or country 
of recruitment at U.S. Government expense [see Section 12, General 
Provision 9 paragraph (n)].

                             2. Legal Basis

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

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

                            3. Applicability

    (a) This appendix applies to all personal services contracts with 
CCNs or TCNs to provide assistance abroad under Section 636(a)(3) of the 
FAA.
    (b) This appendix does not apply to:
    (1) Contracts for non-personal services with TCNs or CCNs; such 
contracts are covered by the basic text of the FAR and AIDAR.
    (2) Personal services contracts with U.S. citizens or U.S. resident 
aliens for personal services abroad; such contracts are covered by 
Appendix D of this chapter.
    (3) Appointments of experts and consultants as USAID direct-hire 
employees; such appointments are covered by USAID Handbook 25, 
Employment and Promotion or superseding Chapters of the Automated 
Directive System (ADS).

                                4. Policy

    (a) General. USAID may finance, with either program or operating 
expense (OE) funds, the cost of personal services as part of the 
Agency's program of foreign assistance by entering into a direct 
contract with a CCN or a TCN for personal services abroad.
    (1) Program funds. Under the authority of Section 636(h) of the FAA, 
program funds may be obligated for periods up to five years where 
necessary and appropriate to the accomplishment of the tasks involved.
    (2) Operating expense funds. Pursuant to USAID budget policy, OE 
funded salaries and other recurrent cost items may be forward funded for 
a period of up to three (3) months beyond the fiscal year in which these 
funds were obligated. Non-recurring cost items may be forward funded for 
periods not to exceed twenty-four (24) months where necessary and 
appropriate to accomplishment of the work. \2\
---------------------------------------------------------------------------

    \2\ If there is a need, these contracts may be written for 5 years 
but only funded as outlined above.
---------------------------------------------------------------------------

    (b) Limitations on Personal Services Contracts. (1) Personal 
services contracts may only be used when adequate supervision is 
available.
    (2) Personal services contracts may be used for commercial 
activities. Commercial activities provide a product or service which 
could be obtained from a commercial source. See Attachment A of OMB 
Circular A-76 for a representative list of such activities.

[[Page 124]]

    (3) Notwithstanding any other provision of USAID directives, 
regulations or delegations, Cooperating Country or Third Country 
Nationals may be delegated or assigned any authority, duty or 
responsibility, delegated or assigned U.S. citizen direct-hire employees 
(USDH employees) except that:
    a. They may not supervise USDH employees of USAID or other U.S. 
Government agencies. They may supervise USPSCs and non-U.S. citizen 
employees.
    b. They may not be designated a Contracting Officer or delegated 
authority to sign obligating or subobligating documents.
    c. They may represent the agency, except that communications that 
reflect a final policy, planning or budget decision of the agency must 
be cleared by a USDH employee.
    d. They may participate in personnel selection matters but may not 
be delegated authority to make a final decision on personnel selection.
    e. Services which involve security classified material.
    (4) Exceptions. Exceptions to the limitations in (b)(3) must be 
approved by the Assistant Administrator for Management (AA/M).
    (c) Conditions of Employment. (1) General. For the purpose of any 
law administered by the U.S. Office of Personnel Management, USAID PSC 
contractors are not to be regarded as employees of the U.S. Government, 
are not included under any retirement or pension program of the U.S. 
Government, and are not eligible for the Incentive Awards Program 
covered by Uniform State/USAID/USIA regulations. Each USAID Mission is 
expected to participate in the Joint Special Embassy Incentive Awards 
Program. The program is administered by a joint committee which 
establishes procedures for submission, review and approval of proposed 
awards. Other than these exceptions, CCNs and TCNs who are hired for 
work in a cooperating country under PSCs generally will be extended the 
same benefits and be subject to the same restrictions as Foreign Service 
Nationals (FSNs) employed as direct-hires by the USAID Mission.
    (2) Compensation. (i) It is USAID's general policy (see AIDAR 
722.170) that PSC compensation may not, without the approval of the 
Mission Director or Assistant Administrator, exceed the prevailing 
compensation paid to personnel performing comparable work in the 
cooperating country. Compensation for TCN or CCN personal services 
contractors set in accordance with the provisions of 4c(2)(ii) below 
satisfies this requirement.
    (ii) In accordance with Section 408(a)(1) of the Foreign Service Act 
of 1980, a local compensation plan forms the basis for all compensation 
payments to FSNs which includes CCNs and TCNs. The plan is each post's 
official system of position classification and pay, consisting of the 
local salary schedule which includes salary rates, statements 
authorizing fringe benefit payments, and other pertinent facets of 
compensation for TCNs and CCNs, and the local position classification 
system as reflected in the Local Employee Position Classification 
Handbook (LEPCH) or equivalent in effect at the Mission. Compensation 
for PSCs will be in accordance with the local compensation plan, to the 
extent that it covers employees of the type or category being employed, 
unless the Mission Director determines otherwise. If the Mission 
Director determines that compensation in accordance with the local plan 
would be inappropriate in a particular instance, then compensation will 
be set in accordance with (in order of preference):
    (A) Any other Mission policies on foreign national employee 
compensation; or
    (B) Paragraphs 4(c) (d), (e), (g), (h), and (i) of Appendix D. When 
compensation is set in accordance with this exception, the record shall 
be documented in writing with a justification prepared by the requesting 
office and approved by the Mission Director.
    (iii) The earning of leave (annual and sick), allowances and 
differential (if applicable), salaries and all other related benefits 
cannot be enumerated in this Appendix as they vary from Mission to 
Mission and are based upon the compensation plan for each.
    (iv) Unless otherwise authorized, the currency in which compensation 
is paid to contractors shall be in accordance with the prevailing local 
compensation practice of the post.
    (v) CCN and TCN contractors are eligible for allowances and 
differential on the same basis as direct-hire FSN employees under the 
post compensation plan.
    (vi) A USAID PSC who is a spouse of a current or retired U.S. Civil 
Service, U.S. Foreign Service, or U.S. military service member, and who 
is covered by their spouse's government health or life insurance policy, 
is ineligible for a contribution towards the costs of annual health and 
life insurance.
    (vii) Retired CCNs and TCNs may be awarded personal services 
contracts without any reduction in or offset against their Government 
annuity.
    (3) Incentives Awards. (i) All Cooperating Country Nationals direct-
hire and Personal Services Contractors (PSCs) and Third Country 
Nationals (PSCs) of the Foreign Affairs Community are eligible for the 
Joint Special Embassy Incentive Awards Program.
    (ii) Meritorious Step Increases for USAID FSN PSCs may be authorized 
provided the granting of such increases is the general practice locally.
    (iii) The Joint Country Awards Committee administers each post's 
(Embassy) award program, including establishment of procedures for 
submission, review and approval of proposed awards.

[[Page 125]]

    (4) Training. CCN and TCN PSCs are eligible for most of the training 
courses offered in the Training Course Schedule. However, applications 
will be processed on a case-by-case basis and are required to be 
approved by the Contracting Officer.

              5. Soliciting for Personal Services Contracts

    (a) Technical Officer's Responsibilities. The Technical Officer will 
prepare a written detailed statement of duties and a statement of 
minimum qualifications to cover the position being recruited for; the 
statement shall be included in the procurement request. The procurement 
request shall also include the following additional information as a 
minimum:
    (1) The specific foreign location(s) where the work is to be 
performed, including any travel requirements (with an estimate of 
frequency);
    (2) The length of the contract, with beginning and ending dates, 
plus any options for renewal or extension;
    (3) The basic education, training, experience, and skills required 
for the position;
    (4) A certification from the officer in the Mission responsible for 
the LEPCH or equivalent that the position has been reviewed and is 
properly classified as to a title, series and grade in accordance with 
the LEPCH. If the position does not fall within the LEPCH or equivalent 
system, and estimate of compensation based on subparagraphs 4(c)(2)(ii) 
(A) or (B) of this Appendix after consultations or in coordination with 
the contract officer or executive officer;
    (5) A list of Government or host country furnished items (e.g., 
housing).
    (b) Contracting Officer's Responsibilities. (1) The Contracting 
Officer will prepare the solicitation for personal services which shall 
contain:
    (i) Three sets of certified biographical data and salary history. 
(Upon receipt, one copy of the above information shall be forwarded to 
the Project Officer);
    (ii) A detailed statement of duties or a completed position 
description for the position being recruited for;
    (iii) A copy of the prescribed contract Cover Page, Contract 
Schedule, and General Provisions as well as the FAR Clause to be 
included in full text and a list of those to be incorporated by 
reference; and
    (iv) A copy of General Notice entitled ``Employee Review of the New 
Standards of Conduct'' dated October 30, 1992.
    (2) The Contracting Officer shall comply with the limitations of 
AIDAR 706.302-70(c) as detailed in paragraph 5(c) below.
    (c) Competition. (1) Under AIDAR 706.302-70(b)(1), Personal Services 
Contracts are exempt from the requirements for full and open competition 
with two limitations that must be observed by Contracting Officers:
    (i) Offers are to be requested from as many potential offerors as is 
practicable under the circumstances, and
    (ii) a justification supporting less than full and open competition 
must be prepared in accordance with FAR 6.303.
    (2) A class justification was approved by the USAID Procurement 
Executive to satisfy the requirements of AIDAR 706.302-70(c)(2) for a 
justification in accordance with FAR 6.303. Use of this class 
justification for Personal Services Contracts with Cooperating Country 
Nationals and Third Country Nationals is subject to the following 
conditions:
    (i) New contracts are publicized consistent with Mission/Embassy 
practice on announcement of direct hire FSN positions. Renewals or 
extensions with the same individual for continuing service do not need 
to be publicized.
    (ii) A copy of the class justification (which was distributed to all 
USAID Contracting Officers via Contract Information Bulletin) must be 
included in the contract file, together with a written statement, signed 
by the Contracting Officer, that the contract is being awarded pursuant 
to AIDAR 706.302-70(b)(1); that the conditions for use of this class 
justification have been met; and that the cost of the contract is fair 
and reasonable. If the conditions in paragraphs (2)(i) and (ii) are not 
followed, the Contracting Officer must prepare a separate justification 
as required under AIDAR 706.302-70(c)(2).
    (3) Since the award of a personal services contract is based on 
technical qualifications, not price, and since the biographical data and 
salary history are used to solicit for such contracts, FAR Subparts 15.4 
and 15.5 are inappropriate and shall not be used. Instead, the 
solicitation and selection procedures outlined in this Appendix shall 
govern.

               6. Negotiating a Personal Services Contract

    Negotiating a Personal Services Contract is significantly different 
from negotiating a nonpersonal services contract because it establishes 
an employer-employee relationship; therefore, the selection and 
negotiations procedures are more akin to the personal selection 
procedures.
    (a) Technical Officer's Responsibilities. The Technical Officer 
shall be responsible for reviewing and evaluating the applications 
received in response to the solicitation issued by the Contracting 
Officer. If deemed appropriate, interviews may be conducted with the 
applicants before the final selection is submitted to the Contracting 
Officer.
    (b) Contracting Officer's Responsibilities. (1) The Contracting 
Officer shall forward a copy of biographical data and salary history 
received under the solicitation to the Technical Officer for evaluation.
    (2) On receipt of the Technical Officer's recommendation, the 
Contracting Officer

[[Page 126]]

shall conduct negotiations with the recommended applicant. The terms and 
conditions of the contract will normally be in accordance with the local 
compensation plan which forms the basis for all compensation on payments 
paid to FSNs which includes CCNs and TCNs.
    (3) The Contracting Officer shall use the certified salary history 
on the certified statement of biographical data and salary history as 
the basis for salary negotiations, along with the Technical Officer's 
cost estimate.
    (4) The Contracting Officer will obtain necessary data for a 
security and suitability clearance to the extent required by USAID 
Handbook 6, Security or superseding ADS Chapters.

                7. Executing a Personal Services Contract

    Contracting activities, whether USAID/W or Mission, may execute 
Personal Services Contracts, provided that the amount of the contract 
does not exceed the contracting authority that has been redelegated to 
them. See AIDAR 701.601. In executing a personal service contract, the 
Contracting Officer is responsible for insuring that:
    (a) The proposed contract is within his/her delegated authority;
    (b) A written detailed statement of duties covering the proposed 
contract has been received;
    (c) The proposed scope of work is contractible, contains a statement 
of minimum qualifications from the technical office requesting the 
services, and is suitable for a personal services contract in that:
    (1) Performance of the proposed work requires or is best suited for 
an employer-employee relationship, and is thus not suited to the use of 
a non-personal services contract;
    (2) The scope of work does not require performance of any function 
normally reserved for direct-hire Federal employees (under paragraph 
4(b) of this Appendix); and
    (3) There is no apparent conflict of interest involved (if the 
Contracting Officer believes that a conflict of interest may exist, the 
question should be referred to the cognizant legal counsel);
    (d) Selection of the contractor is documented and justified (AIDAR 
706.302-70(b)(1) provides an exception to the requirement for full and 
open competition for Personal Services Contracts abroad; see paragraph 
5(c) of this Appendix);
    (e) The standard contract format prescribed for a Cooperating 
Country National and a Third Country National personal services contract 
(Sections 9, 10, 11, 12, and 13 of this Appendix as appropriate) is 
used, or that any necessary deviations are processed as required by 
AIDAR 701.470;
    (f) The contractor has submitted the names, addresses, and telephone 
numbers of at least two persons who may be notified in the event of an 
emergency (this information is to be retained in the contract file);
    (g) The contract is complete and correct and all information 
required on the contract Cover Page (USAID form 1420-36B) has been 
entered;
    (h) The contract has been signed by the Contracting Officer and the 
contractor, and fully executed copies are properly distributed;
    (i) The following clearances, approvals and forms have been 
obtained, properly completed, and placed in the contract file before the 
contract is signed by both parties:
    (1) Security clearance to the extent required by USAID Handbook 6, 
Security or other superseding Chapters of the Automated Directives 
System;
    (2) Mission, host country, and technical office clearance, as 
appropriate;
    (3) Medical clearance(s) based on a full medical examination(s) and 
statement of medical opinion by a licensed physician. The physician's 
medical opinion must be in the possession of the Contracting Officer 
prior to signature of contract. If a TCN is recruited, medical clearance 
requirements apply to the contractor and each dependent who is 
authorized to accompany the contractor;
    (4) The approval for any salary in excess of ES-6, in accordance 
with Appendix G of this chapter;
    (5) A copy of the class justification or other appropriate 
explanation and support required by AIDAR 706.302-70, if applicable;
    (6) Any deviation to the policy or procedures of this Appendix, 
processed and approved under AIDAR 701.470;
    (7) The memorandum of negotiation;
    (j) The position description is classified in accordance with the 
LEPCH, and the proposed salary is consistent with the local compensation 
plan or the alternate procedures established in 4(c)(2)(ii) above;
    (k) Funds for the contract are properly obligated to preclude 
violation of the Anti-Deficiency Act, 31 U.S.C. 134 (the Contracting 
Officer ensures that the contract has been properly recorded by the 
appropriate accounting office prior to its release for the signature of 
the selected contractor);
    (l) The contractor receives and understands USAID General Notice 
entitled ``Employee Review of the New Standards of Conduct'' dated 
October 30, 1992 and a copy is attached to each contract, as provided 
for in paragraph (c) of General Provision 2, Section 12;
    (m) Agency conflict of interest requirements, as set out in the 
above notice are also met by the contractor prior to his/her reporting 
for duty;
    (n) A copy of a Checklist for Personal Services Contractors which 
may be in the form set out above or another form convenient for the 
contracting officer, provided that a form containing all of the 
information described

[[Page 127]]

in this paragraph 7 shall be prepared for each PSC and placed in the 
contract file;
    (o) In consultation with the regional legal advisor and/or the 
regional contracting officer, the contract is modified by deleting from 
the General Provisions (Sections 12 and 13 of this Appendix) the 
inapplicable clause(s) by a listing in the Schedule; and
    (p) The block entitled, ``Acquisition and Assistance Request 
Document'' on the Cover Page of the contract format is completed by 
inserting the four-segment technical number as prescribed in USAID 
Handbook 18, the USAID Code Book Appendix D or superseding ADS Chapter 
if the PSC is project-funded.

                          8. Contracting Format

    The prescribed Contract Cover Page, Contract Schedules, General 
Provisions and FAR Clauses for personal service contracts for TCNs and 
CCNs covered by this Appendix are included as follows:
    9. ``Cover Page'' for a Contract with a Cooperating Country National 
or with a Third Country National for Personal Services.
    10. ``Schedule'' for a Contract with a Cooperating Country National 
or Third Country National Personal Services Contracts.
    11. ``Optional Schedule'' for a Contract with a Cooperating Country 
National or Third Country National Personal Services Contracts.
    [Use of the Optional Schedule is intended to serve as an alternate 
procedure for OE funded Foreign Service National PSCs. The schedule was 
developed for use when the Contracting Officer anticipates incremental 
recurring cost funded contracts. It should be noted that the Optional 
Schedule eliminates the need to amend the contract each time funds are 
obligated. However, the Contracting Officer is required to amend each 
contract not less than twice during a 12 month period to ensure that the 
contract record of obligations is up to date and agrees with the figures 
in the master funding document.]
    12. ``General Provisions'' for a Contract With a Cooperating Country 
National or With a Third Country National for Personal Services.
    13. FAR Clauses to be incorporated in full text as well as by 
reference in Personal Services Contracts.

9. ``Cover page'' for a Contract With a Cooperating Country National or 
          With a Third Country National for Personal Services.

    --AID Form 1420-36B (11/96)

[[Page 128]]

[GRAPHIC] [TIFF OMITTED] TR11AU97.005

 10. ``Schedule'' for a Contract With a Cooperating Country National or 
           Third Country National Personal Services Contracts

Contract No.------
Table of Contents
    The Schedule on pages ------ through ------ consists of this Table 
of Contents, the following Articles, and General Provisions:
Article I Statement of Duties

[[Page 129]]

Article II Period of Service
Article III Contractor's Compensation and Reimbursement
Article IV Costs Reimbursable and Logistic Support
Article V Precontract Expenses
Article VI Additional Clauses

General Provisions

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

1. Definitions
2. Compliance with Applicable Laws and Regulations
3. Physical Fitness
4. Security
5. Workweek
6 Leave and Holidays
7. Social Security and Cooperating Country Taxes
8. Insurance
9. Travel and Transportation
10. Payment
11. Contractor-Mission Relationships
12. Termination
13. Allowances
14. Advance of Dollar Funds
15. Conversion of U.S. Dollars to Local Currency
16. Post of assignment Privileges
17. Release of Information
18. Notices
19. Incentive Awards
20. Training
21. Medical Evacuation Services

    Schedule

    Note: Use of the following Schedule is not mandatory.

    The Schedule is intended to serve as a guideline and as a checklist 
for contracting offices in drafting contract schedules. Article language 
shall be changed to suit the needs of the particular contract. Special 
attention should be given to the financial planning sections where 
unnecessary line items should be eliminated.

                     Article I--Statement of Duties

    [The statement of duties shall include:
    A. General statement of the purpose of the contract.
    B. Statement of duties to be performed.
    C. Orientation or training to be provided by USAID.]

                      Article II--Period of Service

    Within ------ days after written notice from the Contracting Officer 
that all clearances, including the statement of medical opinion required 
under General Provision Clause 3, have been received, unless another 
date is specified by the contracting officer in writing, the contractor 
shall proceed to ------ and shall promptly commence performance of the 
duties specified above. The contractor's period of service shall be 
approximately ------ in ------. (Specify time of duties in each 
location.)

        Article III--Contractor's Compensation and Reimbursement

    A. Except as reimbursement may be specifically authorized by the 
Mission Director or contracting officer, USAID shall pay the contractor 
compensation after it has accrued and make reimbursements, if any are 
due, in currency of the post or for necessary and reasonable costs 
actually incurred in the performance of this contract within the 
categories listed in Paragraph D, below, and subject to the conditions 
and limitations applicable thereto as set out herein and in the attached 
General Provisions (GPs).
    B. The amount budgeted and available as personal compensation to the 
contractor is calculated to cover a calendar period of approximately --
---- (days) (weeks) (months) (years) (which is to include) (1) vacation 
and sick leave which may be earned during contractor's tour of duty (GP 
Clause No. 6), (2) ------ days for authorized travel (GP Clause 9), and 
(3) ------ days for orientation and consultation if required by the 
Statement of Duties.
    C. The contractor shall earn vacation leave at the rate of ------ 
days per year under the contract (provided the contract is in force for 
at least 90 days) and shall earn sick leave at the rate of ------ days 
per year under the contract.
    D. Allowable Costs.
    1. Compensation at the rate of LC ------ per (year) (month) (week) 
(day), equivalent to Grade FSN-------/------ in accordance with the 
Mission's Local Compensation Plan. If during the effective period of 
this contract the Local Compensation Plan is revised, contractor's 
compensation will be revised accordingly and contractor will be notified 
in writing by the contracting officer. Adjustments in compensation for 
periods when the contractor is not in compensable pay status shall be 
calculated as follows: Rate of LC ------ per (day) (hour).
    LC ------
    2. Overtime (Unless specifically authorized in the Schedule of this 
contract, no overtime hours shall be allowed hereunder.)
    3. Travel and Transportation (Ref. GP Clause 9). (Includes the value 
of TRs furnished by the Government, not payable to contractor).

a. United States--$------
b. International--$------
c. Cooperating and Third Country--$------, LC ------

    Subtotals Item 3--$------, LC ------

    4. Subsistence or Per Diem (Ref. GP Clause 9).

a. United States--$------

[[Page 130]]

b. International--$------
c. Cooperating and Third Country--$------, LC------
    Subtotals Item 4--$------, LC------

    5. Other Direct Costs

a. Physical Examination (Ref. GP Clause 3)--LC------
b. Miscellaneous--LC------
    Subtotal Item--LC------

    Total Estimated Costs (Lines 1 thru 5) $------ LC ------
    E. Maximum U.S. Dollar and Local Currency Obligation.
    In no event shall the maximum U.S. Dollar obligation under this 
contract exceed $------ nor shall the maximum local currency obligation 
exceed LC ------. Contractor shall keep a close account of all 
obligations incurred and accrued hereunder and promptly notify the 
contracting officer whenever it appears that the said maximum is not 
sufficient to cover all compensation and costs reimbursable which are 
anticipated under the contract.
    F. Under the Joint Incentive Awards Program for FSN monetary awards 
will be made pending availability of funds. The increase for the award 
will be effected by the execution of an SF-1126 which will be attached 
to the contract and will form a part of the contract. In no event may 
costs under the contract exceed the total amount obligated.
    Meritorious Step Increases for FSN PSCs may be authorized provided 
the granting of such increase is the general practice locally.

           Article IV--Costs Reimbursable And Logistic Support

    A. General.
    The contractor shall be provided with or reimbursed in local 
currency

(------) for the following: [Complete]

    B. Method of Payment of Local Currency Costs.
    Those contract costs which are specified as local currency costs in 
Paragraph A, above, if not furnished in kind by the cooperating 
government or the Mission, shall be paid to the contractor in a manner 
adapted to the local situation, based on vouchers submitted in 
accordance with GP Clause 10. The documentation for such costs shall be 
on such forms and in such manner as the Mission Director shall 
prescribe.
    C. Cooperating or U.S. Government Furnished Equipment and 
Facilities.
    [List any logistical support, equipment, and facilities to be 
provided by the cooperating government or the U.S. Government at no cost 
to this contract; e.g., office space, supplies, equipment, secretarial 
support, etc., and the conditions, if any, for use of such equipment.]

                     Article V--Precontract Expenses

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

                     Article VI--Additional Clauses

    [Additional Schedule Clauses may be added to meet specific 
requirements of an individual contract.]

11. Optional Schedule for a Contract With a Cooperating Country National 
          or Third Country National Personal Services Contracts

Contract No. ------
Table of Contents
(Optional Schedule)
    [Use of the Optional Schedule is not mandatory. It is intended to 
serve as an alternate procedure for OE funded Cooperating Country 
National and Third Country National PSCs. The schedule was developed for 
use when the Contracting Officer anticipates incremental recurring cost 
funded contracts.
    It should be noted that use of the Optional Schedule eliminates the 
need to amend the contract each time funds are obligated. However, 
Contracting Officer is required to amend each contract not less than 
twice during a 12 month period to ensure that the contract record of 
obligations is up to date and agrees with the figures in the master 
funding document.]
    The Schedule on pages ------ through ------ consists of this Table 
of Contents and the following Articles:

Article I Statement of Duties
Article II Period of Service
Article III Contractor's Compensation and Reimbursement
Article IV Costs Reimbursable and Logistic Support
Article V Precontract Expenses
Article VI Additional Clauses

General Provisions

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

1. Definitions
2. Compliance with Applicable Laws and Regulations
3. Physical Fitness
4. Security
5. Workweek
6. Leave and Holidays
7. Social Security and Cooperating Country Taxes
8. Insurance

[[Page 131]]

9. Travel and Transportation
10. Payment
11. Contractor-Mission Relationships
12. Termination
13. Allowances
14. Advance of Dollar Funds
15. Conversion of U.S. Dollars to Local Currency
16. Post of Assignment Privileges
17. Release of Information
18. Notices
19. Incentive Awards
20. Training
21. Medical Evacuation Services

                     Article I--Statement of Duties

    [The statement of duties shall include:
    A. General statement of the purpose of the contract.
    B. Statement of duties to be performed.
    C. Orientation or training to be provided by USAID.]

                      Article II--Period of Service

    Employment under this contract is of a continuing nature. Its 
duration is expected to be part of a series of sequential contracts; all 
contract provisions and clauses and regulatory requirements concerning 
availability of funds and the specific duration of this contract shall 
apply.
    Within 10 days after written notice from the Contracting Offices 
that all clearances have been received, unless another date is specified 
by the Contracting Officer in writing, the contractor shall proceed to 
(name place) and shall promptly commence performance of the duties 
specified in Article I of this contract. The contractor's period of 
service shall be approximately (specify duration from date to date).

        Article III--Contractor's Compensation and Reimbursement

    A. Except as reimbursement may be specifically authorized by the 
Mission Director or Contracting Officer, USAID shall pay the contractor 
compensation after it has accrued and make reimbursements, if any are 
due in currency of the cooperating country (LC) in accordance with the 
prevailing practice of the post or for necessary and reasonable costs 
actually incurred in the performance of this contract within the 
categories listed in paragraph E, below, and subject to the conditions 
and limitations applicable thereto as set out herein and in the attached 
General Provisions (GPs).
    B. The amount budgeted and available as personal compensation to the 
contractor is calculated to cover a calendar period of approximately --
---- (days) (weeks) (months) (years) (which is to include) (1) vacation 
and sick leave which may be earned during the contractor's tour of duty 
(GP Clause No. 6), (2) ------ days for authorized travel (GP Clause 9), 
and (3) ------ days for orientation and consultation if required by the 
Statement of Duties.
    C. The contractor shall earn vacation leave at the rate of ------ 
days per year under the contract (provided the contract is in force for 
at least 90 days) and shall earn sick leave at the rate of ------ days 
per year under the contract.
    D. All employee rights and benefits from the previous contract or 
employment, i.e., accumulated annual and sick leave balances, original 
service computation dates, reserve fund contributions, accumulated 
compensatory time, social security contributions, seniority and 
longevity bonuses are considered allowable costs and as a continuation 
as long as the break in service does not exceed three days.
    E. Allowable Costs.
    1. The following illustrative budget details allowable costs under 
this contract and provides estimated incremental recurrent cost funding 
in the total amount shown. Additional funds for the full term of this 
contract will be provided by the preparation of a master PSC funding 
document issued by the Mission Controller for the purpose of providing 
additional funding for a specific period. The master PSC funding 
document will be attached to this contract and will form a part of the 
executed contract while also serving to amend the budget.
    2. Overtime (Unless specifically authorized in the Schedule of this 
contract, no overtime hours shall be allowed hereunder.)
    LC------
    3. Travel and Transportation (Ref. GP Clause 9). (Includes the value 
of TRs furnished by the Government, not payable to contractor).

a. United States--$------
b. International--$------
c. Cooperating and Third Country--$------, LC ------
    Subtotals Item 3--$------, LC ------

    4. Subsistence or Per Diem (Ref. GP Clause 9.)

a. United States--$------
b. International--$------
c. Cooperating and Third Country--$------, LC ------
    Subtotals Item 4--$------, LC ------

    5. Other Direct Costs.

a. Physical Examination (Ref. GP Clause 3)--$------, LC ------
b. Miscellaneous--$------, LC ------
    Subtotals Item 5--$------, LC ------

Total Estimated Costs (Lines 1 thru 5) $------, LC ------

    F. Allowable costs compensation and all terms and benefits of 
employment under this contract will be in accordance with the Mission's 
local compensation plan. Salary

[[Page 132]]

changes and personnel-related contract actions will be made by 
processing the same forms as used in making such changes and actions for 
direct-hire FSN employees. When issued by the Contracting Officer, the 
forms utilized will be attached to the contract and will form a part of 
the contract terms and conditions.
    Any adjustment or increase in the compensation granted to direct-
hire employees under the local compensation plan will be allowed for in 
PSCs subject to the availability of funds. Such an adjustment will be 
effected by a mass pay adjustment notice from the Contracting Officer, 
which will be attached to the contract and form a part of the executed 
contract.
    At the end of each year of satisfactory service, PSC contractors 
will be eligible to receive an increase equal to one annual step 
increase as shown in the local compensation plan, pending availability 
for funds. Such increase will be effected by the execution of an SF-
1126, Payroll Change Slip which is to be attached to each contract and 
each action forms a part of the official contract file.
    Under the Joint Inventive Awards Program for FSNs, monetary awards 
will be made pending availability of funds. The increase for the award 
will be effected by the execution of an SF-1126 which will be attached 
to the contract and will form a part of the contract. In no event may 
costs under the contract exceed the total amount obligated.
    Meritorious Step Increases for FSN PSCs may be authorized provided 
the granting of such increase is the general practice locally.
    The master PSC funding document may not exceed the term or estimated 
total cost of this contract. Notwithstanding that additional funds are 
obligated under this contract through the issuance and attachment of the 
master PSC funding document, all other contract terms and conditions 
remain in full effect.

           Article IV--Costs Reimbursable and Logistic Support

    A. General.
    The contractor shall be provided with or reimbursed in local 
currency

------ for the following: [Complete]

    B. Method of Payment of Local Currency Costs.
    Those contract costs which are specified as local currency costs in 
Paragraph A, above, if not furnished in kind by the cooperating 
government or the Mission, shall be paid to the contractor in a manner 
adapted to the local situation, based on vouchers submitted in 
accordance with GP Clause 10. The documentation for such costs shall be 
on such forms and in such manner as the Mission Director shall 
prescribe.
    C. Cooperating or U.S. Government Furnished Equipment and 
Facilities.
    [List any logistical support, equipment, and facilities to be 
provided by the cooperating government or the U.S. Government at no cost 
to this contract; e.g., office space, supplies, equipment, secretarial 
support, etc., and the conditions, if any, for use of such equipment.]

                     Article V--Precontract Expenses

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

                     Article VI--Additional Clauses

    [Additional Schedule Clauses may be added to meet specific 
requirements of an individual contract.]

    12. General Provisions for a Contract With a Cooperating Country 
     National or With a Third Country National for Personal Services

    To be used to contract with cooperating country nationals or third 
country nationals for personal services.

Index of Clauses
1. Definitions
2. Compliance with Applicable Laws and Regulations
3. Physical Fitness
4. Security
5. Workweek
6. Leave and Holidays
7. Social Security and Cooperating Country Taxes
8. Insurance
9. Travel and Transportation
10. Payment
11. Contractor-Mission Relationships
12. Termination
13. Allowances
14. Advance of Dollar Funds
15. Conversion of U.S. Dollars to Local Currency
16. Post of Assignment Privileges
17. Release of Information
18. Notices
19. Incentive Awards
20. Training
21. Medical Evacuation Services

1. Definitions (JUL 1993)
    [For use in both Cooperating Country National (CCN) and Third 
Country National (TCN) Contracts].
    (a) USAID shall mean the U.S. Agency for International Development.
    (b) Administrator shall mean the Administrator or the Deputy 
Administrator of the U.S. Agency for International Development.

[[Page 133]]

    (c) Contracting Officer shall mean a person with the authority to 
enter into, administer, and/or terminate contracts and make related 
determinations and findings. The term includes certain authorized 
representatives of the Contracting Officer acting within the limits of 
their authority as delegated by the Contracting Officer.
    (d) Cooperating Country National shall mean the individual engaged 
to serve in the Cooperating Country under this contract.
    (e) Cooperating Country shall mean the foreign country in or for 
which services are to be rendered hereunder.
    (f) Cooperating Government shall mean the government of the 
Cooperating Country.
    (g) Government shall mean the United States Government.
    (h) Economy Class air travel shall mean a class of air travel which 
is less than business or first class.
    (i) Local Currency shall mean the currency of the cooperating 
country.
    (j) Mission shall mean the United States USAID Mission to, or 
principal USAID office in, the Cooperating Country.
    (k) Mission Director shall mean the principal officer in the Mission 
in the Cooperating Country, or his/her designated representative.
    (l) Third Country National shall mean an individual (i) who is 
neither a citizen of the United States nor of the country to which 
assigned for duty, and (ii) who is eligible for return travel to the 
TCN's home country or country from which recruited at U.S. Government 
expenses, and (iii) who is on a limited assignment for a specific period 
of time.
    (m) Tour of Duty shall mean the contractor's period of service under 
this contract and shall include, authorized leave and international 
travel.
    (n) Traveler shall mean the contractor or dependents of the 
contractor who are in authorized travel status.
    (o) Dependents shall mean spouse and children (including step and 
adopted children who are unmarried and under 21 years of age or, 
regardless of age, are incapable of self-support.

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

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

    3. Physical Fitness (JUL 1993)

    [For use in both CCN and TCN Contracts].
    (a) Cooperating Country National. The contractor shall be examined 
by a licensed doctor of medicine, and shall obtain a statement of 
medical opinion that, in the doctor's opinion, the contractor is 
physically qualified to engage in the type of activity for which he/she 
is to be employed under the contract. A copy of the medical opinion 
shall be provided to the Contracting Officer before the contractor 
starts work under the contract. The contractor shall be reimbursed for 
the cost of the physical examination based on the rates prevailing 
locally for such examinations in accordance with Mission practice.
    (b) Third Country National. (i) The contractor shall obtain a 
physical examination for himself/herself and any authorized dependents 
by a licensed doctor of medicine. The contractor shall obtain a 
statement of medical opinion from the doctor that, in the doctor's 
opinion, the contractor is physically qualified to engage in the type of 
activity for which he/she is to be employed under the contract, and the 
contractor's authorized dependents are physically qualified to reside in 
the cooperating country. A copy of that medical opinion shall be 
provided to the Contracting Officer prior to the dependents' departure 
for the cooperating country.
    (ii) The contractor shall be reimbursed for the cost of the physical 
examinations mentioned above as follows: (1) based on those rates 
prevailing locally for such examinations in accordance with Mission 
practice or (2) if not done locally, not to exceed $100 per examination 
for the contractor's dependents of 12 years of age and over and not to 
exceed $40 per examination for contractor's dependents under 12 years of 
age. The contractor shall also be reimbursed for the cost of all 
immunizations normally authorized and extended to FSN employees.

4. Security (JUL 1993)

    [For use in both CCN and TCN Contracts].
    (a) The contractor is obligated to notify immediately the 
Contracting Officer if the contractor is arrested or charged with any 
offense during the term of this contract.

[[Page 134]]

    (b) The contractor shall not normally have access to classified or 
administratively controlled information and shall take conscious steps 
to avoid receiving or learning of such information. However, based on 
contractor's need to know, Mission may authorize access to 
administratively controlled information for performance of assigned 
scope of work on a case-by-case basis in accordance with USAID Handbook 
6 or superseding ADS Chapters.
    (c) The contractor agrees to submit immediately to the Mission 
Director or Contracting Officer a complete detailed report, marked 
``Privileged Information'', of any information which the contractor may 
have concerning existing or threatened espionage, sabotage, or 
subversive activity against the United States of America or the USAID 
Mission or the cooperating country government.

5. Workweek (OCT 1987)

    [For use in both CCN and TCN Contracts].
    The contractor's workweek shall not be less than 40 hours, unless 
otherwise provided in the Schedule, and shall coincide with the workweek 
for those employees of the Mission or the cooperating country agency 
must closely associated with the work of this contract. If approved in 
advance in writing, overtime worked by the contractor shall be paid in 
accordance with the procedures governing premium compensation applicable 
to direct-hire foreign service national employees. If the contract is 
for less than full time (40 hours weekly), the leave earned shall be 
prorated.

6. Leave and Holidays (OCT 1987)

    [For use in both CCN and TCN Contracts].
    (a) Vacation Leave. The contractor may accrue, accumulate, use and 
be paid for vacation leave in the same manner as such leave is accrued, 
accumulated, used and paid to foreign service national direct-hire 
employees of the Mission. No vacation leave shall be earned if the 
contract is for less than 90 days. Unused vacation leave may be carried 
over under an extension or renewal of the contract as long as it 
conforms to Mission policy and practice. With the approval of the 
Mission Director, and if the circumstances warrant, a contractor may be 
granted advance vacation leave in excess of that earned, but in no case 
shall a contractor be granted advance vacation leave in excess of that 
which he/she will earn over the life of the contract. The contractor 
agrees to reimburse USAID for leave used in excess of the amount earned 
during the contractor's assignment under the contract.
    (b) Sick Leave. The contractor may accrue, accumulate, and use sick 
leave in the same manner as such leave is accrued, accumulated and used 
by foreign service national direct-hire employees of the Mission. Unused 
sick leave may be carried over under an extension of the contract. The 
contractor will not be paid for sick leave earned but unused at the 
completion of this contract.
    (c) Leave Without Pay.  Leave without pay may be granted only with 
the written approval of the Contracting Officer or Mission Director.
    (d) Holidays. The contractor shall be entitled to all holidays 
granted by the Mission to direct-hire cooperating country national 
employees who are on comparable assignments.

7. Social Security and Cooperating Country Taxes (DEC 1986)

    [For use in both CCN and TCN Contracts].
    Funds for Social Security, retirement, pension, vacation or other 
cooperating country programs as required by local law shall be deducted 
and withheld in accordance with laws and regulations and rulings of the 
cooperating country or any agreement concerning such withholding entered 
into between the cooperating government and the United States 
Government.

8. Insurance (JUL 1993)

    [For use in both CCN and TCN Contracts].
    (a) Worker's Compensation Benefits.  The contractor shall be 
provided worker's compensation benefits under the Federal Employees 
Compensation Act.
    (b) Health and Life Insurance. The contractor shall be provided 
personal health and life insurance benefits on the same basis as they 
are granted to direct-hire CCNs and TCN employees at the post under the 
Post Compensation Plan.
    (c) Insurance on Private Automobiles--Contractor Responsibility [For 
use in TCN contracts]. If the contractor or dependents transport, or 
cause to be transported, any privately owned automobile(s) to the 
cooperating country, or any of them purchase an automobile within the 
cooperating country, the contractor agrees to ensure that all such 
automobile(s) during such ownership within the cooperating country will 
be covered by a paid-up insurance policy issued by a reliable company 
providing the following minimum coverages, or such other minimum 
coverages as may be set by the Mission Director, payable in U.S. dollars 
or its equivalent in the currency of the cooperating country: injury to 
persons, $10,000/$20,000; property damage, $5,000. The contractor 
further agrees to deliver, or cause to be delivered to the Mission 
Director, copies of the insurance policies required by this clause or 
satisfactory proof of the existence thereof, before such automobile(s) 
is operated within the cooperating country. The premium costs for such 
insurance shall not be a reimbursable cost under this contract.
    (d) Claims for Private Personal Property Losses [For use in TCN 
contracts]. The contractor shall be reimbursed for private personal 
property losses in accordance with USAID Handbook 23, ``Overseas 
Support'', Chapter 10, or superseding ADS Chapter.


[[Page 135]]


9. Travel and Transportation Expenses (JUL 1993)

    [For use in both CCN and TCN Contracts as appropriate].
    (a) General. The contractor will be reimbursed in currency 
consistent with the prevailing practice at post and at the rates 
established by the Mission Director for authorized travel in the 
cooperating country in connection with duties directly referable to work 
under this contract. In the absence of such established rates, the 
contractor shall be reimbursed for actual costs of authorized travel in 
the cooperating country if not provided by the cooperating government or 
the Mission in connection with duties directly referable to work 
hereunder, including travel allowances at rates prescribed by USAID 
Handbook 22, ``Foreign Service Travel Regulations'' or superseding ADS 
Chapters as from time to time amended. The Executive or Administrative 
Officer at the Mission may furnish Transportation Requests (TR's) for 
transportation authorized by this contract which is payable in local 
currency or is to originate outside the United States. When 
transportation is not provided by Government issued TR, the contractor 
shall procure the transportation, and the costs will be reimbursed. The 
following paragraphs provide specific guidance and limitations on 
particular items of cost.
    (b) International Travel. For travel to and from post of assignment 
the TCN contractor shall be reimbursed for travel costs and travel 
allowances from place of residence in the country of recruitment (or 
other location provided that the cost of such travel does not exceed the 
cost of the travel from the place of residence) to the post of duty in 
the cooperating country and return to place of residence in the country 
of recruitment (or other location provided that the cost of such travel 
does not exceed the cost of travel from the post of duty in the 
cooperating country to the contractor's residence) upon completion of 
services by the individual. Reimbursement for travel will be in 
accordance with USAID's established policies and procedures for its CCN 
and TCN direct-hire employees and the provisions of this contract, and 
will be limited to the cost of travel by the most direct and expeditious 
route. If the contract is for longer than one year and the contractor 
does not complete one full year at post of duty (except for reasons 
beyond his/her control), the cost of going to and from the post of duty 
for the contractor and his/her dependents are not reimbursable 
hereunder. If the contractor serves more than one year but less than the 
required service in the cooperating country (except for reasons beyond 
his/her control) costs of going to the post of duty are reimbursable 
hereunder but the cost of going from post of duty to the contractor's 
permanent, legal place of residence at the time he or she was employed 
for work under this contract are not reimbursable under this contract 
for the contractor and his/her dependents. When travel is by economy 
class accommodations, the contractor will be reimbursed for the cost of 
transporting up to 10 kilograms/22 pounds of accompanied personal 
baggage per traveler in addition to that regularly allowed with the 
economy ticket provided that the total number of pounds of baggage does 
not exceed that regularly allowed for first class travelers. Travel 
allowances for travelers shall not be in excess of the rates authorized 
in the Standardized Regulations (Government Civilians, Foreign Areas) 
hereinafter referred to as the Standardized Regulations--as from time to 
time amended, for not more than the travel time required by scheduled 
commercial air carrier using the most expeditious route. One stopover 
enroute for a period of not to exceed 24 hours is allowable when the 
traveler uses economy class accommodations for a trip of 14 hours or 
more of scheduled duration. Such stopover shall not be authorized when 
travel is by indirect route or is delayed for the convenience of the 
traveler. Per diem during such stopover shall be paid in accordance with 
the Federal Travel Regulations as from time to time amended.
    (c) Local Travel. Reimbursement for local travel in connection with 
duties directly referable to the contract shall not be in excess of the 
rates established by the Mission Director for the travel costs of 
travelers in the Cooperating Country. In the absence of such established 
rates the contractor shall be reimbursed for actual travel costs in the 
Cooperating Country by the Mission, including travel allowances at rates 
not in excess of those prescribed by the Standardized Regulations.
    (d) Indirect Travel for Personal Convenience of a TCN. When travel 
is performed by an indirect route for the personal convenience of the 
traveler, the allowable costs of such travel will be computed on the 
basis of the cost of allowable air fare via the direct usually traveled 
route. If such costs include fares for air or ocean travel by foreign 
flag carriers, approval for indirect travel by such foreign flag 
carriers must be obtained from the Contracting Officer or the Mission 
Director before such travel is undertaken, otherwise only that portion 
of travel accomplished by the United States-flag carriers will be 
reimbursable within the above limitation of allowable costs.
    (e) Limitation on Travel by TCN Dependents. Travel costs and 
allowances will be allowed for authorized dependents of the contractor 
and such costs shall be reimbursed for travel from place of abode in the 
country of recruitment to the assigned station in the Cooperating 
Country and return, only if the dependent remains in the Cooperating 
Country for

[[Page 136]]

at least 9 months or one-half of the required tour of duty of the 
contract, whichever is greater, except as otherwise authorized hereunder 
for education, medical, or emergency visitation travel. Dependents of 
the TCN contractor must return to the country of recruitment or home 
country within thirty days of the termination or completion of the 
contractor's employment, otherwise such travel will not be reimbursed 
under this contract.
    (f) Delays Enroute. The contractor may be granted reasonable delays 
enroute while in travel status when such delays are caused by events 
beyond the control of the contractor and are not due to circuitous 
routing. It is understood that if delay is caused by physical 
incapacitation, he/she shall be eligible for such sick leave as provided 
under the ``Leave and Holidays'' clause of this contract.
    (g) Travel by Privately Owned Automobile (POV). If travel by POV is 
authorized in the contract schedule or approved by the Contracting 
Officer, the contractor shall be reimbursed for the cost of travel 
performed in his/her POV at a rate not to exceed that authorized in the 
Federal Travel Regulations plus authorized per diem for the employee 
and, if the POV is being driven to or from the cooperating country as 
authorized under the contract, for each of the authorized dependents 
traveling in the POV, provided that the total cost of the mileage and 
per diem paid to all authorized travelers shall not exceed the total 
constructive cost of fare and normal per diem by all authorized 
travelers by surface common carrier or authorized air fare, whichever is 
less.
    (h) Emergency and Irregular Travel and Transportation. [For TCNs 
only]. Emergency transportation costs and travel allowances while 
enroute, as provided in this section, will be reimbursed not to exceed 
amounts authorized by the Foreign Service Travel Regulations for FSN 
direct-hire employees in like circumstances under the following 
conditions:
    (1) The costs of going from post of duty in the cooperating country 
to another approved location for the contractor and authorized 
dependents and returning to post of duty, subject to the prior written 
approval of the Mission Director, when such travel is necessary for one 
of the following reasons:
    (i) Need for medical care beyond that available within the area to 
which contractor is assigned.
    (ii) Serious effect on physical or mental health if residence is 
continued at assigned post of duty.
    (iii) Serious illness, injury, or death of a member of the 
contractor's immediate family or a dependent, including preparation and 
return of the remains of a deceased contractor or his/her dependents.
    (2) Emergency evacuation when ordered by the principal U.S. 
Diplomatic Officer in the cooperating country. Transportation and travel 
allowances at safe haven and the transportation of household effects and 
automobile or storage thereof when authorized by the Mission Director, 
shall be payable in accordance with established Government regulations.
    (3) The Mission Director may also authorize emergency or irregular 
travel and transportation in other situations when in his/her opinion 
the circumstances warrant such action. The authorization shall include 
the kind of leave to be used and appropriate restrictions as to time 
away from post, transportation of personal and household effects, etc.
    (i) Country of Recruitment Travel and Transportation. [For TCNs 
only]. The contractor shall be reimbursed for actual transportation 
costs and travel allowances in the country of recruitment as authorized 
in the Schedule or approved in advance by the Contracting Officer or the 
Mission Director. Transportation costs and travel allowances shall not 
be reimbursed in any amount greater than the cost of, and time required 
for, economy-class commercial-scheduled air travel by the most 
expeditious route except as otherwise provided in paragraph (h) above, 
unless economy air travel is not available and the contractor adequately 
documents this to the satisfaction of the Contracting Officer in 
documents submitted with the voucher.
    (j) Rest and Recuperation Travel. [For TCNs only].
    If approved in writing by the Mission Director, the contractor and 
his/her dependents shall be allowed rest and recuperation travel on the 
same basis as direct-hire TCN employees and their dependents at the post 
under the local compensation plan.
    (k) Transportation of Personal Effects (Excluding Automobiles and 
Household Goods). [For TCNs only].
    (1) General. Transportation costs will be paid on the same basis as 
for direct-hire employees at post serving the same length tour of duty, 
as authorized in the schedule. Transportation, including packing and 
crating costs, will be paid for shipping from contractor's residence in 
the country of recruitment or other location, as approved by the 
Contracting Officer (provided that the cost of transportation does not 
exceed the cost from the contractor's residence) to post of duty in the 
cooperating country and return to the country of recruitment or other 
location provided the cost of transportation of the personal effects of 
the contractor not to exceed the limitations in effect for such 
shipments for USAID direct-hire employees in accordance with the Foreign 
Service Travel Regulations in effect at the time shipment is made. These 
limitations may be obtained from the Contracting Officer. The cost of

[[Page 137]]

transporting household goods shall not exceed the cost of packing, 
crating, and transportation by surface common carrier.
    (2) Unaccompanied Baggage. Unaccompanied baggage is considered to be 
those personal belongings needed by the traveler immediately upon 
arrival of the contractor and dependents. To permit the arrival of 
effects to coincide with the arrival of the contractor and dependents, 
consideration should be given to advance shipments of unaccompanied 
baggage. The contractor will be reimbursed for costs of shipment of 
unaccompanied baggage (in addition to the weight allowance for household 
effects) not to exceed the limitations in effect for USAID direct-hire 
employees in accordance with the Foreign Service Travel Regulations in 
effect when shipment is made. These limitations are available from the 
Contracting Officer. This unaccompanied baggage may be shipped as air 
freight by the most direct route between authorized points of origin and 
destination regardless of the modes of travel used.
    (l) Reduced Rates on U.S.-Flag Carriers. Reduced rates on U.S.-flag 
carriers are in effect for shipments of household goods and personal 
effects of USAID contractors between certain locations. These reduced 
rates are available provided the shipper furnishes to the carrier at the 
time of the issuance of the Bill of Lading documentary evidence that the 
shipment is for the account of USAID. The Contracting Officer will, on 
request, furnish to the contractor current information concerning the 
availability of a reduced rate with respect to any proposed shipment. 
The contractor will not be reimbursed for shipments of household goods 
or personal effects in amounts in excess of the reduced rates which are 
available in accordance with the foregoing.
    (m) Transportation of things. [For TCNs Only]. Where U.S. flag 
vessels are not available, or their use would result in a significant 
delay, the contractor may obtain a release from the requirement to use 
U.S. flag vessels from the Transportation Division, Office of 
Acquisition and Assistance, U.S. Agency for International Development, 
Washington, DC 20523-1419, or the Mission Director, as appropriate, 
giving the basis for the request.
    (n) Repatriation Travel. [For TCNs Only]. Notwithstanding other 
provisions of this Clause 9, a TCN must return to the country of 
recruitment or to the TCN's home country within 30 days after 
termination or completion of employment or forfeit all right to 
reimbursement for repatriation travel. The return travel obligation 
[repatriation travel] assumed by the U.S. Government may have been the 
obligation of another employer in the area of assignment if the employee 
has been in substantially continuous employment which provided for the 
TCN's return to home country or country from which recruited.
    (o) Storage of household effects. [For TCNs Only]. The cost of 
storage charges (including packing, crating, and drayage costs) in the 
country of recruitment of household goods of regular employees will be 
permitted in lieu of transportation of all or any part of such goods to 
the Cooperating Country under paragraph (k) above provided that the 
total amount of effects shipped to the Cooperating Country or stored in 
the country of recruitment shall not exceed the amount authorized for 
USAID direct-hire employees under the Foreign Service Travel 
Regulations. These amounts are available from the Contracting Officer.

10. Payment (MAY 1997)

    [For use in both CCN and TCN Contracts].
    (a) Payment of compensation shall be based on written documentation 
supporting time and attendance which may be (1) maintained by the 
Mission in the same way as for direct-hire CCNs and TCNs or (2) the 
contractor may submit such written documentation in a form acceptable to 
Mission policy and practice as required for other personal services 
contractors and as directed by the Mission Controller or paying office. 
The documentation will also provide information required to be filed 
under cooperating country laws to permit withholding by USAID of funds, 
if required, as described in the clause of these General Provisions 
entitled Social Security and Cooperating Country Taxes.
    (b) Any other payments due under this contract shall be as 
prescribed by Mission policy for the type of payment being made.

