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 user. All of the Supplements have been deleted. The only manuals which remain in effect are: Armed Services Pricing Manual (1986) and Armed Services Pricing Manual, Volume 2, Price Analysis (1987).
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, Technology, and Logistics), 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(AT&L), 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 that addresses the requirements of 201.402(2). The justification should be in the form of a memorandum for the Director of Defense Procurement, Office of the Under Secretary of Defense (Acquisition, Technology, and Logistics).
(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 FAR and DFARS numbering, except department/agency supplemental numbering uses subsection numbering of 90 and up, instead of 70 and up.
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 USD (AT&L) 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(AT&L) has delegated authority to the Director of Defense Procurement (USD(AT&L)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(AT&L), and the Secretary of Defense approves in writing the inclusion of such certification requirement.
(3) Contracting activities must obtain the appropriate approval (see 201.404) 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 must develop and, upon approval by USD(AT&L)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 must submit requests for the Secretary of Defense, USD(AT&L), and USD(AT&L)DP approvals required by this section through the Director of the DAR Council.
(1) The Director of Defense Procurement, Office of the Under Secretary of Defense (Acquisition, Technology, and Logistics) (USD(AT&L)DP), is the approval authority within DoD for any individual or class deviation from—
(i) FAR 3.104, Procurement Integrity, or DFARS 203.104, Procurement Integrity;
(ii) FAR Subpart 27.4, Rights in Data and Copyrights, or DFARS Subpart 227.4, Rights in Data and Copyrights;
(iii) FAR part 30, Cost Accounting Standards Administration, or DFARS part 230, Cost Accounting Standards Administration;
(iv) FAR subpart 31.1, Applicability, or DFARS subpart 231.1, Applicability (contract cost principles);
(v) FAR subpart 31.2, Contracts with Commercial Organizations, or DFARS subpart 231.2, Contracts with Commercial Organizations; or
(vi) 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).
(2) Submit requests for deviation approval through department/agency channels to the approval authority in paragraph (1) of this section, 201.403, or 201.404, as appropriate. Submit deviations that require USD(AT&L)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.
(1) Individual deviations, except those described in 201.402(1) and paragraph (2) of this section, must be approved in accordance with the department/agency plan prescribed by 201.304(4).
(2) Contracting officers outside the United States may deviate from prescribed nonstatutory FAR and DFARS clauses when—
(i) 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; and
(ii) Such governments or organizations will not agree to the standard clauses.
(b)(i) Except as provided in paragraph (b)(ii) of this section, USD(AT&L)DP is the approval authority within DoD for any class deviation.
(ii) The senior procurement executives for the Army, Navy, and Air Force, and the Directors of the Defense Commissary Agency, the Defense Contract Management Agency, and the Defense Logistics Agency, may approve any class deviation, other than those described in 201.402(1), that does not—
(A) Have a significant effect beyond the internal operating procedures of the department or agency;
(B) Have a significant cost or administrative impact on contractors or offerors;
(C) Diminish any preference given small business concerns by the FAR or DFARS; or
(D) Extend to requirements imposed by statute or by regulations of other agencies such as the Small Business
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
(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.
(a) 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.
(b) Agency heads may delegate the purchase authority in 213.301 to DoD civilian employees and members of the U.S. Armed Forces.
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, and Logistics);
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, and Logistics).
For
41 U.S.C. 421 and 48 CFR chapter 1.
(b)(3) Report the matter in accordance with 209.406-3 or 209.407-3, 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.
(d)(3) When referring a violation to the agency debarring and suspending official, use the procedures at 209.406-3 or 209.407-3, and DoDD 7050.5, Coordination of Remedies for Fraud and Corruption Related to Procurement Activities.
Report suspected violations of the Gratuities clause in accordance with
(b) Report suspected antitrust violations in accordance with 209.406-3 or 209.407-3, 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 or 209.407-3, 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 or 209.407-3, 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, Technology, and Logistics), 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, report the matter in accordance with 209.406-3 or 209.407-3, 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, and Logistics).
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 the payment office (see the Federal Directory of Contract Administration Services Components); 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
(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 204.7303(a)(2) to determine if the contractor is registered in the CCR database.
(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
(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 that supports the uniform reporting requirements for—
(1) DD Form 350, Individual Contracting Action Report; and
(2) DD Form 1057, Monthly Summary of Contracting Actions.
(a) The DCADS meets FAR Subpart 4.6 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, instead of the SF 279, Federal Procurement Data System (FPDS) Individual Contract Action Report. DoD uses the DD Form 1057, Monthly Summary of Contracting Actions, instead of the SF 281, FPDS Summary Contract Action Report ($25,000 or Less).
Use the provision at FAR 52.204-6, Data Universal Numbering System (DUNS) Number, in solicitations that'
(1) Have an estimated value exceeding $25,000; or
(2) 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) Purchases made using the Governmentwide commercial purchase card.
(5) Actions for purchase of land or rental or lease of real property.
(6) Orders under existing contracts or agreements,
(i) Orders against basic ordering agreements, including service orders issued on DD Form 1164, Service Order for Personal Property, 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.
(7) Contract modifications,
(i) Change orders;
(ii) Supplemental agreements;
(iii) Funding actions; and
(iv) Option exercises.
(c)
(1) For the Army (including Corps of Engineers Civil Works): Department of the Army, ATTN: SAAL-PA, 5109 Leesburg Pike, Suite 302, Falls Church, VA 22041-3201.
(2) For the Navy: Fleet Industrial Supply Center, Norfolk Detachment Washington, DC, ATTN: PMRS, Code 02W4.A, 1014 N Street SE, Suite 400, Washington Navy Yard, Washington, DC 20374-5014.
(3) For the Air Force: SAF/AQCX, 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 the Defense Contract Management Agency (excluding contract administration office responsibilities in 204.670-4): Defense Contract Management Agency, ATTN: DCMA-DSP, 6350 Walker Lane, Suite 300, Alexandria, VA 22310-3226.
(6) For other DoD contracting activities: Department of the Army, ATTN: SAAL-PA, 5109 Leesburg Pike, Suite 302, 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, except actions summarized on DD Form 1057 in accordance with paragraph (b)(2) or (3) of this subsection.
(2) Actions that obligate or deobligate $25,000 or less and are—
(i) Under a very small business set-aside (see FAR Subpart 19.9);
(ii) Requirements that DoD is processing for a non-DoD Federal agency;
(iii) Multiple reports required by 204.670-6(c)(1) to separate foreign military sales (FMS) requirements from non-FMS requirements; or
(iv) In a designated industry group under the Small Business Competitiveness Demonstration Program (see FAR Subpart 19.10), except for—
(A) Foreign military sales;
(B) Orders or modifications under Federal schedules;
(C) Actions with government agencies;
(D) Actions with non-U.S. business firms; and
(E) Actions where the place of performance is other than the United States and its outlying areas.
(3) Actions that establish an indefinite-delivery contract not reported under other paragraphs of this subsection.
(4) Actions of any dollar value that the contracting office chooses to report on a DD Form 350.
(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), (3), or (4) 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(8).
(3) Actions that obligate or deobligate more than $25,000, but not more than $200,000, and are placed by a contracting officer on a Navy vessel.
(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 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 Traffic Management 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, for 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 when funds are obligated or deobligated or when an indefinite-delivery contract is established with no initial obligation of funds. For actions accomplished by a contract administration office, complete the DD Form 350 upon receipt of the contractual instrument annotated “DD FORM 350 REPORTING COPY.”
(3) Submit all DD Forms 350 for the calendar month to the departmental data collection point (see 204.670-1(c)) in accordance with departmental or agency procedures.
(4) Prepare and submit a corrected or canceling DD Form 350 as required in accordance with departmental data collection point instructions.
(5) Establish a control system for assigning report numbers to DD Forms 350 (Line A2 of the DD Form 350). The number must have six positions and may be any combination of alpha or numeric characters. If more than one activity within a contracting office uses the same reporting office code, the contracting office must assign separate blocks of numbers to each activity to prevent duplication of report numbers.
(6) Maintain the DD Form 350 in the contract file in any medium, in accordance with departmental or 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
(2) Complete the DD Form 1057 within three working days after the cutoff of the reporting month. Contracting offices may not cut off the reporting month before the 25th calendar day. The cutoff date for September is September 30. Submit the DD Form 1057 to the departmental data collection point in accordance with departmental or 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 offices;
(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 and 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. Report Control Symbol DD-AT&L(M)1014 applies to reports for DD Form 350 actions, and Report Control Symbol DD-AT&L(M)1015 applies to reports for DD Form 1057 actions.
There are three types of reports—single, consolidated, and multiple.
(a) A single report is one DD Form 350 report per action.
(b) A consolidated report combines several actions.
(1) Prepare consolidated reports for—
(i) Military Traffic Management 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.
(ii) 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.
(iii) Orders placed by the Defense Commissary Agency (DeCA) for resale items over $25,000. DeCA consolidates the orders monthly and reports the cumulative dollar amounts and actions on one DD Form 350.
(iv) Vouchers processed by the U.S. Army Contracting Command, Europe (USACCE), for the purchase of utilities from municipalities (
(2) Consolidated reports may be prepared in accordance with departmental or agency procedures for orders under
(c) A multiple report is more than one DD Form 350 per contracting action. Prepare multiple reports if—
(1) The action includes FMS requirements in addition to non-FMS requirements (Line 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.
(2) The action includes more than one type of contract (Line 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.
(3) The action includes non-DoD Federal agency requirements and DoD requirements. Submit one DD Form 350 for the non-DoD requirements and another DD Form 350 for the DoD requirements.
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 any information on the DD Form 350. If contact cannot be made for security reasons, obtain instructions from the Director of Security, Office of the Assistant Secretary of Defense (Command, Control, Communications, and Intelligence), (703) 614-0578, or DSN 224-0578.
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 Identifier PKX, Unclosed Contract Status, to provide this notice.
(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_info/eo/eo-types.html;
(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
(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 letter “I” or “O”.
(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
(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
(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 Federal 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 Defense Information Technology Contracting Organization.
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 order is placed and the price is influenced by such factors as the quantity ordered (e.g., 10-99 @ $1.00, 100-249 @ $.98, 250+ @ $.95), the destination, the FOB point, or the type of packaging required.
(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 line items must conform to the requirements of paragraph (a) of this subsection.
(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
(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
(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
(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 4000.25-5-M, Military Standard Contract Administration Procedures (MILSCAP), and Volume 7 of DoD 4100.39-M, Federal Logistics Information System (FLIS) Procedures Manual, prescribe use of CAGE codes.
(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 Customer Service: toll-free (888) 227-2423 or (888) 352-9333; DSN 932-4725; or commercial (616) 961-4725.
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: toll-free (888) 352-9333, DSN 932-4725, commercial (616) 961-4725. Facsimile: (616) 961-4388, 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 (transferor).
(b) Name(s), address(es), and code(s) (if any) of the entity who is the successor in interest (transferee).
(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
(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.
Use the provision at 252.204-7001, Commercial and Government Entity (CAGE) Code Reporting, in solicitations when—
(a) The solicitation does not include the clause at 252.204-7004, Required Central Contractor Registration; and
(b) The CAGE codes for the potential offerors are not available to the contracting office.
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: 1-888-227-2423, commercial: (616) 961-5757, or DSN: 932-5757; via the Internet at http://www.ccr.gov; or as otherwise provided by agency procedures.
(3) The contracting officer need not verify registration before placing an
(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: _______ (indicate if unrestricted, or restricted for small business or small disadvantaged business, etc.). Therefore, replies to this notice are also requested from
(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) Before advertising in newspapers, the contracting officer must obtain
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 $___ in overall costs for the present and future acquisition of these supplies or services. (Describe how estimate was derived.)
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)
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(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 DoD 4140.1-R, DoD Materiel Management Regulation, 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, and Logistics).
(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, and Logistics) 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.
(d)(i) 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-
(e) Prepare written acquisition plans for acquisition programs meeting the thresholds of paragraphs (d)(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.
(g) The program manager, or other official responsible for the program, has overall responsibility for acquisition planning.
(i)(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.
(h) For procurement of conventional ammunition, as defined in DoDD 5160.65, Single Manager for Conventional Ammunition (SMCA)—
(i) The department or agency—
(A) Must submit the acquisition plan to the SMCA at the following address: Deputy for Ammunition, Office of the Assistant Secretary of the Army (Acquisition, Logistics and Technology), ATTN: SAAL-ZCA, 5001 Eisenhower Avenue, Alexandria, VA 22333-0001. Telephone: Commercial (703) 617-8001; DSN 767-8001;
(B) Also must submit an acquisition plan to the SMCA for a new procurement covered by a previously approved acquisition plan, if the SMCA did not review the previously approved acquisition plan; and
(C) Must not proceed with the procurement until the SMCA provides written concurrence with the acquisition plan.
(ii) The SMCA—
(A) Will review the acquisition plan to determine if it is consistent with retaining national technology and industrial base capabilities in accordance with 10 U.S.C. 2304(c)(3) and Section 806 of Public law 105-261; and
(B) Will notify the department or agency of concurrence or non-concurrence. In the case of a non-concurrence, the SMCA, with assistance from the Army Office of the Executive Director for Conventional Ammunition, will attempt to resolve the matter with the department or agency. If no agreement is reached, the Assistant Secretary of the Army (Acquisition, Logistics and Technology) will make the final decision on the appropriate acquisition approach.
(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(d)(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
(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 4120.24-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)
(19)
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(
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(B)
(
(
(
(C) Ensure compliance with DoD Instruction 4715.4, 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 070207.
(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 delivery tickets (this option is preferred if there are many oral orders); or
(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) If permitted under the schedule contract, use of the Governmentwide commercial purchase card—
(i) Is mandatory for placement of orders valued at or below the micro-purchase threshold; and
(ii) Is optional for placement of orders valued above the micro-purchase threshold.
(a) Before purchasing a product listed in the FPI Schedule, departments and agencies shall conduct market research to determine whether the FPI product is comparable to products available from the private sector that best meet the Government's needs in terms of price, quality, and time of delivery (10 U.S.C. 2410n). This is a unilateral decision made solely at the discretion of the department or agency.
(i) If the FPI product is comparable, follow the policy at FAR 8.602(a).
(ii) If the FPI product is not comparable—
(A) Use competitive procedures to acquire the product; and
(B) Consider a timely offer from FPI for award in accordance with the specifications and evaluation factors in the solicitation.
For DoD, FPI clearances also are not required—
(1) For orders of listed items totaling $250 or less that require delivery within 10 days; or
(2) If market research shows that the FPI product is not comparable to products available from the private sector that best meet the Government's needs in terms of price, quality, and time of delivery.
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
(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 (see FAR 11.302(b));
(9) A statement as to whether the acquiring department may exceed the total MIPR estimate, and if so, by what amount; and
(10) Unless otherwise agreed between the departments, an original and six copies of each MIPR and its attachments (except specifications, drawings, and other data).
(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 purchase or otherwise grants authority to purchase locally; or
(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—
In addition, forward a copy of each request 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 may execute a blanket agreement to use advance MIPRs.
(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 of the cancellation notice from the requiring department, the contracting officer shall issue a termination data letter to the requiring department (original and four copies) containing, as a minimum, the information in Table 8-1, Termination Data Letter.
(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
(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 Funds, billings to the NASA office designated in Block 9 of the NASA-Defense Purchase Request, except where agreements provide that reimbursement is not required. Departments and agencies will support billings in the same manner as billings between departments and agencies.
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 data packages. These planning efforts may be acquired through an individual service contract or as a line item on a contract for a planned item.
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 DSCP 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.
(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 11 of DoD 4160.21-M, Defense Materiel Disposition 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 DSCP:
(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 DSCP;
(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 11, DoD 4160.21-M, Defense Materiel Disposition 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, and Logistics) 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 On-Site Inspection Under the Intermediate-Range Nuclear Forces (INF) Treaty, in all solicitations and contracts exceeding the simplified acquisition threshold, except solicitations and contracts for commercial items.
(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)
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(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 Logistics), 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:
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(D) In accordance with 10 U.S.C. 2536(b)(1)(B), the Secretary of Defense may, in the case of a contract awarded
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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 of Defense Procurement, ATTN: OUSD(AT&L) 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.
(a) When the contracting officer considers such action appropriate, the contracting officer must submit a copy of the determination to the appropriate debarring and suspending official (see 209.403).
(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 the Federal 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 that 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 4120.24-M, Defense Standardization Program (DSP) 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 and suspending 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.
(3) The Defense Logistics Agency Special Assistant for Contracting Integrity is the exclusive representative of the Secretary of Defense to suspend and debar contractors from the purchase of Federal personal property under the Federal Property Management Regulations (41 CFR 101-45.6) and the Defense Materiel Disposition Manual (DoD 4160.21-M).
(a) Under 10 U.S.C. 2393(b), when a department or agency determines that a compelling reason exists for it to conduct business with a contractor that is debarred or suspended from procurement programs, it must provide written notice of the determination to the General Services Administration, Office of Acquisition Policy. Examples of compelling Reasons are—
(i) Only a debarred or suspended contractor can provide the supplies or services;
(ii) Urgency requires contracting with a debarred or suspended contractor;
(iii) The contractor and a department or agency have an agreement covering the same events that resulted in the debarment or suspension and the agreement includes the department or agency decision not to debar or suspend the contractor; or
(iv) The national defense requires continued business dealings with the debarred or suspended contractor.
(b)(i) The Procurement Cause and Treatment Code “H” annotation in the GSA List of Parties Excluded from
(ii) Under the authority of 40 CFR 32.215(b), the agency head may grant an exception permitting award to a Code “H” ineligible contractor if it is in the paramount interest of the United States.
(A) The agency head may delegate this exception authority to a level no lower than a general or flag officer or a member of the Senior Executive Service.
(B) The official granting the exception must provide written notice to the Environmental Protection Agency debarring official.
(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)
(i) Refer all matters appropriate for consideration by an agency debarring and suspending official as soon as practicable to the appropriate debarring and suspending official identified in 209.403. Any person may refer a matter to the debarring and suspending official.
(ii) Use the following format when referring a matter to the agency debarring and suspending official for consideration. To the extent practicable, provide all specified information.
(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—
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(F) For any other contracts outstanding with the contractor or any of its affiliates—
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(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) If a contracting office initiates the report, the comments and recommendations of the contracting officer and of each higher-level contracting review authority regarding—
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(J) When appropriate, as an enclosure to the report—
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(iii) Send three copies of each report, including enclosures, to the appropriate debarring and suspending official.
(iv) If a referral lacks sufficient evidence of a cause for debarment, the debarring and suspending official may initiate a review or investigation, as appropriate, by reporting the referral to the appropriate Government entity, e.g., contracting activity, inspector general, or criminal investigative agency.
(b)
(i) The agency debarring and suspending official may initiate the debarment process by issuing a notice of proposed debarment in accordance with FAR 9.406-3(c) when the debarring and suspending official finds that the administrative record contains sufficient evidence of one or more of the causes for debarment stated in FAR 9.406-2 or 209.406-2.
(A) The absence of a referral in accordance with paragraph (a)(i) of this subsection, or the absence of any information specified in the report format in paragraph (a)(ii) of this subsection, will not preclude the debarring and suspending official from making such a finding.
(B) The signature of the debarring and suspending official on the notice of proposed debarment is sufficient evidence that the debarring and suspending official has made such a finding.
(ii) The agency debarring and suspending official must use the decisionmaking process stated in FAR 9.406-3(b), DFARS Appendix H, and any agency-specific procedures that were
(d)
(a)
(i) Refer all matters appropriate for consideration by an agency debarring and suspending official as soon as practicable to the appropriate debarring and suspending official identified in 209.403. Any person may refer a matter to the debarring and suspending official.
(ii) Use the format at 209.406-3(a)(ii) when referring a matter to the agency debarring and suspending official for consideration. To the extent practicable, provide all information specified in the format.
(iii) If a referral lacks sufficient evidence of a cause for suspension, the debarring and suspending official may initiate a review or investigation, as appropriate, by reporting the referral to the appropriate Government entity, e.g., contracting activity, inspector general, or criminal investigative agency.
(b)
(i) The agency debarring and suspending official may initiate the suspension process by issuing a notice of suspension in accordance with FAR 9.407-3(c) when the debarring and suspending official finds that the administrative record contains sufficient evidence of one or more of the causes for suspension stated in FAR 9.407-2.
(A) The absence of a referral in accordance with paragraph (a)(i) of this subsection, or the absence of any information specified in the report format at 209.406-3(a)(ii), will not preclude the debarring and suspending official from making such a finding.
(B) The signature of the debarring and suspending official on the notice of suspension is sufficient evidence that the debarring and suspending official has made such a finding.
(ii) In deciding whether to terminate a suspension following a submission of matters in opposition, the agency debarring and suspending official must use the decisionmaking process stated in FAR 9.407-3(b), DFARS Appendix H, and any agency-specific procedures that were provided to the contractor in advance of the decision.
(d)
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) Except as provided in paragraph (b) of this subsection, 10 U.S.C. 983 prohibits DoD from providing funds by contract or grant to an institution of higher education if the Secretary of Defense determines that the institution has a policy or practice that prohibits or in effect prevents—
(1) The Secretary of a military department from maintaining, establishing, or operating a unit of the Senior Reserve Officer Training Corps (ROTC) at that institution;
(2) A student at that institution from enrolling in a unit of the senior ROTC at another institution of higher education;
(3) The Secretary of a military department or the Secretary of Transportation from gaining entry to campuses, or access to students on campuses, for purposes of military recruiting; or
(4) Military recruiters from accessing certain information pertaining to students enrolled at that institution.
(b) The prohibition in paragraph (a) of this subsection does not apply to an institution of higher education if the Secretary of Defense determines that—
(1) The institution has ceased the policy or practice described in paragraph (a) of this subsection; or
(2) The institution has a long-standing policy of pacifism based on historical religious affiliation.
If the Secretary of Defense determines that an institution of higher education is ineligible to receive DoD funds because of a policy or practice described in 209.470-2(a)—
(a) The Secretary of Defense will list the institution on the List of Parties Excluded from Federal Procurement and Nonprocurement Programs published by General Services Administration (also see FAR 9.404 and 32 CFR part 216); and
(b) DoD components—
(1) Shall not solicit offers from, award contracts to, or consent to subcontracts with the institution;
(2) Shall make no further payments under existing contracts with the institution; and
(3) Shall terminate existing contracts with the institution.
Use the clause at 252.209-7005, Reserve Officer Training Corps and 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.
(a) Also conduct market research before purchasing a product listed in the Federal Prison Industries (FPI) Schedule. Use the results to determine whether the FPI product is comparable to products available from the private sector that best meet the Government's needs in terms of price, quality, and time of delivery. (See subpart 208.6.)
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
(b) DoD uses the categorical method of reporting. Do not use the provision at FAR 52.211-7, Alternatives to Government-Unique Standards, in DoD solicitations.
(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.
(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 Agency, 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 contract award at the head of the contracting activity or program executive officer level. This authority may not be delegated.
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.
(a)(i) In accordance with Section 821 of the National Defense Authorization Act for Fiscal Year 2001 (Public Law 106-398), the contracting officer also may use FAR part 12 for any performance-based contracting for services if the procedures in FAR Subpart 13.5 are not used, and the contract or task order—
(A) Is entered into on or before October 30, 2003;
(B) Has a value of $5 million or less;
(C) Meets the definition of performance-based contracting at FAR 2.101;
(D) Uses quality assurance surveillance plans;
(E) Includes performance incentives where appropriate;
(F) Specifies a firm-fixed price; and
(G) Is awarded to an entity that provides similar services at the same time to the general public under terms and conditions similar to those in the contract.
(ii) In exercising the authority specified in paragraph (a)(i) of this section, the contracting officer should modify paragraph (a) of the clause at FAR 52.212-4 as may be necessary to ensure the contract's remedies adequately protect the Government's interests.
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 (see 225.770-3), indicate on an addendum that “The certification in paragraph (b) of the provision at 252.212-7000 does not apply to this solicitation.”
(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 paragraphs (a) and (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 252.209-7001, Disclosure of Ownership or Control by the Government of a Terrorist Country, as prescribed in 209.104-70(a).
(vi) 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.
(vii) Use the clause at 252.232-7009, Mandatory Payment by Governmentwide Commercial Purchase Card, as prescribed in 232.1110.
(3) A contracting officer supporting 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(8) also may use the Governmentwide commercial purchase card to make a purchase that exceeds the micro-purchase threshold but does not exceed the simplified acquisition threshold, if;
(i) The supplies or services being purchased are immediately available;
(ii) One delivery and one payment will be made; and
(iii) The requirements of paragraphs (2)(i) and (ii) of this section are met.
(c)
The head of the contracting activity is the approval authority within the DoD for waivers under FAR 12.302(c).
Structure awards valued above the micro-purchase threshold (
(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, unless the restriction specifically applies to commercial items. For the restriction that specifically applies to commercial ball or roller bearings as end items, see 225.7019-2(b) (Section 8064 of Public Law 106-259).
(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) 10 U.S.C. 2631, Transportation of Supplies by Sea (except as provided in the clause at 252.247-7023, Transportation of Supplies by Sea).
(xxiii) 19 U.S.C. 2512, Trade Agreements Act.
(xxiv) 41 U.S.C. 10, Buy American Act.
(xxv) Domestic Content Restrictions in the National Defense Appropriations Acts for Fiscal Years 1996 and Subsequent Years, unless the restriction specifically applies to commercial items. For the restriction that specifically applies to commercial ball or roller bearings as end items, see 225.7019-2(b) (Section 8064 of Public Law 106-259).
(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).
(b)(i) For the acquisition of transportation and transportation-related services, also consider evaluating offers in accordance with the criteria at 247.206(1).
(ii) For the acquisition of transportation in supply contracts that will include a significant requirement for transportation of items outside the continental United States, also evaluate offers in accordance with the criterion at 247.301-71.
(iii) For the direct purchase of ocean transportation services, also evaluate offers in accordance with the criterion at 247.572-2(c)(2).
48 U.S.C. 421 and 48 CFR Chapter 1.
Structure awards valued above the micro-purchase threshold (
(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.
Use the Governmentwide commercial purchase card as the method of purchase and/or method of payment for purchases valued at or below the micro-purchase threshold. This policy applies to all types of contract actions authorized by the FAR unless—
(a) The Deputy Secretary of Defense has approved an exception for an electronic commerce/electronic data interchange system or operational requirement that results in a more cost-effective payment process;
(b)(1) A general or flag officer or a member of the Senior Executive Service (SES) makes a written determination that—
(i) The source or sources available for the supply or service do not accept the purchase card; and
(ii) The contracting office is seeking a source that accepts the purchase card.
(2) To prevent mission delays, if an activity does not have a resident general or flag officer of SES member, delegation of this authority to the level of the senior local commander or director is permitted; or
(c) The purchase or payment meets one or more of the following criteria:
(1) The place of performance is entirely outside of any State, territory, or possession of the United States, the
(2) The purchase is a Standard Form 44 purchase for aviation fuel or oil.
(3) The purchase is an overseas transaction by a contracting officer 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(8).
(4) The purchase is a transaction in support of intelligence or other specialized activities addressed by Part 2.7 of Executive Order 12333.
(5) The purchase is for training exercises in preparation for overseas contingency, humanitarian, or peacekeeping operations.
(6) The payment is made with an accommodation check.
(7) The payment is for a transportation bill.
(8) The purchase is under a Federal Supply Schedule contract that does not permit use of the Governmentwide commercial purchase card.
(9) The purchase is for medical services and—
(i) It involves a controlled substance or narcotic;
(ii) It requires the submission of a Health Care Summary Record to document the nature of the care purchased;
(iii) The ultimate price of the medical care is subject to an independent determination that changes the price paid based on application of a mandatory CHAMPUS Maximum Allowable Charge determination that reduces the Government liability below billed charges;
(iv) The Government already has entered into a contract to pay for the services without the use of a purchase card;
(v) The purchaser is a beneficiary seeking medical care; or
(vi) The senior local commander or director of a hospital or laboratory determines that use of the purchase card is not appropriate or cost-effective. The Medical Prime Vendor Program and the DoD Medical Electronic Catalog Program are two examples where use of the purchase card may not be cost-effective.
(1) “United States,” as used in this section, means the 50 States and the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, the Commonwealth of the Northern Mariana Islands, Guam, American Samoa, Wake Island, Johnston Island, Canton Island, the outer Continental Shelf lands, and any other place subject to the jurisdiction of the United States (but not including leased bases).
(2) An individual appointed in accordance with 201.603-3(b) also may use the Governmentwide commercial purchase card to make a purchase that exceeds the micro-purchase threshold but does not exceed $25,000, if—
(i) The purchase—
(A) Is made outside the United States for use outside the United States; and
(B) Is for a commercial item; but
(C) Is not for work to be performed by employees recruited within the United States;
(D) Is not for supplies or services originating from, or transported from or through, sources identified in FAR Subpart 25.7;
(E) Is not for ball or roller bearings as end items;
(F) Does not require access to classified or Privacy Act information; and
(G) Does not require transportation of supplies by sea; and
(ii) The individual making the purchase—
(A) Is authorized and trained in accordance with agency procedures;
(B) Complies with the requirements of FAR 8.001 in making the purchase; and
(C) Seeks maximum practicable competition for the purchase in accordance with FAR 13.104(b).
(3) A contracting officer supporting 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(8) also may use the Governmentwide commercial purchase card to make a purchase that exceeds the micro-purchase threshold but does not exceed the simplified acquisition threshold, if—
(i) The supplies or services being purchased are immediately available;
(ii) One delivery and one payment will be made; and
(iii) The requirements of paragraphs (2)(i) and (ii) of this section are met.
(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 52.225-1, buy American Act-Balance of Payments Program-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 225.1101(2); or
(ii) 252.225-7036, Buy American Act-North American Free Trade Agreement Implementation Act-Balance of Payments Program, as prescribed at 225.1101(13).
(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.
Structure awards valued above the micro-purchase threshold (
(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.
Structure awards valued above the micro-purchase threshold (
(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
(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)(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
(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 any errors detected by the management system auditing process.
(a) The weighted guidelines method focuses on four profit factors—
(1) Performance risk;
(2) Contract type risk;
(3) Facilities capital employed; and
(4) Cost efficiency.
(b) The contracting officer assigns values to each profit factor; the value multiplied by the base results in the profit objective for that factor. Except for the cost efficiency special 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 price 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. The cost efficiency special factor has no normal value. The contracting officer shall exercise sound business judgment in selecting a value when this special factor is used (see 215.404-71-5).
(a)
(1) Technical—the technical uncertainties of performance.
(2) Management/cost control—the degree of management effort necessary—
(i) To ensure that contract requirements are met; and
(ii) 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 two 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) and (e) of this subsection.
(3) Compute the composite as shown in the following example:
(4) Insert the amount from Block 20 of the DD Form 1547. Block 20 is total contract costs, excluding facilities capital cost of money.
(5) Multiply (3) by (4).
(c) Values: Normal and designated ranges.
(1)
(2)
(d)
(1) Review the contract requirements and focus on the critical performance elements in the statement of work or specifications. Factors to consider include—
(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)
(i) The contracting officer may assign a higher than normal value in those cases where there is a substantial technical risk. Indicators are—
(A) Items are being manufactured using specifications with stringent tolerance limits;
(B) The efforts require highly skilled personnel or require the use of state-of-the-art machinery;
(C) The services and analytical efforts are extremely important to the Government and must be performed to exacting standards;
(D) The contractor's independent development and investment has reduced the Government's risk or cost;
(E) The contractor has accepted an accelerated delivery schedule to meet DoD requirements; or
(F) 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 those cases where the technical risk is low. Indicators are—
(A) Requirements are relatively simple;
(B) Technology is not complex;
(C) Efforts do not require highly skilled personnel;
(D) Efforts are routine;
(E) Programs are mature; or
(F) 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.
(4)
(i) The contracting officer may assign values within the technology incentive range when contract performance includes the introduction of new, significant technological innovation. Use the technology incentive range only for the most innovative contract efforts. Innovation may be in the form of—
(A) Development or application of new technology that fundamentally changes the characteristics of an existing product or system and that results in increased technical performance, improved reliability, or reduced costs; or
(B) New products or systems that contain significant technological advances over the products or systems they are replacing.
(ii) When selecting a value within the technology incentive range, the contracting officer should consider the relative value of the proposed innovation to the acquisition as a whole. When the innovation represents a minor benefit, the contracting officer should consider using values less than the norm. For innovative efforts that will have a major positive impact on the product or program, the contracting officer may use values above the norm.
(e)
(1) The contracting officer should evaluate—
(i) 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) The management involvement expected on the prospective contract action;
(iii) The degree of cost mix as an indication of the types of resources applied and value added by the contractor;
(iv) The contractor's support of Federal socioeconomic programs;
(v) The expected reliability of the contractor's cost estimates (including the contractor's cost estimating system);
(vi) The adequacy of the contractor's management approach to controlling cost and schedule; and
(vii) 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 contracting officer may assign a higher than normal value when there is a high degree of management effort. Indicators of this are—
(A) The contractor's value added is both considerable and reasonably difficult;
(B) The effort involves a high degree of integration or coordination;
(C) The contractor has a good record of past performance;
(D) The contractor has a substantial record of active participation in Federal socioeconomic programs;
(E) The contractor provides fully documented and reliable cost estimates;
(F) The contractor makes appropriate make-or-buy decisions; or
(G) The contractor has a proven record of cost tracking and control.
(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)
(i) The contracting officer may assign a lower than normal value when the management effort is minimal. Indicators of this are—
(A) The program is mature and many end item deliveries have been made;
(B) The contractor adds minimal 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;
(F) The contractor does not cooperate in the evaluation and negotiation of the proposal;
(G) The contractor's cost estimating system is marginal;
(H) The contractor has made minimal effort to initiate cost reduction programs;
(I) The contractor's cost proposal is inadequate;
(J) The contractor has a record of cost overruns or another indication of unreliable cost estimates and lack of cost control; or
(K) The contractor has a poor record of past performance.
(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.
(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 20, i.e., the total allowable costs excluding 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 either that the contract does not provide progress payments or performance-based payments, or that the contract provides them only on a limited basis, such as financing of first articles. Do not compute a working capital adjustment.
(2) When the contract contains provisions for progress payments, compute a working capital adjustment (Block 25).
(3) For the purposes of assigning profit values, treat a fixed-price contract with redetermination 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 25. However, they may receive higher than normal values within the designated range to the extent that portions of cost are fixed.
(6) When the contract contains provisions for performance-based payments, do not compute a working capital adjustment.
(d)
(1)
(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;
(vii) Risks associated with contracts for foreign military sales (FMS) that are not funded by U.S. appropriations; and
(viii) When the contract contains provisions for performance-based payments—
(A) The frequency of payments;
(B) The total amount of payments compared to the maximum allowable amount specified at FAR 32.1004(b)(2); and
(C) The risk of the payment schedule to the contractor.
(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;
(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 risks above those normally present in DoD contracts for similar items; or
(v) An aggressive performance-based payment schedule that increases risk.
(4)
(i) Very mature product line with extensive cost history;
(ii) Relative short-term contracts;
(iii) Contractual provisions that substantially reduce the contractor's risk;
(iv) Incentive provisions that place a low degree of risk on the contractor;
(v) Performance-based payments totaling the maximum allowable amount(s) specified at FAR 32.1004(b)(2); or
(vi) A performance-based payment schedule that is routine with minimal risk.
(e)
(1) Costs financed equal total costs multiplied by the portion (percent) of costs financed by the contractor.
(2) Total costs equal Block 20 (i.e., all allowable costs 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 that the contractor finances 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 80 percent, the portion that the contractor finances is 20 percent. On contracts that provide 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 with end items being delivered in the 34th, 36th, 38th, and 40th months of the contract. The average period is 37 months and the contract length factor is 1.15.
(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 20 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 20 at price (i.e., including G&A expenses and profit).
(3) Multiply (1) by (2).
(c)
(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; and
(iii) Should consider any contractual provisions that reduce the contractor's risk of investment recovery, such as termination protection clauses and capital investment indemnification.
(2)
(i) The contracting officer may assign a higher than normal value if the facilities capital investment has direct, identifiable, and exceptional benefits. Indicators are—
(A) New investments in state-of-the-art technology that reduce acquisition cost or yield other tangible benefits such as improved product quality or accelerated deliveries; or
(B) Investments in new equipment for research and development applications.
(ii) The contracting officer may assign a value significantly above normal when there are direct and measurable benefits in efficiency and significantly
(3)
(i) The contracting officer may assign a lower than normal value if the facilities capital investment has little benefit to DoD. Indicators are—
(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) This special factor provides an incentive for contractors to reduce costs. To the extent that the contractor can demonstrate cost reduction efforts that benefit the pending contract, the contracting officer may increase the prenegotiation profit objective by an amount not to exceed 4 percent of total objective cost (Block 20 of the DD Form 1547) to recognize these efforts (Block 29).
(b) To determine if using this factor is appropriate, the contracting officer shall consider criteria, such as the following, to evaluate the benefit the contractor's cost reduction efforts will have on the pending contract:
(1) The contractor's participation in Single Process Initiative improvements;
(2) Actual cost reductions achieved on prior contracts;
(3) Reduction or elimination of excess or idle facilities;
(4) The contractor's cost reduction initiatives (e.g., competition advocacy programs, technical insertion programs, obsolete parts control programs, spare parts pricing reform, value engineering, outsourcing of functions such as information technology). Metrics developed by the contractor such as fully loaded labor hours (i.e., cost per labor hour, including all direct and indirect costs) or other productivity measures may provide the basis for assessing the effectiveness of the contractor's cost reduction initiatives over time;
(5) The contractor's adoption of process improvements to reduce costs;
(6) Subcontractor cost reduction efforts;
(7) The contractor's effective incorporation of commercial items and processes; or
(8) The contractor's investment in new facilities when such investments contribute to better asset utilization or improved productivity.
(c) When selecting the percentage to use for this special factor, the contracting officer has maximum flexibility in determining the best way to evaluate the benefit the contractor's cost reduction efforts will have on the pending contract. However, the contracting officer shall consider the impact that quantity differences, learning, changes in scope, and economic factors such as inflation and deflation will have on cost reduction.
(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
(1)
(ii) Do not assign a value from the technology incentive designated range.
(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 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 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 must send completed DD Forms 1547 on actions that exceed the cost or pricing data threshold, where the contracting officer used the weighted guidelines method, an alternate structured approach, or the modified weighted guidelines method, to their designated office within 30 days after contract award.
(b) Participating contracting offices and their designated offices are—
(c) When the contracting officer delegates negotiation of a contract action that exceeds the cost or pricing data threshold to another agency (e.g., to an ACO), that agency must ensure that a copy of the DD Form 1547 is provided to the delegating office for reporting purposes within 30 days after 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 DD-AT&L(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) DCMA or the military department responsible for performing contact 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 2.101) 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 DCMA-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 price if the contractor fails to submit the supplemental proposal; and
(iv) Provide that failure of the Government and the contractor to agree to
(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. 2306b(l)(7); Section 8008(a) of Public Law 105-56 and similar sections in subsequent DoD appropriations acts).
(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. 2306b(l)(6); 10 U.S.C. 2306c(d)(3); Section 8008(a) of Public Law 105-56 and similar sections in subsequent DoD appropriations acts).
(c) 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.
(d)(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 (see 217.171(a)(5); 217.172(c); and 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 217.171(a)(4)(i) and 217.172(d)(1));
(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)); or
(v) Include a cancellation ceiling in excess of $100 million (see 217.171(a)(4)(ii) and 217.172(d)(2)).
(2) A DoD component must submit a request for authority to enter into multiyear contracts described in paragraphs (d)(1)(i) through (iv) of this section 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 Public Law 105-56).
(3) If the advisability of using a multiyear contract becomes apparent too late to satisfy the requirements in paragraph (d)(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 Public Law 105-56)
(4) Agencies must establish reporting procedures to meet the congressional notification requirements of paragraph (d)(1) of this section. The head of the agency must submit a copy of each notice to the Director of Defense Procurement, Office of the Under Secretary of Defense (Acquisition, Technology, and
(a)
(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 (
(iv) Base services (
(2) The head of the agency must be guided by the following principles when entering into a multiyear contract for services:
(i) The portion of the cost of any plant or equipment amortized as a cost of contract performance should not exceed the ratio between the period of contract performance and the anticipated useful commercial life of the plant or equipment. As used in this section, “useful commercial life” means the commercial utility of the facilities rather than the physical life, with due consideration given to such factors as the location, specialized nature, and obsolescence of the facilities.
(ii) Consider the desirability of obtaining an option to extend the term of the contract for a reasonable period not to exceed 3 years at prices that do not include charges for plant, equipment, or other nonrecurring costs already amortized.
(iii) Consider the desirability of reserving the right to take title, under the appropriate circumstances, to the plant or equipment upon payment of the unamortized portion of the cost.
(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 requirement for the services consistent with current plans for the proposed contract period;
(ii) Furnishing the services 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 promote the best interests of the United States by encouraging effective competition and promoting economies in operations.
(4) The head of the agency must provide written notice to the congressional defense committees at least 30 days before award of a multiyear contract for services that include—
(i) An unfunded contingent liability in excess of $20 million (Section 8008(a) of Public Law 105-56 and similar sections in subsequent DoD appropriations acts); or
(ii) A cancellation ceiling in excess of $100 million.
(5) The head of the agency must not initiate a multiyear contract for services exceeding $500 million unless a law specifically provides authority for the contract.
(b)
(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 not enter into or extend a multiyear contract that exceeds $500 million (when entered into or when extended) until the Secretary of Defense identifies the contract and any extension in a report submitted to the congressional defense committees (10 U.S.C. 2306b(l)(5)).
(d) The head of the agency must provide written notice to the congressional defense committees at least 30 days before award of a multiyear contract that includes—
(1) An unfunded contingent liability in excess of $20 million (10 U.S.C. 2306b(l)(1); Section 8008(a) of Public Law 105-56 and similar sections in subsequent DoD appropriations acts); or
(2) A cancellation ceiling in excess of $100 million (10 U.S.C. 2306b(g)).
(e) 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)).
(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 (AT&L) 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); Section 8008(a) of Public Law 105-56 and similar sections in subsequent DoD appropriations acts)
(b) Before initiating an advance procurement, the contracting officer must verify that it is consistent with DoD policy (e.g., Chapter 2 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.
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 North American Industry Classification System
(ii) The follower company will be a prime contractor and the NAICS Industry Subsector 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 entered into by the other agency. (Pub. L. 105-261, Section 814.)
(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) DoD 4140.1-R, Chapter 6.2.
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 DoD 4140.1-R, Chapter 6.2.
(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 for the new items without any exchange, the contracting officer may award on that basis and forgo the exchange.
(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 ___ day of _____ 19__, by the United States of America (the “Government”:) represented by ______, the Contracting Officer, and, ______ a corporation organized and existing under the laws of the State of ______ (the “Contractor”).
(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
(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
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 one substantially the same, in all solicitations for supplies when the acquisition is being conducted under other than full and open competition, except when—
(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 definitization, including the adverse impact on agency requirements resulting from delays in beginning performance.
(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 the UCA, the contracting officer knows that the definitive contract action will meet the criteria of FAR 15.403-1, 15.403-2, or 15.403-3 for not requiring submission of cost or pricing data, the words “and cost or pricing data” may be deleted from paragraph (a) of the clause.
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) Include appropriately tailored provisions in the contract when SAIP is used.
When acquiring a part for which the Government does not have necessary
(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 DoD 4140.1-
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 meetings, long lead time items conferences, source coding meetings.
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,
(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 2003 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) For the defense agencies, the director of the Office of Small and Disadvantaged Business Utilization must be appointed by, be responsible to, and report directly to the director or deputy director of the defense agency.
(8) The responsibility for assigning small business technical advisors is delegated to the head of the contracting activity.
(10) Contracting activity small business specialists perform this function by—
(A) Reviewing and making recommendations for all acquisitions over $10,000;
(B) Making the review before issue of the solicitation or contract modification and documenting it on DD Form 2579, Small Business Coordination Record; and
(C) Referring recommendations that have been rejected by the contracting officer to the Small Business Administration (SBA) procurement center representative. However, 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
(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 North American Industry Classification System Industry Subsector 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, Technology, and Logistics), 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 D4C 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 North American Industry Classification System Industry Subsector of the acquisition is one in which use of a price evaluation adjustment for small disadvantaged business concerns is currently authorized (
(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 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.
(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, Small Disadvantaged and Women-Owned Small 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),
(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 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 Business Subcontracting Plan.
(2) In contracts with contractors that 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—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 Partnership Agreement (PA) dated February 1, 2002, between the Small Business Administration (SBA) and the Department of Defense (DoD), the SBA delegated to the Under Secretary of Defense (Acquisition, Technology, and Logistics) its authority under paragraph 8(a)(1)(A) of the Small Business Act (15 U.S.C. 637(a)) to enter
(b) Contracts awarded under the PA may be awarded directly to the 8(a) participant on either a sole source or competitive basis. An SBA signature on the contract is not required.
(c) Notwithstanding the PA, the contracting officer may elect to award a contract pursuant to the provisions of FAR Subpart 19.8.
(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 PA cited in 219.800 (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 PA. All notifications should be submitted in writing, using facsimile or electronic mail, when possible, and shall specify that—
(i) Under the PA, 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 program 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 PA 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, electronic mail, or any other means acceptable to the SBA district office—
(i) A copy of the signed purchase order; and
(ii) A notice stating that the purchase order is being processed under the PA. 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
(3) The notification to SBA shall identify any joint venture proposed for performance of the contract. SBA shall approve a joint venture before award of an 8(a) contract involving the joint venture.
(4) For competitive requirements for construction to be performed overseas, submit the notification to SBA Headquarters.
For requirements processed under the PA 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 PA 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 all firms in the competitive range if discussions are to be conducted, or on all firms with a realistic chance of award if no discussions are to be conducted.
For requirements processed under the PA 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 PA 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 PA 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 PA 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 PA 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 PA 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 PA 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 PA 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)(i) 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—
(A) Be reviewed for possible award under the 8(a) Program regardless of dollar value.
(B) Not be set aside for small business if the estimated value is $85,000 or more (including indefinite delivery-indefinite quantity contracts if the value of all anticipated orders exceeds $85,000).
(C) Be considered for ESB set-aside if the estimated value is both less than the emerging small business reserve amount and less than $85,000.
(D) Be considered for small business set-aside if the estimated value is less than $85,000, regardless of whether small business set-asides for other architect-engineer services are prohibited under the Small Business Competitiveness Demonstration Program, when an ESB set-aside is not appropriate.
(ii) 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 in FAR subpart 19.10.
(b) The targeted industry categories for DoD are:
(b)(1) The Director, Small and Disadvantaged Business Utilization, Office of the Under Secretary of Defense (Acquisition, Technology, and Logistics) (OUSD(AT&L)), will determine whether reinstatement of small business set-asides is necessary to meet the agency goal and will recommend reinstatement to the Director of Defense Procurement (OUSD(AT&L)). Military departments and defense agencies shall not reinstate small business set-asides unless directed by the Director of 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 North American Industry Classification System Industry Subsectors 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
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; 10 U.S.C. 2302 note). The purpose of the Program is to provide incentives for DoD contractors to assist protege firms in enhancing their capabilities and to increase participation of such firms in Government and commercial contracts.
DoD policy and procedures for implementation of the Program are contained in Appendix I, Policy and Procedures for the DoD Pilot Mentor-Protege Program.
The Program includes—
(a) Mentor firms that are prime contractors with at least one active subcontracting plan negotiated under FAR Subpart 19.7.
(b) Protege firms that are—
(1)(i) small disadvantaged business concerns as defined at 219.001(1);
(ii) Business entities owned and controlled by an Indian tribe;
(iii) business entities owned and controlled by a Native Hawaiian Organization;
(iv) Qualified organizations employing the severely disabled; or
(v) Women-owned small business concerns;
(2) Eligible for receipt of Federal contracts; and
(3) Selected by the mentor firm.
(c) Mentor-protege agreements that establish a developmental assistance program for a protege firm.
(d) Incentives that DoD may provide to mentor firms, including:
(1) Reimbursement for developmental assistance costs through—
(i) A separately priced contract line item on a DoD contract; or
(ii) A separate contract, upon written determination by the Director, Small and Disadvantaged Business Utilization, Office of the Under Secretary of Defense (Acquisition, Technology, and Logistics) (SADBU, OUSD (AT&L)), that unusual circumstances justify reimbursement using a separate contract; or
(2) Credit toward applicable subcontracting goals, established under a subcontracting plan negotiated under FAR Subpart 19.7, for developmental assistance costs that are not reimbursed.
The procedures for application, acceptance, and participation in the Program are in Appendix I, Policy and Procedures for the DoD Pilot Mentor-Protege Program. The Director, SADBU, OUSD (AT&L), 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 must—
(a) Negotiate an advance agreement on the treatment of developmental assistance costs for either credit or reimbursement 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
(c) Modify (without consideration) applicable contract(s) to incorporate other than customary progress payments for protege firms in accordance with FAR 32.504(c) if a mentor firm provides such payments 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 if—
(1) A DoD program manager has made funds available for that purpose; and
(2) The contractor has an approved mentor-protege agreement.
(e) Negotiate and award a separate contract for reimbursement of developmental assistance costs only if—
(1) A DoD program manager has made funds available for that purpose;
(2) The contractor has an approved mentor-protege agreement; and
(3) The Director, SADBU, OUSD (AT&L), has made a determination in accordance with 219.7102(d)(1)(ii).
(f) Not authorize reimbursement for costs of assistance furnished to a protege firm in excess of $1,000,000 in a fiscal year unless a written determination from the Director, SADBU, OUSD (AT&L), is obtained.
(g) Advise contractors of reporting requirements in Appendix I.
(h) Provide a copy of the approved Mentor-Protege agreement to the Defense Contract Management Agency administrative contracting officer responsible for conducting the annual performance review (see appendix I, section I-112).
(a) Developmental assistance provided under an approved mentor-protege agreement is distinct from, and must not duplicate, any effort that is the normal and expected product of the award and administration of the mentor firm's subcontracts. The mentor firm must accumulate and charge costs associated with the latter in accordance with its approved accounting practices. Mentor firm costs that are eligible for reimbursement are set forth in appendix I.
(b) Before incurring any costs under the Program, mentor firms must 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, the mentor firm must incur the costs before October 1, 2005.
(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, 2005, that are eligible for crediting under the Program, may be credited toward subcontracting plan goals as set forth in appendix I.
Mentor and protege firms must report on the progress made under mentor-protege agreements as indicated in appendix I, section I-111.
The Defense Contract Management Agency will conduct annual performance reviews of all mentor-protege agreements as indicated in appendix I, section I-112. The determinations made in these reviews should be a major factor in determinations of amounts of reimbursement, if any, that the mentor firm is eligible to receive in the remaining years of the Program participation term under the agreement.
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-AT&L(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
(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 from the labor advisor, may seek the concurrence of the parties to the dispute to permit movement of the material by military vehicles with military personnel. On receipt of such concurrences, the commander may proceed to make necessary arrangements to move the material.
(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
(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 time the solicitation is prepared in those cases where requirements can be identified. Otherwise, the determination shall be made at the time the service call or order is placed against the contract. The service call or order shall identify the labor standards law and contract wage determination which will apply to the work required.
(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—
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(B) Call attention to the labor standards requirements in the contract which relate to—
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(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)
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(B)
(C)
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(D)
(E)
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(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—
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(G) Exhibits indexed and appropriately tabbed, including copies of the following, when applicable—
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(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—
(
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(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—
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(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—
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(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—
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(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.
(b) Submit all applications for such exemptions through contracting channels to the labor advisor.
(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.
(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).
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 8071 of the Fiscal Year 2000 Defense Appropriations Act, Public Law 106-79, 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 part within a noncontiguous State; and
(2) When the unemployment rate in the noncontiguous State is in excess of the national average rate of unemployment as determined by the Secretary of Labor.
“Noncontiguous State,” as used in this subpart, means Alaska, Hawaii, Puerto Rico, the Northern Mariana Islands, American Samoa, Guam, the U.S. Virgin Islands, Baker Island, Howland Island, Jarvis Island, Johnston Atoll, Kingman Reef, Midway Islands, Navassa Island, Palmyra Atoll, and Wake Island.
A contractor awarded a contract subject to this subpart must employ, for the purpose of performing that portion of the contract work within the noncontiguous State, individuals who are residents of that noncontiguous State and who, in the case of any craft or trade, possess or would be able to acquire promptly the necessary skills to perform this contract.
The head of the agency may waive the requirements of 222.7002 on a case-
Use the clause at 252.222-7000, Restrictions on Employment of Personnel, in all solicitations and contracts subject to this subpart. Insert the name of the appropriate noncontiguous State in paragraph (a) of the clause.
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.
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
(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.
(d) Departments and agencies must centrally collect information submitted in accordance with the clause at FAR 52.223-9 for reporting to the Office of the Deputy Under Secretary of Defense (Environmental Security).
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 Instruction 4715.6, Environmental Compliance, 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 Instruction 4715.6 applies, may
(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. However, if subcontracts issued under such a contract will meet the criteria of paragraph (a) of this section, the requirements of DoD 5100.76-M shall apply.
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
(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.
To apply the policies and procedures of this part, analyze and evaluate offers of foreign end products generally as follows:
(1)
(i) Determine whether the product is restricted by—
(A) Defense authorization or appropriations acts (see subpart 225.70); or
(B) DoD policy (see subpart 225.71 and FAR 6.302-3).
(ii) 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.
(2)
(i) Determine whether the offered product is the product of one of the countries (qualifying country), listed in 225.872-1.
(ii) If the product is the product of a qualifying country, evaluate the offer under subpart 225.5 and 225.872-4.
(3)
(i) Determine whether the product is covered by the Trade Agreements Act or the North American Free Trade Agreement Implementation Act (see subpart 225.4).
(ii) If the product is an eligible product under subpart 225.4,evaluate the offer under subpart 225.5.
(iii) 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 25.403(c) and 225.403(c).
(4)
(i) Determine whether the contractor is controlled by a terrorist nation.
