Although the text of Manuals and Supplements to the Defense FAR Supplement are not published in the Code of Federal Regulations, they were listed for the convenience of the
41 U.S.C. 421 and 48 CFR chapter 1.
The FAR and the Defense Federal Acquisition Regulation Supplement (DFARS) also apply to purchases and contracts by DoD contracting activities made in support of foreign military sales or North Atlantic Treaty Organization cooperative projects without regard to the nature or sources of funds obligated, unless otherwise specified in this regulation.
The DFARS is available electronically via the World Wide Web at http://www.acq.osd.mil/dp/dars/dfars.html.
In accordance with Section 29 of the Office of Federal Procurement Policy Act (41 U.S.C. 425), a new requirement for a certification by a contractor or offeror may not be included in the DFARS unless—
(1) The certification requirement is specifically imposed by statute; or
(2) Written justification for such certification is provided to the Secretary of Defense by the Under Secretary of Defense (Acquisition and Technology), and the Secretary of Defense approves in writing the inclusion of such certification requirement.
(c) The composition and operation of the DAR Council is prescribed in DoDI 5000.63, Defense Acquisition Regulations (DAR) System.
(d)(i) Departments and agencies process proposed revisions of FAR or DFARS through channels to the Director of the DAR Council. Process the proposed revision as a memorandum in the following format, addressed to the Director, DAR Council, OUSD(A&T), 3062 Defense Pentagon, Washington, DC 20301-3062; datafax (703) 602-0350:
I. PROBLEM: Succinctly state the problem created by current FAR and/or DFARS coverage and describe the factual and/or legal reasons necessitating the change to the regulation.
II. Recommendation: Identify the FAR and/or DFARS citations to be revised. Attach as TAB A a copy of the text of the existing coverage, conformed to include the proposed additions and deletions. Indicate deleted coverage with dashed lines through the current words being deleted and insert proposed language in brackets at the appropriate locations within the existing coverage. If the proposed deleted portion is extensive, it may be outlined by lines forming a box with diagonal lines drawn connecting the corners.
III. Discussion: Include a complete, convincing explanation of why the change is necessary and how the recommended revision will solve the problem. Address advantages and disadvantages of the proposed revision, as well as any cost or administrative impact on Government activities and contractors. Identify any potential impact of the change on automated systems, e.g., automated financial and procurement systems. Provide any other background information that would be helpful in explaining the issue.
IV. Collaterals: Address the need for public comment (FAR 1.301(b) and subpart 1.5), the Paperwork Reduction Act, and the Regulatory Flexibility Act (FAR 1.301(c)).
V. Deviations: If a recommended revision of DFARS is a FAR deviation, identify the deviation and include under separate TAB a justification for the deviation, which addresses the requirements of 201.402(3). The justification should be in the form of a memorandum for the USD(A&T)DP.
(ii) The public may offer proposed revisions of FAR or DFARS by submission of a memorandum, in the format (including all of the information) prescribed in paragraph (d)(i) of this subsection, to the Director of the DAR Council.
(a) DoD implementation and supplementation of the FAR is issued in the Defense Federal Acquisition Regulation Supplement (DFARS) under authorization and subject to the authority, direction, and control of the Secretary of Defense.
(b) When
(a)(i) The DFARS is codified under chapter 2 in title 48, Code of Federal Regulations.
(ii) To the extent possible, all DFARS text (whether implemental or supplemental) is numbered as if it were implemental. Supplemental numbering is used only when the text cannot be integrated intelligibly with its FAR counterpart.
(A) Implemental numbering is the same as its FAR counterpart, except when the text exceeds one paragraph, the subdivisions are numbered by skipping a unit in the FAR 1.105-2(b)(2) prescribed numbering sequence. For example, three paragraphs implementing FAR 19.501 would be numbered 219.501 (1), (2), and (3) rather than (a), (b), and (c). Three paragraphs implementing FAR 19.501(a) would be numbered 219.501(a) (i), (ii), and (iii) rather than (a) (1), (2), and (3). Further subdivision of the paragraphs follows the prescribed numbering sequence, e.g., 219.501(1)(i)(A)(
(B) Supplemental numbering is the same as its FAR counterpart, with the addition of a number of 70 and up or (S-70) and up. Parts, subparts, sections, or subsections are supplemented by the addition of a number of 70 and up. Lower divisions are supplemented by the addition of a number of (S-70) and up. When text exceeds one paragraph, the subdivisions are numbered using the FAR 1.105-2(b)(2) prescribed sequence, without skipping a unit. For example, DFARS text supplementing FAR 19.501 would be numbered 219.501-70. Its subdivisions would be numbered 219.501-70 (a), (b), and (c).
(C) Subdivision numbering below the 4th level does not repeat the numbering sequence. It uses italicized Arabic numbers and then italicized lower case Roman numerals.
(D) An example of DFARS numbering is in Table 1-1, DFARS Numbering.
(iii) Department/agency and component supplements must parallel the
Departments and agencies and their component organizations may issue acquisition regulations as necessary to implement or supplement the FAR or DFARS.
(1)(i) Approval of the Under Secretary of Defense (Acquisition and Technology) (USD(A&T)) is required before including in a department/agency or component supplement, or any other contracting regulation document such as a policy letter or clause book, any policy, procedure, clause, or form that—
(A) Has a significant effect beyond the internal operating procedures of the agency; or
(B) Has a significant cost or administrative impact on contractors or offerors.
(ii) Except as provided in paragraph (2) of this section, the USD(A&T) has delegated authority to the Director of Defense Procurement (USD(A&T)DP) to approve or disapprove the policies, procedures, clauses, and forms subject to paragraph (1)(i) of this section.
(2) In accordance with Section 29 of the Office of Federal Procurement Policy Act (41 U.S.C. 425), a new requirement for a certification by a contractor or offeror may not be included in a department/agency or component procurement regulation unless—
(i) The certification requirement is specifically imposed by statute; or
(ii) Written justification for such certification is provided to the Secretary of Defense by USD(A&T), and the Secretary of Defense approves in writing the inclusion of such certification requirement.
(3) Approval of USD(A&T)DP is required for any class deviation (as defined in FAR Subpart 1.4) from the FAR or DFARS, before its inclusion in a department/agency or component supplement or any other contracting regulation document such as a policy letter or clause book.
(4) Each department and agency shall develop and, upon approval by USD(A&T)DP, implement, maintain, and comply with a plan for controlling the use of clauses other than those prescribed by FAR or DFARS.
(5) Departments and agencies shall submit request for the Secretary of Defense, USD(A&T), and USD(A&T)DP approvals required by this section through the Director of the DAR Council.
(6) The Director of Defense Procurement publishes changes to the DFARS in the
(1) The Director of Defense Procurement, Office of the Under Secretary of Defense (Acquisition and Technology), USD(A&T)DP, is the approval authority within DoD for—
(i) Any individual deviation from—
(A) FAR 3.104, Procurement Integrity, or DFARS 203.104, Procurement Integrity;
(B) FAR Subpart 27.4, Rights in Data and Copyrights, or DFARS Subpart 227.4, Rights in Data and Copyrights;
(C) FAR Part 30, Cost Accounting Standards Administration, or DFARS Part 230, Cost Accounting Standards Administration;
(D) FAR Subpart 31.1, Applicability, or DFARS Subpart 231.1, Applicability (contract cost principles);
(E) FAR Subpart 31.2, Contracts with Commercial Organizations, or DFARS Subpart 231.2, Contracts with Commercial Organizations; or
(F) FAR Part 32, Contract Financing (except Subparts 32.7 and 32.8 and the payment clauses prescribed by Subpart 32.1), or DFARS Part 232, Contract Financing (except Subparts 232.7 and 232.8).
(ii) Any class deviation.
(2) Individual deviations.
(i) Except as provided in paragraph (2)(ii) of this section, individual deviations, other than those in paragraph (1)(i) of this section, must be approved in accordance with the department/agency plan prescribed by 201.304(4).
(ii) Contracting officers outside the United States are authorized to deviate from prescribed non-statutory FAR and DFARS clauses when contracting for support services, supplies, or construction, with the governments of North Atlantic Treaty Organization (NATO) countries or other allies (as described in 10 U.S.C. 2341(2)), or with United Nations or NATO organizations. This authority shall be exercised only if such governments or organizations will not agree to the standard clauses.
(3) Submit requests for deviation approval through department/agency channels to the approval authority in paragraph (1) or (2), as appropriate. Submit deviations which require USD(A&T)DP approval through the Director of the DAR Council. At a minimum, each request must—
(i) Identify the department/agency, and component if applicable, requesting the deviation;
(ii) Identify the FAR or DFARS citation from which a deviation is needed, state what is required by that citation, and indicate whether an individual or class deviation is requested;
(iii) Describe the deviation and indicate which of paragraphs (a) through (f) of FAR 1.401 best categorizes the deviation;
(iv) State whether the deviation will have a significant effect beyond the internal operating procedures of the agency and/or a significant cost or administrative impact on contractors or offerors, and give reasons to support the statement;
(v) State the period of time for which the deviation is required;
(vi) State whether approval for the same deviation has been received previously, and if so, when;
(vii) State whether the proposed deviation was published (see FAR subpart 1.5 for publication requirements) in the
(viii) State whether the request for deviation has been reviewed by legal counsel, and if so, state results; and
(ix) Give detailed rationale for the request. State what problem or situation will be avoided, corrected, or improved if request is approved.
See approval requirements in 201.402.
See approval requirements in 201.402.
Contracting officers may designate qualified personnel as their authorized representatives to assist in the technical monitoring or administration of a contract. A contracting officer's representative (COR)—
(1) Must be a Government employee, unless otherwise authorized in agency regulations.
(2) Must be qualified by training and experience commensurate with the responsibilities to be delegated in accordance with department/agency guidelines.
(3) May not be delegated responsibility to perform functions at a contractor's location that have been delegated under FAR 42.202(a) to a contract administration office.
(4) May not be delegated authority to make any commitments or changes that affect price, quality, quantity, delivery, or other terms and conditions of the contract.
(5) Must be designated in writing, and a copy furnished the contractor and the contract administration office,—
(i) Specifying the extent of the COR's authority to act on behalf of the contracting officer;
(ii) Identifying the limitations on the COR's authority;
(iii) Specifying the period covered by the designation;
(iv) Stating the authority is not redelegable; and
(v) Stating that the COR may be personally liable for unauthorized acts.
(6) Must maintain a file for each contract assigned. This file must include, as a minimum—
(i) A copy of the contracting officer's letter of designation and other documentation describing the COR's duties and responsibilities; and
(ii) Documentation of actions taken in accordance with the delegation of authority.
Use the clause at 252.201-7000, Contracting Officer's Representative, in solicitations and contracts when appointment of a contracting officer's representative is anticipated.
(1) Pursuant to 10 U.S.C. 1724, in order to qualify to serve as a contracting officer with authority to award or administer contracts for amounts above the simplified acquisition threshold, a person must—
(i) Have completed all mandatory contracting courses required for a contracting officer at the grade level, or in the position within the grade of the General Schedule in which the person is serving;
(ii) Have at least two years experience in a contracting position;
(iii) Have—
(A) Received a baccalaureate degree from an accredited educational institution;
(B) Completed at least 24 semester credit hours, or equivalent, of study from an accredited institution of higher education in any of the following disciplines: Accounting, business finance, law, contracts, purchasing, economics, industrial management, marketing, quantitative methods, and organization and management; or
(C) Passed an examination considered to demonstrate skills, knowledge, or abilities comparable to that of an individual who has completed at least 24 semester credit hours, or equivalent, of study from an accredited institution of higher education in any of the disciplines in paragraph (1)(iii)(B) of this subsection; and
(iv) Meet such additional requirements, based on the dollar value and complexity of the contracts awarded or administered in the position as may be established by the Secretary of Defense.
(2) The requirements in 201.603-2(1)(iii) do not apply to any employee who, as of October 1, 1991, had at least 10 years experience in acquisition positions, in comparable positions in other government agencies or the private sector, or in similar positions in which the individual obtained experience directly relevant to the field of contracting.
(3) The requirements in 201.603-2(1) do not apply to any employee for purposes of qualifying to serve in the position in which the employee is serving on October 1, 1993, or any other position in the same grade and involving the same level of responsibilities as the position in which the employee is serving on that date.
(4) Waivers may be authorized. Information on waivers is contained in DoD Manual 5000.52-M, Career Development Program for Acquisition Personnel.
Certificates of Appointment executed under the Armed Services Procurement Regulation or the Defense Acquisition Regulation have the same effect as if they had been issued under FAR.
41 U.S.C. 421 and 48 CFR chapter 1.
(1) The Committee on Armed Services of the Senate;
(2) The Subcommittee on Defense of the Committee on Appropriations of the Senate;
(3) The Committee on Armed Services of the House of Representatives; and
(4) The Subcommittee on Defense of the Committee on Appropriations of the House of Representatives.
Department of Defense (including the defense agencies)—Under Secretary of Defense (Acquisition & Technology);
Department of the Army—Assistant Secretary of the Army (Research, Development and Acquisition);
Department of the Navy—Assistant Secretary of the Navy (Research, Development and Acquisition);
Department of the Air Force—Assistant Secretary of the Air Force (Acquisition).
The directors of the defense agencies have been delegated authority to act as senior procurement executive for their respective agencies, except for such actions that by terms of statute, or any delegation, must be exercised by the Under Secretary of Defense (Acquisition & Technology).
41 U.S.C. 421 and 48 CFR chapter 1.
(b)(3) The contracting officer also shall report the matter in accordance with 209.406-3 and DoDD 7050.5, Coordination of Remedies for Fraud and Corruption Related to Procurement Activities.
(d)(4) For purposes of FAR 3.104-5(d)(4) only, DoD follows the notification procedures in FAR 27.404(h). However, the first sentence in FAR 27.404(h) does not apply to DoD.
Report suspected violations of the Gratuities clause in accordance with 209.406-3 and DoDD 7050.5, Coordination of Remedies for Fraud and Corruption Related to Procurement Activities.
(b) Report suspected antitrust violations in accordance with 209.406-3 and DoDD 7050.5, Coordination of Remedies for Fraud and Corruption Related to Procurement Activities.
(b) Report suspected fraud or other criminal conduct in accordance with 209.406-3 and DoDD 7050.5, Coordination of Remedies for Fraud and Corruption Related to Procurement Activities.
Report suspected violations of the Anti-Kickback Act in accordance with 209.406-3 and DoDD 7050.5, Coordination of Remedies for Fraud and Corruption Related to Procurement Activities.
(h) The DoD Inspector General has designated Special Agents of the following investigative organizations as representatives for conducting inspections and audits under the Anti-Kickback Act of 1986:
(i) U.S. Army Criminal Investigation Command.
(ii) Naval Criminal Investigative Service.
(iii) Air Force Office of Special Investigations.
(iv) Defense Criminal Investigative Service.
This subpart prescribes policies and procedures to implement 10 U.S.C. 2408.
(a) A contractor or subcontractor shall not knowingly allow a person, convicted after September 29, 1988, of fraud or any other felony arising out of a contract with the DoD, to serve—
(1) In a management or supervisory capacity on any DoD contract or first-tier subcontract;
(2) On its board of directors;
(3) As a consultant, agent, or representative; or
(4) In any capacity with the authority to influence, advise, or control the decisions of any DoD contractor or subcontractor with regard to any DoD contract or first-tier subcontract.
(b) DoD has sole responsibility for determining the period of the prohibition described in paragraph (a) of this subsection. The prohibition period—
(1) Shall not be less than 5 years from the date of conviction unless the agency head or a designee grants a waiver in the interest of national security; and
(2) May be more than 5 years from the date of conviction if the agency head or a designee makes a written determination of the need for the longer period. The agency shall provide a copy of the determination to the Bureau of Justice Assistance, U.S. Department of Justice, 810 Seventh Street, NW, Washington, DC 20531.
(a) The contracting officer shall—
(1) Review any request for waiver; and
(2) Deny the request if the contracting officer decides the waiver is not required in the interests of national security; or
(3) Forward the request to the head of the agency or designee for approval if the contracting officer decides the waiver may be in the interest of national security.
(b) The head of the agency or designee shall report all waivers granted, and the reasons for granting the waiver, to the Under Secretary of Defense (Acquisition), who will forward the report to Congress as required by 10 U.S.C. 2408(a)(3).
When a Defense contractor or first-tier subcontractor is found in violation of the prohibition in 203.570-2, the contracting officer shall report the matter in accordance with 209.406-3 and DoDD 7050.5, Coordination of Remedies for Fraud and Corruption Related to Procurement Activities.
Use the clause at 252.203-7001, Prohibition on Persons Convicted of Fraud or Other Defense-Contract-Related Felonies, in all solicitations and contracts exceeding the simplified acquisition threshold, except solicitations and contracts for commercial items.
The authority to act for the agency head under this subpart is limited to a level no lower than an official who is appointed by and with the advice of the Senate, without power of redelegation. For the defense agencies, for purposes of this subpart, the agency head designee is the Under Secretary of Defense (Acquisition & Technology).
Government contractors must conduct themselves with the highest degree of integrity and honesty. Contractors should have standards of conduct and internal control systems that—
(1) Are suitable to the size of the company and the extent of their involvement in Government contracting,
(2) Promote such standards,
(3) Facilitate timely discovery and disclosure of improper conduct in connection with Government contracts, and
(4) Ensure corrective measures are promptly instituted and carried out.
(a) A contractor's system of management controls should provide for—
(1) A written code of business ethics and conduct and an ethics training program for all employees;
(2) 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) 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;
(4) Internal and/or external audits, as appropriate;
(5) Disciplinary action for improper conduct;
(6) Timely reporting to appropriate Government officials of any suspected or possible violation of law in connection with Government contracts or any other irregularities in connection with such contracts; and
(7) Full cooperation with any Government agencies responsible for either investigation or corrective actions.
(b) Contractors who are awarded a DoD contract of $5 million or more must display DoD Hotline Posters prepared by the DoD Office of the Inspector General unless—
(1) The contract will be performed in a foreign country; or
(2) The contractor has established an internal reporting mechanism and program, as described in paragraph (a) of this section.
Use the clause at 252.203-7002, Display of DoD Hotline Poster, in solicitations and contracts expected to exceed $5 million, except when performance will take place in a foreign country.
41 U.S.C. 421 and 48 CFR chapter 1.
(a)(i) Include the contracting officer's telephone number and, when available, e-mail/Internet address on contracts and modifications.
(ii) The contracting officer may sign bilateral modifications of a letter contract before signature by the contractor.
(1) The procuring contracting officer (PCO) retains the original signed contract for the official contract file. Administrative contracting officers and termination contracting officers provide the original of each modification to the PCO for retention in the official contract file. Unless otherwise directed by department/agency procedures, the office issuing the orders maintains the original of orders under basic ordering agreements and the original of provisioning orders.
(2) Ensure that distribution of contracts and modifications is consistent with security directives.
(c) Distribute one copy to each Defense Finance and Accounting Service (DFAS) accounting station cited in the contract, in addition to the copy provided to each DFAS funding office.
(e)(i) Distribute one copy of each of the following types of contracts or modifications to the appropriate Defense Contract Audit Agency (DCAA) field audit office (listed in DCAAP 5100.1, Directory of DCAA Offices, available on the World Wide Web, Internet address http://www.deskbook.osd.mil, under reference library documents)—
(A) Cost reimbursement;
(B) Time-and-materials;
(C) Labor-hour;
(D) Fixed-price contracts with provisions for redetermination, cost incentives, economic price adjustment based on cost, or cost allowability; and
(E) Any other contract that requires audit service.
(ii) If there is a question as to the appropriate DCAA field audit office, request the assistance of the DCAA procurement liaison auditor or the nearest DCAA field audit office.
(f) Provide two copies to offices performing contract administration support functions.
(1) Distribute copies of contracts as follows—
(i) Four copies to the contract administration office (send simultaneously with the copy furnished under FAR 4.201(b));
(ii) One copy to each consignee indicated in the contract. A transshipping terminal is not a consignee.
(A) Inventory control points that have an automated uniform inventory control point data base that interfaces with consignees may use their automated procedure rather than sending a written copy of the contract. However, when inspection is required at destination, send a written copy to the consignee.
(B) The Defense Logistics Agency is authorized to prescribe alternate procedures for distribution of contract documents in Defense Supply Center Philadelphia European Region;
(iii) Two copies to the military interdepartmental purchase request requiring activity in the case of coordinated acquisition;
(iv) One copy to the contract administration office (CAO) automatic data processing point, except when the DoDAAD code is the same as that of either the CAO or payment office; and
(v) One copy, or an extract of the pertinent information, to the cognizant Defense Security Service office listed in DoD 5100.76-M, Physical Security of Sensitive Conventional Arms, Ammunition, and Explosives, when the clause at 252.223-7007, Safeguarding Sensitive Conventional Arms, Ammunition, and Explosives, is included in the contract.
(2) The activity executing a contract modification shall furnish a copy of the basic contract and all modifications to—
(i) The new and old payment office when adding or changing a payment office;
(ii) The new contract administration office, a new consignee or other activity, based on the extent to which each activity is concerned with the basic contract and modifications.
(3) Distribution of modifications issued to provide initial or amended shipping instructions under 204.7004(c)(3)(iii) and 204.7004(f) may be limited to the following—
(i) Contractor, one copy;
(ii) Receiving activity, one copy each;
(iii) Contract administration office, one copy;
(iv) Payment office, one copy; and
(v) Contract administration office automatic data processing point, one copy.
(4) Distribution of modifications generated by automated means (computer programs) may be limited to the following—
(i) Contractor, one copy;
(ii) Contract administration office, one copy;
(iii) New payment office, one copy;
(iv) Procuring contracting office, one copy;
(v) Funding activities, one copy to each; and
(vi) Consignee, one copy to each.
(1) The procedures at FAR 4.203(a) and (b) do not apply to contracts that include the clause at 252.204-7004, Required Central Contractor Registration.
(2) For a DoD basic ordering agreement or indefinite-delivery contract that requires the contractor to register in the Central Contractor Registration (CCR) database (see subpart 207.73)—
(i) The contracting officer issuing the agreement or contract need not provide a copy of the completed solicitation provision at FAR 52.204-3 or 52.212-3(b) to DoD contracting officers placing orders under the agreement or contract; and
(ii) A DoD contracting officer placing an order under the agreement or contract need not provide the TIN or type of organization information to the payment office.
(3) For a non-DoD basic ordering agreement or indefinite-delivery contract, a DoD contracting officer placing an order under the agreement or contract must use the procedures at
(i) If the contractor is registered, the contracting officer need not provide the TIN or type of organization information to the payment office.
(ii) If the contractor is not registered, the contracting officer must follow the procedures at 204.7303(b).
(1) Subpart 239.74 contains policy and procedures for securing telecommunications between Government agencies and contractors and subcontractors.
(2) Pursuant to section 808 of Pub. L. 102-190, DoD employees or members of the Armed Forces who are assigned to or visiting a contractor facility and are engaged in oversight of an acquisition program will retain control of their work product. Classified work products of DoD employees or members of the Armed Forces shall be handled in accordance with DoD 5220.22-M, National Industrial Security Program Operating Manual, and DoD 5220.22-R, Industrial Security Regulation. Contractor procedures for protecting against unauthorized disclosure of information shall not require DoD employees or members of the Armed Forces to relinquish control of their work products, whether classified or not, to a contractor.
(a) Use the clause at 252.204-7000, Disclosure of Information, in solicitations and contracts when the contractor will have access to or generate unclassified information that may be sensitive and inappropriate for release to the public.
(b) Use the clause at 252.204-7003, Control of Government Personnel Work Product, in all solicitations and contracts.
(c) Use the clause at 252.204-7005, Oral Attestation of Security Responsibilities, in solicitations and contracts that include the clause at FAR 52.204-2, Security Requirements.
The Defense Contract Action Data System (DCADS) (see 204.670) is the DoD reporting system which supports the uniform reporting requirements for—
(1) DD Form 350, Individual Contracting Action Report; and
(2) DD Form 1057, Monthly Summary of Actions $25,000 or Less.
(a) The DCADS meets these record retention requirements.
(d) The Directorate for Information, Operation, and Reports (DIOR), of the Washington Headquarters Services (WHS) transmits required DoD information to the Federal Procurement Data System.
(c) DoD uses the DD Form 350, Individual Contracting Action Report, in lieu of the SF 279, Federal Procurement Data System (FPDS) Individual Contract Action Report. DoD uses the DD Form 1057, Monthly Contracting Summary of Actions $25,000 or Less, in lieu of the SF 281, FPDS Summary Contract Action Report ($25,000 or Less).
(1) Use the provision at 252.204-7001, Commercial and Government Entity (CAGE) Code Reporting, in solicitations when—
(i) The solicitation does not include the clause at 252.204-7004, Required Central Contractor Registration; and
(ii) The CAGE codes for the potential offerors are not available to the contracting office.
(2) Use the provision at FAR 52.204-6, Data Universal Numbering System (DUNS) Number, in solicitations that—
(i) Have an estimated value exceeding $25,000; or
(ii) Have an estimated value of $25,000 or less and include the clause at 252.204-7004, Required Central Contractor Registration.
As used in this section and 253.204-70 and 253.204-71—
(a)
(b)
(1) Definitive contracts, including notices of award;
(2) Letter contracts;
(3) Purchase orders;
(4) Orders under existing contracts or agreements, e.g.—
(i) Orders against basic ordering agreements, including service orders issued on DD Form 1164 by installation transportation offices;
(ii) Calls against blanket purchase agreements;
(iii) Job orders;
(iv) Task orders;
(v) Delivery orders;
(vi) Communication services authorizations; and
(vii) Notices of termination or cancellation.
(5) Contract modifications, e.g.—
(i) Change orders;
(ii) Supplemental agreements;
(iii) Funding actions; and
(iv) Option exercises.
(c)
(1) For the Army (including Corps of Engineers civil Works): U.S. Army Contracting Support Agency, Attn: SFAE-CSA-PPS, 5109 Leesburg Pike, Suite 916, Falls Church, VA 22041-3201
(2) For the Navy: Fleet Industrial Supply Center, Norfolk Detachment Washington, Attn: PMRS, Washington Navy Yard, Bldg. 200, 4
(3) For the Air Force: SAF/AQCI, 1060 Air Force Pentagon, Washington, DC 20330-1060
(4) For the Defense Logistics Agency: Headquarters, Defense Logistics Agency, Attn: Procurement Management Directorate (Acquisition Programs Team), 8725 John J. Kingman Road, Suite 3147, Fort Belvoir, VA 22060-6221.
(5) For other DoD contracting activities: U.S. Army Contracting Support Agency, Attn: SFAE-CSA-PPS, 5109 Leesburg Pike, Suite 916, Falls Church, VA 22041-3201.
(d)
(1) American Samoa;
(2) The Federated States of Micronesia;
(3) Guam;
(4) The Marshall Islands;
(5) Northern Mariana Islands;
(6) The Trust Territory of Palau;
(7) Puerto Rico;
(8) The U.S. Minor Outlying Islands; and
(9) The U.S. Virgin Islands.
(a) Except as provided in paragraph (c) of this subsection, complete a DD Form 350 for the following types of contracting actions in accordance with the instructions in 253.204-70:
(1) Actions that obligate or deobligate more than $25,000, including actions executed by DoD for purchase of land, or rental or lease of real property, and excluding actions summarized on DD Form 1057 in accordance with paragraph (b)(2) of this subsection.
(2) Actions that obligate or deobligate $25,000 or less and are in designated industry group under the Small Business Competitiveness Demonstration Program (see FAR subpart 19.10) or are under a very small business set-aside (see FAR subpart 19.9), except for—
(i) Actions of $500 or less;
(ii) Foreign military sales;
(iii) Orders or modifications under Federal schedules;
(iv) Actions with government agencies;
(v) Actions with non-U.S. business firms; and
(vi) Actions where the place of performance is other than the United States and its outlying areas.
(b) Except as provided in paragraph (c) of this subsection, summarize the following types of contracting actions on the monthly DD Form 1057 in accordance with the instructions in 253.204-71:
(1) Actions that obligate or deobligate $25,000 or less, except actions reported on DD Form 350 in accordance with paragraph (a)(2) of this subsection.
(2) Actions that obligate or deobligate more than $25,000, but not more than $200,000, and support—
(i) A contingency operation as defined in 10 U.S.C. 101(a)(13); or
(ii) A humanitarian or peacekeeping operation as defined in 10 U.S.C. 2302(7).
(c) Do not report the following types of contracting action on either the DD Form 350 or DD Form 1057:
(1) Imprest fund transactions, SF 44 purchases, and micro-purchases obtained through use of the Government-wide commercial purchase card.
(2) Transactions that cite only nonappropriated funds (Treat funds held in trust accounts for foreign governments as appropriated funds).
(3) Transactions for purchase of land, or rental or lease of real property, when the General Services Administration (GSA) executes the contracting action.
(4) Orders from GSA stock and the GSA Consolidated Purchase Program.
(5) Transactions that involve Government bills of lading or transportation requests, except orders placed under Regional Storage Management Office basic ordering agreements.
(6) Requisitions transferring supplies within or among the departments or agencies.
(7) Pursuant to 204.670-6(b), orders placed by other contracting activities against indefinite-delivery contracts awarded by the—
(i) Military Sealift Command;
(ii) Defense Energy Support Center for petroleum and petroleum products; or
(iii) Defense Supply Center, Richmond, for petroleum products
(a) For DD Form 350, contracting offices—
(1) Prepare the appropriate type of DD Form 350 (see 204.670-6), in accordance with the instructions in 253.204-70, on all reportable contracting actions (see 204.670-2(a)), including actions accomplished by contract administration offices on behalf of the contracting office.
(2) Complete the DD Form 350 in the required format within three working days after the date on which the dollars were actually obligated or deobligated (see 204.670-7). Submit all contracting actions for the calendar month to the departmental data collection point (see 204.670-1(c)) in accordance with departmental/agency procedures, except—
(i) For Defense Energy Support Center major petroleum acquisitions that result in multiple awards, the due date is ten working days when permitted by the departmental data collection point;
(ii) For actions executed in the month of September, due dates may be extended ten calendar days when permitted by the departmental data collection point; and
(iii) For actions accomplished by a contract administration office, the due date is three working days after the receipt of the contractual instrument annotated “DD FORM 350 REPORTING COPY.”
(3) Prepare and submit a corrected or cancelling DD Form 350 as required in
(4) Establish a control system for assigning report numbers to DD Forms 350 (Block A2 of the DD Form 350). The number shall have four positions and may be any combination of alpha or numeric characters. If more than one activity within a contracting office utilizes the same reporting office code, the contracting office shall assign separate blocks of numbers to each activity in order to prevent duplication of report numbers.
(5) Maintain a copy of the DD Form 350 in the contract file, in accordance with departmental/agency procedures.
(b) For DD Form 1057, contracting offices—
(1) Prepare a DD Form 1057, in accordance with the instructions in 253.204-71, covering reportable contracting actions (see 204.670-2(b)), including actions accomplished by contract administration offices on behalf of the contracting office. An installation, base, or other activity may have more than one contracting office code to separate the various types of acquisitions, such as base and central contracting, or RDT&E and non-RDT&E acquisition. Each contracting office with a separate code must submit its own DD Form 1057.
(2) Complete the DD Form 1057 in the required format within three working days after the cutoff of the reporting month (see 204.670-7 for alternate formats). Contracting offices are authorized to cut off the reporting month no earlier than the 25th calendar day. For September only, the cutoff date shall not be later than September 30. Submit the DD Form 1057 to the departmental data collection point in accordance with departmental/agency procedures.
(3) Unless otherwise instructed by the departmental data collection point, do not submit revised DD Form 1057 reports. Include any required corrections or adjustments in following month's report.
Contract administration offices executing actions subject to DD Form 350 or DD Form 1057 reporting must submit an annotated copy of the contractual instrument to the contracting office so that the contracting office can submit the required report.
(a) For DD Form 350, annotate in the heading of the contractual instrument in large block letters “DD FORM 350 REPORTING COPY.” Send the annotated copy to the contracting office within one working day after the action date.
(b) For DD Form 1057, annotate in the heading of the contractual instrument in large block letters “DD FORM 1057 REPORTING COPY.” Send the annotated copy with the normal distribution.
Departmental data collection points—
(a) Collect DD Forms 350 and 1057 data provided by their contracting activities;
(b) Electronically record the data in accordance with the instructions for recording and editing developed by WHS-DIOR with the majority agreement of the departments/agencies and prescribed by the Director of Defense Procurement; and
(c) Submit monthly reports (noncumulative) to Washington Headquarters Services, ATTN: DIOR, within 18 days after the close of the reporting period, except the due date for September may be extended for no more than ten days. Reports control symbols, DD-P&L(M) 1014 and DD-P&L(M) 1015, respectively, apply to reports submitted to WHS-DIOR for DD Form 350 actions and DD Form 1057.
There are three types of reports—single, consolidated, and multiple.
(a) A single report is one DD Form 350 report per contracting action.
(b) A consolidated report is one DD Form 350 report which combines several contracting actions.
(1) Prepare consolidated reports for—
(i) Air Mobility Command awards for international airlift services. The Command reports these at the end of each operating month with one DD Form 350 for each airlift contract.
(ii) Military Sealift Command awards of indefinite-delivery contracts for ocean transportation. The Command reports at the beginning of each fiscal year the estimated value of the orders for that fiscal year on one DD Form 350.
(iii) Defense Energy Support Center or Defense Supply Center, Richmond, indefinite-delivery contracts for petroleum or petroleum supplies. The Centers, at the time of award, report the estimated value of the orders to be placed against the contract on one DD Form 350.
(iv) Orders placed by the Defense Commissary Agency (DeCA) for resale items in excess of $25,000. DeCA consolidates the orders monthly and reports the cumulative dollar amounts and actions on one DD Form 350 in accordance with departmental/agency procedures. Defense Logistics Agency activities submit single rather than consolidated reports.
(v) Vouchers processed by the U.S. Army Contracting Command, Europe (USACCE), for the purchase of utilities from municipalities (e.g., gas, electricity, water, sewage, steam, snow removal, and garbage collection). USACCE consolidates these transactions monthly and reports the cumulative dollar amount on one DD Form 350 in accordance with departmental/agency procedures.
(2) Consolidated reports may be prepared in accordance with departmental/agency procedures for orders under communications service agreements for local dial tone services.
(c) A multiple report is more than one DD Form 350 per contracting action. Prepare multiple reports if—
(1) The contracting action includes foreign military sales (FMS) requirements in addition to non-FMS requirements (Block B9 on the DD Form 350). Submit one DD Form 350 report for the FMS requirements and another DD Form 350 report for the non-FMS requirements, except if either of the portions in $25,000 or less, report the $25,000 or less portion on a DD Form 1057 in lieu of a DD Form 350.
(2) The contracting action includes more than one type of contract (Block C5 on the DD Form 350) and the type with the least dollar value exceeds $500,000. Prepare a separate DD Form 350 for each contract type.
Contracting offices submit the signed original DD Forms 350 and 1057, unless the data collection point approves use of an automated facsimile or electronic equivalent containing the information.
Submit DD Forms 350 as unclassified documents. Classified contracts are not exempt from reporting solely because the contract is classified. Contact the appropriate departmental data collection points for special instructions if it is necessary for security reasons to modify coding of all or any individual blocks on the DD Form 350. If contact cannot be made for security reasons, obtain instructions from the Office of the Deputy to the Under Secretary of Defense for Policy Support, ATTN: Director for Special Programs. Telephone number is (703) 614-0578/9 or DSN 224-0578/9.
Official contract files shall consist of—
(1) Only original, authenticated or conformed copies of contractual instruments—
(i)
(A) Certification as true copy by signature of an authorized person; or
(B) Official seal.
(ii)
(2) Signed or official record copies of correspondence, memoranda, and other documents.
Normally, the closeout date for contract files is the date in Block 9d on the DD Form 1594, Contract Completion Statement, or in columns 59-65 on the PK9. If the contracting office must do a major closeout action that will take longer than three months after the date shown in Block 9d of the DD Form 1594, or in columns 59-65 of the PK9—
(1) The closeout date for file purposes will be the date in Block 10e of the DD Form 1594 or the date of the closeout statement executed when the MILSCAP PK9 is received.
(2) The contracting office shall notify the contract administration office of the revised closeout date by either sending a copy of the completed DD Form 1594 or by preparing a MILSCAP Format Identifier PKZ, Contract Closeout Extension.
(1) For contracting offices administering their own contracts, locally developed forms or statement of completion may be used instead of the DD Form 1594, Contract Completion Statement. Whichever method is used, the form shall be retained in the official contract file.
(2) For contracts valued above the simplified acquisition threshold, prepare a DD Form 1597, Contract Closeout Check List, (or agency equivalent) to ensure that all required contract actions have been satisfactorily accomplished.
(1) When an office, other than the contracting office, administers the contract, it shall—
(i) Provide the contracting office an interim contract completion statement when the contract is physically completed and accepted. This notice may be in the form of either a DD Form 1594, Contract Completion Statement, or a MILSCAP Format Identifier Interim PK9, Contract Physical Completion. When the DD Form 1594 is used, the contracting officer—
(A) Annotates Block 8, Remarks, with—
(
(
(
(
(B) Does not complete Blocks 9 (b), (c), and (d) at this time;
(ii) Prepare a DD Form 1597, Contract Closeout Check List, if necessary, to determine that all the required actions have been done;
(iii) Initiate DD Form 1593, Contract Administration Completion Record, if necessary to obtain statements from other organizational elements that they have completed the actions they are responsible for; and
(iv) Upon final payment—
(A) Process the DD Form 1594 with Blocks 1 through 9 completed or the MILSCAP Format Identifier PK9 verifying that all contract administration office actions have been done; and
(B) Send the original of the DD Form 1594 or the MILSCAP Format Identifier PK9 to the contracting office, and file a copy in the official contract file.
(2) If the administrative contracting officer (ACO) cannot closeout a contract within the specified time period (see FAR 4.804-1), the ACO must notify the procuring contracting officer (PCO) within 45 days after the expiration of the time period of—
(i) The reasons for the delay; and
(ii) New target date for closeout. If MILSCAP procedures apply, the ACO shall use the MILSCAP Format Identifier PKX, Unclosed Contract Status, to provide this notice to the PCO.
(3) If the contract still is not closed out by the new target date, the ACO shall again notify the PCO with the reasons for delay and new target date. If MILSCAP procedures apply, continue to use the MILSCAP Format
(1) The sources of the period for which official contract files must be retained are General Records Schedule 3 (Procurement, Supply, and Grant Records) and General Records Schedule 6 (Accountable Officers’ Accounts Records). Copies of the General Records Schedule may be obtained from the National Archives and Records Administration, Washington, DC 20408.
(2) Deviations from the periods cannot be granted by the Defense Acquisition Regulatory Council. Forward requests for deviations to both the General Accounting Office and the National Archives and Records Administration.
(3) Hold completed contract files in the office responsible for maintaining them for a period of 12 months after completion. After the initial 12 month period, send the records to the local records holding or staging area until they are eligible for destruction. If no space is available locally, transfer the files to the General Services Administration Federal Records Center that services the area.
(4) Duplicate or working contract files should contain no originals of materials that properly belong in the official files. Destroy working files as soon as practicable once they are no longer needed.
(5) Retain pricing review files, containing documents related to reviews of the contractor's price proposals, subject to cost or pricing data (see FAR 15.403-4), for six years. If it is impossible to determine the final payment date in order to measure the six year period, retain the files for nine years.
(b) DoD uses DD Form 350, Individual Contracting Action Report, (see 204.670) to meet these reporting requirements.
(1) 26 U.S.C. 6041 and 6041A and 26 CFR 1.6041 require Government payors to report to the IRS, on IRS Form 1099, payments of an annual cumulative value of $600 or more provided to a contractor, except payments for—
(i) Supplies, unless the supplies are incidental to the furnishing of services;
(ii) Telegram, telephone, freight, storage, or similar charges;
(iii) Income that the payor must report on IRS Form W-2 (e.g., payments to employees or payments under contracts for personal services);
(iv) Any contract with a Federal agency;
(v) Any contract with a State, the District of Columbia, or a possession of the United States; or a political subdivision, agency, or instrumentality of any of the foregoing;
(vi) Any contract with an organization exempted from taxation by 26 U.S.C. 501(a). Such organizations may include charitable, social welfare, labor, agricultural, veterans', and political organizations; business leagues; social clubs; fraternal societies; and employees' associations. Contracting officers may obtain additional information to assist in determining an organization's tax-exempt status via the Internet at http://www.irs.ustreas.gov/prod/bus
(vii) Any contract with a foreign government or a political subdivision of a foreign government;
(viii) Any contract with an international organization listed in 22 U.S.C. 288;
(ix) Any classified contract excepted by 26 U.S.C. 6050M. As used in this section only, a contract is classified if—
(A) DoD designates the existence of the contract or the contract subject matter as classified (i.e., the contract requires a specific degree of protection against unauthorized disclosure for reasons of national security); or
(B) The head of the agency determines that filing IRS Form 1099 would interfere with the effective conduct of a confidential law enforcement or foreign intelligence activity; or
(x) Such other services as the IRS may specify in regulations.
(2) Unless an exception in paragraph (1) of this section applies, the contracting officer must provide, as the last page of the copy of the contract sent to the payment office—
(i) A statement that the contractor is providing services subject to Form 1099 payment information reporting to the IRS, as required by 26 U.S.C. 6041 and 6041A; and
(ii) The contractor's Taxpayer Identification Number and type of organization, if the contract does not include the clause at 252.204-7004, Required Central Contractor Registration.
Do not use the provision at FAR 52.204-3, Taxpayer Identification, in solicitations that include the clause at 252.204-7004, Required Central Contractor Registration.
This subpart prescribes policies and procedures for assigning numbers to all solicitations, contracts, and related instruments. This subpart—
(a) Does not apply to solicitations or contracts issued by the Defense Commercial Communications Office of the Defense Information Systems Agency; and
(b) Is optional for solicitations and contracts that will be completely administered by the purchasing office or the consignee, except that—
(1) The procurement instrument identification (PII) number, including supplemental modification numbers, shall not exceed 19 characters (excluding hyphens); and
(2) The number shall begin with the purchasing office identifier and the fiscal year in accordance with 204.7003(a) (1) and (2) and appendix G.
(a) Use the uniform PII numbering system prescribed by this subpart for the solicitation/contract instruments described in 204.7003 and 204.7004.
(b) Retain the basic PII number unchanged for the life of the instrument.
(a) In assigning PII numbers—
(1) Use only the alpha-numeric characters, as prescribed in this subpart; and
(2) Do not use the letters “I” or “O,” except as noted in 204.7003(a)(1)(i) (J) and (K).
(b) If department/agency procedures require other identification on the solicitation, contract, or other related instrument forms, enter it in such a location so as to separate it clearly from the PII number.
(c) Enter the basic PII number, including Federal supply contract numbers and any supplementary numbers, in the spaces provided on the solicitation, contract, or related instrument forms. Separate the major elements by dashes, e.g., N00023-90-D-0009. If there is no space provided on the form, enter the number in the upper right corner of the form and identify what it is (e.g., Supplementary Number N00023-90-F-0120).
(a)
(1)
(i) Department/agency identification:
(ii) Issuing office identification. The remaining positions are the alpha-numeric characters that identify the issuing office. These characters are in appendix G.
(iii) Use all six positions. If necessary, enter zeros between the department/agency identifier and the issuing office identifier.
(2)
(3)
(i) Blanket purchase agreements—A
(ii) Invitations for bids—B
(iii) Contracts of all types except indefinite delivery contracts, facilities contracts, sales contracts, and contracts placed with or through other Government departments or agencies or against contracts placed by such departments or agencies outside the DoD—C
(iv) Indefinite delivery contracts—D
(v) Facilities contracts—E
(vi) Contracting actions placed with or through other Government departments or agencies or against contracts placed by such departments or agencies outside the DoD (including actions with the National Industries for the Blind (NIB), the National Industries for the Severely Handicapped (NISH), and the Federal Prison Industries (UNICOR))—F
(vii) Basic ordering agreements—G
(viii) Agreements, including basic agreements and loan agreements, but excluding basic purchasing agreements, basic ordering agreements, and leases—H
(ix) Do not use—I
(x) Reserved—J
(xi) Short form research contract—K
(xii) Lease agreement—L
(xiii) Purchase orders—manual (assign W when numbering capacity of M is exhausted during the fiscal year)—M
(xiv) Notice of intent to purchase—N
(xv) Do not use—O
(xvi) Purchase order—automated (assign V when numbering capacity of P is exhausted during a fiscal year)—P
(xvii) Request for quotation—manual—Q
(xviii) Request for proposal—R
(xix) Sales contract—S
(xx) Request for quotation—automated (assign U when numbering capacity of T is exhausted during a fiscal year)—T
(xxi) See T—U
(xxii) See P—V
(xxiii) See M—W
(xxiv) Reserved for departmental use—X
(xxv) Imprest fund—Y
(xxvi) Reserved for departmental use—Z
(4)
(b)
(a)
(1) Amendments to solicitations;
(2) Modifications to contracts and agreements, including provisioned item orders; and
(3) Calls or orders under contracts, basic ordering agreements, or blanket purchase agreements, issued by the contracting office or by a DoD activity other than the contracting office, including DoD orders against Federal supply schedules.
(b)
(c)
(2)
(i) Contract administration office—A
(ii) Contracting office—P
(3)
(i) Use K, L, M, N, P, and Q in the second position only if the modification is issued by the Air Force and is a provisioned item order.
(ii) Use S, and only S, in the second position to identify modifications issued to provide initial or amended shipping instructions when—
(A) The contract has either FOB origin or destination delivery terms; and
(B) The price changes.
(iii) Use T, U, V, W, X, or Y, and only those characters, in the second position to identify modifications issued to provide initial or amended shipping instructions when—
(A) The contract has FOB origin delivery terms; and
(B) The price does not change.
(iv) Only use Z in the second position to identify a modification which definitizes a letter contract.
(4)
(5) If the contract administration office is changing the contract administration or disbursement office for the first time and is using computer generated modifications to notify many offices, it uses the six position supplementary number ARZ999. If either office has to be changed again during the life of the contract, the supplementary number will be ARZ998, and on down as needed.
(6) Each office authorized to issue modifications shall assign the supplementary identification numbers in sequence. Do not assign the numbers until it has been determined that a modification is to be issued.
(d)
(2) Orders placed against another activity's contract or agreement.
(i) If the office placing the order or call is different from the office identified in the basic PII number, assign a serial number to the order or call. The first and second positions contain the call/order code assigned to the ordering office by appendix G. Do not use the letters A or P in the first position. The third and fourth positions are a two position serial number assigned by the ordering office. The series will begin with 01. When the numbers exceed 99, the office will assign a uniform series of identifiers containing alpha and/or numeric characters, e.g., Basic #: N00383-91-D-0001 serial #: TU01.
(ii) If an office is placing calls or orders with NIB, NISH, or UNICOR, the office shall identify the instrument with a 13 position supplementary PII number using an F in the 9th position. Modifications to these calls or orders shall be numbered in accordance with paragraph (c) of this section, e.g., Order #: DLA100-91-F-0001 modification #: A00001.
(e)
(1) Modifications to a call or order issued by a purchasing office begin with 01, 02, and so on through 99, then B1 through B9, BA through BZ, C1 through C9, and so on through ZZ.
(2) Modifications to a call or order issued by a contract administration office begin with 1A, 1B, and so on through 9Z, followed by A1, A2, and so on to A9, then AA, AB, and so on through AZ.
This subpart prescribes policies and procedures for assigning contract line item numbers.
(a) The numbering procedures of this subpart shall apply to all—
(1) Solicitations;
(2) Solicitation line and subline item numbers, if practicable;
(3) Contracts as defined in FAR Subpart 2.1;
(4) Contract line and subline item numbers;
(5) Exhibits;
(6) Exhibit line and subline items; and
(7) Any other document expected to become part of the contract.
(b) The numbering procedures are mandatory for all contracts where separate contract line item numbers are assigned, unless—
(1) There are no postaward contract administration functions that the contracting officer will assign to an office listed in the DoD Directory of Contract Administration Services Components;
(2) The contract is an indefinite delivery type for petroleum products against which posts, camps, and stations issue delivery orders for products to be consumed by them; or
(3) The contract is a communications service authorization issued by the Defense Information Systems Agency's Office of Defense Commercial Communications.
Contracts shall identify the items or services to be acquired as separate contract line items unless it is not feasible to do so.
(a) Contract line items shall have all four of the following characteristics; however, there are exceptions within the characteristics, which may make establishing a separate contract line item appropriate even though one of the characteristics appears to be missing—
(1)
(i) If the item is not separately priced (NSP) but the price is included in the unit price of another contract line item, enter NSP instead of the unit price;
(ii) When there are associated subline items, established for other than informational reasons, and those subline items are priced in accordance with 204.7104;
(iii) When the items or services are being acquired on a cost-reimbursement contract;
(iv) When the contract is for maintenance and repair services (e.g., a labor hour contract) and firm prices have been established for elements of the total price of an item but the actual number and quantity of the elements are not known until performance. The contracting officer may structure these contracts to reflect a firm or estimated total amount for each line item;
(v) When the contract line item is established to refer to an exhibit or an attachment (if management needs dictate that a unit price be entered, the price shall be set forth in the item description block and enclosed in parentheses); or
(vi) When the contract is an indefinite delivery type contract and provides that the price of an item shall be determined at the time a delivery
(2)
(i) Supplies are separately identifiable if they have no more than one—
(A) National stock number (NSN);
(B) Item description; or
(C) Manufacturer's part number.
(ii) Services are separately identifiable if they have no more than one—
(A) Scope of work; or
(B) Description of services.
(iii) This requirement does not apply if there are associated subline items, established for other than informational reasons, and those subline items include the actual detailed identification in accordance with 204.7104. Where this exception applies, use a general narrative description instead of the contract item description.
(3)
(i) The fact that there is more than one delivery date, destination, performance date, or performance point may be a determining factor in the decision as to whether to establish more than one contract line item.
(ii) If a contract line item has more than one destination or delivery date, the contracting officer may create individual contract line items for the different destinations or delivery dates, or may specify the different delivery dates for the units by destination in the delivery schedule.
(4)
(ii) The use of multiple accounting classification citations for a contract line item is authorized in the following situations:
(A) A single, nonseverable deliverable to be paid for with R&D or other funds properly incrementally obligated over several fiscal years in accordance with DoD policy;
(B) A single, nonseverable deliverable to be paid for with different authorizations or appropriations, such as in the acquisition of a satellite or the modification of production tooling used to produce items being acquired by several activities; or
(C) A modification to an existing contract line item for a nonseverable deliverable that results in the delivery of a modified item(s) where the item(s) and modification are to be paid for with different accounting classification citations.
(iii) When the use of multiple accounting classification citations is authorized for a single contract line item, establish informational subline items for each accounting classification citation in accordance with 204.7104-1(a).
(b) Exhibits may be used as an alternative to putting a long list of contract line items in the schedule. If exhibits are used, create a contract line item citing the exhibit's identifier. See 204.7105(a).
(c) If the contract involves a test model or a first article which must be approved, establish a separate contract line item or subline item for each item of supply or service which must be approved. If the test model or first article consists of a lot composed of a mixture of items, a single line item or subline item may be used for the lot.
(d) If a supply or service involves ancillary functions, like packaging and handling, transportation, payment of state or local taxes, or use of reusable containers, and these functions are normally performed by the contractor and the contractor is normally entitled to reimbursement for performing these functions, do not establish a separate contract line item solely to account for these functions. However, do identify the functions in the contract schedule. If the offeror separately prices these functions, contracting officers may establish separate contract line items for the functions; however, the separate
(a) Contract line items shall consist of four numeric digits 0001 through 9999. Do not use numbers beyond 9999. Within a given contract, the item numbers shall be sequential but need not be consecutive.
(b) The contract line item number shall be the same as the solicitation line item number unless there is a valid reason for using different numbers.
(c) Once a contract line item number has been assigned, it shall not be assigned to another, different, contract line item in the same contract.
Contract subline items provide flexibility to further identify elements within a contract line item for tracking performance or simplifying administration. There are only two kinds of subline items: those which are informational in nature and those which consist of more than one item that requires separate identification.
(a)
(2) The informational subline item may include quantities, prices, or amounts, if necessary to satisfy management requirements. However, these elements shall be included within the item description in the supplies/services column and enclosed in parentheses to prevent confusing them with quantities, prices, or amounts that have contractual significance. Do not enter these elements in the quantity and price columns.
(3) Informational subline items shall be used to identify each accounting classification citation assigned to a single contract line item number when use of multiple citations is authorized (see 204.7103-1(a)(4)(ii)).
(b)
(i) Are to be paid for from more than one accounting classification. A subline item shall be established for the quantity associated with the single accounting classification citation. Establish a line item rather than a subline item if it is likely that a subline item may be assigned additional accounting classification citations at a later date. Identify the funding as described in 204.7104-1(a)(3);
(ii) Are to be packaged in different sizes, each represented by its own NSN;
(iii) Have collateral costs, such as packaging costs, but those costs are not a part of the unit price of the contract line item;
(iv) Have different delivery dates or destinations or requisitions, or a combination of the three; or
(v) Identify parts of an assembly or kit which—
(A) Have to be separately identified at the time of shipment or performance; and
(B) Are separately priced.
(2) Each separately identified contract subline item shall have its own—
(i) Delivery schedule, period of performance, or completion date;
(ii) Unit price or single total price or amount (not separately priced (NSP) is acceptable as an entry for price or amount if the price is included in another subline item or a different contract line item). This requirement does not apply—
(A) If the subline item was created to refer to an exhibit or an attachment. If management needs dictate that a unit price be entered, the price shall be set forth in the item description block of the schedule and enclosed in parentheses; or
(B) In the case of indefinite delivery contracts described at 204.7103-1(a)(1)(vi).
(iii) Identification (e.g., NSN, item description, manufacturer's part number, scope of work, description of services).
(3) Unit prices and extended amounts.
(i) The unit price and total amount for all subline items may be entered at the contract line item number level if the unit price for the subline items is identical. If there is any variation, the subline item unit prices shall be entered at the subline item level only.
(ii) The unit price and extended amounts may be entered at the subline items level.
(iii) The two methods in paragraphs (b)(3) (i) and (ii) of this subsection shall not be combined in a contract line item.
(iv) When the price for items not separately priced is included in the price of another subline item or contract line item, it may be necessary to withhold payment on the priced subline item until all the related subline items that are not separately priced have been delivered. In those cases, use the clause at 252.204-7002, Payment for Subline Items Not Separately Priced.
(a) Number subline items by adding either two numeric characters or two alpha characters to the basic contract line item number.
(1)
(2)
(i) Do not use the letters I or O as alpha characters.
(ii) Use all 24 available alpha characters in the second position before selecting a different alpha character for the first position. For example, AA, AB, AC, through AZ before beginning BA, BB, and BC.
(b) Within a given contract line item, the subline item numbers shall be sequential but need not be consecutive.
(c) Exhibits may be used as an alternative to setting forth in the schedule a long list of contract subline items. If exhibits are used, create a contract subline item citing the exhibit's identifier. See 204.7105.
(d) If a contract line item involves ancillary functions, like packaging and handling, transportation, payment of state or local taxes, or use of reusable containers, and these functions are normally performed by the contractor and the contractor is normally entitled to reimbursement for performing these functions, do not establish a separate subline item solely to account for these functions. However, do identify the functions in the contract schedule. If offeror separately prices these functions, then contracting officers may establish separate subline items for the functions; however, the separate subline items must conform to the requirements of 204.7104-1.
(e) The following examples illustrate subline items numbering—
(1) Subline items structured to identify destinations for identical items, identically priced (delivery schedule shall be established for each subline item, not the contract line item).
(2) Subline items structured to identify destinations for identical items, not identically priced (delivery schedule shall be established for each subline item, not the contract line item).
(3) Subline items structured to identify different sizes of an item that are identically priced (delivery schedule shall be established for each subline item, not the contract line item).
(4) Subline items structured to identify different sizes of an item that are not identically priced (delivery schedule shall be established for each subline item, not the contract line item).
(5) Subline items structured to provide the capability for relating subordinate separately priced packaging costs to the overall contract line item. (Separate delivery schedules shall be established for the subline item identifying the contractor's product and for the subline item identifying packaging. No schedule will be established for the contract line item.)
(6) Subline items structured to identify different accounting classifications for identical items (delivery schedule shall be established for each subline item, not the contract line item).
(7) Informational subline items established to identify multiple accounting classification citations assigned to a single contract line item.
(8) Subline items structured to identify parts of an assembly (delivery schedule and price shall be established for each identified part at the subline item level, not for the assembly at the contract line item level).
(9) Subline items structured to identify parts of a kit (delivery schedule and price shall be established for each identified part at the subline item level, not for the kit at the contract line item level).
(a)
(2) When using exhibits, establish a contract line or subline item and refer to the exhibit.
(3) Identify exhibits individually.
(4) Each exhibit shall apply to only one contract line item or subline item, except—
(i) One exhibit may apply to one or more option line item(s) when the data required under the exhibits is identical in all respects except the period during which the option is to be exercised; and
(ii) An exhibit may apply to more than one contract line item if the exhibit is not separately priced and the exhibit deliverable is identical for all applicable contract line items.
(5) More than one exhibit may apply to a single contract line item.
(6) Data items on a DD Form 1423, Contract Data Requirements List, may be either separately priced or not separately priced.
(i)
(A) Section B. If the prices are entered in section B of the schedule, detach Blocks 17 and 18 of the DD Form 1423 and file elsewhere in the contract file. If the prices are entered on the DD Form 1423, do not detach Blocks 17 and 18 of the DD Form 1423.
(B) DD Form 1423. If the prices are entered on the DD Form 1423, the price of all separately priced deliverable data items attributable to a line item shall be totalled and included, for information purposes, in parentheses, below the supplies services for that line item, in section B of the schedule.
(ii)
(7) The contracting officer may append attachments to exhibits, as long as the attachment does not identify a deliverable requirement which has not been established by a contract or exhibit line or subline item.
(b)
(2) Exhibit identifiers need not be either consecutive or sequential.
(3) Once an identifier has been assigned to an exhibit, do not use it on another exhibit in the same contract.
(4) The identifier shall always appear in the first or first and second positions of all applicable exhibit line item numbers.
(5) If the exhibit has more than one page, cite the procurement instrument identification number, exhibit identifier, and applicable contract line or subline item number on each page.
(6) Use numbers to identify attachments.
(c)
(2)
(ii) Number line items using a four position number.
(A) The first position or the first and second position contain the exhibit identifier.
(B) The third and fourth positions contain the alpha or numeric character serial numbers assigned to the line item.
(iii) Assign alpha or numeric characters to the line item on the basis of the same criteria outlined in contract subline items at 204.7104.
(iv) Exhibit line item numbers shall be sequential within the exhibit.
(3)
(ii)
(a) If new items are added, assign new contract line or subline item numbers or exhibit line item numbers, in accordance with the procedures established at 204.7103, 204.7104, and 204.7105.
(b) Modifications to existing contract line items or exhibit line items. (1) If the modification relates to existing contract line items or exhibit line items, the modification shall refer to those item numbers.
(2) If the contracting officer decides to assign new identifications to existing contract or exhibit line items, the following rules apply—
(i)
(B) The original line item or subline item number may be used if the modification makes only minor changes in the specifications of some of the items ordered on the original line item or subline item and the resulting changes in unit price can be averaged to provide a new single unit price for the total quantity. If the changes in the specifications make the item significantly distinguishable from the original item or the resulting changes in unit price cannot be averaged, create a new line item.
(C) If the modification affects only a partial quantity of an existing contract or exhibit line item or subline item and the change does not involve either the delivery date or the ship-to/mark-for data, the original contract or exhibit line item or subline item number shall remain with the unchanged quantity. Assign the changed quantity the next available number.
(ii)
(A) If the modification is undefinitized and increases the quantity of an existing definitized item, assign the undefinitized quantity the next available number.
(B) If the modification increases the quantity of an existing undefinitized item, the original contract or exhibit line item or subline item may be used if the unit price for the new quantity is expected to be the same as the price for the original quantity. If the unit prices of the two quantities will be different, assign the new quantity the next available number.
(C) If the modification both affects only a partial quantity of the existing contract or exhibit line or subline item and definitizes the price for the affected portion, the definitized portion shall retain the original item number. If there is any undefinitized portion of the item, assign it the next available number. However, if the modification definitizes the price for the whole quantity of the line item, and price impact of the changed work can be apportioned equally over the whole to arrive at a new unit price, the quantity with the changes can be added into the quantity of the existing item.
(D) If the modification affects only a partial quantity of an existing contract or exhibit line or subline item but does not change the delivery schedule or definitize price, the unchanged portion shall retain the original contract or exhibit line or subline item number. Assign the changed portion the next available number.
(a) When a contract contains more than one accounting classification citation, contracting offices shall use ACRNs. Assigning the ACRNs is the responsibility of the contracting office issuing the contract, basic ordering agreement, or blanket purchase agreement. This authority shall not be delegated. If more than one office will use the contract (e.g., ordering officers, other contracting officers), the contract must contain instructions for assigning ACRNs.
(b) ACRNs are used to process certain contract data through the Military Standard Contract Administration Procedures (MILSCAP) system. The MILSCAP system uses the ACRN to relate certain contract administration records to the accounting classification citation used to obligate funds on the contract. Among these records are the accounting classification trailer record, the supplies schedules data record, and the services line item data record. ACRNs are also used to associate the various record formats of the contract payment notice as described in chapter 9 of the MILSCAP Manual, DoD 4000.25-5-M.
(c)
(1) Do not use the letters I and O.
(2) In no case shall an ACRN apply to more than one accounting classification citation, nor shall more than one ACRN be assigned to one accounting classification citation.
(d)
(2) ACRNs need not prefix accounting classification citations if the accounting classification citations are present in the contract only for the transportation officer to cite to Government bills of lading.
(3) If the contracting officer is making a modification to a contract and using the same accounting classification citations, which have had ACRNs assigned to them, the modification need cite only the ACRNs in the accounting and appropriations data block or on the continuation sheets.
(e)
(1)
(2)
(ii) If more than one accounting classification citation applies to a single contract line item, identify each assigned ACRN and the amount of associated funds using informational subline items (see 204.7104-1(a)).
(3)
(ii) Payment instructions shall provide a methodology for the paying office to assign payments to the appropriate accounting classification citation(s), based on anticipated contract work performance. The method established should be consistent with the reasons for the establishment of the line items. The payment method may be based upon a unique distribution profile devised to reflect how the funds represented by each of the accounting classification citations support contract performance. Payment methods that direct that payments be made from the earliest available fiscal year funding sources, or that provide for proration across accounting classification citations assigned to the line item, or a combination thereof, may be used if that methodology reasonably reflects how each of the accounting classification citations supports contract performance.
This subpart prescribes uniform policies and procedures for identification of commercial and Government entities when it is necessary to—
(a) Exchange data with another contracting activity, including contract administration activities and contract payment activities, or comply with the reporting requirements of subpart 204.6; or
(b) Identify contractors for the purpose of developing computerized acquisition systems or solicitation mailing lists.
(a)
(1) A code assigned by the Defense Logistics Information Service (DLIS) to identify a commercial or Government entity; or
(2) A code assigned by a member of the North Atlantic Treaty Organization (NATO) that DLIS records and maintains in the CAGE master file. This type of code is known as an “NCAGE code.”
(b)
(a) DLIS assigns or records and maintains CAGE codes to identify commercial and Government entities. DoD
(b)(1) If a prospective contractor must register in the Central Contractor Registration (CCR) database (see subpart 204.73) and does not have a CAGE code, DLIS will assign a CAGE code when the prospective contractor submits its request for registration in the CCR database.
(2) If registration in the CCR database is not required, the prospective contractor's CAGE code is not already available in the contracting office, and the prospective contractor does not respond to the provision at 252.204-7001, Commercial and Government Entity (CAGE) Code Reporting, use the following procedures:
(i) To identify the prospective contractor's CAGE code, use—
(A) The monthly H-series CD ROM that contains the H-4/H-8 CAGE master file issued by DLIS (Their address is: Customer Service, Federal Center, 74 Washington Avenue, North, Battle Creek, MI 49017-3084. Their telephone number is: toll-free 1-888-352-9333);
(B) The on-line access to the CAGE file through the Defense Logistics Information System;
(C) The on-line access to the Defense Logistics Agency (DLA) CAGE file through the DLA Network or dial-up capability; or
(D) The Internet to access the CAGE Lookup Server at http://www.dlis.dla.mil/cageserve.htm.
(ii) If no CAGE code is identified through use of the procedures in paragraph (b)(2)(i) of this subsection, ask DLIS to assign a CAGE code. Submit a DD Form 2051, Request for Assignment of a Commercial and Government Entity (CAGE) Code, (or electronic equivalent) to the address in paragraph (b)(2)(i)(A) of this subsection, ATTN: DLIS-SBB. The contracting office completes Section A of the DD Form 2051, and the contractor completes Section B. The contracting office must verify Section B before submitting the form.
(c) Direct questions on obtaining computer tapes, electronic updates, or code assignments to DLIS (DLIS-SBB) at DSN 932-4381, or commercial (616) 961-4381.
Requirements for use of DUNS numbers are in FAR 4.602(d) and 4.603.
Requirements for use of TINs are in FAR subpart 4.9.
(a) Assist offerors in obtaining the required CAGE codes.
(b) Do not deny a potential offeror a solicitation package because the offeror does not have a contractor identification code.
(c) Consider requesting a CAGE code at the time a potential offeror is sent a solicitation package or added to the mailing list to ensure that a code is assigned in sufficient time to process the DD Form 350, Individual Contracting Action Report, without delay.
(a) DLIS will accept written requests for changes to CAGE files, other than name changes, from the following entities:
(1) The entity identified by the code. The entity must use company letterhead to forward the request.
(2) The contracting office.
(3) The contract administration office.
(b) Submit requests for changes to CAGE files on DD Form 2051, or electronic equivalent, to—Defense Logistics Information Service, DLIS-SBB, Federal Center, 74 Washington Avenue, North, Battle Creek, MI 49017-3084. Telephone Numbers: DSN 932-4381, commercial (616) 961-4381. Facsimile: (616) 961-4528, 4388, 4485.
(c) The contracting officer responsible for execution of a change-of-name agreement (see FAR subpart 42.12) must submit the agreement to DLIS-SBB. If there are no current contracts, each contracting and contract administration office receiving notification of changes from the commercial entity must forward a copy of the change notice annotated with the CAGE code to DLIS-SBB unless the change notice indicates that DLIS-SBB already has been notified.
(d) Additional guidance for maintaining CAGE codes is in Volume 7 of DoD 4100.39-M, Federal Logistics Information System (FLIS) Procedures Manual.
Contracting officers shall process and execute novation agreements in accordance with FAR Subpart 42.12, Novation and Change-of-Name Agreements. These actions are independent of code and name assignments made as a result of the occasion which created the need for the novation agreement. The maintenance activity will determine which entity(s) will retain the existing code(s) and which entities will be assigned new codes. The contracting officer responsible for processing the novation agreement shall provide the maintenance activity with the following information:
(a) Name(s), address(es), and code(s) of the contractor(s) transferring the original contractual rights and obligations.
(b) Name(s), address(es), and code(s) (if any) of the entity who is the successor in interest (transferor).
(c) Name(s), address(es), and code(s) (if any) of the entity who is retaining or receiving the rights to the technical data.
(d) Description of the circumstances surrounding the novation agreement and especially the relationship of each entity to the other.
Authorized agents and brokers are entities and, as such, may be assigned CAGE codes for identification and processing purposes.
(a) A single CAGE code will be assigned to the agent/broker establishment in addition to any codes assigned to the entities represented by the agent/broker, i.e., only one code will be assigned to a specific agent/broker entity regardless of the number of firms represented by that agent/broker.
(b) Additional codes may be assigned to an agent/broker if they meet the criteria for assigning additional codes for entities, e.g., different location.
(c) Codes will not be assigned to an agent/broker in care of the entity being represented or in any way infer that the agent/broker is a separate establishment bearing the name of the entity represented by the agent/broker.
This subpart prescribes policies and procedures for requiring contractor registration in the DoD Central Contractor Registration (CCR) database to comply with the Debt Collection Improvement Act of 1996 (31 U.S.C. 3332; 31 U.S.C. 7701), and to increase visibility of vendor sources for specific supplies and services and their geographical locations.
Prospective contractors must be registered in the CCR database prior to award of a contract, basic agreement, basic ordering agreement, or blanket purchase agreement, except for—
(a) Purchases paid for with a Governmentwide commercial purchase card;
(b) Awards made to foreign vendors for work performed outside the United States;
(c) Classified contracts or purchases (see FAR 4.401) when registration in the CCR database, or use of CCR data, could comprise the safeguarding of classified information or national security;
(d) Contracts awarded by deployed contracting officers in the course of military operations, including, but not limited to, contingency operations as defined in 10 U.S.C. 101(a)(13) or humanitarian or peacekeeping operations as defined in 10 U.S.C. 2302(7), or contracts awarded by contracting officers in the conduct of emergency operations, such as responses to natural disasters or national or civil emergencies; and
(e) Purchases to support unusual or compelling needs of the type described in FAR 6.302-2.
(a)(1) Except as provided in 204.7302, the contracting officer must require each offeror to provide a DUNS number (see 204.603(2)) or, if applicable, a DUNS+4 number, with its verbal or written offer, regardless of the dollar amount of the offer.
(2) Before awarding a contract, basic agreement, basic ordering agreement, or blanket purchase agreement, the contracting officer must verify that the prospective contractor is registered in the CCR database (but see paragraph (b) of this section). The contracting officer may verify registration using the DUNS number or, if applicable, the DUNS+4 number, by calling toll-free: 1-800-841-4431, commercial: (616) 961-5757, or DSN: 932-5757; via the Internet at http://ccr.edi.disa.mil/ccr/cgi-bin/status.pl; or as otherwise provided by agency procedures.
(3) The contracting officer need not verify registration before placing an order or call under a DoD contract or agreement.
(4) The contracting officer must verify registration before placing an order or call under a non-DoD contract or agreement. If the contracting is not registered, the contracting officer must follow the procedures in paragraph (b) of this section.
(5) As part of the annual review of basic agreements, basic ordering agreements, and blanket purchase agreements, contracting officers must modify these agreements to incorporate the clause at 252.204-7004, Required Central Contractor Registration.
(b) If the contracting officer determines that a prospective contractor is not registered in the CCR database and an exception to the registration requirements for the award does not apply (see 204.7302), the contracting officer must—
(1) If the needs of the requiring activity allow for a delay, proceed to award after the contractor is registered; or
(2) If the needs of the requiring activity do not allow for a delay, proceed to award to the next otherwise successful registered offeror, provided that written approval is obtained at one level above the contracting officer.
(c) Agencies must protect against improper disclosure of contractor CCR information.
(d) The contracting officer must, on contractual documents transmitted to the payment office, provide either the Commercial and Government Entity code or the DUNS number in accordance with agency procedures.
Except as provided in 204.7302, use the clause at 252.204-7004, Required Central Contractor Registration, in solicitations and contracts.
41 U.S.C. 421 and 48 CFR chapter 1.
(b) Allow at least 45 days response time when requested by a qualifying or designated country source (as these terms are used in part 225) and the request is consistent with the Government's requirement.
(d)(i) For historically black college and university and minority institution set-asides under 226.7003, use CBD Numbered Note 5.
(ii) For acquisitions being considered for historically black college and university and minority institution set-aside, state:
This proposed contract is being considered as a 100 percent set-aside for historically black colleges and universities (HBCUs) and minority institutions (MIs), as defined by the clause at 252.226-7000 of the Defense Federal Acquisition Regulation Supplement. Interested HBCUs and MIs should provide the contracting office as early as possible, but not later than 15 days after this notice, evidence of their capability to perform the contract, and a positive statement of their eligibility as an HBCU or MI. If adequate response is not received from HBCUs and MIs, the solicitation will instead be issued, without further notice, as:
(iii) For broad agency announcement (BAA) (see 235.016) notices, indicate which, if any, portion of the BAA will be set-aside for historically black colleges and universities and minority institutions.
(e) For acquisitions restricted to domestic sources under the authority of FAR 6.302-3, use CBD Numbered Note 13.
(a)
(A) For undefinitized contractual actions, report the not-to-exceed (NTE) amount. Later, if the definitized amount exceeds the NTE amount by more than $5 million, report only the amount exceeding the NTE.
(B) For indefinite delivery, time and material, labor hour, and similar contracts, report the initial award if the estimated face value, excluding unexercised options, is more than $5 million. Do not report orders up to the estimated value, but after the estimated value is reached, report subsequent modifications and orders that
(C) Do not report the same work twice.
(ii) Departments and agencies submit the information—
(A) To the Office of the Assistant Secretary of Defense (Public Affairs);
(B) By the close of business the day before the date of the proposed award;
(C) Using report control symbol DD-LA- (AR) 1279;
(D) Including, as a minimum, the following—
(
(
(
(
(
(iii) Departments and agencies, in accordance with department/agency procedures and concurrent with the public announcement, shall provide information similar to that required by paragraph (a)(ii) of this section to members of Congress in whose state or district the contractor is located and the work is to be performed.
(a) As required by 10 U.S.C. 2413, the Defense Logistics Agency enters into cooperative agreements—
(1) With—
(i) State and local governments;
(ii) Non-profit organizations;
(iii) Indian tribal organizations; and
(iv) Indian-owned economic enterprises
(2) For the provision of technical assistance to business entities.
(b) Contractors receiving defense contracts valued at more than $500,000 must provide cooperative agreement holders, at their request, the information specified in the clause at 252.205-7000, Provision of Information to Cooperative Agreement Holders.
Use the clause at 252.205-7000, Provision of Information to Cooperative Agreement Holders, in solicitations and contracts expected to exceed $500,000.
For paid advertisements to recruit civilian personnel, see section 332-1-9 of the Federal Personnel Manual.
(a)
(ii) Submit DD Form 1535, Request/Approval for Authority to Advertise, to the approval authority to obtain special or general authority.
(A) Special authority permits the publication of a given advertisement
(B) General authority permits the publication of such advertisements as may be required during a designated fiscal year.
41 U.S.C. 421 and 48 CFR chapter 1.
(b) Contracts awarded using the procedures in 237.104(b)(ii) are expressly authorized by 10 U.S.C. 1091.
(a) Agencies may use this authority to totally or partially exclude a particular source from a contract action.
(b) The determination and findings (D&F) and the documentation supporting the D&F must identify the source to be excluded from the contract action.
(i) Include the following information, as applicable, and any other information that may be pertinent, in the supporting documentation:
(A) The acquisition history of the supplies or services, including sources, prices, quantities, and dates of award;
(B) The circumstances which make it necessary to exclude the particular source from the contract action, including—
(
(
(C) Whether the existing source must be totally excluded from the contract action or whether a partial exclusion is sufficient;
(D) The potential effect of exclusion on the excluded source in terms of loss of capability to furnish the supplies or services in the future;
(E) When FAR 6.202(a)(1) is the authority, the basis for—
(
(
(F) When FAR 6.202(a)(2) is the authority—
(
(
(
(
(ii) A sample format for Determination and Findings citing the authority
(Describe requirement.) Findings The exclusion of
Alternate 1: will increase or maintain competition for this requirement and is expected to result in a reduction of $
Alternate 2: is in the interest of national defense because it will result in having a supplier available for furnishing these supplies or services in case of a national emergency or industrial mobilization. (Explain circumstances requiring exclusion of source.)
Alternate 3: is in the interest of national defense because it will result in establishment or maintenance of an essential engineering, research or development capability to be provided by an educational or other nonprofit institution or a federally funded research and development center. (Explain circumstances requiring exclusion of source.)
(b) Also no separate justification or determination and findings is required for contract actions processed as historically black college and university and minority institution set-asides (see 226.7003).
(a)
(
(
(
(
(
(
(b)
(4) Do not use this authority unless the equipment or parts have been adopted as standard items of supply in
(b)
(i) Supplies, services, or construction needed at once because of fire, flood, explosion, or other disaster;
(ii) Essential equipment or repair needed at once to—
(A) Comply with orders for a ship;
(B) Perform the operational mission of an aircraft; or
(C) Preclude impairment of launch capabilities or mission performance of missiles or missile support equipment.
(iii) Construction needed at once to preserve a structure or its contents from damage;
(iv) Purchase requests citing an issue priority designator under DoDD 4410.6, Uniform Material Movement and Issue Priority System, of 4 or higher, or citing “Electronic Warfare QRC Priority.”
Use the provision at 252.206-7000, Domestic Source Restriction, in all solicitations that are restricted to domestic sources under the authority of FAR 6.302-3.
(c)
(b)
(i) Acquire supplies and services from military exchange stores outside the United States for use by the armed forces outside the United States in accordance with 10 U.S.C. 2424(a) and subject to the limitations of 10 U.S.C. 2424(b). The limitations of 10 U.S.C. 2424(b) (1) and (2) do not apply to the purchase of soft drinks that are manufactured in the United States. For the purposes of 10 U.S.C. 2424, soft drinks manufactured in the United States are brand name carbonated sodas, manufactured in the United States, as evidenced by product markings.
(ii) Acquire police, fire protection, airfield operation, or other community services from local governments at military installations to be closed under the circumstances in 237.7401 (Section 2907 of Fiscal Year 1994 Defense Authorization Act (Pub. L. 103-160)).
(c)
(A) The statute authorizing or requiring award specifically—
(
(
(
(B) The Secretary of Defense provides Congress written notice of intent to award. The contract cannot be awarded until 180 days have elapsed since the date Congress received the notice of intent to award. Contracting activities must submit a draft notice of intent with supporting documentation through channels to the Director of Defense Procurement, Office of the Under Secretary of Defense (Acquisition & Technology).
(ii) The limitation in paragraph (c)(i) of this subsection applies only if the statute authorizing or requiring award was enacted after September 30, 1989.
(iii) Subsequent statutes may provide different or additional constraints on the award of contracts to specified colleges and universities. Contracting officers should consult legal counsel on a case-by-case basis.
(c)
(b) Technical and requirements personnel must obtain any review and approval required by department or agency procedures before submission of a recommendation for other than full and open competition to the contracting officer.
(c) When conditions warrant, a class justification may provide for award of multiple contracts extending across more than one program phase.
(a) Include sufficient information in the justification to permit its approval as a stand-alone document, even though agency procedures may require supplementary documentation.
(a)(4) The Under Secretary of Defense (Acquisition & Technology) may delegate this authority to—
(A) An Assistant Secretary of Defense; or
(B) For a defense agency, an officer or employee serving in, assigned, or detailed to that agency who—
41 U.S.C. 421 and 48 CFR chapter 1.
When a class justification for other than full and open competition has been approved, planning for competition shall be accomplished consistent with the terms of that approval.
(c)(i) Military departments and agencies shall prepare written acquisition plans for—
(A) Acquisitions for development, as defined in FAR 35.001, when the total cost of all contracts for the acquisition program is estimated at $5 million or more;
(B) Acquisitions for production or services when the total cost of all contracts for the acquisition program is estimated at $30 million or more for all years or $15 million or more for any fiscal year; and
(C) Any other acquisition considered appropriate by the department or agency.
(ii) Written plans are not required in acquisitions for a final buy out or one-time buy. The terms “final buy out” and “one-time buy” refer to a single contract which covers all known present and future requirements. This exception does not apply to a multiyear contract or a contract with options or phases.
(d) Prepare written acquisition plans for acquisition programs meeting the thresholds of paragraphs (c)(i) (A) and (B) of this section on a program basis. Other acquisition plans may be written on either a program or an individual contract basis.
(f) The program manager, or other official responsible for the program, has overall responsibility for acquisition planning.
(h)(i) Apply design-to-cost principles—
(A) In all major defense acquisition programs (DoDD 5000.1, Defense Acquisition), unless exempted by the Secretary of Defense; and
(B) To the acquisition of systems, subsystems, and components below the thresholds for major defense acquisition programs, to the extent prescribed by DoDD 5000.1.
(ii) Consider life-cycle-cost in all acquisitions of systems and equipment.
(b) The planner should forward the requirements information to the contract administration organization when assistance in identification of potential sources of supply is necessary, when an existing contract is being modified or resolicited, or when contract administration resource requirements will be affected.
For acquisitions covered by 207.103(c)(i) (A) and (B), correlate the plan to the DoD Future Years Defense Program, applicable budget submissions, and the decision coordinating paper/program memorandum, as appropriate. It is incumbent upon the planner to coordinate the plan with all those who have a responsibility for the development, management, or administration of the acquisition. The acquisition plan should be provided to the contract administration organization to facilitate resource allocation and planning for the evaluation, identification, and management of contractor performance risk.
(a)
(A) Applicability of a decision coordinating paper (DCP), acquisition decision memorandum, Defense Acquisition Board (DAB), and/or internal service reviews. Describe the options in the DCP/acquisition decision memorandum and delineate which option the acquisition plan supports.
(B) The date approval for operational use has been or will be obtained. If waivers are requested, describe the need for the waivers.
(C) A milestone chart depicting the acquisition objectives.
(D) Milestones for updating the acquisition plan. Indicate when the plan will be updated. Program managers should schedule updates to coincide with DAB reviews and the transition from one phase to another (e.g., engineering and manufacturing development to production and deployment).
(8)
(b)
(6)
(13)
(ii) Discuss the mission profile, reliability, and maintainability (R&M) program plan, R&M predictions, redundancy, qualified parts lists, parts and material qualification, R&M requirements imposed on vendors, failure analysis, corrective action and feedback, and R&M design reviews and trade-off studies.
(iv) See DoDD 5000.1, Defense Acquisition, and DoD 5000.2-R, Mandatory Procedures for Major Defense Acquisition Programs (MDAPs) and Major Automated Information System (MAIS) Acquisition Programs, for procedures on standardization and on the DoD Parts Control Program. Also see DoD 4120.3-M, Defense Standardization Program (DSP) Policies and Procedures.
(S-70) Describe the extent of Computer-Aided Acquisition and Logistics Support (CALS) implementation (see MIL-HDBK 59, Department of Defense Computer-Aided Logistics Support (CALS) Program Guide, and MIL-STD-1840A, Automated Interchange of Technical Information.
(16)
(18)
(
(
(
(
(
(
(
(
(
(
(
(
(
(
(B)
(
(
(
(C) Ensure compliance with DoDD 4210.15, Hazardous Material Pollution Prevention.
(D)
(b)(1)(A) The contracting officer is prohibited by 10 U.S.C. 2305(d)(4)(A) from requiring offers for development or production of major systems that would enable the Government to use technical data to competitively reprocure identical items or components of the system if the item or component were developed exclusively at private expense, unless the contracting officer determines that—
(
(
(
(B) If the contracting officer makes a determination, under paragraphs (b)(1)(A) (
If the equipment will be leased for more than 60 days, the requiring activity must prepare and provide the contracting officer with the justification supporting the decision to lease or purchase.
(a)
(1) Considered all costs of such a contract (including estimated termination liability); and
(2) Determined in writing that the contract is in the best interest of the Government.
(b)
(a) Fund leases in accordance with DoD Financial Management Regulation (FMR) 7000.14-R, Volume 2A, Chapter 1.
(b) DoD leases are either capital leases or operating leases. The difference between the two types of leases is described in FMR 7000.14-R, Volume 4, Chapter 7, Section 070308.
(c) Capital leases are essentially installment purchases of property. Use procurement funds for capital leases.
41 U.S.C. 421 and 48 CFR chapter 1.
(a)(1)(v) See subpart 208.70, Coordinated Acquisition.
(2)(iii) Information on General Services Administration (GSA) schedules for maintenance, repair, and rehabilitation of personal property is in the GSA supply catalog. The types of personal property for which GSA, Federal Supply Service has schedule contracts for maintenance, repair, and/or rehabilitation are—
(
(
(
(
(f) Detailed information on strategic and critical materials in excess of national stockpile requirements (e.g., metals, ores, chemicals) is available from the Defense National Stockpile Center, 8725 John J. Kingman Road, Suite 4616, Fort Belvoir, VA 22060-6223.
(g) Acquire helium (Pub. L. 86-777)—
(i) In bulk from—
(A) The Department of Interior (Bureau of Mines); or
(B) Eligible private helium distributors. A list of eligible private helium distributors is maintained by the Bureau of Mines, Helium Field Operations, 1100 South Fillmore Street, Amarillo, TX 79101.
(ii) In cylinders or trailers, from—
(A) The Department of Interior (Bureau of Mines); or
(B) Through GSA Federal Supply Schedule contracts.
(a) When a schedule lists both foreign and domestic items that will meet the needs of the requiring activity, the ordering office must apply the procedures of part 225 and FAR part 25, Foreign Acquisition. When purchase of an item of foreign origin is specifically required, the requiring activity must furnish the ordering office sufficient information to permit the determinations required by part 225 and FAR part 25 to be made.
The DoD will not be a mandatory user of any schedule unless individual DoD activities elect to provide annual requirements estimates to GSA and become mandatory users. Examples of areas where this approach may be applied are:
(1) Group 68—gases and chemicals;
(2) Group 26—pneumatic tires and inner tubes;
(3) Maintenance, repair, and/or rehabilitation of personal property; and
(4) “Just-in-time” arrangements for delivery of material directly from vendors to users.
Make maximum use of the schedules. Other procedures may be used if further competition is judged to be in the best interest of the Government in terms of quality, responsiveness, or cost.
(1) When ordering from schedules, ordering offices—
(i) May use DD Form 1155, Order for Supplies or Services, to place orders for—
(A) Commercial items at or below the simplified acquisition threshold; and
(B) Other than commercial items at any dollar value (see 213.307);
(ii) Shall use SF 1449, Solicitation/Contract/Order for Commercial Items, to place orders for commercial items exceeding the simplified acquisition threshold (see FAR 12.204); and
(iii) May use SF 1449 to place orders for other than commercial items at any dollar value.
(2) Schedule orders may be placed orally if—
(i) The contractor agrees to furnish a delivery ticket for each shipment under the order (in the number of copies required by the ordering office). The ticket must include the—
(A) Contract number;
(B) Order number under the contract;
(C) Date of order;
(D) Name and title of person placing the order;
(E) Itemized listing of supplies or services furnished; and
(F) Date of delivery or shipment; and
(ii) Invoicing procedures are agreed upon. Optional methods of submitting invoices for payment are permitted, such as—
(A) An individual invoice with a receipted copy of the delivery ticket;
(B) A summarized monthly invoice covering all oral orders made during the month, with receipted copies of the
(C) A contracting officer statement that the Government has received the supplies.
(3) For purchases where cash payment is an advantage, the use of imprest funds in accordance with 213.305 is authorized when—
(i) The order does not exceed the threshold at FAR 13.305-3(a); and
(ii) The contractor agrees to the procedure.
(4) The Governmentwide commercial purchase card may be used to place schedule orders in accordance with agency procedures.
Ordering offices may use DD Form 1155, Order for Supplies or Services, to place orders with central nonprofit agencies or workshops.
This subpart prescribes policy and procedures for acquisition of items for which contracting responsibility is assigned to one or more of the departments/agencies or the General Services Administration. Contracting responsibility is assigned through—
(a) The Coordinated Acquisition Program (commodity assignments are listed in appendix B); or
(b) The Integrated Materiel Management Program (assignments are in DoD 4140.26-M, Integrated Materiel Management for Consumable Items).
For purposes of this subpart—
(a) Under the DoD Coordinated Acquisition Program, contracting responsibility for certain commodities is assigned to a single department, agency, or the General Services Administration (GSA). Commodity assignments are made—
(1) To the departments and agencies, by the Deputy Under Secretary of Defense (Logistics);
(2) To GSA, through agreement with GSA, by the Deputy Under Secretary of Defense (Logistics);
(3) Outside the continental United States, by the Unified Commanders; and
(4) For acquisitions to be made in the United States for commodities not assigned under paragraphs (a) (1), (2), or (3) of this section, by agreement of agency heads (10 U.S.C. 2311).
(i) Agreement may be on either a one-time or a continuing basis. The submission of a military interdepartmental purchase request (MIPR) by a requiring activity and its acceptance by the contracting activity of another department, even though based on an oral communication, constitutes a one-time agreement.
(ii) Consider repetitive delegated acquisition responsibilities for coordinated acquisition assignment. If not considered suitable for coordinated acquisition assignment, formalize continuing agreements and distribute them to all activities concerned.
(b) Under the Integrated Materiel Management Program, assignments are made by the Deputy Under Secretary of Defense (Logistics)—
(1) To the departments and agencies; and
(2) To GSA, through agreement with GSA.
The acquiring department generally is responsible under coordinated acquisition for—
(a) Operational aspects of acquisition planning (Phasing the submission of requirements to contracting, consolidating or dividing requirements, analyzing the market, and determining patterns for the phased placement of orders to avoid unnecessary production fluctuations and meet the needs of requiring departments at the lowest price);
(b) Purchasing;
(c) Performing or assigning contract administration, including follow up and expediting of inspection and transportation; and
(d) Obtaining licenses under patents and settling patent infringement claims arising out of the acquisition. (Acquiring departments must obtain approval from the department whose funds are to be charged for obtaining licenses or settling claims.)
The requiring department is responsible for—
(a) Ensuring compliance with the order of priority in FAR 8.001 for use of Government supply sources before submitting a requirement to the acquiring department for contracting action.