11. Contractor-Mission Relationships (DEC 1986)

    [For use in both CCN and TCN Contracts].
    (a) The contractor acknowledges that this contract is an important 
part of the U.S. Foreign Assistance Program and agrees that his/her 
duties will be carried out in such a manner as to be fully commensurate 
with the responsibilities which this entails. Favorable relations 
between the Mission and the Cooperating Government as well as with the 
people of the cooperating country require that the contractor shall show 
respect for the conventions, customs, and institutions of the 
cooperating country and not become involved in any illegal political 
activities.
    (b) If the contractor's conduct is not in accordance with paragraph 
(a), the contract may be terminated pursuant to the General Provision of 
this contract, entitled ``Termination.'' If a TCN, the contractor 
recognizes the right of the U.S. Ambassador to direct his/her immediate 
removal from any country when, in the discretion of the Ambassador, the 
interests of the United States so require.
    (c) The Mission Director is the chief representative of USAID in the 
cooperating

[[Page 138]]

country. In this capacity, he/she is responsible for the total USAID 
Program in the cooperating country including certain administrative 
responsibilities set forth in this contract and for advising USAID 
regarding the performance of the work under the contract and its effect 
on the U.S. Foreign Assistance Program. The contractor will be 
responsible for performing his/her duties in accordance with the 
statement of duties called for by the contract. However, he/she shall be 
under the general policy guidance of the Mission Director and shall keep 
the Mission Director or his/her designated representative currently 
informed of the progress of the work under this contract.

12. Termination (NOV 1989)

    [For use in both CCN and TCN Contracts].
    (This is an approved deviation to be used in place of the clause 
specified in FAR 52.249-12.)
    (a) The Government may terminate performance of work under this 
contract in whole or, from time to time, in part:
    (1) For cause, which may be effected immediately after establishing 
the facts warranting the termination, by giving written notice and a 
statement of reasons to the contractor in the event (i) the contractor 
commits a breach or violation of any obligations herein contained, (ii) 
a fraud was committed in obtaining this contract, or (iii) the 
contractor is guilty (as determined by USAID) of misconduct in the 
cooperating country. Upon such a termination, the contractor's right to 
compensation shall cease when the period specified in such notice 
expires or the last day on which the contractor performs services 
hereunder, whichever is earlier. No costs of any kind incurred by the 
contractor after the date such notice is delivered shall be reimbursed 
hereunder except the cost of return transportation (not including travel 
allowances), if approved by the Contracting Officer. If any costs 
relating to the period subsequent to such date have been paid by USAID, 
the contractor shall promptly refund to USAID any such prepayment as 
directed by the Contracting Officer.
    (2) For the convenience of USAID, by giving not less than 15 
calender days advance written notice to the contractor. Upon such a 
termination, contractor's right to compensation shall cease when the 
period specified in such notice expires except that the contractor shall 
be entitled to any accrued, unused vacation leave, return transportation 
costs and travel allowances and transportation of unaccompanied baggage 
costs at the rates specified in the contract and subject to the 
limitations which apply to authorized travel status.
    (3) For the convenience of USAID, when the contractor is unable to 
complete performance of his/her services under the contract by reason of 
sickness or physical or emotional incapacity based upon a certification 
of such circumstances by a duly qualified doctor of medicine approved by 
the Mission. The contract shall be deemed terminated upon delivery to 
the contractor of a termination notice. Upon such a termination, the 
contractor shall not be entitled to compensation except to the extent of 
any accrued, unused vacation leave, but shall be entitled to return 
transportation, travel allowances, and unaccompanied baggage costs at 
rates specified in the contract and subject to the limitations which 
apply to authorized travel status.
    (b) The contractor, with the written consent of the Contracting 
Officer, may terminate this contract upon at least 15 days' written 
notice to the Contracting Officer.

13. Allowances (DEC 1986)

    [For TCNs only].
    Allowances will be granted to the contractor and authorized 
dependents on the same basis as to direct-hire TCN employees at the post 
under the Post Compensation Plan. The allowances provided shall be paid 
to the contractor in the currency of the cooperating country or in 
accordance with the practice prevailing at the Mission.

14. Advance of Dollar Funds (DEC 1986)

    [For TCNs only].
    If requested by the contractor and authorized in writing by the 
Contracting Officer, USAID will arrange for an advance of funds to 
defray the initial cost of travel, travel allowances, authorized 
precontract expenses, and shipment of personal property. The advance 
shall be granted on the same basis as to an USAID U.S.-citizen direct-
hire employee in accordance with USAID Handbook 22, Chapter 4 or 
superseding ADS Chapters.

15. Conversion of U.S. Dollars to Local Currency (DEC 1986)

    [For TCNs only].
    Upon arrival in the cooperating country, and from time to time as 
appropriate, the contractor shall consult with the Mission Director or 
his/her authorized representative who shall provide, in writing, the 
policy the contractor shall follow in the conversion of one currency to 
another currency. This may include, but not be limited to, the 
conversion of said currency through the cognizant U.S. Disbursing 
Officer, or Mission Controller, as appropriate.

16. Post of Assignment Privileges (DEC 1986)

    [For TCNs only].
    Privileges such as the use of APO, PX's, commissaries and officer's 
clubs are established at posts abroad pursuant to agreements between the 
U.S. and host governments. These facilities are intended for and usually 
limited to U.S. citizen members of the official U.S. Mission including 
the Embassy, USAID, Peace Corps, U.S. Information Services and the 
Military. Normally, the

[[Page 139]]

agreements do not permit these facilities to be made available to non-
U.S. citizens if they are under contract to the United States 
Government. However, in those cases where the facilities are open to TCN 
contractor personnel, they may be used.

17. Release Of Information (DEC 1986)

    [For use in both CNN and TCN Contracts].
    All rights in data and reports shall become the property of the U.S. 
Government. All information gathered under this contract by the 
contractor and all reports and recommendations hereunder shall be 
treated as privileged information by the contractor and shall not, 
without the prior written approval of the Contracting Officer, be made 
available to any person, party, or government, other than USAID, except 
as otherwise expressly provided in this contract.

18. Notices (DEC 1986)

    [For use in both CNN and TCN Contracts].
    Any notice, given by any of the parties hereunder, shall be 
sufficient only if in writing and delivered in person or sent by 
telegraph, telegram, registered, or regular mail as follows:
    (a) TO USAID: To the Mission Director of the Mission in the 
Cooperating Country with a copy to the appropriate Contracting Officer.
    (b) TO THE CONTRACTOR: At his/her post of duty while in the 
Cooperating Country and at the contractor's address shown on the Cover 
Page of this contract or to such other address as either of such parties 
shall designate by notice given as herein required.
    Notices hereunder shall be effective when delivered in accordance 
with this clause or on the effective date of the notice, whichever is 
later.

19. Incentive Awards (DEC 1996)

    [For CNN and TCN Contracts].
    (a) All Cooperating Country National (CCN) Personal Services 
Contractors (PSCs) and Third Country Nationals (TCNs) of the Foreign 
Affairs Community are eligible for the Joint Embassy Incentive Awards 
Program. The program is administered by each post's (Embassy) Joint 
Country Awards Committee.
    (b) Meritorious Step Increases
    Meritorious step increases may be granted to CNNs and TCNs paid 
under the local compensation plan provided the granting of such 
increases is the general practice locally.

20. Training (JUL 1993)

    [For CNN and TCN Contracts].
    The contractor may be provided job related training to develop 
growth potential, expand capabilities and increase knowledge and skills. 
The training may be funded under the personal services contract.

21. Medical Evacuation (MEDEVAC) Services (JUL 2007)

    [For TCN Contracts Only].
    (a) The PSC must obtain MEDEVAC service coverage including coverage 
for authorized dependents while performing personal services abroad.
    (b) Exceptions. (1) A PSC and authorized dependents with a health 
insurance program that includes sufficient MEDEVAC coverage as approved 
by the Contracting Officer are not required to obtain MEDEVAC service 
coverage.
    (2) The Mission Director at the post of assignment may make a 
written determination to waive the requirement for such coverage. The 
determination must be based on findings that the quality of local 
medical services or other circumstances obviate the need for such 
coverage for PSCs and their dependents located at post.

                             13. FAR Clauses

    The following FAR Clauses are always to be used along with the 
General Provisions. They are required in full text.

1. Covenant Against Contingent Fees 52.203-5
2. Disputes 52.233-1 (Alternate 1)
3. Preference for U.S. Flag Air Carriers 52.247-63
    The following FAR Clauses are to be used along with the General 
Provisions, and when appropriate, be incorporated in each personal 
services contract by reference:

1. Anti-Kickback Procedures 52.203-7
2. Limitation on Payments to Influence Certain Federal Transactions 
52.203-12
3. Audit and Records--Negotiation 52.215-2
4. Privacy Act Notification 552.224-1
5. Privacy Act 52.224-2
6. Taxes--Foreign Cost Reimbursement Contracts 52.229-8
7. Interest 52.232-17
8. Limitation of Cost 52.232-20
9. Limitation of Funds 52.232-22
10. Assignment of Claims 52.232-23
11. Protection of Government Buildings, Equipment, and Vegetation 
52.237-2
12. Notice of Intent to Disallow Costs 52.242-1
13. Inspection 52.246-5
14. Limitation of Liability--Services 52.246-25

[62 FR 42929, Aug. 11, 1997, as amended at 72 FR 19670, Apr. 19, 2007]

[[Page 141]]



                CHAPTER 8--DEPARTMENT OF VETERANS AFFAIRS




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

                          SUBCHAPTER A--GENERAL
Part                                                                Page
801             Department of Veterans Affairs Acquisition 
                    Regulation System.......................         143
802             Definitions of words and terms..............         164
803             Improper business practices and personal 
                    conflicts of interest...................         165
804             Administrative matters......................         169
           SUBCHAPTER B--COMPETITION AND ACQUISITION PLANNING
805             Publicizing contract actions................         170
806             Competition requirements....................         170
807             Acquisition planning........................         172
808             Required sources of supplies and services...         173
809             Contractor qualifications...................         174
810             Market research.............................         181
811             Describing agency needs.....................         181
812             Acquisition of commercial items.............         187
          SUBCHAPTER C--CONTRACTING METHODS AND CONTRACT TYPES
813             Simplified acquisition procedures...........         189
814             Sealed bidding..............................         190
815             Contracting by negotiation..................         195
816             Types of contracts..........................         197
817             Special contracting methods.................         198
                  SUBCHAPTER D--SOCIOECONOMIC PROGRAMS
819             Small business programs.....................         201
822             Application of labor laws to Government 
                    acquisitions............................         212
823

Environment, energy and water efficiency, renewable energy technologies, 
occupational safety, and drug-free workplace [Reserved]

824             Protection of privacy and freedom of 
                    information.............................         212
825             Foreign acquisition.........................         213

[[Page 142]]

826

Other socioeconomic programs [Reserved]

             SUBCHAPTER E--GENERAL CONTRACTING REQUIREMENTS
828             Bonds and insurance.........................         216
829             Taxes.......................................         218
830

Cost accounting standards administration [Reserved]

831             Contract cost principles and procedures.....         219
832             Contract financing..........................         222
833             Protests, disputes, and appeals.............         226
             SUBCHAPTER F--SPECIAL CATEGORIES OF CONTRACTING
836             Construction and architect-engineer 
                    contracts...............................         231
837             Service contracting.........................         236
839

Acquisition of information technology [Reserved]

841             Acquisition of utility services.............         238
                    SUBCHAPTER G--CONTRACT MANAGEMENT
842             Contract administration and audit services..         240
844

Subcontracting policies and procedures [Reserved]

846             Quality assurance...........................         241
847             Transportation..............................         245
849             Termination of contracts....................         246
                     SUBCHAPTER H--CLAUSES AND FORMS
852             Solicitation provisions and contract clauses         248
853             Forms.......................................         276
           SUBCHAPTER I--DEPARTMENT SUPPLEMENTARY REGULATIONS
870             Special procurement controls................         278
871             Loan guaranty and vocational rehabilitation 
                    and employment programs.................         279
872

[Reserved]

873             Simplified acquisition procedures for 
                    health-care resources...................         284

[[Page 143]]

                          SUBCHAPTER A_GENERAL

  PART 801_DEPARTMENT OF VETERANS AFFAIRS ACQUISITION REGULATION SYSTEM

Sec.

Sec. 801.000 Scope of part.

               Subpart 801.1_Purpose, Authority, Issuance


Sec. 801.101 Purpose.

Sec. 801.103 Authority.

Sec. 801.104 Applicability.

Sec. 801.104-70 Exclusions.

Sec. 801.105 Issuance.

Sec. 801.105-2 Arrangement of regulations.

Sec. 801.106 OMB approval under the Paperwork Reduction Act.

                      Subpart 801.2_Administration


Sec. 801.201 Maintenance of the FAR.

Sec. 801.201-1 The two councils.

            Subpart 801.3_Department Acquisition Regulations


Sec. 801.304 Department control and compliance procedures.

              Subpart 801.4_Deviations From the FAR or VAAR


Sec. 801.403 Individual deviations.

Sec. 801.404 Class deviations.

      Subpart 801.6_Career Development, Contracting Authority, and 
                            Responsibilities


Sec. 801.601 General.

Sec. 801.602 Contracting officers.

Sec. 801.602-2 Responsibilities.

Sec. 801.602-3 Ratification of unauthorized commitments.

Sec. 801.602-70 General review requirements.

Sec. 801.602-71 Basic review requirements.

Sec. 801.602-72 Exceptions and additional review requirements.

Sec. 801.602-73 Review requirements for scarce medical specialist 
          contracts and contracts for health-care resources.

Sec. 801.602-74 Review requirements for an interagency agreement.

Sec. 801.602-75 Review requirements--OGC.

Sec. 801.602-76 Business clearance review.

Sec. 801.602-77 Processing solicitations and contract documents for 
          legal or technical review--general.

Sec. 801.602-78 Processing solicitations and contract documents for 
          legal or technical review--Veterans Health Administration 
          field facilities, Central Office (except Office of 
          Construction and Facilities Management), the National 
          Acquisition Center, and the Denver Acquisition and Logistics 
          Center.

Sec. 801.602-79 Processing solicitations and contract documents for 
          legal or technical review--Veterans Benefits Administration.

Sec. 801.602-80 Legal and technical review-Office of Construction and 
          Facilities Management and National Cemetery Administration.

Sec. 801.602-81 Documents required for business clearance reviews.

Sec. 801.602-82 Documents to submit for legal or technical review--
          general.

Sec. 801.602-83 Documents to submit for legal or technical review--
          contract modifications.

Sec. 801.602-84 Documents to submit for business clearance reviews.

Sec. 801.602-85 Results of review.

Sec. 801.603 Selection, appointment, and termination of appointment.

Sec. 801.603-1 General.

Sec. 801.603-70 Representatives of contracting officers.

Sec. 801.603-71 Representatives of contracting officers; receipt of 
          equipment, supplies, and nonpersonal services.

Sec. 801.670 Special and limited delegation.

Sec. 801.670-1 Issuing bills of lading.

Sec. 801.670-3 Medical, dental, and ancillary service.

Sec. 801.670-4 National Cemetery Administration.

Sec. 801.670-5 Letters of agreement.

Sec. 801.680 Contracting authority of the Inspector General.

Sec. 801.690 VA's COCP.

Sec. 801.690-1 Definitions.

Sec. 801.690-2 General.

Sec. 801.690-3 Responsibility under the COCP.

Sec. 801.690-4 Selection.

Sec. 801.690-5 Requirements for contracting authority.

Sec. 801.690-6 Appointment.

Sec. 801.690-7 Termination.

Sec. 801.690-8 Interim appointment provisions.

Sec. 801.690-9 Distribution of Certificates of Appointment.

Sec. 801.695 VA's Appointment of HCAs program.

Sec. 801.695-1 Policy.

Sec. 801.695-2 Procedures for appointment of HCAs.

Sec. 801.695-3 Authority of the HCA.

    Authority: 38 U.S.C. 501; 40 U.S.C. 121(c); and 48 CFR 1.301-1.304.

    Source: 73 FR 2717, Jan. 15, 2008, unless otherwise noted.

[[Page 144]]



Sec. 801.000  Scope of part.

    This part sets out general Department of Veterans Affairs (VA) 
Acquisition Regulation (VAAR) policies, including information regarding 
the maintenance and administration of the VAAR, acquisition policies and 
practices, and procedures for deviation from the VAAR and the Federal 
Acquisition Regulation (FAR).

               Subpart 801.1_Purpose, Authority, Issuance



Sec. 801.101  Purpose.

    (a) VA established the VAAR to codify and publish uniform policies 
and procedures for VA's acquisition of supplies and services, including 
construction.
    (b) The VAAR implements and supplements the FAR.



Sec. 801.103  Authority.

    The Secretary issues the VAAR under the authority of 40 U.S.C. 
121(c), Title 48 of the Code of Federal Regulations (CFR) 1.301 through 
1.304, and other authorities as cited.



Sec. 801.104  Applicability.

    (a) Unless otherwise specified in this chapter or excepted by 
statute (i.e., expenditures of the VA Canteen Service) or other VA 
regulations, the FAR and VAAR apply to all VA acquisitions (including 
construction) made with appropriated funds. Supply Fund monies (38 
U.S.C. 8121) and General Post Funds (38 U.S.C. 8302) are appropriated 
funds.
    (b) Use the VAAR and the FAR together. The FAR applies to VA 
acquisitions except as provided in the VAAR.



Sec. 801.104-70  Exclusions.

    The FAR and VAAR do not apply to purchases and contracts that use 
General Post Funds if using the FAR and the VAAR would infringe upon a 
donor's right to specify the exact item to be purchased and/or the 
source of supply (38 U.S.C. 8303).



Sec. 801.105  Issuance.



Sec. 801.105-2  Arrangement of regulations.

    (a) General. The VAAR is divided into subchapters, parts (each of 
which covers a separate aspect of acquisition), subparts, sections, and 
subsections.
    (b) Numbering. (1) The numbering system permits the discrete 
identification of every VAAR paragraph. The digits to the left of the 
decimal point represent the part number. The numbers to the right of the 
decimal point and to the left of the dash represent, in order, the 
subpart (one or two digits), and the section (two digits). The number to 
the right of the dash represents the subsection. Subdivisions may be 
used at the section and subsection level to identify individual 
paragraphs.
    (2) Subdivisions below the section or subsection level consist of 
parenthetical alphanumerics using the following sequence: 
(a)(1)(i)(A)(1)(i).
    (c) References and citations. (1) Unless otherwise stated, cross-
references indicate parts, subparts, sections, subsections, paragraphs, 
subparagraphs, or subdivisions of this Chapter.
    (2) This chapter may be referred to as the ``Department of Veterans 
Affairs Acquisition Regulation'' or the ``VAAR''.
    (3) Using the VAAR coverage at 809.106-4(c) as a typical 
illustration, reference to the--
    (i) Part would be ``VAAR Part 809'' outside the VAAR and ``Part 
809'' within the VAAR.
    (ii) Subpart would be ``VAAR Subpart 809.1'' outside the VAAR and 
``Subpart 809.1'' within the VAAR.
    (iii) Section would be ``VAAR 809.106'' outside the VAAR and 
``809.106'' within the VAAR.
    (iv) Subsection would be ``VAAR 809.106-4'' outside the VAAR and 
``809.106-4'' within the VAAR.
    (v) Paragraph would be ``VAAR 809.106-4(c)'' outside the VAAR and 
``809.106-4(c)'' within the VAAR.
    (4) Citations of authority (e.g., statutes or Executive orders) in 
the VAAR shall follow the Federal Register form guides.



Sec. 801.106  OMB approval under the Paperwork Reduction Act.

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
3501-3521), the Office of Management and Budget (OMB) has approved the 
reporting or recordkeeping provisions that are included in the VAAR and 
has

[[Page 145]]

given VA the following approval numbers:

----------------------------------------------------------------------------------------------------------------
 48 CFR part or section where identified  and     Current OMB     48 CFR part or section where      Current OMB
                   described                    control number      identified  and described     control number
----------------------------------------------------------------------------------------------------------------
809.106-1.....................................       2900-0418  852.214-70......................       2900-0593
809.504(d)....................................       2900-0418  852.228-71......................       2900-0590
813...........................................       2900-0393  852.236-72......................       2900-0422
832.006-4.....................................       2900-0688  852.236-79......................       2900-0208
832.202-4.....................................       2900-0688  852.236-80 (Alt. I).............       2900-0422
836.606-71....................................       2900-0208  852.236-82 through 852.236-84...       2900-0422
852.207-70....................................       2900-0590  852.236-88......................       2900-0422
852.209-70....................................       2900-0418  852.236-89......................       2900-0622
852.211-70....................................       2900-0587  852.236-91......................       2900-0623
852.211-71....................................       2900-0588  852.237-7.......................       2900-0590
852.211-72....................................       2900-0586  852.270-3.......................       2900-0589
852.211-73....................................       2900-0585
----------------------------------------------------------------------------------------------------------------

                      Subpart 801.2_Administration



Sec. 801.201  Maintenance of the FAR.



Sec. 801.201-1  The two councils.

    Revisions to the FAR are prepared and issued through the coordinated 
action of two councils, the Defense Acquisition Regulations Council and 
the Civilian Agency Acquisition Council. A designee of the Office of 
Acquisition and Materiel Management will represent VA on the Civilian 
Agency Acquisition Council.

            Subpart 801.3_Department Acquisition Regulations



Sec. 801.304  Department control and compliance procedures.

    The Assistant Secretary for Management is designated as the 
Department's Chief Acquisition Officer. The Deputy Assistant Secretary 
(DAS) for Acquisition and Materiel Management is designated as the 
Department's Senior Procurement Executive (SPE). The Associate DAS for 
Acquisitions is designated as the Deputy Senior Procurement Executive 
(DSPE). The DSPE is responsible for amending the VAAR for compliance 
with FAR 1.304.

              Subpart 801.4_Deviations from the FAR or VAAR



Sec. 801.403  Individual deviations.

    (a) Authority to authorize individual deviations from the FAR and 
VAAR is delegated to the SPE and is further delegated to the DSPE.
    (b) When a contracting officer considers it necessary to deviate 
from the policies in the FAR or VAAR, the contracting officer, in 
accordance with Administration or staff office procedures, must submit a 
request through the HCA to the DSPE for authority to deviate.
    (c) The request to deviate must clearly state the circumstances 
warranting the deviation and the nature of the deviation.
    (d) The DSPE may authorize individual deviations from the FAR and 
VAAR when an individual deviation is in the best interest of the 
Government. When the DSPE authorizes a deviation, the contracting 
officer must file the authorization in the purchase order or contract 
file.



Sec. 801.404  Class deviations.

    Authority to authorize class deviations from the FAR and VAAR is 
delegated to the SPE and is further delegated to the DSPE. The DSPE may 
authorize class deviations from the FAR and VAAR when a class deviation 
is in the best interest of the Government. The DSPE must comply with the 
provisions of FAR 1.404 through the SPE.

      Subpart 801.6_Career Development, Contracting Authority, and 
                            Responsibilities



Sec. 801.601  General.

    (a) The HCA or the DSPE, within their authority, may appoint a 
contracting officer under FAR 1.603 and VA's Contracting Officer 
Certification Program (COCP).

[[Page 146]]

    (b) In addition, the HCA may delegate micro-purchase authority to VA 
employees under VA's purchase card program.
    (c) An individual may not commit the Government for purchases of 
supplies, equipment, or services unless the individual has received 
delegated contracting authority as a contracting officer or purchase 
card holder or as provided in 801.670. Individuals making such 
commitments or acting beyond the scope of their authority may be held 
financially liable.



Sec. 801.602  Contracting officers.

    (a) Except as otherwise provided by statute, VA regulations, the 
VAAR, or the FAR, the authority vested in the Secretary to do the 
following is delegated to the SPE and is further delegated from the SPE 
to the DSPE:
    (1) Execute, award, and administer contracts, purchase orders, and 
other agreements (including interagency agreements) for the expenditure 
of funds for construction and the acquisition of personal property and 
services (including architect-engineer services).
    (2) Issue bills of lading.
    (3) Sell personal property.
    (4) Enter into leases, sales agreements, and other transactions.
    (5) Prescribe and publish acquisition policies and procedures.
    (6) Establish clear lines of contracting authority.
    (7) Manage and enhance career development of the procurement work 
force.
    (8) Examine, in coordination with the Office of Federal Procurement 
Policy, the procurement system to determine specific areas where VA 
should establish and apply Government-wide performance standards, and to 
participate in developing Government-wide procurement policies, 
regulations, and standards.
    (9) Oversee the competition advocate program.
    (b) The DSPE may further delegate authority to execute, award, and 
administer contracts, purchase orders, and other agreements to other VA 
officials, such as HCAs and contracting officers, in accordance with the 
COCP.



Sec. 801.602-2  Responsibilities.

    In the administration of a contract, many problems can and do arise 
that make the advice and assistance of the Office of General Counsel 
(OGC) either desirable or necessary. The final decision as to the action 
to be taken, however, must be made by the contracting officer in each 
instance. To reduce to the absolute minimum the possibility of 
litigation resulting from his/her decision, the contracting officer 
shall submit the problem through channels in sufficient detail to the 
General Counsel for advice or assistance.



Sec. 801.602-3  Ratification of unauthorized commitments.

    (a) This section applies to unauthorized commitments, including any 
commitment made by a contracting officer that exceeds that contracting 
officer's contracting authority and unauthorized commitments made by 
individuals who lack contracting authority.
    (b) A contracting officer must not ratify unauthorized commitments 
made by other VA personnel or by another contracting officer who lacks 
authority without prior approval as specified in paragraphs (b)(1) 
through (b)(3) of this section. The specified approval authorities may 
not be re-delegated.
    (1) At field facilities, for supplies, services (except leases of 
real property), and construction, the approving authority for 
unauthorized commitments made by staff assigned to a field facility is 
the HCA.
    (2) For VA Central Office (VACO) organizations, for supplies, 
services (except leases of real property), and construction, the 
approving authorities for unauthorized commitments made by staff 
assigned to the Administrations are the respective chief financial 
officers of the Administrations concerned. The approving authority for 
unauthorized commitments made by staff assigned to any other 
organization within VACO is the Deputy Assistant Secretary for 
Acquisition and Materiel Management.
    (3) For unauthorized commitments for leasehold interest in real 
property, the approving authority is:
    (i) The Director, Office of Construction and Facilities Management, 
for unauthorized commitments for 1-5,000

[[Page 147]]

square feet of space or for 1-100 parking spaces costing less than 
$50,000 per annum.
    (ii) The Under Secretary for Health for unauthorized commitments for 
5,001-20,000 square feet of space or for more than 100 parking spaces 
costing less than $100,000 per annum.
    (iii) The Deputy Secretary for 20,001 square feet of space and above 
or for more than 100 parking spaces costing more than $100,000 per 
annum.
    (c) The process for contracting officer requests for ratification 
will be as follows:
    (1) The individual who made the unauthorized commitment will furnish 
the contracting officer with all records and documents concerning the 
commitment and a complete written statement of facts that includes the 
following:
    (i) Why the procurement office was not used.
    (ii) Why the proposed contractor was selected.
    (iii) Other sources that were considered.
    (iv) A description of work to be performed or products to be 
furnished.
    (v) The estimated or agreed contract price.
    (vi) A citation of the appropriation available.
    (vii) A statement of whether the contractor has commenced 
performance.
    (viii) The name of the individual responsible for the unauthorized 
commitment.
    (2) The contracting officer will review the file and forward it to 
the approving authority specified in paragraph (b) of this section with 
any comments or information that the approving authority should consider 
in evaluating the request for ratification. If the approving authority 
determines that a legal review would be desirable, the approving 
authority will coordinate the request for ratification with OGC or the 
Regional Counsel, as appropriate.
    (3) If the approving authority authorizes the ratification, the 
approving authority will return the file to the contracting officer for 
issuance of a purchase order or contract, as appropriate.
    (d) If an otherwise proper contract award exceeds the limits of the 
contracting officer's delegated authority, the ratifying contracting 
officer must comply with the above requirements and the approving 
authority must inform the HCA. The HCA will take action to preclude 
future instances of such awards.



Sec. 801.602-70  General review requirements.

    (a) Contracting officers shall ensure that any document listed under 
801.602-71 through 801.602-76 that is submitted for technical or legal 
review is submitted through or by an official at least one level above 
the contracting officer.
    (b) Before opening a bid, awarding a contract, or signing a 
contract-related document as specified in 801.602-71 through 801.602-76, 
the contracting officer shall ensure that the appropriate VA official, 
including appropriate staff of the Acquisition Resources Service 
regional or VA Central Office, has reviewed and concurred with the 
document.
    (c) Before signing a contract for a Veterans Benefits Administration 
field facility for any guidance center or vocational rehabilitation 
service with an anticipated expenditure of $100,000 or more, the 
contracting officer shall ensure that the Director, Vocational 
Rehabilitation and Employment Service, has reviewed and approved the 
solicitation or proposed contract.
    (d) When the following items are for the management, sale, or lease 
of properties acquired by VA after liquidation of a guaranteed, direct, 
acquired, or vendee loan, the review requirements specified in 801.602-
71 through 801.602-76 do not apply:
    (1) Agreements.
    (2) Licenses.
    (3) Easements.
    (4) Deeds.
    (e) If there is insufficient time for the legal review required in 
801.602-75(a)(3), the contracting officer (except contracting officers 
in the Office of Construction and Facilities Management) must at least 
obtain verbal concurrence from Acquisition Resources Service staff 
before issuing a change order where:
    (1) The change order (unilateral agreement) has an anticipated value 
of $100,000 or more; or

[[Page 148]]

    (2) The change order is for a time extension of 60 days or more.
    (f) Unless otherwise stated, all dollar values in 801.602-71 through 
801.602-76 are expressed in total dollars involved in the acquisition 
action.
    (1) The contracting officer may not consider the positive and 
negative status of the figures in determining the total dollar values 
involved.
    (2) An acquisition of $550,000 with a trade-in credit of $70,000 
would be valued at $620,000 for legal or technical review purposes 
rather than the net amount of $480,000. An Energy Savings Performance 
Contract requiring payment from savings of $10,000,000 to the contractor 
over the life of the contract would be valued at $10,000,000, despite 
the fact that there is no immediate cost to VA and no payment if there 
are no savings.
    (g) By separate notice, the DSPE may require technical review of any 
contract-related materials, regardless of dollar value.
    (h) Except as set forth in 801.602-73 and 801.602-75, at its 
discretion, the Office of Acquisition and Materiel Management may 
request OGC review.
    (i) The requirements of this section or sections 801.602-71 through 
801.602-76 do not apply to contracts awarded by or on behalf of the VA 
Office of Inspector General.
    (j) Contracting officers and purchase card holders must ensure 
compliance with separate guidance on information technology (IT) 
tracking and approval prior to processing requests for acquisitions of 
IT and telecommunications software, equipment, and/or services, 
regardless of dollar value.



Sec. 801.602-71  Basic review requirements.

    Contracting officers must obtain technical review from Acquisition 
Resources Service staff of the documents set forth in column one of 
Table 801.602-71 that have anticipated award values equal to or greater 
than the value in column two.

                            Table 801.602-71
------------------------------------------------------------------------
                                             Anticipated contract award
                 Document                              value
------------------------------------------------------------------------
(a) Supply or service solicitations or     $500,000 or more.
 quotations (except as provided in
 801.602-72 through 801.602-75) (includes
 indefinite quantity, option year, and
 multi-year solicitations or quotations
 where the contracting officer reasonably
 expects expenditures of $500,000 or
 more, inclusive of options).
(b) Supply or service solicitations or     $750,000 or more.
 quotations where a consolidated
 acquisition activity is performing
 acquisitions for three or more
 physically separated VA medical centers
 (excluding outpatient clinics).
(c) Fixed price, sealed bid construction   $1 million or more.
 solicitations, other than 8(a)
 construction solicitations.
(d) 8(a) construction solicitations and    $500,000 or more.
 task orders.
(e) Request for Proposal (negotiated)      $500,000 or more.
 construction solicitations and task
 orders.
(f) Proposed task/delivery orders and      $500,000 or more.
 blanket purchase agreements (includes
 orders under Federal Supply Schedule
 contracts).
(g) Proposed cost-reimbursement,           $100,000 or more.
 incentive, time-and-materials, and labor-
 hour contracts (see 816.102(b)).
(h) Utility service agreements...........  $50,000 or more.
(i) Solicitations for advisory and         $100,000 or more.
 assistance services (see 837.2).
(j) Proposed letter contracts and ensuing  $25,000.
 formal contracts.
------------------------------------------------------------------------



Sec. 801.602-72  Exceptions and additional review requirements.

    (a) In addition to the general review requirements in 801.602-71, 
contracting officers must obtain technical reviews from Acquisition 
Resources Service staff of any proposed agreement that is unique, novel, 
or unusual.
    (b) Contracting officers must obtain technical reviews from 
Acquisition Resources Service staff of the following:
    (1) Documents relating to bonds (see FAR 28.102-1 and 28.203 through 
28.203-5) as follows:
    (i) An irrevocable letter of credit.
    (ii) A tripartite escrow agreement.
    (iii) An individual surety bond. (Note that the FAR at 28.203(f) 
also requires legal review of the documents pledging the assets of an 
individual surety.)
    (2) Proposed novation and change-of-name agreements (see FAR Subpart 
42.12).
    (3) Solicitations or proposed contracts containing an economic price

[[Page 149]]

adjustment clause (other than a pre-approved VA clause) based on a cost 
index of material or labor (e.g., the urban consumer price index (CPI-U) 
(see FAR 16.203-4(d)) or where one of the economic price adjustment 
clauses specified in FAR 16.203-4 are used.
    (4) Proposed multi-year contracts where the cancellation ceiling 
exceeds 20 percent of the contract amount, regardless of the dollar 
value of the proposed contract (see 817.105-1(b)).
    (5) Proposed solicitations where the contract term total of the 
basic and option periods may exceed 5 years, regardless of the dollar 
value of the proposed acquisition (see 817.204).
    (6) Proposed membership agreements in a group purchasing 
organization.
    (7) A proposed termination settlement or determination of amounts 
due the contractor under a terminated contract that involves the 
expenditure of $100,000 or more of Government funds. Acquisition 
Resources Service staff shall obtain legal review (see 849.111-70).
    (8) Consignment agreements with an anticipated expenditure of 
$250,000 or more per year (except for a consignment agreement 
established under, and provided for in, a Federal Supply Schedule 
contract).
    (c) Contracting officers, including purchase card holders, must 
obtain technical and legal review of all proposed contracts with hotels 
or similar facilities for conferences or similar functions (e.g., 
training, meetings) where VA's commitment, expenditure, and liability 
(combined) exceed $25,000. This dollar figure is based on the 
combination of all direct costs to VA under the contract (e.g., 
conference rooms, audio-visual charges, refreshments, catering) and all 
potential liability (e.g., room guarantee liability, cancellation 
costs). Even if there is no direct cost to VA, if the proposed contract 
includes a guarantee on room usage or a cancellation fee that could 
potentially exceed $25,000, the proposed contract requires legal and 
technical review. Signing a contract committing VA to hold a conference 
at a particular hotel is a procurement and procurement laws and 
regulations must be followed.



Sec. 801.602-73  Review requirements for scarce medical specialist 
          contracts and contracts for health-care resources.

    For contracts to be awarded under the authority of either 38 U.S.C. 
7409 or 38 U.S.C. 8153, contracting officers must obtain technical and 
legal reviews from the Medical Sharing Office, OGC, and Acquisition 
Resources Service staff of the following documents:
    (a) Each competitive solicitation, quotation, proposed contract, or 
agreement with an anticipated contract award value of $1,500,000 or 
more, inclusive of options.
    (b) Each noncompetitive solicitation, quotation, proposed contract, 
or agreement with an anticipated contract award value of $500,000 or 
more, inclusive of options.



Sec. 801.602-74  Review requirements for an interagency agreement.

    Contracting officers or other staff must obtain technical review 
from Acquisition Operations Service staff of the following documents:
    (a) Each proposed VA Central Office interagency agreement with 
another Federal agency to be awarded under authority of the Economy Act, 
regardless of dollar value. For VA Central Office, only the DSPE or 
designee may sign an interagency agreement.
    (b) Each proposed VA field facility interagency agreement with 
another Federal agency awarded under authority of the Economy Act 
involving an anticipated expenditure of VA funds of $250,000 or more. A 
VA field facility contracting officer or a contracting officer at the VA 
National Acquisition Center or the Denver Acquisition and Logistics 
Center may sign an interagency agreement if the dollar threshold is 
within the contracting officer's warrant limit.



Sec. 801.602-75  Review requirements--OGC.

    (a) Contracting officers must obtain legal review or concurrence 
from OGC for the following categories of proposed contractual actions.
    (1) Each contract termination, final decision, cure letter, or 
``show cause'' notice proposed under any contract where the total value 
of the contract is

[[Page 150]]

$100,000 or more. A contracting officer may not sign or release a 
document subject to this provision until OGC has concurred.
    (2) Each dispute or claim from a contractor involving a potential 
total dollar value of $100,000 or more. A contracting officer may not 
sign or release a document subject to this provision until OGC has 
concurred.
    (3) Each proposed contract modification, including any proposed 
modification to a supply or service contract, where the total value of 
the modification is $100,000 or more (e.g., a modification for a $60,000 
increase and a $50,000 decrease equals $110,000). Contract modifications 
issued only to exercise contract options are exempt from this review 
requirement.
    (4) Each proposed contract modification granting a time extension of 
more than 60 days. The Director, Acquisition Resources Service, may 
waive the pre-approval requirement under this paragraph for an 
individual facility when the Director determines that the facility has 
obtained appropriate ``consideration'' for past time extensions and the 
extensions were otherwise appropriately granted.
    (5) Each proposed modification increasing the value of a letter 
contract, regardless of dollar value.
    (6) Each proposed contract modification for which the contractor 
takes exception to the accord and satisfaction language specified by VA. 
The contracting officer may not execute any proposed contract 
modification under this requirement until the contracting officer 
receives OGC's concurrence in the proposed language.
    (7) An assignment of claims (see FAR Subpart 32.8).
    (8) Each change or revision to a FAR or VAAR provision or clause or 
an internal VA-approved clause (e.g., architect/engineer ``SP'' clauses) 
not specifically authorized by the regulations.
    (9) Each change or revision to a prescribed VA contract form.
    (10) A proposed utility construction or connection contract with an 
anticipated contract award value of $50,000 or more.
    (11) Each proposed novation and change-of-name agreement (see 
842.1203).
    (b) For an action specified in paragraph (a)(1) or (2) of this 
section, OGC may comment or concur in writing or by telephone.
    (c) When a Central Office contracting activity requests legal 
assistance, the contracting officer will brief OGC on the facts and 
points of issue to facilitate prompt resolution.
    (d) For each solicitation or contract awarded and administered by a 
Central Office contracting activity, that contracting activity will ask 
OGC to participate in conferences where legal problems or modifications 
to contract provisions may be considered and in meetings attended by 
legal representatives of private parties or other Government agencies. 
The contracting activity will request assigned procurement counsel 
participation in drafting correspondence involving significant 
controversial or sensitive contractual matters.
    (e) OGC will prepare any response to the Government Accountability 
Office (GAO) on GAO bid protests. (See 833.104).



Sec. 801.602-76  Business clearance review.

    (a) A business clearance review is a technical review of all 
solicitation and contract award or modification documents immediately 
prior to contract award or modification over the specified dollar 
threshold.
    (b) All VA contracting officers must obtain a business clearance 
review prior to award of any contract, task or delivery order, or 
blanket purchase agreement or execution of any contract modification 
with a value of $5 million or more or prior to award of any lease with a 
value of $300,000 or more per year.
    (c) The dollar threshold in this paragraph is based on the total 
dollar value of all awards expected under a single solicitation, not the 
value of each individual award under a solicitation. For example, a 
solicitation for home oxygen for a Veterans Integrated Service Network 
(VISN) might result in multiple awards, each of which has a value of 
less than $5 million. If the total of all awards under that solicitation 
will exceed $5 million, the contracting officer must obtain a business 
clearance

[[Page 151]]

review of the entire package, including all proposed individual awards.



Sec. 801.602-77  Processing solicitations and contract documents for 
          legal or technical review--general.

    (a) Under 801.602-70 through 801.602-76, before taking contract 
action, a contracting officer must ensure that any required legal or 
technical review or concurrence is complete. Contracting officers shall 
not award or sign contracts, task or delivery orders, blanket purchase 
agreements, or contract modifications prior to receipt of the final 
legal and technical review. Should the contracting officer disagree with 
the advice provided, the contracting officer shall document in the 
contract file the reasons therefore and provide a copy of that document 
to the reviewing Office of Acquisition and Materiel Management office. 
The contracting officer must fully implement any accepted review 
comments as follows:
    (1) Before opening the bid or proposal for a competitively awarded 
contract.
    (2) Before executing contract documents for a contract modification 
or noncompetitive contract award.
    (b) The contracting officer must advise potential bidders or 
offerors of changes made to the solicitation by issuing an amendment. 
The contracting officer must give bidders and offerors sufficient time 
for evaluation before the bid or proposal opens.



Sec. 801.602-78  Processing solicitations and contract documents for 
          
          legal or technical review--Veterans Health Administration 
          field facilities, Central Office (except Office of 
          Construction and Facilities Management), the National 
          Acquisition Center, and the Denver Acquisition and Logistics 
          Center.

    (a) If legal or technical review is required, the documents listed 
in Table 801.602-78 must be forwarded for review and approval as shown 
therein.

                            Table 801.602-78
------------------------------------------------------------------------
            Documents              Person forwarding      Forward to
------------------------------------------------------------------------
(1) Proposed solicitations,       One level above     Appropriate
 quotations, contract-related      the contracting     Acquisition
 documents, and agreements         officer.            Resources Service
 specified in Table 801.602.71                         central or
 and in 801.602-72.                                    regional office.
(2) Scarce medical specialist     One level above     Director, Enhanced
 and health-care resource          the contracting     Sharing Program
 solicitations, quotations, and    officer.            (10FL), VACO.
 proposed contracts (i.e.,
 contracts to be awarded under
 the authority of 38 U.S.C. 7409
 or 8153) specified in 801.602-
 73.
(3) Interagency agreements        Approving           DSPE, Acquisition
 specified in 801.602-74.          official,           Operations
                                   contracting         Service.
                                   officer.
(4) Proposed contract             Contracting         OGC.
 modifications, proposed           officer.
 contract modifications for
 which the contractor takes
 exception to the accord and
 satisfaction language VA
 specifies, assignment of
 claims, changes to clauses, and
 proposed utility connection
 agreements specified in 801.602-
 75(a)(3) through (a)(7) and in
 801.602-75(a)(9) and (a)(10).
(5) Proposed contract             Contracting         Regional Office of
 terminations, final decisions,    officer.            the General
 cure letters, show cause                              Counsel.
 notices, disputes, and claims
 specified in 801.602-75(a)(1)
 and (a)(2).
------------------------------------------------------------------------

    (b) The director of the Acquisition Resources Service office 
conducting the technical review has authority to determine whether to 
forward documents for legal review.
    (c) When the contractor takes exception to the accord and 
satisfaction language VA specifies in a proposed contract modification, 
the contracting officer must not sign the modification until OGC concurs 
with the language proposed by the contractor.
    (d) The contracting officer either must fax or send via overnight 
mail or e-mail all of the relevant documents on proposed contract 
terminations, final decisions, cure letters, show cause notices, 
disputes, and claims specified in 801.602-75(a)(1) and (a)(2). OGC will 
provide concurrence or comments either in writing or by telephone. The 
contracting officer must not sign or release a document to the 
contractor until OGC concurs.

[[Page 152]]

    (e) For any VA contract form subject to legal review under 801.602-
75(a)(8), the contracting officer must process the change or revision in 
accordance with VA Manual MP-1, Part II, Chapter 4 and any supplements 
to it (http://www.va.gov/publ/direc/benefits/mp1p2ch4.htm).



Sec. 801.602-79  Processing solicitations and contract documents for 
          legal or technical review--Veterans Benefits Administration.

    (a) Contracting officer must ensure that proposed solicitations, 
quotations, contract-related documents, and agreements listed in Table 
801.602-71 are reviewed by the Office of Resource Management prior to 
document execution. The Office of Resource Management must request legal 
review of all these documents.
    (b) Contracting officer must ensure that proposed solicitations or 
agreements for guidance center and vocational rehabilitation services 
are reviewed by the Director, Vocational Rehabilitation and Employment 
Service, if there is an anticipated expenditure of $100,000 or more.



Sec. 801.602-80  Legal and technical review-Office of Construction and 
          Facilities Management and National Cemetery Administration.

    An Office of Construction and Facilities Management or National 
Cemetery Administration (Construction Support Division) contracting 
officer shall submit all A/E contracts, and all construction contracts, 
time extensions, and modifications, directly to Office of General 
Counsel (OGC) for review.



Sec. 801.602-81  Documents required for business clearance reviews.

    When a bid or offer, proposed contract modification, or proposed 
lease requires a business clearance review under 801.602-76, the 
contracting officer must forward the required documents (see 801.602-84) 
and the following information to the appropriate Acquisition Resources 
Service central or regional office. Office of Construction and 
Facilities Management and National Cemetery Administration (Construction 
Support Division) contracting officers shall forward the documents to 
OGC (025):
    (a) The date on which award is anticipated.
    (b) Results or efforts made to determine whether the contractor is 
responsible under FAR Subpart 9.4.
    (c) A determination of price reasonableness.
    (d) An explanation (e.g., the source selection decision as specified 
in FAR 15.308) if the contracting officer proposes an award to a 
contractor other than the low responsible bidder or offeror.



Sec. 801.602-82  Documents to submit for legal or technical review--
          general.

    Table 801.602-82 specifies the documents that must be submitted when 
a legal or technical review is required.

                            Table 801.602-82
------------------------------------------------------------------------
  Action or document subject to review         Documents to submit
------------------------------------------------------------------------
(a) Proposed construction contract.....  One copy of each solicitation
                                          document, excluding drawings.
                                          Submit not later than the date
                                          on which the contracting
                                          officer furnishes the
                                          documents to prospective
                                          bidders.
(b) Proposed solicitation or contract    One copy of the solicitation or
 for scarce medical specialist services   proposed contract and
 or health-care resources.                documents required under VA
                                          Manual M-1, Part 1, Chapter
                                          34.
(c) All other proposed solicitations,    One copy of each document to be
 contracts, and agreements.               used in the contract
                                          solicitation or award, and any
                                          other document that supports
                                          the proposed procurement
                                          action. Submit not later than
                                          the date on which the
                                          contracting officer furnishes
                                          the documents to prospective
                                          bidders.
------------------------------------------------------------------------



Sec. 801.602-83  Documents to submit for legal or technical review--
          contract modifications.

    (a) The documents specified in this section related to proposed 
contract modifications must be submitted to Acquisition Resources 
Service for review under one or more of the following conditions:

[[Page 153]]

    (1) When the total modification value is $100,000 or more.
    (2) When the modification is for a time extension of 60 days or 
more.
    (3) Where the contractor takes exception to VA's accord and 
satisfaction language.
    (b) The contracting officer must submit the following documents for 
review:
    (1) A draft of the proposed modification prepared on SF 30, 
Amendment of Solicitation/Modification of Contract, specifying the exact 
language proposed and describing any change in work, time, or cost.
    (2) A statement describing the need for the changed work with any 
back-up documentation, including a copy of the general statement of work 
in the original contract and any existing contract language that will be 
modified.
    (3) A statement addressing whether the proposed modification is 
within the original scope of the contract and specifically addressing 
the facts considered in reaching the conclusion.
    (4) A statement analyzing what necessitated the modification (e.g., 
a design error, technical changes, or medical center requirements).
    (5) The contracting officer's technical representative's (COTR) 
technical evaluation of the proposed change.
    (6) A memorandum from the appropriate office indicating that funds 
are available or a statement concerning the actions that must be taken 
to secure the required funds.
    (7) The names and telephone numbers of the contracting officer and 
COTR.
    (8) Costing information including the following:
    (i) The contractor's cost proposal in the format required by the 
contract.
    (ii) The COTR's independent cost evaluation.
    (iii) The architect/engineer's independent cost evaluation, if 
applicable and available.
    (iv) The contracting officer's Price Negotiation Memorandum under 
FAR 15.406-3.
    (v) Any other relevant costing information, such as independent 
market research, that VA used or will use as negotiation criteria.
    (c) For a proposed modification to an architect/engineer contract, 
the contracting officer must submit for review each document specified 
in paragraph (b) of this section and the following additional documents.
    (1) A listing of the fees awarded in the original contract and 
previous modifications.
    (2) For a working drawing contract, a statement regarding the actual 
or estimated cost of the original construction and any estimated change 
to the overall project cost as a result of the proposed modification.
    (d) For a modification to a construction contract or, where 
applicable, to an architect/engineer contract, the contracting officer 
must submit for review a copy of the COTR's mark-up of any drawing that 
delineates the proposed changed work, including a copy of any pertinent 
technical specifications. When there is a proposed modification 
involving numerous changes to drawings and specifications for a VA 
Central Office project, the drawings and specifications must be 
available for review in the Office of the Project Director in VA Central 
Office.



Sec. 801.602-84  Documents to submit for business clearance reviews.

    A contracting officer must submit to Acquisition Resources Service 
(Office of Construction and Facilities Management and National Cemetery 
Administration contracting officers shall forward the documents to OGC 
(025)) for review copies of the following documents when a business 
clearance review is required in accordance with 801.602-76:
    (a) The request for contract action, including a justification of 
need (i.e., the using service purchase request).
    (b) The solicitation.
    (c) The abstract of the subject bid or offer.
    (d) Any applicable Price Negotiation Memorandum.
    (e) A statement of the contracting officer's rationale for award.
    (f) Any applicable justification and approval under FAR 6.303 and 
6.304.
    (g) Documents relevant to determining whether the contractor is 
responsible, including:

[[Page 154]]

    (1) Verification that the vendor is not suspended, debarred, or on 
the Department of Health and Human Services Exclusionary List;
    (2) Verification that the vendor has filed any required VETS 100 
report (not required if the acquisition is for a commercial item); and
    (3) For acquisitions exceeding $10 million, the Equal Employment 
Opportunity Clearance.
    (h) Any applicable approved subcontracting plan.
    (i) Documents relevant to price reasonableness (i.e., all documents 
used to support the contracting officer's determination of price 
reasonableness).



Sec. 801.602-85  Results of review.

    (a) When the review is complete, the reviewing office will advise 
the appropriate Central Office activity or contracting officer that the 
proposal was approved as submitted or provide them with recommended 
changes. If the Central Office activity is notified, the Central Office 
activity will forward the information to the contracting officer.
    (b) When changes are recommended by technical or legal review staff, 
if the contracting officer concurs, the contracting officer must take 
immediate action to amend the document. If the contracting officer does 
not concur, the contracting officer must discuss the recommended changes 
with the technical reviewer or the attorney involved and document in the 
contract file the reasons why the contracting officer is not following 
the reviewer's recommendations.
    (c) Acquisition Resources Service and OGC will complete reviews as 
expeditiously as possible, with due regard for procurement actions that 
require an unusually short period for completing the procurement.



Sec. 801.603  Selection, appointment, and termination of appointment.



Sec. 801.603-1  General.

    VAAR 801.690 through 801.690-9 and 801.670 establish the policy and 
procedures for selecting, appointing, and terminating a contracting 
officer.



Sec. 801.603-70  Representatives of contracting officers.

    (a) In carrying out the responsibilities of FAR 1.602-2, the 
contracting officer may designate another Government employee as COTR to 
perform the functions in this section and 801.603-71.
    (1) Except as indicated in 801.603-71, a designation under this 
section must be in writing, must define the scope and limitation of the 
representative's authority, and must be addressed to the COTR with a 
copy forwarded to the contractor.
    (2) The COTR may not re-delegate authority received under this 
paragraph.
    (3) The contracting officer may not authorize a representative to 
make any commitment or change that will affect the price, quantity, 
quality, or delivery terms of a contract.
    (4) A contracting officer acting within his or her warranted 
contracting authority must authorize any change to a contract.
    (b) A contracting officer may authorize his or her technical 
representative to do the following:
    (1) Furnish technical guidance and advice or generally supervise the 
work performed under the contract.
    (2) Take any action authorized in the contract, such as issuing a 
delivery order, rejecting an unsatisfactory item, ordering a replacement 
of an unsatisfactory item (materials or services) or declaring a 
contractor in default on specific delivery orders.
    (i) Except for a contract for blood, the contracting officer may 
delegate this authority only to other Government contracting officers 
under centralized indefinite delivery type contracts and the contract 
will so state.
    (ii) A centralized contract for blood must state that a contracting 
officer at an ordering office may designate representatives and 
alternate representatives to place a delivery order subject to the same 
restrictions in paragraph (b)(3) of this section.
    (3) Place an oral or other informal delivery order for items such 
as, but not limited to, bread, milk, and blood against a local 
indefinite delivery type contract for which there is a blanket purchase 
arrangement and for which funds have been obligated.

[[Page 155]]

    (c) In the administration of research and development contracts, any 
representative appointed under this section must be acceptable to the 
contracting officer and the head of the organization concerned.
    (d) When the contracting officer intends to designate a 
representative under this section for a particular solicitation or 
contract, the contracting officer must include the clause in 852.270-1, 
Representatives of contracting officers, in the solicitation and 
contract.