(ii) If the contractor is controlled by a terrorist nation, comply with 209.104-1(g).
(5)
As used in this part—
(1) “Caribbean Basin country end product” includes petroleum or any product derived from petroleum.
(2) “Defense equipment” means any equipment, item of supply, component, or end product purchased by the DoD.
(3) “Domestic concern” means—
(i) A concern incorporated in the United States (including a subsidiary that is incorporated in the United States, even if the parent corporation is a foreign concern); or
(ii) An unincorporated concern having its principal place of business in the United States.
(4) “Domestic end product” has the meaning given in the clauses at 252.225-7001, Buy American Act and Balance of Payments Program; 252.225-7007, Buy American Act—Trade Agreements—Balance of Payments Program; and 252.225-7036, Buy American Act—North American Free Trade Agreement Implementation Act—Balance of Payments Program, instead of the meaning in FAR 25.003.
(5) “Eligible product” means, instead of the definition at FAR 25.003, a designated, NAFTA, or Caribbean Basin country end product in the categories listed in 225.401-70.
(6) “Foreign concern” means any concern other than a domestic concern.
(7) “Nondesignated country end product” means any end product which is not a U.S. made end product or a designated country end product.
(8) “Nonqualifying country” means a country other than the United States or a qualifying country.
(9) “Nonqualifying country end product” means an end product which is neither a domestic nor qualifying country end product.
(10) “Nonqualifying country offer” means an offer of a nonqualifying country end products, including the price of transportation to destination.
(11) “Qualifying country’ is a term used to describe certain countries with memoranda of understanding or international agreements with the United States. These countries are listed in 225.872-1.
(12) “Qualifying country component” and “qualifying country end product” are defined in the clauses at 252.225-7001, Buy American Act and Balance of Payments Program; 252.225-7007. Buy Americn Act—Trade Agreements—Balance of Payments Program; and 252.225-7036, Buy American Act—North American Free Trade Agreement Implementation Act—Balance of Payments Program. “Qualifying country end product” is also defined in the clause at 252.225-7021, Trade Agreements.
(13) “Qualifying country offer” means an offer of a qualifying country end product, including the price of transportation to destination.
(14) “Source” when restricted by such words as foreign, domestic, qualifying country, etc., refers to the actual manufacturer or producer of the end product or component.
(a)(1)(A) Specific public interest exceptions for DoD for certain countries are in 225.872.
(B) The Under Secretary of Defense (Acquisition, Technology, and Logistics) 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.
(ii)(A) Normally, use the evaluation procedures in subpart 225.5, 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—
(B) A determination whether to grant a public interest exception shall be
(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 25.103(b)(3), 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 officer 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 225.104(a)(iii) or FAR 25.104(a);
(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 Director, Pharmaceuticals Group, Directorate of Medical Materiel, determines that only the requested foreign drug will fulfill the requirements.
(iv) Under coordinated acquisition (see Subpart 208.70), the determination is the responsibility of the requiring department when the requiring department specifies acquisition of a foreign end product.
(c) The cost of a domestic end product is unreasonable if it is not the low evaluated offer when evaluated under Subpart 225.5.
(a)(i) DoD has determined that the articles, materials, and supplies listed in FAR 25.104(a) and in paragraph (a)(iii) 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 Subpart 25.2.)
(ii) Scrap is domestic in origin if generated in, collected in, and prepared for processing in the United States.
(iii)(A) Aluminum clad steel wire.
(B) Sperm oil.
Contracting activities must apply the evaluation procedures in subpart 225.5 when using Federal supply schedules.
(a) For oral solicitations, inform prospective vendors that only domestic and qualifying country end products are acceptable, except nonqualifying country end products are acceptable if—
(1) The items are excepted either on a blanket or an individual basis; or
(2) The price of the nonqualifying country end product is the low offer under the evaluation procedures in subpart 225.5.
(b) When only domestic end products are acceptable, the solicitation must make a statement to that effect.
(a)(2) A nonavailability determination is not required for construction materials listed in FAR 25.104(a) or in 225.104(a)(iii). For other materials, a nonavailability determination must be approved at the levels specified in 225.103(b)(ii). Use the estimated value of the construction materials to determine the approval level.
(c)(4) Prepare any report of noncompliance in accordance with the procedures at 209.406-3 or 209.407-3.
(b)(i) 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 (AT&L) DP).
(ii) The following national security/national defense exceptions do not require approval by USD (AT&L) DP:
(A) Where purchase from foreign sources is restricted by the DoD annual appropriations or authorization acts (see subpart 225.70) or by the establishment of required sources of supplies and services under FAR part 8.
(B) Where competition from foreign sources is restricted under the authority of FAR 6.302-3(a)(2)(i). Provide USD (AT&L) DP a copy of the justification for restricting competition (see FAR 6.303-1(d)).
(C) Where competition from foreign sources is restricted under subpart 225.71.
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 25.003 excludes those end products that are not eligible for duty-free treatment under 19 U.S.C. 2703(b). However, 225.003 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 that are eligible for designated and NAFTA countries, but are not presently eligible for Caribbean Basin countries.
(1) To estimate the value of the acquisition, use the total estimated value of end products subject to trade agreement acts (see 225.401-70).
(2) See subpart 225.5 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.
(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.
(a)(4) The requirements of FAR 25.408(a)(4) do not apply to offshore acquisitions or to Defense Energy Support Center post, camp, or station overseas requirements.
Use the following procedures instead of those in FAR 25.502. 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 225.504(4)).
(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 225.504 (1)).
(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 52.225-8, 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 225.504(1)(ii)).
(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) If duty is to be exempted through inclusion of the clause at FAR 52.225-8, 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 225.504(2)(ii) and (3)(ii)). 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 225.504(2)(i) and (3)(i)).
(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 production” 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 225.504(4)).
(1) Example 1.
(i) Alternate I: Duty Not Exempted for Nonqualifying Country Offers:
(ii) Alternate II: Duty Exempted:
(2) Example 2.
(i) Alternate I: Duty Not Exempted for Nonqualifying Country Offers:
(ii) Alternate II: Duty Exempted:
(3) Example 3.
(i) Alternate I: Duty Not Exempted for Nonqualifying Country Offers:
(ii) Alternate II: Duty Exempted:
(4) Example 4.
(i) Alternate I:
(ii) Alternate II:
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)
In accordance with 10 U.S.C. 2410i, do not enter into a prime contract with a foreign person, company, or entity unless it has certified that it does not comply with the secondary Arab boycott of Israel.
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, Office of the Under Secretary of Defense (Acquisition, Technology, and Logistics).
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), as amended by Section 144 of Title I, Division C, of the Omnibus Consolidated and Emergency Supplemental Appropriations Act, 1999 (Pub. L. 105-277).
If using fiscal year 1999 funds made available by Title III (Procurement) or Title IV (Research, Development, Test and Evaluation) of Pub. L. 105-262, do not award or renew a contract with any company in which the Director of Defense Procurement has determined that the People's Republic of China or the People's Liberation Army of the People's Republic of China owns more than 50 percent interest.
(a) Forward any information that the People's Republic of China or the People's Liberation Army of the People's Republic of China owns more than 50 percent interest in a company, through the head of the agency, to the Director, Defense Procurement, ATTN: OUSD (AT&L) DP/FC, 3060 Defense Pentagon, Washington, DC 20301-3060.
(b) Upon verification of the information, the Director of Defense Procurement will ask the General Services Administration to list the company as ineligible on the List of Parties Excluded from Federal Procurement and Nonprocurement Programs.
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 fiscal year 1999 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) 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 Canadian Government has waived notice of any change or modification which may be made, from time to time, in these commitments, obligations, or covenants.
(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 management office of the Defense Contract
(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
(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
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 the Director of Defense Procurement, Office of the Under Secretary of Defense (Acquisition, Technology, and Logistics), 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 the acquisition of defense equipment which is mined, produced, or manufactured in any of the following countries (referred to in this part as “qualifying countries”)—
(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 Under 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, and Logistics), 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 225.304 and 225.502.
(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
(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 ______ have agreed to remove barriers to procurement at the prime and subcontract level for defense equipment produced in each other's countries insofar as laws and regulations permit.
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) 697-9351/2/3, DSN 227-9351/2/3).
(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 Section 2B of the Federal Directory of Contract Administration Services Components. Send the request for audit from the UK directly to their Ministry of Defence.
(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 SECNAV Instruction 5510.1H; for the Air Force by AFI 31-601; for the Defense Information Systems Agency by DCA Instruction 240-110-8; and for the National Imagery and Mapping Agency by NIMA Instruction 5220.22).
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
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.
(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 25.903(b)).
(3) Unless the supplies are entitled to duty-free treatment under a special category in the Harmonized Tariff Schedule of the United States (
(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 Agreement 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.
(1)
(i)
(A) Unless duty was paid prior to submission of the offer, an offer of domestic end products with no nonqualifying country components, an offer of qualifying country end products, or an offer of eligible products under the Trade Agreements Act or NAFTA, should not include duty.
(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 225.502.
(ii)
(iii)
(A) Issue duty-free entry certificates for all qualifying country supplies in accordance with the policy at 225.901(3)(i) and the clause at 252.225-7009, Duty-Free Entry—Qualifying Country Supplies (End Products and Components); for all eligible products subject to trade agreements in accordance with the policy at 225.901(3)(ii) and
(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 component or a qualifying country component.
(2)
(i) The administrative contracting officer must—
(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, DCM New York, ATTN: Customs Team, DCMDE-GNIC, 207 New
Prime Contractor Name and Address:
Prime Contractor CAGE Code:
Prime Contract Number plus Delivery Order Number, if applicable:
Total Dollar Value of the Prime Contract or Delivery Order:
Expiration Date of the Prime Contract or Delivery Order:
Foreign Supplier Name and Address:
Number of Subcontract/Purchase Order for Foreign Supplies:
Total Dollar Value of the Subcontract for Foreign Supplies:
Expiration Date of the Subcontract for Foreign Supplies:
CAO Activity Address Number:
ACO Name and Telephone Number:
ACO Code:
Signature:
Title:
(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 DCM 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, DCMDE-GNIC, DCM New York. Upon receipt of import documentation for incoming shipments from the contractor, its agent, or the U.S. Customs Service, DCM 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.
(3)
(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:
See 201.403(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.
(1) Use the provision at 252.225-7000, Buy American Act—Balance of Payments Program Certificate, instead of the provision at FAR 52.225-2, Buy American Act Certificate. Use the provision in any solicitation that includes the clause at 252.225-7001, Buy American Act and Balance of Payments Program.
(2) Use the clause at 252.225-7001, Buy American Act and Balance of Payments Program, instead of the clause at FAR 52.225-1, Buy American Act—Supplies, 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 subpart 225.70);
(B) End products restricted to domestic or domestic and Canadian sources (see subpart 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 restriction in paragraph (2)(ii)(A) or (B) of this section.
(3) Use the clause at 252.225-7002, Qualifying Country Sources as Subcontractors, in solicitations and contracts that include one of the following clauses:
(i) 252.225-7001, Buy American Act and Balance of Payments Program.
(ii) 252.225-7007, Buy American Act—Trade Agreements—Balance of Payments Program.
(iii) 252.225-7021, Trade Agreements.
(iv) 252.225-7036, Buy American Act—North American Free Trade Agreement Implementation Act—Balance of Payment Program.
(4) Use the provision at 252.225-7003, Information for Duty-Free Entry Evaluation, in solicitations that include the clause at FAR 52.225-8, Duty-Free Entry. Use the provision with its Alternate I when the clause at 252.225-7021, Trade Agreements, is used.
(5) Use the provision at 252.225-7006, Buy American Act—Trade Agreements—Balance of Payments Program Certificate, instead of the provision at FAR 52.225-6, Trade Agreements Certificate, in all solicitations that include the clause at 252.225-7007, Buy American Act—Trade Agreements—Balance of Payments Program.
(6) Except as provided in paragraph (11) of this section, use the clause at 252.225-7007, Buy American Act—Trade Agreements—Balance of Payments Program, instead of the clause at FAR 52.225-5, Trade Agreements. The clause need not be used where purchase from foreign sources is restricted (see 225.401(b)(ii)). The clause may be used where the contracting officer anticipates a waiver of the restriction.
(7) 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 52.225-8, Duty-Free Entry.
(8) 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 supplies for exclusive use outside the United States.
(9) Use the clause at 252.225-7010, Duty-Free Entry—Additional Provisions, in solicitations and contracts that include the clause at FAR 52.225-8, Duty-Free Entry.
(10) Use the provision at 252.225-7020, Trade Agreements Certificate, in all solicitations that include the clause at 252.225-7021, Trade Agreements.
(11) Use the clause at 252.225-7021, Trade Agreements, instead of the
(12) Use the provision at 252.225-7035, Buy American Act—North American Free Trade Agreement Implementation Act—Balance of Payments Program Certificate, instead of the provision at FAR 52.225-4, Buy American Act—North American Free Trade Agreement—Israeli Trade Act 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.
(i) Use the basic provision when the basic clause at 252.225-7036 is used.
(ii) Use the provision with its Alternate I when the clause at 252.225-7036 is used with its Alternate I.
(13) 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 52.225-3, Buy American Act—North American Free Trade Agreement—Israeli Trade Act. The clause need not be used where purchase from foreign sources is restricted (see 225.401 (b)(ii)). The clause may be used where the contracting officer anticipates a waiver of the restriction.
(i)(A) Use the clause in all solicitations and contracts for the items listed at 225.401-70, when the estimated value is $56,190 or more and the Trade Agreements Act does not apply. Include the clause in solicitations for multiple line items if any line item is subject to NAFTA.
(B) Use the clause with its Alternate I when the estimated value is between $25,000 and $56,190.
(ii) Application of the procedures in 225.402 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.
(14) 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.
(1) Unless the contracting officer knows that the prospective contractor is not a domestic concern, use the clause at 252.225-7005, Identification of Expenditures in the United States, in solicitations and contracts that—
(i) Exceed the simplified acquisition threshold; and
(ii) Are for the acquisition of—
(A) Supplies for use outside the United States;
(B) Construction to be performed outside the United States; or
(C) Services to be performed primarily outside the United States.
(2) 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.
(3) 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)
The following restrictions implement 10 U.S.C. 2533a. Except as provided in subsection 225.7002-2, do not acquire—
(a) Any of the following items, either as end products or components, unless the items have been grown, reprocessed, reused, or produced in the United States:
(1) Food.
(2) Clothing.
(3) Tents, tarpaulins, or covers.
(4) Cotton and other natural fiber products.
(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.
(9) Wool (whether in the form of fiber or yarn or contained in fabrics, materials, or manufactured articles).
(10) Any item of individual equipment (Federal Supply Class 8465) manufactured from or containing any of the fibers, yarns, fabrics, or materials listed in this paragraph (a).
(b) Specialty metals, including stainless steel flatware, unless the metals were melted in steel manufacturing facilities located within the United States.
(c) Hand or measuring tools, unless the tools were produced in the United States.
Acquisitions in the following categories are not subject to the restrictions in 225.7002-1:
(a) Acquisitions at or below the simplified acquisition threshold.
(b) Acquisitions of any of the items in 225.7002-1(a) or (b), if the Secretary concerned determines that items grown, reprocessed, reused, or produced in the United States cannot be acquired as and when needed in a satisfactory quality and sufficient quantity at U.S. market prices.
(c) Acquisitions of items listed in FAR 25.104(a), unless the items are hand or measuring tools.
(d) Acquisitions outside the United States in support of combat operations.
(e) Acquisitions of perishable foods by activities located outside the United States for personnel of those activities.
(f) Emergency acquisitions by activities located outside the United States for personnel of those activities.
(g) Acquisitions by vessels in foreign waters.
(h) Acquisitions of items specifically for commissary resale.
(i) Acquisitions of end products incidentally incorporating cotton, other natural fibers, or wool, for which the estimated value of the cotton, other natural fibers, or wool—
(1) Is not more than 10 percent of the total price of the end product; and
(2) Does not exceed the simplified acquisition threshold.
(j) Acquisitions of foods manufactured or processed in the United States, regardless of where the foods (and any component if applicable) were grown or produced.
(k) Purchases of specialty metals by subcontractors at any tier for programs other than—
(1) Aircraft;
(2) Missile and space systems;
(3) Ships;
(4) Tank-automotive;
(5) Weapons; and
(6) Ammunition.
(l) Acquisitions of specialty metals and chemical warfare protective clothing when the acquisition furthers an agreement with a qualifying country (see 225.872).
(m) Acquisitions 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 product 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, Technology, and Logistics) makes a determination in accordance with Section 807 of Public Law 105-261 that—
(A) Procuring articles that contain only para-aramid fibers and yarns manufactured from suppliers within the United States 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 firms for the sale of para-aramid fibers and yarns in that country.
Unless an exception applies—
(a) Use the clause at 252.225-7012, Preference for Certain Domestic Commodities, in solicitations and contracts exceeding the simplified acquisition threshold.
(b)(1) Use the clause at 252.225-7014, Preference for Domestic Specialty Metals, in solicitations and contracts exceeding the simplified acquisition threshold that require delivery of an article containing specialty metals.
(2) Use the clause with its Alternate I in solicitations and contracts exceeding the simplified acquisition threshold requiring delivery, for one of the following major programs, of an article containing specialty metals:
(i) Aircraft.
(ii) Missile and space systems.
(iii) Ships.
(iv) Tank-automotive.
(v) Weapons.
(vi) 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 in the United States territories and possessions in the Pacific and on Kwajalein Atoll, or in countries bordering the Arabian Gulf, see 236.274(a).
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, Technology, and Logistics), 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, Technology, and Logistics) 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
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,
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, and Logistics) 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 2005, 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 in subsequent Defense appropriations acts, do not use fiscal year 1996 or subsequently appropriated funds to acquire ball and roller bearings other than those produced by a domestic source and of domestic origin, i.e.,
(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 or subcontracts for acquisition of commercial items, except for commercial ball and roller bearings acquired as end items.
(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, Technology, and Logistics), 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, Technology, and Logistics) 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.
(a) Use the clause at 252.225-7016, Restriction on Acquisition of Ball and Roller Bearings, in solicitations and contracts, unless—
(1) The restrictions in 225.7019-1 do not apply or a waiver has been granted; or
(2) The contracting officer knows that the items being acquired do not contain ball or roller bearings.
(b) In solicitations and contracts that use simplified acquisition procedures, use the clause with its Alternate I.
In accordance with Section 8064 of the National Defense Appropriations Act for Fiscal Year 2001 (Public Law 106-259), do not use fiscal year 2000 or 2001 funds to acquire vessel propellers other than those produced by a domestic source of domestic origin,
(a) Manufactured in the United States or Canada; and
(b) For which all component castings were poured and finished in the United States or Canada.
This restriction does not apply to contracts or subcontracts for acquisition of commercial items.
The Secretary of the department responsible for acquisition may waive this restriction on a case-by-case basis, by certifying to the House and Senate Committees on Appropriations that—
(a) Adequate domestic 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.
Use the clause at 252.225-7023, Restriction on Acquisition of Vessel Propellers, in solicitations and contracts that use fiscal year 2000 or 2001 funds for the acquisition of vessels or vessel propellers, unless—
(a) An exception under 225.7020-2 is known to apply or a waiver has been granted in accordance with 225.7020-3; or
(b) The vessels being acquired do not contain vessel propellers.
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 and Senate Committees on Appropriations 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.
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
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.
DoD has imposed restrictions on the acquisitions of PAN carbon fiber from foreign sources. DoD is phasing out the restrictions over the 5-year period ending May 31, 2005. Contractors with contracts that contain the clause at 252.225-7022 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 solicitations and contracts for major systems as follows:
(a) In solicitations and contracts issued on or before May 31, 2003, if—
(1) The system is not yet in production (milestone III as defined in DoD 5000.2-R, Mandatory Procedures for Major Defense Acquisition Programs (MDAPS) and Major Automated Information System (MAIS) Acquisition Programs); or
(2) The clause was used in prior program contracts.
(b) In solicitations and contracts issued during the period beginning June 1, 2003, and ending May 31, 2005, if the system is not yet in engineering and manufacturing development (milestone II as defined in DoD 5000.2-R).
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(AT&L)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 requirement” on the face of the contract along with the FMS customer and the case identifier code.
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 investigations, weapon system problems, operations/tactics enhancement, and related travel to foreign countries.
(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
(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 the foreign customer before contract award.
(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
(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
(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.
This subpart provides policies and procedures implementing the Balance of Payments Program. It applies to contracts for the acquisition of—
(a) Supplies for use outside the United States; and
(b) Construction to be performed outside the United States.
Acquire only domestic end products for use outside the United States, and use only domestic construction material for construction to be performed outside the United States, including end products and construction material for foreign military sales, unless—
(a) Before issuing the solicitation—
(1) The estimated cost of the acquisition or the value of a particular construction material is at or below the simplified acquisition threshold;
(2) The end product or particular construction material is—
(i) Listed in FAR 25.104 or 225.104(a)(iii);
(ii) A petroleum product;
(iii) A spare part for foreign-manufactured vehicles, equipment, machinery, or systems, provided 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);
(iv) An industrial gas; or
(v) A brand drug specified by the Defense Medical Materiel Board;
(3) The acquisition of foreign end products or construction material is required by a treaty or executive agreement between governments;
(4) The end product is acquired for commissary resale; or
(5) The contracting officer determines that a requirement can best be filled by a foreign end product or construction material, including determinations that—
(i) A subsistence product is perishable and delivery from the United States would significantly impair the quality at the point of consumption;
(ii) An end product or construction material, by its nature or as a practical matter, can best be acquired in the geographic area concerned, e.g., ice or books; or bulk material, such as sand, gravel, or other soil material, stone, concrete masonry units, or fired brick;
(iii) A particular domestic construction material is not available;
(iv) The cost of domestic construction material would exceed the cost of foreign construction material by more than 50 percent, calculated on the basis of—
(A) A particular construction material; or
(B) The comparative cost of application of the Balance of Payments Program to the total acquisition; or
(v) Use of a particular domestic construction material is impracticable;
(b) After receipt of offers—
(1) The evaluated low offer (see subpart 225.5) is an offer of an end product that—
(i) Is a qualifying country end product;
(ii) Is an eligible product subject to the Trade Agreements Act or NAFTA;
(iii) For acquisitions subject to the Trade Agreements Act, is an information technology product in Federal
(iv) Is a nonqualifying country end product, but application of the Balance of Payments Program evaluation factor would not result in award on a domestic offer; or
(2) The construction material is designated country construction material or NAFTA country construction material, and the acquisition is subject to the Trade Agreements Act or NAFTA respectively; or
(c) At any time during the acquisition process, the head of the agency determines that it is not in the public interest to apply the restrictions of the Balance of Payments Program to the end product or construction material.
(a)
(b)
(i) Duty may not be applicable to nonqualifying country offers.
(ii) The U.S. Government cannot guarantee the exemption of duty for components or end products imported into foreign countries.
(iii) Foreign governments may impose duties. Evaluate offers including such duties as offered.
(2)
(c)
Unless the entire acquisition is exempt from the Balance of Payments Program—
(a) Use the clause at 252.225-7044, Balance of Payments Program—Construction Material, in solicitations and contracts for construction to be performed outside the United States with a value greater than the simplified acquisition threshold but less than $6,481,000.
(b) Use the clause at 252.225-7045, Balance of Payments Program—Construction Material Under Trade Agreements, in solicitations and contracts for construction to be performed outside the United States with a value of $6,481,000 or more. For acquisitions with a value of $6,481,000 or more, but less than $7,304,733, use the clause with its Alternate I.
41 U.S.C. 421 and 48 CFR chapter 1.
(f) The contracting officer must submit a request for funding of the Indian incentive to the Office of Small and Disadvantaged Business Utilization, Office of the Under Secretary of Defense (Acquisition, Technology, and Logistics) (OUSD (AT&L) SADBU, 1777 North Kent Street, Suite 9100, Arlington, VA 22209. Upon receipt of funding from OUSD (AT&L) SADBU, the contracting officer must issue a contract modification to add the Indian incentive funding for payment of the contractor's request for adjustment as described at FAR 52.226-1, Utilization of Indian Organizations and Indian-Owned Economic Enterprises.
Use the clause at 252.226-7001, Utilization of Indian Organizations and Indian-Owned Economic Enterprises-DoD Contracts, in solicitations and contracts that—
(1) Do not use FAR part 12 procedures; and
(2) Are for supplies or services expected to exceed the simplified acquisition threshold.
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 2003 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 2003, 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 at least one eligible 8(a) contractor is located in the vicinity.
(2) Set aside the acquisition for small business only if at least 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, ________ (Insert Name) ________, an authorized representative of the ________ (Insert Company Name) ________, (which is hereinafter referred to as the “Recipient”) requests the Government to provide the Recipient with technical data or computer software (hereinafter referred to as “Data”) in which the Government's use, modification, reproduction, release, performance, display or disclosure rights are restricted. Those Data are identified in an attachment to this Agreement. In consideration for receiving such Data, the Recipient agrees to use the Data strictly in accordance with this Agreement:
(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 ________ (insert
(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 ____ (Insert Date) ____. The obligations imposed by this Agreement shall survive the expiration or termination of the Agreement.
(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
(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
(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
(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
(3) Do not accept technical data that do not conform to the contractual requirements in all respects. Except for nonconforming restrictive markings (see paragraph (b)(4) of this subsection), correction or replacement of nonconforming data or an equitable reduction in contract price when correction or replacement of the nonconforming data is not practicable or is not in the Government's interests, shall be accomplished in accordance with—
(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
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
(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
(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 books, magazines or periodicals, or prepare derivative works.
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 does not want duplicated, the Government may acquire exclusive control of the data pertaining to the design by including the clause at 252.227-7023, Drawings and Other Data to Become Property of Government, in solicitations and contracts.
(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 which restrictions, other than copyright, on use, modification, reproduction, release, performance, display, or disclosure are asserted and to attach the identification and assertion to the offer.
(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 the Government, under a Government contract or subcontract with—
(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
(c)
(2) Contractors are not required to provide the Government additional rights in computer software delivered or otherwise provided to the Government with restricted rights. When the Government has a need for additional rights, the Government must negotiate with the contractor to determine if there are acceptable terms for transferring such rights. List or describe all software in which the contractor has granted the Government additional rights in a license agreement made part of the contract (see paragraph (d) of this subsection). The license shall enumerate the specific additional rights granted to the Government.
(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
(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
(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
(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 software or computer software documentation as are provided to prime contractors.
(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
(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 disclose all computer software or computer software documentation to be delivered under the contract. Do not use the clause in contracts for 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 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,
(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 individuals to whom the information relates; or investigative reports.
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
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
(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 be located during and for contract performance. These locations may include contract premises which are owned, leased, or premises where the contractor is a permittee or licensee or has a right to use, including Government airfields.
(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,
(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 taxes on purchases made for common defense purposes are maintained by the United States European Command (USEUCOM). For further information contact 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.
(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
(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 documents required for port-of-entry and customs clearance can be obtained by contacting HQ 16AF/LGTT. This information will be passed to the Secretaria General Tecnica del Ministerio de Hacienda (Technical General Secretariat of the Ministry of Finance). A list of customs agents may be obtained from the 600 ABG, APO AE 90646.
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)(1)(A) The military departments—
(B) DoD contracting activities that are not within a military department must submit CAS waiver requests that meet the conditions in FAR 30.201-5(b) to the Director of Defense Procurement for approval at least 30 days before the anticipated contract award date.
(2) The military departments must not delegate CAS waiver authority below the individual responsible for issuing contracting policy for the department.
(e)(i) by November 15th of each year, the military departments must provide a report of all waivers granted under FAR 30.201-5(a) during the previous fiscal year to the Director of Defense Procurement.
(ii) The Director of Defense Procurement will submit a consolidated DoD report to the CAS Board.
(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
(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
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, and Logistics) 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, and Logistics) or the Principal Deputy—
(C) After November 18, 1997, the Under Secretary of Defense (Acquisition, Technology, and Logistics) 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 detailed cost proposals for individual restructuring projects before August 15, 1994.
(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
(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, and Logistics), ATTN: OUSD (AT&L) 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, and Logistics), 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, Technology, and Logistics), through the Director of Defense Procurement, annual reports (Report Control Symbol DD-AT&L(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, Technology, and Logistics) (OUSD(AT&L)DP) is responsible for ensuring uniform administration of DoD contract financing, including DoD contract financing policies and important related procedures. Agency discretion under FAR Part 32 is at the DoD level and is not delegated to the departments and agencies. Proposals by the departments and agencies, to exercise agency discretion, shall be submitted to OUSD(AT&L)DP through the DoD Contract Finance Committee (see 232.071).
(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(AT&L)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
(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(AT&L)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(AT&L)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(AT&L)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) The customary progress payment rates for DoD contracts, including contracts that contain foreign military
(a) Unusual progress payment arrangmeents require the advance approval of the Director of Defense Procurment, Office of the Under Secretary of Defense (Acquisition, Technology, and Logistics) (OUSD(AT&L)DP). Contracting officers must 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 OUSD(AT&L)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 must 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) Use the clause at 252.232-7002, Progress Payments for Foreign Military Sales Acquisitions, in solicitations and contracts that—
(i) Contain FMS requirements; and
(ii) Provide for progress payments.
(b) Use the clause at 252.232-7004, DoD Progress Payment Rates, instead of Alternate I of the clause at FAR 52.232-16, if the contractor is a small business or small disadvantaged business concern.
(b)
(g)
(i) Except as provided in paragraph (g)(ii) of this subsection, the contracting officer must 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 supplementary analysis as an attachment to the progress payment request when the contracting officer determines that the contractor's methods of estimating the “Costs to Complete” are reliable, accurate, and not susceptible to improper influences.
(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
(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 Director of Defense Procurement, Office of the Under Secretary of Defense (Acquisition, Technology, and Logistics) (OUSD(AT&L)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 clause at 252.232-7007, Limitation of Government's Obligation, the contracting officer shall promptly provide written notice to the contractor that the Government is—
(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 (Acquisition, Technology, and Logistics) 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 the notice of assignment. The disbursing officer shall acknowledge and return to the assignee the copy of the notice and shall file the true copy of the instrument and original notice.
(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 date, if any, specified in the contract, or 14 days after receipt by the designated billing office of a proper request for payment, whichever is later.
(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.
The Governmentwide commercial purchase card is the mandatory EFT payment method for purchases valued at or below the micropurchase threshold, except as provided in 213.270.
Use the clause at 252.232-7009, Mandatory Payment by Governmentwide Commercial Purchase Card, in solicitations, contracts, and agreements when—
(1) Placement of orders or calls valued at or below the micropurchase threshold is anticipated; and
(2) Payment by Governmentwide commercial purchase card is required for orders or calls valued at or below the micropurchase threshold under the contract or agreement.
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.
“Research and development” means those efforts described by the Research, Development, Test, and Evaluation (RDT&E) budget activity definitions found in the DoD Financial Management Regulation (DoD 7000.14-R), Volume 2B, Chapter 5.
(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 (AT&L) approval of the Government's prenegotiation position before negotiations begin, and obtain USD (AT&L) 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 (AT&L) 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.
In accordance with 10 U.S.C. 2525(d), for acquisitions under the Manufacturing Technology Program—
(a) Award all contracts using competitive procedures; and
(b) Include in all solicitations an evaluation factor that addresses the extent to which offerors propose to share in the cost of the project (see FAR 15.304).
(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 board of directors or trustees simultaneously serves on the board of directors or trustees of a profit-making company under contract to DoD, unless the FFRDC has a DoD-approved conflict of interest policy for its members (section 8107 of Pub. L. 102-172 and similar sections in subsequent Defense appropriations acts).
(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 development, using a standard solicitation and contract format and the capabilities of the World Wide Web.
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) A statement that the solicitation will be issued in the research and development streamlined solicitation format shown at the RDSS/C Web site.
(b)
(1) The solicitation, to be made available consistent with the requirements of FAR 5.102—
(i) Shall be in the format shown at the RDSS/C Web site;
(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.
(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 Portland District 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,
(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 211.503 for instructions on use of liquidated damages.
(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 that 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 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 contribution 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.
(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 and similar sections in subsequent military construction appropriations acts, 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) 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 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 cost limitations, and if a waiver has not been granted (FAR 36.205).
(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 North American Industry Classification System (NAICS) Industry Subsector 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 NAICS Industry Subsector 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 19.201(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 or Services (see 213.307).
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).
(c) Under Section 1010 of Public Law 107-56, this prohibition does not apply to any contract that'
(1) Is entered into during the period of time that United States armed forces are engaged in Operation Enduring Freedom or during the period 180 days thereafter;
(2) Is for the performance of security functions at any military installation or facility in the United States;
(3) Is awarded to a proximately located local or State government, or a combination of such governments, whether or not any such government is obligated to provide such services to the general public without compensation; and
(4) Prescribes standards for the training and other qualifications of local government law enforcement personnel who perform security functions under the contract in accordance with criteria established by the Secretary of the department concerned.
(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.
(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.
See 212.102 for the use of FAR part 12 procedures with performance-based contracting.
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. Use the basic provision with its Alternate I in all negotiated 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 ____ day of _____ 19__, is between the Government, represented by the Contracting Officer, and the Contractor, (name of institution), an educational institution located in ____ (city), ____ (state).
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 $_____. This estimate is for administrative purposes only and does not impose any obligation on the Government to request any services or make any payment.
8. Advance payments are authorized by 10 U.S.C. 2396(a)(3).
9. Submit invoices to: ______ (name and address of activity).
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 ____ copies of an invoice listing charges for each student separately. The Contractor shall submit invoices within ____ days after the start of the term and shall include—
(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 conditions for enrollment in the Contractor's institution, including tuition and fees to be charged. This includes “bulletin,” “announcement,” or any other similar word the Contractor may use.
(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. Award authority for these contracts is 10 U.S.C. 2304(a)(1) and 10 U.S.C. 2360.
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,
(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 and subcontractors shall normally provide all required telecommunications security equipment or devices as plant equipment in accordance with FAR part 45. In some cases, such as for communications security (COMSEC) equipment designated as controlled cryptographic item (CCI), contractors or subcontractors must also meet ownership eligibility conditions.
(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
(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 special construction charges unless the charges are approved by the contracting officer.
(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
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.
The contracting officer may enter into a utility service contract related to the conveyance of a utility system for a period not to exceed 50 years (10 U.S.C. 2688(c)(3)).
(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.
(b)(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 (b)(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.
(S-70)(i) 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.
(ii) Supply and Services Canada (SSC) is permitted to submit its requests for contract administration services directly to the cognizant contract administration office.
(iii) 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 Headquarters, Defense Contract Management Agency, International and Federal Business Team. 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 paragraph (b) of this section;
(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 (Air Mobility 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 Agency (DCMA) shall, upon request of the military department, and subject to prior agreement, perform contract administration services on a military installation.
(iii) DCMA shall provide preaward survey assistance for post, camp, and station work performed on a military installation. The contracting office and the DCMA 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.
(e)(1)(A) In special circumstances, a contract administration office may request support from a component not listed in the Federal Directory of Contract Administration Services Components (available via the Internet at http://home.dcma.mil/casbook/casbook.htm). An example is a situation 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 that includes foreign contract military sale (FMS) requirements, the contract administration office shall—
(
(
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
(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.
(9) For additional contract administration functions related to IR&D/B&P projects performed by major contractors, see 242.771-3(a).
(13)(A) Do not delegate the responsibility to make payments to the Defense Contract Management Agency (DCMA).
(B) For contracts assigned to DCMA for contract administration, designate as the payment office—
(
(
(
(C) For contracts not assigned to DCMA, select a payment office or offices under department/agency procedures. DoD personnel may use the DFAS Reference Tool, available via the Internet at http://referencetool.dfas.mil, to identify cognizant DFAS payment offices.
(19) Also negotiate and issue contract modifications reducing contract prices in connection with the provisions of paragraph (c) of the clause at FAR 52.225-8, 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) DCMA 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)
(2)(iii) 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 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, Office of the Under Secretary of Defense (Acquisition, Technology, and Logistics (OUSD (AT&L))) setting forth required statistical information relating to the DoD-wide IR&D/B&P program.
(d) The Director, Defense Research and Engineering (OUSD(AT&L)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) The cognizant contract administration office (CAO) must—
(i) Conduct a periodic risk assessment of each contractor to determine the degree of production surveillance needed for contracts awarded to that contractor. The risk assessment must consider information provided by the contractor and the contracting officer;
(ii) Develop a production surveillance plan based on the risk level determined during the risk assessment;
(iii) Modify the production surveillance plan to incorporate any special
(iv) Monitor contract progress and identify potential contract delinquencies in accordance with the production surveillance plan.
(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 4140.1-R, DoD Materiel Management Regulation; and
(ii) Ordinarily assign criticality designator C to unilateral purchase orders.
(2) Only the contracting officer shall change the assigned designator.
(a) See DoD 5000.2-R, Mandatory Procedures for Major Defense Acquisition Programs (MDAPs) and Major Automated Information System (MAIS) Acquisition Programs.
(b)(i) Within four working days after receipt of the contractor's report, the CAO must 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 must add comments and recommend a course of action.
(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 solicitation for other than major systems that require cost/schedule status reports.
The contracting officer responsible for processing and executing novation and change-of-name agreements shall ensure agreements are executed promptly.
(b)(2)(A) For contracts awarded by the Military Departments, provide notices to the following addressees instead of individual contracting or contract administration offices—
(2)(B) Lists for notices of a successor in interest should include the information at FAR 42.1204(e)(2).
(C) Lists for notices of a name change should include the information at FAR 42.1205(a)(3).
(D) On notices sent to the addressees in paragraph (b)(2)(A) of this section, include a consolidated list for all subordinate contracting offices of the addressee.
(f)(i) Before making any substantial alterations or additions to the novation agreement format at FAR 42.1204(i), coordinate with those addressees in paragraph (b)(2)(A) 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.
(g) Also, make distribution to—
(i) The addressees in paragraph (b)(2)(A) 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—
(h)(4) Additional distribution in-struc-tions—
(A) Send two copies to the address in paragraph (b)(2)(A) 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 (g)(ii) of this section. They will issue their own modifications.
(i) 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(i):
“(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 the acquisition/merger may be in the best interests of the Government. Restructuring costs that are allowable under Part 31 of the Federal Acquisition Regulation (FAR) or Part 231 of the Defense Federal Acquisition Regulation Supplement (DFARS) may be reimbursed under flexibily-priced novated contracts, provided the Transferee demonstrates that the restructuring will reduce overall costs to the Department of Defense (DoD) (and to the National Aeronautics and Space Administration (NASA), where there is a mix of DoD and NASA contracts), and the requirements included in DFARS 231.205-70 are met. Restructuring costs shall not be allowed on novated contracts unless there is an audit of the restructuring proposal; a determination by the contracting officer of overall reduced costs to DoD/NASA; and an Advance Agreement setting forth a cumulative cost ceiling for restructuring projects and the period to which such costs shall be assigned.”
(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, freight 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.
(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 DoD 4500.9-R, Defense Transportation Regulation, Part II, Chapter 210, for discrepancy procedures.
(a) 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.
(b) 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,
(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.
(a) This subpart provides policies, procedures, and standards for use in the evaluation of a contractor's material management and accounting system (MMAS).
(b) The policies, procedures, and standards in this subpart—
(1) Apply only when the contractor has contracts exceeding the simplified acquisition threshold that are not for the acquisition of commercial items and are either—
(i) Cost-reimbursement contracts; or
(ii) Fixed-price contracts with progress payments made on the basis of costs incurred by the contractor as work progresses under the contract; and
(2) Do not apply to small businesses, educational institutions, or nonprofit organizations.
DoD policy is for its contractors to have an MMAS that conforms to the standards in paragraph (e) of the clause at 252.242-7004, so that the system—
(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; and
(c) Maintains a consistent, equitable, and unbiased logic for costing of material transactions.
(a)
(1) A contractor has $40 million of qualifying sales to the Government during the contractor's preceding fiscal year; and
(2) The administrative contracting officer (ACO), with advice from the auditor, determines an MMAS review is needed based on a risk assessment of the contractor's past experience and current vulnerability.
(b)
(c)
(1) Conduct reviews as a team effort.
(i) the ACO—
(A) Appoints a team leader; and
(B) Ensures that the team includes appropriate functional specialists (
(ii) The team leader—
(A) Advises the ACO and the contractor of findings during the review and at the exit conference; and
(B) Makes every effort to resolve differences regarding questions of fact during the review.
(iii) The contract auditor—
(A) Participates as a member of the MMAS team or serves as the team leader (see paragraph (c)(1)(i) of this section); and
(B) Issues an audit report for incorporation into the MMAS report based on an analysis of the contractor's books, accounting records, and other related data.
(2) Tailor reviews to take full advantage of the day-to-day work done by both organizations.
(3) Prepare the MMAS report.
(d)
(1)
(i) The ACO must notify the contractor in a timely manner if there are no deficiencies.
(ii) If there are any deficiencies, the ACO must request the contractor to provide a written response within 30 days (or such other date as may be mutually agreed to by the ACO and the contractor) from the date of initial notification.
(iii) If the contractor agrees with the report, the contractor has 60 days (or such other date as may be mutually agreed to by the ACO and the contractor) to correct any identified deficiencies or submit a corrective action plan showing milestones and actions to eliminate the deficiencies.
(iv) If the contractor disagrees with the report, the contractor must provide rationale in the written response.
(2)
(i) The MMAS contains any deficiencies and, if so, any corrective action is needed;
(ii) The deficiencies are significant enough to result in the reduction of progress payments or disallowance of costs on vouchers; and
(iii) Proposed corrective actions (if the contractor submitted them) are adequate to correct the deficiencies.
(3)
(A) Any deficiencies and the necessary corrective action;
(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 progress payments or disallow costs on vouchers.
(ii) The Government does not approve or disapprove the contractor's MMAS. ACO notifications should avoid any such implications.
(iii) From the time the ACO determines that there are any significant MMAS deficiencies until the time the deficiencies are corrected, all field pricing reports for that contractor must contain a recommendation relating to proposed adjustments necessary to protect the Government's interests.
(iv) The ACO should consider the effect of any significant MMAS deficiencies in reviews of the contractor's estimating system (see 215.407-5).
(4)
(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 MMAS report. The ACO should use the maximum adjustment when the contractor did not submit a corrective action plan with its response, or when the plan is unacceptable. In other cases, the ACO should consider the quality of the contractor's 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 must not fully reinstate withheld amounts until the contractor corrects the deficiencies, or until the impact of the deficiencies become immaterial.
(5)
(i) Elevate the issue to higher level management;
(ii) Further reduce progress payments and/or disallow costs on vouchers;
(iii) Notify the contractor of the inadequacy of the contractor's cost estimating system and/or cost accounting system; and
(iv) 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 to small businesses, educational institutions, or nonprofit organizations; and
(b) Are either—
(1) Cost-reimbursement contracts; or
(2) Fixed-price contracts with progress payments made on the basis of costs incurred by the contractor as work progresses under the contract.
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 Contract Management Agency (DCMA) 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 DCMA/DCAA review that concentrates on specific areas of the contractor's insurance program, pension plan, or other deferred compensation plan.
(b) DCMA 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 DCMA 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 DCMA activity;
(3) Notifying the contractor of the proposed date and purpose of the review, and obtaining any preliminary data needed by the DCMA 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 DCMA 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 242.202(a)).
(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 services (e.g., pay, travel, maintenance of personnel records), and, when required, full-time clerical support.
(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
(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) In accordance with 10 U.S.C. 983, do not provide funds by contract or contract modification, or make contract payments, to an institution of higher education that has a policy or practice of hindering Senior Reserve Officer Training Corps units or military recruiting on campus as described at 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.
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.
Also review the adequacy of rationale documenting commercial item determinations to ensure compliance with the definition of “commercial item” in FAR 2.101.
(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.
(a) Contractors shall determine whether a particular subcontract item meets the definition of a commercial item. This requirement does not affect the contracting officer's responsibilities or determinations made under FAR 15.403-1(c)(3). Contractors are expected to exercise reasonable business judgment in making such determinations, consistent with the guidelines for conducting market research in FAR part 10.
Use the clause at 252.244-7000, Subcontracts for Commercial Items and Commercial Components (DoD contracts), in solicitations and contracts for supplies or services other than commercial items, that contain any of the following clauses: 252.225-7014 Preference for Domestic Specialty Metals, Alternate I, 252.247-7023 Transportation of Supplies by Sea, and 252.247-7024 Notification of Transportation of Supplies by Sea.
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 Industrial Resources, in processing a request for facilities. Submit requests for approval of facilities projects—
(
(
(
(
(
(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
(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 nonrecurring recoupments for the use of such property.
(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 system, would otherwise qualify as IPE;
(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 excluded sale, purchase, or retention at less than cost.
(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 considered without value except for scrap. If approved, the contractor may make a single descriptive entry on an inventory schedule, generally describing the property and indicating its approximate total cost. The plant clearance officer will establish a plant clearance case and perform limited screening.
(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
(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
(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 Federal agency use or donation and ensure final plant clearance is accomplished;
(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 Government precious metals reclamation activity, etc. Further explanation may be provided in Item 26, Remarks, if necessary.
(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
(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 _____ (Alternate Bid)
This item consists of all property listed and described in Items ____ to ____, inclusive. Award under this item will be made only if the highest acceptable bid on this item is equal to, or greater than, the total of the highest acceptable bids on Items ____ to ____, inclusive.
(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 would tend to create or maintain a situation inconsistent with the antitrust laws.
(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 the Contractor, title shall not vest until payment and loading are completed.
(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
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) ____ require demilitarization by the Purchaser in the manner and to the degree set forth below:
(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 amount may be reduced to not less than 50 percent of the estimated cost of the work. Include the following condition when performance bonds are required:
Within ten days after notice of award, the Purchaser shall furnish a performance bond in the sum of $____ to cover the Purchaser's obligations. Such bond shall remain in full force and effect during the term of the contract and any extensions as may be agreed upon. The Purchaser shall not be permitted to begin performance until the bond has been received.
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
(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
(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 which authorize only base, post, camp, or station activities to issue orders.
(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)
(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
(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 Receiving Report, or other authorized receiving report.
(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,
41 U.S.C. 421 and 48 CFR chapter 1.
For definitions of “Civil Reserve Air Fleet” and “Voluntary Intermodal Sealift Agreement,” see Joint Pub. 1-02, DoD Dictionary of Military and Associated Terms.
(a) See DoD 4500.9-R, Defense Transportation Regulation, Part II, Chapter 206, for instructions on converting commercial bills of lading to Government bills of lading within CONUS.
(b)(i) Transportation assistance includes all transportation factors, such as—
(A) Rates and prices (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) is responsible for the performance of traffic management functions. These functions include the direction, control,
(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 CONUS, including Alaska and Hawaii, request assistance, rates, or other costs from the military service sponsoring the cargo. Direct the requests to:
This subpart does not apply to the operation of vessels owned by, or bareboat chartered by, the Government.
(1) Consistent with FAR 15.304 and 215.304, consider using the following as evaluation factors or subfactors:
(i) Record of claims involving loss or damage;
(ii) Provider availability; and
(iii) Commitment of transportation assets to readiness support (e.g., Civil Reserve Air Fleet and Voluntary Intermodal Sealift Agreement).
(2) To the maximum extent practicable, structure contracts and agreements to allow for their use by DoD contractors.
This section contains procedures unique 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; and
(2) Computed by dividing the hourly stevedoring gang cost by the estimated number of tons of the specified commodity that 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.
(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 rail car, truck, or intermodal equipment loading and unloading, or other dock and terminal work under a stevedoring contract, include these requirements as separate items of work.
As a minimum, require that offers include—
(a) Tonnage or commodity rates that apply to the bulk of the cargo worked under normal conditions;
(b) Labor-hour rates that apply to services not covered by commodity rates, or to work performed under hardship conditions; and
(c) Rates for equipment rental.
Make the award to the offeror submitting the offer most advantageous to the Government, considering cost or price and other factors specified 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, in all solicitations and contracts.
(b) 252.247-7001, Price Adjustment, when using sealed bidding.
(c) 252.247-7002, Revision of Prices, when using negotiation.
(d) 252.247-7004, Indefinite Quantities—Fixed Charges, when the contract is an indefinite-quantity type and will provide for the payment of fixed charges.
(e) 252.247-7005, Indefinite Quantities—No Fixed Charges, when the contract is an indefinite-quantity type and will not provide for the payment of fixed charges.
(f) 252.247-7006, Removal of Contractor's Employees, in all solicitations and contracts.
(g) 252.247-7007, Liability and Insurance, in all solicitations and contracts.
This section contains procedures unique 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 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 4500.9-R, Defense Transportation Regulation, Part IV;
(2) Ensure that the Government's minimum acceptable daily capability—
(i) Will at least equal the maximum authorized individual weight allowance as prescribed by the Joint Federal Travel Regulations; and
(ii) Will encourage maximum participation of small business concerns as offerors.
(a)
(2) The Commander, Military Traffic Management Command (MTMC), must 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 must 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 must 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 must send the copy to either the Property Directorate, MTMC Europe, or the MTMC Field Office-Pacific.
(3) Other overseas personal property shipping activities must send the copy to the Commander, Military Traffic Management Command, Attn: MTPP-
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 4500.9-R, Defense Transportation Regulation, Part IV, 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 must 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 must 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 to the Commander, 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 must 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 16.505(a)(4), document the oral orders in accordance with department or 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 216.506(d), which prescribes an alternate to the clause.
(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 52.247-8, Estimated Weight or Quantities Not Guaranteed, and FAR 52.247-13, Accessorial Services—Moving Contracts.
“Integrated logistics managers” or “third-party logistics providers” means providers of multiple logistics services. Some examples of logistics services are the management of transportation, demand forecasting, information management, inventory maintenance, warehousing, and distribution.
For contracts that will include a significant requirement for transportation of items outside CONUS, include an evaluation factor or subfactor that favors suppliers, third-party logistics providers, and integrated logistics managers that commit to using carriers that participate in one of the readiness programs (e.g., Civil Reserve Air Force Fleet and Voluntary Intermodal Sealift Agreement).
(b) Consignment instructions must 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—
(
(
(
(B) Project code, when applicable.
(C) Transportation priority.
(D) Required delivery date.
(ii) Non-MILSTRIP shipments must include data similar to that described in paragraphs (b)(i)(A) through (D) of this subsection.
(iii) In amended shipping instructions include, in addition to the data requirements of paragraphs (b)(i)(A) through (D) of this subsection, the following, when appropriate:
(A) Name of the activity originally designated, from which the stated quantities are to be deducted.
(B) Any other features of the amended instructions not contained in the basic contract.
(iv) When assigning contract administration responsibility in accordance with FAR 42.202, include in instructions the—
(A) Modification serial number; and
(B) If a new line item is created by the issuance of shipping instructions—
(
(
(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 or electronic media.
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 (SF) 30, Amendment of Solicitation/Modification of Contract,
(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 FAR subpart 42.3 to any office listed in the Federal 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) For other contracts—
(i) Telephone—within 5 working days; and
(ii) Electronic media—consolidate on a monthly basis.
Reporting procedures and instructions for this form will be in compliance with DoD 4500.9-R, Defense Transportation Regulation.
(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 combined port handling and transportation charges for inclusion in the solicitation in connection with export shipments.
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 (“the 1904 Act”), 10 U.S.C. 2631, which applies to the ocean transportation of cargo owned by, or destined for use by, DoD;
(b) Does not specifically implement the Cargo Preference Act of 1954 (“the 1954 Act”), 46 U.S.C. 1241(b). The 1954 Act is applicable to DoD, but DFARS coverage is not required because compliance with the 1904 Act historically has resulted in DoD exceeding the 1954 Act's requirements; and
(c) Does not apply to ocean transportation of the following products, in which case FAR subpart 47.5 applies:
(1) Products obtained for contributions to foreign assistance programs.
(2) Products owned by agencies other than DoD, unless the products are clearly identifiable for eventual use by DoD.
(a) DoD contractors must 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 the procedures at 247.572-1(d)(1) or 247.572-2(d)(1) are followed;
(2) The proposed charges to the Government are higher than charges to private persons for the transportation of like goods, and the procedures at 247.572-1(d)(2) or 247.572-2(d)(2) are followed; or
(3) The Secretary of the Navy or the Secretary of the Army determines that the proposed freight charges are excessive or unreasonable in accordance with 247.572-1(d)(3) or 247.572-2(d)(3).
(b) Contracts must 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 under this section must have any reflagging or repair work, as defined in the clause at 252.247-7025, 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 the 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.
(a) This subsection applies when ocean transportation is not the principal purpose of the contract, and the cargo to be transported is owned by DoD or is clearly identifiable for eventual use by DoD.
(b) The contracting officer must obtain assistance from the congnizant 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; and
(2) Shipping instructions and delivery terms for inclusion in solicitations and contracts that may involve transportation of supplies by sea.
(c) If the contractor notifies the contracting officer that the contractor or a subcontractor considers that—
(1) No U.S.-flag vessels are available, the contracting officer must request confirmation of the nonavailability from—
(i) The Commander, Military Sealift Command (MSC), through the Contracts and Business Management Directorate, MSC; or
(ii) The Commander, Military Traffic Management Command (MTMC), through the Principal Assistant Responsible for Contracting, MTMC.
(2) The proposed 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 a request for an exception to the requirement to ship on U.S.-flag vessels for a particular shipment.
(i) Prior to granting an exception, the contracting officer must request advice, oral or written, from the Commander, MSC, or the Commander, MTMC.
(ii) In advising the contracting officer whether to grant the exception, the Commander, MSC, or the Commander, MTMC, must consider, as appropriate, evidence from—
(A) Published tariffs;
(B) Industry publications;
(C) The Maritime Administration; and
(D) Any other available sources.