(b) Providing the acquiring department—
(1) The complete and certified documentation required by FAR 6.303-2(b). A requiring department official, equivalent to the appropriate level in FAR 6.304, must approve the documentation before submission of the military interdepartmental purchase request (MIPR) to the acquiring department;
(2) Any additional supporting data which the acquiring department contracting officer requests (e.g., the results of any market survey or why none was conducted, and actions the requiring department will take to overcome barriers to competition in the future);
(3) The executed determination and findings required by FAR 6.302-7(c)(1);
(4) When a requiring department requests an acquiring department to contract for supplies or services using full and open competition after exclusion of sources, all data required by FAR 6.202(b)(2);
(5) When the requiring department specifies a foreign end product, any determinations required by part 225 or FAR part 25;
(6) A complete definition of the requirements, including a list (or copies) of specifications, drawings, and other data required for the acquisition. The requiring department need not furnish Federal, military, departmental, or other specifications or drawings or data which are available to the acquiring department;
(7) Justification required by FAR 17.205(a) for any option quantities requested;
(8) A statement as to whether used or reconditioned material, former Government surplus property, or residual inventory will be acceptable, and if so—
(i) A list of any supplies that need not be new; and
(ii) The basis for determining the acceptability of such supplies, including an analysis of the factors at FAR 10.010(b);
(9) A statement as to whether the acquiring department may exceed the total MIPR estimate, and if so, by what amount;
(10) Unless otherwise agreed between the departments, an original and six copies of each MIPR and its attachments (except specifications, drawings, and other data); and
(11) A list of all persons who have had access to proprietary or source selection information (see FAR 3.104-9(e)).
(a) All items assigned for IMM must be acquired from the IMM manager except—
(1) Items purchased under circumstances of unusual and compelling urgency as defined in FAR 6.302-2. After such a purchase is made, the requiring activity must send one copy of the contract and a statement of the emergency to the IMM manager;
(2) Items for which the IMM manager assigns a supply system code for local
(3) When purchase by the requiring activity is in the best interest of the Government in terms of the combination of quality, timeliness, and cost that best meets the requirement. This exception does not apply to items—
(i) Critical to the safe operation of a weapon system;
(ii) With special security characteristics; or
(iii) Which are dangerous (e.g., explosives, munitions).
(b) When an item assigned for IMM is to be acquired by the requiring activity under paragraph (a)(3) of this subsection, the contracting officer must—
(1) Document the contract file with a statement of the specific advantage of local purchase for an acquisition exceeding the micro-purchase threshold in FAR part 2; and
(2) Ensure that a waiver is obtained from the IMM manager before initiating an acquisition exceeding the simplified acquisition threshold in FAR part 2, if the IMM assignment is to the General Services Administration (GSA), the Defense Logistics Agency (DLA), or the Army Materiel Command (AMC). Submit requests for waiver to—
Requiring departments must submit to the acquiring department all contracting requirements for items assigned for coordinated acquisition, except—
(a) Items obtained through the sources in FAR 8.001(a)(1) (i) through (vii);
(b) Items obtained under 208.7003-1(a);
(c) Requirements not in excess of the simplified acquisition threshold in FAR part 2, when contracting by the requiring department is in the best interest of the Government;
(d) In an emergency. When an emergency purchase is made, the requiring department must send one copy of the contract and a statement of the emergency to the contracting activity of the acquiring department;
(e) Requirements for which the acquiring department's contracting activity delegates contracting authority to the requiring department;
(f) Items in a research and development stage (as described in FAR part 35). Under this exception, the military departments may contract for research and development requirements, including quantities for testing purposes and items undergoing in-service evaluation (not yet in actual production, but beyond prototype). Generally, this exception applies only when research and development funds are used.
(g) Items peculiar to nuclear ordnance material where design characteristics or test-inspection requirements are controlled by the Department of Energy (DoE) or by DoD to ensure reliability of nuclear weapons.
(1) This exception applies to all items designed for and peculiar to nuclear ordnance regardless of agency control, or to any item which requires test or inspection conducted or controlled by DoE or DoD.
(2) This exception does not cover items used for both nuclear ordnance and other purposes if the items are not subject to the special testing procedures.
(h) Items to be acquired under FAR 6.302-6 (national security requires limitation of sources);
(i) Items to be acquired under FAR 6.302-1 (supplies available only from the original source for follow-on contract);
(j) Items directly related to a major system and which are design controlled by and acquired from either the system manufacturer or a manufacturer of a major subsystem;
(k) Items subject to rapid design changes, or to continuous redesign or modification during the production and/or operational use phases, which require continual contact between industry and the requiring department to ensure that the item meets the requirements:
(1) This exception permits the requiring department to contract for items of highly unstable design. For use of this exception, it must be clearly impractical, both technically and contractually, to refer the acquisition to the acquiring department. Anticipation that contracting by negotiation will be appropriate, or that a number of design changes may occur during contract performance is not in itself sufficient reason for using this exception.
(2) This exception also applies to items requiring compatibility testing, provided such testing requires continual contact between industry and the requiring department;
(l) Containers acquired only with items for which they are designed;
(m) One-time buy of a noncataloged item.
(1) This exception permits the requiring departments to contract for a nonrecurring requirement for a noncataloged item. This exception could cover a part or component for a prototype which may be stock numbered at a later date.
(2) This exception does not permit acquisitions of recurring requirements for an item, based solely on the fact that the item is not stock numbered, nor may it be used to acquire items which have only slightly different characteristics than previously cataloged items.
(a) Requiring departments send their requirements to acquiring departments on either a DD Form 448, Military Interdepartmental Purchase Request (MIPR), or a DD Form 416, Requisition for Coal, Coke or Briquettes. A MIPR or a DD Form 416 is the acquiring department's authority to acquire the supplies or services on behalf of the requiring department.
(b) The acquiring department is authorized to create obligations against the funds cited in a MIPR without further referral to the requiring department. The acquiring department has no responsibility to determine the validity of a stated requirement in an approved MIPR, but it should bring apparent errors in the requirement to the attention of the requiring department.
(c) Changes that affect the contents of the MIPR must be processed as a MIPR amendment regardless of the status of the MIPR. The requiring department may initially transmit changes electronically or by some other expedited means, but must confirm changes by a MIPR amendment.
(d) The requiring department must submit requirements for additional line items of supplies or services not provided for in the original MIPR as a new MIPR. The requiring department may use a MIPR amendment for increased quantities only if—
(1) The original MIPR requirements have not been released for solicitation; and
(2) The acquiring department agrees.
(a) Acquiring departments formally accept a MIPR by DD Form 448-2, Acceptance of MIPR, as soon as practicable, but no later than 30 days after receipt of the MIPR. If the 30 day time limit cannot be met, the acquiring department must inform the requiring department of the reason for the delay, and the anticipated date the MIPR will be accepted. The acquiring department must accept MIPRs in writing before expiration of the funds.
(b) The acquiring department in accepting a MIPR will determine whether to use Category I (reimbursable funds citation) or Category II (direct funds citation) methods of funding.
(1) Category I method of funding is used under the following circumstances and results in citing the funds of the acquiring department in the contract—
(i) Delivery is from existing inventories of the acquiring department;
(ii) Delivery is by diversion from existing contracts of the acquiring department;
(iii) Production or assembly is through Government work orders in Government-owned plants;
(iv) Production quantities are allocated among users from one or more contracts, and the identification of specific quantities of the end item to individual contracts is not feasible at the time of MIPR acceptance;
(v) Acquisition of the end items involves separate acquisition of components to be assembled by the acquiring department;
(vi) Payments will be made without reference to deliveries of end items (e.g., cost-reimbursement type contracts and fixed price contracts with progress payment clauses); or
(vii) Category II method of funding is not feasible and economical.
(2) Category II method of funding is used in circumstances other than those in paragraph (b)(1) of this subsection. Category II funding results in citation of the requiring department's funds and MIPR number in the resultant contract.
(c) When the acquiring departments accepts a MIPR for Category I funding—
(1) The DD Form 448-2, Acceptance of MIPR, is the authority for the requiring department to record the obligation of funds;
(2) The acquiring department will annotate the DD Form 448-2 if contingencies, price revisions, or variations in quantities are anticipated. The acquiring department will periodically advise the requiring department, prior to submission of billings, of any changes in the acceptance figure so that the requiring department may issue an amendment to the MIPR, and the recorded obligation may be adjusted to reflect the current price;
(3) If the acquiring department does not qualify the acceptance of a MIPR for anticipated contingencies, the price on the acceptance will be final and will be billed at time of delivery;
(4) Upon receipt of the final billing (SF 1080, Voucher for Transferring Funds), the requiring department may adjust the fiscal records accordingly without authorization from or notice to the acquiring department.
(d) When the MIPR is accepted for Category II funding, a conformed copy of the contract (see 204.802(1)(ii)) is the authority to record the obligation. When all awards have been placed to satisfy the total MIPR requirement, any unused funds remaining on the MIPR become excess to the acquiring department. The acquiring department will immediately notify the requiring department of the excess funds by submitting an Acceptance of MIPR (DD Form 448-2). This amendment is authorization for the requiring department to withdraw the funds. The acquiring department is prohibited from further use of such excess funds.
(e) When the acquiring department requires additional funds to complete the contracting action for the requiring department, the request for additional funds must identify the exact items involved, and the reason why additional funds are required. The requiring department shall act quickly to—
(1) Provide the funds by an amendment of the MIPR; or
(2) Reduce the requirements.
(f) The accepting activity of the acquiring department shall remain responsible for the MIPR even though that activity may split the MIPR into segments for action by other contracting activities.
(a) An advance MIPR is an unfunded MIPR provided to the acquiring department in advance of the funded MIPR so that initial steps in planning the contract action can begin at an earlier date.
(b) In order to use an advance MIPR, the acquiring department and the requiring department must agree that its use will be beneficial. The departments
(c) The requiring department shall not release an advance MIPR to the acquiring department without obtaining proper internal approval of the requirement.
(d) When advance MIPRs are used, mark “ADVANCE MIPR” prominently on the DD Form 448.
(e) For urgent requirements, the advance MIPR may be transmitted electronically.
(f) On the basis of an advance MIPR, the acquiring department may take the initial steps toward awarding a contract, such as obtaining internal coordination and preparing an acquisition plan. Acquiring departments may determine the extent of these initial actions but shall not award contracts on the basis of advance MIPRs.
(a) Unless otherwise agreed between the departments, May 31 is the cutoff date for the receipt of MIPRs citing expiring appropriations which must be obligated by September 30 of that fiscal year. If circumstances arise which require the submission of MIPRs citing expiring appropriations after the cutoff date, the requiring department will communicate with the acquiring department before submission to find out whether the acquiring department can execute a contract or otherwise obligate the funds by the end of the fiscal year. Acquiring departments will make every effort to obligate funds for all such MIPRs accepted after the cutoff date. However, acceptance of a late MIPR does not constitute assurance by the acquiring department that all such funds will be obligated.
(b) Nothing in these instructions is intended to restrict the processing of MIPRs when the acquiring department is capable of executing contracts or otherwise obligating funds before the end of the fiscal year.
(c) The May 31 cutoff date does not apply to MIPRs citing continuing appropriations.
On August 1, the acquiring department will advise the requiring department of any Category II MIPRs on hand citing expiring appropriations they will be unable to obligate prior to the fund expiration date. If an unforeseen situation develops after August 1 which will prevent execution of a contract, the acquiring department will notify the requiring department as quickly as possible and return the MIPR. The letter of transmittal returning the MIPR will authorize purchase by the requiring department and state the reason that the acquisition could not be accomplished.
(a)
(b)
(1) If the acquiring department has not entered into a contract for the supplies or services to be cancelled, the acquiring department will immediately notify the requiring department. Upon receipt of such notification, the requiring department shall initiate a MIPR amendment to revoke the estimated amount shown on the original MIPR for the cancelled items.
(2) If the items to be cancelled have already been placed under contract—
(i) As soon as practicable, but in no event more than 45 days after receipt
(ii) The termination contracting officer (TCO) will review the proceedings at least every 60 days to reassess the Government's probable obligation. If any additional funds are excess to the probable settlement requirements, or if it appears that previous release of excess funds will result in a shortage of the amount which will be required for settlement, the TCO will promptly notify the contracting office which will amend the termination data letter. The requiring department will process a MIPR amendment to reflect the reinstatement of funds within 30 days after receiving the amended termination data letter.
(iii) Upon receipt of a copy of the termination settlement agreement, the requiring department will prepare a MIPR amendment, if required, to remove any remaining excess funds.
(a) When the acquiring department terminates a contract for default, they will ask the requiring department if the supplies or services to be terminated are still required so that repurchase action can be started.
(b) The requiring department will not deobligate funds on a contract terminated for default until receipt of a settlement modification or other written evidence from the acquiring department authorizing release of funds.
(c) On the repurchase action, the acquiring department will not exceed the unliquidated funds on the defaulted contract without receiving additional funds from the requiring department.
The requiring department will advise the acquiring department or the transportation officer in the contract administration office of the fund account to be charged for transportation costs. The requiring department may cite the fund account on each MIPR or provide the funding cite to the transportation officer at the beginning of each fiscal year for use on Government bills of lading. When issuing a Government bill of lading, show the requiring department as the department to be billed and cite the appropriate fund account.
(a) The acquiring department will maintain a system of MIPR follow up to inform the requiring department of the current status of its requests. In addition, the contract administration office will maintain a system of follow up in order to advise the acquiring department on contract performance.
(b) If requested by the requiring department, the acquiring department will furnish the requiring department a copy of the solicitation when the MIPR is satisfied through Category II funding.
(c) Any reimbursement billings, shipping document, contractual documents, project orders, or related documentation furnished to the requiring department will identify the requiring department's MIPR number, quantities of items, and funding information.
The acquiring department bears the administrative costs of acquiring supplies for the requiring department. However, when an acquisition responsibility is transferred to another department, funds appropriated or to be appropriated for administrative costs will transfer to the successor acquiring department. The new acquiring department must assume budget cognizance as soon as possible.
Instructions on preparation and use of DD Form 448, Military Interdepartmental Purchase Request, and DD Form 448-2, Acceptance of MIPR, are in 253.208.
See appendix B for coordinated acquisition assignments.
NASA is authorized by Public Law 85-568 to use the acquisition services, personnel, equipment, and facilities of DoD departments and agencies with their consent, with or without reimbursement, and on a similar basis to cooperate with the departments/agencies in the use of acquisition services, equipment, and facilities.
Departments and agencies will—
(a) Cooperate fully with NASA in making acquisition services, equipment, personnel, and facilities available on the basis of mutual agreement.
(b) Not claim reimbursement for administrative costs incident to acquisitions for NASA, unless agreed otherwise prior to the time services are performed.
(a) When contracting or performing field service functions for NASA, the departments and agencies will use their own methods, except when otherwise required by the terms of the agreement.
(b) Departments and agencies normally will use their own funds when contracting for or performing services for NASA and will not cite NASA funds on any defense obligation or payment document.
(a) NASA will use NASA Form 523, NASA-Defense Purchase Request, to request acquisition of supplies or services.
(b) Except as provided in paragraph (d) of this section, departments and agencies will respond within 30 days to a NASA purchase request by forwarding DD Form 448-2, Acceptance of MIPR. Forward each DD Form 448-2 in quadruplicate and indicate action status as well as the name and address of the DoD acquisition activity for future use by the NASA initiator.
(c) To the extent feasible, all documents related to the NASA action will reference the NASA-Defense Purchase Request number and the item number when appropriate.
(d) Departments and agencies are not required to accept NASA-Defense Purchase Requests for common-use standard stock items which the supplying department has on hand or on order for prompt delivery at published prices.
When a department or agency determines that the estimated total price (Block 6F, NASA Form 523) for NASA items is not sufficient to cover the required reimbursement, or is in excess of the amount required, the department/agency will forward a request for amendment to the NASA originating office. Indicate in the request a specific dollar amount, rather than a percentage, and include justification for any upward adjustment requested. Upon approval of a request, NASA will forward an amendment of its purchase request to the contracting activity.
Departments and agencies will submit SF 1080, Voucher for Transferring
As used in this subpart—
(a) Under the Industrial Preparedness Production Planning (IPPP) program, DoD components and industry work together to ensure essential military items are available during an emergency.
(b) Departments and agencies select weapon systems and items for planning in accordance with DoDI 4005.3, Industrial Preparedness Planning. Planning is conducted only with U.S. or Canadian sources.
(c) The use of privately-owned facilities is preferred to minimize the need for Government investment. Departments and agencies will include Government-owned production facilities in the industrial base only when—
(1) Private industry is unable to provide the facilities necessary to support DoD requirements; or
(2) The facilities are necessary—
(i) For reasons of national security; or
(ii) To ensure a quick response capability to meet fluctuating demands.
Authority under current contracting procedures to accomplish industrial planning actions includes—
(a) Leasing of Government-owned property to planned emergency producers under the authority of the Military Leasing Act of 1947, 10 U.S.C. 2667;
(b) Acquisitions in the interest of national defense under FAR 6.202(a)(2), or in case of a national emergency or to achieve industrial mobilization under FAR 6.302-3;
(c) Acquisition of items restricted under 225.7010 and 225.71;
(d) Use of multiyear contracting (FAR subpart 17.1);
(e) Providing Government production and research property to contractors; and
(f) Use of direct payment for idle facilities or idle capacities reserved for defense mobilization production (FAR 31.205-17(d)).
(a) Except as otherwise provided in FAR or DFARS, solicit planned producers for all acquisitions of their planned items, when the acquisition exceeds the simplified acquisition threshold.
(b) The contracting officer may contract for industrial planning efforts for selected essential military items. These efforts may include, but are not limited to, the maintenance of Government-owned industrial facilities (real and personal property) or production
As used in this subpart—
DoD policy is for maximum participation in the Precious Metals Recovery Program (PMRP). DoD components shall furnish recovered precious metals contained in the DISC inventory to production contractors rather than use contractor-furnished precious metals whenever the contracting officer determines it to be in the Government's best interest. (See DoDD 4160.22, Recovery and Utilization of Precious Metals.)
(a) Item managers and contracting officers will use the PMIC and/or other relevant data furnished with a purchase request to determine the applicability of this subpart.
(b) When an offeror advises of a precious metals requirement, the contracting officer shall use the procedures in chapter X of DoD 4160.21-M, Defense Utilization and Disposal Manual, to determine availability of required precious metal assets and current government-furnished materiel (GFM) unit prices. If the precious metals are available, the contracting officer shall evaluate offers and award the contract on the basis of the offer which is in the best interest of the Government.
(c) When the clause prescribed by 208.7305 is included in a solicitation, the contracting officer will ensure that section B, Schedule of Supplies or Services and Prices, is structured to—
(1) Permit insertion of alternate prices for each deliverable contract line item number that uses precious metals; and
(2) Use dual pricing evaluation procedures.
The following refined precious metals are currently managed by DISC:
(a) Use the clause at 252.208-7000, Intent to Furnish Precious Metals as Government-Furnished Material, in all solicitations and contracts except—
(1) When the contracting officer has determined that the required precious metals are not available from DISC;
(2) When the contracting officer knows that the items being acquired do not require precious metals in their manufacture; or
(3) For acquisitions at or below the simplified acquisition threshold.
(b) To make the determination in paragraph (a)(1) of this section, the contracting officer shall consult with the end item inventory manager and comply with the procedures in Chapter X, DoD 4160.21-M, Defense Utilization and Disposal Manual.
41 U.S.C. 421 and 48 CFR chapter 1.
“Entity controlled by a foreign government,” “foreign government,” and “proscribed information,” are defined in the provision at 252.209-7002, Disclosure of Ownership or Control by a Foreign Government.
(a)(i) Do not deny award to contractors subject to on-site inspection under the Intermediate-Range Nuclear Forces (INF) Treaty, or similar treaty, due to the actual or potential presence of Soviet inspectors at the contractor's facility unless—
(A) Necessary for reasons of national security;
(B) The decision is based on full information, including comment from the potential contractor or subcontractor on the security issues involved; and
(C) The department or agency acquisition executive reviews the decision and the Under Secretary of Defense (Acquisition & Technology) approves the decision.
(ii) Make any decision to deny consideration for award under paragraph (a)(i) of this section as early as possible in the acquisition process. Notify the firm in writing of any decision not to consider the firm for award of a contract or subcontract.
(c) The additional cost of contract administration and audit due to a contractor's performance risk may be considered in evaluating the contractor's price.
Use the clause at 252.209-7000, Acquisition from Subcontractors Subject to
(e) For cost-reimbursement or incentive type contracts, or contracts which provide for progress payments based on costs or on a percentage or stage of completion, the prospective contractor's accounting system and related internal controls must provide reasonable assurance that—
(i) Applicable laws and regulations are complied with;
(ii) The accounting system and cost data are reliable;
(iii) Risk of misallocations and mischarges are minimized; and
(iv) Contract allocations and charges are consistent with invoice procedures.
(g)(i)
(
(
(
(
(B) The Secretary of Defense may waive the prohibition in paragraph (g)(i)(A) of this subsection in accordance with 10 U.S.C. 2327(c). This waiver authority may not be delegated.
(ii)
(B) Whenever the contracting officer has a question about application of the provision at 252.209-7002, the contracting officer may seek advice from the Director, Defense Security Programs, Office of the Assistant Secretary of Defense for Command, Control, Communications and Intelligence.
(C) In accordance with 10 U.S.C. 2536(b)(1)(A), the Secretary of Defense may waive the prohibition in paragraph (g)(ii)(A) of this subsection upon determining that the waiver is essential to the national security interest of the United States. The Secretary has delegated authority to grant this waiver to the Assistant Secretary of Defense Command, Control, Communications and Intelligence. Waiver requests, prepared by the requiring activity in coordination with the contracting officer, shall be processed through the Director of Defense Procurement, Office of the Under Secretary of Defense (Acquisition & Technology), and shall include a proposed national interest determination. The proposed national interest determination, prepared by the requiring activity in coordination with the contracting officer, shall include:
(
(
(
(
(
(D) In accordance with 10 U.S.C. 2536(b)(1)(B), the Secretary of Defense may, in the case of a contract awarded for environmental restoration, remediation, or waste management at a DoD
(
(
(
(
(iii) A contracting officer shall not enter into or renew a contract with a contractor that is subject to the reporting requirements of 38 U.S.C. 4212(d) pertaining to employment of veterans, but has not submitted the most recent report required by 38 U.S.C. 4212(d) for 1997 or a subsequent year (see 222.1304(b)).
Generally, the Canadian Commercial Corporation's (CCC) proposal of a firm as its subcontractor is sufficient basis for an affirmative determination of responsibility. However, when the CCC determination of responsibility is not consistent with other information available to the contracting officer, the contracting officer shall request from CCC and any other sources whatever additional information is necessary to make the responsibility determination.
(a) Use the provision at 252.209-7001, Disclosure of Ownership or Control by the Government of a Terrorist Country, in all solicitations expected to result in contracts of $100,000 or more. Any disclosure that the government of a terrorist country has a significant interest in an offeror or a subsidiary of an offeror shall be forwarded through the head of the agency to the Director, Defense Procurement, ATTN: OUSD(A&T)DP/FC, 3060 Defense Pentagon, Washington, DC 20101-3060.
(b) Use the provision at 252.209-7002, Disclosure of Ownership or Control by a Foreign Government, in all solicitations, including those subject to the procedures in FAR part 13, when access to proscribed information is necessary to perform a DoD contract under a national security program.
(c) Use the provision at 252.209-7003, Compliance with Veterans’ Employment Reporting Requirements, in solicitations with a value estimated to exceed the simplified acquisition threshold.
(a) If a preaward survey is requested, include the rationale in block 23 of the SF 1403, Preaward Survey of Prospective Contractor (General).
(1) The surveying activity is the cognizant contract administration office as listed in DLAH 4105.4, DoD Directory of Contract Administration Services Components. When information is required as part of the survey on the adequacy of the contractor's accounting system or its suitability for administration of the proposed type of contract, the surveying activity will obtain the information from the auditor.
(2) Limited information may be requested by telephone.
(3) The contracting officer may request a formal survey by telephone but must confirm immediately with SF 1403, Preaward Survey of Prospective Contractor (General). For a formal survey, send original and three copies of SF 1403, including necessary drawings and specifications.
(a) List additional factors in item H, section III of the SF 1403 and explain them in block 23. For example—
(i) Information needed to determine a prospective contractor's eligibility under the Walsh-Healey Public Contracts Act. (Note that the Walsh-Healey Public Contracts Act, block 12 of section I, only indicates what the contractor has represented its classification to be under Walsh-Healey.)
(ii) Evaluation of a contractor as a planned producer when the offered item is or may appear on the Industrial Preparedness Planning List (IPPL). When the preaward survey results in a recommendation for award, ask the office responsible for industrial preparedness planning to consider designating the prospective contractor as a planned producer. If the item is already on the IPPL or the prospective contractor is already a planned producer, note the information in block 23.
(iii) Evaluation of the prospective contractor's performance against small business subcontracting plans.
(c) On base level preaward surveys, technical personnel from the requiring installation should participate when there is concern about the ability of a prospective contractor to perform a base level service or construction contract.
(d) Allow more time for—
(i) Complex items;
(ii) New or inexperienced DoD contractors; and
(iii) Surveys with time-consuming requirements, e.g., secondary survey, accounting system review, financial capability analysis, or purchasing office participation.
(e) Only request those factors essential to the determination of responsibility. See 253.209-1(a) for an explanation of the factors in section III, blocks 19 and 20 of the SF 1403.
(a)(1) The inclusion of qualification requirements in specifications for products which are to be included on a Qualified Products List, or manufactured by business firms included on a Qualified Manufacturers List, requires approval by the departmental standardization office in accordance with DoD Manual 4120.3-M, Defense Standardization Program Policies and Procedures. The inclusion of other qualification requirements in an acquisition or group of acquisitions requires approval by the chief of the contracting office.
(d) The contracting officer may require that first articles be manufactured using the same facilities, production processes, methods, and materials to be used for production units under the contract.
The contracting officer may give this authorization to a contractor only after approval by a level higher than the contracting officer.
(a)(1) To be sure that the contractor and the Government clearly understand and interpret contract terms and conditions in the same manner, avoid describing first article requirements exclusively in general terms such as “visual,” “dimensional,” “workmanship,” or “specification compliance.”
Alternate I of the clauses at FAR 52.209-3, First Article Approval—Contractor Testing, or 52.209-4, First Article Approval—Government Testing, as appropriate, may be used when—
(1) The form, fit, or function of the product would be adversely affected by contractor changes in the production facilities, processes, methods, or materials subsequent to first article approval; and
(2) The Government has relied upon first article testing in the absence of complete design specifications to supplement a performance specification; or
(3) It is essential to have an approved first article to serve as a manufacturing standard.
(d) The uniform suspension and debarment procedures to be followed by all debarring and suspending officials are set out in appendix H to this chapter.
(e) The department or agency shall provide a copy of the Debarment and Suspension Procedures at DFARS appendix H to this chapter to contractors at the time of their suspension or when they are proposed for debarment, and upon request to other interested parties.
(2) Overseas debarring officials—
(i) Are authorized to debar or suspend contractors located within the official's geographic area of responsibility under any delegation of authority they receive from their agency head.
(ii) Debar or suspend in accordance with the procedures in FAR subpart 9.4 or under modified procedures approved by the agency head based on consideration of the laws or customs of the foreign countries concerned.
(iii) In addition to the bases for debarment in FAR 9.406-2, may consider the following additional bases—
(A) The foreign country concerned determines that a contractor has engaged in bid-rigging, price-fixing, or other anti-competitive behavior; or
(B) The foreign country concerned declares the contractor to be formally debarred, suspended, or otherwise ineligible to contract with that foreign government or its instrumentalities.
Under 10 U.S.C. 2393b, when a department or agency determines that a compelling reason exists for it to conduct business with a contractor that is on the list of parties excluded from procurement programs, it shall provide written notice of the determination to the General Services Administration, Office of Acquisition Policy. Examples of compelling reasons are—
(1) Only a listed contractor can provide the supplies or services;
(2) Urgency requires contracting with a listed contractor;
(3) The contractor and a department or agency have an agreement covering the same events which resulted in the listing and the agreement includes the department/agency decision not to debar or suspend the contractor; or
(4) The national defense requires continued business dealings with the listed contractor.
(b) Unless the agency head makes a written determination that a compelling reason exists to do so, ordering activities shall not—
(i) Place orders exceeding the guaranteed minimum under indefinite quantity contracts: or
(ii) When the agency is an optional user, place orders against Federal Supply Schedule contracts.
(c) This includes exercise of options.
(a) The contracting officer shall not consent to any subcontract with a firm, or a subsidiary of a firm, that is identified by the Secretary of Defense as being owned or controlled by the government of a terrorist country unless the agency head states in writing the compelling reasons for the subcontract.
(a)(i) When the debarring official decides that debarment is not necessary, the official may require the contractor to enter into a written agreement which includes—
(A) A requirement for the contractor to establish, if not already established, and to maintain the standards of conduct and internal control systems prescribed by subpart 203.70; and
(B) Other requirements the debarring official considers appropriate.
(ii) Before the debarring official decides not to suspend or debar in the case of an indictment or conviction for a felony, the debarring official must determine that the contractor has addressed adequately the circumstances that gave rise to the misconduct, and that appropriate standards of ethics and integrity are in place and are working.
(a) Any person shall be considered for debarment if criminally convicted of intentionally affixing a label bearing a “Made in America” inscription to any product sold in or shipped to the United States that was not made in America (10 U.S.C. 2410f).
(i) The debarring official will make a determination concerning debarment not later than 90 days after determining that a person has been so convicted.
(ii) In cases where the debarring official decides not to debar, the debarring official will report that decision to the Director of Defense Procurement who will notify Congress within 30 days after the decision is made.
(a)
(A) A contractor has committed, or is suspected of having committed, any of the acts described in FAR 9.406-2 and 9.407-2;
(B) FAR 49.106 requires a report;
(C) Part 203 requires a report;
(D) The Government suspects a contractor of violating the Buy American Act (see FAR 25.204); or
(E) The Government suspects a contractor of attempting to evade the prohibitions of debarment or suspension by changes of address, multiple addresses, formation of new companies, or by other devices.
(ii) Include the following information, when available, in the report required by paragraph (a)(i) of this subsection—
(A) Name, address, and telephone number of the point of contact for the activity making the report;
(B) Name, contractor and Government entity (CAGE) code, and address of the contractor;
(C) Name and addresses of the members of the board, principal officers, partners, owners, and managers;
(D) Name and addresses of all known affiliates, subsidiaries, or parent firms, and the nature of the business relationship;
(E) For each contract affected by the conduct being reported—
(
(
(
(
(
(
(
(
(F) For any other contracts outstanding with the contractor or any of its affiliates—
(
(
(
(
(
(G) A complete summary of all pertinent evidence and the status of any legal proceedings involving the contractor;
(H) An estimate of any damages sustained by the Government as a result of the contractor's action (explain how the estimate was calculated);
(I) The comments and recommendations of the contracting officer and of each higher level contracting review authority regarding—
(
(
(
(
(J) When appropriate, as an enclosure to the report—
(
(
(
(
(
(iii) Send three copies of each report, including enclosures, to the debarring official in 209.403.
Use the clause at 252.209-7004, Subcontracting with Firms That Are Owned or Controlled by the Government of a Terrorist Country, in solicitations and contracts with a value of $100,000 or more.
(a)(1) Section 558 of the National Defense Authorization Act for Fiscal Year 1995 (Public Law 103-337) provides that no funds available to DoD may be provided by grant or contract to any institution of higher education that has a policy of denying or that effectively prevents the Secretary of Defense from obtaining for military recruiting purposes—
(i) Entry to campuses or access to students on campuses; or
(ii) Access to directory information pertaining to students.
(2) Section 541 of the National Defense Authorization Act for Fiscal Year 1996 (10 U.S.C. 983) provides that no funds appropriated or otherwise available to DoD may be obligated by contract or by grant, including a grant of funds to be available for student aid, to any institution of higher education that, as determined by the Secretary of Defense, has an anti-ROTC policy and at which, as determined by the Secretary, the Secretary would otherwise maintain or seek to establish a unit of the Senior Reserve Officer Training Corps, or at which the Secretary would otherwise enroll or seek to enroll students for participation in a unit of the Senior Reserve Officer Training Corps at another nearby institution of higher education. This prohibition applies to new contracts and all contract modifications. (See 243.105.) This prohibition shall cease to apply to that institution upon a determination by the Secretary that the institution no longer has an anti-ROTC policy.
(b) Institutions of higher education that are determined under 32 CFR part 216 to have the policy or practice in paragraph (a)(1) or (a)(2) of this subsection shall be listed as ineligible on the List of Parties Excluded from Federal Procurement and Nonprocurement Programs published by the General Services Administration. (See FAR 9.404.)
(c) In cases where a determination is made under 32 CFR part 216 that specific subordinate elements of an institution of higher education, rather than the institution as a whole, have the policy or practice in paragraph (a)(1) or (a)(2) of this subsection, 32 CFR part 216 provides that the prohibition on use of DoD funds applies only to those subordinate elements.
(a) Agencies shall not solicit offers from, award contracts to, or consent to subcontracts with ineligible contractors.
(b) After a determination of ineligibility under 209.470-1(a)(1), departments and agencies shall make no further payments under existing contracts with the institutions, and shall initiate termination action.
Use the clause at 252.209-7005, Military Recruiting on Campus, in all solicitations and contracts with institutions of higher education.
In accordance with Section 8118 of Pub. L. 105-262, do not award a contract to, extend a contract with, or approve the award of a subcontract to any entity that, within the preceding 15 years, has been convicted under 18 U.S.C. 704 of the unlawful manufacture or sale of the Congressional Medal of Honor. Any entity so convicted will be listed as ineligible on the List of Parties Excluded from Federal Procurement and Nonprocurement Programs published by the General Services Administration.
41 U.S.C. 421 and 48 CFR Chapter 1.
All systems acquisition programs in the DoD are subject to the acquisition streamlining policies and procedures in DoDI 5000.2, Defense Acquisition Management Policies and Procedures.
Use the clause at 252.211-7000, Acquisition Streamlining, in all solicitations and contracts for systems acquisition programs.
(a) The DoD index of data item descriptions is DoD 5010.12-L, Acquisition Management Systems and Data Requirements Control List (AMSDL).
(b) Also, furnish data item descriptions that are not listed in the AMSDL, except when it is not feasible, e.g., documents are bulky or only a limited number of copies are available at the contracting activity.
(d) The AMSDL, all unclassified specifications and standards listed in the DODISS, and data item descriptions listed in the AMSDL also may be obtained from the Department of Defense Single Stock Point (DoDSSP), Building 4, Section D, 700 Robbins Avenue, Philadelphia, PA 19111-5094; telephone (215) 697-2179; http://assist.daps.mil. Include with the request—
(i) The requester's customer number; and
(ii) Complete return mailing address, including any “mark for” instructions.
(c) When contract performance requires use of specifications and standards which are not listed in the DODISS and data item descriptions which are not listed in the AMSDL, use provisions, as appropriate, substantially the same as those at 252.211-7001, Availability of Specifications and Standards Not Listed in DODISS, Data Item Descriptions Not Listed in DoD 5010.12-L, and Plans, Drawings, and Other Pertinent Documents, and 252.211-7002, Availability for Examination of Specifications, Standards, Plans, Drawings, Data Item Descriptions, and Other Pertinent Documents.
When a “brand name or equal” purchase description is used—
(a) The purchase description—
(1) Should include a complete common generic identification of the item.
(2) Should reference all known acceptable brand name products, to include—
(i) Name of manufacturer, producer, or distributor of each brand name product referenced (and address if not well known); and
(ii) Model, make, or catalog number for each, and identity of the commercial catalog in which it appears.
(3) May, if necessary to adequately describe an item, use a commercial catalog description or an extract from the catalog. Ensure that a copy of each catalog referenced (except parts catalogs) is available at the contracting office for review by offerors.
(4) Should give prospective offerors the opportunity to offer products other than those specifically referenced by brand name, as long as they meet the needs of the Government in essentially the same manner as the brand name product.
(5) Must identify those salient physical, functional, or other characteristics which are essential to the needs of the Government.
(b) The solicitation—
(1) Shall be at or below the simplified acquisition threshold in FAR part 13.
(2) May require bid samples for “or equal” offers, but not for “brand name” offers.
(3) Must provide for full consideration and evaluation of “or equal” offers against the salient characteristic specified in the purchase description. Do not reject offers for minor differences in design, construction, or features which do not affect the suitability of the product for its intended use.
(4) Must include the following immediately after the item description—Offering:
(c) The contract shall—
(1) Not exceed the simplified acquisition threshold in FAR part 13.
(2) Identify, or incorporate by reference an identification of the specific products the contractor is to furnish. Include any brand name, make or model number, descriptive material, and any modifications of brand name products specified in the offer.
(a) When a brand name or equal purchase description is included in a solicitation at or below the simplified acquisition threshold in FAR part 13, use the provision at 252.211-7003, Brand Name or Equal.
(b) When component parts of an end item are described by brand name or equal purchase descriptions and application of the provision at 252.211-7003 to some or all of the components is impracticable, either do not use the provision or limit its application to specified components.
(a)
(b)
(i) The evaluation must be carried out within 60 days after the first modification or extension.
(ii) No further modification or extension may be made to the contract until the evaluation is complete.
(2) If, as a result of this evaluation, it is determined that an economically feasible substitute substance or alternative technology is available, the contracting officer shall modify the contract to require the use of the substitute substance or alternative technology.
(3) If a substitute substance or alternative technology is not available, a written determination shall be made to that effect at a level no lower than a general or flag officer or member of the Senior Executive Service of the requiring activity.
Use the provision at 252.211-7004, Alternate Preservation, Packaging, and Packing, in solicitations which include military preservation, packaging, or packing specifications when it is feasible to evaluate and award using commercial or industrial preservation, packaging, or packing.
(a) Under the Single Process Initiative (SPI), DoD accepts SPI processes in lieu of specific military or Federal specifications or standards that specify a management or manufacturing process.
(b) DoD acceptance of an SPI process follows the decision of a Management Council, which includes representatives of the contractor, the Defense Contract Management Command, the Defense Contract Audit Agency, and the military departments.
(c) In procurements of previously developed items, SPI processes that previously were accepted by the Management Council shall be considered valid replacements for military or Federal specifications or standards, absent a specific determination to the contrary (see 211.273-3(c)).
(a) Solicitations for previously developed items shall encourage offerors to identify SPI processes for use in lieu of military or Federal specifications and standards cited in the solicitation. Use of the clause at 252.211-7005 satisfies this requirement.
(b) Contracting officers shall ensure that—
(1) Concurrence of the requiring activity is obtained for any proposed substitutions prior to contract award;
(2) Any necessary additional information regarding the SPI process identified in the proposal is obtained from the cognizant administrative contracting officer; and
(3) In competitive procurements, prospective offerors are provided the opportunity to obtain verification that an SPI process is an acceptable replacement for a military or Federal specification or standard for the particular procurement prior to the date specified for receipt of offers.
(c) Any determination that an SPI process is not acceptable for a specific procurement shall be made prior to
Use the clause at 252.211-7005, Substitutions for Military or Federal Specifications and Standards, in solicitations and contracts exceeding the micro-purchase threshold, when procuring previously developed items.
(b) Use the clause at FAR 52.211-12, Liquidated Damages—Construction, in all construction contracts exceeding $500,000, except cost-plus-fixed-fee contracts or contracts where the contractor cannot control the pace of the work. Use of the clause in contracts of $500,000 or less is optional.
DoD implementation of the Defense Priorities and Allocations System is in DoDD 4400.1, Defense Production Act Programs.
41 U.S.C. 421 and 48 CFR Chapter 1.
The DoD policy for acquiring technical data for commercial items is at 227.7102.
(b)(2) Paragraph (b) of the provision at FAR 52.212-3 does not apply when the solicitation includes the clause at 252.204-7004, Required Central Contractor Registration.
(f)(i) Use one of the following provisions as prescribed in part 225:
(A) 252.225-7000, Buy American Act—Balance of Payments Program Certificate.
(B) 252.225-7006, Buy American Act—Trade Agreements—Balance of Payments Program Certificate.
(C) 252.225-7020, Trade Agreements Certificate.
(D) 252.225-7035, Buy American Act—North American Free Trade Agreement Implementation Act—Balance of Payments Program Certificate.
(ii) Use the provision at 252.212-7000, Offeror Representations and Certifications—Commercial Items, in all solicitations for commercial items exceeding the simplified acquisition threshold. If an exception to 10 U.S.C. 2410i applies to a solicitation exceeding the simplified acquisition threshold
(iii) Use the clause at 252.212-7001, Contract Terms and Conditions Required to Implement Statutes or Executive Orders Applicable to Defense Acquisitions of Commercial Items, in all solicitations and contracts for commercial items, completing paragraph (b), as appropriate.
(iv) Use the clause at 252.204-7004, Required Central Contractor Registration, as prescribed in 204.7304.
(v) Use the provision at 252.225-7017, Prohibition on Award to Companies Owned by the People's Republic of China, as prescribed in 225.771.
(c)
The head of the contracting activity is the approval authority within the DoD for waivers under FAR 12.302(c).
(a) The following laws are not applicable to contracts for the acquisition of commercial items:
(i) Section 806, Public Law 102-190 (10 U.S.C. 2301 (repealed) note), Payment Protections for Subcontractors and Suppliers.
(ii) 10 U.S.C. 2306(b), Prohibition on Contingent Fees.
(iii) 10 U.S.C. 2324, Allowable Costs Under Defense Contracts.
(iv) 10 U.S.C. 2384(b), Requirement to Identify Suppliers.
(v) 10 U.S.C. 2397(a)(1), Reports by Employees or Former Employees of Defense Contractors.
(vi) 10 U.S.C. 2397b(f), Limits on Employment for Former DoD Officials.
(vii) 10 U.S.C. 2397c, Defense Contractor Requirements Concerning Former DoD Officials.
(viii) 10 U.S.C. 2408(a), Prohibition on Persons Convicted of Defense Related Felonies.
(ix) 10 U.S.C. 2410b, Contractor Inventory Accounting System Standards (see 252.242-7004).
(x) 107 Stat 1720 (Section 843(a), Public Law 103-160), Reporting Requirement Regarding Dealings with Terrorist Countries.
(xi) Domestic Content Restrictions in the National Defense Appropriations Acts for Fiscal Years 1996 and Subsequent Years.
(xii) Section 8117, Pub. L. 105-56, Restriction on Use of Funds Appropriated for Fiscal Year 1998 (see 222.1304(b)).
(c) The applicability of the following laws has been modified in regard to contracts for the acquisition of commercial items:
(i) 10 U.S.C. 2402, Prohibition on Limiting Subcontractor Direct Sales to the United States (see FAR 3.503 and 52.203-6).
(ii) 10 U.S.C. 2306a, Truth in Negotiations Act (see FAR 15.403-4).
(a) The following laws are not applicable to subcontracts at any tier for the acquisition of commercial items or commercial components:
(i) [Reserved]
(ii) Section 806, Public Law 102-190 (10 U.S.C. 2301 (repealed) note), Payment Protections for Subcontractors and Suppliers.
(iii) 10 U.S.C. 2306(b) Prohibition on Contingent Fees.
(iv) 10 U.S.C. 2313(c), Examination of Records of a Contractor.
(v) 10 U.S.C. 2320, Rights in Technical Data.
(vi) 10 U.S.C. 2321, Validation of Proprietary Data Restrictions.
(vii) 10 U.S.C. 2324, Allowable Costs Under Defense Contracts.
(viii) 10 U.S.C. 2327, Reporting Requirement Regarding Dealings with Terrorist Countries.
(ix) 10 U.S.C. 2384(b), Requirement to Identify Suppliers.
(x) 10 U.S.C. 2391 note, Notification of Substantial Impact on Employment.
(xi) 10 U.S.C. 2393, Prohibition Against Doing Business with Certain Offerors or Contractors.
(xii) 10 U.S.C. 2397(a)(1), Reports by Employees or Former Employees of Defense Contractors.
(xiii) 10 U.S.C. 2397b(f), Limits on Employment for Former DoD Officials.
(xiv) 10 U.S.C. 2397c, Defense Contractor Requirements Concerning Former DoD Officials.
(xv) 10 U.S.C. 2408(a) Prohibition on Persons Convicted of Defense Related Felonies.
(xvi) 10 U.S.C. 2410b, Contractor Inventory Accounting System Standards.
(xvii) 10 U.S.C. 2501 note, Notification of Proposed Program Termination.
(xviii) 10 U.S.C. 2534, Miscellaneous Limitations on the Procurement of Goods Other Than United States Goods.
(xix)-(xxi) [Reserved]
(xxii) Effective May 1, 1996: 10 U.S.C. 2631, Transportation of Supplies by Sea.
(xxiii) 19 U.S.C. 2512, Trade Agreements Act.
(xxiv) 41 U.S.C. 10, Buy American Act.
(xxv) 10 U.S.C. 2327 (Section 843(a), Public Law 103-160), Reporting Requirement Regarding Dealings with Terrorist Countries.
(xxvi) Domestic Content Restrictions in the National Defense Appropriations Acts for Fiscal Years 1996 and Subsequent Years.
(b) Certain requirements of the following laws have been eliminated for subcontracts at any tier for the acquisition of commercial items or commercial components:
(i) 10 U.S.C. 2393(d), Subcontractor Reports Under Prohibition Against Doing Business with Certain Offerors (see FAR 52.209-6).
(ii) 10 U.S.C. 2402, Prohibition on Limiting Subcontractor Direct Sales to the United States (see FAR 3.503 and 52.203-6).
48 U.S.C. 421 and 48 CFR Chapter 1.
(a) The restriction on use of funds appropriated for fiscal year 1998 in Section 8117 of the National Defense Appropriations Act for Fiscal Year 1998 (Pub. L. 105-56) is inapplicable to contracts at or below the simplified acquisition threshold (see 222.1304(b)).
(e) The procedures at FAR 13.106-3(e) do not apply when the contract includes the clause at 252.204-7004, Required Central Contractor Registration.
(1) Require written acceptance of purchase orders for classified acquisitions.
(2) Generally, use unilateral modifications (see FAR 43.103) for—
(i) No-cost amended shipping instructions if—
(A) The amended shipping instructions modify a unilateral purchase order; and
(B) The contractor agrees orally or in writing; and
(ii) Any change made before work begins if—
(A) The change is within the scope of the original order;
(B) The contractor agrees;
(C) The modification references the contractor's oral or written agreement; and
(D) Block 13D of Standard Form 30, Amendment of Solicitation/Modification of Contract, is annotated to reflect the authority for issuance of the modification.
(3) A supplemental agreement converts a unilateral purchase order to a bilateral agreement. If not previously included in the purchase order, incorporate the clause at 252.243-7001, Pricing of Contract Modifications, in the Standard Form 30, and obtain the contractor's acceptance by signature on the Standard Form 30.
(a) Use the clause at 252.243-7001, Pricing of Contract Modifications, in all bilateral purchase orders.
(d) When using the clause at FAR 52.213-4, delete the reference to the clause at FAR 52.225-3, Buy American Act-Supplies. Instead, if the Buy American Act applies to the acquisition, use the clause at—
(i) 252.225-7001, Buy American Act and Balance of Payments Program, as prescribed at 225.109(d); or
(ii) 252.225-7036, Buy American Act-North American Free Trade Agreement Implementation Act-Balance of Payments Program, as prescribed at 225.408(a)(vi).
(b) Individual purchases for subsistence may be made at any dollar value; however, the contracting officer must satisfy the competition requirements of FAR Part 6 for any action not using simplified acquisition procedures.
(1) As a matter of policy, DoD does not support the use of cash payments from imprest funds. This policy is based, in part, on the mandatory electronic funds transfer requirements of the Debt Collection Improvement Act of 1996 (Pub. L. 104-134).
(2) On a very limited basis, installation commanders and commanders of other activities with contracting authority may be granted authority to establish imprest funds and third party draft (accommodation check) accounts.
(3) Third party draft accounts, when established in accordance with DoD 7000.14-R, DoD Financial Management Regulation, Volume 5, Disbursing Policy and Procedures—
(i) Provide an alternative to cash and U.S. Treasury checks when the use of Government purchase or travel cards is not feasible;
(ii) Eliminate the need for cash on hand for imprest fund transactions; and
(iii) Give issuing activities the flexibility to issue low-volume and low-dollar value payment on site.
(d)(i) Use of imprest funds—
(A) Must comply with the conditions stated in—
(B) Except as provided in paragraph (d)(ii) of this subsection, requires approval by the Director for Financial Commerce, Office of the Deputy Chief Financial Officer, Office of the Under Secretary of Defense (Comptroller).
(ii) Imprest funds are authorized for use without further approval for—
(A) Overseas transactions at or below the micro-purchase threshold in support of a contingency operation as defined in 10 U.S.C. 101(a)(13) or a humanitarian or peacekeeping operation as defined in 10 U.S.C. 2302(7); and
(B) Classified transactions.
(a)(1) The micro-purchase limitation applies to all purchases, except that purchases not exceeding the simplified acquisition threshold may be made for—
(A) Aviation fuel and oil;
(B) Overseas transactions by contracting officers in support of a contingency operation as defined in 10 U.S.C. 101(a)(13) or a humanitarian or peacekeeping operation as defined in 10 U.S.C. 2302(7); and
(C) Transactions in support of intelligence and other specialized activities addressed by Part 2.7 of Executive Order 12333.
(a) If SF 1449 is not used, use DD Form 1155 in accordance with paragraph (b)(i) of this section.
(b)(i) Use DD Form 1155, Order for Supplies or Services, for purchases made using simplified acquisition procedures.
(A) The DD Form 1155 serves as a—
(B) The DD Form 1155 is also authorized for use for—
(ii) Do not use Optional Form 347, Order for Supplies or Services, or Optional Form 348, Order for Supplies or Services Schedule—Continuation.
(iii) Use Standard Form 30, Amendment of Solicitation/Modification of Contract, to—
(A) Modify a purchase order; or
(B) Cancel a unilateral purchase order.
(a) Individual orders may exceed the simplified acquisition threshold for—
(i) Brand-name commissary resale subsistence; and
(ii) Medical supplies for direct shipment overseas.
For sole source acquisitions under the 8(a) Program, contracting officers may use the procedures established in the Memorandum of Understanding cited in 219.800.
For acquisitions that are otherwise appropriate to be conducted using procedures set forth in this part, and also eligible for the 8(a) Program, contracting officers may use—
(a)(1) For sole source purchase orders not exceeding the simplified acquisition threshold, the procedures in 219.804-2(2); or
(2) For other types of acquisitions, the procedures in Subpart 219.8, excluding the procedures in 219.804-2(2); or
(b) The procedures for award to the Small Business Administration in FAR Subpart 19.8.
The contracting officer need not obtain a contractor's written acceptance of a purchase order or modification of a purchase order for an acquisition under the 8(a) Program pursuant to 219.804-2(2).
Use the clauses prescribed in 219.811-3 (1) and (3) for purchase orders under the 8(a) Program pursuant to the Memorandum of Understanding cited in 219.800.
41 U.S.C. 421 and 48 CFR chapter 1.
(d)
The contracting officer shall make the written determinations required by FAR 14.404-1 (c) and (e).
(e) Authority for making a determination under FAR 14.407-3(a), (b) and (d) is delegated for the defense agencies, without power of redelegation, as follows:
(i) Defense Advanced Research Projects Agency: General Counsel, DARPA.
(ii) Defense Information Systems Agency: General Counsel, DISA.
(iii) Defense Intelligence Agency: Principal Assistant for Acquisition.
(iv) Defense Logistics Agency:
(A) General Counsel, DLA; and
(B) Associate General Counsel, DLA.
(v) National Imagery and Mapping Agency: General Counsel, NIMA.
(vi) Defense Threat Reduction Agency: General Counsel, DTRA.
(vii) National Security Agency: Director of Procurement, NSA.
(viii) Ballistic Missile Defense Organization: General Counsel, BMDO.
(h) Send a signed copy of the document authorizing correction of the bid to the appropriate finance center with its copy of the contract.
(a) Requests for technical proposals may be in the form of a letter.
41 U.S.C. 421 and 48 CFR Chapter 1.
See 225.872 for additional guidance on procedures for purchasing form qualifying countries.
(g) When a contract contains both fixed-priced and cost-reimbursement line items or subline items, the contracting officer shall provide, in Section B, Supplies or Services and Prices/Costs, an identification of contract type specified for each contract line item or subline item to facilitate appropriate payment.
(b)(2) For high-dollar value and other acquisitions, as prescribed by agency procedures, the source selection authority (SSA) shall approve a source selection plan (SSP) before the solicitation is issued. The SSP—
(A) Shall be prepared and maintained by a person designated by the SSA or as prescribed by agency procedures;
(B) Shall be coordinated with the contracting officer and senior advisory group, if any, within the source selection organization; and
(C) Shall include, as a minimum—
(c)(i) In acquisitions that require use of the clause at FAR 52.219-9, Small, Small Disadvantaged and Women-Owned Small Business Subcontracting Plan, other than those based on the lowest price technically acceptable source selection process (see FAR 15.101-2), the extent of participation of small businesses and historically black colleges or universities and minority institutions in performance of the contract shall be addressed in source selection. The contracting officer shall evaluate the extent to which offerors identify and commit to small business and historically black college or university and minority institution performance of the contract, whether as a joint venture, teaming arrangement, or subcontractor.
(A) Evaluation factors may include—
(B) Proposals addressing the extent of small business and historically black college or university and minority institution performance may be separate from subcontracting plans submitted pursuant to the clause at FAR 52.219-9 and should be structured to allow for consideration of offers from small businesses.
(C) When an evaluation includes the factor in paragraph (c)(i)(A)
(ii) The costs or savings related to contract administration and audit may be considered when the offeror's past performance or performance risk indicates the likelihood of significant costs or savings.
(a)(1)
(A) Unrealistically low labor rates or other costs that may result in quality or service shortfalls; and
(B) Unbalanced distribution of uncompensated overtime among skill levels and its use in key technical positions.
(2)
(b) Any determination to reject a proposal based on a violation or possible violation of Section 27 of the OFPP Act shall be made as specified in FAR 3.104.
(c)
(A) The determination of adequate price competition must be made on a case-by-case basis. Even when adequate price competition exists, in certain cases it may be appropriate to obtain additional information to assist in price analysis.
(B) Adequate price competition normally exists when—
(4)
(B) DoD has waived cost or pricing data requirements for nonprofit organizations (including education institutions) on cost-reimbursement-no-fee contracts. The contracting officer shall require—
(b) When the solicitation requires contractor compliance with the Contractors Cost Data Reporting (CCDR) System (Army—AMCP 715-8, Navy—NAV PUB P-5241, and Air Force—AFMCP 800-15), require the contractor to submit DD Form 1921 or 1921-1 with its pricing proposal.
(a)
(i) Those line items where the proposed price exceeds by 25 percent or more the lowest price the Government has paid within the most recent 12-month period based on reasonably available information;
(ii) Those line items where a comparison of the item description and the proposal price indicates a potential for overpricing;
(iii) Significant high-dollar-value items. If there are no obvious high-dollar-value items, include an analysis of a random sample of items; and
(iv) A random sample of the remaining low-dollar value items. Sample size may be determined by subjective judgment, e.g., experience with the offeror and the reliability of its estimating and accounting systems.
(d)
(i) Shall request only necessary data; and
(ii) May not request submission of cost or pricing data.
(a)
(A) Fixed-price proposals exceeding the cost or pricing data threshold;
(B) Cost-type proposals exceeding the cost or pricing data threshold from offerors with significant estimating system deficiencies (see 215.407-5-70(a)(4) and (c)(2)(i)); or
(C) Cost-type proposals exceeding $10 million from offerors without significant estimating system deficiencies.
(ii) The contracting officer should not request field pricing support for proposed contracts or modifications in an amount less than that specified in paragraph (a)(i) of this subsection. An exception may be made when a reasonable pricing result cannot be established because of—
(A) A lack of knowledge of the particular offeror; or
(B) Sensitive conditions (e.g., a change in, or unusual problems with, an offeror's internal systems).
(c)
(ii) Notify the appropriate contract administration activities when extensive, special, or expedited field pricing assistance will be needed to review and evaluate subcontractors’ proposals under a major weapon system acquisition. If audit reports are received on contracting actions that are subsequently cancelled, notify the cognizant auditor in writing.
(a)(i) When obtaining field pricing assistance on a prime contractor's proposal, the contracting officer should request audit or field pricing assistance to analyze and evaluate the proposal of a subcontractor at any tier (notwithstanding availability of data or analyses performed by the prime contractor) if the contracting officer believes that such assistance is necessary to ensure the reasonableness of the total proposed price. Such assistance may be appropriate when, for example—
(A) There is a business relationship between the contractor and the subcontractor not conducive to independence and objectivity;
(B) The contractor is a sole source supplier and the subcontract costs represent a substantial part of the contract cost;
(C) The contractor has been denied access to the subcontractor's records;
(D) The contracting officer determines that, because of factors such as the size of the proposed subcontract price, audit or field pricing assistance for a subcontract at any tier is critical to a fully detailed analysis of the prime contractor's proposal;
(E) The contractor or higher-tier subcontractor has been cited for having significant estimating system deficiencies in the area of subcontract pricing, especially the failure to perform adequate cost analyses of proposed subcontract costs or to perform subcontract analyses prior to negotiation of the prime contract with the Government; or
(F) A lower-tier subcontractor has been cited as having significant estimating system deficiencies.
(ii) It may be appropriate for the contracting officer or the ACO to provide assistance to a contractor or subcontractor at any tier, when the contractor or higher-tier subcontractor has been denied access to a subcontractor's records in carrying out the responsibilities at FAR 15.404-3 to conduct price or cost analysis to determine the reasonableness of proposed subcontract prices. Under these circumstances, the contracting officer or the ACO should consider whether providing audit or field pricing assistance will serve a valid Government interest.
(iii) When DoD performs the subcontract analysis, DoD shall furnish to the prime contractor or higher-tier subcontractor, with the consent of the subcontractor reviewed, a summary of the analysis performed in determining any unacceptable costs included in the subcontract proposal. If the subcontractor withholds consent, DoD shall furnish a range of unacceptable costs for each element in such a way as to prevent disclosure of subcontractor proprietary data.
(iv) Price redeterminable or fixed-price incentive contracts may include subcontracts placed on the same basis. When the contracting officer wants to reprice the prime contract even though the contractor has not yet established final prices for the subcontracts, the contracting officer may negotiate a firm contract price—
(A) If cost or pricing data on the subcontracts show the amounts to be reasonable and realistic; or
(B) If cost or pricing data on the subcontracts are too indefinite to determine whether the amounts are reasonable and realistic, but—
As soon as the Contractor establishes firm prices for each subcontract listed below, the Contractor shall submit (in the format and with the level of detail specified by the Contracting Officer) to the Contracting Officer the subcontractor's cost incurred in performing the subcontract and the final subcontract price. The Contractor and Contracting Officer shall negotiate an equitable adjustment in the total amount paid or to be paid under this contract to reflect the final subcontract price.
(v) If the selection of the subcontractor is based on a trade-off among cost or price and other non-cost factors rather than lowest price, the analysis supporting subcontractor selection should include a discussion of the factors considered in the selection (also see FAR 15.101 and 15.304 and 215.304). If the contractor's analysis is not adequate, return it for correction of deficiencies.
(vi) The contracting officer shall make every effort to ensure that fees negotiated by contractors for cost-plus-fixed-fee subcontracts do not exceed the fee limitations in FAR 15.404-4(c)(4).
(b)
(A) The weighted guidelines method;
(B) The modified weighted guidelines method; and
(C) An alternate structured approach.
(c)
(2) When using a structured approach, the contracting officer—
(A) Shall use the weighted guidelines method (see 215.404-71), except as provided in paragraphs (c)(2)(B) and (c)(2)(C) of this subsection.
(B) Shall use the modified weighted guidelines method (see 215.404-72) on contract actions with nonprofit organizations other than FFRDCs.
(C) May use an alternate structured approach (see 215.404-73) when—
(D) Shall use the weighted guidelines method to establish a basic profit rate under a formula-type pricing agreement, and may then use the basic rate on all actions under the agreement, provided that conditions affecting profit do not change.
(E) Shall document the profit analysis in the contract file.
(5) Although specific agreement on the applied weights or values for individual profit factors shall not be attempted, the contracting officer may encourage the contractor to—
(A) Present the details of its proposed profit amounts in the weighted guidelines format or similar structured approached; and
(B) Use the weighted guidelines method in developing profit objectives for negotiated subcontracts.
(6) The contracting officer must also verify that relevant variables have not materially changed (e.g., performance risk, interest rates, progress payment rates, distribution of facilities capital).
(d) Profit-analysis factors.—(1)
(a) The DD Form 1547—
(1) Provides a vehicle for performing the analysis necessary to develop of profit objectives;
(2) Provides a format for summarizing profit amounts subsequently negotiated as part of the contract price; and
(3) Serves as the principal source documents for reporting profit statistics to DoD's management information system.
(b) The military departments are responsible for establishing policies and procedures for feeding the DoD-wide management information system on profit and fee statistics (see 215.404-75).
(c) The contracting officer shall—
(1) Use and prepare a DD Form 1547 whenever a structured approach to profit analysis is required by 215.404-4(b) (see 215.404-71, 215.404-72, and 215.404-73 for guidance on using the structured approaches). Administrative instructions for completing the form are in 253.215.-70.
(2) Ensure that the DD Form 1547 is accurately completed. The contracting officer is responsible for the correction
(a) The weighted guidelines method focuses on three profit factors—
(1) Performance risk;
(2) Contract type risk; and
(3) Facilities capital employed.
(b) The contracting officer assigns values to each profit factor; the value multiplied by the base results in the profit objective for that factor. Each profit factor has a normal value and a designated range of values. The normal value is representative of average conditions on the prospective contract when compared to all goods and services acquired by DoD. The designated range provides values based on above normal or below normal conditions. In the negotiation documentation, the contracting officer need not explain assignment of the normal value, but should address conditions that justify assignment of other than the normal value.
(a)
(1) Technical—the technical uncertainties of performance.
(2) Management—the degree of management effort necessary to ensure that contract requirements are met.
(3) Cost control—the contractor's efforts to reduce and control costs.
(b)
(1) Assign a weight (percentage) to each element according to its input to the total performance risk. The total of the three weights equals 100 percent.
(2) Select a value for each element from the list in paragraph (c) of this subsection using the evaluation criteria in paragraphs (d), (e), and (f) of this subsection.
(3) Compute the composite as shown in the following example:
(4) Insert the amount from Block 18 of the DD Form 1547. Block 18 is total contract costs, excluding general and administrative expenses, contractor independent research and development and bid and proposal expenses, and facilities capital cost of money.
(5) Multiply (3) by (4).
(c)
(1)
(2)
(d)
(i) Technology being applied or developed by the contractor;
(ii) Technical complexity;
(iii) Program maturity;
(iv) Performance specifications and tolerances;
(v) Delivery schedule; and
(vi) Extent of a warranty or guarantee.
(2)
(A) The contractor is either developing or applying advanced technologies;
(B) Items are being manufactured using specifications with stringent tolerance limits;
(C) The efforts require highly skilled personnel or require the use of state-of-the-art machinery;
(D) The services and analytical efforts are extremely important to the Government and must be performed to exacting standards;
(E) The contractor's independent development and investment has reduced the Government's risk or cost;
(F) The contractor has accepted an accelerated delivery schedule to meet DoD requirements; or
(G) The contractor has assumed additional risk through warranty provisions.
(ii) Extremely complex, vital efforts to overcome difficult technical obstacles that require personnel with exceptional abilities, experience, and professional credentials may justify a value significantly above normal.
(iii) The following may justify a maximum value—
(A) Development or initial production of a new item, particularly if performance or quality specifications are tight; or
(B) A high degree of development or production concurrency.
(3)
(i) The contracting officer may assign a lower than normal value in
(A) Acquisition is for off-the-shelf items;
(B) Requirements are relatively simple;
(C) Technology is not complex;
(D) Efforts do not require highly skilled personnel;
(E) Efforts are routine;
(F) Programs are mature; or
(G) Acquisition is a follow-on effort or a repetitive type acquisition.
(ii) The contracting officer may assign a value significantly below normal for—
(A) Routine services;
(B) Production of simple items;
(C) Rote entry or routine integration of Government-furnished information; or
(D) Simple operations with Government-furnished property.
(e)
(i) Assess the contractor's management and internal control systems using contracting office information and reviews made by field contract administration offices or other DoD field offices;
(ii) Assess the management involvement expected on the prospective contract action;
(iii) Consider the degree of cost mix as an indication of the types of resources applied and value added by the contractor; and
(iv) Consider the contractor's support of Federal socioeconomic programs.
(2)
(A) The contractor's value added is both considerable and reasonably difficult;
(B) The effort involves a high degree of integration or coordination; or
(C) The contractor has a substantial record of active participation in Federal socioeconomic programs.
(ii) The contracting officer may justify a maximum value when the effort—
(A) Requires large scale integration of the most complex nature;
(B) Involves major international activities with significant management coordination (e.g., offsets with foreign vendors); or
(C) Has critically important milestones.
(3)
(A) The program is mature and many end item deliveries have been made;
(B) The contractor adds minimum value to an item;
(C) The efforts are routine and require minimal supervision;
(D) The contractor provides poor quality, untimely proposals;
(E) The contractor fails to provide an adequate analysis of subcontractor costs; or
(F) The contractor does not cooperate in the evaluation and negotiation of the proposal.
(ii) The following may justify a value significantly below normal—
(A) Reviews performed by the field contract administration offices disclose unsatisfactory management and internal control systems (e.g., quality assurance, property control, safety, security); or
(B) The effort requires an unusually low degree of management involvement.
(f)
(i) The expected reliability of the contractor's cost estimates (including the contractor's cost estimating system);
(ii) The contractor's cost reduction initiatives (e.g., competition advocacy programs, dual sourcing, spare parts pricing reform, value engineering);
(iii) The adequacy of the contractor's management approach to controlling cost and schedule; and
(IV) Any other factors that affect the contractor's ability to meet the cost targets (e.g., foreign currency exchange rates and inflation rates).
(2)
(i) The contractor provides fully documented and reliable cost estimates;
(ii) The contractor has an aggressive cost reduction program that has demonstrable benefits;
(iii) The contractor uses a high degree of subcontract competition (e.g., aggressive dual sourcing); or
(iv) The contractor has a proven record of cost tracking and control.
(3)
(i) The contractor's cost estimating system is marginal;
(ii) The contractor has made minimal effort to initiate cost reduction programs;
(iii) The contractor's cost proposal is inadequate; or
(iv) The contractor has a record of cost overruns or other indication of unreliable cost estimates and lack of cost control.
(a)
(b)
(1) Select a value from the list of contract types in paragraph (c) of this subsection using the evaluation criteria in paragraph (d) of this subsection.
(2) Insert the amount from Block 18, i.e., the total allowable costs excluding general and administrative expenses, independent research and development and bid and proposal expenses, and facilities capital cost of money.
(3) Multiply (1) by (2).
(4) Only complete this block when the prospective contract is a fixed-price contract containing provisions for progress payments.
(5) Insert the amount computed per paragraph (e) of this subsection.
(6) Insert the appropriate figure from paragraph (f) of this subsection.
(7) Use the interest rate established by the Secretary of the Treasury (see 230.7101-1(a)). Do not use any other interest rate.
(8) Multiply (5) by (6) by (7). This is the working capital adjustment. It shall not exceed 4 percent of the contract costs in Block 20.
(c)
(1) “No financing” means that the contractor either does not provide progress payments, or provides them only on a limited basis, such as financing of first articles. Do not compute a working capital adjustment.
(2) “With financing” means progress payments. When progress payments are present, compute a working capital adjustment (Block 26).
(3) For the purposes of assigning profit values, treat a fixed-price contract with redeterminable provisions as if it were a fixed-price-incentive contract with below normal conditions.
(4) Cost-plus contracts shall not receive the working capital adjustment.
(5) These types of contracts are considered cost-plus-fixed-fee contracts for the purposes of assigning profit values. They shall not receive the working capital adjustment in Block 26. However, they may receive higher than normal values within the designated range to the extent that portions of cost are fixed.
(d)
(i) Length of contract;
(ii) Adequacy of cost data for projections;
(iii) Economic environment;
(iv) Nature and extent of subcontracted activity;
(v) Protection provided to the contractor under contract provisions (e.g., economic price adjustment clauses);
(vi) The ceilings and share lines contained in incentive provisions; and
(vii) Risk associated with contracts for foreign military sales (FMS) that are not funded by U.S. appropriations.
(2)
(3)
(i) Efforts where there is minimal cost history;
(ii) Long-term contracts without provisions protecting the contractor, particularly when there is considerable economic uncertainty;
(iii) Incentive provisions (e.g., cost and performance incentives) that place a high degree of risk on the contractor; or
(iv) FMS sales (other than those under DoD cooperative logistics support arrangements or those made from U.S. Government inventories or stocks) where the contractor can demonstrate that there are substantial risk above those normally present in DoD contracts for similar items.
(4)
(i) Very mature product line with extensive cost history;
(ii) Relatively short-term contracts;
(iii) Contractual provisions that substantially reduce the contractor's risk; or
(iv) Incentive provisions that place a low degree of risk on the contractor.
(e)
(2) Total costs equal Block 20 (i.e., all allowable costs, including general and administrative and independent research and development/bid and proposal, but excluding facilities capital cost of money), reduced as appropriate when—
(i) The contractor has little cash investment (e.g., subcontractor progress payments liquidated late in period of performance);
(ii) some costs are covered by special financing provisions, such as advance payments; or
(iii) The contract is multiyear and there are special funding arrangements.
(3) The portion financed by the contractor is generally the portion not covered by progress payments, i.e., 100 percent minus the customary progress payment rate (see FAR 32.501). For example, if a contractor receives progress payments at 75 percent, the portion financed by the contractor is 25 percent. On contracts that provide flexible progress payments (see 252.232-7003) or progress payments to small businesses, use the customary progress payment rate for large businesses.
(f)
(i) Is based on the time necessary for the contractor to complete the substantive portion of the work;
(ii) Is not necessarily the period of time between contract award and final delivery (or final payment), as periods of minimal effort should be excluded;
(iii) Should not include periods of performance contained in option provisions; and
(iv) Should not, for multiyear contracts, include periods of performance beyond that required to complete the initial program year's requirements.
(2) The contracting officer—
(i) Should use the following table to select the contract length factor;
(ii) Should develop a weighted average contract length when the contract has multiple deliveries; and
(iii) May use sampling techniques provided they produce a representative result.
(3) Example: A prospective contract has a performance period of 40 months
(a)
(b)
(1) Select a value from the list in paragraph (c) of this subsection using the evaluation criteria in paragraph (d) of this subsection.
(2) Use the allocated facilities capital attributable to land, buildings, and equipment, as derived in DD Form 1861, Contract Facilities Capital Cost of Money (see 230,7001).
(i) In addition to the net book value of facilities capital employed, consider facilities capital that is part of a formal investment plan if the contractor submits reasonable evidence that—
(A) Achievable benefits to DoD will result from the investment; and
(B) The benefits of the investment are included in the forward pricing structure.
(ii) If the value of intracompany transfers has been included in Block 18 at cost (i.e., excluding general and administrative (G&A) expenses and profit), add to the contractor's allocated facilities capital, the allocated facilities capital attributable to the buildings and equipment of those corporate divisions supplying the intracompany transfers. Do not make this addition if the value of intracompany transfers has been included in Block 18 at price (i.e., including G&A expenses and profit).
(3) Multiply (1) by (2).
(c) Values: Normal and designated ranges.
(1) These are the normal values and ranges. They apply to all situations except those noted in (2) and (3).
(2) These alternate values and ranges apply to situations where a highly facilitized manufacturing firm will be performing a research and development or services contract. They balance the method used to allocate facilities capital cost of money, which may produce disproportionate allocation of assets to these types of efforts.
(3) When using a value from the alternate designated range for the performance risk factor (see 215.404-71-2(c)(2)), do not allow profit on facilities capital employed.
(d)
(i) Should relate the usefulness of the facilities capital to the goods or services being acquired under the prospective contract;
(ii) Should analyze the productivity improvements and other anticipated industrial base enhancing benefits resulting from the facilities capital investment, including—
(A) The economic value of the facilities capital, such as physical age, undepreciated value, idleness, and expected contribution to future defense needs; and
(B) The contractor's level of investment in defense related facilities as compared with the portion of the contractor's total business that is derived from DoD;
(iii) Should consider any contractual provisions that reduce the contractor's risk of investment recovery, such as termination protection clauses and capital investment indemnification; and
(iv) Shall ensure that increases in facilities capital investments are not merely asset revaluations attributable to mergers, stock transfers, take-overs, sales of corporate entities, or similar actions.
(2)
(A) New investments in state-of-the-art technology that reduce acquisition cost of yield other tangible benefits such as improved product quality or accelerated deliveries;
(B) Investments in new equipment for research and development applications; or
(C) Contractor demonstration that the investments are over and above the normal capital investments necessary to support anticipated requirements of DoD programs.
(ii) The contracting officer may assign a value significantly above normal when there are direct and measurable benefits in efficiency and significantly reduced acquisition cost on the effort being priced. Maximum values apply only to those cases where the benefits of the facilities capital investment are substantially above normal.
(3)
(A) Allocations of capital apply predominantly to commercial item lines;
(B) Investments are for such things as furniture and fixtures, home or group level administrative offices, corporate aircraft and hangars, gymnasiums; or
(C) Facilities are old or extensively idle.
(ii) The contracting officer may assign a value significantly below normal when a significant portion of defense manufacturing is done in an environment characterized by outdated, inefficient, and labor-intensive capital equipment.
(a)
(1) That operates exclusively for charitable, scientific, or educational purposes;
(2) Whose earnings do not benefit any private shareholder or individual;
(3) Whose activities do not involve influencing legislation or political campaigning for any candidate for public office; and
(4) That is exempted from Federal income taxation under section 501 of the Internal Revenue Code.
(b) For nonprofit organizations that are entities that have been identified by the Secretary of Defense or a Secretary of a Department as receiving sustaining support on a cost-plus-fixed-fee basis from a particular DoD department or agency, compute a fee objective for covered actions using the weighted guidelines method in 215.404-71, with the following modifications:
(1)
(ii) If the contracting officer assigns a value from the alternate designated range, reduce the fee objective by an amount equal to 2 percent of the costs in Block 18 of the DD Form 1547. Show the net (reduced) amount on the DD Form 1547.
(2)
(c) For all other nonprofit organizations except FFRDCs, compute a fee objective for covered actions using the weighted guidelines method in 215.404-71, modified as described in paragraph (b)(1) of this subsection.
(a) The contracting officer may use an alternate structured approach under 215.404-4(c).
(b) The contracting officer may design the structure of the alternate, but it shall include—
(1) Consideration of the three basic components of profit—performance risk, contract type risk (including working capital), and facilities capital employed. However, the contracting officer is not required to complete Blocks 21 through 30 of the DD Form 1547.
(2) Offset for facilities capital cost of money.
(i) The contracting officer shall reduce the overall prenegotiation profit objective by the lesser of 1 percent of total cost or the amount of facilities capital cost of money. The profit amount in the negotiation summary of the DD Form 1547 must be net of the offset.
(ii) This adjustment is needed for the following reason: The values of the profit factors used in the weighted guidelines method were adjusted to recognize the shift in facilities capital cost of money from an element of profit to an element of contract cost (see FAR 31.205-10) and reductions were made directly to the profit factors for performance risk. In order to ensure that this policy is applied to all DoD contracts that allow facilities capital cost of money, similar adjustments shall be made to contracts that use alternate structured approaches.
In developing a fee objective for cost-plus-award-fee contracts, the contracting officer shall—
(a) Follow the guidance in FAR 16.405-2 and 216.405-2;
(b) Not use the weighted guidelines method or alternate structured approach;
(c) Apply the offset policy in 215.404-73(b)(2) for facilities capital cost of money, i.e., reduce the base fee by the lesser of 1 percent of total costs or the amount of facilities capital cost of money; and
(d) Not complete a DD Form 1547.
For nonprofit organizations that are FFRDCs, the contracting officer—
(a) Should consider whether any fee is appropriate. Considerations shall include the FFRDC's—
(1) Proportion of retained earnings (as established under generally accepted accounting methods) that relates to DoD contracted effort;
(2) Facilities capital acquisition plans;
(3) Working capital funding as assessed on operating cycle cash needs; and
(4) Provision for funding unreimbursed costs deemed ordinary and necessary to the FFRDC.
(b) Shall, when a fee is considered appropriate, establish the fee objective in accordance with FFRDC fee policies in the DoD FFRDC Management Plan.
(c) Shall not use the weighted guidelines method or an alternate structured approach.
(a) Contracting officers in contracting offices that participate in the management information system for profit and fee statistics send completed DD Forms 1547 on actions of $500,000 or more , where the contracting officer used either the weighted guidelines
(b) Participating contracting offices and their designated offices are—
(c) When negotiation of a contract action over $500,000 has been delegated to another contracting agency (e.g., to an ACO), that agency shall ensure that a copy of the DD Form 1547 is provided to the delegating office for reporting purposes within 30 days from negotiation of the contract action.
(d) Contracting offices outside the United States, its possessions, and Puerto Rico are exempt from reporting.
(e) Designated offices send a quarterly (non-cumulative) report of DD Form 1547 data to—
Washington Headquarters Services, Directorate for Information Operations and Reports, (WHS/DIOR), 1215 Jefferson Davis Highway, Suite 1204, Arlington, VA 22202-4302
(f) In preparing and sending the quarterly report, designated offices—
(1) Perform the necessary audits to ensure information accuracy;
(2) Do not enter classified information;
(3) Transmit the report via computer magnetic tape using the procedures, format, and editing process issued by the Director of Defense Procurement; and
(4) Send the reports not later than the 30th day after the close of the quarterly reporting periods.
(g) These reporting requirements have been assigned report control symbol: A&T (Q) 1751.
(a) Also consider—
(i) Data resulting from application of work measurement systems in developing prenegotiation objectives; and
(ii) Field pricing assistance personnel participation in planned prenegotiation and negotiation activities.
(b) Prenegotiation objectives, including objectives related to disposition of findings and recommendations contained in preaward and postward contract audit and other advisory reports, shall be documented an reviewed in accordance with Departmental procedures.
(a)(7) Include the principal factors related to the disposition of findings and recommendation contained in preaward and postaward contract audit and other advisory reports.
(10) The documentation—
(A) Must address significant deviations from the prenegotiation profit objective;
(B) Should include the DD Form 1547, Record of Weighted Guidelines Application (see 215.404-70), if used, with supporting rationale; and
(C) Must address the rationale for not using the weighted guidelines method when its use would otherwise be required by 215.404-70.
(e)
(b)(i) Use forward pricing rate agreement (FPRA) rates when such rates are available, unless waived on a case-by-case basis by the head of the contracting activity.
(ii) Advise the ACO of each case waived.
(iii) Contact the ACO for questions on FPRAs or recommended rates.
(b)
(c)
(2)(A) The Defense Contract Management Command/Defense Logistics Agency (DCMC/DLA), or the military department responsible for performing contract administration functions (e.g., Navy SUPSHIP), should consider, based on risk assessment, performing an overhead should-cost review of a contractor business unit (as defined in FAR 31.001) when all of the following conditions exist—
(
(
(
(
(
(
(B) The head of the contracting activity may request an overhead should-cost review for a business unit that does not meet the criteria in paragraph (c)(2)(A) of this subsection.
(C) Overhead should-cost reviews are labor intensive. These reviews generally involve participation by the contracting, contract administration, and contract audit elements. The extent of availability of military department, contract administration, and contract audit resources to support DCMC/DLA led teams should be considered when determining whether a review will be conducted. Overhead should-cost reviews generally shall not be conducted at a contractor business segment more frequently than every 3 years.
(a)
(1)
(i) Is established, maintained, reliable, and consistently applied; and
(ii) Produces verifiable, supportable, and documented cost estimates.
(2)
(3)
(4)
(b)
(i) Are acceptable;
(ii) Consistently produce well-supported proposals that are acceptable as a basis for negotiation of fair and reasonable prices;
(iii) Are consistent with and integrated with the contractor's related management systems; and
(iv) Are subject to applicable financial control systems.
(2) A large business contractor is subject to estimating system disclosure, maintenance, and review requirements if—
(i) In its preceding fiscal year, the contractor received DoD prime contracts or subcontracts totaling $50 million or more for which cost or pricing data were required; or
(ii) In its preceding fiscal year, the contractor received DoD prime contracts or subcontracts totaling $10 million or more (but less than $50 million) for which cost or pricing data were required and the contracting officer, with concurrence or at the request of the ACO, determines it to be in the best interest of the Government (e.g., significant estimating problems are believed to exist or the contractor's sales are predominantly Government).
(c)
(i) Through use of the clause at 252.215-7002, Cost Estimating System Requirements, apply the disclosure, maintenance, and review requirements to large business contractors meeting the criteria in paragraph (b)(2)(i) of this subsection;
(ii) Consider whether to apply the disclosure, maintenance, and review requirements to large business contractors under paragraph (b)(2)(ii) of this subsection; and
(iii) Not apply the disclosure, maintenance, and review requirements to other than large business contractors.
(2) The cognizant ACO, for contractors subject to paragraph (b)(2) of this subsection, shall—
(i) Determine the acceptability of the disclosure and system; and
(ii) Pursue correction of any deficiencies.
(3) The cognizant auditor, on behalf of the ACO, serves as team leader in conducting estimating system reviews.
(4) A contractor subject to estimating system disclosure, maintenance, and review requirements shall—
(i) Maintain an acceptable system;
(ii) Describe its system to the ACO:
(iii) Provide timely notice of changes in the system; and
(iv) Correct system deficiencies identified by the ACO.
(d)
(2)
(i) Establishes clear responsibility for preparation, review, and approval of cost estimates;
(ii) Provides a written description of the organization and duties of the personnel responsible for preparing, reviewing, and approving cost estimates;
(iii) Assures that relevant personnel have sufficient training, experience, and guidance to perform estimating tasks in accordance with the contractor's established procedures;
(iv) Identifies the sources of data and the estimating methods and rationale used in developing cost estimates;
(v) Provides for appropriate supervision throughout the estimating process;
(vi) Provides for consistent application of estimating techniques;
(vii) Provides for detection and timely correction of errors;
(viii) Protects against cost duplication and omissions;
(ix) Provides for the use of historical experience, including historical vendor pricing information, where appropriate;
(x) Requires use of appropriate analytical methods;
(xi) Integrates information available from other management systems, where appropriate;
(xii) Requires management review including verification that the company's estimating policies, procedures, and practices comply with this regulation;
(xiii) Provides for internal review of and accountability for the acceptability of the estimating system, including the comparison of projected results to actual results and an analysis of any differences;
(xiv) Provides procedures to update cost estimates in a timely manner throughout the negotiation process; and
(xv) Addresses responsibility for review and analysis of the reasonableness of subcontract prices.
(3)
(i) Failure to ensure that historical experience is available to and utilized by cost estimators, where appropriate;
(ii) Continuing failure to analyze material costs or failure to perform subcontractor cost reviews as required;
(iii) Consistent absence of analytical support for significant proposed cost amounts;
(iv) Excessive reliance on individual personal judgments where historical experience or commonly utilized standards are available;
(v) Recurring significant defective pricing findings within the same cost element(s);
(vi) Failure to integrate relevant parts of other management systems (e.g., production control or cost accounting) with the estimating system so that the ability to generate reliable cost estimates is impaired; and
(vii) Failure to provide established policies, procedures, and practices to persons responsible for preparing and supporting estimates.
(e)
(1) Establish and manage regular programs for reviewing selected contractors’ estimating systems.
(2) Conduct reviews as a team effort.
(i) The contract auditor will be the team leader.
(ii) The team leader will—
(A) Coordinate with the ACO to ensure that team membership includes qualified contract administration technical specialists.
(B) Advise the ACO and the contractor of significant findings during the conduct of the review and during the exit conference.
(C) Prepare a team report.
(3) Tailor reviews to take full advantage of the day-to-day work done by both organizations.
(4) Conduct a review, every 3 years, of contractors subject to the disclosure requirements. The ACO and the auditor may lengthen or shorten the 3-year period based on their joint risk assessment of the contractor's past experience and current vulnerability.
(f)
(2)
(i) If the contractor agrees with the report, the contractor has 60 days from the date of initial notification to correct any identified deficiencies or submit a corrective action plan showing milestones and actions to eliminate the deficiencies.
(ii) If the contractor disagrees, the contractor should provide rationale in its written response.
(3)
(i) The estimating system contains deficiencies that need correction;
(ii) The deficiencies are significant estimating deficiencies that would result in disapproval of all or a portion of the contractor's estimating system; or
(iii) The contractor's proposed corrective actions are adequate to eliminate the deficiency.
(4)
(i) List the cost elements covered;
(ii) Identify any deficiencies requiring correction; and
(iii) Require the contractor to correct the deficiencies within 45 days or submit an action plan showing milestones and actions to eliminate the deficiencies.
(5)
(i) Identify the cost elements covered;
(ii) List the deficiencies that prompted the disapproval; and
(iii) Be sent to the cognizant auditor, and each contracting and contract administration officer having substantial business with the contractor.
(6)
(7)
(g)
(2) The contracting officer responsible for negotiation of a proposal generated by an estimating system with an identified deficiency shall evaluate whether the deficiency impacts the negotiations. If it does not, the contracting officer should proceed with negotiations. If it does, the contracting officer should consider other alternatives, e.g.—
(i) Allowing the contractor additional time to correct the estimating system deficiency and submit a corrected proposal;
(ii) Considering another type of contract, e.g., FPIF instead of FFP;
(iii) Using additional cost analysis techniques to determine the reasonableness of the cost elements affected by the system's deficiency;
(iv) Segregating the questionable areas as a cost reimbursable line item;
(v) Reducing the negotiation objective for profit or fee; or
(vi) Including a contract (reopener) clause that provides for adjustment of the contract amount after award.
(3) The contracting officer who incorporates a reopener clause into the contract is responsible for negotiating price adjustments required by the clause. Any reopener clause necessitated by an estimating deficiency should—
(i) Clearly identify the amounts and items that are in question at the time of negotiation;
(ii) Indicate a specific time or subsequent event by which the contractor will submit a supplemental proposal, including cost or pricing data, identifying the cost impact adjustment necessitated by the deficient estimating system;
(iii) Provide for the contracting officer to unilaterally adjust the contract
(iv) Provide that failure of the Government and the contractor to agree to the price adjustment shall be a dispute under the Disputes clause.
(1) Use the clause at 252.215-7000, Pricing Adjustments, in solicitations and contracts that contain the clause at—
(i) FAR 52.215-11, Price Reduction for Defective Cost or Pricing Data—Modifications;
(ii) FAR 52.215-12, Subcontractor Cost or Pricing Data; or
(iii) FAR 52.215-13, Subcontractor Cost or Pricing Data—Modifications.
(2) Use the clause at 252.215-7002, Cost Estimating System requirements, in all solicitations and contracts to be award on the basis of cost or pricing data.
(a) DoD requires estimates of the prices of data in order to evaluate the cost to the Government of data items in terms of their management, product, or engineering value.
(b) When data are required to be delivered under a contract, the solicitation will include DD Form 1423, Contract Data Requirements List. The form and the provision included in the solicitation request the offeror to state what portion of the total price is estimated to be attributable to the production or development of the listed data for the Government (not to the sale of rights in the data). However, offerors’ estimated prices may not reflect all such costs; and different offerors may reflect these costs in a different manner, for the following reasons—
(1) Differences in business practices in competitive situations;
(2) Differences in accounting systems among offerors;
(3) Use of factors or rates on some portions of the data;
(4) Application of common effort to two or more data items; and
(5) differences in data preparation methods among offerors.
(c) Data price estimates should not be used for contract pricing purposes without further analysis.
(d) The contracting officer shall ensure that the contract does not include a requirement for data that the contractor has delivered or is obligated to deliver to the government under another contract or subcontract, and that the successful offeror identifies any such data required by the solicitation. However, where duplicate data are desired, the contract price shall include the costs of duplication, but not of preparation, of such data.
41 U.S.C. 421 and 48 CFR chapter 1.
(d) Design stability should also be considered.
(a)
(b)
(2) The nature of the work to be performed will usually result in a cost-plus award fee, cost-plus fixed fee term, cost-no-fee, or cost-sharing contract.
(3) If the Government and the contractor can identify and agree upon the level of contractor effort required, the contracting officer may select a firm fixed-price level-of-effort contract, except see 235.006.
(4) If the Government and the contractor agree that an incentive arrangement is desirable and capable of being evaluated after completion of the work, the contracting officer may use an incentive type contract.
(c)
(2) Contracting officers may select incentive contracts if—
(i) Realistic and measurable targets are identified; and
(ii) Achievement of those targets is predictable with a reasonable degree of accuracy.
(3) Contracting officers should not use contracts with only cost incentives where—
(i) There will be a large number of major technical changes; or
(ii) Actions beyond the control of the contractor may influence the contractor's achievement of cost targets.
(d)
(i) The degree to which the project is clearly defined, which in turn affects the contractor's ability to provide accurate cost estimates;
(ii) The need for effort that will overlap that of earlier stages;
(iii) The need for firm technical direction by the Government; and
(iv) The degree of configuration control the Government will exercise.
(2) For development efforts, particularly for major defense systems, the preferred contract type is cost reimbursement.
(3) Contracting officers should use fixed-price type contracts when risk has been reduced to the extent that realistic pricing can occur; e.g., when a program has reached the final stages of development and technical risks are minimal, except see 235.006.
(a)
(i) The total contract price exceeds the simplified acquisition threshold; and
(ii) Delivery will not be completed within 6 months after the contract date.
(b)
(i) The total contract price exceeds the simplified acquisition threshold; and
(ii) Delivery will not be completed within 6 months after the contract date.
(c)
(2) Limit use of the clause at FAR 52.216-4, Economic Price Adjustment-Labor and Material, to contracts in which the price exceeds $50,000 and the period of performance exceeds 6 months, unless otherwise approved by the chief of the contracting office. Use an appropriate modification of the clause in sealed bidding.
(4) Apply the full amount of the decrease in the labor rates and fringe benefits or unit prices for materials.
(d)
(i) Do not make the clause unnecessarily complex.
(ii) Normally, the clause should not provide either a ceiling or a floor for adjustment unless adjustment is based on indices below the four digit level of the Bureau of Labor Statistics—
(A) Producer Price Index;
(B) Employment Cost Index for wages and salaries, benefits, and compensation costs for aerospace industries; or
(C) Wage and Income Series by Standard Industrial Classification (Labor).