Sec. 801.603-71  Representatives of contracting officers; receipt of 
          equipment, supplies, and nonpersonal services.

    (a) Without prior notification to the contractor or vendor, the 
contracting officer may designate other competent personnel, i.e., 
COTRs, to represent him or her to receive and inspect supplies, 
equipment and services at a VA facility. The COTRs may perform duties, 
as specified by the contracting officer, such as, but not limited to, 
the following:
    (1) Inspect and certify compliance with the quality and quantity 
requirements of the purchase order or contract.
    (2) Inspect supplies and equipment for condition and quantity and 
accept supplies, equipment, and services, based on quality inspection 
made by another authorized representative.
    (b) The Director, Library Services, VA Central Office, and the 
Chief, Library Service, at a field facility may act as representatives 
of the contracting officer to receive, inspect and accept library books, 
newspapers, and periodicals. Purchase documents will specify that 
delivery will be made directly to the library.



Sec. 801.670  Special and limited delegation.

    The authority vested in the Secretary to execute, award, and 
administer a contract, purchase order, or other agreement for the 
expenditure of funds to acquire the specific services set forth in 
801.670-1 through 801.670-4 is delegated to the SPE. The SPE further 
delegates this authority to the DSPE and to employees appointed or 
designated to the positions specified in those sections.



Sec. 801.670-1  Issuing bills of lading.

    The authority to issue bills of lading previously contained in this 
section is rescinded. Except for individual small package shipments 
(e.g., United Parcel Service, Federal Express, or United States Postal 
Service small package shipments), no VA employee may issue a bill of 
lading or otherwise procure transportation services for goods unless the 
employee has been delegated authority to do so as a warranted 
contracting officer under the VA Contracting Officer Certification 
Program (ref. 801.690). All transportation services for goods, other 
than for small package shipments, require a bill of lading. Except for 
individual small package shipments, individuals with only micro-purchase 
authority may not issue bills of lading or otherwise procure 
transportation services. The dollar value of the bill of lading issued 
or transportation services acquired must not exceed the delegated 
authority of the contracting officer. Candidates for appointment as 
transportation contracting officers whose delegated authority will be 
limited to the acquisition of transportation services for goods only 
shall comply with the Education, Experience, and Training requirements, 
if any, in Part 102-117 of title 41 Code of Federal Regulations, the 
Federal Management Regulation, rather than the requirements in 801.690.



Sec. 801.670-3  Medical, dental, and ancillary service.

    (a) When medical, dental, and ancillary services under $10,000 per 
authorization are not available from an existing contract or agreement, 
the following VA officials at VA medical facilities may authorize these 
services:
    (1) The Chief of Staff and the physician assigned the responsibility 
for the ambulatory care function.
    (2) Chief, Medical Administration Service, or the person designated 
by the facility director to perform medical administration functions.
    (b) Forms specified in Part 853 shall be used for ordering services 
under this paragraph from existing contracts.

[[Page 156]]

    (c) The officials named in paragraph (a) of this section may 
designate one or more of their subordinates to exercise the authority in 
paragraph (a) of this section.
    (d) A designation under this section must be in writing and 
specifically set forth the scope and limitations of the designee's 
authority.



Sec. 801.670-4  National Cemetery Administration.

    The Director of Logistics Management Service, the Centralized 
Contracting Division, and the Construction Support Division are 
authorized to procure supplies, equipment and non-personal services 
(including construction) for National Cemetery Administration (NCA) 
field facilities and other NCA offices when there is an emergency during 
which the servicing supply organization cannot be used.



Sec. 801.670-5  Letters of agreement.

    (a) Letters of agreement shall not be used. The authority previously 
contained in this section is rescinded.
    (b) The VA Office of Inspector General may issue contracts for 
commercial items, including services, using a letter format (see FAR 
12.204(a)), provided billing information and required clauses are 
included in the contract. If the dollar value of the acquisition will 
exceed the simplified acquisition threshold, this is a deviation from 
the requirement to use Standard Form 1449 at FAR 12.204(a).



Sec. 801.680  Contracting authority of the Inspector General.

    (a) Under section 6(a) of Public Law 95-452 (October 12, 1978), the 
Inspector General may do the following:
    (1) Contract or arrange for audits, studies, analyses, and other 
services with public agencies and with private persons.
    (2) Make payments necessary to carry out the provisions of the Act, 
to the extent and in amounts provided in advance by appropriations acts.
    (b) In exercising the special authority provided in paragraph (a) of 
this section, the Inspector General may ask the servicing head of the 
contracting activity for assistance in developing appropriate contract 
or agreement documents.
    (c) The FAR applies to contracts made under paragraph (a) of this 
section. Such contracts also are subject to provisions of the VAAR that 
implement and supplement the FAR on matters other than those stemming 
from or related to delegations of the Secretary's contracting authority. 
(For example, management controls and approvals specified in subpart 
837.2 will not apply to contract actions under the contract authority of 
the Inspector General.)



Sec. 801.690  VA's COCP.



Sec. 801.690-1  Definitions.

    Accredited college or university means a college or university that 
has been accredited by an accrediting agency recognized by the U.S. 
Department of Education (see http://www.ed.gov/admins/finaid/accred/
index.html) or accredited by a foreign government.
    ACEP means the Acquisition Continuing Education Program, a program 
to provide VA's acquisition workforce with classroom knowledge to 
further develop their acquisition skills. The program supports VA 
personnel in the GS 1102 contracting series, other contracting officers 
(regardless of General Schedule series), contracting officers' technical 
representatives, and contracting officers' representatives to ensure 
that they meet the continuing education requirements mandated by OFPP 
Policy Letter No. 05-01, Developing and Managing the Acquisition 
Workforce, dated April 15, 2005 (see http://www.whitehouse.gov/omb/
procurement/policy--letters/05-01--041505.html) and the OFPP Memorandum 
dated January 20, 2006, titled The Federal Acquisition Certification in 
Contracting Program (see http://www.whitehouse.gov/omb/procurement/acq--
wk/fac--contracting--program.pdf).
    ACM means the Acquisition Career Manager, who is the Associate 
Deputy Assistant Secretary for Acquisitions.
    Acquisition Workforce means those VA employees who are classified 
as: GS 1102 contract specialists; GS 1105 purchasing agents; contracting 
officers warranted above the micro-purchase

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threshold; program and project managers and other significant 
acquisition-related positions as otherwise identified by the VA Chief 
Acquisition Officer; contracting officers' technical representatives; 
and contracting officers' representatives. The acquisition workforce may 
also include a limited number of employees that perform significant 
acquisition-related responsibilities, (e.g., employees in the GS-345, 
GS-346, GS-801, GS-1101, GS-1106, GS-1170, GS-2001, GS-2003, and GS-2005 
job series and select program officials).
    Appointment means the delegation of authority to any VA employee to 
enter into, administer, or terminate contracts and to make related 
determinations and findings.
    ATCD means the Acquisition Training and Career Development Division.
    Certificate of Appointment as Contracting Officer is a signed 
certificate on Standard Form 1402 used for the written appointment of 
contracting officers that states the scope, limitation, and term of the 
contracting officer's authority.
    CLP means continuous learning point, as provided in OFPP Policy 
Letter 05-01. One CLP is generally equivalent to one hour of classroom 
training.
    COCB means the Contracting Officers Certification Board, a group of 
VA officials, listed at 801.690-3(c), who evaluate and recommend to the 
DSPE individuals for delegation of contracting authority as Level II 
warrant or Level III warrant (Senior Limited or Unlimited) contracting 
officers.
    COCP means the Contracting Officers Certification Program, VA's 
program established for the selection, appointment, and termination of 
appointment of contracting officers.
    COQS means the Contracting Officer Qualification Statement, a 
document completed by a candidate for a position as contracting officer 
that accompanies the request for contracting authority. The certified 
statement includes information on experience, education, training, and 
pertinent contracting authority information. The COQS is accompanied by 
supporting documentation such as training certificates, copies of prior 
and current warrants, college transcripts, and other relevant 
information.
    Federal Acquisition Certification (see OFPP Policy Letter 05-01, 
paragraph 8) means a certification program developed by the Federal 
Acquisition Institute and OFPP that generally reflects a Government-wide 
standard for education, training, and experience leading to the 
fulfillment of core competencies in acquisition-related disciplines.
    Selection means the appointment of an employee as a contracting 
officer. The selection process shall consider the complexity and dollar 
value of the assigned work, the candidate's experience, training, 
education, business acumen, judgment, character, reputation, and 
knowledge of acquisition policies, rules and regulations.
    Skills Currency means the level of knowledge and abilities that a 
Level I warrant or higher level warrant contracting officer attains as 
the result of participating in a minimum of 80 CLPs of continuing 
education or training every two years. The training is intended to 
ensure that the employee maintains current acquisition knowledge and 
skills, as mandated by OFPP Policy Letter No. 05-01 and the OFPP 
Memorandum dated January 20, 2006, titled The Federal Acquisition 
Certification in Contracting Program.
    Termination means the revocation or rescission of an appointment as 
contracting officer.



Sec. 801.690-2  General.

    (a) The VA COCP applies to all VA programs except for the 
appointment of contracting officers under the Inspector General Act 
(Pub. L. 95-452) and for contracting officers designated in sections 
801.670 through 801.670-5. The COCP also applies to VA officials granted 
authority to enter into sales agreements (see separate guidance under 
VA's Directives Management System).
    (b) A Certificate of Appointment is not required for a contracting 
officer designated in 801.670 who exercises special and limited 
delegations of authority.
    (c) Warrant levels are synonymous with the Federal Acquisition 
Certification in Contracting Program certification levels specified in 
the OFPP Memorandum dated January 20, 2006,

[[Page 158]]

titled ``The Federal Acquisition Certification in Contracting Program.'' 
The COCP is based on the following levels and types of authority:
    (1) Level I warrant. Authority for expenditures at or below the 
simplified acquisition threshold (see FAR 2.101) for open market 
contracts, blanket purchase agreements, basic ordering agreements, and 
delivery/task orders against established contracts (except Federal 
Supply Schedule (FSS) contracts), within the specified geographical 
limits of the contracting officer's warrant. For FSS contracts, Level I 
warrant authority includes authority for expenditures up to the maximum 
order threshold of the FSS contract, within the specified geographical 
limits of the contracting officer's warrant. This level was formally 
titled ``Basic'' and any current Basic Level warrant need not be 
reissued solely to change the title.
    (2) Level II warrant. Authority for expenditures at or below 
$5,000,000 or as stated on Standard Form 1402 for open market contracts, 
blanket purchase agreements, basic ordering agreements, and delivery/
task orders against established contracts, within the specified 
geographic limits of the contracting officer's warrant. This level was 
formally titled ``Intermediate'' and any current Intermediate Level 
warrant need not be reissued solely to change the title.
    (3) Level III (Senior Limited) warrant. Authority for expenditures 
at or below the dollar threshold and within the geographical limits 
specified on the contracting officer's warrant, Standard Form 1402. This 
level was formally titled ``Senior Limited'' and any current Senior 
Limited Level warrant need not be reissued solely to change the title.
    (4) Level III (Senior Unlimited) warrant. Authority granted to VA's 
contracting officers in contracting activities (e.g., the VA National 
Acquisition Center, Hines, IL, and Acquisition Operations Service, VA 
Central Office, Washington, DC) that are charged with meeting 
Department-wide acquisition needs of VA and its customers. The authority 
is for expenditures at any dollar level without geographical 
restriction. This level was formally titled ``Senior Unlimited'' and any 
current Senior Unlimited Level warrant need not be reissued solely to 
change the title.
    (5) Multi-VISN. Authority at the Level II warrant and Level III 
(Senior Limited) warrant levels, granted by the DSPE, that permits 
procurement consolidations among Veterans Health Administration VISNs, 
Veterans Benefits Administration Area Offices, and other Government 
agencies that exist outside the contracting officer's normally assigned 
geographical area of appointed authority. Multi-VISN authority is 
generally granted to contracting officers for procurement-specific 
requirements or to contracting officers who are members of groups or 
consortiums established for regional contracting initiatives.
    (d) Micro-purchase Level. Micro-purchase Level authority, not to 
exceed the micro-purchase threshold (currently $3,000) ($2,500 for 
acquisition of services subject to the Service Contract Act, and $2,000 
for acquisition of construction subject to the Davis Bacon Act) (see FAR 
2.101), is separately addressed under VA's purchase card program. Under 
that program, the HCA may delegate authority to a VA employee as a 
purchase card holder through the issuance of VA Form 0242.



Sec. 801.690-3  Responsibilities under the COCP.

    (a) DSPE. The DSPE is responsible for the following:
    (1) Administering and overseeing the COCP;
    (2) Appointing and terminating Level II warrant and Level III 
(Senior Limited and Unlimited) warrant contracting officers;
    (3) Establishing and developing additional agency-specific training; 
and
    (4) Developing and implementing policy, procedures, and guidance for 
VA's acquisition program.
    (b) The Chief, Acquisition Program Management Division. The Chief, 
Acquisition Program Management Division, serves as the Executive 
Secretary to the COCB and is responsible for the following:
    (1) Coordinating requests for contracting authority with the COCB;

[[Page 159]]

    (2) Proceeding accordingly with appropriate action to carry out the 
decisions of the DSPE and the COCB;
    (3) Maintaining individual records on the appointment and 
termination of appointment of contracting officers. Records on 
contracting officers include HCA certifications and qualification 
statements, Certificates of Appointment, and other supporting 
documentation used to grant authority; and
    (4) Ensuring appropriate and timely disposition of records through 
the Office of Acquisition and Materiel Management's Records Control 
Officer.
    (c) The COCB. (1) The Director, Acquisition Resources Service, will 
chair the COCB.
    (2) COCB membership consists of:
    (i) The Chief, Acquisition Program Management Division; and
    (ii) The Chief, Acquisition Training and Career Development Division 
(ATCD).
    (d) HCAs. HCAs are responsible for the following:
    (1) Implementing and maintaining an effective and efficient program 
for the procurement of personal property and nonpersonal services 
required by the activity to which the HCA is assigned;
    (2) Establishing adequate controls to ensure compliance with 
applicable laws and regulations;
    (3) Appointing or terminating the appointment of contracting 
officers at the Micro-purchase Level and Level I warrant level within 
their assigned activity;
    (4) Establishing procedures and maintaining records for the 
appointment and termination of appointment of purchase card holders at 
the Micro-purchase Level and Level I warrant contracting officers. 
Records maintained on contracting officers shall include the contracting 
authority, certification and qualification statements;
    (5) Recommending to the DSPE the appointment or termination of 
appointment of contracting officers at the Level II warrant and Level 
III (Senior Limited or Unlimited) warrant levels of authority, 
certifying the candidate's qualifications, and justifying the 
organizational need;
    (6) Ensuring that all GS 1102 contract specialists and other 
contracting officers meet the minimum core training and continuing 
education requirements; and
    (7) Certifying that the assigned acquisition workforce meets the 
minimum training, education, and skills currency requirements prescribed 
by OFPP and the DSPE.
    (e) VA Acquisition Workforce. All employees identified as members of 
VA's acquisition workforce (see 801.690-1) are responsible for 
maintaining records that include certificates of acquisition training, 
continuing education, college transcripts, work experience, and other 
supporting documentation needed to substantiate successful completion of 
all warrant requirements. These employees shall enroll in the 
Acquisition Career Management Information System (ACMIS), the data 
system that serves as the repository of required information on VA's 
acquisition workforce.



Sec. 801.690-4  Selection.

    (a) The HCA may appoint Level I warrant contracting officers or 
submit written requests to the DSPE for appointment of Level II warrant 
or Level III (Senior Limited or Unlimited) warrant contracting officers. 
A VA official one level above the HCA may submit a written request to 
the DSPE for the appointment of an HCA as a contracting officer.
    (b) Appointment can only be requested in those circumstances where 
it can be demonstrated that a valid organizational need exists. In 
making this assessment and justification, the HCA will consider the 
complexity of the work, volume of actions, organizational structure, and 
human resource management actions and forecasts, such as rates of 
retirement, reassignment, and retention.
    (c) The request shall consist of the following:
    (1) Justification for requesting contracting authority to be 
granted;
    (2) Certification that the candidate's experience and training meet 
the established minimum qualifications for the requested contracting 
authority;
    (3) Certification that the candidate has a satisfactory-or-above 
performance rating;
    (4) Certification that the candidate maintains high standards of 
conduct

[[Page 160]]

and avoids apparent or actual conflicts of interest, and
    (5) Certification that the candidate has appropriate working 
knowledge of the FAR, VAAR, and other applicable laws, regulations, 
policies and procedures.
    (d) The accompanied COQS shall include the following information:
    (1) Candidate's name, position title, series, grade, and location;
    (2) Candidate's relevant acquisition or business-related experience 
that reflects the required number of years of progressive work 
assignments leading to broader technical abilities;
    (3) Education background, including number of acquisition or 
business-related college credits;
    (4) List of core training requirements or equivalent courses that 
have been successfully completed;
    (5) List of continuing education requirements successfully completed 
within the last two years;
    (6) List of current and prior warrant authorities, limitations, and 
information on termination and cause for termination;
    (7) List of other acquisition related activities or memberships;
    (8) Certification that the statement is accurate and complete to the 
best of the candidate's knowledge; and
    (9) Attached copies of acquisition or business-related training 
certificates, course certificates, and diplomas, transcripts, or degrees 
from accredited colleges or universities.



Sec. 801.690-5  Requirements for contracting authority.

    (a) Effective January 1, 2007, no individual, regardless of job 
series, may be issued a new contracting officer warrant above the micro-
purchase threshold unless the individual meets the requirements for 
Federal Acquisition Certification (Certification) for the applicable 
Level I, II, or III warrant level as specified in OFPP Policy Letter 05-
01 and the OFPP Memorandum dated January 20, 2006, titled ``the Federal 
Acquisition Certification in Contracting Program.'' A new contracting 
officer warrant is defined in OFPP Policy Letter 05-01 as a warrant 
issued for the first time at a department or agency. For contracting 
officers warranted before January 1, 2007, certification will not be 
required to retain their existing warrants, but will be required before 
higher level warrants can be issued. Certification includes minimum 
requirements for education, training, and experience. A candidate for a 
warrant must have at least a satisfactory-or-above performance rating 
during the most recent performance period.
    (b) For contracting officer warrants issued prior to January 1, 
2007, the minimum requirements for qualifying as a contracting officer 
previously specified in VA regulation and other internal VA guidance 
shall apply.
    (c) Multi-VISN. The HCA shall obtain written or e-mail concurrence 
from the HCAs of the other affected VISNs or Area Offices when 
requesting Multi-VISN contracting authority.
    (d) Training. (1) Contracting officers and non-warranted contract 
specialists shall complete the required coursework and on-the-job 
training needed to possess the established competencies listed in OFPP's 
Federal Acquisition Institute Contract Specialist Training Blueprints 
(http://www.fai.gov/policies/contract.htm).
    (2) The Chief, ATCD, oversees the ATP.
    (3) Training course equivalency will be determined and approved by 
the Chief, ATCD. Candidates should contact the Chief, ATCD, for an 
equivalency determination and must furnish any information or evidence 
necessary to support the request. Appeals of decisions may be made to 
the VA ACM and the decisions of the ACM shall be final.
    (e) Skills Currency. (1) Contracting officers and non-warranted 
contract specialists who have completed the core training requirements 
shall obtain a minimum of 80 CLPs of continuing education or training 
every two fiscal years to stay abreast of current acquisition knowledge 
and skills as mandated by OFPP. The HCA (for Level I warrant contracting 
officers) and the Chief, ATCD (for Level II warrant and Level III 
warrant contracting officers), shall make written determinations every 
October 1 for each warranted contracting officer on whether the required 
CLPs, as specified in OFPP guidance, were completed during the two prior 
fiscal years. The HCA shall

[[Page 161]]

assign CLP values to training taken by Level I warrant contracting 
officers for training that does not have pre-assigned CLP or continuing 
education unit (CEU) values assigned to the training by the provider. 
The Chief, ATCD, shall assign CLP values to training taken by Level II 
warrant and Level III warrant contracting officers for training that 
does not have pre-assigned CLP or CEU values assigned to the training by 
the provider. Values shall be assigned based on guidance provided by 
OFPP and the combined efforts of the Federal Acquisition Institute and 
the Defense Acquisition University. Questions regarding the CLP or CEU 
values assigned to training shall be resolved by the ACM.
    (2) The Chief, ATCD, is responsible for the management of the ACEP, 
the program that assists contracting officers and contract specialists 
to meet the training requirements.
    (3) An expiring warrant will not be re-issued if the contracting 
officer has not met the continuing education or training requirement.
    (f) Education. (1) The 24 business-related college credits shall be 
in any combination of the following fields of study at an accredited 
college or university: accounting, business, finance, law, contracts, 
purchasing, economics, industrial management, marketing, quantitative 
methods, or organization and management.
    (2) The HCA will make the final determination whether a course is 
accepted as business-related for the purpose of granting Level I warrant 
authority. The Chief, ATCD, will make the final determination whether a 
course is accepted as business-related for the purpose of granting Level 
II warrant or Level III warrant contracting authority.
    (3) American Council on Education (ACE) credits are not considered 
as college credits until they are converted and included on a transcript 
from an accredited college or university.
    (g) Grandfather provision for the education requirement. (1) VA 
contracting officers, regardless of grade level, who currently hold 
Level I, Level II, or Level III (Senior Limited or Unlimited) warrants 
are considered as having met the Experience, Education, and Training 
requirements for their respective warrant levels. This includes 
transfers or laterals to other VA contracting activities with similar 
geographical restrictions. Contracting officers who are promoted up to a 
GS-12 can maintain their current warrant level authority.
    (2) This Grandfather provision does not cover new VA employees, 
current VA employees who are not warranted, former VA employees who held 
contracting authority at their previous Federal Government agencies or 
VA positions, or VA employees whose warrants have been rescinded or have 
expired. VA contracting officers who are promoted to GS 13-and-above 
will no longer be covered by this Grandfather provision and, therefore, 
must meet the current Experience, Education, and Training requirements 
for the specific warrant authority that they currently hold or to which 
they wish to be appointed. Contracting officers requesting a higher 
level warrant (e.g., from Level I warrant to Level II warrant or from 
Level III (Senior Limited) warrant to Level III (Senior Unlimited) 
warrant) must also meet the current Experience, Education, and Training 
requirement for the specific warrant authority requested.
    (3) This Grandfather provision for retaining a contracting officer's 
current warrant authority is voided if the contracting officer does not 
fully meet the minimum Skills Currency requirement prior to warrant 
expiration or when the warrant authority is suspended or revoked. The 
contracting officer will then need to meet all of the current warrant 
prerequisites before a new warrant can be issued or before the suspended 
or revoked warrant can be reinstated.
    (h) The training requirements for contracting officers whose 
delegated authority is limited to the acquisition of transportation 
services, as provided in part 102-117 of title 41 Code of Federal 
Regulations, the Federal Management Regulation, shall be as specified 
therein.



Sec. 801.690-6  Appointment.

    (a) Only the DSPE (for Level II and Level III (Senior Limited or 
Unlimited)) warrants and the respective HCA (for Level I warrants) may 
sign the

[[Page 162]]

Certificate of Appointment as Contracting Officer. HCAs are authorized 
to grant Micro-purchase Level and Level I warrant contracting authority 
up to the thresholds specified for these authorities at 801.690-2(c). 
The HCA may recommend a candidate to the DSPE for appointment as a Level 
II warrant or Level III warrant contracting officer. Only the DSPE may 
grant Level II warrant, Level III (Senior Limited or Unlimited) warrant, 
and Multi-VISN authority.
    (b) All Certificates of Appointment as Contracting Officers and 
other written documents must clearly state any limitations or 
restrictions on the authority.
    (c) The Privacy Act of 1974 applies to the information collected 
during contracting officer selection and appointment.



Sec. 801.690-7  Termination.

    (a) The DSPE (for all warrant levels) or HCA (for Micro-purchase 
Level and Level I warrants) may revoke or rescind the appointment of a 
contracting officer at any time. HCAs may submit a recommendation to 
revoke or rescind the appointment of a contracting officer's Level II 
warrant or Level III (Senior Limited or Unlimited) warrant to the DSPE. 
Revocation may be based on the following circumstances:
    (1) There is no longer a need for the appointment;
    (2) There has been a personnel action such as a resignation, 
retirement, transfer;
    (3) Unsatisfactory performance;
    (4) Alleged official misconduct pending criminal or administrative 
investigations;
    (5) Failure to meet training or skills currency requirements;
    (6) A contracting officer taking an action that exceeds his or her 
authority;
    (7) Blatant disregard for adhering to acquisition regulations, 
policies and procedures; or
    (8) Situations similar to those in paragraphs (a)(1) through (7) of 
this section that may require remedial action.
    (b) The HCA should discuss a termination of contracting authority 
for cause with the servicing Human Resource Management Office to 
determine the impact, if any, on the contracting officer's continued 
employment.
    (c) All changes in the status (e.g., departure, name, position, or 
grade change) of a micro-purchase cardholder or Level I warrant holder 
shall be reported in writing by the individual's supervisor to the HCA 
within five workdays of occurrence. All changes in the status of a Level 
II warrant or Level III (Senior Limited or Unlimited) warrant holder 
shall be reported in writing by the HCA to the DSPE within five workdays 
of occurrence. Level II warrants or Level III (Senior Limited or 
Unlimited) warrants that are terminated, rescinded, or superseded should 
be returned to the Director, Acquisition Resources Service (049A5), 
citing the exact reason for the termination, rescission, or 
supersession.



Sec. 801.690-8  Interim appointment provisions.

    (a) To ensure availability of procurement support, an interim 
appointment may be granted for a limited period of time when a candidate 
does not fully meet the minimum qualifications for Experience, 
Education, or successful completion of all acquisition Training 
requirements in previous VA regulations or VA internal guidance, if 
applicable, or as provided in the OFPP Memorandum dated January 20, 
2006, titled ``the Federal Acquisition Certification in Contracting 
Program.'' All interim appointments made after January 1, 2007, for 
individuals who do not meet the minimum Experience, Education, or 
Training requirements for Levels I through III warrants shall be signed 
by the SPE or, if so delegated, the ACM, without power to redelegate, as 
provided in the OFPP Memorandum dated January 20, 2006, titled ``the 
Federal Acquisition Certification in Contracting Program.''
    (1) In a request for an interim appointment, the HCA must include 
the information required by 801.690-4 on the candidate's training, 
experience, performance, and education, and a justification for the 
interim appointment.
    (2) The HCA must ensure that the candidate with interim appointment

[[Page 163]]

meets the minimum Experience, Education, and Training requirements 
within the time specified on the warrant.
    (3) A contracting officer with interim appointment should 
successfully complete all remaining required courses or equivalent 
courses within the time specified on the warrant.
    (b) At the HCA's written request, a permanent warrant may be issued 
during the interim appointment period when the contracting officer has 
satisfactorily met the requirements. The appropriate documentation 
(copies of course certificates) must be submitted with the HCA's 
request.
    (c) An interim appointment may be appropriate for instances such as 
organizational changes or sudden, extreme, and unexpected increases in 
workload complexity and/or volume.
    (d) Interim appointments will not be granted under the following 
circumstances:
    (1) To a candidate who is warranted but does not meet the Education 
or Training requirements for higher level (e.g., from Level I warrant to 
Level II warrant) contracting authority (unless waived by the SPE);
    (2) To a candidate who does not have a current record of 
satisfactory-or-above performance; or
    (3) To a contracting officer whose authority has expired and who has 
not met the continuing education requirement during the two preceding 
years.
    (e) Generally, an interim appointment may not exceed one year.



Sec. 801.690-9  Distribution of Certificates of Appointment.

    (a) The DSPE or HCA will issue an original Certificate of 
Appointment as Contracting Officer to the appointed candidate, who must 
display the Certificate at his or her duty station.
    (b) The HCA shall file a copy of the warrant in the delegation of 
authority file.
    (c) The contracting officer must furnish a copy to the respective 
fiscal activity.
    (d) Each Certificate will be serially numbered, reflecting the 
facility number, the year of issuance (e.g., facility number--year of 
issuance (2 digits)--sequential number, 560-04-10), and have an 
effective and expiration date.



Sec. 801.695  VA's Appointment of HCAs Program.



Sec. 801.695-1  Policy.

    (a) VA's policy is to have a minimum number of HCAs. Generally, 
there will be one HCA per VISN, other major VA organizational element, 
or major acquisition organization. The authority vested in the Secretary 
to select, appoint, and terminate HCAs is delegated to the SPE and is 
further delegated from the SPE to the DSPE.
    (b) Under the FAR at 1.601(a) and 2.101, an HCA is a senior level 
position. The official who occupies this position should have the 
education, training, and experience necessary to make the decisions 
required of an HCA.
    (c) Except as provided in the FAR, an HCA may delegate his or her 
authority to other individuals within the HCA's acquisition activity. 
Such delegations must be in writing and must set forth the specific 
limitations on the designee's authority. The delegation may include 
authority to appoint a contracting officer at the Micro-purchase Level 
or the Level I warrant levels.



Sec. 801.695-2  Procedures for appointment of HCAs.

    An HCA must be appointed in writing by the DSPE and in accordance 
with internal VA policy. The written delegation must state any 
limitation on the HCA's authority, other than a limitation contained in 
an applicable law or regulation.



Sec. 801.695-3  Authority of the HCA.

    (a) The HCA has overall responsibility for managing the procurement 
program assigned to the activity.
    (b) The HCA's level of contracting authority, if any, shall be 
specified in the HCA's appointment letter.
    (c) The HCA has the authority to appoint and terminate contracting 
officers with authority to conduct procurements of up to and including 
the simplified acquisition threshold or the maximum order threshold or 
limitation for orders placed against Federal

[[Page 164]]

Supply Schedule contracts, and to terminate such appointments (Micro-
purchase Level and Level I warrant appointments).

                 PART 802_DEFINITIONS OF WORDS AND TERMS

                        Subpart 802.1_Definitions

Sec.

Sec. 802.101 Definitions.

    Authority: 38 U.S.C. 8127 and 8128; 40 U.S.C. 121(c) and (d); and 48 
CFR 1.301-1.304.

    Source: 73 FR 2717, Jan. 15, 2008, unless otherwise noted.

                        Subpart 802.1_Definitions



Sec. 802.101  Definitions.

    A/E means architect/engineer.
    Chief Acquisition Officer means the Assistant Secretary for 
Management.
    COTR means Contracting Officer's Technical Representative or 
Contracting Officer's Representative.
    D&S Committee means the VA Debarment and Suspension Committee, a 
committee consisting of the Director, Acquisition Resources Service 
(chair), and representatives of the Office of Management, Office of 
Inspector General, and the program office to which the particular 
debarment or suspension case relates. A representative from OGC will 
serve as legal counsel to the D & S Committee.
    Debarring official means the DSPE, who is also the Associate Deputy 
Assistant Secretary for Acquisitions. Authority to impose debarment is 
delegated to the SPE and is further delegated to the DSPE.
    DSPE means the Deputy Senior Procurement Executive, who is also the 
Associate Deputy Assistant Secretary for Acquisitions. The DSPE must be 
career member of the Senior Executive Service.
    FAR means the Federal Acquisition Regulation.
    GAO means the Government Accountability Office.
    HCA means the Head of the Contracting Activity, an individual 
appointed in writing by the DSPE under VA's Appointment of HCAs Program 
(see 801.695).
    OGC means the Office of the General Counsel.
    Resident Engineer has the same meaning as contracting officer's 
technical representative or contacting officer's representative (see 
852.270-1).
    Service-disabled veteran-owned small business concern (SDVOSB) has 
the same meaning as defined in the Federal Acquisition Regulation (FAR) 
part 2.101, except for acquisitions authorized by 813.106 and subpart 
819.70. These businesses must then be listed as verified on the Vendor 
Information Pages (VIP) database at http://www.vetbiz.gov. In addition, 
some businesses may be owned and controlled by a surviving spouse.
    Small business concern has the same meaning as defined in FAR 2.101.
    SPE means the Senior Procurement Executive who is also the Deputy 
Assistant Secretary for Acquisition and Materiel Management. The SPE is 
responsible for the management direction of the VA acquisition system. 
The SPE may further delegate authority to the DSPE.
    Surviving spouse means an individual who has been listed in the 
Department of Veterans Affairs' (VA) Veterans Benefits Administration 
(VBA) database of veterans and family members. To be eligible for 
inclusion in the VetBiz.gov VIP database, the following conditions must 
apply:
    (1) If the death of the veteran causes the small business concern to 
be less than 51 percent owned by one or more service-disabled veterans, 
the surviving spouse of such veteran who acquires ownership rights in 
such small business shall, for the period described below, be treated as 
if the surviving spouse were that veteran for the purpose of maintaining 
the status of the small business concern as a service-disabled veteran-
owned small business.
    (2) The period referred to above is the period beginning on the date 
on which the veteran dies and ending on the earliest of the following 
dates:
    (i) The date on which the surviving spouse remarries;
    (ii) The date on which the surviving spouse relinquishes an 
ownership interest in the small business concern;
    (iii) The date that is 10 years after the date of the veteran's 
death; or

[[Page 165]]

    (iv) The date on which the business concern is no longer small under 
federal small business size standards.
    (3) The veteran must have had a 100 percent service-connected 
disability rating or the veteran died as a direct result of a service-
connected disability.
    Suspending official means the DSPE. Authority to impose suspension 
is delegated to the SPE and is further delegated to the DSPE.
    VA means the Department of Veterans Affairs.
    VAAR means the Department of Veterans Affairs Acquisition 
Regulation.
    Vendor Information Pages (VIP) means the VetBiz.gov Vendor 
Information Pages database at http://www.vetbiz.gov.
    Veteran-owned small business concern (VOSB) has the same meaning as 
defined in FAR 2.101, except for acquisitions authorized by 813.106 and 
819.70. These businesses must then be listed as verified in the 
VetBiz.gov VIP database.
    VISN means Veterans Integrated Service Network, an integrated 
network of VA facilities that are focused on pooling and aligning 
resources to best meet local needs in the most cost-effective manner and 
provide greater access to care.

[73 FR 2717, Jan. 15, 2008, as amended at 74 FR 64629, Dec. 8, 2009]

 PART 803_IMPROPER BUSINESS PRACTICES AND PERSONAL CONFLICTS OF INTEREST

                        Subpart 803.1_Safeguards

Sec.

Sec. 803.101 Standards of conduct.

Sec. 803.101-3 Department regulations.

Sec. 803.104 Procurement integrity.

Sec. 803.104-7 Violations or possible violations.

       Subpart 803.2_Contractor Gratuities to Government Personnel


Sec. 803.203 Reporting suspected violations of the Gratuities clause.

Sec. 803.204 Treatment of violations.

         Subpart 803.3_Reports of Suspected Antitrust Violations


Sec. 803.303 Reporting suspected antitrust violations.

                      Subpart 803.4_Contingent Fees


Sec. 803.405 Misrepresentations or violations of the Covenant Against 
          Contingent Fees.

             Subpart 803.5_Other Improper Business Practices


Sec. 803.502 Subcontractor kickbacks.

Sec. 803.570 Commercial advertising.

Sec. 803.570-1 Policy.

Sec. 803.570-2 Contract clause.

Subpart 803.6_Contracts with Government Employees or Organizations Owned 
                          or Controlled by Them


Sec. 803.602 Exceptions.

             Subpart 803.7_Voiding and Rescinding Contracts


Sec. 803.703 Authority.

Sec. 803.705 Procedures.

 Subpart 803.8_Limitation on the Payment of Funds to Influence Federal 
                              Transactions


Sec. 803.804 Policy.

Sec. 803.806 Processing suspected violations.

  Subpart 803.70_Contractor Responsibility To Avoid Improper Business 
                                Practices


Sec. 803.7000 Display of the VA Hotline poster.

Sec. 803.7001 Contract clause.

    Authority: 38 U.S.C. 501; 40 U.S.C. 121(c); and 48 CFR 1.301-1.304.

    Source: 73 FR 2717, Jan. 15, 2008, unless otherwise noted.

                        Subpart 803.1_Safeguards



Sec. 803.101  Standards of conduct.



Sec. 803.101-3  Department regulations.

    (a) Part 0 of 38 Code of Federal Regulations (CFR) states the 
standards of conduct for all VA employees, including contracting 
officials.
    (b) Subpart B of 38 CFR part 0 states the employee financial 
disclosure requirements.



Sec. 803.104  Procurement integrity.



Sec. 803.104-7  Violations or possible violations.

    (a) Contracting officers must forward the information required by 
FAR 3.104-7(a)(1) to the HCA. In consultation with

[[Page 166]]

OGC, the HCA may make the determination and concurrence specified in FAR 
3.104-7(a)(1).
    (b) Upon receipt of information describing a violation or possible 
violation of subsections 27(a), (b), (c), or (d) of the Office of 
Federal Procurement Policy Act of 1974 (see FAR 3.104-3), the HCA will 
take action in accordance with FAR 3.104-7(b). The HCA must also report 
violations or possible violations to the VA Office of the Inspector 
General.
    (c) The authority to make the determinations specified in FAR 3.104-
7(b)(5) and 3.104-7(d)(2)(ii)(B) is delegated to the SPE and is further 
delegated to the DSPE.
    (d) As provided in FAR 3.104-7(f), the HCA may authorize a 
contracting officer to award a contract after notifying the DSPE of the 
circumstances warranting such an award.

       Subpart 803.2_Contractor Gratuities to Government Personnel



Sec. 803.203  Reporting suspected violations of the Gratuities clause.

    (a) Any VA employee must report a suspected violation of the 
Gratuities clause to the contracting officer or a higher level VA 
official.
    (b) The report must identify the contractor and the personnel 
involved, provide a summary of the pertinent evidence and circumstances 
that indicate a violation, and include any other available supporting 
documentation.
    (c) The contracting officer or higher level official must supplement 
the file with appropriate information and promptly forward the report to 
the DSPE, with copies to the VA Office of the Inspector General and the 
Assistant Secretary for Management.



Sec. 803.204  Treatment of violations.

    In providing the notice and hearing required by FAR 3.204, the SPE 
may make the determinations required by FAR 3.204. This authority is 
further delegated to the DSPE. The DSPE shall use the following 
procedures to determine whether or not a violation of the Gratuities 
clause has occurred:
    (a) Upon receipt of an allegation or evidence of a violation of the 
Gratuities clause, the DSPE shall refer the matter to the D&S Committee 
to conduct a fact-finding. Upon completion of the fact-finding, the D&S 
Committee shall present the facts and recommendations for further action 
to the DSPE.
    (b) If the DSPE finds a basis for further action, the D&S Committee 
shall prepare a notice under FAR 3.204 for signature of the DSPE. If 
suspension or debarment is also being considered, the D&S Committee 
shall also follow the procedures contained in 809.4. The signed notice 
will be sent to the last known address of the contractor, the 
contractor's counsel, or agent for service of process, by certified 
mail, return receipt requested, or any other method that provides signed 
evidence of receipt. In the case of a business, the D&S Committee may 
send the notice to any partner, principal, officer, director, owner or 
co-owner, or joint venture.
    (c) If VA does not receive a reply from the contractor within 45 
calendar days of sending the notice, the D&S Committee will prepare a 
recommendation and refer the case to the DSPE for a decision on whether 
or not to take further action under FAR 3.204.
    (d) If VA receives a reply from the contractor within 45 calendar 
days of sending the notice, the D&S Committee must consider the 
information in the reply before the D&S Committee makes its 
recommendation to the DSPE.
    (e) The D&S Committee, upon the request of the contractor, must, as 
soon as practicable, allow the contractor an opportunity to appear 
before the D&S Committee, in person or through a representative, to 
present information or argument. The contractor may supplement the oral 
presentation with written information and argument. The proceeding will 
be conducted in an informal manner and without requirement for a 
transcript. The D&S Committee shall prepare a report of the presentation 
for submission to the DSPE and must consider the information presented 
when making its recommendation to the DSPE.
    (f) If the D&S Committee finds that the contractor's submission in 
opposition to further action under FAR 3.204

[[Page 167]]

raises a genuine dispute over facts material to the action, then the D&S 
Committee shall submit to the DSPE the information establishing the 
dispute of material facts. If the DSPE agrees that there is a genuine 
dispute of material facts, the DSPE shall refer the dispute to a 
designee for resolution under 809.470. The DSPE may reject the findings 
of the fact-finding official only if the findings are clearly erroneous 
or arbitrary and capricious.
    (g) If there are no disputes over material facts or if all disputes 
over material facts have been resolved under 809.470, the DSPE will make 
a decision on the basis of all information available, including findings 
of facts and oral or written arguments presented or submitted to the D & 
S Committee by the contractor. The DSPE should consider any mitigating 
factors, such as those listed at FAR 9.406-1 and 809.406-1, prior to 
making a final decision.

         Subpart 803.3_Reports of Suspected Antitrust Violations



Sec. 803.303  Reporting suspected antitrust violations.

    (a) Any VA employee who suspects or has evidence of possible 
antitrust violations must report the suspected violations, in accordance 
with FAR 3.303, to the VA Office of the Inspector General and to the 
Assistant Secretary for Management for review and submission to OGC.
    (b) Either the General Counsel or the Inspector General will 
determine whether to submit the case to the U.S. Attorney General.

                      Subpart 803.4_Contingent Fees



Sec. 803.405  Misrepresentations or violations of the Covenant Against 
          Contingent Fees.

    (a) A VA employee who suspects or has evidence of an attempted or 
actual exercise of improper influence, misrepresentation of a contingent 
fee arrangement, or any other violation of the Covenant Against 
Contingent Fees must report the matter to the contracting officer or to 
the VA Office of Inspector General.
    (b) In addition to the requirement in paragraph (a) of this section, 
a contracting officer must report a suspected or actual 
misrepresentation or violation to the DSPE.
    (c) Before taking any administrative action under FAR 3.405, a 
contracting officer must consult with his or her Regional Counsel. A 
contracting officer in the Central Office must consult with OGC.
    (d) Contracting officers shall route any referrals of suspected 
fraudulent or criminal matters to the Department of Justice under FAR 
3.405(b)(4) through OGC or the VA Office of the Inspector General, with 
a copy to the Assistant Secretary for Management. The General Counsel or 
the Inspector General will determine whether to forward the referral to 
the Department of Justice.

             Subpart 803.5_Other Improper Business Practices



Sec. 803.502  Subcontractor kickbacks.

    A VA employee who suspects a violation of the Anti-kickback Act must 
report the suspected violation to OGC for review.



Sec. 803.570  Commercial advertising.



Sec. 803.570-1  Policy.

    It is VA policy that contractors will not advertise the award of 
contracts or refer to VA contracts in contractors' commercial 
advertising in such a manner as to state or imply that VA endorses a 
product, project, or commercial line of endeavor. The intent of this 
policy is to preclude the appearance of bias toward any product or 
service.



Sec. 803.570-2  Contract clause.

    The contracting officer shall insert the clause at 852.203-70, 
Commercial advertising, in solicitations and contracts expected to equal 
or exceed the micro-purchase threshold.

[[Page 168]]

Subpart 803.6_Contracts With Government Employees or Organizations Owned 
                          or Controlled by Them



Sec. 803.602  Exceptions.

    The authority to authorize an exception to the policy in FAR 3.601 
is delegated to the SPE and is further delegated to the DSPE.

             Subpart 803.7_Voiding and Rescinding Contracts



Sec. 803.703  Authority.

    The authority to make determinations under FAR Subpart 3.7, Voiding 
and Rescinding Contracts, is delegated to the SPE and is further 
delegated to the DSPE.



Sec. 803.705  Procedures.

    In making a determination to void or rescind a contract, the DSPE 
must follow the procedures of FAR 3.705 and the following:
    (a) Upon receipt of an allegation or evidence of situations meeting 
the provisions of FAR 3.700, the DSPE shall refer the matter to the D&S 
Committee to conduct a finding of facts. Upon completion of the fact-
finding, the D&S Committee shall present the facts and recommendations 
for further action to the DSPE.
    (b) If the DSPE finds a basis for further action, the D&S Committee 
shall prepare a notice under FAR 3.705 for signature of the DSPE. If 
suspension or debarment is being considered, the D&S Committee shall 
also follow the procedures of 809.4. The signed notice will be sent to 
the last known address of the contractor, the contractor's counsel, or 
registered agent, by certified mail, return receipt requested. In the 
case of a business, the D&S Committee may send the notice to any 
partner, principal, officer, director, owner or co-owner, or joint 
venture.
    (c) If VA does not receive a reply from the contractor within 30 
calendar days of receipt of the notice by the addressee, the D&S 
Committee will prepare a recommendation and refer the case to the DSPE 
for a decision on whether or not to take further action under FAR 3.705.
    (d) If VA receives a reply from the contractor within 30 calendar 
days of receipt of the notice, the D&S Committee must consider the 
information in the reply before the D&S Committee makes its 
recommendation to the DSPE.
    (e) The D&S Committee, upon the request of the contractor, must, as 
soon as practicable, allow the contractor an opportunity to appear 
before the D&S Committee, in person or through a representative, to 
present information or argument. The contractor may supplement the oral 
presentation with written information and argument. The proceeding will 
be conducted in an informal manner and without requirement for a 
transcript. The D&S Committee shall prepare a report of the presentation 
for submission to the DSPE.
    (f) If the D&S Committee finds that the contractor's submission in 
opposition to further action under FAR 3.705 raises a genuine dispute 
over facts material to the action, then the D&S Committee shall submit 
to the DSPE the information establishing the dispute of material facts. 
If the DSPE agrees that there is a genuine dispute of material facts, 
the DSPE shall refer the dispute to a designee for resolution under 
809.470. The DSPE may reject the findings of the fact-finding official 
only if the findings are clearly erroneous or arbitrary and capricious.
    (g) If there are no disputes over material facts or if all disputes 
over material facts have been resolved under 809.470, the DSPE will make 
a decision on the basis of all information available, including findings 
of facts and oral or written arguments presented or submitted to the D&S 
Committee by the contractor.

 Subpart 803.8_Limitation on the Payment of Funds to Influence Federal 
                              Transactions



Sec. 803.804  Policy.

    A contracting officer must forward a copy of all contractor 
disclosures furnished under the clause at FAR 52.203-12, Limitations on 
Payments to Influence Certain Federal Transactions, to the Director, 
Acquisition Resources

[[Page 169]]

Service, for subsequent submission by the Secretary to Congress.



Sec. 803.806  Processing suspected violations.

    A VA employee must report suspected violations of 31 U.S.C. 1352, 
Limitation on Use of Appropriated Funds to Influence Certain Federal 
Contracting and Financial Transactions, to the Assistant Secretary for 
Management and the VA Office of the Inspector General.

  Subpart 803.70_Contractor Responsibility to Avoid Improper Business 
                                Practices



Sec. 803.7000  Display of the VA Hotline poster.

    (a) Under the circumstances described in paragraph (b) of this 
section, a contractor must display prominently a VA Hotline poster 
prepared by the VA Office of Inspector General in a common work area 
within a business segment performing work under a VA contract.
    (b) A contractor must comply with paragraph (a) of this section when 
all of the following apply:
    (1) The contractor is awarded a VA contract for $500,000 or more for 
supplies or services, or $3 million or more for construction.
    (2) The contractor has not established an internal reporting 
mechanism and program, such as a hotline, by which employees may report 
suspected instances of improper conduct, and instructions that encourage 
employees to make such reports.



Sec. 803.7001  Contract clause.

    The contracting officer shall insert the clause at 852.203-71, 
Display of Department of Veterans Affairs Hotline poster, in 
solicitations and contracts expected to equal or exceed the dollar 
thresholds established in 803.7000.

                     PART 804_ADMINISTRATIVE MATTERS

                    Subpart 804.1_Contract Execution

Sec.

Sec. 804.101 Contracting officer's signature.

Sec. 804.1102 Vendor Information Pages (VIP) Database.

    Authority: 38 U.S.C. 8127 and 8128; 40 U.S.C. 121(c) and (d); and 48 
CFR 1.301-1.304.

    Source: 73 FR 2717, Jan. 15, 2008, unless otherwise noted.

                    Subpart 804.1_Contract Execution



Sec. 804.101  Contracting officer's signature.

    (a) If a contracting officer's name and title has been typed, 
stamped, or printed on the contract, and that contracting officer is not 
available to sign the contract, another contracting officer, as 
specified in 801.602, may sign the contract.
    (b) The contracting officer who signs the contract must have 
contracting authority to cover the contract to be signed and must 
annotate his or her name and title below his or her signature.



Sec. 804.1102  Vendor Information Pages (VIP) Database.

    Prior to January 1, 2012, all VOSBs and SDVOSBs must be listed in 
the VIP database, available at http://www.VetBiz.gov, and also must be 
registered in the Central Contractor Registration (CCR) (see 48 CFR 
subpart 4.11) to receive contract awards under VA's Veteran-owned Small 
Business prime contracting and subcontracting opportunities program. 
After December 31, 2011, all VOSBs, including SDVOSBs, must be listed as 
verified in the VIP database, and also must be registered in the CCR to 
be eligible to participate in order to receive new contract awards under 
this program.

[74 FR 64630, Dec. 8, 2009]

[[Page 170]]

            SUBCHAPTER B_COMPETITION AND ACQUISITION PLANNING

                  PART 805_PUBLICIZING CONTRACT ACTIONS

           Subpart 805.2_Synopses of Proposed Contract Actions

Sec.

Sec. 805.202 Exceptions.

Sec. 805.205 Special situations.

Sec. 805.207 Preparation and transmittal of synopses.

    Authority: 40 U.S.C. 121(c) and 48 CFR 1.301-1.304.

    Source: 73 FR 2717, Jan. 15, 2008, unless otherwise noted.

           Subpart 805.2_Synopses of Proposed Contract Actions



Sec. 805.202  Exceptions.

    In accordance with FAR 5.202, the contract actions in 806.302-5 do 
not require synopsizing.



Sec. 805.205  Special situations.

    (a) A contracting officer may procure paid advertising in a daily 
newspaper circulated in the local area to publicize a proposed 
procurement of architectural and engineering (A/E) services not expected 
to exceed $10,000. See FAR 5.101(b)(4)(i) and 5.502(a).
    (b) A contracting officer may procure paid advertising in a daily 
newspaper circulated in the local area or in professional journals to 
publicize a proposed procurement of professional services (e.g., scarce 
medical specialist services, health-care resources, advisory and 
assistance services). See FAR 5.101(b)(4)(i) and 5.502(a).



Sec. 805.207  Preparation and transmittal of synopses.

    (a) When an A/E evaluation board is ready to advertise for A/E 
services, the board must establish the geographic area within which it 
will consider A/E firms (including joint ventures).
    (b) The geographic area must be large enough to assure selection of 
three to five firms highly qualified for the particular project 
involved, but not so large as to make the evaluation process unduly 
burdensome.

                    PART 806_COMPETITION REQUIREMENTS

           Subpart 806.3_Other Than Full and Open Competition

Sec.

Sec. 806.302 Circumstances permitting other than full and open 
          competition.

Sec. 806.302-5 Authorized or required by statute.

Sec. 806.302-7 Public interest.

Sec. 806.304 Approval of the justification.

                   Subpart 806.5_Competition Advocates


Sec. 806.501 Requirement.

Sec. 806.570 Planning requirements.

    Authority: 38 U.S.C. 501; 40 U.S.C. 121(c); and 48 CFR 1.301-1.304.

    Source: 73 FR 2717, Jan. 15, 2008, unless otherwise noted.

           Subpart 806.3_Other Than Full and Open Competition



Sec. 806.302  Circumstances permitting other than full and open 
          competition.



Sec. 806.302-5  Authorized or required by statute.