(3) The freight charges proposed by U.S.-flag carriers are excessive or otherwise unreasonable—
(i) The contracting officer must prepare a report in determination and finding format, and must—
(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-flag carriers. Therefore, a lower price for use of 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 price differential may indicate a need for further review;
(B) Consider, accordingly, not only excessive profits to the carrier (to include vessel owner or operator), if ascertainable, but also excessive costs to the Government (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; and
(C) Include an analysis of whether the cost is excessive, taking into account factors such as—
(
(
(
(
(ii) The contracting officer must forward the report to—
(A) The Commander, MSC, through the Contracts and Business Management Directorate, MSC; or
(B) The Commander, MTMC, through the Principal Assistant Responsible for Contracting, MTMC.
(iii) If in agreement with the contracting officer, the Commander, MSC, or the Commander, MTMC, will forward the report to the Secretary of the Navy or the Secretary of the Army, respectively, for a determination as to whether the proposed 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 for charter vessel services;
(4) Dedicated contractor contracts for charter vessel services;
(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 U.S. Transportation Command, the DoD single manager for commercial transportation and related services, other than Service-unique or theater-assigned transportation assets, in accordance with DoD 5158.4, United States Transportation Command.
(c) All solicitations within the scope of this subsection must provide—
(1) A preference for U.S.-flag vessels in accordance with the 1904 Act; and
(2) An evaluation factor or subfactor for offeror participation in the Voluntary Intermodal Sealift Agreement.
(d) Do not award a contract of the type described in paragraph (a) of this subsection for a foreign-flag vessel unless—
(1) The Commander, MSC, or the Commander, MTMC, determines that no U.S.-flag vessels are available.
(i) The Commander, MSC, and the Commander, MTMC, are authorized to make any determinations as to the availability of U.S.-flag vessels to ensure the proper use of Government and private U.S. vessels.
(ii) The contracting officer must request such determinations—
(A) For voyage and time charters, through the Contracts and Business Management Directorate, MSC; and
(B) For ocean and intermodal transportation of DoD and DoD-sponsored cargoes, as applicable under contracts awarded by MTMC, including contracts for shipment of military household goods, through the Chiefs of the MTMC Ocean Cargo Clearance Authority.
(iii) In the absence of regularly scheduled U.S.-flag service to fulfill stated DoD requirements under MTMC solicitations or rate requests, the Commander, MTMC, may grant, on a case-by-case basis, an on-going nonavailability determination for foreign-flag service approval with pre-determined review date(s);
(2) The contracting officer determines that the U.S.-flag carrier has proposed to the Government freight charges that are higher than charges to private persons for transportation of like goods, and obtains the approval of the Commander, MSC, or the Commander, MTMC; or
(3) The Secretary of the Navy or the Secretary of the Army determines that the proposed freight charges for U.S.-flag vessels are excessive or otherwise unreasonable.
(i) After considering the factors in 247.572-1(d)(3)(i)(A) and (B), if the contracting officer concludes that the freight charges proposed by U.S.-flag carriers may be excessive or otherwise unreasonable, the contracting officer must prepare a report in determination and finding format that includes, as appropriate—
(A) An analysis of the carrier's costs 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;
(B) 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
(C) An analysis of whether the costs are excessive (i.e., costs beyond the economic penalty normally incurred by excluding foreign competition), taking into consideration factors such as those listed at 247.572-1(d)(3)(i)(C).
(ii) The contracting officer must forward the report to—
(A) The commander, MSC, through the Contracts and Business Management Directorate, MSC; or
(B) The Commander, MTMC, through the Principal Assistant Responsible for Contracting, MTMC.
(iii) If an agreement with the contracting officer, the Commander, MSC, or the Commander, MTMC, will forward the report to the Secretary of the Navy or the Secretary of the Army, respectively, for a determination as to whether the proposed freight charges are excessive or otherwise unreasonable.
(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)(1) Use the clause at 252.247-7023, Transportation of Supplies by Sea, in all solicitations and resultant contracts, except those for direct purchase of ocean transportation services.
(2) Use the clause with its Alternate I in other than construction contracts, if any of the supplies to be transported are commercial items that are shipped in direct support of U.S. military contingency operations, exercises, or forces deployed in humanitarian or peacekeeping operations.
(3) Use the clause with its Alternate II in other than construction contracts, if any of the supplies to be transported are commercial items that are commissary or exchange cargoes transported outside of the Defense Transportation System in accordance with 10 U.S.C. 2643.
(4) Use the clause with its Alternate III in solicitations and contracts 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 the contract administration office receives a termination notice, it will, under Report Control Symbol DD-AT&L(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.
If the TCO suspects fraud or other criminal conduct, the TCO must report the facts in accordance with the procedures at 209.406-3 or 209.407-3.
(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 extensively over the period of the contract.
(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 Procedures Manual on Termination of Contracts, Public Works and Government 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 Contract Claims Resolution Board of the Public Works and Government Services Canada has approved settlements with Canadian subcontractors when the Procedures Manual on Termination of Contracts 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 should send all termination settlement proposals submitted by U.S. subcontractors and suppliers to the TCO of the cognizant contract administration office of the Defense Contract Management Agency for settlement. The TCO will inform the Canadian Commercial Corporation of the amount of the net settlement of U.S. subcontractors and suppliers so that this amount can be included in the Canadian Commercial Corporation 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 the termination notice to the contractor. Department and agency liaison offices are—
(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-AT&L(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.
(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.
(d) In accordance with the acquisition authority of the Under Secretary of Defense (Acquisition, Technology, and Logistics (USD (AT&L)) under 10 U.S.C. 133, in addition to the Secretary of Defense and the Secretaries of the military departments, the USD (AT&L) may exercise authority to indemnify against unusually hazardous or nuclear risks.
(a)
(b)
(1) Requests to obligate the Government in excess of $50,000 must be submitted to the USD (AT&L) for approval.
(2) Requests for indemnification against unusually hazardous or nuclear risks must be submitted to the USD(AT&L) 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
(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.
41 U.S.C. 421 and 48 CFR chapter 1.
(b)
(2)
(ii)(B) DFARS provisions or clauses use a four digit sequential number in the 7000 series, e.g., -7000, -7001, -7002. Department or agency supplemental provisions or clauses use four digit sequential numbers in the 9000 series.
As prescribed in 201.602-70, use the following clause:
(a)
(b) If the Contracting Officer designates a contracting officer's representative (COR), the Contractor will receive a copy of the written designation. It will specify the extent of the COR's authority to act on behalf of the contracting officer. The COR is not authorized to make any commitments or changes that will affect price, quality, quantity, delivery, or any other term or condition of the contract.
As prescribed in 203.570-5, use the following clause:
(a)
As used in this clause—
(1)
(i) Attempting to obtain;
(ii) Obtaining; or
(iii) Performing a contract or first-tier subcontract of any agency, department, or component of the Department of Defense (DoD).
(2)
(3)
(b) Any individual who is convicted after September 29, 1988, of fraud or any other felony arising out of a contract with the DoD is prohibited from serving—
(1) In a management or supervisory capacity on any DoD contract or first-tier subcontract;
(2) On the board of directors of any DoD contractor or first-tier subcontractor;
(3) As a consultant, agent, or representative for any DoD contractor or first-tier subcontractor; or
(4) In any other 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.
(c) Unless waived, the prohibition in paragraph (b) of this clause applies for not less than 5 years from the date of conviction.
(d) 10 U.S.C. 2408 provides that a defense contractor or first-tier subcontractor shall be subject to a criminal penalty of not more than $500,000 if convicted of knowingly—
(1) Employing a person under a prohibition specified in paragraph (b) of this clause; or
(2) Allowing such a person to serve on the board of directors of the contractor or first-tier subcontractor.
(e) In addition to the criminal penalties contained in 10 U.S.C. 2408, the Government
(1) Suspension or debarment;
(2) Cancellation of the contract at no cost to the Government; or
(3) Termination of the contract for default.
(f) The Contractor may submit written requests for waiver of the prohibition in paragraph (b) of this clause to the Contracting Officer. Requests shall clearly identify—
(1) The person involved;
(2) The nature of the conviction and resultant sentence or punishment imposed;
(3) The reasons for the requested waiver; and
(4) An explanation of why a waiver is in the interest of national security.
(g) The Contractor agrees to include the substance of this clause, appropriately modified to reflect the identity and relationship of the parties, in all first-tier subcontracts exceeding the simplified acquisition threshold in part 2 of the Federal Acquisition Regulation, except those for commercial items or components.
(h) Pursuant to 10 U.S.C. 2408(c), defense contractors and subcontractors may obtain information as to whether a particular person has been convicted of fraud or any other felony arising out of a contract with the DoD by contacting The Office of Justice Programs, The Denial of Federal Benefits Office, U.S. Department of Justice, telephone (202) 616-3507.
As prescribed in 203.7002, use the following clause:
(a) The Contractor shall display prominently in common work areas within business segments performing work under Department of Defense (DoD) contracts, DoD Hotline Posters prepared by the DoD Office of the Inspector General.
(b) DoD Hotline Posters may be obtained from the DoD Inspector General, Attn: Defense Hotline, 400 Army Navy Drive, Washington, DC 22202-2884.
(c) The Contractor need not comply with paragraph (a) of this clause if it has established a mechanism, such as a hotline, by which employees may report suspected instances of improper conduct, and instructions that encourage employees to make such reports.
As prescribed in 204.404-70(a), use the following clause:
(a) The Contractor shall not release to anyone outside the Contractor's organization any unclassified information, regardless of medium (e.g., film, tape, document), pertaining to any part of this contract or any program related to this contract, unless—
(1) The Contracting Officer has given prior written approval; or
(2) The information is otherwise in the public domain before the date of release.
(b) Requests for approval shall identify the specific information to be released, the medium to be used, and the purpose for the release. The Contractor shall submit its request to the Contracting Officer at least 45 days before the proposed date for release.
(c) The Contractor agrees to include a similar requirement in each subcontract under this contract. Subcontractors shall submit requests for authorization to release through the prime contractor to the Contracting Officer.
As prescribed in 204.7207, use the following provision:
(a) The offeror is requested to enter its CAGE code on its offer in the block with its name and address. The CAGE code entered must be for that name and address. Enter “CAGE” before the number.
(b) If the offeror does not have a CAGE code, it may ask the Contracting Officer to request one from the Defense Logistics Information Service (DLIS). The Contracting Officer will—
(1) Ask the Contractor to complete section B of a DD Form 2051, Request for Assignment of a Commercial and Government Entity (CAGE) Code;
(2) Complete section A and forward the form to DLIS; and
(3) Notify the Contractor of its assigned CAGE code.
(c) Do not delay submission of the offer pending receipt of a CAGE code.
As prescribed in 204.7104-1(b)(3)(iv), use the following clause:
(a) If the schedule in this contract contains any contract subline items or exhibit subline items identified as not separately priced (NSP), it means that the unit price for that subline item is included in the unit price of another, related line or subline item.
(b) The Contractor shall not invoice the Government for any portion of a contract line item or exhibit line item which contains an NSP until—
(1) The Contractor has delivered the total quantity of all related contract subline items or exhibit subline items; and
(2) The Government has accepted them.
(c) This clause does not apply to technical data.
As prescribed in 204.404-70(b), use the following clause:
The Contractor's procedures for protecting against unauthorized disclosure of information shall not require Department of Defense employees or members of the Armed Forces to relinquish control of their work products, whether classified or not, to the contractor.
As prescribed in 204.7304, use the following clause:
(a)
(1)
(2)
(3)
(4)
(b)(1) By submission of an offer, the offeror acknowledges the requirement that a prospective awardee must be registered in the CCR database prior to award, during performance, and through final payment of any contract resulting from this solicitation, except for awards to foreign vendors for work to be performed outside the United States.
(2) The offeror shall provide its DUNS or, if applicable, its DUNS+4 number with its offer, which will be used by the Contracting Officer to verify that the offeror is registered in the CCR database.
(3) Lack of registration in the CCR database will make an offeror ineligible for award.
(4) DoD has established a goal of registering an applicant in the CCR database within 48 hours after receipt of a complete and accurate application via the Internet. However, registration of an applicant submitting an application through a method other than the Internet may take up to 30 days. Therefore, offerors that are not registered should consider applying for registration immediately upon receipt of this solicitation.
(c) The Contractor is responsible for the accuracy and completeness of the data within the CCR, and for any liability resulting from the Government's reliance on inaccurate or incomplete data. To remain registered in the CCR database after the initial registration, the Contractor is required to confirm on an annual basis that its information in the CCR database is accurate and complete.
(d) Offerors and contractors may obtain information on registration and annual confirmation requirements by calling 1-888-227-2423, or via the Internet at http://www.ccr.gov.
As prescribed in 204.404-70(c), use the following clause:
(a) Contractor employees cleared for access to Top Secret (TS), Special Access Program (SAP), or Sensitive Compartmented Information (SCI) shall attest orally that they will conform to the conditions and responsibilities imposed by law or regulation on those granted access. Reading aloud the first paragraph of Standard Form 312, Classified Information Nondisclosure Agreement, in the presence of a person designated by the Contractor for this purpose, and a witness, will satisfy this requirement. Contractor employees currently cleared for access to TS, SAP, or SCI may attest orally to their security responsibilities when being briefed into a new program or during their annual refresher briefing. There is no requirement to retain a separate record of the oral attestation.
(b) If an employee refuses to attest orally to security responsibilities, the Contractor shall deny the employee access to classified information and shall submit a report to the Contractor's security activity.
As prescribed in 205.470-2, use the following clause:
(a) Definition.
(b) The Contractor shall provide cooperative agreement holders, upon their request, with a list of those appropriate employees or offices responsible for entering into subcontracts under defense contracts. The list shall include the business address, telephone number, and area of responsibility of each employee or office.
(c) The Contractor need not provide the listing to a particular cooperative agreement holder more frequently than once a year.
As prescribed at 206.302-3-70, use the following provision:
This solicitation is restricted to domestic sources under the authority of 10 U.S.C. 2304(c)(3). Foreign sources, except Canadian sources, are not eligible for award.
As prescribed in 208.7305(a), use the following clause:
(a) The Government intends to furnish precious metals required in the manufacture of items to be delivered under the contract if the Contracting Officer determines it to be in the Government's best interest. The use of Government-furnished silver is mandatory when the quantity required is one hundred troy ounces or more. The precious metal(s) will be furnished pursuant to the Government Furnished Property clause of the contract.
(b) The Offeror shall cite the type (silver, gold, platinum, palladium, iridium, rhodium, and ruthenium) and quantity in whole troy ounces of precious metals required in the performance of this contract (including precious metals required for any first article or production sample), and shall specify the national stock number (NSN) and nomenclature, if known, of the deliverable item requiring precious metals.
(c) Offerors shall submit two prices for each deliverable item which contains precious metals—one based on the Government furnishing precious metals, and one based on the Contractor furnishing precious metals.
(d) The Contractor agrees to insert this clause, including this paragraph (d), in solicitations for subcontracts and purchase orders issued in performance of this contract, unless the Contractor knows that the item being purchased contains no precious metals.
As prescribed in 209.103-70, use the following clause:
(a) The Contractor shall not deny consideration for a subcontract award under this contract to a potential subcontractor subject to on-site inspection under the INF Treaty, or a similar treaty, solely or in part because of the actual or potential presence of Soviet inspectors at the subcontractor's facility, unless the decision is approved by the Contracting Officer.
(b) The Contractor shall incorporate this clause, including this paragraph (b), in all solicitations and contracts exceeding the simplified acquisition threshold in part 13 of the Federal Acquisition Regulation, except those for commercial items.
As prescribed in 209.104-70(a), use the following provision:
(a)
(1)
(2)
(3)
(i) Ownership of or beneficial interest in 5 percent or more of the firm's or subsidiary's securities. Beneficial interest includes holding 5 percent or more of any class of the firm's securities in “nominee shares,” “street names,” or some other method of holding securities that does not disclose the beneficial owner;
(ii) Holding a management position in the firm, such as a director or officer;
(iii) Ability to control or influence the election, appointment, or tenure of directors or officers in the firm;
(iv) Ownership of 10 percent or more of the assets of a firm such as equipment, buildings, real estate, or other tangible assets of the firm; or
(v) Holding 50 percent or more of the indebtedness of a firm.
(b)
(c)
(1) Identification of each government holding a significant interest; and
(2) A description of the significant interest held by each government.
As prescribed in 209.104-70(b), use the following provision:
(a)
(1)
(2)
(i) Means—
(A) Any domestic or foreign organization or corporation that is effectively owned or controlled by a foreign government; or
(B) Any individual acting on behalf of a foreign government.
(ii) Does not include an organization or corporation that is owned, but is not controlled, either directly or indirectly, by a foreign government if the ownership of that organization or corporation by that foreign government was effective before October 23, 1992.
(3)
(4)
(i) Top Secret information;
(ii) Communications Security (COMSEC) information, except classified keys used to operate secure telephone units (STU IIIs);
(iii) Restricted Data as defined in the U.S. Atomic Energy Act of 1954, as amended;
(iv) Special Access Program (SAP) information; or
(v) Sensitive Compartmented Information (SCI).
(b)
(c)
As prescribed in 209.409, use the following clause:
(a) Unless the Government determines that there is a compelling reason to do so, the Contractor shall not enter into any subcontract in excess of $25,000 with a firm, or a subsidiary of a firm, that is identified, on the List of Parties Excluded from Federal Procurement and Nonprocurement Programs, as being ineligible for the award of Defense contracts or subcontracts because it is owned or controlled by the government of a terrorist country.
(b) A corporate officer or a designee of the Contractor shall notify the Contracting Officer, in writing, before entering into a subcontract with a party that is identified, on the List of Parties Excluded from Federal Procurement and Nonprocurement Programs, as being ineligible for the award of Defense contracts or subcontracts because it is owned or controlled by the government of a terrorist country. The notice must include the name of the proposed subcontractor and the compelling reason(s) for doing business with the subcontractor notwithstanding its inclusion on the List of Parties Excluded From Federal Procurement and Nonprocurement Programs.
As prescribed in 209.470-4, use the following clause:
(a)
(b)
(1) The Secretary of a military department from maintaining, establishing, or operating a unit of the Senior Reserve Officer Training Corps (ROTC) (in accordance with 10 U.S.C. 654 and other applicable Federal laws) at that institution;
(2) A student at that institution from enrolling in a unit of the Senior ROTC at another institution of higher education;
(3) The Secretary of a military department or the Secretary of Transportation from gaining entry to campuses, or access to students (who are 17 years of age or older) on campuses, for purposes of military recruiting; or
Military recruiters from accessing, for purposes of military recruiting, the following information pertaining to students (who are 17 years of age or older) enrolled at that institution:
(i) Name.
(ii) Address.
(iii) Telephone number.
(iv) Date and place of birth.
(v) Educational level.
(vi) Academic major.
(vii) Degrees received.
(viii) Most recent educational institution enrollment.
(c)
(1) The institution has ceased the policy or practice described in paragraph (b) of this clause; or
(2) The institution has a long-standing policy of pacifism based on historical religious affiliation.
(d)
(e) Notwithstanding any other clause of this contract, if the Secretary of Defense determines that the Contractor misrepresented its policies and practices at the time of contract award or has violated the agreement in paragraph (d) of this clause—
(1) The Contractor will be ineligible for further payments under this and other contracts with the Department of Defense; and
(2) The Government will terminate this contract for default for the Contractor's material failure to comply with the terms and conditions of award.
As prescribed in 211.002-70, use the following clause:
(a) The Government's acquisition streamlining objectives are to—
(1) Acquire systems that meet stated performance requirements;
(2) Avoid over-specification; and
(3) Ensure that cost effective requirements are included in future acquisitions.
(b) The Contractor shall—
(1) Prepare and submit acquisition streamlining recommendations in accordance with the statement of work of this contract; and
(2) Format and submit the recommendations as prescribed by data requirements on the contract data requirements list of this contract.
(c) The Government has the right to accept, modify, or reject the Contractor's recommendations.
(d) The Contractor shall insert this clause, including this paragraph (d), in all subcontracts over $1 million, awarded in the performance of this contract.
As prescribed in 211.204(c), use the following provision:
Offerors may obtain the specifications, standards, plans, drawings, data item descriptions, and other pertinent documents cited in this solicitation by submitting a request to:
Include the number of the solicitation and the title and number of the specification, standard, plan, drawing, or other pertinent document.
As prescribed in 211.204(c), use the following provision:
The specifications, standards, plans, drawings, data item descriptions, and other pertinent documents cited in this solicitation are not available for distribution but may be examined at the following location:
As prescribed in 211.272, use the following provision:
(a) The Offeror may submit two unit prices for each item—one based on use of the military preservation, packaging, or packing requirements of the solicitation; and an alternate based on use of commercial or industrial preservation, packaging, or packing of equal or better protection than the military.
(b) If the Offeror submits two unit prices, the following information, as a minimum, shall be submitted with the offer to allow evaluation of the alternate—
(1) The per unit/item cost of commercial or industrial preservation, packaging, and packing;
(2) The per unit/item cost of military preservation, packaging, and packing;
(3) The description of commercial or industrial preservation, packaging, and packing procedures, including material specifications, when applicable, to include—
(i) Method of preservation;
(ii) Quantity per unit package;
(iii) Cleaning/drying treatment;
(iv) Preservation treatment;
(v) Wrapping materials;
(vi) Cushioning/dunnage material;
(vii) Thickness of cushioning;
(viii) Unit container;
(ix) Unit package gross weight and dimensions;
(x) Packing; and
(xi) Packing gross weight and dimensions; and
(4) Item characteristics, to include—
(i) Material and finish;
(ii) Net weight;
(iii) Net dimensions; and
(iv) Fragility.
(c) If the Contracting Officer does not evaluate or accept the Offeror's proposed alternate commercial or industrial preservation, packaging, or packing, the Offeror agrees to preserve, package, or pack in accordance with the specified military requirements.
As prescribed in 211.273-4, use the following clause:
(a)
(b) Offerors are encouraged to propose SPI processes in lieu of military or Federal specifications and standards cited in the solicitation. A listing of SPI processes accepted at specific facilities is available via the Internet in Excel format at http://www.dcma.mil/onebook/0.0/0.2/reports/modified/xls.
(c) An offeror proposing to use an SPI process in lieu of military or Federal specifications or standards cited in the solicitation shall—
(1) Identify the specific military or Federal specification or standard for which the SPI process has been accepted;
(2) Identify each facility at which the offeror proposes to use the specific SPI process in lieu of military or Federal specifications or standards cited in the solicitation;
(3) Identify the contract line items, subline items, components, or elements affected by the SPI process; and
(4) If the proposed SPI process has been accepted at the facility at which it is proposed for use, but is not yet listed at the Internet site specified in paragraph (b) of this clause, submit documentation of Department of Defense acceptance of the SPI process.
(d) Absent a determination that an SPI process is not acceptable for this procurement, the Contractor shall use the following SPI processes in lieu of military or Federal specifications or standards:
(e) If a prospective offeror wishes to obtain, prior to the time specified for receipt of offers, verification that an SPI process is an acceptable replacement for military or Federal specifications or standards required by the solicitation, the prospective offeror—
(1) May submit the information required by paragraph (d) of this clause to the Contracting Officer prior to submission of an offer; but
(2) Must submit the information to the Contracting Officer at least 10 working days prior to the date specified for receipt of offers.
As prescribed in 212.301(f)(ii), use the following provision:
(a)
As used in this clause—
(1)
(2)
(b)
By submitting this offer, the Offeror, if a foreign person, company or entity, certifies that it—
(1) Does not comply with the Secondary Arab Boycott of Israel; and
(2) Is not taking or knowingly agreeing to take any action, with respect to the Secondary Boycott of Israel by Arab countries, which 50 U.S.C. App. Sec. 2407(a) prohibits a United States person from taking.
(c)
(1) The Offeror shall indicate by checking the appropriate blank in paragraph (c)(2) of this provision whether transportation of supplies by sea is anticipated under the resultant contract. The term “supplies” is defined in the Transportation of Supplies by Sea clause of this solicitation.
(2)
The Offeror represents that it—
___ Does anticipate that supplies will be transported by sea in the performance of any contract or subcontract resulting from this solicitation.
___ Does not anticipate that supplies will be transported by sea in the performance of any contract or subcontract resulting from this solicitation.
(3) Any contract resulting from this solicitation will include the Transportation of Supplies by Sea clause. If the Offeror represents that it will not use ocean transportation, the resulting contract will also include the Defense Federal Acquisition Regulation Supplement clause at 252.247-7024, Notification of Transportation of Supplies by Sea.
As prescribed in 212.301(f)(iii), use the following clause:
(a) The Contractor agrees to comply with the following Federal Acquisition Regulation (FAR) clause which, if checked, is included in this contract by reference to implement a provision of law applicable to acquisitions of commercial items or components.
(b) The Contractor agrees to comply with any clause that is checked on the following list of Defense FAR Supplement clauses which, if checked, is included in this contract by reference to implement provisions of law or Executive orders applicable to acquisitions of commercial items or components.
(c) In addition to the clauses listed in paragraph (e) of the Contract Terms and Conditions Required to Implement Statutes or Executive Orders—Commercial Items clause of this contract (FAR 52.212-5), the Contractor shall include the terms of the following clauses, if applicable, in subcontracts for commercial items or commercial components, awarded at any tier under this contract:
As prescribed in 215.408(1), use the following clause:
The term “pricing adjustment,” as used in paragraph (a) of the clauses entitled “Price Reduction for Defective Cost or Pricing Data—Modifications,” “Subcontractor Cost or Pricing Data,” and “Subcontractor Cost or Pricing Data—Modifications,” means the aggregate increases and/or decreases in cost plus applicable profits.
As prescribed in 215.408(2), use the following clause:
(a)
(1) Organizational structure;
(2) Established lines of authority, duties, and responsibilities;
(3) Internal controls and managerial reviews;
(4) Flow of work, coordination, and communication; and
(5) Estimating methods, techniques, accumulation of historical costs, and other analyses used to generate cost estimates.
(b)
(2) The system should be—
(i) Consistent and integrated with the Contractor's related management systems; and
(ii) Subject to applicable financial control systems.
(c)
(1) In its fiscal year preceding award of this contract, received Department of Defense (DoD) prime contracts or subcontracts, totaling $50 million or more for which cost or pricing data were required; or
(2) In its fiscal year preceding award of this contract—
(i) 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
(ii) Was notified in writing by the Contracting Officer that paragraphs (d) and (e) of this clause apply.
(d)
(2) An estimating system disclosure is acceptable when the Contractor has provided the ACO with documentation that—
(i) Accurately describes those policies, procedures, and practices that the Contractor currently uses in preparing cost proposals; and
(ii) Provides sufficient detail for the Government to reasonably make an informed judgment regarding the acceptability of the Contractor's estimating practices.
(3) The Contractor shall—
(i) Comply with its disclosed estimating system; and
(ii) Disclose significant changes to the cost estimating system to the ACO on a timely basis.
(e)
(i) If the Contractor agrees with the report findings and recommendations, the Contractor shall—
(A) Within 30 days, state its agreement in writing; and
(B) Within 60 days, correct the deficiencies or submit a corrective action plan showing proposed milestones and actions leading to elimination of the deficiencies.
(ii) If the Contractor disagrees with the report, the Contractor shall, within 30 days, state its rationale for disagreeing.
(2) The ACO will evaluate the Contractor's response and notify the Contractor of the determination concerning remaining deficiencies and/or the adequacy of any proposed or completed corrective action.
As prescribed in 216.203-4-70(a), use the following clause:
(a)
As used in this clause—
(b) The Contractor warrants that the unit price stated for (
(c) The Contractor shall promptly notify the Contracting Officer of the amount and effective date of each decrease in any established price.
(1) Each corresponding contract unit price shall be decreased by the same percentage that the established price is decreased.
(2) This decrease shall apply to items delivered on or after the effective date of the decrease in the Contractor's established price.
(3) This contract shall be modified accordingly.
(d) If the Contractor's established price is increased after the date set for opening of bids (or the contract date if this is a negotiated contract), upon the Contractor's written request to the Contracting Officer, the corresponding contract unit price shall be increased by the same percentage that the established price is increased, and this contract shall be modified accordingly, provided—
(1) The aggregate of the increases in any contract unit price under this contract shall not exceed 10 percent of the original contract unit price;
(2) The increased contract unit price shall be effective on the effective date of the increase in the applicable established price if the Contractor's written request is received by the Contracting Officer within ten days of the change. If it is not, the effective date of the increased unit price shall be the date of receipt of the request by the Contracting Officer; and
(3) The increased contract unit price shall not apply to quantities scheduled for delivery before the effective date of the increased contract unit price unless the Contractor's failure to deliver before that date results from causes beyond the control and without the fault or negligence of the Contractor, within the meaning of the Default clause of this contract.
(4) The Contracting Officer shall not execute a modification incorporating an increase in a contract unit price under this clause until the increase is verified.
(e) Within 30 days after receipt of the Contractor's written request, the Contracting Officer may cancel, without liability to either party, any portion of the contract affected by the requested increase and not delivered at the time of such cancellation, except as follows—
(1) The Contractor may, after that time, deliver any items that were completed or in the process of manufacture at the time of receipt of the cancellation notice, provided the Contractor notifies the Contracting Officer of such items within 10 days after the Contractor receives the cancellation notice.
(2) The Government shall pay for those items at the contract unit price increased to the extent provided by paragraph (d) of this clause.
(3) Any standard steel supply item shall be deemed to be in the process of manufacture when the steel for that item is in the state of processing after the beginning of the furnace melt.
(f) Pending any cancellation of this contract under paragraph (e) of this clause, or if there is no cancellation, the Contractor shall continue deliveries according to the delivery schedule of the contract. The Contractor shall be paid for those deliveries at the contract unit price increased to the extent provided by paragraph (d) of this clause.
As prescribed in 216.203-4-70(b), use the following clause:
(a)
As used in this clause—
(1) A price which is an established catalog or market price of a commercial item sold in substantial quantities to the general public; and
(2) The net price after applying any applicable standard trade discounts offered by the
(b) Each contract unit price shall be subject to revision, under the terms of this clause, to reflect changes in the cost of labor and steel. For purpose of this price revision, the proportion of the contract unit price attributable to costs of labor not otherwise included in the price of the steel item identified under the
(c)(1) Unless otherwise specified in this contract, the labor index shall be computed by dividing the total straight time earnings of the Contractor's employees in the shop identified in paragraph (a) for any given month by the total number of straight time hours worked by those employees in that month.
(2) Any revision in a contract unit price to reflect changes in the cost of labor shall be computed solely by reference to the “
(d) Any revision in a contract unit price to reflect changes in the cost of steel shall be computed solely by reference to the “
(e)(1) Each contract unit price shall be revised for each month in which delivery of supplies is required to be made.
(2) The revised contract unit price shall apply to the deliveries of those quantities required to be made in that month regardless of when actual delivery is made.
(3) Each revised contract unit price shall be computed by adding—
(i) The adjusted cost of labor (obtained by multiplying ___ percent of the contract unit price by a fraction, of which the numerator shall be the current labor index and the denominator shall be the base labor index);
(ii) The adjusted cost of steel (obtained by multiplying ___ percent of the contract unit price by a fraction, of which the numerator shall be the current steel index and the denominator shall be the base steel index); and
(iii) The amount equal to ___ percent of the original contract unit price (representing that portion of the unit price which relates neither to the cost of labor nor the cost of steel, and which is therefore not subject to revision (see note 5)).
(4) The aggregate of the increases in any contract unit price under this contract shall not exceed ten percent of the original contract unit price.
(5) Computations shall be made to the nearest one-hundredth of one cent.
(f)(1) Pending any revisions of the contract unit prices, the Contractor shall be paid the contract unit price for deliveries made.
(2) Within 30 days after final delivery (or such other period as may be authorized by the Contracting Officer), the Contractor shall furnish a statement identifying the correctness of—
(i) The average straight time hourly earnings of the Contractor's employees in the shop identified in paragraph (a) that are relevant to the computations of the
(ii) The Contractor's established prices (see note 6), including all applicable extras for like quantities of the item that are relevant to the computation of the
(3) Upon request of the Contracting Officer, the Contractor shall make available all records used in the computation of the labor indices.
(4) Upon receipt of the statement, the Contracting Officer will compute the revised contract unit prices and modify the contract accordingly. No modification to this contract will be made pursuant to this clause until the Contracting Officer has verified the revised established price (see note 6).
(g)(1) In the event any item of this contract is subject to a total or partial termination for convenience, the month in which the Contractor receives notice of the termination, if prior to the month in which delivery is required, shall be considered the month in which delivery of the terminated item is required for the purposes of determining the current labor and steel indices under paragraphs (c) and (d).
(2) For any item which is not terminated for convenience, the month in which delivery is required under the contract shall continue to apply for determining those indices with respect to the quantity of the non-terminated item.
(3) If this contract is terminated for default, any price revision shall be limited to the quantity of the item which has been delivered by the Contractor and accepted by the Government prior to receipt by the Contractor of the notice of termination.
(h) If the Contractor's failure to make delivery of any required quantity arises out of causes beyond the control and without the fault or negligence of the Contractor, within the meaning of the clause of this contract entitled “
Notes:
1 Offeror insert the unit price and unit measure of the standard steel mill item to be used in the manufacture of the contract item.
2 Offeror identify the standard steel mill item to be used in the manufacture of the contract item.
3 Offeror insert best estimate of the number of days required for processing the standard steel mill item in the shop identified under the
4 Offeror identify the shop and plant in which the standard steel mill item identified under the
5 Offeror insert the same percentage figures for the corresponding blanks in paragraphs (b), (e)(3)(i), and (e)(3)(ii). In paragraph (e)(3)(iii), insert the percentage representing the difference between the sum of the percentages inserted in paragraph (b) and 100 percent.
6 In negotiated acquisitions of nonstandard steel items, when there is no
As prescribed in 216.203-4-70(c), use the following clause:
(a) The Contractor represents that the prices set forth in this contract—
(1) Are based on the wage rate(s) or material price(s) established and controlled by the Government of____(
(2) Do not include contingency allowances to pay for possible increases in wage rates or material prices.
(b) If wage rates or material prices are revised by the government named in paragraph (a) of this clause, the Contracting Officer shall make an equitable adjustment in the contract price and shall modify the contract to the extent that the Contractor's actual costs of performing this contract are increased or decreased, as a direct result of the revision, subject to the following:
(1) For increases in established wage rates or material prices, the increase in contract unit price(s) shall be effective on the same date that the government named in paragraph (a) of this clause increased the applicable wage rate(s) or material price(s), but only if the Contracting Officer receives the Contractor's written request for contract adjustment within 10 days of the change. If the Contractor's request is received later, the effective date shall be the date that the Contracting Officer received the Contractor's request.
(2) For decreases in established wage rates or material prices, the decrease in contract unit price(s) shall be effective on the same date that the government named in paragraph (a) of this clause decreased the applicable wage rate(s) or material price(s). The decrease in contract unit price(s) shall apply to all items delivered on and after the effective date of the government's rate or price decrease.
(c) No modification changing the contract unit price(s) shall be executed until the Contracting Officer has verified the applicable change in the rates or prices set by the government named in paragraph (a) of this clause. The Contractor shall make available its books and records that support a requested change in contract price.
(d) Failure to agree to any adjustment shall be a dispute under the Disputes clause of this contract.
As prescribed in 217.208-70(a), use the following clause:
(a) The Government may exercise the option(s) of this contract to fulfill foreign military sales commitments.
(b) The foreign military sales commitments are for:
(b) On the date the option is exercised, the Government shall identify the foreign country for the purpose of negotiating any equitable adjustment attributable to foreign military sales. Failure to agree on an equitable adjustment shall be treated as a dispute under the Disputes clause of this contract.
As prescribed in 217.208-70(b), use the following clause:
(a)
(1) Increase the quantity of supplies or services called for under this contract by no more than ___ percent; and/or
(2) Accelerate the rate of delivery called for under this contract, at a price or cost established before contract award or to be established by negotiation as provided in this clause.
(b)
(2) If there is no Production Surge Plan in the contract, the Contractor shall, within 30 days from the date of award, furnish the Contracting Officer a delivery schedule showing the maximum sustainable rate of delivery for items in this contract. This delivery schedule shall provide acceleration by month up to the maximum sustainable rate of delivery achievable within the Contractor's existing facilities, equipment, and subcontracting structure.
(3) The Contractor shall not revise the option delivery schedule without approval from the Contracting Officer.
(c)
(2) The Contracting Officer will provide a preliminary oral or written notice to the Contractor stating the quantities to be added or accelerated under the terms of this clause, followed by a contract modification incorporating the transmitted information and instructions. The notice and modification will establish a not-to-exceed price equal to the highest contract unit price or cost of the added or accelerated items as of the date of the notice.
(3) The Contractor will not be required to deliver at a rate greater than the maximum sustainable delivery rate under paragraph (b)(2) of this clause, nor will the exercise of this option extend delivery more than 24 months beyond the scheduled final delivery.
(d)
(2) Failure to agree on a cost or price in negotiations resulting from the exercise of this option shall constitute a dispute concerning a question of fact within the meaning of the Disputes clause of this contract. However, nothing in this clause shall excuse the Contractor from proceeding with the performance of the contract, as modified, while any resulting claim is being settled.
As prescribed in 217.7005, use the following provision:
(a) The property described in item number ____, is being offered in accordance with the exchange provisions of section 201(c) of the Federal Property and Administrative Services Act of 1949, 63 Stat. 384 (40 U.S.C. 481(c)).
(b) The property is located at (insert address). Offerors may inspect the property during the period (insert beginning and ending dates and insert hours during day).
As prescribed in 217.7104(a), use the following clause:
(a) The Contracting Officer may, at any time and without notice to the sureties, by written change order, make changes within the general scope of any job order issued under the Master Agreement in—
(1) Drawings, designs, plans, and specifications;
(2) Work itemized;
(3) Place of performance of the work;
(4) Time of commencement or completion of the work; and
(5) Any other requirement of the job order.
(b) If a change causes an increase or decrease in the cost of, or time required for, performance of the job order, whether or not changed by the order, the Contracting Officer shall make an equitable adjustment in
(1) Within ten days after the Contractor receives notification of the change, the Contractor shall submit to the Contracting Officer a request for price adjustment, together with a written estimate of the increased cost.
(2) The Contracting Officer may grant an extension of this period if the Contractor requests it within the ten day period.
(3) If the circumstances justify it, the Contracting Officer may accept and grant a request for equitable adjustment at any later time prior to final payment under the job order, except that the Contractor may not receive profit on a payment under a late request.
(c) If the Contractor includes in its claim the cost of property made obsolete or excess as a result of a change, the Contracting Officer shall have the right to prescribe the manner of disposition of that property.
(d) Failure to agree to any adjustment shall be a dispute within the meaning of the Disputes clause.
(e) Nothing in this clause shall excuse the Contractor from proceeding with the job order as changed.
As prescribed in 217.7104(a), use the following clause:
(a) The Contracting Officer shall solicit bids or proposals and make award of job orders in accordance with FAR part 14 or 15, as applicable. The issuance of a job order signed by the Contracting Officer constitutes award. The job order shall incorporate the terms and conditions of the Master Agreement.
(b) Whenever the Contracting Officer determines that a vessel, its cargo or stores, would be endangered by delay, or whenever the Contracting Officer determines that military necessity requires that immediate work on a vessel is necessary, the Contracting Officer may issue a written order to perform that work and the Contractor hereby agrees to comply with that order and to perform work on such vessel within its capabilities.
(1) As soon as practicable after the issuance of the order, the Contracting Officer and the Contractor shall negotiate a price for the work and the Contracting Officer shall issue a job order covering the work.
(2) The Contractor shall, upon request, furnish the Contracting Officer with a breakdown of costs incurred by the Contractor and an estimate of costs expected to be incurred in the performance of the work. The Contractor shall maintain, and make available for inspection by the Contracting Officer or the Contracting Officer's representative, records supporting the cost of performing the work.
(3) Failure of the parties to agree upon the price of the work shall constitute a dispute within the meaning of the Disputes clause of the Master Agreement. In the meantime, the Contractor shall diligently proceed to perform the work ordered.
(c)(1) If the nature of any repairs is such that their extent and probable cost cannot be ascertained readily, the Contracting Officer may issue a job order (on a sealed bid or negotiated basis) to determine the nature and extent of required repairs.
(2) 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 that work. The prices agreed upon shall be set forth in a modification of the job order.
(3) Failure of the parties to agree upon the price shall constitute a dispute under the Disputes clause. In the meantime, the Contractor shall diligently proceed to perform the work ordered.
As prescribed in 217.7104(a), use the following clause:
(a) The Contractor shall perform work in accordance with the job order, any drawings and specifications made a part of the job order, and any change or modification issued under the Changes clause of the Master Agreement.
(b)(1) Except as provided in paragraph (b) (2) of this clause, and unless otherwise specifically provided in the job order, all operational practices of the Contractor and all workmanship, material, equipment, and articles used in the performance of work under the Master Agreement shall be in accordance with the best commercial marine practices and the rules and requirements of the American Bureau of Shipping, the U.S. Coast Guard, and the Institute of Electrical and Electronic Engineers, in effect at the time of Contractor's submission of bid (or acceptance of the job order, if negotiated).
(2) When Navy specifications are specified in the job order, the Contractor shall follow Navy standards of material and workmanship. The solicitation shall prescribe the Navy standard whenever applicable.
(c) The Government may inspect and test all material and workmanship at any time
(1) If, prior to delivery, the Government finds any material or workmanship is defective or not in accordance with the job order, in addition to its rights under the Guarantees clause of the Master Agreement, the Government may reject the defective or nonconforming material or workmanship and require the Contractor to correct or replace it at the Contractor's expense.
(2) If the Contractor fails to proceed promptly with the replacement or correction of the material or workmanship, the Government may replace or correct the defective or nonconforming material or workmanship and charge the Contractor the excess costs incurred.
(3) As specified in the job order, the Contractor shall provide and maintain an inspection system acceptable to the Government.
(4) The Contractor shall maintain complete records of all inspection work and shall make them available to the Government during performance of the job order and for 90 days after the completion of all work required.
(d) The Contractor shall not permit any welder to work on a vessel unless the welder is, at the time of the work, qualified to the standards established by the U.S. Coast Guard, American Bureau of Shipping, or Department of the Navy for the type of welding being performed. Qualifications of a welder shall be as specified in the job order.
(e) The Contractor shall—
(1) Exercise reasonable care to protect the vessel from fire;
(2) Maintain a reasonable system of inspection over activities taking place in the vicinity of the vessel's magazines, fuel oil tanks, or storerooms containing flammable materials;
(3) Maintain a reasonable number of hose lines ready for immediate use on the vessel at all times while the vessel is berthed alongside the Contractor's pier or in dry dock or on a marine railway;
(4) Unless otherwise provided in a job order, provide sufficient security patrols to reasonably maintain a fire watch for protection of the vessel when it is in the Contractor's custody;
(5) To the extent necessary, clean, wash, and steam out or otherwise make safe, all tanks under alteration or repair;
(6) Furnish the Contracting Officer or designated representative with a copy of the “gas-free” or “safe-for-hotwork” certificate, provided by a Marine Chemist or Coast Guard authorized person in accordance with Occupational Safety and Health Administration regulations (29 CFR 1915.14) before any hot work is done on a tank;
(7) Treat the contents of any tank as Government property in accordance with the Government Property (Fixed-Price Contracts) clause; and
(8) Dispose of the contents of any tank only at the direction, or with the concurrence, of the Contracting Officer.
(f) Except as otherwise provided in the job order, when the vessel is in the custody of the Contractor or in dry dock or on a marine railway and the temperature is expected to go as low as 35 °F, the Contractor shall take all necessary steps to—
(1) Keep all hose pipe lines, fixtures, traps, tanks, and other receptacles on the vessel from freezing; and
(2) Protect the stern tube and propeller hubs from frost damage.
(g) The Contractor shall, whenever practicable—
(1) Perform the required work in a manner that will not interfere with the berthing and messing of Government personnel attached to the vessel; and
(2) Provide Government personnel attached to the vessel access to the vessel at all times.
(h) Government personnel attached to the vessel shall not interfere with the Contractor's work or workers.
(i)(1) The Government does not guarantee the correctness of the dimensions, sizes, and shapes set forth in any job order, sketches, drawings, plans, or specifications prepared or furnished by the Government, unless the job order requires that the Contractor perform the work prior to any opportunity to inspect.
(2) Except as stated in paragraph (i)(1) of this clause, and other than those parts furnished by the Government, the Contractor shall be responsible for the correctness of the dimensions, sizes, and shapes of parts furnished under this agreement.
(j) The Contractor shall at all times keep the site of the work on the vessel free from accumulation of waste material or rubbish caused by its employees or the work. At the completion of the work, unless the job order specifies otherwise, the Contractor shall remove all rubbish from the site of the work and leave the immediate vicinity of the work area “broom clean.”
As prescribed in 217.7104(a), use the following clause:
(a) Unless otherwise provided, title to all materials and equipment to be incorporated in a vessel in the performance of a job order shall vest in the Government upon delivery
(b) Upon completion of the job order, or with the approval of the Contracting Officer during performance of the job order, all Contractor-furnished materials and equipment not incorporated in, or placed on, any vessel, shall become the property of the Contractor, unless the Government has reimbursed the Contractor for the cost of the materials and equipment.
(c) The vessel, its equipment, movable stores, cargo, or other ship's materials shall not be considered Government-furnished property.
As prescribed in 217.7104(a), use the following clause:
(a)
(b) Upon submission by the Contractor of invoices in the form and number of copies directed by the Contracting Officer, and as approved by the Contracting Officer, the Government will make progress payments as work progresses under the job order.
(1) Generally, the Contractor may submit invoices on a semi-monthly basis, unless expenditures justify a more frequent submission.
(2) The Government need not make progress payments for invoices aggregating less than $5,000.
(3) The Contracting Officer shall approve progress payments based on the value, computed on the price of the job order, of labor and materials incorporated in the work, materials suitably stored at the site of the work, and preparatory work completed, less the aggregate of any previous payments.
(4) Upon request, the Contractor will furnish the Contracting Officer any reports concerning expenditures on the work to date that the Contracting Officer may require.
(c) The Government will retain until final completion and acceptance of all work covered by the job order, an amount estimated or approved by the Contracting Officer under paragraph (b) of this clause. The amount retained will be in accordance with the rate authorized by Congress for Naval vessel repair contracts at the time of job order award.
(d) The Contracting Officer may direct that progress payments be based on the price of the job order as adjusted as a result of change orders under the Changes clause of the Master Agreement. If the Contracting Officer does not so direct—
(1) Payments of any increases shall be made from time to time after the amount of the increase is determined under the Changes clause of the Master Agreement; and
(2) Reductions resulting from decreases shall be made for the purposes of subsequent progress payments as soon as the amounts are determined under the Changes clause of the Master Agreement.
(e) Upon completion of the work under a job order and final inspection and acceptance, and upon submission of invoices in such form and with such copies as the Contracting Officer may prescribe, the Contractor shall be paid for the price of the job order, as adjusted pursuant to the Changes clause of the Master Agreement, less any performance reserves deemed necessary by the Contracting Officer, and less the amount of any previous payments.
(f) All materials, equipment, or any other property or work in process covered by the progress payments made by the Government, upon the making of those progress payments, shall become the sole property of the Government, and are subject to the provisions of the Title clause of the Master Agreement.
As prescribed in 217.7104(a), use the following clause:
(a) If the solicitation requires an offeror to submit a bid bond, the Offeror may furnish, instead, an annual bid bond (or evidence thereof) or an annual performance and payment bond (or evidence thereof).
(b) If the solicitation does not require a bid bond, the Offeror shall not include in the price any contingency to cover the premium of such a bond.
(c) Even if the solicitation does not require bonds, the Contracting Officer may nevertheless require a performance and payment bond, in form, amount, and with a surety acceptable to the Contracting Officer. Where performance and payment bond is required, the offer price shall be increased upon the award of the job order in an amount not to exceed the premium of a corporate surety bond.
(d) If any surety upon any bond furnished in connection with a job order under this agreement fails to submit requested reports as to its financial condition or otherwise becomes unacceptable to the Government, the
As prescribed in 217.7104(a), use the following clause:
(a) The Government may, subject to the provisions of paragraph (b) of this clause, by written notice of default to the Contractor, terminate the whole or any part of a job order if the Contractor fails to—
(1) Make delivery of the supplies or to perform the services within the time specified in a job order or any extension;
(2) Make progress, so as to endanger performance of the job order; or
(3) Perform any of the other provisions of this agreement or a job order.
(b) Except for defaults of subcontractors, the Contractor shall not be liable for any excess costs if failure to perform the job order arises from causes beyond the control and without the fault or negligence of the Contractor. Examples of such causes include acts of God or of the public enemy, acts of the Government in either its sovereign or contractual capacity, fires, floods, epidemics, quarantine restrictions, strikes, freight embargoes, and unusually severe weather.
(c) If the Contractor's failure to perform is caused by the default of a subcontractor, and if such default arises out of causes beyond the control of both the Contractor and subcontractor, and without the fault or negligence of either, the Contractor shall not be liable for any excess costs for failure to perform, unless the supplies or services to be furnished by the subcontractor were obtainable from other sources in sufficient time to permit the Contractor to perform the job order within the time specified.
(d) If the Government terminates the job order in whole or in part as provided in paragraph (a) of this clause—
(1) The Government may, upon such terms and in such manner as the Contracting Officer may deem appropriate, arrange for the completion of the work so terminated, at such plant or plants, including that of the Contractor, as may be designated by the Contracting Officer.
(i) The Contractor shall continue the performance of the job order to the extent not terminated under the provisions of this clause.
(ii) If the work is to be completed at the plant, the Government may use all tools, machinery, facilities, and equipment of the Contractor determined by the Contracting Office to be necessary for that purpose.
(iii) If the cost to the Government of the work procured or completed (after adjusting such cost to exclude the effect of changes in the plans and specifications made subsequent to the date of termination) exceeds the price fixed for work under the job order (after adjusting such price on account of changes in the plans and specifications made before the date of termination), the Contractor, or the Contractor's surety, if any, shall be liable for such excess.
(2) The Government, in addition to any other rights provided in this clause, may require the Contractor to transfer title and delivery to the Government, in the manner and to the extent directed by the Contracting Officer, any completed supplies and such partially completed supplies and materials, parts, tools, dies, jigs, fixtures, plans, drawings, information and contract rights (hereinafter called “manufacturing materials”) as the Contractor has specifically produced or specifically acquired for the performance of the terminated part of the job order.
(i) The Contractor shall, upon direction of the Contracting Officer, protect and preserve property in possession of the Contractor in which the Government has an interest.
(ii) The Government shall pay to the Contractor the job order price for completed items of work delivered to and accepted by the Government, and the amount agreed upon by the Contractor and the Contracting Officer for manufacturing materials delivered to and accepted by the Government, and for the protection and preservation of property. Failure to agree shall be a dispute concerning a question of fact within the meaning of the Disputes clause.
(e) If, after notice of termination of the job order, it is determined that the Contractor was not in default, or that the default was excusable, the rights and obligations of the parties shall be the same as if the notice of termination had been issued for the convenience of the Government.
(f) If the Contractor fails to complete the performance of a job order within the time specified, or any extension, the actual damage to the Government for the delay will be difficult or impossible to determine.
(1) In lieu of actual damage, the Contractor shall pay to the Government as fixed, agreed, and liquidated damages for each calendar day of delay the amount, if any, set forth in the job order (prorated to the nearest hour for fractional days).
(2) If the Government terminates the job order, the Contractor shall be liable, in addition to the excess costs provided in paragraph (d) of this clause, for liquidated damages accruing until such time as the Government may reasonably obtain completion of the work.
(3) The Contractor shall not be charged with liquidated damages when the delay arises out of causes beyond the control and without the fault or negligence of the Contractor. Subject to the provisions of the Disputes clause of the Master Agreement, the Contracting Officer shall ascertain the facts and the extent of the delay and shall extend the time for performance when in the judgment of the Contracting Officer, the findings of fact justify an extension.
(g) The rights and remedies of the Government provided in this clause shall not be exclusive and are in addition to any other rights and remedies provided by law under this agreement.
As prescribed in 217.7104(a), use the following clause:
(a) Upon the award of a job order, the Contractor shall promptly start the work specified and shall diligently prosecute the work to completion. The Contractor shall not start work until the job order has been awarded except in the case of emergency work ordered by the Contracting Officer under the Job Orders and Compensation clause of the Master Agreement.
(b) The Government shall deliver the vessel described in the job order at the time and location specified in the job order. Upon completion of the work, the Government shall accept delivery of the vessel at the time and location specified in the job order.
(c) The Contractor shall, without charge and without specific requirement in a job order,—
(1) Make available at the plant to personnel of the vessel while in dry dock or on a marine railway, sanitary lavatory and similar facilities acceptable to the Contracting Officer;
(2) Supply and maintain suitable brows and gangways from the pier, dry dock, or marine railway to the vessel;
(3) Treat salvage, scrap or other ship's material of the Government resulting from performance of the work as items of Government-furnished property, in accordance with the Government Property (Fixed Price Contracts) clause;
(4) Perform, or pay the cost of, any repair, reconditioning or replacement made necessary as the result of the use by the Contractor of any of the vessel's machinery, equipment or fittings, including, but not limited to, winches, pumps, rigging, or pipe lines; and
(5) Furnish suitable offices, office equipment and telephones at or near the site of the work for the Government's use.
(d) The job order will state whether dock and sea trials are required to determine whether or not the Contractor has satisfactorily performed the work.
(1) If dock and sea trials are required, the vessel shall be under the control of the vessel's commander and crew.
(2) The Contractor shall not conduct dock and sea trials not specified in the job order without advance approval of the Contracting Officer. Dock and sea trials not specified in the job order shall be at the Contractor's expense and risk.
(3) The Contractor shall provide and install all fittings and appliances necessary for dock and sea trials. The Contractor shall be responsible for care, installation, and removal of instruments and apparatus furnished by the Government for use in the trials.
As prescribed at 217.7104(a), use the following clause:
(a) Upon the request of the Contracting Officer, the Contractor shall grant admission to the Contractor's facilities and access to vessel, on a non-interference basis, as necessary to perform their respective responsibilities, to a reasonable number of:
(1) Government and other Government contractor employees (in addition to those Government employees attached to the vessel); and
(2) Representatives of offerors on other contemplated Government work.