(iii) Normally, the clause should cover all potential economic fluctuations within the original contract period of performance.
(iv) The clause must accurately identify the index(es) upon which adjustments will be based.
(A) It must provide for a means to adjust for appropriate economic fluctuation in the event publication of the movement of the designated index is discontinued. This might include the substitution of another index if the time remaining would justify doing so and an appropriate index is reasonably available, or some other method for repricing the remaining portion of work to be performed.
(B) Normally, there should be no need to make an adjustment if computation of the identified index is altered. However, it may be appropriate to provide for adjustment of the economic fluctuation computations in the event there is such a substantial alteration in the method of computing the index that the original intent of the parties is negated.
(C) When an index to be used is subject to revision (e.g., the Bureau of Labor Statistics Producer Price Indexes), the economic price adjustment clause must specify that any economic price adjustment will be based on a revised index and must identify which revision to the index will be used.
(v) Construct the index to encompass a large sample of relevant items while still bearing a logical relationship to the type of contract costs being measured. The basis of the index should not be so large and diverse that it is significantly affected by fluctuations not relevant to contract performance, but it must be broad enough to minimize the effect of any single company, including the anticipated contractor(s).
(vi) Construction of an index is largely dependent upon three general series published by the U.S. Department of Labor, Bureau of Labor Statistics (BLS). These are the—
(A) Industrial Commodities portion of the Producer Price Index;
(B) Employment Cost Index for wages and salaries, benefits, and compensation costs for aerospace industries; and
(C) Wage and Income Series by Standard Industrial Classification (Labor). Since there is no BLS published series currently available that relates directly to total prices of delivered DoD aircraft, ships, missiles, electronics, etc., it will be necessary to construct composite indices from major portions of the three series identified.
(vii) Normally, do not use more than two indices, i.e., one for labor (direct and indirect) and one for material (direct and indirect).
(viii) The clause must establish and properly identify a base period comparable to the contract periods for which adjustments are to be made as a reference point for application of an index.
(ix) The clause should not provide for an adjustment beyond the original contract performance period, including options. The start date for the adjustment may be the beginning of the contract or a later time, as appropriate, based on the projected rate of expenditures.
(x) The expenditure profile for both labor and material should be based on a predetermined rate of expenditure (expressed as the percentage of material or labor usage as it relates to the total contract price) in lieu of actual cost incurred.
(A) If the clause is to be used in a competitive acquisition, determine the labor and material allocations, with regard to both mix of labor and material and rate of expenditure by percentage, in a manner which will, as nearly as possible, approximate the average expenditure profile of all companies to be solicited so that all companies may compete on an equal basis.
(B) If the clause is to be used in a noncompetitive acquisition, the labor and material allocations may be subject to negotiation and agreement.
(C) For multiyear contracts, establish predetermined expenditure profile tables for each of the annual increments in the multiyear buy. Each of the second and subsequent year tables must be cumulative to reflect the total expenditures for all increments funded through the latest multiyear funding.
(xi) The clause should state the percentage of the contract price subject to price adjustment.
(A) Normally, do not apply adjustments to the profit portion of the contract.
(B) Examine the labor and material portions of the contract to exclude any areas that do not require adjustment. For example, it may be possible to exclude—
(
(
(
(
(C) Allocate that part of the contract price subject to adjustment to specific periods of time (e.g., quarterly, semiannually, etc.) based on the most probable expenditure or commitment basis (expenditure profile).
(xii) The clause should provide for definite times or events that trigger price adjustments. Adjustments should be frequent enough to afford the contractor appropriate economic protection without creating a burdensome administrative effort. The adjustment period should normally range from quarterly to annually.
(xiii) When the contract contains cost incentives, any sums paid to the contractor on account of economic price adjustment provisions must be subtracted from the total of the contractor's allowable costs for the purpose of establishing the total costs to which the cost incentive provisions apply. If the incentive arrangement is cited in percentage ranges, rather than dollar ranges, above and below target costs, structure the economic price adjustment clause to maintain the original contract incentive range in dollars.
(xiv) The economic price adjustment clause should provide that once the labor and material allocations and the portion of the contract price subject to price adjustment have been established, they remain fixed through the life of the contract and shall not be modified except in the event of significant changes in the scope of the contract. The clause should state that pricing actions pursuant to the Changes clause or other provisions of the contract will be priced as though there were no provisions for economic price adjustment. However, subsequent modifications may include a change to the delivery schedule or significantly change the amount of, or mix of, labor or material for the contract. In such cases, it may be appropriate to prospectively apply economic price adjustment coverage. This may be accomplished by—
(A) Using an economic price adjustment (EPA) clause that applies only to the effort covered by the modification;
(B) Revising the baseline data or period in the EPA clause for the basic contract to include the new work; or
(C) Using an entirely new EPA clause for the entire contract, including the new work.
(xv) Consistent with the factors in paragraphs (d)(i) through (xiv) of this subsection, it may also be appropriate to provide in the prime contract for similar economic price adjustment arrangements between the prime contractor and affected subcontractors to allocate risks properly and ensure that those subcontractors are provided similar economic protection.
(xvi) When economic price adjustment clauses are included in contracts that do not require submission of cost or pricing data as provided for in FAR 15.403-1, the contracting officer must obtain adequate information to establish the baseline from which adjustments will be made. The contracting officer may require verification of the data submitted to the extent necessary to permit reliance upon the data as a reasonable baseline.
(a)
(1) The price adjustment clause at 252.216-7000, Economic Price Adjustment—Basic Steel, Aluminum, Brass, Bronze, or Copper Mill Products, may be used in fixed-price supply contracts for basic steel, aluminum, brass, bronze, or copper mill products, such as sheets, plates, and bars, when an established catalog or market price exists for the particular product being acquired.
(2) The 10 percent figure in paragraph (d)(1) of the clause shall not be exceeded unless approval is obtained at a level above the contracting officer.
(b)
(i) The contractor is a steel producer and actually manufacture the standard steel mill item referred to in the “base steel index” definition of the clause; and
(ii) The items being acquired are nonstandard steel items made wholly or in part of standard steel mill items.
(2) When this clause is included in invitations for bids, omit Note 6 of the clause and all references to Note 6.
(3) Solicitations shall instruct offerors to complete all blanks in accordance with the applicable notes.
(4) When the clause is to provide for adjustment on a basis other than “established price” (see Note 6 of the clause), that price must be verified.
(5) The ten percent figure in paragraph (e)(4) of the clause shall not be exceeded unless approval is obtained at a level above the contracting officer.
(c)
(i) The contract is to be performed wholly or in part in a foreign country; and
(ii) A foreign government controls wage rates or material prices and may, during contract performance, impose a mandatory change in wages or prices of material.
(2) Verify the base wage rates and material prices prior to contract award and prior to making any adjustment in the contract price.
(c)
(i) Except as provided in paragraph (c)(ii) of this section, annual military construction appropriations acts prohibit the use of cost-plus-fixed-fee contracts that—
(A) Are funded by a military construction appropriations act;
(B) Are estimated to exceed $25,000; and
(C) Will be performed within the United States, except Alaska.
(ii) The prohibition in paragraph (c)(i) of this section does not apply—
(A) To contracts for environmental restoration at an installation that is being closed or realigned where payments are made from a Base Realignment and Closure Account; or
(B) To contracts specifically approved in writing, setting forth the reasons therefor, in accordance with the following:
Contractor performance incentives should relate to specific performance areas of milestones, such as delivery or test schedules, quality controls, maintenance requirements, and reliability standards.
(b)
(3) Individual line items may have separate incentive provisions; e.g., when dissimilar work calls for separate formulas.
(a)
Award-fee provisions may be used in fixed-price contracts as provided in 216.470
(b)
(3) Give appropriate weight to basic acquisition objectives in negotiating the range of fee and the fee adjustment formula. For example—
(A) In an initial product development contract, it may be appropriate to provide for relatively small adjustments in fee tied to the cost incentive feature, but provide for significant adjustments if the contractor meets or surpasses performance targets.
(B) In subsequent development and test contracts, it may be appropriate to negotiate an incentive formula tied primarily to the contractor's success in controlling costs.
(a)
(ii) The basis for all award fee determinations shall be documented in the contract file.
(b)
(2) The contracting activity may—
(A) Establish a board to—
(
(
(B) Afford the contractor an opportunity to present information on its own behalf.
(c)
(i) To avoid—
(A) Establishing CPFF contracts when the criteria for CPFF contracts apply, or
(B) Developing objective targets so a CPIF contract can be used.
(ii) For either engineering development or operational system development acquisitions which have specifications suitable for simultaneous research and development and production, except a CPAF contract may be used for individual engineering development or operational system development acquisitions ancillary to the development of a major weapon system or equipment, where—
(A) It is more advantageous; and
(B) The purpose of the acquisition is clearly to determine or solve specific problems associated with the major weapon system or equipment.
(2)(A) Do not apply the weighted guidelines method to CPAF contracts for either the base (fixed) fee or the award fee.
(B) The base fee shall not exceed three percent of the estimated cost of the contract exclusive of the fee.
The “award amount” portion of the fee may be used in other types of contracts under the following conditions—
(1) The Government wishes to motivate and reward a contractor for management performance in areas which cannot be measured objectively and where normal incentive provisions cannot be used. For example, logistics support, quality, timeliness, ingenuity, and cost effectiveness are areas under the control of management which may be susceptible only to subjective measurement and evaluation.
(2) The “base fee” (fixed amount portion) is not used.
(3) The chief of the contracting office approves the use of the “award amount.”
(4) An award review board and procedures are established for conduct of the evaluation.
(5) The administrative costs of evaluation do not exceed the expected benefits.
(a)(i) For items with a shelf-life of less than 6 months, consider the use of indefinite-delivery type contracts with orders to be placed either—
(A) Directly by the users; or
(B) By central purchasing offices with deliveries direct to users.
(ii) Whenever an indefinite-delivery contract is issued, the issuing office must furnish all ordering offices sufficient information for the ordering office to complete its contract reporting responsibilities under 204.670-2. This data must be furnished to the ordering activity in sufficient time for the activity to prepare its report for the action within 3 working days of the order.
Orders placed under indefinite-delivery contracts may be issued on DD Form 1155, Order for Supplies or Services.
(d) If the contract is for the preparation of personal property for shipment or storage (see 247.271-4), substitute paragraph (f) at 252.247-7015, Requirements, for paragraph (f) of the clause at FAR 52.216-21, Requirements.
See subpart 217.74 for additional limitations on the use of letter contracts.
(b)(2) See 217.7406(a) for additional guidance regarding use of the clause at FAR 52.216-24, Limitation of Government Liability.
(3) Use the clause at 252.217-7027, Contract Definitization, in accordance with its prescription at 217.7406(b), instead of the clause at FAR 52.216-25, Contract Definitization.
(c)
(d)
(ii) Individual orders under a basic ordering agreement shall be individually closed following completion of the orders (see FAR 4.804).
(1)(iii) The office issuing the agreement shall furnish all authorized ordering offices sufficient information for the ordering office to complete its contract reporting responsibilities under 204.670-2 or, in the case of civilian agencies, the Federal Procurement Data System reporting requirement. Data furnished to civilian agencies must contain uncoded information about the data elements and the meanings of the codes to permit these users to translate the data into the federal format. This data must be furnished to the ordering activity in sufficient time for the activity to prepare its report for the action within 3 working days of the order.
(2)(i) Any activity listed in the agreement may issue orders on DD Form 1155, Order for Supplies or Services, or Standard Form 26, Award/Contract.
(3) Incentive provisions consistent with this part are permitted.
41 U.S.C. 421 and 48 CFR chapter 1.
(a) Before awarding a multiyear contract, the head of the agency must compare the cost of that contract to the cost of an annual procurement approach, using a present value analysis. Do not award the multiyear contract unless the analysis shows that the multiyear contract will result in the lower cost (10 U.S.C. 2306(1)(5)).
(b) The head of the agency must provide written notice to the congressional defense committees at least 10 days before termination of any multiyear contract (10 U.S.C. 2306(1)(4)).
(c) The Secretary of Defense may instruct the head of the agency proposing a multiyear contract to include in that contract negotiated priced options for varying the quantities of end items to be procured over the life of the contract (10 U.S.C. 2306b(j)).
(d) Every multiyear contract must comply with FAR 17.104(c), unless an exception is approved through the budget process in coordination with the cognizant comptroller.
(e)(1) DoD must receive authorization from, or provide notification to, Congress before entering into a multiyear contract for certain procurements, including those expected to—
(i) Exceed $500 million for any particular system or system component (see 217.173(b)(4));
(ii) Employ economic order quantity procurement in excess of $20 million in any one year (see 217.174(a)(1));
(iii) Employ an unfunded contingent liability in excess of $20 million (see 217.172(c)); or
(iv) Involve a contract for advance procurement leading to a multiyear contract that employs economic order quantity procurement in excess of $20 million in any one year (see 217.174(a)(2)).
(2) A DoD component must submit a request for authority to enter into such multiyear contracts as part of the component's budget submission for the fiscal year in which the multiyear contract will be initiated. DoD will include the request, for each candidate it supports, as part of the President's Budget for that year and in the Appendix to that budget as part of proposed legislative language for the appropriations bill for that year (Section 8008(b) of Pub. L. 105-56).
(3) If the advisability of using a multiyear contract becomes apparent too late to satisfy the requirements in paragraph (e)(2) of this section, the request for authority to enter into a multiyear contract must be—
(i) Formally submitted by the President as a budget amendment; or
(ii) Made by the Secretary of Defense, in writing, to the congressional defense committees (Section 8008(b) of Pub. L. 105-56).
(a)
(1) The head of the agency may enter into multiyear contracts for the following types of services (and items of supply relating to such services), even though funds are limited by statute to
(i) Operation, maintenance, and support of facilities and installations.
(ii) Maintenance or modification of aircraft, ships, vehicles, and other highly complex military equipment.
(iii) Specialized training requiring high quality instructor skills (e.g., training for pilots and other aircrew members or foreign language training).
(iv) Base services (e.g., ground maintenance, in-plane refueling, bus transportation, and refuse collection and disposal).
(2) The head of the agency may use this authority only if the term of the contract does not exceed 5 years. However, the head of the agency may extend the term of the contract by exercising an option that does not—
(i) Exceed 3 years; or
(ii) Include charges for plant, equipment, or other nonrecurring costs already amortized.
(3) Before entering into a multiyear contract for services, the head of the agency must make a written determination that—
(i) There will be a continuing need for the services and incidental supplies consistent with current plans for the proposed contract period;
(ii) Furnishing the services and incidental supplies will require—
(A) A substantial initial investment in plant or equipment; or
(B) The incurrence of substantial contingent liabilities for the assembly, training, or transportation of a specialized work force; and
(iii) Using a multiyear contract will be in the best interest of the United States by encouraging effective competition and promoting economical business operations (e.g., economic lot purchases and more efficient production rates).
(b)
(1) The head of the agency may enter into multiyear contracts for supplies and services required for management, maintenance, and operation of military family housing and may pay the costs of such contracts for each year from annual appropriations for that year.
(2) The head of the agency may use this authority only if the term of the contract does not exceed 4 years.
(a) This section applies to all multiyear contracts for supplies, including weapon systems. For policies that apply only to multiyear contracts for weapon systems, see 217.173.
(b) The head of the agency may enter into a multiyear contract for supplies if, in addition to the conditions listed in FAR 17.105-1(b), the use of such a contract will promote the national security of the United States.
(c) The head of the agency must provide written notice to the congressional defense committees at least 30 days before the contracting officer awards a multiyear contract including an unfunded contingent liability in excess of $20 million (10 U.S.C. 2306b(l)(1)(A)).
(d) Agencies must establish reporting procedures to meet the requirements of paragraph (c) of this section. The head of the agency must submit copies of the notifications to the Director of Defense Procurement, Office of the Under Secretary of Defense (Acquisition and Technology) (OUSD(A&T)DP), and to the Deputy Under Secretary of Defense (Comptroller) (Program/Budget) (OUSD(C)(P/B)).
(a) As authorized by 10 U.S.C. 2306b(h) and subject to the conditions in paragraph (b) of this section, the head of the agency may enter into a multiyear contract for—
(1) A weapon system and associated items, services, and logistics support for a weapon system; and
(2) Advance procurement of components, parts, and materials necessary to manufacture a weapon system, including advance procurement to achieve economic lot purchases or more efficient production rates (see 217.174 regarding economic order quantity procurement).
(b) The head of the agency must ensure that the following conditions are satisfied before awarding a multiyear contract under the authority described in paragraph (a) of this section:
(1) The multiyear exhibits required by DoD 7000.14-R, Financial Management Regulation, are included in the agency's budget estimate submission and the President's budget request.
(2) The Secretary of Defense certifies to Congress that the current 5-year defense program fully funds the support costs associated with the multiyear program (10 U.S.C. 2306b(i)(1)(A)). The head of the agency must submit information supporting this certification to USD(C) (P/B) for transmission to Congress through the Secretary of Defense.
(3) The proposed multiyear contract provides for production at not less than minimum economic rates, given the existing tooling and facilities (10 U.S.C. 2306b(i)(1)(B)). The head of the agency must submit to USD(C) (P/B) information supporting the agency's determination that this requirement has been met.
(4) If the value of a multiyear contract for a particular system or component exceeds $500 million, use of a multiyear contract is specifically authorized by—
(i) An appropriations act (10 U.S.C. 2306b(l)(3)); and
(ii) A law other than an appropriations act (10 U.S.C. 2306b(i)(3)).
(5) All other requirements of law are met and there are no other statutory restrictions on using a multiyear contract for the specific system or component (10 U.S.C. 2306b(i)(2)). One such restriction may be the achievement of specified cost savings. If the agency finds, after negotiations with the contractor(s), that the specified savings cannot be achieved, the head of the agency must assess the savings that, nevertheless, could be achieved by using a multiyear contract. If the savings are substantial, the head of the agency may request relief from the law's specific savings requirement. The request must—
(i) Quantify the savings that can be achieved;
(ii) Explain any other benefits to the Government of using the multiyear contract;
(iii) Include details regarding the negotiated contract terms and conditions; and
(iv) Be submitted to OUSD (A&T) DP for transmission to Congress via the Secretary of Defense and the President.
(a) The head of the agency must provide written notice to the congressional defense committees at least 30 days before awarding—
(1) A multiyear contract providing for economic order quantity procurement in excess of $20 million in any one year; or
(2) A contract for advance procurement leading to a multiyear contract that employs economic order quantity procurement in excess of $20 million in any one year (10 U.S.C. 2306b(l)(1)(A)).
(b) Before initiating an advance procurement, the contracting officer must verify that it is consistent with DoD policy (e.g., Part 3 of DoD 5000.2-R, Mandatory Procedures for Major Defense Acquisition Programs (MDAPs) and Major Automated Information System (MAIS) Acquisition Programs, and the full funding policy in Volume 2A, Chapter 1, of DoD 7000.14-R, Financial Management Regulation).
(1) Options may be used for foreign military sales requirements.
(2) Consider use of surge options to support the Industrial Preparedness Production Planning program (see subpart 208.72). A surge option allows the Government, prior to final delivery, to—
(i) Accelerate the contractor's production rate in accordance with a surge production plan or a delivery schedule provided by the contractor under the terms of the contract; and
(ii) Purchase additional quantities of supplies or services.
(3) See subpart 217.74 for limitations on the use of undefinitized options.
(c) Except for contracts for the acquisition of commercial items, if the contractor has any contract containing the clause at FAR 52.222-37, Employment Reports on Disabled Veterans and Veterans of the Vietnam Era, the contracting officer may exercise an option with a value exceeding the simplified acquisition threshold only after determining that the contractor has submitted the most recent report required by that clause (see 222.1304(b)).
Sealed bid solicitations shall not include provisions for evaluations of options unless the contracting officer determines that there is a reasonable likelihood that the options will be exercised (10 U.S.C. 2301(a)(7)). This limitation also applies to sealed bid solicitations for the contracts excluded by FAR 17.200.
(a) Use the clause at 252.217-7000, Exercise of Option to Fulfill Foreign Military Sales Commitments, when an option may be used for foreign military sale requirements.
(1) Use Alternate I when the foreign military sale country is not known at the time of solicitation or award.
(2) Do not use this clause in contracts for establishment or replenishment of DoD inventories or stocks, or acquisitions made under DoD cooperative logistics support arrangements.
(b) When a surge option is needed in support of industrial preparedness production planning (see subpart 208.72), use the clause at 252.217-7001, Surge Option, in solicitations and contracts.
(1) Insert the percentage of increase the option represents in paragraph (a) of the clause.
(2) Change 30 days in paragraphs (b)(2) and (d)(1) to longer periods, if appropriate.
(3) Change the 24-month period in paragraph (c)(3), if appropriate.
(1) When leader company contracting is to be considered, take special effort to select a small disadvantaged business (SDB) concern as the follower company if—
(i) The follower company will be a subcontractor and the Standard Industrial Classification (SIC) Major Group of the acquisition is one in which use of an evaluation factor or subfactor for participation of SDB concerns is currently authorized (see FAR 19.201(b)); or
(ii) The follower company will be a prime contractor and the SIC Major Group of the acquisition is one in which use of a price evaluation adjustment is currently authorized (see FAR 19.201(b)).
(2) If special effort is required by paragraph (1) of this section and an SDB is not selected as the follower company, the contracting officer shall document the contract file to reflect—
(i) The extent of actions taken to identify SDB concerns for participation in the acquisition; and
(ii) The rationale for selection of a non-SDB as the follower company.
(b) Unless more specific statutory authority exists, the procedures in FAR Subpart 17.5, this subpart, and DODI 4000.19 apply to all purchases, except micro-purchases, made for DoD by another agency. This includes orders under a task or delivery order contract
(c) If requested, the contracting officer who normally would contract for the requesting activity should advise in the determination process.
(a) When the requesting agency is within DoD, a copy of the executed D&F shall be furnished to the servicing agency as an attachment to the order. When a DoD contracting office is acting as the servicing agency, a copy of the executed D&F shall be obtained from the requesting agency and placed in the contract file for the Economy Act order.
FAR subpart 17.6 does not apply to DoD.
This subpart prescribes policy and procedures for exchange of nonexcess personal property concurrent with an acquisition. Section 201(c) of the Federal Property and Administrative Services Act of 1949, 63 Stat. 384, as amended (40 U.S.C. 481(c)) permits exchange of personal property and application of the exchange allowance to the acquisition of similar property. This subpart does not authorize the sale of nonexcess personal property.
As used in this subpart,
(a)
(1) Is not excess but is eligible for replacement (because of obsolescence, unserviceability, or other reason); and
(2) Is applied as whole or partial payment toward the acquisition of similar items (i.e., items designed and constructed for the same purpose).
(b)
DoD policy is to exchange, rather than replace, eligible nonexcess property whenever exchange promotes economical and efficient program accomplishment. Exchange policy, authority, and applicability are governed by—
(a) The Federal Property Management Regulations issued by the Administrator of the General Services Administration; and
(b) DoDI 4140.51, Exchange of Nonexcess Personal Property in the Department of Defense.
Ensure that the requiring activity provides all of the following in support of the purchase request—
(a) A certification that the property is eligible for exchange and complies with all conditions and limitations of DoDI 4140.51;
(b) A written determination of economic advantage indicating—
(1) The anticipated economic advantage to the Government from use of the exchange authority;
(2) That exchange allowances shall be applied toward, or in partial payment of, the items to be acquired; and
(3) That, if required, the exchange property has been rendered safe or innocuous or has been demilitarized;
(c) All applicable approvals for the exchange; and
(d) A description of the property available for exchange (e.g., nomenclature, location, serial number, estimated travel value).
(a) Solicitations shall include a request for offerors to state prices—
(1) For the new items being acquired without any exchange; and
(2) For the new items with the exchange (trade-in allowance) for the exchange property listed.
(b) The contracting officer is not obligated to award on an exchange basis. If the lowest evaluated offer is an offer
(c) Exchanges may be made only with the successful offeror. When the successful offer includes an exchange, award one contract for both the acquisition of the new property and the trade-in of the exchange property. The only exception is when the items must be acquired against a mandatory Federal supply schedule contract, in which case, award a separate contract for the exchange.
Use the provision at 252.217-7002, Offering Property for Exchange, when offering nonexcess personal property for exchange. Allow a minimum of 14 calendar days for the inspection period in paragraph (b) of the clause if the exchange property is in the continental United States. Allow at least 21 calendar days outside the United States.
This subpart contains acquisition policies and procedures for master agreements for repair and alteration of vessels.
(a)
(1) Is a written instrument of understanding, negotiated between a contracting activity and a contractor that—
(A) Contains contract clauses, terms, and conditions applying to future contracts for repairs, alterations, and/or additions to vessels; and
(B) Contemplates separate future contracts that will incorporate by reference or attachment the required and applicable clauses agreed upon in the master agreement.
(2) Is not a contract.
(b)
(1) Is a fixed price contract incorporating, by reference or attachment, a master agreement for repair and alteration of vessels;
(2) May include clauses pertaining to subjects not covered by the master agreement; but applicable to the job order being awarded; and
(3) Applies to a specific acquisition and sets forth the scope of work, price, delivery date, and other appropriate terms that apply to the particular job order.
(a) Activities shall enter into master agreements for repair and alteration of vessels with all prospective contractors located within the United States, its possessions, or Puerto Rico, which—
(1) Request ship repair work; and
(2) Which possess the organization and facilities to perform the work satisfactorily. (Issuance of a master agreement does not indicate approval of the contractor's facility for any particular acquisition and is not an affirmative determination of responsibility under FAR subpart 9.1 for any particular acquisition.)
(b) Activities may use master agreements in work with prospective contractors located outside the United States, its possessions, or Puerto Rico.
(c) Activities may issue job orders under master agreements to effect repairs, alterations, and/or additions to vessels belonging to foreign governments.
(1) Contractors shall treat vessels of a foreign government as if they were vessels of the U.S. Government whenever requested to do so by the contracting officer.
(2) Identify the vessel and the foreign government in the solicitation and job order.
(a) A Master agreement shall contain all clauses required by 217.7104(a), statute and executive order.
(b) The following format may be adapted to fit specific circumstances:
(1) This agreement is entered into this
(2) The clauses in this agreement, shall be incorporated, by reference or attachment, in job orders issued under this agreement to effect repairs, alterations, and/or additions to vessels.
(3) By giving 30 days written notice, either party to this agreement has the right to cancel it without affecting the rights and liabilities under any job order existing at the time of cancellation. The Contractor shall perform, under the terms of this agreement, all work covered by any job order awarded before the effective date of the cancellation.
(4) This agreement may be modified only by mutual agreement of the parties. A modification of this agreement shall not affect any job order in existence at the time of modification, unless the parties agree otherwise.
(5) The rights and obligations of the parties to this agreement are set forth in this agreement and the clauses of any job orders issued under this agreement. In the event there is an inconsistency between this agreement and any job order, the provisions of this agreement shall govern.
(6) This agreement shall remain in effect until canceled by either party.
(a) Master agreements remain in effect until canceled by either the contractor or the contracting officer.
(b) Master agreements can be canceled by either the contractor or the contracting officer by giving 30 days written notice to the other.
(c) Cancellation of a master agreement does not affect the rights and liabilities under any job order existing at the time of cancellation. The contractor must continue to perform all work covered by any job order issued before the effective date of cancellation of the master agreement.
(a) When a requirement arises within the United States, its possessions, or Puerto Rico for the type of work covered by the master agreement, solicit offers from prospective contractors that—
(1) Previously executed a master agreement; or
(2) Have not previously executed a master agreement, but possess the necessary qualifications to perform the work and agree to execute a master agreement before award of a job order.
(b) Prepare the solicitation in the uniform contract format and in accordance with FAR Subpart 14.2 or 15.2, as applicable.
(c) Include in the solicitation—
(1) The nature of the work to be performed;
(2) The date the vessel will be available to the contractor;
(3) The date the work is to be completed; and
(4) Whether bulk ammunition is aboard the vessel.
(d) Unless the solicitation states otherwise, offers are to be based on performance at the contractor's site.
(e) Solicitations processed under negotiated acquisition procedures shall require offerors to include a breakdown of the price with reasonable supporting detail in whatever format and detail the contracting officer may request.
(f) Where practicable, afford potential offerors an opportunity to inspect the item needing repair or alteration.
Award job orders in accordance with FAR Subpart 14.4 or 15.5.
(a) The contracting officer, without soliciting offers, may issue a written job order to a contractor that has previously executed a master agreement when—
(i) Delay in the performance of necessary repair work would endanger a vessel, its cargo or stores; or
(ii) Military necessity requires immediate work on a vessel.
(b) Process this type of undefinitized contract action in accordance with subpart 217.74.
(c) Negotiate a price as soon as practicable after the issuance of an undefinitized order and definitize the job order upon completing negotiations.
If the nature of any repairs is such that their extent and probable cost cannot be ascertained readily, the solicitation should—
(a) Solicit offers for determining the nature and extent of the repairs;
(b) Provide that upon determination by the contracting officer of what work is necessary, the contractor, if requested by the contracting officer, shall negotiate prices for performance of the repairs; and
(c) Provide that prices for the repairs, if ordered, will be set forth in a modification of the job order.
(a) Review each master agreement at least annually before the anniversary of its effective date and revise it as necessary to conform to the requirements of the FAR and DFARS. Statutory or other mandatory changes may require review and revision earlier than one year.
(b) A master agreement shall be changed only by modifying the master agreement itself. It shall not be changed through a job order.
(c) A modification to a master agreement shall not affect job orders issued before the effective date of the modification.
(a) Use the following clauses in solicitations for, and in, master agreements for repair and alteration of vessels:
(1) 252.217-7003, Changes.
(2) 252.217-7004, Job Orders and Compensation.
(3) 252.217-7005, Inspection and Manner of Doing Work.
(4) 252.217-7006, Title.
(5) 252.217-7007, Payments.
(6) 252.217-7008, Bonds.
(7) 252.217-7009, Default.
(8) 252.217-7010, Performance.
(9) 252.217-7011, Access to Vessel.
(10) 252.217-7012, Liability and Insurance.
(11) 252.217-7013, Guarantees.
(12) 252.217-7014, Discharge of Liens.
(13) 252.217-7015, Safety and Health.
(14) 252.217-7016, Plant Protection, as applicable.
(b)(1) Incorporate in solicitations for, and in, job orders, the clauses in the master agreement, and any other clauses on subjects not covered by the master agreement, but applicable to the job order to be awarded.
(2) Use the clause at 252.217-7016, Plant Protection, in job orders where performance is to occur at the contractor's facility.
This subpart provides special policies and requirements for acquisition of perishable bakery and dairy products.
(a) Include the following chemical and microbiological requirements in solicitations and resulting contracts for milk, milk products, and cultured products (as defined in the Veterinary/Medical Wholesomeness Assurance Program for Fresh and Cultured Dairy Products and Frozen Desserts (AR-40-70/NAVSUPINST 4355.6/AFR 161-46/MCO 10110.44)):
(1)
(2)
(b) When the contractor is required to furnish its own cabinets for dispensing milk from bulk containers—
(1) Include the following information in the solicitation—
(i) The number (or estimated number) of dispenser cabinets required;
(ii) Whether metal stands for the cabinets are required;
(iii) The number of cabinets required with a capacity of two containers each; and
(iv) The number required with a capacity of three containers each.
(2) Include the contractor's list of cabinet equipment in the schedule of the contract.
(c) The contracting officer shall notify the Government quality assurance representative of code changes approved under the clause at 252.217-7022, Code Dating.
Normally use requirements contracts for bakery and dairy products. Other indefinite delivery contracts and other contract types may be used as appropriate.
(a) Use the following additional clauses in solicitations and contracts for perishable bakery and dairy products—
(1) 252.217-7017, Time of Delivery. Use Alternate I when the contract is other than a requirements contract. Insert the number of hours in paragraph (c) of Alternate I.
(2) 252.217-7018, Change in Plant Location.
(3) 252.217-7019, Sanitary Conditions. Use Alternate I when the contract is other than a requirements contract.
(4) 252.217-7022, Code Dating. Use this clause only when the schedule or a specification requires labels showing the date of pasteurization, manufacture, production, or processing.
(5) 252.217-7023, Marking. Do not use this clause when MIL-STD-129, Marking for Shipment and Storage, is required.
(6) 252.217-7024, Responsibility for Containers and Equipment. Use when contractor is required to provide reusable containers and equipment.
(b) Use the following additional clauses in solicitations and contracts for perishable dairy products—
(1) 252.217-7020, Examination and Testing. Use Alternate I when the contract is an indefinite quantity contract.
(2) 252.217-7021, Deficiency Adjustment.
(3) 252.217-7025, Containers and Equipment.
This subpart implements 10 U.S.C. 2384. It contains policy and procedures for requiring contractors to identify the actual manufacturer of supplies furnished to DoD.
Contractors shall identify their sources of supply in contracts for supplies. Contractor identification of sources of supply enables solicitation, in subsequent acquisitions, of actual manufacturers or other suppliers of items. This enhances competition and potentially avoids payment of additional costs for no significant added value.
(a) Whenever practicable, include a requirement for contractor identification of sources of supply in all contracts for the delivery of supplies. The identification shall include—
(1) The item's actual manufacturer or producer, or all the contractor's sources for the item;
(2) The item's national stock number (if there is one);
(3) The item identification number used by—
(i) The actual manufacturer or producer of the item; or
(ii) Each of the contractor's sources for the item; and
(4) The source of any technical data delivered under the contract.
(b) The requirement in paragraph (a) of this section does not apply to contracts that are—
(1) For commercial items; or
(2) Valued at or below the simplified acquisition threshold.
(a) Use the provision at 252.217-7026, Identification of Sources of Supply, or
(1) Using FAR 6.302-5;
(2) The contracting officer already has the information required by the provision (e.g., the information was obtained under other acquisitions);
(3) The contract is for subsistence, clothing or textiles, fuels, or supplies purchased and used outside the United States;
(4) The contracting officer determines that it would not be practicable to require offerors/contractors to provide the information, e.g., nonrepetitive local purchases; or
(5) The contracting officer determines that the exception at 217.7302(b) applies to all items under the solicitation.
(b) If appropriate, use the provision at 252.217-7026, Identification of Sources of Supply, or one substantially the same, in service contracts requiring the delivery of supplies.
This subpart prescribes policies and procedures implementing 10 U.S.C. 2326.
As used in this subpart—
(a)
(1) It includes contract modifications for additional supplies or services.
(2) It does not include change orders, administrative changes, funding modifications, or any other contract modifications that are within the scope and under the terms of the contract, e.g., engineering change proposals, value engineering change proposals, and over and above work requests as described in subpart 217.77.
(b)
(c)
(1) Information in the proposal; and
(2) Any other information that the contracting officer has determined DoD needs to review in connection with the contract.
(d)
The following undefinitized contract actions (UCAs) are not subject to this subpart, but the contracting officer should apply the policy to them (and to changes under the Changes clause) to the maximum extent practicable—
(a) UCAs for foreign military sales;
(b) Purchases at or below the simplified acquisition threshold;
(c) Special access programs;
(d) Congressionally mandated long-lead procurement contracts.
DoD policy is that undefinitized contract actions shall—
(a) Be used only when—
(1) The negotiation of a definitive contract action is not possible in sufficient time to meet the Government's requirements; and
(2) The Government's interest demands that the contractor be given a binding commitment so that contract performance can begin immediately.
(b) Be as complete and definite as practicable under the particular circumstances.
The contracting officer shall obtain approval from the head of the contracting activity before—
(a) Entering into a UCA. The request for approval must fully explain the need to begin performance before
(b) Including requirements for non-urgent spare parts and support equipment in a UCA. The request should show that inclusion of the non-urgent items is consistent with good business practices and in the best interest of the United States.
(c) Modifying the scope of a UCA when performance has already begun. The request should show that the modification is consistent with good business practices and in the best interests of the United States.
UCAs shall include a not-to-exceed price.
(a) UCAs shall contain definitization schedules that provide for definitization by the earlier of—
(1) The date that is 180 days after issuance of the action (this date may be extended but may not exceed the date that is 180 days after the contractor submits a qualifying proposal); or
(2) The date on which the amount of funds obligated under the contract action is equal to more than 50 percent of the not-to-exceed price.
(b) Submission of a qualifying proposal in accordance with the definitization schedule is a material element of the contract. If the contractor does not submit a timely qualifying proposal, the contracting officer may suspend or reduce progress payments under FAR 32.503-6, or take other appropriate action.
The Government shall not obligate more than 50 percent of the not-to-exceed price before definitization. However, if a contractor submits a qualifying proposal before 50 percent of the not-to-exceed price has been obligated by the Government, then the limitation on obligations before definitization may be increased to no more than 75 percent (see 232.102-70 for coverage on provisional delivery payments).
(a) The limitations in 217.7404-2, 217.7404-3, and 217.7404-4 do not apply to UCAs for the purchase of initial spares.
(b) The head of an agency may waive the limitations in 217.7404-2, 217.7404-3, and 217.7404-4 for UCAs if the head of the agency determines that the waiver is necessary to support—
(1) A contingency operation as defined in 10 U.S.C. 101(a)(13); or
(2) A humanitarian or peacekeeping operation as defined in 10 U.S.C. 2302(7).
When the final price of a UCA is negotiated after a substantial portion of the required performance has been completed, the head of the agency shall ensure the profit allowed reflects—
(a) Any reduced cost risk to the contractor for costs incurred during contract performance before negotiation of the final price; and
(b) The contractor's reduced cost risk for costs incurred during performance of the remainder of the contract.
For each definitization modification, the contracting officer shall include all data required by 243.171.
(a) Use the clause at FAR 52.216-24, Limitation of Government Liability, in all UCAs, solicitations associated with UCAs, basic ordering agreements, indefinite delivery contracts, and any other type of contract providing for the use of UCAs.
(b) Use the clause at 252.217-7027, Contract Definitization, in all UCAs, solicitations associated with UCAs, basic ordering agreements, indefinite delivery contracts, and any other type of contract providing for the use of UCAs. Insert the applicable information in paragraphs (a), (b), and (d) of the clause. If, at the time of entering into
This subpart provides guidance on additional requirements related to acquisition of replenishment parts (as defined in appendix E).
Departments and agencies—
(a) May acquire replenishment parts concurrently with production of the end item.
(b) Shall provide for full and open competition when fully adequate drawings and any other needed data are available with the right to use for acquisition purposes (see part 227). However—
(1) When data is not available for a competitive acquisition, use one of the procedures in 217.7503.
(2) Replenishment parts must be acquired so as to ensure the safe, dependable, and effective operation of the equipment. Where this assurance is not possible with new sources, competition may be limited to the original manufacturer of the equipment or other sources that have previously manufactured or furnished the parts as long as the action is justified.
(c) Shall follow the limitations on price increases in 217.7504.
(a) Spares acquisition integrated with production (SAIP) is a technique used to acquire replenishment parts concurrently with parts being produced for the end item.
(b) DoD acquisition managers select parts for SAIP under the criteria in DoDI 4245.12, Spares Acquisition Integrated With Production (SAIP).
(c) Include appropriately tailored provisions in the contract when SAIP is used.
When acquiring a part for which the Government does not have necessary data with rights to use in a specification or drawing for competitive acquisition, use one of the following procedures in order of preference—
(a) When items of identical design are not required, the acquisition may still be conducted through full and open competition by using a performance specification or other similar technical requirement or purchase description that does not contain data with restricted rights. Two methods are—
(1) Two-step sealed bidding; and
(2) Brand name or equal purchase descriptions.
(b) When other than full and open competition is authorized under FAR part 6, acquire the part from the firm which developed or designed the item or process, or its licensees, provided productive capacity and quality are adequate and the price is fair and reasonable.
(c) When additional sources are needed and the procedures in paragraph (a) of this section are not practicable, consider the following alternatives—
(1) Encourage the developer to license others to manufacture the parts;
(2) Acquire the necessary rights in data;
(3) Use a leader company acquisition technique (FAR subpart 17.4) when complex technical equipment is involved and establishing satisfactory additional sources will require technical assistance as well as data; or
(4) Incorporate a priced option in the contract which allows the Government to require the contractor to establish a second source.
(d) As a last alternative, the contracting activity may develop a design specification for competitive acquisition through reverse engineering. Contracting activities shall not do reverse engineering unless—
(1) Significant cost savings can be demonstrated; and
(2) The action is authorized by the head of the contracting activity.
This section provides implementing guidance for section 1215 of Public Law 98-94 (10 U.S.C. 2452 note).
(a) The contracting officer shall not award, on a sole source basis, a contract for any centrally managed replenishment part when the price of the part has increased by 25 percent or more over the most recent 12-month period.
(1) Before computing the percentage difference between the current price and the prior price, adjust for quantity, escalation, and other factors necessary to achieve comparability.
(2) Departments and agencies may specify an alternate percentage or percentages for contracts at or below the simplified acquisition threshold.
(b) The contracting officer may award a contract for a part, the price of which exceeds the limitation in paragraph (a) of this section, if the contracting officer certifies in writing to the head of the contracting activity before award that—
(1) The contracting officer has evaluated the price of the part and concluded that the price increase is fair and reasonable; or
(2) The national security interests of the United States require purchase of the part despite the price increase.
(c) The fact that a particular price has not exceeded the limitation in paragraph (a) of this section does not relieve the contracting officer of the responsibility for obtaining a fair and reasonable price.
(d) Contracting officers may include a provision in sole source solicitations requiring that the offeror supply with its proposal, price and quantity data on any government orders for the replenishment part issued within the most recent 12 months.
This subpart contains contract requirements and procedures for items to be provisioned. For technical requirements of provisioning, see DoDD 4140.40, Provisioning of End Items of Material. For breakout requirements, see appendix E.
As used in this subpart,
(a)
(b)
(c)
(d)
(e)
(1) Instructions, such as the provisioning method to be used;
(2) The extent of provisioning technical documentation and data needed (including administrative requirements for submission and distribution);
(3) The type and location of provisioning conferences;
(4) Sample article requirements;
(5) The delivery schedule;
(6) Packaging and marking requirements for provisioned items; and
(7) Requirements for provisioning screening.
(f)
Contracts containing provisioning requirements shall—
(a) List the provisioning functions to be performed and who will perform them;
(b) Include a provisioning requirements statement or specify a time limit for its incorporation into the contract by modification (revisions to the provisioning requirements statement shall also be incorporated by contract modification);
(c) Include on the DD Form 1423, Contract Data Requirements List, a schedule for delivery of provisioning technical documentation, or provide for the schedule to be incorporated later by contract modification;
(d) Require flowdown of the appropriate provisioning technical documentation requirement when the subcontractor prepares the documentation;
(e) Specify any applicable procedures for interim release by the contractor of long lead time items, and include ordering and funding instructions for such items. As a minimum, the instructions shall require the contractor to advise the contracting officer or provisioning activity at least 30 days before release of the items, their estimated costs, and the effective date of release;
(f) Specify the activity designated to issue provisioned items orders, i.e., contracting officer, provisioning activity, or administrative contracting officer. When it is expected that more than one activity will place provisioned items orders against the contract, state the requirements for provisioned items of each activity as separate contract line items;
(g) Provide a definitization schedule (normally 120 days after receipt of the contractor's proposal), and a timeframe for the contractor to furnish price proposals for provisioned items orders (normally 60 days after order issuance);
(h) Specify exhibit identifiers applicable to the contract line/subline items; and
(i) Include procedures for processing changes (including cancellations) in quantities of items ordered.
(a) Use the Standard Form 30, Amendment of Solicitation/Modification of Contract, to—
(1) Issue provisioned items orders;
(2) Decrease or cancel quantities of items ordered; and
(3) Cover the contractor's interim release of long lead items when the contracting officer approves the release (if the release is not approved, the contracting officer shall notify the contractor to cancel the items).
(b) Include in Block 14 of the Standard Form 30—
(1) The term PROVISIONED ITEMS ORDER in capital letters and underlined; and
(2) The appropriate exhibit identifier(s) for all attached exhibits.
(c) Obligate funds to cover the estimated price of the items being ordered. Show individual estimated prices for each exhibit line item on the accounting and payment office copies.
(d) Distribution is the same as for the basic contract (see FAR 4.2). However, if the exhibits are voluminous, the contracting officer may restrict distribution of the exhibits to the contract administration office.
(e) See subpart 217.74 for additional guidance and limitations on the use of undefinitized contract actions.
When requested by the contracting officer or provisioning activity, the contract administration office shall assist the contracting officer or provisioning activity in scheduling and determining the types of provisioning conferences required, e.g., guidance
The contract administration office (CAO) shall monitor contracts containing provisioning requirements. As a minimum the CAO shall—
(a) Ensure that the contractor understands the provisioning requirements;
(b) Review contractor progress in the preparation of provisioning technical documentation and, if requested by the contracting officer or provisioning activity, inspect it for format and content;
(c) Ensure the prime contractor flows-down provisioning requirements to any subcontractor charged with preparation of documentation;
(d) Advise the contracting office or provisioning activity of delays in delivery of provisioning technical documentation or other related problems (see FAR subpart 42.11);
(e) Ensure contractor compliance with contract requirements concerning the assignment of national stock numbers; and
(f) Ensure that the contractor complies with contractual criteria for release of long lead time items.
(a) The administrative contracting officer (ACO) shall definitize provisioned items orders within the prescribed schedule.
(b) If the provisioned items order does not contain a delivery date, or the contractor cannot meet the date, the ACO shall coordinate the negotiated schedule with the contracting officer or provisioning activity before execution of the supplemental agreement.
(c) The ACO shall maintain records of provisioned items orders showing—
(1) The adequacy of obligated funds;
(2) Due dates for price proposals; and
(3) Actions taken to obtain additional funds or to deobligate excess funds.
This subpart prescribes policies and procedures for acquisition of over and above work.
(a) Contracts for the performance of maintenance, overhaul, modification, and repair of various items (e.g., aircraft, engines, ground support equipment, ships) generally contain over and above work requirements. When they do, the contracting officer shall establish a separate contract line item for the over and above work.
(b) Over and above requirements task the contractor to identify needed repairs and recommend corrective action during contract performance. The contractor submits a work request to identify the over and above work and, as appropriate, the Government authorizes the contractor to proceed.
(c) The clause at 252.217-7028, Over and Above Work, requires the contractor and the contracting officer responsible for administering the contract to negotiate specific procedures for Government administration and contractor performance of over and above work requests.
(d) The contracting officer may issue a blanket work request authorization describing the manner in which individual over and above work requests will be administered and setting forth a dollar limitation for all over and above work under the contract. The blanket work request authorization may be in the form of a letter or contract modification (Standard Form 30).
(e) Over and above work requests are within the scope of the contract. Therefore, procedures in subpart 217.74, Undefinitized Contractual Actions, do not apply.
(f) To the maximum extent practical, over and above work shall be negotiated prior to performance of the work.
Use the clause at 252.217-7028, Over and Above Work, in solicitations and contracts containing requirements for over and above work, except as provided for in subpart 217.71.
41 U.S.C. 421 and 48 CFR chapter 1.
This part also implements 10 U.S.C. 2323, which sets a goal for DoD for each of fiscal years 1987 through 2000 to—
(1) Award five percent of contract and subcontract dollars to small disadvantaged business (SDB) concerns, historically black colleges and universities (HBCUs), and minority institutions (MIs) (See part 226 for policy/procedures on HBCU/MIs); and
(2) Maximize the number of such entities in DoD contracting and subcontracting.
(1) At FAR 52.219-23(a) (i.e., a firm is considered a small disadvantaged business (SDB) concern by receiving certification by the Small Business Administration and meeting the other listed criteria), except as specified in paragraph (2) of this definition.
(2) At FAR 52.219-23(a) or 52.219-1(b)(2) for the following purposes (i.e., a firm is considered an SDB concern by either receiving certification by the Small Business Administration and meeting the other listed criteria or self-representing its status for general statistical purposes):
(i) A higher customary progress payment rate for SDB concerns (see 232.501-1(a)(i) and 252.232-7004(c)).
(ii) A lower threshold for inclusion of customary progress payments in contracts with SDB concerns (see 232.502-1).
(iii) The prompt payment policy for SDB concerns in 232. 903 and 232.905(2).
(iv) Reporting contract actions with SDB concerns (“Type of Business” on the DD Form 350, Individual Contracting Action Report (see 253.204-70(d)(5)(i)(A)) or “Small Disadvantaged Business (SDB) Actions” on the DD Form 1057, Monthly Contracting Summary of Actions $25,000 or Less (see 253.204-71(g)(2)).
(a) The DoD will use the Section 8(a) program, small disadvantaged business evaluation preferences, advance payments, outreach, and technical assistance to meet its five percent goal for contract and subcontract awards to small disadvantaged businesses.
(d)(2) For the defense agencies, the director of the Office of Small and Disadvantaged Business Utilization shall be appointed by, be responsible to, and report directly to the director deputy director of the defense agency.
(7) The responsibility for assigning small business technical advisors is delegated to the head of the contracting activity.
(9) Contracting activity small business specialists perform this function by—
(A) Reviewing and making recommendations for all acquisitions over $10,000, except those restricted for exclusive small business participation;
(B) Making the review before issue of the solicitation or contract modification and documenting it on DD Form 2579, Small Business Coordination Record;
(C) Referring recommendations which have been rejected by the contracting officer to the Small Business Administration (SBA) procurement center representative. However, in the case of a rejected small disadvantaged business set-aside recommendation or if an SBA representative is not assigned or available, the specialist refers the matter to the specialist's appointing authority.
(e) Contracting and contract administration activities appoint small business specialists as directed by DoDD 4205.1, DoD Small Business and Small Disadvantaged Business Utilization Programs. Specialists—
(i) Report directly and are responsible only to their appointing authority;
(ii) Make sure that the contracting activity takes the necessary actions to implement small business, historically black college and university/minority institution, and labor surplus area programs;
(iii) Advise and assist contracting, program manager, and requirements personnel on all matters which affect small businesses, historically black colleges and universities or minority institutions, and labor surplus area concerns;
(iv) Aid, counsel, and assist small business, small disadvantaged business, historically black colleges and universities, and minority institutions by providing—
(A) Advice concerning acquisition procedures;
(B) Information regarding proposed acquisitions; and
(C) Instructions on preparation of proposals in the interpretation of standard clauses, representations, and certifications;
(v) Maintain an outreach program (including participation in Government-industry conferences and regional interagency small business councils) designed to locate and develop information on the technical competence of small business, small disadvantaged business concerns, historically black colleges and universities, and minority institutions;
(vi) Ensure that financial assistance, available under existing regulations, is offered and also assist small business concerns in obtaining payments under their contracts, late payment, interest penalties, or information on contractual payment provisions;
(vii) Provide assistance to contracting officers in determining the need for and acceptability of subcontracting plans and assist administrative contracting officers (see 219.706(a)(ii)) in evaluating, monitoring, reviewing, and documenting contract performance to determine compliance with subcontracting plans; and
(viii) Recommend to the appointing authority the activity's small and disadvantaged business program goals, including goal assignments to subordinate contracting offices; monitor the activity's performance against these goals; and recommend action to correct reporting errors/deficiencies.
(f) The Directors, Office of Small and Disadvantaged Business Utilization, of the military departments and defense agencies are responsible for determining whether use of the price evaluation adjustment to achieve a small disadvantaged business goal has caused non-SDB firms in a particular Standard Industrial Classification Major Group to bear an undue burden or other inappropriate effect. A copy of each determination shall be forwarded to the Office of Small and Disadvantaged Business Utilization, Office of the Under Secretary of Defense (Acquisition and Technology), simultaneously with submittal to the Office of Federal Procurement Policy.
The DoD will maximize the use of small business concerns as planned producers in the Industrial Readiness Planning Program.
Determine the premium percentage to be entered in Item D4E of the Individual Contracting Action Report (DD Form 350), (see 253.204-70), as follows:
(1) For small disadvantaged business or historically black college and university/minority institution set-asides, divide the difference between the fair market price and the award price by the fair market price.
(2) For price evaluation adjustment awards (see FAR Subpart 19.11), divide the difference between the low responsive offer and the award price by the low responsive offer.
(3) For partial small business set-asides with preferential consideration for small disadvantaged business concerns, divide the difference between the award price on the non-set-aside portion and the award price on the set-aside portion by the award price on the non-set-aside portion.
(b) Within 60 days after the end of each fiscal year, departments and agencies shall submit the report to the Secretary of Defense, who will report to the SBA on behalf of all DoD departments and agencies. Reports must include—
(i) Justification for failure to meet goals established by the Office of the Secretary of Defense; and
(ii) Planned actions for increasing participation by such firms in future contract awards.
(b) The contracting activity small business specialist is the primary activity focal point for interface with the SBA.
Do not set aside acquisitions for—
(1) Supplies which were developed and financed, in whole or in part, by Canadian sources under the U.S.-Canadian Defense Development Sharing Program; or
(2) Architect-engineer services for military construction or family housing projects of $85,000 or more (10 U.S.C. 2855), including indefinite delivery and indefinite quantity contracts if the value of all anticipated orders is expected to total $85,000 or more.
(a) Unless the contracting officer determines that the criteria for set-aside cannot be met, set aside for small business concerns acquisitions for—
(i) Construction, including maintenance and repairs, under $2 million;
(ii) Dredging under $1 million; and
(iii) Architect-engineer services for military construction or family housing projects of under $85,000.
(c)(1) If the Standard Industrial Classification Major Group of the acquisition is one in which use of a price evaluation adjustment for small disadvantaged business concerns is currently authorized (see FAR 19.201(b)), the adjustment shall be applied to the non-set-aside portion.
(b) The designee shall be at a level no lower than chief of the contracting office.
When making a nonresponsibility determination on a small business concern, the contracting officer shall notify the contracting activity's small business specialist.
(c)(i) If the contracting officer believes the agency should appeal, the contracting officer shall immediately inform the departmental director of the Office of Small and Disadvantaged Business Utilization, and send the director, through departmental channels—
(A) A request for appeal, summarizing the issues. The request must be sent to arrive within five working days after receipt of the SBA Headquarters' written position.
(B) An appeal file, documenting the contracting activity's position. The file must be sent to arrive within five working days after transmission of the request.
(ii) The departmental director will determine whether the agency will appeal and will notify the SBA of the agency's intent.
(a) Section 834 of Public Law 101-189, as amended, requires the DoD to establish a test program to determine whether comprehensive subcontracting plans on a corporate, division, or plant-wide basis will reduce administrative burdens while enhancing subcontracting opportunities for small and small disadvantaged business concerns.
(i) The test program—
(A) Will be conducted—
(
(
(
(B) Permits contractors selected for participation in the test program by the designated contracting activities to—
(
(
(ii) During the test period, comprehensive subcontracting plans will—
(A) Be negotiated on an annual basis by the designated contracting activities;
(B) Be incorporated by the contractors’ cognizant contract administration activity into all of the contractors’ active DoD contracts that require a plan;
(C) Be accepted for use by contractors participating in the test, whether performing at the prime or subcontract level; and
(D) Not be subject to application of liquidated damages during the period of the test program (Section 402, Pub. L. 101-574).
(a) Qualified nonprofit agencies for the blind and other severely disabled, that have been approved by the Committee for Purchase from People Who Are Blind or Severely Disabled under the Javits-Wagner-O’Day Act (41 U.S.C. 46-48), are eligible to participate in the program as a result of 10 U.S.C. 2410d and Section 9077 of Pub. L. 102-396 and similar sections in subsequent Defense appropriations acts. Under this authority, subcontracts awarded to such entities may be counted toward the prime contractor's small business subcontracting goal through fiscal year 1999.
(2)(A) To be eligible as an SDB subcontractor, a concern must meet the definition in 219.001.
(B) To be eligible as a historically black college or university or minority institution subcontractor, such entity must meet the definition in the clause at 252.219-7003, Small Business and Small Disadvantaged Business Subcontracting Plan (DoD Contracts).
(b) A contractor may also rely on the written representation as to status of—
(i) A historically black college or university or minority institution; or
(ii) A qualified nonprofit agency for the blind or other severely disabled approved by the Committee for Purchase from People Who Are Blind or Severely Disabled.
(a)(1) The goal for use of small disadvantaged business concerns shall include subcontracts with historically black colleges and universities and minority institutions (see subpart 226.70), in addition to subcontracts with small
(4) In those subcontracting plans which specifically identify small, small disadvantaged, and women-owned small businesses, prime contractors shall notify the administrative contracting officer of any substitutions of firms that are not small, small disadvantaged, or women-owned small businesses for the firms listed in the subcontracting plan. Notifications shall be in writing and shall occur within a reasonable period of time after award of the subcontract. Contractor-specified formats shall be acceptable.
(d) See 215.304 for unique DoD requirements.
(d) Challenge any subcontracting plan that does not contain positive goals and consider the extent to which an offeror plans to use competition restricted to historically black colleges and universities or minority institutions. A small disadvantaged business goal of less than five percent must be approved two levels above the contracting officer.
(a)(i) The contract administration office also is responsible for reviewing, evaluating, and approving master subcontracting plans.
(ii) The small business specialist supports the administrative contracting officer in evaluating a contractor's performance and compliance with its subcontracting plan.
(b)(1)(A) Use the clause at 252.219-7003, Small, Small Disadvantaged and Women-Owned Small Business Subcontracting Plan (DoD Contracts), in solicitations and contracts that contain the clause at FAR 52.219-9, Small, Small Disadvantaged and Women-Owned Small Business Subcontracting Plan.
(B) In contracts with contractors which have comprehensive subcontracting plans approved under the test program described in 219.702(a), use the clause at 252.219-7004, Small, Small Disadvantaged and Women-Owned Small Business Subcontracting Plan (Test Program), instead of the clauses at 252.219-7003, Small, Small Disadvantaged and Women-Owned Small Business Subcontracting Plan (DoD Contracts), and FAR 52.219-9, Small, Small Disadvantaged and Women-Owned Small Business Subcontracting Plan.
(2) In contracts with contractors which have comprehensive subcontracting plans approved under the test program described in 219.702(a), do not use the clause at FAR 52.219-16, Liquidated Damages—Small Business Subcontracting Plan.
(c)(1) Do not use the clause at FAR 52.219-10, Incentive Subcontracting Program, in contracts with contractors that have comprehensive subcontracting plans approved under the test program described in 219.702(a).
(a) By Memorandum of Understanding (MOU) dated May 6, 1998, between the Small Business Administration (SBA) and the Department of Defense (DoD), the SBA delegated to the
(b) Awards under the MOU may be awarded directly to the 8(a) participant on either a sole source or competitive basis.
(c) Contracts awarded under the MOU may be awarded directly to the 8(a) participant. An SBA signature on the contract is not required.
(b) Contracting activities should respond to SBA requests for contract support within 30 calendar days after receipt.
(c) Before considering a small business set-aside, review the acquisition for offering under the 8(a) Program.
(f) The 8(a) firms should be offered the opportunity to give a technical presentation.
(1) For requirements processed under the MOU cited in 219.80 (but see paragraph (2) of this subsection for procedures related to purchase orders that do not exceed the simplified acquisition threshold), the notification to the SBA shall clearly indicate that the requirement is being processed under the MOU. All notifications should be submitted in writing, using facsimile or electronic mail, when possible, and shall specify that—
(i) Under the MOU, an SBA acceptance or rejection of the offering is required within 5 working days of receipt of the offering; and
(ii)(A) For sole source requirements, an SBA acceptance shall include a size verification and a determination of the 8(a) firm's eligibility, and, upon acceptance, the contracting officer will solicit a proposal, conduct negotiations, and make award directly to the 8(a) firm; or
(B) For competitive requirements, upon acceptance, the contracting officer will solicit offers, conduct source selection, and, upon receipt of an eligibility verification, award a contract directly to the selected 8(a) firm.
(2) Under the MOU cited in 219.800, no separate agency offering or SBA acceptance is needed for requirements that are issued under purchase orders that do not exceed the simplified acquisition threshold. After an 8(a) contractor has been identified, the contracting officer shall establish the prices, terms, and conditions with the 8(a) contractor and shall prepare a purchase order consistent with the procedures in part 213 and FAR part 13, including the applicable clauses required by this subpart. No later than the day that the purchase order is provided to the 8(a) contractor, the contracting officer shall provide to the cognizant SBA Business Opportunity Specialist, using facsimile or electronic mail—
(i) A copy of the purchase order; and
(ii) A notice stating that the purchase order is being processed under the MOU. The notice also shall indicate that the 8(a) contractor will be deemed eligible for award and will automatically begin work under the purchase order unless, within 2 working days after SBA's receipt of the purchase
For requirements processed under the MOU cited in 219.800, SBA's acceptance is required within 5 working days (but see 219.804-2(2) for purchase orders that do not exceed the simplified acquisition threshold).
(c) For requirements processed under the MOU cited in 219.800—
(i) For sealed bid and negotiated acquisitions, the SBA will determine the eligibility of the firms and will advise the contracting officer within 2 working days after its receipt of a request for an eligibility determination; and
(ii) For negotiated acquisitions, the contracting officer may submit a request for an eligibility determination on as many as three of the most highly rated offerors.
For requirements processed under the MOU cited in 219.800—
(1) The contracting officer shall obtain cost or pricing data from the 8(a) contractor, if required by FAR subpart 15.4; and
(2) SBA concurrence in the negotiated price is not required. However, except for purchase orders not exceeding the simplified acquisition threshold, the contracting officer shall notify the SBA prior to withdrawing a requirement from the 8(a) Program due to failure to agree on price or other terms and conditions.
For requirements processed under the MOU cited in 219.800—
(1) The agency may negotiate directly with the 8(a) contractor. The contracting officer is responsible for initiating negotiations;
(2) The 8(a) contractor is responsible for negotiating within the time established by the contracting officer;
(3) If the 8(a) contractor does not negotiate within the established time and the agency cannot allow additional time, the contracting officer may, after notifying the SBA, proceed with the acquisition from other sources;
(4) If requested by the 8(a) contractor, the SBA may participate in negotiations; and
(5) SBA approval of the contract is not required.
(a) Awards under the MOU cited in 219.800 may be made directly to the 8(a) contractor and, except as provided in paragraph (b) of this subsection and in 219.811-3, award documents shall be prepared in accordance with procedures established for non-8(a) contracts, using any otherwise authorized award forms. The “Issued by” block shall identify the awarding DoD contracting office. The contractor's name and address shall be that of the 8(a) participant.
(b) Use the following alternative procedures for direct awards made under the MOU cited in 219.800:
(i) Cite 10 U.S.C. 2304(c)(5) as the authority for use of other than full and open competition;
(ii) Include the clause at 252.219-7009, which allows for direct award to the 8(a) contractor, and identify the cognizant SBA district office for the 8(a) contractor;
(iii) No SBA contract number is required; and
(iv) Do not require an SBA signature on the award document.
Awards made under the MOU cited in 219.800 shall be prepared in accordance with 219.811-1.
(1) Use the clause at 252.219-7009, Section 8(a) Direct Award, instead of the clauses at FAR 52.219-11, Special 8(a) Contract Conditions, FAR 52.219-12, Special 8(a) Subcontract Conditions, and FAR 52.219-17, Section 8(a) Award, in solicitations and contracts processed in accordance with the MOU cited in 219.800.
(2) Use the clause at FAR 52.219-18, Notification of Competition Limited to Eligible 8(a) Concerns, with 252.219-7010, Alternate A, in solicitations and contracts processed in accordance with the MOU cited in 219.800.
(3) Use the clause at 252.219-7011, Notification to Delay Performance, in solicitations and purchase orders issued in accordance with 219.804-2(2).
(d) Awards under the MOU cited in 219.800 are subject to Section 407 of Pub. L. 100-656. These contracts include the clause at 252.219-7009, Section 8(a) Direct Award, which requires the 8(a) contractor to notify the SBA and the contracting officer when ownership of the firm is being transferred.
(a)(3)(A) Architect-engineering services in support of military construction projects or military family housing projects are exempt from the Small Business Competitiveness Demonstration Program, except for the emerging small business (ESB) set-aside requirements. Accordingly, these shall—
(
(
(
(
(B) All requirements of the Small Business Competitiveness Demonstration Program apply to architect-engineer services in support of other than military construction projects or military housing objects, which otherwise meet criteria at FAR 19.1005(a)(3).
(b) The targeted industry categories for DoD are:
(b)(2) The Director, Small and Disadvantaged Business Utilization, Office of the Under Secretary of Defense (Acquisition and Technology), will determine whether reinstatement of small business set-asides are necessary to meet the agency goal and will recommend reinstatement to the Director, Defense Procurement. Military departments and defense agencies shall not reinstate small business set-asides unless directed by the Director, Defense Procurement.
(d) Reporting requirements are at 204.670-2.
(b) The price evaluation adjustment also shall not be used in acquisitions that are for commissary or exchange resale.
The contracting officer shall encourage increased subcontracting opportunities for SDB concerns in negotiated acquisitions by providing monetary incentives in the SIC Major Groups for which use of an evaluation factor or subfactor for participation of SDB concerns is currently authorized (see FAR 19.201(b)). Incentives for exceeding SDB subcontracting targets shall be paid only if an SDB subcontracting target was exceeded as a result of actual subcontract awards to SDBs, and not a result of developmental assistance credit under the Pilot Mentor-Prote
(c) The contracting officer shall, when contracting by negotiation, insert in solicitations and contracts containing the clause at FAR 52.219-25, Small Disadvantaged Business Participation Program-Disadvantaged Status and Reporting, a clause substantially the same as the clause at FAR 52.219-26, Small Disadvantaged Business Participation Program-Incentive Subcontracting, when authorized (see FAR 19.1203). The contracting officer may include an award fee provision in lieu of the incentive; in such cases, however, the contracting officer shall not use the clause at FAR 52.219-26. Do not use award fee provisions in contracts with contractors that have comprehensive subcontracting plans approved under the test program described in 219.702(a).
This subpart implements the Pilot Mentor-Protege Program established under section 831 of the National Defense Authorization Act for Fiscal Year 1991, Public Law 101-510, as amended. The purpose of the Program is to provide incentives for DoD contractors to assist small disadvantaged businesses in enhancing their capabilities and to increase participation of such firms in Government and commercial contracts. Qualified organizations employing the severely disabled, as defined in section 8064A of Public Law 102-172, are also eligible to participate as protege firms.
DoD policy and procedures for implementation of the Program are contained in appendix I to chapter 2, Policy and Procedures for the DoD Pilot Mentor-Protege Program.
The Program includes—
(a) Mentor firms, which are prime contractors with at least one active subcontracting plan negotiated under FAR subpart 19.7.
(b) Protege firms, which are small disadvantaged business (SDB) concerns or qualified organizations employing the severely disabled, eligible for receipt of Federal contracts and selected by the mentor firm.
(c) Mentor-protege agreements, which establish a developmental assistance program for a protege firm.
(d) Incentives, which may be provided to mentor firms by the DoD including:
(1) Reimbursement for developmental assistance costs through—
(i) A separate contract;
(ii) A separately priced contract line item on a DoD contract; or
(iii) Inclusion of program cost in indirect expense pools.
(2) Credit toward SDB subcontracting goals, established under a subcontracting plan negotiated under FAR subpart 19.7, for developmental assistance costs which are either reimbursed through indirect expense pools or are not reimbursed; or
(3) A combination of reimbursement and credit.
The procedures for application, acceptance, and participation in the program are in appendix I to chapter 2, Policy and Procedures for the DoD Pilot Mentor-Protege Program. The Director of Small and Disadvantaged Business Utilization, Office of the Under Secretary of Defense (Acquisition and Technology) approves contractors as mentor firms, approves mentor-protege agreements, and forwards approved mentor-protege agreements to the contracting officer when program funding is available through a DoD Program Manager.
Contracting officers shall—
(a) Negotiate an advance agreement on the treatment of developmental assistance costs for credit, reimbursement, or both, if the mentor firm proposes such an agreement, or delegate authority to negotiate to the administrative contracting officer (see FAR 31.109).
(b) Modify (without consideration) applicable contract(s) to incorporate the clause at 252.232-7005, Reimbursement of Subcontractor Advance Payments-DoD Pilot Mentor-Protege Program, when advance payments are provided by a mentor firm to a protege firm under the Program and the mentor firm requests reimbursement of advance payments.
(c) Modify (without consideration) applicable contract(s) to incorporate other than customary progress payments for small disadvantaged businesses in accordance with FAR 32.504(c) if such payments are provided by a mentor firm to a protege firm and the mentor firm requests reimbursement.
(d) Modify applicable contract(s) to establish a contract line item for reimbursement of developmental assistance costs—
(1) When funds have been made available for that purpose by a DoD program manager; and
(2) The contractor has an approved mentor-protege agreement.
(e) Advise contractors of reporting requirements in appendix I to chapter 2.
(a) Developmental assistance provided under an approved mentor-protege agreement is distinct from, and shall not duplicate, any effort that is the normal and expected product of the award and administration of the mentor firm's subcontracts. Costs associated with the latter shall be accumulated and charged in accordance with the contractor's approved accounting practices. Mentor firm costs which are eligible for reimbursement are set forth in appendix I to chapter 2.
(b) Before incurring any costs under the Program, mentor firms need to establish the accounting treatment of developmental assistance costs eligible for reimbursement or credit. Advance agreements are encouraged. To be eligible for reimbursement under the Program, costs must be incurred before October 1, 2000.
(c) If the mentor firm is suspended or debarred while performing under an approved mentor-protege agreement, the mentor firm may not be reimbursed or credited for developmental assistance costs incurred more than 30 days after the imposition of the suspension or debarment.
(d) Developmental assistance costs, incurred by a mentor firm before October 1, 2000, that are eligible for crediting under the Program may be credited towards subcontracting plan goals as set forth in appendix I to chapter 2.
Mentor firms shall report on the progress made under active mentor-protege agreements semi-annually as indicated in section I-111 of appendix I to chapter 2.
41 U.S.C. 421 and 48 CFR chapter 1.
(a) Contracting offices shall—
(i) Obtain departmental approval before contacting a national office of a labor organization, a Government agency headquarters, or any other organization on a labor relations matter;
(ii) Notify departmental headquarters as required in departmental procedures when contacted by the national office of any labor organization or Government agency headquarters;
(iii) Obtain the approval of the agency head on major policy decisions regarding labor relations matters such as recommendations for plant seizure or injunctive action relating to potential or actual work stoppages; and
(iv) Submit questions involving FAR part 22 or other contractor labor relations matters to the labor advisor.
The contract administration office shall—
(1) Notify the labor advisor, the contracting officer, and the head of the contracting activity when interference is likely; and
(2) Disseminate information on labor disputes in accordance with departmental procedures.
(a) Each department and agency shall determine the degree of impact of potential or actual labor disputes on its own programs and requirements. In making these determinations, consider, for example—
(1) Whether the dispute involves a product, project (including construction), or service which must be obtained in order to meet schedules for urgently needed military programs or requirements; and
(2) Whether alternative sources of supply for the product, project, or service are reasonably available to fulfill the requirement or program in time to maintain essential military schedules.
(b) Each contracting activity involved shall obtain and develop data reflecting the impact of a labor dispute on its requirements and programs. Upon determining the impact, the head of the contracting activity shall submit a report of findings and recommendations to the labor advisor. This reporting requirement is assigned Report Control Symbol DD-ACQ(AR)1153. The report must be in narrative form and must include—
(1) Location of dispute and name of contractor or subcontractor involved;
(2) A description of the impact, including how the specific items or services affect the specific programs or requirements;
(3) Identity of alternate sources available to furnish the supply or service within the time required; and
(4) A description of any action taken to reduce the impact.
(c) The head of the contracting activity shall submit impact reports to the agency head when—
(1) Specifically requested; or
(2) The department or agency considers the impact to be of sufficient urgency to warrant the attention of the agency head.
(d) The labor advisor will expand the report submitted under paragraph (c) of this subsection by addressing the following, as appropriate—
(1)
(2)
(i) For production programs, include requirements for each using military service. Where applicable, state in detail production schedule, inventory objectives, assets against these objectives, and critical shortages. For spares and highly expendable items, such as ground and air ammunition, show usage (consumption) rates and assets in absolute terms and in terms of daily, weekly, or monthly supplies. For components, include requirements for spares.
(ii) For projects, describe the potential adverse effects of a delay in meeting schedules, and its impact on the national security.
(iii) For services, describe how a loss or interruption affects the ability to support Defense operations in terms of traffic requirements, assets, testing programs, etc.
(3)
(i) Capabilities, if any, to substitute items or to use alternate sources and indicate the number of other facilities available and the relative capabilities of such facilities in meeting total requirements;
(ii) How much time would be required to replace the loss of the facilities or service affected by a work stoppage; and
(iii) The feasibility of transferring assets from theater to theater to relieve deficits in some areas of urgency.
(4)
(ii) Project the degree of criticality of a program, project, or service resulting from a work stoppage on a calendar basis, indicating the increased impact, if any, as the stoppage lengthens. Criticality is measured by the number of days required for the work stoppage to have an effect on operational capability. This time must be stated in terms of days.
(a) When a contractor is unable to deliver urgent and critical items because of a work stoppage at its facility, the contracting officer, before removing any items from the facility, shall—
(i) Before initiating any action, contact the labor advisor to obtain the opinion of the national office of the Federal Mediation and Conciliation Service or other mediation agency regarding the effect movement of the items would have on labor negotiations. Normally removals will not be made if they will adversely affect labor negotiations.
(ii) Upon the recommendation of the labor advisor, provide a written request for removal of the material to the cognizant contract administration office. Include the following information in the request—
(A) Contract number;
(B) A statement as to the urgency and criticality of the item needed;
(C) A description of the items to be moved (nature of the item, amount, approximate weight and cubic feet, item number, etc.);
(D) Mode of transportation by which the items are to be moved, if different than in the contract, and whether by Government or commercial bill of lading; and
(E) Destination of the material, if different from that specified in the contract.
(iii) With the assistance of the labor advisor or the commander of the contract administration office, attempt to have both the management and the labor representatives involved agree to shipment of the material by normal means.
(iv) If agreement for removal of the needed items cannot be reached following the procedures in paragraphs (a) (i) through (iii) of this subsection, the commander of the contract administration office, after obtaining approval
(v) If agreement for removal of the needed items cannot be reached following any of the procedures in paragraphs (a) (i) through (iv) of this subsection, refer the matter to the labor advisor with the information required by 222.101-3-70(b). If the labor advisor is unsuccessful in obtaining concurrence of the parties for the movement of the material and further action to obtain the material is deemed necessary, refer the matter to the agency head. Upon review and verification that the items are urgently or critically needed and cannot be moved with the consent of the parties, the agency head, on a nondelegable basis, may order removal of the items from the facility.
(a) Use the following procedures only in the order listed when a labor dispute delays performance of a contract for stevedoring services which are urgently needed.
(1) Attempt to have management and labor voluntarily agree to exempt military supplies from the labor dispute by continuing the movement of such material.
(2) Divert vessels to alternate ports able to provide necessary stevedoring services.
(3) Consider contracting with reliable alternative sources of supply within the stevedoring industry.
(4) Utilize civil service stevedores to perform the work performed by contract stevedores.
(5) Utilize military personnel to handle the cargo which was being handled by contract stevedores prior to the labor dispute.
(b) Notify the labor advisor when a deviation from the procedures in paragraph (a) of this subsection is required.
(1) The Department of Labor is responsible for the administration and enforcement of the Occupational Safety and Health Act (OSHA). Contracting officers shall—
(i) Direct all inquiries from contractors or contractor employees regarding the applicability or interpretation of the OSHA regulations to the Department of Labor; and
(ii) Upon request, provide the address of the appropriate field office of the Occupational Safety and Health Administration of the Department of Labor.
(2) Do not initiate any application for the suspension or relaxation of labor requirements without prior coordination with the labor advisor.
(a) The department/agency approving official shall—
(i) Obtain the concurrence of other appropriate approving officials; and
(ii) Seek agreement as to the contracts under which overtime premiums will be approved when—
(A) Two or more contracting offices have current contracts at the same contractor facility; and
(B) The approval of overtime by one contracting office will affect the performance or cost of contracts of another office. In the absence of evidence to the contrary, a contracting officer may rely on a contractor's statement that approval of overtime premium pay for one contract will not affect performance or payments under any other contract.
Upon receipt of notification of Contract Work Hours and Safety Standards Act violations, the contracting officer shall—
(1) Immediately withhold such funds as are available;
(2) Give the contractor written notification of the withholding and a statement of the basis for the liquidated damages assessment. The written notification shall also inform the contractor of its 60 days right to appeal the assessment, through the contracting officer, to the agency official responsible for acting on such appeals; and
(3) If funds available for withholding are insufficient to cover liquidated damages, ask the contractor to pay voluntarily such funds as are necessary to cover the total liquidated damage assessment.
(d)(i) The assessment shall become the final administrative determination of contractor liability for liquidated damages when—
(A) The contractor fails to appeal to the contracting agency within 60 days from the date of the withholding of funds;
(B) The department agency, following the contractor's appeals, issues a final order which affirms the assessment of liquidated damages or waives damages of $500 or less; or
(C) The Secretary of Labor takes final action on a recommendation of the agency head to waive or adjust liquidated damages in excess of $500.
(ii) Upon final administrative determination of the contractor's liability for liquidated damages, the contracting officer shall transmit withheld or collected funds determined to be owed the Government as liquidated damages to the servicing finance and accounting officer for crediting to the appropriate Government Treasury account. The contracting officer shall return any excess withheld funds to the contractor.
(a) Apply both the Service Contract Act (SCA) and the Davis-Bacon Act (DBA) to installation support contracts if—
(1) The contract is principally for services but also requires a substantial and segregable amount of construction, alteration, renovation, painting, or repair work; and
(2) The aggregate dollar value of such construction work exceeds or is expected to exceed $2,000.
(b) SCA coverage under the contract. Contract installation support requirements, such as plant operation and installation services (i.e., custodial, snow removal, etc.) are subject to the SCA. Apply SCA clauses and minimum wage and fringe benefit requirements to all contract service calls or orders for such maintenance and support work.
(c) DBA coverage under the contract. Contract construction, alteration, renovation, painting, and repair requirements (i.e., roof shingling, building structural repair, paving repairs, etc.) are subject to the DBA. Apply DBA clauses and minimum wage requirements to all contract service calls or orders for construction, alteration, renovation, painting, or repairs to buildings or other works.
(d) Repairs versus maintenance. Some contract work may be characterized as either DBA painting/repairs or SCA maintenance. For example, replacing broken windows, spot painting, or minor patching of a wall could be covered by either the DBA or the SCA. In those instances where a contract service call or order requires construction trade skills (i.e., carpenter, plumber, painter, etc.), but it is unclear whether the work required is SCA maintenance or DBA painting/repairs, apply the following rules—
(1) Individual service calls or orders which will require a total of 32 or more work-hours to perform shall be considered to be repair work subject to the DBA.
(2) Individual service calls or orders which will require less than 32 work-hours to perform shall be considered to be maintenance subject to the SCA.
(3) Painting work of 200 square feet or more to be performed under an individual service call or order shall be considered to be subject to the DBA regardless of the total work-hours required.
(e) The determination of labor standards application shall be made at the
(f) Contracting officers may not avoid application of the DBA by splitting individual tasks between orders or contracts.
Direct all questions regarding Department of Labor regulations to the labor advisor.
Not later than April 1 of each year, each department and agency shall furnish the Administrator, Wage and Hour Division, with a general outline of its proposed construction program for the coming fiscal year. The Department of Labor uses this information to determine where general wage determination surveys will be conducted.
(1) Indicate by individual project of $500,000 or more—
(i) The anticipated type of construction;
(ii) The estimated dollar value; and
(iii) The location in which the work is to be performed (city, town, village, county, or other civil subdivision of the state).
(2) The report format is contained in Department of Labor All Agency Memo 144, December 27, 1985.
(3) The report control number is 1671-DOL-AN.
(c)(5) Information concerning the proper application of wage rate schedules to the type or types of construction involved shall be obtained from the appropriate district commander, Corps of Engineers, for the Army; from the cognizant Naval Facilities Engineering Command division for the Navy; from the appropriate Regional Industrial Relations Office for the Air Force; and from the appropriate Defense Contract Management District, ATTN: Industrial Labor Relations Office, for the Defense Logistics Agency.
(b)
Send a copy of a petition for review filed by the contracting agency to the labor advisor.
(a)
(i) Training appropriate contract administration, labor relations, inspection, and other labor standards enforcement personnel in their responsibilities; and
(ii) Periodic review of field enforcement activities to ensure compliance with applicable regulations and instructions.
(b)
(A) Indicate that the labor standards requirements contained in the contract are based on the following statutes and regulations—
(
(
(
(
(
(B) Call attention to the labor standards requirements in the contract which relate to—
(
(
(
(
(
(
(
(C) Ensure that the contractor sends a copy of the preconstruction letter to each subcontractor.
(2) Before construction begins, the contracting officer shall confer with the prime contractor and any subcontractor designated by the prime to emphasize their labor standards obligations under the contract when—
(A) The prime contractor has not performed previous Government contracts;
(B) The prime contractor experienced difficulty in complying with labor standards requirements on previous contracts; or
(C) It is necessary to determine whether the contractor and its subcontractors intend to pay any required fringe benefits in the manner specified in the wage determination or to elect a different method of payment. If the latter, inform the contractor of the requirements of FAR 22.406-2.
(a)
(a) The following guidance and procedures apply to investigations conducted by the contracting activity. (i)
(A) Inform the contractor of the investigation in advance;
(B) Verify the exact legal name of the contractor, its address, and the names and titles of its principal officers;
(C) Outline the general scope of the investigation and that it includes examining pertinent records and interviewing employees; and
(D) Inform the contractor that the names of the employees to be interviewed will not be divulged to the contractor;
(E) When requested, provide a letter from the contracting officer verifying the investigator's authority.
(ii)
(
(
(
(
(
(
(
(
(
(B)
(C)
(
(
(
(
(
(
(
(
(D)
(E)
(
(
(
(
(F)
(
(
(
(
(
(
(
(
(
(
(
(
(
(
(
(
(iii)
(A) Basis for the investigation, including the name of the complainant;
(B) Names and addresses of prime contractors and subcontractors involved, and names and titles of their principal officers;
(C) Contract number, date, dollar value of prime contract, and date and number of wage determination included in the contract;
(D) Description of the contract and subcontract work involved;
(E) Summary of the findings with respect to each of the items listed in 222.406-8(a)(ii);
(F) Concluding statement concerning—
(
(
(
(
(G) Exhibits indexed and appropriately tabbed, including copies of the following, when applicable—
(
(
(
(
(
(
(
(
(
(
(
(c)
(4)(A) Notify the contractor by certified mail of any finding that it is liable for liquidated damages under the Contract Work Hours and Safety Standards Act (CWHSSA). The notification shall inform the contractor that—
(
(
(B) If an appeal is received, the contracting officer shall process the appeal in accordance with department or agency regulations.
(d)
(A) SF 1446, Labor Standards Investigation Summary Sheet;
(B) Contracting officer's findings;
(C) Statement as to the disposition of any contractor rebuttal to the findings;
(D) Statement as to whether the contractor has accepted the findings and has paid any restitution or liquidated damages;
(E) Statement as to the disposition of funds available;
(F) Recommendations as to disposition or further handling of the case (when appropriate, include recommendations as to the reduction, waiver, or assessment of liquidated damages, whether the contractor should be debarred, and whether the file should be referred for possible criminal prosecution); and
(G) When applicable the following exhibits—
(
(
(
(
(
(a)
(c)
(3)
(4)
(A) The agency head may adjust liquidated damages of $500 or less when the amount assessed is incorrect or waive the assessment when the violations—
(
(
(B) The agency head may recommend to the Administrator, Wage and Hour Division, that the liquidated damages over $500 be adjusted because the amount assessed is incorrect. The agency head may also recommend the assessment be waived when the violations—
(
(
(d) Forward the contracting officer's findings and the contractor's statement through the labor advisor.
Forward these reports through the head of the contracting activity to the labor advisor within 15 days following the end of the reporting period. These reports shall not include information from investigations conducted by the Department of Labor. These reports shall contain the following information, as applicable, for construction work subject to the Davis-Bacon Act and the CWHSSA—
(1) Period covered;
(2) Number of prime contracts awarded;
(3) Total dollar amount of prime contracts awarded;
(4) Number of contractors/subcontractors against whom complaints were received;
(5) Number of investigations conducted;
(6) Number of contractors/subcontractors found in violation;
(7) Amount of wage restitution found due under—
(i) Davis-Bacon Act
(ii) CWHSSA;
(8) Number of employees due wage restitution under—
(i) Davis-Bacon Act
(ii) CWHSSA;
(9) Amount of liquidated damages assessed under the CWHSSA—
(i) Total amount
(ii) Number of contracts involved;
(10) Number of employees and amount paid/withheld under—
(i) Davis-Bacon Act
(ii) CWHSSA
(iii) Copeland Act; and
(11) Preconstruction activities—
(i) Number of compliance checks performed
(ii) Preconstruction letters sent.
In contracts with a State or political subdivision, use the contract clauses prescribed in FAR 22.407, but preface these clauses with the following—
The Contractor agrees to comply with the requirements of the Contract Work Hours and Safety Standards Act and to insert the following clauses in all subcontracts under this contract with private persons or firms.
(c) Submit all applications for such exemptions through contracting channels to the labor advisor.
(b)(1) The head of the contracting activity is the approval authority for the contracting officer's certification.
(b) Contracting officers forward requests for instructions directly to the servicing Office of Federal Contract Compliance Programs (OFCCP) regional office (see FAR 22.609).
(a)(2) See FAR 22.609 for a list of OFCCP regional offices.
(b) Refer inquiries through the labor advisor.
(c) Submit the request for exemption with a justification through contracting channels to the labor advisor who will forward them to the agency head. If the request is submitted under FAR 22.807(a)(1), the agency head shall act on the request. If the exemption is granted, the agency head shall notify the Director, OFCCP of such action within 30 days. If the request is submitted under FAR 22.807(a)(2) or (b)(5), the agency head will forward it to the Director, OFCCP for action.
For contracts having a substantial amount of construction, alteration, renovation, painting, or repair work, see 222.402-70.
Contracting officers may contact the labor advisor by telephone for informal advice. Submit requests for formal determinations as to the Act's applicability to the labor advisor in writing through appropriate channels.
(b)(1) The contracting officer shall secure the assistance of cognizant customer/technical personnel to ensure maximum use of the Service Contract Act Directory of Occupations (Directory) and incorporation of all service employee classes (Directory and nondirectory) expected to be utilized.
(2)(A) When the statement of work job title, for which there is a Directory equivalent, differs from the Directory job title, make a written cross-reference either directly on the SF 98a file copy or on an attached sheet to the SF 98a file copy.
(B) Include and note as such any classifications and minimum hourly wage rates conformed under any predecessor contract. Where a previously conformed classification is not included in the Directory, attach the job description to the SF 98a.
(d) Submit requests for immediate wage determination responses for emergency acquisitions through the labor advisor. If the request is justified, the labor advisor will contact Department of Labor headquarters officials.
Send update requests in writing directly to the Wage and Hour Division and provide a copy to the labor advisor. The update request shall—
(1) State that one or more dates on the original notice have been delayed more than 60 days;
(2) List the new dates; and
(3) Include a copy of the original notice and SF 98a as enclosures.
(c) The contracting officer shall submit a waiver request through contracting channels to the labor advisor. If the request is justified, the labor advisor will endorse the request and forward it for action to—
(i) The agency head for waivers under FAR 22.1303(a); or
(ii) The Secretary of Defense, without the power of redelegation, for waivers under FAR 22.1303(b).
(b) As provided in Section 8117 of the National Defense Appropriations Act for Fiscal Year 1998 (Pub. L. 105-56), no funds made available in that Act may be obligated or expended to enter into or renew a contract with a contractor that is subject to the reporting requirements of 38 U.S.C. 4212(d) (i.e., the VETS-100 report required by FAR 52.222-37, Employment Reports on Disabled Veterans and Veterans of the Vietnam Era) but has not submitted the most recent report required by 38 U.S.C. 4212(d) for 1997 or a subsequent year.
The contracting officer shall—
(1) Forward each complaint received as indicated in FAR 22.1306; and
(2) Notify the complainant of the referral. The contractor in question shall not be advised in any manner or for any reason of the complainant's name, the nature of the complaint, or the fact that the complaint was received.
(a)(1) Use of the clause at FAR 52.222-35, Affirmative Action for Special Disabled and Vietnam Era Veterans, with its paragraph (c), Listing Openings, also satisfies the requirement of 10 U.S.C. 2410d.
(c) The contracting officer shall submit a waiver request through contracting channels to the labor advisor. If the request is justified, the labor advisor will endorse the request and forward it for action to—
(i) The agency head for waivers under FAR 22.1403(a). For the defense agencies, waivers must be approved by the Under Secretary of Defense for Acquisition.
(ii) The Secretary of Defense, without the power of redelegation, for waivers under FAR 22.1403(b).
The contracting officer shall—
(1) Forward each complaint received as indicated in FAR 22.1406 (see FAR 22.609 for a listing of Department of Labor regional/area offices); and
(2) Notify the complainant of such referral. The contractor in question shall not be advised in any manner or for any reason of the complainant's name, the nature of the complaint, or the fact that the complaint was received.
(a) This subpart implements section 8078 of the 1986 Defense Appropriations Act, Public Law 99-190, and similar sections in subsequent Defense Appropriations Acts.
(b) This subpart applies only—
(1) To construction and service contracts to be performed in whole or in
(2) When the unemployment rate in the state is in excess of the national average rate of unemployment as determined by the Secretary of Labor.
A contractor awarded a contract subject to this subpart must employ for the purpose of performing that portion of the contract work within the state, individuals who are residents of that state, and who, in the case of any craft or trade, possess or would be able to acquire promptly the necessary skills to perform the contract.
Waivers may be granted, in the interest of national security, at a level no lower than the Assistant Secretary of any department.
Use the clause at 252.222-7000, Restrictions on Employment of Personnel, in all solicitations and contracts subject to this subpart.
This subpart prescribes policies and procedures for use in acquisitions arising from closure of military installations.