    (a) Full and open competition need not be provided for when 
awarding:
    (1) Scarce Medical Specialist contracts negotiated under the 
authority of 38 U.S.C. 7409, but only when such contracts are with 
institutions affiliated with VA under 38 U.S.C. 7302. (38 U.S.C. 7409)
    (2) Contracts for health-care resources negotiated under the 
authority of 38 U.S.C. 8153, but only when such contracts are with 
institutions affiliated with VA under 38 U.S.C. 7302, including medical 
practice groups and other approved entities associated with affiliated 
institutions (entities will be approved if determined legally to be 
associated with affiliated institutions), or with blood banks, organ 
banks, or research centers. The justification and approval requirements 
of FAR 6.303 and

[[Page 171]]

806.304 do not apply to such contracts or agreements. (38 U.S.C. 8153)
    (3) Contracts for health-care resources, negotiated under the 
authority of 38 U.S.C. 8153, that are not acquired under the authority 
of paragraph (a)(2) of this section, but only when the procurement is 
conducted in accordance with part 873. The justification and approval 
requirements of FAR 6.303 and 806.304 shall apply to such contracts and 
agreements conducted on a sole-source basis. (38 U.S.C. 8153)
    (b) Various sections of title 38 U.S.C. authorize the Secretary to 
enter into certain contracts and certain types of contracts without 
regard to any other provisions of law. When the contracting officer 
enters into a contract without providing full and open competition for 
any of the following items or services, the contracting officer must 
cite 41 U.S.C. 253(c)(5) and the following authorities:
    (1) For contracts for orthopedic and prosthetic appliances and 
related services including research, cite 38 U.S.C. 8123. (38 U.S.C. 
8123)
    (2) For contracts to purchase or sell merchandise, equipment, 
fixtures, supplies and services for the operation of the Veterans 
Canteen Service, cite 38 U.S.C. 7802. (38 U.S.C. 7802)
    (3) For contracts or leases for the operation of parking facilities 
established under authority of 38 U.S.C. 8109(b), provided that the 
establishment, operation, and maintenance of such facilities have been 
authorized by the Secretary or designee, cite 38 U.S.C. 8109(f). (38 
U.S.C. 8109)
    (4) For contracts for laundry and other common services, such as the 
purchase of steam, negotiated with non-profit, tax-exempt, educational, 
medical, or community institutions, when specifically approved by the 
Secretary or designee and when such services are not reasonably 
available from private commercial sources, cite 38 U.S.C. 8122(c). (38 
U.S.C. 8122)
    (5) For contracts or agreements with public or private agencies for 
services of translators, cite 38 U.S.C. 513. (38 U.S.C. 513)
    (c) Except for an acquisition under paragraph (a)(2) of this 
section, the contracting officer must provide a justification under FAR 
6.303 and obtain an approval under 806.304 for each acquisition 
described in this section.



Sec. 806.302-7  Public interest.

    (a) When the contracting officer uses 41 U.S.C. 253(c)(7) to support 
a contract award using other than full and open competition, the 
contracting officer must prepare a Determination and Finding (D&F) under 
FAR 1.7 and a justification under FAR 6.303. The D&F must be signed by 
the Secretary.
    (b) The contracting officer must submit the D&F and justification 
through the HCA to the Agency Competition Advocate for signature by the 
Secretary. The submission must include the date the contracting officer 
expects to award the contract.
    (c) VA must notify Congress 30 days before the expected award date. 
The Agency Competition Advocate is responsible for preparing this 
notice. The contracting officer may not award the contract until 
notified by the Agency Competition Advocate.



Sec. 806.304  Approval of the justification.

    (a) For a justification other than a class justification specified 
in FAR 6.304(c), Table 806.304-1 provides the authorities who may 
approve a justification:

                             Table 806.304.1
------------------------------------------------------------------------
                                                           Alternate
    Proposed contract amount           Approving           approving
                                       authority           authority
------------------------------------------------------------------------
(1) Not exceeding $500,000......  The contracting     Not applicable.
                                   officer, as
                                   provided in FAR
                                   6.304(a)(1).
(2) Over $500,000 but not         Contracting         The Agency
 exceeding $10 million.            Activity            Competition
                                   Competition         Advocate (see
                                   Advocate (see       806.501(a)).
                                   806.501(b) and
                                   (c)) unless that
                                   Advocate is the
                                   contracting
                                   officer.
(3) Over $10 million but not      Agency Competition  Not applicable.
 exceeding $50 million.            Advocate.
(4) Over $50 million............  Senior Procurement  Not applicable.
                                   Executive (see
                                   802.100).
------------------------------------------------------------------------


[[Page 172]]

    (b) For class justifications specified in FAR 6.304(c), the 
contracting officer must obtain the approval of the Agency Competition 
Advocate for all proposed justifications with an estimated value of up 
to $50 million. The contracting officer must obtain the approval of the 
SPE for all proposed justifications with an estimated value of more than 
$50 million.

                   Subpart 806.5_Competition Advocates



Sec. 806.501  Requirement.

    (a) The Associate Deputy Assistant Secretary for Acquisitions is the 
Agency Competition Advocate. The Agency Competition Advocate may further 
delegate authority to other VA officials in VA Administrations and staff 
offices.
    (b) The Executive Director and Chief Operating Officer, National 
Acquisition Center, is the Contracting Activity Competition Advocate for 
the Center.
    (c) Each HCA (see subpart 802.1) will serve as the Contracting 
Activity Competition Advocate in all other cases.
    (d) The authority in paragraphs (b) and (c) of this section is not 
delegable.



Sec. 806.570  Planning requirements.

    (a) Each Contracting Activity Competition Advocate must do the 
following:
    (1) Develop a Competition Plan.
    (2) Incorporate the Plan in the internal operating procedures of the 
facility or organization in which the contracting activity is located.
    (3) Obtain the endorsement and support of the facility or staff 
office director.
    (4) Ensure that the services and offices that the contracting 
activity supports understand the plan.
    (b) At a minimum, the Competition Plan must include the following:
    (1) Approval requirements for other than full and open competition 
specified in FAR 6.304.
    (2) A description of the synopsis requirements in FAR Subpart 5.2 to 
ensure that responsible staff fully understand the advance procurement 
planning that is required.
    (3) A description of how to integrate the Competition Plan into 
advance procurement planning.
    (4) A listing of obstacles to competition and a proposal for 
overcoming them.
    (5) A method for increasing cost competition for contracts and 
competition on other significant factors.

                      PART 807_ACQUISITION PLANNING

                     Subpart 807.1_Acquisition Plans

Sec.

Sec. 807.103 Agency-head responsibilities.

         Subpart 807.3_Contractor Versus Government Performance


Sec. 807.300 Scope of subpart.

Sec. 807.304-77 Right of first refusal.

    Authority: 40 U.S.C. 121(c) and 48 CFR 1.301-1.304.

    Source: 73 FR 2717, Jan. 15, 2008, unless otherwise noted.

                     Subpart 807.1_Acquisition Plans



Sec. 807.103  Agency-head responsibilities.

    The authority to prescribe procedures in FAR 7.103 is delegated to 
the SPE and is further delegated to the DSPE.

         Subpart 807.3_Contractor Versus Government Performance



Sec. 807.300  Scope of subpart.

    This subpart prescribes the use of VAAR clause at 852.207-70, Report 
of employment under commercial activities, when contracting for 
commercial services under Office of Management and Budget (OMB) Circular 
A-76 or VA's cost comparison process. The cost comparison process is 
used by VA to determine whether to use commercial or Government 
resources to provide commercial services.



Sec. 807.304-77  Right of first refusal.

    (a) In addition to the Right of First Refusal of Employment clause 
specified in FAR 52.207-3, the contracting officer must include the 
clause ``Report of Employment Under Commercial Activities'' at 852.207-
70 in all cost comparison solicitations where VA personnel may be 
displaced. This clause is primarily intended to verify that the

[[Page 173]]

contractor is meeting its obligation to provide Federal workers who are 
adversely affected by the contract award and who are qualified for the 
jobs the first opportunity for employment openings created by the 
contract.
    (b) The Report of Employment Under Commercial Activities clause is 
also prescribed to avoid inappropriate severance payment. To implement 
the clause, the contracting officer (or COTR) must first obtain a list 
of Federal personnel who will be adversely affected as a result of the 
anticipated contract from the servicing Human Resources Service office. 
The list should be requested as soon as a preliminary determination is 
made to contract out a function subject to OMB Circular A-76. 
(Contracting officers may designate a COTR to coordinate the information 
and reporting requirements.)

           PART 808_REQUIRED SOURCES OF SUPPLIES AND SERVICES

Sec.

Sec. 808.002 Priorities for use of Government supply sources.

                 Subpart 808.4_Federal Supply Schedules


Sec. 808.402 General.

Sec. 808.405-2 Ordering procedure for services requiring a statement of 
          work.

  Subpart 808.6_Acquisition From Federal Prison Industries, Inc. (FPI)


Sec. 808.603 Purchase priorities.

       Subpart 808.8_Acquisition of Printing and Related Supplies


Sec. 808.802 Policy.

    Authority: 38 U.S.C. 8127 and 8128; 40 U.S.C. 121(c) and (d); and 48 
CFR 1.301-1.304.

    Source: 73 FR 2717, Jan. 15, 2008, unless otherwise noted.



Sec. 808.002  Priorities for use of Government supply sources.

    (a) Supplies. (1) As used in FAR 8.002(a)(1)(i), the term ``agency 
inventories'' includes Supply Fund Stock and VA Excess.
    (2) A national committed use contract awarded by the VA National 
Acquisition Center has a priority between wholesale supply sources (FAR 
8.002(a)(1)(v)) and mandatory Federal Supply Schedules (FAR 
8.002(a)(1)(vi)).
    (3) Federal Supply Schedule contracts awarded by the VA National 
Acquisition Center in Federal Supply Classification (FSC) Groups 65 and 
66 shall be mandatory for use by VA and shall have the same order of 
priority as mandatory Federal Supply Schedules (FAR 8.002(a)(1)(vi)). VA 
contracting officers must place orders against Federal Supply Schedules 
contracts awarded by the VA National Acquisition Center in FSC Groups 65 
and 66 in the following descending order of priority:
    (i) Nationally awarded Blanket Purchase Agreements (BPAs), issued by 
the VA National Acquisition Center against Federal Supply Schedules.
    (ii) Multi-VISN, single-VISN, or locally awarded BPAs, issued by 
VISN, regional, or local VA contracting officers against Federal Supply 
Schedules.
    (iii) Federal Supply Schedules without BPAs.
    (4) Indefinite delivery indefinite quantity (IDIQ) contracts, 
awarded by VISN, regional, or local facility VA contracting officers, 
for supplies not covered by national committed use contracts or Federal 
Supply Schedule contracts shall have an order of priority between 
optional use Federal Supply Schedules (FAR 8.002(1)(a)(vii)) and 
commercial sources (including educational and nonprofit institutions) 
(FAR 8.002(1)(a)(viii)). VA contracting officers must place delivery 
orders against IDIQ contracts, awarded by VISN, regional, or a local 
facility contracting officers, for supplies not covered by national 
committed use contracts or Federal Supply Schedule contracts in the 
following descending order of priority:
    (i) VISN or regionally awarded contracts.
    (ii) Locally awarded contracts.
    (5) Open market purchases (purchases not falling within any of the 
higher priorities in paragraphs (a)(2) through (4) of this section) have 
the same priority as commercial sources (including educational and 
nonprofit institutions) (FAR 8.002(1)(a)(viii)).
    (b) Unusual or compelling urgency. The contracting officer may use a 
source lower in priority than as specified in paragraph (a) of this 
section when the

[[Page 174]]

need for supplies or services is of an unusual or compelling urgency 
(see FAR 6.302-2). The Contracting Officer must include a justification 
for each deviation in the procurement file.
    (c) Eligible Beneficiaries. (1) A contracting officer may authorize 
an acquisition from the Veterans Canteen Service or a commercial source 
when a VA healthcare official (e.g., social worker, physician) 
determines that personal selection of shoes, clothing, and incidentals 
will result in a therapeutic benefit to an eligible beneficiary.
    (2) The contracting officer must cite Federal Prison Industries, 
Inc., clearance No. 1206 in the purchase document for any purchase from 
a commercial source of dress shoes similar to Federal Prison Industries, 
Inc., Style No. 86-A.

                 Subpart 808.4_Federal Supply Schedules



Sec. 808.402  General.

    The Executive Director and Chief Operating Officer, VA National 
Acquisition Center, advertises, negotiates, awards, administers, and 
issues the Federal Supply Schedules for Federal Supply Classification 
Groups 62, 65, and 89 and for cost-per-test services under Group 66.



Sec. 808.405-2  Ordering procedure for services requiring a statement of 
          work.

    When placing an order or establishing a BPA for supplies or services 
requiring a statement of work, the ordering activity, when developing 
the statement of work and any evaluation criteria in addition to price, 
shall adhere to and apply the evaluation factor commitments at 815.304-
70.

[74 FR 64630, Dec. 8, 2009]

  Subpart 808.6_Acquisition From Federal Prison Industries, Inc. (FPI)



Sec. 808.603  Purchase priorities.

    Contracting officers may purchase supplies and services produced or 
provided by FPI from eligible service-disabled veteran-owned small 
businesses and veteran-owned small businesses, in accordance with 
procedures set forth in subpart 819.70, without seeking a waiver from 
FPI, in accordance with 38 U.S.C. 8128, Small business concerns owned 
and controlled by veterans: Contracting priority.

[74 FR 64630, Dec. 8, 2009]

       Subpart 808.8_Acquisition of Printing and Related Supplies



Sec. 808.802  Policy.

    The Director, Publications Staff, Office of Acquisition and Materiel 
Management, VA Central Office, is the Central Printing Authority for VA 
(see FAR 8.802(b)).

                   PART 809_CONTRACTOR QUALIFICATIONS

            Subpart 809.1_Responsible Prospective Contractors

Sec.

Sec. 809.104 Standards.

Sec. 809.104-2 Special standards.

Sec. 809.106 Preaward surveys.

Sec. 809.106-1 Conditions for preaward surveys.

                Subpart 809.2_Qualifications Requirements


Sec. 809.201 Definitions.

Sec. 809.202 Policy.

Sec. 809.204 Responsibilities for establishment of a qualification 
          requirement.

Sec. 809.206 Acquisitions subject to qualification requirements.

Sec. 809.206-1 General.

Sec. 809.270 Qualified products for convenience/labor-saving foods.

         Subpart 809.4_Debarment, Suspension, and Ineligibility


Sec. 809.400 Scope of subpart.

Sec. 809.402 Policy.

Sec. 809.404 Excluded Parties List System.

Sec. 809.405 Effect of listing.

Sec. 809.405-1 Continuation of current contracts.

Sec. 809.405-2 Restrictions on subcontracting.

Sec. 809.406 Debarment.

Sec. 809.406-1 General.

Sec. 809.406-2 Cause for debarment.

Sec. 809.406-3 Procedures.

Sec. 809.406-4 Period of debarment.

Sec. 809.407 Suspension.

Sec. 809.407-1 General.

Sec. 809.407-3 Procedures.

Sec. 809.470 Fact-finding procedures.

    Subpart 809.5_Organizational and Consultant Conflicts of Interest


Sec. 809.503 Waiver.

[[Page 175]]


Sec. 809.504 Contracting officer responsibilities.

Sec. 809.507 Solicitation provisions and contract clause.

Sec. 809.507-1 Solicitation provisions.

    Authority: 38 U.S.C. 8127 and 8128; 40 U.S.C. 121(c) and (d); and 48 
CFR 1.301-1.304.

    Source: 73 FR 2717, Jan. 15, 2008, unless otherwise noted.

            Subpart 809.1_Responsible Prospective Contractors



Sec. 809.104  Standards.



Sec. 809.104-2  Special standards.

    (a) For a pre-award survey prescribed by 809.106-1, a contracting 
officer must develop special standards of sanitation applicable to the 
acquisition of subsistence and services prescribed by 809.106-1(a).
    (b) An appropriate specialist will assist the contracting officer in 
developing the special standards under paragraph (a) of this section.



Sec. 809.106  Pre-award surveys.



Sec. 809.106-1  Conditions for pre-award surveys.

    (a) Except as provided in paragraphs (b) through (e) of this 
section, a committee under the direction of the contracting officer and 
composed of representatives of the medical service or using service 
chiefs or designees appointed by the facility or VISN director will 
conduct a pre-award on-site evaluation of the plant, personnel, 
equipment and processes of the prospective contractor for contracts 
covering the products and services of the following:
    (1) Bakeries.
    (2) Dairies.
    (3) Ice cream plants.
    (4) Laundry and dry cleaning activities.
    (b) Before any inspection, the contracting officer will determine 
whether another VA facility or another Federal agency has recently 
inspected and approved the plant.
    (1) The contracting officer will accept an approved inspection 
report of another VA facility.
    (2) If another Federal agency made a plant inspection not more than 
6 months before the proposed VA contract period, the contracting officer 
may accept an approved inspection report of that other Federal agency as 
satisfactory evidence that the facilities of the bidder meet the bid 
requirements.
    (c) VA will not conduct a pre-award on-site evaluation of a dairy 
plant when VA receives an acceptable bid from a supplier of dairy 
products designated as No.1 in the Federal Specifications if the 
following conditions are met:
    (1) The supplier has received a pasteurized milk rating of 90 
percent or more for the type of product being supplied, on the basis of 
the U.S. Public Health Service milk ordinance and code.
    (2) The rating is current (not over 2 years old) and has been 
determined by a certified State milk sanitation rating officer in the 
State of origin or by the Public Health Service. The contractor must 
maintain the rating of 90 percent or more during the period of the 
contract.
    (3) The solicitation specifications must include the requirements in 
paragraphs (c)(1) and (2) of this section.
    (d) A dairy plant that does not meet paragraph (c) of this section 
may offer only dairy products designated as No. 2 in the Federal 
Specifications. VA will make an award to such a firm only after it 
completes a pre-award on-site evaluation conducted under paragraph (a) 
of this section.
    (e) Before it makes an open market purchase of fresh bakery products 
(such as pies, cakes, and cookies), VA will inspect and evaluate the 
plant where these products are produced or prepared under paragraph (a) 
of this section. VA will make an on-site evaluation at least annually 
and record the results on VA Form 10-2079, Inspection Report of Bakery.

                Subpart 809.2_Qualifications Requirements



Sec. 809.201  Definitions.

    For the purposes of this subpart:
    VA QPL means a VA Qualified Products List, a list of products 
qualified by the VA under VA specifications, or purchase descriptions, 
or commercial item descriptions.

[[Page 176]]

    VISN QPL means a VISN Qualified Products List, a list of products 
qualified by a VISN under VA specifications, or purchase descriptions, 
or commercial item descriptions.



Sec. 809.202  Policy.

    The HCA may sign a justification required by FAR 9.202(a)(1).



Sec. 809.204  Responsibilities for establishment of a qualification 
          requirement.

    (a) Under FAR Subpart 9.2, VA may create VA QPLs for use on 
individual solicitations or on multiple solicitations issued by one or 
more VA facilities.
    (b) An HCA or designee must support the creation of a VA QPL using 
one or more of the following justifications:
    (1) The time required for testing the product after award would 
unduly delay product delivery.
    (2) The cost of repetitive product testing would be excessive.
    (3) Testing the product would require purchasing an expensive or 
complicated apparatus not commonly available.
    (4) It is in the Government's interest to be assured before contract 
award that the product is satisfactory for its intended use.
    (5) Determining acceptability would require providing product 
performance data to supplement technical requirements in the 
specification.
    (6) Conducting a test would result in substantial or repetitive 
rejections.
    (7) VA cannot economically develop clear, professional 
specifications for the product performance, balance, design, or 
construction, and professional judgment is required to determine whether 
the product is acceptable under VA requirements.
    (c) If VA plans to establish a VA QPL for any given product, the 
contracting officer may limit known suppliers to suppliers whose 
products are covered by a Federal Supply Schedule contract, as provided 
at FAR Subpart 8.4.
    (d) VA will pay the costs to inspect and test a product sample 
submitted under this section.
    (1) The product supplier must pay for the sample and its 
transportation to the place of inspecting and testing.
    (2) After inspection and testing, VA will return any product sample 
to the supplier ``as is'' unless:
    (i) The inspection or test destroys the sample; or
    (ii) The supplier authorizes VA to retain or dispose of the sample.
    (e) Once VA accepts a product for the VA QPL, VA may review the 
product for compliance with the applicable specification at any time.
    (1) Where there is a variance between a VA specification that was 
the basis for the VA QPL and the product furnished by the supplier, the 
supplier must furnish an item that conforms to the VA specification.
    (2) If the supplier fails to or is unable to provide a product that 
conforms to the applicable VA specification, the product will be removed 
from the VA QPL.
    (f) VA's acceptance of a product for listing on the VA QPL does not:
    (1) Guarantee that VA will accept the product in any future 
purchase; or
    (2) Constitute a waiver of the specifications as to acceptance, 
inspection, testing, or other provisions of any future contract 
involving the product.



Sec. 809.206  Acquisitions subject to qualification requirements.



Sec. 809.206-1  General.

    The HCA may determine that an emergency exists, as provided in FAR 
9.206-1(b).



Sec. 809.270  Qualified products for convenience/labor-saving foods.

    (a) Each VISN Nutrition and Food Service representative is 
authorized to establish a common VISN QPL for convenience and labor-
saving foods for use at medical facilities within the representative's 
VISN.
    (1) The VISN Nutrition and Food Service representative must notify 
the Director, Nutrition and Food Service, VA Central Office, of the 
establishment or amendment of any VISN QPL.
    (2) To avoid unnecessary duplication within a VISN, for medical 
facilities using an applicable VISN QPL under paragraph (b) of this 
section, the VISN Nutrition and Food Service representative must 
coordinate and consolidate test results and recommendations.
    (b) Each medical facility may:

[[Page 177]]

    (1) Use its VISN QPL; and
    (2) Test food of its choice, provided that the facility submits test 
results to the VISN Nutrition and Food Service representative.
    (c) The VISN representative must provide a copy of each approved 
VISN QPL to the following:
    (1) Each contracting office in the VISN.
    (2) The Director, Nutrition and Food Service, VA Central Office.
    (3) Upon request, the Office of Acquisition and Materiel Management, 
VA Central Office.

         Subpart 809.4_Debarment, Suspension, and Ineligibility



Sec. 809.400  Scope of subpart.

    This subpart supplements provisions of the FAR concerning procedures 
and related actions for the debarment and suspension of contractors.



Sec. 809.402  Policy.

    (a) When VA receives information that another agency is pursuing a 
debarment or suspension identical to a VA action against the same 
contractor, the Debarment and Suspension (D&S) Committee will coordinate 
prospective action with the appropriate official of the other agency to 
establish a lead agency.
    (b) The D&S Committee will provide the designated lead agency with 
any information relevant to the action for consideration in the 
decision-making process.
    (c) The D&S Committee will maintain close coordination with the 
appropriate official through completion of a final debarment or 
suspension decision.



Sec. 809.404  Excluded Parties List System.

    Acquisition Resources Service, Office of Acquisition and Materiel 
Management, is responsible for the actions described in FAR 9.404(c).



Sec. 809.405  Effect of listing.

    The authority under FAR 9.405(a), 9.405(d)(2), and 9.405(d)(3) to 
determine whether to solicit from, evaluate bids or proposals from, or 
award contracts to contractors whose names appear on the Excluded 
Parties List System is delegated to the SPE and is further delegated to 
the DSPE.



Sec. 809.405-1  Continuation of current contracts.

    Authority to make the determinations under FAR 9.405-1 is delegated 
to the SPE and is further delegated to the DSPE.



Sec. 809.405-2  Restrictions on subcontracting.

    When a subcontract is subject to Government consent, authority to 
make the written determination required under FAR 9.405-2 consenting to 
a contractor's use of a subcontractor who is debarred, suspended, or 
proposed for debarment is delegated to the SPE and is further delegated 
to the DSPE.



Sec. 809.406  Debarment.



Sec. 809.406-1  General.

    (a) As provided in FAR 9.406-1(c), authority to determine whether to 
continue business dealings between VA and a contractor debarred or 
proposed for debarment is delegated to the SPE and is further delegated 
to the DSPE.
    (b) For the purposes of FAR 9.406-1, the DSPE is the debarring 
official under the Federal Management Regulation at 41 CFR 102-117.295.
    (c) Additional factors that a debarring official should consider 
before arriving at a debarment decision include the following:
    (1) Whether the contractor had a mechanism, such as a hotline, by 
which employees could have reported suspected instances of improper 
conduct, and instructions in place that encouraged employees to make 
such reports.
    (2) Whether the contractor conducted periodic reviews of company 
business practices, procedures, policies, and internal controls for 
compliance with standards of conduct and the special requirements of 
Government contracting.
    (3) Whether the contractor conducted internal and external audits as 
appropriate.

[[Page 178]]

    (4) Whether the contractor timely reported to appropriate Government 
officials any suspected or possible violations of law in connection with 
Government contracts or any other irregularities in connection with such 
contracts.



Sec. 809.406-2  Cause for debarment.

    (a) Misrepresentation of VOSB or SDVOSB eligibility may result in 
action taken by VA officials to debar the business concern for a period 
not to exceed 5 years from contracting with VA as a prime contractor or 
a subcontractor.
    (b) Any deliberate violation of the limitation on subcontracting 
clause requirements for acquisitions under subpart 819.70 may result in 
action taken by VA officials to debar any service-disabled veteran-
owned, veteran-owned small business concern or any large business 
concern involved in such action.

[74 FR 64630, Dec. 8, 2009]



Sec. 809.406-3  Procedures.

    (a) Any individual may submit a recommendation to debar a contractor 
to the DSPE. The recommendation to debar must be supported with evidence 
of a cause for debarment listed in FAR 9.406-2. When the DSPE receives a 
recommendation for debarment, he or she will refer the matter to the D&S 
Committee. If the reporting individual is a VA employee and the 
recommendation to debar is based on possible criminal or fraudulent 
activities, the VA employee must report the circumstances to the VA 
Office of Inspector General before making a recommendation to the DSPE.
    (b) When the D&S Committee finds evidence of a cause for debarment, 
as listed in FAR 9.406-2, with or without a recommendation, it will 
conduct a fact-finding and present facts to the debarring official.
    (c) If the debarring official finds a basis for proposing a 
contractor for debarment, the D&S Committee will prepare a notice of 
proposed debarment under FAR 9.406-3(c) for the signature of the 
debarring official. The signed notice of proposed debarment will be sent 
to the last known address of the contractor, the contractor's counsel, 
or agent for service of process, by certified mail, return receipt 
requested. In the case of a business, the D&S Committee may send the 
notice of proposed debarment to any partner, principal, officer, 
director, owner or co-owner, or joint venture. The D&S Committee 
concurrently must post notice of proposed debarment to the General 
Services Administration Excluded Parties List System pending a debarment 
decision.
    (d) If VA does not receive a reply from the contractor within 45 
calendar days of sending the notice of proposed debarment, the D&S 
Committee will prepare a recommendation and refer the case to the 
debarring official for a decision on whether or not to debar based on 
the information available.
    (e) If VA receives a reply from the contractor within 45 calendar 
days of sending the notice of proposed debarment, the D&S Committee must 
consider the information in the reply before the D&S Committee makes its 
recommendation to the debarring official.
    (f) The D&S Committee, upon the request of the contractor proposed 
for debarment, must, as soon as practicable, allow the contractor an 
opportunity to appear before the D&S Committee to present information or 
argument in person or through a representative. The contractor may 
supplement the oral presentation with written information and argument. 
The proceeding will be conducted in an informal manner and without 
requirement for a transcript. The D&S Committee shall prepare a report 
of the proceeding for the debarring official.
    (g) If the D&S Committee finds that the contractor's submission in 
opposition to the debarment raises a genuine dispute over facts material 
to the proposed debarment and the debarment action is not based on a 
conviction or civil judgment, then the D&S Committee shall submit to the 
debarring official the information establishing the dispute of material 
facts. If the debarring official agrees that there is a genuine dispute 
of material facts, the debarring official shall refer the dispute to a 
designee for resolution pursuant to 809.470.
    (h) If there are no disputes over material facts, the debarment 
action is

[[Page 179]]

based on a conviction or civil judgment, or all disputes over material 
facts have been resolved pursuant to 809.470, the debarring official 
will make a decision on the basis of all information available, 
including findings of facts and oral or written arguments presented or 
submitted to the D&S Committee by the contractor. The D&S Committee must 
update the status of the action on the General Services Administration 
Excluded Parties List System.



Sec. 809.406-4  Period of debarment.

    (a) Except in an unusual circumstance, the period of debarment will 
not exceed 3 years. The debarring official will base the period of 
debarment on the circumstances surrounding the cause for debarment.
    (b) The DSPE may remove a debarment, amend its scope, or reduce the 
period of debarment based on a D&S Committee recommendation if:
    (1) VA has debarred the contractor;
    (2) The action is indicated after the DSPE reviews documentary 
evidence submitted by or on behalf of the contractor setting forth the 
appropriate grounds for granting relief. Appropriate grounds include 
newly discovered material evidence, reversal of a conviction, bona fide 
change of ownership or management, elimination of the cause for which 
debarment was imposed, or any other appropriate grounds.



Sec. 809.407  Suspension.



Sec. 809.407-1  General.

    (a) As provided in FAR 9.407-1(d), authority to determine whether to 
continue business dealings between VA and a suspended contractor is 
delegated to the SPE and is further delegated to the DSPE.
    (b) For the purposes of FAR 9.407-1, the DSPE is the suspending 
official under the Federal Management Regulation at 41 CFR 102-117.295.



Sec. 809.407-3  Procedures.

    (a) Any individual may submit a recommendation to suspend a 
contractor to the DSPE. The recommendation to suspend must be supported 
with evidence of a cause for suspension listed in FAR 9.407-2. When the 
DSPE receives a recommendation for suspension, he or she will refer the 
matter to the D&S Committee. If the reporting individual is a VA 
employee and the recommendation to suspend is based on possible criminal 
or fraudulent activities, the VA employee must report the circumstances 
to the VA Office of Inspector General before making a recommendation to 
the DSPE.
    (b) When the D&S Committee finds evidence of a cause for suspension, 
as listed in FAR 9.407-2, with or without a recommendation, it will 
conduct a fact-finding and present facts and recommendations to the 
suspending official.
    (c) If the suspending official finds a basis for suspending a 
contractor, the D&S Committee will prepare a notice of suspension under 
FAR 9.407-3(c) for the signature of the suspending official. The signed 
notice of suspension will be sent to the last known address of the 
contractor, the contractor's counsel, or agent for service of process, 
by certified mail, return receipt requested. In the case of a business, 
the D&S Committee may send the notice of suspension to any partner, 
principal, officer, director, owner or co-owner, or joint venture. The 
D&S Committee concurrently must post notice of suspension to the General 
Services Administration Excluded Parties List System pending completion 
of investigation and any ensuing legal proceedings.
    (d) If VA receives a reply from the contractor within 45 calendar 
days of sending the notice of suspension, the D&S Committee must 
consider the information in the reply before the Committee makes further 
recommendations to the suspending official. The D&S Committee, upon the 
request of a suspended contractor, must, as soon as practicable, allow 
the contractor an opportunity to appear before the D&S Committee to 
present information or argument in person or through a representative. 
The contractor may supplement the oral presentation with written 
information and argument. The proceeding will be conducted in an 
informal manner and without requirement for a transcript. The D&S 
Committee shall prepare a report of the proceeding for the suspending 
official.

[[Page 180]]

    (e) In actions not based on an indictment, if the D&S Committee 
finds that the contractor's submission in opposition to the suspension 
raises a genuine dispute over facts material to the suspension, the D&S 
Committee shall submit to the suspending official the information 
establishing the dispute of material facts. However, the D&S Committee 
must first coordinate any further proceeding regarding the facts in 
dispute with the Department of Justice or with a State prosecuting 
authority in a case involving a State jurisdiction. VA will take no 
further action to determine disputed material facts pursuant to this 
section or 809.470 if the Department of Justice or a State prosecuting 
authority advises VA that additional proceedings to make such a 
determination would prejudice Federal or State legal proceedings.
    (f) If the suspending official agrees that there is a genuine 
dispute of material facts, the suspending official shall refer the 
dispute to the designee for resolution pursuant to 809.470.



Sec. 809.470  Fact-finding procedures.

    The provisions of this section constitute the procedures to be used 
to resolve genuine disputes of fact pursuant to 809.406-3 and 809.407-3 
of this chapter. The DSPE shall appoint a designee to conduct the fact-
finding. OGC shall represent VA at any fact-finding hearing and may 
present witnesses for VA and question any witnesses presented by the 
contractor. The hearings shall be conducted in Washington, DC. The 
proceedings before the fact-finder will be limited to a finding of the 
facts in dispute, as determined by the debarring or suspending official. 
The fact-finder will establish the date for the fact-finding hearing, 
normally to be held within 45 working days of the submission of the 
dispute.
    (a) The Government's representative and the contractor will have an 
opportunity to present evidence relevant to the facts at issue. The 
contractor may appear in person or through a representative at the fact-
finding hearing. The contractor may submit documentary evidence, present 
witnesses, and confront any person the agency presents.
    (b) Witnesses may testify in person. Witnesses will be reminded of 
the official nature of the proceedings and that any false testimony 
given is subject to criminal prosecution. Witnesses are subject to 
cross-examination. Hearsay evidence may be presented and will be given 
appropriate weight by the fact-finder.
    (c) The proceedings shall be transcribed and a copy of the 
transcript shall be made available at cost to the contractor upon 
request, unless the contractor and the fact-finder, by mutual agreement, 
waive the requirement for a transcript.
    (d) The fact-finder shall determine the disputed fact(s) by a 
preponderance of the evidence. As required by FAR 9.406-3(d)(2)(i) and 
9.407-3(d)(2)(i), written findings of fact shall be prepared by the 
fact-finder. A copy of the findings of fact shall be provided to the 
debarring or suspending official, the Government's representative, and 
the contractor.

    Subpart 809.5_Organizational and Consultant Conflicts of Interest



Sec. 809.503  Waiver.

    The HCA is delegated authority to waive any general rule or 
procedure of FAR Subpart 9.5. As provided at FAR 9.503, this authority 
may not be redelegated.



Sec. 809.504  Contracting officer responsibilities.

    (a) A contracting officer must determine whether awarding a contract 
will result in an actual or potential conflict of interest for the 
contractor.
    (1) The contracting officer will make a conflict of interest 
determination after reviewing information submitted by offerors, 
evaluating information gathered under FAR 9.506, and exercising his or 
her own judgment.
    (2) In evaluating possible organizational conflicts of interest, the 
contracting officer may obtain the advice of legal counsel and the 
assistance of technical specialists.
    (b) If the contracting officer determines that there is no way to 
avoid or mitigate an organizational conflict of interest arising from a 
contract award,

[[Page 181]]

the contracting officer may disqualify the offeror from award under FAR 
9.504(e).
    (c) Even if awarding a contract will result in an organizational 
conflict of interest, the contracting officer may request a waiver from 
his or her HCA if awarding the contract is in the best interests of the 
Government.
    (1) Before granting a waiver request under this paragraph, the HCA 
must obtain the concurrence of OGC.
    (2) If the HCA grants a waiver request, the contracting officer may 
set contract terms and conditions to reduce any organizational conflict 
of interest to the greatest extent possible.
    (d) In any solicitation for the services addressed at FAR 9.502, the 
contracting officer must require that each offeror submits a statement 
with its offer disclosing all facts relevant to an existing or potential 
organizational conflict of interest involving the contractor or any 
subcontractor during the life of the contract (see 809.507-1(b) and 
852.209-70).



Sec. 809.507  Solicitation provisions and contract clause.



Sec. 809.507-1  Solicitation provisions.

    (a) While conflicts of interest may not presently exist, award of 
certain types of contracts may create potential future organizational 
conflicts of interest (see FAR 9.508 for examples). If a solicitation 
may create a potential future organizational conflict of interest, the 
contracting officer shall insert a provision in the solicitation 
imposing an appropriate restraint on the contractor's eligibility for 
award of contracts in the future. Under FAR 9.507-1, the restraint must 
be appropriate to the nature of the conflict and may exclude the 
contractor from award of one or more contracts in the future.
    (b) The clause at 852.209-70, Organizational conflicts of interest, 
must be included in any solicitation for the services addressed in FAR 
9.502.

                        PART 810_MARKET RESEARCH

Sec.

Sec. 810.001 Market research policy.

Sec. 810.002 Market research procedures.

    Authority: 38 U.S.C. 8127 and 8128; 40 U.S.C. 121(c) and (d); and 48 
CFR 1.301-1.304.

    Source: 74 FR 64630, Dec. 8, 2009, unless otherwise noted.



Sec. 810.001  Market research policy.

    When conducting market research, VA contracting teams shall use the 
VIP database, at http://www.VetBiz.gov, in addition to other sources of 
information.



Sec. 810.002  Market research procedures.

    Contracting officers shall record VIP queries in the solicitation 
file by printing the results of the search(s) along with specific query 
used to generate the search(s).

                    PART 811_DESCRIBING AGENCY NEEDS

                        Subpart 811.0_Definitions

Sec.

Sec. 811.001 Definitions.

      Subpart 811.1_Selecting and Developing Requirements Documents


Sec. 811.103 Market acceptance.

Sec. 811.103-70 Technical industry standards.

Sec. 811.104 Use of brand name or equal purchase descriptions.

Sec. 811.104-70 Brand name or equal purchase descriptions.

Sec. 811.104-71 Purchase description clauses.

Sec. 811.104-72 Limited application of brand name or equal.

Sec. 811.104-73 Bid samples.

Sec. 811.104-74 Bid evaluation and award.

Sec. 811.104-75 Procedure for negotiated procurements.

Sec. 811.105 Items peculiar to one manufacturer.

Sec. 811.107 Contract clauses.

       Subpart 811.2_Using and Maintaining Requirements Documents


Sec. 811.202 Maintenance of standardization documents.

Sec. 811.204 Contract clause.

             Subpart 811.4_Delivery or Performance Schedules


Sec. 811.404 Contract clause.

                    Subpart 811.5_Liquidated Damages


Sec. 811.501 Policy.

Sec. 811.503 Contract clause.

[[Page 182]]

                Subpart 811.6_Priorities and Allocations


Sec. 811.602 General.

    Authority: 40 U.S.C. 121(c) and 48 CFR 1.301-1.304.

    Source: 73 FR 2717, Jan. 15, 2008, unless otherwise noted.



Sec. 811.001  Definitions.

    For the purposes of this part:
    Brand name product means a commercial product described by brand 
name and make or model number or other appropriate nomenclature by which 
the product is offered for sale to the public by the particular 
manufacturer, producer or distributor.
    Salient characteristics means those particular characteristics that 
specifically describe the essential physical and functional features of 
the material or service required. They are features that are identified 
in the specifications as a mandatory requirement that a proposed 
``equal'' product or material must possess for the bid to be considered 
responsive.

      Subpart 811.1_Selecting and Developing Requirements Documents



Sec. 811.103  Market acceptance.



Sec. 811.103-70  Technical industry standards.

    Where items are required to conform to technical industry standards, 
such as those adopted by: Underwriters Laboratories, Inc.; Factory 
Mutual Laboratories; American Gas Association; American Society of 
Mechanical Engineers; National Electrical Manufacturers Association; 
American Society of Heating, Refrigerating and Air-Conditioning 
Engineers; or similar organizations, where such standards are generally 
recognized and accepted in the industry involved, the invitation for 
bids, request for proposals or request for quotations will so state. In 
no instance, where there is a multiple choice of laboratories, shall the 
invitation for bid, request for proposal, or request for quotation 
indicate that the label or certificate of only one such laboratory is 
acceptable. The contracting officer shall include the provision at 
852.211-72, Technical industry standards, in solicitations requiring 
conformance to technical industry standards unless comparable provisions 
are contained in the item specification.



Sec. 811.104  Use of brand name or equal purchase descriptions.



Sec. 811.104-70  Brand name or equal purchase descriptions.

    (a) The specification writer may use purchase descriptions that 
contain references to one or more brand name products only in accordance 
with 811.104-71 through 811.104-75.
    (b) Purchase descriptions that contain references to one or more 
brand name products must be followed by the words ``or equal,'' except 
when the acquisition of a specific brand name is fully justified under 
FAR Subpart 6.3 and 806.3. If more than one brand name is acceptable, 
the contracting officer should list the known acceptable brand name 
products in the solicitation.
    (c) Where a ``brand name or equal'' purchase description is used, 
the contracting officer must give bidders an opportunity to offer 
products other than those specifically referenced by brand name. 
Following bid opening or receipt of offers, the contracting officer must 
determine if non-``brand name'' substitute products fully meet the 
salient characteristics listed in the solicitation.
    (d) When using a ``brand name or equal'' purchase description, the 
specification writer must set forth those salient physical, functional, 
or other characteristics of the referenced products that are essential 
to the minimum needs of the Government. For example, when 
interchangeability of parts is required, the specification writer must 
specify this requirement. The purchase description must contain the 
following information to the extent available:
    (1) Complete common generic identification of the item required.
    (2) Applicable model, make, or catalog number for each brand name 
product referenced and identity of the commercial catalog in which it 
appears.
    (3) Name of manufacturer, producer, or distributor of each brand 
name product referenced (and address if not well known).
    (4) Any other information necessary to describe the item required.

[[Page 183]]

    (e) When necessary to adequately describe the item required, the 
contracting officer may use an applicable commercial catalog description 
or pertinent extract if the description is identified in the 
solicitation as being that of the particular named manufacturer, 
producer, or distributor. The contracting officer must insure that a 
copy of any catalog referenced (except a parts catalog) is available on 
request for review by bidders at the purchasing office.
    (f) Except as noted in paragraph (d) of this section, the 
specification writer must not include in a purchase description either 
minimum or maximum restrictive dimensions, weights, materials, or other 
salient characteristics that are unique to a brand name product or that 
would tend to eliminate competition or other products that are only 
marginally outside the restrictions. However, the specification writer 
may include in a purchase description restrictive dimensions, weights, 
materials, or other salient characteristic if:
    (1) The user determines in writing that the restrictions are 
essential to the Government's requirements;
    (2) The specification writer includes the brand name of the product 
in the purchase description; and,
    (3) The contracting officer makes all other determinations required 
by 811.105.
    (g) The contracting officer must include in the contract file, as 
appropriate, written justifications for using the ``brand name or 
equal'' description, the contracting officer's determinations, and 
bidder submissions.



Sec. 811.104-71  Purchase description clauses.

    (a) When a solicitation uses ``brand name or equal'' purchase 
descriptions, the contracting officer must include in the solicitation 
the clause at 852.211-73, Brand name or equal, and the provision set 
forth at FAR 52.214-21, Descriptive Literature. The contracting officer 
must review the requirements at FAR 14.202-5 when using the descriptive 
literature provision.
    (b) When a ``brand name or equal'' purchase description is included 
in an invitation for bids, the contracting officer shall insert the 
following after each item so described in the solicitation, for 
completion by the bidder:

    Bidding on:

 Manufacturer name______________________________________________________

 Brand__________________________________________________________________

 No.____________________________________________________________________



Sec. 811.104-72  Limited application of brand name or equal.

    If the contracting officer determines that the clause at 852.211-73, 
Brand name or equal, applies to only certain line items of a 
solicitation, the requirements of 811.104-71(b) apply to those line 
items and the contracting officer must include a statement in the 
solicitation as follows:

    The clause entitled ``Brand name or equal'' applies only to the 
following line items: [List the line items to which the clause applies]



Sec. 811.104-73  Bid samples.

    (a) When a solicitation contains ``brand name or equal'' purchase 
descriptions, the contracting officer must not require a bidder who 
offers brand name products, including component parts, referenced in the 
descriptions to furnish bid samples of the referenced brand name 
products.
    (b) A solicitation may require the submission of bid samples in the 
case of a bidder offering ``or equal'' products. If bid samples are 
required, the contracting officer must include in the solicitation the 
provision set forth at FAR 52.214-20, Bid Samples.
    (c) A bidder must furnish all descriptive literature in accordance 
with and for the purpose set forth in the ``Brand Name or Equal'' 
clause, 852.211-73(c)(1) and (c)(2), even though bid samples may not be 
required.



Sec. 811.104-74  Bid evaluation and award.

    (a) A bid offering products that differ from brand name products 
referenced in a ``brand name or equal'' purchase description must be 
considered for award if the contracting officer determines in accordance 
with the terms of the clause at 852.211-73, Brand name or equal, that 
the offered products are clearly identified in the bid and are equal in 
all material respects to the products specified.

[[Page 184]]

    (b) In award documents, the contracting officer must include, or 
incorporate by reference, an identification of the specific products 
that the contractor is to furnish. The identification must include any 
brand name and make or model number, descriptive material, and any 
modifications of brand name products specified in the bid. This 
requirement also applies when the descriptions of the end items contain 
``brand name or equal'' purchase descriptions of component parts or of 
accessories related to the end item, and the clause at 852.211-73, Brand 
name or equal, was applied to the component parts or accessories (see 
811.104-72).



Sec. 811.104-75  Procedure for negotiated procurements.

    (a) The specification writer and contracting officer must use the 
policies and procedures prescribed in 811.104-70 through 811.104-74 as a 
guide in developing adequate purchase descriptions for negotiated 
procurements.
    (b) The contracting officer may adapt the clause at 852.211-73, 
Brand name or equal, for use in negotiated procurements. When use of the 
clause is not practical (as may be the case in unusual and compelling 
urgency purchases), the contracting officer must inform suppliers that 
proposals offering products different from the products referenced by 
brand name will be considered if the contracting officer determines that 
the offered products are equal in all material respects to the products 
referenced. The contracting officer must place decisions under this 
paragraph in writing for the contract file, as appropriate.



Sec. 811.105  Items peculiar to one manufacturer.

    (a) Except as provided in paragraph (b) of this section, the 
specification writer must write specifications in accordance with FAR 
11.002.
    (b)(1) When the specification writer determines that a particular 
physical or functional characteristic of only one product will meet the 
minimum requirements of VA (see FAR 11.105) or that a ``brand name or 
equal'' purchase description must be used (see FAR 11.104), the 
specification writer must identify the item(s) for the contracting 
officer and do one of the following:
    (i) Provide a full written justification of the reason the 
particular characteristic is essential to the Government's requirements.
    (ii) Explain why the ``brand name or equal'' purchase description is 
necessary.
    (2) The contracting officer makes the final determination whether 
restrictive specifications or ``brand name or equal'' purchase 
descriptions will be included in the solicitation.



Sec. 811.107  Contract clauses.

    (a) Insert the clause at 852.211-70, Service data manuals, paragraph 
(a), in solicitations and requests for proposals for technical medical 
and other technical equipment and devices issued by a field facility 
unless the facility Chief, Engineering Service, indicates that the 
service data manuals are not needed. The purpose of the clause is to 
require the manufacturer to provide VA a manual or groups of manuals 
that will allow for the in-house repair of the equipment purchased.
    (b) Insert the clause at 852.211-70, Service data manuals, paragraph 
(b), in solicitations and requests for proposals for mechanical 
equipment (other than technical medical and other technical equipment 
and devices) issued by a field station.

       Subpart 811.2_Using and Maintaining Requirements Documents



Sec. 811.202  Maintenance of standardization documents.

    (a) Military and departmental specifications. Contracting officers 
may, when it is advantageous to VA, use these specifications when 
procuring supplies and equipment costing less than the simplified 
acquisition threshold. When purchasing items of perishable subsistence, 
contracting officers may take into account only those exemptions set 
forth in paragraphs (b)(2) and (b)(3) of this section.
    (b) Nutrition and food service specifications. (1) VA has adopted 
for use in the procurement of packinghouse products the purchase 
descriptions and specifications set forth in the Institutional

[[Page 185]]

Meat Purchase Specifications (IMPS) and the IMPS General Requirements, 
which have been developed by the U.S. Department of Agriculture. 
Purchase descriptions and specifications for dairy products, poultry, 
eggs, fresh and frozen fruits and vegetables, as well as certain 
packinghouse products selected from the IMPS especially for VA use, are 
contained in Part IV of the Federal Supply Catalog, Stock List, FSC 
Group 89, Subsistence, Publication No. C8900-SL.
    (2) The military specifications for meat and meat products contained 
in Part IV of the Federal Supply Catalog, Stock List, FSC Group 89, 
Subsistence, must be used by VA only when purchasing such items of 
subsistence from the Defense Logistics Agency (DLA). Military 
specifications for poultry, eggs, and egg products contained in Part IV 
of the Federal Supply Catalog, Stock List, FSC Group 89, Subsistence, 
may be used when purchasing either from DLA or from local dealers.
    (3) Except as authorized in part 846, a contracting officer must not 
deviate from the specifications contained in Part IV of the Federal 
Supply Catalog, Stock List, FSC Group 89, Subsistence, and the IMPS 
without prior approval from the DSPE.
    (4) Items of meat, cured pork and poultry purchased under the 
Subsistence Prime Vendor national contract or other local procurement 
sources should be purchased via Commercial Item Descriptions (CID) that 
require all products meet USDA Grading standards and/or the IMPS as 
applicable.
    (c) Department of Veterans Affairs specifications. (1) The Director, 
Publications Staff, is responsible for developing, publishing, and 
distributing VA specifications covering printing and binding.
    (2) VA specifications, as they are revised, are placed in stock in 
the VA Forms and Publications depot. The contracting officer may 
requisition facility requirements for these specifications from that 
source.
    (d) Government paper specification standards. (1) Invitations for 
bids, requests for proposals, purchase orders, or other procurement 
instruments covering the purchase of paper stocks to be used in 
duplicating or printing, or which specify the paper stocks to be used in 
buying printing, binding, or duplicating, must require that the paper 
stocks be in accordance with the Government Paper Specification 
Standards issued by the Congressional Joint Committee on Printing.
    (2) All binding or rebinding of books, magazines, pamphlets, 
newspapers, slip cases, and boxes must be procured in accordance with 
Government Printing Office (GPO) specifications and must be procured 
from the servicing GPO Regional Printing Procurement Office or, when 
appropriate, from commercial sources.
    (3) There are three types of binding/rebinding: Class A (hard 
cover); Perfect (glued); and Lumbinding (sewn). The most suitable type 
of binding must be procured to satisfy the requirements, based upon the 
intended use of the bound material.



Sec. 811.204  Contract clause.

    Insert the clause at 852.211-75, Product specifications when product 
specifications are cited in an invitation for bids or a request for 
proposals.

             Subpart 811.4_Delivery or Performance Schedules



Sec. 811.404  Contract clause.

    When delivery is required by or on a particular date for f.o.b. 
destination contracts, the contracting officer must add a statement 
following the Time of Delivery clause in FAR 52.211-8 that the delivery 
date specified is the date by which the shipment is to be delivered, not 
the shipping date. In f.o.b. origin contracts, the contracting officer 
must add a statement following this clause that the date specified is 
the date shipment is to be accepted by the carrier.

                    Subpart 811.5_Liquidated Damages



Sec. 811.501  Policy.

    The contracting officer must not routinely include a liquidated 
damages provision in supply or construction contracts, regardless of 
dollar amount.

[[Page 186]]

The decision to include liquidated damages provisions must conform to 
the criteria in FAR 11.501. In making this decision, the contracting 
officer must consider whether the necessity for timely delivery or 
performance as required in the contract schedule is so critical that a 
probable increase in contract price is justified. The contracting 
officer must not use a liquidated damages provision for any of the 
following reasons:
    (a) As insurance against selection of a non-responsible bidder.
    (b) As a substitute for efficient contract administration.
    (c) As a penalty for failure to perform on time.



Sec. 811.503  Contract clause.

    When the contracting officer determines that the Liquidated damages 
clause prescribed in FAR 52.211-11 or 52.211-12 must be used and where 
partial performance by the contractor may be to the advantage of the 
Government, the contracting officer must include the clause in 852.211-
74, Liquidated damages, in the contract.

                Subpart 811.6_Priorities and Allocations



Sec. 811.602  General.

    (a) Priorities and allocations of critical materials are controlled 
by the Department of Commerce. Essentially, priorities and allocations 
of critical materials are restricted to projects having a direct 
connection with supporting current defense needs. VA is not authorized 
to assign a priority rating to its purchase orders or contracts 
involving the acquisition or use of critical materials.
    (b) When it has been technically established that it is not feasible 
to use a substitute material, the Department of Commerce has agreed to 
assist the VA in obtaining critical materials for maintenance and repair 
projects. The Department of Commerce will also, when possible, render 
assistance in connection with the purchase of new items, which may be in 
short supply because of their use in connection with the defense effort.
    (c) A contracting officer having problems acquiring critical 
materials must ascertain all the facts necessary to enable the 
Department of Commerce to render assistance to VA in acquiring these 
materials. The contracting officer must submit a request for assistance 
to the DSPE containing the following information:
    (1) A description of the maintenance and repair project or the new 
item.
    (2) The critical material and the amount required.
    (3) The contractor's sources of supply, including any addresses. If 
the source is other than the manufacturer or producer, also list the 
name and address of the manufacturer or producer.
    (4) The VA contract or purchase order number.
    (5) The contractor's purchase order number, if known, and the 
delivery time requirement as stated in the solicitation or offer.
    (6) The additional time the contractor claims is necessary to 
deliver the materials if priority assistance is not provided.
    (7) The nature and extent of the emergency that will be generated at 
the station, such as any of the following:
    (i) Damage to the physical plant.
    (ii) Impairment of the patient care program.
    (iii) Creation of safety hazards.
    (iv) Any other pertinent condition that could result because of 
failure to secure assistance in obtaining the critical materials.
    (8) If applicable, a statement that the item required is for use in 
a construction contract that was authorized by the Director, Office of 
Construction and Facilities Management, to be awarded and administered 
by the facility contracting officer.