(b) All personnel granted access shall comply with Contractor rules governing personnel at its shipyard.
As prescribed in 217.7104(a), use the following clause:
(a) The Contractor shall exercise its best efforts to prevent accidents, injury, or damage to all employees, persons, and property, in and about the work, and to the vessel or part of the vessel upon which work is done.
(b)
(2) The Government does not assume any risk with respect to loss or damage compensated for by insurance or otherwise or resulting from risks with respect to which the Contractor has failed to maintain insurance, if available, as required or approved by the Contracting Officer.
(3) The Government does not assume risk of and will not pay for any costs of the following:
(i) Inspection, repair, replacement, or renewal of any defects in the vessel(s) or material and equipment due to—
(A) Defective workmanship performed by the Contractor or its subcontractors;
(B) Defective materials or equipment furnished by the Contractor or its subcontracts; or
(C) Workmanship, materials, or equipment which do not conform to the requirements of the contract, whether or not the defect is latent or whether or not the nonconformance is the result of negligence.
(ii) Loss, damage, liability, or expense caused by, resulting from, or incurred as a consequence of any delay or disruption, willful misconduct or lack of good faith by the Contractor or any of its representatives that have supervision or direction of—
(A) All or substantially all of the Contractor's business; or
(B) All or substantially all of the Contractor's operation at any one plant.
(4) As to any risk that is assumed by the Government, the Government shall be subrogated to any claim, demand or cause of action against third parties that exists in favor of the Contractor. If required by the Contracting Officer, the Contractor shall execute a formal assignment or transfer of the claim, demand, or cause of action.
(5) No party other than the Contractor shall have any right to proceed directly against the Government or join the Government as a co-defendant in any action.
(6) Notwithstanding the foregoing, the Contractor shall bear the first $5,000 of loss or damage from each occurrence or incident, the risk of which the Government would have assumed under the provisions of this paragraph (b).
(c)
(1) The Contractor's obligation to indemnify under this paragraph shall not exceed the sum of $300,000 as a consequence of any single occurrence with respect to any one vessel.
(2) The indemnity includes, without limitation, suits, actions, claims, costs, or demands of any kind, resulting from death, personal injury, or property damage occurring during the period of performance of work on the vessel or within 90 days after redelivery of the vessel. For any claim, etc., made after 90 days, the rights of the parties shall be as determined by other provisions of this agreement and by law. The indemnity does apply to death occurring after 90 days where the injury was received during the period covered by the indemnity.
(d)
(i) Casualty, accident, and liability insurance, as approved by the Contracting Officer, insuring the performance of its obligations under paragraph (c) of this clause.
(ii) Workers Compensation Insurance (or its equivalent) covering the employees engaged on the work.
(2) The Contractor shall ensure that all subcontractors engaged on the work obtain and maintain the insurance required in paragraph (d)(1) of this clause.
(3) Upon request of the Contracting Officer, the Contractor shall provide evidence of the insurance required by paragraph (d) of this clause.
(e) The Contractor shall not make any allowance in the job order price for the inclusion of any premium expense or charge for any reserve made on account of self-insurance for coverage against any risk assumed by the Government under this clause.
(f) The Contractor shall give the Contracting Officer written notice as soon as practicable after the occurrence of a loss or damage for which the Government has assumed the risk.
(1) The notice shall contain full details of the loss or damage.
(2) If a claim or suit is later filed against the Contractor as a result of the event, the Contractor shall immediately deliver to the Government every demand, notice, summons, or other process received by the Contractor or its employees or representatives.
(3) The Contractor shall cooperate with the Government and, upon request, shall assist in effecting settlements, securing and giving evidence, obtaining the attendance of witnesses, and in the conduct of suits. The Government shall reimburse the Contractor for
(4) The Contractor shall not, except at its own expense, voluntarily make any payment, assume any obligation, or incur any expense other than what would be imperative for the protection of the vessel(s) at the time of the event.
(g) In the event or loss of or damage to any vessel(s), material, or equipment which may result in a claim against the Government under the insurance provisions of this contract, the Contractor shall promptly notify the Contracting Officer of the loss or damage. The Contracting Officer may, without prejudice to any other right of the Government, either—
(1) Order the Contractor to proceed with replacement or repair, in which event the Contractor shall effect the replacement or repair;
(i) The Contractor shall submit to the Contracting Officer a request for reimbursement of the cost of the replacement or repair together with whatever supporting documentation the Contracting Officer may reasonably require, and shall identify the request as being submitted under the Insurance clause of the agreement.
(ii) If the Government determines that the risk of the loss or damage is within the scope of the risks assumed by the Government under this clause, the Government will reimburse the Contractor for the reasonable, allowable cost of the replacement or repair, plus a reasonable profit (if the work or replacement or repair was performed by the Contractor) less the deductible amount specified in paragraph (b) of this clause.
(iii) Payments by the Government to the Contractor under this clause are outside the scope of and shall not affect the pricing structure of the contract, and are additional to the compensation otherwise payable to the Contractor under this contract; or
(2) In the event the Contracting Officer decides that the loss or damage shall not be replaced or repaired, the Contracting Officer shall—
(i) Modify the contract appropriately, consistent with the reduced requirements reflected by the unreplaced or unrepaired loss or damage; or
(ii) Terminate the repair of any part or all of the vessel(s) under the Termination for Convenience of the Government clause of this agreement.
As prescribed in 217.7104(a), use the following clause:
(a) In the event any work performed or materials furnished by the contractor under the Master Agreement prove defective or deficient within 90 days from the date of redelivery of the vessel(s), the Contractor, as directed by the Contracting Officer and at its own expense, shall correct and repair the deficiency to the satisfaction of the Contracting Officer.
(b) If the Contractor or any subcontractor has a guarantee for work performed or materials furnished that exceeds the 90 day period, the Government shall be entitled to rely upon the longer guarantee until its expiration.
(c) With respect to any individual work item identified as incomplete at the time of redelivery of the vessel(s), the guarantee period shall run from the date the item is completed.
(d) If practicable, the Government shall give the Contractor an opportunity to correct the deficiency.
(1) If the Contracting Officer determines it is not practicable or is otherwise not advisable to return the vessel(s) to the Contractor, or the Contractor fails to proceed with the repairs promptly, the Contracting Officer may direct that the repairs be performed elsewhere, at the Contractor's expense.
(2) If correction and repairs are performed by other than the Contractor, the Contracting Officer may discharge the Contractor's liability by making an equitable deduction in the price of the job order.
(e) The Contractor's liability shall extend for an additional 90 day guarantee period on those defects or deficiencies that the Contractor corrected.
(f) At the option of the Contracting Officer, defects and deficiencies may be left uncorrected. In that event, the Contractor and Contracting Officer shall negotiate an equitable reduction in the job price. Failure to agree upon an equitable reduction shall constitute a dispute under the Disputes clause of this agreement.
As prescribed in 217.7104(a), use the following clause:
(a) The Contractor shall immediately discharge, or cause to be discharged, any lien or right
(b) If any lien or right
As prescribed in 217.7104(a), use the following clause:
Nothing contained in the Master Agreement or any job order shall relieve the Contractor of any obligations it may have to comply with—
(a) The Occupational Safety and Health Act of 1970 (29 U.S.C. 651,
(b) The Safety and Health Regulations for Ship Repairing (29 CFR part 1915); or
(c) Any other applicable Federal, State, and local laws, codes, ordinances, and regulations.
As prescribed in 217.7104(a), use the following clause:
(a) The Contractor shall provide, for the plant and work in process, reasonable safeguards against all hazards, including unauthorized entry, malicious mischief, theft, vandalism, and fire.
(b) The Contractor shall also provide whatever additional safeguards are necessary to protect the plant and work in process from espionage, sabotage, and enemy action.
(1) The Government shall reimburse the Contractor for that portion of the costs of the additional safeguards that is allocable to the contract in the same manner as if the Contracting Officer had issued a change order for the additional safeguards.
(2) The costs reimbursed shall not include any overhead allowance, unless the overhead is incident to the construction or installation of necessary security devices or equipment.
(c) Upon payment by the Government of the cost of any device or equipment required or approved under paragraph (b) of this clause, title shall vest in the Government.
(1) The Contractor shall comply with the instructions of the Contracting Officer concerning its identification and disposition.
(2) No such device or equipment shall become a fixture as a result of its being affixed to realty not owned by the Government.
As prescribed in 217.7203(a)(1), use the following clause:
(a) Ordering offices shall specify delivery locations and quantities in all oral or written delivery orders under this contract.
(b) The Contractor shall complete deliveries within the hours prescribed in the schedule of this contract and on the days specified by the order.
(c) Orders requiring delivery within 24 hours from Contractor receipt are governed by paragraph (e) of the Requirements clause of this contract.
(c) The Contractor shall not be required to deliver within less than ___ hours from the time the Contractor receives a delivery order.
As prescribed in 217.7203(a)(2), use the following clause:
(a) The Offeror shall identify in the clause in this solicitation entitled Place of Performance, all plants to be used for manufacturing, processing, and shipment. Failure to furnish this information with the offer may result in rejection of the offer.
(b) The Offeror shall not change any place of performance between the date set for receipt of offers and the award, except where time permits and then only after receipt of the Contracting Officer's written approval.
(c) The Contractor shall not change any place of performance after contract award without advance approval by the Contracting Officer.
As prescribed in 217.7203(a)(3), use the following clause:
(a) The Contractor shall ensure that all supplies delivered under this contract, and all plant facilities, machinery, equipment,
(b) The Government reserves the right to inspect and test at any reasonable times all plant facilities, machinery, equipment, and parts used in the production, processing, handling, storage, transportation, or delivery of supplies under this contract.
(c) The Contracting Officer or representative shall notify the Contractor in writing of any failure to meet the sanitary standards (including bacteriological requirements) prescribed by this contract. If the Contractor does not correct the failure within three days from receipt of notice, the Contracting Officer may—
(1) Terminate for default all or part of this contract; or
(2) Suspend work (wholly or partially) under the contract for ten days or any longer period considered necessary to allow correction of the failure.
(d) The suspension does not extend the life of this contract and shall not be considered sufficient reason for extending the delivery time.
(e) During the suspension period, the Government reserves the right to acquire similar supplies from other sources, on whatever terms and in whatever manner the Contracting Officer considers appropriate. The Contractor shall be liable to the Government for any excess costs for those similar supplies.
(f) If the Contractor does not correct the failure within the suspension period, the Contracting Officer may terminate for default the unexpired portion of this contract without allowing additional time for correction, notwithstanding paragraph (a)(2) of the Default (Fixed-Price Supply and Service) clause of this contract.
As prescribed in 217.7203(b)(1), use the following clause:
(a) The Government reserves the right to examine and test all products to be delivered under the contract. Examination and testing of dairy products shall be in accordance with the Veterinary/Medical Wholesomeness Assurance Program for Fresh and Cultured Dairy Products and Frozen Desserts (AR 40-70; NAVSUPINST 4355.6; AFR 161-46; and MCO 10110.44).
(b)
(2) Samples selected at origin shall be furnished at the Contractor's expense, and shall be considered representative of all the products delivered to the Government from the lot sampled.
(3) Samples selected at destination shall be furnished at Government expense, and shall be considered representative of all of that type product delivered to the Government on the date sampled.
(4) When samples are selected from containers of 1/2 gallon size or smaller, the entire contents of the container shall constitute the sample. When samples are selected from containers larger than 1/2 gallon, a 1/2 pint sample shall be taken for laboratory analysis.
(c)
(d)
(2) The Contracting Officer may suspend work under this contract for up to ten days when three out of the last five consecutive lots tested are nonconforming for the same specification requirement, or when any deficiency causes the production of a product which is considered to be a health hazard.
(e)
(2) The Contractor shall use the suspension period to correct the deficiencies. The Contractor shall notify the Government when corrective action is complete.
(3) The Contracting Officer shall lift the suspension only after the Government has verified the corrective action and notified the Contractor in writing.
(4) The suspension does not extend the life of this contract and shall not be considered sufficient reason for extending the delivery time.
(5) If the Contractor does not correct the failure within the suspension period, the Contracting Officer may terminate for default the unexpired portion of this contract without allowing additional time for correction, notwithstanding paragraph (a)(2) of the Default (Fixed-Price Supply and Service) clause of this contract.
As prescribed in 217.7203(b)(2), use the following clause:
(a) When the Contractor is required under the Examination and Testing clause of the contract to reimburse the Government for deficiencies in the amount of butterfat, milk solids non-fat, or total solids, reimbursement shall be determined by the following formula—
(1)
(2)
(3)
(b) The Government will not assess amounts totaling $25 or less during a monthly accounting period. Monthly periods begin on the first day of the contract period and on the same day of each succeeding month.
(c) The butterfat, milk solids non-fat, and total solids content of one type of product shall not be averaged with or offset against the content of another type of product, and the content of products delivered in any one monthly period will not be averaged with or offset against the content of products delivered in any other monthly period.
(d) The Contractor shall identify the tare weights of all containers on the shipping documents, and furnish a copy to the Government inspector at destination. The tare weight of dispenser containers shall include all parts of the container delivered as a unit, including lids, tubes, and seals. If different types of containers with different tares are included in a single delivery, the Contractor shall furnish the tare weight and identifying characteristics of each type of container.
(e) The Government shall inspect a representative sample of the line item. If volume and net weight shortages are found, the Government will adjust the entire quantity of the line item delivered on the day the shortage is discovered. For the purpose of determining net weight, the following weight factors apply:
(f) Contractor reimbursement for deficient supplies does not prejudice the Government's right to terminate for default or to pursue any other remedy under this contract or as provided by law.
As prescribed in 217.7203(a)(4), use the following clause:
(a) The Contractor may use a code to comply with the requirement stated in the schedule or specifications of this contract for showing a date on the labels of delivered items.
(b) Before using a code, the Contractor shall—
(1) Provide a written explanation to the Contracting Officer; and
(2) Obtain the Contracting Officer's approval in writing.
(c) The Contractor shall also obtain the Contracting Officer's written approval before making any changes in the code symbols, system, or explanation.
As prescribed in 217.7203(a)(5), use the following clause:
Commercial markings are acceptable, notwithstanding any specification references to MIL-STD-129.
As prescribed in 217.7203(a)(6), use the following clause:
(a) The Contractor shall—
(1) Maintain all reusable containers and equipment in a sanitary condition and in a good state of repair and working order; and
(2) Remove all empty, reusable containers from Government premises at the time of each delivery, unless the Contracting Officer grants permission in writing for less frequent removal.
(b) The Government shall not be liable for any damage to, or loss or destruction of, containers and equipment furnished by the Contractor.
As prescribed in 217.7203(b)(3), use the following clause:
(a) The Contractor shall ensure that dispenser containers and filling equipment used in the performance of this contract, and any Contractor-furnished refrigerated bulk milk dispenser cabinets, comply with MIL-STD-175, Minimum Sanitary Standards for the Equipment and Methods for Handling of Milk and Milk Products in Bulk Milk Dispensing Operations.
(b) The Contractor shall install, service, and maintain any Contractor-furnished bulk milk dispenser cabinets to the Contracting Officer's satisfaction. The Contractor has sole responsibility for the supply, installation, maintenance, and removal of the cabinets, including labor and material costs, and for any damage to, or loss or destruction of, such cabinets.
(c) When the Contractor fails to furnish milk dispenser cabinets or milk dispenser containers as required in the schedule, or does not properly service, maintain, and repair such dispenser cabinets, so that milk cannot be dispensed as needed by the Government, the Contractor shall, for as long as such conditions exist, deliver a sufficient quantity of milk in half-pint containers to satisfy orders for milk dispenser containers. The price per gallon for milk dispenser containers shall apply.
(d) When any loss of contents of a dispenser container occurs (including loss due to contamination, spoilage, or leakage) as a result of functional failure of the dispenser cabinet or dispenser containers, the Contractor shall immediately replace the lost contents without cost to the Government, unless such functional failure was due to a general power failure at the Government installation.
As prescribed in 217.7303, use the following provision:
(a) The Government is required under 10 U.S.C. 2384 to obtain certain information on
(b) The apparently successful Offeror agrees to complete and submit the following table before award:
As prescribed in 217.7406(b), use the following clause:
(a) A ___
(b) The schedule for definitizing this contract is as follows (
(c) If agreement on a definitive contract action to supersede this undefinitized contract action is not reached by the target date in paragraph (b) of this clause, or within any extension of it granted by the Contracting Officer, the Contracting Officer may, with the approval of the head of the contracting activity, determine a reasonable price or fee in accordance with subpart 15.4 and part 31 of the FAR, subject to Contractor appeal as provided in the Disputes clause. In any event, the Contractor shall proceed with completion of the contract, subject only to the Limitation of Government Liability clause.
(1) After the Contracting Officer's determination of price or fee, the contract shall be governed by—
(i) All clauses required by the FAR on the date of execution of this underfinitized contract action for either fixed-price or cost-reimbursement contracts, as determined by the Contracting Officer under this paragraph (c);
(ii) All clauses required by law as of the date of the Contracting Officer's determination; and
(iii) Any other clauses, terms, and conditions mutually agreed upon.
(2) To the extent consistent with paragraph (c)(1) of this clause, all clauses, terms, and conditions included in this undefinitized contract action shall continue in effect, except those that by their nature apply only to an undefinitized contract action.
(d) The definitive contract resulting from this undefinitized contract action will include a negotiated __________
As prescribed in 217.7702, use a clause substantially as follows:
(a)
As used in this clause—
(1)
(i) Within the general scope of the contract;
(ii) Not covered by the line item(s) for the basic work under the contract; and
(iii) Necessary in order to satisfactorily complete the contract.
(2)
(b) The Contractor and Administrative Contracting Officer shall mutually agree to procedures for Government administration and Contractor performance of over and above work requests. If the parties cannot agree upon the procedures, the Administrative Contracting Officer has the unilateral right to direct the over and above work procedures to be followed. These procedures shall, as a minimum, cover—
(1) The format, content, and submission of work requests by the Contractor. Work requests shall contain data on the type of discrepancy disclosed, the specific location of the discrepancy, and the estimated labor hours and material required to correct the discrepancy. Data shall be sufficient to satisfy contract requirements and obtain the authorization of the Contracting Officer to perform the proposed work;
(2) Government review, verification, and authorization of the work; and
(3) Proposal pricing, submission, negotiation, and definitization.
(c) Upon discovery of the need for over and above work, the Contractor shall prepare and furnish to the Government a work request in accordance with the agreed-to procedures.
(d) The Government shall—
(1) Promptly review the work request;
(2) Verify that the proposed work is required and not covered under the basic contract line item(s);
(3) Verify that the proposed corrective action is appropriate; and
(4) Authorize over and above work as necessary.
(e) The Contractor shall promptly submit to the Contracting Officer, a proposal for the over and above work. The Government and Contractor will then negotiate a settlement for the over and above work. Contract modifications will be executed to definitize all over and above work.
(f) Failure to agree on the price of over and above work shall be a dispute within the meaning of the Disputes clause of this contract.
As prescribed in 219.708(b)(1)(A), use the following clause:
This clause supplements the Federal Acquisition Regulation 52.219-9, Small, Small Disadvantaged and Women-Owned Small Business Subcontracting Plan, clause of this contract.
(a)
(b) Except for company or division-wide commercial items subcontracting plans, the term
(c) Work under the contract or its subcontracts shall be credited toward meeting the small disadvantaged business concern goal required by paragraph (d) of the FAR 52.219-9 clause when:
(1) It is performed on Indian lands or in joint venture with an Indian tribe or a tribally-owned corporation, and
(2) It meets the requirements of 10 U.S.C. 2323a.
(d) Subcontracts awarded to workshops approved by the Committee for Purchase from People Who Are Blind or Severely Disabled (41 U.S.C. 46-48), may be counted toward the Contractor's small business subcontracting goal.
(e) A mentor firm, under the Pilot Mentor-Protege Program established under Section 831 of Pub. L. 101-510, as amended, may count toward its small disadvantaged business goal, subcontracts awarded—
(1) Protege firms which are qualified organizations employing the severely handicapped; and
(2) Former protege firms that meet the criteria in Section 831(g)(4) of Pub. L. 101-510.
(f) The master plan approval referred to in paragraph (f) of the FAR 52.219-9 clause is approval by the Contractor's cognizant contract administration activity.
(g) In those subcontracting plans which specifically identify small, small disadvantaged, and women-owned small businesses, the Contractor 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.
As prescribed in 219.708(b)(1)(B), use the following clause:
(a)
(b) The Offeror's comprehensive small business subcontracting plan and its successors, which are authorized by and approved under the test program of Section 834 of Pub. L. 101-189, as amended, shall be included in and made a part of the resultant contract. Upon expulsion from the test program or expiration of the test program, the Contractor shall negotiate an individual subcontracting plan for all future contracts that meet the requirements of Section 211 of Pub. L. 95-507.
(c) The Contractor shall submit Standard Form (SF) 295, Summary Subcontract Report, in accordance with the instructions on the form, except—
(1) One copy of the SF 295 and attachments shall be submitted to Director, Small and Disadvantaged Business Utilization, Office of the Deputy Under Secretary of Defense (International and Commercial Programs), 3061 Defense Pentagon, Room 2A338, Washington, DC 20301-3061; and
(2) Item 14, Remarks, shall be completed to include semi-annual cumulative—
(i) Small business, small disadvantaged business, and women-owned small business goals; and
(ii) Small business and small disadvantaged business goals, actual accomplishments, and percentages for each of the two designated industry categories.
(d) The failure of the Contractor or subcontractor to comply in good faith with (1) the clause of this contract entitled “Utilization of Small, Small Disadvantaged and Women-Owned Small Business Concerns,” or (2) an approved plan required by this clause, shall be a material breach of the contract.
As prescribed in 219.811-3(1), use the following clause:
(a) This contract is issued as a direct award between the contracting office and the 8(a) Contractor pursuant to the Partnership Agreement dated February 1, 2002, between the Small Business Administration (SBA) and the Department of Defense. Accordingly, the SBA, even if not identified in Section A of this contract, is the prime contractor and retains responsibility for 8(a) certification, for 8(a) eligibility determinations and related issues, and for providing counseling and assistance to the 8(a) Contractor under the 8(a) Program. The cognizant SBA district office is:
(b) The contracting office is responsible for administering the contract and for taking any action on behalf of the Government under the terms and conditions of the contract; provided that the contracting office shall give advance notice to the SBA before it issues a final notice terminating performance, either in whole or in part, under the contract. The contracting office also shall coordinate with the SBA prior to processing any novation agreement. The contracting office may assign contract administration
(c) The 8(a) Contractor agrees that—
(1) It will notify the Contracting Officer, simultaneous with its notification to the SBA (as required by SBA's 8(a) regulations at 13 CFR 124.308), when the owner or owners upon whom 8(a) eligibility is based plan to relinquish ownership or control of the concern. Consistent with Section 407 of Pub. L. 100-656, transfer of ownership or control shall result in termination of the contract for convenience, unless the SBA waives the requirement for termination prior to the actual relinquishing of ownership and control; and
(2) It will not subcontract the performance of any of the requirements of this contract without the prior written approval of the SBA and the Contracting Officer.
As prescribed in 219.811-3(2), substitute the following paragraph (c) for paragraph (c) of the clause at FAR 52.219-18:
(c) Any award resulting from this solicitation will be made directly by the Contracting Officer to the successful 8(a) offeror selected through the evaluation criteria set forth in this solicitation.
As prescribed in 219.811-3 (3), use the following clause:
The Contractor shall not begin performance under this purchase order until 2 working days have passed from the date of its receipt. Unless the Contractor receives notification from the Small Business Administration thatit is ineligible for this 8(a) award, or otherwise receives instructions from the Contracting Officer, performance under this purchase order may begin on the third working day following receipt of the purchase order. If a determination of ineligibility is issued within the 2-day period, the purchase order shall be considered canceled.
As prescribed in 222.7004, use the following clause:
(a) The Contractor shall employ, for the purpose of performing that portion of the contract work in ____, individuals who are residents thereof 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.
(b) The Contractor shall insert the substance of this clause, including this paragraph (b), in each subcontract awarded under this contract.
As prescribed in 222.7102, use the following clause:
(a) The Contractor shall give Government employees, who have been or will be adversely affected by the closure of the military installation where this contract will be performed, the right of first refusal for employment openings under the contract. This right applies to positions for which the employee is qualified, if consistent with post-Government employment conflict of interest standards.
(b) Government personnel seeking preference under this clause shall provide the Contractor with evidence from the Government personnel office.
As prescribed in 222.7201(a), use the following clause:
(a) The Contractor shall comply with all—
(1) Local laws, regulations, and labor union agreements governing work hours; and
(2) Labor regulations including collective bargaining agreements, workers’ compensation, working conditions, fringe benefits, and labor standards or labor contract matters.
(b) The Contractor indemnifies and holds harmless the United States Government from all claims arising out of the requirements of this clause. This indemnity includes the Contractor's obligation to handle and settle, without cost to the United States Government, any claims or litigation concerning allegations that the Contractor or the United States Government, or both, have not fully complied with local labor laws or regulations relating to the performance of work required by this contract.
(c) Notwithstanding paragraph (b) of this clause, consistent with paragraphs 31.205-15(a) and 31.205-47(d) of the Federal Acquisition Regulation, the Contractor will be reimbursed for the costs of all fines, penalties, and reasonable litigation expenses incurred as a result of compliance with specific contract terms and conditions or written instructions from the Contracting officer.
As prescribed in 222.7201(b), use the following clause:
Prior to the date set for commencement of work and services under this contract, the Contractor shall obtain the prescribed permit from the Inspectorate of Labor having jurisdiction over the work site, in accordance with Article 5g of Italian Law Number 1369, dated October 23, 1960. The Contractor shall ensure that a copy of the permit is available at all reasonable times for inspection by the Contracting Officer or an authorized representative. Failure to obtain such permit may result in termination of the contract for the convenience of the United States Government, at no cost to the United States Government.
As prescribed in 222.7201(c), use the following clause:
(a) The Contractor shall comply with all Spanish Government social security laws and regulations. Within 30 calendar days after the start of contract performance, the Contractor shall ensure that copies of the documents identified in paragraph (a)(1) through (a)(5) of this clause are available at all reasonable times for inspection by the Contracting Officer or an authorized representative. The Contractor shall retain the records in accordance with the Audit and Records clause of this contract.
(1) TC1—Certificate of Social Security Payments;
(2) TC2—List of Employees;
(3) TC2/1—Certificate of Social Security Payments for Trainees;
(4) Nominal (pay statements) signed by both the employee and the Contractor; and
(5) Informa de Situacion de Empressa (Report of the Condition of the Enterprise) from the Ministerio de Trabajo y S.S., Tesoreria General de la Seguridad Social (annotated with the pertinent contract number(s) next to the employee's name).
(b) All TC1's, TC2's, and TC2/1's shall contain a representation that they have been paid by either the Social Security Administration office or the Contractor's bank or savings institution. Failure by the Contractor to comply with the requirements of this clause may result in termination of the contract under the clause of the contract entitled “Default.”
As prescribed in 222.7303, use the following clause:
The work required by this contract shall not be performed by 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)). This prohibition does not apply to the performance of work by 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.
As prescribed in 223.303, use the following clause:
(a) “Hazardous material,” as used in this clause, is defined in the Hazardous Material Identification and Material Safety Data clause of this contract.
(b) The Contractor shall label the item package (unit container) of any hazardous material to be delivered under this contract in accordance with the Hazard Communication Standard (29 CFR 1910.1200
(1) Federal Insecticide, Fungicide and Rodenticide Act;
(2) Federal Food, Drug and Cosmetics Act;
(3) Consumer Product Safety Act;
(4) Federal Hazardous Substances Act; or
(5) Federal Alcohol Administration Act.
(c) The Offeror shall list which hazardous material listed in the Hazardous Material Identification and Material Safety Data clause of this contract will be labelled in accordance with one of the Acts in paragraphs (b) (1) through (5) of this clause instead of the Hazard Communication Standard. Any hazardous material not listed will be interpreted to mean that a label is required in accordance with the Hazard Communication Standard.
(d) The apparently successful Offeror agrees to submit, before award, a copy of the hazard warning label for all hazardous materials not listed in paragraph (c) of this clause. The Offeror shall submit the label with the Material Safety Data Sheet being furnished under the Hazardous Material Identification and Material Safety Data clause of this contract.
(e) The Contractor shall also comply with MIL-STD-129, Marking for Shipment and Storage (including revisions adopted during the term of this contract).
As prescribed in 223.370-5, use the following clause:
(a)
(1) Means liquid and solid propellants and explosives, pyrotechnics, incendiaries and smokes in the following forms:
(i) Bulk,
(ii) Ammunition;
(iii) Rockets;
(iv) Missiles;
(v) Warheads;
(vi) Devices; and
(vii) Components of (i) through (vi), except for wholly inert items.
(2) This definition does not include the following, unless the Contractor is using or incorporating these materials for initiation, propulsion, or detonation as an integral or component part of an explosive, an ammunition or explosive end item, or of a weapon system—
(i) Inert components containing no explosives, propellants, or pyrotechnics;
(ii) Flammable liquids;
(iii) Acids;
(iv) Oxidizers;
(v) Powdered metals; or
(vi) Other materials having fire or explosive characteristics.
(b)
(2) The Contractor shall allow the Government access to the Contractor's facilities, personnel, and safety program documentation. The Contractor shall allow authorized Government representatives to evaluate safety programs, implementation, and facilities.
(c)
(2) The Contractor has 30 days from the date of notification by the Contracting Officer to correct the noncompliance and inform the Contracting Officer of the actions taken. The Contracting Officer may direct a different time period for the correction of noncompliances.
(3) If the Contractor refuses or fails to correct noncompliances within the time period specified by the Contracting Officer, the
(4) The Contracting Officer may remove Government personnel at any time the Contractor is in noncompliance with any safety requirement of this clause.
(5) If the direction to cease work or the removal of Government personnel results in increased costs to the Contractor, the Contractor shall not be entitled to an adjustment in the contract price or a change in the delivery or performance schedule unless the Contracting Officer later determines that the Contractor had in fact complied with the manual or schedule provisions. If the Contractor is entitled to an equitable adjustment, it shall be made in accordance with the Changes clause of this contract.
(d)
(1) Notify the Contracting Officer immediately;
(2) Conduct an investigation in accordance with other provisions of this contract or as required by the Contracting Officer; and
(3) Submit a written report to the Contracting Officer.
(e)
(i) The Contractor's personnel and property;
(ii) The Government's personnel and property; or
(iii) The general public.
(2) Nothing in this clause shall relieve the Contractor of its responsibility for complying with applicable Federal, State, and local laws, ordinances, codes, and regulations (including those requiring the obtaining of licenses and permits) in connection with the performance of this contract.
(f)
(2) If the Government acts or fails to act in surveillance or enforcement of the safety requirements of this contract, this does not impose or add to any liability of the Government.
(g)
(i) The clause shall include a provision allowing authorized Government safety representatives to evaluate subcontractor safety programs, implementation, and facilities as the Government determines necessary.
(ii)
(2) The Contractor agrees to ensure that the subcontractor complies with all contract safety requirements. The Contractor will determine the best method for verifying the adequacy of the subcontractor's compliance.
(3) The Contractor shall ensure that the subcontractor understands and agrees to the Government's right to access to the subcontractor's facilities, personnel, and safety program documentation to perform safety surveys. The Government performs these safety surveys of subcontractor facilities solely to prevent the occurrence of any mishap which would endanger the safety of DoD personnel or otherwise adversely impact upon the Government's contractual interests.
(4) The Contractor shall notify the Contracting Officer or authorized representative before issuing any subcontract when it involves ammunition or explosives. If the proposed subcontract represents a change in the place of performance, the Contractor shall request approval for such change in accordance with the clause of this contract entitled “Change in Place of Performance—Ammunition and Explosives”.
As prescribed in 223.370-5, use the following clause:
(a) The Offeror shall identify, in the “Place of Performance” provision of this solicitation, the place of performance of all ammunition and explosives work covered by the Safety Precautions for Ammunition and Explosives clause of this solicitation. Failure to furnish this information with the offer may result in rejection of the offer.
(b) The Offeror agrees not to change the place of performance of any portion of the offer covered by the Safety Precautions for Ammunition and Explosives clause contained in this solicitation after the date set for receipt of offers without the written approval of the Contracting Officer. The Contracting Officer shall grant approval only if there is enough time for the Government to perform the necessary safety reviews on the new proposed place of performance.
(c) If a contract results from this offer, the Contractor agrees not to change any place of performance previously cited without the advance written approval of the Contracting Officer.
As prescribed in 223.570-4, use the following clause:
(a)
(2)
(b) The Contractor agrees to institute and maintain a program for achieving the objective of a drug-free work force. While this clause defines criteria for such a program, contractors are encouraged to implement alternative approaches comparable to the criteria in paragraph (c) that are designed to achieve the objectives of this clause.
(c) Contractor programs shall include the following, or appropriate alternatives:
(1) Employee assistance programs emphasizing high level direction, education, counseling, rehabilitation, and coordination with available community resources;
(2) Supervisory training to assist in identifying and addressing illegal drug use by Contractor employees;
(3) Provision for self-referrals as well as supervisory referrals to treatment with maximum respect for individual confidentiality consistent with safety and security issues;
(4) Provision for identifying illegal drug users, including testing on a controlled and carefully monitored basis. Employee drug testing programs shall be established taking account of the following:
(i) The Contractor shall establish a program that provides for testing for the use of illegal drugs by employees in sensitive positions. The extent of and criteria for such testing shall be determined by the Contractor based on considerations that include the nature of the work being performed under the contract, the employee's duties, the efficient use of Contractor resources, and the risks to health, safety, or national security that could result from the failure of an employee adequately to discharge his or her position.
(ii) In addition, the Contractor may establish a program for employee drug testing—
(A) When there is a reasonable suspicion that an employee uses illegal drugs; or
(B) When an employee has been involved in an accident or unsafe practice;
(C) As part of or as a follow-up to counseling or rehabilitation for illegal drug use;
(D) As part of a voluntary employee drug testing program.
(iii) The Contractor may establish a program to test applicants for employment for illegal drug use.
(iv) For the purpose of administering this clause, testing for illegal drugs may be limited to those substances for which testing is prescribed by section 2.1 of subpart B of the “Mandatory Guidelines for Federal Workplace Drug Testing Programs” (53 FR 11980 (April 11 1988)), issued by the Department of Health and Human Services.
(d) Contractors shall adopt appropriate personnel procedures to deal with employees who are found to be using drugs illegally. Contractors shall not allow any employee to remain on duty or perform in a sensitive position who is found to use illegal drugs until such times as the Contractor, in accordance with procedures established by the Contractor, determines that the employee may perform in such a position.
(e) The provisions of this clause pertaining to drug testing program shall not apply to the extent they are inconsistent with state or local law, or with an existing collective bargaining agreement; provided that with respect to the latter, the Contractor agrees that those issues that are in conflict will be a subject of negotiation at the next collective bargaining session.
As prescribed in 223.7103(a), use the following clause:
(a)
As used in this clause—
(1)
(2)
(i) Materials referred to in section 101(14) of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) of 1980 (42 U.S.C. 9601(14)) and materials designated under section 102 of CERCLA (42 U.S.C. 9602) (40 CFR part 302);
(ii) Materials that are of an explosive, flammable, or pyrotechnic nature; or
(iii) Materials otherwise identified by the Secretary of Defense as specified in DoD regulations.
(b) In accordance with 10 U.S.C. 2692, the Contractor is prohibited from storing or disposing of non-DoD-owned toxic or hazardous materials on a DoD installation, except to the extent authorized by a statutory exception to 10 U.S.C. 2692 or as authorized by the Secretary of Defense or his designee.
(c) With respect to treatment or disposal authorized pursuant to 10 U.S.C. 2692(b)(9), and notwithstanding any other provision of the contract, the Contractor assumes all financial and environmental responsibility and liability resulting from any treatment or disposal of non-DoD-owned toxic or hazardous materials on a military installation. The Contractor shall indemnify, defend, and hold the Government harmless for all costs, liability, or penalties resulting from the Contractor's treatment or disposal of non-DoD-owned toxic or hazardous materials on a military installation.
(d) The Contractor shall include this clause, including this paragraph (d), in each subcontract which requires, may require, or permits a subcontractor to treat or dispose of non-DoD-owned toxic or hazardous materials as defined in this clause.
As prescribed in 223.7203, use the following clause:
(a) Definition.
“Arms, ammunition, and explosives (AA&E),” as used in this clause, means those items within the scope (chapter 1, paragraph B) of DoD 5100.76-M, Physical Security of Sensitive Conventional Arms, Ammunition, and Explosives.
(b) The requirements of DoD 5100.76-M apply to the following items of AA&E being developed, produced, manufactured, or purchased for the Government, or provided to the Contractor as Government-furnished property under this contract:
(c) The Contractor shall comply with the requirements of DoD 5100.76-M, as specified in the statement of work. The edition of DoD 5100.76-M in effect on the date of issuance of the solicitation for this contract shall apply.
(d) The Contractor shall allow representatives of the Defense Security Service (DSS), and representatives of other appropriate offices of the Government, access at all reasonable times into its facilities and those of its subcontractors, for the purpose of performing surveys, inspections, and investigations necessary to review compliance with the physical security standards applicable to this contract.
(e) The Contractor shall notify the cognizant DSS field office of any subcontract involving AA&E within 10 days after award of the subcontract.
(f) The Contractor shall ensure that the requirements of this clause are included in all subcontracts, at every tier—
(1) For the development, production, manufacture, or purchase of AA&E; or
(2) When AA&E will be provided to the subcontractor as Government-furnished property.
(g) Nothing in this clause shall relieve the Contractor of its responsibility for complying with applicable Federal, state, and
As prescribed in 225.1101(1), use the following provision:
(a)
(b)
(c)
(i) Each end product, except those listed in paragraphs (c) (2) or (3) of this provision, is a domestic end product; and
(ii) Components of unknown origin are considered to have been mined, produced, or manufactured outside the United States or a qualifying country.
(2) The Offeror certifies that the following end products are qualifying country end products:
(3) The Offeror certifies that the following end products are nonqualifying country end products:
As prescribed in 225.1101(2), use the following clause:
(a)
As used in this clause—
(1)
(2)
(i) An unmanufactured end product that has been mined or produced in the United States; or
(ii) An end product manufactured in the United States if the cost of its qualifying country components and its components that are mined, produced, or manufactured in the United States exceeds 50 percent of the cost of all its components. The cost of components shall include transportation costs to the place of incorporation into the end product and U.S. duty (whether or not a duty-free entry certificate may be issued). A component shall be considered to have been mined, produced, or manufactured in the United States (regardless of its source in fact) if the end product in which it is incorporated is manufactured in the United States and the component is of a class or kind—
(A) Determined to be not mined, produced, or manufactured in the United States in sufficient and reasonably available commercial quantities and of a satisfactory quality; or
(B) That the Secretary concerned determines would be inconsistent with the public interest to apply the restrictions of the Buy American Act.
(3)
(4)
(5)
(6)
(7)
(i) An unmanufactured end product mined or produced in a qualifying country; or
(ii) An end product manufactured in a qualifying country if the cost of the components mined, produced, or manufactured in the qualifying country and its components mined, produced, or manufactured in the United States exceeds 50 percent of the cost of all its components.
(b) This clause implements the Buy American Act (41 U.S.C. Section 10a-d) in a manner that will encourage a favorable international balance of payments by providing a preference to domestic end products over other end products, except for end products which are qualifying country end products.
(c) The Contractor agrees that it will deliver only domestic end products unless, in its offer, it specified delivery of other end products in the Buy American Act—Balance of Payments Program Certificate provision of the solicitation. An offer certifying that a qualifying country end product will be supplied requires the Contractor to deliver a qualifying country end product or a domestic end product.
(d) The offered price of qualifying country end products should not include custom fees or duty. The offered price of nonqualifying country end products, and products manufactured in the United States that contain nonqualifying country components, must include all applicable duty. The award price will not include duty for end products or components that are to be accorded duty-free entry. Generally, when the Buy American Act is applicable, each nonqualifying country offer is adjusted for the purpose of evaluation by adding 50 percent of the offer, inclusive of duty.
As prescribed in 225.1101(3), use the following clause:
Subject to the restrictions in section 225.872 of the Defense FAR Supplement, the Contractor shall not preclude qualifying country sources and U.S. sources from competing for subcontracts under this contract.
As prescribed in 225.1101(4), use the following provision:
(a) Does the offeror propose to furnish—
(1) A domestic end product with nonqualifying country components for which the offeror requests duty-free entry; or
(2) A foreign end product consisting of end items, components, or material of foreign origin other than those for which duty-free entry is to be accorded pursuant to the Duty-Free Entry—Qualifying Country Supplies (End Products and Components) clause or, if applicable, the Duty-Free Entry—Eligible End Products clause of this solicitation?
Yes () No ()
(b) If the answer in paragraph (a) is yes, answer the following questions:
(1) Are such foreign supplies now in the United States?
Yes () No ()
(2) Has the duty on such foreign supplies been paid?
Yes () No ()
(3) If the answer to paragraph (b)(2) is no, what amount is included in the offer to cover such duty? $____
(c) If the duty has not been paid, the Government may elect to make award on a duty-free basis. If so, the offered price will be reduced in the contract award by the amount specified in paragraph (b)(3). The Offeror agrees to identify, at the request of the Contracting Officer, the foreign supplies which are subject to duty-free entry.
(a) Does the offeror propose to furnish a U.S. made end product with nonqualifying country components for which the offeror requests duty-free entry?
Yes () No ()
As prescribed in 225.1103(1), use the following clause:
(a) This clause applies only if the Contractor is—
(1) A concern incorporated in the United States (including a subsidiary that is incorporated in the United States, even if the parent corporation is not incorporated in the United States); or
(2) An unincorporated concern having its principal place of business in the United States.
(b) On each invoice, voucher, or other request for payment under this contract, the Contractor shall identify that part of the requested payment that represents estimated expenditures in the United States. The identification—
(1) May be expressed either as dollar amounts or as percentages of the total amount of the request for payment;
(2) Should be based on reasonable estimates; and
(3) Shall state the full amount of the payment requested, subdivided into the following categories:
(i) U.S. products—expenditures for material and equipment manufactured or produced in the United States, including end products, components, or construction material, but excluding transportation;
(ii) U.S. services—expenditures for services performed in the United States, including all charges for overhead, other indirect costs, and profit under construction or service contracts;
(iii) Transportation on U.S. carriers—expenditures for transportation furnished by U.S. flag, ocean, surface, and air carriers; and
(iv) Expenditures not identified under paragraphs (b)(3)(i) through (iii) of this clause.
(c) Nothing in this clause requires the establishment or maintenance of detailed accounting records or gives the U.S. Government any right to audit the Contractor's books or records.
As prescribed in 225.1101(5), use the following provision:
(a)
(b)
(c)
(i) Each end product, except the end products listed in paragraph (c)(2) of this provision, is a domestic end product; and
(ii) Components of unknown origin are considered to have been mined, produced, or manufactured outside the United States or a qualifying country.
(2) The Offeror must identify all end products that are not domestic end products.
(i) The Offeror certifies that the following supplies qualify as “U.S. made end products” but do not meet the definition of “domestic end product”:
(ii) The Offeror certifies that the following supplies are qualifying country end products:
(iii) The Offeror certifies that the following supplies qualify as designated country end products:
(iv) The Offeror certifies that the following supplies qualify as Caribbean Basin country end products:
(v) The Offeror certifies that the following supplies qualify as NAFTA country end products:
(vi) The following supplies are other nondesignated country end products.
As prescribed in 225.1101(6), use the following clause:
(a)
(1)
(2)
(i) Means an article that—
(A) Is wholly the growth, product, or manufacture of a Caribbean Basin country; or
(B) In the case of an article that consists in whole or in part of materials from another country or instrumentality, has been substantially transformed in a Caribbean Basin country into a new and different article of commerce with a name, character, or use distinct from that of the article or articles from which it was so transformed. The term refers to a product offered for purchase under a supply contract, but for purposes of calculating the value of the end product includes services (except transportation services) incidental to its supply, provided that the value of those incidental services does not exceed the value of the product itself; and
(ii) Excludes products, other than petroleum and any product derived from petroleum, that are not granted duty-free treatment under the Caribbean Basin Economic Recovery Act (19 U.S.C. 2703(b)). These exclusions presently consist of—
(A) Textiles, apparel articles, footwear, handbags, luggage, flat goods, work gloves, leather wearing apparel, and handloomed, handmade, or folklore articles that are not granted duty-free status in the Harmonized Tariff Schedule of the United States (HTSUS);
(B) Tuna, prepared or preserved in any manner in airtight containers; and
(C) Watches and watch parts (including cases, bracelets, and straps) of whatever type including, but not limited to, mechanical, quartz digital, or quartz analog, if such watches or watch parts contain any material that is the product of any country to which the HTSUS column 2 rates of duty (HTSUS General Note 3(b)) apply.
(3)
(4)
(5)
(i) Is wholly the growth, product, or manufacture of the designated country; or
(ii) In the case of an article that consists in whole or in part of materials from another country or instrumentality, has been substantially transformed in a designated country into a new and different article of commerce with a name, character, or use distinct from that of the article or articles from which it was so transformed. The term refers to a product offered for purchase under a supply contract, but for purposes of calculating the value of the end product includes services (except transportation services) incidental to its supply, provided that the value of those incidental services does not exceed the value of the product itself.
(6)
(i) An unmanufactured end product that has been mined or produced in the United States; or
(ii) An end product manufactured in the United States if the cost of its qualifying country components and its components that are mined, produced, or manufactured in the United States exceeds 50 percent of the cost of all its components. The cost of components shall include transportation costs to the place of incorporation into the end product and U.S. duty (whether or not a duty-free entry certification may be issued). A component shall be considered to have been mined, produced, or manufactured in the United States (regardless of its source in fact) if the end product in which it is incorporated is manufactured in the United States and the component is of a class or kind—
(A) Determined to be not mined, produced, or manufactured in the United States in sufficient and reasonably available commercial quantities and of a satisfactory quality; or
(B) That the Secretary concerned determines would be inconsistent with the public interest to apply the restrictions of the Buy American Act.
(7)
(8)
(i) Is wholly the growth, product, or manufacture of the NAFTA country; or
(ii) In the case of an article that consists in whole or in part of materials from another country or instrumentality, has been substantially transformed in a NAFTA country into a new and different article of commerce with a name, character, or use distinct from that of the article or articles from which it was so transformed. The term refers to a product offered for purchase under a supply contract, but for purposes of calculating the value of the end product includes services (except transportation services) incidental to its supply, provided that the value of those incidental services does not exceed the value of the product itself.
(9)
(10)
(11)
(12)
(13)
(i) An unmanufactured end product mined or produced in a qualifying country; or
(ii) An end product manufactured in a qualifying country if the cost of the components mined, produced, or manufactured in the qualifying country and its components mined, produced or manufactured in the United States exceeds 50 percent of the cost of all its components.
(14)
(15)
(i) Is wholly the growth, product, or manufacture of the United States; or
(ii) In the case of an article that consists in whole or in part of materials from another country or instrumentality, has been substantially transformed in the United States into a new and different article of commerce with a name, character, or use distinct from
(b) Unless otherwise specified, the Trade Agreements Act of 1979 (19 U.S.C. 2501
(c)(1) The Contractor agrees to deliver under this contract only domestic end products unless, in its offer, it specified delivery of U.S. made, qualifying country, designated country, Caribbean Basin country, NAFTA country, or other nondesignated country end products in the Buy American Act—Trade Agreements—Balance of Payments Program Certificate provision of the solicitation.
(2) The Contractor may not supply a nondesignated country end product unless—
(i) It is a qualifying country end product, a Caribbean Basin country end product, or a NAFTA country end product;
(ii) The Contracting Officer has determined that offers of U.S. made end products or qualifying, designated, NAFTA, or Caribbean Basin country end products from responsive, responsible offerors are either not received or are insufficient to fill the Government's requirements; or
(iii) A national interest waiver has been granted under section 302 of the Trade Agreements Act of 1979.
(d) The offered price of qualifying country end products and the offered price of designated country end products, NAFTA country end products, and Caribbean Basin country end products, for line items subject to the Trade Agreements Act or the North American Free Trade Agreement Implementation Act, should not include custom fees or duty. The offered price of end products listed in paragraph (c)(2)(vi) of the Buy American Act—Trade Agreements—Balance of Payments Program Certificate provision of the solicitation, or the offered price of U.S. made end products that contain nonqualifying country components, must include all applicable duty. The award price will not include duty for end products or components that are to be accorded duty-free entry. Generally, each offer of a U.S. made end product that does not meet the definition of “domestic end product” is adjusted for the purpose of evaluation by adding 50 percent of the offered price, inclusive of duty.
(e) The HTSUS is available on the Internet at
(1) General Note 3(c), Products Eligible for Special Tariff Treatment.
(2) General Note 17, Products of Countries Designated as Beneficiary Countries Under the United States-Caribbean Basin Trade Partnership Act of 2000.
(3) Section XXII, Chapter 98, Subchapter II, Articles Exported and Returned, Advanced or Improved Abroad, U.S. Note 7(b).
(4) Section XXII, Chapter 98, Subchapter XX, Goods Eligible for Special Tariff Benefits Under the United States-Caribbean Basin Trade Partnership Act.
As prescribed in 225.1101(7), use the following clause:
In accordance with paragraph (b) of the Duty-Free Entry clause of this contract, in addition to duty-free entry for all qualifying country supplies (end products and components) and all eligible end products subject to applicable trade agreements (if this contract contains the Buy American Act—Trade Agreements—Balance of Payments Program clause or the Buy American Act—North American Free Trade Agreement Implementation Act—Balance of Payments Program clause), the following foreign end products that are neither qualifying country end products nor eligible end products under a trade agreement, and the following nonqualifying country components, are accorded duty-free entry.
As prescribed in 225.1101(8), use the following clause:
(a)
(b) The requirements of this clause apply to this contract and subcontracts, including purchase orders, that involve supplies to be accorded duty-free entry whether placed—
(1) Directly with a foreign concern as a prime contract; or
(2) As a subcontract or purchase order under a contract with a domestic concern.
(c) Except as otherwise approved by the Contracting Officer, or unless supplies were imported into the United States before the date of this contract or, in the case of supplies imported by a first or lower tier subcontractor, before the date of the subcontract, no amount is or will be included in the contract price for duty for—
(1) End items that are qualifying country end products; or
(2) Components (including, without limitation, raw materials and intermediate assemblies) produced or made in qualifying countries, that are to be incorporated in the end items to be delivered under this contract, provided that the end items are manufactured in the United States or in a qualifying country.
(d) The Contractor warrants that—
(1) All qualifying country supplies, for which duty-free entry is to be claimed, are intended to be delivered to the Government or incorporated in the end items to be delivered under this contract; and
(2) The Contractor will pay duty to the extent that such supplies, or any portion thereof (if not scrap or salvage) are diverted to nongovernmental use, other than as a result of a competitive sale made, directed, or authorized by the Contracting Officer.
(e) The Government agrees to execute duty-free entry certificates and to afford such assistance as appropriate to obtain the duty-free entry of qualifying country supplies for which the shipping documents bear the notation specified in paragraph (f) of this clause, except as the Contractor may otherwise agree.
(f) All shipping documents submitted to Customs, covering foreign end products or supplies for which duty-free entry certificates are to be issued under this clause, shall—
(1) Consign the shipments to the appropriate—
(i) Military department in care of the Contractor, including the Contractor's delivery address; or
(ii) Military installation; and
(2) Include the following information—
(i) Prime contract number, and delivery order if applicable;
(ii) Number of the subcontract/purchase order for foreign supplies if applicable;
(iii) Identification of carrier;
(iv)(A) For direct shipments to a U.S. military installation, the notation:
UNITED STATES GOVERNMENT, DEPARTMENT OF DEFENSE Duty-Free Entry to be claimed pursuant to Section XXII, Chapter 98, Subchapter VIII, Item 9808.00.30 of the Harmonized Tariff Schedule of the United States. Upon arrival of shipment at the appropriate port of entry, District Director of Customs, please release shipment under 19 CFR part 142 and notify Commander, Defense Contract Management (DCM) New York, ATTN: Customs Team, DCMDN-GNIC, 207 New York Avenue, Building 120, Staten Island, New York, 10305-5013, for execution of Customs Forms 7501, 7501A, or 7506 and any required duty-free entry certificates.
(B) In cases where the shipment will be consigned to other than a military installation, e.g., a domestic contractor's plant, the shipping document notation shall be altered to insert the name and address of the contractor, agent or broker who will notify Commander, DCM New York, for execution of the duty-free certificate.
(v) Gross weight in pounds (if freight is based on space tonnage, state cubic feet in addition to gross shipping weight);
(vi) Estimated value in U.S. dollars; and
(vii) Activity Address Number of the contract administration office actually administering the prime contract, e.g., for DCM Dayton, S3605A.
(g)
(2) For shipments containing both supplies that are to be accorded duty-free entry and supplies that are not, the Contractor shall identify on the customs forms those items that are eligible for duty-free entry.
(h) The contractor agrees—
(1) To prepare (if this contract is placed directly with a foreign supplier), or to instruct the foreign supplier to prepare, a sufficient number of copies of the bill of lading (or other shipping document) so that at least two of the copies accompanying the shipment will be available for use by the District Director of Customs at the port of entry;
(2) To consign the shipment as specified in paragraph (f) of this clause; and
(3) To mark the exterior of all packages as follows:
(i) “UNITED STATES GOVERNMENT, DEPARTMENT OF DEFENSE;” and
(ii) The activity address number of the contract administration office actually administering the prime contract.