(a) DoD policy is to minimize the adverse impact on civil service employees affected by the closure of military installations. One means of implementing this policy is to give employees adversely affected by closure of a military installation the right of first refusal for jobs created by award of contracts arising from the closure effort that the employee is qualified to fill.
(b) Closure efforts include the acquisitions for preparing the installation for closure (such as environmental restoration and utilities modification) and maintaining the property after closure (such as security and fire prevention services).
Use the clause at 252.222-7001, Right of First Refusal of Employment—Closure of Military Installations, in all solicitations and contracts arising from the closure of the military installation where the contract will be performed.
This subpart prescribes contract clauses, with respect to labor laws of foreign governments, for use when contracting for services or construction within a foreign country.
(a) Use the clause at 252.222-7002, Compliance with Local Labor Laws (Overseas), in solicitations and contracts for services or construction to be performed outside the United States, its possessions, and Puerto Rico.
(b) Use the clause at 252.222-7003, Permit from Italian Inspectorate of Labor, in solicitations and contracts for porter, janitorial, or ordinary facility and equipment maintenance services to be performed in Italy.
(c) Use the clause at 252.222-7004, Compliance with Spanish Social Security Laws and Regulations, in solicitations and contracts for services or construction to be performed in Spain.
(a) This subpart implements—
(1) 10 U.S.C. 2864; and
(2) Section 390 of the National Defense Authorization Act for Fiscal Year 1998 (Public Law 105-85).
(b) This subpart applies to—
(1) Contracts for military construction projects on Guam; and
(2) Contracts for base operations support on Guam that—
(i) Are awarded as a result of a competition conducted under OMB Circular A-76; and
(ii) Are entered into or modified on or after November 18, 1997.
(a) Any alien who is issued a visa or otherwise provided nonimmigrant status under Section 101(a)(15)(H)(ii) of the Immigration and Nationality Act (8 U.S.C. 1101(a)(15)(H)(ii)) is prohibited from performing work under a contract for—
(1) A military construction project on Guam; or
(2) Base operations support on Guam.
(b) Lawfully admitted citizens of the freely associated states of the Republic of the Marshall Islands, the Federated States of Micronesia, or the Republic of Palau are not subject to the prohibition in paragraph (a) of this section.
The prohibition in 222.7301(a)(1) does not apply to a military construction project if—
(a) There is no acceptable offer in response to a solicitation for the project;
(b) The Secretary concerned makes a determination that the prohibition is a significant deterrent to obtaining offers on the project; and
(c) Another solicitation is issued for the project.
Use the clause at 252.222-7005, Prohibition on Use of Nonimmigrant Aliens-Guam, in solicitations and contracts subject to this subpart, except those issued in accordance with 222.7302.
41 U.S.C. 421 and 48 CFR chapter 1.
(c) The authority to act for the agency head under this subpart is limited to a level no lower than an official who is appointed by and with the advice of the Senate. For the defense agencies, this is the Under Secretary of Defense (Acquisition and Technology).
DoD procedures for use in acquisitions involving ammunition and explosives are in 223.370.
(b) Successful offerors are also required to submit hazard warning labels under the clause at 252.223-7001, Hazard Warning Labels.
(e) The contracting officer shall also provide hazard warning labels received from apparent successful offerors to the cognizant safety officer or other designated official in order to facilitate—
(i) Inclusion of relevant data in the department/agency's material safety data sheet information system or label information system; and
(ii) Other control, safety, or information purposes.
Use the clause at 252.223-7001, Hazard Warning Labels, in solicitations and contracts which require submission of hazardous material data sheets (see FAR 23.302(c)).
(a) This section applies to all acquisitions involving the use of ammunition and explosives, including acquisitions for—
(1) Development;
(2) Testing;
(3) Research;
(4) Manufacturing;
(5) Handling or loading;
(6) Assembling;
(7) Packaging;
(8) Storage;
(9) Transportation;
(10) Renovation;
(11) Demilitarization;
(12) Modification;
(13) Repair;
(14) Disposal;
(15) Inspection; or
(16) Any other use, including acquisitions requiring the use or the incorporation of materials listed in paragraph (b) of this subsection for initiation, propulsion, or detonation as an integral or component part of an explosive, an ammunition, or explosive end item or weapon system.
(b) This section does not apply to acquisitions solely for—
(1) Inert components containing no explosives, propellants, or pyrotechnics;
(2) Flammable liquids;
(3) Acids;
(4) Oxidizers;
(5) Powdered metals; or
(6) Other materials having fire or explosive characteristics.
(a) DoD policy is to ensure that its contractors take reasonable precautions in handling ammunition and explosives so as to minimize the potential for mishaps that could—
(1) Interrupt DoD operations;
(2) Delay project or product completion dates;
(3) Adversely impact DoD mission readiness, production base, or production capabilities;
(4) Damage or destroy DoD property; or
(5) Cause injury to DoD personnel.
(b) This policy is implemented by DoD Manual 4145.26-M, DoD Contractors’ Safety Manual for Ammunition and Explosives, which is incorporated into contracts under which ammunition and explosives are handled. The manual contains mandatory safety requirements for contractors. When work is to be performed on a Government-owned installation, the contracting officer may use the ammunition and explosives regulation of the DoD component or installation as a substitute for, or supplement to, DoD Manual 4145.26-M, as long as the contract cites these regulations.
(a)
(A) The safety personnel responsible for ammunition and explosives safety; and
(B) The head of the contracting activity.
(ii) If the contracting officer decides to waive the mandatory requirements before award, the contracting officer shall set forth in the solicitation, or in an amendment of the solicitation, the specific requirements to be waived.
(iii) If the head of the contracting activity declines to approve a request for waiver, but the prospective contractor agrees to take corrective action to bring the operation into compliance, make the corrective action a part of the resulting contract.
(2)
(3)
(4)
(b)
(ii) The clause at 252.223-7002, Safety Precautions for Ammunition and Explosives, requires the contractor to submit to the administrative contracting officer (ACO) any postaward requests for a waiver of the contract safety standards, a site plan modification, or a construction review. The ACO shall review any request and make recommendations to the contracting officer. The contracting officer shall make a decision after considering recommendations of the ACO and safety personnel responsible for ammunition and explosive safety.
(A) If the request arrives at the contracting office without evidence that the ACO has seen it, immediately send it to the ACO for review and recommendations.
(B) When the contracting officer has made a determination approving or disapproving the contractor's request, send the determination to the ACO for transmission to the contractor.
(2)
(ii) If the preaward safety survey identified areas in which a subcontractor was not complying with the manual, and the subcontractor was supposed to correct the deficiencies before start-up, the contracting officer shall require a preoperations survey to verify that the corrections were made.
(iii) When postaward safety reviews by the Government uncover any safety deficiencies in the subcontractor's operation, the review team shall inform the ACO cognizant of the subcontractor, who shall immediately notify the ACO cognizant of the prime contractor. The ACO cognizant of the prime shall inform the prime contractor of deficiencies requiring correction. The notifications shall be made by the most expeditious means appropriate to the circumstance. If a critical safety deficiency poses an imminent danger, the ACO cognizant of the prime shall make the notifications by the most expeditious means available.
Use the clauses at 252.223-7002, Safety Precautions for Ammunition and Explosives, and 252.223-7003, Change in Place of Performance—Ammunition and Explosives, in all solicitations and contracts for acquisition to which this section applies.
(b)(3) A contract for an EPA designated item that does not meet the EPA minimum recovered material standards shall not be awarded before approval of the written determination required by FAR 23.404(b)(3). The approving official shall be—
(A) A general or flag officer, or a member of the Senior Executive Service, of the requiring activity; or
(B) For requiring activities without a general or flag officer or member of the Senior Executive Service, the commander of the activity.
(4) Departments and agencies shall centrally collect information submitted in accordance with the clause at FAR 52.223-9 for reporting to the cognizant activity in the Office of the Secretary of Defense.
DoD policy is to ensure that its contractors maintain a program for achieving a drug-free work force.
(a) The use of illegal drugs is inconsistent with the law-abiding behavior expected of all citizens. Employees who use illegal drugs tend to be less productive, less reliable, and prone to greater absenteeism. The use of illegal drugs by contractor employees results in the potential for increased cost, delay, and risk in the performance of a Government contract.
(b) If a contractor's employees use illegal drugs at any time, it can—
(1) Impair their ability to perform tasks that are critical to proper contract performance;
(2) Increase the potential for accidents and for failures that can pose a serious threat to the national security, health, and safety;
(3) Cause less than the complete reliability, stability, and good judgment required of an individual who has access to sensitive information;
(4) Create the possibility of coercion, influence, and irresponsible action under pressure that may post a serious risk to national security, health, and safety.
(a) Use the clause at 252.223-7004, Drug-Free Work Force, in all solicitations and contracts—
(1) That involve access to classified information; or
(2) When the contracting officer determines that the clause is necessary for reasons of national security or for the purpose of protecting the health or safety of those using or affected by the product of, or performance of, the contract.
(b) Do not use the clause in solicitations and contracts—
(1) For commercial items;
(2) When performance or partial performance will be outside the United States, its territories, and possessions, unless the contracting officer determines such inclusion to be in the best interest of the Government; or
(3) When the value of the acquisition is at or below the simplified acquisition threshold.
Section 211.271, Elimination of use of class I ozone-depleting substances, places restrictions on award or modification of DoD contracts requiring the use of class I ozone-depleting substances. These restrictions are in addition to any imposed by the Clean Air Act and apply after June 1, 1993, to all DoD contracts, regardless of place of performance.
10 U.S.C. 2692 prohibits storage or disposal of non-DoD-owned toxic or hazardous materials on DoD installations, except as provided in 223.7102. DoD Directive 6050.8, Storage and Disposal of Non-DoD-Owned Hazardous or Toxic Materials on DoD Installations, implements 10 U.S.C. 2692.
(a) If the contracting officer is uncertain as to whether particular activities are prohibited or fall under one of the exceptions in 223.7102, the contracting officer should seek advice from the cognizant office of counsel.
(b) When storage, treatment, or disposal of non-DoD-owned toxic or hazardous materials is authorized in accordance with this subpart, the contract or authorization should specify the types, conditions, and quantities of toxic or hazardous materials that may be temporarily stored, treated, or disposed of in connection with the contract or as a result of the authorized commercial use of a DoD industrial-type facility.
(a) The prohibition of 10 U.S.C. 2692 does not apply to—
(1) The storage of strategic and critical materials in the National Defense Stockpile under an agreement for such storage with the Administrator of General Services Administration;
(2) The temporary storage or disposal of explosives in order to protect the public or to assist agencies responsible for Federal law enforcement in storing or disposing of explosives when no alternative solution is available, if such storage or disposal is made in accordance with an agreement between the Secretary of Defense and the head of the Federal agency concerned;
(3) The temporary storage or disposal of explosives in order to provide emergency lifesaving assistance to civil authorities;
(4) The disposal of excess explosives produced under a DoD contract, if the head of the military department concerned determines, in each case, that an alternative feasible means of disposal is not available to the contractor, taking into consideration public safety, available resources of the contractor, and national defense production requirements;
(5) The temporary storage of nuclear materials or nonnuclear classified materials in accordance with an agreement with the Secretary of Energy;
(6) The storage of materials that constitute military resources intended to be used during peacetime civil emergencies in accordance with applicable DoD regulations;
(7) The temporary storage of materials of other Federal agencies in order to provide assistance and refuge for commercial carriers of such material during a transportation emergency;
(8) The storage of any material that is not owned by DoD, if the Secretary of the military department concerned determines that the material is required or generated by a private person in connection with the authorized and compatible use by that person of an industrial-type DoD facility; or
(9) The treatment and disposal of any non-DoD-owned material if the Secretary of the military department concerned—
(i) Determines that the material is required or generated by a private person in connection with the authorized and compatible commercial use by that person of an industrial-type facility of that military department; and
(ii) Enters into a contract with that person that—
(A) Is consistent with the best interest of national defense and environmental security; and
(B) Provides for that person's continued financial and environmental responsibility and liability with regard to the material.
(b) The Secretary of Defense, where DoD Directive 6050.8 applies, may grant exceptions to the prohibition of 10 U.S.C. 2692 when essential to protect the health and safety of the public from imminent danger.
(a) Use the clause at 252.223-7006, Prohibition on Storage and Disposal of Toxic and Hazardous Materials, in all solicitations and contracts which require, may require, or permit contractor performance on a DoD installation.
(b) Use the clause at 252.223-7006 with its Alternate I, when the Secretary of the military department issues a determination under the exception at 223.7102(a)(9).
“Arms, ammunition, and explosives (AA&E),” as used in this subpart, means those items within the scope (chapter 1, paragraph B) of DoD 5100.76-M, Physical Security of Sensitive Conventional Arms, Ammunition, and Explosives.
(a) The requirements of DoD 5100.76-M, Physical Security of Sensitive Conventional Arms, Ammunition, and Explosives, shall be applied to contracts when—
(1) AA&E will be provided to the contractor or subcontractor as Government-furnished property; or
(2) The principal development, production, manufacture, or purchase of AA&E is for DoD use.
(b) The requirements of DoD 5100.76-M need not be applied to contracts when—
(1) The AA&E to be acquired under the contract is a commercial item within the meaning of FAR 2.101; or
(2) The contract will be performed in a Government-owned contractor-operated ammunition production facility.
When an acquisition involves AA&E, technical or requirements personnel shall specify in the purchase request—
(a) That AA&E is involved; and
(b) Which physical security requirements of DoD 5100.76-M apply.
Use the clause at 252.223-7007, Safeguarding Sensitive Conventional Arms, Ammunition, and Explosives, in all solicitations and contracts to which DoD 5100.76-M applies, in accordance with the policy at 223.7201. Complete paragraph (b) of the clause based on information provided by cognizant technical or requirements personnel.
41 U.S.C. 421 and 48 CFR chapter 1.
The Act does not apply to—
(1) Systems of records the contractor maintains on its employees; or
(2) The records generated by a State or private educational organization under a contract with the Government to provide training, when the records (admission forms, grade reports) are similar to and commingled with those maintained on other students.
(b)(2) DoD rules and regulations are contained in DoDD 5400.11, Department of Defense Privacy Program, and DoD 5400.11-R, Department of Defense Privacy Program.
(a) DoD implementation is in DoDD 5400.7, DoD Freedom of Information Act Program, and DoD 5400.7-R, DoD Freedom of Information Act Program.
41 U.S.C. 421 and 48 CFR chapter 1.
This part also provides policy and procedures for—
(1) Purchasing foreign defense supplies, services, and construction materials;
(2) Foreign military sale acquisitions;
(3) Coordinating acquisitions involving work to be performed in foreign countries;
(4) Cooperative programs.
As used in this part—
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
(k)
(l)
(m)
To apply the policies and procedures of this part, analyze and evaluate offers of foreign end products generally as follows—
(a)
(i) Defense authorization or appropriations acts (see Subpart 225.70); or
(ii) DoD policy (see subpart 225.71 and FAR 6.302-3).
(2) Where an exception to or waiver of a restriction would result in award of a foreign end product, apply the policies and procedures of the Buy American Act or the Balance of Payments Program, and, if applicable, the trade agreements.
(b)
(2) If the product is the product of a qualifying country, evaluate the offer under 225.105 and 225.872-4.
(c)
(2) If the product is an eligible product under Subpart 225.4, evaluate the offer under FAR 25.402, 225.105, and 225.402.
(3) If the product is not an eligible product, a qualifying country end product, or a U.S. made end product, purchase of the foreign end product may be prohibited (see FAR 25.402(c) and 225.402(c)).
(d)
(2) If the contractor is controlled by a terrorist nation, comply with 209.104-1(g).
(e)
(a)(2) The cost of a domestic end product is unreasonable if it is not the low evaluated offer when evaluated under 225.105.
(3)(A) Specific public interest exceptions for DoD for certain countries are in 225.872.
(B) The Under Secretary of Defense (Acquisition and Technology) has determined that, for procurements subject to the Trade Agreements Act, it is inconsistent with the public interest to apply the Buy American Act to information technology products in Federal Supply Group 70 or 74 that are substantially transformed in the United States.
(C) Normally, use the evaluation procedures in 225.105, but consider recommending a public interest exception where the purposes of the Buy American Act are not served, or in order to meet a need set forth in 10 U.S.C. 2533. For example, a public interest exception may be appropriate—
(
(
(
(
(
(D) A determination whether to grant a public interest exception shall be made after consideration of the factors in 10 U.S.C. 2533—
(
(
(
(b)(i) A determination that an article, material, or supply is not reasonably available is required where no domestic offer is received or when domestic offers are insufficient to meet the requirement and award is to be made on a nonqualifying country end product.
(ii) Except as provided in FAR 25.102(b)(1), the determination must be approved—
(A) At a level above the contracting officer, if the acquisition is estimated not to exceed $25,000;
(B) By the chief of the contracting office if the acquisition is estimated not to exceed $250,000;
(C) By the head of the contracting activity (HCA) or immediate deputy if the acquisition is estimated not to exceed $2 million; or
(D) By the head of the agency, or designee at a level no lower than an HCA, if the acquisition is estimated to exceed $2 million.
(iii) A determination as to whether an article, material, or supply is reasonably available is not required for—
(A) End products or components listed in 225.108(d)(1) or FAR 25.108(d)(1);
(B) Acquisitions for spare/replacement parts when the acquisition is restricted to the original manufacturer or supplier; or
(C) Acquisition of foreign drugs by the Defense Supply Center, Philadelphia when the Chief of the Technical Operations Division, Directorate of Medical Materiel, determines that only the requested foreign drug will fulfill the requirements.
(iv) Under coordinated acquisition (see 208.70), the determination is the responsibility of the requiring department when the requiring department specifies acquisition of a foreign end product.
See 225.872.
Use the following procedures instead of those in FAR 25.105. These procedures do not apply to acquisitions of information technology end products in Federal Supply Group 70 or 74 that are subject to the Trade Agreements Act.
(1) Treat offers of eligible end products under acquisitions subject to the Trade Agreements Act or NAFTA as if they were qualifying country offers. As used in this section, the term “nonqualifying country offer” may also apply to an offer that is not an eligible offer under a trade agreement (see Example 4 in Table 25-1, Evaluation).
(2) Except as provided in paragraph (3) of this section, evaluate offers by adding a 50 percent factor to the price (including duty) of each nonqualifying country offer (see Example 1 in Table 25-1, Evaluation).
(i) Nonqualifying country offers include duty in the offered price. When applying the factor, evaluate based on the inclusion of duty, whether or not duty is to be exempted. If award is made on the nonqualifying country offer and duty is to be exempted through inclusion of the clause at FAR 52.225-10, Duty-Free Entry, award at the offered price minus the amount of duty identified in the provision at 252.225-7003, Information for Duty-Free Entry Evaluation. See Example 1, Alternate II, in Table 25-1, Evaluation.
(ii) When a nonqualifying country offer includes more than one line item, apply the 50 percent factor—
(A) On an item-by-item basis; or
(B) On a group of items, if the solicitation specifically provides for award on a group basis.
(3) When application of the factor would not result in the award of a domestic end product, i.e., when no domestic offers are received (see Example 3 of Table 25-1, Evaluation) or when a qualifying country offer is lower than the domestic offer (see Example 2 of Table 25-1, Evaluation), evaluate nonqualifying country offers without the 50 percent factor.
(i) If duty is to be exempted through inclusion of the clause at FAR 52.225-10, Duty-Free Entry, evaluate the nonqualifying country offer exclusive of duty by reducing the offered price by the amount of duty identified in the clause at 252.225-7003, Information for Duty-Free Entry Evaluation (see Examples 2 and 3, Alternate II, of Table 25-1, Evaluation). If award is made on the nonqualifying country offer, award at the offered price minus duty.
(ii) If duty is not to be exempted, evaluate the nonqualifying country offer inclusive of duty. (See Examples 2 and 3, Alternate I, of Table 25-1, Evaluation.)
(4) If these evaluation procedures result in a tie between a nonqualifying country offer and a domestic offer, make award on the domestic offer.
(5)(i) There are two tests that must be met to determine whether a manufactured item is a domestic end product—
(A) The end product must have been manufactured in the United States; and
(B) The cost of its U.S. and qualifying country components must exceed 50 percent of the cost of all of its components. This test is applied to end products only, and not to individual components.
(ii) Because of the component test, the definition of “domestic end product” is more restrictive than the definition for—
(A) “U.S. made end product” under trade agreements;
(B) “Domestically produced or manufactured products” under small business set-asides or small business reservations; and
(C) Products of small businesses under FAR part 19.
(iii) If an offer is for a “U.S. made end product,” “domestically produced end product,” or the product of a small business, but is not a “domestic end product” as defined in the clause at 252.225-7001, Buy American Act and Balance of Payments Program, treat the offer as a nonqualifying country offer. (See Example 4 of Table 25-1, Evaluation.)
Award on Domestic Offer. The 50% evaluation factor is added to the nonqualifying country offer, inclusive of duty, yielding an evaluated price of $9,000.
Award on Nonqualifying Country Offer. The addition of the evaluation factor yields an evaluated price of $900,000. Since duty is being exempted for nonqualifying country offers, the duty is subtracted from the offered price which is awarded at $599,000.
Award on Nonqualifying Country Offer. Since the qualifying country offer is lower than the domestic offer, the nonqualifying country offer is evaluated without the factor. Since duty is not being exempted for nonqualifying country offers, the offer is evaluated and award is made at the price inclusive of duty ($6,000).
Award on Nonqualifying Country Offer. Again, the qualifying country offer is lower than the domestic offer. The nonqualifying country offer is, therefore, evaluated without the factor. Since duty is being exempted for nonqualifying country offers, the duty identified by the offeror is subtracted from the offered price, which is evaluated and awarded at $879,500.
Award on Qualifying Country Offer. Since no domestic offers are received, the nonqualifying country offer is evaluated without the evaluation factor. Since duty is not being exempted and would be paid by the Government, the nonqualifying country offer is evaluated inclusive of duty.
Award on Nonqualifying Country Offer. Since no domestic offers are received, the nonqualifying country offer is evaluated without the evaluation factor. Since duty is being exempted, duty is subtracted from the nonqualifying country offer, which is evaluated and awarded at $879,500.
Award on Domestic End Product. U.S. made end products which are not also domestic end products are evaluated the same as nonqualifying country end products. Adding the 50% evaluation factor yields an evaluated price of $1,200,000.
Award on U.S. Made End Product. Adding the 50% evaluation factor to the U.S. made end product would not result in the award of a domestic end product since the eligible product, which is evaluated the same as a qualifying country offer, is lower. All offers are evaluated without the factor.
Contracting activities must apply the evaluation procedures in 225.105 when using Federal supply schedules.
(a)(i)DoD has determined that the articles, materials, and supplies listed in FAR 25.108(d)(1) and in paragraph (d)(1) of this section, when purchased as end items or components, are not mined, produced, or manufactured in the United States in sufficient and reasonably available commercial quantities of a satisfactory quality. Regard these items or components as being of domestic origin when incorporated in—
(A) An end product or construction material manufactured in the United States; or
(B) A qualifying country end product or construction material. (For construction material, see FAR 25.2.)
(ii) Scrap is domestic in origin if generated in, collected in, and prepared for processing in the United States.
(d)(1) Aluminum clad steel wire. Sperm oil.
(a) Use the provision at 252.225-7000, Buy American Act—Balance of Payments Program Certificate, instead of the provisions at FAR 52.225-1, Buy American Certificate, and FAR 52.225-6, Balance of Payments Program Certificate. Use the provision in any solicitation that includes the clause at 252.225-7001, Buy American Act and Balance of Payments Program.
(b) For oral solicitations inform prospective vendors that only domestic and qualifying country end products are acceptable, except nonqualifying country end products are acceptable if—
(i) The items are excepted either on a blanket or an individual basis; or
(ii) The price of the nonqualifying country end product is the low offer under the evaluation procedures in 225.105.
(d) Use the clause at 252.225-7001, Buy American Act and Balance of Payments Program, instead of the clauses at FAR 52.225-3, Buy American Act-Supplies, and FAR 52.225-7, Balance of Payments Program, in solicitations and contracts for supplies or services that require the furnishing of supplies.
(i) Do not use the clause if an exception to the Buy American Act or Balance of Payments Program is known to apply or if using the clause at 252.225-7007, Buy American Act—Trade Agreements—Balance of Payments Program; 252.225-7021, Trade Agreements; or 252.225-7036, Buy American Act—North American Free Trade Agreement Implementation Act—Balance of Payments Program.
(ii) The clause need not be used if nonqualifying country end products are ineligible for award, including—
(A) End products restricted to domestic or domestic and qualifying country sources under Appropriations and Authorization Act restrictions (see 225.70);
(B) End products restricted to domestic or domestic and Canadian sources (see 225.71); and
(C) End products restricted under the authority of FAR 6.302-3.
(iii) The clause may be used if the contracting officer anticipates a waiver of the restrictions in paragraphs (d)(ii) (A) or (B) of this section.
(a) Use the clause at 252.225-7002, Qualifying Country Sources as Subcontractors, in solicitations and contracts that include one of the following clauses:
(1) 252.225-7001, Buy American Act and Balance of Payments Program.
(2) 252.225-7007, Buy American Act—Trade Agreements—Balance of Payments Program.
(3) 252.225-7021, Trade Agreements.
(4) 252.225-7036, Buy American Act—North American Trade Agreement Implementation Act—Balance of Payments Program.
(b) When only domestic end products are acceptable, the solicitation must make a statement to that effect.
(a)(3) A nonavailability determination is not required for construction materials listed in FAR 25.108(d)(1) or in 225.108(d)(1). For other materials, a nonavailability determination must be approved at the levels specified in 225.102(b)(ii). Use the estimated value of the construction materials to determine the approval level.
(a) DoD implements the Balance of Payments Program using evaluation factors similar to those which implement the Buy American Act. The Balance of Payments Program restrictions—
(i) Apply to acquisitions for foreign military sales;
(ii) Do not apply to services, except services which primarily involve the acquisition of supplies;
(iii) Do not apply to qualifying country end products;
(iv) Do not apply to articles, materials, or supplies produced or manufactured in Panama when purchased by and for the use of U.S. forces in Panama; and
(v) For acquisitions subject to the Trade Agreements Act, do not apply to information technology products in Federal Supply Group 70 or 74 that are substantially transformed in the United States.
(b)(i) Before solicitation, the determinations required by FAR 25.302(b)(2) and (3), or a determination that the cost of acquiring domestic end products or services is unreasonable (FAR 25.303(b)), may be made by the following individuals or their immediate deputies—
(ii) The authority to make the determinations required by 225.302(b)(i) may be redelegated below the levels in paragraph (b)(i) for acquisitions estimated at $500,000 or less in foreign cost.
(3)(A) This authority is not intended for use in making repetitive supply acquisitions or acquisitions of total annual supply requirements of items available in the United States but not available within the time required.
(B) DoD has determined that requirements for the items on the lists at FAR 25.108(d)(1) and at 225.108(d)(1) can only be filled by a foreign end product.
(4) DoD has determined the following items can only be acquired or performed in the country concerned—
(A) Maintenance and repair of, and acquisition of spare parts for, foreign-manufactured vehicles, equipment, machinery, and systems; provided, in the case of spare parts, the acquisition is restricted to the original manufacturer or its supplier in accordance with DoD standardization policy (see DoD Directive 4120.3, Defense Standardization and Specification Program);
(B) Industrial gases;
(C) Brand drugs specified by the Defense Medical Materiel Board;
(D) Bulk construction materials: sand, gravel, and other soil materials, stone, concrete masonry units, and fired brick; and
(E) Overhaul and repair of vessels, aircraft, and vehicles which—
(
(
(F) Ready-mixed asphalt and portland cement concrete, provided that foreign cost is estimated at not more than $100,000.
(c)(i) Purchase of materials, equipment, and supplies for construction overseas shall generally be the responsibility of the contractor performing the work; but where necessary to comply with foreign law, to avoid taxation, or to obtain other advantages, consider direct purchase. Consider savings that may be obtained by exemptions from import and other taxes and, to the extent economical, take advantage of tax exemptions available under existing agreements.
(ii) When purchase of materials is the responsibility of the construction contractor, the evaluation differential is determined through the estimating process and applied before solicitation.
(a)
(b)
(A) Duty may not be applicable to nonqualifying country offers.
(B) The U.S. Government cannot guarantee the exemption of duty for components or end products imported into foreign countries.
(C) Foreign governments may impose duties, and offers including such duties must be evaluated as offered.
(ii) Where the evaluation procedures in 225.105 result in the award of a nonqualifying country end product, the acquisition of domestic end products is unreasonable or inconsistent with public interest. If no domestic end product offers are received, the determination in FAR 25.302(b)(3) is not required.
In order to allow accurate reporting, by cognizant accounting and disbursing officers, of foreign and domestic expenditures, use the clause at 252.225-7005, Identification of Expenditures in the United States, in all negotiated contracts over $25,000 where—
(a) For supply contracts, the contract requires end products manufactured or produced in the United States; and
(1) The contractor is a foreign concern; or
(2) The contractor is a domestic concern and the Government will take title outside the United States.
(b) For contracts for construction, repair, and maintenance of real property, or services to be performed outside the United States—
(1) The contractor is a domestic concern; or
(2) The contractor is a foreign concern and the contract requires acquisition of materials, equipment, or services from U.S. sources.
(a) To estimate the value of the acquisition, use the total estimated value of end products subject to trade agreement acts (see 225.403-70).
(1) See 225.105 for evaluation of eligible products and U.S. made end products, except when acquiring information technology end products in Federal Supply Group 70 or 74 that are subject to the Trade Agreements Act.
(c)(i) Except as provided in paragraphs (c) (ii) and (iii) of this section, do not purchase nondesignated country end products subject to the Trade Agreements Act unless they are NAFTA, Caribbean Basin, or qualifying country end products (see 225.872-1).
(ii) The prohibition in paragraph (c)(i) of this section does not apply when the contracting officer determines that offers of U.S. made, qualifying country, or eligible products from responsive, responsible offerors are either—
(A) Not received; or
(B) Insufficient to fill the Government's requirements. In these cases, accept all responsive, responsible offers of U.S. made, qualifying country, and eligible products before accepting any other offers.
(iii) National interest waivers under Section 302(b)(2) of the Trade Agreements Act are approved on a case-by-case basis. Except as delegated in paragraphs (c)(iii) (A) and (B) of this section, a request for a national interest waiver shall include supporting rationale and be submitted under department/agency procedures to the Director of Defense Procurement.
(A) The head of the contracting activity may approve a national interest waiver for a purchase by an overseas purchasing activity of products critical to the support of U.S. forces stationed abroad. The waiver must be supported by a written statement from the requiring activity stating that the requirement is critical for the support of U.S. forces stationed abroad.
(B) The Commander, Defense Energy Support Center, may approve national interest waivers for purchases of fuel for use by U.S. forces overseas.
(c)(1)(A) If a department or agency considers an individual acquisition of a product to be indispensable for national security or national defense purposes and appropriate for exclusion from the provisions of FAR subpart 25.4, it may submit a request with supporting rationale to the Director of Defense Procurement (USD(A&T)DP).
(B) The following national security/national defense exceptions do not require approval by USD(A&T)DP—
(
(
(
(g)(4) In accordance with Section 8094 of the Fiscal Year 1994 Defense Appropriations Act (Public Law 103-139), the exception for petroleum and any product derived from petroleum does not apply.
Foreign end products subject to the Trade Agreements Act and NAFTA are those in the following Federal supply groups (FSG). If a product is not in one of the listed groups, the Trade Agreements Act and NAFTA do not apply. The definition of Caribbean Basin country end products in FAR 25.401 excludes those end products which are not eligible for duty-free treatment under 19 U.S.C. 2703(b). However, 225.401 expands the definition of Caribbean Basin country end products to include petroleum and any product derived from petroleum. The list of products has been annotated to indicate those products which are eligible for designated and NAFTA countries, but are not presently eligible for Caribbean Basin countries.
(d) The requirements of FAR 25.405(d) do not apply to offshore acquisitions or to Defense Energy Support Center post, camp, or station overseas requirements.
(a)(i) Use the provision at 252.225-7006, Buy American Act—Trade Agreements—Balance of Payments Program Certificate, instead of the provision at FAR 52.225-8, Buy American Act—Trade Agreements—Balance of Payments Program Certificate, in all solicitations that include the clause at 252.225-7007, Buy American Act—Trade Agreements—Balance of Payments Program.
(ii) Except as provided in paragraph (a)(iv) of this section, use the clause at 252.225-7007, Buy American—Trade Agreements—Balance of Payment Program, instead of the clause at FAR 52.225-9, Buy American Act-Trade Agreements-Balance of Payment Program. The clause need not be used
(iii) Use the provision at 252.225-7020, Trade Agreements Certificate, in all solicitations that include the clause at 252.225-7021, Trade Agreements.
(iv) Use the clause at 252.225-7021, Trade Agreements, instead of the clause at FAR 52.225-9, Buy American Act—Trade Agreements—Balance of Payments Program, when acquiring information technology products in Federal Supply Group 70 or 74.
(v)(A) Use the provision at 252.225-7035, Buy American Act—North American Free Trade Agreement Implementation Act—Balance of Payment Program Certificate, instead of the provision at FAR 52.225-20, Buy American Act—North American Free Trade Agreement Implementation Act—Balance of Payments Program Certificate, in all solicitations that include the clause at 252.225-7036, Buy American Act—North American Free Trade Agreement Implementation Act—Balance of Payments Program.
(B)(
(
(vi)(A) Use the clause at 252.225-7036, Buy American Act—North American Free Trade Agreement Implementation Act—Balance of Payments Program, instead of the clause at FAR 52.225-21, Buy American Act—North American Free Trade Agreement Implementation Act—Balance of Payments Program. The clause need not be used where purchase from foreign sources is restricted (see 225.403(c)(1)(B)). The clause may be used where the contracting officer anticipates a waiver of the restriction.
(B)(
(
(C) Application of the procedures in 225.402(a) and the acquisition of noneligible and eligible products under the same solicitation may result in the application of the North American Free Trade Agreement Implementation Act to only some of the items solicited. In such case, indicate in the schedule those items covered by the Act.
(1) Section XXII, chapter 98, subchapter VIII, Item 9808.00.30 of the Harmonized Tariff Schedule of the United States authorizes duty-free importation of defense supplies.
(2) 19 U.S.C. 1309 authorizes duty-free importation of certain supplies (not including equipment) for vessels or aircraft operated by the United States (see FAR 25.604(b)).
(3) Unless the supplies are entitled to duty-free treatment under a special category in the Harmonized Tariff Schedule of the United States (e.g., the Caribbean Basin Economic Recovery Act or NAFTA), or unless the supplies already have entered into the customs territory of the United States and duty already has been paid, DoD will issue duty-free entry certificates for—
(i) Qualifying country supplies (end products and components) on all defense contracts;
(ii) Eligible products (end products but not components) on defense contracts subject to the Trade Agreements Act or NAFTA; and
(iii) Other foreign supplies, if there is reasonable assurance that the administrative and other costs of processing and controlling the certificates will not exceed the amount of duty that would be paid.
(a)
(B) Offers of U.S. made end products with nonqualifying country components, and offers that are neither qualifying country offers nor offers of eligible products under a trade agreement, should contain applicable duty.
(C) Exclude from the evaluation of domestic end products, or information technology end products in Federal Supply Group 70 or 74 in acquisitions subject to the Trade Agreements Act, any duty for nonqualifying country components listed in the provision at 252.225-7003, Information for Duty-Free Entry Evaluation, for which duty-free entry will be granted.
(D) Except for acquisitions of information technology end products in Federal Supply Group 70 or 74 subject to the Trade Agreements Act, apply the evaluation procedures for the Buy American Act in accordance with 225.105.
(ii)
(iii)
(
(
(
(
(
(
(B) Under a fixed-price contract, negotiate an equitable reduction in the contract price if duty-free entry is granted for any nonqualifying country component not listed in the Schedule as duty-free, even if contract award was based on furnishing a domestic
(b)
(A) Ensure that prime contractors are aware of and understand any Duty-Free Entry clause requirements. Contractors should understand that failure by them or their subcontractors to include the data required by the clause will result in treatment of the shipment as without benefit of free entry under section XXII, chapter 98, subchapter VIII, Item 9808.00.30 of the Harmonized Tariff Schedule of the United States.
(B) Upon receipt of the required notice of purchase of foreign supplies from the contractor or any tier subcontractor—
(
(
(C) Upon receipt of notification from the contractor that it is placing a foreign purchase that was not identified at the time of contract award—
(
(
(
(D) Within 20 days after receiving the notification of purchase of foreign supplies, forward the following information in the format indicated to the Commander, DCMC New York, ATTN Customs Team, DCMDN-GNIC, 207 New York Avenue, Staten Island, NY 10305-5013—
(E) If a contract modification results in a change to any data verifying duty-free entitlement previously furnished, forward a revised notification including the changed data to DCMC New York.
(ii) The responsibility for issuing duty-free entry certificates for foreign supplies purchased under a DoD contract or subcontract rests with the Customs Team, DCMDN-GNIC, DCMC New York. Upon receipt of import documentation for incoming shipments from the contractor, its agent, or the U.S. Customs Service, DCMC New York will verify the duty-free entitlement and execute the duty-free entry certificate.
(iii) Upon arrival of foreign supplies at ports of entry, the consignee, generally the contractor or its agent (import broker) for shipments to other than a military installation, will file U.S. Customs Form 7501, 7501A, or 7506, with the District Director of Customs.
(c)
(i) A DoD immediate delivery application has been approved and is on file at Customs Headquarters.
(ii) The application is for an indefinite period and is good for all Customs districts, areas, and ports.
(b)(i) The term “supplies”—
(A) Includes articles known as “stores,” such as food, medicines, and toiletries, as well as all consumable articles necessary and appropriate for the propulsion, operation, and maintenance of the vessel or aircraft, such as fuel, oil, gasoline, grease, paint, cleansing compounds, solvents, wiping rags, and polishes.
(B) Does not include portable articles necessary and appropriate for the navigation, operation, or maintenance of vessel or aircraft and for the comfort and safety of the persons on board, such as rope, bolts and nuts, bedding, china and cutlery, which are included in the term “equipment.”
(ii) The duty-free certificate shall be printed, stamped, or typed on the face of Customs Form 7501, or attached, and shall be executed by a duly designated officer or civilian official of the appropriate department or agency in the following form—
(Date)
I certify that the acquisition of this material constituted a purchase of supplies by the United States for vessels or aircraft operated by the United States, and is admissible free of duty pursuant to 19 U.S.C. 1309.
(Name)
(Title)
(Organization)
(b) The dollar amount in paragraphs (b)(1) and (i)(2) of the FAR 52.225-10 clause may be reduced appropriately in solicitations and contracts of $100,000 or less.
(a) Use the clause at 252.225-7009, Duty-Free Entry—Qualifying Country Supplies (End Products and Components), in solicitations and contracts for supplies and in solicitations and contracts for services involving the furnishing of supplies, except for solicitations and contracts for supplies for exclusive use outside the United States.
(b) Use the clause at 252.225-7037, Duty-Free Entry—Eligible End Products, in solicitations and contracts for supplies and services when the clause at 252.225-7007, Buy American Act—Trade Agreements—Balance of Payments Program; 252.225-7021, Trade Agreements; or 252.225-7036, Buy American Act—North American Free Trade Agreement Implementation Act—Balance of Payments Program, is used.
(c) Use the clause at 252.225-7010, Duty-Free Entry—Additional Provisions, in solicitations and contracts that include the clause at FAR 52.225-10, Duty-Free Entry.
(d) Use the provision at 252.225-7003, Information for Duty-Free Entry Evaluation, in solicitations that include the clause at FAR 52.225-10, Duty-Free Entry. Use the provision with its Alternate I when the clause at 252.225-7021, Trade Agreements, is used.
(e) Use the clause at 252.225-7008, Supplies to be Accorded Duty-Free Entry, in solicitations and contracts that provide for duty-free entry and that include the clause at FAR 52.225-10, Duty-Free Entry.
See 209.104-1(g)(i) for restrictions on contracting with firms owned or controlled by foreign governments that support terrorism. See 209.104-1(g)(ii) for prohibition on award of a DoD contract under a national security program to an entity controlled by a foreign government when access to proscribed information is required to perform the contract.
In accordance with 10 U.S.C. 2410i, do not enter into a prime contract with a
For contracts awarded to the Canadian Commercial Corporation (CCC), the CCC will submit a certification from its proposed subcontractor with the other required precontractual material (see 225.870).
The restriction does not apply to—
(a) Purchases at or below the simplified acquisition threshold;
(b) Contracts for consumable supplies, provisions, or services for the support of the United States or of allied forces in a foreign country; or
(c) Contracts pertaining to any equipment, technology, data, or services for intelligence or classified purposes, or the acquisition or lease thereof in the interest of national security.
The Secretary of Defense may waive the restriction on the basis of national security interests. Waiver requests should be forwarded to the Director of Defense Procurement, OUSD(A&T)DP.
Unless an exception applies or a waiver has been granted, use the clause at 252.225-7031, Secondary Arab Boycott of Israel, in all solicitations and contracts.
“People's Republic of China” is defined in the provision at 252.225-7017, Prohibition on Award to Companies Owned by the People's Republic of China.
This section implements Section 8120 of the DoD Appropriations Act for fiscal year 1999 (Pub. L. 105-262).
Do not award or renew a contract with any company owned or partially owned by the People's Republic of China or the People's Liberation Army of the People's Republic of China, if using funds made available by Title III (Procurement) or Title IV (Research, Development, Test and Evaluation) of Pub. L. 105-262.
Use the provision at 252.225-7017, Prohibition on Award to Companies Owned by the People's Republic of China, in solicitations for contracts that will use funds made available by Title III or IV of Pub. L. 105-262.
(1) Treaties and agreements between the U.S. and foreign governments affect both—
(i) The way offers from foreign contractors are evaluated in DoD acquisitions; and
(ii) Performance of DoD contracts in foreign countries.
(2) This subpart covers acquisition policy and procedures based on treaties and international agreements.
(3) Information on specific agreements is available as follows—
(i) Memoranda of understanding (MOU) and other international agreements between the United States and the countries listed in 225.872-1 are maintained in the Office of the Deputy Assistant Secretary of Defense (Procurement) (Foreign Contracting) (703) 697-9351, DSN 227-9351).
(ii) Military Assistance Advisory Groups, Naval Missions, and Joint U.S. Military Aid Groups normally have copies of the agreements applicable to the countries concerned.
(iii) Copies of international agreements covering existing agreements in the United Kingdom of Great Britain and Northern Ireland, Western European countries, North Africa, and in the Middle East are filed with the U.S. European Command (EUCOM).
(iv) Agreements with countries in the Pacific and Far East are filed with the U.S. Pacific Command (CINCPAC).
(a) When a purchasing activity anticipates placement of a contract for performance outside the United States or Canada and the contracting activity is not under the command jurisdiction of a unified or specified command for the country involved, the purchasing activity shall maintain liaison with the cognizant contract administration office (CAO) (as specified in DLAH 4105.5) during preaward negotiations and postaward administration. The CAO will provide pertinent information for contract negotiations, effect appropriate coordination, and obtain required approvals for the performance of the contract.
(b) Where the acquisition requires the performance of work in the foreign country by U.S. personnel or a third country contractor, or where the acquisition will require logistics support for contract employees, source inspection, or additional Government employees—
(1) The contracting activity must coordinate with the cognizant contract administration office before contract award.
(2) The contracting officer shall request the following information from the contract administration office—
(i) The applicability of any international agreements to the acquisition;
(ii) Security requirements applicable to the area;
(iii) The standards of conduct required to be observed by the prospective contractor and its employees, and any action that may be taken in the event required standards are not maintained;
(iv) Requirements for use of foreign currencies, including applicability of U.S. holdings of excess foreign currencies;
(v) Availability of logistics support for contractor employees; and
(vi) Information on taxes and duties from which the Government may be exempt.
(3) The contracting officer shall furnish the following information to the contract administration office—
(i) A synopsis of the work to be performed and, if practical, a copy of the solicitation;
(ii) Any contractor logistical support desired in support of U.S. or foreign military sale requirements;
(iii) Contract performance period and estimated contract value;
(iv) Number and nationality of contractor employees and date of planned arrival of contractor personnel;
(v) Contract security requirements; and
(vi) Other pertinent information to effect complete coordination and cooperation.
Contracting officers considering the purchase of an item from a foreign source may encounter a request for the signing of a certificate to the effect that the Armed Forces of the United States is the end user of the equipment, and that it will not be transferred to third parties without authorization from the Government of the country selling the item. When encountering this situation, refer to DoD Directive 2040.3, End User Certificates, for guidance.
(a) The Canadian Government guarantees to the U.S. Government all commitments, obligations, and covenants of the Canadian Commercial Corporation under any contract or order issued to the Corporation by any contracting activity of the U.S. Government. The
(b) For production planning purposes, Canada is considered to be part of the defense industrial base (see 225.870-2(b)).
(c) Contracts with contractors located in Canada should be awarded to and administered by the Canadian Commercial Corporation, except for—
(1) Negotiated purchases for experimental, developmental, or research work unless the contract is for a project under the Defense Development Sharing Program;
(2) Purchases of unusual or compelling urgency;
(3) Small purchases; or
(4) Purchases made by DoD activities located in Canada.
(d) The Canadian Commercial Corporation, in placing contracts with Canadian or U.S. concerns, uses provisions in the contracts that give DoD the same production rights, data, and information that DoD would obtain in contracts with U.S. concerns.
(e) When contracts are placed with the Canadian Commercial Corporation, the government of Canada will provide the following services, without charge to DoD departments and agencies—
(1)
(i) Cost and pricing analysis;
(ii) Industrial security;
(iii) Accountability and disposal of Government property;
(iv) Production expediting;
(v) Compliance with Canadian labor laws;
(vi) Processing termination claims and disposing of termination inventory;
(vii) Customs documentation;
(viii) Processing of disputes and appeals; and
(ix) Such other related contract administration functions as may be required with respect to the Canadian Commercial Corporation contract with the Canadian supplier; and
(2)
(3)
(a) Except for the acquisitions in 225.870-1(c) (1) through (4), include Canadian firms on bidders mailing lists and comparable source lists only at the request of the Canadian Commercial Corporation.
(b) Include Canadian planned producers under the Industrial Readiness Planning Program on bidders mailing lists for their planned items (see FAR 14.205-1).
(c) Send solicitations directly to Canadian firms appearing on the appropriate bidders mailing lists. Send a complete copy of the solicitation and a listing of Canadian firms solicited to the Canadian Commercial Corporation, 11th Floor, 50 O'Connor Street, Ottawa, Ontario, K1A-0S6, Canada.
(d) Furnish a solicitation, if requested, to the Canadian Commercial Corporation even if no Canadian firm is solicited.
(e) Handle small purchases (see FAR part 13) directly with Canadian firms and not through the Canadian Commercial Corporation.
(a) As indicated in 225.870-4, the Canadian Commercial Corporation is the prime contractor. To indicate acceptance of offers by individual Canadian companies, the Canadian Commercial Corporation issues a letter, supporting the Canadian offer, containing the following information—
(1) Name of the Canadian offeror;
(2) Confirmation and endorsement of the offer in the name of the Canadian Commercial Corporation; and
(3) A statement that the Corporation shall subcontract 100 percent with the offeror.
(b) When a Canadian offer cannot be processed through the Canadian Commercial Corporation in time to meet the bid-opening requirement or the closing date for receipt of proposals, the Corporation may permit Canadian firms to submit offers directly. The Canadian Commercial Corporation's endorsement of award, however, must be received by the contracting officer before contract award.
(c) All sealed bids will be submitted by the Canadian Commercial Corporation in terms of U.S. currency. Do not adjust contracts awarded under sealed bidding for losses or gains from fluctuation in exchange rates.
(d) Except for sealed bids, all offers and quotations submitted by the Canadian Commercial Corporation are normally in terms of Canadian currency. The Corporation may, at the time of submitting an offer, elect to quote and receive payment in terms of U.S. currency, in which case the contract shall—
(1) Provide for payment in U.S. currency; and
(2) Shall not be adjusted for losses or gains from fluctuation in exchange rates.
(a) Award individual contracts covering purchases from suppliers located in Canada, except for those in 225.870-1(c)(1) through (4), to the Canadian Commercial Corporation, 11th Floor, 50 O'Connor Street, Ontario, Canada, K1A-0S6.
(b) Direct communication with the Canadian supplier is authorized and encouraged in connection with all technical aspects of the contract; provided, that the Corporation's approval is obtained on any matters involving changes to the contract.
(c) Identify in the contract, the type of currency, i.e., U.S. or Canadian. Contracts that provide for payment in Canadian currency shall quote the contract price in terms of Canadian dollars and shall identify the amount by the initials CN; e.g., $1,647.23CN. The contract shall clearly indicate on its face the U.S./Canadian conversion rate at the time of award and the U.S. dollar equivalent of the Canadian dollar contract amount.
(a) Assign contract administration in accordance with part 242. When contract administration is performed in Canada by the cognizant contract administration office of the Defense Contract Management Command, the paying office to be named in the contract for disbursement of DoD funds (DoD Department Code: 17-Navy; 21-Army; 57-Air Force; 97-all other DoD components), whether payment is in Canadian or U.S. dollars, shall be: Disbursing Office, Defense Contract Management Area Office, Cleveland 1240 East 9th Street, Anthony J. Celebrezze Federal Building, Cleveland, Ohio 44199.
(b) For cost-reimbursement type contracts—
(1) Audits on contracts with the Canadian Commercial Corporation (CCC) are automatically arranged by the Department of Supplies and Services (DSS), Canada. Audit reports are furnished to DSS. Upon advice from DSS, the CCC will certify the invoice and forward it with SF 1034, Public Voucher, to the administrative contracting officer for further processing and transmittal to the disbursing office.
(2) On contracts placed directly with Canadian firms, the administrative contracting officer requests audits from the Audit Services Bureau (ASB), Ottawa, Ontario, Canada.
(i) Invoices are approved by the ASB/DSS auditor on a provisional basis pending completion of the contract and final audit.
(ii) The ASB/DSS forwards these invoices, accompanied by SF 1034, Public Voucher, to the administrative contracting officer for further processing and transmittal to the disbursing officer.
(iii) ASB/DSS furnishes periodic advisory audit reports directly to the administrative contracting officer.
(a) The Canadian Commercial Corporation will continue administering contracts that may be terminated by the U.S. contracting officer.
(b) The Corporation will settle all Canadian subcontracts in accordance with the policies, practices, and procedures of the Canadian Government.
(c) The U.S. agency administering the contract with the Canadian Commercial Corporation shall provide any services required by the Canadian Commercial Corporation, including disposal of inventory, for settlement of any subcontracts placed in the United States. Settlement of such U.S. subcontracts is made under this regulation.
(a) When contracts placed in Canada, either with the Canadian Commercial Corporation or directly with Canadian suppliers, require contract quality assurance (CQA) and/or acceptance before shipment, CQA and/or acceptance, as applicable, will be performed by the Department of National Defence (Canada), under paragraph 6 of the Letter of Agreement.
(b) Signature by the Department of National Defence (Canada) quality assurance representative on the DoD inspection and acceptance form is satisfactory evidence of acceptance for payment purposes.
Industrial security for Canada shall be in accordance with the U.S.-Canada Industrial Security Agreement of March 31, 1952, as amended.
(a) This section provides guidance on awarding contracts based on NATO cooperative projects.
(b) The authority is 22 U.S.C. 2767 and 10 U.S.C. 2350b.
(a)
(1) Described in a written agreement between the parties;
(2) Undertaken to further the objectives of standardization, rationalization, and interoperability of the armed forces of North Atlantic Treaty Organization member countries; and
(3) Providing for—
(i) One or more of the other participants to share with the United States the cost of research and development, testing, evaluation, or joint production (including follow-on support) of certain defense articles;
(ii) Concurrent production in the United States and in another member country of a defense article jointly developed; or
(iii) Acquisition by the United States of a defense article or defense service from another member country.
(b)
(a) Cooperative project authority. (1) Departments or agencies, that have authority to do so, may enter into a cooperative project agreement with NATO or with one or more member countries of that organization under DoD Directive 5530.3, International Agreements.
(2) Under laws and regulations governing the negotiation and implementation of cooperative project agreements, departments and agencies may enter into contracts, or incur other obligations, on behalf of other participants without charge to any appropriation or contract authorization.
(3) Agency heads have authority to solicit and award contracts to implement cooperative projects.
(b) Contracts implementing cooperative projects shall comply with all applicable laws relating to Government acquisition, unless a waiver is granted under 225.871-4. A waiver of certain laws and regulations may be obtained if—
(1) Required by the terms of a written cooperative project agreement;
(2) It will significantly further NATO standardization, rationalization, and interoperability; and
(3) It is approved by the appropriate DoD official.
(a) The Deputy Secretary of Defense may waive for contracts or subcontracts placed outside the United States any provision of law that specifically prescribes—
(1) Procedures for the formation of contracts;
(2) Terms and conditions for inclusion in contracts;
(3) Requirements for, or preferences to be given—
(i) To goods grown, produced, or manufactured in the United States or in U.S. Government-owned facilities; or
(ii) For services to be performed in the United States; or
(4) Requirements regulating the performance of contracts.
(b) There is no authority for waiver of—
(1) Any provision of the Arms Export Control Act (22 U.S.C. 2751);
(2) Any provision of 10 U.S.C. 2304;
(3) The cargo preference laws of the United States, including the Military Cargo Preference Act of 1904 (10 U.S.C. 2631) and the Cargo Preference Act of 1954 (46 U.S.C. 1241(b)); or
(4) Any of the financial management responsibilities administered by the Secretary of the Treasury.
(c) If a waiver is contemplated under the terms of a cooperative project agreement, forward a request for the waiver to the Deputy Secretary of Defense, through the Director of Defense Procurement. The waiver request must include a draft Determination and Findings for signature by the Deputy Secretary of Defense establishing that the waiver is necessary to significantly further NATO standardization, rationalization, and interoperability.
(d) The approval of the Deputy Secretary of Defense must be obtained before committing to make waivers in an agreement or an amendment to an agreement or contract.
(a) The Director of Defense Procurement may authorize the direct placement of subcontracts with particular subcontractors. Directed subcontracting is not authorized unless specifically addressed in the cooperative project agreement.
(b) In some instances, it may not be feasible to name specific subcontractors at the time the agreement is concluded. The general provisions for work sharing at the prime and subcontractor level, however, must be clearly delineated in the agreement. This will provide the authority necessary to implement such arrangements during the acquisition phase.
(c) The agreement is the authority necessary for including a contractual provision requiring the prime contractor to place certain subcontracts with particular subcontractors. No separate justification and approval during the acquisition process is required.
Dispose of property that is jointly acquired by the members of a cooperative project under the procedures established in the agreement or in a manner consistent with the terms of the agreement.
(a) Congress must be notified whenever DoD determines to award a prime contract or subcontract to a particular contractor if the determination was not part of the certification made under Section 27(f) of the Arms Export Control Act before finalizing the cooperative agreement.
(1) Departments and agencies must provide a proposed Congressional notice to USD(A&T)DP in sufficient time to forward to Congress before the time of contract award.
(2) The proposed notice shall include the reason why the authority to designate a particular contractor or subcontractor should be used.
(b) Congressional notification is also required each time a statutory waiver is exercised under 225.871-4, if such information was not provided in the certification to Congress before finalizing the cooperative agreement. Exercise of the waiver means a contract award or modification which provides for a statutory exception.
(a) As a result of memoranda of understanding and other international agreements, the DoD has determined it inconsistent with the public interest to apply restrictions of the Buy American Act/Balance of Payments Program to
(b) Individual acquisitions for products of the following qualifying countries may, on a purchase-by-purchase basis, be exempted from application of the Buy American Act and Balance of Payments Program as inconsistent with the public interest—
(c) The determination in paragraph (a) of this subsection does not limit the authority of the cognizant Secretary to restrict acquisitions to domestic sources or reject an otherwise acceptable offer from a qualifying country source in instances where considered necessary for national defense reasons.
(a) This section applies to all acquisitions of supplies except where restricted by—
(1) Provision of U.S. National Disclosure Policy (NDP), DOD Directive 5230.11, Disclosure of Classified Military Information to Foreign Governments and International Organizations;
(2) U.S. defense mobilization base requirements purchased under the authority of FAR 6.302-3(a)(2)(i) except for quantities in excess of that required to maintain the defense mobilization base. This restriction does not apply to Canadian planned producers—
(i) Review individual solicitations to determine whether this restriction applies.
(ii) Information concerning restricted items may be obtained from the Deputy Assistant Secretary of Defense (Industrial Affairs);
(3) Other U.S. laws or regulations (e.g., the annual defense appropriations act); and
(4) U.S. industrial security requirements.
(b) This section does not apply to construction contracts.
(a) Include qualifying country sources on bidders mailing lists and comparable source lists upon their request (see FAR 14.205).
(b) Except for items developed under the U.S./Canadian Development Sharing Program, use the criteria for soliciting and making awards under FAR part 19 for small business concerns without regard to whether there are potential qualifying country sources for the end product. Do not consider an offer of a qualifying country end product if the solicitation is identified for the exclusive participation of small business firms.
(c) Send solicitations directly to qualifying country sources. Solicit Canadian sources through the Canadian Commercial Corporation in accordance with 225.870.
(d) Use international air mail if solicitation destinations are outside the United States and security classification permits such use (see FAR 14.202 and FAR 14.203).
(e) If unusual technical or security requirements preclude the acquisition of otherwise acceptable defense equipment from qualifying country sources, review the need for such requirements. Do not impose unusual technical or security requirements solely for the purpose of precluding the acquisition of defense equipment from qualifying countries.
(f) Do not automatically exclude qualifying country sources from submitting offers because their supplies have not been tested and evaluated by the department/agency.
(1) Consider the adequacy of qualifying country service testing on a case-by-case basis. Departments or agencies that must limit solicitations to sources whose items have been service tested and evaluated by the department/agency shall consider supplies from qualifying country sources that have been tested and accepted by the qualifying country for service use.
(2) The department/agency may perform a confirmatory test, if necessary.
(3) Apply U.S. test and evaluation standards, policies, and procedures when the department/agency decides that confirmatory tests of qualifying country end products are necessary.
(4) Where it appears that these provisions might adversely delay service programs, obtain the concurrence of the DoD Acquisition Executive, Under Secretary of Defense (Acquisition & Technology), before excluding the qualifying country source from consideration.
(g) Permit industry representatives from a qualifying country to attend symposia, program briefings, prebid conferences (see FAR 14.207 and 15.201(c)), and similar meetings that address U.S. defense equipment needs and requirements. When practical, structure these meetings to allow attendance by representatives of qualifying country concerns.
(a) Qualifying country sources competing for DoD requirements must be responsive to the terms and conditions of DoD solicitations.
(b) Evaluate offers of end products from the qualifying country sources in 225.872-1(a) without application of the 50 percent Buy American Act or Balance of Payments Program evaluation factor, in accordance with 225.105 and 225.303.
(c) Evaluate offers of end products from the qualifying country sources in 225.872-1(b) without application of the 50 percent Buy American Act or Balance of Payments Program evaluation factor. If the offer, as evaluated, is low or otherwise eligible for award, the contracting officer shall request an exemption of the Buy American Act/Balance of Payments Program as inconsistent with the public interest, unless another exception such as the Trade Agreements Act applies.
(1) To obtain an exemption, process a Determination and Findings for signature—
(i) At a level above the contracting officer, for acquisitions of $25,000 or less;
(ii) By the chief of the contracting office, for acquisitions of $250,000 or less;
(iii) By the head of the contracting activity (HCA), for acquisitions of $2 million or less; or
(iv) By the head of the agency, or designee at a level no lower than an HCA, for acquisitions over $2 million.
(2) The Determination and Findings shall be substantially as follows for end items, or modified as necessary for components—
Upon the basis of the following findings and determination which I hereby make in accordance with the provisions of FAR 25.102, acquisition of (
1. The (
2. The United States Government and the Government of
3. The agreement provides that competitive offers of (
4. To achieve the above objectives, the solicitation contained the (
Pursuant to the Buy American Act and Balance of Payments Program, I hereby determine that it is inconsistent with the public interest to apply the restrictions of the Buy American Act or the Balance of Payments Program to the proposed offer.
(Date)
(a) Arrangements exist with some qualifying countries to provide reciprocal contract administration services. Some arrangements are at no cost to either government. To determine whether such an arrangement has been negotiated and what contract administration functions are covered, contact the Deputy Director of Defense Procurement (Foreign Contracting), ((703) 697-9351, DSN 227-9351).
(b) When contract administration services are required on contracts to be performed in qualifying countries, direct the request to the cognizant activity under DLAH 4105.4, section II, part 2 (DoD Directory of Contract Administration Services Components). Contract administration services for DoD subcontracts placed by qualifying country sources in the United States will be arranged by the cognizant activity under DLAH 4105.4, section II, part 2.
(c) The contract administration activity receiving a delegation or secondary delegation shall review the delegation to determine whether any portion of the delegation are covered by memoranda of understanding annexes, and delegate those functions to the appropriate organization in the qualifying country's government.
(d) Information on quality assurance delegations to foreign governments is in subpart 246.4, Government Contract Quality Assurance.
(a) Memoranda of understanding with some qualifying countries contain annexes that provide for reciprocal “no-cost” audits of contracts and subcontracts (pre- and post-award).
(b) To determine if such an annex is applicable to a particular qualifying country, contact the Deputy Director of Defense Procurement (Foreign Contracting) ((703) 697-9351, DSN 227-9351).
(c) Handle requests for audits in qualifying countries under 215.404-2(c).
(1) Except for the United Kingdom (UK), send the request to the administrative contracting officer at the cognizant activity listed in DLAH 4105.4, section II, part 2 (DoD Directory of Contract Administration Services Components). Send the request for audit from the UK directly to their Ministry of Defence. See section VII, DLAH 4105.4 for guidance.
(2) Send an advance copy of the request to the focal point identified by the Foreign Contracting Directorate, Office of the Director of Defense Procurement.
The required procedures for safeguarding classified defense information necessary for the performance of contracts awarded to qualifying country sources are in the DoD Industrial Security Regulation DoD 5220.22-R (implemented for the Army by AR 380-49; for the Navy by OPNAV Instruction 5540.8L; for the Air Force by AFR 205-4; for the Defense Information Systems Agency by DCA Instruction 240-110-8;
In reviewing contractor subcontracting procedures, the contracting officer shall ensure that the prime contract does not preclude qualifying country sources from competing for subcontracts, except when restricted by national security interest reasons, mobilization base considerations, or applicable U.S. laws or regulations. (See the clause at 252.225-7002, Qualifying Country Sources as Subcontractors.)
DoD and the Government of the United Kingdom (U.K.) have agreed to waive U.K. commercial exploitation levies and U.S. nonrecurring cost recoupment charges on a reciprocal basis. In order for U.K. levies to be waived, they must be identified and a waiver must be requested before award of the contract or subcontract under which the levies are charged.
(a) Waiver of U.K. levies must be approved by the Government of the U.K. When an offeror or contractor identifies a levy included in an offered or contract price, the contracting officer shall provide written notification to the Defense Security Cooperation Agency, Attn: PSD-PMD, 1111 Jefferson Davis Highway, Arlington, VA 22202-4306, telephone (703) 601-3864. The Defense Security Cooperation Agency will request a waiver of the levy from the Government of the U.K. The notification shall include—
(1) Name of the U.K. firm;
(2) Prime contract number;
(3) Description of item for which waiver is being sought;
(4) Quantity being acquired; and
(5) Amount of levy.
(b) Waiver may occur after contract award. Where levies are waived before contract award, the offer will be evaluated without the levy. Where levies are identified but not waived before contract award, the offer will be evaluated inclusive of the levies.
Use the clause at 252.225-7032, Waiver of United Kingdom Levies, in all solicitations and contracts for supplies—
(a) Where U.K. firms are expected to participate as offerors/prime contractors; or
(b) If a subcontract over $1 million with a U.K. firm is anticipated.
See 201.402(2) for approval authority for clause deviations in overseas contracts with governments of North Atlantic Treaty Organization (NATO) countries or other allies or with United Nations or NATO organizations.
Use the clause at 252.225-7041, Correspondence in English, in solicitations and contracts when contract performance will be wholly or in part in a foreign country.
Use the clause at 252.225-7042, Authorization to Perform, in solicitations and contracts when contract performance will be wholly or in part in a foreign country.
(a) This subpart contains restrictions on the acquisition of foreign products and services, imposed by Defense appropriations and authorization acts and other statutes. Refer to the acts to verify current applicability of the restrictions.
(b) Nothing in this subpart affects the applicability of the Buy American Act or Balance of Payments Program.
As used in this subpart—
(a)
(b)
(c)
(d)
(a) In accordance with Section 9005 of Public Law 102-396, as amended (10 U.S.C. 2241 note, Limitations on Food, Clothing, and Specialty Metals Not Produced in the United States), and Section 8109 of Public Law 104-208, do not acquire supplies consisting in whole or in part of any of the following, that have not been grown or produced in the United States or its possessions—
(1) Food, but this does not restrict acquisition of foods manufactured or processed in the United States or its possessions;
(2) Clothing;
(3) Tents, tarpaulins, or covers;
(4) Cotton and other natural fiber products, or wool (whether in the form of fiber or yarn or contained in fabrics, materials, or manufactured articles), but this does not restrict acquisition of cotton or wool reprocessed or reused in the United States or its possessions;
(5) Woven silk or woven silk blends;
(6) Spun silk yarn for cartridge cloth;
(7) Synthetic fabric or coated synthetic fabric, including all textile fibers and yarns that are for use in such fabrics;
(8) Canvas products; or
(9) Any item of individual equipment (Federal Supply Class 8465) manufactured from or containing any of the listed fibers, yarns, fabrics, or materials.
(b) Do not acquire specialty metals, including stainless steel flatware, that were not melted in steel manufacturing facilities located within the United States or its possessions.
(c) Do not acquire hand or measuring tools that were not produced in the United States or its possessions.
Acquisitions in the following categories are not subject to the restrictions in 225.7002-1—
(a) Any of the items in 225.7002-1(a) or (b), if the Secretary concerned, or designee, determines that they cannot be acquired when needed in a satisfactory quality and sufficient quantity grown or produced in the United States or its possessions at U.S. market prices.
(b) Outside the United States—
(1) In support of combat operations;
(2) Perishable foods by activities located outside the United States for their personnel; or
(3) Emergency acquisitions by such activities for their personnel.
(c) Acquisitions by vessels in foreign waters.
(d) Acquisitions of those supplies listed in FAR section 25.108(d)(1), unless the supplies are hand or measuring tools.
(e) Acquisitions not exceeding the simplified acquisition threshold.
(f) Acquisitions of end items incidentally incorporating cotton or wool, for
(g) Supplies purchased specifically for commissary resale.
(h) Purchases of specialty metals by subcontractors at any tier for programs, except—
(1) Aircraft;
(2) Missile and space systems;
(3) Ships;
(4) Tank-automotive;
(5) Weapons; and
(6) Ammunition.
(i) Purchases of specialty metals and chemical warfare protective clothing when the acquisition furthers an agreement with a qualifying country (see section 225.872).
(j) Purchases of fibers and yarns that are for use in synthetic fabric or coated synthetic fabric (but not the purchase of the synthetic or coated synthetic fabric itself), if—
(1) The fabric is to be used as a component of an end item that is not a textile product. Examples of textile products, made in whole or in part of fabric, include—
(i) Draperies, floor coverings, furnishings, and bedding (Federal Supply Group 72, Household and Commercial Furnishings and Appliances);
(ii) Items made in whole or in part of fabric in Federal Supply Group 83, Textile/leather/furs/apparel/findings/tents/flags, or Federal Supply Group 84, Clothing, Individual Equipment and Insignia;
(iii) Upholstered seats (whether for household, office, or other use); and
(iv) Parachutes (Federal Supply Class 1670); or
(2) The fibers and yarns are para-aramid fibers and yarns manufactured in—
(i) The Netherlands; or
(ii) Another qualifying country (see 225.872) if the Under Secretary of Defense (Acquisition and Technology) makes a determination in accordance with section 807 of Pub. L. 105-261 that—
(A) Procuring articles that contain only para-aramid fibers and yarns manufactured from suppliers within the United States or its possessions would result in sole source contracts or subcontracts for the supply of such para-aramid fibers and yarns;
(B) Such sole source contracts or subcontracts would not be in the best interest of the Government or consistent with the objectives of the Competition in Contracting Act (10 U.S.C. 2304); and
(C) The qualifying country permits U.S. firms that manufacture para-aramid fibers and yarns to compete with foreign films for the sale of para-aramid fibers and yarns in that country.
Unless an exception is known to apply—
(a) Use the clause at 252.225-7012, Preference for Certain Domestic Commodities, in all solicitations and contracts which meet or exceed the simplified acquisition threshold.
(b) Use the clause at 252.225-7014, Preference for Domestic Specialty Metals, in all solicitations and contracts over the simplified acquisition threshold that require delivery of an article containing specialty metals. Use the clause with its Alternate I in all solicitations and contracts over the simplified acquisition threshold requiring delivery, for one of the following major programs, of an article containing specialty metals—
(1) Aircraft;
(2) Missile and space systems;
(3) Ships;
(4) Tank-automotive;
(5) Weapons; or
(6) Ammunition.
(c) Use the clause at 252.225-7015, Preference for Domestic Hand or Measuring Tools, in all solicitations and contracts over the simplified acquisition threshold calling for delivery of hand or measuring tools.
For restriction on award of military construction contracts to be performed
For restriction on award of architect-engineer contracts to be performed in Japan, in any North Atlantic Treaty Organization member country, or in countries bordering the Arabian Gulf, see 236.602-70.
(a) Where provided for elsewhere in this subpart, the restrictions on certain foreign purchases under 10 U.S.C. 2534(a) may be waived as follows:
(1)(i) The Under Secretary of Defense (Acquisition and Technology), without power of delegation, may waive the restriction for a particular item for a particular foreign country upon determination that—
(A) United States producers of the item would not be jeopardized by competition from a foreign country, and that country does not discriminate against defense items produced in the United States to a greater degree than the United States discriminates against defense items produced in that country; or
(B) Application of the restriction would impede cooperative programs entered into between DoD and a foreign country, or would impede the reciprocal procurement of defense items under a memorandum of understanding providing for reciprocal procurement of defense items under 225.872, and that country does not discriminate against defense items produced in the United States to a greater degree than the United States discriminates against defense items produced in that country.
(ii) A notice of determination to exercise the waiver authority must be published in the
(iii) Such waiver shall be in effect for a period not greater than 1 year.
(iv) For contracts entered into prior to the effective date of a waiver, provided adequate consideration is received to modify the contract, such waiver shall be applied as directed or authorized in the waiver to—
(A) Subcontracts entered into on or after the effective date of the waiver; and
(B) Options for the procurement of items that are exercised after the effective date of the waiver, if the option prices are adjusted for any reason other than the application of the waiver.
(2) The head of the contracting activity may waive the restriction on a case-by-case basis upon execution of a determination and findings that any of the following applies:
(i) The restriction would cause unreasonable delays.
(ii) Satisfactory quality items manufactured in the United States or Canada are not available.
(iii) Application of the restriction would result in the existence of only one source for the item in the United States or Canada.
(iv) Application of the restriction is not in the national security interests of the United States.
(v) Application of the restriction would adversely affect a U.S. company.
(3) The restriction is waived when it would cause unreasonable costs. The cost of the item of U.S. or Canadian origin is unreasonable if it exceeds 150 percent of the offered price, inclusive of duty, of items which are not of U.S. or Canadian origin.
(b) In accordance with the provisions of paragraphs (a)(1)(i) through (a)(1)(iii) of this section, the Under Secretary of Defense (Acquisition and Technology) has waived the restrictions of 10 U.S.C. 2534(a) for certain items manufactured in the United Kingdom, including air circuit breakers for naval vessels and totally enclosed lifeboats (see 225.7016 and 225.7022). This waiver applies to—
(1) Procurements under solicitations issued on or after August 4, 1998; and
(2) Subcontracts and options under contracts entered into prior to August 4, 1998, under the conditions described in paragraphs (a)(1)(iv) of this section.
10 U.S.C. 7309 restricts constructing or repairing vessels in foreign shipyards.
(a) Do not award a contract to construct either of the following in a foreign shipyard—
(1) A vessel constructed for any of the armed forces; or
(2) A major component of the hull or superstructure of any such vessel.
(b) Do not overhaul, repair, or maintain in a foreign shipyard, a naval vessel (or any other vessel under the jurisdiction of the Secretary of the Navy) homeported in the United States. This restriction does not apply to voyage repairs.
In accordance with 10 U.S.C. 2534, do not acquire a multipassenger motor vehicle (bus) unless it is manufactured in the United States or Canada.
Apply this restriction if the buses are purchased, leased, rented, or made available under contracts for transportation services.
This restriction does not apply in any of the following circumstances:
(a) Buses manufactured outside the United States and Canada are needed for temporary use because buses manufactured in the United States or Canada are not available to satisfy requirements that cannot be postponed. Such use may not, however, exceed the lead time required for acquisition and delivery of buses manufactured in the United States or Canada.
(b) The requirement for buses is temporary in nature. For example, to meet a special, nonrecurring requirement or a sporadic and infrequent recurring requirement, buses manufactured outside the United States and Canada may be used for temporary periods of time. Such use may not, however, exceed the period of time needed to meet the special requirement.
(c) Buses manufactured outside the United States and Canada are available at no cost to the U.S. Government.
(d) The acquisition is for an amount that does not exceed the simplified acquisition threshold.
The waiver criteria at 225.7005(a) apply to this restriction.
(a) Public Law 92-570 precludes use of DoD appropriations for award to any foreign corporation, organization, person, or entity for research and development in connection with any weapon system or other military equipment if there is a U.S. corporation, organization, person, or entity—
(1) Equally competent; and
(2) Willing to perform at a lower cost.
(b) The statutory restriction in paragraph (a) of this section does not change the rules for selecting research and development contractors in FAR part 35. However, when a U.S. source and a foreign source are equally competent, award to the source that will provide the services at the lower cost.
In accordance with 10 U.S.C. 2534 and defense industrial mobilization requirements (see subpart 208.72), do not acquire chemical weapons antidote contained in automatic injectors, or the components for such injectors, unless the chemical weapons antidote or component is manufactured in the United States or Canada by a company that—
(a) Is a producer under the industrial preparedness program at the time of contract award;
(b) Has received all required regulatory approvals; and
(c) Has the plant, equipment, and personnel to perform the contract in the United States or Canada at the time of contract award.
The restriction of 225.7010-1 does not apply if—the acquisition is for an amount that does not exceed the simplified acquisition threshold.
The waiver criteria at 225.7005(a) apply to this restriction.
Competent, foreign firm, and U.S. firm have the meanings given in the provision at 252.225-7018, Notice of Prohibition of Certain Contracts with Foreign Entities for the Conduct of Ballistic Missile Defense RDT&E.
(a) Section 222 of the Defense Authorization Act for FY1988 and 1989 (Pub. L. 100-180) prohibits the award of certain contracts for the conduct of Ballistic Missile Defense (BMD) Program research, development, test, and evaluation (RDT&E), to foreign governments or firms unless the Secretary of Defense certifies to Congress in writing at any time during the applicable fiscal year that work cannot be competently performed by a U.S. firm at a price equal to or less than the price of the foreign government or firm.
(b) For purposes of implementing this section, heads of contracting activities are authorized to make this certification (see 225.7011-3(b)).
(c) Except as provided in 225.7011-3, do not use any funds appropriated to, or for the use of, DoD to enter into or carry out any contract, including any contract awarded as a result of a broad agency announcement, with a foreign government or firm if the contract provides for the conduct of RDT&E in connection with the BMD.
(d) This prohibition is not intended to deny access to foreign expertise when contract performance requires a level of competency unavailable in the United States.
This prohibition shall not apply—
(a) To contracts awarded to a foreign government or firm if the contracting officer determines that—
(1) The contract will be performed within the United States;
(2) The contract is exclusively for RDT&E in connection with antitactical ballistic missile systems; or
(3) The foreign government or foreign firm agrees to share a substantial portion of the total contract cost. Consider the foreign share as substantial if it is equitable with respect to the relative benefits to be derived from the contract by the United States and the foreign parties. For example, if the contract is more beneficial to the foreign party, its share of the cost should be correspondingly higher; or
(b) If the head of the contracting activity certifies in writing, before contract award, that a contract for research, development, testing, or evaluation (other than for RDT&E described in paragraph (a)(2) of this subsection) cannot be competently performed by a U.S. firm at a price equal to or less than the price at which the RDT&E would be performed by a foreign government or firm.
(a) When awarding a prime contract to a foreign government or firm under 225.7011-3(b), the contracting officer or source selection authority, as applicable, shall make a determination that will be the basis for the certification.
(1) The determination must—
(i) Describe the contract effort;
(ii) State the number of proposals solicited and received from both U.S. and foreign firms;
(iii) Identify the proposed awardee and the amount of the contract;
(iv) State that selection of the contractor was based on the evaluation factors contained in the solicitation, or the criteria contained in the broad agency announcement; and
(v) State that the effort cannot be competently performed by a U.S. firm at a price equal to, or less than, the price at which it would be performed by the foreign awardee.
(2) When either a broad agency announcement (BAA) or program research and development announcement (PRDA) is used, or when the determination is otherwise not based on direct competition between foreign and domestic proposals, the determination must not be merely conclusory.
(i) The determination must specifically explain its basis, include a description of the method used to determine the competency of U.S. firms, and describe the cost or price analysis performed.
(ii) Alternately, the determination may contain—
(A) A finding, including the basis for such finding, that the proposal was submitted solely in response to the terms of a BAA or PRDA, or other solicitation document without any technical guidance from the program office; and
(B) A finding, including the basis for such finding, that disclosure of the information in the proposal for the purpose of conducting a competitive acquisition is prohibited.
(b) Forward a copy of the certification (from 225.7011-3(b)) and, as appropriate, the determination or justification and approval (J&A) within 30 days of contract award to the Ballistic Missile Defense Organization, Attn: BMDO/DRI, 7100 Defense Pentagon, Washington, DC 20301-7100, if award is based on—
(1) A determination under paragraph (a) of this subsection;
(2) Other than full and open competition under FAR subpart 6.3; or
(3) An unsolicited proposal under FAR subpart 15.6.
Use the provision at 252.225-7018, Notice of Prohibition of Certain Contracts With Foreign Entities for the Conduct of Ballistic Missile Defense RDT&E, in all competitively negotiated BMD solicitations for research, development, test, and evaluation, unless foreign participation is otherwise excluded.
(a) Under Public Law 101-511, Section 8041, and similar sections in subsequent Defense appropriations acts, DoD appropriations for fiscal years 1991 and after may not be used to acquire welded shipboard anchor and mooring chain, four inches in diameter and under, unless—
(1) It is manufactured in the United States, including cutting, heat treating, quality control, testing, and welding (both forging and shot blasting process); and
(2) The cost of the components manufactured in the United States exceeds 50 percent of the total cost of components.
(b) Acquisition of welded shipboard anchor and mooring chain, four inches in diameter and under, when used as a component of a naval vessel, is also restricted under 10 U.S.C. 2534(a)(3)(ii). However, the more stringent restriction under 225.7012-1(a) takes precedence.
The restriction in 225.7012-1(a) may be waived by the Secretary of the Department responsible for acquisition, on a case-by-case basis, where sufficient domestic suppliers are not available to meet DoD requirements on a timely basis and the acquisition is necessary to acquire capability for national security purposes.
(a) Document the waive in a written D&F containing—
(1) The factors supporting the waiver; and
(2) A certification that the acquisition must be made in order to acquire capability for national security purposes.
(b) Provide a copy of the D&F to the House and Senate Committees on Appropriations.
Use the clause at 252.225-7019, Restriction on Acquisition of Foreign Anchor and Mooring Chain, in all solicitations and contracts—
(a) Using fiscal year 1991 or later funds; and
(b) Requiring welded shipboard anchor or mooring chain of four inches in diameter or less.
In accordance with Pub. L. 101-165 and 101-511, fiscal years 1990 and 1991 funds may not be used to acquire second and third generation night vision image intensifier tubes and devices unless they are manufactured in the United States or Canada.
Second and third generation night vision image intensifier tubes and devices manufactured outside the United States or Canada may be acquired if—
(a) Adequate domestic supplies are not available to meet DoD requirements on a timely basis; and
(b) The Secretary of the Department responsible for the acquisition certifies to the House and Senate Committees on Appropriations that the acquisition of tubes and devices manufactured outside the United States or Canada is necessary in order to acquire capability for national security purposes.
Use the clause at 252.225-7024, Restriction on Acquisition of Night Vision Image Intensifier Tubes and Devices, in all solicitations and contracts which—
(a) Use fiscal year 1990 or 1991 funds; and
(b) Require second and third generation night vision image intensifier tubes and devices.
In accordance with 10 U.S.C. 2534 and 225.7005(b), do not acquire air circuit breakers for naval vessels unless they are manufactured in the United States, Canada, or the United Kingdom.
This restriction does not apply if—
(a) The acquisition is for an amount that does not exceed the simplified acquisition threshold; or
(b) Spare or repair parts are needed to support air circuit breakers manufactured outside the United States. Support includes the purchase of spare air circuit breakers where those from alternate sources are not interchangeable.
The waiver criteria at 225.7005(a) apply to this restriction.
Use the clause at 252.225-7029, Preference for United States or Canadian Air Circuit Breakers, in all solicitations and contracts requiring air circuit breakers for naval vessels, unless—
(a) An exception under 225.7016-2 is known to apply; or
(b) A waiver has been granted in accordance with 225.7016-3.
In accordance with section 8111 of Pub. L. 102-172, and similar sections in subsequent appropriations acts, all carbon, alloy, and armor steel plate in Federal stock class 9515 or described by American Society for Testing Materials (ASTM) or American Iron and Steel Institute (AISI) specifications, purchased by the Government or a contractor for use in a Government-owned facility or in a facility controlled (e.g., leased) by DoD, shall be melted and rolled in the United States or Canada.
This restriction does not apply to—
(a) Contracts in effect as of November 26, 1991;
(b) Direct purchases by DoD using other than fiscal year 1992 or subsequent year funds; or
(c) Purchases by contractors unless the prime contract uses fiscal year 1992 or subsequent year funds.
The restriction may be waived by the Secretary of the department responsible for acquisition, on a case-by-case, by certifying to the House and Senate Committees on Appropriations that—
(a) Adequate U.S. or Canadian supplies are not available to meet DoD requirements on a timely basis; and
(b) The acquisition must be made in order to acquire capability for national security purposes.
Unless an exception under 225.7017-2 is known to apply or a waiver has been granted in accordance with 225.7017-3, use the clause at 252.225-7030, Restriction on Acquisition of Carbon, Alloy, and Armor Steel Plate, in all solicitations and contracts which—
(a) Require the delivery to the Government of carbon, alloy, or armor steel plate which will be used in a facility owned by the Government or under the control of DoD; or
(b) Require contractors operating in a Government-owned facility or a facility under the control of DoD to purchase carbon, alloy, or armor steel plate.
In accordance with section 9108 of Public Law 102-396, no fiscal year 1993 funds shall be used to procure four ton dolly jacks manufactured outside the United States.
The restriction is 225.7018-1 may be waived on a case-by-case basis where the Secretary of the Military Department or the Under Secretary of Defense (Acquisition & Technology) certifies to the Committees on Appropriations of the House and Senate that—
(a) Adequate domestic supplies are available to meet requirements on a timely basis; and
(b) The acquisition must be made in order to acquire capability for national security purposes.
Use the clause at section 252.225-7033, Restriction on Acquisition of Four Ton Dolly Jacks, in solicitations and contracts that use fiscal year 1993 funds for the acquisition of four ton dolly jacks.
(a) In accordance with 10 U.S.C. 2534 and 225.7019-3(b)(5), through fiscal year 2000, do not acquire ball and roller bearings or bearing components that are not manufactured in the United States, Canada, or the United Kingdom.
(b) In accordance with Section 8099 of Public Law 104-61 and similar sections
(a) The restriction in 225.7019-1(a) does not apply to—
(1) Acquisitions using simplified acquisition procedures, unless ball or roller bearings or bearing components are the end items being purchased;
(2) Purchases of commercial items incorporating ball or roller bearings;
(3) Miniature and instrument ball bearings when necessary to meet urgent military requirements;
(4) Items acquired overseas for use overseas; or
(5) Ball and roller bearings or bearing components or items containing bearings for use in a cooperative or co-production project under an international agreement. This exception does not apply to miniature and instrument ball bearings.
(b) The restriction in 225.7019-1(b) does not apply to contracts for acquisition of commercial items or subcontracts for acquisition of commercial items or subcontracts for acquisition of commercial items or commercial components (see 212.503(a)(xi) and 212.504(a)(xxxvi)).
(a) The head of the contracting activity may waive the restriction in 225.7019-1(a)—
(1) Upon execution of a determination and findings that—
(i) No domestic (U.S. or Canadian) bearing manufacturer meets the requirement;
(ii) It is not in the best interests of the United States to qualify a domestic bearing to replace a qualified nondomestic bearing. This determination must be based on a finding that the qualification of a domestically manufactured bearing would cause unreasonable costs or delay. A finding that a cost is unreasonable should take into consideration DoD policy to assist the domestic industrial mobilization base. Contracts should be awarded to domestic bearing manufacturers to increase their capability to reinvest and become more competitive;
(iii) Application of the restriction would result in the existence of only one source for the item in the United States or Canada;
(iv) Application of the restriction is not in the national security interests of the United States; or
(v) Application of the restriction would adversely affect a U.S. company.
(2) If the acquisition is for an amount less than the simplified acquisition threshold and simplified acquisition procedures are being used.
(3) For multiyear contracts or contracts exceeding 12 months, except those for miniature and instrument ball bearings, only if—
(i) The head of the contracting activity executes a determination and findings in accordance with paragraph (a) of this subsection;
(ii) The contractor submits a written plan for transitioning from the use of nondomestic to domestically manufactured bearings;
(iii) The plan—
(A) States whether a domestically manufactured bearing can be qualified, at a reasonable cost, for use during the course of the contract period;
(B) Identifies any bearings that are not domestically manufactured, their application, and source of supply; and
(C) Describes, including cost and timetable, the transition to a domestically manufactured bearing. (The timetable for the transition should normally take no longer than 24 months from the date the waiver is granted); and
(iv) The contracting officer accepts the plan and incorporates it in the contract.
(4) For miniature and instrument ball bearings, only if the contractor agrees to acquire a like quantity and type of domestic manufacture for nongovernmental use.
(b)(1) The Under Secretary of Defense (Acquisition and Technology), without power of delegation, may waive the restriction in 225.7019-1(a) for a particular foreign country upon determination that—
(i) United States producers of the item would not be jeopardized by competition from a foreign country, and that country does not discriminate against defense items produced in the United States to a greater degree than the United States discriminates against defense items produced in that country; or
(ii) Application of the restriction would impede cooperative programs entered into between DoD and a foreign country, or would impede the reciprocal procurement of defense items under a memorandum of understanding providing for reciprocal procurement of defense items under 225.872, and that country does not discriminate against defense items produced in the United States to a greater degree than the United States discriminates against defense items produced in that country.
(2) A notice of the determination to exercise the waiver authority must be published in the
(3) Such waiver shall be in effect for a period not greater than 1 year.
(4) For contracts entered into prior to the effective date of a waiver, provided adequate consideration is received to modify the contract, such waiver shall be applied as directed or authorized in the waiver to—
(i) Subcontracts entered into on or after the effective date of the waiver; and
(ii) Options for the procurement of items that are exercised after the effective date of the waiver, if the option prices are adjusted for any reason other than the application of the waiver.
(5) In accordance with the provisions of paragraphs (b)(1) through (b)(3) of this subsection, the Under Secretary of Defense (Acquisition and Technology) has waived the restrictions of 10 U.S.C. 2534(a)(5) for ball and roller bearings manufactured in the United Kingdom. This waiver applies to—
(i) Procurements under solicitations issued on or after August 4, 1998; and
(ii) Subcontracts and options under contracts entered into prior to August 4, 1998, under the conditions described in paragraph (b)(4) of this subsection.
(c) The Secretary of the department responsible for the acquisition may waive the restriction in 225.7019-1(b) on a case-by-case basis, by certifying to the House and Senate Committees on Appropriations that—
(1) Adequate domestic supplies are not available to meet DoD requirements on a timely basis; and
(2) The acquisition must be made in order to acquire capability for national security purposes.
Use the clause at 252.225-7016, Restriction on Acquisition of Ball and Roller Bearings, in all solicitations and contracts, unless—
(a) The restrictions in 225.7019-1 do not apply or a waiver has been granted; or
(b) The contracting officer knows that the items being acquired do not contain ball or roller bearings.
In accordance with section 8090 of the Fiscal Year 1994 Defense Appropriations Act (Pub. L. 103-139) and section 8075 of the Fiscal Year 1995 Defense Appropriations Act (Pub. L. 103-335), do not purchase aircraft fuel cells unless they are produced or manufactured in the United States by a domestic-operated entity.
The restriction may be waived by the Secretary of the department responsible for the acquisition, on a case-by-case basis, by certifying to the House
(a) Adequate U.S. supplies are not available to meet requirements on a timely basis; and
(b) The acquisition must be made in order to acquire capability for national security purposes.
Unless a waiver has been granted in accordance with 225.7021-2, use the clause at 252.225-7038, Restriction on Acquisition of Aircraft Fuel Cells, in all solicitations and contracts which—
(a) Use fiscal year 1994 or 1995 funds; and
(b) Require delivery of aircraft fuel cells.
(a) In accordance with Section 8124 of the Fiscal Year 1994 Defense Appropriations Act (Public Law 103-139) and Section 8093 of the Fiscal Year 1995 Defense Appropriations Act (Public Law 103-335), do not purchase a totally enclosed lifeboat survival system, which consists of the lifeboat and associated davits and winches, unless 50 percent or more of the components are manufactured in the United States, and 50 percent or more of the labor in the final manufacture and assembly of the entire system is performed in the United States.