[[Page 187]]

                PART 812_ACQUISITION OF COMMERCIAL ITEMS

          Subpart 812.1_Acquisition of Commercial Items_General

Sec.

Sec. 812.102 Applicability.

   Subpart 812.3_Solicitation Provisions and Contract Clauses for the 
                     Acquisition of Commercial Items


Sec. 812.301 Solicitation provisions and contract clauses for the 
          acquisition of commercial items.

Sec. 812.302 Tailoring of provisions and clauses for the acquisition of 
          commercial items.

    Authority: 38 U.S.C. 501; 40 U.S.C. 121(c); and 48 CFR 1.301-1.304.

    Source: 73 FR 2717, Jan. 15, 2008, unless otherwise noted.

          Subpart 812.1_Acquisition of Commercial Items_General



Sec. 812.102  Applicability.

    (a) This part shall be used for the acquisition of supplies and 
services that meet the definition of commercial items at FAR 2.101.
    (b) Contracting officers shall use the policies in this part in 
conjunction with the policies and procedures for the solicitation, 
evaluation, and award prescribed in Parts 813, Simplified Acquisition 
Procedures, 814, Sealed Bidding, and 815, Contracting by Negotiation, as 
appropriate for the particular acquisition.
    (c) Contracts for the acquisition of commercial items are subject to 
the policies of other parts of this chapter. When a policy in another 
part of this chapter differs from a policy in this part, this Part 812 
applies to the acquisition of commercial items.

   Subpart 812.3_Solicitation Provisions and Contract Clauses for the 
                     Acquisition of Commercial Items



Sec. 812.301  Solicitation provisions and contract clauses for the 
          acquisition of commercial items.

    (a) Regardless of provisions in other parts of the VAAR, contracting 
officers may use, as appropriate, only those provisions and clauses 
referred to in this part when acquiring commercial items.
    (b) Contracting officers may use the provisions and clauses in the 
following VAAR sections, as appropriate and in accordance with the 
prescriptions for the provisions and clauses, in requests for 
quotations, solicitations, and contracts:
    (1) 852.203-70, Commercial advertising.
    (2) 852.203-71, Display of Department of Veterans Affairs Hotline 
poster.
    (3) 852.207-70, Report of employment under commercial activities.
    (4) 852.209-70, Organizational conflicts of interest.
    (5) 852.211-71, Special notice.
    (6) 852.211-72, Technical industry standards.
    (7) 852.211-73, Brand name or equal.
    (8) 852.211-75, Product specifications.
    (9) 852.214-70, Caution to bidders--bid envelopes.
    (10) 852.214-71, Restrictions on alternate item(s).
    (11) 852.214-72, Alternate item(s).
    (12) 852.214-73, Alternate packaging and packing.
    (13) 852.214-74, Bid samples.
    (14) 852.216-70, Estimated quantities.
    (15) 852.228-71, Indemnification and insurance.
    (16) 852.229-70, Sales and use taxes.
    (17) 852.233-70, Protest content/alternative dispute resolution.
    (18) 852.233-71, Alternate protest procedure.
    (19) 852.237-7, Indemnification and medical liability insurance.
    (20) 852.237-70, Contractor responsibilities.
    (21) 852.246-70, Guarantee.
    (22) 852.246-71, Inspection.
    (23) 852.246-72, Frozen processed foods.
    (24) 852.252-70, Solicitation provisions or clauses incorporated by 
reference.
    (25) 852.270-1, Representatives of contracting officers.
    (26) 852.270-2, Bread and bakery products--quantities.
    (27) 852.270-3, Purchase of shellfish.
    (28) 852.271-72, Time spent by counselee in counseling process.
    (29) 852.271-73, Use and publication of counseling results.
    (30) 852.271-74, Inspection.

[[Page 188]]

    (31) 852.271-75, Extension of contract period.
    (c) When appropriate in accordance with the prescriptions for the 
clauses, the contracting officer may use the clauses in the following 
VAAR sections in requests for quotations, solicitations, and contracts 
for the acquisition of commercial items if the contracting officer 
determines that the use is consistent with customary commercial 
practices:
    (1) 852.211-70, Service data manuals.
    (2) 852.211-74, Liquidated damages.
    (d) All requests for quotations, solicitations, and contracts for 
commercial item services to be provided to beneficiaries must include 
the clause at 852.271-70, Nondiscrimination in services provided to 
beneficiaries.
    (e) Micro-purchases that use the procedures of this part in 
conjunction with part 813 do not require clauses unless the contracting 
officer determines that the use of clauses serves the Government's best 
interest.
    (f) When soliciting for health care resources that are commercial 
services or the use of medical equipment or space under the authority of 
part 873 and 38 U.S.C. 8151-8153, the provisions and clauses in the 
following VAAR sections may be used in accordance with the prescriptions 
contained therein or elsewhere in the VAAR:
    (1) 852.273-70, Late offers.
    (2) 852.273-71, Alternative negotiation techniques.
    (3) 852.273-72, Alternative evaluation.
    (4) 852.273-73, Evaluation--health-care resources.
    (5) 852.273-74, Award without exchanges.

(38 U.S.C. 8151-8153)



Sec. 812.302  Tailoring of provisions and clauses for the acquisition of 
          commercial items.

    (a) Contracting officers may tailor solicitations to be inconsistent 
with customary commercial practice if they prepare and obtain approval 
of a waiver under paragraph (c) of this section.
    (b) The contracting officer must prepare the waiver in accordance 
with FAR 12.302(c). The waiver is subject to the tailoring prohibitions 
in FAR 12.302(b)(1) through 12.302(b)(6).
    (c) The contracting officer must obtain approval for waivers from 
the following:
    (1) The Chief, Acquisition Assistance Division, for individual 
contracts.
    (2) The Chief, Acquisition Program Management Division, for a class 
of contracts.
    (d) Contracting officers must submit waiver requests no later than 
the solicitation issue date.
    (e) Contracting officers must retain approved requests in the 
contract file.

[[Page 189]]

           SUBCHAPTER C_CONTRACTING METHODS AND CONTRACT TYPES

               PART 813_SIMPLIFIED ACQUISITION PROCEDURES

                        Subpart 813.1_Procedures

Sec.

Sec. 813.106 Soliciting competition, evaluation of quotations or offers, 
          award and documentation.

Sec. 813.106-3 Award and documentation.

Sec. 813.106-70 Oral purchase orders.

     Subpart 813.2_Actions at or Below the Micro-Purchase Threshold


Sec. 813.202 Purchase guidelines.

              Subpart 813.3_Simplified Acquisition Methods


Sec. 813.302 Purchase orders.

Sec. 813.302-5 Clauses.

Sec. 813.307 Forms.

    Authority: 38 U.S.C. 8127 and 8128; 40 U.S.C. 121(c) and (d); and 48 
CFR 1.301-1.304.

    Source: 73 FR 2717, Jan. 15, 2008, unless otherwise noted.

                        Subpart 813.1_Procedures



Sec. 813.106  Soliciting competition, evaluation of quotations or 
          offers, award and documentation.

    (a) Contracting officers may use other than competitive procedures 
to enter into a contract with a SDVOSB or VOSB when the amount exceeds 
the micro-purchase threshold up to $5 million.
    (b) Requirements exceeding $25,000 must be synopsized in accordance 
with FAR Part 5.

[74 FR 64630, Dec. 8, 2009]



Sec. 813.106-3  Award and documentation.

    The contracting officer may record a quotation on an Abstract of 
Offers (SF 1409 or 1419), the purchase request if space permits, or 
other supplemental sheet or form, such as VA Form 10-2237b, Request for 
Dietetic Supplies.



Sec. 813.106-70  Oral purchase orders.

    When advantageous to VA, the contracting officer may use an oral 
purchase order for transactions not in excess of $3,000. This limitation 
does not apply to delivery orders against existing contracts, e.g., 
delivery orders against Federal Supply Schedule contracts. The 
contracting officer must assign a purchase order number to the 
transaction. A copy of any electronically generated purchase order may 
be used as a property voucher and receiving report to document receipt.

     Subpart 813.2_Actions at or Below the Micro-Purchase Threshold



Sec. 813.202  Purchase guidelines.

    Open market micro-purchases shall be equitably distributed among all 
qualified SDVOSBs or VOSBs, respectively, to the maximum extent 
practicable.

[74 FR 64630, Dec. 8, 2009]

              Subpart 813.3_Simplified Acquisition Methods



Sec. 813.302  Purchase orders.



Sec. 813.302-5  Clauses.

    When using the VA Form 90-2138 or 90-2138-ADP for maintenance 
contracts involving services performed on Government property that have 
the potential for property damage and liability claims, the contracting 
officer shall insert in the purchase order the Contractor's 
Responsibilities clause found at 852.237-70. Applicable maintenance 
contracts include, but are not limited to, window washing, pest control, 
and elevator maintenance.



Sec. 813.307  Forms.

    (a) The following forms provide a purchase or delivery order, 
vendor's invoice, and receiving report:
    (1) VA Form 90-2138, Order for Supplies or Services.
    (2) VA Form 90-2139, Order for Supplies or Services (Continuation).
    (3) VA Form 90-2138-ADP, Purchase Order for Supplies or Services.

[[Page 190]]

    (4) VA Form 2139-ADP, Order for Supplies and Services 
(Continuation).
    (b) The contracting officer may use the forms specified in 
paragraphs (a)(1) through (a)(4) of this section instead of OF 347, 
Order for Supplies or Services, OF 348, Order for Supplies or Services 
Schedule--Continuation, and SF 1449, Solicitation/Contract/Order for 
Commercial Items.
    (c) The contracting officer or other properly delegated official 
(see 801.670-3) may use the following order forms when ordering the 
indicated medical, dental, and ancillary services totaling up to $10,000 
per authorization when such services are not available under existing 
contracts:
    (1) VA Form 10-7078, Authorization and Invoice for Medical and 
Hospital Services.
    (2) VA Form 10-7079, Request for Outpatient Medical Services.
    (3) VA Form 10-2570d, Dental Record Authorization and Invoice for 
Outpatient Service.
    (d) In authorizing patient travel as set forth in VA manual MP-1, 
Part II, Chapter 3, the contracting officer or other properly delegated 
official (see 801.670-3) may use VA Form 10-2511, Authority and Invoice 
for Travel by Ambulance or Other Hired Vehicle, as provided by that 
manual.
    (e) The contracting officer must use SF 182, Request, Authorization, 
Agreement, and Certification of Training, for procurement of training.
    (f) The contracting officer must use VA Form 10-2421, Prosthetics 
Authorization for Items or Services, for indicated services not in 
excess of $300.

                         PART 814_SEALED BIDDING

                   Subpart 814.1_Use of Sealed Bidding

Sec.

Sec. 814.104 Types of contracts.

Sec. 814.104-70 Fixed-price contracts with escalation.

                   Subpart 814.2_Solicitation of Bids


Sec. 814.201 Preparation of invitations for bids.

Sec. 814.201-6 Solicitation provisions.

Sec. 814.203 Methods of soliciting bids.

Sec. 814.203-1 Transmittal to prospective bidders.

Sec. 814.204 Records of invitations for bids and records of bids.

Sec. 814.208 Amendment of invitation for bids.

                    Subpart 814.3_Submission of Bids


Sec. 814.301 Responsiveness of bids.

Sec. 814.302 Bid submission.

Sec. 814.304 Submission, modification, and withdrawal of bids.

           Subpart 814.4_Opening of Bids and Award of Contract


Sec. 814.401 Receipt and safeguarding of bids.

Sec. 814.402 Opening of bids.

Sec. 814.403 Recording of bids.

Sec. 814.404 Rejection of bids.

Sec. 814.404-1 Cancellation of invitations after opening.

Sec. 814.404-2 Rejection of individual bids.

Sec. 814.404-70 Questions involving the responsiveness of a bid.

Sec. 814.407 Mistakes in bids.

Sec. 814.407-3 Other mistakes disclosed before award.

Sec. 814.407-4 Mistakes after award.

Sec. 814.408 Award.

Sec. 814.408-70 Award when only one bid is received.

Sec. 814.408-71 Recommendation for award (construction).

Sec. 814.409 Information to bidders.

    Authority: 40 U.S.C. 121(c) and 48 CFR 1.301-1.304.

     Source: 73 FR 2717, Jan. 15, 2008, unless otherwise noted.

                   Subpart 814.1_Use of Sealed Bidding



Sec. 814.104  Types of contracts.



Sec. 814.104-70  Fixed-price contracts with escalation.

    When fixed price contracts with escalation are authorized under 
816.102(a), a contracting officer must comply with FAR 16.203-1 through 
16.203-4.

                   Subpart 814.2_Solicitation of Bids



Sec. 814.201  Preparation of invitations for bids.

    (a) An invitation for bids for supplies, equipment, and services 
must be serially numbered at the time of issue. Numbers assigned locally 
must consist of the facility or VA National Acquisition Center division 
number, the serial number of the invitation, and the fiscal year in 
which the VA facility issues the invitation, e.g., 533-24-07 for the 
24th invitation issued by VA facility

[[Page 191]]

533 in Fiscal Year 2007. A series beginning with the number 1 must be 
started each fiscal year. Numbers assigned from a national register may 
be sequential, without regard to year, and use whatever numbering system 
assigned by the national system or VA's Electronic Contract Management 
System (eCMS). VHA shall use eCMS for all solicitation numbering.
    (1) An invitation for bid for supplies, equipment, and services that 
is numbered locally must be numbered in the series of the year in which 
it is issued, will be accepted, and will become a contract in the same 
fiscal year but, because of procurement lead time, will not be performed 
until the next fiscal year.
    (2) An invitation for bid that is numbered locally must be numbered 
in the next fiscal year series if it is issued in one fiscal year but 
the contract will become effective and will be performed only in the 
next fiscal year.
    (b) An invitation for a construction contract must bear the 
applicable invitation for bid number and the project number, if 
assigned.
    (c) An invitation for bid containing a summary bid request must 
include the following statement:

    ``The award will be made on either an individual item basis or 
summary bid basis, whichever results in the lowest cost to the 
Government. Therefore, to assure proper evaluation of all bids, a bidder 
quoting a summary bid price must also quote a price on each individual 
item included in the summary bid price.''

    (d) When a contracting officer determines that it will be to the 
Government's advantage to make an award by group or groups of items, the 
contracting officer must include a provision for the award by group or 
groups of items in the invitation for bids. This may apply when the 
items in the group or groups are readily available from sources to be 
solicited; and one of the following apply:
    (1) It is desirable to award a minimum number of contracts.
    (2) Furniture or fixtures are required for a single project and 
uniformity of design is desirable.
    (3) The articles required will be assembled and used as a unit.
    (e) A solicitation for a construction contract must contain a 
statement on the order of priority in which VA will award any 
alternative bid items, based on the relative importance of the items, 
VA's cost estimate, and the amount of funds available, when the 
following apply:
    (1) VA intends to make a single aggregate award for all items in the 
solicitation within certain fiscal limitations.
    (2) The solicitation asks for prices on an item and alternate item 
basis.
    (f) A bid item schedule in a solicitation issued in compliance with 
paragraph (e) of this section should be structured substantially as 
follows:

    A single award will be made on Item No. 1, but in the event the 
offer exceeds the funds available, a single award will be made on Item 
No. 2 or Item No. 3, in that order, based on available funding. Offerors 
should quote a price on each item listed.
    Item No. 1--Furnish all labor, material, equipment, etc., to paint 
Buildings No. 1, 2, and 3: $----.
    Alternate items in order of priority:
    Item No. 2--Furnish all labor, material, equipment, etc., to paint 
Building Nos. 1 and 2: $----.
    Item No. 3--Furnish all labor, material, equipment, etc., to paint 
Building No. 1: ----.



Sec. 814.201-6  Solicitation provisions.

    (a) The contracting officer must place the provision entitled 
``Caution to Bidders-Bid Envelopes,'' as set forth in 852.214-70, in all 
invitations for bids where bid submissions are by other than electronic 
means.
    (b) In an invitation for bid for supplies, equipment, or services 
(other than construction), the contracting officer must define the 
extent to which VA will authorize and consider alternate bids. VA will 
consider for acceptance an alternate specified on construction projects 
only as a part of the basic item.
    (1) When VA will consider an alternate item only if no bids or 
insufficient bids are received on an item desired, the contracting 
officer must include the provision set forth in 852.214-71, Restrictions 
on alternate item(s), in the invitation.
    (2) When VA will consider an alternate item on an equal basis with 
the

[[Page 192]]

item specified, the contracting officer must include the provision set 
forth in 852.214-72, Alternate items, in the invitation.
    (3) In addition to the provision referenced in paragraph (b)(1) or 
(2) of this section, the contracting officer must include the provision 
set forth in 852.214-73, Alternate packaging and packing, in the 
invitation when bids will be allowed on different packaging, unit 
designation, etc.
    (c) When the contracting officer determines that samples are 
necessary to the proper awarding of a contract, the contracting officer 
must include the provision set forth in 852.214-74, Bid samples, in the 
solicitation, along with the provision in FAR 52.214-20, Bid samples.



Sec. 814.203  Methods of soliciting bids.



Sec. 814.203-1  Transmittal to prospective bidders.

    The contracting officer should include either a bid envelope or OF 
17, Sealed Bid Label, with each invitation for bids furnished by mail or 
hand delivered to prospective bidders.



Sec. 814.204  Records of invitations for bids and records of bids.

    (a) The issuing office must establish and maintain a single register 
on a fiscal year basis for all solicitations. For each invitation to bid 
or request for proposal, the register must include the following:
    (1) Bid or proposal number.
    (2) Date of issue.
    (3) Date of opening.
    (4) Commodity or service involved.
    (5) Disposition (i.e., contract number or purchase order number or, 
when applicable, no award).
    (b) Maintenance of the contract file prescribed by Part 804 and 
retention of canceled Invitation for Bid files will fulfill the 
requirements set forth in FAR 14.204(b).



Sec. 814.208  Amendment of invitation for bids.

    The contracting officer must send amendments to holders of drawings 
and specifications by certified mail, return receipt requested, or any 
other method that provides evidence of receipt. The contracting officer 
may send amendments by telegram, facsimile, or other method of rapid 
delivery that provides evidence of receipt, if time does not permit 
mailing.

                    Subpart 814.3_Submission of Bids



Sec. 814.301  Responsiveness of bids.

    Where a contracting officer cannot administratively determine, in 
accordance with FAR 14.301, the timeliness of the submission of a bid, 
modification, or withdrawal, the contracting officer must submit the 
matter through the DSPE to the Comptroller General for a decision. The 
submission must include copies of all pertinent papers.



Sec. 814.302  Bid submission.

    A bid hand-carried by the bidder or his agent will be considered 
late unless delivered to the addressee designated in the bid invitation 
before the time set for opening.



Sec. 814.304  Submission, modification, and withdrawal of bids.

    (a) A notification to late bidders must specify the final date by 
which VA must receive evidence. This date must be within the time 
allowed by the apparent low bidder for acceptance of the low bidder's 
bid.
    (b) All bids received by mail or delivered in person by the bidder 
(or telegram where authorized) must be time and date stamped immediately 
upon receipt at the VA facility mail room and in the office of the 
addressee designated in the invitation.

           Subpart 814.4_Opening of Bids and Award of Contract



Sec. 814.401  Receipt and safeguarding of bids.

    The contracting officer is designated as the official to open bids 
for identification, as provided in FAR 14.401.



Sec. 814.402  Opening of bids.

    (a) The contracting officer must serve as, or designate, a bid 
opening officer, and must also designate a recorder.
    (b) If a bid bond is required, the bid opening officer must read 
aloud the form and amount of bid security and

[[Page 193]]

the name of the surety. The recorder must record this information.



Sec. 814.403  Recording of bids.

    (a) The recorder must transcribe the information required for bid 
evaluation on the appropriate Abstract of Offers form (SF 1409 or OF 
1419). The evaluation data may be recorded on supplemental sheets or 
forms such as VA Form 10-2237b, Request for Dietetic Supplies, provided 
that any supplemental sheets or forms are covered by one of the forms 
authorized for recording bid or price data.
    (b) The bid opening officer must comply with the instructions in FAR 
14.403 and certify on the abstract the date and hour at which the bids 
were opened. Where erasures, strikeovers, or changes in price are noted 
at the time of bid opening, a statement to that effect must also be 
included on, or attached to, the abstract or record of bids.



Sec. 814.404  Rejection of bids.



Sec. 814.404-1  Cancellation of invitations after opening.

    (a) For each invitation to bid that VA cancels or for which it 
receives no bid, the contracting officer must do the following:
    (1) File a copy of the invitation for bids, as provided for in FAR 
14.404-1, together with the abstract showing to whom such bids were 
sent, in a separate folder identified by the invitation number.
    (2) Annotate the abstract to show why an award was not made.
    (3) Retain the folders for the current and two succeeding fiscal 
years.
    (b) The HCA may approve cancellation of invitations for bid after 
opening and may approve completion of the acquisition after 
cancellation, as provided in FAR 14.404-1(e). The contracting officer 
must submit a Determination and Finding to the HCA for approval and 
signature.



Sec. 814.404-2  Rejection of individual bids.

    (a) When a contracting officer finds a bid that is being considered 
for an award is incomplete, e.g., all pages of the invitation have not 
been returned by the bidder, the contracting officer will take whichever 
of the following actions that is appropriate:
    (1) Make a determination that the bid as submitted is in such a form 
that acceptance would create a valid and binding contract, requiring the 
contractor to perform in accordance with all of the material terms and 
conditions of the invitation. The determination may be based on the fact 
that the bid as submitted includes evidence that the offeror intends to 
be bound by all the material terms and conditions of the invitation.
    (2) Make a determination that the bid as submitted is in such form 
that acceptance would not create a valid and binding contract.
    (b) When VA receives a single bid in response to a solicitation, the 
contracting officer must not reject the offer simply because it 
specifies a bid acceptance time that is shorter than that contained in 
the solicitation, unless a compelling reason exists for rejecting such a 
bid. Insufficient time to properly evaluate an offer is a compelling 
reason for rejection; however, the contracting officer must first 
request the offeror to extend the acceptance date of the bid to allow 
for proper evaluation.
    (c) In those cases where VA receives more than one bid, the 
contracting officer must reject as nonresponsive an individual bid that 
is not in compliance with the Government's bid acceptance time, since 
consideration of such an offer would unfairly disadvantage other 
bidders.



Sec. 814.404-70  Questions involving the responsiveness of a bid.

    If a contracting officer cannot resolve a question involving the 
responsiveness of a bid, the contracting officer may submit the question 
to the Comptroller General through the DSPE.



Sec. 814.407  Mistakes in bids.



Sec. 814.407-3  Other mistakes disclosed before award.

    (a) In accordance with FAR 14.407-3(e), the authority of the 
Secretary to make the administrative determinations set forth in FAR 
14.407-3(a), (b), (c), and (d) is delegated to the SPE and

[[Page 194]]

is further delegated, without power of redelegation, to the DSPE. This 
delegation in no way impairs the delegations contained in Unpublished 
Decision of the Comptroller General B-122003 dated November 22, 1954.
    (b) When a bidder alleges a mistake in his or her bid before award, 
after complying with the provisions of FAR 14.407-3, the contracting 
officer must submit the complete file to the DSPE for an administrative 
determination. Based upon the evidence submitted, the DSPE shall 
determine the action the contracting officer is to take. The contracting 
officer may make no award until the DSPE makes a determination.



Sec. 814.407-4  Mistakes after award.

    (a) When a contracting officer corrects a mistake in bid under FAR 
14.407-4(a), the contracting officer must forward a copy of the contract 
amendment or supplemental agreement and a copy of the contracting 
officer's determination, to the DSPE.
    (b) For mistakes in a bid alleged after award, the contracting 
officer's proposed determination, prepared in accordance with FAR 
14.407-4, must be forwarded to OGC through the DSPE, Acquisition 
Resources Service, for legal coordination. The DSPE shall transmit the 
results of this coordination to the contracting officer, who will make 
the final determination on the alleged mistake in bid after award.
    (c) The DSPE, Acquisition Resources Service, must maintain the 
agency records of mistakes in bids after award required by FAR 14.407-4.



Sec. 814.408  Award.



Sec. 814.408-70  Award when only one bid is received.

    (a) When VA receives only one bid in response to an invitation for 
bids, the contracting officer may consider and accept the bid if all of 
the following apply:
    (1) The specifications used in the invitation were not restrictive.
    (2) VA solicited adequate competition.
    (3) The price is reasonable.
    (4) The bid is otherwise in accordance with the invitation for bids.
    (b) The contracting officer must make the determination in writing, 
and include it the contract file.



Sec. 814.408-71  Recommendation for award (construction).

    (a) For Central Office contracts, the Director, Office of 
Construction and Facilities Management, must analyze all bids received 
and submit a memorandum to the Secretary recommending award or other 
disposition of the project. A copy of each of the following must 
accompany the memorandum:
    (1) The invitation.
    (2) Each bid received.
    (3) The abstract.
    (4) Any other pertinent data.
    (b) For facility-level contracts, the Chief, Engineering Service, 
must analyze all bids received and submit a memorandum recommending 
award or other disposition of the project to the contracting officer. 
The contracting officer alone must make the final decision to accept or 
reject the lowest responsive bid and the determination as to the 
responsibility of a prospective contractor.



Sec. 814.409  Information to bidders.

    (a) An employee of VA may not disclose information as to probable 
acceptance or rejection of any offer to any bidder or other person 
outside of VA, except as authorized by the FAR.
    (b) Except as provided in paragraphs (c) and (d) of this section, 
information about performance under a contract or an accepted bid is not 
public information and will be released to persons outside of VA only 
upon the authority of the immediate supervisor of the contracting 
officer.
    (c) Except as provided in paragraph (d) of this section, the 
contracting officer may furnish information on performance under a 
contract to those having a legitimate interest, such as sureties, banks, 
other financial companies and Government departments and agencies.
    (d) When litigation is involved, all information must be furnished 
through OGC.

[[Page 195]]

                   PART 815_CONTRACTING BY NEGOTIATION

                     Subpart 815.3_Source Selection

Sec.

Sec. 815.303 Responsibilities.

Sec. 815.304 Evaluation factors and significant subfactors.

Sec. 815.304-70 Evaluation factor commitments.

Sec. 815.304-71 Solicitation provision and clause

                     Subpart 815.4_Contract Pricing


Sec. 815.404 Proposal analysis.

Sec. 815.404-1 Proposal analysis techniques.

Sec. 815.404-2 Information to support proposal analysis.

                   Subpart 815.6_Unsolicited Proposals


Sec. 815.604 Department points of contact.

Sec. 815.606 Department procedures.

Sec. 815.606-1 Receipt and initial review.

    Authority: 38 U.S.C. 8127 and 8128; 40 U.S.C. 121(c); and 48 CFR 
1.301-1.304.

    Source: 73 FR 2717, Jan. 15, 2008, unless otherwise noted.

                     Subpart 815.3_Source Selection



Sec. 815.303  Responsibilities.

    The authority of the Secretary to appoint an individual other than 
the contracting officer to serve as the source selection authority for a 
particular acquisition or group of acquisitions is delegated to the SPE 
and is further delegated to the DSPE. If an HCA wishes to designate an 
individual other than the delegated contracting officer as the source 
selection authority for a particular acquisition or group of 
acquisitions, the HCA shall prepare a request and justification and 
shall submit the request through channels to the DSPE for approval.



Sec. 815.304  Evaluation factors and significant subfactors.

    (a) In an effort to assist SDVOSBs and VOSBs, contracting officers 
shall include evaluation factors providing additional consideration to 
such offerors in competitively negotiated solicitations that are not set 
aside for SDVOSBs or VOSBs.
    (b) Additional consideration shall also be given to any offeror, 
regardless of size status, that proposes to subcontract with SDVOSBs or 
VOSBs.

[74 FR 64631, Dec. 8, 2009]



Sec. 815.304-70  Evaluation factor commitments.

    (a) VA contracting officers shall:
    (1) Include provisions in negotiated solicitations giving preference 
to offers received from VOSBs and additional preference to offers 
received from SDVOSBs;
    (2) Use past performance in meeting SDVOSB subcontracting goals as a 
non-price evaluation factor in selecting offers for award;
    (3) Use the proposed inclusion of SDVOSBs or VOSBs as subcontractors 
as an evaluation factor when competitively negotiating the award of 
contracts or task or delivery orders; and
    (4) Use participation in VA's Mentor-Prot[eacute]g[eacute] Program 
as an evaluation factor when competitively negotiating the award of 
contracts or task or delivery orders.
    (b) If an offeror proposes to use an SDVOSB or VOSB subcontractor in 
accordance with 852.215-70, Service-Disabled Veteran-Owned and Veteran-
Owned Small Business Evaluation Factors, the contracting officer shall 
ensure that the offeror, if awarded the contract, actually does use the 
proposed subcontractor or another SDVOSB or VOSB subcontractor for that 
subcontract or for work of similar value.

[74 FR 64631, Dec. 8, 2009]



Sec. 815.304-71  Solicitation provision and clause.

    (a) The contracting officer shall insert the provision at 852.215-
70, Service-Disabled Veteran-Owned and Veteran-Owned Small Business 
Evaluation Factors, in competitively negotiated solicitations that are 
not set aside for SDVOSBs or VOSBs.
    (b) The contracting officer shall insert the clause at 852.215-71, 
Evaluation Factor Commitments, in solicitations and contracts that 
include VAAR clause 852.215-70, Service-Disabled Veteran-Owned and 
Veteran-Owned Small Business Evaluation Factors.

[74 FR 64631, Dec. 8, 2009]

[[Page 196]]

                     Subpart 815.4_Contract Pricing



Sec. 815.404  Proposal analysis.



Sec. 815.404-1  Proposal analysis techniques.

    (a) Contracting officers are responsible for the technical and 
administrative sufficiency of the contracts they enter into. Contracting 
officers must ensure that contracts undergo all applicable legal and 
technical reviews. (See 801.602-70.)
    (b) Contracting officers determine the level of technical analyses 
necessary for initial and revised pricing of all negotiated prime 
contracts, including subcontract pricing under them, and contract 
modifications. Contracting officers must request technical analyses of 
the proposals from the appropriate technical personnel. The technical 
analyses must address, as a minimum, the items set forth in FAR 15.404-
1(e)(2).
    (c) The contracting officer must document the results of such 
analyses in the contract file and make the results available to the 
auditor performing the pre-award audit.



Sec. 815.404-2  Information to support proposal analysis.

    In evaluating start-up and other non-recurring costs, the 
contracting officer must determine the extent to which these costs are 
included in the proposed price and the intent to absorb or recover the 
costs in any future noncompetitive procurement or other pricing action. 
The contracting officer must ensure, with the assistance of the 
Assistant Inspector General for Policy, Planning, and Resources, as 
required or considered necessary, that VA will not pay the costs twice. 
For example, the cost of equipment that the Government pays for through 
a setup or connection agreement must not be included in depreciation 
cost of a subsequently negotiated agreement.

                   Subpart 815.6_Unsolicited Proposals



Sec. 815.604  Department points of contact.

    A VA employee who receives an unsolicited proposal or inquiries from 
a potential offeror of an unsolicited proposal must refer the proposal 
or inquiries to the following:
    (a) Facility level unsolicited proposals must be referred to the HCA 
for the field facility.
    (b) Proposals to the VA National Acquisition Center must be referred 
to the Executive Director and Chief Operating Officer, VA National 
Acquisition Center.
    (c) Proposals to VA Central Office must be referred to the Director, 
Acquisition Operations Service (049A3).



Sec. 815.606  Department procedures.

    (a) The VA contact point will do the following:
    (1) Determine the nature of the potential proposal and which 
technical/professional disciplines within VA to consult to determine the 
need for the proposal and the likelihood that a formal proposal would 
earn favorable review.
    (2) In consultation with such technical/professional offices, the VA 
contact point will furnish the potential offeror the information 
specified in FAR 15.604 and any other information that might be of 
assistance to the potential offeror.
    (b) The contact point will maintain a record of advance guidance 
provided and the disposition/recommendation regarding the potential 
offer.
    (c) The contact point will review the unsolicited proposal and 
ensure that it is complete as prescribed in FAR 15.605. If required 
information is not submitted, the contact point will:
    (1) Determine if FAR 15.604 requires advance guidance;
    (2) Determine whether a comprehensive evaluation prescribed by FAR 
15.606-2 is appropriate and, if so, request that the offeror provide the 
necessary information; and,
    (3) Establish an estimated due date for completion of the review 
process.



Sec. 815.606-1  Receipt and initial review.

    (a) When the VA contact point determines a proposal warrants a 
comprehensive evaluation (i.e., the proposal complies with the 
requirements in FAR 15.606-1(a) and is related to VA's mission), the 
contact point must contact the offeror to ensure that all

[[Page 197]]

data that should be restricted in accordance with FAR 15.609 has been 
identified.
    (b) The contact point must maintain a log of all unsolicited 
proposals to be evaluated. The log must indicate the following:
    (1) The date the proposal was received.
    (2) The date that the unsolicited proposal was determined to warrant 
a comprehensive evaluation.
    (3) A description of the proposal.
    (4) The offices requested to evaluate the proposal and the date the 
offices are requested to return their evaluations.
    (5) The date the reviewing offices finalize their respective 
evaluations.
    (6) The final disposition of the proposal.
    (c) The contact point must advise each office assigned 
responsibility for reviewing an unsolicited proposal of the need to 
evaluate the proposal against the criteria set forth in FAR 15.607(a)(1) 
through (4). If the reviewers determine that the proposal fails to meet 
any of the criteria, the contact point must be advised. The contact 
point must return the proposal to the offeror, citing the reasons 
therefore.
    (d) The contact point must obtain approval of the DSPE (049A5) 
before the contact point, if warranted as a contracting officer, or an 
appropriate contracting officer begins negotiation on proposals. The 
contact point must provide the DSPE (049A5) all necessary documentation 
supporting the noncompetitive negotiation, including any justification 
and approval required by FAR Subpart 6.3 and the results of any synopsis 
required by FAR Subpart 5.2. The DSPE (049A5) will consult the 
appropriate VA Central Office program official(s) and return the final 
decision to the contact point.

                       PART 816_TYPES OF CONTRACTS

                 Subpart 816.1_Selecting Contract Types

Sec.

Sec. 816.102 Policies.

               Subpart 816.5_Indefinite-Delivery Contracts


Sec. 816.504 Indefinite-quantity contracts.

Sec. 816.505 Ordering.

                 Subpart 816.70_Unauthorized Agreements


Sec. 816.7001 Letters of availability.

    Authority: 40 U.S.C. 121(c) and 48 CFR 1.301-1.304.

    Source: 73 FR 2717, Jan. 15, 2008, unless otherwise noted.

                 Subpart 816.1_Selecting Contract Types



Sec. 816.102  Policies.

    (a) Contracting officers must obtain technical review of 
solicitations that include a clause that provides for economic price 
adjustment specified in FAR 16.203-4 or any locally developed clause 
(see FAR 16.203-4(d)(2) and 801.602-72(d)). The request for approval 
must include a clearly stated need for the clause.
    (b) The contracting officer must obtain the approval of the 
Director, Acquisition Resources Service (049A5), VA Central Office, 
before issuing a solicitation or awarding a contract that includes time-
and-material or labor-hour pricing provisions if the ceiling price or 
estimated value of the acquisition exceeds $100,000. See 801.602-71 for 
technical review requirements. Excluded from this requirement are time-
and-material or labor-hour solicitations or proposed contracts covering 
emergencies, such as repair of a broken water, sewer, or communication 
line, repair of storm damage, etc. (i.e., where FAR 6.302-2 applies).
    (c) Except as provided in FAR 32.703-3, a contract that involves a 
direct obligation of appropriations and lasts for more than one year 
from the beginning of the contract period must provide that:
    (1) The contract applies to the period stated in the contract, 
subject to availability of funds; and
    (2) The contractor will not perform any service under the contract 
after September 30 of each fiscal year (or beyond the period of the 
basic contract or any authorized option if the contract crosses fiscal 
years as provided in FAR 32.703-3(b)) unless the contractor obtains 
specific authorization from the contracting officer.

[[Page 198]]

    (d) A/E contracts, construction contracts, or professional engineer 
contracts, financed by ``no year'' appropriations, are not subject to 
the requirements of paragraph (c) of this section.

               Subpart 816.5_Indefinite-Delivery Contracts



Sec. 816.504  Indefinite-quantity contracts.

    (a) Except as provided in paragraphs (b), (c), and (d) of this 
section, when the contracting officer cannot determine definite 
quantities to be acquired under a solicitation and intends to issue a 
solicitation for estimated quantities, the contracting officer shall 
insert the clause at 852.216-70, Estimated quantities.
    (b) The contracting officer shall insert the Alternate I clause at 
852.216-70 in solicitations for bulk coal.
    (c) The contracting officer shall insert the Alternate II clause at 
852.216-70 in solicitations for estimated quantities of orthopedic, 
prosthetic, and optical supplies.
    (d) The contracting officer shall insert the Alternate III clause at 
852.216-70 in solicitations for monuments and headstones.



Sec. 816.505  Ordering

    The task order contract and delivery order ombudsman for VA is the 
Associate Deputy Assistant Secretary for Acquisitions (see FAR 
16.505(b)(5)). Contracting officers may obtain the name, telephone 
number, facsimile number, and e-mail address of the current Associate 
Deputy Assistant Secretary for Acquisitions by contacting: The Office of 
Acquisitions (049A), VA Central Office, 810 Vermont Ave., NW., 
Washington, DC 20420.

                 Subpart 816.70_Unauthorized Agreements



Sec. 816.7001  Letters of availability.

    (a) Description. A letter of availability (sometimes inappropriately 
called a letter of intent) is a letter to a supplier that primarily 
seeks to reserve a place on the supplier's production or delivery 
schedule for long lead-time items. A letter of availability usually 
indicates products or services being considered for procurement. A 
supplier should not construe a letter of availability as a commitment. 
Prospective contractors sometimes solicit letters of availability or the 
letters may originate from Government personnel. A letter of 
availability differs from a letter contract, which is specifically 
authorized in FAR 16.603.
    (b) Policy. (1) For the following reasons, contracting officers may 
not use letters of availability unless the DSPE specifically authorizes 
them to do so:
    (i) Letters of availability often cause potential contractors to 
initiate costly preparations in anticipation of contract award.
    (ii) Procurements announced in such letters do not always 
materialize. The result may be costly to the Government, the prospective 
contractor, or both. If the author of the letter of availability is an 
authorized contracting officer of VA, the Government may be bound by the 
action, even though the action is contrary to sound procurement 
practices and/or fiscal regulations. If the author of the letter of 
availability lacks procurement authority, the prospective contractor may 
incur substantial expenditures that may not be recovered from the 
Government. In this instance, the prospective contractor may seek to 
hold the unauthorized author personally liable.
    (iii) The issuance of a letter of availability may violate the 
``Anti-Deficiency Act'' (31 U.S.C. 1341).
    (2) Contractors need access to procurement information as soon as 
possible to make timely preparations. Therefore, procurement personnel 
should act as efficiently and expeditiously as possible on all 
procurement actions.

                  PART 817_SPECIAL CONTRACTING METHODS

                  Subpart 817.1_Multi-year Contracting

Sec.

Sec. 817.105 Policy.

Sec. 817.105-1 Uses.

                          Subpart 817.2_Options


Sec. 817.202 Use of options.

[[Page 199]]


Sec. 817.204 Contracts.

                Subpart 817.4_Leader Company Contracting


Sec. 817.402 Limitations.

      Subpart 817.5_Interagency Acquisitions Under the Economy Act


Sec. 817.502 General.

    Authority: 38 U.S.C. 8127.

    Source: 73 FR 2717, Jan. 15, 2008, unless otherwise noted.

                  Subpart 817.1_Multi-year Contracting



Sec. 817.105  Policy.



Sec. 817.105-1  Uses.

    (a) Under 38 U.S.C. 114, VA contracting officers may enter into 
multi-year contracts for supplies and services not to exceed 5 years 
(unless otherwise authorized by statue), provided the Secretary or 
designee makes the following determinations:
    (1) Appropriations are available for obligation to pay for the total 
payments for the fiscal year in which the contract is awarded plus the 
estimated amount of any cancellation charges.
    (2) The contract serves the best interest of the Government by:
    (i) Reducing cost;
    (ii) Achieving contract administration and other efficiencies;
    (iii) Increasing quality contract performance; and
    (iv) Encouraging effective competition.
    (3) That, during the contract period:
    (i) Demand for the supplies or services will continue;
    (ii) Substantial changes in demand for supplies and services in 
terms of quantity or rate of delivery are unlikely; and
    (iii) Specifications for the supplies or services will remain 
reasonably stable.
    (4) The risk of the contractor's inability to perform under the 
terms and conditions of the contract is low.
    (5) A multi-year contract will not inhibit competition from small 
businesses.
    (6) For a pharmaceutical item for which a patent has expired less 
than 4 years before the solicitation issue date, that there is no 
substantial likelihood that increased competition among potential 
contractors would occur during the term of the contract as the result of 
the availability of generic equivalents increasing during the term of 
the contract.
    (b) The Secretary has delegated authority to make the determinations 
specified in 817.105-1(a) as follows:
    (1) HCAs may make the above determinations and approve contracts 
that do not require legal/technical reviews under 801.602-70 and that do 
not contain a first year cancellation ceiling exceeding 20 percent of 
the contract value over the full multi-year term.
    (2) Authority to make the above determinations and to approve all 
other proposed multi-year contracts is delegated to the SPE and is 
further delegated to the DSPE. For approval purposes, the HCA will 
justify and document the use of a multi-year contract against each of 
the criteria specified in paragraphs (a)(1) through (a)(6) of this 
section and forward to the DSPE for approval. The justification must 
explain the cancellation ceiling and the method used to calculate that 
ceiling. The justification also must explain the advantages of multi-
year contracts over other alternative methods, e.g., option year 
contracts.
    (c) The contracting officer must develop the cancellation ceilings 
in accordance with FAR 17.106-1. (38 U.S.C. 114)

                          Subpart 817.2_Options



Sec. 817.202  Use of options.

    All solicitations developed under Office of Management and Budget 
Circular A-76 (Revised) cost comparisons will provide for four one-year 
renewal options as prescribed in FAR Subpart 17.2. The contracting 
officer must forward requests to use less or more than the prescribed 
contract period for Circular A-76 (Revised) cost comparisons to the DSPE 
for approval.



Sec. 817.204  Contracts.

    (a) The contracting officer must obtain the approval of the DSPE 
before awarding a contract that includes options exceeding the 5-year 
limitation

[[Page 200]]

specified in FAR 17.204(e). This requirement does not apply to contracts 
to be awarded by or on behalf of the VA Office of the Inspector General. 
The request for approval must include the following:
    (1) Supporting documentation, rationale, and justifications for the 
use of options (see FAR 17.205) and for exceeding the 5-year limitation.
    (2) Documentation that the contracting officer has considered and 
addressed the limitations specified in FAR 17.202(b) and (c).
    (b) Solicitations that require technical review in accordance with 
801.602-71 through 801.602-73 shall be submitted for review concurrently 
as provided therein.

                Subpart 817.4_Leader Company Contracting



Sec. 817.402  Limitations.

    (a) Except as provided in paragraph (b) of this section, the 
Government shall not initiate or execute leader company contracts.
    (b) The DSPE may designate a contracting officer to enter into a 
leader company contract for the benefit of VA and the Government. The 
DSPE must designate a contracting officer by name for a specific 
contract. The named contracting officer will submit the proposed 
contract, with a determination and finding, for legal review in 
accordance with 801.602-75.

      Subpart 817.5_Interagency Acquisitions Under the Economy Act



Sec. 817.502  General.

    (a) After December 31, 2008, any contract, memorandum of 
understanding, agreement, or other arrangement with any governmental 
entity to acquire goods and services, shall include in such contract, 
memorandum, agreement, or other arrangement a requirement that the 
entity will comply, to the maximum extent feasible, with the provisions 
of 38 U.S.C. 8127 and 8128, as implemented by the VA Acquisition 
Regulation, in acquiring such goods or services.
    (b) Nothing in this subsection shall be construed to supersede or 
otherwise affect the authorities provided under the Small Business Act 
(15 U.S.C. 631 et seq.).

[74 FR 64631, Dec. 8, 2009]

[[Page 201]]

                   SUBCHAPTER D_SOCIOECONOMIC PROGRAMS

                    PART 819_SMALL BUSINESS PROGRAMS

                         Subpart 819.2_Policies

Sec.

Sec. 819.201 General policy.

Sec. 819.202 Specific policies.

Sec. 819.202-1 Encouraging small business participation in acquisitions.

Sec. 819.202-5 Data collection and reporting requirements.

Sec. 819.202-70 HCA responsibilities.

Sec. 819.202-71 Additional contracting officer responsibilities.

Sec. 819.202-72 Order of precedence. [Reserved]

Subpart 819.3_Determination of Small Business Status for Small Business 
                                Programs


Sec. 819.307 SDVOSB/VOSB small business status protests.

               Subpart 819.5_Set-Asides For Small Business


Sec. 819.502 Setting aside acquisitions.

Sec. 819.502-2 Total small business set-asides.

Sec. 819.502-3 Partial set-asides.

     Subpart 819.6_Certificates of Competency and Determinations of 
                             Responsibility


Sec. 819.602 Procedures.

Sec. 819.602-3 Resolving differences between VA and the Small Business 
          Administration.

         Subpart 819.7_The Small Business Subcontracting Program


Sec. 819.704 Subcontracting plan requirements.

Sec. 819.705 Appeal of Contracting Officer decisions.

Sec. 819.709 Contract clause.

 Subpart 819.8_Contracting with the Small Business Administration (The 
                              8(a) Program)


Sec. 819.800 General.

 Subpart 819.70_Service-Disabled Veteran-Owned and Veteran-Owned Small 
                      Business Acquisition Program


Sec. 819.7001 General.

Sec. 819.7002 Applicability.

Sec. 819.7003 Eligibility.

Sec. 819.7004 Contracting Order of Priority.

Sec. 819.7005 Service-disabled veteran-owned small business set-aside 
          procedures.

Sec. 819.7006 Veteran-owned small business set-aside procedures.

Sec. 819.7007 Sole source awards to service-disabled veteran-owned small 
          business concerns.

Sec. 819.7008 Sole source awards to veteran-owned small business 
          concerns.

Sec. 819.7009 Contract clauses.

         Subpart 819.71_VA Mentor-Prot[eacute]g[eacute] Program

Sec.

Sec. 819.7101 Purpose.

Sec. 819.7102 Definitions.

Sec. 819.7103 Non-affiliation.

Sec. 819.7104 General policy.

Sec. 819.7105 Incentives for mentor participation.

Sec. 819.7106 Eligibility of Mentor and Prot[eacute]g[eacute] firms.

Sec. 819.7107 Selection of Prot[eacute]g[eacute] firms.

Sec. 819.7108 Application process.

Sec. 819.7109 VA review of application.

Sec. 819.7110 Developmental assistance.

Sec. 819.7111 Obligations under the Mentor-Prot[eacute]g[eacute] 
          Program.

Sec. 819.7112 Internal controls.

Sec. 819.7113 Reports.

Sec. 819.7114 Measurement of program success.

Sec. 819.7115 Solicitation provisions.

    Authority: 38 U.S.C. 8127 and 8128; 40 U.S.C. 121(c) and (d); 48 CFR 
1.301-1.304; and 15 U.S.C. 637(d)(4)(E).

    Source: 73 FR 2717, Jan. 15, 2008, unless otherwise noted.

                         Subpart 819.2_Policies



Sec. 819.201  General policy.

    The Secretary shall establish goals for each fiscal year for 
participation in Department contracts by SDVOSBs and VOSBs. In order to 
establish contracting priority for veteran-owned and controlled small 
businesses in accordance with 38 U.S.C. 8128, the Secretary may decrease 
other status-specific small business goals set forth by section 15(g)(1) 
of the Small Business Act (15 U.S.C. 644(g)(1)) upon consultation with 
the Administrator of the U.S. Small Business Administration (SBA).

[74 FR 64631, Dec. 8, 2009]



Sec. 819.202  Specific policies.



Sec. 819.202-1  Encouraging small business participation in 
          acquisitions.

    Contracting officers may negotiate payment terms of less than 30 
calendar

[[Page 202]]

days to encourage small business participation. A period of less than 7 
days may not be prescribed (see FAR 32.908(c)(2)). The contracting 
officer and the local fiscal officer must be in agreement on the 
negotiated payment terms before awarding the contract.



Sec. 819.202-5  Data collection and reporting requirements.

    (a) Administration heads, staff office directors, and HCAs must, in 
addition to the responsibilities designated in FAR 19.202-5, cooperate 
with OSDBU in formulating specific small business program goals and 
providing other data necessary for goal assessment.
    (b) Each VA acquisition activity shall establish goals for the 
expenditure of funds with preferred businesses within their projected 
annual budget. OSDBU is responsible for Department-wide goals and 
accomplishments and will approve or adjust each acquisition activity's 
goals.
    (c) A Procurement Preference Program Goals Report (Report Control 
Symbol 00-0427) shall be submitted annually by each acquisition activity 
to reach OSDBU by November 1. Each report shall contain total 
expenditure estimates and goals for the current fiscal year and 
explanations of the methods utilized to arrive at each proposed goal. 
Anticipated problems in the attainment of the proposed goal in any 
category shall also be identified. This information will be used in 
negotiating the Department goals with the Small Business Administration 
(SBA).
    (d) As an addendum to the report, each acquisition activity shall 
provide a narrative explaining the reason(s) for any shortfall(s) in the 
achievement of any previous fiscal year goal category.
    (e) Upon review by OSDBU of the proposed goals, each acquisition 
activity will be notified of the acceptance of goals as submitted, or of 
any deficiencies. If the goals are not acceptable, the acquisition 
activity will be requested to submit further written justification for 
the goals submitted. Based on documents submitted, OSDBU will make a 
final determination on the goal assignment.
    (f) Accomplishment of goals will be determined by OSDBU from data 
reported by acquisition activities into the Federal Procurement Data 
System-Next Generation (FPDS-NG).



Sec. 819.202-70  HCA responsibilities.

    An HCA must perform the following functions in support of the small 
business program. These functions cannot be delegated without written 
approval of the Director, OSBDU:
    (a) Develop, on an annual basis, a plan of operation to increase the 
share of contracts and purchase orders awarded to the small business 
programs prescribed in FAR Part 19. This plan must also include veteran-
owned and service-disabled veteran-owned small business concerns.
    (b) Promote goals for the small business programs set forth in FAR 
Part 19. This must also include veteran-owned and service-disabled 
veteran-owned small business concerns.
    (c) Review the types and classes of items and services to be 
purchased to determine the applicability of individual small business 
set-asides.
    (d) Review class set-asides, established in accordance with criteria 
in FAR 19.503, at least annually to determine whether items or services 
procured under a unilateral or joint set-aside should be modified or 
withdrawn.
    (e) Maintain updated lists of acquisitions reserved for small 
business on a class basis.
    (f) If the acquisition activity is assigned to an SBA Procurement 
Center Representative, assure that the representative is provided 
logistical support, cooperation, and access to all reasonably obtainable 
contract information directly pertinent to the SBA Procurement Center 
Representative's official duties.
    (g) Encourage technical personnel and end-users to participate in 
discussions with veteran-owned and service-disabled veteran-owned small 
business concerns.
    (h) Attend conferences and meetings publicizing small business 
programs. This responsibility may be delegated without the written 
approval of the Director, OSBDU.

[[Page 203]]



Sec. 819.202-71  Additional contracting officer responsibilities.

    In addition to the duties designated in FAR 19.202 through 19.202-6, 
contracting officers must perform the following functions in support of 
the small business program:
    (a) Make maximum use of small business source lists.
    (b) Assure that small business firms are identified on solicitation 
mailing lists and bid abstracts.
    (c) Assure that specifications are not unduly restrictive, thereby 
enabling small business participation to the maximum extent possible.
    (d) Assist and counsel small business firms with individual 
problems.
    (e) Provide for counseling non-responsive or non-responsible small 
business bidders to help qualify them for future awards.
    (f) Submit informational copies of all small business protests and 
appeals to the Director, OSBDU, at the same time they are submitted to 
the SBA.



Sec. 819.202-72  Order of precedence. [Reserved]

Subpart 819.3_Determination of Small Business Status for Small Business 
                                Programs



Sec. 819.307  SDVOSB/VOSB small business status protests.