(i) The Contractor agrees to notify the Contracting Officer administering the prime contract in writing of any purchase under the contract of qualifying country supplies to be accorded duty-free entry that are to be imported into the United States for delivery to the Government or for incorporation in end items to be delivered to the Government. The notice shall be furnished to the contract administration office immediately upon award to the qualifying country supplier. The notice shall contain—
(1) Prime contractor's name, address, and CAGE code;
(2) Prime contract number, and delivery order number if applicable;
(3) Total dollar value of the prime contract or delivery order;
(4) Expiration date of the prime contract or delivery order;
(5) Foreign supplier's name and address;
(6) Number of the subcontract/purchase order for foreign supplies;
(7) Total dollar value of the subcontract for foreign supplies;
(8) Expiration date of the subcontract for foreign supplies;
(9) List of items purchased;
(10) An agreement by the Contractor that duty shall be paid by the Contractor to the extent that such supplies, or any portion (if not scrap or salvage), are diverted to nongovernmental use other than as a result of a competitive sale made, directed, or authorized by the Contracting Officer;
(11) The qualifying country; and
(12) The scheduled delivery date(s).
(j) This clause does not apply to purchases of qualifying country supplies in connection with this contract if—
(1) The qualifying country supplies are identical in nature to supplies purchased by the Contractor or any subcontractor in connection with its commercial business; and
(2) It is not economical or feasible to account for such supplies so as to ensure that the amount of the supplies for which duty-free entry is claimed does not exceed the amount purchased in connection with this contract.
(k) The Contractor agrees to insert the substance of this clause, including this paragraph (k) in all subcontracts for supplies. Each subcontract shall require the subcontractor to identify this contract by including its contract number on any shipping documents submitted to Customs covering supplies for which duty-free entry is to be claimed pursuant to this clause. The Contractor also agrees that the name and address of the Contracting Officer administering the prime contract (name and address of the contract administration office cognizant of the prime contract), and its activity address number (appendix G of the Defense FAR Supplement), and the information required by paragraphs (i) (1), (2), and (3) of this clause will be included in applicable subcontracts.
As prescribed in 225.1101(9), use the following clause:
(a) The requirements of this clause supplement the Duty-Free Entry clause of this contract.
Both of these clauses apply to this contract and subcontracts, including purchase orders, that involve supplies to be accorded duty-free entry whether placed—
(1) Directly with a foreign concern as a prime contract; or
(2) As a subcontractor purchase order under a contract with a domestic concern.
(b) The Contractor shall send the notification required by paragraph (b)(1) of the Duty-Free Entry clause of this contract to the Contracting Officer administering this contract.
(c) In addition to any data required by paragraph (b)(1) of the Duty-Free Entry clause, the Contractor shall furnish the following for all foreign supplies to be imported pursuant to paragraph (a) or (b) of the Duty-Free Entry clause. The Contractor shall furnish this information to the Contracting Officer administering the prime contract immediately upon award of any contract or subcontract involving supplies to be accorded duty-free entry.
(1) Prime contractor's name, address, and CAGE code;
(2) Prime contract number plus delivery order number, if applicable;
(3) Total dollar value of the prime contract or delivery order;
(4) Expiration date of the prime contract or delivery order;
(5) Foreign supplier's name and address;
(6) Number of the subcontract/purchase order for foreign supplies;
(7) Total dollar value of the subcontract for foreign supplies;
(8) Expiration date of the subcontract for foreign supplies;
(9) List of items purchased; and
(10) An agreement by the Contractor that duty shall be paid by the Contractor to the extent that such supplies, or any portion (if not scrap or salvage), are diverted to nongovernmental use other than as a result of a competitive sale made, directed, or authorized by the Contracting Officer.
(d) The Contractor agrees to incorporate the substance of this clause, including this paragraph (d), in any subcontract (including purchase orders) in accordance with paragraph (i) of the Duty-Free Entry clause of this contract. The Contractor agrees that the name and address of the Contracting Officer administering the prime contract (name and address of the contract administration office cognizant of the prime contract and its activity address number (appendix G of the Defense FAR Supplement)) and the information required by paragraphs (c)(1), (2), and (3) of this clause will be included in applicable subcontracts.
(e) To properly complete the shipping document instructions as required by paragraph (f) of the Duty-Free Entry clause, the Contractor shall insert Defense Contract Management (DCM) New York, ATTN: Customs Team, DCMDN-GNIC, 207 New York Avenue, Building 120, Staten Island, New York 10305-5013, as the cognizant contract administration office (for paragraph (f) only) in those cases when the shipment is consigned directly to a military installation. When the shipment will be consigned to a location other than a military installation, e.g., a domestic contractor's plant, change the shipping document notation required by paragraph (f) of the clause to insert the name and address of the Contractor, agent or broker that will prepare the customs documentation for execution of the Duty-Free Entry certificates. In either case, the shipping documents will contain the following items in addition to those required by paragraph (f) of the Duty-Free Entry clause:
(1) Delivery order number on the Government prime contract, if applicable;
(2) Number of the subcontract/purchase order for foreign supplies, if applicable;
(3) Activity address number of the contract administration office actually administering the prime contract, e.g., for DCM Dayton, S3605A.
(f) Except for shipments consigned to a military installation, the Contractor shall prepare, or authorize an agent to prepare, any customs forms required for the entry into the United States, its possessions, or Puerto Rico of foreign supplies in connection with DoD contracts. The Contractor shall submit the completed customs forms to the District Director of Customs with a copy to DCM New York for execution of any required duty-free entry certificates. For shipments containing both supplies which are to be accorded duty-free entry and supplies which are not, the Contractor shall identify on the customs forms those items which are eligible for duty-free entry under the provisions of the Duty-Free Entry clause. Shipments consigned directly to a military installation will be released in accordance with §§ 10.101 and 10.102 of the U.S. Customs regulations.
(g) The Contractor shall ensure that all exterior containers are marked in accordance with paragraph (g) of the Duty-Free Entry clause, including the following additional data—
(1) “UNITED STATES GOVERNMENT, DEPARTMENT OF DEFENSE;” and
(2) The activity address number for the contract administration office actually administering the prime contract.
As prescribed in 225.7023-3, use the following clause:
The Contractor agrees that any supercomputers furnished under this contract have been manufactured in the United States.
As prescribed in 225.7002-3(a), use the following clause:
(a)
(1)
(2)
(b) The Contractor shall deliver under this contract only such of the following items, either as end products or components, that have been been grown, reprocessed, reused, or produced in the United States, its possessions, or Puerto Rico:
(1) Food.
(2) Clothing.
(3) Tents, tarpaulins, or covers.
(4) Cotton and other natural fiber products.
(5) Woven silk or woven silk blends.
(6) Spun silk yarn for cartridge cloth.
(7) Synthetic fabric, and coated synthetic fabric, including all textile fibers and yarns that are for use in such fabrics.
(8) Canvas products.
(9) Wool (whether in the form of fiber or yarn or contained in fabrics, materials, or manufactured articles).
(10) Any item of individual equipment (Federal Supply Class 8465) manufactured from or containing fibers, yarns, fabrics, or materials listed in this paragraph (b).
(c) This clause does not apply—
(1) To items listed in section 25.104(a) of the Federal Acquisition Regulation (FAR), or other items for which the Government has determined that a satisfactory quality and sufficient quantity cannot be acquired as and when needed at U.S. market prices;
(2) To end products incidentally incorporating cotton, other natural fibers, or wool, for which the estimated value of the cotton, other natural fibers, or wool—
(i) Is not more than 10 percent of the total price of the end product; and
(ii) Does not exceed the simplified acquisition threshold in FAR part 2;
(3) To foods that have been manufactured or processed in the United States, its possessions, or Puerto Rico, regardless of where the foods (and any component if applicable) were grown or produced;
(4) To chemical warfare protective clothing produced in the countries listed in subsection 225.872-1 of the Defense FAR Supplement; or
(5) To fibers and yarns that are for use in synthetic fabric or coated synthetic fabric (but does apply to the synthetic or coated synthetic fabric itself), if—
(i) The fabric is to be used as a component of an end product that is not a textile product. Examples of textile products, made in whole or in part of fabric, include—
(A) Draperies, floor coverings, furnishings, and bedding (Federal Supply Group 72, Household and Commercial Furnishings and Appliances);
(B) 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;
(C) Upholstered seats (whether for household, office, or other use); and
(D) Parachutes (Federal Supply Class 1670); or
(ii) The fibers and yarns are para-aramid fibers and yarns manufactured in the Netherlands.
As prescribed in 225.7002-3(b), use the following clause:
(a)
(1)
(2)
(i) Steel—
(A) Where the maximum alloy content exceeds one or more of the following limits: manganese, 1.65 percent; silicon, 0.60 percent; or copper, 0.60 percent; or
(B) That contains more than 0.25 percent of any of the following elements: aluminum, chromium, cobalt, columbium, molybdenum, nickel, titanium, tungsten, or vanadium;
(ii) Metal alloys consisting of nickel, iron-nickel, and cobalt base alloys containing a total of other alloying metals (except iron) in excess of 10 percent;
(iii) Titanium and titanium alloys; or
(iv) Zirconium and zirconium base alloys.
(b) The Contractor agrees that any specialty metals incorporated in articles delivered under this contract will be melted in the United States, its possessions, or Puerto Rico.
(c) This clause does not apply to the extent that—
(1) The Secretary or designee determines that a satisfactory quality and sufficient quantity of such articles cannot be acquired when needed at U.S. market prices;
(2) The specialty metal is melted in a qualifying country or is incorporated in an article manufactured in a qualifying country;
(3) The acquisition is necessary to comply with agreements with foreign governments requiring the United States to purchase supplies from foreign sources to offset sales made by the U.S. Government or U.S. firms under approved programs; or
(4) The specialty metal is purchased by a subcontractor at any tier.
(c) This clause does not apply to the extent that—
(1) The Secretary or designee determines that a satisfactory quality and sufficient quantity of such articles cannot be acquired when needed at U.S. market prices;
(2) The specialty metal is melted in a qualifying country or is incorporated in an article manufactured in a qualifying country; or
(3) The acquisition is necessary to comply with agreements with foreign governments requiring the United States to purchase supplies from foreign sources to offset sales made by the U.S. Government or U.S. firms under approved programs.
(d) The Contractor agrees to include the terms of this clause, including this paragraph (d), in every subcontract or purchase order awarded under this contract unless the item being purchased contains no specialty metals.
As prescribed in 225.7002-3(c), use the following clause:
The Contractor agrees to deliver under this contract only hand or measuring tools produced in the United States or its possessions.
As prescribed in 225.7019-4, use the following clause:
(a)
As used in this clause—
(1) “Bearing components” means the bearing element, retainer, inner race, or outer race.
(2) “Miniature and instrument ball bearings” means all rolling contact ball bearings with a basic outside diameter (exclusive of flange diameters) of 30 millimeters or less, regardless of material, tolerance, performance, or quality characteristics.
(b) The Contractor agrees that, except as provided in paragraph (c) of this clause, all ball and roller bearings and ball and roller bearing components (including miniature and instrument ball bearings) delivered under this contract, either as end items or components of end items, shall be wholly manufactured in the United States or Canada. Unless otherwise specified, raw materials, such as performed bar, tube, or rod stock and lubricants, need not be mined or produced in the United States or Canada.
(c)(1) The restriction in paragraph (b) of this clause does not apply to ball or roller bearings that are acquired as components if—
(i) The end items or components containing ball or roller bearings are commercial items; or
(ii) The ball or roller bearings are commercial components manufactured in the United Kingdom.
(2) The commercial item exception in paragraph (c)(1) of this clause does not include items designed or developed under a Government contract or contracts where the end item is bearings and bearing components.
(d) The restriction in paragraph (b) of this clause may be waived upon request from the Contractor in accordance with subsection 225.7019-3 of the Defense Federal Acquisition Regulation Supplement. If the restriction is waived for miniature and instrument ball bearings, the Contractor agrees to acquire a like quantity and type of domestic manufacture for nongovernmental use.
(e) The Contractor agrees to retain records showing compliance with this restriction until 3 years after final payment and to make records available upon request of the Contracting Office.
(f) The Contractor agrees to insert this clause, including this paragraph (f), in every subcontract and purchase order issued in performance of this contract, unless items acquired are—
(1) Commercial items other than ball or roller bearings; or
(2) Items that do not contain ball or roller bearings.
(c)(1)(ii) The ball or roller bearings are commercial components.
As prescribed in 225.771-5, use the following provision:
(a)
(b)
(c)
As prescribed in 225.7011-5, use the following provision:
(a) Definitions.
(1)
(2)
(3)
(b) This provision implements section 222 of the Defense Authorization Act for FYs 1988 and 1989 (Pub. L. 100-180) prohibiting the award of certain contracts, for the conduct of Ballistic Missile Defense (BMD) Program research, development, test, or evaluation (RDT&E), to foreign governments or firms.
(c) Except as provided in paragraph (d) of this provision, any funds appropriated to, or for the use of, the DoD, may not be used to enter into or carry out any contract, including any contract awarded as a result of a broad agency announcement (BAA), with a foreign government or firm if the contract provides for the conduct of RDT&E in connection with the BMD. Foreign governments and firms, however, are encouraged to submit offers since this provision is not intended to restrict BMD access to unique foreign expertise when contract performance requires a level of competency unavailable in the United States.
(d) The prohibition does not apply to a foreign government or firm if—
(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;
(3) The foreign government or firm agrees to share a substantial portion of the total contract cost. The foreign share is considered substantial where 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 costs should be correspondingly higher; or
(4) The U.S. Government determines that the contract cannot be competently performed by a U.S. firm at a price equal to or less than the price at which the RDT&E can be performed by a foreign government or firm.
(e) The offeror (____) is (____) is not a U.S. firm.
As prescribed in 225.7012-3, use the following clause:
(a) Welded shipboard anchor and mooring chain, four inches in diameter and under, delivered under this contract—
(1) Shall be 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 shall exceed 50 percent of the total cost of components.
(b) The Contractor may request a waiver of this restriction if adequate domestic supplies meeting the above requirements are not available to meet the contract delivery schedule.
(c) The Contractor shall include this clause, including this paragraph (c), in all subcontracts, unless the items acquired contain none of the restricted welded shipboard anchor and mooring chain.
As prescribed in 225.1101(10), use the following provision:
(a)
(b)
(c)
(2) The following supplies are other nondesignated country end products:
As prescribed in 225.1101(11), use the following clause:
(a)
(1)
(2)
(i) Means an article that—
(A) Is wholly the growth, product, or manufacture of a Caribbean Basin country; or
(B) In the case of an article that consists in whole or in part of materials from another country or instrumentality, has been substantially transformed in a Caribbean Basin country into a new and different article of commerce with a name, character, or use distinct from that of the article or articles from which it was so transformed. The term refers to a product offered for purchase under a supply contract, but for purposes of calculating the value of the end product includes services (except transportation services) incidental to its supply, provided that the value of those incidental services does not exceed the value of the product itself; and
(ii) Excludes products, other than petroleum and any product derived from petroleum, that are not granted duty-free treatment under the Caribbean Basin Economic Recovery Act (19 U.S.C. 2703(b)). These exclusions presently consist of—
(A) Textiles, apparel articles, footwear, handbags, luggage, flat goods, work gloves, leather wearing apparel, and handloomed, handmade, or folklore articles that are not granted duty-free status in the Harmonized Tariff Schedule of the United States (HTSUS);
(B) Tuna, prepared or preserved in any manner in airtight containers; and
(C) Watches and watch parts (including cases, bracelets, and straps) of whatever type including, but not limited to, mechanical,
(3)
(4)
(5)
(i) Is wholly the growth, product, or manufacture of the designated country; or
(ii) In the case of an article that consists in whole or in part of materials from another country or instrumentality, has been substantially transformed in a designated country into a new and different article of commerce with a name, character, or use distinct from that of the article or articles from which it was so transformed. The term refers to a product offered for purchase under a supply contract, but for purposes of calculating the value of the end product includes services (except transportation services) incidental to its supply, provided that the value of those incidental services does not exceed the value of the product itself.
(6)
(7)
(i) Is wholly the growth, product, or manufacture of the NAFTA country; or
(ii) In the case of an article that consists in whole or in part of materials from another country or instrumentality, has been substantially transformed in a NAFTA country into a new and different article of commerce with a name, character, or use distinct from that of the article or articles from which it was so transformed. The term refers to a product offered for purchase under a supply contract, but for purposes of calculating the value of the end product includes services (except transportation services) incidental to its supply, provided that the value of those incidental services does not exceed the value of the product itself.
(8)
(9)
(10)
(11)
(i) An unmanufactured end product mined or produced in a qualifying country; or
(ii) An end product manufactured in a qualifying country if the cost of the components mined, produced, or manufactured in the qualifying country and its components mined, produced, or manufactured in the
(12)
(13)
(i) Is wholly the growth, product, or manufacture of the United States; or
(ii) In the case of an article that consists in whole or in part of materials from another country or instrumentality, has been substantially transformed in the United States into a new and different article of commerce with a name, character, or use distinct from that of the article or articles from which it was so transformed.
(b) Unless otherwise specified, the Trade Agreements Act of 1979 (19 U.S.C. 2501,
(c)(1) The Contractor agrees to deliver under this contract only U.S. made, qualifying country, designated country, Caribbean Basin country or NAFTA country end product unless, in its offer, it specified delivery of other nondesignated country end products in the Trade Agreements Certificate provision of the solicitation.
(2) The Contractor may not supply a nondesignated country end product other than a qualifying country end product, a Caribbean Basin country end product, or a NAFTA country end product, unless—
(i) The Contracting Officer has determined that offers of U.S. made end products or qualifying, designated, Caribbean Basin, or NAFTA country end products from responsive, responsible offerors are either not received or are insufficient to fill the Government's requirements; or
(ii) A national interest waiver has been granted under section 302 of the Trade Agreements Act of 1979.
(d) The offered price of end products listed in paragraph (c)(2) of the Trade Agreements Certificate provision of the solicitation must include all applicable duty, whether or not a duty-free entry certificate will be granted. The offered price of qualifying country, designated country, Caribbean Basin country, or NAFTA country end products, for line items subject to the Trade Agreements Act or the North American Free Trade Agreement Implementation Act, should not include custom fees or duty. The offered price of U.S. made end products should not include duty for qualifying country components.
(e) The HTSUS is available on the Internet at
(1) General Note 3(c), Products Eligible for Special Tariff Treatment.
(2) General Note 17, Products of Countries Designated as Beneficiary Countries Under the United States-Caribbean Basin Trade Partnership Act of 2000.
(3) Section XXII, Chapter 98, Subchapter II, Articles Exported and Returned, Advanced or Improved Abroad, U.S. Note 7(b).
(4) Section XXII, Chapter 98, Subchapter XX, Goods Eligible for Special Tariff Benefits Under the United States-Caribbean Basin Trade Partnership Act.
As prescribed in 225.7103-3, use the following clause:
(a) This clause applies only if the end product furnished under this contract contains polyacrylonitrile carbon fibers (alternatively referred to as PAN-based carbon fibers or PAN-based graphite fibers).
(b) PAN carbon fibers contained in the end product shall be manufactured in the United States or Canada using PAN precursor produced in the United States or Canada.
(c) The Contracting Officer may waive the requirement in paragraph (b) of this clause in whole or in part. The Contractor may request a waiver from the Contracting Officer by identifying the circumstances and including a plan to qualify U.S. or Canadian sources expeditiously.
As prescribed in 225.7020-4, use the following clause:
(a) Except as provided in paragraph (b) of this clause, the Contractor shall deliver under this contract, whether as end items or components of end items, vessel propellers—
(1) Manufactured in the United States or Canada; and
(2) For which all component castings were poured and finished in the United States or Canada.
(b) The restriction in paragraph (a) of this clause—
(1) Does not apply to vessel propellers that are commercial items; and
(2) For other than commercial items, may be waived upon request from the Contractor in accordance with subsection 225.7020-3 of the Defense Federal Acquisition Regulation Supplement.
As prescribed in 225.7015-3, use the following clause:
All second and third generation night vision image intensifier tubes and devices provided under this contract shall be manufactured in the United States or Canada.
As prescribed in 225.7102-4, use the following clause:
(a)
(1) “Domestic manufacture” means manufactured in the United States or Canada if the Canadian firm—
(i) Normally produces similar items or is currently producing the item in support of DoD contracts (as prime or subcontractor); and
(ii) Agrees to become (upon receiving a contract/order) a planned producer under DoD's Industrial Preparedness Production Planning Program, if it is not already a planned producer for the item.
(2) “Forging items” means—
(b) The Contractor agrees that end items and their components delivered under this contract shall contain forging items that are of domestic manufacture only.
(c) The restriction in paragraph (b) of this clause may be waived upon request from the Contractor in accordance with subsection 225.7102-3 of the Defense Federal Acquisition Regulation Supplement.
(d) The Contractor agrees to retain records showing compliance with this restriction until 3 years after final payment and to make records available upon request of the Contracting Officer.
(e) The Contractor agrees to insert this clause, including this paragraph (e), in subcontracts and purchase orders issued in performance of this contract, when products purchased contain restricted forging items.
As prescribed in 225.7203, use the following clause:
(a)
(1) Offers exceeding $10 million, if the Offeror is aware at the time the offer is submitted that it or its first-tier subcontractor intends to perform any part of the contract that exceeds $500,000 outside the United States and Canada, if that part could be performed inside the United States or Canada;
(2) Contracts exceeding $10 million, when any part that exceeds $500,000 could be performed inside the United States or Canada, but will be performed outside the United States and Canada. If the information was submitted with the offer, it need not be resubmitted unless it changes; and
(3) Contracts exceeding $500,000, when any part that exceeds the simplified acquisition threshold in Part 2 of the Federal Acquisition Regulation will be performed outside the United States, unless a foreign place of performance is—
(i) The principal place of performance; and
(ii) Indicated by the Offeror's entry in the Place of Performance provision of the solicitation.
(b)
(2) The Contractor shall submit reports required by paragraph (a)(2) of this clause to the Contracting Officer as soon as the information is known, with a copy to the addressee in paragraph (b)(3) of this clause. With respect to performance by a first-tier
(3) The Contractor shall submit reports required by paragraph (a)(3) of this clause within 10 days of the end of each Government quarter to—Deputy Director of Defense Procurement (Foreign Contracting) OUSD(AT&L)DP(FC) Washington, DC 20301-3060
(4) The Offeror/Contractor shall submit reports on DD Form 2139, Report of Contract Performance Outside the United States. Computer-generated reports are acceptable, provided the report contains all information required by DD Form 2139. Copies of DD Form 2139 may be obtained from the Contracting Officer.
(c)
(2) The Contractor shall provide the prime contract number to subcontractors for reporting purposes.
(d)
(1) Subcontracts;
(2) Purchases; and
(3) Intracompany transfers when transfers originate in a foreign location.
As prescribed in 225.7308(a), use the following clause. Insert in paragraph (b)(1) of the clause the name(s) of any foreign country customer(s) listed in 225.7303-4(b).
(a) Except as provided in paragraph (b) of this clause, contingent fees, as defined in the Covenant Against Contingent Fees clause of this contract, are generally an allowable cost, provided the fees are paid to a bona fide employee of the Contractor or to a bona fide established commercial or selling agency maintained by the Contractor for the purpose of securing business.
(b) For foreign military sales, unless the contingent fees have been identified and payment approved in writing by the foreign customer before contract award, the following contingent fees are unallowable under this contract:
(1) For sales to the Government(s) of __________, contingent fees in any amount.
(2) For sales to Governments not listed in paragraph (b)(1) of this clause, contingent fees exceeding $50,000 per foreign military sale case.
As prescribed in 225.7308(b), use the following clause:
No person, partnership, corporation, or other entity performing functions pursuant to this contract, shall, in employing or assigning personnel to participate in the performance of any such function, whether in the United States or abroad, take into account the exclusionary policies or practices of any foreign government where such policies or practices are based on race, religion, national origin, or sex.
As prescribed in 225.7016-4, use the following clause:
(a) Unless otherwise specified in its offer, the Contractor agrees that air circuit breakers for naval vessels provided under this contract shall be manufactured in the United States, Canada, or the United Kingdom.
(b) Unless an exception applies under Defense Federal Acquisition Regulation Supplement (DFARS) 225.7016-2 or a waiver is granted under DFARS 225.7005(a) (1) or (2), preference will be given to air circuit breakers manufactured in the United States or Canada by adding 50 percent for evaluation purposes to the offered price of all other air circuit breakers, except those manufactured in the United Kingdom.
As prescribed in 225.7017-4, use the following clause:
The Contractor agrees that all carbon, alloy, and armor steel plate in Federal supply class 9515, or described by American Society for Testing Materials (ASTM) or American Iron and Steel Institute (AISI) specifications, furnished as a deliverable under this contract, or purchased by the contractor as a raw material, for use in a Government-owned facility or a facility under the control of the Department of Defense, shall be melted and rolled in the United States or Canada.
As prescribed in 225.770-5, use the following clause:
(a)
As used in this clause—
(b)
(1) Does not comply with the Secondary Arab Boycott of Israel; and
(2) Is not taking or knowingly agreeing to take any action, with respect to the Secondary Boycott of Israel by Arab countries, which 50 U.S.C. App. Sec. 2407(a) prohibits a United States person from taking.
As prescribed in 225.873-3, use the following clause:
(a) Offered prices for contracts and subcontracts with United Kingdom (U.K.) firms may contain commercial exploitation levies assessed by the Government of the U.K. The Offeror shall identify to the Contracting Officer all levies included in the offered price by describing—
(1) The name of the U.K. firm;
(2) The item to which the levy applies and quantity; and
(3) The amount of levy plus any associated indirect costs and profit or fee.
(b) If, after award of the prime contract, the Contractor contemplates award of a subcontract over $1 million to a U.K. firm, the Contractor shall identify any levy before award of the subcontract and shall provide the following information to the Contracting Officer—
(1) Name of the U.K. firm;
(2) Prime contract number;
(3) Description of item to which levy applies:
(4) Quantity being acquired; and
(5) Amount of levy plus any associated indirect costs and profit or fee.
(c) The Offeror/Contractor should obtain assistance in identifying the levy from the U.K. firm. In the event of difficulty, the Offeror/Contractor may seek advice through Director of Procurement, United Kingdom Defence Procurement Office, British Embassy, 3100 Massachusetts Avenue, NW, Washington, DC 20006.
(d) The U.S. Government may attempt to obtain a waiver of levies pursuant to the U.S./U.K. reciprocal waiver agreement of July 1987.
(1) Where levies are waived before contract award, the offer will be evaluated without the levy.
(2) Where levies are identified but not waived before contract award, the offer will be evaluated inclusive of the levies.
(3) Where a waiver of the levy is obtained after award, the U.S. Government reserves the right to reduce the contract price by the amount of the levy waived plus associated indirect costs, profit or fee.
(e) The Contractor agrees to insert the substance of this clause, including this paragraph (e), in any subcontract for supplies where a lower tier subcontract over $1 million with a U.K. firm is anticipated.
As prescribed in 225.7018-3, use the following clause:
Four ton dolly jacks delivered under this contract shall be manufactured in the United States unless a waiver is granted in accordance with subsection 225.7018-2 of the Defense Federal Acquisition Regulation Supplement.
As prescribed in 225.1101(12), use the following provision:
(a)
(b)
(c)
(i) Each end product, except the end products listed in paragraph (c)(2) of this provision, is a domestic end product; and
(ii) Components of unknown origin are considered to have been mined, produced, or manufactured outside the United States or a qualifying country.
(2) The Offeror must identify all end products that are not domestic end products.
(i) The Offeror certifies that the following supplies are qualifying country (except Canada) end products:
(ii) The Offeror certifies that the following supplies qualify as NAFTA country end products:
(iii) The following supplies are other foreign end products:
As prescribed in 225.1101(13),use the following clause:
(a)
(1)
(2)
(i) An unmanufactured end product that has been mined or produced in the United States; or
(ii) An end product manufactured in the United States if the cost of its qualifying
(A) Determined to be not mined, produced, or manufactured in the United States in sufficient and reasonably available commercial quantities and of a satisfactory quality; or
(B) That the Secretary concerned determines would be inconsistent with the public interest to apply the restrictions of the Buy American Act.
(3)
(4)
(5)
(6)
(i) Is wholly the growth, product, or manufacture of a NAFTA country; or
(ii) In the case of an article that consists in whole or in part of materials from another country or instrumentality, has been substantially transformed in a NAFTA country into a new and different article of commerce with a name, character, or use distinct from that of the article or articles from which it was so transformed. The term refers to a product offered for purchase under a supply contract, but for purposes of calculating the value of the end product includes services (except transportation services) incidental to its supply, provided that the value of those incidental services does not exceed the value of the product itself.
(7)
(8)
(9)
(i) An unmanufactured end product mined or produced in a qualifying country; or
(ii) An end product manufactured in a qualifying country if the cost of the components mined, produced, or manufactured in the qualifying country and its components mined, produced, or manufactured in the United States exceeds 50 percent of the cost of all its components.
(b) Unless otherwise specified, the North American Free Trade Agreement Implementation Act of 1993 (19 U.S.C. 3301 note) applies to all items in the Schedule.
(c) The Contractor agrees to deliver under this contract only domestic end products unless, in its offer, it specified delivery of qualifying country, NAFTA country, or other foreign end products in the Buy American Act—North American Free Trade Agreement Implementation Act—Balance of Payments Program Certificate provision of the solicitation. An offer certifying that a qualifying country end product or a NAFTA country end product will be supplied requires the Contractor to supply a qualifying country end product or a NAFTA country end product, whichever is certified, or, at the Contractor's option, a domestic end product.
(d) The offered price of qualifying country end products, or NAFTA country end products for line items subject to the North American Free Trade Agreement Implementation Act, should not include custom fees or duty. The offered price of foreign end products listed in paragraph (c)(2)(iii) of the Buy American Act—North American Free Trade Agreement Implementation Act—Balance of Payments Program Certificate provision of the solicitation, or the offered price of domestic end products that contain nonqualifying country components, must include all applicable duty. The award price will not include duty for end products or components that are to be accorded duty-free entry. Generally, each foreign end product listed in paragraph (c)(2)(iii) of the Buy American Act—North American Free Trade Agreement Implementation Act—Balance of Payments Program Certificate provision of the solicitation is adjusted for the purpose of evaluation by adding 50 percent of the offered price, inclusive of duty.
(a)(6)
(i) Is wholly the growth, product, or manufacture of Canada; or
(ii) In the case of an article that consists in whole or in part of materials from another country or instrumentality, has been substantially transformed in Canada into a new and different article of commerce with a name, character, or use distinct from that of
(c) The Contractor agrees to deliver under this contract only domestic end products unless, in its offer, it specified delivery of qualifying country, Canadian, or other foreign end products in the Buy American Act—North American Free Trade Agreement Implementation Act—Balance of Payments Program Certificate provision of the solicitation. An offer certifying that a qualifying country end product or a Canadian end product will be supplied requires the Contractor to supply a qualifying country end product or a Canadian end product, whichever is certified, or, at the Contractor's option, a domestic end product.
(d) The offered price of qualifying country end products, or Canadian end products for line items subject to the North American Free Trade Agreement Implementation Act, should not include custom fees or duty. The offered price of foreign end products listed in paragraph (c)(2)(iii) of the Buy American Act—North American Free Trade Agreement Implementation Act—Balance of Payments Program Certificate provision of the solicitation, or the offered price of domestic end products that contain nonqualifying country components, must include all applicable duty. The award price will not include duty for end products or components that are to be accorded duty-free entry. Generally, each foreign end product listed in paragraph (c)(2)(iii) of the Buy American Act—North American Free Trade Agreement Implementation Act—Balance of Payments Program Certificate provision of the solicitation is adjusted for the purpose of evaluation by adding 50 percent of the offered price, inclusive of duty.
As prescribed in 225.1101(14), use the following clause:
(a)
(1)
(2)
(3)
(b) The requirements of this clause apply to this contract and subcontracts, including purchase orders, that involve delivery of eligible end products to be accorded duty-free entry whether placed—
(1) Directly with a foreign concern as a prime contract; or
(2) As a subcontract or purchase order under a contract with a domestic concern.
(c) Except as otherwise approved by the Contracting Officer, no amount is or will be included in the contract price for duty for eligible end products.
(d) The Contractor warrants that—
(1) All eligible end products, for which duty-free entry is to be claimed under this clause, are intended to be delivered to the Government; and
(2) The Contractor will pay any applicable duty to the extent that such eligible end products, or any portion thereof (if not scrap or salvage) are diverted to nongovernmental use, other than as a result of a competitive sale made, directed, or authorized by the Contracting Officer.
(e) The Government agrees to execute duty-free certificates and to afford such assistance as appropriate to obtain the duty-free entry of eligible end products for which the shipping documents bear the notation specified in paragraph (f) of this clause, except as the Contractor may otherwise agree.
(f) All shipping documents submitted to Customs, covering eligible end products for which duty-free entry certificates are to be issued under this clause, shall—
(1) Consign the shipments to the appropriate—
(i) Military department in care of the Contractor, including the Contractor's delivery address; or
(ii) Military installation; and
(2) Include the following information—
(i) Prime contract number, and delivery order if applicable;
(ii) Number of the subcontract/purchase order for foreign supplies if applicable;
(iii) Identification of carrier;
(iv)(A) For direct shipments to a U.S. military installation, the notation:
UNITED STATES GOVERNMENT, DEPARTMENT OF DEFENSE Duty-Free Entry to be claimed pursuant to Section XXII, Chapter 98, Subchapter VIII, Item 9808.00.30 of the Harmonized Tariff Schedule of the United States. Upon arrival of shipment at
(B) In cases where the shipment will be consigned to other than a military installation, e.g., a domestic contractor's plant, the shipping document notation shall be altered to insert the name and address of the contractor, agent or broker who will notify Commander, DCM New York, for execution of the duty-free certificate. (Note: In those instances where the shipment will be consigned to a contractor's plant and no duty-free entry certificate is required, the contractor or its agent shall claim duty-free entry under NAFTA or other trade agreement and shall comply with the U.S. Customs Service requirements. No notification to Commander, DCM New York, is required.)
(v) Gross weight in pounds (if freight is based on space tonnage, state cubic feet in addition to gross shipping weight);
(vi) Estimated value in U.S. dollars; and
(vii) Activity Address Number of the contract administration office actually administering the prime contract, e.g., for DCM Dayton, S3605A.
(g) Preparation of customs forms. (1) Except for shipments consigned to a military installation, the Contractor shall prepare, or authorize an agent to prepare, any customs forms required for the entry of eligible end products in connection with DoD contracts into the United States, its possessions, or Puerto Rico. The completed customs forms shall be submitted to the District Director of Customs with a copy to DCM New York for execution of any required duty-free entry certificates. Shipments consigned directly to a military installation will be released in accordance with 10.101 and 10.102 of the U.S. Customs regulations.
(2) For shipments containing both supplies that are to be accorded duty-free entry and supplies that are not, the Contractor shall identify on the customs forms those items that are eligible for duty-free entry.
(h) The Contractor agrees—
(1) To prepare (if this contract is placed directly with a foreign supplier), or to instruct the foreign supplier to prepare, a sufficient number of copies, of the bill of lading (or other shipping document) so that at least two of the copies accompanying the shipment will be available for use by the District Director of Customs at the port of entry;
(2) To consign the shipment as specified in paragraph (f) of this clause; and
(3) To mark the exterior of all packages as follows:
(i) “UNITED STATES GOVERNMENT, DEPARTMENT OF DEFENSE;” and
(ii) The activity address number of the contract administration office actually administering the prime contract.
(i) The Contractor agrees to notify the Contracting Officer administering the prime contract in writing of any purchase under the contract of eligible end products to be accorded duty-free entry that are to be imported into the United States for delivery to the Government or for incorporation in end items to be delivered to the Government. The notice shall be furnished to the contract administration office immediately upon award to the supplier of the eligible end products. The notice shall contain—
(1) Prime contractor's name, address, and CAGE code;
(2) Prime contract number, and delivery order number if applicable;
(3) Total dollar value of the prime contract or delivery order;
(4) Expiration date of the prime contract or delivery order;
(5) Foreign supplier's name and address;
(6) Number of the subcontract/purchase order for eligible end products;
(7) Total dollar value of the subcontract for eligible end products;
(8) Expiration date of the subcontract for eligible end products;
(9) List of items purchased;
(10) An agreement by the Contractor that any applicable duty shall be paid by the Contractor to the extent that such eligible end products are diverted to nongovernmental use other than as a result of a competitive sale made, directed, or authorized by the Contracting Officer; and
(11) The scheduled delivery date(s).
As prescribed in 225.7021-3, use the following clause:
The Contractor agrees that all aircraft fuel cells furnished under this contract have been manufactured in the United States by a domestic-operated entity.
As prescribed in 225.7022-4, use the following clause:
For totally enclosed lifeboat survival systems furnished under this contract, which consist of lifeboat and associated davits and winches, the Contractor agrees that—
(a) 50 percent or more of the components have been manufactured in the United States, and
(b) 50 percent or more of the labor in the manufacture and assembly of the entire system has been performed in the United States.
As prescribed in 225.1103(2), use the following clause:
The Contractor shall ensure that all contract correspondence that is addressed to the United States Government is submitted in English or with an English translation.
As prescribed in 225.1103(3), use the following clause:
The Contractor represents that it has been duly authorized to operate and to do business in the country or countries in which this contract is to be performed. The Contractor also represents that it will fully comply with all laws, decrees, labor standards, and regulations of such country or countries, during the performance of this contract.
As prescribed in 225.7402, use the following clause:
(a) Except as provided in paragraph (b) of this clause, the Contractor and its subcontractors, if performing or traveling outside the United States under this contract, shall—
(1) Affiliate with the Overseas Security Advisory Council, if the Contractor or subcontractor is a U.S. entity;
(2) Ensure that Contractor and subcontractor personnel who are U.S. nationals and are in-country on a non-transitory basis, register with the U.S. Embassy, and that Contractor and subcontractor personnel who are third country nationals comply with any security related requirements of the Embassy of their nationality;
(3) Provide, to Contractor and subcontractor personnel, antiterrorism/force protection awareness information commensurate with that which the Department of Defense (DoD) provides to its military and civilian personnel and their families, to the extent such information can be made available prior to travel outside the United States; and
(4) Obtain and comply with the most current antiterrorism/force protection guidance for Contractor and subcontractor personnel.
(b) The requirements of this clause do not apply to any subcontractor that is—
(1) A foreign government;
(2) A representative of a foreign government; or
(3) A foreign corporation wholly owned by a foreign government.
(c) Information and guidance pertaining to DoD antiterrorism/force protection can be obtained from [
As prescribed in 225.7503(a), use the following clause:
(a)
“Component” means any article, material, or supply incorporated directly into construction material.
“Construction material” means an article, material, or supply brought to the construction site by the Contractor or a subcontractor for incorporation into the building or work. The term also includes an item brought to the site preassembled from articles, materials, or supplies. However, emergency life safety systems, such as emergency lighting, fire alarm, and audio evacuation systems, that are discrete systems incorporated into a public building or work and that are produced as complete systems, are evaluated as a single and distinct construction material regardless of when or how the individual parts or components of those systems are delivered to the construction site. Materials purchased directly by the Government are supplies, not construction material.
“Cost of components” means—
(1) For components purchased by the Contractor, the acquisition cost, including transportation costs to the place of incorporation into the end product (whether or not such costs are paid to a domestic firm), and any applicable duty (whether or not a duty-free entry certificate is issued); or
(2) For components manufactured by the Contractor, all costs associated with the manufacture of the component, including transportation costs as described in paragraph (1) of this definition, plus allocable overhead costs, but excluding profit. Cost of components does not include any costs associated with the manufacture of the end product.
“Domestic construction material” means—
(1) An unmanufactured construction material mined or produced in the United States; or
(2) A construction material manufactured in the United States, if the cost of its components mined, produced, or manufactured in the United States exceeds 50 percent of the cost of all its components. Components of foreign origin of the same class or kind for which nonavailability determinations have been made are treated as domestic.
“United States” means the 50 States and the District of Columbia, U.S. territories and possessions, Puerto Rico, the Northern Mariana Islands, and any other place subject to U.S. jurisdiction, but does not include leased bases.
(b)
(1) Construction material valued at or below the simplified acquisition threshold in part 2 of the Federal Acquisition Regulation; or
(2) The construction material or components listed by the Government as follows:
As prescribed in 225.7503(b), use the following clause:
(a)
“Component” means any article, material, or supply incorporated directly into construction material.
“Construction material” means an article, material, or supply brought to the construction site by the Contractor or a subcontractor for incorporation into the building or work. The term also includes an item brought to the site preassembled from articles, materials, or supplies. However, emergency life safety systems, such as emergency lighting, fire alarm, and audio evacuation systems, that are discrete systems incorporated into a public building or work and that are produced as complete systems, are evaluated as a single and distinct construction material regardless of when or how the individual parts or components of those systems are delivered to the construction site. Materials purchased directly by the Government are supplies, not construction material.
“Cost of components” means—
(1) For components purchased by the Contractor, the acquisition cost, including transportation costs to the place of incorporation into the end product (whether or not such costs are paid to a domestic firm), and any applicable duty (whether or not a duty-free entry certificate is issued); or
(2) For components manufactured by the Contractor, all costs associated with the manufacture of the component, including transportation costs as described in paragraph (1) of this definition, plus allocable overhead costs, but excluding profit. Cost of components does not include any costs associated with the manufacture of the end product.
“Designated country” means any of the following countries:
“Designated country construction material” means a construction material that—
(1) Is wholly the growth, product, or manufacture of a designated country; or
(2) In the case of a construction material that consists in whole or in part of materials from another country, has been substantially transformed in a designated country into a new and different construction material distinct from the material from which it was transformed.
“Domestic construction material” means—
(1) An unmanufactured construction material mined or produced in the United States; or
(2) A construction material manufactured in the United States, if the cost of its components mined, produced, or manufactured in the United States exceeds 50 percent of the cost of all its components. Components of foreign origin of the same class or kind for which nonavailability determinations have been made are treated as domestic.
“North American Free Trade Agreement (NAFTA) country” means Canada or Mexico.
“North American Free Trade Agreement (NAFTA) country construction material” means a construction material that—
(1) Is wholly the growth, product, or manufacture of a NAFTA country; or
(2) In the case of a construction material that consists in whole or in part of materials from another country, has been substantially transformed in a NAFTA country into a new and different construction material distinct from the material from which it was transformed.
“United States” means the 50 States and the District of Columbia, U.S. territories and possessions, Puerto Rico, the Northern Mariana Islands, and any other place subject to U.S. jurisdiction, but does not include leased bases.
(b) This clause implements the Balance of Payments Program by providing a preference for domestic construction material. In addition, the Contracting Officer has determined that the Trade Agreements Act and the North American Free Trade Agreement (NAFTA) apply to this acquisition. Therefore, the Buy American Act and Balance of Payments Program restrictions are waived for designated country and NAFTA country construction materials.
(c) The Contractor shall use only domestic, designated country, or NAFTA country construction material in performing this contract, except for—
(1) Construction material valued at or below the simplified acquisition threshold in part 2 of the Federal Acquisition Regulation; or
(2) The construction material or components listed by the Government as follows:
(b) This clause implements the Balance of Payments Program by providing a preference for domestic construction material. In addition, the Contracting Officer has determined that the Trade Agreements Act applies to this acquisition. Therefore, the Balance of Payments Program restrictions are waived for designated country construction material.
(c) The Contractor shall use only domestic or designated country construction material in performing this contract, except for—
(1) Construction material valued at or below the simplified acquisition threshold in part 2 of the Federal Acquisition Regulation; or
(2) The construction material or components listed by the Government as follows:
As prescribed in 226.7008(a), use the following clause:
(a)
(b)
(2) Any award resulting from this solicitation will be made only to an offeror which is a historically black college or university or a minority institution at the time of submission of its initial offer including price.
(c)
(1) Perform at least 50 percent of the cost of contract performance incurred for personnel with its own employees; and
(2) Upon request by the Contracting Officer, provide evidence prior to award that the Secretary of Education has determined the offeror to be a historically black college or university or minority institution.
As prescribed in 226.104, use the following clause:
(a)
“Indian” means any person who is a member of any Indian tribe, band, group, pueblo, or community that is recognized by the Federal Government as eligible for services from the Bureau of Indian Affairs (BIA) in accordance with 25 U.S.C. 1452(c) and any “Native” as defined in the Alaska Native Claims Settlement Act (43 U.S.C. 1601).
“Indian organization” means the governing body of any Indian tribe or entity established or recognized by the governing body of an Indian tribe for the purposes of 25 U.S.C. Chapter 17.
“Indian-owned economic enterprise” means any Indian-owned (as determined by the Secretary of the Interior) commercial, industrial, or business activity established or organized for the purpose of profit, provided that Indian ownership constitutes not less than 51 percent of the enterprise.
“Indian tribe” means any Indian tribe, band, group, pueblo, or community, including native villages and native groups (including corporations organized by Kenai, Juneau, Sitka, and Kodiak) as defined in the Alaska Native Claims Settlement Act, that is recognized by the Federal Government as eligible for services from BIA in accordance with 25 U.S.C. 1452 (c).
“Interested party” means a contractor or an actual or prospective offeror whose direct economic interest would be affected by the award of a subcontract or by the failure to award a subcontract.
(b) The Contractor shall use its best efforts to give Indian organizations and Indian-owned economic enterprises the maximum practicable opportunity to participate in the subcontracts it awards, to the fullest extent consistent with efficient performance of the contract.
(c) The Contracting Officer and the Contractor, acting in good faith, may rely on the representation of an Indian organization or Indian-owned economic enterprise as to its eligibility, unless an interested party challenges its status or the Contracting Officer has independent reason to question that status.
(d) In the event of a challenge to the representation of a subcontractor, the Contracting Officer will refer the matter to the U.S. Department of the Interior, Bureau of Indian Affairs, Attn: Chief, Division of Contracting and Grants Administration, 1849 C Street NW, MS-2626-MIB, Washington, DC 20240-4000. The BIA will determine the eligibility and will notify the Contracting Officer. No incentive payment will be made—
(1) Within 50 working days of subcontract award;
(2) While a challenge is pending; or
(3) If a subcontractor is determined to be an ineligible participant.
(e)(1) The Contractor, on its own behalf or on behalf of a subcontractor at any tier, may request an adjustment under the Indian Incentive Program to the following:
(i) The estimated cost of a cost-type contract.
(ii) The target cost of a cost-plus-incentive-fee contract.
(iii) The target cost and ceiling price of a fixed-price incentive contract.
(iv) The price of a firm-fixed-price contract.
(2) The amount of the adjustment that may be made to the contract is 5 percent of the estimated cost, target cost, or firm-fixed price included in the subcontract initially awarded to the Indian organization or Indian-owned economic enterprise.
(3) The Contractor has the burden of proving the amount claimed and must assert its request for an adjustment prior to completion of contract performance.
(4) The Contracting Officer, subject to the terms and conditions of the contract and the availability of funds, will authorize an incentive payment of 5 percent of the amount paid to the subcontractor.
(5) If the Contractor requests and receives an adjustment on behalf of a subcontractor, the Contractor is obligated to pay the subcontractor the adjustment.
(f) The Contractor shall insert the substance of this clause, including this paragraph (f), in all subcontracts that—
(1) Are for other than commercial items; and
(2) Are expected to exceed the simplified acquisition threshold in Part 2 of the Federal Acquisition Regulation.
As prescribed at 227.7009-1, insert the following clause in patent releases, license agreements, and assignments:
The Government reserves the right at any time to contest the enforceability, validity, scope of, or the title to any patent or patent application herein licensed without waiving or forfeiting any right under this contract.
As prescribed at 227.7009-2(a), insert the following clause in patent releases, license agreements, and assignments:
The Contractor hereby releases each and every claim and demand which he now has or may hereafter have against the Government for the manufacture or use by or for the Government prior to the effective date of this contract, of any inventions covered by (i) any of the patents and applications for patent identified in this contract, and (ii) any other patent or application for patent owned or hereafter acquired by him, insofar as and only to the extent that such other patent or patent application covers the manufacture, use, or disposition of (description of subject matter).*
*Bracketed portions of the clause may be omitted when not appropriate or not encompassed by the release as negotiated.
As prescribed at 227.7009-2(b), insert the following clause in patent releases, license agreements, and assignments:
(a) If any license, under substantially the same patents and authorizing substantially the same acts which are authorized under this contract, has been or shall hereafter be granted within the United States, on royalty terms which are more favorable to the licensee than those contained herein, the Government shall be entitled to the benefit of such more favorable terms with respect to all royalties accruing under this contract after the date such more favorable terms become effective, and the Contractor shall promptly notify the Secretary in writing of the granting of such more favorable terms.
(b) In the event any claim of any patent hereby licensed is construed or held invalid by decision of a court of competent jurisdiction, the requirement to pay royalties under this contract insofar as its arises solely by reason of such claim, and any other claim
As prescribed at 227.7009-2(c), insert the following clause in patent releases, license agreements, and assignments:
Notwithstanding any other provision of this contract, the Government shall have the right to terminate the within license, in whole or in part, by giving the Contractor not less than thirty (30) days notice in writing of the date such termination is to be effective; provided, however, that such termination shall not affect the obligation of the Government to pay royalties which have accrued prior to the effective date of such termination.
As prescribed at 227.7009-3(a), insert the following clause in patent releases, license agreements, and assignments:
(a) The Contractor hereby grants to the Government an irrevocable, nonexclusive, nontransferable, and paid up license under the following patents, applications for patent, and any patents granted on such applications, and under any patents which may issue as the result of any reissue, division or continuation thereof, to practice by or cause to be practiced for the Government throughout the world, any and all of the inventions thereunder, in the manufacture and use of any article or material, in the use of any method or process, and in the disposition of any article or material in accordance with law:
(b) No rights are granted or implied by the agreement under any other patents other than as provided above or by operation of law.
(c) Nothing contained herein shall limit any rights which the Government may have obtained by virtue of prior contracts or by operation of law or otherwise.
As prescribed at 227.7009-3(b), insert one of the following clauses in patent releases, license agreements, and assignments:
As prescribed at 227.7009-4(a), insert the following clause in patent releases, license agreements, and assignments:
(a) The Contractor hereby grants to the Government, as represented by the Secretary of _____, an irrevocable, nonexclusive, nontransferable license under the following patents, applications for patent, and any patents granted on such applications, and under any patents which may issue as the result of any reissue, division, or continuation thereunder to practice by or cause to be practiced for the Department of ____, throughout the world, any and all of the inventions thereunder in the manufacture and use of any article or material, in the use of any method or process, and in the disposition of any article or material in accordance with law:
(b) No rights are granted or implied by the agreement under any other patents other than as provided above or by operation of law.
(c) Nothing contained herein shall limit any rights which the Government may have obtained by virtue of prior contracts or by operation of law or otherwise.
As prescribed at 227.7009-4(b), insert the following clause in patent releases, license agreements, and assignments:
The license hereby granted shall remain in full force and effect for the full term of each of the patents referred to in the “License Grant” clause of this contract and any and all patents hereafter issued on applications for patent referred to above unless sooner terminated as elsewhere herein provided.
As prescribed at 227.7009-4(c), insert the following clause in patent releases, license agreements, and assignments:
Subject to the conditions hereinafter stated, royalties shall accrue to the Contractor under this agreement on all articles or materials embodying, or manufactured by the use of, any or all inventions claimed under any unexpired United States patent licensed herein, upon acceptance thereof by the Department of ______, at the rate of ____ percent of the net selling price of such articles or materials (amount) per (name of item) *
* Use bracketed matter as appropriate.
As prescribed at 227.7009-4(d), insert the following clause in patent releases, license agreements, and assignments:
(a) The (procuring office) shall, on or before the sixtieth (60th) day next following the end of each yearly*
* The frequency, date, and length of reporting periods should be selected as appropriate to the particular circumstances of the contract.
(b) Royalties which have accrued under this contract during the yearly* period ending ______ shall be paid to the Contractor (if appropriations therefor are available or become available) within sixty (60) days next following the receipt of a voucher from the Contractor submitted in accordance with the report referred to in (a) of this clause;
As prescribed at 227.7009-4(e), insert the following clause in patent releases, license agreements, and assignments:
The Contractor hereby agrees to grant a separate license under the patents, applications for patents, and improvements referred
As prescribed at 227.7010, insert the following clause in assignments.
The Contractor hereby conveys to the Government, as represented by the Secretary of ______, the entire right, title, and interest in and to the following patents (and applications for patent), in and to the inventions thereof, and in and to all claims and demands whatsoever for infringement thereof heretofore accrued, the same to be held and enjoyed by the Government through its duly appointed representatives to the full end of the term of said patents (and to the full end of the terms of all patents which may be granted upon said applications for patent, or upon any division, continuation-in-part or continuation thereof):
As prescribed at 227.7012, insert the following clause in patent releases, license agreements, and assignments:
This CONTRACT is effective as of the __ day of [month, year], between the UNITED STATES OF AMERICA (hereinafter called the Government), and _____ (hereinafter called the Contractor), (a corporation organized and existing under the laws of the State of _____), (a partnership consisting of _____), (an individual trading as _____), of the City of _____, in the State of _____.
Whereas, the Contractor warrants that it has the right to grant the within license and release, and the Government desires to procure the same, and
Whereas, this contract is authorized by law, including 10 U.S.C. 2386.
Now Therefore, in consideration of the grant, release and agreements hereinafter recited, the parties have agreed as follows:
Article 1. License Grant.*
(Insert the clause at 252.227-7004 for a paid up license, or the clause at 252.227-7006 for a license on a running royalty basis.)
Article 2. License Term.*
(Insert the appropriate alternative clause at 252.227-7005 for a paid up license, or the clause at 252.227-7007 for a license on a running royalty basis.)
Article 3. Release of Past Infringement.
(Insert the clause at 252.227-7001.)
Article 4. Non-Estoppel.
(Insert the clause at 252.227-7000.)
Article 5. Payment.
The Contractor shall be paid the sum of ___ Dollars ($___) in full compensation for the rights herein granted and agreed to be granted. (For a license on a running royalty basis, insert the clause at 252.227-7006 in accordance with the instructions therein, and also the clause as specified at 252.227-7002 and 252.227-7009 and 252.227-7010.)
Article 6. Covenant Against Contingent Fees.
(Insert the clause at FAR 52.203-5.)
Article 7. Assignment of Claims.