(b) In accordance with 10 U.S.C. 2534(a)(3)(B) and 225.7005(b), do not purchase a totally enclosed lifeboat that is a component of a naval vessel, unless it is manufactured in the United States, Canada, or the United Kingdom.In accordance with 10 U.S.C. 2534(h), this restriction may not be implemented through the use of a contract clause or certification. Implementation shall be effected through management and oversight techniques that achieve the objective of the restriction without imposing a significant management burden on the Government or the contractor involved.
The restriction in 225.7022-1(b) does not apply if—
(a) The acquisition is for an amount that does not exceed the simplified acquisition threshold; or
(b) Spare or repair parts are needed to support totally enclosed lifeboats manufactured outside the United States.
The waiver criteria at 225.7005(a) apply only to the restriction of 225.7022-1(b).
Use the clause at 252.225-7039, Restriction on Acquisition of Totally Enclosed Lifeboat Survival Systems, in all solicitations and contracts which require delivery of totally enclosed lifeboat survival systems.
In accordance with section 8112 of Pub. L. 100-202, and similar sections in subsequent Defense Appropriations Acts, do not purchase any supercomputer that is not manufactured in the United States.
The restriction in 225.7023-1 may be waived by the Secretary of Defense on a case-by-case basis, after the Secretary of Defense certifies to the Armed Services and Appropriations Committees of Congress that—
(a) Adequate U.S. supplies are not available to meet requirements on a timely basis; and
(b) The acquisition must be made in order to acquire capability for national security purposes.
Use the clause at 252.225-7011, Restriction on Acquisition of Supercomputers, in solicitations and contracts for the acquisition of supercomputers.
This subpart contains foreign product restrictions which are based on policies designed to protect the defense industrial base.
Relevant definitions are in the clause at 252.225-7025, Restriction on Acquisition of Forgings.
DoD requirements for the following forging items, whether as end items or components, shall be acquired from domestic sources (as described in the clause at 252.225-7025) to the maximum extent practicable—
The policy in 225.7102-1 does not apply to acquisitions—
(a) Using simplified acquisition procedures, unless the restricted item is the end item being purchased;
(b) Overseas for overseas use; or
(c) When the quantity acquired exceeds the amount needed to maintain the U.S. defense mobilization base (provided such quantity is an economical purchase quantity). The restriction to domestic sources does not apply to the quantity above that required to maintain the base, in which case, qualifying country sources may compete.
Upon request from a prime contractor, the contracting officer may waive the requirement for domestic manufacture of the items covered by the policy in 225.7102-1.
(a) Use the clause at 252.225-7025, Restriction on Acquisition of Forgings, in solicitations and contracts, except for acquisitions—
(1) Excepted in 225.7102-2; or
(2) Where the contracting officer knows that the supplies being acquired do not contain the restricted items.
(b) If an exception under 225.7102-2 applies to any portion of the acquisition, specify the exception in the solicitation and contract.
All new major systems must use U.S. or Canadian manufacturers or producers for all PAN carbon fiber requirements.
Contracting officers may, with the approval of the chief of the contracting office, waive, in whole or in part, the requirement of the clause at 252.225-7022. For example, a waiver may be justified if a qualified U.S. or Canadian source cannot meet scheduling requirements.
Use the clause at 252.225-7022, Restriction on Acquisition of Polyacrylonitrile (PAN) Carbon Fiber, in all acquisitions for major systems (as defined in FAR part 2) that are not
This subpart prescribes procedures for contractor reporting and DoD monitoring of the volume, type, and nature of contract performance outside the United States, to include subcontracts, purchases, and intracompany transfers. It implements 10 U.S.C. 2410g which requires advance notification of contract performance outside the United States and Canada when the contract could have been performed inside the United States or Canada.
This subpart does not apply to contracts for commercial items, construction, ores, natural gas, utilities, petroleum products and crudes, timber (logs), or subsistence.
The contracting officer shall forward a copy of reports submitted by successful offerors as required by the clause at 252.225-7026, Reporting of Contract Performance Outside the United States, to the Deputy Director of Defense Procurement (Foreign Contracting), OUSD(A&T)DP(FC), Washington, DC 20301-3060. This is necessary to satisfy the requirement of 10 U.S.C. 2410g that the notifications (or copies) be maintained in compiled form for five years after the date of submission.
Except for acquisitions in 225.7201, use the clause at 252.225-7026, Reporting of Contract Performance Outside the United States, in all solicitations and contracts with an estimated or actual value exceeding $500,000, including those modified to exceed $500,000.
(a) This subpart contains policies and procedures for acquisitions for foreign military sales (FMS) under the Arms Export Control Act (22 U.S.C. Chapter 39). Section 22 of the Arms Export Control Act (22 U.S.C. 2762) authorizes DoD to enter into contracts for resale to foreign countries or international organizations.
(b) This subpart does not apply to—
(1) FMS made from inventories or stocks;
(2) Acquisitions for replenishment of inventories or stocks; or
(3) Acquisitions made under DoD cooperative logistic supply support arrangements.
(a) The U.S. Government sells defense articles and services to foreign governments or international organizations through FMS agreements. The agreement is documented in a Letter of Offer and Acceptance (LOA) (see DoD 5105.38-M, Security Assistance Management Manual). The LOA—
(1) Lists the items and services, estimated costs, and terms and conditions of the sale;
(2) Is presented to the foreign customer; and
(3) Provides for signature of the foreign customer to indicate acceptance.
(b) Acquisitions for FMS are conducted under the same acquisition and contract management procedures as other defense acquisitions.
(c) Solicitations shall separately identify known FMS requirements and the FMS customer.
(d) Contracts for known FMS requirements shall clearly be marked “FMS
On FMS programs that will require an acquisition, the contracting officer assists the departmental/agency activity responsible for preparing the LOA by—
(a) Working with prospective contractors to—
(1) Identify, in advance of the LOA, any unusual provisions or deviations.
(2) Advise the contractor if the departmental/agency activity expands, modifies, or does not accept any requirements proposed by the contractor;
(3) Identify any logistics support necessary to perform the contract; and
(4) For acquisitions over $10,000 that are to be awarded noncompetitively, asking the prospective contractor(s) for information on price, delivery, and other relevant factors. The request for information must identify the fact that the information is for a potential foreign military sale and must identify the foreign customer.
(b) Working with the departmental/agency activity responsible for preparing the LOA to—
(1) Assist, as necessary, in preparation of the LOA;
(2) Identify and explain all unusual contractual requirements or requests for deviations; and
(3) Assist in preparing the price and availability data.
(a) Price FMS contracts using the same principles as are used in pricing other defense contracts. Application of the pricing principles in FAR parts 15 and 31 to an FMS contract may result in prices that differ from other defense contract prices for the same item due to the considerations in this section.
(b) If the foreign government has conducted a competition resulting in adequate price competition (see FAR 15.403-1(b)(1)), the contracting officer must not require the submission of cost or pricing data. The contracting officer should consult with the foreign government through security assistance personnel to determine if adequate price competition has occurred.
If the contractor has made sales of the item required for the foreign military sale to foreign customers under comparable conditions, including quantity and delivery, price the FMS contract in accordance with FAR part 15.
(a) In pricing FMS contracts where non-U.S. Government prices as described in 225.7303-1 do not exist, except as provided in 225.7303-5, recognize the reasonable and allocable costs of doing business with a foreign government or international organization, even though such costs might not be recognized in the same amounts in pricing other defense contracts. Examples of such costs include, but are not limited to—
(1) Selling expenses (not otherwise limited by FAR part 31), e.g.—
(i) Maintaining international sales and service organizations;
(ii) Sales commissions and fees in accordance with FAR subpart 3.4;
(iii) Sales promotions, demonstrations, and related travel for sales to foreign governments. Paragraph 126.8 of the International Traffic in Arms Regulations (ITAR) (22 CFR part 121) may require Government approval for these costs to be allowable. If Government approval is required for promotion or demonstration costs to be allowable, the approval must be obtained.
(iv) Configuration studies and related technical services undertaken as a direct selling effort to a foreign country.
(2) Product support and post-delivery service expenses, such as—
(i) Operations or maintenance training, training or tactics films, manuals, or other related data; and
(ii) Technical field services provided in a foreign country related to accident
(3) Offset costs.
(i) A U.S. defense contractor may recover all costs incurred for offset agreements with a foreign government or international organization if the LOA is financed wholly with customer cash or repayable foreign military finance credits.
(ii) The U.S. Government assumes no obligation to satisfy or administer the offset requirement or to bear any of the associated costs.
(4) Costs that are the subject of advance agreement under the appropriate provisions of FAR part 31; or where the advance understanding places a limit on the amounts of cost that will be recognized as allowable in defense contract pricing, and the agreement contemplated that it will apply only to DoD contracts for the U.S. Government's own requirement (as distinguished from contracts for FMS).
(b) Costs not allowable under FAR part 31 are not allowable in pricing FMS contracts, except as noted in paragraph (c) of this subsection.
(c) The cost limitations for major contractors on independent research and development and bid and proposal (IR&D/B&P) costs for projects that are of potential interest to DoD, in 231.205-18(c)(iii), do not apply to FMS contracts, except as provided in 225.7303-5. Therefore, the cost limitations on independent research and development and bid and proposal (IR&D/B&P) costs in FAR 31.205-18 do not apply to such contracts, except as provided in 225.7303-5. The allowability of IR&D/B&P costs on contracts for FMS not wholly paid for from funds made available on a nonrepayable basis shall be limited to the contract's allocable share of the contractor's total IR&D/B&P expenditures. In pricing contracts for such FMS—
(1) Use the best estimate of reasonable costs in forward pricing.
(2) Use actual expenditures, to the extent that they are reasonable, in determining final cost.
(d) Under paragraph (e)(1)(A) of Section 21 of the Arms Export Control Act (22 U.S.C. 2761), the United States must charge for administrative services to recover the estimated cost of administration of sales made under the Army Export Control Act.
If a government-to-government agreement between the United States and a foreign government for the sale, coproduction, or cooperative logistic support of a specifically defined weapon system, major end item, or support item, contains language in conflict with the provisions of this section, the language of the government-to-government agreement prevails.
(a) Except as provided in paragraph (b) of this subsection, contingent fees are generally allowable under DoD contracts, provided the fees are determined by the contracting officer to be fair and reasonable and are paid to a bona fide employee or a bona fide established commercial or selling agency maintained by the prospective contractor for the purpose of securing business (see FAR Part 31 and FAR Subpart 3.4).
(b)(1) Under DoD 5105.38-M, LOAs for requirements for the governments of Australia, Taiwan, Egypt, Greece, Israel, Japan, Jordan, Republic of Korea, Kuwait, Pakistan, Philippines, Saudi Arabia, Turkey, Thailand, or Venezuela (Air Force) must provide that all U.S. Government contacts resulting from the LOAs prohibit the reimbursement of contingent fees as an allowable cost under the contract, unless the payments have been identified and approved in writing by the foreign customer before contract award (see 225.7308(a)).
(2) For FMS to countries not listed in paragraph (b)(1) of this subsection, contingent fees exceeding $50,000 per FMS case shall be unallowable under DoD contracts, unless payment has been identified and approved in writing by
(a) In accordance with 22 U.S.C. 2762(d), FMS wholly paid for from funds made available on a nonrepayable basis shall be priced on the same costing basis with regard to profit, overhead, IR&D/B&P, and other costing elements, as is applicable to acquisitions of like items purchased by DoD for its own use.
(b) Direct costs associated with meeting a foreign customer's additional or unique requirements will be allowable under such contracts. Indirect burden rates applicable to such direct costs shall be permitted at the same rates applicable to acquisitions of like items purchased by DoD for its own use.
(c) A U.S. defense contractor may not recover costs incurred for offset agreements with a foreign government or international organization if the LOA is financed with funds made available on a nonrepayable basis.
(a) FMS customers may request that a defense article or defense service be obtained from a particular contractor. In such cases, FAR 6.302-4 provides authority to contract without full-and-open competition. The FMS customer may also request that a subcontract be placed with a particular firm. The contracting officer shall honor such requests from the FMS customer only if the LOA or other written direction sufficiently fulfills the requirements of FAR subpart 6.3.
(b) Do not allow representatives of the FMS customer to—
(1) Direct the deletion of names of firms from bidders mailing lists or slates of proposed architect-engineer firms. (They may suggest the inclusion of certain firms);
(2) Interfere with a contractor's placement of subcontracts; or
(3) Participate in the price negotiations between the U.S. Government and the contractor.
(c) Do not accept directions from the FMS customer on source selection decisions or contract terms (except that, upon timely notice, the contracting officer may attempt to obtain any special contract provisions and warranties requested by the FMS customer).
(d) Do not honor any requests by the FMS customer to reject any bid or proposal.
The contracting officer must advise the contractor whenever the foreign customer will assume the risk for loss or damage under the appropriate limitation of liability clause(s) (see FAR subpart 46.8). Consider the costs of necessary insurance, if any, obtained by the contractor to cover the risk of loss or damage in establishing the FMS contract price.
Consider changes to cost and profit attributable to pricing differences between U.S. and FMS requirements when exercising an option to satisfy an FMS requirement. Also consider such changes if the option is already identified for FMS, but it is exercised for country B requirements instead of the country A requirements for which it was priced.
In accordance with the Presidential policy statement of April 16, 1990, DoD does not encourage, enter into, or commit U.S. firms to FMS offset arrangements. The decision whether to engage in offsets, and the responsibility for negotiating and implementing offset arrangements, resides with the companies involved.
(a) Use the clause at 252.225-7027, Restriction on Contingent Fees for Foreign Military Sales, in all solicitations and contracts for FMS.
(b) Use the clause at 252.225-7028, Exclusionary Policies and Practices of Foreign Governments, in all solicitations and contracts for the purchase of goods and services for international military education training and FMS.
This subpart pertains to antiterrorism/force protection policy for contracts that require performance or travel outside the United States.
Information and guidance pertaining to DoD antiterrorism/force protection can be obtained from the following offices:
(a) For Navy contracts: Naval Criminal Investigative Service (NCIS), Code 24; telephone, DSN 228-9113 or commercial (202) 433-9113.
(b) For Army contracts: HQDA (DAMO-ODL)/ODCSOP; telephone, DSN 225-8491 or commercial (703) 695-8491.
(c) For Marine Corps contracts: CMC Code POS-10; telephone, DSN 224-4177 or commercial (703) 614-4177.
(d) For Air Force contracts: HQ AFSFC/SFPT; telephone, DSN 473-0927/0928 or commercial (210) 671-0927/0928.
(e) For Combatant Command contracts: The appropriate Antiterrorism Force Protection Office at the Command Headquarters.
(f) For Defense Agencies: The appropriate agency security office.
(g) For additional information: Assistant Secretary of Defense for Special Operations and Low Intensity Conflict, ASD (SOLIC); telephone, DSN 255-0044 or commercial (703) 695-0044.
Use the clause at 252.225-7043, Antiterrorism/Force Protection Policy for Defense Contractors Outside the United States, in solicitations and contracts that require performance or travel outside the United States, except for contracts with—
(a) Foreign governments;
(b) Representatives of foreign governments; or
(c) Foreign corporations wholly owned by foreign governments.
41 U.S.C. 421 and 48 CFR chapter 1.
(f) The contracting officer shall submit a request for funding of the Indian incentive to the Office of Small and Disadvantaged Business Utilization,
(a) Also use the clause at FAR 52.226-1, Utilization of Indian Organizations and Indian-Owned Economic Enterprises, in contracts—
(i) With contractors that have comprehensive subcontracting plans approved under the test program described at 219.702(a); and
(ii) That contain the clause at 252.219-7004, Small, Small disadvantaged and Women-Owned Small Business Subcontracting Plan (Test Program).
This subpart implements the historically black college and university (HBCU) and minority institution (MI) provisions of 10 U.S.C. 2323, which—
(a) Set a goal for DoD for each of fiscal years 1987 through 2000 to award five percent of contract and subcontract dollars to small disadvantaged business concerns and HBCU/MIs; and
(b) Require a separate goal, for each of fiscal years 1991 through 2000, as a subset of the five percent goal, for the participation of HBCUs and MIs.
Definitions of HBCUs and MIs are in the clause at 252.226-7000.
The DoD will use outreach efforts, technical assistance programs, advance payments, HBCU/MI set-asides, and evaluation preferences to meet its contract and subcontract goal for use of HBCUs and MIs. In addition, DoD will establish “infrastructure assistance” (e.g., scholarships, faculty development, teaming agreements with defense laboratories, and laboratory renovation) at colleges, universities, and institutions that agree to bear a substantial portion of the costs associated with the progams.
Set-aside acquisitions for exclusive HBCU and MI participation when the acquisition is for research, studies, or services of the type normally acquired from higher educational institutions and there is a reasonable expectation that—
(a) Offers will be submitted by at least two responsible HBCUs or MIs which can comply with the subcontracting limitations in the clause at FAR 52.219-14;
(b) Award will be made at not more than ten percent above fair market price; and
(c) Scientific and/or technological talent consistent with the demands of the acquisition will be offered.
(a) As a general rule, use competitive negotiation for HBCU/MI set-asides.
(b) When using a broad agency announcement (FAR 35.016) for basic or applied research, make partial set-asides for HBCU/MIs as explained in 235.016.
(c) Follow the special synopsis instructions in 205.207(d) (iii), (iv), and (v).
(d) Cancel the set-aside if the low responsible offer exceeds the fair market price (defined in FAR part 19) by more than ten percent.
(a) To be eligible for award as an HBCU or MI under the preference procedures of this subpart, an offeror must—
(1) Be an HBCU or MI, as defined in the clause at 252.226-7000, Notice of Historically Black College or University and Minority Institution Set-Aside, at the time of submission of its initial offer including price; and
(2) Provide the contracting officer with evidence of its HBCU or MI status upon request.
(b) The contracting officer shall accept an offeror's HBCU or MI status under the provision at 252.226-7001, unless—
(1) Another offeror challenges the status; or
(2) The contracting officer has reason to question the offeror's HBCU/MI status. (A list of HBCUs is published periodically by the Department of Education.)
Any offeror or other interested party may challenge an offeror's HBCU or MI representation by filing a protest with the contracting officer. The protest must contain specific detailed evidence supporting the basis for the challenge. Such protests are handled in accordance with FAR 33.103 and are decided by the contracting officer.
(a) In reviewing subcontracting plans submitted under the clause at FAR 52.219-9, Small Business and Small Disadvantaged Business Subcontracting Plan, the contracting officer shall—
(1) Ensure that the contractor included anticipated awards to HBCU/MIs in the small disadvantaged business goal;
(2) Consider whether subcontracts are contemplated which involve research or studies of the type normally performed by higher educational institutions.
(b) The contracting officer may, when contracting by negotiation, insert in solicitations and contracts a clause similar to the clause at FAR 52.219-10, Incentive Subcontracting Program, when a subcontracting plan is required, and inclusion of a monetary incentive is, in the judgment of the contracting officer, necessary to increase subcontracting opportunities for historically black colleges or universities and minority institutions. The clause should include a separate goal for historically black colleges or universities and minority institutions.
(a) Use the clause at 252.226-7000, Notice of Historically Black College or University and Minority Institution Set-Aside, in solicitations and contracts set-aside for HBCU/MIs.
(b) Use the provision at FAR 52.226-2, Historically Black College or University and Minority Institution Representation, in solicitations set aside for HBCU/MIs.
This subpart implements section 2912 of the Fiscal Year 1994 Defense Authorization Act (Pub. L. 103-160) and section 817 of the Fiscal Year 1995 Defense Authorization Act (Pub. L. 103-337).
Businesses located in the vicinity of a military installation that is being closed or realigned under a base closure law, including 10 U.S.C. 2687, and small and small disadvantaged businesses shall be provided maximum practicable opportunity to participate in acquisitions that support the closure or realignment, including acquisitions for environmental restoration and mitigation.
In considering acquisitions for award through the section 8(a) program (subpart 219.8 and FAR subpart 19.8) or in making set-aside decisions under subpart 219.5 and FAR subpart 19.5 for acquisitions in support of a base closure or realignment, the contracting officer shall—
(a) Determine whether there is a reasonable expectation that offers will be received from responsible business concerns located in the vicinity of the military installation that is being closed or realigned.
(b) If offers can not be expected from business concerns in the vicinity, proceed with section 8(a) or set-aside consideration as otherwise indicated in part 219 and FAR part 19.
(c) If offers can be expected from business concerns in the vicinity—
(1) Consider section 8(a) only if the 8(a) contractor is located in the vicinity.
(2) Set aside the acquisition for small business only if one of the expected offers is from a small business located in the vicinity.
When planning for contracts for services related to base closure activities at a military installation affected by a closure or realignment under a base closure law, contracting officers shall consider including, as a factor in source selection, the extent to which offerors specifically identify and commit, in their proposals, to a plan to hire residents of the vicinity of the military installation that is being closed or realigned.
This subpart identifies the various policies and statutory authorities that affect contracts associated with the closure and realignment of military installations. These policies and authorities are—
(a)
(b)
(c)
41 U.S.C. 421 and 48 CFR chapter 1.
(a) Pursuant to FAR 27.304-1(e), the contracting officer shall insert the clause at 252.227-7039, Patents—Reporting of Subject Inventions, in solicitations and contracts containing the clause at FAR 52.227-11, Patent Rights—Retention by the Contractor (Short Form).
Interim and final invention reports and notification of all subcontracts for experimental, developmental, or research work (FAR 27.304-1(e)(2)(ii)) may be submitted on DD Form 882, Report of Inventions and Subcontracts.
The contracting officer shall insert the clause at 252.227-7034, Patents-Subcontracts, in solicitations and contracts containing the clause at FAR 52.227-11, Patent Rights—Retention by the Contractor (Short Form).
DoD activities shall use the guidance in subparts 227.71 and 227.72 instead of the guidance in FAR subpart 27.4.
This subpart prescribes policy with respect to foreign license and technical assistance agreements.
In furtherance of the Military Assistance Program or for other national defense purposes, the Government may undertake to develop or encourage the development of foreign additional sources of supply. The development of such sources may be accomplished by an agreement, often called a foreign licensing agreement or technical assistance agreement, wherein a domestic concern, referred to in this subpart as a “primary source,” agrees to furnish to a foreign concern or government, herein referred to as a “second source;” foreign patent rights; technical assistance in the form of data, know-how, trained personnel of the primary source, instruction and guidance of the personnel of the second source, jigs, dies, fixtures, or other manufacturing aids, or such other assistance, information, rights, or licenses as are needed to enable the second source to produce particular supplies or perform particular services. Agreements calling for one or more of the foregoing may be entered into between the primary source and the Government, a foreign government, or a foreign concern. The consideration for providing such foreign license and technical assistance may be in the form of a lump sum payment, payments for each item manufactured by the second source, an agreement to exchange data and patent rights on improvements made to the article or service, capital stock transactions, or any combination of these. The primary source's bases for computing such consideration may include actual costs; charges for the use of patents, data, or know-how reflecting the primary source's investment in developing and engineering and production techniques; and the primary source's “price” for setting up a second source. Such agreements often refer to the compensation to be paid as a royalty or license fee whether or not patent rights are involved.
It is Government policy not to pay in connection with its contracts, and not to allow to be paid in connection with contracts made with funds derived through the Military Assistance Program or otherwise through the United States Government, charges for use of patents in which it holds a royalty-free license or charges for data which it has a right to use and disclose to others, or which is in the public domain, or which the Government has acquired without restriction upon its use and disclosure to others. This policy shall be applied by the Departments in negotiating contract prices for foreign license technical assistance contracts (227.675) or supply contracts with second sources (227.674); and in commenting on such agreements when they are referred to the Department of Defense by the Department of State pursuant to section 414 of the Mutual Security Act of 1954 as amended (22 U.S.C. 1934) and the International Traffic in Arms Regulations (see 227.675).
(a) Contracts between the Government and a primary source to provide technical assistance or patent rights to a second source for the manufacture of supplies or performance of services shall, to the extent practicable, specify the rights in patents and data and any other rights to be supplied to the second source. Each contract shall provide, in connection with any separate agreement between the primary source and the second source for patent rights or technical assistance relating to the articles or services involved in the contract, that—
(1) The primary source and his subcontractors shall not make, on account of any purchases by the Government or by others with funds derived through the Military Assistance Program or otherwise through the Government, any charge to the second source for royalties or amortization for patents or inventions in which the Government
(2) The separate agreement between the primary and second source shall include a statement referring to the contract between the Government and the primary source, and shall conform to the requirements of the International Traffic in Arms Regulations (see 227.675-1).
(b) The following factors, among others, shall be considered in negotiating the price to be paid the primary source under contracts within (a) of this section:
(1) The actual cost of providing data, personnel, manufacturing aids, samples, spare parts, and the like;
(2) The extent to which the Government has contributed to the development of the supplies or services, and to the methods of manufacture or performance, through past contracts for research and development or for manufacture of the supplies or performance of the services; and
(3) The Government's patent rights and rights in data relating to the supplies or services and to the methods of manufacture or of performance.
In negotiating contract prices with a second source, including the redetermination of contract prices, or in determining the allowability of costs under a cost-reimbursement contract with a second source, the contracting officer:
(a) Shall obtain from the second source a detailed statement (see FAR 27.204-1(a)(2)) of royalties, license fees, and other compensation paid or to be paid to a primary source (or any of his subcontractors) for patent rights, rights in data, and other technical assistance provided to the second source, including identification and description of such patents, data, and technical assistance; and
(b) Shall not accept or allow charges which in effect are—
(1) For royalties or amortization for patents or inventions in which the Government holds a royalty-free license; or
(2) For data which the Government has a right to possess, use, and disclose to others; or
(3) For any technical assistance provided to the second source for which the Government has paid under a contract between the Government and a primary source.
Pursuant to section 414 of the Mutual Security Act of 1954, as amended (22 U.S.C. 1934), the Department of State controls the exportation of data relating to articles designated in the United States Munitions List as arms, ammunition, or munitions of war. (The Munitions List and pertinent procedures are set forth in the International Traffic in Arms Regulations, 22 CFR,
(a) In reviewing foreign license and technical assistance agreements between primary and second sources, the Department concerned shall, insofar as its interests are involved, indicate whether the agreement meets the requirements of §§ 124.07-124.10 of the International Traffic in Arms Regulations or in what respects it is deficient. Paragraphs (b) through (g) of this subsection provide general guidance.
(b) When it is reasonably anticipated that the Government will purchase from the second source the supplies or services involved in the agreement, or that Military Assistance Program
(1) If the agreement specifies a reduction in charges thereunder, with respect to purchases by or for the Government or by others with funds derived through the Military Assistance Program or otherwise through the Government, in recognition of the Government's rights in patents and data, the Department concerned shall evaluate the amount of the reduction to determine whether it is fair and reasonable in the circumstances, before indicating its approval.
(2) If the agreement does not specify any reduction in charges or otherwise fails to give recognition to the Government's rights in the patents or data involved, approval shall be conditioned upon amendment of the agreement to reflect a reduction, evaluated by the Department concerned as acceptable to the Government, in any charge thereunder with respect to purchases made by or for the Government or by others with funds derived through the Military Assistance Program or otherwise through the Government, in accordance with § 124.10 of the International Traffic in Arms Regulations.
(3) If the agreement provides that no charge is to be made to the second source for data or patent rights to the extent of the Government's rights, the Department concerned shall evaluate the acceptability of the provision before indicating its approval.
(4) If time or circumstances do not permit the evaluation called for in (b) (1), (2), or (3) of this subsection, the guidance in (c) of this subsection shall be followed.
(c) When it is not reasonably anticipated that the Government will purchase from the second source the supplies or services involved in the agreement nor that Military Assistance Program funds will be provided for the purchase of the supplies or services, then the following guidance applies.
(1) If the agreement provides for charges to the second source for data or patent rights, it may suffice to fulfill the requirements of § 124.10 insofar as the Department of Defense is concerned if:
(i) The agreement requires the second source to advise the primary source when he has knowledge of any purchase made or to be made from him by or for the Government or by others with funds derived through the Military Assistance Program or otherwise through the Government;
(ii) The primary source separately agrees with the Government that upon such advice to him from the second source or from the Government or otherwise as to any such a purchase or prospective purchase, he will negotiate with the Department concerned an appropriate reduction in his charges to the second source in recognition of any Government rights in patents or data; and
(iii) The agreement between the primary and second sources further provides that in the event of any such purchase and resulting reduction in charges, the second source shall pass on this reduction to the Government by giving the Government a corresponding reduction in the purchase price of the article or service.
(2) If the agreement provides that no charge is to be made to the second source for data or patent rights to the extent to which the Government has rights, the Department concerned shall:
(i) Evaluate the acceptability of the provision before indicating its approval; or
(ii) Explicitly condition its approval on the right to evaluate the acceptability of the provision at a later time.
(d) When there is a technical assistance agreement between the primary source and the Government related to the agreement between the primary and second sources that is under review, the latter agreement shall reflect the arrangements contemplated with respect thereto by the Government's technical assistance agreement with the primary source.
(e) Every agreement shall provide that any license rights transferred under the agreement are subject to existing rights of the Government.
(f) In connection with every agreement referred to in (b) of this section, a request shall be made to the primary source—
(1) To identify the patents, data, and other technical assistance to be provided to the second source by the primary source or any of his subcontractors,
(2) To identify any such patents and data in which, to the knowledge of the primary source, the Government may have rights, and
(3) To segregate the charges made to the second source for each such category or item of patents, data, and other technical assistance.
(g) The Department concerned shall make it clear that its approval of any agreement does not necessarily recognize the propriety of the charges or the amounts thereof, or constitute approval of any of the business arrangements in the agreement, unless the Department expressly intends by its approval to commit itself to the fairness and reasonableness of a particular charge or charges. In any event, a disclaimer should be made to charges or business terms not affecting any purchase made by or for the Government or by others with funds derived through the Military Assistance Program or otherwise through the Government.
(a) Patent interchange agreements between the United States and foreign governments provide for the use of patent rights, compensation, free licenses, and the establishment of committees to review and make recommendations on these matters. The agreements also may exempt the United States from royalty and other payments. The contracting officer shall ensure that royalty payments are consistent with patent interchange agreements.
(b) Assistance with patent rights and royalty payments in the United States European Command (USEUCOM) area of responsibility is available from HQ USEUCOM, ATTN: ECLA, Unit 30400, Box 1000, APO AE 09128; Telephone: DSN 430-8001/7263, Commercial 49-0711-680-8001/7263; Telefax: 49-0711-680-5732.
This subpart prescribes policy, procedures, and instructions for use of clauses with respect to processing licenses, assignments, and infringement claims.
Whenever a claim of infringement of privately owned rights in patented inventions or copyrighted works is asserted against any Department or Agency of the Department of Defense, all necessary steps shall be taken to investigate, and to settle administratively, deny, or otherwise dispose of such claim prior to suit against the United States. This subpart 227.70 does not apply to licenses or assignments acquired by the Department of Defense under the Patent Rights clauses.
Statutes pertaining to administrative claims of infringement in the Department of Defense include the following: the Foreign Assistance Act of 1961, 22 U.S.C. 2356 (formerly the Mutual Security Acts of 1951 and 1954); the Invention Secrecy Act, 35 U.S.C. 181-188; 10 U.S.C. 2386; 28 U.S.C. 1498; and 35 U.S.C. 286.
The procedures set forth herein will be followed, where applicable, in copyright infringement claims.
(a) A patent infringement claim for compensation, asserted against the United States under any of the applicable statutes cited in 227.7002, must be actually communicated to and received by a Department, agency, organization,
(1) An allegation of infringement;
(2) A request for compensation, either expressed or implied;
(3) A citation of the patent or patents alleged to be infringed;
(4) A sufficient designation of the alleged infringing item or process to permit identification, giving the military or commercial designation, if known, to the claimant;
(5) A designation of at least one claim of each patent alleged to be infringed; or
(6) As an alternative to (a) (4) and (5) of this section, a declaration that the claimant has made a bona fide attempt to determine the item or process which is alleged to infringe, but was unable to do so, giving reasons, and stating a reasonable basis for his belief that his patent or patents are being infringed.
(b) In addition to the information listed in (a) of this section, the following material and information is generally necessary in the course of processing a claim of patent infringement. Claimants are encouraged to furnish this information at the time of filing a claim to permit the most expeditious processing and settlement of the claim.
(1) A copy of the asserted patent(s) and identification of all claims of the patent alleged to be infringed.
(2) Identification of all procurements known to claimant which involve the alleged infringing item or process, including the identity of the vendor or contractor and the Government procuring activity.
(3) A detailed identification of the accused article or process, particularly where the article or process relates to a component or subcomponent of the item procured, an element by element comparison of the representative claims with the accused article or process. If available, this identification should include documentation and drawings to illustrate the accused article or process in suitable detail to enable verification of the infringement comparison.
(4) Names and addresses of all past and present licenses under the patent(s), and copies of all license agreements and releases involving the patent(s).
(5) A brief description of all litigation in which the patent(s) has been or is now involved, and the present status thereof.
(6) A list of all persons to whom notices of infringement have been sent, including all departments and agencies of the Government, and a statement of the ultimate disposition of each.
(7) A description of Government employment or military service, if any, by the inventor and/or patent owner.
(8) A list of all Government contracts under which the inventor, patent owner, or anyone in privity with him performed work relating to the patented subject matter.
(9) Evidence of title to the patent(s) alleged to be infringed or other right to make the claim.
(10) A copy of the Patent Office file of each patent if available to claimant.
(11) Pertinent prior art known to claimant, not contained in the Patent Office file, particularly publications and foreign art.
(c) Any Department receiving an allegation of patent infringement which meets the requirements of this paragraph shall acknowledge the same and supply the other Departments which may have an interest therein with a copy of such communication and the acknowledgement thereof.
(1) For the Department of the Army—Chief, Patents, Copyrights, and Trademarks Division, U.S. Army Legal Services Agency;
(2) For the Department of the Navy—The Patent Counsel for Navy, Office of Naval Research;
(3) For the Department of the Air Force—Chief, Patents Division, Office of The Judge Advocate General;
(4) For the Defense Logistics Agency—The Office of Counsel; for the National Security Agency, the General Counsel;
(5) For the Defense Information Systems Agency—the Counsel;
(6) For the Defense Threat Reduction Agency—The General Counsel; and
(7) For the National Imagery and Mapping Agency—The Counsel.
(d) If a communication alleging patent infringement is received which does not meet the requirements set forth in paragraph (c) of this section, the sender shall be advised in writing—
(1) That his claim for infringement has not been satisfactorily presented, and
(2) Of the elements considered necessary to establish a claim.
(e) A communication making a proffer of a license in which no infringement is alleged shall not be considered as a claim for infringement.
(a) A communication by a patent owner to a Department of Defense contractor alleging that the contractor has committed acts of infringement in performance of a Government contract shall not be considered a claim within the meaning of 227.7004 until it meets the requirements specified therein.
(b) Any Department receiving an allegation of patent infringement which meets the requirements of 227.7004 shall acknowledge the same and supply the other Departments (see 227.7004(c)) which may have an interest therein with a copy of such communication and the acknowledgement thereof.
(c) If a communication covering an infringement claim or notice which does not meet the requirements of 227.7004(a) is received from a contractor, the patent owner shall be advised in writing as covered by the instructions of 227.7004(d).
An investigation and administrative determination (denial or settlement) of each claim shall be made in accordance with instructions and procedures established by each Department, subject to the following:
(a) When the procurement responsibility for the alleged infringing item or process is assigned to a single Department or only one Department is the purchaser of the alleged infringing item or process, and the funds of that Department only are to be charged in the settlement of the claim, that Department shall have the sole responsibility for the investigation and administrative determination of the claim and for the execution of any agreement in settlement of the claim. Where, however, funds of another Department are to be charged, in whole or in part, the approval of such Department shall be obtained as required by 208.7002. Any agreement in settlement of the claim, approved pursuant to 208.7002 shall be executed by each of the Departments concerned.
(b) When two or more Departments are the respective purchasers of alleged infringing items or processes and the funds of those Departments are to be charged in the settlement of the claim, the investigation and administrative determination shall be the responsibility of the Department having the predominant financial interest in the claim or of the Department or Departments as jointly agreed upon by the Departments concerned. The Department responsible for negotiation shall, throughout the negotiation, coordinate with the other Departments concerned and keep them advised of the status of the negotiation. Any agreement in the settlement of the claim shall be executed by each Department concerned.
When a claim is denied, the Department responsible for the administrative determination of the claim shall so notify the claimant or his authorized representative and provide the claimant a reasonable rationale of the basis for denying the claim. Disclosure of information or the rationale referred to above shall be subject to applicable statutes, regulations, and directives pertaining to security, access to official records, and the rights of others.
Settlement of claims involving payment for past infringement shall not be made without the consent of, and equitable contribution by, each indemnifying contractor involved, unless such settlement is determined to be in the best interests of the Government and is coordinated with the Department of Justice with a view to preserving any rights of the Government against the contractors involved. If consent of and equitable contribution by the contractors are obtained, the settlement need not be coordinated with the Department of Justice.
This section contains clauses for use in patent release and settlement agreements, license agreements, and assignments, executed by the Government, under which the Government acquires rights. Minor modifications of language (e.g., pluralization of “Secretary” or “Contracting Officer”) in multi-departmental agreements may be made if necessary.
(a) Covenant Against Contingent Fees. Insert the clause at FAR 52.203-5.
(b) Gratuities. Insert the clause at FAR 52.203-3.
(c) Assignment of Claims. Insert the clause at FAR 52.232-23.
(d) Disputes. Pursuant to FAR 33.014, insert the clause at FAR 52.233-1.
(e) Non-Estoppel. Insert the clause at 252.227-7000.
(a)
(b)
(c)
The following clauses are examples for use in patent release and settlement agreements, and license agreements not providing for payment by the Government of a running royalty.
(a) License Grant. Insert the clause at 252.227-7004.
(b) License Term. Insert one of the clauses at 252.227-7005 Alternate I or Alternate II, as appropriate.
The clauses set forth below are examples which may be used in patent release and settlement agreements, and license agreements, when it is desired to cover the subject matter thereof and the contract provides for payment of a running royalty.
(a)
(b)
(c)
(d)
(2) Where more than one Department or Government Agency is licensed and there is a ceiling on the royalties payable in any reporting period, the licensing Departments or Agencies shall coordinate with respect to the pro rata share of royalties to be paid by each.
(e)
(a) The clause at 252.227-7011 is an example which may be used in contracts of assignment of patent rights to the Government.
(b) To facilitate proof of contracts of assignments, the acknowledgement of the contractor should be executed before a notary public or other officer authorized to administer oaths (35 U.S.C. 261).
Even though no infringement has occurred or been alleged, it is the policy of the Department of Defense to procure rights under patents, patent applications, and copyrights whenever it is in the Government's interest to do so and the desired rights can be obtained at a fair price. The required and suggested clauses at 252.227-7004 and 252.227-7010 shall be required and suggested clauses, respectively, for license agreements and assignments made under this paragraph. The instructions at 227.7009-3 and 227.7010 concerning the applicability and use of those clauses shall be followed insofar as they are pertinent.
The format at 252.227-7012 appropriately modified where necessary, may be used for contracts of release, license, or assignment.
Executive Order No. 9424 of 18 February 1944 requires all executive Departments and agencies of the Government to forward through appropriate channels to the Commissioner of Patents and Trademarks, for recording, all Government interests in patents or applications for patents.
This subpart—
(a) Prescribes policies and procedures for the acquisition of technical data and the rights to use, modify, reproduce, release, perform, display, or disclose technical data. It implements requirements in the following laws and Executive Order:
(1) 10 U.S.C. 2302(4).
(2) 10 U.S.C. 2305 (subsection (d)(4)).
(3) 10 U.S.C. 2320.
(4) 10 U.S.C. 2321.
(5) 10 U.S.C. 2325.
(6) Pub. L. 103-355.
(7) Executive Order 12591 (Subsection 1(b)(6)).
(b) Does not apply to computer software or technical data that is computer software documentation (see subpart 227.72).
(a) As used in this subpart, unless otherwise specifically indicated, the terms “offeror” and “contractor” include an offeror's or contractor's subcontractors, suppliers, or potential subcontractors or suppliers at any tier.
(b) Other terms used in this subpart are defined in the clause at 252.227-7013, Rights in Technical Data—Noncommercial Items.
Section 2320(b)(1) of Title 10 U.S.C. establishes a presumption that commercial items are developed at private expense whether or not a contractor submits a justification in response to a challenge notice. Therefore, do not challenge a contractor's assertion that a commercial item, component, or process was developed at private expense unless the Government can demonstrate that it contributed to development of the item, component or process. Follow the procedures in 227.7103-13 and the clause at 252.227-7037, Validation of Restrictive Markings on Technical Data, when information provided by the Department of Defense demonstrates that an item, component, or process was not developed exclusively at private expense. However, when a challenge is warranted, a contractor's or subcontractor's failure to respond to the challenge notice cannot be the sole basis for issuing a final decision denying the validity of an asserted restriction.
(a) DoD shall acquire only the technical data customarily provided to the public with a commercial item or process, except technical data that—
(1) Are form, fit, or function data;
(2) Are required for repair or maintenance of commercial items or processes, or for the proper installation, operating, or handling of a commercial item, either as a stand alone unit or as a part of a military system, when such data are not customarily provided to commercial users or the data provided to commercial users is not sufficient for military purposes; or
(3) Describe the modifications made at Government expense to a commercial item or process in order to meet the requirements of a Government solicitation.
(b) To encourage offerors and contractors to offer or use commercial products to satisfy military requirements, offerors, and contractors shall not be required, except for the technical data described in paragraph (a) of this subsection, to—
(1) Furnish technical information related to commercial items or processes that is not customarily provided to the public; or
(2) Relinquish to, or otherwise provide, the Government rights to use, modify, reproduce, release, perform, display, or disclose technical data pertaining to commercial items or processes except for a transfer of rights mutually agreed upon.
(a) The clause at 252.227-7015, Technical Data—Commercial Items, provides the Government specific license rights in technical data pertaining to commercial items or processes. DoD may use, modify, reproduce, release, perform, display, or disclose data only within the Government. The data may not be used to manufacture additional quantities of the commercial items and, except for emergency repair or overhaul, may not be released or disclosed to, or used by, third parties without the contractor's written permission. Those restrictions do not apply to the technical data described in 227.7102-1(a).
(b) If additional rights are needed, contracting activities must negotiate with the contractor to determine if there are acceptable terms for transferring such rights. The specific additional rights granted to the Government shall be enumerated in a license agreement made part of the contract.
(a) Except as provided in paragraph (b) of this subsection, use the clause at 252.227-7015, Technical Data—Commercial Items, in all solicitations and contracts when the contractor will be required to deliver technical data pertaining to commercial items, components, or processes. Do not require the contractor to include this clause in its subcontracts.
(b) Use the clause at 252.227-7013, Rights in Technical Data—Noncommercial Items, in lieu of the clause at 252.227-7015 if the Government will pay any portion of the development costs. Do not require the contractor to include this clause in its subcontracts for commercial items or commercial components.
(c) Use the clause at 252.227-7037, Validation of Restrictive Markings on
(a) DoD policy is to acquire only the technical data, and the rights in that data, necessary to satisfy agency needs.
(b) Solicitations and contracts shall—
(1) Specify the technical data to be delivered under a contract and delivery schedules for the data;
(2) Establish or reference procedures for determining the acceptability of technical data;
(3) Establish separate contract line items, to the extent practicable, for the technical data to be delivered under a contract and require offerors and contractors to price separately each deliverable data item; and
(4) Require offerors to identify, to the extent practicable, technical data to be furnished with restrictions on the Government's rights and require contractors to identify technical data to be delivered with such restrictions prior to delivery.
(c) Offerors shall not be required, either as a condition of being responsive to a solicitation or as a condition for award, to sell or otherwise relinquish to the Government any rights in technical data related to items, components or processes developed at private expense except for the data identified at 227.7103-5(a)(2) and (a)(4) through (9).
(d) Offerors and contractors shall not be prohibited or discouraged from furnishing or offering to furnish items, components, or processes developed at private expense solely because the Government's rights to use, modify, release, reproduce, perform, display, or disclose technical data pertaining to those items may be restricted.
(e) As provided in 10 U.S.C. 2305, solicitations for major systems development contracts shall not require offerors to submit proposals that would permit the Government to acquire competitively items identical to items developed at private expense unless a determination is made at a level above the contracting officer that—
(1) The offeror will not be able to satisfy program schedule or delivery requirements; or
(2) The offeror's proposal to meet mobilization requirements does not satisfy mobilization needs.
(a) Contracting officers shall work closely with data managers and requirements personnel to assure that data requirements included in solicitations are consistent with the policy expressed in 227.7103-1.
(b)(1) Data managers or other requirements personnel are responsible for identifying the Government's minimum needs for technical data. Data needs must be established giving consideration to the contractor's economic interests in data pertaining to items, components, or processes that have been developed at private expense; the Government's costs to acquire, maintain, store, retrieve, and protect the data; reprocurement needs; repair, maintenance and overhaul philosophies; spare and repair part considerations; and whether procurement of the items, components, or processes can be accomplished on a form, fit, or function basis. When it is anticipated that the Government will obtain unlimited or government purpose rights in technical data that will be required for competitive spare or repair parts procurements, such data should be identified as deliverable data items. Reprocurement needs may not be a sufficient reason to acquire detailed manufacturing or process data when items or components can be acquired using performance specifications, form, fit and function data, or when there are a sufficient number of alternate sources which can reasonably be expected to provide such items on a performance specification or form, fit, or function basis.
(2) When reviewing offers received in response to a solicitation or other request for data, data managers must balance the original assessment of the Government's data needs with data prices contained in the offer.
(c) Contracting officers are responsible for ensuring that, wherever practicable, solicitations and contracts—
(1) Identify the type and quantity of the technical data to be delivered under the contract and the format and media in which the data will be delivered;
(2) Establish each deliverable data item as a separate contract line item (this requirement may be satisfied by listing each deliverable data item on an exhibit to the contract);
(3) Identify the prices established for each deliverable data item under a fixed-price type contract;
(4) Include delivery schedules and acceptance criteria for each deliverable data item; and
(5) Specifically identify the place of delivery for each deliverable item of technical data.
(a) 10 U.S.C. 2320 requires, to the maximum extent practicable, an identification prior to delivery of any technical data to be delivered to the Government with restrictions on use.
(b) Use the provision at 252.227-7017, Identification and Assertion of Use, Release, or Disclosure Restrictions, in all solicitations that include the clause at 252.227-7013, Rights in Technical Data—Noncommercial Items. The provision requires offerors to identify any technical data for which restrictions, other than copyright, on use, release, or disclosure are asserted and to attach the identification and assertions to the offer.
(c) Subsequent to contract award, the clause at 252.277-7013 permits a contractor, under certain conditions, to make additional assertions of use, release, or disclosure restrictions. The prescription for the use of that clause and its alternate is at 227.7103-6 (a) and (b).
(a)
(1)
(2)
(b)
The standard license rights that a licensor grants to the Government are unlimited rights, government purpose rights, or limited rights. Those rights are defined in the clause at 252.227-7013, Rights in Technical Data—Noncommercial Items. In unusual situations, the standards rights may not satisfy the Government's needs or the Government may be willing to accept lesser rights in data in return for other consideration. In those cases, a special license may be negotiated. However, the licensor is not obligated to provide the Government greater rights and the contracting officer is not required to accept lesser rights than the rights provided in the standard grant of license. The situations under which a particular grant of license applies are enumerated in paragraphs (a) through (d) of this subsection.
(a)
(1) Data pertaining to an item, component, or process which has been or will be developed exclusively with Government funds;
(2) Studies, analyses, test data, or similar data produced in the performance of a contract when the study, analysis, test, or similar work was specified as an element of performance;
(3) Created exclusively with Government funds in the performance of a contract that does not require the development, manufacture, construction, or production of items, components, or processes;
(4) Form, fit, and function data;
(5) Necessary for installation, operation, maintenance, or training purposes (other than detailed manufacturing or process data);
(6) Corrections or changes to technical data furnished to the contractor by the Government;
(7) Publicly available or have been released or disclosed by the contractor or subcontractor without restrictions on further use, release or disclosure other than a release or disclosure resulting from the sale, transfer, or other assignment of interest in the software to another party or the sale or transfer of some or all of a business entity or its assets to another party;
(8) Data in which the Government has obtained unlimited rights under another Government contract or as a result of negotiations; or
(9) Data furnished to the Government, under a Government contract or subcontract thereunder, with—
(i) Government purpose license rights or limited rights and the restrictive condition(s) has/have expired; or
(ii) Government purpose rights and the contractor's exclusive right to use such data for commercial purposes has expired.
(b)
(i) That pertain to items, components, or processes developed with mixed funding except when the Government is entitled to unlimited rights as provided in paragraphs (a)(2) and (a)(4) through (9) of this subsection; or
(ii) Created with mixed funding in the performance of a contract that does not require the development, manufacture, construction, or production of items, components, or processes.
(2) The period during which government purpose rights are effective is negotiable. The clause at 252.227-7013 provides a nominal five-year period. Either party may request a different period. Changes to the government purpose rights period may be made at any time prior to delivery of the technical data without consideration from either party. Longer periods should be negotiated when a five-year period does not provide sufficient time to apply the data for commercial purposes or when necessary to recognize subcontractors’ interests in the data.
(3) The government purpose rights period commences upon execution of the contract, subcontract, letter contract (or similar contractual instrument), contract modification, or option exercise that required the development. Upon expiration of the Government rights period, the Government has unlimited rights in the data including the right to authorize others to use the data for commercial purposes.
(4) During the government purpose rights period, the government may not use, or authorize other persons to use, technical data marked with government purpose rights legends for commercial purposes. The Government shall not release or disclose data in which it has government purpose rights to any person, or authorize others to do so, unless—
(i) Prior to release or disclosure, the intended recipient is subject to the use and non-disclosure agreement at 227.7103-7; or
(ii) The intended recipient is a Government contractor receiving access to the data for performance of a Government contract that contains the clause at 252.227-7025, Limitations on the Use or Disclosure of Government-Furnished Information Marked with Restrictive Legends.
(5) When technical data marked with government purpose rights legends will be released or disclosed to a Government contractor performing a contract that does not include the clause at 252-227-7025, the contract may be modified, prior to release or disclosure, to include that clause in lieu of requiring the contractor to complete a use and non-disclosure agreement.
(6) Contracting activities shall establish procedures to assure that technical data marked with government purpose rights legends are released or disclosed, including a release or disclosure through a Government solicitation, only to persons subject to the use and non-disclosure restrictions. Public announcements in the Commerce Business Daily or other publications must provide notice of the use and non-disclosure requirements. Class use and non-disclosure agreements (e.g., agreements covering all solicitations received by the XYZ company within a reasonable period) are authorized and may be obtained at any time prior to release or disclosure of the government purpose rights data. Documents transmitting government purpose rights data to persons under class agreements shall identify the technical data subject to government purpose rights and the class agreement under which such data are provided.
(c)
(i) That pertain to items, components, or processes developed exclusively at private expense except when the Government is entitled to unlimited rights as provided in paragraphs (a)(2) and (a)(4) through (9) of this subsection; or
(ii) Created exclusively at private expense in the performance of a contract that does not require the development, manufacture, construction, or production of items, components, or processes.
(2) Data in which the Government has limited rights may not be used, released, or disclosed outside the Government without the permission of the contractor asserting the restriction except for a use, release or disclosure that is—
(i) Necessary for emergency repair and overhaul; or
(ii) To a foreign government, other than detailed manufacturing or process data, when use, release, or disclosure is in the interest of the United States and is required for evaluation or informational purposes.
(3) The person asserting limited rights must be notified of the Government's intent to release, disclose, or authorize others to use such data prior to release or disclosure of the data except notification of an intended release, disclosure, or use for emergency repair or overhaul which shall be made as soon as practicable.
(4) When the person asserting limited rights permits the Government to release, disclose, or have others use the data subject to restrictions on further use, release, or disclosure, or for a release under paragraph (c)(2)(i) or (ii) of this subsection, the intended recipient
(d)
(2) When the Government needs additional rights in data acquired with government purpose or limited rights, the contracting officer must negotiate with the contractor to determine whether there are acceptable terms for transferring such rights. Generally, such negotiations should be conducted only when there is a need to disclose the data outside the Government or if the additional rights are required for competitive reprocurement and the anticipated savings expected to be obtained through competition are estimated to exceed the acquisition cost of the additional rights. Prior to negotiating for additional rights in limited rights data, consider alternatives such as—
(i) Using performance specifications and form, fit, and function data to acquire or develop functionally equivalent items, components, or processes;
(ii) Obtaining a contractor's contractual commitment to qualify additional sources and maintain adequate competition among the sources; or
(iii) Reverse engineering, or providing items from Government inventories to contractors who request the items to facilitate the development of equivalent items through reverse engineering.
(a) Use the clause at 252.227-7013, Rights in Technical Data—Noncommercial Items, in solicitations and contracts when the successful offeror(s) will be required to deliver technical data to the Government. Do not use the clause when the only deliverable items are computer software or computer software documentation (see 227.72), commercial items (see 227.7102-3), existing works (see 227.7105), special works (see 227.7106), or when contracting under the Small Business Innovation Research Program (see 227.7104). Except as provided in 227.7107-2, do not use the clause in architect-engineer and construction contracts.
(b) Use the clause at 252.227-7013 with its Alternate I in research contracts when the contracting officer determines, in consultation with counsel, that public dissemination by the contractor would be—
(1) In the interest of the government; and
(2) Facilitated by the Government relinquishing its right to publish the work for sale, or to have others publish the work for sale on behalf of the Government.
(c) Use the clause at 252.227-7025, Limitations on the Use or Disclosure of Government Furnished Information Marked with Restrictive Legends, in solicitations and contracts when it is anticipated that the Government will provide the contractor, for performance of its contract, technical data marked with another contractor's restrictive legend(s).
(d) Use the provision at 252.227-7028, Technical Data or Computer Software Previously Delivered to the Government, in solicitations when the resulting contract will require the contractor to deliver technical data. The provision requires offerors to identify any technical data specified in the solicitations as deliverable data items that are the same or substantially the same as data items the offeror has delivered or is obligated to deliver, either as a contractor or subcontractor, under any other federal agency contract.
(e) Use the following clauses in solicitations and contracts that include the clause at 252.227-7013:
(1) 252.227-7016, Rights in Bid or Proposal Information;
(2) 252.227-7030, Technical Data—Withholding of Payment;
(3) 252.227-7036, Declaration of Technical Data Conformity; and
(4) 252.227-7037, Validation of Restrictive Markings on Technical Data (paragraph (e) of the clause contains information that must be included in a challenge).
(a) Except as provided in paragraph (b) of this subsection, technical data or computer software delivered to the Government with restrictions on use, modification, reproduction, release, performance, display, or disclosure may not be provided to third parties unless the intended recipient completes and signs the use and non-disclosure agreement at paragraph (c) of this subsection prior to release, or disclosure of the data.
(1) The specific conditions under which an intended recipient will be authorized to use, modify, reproduce, release, perform, display, or disclose technical data subject to limited rights or computer software subject to restricted rights must be stipulated in an attachment to the use and non-disclosure agreement.
(2) For an intended release, disclosure, or authorized use of technical data or computer software subject to special license rights, modify paragraph (1)(d) of the use and non-disclosure agreement to enter the conditions, consistent with the license requirements, governing the recipient's obligations regarding use, modification, reproduction, release, performance, display or disclosure of the data or software.
(b) The requirement for use and non-disclosure agreements does not apply to Government contractors which require access to a third party's data or software for the performance of a Government contract that contains the clause at 252.227-7025, Limitations on the Use or Disclosure of Government-Furnished Information Marked with Restrictive Legends.
(c) The prescribed use and non-disclosure agreement is:
The undersigned,
(1) The Recipient shall—
(a) Use, modify, reproduce, release, perform, display, or disclose Data marked with government purpose rights or SBIR data rights legends only for government purposes and shall not do so for any commercial purpose. The Recipient shall not release, perform, display, or disclose these Data, without the express written permission of the contractor whose name appears in the restrictive legend (the “Contractor”), to any person other than its subcontractors or suppliers, or prospective subcontractors or suppliers, who require these Data to submit offers for, or perform, contracts with the Recipient. The Recipient shall require its subcontractors or suppliers, or prospective subcontractors or suppliers, to sign a use and non-disclosure agreement prior to disclosing or releasing these Data to such persons. Such agreement must be consistent with the terms of this agreement.
(b) Use, modify, reproduce, release, perform, display, or disclose technical data marked with limited rights legends only as specified in the attachment to this Agreement. Release, performance, display, or disclosure to other persons is not authorized unless specified in the attachment to this Agreement or expressly permitted in writing by the Contractor. The Recipient shall promptly notify the Contractor of the execution of this Agreement and identify the Contractor's Data that has been or will be provided to the Recipient, the date and place the Data were or will be received, and the name and address of the Government office that has provided or will provide the Data.
(c) Use computer software marked with restricted rights legends only in performance of Contract Number
(d) Use, modify, reproduce, release, perform, display, or disclose Data marked with special license rights legends (To be completed by the contracting officer. See 227.7103-7(a)(2). Omit if none of the Data requested is marked with special license rights legends).
(2) The Recipient agrees to adopt or establish operating procedures and physical security measures designed to protect these Data from inadvertent release or disclosure to unauthorized third parties.
(3) The Recipient agrees to accept these Data “as is” without any Government representation as to suitability for intended use or warranty whatsoever. This disclaimer does not affect any obligation the Government may have regarding Data specified in a contract for the performance of that contract.
(4) The Recipient may enter into any agreement directly with the Contractor with respect to the use, modification, reproduction, release, performance, display, or disclosure of these Data.
(5) The Recipient agrees to indemnify and hold harmless the Government, its agents, and employees from every claim or liability, including attorneys fees, court costs, and expenses arising out of, or in any way related to, the misuse or unauthorized modification, reproduction, release, performance, display, or disclosure of Data received from the Government with restrictive legends by the Recipient or any person to whom the Recipient has released or disclosed the Data.
(6) The Recipient is executing this Agreement for the benefit of the Contractor. The Contractor is a third party beneficiary of this Agreement who, in addition to any other rights it may have, is intended to have the rights of direct action against the Recipient or any other person to whom the Recipient has released or disclosed the Data, to seek damages from any breach of this Agreement or to otherwise enforce this Agreement.
(7) The Recipient agrees to destroy these Data, and all copies of the Data in its possession, no later than 30 days after the date shown in paragraph (8) of this Agreement, to have all persons to whom it released the Data do so by that date, and to notify the Contractor that the Data have been destroyed.
(8) This Agreement shall be effective for the period commencing with the Recipient's execution of this Agreement and ending upon
(a)
(b)
(a)
(2) The clause at 252.227-7013 does not permit a contractor to incorporate a third party's copyrighted data into a deliverable data item unless the contractor has obtained an appropriate license for the Government and, when applicable, others acting on the Government's behalf, or has obtained the contracting officer's written approval to do so. Grant approval to use third party copyrighted data in which the Government will not receive a copyright license only when the Government's requirements cannot be satisfied without the third party material or when the use of the third party material will result in cost savings to the Government which outweigh the lack of a copyright license.
(b)
(a)
(2) The procedures for correcting minor informalities shall not be used to obtain information regarding asserted restrictions or an offeror's suggested asserted rights category. Questions regarding the justification for an asserted restriction or asserted rights category must be pursued in accordance with the procedures at 227.7103-13.
(3) The restrictions asserted by a successful offeror shall be attached to its contract unless, in accordance with the procedures at 227.7103-13, the parties have agreed that an asserted restriction is not justified. The contract attachment shall provide the same information regarding identification of the technical data, the asserted rights category, the basis for the assertion, and the name of the person asserting the restrictions as required by paragraph (d) of the solicitation provision at 252.227-7017. Subsequent to contract award, the clause at 252.227-7013, Rights in Technical Data—Noncommercial
(4) Neither the pre- or post-award assertions made by the contractor, nor the fact that certain assertions are identified in the attachment to the contract, determine the respective rights of the parties. As provided at 227.7103-13, the Government has the right to review, verify, challenge and validate restrictive markings.
(5) Information provided by offerors in response to the solicitation provision may be used in the source selection process to evaluate the impact on evaluation factors that may be created by restrictions on the Government's ability to use or disclose technical data. However, offerors shall not be prohibited from offering products for which the offeror is entitled to provide the Government limited rights in the technical data pertaining to such products and offerors shall not be required, either as a condition of being responsive to a solicitation or as a condition for award, to sell or otherwise relinquish any greater rights in technical data when the offeror is entitled to provide the technical data with limited rights.
(b)
(1) Requires a contractor that desires to restrict the Government's rights in technical data to place restrictive markings on the data, provides instructions for the placement of the restrictive markings, and authorizes the use of certain restrictive markings; and
(2) Requires a contractor to deliver, furnish, or otherwise provide to the Government any technical data in which the Government has previously obtained rights with the Government's pre-existing rights in that data unless the parties have agreed otherwise or restrictions on the Government's rights to use, modify, reproduce, release, perform, display, or disclose the data have expired. When restrictions are still applicable, the contractor is permitted to mark the data with the appropriate restrictive legend for which the data qualified.
(c)
(2) A contractor may request permission to have appropriate legends placed on unmarked technical data at its expense. The request must be received by the contracting officer within six months following the furnishing or delivery of such data, or any extension of that time approved by the contracting officer. The person making the request must:
(i) Identify the technical data that should have been marked;
(ii) Demonstrate that the omission of the marking was inadvertent, the proposed marking is justified and conforms with the requirements for the marking of technical data contained in the clause at 252.227-7013; and
(iii) Acknowledge, in writing, that the Government has no liability with respect to any disclosure, reproduction, or use of the technical data made prior to the addition of the marking or resulting from the omission of the marking.
(3) Contracting officers should grant permission to mark only if the technical data were not distributed outside the Government or were distributed outside the Government with restrictions on further use or disclosure.
(a) The clause at 252.227-7013, Rights in Technical Data—Noncommercial Items, requires a contractor, and its subcontractors or suppliers that will deliver technical data with other than unlimited rights, to establish and follow written procedures to assure that restrictive markings are used only when authorized and to maintain
(b) The clause at 252.227-7037, Validation of Restrictive Markings on Technical Data requires contractors and their subcontractors at any tier to maintain records sufficient to justify the validity of restrictive markings on technical data delivered or to be delivered under a Government contract.
(a)
(2) The correction of nonconforming markings on technical data is not subject to 252.227-7037, Validation of Restrictive Markings on Technical Data. To the extent practicable, the contracting officer should return technical data bearing nonconforming markings to the person who has placed the nonconforming markings on such data to provide that person an opportunity to correct or strike the nonconforming marking at that person's expense. If that person fails to correct the nonconformity and return the corrected data within 60 days following the person's receipt of the data, the contracting officer may correct or strike the nonconformity at that person's expense. When it is impracticable to return technical data for correction, contracting officers may unilaterally correct any nonconforming markings at Government expense. Prior to correction, the data may be used in accordance with the proper restrictive marking.
(b)
(2) Contracting officers have the right to review and challenge the validity of unjustified markings. However, at any time during performance of a contract and notwithstanding existence of a challenge, the contracting officer and the person who has asserted a restrictive marking may agree that the restrictive marking is not justified. Upon such agreement, the contracting officer may, at his or her election, either—
(i) Strike or correct the unjustified marking at that person's expense; or
(ii) Return the technical data to the person asserting the restriction for correction at that person's expense. If the data are returned and that person fails to correct or strike the unjustified restriction and return the corrected data to the contracting officer within 60 days following receipt of the data, the unjustified marking shall be corrected or stricken at that person's expense.
(a)
(b)
(c)
(1)
(i) Are publicly available without restrictions;
(ii) Have been provided to the United States without restriction; or
(iii) Have been otherwise made available without restriction other than a release or disclosure resulting from the sale, transfer, or other assignment of interest in the technical data to another party or the sale or transfer of some or all of a business entity or its assets to another party.
(2)
(ii) If the person asserting the restriction fails to respond to the contracting officer's request for information or additional supporting documentation, or if the information submitted or any other available information pertaining to the validity of a restrictive marking does not justify the asserted restriction, a challenge should be considered.
(3)
(i) A subcontractor's or supplier's business interests in its technical data would be compromised if the data were disclosed to a higher tier contractor;
(ii) There is reason to believe that the contractor will not respond in a timely manner to a challenge and an untimely response would jeopardize a subcontractor's or suppliers right to assert restrictions; or
(iii) Requested to do so by a subcontractor or supplier.
(4)
(5)
(6)
(i) A contracting officer's final decision that an assertion is not justified must be issued a soon as practicable following the failure of the person asserting the restriction to respond to
(ii) A contracting officer who, following a challenge and response by the person asserting the restriction, determines that an asserted restriction is justified, shall issue a final decision sustaining the validity of the asserted restriction. If the asserted restriction was made subsequent to submission of the contractor's offer, add the asserted restriction to the contract attachment.
(iii) A contracting officer who determine that the validity of an asserted restriction has not been justified shall issue a contracting officer's final decision within the time frames prescribed in 252.227-7037. As provided in paragraph (g) of that clause, the Government is obligated to continue to respect the asserted restrictions through final disposition of any appeal unless the agency head notifies the person asserting the restriction that urgent or compelling circumstances do not permit the Government to continue to respect the asserted restriction.
(7)
(8)
(a)
(1) Requires contractors to furnish written assurance, at the time technical data are delivered or are made available to the Government, that the technical data are complete, accurate, and satisfy the requirements of the contract concerning such data;
(2) Provides for the establishment of remedies applicable to technical data found to be incomplete, inadequate, or not to satisfy the requirements of the contract concerning such data; and
(3) Authorizes agency heads to withhold payments (or exercise such other remedies an agency head considers appropriate) during any period if the contractor does not meet the requirements of the contract pertaining to the delivery of technical data.
(b)
(2) The clause at 252.227-7030, Technical Data—Withholding of Payment, provides for withholding up to 10 percent of the contract price pending correction or replacement of the nonconforming technical data or negotiation of an equitable reduction in contract price. The amount subject to withholding may be expressed as a fixed dollar amount or as a percentage of the contract price. In either case, the amount shall be determined giving consideration to the relative value and importance of the data. For example—
(i) When the sole purpose of a contract is to produce the data, the relative value of that data may be considerably higher than the value of data produced under a contract where the production of the data is a secondary objective; or
(ii) When the Government will maintain or repair items, repair and maintenance data may have a considerably higher relative value than data that merely describe the item or provide performance characteristics.
(3) Do not accept technical data that do not conform to the contractual requirements in all respects. Except for nonconforming restrictive markings
(i) The provisions of a contract clause providing for inspection and acceptance of deliverables and remedies for nonconforming deliverables; or
(ii) The procedures at FAR 46.407(c) through (g), if the contract does not contain an inspection clause providing remedies for nonconforming deliverables.
(4) Follow the procedures at 227.7103-12(a)(2) if nonconforming markings are the sole reason technical data fail to conform to contractual requirements. The clause at 252.227-7030 may be used to withhold an amount for payment, consistent with the terms of the clause, pending correction of the nonconforming markings.
(c)
(2) As prescribed in 246.710, use the clause at 252.246-7001, Warranty of Data, and its alternates, or a substantially similar clause when the Government needs a specific warranty of technical data.
(a) 10 U.S.C. 2320 provides subcontractors at all tiers the same protection for their rights in data as is provided to prime contractors. The clauses at 252.227-7013, Rights in Technical Data—Noncommercial Items, and 252.227-7037, Validation of Restrictive Markings on Technical Data, implement the statutory requirements.
(b) 10 U.S.C. 2321 permits a subcontractor to transact directly with the Government matters relating to the validation of its asserted restrictions on the Government's rights to use or disclose technical data. The clause at 252.227-7037 obtains a contractor's agreement that the direct transaction of validation or challenge matters with subcontractors at any tier does not establish or imply privity of contract. When a subcontractor or supplier exercise its right to transact validation matters directly with the Government, contracting officers shall deal directly with such persons, as provided at 227.7103-13(c)(3).
(c) Require prime contractors whose contracts include the following clauses to include those clauses, without modification except for appropriate identification of the parties, in contracts with subcontractors or suppliers, at all tiers, who will be furnishing technical data for non-commercial items in response to a Government requirement:
(1) 252.227-7013, Rights in Technical Data—Noncommercial Items;
(2) 252.227-7025, Limitations on the Use or Disclosure of Government-Furnished Information Marked with Restrictive Legends;
(3) 252.227-7028, Technical Data or Computer Software Previously Delivered to the Government; and
(4) 252.227-7037, Validation of Restrictive Markings on Technical Data.
(d) Do not require contractors to have their subcontractors or suppliers at any tier relinquish rights in technical data to the contractor, a higher tier subcontractor, or to the Government, as a condition for award of any contract, subcontract, purchase order, or similar instrument except for the rights obtained by the Government under the Rights in Technical Data—Noncommercial Items clause contained in the contractor's contract with the Government.
Technical data may be released or disclosed to foreign governments, foreign contractors, or international organizations only if release or disclosure is otherwise permitted both by Federal export controls and other national security laws or regulations. Subject to such laws and regulations, the Department of Defense—
(a) May release or disclose technical data in which it has obtained unlimited rights to such foreign entities or authorize the use of such data by those entities; and
(b) Shall not release or disclose technical data for which restrictions on use, release, or disclosure have been asserted to foreign entities, or authorize the use of technical data by those entities, unless the intended recipient is subject to the same provisions as included in the use and non-disclosure agreement at 227.7103-7 and the requirements of the clause at 252.227-7103, Rights in Technical Data—Noncommercial Items, governing use, modification, reproduction, release, performance, display, or disclosure of such data have been satisfied.
(a) The clause at 252.227-7032, Rights in Technical Data and Computer Software (Foreign), may be used in contracts with foreign contractors to be performed overseas, except Canadian purchases (see paragraph (c) of this subsection), in lieu of the clause at 252.227-7013, Rights in Technical Data—Noncommercial Items, when the Government requires the unrestricted right to use, modify, reproduce, perform, display, release or disclose all technical data to be delivered under the contract. Do not use the clause in contracts for existing or special works.
(b) When the Government does not require unlimited rights, the clause at 252.227-7032 may be modified to accommodate the needs of a specific overseas procurement situation. The Government should obtain rights in the technical data that are not less than the rights the Government would have obtained under the data rights clause(s) prescribed in this part for a comparable procurement performed within the United States or its possessions.
(c) Contracts for Canadian purchases shall include the appropriate data rights clause prescribed in this part for a comparable procurement performed within the United States or its possessions.
(a) Use the clause at 252.227-7018, Rights in Noncommercial Technical Data and Computer Software—Small Business Innovation Research (SBIR) Program, when technical data or computer software will be generated during performance of contracts under the SBIR program.
(b) Under the clause at 252.227-7018, the Government obtains a royalty-free license to use technical data marked with an SBIR data rights legend only for government purposes during the period commencing with contract award and ending five years after completion of the project under which the data were generated. Upon expiration of the five-year restrictive license, the Government has unlimited rights in the SBIR data. During the license period, the Government may not release or disclose SBIR data to any person other than its support services contractors except—
(1) For evaluational purposes;
(2) As expressly permitted by the contractor; or
(3) A use, release, or disclosure that is necessary for emergency repair or overhaul of items operated by the Government.
(c) Do not make any release or disclosure permitted by paragraph (b) of this section unless, prior to release or disclosure, the intended recipient is subject to the use and nondisclosure agreement at 227.7103-7.
(d) Use the clause at 252.227-7018 with its Alternate I in research contracts when the contracting officer determines, in consultation with counsel, that public dissemination by the contractor would be—
(1) In the interest of the Government; and
(2) Facilitated by the Government relinquishing its right to publish the work for sale, or to have others publish the work for sale on behalf of the Government.
(e) Use the following provision and clauses in SBIR solicitations and contracts that include the clause at 252.227-7018:
(1) 252.227-7016, Rights in Bid or Proposal Information;
(2) 252.227-7017, Identification and Assertion of Use, Release, or Disclosure Restrictions;
(3) 252.227-7019, Validation of Asserted Restrictions—Computer Software;
(4) 252.227-7030, Technical Data—Withholding of Payment;
(5) 252.227-7036, Declaration of Technical Data Conformity; and
(6) 252.227-7037, Validation of Restrictive Markings on Technical Data (paragraph (e) of the clause contains information that must be included in a challenge).
(f) Use the following clauses and provision in SBIR solicitations and contracts in accordance with the guidance at 227.7103-6 (c) and (d):
(1) 252.227-7025, Limitations on the Use or Disclosure of Government-Furnished Information Marked with Restrictive Legends; and
(2) 252.227-7028, Technical Data or Computer Software Previously Delivered to the Government.
(a) Existing works include motion pictures, television recordings, video recordings, and other audiovisual works in any medium; sound recordings in any medium; musical, dramatic, and literary works; pantomimes and choreographic works; pictorial, graphic, and sculptural works; and works of a similar nature. Usually, these or similar works were not first created, developed, generated, originated, prepared, or produced under a Government contract. Therefore, the Government must obtain a license in the work if it intends to reproduce the work, distribute copies of the work, prepare derivative works, or perform or display the work publicly. When the Government is not responsible for the content of an existing work, it should require the copyright owner to indemnify the Government for liabilities that may arise out of the content, performance, use, or disclosure of such data.
(b) Follow the procedures at 227.7106 for works which will be first created, developed, generated, originated, prepared, or produced under a Government contract and the Government needs to control distribution of the work or has a specific need to obtain indemnity for liabilities that may arise out of the creation, content, performance, use, or disclosure of the work or from libelous or other unlawful material contained in the work. Follow the procedures at 227.7103 when the Government does not need to control distribution of such works or obtain such indemnities.
(a) Use the clause at 252.227-7021, Rights in Data—Existing Works, in lieu of the clause at 252.227-7013, Rights in Technical Data—Noncommercial Items, in solicitations and contracts exclusively for existing works when—
(1) The existing works will be acquired without modification; and
(2) The Government requires the right to reproduce, prepare derivative works, or publicly perform or display the existing works; or
(3) The Government has a specific need to obtain indemnity for liabilities that may arise out of the content, performance, use, or disclosure of such data.
(b) The clause at 252.227-7021 provides the Government, and others acting on its behalf, a paid-up, non-exclusive, irrevocable, world-wide license to reproduce, prepare derivative works and publicly perform or display the works called for by a contract and to authorize others to do so for government purposes.
(c) A contract clause is not required to acquire existing works such as books, magazines and periodicals, in any storage or retrieval medium, when the Government will not reproduce the
Use the clause at 252.227-7020, Rights in Special Works, in solicitations and contracts for modified existing works in lieu of the clause at 252.227-7021, Rights in Data—Existing Works.
(a) Use the clause at 252.227-7020, Rights in Special Works, in solicitations and contracts where the Government has a specific need to control the distribution of works first produced, created, or generated in the performance of a contract and required to be delivered under that contract, including controlling distribution by obtaining an assignment of copyright, or a specific need to obtain indemnity for liabilities that may arise out of the creation, delivery, use, modification, reproduction, release, performance, display, or disclosure of such works. Use the clause—
(1) In lieu of the clause at 252.227-7013, Rights in Technical Data—Noncommercial Items, when the Government must own or control copyright in all works first produced, created, or generated and required to be delivered under a contract; or
(2) In addition to the clause at 252.227-7013 when the Government must own or control copyright in a portion of a work first produced, created, or generated and required to be delivered under a contract. The specific portion in which the Government must own or control copyright must be identified in a special contract requirement.
(b) Although the Government obtains an assignment of copyright and unlimited rights in a special work under the clause at 252.227-7020, the contractor retains use and disclosure rights in that work. If the Government needs to restrict a contractor's rights to use or disclose a special work, it must also negotiate a special license which specifically restricts the contractor's use or disclosure rights.
(c) The clause at 252.227-7020 does not permit a contractor to incorporate into a special work any works copyrighted by others unless the contractor obtains the contracting officer's permission to do so and obtains for the Government a non-exclusive, paid up, world-wide license to make and distribute copies of that work, to prepare derivative works, to perform or display publicly any portion of the work, and to permit others to do so for government purposes. Grant permission only when the Government's requirements cannot be satisfied unless the third party work is included in the deliverable work.
(d) Examples of works which may be procured under the Rights in Special Works clause include, but are not limited, to audiovisual works, computer data bases, computer software documentation, scripts, soundtracks, musical compositions, and adaptations; histories of departments, agencies, services or units thereof; surveys of Government establishments; instructional works or guidance to Government officers and employees on the discharge of their official duties; reports, books, studies, surveys or similar documents; collections of data containing information pertaining to individuals that, if disclosed, would violate the right of privacy or publicity of the individuals to whom the information relates; or investigative reports.
This section sets forth policies and procedures, pertaining to data, copyrights, and restricted designs unique to the acquisition of construction and architect-engineer services.
(a) Except as provided in paragraph (b) of this subsection and in 227.7107-2, use the clause at 252.227-7022, Government Rights (Unlimited), in solicitations and contracts for architect-engineer services and for construction involving architect-engineer services.
(b) When the purpose of a contract for architect-engineer services, or for construction involving architect-engineer services, is to obtain a unique architectural design of a building, a monument, or construction of similar nature, which for artistic, aesthetic or other special reasons the Government
(c) The Government shall obtain unlimited rights in shop drawings for construction. In solicitations and contracts calling for delivery of shop drawings, include the clause at 252.227-7033, Rights in Shop Drawings.
Use the provisions and clauses required by 227-7103-6 and 227.7203-6 when the acquisition is limited to—
(a) Construction supplies or materials;
(b) Experimental, developmental, or research work, or test and evaluation studies of structures, equipment, processes, or materials for use in construction; or
(c) Both.
The clause at 252.227-7024, Notice and Approval of Restricted Designs, may be included in architect-engineer contracts to permit the Government to make informed decisions concerning noncompetitive aspects of the design.
(a) Contractor data repositories may be established when permitted by agency procedures. The contractual instrument establishing the data repository must require, as a minimum, the data repository management contractor to—
(1) Establish and maintain adequate procedures for protecting technical data delivered to or stored at the repository from unauthorized release or disclosure;
(2) Establish and maintain adequate procedures for controlling the release or disclosure of technical data from the repository to third parties consistent with the Government's rights in such data;
(3) When required by the contracting officer, deliver data to the Government on paper or in other specified media;
(4) Be responsible for maintaining the currency of data delivered directly by Government contractors or subcontractors to the repository;
(5) Obtain use and non-disclosure agreements (see 227.7103-7) from all persons to whom government purpose rights data is released or disclosed; and
(6) Indemnify the Government from any liability to data owners or licensors resulting from, or as a consequence of, a release or disclosure of technical data made by the data repository contractor or its officers, employees, agents, or representatives.
(b) If the contractor is or will be the data repository manager, the contractor's data management and distribution responsibilities must be identified in the contract or the contract must reference the agreement between the Government and the contractor that establishes those responsibilities.
(c) If the contractor is not and will not be the data repository manager, do not require a contractor or subcontractor to deliver technical data marked with limited rights legends to a data repository managed by another contractor unless the contractor or subcontractor who has asserted limited rights agrees to release the data to the repository or has authorized, in writing, the Government to do so.
(d) Repository procedures may provide for the acceptance, delivery, and subsequent distribution of technical data in storage media other than paper, including direct electronic exchange of data between two computers. The procedures must provide for the identification of any portions of the data provided with restrictive legends, when appropriate. The acceptance criteria must be consistent with the authorized delivery format.
This subpart—
(a) Prescribes policies and procedures for the acquisition of computer software and computer software documentation, and the rights to use, modify, reproduce, release, perform, display, or disclose such software or documentation. It implements requirements in the following laws and Executive Order:
(1) 10 U.S.C. 2302(4).
(2) 10 U.S.C. 2305 (subsection (d)(4)).
(3) 10 U.S.C. 2320.
(4) 10 U.S.C. 2321.
(5) 10 U.S.C. 2325.
(6) Executive Order 12591 (subsection 1(b)(6)).
(b) Does not apply to computer software or computer software documentation acquired under GSA schedule contracts.
(a) As used in this subpart, unless otherwise specifically indicated, the terms “offeror” and “contractor” include an offeror's or contractor's subcontractors, suppliers, or potential subcontractors or suppliers at any tier.
(b) Other terms used in this subpart are defined in the clause at 252.227-7014, Rights in Noncommercial Computer Software and Noncommercial Computer Software Documentation.
(a) Commercial computer software or commercial computer software documentation shall be acquired under the licenses customarily provided to the public unless such licenses are inconsistent with Federal procurement law or do not otherwise satisfy user needs.
(b) Commercial computer software and commercial computer software documentation shall be obtained competitively, to the maximum extent practicable, using firm-fixed-price contracts or firm-fixed-priced orders under available pricing schedules.
(c) Offerors and contractors shall not be required to—
(1) Furnish technical information related to commercial computer software or commercial computer software documentation that is not customarily provided to the public except for information documenting the specific modifications made at Government expense to such software or documentation to meet the requirements of a Government solicitation; or
(2) Relinquish to, or otherwise provide, the Government rights to use, modify, reproduce, release, perform, display, or disclose commercial computer software or commercial computer software documentation except for a transfer of rights mutually agreed upon.
(a) The Government shall have only the rights specified in the license under which the commercial computer software or commercial computer software documentation was obtained.
(b) If the Government has a need for rights not conveyed under the license customarily provided to the public, the Government must negotiate with the contractor to determine if there are acceptable terms for transferring such rights. The specific rights granted to the Government shall be enumerated in the contract license agreement or an addendum thereto.
A specific contract clause governing the Government's rights in commercial computer software or commercial computer software documentation is not prescribed. As required by 227.7202-3, the Government's rights to use, modify, reproduce, release, perform, display, or disclose computer software or computer software documentation shall be identified in a license agreement.
(a) DoD policy is to acquire only the computer software and computer software documentation, and the rights in such software or documentation, necessary to satisfy agency needs.
(b) Solicitations and contracts shall—
(1) Specify the computer software or computer software documentation to be delivered under a contract and the delivery schedules for the software or documentation;
(2) Establish or reference procedures for determining the acceptability of computer software or computer software documentation;
(3) Establish separate contract line items, to the extent practicable, for the computer software or computer software documentation to be delivered under a contract and require offerors and contractors to price separately each deliverable data item; and
(4) Require offerors to identify, to the extent practicable, computer software or computer software documentation to be furnished with restrictions on the Government's rights and require contractors to identify computer software or computer software documentation to be delivered with such restrictions prior to delivery.
(c) Offerors shall not be required, either as a condition of being responsive to a solicitation or as a condition for award, to sell or otherwise relinquish to the Government any rights in computer software developed exclusively at private expense except for the software identified at 227.7203-5(a) (3) through (6).
(d) Offerors and contractors shall not be prohibited or discouraged from furnishing or offering to furnish computer software developed exclusively at private expense solely because the Government's rights to use, modify, release, reproduce, perform, display, or disclose the software may be restricted.
(a) Contracting officers shall work closely with data managers and requirements personnel to assure that computer software and computer software documentation requirements included in solicitations are consistent with the policy expressed in 227.7203-1.
(b)(1) Data managers or other requirements personnel are responsible for identifying the Government's minimum needs. In addition to desired software performance, compatibility, or other technical considerations, needs determinations should consider such factors as multiple site or shared use requirements, whether the Government's software maintenance philosophy will require the right to modify or have third parties modify the software, and any special computer software documentation requirements.
(2) When reviewing offers received in response to a solicitation or other request for computer software or computer software documentation, data managers must balance the original assessment of the Government's needs with prices offered.
(c) Contracting officers are responsible for ensuring that, wherever practicable, solicitations and contracts—
(1) Identify the types of computer software and the quantity of computer programs and computer software documentation to be delivered, any requirements for multiple users at one site or multiple site licenses, and the format and media in which the software or documentation will be delivered;
(2) Establish each type of computer software or computer software documentation to be delivered as a separate contract line item (this requirement may be satisfied by an exhibit to the contract);
(3) Identify the prices established for each separately priced deliverable item of computer software or computer software documentation under a fixed-price type contract;
(4) Include delivery schedules and acceptance criteria for each deliverable item; and
(5) Specifically identify the place of delivery for each deliverable item.
(a) Use the provision at 252.227-7017, Identification and Assertion of Use, Release, or Disclosure Restrictions, in all solicitation that include the clause at 252.227-7014, Rights in Noncommercial Computer Software and Noncommercial Computer Software Documentation. The provision requires offerors to identify any computer software or computer software documentation for
(b) Subsequent to contract award, the clause at 252.227-7014 permits a contractor, under certain conditions, to make additional assertions of restrictions. The prescriptions for the use of that clause and its alternates are at 227.7203-6(a).
(a)
(b)
The standard license rights in computer software that a licensor grants to the Government are unlimited rights, government purpose rights, or restricted rights. The standard license in computer software documentation conveys unlimited rights. Those rights are defined in the clause at 252.227-7014, Rights in Noncommercial Computer Software and Noncommercial Computer Software Documentation. In unusual situations, the standard rights may not satisfy the Government's needs or the Government may be willing to accept lesser rights in return for other consideration. In those cases, a special license may be negotiated. However, the licensor is not obligated to provide the Government greater rights and the contracting officer is not required to accept lesser rights than the rights provided in the standard grant of license. The situations under which a particular grant of license applies are enumerated in paragraphs (a) through (d) of this subsection.
(a)
(1) Computer software developed exclusively with Government funds;
(2) Computer software documentation required to be delivered under a Government contract;
(3) Corrections or changes to computer software or computer software documentation furnished to the contractor by the Government;
(4) Computer software or computer software documentation that is otherwise publicly available or has been released or disclosed by the contractor or subcontractor without restrictions on further use, release or disclosure other than a release or disclosure resulting from the sale, transfer, or other assignment of interest in the software to another party or the sale or transfer of some or all of a business entity or it assets to another party;
(5) Computer software or computer software documentation obtained with unlimited rights under another Government contract or as a result of negotiations; or
(6) Computer software or computer software documentation furnished to
(i) Restricted rights in computer software, limited rights in technical data, or government purpose license rights and the restrictive conditions have expired; or
(ii) Government purpose rights and the contractor's exclusive right to use such software or documentation for commercial purposes has expired.
(b)
(2) The period during which government purpose rights are effective is negotiable. The clause at 252.227-7014 provides a nominal five-year period. Either party may request a different period. Changes to the government purpose rights period may be made at any time prior to delivery of the software without consideration from either party. Longer periods should be negotiated when a five-year period does not provide sufficient time to commercialize the software or, for software developed by subcontractors, when necessary to recognize the subcontractors’ interests in the software.
(3) The government purpose rights period commences upon execution of the contract, subcontract, letter contract (or similar contractual instrument), contract modification, or option exercise that required development of the computer software. Upon expiration of the government purpose rights period, the Government has unlimited rights in the software including the right to authorize others to use data for commercial purposes.
(4) During the government purpose rights period, the Government may not use, or authorize other persons to use, computer software marked with government purpose rights legends for commercial purposes. The Government shall not release or disclose, or authorize others to release or disclose, computer software in which it has government purpose rights to any person unless—
(i) Prior to release or disclosure, the intended recipient is subject to the use and non-disclosure agreement at 227.7103-7; or
(ii) The intended recipient is a Government contractor receiving access to the software for performance of a Government contract that contains the clause at 252.227-7025, Limitations on the Use or Disclosure of Government-Furnished Information Marked with Restrictive Legends.
(5) When computer software marked with government purpose rights legends will be released or disclosed to a Government contractor performing a contract that does not include the clause at 252.227-7025, the contract may be modified, prior to release or disclosure, to include such clause in lieu of requiring the contractor to complete a use and non-disclosure agreement.
(6) Contracting activities shall establish procedures to assure that computer software or computer software documentation marked with government purpose rights legends are released or disclosed, including a release or disclosure through a Government solicitation, only to persons subject to the use and non-disclosure restrictions. Public announcements in the Commerce Business Daily or other publications must provide notice of the use and non-disclosure requirements. Class use and non-disclosure agreements (e.g., agreements covering all solicitations received by the XYZ company within a reasonable period) are authorized and may be obtained at any time prior to release or disclosure of the government purpose rights software or documentation. Documents transmitting government purpose rights software or documentation to persons under class agreements shall identify the specific software or documentation subject to government purpose rights and the class agreement under which such software or documentation are provided.
(c)
(2) Contractors are not required to provide the Government additional rights in computer software delivered
(d)
(e)
(a)(1) Use the clause at 252.227-7014, Rights in Noncommercial Computer Software and Noncommercial Computer Software Documentation, in solicitations and contracts when the successful offeror(s) will be required to deliver computer software or computer software documentation. Do not use the clause when the only deliverable items are technical data (other than computer software documentation), commercial computer software or commercial computer software documentation, commercial items (see 227.7102-3), special works (see 227.7205), or contracts under the Small Business Innovative Research Program (see 227.7104), Except as provided in 227.7107-2, do not use the clause in architect-engineer and construction contracts..
(2) Use the clause at 252.227-7014 with its Alternate I in research contracts when the contracting officer determines, in consultation with counsel, that public dissemination by the contractor would be—
(i) In the interest of the Government; and
(ii) Facilitated by the Government relinquishing its right to publish the work for sale, or to have others publish the work for sale on behalf of the Government.
(b) Use the clause at 252.227-7016, Rights in Bid or Proposal Information, in solicitations and contracts that include the clause at 252.227-7014.
(c) Use the clause at 252.227-7019, Validation of Asserted Restrictions—Computer Software, in solicitations and contracts that include the clause at 252.227-7014. The clause provides procedures for the validation of asserted restrictions on the Government's rights to use, release, or disclose computer software.
(d) Use the provision at 252.227-7025, Limitations on the Use or Disclosure of Government-Furnished Information Marked with Restrictive Legends, in solicitations and contracts when it is anticipated that the Government will provide the contractor, for performance of its contract, computer software or computer software documentation marked with another contractor's restrictive legend(s).