    (a) All protests relating to whether an eligible VOSB or SDVOSB is a 
``small'' business for the purposes of any Federal program are subject 
to 13 CFR part 121 and must be filed in accordance with that part. For 
acquisitions under the authority of subpart 819.70, upon execution of an 
interagency agreement between VA and the SBA pursuant to the Economy Act 
(31 U.S.C. 1535), regarding service-disabled veteran-owned or veteran-
owned small business status, contracting officers shall forward all 
status protests to the Director, Office of Government Contracting (D/
GC), U.S. Small Business Administration (ATTN: VAAR Part 819 SDVOSB/VOSB 
Small Business Status Protests), 409 3rd Street, SW., Washington, DC 
20416, for disposition. Except for ownership and control issues to be 
determined in accordance with 38 CFR part 74, protests shall follow the 
procedures set forth in FAR 19.307 for both service-disabled veteran-
owned and veteran-owned small business status. However, contracting 
officers shall be solely responsible for determining VOSB and SDVOSB 
compliance with VAAR 804.1102.
    (b) If SBA sustains a service-disabled veteran-owned or veteran-
owned small business status protest and the contract has already been 
awarded, then the contracting officer cannot count the award as an award 
to a VOSB or SDVOSB and the concern cannot submit another offer as a 
VOSB or SDVOSB on a future VOSB or SDVOSB procurement under this part, 
as applicable, unless it demonstrates to VA that it has overcome the 
reasons for the determination of ineligibility.
    (c) Until execution of the interagency agreement referenced in 
subsection (a), for acquisitions under the authority of subpart 819.70, 
the Executive Director, VA Office of Small and Disadvantaged Business 
Utilization (OSDBU) shall decide all protests on service-disabled 
veteran-owned or veteran-owned small business status whether raised by 
the contracting officer or an offeror. Ownership and control shall be 
determined in accordance with 38 CFR part 74. The Executive Director's 
decision shall be final.
    (1) All protests must be in writing and must state all specific 
grounds for the protest. Assertions that a protested concern is not a 
service-disabled veteran-owned or veteran-owned small business concern, 
without setting forth specific facts or allegations, are insufficient. 
An offeror must submit its protest to the contracting officer. An 
offeror must deliver their protest in person, by facsimile, by express 
delivery service, or by the U.S. Postal Service within the applicable 
time period to the contracting officer.
    (2) An offeror's protest must be received by close of business on 
the fifth business day after bid opening (in sealed bid acquisitions) or 
by close of business on the fifth business day after notification by the 
contracting officer of the apparently successful offeror (in negotiated 
acquisitions). Any protest received after these time limits is untimely. 
Any protest received prior to bid opening or notification of intended

[[Page 204]]

award, whichever applies, is premature and shall be returned to the 
protester.
    (3) If the Executive Director sustains a service-disabled veteran-
owned or veteran-owned small business status protest and the contract 
has already been awarded, then the contracting officer cannot count the 
award as an award to a VOSB or SDVOSB and the concern cannot submit 
another offer as a VOSB or SDVOSB 7on a future VOSB or SDVOSB 
procurement under this part, as applicable, unless it demonstrates to VA 
that it has overcome the reasons for the determination of ineligibility.

[74 FR 64631, Dec. 8, 2009]

               Subpart 819.5_Set-Asides for Small Business



Sec. 819.502  Setting aside acquisitions.



Sec. 819.502-2  Total small business set-asides.

    (a) When a total small business set-aside is made, one of the 
following statements, as applicable, will be included in the 
solicitation for bids:
    (1) Notice of total small business set-aside, page ----, applies to 
all items in this solicitation.
    (2) Notice of total small business set-aside, page ----, applies to 
items ---- through ---- in this solicitation.
    (b) Contracting officers must ensure that the appropriate product or 
service classification and the related size standard are included in 
each solicitation.



Sec. 819.502-3  Partial set-asides.

    When, in accordance with the provisions of FAR 19.502-3, the 
contracting officer determines that a particular procurement will be 
partially set aside for small business participation, the solicitation 
for bids shall include the appropriate product or service classification 
and appropriate size standard, and the following statement shall be 
placed on the face page:

    Notice of partial set-aside, page ----, applies to item ---- through 
item ---- in this solicitation.

     Subpart 819.6_Certificates of Competency and Determinations of 
                             Responsibility



Sec. 819.602  Procedures.



Sec. 819.602-3  Resolving differences between VA and the Small Business 
          Administration.

    The Director, OSDBU, is the VA liaison with the SBA. Information 
copies of correspondence sent to the SBA seeking a certificate of 
competency determination must be concurrently provided to the Director, 
OSDBU. Before appealing a certificate of competency, the HCA must seek 
concurrence from the Director, OSDBU.

         Subpart 819.7_The Small Business Subcontracting Program

    Source: 74 FR 64632, Dec. 8, 2009, unless otherwise noted.



Sec. 819.704  Subcontracting plan requirements.

    (a) The contracting officer shall ensure that any subcontracting 
plans submitted by offerors include a goal that is at least commensurate 
with the annual VA SDVOSB prime contracting goal for the total value of 
planned subcontracts.
    (b) The contracting officer shall ensure that any subcontracting 
plans submitted by offerors include a goal that is at least commensurate 
with the annual VA VOSB prime contracting goal for the total value of 
all planned subcontracts.
    (c) VA's OSDBU shall review all prime contractor's subcontracting 
plan achievement reports to ensure that, in the case of a subcontract 
that is counted for purposes of meeting a goal in accordance with 
subparagraphs (a) and (b) of this section, the subcontract was actually 
awarded to a business concern that is eligible to be counted toward 
meeting the goal, as provided in 804.1102.



Sec. 819.705  Appeal of Contracting Officer decisions.

    (a) Acquisitions not exceeding the simplified acquisition threshold 
(SAT) and 819.7007 and 819.7008 are excluded from this section.

[[Page 205]]

    (b) When an interested party intends to appeal a contracting 
officer's decision to not use the set-aside authority contained in 
subpart 819.70, the party shall notify the contracting officer, in 
writing, of its intent to challenge the decision. The contracting 
officer has 5 working days to reply to the challenge by either revising 
the strategy or indicating the rationale for not setting-aside the 
requirement. Upon receipt of the decision, the interested party may 
appeal to the Head of the Contracting Activity (HCA). Such appeal shall 
be filed within 5 working days of receipt of the contracting officer's 
decision. The HCA has 5 working days to respond to the appeal. The 
contracting officer shall suspend action on the acquisition unless the 
HCA makes a written determination that urgent circumstances exist which 
would significantly affect the interests of the government. The decision 
of the HCA shall be final.
    (c) Prime contractors submitting businesses declared ineligible for 
credit in SDVOSB and/or VOSB subcontracting plans may appeal to the 
Executive Director, Office of Small and Disadvantaged Business 
Utilization and Center for Veterans Enterprise (00VE), U.S. Department 
of Veterans Affairs, 810 Vermont Avenue, NW., Washington, DC 20420, 
within 5 working days of receipt of information declaring their 
subcontractor ineligible. The Executive Director shall have 5 working 
days to respond. The decision of the Executive Director may be appealed 
to the Senior Procurement Executive (SPE) within 5 working days. The SPE 
shall have 15 working days to respond and that decision shall be final.



Sec. 819.709  Contract clause.

    The contracting officer shall insert VAAR clause 852.219-9, Small 
Business Subcontracting Plan Minimum Requirements, in solicitations and 
contracts that include FAR clause 52.219-9, Small Business 
Subcontracting Plan.

 Subpart 819.8_Contracting With the Small Business Administration (The 
                              8(a) Program)



Sec. 819.800  General.

    (a) No contract will be entered into with SBA under section 8(a) of 
the Small Business Act (15 U.S.C. 637(a)) unless a certification is made 
by the Administrator of that agency, or designee, that SBA is competent 
to perform the contract.
    (b) When it is determined that the requirements of VA are 
appropriate for inclusion in this program, the contracting officer will 
make this fact known to proper officials of the SBA regional office 
servicing his/her area. However, when projects funded from minor 
construction appropriation (between $400,000 and $2 million) are 
proposed for 8(a) acquisition, the Director, OSDBU (00SB), shall be 
contacted by telephone or notified in writing in order to afford the 
OSDBU an opportunity to identify possible 8(a) sources prior to 
apprising SBA officials. If the certification required by paragraph (a) 
of this section is received, the VA contracting officer will secure from 
SBA the name(s) and location(s) of their subcontractor(s) and the unit 
price(s) to be paid. Should these prices be within a range acceptable to 
VA, the contracting officer will notify SBA of acceptance.
    (c) The contract will be made between VA and SBA and will be 
administered by VA.

 Subpart 819.70_Service-Disabled Veteran-Owned and Veteran-Owned Small 
                      Business Acquisition Program

    Source: 74 FR 64632, Dec. 8, 2009, unless otherwise noted.



Sec. 819.7001  General.

    (a) Sections 502 and 503 of the Veterans Benefits, Health Care, and 
Information Technology Act of 2006 (38 U.S.C. 8127-8128), created an 
acquisition program for small business concerns owned and controlled by 
service-disabled veterans and those owned and controlled by veterans for 
VA.
    (b) The purpose of the program is to provide contracting assistance 
to SDVOSBs and VOSBs.



Sec. 819.7002  Applicability.

    This subpart applies to VA contracting activities and to its prime 
contractors. Also, this subpart applies

[[Page 206]]

to any government entity that has a contract, memorandum of 
understanding, agreement, or other arrangement with VA to acquire goods 
and services for VA in accordance with 817.502.



Sec. 819.7003  Eligibility.

    (a) Eligibility of SDVOSBs and VOSBs continues to be governed by the 
Small Business Administration regulations, 13 CFR subparts 125.8 through 
125.13, as well as the FAR, except where expressly directed otherwise by 
the VAAR, and 38 CFR verification regulations for SDVOSBs and VOSBs.
    (b) At the time of submission of offer, the offeror must represent 
to the contracting officer that it is a--
    (1) SDVOSB concern or VOSB concern;
    (2) Small business concern under the North American Industry 
Classification System (NAICS) code assigned to the acquisition; and
    (3) Verified for eligibility in the VIP database.
    (c) A joint venture may be considered an SDVOSB or VOSB concern if
    (1) At least one member of the joint venture is an SDVOSB or VOSB 
concern, and makes the representations in paragraph (b) of this section;
    (2) Each other concern is small under the size standard 
corresponding to the NAICS code assigned to the procurement;
    (3) The joint venture meets the requirements of paragraph 7 of the 
size standard explanation of affiliates in FAR 19.101; and
    (4) The joint venture meets the requirements of 13 CFR 125.15(b), 
modified to include veteran-owned small businesses where this CFR 
section refers to SDVOSB concerns.
    (d) Any SDVOSB or VOSB concern (nonmanufacturer) must meet the 
requirements in FAR 19.102(f) to receive a benefit under this program.



Sec. 819.7004  Contracting Order of Priority.

    In determining the acquisition strategy applicable to an 
acquisition, the contracting officer shall consider, in the following 
order of priority, contracting preferences that ensure contracts will be 
awarded:
    (a) To SDVOSBs;
    (b) To VOSB, including but not limited to SDVOSBs;
    (c) Pursuant to--
    (1) Section 8(a) of the Small Business Act (15 U.S.C. 637(a)); or
    (2) The Historically-Underutilized Business Zone (HUBZone) Program 
(15 U.S.C. 657a); and
    (d) Pursuant to any other small business contracting preference.



Sec. 819.7005  Service-disabled veteran-owned small business set-aside 
          procedures.

    (a) The contracting officer shall consider SDVOSB set-asides before 
considering VOSB set-asides. Except as authorized by 813.106, 819.7007 
and 819.7008, the contracting officer shall set-aside an acquisition for 
competition restricted to SDVOSB concerns upon a reasonable expectation 
that,
    (1) Offers will be received from two or more eligible SDVOSB 
concerns; and
    (2) Award will be made at a fair and reasonable price.
    (b) When conducting SDVOSB set-asides, the contracting officer shall 
ensure:
    (1) Eligibility is extended to businesses owned and operated by 
surviving spouses; and
    (2) Businesses are registered and verified as eligible in the VIP 
database prior to making an award.
    (c) If the contracting officer receives only one acceptable offer at 
a fair and reasonable price from an eligible SDVOSB concern in response 
to a SDVOSB set-aside, the contracting officer should make an award to 
that concern. If the contracting officer receives no acceptable offers 
from eligible SDVOSB concerns, the set-aside shall be withdrawn and the 
requirement, if still valid, set aside for VOSB competition, if 
appropriate.



Sec. 819.7006  Veteran-owned small business set-aside procedures.

    (a) The contracting officer shall consider SDVOSB set-asides before 
considering VOSB set-asides. Except as authorized by 813.106, 819.7007 
and 819.7008, the contracting officer shall set aside an acquisition for 
competition restricted to VOSB concerns upon a reasonable expectation 
that:

[[Page 207]]

    (1) Offers will be received from two or more eligible VOSB concerns; 
and
    (2) Award will be made at a fair and reasonable price.
    (b) If the contracting officer receives only one acceptable offer at 
a fair and reasonable price from an eligible VOSB concern in response to 
a VOSB set-aside, the contracting officer should make an award to that 
concern. If the contracting officer receives no acceptable offers from 
eligible VOSB concerns, the set-aside shall be withdrawn and the 
requirement, if still valid, set aside for other small business 
programs, as appropriate.
    (c) When conducting VOSB set-asides, the contracting officer shall 
ensure the business is registered and verified as eligible in the VIP 
database prior to making an award.



Sec. 819.7007  Sole source awards to service-disabled veteran-owned 
          small business concerns.

    (a) A contracting officer may award contracts to SDVOSB concerns on 
a sole source basis provided:
    (1) The anticipated award price of the contract (including options) 
will not exceed $5 million;
    (2) The requirement is synopsized in accordance with FAR part 5;
    (3) The SDVOSB concern has been determined to be a responsible 
contractor with respect to performance; and
    (4) Award can be made at a fair and reasonable price.
    (b) The contracting officer's determination whether to make a sole 
source award is a business decision wholly within the discretion of the 
contracting officer. A determination that only one SDVOSB concern is 
available to meet the requirement is not required.
    (c) When conducting a SDVOSB sole source acquisition, the 
contracting officer shall ensure businesses are registered and verified 
as eligible in the VIP database prior to making an award.



Sec. 819.7008  Sole source awards to veteran-owned small business 
          concerns.

    (a) A contracting officer may award contracts to VOSB concerns on a 
sole source basis provided:
    (1) The anticipated award price of the contract (including options) 
will not exceed $5 million;
    (2) The requirement is synopsized in accordance with FAR part 5;
    (3) The VOSB concern has been determined to be a responsible 
contractor with respect to performance;
    (4) Award can be made at a fair and reasonable price; and
    (5) No responsible SDVOSB concern has been identified.
    (b) The contracting officer's determination whether to make a sole 
source award is a business decision wholly within the discretion of the 
contracting officer. A determination that only one VOSB concern is 
available to meet the requirement is not required.
    (c) When conducting a VOSB sole source acquisition, the contracting 
officer shall ensure businesses are registered and verified as eligible 
in the VIP database prior to making an award.



Sec. 819.7009  Contract clauses.

    The contracting officer shall insert VAAR clause 852.219-10, Notice 
of Total Service-Disabled Veteran-Owned Small Business Set-Aside or 
852.219-11, Notice of Total Veteran-Owned Small Business Set-Aside in 
solicitations and contracts for acquisitions under this subpart.

         Subpart 819.71_VA Mentor-Prot[eacute]g[eacute] Program

    Source: 74 FR 64633, Dec. 8, 2009, unless otherwise noted.



Sec. 819.7101  Purpose.

    The VA Mentor-Prot[eacute]g[eacute] Program is designed to assist 
service-disabled veteran-owned small businesses (SDVOSBs) and veteran-
owned small businesses (VOSBs) in enhancing their capabilities to 
perform contracts and subcontracts for VA. The Mentor-
Prot[eacute]g[eacute] Program is also designed to improve the 
performance of VA contractors and subcontractors by providing 
developmental assistance to prot[eacute]g[eacute] entities, fostering 
the establishment of long-term business relationships between SDVOSBs, 
VOSBs and prime contractors, and increasing

[[Page 208]]

the overall number of SDVOSBs and VOSBs that receive VA contract and 
subcontract awards. A firm's status as a prot[eacute]g[eacute] under a 
VA contract shall not have an effect on the firm's eligibility to seek 
other prime contracts or subcontracts.



Sec. 819.7102  Definitions.

    (a) A Mentor is a contractor that elects to promote and develop 
SDVOSBs and/or VOSBs by providing developmental assistance designed to 
enhance the business success of the prot[eacute]g[eacute]. A mentor may 
be a large or small business concern.
    (b) OSDBU is the Office of Small and Disadvantaged Business 
Utilization. This is the VA office responsible for administering, 
implementing and coordinating the Department's small business programs, 
including the Mentor-Prot[eacute]g[eacute] Program.
    (c) Program refers to the VA Mentor-Prot[eacute]g[eacute] Program as 
described in this Subpart.
    (d) Prot[eacute]g[eacute] means a SDVOSB or VOSB, as defined in 
802.101, which meets federal small business size standards in its 
primary NAICS code and which is the recipient of developmental 
assistance pursuant to a Mentor-Prot[eacute]g[eacute] agreement.



Sec. 819.7103  Non-affiliation.

    A Prot[eacute]g[eacute] firm will not be considered an affiliate of 
a mentor firm solely on the basis that the prot[eacute]g[eacute] firm is 
receiving developmental assistance from the mentor firm under VA's 
Mentor-Prot[eacute]g[eacute] Program. The determination of affiliation 
is a function of the SBA.



Sec. 819.7104  General policy.

    (a) To be eligible, mentors and prot[eacute]g[eacute]s must not be 
listed on the Excluded Parties List System, located at http://
www.epls.gov. Mentors will provide appropriate developmental assistance 
to enhance the capabilities of prot[eacute]g[eacute]s to perform as 
prime contractors and/or subcontractors.
    (b) VA reserves the right to limit the number of participants in the 
program in order to ensure its effective management of the Mentor-
Prot[eacute]g[eacute] Program.



Sec. 819.7105  Incentives for prime contractor participation.

    (a) Under the Small Business Act, 15 U.S.C. 637(d)(4)(e), VA is 
authorized to provide appropriate incentives to encourage subcontracting 
opportunities for small business consistent with the efficient and 
economical performance of the contract. This authority is limited to 
negotiated procurements. FAR 19.202-1 provides additional guidance.
    (b) Costs incurred by a mentor to provide developmental assistance, 
as described in 819.7110 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 VA contract. If VA is the mentor's responsible audit agency 
under FAR 42.703-1, VA will consider these costs in determining indirect 
cost rates. If VA is not the responsible audit agency, mentors are 
encouraged to enter into an advance agreement with their responsible 
audit agency on the treatment of such costs when determining indirect 
cost rates.
    (c) In addition to subparagraph (b) of this section, contracting 
officers shall give mentors evaluation credit under 852.219-52, 
Evaluation Factor for Participation in the VA Mentor-
Prot[eacute]g[eacute] Program, considerations for subcontracts awarded 
pursuant to their Mentor-Prot[eacute]g[eacute] Agreements and their 
subcontracting plans. Therefore:
    (1) Contracting officers may evaluate subcontracting plans 
containing mentor-prot[eacute]g[eacute] arrangements more favorably than 
subcontracting plans without Mentor-Prot[eacute]g[eacute] Agreements.
    (2) Contracting officers may assess the prime contractor's 
compliance with the subcontracting plans submitted in previous contracts 
as a factor in evaluating past performance under FAR 15.305(a)(2)(v) and 
determining contractor responsibility 19.705-5(a)(1).
    (d) OSDBU Mentoring Award. A non-monetary award will be presented 
annually to the mentoring firm providing the most effective 
developmental support to a prot[eacute]g[eacute]. The Mentor-
Prot[eacute]g[eacute] Program Manager will recommend an award winner to 
the OSDBU Director.
    (e) OSDBU Mentor-Prot[eacute]g[eacute] Annual Conference. At the 
conclusion of each year in the Mentor-Prot[eacute]g[eacute] Program, 
mentor firms will be invited to brief contracting officers, program 
leaders,

[[Page 209]]

office directors and other guests on program progress.



Sec. 819.7106  Eligibility of Mentor and Prot[eacute]g[eacute] firms.

    Eligible business entities approved as mentors may enter into 
agreements (hereafter referred to as ``Mentor-Prot[eacute]g[eacute] 
Agreement'' or ``Agreement'' and explained in 819.7108) with eligible 
prot[eacute]g[eacute]s. Mentors provide appropriate developmental 
assistance to enhance the capabilities of prot[eacute]g[eacute]s to 
perform as contractors and/or subcontractors. Eligible small business 
entities capable of providing developmental assistance may be approved 
as mentors. Prot[eacute]g[eacute]s may participate in the program in 
pursuit of a prime contract or as subcontractors under the mentor's 
prime contract with VA, but are not required to be a subcontractor to a 
VA prime contractor or be a VA prime contractor.
    (a) Eligibility. A Mentor:
    (1) May be either a large or small business entity and either a 
prime contractor or subcontractor;
    (2) Must be able to provide developmental assistance that will 
enhance the ability of Prot[eacute]g[eacute]s to perform as prime 
contractors or subcontractors; and
    (3) Will be encouraged to enter into arrangements with entities with 
which it has established business relationships.
    (b) Eligibility. A Prot[eacute]g[eacute]:
    (1) Must be a SDVOSB or VOSB as defined in 802.101;
    (2) Must meet the size standard corresponding to the NAICS code that 
the Mentor prime contractor believes best describes the product or 
service being acquired by the subcontract; and
    (c) Prot[eacute]g[eacute]s may have multiple mentors. 
Prot[eacute]g[eacute]s participating in mentor-prot[eacute]g[eacute] 
programs in addition to VA's Program should maintain a system for 
preparing separate reports of mentoring activity so that results of VA's 
Program can be reported separately from any other agency program.
    (d) A prot[eacute]g[eacute] firm shall self-represent to a mentor 
firm that it meets the requirements set forth in paragraph (b) of this 
section. Mentors shall confirm eligibility by documenting the verified 
status of the prot[eacute]g[eacute] in the VetBiz.gov VIP database. 
Prot[eacute]g[eacute]s must maintain verified status throughout the term 
of the Mentor-Prot[eacute]g[eacute] Agreement. Failure to do so shall 
result in cancellation of the Agreement.



Sec. 819.7107  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 SDVOSB or VOSB firms whose core competencies support VA's 
mission; and choose SDVOSB and/or VOSB prot[eacute]g[eacute]s in 
addition to firms with whom they have established business 
relationships.
    (b) Mentors may have multiple prot[eacute]g[eacute]s. However, to 
preserve the integrity of the Program and assure the quality of 
developmental assistance provided to prot[eacute]g[eacute]s, VA reserves 
the right to limit the total number of prot[eacute]g[eacute]s 
participating under each mentor firm for the Mentor-
Prot[eacute]g[eacute] Program.
    (c) The selection of prot[eacute]g[eacute] firms by mentor firms may 
not be protested, except that any protest regarding the size or 
eligibility status of an entity selected by a mentor shall be handled in 
accordance with the FAR and SBA regulations.



Sec. 819.7108  Application process.

    (a) Firms interested in becoming approved mentor-
prot[eacute]g[eacute] participants must submit a joint written VA 
Mentor-Prot[eacute]g[eacute] Agreement to the VA OSDBU for review and 
approval. The proposed Mentor-Prot[eacute]g[eacute] Agreement will be 
evaluated on the extent to which the mentor plans to provide 
developmental assistance. Evaluations will consider the nature and 
extent of technical and managerial support as well as any proposed 
financial assistance in the form of equity investment, loans, joint-
venture, and traditional subcontracting support.
    (b) The Mentor-Prot[eacute]g[eacute] Agreement must contain:
    (1) Names, addresses, phone numbers, and e-mail addresses (if 
available) of the mentor and prot[eacute]g[eacute] firm(s) and a point 
of contact for both mentor and prot[eacute]g[eacute] who will oversee 
the agreement;
    (2) A statement from the prot[eacute]g[eacute] firm that the firm is 
currently eligible

[[Page 210]]

as a SDVOSB or VOSB to participate in VA's Mentor-Prot[eacute]g[eacute] 
Program;
    (3) A description of the mentor's ability to provide developmental 
assistance to the prot[eacute]g[eacute] and the type of developmental 
assistance that will be provided, to include a description of the types 
and dollar amounts of subcontract work, if any, that may be awarded to 
the prot[eacute]g[eacute] firm;
    (4) Duration of the Agreement, including rights and responsibilities 
of both parties (mentor and prot[eacute]g[eacute]), with bi-annual 
reviews;
    (5) Termination procedures, including procedures for the parties' 
voluntary withdrawal from the Program. The Agreement shall require the 
mentor or the prot[eacute]g[eacute] to notify the other firm and VA 
OSDBU in writing at least 30 days in advance of its intent to 
voluntarily terminate the Agreement;
    (6) A schedule with milestones for providing assistance;
    (7) Criteria for evaluation of the prot[eacute]g[eacute]'s 
developmental success;
    (8) A plan addressing how the mentor will increase the quality of 
the prot[eacute]g[eacute] firm's technical capabilities and contracting 
and subcontracting opportunities;
    (9) An estimate of the total cost of the planned mentoring 
assistance to be provided to the Prot[eacute]g[eacute];
    (10) An agreement by both parties to comply with the reporting 
requirements of 819.7113;
    (11) A plan for accomplishing unfinished work should the Agreement 
be voluntarily cancelled;
    (12) Other terms and conditions, as appropriate; and
    (13) Signatures and date(s).
    (c) The Agreement defines the relationship between the mentor and 
the prot[eacute]g[eacute] firms only. The Agreement does not create any 
privity of contract between the mentor and VA or the 
prot[eacute]g[eacute] and VA.



Sec. 819.7109  VA review of application.

    (a) VA OSDBU will review the information to establish the mentor and 
prot[eacute]g[eacute] eligibility and to ensure that the information 
that is in VAAR 819.7108 is included. If the application relates to a 
specific contract, then OSDBU will consult with the responsible 
contracting officer on the adequacy of the proposed Agreement, as 
appropriate. OSDBU will complete its review no later than 30 calendar 
days after receipt of the application or after consultation with the 
contracting officer, whichever is later. There is no charge to apply for 
the Mentor-Prot[eacute]g[eacute] Program.
    (b) After OSDBU completes its review and provides written approval, 
the mentor may execute the Agreement and implement the developmental 
assistance as provided under the Agreement. OSDBU will post a copy of 
the Mentor-Prot[eacute]g[eacute] Agreements to a VA Web site to be 
accessible to VA contracting officers for review for any VA contracts 
affected by the Agreement.
    (c) If the application is disapproved, the mentor may provide 
additional information for reconsideration. OSDBU will complete review 
of any supplemental material no later than 30 days after its receipt. 
Upon finding deficiencies that VA considers correctable, OSDBU will 
notify the mentor and prot[eacute]g[eacute] and request correction of 
deficiencies to be provided within 15 days.



Sec. 819.7110  Developmental assistance.

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



Sec. 819.7111  Obligations under the Mentor-Prot[eacute]g[eacute] 
          Program.

    (a) A mentor or prot[eacute]g[eacute] may voluntarily withdraw from 
the Program. However, in no event shall such withdrawal impact the 
contractual requirements under any prime contract with VA.

[[Page 211]]

    (b) Mentors and prot[eacute]g[eacute]s shall submit reports to VA 
OSDBU in accordance with 819.7113.



Sec. 819.7112  Internal controls.

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



Sec. 819.7113  Reports.

    (a) Mentor and prot[eacute]g[eacute] entities shall submit to VA's 
OSDBU bi-annual reports on progress under the Mentor-
Prot[eacute]g[eacute] Agreement. VA will evaluate reports by considering 
the following:
    (1) Specific actions taken by the mentor during the evaluation 
period to increase the participation of their prot[eacute]g[eacute](s) 
as suppliers to VA, other government agencies and to commercial 
entities;
    (2) Specific actions taken by the mentor during the evaluation 
period to develop technical and administrative expertise of a 
prot[eacute]g[eacute] as defined in the Agreement;
    (3) The extent to which the prot[eacute]g[eacute] has met the 
developmental objectives in the Agreement;
    (4) The extent to which the mentor's participation in the Mentor-
Prot[eacute]g[eacute] Program impacted the prot[eacute]g[eacute]'(s) 
ability to receive contract(s) and subcontract(s) from private firms and 
federal agencies other than VA; and, if deemed necessary;
    (5) Input from the prot[eacute]g[eacute] on the nature of the 
developmental assistance provided by the mentor.
    (b) OSDBU will submit annual reports to the relevant contracting 
officer regarding participating prime contractor(s)' performance in the 
Program.
    (c) In addition to the written progress report in paragraph (a) of 
this section, at the mid-term point in the Mentor-Prot[eacute]g[eacute] 
Agreement, the mentor and the prot[eacute]g[eacute] shall formally brief 
the VA OSDBU regarding program accomplishments as pertains to the 
approved agreement.
    (d) Mentor and prot[eacute]g[eacute] firms shall submit an 
evaluation to OSDBU at the conclusion of the mutually agreed upon 
Program period, the conclusion of the contract, or the voluntary 
withdrawal by either party from the Program, whichever comes first.



Sec. 819.7114  Measurement of program success.

    The overall success of the VA 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 quality of the technical capabilities of the 
prot[eacute]g[eacute] firm.
    (b) An increase in the number and dollar value of contract and 
subcontract awards to prot[eacute]g[eacute] firms since the time of 
their entry into the program attributable to the mentor-
prot[eacute]g[eacute] relationship (under VA contracts, contracts 
awarded by other Federal agencies and under commercial contracts.)



Sec. 819.7115  Solicitation provisions.

    (a) Insert 852.219-71, VA Mentor-Prot[eacute]g[eacute] Program, in 
solicitations that

[[Page 212]]

include FAR clause 52.219-9, Small Business Subcontracting Plan.
    (b) Insert 852.219-72, Evaluation Factor for Participation in the VA 
Mentor-Prot[eacute]g[eacute] Program, in solicitations that include an 
evaluation factor for participation in VA's Mentor-Prot[eacute]g[eacute] 
Program in accordance with 819.7105 and that also include FAR clause 
52.219-9, Small Business Subcontracting Plan.

      PART 822_APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS

       Subpart 822.3_Contract Work Hours and Safety Standards Act

Sec.

Sec. 822.304 Variations, tolerances, and exemptions.

Sec. 822.305 Contract clause.

   Subpart 822.4_Labor Standards for Contracts Involving Construction


Sec. 822.406 Administration and enforcement.

Sec. 822.406-11 Contract terminations.

    Authority: 29 CFR 5.15(d); 40 U.S.C. 121(c); 48 CFR 1.301-1.304.

    Source: 73 FR 2717, Jan. 15, 2008, unless otherwise noted.

       Subpart 822.3_Contract Work Hours and Safety Standards Act



Sec. 822.304  Variations, tolerances, and exemptions.

    When issuing a contract for nursing home care, a contracting officer 
may exempt a contractor from certain requirements of the Contract Work 
Hours and Safety Standards Act (40 U.S.C. 3701-3708) regarding the 
payment of overtime (see 29 CFR 5.15(d)(2) and 852.222-70).



Sec. 822.305  Contract clause.

    The contracting officer shall insert the clause at 852.222-70, 
Contract Work Hours and Safety Standards Act--nursing home care contract 
supplement, in solicitations and contracts for nursing home care when 
the FAR clause at 52.222-4, Contract Work Hours and Safety Standards 
Act--Overtime Compensation, is included.

   Subpart 822.4_Labor Standards for Contracts Involving Construction



Sec. 822.406  Administration and enforcement.



Sec. 822.406-11  Contract terminations.

    (a) Contracting officers must submit any proposed termination of a 
contract based on violations of the labor standard provisions of the 
contract to OGC for review and comment prior to taking final action. The 
submittal must include a detailed explanation of the facts and 
circumstances involved. Contracting officers, except those in the Office 
of Construction and Facilities Management, shall forward the submittal 
to OGC through the DSPE. Contracting officers in the Office of 
Construction and Facilities Management shall forward the submittal to 
OGC through the Director, Office of Construction and Facilities 
Management.
    (b) If the contract is to be terminated, the DSPE or the Director, 
Office of Construction and Facilities Management, must submit the 
reports required by 29 CFR 5.7(d) over the signature of the SPE.

  PART 823_ENVIRONMENT, ENERGY AND WATER EFFICIENCY, RENEWABLE ENERGY 
  TECHNOLOGIES, OCCUPATIONAL SAFETY, AND DRUG-FREE WORKPLACE [RESERVED]

        PART 824_PROTECTION OF PRIVACY AND FREEDOM OF INFORMATION

             Subpart 824.1_Protection of Individual Privacy

Sec.

Sec. 824.102 General.

                Subpart 824.2_Freedom of Information Act


Sec. 824.203 Policy.

    Authority: 38 CFR 1.550-1.559 and 1.575-1.584; 40 U.S.C. 121(c), and 
48 CFR 1.301-1.304.

    Source: 73 FR 2717, Jan. 15, 2008, unless otherwise noted.

[[Page 213]]

             Subpart 824.1_Protection of Individual Privacy



Sec. 824.102  General.

    VA rules implementing the Privacy Act of 1974 are in 38 CFR 1.575 
through 1.584.

                Subpart 824.2_Freedom of Information Act



Sec. 824.203  Policy.

    VA rules implementing the Freedom of Information Act are in 38 CFR 
1.550 through 1.559.

                      PART 825_FOREIGN ACQUISITION

                 Subpart 825.1_Buy American Act_Supplies

Sec.

Sec. 825.103 Exceptions.

Sec. 825.104 Nonavailable articles.

          Subpart 825.2_Buy American Act_Construction Materials


Sec. 825.202 Exceptions.

Sec. 825.205 Post-award determinations.

                      Subpart 825.6_Trade Sanctions


Sec. 825.602 Exceptions.

      Subpart 825.8_Other International Agreements and Coordination


Sec. 825.870 Technical assistance.

                    Subpart 825.9_Customs and Duties


Sec. 825.902 Procedures.

Sec. 825.902-70 Technical assistance.

        Subpart 825.10_Additional Foreign Acquisition Regulations


Sec. 825.1001 Waiver of right to examination of records.

       Subpart 825.11_Solicitation Provisions and Contract Clauses


Sec. 825.1102 Acquisition of construction.

    Authority: 40 U.S.C. 121(c) and 48 CFR 1.301-1.304.

    Source: 73 FR 2717, Jan. 15, 2008, unless otherwise noted.

                 Subpart 825.1_Buy American Act_Supplies



Sec. 825.103  Exceptions.

    (a) Public interest. When a contracting officer believes that a 
determination that domestic preference would be inconsistent with the 
public interest is necessary under FAR 25.103(a), the contracting 
officer must submit the request for determination to the DSPE for 
submission to the SPE, who will forward the request to the Secretary for 
approval. The request for determination must contain all the facts and 
other pertinent information upon which a determination may be made.
    (b) Non-availability. (1) For each determination of non-availability 
made in accordance with FAR 25.103(b)(2)(i), the HCA must do the 
following:
    (i) Factually support the determination and include the supporting 
facts in the contract file.
    (ii) Forward a copy of the determination, along with supporting 
documentation, to the DSPE.
    (2) If the HCA believes that the non-availability of an article is 
likely to affect future acquisitions, include a recommendation that a 
copy of the determination and supporting documentation be forwarded to 
the Civilian Agency Acquisition Council (CAAC) for possible addition to 
the list of non-available articles in FAR 25.104. The DSPE will decide 
whether to submit the material to the CAAC.



Sec. 825.104  Nonavailable articles.

    The following items are added to the list of nonavailable articles 
contained in FAR 25.104:

Glass, lead
Insulin, human

          Subpart 825.2_Buy American Act_Construction Materials



Sec. 825.202  Exceptions.

    (a) When a determination is required under FAR 25.202(a)(1), the 
contracting officer must submit the request for determination to the 
DSPE for submission to the SPE, who will forward the request to the 
Secretary. The submission must contain all the facts and other pertinent 
information necessary

[[Page 214]]

for the Secretary to make a determination.
    (b) For each determination of non-availability that the HCA makes in 
accordance with FAR 25.202(a)(2), the HCA must do the following:
    (1) Factually support the determination in writing and include the 
determination in the contract file.
    (2) Forward a copy of the determination, along with supporting 
documentation, to the Director, Office of Construction and Facilities 
Management, through the DSPE.
    (3) If the HCA believes that the non-availability of an article is 
likely to affect future acquisitions, include a recommendation that a 
copy of the determination and supporting documentation be forwarded to 
the Civilian Agency Acquisition Council (CAAC) for possible addition to 
the list of non-available articles in FAR 25.104. The DSPE will decide 
whether to submit the material to the CAAC.



Sec. 825.205  Post-award determinations.

    A post-award determination that an exception to the Buy American Act 
applies, as provided in FAR 25.205(c), will be made in accordance with 
FAR 25.202 and 825.202.

                      Subpart 825.6_Trade Sanctions



Sec. 825.602  Exceptions.

    When the contracting officer determines it to be in the best 
interest of the Government, the contracting officer may request an 
exception to the requirements of FAR 25.601 from the Secretary through 
the DSPE and the SPE. Each such request must be fully justified and 
include all pertinent facts, as provided in FAR 25.602(b). The SPE is 
responsible for notifying the U.S. Trade Representative of approved 
requests, as required by FAR 25.602(b)(2).

      Subpart 825.8_Other International Agreements and Coordination



Sec. 825.870  Technical assistance.

    Contracting officers may obtain technical information or guidance on 
international agreements and treaties for procurements outside of the 
United States by contacting the Executive Director and Chief Operating 
Officer, VA National Acquisition Center.

                    Subpart 825.9_Customs and Duties



Sec. 825.902  Procedures.



Sec. 825.902-70  Technical assistance.

    Should the regulations contained in FAR Subpart 25.9 be inadequate 
to meet the particular needs of the contracting officer in clearing 
items through customs and/or obtaining duty-free entry of goods, the 
contracting officer should contact the nearest U.S. Customs and Boarder 
Protection office for technical assistance. The location of the nearest 
office can be found at http://www.customs.gov/xp/cgov/toolbox/contacts/
cmcs/.

        Subpart 825.10_Additional Foreign Acquisition Regulations



Sec. 825.1001  Waiver of right to examination of records.

    (a) The contracting officer must prepare proposed determinations and 
findings to use either of the following:
    (1) Alternate I of the FAR clause at 52.212-5, Contract Terms and 
Conditions Required to Implement Statutes or Executive Orders--
Commercial Items.
    (2) Alternate III of the FAR clause at 52.215-2, Audit and Records--
Negotiation.
    (b) The contracting officer must submit the determinations and 
findings to the DSPE for submission to the SPE, who will forward the 
request to the Secretary for the signature, as provided in FAR 
25.1001(a)(2)(iii). The submission must include all appropriate 
documentation.
    (c) The Secretary, upon concurring with the contracting officer's 
proposed determination and findings, will, if required by FAR 
25.1001(a)(2)(iii), forward the document to the Comptroller General for 
concurrence.
    (d) The completed determination and findings will be made part of 
the contract file.

[[Page 215]]

       Subpart 825.11_Solicitation Provisions and Contract Clauses



Sec. 825.1102  Acquisition of construction.

    The Buy American Act (41 U.S.C. 10a-d), except as modified by 
various trade agreements (see FAR Part 25), requires that only domestic 
construction material be used in the performance of contracts for 
construction. For solicitations and contracts for construction that 
contain a FAR clause related to the Buy American Act, the contracting 
officer shall insert the applicable VAAR clause, with or without an 
alternate, as shown in Table 825.1102:

                             Table 825.1102
------------------------------------------------------------------------
                FAR clause                     VAAR clause to be used
------------------------------------------------------------------------
FAR 52.225-9, Buy American Act--            852.236-89, Buy American
 Construction Materials.                     Act.
FAR clause 52.225-11, Buy American Act--    852.236-89, Buy American
 Construction Materials under Trade          Act, with its Alternate I.
 Agreements, without its Alternate I (see
 FAR 25.1102(c)).
FAR clause 52.225-11, Buy American Act--    852.236-89, Buy American
 Construction Materials under Trade          Act, with its Alternate II.
 Agreements, with its Alternate I (see FAR
 25.1102(c)(3)).
------------------------------------------------------------------------

                        PART 826_OTHER SOCIOECO-
                        NOMIC PROGRAMS [RESERVED]

      
      

[[Page 216]]

              SUBCHAPTER E_GENERAL CONTRACTING REQUIREMENTS

                      PART 828_BONDS AND INSURANCE

           Subpart 828.1_Bonds and Other Financial Protections

Sec.

Sec. 828.101 Bid guarantees.

Sec. 828.101-2 Solicitation provision or contract clause.

Sec. 828.101-70 Safekeeping and return of bid guarantee.

Sec. 828.106 Administration.

Sec. 828.106-6 Furnishing information.

Sec. 828.106-70 Bond premium adjustment.

Sec. 828.106-71 Assisting service-disabled veteran-owned and veteran-
          owned small businesses in obtaining bonding.

Sec. 828.106-72 Contract provision.

           Subpart 828.2_Sureties and Other Security for Bonds


Sec. 828.203 Acceptability of individual sureties.

Sec. 828.203-7 Exclusion of individual sureties.

                         Subpart 828.3_Insurance


Sec. 828.306 Insurance under fixed-price contracts.

   Subpart 828.71_Indemnification of Contractors, Medical Research or 
                          Development Contracts


Sec. 828.7100 Scope of subpart.

Sec. 828.7101 Approval for indemnification.

Sec. 828.7102 Extent of indemnification.

Sec. 828.7103 Financial protection.

    Authority: 38 U.S.C. 501, 8127, 8128 and 8151-8153; 40 U.S.C. 
121(c); and 48 CFR 1.301-1.304.

    Source: 73 FR 2717, Jan. 15, 2008, unless otherwise noted.

           Subpart 828.1_Bonds and Other Financial Protections



Sec. 828.101  Bid guarantees.



Sec. 828.101-2  Solicitation provision or contract clause.

    When a bid bond is required for supplies or services, the phrase 
``any cost of acquiring the work'' in paragraph (e) of the Bid Guarantee 
clause in FAR 52.228-1 may be modified to refer to the cost of 
``supplies,'' ``services,'' etc.



Sec. 828.101-70  Safekeeping and return of bid guarantee.

    (a) The contracting officer must retain, in a safe, certified checks 
or other negotiable security provided as bid security for the three 
lowest acceptable bids. After the contract and contract bonds have been 
signed and approved, the contracting officer must return the certified 
checks or other negotiable securities either:
    (1) In person to the bidder who provides a proper receipt; or
    (2) By any method that will provide evidence that the bidder 
received the security.
    (b) The contracting officer should promptly return certified checks 
or other negotiable security furnished in support of bids, other than 
those determined to be the three lowest acceptable bids, to the 
respective bidders either:
    (1) In person to the bidder who provides a proper receipt; or
    (2) By any method that will provide evidence that the bidder 
received the security.
    (c) The contracting officer will not return commercial bid bonds 
unless specifically requested to do so by the bidders. If any of the 
three low bidders request the return of a commercial bid bond, the 
contracting officer will not return those bid bonds until the contract 
and contract bonds have been executed by the successful bidder and 
approved by the contracting officer or all bids have been rejected.



Sec. 828.106  Administration.



Sec. 828.106-6  Furnishing information.

    The contracting officer for the applicable contract will furnish 
copies of payment bonds to a requestor under the provisions of FAR 
28.106-6(c).



Sec. 828.106-70  Bond premium adjustment.

    When performance and payment bonds or payment protection are 
required, the contract must contain the clause in 852.228-70, Bond 
premium adjustment.

[[Page 217]]



Sec. 828.106-71  Assisting service-disabled veteran-owned and veteran-
          owned small businesses in obtaining bonding.

    VA prime contractors are encouraged to assist SDVOSB concerns and 
VOSB concerns in obtaining subcontractor performance and payment bonds. 
Mentors are especially encouraged to assist their prot[eacute]g[eacute]s 
in obtaining bid, payment, and performance bonds as prime contractors 
and bonds as subcontractors when bonds are required.

[74 FR 64636, Dec. 8, 2009]



Sec. 828.106-72  Contract provision.

    Insert 852.228-72, Assisting Service-Disabled Veteran-Owned and 
Veteran-Owned Small Businesses in Obtaining Bonds, in solicitations that 
include FAR clause 52.228-1, Bid Guarantee.

[74 FR 64636, Dec. 8, 2009]

           Subpart 828.2_Sureties and Other Security for Bonds



Sec. 828.203  Acceptability of individual sureties.



Sec. 828.203-7  Exclusion of individual sureties.

    The DSPE may make the determinations referenced in FAR 28.203-7:
    (a) To exclude individuals from acting as surety on bonds; and
    (b) To accept bonds from individuals named on the Excluded Parties 
List System.

                         Subpart 828.3_Insurance



Sec. 828.306  Insurance under fixed-price contracts.

    (a) Term contracts, or contracts of a continuing nature, for 
ambulance, automobile and aircraft service, must contain the provision 
in 852.228-71, Indemnification and insurance.
    (b) Paragraph (a) of this section does not apply to emergency or 
sporadic ambulance service authorized by VA Manual MP-1, Part II, 
Chapter 3, or other emergency or sporadic vehicle or aircraft services 
if both of the following conditions exist:
    (1) The service is not used solely for the purpose of avoiding 
entering into a continuing contract.
    (2) The services will be obtained from firms known to carry 
insurance coverage in accordance with State or local requirements.

   Subpart 828.71_Indemnification of Contractors, Medical Research or 
                          Development Contracts



Sec. 828.7100  Scope of subpart.

    (a) This subpart sets forth the policies and procedures concerning 
indemnification of contractors performing contracts covering medical 
research or development that involve risks of an unusually hazardous 
nature, as authorized by 38 U.S.C. 7317.
    (b) The authority to indemnify the contractor under this subpart 
does not create any rights to third parties that would not otherwise 
exist by law.
    (c) As used in this subpart, the term ``contractor'' includes 
subcontractors of any tier under a contract containing an 
indemnification provision under 38 U.S.C. 7317. (38 U.S.C. 7317)



Sec. 828.7101  Approval for indemnification.

    (a) The Secretary of Veterans Affairs will make the approval 
determinations for the indemnification of contractors.
    (b) Contracting officers must submit requests for approval, together 
with all available information, to the DSPE for submission to the SPE, 
who will forward the request to the Secretary for approval. (38 U.S.C. 
7317)



Sec. 828.7102  Extent of indemnification.

    (a) A contract for medical research or development authorized by 38 
U.S.C. 7303, may provide that the Government will indemnify the 
contractor against losses or liability specified in paragraphs (b) and 
(c) of this section if all of the following apply:
    (1) The contract work involves a risk of an unusually hazardous 
nature.
    (2) The losses or liability arise out of the direct performance of 
the contract.
    (3) The losses or liability are not covered by the financial 
protection required under 828.7103.
    (b) The Government may indemnify a contractor for liability 
(including reasonable expenses of litigation or settlement) to third 
persons for death, bodily

[[Page 218]]

injury, or loss of or damage to property from a risk that the contract 
defines as unusually hazardous. The indemnification will not cover 
liability under State or Federal worker's injury compensation laws to 
employees of the contractor who are both:
    (1) Employed at the site of the contract work; and
    (2) Working on the contract for which indemnification is granted.
    (c) The Government may indemnify the contractor for loss of or 
damage to property of the contractor from a risk that the contract 
defines as unusually hazardous.
    (d) A contract that provides for indemnification in accordance with 
this subpart must also require that:
    (1) The contractor must notify the contracting officer of any claim 
or suit against the contractor for death, bodily injury, or loss of or 
damage to property; and
    (2) The Government may choose to control or assist in the defense of 
any suit or claim for which indemnification is provided in the contract. 
(38 U.S.C. 7317)



Sec. 828.7103  Financial protection.

    (a) A contractor must have and maintain an amount of financial 
protection to cover liability to third persons and loss of or damage to 
the contractor's property that meets one of the following:
    (1) The maximum amount of insurance available from private sources.
    (2) A lesser amount that the Secretary establishes after taking into 
consideration the cost and terms of private insurance.
    (b) Financial protection may include private insurance, private 
contractual indemnities, self-insurance, other proof of financial 
responsibility, or a combination that provides the maximum amount 
required. If a contractor elects to self-insure, the contractor must 
provide the contracting officer, before award, proof of financial 
responsibility up to the maximum amount required. (38 U.S.C. 7317)

                             PART 829_TAXES

Sec.

Sec. 829.000 Scope of part.

                   Subpart 829.2_Federal Excise Taxes


Sec. 829.202 General exemptions.

Sec. 829.202-70 Tax exemptions for alcohol products.

                   Subpart 829.3_State and Local Taxes


Sec. 829.302 Application of State and local taxes to the Government.

Sec. 829.302-70 Purchases made from patients' funds.

    Authority: 40 U.S.C. 121(c) and 48 CFR 1.301-1.304.

    Source: 73 FR 2717, Jan. 15, 2008, unless otherwise noted.



Sec. 829.000  Scope of part.

    This part states the policies and procedures for the following:
    (a) Exemptions of alcohol products purchased for use by the VA 
medical care program from Federal excise taxes.
    (b) Specified refund procedures for State and local taxes.

                   Subpart 829.2_Federal Excise Taxes



Sec. 829.202  General exemptions.



Sec. 829.202-70  Tax exemptions for alcohol products.

    (a) General. (1) VA is permitted to procure spirits to be used for 
non-beverage purposes free of tax under the Alcohol and Tobacco Tax and 
Trade Bureau (TTB) regulations (see 27 CFR 19.538 and 19.539, 20.241 
through 20.246, 22.161 and 22.162, 22.171 through 22.176, 24.293, and 
25.181 through 25.185). The use of tax-free alcohol, whiskey, beer, 
wine, and denatured spirits for non-beverage purposes shall include, but 
is not limited to, medicinal and scientific purposes.
    (2) The Executive Director and Chief Operating Officer, National 
Acquisition Center, and the Head of the Contracting Activity may sign 
application permits on Department of Treasury-TTB Form 5150.33, Spirits 
for Use of The United States. This authority may not be delegated.
    (b) Whiskey, alcohol, and denatured alcohol. (1) The contracting 
officer may obtain application forms for tax-free purchases from the TTB 
Distribution Center, P.O. Box 5950, Springfield, VA

[[Page 219]]

22150-5950. The completed forms must be submitted to the Associate 
Director (Compliance Operations), Alcohol and Tobacco Tax and Trade 
Bureau, Washington, DC 20226.
    (2) Permits previously issued on Alcohol, Tobacco, and Firearms 
(ATF) Form 1444, Tax-Free Spirits for Use of United States, remain valid 
until surrendered or cancelled. A copy of the current ATF Form 1444 or 
TTB Form 5150.33 must be made available to the supplier with the initial 
order. The permit number only needs to be referenced on any future 
orders with the same supplier.
    (3) Contracting officers may make purchases of excise tax-free 
whiskey and alcohol only from qualified distillery plants or bonded 
dealers. The accountable officer must ensure that accurate records of 
all receipts, usage, and destruction of tax-free distilled spirits are 
maintained at each medical center and must conduct a semi-annual 
physical inventory of the tax-free alcohol in the possession of the 
medical center (see 27 CFR 22.161 and 22.162).
    (c) Wine. No tax exemption form or ATF/TTB permit is required for 
the tax-free procurement of wine from bonded wine premises. The purchase 
order must show the kind, quantity, and alcohol content of the wine and 
must state the purpose for which wine is to be used (see 27 CFR 24.293). 
An extra copy of a properly executed purchase order may be furnished to 
the bonded wine premises from which wine is purchased to facilitate 
record keeping.
    (d) Beer. The contracting officer may procure tax-free beer only 
from licensed breweries and only when such product is prescribed for 
patients' therapeutic use.
    (1) The contracting officer must submit an application for a TTB 
permit to purchase tax-free beer in letter form to the Director of the 
nearest TTB Regional Office or to the Director, Alcohol and Tobacco Tax 
and Trade Bureau, Washington, DC 20226. The following information must 
be included:
    (i) Name and address of facility.
    (ii) Specific purpose for which the beer will be used.
    (iii) Quantity proposed to buy each month, year, etc.
    (iv) Name and address of brewery.
    (v) Copy of document authorizing the head of the contracting 
activity to sign the request (i.e., paragraph (a)(2) of this section).
    (2) The contracting officer must obtain a separate permit for each 
brewery from which beer is to be purchased.

                   Subpart 829.3_State and Local Taxes



Sec. 829.302  Application of State and local taxes to the Government.