(Insert the clause at FAR 52.232-23.)
Article 8. Gratuities.
(Insert the clause at FAR 52.203-3.)
Article 9. Disputes.
(Insert the clause at FAR 52.233-1.)
Article 10. Successors and Assignees.
This Agreement shall be binding upon the Contractor, its successors** and assignees, but nothing contained in this Article shall authorize an assignment of any claim against the Government otherwise than as permitted by law.
In Witness Whereof, the parties hereto have executed this contract.
*If only a release is procured, delete this article; if an assignment is procured, use the clause at 252.227-7011.
**When the Contractor is an individual, change “successors” to “heirs”; if a partnership, modify appropriately.
As prescribed in 227.7103-6(a), use the following clause:
(a)
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(i) Private expense determinations should be made at the lowest practicable level.
(ii) Under fixed-price contracts, when total costs are greater than the firm-fixed-price or ceiling price of the contract, the additional development costs necessary to complete development shall not be considered when determining whether development was at government, private, or mixed expense.
(8)
(9)
(10)
(11)
(12)
(i) Use, modify, reproduce, release, perform, display, or disclose technical data within the Government without restriction; and
(ii) Release or disclose technical data outside the Government and authorize persons to whom release or disclosure has been made to use, modify, reproduce, release, perform, display, or disclose that data for United States government purposes.
(13)
(i) Necessary for emergency repair and overhaul; or
(ii) A release or disclosure of technical data (other than detailed manufacturing or process data) to, or use of such data by, a foreign government that is in the interest of the Government and is required for evaluational or informational purposes;
(iii) Subject to a prohibition on the further reproduction, release, disclosure, or use of the technical data; and
(iv) The contractor or subcontractor asserting the restriction is notified of such reproduction, release, disclosure, or use.
(14)
(15)
(b)
(1)
(i) Data pertaining to an item, component, or process which has been or will be developed exclusively with Government funds;
(ii) Studies, analyses, test data, or similar data produced for this contract, when the study, analysis, test, or similar work was specified as an element of performance;
(iii) 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;
(iv) Form, fit, and function data;
(v) Necessary for installation, operation, maintenance, or training purposes (other than detailed manufacturing or process data);
(vi) Corrections or changes to technical data furnished to the Contractor by the Government;
(vii) Otherwise 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 technical data to another party or the sale or transfer of some or all of a business entity or its assets to another party;
(viii) Data in which the Government has obtained unlimited rights under another Government contract or as a result of negotiations; or
(ix) Data furnished to the Government, under this or any other Government contract or subcontract thereunder, with—
(A) Government purpose license rights or limited rights and the restrictive condition(s) has/have expired; or
(B) Government purpose rights and the Contractor's exclusive right to use such data for commercial purposes has expired.
(2)
(A) That pertain to items, components, or processes developed with mixed funding except when the Government is entitled to unlimited rights in such data as provided in paragraphs (b)(ii) and (b)(iv) through (b)(ix) of this clause; or
(B) 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.
(ii) The five-year period, or such other period as may have been negotiated, shall commence upon execution of the contract, subcontract, letter contract (or similar contractual instrument), contract modification, or option exercise that required development of the items, components, or processes or creation of the data described in paragraph (b)(2)(i)(B) of this clause. Upon expiration of the five-year or other negotiated period, the Government shall have unlimited rights in the technical data.
(iii) The Government shall not release or disclose technical data in which it has government purpose rights unless—
(A) Prior to release or disclosure, the intended recipient is subject to the non-disclosure agreement at 227.7103-7 of the Defense Federal Acquisition Regulation Supplement (DFARS); or
(B) The recipient is a Government contractor receiving access to the data for performance of a Government contract that contains the clause at DFARS 252.227-7025, Limitations on the Use or Disclosure of Government-Furnished Information Marked with Restrictive Legends.
(iv) The Contractor has the exclusive right, including the right to license others, to use technical data in which the Government has obtained government purpose rights under this contract for any commercial purpose
(3)
(A) Pertaining to items, components, or processes developed exclusively at private expense and marked with the limited rights legend prescribed in paragraph (f) of this clause; or
(B) 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.
(ii) The Government shall require a recipient of limited rights data for emergency repair or overhaul to destroy the data and all copies in its possession promptly following completion of the emergency repair/overhaul and to notify the Contractor that the data have been destroyed.
(iii) The Contractor, its subcontractors, and suppliers are not required to provide the Government additional rights to use, modify, reproduce, release, perform, display, or disclose technical data furnished to the Government with limited rights. However, if the Government desires to obtain additional rights in technical data in which it has limited rights, the Contractor agrees to promptly enter into negotiations with the Contracting Officer to determine whether there are acceptable terms for transferring such rights. All technical data in which the Contractor has granted the Government additional rights shall be listed or described in a license agreement made part of the contract. The license shall enumerate the additional rights granted the Government in such data.
(4)
(5)
(i) The parties have agreed otherwise; or
(ii) Any restrictions on the Government's rights to use, modify, reproduce, release, perform, display, or disclose the data have expired or no longer apply.
(6)
(c)
(d)
(e)
(2) Except as provided in paragraph (e)(3) of this clause, technical data that the Contractor asserts should be furnished to the Government with restrictions on use, release, or disclosure are identified in an attachment to this contract (the Attachment). The Contractor shall not deliver any data with restrictive markings unless the data are listed on the Attachment.
(3) In addition to the assertions made in the Attachment, other assertions may be identified after award when based on new information or inadvertent omissions unless the inadvertent omissions would have materially affected the source selection decision. Such identification and assertion shall be submitted to the Contracting Officer as soon as practicable prior to the scheduled date for delivery of the data, in the following format, and signed by an official authorized to contractually obligate the Contractor: Identification and Assertion of Restrictions on the Government's Use, Release, or Disclosure of Technical Data.
The Contractor asserts for itself, or the persons identified below, that the Government's rights to use, release, or disclose the following technical data should be restricted—
(4) When requested by the Contracting Officer, the Contractor shall provide sufficient information to enable the Contracting Officer to evaluate the Contractor's assertions. The Contracting Officer reserves the right to add the Contractor's assertions to the Attachment and validate any listed assertion, at a later date, in accordance with the procedures of the Validation of Restrictive Markings on Technical Data clause of this contract.
(f)
(1)
(2)
The Government's rights to use, modify, reproduce, release, perform, display, or disclose these technical data are restricted by paragraph (b)(2) of the Rights in Technical Data—Noncommercial Items clause contained in the above identified contract. No restrictions apply after the expiration date shown above. Any reproduction of technical data or portions thereof marked with this legend must also reproduce the markings.
(3)
The Government's rights to use, modify, reproduce, release, perform, display, or disclose these technical data are restricted by paragraph (b)(3) of the Rights in Technical Data—Noncommercial Items clause contained in the above identified contract. Any reproduction of technical data or portions thereof marked with this legend must also reproduce the markings. Any person, other than the Government, who has been provided access to such data must promptly notify the above named Contractor.
(4)
The Government's rights to use, modify, reproduce, release, perform, display, or disclose these data are restricted by Contract No. ________ (Insert contract number) ________, License No. ________ (Insert license identifier) ________. Any reproduction of technical data or portions thereof marked with this legend must also reproduce the markings.
(ii) For purposes of this clause, special licenses do not include government purpose license rights acquired under a prior contract (see paragraph (b)(5) of this clause).
(5)
(g)
(1) Have, maintain, and follow written procedures sufficient to assure that restrictive markings are used only when authorized by the terms of this clause; and
(2) Maintain records sufficient to justify the validity of any restrictive markings on technical data delivered under this contract.
(h)
(2)
(i)
(j)
(i) The Government has acquired, by any means, the same or greater rights in the data; or
(ii) The data are available to the public without restrictions.
(2) The limitation in paragraph (j)(1) of this clause—
(i) Includes costs charged by a subcontractor or supplier, at any tier, or costs incurred by the Contractor to acquire rights in subcontractor or supplier technical data, if the subcontractor or supplier has been paid for such rights under any other Government contract or under a license conveying the rights to the Government; and
(ii) Does not include the reasonable costs of reproducing, handling, or mailing the documents or other media in which the technical data will be delivered.
(k)
(2) Whenever any technical data for noncommercial items is to be obtained from a subcontractor or supplier for delivery to the Government under this contract, the Contractor shall use this same clause in the subcontract or other contractual instrument, and require its subcontractors or suppliers to do so, without alteration, except to identify the parties. No other clause shall be used to enlarge or diminish the Government's, the Contractor's, or a higher-tier subcontractor's or supplier's rights in a subcontractor's or supplier's technical data.
(3) Technical data required to be delivered by a subcontractor or supplier shall normally be delivered to the next higher-tier contractor, subcontractor, or supplier. However, when there is a requirement in the prime contract for data which may be submitted with other than unlimited rights by a subcontractor or supplier, then said subcontractor or supplier may fulfill its requirement by submitting such data directly to the
(4) The Contractor and higher-tier subcontractors or suppliers shall not use their power to award contracts as economic leverage to obtain rights in technical data from their subcontractors or suppliers.
(5) In no event shall the Contractor use its obligation to recognize and protect subcontractor or supplier rights in technical data as an excuse for failing to satisfy its contractual obligations to the Government.
(l)
(2) The Government shall not publish a deliverable technical data item or items identified in this contract as being subject to paragraph (l) of this clause or authorize others to publish such data on its behalf if, prior to publication for sale by the Government and within twenty-four (24) months following the date specified in this contract for delivery of such data or the removal of any national security or export control restrictions, whichever is later, the Contractor publishes that item or items for sale and promptly notifies the Contracting Officer of such publication(s). Any such publication shall include a notice identifying the number of this contract and the Government's rights in the published data.
(3) This limitation on the Government's right to publish for sale shall continue as long as the data are reasonably available to the public for purchase.
As prescribed in 227.7203-6(a)(1), use the following clause.
(a)
(1)
(i) Has been sold, leased, or licensed to the public;
(ii) Has been offered for sale, lease, or license to the public;
(iii) Has not been offered, sold, leased, or licensed to the public but will be available for commercial sale, lease, or license in time to satisfy the delivery requirements of this contract; or
(iv) Satisfies a criterion expressed in paragraph (a)(1) (i), (ii), or (iii) of this clause and would require only minor modification to meet the requirements of this contract.
(2)
(3)
(4)
(5)
(6)
(i) A computer program has been successfully operated in a computer and tested to the extent sufficient to demonstrate to reasonable persons skilled in the art that the program can reasonably be expected to perform its intended purpose;
(ii) Computer software, other than computer programs, has been tested or analyzed to the extent sufficient to demonstrate to reasonable persons skilled in the art that the software can reasonably be expected to perform its intended purpose; or
(iii) Computer software documentation required to be delivered under a contract has been written, in any medium, in sufficient detail to comply with requirements under that contract.
(7)
(i) Private expense determinations should be made at the lowest practicable level.
(ii) Under fixed-price contracts, when total costs are greater than the firm-fixed-price or ceiling price of the contract, the additional development costs necessary to complete development shall not be considered when determining whether development was at government, private, or mixed expense.
(8)
(9)
(10)
(11)
(i) Use, modify, reproduce, release, perform, display, or disclose computer software or computer software documentation within the Government without restriction; and
(ii) Release or disclose computer software or computer software documentation outside the Government and authorize persons to whom release or disclosure has been made to use, modify, reproduce, release, perform, display, or disclose the software or documentation for United States government purposes.
(12)
(13)
(14)
(i) Use a computer program with one computer at one time. The program may not be accessed by more than one terminal or central processing unit or time shared unless otherwise permitted by this contract;
(ii) Transfer a computer program to another Government agency without the further permission of the Contractor if the transferor destroys all copies of the program and related computer software documentation in its possession and notifies the licensor of the transfer. Transferred programs remain subject to the provisions of this clause;
(iii) Make the minimum number of copies of the computer software required for safekeeping (archive), backup, or modification purposes;
(iv) Modify computer software provided that the Government may—
(A) Use the modified software only as provided in paragraphs (a)(14) (i) and (iii) of this clause; and
(B) Not release or disclose the modified software except as provided in paragraphs (a)(14) (ii), (v) and (vi) of this clause;
(v) Permit contractors or subcontractors performing service contracts (see 37.101 of the Federal Acquisition Regulation) in support of this or a related contract to use computer software to diagnose and correct deficiencies in a computer program, to modify computer software to enable a computer program to be combined with, adapted to, or merged with other computer programs or when necessary to respond to urgent tactical situations, provided that—
(A) The Government notifies the party which has granted restricted rights that a release or disclosure to particular contractors or subcontractors was made;
(B) Such contractors or subcontractors are subject to the use and non-disclosure agreement at 227.7103-7 of the Defense Federal Acquisition Regulation Supplement (DFARS) or are Government contractors receiving access to the software for performance of a Government contract that contains the clause at DFARS 252.227-7025, Limitations on the Use or Disclosure of Government-Furnished Information Marked with Restrictive Legends;
(C) The Government shall not permit the recipient to decompile, disassemble, or reverse engineer the software, or use software decompiled, disassembled, or reverse engineered by the Government pursuant to paragraph (a)(14)(iv) of this clause, for any other purpose; and
(D) Such use is subject to the limitation in paragraph (a)(14)(i) of this clause; and
(vi) Permit contractors or subcontractors performing emergency repairs or overhaul of items or components of items procured under this or a related contract to use the computer software when necessary to perform the repairs or overhaul, or to modify the computer software to reflect the repairs or overhaul made, provided that—
(A) The intended recipient is subject to the use and non-disclosure agreement at DFARS 227.7103-7 or is a Government contractor receiving access to the software for performance of a Government contract that contains the clause at DFARS 252.227-7025, Limitations on the Use or Disclosure of Government-Furnished Information Marked with Restrictive Legends; and
(B) The Government shall not permit the recipient to decompile, disassemble, or reverse engineer the software, or use software decompiled, disassembled, or reverse engineered by the Government pursuant to paragraph (a)(14)(iv) of this clause, for any other purpose.
(15)
(b)
(1)
(i) Computer software developed exclusively with Government funds;
(ii) Computer software documentation required to be delivered under this contract;
(iii) Corrections or changes to computer software or computer software documentation furnished to the Contractor by the Government;
(iv) Computer software or computer software documentation that is otherwise publicly available or has been released or disclosed by the Contractor or subcontractor without restriction 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;
(v) Computer software or computer software documentation obtained with unlimited rights under another Government contract or as a result of negotiations; or
(vi) Computer software or computer software documentation furnished to the Government, under this or any other Government contract or subcontract thereunder with—
(A) Restricted rights in computer software, limited rights in technical data, or government purpose license rights and the restrictive conditions have expired; or
(B) Government purpose rights and the Contractor's exclusive right to use such software or documentation for commercial purposes has expired.
(2)
(ii) Government purpose rights shall remain in effect for a period of five years unless a different period has been negotiated. Upon expiration of the five-year or other negotiated period, the Government shall have unlimited rights in the computer software or computer software documentation. The government purpose rights period shall commence upon execution of the contract, subcontract, letter contract (or similar contractual instrument), contract modification, or option exercise that required development of the computer software.
(iii) The Government shall not release or disclose computer software in which it has government purpose rights to any other person unless—
(A) Prior to release or disclosure, the intended recipient is subject to the use and non-disclosure agreement at DFARS 227.7103-7; or
(B) The recipient is a Government contractor receiving access to the software or documentation for performance of a Government contract that contains the clause at DFARS 252.227-7025, Limitations on the Use or Disclosure of Government Furnished Information Marked with Restrictive Legends.
(3)
(ii) The Contractor, its subcontractors, or suppliers are not required to provide the Government additional rights in noncommercial computer software delivered or otherwise provided to the Government with restricted rights. However, if the Government desires to obtain additional rights in such software, the Contractor agrees to promptly enter into negotiations with the Contracting Officer to determine whether there are acceptable terms for transferring such rights. All noncommercial computer software in which the Contractor has granted the Government additional rights shall be listed or described in a license agreement made part of the contract (see paragraph (b)(4) of this clause). The license shall enumerate the additional rights granted the Government.
(4)
(ii) Any rights so negotiated shall be identified in a license agreement made part of this contract.
(5)
(i) The parties have agreed otherwise; or
(ii) Any restrictions on the Government's rights to use, modify, reproduce, release, perform, display, or disclose the data have expired or no longer apply.
(6)
(c)
(d)
(1) Computer software, has provided a statement of the license rights obtained in a form acceptable to the Contracting Officer; or
(2) Computer software documentation, has affixed to the transmittal document a statement of the license rights obtained.
(e)
(2) Except as provided in paragraph (e)(3) of this clause, computer software that the Contractor asserts should be furnished to the Government with restrictions on use, release, or disclosure is identified in an attachment to this contract (the Attachment). The Contractor shall not deliver any software with restrictive markings unless the software is listed on the Attachment.
(3) In addition to the assertions made in the Attachment, other assertions may be identified after award when based on new information or inadvertent omissions unless the inadvertent omissions would have materially affected the source selection decision. Such identification and assertion shall be submitted to the Contracting Officer as soon as practicable prior to the scheduled data for delivery of the software, in the following format, and signed by an official authorized to contractually obligate the Contractor: Identification and Assertion of Restrictions on the Government's Use, Release, or Disclosure of Computer Software.
The Contractor asserts for itself, or the persons identified below, that the Government's rights to use, release, or disclose the following computer software should be restricted:
(4) When requested by the Contracting Officer, the Contractor shall provide sufficient information to enable the Contracting Officer to evaluate the Contractor's assertions. The Contracting Officer reserves the right to add the Contractor's assertions to the Attachment and validate any listed assertion, at a later date, in accordance with the procedures of the Validation of Asserted Restrictions—Computer Software clause of this contract.
(f)
(1)
(2)
The Government's rights to use, modify, reproduce, release, perform, display, or disclose this software are restricted by paragraph (b)(2) of the Rights in Noncommercial Computer Software and Noncommercial Computer Software Documentation clause contained in the above identified contract. No restrictions apply after the expiration date shown above. Any reproduction of the software or portions thereof marked with this legend must also reproduce the markings.
(3)
The Government's rights to use, modify, reproduce, release, perform, display, or disclose this software are restricted by paragraph (b)(3) of the Rights in Noncommercial Computer Software and Noncommercial Computer Software Documentation clause contained in the above identified contract. Any reproduction of computer software or portions thereof marked with this legend must also reproduce the markings. Any person, other than the Government, who has been provided access to such software must promptly notify the above named Contractor.
(4)
The Government's rights to use, modify, reproduce, release, perform, display, or disclose this software are restricted by Contract No. ____(Insert contract number)____, License No.____(Insert license identifier)____. Any reproduction of computer software, computer software documentation, or portions thereof marked with this legend must also reproduce the markings.
(ii) For purposes of this clause, special licenses do not include government purpose license rights acquired under a prior contract (see paragraph (b)(5) of this clause).
(5)
(g)
(1) Have, maintain, and follow written procedures sufficient to assure that restrictive markings are used only when authorized by the terms of this clause; and
(2) Maintain records sufficient to justify the validity of any restrictive markings on computer software or computer software documentation delivered under this contract.
(h)
(2)
(i)
(j)
(i) The Government has acquired, by any means, the same or greater rights in the software or documentation; or
(ii) The software or documentation are available to the public without restrictions.
(2) The limitation in paragraph (j)(1) of this clause—
(i) Includes costs charged by a subcontractor or supplier, at any tier, or costs incurred by the Contractor to acquire rights in subcontractor or supplier computer software or computer software documentation, if the subcontractor or supplier has been paid for such rights under any other Government contract or under a license conveying the rights to the Government; and
(ii) Does not include the reasonable costs of reproducing, handling, or mailing the documents or other media in which the software or documentation will be delivered.
(k)
(2) The Contractor and higher tier subcontractors or suppliers shall not use their power to award contracts as economic leverage to obtain rights in computer software or computer software documentation from their subcontractors or suppliers.
(3) The Contractor shall ensure that subcontractor or supplier rights are recognized and protected in the identification, assertion, and delivery processes required by paragraph (e) of this clause.
(4) In no event shall the Contractor use its obligation to recognize and protect subcontractor or supplier rights in computer software or computer software documentation as an excuse for failing to satisfy its contractual obligation to the Government.
(l)
(2) The Government shall not publish a deliverable item or items of computer software
(3) This limitation on the Government's rights to publish for sale shall continue as long as the software or documentation are reasonably available to the public for purchase.
As prescribed in 227.7102-3, use the following clause:
(a)
(1)
(2)
(3) The term
(4)
(b)
(i) Have been provided to the Government or others without restrictions on use, modification, reproduction, release, or further disclosure 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;
(ii) Are form, fit, and function data;
(iii) Are a correction or change to technical data furnished to the Contractor by the Government;
(iv) Are necessary for operation, maintenance, installation, or training (other than detailed manufacturing or process data); or
(v) Have been provided to the Government under a prior contract or licensing agreement through which the Government has acquired the rights to use, modify, reproduce, release, perform, display, or disclose the data without restrictions.
(2) Except as provided in paragraph (b)(1) of this clause, the Government may use, modify, reproduce, release, perform, display, or disclose technical data within the Government only. The Government shall not—
(i) Use the technical data to manufacture additional quantities of the commercial items; or
(ii) Release, perform, display, disclose, or authorize use of the technical data outside the Government without the Contractor's written permission unless a release, disclosure or permitted use is necessary for emergency repair or overhaul of the commercial items furnished under this contract.
(c)
(d)
As prescribed in 227.7103-6(e)(1), 227.7104(e)(1), or 227.7203-6(b), use the following clause:
(a)
(2) For contracts that do not require the delivery of technical data, the term “computer software” is defined in the Rights in Noncommercial Computer and Noncommercial Computer Software Documentation clause of this contract or, if this is a contract awarded under the Small Business Innovative Research Program, the Rights in Noncommercial Technical Data and Computer Software—Small Business Innovative Research (SBIR) Program clause of this contract.
(b)
(1) May reproduce the bid or proposal, or any portions thereof, to the extent necessary to evaluate the offer.
(2) Except as provided in paragraph (d) of this clause, shall use information contained in the bid or proposal only for evaluational purposes and shall not disclose, directly or indirectly, such information to any person including potential evaluators, unless that person has been authorized by the head of the agency, his or her designee, or the Contracting Officer to receive such information.
(c)
(1) Except as provided in paragraphs (c)((2), (d), and (e) of this clause, the Government shall have the rights to use, modify, reproduce, release, perform, display, or disclose information contained in the Contractor's bid or proposal within the Government. The Government shall not release, perform, display, or disclose such information outside the Government without the Contractor's written permission.
(2) The Government's right to use, modify, reproduce, release, perform, display, or disclose information that is technical data or computer software required to be delivered under this contract are determined by the Rights in Technical Data—Noncommercial Items, Rights in Noncommercial Computer Software and Noncommercial Computer Software Documentation, or Rights in Noncommercial Technical Data and Computer Software—Small Business Innovative Research (SBIR) Program clause(s) of this contract.
(d)
(e)
(f)
As prescribed in 227.7103-3(b), 227.7104(e)(2), or 227.7203-3(a), use the following provision:
(a) The terms used in this provision are defined in following clause or clauses contained in this solicitation—
(1) If a successful offeror will be required to deliver technical data, the Rights in Technical Data—Noncommercial Items clause, or, if this solicitation contemplates a contract under the Small Business Innovative Research Program, the Rights in Noncommercial Technical Data and Computer Software—Small Business Innovative Research (SBIR) Program clause.
(2) If a successful offeror will not be required to deliver technical data, the Rights in Noncommercial Computer Software and
(b) The identification and assertion requirements in this provision apply only to technical data, including computer software documents, or computer software to be delivered with other than unlimited rights. For contracts to be awarded under the Small Business Innovative Research Program, the notification requirements do not apply to technical data or computer software that will be generated under the resulting contract. Notification and identification is not required for restrictions based solely on copyright.
(c) Offers submitted in response to this solicitation shall identify, to the extent known at the time an offer is submitted to the Government, the technical data or computer software that the Offeror, its subcontractors or suppliers, or potential subcontractors or suppliers, assert should be furnished to the Government with restrictions on use, release, or disclosure.
(d) The Offeror's assertions, including the assertions of its subcontractors or suppliers or potential subcontractors or suppliers shall be submitted as an attachment to its offer in the following format, dated and signed by an official authorized to contractually obligate the Offeror:
The Offeror asserts for itself, or the persons identified below, that the Government's rights to use, release, or disclose the following technical data or computer software should be restricted:
(e) An offeror's failure to submit, complete, or sign the notification and identification required by paragraph (d) of this provision with its offer may render the offer ineligible for award.
(f) If the Offeror is awarded a contract, the assertions identified in paragraph (d) of this provision shall be listed in an attachment to that contract. Upon request by the Contracting Officer, the Offeror shall provide sufficient information to enable the Contracting Officer to evaluate any listed assertion.
As prescribed in 227.7104(a), use the following clause:
(a)
(1)
(i) Has been sold, leased, or licensed to the public;
(ii) Has been offered for sale, lease, or license to the public;
(iii) Has not been offered, sold, leased, or licensed to the public but will be available for commercial sale, lease, or license in time to satisfy the delivery requirements of this contract; or
(iv) Satisfies a criterion expressed in paragraph (a)(1)(i), (ii), or (iii) of this clause and would require only minor modification to meet the requirements of this contract.
(2)
(3)
(4)
(5)
(6)
(7)
(i) (Applicable to technical data other than computer software documentation.) An item, component, or process, exists and is workable. Thus, the item or component must have been constructed or the process practiced. Workability is generally established when the item, component, or process has been analyzed or tested sufficiently to demonstrate to reasonable people skilled in the applicable art that there is a high probability that it will operate as intended. Whether, how much, and what type of analysis or testing is required to establish workability depends on the nature of the item, component, or process, and the state of the art. To be considered “developed,” the item, component, or process need not be at the stage where it could be offered for sale or sold on the commercial market, nor must the item, component or process be actually reduced to practice within the meaning of Title 35 of the United States Code;
(ii) A computer program has been successfully operated in a computer and tested to the extent sufficient to demonstrate to reasonable persons skilled in the art that the program can reasonably be expected to perform its intended purpose;
(iii) Computer software, other than computer programs, has been tested or analyzed to the extent sufficient to demonstrate to reasonable persons skilled in the art that the software can reasonably be expected to perform its intended purpose; or
(iv) Computer software documentation required to be delivered under a contract has been written, in any medium, in sufficient detail to comply with requirements under that contract.
(8)
(i) Private expense determinations should be made at the lowest practicable level.
(ii) Under fixed-price contracts, when total costs are greater than the firm-fixed-price or ceiling price of the contract, the additional development costs necessary to complete development shall not be considered when determining whether development was at government, private, or mixed expense.
(9)
(10)
(11)
(12)
(13)
(14)
(i) Necessary for emergency repair and overhaul; or
(ii) A release or disclosure of technical data (other than detailed manufacturing or process data) to, or use of such data by, a foreign government that is in the interest of the Government and is required for evaluational or informational purposes;
(iii) Subject to a prohibition on the further reproduction, release disclosure, or use of the technical data; and
(iv) The Contractor or subcontractor asserting the restriction is notified of such reproduction, release, disclosure, or use.
(15)
(16)
(17)
(i) Use a computer program with one computer at one time. The program may not be accessed by more than one terminal or central processing unit or time shared unless otherwise permitted by this contract;
(ii) Transfer a computer program to another Government agency without the further permission of the Contractor if the transferor destroys all copies of the program and related computer software documentation in its possession and notifies the licensor of the transfer. Transferred programs remain subject to the provisions of this clause;
(iii) Make the minimum number of copies of the computer software required for safekeeping (archive), backup, or modification purposes;
(iv) Modify computer software provided that the Government may—
(A) Use the modified software only as provided in paragraphs (a)(17) (i) and (iii) of this clause; and
(B) Not release or disclose the modified software except as provided in paragraphs (a)(17) (ii), (v) and (vi) of this clause;
(v) Permit contractors or subcontractors performing service contracts (see 37.101 of the Federal Acquisition Regulation) in support of this or a related contract to use computer software to diagnose and correct deficiencies in a computer program, to modify computer software to enable a computer program to be combined with, adapted to, or merged with other computer programs or when necessary to respond to urgent tactical situations, provided that—
(A) The Government notifies the party which has granted restricted rights that a release or disclosure to particular contractors or subcontractors was made;
(B) Such contractors or subcontractors are subject to the non-disclosure agreement at 227.7103-7 of the Defense Federal Acquisition Regulation Supplement (DFARS or are Government contractors receiving access to the software for performance of a Government contract that contains the clause at DFARS 252.227-7025, Limitations on the Use or Disclosure of Government-Furnished Information Marked with Restrictive Legends;
(C) The Government shall not permit the recipient to decompile disassemble, or reverse engineer the software, or use software decompiled, disassembled, or reverse engineered by the Government pursuant to paragraph (a)(17)(iv) of this clause, for any other purpose; and
(D) Such use is subject to the limitation in paragraph (a)(17)(i) of this clause; and
(vi) Permit contractors or subcontractors performing emergency repairs or overhaul of items or components of items, procured under this or a related contract to use the computer software when necessary to perform the repairs or overhaul, or to modify the computer software to reflect the repairs or overhaul made, provided that—
(A) The intended recipient is subject to the non-disclosure agreement at DFARS 227.7103-7 or is a Government contractor receiving access to the software for performance of a Government contract that contains the clause at DFARS 252.227-7025, Limitations on the Use or Disclosure of Government Furnished Information Marked with Restrictive Legends; and
(B) The Government shall not permit the recipient to decompile, disassemble, or reverse engineer the software, or use software decompiled, disassembled, or reverse engineered by the Government pursuant to paragraph (a)(17)(iv) of this clause, for any other purpose.
(18)
(19)
(20)
(b)
(1)
(i) Form, fit, and function data;
(ii) Necessary for installation, operation, maintenance, or training purposes (other than detailed manufacturing or process data);
(iii) Corrections or changes to Government-furnished technical data or computer software;
(iv) Otherwise publicly available or have been released or disclosed by the Contractor or a 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 technical data or computer software to another party or the sale or transfer of some or all of a business entity or its assets to another party;
(v) Data or software in which the Government has acquired previously unlimited rights under another Government contract or through a specific license; and
(vi) SBIR data upon expiration of the SBIR data rights period.
(2)
(3)
(4)
(ii) The Government may not release or disclose SBIR data to any person, other than its support services contractors, except—
(A) As expressly permitted by the Contractor;
(B) For evaluation purposes; or
(C) A release, disclosure, or use that is necessary for emergency repair or overhaul of items operated by the Government.
(iii) A release or disclosure of SBIR data to the Government's support services contractors, or a release or disclosure under paragraph (b)(4)(ii)(B) or (C) of this clause, may be made only if, prior to release or disclosure, the intended recipient is subject to the use and non-disclosure agreement at DFARS 227.7103-7 or is a Government contractor receiving access to the technical data or software for performance of a Government contract that contains the clause at DFARS 252.227-7025, Limitations on the Use of Disclosure of Government-Furnished Information Marked with Restrictive Legends.
(5)
(6)
(i) The parties have agreed otherwise; or
(ii) Any restrictions on the Government's rights to use, modify, release, perform, display, or disclose the technical data or computer software have expired or no longer apply.
(7)
(c)
(d)
(1) Technical data, has affixed to the transmittal document a statement of the license rights obtained; or
(2) Computer software, has provided a statement of the license rights obtained in a form acceptable to the Contracting Officer.
(e)
(2) Except as provided in paragraph (e)(3) of this clause, technical data or computer software that the Contractor asserts should be furnished to the Government with restrictions on use, release, or disclosure is identified in an attachment to this contract (the Attachment). The Contractor shall not deliver any technical data or computer software with restrictive markings unless the technical data or computer software are listed on the Attachment.
(3) In addition to the assertions made in the Attachment, other assertions may be identified after award when based on new information or inadvertent omissions unless the inadvertent omissions would have materially affected the source selection decision. Such identification and assertion shall be submitted to the Contracting Officer as soon as practicable prior to the scheduled date for delivery of the technical data or computer software, in the following format, and signed by an official authorized to contractually obligate the Contractor:
The Contractor asserts for itself, or the persons identified below, that the Government's rights to use, release, or disclose the following technical data or computer software should be restricted:
(4) When requested by the Contracting Officer, the Contractor shall provide sufficient information to enable the Contracting Officer to evaluate the Contractor's assertions. The Contracting Officer reserves the right to add the Contractor's assertions to the Attachment and validate any listed assertions, at a later date, in accordance with the procedures of the Validation of Asserted Restrictions—Computer Software and/or Validation of Restrictive Markings on Technical Data clauses of this contract.
(f)
(1)
(2)
(3)
(4)
(5)
The Government's rights to use, modify, reproduce, release, perform, display, or disclose this technical data or computer software are restricted by Contract No. ________ (Insert contract number) ________, License No. ________ (Insert license identifier) ________. Any reproduction of technical data, computer software, or portions thereof marked with this legend must also reproduce the markings.
(ii) For purposes of this clause, special licenses do not include government purpose license rights acquired under a prior contract (see paragraph (b)(6) of this clause).
(6)
(g)
(1) Have, maintain, and follow written procedures sufficient to assure that restrictive markings are used only when authorized by the terms of this clause; and
(2) Maintain records sufficient to justify the validity of any restrictive markings on technical data or computer software delivered under this contract.
(h)
(1)
(2)
(i)
(j)
(i) The Government has acquired, by any means, the same or greater rights in the data or software; or
(ii) The data are available to the public without restrictions.
(2) The limitation in paragraph (j)(1) of this clause—
(i) Includes costs charged by a subcontractor or supplier, at any tier, or costs incurred by the Contractor to acquire rights in subcontractor of supplier technical data or computer software, if the subcontractor or supplier has been paid for such rights under any other Government contract or under a license conveying the rights to the Government; and
(ii) Does not include the reasonable costs of reproducing, handling, or mailing the documents or other media in which the technical data or computer software will be delivered.
(k)
(2) Whenever any noncommercial technical data or computer software is to be obtained from a subcontractor or supplier for delivery to the Government under this contract, the Contractor shall use this same clause in the subcontract or other contractual instrument, and require its subcontractors or suppliers to do so, without alteration, except to identify the parties. The Contractor shall use the Technical Data—Commercial Items clause of this contract to obtain technical
(3) Technical data required to be delivered by a subcontractor or supplier shall normally be delivered to the next higher tier contractor, subcontractor, or supplier. However, when there is a requirement in the prime contract for technical data which may be submitted with other than unlimited rights by a subcontractor or supplier, then said subcontractor or supplier may fulfill its requirement by submitting such technical data directly to the Government, rather than through a higher tier contractor, subcontractor, or supplier.
(4) The Contractor and higher tier subcontractors or suppliers shall not use their power to award contracts as economic leverage to obtain rights in technical data or computer software from their subcontractors or suppliers.
(5) In no event shall the Contractor use its obligation to recognize and protect subcontractor or supplier rights in technical data or computer software as an excuse for failing to satisfy its contractual obligation to the Government.
(l)
(2) Upon expiration of the SBIR data rights period, the Government will not exercise its right to publish or authorize others to publish an item of technical data or computer software identified in this contract as being subject to paragraph (l) of this clause if the Contractor, prior to the expiration of the SBIR data rights period, or within two years following delivery of the data or software item, or within twenty-four months following the removal of any national security or export control restrictions, whichever is later, publishes such data or software item(s) and promptly notifies the Contracting Officer of such publication(s). Any such publication(s) shall include a notice identifying the number of this contract and the Government's rights in the published data.
(3) This limitation on the Government's right to publish for sale shall continue as long as the technical data or computer software are reasonably available to the public for purchase.
As prescribed in 227.7104(e)(3) or 227.7203-6(c), use the following clause:
(a)
(2) Other terms used in this clause are defined in the Rights in Noncommercial Computer Software and Noncommercial Computer Software Documentation clause of this contract.
(b)
(c)
(d)
(2) Based upon the information provided, if the—
(i) Contractor agrees that an asserted restriction is not valid, the Contracting Officer may—
(A) Strike or correct the unjustified marking at the Contractor's expense; or
(B) Return the computer software to the Contractor for correction at the Contractor's expense. If the Contractor fails to correct or strike the unjustified restrictions and return
(ii) Contracting Officer concludes that the asserted restriction is appropriate for this contract, the Contracting Officer shall so notify the Contractor in writing.
(3) The Contractor's failure to provide a timely response to a Contracting Officer's request for information or failure to provide sufficient information to enable the Contracting Officer to evaluate an asserted restriction shall constitute reasonable grounds for questioning the validity of an asserted restriction.
(e)
(2) The absence of a challenge to an asserted restriction shall not constitute validation under this clause. 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)
(i) State the specific grounds for challenging the asserted restriction;
(ii) Require the Contractor to respond within sixty (60) days;
(iii) Require the Contractor to provide justification for the assertion based upon records kept in accordance with paragraph (b) of this clause and such other documentation that are reasonably available to the Contractor, in sufficient detail to enable the Contracting Officer to determine the validity of the asserted restrictions; and
(iv) State that a Contracting Officer's final decision, during the three-year period preceding this challenge, or action of a court of competent jurisdiction or Board of Contract Appeals that sustained the validity of an identical assertion made by the Contractor (or a licensee) shall serve as justification for the asserted restriction.
(2) The Contracting Officer shall extend the time for response if the Contractor submits a written request showing the need for additional time to prepare a response.
(3) The Contracting Officer may request additional supporting documentation if, in the Contracting Officer's opinion, the Contractor's explanation does not provide sufficient evidence to justify the validity of the asserted restrictions. The Contractor agrees to promptly respond to the Contracting Officer's request for additional supporting documentation.
(4) Notwithstanding challenge by the Contracting Officer, the parties may agree on the disposition of an asserted restriction at any time prior to a Contracting Officer's final decision or, if the Contractor has appealed that decision, filed suit, or provided notice of an intent to file suit, at any time prior to a decision by a court of competent jurisdiction or Board of Contract Appeals.
(5) If the Contractor fails to respond to the Contracting Officer's request for information or additional information under paragraph (f)(1) of this clause, the Contracting Officer shall issue a final decision, in accordance with the Disputes clause of this contract, pertaining to the validity of the asserted restriction.
(6) If the Contracting Officer, after reviewing the written explanation furnished pursuant to paragraph (f)(1) of this clause, or any other available information pertaining to the validity of an asserted restriction, determines that the asserted restriction has—
(i) Not been justified, the Contracting Officer shall issue promptly a final decision, in accordance with the Disputes clause of this contract, denying the validity of the asserted restriction; or
(ii) Been justified, the Contracting Officer shall issue promptly a final decision, in accordance with the Disputes clause of this contract, validating the asserted restriction.
(7) A Contractor receiving challenges to the same asserted restriction(s) from more than one Contracting Officer shall notify each Contracting Officer of the other challenges. The notice shall also state which Contracting Officer initiated the first in time unanswered challenge. The Contracting Officer who initiated the first in time unanswered challenge, after consultation with the other Contracting Officers who have challenged the restrictions and the Contractor, shall formulate and distribute a schedule that provides the contractor a reasonable opportunity for responding to each challenge.
(g)
(i) For a period of ninety (90) days from the date of the Contracting Officer's final decision to allow the Contractor to appeal to the appropriate Board of Contract Appeals or to file suit in an appropriate court;
(ii) For a period of one year from the date of the Contracting Officer's final decision if, within the first ninety (90) days following the Contracting Officer's final decision, the Contractor has provided notice of an intent to file suit in an appropriate court; or
(iii) Until final disposition by the appropriate Board of Contract Appeals or court of competent jurisdiction, if the Contractor has: (A) appealed to the Board of Contract Appeals or filed suit an appropriate court within ninety (90) days; or (B) submitted, within ninety (90) days, a notice of intent to file suit in an appropriate court and filed suit within one year.
(2) The Contractor agrees that the Government may strike, correct, or ignore the restrictive markings if the Contractor fails to—
(i) Appeal to a Board of Contract Appeals within ninety (90) days from the date of the Contracting Officer's final decision;
(ii) File suit in an appropriate court within ninety (90) days from such date; or
(iii) File suit within one year after the date of the Contracting Officer's final decision if the Contractor had provided notice of intent to file suit within ninety (90) days following the date of the Contracting Officer's final decision.
(3) The agency head, on a nondelegable basis, may determine that urgent or compelling circumstances do not permit awaiting the filing of suit in an appropriate court, or the rendering of a decision by a court of competent jurisdiction or Board of Contract Appeals. In that event, the agency head shall notify the Contractor of the urgent or compelling circumstances. Notwithstanding paragraph (g)(1) of this clause, the Contractor agrees that the agency may use, modify, reproduce, release, perform, display, or disclose computer software marked with (i) government purpose legends for any purpose, and authorize others to do so; or (ii) restricted or special license rights for government purposes only. The Government agrees not to release or disclose such software unless, prior to release or disclosure, the intended recipient is subject to the use and non-disclosure agreement at 227.7103-7 of the Defense Federal Acquisition Regulation Supplement (DFARS), or is a Government contractor receiving access to the software for performance of a Government contract that contains the clause at DFARS 252.227-7025, Limitations on the Use or Disclosure of Government-Furnished Information Marked with Restrictive Legends. The agency head's determination may be made at any time after the date of the Contracting Officer's final decision and shall not affect the Contractor's right to damages against the United States, or other relief provided by law, if its asserted restrictions are ultimately upheld.
(h)
(1) Sustained—
(i) Any restrictive marking on such computer software shall be struck or corrected at the contractor's expense or ignored; and
(ii) If the asserted restriction is found not to be substantially justified, the Contractor shall be liable to the Government for payment of the cost to the Government of reviewing the asserted restriction and the fees and other expenses (as defined in 28 U.S.C. 2412(d)(2)(A)) incurred by the Government in challenging the restriction, unless special circumstances would make such payment unjust.
(2) Not sustained—
(i) The Government shall be bound by the asserted restriction; and
(ii) If the challenge by the Government is found not to have been made in good faith, the Government shall be liable to the Contractor for payment of fees and other expenses (as defined in 28 U.S.C. 2412(d)(2)(A)) incurred by the Contractor in defending the restriction.
(i)
As prescribed in 227.7105-3, 227.7106(a) or 227.7205(a), use the following clause:
(a)
(b)
(1) “Computer data base” means a collection of data recorded in a form capable of being processed by a computer. The term does not include computer software.
(2) “Computer program” means a set of instructions, rules, or routines recorded in a form that is capable of causing a computer to perform a specific operation or series of operations.
(3) “Computer software” means computer programs, source code, source code listings,
(4) “Computer software documentation” means owner's manuals, user's manuals, installation instructions, operating instructions, and other similar items, regardless of storage medium, that explain the capabilities of the computer software or provide instructions for using the software.
(5) “Unlimited rights” means the rights to use, modify, reproduce, perform, display, release, or disclose a work in whole or in part, in any manner, and for any purpose whatsoever, and to have or authorize others to do so.
(6) The term “works” includes computer data bases, computer software, or computer software documentation; literary, musical, choreographic, or dramatic compositions; pantomimes; pictorial, graphic, or sculptural compositions; motion pictures and other audiovisual compositions; sound recordings in any medium; or, items of similar nature.
(c)
(2) When a work is first produced, created, or generated under this contract, and such work is required to be delivered under this contract, the Contractor shall assign copyright in those works to the Government. The Contractor, unless directed to the contrary by the Contracting Officer, shall place the following notice on such works: “© (
For phonorecords, the “©” markings shall be replaced by a “P”.
(3) The Contractor grants to the Government a royalty-free, world-wide, nonexclusive, irrevocable license to reproduce, prepare derivative works from, distribute, perform, or display, and to have or authorize others to do so, the Contractor's copyrighted works not first produced, created, or generated under this contract that have been incorporated into the works deliverable under this contract.
(d)
(1) Has affixed to the transmittal document a statement of the license rights obtained; or
(2) For computer software, has provided a statement of the license rights obtained in a form acceptable to the Contracting Officer.
(e)
(f)
As prescribed at 227.7105-2(a), use the following clause:
(a) The term
(b) Except as otherwise provided in this contract, the Contractor hereby grants to the Government a nonexclusive, paid-up license throughout the world (1) to distribute, perform publicly, and display publicly the works called for under this contract and (2) to authorize others to do so for Government purposes.
(c) The Contractor shall indemnify and save and hold harmless the Government, and its officers, agents, and employees acting for the Government, against any liability, including costs and expenses, (1) for violation of proprietary rights, copyrights, or rights of privacy or publicity arising out of the creation, delivery, or use, of any works furnished under this contract, or (2) based upon any libelous or other unlawful matter contained in same works.
As prescribed at 227.7107-1(a), use the following clause:
The Government shall have unlimited rights, in all drawings, designs, specifications, notes and other works developed in the performance of this contract, including the right to use same on any other Government design or construction without additional compensation to the Contractor. The Contractor hereby grants to the Government a paid-up license throughout the world to all such works to which he may assert or establish any claim under design patent or copyright laws. The Contractor for a period of three (3) years after completion of the project agrees to furnish the original or copies of all such works on the request of the Contracting Officer.
As prescribed at 227.7107-1(b), use the following clause:
All designs, drawings, specifications, notes and other works developed in the performance of this contract shall become the sole property of the Government and may be used on any other design or construction without additional compensation to the Contractor. The Government shall be considered the “person for whom the work was prepared” for the purpose of authorship in any copyrightable work under 17 U.S.C. 201(b). With respect thereto, the Contractor agrees not to assert or authorize others to assert any rights nor establish any claim under the design patent or copyright laws. The Contractor for a period of three (3) years after completion of the project agrees to furnish all retained works on the request of the Contracting Officer. Unless otherwise provided in this contract, the Contractor shall have the right to retain copies of all works beyond such period.
As prescribed at 227.7107-3, use the following clause:
In the performance of this contract, the Contractor shall, to the extent practicable, make maximum use of structures, machines, products, materials, construction methods, and equipment that are readily available through Government or competitive commercial channels, or through standard or proven production techniques, methods, and processes. Unless approved by the Contracting Officer, the Contractor shall not produce a design or specification that requires in this construction work the use of structures, products, materials, construction equipment, or processes that are known by the Contractor to be available only from a sole source. The Contractor shall promptly report any such design or specification to the Contracting Officer and give the reason why it is considered necessary to so restrict the design or specification.
As prescribed in 227.7103-6(c), 227.7104(f)(1), or 227.7203-6(d), use the following clause:
(a)(1) For contracts requiring the delivery of technical data, the terms “limited rights” and “Government purpose rights” are defined in the Rights in Technical Data—Noncommercial Items clause of this contract.
(2) For contracts that do not require the delivery of technical data, the terms “government purpose rights” and “restricted rights” are defined in the Rights in Noncommercial Computer Software and Noncommercial Computer Software Documentation clause of this contract.
(3) For Small Business Innovative Research program contracts, the terms “limited rights” and “restricted rights” are defined in the Rights in Noncommercial Technical Data and Computer Software—Small Business Innovative Research (SBIR) Program clause of this contract.
(b) Technical data or computer software provided to the Contractor as Government furnished information (GFI) under this contract may be subject to restrictions on use, modification, reproduction, release, performance, display, or further disclosure.
(1)
(2)
(3)
(c)
(1) 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 technical data or computer software received from the Government with restrictive legends by the Contractor or any person to whom the Contractor has released or disclosed such data or software; and
(2) That the party whose name appears on the restrictive legend, in addition to any other rights it may have, is a third party beneficiary who has the right of direct action against the Contractor, or any person to whom the Contractor has released or disclosed such data or software, for the unauthorized duplication, release, or disclosure of technical data or computer software subject to restrictive legends.
As prescribed at 227.7103-8(a), use the following clause:
The Government shall have the right to require, at any time during the performance of this contract, within two (2) years after either acceptance of all items (other than data or computer software) to be delivered under this contract or termination of this contract, whichever is later, delivery of any technical data or computer software item identified in this contract as “deferred delivery” data or computer software. The obligation to furnish such technical data required to be prepared by a subcontractor and pertaining to an item obtained from him shall expire two (2) years after the date Contractor accepts the last delivery of that item from that subcontractor for use in performing this contract.
As prescribed at 227.7103-8(b), use the following clause:
In addition to technical data or computer software specified elsewhere in this contract to be delivered hereunder, the Government may, at any time during the performance of this contract or within a period of three (3) years after acceptance of all items (other than technical data or computer software) to be delivered under this contract or the termination of this contract, order any technical data or computer software generated in the performance of this contract or any subcontract hereunder. When the technical data or computer software is ordered, the Contractor shall be compensated for converting the data or computer software into the prescribed form, for reproduction and delivery. The obligation to deliver the technical data of a subcontractor and pertaining to an item obtained from him shall expire three (3) years after the date the Contractor accepts the last delivery of that item from that subcontractor under this contract. The Government's rights to use said data or computer software shall be pursuant to the “Rights in Technical Data and Computer Software” clause of this contract.
As prescribed in 227.7103-6(d), 227.7104(f)(2), or 227.7203-6(e), use the following provision:
The Offeror shall attach to its offer an identification of all documents or other media incorporating technical data or computer software it intends to deliver under this contract with other than unlimited rights that are identical or substantially similar to documents or other media that the Offeror has produced for, delivered to, or is obligated to deliver to the Government under any contract or subcontract. The attachment shall identify—
(a) The contract number under which the data or software were produced;
(b) The contract number under which, and the name and address of the organization to whom, the data or software were most recently delivered or will be delivered; and
(c) Any limitations on the Government's rights to use or disclose the data or software, including, when applicable, identification of the earliest date the limitations expire.
As prescribed at 227.7103-6(e)(2) or 227.7104(e)(4), use the following clause:
(a) If technical data specified to be delivered under this contract, is not delivered within the time specified by this contract or is deficient upon delivery (including having restrictive markings not identified in the list described in the clause at 252.227-7013(e)(2) or 252.227-7018(e)(2) of this contract), the Contracting Officer may until such data is accepted by the Government, withhold payment to the Contractor of ten percent (10%) of the total contract price or amount unless a lesser withholding is specified in the contract. Payments shall not be withheld nor any other action taken pursuant to this paragraph when the Contractor's failure to make timely delivery or to deliver such data without deficiencies arises out of causes beyond the control and without the fault or negligence of the Contractor.
(b) The withholding of any amount or subsequent payment to the Contractor shall not be construed as a waiver of any rights accruing to the Government under this contract.
As prescribed in 227.7103-17, use the following clause:
The United States Government may duplicate, use, and disclose in any manner for any purposes whatsoever, including delivery to other governments for the furtherance of mutual defense of the United States Government and other governments, all technical data including reports, drawings and blueprints, and all computer software, specified to be delivered by the Contractor to the United States Government under this contract.
As prescribed in 227.7107-(1)(c), use the following clause:
(a) Shop drawings for construction means drawings, submitted to the Government by the Construction Contractor, subcontractor or any lower-tier subcontractor pursuant to a construction contract, showing in detail (i) the proposed fabrication and assembly of structural elements and (ii) the installation (i.e., form, fit, and attachment details) of materials or equipment. The Government may duplicate, use, and disclose in any manner and for any purpose shop drawings delivered under this contract.
(b) This clause, including this paragraph (b), shall be included in all subcontracts hereunder at any tier.
As prescribed at 227.304-4, insert the following clause:
The Contractor will include the clause at FAR 52.227-12, Patent Rights—Retention by the Contractor (Long Form), suitably modified to identify the parties, in all subcontracts, regardless of tier, for experimental, developmental, or research work to be performed by other than a small business firm or nonprofit organization.
As prescribed at 227.7103-6(e)(3) or 227.7104(e)(5), use the following clause:
All technical data delivered under this contract shall be accompanied by the following written declaration: The Contractor, __________, hereby declares that, to the best of its knowledge and belief, the technical data delivered herewith under Contract No. __________ is complete, accurate, and complies with all requirements of the contract.
As prescribed in 227.7102-3(c), 227.7103(e)(4), 227.7104(e)(6), or 227.7203-6(f), use the following clause:
(a)
(b)
(c)
(d)
(2) If the Contracting Officer, after reviewing the written data furnished pursuant to paragraph (d)(1) of this clause, or any other available information pertaining to the validity of a restrictive marking, determines that reasonable grounds exist to question the current validity of the marking and that continued adherence to the marking would make impracticable the subsequent competitive acquisition of the item, component, or process to which the technical data relates, the Contracting Officer shall follow the procedures in paragraph (e) of this clause.
(3) If the Contractor or subcontractor fails to respond to the Contracting Officer's request for information under paragraph (d)(1) of this clause, and the Contracting Officer determines that continued adherence to the marking would make impracticable the subsequent competitive acquisition of the item, component, or process to which the technical data relates, the Contracting Officer may challenge the validity of the marking as described in paragraph (e) of this clause.
(e)
(i) State the specific grounds for challenging the asserted restriction;
(ii) Require a response within sixty (60) days justifying and providing sufficient evidence as to the current validity of the asserted restriction;
(iii) State that a DoD Contracting Officer's final decision, issued pursuant to paragraph (g) of this clause, sustaining the validity of a restrictive marking identical to the asserted restriction, within the three-year period preceding the challenge, shall serve as justification for the asserted restriction if the validated restriction was asserted by the same Contractor or subcontractor (or any licensee of such Contractor or subcontractor) to which such notice is being provided; and
(iv) State that failure to respond to the challenge notice may result in issuance of a final decision pursuant to paragraph (f) of this clause.
(2) The Contracting Officer shall extend the time for response as appropriate if the Contractor or subcontractor submits a written request showing the need for additional time to prepare a response.
(3) The Contractor's or subcontractor's written response shall be considered a claim within the meaning of the Contract Disputes Act of 1978 (41 U.S.C. 601, et seq.), and shall be certified in the form prescribed at 33.207 of the Federal Acquisition Regulation, regardless of dollar amount.