(e) Use the provision at 252.227-7028, Technical Data or Computer Software Previously Delivered to the Government, in solicitations when the resulting contract will require the contractor to deliver computer software or computer software documentation. The provision requires offerors to identify any software or documentation specified in the solicitation as deliverable items that are the same or substantially the same as software or documentation which the offeror has delivered or is obligated to deliver, either as a contractor or subcontractor, under any other federal agency contract.
(f) Use the clause at 252.227-7037, Validation of Restrictive Markings on Technical Data, in solicitations and contracts that include the clause at 252.227-7014 when the contractor will be required to deliver noncommercial computer software documentation (technical data). The clause implements statutory requirements under 10 U.S.C. 2321. Paragraph (e) of the clause contains information that must be included in a formal challenge.
(a)
(b)
(a)
(2) The clause at 252.227-7013, Rights in Technical Data—Noncommercial Items, does not permit a contractor to incorporate a third party's copyrighted software into a deliverable software item unless the contractor has obtained an appropriate license for the Government and, when applicable, others acting on the Government's behalf, or has obtained the contracting officer's written approval to do so. Grant approval to use third party copyrighted software in which the Government will not receive a copyright license only when the Government's requirements cannot be satisfied without the third party material or when the use of the third party material will result in cost savings to the Government which outweigh the lack of a copyright license.
(b)
(a)
(2) The procedures for correcting minor informalities shall not be used to obtain information regarding asserted restrictions or an offeror's suggested asserted rights category. Questions regarding the justification for an asserted restriction or asserted rights category must be pursued in accordance with the procedures at 227.7203-13.
(3) The restrictions asserted by a successful offeror shall be attached to its contract unless, in accordance with the procedures at 227.7203-13, the parties have agreed that an asserted restriction is not justified. The contract attachment shall provide the same information regarding identification of the computer software or computer software documentation, the asserted rights category, the basis for the assertion, and the name of the person asserting the restrictions as required by paragraph (d) of the solicitation provision at 252.227-7017. Subsequent to contract award, the clause at 252.227-7014, Rights in Noncommercial Computer Software and Noncommercial Computer Software Documentation, permits a contractor to make additional assertions under certain conditions. The additional assertions must be made in accordance with the procedures and in the format prescribed by that clause.
(4) Neither the pre- or post-award assertions made by the contractor nor the fact that certain assertions are identified in the attachment to the contract, determine the respective rights of the parties. As provided at 227.7203-13, the Government has the right to review, verify, challenge and validate restrictive markings.
(5) Information provided by offerors in response to the solicitation provision at 252.227-7017 may be used in the source selection process to evaluate the impact on evaluation factors that may be created by restrictions on the Government's ability to use or disclose computer software or computer software documentation.
(b)
(1) Requires a contractor who desires to restrict the Government's rights in computer software or computer software documentation to place restrictive markings on the software or documentation, provides instructions for the placement of the restrictive markings, and authorizes the use of certain restrictive markings. When it is anticipated that the software will or may be used in combat or situations which simulate combat conditions, do not permit contractors to insert instructions into computer programs that interfere with or delay operation of the software to display a restrictive rights legend or other license notice; and
(2) Requires a contractor to deliver, furnish, or otherwise provide to the Government any computer software or computer software documentation in which the Government has previously obtained rights with the Government's pre-existing rights in that software or documentation unless the parties have agreed otherwise or restrictions on the Government's rights to use, modify, produce, release, or disclose the software or documentation have expired. When restrictions are still applicable, the contractor is permitted to mark the software or documentation with the appropriate restrictive legend.
(c)
(2) A contractor may request permission to have appropriate legends placed on unmarked computer software or computer software documentation at its expense. The request must be received by the contracting officer within six months following the furnishing or delivery of such software or documentation, or any extension of that time approved by the contracting officer. The person making the request must—
(i) Identify the software or documentation that should have been marked;
(ii) Demonstrate that the omission of the marking was inadvertent, the proposed marking is justified and conforms with the requirements for the marking of computer software or computer software documentation contained in the clause at 252.227-7014; and
(iii) Acknowledge, in writing, that the Government has no liability with respect to any disclosure, reproduction, or use of the software or documentation made prior to the addition of the marking or resulting from the omission of the marking.
(3) Contracting officers should grant permission to mark only if the software or documentation were not distributed outside the Government or were distributed outside the Government with restrictions on further use or disclosure.
(a) The clause at 252.227-7014, Rights in Noncommercial Computer Software and Noncommercial Computer Software Documentation, requires a contractor, and its subcontractors or suppliers that will deliver computer software or computer software documentation with other than unlimited rights, to establish and follow written procedures to assure that restrictive markings are used only when authorized and to maintain records to justify the validity of restrictive markings.
(b) The clause at 252.227-7019, Validation of Asserted Restrictions—Computer Software, requires contractors and their subcontractors or suppliers at any tier to maintain records sufficient to justify the validity of markings that assert restrictions on the use, modification, reproduction, release, performance, display, or disclosure of computer software.
(a)
(2) The correction of nonconforming markings on computer software is not subject to 252.227-7019, Validation of Asserted Restrictions—Computer Software, and the correction of nonconforming markings on computer software documentation (technical data) is not subject to 252.227-7037, Validation of Restrictive Markings on Technical Data. To the extent practicable, the contracting officer should return computer software or computer software documentation bearing nonconforming markings to the person who has placed the nonconforming markings on the software or documentation to provide that person an opportunity to correct or strike the nonconforming markings at that person's expense. If that person fails to correct the nonconformity and return the corrected software or documentation within 60 days following the person's receipt of the software or documentation, the contracting officer may correct or strike the nonconformity at the person's expense. When it is impracticable to return computer software or computer software documentation for correction, contracting officers may unilaterally correct any nonconforming markings at Government expense. Prior to correction, the software or documentation may be used in accordance with the proper restrictive marking.
(b)
(2) Contracting officers have the right to review and challenge the validity of unjustified markings. However, at any time during performance of a contract and notwithstanding existence of a challenge, the contracting officer and the person who has asserted a restrictive marking may agree that the restrictive marking is not justified. Upon such agreement, the contracting officer may, at his or her election, either——
(i) Strike or correct the unjustified marking at that person's expense; or
(ii) Return the computer software or computer software documentation to the person asserting the restriction for correction at that person's expense. If the software or documentation are returned and that person fails to correct or strike the unjustified restriction and return the corrected software or documentation to the contracting officer within 60 days following receipt of the software or documentation, the unjustified marking shall be corrected or stricken at that person's expense.
(a)
(b)
(c)
(1) A subcontractor's or supplier's business interests in its technical data would be compromised if the data were disclosed to a higher tier contractor.
(2) There is reason to believe that the contractor will not respond in a timely manner to a challenge and an untimely response would jeopardize a subcontractor's or supplier's right to assert restrictions; or
(3) Requested to do so by a subcontractor or supplier.
(d)
(2)
(3)
(ii) Contracting officers must have reasonable grounds to challenge the current validity of an asserted restriction. Before challenging an asserted restriction, carefully consider all available information pertaining to the asserted restrictions. Resolution of questions regarding the validity of asserted restrictions using the process described at 227.7203-12(b)(2) is strongly encouraged. After consideration of the situations described in paragraph (c) of this subsection, contracting officers may request the person asserting a restriction to furnish a written explanation of the facts and supporting documentation for the assertion in sufficient detail to enable the contracting officer to determine the validity of the assertion. Additional supporting documentation may be requested when the explanation provided by that person does not, in the contracting officer's opinion, establish the validity of the assertion.
(iii) Assertions may be challenged whether or not supporting documentation was requested. Challenges must be in writing and issued to the person asserting the restriction.
(4)
(e)
(2) Only a contracting officer's final decision, or actions of an agency Board of Contract Appeals or a court of competent jurisdiction, that sustain the validity of an asserted restriction constitute validation of the restriction.
(f)
(a)
(b)
(i) The provisions of a contract clause providing for inspection and acceptance of deliverables and remedies for nonconforming deliverables; or
(ii) The procedures at FAR 46.407(c) through (g), if the contract does not contain an inspection clause providing remedies for nonconforming deliverables.
(2)
(ii)
(a) Subcontractors and suppliers at all tiers should be provided the same protection for their rights in computer
(b) The clauses at 252.227-7019, Validation of Asserted Restrictions—Computer Software, and 252.227-7037, Validation of Restrictive Markings on Technical Data, obtain a contractor's agreement that the Government's transaction of validation or challenge matters directly with subcontractors at any tier does not establish or imply privity of contract. When a subcontractor or supplier exercises its right to transact validation matters directly with the Government, contracting officers shall deal directly with such persons, as provided at 227.7203-13(c) for computer software and 227.7103-13(c)(3) for computer software documentation (technical data).
(c) Require prime contractors whose contracts include the following clauses to include those clauses, without modification except for appropriate identification of the parties, in contracts with subcontractors or suppliers who will be furnishing computer software in response to a Government requirement (see 227.7103-15(c) for clauses required when subcontractors or suppliers will be furnishing computer software documentation (technical data)):
(1) 252.227.7014, Rights in Noncommercial Computer Software and Noncommercial Computer Software Documentation;
(2) 252.227.7019, Validation of Asserted Restrictions—Computer Software;
(3) 252.227.7025, Limitations on the Use or Disclosure of Government Furnished Information Marked with Restrictive Legends; and
(4) 252.227.7028, Technical Data or Computer Software Previously Delivered to the Government.
(d) Do not require contractors to have their subcontractors or suppliers at any tier relinquish rights in technical data to the contractor, a higher tier subcontractor, or to the Government, as a condition for award of any contract, subcontract, purchase order, or similar instrument except for the rights obtained by the Government under the provisions of the Rights in Noncommercial Computer Software and Noncommercial Computer Software Documentation clause contained in the contractor's contract with the Government.
Computer software or computer software documentation may be released or disclosed to foreign governments, foreign contractors, or international organizations only if release or disclosure is otherwise permitted both by Federal export controls and other national security laws or regulations. Subject to such laws and regulations, the Department of Defense—
(a) May release or disclose computer software or computer software documentation in which it has obtained unlimited rights to such foreign entities or authorize the use of such data by those entities; and
(b) Shall not release or disclose computer software or computer software documentation for which restrictions on use, release, or disclosure have been asserted to such foreign entities or authorize the use of such data by those entities, unless the intended recipient is subject to the same provisions as included in the use and non-disclosure agreement at 227.7103-7 and the requirements of the clause at 252.227-7014, Rights in Noncommercial Computer Software and Noncommercial Computer Software Documentation, governing use, modification, reproduction, release, performance, display, or disclosure of such data have been satisfied.
(a) The clause at 252.227-7032, Rights in Technical Data and Computer Software (Foreign), may be used in contracts with foreign contractors to be performed overseas, except Canadian purchases (see paragraph (c) of this subsection) in lieu of the clause at 252.227-7014, Rights in Noncommercial Computer Software and Noncommercial Computer Software Documentation, when the Government requires the unrestricted right to use, modify, reproduce, release, perform, display, or
(b) When the Government does not require unlimited rights, the clause at 252.227-7032 may be modified to accommodate the needs of a specific overseas procurement situation. The Government should obtain rights to the computer software or computer software documentation that are not less than the rights the Government would have obtained under the software rights clause(s) prescribed in this part for a comparable procurement performed within the United States or its possessions.
(c) Contracts for Canadian purchases shall include the appropriate software rights clause prescribed in this part for a comparable procurement performed within the United States or its possessions.
When contracting under the Small Business Innovative Research Program, follow the procedures at 227-7104.
(a) Use the clause at 252.227-7020, Rights in Special Works, in solicitations and contracts where the Government has a specific need to control the distribution of computer software or computer software documentation first produced, created, or generated in the performance of a contract and required to be delivered under that contract, including controlling distribution by obtaining an assignment of copyright, or a specific need to obtain indemnity for liabilities that may arise out of the creation, delivery, use, modification, reproduction, release, performance, display, or disclosure of such software or documentation. Use the clause—
(1) In lieu of the clause at 252.227-7014, Rights in Noncommercial Computer Software and Noncommercial Computer Software Documentation, when the Government must own or control copyright in all computer software or computer software documentation first produced, created, or generated and required to be delivered under a contract; or
(2) In addition to the clause at 252.227-7014 when the Government must own or control copyright in some of the computer software or computer software documentation first produced, created, or generated and required to be delivered under a contract. The specific software or documentation in which the Government must own or control copyright must be identified in a special contract requirement.
(b) Although the Government obtains an assignment of copyright and unlimited rights in the computer software or computer software documentation delivered as a special work under the clause at 252.227-7020, the contractor retains use and disclosure rights in that software or documentation. If the Government needs to restrict a contractor's rights to use or disclose a special work, it must also negotiate a special license which specifically restricts the contractor's use or disclosure rights.
(c) The clause at 252.227-7020 does not permit a contractor to incorporate into a special work any work copyrighted by others unless the contractor obtains the contracting officer's permission to do so and obtains for the Government a non-exclusive, paid up, world-wide license to make and distribute copies of that work, to prepare derivative works, to perform or display any portion of that work, and to permit others to do so for government purposes. Grant permission only when the Government's requirements cannot be satisfied unless the third party work is included in the deliverable work.
(d) Examples of other works which may be procured under the clause at 252.227-7020 include, but are not limited to, audiovisual works, scripts, soundtracks, musical compositions, and adaptations; histories of departments, agencies, services or units thereof; surveys of Government establishments; instructional works or guidance to Government officers and employees on the discharge of their official duties; reports, books, studies, surveys or similar documents; collections of data containing information pertaining to individuals that, if disclosed, would violate the right of privacy or publicity of the
Follow 227.7107 when contracting for architect-engineer services.
Follow 227.7108 when it is in the Government's interests to have a data repository include computer software or to have a separate computer software repository. Contractual instruments establishing the repository requirements must appropriately reflect the repository manager's software responsibilities.
41 U.S.C. 421 and 48 CFR chapter 1.
For Defense Environmental Restoration Program construction contracts entered into pursuant to 10 U.S.C. 2701 and executed between December 5, 1991, and December 31, 1999—
(1) Any rights of action under the performance bond shall only accrue to, and be for the exclusive use of, the obligee named in the bond.
(2) In the event of default, the surety's liability on the performance bond is limited to the cost of completion of the contract work, less the balance of unexpended funds. Under no circumstances shall the liability exceed the penal sum of the bond.
(3) The surety shall not be liable for indemnification or compensation of the obligee for loss or liability arising from personal injury or property damage, even if the injury or damage was caused by a breach of the bonded contract.
(4) Once it has taken action to meet its obligations under the bond, the surety is entitled to any indemnification and identical standard of liability to which the contractor was entitled under the contract or applicable laws and regulations.
(a) The requirement for performance and payment bonds is waived for cost-reimbursement contracts. However, for cost type contracts with fixed-price construction subcontracts over $25,000, require the prime contractor to obtain from each of its construction subcontractors—
(i) A payment bond in favor of the prime contractor sufficient to pay labor and material costs; and
(ii) A performance bond in an equal amount if available at no additional cost.
Fidelity and forgery bonds generally are not required but may be used when—
(1) Necessary for the protection of the Government or the contractor; or
(2) The investigative and claims services of a surety company are desired.
(a) Withholding may be appropriate in other than construction contracts (see 232.970-1(b)).
When a requirement for a performance bond or other security is included in a solicitation for dismantling, demolition, or removal of improvements (see FAR 37.300), use the provision at 252.228-7004, Bonds or Other Security. Set a period of time (normally ten days) for return of executed bonds.
The DoD has established the National Defense Projects Rating Plan, also known as the Special Casualty Insurance Rating Plan, as a risk-pooling arrangement to minimize the cost to the Government of purchasing the liability insurance listed in FAR 28.307-2. Use the plan in accordance with the following guidelines when it provides the necessary coverage more advantageously than commercially available coverage.
(1) The plan—
(i) Is implemented by attaching an endorsement to standard insurance policy forms for workers’ compensation, employer's liability, comprehensive general, and automobile liability. The endorsement states that the instant policy is subject to the National Defense Projects Rating Plan.
(ii) Applies to eligible Defense projects of one or more departments/agencies. For purposes of this section, a Defense project is any eligible contract or group of contracts with the same contractor.
(A) A Defense project is eligible when—
(
(
(B) A contract is eligible when it is—
(
(
(
(2) Under construction contracts, include construction subcontractors in the prime contractor's plan only when subcontractor operations are at the project site, and the subcontract provides that the prime contractor will furnish insurance.
(3) Use the agreement in Table 28-1, Insurance Rating Plan Agreement, when the Government assumes contractor premium payments upon contract termination or completion.
(4) The Federal Tort Claims Act provides protection for Government employees while driving Government-owned vehicles in the performance of their assigned duties. Include the endorsement in Table 28-2, Automobile Insurance Policy Endorsement, in automobile liability insurance policies provided under the National Defense Projects Rating Plan.
It is agreed that 100 percent *
* In the event the Government has less than a 100 percent interest in premium funds or dividends, modify the assignment to reflect the percentage of interest and extent of the Government's assumption of additional premium obligation.
The United States of America hereby assumes and agrees to fulfill all present and future obligations of the prime contractor with respect to the payment of 100 percent of the premiums under said policies.
This agreement, upon acceptance by the prime contractor, the United States of America, and the Company shall be effective from
United States of America
It is agreed that insurance provided by the policy with respect to the ownership, maintenance, or use of automobiles, including loading and unloading thereof, does not apply to the following as insureds: The United States of America, any of its agencies, or any of its officers or employees.
(d) Submit requests for waiver through department/agency channels. Include the following—
(i) Name and address of contractor;
(ii) Contract number;
(iii) Date of award;
(iv) Place of performance;
(v) Name of insurance company providing Defense Base Act coverage;
(vi) Nationality of employees to whom waiver is to apply; and
(vii) Reason for waiver.
The Defense Department Group Term Insurance Plan is available for contractor use under cost-reimbursement type contracts when approved as provided in department or agency regulations. A contractor is eligible if—
(a) The number of covered employees is 500 or more; and
(b) The contractor has all cost-reimbursement contracts; or
(c) At least 90 percent of the payroll for contractor operations to be covered by the Plan is under cost-reimbursement contracts.
Use the clause at FAR 52.228-7, Insurance—Liability to Third Persons, in solicitations and contracts, other than those for construction and those for architect-engineer services, when a cost-reimbursement contract is contemplated, unless the head of the contracting activity waives the requirement for use of the clause.
(a) Use the clause at 252.228-7000, Reimbursement for War-Hazard Losses, when—
(1) The clause at FAR 52.228-4, Worker's Compensation and War-Hazard Insurance Overseas, is used; and
(2) The head of the contracting activity decides not to allow the contractor to buy insurance for war-hazard losses.
(b)(1) Use the clause at 252.228-7001, Ground and Flight Risk, in negotiated fixed-price contracts for aircraft production, modification, maintenance, repair, or overhaul, unless—
(i) The aircraft is being acquired for a foreign military sale and the foreign government has not agreed to assume the risk; or
(ii) The cost of insurance for damage, loss, or destruction of aircraft does not exceed $500, and the contracting officer agrees to recognize the insurance costs.
(2) If appropriate, revise the clause at 252.228-7001, Ground and Flight Risk, as follows—
(i) Include a modified definition of “aircraft” if the contract covers other than conventional types of winged aircraft, i.e., helicopters, vertical take-off aircraft, lighter-than-air airships or other nonconventional aircraft. The modified definition should describe a stage of manufacture comparable to the standard definition.
(ii) Modify “in the open” to include “hush houses,” test hangars and comparable structures, and other designated areas.
(iii) Expressly define the “contractor's premises” where the aircraft will
(iv) Revise paragraph (d)(iii) of the clause to provide Government assumption of risk for transportation by conveyance on streets or highways when transportation is—
(A) Limited to the vicinity of contractor premises; and
(B) Incidental to work performed under the contract.
(c)(1) Use the clause at 252.228-7002, Aircraft Flight Risk, in cost reimbursement contracts—
(i) For the development, production, modification, maintenance, repair, or overhaul of aircraft; or
(ii) Otherwise involving the furnishing of aircraft to the contractor by the Government.
(iii) With the definition of “aircraft” modified, if appropriate, to include helicopters, vertical take-off aircraft, lighter-than-air airships or other nonconventional aircraft.
(2) Use the clause at 252.228-7002, Aircraft Flight Risk, appropriately modified, in fixed price contracts when—
(i) The clause at 252.228-7001, Ground and Flight Risk, is not used; and
(ii) Contract performance involves the flight of Government furnished aircraft.
(d) The clause at 252.228-7003, Capture and Detention, may be used when contractor employees are subject to capture and detention and may not be covered by the War Hazards Compensation Act (42 U.S.C. 1701
(e) The clause at 252.228-7005, Accident Reporting and Investigation Involving Aircraft, Missiles, and Space Launch Vehicles, may be used in solicitations and contracts which involve the manufacture, modification, overhaul, or repair of these items.
(f) Use the clause at 252.228-7006, Compliance with Spanish Laws and Insurance, in solicitations and contracts for services or construction to be performed in Spain, unless the contractor is a Spanish concern.
41 U.S.C. 421 and 48 CFR chapter 1.
(a) Within DoD, the agency-designated legal counsels are the defense agency General Counsels, the General Counsels of the Navy and Air Force, and for the Army, the Chief, Contract Law Division, Office of the Judge Advocate General.
(c) The contracting officer may direct the contractor to litigate the applicability of a particular tax if—
(i) The contract is either a cost reimbursement type or a fixed price type with a tax escalation clause; and
(ii) The direction is coordinated with the agency-designated legal counsel through the DoD Tax Policy and Advisory Group.
(d)(i) Tax relief agreements between the United States and foreign governments in Europe that exempt the United States from payment of specific
(ii) Tax relief also may be available in countries that have not signed tax relief agreements. The potential for such relief should be explored in accordance with paragraph (d)(iii) of this section.
(iii) Review DoDD 5100.64, Department of Defense Foreign Tax Relief Program, before contracting with a foreign source. Refer questions on implementation of the program to the Commanding Officers in Table 29-1, Designated Commanding Officers, which have been designated under subsection E.7 of DoDD 5100.64 to serve as—
(A) Single point of contact for U.S. contracting offices for investigation and resolution of specific foreign tax relief matters; and
(B) Liaison with responsible diplomatic mission and local foreign tax authorities.
(iv) Refer foreign tax relief questions which have not been resolved by the designated Commanding Officer to the agency-designated legal counsel.
(v) When an acquisition is for a contract to be performed in a country or area listed in Table 29-1, Designated Commanding Officers—
(A) Obtain from the designated Commanding Officer detailed information concerning the taxes and duties from which the Government of the United States is exempt, and
(B) Provide the information to prospective offerors.
(C) Do not provide prospective offerors any other information about foreign taxes or duties.
(D) Issue tax exemption certificates, as appropriate, to assist the contractor in obtaining relief from foreign taxes and duties which were excluded from the contract price.
(E) Seek advice and assistance from the designated Commanding Officer and, if necessary, the agency-designated legal counsel if the contractor notifies the contracting officer that it has been assessed a tax or duty by a foreign government which could increase the contract price.
(vi) Also see subpart 229.70 for special procedures for obtaining tax relief and duty-free import privileges when conducting U.S. Government acquisitions in certain foreign countries.
Use the clause at 252.229-7000, Invoices Exclusive of Taxes or Duties, in solicitations and contracts when a fixed-price contract will be awarded to a foreign concern.
(a) Use the clause at 252.229-7001, Tax Relief, in solicitations and contracts when a contract will be awarded to a foreign concern in a foreign country. When contract performance will be in Germany, use the clause with its Alternate I.
(b) Use the clause at 252.229-7002, Customs Exemptions (Germany), in solicitations and contracts requiring the import of U.S. manufactured products into Germany.
(c) Use the clause at 252.229-7003, Tax Exemptions (Italy), in solicitations and contracts when contract performance will be in Italy.
(d) Use the clause at 252.229-7004, Status of Contractor as a Direct Contractor (Spain), in solicitations and contracts requiring the import into Spain of supplies for construction, development, maintenance, or operation of Spanish-American installations and facilities.
(e) Use the clause at 252.229-7005, Tax Exemptions (Spain), in solicitations and contracts when contract performance will be in Spain.
(f) Use the clause at 252.229-7006, Value Added Tax Exclusion (United Kingdom), in solicitations and contracts when contract performance will be in the United Kingdom.
(g) Use the clause at 252.229-7007, Verification of United States Receipt of Goods, in solicitations and contracts when contract performance will be in the United Kingdom.
(h) Use the clause at 252.229-7008, Relief from Import Duty (United Kingdom), in solicitations issued and contracts awarded in the United Kingdom.
(i) Use the clause at 252.229-7009, Relief from Customs Duty and Value Added Tax on Fuel (Passenger Vehicles) (United Kingdom), in solicitations issued and contracts awarded in the United Kingdom for fuels (gasoline or diesel) and lubricants used in passenger vehicles (excluding taxis).
(j) Use the clause at 252.229-7010, Relief from Customs Duty on Fuel (United Kingdom), in solicitations issued and contracts awarded in the United Kingdom that require the use of fuels (gasoline or diesel) and lubricants in taxis or vehicles other than passenger vehicles.
This subpart prescribes procedures to be used by contracting officers to obtain tax relief and duty-free import privileges when conducting U.S. Government acquisitions in certain foreign countries.
(a) The Joint United States Military Group (JUSMG), Spain Policy Directive 400.4, or subsequent directive, applies to U.S. contracting offices acquiring supplies or services in Spain when the introduction of material or equipment into Spain is required for contract performance.
(b) Upon award of a contract with a Direct Contractor, as defined in the clause at 252.229-7004, the contracting officer will notify JUSMG-MAAG Madrid, Spain, and HQ 16AF/LGTT and forward three copies of the contract to JUSMG-MAAG, Spain.
(c) If copies of the contract are not available and duty-free import of equipment or materials is urgent, the contracting officer will send JUSMG-MAAG three copies of the Letter of Intent or a similar document indicating the pending award. In these cases, authorization for duty-free import will be issued by the Government of Spain. Upon formal award, the contracting officer will forward three copies of the completed contract to JUSMG-MAAG, Spain.
(d) The contracting officer will notify JUSMG-MAAG, Spain, and HQ 16AF/LGTT of ports-of-entry and identify the customs agents who will clear property on their behalf. Additional
This section contains procedures to be followed in securing relief from the British value added tax and import duties.
(a) U.S. Government purchases qualifying for tax relief are equipment, materials, facilities, and services for the common defense effort and for foreign aid programs.
(b) To facilitate the resolution of issues concerning specific waivers of import duty or tax exemption for U.S. Government purchases (see 229.7002-3), contracting offices shall provide the name and activity address of personnel who have been granted warranted contracting authority to Her Majesty's (HM) Customs and Excise at the following address: HM Customs and Excise, International Customs Division G, Branch 4, Adelaide House, London Bridge, London EC4R 9DB.
No import duty shall be paid by the United States and contract prices shall be exclusive of duty, except when the administrative cost compared to the low dollar value of a contract makes it impracticable to obtain relief from contract import duty. In this instance, the contracting officer shall document the contract file with a statement that—
(a) The administrative burden of securing tax relief under the contract was out of proportion to the tax relief involved;
(b) It is impracticable to secure tax relief;
(c) Tax relief is therefore not being secured; and
(d) The acquisition does not involve the expenditure of any funds to establish a permanent military installation.
In the event a value added tax or import duty problem cannot be resolved at the contracting officer's level, refer the issue to HQ Third Air Force, Staff Judge Advocate, Unit 4840, Box 45, APO AE 09459. Direct contact with HM Customs and Excise in London is prohibited.
(a)
(b)
(1) To HM Customs and Excise—
(i) Contract number;
(ii) Name and address of contractor;
(iii) Type of work (e.g., laundry, transportation);
(iv) Area of work; and
(v) Period of performance.
(2) To the regional office of HM Custom and Excise to which the contractor applied for relief from the duty on road fuel—copy of the contract.
(c)
41 U.S.C. 421 and 48 CFR chapter 1.
(a) The contracting officer will estimate the facilities capital cost of money and capital employed using—
(1) An analysis of the appropriate Forms CASB-CMF and cost of money factors; and
(2) DD Form 1861, Contract Facilities Capital Cost of Money.
The DD Form 1861 provides a means of linking the Form CASB-CMF and DD Form 1547, Record of Weighted Guidelines Application. It—
(a) Enables the contracting officer to differentiate profit objectives for various types of assets (land, buildings, equipment). The procedure is similar to applying overhead rates to appropriate overhead allocation bases to determine contract overhead costs.
(b) Is designed to record and compute the contract facilities capital cost of money and capital employed which is carried forward to DD Form 1547.
Complete a DD Form 1861 only after evaluating the contractor's cost proposal, establishing cost of money factors, and establishing a prenegotiation objective on cost. Complete the form as follows:
(a) List overhead pools and direct-charging service centers (if used) in the same structure as they appear on the contractor's cost proposal and Form CASB-CMF. The structure and allocation base units-of-measure must be compatible on all three displays.
(b) Extract appropriate contract overhead allocation base data, by year, from the evaluated cost breakdown or prenegotiation cost objective and list against each overhead pool and direct-charging service center.
(c) Multiply each allocation base by its corresponding cost of money factor to get the facilities capital cost of money estimated to be incurred each year. The sum of these products represents the estimated contract facilities capital cost of money for the year's effort.
(d) Total contract facilities cost of money is the sum of the yearly amounts.
(e) Since the facilities capital cost of money factors reflect the applicable cost of money rate in Column 1 of Form CASB-CMF, divide the contract cost of money by that same rate to determine the contract facilities capital employed.
To establish cost and price objectives, apply the facilities capital cost of money and capital employed, as determined under 230.7000, as follows:
(a)
(2)
(b)
(a) The contractor may include contract facilities capital cost of money in cost reimbursement and progress payment invoices. To determine the amount that qualifies as cost incurred, multiply the incurred portions of the overhead pool allocation bases by the latest available cost of money factors. These cost of money calculations are interim estimates subject to adjustment.
(b) As actual cost of money factors under CAS 414 and FAR 31.205-10 are finalized, use the new factors to calculate contract facilities cost of money for the next accounting period.
(a) Contract facilities capital cost of money for final cost determination or repricing is based on each year's final cost of money factors determined under CAS 414 and supported by separate Forms CASB-CMF.
(b) Separately compute contract facilities cost of money in a manner similar to yearly final overhead rates. Also like overhead costs, include in the final settlement an adjustment from interim to final contract cost of money. Do not, however, adjust estimated or target cost.
(a) Forms CASB-CMF are normally initiated by the contractor under the same circumstances as Forward Pricing Rate Agreements (see FAR Subpart 42.17) and evaluated as complementary documents and procedures.
(b) Separate forms are required for each prospective cost accounting period of contract performance.
(c) The contractor may submit annually or with individual contract price proposals, as agreed with the administrative contracting officer (ACO).
(d) The contractor must submit a final form under CAS 414 as soon as possible after the end of each accounting period, together with a proposal for actual overhead costs and rates.
(a) The contracting officer may ask the ACO to complete the forms as part of field pricing support.
(b) When the Weighted Guidelines Method is used, completion of the DD Form 1861 requires information not included on the Form CASB-CMF, i.e., distribution percentages of land, building, and equipment for the business unit performing the contract. Choose the most practical method for obtaining this information, for example—
(1) Contract administration offices could obtain the information through the process used to establish factors for facilities capital cost of money or could establish advance agreements on distribution percentages for inclusion in field pricing reports;
(2) The corporate ACO could obtain distribution percentages; or
(3) The contracting officer could request the information through a solicitation provision.
(a)
(b)
(c)
(1) The interest rate determined by the Secretary of the Treasury under Public Law 92-41 (85 Stat. 97); or
(2) The time-weighted average of the interest rate for each cost accounting period during which the asset is being constructed, fabricated, or developed.
(d)
(a) The interest rate in 230.7100(c)(1) is established semi-annually and is published in the
(b) To calculate the time-weighted average interest rate—
(1) Multiply the various rates in effect during the months of construction by the number of months each rate was in effect; and
(2) Divide the sum of the products by the total number of months in which the rates were experienced.
(a) The calculation of the representative investment requires consideration of the rate or expenditure pattern of the costs to construct, fabricate, or develop a capital asset.
(b) If a majority of the costs were incurred toward the beginning, middle, or end of the cost accounting period, the contractor shall either—
(1) Determine a representative investment amount for the cost accounting period by calculating the average of the month-end balances for that cost accounting period; or
(2) Treat month-end balances as individual representative investment amounts.
(c) If the costs were incurred in a fairly uniform expenditure pattern throughout the construction, fabrication, or development period, the contractor may—
(1) Determine a representative investment amount for the cost accounting period by averaging the beginning and ending balances of the construction, fabrication, or development cost account for the cost accounting period; or
(2) Treat month-end balances as individual representative investment amounts.
(a) Determine the imputed cost of money for an asset under construction, fabrication, or development by applying a cost of money rate (see 230.7101-1) to the representative investment amount (see 230.7101-2).
(1) When a representative investment amount is determined for a cost accounting period in accordance with 230.7101-2(b)(1) or 230.7101-2(c)(1), the cost of money will be the time-weighted average rate.
(2) When a monthly representative investment amount is used in accordance with 230.7101-2(b)(2) or 230.7101-2(c)(2), the cost of money will be the interest rate in effect each month. (Under this method, the cost of money is determined monthly and the total for the cost accounting period is the sum of the monthly amounts.)
(b) The imputed cost of money will be capitalized only once in any cost accounting period, either at the end of the period or at the end of the construction, fabrication, or development period, whichever comes first.
(c) When the construction of an asset takes more than one cost accounting period, the cost of money capitalized for the first cost accounting period will be included in determining the representative investment amount for any future cost accounting periods.
An offset to the profit objectives as set forth in FAR 15.404-4 is not required for CAS 417 cost of money.
41 U.S.C. 421 and 48 CFR chapter 1.
Use the clause at 252.231-7000, Supplemental Cost Principles, in all solicitations and contracts which are subject to the principles and procedures described in FAR subpart 31.1, 31.2, 31.6, or 31.7.
(f)(1) In accordance with Section 8122 of Pub. L. 104-61, and similar sections in subsequent Defense appropriations acts, costs for bonuses or other payments in excess of the normal salary paid by the contractor to an employee, that are part of restructuring costs associated with a business combination, are unallowable under DoD contracts funded by fiscal year 1996 or subsequent appropriations. This limitation does not apply to severance payments or early retirement incentive payments. (See 231.205-70(b) for the definitions of “business combination” and “restructuring costs.”)
The contractor also must comply with subpart 230.70 and maintain records to demonstrate compliance.
(a)
(i)
(ii)
(iii)
(c)
(i) Departments/agencies shall not supplement this regulation in any way that limits IR&D/B&P cost allowability.
(ii) See 225.7303-2(c) for allowability provisions affecting foreign military sale contracts.
(iii) For major contractors, the following limitations apply:
(A) The amount of IR&D/B&P costs allowable under DoD contracts shall not exceed the lesser of—
(B) Allowable IR&D/B&P costs are limited to those for projects that are of potential interest to DoD, including activities intended to accomplish any of the following:
(iv) For major contractors, the cognizant administrative contracting officer (ACO) or corporate ACO shall—
(A) Determine whether IR&D/B&P projects are of potential interest to DoD; and
(B) Provide the results of the determination to the contractor.
(v) The cognizant contract administration office shall furnish contractors with guidance on financial information needed to support IR&D/B&P costs and on technical information needed from major contractors to support the potential interest to DoD determination (also see 242.771-3).
(a) Preparing any material, report, list, or analysis on the actual or projected economic or employment impact in a particular State or congressional district of an acquisition program for which all research, development, testing, and evaluation has not been completed (10 U.S.C. 2249).
(a)
(b)
(1)
(2)
(3)
(4)
(5)
(c)
(i) Such costs are allowable in accordance with FAR part 31 and DFARS part 231;
(ii) An audit of projected restructuring costs and restructuring savings is performed;
(iii) The cognizant administrative contracting officer (ACO) reviews the audit report and the projected costs and projected savings, and negotiates an advance agreement in accordance with paragraph (d)(8) of this subsection; and
(iv) For business combinations that occur—
(A) Prior to October 1, 1996, the Under Secretary of Defense (Acquisition & Technology) or the Principal Deputy certifies that projections of future restructuring savings resulting for DoD from the business combination are based on audited cost data and should result in overall reduced costs for DoD.
(B) October 1, 1996, through November 18, 1997, the Under Secretary of Defense (Acquisition & Technology) or the Principal Deputy—
(C) After November 18, 1997, the Under Secretary of Defense (Acquisition & Technology) or the Principal Deputy determines in writing that the audited projected savings for DoD resulting from restructuring will exceed either—
(2) The audit, review, certification, and determination required by paragraph (c)(1) of this subsection shall not apply to any business combination for which payments for restructuring costs were made before August 15, 1994, or for which the cognizant ACO executed an advance agreement establishing cost ceilings based on audit/negotiation of
(d)
(1) Promptly execute a novation agreement, if one is required, in accordance with FAR subpart 42.12 and DFARS subpart 242.12 and include the provision at DFARS 242.1204(e).
(2) Direct the contractor to segregate restructuring costs and to suspend these amounts from any billings, final contract price settlements, and overhead settlements until the certification, or determination, or both, as applicable, in paragraph (c)(1)(iv) of this subsection is obtain.
(3) Require the contractor to submit an overall plan of restructuring activities and an adequately supported proposal for planned restructuring projects. The proposal must include a breakout by year by cost element, showing the present value of projected restructuring costs and projected restructuring savings.
(4) Notify major buying activities of contractor restructuring actions and inform them about any potential monetary impacts on major weapons programs, when known.
(5) Upon receipt of the contractor's proposal, as soon as practicable, adjust forward pricing rates to reflect the impact of projected restructuring savings. If restructuring costs are included in forward pricing rates prior to execution of an advance agreement in accordance with paragraph (d)(8) of this subsection, the contracting officer shall include a repricing clause in each fixed-price action that is priced based on the rates. The repricing clause must provide for a downward price adjustment to remove restructuring costs if the certification, or determination, or both, as applicable, required by paragraph (c)(1)(iv) of this subsection is not obtained.
(6) Upon receipt of the contractor's proposal, immediately request an audit review of the contractor's proposal.
(7) Upon receipt of the audit report, determine if restructuring savings will exceed restructuring costs on a present value basis. However, for business combinations that occur on or after October 1, 1996, the audited projected savings for DoD must exceed the costs allowed by a factor of at least two to one on a present value basis, unless the determination in paragraph (c)(1)(iv)(B)
(8) Negotiate an advance agreement with the contractor setting forth, at a minimum, a cumulative cost ceiling for restructuring projects and, when necessary, a cost amortization schedule. The costs may not exceed the amount of projected restructuring savings on a present value basis. The advance agreement shall not be executed until the certification, or determination, or both, as applicable, required by paragraph (c)(1)(iv) of this subsection is obtained.
(9) Submit to the Director of Defense Procurement, Office of the Under Secretary of Defense (Acquisition & Technology), ATTN: OUSD (A&T) DP/CPF, a recommendation for certification, or determination, or both, as applicable. Include the information described in paragraph (e) of this subsection.
(10) Consult with the Director of Defense Procurement, Office of the Under Secretary of Defense (Acquisition & Technology), when paragraph (c)(1) (iv)(B)
(e)
(2) The contractor's restructuring proposal.
(3) The proposed advance agreement.
(4) The audit report.
(5) Any other pertinent information.
(6) The cognizant ACO's recommendation for certification, or determination, or both, as applicable. This recommendation must clearly indicate one of the following, consistent with paragraph (c)(1)(iv) of this subsection:
(i) Contractor projections of future cost savings resulting for DoD from the business combination are based on audited cost data and should result in overall reduced costs for the Department.
(ii) The audited projected savings for DoD will exceed the costs allowed by a factor of at least two to one.
(iii) The business combination will result in the preservation of a critical capability that might otherwise be lost to DoD, and the audited projected savings will exceed the costs allowed.
(f)
(i) The time a business combination is announced; and
(ii) The time the contractor's forward pricing rates are adjusted to reflect the impact of restructuring.
(2) The decision to use a repricing clause will depend upon the particular circumstances involved, including—
(i) When the restructuring will take place;
(ii) When restructuring savings will begin to be realized;
(iii) The contract performance period;
(iv) Whether the contracting parties are able to make a reasonable estimate of the impact of restructuring on the contract; and
(v) The size of the potential dollar impact of restructuring on the contract.
(3) If the contracting officer decides to use a repricing clause, the clause must provide for a downward-only price adjustment to ensure that DoD receives its appropriate share of restructuring net savings.
(1) Pursuant to section 841 of the National Defense Authorization Act for Fiscal Year 1994 (Pub. L. 103-160), no limitation may be placed on the reimbursement of otherwise allowable indirect costs incurred by an institution of higher education under a DoD contract awarded on or after November 30, 1993, unless that same limitation is applied uniformly to all other organizations performing similar work under DoD contracts. The 26 percent limitation imposed on administrative indirect costs by OMB Circular No. A-21 shall not be applied to DoD contracts awarded on or after November 30, 1993, to institutions of higher education because the same limitation is not applied to other organizations performing similar work.
(2) The cognizant administrative contracting officer may waive the prohibition in 231.303(1) if the governing body of the institution of higher education requests the waiver to simplify the institution's overall management of DoD cost reimbursements under DoD contracts.
(3) Under 10 U.S.C. 2249, the costs cited in 231.205-22(a) are unallowable.
Under 10 U.S.C. 2249, the costs cited in 231.205-22(a) are unallowable.
Under 10 U.S.C. 2249, the costs cited in 231.205-22(a) are unallowable.
41 U.S.C. 421 and 48 CFR chapter 1.
Departments and agencies in accordance with department/agency procedures, shall prepare and submit to the Under Secretary of Defense (Acquisition and Technology), through the Director of Defense Procurement, annual reports (Report Control Symbol DD-ACQ(A) 1891) containing the information required by FAR 32.006-5.
(a) The Director of Defense Procurement, Office of the Under Secretary of Defense (Acquisition and Technology)
(b) Departments and agencies are responsible for their day-to-day contract financing operations. Refer specific cases involving financing policy or important procedural issues to OUSD(A&T)DP for consideration through the department/agency Contract Finance Committee members (also see Subpart 204.1 for deviation request and approval procedures).
(c) The Under or Assistant Secretary, or other designated official, responsible for the comptroller function within the department or agency is the focal point for financing matters at the department/agency headquarters. Departments and agencies may establish contract financing offices at operational levels.
(1) Department/agency contract financing offices are—
(i) Army: Office of the Assistant Secretary of the Army (Financial Management);
(ii) Navy: Office of the Assistant Secretary of the Navy (Financial Management and Comptroller), Office of Financial Operations;
(iii) Air Force: Air Force Contract Financing Office (SAF/FMPB);
(iv) Defense agencies: Office of the agency comptroller.
(2) Contract financing offices should participate in—
(i) Developing regulations for contract financing;
(ii) Developing contract provisions for contract financing; and
(iii) Resolving specific cases that involve unusual contract financing requirements.
(a) The Contract Finance Committee consists of—
(1) A representative of OUSD(A&T)DP, serving as the Chair;
(2) A representative of the Comptroller of the Department of Defense;
(3) A representative of the Defense Finance and Accounting Service;
(4) A representative of the Civilian Agency Acquisition Council (for matters pertaining to the FAR);
(5) A representative of the National Aeronautics and Space Administration (for matters pertaining to the FAR);
(6) An advisory consultant from the Defense Contract Audit Agency; and
(7) Two representatives of each military department and the Defense Logistics Agency (one representing contracting and one representing the contract finance office).
(b) The Committee—
(1) Advises and assists OUSD(A&T)DP in ensuring proper and uniform application of policies, procedures, and forms;
(2) Is responsible for formulating, revising, and promulgating uniform contract financing regulations;
(3) May recommend to the Secretary of Defense through OUSD(A&T)DP further policy directives on financing; and
(4) Meets at the request of the Chair or a member.
Use the policies and procedures in this section in determining the financial capability of current or prospective contractors.
The contracting officer shall perform a financial review when the contracting officer does not otherwise have sufficient information to make a positive determination of financial responsibility. In addition, the contracting officer shall consider performing a financial review—
(a) Prior to award of a contract, when—
(1) The contractor is on a list requiring preaward clearance or other special clearance before award;
(2) The contractor is listed on the Consolidated List of Contractors Indebted to the Government (Hold-Up List), or is otherwise known to be indebted to the Government;
(3) The contractor may receive Government assets such as contract financing payments or Government property;
(4) The contractor is experiencing performance difficulties on other work; or
(5) The contractor is a new company or a new supplier of the item.
(b) At periodic intervals after award of a contract, when—
(1) Any of the conditions in paragraphs (a)(2) through (a)(5) of this subsection are applicable; or
(2) There is any other reason to question the contractor's ability to finance performance and completion of the contract.
(a) The contracting officer shall obtain the type and depth of financial and other information that is required to establish a contractor's financial capability or disclose a contractor's financial condition. While the contracting officer should not request information that is not necessary for protection for the Government's interests, the contracting officer must insist upon obtaining the information that is necessary. The unwillingness or inability of a contractor to present reasonably requested information in a timely manner, especially information that a prudent business person would be expected to have and to use in the professional management of a business, may be a material fact in the determination of the contractor's responsibility and prospects for contract completion.
(b) The contracting officer shall obtain the following information to the extent required to protect the Government's interest. In addition, if the contracting officer concludes that information not listed in paragraphs (b)(1) through (b)(10) of this subsection is required to comply with 232.072-1, that information should be requested. The information must be for the person(s) who are legally liable for contract performance. If the contractor is not a corporation, the contracting officer shall obtain the required information for each individual/joint venturer/partner:
(1) Balance sheet and income statement—
(i) For the current fiscal year (interim);
(ii) For the most recent fiscal year and, preferably, for the 2 preceding fiscal years. These should be certified by an independent public accountant or by an appropriate officer of the firm; and
(iii) Forecasted for each fiscal year for the remainder of the period of contract performance.
(2) Summary history of the contractor and its principal managers, disclosing any previous insolvencies—corporate or personal, and describing its products or services.
(3) Statement of all affiliations disclosing—
(i) Material financial interests of the contractor;
(ii) Material financial interests in the contractor;
(iii) Material affiliations of owners, officers, directors, major stockholders; and
(iv) The major stockholders if the contractor is not a widely-traded, publicly-held corporation.
(4) Statement of all forms of compensation to each officer, manager, partner, joint venturer, or proprietor, as appropriate—
(i) Planned for the current year;
(ii) Paid during the past 2 years; and
(iii) Deferred to future periods.
(5) Business base and forecast that—
(i) Shows, by significant markets, existing contracts and outstanding offers, including those under negotiation; and
(ii) Is reconcilable to indirect cost rate projections.
(6) Cash forecast for the duration of the contract (see 232.072-3).
(7) Financing arrangement information that discloses—
(i) Availability of cash to finance contract performance;
(ii) Contractor's exposure to financial crisis from creditor's demands;
(iii) Degree to which credit security provisions could conflict with Government title terms under contract financing;
(iv) Clearly stated confirmations of credit with no unacceptable qualifications;
(v) Unambiguous written agreement by a creditor if credit arrangements include deferred trade payments or creditor subordinations/repayment suspensions.
(8) Statement of all state, local, and Federal tax accounts, including special mandatory contributions, e.g., environmental superfund.
(9) Description and explanation of the financial effect of issues such as—
(i) Leases, deferred purchase arrangements, or patent or royalty arrangements;
(ii) Insurance, when relevant to the contract;
(iii) Contemplated capital expenditures, changes in equity, or contractor debt load;
(iv) Pending claims either by or against the contractor;
(v) Contingent liabilities such as guarantees, litigation, environmental, or product liabilities;
(vi) Validity of accounts receivable and actual value of inventory, as assets; and
(vii) Status and aging of accounts payable.
(10) Significant ratios such as—
(i) Inventory to annual sales;
(ii) Inventory to current assets;
(iii) Liquid assets to current assets;
(iv) Liquid assets to current liabilities;
(v) Current assets to current liabilities; and
(vi) Net worth to net debt.
(a) A contractor must be able to sustain a sufficient cash flow to perform the contract. When there is doubt regarding the sufficiency of a contractor's cash flow, the contracting officer should require the contractor to submit a cash flow forecast covering the duration of the contract.
(b) A contractor's inability of refusal to prepare and provide cash flow forecasts or to reconcile actual cash flow with previous forecasts is a strong indicator of serious managerial deficiencies or potential contract cost or performance problems.
(c) Single or one-time cash flow forecasts are of limited forecasting power. As such, they should be limited to preaward survey situations. Reliability of cash flow forecasts can be established only by comparing a series of previous actual cash flows with the corresponding forecasts and examining the causes of any differences.
(d) Cash flow forecasts must—
(1) Show the origin and use of all material amounts of cash within the entire business unit responsible for contract performance, period by period, for the length of the contract (or until the risk of a cash crisis ends); and
(2) Provide an audit trail to the data and assumptions used to prepare it.
(e) Cash flow forecasts can be no more reliable than the assumptions on which they are based. Most important of these assumptions are—
(1) Estimated amounts and timing of purchases and payments for materials, parts, components, subassemblies, and services;
(2) Estimated amounts and timing of payments of purchase or production of capital assets, test facilities, and tooling;
(3) Amounts and timing of fixed cash charges such as debt installments, interest, rentals, taxes, and indirect costs;
(4) Estimated amounts and timing of payments for projected labor, both direct and indirect;
(5) Reasonableness of projected manufacturing and production schedules;
(6) Estimated amounts and timing of billings to customers (including progress payments), and customer payments;
(7) Estimated amounts and timing of cash receipts from lenders or other credit sources, and liquidation of loans; and
(8) Estimated amount and timing of cash receipt from other sources.
(f) The contracting officer should review the assumptions underlying the cash flow forecasts. In determining whether the assumptions are reasonable and realistic, the contracting officer should consult with—
(1) The contractor;
(2) Government personnel in the areas of finance, engineering, production, cost, and price analysis; or
(3) Prospective supply, subcontract, and loan or credit sources.
(e)(2) Progress payments based on percentage or stage of completion are authorized only for contracts for construction (as defined in FAR 36.102), shipbuilding, and ship conversion, alteration, or repair. However, percentage or state of completion methods of measuring contractor performance may be used for performance-based payments in accordance with FAR Subpart 32.10.
(a) The contracting officer may establish provisional delivery payments to pay contractors for the costs of supplies and services delivered to and accepted by the Government under the following contract actions if undefinitized:
(1) Letter contracts contemplating a fixed-price contract.
(2) Orders under basic ordering agreements.
(3) Spares provisioning documents annexed to contracts.
(4) Unpriced equitable adjustments on fixed-price contracts.
(5) Orders under indefinite-delivery contracts.
(b) Provisional delivery payments shall be—
(1) Used sparingly;
(2) Priced conservatively; and
(3) Reduced by liquidating previous progress payments in accordance with the Progress Payments clause.
(c) Provisional delivery payments shall not—
(1) Include profit;
(2) Exceed funds obligated for the undefinitized contract action; or
(3) Influence the definitized contract price.
See 232.070 for offices to be consulted regarding financial matters with DoD.
(a)(2) When determining whether an offeror's financial condition is adequate security, see 232.072-2 and 232.072-3 for guidance. It should be noted that an offeror's financial condition may be sufficient to make the contractor responsible for award purposes, but may not be adequate security for commercial contract financing.
(d)
(f)
(i)
(ii)
(g)
(b)(2) If the contract contains foreign military sales requirements, each approval shall specify the amount of contract financing to be charged to each country's account.
(a) The use of guaranteed loans as a contract financing mechanism requires the availability of certain congressional authority. The DoD has not requested such authority in recent years, and none is now available.
(a)(9) The requirements of FAR subpart 32.4 do not apply to advertisements in high school and college publications for military recruitment efforts under 10 U.S.C. 503 when the contract cost does not exceed $500.
To ensure uniform application of this subpart (see FAR 32.402(e)(1)), the departmental/agency contract financing office shall prepare the documents required by FAR 32.409-1 (e) and (f).
(b) If an advance payment procedure is used without a special bank account, replace paragraph (a)(4) of the Findings, Determination, and Authorization for Advance Payments at FAR 32.410 with:
(4) The proposed advance payment clause contains appropriate provisions as security for advance payments. These provisions include a requirement that the outstanding advance payments will be liquidated from cost reimbursements as they become due the contractor. This security is considered adequate to protect the interest of the Government.
(a) Use the clause at 252.232-7000, Advance Payment Pool, in any contract that will be subject to the terms of an advance payment pool agreement with a nonprofit organization or educational institution. Normally, use the clause in all cost reimbursement type contracts with the organization or institution.
(b) Use the clause at 252.232-7001, Disposition of Payments, in contracts when payments under the contract are to be made by a disbursing office not designated in the advance payment pool agreement.
(c) Use the clause at 252.232-7005, Reimbursement of Subcontractor Advance Payments-DoD Pilot Mentor-Protege Program, when advance payments will be provided by the contractor to a subcontractor pursuant to an approved mentor-protege agreement (See subpart 219.71).
(a) An advance payment pool agreement—
(1) Is a means of financing the performance of more than one contract held by a single contractor;
(2) Is especially convenient for the financing of cost-type contracts with nonprofit educational or research institutions for experimental or research and development work when several contracts require financing by advance payments. When appropriate, pooled advance payments may also be used to finance other types of contracts held by a single contractor; and
(3) May be established—
(i) Without regard to the number of appropriations involved;
(ii) To finance contracts for one or more department(s) or contracting activity(ies); or
(iii) In addition to any other advance payment pool agreement at a single contractor location when it is more convenient or otherwise preferable to have more than one agreement.
(a)(i) The customary uniform progress payment rate for DoD contracts is 75 percent for large businesses, 90 percent for small businesses, and 95 percent for small disadvantaged businesses.
(ii) The progress payment rates applicable to foreign military sale requirements are the same rates applicable to DoD requirements.
(a) Unusual progress payment arrangements require the advance approval of the USD(A&T)DP. Contracting officers shall submit all unusual progress payment requests to the department or agency contract financing office for approval, coordination with the Contract Finance Committee (see 232.071), and submission to the USD(A&T)DP.
(b) The contracting officer may approve progress payments when the contract price exceeds the funds obligated under the contract; provided, the contract contains an appropriate Limitation of Funds clause. However, the contracting officer shall limit such payments to the lesser of—
(i) The applicable rate (i.e., the lower of the progress payment rate, the liquidation rate, or the loss-ratio adjusted rate); or
(ii) 100 percent of the funds obligated.
(b)(1) If the contractor is a small disadvantaged business, progress payments may be provided when the contract will involve $50,000 or more.
(a) Foreign military sale (FMS) progress payments apply to DoD acquisitions on behalf of foreign governments or international organizations (Section 22 of the Arms Export Control Act).
(b) FMS progress payments do not apply to acquisitions—
(1) For replenishing U.S. Government inventories or stocks; and
(2) Made under DoD cooperative logistic support arrangements.
(a) Use the clause at 252.232-7002, Progress Payments for Foreign Military Sales Acquisitions, in any contract that provides for progress payments and contains foreign military sale requirements.
(b) Use the clause at 252.232-7004, DoD Progress Payment Rates, in addition to the clauses prescribed at FAR 32.502-4.
(b)
(g)
(i) Except as provided in paragraph (g)(ii) of this subsection, the contracting officer shall prepare a supplementary analysis of the contractor's request for progress payments and calculate the loss ratio adjustment using the procedures in FAR 32.503-6(g).
(ii) The contracting officer may request the contractor to prepare the
(iii) To maintain an audit trail and permit verification of calculations, do not make the loss ratio adjustments by altering or replacing data on the contractor's original request for progress payment (SF 1443, Contractor's Request for Progress Payment, or computer generated equivalent).
(d) An administrative contracting officer (ACO) determination that the contractor's material management and accounting system conforms to the standard at 252.242-7004(f)(7) constitutes the contracting officer approval requirement of FAR 32.503-15(d). Prior to granting blanket approval of cost transfers between contracts, the ACO should determine that—
(i) The contractor retains records of the transfer activity that took place in the prior month;
(ii) The contractor prepares, at least monthly, a summary of the transfer activity that took place in the prior month; and
(iii) The summary report includes as a minimum, the total number and dollar value of transfers.
(b) Disbursing officers are those officials designated to make payments under a contract or to receive payments of amounts due under a contract. At installations where integrated accounting is in effect, the finance and accounting officer is a disbursing officer. The disbursing officer is responsible for determining the amount and collecting contract debts whenever overpayments or erroneous payments have been made. The disbursing officer also has primary responsibility when the amounts due and dates for payment are contained in the contract, and a copy of the contract has been furnished to the disbursing officer with notice to collect as amounts become due.
(c)(9)(vii) Upon transfer of a case to the contract financing office, the contracting officer shall close the debt record by reference to the date of transfer.
(a)(i) For contract debts resulting from other than a termination for default, the office which first determines an amount due, whether it be the contract administration office, the contracting office, the disbursing office, or the selling office/agency, shall—
(A) Make a demand for payment; and
(B) Provide a copy of the demand to the payment office cited in the contract.
(ii) For contract debts resulting from a termination for default, the contracting officer shall make the demand and direct the debtor to make such payment to the designated office.
(b)(3) The contracting office shall forward deferment requests to the contract financing office of the contracting department or agency for a decision on granting the deferment.
Only the department/agency contract financing offices (232.108(1)) are authorized to compromise debts covered by this subpart.
(a) The DoD Contract Finance Committee, with the approval of the USD(A&T)DP, may exempt the contracts in FAR 32.617(a) (2) through (5) and other contracts, in exceptional circumstances, from the administrative interest charges required by this subpart.
(a)(7) Other exceptions—
(A) Contracts for instructions of military or ROTC personnel at civilian schools, colleges, and universities;
(B) Basic agreements with telephone companies for communications services and facilities, and purchases under such agreements; and
(C) Transportation contracts with common carriers for common carrier services.
Disbursing officers will transfer responsibility for debt collection to departmental/agency contract financing offices in accordance with comptroller regulations. Notwithstanding the transfer of the debt collection responsibility, contracting officers shall continue to provide assistance as requested by the debt collection office.
(a) For those debts covered by this subpart, the department or agency which awarded the contract shall furnish the Department of Justice any claims in bankruptcy, insolvency, or in proceedings for reorganization or arrangement. Furnish claims which—
(1) Have been transferred to a contract financing office;
(2) Are on the way to a contract financing office at the inception of bankruptcy or insolvency proceedings;
(3) Are pending and not forwarded to a contract financing office at the inception of bankruptcy or insolvency proceedings; and
(4) Are the result of bankruptcy or insolvency proceedings.
(b) The contract financing office or other office designated within a department or agency will furnish proof of claims to the Department of Justice.
(c) The office of origin of a debt will provide, as soon as possible, information on a bankruptcy, insolvency, reorganization, or rearrangement to the office designated within a department/agency to receive this information.
(d) The information and proof of claim requirements in paragraphs (b) and (c) of this section do not apply to debts of less than $600.
Fixed-price contracts shall be fully funded except as permitted by 232.703-1.
(1) A fixed-price contract may be incrementally funded only if—
(i) The contract is funded with research and development appropriations;
(ii) Congress has otherwise incrementally appropriated program funds; or
(iii) The head of the contracting activity approves the use of incremental funding for either base services contracts or hazardous/toxic waste remediation contracts.
(2) Incrementally funded fixed-price contracts shall be fully funded as soon as practicable after full funding is available.
(b) The contracting officer may enter into a contract, exercise an option, or place an order under a contract for severable services for a period that begins in one fiscal year and ends in the next fiscal year if the period of the contract awarded, option exercised, or order placed does not exceed 1 year (10 U.S.C. 2410a).
Annual military construction appropriations acts restrict the use of funds appropriated by the acts for payments under cost-plus-fixed-fee contracts (see 216.306(c)).
(a) Upon receipt of the contractor's notice under paragraph (c) of the
(1) Allotting additional funds for continued performance and increasing the Government's limitation of obligation in a specified amount;
(2) Terminating the contract; or
(3) Considering whether to allot additional funds; and
(i) The contractor is entitled by the contract terms to stop work when the Government's limitation of obligation is reached; and
(ii) Any costs expended beyond the Government's limitation of obligation are at the contractor's risk.
(b) Upon learning that the contract will receive no further funds, the contracting officer shall promptly give the contractor written notice of the Government's decision and terminate for the convenience of the Government.
(c) The contracting officer shall ensure that, in accordance with paragraph (b) of the clause at 252.232-7007, Limitation of Government's Obligation, sufficient funds are allotted to the contract to cover the total amount payable to the contractor in the event of termination for the convenience of the Government.
Use the clause at 252.232-7007, Limitation of Government's Obligation, in solicitations and resultant incrementally funded fixed-price contracts. The contracting officer may revise the contractor's notification period, in paragraph (c) of the clause, from “ninety” to “thirty” or “sixty” days, as appropriate.
(b) Only contracts for personal services may prohibit the assignment of claims.
(d) Pursuant to Section 3737(e) of the Revised Statutes (41 U.S.C. 15), and in accordance with Presidential delegation dated October 3, 1995, Secretary of Defense delegation dated February 5, 1996, and Under Secretary of Defense for Acquisition and Technology delegation dated February 23, 1996, the Director of Defense Procurement determined on May 10, 1996, that a need exists for DoD to agree not to reduce or set off any money due or to become due under the contract when the proceeds under the contract have been assigned in accordance with the Assignment of Claims provision of the contract. This determination was published in the
(b) The assignee shall forward—
(i) To the administrative contracting officer (ACO), a true copy of the instrument of assignment and an original and three copies of the notice of assignment. The ACO shall acknowledge receipt by signing and dating all copies of the notice of assignment and shall—
(A) File the true copy of the instrument of assignment and the original of the notice in the contract file;
(B) Forward two copies of the notice to the disbursing officer of the payment office cited in the contract;
(C) Return a copy of the notice to the assignee; and
(D) Advise the contracting officer of the assignment.
(ii) To the surety or sureties, if any, a true copy of the instrument of assignment and an original and three copies of the notice of assignment. The surety shall return three acknowledged copies of the notice to the assignee, who shall forward two copies to the disbursing officer designated in the contract.
(iii) To the disbursing officer of the payment office cited in the contract, a true copy of the instrument of assignment and an original and one copy of
(a)(1) Use the clause at 252.232-7008, Assignment of Claims (Overseas), instead of the clause at FAR 52.232-23, Assignment of Claims, in solicitations and contracts when contract performance will be in a foreign country.
(2) Use Alternate I with the clause at FAR 52.232-23, Assignment of Claims, unless otherwise authorized under 232.803(d).
DoD policy is to assist small disadvantaged business concerns by paying them as quickly as possible after invoices are received and before normal payment due dates established in the contract (see 232.905(2)).
(1) In most cases, Government acceptance or approval can occur within the 7 day constructive acceptance period specified in the FAR Prompt Payment clauses. Government payment of construction progress payments can, in most cases, be made within the 14 day period allowed by the Prompt Payment for Construction Contracts clause. While the contracting officer may specify a longer period because the period specified in the contract is not reasonable or practical, such change should be coordinated with the Government offices responsible for acceptance or approval and for payment. Reasons for specifying a longer period include but are not limited to: the nature of the work or supplies or services, inspection or testing requirements, shipping and acceptance terms, and resources available at the acceptance activity. A constructive acceptance period of less than the cited 7 or 14 days is not authorized.
(2) Designated payment offices are encouraged to pay small disadvantaged business (SDB) concerns as quickly as possible after invoices are received and before normal payment due dates established in the contract. The restrictions of FAR 32.903 prohibiting early payment do not apply to invoice payments made to SDBs. Contractors shall not, however, be entitled to interest penalties if invoice payments are not made before the normal payment due dates established in the contract.
(f)(6) DoD Manual 4000.25-5-M, Military Standard Contract Administration Procedures (MILSCAP), authorizes electronic notification to the payment office of Government acceptance or approval, as appropriate.
(a)(i) DoD policy is to make contract financing payments as quickly as possible. Generally, the contracting officer shall insert the standard due dates of 7 days for progress payments and 14 days for interim payments on cost type contracts in paragraph (b)(1) of the Prompt Payment clauses at FAR 52.232-25, 52.232-26, and 52.232-27.
(ii) The contracting officer should coordinate payment terms with offices that will be involved in the payment process to ensure that terms specified can be met. Where justified, the contracting officer may insert a due date greater than but not less than the standard. In determining payment terms, consider—
(A) Geographical separation;
(B) Workload;
(C) Contractor ability to submit a proper request; and
(D) Other factors that could affect timing of payment.
(d) The contracting officer shall use the following standard prompt payment terms for performance-based payments: The contractor entitlement
(c)
(b)(2) If the contract contains foreign military sales requirements, each approval shall specify the amount of contract financing to be charged to each country's account.
41 U.S.C. 421 and 48 CFR chapter 1.
When it would be helpful in reviewing the current claim, the contracting officer should get information on claims previously filed by the contractor with other contracting officers.
See 10 U.S.C. 2410(b) for limitations on Congressionally directed payment of a claim under the Contract Disputes Act of 1978, a request for equitable adjustment to contract terms, or a request for relied under Pub. L. 85-804.
DFARS 243.105(a) limits contracting officer authority.
Use Alternate I of the clause at FAR 52.233-1, Disputes, when—
(1) The acquisition is for—
(i) Aircraft
(ii) Spacecraft and launch vehicles
(iii) Naval vessels
(iv) Missile systems
(v) Tracked combat vehicles
(vi) Related electronic systems;
(2) The contracting officer determines that continued performance is—
(i) Vital to the national security, or
(ii) Vital to the public health and welfare; or
(3) The head of the contracting activity determines that continued performance is necessary pending resolution of any claim that might arise under or be related to the contract.
Use the clause at 252.233-7001, Choice of Law (Overseas), in solicitations and contracts when contract performance will be outside of the United States, it possessions, and Puerto Rico, unless otherwise provided for in a government-to-government agreement.
41 U.S.C. 421 and 48 CFR chapter 1.
DoD 5000.1, Defense Acquisition, and DoD 5000.2-R, Mandatory Procedures for Major Defense Acquisition Programs (MDAPs) and Major Automated Information System (MAIS) Acquisition Programs, contain the DoD implementation of OMB Circular A-109.
When an offeror provides an earned value management system (EVMS) plan as part of its proposal in accordance with paragraph (b) of the provision at 252.234-7000, the contracting officer shall forward a copy of the plan to the cognizant administrative contracting officer (ACO). The procuring contracting officer shall obtain the assistance of the ACO in determining the adequacy of the proposed EVMS plan.
When the Government requires contractor compliance with DoD earned value management system criteria—
(a) Use the provision at 252.234-7000, Notice of Earned Value Management System, in solicitations; and
(b) Use the clause at 252.234-7001, Earned Value Management System, in solicitations and contracts.
41 U.S.C. 421 and 48 CFR chapter 1.
As defined in DoD 7000.14-R, Financial Management Regulations, and as used in this part—
(a)
(1) Subsequent applied research (exploratory development); and advanced technology developments in Defense-related technologies; and
(2) New and improved military functional capabilities in areas such as communications, detection, tracking, surveillance, propulsion, mobility, guidance and control, navigation, energy conversion, materials and structures, and personnel support.
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(1) Basic research.
(2) Applied research.
(3) Technology development.
(4) Demonstration/validation.
(5) Engineering and manufacturing development.
(6) Operational system development.
(b)(i) Do not award a fixed-price type contract for a development program effort unless—
(A) The level of program risk permits realistic pricing;
(B) The use of a fixed-price type contract permits an equitable and sensible allocation of program risk between the Government and the contractor; and
(C) A written determination that the criteria of paragraphs (b)(i)(A) and (B) of this section have been met is executed—
(ii) Obtain USD (A&T) approval of the Government's prenegotiation position before negotiations begin, and obtain USD (A&T) approval of the negotiated agreement with the contractor before the agreement is executed, for any action that is—
(A) An increase of more than $250 million in the price or ceiling price of a fixed-price type development contract, or a fixed-price type contract for the lead ship of a class;
(B) A reduction in the amount of work under a fixed-price type development contract or a fixed-price type contract for the lead ship of a class, when the value of the work deleted is $100 million or more; or
(C) A repricing of fixed-price type production options to a development contract, or a contract for the lead ship of a class, that increases the price or ceiling price by more than $250 million for equivalent quantities.
(iii) Notify the USD (A&T) of an intent not to exercise a fixed-price production option on a development contract for a major weapon system reasonably in advance of the expiration of the option exercise period.
(a) This subsection implements 10 U.S.C. 2525(d).
(b) Award all contracts under the Manufacturing Technology Program (see DoDI 4200.15, Manufacturing Technology Program) using competitive procedures.
(c)(1) Use a cost-sharing arrangement (see FAR 16.303) for contracts awarded under the Manufacturing Technology Program, unless the USD (A&T) makes a determination that the contract is for a program that—
(i) Is not likely to have any immediate and direct commercial application;
(ii) Is of sufficiently high risk to discourage cost sharing by non-Federal Government sources; or
(iii) Will be carried out by an institution of higher education.
(2) Document the contract file with the rationale for any determination made in accordance with paragraph (c)(1) of this subsection.
(d) For each contract entered into on a cost-sharing basis, determine the ratio of contractor cost to Government cost by competitive procedures, i.e., each offeror must propose the ratio as part of its proposal. If only one offer is received, negotiate the ratio that provides the best value to the Government.
(g) To ensure that prospective offerors fully understand the details of the work, the contracting officer may include the Government's estimate of the man-year effort under a research contract.
(b) The Defense Technical Information Center (DTIC) is responsible for collecting all scientific or technological observations, findings, recommendations, and results derived from DoD endeavors, including both in-house and contracted efforts. The DTIC has eligibility and registration requirements for use of its services. Requests for eligibility and registration information should be addressed to DTIC-BCS, 8725 John J. Kingman Road, Suite 0944, Fort Belvoir, VA 22060-0944.
(b)
(3) When using a basic agreement—
(i) Incorporate it by reference in section I of the contract; and
(ii) Incorporate any special clause requirements in section H.
(a)
(1)
(i) Real property, other than land; and
(ii) Includes structures, alterations, and improvements, acquired for the purpose of conducting scientific research under contracts with departments and agencies of the DoD.
(2)
(i) For construction or acquisition of buildings, structures, and real property, other than land; and
(ii) Where the allowance is computed at an annual rate exceeding the rate which normally would be allowed under FAR subpart 31.3.
(b)
(2) Decisions to provide a special use allowance must be made on a case-by-case basis, using the criteria in paragraph (c) of this subsection.
(c)
(1) The research facility is essential to the performance of DoD contracts;
(2) Existing facilities, either Government or nongovernment, cannot meet program requirements practically or effectively;
(3) The proposed agreement for special use allowances is a sound business arrangement;
(4) The Government's furnishing of Government-owned facilities is undesirable or impractical; and
(5) The proposed use of the research facility is to conduct essential Government research which requires the new or expanded facilities.
(d)
(i) Compare the needs of DoD and of the institution for the research facility to determine the amount of the special use allowance;
(ii) Consider rental costs for similar space in the area where the research facility is or will be located to establish the annual special use allowance;
(iii) Do not include or allow—
(A) The costs of land; or
(B) Interest charges on capital;
(iv) Do not include maintenance, utilities, or other operational costs;
(v) The period of allowance generally will be—
(A) At least ten years; or
(B) A shorter period if the total amount to be allowed is less than the construction or acquisition cost for the research facility;
(vi) Generally, provide for allocation of the special use allowance equitably among the Government contracts using the research facility;
(vii) Special use allowances apply only in the years in which the Government has contracts in effect with the institution. However, if in any given year there is a reduced level of Government research effort which results in the special use allowance being excessive compared to the Government research funding, a separate special use allowance may be negotiated for that year;
(viii) Special use allowances may be adjusted for the period before construction is complete if the facility is partially occupied and used for Government research during that period.
(2) A special use allowance may be based on either total or partial cost of construction or acquisition of the research facility.
(i) When based on total cost neither the normal use allowance nor depreciation will apply—
(A) During the special use allowance period; and
(B) After the educational institution has recovered the total construction or acquisition cost from the Government or other users.
(ii) When based on partial cost, normal use allowance and depreciation—
(A) Apply to the balance of costs during the special use allowance period to the extent negotiated in the special use allowance agreement; and
(B) Do not apply after the special use allowance period, except for normal use allowance applied to the balance.
(3) During the special use allowance period, the research facility—
(i) Shall be available for Government research use on a priority basis over nongovernment use; and
(ii) Cannot be put to any significant use other than that which justified the special use allowance, unless the head of the contracting activity, who approved the special use allowance, consents.
(4) The Government will pay only an allocable share of the special use allowance when the institution makes any substantial use of the research facility for parties other than the Government during the period when the special use allowance is in effect.
(5) In no event shall the institution be paid more than the acquisition costs.
To help achieve the goals of Section 1207 of Public Law 99-661 (see part 226), contracting officers shall—
(1) Whenever practicable, reserve discrete or severable areas of research interest contained in broad agency announcements for exclusive competition among historically black colleges and universities and minority institutions;
(2) Indicate such reservation—
(i) In the broad agency announcement; and
(ii) In the announcement synopsis (see 205.207(d)(v)).
(a)
(2) No DoD fiscal year 1992 or later funds may be obligated or expended to finance activities of a DoD Federally Funded Research and Development Center (FFRDC) if a member of its
(c)(4) DoD-sponsoring FFRDCs that function primarily as research laboratories (C3I Laboratory operated by the Institute for Defense Analysis, Lincoln Laboratory operated by Massachusetts Institute of Technology, and Software Engineering Institute) may respond to solicitations and announcements for programs which promote research, development, demonstration, or transfer of technology (Section 217, Public Law 103-337).
(a) Under 10 U.S.C. 2354, and if authorized by the Secretary concerned, contracts for research and/or development may provide for indemnification of the contractor or subcontractors for—
(1) Claims by third persons (including employees) for death, bodily injury, or loss of or damage to property; and
(2) Loss of or damage to the contractor's property to the extent that the liability, loss, or damage—
(i) Results from a risk that the contract defines as “unusually hazardous;”
(ii) Arises from the direct performance of the contract; and
(iii) Is not compensated by insurance or other means.
(b) Clearly define the specific unusually hazardous risks to be indemnified. Submit this definition for approval with the request for authorization to grant indemnification. Include the approved definition in the contract.
These contracts may provide for indemnification under the authority of both 10 U.S.C. 2354 and Public Law 85-804. Public Law 85-804 will apply only to work to which 10 U.S.C. 2354 does not apply. Actions under Public Law 85-804 must also comply with FAR subpart 50.4.
When the contractor is to be indemnified in accordance with 235.070-1, use either—
(a) The clause at 252.235-7000, Indemnification Under 10 U.S.C. 2354—Fixed Price; or
(b) The clause at 252.235-7001, Indemnification Under 10 U.S.C. 2354—Cost-Reimbursement, as appropriate.
(a) Use the clause at 252.235-7002, Animal Welfare, or one substantially the same, in solicitations and contracts awarded in the United States, its possessions, and Puerto Rico involving research on live vertebrate animals.
(b) Use the clause at 252.235-7003, Frequency Authorization, in solicitations and contracts for developing, producing, constructing, testing, or operating a device requiring a frequency authorization.
(c) Use the clause at 252.235-7010, Acknowledgement of Support and Disclaimer, in solicitations and contracts for research and development.
(d) Use the clause at 252.235-7011, Final Scientific or Technical Report, in solicitations and contracts for research and development.
This subpart prescribes streamlined procedures for acquiring research and
As used in this subpart—
(a)
(1) A contract that results from use of the research and development streamline solicitation; or
(2) Any other contract prepared in the standard format published at the RDSS/C website.
(b)
(c)
(a) Except as provided in paragraph (b) of this section, consider using the procedures in this subpart for acquisitions that—
(1) Will result in the award of a cost-reimbursement contract; and
(2) Meet the criteria for research and development as defined in 235.001 and FAR 35.001.
(b) Do not use the procedures in this subpart for—
(1) Contracts to be performed outside the United States and Puerto Rico;
(2) Contracts denominated in other than U.S. dollars;
(3) Acquisitions using simplified acquisition procedures;
(4) Acquisition of engineering and manufacturing development, management support, or operational system development, as defined in 235.001; or
(5) Acquisition of laboratory supplies and equipment, base support services, or other services identified in paragraphs (a) through (h) of the definition of “service contract” at FAR 37.101.
(c) Regardless of whether the RDSS is used, the RDSC may be used for any acquisition that meets the criteria in paragraph (a) of this section.
The procedures and standard format are published at the RDSS/C website. The RDSS/C Managing Committee is responsible for updating the website.
(a)
(1) The information required by FAR 5.207; and
(2) Statements that—
(i) A paper solicitation will not be issued; and
(ii) The solicitation will be published at the RDSS/C website.
(b)
(i) Shall be published in its entirety at the RDSS/C website;
(ii) Shall include the applicable version number of the RDSS standard format; and
(iii) Shall incorporate by reference the appropriate terms and conditions of the RDSS standard format.
(2) To encourage preparation of better cost proposals, consider allowing a delay between the due dates for technical and cost proposals.
(c)
(a) Evaluate proposals in accordance with the evaluation factors set forth in the RDSS.
(b)
(i) Standard Form (SF) 33, Solicitation, Offer and Award, or SF 26, Award/Contract; and
(ii) Sections B through J of the RDSS or other solicitation, with applicable fill-in information inserted.
(2) When an RDSC is awarded to an educational or nonprofit institution—
(i) Remove provisions and clauses that do not apply to educational or nonprofit institutions; and
(ii) As necessary, insert appropriate replacement provisions and clauses.
Use of FAR and DFRAS provisions and clauses, and nonstandard provisions and clauses approved for agency use, that are not in the RDSS/C standard format, shall be approved in accordance with agency procedures.
41 U.S.C. 421 and 48 CFR chapter 1.
(1) A-E means architect-engineer.
(2)
(i) Is responsible for the architectural, engineering, and other related technical aspects of the planning, design, and construction of facilities; and
(ii) Receives its technical guidance from the Army Office of the Chief of Engineers, Naval Facilities Engineering Command, or Air Force Directorate of Civil Engineering.
(3)
(4)
(5)
(a)
(c)
(A) The central data base—
(
(
(B) For computer access to the files, contact the North Pacific Division for user log-on and procedures.
(2) Use performance records when making responsibility determinations under FAR 9.1.
(A) For each contract expected to exceed $1,000,000, retrieve all performance records on file in the central data base for all prospective contractors that have a reasonable chance of being selected for award. The central data base will provide—
(
(
(
(B) Consider using the performance records in the data base for lower value contracts and to assess a contractor's performance record for reasons other than an award decision, such as subcontractor approval and awards for excellence.
(c)(i) Designate the Government estimate as “For Official Use Only,” unless the information is classified. If it is, handle the estimate in accordance with security regulations.
(ii) For sealed bid acquisitions—
(A) File a sealed copy of the Government estimate with the bids. (In the case of two-step acquisitions, this is done in the second step.)
(B) After the bids are read and recorded, remove the “For Official Use Only” designation and read and record the estimate as if it were a bid, in the same detail as the bids.
Additional price ranges are—
(i) Between $10,000,000 and $25,000,000;
(ii) Between $25,000,000 and $100,000,000;
(iii) Between $100,000,000 and $250,000,000;
(iv) Between $250,000,000 and $500,000,000; and
(v) Over $500,000,000.
See 212.204 for instructions on use of liquidated damages.
(a) 10 U.S.C. 2858 requires agency head approval to expedite the completion date of a contract funded by a Military Construction Appropriations Act, if additional costs are involved. This approval authority may not be redelegated. The approval authority must—
(1) Certify that the additional expenditures are necessary to protect the National interest; and
(2) Establish a reasonable completion date for the project.
(b) The contracting officer may approve an expedited completion date if no additional costs are involved.
Annual military construction appropriations acts restrict the use of cost-plus-fixed-fee contracts (see 216.306(c)).
(a) Prequalification procedures may be used when necessary to ensure timely and efficient performance of critical construction projects. Prequalification—
(1) Results in a list of sources determined to be qualified to perform a specific construction contract; and
(2) Limits offerors to those with proven competence to perform in the required manner.
(b) The head of the contracting activity must—
(1) Authorize the use of prequalification by determining, in writing, that a construction project is of an urgency or complexity that requires prequalification; and
(2) Approve the prequalification procedures.
(c) For small businesses, the prequalification procedures must require the qualifying authority to—
(1) Request a preliminary recommendation from the appropriate Small Business Administration regional office, if the qualifying authority believes a small business is not responsible;
(2) Permit the small business to submit a bid or proposal if the preliminary recommendation is that the small business is responsible; and
(3) Follow the procedures in FAR 19.6, if the small business is in line for award and is found nonresponsible.
Use head of the contracting activity approved procedures for preparing and using network analysis systems, whether contractor prepared, or Government prepared.
(a) In accordance with Section 112 of Pub. L. 105-45, military construction contracts funded with military construction appropriations, that are estimated to exceed $1,000,000 and are to be performed in the United States territories and possessions in the Pacific and on Kwajalein Atoll, or in countries bordering the Arabian Gulf, shall be awarded only to United States firms, unless—
(1) The lowest responsive and responsible offer of a United States firm exceeds the lowest responsive and responsible offer of a foreign firm by more than 20 percent; or
(2) The contract is for military construction on Kwajalein Atoll and the lowest responsive and responsible offer is submitted by a Marshallese firm.
(b)When a technical working agreement with a foreign government is required for a construction contract—
(1) Consider inviting the Army Office of the Chief of Engineers, or the Naval Facilities Engineering Command to participate in the negotiations.
(2) The agreement should, as feasible and where not otherwise provided for in other agreements, cover all elements necessary for the construction that are required by laws, regulations, and customs of the United States and the foreign government, including—
(i) Acquisition of all necessary rights;
(ii) Expeditious, duty-free importation of labor, material, and equipment;
(iii) Payment of taxes applicable to contractors, personnel, materials, and equipment;
(iv) Applicability of workers’ compensation and other labor laws to citizens of the U.S., the host country, and other countries;
(v) Provision of utility services;
(vi) Disposition of surplus materials and equipment;
(vii) Handling of claims and litigation; and
(viii) Resolution of any forseeable problems that can be appropriately included in the agreement.
(a) If it appears that sufficient funds may not be available for all the desired construction features, consider using a bid schedule with—
(1) A first or base bid item covering the work generally as specified; and
(2) A list of priorities that contains one or more additive or deductive bid items which progressively add or omit specified features of the work in a stated order of priority. (Normally, do not mix additive and deductive bid items in the same solicitation.)
(b) Before opening the bids, record in the contract file the amount of funds available for the project.
(c) Determine the low bidder and the bid items to be awarded as follows—
(1) Use the recorded amount of available funds to determine the low bidder, which will be the bidder that—
(i) Is otherwise eligible for award; and
(ii) Offers the lowest aggregate amount for the first or base bid item, plus or minus (in order of listed priority), those additive or deductive bid items that provide the most features within the funds available.
(2) Evaluate all bids, including those using the procedures in 219.7203, on the basis of the same additive or deductive bid items.
(i) If adding another item from the bid schedule list of priorities would make the award exceed the available funds, skip that item and go to the next item from the list of priorities.
(ii) Add the next item if an award can be made that includes the item and is still within the available funds.
(3) Use the list of priorities only to determine the low bidder. After determining the low bidder, an award may be made on any combination if—
(i) It is in the best interests of the Government;
(ii) Funds are available at time of award; and
(iii) The low bidder's price for the combination is less than the price offered by any other responsive, responsible bidder.
(1) For cost-plus-fixed-fee contracts, negotiate the fee for a prime contractor using departmental procedures approved by the Assistant Secretary of Defense (Production and Logistics).
(2) For cost-plus-incentive-fee contracts, negotiate the target fee for a prime contractor using the criteria and fee schedule in departmental procedures to determine—
(i) The reasonableness of the target cost;
(ii) The maximum and minimum fees to be established; and
(iii) The fee adjustment formula.
(a) Use the following clauses in all fixed-price construction solicitations and contracts—
(1) 252.236-7000, Modification Proposals-Price Breakdown; and
(2) 252.236-7001, Contract Drawings, Maps, and Specifications.
(b) Use the following provisions and clauses in fixed-price construction contracts and solicitations as applicable—
(1) 252.236-7002, Obstruction of Navigable Waterways, when the contract will involve work near or on navigable waterways.
(2) When the head of the contracting activity has approved use of a separate bid item for mobilization and preparatory work, use either—
(i) 252.236-7003, Payment for Mobilization and Preparatory Work. Use this clause for major construction contracts that require—
(A) Major or special items of plant and equipment; or
(B) Large stockpiles of material which are in excess of the type, kind, and quantity which would be normal for a contractor qualified to undertake the work; or
(ii) 252.236-7004, Payment for Mobilization and Demobilization. Use this clause for contracts involving major mobilization expense, or plant equipment and material (other than the situations covered in paragraph (b)(2)(i) of this section) made necessary by the location or nature of the work.
(A) Generally, allocate 60 percent of the lump sum price in paragraph (a) of the clause to the cost of mobilization.
(B) Vary this percentage to reflect the circumstances of the particular contract, but in no event should mobilization exceed 80 percent of the payment item.
(3) 252.236-7005, Airfield Safety Precautions, when construction will be performed on or near airfields.
(4) 252.236-7006, Cost Limitation, if the solicitation's bid schedule contains one or more items subject to statutory
(5) 252.236-7007, Additive or Deductive Items, if the procedures in 236.303-70 are being used.
(6) 252.236-7008, Contract Prices—Bidding Schedule, if the contract will contain only unit prices for some items.
(c) Use the following provisions in solicitations for military construction contracts that are funded with military construction appropriations and are estimated to exceed $1,000,000:
(1) 252.236-7010, Overseas Military Construction—Preference for United States Firms, when contract performance will be in a United States territory or possession in the Pacific or in a country bordering the Arabian Gulf.
(2) 252.236-7012, Military Construction on Kwajalein Atoll—Evaluation Preference, when contract performance will be on Kwajalein Atoll.
(d) Also see 246.710(4) for an additional clause applicable to construction contracts to be performed in Germany.
(1) 10 U.S.C. 2807(b) requires notice to Congress 21 days before the initial obligation of funds if a contract is for—
(i) A-E services or construction design for military construction, military family housing, or restoration or replacement of damaged or destroyed facilities; and
(ii) An estimated total contract price of $500,000 or more.
(2) During the 21 day period, synopsis of the proposed contract action and administrative actions leading to the award may be started.
(a)(i) Establish the evaluation criteria before making the public announcement required by FAR 5.205(c) and include the criteria and their relative order of importance in the announcement. The evaluation criteria should be project specific. Use the information in the DD Form 1391, FY—— Military Construction Project Data, when available, and other pertinent project data in preparing the evaluation criteria.
(4) Use performance evaluation data from the central data base identified in 236.201.
(6) The primary factor in A-E selection is the determination of the most highly qualified firm. Also consider secondary factors such as geographic proximity and equitable distribution of work, but do not attribute greater significance to the secondary factors than to qualifications and past performance. Do not reject the overall most highly qualified firm solely in the interest of equitable distribution of contracts.
(A) Consider the volume of work awarded by DoD during the previous 12 months. In considering equitable distribution of work among A-E firms, include small business concerns; historically black colleges and universities and minority institutions; firms that have not had prior DoD contracts; and small disadvantaged business concerns and joint ventures with small disadvantaged business participants if the Standard Industrial Classification Major Group of the acquisition is one in which use of a price evaluation adjustment is currently authorized (see FAR 19.201(b)).
(
(
(B) Consider as appropriate superior performance evaluations on recently completed DoD contracts.
(C) Consider the extent to which potential contractors identify and commit to small business, to small disadvantaged business (SDB) if the Standard Industrial Classification Major Group of the subcontracted effort is one in which use of an evaluation factor or subfactor for participation of SDB concerns is currently authorized (see FAR 19.210(b)), and to historically black college or university and minority institution performance as subcontractors.
(a) Preselection boards may be used to identify to the section board the qualified firms that have a reasonable chance of being considered as most highly qualified by the selection board.
(a) The selection authority shall be at a level appropriate for the dollar value and nature of the proposed contract.
(c) A finding that some of the firms on the selection report are unqualified does not preclude approval of the report, provided that a minimum of three most highly qualified firms remains. The reasons for finding a firm or firms unqualified must be recorded.
In accordance with Section 111 of Public Law 104-32 and similar sections in subsequent military construction appropriations acts, A-E contracts funded by military construction appropriations that are estimated to exceed $500,000 and are to be performed in Japan, in any North Atlantic Treaty Organization member country, or in countries bordering the Arabian Gulf, shall be awarded only to United States firms or to joint ventures of United States and host nation firms.
(a)
(2) Prepare a separate performance evaluation after actual construction of the project. Ordinarily, the evaluating official should be the person most familiar with the A-E's performance.
(c) Distribution and use of performance reports.
(i) Forward each performance report to the central data base identified in 236.201(c) after completing the review. The procedures in 236.201 also apply to A-E contracts.
(ii) File and use the DD Form 2631, Performance Evaluation (Architect-Engineer), in a manner similar to the SF 254, Architect-Engineer and Related Services Questionnaire.
(a) 10 U.S.C. 4540, 7212, and 9540 limit the contract price (or fee) for A-E services for the preparation of designs, plans, drawings, and specifications to six percent of the project's estimated construction cost.
(b) The six percent limit also applies to contract modifications, including modifications involving—
(1) Work not initially included in the contract. Apply the six percent limit to the revised total estimated construction cost.
(2) Redesign. Apply the six percent limit as follows—
(i) Add the estimated construction cost of the redesign features to the original estimated construction cost;
(ii) Add the contract cost for the original design to the contract cost for redesign; and
(iii) Divide the total contract design cost by the total estimated construction cost. The resulting percentage may not exceed the six percent statutory limitation.