    (a) If a vendor refuses to sell at a price exclusive of the State 
and local tax, the contracting officer must use Standard Form (SF) 1094, 
U.S. Tax Exemption Certificate, as a basis for billing taxing 
authorities for a refund of taxes paid.
    (b) A contracting officer may not furnish an SF 1094 to a vendor or 
use SF 1094 to claim reimbursement from the taxing authority when the 
total amount of State and local tax on any one purchase is $10 or less.



Sec. 829.302-70  Purchases made from patients' funds.

    The contracting officer shall insert the clause at 852.229-70, Sales 
or use taxes, in solicitations and contracts when items are to be 
purchased solely from the personal funds of patients.

      PART 830_COST ACCOUNTING STANDARDS ADMINISTRATION [RESERVED]

            PART 831_CONTRACT COST PRINCIPLES AND PROCEDURES

         Subpart 831.70_Contract Cost Principles and Procedures

Sec.

Sec. 831.7000 Scope of subpart.

Sec. 831.7001 Allowable costs under cost reimbursement vocational 
          rehabilitation and education contracts or agreements.

Sec. 831.7001-1 Tuition.

Sec. 831.7001-2 Special services or courses.

Sec. 831.7001-3 Books, supplies, and equipment required to be personally 
          owned.

Sec. 831.7001-4 Medical services and hospital care.

Sec. 831.7001-6 Consumable instructional supplies.

[[Page 220]]


Sec. 831.7001-7 Reimbursement for other supplies and services.

    Authority: 38 U.S.C. 501; 40 U.S.C. 121(c); and 48 CFR 1.301-1.304.

    Source: 73 FR 2717, Jan. 15, 2008, unless otherwise noted.

         Subpart 831.70_Contract Cost Principles and Procedures



Sec. 831.7000  Scope of subpart.

    This subpart contains general cost principles and procedures for the 
determination and allowance of costs in connection with the negotiation 
and administration of cost reimbursement type contracts for providing 
vocational rehabilitation, education, and training to eligible veterans 
under 38 U.S.C. Chapter 31, (referred to as a ``Chapter 31 program'').



Sec. 831.7001  Allowable costs under cost reimbursement vocational 
          rehabilitation and education contracts or agreements.



Sec. 831.7001-1  Tuition.

    (a) Except as provided in this section, when the contractor has a 
customary cost of tuition, the charge to VA may not exceed that charged 
to similarly circumstanced nonveteran students. If the contractor has 
more than one standard charge for the same service, the charge to VA 
must be the lowest price that is offered or published for the entire 
course, semester, quarter, or term.
    (b) VA will not normally pay tuition or incidental fees to 
institutions or establishments furnishing apprentice or other on-the-job 
training. VA may elect to pay charges or expenses that fall into either 
of the following categories:
    (1) Charges customarily made by a nonprofit workshop or similar 
establishment for providing work adjustment training to similarly 
circumstanced nonveterans even if the trainee receives an incentive wage 
as part of the training.
    (2) Training expenses incurred by an employer who provides on-the-
job training following rehabilitation to the point of employability when 
VA determines that the additional training is necessary.
    (c) When Federal funds pay the total cost of instruction, or grants 
from the Federal Government pay a portion of the cost (e.g., Smith-
Hughes or other laws, excluding Federal Land Grant Funds), that subsidy 
will be taken into consideration in determining the charge to VA. The 
term ``Federal Land Grant Funds'' refers to those funds received under 
the Morrill-Nelson Act (Morrill Acts of 1862 and 1890 and the Nelson 
amendment of 1907) and section 22 of the Bankhead-Jones Act of 1935.
    (d) A veteran who is participating in a Chapter 31 program and 
receives an award of a fellowship, scholarship, grant-in-aid, 
assistantship, or similar award will have that award treated according 
to the following requirements:
    (1) If the award limits its use to payment of tuition, fees, or any 
charge that VA normally pays as part of a Chapter 31 program, VA will 
pay the portion of the charges remaining after applying the award.
    (2) In all other cases, VA will pay the full amount of the tuition, 
fees, or other charges.
    (e) If a State or other Government authority waives a veteran's 
tuition and fees, VA will reduce its payment of those charges by the 
amount of the waiver.
    (f) VA will pay enrollment fees for registration if both of the 
following conditions exist:
    (1) The institution or training establishment usually makes this 
charge.
    (2) The charge is not more than other students or trainees pay.



Sec. 831.7001-2  Special services or courses.

    Special services or courses are those services or courses that VA 
requests that are over and above those the institution customarily 
provides for similarly circumstanced nonveterans and that the 
contracting officer considers to be necessary for the rehabilitation of 
the trainee. VA will negotiate the costs of special services or courses 
before paying them.



Sec. 831.7001-3  Books, supplies, and equipment required to be 
          personally owned.

    (a) Reimbursement for supplies (including books, equipment, or other

[[Page 221]]

supplies) will be made as provided in this section.
    (b) VA will provide reimbursement for those supplies that all 
students taking the same course or courses are customarily required to 
own personally. In addition, VA may provide reimbursement for items that 
the school does not specifically require for pursuit of the course, but 
that VA determines are needed because of the demands of the course, 
general possession by other students, and the disadvantage imposed on a 
veteran by not having the item. In no instance will VA provide 
reimbursement for supplies in a greater variety, quality, or amount than 
required of nonveteran students. In this instance, an item is not 
considered to be required if it is ``requested'' or ``desirable to 
have'' or ``necessary for a future profession or job but not required by 
the institution of all students in the course''.
    (c) When supplies are available in several prices, grades, or 
qualities, VA will provide reimbursement only for that quality or grade 
that will meet the requirements.
    (d) Partial payment agreements, in which VA shares payment with the 
veterans, are not allowed.
    (e) The institution's costs in connection with a veteran's thesis 
are considered supplies and are therefore authorized for reimbursement 
if the veteran's committee chairman, major professor, department head, 
or appropriate dean certifies that the thesis is a course requirement 
and the expenses are required to complete the thesis. These expenses may 
include research expenses, typing, printing, microfilming, or otherwise 
reproducing the required number of copies.
    (f) When the institution operates a bookstore or supply store for 
all students, reimbursement to the bookstore or supply store for 
supplies issued to trainees will be no greater than charges made to 
nonveteran students.
    (g) When the institution, training establishment, or employer 
arranges for stores or other non-institutionally owned establishments to 
issue supplies to all students and a veteran is to pay the store or 
establishment for supplies issued to trainees, VA will provide 
reimbursement for those charges if they are no greater than those 
nonveterans pay or paid to the institutions, whichever is the lesser.
    (h) Supplies that the institution purchases specifically for 
trainees will be reimbursed at the net cost to the institution.
    (i) When the institution does not provide or arrange for issuance of 
generally required books, tools and supplies for students attending the 
facility, the institution, in cooperation with VA, may designate certain 
stores and establishments to provide generally required books, tools and 
supplies for veterans pursuing a vocational rehabilitation program. The 
vendor will be reimbursed in the same manner as for supplies provided or 
arranged for by the institutions.
    (j) When it is customary in a survey class to permit each student to 
rent books for the subject (commonly referred to as a rental set), and 
the student is not required to own the books/materials, reimbursement is 
authorized for the rental charge as long as it does not exceed the 
charge made to nonveteran students.
    (k) Educational and training institutions that furnish supplies to 
trainees that all students pursuing the same or similar course are 
required to own personally or obtain may be compensated for furnishing 
the supplies in an amount not exceeding 10 percent of the allowable 
charge for the supplies furnished or rented subject to the following 
conditions:
    (1) When the tuition covers the charges for supplies or rentals or a 
stipulated fee is assessed to all students, handling charges are not 
allowable.
    (2) The handling charge is not allowable for Government-owned books 
that the institution procures from the Library of Congress.



Sec. 831.7001-4  Medical services and hospital care.

    (a) VA may pay the customary student health fee when payment of the 
fee is required for similarly circumstanced nonveterans. If payment of 
the fee is not required for similarly circumstanced nonveterans, payment 
may be made if it is determined by the Veterans Health Administration 
that

[[Page 222]]

payment is in the best interest of the veteran and the Government.
    (b) When the customary student's health fee does not cover medical 
services or hospital care, but these medical services are available in a 
school-operated facility or with doctors and hospitals in the immediate 
area through a prior arrangement, the Veterans Benefits Administration 
may provide reimbursement for these services in a contract for the 
services if:
    (1) An arrangement is necessary to provide timely medical services 
for veterans attending the facility under provisions of Chapter 31; and
    (2) The general rates established for medical services do not exceed 
the rates established by the Under Secretary for Health.
    (c) VA may reimburse a rehabilitation facility for incidental 
medical services provided during a veteran's program at the facility.



Sec. 831.7001-6  Consumable instructional supplies.

    (a) VA will provide reimbursement for consumable instructional 
supplies that the institution requires for the instruction of all 
students, veteran or nonveteran, pursuing the same or comparable course 
or courses when:
    (1) The supplies are entirely consumed in the fabrication of a 
required project; or
    (2) The supplies are not consumed but are of such a nature that they 
cannot be salvaged from the end product for reuse by disassembling or 
dismantling the end product.
    (b) VA will not provide reimbursement for consumable instructional 
supplies if any of the following apply:
    (1) The supplies can be salvaged for reuse.
    (2) The supplies are used in a project that the student has elected 
as an alternate class project to produce an end product of greater value 
than that normally required to learn the skills of the occupation, and 
the end product will become the veteran's property upon completion.
    (3) The supplies are used in a project that the institution has 
selected to provide the student with a more elaborate end product than 
is required to provide adequate instruction as an inducement to the 
veteran to elect a particular course of study.
    (4) The sale value of the end product is equal to or greater than 
the cost of supplies plus assembly, and the supplies have not been 
reasonably used so that the supplies are not readily salvaged from the 
end product to be reused for instructional purposes.
    (5) The end product is of permanent value and retained by the 
institution.
    (6) A third party loans the articles or equipment for repair or 
improvement and the third party would otherwise pay a commercial price 
for the repair or improvement.
    (7) The number of projects resulting in end products exceeds the 
number normally required to teach the recognized job operations and 
processes of the occupation stipulated in the approved course of study.
    (8) The cost of supplies is included in the charge for tuition or as 
a fee designated for such purpose.



Sec. 831.7001-7  Reimbursement for other supplies and services.

    VA will provide reimbursement for other services and assistance that 
may be authorized under provisions of applicable Chapter 31 regulations, 
including, but not limited to, employment and self-employment services, 
initial and extended evaluation services, and independent living 
services.

                       PART 832_CONTRACT FINANCING

Sec.

Sec. 832.006 Reduction or suspension of contract payments upon finding 
          of fraud.

Sec. 832.006-1 General.

Sec. 832.006-2 Definitions.

Sec. 832.006-3 Responsibilities.

Sec. 832.006-4 Procedures.

          Subpart 832.1_Non-Commercial Item Purchase Financing


Sec. 832.111 Contract clauses for non-commercial purchases.

            Subpart 832.2_Commercial Item Purchase Financing


Sec. 832.201 Statutory authority.

Sec. 832.202 General.

Sec. 832.202-1 Policy.

Sec. 832.202-4 Security for Government financing.

[[Page 223]]

         Subpart 832.4_Advance Payments for Non-Commercial Items


Sec. 832.402 General.

Sec. 832.404 Exclusions.

             Subpart 832.5_Progress Payments Based on Costs


Sec. 832.502 Preaward matters.

Sec. 832.502-2 Contract finance office clearance.

                   Subpart 832.8_Assignment of Claims


Sec. 832.805 Procedure.

Sec. 832.805-70 Distribution/notification of assignment of claims.

                      Subpart 832.9_Prompt Payment


Sec. 832.904 Determining payment due dates.

                Subpart 832.11_Electronic Funds Transfer


Sec. 832.1106 EFT mechanisms.

    Authority: 40 U.S.C. 121(c) and 48 CFR 1.301-1.304.

    Source: 73 FR 2717, Jan. 15, 2008, unless otherwise noted.



Sec. 832.006  Reduction or suspension of contract payments upon finding 
          of fraud.



Sec. 832.006-1  General.

    The SPE is authorized to make determinations that there is 
substantial evidence that contractors' requests for advance, partial, or 
progress payments are based on fraud and may direct that further 
payments to the contractors be reduced or suspended, as provided in FAR 
32.006. This authority may not be redelegated.



Sec. 832.006-2  Definitions.

    The remedy coordination official for VA is the DSPE.



Sec. 832.006-3  Responsibilities.

    VA personnel must report suspected fraud related to advance, 
partial, or progress payments to the DSPE and VA Office of the Inspector 
General. The report must include all available information supporting 
the suspicion.



Sec. 832.006-4  Procedures.

    (a) Any recommendation from a VA employee through the DSPE to the 
SPE to reduce or suspend payment to a contractor under FAR 32.006 must 
address the considerations in FAR 32.006-4(d).
    (b) The DSPE shall carry out the responsibilities of the Secretary 
or designee in FAR 32.006-4(e) to notify the contractor of proposed 
action under FAR 32.006. The notice of proposed action will be sent to 
the last known address of the contractor, the contractor's counsel, or 
agent for service of process, by certified mail, return receipt 
requested, or any other method that provides signed evidence of receipt. 
In the case of a business, the notice of proposed action may be sent to 
any partner, principal, officer, director, owner or co-owner, or joint 
venture. The contractor will be afforded an opportunity to appear before 
the DSPE to present information or argument in person or through a 
representative. The contractor may supplement the oral presentation with 
written information and argument. The proceedings will be conducted in 
an informal manner and without the requirement for a transcript. If the 
DSPE does not receive a reply from the contractor within 30 calendar 
days, the DSPE will base his or her recommendations on the information 
available. Any recommendation of the DSPE under paragraph (a) of this 
section must address the results of this notification and the 
information, if any, provided by the contractor.
    (c) The SPE must provide a copy of each final determination and the 
supporting documentation to the contractor, the DSPE and the contracting 
officer. The contracting officer will place a copy of the determination 
and the supporting documentation in the contract file.

          Subpart 832.1_Non-Commercial Item Purchase Financing



Sec. 832.111  Contract clauses for non-commercial purchases.

    In solicitations and contracts for construction that include the FAR 
clause at 52.232-5, Payments under Fixed-Price Construction Contracts, 
the contracting officer shall insert the following clauses:
    (a) If the solicitation or contract does not contain a section 
entitled ``Network Analysis System (NAS),''

[[Page 224]]

the contracting officer must insert the clause at 852.236-82, Payments 
under fixed-price construction contracts (without NAS). When the 
solicitation or contract includes guarantee period services, the 
contracting officer must use the clause with its Alternate I.
    (b) If the solicitation or contract contains a section entitled 
``Network Analysis System (NAS),'' the contracting officer must insert 
the clause at 852.236-83, Payments under fixed-price construction 
contracts (including NAS). When the solicitation or contract includes 
guarantee period services, the contracting officer must use the clause 
with its Alternate I.

            Subpart 832.2_Commercial Item Purchase Financing



Sec. 832.201  Statutory authority.

    The contracting officer may make the determination that terms and 
conditions for payment for commercial items are appropriate and 
customary in the commercial marketplace and are in the best interest of 
the Government, provided the terms and conditions for payment do not 
conflict with FAR Subpart 32.2.



Sec. 832.202  General.



Sec. 832.202-1  Policy.

    As provided in FAR 32.202-1(d), contracting officers must obtain the 
approval of the DSPE before awarding a contract that includes unusual 
contract financing. The contracting officer must fully support the 
request with the reasons why the proposed unusual contract financing is 
in the best interest of the Government. In addition, contracting 
officers must not use commercial interim payment or commercial advance 
payment terms in solicitations or contracts without the approval of the 
DSPE.



Sec. 832.202-4  Security for Government financing.

    An offeror's financial condition may be considered adequate security 
to protect the Government's interest when the Government provides 
contract financing. In assessing the offeror's financial condition, the 
contracting officer may obtain, to the extent required, the following 
information to establish the offeror's financial capability and to 
determine the offeror's financial condition:
    (a) A current year interim balance sheet and income statement and 
balance sheets and income statements for the two preceding fiscal years. 
The statements should be prepared in accordance with generally accepted 
accounting principles and must be audited and certified by an 
independent public accountant or an appropriate officer of the firm.
    (b) A cash flow forecast for the remainder of the contract term 
showing the planned origin and use of cash within the firm or branch 
performing the contract.
    (c) Information on financing arrangements disclosing the 
availability of cash to finance contract performance, the contractor's 
exposure to financial crisis, and credit arrangements.
    (d) A statement of the status of all State, local, and Federal tax 
accounts, including any special mandatory contributions.
    (e) A description and explanation of the financial effects of any 
leases, deferred purchase arrangements, patent or royalty arrangements, 
insurance, planned capital expenditures, pending claims, contingent 
liabilities, and other financial aspects of the business.
    (f) Any other financial information deemed necessary.
    (g) A Dun and Bradstreet Report on the company.

         Subpart 832.4_Advance Payments for Non-Commercial Items



Sec. 832.402  General.

    Authority to make the determination required by FAR 
32.402(c)(1)(iii) and to approve contract terms, as provided by FAR 
32.402(e)(1), is delegated to the SPE and is further delegated to the 
DSPE. Before award, contracting officers must submit a request for 
approval to use advance payment to the DSPE. The request must include 
the information required by FAR 32.409-1 and must address the standards 
for advance payment in FAR 32.402(c)(2).

[[Page 225]]



Sec. 832.404  Exclusions.

    (a) Under 31 U.S.C. 3324(d)(2), VA allows advance payment for 
subscriptions or other charges for newspapers, magazines, periodicals, 
and other publications for official use, notwithstanding the provisions 
of 31 U.S.C. 3324(a). The term ``other publications'' includes any 
publication printed, microfilmed, photocopied or magnetically or 
otherwise recorded for auditory or visual use.
    (b) Under 31 U.S.C. 1535, VA allows advance payment for services and 
supplies obtained from another Government agency.
    (c) Under 5 U.S.C. 4109, VA allows advance payment for all or any 
part of the necessary expenses for training Government employees in 
Government or non-Government facilities, including the purchase or 
rental of books, materials, and supplies or services directly related to 
the training of a Government employee.

             Subpart 832.5_Progress Payments Based on Costs



Sec. 832.502  Pre-award matters.



Sec. 832.502-2  Contract finance office clearance.

    Contracting officers must obtain approval from the DSPE before 
taking the actions listed in FAR 32.502-2. Full justification and the 
recommendations of the contracting officer must accompany requests for 
approval.

                   Subpart 832.8_Assignment of Claims



Sec. 832.805  Procedure.



Sec. 832.805-70  Distribution/notification of assignment of claims.

    (a) Prior to acknowledgement of receipt, in addition to the 
requirements of FAR 32.805(d), the contracting officer shall obtain 
legal review of the assignment (see 801.602-75(a)(7)). Upon 
acknowledgement of receipt, the contracting officer shall:
    (1) File the retained copy of the notice of assignment and the 
certified copy of the original instrument of assignment with the 
Government Accountability Office copy of the contract; and
    (2) Forward a copy of the notice of assignment and instrument of 
assignment to the local finance office and to the payment office cited 
in the contract.
    (b) Contracting officers must notify field facilities of any 
recognized assignment of payments for contracts under which payment for 
articles and services is certified and approved for payment in the 
field.

                      Subpart 832.9_Prompt Payment



Sec. 832.904  Determining payment due dates.

    (a) When preparing specification packages, contracting officers must 
give full consideration to the time reasonably required for constructive 
acceptance or approval of the goods or services and for making invoice 
payments. Based on this analysis, contracting officers may, when 
authorized by FAR 32.904, modify the number of days allowed for 
notifying contractors of defects in invoices or, for construction 
solicitations, the number of days allowed for payment of invoices 
specified in the applicable prompt payment clause. Changes, if any, 
should be made before issuing the solicitation.
    (b)(1) For construction solicitations, the analysis specified in 
paragraph (a) of this section may routinely take more than the 7 days 
provided in paragraph (a)(2) of the FAR clause at 52.232-27, Prompt 
Payment for Construction Contracts, to evaluate and return defective 
progress payment invoices.
    (2) It also may take more than the 14 days provided in paragraph 
(a)(1)(i)(A) of the prompt payment clause to adequately inspect the 
work, determine the adequacy of the contractor's performance, approve, 
and pay progress payment invoices.
    (3) Contracting officers should consider the following and, if 
necessary, revise the number of days stated in paragraphs (a)(2) and 
(a)(1)(i)(A) of the prompt payment clause before issuing construction 
solicitations (see FAR 32.904(d)(1)(i)):
    (i) Recent interest payment history.
    (ii) The complexity of the project.
    (iii) Workload.

[[Page 226]]

    (iv) Work site location.
    (4) In no event may the number of days be set in excess of 14 days 
for return of a defective progress payment invoice or 30 days for 
payment of the invoice.

                Subpart 832.11_Electronic Funds Transfer



Sec. 832.1106  EFT mechanisms.

    (a) The Assistant Secretary for Management may, with the concurrence 
of the Department of the Treasury office responsible for making payment, 
authorize the use of EFT mechanisms other than those authorized under 
FAR 32.1106(a).
    (b) The Assistant Secretary for Management may, with the concurrence 
of the Department of the Treasury office responsible for making payment, 
authorize the use of EFT for payments to be received by or on behalf of 
a contractor outside the United States or Puerto Rico or for contracts 
paid in other than United States currency, as provided in FAR 
32.1106(b).

                PART 833_PROTESTS, DISPUTES, AND APPEALS

                         Subpart 833.1_Protests

Sec.

Sec. 833.102 General.

Sec. 833.103 Protests to VA.

Sec. 833.104 Protests to GAO.

Sec. 833.106 Solicitation provision and contract clause.

                   Subpart 833.2_Disputes and Appeals


Sec. 833.209 Suspected fraudulent claims.

Sec. 833.211 Contracting officer's decision.

Sec. 833.212 Contracting officer's duties upon appeal.

Sec. 833.213 Obligation to continue performance.

Sec. 833.214 Alternative dispute resolution (ADR).

Sec. 833.215 Contract clause.

    Authority: 40 U.S.C. 121(c) and 48 CFR 1.301-1.304.

    Source: 73 FR 2717, Jan. 15, 2008, unless otherwise noted.

                         Subpart 833.1_Protests



Sec. 833.102  General.

    Solicitations must instruct interested parties (see FAR provision 
52.233-2) to send a copy of any protest filed with the Government 
Accountability Office (GAO) to the contracting officer and the 
appropriate VA Central Office activity as follows:
    (a) For contracts to be awarded by the Office of Construction and 
Facilities Management: Director, Office of Construction and Facilities 
Management, Department of Veterans Affairs, 810 Vermont Avenue, NW., 
Washington, DC 20420.
    (b) For all other contracts: Deputy Assistant Secretary for 
Acquisition and Materiel Management, Department of Veterans Affairs, 810 
Vermont Avenue, NW., Washington, DC 20420.



Sec. 833.103  Protests to VA.

    (a) Filing of protests. (1) An interested party may protest to the 
contracting officer or, as an alternative, may request an independent 
review by filing a protest with the Deputy Assistant Secretary for 
Acquisition and Materiel Management (DAS for A&MM), or for solicitations 
issued by the Director, Office of Construction and Facilities 
Management. A protest filed with the DAS for A&MM or the Director, 
Office of Construction and Facilities Management, will not be considered 
if the interested party has a protest on the same or similar issues 
pending with the contracting officer.
    (2) Protests to the contracting officer must be in writing and 
addressed where the offer/bid is to be submitted.
    (3) Protests requesting an independent review must be in writing and 
addressed to the Deputy Assistant Secretary for Acquisition and Materiel 
Management, Department of Veterans Affairs, 810 Vermont Avenue, NW., 
Washington, DC 20420; or, for solicitations issued by the Office of 
Construction and Facilities Management, to the Director, Office of 
Construction and Facilities Management, Department of Veterans Affairs, 
810 Vermont Avenue, NW., Washington, DC 20420.
    (4) The following types of protests may be dismissed by VA without 
consideration of the merits or forwarded

[[Page 227]]

to another agency for appropriate action:
    (i) Contract administration. Disputes between a contractor and VA 
are resolved under the disputes clause of the contract and the Contract 
Disputes Act of 1978. (41 U.S.C. 601-613).
    (ii) Small business size standards and standard industrial 
classification. Challenges of established size standards or the size 
status of particular firms, and challenges of the selected standard 
industrial classification are for review solely by the Small Business 
Administration (SBA). (15 U.S.C. 637(b)(6); 13 CFR 121.1002).
    (iii) Small business certificate of competency program. A protest 
made under section 8(b)(7) of the Small Business Act, or in regard to 
any issuance of a certificate of competency or refusal to issue a 
certificate under that section, is not reviewed in accordance with bid 
protest procedures unless there is a showing of possible fraud or bad 
faith on the part of Government officials.
    (iv) Protests under section 8(a) of the Small Business Act. The 
decision to place or not to place a procurement under the 8(a) program 
is not subject to review unless there is a showing of possible fraud or 
bad faith on the part of Government officials or that regulations may 
have been violated. (15 U.S.C. 637(a)).
    (v) Affirmative determination of responsibility by the Contracting 
Officer. An affirmative determination of responsibility will not be 
reviewed unless there is a showing that such determination was made 
fraudulently or in bad faith or that definitive responsibility criteria 
in the solicitation were not met.
    (vi) Walsh-Healey Public Contract Act. Challenges of the legal 
status of a firm as a regular dealer or manufacturer within the meaning 
of the Walsh-Healey Act is determined solely by the procuring agency, 
the SBA (if a small business is involved), and the Secretary of Labor. 
(41 U.S.C. 35-45).
    (vii) Subcontractor protests. The contracting agency will not 
consider subcontractor protests except where the subcontract is by or 
for the Government.
    (viii) Judicial proceedings. The contracting agency will not 
consider protests where the matter involved is the subject of litigation 
before a court of competent jurisdiction.
    (b) Alternative dispute resolution. Bidders/offerors and VA 
contracting officers are encouraged to use alternative dispute 
resolution (ADR) procedures to resolve protests at any stage in the 
protest process. If ADR is used, VA will not furnish any documentation 
in an ADR proceeding beyond what is allowed by the FAR.
    (c) Action upon receipt of protest. For protests filed with the 
contracting officer, the HCA will be the approving official for the 
determinations identified in FAR 33.103(f)(1) and (f)(3). If the HCA is 
also the contracting officer, the approving official will be the DAS for 
A&MM. For protests filed with the DAS for A&MM or the Director, Office 
of Construction and Facilities Management, those individuals will be the 
approving officials for the determinations identified in FAR 
33.103(f)(1) and (f)(3).
    (d) Requests for GAO advance decisions. When a written protest has 
been filed with the contracting officer and the contracting officer 
considers it desirable to do so, the contracting officer may request an 
advance decision from the Comptroller General. The contracting officer 
must send the submission to the Comptroller General through the DAS for 
A&MM or the Director, Office of Construction and Facilities Management, 
as appropriate, and must include the material listed in FAR 33.104(a). 
The contracting officer must promptly notify the protesting individual 
or firm in writing of the decision of the Comptroller General.
    (e) Protest after award. When a written protest is filed with the 
contracting officer after contract award, the following requirements 
apply:
    (1) If FAR 33.103(f)(3) requires suspension of contract performance, 
the contracting officer must seek to obtain a mutual agreement with the 
contractor to suspend performance on a no-cost basis. If unsuccessful, 
the contracting officer must issue a stop-work order in accordance with 
contract clause FAR 52.233-3, Protest after Award.
    (2) If suspension of contract performance is not required by FAR 
33.103(f)(3) and if the contracting officer determines that the award 
was proper, the contracting officer must furnish the

[[Page 228]]

protester a written explanation of the basis for the award that is 
responsive to the allegations of the protest. The contracting officer 
will advise the protester that the protester may appeal the 
determination to one of the following:
    (i) The DAS for A&MM.
    (ii) The Director, Office of Construction and Facilities Management, 
in the case of a contract awarded by the Office of Construction and 
Facilities Management.
    (iii) The Comptroller General.
    (3) If suspension of contract performance is not required by FAR 
33.103(f)(3) but the contracting officer determines that the award is 
questionable, the contracting officer, after consulting with OGC, will 
advise the contractor of the protest and invite the contractor to submit 
comments and relevant information. The contracting officer must submit 
the case promptly to the DAS for A&MM for advice. The DAS for A&MM may 
consult with OGC and will either advise the contracting officer of the 
appropriate action to take, or submit the case to the Comptroller 
General, through the Assistant Secretary for Management, for a decision. 
The contracting officer will provide interested parties with a copy of 
the final decision.
    (f) Agency appellate review of the contracting officer's protest 
decision. An interested party may request an independent review of a 
contracting officer's protest decision by filing an appeal with the DAS 
for A&MM or, for solicitations issued by the Office of Construction and 
Facilities Management, with the Director, Office of Construction and 
Facilities Management. To be considered timely, the appeal must be 
received by the appropriate official named in this paragraph within 10 
calendar days of the date the interested party knew, or should have 
known, whichever is earlier, of the basis for the appeal. Appeals must 
be addressed as provided in paragraph (a)(3) of this section. Appeals do 
not extend GAO's timeliness requirements for appeals to GAO. By filing 
an appeal as provided in this paragraph, an interested party may waive 
its rights to further appeal to the Comptroller General at a later date. 
Agency responses to appeals submitted to the agency shall be reviewed 
and concurred in by OGC (025).



Sec. 833.104  Protests to GAO.

    (a) General procedures. (1) Procedures for protests to GAO are at 4 
CFR Part 21 (GAO Bid Protest Regulations). If guidance concerning GAO 
procedure in this section differs from 4 CFR Part 21, 4 CFR Part 21 
applies.
    (2) When a protest before or after award has been filed with GAO, 
the contracting officer must submit a report to the DAS for A&MM, or the 
Director, Office Construction and Facilities Management, as appropriate, 
within 5 workdays after receipt of verbal or written notice of the 
protest, whichever occurs first. The report must include a copy of the 
documentation indicated in FAR 33.104(a)(3).
    (3) Contracting officers are responsible for the notification 
procedures outlined in FAR 33.104(a)(4).
    (b) Protests before award. When VA receives notice from GAO of a 
pre-award protest filed directly with GAO, award will normally not be 
made until the matter is resolved. However, award may be made despite 
the protest if the DAS for A&MM, or the Director, Office of Construction 
and Facilities Management, as appropriate, approves the findings of the 
HCA required by FAR 33.104(b)(1) and GAO has been notified as provided 
by FAR 33.104(b)(2). The Director, Acquisition Resources Service, or the 
Director, Office of Construction and Facilities Management, as 
appropriate, is responsible for notifying GAO.
    (c) Protests after award. When, after award of a contract, VA 
receives notice from GAO of a protest filed directly with GAO, the 
contracting officer must, if required to do so by FAR 33.104(c)(1), 
immediately suspend performance. However, contract performance need not 
be suspended, despite the protest, if the SPE approves the HCA's 
findings required by FAR 33.104(c)(2) and GAO has been notified under 
FAR 33.104(c)(3). Authority to approve the HCA's findings is further 
delegated to the DSPE and, for solicitations issued by the Officer of 
Construction and Facilities Management, the Director, Office of 
Construction and Facilities

[[Page 229]]

Management. The Director, Acquisition Resources Service, or the 
Director, Office of Construction and Facilities Management, as 
appropriate, is responsible for notifying GAO.



Sec. 833.106  Solicitation provisions.

    (a) The contracting officer shall insert the provision at 852.233-
70, Protest content/alternative dispute resolution, in each solicitation 
expected to exceed the simplified acquisition threshold.
    (b) The contracting officer shall insert the provision at 852.233-
71, Alternative protest procedure, in solicitations expected to exceed 
the simplified acquisition threshold.

                   Subpart 833.2_Disputes and Appeals



Sec. 833.209  Suspected fraudulent claims.

    The contracting officer must refer matters relating to suspected 
fraudulent claims to the Office of Inspector General for investigation 
and referral to the Department of Justice. The contracting officer may 
not initiate any collection, recovery, or other settlement action while 
the matter is in the hands of the Department of Justice without first 
obtaining the concurrence of the U.S. Attorney concerned, through the 
Office of the Inspector General.



Sec. 833.211  Contracting officer's decision.

    (a) When a dispute cannot be settled by agreement and a final 
decision under the Disputes clause of the contract is necessary, the 
contracting officer must furnish the contractor the contracting 
officer's final decision in the matter.
    (b) The contracting officer must identify the decision, in writing, 
as a final decision and include a statement of facts in sufficient 
detail to enable the contractor to fully understand the decision and the 
basis on which it was made. The decision must set forth those facts 
relevant to the dispute with which the contractor and the contracting 
officer are in agreement, and as clearly as possible, the area of 
disagreement.
    (c) For VA contracts, the Board of Contract Appeals noted in FAR 
33.211 is the Civilian Board of Contract Appeals (CBCA), 1800 F Street, 
NW., Washington, DC 20405.



Sec. 833.212  Contracting officer's duties upon appeal.

    (a) When a contracting officer receives notice of appeal in any 
form, the contracting officer must do the following:
    (1) Annotate the appeal with the date of mailing (or date of 
receipt, if otherwise conveyed).
    (2) Within 10 days, forward the original notice of appeal and a copy 
of the contracting officer's final decision letter to the OGC.
    (3) Concurrently transmit copies of the notice of appeal and the 
final decision letter to the DAS for A&MM. (In cases of construction 
contracts administered by the Office of Construction and Facilities 
Management, copies of the appeal and the final decision letter need not 
be transmitted to the DAS for A&MM but instead should be sent to the 
Director, Office of Construction and Facilities Management.)
    (b) Within 20 days of receipt of an appeal, or advice that an appeal 
has been filed, the contracting officer must assemble and transmit to 
the OGC, an appeal file consisting of all documents pertinent to the 
appeal, including all of the following:
    (1) The decision and findings of fact that are being appealed.
    (2) The contract, including specifications and pertinent amendments, 
plans and drawings.
    (3) All correspondence between the parties pertinent to the appeal, 
including the letter or letters of claim in response to which the 
decision was issued.
    (4) Transcripts of any testimony taken during the course of 
proceedings and affidavits or statements of any witnesses on the matter 
in dispute made prior to the filing of the notice of appeal.
    (5) Any additional information considered pertinent.



Sec. 833.213  Obligation to continue performance.

    (a) As provided in FAR 33.213, contracting officers shall use FAR 
clause 52.233-1, Disputes, with its Alternate I. Clause 52.233-1 
requires the contractor

[[Page 230]]

to continue performance in accordance with the contracting officer's 
decision in the event of a claim arising under a contract. Alternate I 
expands this authority, adding a requirement for the contractor to 
continue performance in the event of a claim relating to the contract.
    (b) In the event of a dispute not arising under, but relating to, 
the contract, if the contracting officer directs continued performance, 
the contracting officer may consider providing financing for the 
continued performance, provided that the Government's interests are 
properly secured. The contracting officer will contact the DAS for A&MM 
and OGC for advice prior to authorizing such financing.



Sec. 833.214  Alternative dispute resolution (ADR).

    Contracting officers and contractors are encouraged to use 
alternative dispute resolution (ADR) procedures. CBCA guidance on ADR 
may be obtained at http://www.cbca.gsa.gov.



Sec. 833.215  Contract clause.

    The contracting officer must use the clause at 52.233-1, Disputes, 
with its Alternate I (see 833.213).

[[Page 231]]

             SUBCHAPTER F_SPECIAL CATEGORIES OF CONTRACTING

         PART 836_CONSTRUCTION AND ARCHITECT-ENGINEER CONTRACTS

      Subpart 836.2_Special Aspects of Contracting for Construction

Sec.

Sec. 836.202 Specifications.

Sec. 836.203 Government estimate of construction costs.

Sec. 836.204 Disclosure of the magnitude of construction projects.

Sec. 836.206 Liquidated damages.

Sec. 836.209 Construction contracts with architect-engineer firms.

Sec. 836.213 Special procedures for sealed bidding in construction 
          contracting.

Sec. 836.213-4 Notice of award.

Sec. 836.213-70 Notice to proceed.

                     Subpart 836.5_Contract Clauses


Sec. 836.500 Scope of subpart.

Sec. 836.501 Performance of work by the contractor.

Sec. 836.513 Accident prevention.

Sec. 836.521 Specifications and drawings for construction.

Sec. 836.570 Correspondence.

Sec. 836.571 Reference to ``standards.''

Sec. 836.572 Government supervision.

Sec. 836.573 Daily report of workers and materials.

Sec. 836.574 Subcontracts and work coordination.

Sec. 836.575 Schedule of work progress.

Sec. 836.576 Supplementary labor standards provisions.

Sec. 836.577 Worker's compensation.

Sec. 836.578 Changes--supplement.

Sec. 836.579 Special notes.

                Subpart 836.6_Architect-Engineer Services


Sec. 836.602 Selection of firms for architect-engineer contracts.

Sec. 836.602-1 Selection criteria.

Sec. 836.602-2 Evaluation boards.

Sec. 836.602-4 Selection authority.

Sec. 836.602-5 Short selection process for contracts not to exceed the 
          simplified acquisition threshold.

Sec. 836.603 Collecting data on and appraising firms qualifications.

Sec. 836.606 Negotiations.

Sec. 836.606-70 General.

Sec. 836.606-71 Architect-engineer's proposal.

Sec. 836.606-72 Contract price.

Sec. 836.606-73 Application of 6 percent architect-engineer fee 
          limitation.

    Authority: 40 U.S.C. 121(c) and 48 CFR 1.301-1.304.

    Source: 73 FR 2717, Jan. 15, 2008, unless otherwise noted.

      Subpart 836.2_Special Aspects of Contracting for Construction



Sec. 836.202  Specifications.

    (a) The procedures described in part 811 are applicable to 
construction specifications.
    (b) During the design stage, contract architect-engineers must not 
use ``brand name or equal'' or other restrictive specifications without 
the prior written approval of the contracting officer. The contracting 
officer must inform prospective architect-engineers of this requirement 
during the negotiation phase, prior to award of a contract for design.
    (c) If VA has determined that only one product will meet the 
Government's minimum needs and VA will not allow the submission of 
``equal'' products, the contracting officer must include the clause 
found at 852.236-90, Restriction on Submission and Use of Equal 
Products, in the solicitation and complete the clause by listing the 
items to which the clause applies. This clause places bidders on notice 
that the ``brand name or equal'' provisions of the clause found at FAR 
52.236-5, Materials and Workmanship, and any other provision that may 
authorize the submission of an ``equal'' product, will not apply to the 
specific items listed.



Sec. 836.203  Government estimate of construction costs.

    The overall amount of the Government estimate must not be disclosed 
until after award of the contract. After award, the contracting officer 
may disclose the overall amount upon request.



Sec. 836.204  Disclosure of the magnitude of construction projects.

    In lieu of the estimated price ranges described in FAR 36.204, the 
contracting officer must identify the magnitude of a VA project in 
advance notices and solicitations in terms of one of the following price 
ranges:
    (a) Less than $25,000.
    (b) Between $25,000 and $100,000.

[[Page 232]]

    (c) Between $100,000 and $250,000.
    (d) Between $250,000 and $500,000.
    (e) Between $500,000 and $1,000,000.
    (f) Between $1,000,000 and $2,000,000.
    (g) Between $2,000,000 and $5,000,000.
    (h) Between $5,000,000 and $10,000,000.
    (i) Between $10,000,000 and $20,000,000.
    (j) Between $20,000,000 and $50,000,000.
    (k) Between $50,000,000 and $100,000,000.
    (l) More than $100,000,000.



Sec. 836.206  Liquidated damages.

    The contracting officer may include a liquidated damages provision 
in a construction contract when the criteria of FAR 11.501 and 811.501 
are met. If partial performance may be accepted and used to the 
advantage of the Government, the contracting officer must include the 
clause substantially as set forth in 852.211-74, Liquidated Damages, in 
addition to the clause set forth in FAR 52.211-12.



Sec. 836.209  Construction contracts with architect-engineer firms.

    (a) When the contracting officer considers it necessary or 
advantageous to award a contract for construction of a design-bid-build 
project, as defined at FAR 36.102, to a firm or person that designed the 
project, the contracting officer must request prior approval from one of 
the following:
    (1) The facility or VISN director, as appropriate, or, for National 
Cemetery Administration contracts, the Director, Technical Support 
Service, for contracts involving nonrecurring maintenance (NRM) funds.
    (2) The Director, Office of Construction and Facilities Management, 
for contracts involving construction funds.
    (b) The contracting officer must furnish complete justification in 
the request.
    (c) This section does not apply to design-build contracts, as 
defined at FAR 36.102.



Sec. 836.213  Special procedures for sealed bidding in construction 
          contracting.



Sec. 836.213-4  Notice of award.

    The contracting officer must provide to the contractor a notice of 
award (letter of acceptance) for any contract award in excess of 
$25,000.



Sec. 836.213-70  Notice to proceed.

    (a) The contracting officer must provide construction contractors 
with a written notice to proceed for the work. A notice to proceed will 
normally be sent only after the contractor has provided performance and 
payment bonds or payment protection and the completed contract forms, 
where applicable, and the contracting officer has accepted them. If the 
urgency of the work or other proper reason requires the contractor to 
begin work immediately, the contracting officer may include in the award 
letter a notice to proceed, with the reservation that payments are 
contingent upon receipt and approval of the required bonds or payment 
protection.
    (b) If the contract provides for liquidated damages, the contracting 
officer must send the notice to proceed by certified mail, return 
receipt requested, or any other method that provides signed evidence of 
receipt. The notice to proceed will advise the contractor that the work 
must be completed within ---- (insert contract time for completion) 
calendar days from the date of receipt shown on the certified mail 
receipt card returned by the post office or on the proof of delivery 
provided by the delivery service.
    (c) If the contract does not provide for liquidated damages, 
certified mail is not required. In notices to proceed for these 
contracts, the contracting officer must establish a date for completion 
that takes into consideration the time required for the notice to arrive 
by regular mail.
    (d) At the time the notice to proceed is sent to the contractor, the 
contracting officer must furnish a copy to the resident engineer or the 
Chief, Engineering Service.
    (e) The contracting officer must file a copy of the notice to 
proceed with copy A of the contract. When certified mail or other method 
of certified delivery is used, the contracting officer must attach the 
certified mail receipt card returned by the post office or the proof of 
delivery provided by the delivery service to the copy of the notice to 
proceed. The contracting officer must file copies of the notice to 
proceed with copies C and D of the contract after the

[[Page 233]]

date of receipt has been established and indicated on the notice to 
proceed.

                     Subpart 836.5_Contract Clauses



Sec. 836.500  Scope of subpart.

    (a) The clauses and provisions prescribed in this subpart are set 
forth for use in fixed-price construction contracts in addition to those 
in FAR Subpart 52.2.
    (b) Additional clauses and provisions not inconsistent with those in 
FAR subparts 36.5 and 52.2 and those prescribed in this subpart are 
authorized when determined necessary or desirable by the contracting 
officer, and when approved as provided in subpart 801.4.
    (c) Clauses and provisions that differ from those contained in FAR 
subparts 36.5 and 52.2 and this subpart, but considered essential to the 
procurement of VA requirements, shall not be used unless the deviation 
procedure set forth in Subpart 801.4 has been complied with.



Sec. 836.501  Performance of work by the contractor.

    The contracting officer shall insert the clause at 852.236-72, 
Performance of work by the contractor, in solicitations and contracts 
for construction that contain the FAR clause at 52.236-1, Performance of 
Work by the Contractor. When the solicitations or contracts include a 
section entitled ``Network Analysis System (NAS),'' the contracting 
officer must use the clause with its Alternate I.



Sec. 836.513  Accident prevention.

    The contracting officer must insert the clause at 852.236-87, 
Accident Prevention, in solicitations and contracts for construction 
that contain the clause at FAR 52.236-13, Accident Prevention.



Sec. 836.521  Specifications and drawings for construction.

    The contracting officer shall insert the clause at 852.236-71, 
Specifications and drawings for construction, in solicitations and 
contracts for construction that include the FAR clause at 52.236-21, 
Specifications and Drawings for Construction.



Sec. 836.570  Correspondence.

    The contracting officer shall insert the clause at 852.236-76, 
Correspondence, in solicitations and contracts for construction expected 
to exceed the micro-purchase threshold for construction (currently 
$2,000).



Sec. 836.571  Reference to ``standards.''

    The contracting officer shall insert the clause at 852.236-77, 
Reference to ``standards,'' in solicitations and contracts for 
construction expected to exceed the micro-purchase threshold for 
construction.



Sec. 836.572  Government supervision.

    The contracting officer shall insert the clause at 852.236-78, 
Government supervision, in solicitations and contracts for construction 
expected to exceed the micro-purchase threshold for construction.



Sec. 836.573  Daily report of workers and materials.

    The contracting officer shall insert the clause at 852.236-79, Daily 
report of workers and materials, in solicitations and contracts for 
construction expected to exceed the simplified acquisition threshold. 
The contracting officer may, when in the best interest of the 
Government, insert the clause in solicitations and contracts for 
construction when the contract amount is expected to be at or below the 
simplified acquisition threshold.



Sec. 836.574  Subcontracts and work coordination.

    The contracting officer shall insert the clause at 852.236-80, 
Subcontracts and work coordination, in solicitations and contracts for 
construction expected to exceed the micro-purchase threshold for 
construction. When the solicitations or contracts are for new 
construction work with complex mechanical-electrical work, the 
contracting officer may use the clause with its Alternate I.



Sec. 836.575  Schedule of work progress.

    The contracting officer shall insert the clause at 852.236-84, 
Schedule of

[[Page 234]]

work progress, in solicitations and contracts for construction that are 
expected to exceed the micro-purchase threshold for construction and 
that do not contain a section entitled ``Network Analysis System 
(NAS).''



Sec. 836.576  Supplementary labor standards provisions.

    The contracting officer shall insert the clause at 852.236-85, 
Supplementary labor standards provisions, in solicitations and contracts 
for construction that are expected to exceed the micro-purchase 
threshold for construction.



Sec. 836.577  Workers' compensation.

    The contracting officer shall insert the clause at 852.236-86, 
Workers' compensation, in solicitations and contracts for construction 
that are expected to exceed the micro-purchase threshold for 
construction.



Sec. 836.578  Changes--supplement.

    (a) The contracting officer shall insert the clause at 852.236-88, 
Contract changes--supplement, in solicitations and contracts for 
construction that are expected to exceed the micro-purchase threshold 
for construction. (This section has been promulgated as a deviation from 
the FAR as provided in 801.4.)
    (b) When negotiated changes exceed $500,000, paragraph (a) of the 
clause at 852.236-88 will apply. Because paragraph (a) does not provide 
ceiling rates for indirect expenses, the contractor must furnish cost 
breakdowns and other supporting data on its rates for indirect expenses 
as part of its price proposal. The contracting officer must negotiate 
the rates for indirect expenses with the contractor and may request an 
audit in accordance with FAR 15.404-2.
    (c) When the negotiated change will be $500,000 or less, paragraph 
(b) of the clause at 852.236-88 will apply. Because the indirect cost 
rates in paragraph (b) of the clause at 852.236-88 are ceiling rates, 
the contracting officer must negotiate indirect expense rates within the 
ceiling limitations.



Sec. 836.579  Special notes.

    The contracting officer shall insert the clause at 852.236-91, 
Special notes, in solicitations and contracts for construction that are 
expected to exceed the micro-purchase threshold for construction.

                Subpart 836.6_Architect-Engineer Services



Sec. 836.602  Selection of firms for architect-engineer contracts.



Sec. 836.602-1  Selection criteria.

    (a) In addition to the evaluation criteria set forth in FAR 36.602-
1, the evaluation board must consider the factors set forth in paragraph 
(b) of this section as they apply to the project or purpose of the 
selection. Values must be assigned to each factor in determining the 
relative qualifications of the firms identified as qualified through the 
pre-selection process. The board may adjust the assigned values after 
its discussions.
    (b) The following factors must be considered:
    (1) Reputation and standing of the firm and its principal officials 
with respect to professional performance, general management, and 
cooperativeness.
    (2) Record of significant claims against the firm because of 
improper or incomplete architectural and engineering services.
    (3) Specific experience and qualifications of personnel proposed for 
assignment to the project and their record of working together as a 
team.



Sec. 836.602-2  Evaluation boards.

    (a) The Director, Office of Construction and Facilities Management, 
shall appoint an evaluation board to select architect-engineer 
contractors for Office of Construction and Facilities Management 
projects. The Director, Office of Construction and Facilities 
Management, shall appoint an evaluation board to select architect-
engineer contractors for National Cemetery Administration projects. The 
facility or VISN director, as appropriate, shall appoint an evaluation 
board to select architect-engineer contractors for field facility 
projects.
    (b) The Director, A/E Evaluation and Program Support Service, will 
chair the evaluation board for Office of Construction and Facilities 
Management

[[Page 235]]

architect-engineer contracts. The Chair may designate the Project 
Director or Project Manager to act as Chair when necessary. When 
appointing the board's members, the Director, Office of Construction and 
Facilities Management, must include the appropriate Project Manager and 
as many qualified professional architects or engineers from the Office 
of Construction and Facilities Management technical services as may be 
considered appropriate for the particular project. The Director, Office 
of Construction and Facilities Management may designate additional 
members from the Office of Construction and Facilities Management or 
from other Department administrations and staff offices when 
appropriate.
    (c) The Director, Office of Construction and Facilities Management, 
shall ensure that the board consists of no fewer than three members, one 
of whom must be a National Cemetery Administration senior level 
contracting officer. The Director shall designate one of the board 
members as the Chair.
    (d) The evaluation board for a VA field facility must consist of no 
fewer than two members, one of whom will be the HCA (or the senior 
contracting officer at the facility if there is no HCA on site) and the 
other will be the Chief, Engineering Service, or their alternates. Where 
a facility has two or more engineers on its staff, the facility or VISN 
director must appoint an additional engineer to the board. The Chair of 
the board will be the senior engineer.



Sec. 836.602-4  Selection authority.

    The Director, Office of Construction and Facilities Management (for 
Central Office contracts), the Director, Office of Construction 
Management (for National Cemetery Administration contracts), and the 
facility or VISN director (for field facility contracts), as 
appropriate, or persons acting in those capacities, are designated as 
the approving officials for the recommendations of the respective 
evaluation boards.



Sec. 836.602-5  Short selection process for contracts not to exceed the 
          simplified acquisition threshold.

    Either of the procedures provided in FAR 36.602-5 may be used to 
select firms for architect-engineer contracts that are not expected to 
exceed the simplified acquisition threshold.



Sec. 836.603  Collecting data on and appraising firms qualifications.

    The Director, Office of Construction and Facilities Management, for 
Central Office; the Director, Office of Construction Management, for 
National Cemetery Administration; and the Chief, Engineering Service, 
for field facilities, are responsible for collecting Standard Forms 330 
and maintaining a data file on architect-engineer qualifications.



Sec. 836.606  Negotiations.



Sec. 836.606-70  General.

    To assure that the fee limitation is not violated, the contracting 
officer must maintain suitable records to be able to isolate the amount 
in the total fee to which the 6-percent limitation applies.



Sec. 836.606-71  Architect-engineer's proposal.

    (a) When the contract price is estimated to be $50,000 or more, the 
contracting officer must use VA Form 10-6298, Architect-Engineer Fee 
Proposal, to obtain the proposal and supporting cost data from the 
proposed contractor and subcontractor in the negotiation of an 
architect-engineer contract for design services.
    (b) In obtaining architect-engineer services for research study, 
seismic study, master planning study, construction management and other 
related services contracts, the contracting officer must use VA Form 10-
6298 supplemented or modified as needed for the particular project type.



Sec. 836.606-72  Contract price.

    (a) Where negotiations with the top-rated firm are unsuccessful, the 
contracting officer shall, after authorization by the Director, Office 
of Construction and Facilities Management, the Director, Office of 
Construction Management, or the facility or VISN

[[Page 236]]

director, as appropriate, terminate the negotiations and undertake 
negotiations with the firm next in order of preference.
    (b) The contracting officer shall submit a recommendation for award 
of the contract at the negotiated fee to the Director, Office of 
Construction and Facilities Management, the Director, Office of 
Construction Management, or the facility or VISN director, as 
appropriate. A copy of the negotiation memorandum prepared in accordance 
with FAR 15.406-3 and, whenever a field pricing report has been 
received, a copy of the report must accompany the recommendation.



Sec. 836.606-73  Application of 6 percent architect-engineer fee 
          limitation.