(4) A Contractor or subcontractor receiving challenges to the same restrictive markings from more than one Contracting Officer shall notify each Contracting Officer of the existence of more than one challenge. The notice shall also state which Contracting Officer initiated the first in time unanswered challenge. The Contracting Officer initiating the first in time unanswered challenge after consultation with the Contractor or subcontractor and the other Contracting Officers, shall formulate and distribute a schedule for responding to each of the challenge notices to all interested parties. The schedule shall afford the Contractor or subcontractor an opportunity to respond to each challenge notice. All parties will be bound by this schedule.
(f)
(g)
(2)(i) If the Contracting Officer determines that the validity of the restrictive marking is not justified, the Contracting Officer shall issue a final decision to the Contractor or
(ii) The Government agrees that it will continue to be bound by the restrictive marking of a period of ninety (90) days from the issuance of the Contracting Officer's final decision under paragraph (g)(2)(i) of this clause. The Contractor or subcontractor agrees that, if it intends to file suit in the United States Claims Court it will provide a notice of intent to file suit to the Contracting Officer within ninety (90) days from the issuance of the Contracting Officer's final decision under paragraph (g)(2)(i) of this clause. If the Contractor or subcontractor fails to appeal, file suit, or provide a notice of intent to file suit to the Contracting Officer within the ninety (90)-day period, the Government may cancel or ignore the restrictive markings, and the failure of the Contractor or subcontractor to take the required action constitutes agreement with such Government action.
(iii) The Government agrees that it will continue to be bound by the restrictive marking where a notice of intent to file suit in the United States Claims Court is provided to the Contracting Officer within ninety (90) days from the issuance of the final decision under paragraph (g)(2)(i) of this clause. The Government will no longer be bound, and the Contractor or subcontractor agrees that the Government may strike or ignore the restrictive markings, if the Contractor or subcontractor fails to file its suit within one (1) year after issuance of the final decision. Notwithstanding the foregoing, where the head of an agency determines, on a nondelegable basis, that urgent or compelling circumstances will not permit waiting for the filing of a suit in the United States Claims Court, the Contractor or subcontractor agrees that the agency may, following notice to the Contractor or subcontractor, authorize release or disclosure of the technical data. Such agency determination may be made at any time after issuance of the final decision and will not affect the Contractor's or subcontractor's right to damages against the United States where its restrictive markings are ultimately upheld or to pursue other relief, if any, as may be provided by law.
(iv) The Government agrees that it will be bound by the restrictive marking where an appeal or suit is filed pursuant to the Contract Disputes Act until final disposition by an agency Board of Contract Appeals or the United States Claims Court. Notwithstanding the foregoing, where the head of an agency determines, on a nondelegable basis, following notice to the Contractor that urgent or compelling circumstances will not permit awaiting the decision by such Board of Contract Appeals or the United States Claims Court, the Contractor or subcontractor agrees that the agency may authorize release or disclosure of the technical data. Such agency determination may be made at any time after issuance of the final decision and will not affect the Contractor's or subcontractor's right to damages against the United States where its restrictive markings are ultimately upheld or to pursue other relief, if any, as may be provided by law.
(h)
(i) The restrictive marking on the technical data shall be cancelled, corrected or ignored; and
(ii) If the restrictive marking is found not to be substantially justified, the Contractor or subcontractor, as appropriate, shall be liable to the Government for payment of the cost to the Government of reviewing the restrictive marking and the fees and other expenses (as defined in 28 U.S.C. 2412(d)(2)(A)) incurred by the Government in challenging the marking, unless special circumstances would make such payment unjust.
(2) If the Contractor or subcontractor appeals or files suit and if, upon final disposition of the appeal or suit, the Contracting Officer's decision is not sustained—
(i) The Government shall continue to be bound by the restrictive marking; and
(ii) The Government shall be liable to the Contractor or subcontractor for payment of fees and other expenses (as defined in 28 U.S.C. 2412(d)(2)(A)) incurred by the Contractor or subcontractor in defending the marking, if the challenge by the Government is found not to have been made in good faith.
(i)
(1) Is publicly available;
(2) Has been furnished to the United States without restriction; or
(3) Has been otherwise made available without restriction. Only the Contracting Officer's final decision resolving a formal challenge by sustaining the validity of a restrictive marking constitutes “validation” as addressed in 10 U.S.C. 2321.
(j)
(k)
(l)
As prescribed at 227.303(a), insert the following clause:
The Contractor shall furnish the Contracting Officer the following:
(a) Interim reports every twelve (12) months (or such longer period as may be specified by the Contracting Officer) from the date of the contract, listing subject inventions during that period and stating that all subject inventions have been disclosed or that there are no such inventions.
(b) A final report, within three (3) months after completion of the contracted work, listing all subject inventions or stating that there were no such inventions.
(c) Upon request, the filing date, serial number and title, a copy of the patent application and patent number, and issue data for any subject invention for which the Contractor has retained title.
(d) Upon request, the Contractor shall furnish the Government an irrevocable power to inspect and make copies of the patent application file.
As prescribed in 228.370(a), use the following clause:
(a) Costs for providing employee war-hazard benefits in accordance with paragraph (b) of the Workers’ Compensation and War-Hazard Insurance clause of this contract are allowable if the Contractor—
(1) Submits proof of loss files to support payment or denial of each claim;
(2) Subject to Contracting Officer approval, makes lump sum final settlement of any open claims and obtains necessary release documents within one year of the expiration or termination of this contract, unless otherwise extended by the Contracting Officer; and
(3) Provides the Contracting Officer at the time of final settlement of this contract—
(i) An investigation report and evaluation of any potential claim; and
(ii) An estimate of the dollar amount involved should the potential claim mature.
(b) The cost of insurance for liabilities reimbursable under this clause is not allowable.
(c) The Contracting Officer may require the Contractor to assign to the Government all right, title, and interest to any refund, rebate, or recapture arising out of any claim settlements.
(d) The Contractor agrees to—
(1) Investigate and promptly notify the Contracting Officer in writing of any occurrence which may give rise to a claim or potential claim, including the estimated amount of the claim;
(2) Give the Contracting Officer immediate written notice of any suit or action filed which may result in a payment under this clause; and
(3) Provide assistance to the Government in connection with any third party suit or claim relating to this clause which the Government elects to prosecute or defend in its own behalf.
As prescribed in 228.370(b), use the following clause:
(a) Definitions. As used in this clause—
(1)
(i) Aircraft to be delivered to the Government under this contract (either before or
(ii) Aircraft, whether in a state of disassembly or reassembly, furnished by the Government to the Contractor under this contract, including all property installed, in the process of installation, or temporarily removed; provided that the aircraft and property are not covered by a separate bailment agreement.
(2)
(3)
(i) For land based aircraft,
(ii) For seaplanes,
(iii) For helicopters,
(iv) For vertical take-off aircraft,
(v) All aircraft off the Contractor's premises shall be considered to be in flight when on the ground or water for reasonable periods of time following emergency landings, landings made in performance of this contract, or landings approved in writing by the Contracting Officer.
(4)
(5)
(6)
(b) Except as may be specifically provided in the Schedule as an exception to this clause, the Government assumes the risk of damage to, or loss or destruction of aircraft
(c) The Government's assumption of risk for aircraft in the open shall continue unless the Contracting Officer finds that the aircraft is in the open under unreasonable conditions, and the Contractor fails to take prompt corrective action.
(1) The Contracting Officer, when finding aircraft in the open under unreasonable conditions, shall notify the Contractor in writing of the unreasonable conditions and require the Contractor to make corrections within a reasonable time.
(2) Upon receipt of the notice, the Contractor shall promptly correct the cited conditions, regardless of whether there is agreement that the conditions are unreasonable. If the Contracting Officer later determines that the cited conditions were not unreasonable, an equitable adjustment shall be made in the contract price for any additional costs incurred in correcting the conditions. Any dispute as to the unreasonableness of the conditions or the equitable adjustment shall be considered a dispute under the Disputes clause of this contract.
(3) If the Contracting Officer finds that the Contractor failed to act promptly to correct the cited conditions or failed to correct the conditions within a reasonable time, the Contracting Officer may terminate the Government's assumption of risk for any aircraft in the open under the cited conditions. The termination will be effective at 12:01 am on the fifteenth day following the day the written notice is received by the Contractor. If the Contracting Officer later determines that the Contractor acted promptly to correct the cited conditions or that the time taken by the Contractor was not unreasonable, an equitable adjustment shall be made in the contract price for any additional costs incurred as a result of termination of the Government's assumption of risk. Any dispute as to the timeliness of the Contractor's action or the equitable adjustment shall be considered a dispute under the Disputes clause of this contract.
(4) If the Government terminates its assumption of risk, the risk of loss for Government-furnished property shall be determined
(5) The Contractor shall promptly notify the Contracting Officer when unreasonable conditions have been corrected. If the Government elects to again assume the risk of loss and relieve the Contractor of liabilities, the Contracting Officer will notify the Contractor. The Contractor shall be entitled to an equitable adjustment in the contract price for any insurance costs extending from the end of the third working day after the Contractor notice of correction until the Contractor is notified that the Government will assume the risk of loss. If the Government does not again assume the risk of loss and conditions have been corrected, the Contractor shall be entitled to an equitable adjustment for insurance costs, if any, extending after the third working day.
(d) The Government's assumption of risk shall not extend to damage, loss, or destruction of aircraft which—
(1) Results from failure of the Contractor, due to willful misconduct or lack of good faith of any of the Contractor's managerial personnel, to maintain and administer a program for the protection and preservation of aircraft in the open and during operation in accordance with sound industrial practice. The term
(2) Is sustained during flight if the flight crew members have not been approved in writing by the Government Flight Representative, who has been authorized in accordance with the combined regulation entitled “Contractor's Flight and Ground Operations” (Air Force Regulation 55-22, Army Regulation 95-20, NAVAIR Instruction 3710.1C, and Defense Logistics Agency Manual 8210.1);
(3) Occurs in the course of transportation by rail, or by conveyance on public streets, highways, or waterways, except for Government-furnished property;
(4) Is covered by insurance;
(5) Consists of wear and tear; deterioration (including rust and corrosion); freezing; or mechanical, structural, or electrical breakdown or failure, unless these are the result of other loss, damage or destruction covered by this clause. (This exclusion does not apply to Government-furnished property if damage consists of reasonable wear and tear or deterioration, or results from inherent vice in the property.); or
(6) Is sustained while the aircraft is being worked on and is a direct result of the work unless such damage, loss, or destruction would be covered by insurance which would have been maintained by the Contractor, but for the Government's assumption of risk.
(e) With the exception of damage, loss, or destruction in flight, the Contractor assumes the risk and shall be responsible for the first $25,000 of loss or damage to aircraft in the open or during operation resulting from each separate event, except for reasonable wear and tear and to the extent the loss or damage is caused by negligence of Government personnel. If the Government elects to require that the aircraft be replaced or restored by the Contractor to its condition immediately prior to the damage, the equitable adjustment in the price authorized by paragraph (i) of this clause shall not include the dollar amount of the risk assumed by the Contractor. In the event the Government does not elect repair or replacement, the Contractor agrees to credit the contract price or pay the Government $25,000 (or the amount of the loss, if less) as directed by the Contracting Officer.
(f) A subcontractor shall not be relieved from liability for damage, loss, or destruction of aircraft while in its possession or control, except to the extent that the subcontract, with the written approval of the Contracting Officer, provides for relief from each liability. In the absence of approval, the subcontract shall contain provisions requiring the return of aircraft in as good condition as when received, except for reasonable wear and tear or for the utilization of the property in accordance with the provisions of this contract. Where a subcontractor has not been relieved from liability, and damage, loss, or destruction occurs, the Contractor shall enforce liability against the subcontractor for the benefit of the Government.
(g) The Contractor warrants that the contract price does not and will not include, except as may be authorized in this clause, any charge or contingency reserve for insurance covering damage, loss, or destruction of aircraft while in the open, during operation, or in flight when the risk has been assumed by the Government, even if the assumption may be terminated for aircraft in the open.
(h) In the event of damage, loss, or destruction of aircraft in the open, during operation, or in flight, the Contractor shall take all reasonable steps to protect the aircraft from further damage, to separate damaged and undamaged aircraft, to put all aircraft in the best possible order and further, except in cases covered by paragraph (e) of this clause, the Contractor shall furnish to the Contracting Officer a statement of—
(1) The damaged, lost, or destroyed aircraft;
(2) The time and origin of the damage, loss, or destruction;
(3) All known interests in commingled property of which aircraft are a part; and
(4) The insurance, if any, covering the interest in commingled property.
Except in cases covered by paragraph (e) of this clause, the Contracting Officer will make an equitable adjustment in the contract price for expenditures made by the Contractor in performing the obligations under this paragraph.
(i) If prior to delivery and acceptance by the Government, aircraft is damaged, lost, or destroyed and the Government assumed the risk, the Government shall either—
(1) Require that the aircraft be replaced or restored by the Contractor to the condition immediately prior to the damage, in which event the Contracting Officer will make an equitable adjustment in the contract price and the time for contract performance; or
(2) Terminate this contract with respect to the aircraft, in which event the Contractor shall be paid the contract price for the aircraft (or, if applicable, any work to be performed on the aircraft) less any amount the Contracting Officer determines—
(i) It would have cost the Contractor to complete the aircraft (or any work to be performed on the aircraft) together with anticipated profit on uncompleted work; and
(ii) Would be the value of the damaged aircraft or any salvage retained by the Contractor.
The Contracting Officer shall prescribe the manner of disposition of the damaged, lost, or destroyed aircraft, or any parts of the aircraft. If any additional costs of such disposition are incurred by the Contractor, a further equitable adjustment will be made in the amount due the Contractor. Failure of the parties to agree upon termination costs or an equitable adjustment with respect to any aircraft shall be considered a dispute under the Disputes clause.
(j) In the event the Contractor is reimbursed or compensated by a third person for damage, loss, or destruction of aircraft and has also been compensated by the Government, the Contractor shall equitably reimburse the Government. The Contractor shall do nothing to prejudice the Government's right to recover against third parties for damage, loss, or destruction. Upon the request of the Contracting Officer or authorized representative, the Contractor shall at Government expense furnish to the Government all reasonable assistance and cooperation (including the prosecution of suit and the execution of instruments of assignment of subrogation) in obtaining recovery.
(k) The Contractor agrees to be bound by the operating procedures contained in the combined regulation entitled “Contractor's Flight and Ground Operations” in effect on the date of contract award.
As prescribed in 228.370(c), use the following clause:
(a)
(1)
(i) Aircraft furnished by the Contractor under this contract (either before or after Government acceptance); or
(ii) Aircraft furnished by the Government to the Contractor, including all Government property placed on, installed or attached to the aircraft; provided that the aircraft and property are not covered by a separate bailment agreement.
(2)
(i) For land-based aircraft,
(ii) For seaplanes,
(iii) For helicopters,
(iv) For vertical take-off aircraft,
(3)
(b) This clause takes precedence over any other provision of this contract (particularly paragraph (g) of the Government Property (Cost-Reimbursement, Time-and-Materials, or Labor-Hour Contracts) clause and paragraph (c) of the Insurance—Liability to Third Persons clause).
(c) Unless the flight crew members previously have been approved in writing by the Government Flight Representative, who has been authorized in accordance with the combined regulation entitled “Contractor's
(1) Relieved of liability for damage, loss, or destruction of aircraft sustained during flight; or
(2) Reimbursed for liabilities to third persons for loss or damage to property or for death or bodily injury caused by aircraft during flight.
(d)(1) The loss, damage, or destruction of aircraft during flight in an amount exceeding $100,000 or 20 percent of the estimated cost of this contract, whichever is less, is subject to an equitable adjustment when the Contractor is not liable under—
(i) The Government Property (Cost-Reimbursement, Time-and-Materials, or Labor-Hour Contracts) clause, and
(ii) Paragraph (c) of this clause.
(2) The equitable adjustment under this contract for the resulting repair, restoration, or replacement of aircraft shall be made—
(i) In the estimated cost, the delivery schedule, or both; and
(ii) In the amount of any fee to be paid to the Contractor.
(3) In determining the amount of equitable adjustment in the fee, the Contracting Officer will consider any fault of the Contractor, its employees, or any subcontractor that materially contributed to the damage, loss, or destruction.
(4) Failure to agree on any adjustment shall be a dispute concerning a question of fact within the meaning of the Disputes clause of this contract.
(e) The Contractor agrees to be bound by the operating procedures contained in the combined regulation entitled “Contractor's Flight and Found Operations” in effect on the date of contract award.
As prescribed in 228.370(d), use the following clause:
(a) As used in this clause—
(1)
(i) Assigned to duty outside the United States for the performance of this contract; and
(ii) Found to be missing from his or her place of employment under circumstances that make it appear probable that the absence is due to the action of the force of any power not allied with the United States in a common military effort; or
(iii) Known to have been taken prisoner, hostage, or otherwise detained by the force of such power, whether or not actually engaged in employment at the time of capture; provided, that at the time of capture or detention, the person was either—
(A) Engaged in activity directly arising out of and in the course of employment under this contract; or
(B) Captured in an area where required to be only in order to perform this contract.
(2) A
(3)
(4)
(b) If pursuant to an agreement entered into prior to capture, the Contractor is obligated to pay and has paid detention benefits to a captured person, or the person's dependents, the Government will reimburse the Contractor up to an amount equal to the lesser of—
(1) Total wage or salary being paid at the time of capture due from the Contractor to the captured person for the period of detention; or
(2) That amount which would have been payable if the detention had occurred under circumstances covered by the War Hazards Compensation Act.
(c) The period of detention shall not be considered as time spent in contract performance, and the Government shall not be obligated to make payment for that time except as provided in this clause.
(d) The obligation of the Government shall apply to the entire period of detention, except that it is subject to the availability of funds from which payment can be made. The rights and obligations of the parties under this clause shall survive prior expiration, completion, or termination of this contract.
(e) The Contractor shall not be reimbursed under this clause for payments made if the employees were entitled to compensation for capture and detention under the War Hazards Compensation Act, as amended.
As prescribed in 228.170, use the following provision:
(a) Offerors shall furnish a bid guarantee in the amount of $____ with their bids. The offeror receiving notice of award shall furnish—
(1) A performance bond in the penal amount of $____; and
(2) Payment in full of any sum due the Government.
(b) The Contractor shall furnish the performance bond to the Contracting Officer within __ days after receipt of the notice of award. The Contracting Officer will not issue the notice to proceed until receipt of an acceptable performance bond and payment of any sum due the Government.
(c) Bonds supported by sureties whose names appear on the list contained in Treasury Department Circular 570 are acceptable. Performance bonds from individual sureties are acceptable if each person acting as a surety provides a SF 28, Affidavit of Individual Surety, and a pledge of assets acceptable to the Contracting Officer.
As prescribed in 228.370(e), use the following clause:
(a) The Contractor shall report promptly to the Administrative Contracting Officer all pertinent facts relating to each accident involving an aircraft, missile, or space launch vehicle being manufactured, modified, repaired, or overhauled in connection with this contract.
(b) If the Government conducts an investigation of the accident, the Contractor will cooperate and assist the Government's personnel until the investigation is complete.
(c) The Contractor will include a clause in subcontracts under this contract to require subcontractor cooperation and assistance in accident investigations.
As prescribed at 228.370(f), use the following clause:
(a) The requirements of this clause apply only if the Contractor is not a Spanish concern.
(b) The Contractor shall, without additional expense to the United States Government, comply with all applicable Spanish Government laws pertaining to sanitation, traffic, security, employment of labor, and all other laws relevant to the performance of this contract. The Contractor shall hold the United States Government harmless and free from any liability resulting from the Contractor's failure to comply with such laws.
(c) The contractor shall, at its own expense, provide and maintain during the entire performance of this contract, all workmen's compensation, employees’ liability, bodily injury insurance, and other required insurance adequate to cover the risk assumed by the Contractor. The Contractor shall indemnify and hold harmless the United States Government from liability resulting from all claims for damages as a result of death or injury to personnel or damage to real or personal property related to the performance of this contract.
(d) The Contractor agrees to represent in writing to the Contracting Officer, prior to commencement of work and not later than 15 days after the date of the Notice to Proceed, that the Contractor has obtained the required types of insurance in the following minimum amounts. The representation also shall state that the Contractor will promptly notify the Contracting Officer of any notice of cancellation of insurance or material change in insurance coverage that could affect the United States Government's interests.
(e) The Contractor shall provide the Contracting Officer with a similar representation for all subcontracts with non-Spanish concerns that will perform work in Spain under this contract.
(f) Insurance policies required herein shall be purchased from Spanish insurance companies or other insurance companies legally authorized to conduct business in Spain. Such policies shall conform to Spanish laws and regulations and shall—
(1) Contain provisions requiring submission to Spanish law and jurisdiction of any problem that may arise with regard to the interpretation or application of the clauses and conditions of the insurance policy;
(2) Contain a provision authorizing the insurance company, as subrogee of the insured
(3) Contain a provision worded as follows: “The insurance company waives any right of subrogation against the United States of America that may arise by reason of any payment under this policy.”;
(4) Not contain any deductible amount or similar limitation; and
(5) Not contain any provisions requiring submission to any type of arbitration.
As prescribed in 229.402-1, use the following clause:
Invoices submitted in accordance with the terms and conditions of this contract shall be exclusive of all taxes or duties for which relief is available.
As prescribed in 229.402-70(a), use the following clause:
(a) Prices set forth in this contract are exclusive of all taxes and duties from which the United States Government is exempt by virtue of tax agreements between the United States Government and the Contractor's government. The following taxes or duties have been excluded from the contract price:
(b) The Contractor's invoice shall list separately the gross price, amount of tax deducted, and net price charged.
(c) When items manufactured to United States Government specifications are being acquired, the Contractor shall identify the materials or components intended to be imported in order to ensure that relief from import duties is obtained. If the Contractor intends to use imported products from inventories on hand, the price of which includes a factor for import duties, the Contractor shall ensure the United States Government's exemption from these taxes. The Contractor may obtain a refund of the import duties from its government or request the duty-free import of an amount of supplies or components corresponding to that used from inventory for this contract.
As prescribed in 229.402-70(a), add the following paragraph (d) to the basic clause:
(d) Tax relief will be claimed in Germany pursuant to the provisions of the Agreement Between the United States of America and Germany Concerning Tax Relief to be Accorded by Germany to United States Expenditures in the Interest of Common Defense. The Contractor shall use Abwicklungsschein fuer abgabenbeguenstigte Lieferungen/Leistungen nach dem Offshore Steuerabkommen (Performance Certificate for Tax-Free Deliveries/Performance according to the Offshore Tax Relief Agreement) or other documentary evidence acceptable to the German tax authorities. All purchases made and paid for on a tax-free basis during a 30-day period may be accumulated, totaled, and reported as tax-free.
As prescribed in 229.402-70(b), use the following clause:
Imported products required for the direct benefit of the United States Forces are authorized to be acquired duty-free by the Contractor in accordance with the provisions of the Agreement Between the United States of America and Germany Concerning Tax Relief to be Accorded by Germany to United States Expenditures in the Interest of Common Defense.
As prescribed in 229.402-70(c), use the following clause:
(a) The Contractor represents that the contract price, including the prices in subcontracts awarded under this contract, does not include taxes from which the United States Government is exempt.
(b) The United States Government is exempt from payment of Imposta Valore
(1) The Contractor shall include the following information on invoices submitted to the United States Government:
(i) The contract number.
(ii) The IVA tax exemption claimed pursuant to Article 72 of Decree Law 633, dated October 26, 1972.
(iii) The following fiscal code(s):
(2)(i) Upon receipt of the invoice, the paying office will include the following certification on one copy of the invoice:
“I certify that this invoice is true and correct and reflects expenditures made in Italy for the Common Defense by the United States Government pursuant to international agreements. The amount to be paid does not include the IVA tax, because this transaction is not subject to the tax in accordance with Article 72 of Decree Law 633, dated October 26, 1972.” An authorized United States Government official will sign the copy of the invoice containing this certification.
(ii) The paying office will return the certified copy together with payment to the Contractor. The payment will not include the amount of the IVA tax.
(iii) The Contractor shall retain the certified copy to substantiate non-payment of the IVA tax.
(3) The Contractor may address questions regarding the IVA tax to the Ministry of Finance, IVA Office, Rome (06) 520741.
(c) In addition to the IVA tax, purchases by the United States Forces in Italy are exempt from the following taxes:
(1) Imposta di Fabbricazione (Production Tax for Petroleum Products).
(2) Imposta di Consumo (Consumption Tax for Electrical Power).
(3) Dazi Doganali (Customs Duties).
(4) Tassa di Sbarco e d'Imbarco sulle Merci Transportate per Via Aerea e per Via Maritima (Port Fees).
(5) Tassa de Circolazione sui Veicoli (Vehicle Circulation Tax).
(6) Imposta di Registro (Registration Tax).
(7) Imposta di Bollo (Stamp Tax).
As prescribed in 229.402-70(d), use the following clause:
(a) “Direct Contractor,” as used in this clause, means an individual, company, or entity with whom an agency of the United States Department of Defense has executed a written agreement that allows duty-free import of equipment, materials, and supplies into Spain for the construction, development, maintenance, and operation of Spanish-American installations and facilities.
(b) The Contractor is hereby designated as a Direct Contractor under the provisions of Complementary Agreement 5, articles 11, 14, 15, 17, and 18 of the Agreement on Friendship, Defense and Cooperation between the United States Government and the Kingdom of Spain, dated July 2, 1982. The Agreement relates to contacts to be performed in whole or part in Spain, the provisions of which are hereby incorporated into and made a part of this contract by reference.
(c) The Contractor shall apply to the appropriate Spanish authorities for approval of status as a Direct Contractor in order to complete duty-free import of non-Spanish equipment, materials, and supplies represented as necessary for contract performance by the Contracting Officer. Orders for equipment, materials, and supplies placed prior to official notification of such approval shall be at the Contractor's own risk. The Contractor must submit its documentation in sufficient time to permit processing by the appropriate United States and Spanish Government agencies prior to the arrival of the equipment, material, or supplies in Spain. Seasonal variations in processing times are common, and the Contractor should program its projects accordingly. Any delay or expense arising directly or indirectly from this process shall not excuse untimely performance (except as expressly allowed in other provisions of this contract), constitute a direct or constructive change, or otherwise provide a basis for additional compensation or adjustment of any kind.
(d) To ensure that all duty-free imports are properly accounted for, exported, or disposed of, in accordance with Spanish law, the Contractor shall obtain a written bank letter of guaranty payable to the Treasurer of the United States, or such other authority as may be designated by the Contracting Officer, in the amount set forth in paragraph (g) of this clause, prior to effecting any duty-free imports for the performance of this contract.
(e) If the Contractor fails to obtain the required guaranty, the Contractor agrees that the Contracting Officer may withhold a portion of the contract payments in order to establish a fund in the amount set forth in paragraph (g) of this clause. The fund shall be used for the payment of import taxes in
(f) The amount of the bank letter of guaranty or size of the fund required under paragraph (d) or (e) of this clause normally shall be 5 percent of the contract value. However, if the Contractor demonstrates to the Contracting Officer's satisfaction that the amount retained by the United States Government or guaranteed by the bank is excessive, the amount shall be reduced to an amount commensurate with contingent import tax and duty-free liability. This bank guaranty or fund shall not be released to the Contractor until the Spanish General Directorate of Customs verifies the accounting, export, or disposition of the equipment, material, or supplies imported on a duty-free basis.
(g) The amount required under paragraph (d), (e), or (f) of this clause is (
(h) The Contractor agrees to insert the provisions of this clause, including this paragraph (h), in all subcontracts.
As prescribed in 229.402-70(e), use the following clause:
(a) The Contractor represents that the contract prices, including subcontract prices, do not include the taxes identified herein, or any other taxes from which the United States Government is exempt.
(b) In accordance with tax relief agreements between the United States Government and the Spanish Government, and because the incumbent contract arises from the activities of the United States Forces in Spain, the contract will be exempt from the following excise, luxury, and transaction taxes:
(1) Derechos de Aduana (Customs Duties).
(2) Impuesto de Compensacion a la Importacion (Compensation Tax on Imports).
(3) Transmissiones Patrionomiales (Property Transfer Tax).
(4) Impuesto Sobre el Lujo (Luxury Tax).
(5) Actos Juridocos Documentados (Legal Official Transactions).
(6) Impuesto Sobre el Trafico de Empresas (Business Trade Tax).
(7) Impuestos Especiales de Fabricacion (Special Products Tax).
(8) Impuesto Sobre el Petroleo y Derivados (Tax on Petroleum and its By-Products).
(9) Impuesto Sobre el Uso de Telefona (Telephone Tax).
(10) Impuesto General Sobre la Renta de Sociedades y demas Entidades Juridicas (General Corporation Income Tax).
(11) Impuesto Industrial (Industrial Tax).
(12) Impuesto de Rentas Sobre el Capital (Capital Gains Tax).
(13) Plus Vailia (Increase on Real Property).
(14) Contribucion Territorial Urbana (Metropolitan Real Estate Tax).
(15) Contribucion Territorial Rustica y Pecuaria (Farmland Real Estate Tax).
(16) Impuestos de la Diputacion (County Service Charges).
(17) Impuestos Municipal y Tasas Parafiscales (Municipal Tax and Charges).
As prescribed in 229.402-70(f), use the following clause:
The supplies or services identified in this contract are to be delivered at a price exclusive of value added tax under arrangements between the appropriate United States authorities and Her Majesty's Customs and Excise (Reference Priv 46/7). By executing this contract, the Contracting Officer certifies that these supplies or services are being purchased for United States Government official purposes only.
As prescribed in 229.402-70(g), use the following clause:
The Contractor shall insert the following statement on all Material Inspection and Receiving Reports (DD Form 250 series) for Contracting Officer approval: “I certify that the items listed on this invoice have been received by the United States.”
As prescribed in 229.402-70(h), use the following clause:
Any import dutiable articles, components, or raw materials supplied to the United States Government under this contract shall be exclusive of any United Kingdom import duties. Any imported items supplied for which import duty already has been paid will be supplied at a price exclusive of the amount of import duty paid. The Contractor is advised to contact Her Majesty's (HM) Customs and Excise to obtain a refund upon completion of the contract (Reference HM Customs and Excise Notice No. 431, February 1973, entitled “Relief from Customs Duty and/or Value Added Tax on United States Government Expenditures in the United Kingdom”).
As prescribed in 229.402-70(i), use the following clause:
(a) Pursuant to an agreement between the United States Government and Her Majesty's (HM) Customs and Excise, fuels and lubricants used by passenger vehicles (except taxis) in the performance of this contract will be exempt from customs duty and value added tax. Therefore, the procedures outlined in HM Customs and Excise Notice No. 431B, August 1982, and any amendment thereto, shall be used to obtain relief from both customs duty and value added tax for fuel used under the contract. These procedures shall apply to both loaded and unloaded miles. The unit prices shall be based on the recoupment by the Contractor of customs duty in accordance with the following allowances:
(1) Vehicles (except taxis) with a seating capacity of less than 29, one gallon for every 27 miles.
(2) Vehicles with a seating capacity of 29-53, one gallon for every 13 miles.
(3) Vehicles with a seating capacity of 54 or more, one gallon for every 10 miles.
(b) In the event the mileage of any route is increased or decreased within 10 percent, resulting in no change in route price, the customs duty shall be reclaimed from HM Customs and Excise on actual mileage performed.
As prescribed in 229.402-70(j), use the following clause:
(a) Pursuant to an agreement between the United States Government and Her Majesty's (HM) Customs and Excise, it is possible to obtain relief from customs duty on fuels and lubricants used in support of certain contracts. If vehicle fuels and lubricants are used in support of this contract, the Contractor shall seek relief from customs duty in accordance with HM Customs Notice No. 431, February 1973, entitled “Relief from Customs Duty and/or Value Added Tax on United States Government Expenditures in the United Kingdom.” Application should be sent to the Contractor's local Customs and Excise Office.
(b) Specific information should be included in the request for tax relief, such as the number of vehicles involved, types of vehicles, rating of vehicles, fuel consumption, estimated mileage per contract period, and any other information that will assist HM Customs and Excise in determining the amount of relief to be granted.
(c) Within 30 days after the award of this contract, the Contractor shall provide the Contracting Officer with evidence that an attempt to obtain such relief has been initiated. In the event the Contractor does not attempt to obtain relief within the time specified, the Contracting Officer may deduct from the contract price the amount of relief that would have been allowed if HM Customs and Excise had favorably considered the request for relief.
(d) The amount of any rebate granted by HM Customs and Excise shall be paid in full to the United States Government. Checks shall be made payable to the Treasurer of the United States and forwarded to the Administrative Contracting Officer.
As prescribed in 231.100-70, use the following clause:
When the allowability of costs under this contract is determined in accordance with part 31 of the Federal Acquisition Regulation (FAR), allowability shall also be determined in accordance with part 231 of the Defense FAR Supplement, in effect on the date of this contract.
As prescribed in 232.412-70(a), use the following clause:
(a) Notwithstanding any other provision of this contract, advance payments will be made for contract performance in accordance with the Determinations, Findings, and Authorization for Advance payment dated _______.
(b) Payments made in accordance with this clause shall be governed by the terms and conditions of the Advance Payment Pool Agreement between the United States of America and (
As prescribed in 232.412-70(b), use the following clause:
Payment will be by a dual payee Treasury check made payable to the contractor or the (
As prescribed in 232.502-4-70(a), use the following clause:
If this contract includes foreign military sales (FMS) requirements, the Contractor shall—
(a) Submit a separate progress payment request for each progress payment rate; and
(b) Submit a supporting schedule showing—
(1) The amount of each request distributed to each country's requirements; and
(2) Total price per contract line item applicable to each separate progress payment rate.
(c) Identify in each progress payment request the contract requirements to which it applies (i.e., FMS or U.S.);
(d) Calculate each request on the basis of the prices, costs (including costs to complete), subcontractor progress payments, and progress payment liquidations of the contract requirements to which it applies; and
(e) Distribute costs among contract line items and countries in a manner acceptable to the Administrative Contracting Officer.
As prescribed in 232.502-4-70(b), use the following clause:
(a) If the contractor is a small business concern, the Progress Payments clause of this contract is modified to change each mention of the progress payment rate and liquidation rate (excepting paragraph (k),
(b) If the contractor is a small disadvantaged business concern, the Progress Payments clause of this contract is modified to change each mention of the progress payment rate and liquidation rate (excepting paragraph (k),
As prescribed in 232.412-70(c), use the following clause:
(a) The Government will reimburse the Contractor for any advance payments made by the Contractor, as a mentor firm, to a protege firm, pursuant to an approved mentor-protege agreement, provided—
(1) The Contractor's subcontract with the protege firm includes a provision substantially the same as FAR 52.232-12, Advance Payments;
(2) The Contractor has administered the advance payments in accordance with the policies of FAR subpart 32.4; and
(3) The Contractor agrees that any financial loss resulting from the failure or inability of the protege firm to repay any unliquidated advance payments is the sole financial responsibility of the Contractor.
(b) For a fixed price type contract, advance payments made to a protege firm shall be paid and administered as if there were 100 percent progress payments. The Contractor shall include as a separate attachment with each Standard Form (SF) 1443, Contractor's Request for Progress Payment, a request for reimbursement of advance payments made to a protege firm. The attachment shall provide a separate calculation of lines 14a through 14e of SF 1443 for each protege, reflecting the status of advance payments made to that protege.
(c) For cost reimbursable, contracts, reimbursement of advance payments shall be made via public voucher. The Contractor shall show the amounts of advance payments made to each protege on the public voucher, in the form and detail directed by the cognizant contracting officer or contract auditor.
As prescribed in 232.705-70, use the following clause:
(a) Contract line item(s) ___* through ___* are incrementally funded. For these item(s), the sum of $___* of the total price is presently available for payment and allotted to this contract. An allotment schedule is set forth in paragraph (i) of this clause.
(b) For item(s) identified in paragraph (a) of this clause, the Contractor agrees to perform up to the point at which the total amount payable by the Government, including reimbursement in the event of termination of those item(s) for the Government's convenience, approximates the total amount currently allotted to the contract. The Contractor will not be obligated to continue work on those item(s) beyond that point. The Government will not be obligated in any event to reimburse the Contractor in excess of the amount allotted to the contract for those item(s) regardless of anything to the contrary in the clause entitled “Termination for Convenience of the Government.” As used in this clause, the total amount payable by the Government in the event of termination of applicable contract line item(s) for convenience includes costs, profit, and estimated termination settlement costs for those items(s).
(c) Notwithstanding the dates specified in the allotment schedule in paragraph (i) of this clause, the Contractor will notify the Contracting Officer in writing at least ninety days prior to the date when, in the Contractor's best judgment, the work will reach the point at which the total amount payable by the Government, including any cost for termination for convenience, will approximate 85 percent of the total amount then allotted to the contract for performance of the applicable item(s). The notification will state (1) the estimated date when that point will be reached and (2) an estimate of additional funding, if any, needed to continue performance of applicable line items up to the next scheduled date for allotment of funds identified in paragraph (i) of this clause, or to a mutually agreed upon substitute date. The notification will also advise the Contracting Officer of the estimated amount of additional funds that will be required for the timely performance of the item(s) funded pursuant to this clause, for a subsequent period as may be specified in the allotment schedule in paragraph (i) of this clause, or otherwise agreed to by the parties. If after such notification additional funds are not allotted by the date identified in the Contractor's notification, or by an agreed substitute date, the Contracting Officer will terminate any item(s) for which additional funds have not been allotted, pursuant to the clause of this contract entitled “Termination for Convenience of the Government.”
(d) When additional funds are allotted for continued performance of the contract line item(s) identified in paragraph (a) of this clause, the parties will agree as to the period of contract performance which will be covered by the funds. The provisions of paragraph (b) through (d) of this clause will apply in like manner to the additional allotted funds and agreed substitute date, and the contract will be modified accordingly.
(e) If, solely by reason of failure of the Government to allot additional funds, by the dates indicated below, in amounts sufficient for timely performance of the contract line item(s) identified in paragraph (a) of this clause, the Contractor incurs additional costs or is delayed in the performance of the work under this contract and if additional funds are allotted, an equitable adjustment will be made in the price or prices (including appropriate target, billing, and ceiling prices where applicable) of the item(s), or in the time of delivery, or both. Failure to agree to any such equitable adjustment hereunder will be a dispute concerning a question of
(f) The Government may at any time prior to termination allot additional funds for the performance of the contract line item(s) identified in paragraph (a) of this clause.
(g) The termination provisions of this clause do not limit the rights of the Government under the clause entitled “Default.” The provisions of this clause are limited to the work and allotment of funds for the contract line item(s) set forth in paragraph (a) of this clause. This clause no longer applies once the contract is fully funded except with regard to the rights or obligations of the parties concerning equitable adjustments negotiated under paragraphs (d) or (e) of this clause.
(h) Nothing in this clause affects the right of the Government to terminate this contract pursuant to the clause of this contract entitled “Termination for Convenience of the Government.”
(i) The parties contemplate that the Government will allot funds to this contract in accordance with the following schedule:
(a) Contract line item ___ is incrementally funded. The sum of $___* is presently available for payment and allotted to this contract. An allotment schedule is contained in paragraph (i) of this clause.
*To be inserted after negotiation.
As prescribed in 232.806(a)(1), use the following clause:
(a) No claims for monies due, or to become due, shall be assigned by the Contractor unless—
(1) Approved in writing by the Contracting Officer;
(2) Made in accordance with the laws and regulations of the United States of America; and
(3) Permitted by the laws and regulations of the Contractor's country.
(b) In no event shall copies of this contract of any plans, specifications, or other similar documents relating to work under this contract, if marked “Top Secret,” “Secret,” or “Confidential” be furnished to any assignee of any claim arising under this contract or to any other person not entitled to receive such documents. However, a copy of any part or all of this contract so marked may be furnished, or any information contained herein may be disclosed, to such assignee upon the Contracting Officer's prior written authorization.
(c) Any assignment under this contract shall cover all amounts payable under this contract and not already paid, and shall not be made to more than one party, except that any such assignment may be made to one party as agent or trustee for two or more parties participating in such financing. On each invoice or voucher submitted for payment under this contract to which any assignment applies, and for which direct payment thereof is to be made to an assignee, the Contractor shall—
(1) Identify the assignee by name and complete address; and
(2) Acknowledge the validity of the assignment and the right of the named assignee to receive payment in the amount invoiced or vouchered.
As prescribed in 232.1110, use the following clause:
The Contractor agrees to accept the Governmentwide commercial purchase card as the method of payment for orders or calls valued at or below $2,500 under this contract or agreement.
As prescribed in 233.215-70, use the following clause:
This contract shall be construed and interpreted in accordance with the substantive laws of the United States of America. By the execution of this contract, the Contractor expressly agrees to waive any rights to invoke the jurisdiction of local national courts
As prescribed in 234.005-71(a), use the following provision:
(a) The offeror shall provide documentation that the cognizant Administrative Contracting Officer (ACO) has recognized that the proposed earned value management system (EVMS) complies with the EVMS criteria of DoD 5000.2-R, Mandatory Procedures for Major Defense Acquisition Programs (MDAPs) and Major Automated Information System (MAIS) Acquisition Programs, or that the proposed cost/schedule control system has been accepted by the Department of Defense.
(b) If the offeror proposes to use a system that does not meet the requirements of paragraph (a) of this provision, the offeror shall submit a comprehensive plan for compliance with the EVMS criteria.
(1) The plan shall—
(A) Describe the EVMS the offeror intends to use in performance of the contract;
(B) Distinguish between the offeror's existing management system and modifications proposed to meet the criteria;
(C) Describe the management system and its application in terms of the 32 EVMS criteria;
(D) Describe the proposed procedure for administration of the criteria as applied to subcontractors; and
(E) Provide documentation describing the process and results of any third-party or self-evaluation of the system's compliance with EVMS criteria.
(2) The offeror shall provide information and assistance as required by the Contracting Officer to support review of the plan.
(3) The Government will review the offeror's plan for EVMS before contract award.
(c) Offerors shall identify the major subcontractors, or major subcontracted effort if major subcontractors have not been selected, planned for application of the criteria. The prime contractor and the Government shall agree to subcontractors selected for application of the EVMS criteria.
As prescribed in 234.005-71(b), use the following clause:
(a) In the performance of this contract, the Contractor shall use an earned value management system (EVMS) that has been recognized by the cognizant Administrative Contracting Officer (ACO) as complying with the criteria provided in DoD 5000.2-R, Mandatory Procedures for Major Defense Acquisition Programs (MDAPs) and Major Automated Information System (MAIS) Acquisition Programs.
(b) If, at the time of award, the Contractor's EVMS has not been recognized by the cognizant ACO as complying with EVMS criteria (or the Contractor does not have an existing cost/schedule control system that has been accepted by the Department of Defense), the Contractor shall apply the system to the contract and shall be prepared to demonstrate to the ACO that the EVMS complies with the EVMS criteria referenced in paragraph (a) of this clause.
(c) The Government may require integrated baseline reviews. Such reviews shall be scheduled as early as practicable and should be conducted within 180 calendar days after (1) contract award, (2) the exercise of significant contract options, or (3) the incorporation of major modifications. The objective of the integrated baseline review is for the Government and the Contractor to jointly assess areas, such as the Contractor's planning, to ensure complete coverage of the statement of work, logical scheduling of the work activities, adequate resourcing, and identification of inherent risks.
(d) Unless a waiver is granted by the ACO, Contractor-proposed EVMS changes require approval of the ACO prior to implementation. The ACO shall advise the Contractor of the acceptability of such changes within 30 calendar days after receipt of the notice of proposed changes from the Contractor. If the advance approval requirements are waived by the ACO, the Contractor shall disclose EVMS changes to the ACO at least 14 calendar days prior to the effective date of implementation.
(e) The Contractor agrees to provide access to all pertinent records and data requested by the ACO or duly authorized representative. Access is to permit Government surveillance to ensure that the EVMS complies,
(f) The Contractor shall require the following subcontractors to comply with the requirements of this clause:
As prescribed in 235.070-3, use the following clause:
(a) This clause provides for indemnification under 10 U.S.C. 2354 if the Contractor meets all the terms and conditions of this clause.
(b) Claims, losses, and damages covered—
(1) Claims by third persons for death, bodily injury, sickness, or disease, or the loss, damage, or lost use of property. Claims include those for reasonable expenses of litigation or settlement. The term
(2) The loss, damage, and lost use of the Contractor's property, but excluding lost profit; and
(3) Loss, damage, or lost use of the Government's property.
(c) The claim, loss, or damage—
(1) Must arise from the direct performance of this contract;
(2) Must not be compensated by insurance or other means, or be within deductible amounts of the Contractor's insurance;
(3) Must result from an unusually hazardous risk as specifically defined in the contract;
(4) Must not result from willful misconduct or lack of good faith on the part of any of the Contractor's directors or officers, managers, superintendents, or other equivalent representatives who have supervision or direction of—
(i) All or substantially all of the Contractor's business;
(ii) All or substantially all of the Contractor's operations at any one plant or separate location where this contract is being performed; or
(iii) A separate and complete major industrial operation connected with the performance of this contract;
(5) Must not be a liability assumed under any contract or agreement (except for subcontracts covered by paragraph (h) of this clause), unless the Contracting Officer (or in contracts with the Department of the Navy, the Department) specifically approved the assumption of liability; and
(6) Must be certified as just and reasonable by the Secretary of the department or designated representative.
(d) The Contractor shall buy and maintain, to the extent available, insurance against unusually hazardous risks in the form, amount, period(s) of time, at the rate(s), and with such insurers, as the Contracting Officer (or, for Navy contracts, the Department) may from time to time require and approve. If the cost of this insurance is higher than the cost of the insurance the Contractor had as of the date of the contract, the Government shall reimburse the Contractor for the difference in cost, as long as it is properly allocable to this contract and is not included in the contract price. The Government shall not be liable for claims, loss, or damage if insurance was available and is either required or approved under this paragraph.
(e) A reduction of the insurance coverage maintained by the Contractor on the date of the execution of this contract shall not increase the Government's liability under this clause unless the Contracting Officer consents, and the contract price is equitably adjusted, if appropriate, to reflect the Contractor's consideration for the Government's assumption of increased liability.
(f)
(1) Promptly notify the Contracting Officer of any occurrence, action, or claim that might trigger the Government's liability under this clause;
(2) Furnish the proof or evidence of any claim, loss, or damage in the form and manner that the Government requires; and
(3) Immediately provide copies of all pertinent papers that the Contractor receives or has received.
(g) The Government may direct, participate in, and supervise the settlement or defense of the claim or action. The Contractor shall comply with the Government's directions and execute any authorizations required.
(h)
(1) The Contracting Officer gave prior written approval for the Contractor to provide in a subcontract for the Contractor to indemnify the subcontractor for unusually hazardous risks defined in this contract;
(2) The Contracting Officer approved those indemnification provisions;
(3) The subcontract indemnification provisions entitle the Contractor, or the Government, or both, to direct, participate in, and supervise the settlement or defense of relevant actions and claims; and
(4) The subcontract provides the same rights and duties, the same provisions for notice, furnishing of papers and the like, between the Contractor and the subcontractor, as exist between the Government and the Contractor under this clause.
(i) The Government may discharge its obligations under paragraph (h) of this clause by making payments directly to subcontractors or to persons to whom the subcontractors may be liable.
(j) The rights and obligations of the parties under this clause shall survive the termination, expiration, or completion of this contract.
As prescribed in 235.070-3, use the following clause:
(a) This clause provides for indemnification under 10 U.S.C. 2354 if the Contractor meets all the terms and conditions of this clause.
(b) Claims, losses, and damages covered—
(1) Claims by third persons for death, bodily injury, sickness, or disease, or the loss, damage, or lost use of property. Claims include those for reasonable expenses of litigation or settlement. The term “third persons” includes employees of the Contractor;
(2) The loss, damage, and lost use of the Contractor's property, but excluding lost profit; and
(3) Loss, damage, or lost use of the Government's property.
(c) The claim, loss, or damage—
(1) Must arise from the direct performance of this contract;
(2) Must not be compensated by insurance or other means, or be within deductible amounts of the Contractor's insurance;
(3) Must result from an unusually hazardous risk as specifically defined in the contract;
(4) Must not result from willful misconduct or lack of good faith on the part of any of the Contractor's directors or officers, managers, superintendents, or other equivalent representatives who have supervision or direction of—
(i) All or substantially all of the Contractor's business;
(ii) All or substantially all of the Contractor's operations at any one plant or separate location where this contract is being performed; or
(iii) A separate and complete major industrial operation connected with the performance of this contract;
(5) Must not be a liability assumed under any contract or agreement (except for subcontracts covered by paragraph (i) of this clause), unless the Contracting Officer (or in contracts with the Department of the Navy, the Department) specifically approved the assumption of liability; and
(6) Must be certified as just and reasonable by the Secretary of the department or designated representative.
(d) A reduction of the insurance coverage maintained by the Contractor on the date of the execution of this contract shall not increase the Government's liability under this clause unless the Contracting Officer consents, and the contract price is equitably adjusted, if appropriate, to reflect the Contractor's consideration for the Government's assumption of increased liability.
(e)
(1) Promptly notify the Contracting Officer of any occurrence, action, or claim that might trigger the Government's liability under this clause;
(2) Furnish the proof or evidence of any claim, loss, or damage in the form and manner that the Government requires; and
(3) Immediately provide copies of all pertinent papers that the contractor receives or has received.
(f) The Government may direct, participate in, and supervise the settlement or defense of the claim or action. The Contractor shall comply with the Government's directions, and execute any authorizations required.
(g) The Limitation of Cost clause of this contract does not apply to the Government's obligations under this clause. The obligations under this clause are excepted from the release required by the Allowable Cost, Fee, and Payment clause of this contract.
(h) Under this clause, a claim, loss, or damage arises from the direct performance of this contract if the cause of the claim, loss, or damage occurred during the period of performance of this contract or as a result of the performance of this contract.
(i)
(1) The Contracting Officer gave prior written approval for the Contractor to provide in a subcontract for the Contractor to indemnify the subcontractor for unusually hazardous risks defined in this contract;
(2) The Contracting Officer approved those indemnification provisions;
(3) The subcontract indemnification provisions entitle the Contractor, or the Government, or both, to direct, participate in, and supervise the settlement or defense of relevant actions and claims; and
(4) The subcontract provides the same rights and duties, the same provisions for notice, furnishing of paper and the like, between the Contractor and the subcontractor, as exist between the Government and the Contractor under this clause.
(j) The Government may discharge its obligations under paragraph (i) of this clause by making payments directly to subcontractors or to persons to whom the subcontractors may be liable.
(k) The rights and obligations of the parties under this clause shall survive the termination, expiration, or completion of this contract.
As prescribed in 235.071(a), use the following clause:
(a) The Contractor shall register its research facility with the Secretary of Agriculture in accordance with 7 U.S.C. 2316 and 9 CFR subpart C, and § 2.30, and furnish evidence of such registration to the Contracting Officer before beginning work under this contract.
(b) The Contractor shall acquire animals only from dealers licensed by the Secretary of Agriculture under 7 U.S.C. 2133 and 9 CFR subpart A, §§ 2.1 through 2.11, or from sources that are exempt from licensing under those sections.
(c) The Contractor agrees that the care and use of animals will conform with the pertinent laws of the United States and regulations of the Department of Agriculture (see 7 U.S.C. 2131
(d) The Contracting Officer may immediately suspend, in whole or in part, work and further payments under this contract for failure to comply with the requirements of paragraphs (a) through (c) of this clause.
(1) The suspension will stay in effect until the Contractor complies with the requirements.
(2) Failure to complete corrective action within the time specified by the Contracting Officer may result in termination of this contract and removal of the Contractor's name from the list of contractors with approved Public Health Service Welfare Assurances.
(e) The Contractor may request registration of its facility and a current listing of licensed dealers from the Regional Office of the Animal and Plant Health Inspection Service (APHIS), United States Department of Agriculture (USDA), for the region in which its research facility is located. The location of the appropriate APHIS regional office, as well as information concerning this program may be obtained by contacting the Senior Staff Officer, Animal Care Staff, USDA/APHIS, Federal Center Building, Hyattsville, MD 20782.
(f) The Contractor shall include this clause, including this paragraph (f), in all subcontracts involving research of live vertebrate animals.
As prescribed in 235.071(b), use the following clause:
(a) The Contractor shall obtain authorization for radio frequencies required in support of this contract.
(b) For any experimental, developmental, or operational equipment for which the appropriate frequency allocation has not been made, the Contractor shall provide the technical operating characteristics of the proposed electromagnetic radiating device to the Contracting Officer during the initial planning, experimental, or developmental phase of contract performance.
(c) The Contracting Officer shall furnish the procedures for obtaining radio frequency authorization.
(d) The Contractor shall include this clause, including this paragraph (d), in all subcontracts requiring the development, production, construction, testing, or operation of a device for which a radio frequency authorization is required.
Alternate I (DEC 1991). Substitute the following paragraph (c) for paragraph (c) of the basic clause if agency procedures authorize use of DD Form 1494, Application for Frequency Authorization:
(c) The Contractor shall use DD Form 1494, Application for Frequency Authorization, to obtain radio frequency authorization.
As prescribed in 235.071(c), use the following clause:
(a) The Contractor shall include an acknowledgment of the Government's support in the publication of any material based on or developed under this contract, stated in the following terms: This material is based upon work supported by the (name of contracting agency(ies)) under Contract No. (Contracting agency(ies) contract number(s)).
(b) All material, except scientific articles or papers published in scientific journals, must, in addition to any notices or disclaimers by the Contractor, also contain the following disclaimer: Any opinions, findings and conclusions or recommendations expressed in this material are those of the author(s) and do not necessarily reflect the views of the (name of contracting agency(ies)).
As prescribed in 235.071(d), use the following clause:
The Contractor shall submit two copies of the approved scientific or technical report delivered under this contract to the Defense Technical Information Center (DTIC), Attn: DTIC-OC, 8725 John J. Kingman Road, Suite 0944, Fort Belvoir, VA 22060-6218. The Contractor shall include a completed Standard Form 298, Report Documentation Page, with each copy of the report. For submission of reports in other than paper copy, contact the Defense Technical Information Center, Attn: DTIC-OC, 8725 John J. Kingman Road, Suite 0944, Fort Belvoir, VA 22060-6218.