(c) The six percent limit applies only to that portion of the contract (or modification) price attributable to the preparation of designs, plans, drawings, and specifications. If a contract or modification also includes other services, the part of the price attributable to the other services is not subject to the six percent limit.
(a)(1) Use the clause at 252.236-7009, Option for Supervision and Inspection Services, in solicitations and contracts for A-E services when—
(i) The contract will be fixed price; and
(ii) Supervision and inspection services by the A-E may be required during construction.
(2) Include the scope of such services in appendix A of the contract.
(b) Use the provision at 252.236-7011, Overseas Architect-Engineer Services—Restriction to United States Firms, in solicitations for A-E contracts that are—
(1) Funded with military construction appropriations;
(2) Estimated to exceed $500,000; and
(3) To be performed in Japan, in any North Atlantic Treaty Organization member country, or in countries bordering the Arabian Gulf.
(c) Do not use Optional Form 347, Order for Supplies and Services, (see 213.505-2).
41 U.S.C. 421 and 48 CFR chapter 1.
(a) Under 10 U.S.C. 2465, the DoD is prohibited for entering into contracts for the performance of firefighting or security-guard functions at any military installation or facility unless—
(1) The contract is to be carried out at a location outside the United States (to include any U.S. commonwealth, territory, or possession) at which members of the armed forces would have to be used for the performance of firefighting or security-guard functions at the expense of unit readiness;
(2) The contract will be carried out on a Government-owned but privately operated installation; or
(3) The contract (or renewal of a contract) is for the performance of a function under contract on September 24, 1983.
(b) Under Section 2907 of Public Law 103-160, this prohibition does not apply to services at installations being closed (see subpart 237.74).
(b)(i) Authorization to acquire the personal services of experts and consultants is included in Public Law 101-165, section 9002. Personal service contracts for expert and consultant services must also be authorized by a determination and findings (D&F) in accordance with department/agency regulations.
(A) Generally, the D&F should authorize one contract at a time; however, an authorizing official may issue a blanket D&F for classes of contracts.
(B) Prepare each D&F in accordance with FAR 1.7 and include a determination that—
(
(
(
(
(
(
(
(ii) Personal services contracts for health care are authorized by 10 U.S.C. 1091.
(A) This authority may be used to acquire—
(
(
(B) Sources for personal services contracts with individuals under the authority of 10 U.S.C. 1091 shall be selected through the procedures in this section. These procedures do not apply to contracts awarded to business entities other than individuals. Selections made using the procedures in this section are exempt by statute from FAR part 6 competition requirements (see 206.001(b)).
(C) Approval requirements for—
(
(
(D) The contracting officer must ensure that the requiring activity provides a copy of the approval with the purchase request.
(E) The contracting officer must provide adequate advance notice of contracting opportunities to individuals residing in the area of the facility. The notice must include the qualification criteria against which individuals responding will be evaluated. The contracting officer shall solicit applicants through at least one local publication which serves the area of the facility. Acquisitions under this section for personal service contracts are exempt from the posting and synopsis requirements of FAR part 5.
(F) The contracting officer shall provide the qualifications of individuals responding to the notice to the commander of the facility for evaluation and ranking in accordance with agency procedures. Individuals must be considered solely on the basis of the professional qualifications established for the particular personal services being acquired and the Government's estimate of reasonable rates, fees, or other costs. The commander of the facility shall provide the contracting officer with rationale for the ranking of individuals, consistent with the required qualifications.
(G) Upon receipt from the facility of the ranked listing of applicants, the contracting officer shall either—
(
(
(H) In the event only one individual responds to an advertised requirement, the contracting officer is authorized to negotiate the contract award. In this case, the individual must still meet the minimum qualifications of the requirement and the contracting officer must be able to make a determination that the price is fair and reasonable.
(I) If a fair and reasonable price cannot be obtained from a qualified individual, the requirement should be canceled and acquired using procedures other than those set forth in this section.
(f)(i) Payment to each expert or consultant for personal services under 5 U.S.C. 3109 shall not exceed the highest rate fixed by the Classification Act Schedules for grade GS-15 (see 5 CFR 304.105(a)).
(ii) The contract may provide for the same per diem and travel expenses authorized for a Government employee, including actual transportation and per diem in lieu of subsistence for travel between home or place of business and official duty station.
(iii) Coordinate with the civilian personnel office on benefits, taxes, personnel ceilings, and maintenance of records.
(1) Personal service contracts for expert or consultant services shall not exceed 1 year. The nature of the duties must be—
(i) Temporary (not more than 1 year); or
(ii) Intermittent (not cumulatively more than 130 days in 1 year).
(2) The contracting officer may enter into a contract, exercise an option, or place an order under a contract for severable services for a period that begins in one fiscal year and ends in the next fiscal year if the period of the contract awarded, option exercised, or order placed does not exceed 1 year (10 U.S.C. 2410a).
See 237.102-70b for prohibition on contracting for firefighting or security-guard functions.
“Advisory and assistance services” means, instead of the definition at FAR 37.201, services in the following three major categories when provided by nongovernmental sources (10 U.S.C. 2212):
(1)
(i) Provide engineering or technical support, assistance, advice, or training for the efficient and effective management and operation of organizations, activities, or systems;
(ii) Are closely related to the basic responsibilities and mission of the using organization; and
(iii) Include efforts that support or contribute to improved organization or program management, logistics management, project monitoring and reporting, data collection, budgeting, accounting, auditing, and administrative or technical support for conferences and training programs.
(2)
(i) Provide organized, analytic assessments to understand or evaluate complex issues to improve policy development, decision-making, management, or administration;
(ii) Result in documents containing data or leading to conclusions or recommendations; and
(iii) May include databases, models, methodologies, and related software created in support of a study, analysis, or evaluation.
(3)
(1) Every contract for engineering and technical services, alone or as part of an end item, shall—
(i) Show those services as a separately priced line item;
(ii) Contain definitive specifications for the services; and
(iii) Show the work-months involved.
(2) Agency heads may authorize personal service contracts for engineering and technical services provided on site at Defense locations to meet an unusual essential mission need. The authorization will be for an interim period only.
(a)
(2) DoDD 7600.2, Audit Policies, provides DoD audit policies.
(3) DoDI 7600.6, Audit of Nonappropriated Fund Instrumentalities and Related Activities, provides guidance to audit organizations for audits of nonappropriated fund organizations.
(4) DoD 7600.7-M, Internal Audit Manual, chapter 20, provides policy and guidance to DoD audit organizations for the monitoring of audit services provided by non-Federal auditors.
(b)
(c)
(d)
(2) Use the clause at 252.237-7001, Compliance with Audit Standards, in solicitations and contracts for audit services.
DoD procedures are in DoDD 4205.2, Acquiring and Managing Contracted Advisory and Assistance Services (CAAS).
(b) On acquisitions for studies, the purchase request package must contain a signed statement from the technical officer responsible for the study stating that the Defense Technical Information Center (DTIC) and other information sources have been queried, that evidence of those queries are on file, and no existing scientific or technical report could fulfill the requirement.
(c) The authority, without redelegation authority (see DoDD 4205.2), to approve the use of advisory and assistance services in contracts over $50,000 is—
(i) An SES manager;
(ii) A general or flag officer;
(iii) An officer in O-6 grade filling a general or flag officer level position; or
(iv) An officer in O-6 grade who has subordinate SES personnel.
This subpart contains acquisition procedures for contracts for mortuary services (the care of remains) for military personnel within the U.S. Departments/agencies may use these procedures as guidance in areas outside the U.S. for both deceased military and civilian personnel.
(a)
(b)
Determine and define the geographical area to be covered by the contract using the following general guidelines—
(a) Use political boundaries, streets, or other features as demarcation lines.
(b) The size should be roughly equivalent to the contiguous metropolitan or municipal area enlarged to include the activities served.
(c) If the area of performance best suited to the needs of a particular contract is not large enough to include a carrier terminal commonly used by people within such area, the contract area of performance shall specifically state that it includes such terminal as a pickup or delivery point.
In addition to normal contract distribution, send three copies of each contract to each activity authorized to use the contract, and two copies to each of the following—
(a) HQDA (TAPC-PEC-D), Alexandria, VA 22331.
(b) Commander, Naval Medical Command, Department of the Navy (MED 3141), 23rd and E Streets, NW, Washington, DC 20372.
(c) Headquarters, AFMPC-MPCCM, Randolph AFB, TX 78150.
(a) Use the provision at 252.237-7002, Award to Single Offeror, in all sealed bid solicitations for mortuary services.
(b) Use the following clauses in all mortuary service solicitations and contracts, except do not use the clauses at 252.237-7004, Area of Performance, and 252.237-7010, Facility Requirements, in solicitations or contracts that include port of entry requirements—
(1) 252.237-7003, Requirements, (insert activities authorized to place orders in paragraph (e) of the clause);
(2) 252.237-7004, Area of Performance;
(3) 252.237-7005, Performance and Delivery;
(4) 252.237-7006, Subcontracting;
(5) 252.237-7007, Termination for Default;
(6) 252.237-7008, Group Interment;
(7) 252.237-7009, Permits;
(8) 252.237-7010, Facility Requirements; and
(9) 252.237-7011, Preparation History.
(c) Use the clause at FAR 52.245-4, Government-Furnished Property (Short Form), in solicitations and contracts that include port of entry requirements.
This subpart contains acquisition procedures for laundry and dry cleaning services within the United States. It may be used as guidance in all other locations.
(a) Except for hospital requirements, acquire laundry and dry cleaning services on a count-of-articles basis.
(b) Laundry services in support of hospitals may be acquired on the basis of a count-of-articles or by bulk weight.
(1) Acquisitions by weight may be on either a presorted (bag type) or unsorted (simple bulk weight) basis.
(2) In selecting the basis, consider such factors as price, administrative costs, aseptic requirements, risk of contamination or cross-contamination, and volume and nature of articles to be serviced.
(a) Use the provision at 252.237-7012, Instruction to Offerors (Count-of-Articles), in solicitations for laundry and dry cleaning services to be provided on a count-of-articles basis.
(b) Use the provision at 252.237-7013, Instruction to Offerors (Bulk Weight), in solicitations for laundry services to be provided on a bulk weight basis.
(c) Use the clause at 252.237-7014, Loss or Damage (Count-of-Articles), in solicitations and contracts for laundry and dry cleaning services to be provided on a count-of-articles basis.
(d) Use the clause at 252.237-7015, Loss or Damage (Weight of Articles), in solicitations and contracts for laundry and dry cleaning services to be provided on a bulk weight basis.
(1) Insert a reasonable per pound price in paragraph (b) of the clause, based on the average per pound value. When the contract requires laundry services on a bag type basis, insert reasonable per pound prices by bag type.
(2) Insert an appropriate percentage in paragraph (e) of the clause, not to exceed eight percent.
(e) Use the clause at 252.237-7016, Delivery Tickets, in all solicitations and contracts for laundry and dry cleaning services.
(1) Use the clause with its Alternate I when services are for bag type laundry to be provided on a bulk weight basis.
(2) Use the clause with its Alternate II when services are unsorted laundry to be provided on a bulk weight basis.
(f) Use the clause at 252.237-7017, Individual Laundry, in solicitations and contracts for laundry and dry cleaning services to be provided to individual personnel.
(1) Insert the number of pieces of outer garments in paragraphs (d) (1) and (2) of the clause.
(2) The number of pieces and composition of a bundle in paragraphs (d) (1) and (2) of the clause may be modified to meet local conditions.
(g) Use the clause at 252.237-7018, Special Definitions of Government Property, in all solicitations and contracts for laundry and dry cleaning services.
(a) This subpart prescribes acquisition procedures for educational services from schools, colleges, universities, or other educational institutions. This subpart does not include tuition assistance agreements, i.e., payment by the Government of partial tuition under the off-duty educational program.
(b) As used in the subpart—
(1) “
(2) “
(a) An educational service agreement is not a contract, but is an ordering agreement under which the Government may order educational services.
(b) Educational service agreements provide for ordering educational services when—
(1) The Government pays normal tuition and fees for educational services provided to a student by the institution under its normal schedule of tuition and fees applicable to all students generally; and
(2) Enrollment is at the institution under the institution's normal rules and in courses and curricula which the institution offers to all students meeting admission requirements.
(a) Make no agreement under this subpart which will result in payment of Government funds for tuition or other expenses for training in any legal profession, except in connection with the detailing of commissioned officers to law schools under 10 U.S.C. 2004.
(b) Educational service agreements are not used to provide special courses or special fees for Government students.
(a) Educational service agreements are for an indefinite duration and remain in effect until terminated.
(b) The issuing activity must establish procedures to review each educational service agreement at least once each year. Review dates should consider the institution's academic calendar and occur at least 30 days before the beginning of a term. The purpose of the review is to incorporate changes to reflect requirements of any statute, Executive Order, FAR, or DFARS.
(c) If the contracting officer and the institution do not agree on required changes, terminate the agreement.
Educational service agreements under this subpart shall be in the following format. Add to the schedule any other provisions necessary to describe the requirements, if they are consistent with the following provisions and the policy of acquiring educational services in the form of standard course offerings at the prevailing rates of the institution.
1. This agreement entered into on the
2. This agreement is for educational services to be provided by the Contractor to Government personnel at the Contractor's institution. The Contractor shall provide instruction with standard offerings of courses available to the public.
3. The Government shall pay for services under the Contractor's normal schedule of tuition and fees applicable to the public and in effect at the time the services are performed.
4. The Government will review this agreement annually before the anniversary of its effective date for the purpose of incorporating changes required by statutes, executive orders, the Federal Acquisition Regulation, or the Defense Federal Acquisition Regulation Supplement. Changes required to be made by modification to this agreement or by issuance of a superseding agreement. If mutual agreement on the changes cannot be reached, the Government will terminate this agreement.
5. The parties may amend this agreement only by mutual consent.
6. This agreement shall start on the date in paragraph 1 and shall continue until terminated.
7. The estimated annual cost of this agreement is $
8. Advance payments are authorized by 10 U.S.C. 2396(a)(3).
9. Submit invoices to:
1.
(b) The Government will request educational services under this agreement by a (insert type of request, such as, delivery order, official Government order, or other written communication). The (insert type of request, such as, delivery order, official Government order, or other written communication) will contain the number of this agreement and will designate as students at the Contractor's institution one or more Government-selected persons who have already been accepted for admission under the Contractor's usual admission standards.
(c) All students under this agreement shall register in the same manner, be subject to the same academic regulations, and have the same privileges, including the use of all facilities and equipment as any other students enrolled in the institution.
(d) Upon enrolling each student under this agreement, the Contractor shall, where the resident or nonresident status involves a difference in tuition or fees—
(i) Determine the resident or nonresident status of the student;
(ii) Notify the student and the Contracting Officer of the determination. If there is an appeal of the determination;
(iii) If there is an appeal of the determination, process the appeal under the Contractor's standard procedures;
(iv) Notify the student and Contracting Officer of the result; and
(v) Make the determination a part of the student's permanent record.
(e) The Contractor shall not furnish any instruction or other services to any student under this agreement before the effective date of a request for services in the form specified in paragraph (b) of this schedule.
2.
3.
(1) The Contractor publishes the revisions in a catalog or otherwise publicly announces the revisions;
(2) Applies the revisions uniformly to all students studying the same or similar curricula;
(3) Provides the Contracting Officer notice of changes before their effective date.
(b) The Contractor shall not establish any tuition or fees which apply solely to students under this agreement.
(c) If the Contractor regularly charges higher tuition and fees for nonresident students, the Contractor may charge the Government the normal nonresident tuition and fees for students under this agreement who are nonresidents. The Government shall not claim resident tuition and fees for any student solely on the basis of the student residing in the State as a consequence of enrollment under this agreement.
(d) The Contractor shall charge the Government only the tuition and fees which relate directly to enrollment as a student. Tuition and fees may include—
(i) Penalty fees for late registration or change of course caused by the Government;
(ii) Mandatory health fees and health insurance charges; and
(iii) Any flat rate charge applicable to all students registered for research that appears in the Contractor's publicly announced fee schedule.
(e) The Contractor shall not charge the Government for—
(i) Permit charges, such as vehicle registration or parking fees, unless specifically authorized in the request for service; and
(ii) Any equipment, refundable deposits, or any items or services (such as computer time) related to student research.
(f) Normally, the Contractor shall not directly charge individual students for application fees or any other fee chargeable to this agreement. However, if the Contractor's standard procedures require payment of any fee before the student is enrolled under this agreement, the Contractor may charge the student. When the Contractor receives payment from the Government, the Contractor shall fully reimburse the student.
(g) For each term the Contractor enrolls students under this agreement, the Contractor shall submit
(i) Agreement number and inclusive dates of the term;
(ii) Name of each student;
(iii) A list showing each course for each student if the school charges by credit hour;
(iv) The resident or nonresident status of each student (if applicable to the Contractor's school); and
(v) A breakdown of charges for each student, including credit hours, tuition, application fee, and other fees. Provide a total for each student and a grand total for all students listed on the invoice.
(h) If unforeseen events require additional charges that are otherwise payable under the Contractor's normal tuition and fee schedule, the Contractor may submit a supplemental invoice or make the adjustment on the next regular invoice under this agreement. The Contractor shall clearly identify and explain the supplemental invoice or the adjustment.
(i) The Contractor shall apply any credits resulting from withdrawal of students, or from any other cause under its standard procedures, to subsequent invoices submitted under this agreement. Credits should appear on the first invoice submitted after the action resulting in the credits. If no subsequent invoice is submitted, the Contractor shall deliver to the Contracting Officer a check drawn to the order of the office designated for contract administration. The Contractor shall identify the reason for the credit and the applicable term dates in all cases.
4.
(b) The Contractor may request withdrawal by the Government of any student for academic or disciplinary reasons.
(c) If withdrawal occurs before the end of a term, the Government will pay any tuition and fees due for the current term. The Contractor shall credit the Government with any charges eligible for refund under the Contractor's standard procedures for any students in effect on the date of withdrawal.
(d) Withdrawal of students by the Government will not be the basis for any special charge or claim by the Contractor other than charges under the Contractor's standard procedures.
5.
6.
7.
(b) Withdrawal of students under Schedule provision 4 shall not be considered a termination within the meaning of this provision 7.
(c) Termination by either party shall not be the basis for any special charge or claim by the Contractor, other than as provided by the Contractor's standard procedures.
Use the following clauses in educational service agreements:
1. FAR 52.202-1, Definitions, and add the following paragraphs (h) through (m).
(h) “Term” means the period of time into which the Contractor divides the academic year for purposes of instruction. This includes “semester,” “trimester,” “quarter,” or any similar word the Contractor may use.
(i) “Course” means a series of lectures or instructions, and laboratory periods, relating to one specific representation of subject matter, such as Elementary College Algebra, German 401, or Surveying. Normally, a student completes a course in one term and receives a certain number of semester hours credit (or equivalent) upon successful completion.
(j) “Curriculum” means a series of courses having a unified purpose and belonging primarily to one major academic field. It will usually include certain required courses and elective courses within established criteria. Examples include Business Administration, Civil Engineering, Fine and Applied Arts, and Physics. A curriculum normally covers more than one term and leads to a degree or diploma upon successful completion.
(k) “Catalog” means any medium by which the Contractor publicly announces terms and
(l) “Tuition” means the amount of money charged by an educational institution for instruction, not including fees.
(m) “Fees” means those applicable charges directly related to enrollment in the Contractor's institution. Unless specifically allowed in the request for services, fees shall not include—
(1) Any permit charge, such as parking and vehicle registration; or
(2) Charges for services of a personal nature, such as food, housing, and laundry.
2. FAR 52.203-3, Gratuities.
3. FAR 52.203-5, Covenant Against Contingent Fees.
4. FAR 52.204-1, Approval of Contract, if required by department/agency procedures.
5. FAR 52.215-2, Audit and Records—Negotiation.
6. FAR 52.215-8, Order of Precedence—Uniform Contract Format.
7. Conflicts Between Agreement and Catalog. Insert the following clause:
If there is any inconsistency between this agreement and any catalog or other document incorporated in this agreement by reference or any of the Contractor's rules and regulations, the provisions of this agreement shall govern.
8. FAR 52.222-3, Convict Labor.
9. Under FAR 22.802, FAR 22.807, and FAR 22.810, use the appropriate clause from FAR 52.222-26, Equal Opportunity.
10. FAR 52.233-1, Disputes.
11. Assignment of Claims. Insert the following clause:
No claim under this agreement shall be assigned.
12. FAR 52.252-4, Alterations in Contract, if required by department/agency procedures.
This subpart prescribes procedures for acquisition of temporary or intermittent services of students at institutions of higher learning for the purpose of providing technical support at Defense research and development laboratories (10 U.S.C. 2360).
As used in this subpart—
(a)
(1) Is located in the United States, its possessions, and Puerto Rico;
(2) Has an accredited education program approved by an appropriate accrediting body; and
(3) Offers a program of study at any level beyond high school.
(b)
(c)
(d)
Generally, agencies will acquire services of students at institutions of higher learning by contract between a nonprofit organization employing the student and the Government. When it is in the best interest of the Government, contracts may be made directly with students. These services are not subject to the requirements of FAR part 19, FAR 13.003(b)(1), or DFARS part 219.
Contracts made directly with students are nonpersonal service contracts but shall include the clauses at FAR 52.232-3, Payments Under Personal Services Contracts, and FAR 52.249-12, Termination (Personal Services).
This subpart prescribes procedures for contracting, through use of other than full and open competition, with local governments for police, fire protection, airfield operation, or other community services at military installations to be closed under the Defense Authorization Amendments and Base Closure and Realignment Act (Pub. L. 100-526), as amended, and the Defense Base Closure and Realignment Act of 1990 (Pub. L. 101-510), as amended.
The authority in 206.302-5(b)(ii) to contract with local governments—
(a) May be exercised without regard to the provisions of 10 U.S.C. Chapter 146, Contracting for Performance of Civilian Commercial or Industrial Type Functions;
(b) May not be exercised earlier than 180 days before the date the installation is scheduled to be closed;
(c) Requires a determination by the head of the contracting activity that the services being acquired under contract with the local government are in the best interests of the Department of Defense.
(d) Includes the requirement of subpart 222.71, Right of First Refusal of Employment, unless it conflicts with the local government's civil service selection procedures.
Use the clause at 252.237-7022, Services at Installations Being Closed, in solicitations and contracts based upon the authority of this subpart.
41 U.S.C. 421 and 48 CFR chapter 1.
This subpart contains unique DoD procedures for the exchange or sale of information technology using the exchange authority of the General Services Administration (GSA). This subpart only applies to items with an original acquisition cost of $1,000,000 or more.
Agencies should consider exchange/sale when replacing Government-owned information technology. Exchange/sale is a method of—
(a) Transferring the equipment to be replaced to—
(1) Another Government agency, with reimbursement (sale); or
(2) The supplier of the replacement information technology for a trade-in allowance (exchange).
(b) Applying the proceeds of sale or the exchange allowance toward the purchase of replacement information technology.
(a) The requiring activity must make a written determination that—
(1) The trade-in allowance of the exchange or the proceeds of the sale will be applied to acquire the replacement information technology; and
(2) The exchange/sale transaction will foster the economic and efficient accomplishment of a continuing requirement.
(b) The replacement equipment must be information technology—
(1) Similar to the resource being sold or exchanged;
(2) Which will satisfy the continuing requirement currently met by the resource being replaced.
(a) Comply with—
(1) This subpart;
(2) Subpart 217.70; and
(3) The Defense Automation Resources Management Manual.
(b) Solicit offers both on an exchange (trade-in for allowance) or no exchange (no trade-in) basis.
(c) Retain the option to exercise any exchange offer at the time of award.
(d) List and describe the information technology to be exchanged in the solicitation. At a minimum include—
(1) A brief description of each item;
(2) Name of manufacturer;
(3) Equipment type;
(4) Model number; and
(5) The condition code and explanation of the code.
(e) Allow sufficient time in the contracting schedule to permit screening within the Government of the information technology to be exchanged prior to contract award.
(f) Immediately upon receipt of offers, determine the highest exchange offer (if any) and use it to initiate screening under the Defense Automation Resources Management Manual.
(1) Send an SF 120, Report of Excess Personal Property, to the Defense Information Systems Agency, Chief Information Officer, Defense Automation Resources Management Program Division, Attn: D03D, 701 South Courthouse Road, Arlington, VA 22204-2199. Prominently display the following note on the original and five copies of the SF 120:
A written administrative determination has been (will be) made to apply the exchange allowance or proceeds of “sale” to the acquisition of similar items.
(2) Include the following additional information with the SF 120:
(i) The identity of the offeror of the exchange;
(ii) The type of replacement equipment;
(iii) The acquisition method for the replacement equipment;
(iv) The anticipated purchase price for the replacement equipment; and
(v) The name and telephone number of the contracting officer.
(g) Evaluate offers using the solicitation criteria, including consideration of any exchange allowance offers. Award can be made whether or not the replaced information technology is exchanged.
(h) Before a contract is awarded, consider the results of the screening. Do not make an exchange if another Government agency wants to acquire the replaced equipment.
(1) If another agency is going to acquire the replaced equipment, do not include the exchange allowance in the contract price.
(2) The actual sale price to the agency acquiring the replaced equipment will be the exchange allowance (if any) of the successful offeror.
(i) If no Government agency wants to acquire the replaced equipment, the contract price shall include the exchange allowance, if any.
(j) If no exchange allowance was offered by the successful contractor, see the Defense Automation Resources Management Manual for disposal instructions.
This subpart applies to all acquisitions for computer systems. It covers both security and Privacy Act considerations.
Security requirements are in addition to provisions concerning protection of privacy of individuals (see FAR subpart 24.1).
(a) The National Security or Atomic Energy Acts, as amended, may require protection of information that is—
(1) Processed;
(2) Transmitted;
(3) Stored;
(4) Retrieved; or
(5) Displayed.
(b) When acquiring computer equipment to be used to process classified information, the contracting officer shall obtain from the requiring activity—
(1) A determination as to whether the equipment must provide protection against compromising emanations; and
(2) Identification of an established National TEMPEST standard (e.g., NACSEM 5100, NACSIM 5100A) or a standard used by other authority.
(c) When contracts will require the use of FIP resources involving classified data, programs, etc., the contracting officer shall obtain from the requiring activity—
(1) Advice to whether to require contractors performing these services to use equipment meeting the requirements in paragraph (a) of this subsection (as prescribed in the clause at 252.239-7000, Protection Against Compromising Emanations;
(2) Information concerning any requirement for marking of TEMPEST—certified equipment (especially if to be reused); and
(3) Information on how to validate TEMPEST equipment compliance with required standards.
Include requirements for validation of TEMPEST compliance in section E (Inspection and Acceptance) of the contract.
When contracting for computer equipment or systems that are to be used to process classified information, use the clause at 252.239-7000, Protection Against Compromising Emanations.
This subpart contains guidance for implementing—
(a) Federal Information Processing Standards (FIPS); and
(b) Federal Telecommunications Standards (FED-STD).
(a) The Secretary of Commerce has delegated to the Secretary of Defense the authority to waive FIP standards, in accordance with procedures established by the Secretary of Commerce. The Secretary of Defense redelegated that waiver authority to the Assistant Secretary of Defense for Command, Control, Communications, and Intelligence (ASD(C3I)). The ASD(C3I) has redelegated to the senior information technology official of each military department the authority to approve waivers to FIP standards that are applicable to military department requirements. Waivers to FIP standards that are applicable to the requirements of DoD components outside the military departments must be approved by the ASD(C3I).
(b) Contracting officers shall ensure that all applicable FIP standards are incorporated into solicitations, except for those FIP standards for which the requiring activity has obtained a waiver from the appropriate military department or DoD senior information technology official.
(c) As part of the Commerce Business Daily synopsis of a solicitation, contracting officers shall publish a notice of any determinations to waive any FIP standards that are applicable to the solicitation. If the waiver determination is made after the notice of the solicitation is published, the contracting officer shall amend the notice to announce the waiver determination.
This subpart prescribes approval requirements for automatic data processing equipment (ADPE) purchased by contractors for use in performing DoD contracts.
(a) This subpart applies when the contractor purchases ADPE and title will pass to the Government.
(b) This subpart does not apply to ADPE acquired as a component of an end item.
(a) The requirements of this section highlight the redistribution requirements of the Defense Automation Resources Management Manual, and are in addition to those at FAR 45.302.
(b) If the contractor proposes acquiring ADPE subject to 239.7301, and the unit acquisition cost is $50,000 or more—
(1) The contracting officer shall require the contractor to submit, through the administrative contracting officer, the documentation in 239.7303.
(2) The administrative contracting officer—
(i) Submits a request for screening the requirement against the pool of Government-owned ADPE to determine if available excess equipment could satisfy the contractor's needs. The request should include the contractor's supporting documentation. The request is sent to—
(ii) Uses the Automation Resources Management System (ARMS) to screen on-line. System access may be requested from the Defense Information Systems Agency, Chief Information Officer, Defense Automation Resources Management Program (DARMP) Division. Customers may apply for an ARMS Account Number by calling the DARMP Help Desk at (703) 696-1904; DSN 426-1904, FAX (703) 696-1908; E-mail DARMP@NCR.DISA.MIL.
(iii) Documents the result of the System query.
(iv) Upon receipt of and based on screening results from DARMP, advises the contractor that excess ADPE—
(A) Is available pursuant to the Defense Automation Resources Management Manual; or
(B) Is not available and the contractor may proceed with acquisition of the equipment.
(3) The contracting officer—
(i) Reviews the contractor's documentation;
(ii) Decides whether to authorize the acquisition; and
(iii) Advises—
(A) The contractor if authorization is not granted; and
(B) The administrative contracting officer if authorization is granted.
Contracting officers may tailor the documentation requirements in paragraphs (a) through (d) of this section.
(a)
(2) Reliability and usage data on each component for the past 12 months.
(3) Identification of users supported by each component, including how much time each user requires the component and the related contract or task involved.
(b)
(2) List of tasks the new equipment is needed for and why, including estimated monthly usage for each major task or project.
(3) Anticipated software and telecommunications requirements.
(c)
(i) List sources solicited and proposals received;
(ii) Show how the evaluation was performed; and
(iii) Provide an explanation if the selected offer is not the lowest evaluated offer.
(2) If the acquisition is not competitive, state why.
(d)
This subpart prescribes policy and procedures for acquisition of telecommunications services and maintenance of telecommunications security. Telecommunications services may also meet the definition of information technology.
As used in this subpart—
(a)
(b)
(c)
(1) Regulatory bodies whose decisions are not subject to judicial appeal; and
(2) Regulatory bodies which regulate a company owned by the same entity which creates the regulatory body.
(d)
(e)
(f)
(g)
(a)
(i) On a competitive basis, except when acquisition using other than full and open competition is justified.
(ii) Recognizing the regulations, practices, and decisions of the Federal Communications Commission (FCC) and other governmental regulatory bodies on rates, cost principles, and accounting practices;
(iii) Making provision in telecommunications services contracts for adoption of—
(A) FCC approved practices; or
(B) The generally accepted practices of the industry on those issues concerning common carrier services where—
(
(
(
(2) DoD's unique consumer needs in both volume and technology require DoD to participate actively in the rule making process of cognizant governmental regulatory bodies. DoD also must work with the government regulatory bodies and common carriers to be sure that in those areas in which the FCC cannot or will not rule, sound regulatory practices are followed. DoD should make every effort to avoid the time and expense of litigation by full and fair disclosure of both the carrier's and the DoD's position in advance.
(3) If actions do not produce reasonable or lawful rates, or when there is a refusal to provide required services or file appropriate tariffs, DoD should litigate. All contracts with the regulatory bodies should be through counsel under department/agency and Defense Information Systems Agency procedures.
(b)
(i) The nature and extent of information requiring security during telecommunications;
(ii) The requirement for the contractor to secure telecommunications systems;
(iii) The telecommunications security equipment, devices, techniques, or services with which the contractor's telecommunications security equipment, devices, techniques, or services must be interoperable; and
(iv) The approved telecommunications security equipment, devices, techniques, or services, such as found in the National Security Agency's Information Systems Security Products and Services Catalogue.
(2) Contractors and subcontractors shall provide all telecommunications security techniques or services required for performance of Government contracts.
(3) Except as provided in paragraph (b)(4) of this subsection, contractors
(4) When the contractor or subcontractor does not meet ownership eligibility conditions, the head of the agency may authorize provision of the necessary facilities as Government-furnished property or acquisition as contractor-acquired property, as long as conditions of FAR 45.303 are met.
The FCC and other governmental regulatory bodies publish rules and regulations on the operations of common carriers and prescribe accounting principles to use to establish rates.
(a) Frequently, foreign carriers are owned by the government of the country in which they operate. The foreign governments often prescribe the methods of doing business. In many countries, an international agreement with the host country sets guidelines for acquiring communication services. In some countries, a corporate subsidiary of a carrier not indigenous to the country (often a U.S. parent) is the sole source for telecommunications services.
(b) Contracts for telecommunications services in foreign countries should describe rates and practices in as much detail as possible. It is DoD policy not to pay discriminatory rates. DoD should pay a reasonable rate for telecommunications services or the rate charged the military of that country, whichever is less.
(c) Refer special problems with telecommunications acquisition in foreign countries to higher headquarters for resolution with appropriate State Department representatives.
(a) The General Services Administration (GSA) has exclusive multiyear contracting authority for telecommunications resources. However, GSA may delegate this authority in certain instances (see Federal Property Management Regulations (FPMR) 101-35.6).
(b) In accordance with FPMR 101-35.6, executive agencies may enter into multiyear contracts for telecommunications resources if—
(1) The agency notifies GSA prior to using GSA's multiyear contracting authority;
(2) The contract life, including options, does not exceed 10 years; and
(3) The agency complies with OMB budget and accounting procedures relating to appropriated funds.
(a) Common carriers are not required to submit cost or pricing data before award of contracts for tariffed services. Rates or preliminary estimates quoted by a common carrier for tariffed telecommunications services are considered to be prices set by regulation within the provisions of 10 U.S.C. 2306a. This is true even if the tariff is set after execution of the contract.
(b) Rates or preliminary estimates quoted by a common carrier for nontariffed telecommunications services or by a noncommon carrier for any telecommunications service are not considered prices set by law or regulation.
(c) Contracting officers shall obtain sufficient information to determine that the prices are reasonable. For example, cost or pricing data, if required in accordance with FAR 15.403-4, or information other than cost or pricing data, if required in accordance with FAR 15.403-3, may be necessary to support the reasonableness of—
(1) Nontariffed services;
(2) Special rates and charges not included in a tariff, whether filed or to be filed;
(3) Special assembly rates and charges;
(4) Special construction and equipment charges;
(5) Contingent liabilities that are fixed at the outset of the service;
(6) Proposed cancellation and termination charges under the clause at 252.239-7007, Cancellation or Termination of Orders—Common Carriers, and reuse arrangements under the clause at 252.239-7008, Reuse Arrangements;
(7) Rates contained in voluntary tariffs filed by nondominant common carriers; or
(8) A tariff, whether filed or to be filed, for new services installed or developed primarily for Government use.
In addition to acquisition methods described in the FAR, the method described in this section may be used to acquire telecommunications services.
Basic agreements (see FAR 16.702) are used widely in conjunction with communication service authorizations to facilitate award of telecommunications services.
(a) Use DD Form 428, Communication Service Authorization (CSA), or an electronic data processing substitute to award, modify, cancel, or terminate telecommunications services. The CSA shall—
(1) Refer to the basic agreement;
(2) Specify the types and quantities and equipment to be provided as well as the tariff (or other price if a tariff is not available) of those services and equipment;
(3) Specify the premises involved;
(4) Cite the address for billing;
(5) Identify the disbursing office; and
(6) Provide funding information.
(b) Before awarding a CSA, comply with the requirements in FAR and DFARS, e.g., for competition, reviews, approvals, and determinations and findings.
(c) Include an expiration date in each CSA.
(d) Modify CSAs to reflect any price increases.
(a) Special construction normally involves a common carrier giving a special service or facility related to the performance of the basic telecommunications service requirements.
This may include—
(1) Moving or relocating equipment;
(2) Providing temporary facilities;
(3) Expediting provision of facilities; or
(4) Providing specially constructed channel facilities to meet Government requirements.
(b) Use this subpart instead of FAR part 36 for acquisition of “special construction.”
(c) Special construction costs may be—
(1) A contingent liability for using telecommunications services for a shorter time than the minimum to reimburse the contractor for unamortized nonrecoverable costs. These costs are usually expressed in terms of a termination liability, as provided in the contract or by tariff;
(2) A onetime special construction charge;
(3) Recurring charges for constructed facilities;
(4) A minimum service charge;
(5) An expediting charge; or
(6) A move or relocation charge.
(d) When a common carrier submits a proposal or quotation which has special construction requirements, the contracting officer shall require a detailed special construction proposal. Analyze all special construction proposals to—
(1) Determine the adequacy of the proposed construction;
(2) Disclose excessive or duplicative construction; and
(3) When different forms of charge are possible, provide for the form of charge most advantageous to the Government.
(e) When possible, analyze and approve special construction charges before receiving the service. Impose a ceiling on the special construction costs before authorizing the contractor to proceed, if prior approval is not possible. Do not make final payment for
(a) The construction labor standards in FAR 22.4 ordinarily do not apply to special construction. However, if the special construction includes construction (as defined in FAR 36.102) of a public building or public work, the construction labor standards may apply. Determine applicability under FAR 22.402.
(b) Each CSA or other type contract which is subject to construction labor standards under FAR 22.402 shall cite that fact.
(a) Special assembly is the designing, manufacturing, arranging, assembling, or wiring of equipment to provide telecommunications services that cannot be provided with general use equipment.
(b) Special assembly rates and charges shall be based on estimated costs. The contracting officer shall negotiate special assembly rates and charges before starting service whenever possible. When it is not possible to negotiate in advance, use provisional rates and charges subject to adjustment, until final rates and charges are negotiated. The CSAs authorizing the special assembly shall be modified to reflect negotiated final rates and charges.
(a)(1) Cancellation is stopping a requirement after placing of an order but before service starts.
(2) Termination is stopping a requirement after placing an order and after service starts.
(b) Determine cancellation or termination charges under the provisions of the applicable tariff or agreement/contract.
(a) In addition to other appropriate FAR and DFARS clauses, use the following clauses in solicitations, contracts, and basic agreements for telecommunications services. Modify the clauses only if necessary to meet the requirements of a governmental regulatory agency—
(b) Use the following clauses in solicitations, contracts, and basic agreements for telecommunications services when the acquisition includes or may include special construction. Modify the clauses only if necessary to meet the requirements of a governmental regulatory agency—
(c) Use the following clauses in basic agreements for telecommunications services—
(d) Use the clause at 252.239-7016, Telecommunications Security Equipment, Devices, Techniques, and Services, in solicitations and contracts when performance of a contract requires a securing telecommunications.
This subpart contains restrictions on the acquisition of information technology, imposed by Defense appropriations acts.
Section 8028 of the FY 1992 Defense Appropriations Act (Pub. L. 102-172) and similar sections of the FY 1993, FY 1994, and FY 1995 Defense appropriations acts prohibit use of DoD appropriations for acquisition of major automated information systems, unless the systems have successfully completed oversight reviews required by DoD regulations.
48 U.S.C. 421 and 48 CFR Chapter 1.
As used in this part—
Army, the Chief of Engineers;
Navy, the Commander, Naval Facilities Engineering Command;
Air Force, the head of a contracting activity; and
Defense Logistics Agency, the Executive Director of Contracting.
(a) This part applies to purchase of utility services from nonregulated and regulated utility suppliers. It includes the acquisition of liquefied petroleum gas as a utility service when purchased from regulated utility suppliers.
(b)(7) This part does not apply to third party financed projects. However, it may be used for any purchased utility services directly resulting from such projects, including those authorized by—
(A) 10 U.S.C. 2394 for energy, fuels, and energy production facilities for periods not to exceed 30 years;
(B) 10 U.S.C. 2394a for renewable energy for periods not to exceed 25 years;
(C) 10 U.S.C. 2689 for geothermal resources that result in energy production facilities;
(D) 10 U.S.C. 2809 for potable and waste water treatment plants for periods not to exceed 32 years; and
(E) 10 U.S.C. 2812 for lease/purchase of energy production facilities for periods not to exceed 32 years.
(1) Except as provided in FAR 41.201, DoD, as a matter of comity, will comply with the current regulations, practices and decisions of independent regulatory bodies which are subject to judicial appeal. This policy does not extend to regulatory bodies whose decisions are not subject to appeal nor does it extend to nonindependent regulatory bodies.
(2) Purchases of utility services outside the United States may use—
(i) Formats and technical provisions consistent with local practice; and
(ii) Dual language forms and contracts.
(3) Rates established by an independent regulatory body are considered “prices set by law or regulation” and do not require submission of cost or pricing data (see FAR Subpart 15.4).
(a)(i)
(A) Determine whether more than one supplier can provide the required utility services.
(
(
(B) Where competition exists, solicit competitive proposals from all potential suppliers.
(ii)
(A) The possible loss of rights vested in the Government under the existing contract;
(B) The age and quality of the contract; and
(C) The number of contract modifications and the ease of administration with the existing contract documents.
(iii)
(A)
(B)
(C)
(D)
(iv)
(B) Construction labor standards ordinarily do not apply to construction accomplished under the connection charge provisions of this part. However, if installation includes construction of a public building or public work as defined in FAR 36.102, construction labor standards may apply.
The General Services Administration (GSA) has delegated to DoD the authority to enter into utility service contracts (see FAR 41.103); therefore, contracting officers need not seek assistance or approval from GSA.
(a)(i) Requests for proposals shall state the anticipated service period in terms of months or years. Where the period extends beyond the current fiscal year, evaluate offers of incentives for a definite term contract.
(ii) The solicitation may permit offerors the choice of proposing on the basis of—
(A) A definite term not to exceed the anticipated service period; or
(B) An indefinite term contract.
(iii) Where the expected service period is less than the current fiscal year, the solicitation shall be on the basis of an indefinite term contract.
(iv) Contracts for utility services for leased premises shall identify the lease document on the face of the contract.
(d) Use an indefinite term utility service contract when it is considered to be in the Government's best interest to—
(i) Have the right to terminate on a 30-day (or longer) notice. A notice of up to one year may be granted by an installation if needed to obtain a more favorable rate, more advantageous conditions, or for other valid reasons; or
(ii) Grant the supplier the right to terminate the contract when of benefit to the Government in the form of lower rates, larger discounts or more favorable terms and conditions.
Departments/agencies shall conduct their owned preaward contract reviews.
(a) If the Government must execute a superseding contract and capital credits, connection charge credits, or termination liability exist, use the clause at 252.241-7000, Superseding Contract.
(b) Use the clause at 252.241-70001, Government Access, when the clause at FAR 52.241-5, Contractor's Facilities, is used.
41 U.S.C. 421 and 48 CFR chapter 1.
(a) Foreign governments and international organizations may request contract administration services on their direct purchases from U.S. producers. Direct purchase is the purchase of defense supplies in the United States through commercial channels for use by the foreign government or international organization.
(d)(i) DoD requires reimbursement, at a rate set by the Under Secretary of Defense (Comptroller/Chief Financial Officer), from non-DoD organizations, except for—
(A) Quality assurance, contract administration, and audit services provided under a no-charge reciprocal agreement;
(B) Services performed under subcontracts awarded by the Small Business Administration under FAR subpart 19.8; and
(C) Quality assurance and pricing services performed for the Supply and Services Canada.
(ii) Departments and agencies may request an exception from the reimbursement policy in paragraph (d)(i) of this section from the Under Secretary of Defense (Comptroller/Chief Financial Officer). A request must show that an exception is in the best interest of the Government.
(iii) Departments and agencies must pay for services performed by non-DoD activities, foreign governments, or international organizations, unless otherwise provided by reciprocal agreements.
(b)(i) Supply and Services Canada (SSC) is permitted to submit its requests for contract administration services directly to the cognizant contract administration office.
(ii) Other foreign governments (including Canadian government organizations other than SSC) and international organizations send their requests for contract administration services to the DoD Central Control Point (CCP) at the Defense Contract Management Command (DCMC), New York, NY. Contract administration offices provide services only upon request from the CCP. The CCP shall—
(A) Determine whether the request is from a friendly foreign government or an international agency in which the United States is a participant;
(B) Determine whether the services are consistent with the DoD mutual security program policies (the Assistant Secretary of Defense (International Security Affairs) is the source of information for questions as to the eligibility of foreign governments to receive services);
(C) Ensure that the reimbursement arrangements are consistent with 242.101(d);
(D) Coordinate with appropriate contract administration offices to determine whether DoD can provide the services;
(E) Notify the requestor that the request is accepted, or provide reasons why it cannot be accepted;
(F) Distribute the acquisition documents and related materials to contract administration offices; and
(G) Receive statements of costs incurred by contract administration offices for reimbursable services and forward them for billing to the Security Assistance Accounting Center.
This subpart does not address the contract administration role of a contracting officer's representative (see 201.602).
(a)(i) DoD activities shall not retain any contract for administration that requires performance of any contract administration function at or near contractor facilities, except contracts for—
(A) The National Security Agency;
(B) Research and development with universities;
(C) Flight training;
(D) Consultant support services;
(E) Mapping, charting, and geodesy services;
(F) Base, post, camp, and station purchases;
(G) Operation or maintenance of, or installation of equipment at radar or communication network sites;
(H) Communications services;
(I) Installation, operation, and maintenance of space-track sensors and relays;
(J) Dependents Medicare program contracts;
(K) Stevedoring contracts;
(L) Construction and maintenance of military and civil public works, including harbors, docks, port facilities, military housing, development of recreational facilities, water resources, flood control, and public utilities;
(M) Architect-engineer services;
(N) Airlift and sealift services (Military Airlift Command and Military Sealift Command may perform contract administration services at contractor locations involved solely in performance of airlift or sealift contracts);
(O) Subsistence supplies;
(P) Ballistic missile sites (contract administration offices may perform supporting administration of these contracts at missile activation sites during the installation, test, and checkout of the missiles and associated equipment); and
(Q) Operation and maintenance of, or installation of equipment at, military test ranges, facilities, and installations.
(ii) Contract administration functions for base, post, camp, and station contracts on a military installation are normally the responsibility of the installation or tenant commander. However, the Defense Contract Management Command (DCMC) shall, upon request of the military department, and subject to prior agreement, perform contract administration services on a military installation.
(iii) DCMC shall provide preaward survey assistance for post, camp, and station work performed on a military installation. The contracting office and the DCMC preaward survey monitor should jointly determine the scope of the survey and individual responsibilities.
(iv) To avoid duplication, contracting offices shall not locate their personnel at contractor facilities, except—
(A) In support of contracts retained for administration in accordance with paragraph (a)(i) of this section; or
(B) As permitted under subpart 242.74.
(a) In special circumstances, a contract administration office may request support from a component not listed in the DoD Directory of Contract Administration Services Components (DLAH 4105.4). An example is where the contractor's work site is on a military base and a base organization is asked to provide support. Before formally sending the request, coordinate with the office concerned to ensure that resources are available for, and capable of, providing the support.
(b) When requesting support on a subcontract which includes foreign military sale (FMS) requirements, the contract administration office shall—
(i) Mark “FMS Requirement” on the face of the documents;
(ii) For each FMS case involved, provide the FMS case identifier, associated item quantities, DoD prime contract number, and prime contract line/subline item number.
(1) For contracts assigned to the Defense Contract Management Command (DCMC), designate as the paying office—
(i) The cognizant Defense Finance and Accounting Service (DFAS) payment office as specified in the DoD Directory of Contract Administration Services Components (DLAH section 4105.4), for contracts funded with DoD funds;
(ii) The department or agency payment office if authorized by defense financial management regulations or if the contract is funded with non-DoD funds; or
(iii) Multiple paying offices under paragraphs (1)(i) and (ii) of this section—if the contract is funded with both DoD and non-DoD funds.
(2) For contracts not assigned to DCMC, select a paying office or offices under department/agency procedures.
Contract administration services performed outside the U.S. should be performed in accordance with FAR 42.301 unless there are no policies and procedures covering a given situation. In this case, coordinate proposed actions with the appropriate U.S. country teams or commanders of unified and specified commands.
(a)(4) Also, review and evaluate—
(A) Contractor estimating systems (see FAR 15.407-5); and
(B) Contractor material management and accounting systems under subpart 242.72.
(7) See 242.7503 for ACO responsibilities with regard to receipt of an audit report identifying significant accounting system or related internal control deficiencies.
(8) Monitor contractor costs under subpart 242.70.
(9) For additional contract administration functions related to IR&D/B&P projects performed by major contractors, see 242.771-3(a).
(19) Also negotiate and issue contract modifications reducing contract prices in connection with the provisions of paragraph (b) of the clause at FAR 52.225-10, Duty-Free Entry.
(33) Also perform industrial readiness and mobilization production planning field surveys and negotiate schedules.
(39) See 223.370 for safety requirements on contracts for ammunition and explosives.
(41) The Defense Contract Management Command (DCMC) has responsibility for reviewing earned value management system (EVMS) plans and verifying initial and continuing contractor compliance with DoD EVMS criteria.
(67) Also support program offices and buying activities in precontractual efforts leading to a solicitation or award.
(S-70) Serve as the single point of contact for all Single Process Initiative (SPI) Management Council activities. The ACO shall negotiate and execute facilitywide class modifications and agreements for SPI processes, when authorized by the affected components.
(b)(S-70) Issue, negotiate and execute orders under basic ordering agreements for overhaul, maintenance and repair.
(a) If a visit to a contractor facility will require access to classified information, the visitors must give the contractor advance written notice (DoD 5220.22-R, Industrial Security Regulation).
Use the conference program outlined on the DD Form 1484, Post-Award Conference Record, in conducting the conference.
The DD Form 1484, Post-Award Conference Record, may be used for this report.
Use the clause at 252.242-7000, Postaward Conference, in solicitations and contracts.
(c)(2) If the agencies cannot agree, refer the matter to the Director of Defense Procurement.
(c) The administrative contracting officer or auditor shall periodically review billing rates for continued applicability. Billing rates should be established on a year-to-year basis.
(a)
(b)
(b)
(iv) When agreement cannot be reached with the contractor, the auditor will issue a DCAA Form 1, Notice of Contract Costs Suspended and/or Disapproved, in addition to the advisory report to the administrative contracting officer. The DCAA Form 1 details the items of exception and advises the contractor that requests for reconsideration should be submitted in writing to the administrative contracting officer.
(b)
(6) Predetermined indirect cost rates may be established to cover up to four years.
This section implements 10 U.S.C. 2372, Independent research and development and bid and proposal costs: Payments to contractors.
Defense contractors are encouraged to engage in independent research and development and bid and proposal (IR&D/B&P) activities of potential interest to DoD, including activities cited in 231.205-18(c)(iii)(B).
(a) The cognizant administrative contracting officer (ACO) or corporate ACO shall—
(1) Determine cost allowability of IR&D/B&P costs as set forth in 231.205-18 and FAR 31.205-18.
(2) Determine whether IR&D/B&P projects performed by major contractors (see 231.205-18(a)) are of potential interest to DoD; and
(3) Notify the contractor promptly of any IR&D/B&P activities that are not of potential interest to DoD.
(b) The Defense Contract Management Command of the Defense Logistics Agency or the military department responsible for performing contract administration functions is responsible for providing the Defense Contract Audit Agency (DCAA) with IR&D/B&P statistical information, as necessary, to assist DCAA in the annual report required by paragraph (c) of this subsection.
(c) DCAA is responsible for submitting an annual report to the Director of Defense Procurement (USD(A&T)DP) setting forth required statistical information relating to the DoD-wide IR&D/B&P program.
(d) The Director, Defense Research and Engineering (USD(A&T)DDR&E), is responsible for establishing a regular method for communication—
(1) From DoD to contractors, of timely and comprehensive information regarding planned or expected DoD future needs; and
(2) From contractors to DoD, of brief technical descriptions of contractor IR&D projects.
(e) A corporate administrative contracting officer need not obtain the approval of the individual administrative contracting officers to disallow items of corporate expense.
(a)
(b)
(i) The contract auditor is the authorized representative of the contracting officer for—
(A) Receiving vouchers from contractors;
(B) Approving interim vouchers for provisional payment (this includes approving the fee portion of vouchers in accordance with the contract schedule and administrative contracting officer instructions) and sending them to the disbursing office;
(C) Authorizing direct submission of interim vouchers for provisional payment to the disbursing office for contractors with approved billing systems;
(D) Reviewing completion/final vouchers and sending them to the administrative contracting officer; and
(E) Issuing DCAA Forms 1, Notice of Contract Costs Suspended and/or Disapproved, to deduct costs where allowability is questionable.
(ii) The administrative contracting officer—
(A) Approves all completion/final vouchers and sends them to the disbursing officer; and
(B) May issue or direct the issuance of DCAA Form 1 on any cost when there is reason to believe it should be suspended or disallowed.
(a)(i) As a minimum, contracts will receive pre-delivery telephonic surveillance.
(ii) Contracts in the following categories will receive pre-delivery on-site production surveillance:
(A) Contracts assigned criticality designator A (see FAR 42.1105).
(B) Contracts specifically identified for special surveillance by the contracting officer.
(C) Any contract where telephonic surveillance reveals actual or anticipated delinquency unless the contract administration office, in coordination with the contracting officer, decides that on-site surveillance is not warranted.
(1) Contracting officers shall—
(i) Assign criticality designator A to items with a priority 01, 02, 03, or 06 (if emergency supply of clothing) under DoD Directive 4410.6, Uniform Materiel Movement and Issue Priority System; and
(ii) Ordinarily assign criticality designator C to unilateral purchase orders.
(2) Only the contracting officer shall change the assigned designator.
(a) See also—
(i) DoD 5000.2-R, Mandatory Procedures for Major Defense Acquisition Programs (MDAPs) and Major Automated Information System (MAIS) Acquisition Programs; and
(ii) For cost/schedule control system requirements on major systems acquisitions, 234.005-70.
(b)(i) Within 4 working days after receipt of the contractor's report, the contract administration office (CAO) shall provide the report and any required comments to the contracting officer and, unless otherwise specified in the contract, the inventory control manager.
(ii) If the contractor's report indicates that the contract is on schedule and the CAO agrees, the CAO does not need to add further comments. In all other cases, the CAO shall add comments and recommend a course of action.
(c)(i) CAOs may report using—
(A) DD Form 375-2, Delay in Delivery (Flash Notice);
(B) DD Form 375, Production Progress Report;
(C) MILSCAP Revised Delivery Forecast (RDF) system; or
(D) Message, letters, or facsimile.
(ii) The contracting office shall acknowledge receipt of the CAO report.
(b) When using the clause at FAR 52.242-2, include the following instructions in the contract schedule—
(i) Frequency and timing of reporting (normally 5 working days after each reporting period);
(ii) Contract line items, exhibits, or exhibit line items requiring reports;
(iii) Offices (with addressees/codes) where reports should be sent (always include the contracting office and contract administration office); and
(iv) The following requirements for report content—
(A) The problem, actual or potential, and its cause;
(B) Items and quantities affected;
(C) When the delinquency started or will start;
(D) Actions taken to overcome the delinquency;
(E) Estimated recovery date; and/or
(F) Proposed schedule revision.
(a) Use the clause at 252.242-7005, Cost/Schedule Status Report, in solicitations and contracts for other than major systems that require cost/schedule status reports (i.e., when the Contract Data Requirements List includes DI-MGMT-81467 in accordance with DoD 5000.2-R).
(b) Use the provision at 252.242-7006, Cost/Schedule Status Report Plans, in
The contracting officer responsible for processing and executing novation and change-of-name agreements shall ensure agreements are executed promptly.
(b)(1) For contracts awarded by the Military Departments, provide notices to the following addressees instead of individual contracting or contract administration offices—
(2)(A) Lists for notices of a successor in interest should include the information at FAR 42.1204(c)(2).
(B) Lists for notices of a name change should include the information at FAR 42.1205(a)(3).
(C) On notices sent to the addressees in paragraph (b)(1) of this section, include a consolidated list for all subordinate contracting offices of the addressee.
(d)(i) Before making any substantial alterations or additions to the novation agreement format at FAR 42.1204(e), coordinate with those addressees in paragraph (b)(1) of this section that have contracts with the contractor. Resolve any objections before executing the agreement.
(ii) If the National Aeronautics and Space Administration (NASA) wants a separate agreement with the contractor, continue to process the agreement only for DoD.
(e) Also, make distribution to—
(i) The addressees in paragraph (b)(1) of this section—two copies; and
(ii) The appropriate Military Traffic Management Command (MTMC) area command for agreements affecting contracts and basic agreements for storage and related services for personal property of military and civilian personnel—two copies—
(f)(4) Additional distribution in-struc-tions—
(A) Send two copies to the address in paragraph (b)(1) of this section. The list of contracts may be confined to those issued by that department.
(B) Do not send copies to NASA or the MTMC commands in paragraph (e)(ii). They will issue their own modifications.
(e) When a novation agreement is required and the transferee intends to incur restructuring costs as defined at 213.205-70, the cognizant contracting officer shall include the following provision as paragraph (b)(7) of the novation agreement instead of the paragraph (b)(7) provided in the sample format at FAR 42.1204(e):
“(7)(i) Except as set forth in subparagraph (7)(ii) below, the Transferor and the Transferee agree that the Government is not obligated to pay or reimburse either of them for, or otherwise give effect to, any costs, taxes, or other expenses, or any related increases, directly or indirectly arising out of or resulting from the transfer or this Agreement, other than those that the Government in the absence of this transfer or Agreement would have been obligated to pay or reimburse under the terms of the contracts.
(ii) The Government recognizes that restructuring by the Transferee incidental to
(b)(12) Chapter 39 of the Defense Traffic Management Regulation (DTMR) (AR 55-355, NAVSUPINST 4600.70, AFM 75-2, MCO P4600 14A, DLAR 4500.3) contains methods for tracing and expediting shipments.
(a)(2) In reporting planned and actual volume movements—
(A) The contracting officer—
(
(
(B) The contract administration office submits a volume movement report when—
(
(
(C) Include the destination country, foreign forwarder, and, if known, port of embarkation on volume movement reports for foreign military sale shipments.
(a)(i) Procedures for the contractor to obtain Government bills of lading are in the clause at 252.242-7003, Application for U.S. Government Shipping Documentation/Instructions.
(ii) The term commercial bills of lading includes the use of any commercial form or procedure. Appendix J of the DTMR lists carriers and carrier associations that provide transportation within the continental United States under commercial forms and procedures.
(b)(1) See DoD 4525.8-M, DoD Official Mail Manual.
When using FAR 52.213-1, Fast Payment Procedures, do not use FAR clauses 52.242-10, F.o.b. Origin—Government Bills of Lading or Prepaid Postage, or 52.242-11, F.o.b. Origin—Government Bills of Lading or Indicia Mail.
Use the clause at 252.242-7003, Application for U.S. Government Shipping Documentation/Instructions, when using the clause at FAR 52.242-10, F.o.b. Origin—Government Bills of Lading or Prepaid Postage, or FAR 52.242-11, F.o.b. Origin—Government Bills of Lading or Indicia Mail.
(a) See also chapter 41 of the Defense Traffic Management Regulation (DTMR) for discrepancy procedures.
(a) Procedures for payment or collection of demurrage or detention charges are contained in chapter 38 of the DTMR.
(b) Carrier demurrage rules usually allow for a “free time” for loading or unloading cars or for any other purpose, and impose charges for cars held beyond this period. If a contractor detains railroad cars beyond the “free time,” the contractor has to pay the carrier's published tariff charges for demurrage.
(c) Detention results when a shipper or consignee holds motor carrier equipment beyond a reasonable period for loading, unloading, forwarding directions, or any other reason. Detention rules and charges are not uniform; they are published in individual carrier or agency tenders.
Evaluations should consider any notifications submitted under paragraph (g) of the clause at 252.219-7003, Small, Small Disadvantaged and Women-Owned Small Business Subcontracting Plan (DoD Contracts).
(a) A voluntary refund is a payment or credit (adjustment under one or more contracts or subcontracts) to the Government from a contractor or subcontractor which is not required by any contractual or other legal obligation.
(b) A voluntary refund may be solicited (requested by the Government) or unsolicited.
(1) Generally, request voluntary refunds only after determining that no contractual remedy is readily available to recover the amount sought.
(2) Acceptance of unsolicited refunds does not prejudice remedies otherwise available to the Government.
(c) Before soliciting a voluntary refund or accepting an unsolicited one, the contracting officer should have legal counsel review the contract and related data to—
(1) Confirm that there are no readily available contractual remedies; and
(2) Advise whether the proposed action would jeopardize or impair the Government's rights.
(a) Request voluntary refunds only when—
(1) The contracting officer concludes that the contractor overcharged under a contract, or inadequately compensated the Government for the use of Government-owned property, or inadequately compensated the Government in the disposition of contractor inventory; and
(2) Retention of the amount in question by the contractor or subcontractor would be contrary to good conscience and equity.
(b) Do not solicit voluntary refunds without approval of the head of the contracting activity, or as provided in department/agency regulations.
(c) Voluntary refunds may be requested during or after contract performance.
A contract modification, rather than a check, is the preferred means of effecting a solicited or unsolicited refund transacted before final payment.
(a) For modifications, adjust the price for the refund and credit the refund to the applicable appropriation cited in the contract.
(b) For checks—
(1) Advise the contractor to—
(i) Make the check payable to the agency which awarded the contract;
(ii) Forward the check to the contracting officer or when the contract is assigned to another office for administration, to that office; and
(iii) Include a letter with the check—
(A) Identifying it as a voluntary refund;
(B) Giving the contract number involved; and
(C) Where possible, giving the appropriation and account number to be credited.
(2) Forward the check to the office responsible for control of funds.
This subpart provides policies, procedures, and standards for use in the evaluation of a contractor's material management and accounting system (MMAS).
DoD policy is for all contractors to have an MMAS that—
(a) Reasonably forecasts material requirements;
(b) Ensures the costs of purchased and fabricated material charged or allocated to a contract are based on valid time-phased requirements;
(c) Maintains a consistent, equitable, and unbiased logic for costing of material transactions; and
(d) Conforms to the standards at 252.242-7004(f) when the contractor has cost-reimbursement or fixed-price contracts exceeding the simplified acquisition threshold, with progress or other contract financing provisions, except when all of the contracts and subcontracts are awarded under the set-aside or Section 8(a) procedures of FAR part 19.
(a) A large business contractor is subject to MMAS disclosure, demonstration, and maintenance if in its preceding fiscal year the contractor received DoD prime contracts or subcontracts (including modifications) totaling—
(1) $70 million or more; or
(2) $30 million or more (but less than $70 million), and the contracting officer determines it to be in the best interests of the Government (e.g., contractor disclosure, demonstration, or other activities indicate significant MMAS problems exist).
(b) After the administrative contracting officer determines the contractor's MMAS is adequate (see 242.7204(b)), written disclosure will not be required for the next MMAS review unless the contractor's policies, procedures, or practices have changed in the interim period(s). Similarly, once the contractor demonstrates that its MMAS contains no significant deficiencies, demonstration requirements for subsequent reviews may be satisfied if internal audits are reasonably current and contain sufficient transaction tests to demonstrate MMAS compliance with each standard.
(a) The contracting officer shall—
(1) Through use of the clause at 252.242-7004, Material Management and Accounting System, apply the disclosure, demonstration, and maintenance requirements to large business contractors meeting the criteria in 242.7203(a);
(2) Consider whether to apply the disclosure, demonstration, and maintenance requirements to other large business contractors under 242.7203(a)(2) after concurrence from, or at the request of, the administrative contracting officer; and
(3) Not apply the disclosure, demonstration, and maintenance requirements to small businesses, educational institutions, or nonprofit organizations.
(b) For contractors subject to the disclosure, demonstration, and maintenance requirements, the administrative contracting officer (ACO) determines the adequacy of the contractor's MMAS and pursues correction of deficiencies.
(c) The contract auditor shall—
(1) Assist the ACO in evaluating the contractor's MMAS;
(2) Assess the significance of contractor deficiencies and provide the ACO an estimate of the resulting adverse material impact to the Government; and
(3) Assist the ACO in evaluating the contractor's correction of deficiencies.
(a)
(1) Conduct reviews as a team effort.
(i) The administrative contracting officer—
(A) Appoints a team leader; and
(B) Ensures that the team includes appropriate functional specialists (i.e., industrial specialists, engineer, property administrator, auditor, etc.).
(ii) The team leader—
(A) Advises the ACO and contractor of findings during the review and at the exit conference.
(B) Makes every effort to resolve differences regarding questions of fact during the review.
(2) Tailor reviews to take full advantage of the day-to-day work done by both organizations.
(3) Prepare a review report.
(4) Conduct a review every 3 years. The ACO, with advice from the auditor, may lengthen or shorten the 3 year period based on a risk assessment of the contractor's past experience and current vulnerability.
(b)
(1)
(i) The ACO shall notify the contractor in a timely manner if there are no deficiencies.
(ii) If there are deficiencies, the ACO shall request the contractor to provide a written response within 30 days from the date of initial notification.
(iii) If the contractor agrees with the report, the contractor has 60 days to correct any identified deficiencies or submit a corrective action plan showing milestones and actions to eliminate the deficiencies.
(iv) If the contractor disagrees, request rationale in the written response.
(2)
(i) The MMAS contains deficiencies which need correction;
(ii) The deficiencies are significant enough to result in the reduction or suspension of progress payments or of payments under public vouchers; and
(iii) Proposed corrective actions (if the contractor submitted them) are adequate to correct the deficiencies.
(3)
(A) The deficiencies are corrected; or
(B) The amount of the impact is immaterial.
(ii) The maximum payment adjustment is the adverse material impact to the Government as specified in the team's report. The ACO should use the maximum adjustment when the contractor did not submit a corrective action plan with its response, or the plan is unacceptable. In other cases, the ACO should consider the quality of the contractor's self-assessment, demonstration, and corrective action plan in determining the appropriate percentage.
(iii) As the contractor implements its accepted corrective action plan, the ACO should reinstate a portion of withheld amounts commensurate with the contractor's progress in making corrections. However, the ACO shall not fully reinstate withheld amounts until the contractor corrects the deficiency, or until the impact of the deficiency becomes immaterial.
(4)
(A) Deficiencies needing correction;
(B) Acceptability of the contractor's corrective action plan (if one was submitted) or the need for a corrective action plan; and
(C) Any decision to reduce or suspend progress payments or public vouchers because of significant deficiencies.
(ii) The Government does not approve or disapprove the contractor's MMAS system. ACO notifications should avoid any such implications.
(iii) From the time the ACO determines that there is a significant material management and accounting system deficiency until the time the deficiency is corrected, all field pricing reports for that contractor shall contain a recommendation relating to proposed cost or pricing data adjustments necessary to protect the Government's interests.
(iv) The ACO should consider the effect of significant MMAS deficiencies in reviews of the contractor's estimating system (see 215.407-5).
(5)
(i) Elevate the issue to higher level management;
(ii) Further reduce or suspend progress payments;
(iii) Notify the contractor of the inadequacy of the contractor's cost estimating system and/or cost accounting system.
(iv) Take appropriate contractual action, i.e., disallow charges as unreasonable; and
(v) Issue cautions to contracting activities regarding the award of future contracts.
Use the clause at 252.242-7004, Material Management and Accounting System, in all solicitations and contracts exceeding the simplified acquisition threshold that are not for the acquisition of commercial items and—
(a) Are not awarded under the set-aside or section 8(a) procedures of FAR part 19; and
(b) Are either—
(1) Cost-reimbursement contracts; or
(2) Fixed-price contracts with progress payments or other Government financing.
This subpart provides the requirements for conducting a Contractor Insurance/Pension Review (CIPR).
(a) The administrative contracting officer (ACO) is responsible for determining the allowability of insurance/pension costs in Government contracts. Defense Logistics Agency (DLA) insurance/pension specialists and Defense Contract Audit Agency (DCAA) auditors assist ACOs in making these determinations by conducting CIPRs.
(1) A CIPR is an in-depth evaluation of a contractor's—
(i) Insurance program;
(ii) Pension plans;
(iii) Other deferred compensation plans; and
(iv) Related policies, procedures, practices, and costs.
(2) A special CIPR is a joint DLA/DCAA review that concentrates on specific areas of the contractor's insurance program, pension plan, or other deferred compensation plan.
(b) DLA is the DoD Executive Agency for the performance of all CIPRs conducted under 242.7302.
(a)(1) A CIPR shall be conducted only when—
(i) A contractor has $40 million of qualifying sales to the Government during the contractor's preceding fiscal year; and
(ii) The ACO, with advice from DLA insurance/pension specialists and DCAA auditors, determines a CIPR is needed based on a risk assessment of the contractor's past experience and current vulnerability.
(2) Qualifying sales are sales for which cost or pricing data were required under 10 U.S.C. 2306a, as implemented in FAR 15.403, or that are contracts priced on other than a firm-fixed-price or fixed-price with economic price adjustment basis. Sales include prime contracts, subcontracts, and modifications to such contracts and subcontracts.
(b) A special CIPR shall be performed for a contractor (including, but not limited to, a contractor meeting the requirements in paragraph (a) of this section) when any of the following circumstances exists, but only if the circumstance(s) may result in a material impact on Government contract costs:
(1) Information reveals a deficiency in the contractor's insurance/pension program.
(2) The contractor proposes or implements changes in its insurance, pension, or deferred compensation plans.
(3) The contractor is involved in a merger, acquisition, or divestiture.
(4) The Government needs to follow up on contractor implementation of prior CIPR recommendations.
(c) The DCAA auditor shall use relevant findings and recommendations of previously performed CIPRs in determining the scope of any audits of insurance and pension costs.
(d) When a Government organization believes that a review of the contractor's insurance/pension program should be performed, that organization should provide a recommendation for a review to the ACO. If the ACO concurs, the review should be performed as part of an ACO-initiated special CIPR or as part of a CIPR already scheduled for the near future.
(a) The ACO is responsible for—
(1) Determining the need for a CIPR under 242.7302;
(2) Requesting and scheduling the reviews with the appropriate DLA activity;
(3) Notifying the contractor of the proposed date and purpose of the review, and obtaining any preliminary data needed by the DLA insurance/pension specialist or the DCAA auditor;
(4) Reviewing the CIPR report, advising the contractor of the recommendations contained therein, considering contractor comments, and rendering a decision on those recommendations;
(5) Providing other interested contracting officers copies of documents related to the CIPR;
(6) Ensuring adequate follow-up on all CIPR recommendations; and
(7) Performing contract administration responsibilities related to Cost Accounting Standards administration as described in FAR Subparts 30.2 and 30.6.
(b) The DLA insurance/pension specialist is responsible for—
(1) Preparing and maintaining the schedule of CIPRs to be performed during the next 12 months and providing the military departments and DCAA a copy of the schedule;
(2) Issuing a technical report on the contractor's insurance/pension plans for incorporation into the final CIPR report based on an analysis of the contractor's pension program, insurance program, and other related data;
(3) Leading the team that conducts the review. Another individual may serve as the team leader when both the insurance/pension specialist and the individual agree. The team leader is responsible for—
(i) Maintaining complete documentation for CIPR reports;
(ii) To the extent possible, resolving discrepancies between audit reports and CIPR draft reports prior to releasing the final CIPR report;
(iii) Preparing and distributing the final CIPR report;
(iv) Providing the final audit report and/or the insurance/pension specialist's report as an attachment to the CIPR report; and
(v) Preparing a draft letter for the administrative contracting officer's use in notifying the contractor of CIPR results; and
(4) When requested, advising administrative contracting officers and other Government representatives concerning contractor insurance/pension matters.
(c) The DCAA auditor is responsible for—
(1) Participating as a member of the CIPR team or serving as the team leader (see paragraph (b)(3) of this section);
(2) Issuing an audit report for incorporation into the final CIPR report based on an analysis of the contractor's books, accounting records, and other related data; and
(3) Performing contract audit responsibilities related to Cost Accounting Standards administration as described in FAR Subparts 30.2 and 30.6.
(a) Contract administration offices (CAOs) are the designated representatives of DoD for the administration of contracts (see FAR 42.202 and 42.302). DoD activities shall use CAOs to perform contract administration service functions at or near contractor facilities (see 242.203(a) (i) and (v).
(b) Program managers may conclude that they need technical representation in contractor facilities to perform non-contract administration service (CAS) technical duties and to provide liaison, guidance, and assistance on systems and programs. In these cases, the program manager may assign technical representatives under the procedures in 242.7401.
(c) Program managers should carefully assess the number of technical representatives required to perform the non-CAS technical functions so as to keep the total assigned in-plant to the minimum necessary.
(d) A technical representative is a representative of a DoD program, project, or system office performing non-CAS technical duties at or near a contractor facility. A technical representative is not—
(1) A representative of a contract administration or contract audit component; or
(2) A contracting officer's representative (COR) (see 201.602).
(a) When the program, project, or system manager determines that a technical representative is required, the manager shall issue a letter of intent to the contract administration office commander listing the assignment location, starting and ending assignment dates, technical duties assigned, delegated authority, and support required from the contract administration office. Any issues regarding the assignment of a technical representative should be resolved promptly. However, final decision on the assignment remains with the program manager. Issues regarding the assignment of technical duties which cannot be resolved between the program office and the defense plant representative office will be escalated.
(b) The program, project, or system manager shall furnish the designated technical representative a letter of assignment of delegated technical duties, with copies to the contract administration office, the contracting officer, and contractor, at least 30 days before the assignment date (or termination date). Any changes to the requirements of the assignment letter will be made by a new letter of intent and processed in accordance with paragraph (a) of this section.
(c) The contract administration office normally provides the technical representative with office space, equipment, supplies, and part-time clerical support. The program, project, or system manager provides supervision, technical direction, administrative
(d) The program manager or designee and the contract administration office, at the local level, shall negotiate a memorandum of agreement (MOA) delineating their functional administrative interrelationships, with annual updates as necessary. The agreements may be included in an existing MOA, if one exists, or as a separate MOA.
(e) The technical representative shall keep the contract administration office commander fully informed of matters discussed with the contractor. The contract administration office shall also keep the technical representative fully informed of contractor discussions which relate to technical matters within the purview of the technical representative's assigned duties.
This subpart provides policies and procedures applicable to contractor accounting systems and related internal controls.
Contractors receiving cost-reimbursement or incentive type contracts, or contracts which provide for progress payments based on costs or on a percentage or stage of completion, shall maintain an accounting system and related internal controls throughout contract performance which provide reasonable assurance that—
(a) Applicable laws and regulations are complied with;
(b) The accounting system and cost data are reliable;
(c) Risk of misallocations and mischarges are minimized; and
(d) Contract allocations and charges are consistent with invoice procedures.
(a) Upon receipt of an audit report identifying significant accounting system or related internal control deficiencies, the ACO will—
(1) Provide a copy of the report to the contractor and allow 30 days, or a reasonable extension, for the contractor to respond;
(2) If the contractor agrees with the report, the contractor has 60 days from the date of initial notification to correct any identified deficiencies or submit a corrective action plan showing milestones and actions to eliminate the deficiencies.
(3) If the contractor disagrees, the contractor should provide rationale in its written response.
(4) The ACO will consider whether it is appropriate to suspend a percentage of progress payments or reimbursement of costs proportionate to the estimated cost risk to the Government, considering audit reports or other relevant input, until the contractor submits a corrective action plan acceptable to the ACO and corrects the deficiencies. (See FAR 32.503-6 (a) and (b) and FAR 42.302(a)(7)).
41 U.S.C. 421 and 48 CFR chapter 1.
(b)(i) See subpart 217.74 for limitations on issuing undefinitized contract actions.
(ii) Modifications of letter contracts are subject to the same policies and procedures as modifications of definitive contracts.
(a)(i) 10 U.S.C. 2405 prohibits adjustments in price under a shipbuilding contract entered into after December 7, 1983, for a claim, request for equitable adjustment, or demand for payment under the contract, arising out of events occurring more than 18 months before submission of the claim, request, or demand.
(ii) Section 558 of the National Defense Authorization Act for Fiscal Year 1995 (Public Law 103-337) provides that no funds available to DoD may be provided by contract or contract modification, nor may contract payments be made, to an institution of higher education that has a policy of denying or that effectively prevents the Secretary of Defense from obtaining for military recruiting purposes—
(A) Entry to campuses or access to students on campuses; or
(B) Access to directory information pertaining to students. (See 209.470.)
(iii) Pursuant to 10 U.S.C. 983, no funds may be obligated by contract or contract modification to an institution of higher education that has an anti-ROTC policy. (See 209.470.)
For DoD, the
The Secretary of Defense is required to notify the Secretary of Labor if a modification of a major defense contract or subcontract will have a substantial impact on employment. The clause prescribed at 249.7002(c) requires that the contractor notify the contracting officer when a contract modification will have a substantial impact on employment.
Identify contract modifications that add FMS requirements by clearly marking “FMS Requirement” on the front. Within the modification, cite each FMS case identifier code by line/subline item number, e.g., FMS Case Identifier GY-D-DCA.
For each contract modification, the contracting officer shall identify, in Section G, Contract Administration Data (Uniform Contract Format), or the contract schedule (Simplified Contract Format), under the heading “Summary for the Payment Office,” information sufficient to permit the paying office to readily identify the changes for each contract line and subline item as follows—
(a) The amount of funds obligated by prior contract actions, to include the total cost and fee if a cost-type contract; the target fee at time of contract award if a cost-plus-incentive-fee contract; the base fee if a cost-plus-award-fee contract; or the target price and target profit if a fixed-price incentive contract;
(b) The amount of funds obligated or deobligated by the instant modification, categorized by the types of contracts specified in paragraph (a) of this section; and
(c) The total cumulative amount of obligated or deobligated funds, categorized by the types of contracts specified in paragraph (a) of this section.
(b)
(a) A request for equitable adjustment to contract terms that exceeds the simplified acquisition threshold may not be paid unless the contract certifies the request in accordance with the clause at 252.243-7002.
(b) The aggregate amount of both the increased and decreased costs shall be used in determining when the dollar threshold requiring certification is met (see example in FAR 15.403-4(a)(1)(iii)).
(c) The certification required by 10 U.S.C. 2410(a), as implemented in the clause at 252.243-7002, is different from the certification required by the Contract Disputes Act of 1978 (41 U.S.C. 605(c)). If the contractor has certified a request for equitable adjustment in accordance with 10 U.S.C. 2410(a), and desires to convert the request to a claim under the Contract Disputes Act, the contractor shall certify the claim in accordance with FAR Subpart 33.2.
Engineering changes can originate with either the contractor or the Government. In either case, the Government will need detailed information from the contractor for evaluation of the technical, cost, and schedule effects of implementing the change. When the contracting officer wants this information submitted in the format prescribed by MIL-STD-973, use the clause at 252.243-7000, Engineering Change Proposals. Use the clause with its Alternate I, when appropriate, to discourage submission of a large number of small dollar, contractor originated engineering change proposals.
Use the clause at 252.243-7001, Pricing of Contract Modifications, in solicitations and contracts when anticipating and using a fixed price type contract.
Use the clause at 252.243-7002, Requests for Equitable Adjustment, in solicitations and contracts estimated to exceed the simplified acquisition threshold.
41 U.S.C. 421 and 48 CFR chapter 1.
(a) Where other than lowest price is the basis for subcontractor selection, has the contractor adequately substantiated the selection as offering the greatest value to the Government?
The administrative contracting officer (ACO) is responsible for reviewing the contractor's purchasing systems. Members of other organizations such as audit or program management activities should not conduct separate reviews of a contractor's purchasing system, but may participate in a review conducted for the ACO. These organizations may, if they suspect a problem, recommend that the ACO initiate a special review.
(b) The ACO, or the purchasing system analyst (PSA) with the concurrence of the ACO, may initiate a special review of specific weaknesses in the contractor's purchasing system. The weaknesses, for example—
(i) May arise because of—
(A) Major changes in the contractor's purchasing policies, procedures, or key personnel; or
(B) Changes in plant workload or type of work.
(ii) May be discovered—
(A) During reviews of subcontracts submitted under advance notification and consent (FAR subpart 44.2); or
(B) From information provided by Government personnel.
Use this subsection instead of FAR 44.305-2(c) and 44.305-3(b).
(a) At the completion of the in-plant portion of the review, the ACO shall hold an exit conference with the contractor. At the conference, the ACO should—
(1) Present the review team's recommendations, signed by the ACO;
(2) Request the contractor submit its plan for correcting deficiencies or making improvements within 15 days; and
(3) Not comment on the pending or planned decision to grant or withhold approval of the contractor's purchasing system.
(b) The PSA should submit the complete report to the ACO, or any department or agency established review board, within ten days after receipt of the contractor's response under paragraph (a)(2) of this subsection.
(c) The ACO should completely review the report and consider the contractor's response before making a decision on granting, withholding, or withdrawing purchasing system approval. The ACO shall notify the contractor of the decision within ten days after receipt of the report with a copy of the decision to the PSA and the contracting office, when requested.
(d) When a contractor advises that it has corrected deficiencies that led the ACO to withhold or withdraw the purchasing system approval, the ACO—
(1) Shall request the PSA to verify that the contractor has—
(i) Corrected the deficiencies; and
(ii) Implemented any other ACO recommendations.
(2) Should ask for a review of purchasing policies and procedures issued since the last review.
Use the clause at 252.244-7000, Subcontracts for Commercial Items and Commercial Components (DoD Contracts), in solicitations and contracts
41 U.S.C. 421 and 48 CFR chapter 1.
(a) The property administrator shall perform property administration in accordance with DoD 4161.2-M, Manual for the Performance of Contract Property Administration.
(a)(4)(A) Comply with DoD Directive 4275.5, Acquisition and Management of
(
(
(
(
(
(B) The contracting officer shall coordinate the Determination and Finding with the program or project manager.
(C) Departments and agencies must submit reports of facilities projects to the House and Senate Armed Services Committees—
(
(
(b)(1)(A)
(
(
(B)
Terminate facilities contracts when Government production and research property is no longer required for the performance of Government contracts or subcontracts, unless termination is not in the best interest of the Government. The contractor is not allowed to extend the time for use of property provided under the facilities contract without Government authorization.
Use the clause at 252.225-7030, Restriction on Acquisition of Carbon, Alloy, and Armor Steel Plate, as prescribed in 225.7017-4.
When a contractor will be responsible for preparing requisitioning documentation, include in the contract the requirement to prepare the documentation in accordance with DoD 4000.25-1-M, Military Standard Requisitioning and Issue Procedures (MILSTRIP). Copies are available from the address cited at 251.102(e)2.b(2).
(b)
(c) All Government-furnished mapping, charting, and geodesy (MC&G) property is under the control of the Director, National Imagery and Mapping Agency (NIMA).
(i) MC&G property shall not be duplicated, copied, or otherwise reproduced for purposes other than those necessary for contract performance.
(ii) Upon completion of contract performance, the contracting officer shall—
(A) Contact the Director, NIMA(PP), 8613 Lee Highway, Fairfax, VA 22031-2137, for disposition instructions;
(B) Direct the contractor to destroy or return all Government-furnished MC&G property not consumed during contract performance; and
(C) Specify the destination and means of shipment for material to be returned to the Government.
Use the clause at 252.245-7000, Government-Furnished Mapping, Charting, and Geodesy Property, in solicitations and contracts when mapping, charting, and geodesy property is to be furnished.
(1) The DoD normally recovers a fair share of nonrecurring costs of special tooling and special test equipment by including these costs in its calculation of the nonrecurring cost recoupment charge when major defense equipment is sold by foreign military sales or direct commercial sales to foreign governments or international organizations. Major defense equipment is defined in DODD 2140.2, Recoupment of Nonrecurring Costs on Sales of U.S. Products and Technology, as any item of significant combat equipment on the United States Munitions List having a nonrecurring RDT&E cost of more than $50 million or a total production cost of more than $200 million.
(2) When these cost thresholds are not met, the contracting officer shall assess rental charges for use of special tooling and special test equipment pursuant to the Use and Charges clause when administratively practicable.
(1)
(i) The use will not interfere with foreseeable requirements of the United States;
(ii) The work is undertaken as a DoD foreign military sale; or
(iii) For a direct commercial sale, the foreign country or international organization would be authorized to contract with the department concerned under the Arms Export Control Act.
(2)
(ii) When a particular foreign government or international organization has funded the acquisition of specific production and research property, do not assess the foreign government or international organization rental charges or
(3)
(ii) Requests for waivers or reduction of charges for the use of Government facilities on work for foreign governments or international organizations shall be submitted to the contracting officer who shall refer the matter through contracting channels. In response to these requests, approvals may be granted only by the Director, Defense Security Cooperation Agency for particular sales that are consistent with paragraph (1)(iii) of this section.
(a)(i) Non-Government use of industrial plant equipment (IPE) exceeding 25 percent requires prior approval of the—
(A) Assistant Secretary of the Army (RD&A);
(B) Assistant Secretary of the Navy (RD&A);
(C) Assistant Secretary of the Air Force (Acquisition); or
(D) Director, Defense Logistics Agency.
(ii) The authority in paragraph (a)(i) of this section may be delegated to the head of a contracting activity. Any redelegation requires the approval of the Office of the Deputy Under Secretary of Defense (Industrial Affairs and Installations).
(iii) To determine percentage—
(A) Compute the percentage of non-Government use on time available for use. Use contractor's normal work schedule as represented by the scheduled production shift hours.
(B) Use a base time period which is neither less than three months nor more than one year.
(C) Use may be averaged at a single plant for all items costing less than $25,000.
(iv) Contractors should submit requests for non-Government use of IPE to the contract administration office at least six weeks before the projected use. The requests shall include:
(A) Total number and acquisition cost of IPE items; and
(B) For each unit of IPE with an acquisition cost of $25,000 or more, an itemized list including nomenclature, plant equipment code, year of manufacture and acquisition cost.
(v) Approving officials shall retain for periodic review, documentation of the circumstances justifying non-Government use of IPE.
If adequate controls are in place to meet the requirements of the clause at 252.242-7004, Material Management and Accounting System, the contractor's material control system may physically commingle inventories that may include materials for which costs are charged or allocated to fixed-price, cost-reimbursement, and commercial contracts. Government-furnished material (GFM) may not be physically commingled with other material, nor may GFM be used on contractor's commercial work.
(a) The contractor may use DD Form 1342, DoD Property Record, as a source document for setting up prescribed records.
The contractor shall prepare a DD Form 1342 in accordance with instructions contained in AR 700-43/NAVSUP PUB 5009/AFM 78-9/DLAM 4215.1, Management of Defense-Owned Industrial Plant Equipment (IPE)—
(1) Upon receipt and acceptance of each item of IPE including items which, though part of a manufacturing
(2) Whenever major changes occur in the data initially submitted to Defense Supply Center Richmond (DSCR) (as specified by DLAM 4215.1);
(3) When IPE, including general purpose components of special test equipment which otherwise qualify as IPE, is no longer required for the purpose authorized or provided; or
(4) When disposal is completed.
(a) Use the clause at 252.245-7001, Reports of Government Property, in all solicitations and contracts containing one of the following clauses—
(1) FAR Section 52.245-2, Government Property (Fixed-Price Contracts);
(2) FAR Section 52.245-5, Government Property (Cost Reimbursement, Time-and-Material, or Labor-Hour Contracts;
(3) FAR Section 52.245-7, Government Property (Consolidated Facilities);
(4) FAR Section 52.245-10, Government Property (Facilities Acquisition); or
(5) FAR Section 52.245-11, Government Property (Facilities Use).
(1)
(i) Narcotic, depressant, stimulant, or hallucinogenic drug or substance;
(ii) Any other drug or substance controlled under Title II of the Comprehensive Drug Abuse Prevention and Control Act of 1970; or
(iii) A drug or substance required to be controlled by international treaty, convention or protocol.
(2)
(3)
(4)
(a)
(2) The written authorization shall, as a minimum—
(i) Designate the contractor as an “accredited contractor”;
(ii) Identify the plant clearance actions to be performed;
(iii) State that the Government may cancel part of or all of the authorization to perform plant clearance actions; and
(iv) Provide for plant clearance officer participation when required.
(b)
(2) The plant clearance officer shall—
(i) Evaluate the adequacy and ensure compliance with contractor procedures;
(ii) Ensure discrepancies are promptly resolved;
(iii) Advise the contractor of screening and inventory schedule requirements;
(iv) Respond to contractor requests to withdraw Government-furnished property from inventory schedules;
(v) Evaluate physical, quantitative, and technical allocability of contractor inventory prior to disposal using Standard Form 1423, Inventory Verification Survey, as a guide;
(vi) Direct contractor to delay disposition of nonallocable inventory pending a contracting officer decision;
(vii) With the contractor's assistance, establish criteria for review and approval of selected contractor disposal decisions;
(viii) Complete first endorsement section of DD Form 1640, Request for Plant Clearance, on referrals from plant clearance officers at prime contract administration offices for the disposal of subcontractor inventory; forward inventory schedules to the contractor for processing; and forward completed case file to the referring activity; and
(ix) Work with the contractor, screeners, and buyers to ensure that the Government receives maximum reutilization and disposal proceeds.
(c)
(1) Ensure inventory schedule acceptability. Use DD Form 1637, Notice of Acceptance of Inventory, if desired;
(2) Suspend disposition of property when assets are determined nonallocable (FAR 45.606-3);
(3) Withdraw property from inventory schedules and notify the affected screening activities. Obtain plant clearance officer approval for withdrawal of Government furnished property from inventory schedules (FAR 45.606-4);
(4) Determine method of disposal under established priorities and document disposal decisions and actions;
(5) Assign the automatic release date and the surplus release date;
(6) Initiate prescribed screening and effect resulting transfers and donations;
(7) Account for disposal of all contractor inventory and application of proceeds and submit to the plant clearance officer a Standard Form 1424, Inventory Disposal Report, or equivalent;
(8) Maintain the donable file and release property to eligible donees (FAR 45.609);
(9) Prepare, approve, sign, and maintain official plant clearance files and required forms (245.7101);
(10) Not conduct noncompetitive sales of surplus contractor inventory; and
(11) Notify the plant clearance officer in advance when bidding on property.