    (a) The total cost of the architect or engineer services contracted 
for must not exceed 6 percent of the estimated cost of the construction 
project plus any fees for related services and activities such as those 
shown in paragraph (c) of this section.
    (b) To support project submissions, the engineering officer or 
project engineer must use VA Form 10-1193, Application for Health Care 
Facility Project, and Form 10-6238, EMIS Construction Program Estimate 
Worksheet, and must show the proposed technical services where necessary 
and applicable.
    (c) The 6 percent fee limitation does not apply to the following 
architect or engineer services:
    (1) Investigative services including but not limited to:
    (i) Determination of program requirements, including schematic or 
preliminary plans and estimates;
    (ii) Determination of feasibility of proposed project;
    (iii) Preparation of measured drawings of existing facility;
    (iv) Subsurface investigation;
    (v) Structural, electrical, and mechanical investigation of existing 
facility; and
    (vi) Surveys: topographic, boundary, utilities, etc.
    (2) Special consultant services that are not normally available in 
organizations of architects or engineers and that are not specifically 
applied to the actual preparation of working drawings or specifications 
of the project for which the service are required.
    (3) Other:
    (i) Reproduction of approved designs through models, color 
renderings, photographs, or other presentation media;
    (ii) Travel and per diem allowances other than those required for 
the development and review of working drawings and specifications;
    (iii) Supervision or inspection of construction, review of shop 
drawings or samples, and other services performed during the 
construction phase; and
    (iv) All other services that are not an integral part of the 
production and delivery of plans, designs, and specifications.
    (4) The cost of reproducing drawings and specifications for bidding 
and their distribution to prospective bidders and plan file rooms.

                      PART 837_SERVICE CONTRACTING

                 Subpart 837.1_Service Contracts_General

Sec.

Sec. 837.103 Contracting officer responsibility.

Sec. 837.110 Solicitation provisions and contract clauses.

Sec. 837.110-70 Services provided to eligible beneficiaries.

             Subpart 837.2_Advisory and Assistance Services


Sec. 837.203 Policy.

             Subpart 837.4_Nonpersonal Health Care Services


Sec. 837.403 Contract clause.

                    Subpart 837.70_Mortuary Services


Sec. 837.7001 General.

Sec. 837.7002 List of qualified funeral directors.

Sec. 837.7003 Funeral authorization.

Sec. 837.7004 Administrative necessity.

Sec. 837.7005 Unclaimed remains--all other cases.

    Authority: 38 U.S.C. 501; 40 U.S.C. 121(c); and 48 CFR 1.301-1.304.

    Source: 73 FR 2717, Jan. 15, 2008, unless otherwise noted.

[[Page 237]]

                 Subpart 837.1_Service Contracts_General



Sec. 837.103  Contracting officer responsibility.

    When the contracting officer determines that legal assistance is 
necessary in determining whether a proposed service contract is for 
personal or non-personal services, the contracting officer will request 
a legal opinion from the appropriate Regional Counsel.



Sec. 837.110  Solicitation provisions and contract clauses.

    The contracting officer shall insert the clause at 852.237-70 
Contractor responsibilities, in solicitations and contracts for 
services.



Sec. 837.110-70  Services provided to eligible beneficiaries.

    Contracting officers shall include the clause at 852.271-70, 
Nondiscrimination in services provided to beneficiaries, in all 
solicitations and contracts covering services provided to eligible 
beneficiaries.

             Subpart 837.2_Advisory and Assistance Services



Sec. 837.203  Policy.

    The definition of advisory and assistance services includes, in 
addition to examples listed in FAR 37.203, services to obtain peer 
review of research proposals.

             Subpart 837.4_Nonpersonal Health Care Services



Sec. 837.403  Contract clause.

    The contracting officer shall insert the clause at 852.237-7, 
Indemnification and medical liability insurance, in lieu of FAR Clause 
52.237-7, in solicitations and contracts for nonpersonal health-care 
services, including contracts awarded under the authority of 38 U.S.C. 
7409, 38 U.S.C. 8151-8153, and part 873. The contracting officer may 
include the clause in bilateral purchase orders for nonpersonal health-
care services awarded under the procedures in FAR Part 13 and Part 813.

                    Subpart 837.70_Mortuary Services



Sec. 837.7001  General.

    This subpart establishes the policies and procedures governing the 
procurement of funeral and burial services for deceased beneficiaries of 
VA, as provided in 38 U.S.C. 2302, 2303, and 2308.



Sec. 837.7002  List of qualified funeral directors.

    Contracting officers will establish, in coordination with cognizant 
Chief, Medical Administration Service (MAS) personnel or other personnel 
designated by the facility director to perform these functions, a list 
of funeral directors capable of performing the burial services specified 
in 837.7003. The contracting officer will attempt to establish a 
commitment to perform these services within the statutory limitation of 
$300 (see 38 U.S.C. 2302). Each funeral director must be fully licensed 
in the jurisdiction in which the business operates. If there has been no 
prior experience with the funeral director that would ensure the 
adequacy of the funeral director's services and casket, arrangements 
will be made before contract negotiation to inspect the premises and the 
casket to be provided, as well as to check with the local business 
bureau and/or Chamber of Commerce. (38 U.S.C. 2302)



Sec. 837.7003  Funeral authorization.

    (a) When a veteran dies while receiving care in a VA health care 
facility or in a non-VA institution at VA's expense, and the decedent's 
remains are unclaimed, the Chief, MAS, or the person designated by the 
facility director to perform these functions, will forward to the HCA a 
properly executed VA form 10-2065, Funeral Arrangements, requesting that 
funeral and burial services for the deceased be procured.
    (b) The contracting officer will enter into negotiations with local 
funeral directors to procure a complete funeral and burial service 
within the statutory allowance of $300. The purchase order must list the 
specific services to be provided. The services must consist of the 
following:
    (1) Preparation of the body, embalming.

[[Page 238]]

    (2) Clothing.
    (3) Casket. (The casket, at a minimum, must be constructed from 
thick, strong particle board and must be of sufficient strength to 
support the weight of an adult human body. Cardboard or press paper or 
similar materials are not acceptable.)
    (4) The securing of all necessary permits.
    (5) Ensuring that a United States flag (provided the funeral 
director in accordance with M-1, Part I, paragraph 14.40) accompanies 
the casket to the place of burial.
    (c) An additional allowance for transportation of the body to the 
place of burial is provided in 38 U.S.C. 2308. This allowance will cover 
the transportation cost of shipment of the body by common carrier or by 
hearse from the VA facility to the funeral home and to the place of 
burial, any charges for an outside shipping box, and the charges for 
securing all necessary permits for removal or shipment of the body. 
These costs are not chargeable against the $300 allowance.
    (d) In accordance with M-1, Part I, paragraph 14.37, the contracting 
officer will designate the Chief, MAS, or the person designated by the 
facility director to perform these functions, to be responsible for the 
medical inspection of the mortuary services performed and inspection of 
the merchandise furnished. This designee will also be responsible for 
certifying receipt on the receiving report.
    (e) The HCA will assist the Chief, MAS, or the person designated by 
the facility director to perform these functions, in developing the 
local procedures specified in M-1, Part I, paragraph 14.37c. (38 U.S.C. 
2302, 2303, and 2308)



Sec. 837.7004  Administrative necessity.

    (a) VA may make arrangements and assume expenses for local burial 
under separate contractual agreement when:
    (1) A person dies under VA care who is not legally entitled to such 
care at VA's expense;
    (2) No relatives or friends claim the remains; and
    (3) The municipal, county, or State officials refuse to provide for 
final disposition.
    (b) When the contracting officer cannot obtain a full and complete 
funeral and burial service as prescribed in 837.7003 within the 
statutory allowance, before taking any further action, the contracting 
officer will secure from the facility or VISN director, as appropriate, 
a written determination that VA must accomplish the disposition of the 
remains as an administrative necessity. The facility director will also 
authorize in writing the expenditure of such additional funds as may be 
necessary for this purpose.
    (c) The contracting officer will make the facility director's 
determination and authorization a part of the contract file. (38 U.S.C. 
2302)



Sec. 837.7005  Unclaimed remains--all other cases.

    Requests for information on the disposition of the unclaimed remains 
of a veteran whose death occurs while not under the direct care or 
treatment of VA will be referred to the Veterans Services Officer for 
processing in accordance with M27-1, Part II.

        PART 839_ACQUISITION OF INFORMATION TECHNOLOGY [RESERVED]

                PART 841_ACQUISITION OF UTILITY SERVICES

                          Subpart 841.1_General

Sec.

Sec. 841.100 Scope of part.

Sec. 841.103 Statutory and delegated authority.

                Subpart 841.2_Acquiring Utility Services


Sec. 841.201 Policy.

    Authority: 40 U.S.C. 121(c) and (d); and 48 CFR 1.301-1.304.

    Source: 73 FR 2717, Jan. 15, 2008, unless otherwise noted.

                          Subpart 841.1_General



Sec. 841.100  Scope of part.

    This part prescribes procedures for obtaining delegations of 
authority to award contracts for utility connection charges and provides 
guidance on review requirements for such proposed contracts.

[[Page 239]]



Sec. 841.103  Statutory and delegated authority.

    (a) The Assistant Commissioner for Procurement, General Services 
Administration (GSA), has delegated the Secretary of Veterans Affairs 
authority to enter into public utility contracts for connection charges 
for utility services.
    (b) Except as provided in paragraph (a) of this section, the 
authority to award all other contracts for utility services, as defined 
in FAR 41.101, is vested in GSA (see FAR 41.103). VA contracting 
officers who wish to award local contracts for utility services, other 
than for connection charges, must first obtain a delegation of authority 
to award such contracts from GSA. Contracting officers shall submit 
requests for delegation of authority directly to GSA.
    (c) Any authority described in paragraphs (a) or (b) of this section 
delegated to the Secretary is further delegated to the SPE and is 
further delegated to the DSPE and to VA contracting officers within the 
limits of their warrants.

                Subpart 841.2_Acquiring Utility Services



Sec. 841.201  Policy.

    As required by 801.602-71, contracting officers must submit 
solicitations and proposed agreements for utility services exceeding 
$50,000 in total costs to the appropriate Acquisition Resources Service 
office for technical and legal review.

[[Page 240]]

                    SUBCHAPTER G_CONTRACT MANAGEMENT

           PART 842_CONTRACT ADMINISTRATION AND AUDIT SERVICES

Sec.

Sec. 842.000 Scope of part.

Sec. 842.070 Definitions.

                  Subpart 842.1_Contract Audit Services


Sec. 842.101 Contract audit responsibilities.

Sec. 842.102 Assignment of contract audit services.

                    Subpart 842.7_Indirect Cost Rates


Sec. 842.705 Final indirect cost rates.

                   Subpart 842.8_Disallowance of Costs


Sec. 842.801 Notice of intent to disallow costs.

Sec. 842.801-70 Audit assistance prior to disallowing costs.

Sec. 842.803 Disallowing costs after incurrence.

          Subpart 842.12_Novation and Change-of-Name Agreements


Sec. 842.1203 Processing agreements.

    Authority: 40 U.S.C. 121(c) and 48 CFR 1.301-1.304.

    Source: 73 FR 2717, Jan. 15, 2008, unless otherwise noted.



Sec. 842.000  Scope of part.

    This part applies to all contracts, whether awarded through sealed 
bidding or negotiation.



Sec. 842.070  Definitions.

    Contract administration is the coordination of actions required for 
the performance of a contract. This includes the contracting officer's 
guidance and supervision necessary to assure that the contractor 
fulfills all contractual obligations.

                  Subpart 842.1_Contract Audit Services



Sec. 842.101  Contract audit responsibilities.

    (a) Contracting officers may use the support services of other 
agencies to the extent feasible. Examples of such services include: pre-
award surveys; quality assurance and technical inspection of contract 
items; and review of contractors' procurement systems. Contracting 
officers obtaining support services from any other Government department 
or agency must do so on the basis of an approved negotiated interagency 
support agreement.
    (b) An interagency support agreement is a written instrument of 
understanding between the parties to the agreement. The agreement should 
clearly state the following:
    (1) The accord reached between the two parties involved, especially 
the obligations assumed and the rights granted each party.
    (2) The resources that both the supplying and receiving parties will 
provide.
    (3) The funding and reimbursement arrangements.
    (4) Clauses permitting revisions, modifications, or cancellation of 
the agreement.



Sec. 842.102  Assignment of contract audit services.

    (a) When required, contracting officers shall request the assistance 
of the VA Office of the Inspector General (OIG), Office of Contract 
Review, to provide pre- and post-award audit, review, and advisory 
services associated with the award or modification of:
    (1) Federal Supply Schedule and other contracts awarded by the VA 
National Acquisition Center;
    (2) Scarce medical specialist or sharing contracts awarded under the 
authority of 38 U.S.C. 7409 or 8153, and;
    (3) Claims involving such contracts.
    (b) Contracting officers may request the assistance of either the VA 
OIG Office of Contract Review or the Defense Contract Audit Agency 
(DCAA) to provide pre- and post-award audit, review, and advisory 
services associated with other types of contracts or claims.

                    Subpart 842.7_Indirect Cost Rates



Sec. 842.705  Final indirect cost rates.

    (a) Except when the quick-closeout procedures described in FAR 
42.708 are used, contracting officers must request audits on proposed 
final indirect cost rates and billing rates for use in cost

[[Page 241]]

reimbursement, fixed-price incentive, and fixed-price redeterminable 
contracts as prescribed in FAR Subpart 42.7.
    (b) When the quick closeout procedures are used, the contracting 
officers must perform a review and validation of the contractor's data 
for accuracy and reasonableness of the proposed rates for negotiating 
the settlement of indirect costs for a specific contract.

                   Subpart 842.8_Disallowance of Costs



Sec. 842.801  Notice of intent to disallow costs.



Sec. 842.801-70  Audit assistance prior to disallowing costs.

    If a contracting officer determines that costs should be disallowed 
during the performance of a cost reimbursement, fixed-price incentive, 
or fixed-price redetermination contract exceeding the thresholds 
specified in FAR 15.403-4, the contracting officer must request audit 
assistance. The VA OIG shall conduct audits of contracts for health care 
resources and contracting officers shall request such audits directly 
from that office. For all other types of contracts, the contracting 
officer must obtain an audit control number from Acquisition Resources 
Service and send a formal request to conduct the audit directly to the 
nearest Defense Contract Audit Agency (DCAA) office, referencing the 
audit control number and the project number (if any).



Sec. 842.803  Disallowing costs after incurrence.

    Contracting officers may approve or disapprove contractors' vouchers 
for payment and process them to the servicing fiscal office. Such 
approval or disapproval must be within the limitations of the 
contracting officer's warrant and the contract for which the voucher is 
submitted must be within the contracting officer's delegation of 
contracting authority.

          Subpart 842.12_Novation and Change-of-Name Agreements



Sec. 842.1203  Processing agreements.

    Before execution of novation and change-of-name agreements, 
contracting officers must submit all supporting agreements and 
documentation to the OGC for review as to legal sufficiency.

       PART 844_SUBCONTRACTING POLICIES AND PROCEDURES [RESERVED]

                       PART 846_QUALITY ASSURANCE

                     Subpart 846.3_Contract Clauses

Sec.

Sec. 846.302 Fixed-price supply contracts.

Sec. 846.302-70 Guarantee clause.

Sec. 846.302-71 Inspection.

Sec. 846.302-72 Frozen processed foods.

Sec. 846.302-73 Noncompliance with packaging, packing and/or marking 
          requirements.

Sec. 846.312 Construction contracts.

           Subpart 846.4_Government Contract Quality Assurance


Sec. 846.408 Single-agency assignments of Government contract quality 
          assurance.

Sec. 846.408-70 Inspection of subsistence.

Sec. 846.408-71 Waiver of USDA inspection and specifications.

Sec. 846.470 Use of commercial organizations for inspections and grading 
          services.

Sec. 846.471 Determination authority.

Sec. 846.472 Inspection of repairs for properties under the Loan 
          Guaranty and Direct Loan Programs.

Sec. 846.472-1 Repairs of $1,000 or less.

Sec. 846.472-2 Repairs in excess of $1,000.

                        Subpart 846.7_Warranties


Sec. 846.710 Contract clauses.

Sec. 846.710-70 Special warranties.

Sec. 846.710-71 Warranty for construction--guarantee period services.

    Authority: 38 U.S.C. 501; 40 U.S.C. 121(c); and 48 CFR 1.301-1.304.

    Source: 73 FR 2717, Jan. 15, 2008, unless otherwise noted.

[[Page 242]]

                     Subpart 846.3_Contract Clauses



Sec. 846.302  Fixed-price supply contracts.



Sec. 846.302-70  Guarantee clause.

    (a) The contracting officer shall insert the clause at 852.246-70, 
Guarantee, in solicitations for the acquisition of equipment.
    (b) If it is industry policy to furnish, but not install, 
replacement material and parts at the contractor's expense, the last 
sentence of the clause at 852.248-70 will be changed to indicate that 
cost of installation shall be borne by the Government. Where it is 
industry policy to guarantee components for the life of the equipment 
(e.g., crystals in transmitters and receivers in radio communications 
systems) or to require that highly technical equipment be returned to 
the factory (at the contractor's or the Government's expense) for 
replacement of defective materials or parts, then the clause will be 
revised to be compatible with such policy.



Sec. 846.302-71  Inspection.

    The contracting officer shall include a ``Rejected Goods'' contract 
clause in solicitations and contracts as follows:
    (a) Except as provided in paragraph (b) of this section, insert the 
clause at 852.246-71, Inspection, in solicitations and contracts for the 
acquisition of supplies or equipment.
    (b) In solicitations and contracts for packing house and dairy 
products, bread and bakery products, and for fresh and frozen fruits and 
vegetables, insert the Alternate I clause at 852.246-71, Inspection.



Sec. 846.302-72  Frozen processed foods.

    The contracting officer shall insert the clause at 852.246-72, 
Frozen processed foods, in solicitations and contracts for frozen 
processed foods.



Sec. 846.302-73  Noncompliance with packaging, packing and/or marking 
          requirements.

    The contracting officer shall insert the clause at 852.246-73, 
Noncompliance with packaging, packing, and/or marking requirements, in 
non-commercial item solicitations and contracts for supplies or 
equipment where there are special packaging, packing and/or marking 
requirements. The clause may be used in commercial item acquisitions if 
a waiver is approved in accordance with FAR 12.302(c) and 812.302.



Sec. 846.312  Construction contracts.

    The contracting officer shall insert the clause at 852.236-74, 
852.236-74, Inspection of construction, in solicitations and contracts 
for construction that include the FAR clause at 52.246-12, Inspection of 
Construction.

           Subpart 846.4_Government Contract Quality Assurance



Sec. 846.408  Single-agency assignments of Government contract quality 
          assurance.



Sec. 846.408-70  Inspection of subsistence.

    (a) Before issuing a solicitation for subsistence, the contracting 
officer must determine whether:
    (1) Representatives of the U.S. Department of Agriculture (USDA) or 
the Department of Commerce will inspect for specification compliance 
before shipment; or
    (2) Personnel of the purchasing activity will inspect for 
specification compliance at the time of delivery.
    (b) The contracting officer must indicate the time and place of 
inspection in the solicitation.
    (c) Because the requirement for USDA or Department of Commerce 
inspections and certifications result in additional contractor costs 
that may be ultimately reflected in bid prices, the contracting officer, 
in consultation with the Chief, Nutrition and Food Service, must 
evaluate the need for such inspections. The evaluation must include the 
following:
    (1) The quality assurance already provided by other mandatory 
inspection systems.
    (2) The proposed suppliers' own quality control system.
    (3) Experience with the proposed suppliers.
    (4) The pre-qualifying of the suppliers' quality assurance systems 
and subsequently waiving inspections and certifications for future 
solicitations.
    (5) The cost of the inspections.

[[Page 243]]

    (d) When the contracting officer indicates that either the USDA or 
the Department of Commerce will conduct the inspection, the contracting 
officer must also provide in the solicitation that the contractor is 
responsible for all of the following:
    (1) Arranging and paying for inspection services.
    (2) Obtaining from the inspectors a certificate indicating that the 
product complies with specifications.
    (3) Assuring that the certificate, or copy, accompanies the shipment 
or is furnished to the receiving installation before shipment, or 
notifying the installation when the certificate is not immediately 
available.
    (4) Seeing that acceptable products are covered by an inspection 
agency checkloading certificate or stamped by the inspector as 
prescribed by the contracting officer.
    (5) Furnishing samples for inspection at the contractor's expense.
    (6) Indicating the address where inspection will occur.
    (e) The contracting officer must furnish a copy of the purchase 
document to the inspecting activity.



Sec. 846.408-71  Waiver of USDA inspection and specifications.

    (a) When the amount of an item to be purchased will not exceed 500 
pounds per delivery, the contracting officer may purchase the following 
without reference to the specifications in Part IV of the Federal Supply 
Catalog, Stock List, FSC Group 89, Subsistence, Publication No. C8900-
SL, and the USDA inspection requirements:
    (1) Butter.
    (2) Cheese (except cottage cheese).
    (3) Sausage.
    (4) Meat food products*.
---------------------------------------------------------------------------

    * ``Meat food products'' means processed foods containing meat in 
substantial proportion and other listed ingredients including seasoning, 
e.g., frankfurters, coldcuts. Whole or prefabricated meats, e.g., pork 
chops, hamburger, are considered meats, not meat food products.
---------------------------------------------------------------------------

    (5) Bacon, smoked.
    (6) Bacon, Canadian style.
    (b) When the items listed in paragraph (a) of this section are 
procured together with items that are not exempt, the contracting 
officer must include the following in the solicitation:

    Items * * * are not required to be in accordance with the 
specifications contained in Part IV of the Federal Supply Catalog, Stock 
List, FSC Group 89, Subsistence, Publication No. C8900-SL, and the 
special USDA inspection is not required. VA will inspect for quality and 
condition upon delivery at destination. These items are, however, 
subject to the quality controls stated herein.

    (c) As appropriate, the contracting officer must include the 
following statements in each invitation for bid, request for proposal, 
quotation, or purchase order:
    (1) Butter. This product must be graded by the USDA and labeled 
``Grade A'' or the grade specified herein.
    (2) Sausage and meat food products.*
    (i) This product must be a high commercial product and must have 
been prepared in a federally inspected plant and bear the USDA 
establishment number stamp evidencing that it is sound, healthful, 
wholesome, and fit for human consumption; and
    (ii) This product must bear a label complying with the Federal Food, 
Drug and Cosmetic Act that requires the listing of all ingredients in 
the order of their predominance.
    (3) Bacon, smoked; and bacon, Canadian style. This product must be a 
high commercial product and must have been prepared in a federally 
inspected plant and bear the USDA establishment number stamp evidencing 
that it is sound, healthful, wholesome, and fit for human consumption.
    (d) When using a ``brand name or equal'' purchase description, the 
contracting officer must list every brand name item that is known to be 
acceptable and available in the area.



Sec. 846.470  Use of commercial organizations for inspections and 
          grading services.

    The contracting officer may use a commercial organization for 
inspection and grading services when the contracting officer determines 
that all of the following conditions exist:
    (a) The results of a technical inspection or grading are dependent 
upon the application of scientific principles or specialized techniques.

[[Page 244]]

    (b) VA is unable to employ the personnel qualified to properly 
perform the services and is unable to locate another Federal agency 
capable of providing the service.
    (c) The inspection or grading results issued by a private 
organization are essential to verify the acceptance or rejection of a 
special commodity.
    (d) The services may be performed without direct Government 
supervision.



Sec. 846.471  Determination authority.

    The following officials must make the determinations required in 
846.470:
    (a) The Director, Office of Construction and Facilities Management, 
for those items and services for which purchase authority has been 
assigned to the Office of Construction and Facilities Management.
    (b) The Director, Veterans Canteen Service, for those items and 
services purchased, or contracted for, by the Veterans Canteen Service 
(except those items purchased from VA supply sources).
    (c) The DSPE for all other supplies, equipment, and services.



Sec. 846.472  Inspection of repairs for properties under the Loan 
          Guaranty and Direct Loan Programs.

    As provided in 846.472-1 and 846.472-2, management brokers or 
qualified fee or staff inspectors must conduct a final inspection of all 
repair programs upon completion. In addition, the broker or inspector 
must conduct intermediate or progress inspections on extensive or 
technical jobs as specified in the contract.



Sec. 846.472-1  Repairs of $1,000 or less.

    (a) Generally, the management broker must make any required 
inspections for repairs of $1,000 or less. A qualified fee or staff 
inspector must make any required inspection for repairs of $1,000 or 
less if the contracting officer:
    (1) Has not assigned the property to a management broker; or,
    (2) Has determined that the nature of the repairs requires 
supervision by a technician.
    (b) There is no form prescribed for inspection of repairs of $1,000 
or less, but the inspector may use VA Form 26-1839, Compliance 
Inspection Report. Regardless of the form in which the report is 
submitted, the inspector must identify the contractor, property, and the 
repair program and provide sufficient detail to enable the contracting 
officer to make a determination that the work is being performed 
satisfactorily or completed in accordance with the terms of the 
contract.



Sec. 846.472-2  Repairs in excess of $1,000.

    (a) A qualified fee or staff inspector must make the final 
inspection and any intermediate or progress inspections on repairs 
exceeding $1,000.
    (b) The inspector must make the report of inspection on VA Form 26-
1839, Compliance Inspection Report. The inspector must identify the 
property, contractor, and repair program and provide sufficient detailed 
information to enable the contracting officer to make a determination 
that the work is being performed satisfactorily or that it has been 
completed in accordance with the terms of the contract. The inspector 
must itemize any deficiencies and explain the deficiencies in detail.

                        Subpart 846.7_Warranties



Sec. 846.710  Contract clauses.

    The contracting officer shall insert the clause at FAR 52.246-21, 
Warranty of Construction, in solicitations and contracts for 
construction that are expected to exceed the micro-purchase threshold.



Sec. 846.710-70  Special warranties.

    The contracting officer shall insert the clause at 852.246-74, 
Special warranties, in solicitations and contracts for construction that 
include the FAR clause at 52.246-21, Warranty of Construction.



Sec. 846.710-71  Warranty for construction--guarantee period services.

    The contracting officer shall insert the clause at 852.246-75, 
Warranty of construction--guarantee period services, in solicitations 
and contracts for construction that include the FAR clause at 52.246-21, 
Warranty of Construction, and that also include guarantee period 
services.

[[Page 245]]

                         PART 847_TRANSPORTATION

            Subpart 847.3_Transportation in Supply Contracts

Sec.

Sec. 847.303 Standard delivery terms and contract clauses.

Sec. 847.303-1 F.o.b. origin.

Sec. 847.303-70 F.o.b. origin, freight prepaid, transportation charges 
          to be included on the invoice.

Sec. 847.305 Solicitation provisions, contract clauses, and 
          transportation factors.

Sec. 847.305-70 Potential destinations known but quantities unknown.

Sec. 847.306 Transportation factors in the evaluation of offers.

Sec. 847.306-70 Transportation payment and audit.

    Authority: 40 U.S.C. 121(c) and 48 CFR 1.301-1.304.

    Source: 73 FR 2717, Jan. 15, 2008, unless otherwise noted.

            Subpart 847.3_Transportation in Supply Contracts



Sec. 847.303  Standard delivery terms and contract clauses.



Sec. 847.303-1  F.o.b. origin.

    Shipments falling within this category must be shipped on a bill of 
lading, except as provided in 41 CFR 102-118.40. Contracting officers 
must comply with 41 CFR Parts 102-117 and 102-118. Contact the Traffic 
Manager for assistance in determining when to issue the applicable bill 
of lading (VA Commercial Bill of Lading for domestic use or Government 
Bill of Lading for international shipments and domestic off-shore 
shipments) and for all freight estimates.



Sec. 847.303-70  F.o.b. origin, freight prepaid, transportation charges 
          to be included on the invoice.

    (a) The delivery terms will be stated as ``f.o.b. origin, 
transportation prepaid, with transportation charges to be included on 
the invoice,'' under any of the following circumstances:
    (1) When it is determined that an f.o.b. origin purchase or delivery 
order will have transportation charges that do not exceed $250 and the 
occasional exception does not exceed that amount by more than $50.
    (2) Single parcel shipments via express, courier, small package, or 
similar carriers, regardless of shipping cost, if the shipped parcel 
weighs 70 pounds or less and does not exceed 108 inches in length and 
girth combined.
    (3) Multi-parcel shipments via express, courier small package, or 
similar carriers for which transportation charges do not exceed $250 per 
shipment.
    (b) Orders issued on VA Form & 90-2138, Orders for Supplies or 
Services, must identify shipping instructions on the reverse side of the 
form. When VA Form 90-2138 is not used, the vendor must do the 
following:
    (1) Consistent with the terms of the contract, pack, mark, and 
prepare shipment in conformance with carrier requirements to protect the 
personal property and assure the lowest applicable transportation 
charge. Follow package specifications found in the National Motor 
Freight Classification 100 Series.
    (2) Add transportation charges as a separate item on the invoice. 
The invoice must include the following certification: ``The invoiced 
transportation charges have been paid and evidence of such payment will 
be furnished upon the Government's request.''
    (3) Not include charges for insurance or valuation on the invoice 
unless the order specifically requires that the shipment be insured or 
the value be declared.
    (4) Not prepay transportation charges on the order if such charges 
are expected to exceed $250. Ship collect and annotate the commercial 
bill of lading, ``To be converted to VA Commercial Bill of Lading.'' 
Contact the VA Traffic Manager for routing instructions and freight 
estimate.
    (c) Each contracting officer is responsible for:
    (1) Obtaining the most accurate estimate possible of transportation 
charges.
    (2) Using the authority in paragraph (a) of this section only when 
consistent with the circumstances in that paragraph.

[[Page 246]]

    (d) When, in accordance with FAR Subpart 28.3 and FAR 47.102, a 
shipment must be insured or the value declared, the contracting officer 
will specifically instruct the vendor to do so on the order when a 
written order is used. If the order is oral, the vendor must annotate 
all copies of the purchase request to show that the insurance/declared 
value was specifically requested.



Sec. 847.305  Solicitation provisions, contract clauses, and 
          transportation factors.



Sec. 847.305-70  Potential destinations known but quantities unknown.

    When the VA National Acquisition Center contracts with multiple 
bidders to provide items directly to VA field installations on an f.o.b. 
origin basis, the evaluation of bids must follow specific procedures. To 
place each bid on an equal basis, even though specific quantities 
required by each facility cannot be predetermined, the contracting 
officer must use an anticipated demand factor in proportion to the 
number of hospital beds or patient workload. The clause prescribed in 
852.247-70 must be used in these instances.



Sec. 847.306  Transportation factors in the evaluation of offers.



Sec. 847.306-70  Transportation payment and audit.

    Transportation payments are audited by the Traffic Manager to ensure 
that payment and payment mechanisms for agency transportation are 
uniform and appropriate in accordance with 41 CFR part 102-118.

                    PART 849_TERMINATION OF CONTRACTS

                    Subpart 849.1_General Principles

Sec.

Sec. 849.101 Authorities and responsibilities.

Sec. 849.106 Fraud or other criminal conduct.

Sec. 849.111 Review of proposed settlements.

Sec. 849.111-70 Required review.

Sec. 849.111-71 Submission of information.

    Authority: 40 U.S.C. 121(c) and 48 CFR 1.301-1.304.

    Source: 73 FR 2717, Jan. 15, 2008, unless otherwise noted.

                    Subpart 849.1_General Principles



Sec. 849.101  Authorities and responsibilities.

    (a) While legal review and concurrence of the General Counsel is 
required prior to a default termination, in some cases where a quick 
response is necessary, this review can be expedited by express mailing 
or faxing the default letter and related documents which are required to 
make an evaluation directly to General Counsel (025). The default 
termination letter should contain, at a minimum, the following:
    (1) The proposed termination (FAR 49.102);
    (2) An explanation of what necessitated the default, including the 
reasons why the contracting officer considers the contractor to be in 
default;
    (3) A statement that the factors set forth in FAR 49.402-3(f) have 
been fully considered; and
    (4) Final decision language and appeal rights.
    (b) Contracts containing a mutual termination clause may be 
terminated without reference to the General Counsel.



Sec. 849.106  Fraud or other criminal conduct.

    (a) If the contracting officer suspects fraud or other criminal 
conduct related to the settlement of a terminated contract, the 
contracting officer must do the following:
    (1) Immediately discontinue all negotiations.
    (2) Submit all of the pertinent facts necessary to support the 
suspicions to either of the following:
    (i) The DSPE.
    (ii) The Director, Office of Construction and Facilities Management, 
in the case of contracting officers from the Office of Construction and 
Facilities Management.
    (3) Follow procedures as provided in 809.406-3 and 809.407-3.
    (b) The DSPE or the Director, Office of Construction and Facilities 
Management, must review the submission and fully develop the facts.

[[Page 247]]

    (c) If the evidence indicates fraud or other criminal conduct, the 
DSPE or the Director, Office of Construction and Facilities Management, 
must forward the submission with recommendations through channels (to 
include OGC, if appropriate), to the Office of the Inspector General 
(OIG) for referral to the Department of Justice.
    (d) The DSPE or the Director, Office of Construction and Facilities 
Management, will advise the contracting officer as to any further action 
to be taken. Pending receipt of this advice, no VA employee may discuss 
the matter with the contractor.
    (e) VA will not initiate a collection, recovery or other settlement 
action while the matter is in the hands of the Department of Justice 
without first obtaining the concurrence of the U.S. Attorney concerned, 
through OIG.
    (f) If the contractor makes an inquiry, the contracting officer will 
advise only that the proposal has been forwarded to higher authority.



Sec. 849.111  Review of proposed settlements.



Sec. 849.111-70  Required review.

    (a) FAR 49.111 requires each agency to establish procedures, when 
necessary, for the administrative review of proposed termination 
settlements. Contracting officers shall submit proposed termination 
settlements or determinations of amounts due the contractor under a 
terminated contract that involve the expenditure of $100,000 or more of 
Government funds to the Director, Acquisition Program Management 
Division, or the Director, Acquisition Assistance Team, as appropriate, 
for technical and legal review (see 801.602-72(i)). Contracting officers 
shall not execute the settlement agreement or determination prior to 
receipt of the technical and legal review. The legal review of contracts 
awarded by or on behalf of the VA OIG will be conducted by the Counselor 
to the Inspector General.
    (b) If the contracting officer declines to implement one or more of 
the recommendations or comments contained in the review memorandum, the 
contracting officer shall submit a written response to the Director, 
Acquisition Program Management Division, or the Director, Acquisition 
Assistance Team, as appropriate, explaining why the recommendations or 
comments were not followed. For contracts awarded by or on behalf of the 
VA OIG, the response shall be submitted to the Counselor to the 
Inspector General.



Sec. 849.111-71  Submission of information.

    (a) The contracting officer shall submit to the appropriate 
Acquisition Program Management Division or Acquisition Assistance Team 
office a copy of the proposed settlement agreement or determination, 
supported by such detailed information as is required for an adequate 
review. This information should normally include copies of:
    (1) The contractor's or subcontractor's settlement proposal.
    (2) The audit report.
    (3) The property disposed report and any required approvals in 
connection therewith,
    (4) The contracting officer's memorandum explaining the settlement, 
and
    (5) Any other relevant material that will assist the procurement 
analyst in the review. The procurement analyst may, at his or her 
discretion, require the submission of additional information.
    (b) The Director, Acquisition Program Management Division, or the 
Director, Acquisition Assistance Team, will obtain the concurrence or 
comments of OGC prior to forwarding the review to the contracting 
officer, except that the concurrence or comments will be obtained from 
the Counselor to the Inspector General for contracts awarded by or on 
behalf of the VA Office of Inspector General.

[[Page 248]]

                     SUBCHAPTER H_CLAUSES AND FORMS

          PART 852_SOLICITATION PROVISIONS AND CONTRACT CLAUSES

       Subpart 852.1_Instructions for Using Provisions and Clauses

Sec.

Sec. 852.101 Using part 852.

Sec. 852.102 Incorporating provisions and clauses.

              Subpart 852.2_Text of Provisions and Clauses


Sec. 852.203-70 Commercial advertising.

Sec. 852.203-71 Display of Department of Veterans Affairs hotline 
          poster.

Sec. 852.207-70 Report of employment under commercial activities.

Sec. 852.209-70 Organizational conflicts of interest.

Sec. 852.211-70 Service data manuals.

Sec. 852.211-71 Special notice.

Sec. 852.211-72 Technical industry standards.

Sec. 852.211-73 Brand name or equal.

Sec. 852.211-74 Liquidated damages.

Sec. 852.211-75 Product specifications.

Sec. 852.214-70 Caution to bidders--bid envelopes.

Sec. 852.214-71 Restrictions on alternate item(s).

Sec. 852.214-72 Alternate item(s).

Sec. 852.214-73 Alternate packaging and packing.

Sec. 852.214-74 Bid samples.

Sec. 852.215-70 Service-disabled veteran-owned and veteran-owned small 
          business evaluation factors.

Sec. 852.215-71 Evaluation factor commitments.

Sec. 852.216-70 Estimated quantities.

Sec. 852.219-9 VA Small business subcontracting plan minimum 
          requirements.

Sec. 852.219-10 VA Notice of total service-disabled veteran-owned small 
          business set-aside.

Sec. 852.219-11 VA notice of total veteran-owned small business set-
          aside.

Sec. 852.219-71 VA mentor-prot[eacute]g[eacute] program.

Sec. 852.219-72 Evaluation factor for participation in the VA mentor-
          prot[eacute]g[eacute] program.

Sec. 852.222-70 Contract Work Hours and Safety Standards Act--nursing 
          home care contract supplement.

Sec. 852.228-70 Bond premium adjustment.

Sec. 852.228-71 Indemnification and insurance.

Sec. 852.228-72 Assisting service-disabled veteran-owned and veteran-
          owned small businesses in obtaining bonds.

Sec. 852.229-70 Sales or use taxes.

Sec. 852.229-71 [Reserved]

Sec. 852.233-70 Protest content/alternative dispute resolution.

Sec. 852.233-71 Alternate protest procedure.

Sec. 852.236-70 [Reserved]

Sec. 852.236-71 Specifications and drawings for construction.

Sec. 852.236-72 Performance of work by the contractor.

Sec. 852.236-73 [Reserved]

Sec. 852.236-74 Inspection of construction.

Sec. 852.236-75 [Reserved]

Sec. 852.236-76 Correspondence.

Sec. 852.236-77 Reference to ``standards.''

Sec. 852.236-78 Government supervision.

Sec. 852.236-79 Daily report of workers and material.

Sec. 852.236-80 Subcontracts and work coordination.

Sec. 852.236-81 [Reserved]

Sec. 852.236-82 Payments under fixed-price construction contracts 
          (without NAS).

Sec. 852.236-83 Payments under fixed-price construction contracts 
          (including NAS).

Sec. 852.236-84 Schedule of work progress.

Sec. 852.236-85 Supplementary labor standards provisions.

Sec. 852.236-86 Worker's compensation.

Sec. 852.236-87 Accident prevention.

Sec. 852.236-88 Contract changes--supplement.

Sec. 852.236-89 Buy American Act.

Sec. 852.236-90 Restriction on submission and use of equal products.

Sec. 852.236-91 Special notes.

Sec. 852.237-7 Indemnification and medical liability insurance.

Sec. 852.237-70 Contractor responsibilities.

Sec. 852.246-70 Guarantee.

Sec. 852.246-71 Inspection.

Sec. 852.246-72 Frozen processed foods.

Sec. 852.246-73 Noncompliance with packaging, packing and/or marking 
          requirements.

Sec. 852.246-74 Special warranties.

Sec. 852.246-75 Warranties for construction--guarantee period services.

Sec. 852.247-70 Determining transportation costs for bid evaluation.

Sec. 852.252-70 Solicitation provisions or clauses incorporated by 
          reference.

Sec. 852.270-1 Representatives of contracting officers.

Sec. 852.270-2 Bread and bakery products--quantities.

Sec. 852.270-3 Purchase of shellfish.

Sec. 852.271-70 Nondiscrimination in services provided to beneficiaries.

Sec. 852.271-71 [Reserved]

Sec. 852.271-72 Time spent by counselee in counseling process.

Sec. 852.271-73 Use and publication of counseling results.

Sec. 852.271-74 Inspection.

Sec. 852.271-75 Extension of contract period.

Sec. 852.273-70 Late offers.

Sec. 852.273-71 Alternative negotiation techniques.

Sec. 852.273-72 Alternative evaluation.

[[Page 249]]


Sec. 852.273-73 Evaluation--health-care resources.

Sec. 852.273-74 Award without exchanges.

    Authority: 38 U.S.C. 501, 8127, 8128, and 8151-8153; 40 U.S.C. 
121(c); and 48 CFR 1.301-1.304.

    Source: 73 FR 2717, Jan. 15, 2008, unless otherwise noted.

       Subpart 852.1_Instructions for Using Provisions and Clauses



Sec. 852.101  Using part 852.

    Part 852 prescribes supplemental provisions and clauses to the FAR. 
Provision and clause numbering are as prescribed in FAR 52.101 (e.g., 
supplementary construction clauses under part 836 are numbered 852.236-
71, 852.236-72, etc.).



Sec. 852.102  Incorporating provisions and clauses.

    (a) As authorized by FAR 52.102(c), any 48 CFR chapter 8 (VAAR) 
provision or clause may be incorporated in a quotation, solicitation, or 
contract by reference, provided the contracting officer complies with 
the requirements stated in FAR 52.102(c)(1), (c)(2), and (c)(3). To 
ensure compliance with FAR 52.102(c)(1) and (c)(2), contracting officers 
shall insert the provision found at 852.252-70, Solicitation provisions 
or clauses incorporated by reference, in full text in a quotation, 
solicitation, or contract if the quotation, solicitation, or contract 
incorporates by reference a FAR or 48 CFR chapter 8 (VAAR) provision or 
clause that requires completion by the offeror or prospective contractor 
and submittal with the quotation or offer.
    (b) For any FAR or 48 CFR Capter 8 (VAAR) provision or clause that 
requires completion by the contracting officer, the contracting officer 
shall, as a minimum, insert the title of the provision or clause and the 
paragraph that requires completion in full text in the quotation, 
solicitation, or contract. The balance of the provision or clause may be 
incorporated by reference.
    (c) When one or more FAR or 48 CFR chapter 8 (VAAR) provisions, or 
portions thereof, are incorporated in a quotation or solicitation by 
reference, the contracting officer shall insert in the quotation or 
solicitation the provision found at FAR 52.252-1, Solicitation 
Provisions Incorporated by Reference.
    (d) When one or more FAR or 48 CFR chapter 8 (VAAR) clauses, or 
portions thereof, are incorporated in a quotation, solicitation, or 
contract by reference, the contracting officer shall insert in the 
quotation, solicitation, or contract the clause found at FAR 52.252-2, 
Clauses Incorporated by Reference.
    (e) If one or more FAR provisions or clauses, or portions thereof, 
are incorporated in a quotation, solicitation, or contract by reference, 
the contracting officer shall insert in the FAR provision or clause 
required by paragraph (c) or (d) of this section the following Internet 
address: http://www.acquisition.gov/comp/far/index.html.
    (f) If one or more 48 CFR chapter 8 (VAAR) provisions or clauses, or 
portions thereof, are incorporated in a quotation, solicitation, or 
contract by reference, the contracting officer shall insert in the FAR 
provision or clause required by paragraph (c) or (d) of this section the 
following Internet address: http://www1.va.gov/oamm/acquisitions/ars/
policyreg/vaar/index.htm.

              Subpart 852.2_Texts of Provisions and Clauses



Sec. 852.203-70  Commercial advertising.

    As prescribed in 803.570-2, insert the following clause:

                    Commercial Advertising (JAN 2008)

    The bidder or offeror agrees that if a contract is awarded to him/
her, as a result of this solicitation, he/she will not advertise the 
award of the contract in his/her commercial advertising in such a manner 
as to state or imply that the Department of Veterans Affairs endorses a 
product, project or commercial line of endeavor.

                             (End of clause)



Sec. 852.203-71  Display of Department of Veterans Affairs hotline 
          poster.

    As prescribed in 803.7001, insert the following clause:

[[Page 250]]

   Display of Department of Veterans Affairs Hotline Poster (DEC 1992)

    (a) Except as provided in paragraph (c) below, the Contractor shall 
display prominently, in common work areas within business segments 
performing work under VA contracts, Department of Veterans Affairs 
Hotline posters prepared by the VA Office of Inspector General.
    (b) Department of Veterans Affairs Hotline posters may be obtained 
from the VA Office of Inspector General (53E), P.O. Box 34647, 
Washington, DC 20043-4647.
    (c) The Contractor need not comply with paragraph (a) above if the 
Contractor has established a mechanism, such as a hotline, by which 
employees may report suspected instances of improper conduct, and 
instructions that encourage employees to make such reports.

                             (End of clause)



Sec. 852.207-70  Report of employment under commercial activities.

    As prescribed in 807.304-77 and 873.110, the following clause will 
be included in A-76 cost comparison solicitations and solicitations 
issued under the authority of 38 U.S.C. 8151-8153 that may result in 
conversion from in-house to contract performance of work:

       Report of Employment Under Commercial Activities (JAN 2008)

    (a) Consistent with the Government post-employment conflict of 
interest regulations, the contractor shall give adversely affected 
Federal personnel the right of first refusal for all employment openings 
under this contract for which they are qualified.
    (b) Definitions. (1) Adversely affected Federal personnel means:
    (i) Permanent Federal personnel who are assigned to the government 
commercial activity, or
    (ii) Federal personnel who are identified for release from their 
competitive levels or separated as a result of the contract.
    (2) Employment openings means position vacancies created by this 
contract that the contractor is unable to fill with personnel in the 
contractor's employ at the time of the contract award. The term includes 
positions within a 50-mile radius of the commercial activity that 
indirectly arise in the contractor's organization as a result of the 
contractor's reassignment of employees due to the award of this 
contract.
    (3) Contract start date means the first day of contractor 
performance.
    (c) Filling employment openings. (1) For a period beginning with 
contract award and ending 90 calendar days after the contract start 
date, no person other than adversely affected Federal personnel on the 
current listing provided by the contracting officer shall be offered an 
employment opening until all adversely affected and qualified Federal 
personnel identified by the contracting officer have been offered the 
job and refused it.
    (2) The contractor may select any person for an employment opening 
when there are no qualified adversely affected Federal personnel on the 
latest current listing provided by the contracting officer.
    (d) Contracting reporting requirements. (1) No later than 5 working 
days after contract award, the contractor shall furnish the contracting 
officer with the following:
    (i) A list of employment openings including salaries and benefits, 
and
    (ii) Sufficient job application forms for adversely affected Federal 
personnel.
    (2) By the contract start date, the contractor shall provide the 
contracting officer with the following:
    (i) The names of adversely affected Federal personnel offered an 
employment opening;
    (ii) The date the offer was made;
    (iii) A brief description of the position;
    (iv) The date of acceptance of the offer and the effective date of 
employment;
    (v) The date of rejection of the offer, if applicable, and the 
salary and benefits contained in the rejected offer; and
    (vi) The names of any adversely affected Federal personnel who 
applied but were not offered employment and the reason(s) for 
withholding an offer.
    (3) For the first 90 calendar days after the contract start date, 
the contractor shall provide the contracting officer with the names of 
all persons hired or terminated under the contract within 5 working days 
of such hiring or termination.
    (e) Information provided to the contractor. (1) No later than 10 
calendar days after the contract award, the contracting officer shall 
furnish the contractor a current list of adversely affected Federal 
personnel exercising the right of first refusal, along with their 
completed job application forms.
    (2) Between the contract award and start dates, the contracting 
officer shall inform the contractor of any reassignment or transfer of 
adversely affected Federal personnel to other Federal positions.
    (3) For a period of up to 90 calendar days after the contract start 
date, the contracting officer will periodically provide the contractor 
with an updated listing of adversely affected Federal personnel 
reflecting personnel who were recently released from their competitive 
levels or separated as a result of the contract award.
    (f) Qualifications determination. The contractor has a right under 
this clause to determine adequacy of the qualifications of adversely 
affected Federal personnel for any employment openings. However, 
adversely affected Federal personnel who held jobs in

[[Page 251]]

the Government commercial activity that directly correspond to an 
employment opening shall be considered qualified for the job. Questions 
concerning the qualifications of adversely affected Federal personnel 
for specific employment openings shall be referred to the contracting 
officer for determination. The contracting officer's determination shall 
be final and binding on all parties.
    (g) Relating to other statutes, regulations and employment policies. 
The requirements of this clause shall not modify or alter the 
contractor's responsibilities under statutes, regulations or other 
contract clauses pertaining to the hiring of veterans, minorities, or 
persons with disabilities.
    (h) Penalty for noncompliance. Failure of the contractor to comply 
with any provision of the clause may be grounds for termination for 
default.

                             (End of clause)



Sec. 852.209-70  Organizational conflicts of interest.

    As prescribed in 809.507-1(b), insert the following provision:

             Organizational Conflicts of Interest (JAN 2008)

    (a) It is in the best interest of the Government to avoid situations 
which might create an organizational conflict of interest or where the 
offeror's performance of work under the contract may provide the 
contractor with an unfair competitive advantage. The term 
``organizational conflict of interest'' means that because of other 
activities or relationships with other persons, a person is unable to 
render impartial assistance or advice to the Government, or the person's 
objectivity in performing the contract work is or might be otherwise 
impaired, or the person has an unfair competitive advantage.
    (b) The offeror shall provide a statement with its offer which 
describes, in a concise manner, all relevant facts concerning any past, 
present, or currently planned interest (financial, contractual, 
organizational, or otherwise) or actual or potential organizational 
conflicts of interest relating to the services to be provided under this 
solicitation. The offeror shall also provide statements with its offer 
containing the same information for any consultants and subcontractors 
identified in its proposal and which will provide services under the 
solicitation. The offeror may also provide relevant facts that show how 
its organizational and/or management system or other actions would avoid 
or mitigate any actual or potential organizational conflicts of 
interest.
    (c) Based on this information and any other information solicited or 
obtained by the contracting officer, the contracting officer may 
determine that an organizational conflict of interest exists which would 
warrant disqualifying the contractor for award of the contract unless 
the organizational conflict of interest can be mitigated to the 
contracting officer's satisfaction by negotiating terms and conditions 
of the contract to that effect. If the conflict of interest cannot be 
mitigated and if the contracting officer finds that it is in the best 
interest of the United States to award the contract, the contracting 
officer shall request a waiver in accordance with FAR 9.503 and 48 CFR 
809.503.
    (d) Nondisclosure or misrepresentation of actual or potential 
organizational conflicts of interest at the time of the offer, or 
arising as a result of a modification to the contract, may result in the 
termination of the contract at no expense to the Government.

                           (End of provision)



Sec. 852.211-70  Service data manuals.

    (a) As prescribed in 811.107(a), insert the following clause:

                     Service Data Manuals (NOV 1984)

    (a) The successful bidder will supply operation/maintenance (service 
data) manuals with each piece of equipment in the quantity specified in 
the solicitation and resulting purchase order. As a minimum, the 
manual(s) shall be bound and equivalent to the manual(s) provided the 
manufacturer's designated field service representative as well as comply 
with all the requirements in paragraphs (b) through (i) of this clause. 
Sections, headings and section sequence identified in (b) through (i) of 
this clause are typical and may vary between manufacturers. Variances in 
the sections, headings and section sequence, however, do not relieve the 
manufacturer of his/her responsibility in supplying the technical data 
called for therein.
    (b) Title page and front matter. The title page shall include the 
equipment nomenclature, model number, effective date of the manual and 
the manufacturer's name and address. If the manual applies to a 
particular version of the equipment only, the title page shall also list 
that equipment's serial number. Front matter shall consist of the Table 
of Contents, List of Tables, List of Illustrations and a frontispiece 
(photograph or line drawing) depicting the equipment.
    (c) Section I, General Description. This section shall provide a 
generalized description of the equipment or devices and shall describe 
its purpose or intended use. Included in this section will be a table 
listing all pertinent equipment specifications, power requirements, 
environmental limitations and physical dimensions.

[[Page 252]]

    (d) Section II, Installation. Section II shall provide pertinent 
installation information. It shall list all input and output connectors 
using applicable reference designators and functional names as they 
appear on the equipment. Included in this listing will be a brief 
description of the function of each connector along with the connector 
type. Instructions shall be provided as to the recommended method of 
repacking the equipment for shipment (packing material, labeling, etc.).
    (e) Section III, Operation. Section III will fully describe the 
operation of the equipment and shall include a listing of each control 
with a brief description of its function and step-by-step procedures for 
each operating mode. Procedures will use the control(s) nomenclature as 
it appears on the equipment and will be keyed to one or more 
illustrations of the equipment. Operating procedures will include any 
preoperational checks, calibration adjustments and operation tests. 
Notes, cautions and warnings shall be set off from the text body so they 
may easily be recognizable and will draw the attention of the reader. 
Illustrations should b