(a) North Atlantic Treaty Organization (NATO) cooperative project agreements may include disposal provisions of jointly acquired property without regard to any applicable disposal laws of the United States.
(b) Disposal of such property may include a transfer of the U.S. interest in the property to one of the other governments participating in the agreement, or the sale of the property.
(c) Payment for the transfer or sale of any U.S. interest shall be made in accordance with the terms of the project agreement.
(1) Contractors authorized to sell inventory may not knowingly sell the inventory to any person or that person's agent, employee, or household member if that person—
(i) Is a civilian employee of the DoD or the U.S. Coast Guard; or
(ii) Is a member of the armed forces of the United States, including the Coast Guard; and
(iii) Has any functional or supervisory responsibilities for or within the Defense Reutilization and Marketing Program, or for the disposal of contractor inventory.
(2)(i) A contractor's authority to approve a subcontractor's sale, purchase, or retention at less than cost, and the subcontractor's authority to sell, purchase, or retain at less than cost if approved by a higher-tier contractor, does not include authority to approve—
(A) A sale by a subcontractor to the next-higher tier contractor or to an affiliate of such contractor or of the subcontractor; or
(B) A sale, purchase, or retention at less than cost, by a subcontractor affiliated with the next higher-tier contractor.
(ii) The written approval of the plant clearance officer is required for each
(3)
(4)
(5)
(a) If the schedules are acceptable, the plant clearance officer shall, within 15 days, complete and send the contractor a DD Form 1637, Notice of Acceptance of Inventory.
(b) To assist in verifying inventory allocability, the plant clearance officer shall follow the instructions in 245.7201.
(d)
(4) The contractor shall use the following codes together with the disposal codes 1 through 9, X, and S (e.g., A1, F7, SS) to indicate the condition of the property—
A—New, used, repaired, or reconditioned property; serviceable and issuable to all customers without limitations or restrictions; includes material with remaining shelf life of more than six months.
B—New, used, repaired, or reconditioned property; serviceable and issuable or for its intended purpose but restricted from issue to specific units, activities, or geographical areas because of its limited usefulness or short service-life expectancy; includes material and remaining shelf life of three to six months.
F—Economically reparable property which requires repair, overhaul or reconditioning; includes reparable items which are radioactively contaminated.
H—Property which has been determined to be unserviceable and does not meet repair criteria.
S—Property that has no value except for its basic material content.
(e)
(4)
(ii)
For termination inventory included in a settlement proposal, include cost of inventory acquired for performance of the entire contract in column F1 and cost of inventory acquired solely for the terminated portion of the contract in column F2. Cost of inventory acquired for the entire contract must be prorated between the terminated and nonterminated portions.
(a) The contractor shall list excess industrial plant equipment (IPE) on DD Form 1342, DoD Property Record, and submit it to the Government property administrator for review and transmittal to the plant clearance officer. For numerically controlled IPE, the contractor shall prepare and submit DD Form 1342, section VI, (page 2), Numerically Controlled Machine Data.
(b) Upon receipt of the DD Form 1342, the plant clearance officer will—
(1) Designate the 75th day from the date of receipt as the automatic release date (ARD) and the 90th day as the screening completion date (SCD); and
(2) Enter the ARD in Block 24 of the DD Form 1342.
(a)(i) The contractor may request a pre-inventory scrap determination, made by the plant clearance officer after an on-site survey, if inventory is
(ii) If the contractor has an approved scrap procedure, routine disposal of production scrap and spoilage is authorized, and a plant clearance case is unnecessary. The contractor may similarly dispose of worn, broken, mutilated, or otherwise rejected parts from overhaul and repair contracts with the approval of the plant clearance officer.
(iii) In addition to segregating scrap to maximize proceeds, the contractor may also consolidate sales of Government and contractor scrap if approved by the plant clearance officer. When a consolidated sale is approved, the plant clearance officer shall waive the scrap warranty required at 245.607-70.
(iv) When a contractor's approved scrap procedure does not require physical segregation of Government and contractor scrap, the plant clearance officer shall ensure the proceeds of scrap sale are equitably distributed.
(b) Precious metals are silver, gold, platinum, palladium, rhodium, iridium, osmium, and ruthenium.
(i) At the beginning of every fiscal year, the Defense Reutilization and Marketing Service (DRMS) will provide each contract administration office with disposition instructions for certain categories of precious metals-bearing property, including scrap and usable items containing recoverable quantities of these metals. The disposition instructions—
(A) Will remain in effect for the entire fiscal year, unless modified by DRMS; and
(B) Will contain a fund citation to be used when disposition requires shipment of precious metals-bearing property for recovery.
(ii) Plant clearance officers shall obtain disposition instructions for precious metals-bearing property not covered by the annual disposition instructions from the Defense Reutilization and Marketing Service, Attn: DRMS-OC, 74 N. Washington Avenue, Battle Creek, MI 49017-3092.
(a) If the contractor sells its inventory as scrap to anyone, including a holding contractor, the contractor shall include in the sales contract a signed copy of DD Form 1639, Scrap Warranty.
(b) The contracting officer may release the contractor from the terms of the scrap warranty in return for consideration paid to the Government. The consideration will represent the difference between—
(1) The sale price of the scrap; and
(2) A fair and reasonable price for the material if it had been sold for purposes other than scrap.
(c) The contractor shall pay the consideration to the Government and the Government may execute the release even though the contract containing the warranty was not made directly with the Government.
(d) If the scrap is resold to a second buyer, the first buyer shall obtain a scrap warranty from the second buyer. Upon receipt of the second buyer's scrap warranty, the Government will release the first buyer from liability under the original warranty.
(a) The plant clearance officer shall arrange for inspection of property at the contractor's plant if requested by a prospective transferee, in such a manner as to avoid interruption of the contractor's operations.
(b)(1) For the first 30 days, property screening will be limited to the contracting agency and the requiring agency, when they are not the same. The requiring agency shall have priority for retention of listed items.
(a)
(2) The plant clearance officer will perform the initial screening of the composite STE unit.
(A) If the contracting department/agency and the requiring department/agency decline the STE or the standard components or do not approve their transfer to another contract; then,
(B) The plant clearance officer will screen the STE and any severable components with the—
(
(
(
(
The Defense Logistics Agency will pay for the movement of industrial plant equipment under the direction and control of the Defense Industrial Plant Equipment Center.
(a) Screen serviceable and usable contractor inventory through CIRS when it—
(1) Is listed on SF 1428, Inventory Schedule B, or SF 1434, Inventory Schedule E; and
(2) Has a national stock number, and line item acquisition value in excess of $50; or
(3) Has a line item acquisition value in excess of $1,000 ($500 for furniture) but no national stock number.
(b) Using Standard Form 120, Report of Excess Personal Property, the plant clearance officer will send two copies of SF 1428 or SF 1434 (or authorized substitutes) to the Defense Reutilization and Marketing Service (DRMS). DRMS will notify the plant clearance officer of items processed, not accepted, or available for local area screening.
(c) Property subject to CIRS processing will be screened within DoD for 30 days. On the 31st day, unless otherwise specified on SF Form 120, appropriate items not requisitioned by DoD will be reported to the General Services Administration (GSA) for standard Federal agency and donation screening. Examples of items which are not reportable to GSA include usable hazardous cleaners and solvents.
(d) For requisitioned items, DRMS will issue shipping instructions to the plant clearance officer. During the first 45 days of the screening period, the plant clearance officer forwards any requisitions received to DRMS. After 45 days, the plant clearance officer forwards the requisition directly to GSA.
(e) The contractor sends one copy of the shipping document to DRMS when shipment has been made.
(f) Unless directed by the contracting officer, motor vehicles excess to Army and Navy contracts shall not be screened through CIRS.
(a)
(b)
(i) Screen excess IPE against all DoD requirements with priority given to requirements of the owning department/agency through the 30th day.
(ii) For items selected, issue shipping instructions containing accounting, funding, transportation, routing recommendations, and preservation instructions.
(2)
(ii) GSA will—
(A) Approve department/agency requests on first come-first served basis;
(B) Approve and forward transfer orders to the contract administration office; and
(C) Forward copies of approved transfer orders to DSCR.
(3)
(i) Provide for screening for donation;
(ii) Receive, approve and forward donation applications to the contract administration office; and
(iii) Send copies of approved applications to DSCR.
(4)
(c) The plant clearance officer shall ensure that a copy of the shipping document is submitted to DSCR when IPE is transferred use-to-use or use-to-storage within DoD.
(d) When GSA sells IPE that is excess to ownership but not to DoD requirements, report the sale to DSCR in accordance with department/agency procedures.
Report ADPE that is Government-owned or leased by the contractor (with Government purchase option or other interests, including use rights) to the Defense Information Systems Agency, Defense Automation Resources Management Program Division (DARMP). DARMP does all required screening, including General Services Administration screening, for ADPE. (See the Defense Automation Resources Management Manual.)
Agencies may donate, with GSA approval and without expense to the United States, certain material not needed by DoD to certain organizations such as veterans’ organizations, soldiers’ monument associations, State museums, and incorporated educational, not for profit museums. For further guidance, see DoD 4160 .21-M, Defense Reutilization and Disposal Manual.
(a) See Subpart 245.73 for sales of contractor inventory under the control of DoD.
(1) Unless otherwise provided in the contract, the proceeds of any sale, purchase, or retention shall be—
(i) Credited to the Government as part of the settlement agreement;
(ii) Credited to the price or cost of the contract;
(iii) Applied as otherwise directed by the contracting officer; or
(iv) Forwarded to the plant clearance officer. The plant clearance officer—
(A) Within two days after receipt will send the proceeds and a DD Form 1131, Cash Collection Voucher, to the designated disbursing officer. Identify on the DD Form 1131 the contractor name and contract number; or
(B) For contractors with an approved scrap procedure, will ensure the proceeds are appropriately applied to an overhead account. The plant clearance officer may assign a representative who, with the assistance of the contract auditor, shall periodically validate that proceeds from sales of production generated scrap are collected and applied to the appropriate account.
(2) Except as prescribed in paragraph (1)(iv)(B) of this subsection, the plant clearance officer will not close the plant clearance case until verification is received that the credit has, in fact, been properly applied.
(1) Normally, DRMS disposal activities shall be used to dispose of surplus contractor inventory located outside the United States or Canada. However, if authorized by the contracting officer, a contractor may sell or make other disposition of inventory in foreign countries.
(2) Sale or other disposition of foreign inventory by the contractor, including sale to foreign governments, requires that—
(i) The sales contract or other document transferring title include the following certificate:
The Purchaser certifies that the property covered by this contract will be used in (
(ii) The contracting officer approve sales contracts, resales, or exports. Approval is permitted only if—
(A) The proposed purchaser's name is not on the list of Parties Excluded from Procurement Programs; and
(B) The sales contract or other document forbids exports by purchasers and subpurchasers to communist areas (FAR 25.702) or other prohibited destinations.
(a) Before authorizing storage, the contracting officer shall ensure funds are available to pay for the storage and related tasks. In addition, the contracting officer shall ensure an annual review of the need for continued storage at Government expense.
(b) All storage contracts or agreements shall be fully funded and separately priced and shall include all allocable costs.
The plant clearance officer shall—
(1) Record the reason for disposing of the property—
(i) As scrap and salvage;
(ii) By abandonment or destruction; and
(iii) By noncompetitive sale;
(2) Use DD Form 1641, Disposal Determination/Approval, to record disposal determinations; and
(3) File the completed form in the plant clearance case file.
(a) The head of a contracting activity for the Defense Logistics Agency, or the head of the contract administration office for other departments and agencies shall select, appoint, or terminate (in writing) property administrators and plant clearance officers.
(b) In selecting qualified property administrators and plant clearance officers, the appointment authority shall consider experience, training, education, business acumen, judgment, character, and ethics.
The plant clearance officer shall—
(a) Instruct the contractor on the preparation of inventory schedules;
(b) Make pre-inventory scrap determinations;
(c) Determine the acceptability of inventory schedules and DD Forms 1342, DoD Property Record;
(d) Prepare and maintain plant clearance cases and disposal documents;
(e) Initiate screening and provide technical support to screeners in the selection of assets;
(f) Conduct or arrange for verification of the following—
(1) Quantity, condition, description, and special processing requirements of property listed on inventory schedules;
(2) Technical and quantitative allocability of property;
(g) Ensure the timely shipment or release by the contractor of property selected for transfer and donation;
(h) Determine the appropriate method of disposal for items not selected for
(i) Evaluate and monitor the contractor's surplus property sales program;
(j) For individual surplus property sales—
(1) Approve method of sale;
(2) Ensure the sales offerings meet prescribed requirements;
(3) Witness bid openings;
(4) Evaluate bids;
(5) Approve sale awards;
(6) Secure anti-trust clearances, as required;
(7) Recommend the reasonableness of selling expenses; and
(8) Ensure that sales proceeds are collected and property credited;
(k) Monitor ongoing plant clearance actions to ensure delays are minimized and, when necessary, work with the contractor and property administrator to implement improvements;
(l) Evaluate the adequacy of the contractor's property disposal procedures;
(m) Support the property administrator during the compliance analysis of the disposition portion of the contractor's property control procedures;
(n) Report all disposal deficiencies to the property administrator;
(o) Account for all contractor inventory reported for disposal by the contractor and prepare prescribed plant clearance reports; and
(p) Advise and assist the contractor, contracting officer, inventory manager, Federal agencies, and eligible donees in actions related to the proper and timely disposal of contractor inventory.
Use the forms listed below in performance of plant clearance actions.
Use for transfers, donations, and sales of motor vehicles. The contracting officer shall execute the SF 97 and furnish it to the purchaser.
Use for transfer and donation of contractor inventory. Donations of industrial plant equipment may be shipped via DD Form 1149. This form may also be used to consolidate contractor inventory redistribution system-directed shipments going to the same destination.
Use for shipments of excess industrial plant equipment and contractor inventory redistribution system (CIRS) inventory.
Use to request plant clearance assistance or transfer plant clearance.
Use the following guidance for verifying inventory schedules—
(a)
(i) Is more than required or reasonably expected to be required for completion of the contract; or
(ii) Might be usable on the current contract, or diverted to other commercial work or Government use.
(2) Review the contractor's—
(i) Recent purchases of similar material;
(ii) Plans for current and scheduled production;
(iii) Stock record entries; and
(iv) Bills of material for similar items.
(b)
(c)
(a) Upon receipt of an acceptable inventory schedule or a DD Form 1342, DoD Property Record, the plant clearance officer shall establish a plant clearance case file. The case folder will—
(1) Identify the case number (see 245.7203);
(2) Indicate the contractor's name and contract number;
(3) Note the word “Termination” if applicable; and
(4) Consolidate all inventory schedules applicable to one contract at the same location, if possible.
(b) As a minimum, include in the plant clearance case file—
(1) Inventory schedules or DD Form 1342, DoD Property Record, annotated to show all disposal actions;
(2) Copies of documents forwarding inventory schedules to the appropriate screening activity;
(3) Shipping or other instructions and correspondence directing disposition of contractor inventory;
(4) Shipping documents transferring inventory;
(5) Inventory verification survey or other documents showing completion of allocability review;
(6) Forms authorizing donation or sale;
(7) Document showing disposition of proceeds from plant clearance actions; and
(8) Any other documents pertinent to disposal actions, including review board cases, antitrust clearances, and inventory disposal reports.
(a) Use a three-part, 11-character number constructed as follows:
(1) Part 1: DoD Activity Address Number (6-character alphanumeric code) assigned to the contract administering activity.
(2) Part 2: Locally assigned 4-character consecutive alphanumeric code, beginning each calendar year with 001 continuing as necessary through ZZZ. The fourth digit is the last number of the calendar year.
(3) Part 3: The 11th character is a single letter identifying the department/agency:
(b) Record the plant clearance number on DD Form 1635, Plant Clearance Case Register, or mechanized equivalent.
(a) Prepare Standard Form 1424, Inventory Disposal Report, for each completed plant clearance case. For terminated contracts, prepare a consolidated Inventory Disposal Report for each termination docket.
(b) Distribute the report to the contracting officer and to any other activities having an interest in the inventory disposal.
(c) Items on the form are self-explanatory except:
(1) Item 12—Insert net change due to shortages, overages, errors, pricing, or withdrawals, etc. Explain in item 16, Remarks.
(2) Item 14—Insert amount contractor is retaining or purchasing at full acquisition cost (see FAR 45.605-1).
(3) Item 15—Insert acquisition cost and net credit (full credit less approved handling, transportation, and restocking charges for items returned to supplier).
(4) Item 16—Insert the acquisition cost for all transfers accomplished. For lines 16A and 16B, insert subtotals as indicated.
(5) Item 18—Insert acquisition cost and gross proceeds. When approved sale costs are reimbursed from proceeds, show net proceeds in Item 26, Remarks.
(6) Items 20 and 21—Use to identify and report transactions not otherwise identified, such as assets shipped to a
(7) Item 25—Totals dispositions must equal amounts on line 13 and must reflect all disposal actions within the case.
(8) Item 26—Show the specific disposition of proceeds reported in Items 14, 15, and 18. Also indicate amounts deleted for specific contractor claims, or applied as a credit to the claim. Explain any entry requiring explanation.
(a) Contract administration offices with plant clearance responsibilities will—
(1) Use DD Form 1638, Report of Excess and Surplus Contractor Inventory, or mechanized equivalent, to report the disposition of contractor inventory. Do not include disposition actions transferred to other offices. Unless headquarters of the administering activity directs otherwise, complete only the column total for each line of this report.
(2) Prepare quarterly reports for periods ending March 31, June 30, September 30, and December 31. Activities preparing manual reports will submit duplicate reports to the headquarters of the administering activity within ten working days after the close of the report period. (Report Control Symbol DD(I&L)(Q)1430).
(b) Items on the report are self-explanatory except:
(1) Line 1—Insert totals from line 7 of the preceding report.
(2) Line 2—Insert net changes due to shortages, overages, errors, or withdrawals (other than purchases or retention at cost).
(3) Line 3—Insert total excess inventory reported by contractors during the report period.
(4) Line 5—Insert total plant clearance cases completed during the report period. Do not report cases as completed until all property is disposed. Acquisition cost must equal line 19.
(5) Line 8—Insert amount retained or withdrawn at full cost.
(6) Line 9—Insert acquisition cost in the “Acquisition Cost” column and insert acquisition cost less handling, transportation, or restocking charges, in the “Proceeds” column.
(7) Line 10—Insert acquisition cost of all transfers completed during the report period. On lines 10A through 10H, insert subtotals representing transfers to the agency indicated. Exclude amounts on lines 10A through 10H when computing line 19 totals.
(8) Line 12—Insert the acquisition cost and gross proceeds. When sale costs are reimbursed from proceeds, show net proceeds in remarks.
(9) Lines 14 and 15—Used to identify and report other transactions.
(10) Line 18—Insert Section II totals. Line 18 acquisition cost must equal acquisition cost on line 5.
As a minimum, the plant clearance officer will provide the following information in a letter forwarding DD Forms 1342 to DSCR—
(a) Number of DD Forms 1342 included;
(b) Automatic release date;
(c) Screening complete date;
(d) Contractor's name and address;
(e) Contract number;
(f) Contracting activity that awarded the contract under which the contractor acquired the equipment;
(g) Location of the industrial plant equipment;
(h) Total acquisition cost;
(i) A statement advising that the automatic release date will not be extended;
(j) A note stating that—
(1) Request for transfer or shipment must include appropriate fund citations for packing, crating, and handling charges; and
(2) Government bills of lading (GBLs) should be furnished or, if shipment will be accomplished by other than GBL, DSCR must cite transportation funds; and
(k) The plant clearance officer's signature block.
(a) Screening must be completed before any surplus contractor inventory sale.
(b) Except as provided in 245.7307, sales of surplus contractor inventory shall be competitive.
(c) The commander of the contract administration office must approve the use of auctions, spot bids, or retail sales.
(a) Describe the property as “used” or “unused.” Indicate if unused property is still in the manufacturer's original containers. Qualifying statements such as “well-preserved” or “repairs required” are authorized. Do not use condition codes or the terms “new” or “salvage.”
(b) Property descriptions must be accurate and adequate for identification by prospective bidders. Use commercial terminology and original manufacturer and brand name, if applicable.
(a) Consider combining property into lots when the quantities, value, or nature of the property makes it uneconomical to sell separately.
(b) When lotting is appropriate and economically practical—
(1) Size the lots to encourage bidding by small businesses or individuals;
(2) Lot unused items by make or manufacturer, except when quantities or dollar values are small;
(3) Lot commercially similar items when practicable;
(4) Lot used and unused items separately unless quantities, value, or nature of property makes it uneconomical to sell separately;
(5) Size lots large enough to ensure the selling costs are not disproportionate to the anticipated proceeds.
Offerors may be solicited to bid for groups or for the entire offering by use of the following:
Item
This item consists of all property listed and described in Items
(a)
(b)
(a) The plant clearance officer will ensure the contractor solicits a sufficient number of bidders to obtain adequate competition.
(b) When large quantities of property, special commodities, or unusual geographic locations are involved, the plant clearance officer is encouraged to obtain additional listings from: Defense Reutilization and Marketing Service, Attn: DRMS-OCR, 74 North Washington Avenue, Battle Creek, MI 49017-3092.
(a) The contractor will use formal invitations for bid unless the plant clearance officer approves use of informal bid procedures.
(b) The contractor shall solicit bids at least 15 calendar days before bid opening to allow adequate opportunity to inspect property and prepare bids.
(c) For large sales, the contractor may use summary lists of items offered as bid sheets with detailed descriptions attached.
(d) In addition to mailing or delivering notice of the proposed sale to prospective bidders, the contractor may, when the results are expected to justify the additional expense—
(1) Display a notice of the proposed sale in appropriate public places.
(2) Publish a sales notice in appropriate trade journals or magazines and local newspapers.
(e) When the acquisition cost of the property to be sold at one time, in one place, is $250,000 or more, the contractor shall send a notice of the proposed sale to: U.S. Department of Commerce, Commerce Business Daily, Sales Section, P.O. Box 5999, Chicago, IL 60680.
(1) The contractor shall send the CBD notice at least 20 days before bid opening, or date of sale.
(2) CBD notices shall be—
(i) Double spaced and in synopsis form suitable for printing;
(ii) Transmitted by fastest mail available; and
(iii) Contain the following information in the order listed:
(A) Name and address of contractor issuing the invitation for bids;
(B) Name or title, address, and telephone number of the official from whom copies of the sales offering and other information can be obtained;
(C) Description of the property to be sold including, when desired, the total estimated acquisition cost;
(D) The number of the invitation or sale;
(E) The date of the sale or bid opening;
(F) The type of sale, i.e., sealed bid, spot bid, auction; and
(G) The location of the property.
(f) The plant clearance officer or representative will witness the bid opening. Within two working days after bid opening, the contractor will submit to the plant clearance officer two copies of an abstract of all bids, signed by the witnessing Government representative.
(a) Upon approval of the plant clearance officer, the contractor may issue informal invitations to bid (orally, telephonically, or by other informal media), provided—
(1) Maximum practical competition is maintained;
(2) Sources solicited are recorded; and
(3) Informal bids are confirmed in writing.
(b) Bids by the contractor or its employees shall be submitted to the plant clearance officer prior to soliciting bids from other prospective bidders.
The plant clearance officer will—
(1) Evaluate bids to establish that the sale price is fair and reasonable, taking into consideration—
(i) Knowledge or tests of the market;
(ii) Current published prices for the property;
(iii) The nature, condition, quantity, and location of the property; and
(iv) Information from the Defense Reutilization and Marketing Service.
(2) Approve award to the responsible bidder whose bid is most advantageous to the Government, price and other factors considered. Award shall not be approved to any bidder who is not eligible to enter into a contract with the DoD due to inclusion on the list of Parties Excluded from Procurement Programs. If a compelling reason exists to award to a bidder on the excluded list, the plant clearance officer shall request approval from the headquarters of the administering activity.
(3) Notify the contractor within five working days of the bidder to whom an award shall be made. The contractor shall make the award, collect the proceeds of the sale, and release the property to the purchaser. The contractor shall provide the plant clearance officer with evidence of delivery reflecting actual quantities released to the purchaser.
When sale services are needed, the plant clearance officer will document the reasons in the case file and make arrangements directly with the Defense Reutilization and Marketing Service (DRMS) or General Services Administration (GSA). The arrangements will include a requirement to return all proceeds to the plant clearance officer for crediting in compliance with FAR 45.610-3.
(a) Non-competitive sales include purchases or retention at less than cost by the contractor.
(b) Non-competitive sales may be made when—
(1) The contracting department/agency or the plant clearance officer determines that this method is essential to expeditious plant clearance;
(2) The sale is otherwise justified on the basis of circumstances listed in 245.7307-2;
(3) The Government's interests are adequately protected; and
(4) FAR subpart 1.7 requirements are met.
(c) Non-competitive sales shall be at fair and reasonable prices not less than those reasonably expected under competitive sale.
(a) Conditions justifying non-competitive sales are—
(1) Scientific equipment allocated to terminated research and development contracts with educational institutions;
(2) No acceptable bids received under an advertised competitive sale;
(3) Property value so small that anticipated proceeds would not warrant formal competitive sale;
(4) Sale to States, territories, possessions, political subdivisions thereof, or tax-supported agencies therein, and the estimated fair market value of the property and other satisfactory terms of disposal are obtained;
(5) Specialized nature of the property would not create bidder interest;
(6) Removal of the property would reduce its value or result in disproportionate handling expenses; or
(7) Such action is essential to the Government's interests.
(b) The contracting department/agency will provide the contract administration office the sales justification and any special sales provisions when the department/agency decides to sell production equipment to the contractor by non-competitive sale.
(a) When contractor inventory with an estimated fair market value of $3 million or more or any patents, processes, techniques, or inventions, regardless of cost, are sold or otherwise disposed of to private interests notify the Attorney General and the General Services Administration (GSA) of the proposed terms and conditions of disposal. Submit the following information to the Department of Justice and the GSA through the contract administration agency channels. Report Control Symbol DD-ACQ(AR) 1492 applies.
(1) Location and description of property (specify tonnage if scrap);
(2) Proposed sale price (explain if the proposed purchaser was not highest bidder);
(3) Acquisition cost of property;
(4) Manner of sale, indicating whether by—
(i) Sealed bid (specify number of bidders solicited and bids received);
(ii) Auction or spot bid (state how sale was advertised); or
(iii) Negotiation (explain why property was not sold competitively);
(5) Proposed purchaser's name, address, and trade name (if any) under which proposed purchaser is doing business;
(6) If a corporation, provide state and date of incorporation, and name and address of—
(i) Each holder of 25 percent or more of the corporate stock;
(ii) Each subsidiary; and
(iii) Each company under common control with proposed purchaser;
(7) If a partnership, provide—
(i) Name and address of each partner; and
(ii) Other business connections of each partner;
(8) Nature of proposed purchaser's business (indicate whether its scope is local, statewide, regional, or national);
(9) Estimated dollar volume of sales of proposed purchaser (as of latest calendar or fiscal year);
(10) Estimated net worth of proposed purchaser; and
(11) Intended use of property.
(b) Do not dispose of property until the Attorney General determines whether the proposed disposal action
(c) If the Attorney General advises that the proposed disposition is inconsistent with the antitrust laws, do not continue with the proposed disposition.
(d) Under non-competitive sales, the prospective purchaser shall be informed that final consummation of the sale is subject to determination by the Attorney General.
(e) Under competitive or non-competitive sales, the purchaser is required to provide the information required in paragraph (a) of this subsection.
Sale by formal invitation shall include, as a minimum, the terms and conditions in this section.
The Bidder is invited to inspect the property prior to submitting a bid. Property will be available for inspection at the places and times specified in the Invitation. Failure to inspect property does not constitute grounds for the withdrawal of a bid after opening.
(a) Unless otherwise specifically provided in the Invitation, all property is offered for sale “as is” and “where is.” If the Invitation provides that the Contractor will load, then “where is” means f.o.b. conveyance at the point specified in the Invitation.
(b) The description is based on the best available information. However, the Contractor makes no warranty, express or implied, as to quantity, kind, character, quality, weight, size, or description of the property or its fitness for any use or purpose.
(c) Except as provided in Conditions 245.7306-8, Variations in Quantity or Weight, and 245.7306-10, Risk of Loss, no request for adjustment in price or for rescission of the sale will be considered. This is not a sale by sample.
(a) Bidder agrees that this bid is firm and irrevocable within the acceptance period specified in the Invitation (or, if not specified, not less than ten or more than 60 days).
(b) The right is reserved to reject any or all bids, to waive any technical defects in bids, and, unless otherwise specified in the offering or by the Bidder, to accept any one item or group of items in the bid. Unless the invitation provides otherwise, bids—
(1) May be on any or all items;
(2) Must be submitted on the unit basis specified for that item;
(3) Must cover the total number of units designated for that item; and
(4) Unit prices govern.
(a) Purchaser agrees to pay the full purchase price for awarded property at the prices quoted in the bid. Unless an adjustment is required pursuant to Condition 245.7306-8, Variations in Quantity or Weight, payment must be made within the time specified for removal and prior to delivery of any of the property. In the event that any adjustment is made, payment must be made immediately after such adjustment.
(b) The full purchase price, or balance if a bid deposit was required, shall be paid to the Contractor in cash or by certified check, cashier's check, traveler's check, bank draft, or postal or express money order. The Contractor is not required to extend credit to any purchaser.
(c) The Contractor reserves the right to apply any bid deposits made under this Invitation by a bidder against any amounts due under a contract awarded by the Contractor under this Invitation. If the total sum due to the contractor is less than the amount deposited with the bid, the difference shall be promptly refunded. Deposits accompanying bids which are not accepted shall be promptly returned.
(a) Unless otherwise specified in the Invitation, title to property sold under this Invitation shall vest in the Purchaser when full payment is made. If the Invitation provides for loading by
(b) A Standard Form 97, Certificate of Release of a Motor Vehicle, (or a State certificate of title) shall be furnished for motor vehicles and motor-propelled or motor-drawn equipment requiring licensing.
(a) Unless otherwise specified in the Invitation, the Purchaser shall be entitled to obtain the property upon vesting of title in the Purchaser. Delivery shall be made at the designated location, and removal will be at the Purchaser's expense within the time frame specified in the Invitation or any additional time allowed by the Contractor.
(b) The Purchaser shall reimburse the Contractor for any damage to the Contractor's property caused by Purchaser's removal operations. If additional time is required to remove the property, the Contractor, without limiting any other rights, may require the Purchaser to pay reasonable storage charges.
If the successful Bidder fails to make full payment, remove property by the specified date, or comply with any other terms and conditions of sale, the Contractor reserves the right to sell or otherwise dispose of any or all such property and to charge losses and incidental expenses to the defaulting Bidder. Bid deposits received (if required in the Invitation) shall be applied against such losses and expenses.
When property is sold on a “unit price” basis, the Contractor reserves the right to vary by up to 15 percent the quantity or weight listed in the Invitation and the Purchaser agrees to accept delivery of any quantity or weight within these limits. The purchase price shall be adjusted in accordance with the unit price and on the basis of the quantity or weight delivered.
(a) When weighing is necessary to determine the exact purchase price, the Purchaser shall arrange for and pay all weighing expenses. When removal is by truck, weighing shall be subject to supervision and accomplished on—
(1) Contractor scales;
(2) Certified scales; or
(3) Other scales acceptable to both parties.
(b) When removal is by rail, weighing shall be on railroad scales or by other means acceptable to the railroad for freight purposes. The Purchaser shall pay switching charges.
The Contractor is responsible for reasonable care and protection of the property until the date specified for removal. All risk of loss, damage, or destruction from any cause whatsoever shall be borne by the Purchaser after passage of title.
Contractor and Government liability, when liability has been established, shall not exceed the refund of any portion of the purchase price already received by the Contractor.
Any oral statement by the Contractor changing or supplementing the contract or any condition thereof is unauthorized.
The Bidder shall certify that the Bidder is not—
(a) A civilian employee of the Department of Defense or the United States Coast Guard whose duties include any functional or supervisory responsibility for disposal of contractor inventory;
(b) A member of the United States Armed Forces, including the Coast Guard, whose duties include any functional or supervisory responsibility for disposal of contractor inventory;
(c) An agent, employee or immediate member of the household of personnel in paragraphs (a) and (b).
The Purchaser or Bidder agrees to save the Contractor and Government harmless from any and all claims, demands, actions, debts, liabilities, judgments, costs, and attorney's fees arising out of, claimed on account of, or in any manner predicated upon loss of or damage to property of, and injuries to or the death of any and all persons whatsoever, in any manner caused or contributed to by the Purchaser or Bidder, their agents, servants or employees, while in, upon, or about the sale site on which the property sold or offered for sale is located, or while going to or departing from such areas; and to save the Contractor and Government harmless from and on account of damages of any kind which the Contractor may suffer as the result of the acts of any of the Purchaser's agents, servants, or employees while in or about the said sites.
When necessary, include the special conditions of this section in formal invitations.
When demilitarization of property is required, whether on or off contractor or Government premises, the invitation must include the following clause:
(a)
Item(s)
(1) For property located in the United States insert item number(s) and specific demilitarization requirements for item(s) shown in Attachment 1, Part 2 of Defense, Demilitarization Manual;
(2) For property located outside the United States, insert item number(s) and specific demilitarization requirements for item(s) shown in Attachment 1, Part 3 of DoD 4160.21-M-1, Defense Demilitarization Manual.
(b)
Property requiring demilitarization shall not be removed, and title shall not pass to the Purchaser, until demilitarization has been completed and approved by an authorized Contractor and Government representative. Demilitarization will be accomplished as specified in the contract. Component parts vital to the military or lethal purpose of the property shall be rendered unusable. The Purchaser agrees to assume all cost incident to the demilitarization and to restore the working area to its present condition after removing the demilitarized property.
(c)
(d)
(1) Repossess, demilitarize, and return the property to the Purchaser. The Purchaser hereby agrees to pay to the Contractor, prior to the return of the property, all costs incurred by the Contractor in repossessing, demilitarizing, and returning the property to the Purchaser.
(2) Repossess, demilitarize, and resell the property, and charge the defaulting Purchaser will all excess costs incurred by the Contractor. The Contractor shall deduct these costs from the purchase price and refund the balance of the purchase price, if any, to the Purchaser. In the event the excess costs exceed the purchase price, the defaulting Purchaser hereby agrees to pay these excess costs to the Contractor.
(3) Repossess and resell the property under similar terms and conditions. In the event this option is exercised, the Contractor shall charge the defaulting Purchaser with all excess costs incurred by the Contractor. The Contractor shall deduct these excess costs from the original purchase price and refund the balance of the purchase price, if any, to the defaulting Purchaser. Should the excess costs to the Contractor exceed the purchase price, the defaulting Purchaser hereby agrees to pay these excess costs to the Contractor.
Performance bonds are required when work, other than loading, is to be performed by the purchaser and a bond is considered necessary to ensure performance. Generally, performance bonds shall be 100 percent of the estimated cost of the work to be performed. If a 100 percent performance bond would be disadvantageous to the Contractor or to the Government, the
Within ten days after notice of award, the Purchaser shall furnish a performance bond in the sum of $
When the work to be performed by the purchaser warrants, use the following:
The Purchaser shall at the Purchaser's own expense purchase and maintain during the term of the contract insurance as follows:
(a) Standard workers’ compensation and employer's liability insurance required under State and Federal statutes. However, the Contractor may waive this requirement upon receipt of satisfactory evidence that the Purchaser is qualified as a self-insurer under applicable provisions of law.
(b) Bodily injury liability insurance in an amount not less than $300,000 for any one occurrence; and
(c) Property damage liability insurance.
The following warning shall be included when it cannot be certified that the property is completely harmless:
Purchasers are warned that the property purchased may contain items of an explosive, toxic, or inflammable nature, notwithstanding reasonable care exercised by the Contractor to render the property harmless. The Contractor and the Government assume no liability for damage to the property of the Purchaser, or for personal injuries or disabilities to the Purchaser or the Purchaser's employees, or to any other person, arising from or incident to the purchase of the property, or its use or disposition by the Purchaser. The Purchaser shall save the Contractor and the Government harmless from any and all such claims.
The sale of controlled substances, e.g., narcotics, stimulants, depressants, or hallucinogenic drugs, shall be subject to the following special conditions:
(a)
The undersigned represents and warrants that it is registered under The Comprehensive Drug Abuse Prevention and Control Act of 1970, and is authorized under the law and by the Attorney General, U.S. Department of Justice (Bureau of Narcotics and Dangerous Drugs) to buy controlled substances as a medical practitioner, dealer or manufacturer of controlled substances.
(b)
The undersigned represents and warrants that it is registered under Federal narcotics laws and is authorized by law and by the Bureau of Narcotics, United States Treasury Department, as a manufacturer of narcotics.
The following shall be used whenever the property offered for sale is capable of emitting ionized radiation:
Purchasers are warned that the property may be capable of emitting ionized radiation. The Contractor and the Government assume no liability for damage to the property of the Purchaser, or for personal injuries or disabilities to the Purchaser or the Purchaser's employees, or to any other person arising from or incident to the purchase of the property or its use or disposition by the Purchaser. The Purchaser shall hold the Contractor and the Government harmless from all such claims. The Purchase should warn possessors or users of the property that it may be capable of emitting ionized radiation.
The following condition shall be used whenever property, other than production scrap, is offered for sale as scrap:
The Purchaser represents and warrants that the property will be used only as scrap, and will not be resold until—
(a) Scrapping has been accomplished; or
(b) The Purchaser obtains an identical warranty from any subsequent purchaser.
When property with an acquisition cost of $3 million or more is to be sold, include the following in the invitation:
When the property offered for sale has an acquisition cost of $3 million or more, or consists of patents, processes, techniques, or inventions, irrespective of cost, the successful Bidder shall be required to furnish additional information and shall allow up to 60 days for acceptance of its bid. Award shall be made only upon advice from the Department of Justice that the proposed sale would not create or maintain a situation inconsistent with the antitrust laws.
The following special conditions of sale may be added at the option of the contractor:
For purchases of property subject to a state sales or use tax, a special condition of sale may stipulate that the Purchaser shall pay and the Contractor shall collect the amount of the tax, which shall be itemized separately on the billing document.
Other special conditions considered necessary by the Contractor are subject to the prior approval of the plant clearance officer. Approval will normally be granted provided the prescribed conditions of sale are not altered or affected and the interest of the Government is not adversely affected.
41 U.S.C. 421 and 48 CFR chapter 1.
Departments and agencies shall also—
(1) Develop and manage a cost effective quality program to ensure that contract performance conforms to specified requirements. Apply the quality program to all contracts for services and products designed, developed, purchased, produced, stored, distributed, operated, maintained, or disposed of by contractors.
(2) Conduct quality audits to ensure the quality of products and services meet contractual requirements.
(3) Base the type and extent of Government contract quality assurance actions on the particular acquisition.
(4) Provide contractors the maximum flexibility in establishing efficient and effective quality programs to meet contractual requirements. Contractor quality programs may be modeled on military, commercial, national, or international quality standards.
The contracting office may conduct product-oriented surveys and evaluations to determine—
(1) The adequacy of the technical requirements relating to quality; and
(2) Product conformance to design intent. Consider conducting the surveys and evaluations in conjunction with the activity responsible for technical requirements.
(a) Contracting offices are also responsible for—
(i) Assisting the technical activity in improving the quality requirements for contracts when first identified for competitive acquisition; and
(ii) Assisting in determining the cause of problems noted in user experience reports.
(b) The contracting office must coordinate with the quality assurance activity before changing any quality requirement.
(c) The activity responsible for technical requirements may prepare instructions covering the type and extent of Government inspections for acquisitions that are complex, have critical applications, or have unusual requirements.
(i) In preparing the instructions, the technical activity shall consider, as applicable—
(A) The past quality history of the contractor;
(B) The criticality of the material procured in relation to its intended use, considering such factors as—
(
(
(
(
(C) Problems encountered in the development of the material;
(D) Problems encountered in other procurements of the same or similar material;
(E) Available feed-back data from contract administration, receiving, testing, or using activities; and
(F) The experience of other contractors in overcoming manufacturing problems.
(ii) The instructions shall—
(A) Be kept to a minimum;
(B) Comply with 246.470-2; and
(C) Be prepared on a contract-by-contract basis.
(iii) The instructions shall not—
(A) Serve as a substitute for incomplete contract quality requirements;
(B) Impose greater inspection requirements than are in the contract;
(C) Use broad or general designations such as—
(
(
(
(D) Be used for routine administrative procedures; or
(E) Specify continued inspection requirements when statistically sound sampling will provide an adequate degree of protection.
(iv) After issuing the instructions, the technical activity—
(A) Must provide the contract administration office available information regarding those factors which resulted in the requirement for Government inspection;
(B) Must periodically analyze the need to continue, change, or discontinue the instructions; and
(C) Must advise the contract administration office of the results of the periodic analyses.
(f) The contract administration office shall continue to follow any specific written instructions received from the contracting office until the contracting office acts on a recommendation.
(1) Higher-level contract quality requirements are used in addition to a standard inspection requirement.
(2) Higher-level contract quality requirements, including nongovernment quality system standards adopted to meet DoD needs, are listed in the DoD Index of Specifications and Standards.
(c)
(a) Use the clause at 252.246-7000, Material Inspection and Receiving Report, in solicitations and contracts when there will be separate and distinct deliverables, even if the deliverables are not separately priced.
(b) When contract administration is retained by the contracting office, the clause at 252.246-7000, Material Inspection and Receiving Report, is not required for—
(1) Contracts awarded using simplified acquisition procedures;
(2) Negotiated subsistence contracts;
(3) Contracts for fresh milk and related fresh dairy products;
(4) Contracts for which the deliverable is a scientific or technical report;
(5) Research and development contracts not requiring the delivery of separately priced end items;
(6) Base, post, camp, or station contracts;
(7) Contracts in overseas areas when the preparation and distribution of the DD Form 250, Material Inspection and Receiving Report, by the contractor would not be practicable. In these cases, arrange for the contractor to provide the information necessary for the contracting office to prepare the DD Form 250;
(8) Contracts for services when hardware is not acquired as an item in the contract; and
(9) Indefinite delivery type contracts placed by central contracting offices
(1)
(A) Contains the processes, procedures, terms, and conditions under which one NATO member nation will perform quality assurance for another NATO member nation or NATO organization;
(B) Standardizes the development, updating, and application of the Allied Quality Assurance Publications; and
(C) Has been ratified by the United States and other nations in NATO with certain reservations identified in STANAG 4107.
(ii) Departments and agencies shall follow STANAG 4107 when—
(A) Asking a NATO member nation to perform quality assurance; or
(B) Performing quality assurance when requested by a NATO member nation or NATO organization.
(2)
(i) Perform quality assurance services on international military sales contracts or in accordance with existing agreements;
(ii) Ensure conformance to the technical and quality requirements of international military sales contracts;
(iii) Inform host or U.S. Government personnel and contractors on the use of quality assurance publications;
(iv) Specify appropriate quality requirements in contracts awarded to other countries; and
(v) Delegate quality assurance to the host government when satisfactory services are available.
(3)
(1) Contracting officers shall use the following MIL-STD-109 definitions in determining conformance with contract requirements—
(i)
(A) Is likely to result in hazardous or unsafe conditions for individuals using, maintaining, or depending upon the supplies or services; or
(B) Is likely to prevent performance of a vital agency mission.
(ii)
(iii)
(2) Contracting officers shall ensure that—
(i) Nonconformances are identified; and
(ii) The significance of a nonconformance is established when considering the acceptability of supplies or services which do not meet contract requirements.
(f) If nonconforming material or services are discovered after acceptance, the defect appears to be the fault of the contractor, any warranty has expired, and there are no other contractual remedies, the contracting officer—
(i) Shall notify the contractor in writing of the nonconforming material or service;
(ii) Shall request that the contractor repair or replace the material, or perform the service, at no cost to the Government; and
(iii) May accept consideration if offered. For guidance on solicitation of a refund, see subpart 242.71.
(a) The Surgeons General of the military departments are responsible for—
(1) Acceptance criteria;
(2) Technical requirements; and
(3) Inspection procedures needed to assure wholesomeness of foods.
(b) The contracting office may designate any Federal activity, capable of assuring wholesomeness and quality in food, to perform quality assurance for subsistence contract items. The designation may—
(1) Include medical service personnel of the military departments; and
(2) Be on a reimbursable basis.
(a) The Federal Aviation Administration (FAA) has certain responsibilities and prerogatives in connection with some commercial aircraft and of aircraft equipment and accessories (Pub. L. 85-726 (72 Stat 776, 49 U.S.C. 1423)). This includes the issuance of various certificates applicable to design, manufacture, and airworthiness.
(b) FAA evaluations are not a substitute for normal DoD evaluations of the contractor's quality assurance measures. Actual records of FAA evaluations may be of use to the contract administration office (CAO) and should be used to their maximum advantage.
(c) The CAO shall ensure that—
(1) The supplies and services conform to the terms of the contract; and
(2) The contractor possesses any required FAA certificates and approvals prior to acceptance.
(a) The department or agency responsible for the construction of a building or other structure is normally responsible for on-site inspection.
(b) The contract administration office performs quality assurance for construction materials and supplies acquired for military and civil works projects.
(c) The offices responsible for on-site inspection and for quality assurance of materials and supplies must coordinate their efforts to ensure the compatibility of buildings and structures and installed equipment.
In systematically planning Government contract quality assurance actions used to determine a contractor's compliance with contract quality requirements, consider—
(a) The relative importance of the product; and
(b) The variety of tasks required of the available resources.
Use objective evidence of quality to determine conformance to contract quality requirements.
(a) Under the clause at FAR 52.246-2, Inspection of Supplies—Fixed-Price, the Government may charge the contractor for additional costs incurred by the Government due to delays in tests or inspections caused by the contractor, or due to the necessity for reinspection or retest. This action may be necessary when—
(1) Supplies are not ready at the time such inspection and test are requested by the contractor; or
(2) Reinspection or retest is necessitated by prior rejection.
(b) After considering the factors in paragraph (d) of this subsection, the quality assurance representative (QAR) may believe that the assessment of additional costs is warranted. If so, the representative shall recommend that the contracting officer take the necessary action and provide a recommendation as to the amount of additional costs. Costs are based on the applicable Federal agency, foreign military sale, or public rate in effect at the
(c) If the contracting officer agrees with the QAR, the contracting officer shall—
(1) Notify the contractor, in writing, of the determination to exercise the Government's right under the clause at FAR 52.246-2, Inspection of Supplies—Fixed Price; and
(2) Demand payment of the costs in accordance with the collection procedures contained in FAR subpart 32.6.
(d) In making a determination to assess additional costs, the contracting officer shall consider—
(1) The frequency of delays, reinspection, or retest under both current and prior contracts;
(2) The cause of such delay, reinspection, or retest; and
(3) The expense of recovering the additional costs.
The contract administration office shall maintain suitable records of the quality assurance performance of contractors.
The contract administration office shall establish a system that provides, as a minimum, for the collection, evaluation, and use of—
(a) Quality data developed by the contractor during performance;
(b) Data developed by the Government through contract quality assurance actions; and
(c) Reports by users and customers.
(a)
(2) An alternative procedure (see paragraph (b) of this section) permits the contractor to assume the responsibility for releasing the supplies for shipment.
(3) The alternative procedure may include prime contractor release of supplies inspected at a subcontractor's facility.
(4) The use of the alternative procedure releases DoD manpower to perform technical functions by eliminating routine signing or stamping of the papers accompanying each shipment.
(b)
(i) The stamping or signing of the shipping papers by a representative of the contract administration office interferes with the operation of the Government contract quality assurance program or takes too much of the Government representative's time;
(ii) There is sufficient continuity of production to permit the Government to establish a systematic and continuing evaluation of the contractor's control of quality; and
(iii) The contractor has a record of satisfactory quality, including that pertaining to preparation for shipment.
(2) The contract administration office shall withdraw, in writing, the authorization when there is an indication that the conditions in paragraph (b)(1) of this subsection no longer exist.
(3) When the alternative procedure is used, require the contractor to—
(i) Type or stamp, and sign, the following statement on the required copy or copies of the shipping paper(s), or on an attachment—
The supplies in this shipment—
1. Have been subjected to and have passed all examinations and tests required by the contract;
2. Were shipped in accordance with authorized shipping instructions;
3. Conform to the quality, identity, and condition called for by the contract; and
4. Are of the quantity shown on this document.
This shipment was—
1. Released in accordance with section 246.471 of the Defense FAR Supplement; and
2. Authorized by (name and title of the authorized representative of the contract administration office) in a letter dated (date of authorizing letter). (Signature and title of contractor's designated official.)
(ii) Release and process, in accordance with established instructions, the DD Form 250, Material Inspection and
(a) There are two DoD quality inspection approval marking designs (stamps). Both stamps are used—
(1) Only by, or under the direct supervision of, the Government representative; and
(2) For both prime and subcontracts.
(b) The designs of the two stamps and the differences in their uses are—
(1)
(ii) Further inspection is to be performed at another time and/or place.
(iii) Material not inspected is so listed on the associated DD Form 250 (Material Inspection and Receiving Report), packing list, or comparable document.
(2)
(ii) The material satisfies all contract quality requirements and is in complete conformance with all contract quality requirements applicable at the time and place of inspection.
(iii) Complete inspection approval establishes that material which once was partially approved has subsequently been completely approved.
(iv) One imprint of the square stamp voids multiple imprints of the circle stamp.
(c) The marking of each item is neither required nor prohibited. Ordinarily, the stamping of shipping containers, packing lists, or routing tickets serves to adequately indicate the status of the material and to control or facilitate its movement.
(d) Stamping material does not mean that it has been accepted by the Government. Evidence of acceptance is ordinarily a signed acceptance certificate on the DD Form 250, Material Inspection and Receiving Report.
(e) Policies and procedures regarding the use of National Aeronautics and Space Administration (NASA) quality status stamps are contained in NASA publications. When requested by NASA centers, the DoD inspector shall use NASA quality status stamps in accordance with current NASA requirements.
(a) Material Inspection and Receiving Reports (MIRRs) are used to document—
(1) Contract quality assurance;
(2) Acceptance of supplies and services; and
(3) Shipments.
(b) MIRRs are used by activities responsible for—
(1) Receiving;
(2) Status control;
(3) Technical requirements;
(4) Contracting;
(5) Inventory control;
(6) Requisitioning; and
(7) Payment.
See Appendix F, Material Inspection and Receiving Report, for procedures and instructions for the use, preparation, and distribution of—
(a) The Material Inspection and Receiving Report (DD Form 250 series) and;
(b) Supplier's commercial shipping/packing lists used to evidence Government contract quality assurance.
(c) Departments and agencies shall establish procedures to track and accumulate data on warranty costs.
(b)
The chief of the contracting office must approve use of a warranty, except in acquisitions for—
(1) Commercial items (see FAR 46.709);
(2) Technical data, unless the warranty provides for extended liability (see 246.708);
(3) Supplies and services in fixed-price type contracts containing quality assurance provisions that reference higher-level contract quality requirements (see 246.202-4); or
(4) Supplies and services in construction contracts when using the warranties that are contained in Federal, military, or construction guide specifications.
(a) Warranties in the clause at 252.246-7001, Warranty of Data, are also an exception to the prohibition on use of warranties in cost-reimbursement contracts.
(b)(5)
Obtain warranties on technical data when practicable and cost effective. Consider the factors in FAR 46.703 in deciding whether to obtain warranties of technical data. Consider the following in deciding whether to use extended liability provisions—
(1) The likelihood that correction or replacement of the nonconforming data, or a price adjustment, will not give adequate protection to the Government; and
(2) The effectiveness of the additional remedy as a deterrent against furnishing nonconforming data.
(1) Use a clause substantially the same as the clause at 252.246-7001, Warranty of Data, in solicitations and contracts that include the clause at 252.227-7013, Rights in Technical Data and Computer Software, and there is a need for greater protection or period of liability than provided by other contract clauses, such as the clauses at—
(i) FAR 52.246-3, Inspection of Supplies—Cost-Reimbursement;
(ii) FAR 52.246-6, Inspection—Time-and-Material and Labor-Hour;
(iii) FAR 52.246-8, Inspection of Research and Development—Cost-Reimbursement; and
(iv) FAR 52.246-19, Warranty of Systems and Equipment Under Performance Specifications or Design Criteria.
(2) Use the clause at 252.246-7001, Warranty of Data, with its Alternate I when extended liability is desired and a fixed price incentive contract is contemplated.
(3) Use the clause at 252.246-7001, Warranty of Data, with its Alternate II when extended liability is desired and a firm fixed price contract is contemplated.
(4) Use the clause at 252.246-7002, Warranty of Construction (Germany), instead of the clause at FAR 52.246-21, Warranty of Construction, in solicitations and contracts for construction when a fixed-price contract will be awarded and contract performance will be in Germany.
41 U.S.C. 421 and 48 CFR chapter 1.
(b)(2) Appendix J of the Defense Traffic Management Regulation lists the carriers and carrier associations that have agreed to provide transportation under commercial forms and procedures within CONUS.
(a) Section 10721 rates do not apply to foreign military sale (FMS) shipments.
(i) On shipments of stock fund items from a contractor to a depot, when some of the items in a specific transportation unit are clearly for FMS—
(A) Section 10721 rates do not apply to FMS items shipped on a separate bill of lading; and
(B) Section 10721 rates do apply to the non-FMS items.
(a) See section XI, chapter 32 of the Defense Traffic Management Regulation for instructions on converting commercial bills of lading to Government bills of lading within CONUS.
(a)(i) Transportation assistance includes all transportation factors, such as—
(A) Freight rates (for evaluation of bids or routing purposes);
(B) Other transportation costs;
(C) Transit agreements;
(D) Time in transit;
(E) Port handling charges; and
(F) Port capabilities.
(ii) Within CONUS, the Military Traffic Management Command (MTMC), through its eastern and western area commands, is responsible for the performance of traffic management functions. These functions include the direction, control, and supervision of all functions incident to the acquisition
(iii) For assistance with international shipments—
(A) Originating in CONUS, request assistance from the appropriate military activity; i.e., the Air Mobility Command (AMC), Military Sealift Command (MSC), MTMC, or the military service sponsoring the cargo;
(B) For all modes of transportation originating overseas, request assistance from the overseas Theater Commander assigned responsibility for common-user, military-operated land transportation;
(C) Of bulk petroleum via ocean tanker, request assistance, rates, or other costs from the MSC;
(D) Of supplies between points outside the CONUS, including Alaska and Hawaii, request assistance, rates, or other costs from the military service sponsoring the cargo. Direct the requests to:
(E) When requesting rates and related costs for the evaluation of bids or proposals, include the bid opening or proposal due date and the expected date of initial shipment, if established.
This section contains procedures peculiar to stevedoring. Other portions of the FAR and DFARS dealing with service contracting also apply to stevedoring contracts.
(1) The price quoted for handling a ton (weight or measurement) of a specified commodity.
(2) Computed by dividing the hourly stevedoring gang cost by the estimated number of tons of the specified commodity which can be handled in 1 hour.
(1) The total hourly wages paid to the workers in the gang, in accordance with the collective bargaining agreement between the maritime industry and the unions at a specific port; and
(2) Payments for workmen's compensation, social security taxes, unemployment insurance, taxes, liability and property damage insurance, general and administrative expenses, and profit.
(1) Loading of cargo from an agreed point of rest on a pier or lighter and its storage aboard a vessel; or
(2) Breaking out and discharging of cargo from any space in the vessel to an agreed point of rest dockside or in a lighter.
Normally, use an indefinite-quantity type contract.
(a) Because conditions vary at different ports, and sometimes within the same port, it is not practical to develop standard technical provisions covering all phases of stevedoring operations.
(b) When including car loading and unloading or other dock and terminal work under a stevedoring contract, include these requirements as separate items of work.
At a minimum, require that offers include—
(a) Tonnage or commodity rates which apply to the bulk of the cargo worked under normal conditions;
(b) Labor-hour rates which apply to services not covered by commodity rates, or to work performed under hardship conditions; and
(c) Cost of equipment rental.
Make the award to the contractor submitting the offer most advantageous to the Government, considering cost or price and other factors specified elsewhere in the solicitation. Evaluation will include, but is not limited to—
(a) Total estimated cost of tonnage to be moved at commodity rates;
(b) Estimated cost at labor-hour rates; and
(c) Cost of equipment rental.
Use the following clauses in solicitations and contracts for stevedoring services as indicated—
(a) 252.247-7000, Hardship Conditions, as appropriate;
(b) 252.247-7001, Price Adjustment, when using sealed bidding;
(c) 252.247-7002, Revision of Prices, when using negotiation;
(d) 252.247-7003, Termination, when it is desirable to permit either party to terminate the contract;
(e) 252.247-7004, Indefinite Quantities-Fixed Charges, when the contract will provide for the payment of fixed charges;
(f) 252.247-7005, Indefinite Quantities-No Fixed Charges, when the contract will not provide for the payment of fixed charges;
(g) 252.247-7006, Removal of Contractor's Employees; and
(h) 252.247-7007, Liability and Insurance.
This section contains procedures peculiar to the preparation of personal property for shipment or storage, and for the performance of intra-area or intra-city movement. Other portions of the FAR and DFARS dealing with service contracting also apply to these services.
(a)
(1) Use requirements contracts awarded through sealed bidding to acquire services for the—
(i) Preparation of personal property for shipment or storage; and
(ii) Performance of intra-area movement.
(2) Award contracts on a calendar year basis.
(3) Provide for option years.
(4) Award contracts, or exercise option years, before November 1 of each year, if possible.
(b)
(1) Establish one or more areas; however, hold the number to a minimum consistent with local conditions.
(2) Each schedule may provide for the same or different areas of performance. Determine the areas as follows—
(i) Use political boundaries, streets, or any other features as lines of demarcation. Consider such matters as—
(A) Total volume;
(B) Size of overall area; and
(C) The need to service isolated areas of high population density.
(ii) Specifically identify frequently used terminals, and consider them as being included in each area of performance described in the solicitation.
(c)
(1) Establish realistic quantities on the Estimated Quantities Report in DoD 4500.34-R, Personal Property Traffic Management Regulation;
(2) Ensure that the Government's minimum acceptable daily capability—
(i) Will at least equal the maximum authorized individual weight allowance
(ii) Will not preclude bidding by small business firms.
(a)
(2) The Commander, MTMC, shall designate the contracting activity when local commanders are unable to reach agreement.
(b)
(1) Excess requirements are those services that exceed contractor capabilities available under contracts. Use simplified acquisition procedures to satisfy excess requirements.
(2) Additional services are those not specified in the bid items.
(i) Additional services may include—
(A) Hoisting or lowering of articles;
(B) Waiting time;
(C) Special packaging; and
(D) Stuffing or unstuffing of sea van containers.
(ii) Consider contracting for local moves that do not require drayage by using hourly rate or constructive weight methods. The rate will include those services necessary for completion of the movement, including—
(A) Packing and unpacking;
(B) Movement;
(C) Inventorying; and
(D) Removal of debris.
(iii) Each personal property shipping activity shall determine if local requirements exist for any additional services.
(iv) The contracting officer may obtain additional services by—
(A) Including them as items within the contract; provided, they are not used in the evaluation of bids (see 252.247-7008, Evaluation of Bids); or
(B) Using simplified acquisition procedures.
(v) Either predetermine prices for additional services with the contractor, or negotiate them on a case-by-case basis.
(vi) The contracting officer must authorize the contractor to perform any additional services, other than attempted pick up or delivery, regardless of the contracting method.
(vii) To the maximum extent possible, identify additional services required that are incidental to an order before placing the order; or, when applicable, during the premove survey.
(c)
(1) CONUS personal property shipping activities shall send the copy to the Commander, Military Traffic Management Command, Attn: MTPP-CI, Room 408, 5611 Columbia Pike, Falls Church, VA 22041-5050.
(2) In the European and Pacific areas, personal property shipping activities shall send the copy to either the Property Directorate, MTMC Europe, or the MTMC Field Office-Pacific.
(3) Other overseas personal property shipping activities shall send the copy to the Commander, Military Traffic Management Command, Attn: MTPP-Q, 5611 Columbia Pike, Falls Church, VA 22041-5050.
When acquiring services for the preparation of personal property for movement or storage, and for performance of intra-city or intra-area movement, use the following provisions, clauses, and schedules. Revise solicitation provisions and schedules, as appropriate, if using negotiation rather than sealed bidding. Overseas commands, except those in Alaska and Hawaii, may modify these clauses to conform to local practices, laws, and regulations.
(a) The provision at 252.247-7008, Evaluation of Bids. When adding “additional services” items to any schedule, use the basic clause with Alternate I.
(b) The provision at 252.247-7009, Award.
(c) In solicitations and resulting contracts, the schedules contained in DoD 4500.34-R, Personal Property Traffic Management Regulation, as provided by the installation personal property shipping office.
(1) When there is no requirement for an item or subitem in a schedule, indicate that item or subitem number, in its proper numerical sequence, and add the statement “No Requirement.”
(2) Within Schedules I (Outbound) and II (Inbound), item numbers are reserved to permit inclusion of additional items as required by local conditions.
(3) Overseas activities, except those in Alaska and Hawaii, may modify the schedules when necessary to conform with local trade practices, laws, and regulations.
(4) All generic terminology, schedule, and item numbers in proper sequence shall follow those contained in the basic format.
(5) When it is in the Government's best interest to have both outbound and inbound services within a given area of performance furnished by the same contractor, modify the schedule format to combine both services in a single schedule. However, items shall follow the same sequential order as in the basic format.
(6) Process any modification of schedule format, other than those authorized in paragraphs (c) (1) through (5) of this subsection, as a request for deviation through MTMC area commands/field offices to HQ, MTMC.
(d) The clause at 252.247-7010, Scope of Contract.
(e) The clause at 252.247-7011, Period of Contract. When the period of performance is less than a calendar year, modify the clause to indicate the beginning and ending dates. However, the contract period shall not end later than December 31 of the year in which the contract is awarded.
(f) In addition to designating each ordering activity, as required by the clause at FAR 52.216-18, Ordering, identify by name or position title the individuals authorized to place orders for each activity. When provisions are made for placing oral orders in accordance with FAR 16.506(b), document the oral orders in accordance with departmental/agency instructions.
(g) The clause at 252.247-7012, Ordering Limitation.
(h) The clause at 252.247-7013, Contract Areas of Performance.
(i) The clause at 252.247-7014, Demurrage.
(j) When using the clause at FAR 52.216-21, Requirements, see 216.505(d) which prescribes use of Alternate I at 252.247-7015.
(k) The clause at 252.247-7016, Contractor Liability for Loss and Damage.
(l) The clause at 252.247-7017, Erroneous Shipments.
(m) The clause at 252.247-7018, Subcontracting.
(n) The clause at 252.247-7019, Drayage.
(o) The clause at 252.247-7020, Additional Services.
(p) The clauses at FAR 52.247-2, Permits, Authorities, or Franchises; FAR 52.247-8, Estimated Weights or Quantities Not Guaranteed; FAR 52.247-13, Accessorial Services—Moving Contracts; and FAR 52.247-17, Charges.
(b) Consignment instructions shall include, as a minimum—
(i) The clear text and coded MILSTRIP data as follows—
(A) Consignee code and clear text identification of consignee and destination as published in—
(
(
(
(
Reporting procedures and instructions shall comply with DoD Regulation 4500.32-R, MILSTAMP.
(B) Project code, when applicable;
(C) Transportation priority;
(D) Required delivery date; and
(E) Coded MILSTRIP document number, demand/suffix code, a supplementary address and signal code.
(ii) Non-MILSTRIP shipments shall include data similar to paragraph (b)(i) (A) through (D) of this subsection and the applicable portion of paragraph (b)(i)(E) with the notation “Non-MILSTRIP.”
(iii) In amended shipping instructions include, in addition to the data requirements of paragraphs (b)(i) (A) through (E) of this subsection, the following, when appropriate—
(A) Name of the activity originally designated, from which the stated quantities are to be deducted; and
(B) Any other features of the amended instructions not contained in the basic contract.
(iv) If a contract is assigned for any contract administration function listed in FAR subpart 42.3, to any office listed in DoD 4105.4, DoD Directory of Contract Administration Services Components, then include in instructions the—
(A) Modification serial number; and, if a new line item is created by the issuance of shipping instructions;
(B) New line item number; and
(C) Existing line item number, if affected.
(v) For petroleum, oil and lubricant products, instructions for diversions need not include the modification serial number and new line item number, when the instructions are—
(A) For diversions overseas to new destinations;
(B) Issued by an office other than that issuing the contract or delivery order; and
(C) Issued by telephone, teletype, or telegram.
Use the clause at 252.247-7021, Returnable Containers Other Than Cylinders, in solicitations and contracts for supplies involving contractor-furnished returnable reels, spools, drums, carboys, liquid petroleum gas containers, or other returnable containers if the contractor is to retain title to the containers.
When complete consignment instructions are not known initially, use the Standard Form 30, Amendment of Solicitation/Modification of Contract, to issue or amend consignment instructions, and when necessary, to confirm consignment instructions issued by telephone, teletype, or telegram.
(a) When using the SF 30 to confirm delivery instructions—
(1) Stamp or mark “CONFIRMATION” in block letters on the form, and specify in detail those instructions being confirmed.
(2) Do not change the instructions being confirmed.
(b) Process the confirming SF 30 as follows—
(1) For contracts assigned for any contract administration function listed in subpart 247.3 to any office listed in DoD 4105.4, DoD Directory of Contract Administration Services Components, within five working days;
(2) For diversions of petroleum, oil, and lubricant products overseas to new destinations, within 30 days of instructions being confirmed; and
(3) Other contracts—
(i) Telephone—within five working days; and
(ii) Teletype or telegraph—consolidate on a monthly basis.
Reporting procedures and instructions for this form will be in compliance with DoD Regulation 4500.32-R, MILSTAMP.
(a) The transportation specialist prepares the DD Form 1653 at the request of the contracting officer. The completed form will contain recommendations concerning f.o.b. terms best suited for a particular acquisition, and other suggested transportation provisions for inclusion in the solicitation.
(b) When appropriate, the DD Form 1653 will also include information on
Contracting personnel may use the DD Form 1654 to furnish information to the transportation office for development of cost factors for use by the contracting officer in the evaluation of f.o.b. origin offers.
This subpart—
(a) Implements the Cargo Preference Act of 1904, 10 U.S.C. 2631, which applies to the ocean transportation of cargo owned by, or destined for use by, the DoD.
(b) Does not specifically implement the Cargo Preference Act of 1954, 46 U.S.C. 1241(b). The 1954 Act is applicable to the DoD, but DFARS coverage is not required because compliance with the 1904 Act historically has resulted in the DoD exceeding the 1954 Act's requirements.
(c) Is an approved class deviation from FAR subpart 47.5 in its entirety (but see 247.571(c)).
(a) DoD contractors shall transport supplies, as defined in the clause at 252.247-7023, Transportation of Supplies by Sea, exclusively on U.S.-flag vessels unless—
(1) Those vessels are not available, and notices are given and approvals received in accordance with this subpart;
(2) The Secretary of the Navy determines that the freight charged is excessive or unreasonable; or
(3) The contracting officer finds that the charges to the Government are higher than charges to private persons for the transportation of like goods.
(b) Contracts shall provide for the use of Government-owned vessels when security classifications prohibit the use of other than Government-owned vessels.
(c)(1) Any vessel used under a time charter contract for the transportation of supplies shall have any reflagging or repair work, as defined in the clause at 252.247-7205, Reflagging or Repair Work, performed in the United States or its territories, if the reflagging or repair work is performed—
(i) On a vessel for which the contractor submitted an offer in response to the solicitation for the contract; and
(ii) Prior to acceptance of the vessel by the Government.
(2) The Secretary of Defense may waive this requirement if the Secretary determines that such waiver is critical to the national security of the United States.
(d) The Cargo Preference Act of 1904 does not apply to ocean transportation of—
(1) Products obtained for contributions to foreign assistance programs; or
(2) Products owned by agencies other than the DoD. In these cases, FAR subpart 47.5 applies.
(a) This subsection applies when ocean transportation is not the purpose of the contract. However, effective May 1, 1996, this subsection does not apply to subcontracts for the acquisition of commercial items or commercial components (see 212.504(a)(xxii)).
(b) The contracting officer shall obtain assistance from the cognizant transportation activity (see 247.105), in developing—
(1) The Government estimate for transportation costs, irrespective of whether freight will be paid directly by the Government;
(2) Shipping instructions and delivery terms for inclusion in solicitations and contracts that may involve transportation of supplies by sea.
(c) The contracting officer shall ask each offeror whether it will transport supplies by sea if awarded the contract (see 247.573(a)). Even if the successful offeror responds that it does not anticipate sea transport of supplies, it may
(1) Notify the Government that it now intends to use ocean transportation;
(2) Use U.S.-flag vessels unless certain conditions exist (see 247.571(a)); and
(3) Comply with the other requirements of the clause at 252.247-7023, Transportation of Supplies by Sea.
(d) When the contracting officer is notified that the contractor or subcontractor considers that—
(1) No U.S.-flag vessels are available, the contracting officer shall request confirmation of the nonavailability from the Director, Office of Contracts and Business Management, Military Sealift Command (MSC).
(2) The freight charges to the Government, the contractor or any subcontractor, are higher than charges for transportation of like goods to private persons, the contracting officer may approve any request for a waiver of the requirement to ship on U.S.-flag vessels for a particular shipment.
(i) Prior to granting a waiver, the contracting officer shall request advice, oral or written, from the Commander, MSC.
(ii) In advising the contracting officer whether to grant the waiver, the Commander, MSC, shall consider, as appropriate, evidence from—
(A) Published tariffs;
(B) Industry publications;
(C) The Maritime Administration; and
(D) Any other available sources.
(3) The freight charged by U.S.-flag carriers is considered excessive or otherwise unreasonable, the contracting officer shall forward a report to the Commander, MSC, through the head of the contracting activity, and the Director, Office of Contracts and Business Management, MSC.
(i) The report shall be in determination and finding format, and—
(A) Take into consideration that the 1904 Act is, in part, a subsidy of the U.S.-flag commercial shipping industry that recognizes that lower prices may be available from foreign shippers;
(B) Consider, accordingly, not only excessive profits to the vessel owner, if ascertainable, but also excessive costs (i.e., costs beyond the economic penalty normally incurred by excluding foreign competition) resulting from the use of U.S.-flag vessels in extraordinarily inefficient circumstances;
(C) Include, as appropriate—
(
(
(
(
(D) Consider that the fact that it would be less expensive to use a foreign-flag vessel is not a sufficient basis, on its own, to determine that the freight rate proposed by the U.S.-flag carrier is excessive or otherwise unreasonable. However, such a differential may indicate a need for further review.
(ii) If the Commander, MSC, concurs with the contracting officer, the Commander will forward the report to the Secretary of the Navy, via ASN(RDA)(PP), for a determination as to whether the freight charges are excessive or otherwise unreasonable.
(a) This subsection applies when ocean transportation is the principal purpose of the contract, including—
(1) Time charters;
(2) Voyage charters;
(3) Contracts of affreightment;
(4) Dedicated contractor contracts of affreightment;
(5) Ocean bills of lading; and
(6) Subcontracts under Government contracts or agreements for ocean transportation services.
(b) Coordinate these acquisitions, as appropriate, with the MSC in accordance with DoDD 5160.10, Single Manager Assignment for Ocean Transportation.
(c) The Commander, MSC, is authorized to make any determination as to the availability of U.S.-flag vessels, in order to ensure the proper utilization of Government and private U.S. vessels.
(d) All solicitations for ocean transportation services for supplies owned by the military departments shall provide a preference for U.S.-flag vessels as an evaluation factor.
(e) The contracting officer shall not award a contract of the type described in paragraph (a) of this subsection for a foreign-flag vessel unless—
(1) The contracting officer determines that no U.S.-flag vessels are available, and obtains approval of the Commander, MSC; or
(2) The contracting officer determines that the freight charges proposed by U.S.-flag vessels to the Government are higher than charges to private persons for transportation of like goods, and obtains the approval of the Commander; MSC; or
(3) The Secretary of the Navy determines (see paragraph (f) of this subsection) that the freight charges for U.S.-flag vessels are excessive or otherwise unreasonable.
(f) When the contracting officer concludes, based solely on economic considerations, that the charge offered for a U.S.-flag vessel is excessive or otherwise unreasonable, the contracting officer will send a report through the head of the contracting activity to the Commander, MSC.
(1) The fact that it would be less expensive to use a foreign-flag vessel is an insufficient basis, on its own, to determine that the freight rate proposed by the U.S.-flag carrier is excessive or otherwise unreasonable. However, such a differential may indicate a need for further review.
(2) The Commander, MSC, will forward the report, if in agreement with the contracting officer, to the Secretary of the Navy for a determination.
(3) The report shall be in determination and finding format; take into consideration the factors in 247.572-1(d)(3); and include, as appropriate—
(i) An analysis of the carrier's cost in accordance with FAR Subpart 15.4, or profit in accordance with 215.404-4. The costs or profit should not be so high as to make it unreasonable to apply the preference for U.S.-flag vessels;
(ii) A description of efforts taken pursuant to FAR 15.405, to negotiate a reasonable price. For the purpose of FAR 15.405(d), this report is the referral to a level above the contracting officer; and
(iii) An analysis of whether the cost is excessive (i.e., cost beyond the economic penalty normally incurred by excluding foreign competition), taking into consideration such factors as—
(A) The differential between freight charges by the U.S.-flag carrier and an estimate of what foreign-flag carriers would charge based upon a price analysis;
(B) A comparison of rates charged by other U.S.-flag carriers on comparable routes;
(C) Efficiency of operation regardless of rate differential (i.e., suitability of the vessel capacity/cargo requirements; the commercial reasonableness of the vessel positioning required, etc.); and
(D) Any other relevant economic and financial considerations affecting the Government.
(a) Use the provision at 252.247-7022, Representation of Extent of Transportation by Sea, in all solicitations except—
(1) Those for direct purchase of ocean transportation services; or
(2) Those with an anticipated value at or below the simplified acquisition threshold.
(b) Use the clause at 252.247-7023, Transportation of Supplies by Sea, in all solicitations and resultant contracts, except—
(1) Those for direct purchase of ocean transportation services; or
(2) Those with an anticipated value at or below the simplified acquisition threshold.
(c) Use the clause at 252.247-7024, Notification of Transportation of Supplies by Sea, in all contracts for which the offeror made a negative response to the inquiry in the provision at 252.247-7022, Representation of Extent of Transportation by Sea.
(d) Use the clause at 252.247-7025, Reflagging or Repair Work, in all time charter solicitations and contracts for the use of a vessel for the transportation of supplies, unless a waiver has been granted in accordance with 247.571(c).
41 U.S.C. 421 and 48 CFR chapter 1.
When one of the clauses prescribed by FAR subpart 48.2 is used and the contracting officer wants value engineering change proposals submitted in the format prescribed by MIL-STD-973, use the clause at 252.248-7000, Preparation of Value Engineering Change Proposals.
41 U.S.C. 421 and 48 CFR chapter 1.
When the contract administration office receives a termination notice, it will, under Report Control Symbol DD-A&T(AR)1411-
(i) Prepare a DD Form 1598, Contract Termination Status Report;
(ii) Within 30 days, send one copy to the purchasing office and one copy to the headquarters office to which the contract administration office is directly responsible;
(iii) Continue reporting semiannually to cover the 6 month periods ending March and September. The semiannual reports must be submitted within 30 days after the end of the reporting period; and
(iv) Submit a final report within 30 days after closing the termination case.
The DD Form 1598, Contract Termination Status Report, may be used to recommend the release of excess funds. The final recommendation to release excess funds should include the appropriations and allocated amounts.
(a)(1)(ii) Industrial plant equipment included in the inventory—
(
(
(a)(i) Use a Standard Form 30 (SF 30), Amendment of Solicitation/Modification of Contract, to settle a convenience termination by determination—
(A) When the contractor has lost its right of appeal because it failed to submit a timely settlement proposal; and
(B) To confirm the determination when the contractor does not appeal the termination contracting officer's decision.
(ii) The effective date of the SF 30 shall be the same as the date of the letter of determination. Do not assign a supplementary procurement instrument number to the letter of determination. Send a copy of the SF 30 to the contractor by certified mail return receipt requested.
(a)(i)
(ii)
(a) The clause at 252.249-7000, Special Termination Costs, may be used in an incrementally funded contract when its use is approved by the agency head.
(b) The clause is authorized when—
(1) The contract term is 2 years or more;
(2) The contract is estimated to require—
(i) Total RDT&E financing in excess of $25 million; or
(ii) Total production investment in excess of $100 million; and
(3) Adequate funds are available to cover the contingent reserve liability for special termination costs.
(c) The contractor and the contracting officer must agree upon an amount that represents their best estimate of the total special termination costs to which the contractor would be entitled in the event of termination of the contract. Insert this amount in paragraph (c) of the clause.
(d)(1) Consider substituting an alternate paragraph (c) for paragraph (c) of the basic clause when—
(i) The contract covers an unusually long performance period; or
(ii) The contractor's cost risk associated with contingent special termination costs is expected to fluctuate
(2) The alternate paragraph (c) should provide for periodic negotiation and adjustment of the amount reserved for special termination costs. Occasions for periodic adjustment may include—
(i) The Government's incremental assignment of funds to the contract;
(ii) The time when certain performance milestones are accomplished by the contractor; or
(iii) Other specific time periods agreed upon by the contracting officer and the contractor.
(a) Terminate contracts with the Canadian Commercial Corporation in accordance with—
(1) The Letter of Agreement (LOA) between the Department of Defence Production (Canada) and the U.S. DoD, “Canadian Agreement” (for a copy of the LOA or for questions on its currency, contact the Foreign Contracting Directorate, Office of the Director of Defense Procurement, (703) 697-9351, DSN 227-9351));
(2) Policies in the Canadian Agreement and part 249; and
(3) The Manual of Procedure on Termination of Contracts, Department of Supply and Services (Canada).
(b) Contracting officers shall ensure that the Canadian Commercial Corporation submits termination settlement proposals in the format prescribed in FAR 49.602 and that they contain the amount of settlements with subcontractors. The termination contracting officer (TCO) shall prepare an appropriate settlement agreement. (See FAR 49.603.) The letter transmitting a settlement proposal must certify—
(1) That disposition of inventory has been completed; and
(2) That the Contracts Settlement Committee of the Supply and Services Canada (SSC) has approved settlements with Canadian subcontractors when the Manual of Procedure on Termination of Contracts, SSC, requires such approval.
(c)(1) The Canadian Commercial Corporation will—
(i) Settle all Canadian subcontractor termination claims under the Canadian Agreement; and
(ii) Submit schedules listing serviceable and usable contractor inventory for screening to the TCO (see FAR 45.6).
(2) After screening, the TCO must provide guidance to the Canadian Commercial Corporation for disposition of the contractor inventory.
(3) Settlement of Canadian subcontractor claims are not subject to the approval and ratification of the TCO. However, when the proposed negotiated settlement exceeds the total contract price of the prime contract, the TCO shall obtain from the U.S. contracting officer prior to final settlement—
(i) Ratification of the proposed settlement; and
(ii) A contract modification increasing the contract price and obligating the additional funds.
(d) The Canadian Commercial Corporation (CCC) should send all termination settlement proposals submitted by U.S. subcontractors and suppliers to the TCO, Defense Contract Management Area Operations, Ottawa, for settlement. The TCO will inform the CCC of the amount of the net settlement of U.S. subcontractors and suppliers so that this amount can be included in the CCC termination proposal. The Canadian Commercial Corporation is responsible for execution of the settlement agreement with these subcontractors.
(a) Congressional notification is required for any termination involving a reduction in employment of 100 or more contractor employees. Proposed terminations must be cleared through department/agency liaison offices before release of the termination notice, or any information on the proposed termination, to the contractor.
(b) Department and agency liaison offices will coordinate timing of the congressional notification and public release of the information with release of
(1) Army—Chief, Legislative Liaison (SALL-SPA)
(2) Navy—Chief of Legislative Affairs (OLA-N)
(3) Air Force—SAF/AQC
(4) Defense Advanced Research Projects Agency—CMO
(5) Defense Information Systems Agency—Contract Management Division (Code 260)
(6) Defense Intelligence Agency—RSQ
(7) Defense Logistics Agency—DLSC-P
(8) National Imagery and Mapping Agency—HQ NIMA (AQ)
(9) Defense Threat Reduction Agency—Acquisition Management Office (AM)
(10) National Security Agency/Central Security Service—Chief, Office of Contracting
(11) Ballistic Missile Defense Organization—Director of Contracts (BMDO-DCT)
(c) Request clearance to release information in accordance with departmental procedures as soon as possible after the decision to terminate is made. Until clearance has been obtained, treat this information as “For Official Use Only” unless the information is classified.
(d) Include the following in the request for clearance—
(1) Contract number, date, and type of contract;
(2) Name of the company;
(3) Nature of contract or end item;
(4) The reason for the termination;
(5) Contract price of the items terminated;
(6) Total number of contractor employees involved, including the Government's estimate of the number who may be discharged;
(7) Statement of anticipated impact on the company and the community;
(8) The area labor category, whether the contractor is a large or small business, and any known impact on hard core disadvantaged employment programs;
(9) Total number of subcontractors involved and the impact in this area; and
(10) An unclassified draft of a suggested press release.
(e) To minimize termination costs, liaison offices will act promptly on all requests for clearances and provide a response not later than two working days after receipt of the request.
(f) This reporting requirement is assigned Report Control Symbol DD-A&T(AR)1412.
(a) Section 1372 of the National Defense Authorization Act for Fiscal Year 1994 (Pub. L. 103-160) and Section 824 of the National Defense Authorization Act for Fiscal Year 1997 (Pub. L. 104-201) are intended to help establish benefit eligibility under the Job Training Partnership Act (29 U.S.C. 1661 and 1662) for employees of DoD contractors and subcontractors adversely affected by termination or substantial reductions in major defense programs.
(b) Departments and agencies are responsible for establishing procedures to:
(1) Identify which contracts (if any) under major defense programs will be terminated or substantially reduced as a result of the funding levels provided in an appropriations act.
(2) Within 60 days of the enactment of such an act, provide notice of the anticipated termination of or substantial reduction in the funding of affected contracts—
(i) Directly to the Secretary of Labor; and
(ii) Through the contracting officer to each prime contractor.
(c) Use the clause at 252.249-7002, Notification of Anticipated Contract Termination or Reduction, in all contracts under a major defense program.
41 U.S.C. 421 and 48 CFR chapter 1.
As used in this part,
(1) An official at or above the level of an Assistant Secretary (or Deputy) of Defense or of the Army, Navy, or Air Force; and
(2) A contract adjustment board established by the Secretary concerned.
See 10 U.S.C. 2410b for limitations on Congressionally directed payment of a request for equitable adjustment to contract terms or a request for relief under Pub. L. 85-804.
Prepare reports required by this section in accordance with DoDI 4105.69, Miscellaneous Procurement Report. Department and agency supplements identify officials responsible for preparing and processing the reports required by this section.
(1) Departments and agencies will—
(i) Prepare a preliminary record when a request for a contract adjustment under FAR 50.3 is filed (see 250.305-70).
(ii) Prepare a final record stating the disposition of the request (see 250.306-70).
(iii) Designate the offices or officials responsible for preparing, submitting, and receiving all records required by this part 250. Records shall be maintained by the contract adjustment boards of the Army, Navy, and Air Force, respectively, and by the headquarters of the defense agencies.
(2) A suggested format for the record is in Table 50-1, Record of Request for Adjustment. This format permits the information required for the preliminary and final records to be combined on one form.
(3) The following instructions are provided for those items which are not self-explanatory:
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
(b) Authority under FAR Subpart 50.4 to approve actions obligating $50,000 or less may not be delegated below the level of the head of the contracting activity; however, see FAR 50.201(d) for indemnification authority.
(a)
(b)
(1) Requests to obligate the Government in excess of $50,000 must be submitted to the Under Secretary of Defense (Acquisition & Technology) (USDA&T)) for approval.
(2) Requests for indemnification against unusually hazardous or nuclear risks must be submitted to the USD(A&T) for approval before using the indemnification clause at FAR 52.250-1, Indemnification Under Public Law 85-804.
(c)
The Departments of the Army, Navy, and Air Force each have a contract adjustment board. The board consists of a Chair and not less than two nor more than six other members, one of whom may be designated the Vice-Chair. A majority constitutes a quorum for any purpose and the concurring vote of a majority of the total board membership constitutes an action of the board. Alternates may be appointed to act in the absence of any member.
Requests should be filed with the procuring contracting officer (PCO). If a request is filed with an administrative contracting officer (ACO), the ACO shall promptly forward it to the PCO for appropriate action. If filing with the PCO is impracticable, requests may be filed with the following addresses for forwarding to the cognizant PCO:
(1) Office of the Secretary of Defense—Washington Headquarters Service, Attn: RE&F-AM.
(2) Army—Forward to the head of the contracting activity listed in Part 202 that appears to be the cognizant office for the contract or commitment involved.
(3) Navy-Assistant Secretary of the Navy (RD&A), Attn: Deputy for Acquisition and Business Management.
(4) Air Force—Deputy Assistant Secretary (Contracting), Attn: SAF/AQCX.
(5) Defense Advanced Research Projects Agency—Director, CMO.
(6) Defense Information Systems Agency—Attn: Code PA.
(7) Defense Intelligence Agency—Assistant Deputy Director for Procurement, Attn: RSQ.
(8) Defense Logistics Agency—The Commander of the Defense Supply Center involved.
(9) National Imagery and Mapping Agency-Director, NIMA, Attn: AQ.
(10) Defense Threat Reduction Agency-Director, DTRA, Attn: AM.
(11) National Security Agency—Director, NSA.
(12) Ballistic Missile Defense Organization—Director, BMDO.
At the time the request is filed, the activity will prepare the record described at 250.105(1)(i) and forward it to the appropriate official within 30 days after the close of the month in which the record is prepared.
(a) The officer or official responsible for the case shall forward to the contract adjustment board, through departmental channels, two copies of the following:
(1) A letter stating—
(i) The nature of the case;
(ii) The basis for the board's authority to act;
(iii) The findings of fact essential to the case (see FAR 50.304). Arrange the findings chronologically with cross references to supporting enclosures;
(iv) The conclusions drawn;
(v) The recommended disposition; and
(vi) If contractual action is recommended, a statement by the signer that the action will facilitate the national defense.
(2) The contractor's request
(3) All evidentiary materials
(4) All endorsements, reports and comments of cognizant Government officials
(b) A letter to the Board recommending an amendment without consideration where essentiality is a factor (see FAR 50.302-1(a)) should also provide—
(1) The information required by FAR 50.304 (a) and (b), and
(2) Findings as to—
(i) The contractor's performance record, including the quality of product, rate of production, and promptness of deliveries;
(ii) The importance to the Government, particularly to the active duty military, of the performance of the contract and the importance of the contractor to the national defense;
(iii) The forecast of future contracts with the contractor; and
(iv) Other available sources of supply for the supplies or services covered by the contract, and the time and cost of having contract performance completed by such other sources.
Contract adjustment boards will render decisions as expeditiously as practicable. The Chair shall sign a memorandum of decision disposing of the case. The decision shall be dated and shall contain the information required by FAR 50.306. The memorandum of decision shall not contain any information classified “Confidential” or higher. The board's decision will be sent to the appropriate official for implementation.
(a) When the request for relief is denied or approved below the Secretarial level, submit the following documents to the appropriate office within 30 days after the close of the month in which the decision is executed:
(1) Two copies of the memorandum of decision;
(2) Except for the Army, one copy of the contractual document implementing any decision approving contractual action; and
(3) One copy of a final record, as described at 250.105.
(b) When a contract adjustment board decision is implemented, the activity which forwarded the case to the board shall prepare and submit to the board the documents identified in paragraphs (a) (2) and (3) of this subsection.
When indemnification is to be provided on contracts requiring both research and development work and other work, the contracting officer shall insert an appropriate clause using the authority of both 10 U.S.C. 2354 and Public Law 85-804.
(a) The use of Public Law 85-804 is limited to work which cannot be indemnified under 10 U.S.C. 2354 and is subject to compliance with FAR subpart 50.4.
(b) Indemnification under 10 U.S.C. 2354 is covered by 235.070.
41 U.S.C. 421 and 48 CFR chapter 1.
(e) Use the format in Table 51-1, Authorization to Purchase from Government Supply Sources. Specify the terms of the purchase, including contractor acceptance of any Government materiel, payment terms, and the addresses required by paragraph (f) of the clause at 252.251-7000, Ordering from Government Supply Sources.
(3)(ii) In addition to the procedure and form authorized by FAR 51.102(e)(3)(ii), contractors may use the DD Form 1155 when requisitioning from the Department of Veterans Affairs.
(f) The authorizing agency shall also be responsible for promptly considering requests of the DoD supply source for authority to refuse to honor requisitions from a contractor which is indebted to the DoD and has failed to pay proper invoices in a timely manner.
Contractor payments for purchases from DoD supply sources are due within 30 days of the date of a proper invoice (see FAR 32.902 for definition of “due date” and “payment date;” also see FAR 32.905(e)).
Use the clause at 252.251-7000, Ordering From Government Supply Sources, in solicitations and contracts which include the clause at FAR 52.251-1, Government Supply Sources.
(a)(2)(A) See FAR 28.307-2(c) for policy on contractor insurance.
(B) See FAR 28.308 for policy on self-insurance.
(C) See FAR 31.205-19 for allowability of insurance costs.
(5) Paragraph (d) of the clause at 252.251-7001 satisfies the requirement of FAR 51.202(a)(5) for a written statement.
Use the clause at 252.251-7001, Use of Interagency Fleet Management System (IFMS)Vehicles and Related Services, in solicitations and contracts which include the clause at FAR 52.251-2, Interagency Fleet Management System (IFMS) Vehicles and Related Services.