As prescribed in 236.570(a), use the following clause:
(a) The Contractor shall furnish a price breakdown, itemized as required and within the time specified by the Contracting Officer, with any proposal for a contract modification.
(b) The price breakdown—
(1) Must include sufficient detail to permit an analysis of profit, and of all costs for—
(i) Material;
(ii) Labor;
(iii) Equipment;
(iv) Subcontracts; and
(v) Overhead; and
(2) Must cover all work involved in the modification, whether the work was deleted, added, or changed.
(c) The Contractor shall provide similar price breakdowns to support any amounts claimed for subcontracts.
(d) The Contractor's proposal shall include a justification for any time extension proposed.
As prescribed in 236.570(a), use the following clause:
(a) The Government will provide to the Contractor, without charge, one set of contract drawings and specifications, except publications incorporated into the technical provisions by reference, in electronic or paper media as chosen by the Contracting Officer.
(b) The Contractor shall—
(1) Check all drawings furnished immediately upon receipt;
(2) Compare all drawings and verify the figures before laying out the work;
(3) Promptly notify the Contracting Officer of any discrepancies;
(4) Be responsible for any errors that might have been avoided by complying with this paragraph (b); and
(5) Reproduce and print contract drawings and specifications as needed.
(c) In general—
(1) Large-scale drawings shall govern small-scale drawings; and
(2) The Contractor shall follow figures marked on drawings in preference to scale measurements.
(d) Omissions from the drawings or specifications or the misdescription of details of work that are manifestly necessary to carry out the intent of the drawings and specifications, or that are customarily performed, shall not relieve the Contractor from performing such omitted or misdescribed details of the work. The Contractor shall perform such details as if fully and correctly set forth and described in the drawings and specifications.
(e) The work shall conform to the specifications and the contract drawings identified on the following index of drawings:
As prescribed in 236.570(b)(1), use the following clause:
(a) The Contractor shall—
(1) Promptly recover and remove any material, plant, machinery, or appliance which the contractor loses, dumps, throws overboard, sinks, or misplaces, and which, in the opinion of the Contracting Officer, may be dangerous to or obstruct navigation;
(2) Give immediate notice, with description and locations of any such obstructions, to the Contracting Officer; and
(3) When required by the Contracting Officer, mark or buoy such obstructions until the same are removed.
(b) The Contracting Officer may—
(1) Remove the obstructions by contract or otherwise should the Contractor refuse, neglect, or delay compliance with paragraph (a) of this clause; and
(2) Deduct the cost of removal from any monies due or to become due to the Contractor; or
(3) Recover the cost of removal under the Contractor's bond.
(c) The Contractor's liability for the removal of a vessel wrecked or sunk without fault or negligence is limited to that provided in sections 15, 19, and 20 of the River and Harbor Act of March 3, 1899 (33 U.S.C. 410
As prescribed in 236.570(b)(2), use the following clause:
(a) The Government will make payment to the Contractor under the procedures in this clause for mobilization and preparatory work under item no. _____.
(b) Payments will be made for actual payments by the Contractor on work preparatory to commencing actual work on the construction items for which payment is provided under the terms of this contract, as follows—
(1) For construction plant and equipment exceeding $25,000 in value per unit (as appraised by the Contracting Officer at the work site) acquired for the execution of the work;
(2) Transportation of all plant and equipment to the site;
(3) Material purchased for the prosecution of the contract, but not to be incorporated in the work;
(4) Construction of access roads or railroads, camps, trailer courts, mess halls, dormitories or living quarters, field headquarters facilities, and construction yards;
(5) Personal services; and
(6) Hire of plant.
(c) Requests for payment must include—
(1) An account of the Contractor's actual expenditures;
(2) Supporting documentation, including receipted bills or copies of payrolls and freight bills; and
(3) The Contractor's documentation—
(i) Showing that it has acquired the construction plant, equipment, and material free from all encumbrances;
(ii) Agreeing that the construction plant, equipment, and material will not be removed from the site without the written permission of the Contracting Officer; and
(iii) Agreeing that structures and facilities prepared or erected for the prosecution of the contract work will be maintained and not dismantled prior to the completion and acceptance of the entire work, without the written permission of the Contracting Officer.
(d) Upon receiving a request for payment, the Government will make payment, less any prescribed retained percentage, if—
(1) The Contracting Officer finds the—
(i) Construction plant, material, equipment, and the mobilization and preparatory work performed are suitable and necessary to the efficient prosecution of the contract; and
(ii) Preparatory work has been done with proper economy and efficiency.
(2) Payments for construction plant, equipment, material, and structures and facilities prepared or erected for prosecution of the contract work do not exceed—
(i) The Contractor's cost for the work performed less the estimated value upon completion of the contract; and
(ii) 100 percent of the cost to the contractor of any items having no appreciable salvage value; and
(iii) 75 percent of the cost to the contractor of items which do have an appreciable salvage value.
(e) (1) Payments will continue to be made for item no. ____, and all payments will be deducted from the contract price for this item, until the total deductions reduce this item to zero, after which no further payments will be made under this item.
(2) If the total of payments so made does not reduce this item to zero, the balance will
(3) The retained percentage will be paid in accordance with the Payments to Contractor clause of this contract.
(f) The Contracting Officer shall determine the value and suitability of the construction plant, equipment, materials, structures and facilities. The Contracting Officer's determinations are not subject to appeal.
As prescribed in 236.570(b)(2), use the following clause:
(a) The Government will pay all costs for the mobilization and demobilization of all of the Contractor's plant and equipment at the contract lump sum price for this item.
(1) ____ percent of the lump sum price upon completion of the contractor's mobilization at the work site.
(2) The remaining ____ percent upon completion of demobilization.
(b) The Contracting Officer may require the Contractor to furnish cost data to justify this portion of the bid if the Contracting Officer believes that the percentages in paragraphs (a) (1) and (2) of this clause do not bear a reasonable relation to the cost of the work in this contract.
(1) Failure to justify such price to the satisfaction of the Contracting Officer will result in payment, as determined by the Contracting Officer, of—
(i) Actual mobilization costs at completion of mobilization;
(ii) Actual demobilization costs at completion of demobilization; and
(iii) The remainder of this item in the final payment under this contract.
(2) The Contracting Officer's determination of the actual costs in paragraph (b)(1) of this clause is not subject to appeal.
As prescribed in 236.570(b)(3), use the following clause. At some airfields, the width of the primary surface is 1,500 feet (750 feet on each side of the runway centerline). In such instances, substitute the proper width in the clause.
(a)
(1)
(i) The primary surfaces, comprising the surface of the runway, runway shoulders, and lateral safety zones. The length of each primary surface is the same as the runway length. The width of each primary surface is 2,000 feet (1,000 feet on each side of the runway centerline);
(ii) The
(iii) All taxiways, plus the lateral clearance zones along each side for the length of the taxiways (the outer edge of each lateral clearance zone is laterally 250 feet from the far or opposite edge of the taxiway, e.g., a 75-foot-wide taxiway would have a combined width of taxiway and lateral clearance zones of 425 feet); and
(iv) All aircraft parking aprons, plus the area 125 feet in width extending beyond each edge all around the aprons.
(2)
(i) The
(A) The inclined plane (glide angle) begins in the clear zone 200 feet past the end of the runway (and primary surface) at the same elevation as the end of the runway. It continues upward at a slope of 50:1 (1 foot vertically for each 50 feet horizontally) to an elevation of 500 feet above the established airfield elevation. At that point the plane becomes horizontal, continuing at that same uniform elevation to a point 50,000 feet longitudinally from the beginning of the inclined plane (glide angle) and ending there.
(B) The width of the surface at the beginning of the inclined plane (glide angle) is the same as the width of the clear zone. It then flares uniformly, reaching the maximum width of 16,000 feet at the end.
(ii) The
(iii) The
(A) The inclined plane in each case begins at the edge of the surface.
(B) The slope of the incline plane is 7:1 (1 foot vertically for each 7 feet horizontally). It continues to the point of intersection with the—
(
(
(iv) The “transitional zone” is the ground area under the transitional surface. (It adjoins the primary surface, clear zone, and approach-departure clearance zone.)
(b)
(i) Operating all ground equipment (mobile or stationary);
(ii) Placing all materials; and
(iii) Performing all work, upon and around all airfields.
(2) The requirements of this clause are in addition to any other safety requirements of this contract.
(c) The Contractor shall—
(1) Report to the Contracting Officer before initiating any work;
(2) Notify the Contracting Officer of proposed changes to locations and operations;
(3) Not permit either its equipment or personnel to use any runway for purposes other than aircraft operation without permission of the Contracting Officer, unless the runway is—
(i) Closed by order of the Contracting Officer; and
(ii) Marked as provided in paragraph (d)(2) of this clause;
(4) Keep all paved surfaces, such as runways, taxiways, and hardstands, clean at all times and, specifically, free from small stones which might damage aircraft propellers or jet aircraft;
(5) Operate mobile equipment according to the safety provisions of this clause, while actually performing work on the airfield. At all other times, the Contractor shall remove all mobile equipment to locations—
(i) Approved by the Contracting Officer;
(ii) At a distance of at least 750 feet from the runway centerline, plus any additional distance; and
(iii) Necessary to ensure compliance with the other provisions of this clause; and
(6) Not open a trench unless material is on hand and ready for placing in the trench. As soon as practicable after material has been placed and work approved, the Contractor shall backfill and compact trenches as required by the contract. Meanwhile, all hazardous conditions shall be marked and lighted in accordance with the other provisions of this clause.
(d)
(1) Place nothing upon the landing areas without the authorization of the Contracting Officer;
(2) Outline those landing areas hazardous to aircraft, using (unless otherwise authorized by the Contracting Officer) red flags by day, and electric, battery-operated low-intensity red flasher lights by night;
(3) Obtain, at an airfield where flying is controlled, additional permission from the control tower operator every time before entering any landing area, unless the landing area is marked as hazardous in accordance with paragraph (d)(2) of this clause;
(4) Identify all vehicles it operates in landing areas by means of a flag on a staff attached to, and flying above, the vehicle. The flag shall be three feet square, and consist of a checkered pattern of international orange and white squares of 1 foot on each side (except that the flag may vary up to ten percent from each of these dimensions);
(5) Mark all other equipment and materials in the landing areas, using the same marking devices as in paragraph (d)(2) of this clause; and
(6) Perform work so as to leave that portion of the landing area which is available to aircraft free from hazards, holes, piles of material, and projecting shoulders that might damage an airplane tire.
(e)
(1) Place nothing upon the safety precaution areas without authorization of the Contracting Officer;
(2) Mark all equipment and materials in safety precaution areas, using (unless otherwise authorized by the Contracting Officer) red flags by day, and electric, battery-operated, low-intensity red flasher lights by night; and
(3) Provide all objects placed in safety precaution areas with a red light or red lantern at night, if the objects project above the approach-departure clearance surface or above the transitional surface.
As prescribed in 236.570(b)(4), use the following provision:
(a) Certain items in this solicitation are subject to statutory cost limitations. The limitations are stated in the Schedule.
(b) An offer which does not state separate prices for the items identified in the Schedule as subject to a cost limitation may be considered nonresponsive.
(c) Prices stated in offers for items subject to cost limitations shall include an appropriate apportionment of all costs, direct and indirect, overhead, and profit.
(d) Offers may be rejected which—
(1) Are materially unbalanced for the purpose of bringing items within cost limitations; or
(2) Exceed the cost limitations, unless the limitations have been waived by the Government prior to award.
As prescribed in 236.570(b)(5), use the following provision:
(a) The low offeror and the items to be awarded shall be determined as follows—
(1) Prior to the opening of bids, the Government will determine the amount of funds available for the project.
(2) The low offeror shall be the Offeror 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 the order stated in the list of priorities in the bid schedule) those additive or deductive items that provide the most features within the funds determined available.
(3) The Contracting Officer shall evaluate all bids on the basis of the same additive or deductive items.
(i) If adding another item from the bid schedule list of priorities would make the award exceed the available funds for all offerors, the Contracting Officer will skip that item and go to the next item from the bid schedule of priorities; and
(ii) Add that next item if an award may be made that includes that item and is within the available funds.
(b) The Contracting Officer will use the list of priorities in the bid schedule only to determine the low offeror. After determining the low offeror, an award may be made on any combination of items if—
(1) It is in the best interest of the Government;
(2) Funds are available at the time of award; and
(3) The low offeror's price for the combination to be awarded is less than the price offered by any other responsive, responsible offeror.
(c)
As prescribed in 236.570(b)(6), use the following provision:
(a) The Government's payment for the items listed in the Bidding Schedule shall constitute full compensation to the Contractor for—
(1) Furnishing all plant, labor, equipment, appliances, and materials; and
(2) Performing all operations required to complete the work in conformity with the drawings and specifications.
(b) The Contractor shall include in the prices for the items listed in the Bidding Schedule all costs for work in the specifications, whether or not specifically listed in the Bidding Schedule.
As prescribed in 236.609-70, use the following clause:
(a) The Government may—
(1) At its option, direct the Contractor to perform any part or all of the supervision and inspection services for the construction contract as provided under appendix A of this contract; and
(2) Exercise its option, by written order, at any time prior to six months after satisfactory completion and acceptance of the work under this contract.
(b) Upon receipt of the Contracting Officer's written order, the Contractor shall proceed with the supervision and inspection services.
As prescribed in 236.570(c)(1), use the following provision:
(a)
“United States firm,” as used in this provision, means a firm incorporated in the United States that complies with the following:
(1) The corporate headquarters are in the United States;
(2) The firm has filed corporate and employment tax returns in the United States for a minimum of 2 years (if required), has filed State and Federal income tax returns (if required) for 2 years, and has paid any taxes due as a result of these filings; and
(3) The firm employs United States citizens in key management positions.
(b)
(c)
As prescribed in 236.609-70(b), use the following provision:
(a)
(1) The corporate headquarters are in the United States;
(2) The firm has filed corporate and employment tax returns in the United States for a minimum of 12 years (if required), has filed State and Federal income tax returns (if required) for 2 years, and has paid any taxes due as a result of these filings; and
(3) The firm employs United States citizens in key management positions.
(b)
(c)
As prescribed in 236.570(c)(2), use the following provision:
(a)
(1)
(i) Is more than 50 percent owned by citizens of the Marshall Islands; or
(ii) Complies with the following:
(A) The firm has done business in the Marshall Islands on a continuing basis for not less than 3 years prior to the date of issuance of this solicitation;
(B) Substantially all of the firm's directors of local operations, senior staff, and operating personnel are resident in the Marshall Islands or are U.S. citizens; and
(C) Most of the operating equipment and physical plant are in the Marshall Islands.
(2)
(i) The corporate headquarters are in the United States;
(ii) The firm has filed corporate and employment tax returns in the United States for a minimum of 2 years (if required), has filed State and Federal income tax returns (if required) for 2 years, and has paid any taxes due as a result of these filings; and
(iii) The firm employs United States citizens in key management positions.
(b)
(c)
As prescribed in 237.270(d)(1), use the following provision:
(a) To be determined responsible, the Offeror must meet the general standards of responsibility set forth at FAR 9.104-1 and the following criteria, as described in Chapter 3,
(1) Qualifications;
(2) Independence; and
(3) Quality Control.
(b) “Government Auditing Standards” is issued by the Comptroller General of the United States and is available for sale from the: Superintendent of Documents, U.S. Government Printing Office. Washington, DC 20401, Stock number 020-000-00243-3.
(c) The apparently successful Offeror, before award, shall give the Contracting Officer evidence that it is licensed by the cognizant licensing authority in the state or other political jurisdiction where the Offeror operates its professional practice.
As prescribed in 237.270(d)(2), use the following clause:
The Contractor, in performance of all audit services under this contract, shall comply with “Government Auditing Standards” issued by the Comptroller General of the United States.
As prescribed in 237.7004(a), use the following provision:
(a) Award shall be made to a single offeror.
(b) Offerors shall include unit prices for each item. Failure to include unit prices for each item will be cause for rejection of the entire offer.
(c) The Government will evaluate offers on the basis of the estimated quantities shown.
(d) Award will be made to that responsive, responsible offeror whose total aggregate offer is the lowest price to the Government.
As prescribed in 237.7004(a), substitute the following paragraph (d) for paragraph (d) of the basic provision:
(d) Award will be made to that responsive, responsible offeror whose total aggregate offer is in the best interest of the Government.
As prescribed in 237.7004(b), use the following clause:
(a) Except as provided in paragraphs (c) and (d) of this clause, the Government will order from the Contractor all of its requirements in the area of performance for the supplies and services listed in the schedule of this contract.
(b) Each order will be issued as a delivery order and will list—
(1) The supplies or services being ordered;
(2) The quantities to be furnished;
(3) Delivery or performance dates;
(4) Place of delivery or performance;
(5) Packing and shipping instructions;
(6) The address to send invoices; and
(7) The funds from which payment will be made.
(c) The Government may elect not to order supplies and services under this contract in instances where the body is removed from the area for medical, scientific, or other reason.
(d) In an epidemic or other emergency, the contracting activity may obtain services beyond the capacity of the Contractor's facilities from other sources.
(e) Contracting Officers of the following activities may order services and supplies under this contract—
As prescribed in 237.7004(b), use the following clause:
(a) The area of performance is as specified in the contract.
(b) The Contractor shall take possession of the remains at the place where they are located, transport them to the Contractor's place of preparation, and later transport them to a place designated by the Contracting Officer.
(c) The Contractor will not be reimbursed for transportation when both the place where the remains were located and the delivery point are within the area of performance.
(d) If remains are located outside the area of performance, the Contracting Officer may place an order with the Contractor under this contract or may obtain the services
(e) The Contracting Officer may require the Contractor to deliver remains to any point within 100 miles of the area of performance. In this case, the Contractor shall be paid the amount per mile in the schedule for the number of miles required to transport the remains by a reasonable route from the boundary of the area of performance to the delivery point.
As prescribed in 237.7004(b), use the following clause:
(a) The Contractor shall furnish the material ordered and perform the services specified as promptly as possible but not later than 36 hours after receiving notification to remove the remains, excluding the time necessary for the Government to inspect and check results of preparation.
(b) The Government may, at no additional charge, require the Contractor to hold the remains for an additional period not to exceed 72 hours from the time the remains are casketed and final inspection completed.
As prescribed in 237.7004(b), use the following clause:
The Contractor shall not subcontract any work under this contract without the Contracting Officer's written approval. This clause does not apply to contracts of employment between the Contractor and its personnel.
As prescribed in 237.7004(b), use the following clause:
(a) This clause supplements and is in addition to the Default clause of this contract.
(b) The Contracting Officer may terminate this contract for default by written notice without the ten day notice required by paragraph (a)(2) of the Default clause if—
(1) The Contractor, through circumstances reasonably within its control or that of its employees, performs any act under or in connection with this contract, or fails in the performance of any service under this contract and the act or failures may reasonably be considered to reflect discredit upon the Department of Defense in fulfilling its responsibility for proper care of remains;
(2) The Contractor, or its employees, solicits relatives or friends of the deceased to purchase supplies or services not under this contract. (The Contractor may furnish supplies or arrange for services not under this contract, only if representatives of the deceased voluntarily request, select, and pay for them.);
(3) The services or any part of the services are performed by anyone other than the Contractor or the Contractor's employees without the written authorization of the Contracting Officer;
(4) The Contractor refuses to perform the services required for any particular remains; or
(5) The Contractor mentions or otherwise uses this contract in its advertising in any way.
As prescribed in 237.7004(b), use the following clause:
The Government will pay the Contractor for supplies and services provided for remains interred as a group on the basis of the number of caskets furnished, rather than on the basis of the number of persons in the group.
As prescribed in 237.7004(b), use the following clause:
The Contractor shall meet all State and local licensing requirements and obtain and furnish all necessary health department and shipping permits at no additional cost to the Government. The Contractor shall ensure that all necessary health department permits are in order for disposition of the remains.
As prescribed in 237.7004(b), use the following clause:
(a) The Contractor's building shall have complete facilities for maintaining the highest standards of solemnity, reverence, assistance to the family, and prescribed ceremonial services.
(b) The Contractor's preparation room shall be clean, sanitary, and adequately equipped.
(c) The Contractor shall have, or be able to get, catafalques, church trucks, and equipment for Protestant, Catholic, and Jewish services.
(d) The Contractor's funeral home, furnishings, grounds, and surrounding area shall present a clean and well-kept appearance.
As prescribed in 237.7004(b), use the following clause:
For each body prepared, or for each casket handled in a group interment, the Contractor shall state briefly the results of the embalming process on a certificate furnished by the Contracting Officer.
As prescribed in 237.7102(a), use the following provision:
(a) The Offeror shall include unit prices for each item in a lot. Unit prices shall include all costs to the Government of providing the services, including pickup and delivery charges.
(b) Failure to offer on any item in a lot shall be cause for rejection of the offer on that lot. The Contracting Officer will evaluate offers based on the estimated quantities in the solicitation.
(c) Award generally will be made to a single offeror for all lots. However, the Contracting Officer may award by individual lot when it is more advantageous to the Government.
(d) Prospective offerors may inspect the types of articles to be serviced. Contact the Contracting Officer to make inspection arrangements.
As prescribed in 237.7102(b), use the following provision:
(a) Offers shall be submitted on a unit price per pound of serviced laundry. Unit prices shall include all costs to the Government of providing the service, including pickup and delivery charges.
(b) The Contracting Officer will evaluate bids based on the estimated pounds of serviced laundry stated in the solicitation.
(c) Award generally will be made to a single offeror for all lots. However, the Contracting Officer may award by individual lot when it is more advantageous to the Government.
(d) Prospective offerors may inspect the types of articles to be serviced. Contact the Contracting Officer to make inspection arrangements.
As prescribed in 237.7102(c), use the following clause:
(a) The count-of-articles will be—
(1) The count of the Contracting Officer; or
(2) The count agreed upon as a result of a joint count by the Contractor and the Contracting Officer at the time of delivery to the Contractor.
(b) The Contractor shall—
(1) Be liable for return of the number and kind of articles furnished for service under this contract; and
(2) Shall indemnify the Government for any loss or damage to such articles.
(c) The Contractor shall pay to the Government the value of any lost or damaged property using Federal supply schedule price lists. If the property is not on these price lists, the Contracting Officer shall determine a fair and reasonable price.
(d) The Contracting Officer will allow credit for any depreciation in the value of the property at the time of loss or damage. The Contracting Officer and the Contractor shall mutually determine the amount of the allowable credit.
(e) Failure to agree upon the value of the property or on the amount of credit due will
(f) In case of damage to any property that the Contracting Officer and the Contractor agree can be satisfactorily repaired, the Contractor may repair the property at its expense in a manner satisfactory to the Contracting Officer, rather than make payment under paragraph (c) of this clause.
As prescribed in 237.7102(d), use the following clause:
(a) The Contractor shall—
(1) Be liable for return of the articles furnished for service under this contract; and
(2) Indemnify the Government for any articles delivered to the Contractor for servicing under this contract that are lost or damaged, and in the opinion of the Contracting Officer, cannot be repaired satisfactorily.
(b) The Contractor shall pay to the Government ____ per pound for lost or damaged articles. The Contractor shall pay the Government only for losses which exceed the maximum weight loss in paragraph (e) of this clause.
(c) Failure to agree on the amount of credit due will be treated as a dispute under the Disputes clause of this contract.
(d) In the case of damage to any articles that the Contracting Officer and the Contractor agree can be satisfactorily repaired, the Contractor shall repair the articles at its expense in a manner satisfactory to the Contracting Officer.
(e) The maximum weight loss allowable in servicing the laundry is ____ percent of the weight recorded on delivery tickets when the laundry is picked up. Any weight loss in excess of this amount shall be subject to the loss provisions of this clause.
As prescribed in 237.7102(e), use the following clause:
(a) The Contractor shall complete delivery tickets in the number of copies required and in the form approved by the Contracting Officer, when it receives the articles to be serviced.
(b) The Contractor shall include one copy of each delivery ticket with its invoice for payment.
Alternate I (DEC 1991). As prescribed in 237.7102(e)(1), add the following paragraphs (c), (d), and (e) to the basic clause:
(c) Before the Contractor picks up articles for service under this contract, the Contracting Officer will ensure that—
(1) Each bag contains only articles within a single bag type as specified in the schedule; and
(2) Each bag is weighed and the weight and bag type are identified on the bag.
(d) The Contractor shall, at time of pickup—
(1) Verify the weight and bag type and record them on the delivery ticket; and
(2) Provide the Contracting Officer, or representative, a copy of the delivery ticket.
(e) At the time of delivery, the Contractor shall record the weight and bag type of serviced laundry on the delivery ticket. The Contracting Officer will ensure that this weight and bag type are verified at time of delivery.
Alternate II (Dec. 1991). As prescribed in 237.7102(e)(2), add the following paragraphs (c), (d), and (e) to the basic clause—
(c) Before the Contractor picks up articles for service under this contract, the Contracting Officer will ensure that each bag is weighed and that the weight is identified on the bag.
(d) The Contractor, at time of pickup, shall verify and record the weight on the delivery ticket and shall provide the Contracting Officer, or representative, a copy of the delivery ticket.
(e) At the time of delivery, the Contractor shall record the weight of serviced laundry on the delivery ticket. The Contracting Officer will ensure that this weight is verified at time of delivery.
As prescribed in 237.7102(f), use the following clause:
(a) The Contractor shall provide laundry service under this contract on both a unit bundle and on a piece-rate bundle basis for individual personnel.
(b) The total number of pieces listed in the “Estimated Quantity” column in the schedule is the estimated amount of individual laundry for this contract. The estimate is for information only and is not a representation of the amount of individual laundry to be ordered. Individuals may elect whether or not to use the laundry services.
(c) Charges for individual laundry will be on a per unit bundle or a piece-rate basis. The Contractor shall provide individual laundry bundle delivery tickets for use by the individuals in designating whether the laundry is a unit bundle or a piece-rate bundle. An individual laundry bundle will be accompanied by a delivery ticket listing the contents of the bundle.
(d) The maximum number of pieces to be allowed per bundle is as specified in the schedule and as follows—
(1)
(2)
As prescribed in 237.7102(g), use the following clause:
Articles delivered to the Contractor to be laundered or dry-cleaned, including any articles which are actually owned by individual Government personnel, are Government-owned property, not Government-furnished property. Government-owned property does not fall under the requirements of any Government-furnished property clause of this contract.
As prescribed in 237.7402, use the following clause:
Professional employees shall be used by the local government to provide services under this contract to the extent that professionals are available in the area under the jurisdiction of such government.
As prescribed in 239.7102-3, use the following clause:
(a) The Contractor shall provide or use only computer equipment, as specified by the Government, that has been accredited to meet the appropriate security requirements of—
(1) The National Security Agency National TEMPEST Standards (NACSEM No. 5100 or NACSEM No. 5100A, Compromising Emanations Laboratory Test Standard, Electromagnetics (U)); or
(2) Other standard specified by this contract.
(b) Upon request of the Contracting Officer, the Contractor shall provide documentation supporting the accreditation.
(c) The Government may, as part of its inspection and acceptance, conduct additional tests to ensure that equipment or systems delivered under this contract satisfy the security standards specified. The Government may conduct additional tests—
(1) At the installation site or contractor's facility.
(2) Notwithstanding the existence of valid accreditations of equipment prior to the award of this contract.
(d) Unless otherwise provided in this contract under the Warranty of Supplies or Warranty of Systems and Equipment clauses, the Contractor shall correct or replace accepted equipment or systems found to be deficient within one year after proper installations.
(1) The correction or replacement shall be at no cost to the Government.
(2) Should a modification to the delivered equipment be made by the Contractor, the one year period applies to the modification upon its proper installation.
(3) This paragraph (d) applies regardless of f.o.b. point or the point of acceptance of the deficient equipment/systems.
As prescribed in 239.7411(a), use the following clause:
(a) Subject to military security regulations, the Government shall permit the Contractor access at all reasonable times to Contractor furnished facilities. However, if the Government is unable to permit access, the Government at its own risk and expense shall maintain these facilities and the Contractor shall not be responsible for the service involving any of these facilities during the period of nonaccess, unless the service failure results from the Contractor's fault or negligence.
(b) During periods when the Government does not permit Contractor access, the Government will reimburse the Contractor at mutually acceptable rates for the loss of or damage to the equipment due to the fault or negligence of the Government. Failure to agree shall be a dispute concerning a question of fact within the meaning of the Disputes clause of this contract.
As prescribed in 239.7411(a), use the following clause:
(a) The Contractor shall furnish any classes of services or facilities that the Contractor offers or furnishes under published tariffs.
(b) When it is mutually agreed that the Contractor shall furnish nontariffed services, the Government shall order them under the Ordering of Facilities and Services clause of this agreement/contract. These nontariffed services may include the engineering, installation, alteration, or maintenance of facilities owned either by the Contractor or the Government, wherever located.
(c) Upon request of the Contracting Officer, the Contractor agrees to interconnect its facilities with any Government-owned or furnished telecommunications equipment, facilities, or transmission media. The Contractor shall use established technical criteria for ensuring continuity of service and traffic without damage to or degradation of commercial facilities.
As prescribed in 239.7411(a), use the following clause:
The Contractor shall acknowledge a communication service authorization or other type order for supplies and facilities by—
(a) Commencing performance; or
(b) Written acceptance by a duly authorized representative.
As prescribed in 239.7411(a), use the following clause:
(a)
(b) The Contractor shall furnish the services and facilities under this agreement/contract in accordance with—
(1) All applicable tariffs, rates, charges, rules, regulations, or requirements;
(i) Lawfully established by a governmental regulatory body; and
(ii) Applicable to service and facilities furnished or offered by the Contractor to the general public or the Contractor's subscribers;
(2) Rates, terms, and conditions of service and facilities furnished or offered by the Contractor to the general public or the Contractor's subscribers; or
(3) Rates, terms, and conditions of service as may be agreed upon, subject, when appropriate, to jurisdiction of a governmental regulatory body.
(c) The Government shall not prepay for services.
(d) For nontariffed services, the Contractor shall charge the Government at the lowest rate and under the most favorable terms and conditions for similar service and facilities offered to any other customer.
(e) Recurring charges for services and facilities shall, in each case, start with the satisfactory beginning of service or provision of facilities or equipment and are payable monthly in arrears.
(f) Subject to the Cancellation or Termination of Orders—Common Carriers clause, of this agreement/contract, the Government may stop the use of any service or facilities furnished under this agreement/contract at
(g) Expediting charges are costs necessary to get services earlier than normal. Examples are overtime pay or special shipment. When authorized, expediting charges shall be the additional costs incurred by the Contractor and the subcontractor. The Government shall pay expediting charges only when—
(1) They are provided for in the tariff established by a governmental regulatory body; or
(2) They are authorized in a communication service authorization or other contractual document.
(h) When services normally provided are technically unacceptable and the development, fabrication, or manufacture of special equipment is required, the Government may—
(1) Provide the equipment; or
(2) Direct the Contractor to acquire the equipment or facilities. If the Contractor acquires the equipment or facilities, the acquisition shall be competitive, if practicable.
(i) If at any time the Government defers or changes its orders for any of the services but does not cancel or terminate them, the amount paid or payable to the Contractor for the services deferred or modified shall be equitably adjusted under applicable tariffs filed by the Contractor with the regulatory commission in effect at the time of deferral or change. If no tariffs are in effect, the Government and the Contractor shall equitably adjust the rates by mutual agreement. Failure to agree on any adjustment shall be a dispute concerning a question of fact within the meaning of the Disputes clause of this contract.
As prescribed in 239.7411(a), use the following clause:
(a) The Contractor shall provide to the Contracting Officer—
(1) Upon request, a copy of the Contractor's current existing tariffs (including changes);
(2) Before filing, any application to a Federal, State, or any other regulatory agency for new or changes to, rates, charges, services, or regulations relating to any tariff or any of the facilities or services to be furnished solely or primarily to the Government; and
(3) Upon request, a copy of all information, material, and data developed or prepared in support of or in connection with an application under paragraph (a)(2) of this clause.
(b) The Contractor shall notify the Contracting Officer of any application that anyone other than the Contractor files with a governmental regulatory body which affects or will affect the rate or conditions of services under this agreement/contract. These requirements also apply to applications pending on the effective date of this agreement/contract.
As prescribed in 239.7411(a), use the following clause:
(a) If the Government cancels any of the services ordered under this agreement/contract, before the services are made available to the Government, or terminates any of these services after they are made available to the Government, the Government shall reimburse the Contractor for the actual nonrecoverable costs the Contractor has reasonably incurred in providing facilities and equipment for which the Contractor has no foreseeable reuse.
(b) The amount of the Government's liability upon cancellation or termination of any of the services ordered under this agreement/contract will be determined under applicable tariffs governing cancellation and termination charges which—
(1) Are filed by the Contractor with a governmental regulatory body, as defined in the Rates, Charges, and Services—Common Carriers clause of this agreement/contract;
(2) Are in effect on the date of termination; and
(3) Provide specific cancellation or termination charges for the facilities and equipment involved or show how to determine the charges.
(c) The amount of the Government's liability upon cancellation or termination of any of the services ordered under this agreement/contract, which are not subject to a governmental regulatory body, will be determined under a mutually agreed schedule in the communication services authorization (CSA) or other contractual document.
(d) If no applicable tariffs are in effect on the date of cancellation or termination or set forth in the applicable CSA or other contractual document, the Government's liability will be determined under the following settlement procedures—
(1) The Contractor agrees to provide the Contracting Officer, in such reasonable detail as the Contracting Officer may require, inventory schedules covering all items of property or facilities in the Contractor's possession, the cost of which is included in the Basic Cancellation or Termination Liability for which the Contractor has no foreseeable reuse.
(2) The Contractor shall use its best efforts to sell property or facilities when the Contractor has no foreseeable reuse or when the Government has not exercised its option to take title under the title to Telecommunications Facilities and Equipment clause of this agreement/contract. The Contractor shall apply any proceeds of the sale to reduce any payments by the Government to the Contractor under a cancellation or termination settlement.
(3) The Contractor shall record actual nonrecoverable costs under established accounting procedures prescribed by the cognizant governmental regulatory authority or, if no such procedures have been prescribed, under generally accepted accounting procedures applicable to the provision of telecommunication services for public use.
(4) The actual nonrecoverable costs are the installed costs of the facilities and equipment, less cost of reusable materials, and less net salvage value. Installed costs shall include the actual cost of equipment and materials specifically provided or used, plus the actual cost of installing (including engineering, labor, supervision, transportation, rights-of-way, and any other items which are chargeable to the capital accounts of the Contractor) less any costs the Government may have directly reimbursed the Contractor under the Special Construction and Equipment Charges clause of this agreement/contract. Deduct from the Contractor's installed cost, the net salvage value (salvage value less cost of removal). In determining net salvage value, give consideration to foreseeable reuse of the facilities and equipment by the Contractor. Make allowance for the cost of dismantling, removal, reconditioning, and disposal of the facilities and equipment when necessary either to the sale of facilities or their reuse by the Contractor in another location.
(5) The Basic Cancellation Liability is defined as the actual nonrecoverable cost which the Government shall reimburse the Contractor at the time services are cancelled. The Basic Termination Liability is defined as the nonrecoverable cost amortized in equal monthly increments throughout the liability period. Upon termination of services, the Government shall reimburse the Contractor for the nonrecoverable cost less such costs amortized to the date services are terminated. Establish the liability period as mutually agreed to but not to exceed ten years.
(6) When the Basic Cancellation or Termination Liability established by the CSA or other contractual document is based on estimated costs, the Contractor agrees to settle on the basis of actual cost at the time of termination or cancellation.
(7) The Contractor agrees that, if after settlement but within the termination liability period of the services, should the Contractor make reuse of equipment or facilities which were treated as nonreusable or nonsalvagable in the settlement, the Contractor shall reimburse the Government for the value of the equipment or facilities.
(8) The Contractor agrees to exclude—
(i) Any costs which are not included in determining cancellation and termination charges under the Contractor's standard practices or procedures; and
(ii) Charges not ordinarily made by the Contractor for similar facilities or equipment, furnished under similar circumstances.
(e) The Government may, under such terms and conditions as it may prescribe, make partial payments and payments on account against costs incurred by the Contractor in connection with the canceled or terminated portion of this agreement/contract. The Government may make these payments if in the opinion of the Contracting Officer the total of the payments is within the amount the Contractor is entitled. If the total of the payments is in excess of the amount finally agreed or determined to be due under this clause, the Contractor shall pay the excess to the Government upon demand.
(f) Failure to agree shall be a dispute concerning a question of fact within the meaning of the Disputes clause.
As prescribed in 239.7411(a), use the following clause:
(a) When feasible, the Contractor shall reuse canceled or terminated facilities or equipment to minimize the charges to the Government.
(b) If at any time the Government requires that telecommunications facilities or equipment be relocated within the Contractor's service area, the Government shall have the option of paying the costs of relocating the facilities or equipment in lieu of paying any termination or cancellation charge under the Cancellation or Termination of Orders-Common Carriers clause of this agreement/contract. The Basic Termination Liability applicable to the facilities or equipment in
(c) When there is another requirement or foreseeable reuse in place of canceled or terminated facilities or equipment, no charge shall apply and the Basic Cancellation or Termination Liability shall be appropriately reduced. When feasible, the Contractor shall promptly reuse discontinued channels or facilities, including equipment for which the Government is obligated to pay a minimum service charge.
As prescribed in 239.7411(b), use the following clause:
(a) The Government will not directly reimburse the Contractor for the cost of constructing any facilities or providing any equipment, unless the Contracting Officer authorizes direct reimbursement.
(b) If the Contractor stops using facilities or equipment which the Government has, in whole or part, directly reimbursed, the Contractor shall allow the Government credit for the value of the facilities or equipment attributable to the Government's contribution. Determine the value of the facilities and equipment on the basis of their foreseeable reuse by the Contractor at the time their use is discontinued or on the basis of the net salvage value, whichever is greater. The Contractor shall promptly pay the Government the amount of any credit.
(c) The amount of the direct special construction charge shall not exceed—
(1) The actual costs to the Contractor; and
(2) An amount properly allocable to the services to be provided to the Government.
(d) The amount of the direct special construction charge shall not include costs incurred by the Contractor which are covered by—
(1) A cancellation or termination liability; or
(2) The Contractor's recurring or other nonrecurring charges.
(e) The Contractor represents that—
(1) Recurring charges for the services, facilities, and equipment do not include in the rate base any costs that have been reimbursed by the Government to the Contractor; and
(2) Depreciation charges are based only on the cost of facilities and equipment paid by the Contractor and not reimbursed by the Government.
(f) If it becomes necessary for the Contractor to incur costs to replace any facilities or equipment, the Government shall assume those costs or reimburse the Contractor for replacement costs at mutually acceptable rates under the following circumstances—
(1) The Government paid direct special construction charges; or
(2) The Government reimbursed the Contractor for those facilities or equipment as a part of the recurring charges; and
(3) The need for replacement was due to circumstances beyond the control and without the fault of the Contractor.
(g) Before incurring any costs under paragraph (f) of this clause, the Government shall have the right to terminate the service under the Cancellation or Termination of Orders clause of this contract.
As prescribed in 239.7411(b), use the following clause:
(a) Title to all Contractor furnished facilities and equipment used under this agreement/contract shall remain with the Contractor even if the Government paid the costs of constructing the facilities or equipment. A mutually accepted communications service authorization may provide for exceptions.
(b) The Contractor shall operate and maintain all telecommunication facilities and equipment used under this agreement/contract whether the Government or the Contractor has title.
As prescribed in 239.7411(c), use the following clause:
(a) This basic agreement is not a contract. The Government incurs no monetary liability under this agreement.
(b) The Government incurs liability only upon issuance of a communications service authorization under the terms of this agreement.
As prescribed in 239.7411(c), use the following clause:
(a) This agreement shall continue in force from year to year, unless terminated by either party by 60 days written notice.
(b) Termination of this agreement does not cancel any communication service authorizations previously issued.
As prescribed in 239.7411(c), use the following clause:
(a) All communication service authorizations (CSAs) issued by ___ under Basic Agreement Number __, dated __ , -are transferred to this basic agreement. The CSAs shall continue in full force and effect as though placed under this agreement.
(b) Commun-ication service authorizations currently in effect which were issued by the activity in paragraph (a) of this clause under other agreements with the Contractor may also be transferred to this agreement.
As prescribed in 239.7411(d), use the following clause:
(a)
(1)
(2)
(3)
(i) Classified or sensitive information;
(ii) Matters involving intelligence activities, cryptologic activities related to national security, the command and control of military forces, or equipment that is an integral part of a weapon or weapons system; or
(iii) Matters critical to the direct fulfillment of military or intelligence missions.
(b) This solicitation/contract identifies classified or sensitive information that requires securing during telecommunications and requires the Contractor to secure telecommunications systems. The Contractor agrees to secure information and systems at the following location: (Identify the location.)
(c) To provide the security, the Contractor shall use Government-approved telecommunications equipment, devices, techniques, or services. A list of the approved equipment, etc. may be obtained from (identify where list can be obtained). Equipment, devices, techniques, or services used by the Contractor must be compatible or interoperable with (list and identify the location of any telecommunications security equipment, device, technique, or service currently being used by the technical or requirements organization or other offices with which the Contractor must communicate).
(d) Except as may be provided elsewhere in this contract, the Contractor shall furnish all telecommunications security equipment, devices, techniques, or services necessary to perform this contract. The Contractor must meet ownership eligibility conditions for communications security equipment designated as controlled cryptographic items.
(e) The Contractor agrees to include this clause, including this paragraph (e), in all subcontracts which require securing telecommunications.
As prescribed in 241.501-70(a), use the following clause:
This contract supersedes contract No. ___, dated __ which provided similar services. Any capital credits accrued to the Government, any remaining credits due to the Government under the connection charge, or any termination liability are transferred to this contract, as follows:
(List years and accrued credits by year and separate delivery points.)
(List by month and year the amount credited and show the remaining amount of outstanding credits due the Government.)
(List by month and year the amount of monthly facility cost recovered and show the remaining amount of facility cost to be recovered.)
As prescribed in 241.501-70(b), use the following clause:
Authorized representatives of the Government may have access to the Contractor's on-base facilities upon reasonable notice or in case of emergency.
As prescribed in 242.570, use the following clause:
The Contractor agrees to attend any postaward conference convened by the contracting activity or contract administration office in accordance with Federal Acquisition Regulation subpart 42.5.
As prescribed in 242.1404-2-70, use the following clause:
The Contractor shall request Government bills of lading by submitting a DD Form 1659, Application for U.S. Government Shipping Documentation/Instructions, to the—
(a) Transportation Officer, if named in the contract schedule; or
(b) Contract administration office.
As prescribed in 242.7204, use the following caluse:
(a)
(1)
(2)
(i) Needed to fulfill the production plan, including reasonable quantities for scrap, shrinkage, yield, etc.; and
(ii) Charged/billed to contracts or other cost objectives in a manner consistent with the need to fulfill the production plan.
(3) “Contractor” means a business unit as defined in section 31.001 of the Federal Acquisition Regulation (FAR).
(b)
(1) Maintain an MMAS that—
(i) Reasonably forecasts material requirements;
(ii) Ensures that costs of purchased and fabricated material charged or allocated to a contract are based on valid time-phased requirements; and
(iii) Maintains a consistent, equitable, and unbiased logic for costing of material transactions; and
(2) Assess its MMAS and take reasonable action to comply with the MMAS standards in paragraph (e) of this clause.
(c)
(1) Have policies, procedures, and operating instructions that adequately described its MMAS;
(2) Provide to the Administrative Contracting Officer (ACO), upon request, the results of the internal reviews that it has conducted to ensure compliance with established MMAS policies, procedures, and operating instructions; and
(3) Disclose significant changes in its MMAS to the ACO at least 30 days prior to implementation.
(d)
(i) If the Contractor agrees with the report findings and recommendations, the Contractor shall—
(A) Within 30 days (or such other date as may be mutually agreed to by the ACO and the Contractor), state its agreement in writing; and
(B) Within 60 days (or such other date as may be mutually agreed to by the ACO and the Contractor), correct the deficiencies or submit a corrective action plan showing milestones and actions to eliminate the deficiencies.
(ii) If the Contractor disagrees with the report findings and recommendations, the Contractor shall, within 30 days (or such other date as may be mutually agreed to by the ACO and the Contractor), state its rationale for each area of disagreement.
(2) The ACO will evaluate the Contractor's response and will notify the Contractor in writing of the—
(i) Determination concerning any remaining deficiencies;
(ii) Adequacy of any proposed or completed corrective action plan; and
(iii) Need for any new or revised corrective action plan.
(3) When the ACO determines the MMAS deficiencies have a material impact on Government contract costs, the ACO must reduce progress payments by an appropriate percentage based on affected costs (in accordance with FAR 32.503-6) and/or disallow costs on vouchers (in accordance with FAR 42.803) until the ACO determines that—
(i) The deficiencies are corrected; or
(ii) The amount of the impact is immaterial.
(e)
(1) Have an adequate system description including policies, procedures, and operating instructions that comply with the FAR and Defense FAR Supplement;
(2) Ensure that costs of purchased and fabricated material charged or allocated to a contract are based on valid time-phased requirements as impacted by minimum/economic order quantity restrictions.
(i) A 98 percent bill of material accuracy and a 95 percent master production schedule accuracy are desirable as a goal in order to ensure that requirements are both valid and appropriately time-phased.
(ii) If systems have accuracy levels below these, the Contractor shall provide adequate evidence that—
(A) There is no material harm to the Government due to lower accuracy levels; and
(B) The cost to meet the accuracy goals is excessive in relation to the impact on the Government;
(3) Provide a mechanism to identify, report, and resolve system control weaknesses and manual override. Systems should identify operational exceptions such as excess/residual inventory as soon as known;
(4) Provide audit trails and maintain records (manual and those in machine readable form) necessary to evaluate system logic and to verify through transaction testing that the system is operating as desired;
(5) Establish and maintain adequate levels of record accuracy, and include reconciliation of recorded inventory quantities to physical inventory by part number on a periodic basis. A 95 percent accuracy level is desirable. If systems have an accuracy level below 95 percent, the Contractor shall provide adequate evidence that—
(i) There is no material harm to the Government due to lower accuracy levels; and
(ii) The cost to meet the accuracy goal is excessive in relation to the impact on the Government;
(6) Provide detailed descriptions of circumstances that will result in manual or system generated transfers of parts;
(7) Maintain a consistent, equitable, and unbiased logic for costing of material transactions as follows:
(i) The Contractor shall maintain and disclose written policies describing the transfer methodology and the loan/pay-back technique.
(ii) The costing methodology may be standard or actual cost, or any of the inventory costing methods in 48 CFR 9904.411-50(b). The Contractor shall maintain consistency across all contract and customer types, and from accounting period to accounting period for initial charging and transfer charging.
(iii) The system should transfer parts and associated costs within the same billing period. In the few instances where this may not be appropriate, the Contractor may accomplish the material transaction using a loan/pay-back technique. The “loan/pay-back technique” means that the physical part is moved temporarily from the contract, but the cost of the part remains on the contract. The procedures for the loan/pay-back technique must be approved by the ACO. When the technique is used, the Contractor shall have controls to ensure—
(A) Parts are paid back expeditiously;
(B) Procedures and controls are in place to correct any overbilling that might occur;
(C) Monthly, at a minimum, identification of the borrowing contract and the date the part was borrowed; and
(D) The cost of the replacement part is charged to the borrowing contract;
(8) Where allocations from common inventory accounts are used, have controls (in addition to those in paragraphs (e)(2) and (7) of this clause) to ensure that—
(i) Reallocations and any credit due are processed no less frequently than the routine billing cycle;
(ii) Inventories retained for requirements that are not under contract are not allocated to contracts; and
(iii) Algorithms are maintained based on valid and current data;
(9) Regardless of the provisions of FAR 45.505-3(f)(1)(ii), have adequate controls to ensure that physically commingled inventories that may include material for which costs are charged or allocated to fixed-price, cost-reimbursement, and commercial contracts do not compromise requirements of any of the standards in paragraphs (e)(1) through (8) of this clause. Government-furnished material shall not be—
(i) Physically commingled with other material; or
(ii) Used on commercial work; and
(10) Be subjected to periodic internal reviews to ensure compliance with established policies and procedures.
As prescribed in 242.1107-70(a), use the following clause:
(a) The Contractor shall use management procedures in the performance of this contract that provide for—
(1) Planning and control of costs;
(2) Measurement of performance (value for completed tasks); and
(3) Generation of timely and reliable information for the cost/schedule status report (C/SSR).
(b) As a minimum, these procedures must provide for—
(1) Establishing the time-phased budgeted cost of work scheduled (including work authorization, budgeting, and scheduling), the budgeted cost for work performed, the actual cost of work performed, the budget at completion, the estimate at completion, and provisions for subcontractor performance measurement and reporting;
(2) Applying all direct and indirect costs and provisions for use and control of management reserve and undistributed budget;
(3) Incorporating changes to the contract budget base for both Government directed changes and internal replanning;
(4) Establishing constraints to preclude subjective adjustment of data to ensure that performance measurement remains realistic. The total allocated budget may exceed the contract budget base only after consultation with the Contracting Officer. For cost-reimbursement contracts, the contract budget base shall exclude changes for cost growth increase, other than for authorized changes to the contract scope; and
(5) Establishing the capability to accurately identify and explain significant cost and schedule variances, both on a cumulative basis and projected at completion basis.
(c) The Contractor may use a cost/schedule control system that has been recognized by the cognizant Administrative Contracting Officer (ACO) as complying with the earned value management system criteria provided in DoD 5000.2-R, Mandatory Procedures for Major Defense Acquisition Programs (MDAPs) and Major Automated Information System (MAIS) Acquisition Programs.
(d) The Government may require integrated baseline reviews. Such reviews shall be scheduled as early as practicable and should be conducted within 180 calendar days after (1) contract award, (2) the exercise of significant contract options, or (3) the incorporation of major modifications. The objective of the integrated baseline review is for the Government and the Contractor to jointly assess areas, such as the Contractor's planning, to ensure complete coverage of the statement of work, logical scheduling of the work activities, adequate resourcing, and identification of inherent risks.
(e) The Contractor shall provide access to all pertinent records, company procedures, and data requested by the ACO, or authorized representative, to—
(1) Show proper implementation of the procedures generating the cost and schedule information being used to satisfy the C/SSR contractual data requirements to the Government; and
(2) Ensure continuing application of the accepted company procedures in satisfying the C/SSR data item.
(f) The Contractor shall submit any substantive changes to the procedures and their impact to the ACO for review.
(g) The Contractor shall require a subcontractor to furnish C/SSR in each case where the subcontract is other than firm-fixed-price, is 12 months or more in duration, and has critical or significant tasks related to the prime contract. Critical or significant tasks shall be defined by mutual agreement between the Government and Contractor. Each subcontractor's reported cost and schedule information shall be incorporated into the Contractor's C/SSR.
As prescribed in 242.1107-70(b), use the following provision:
(a) The offeror shall submit a written summary of the management procedures it will establish, maintain, and use in the performance of any resultant contract to comply with the requirements of the clause at 252.242-7005, Cost/Schedule Status Report.
(b) If the offeror proposes to use a cost/schedule control system that has been recognized by the cognizant Administrative Contracting Officer as complying with the earned value management system criteria of DoD 5000.2-R, Mandatory Procedures for Major Defense Acquisition Programs (MDAPs) and Major Automated Information System (MAIS) Acquisition Programs, the offeror may submit a copy of the documentation of such recognition instead of the written summary required by paragraph (a) of this provision.
As prescribed in 243.205-70, use the following clause:
When costs are a factor in any price adjustment under this contract, the contract cost principles and procedures in FAR part 31 and DFARS part 231, in effect on the date of this contract, apply.
As prescribed in 243.205-71, use the following clause:
(a) The amount of any request for equitable adjustment to contract terms shall accurately reflect the contract adjustment for which the Contractor believes the Government is liable. The request shall include only costs for performing the change, and shall not include any costs that already have been reimbursed or that have been separately claimed. All indirect costs included in the request shall be properly allocable to the change in accordance with applicable acquisition regulations.
(b) In accordance with 10 U.S.C. 2410(a), any request for equitable adjustment to contract terms that exceeds the simplified acquisition threshold shall bear, at the time of submission, the following certificate executed by an individual authorized to certify the request on behalf of the Contractor:
I certify that the request is made in good faith, and that the supporting data are accurate and complete to the best of my knowledge and belief.
(c) The certification in paragraph (b) of this clause requires full disclosure of all relevant facts, including—
(1) Cost or pricing data if required in accordance with subsection 15.403-4 of the Federal Acquisition Regulation (FAR); and
(2) Information other than cost or pricing data, in accordance with subsection 15.403-3 of the FAR, including actual cost data and data to support any estimated costs, even if cost or pricing data are not required.
(d) The certification requirement in paragraph (b) of this clause does not apply to—
(1) Requests for routine contract payments; for example, requests for payment for accepted supplies and services, routine vouchers under a cost-reimbursement type contract, or progress payment invoices; or
(2) Final adjustment under an incentive provision of the contract.
As prescribed in 244.403, use the following clause:
In addition to the clauses listed in paragraph (c) of the Subcontracts for Commercial Items and Commercial Components clause of this contract (Federal Acquisition Regulation 52.244-6), the Contractor shall include the terms of the following clauses, if applicable, in subcontracts for commercial
252.225-7014Preference for Domestic Specialty Metals, Alternate I (10 U.S.C. 2241 note).
252.247-7023Transportation of Supplies by Sea (10 U.S.C. 2631).
252.247-7024Notification of Transportation of Supplies by Sea (10 U.S.C. 2631).
As prescribed in 245.310-70, use the following clause:
(a)
(b) The Contractor shall not duplicate, copy, or otherwise reproduce MC&G property for purposes other than those necessary for performance of the contract.
(c) At the completion of performance of the contract, the Contractor, as directed by the Contracting Officer, shall either destroy or return to the Government all Government-furnished MC&G property not consumed in the performance of this contract.
As prescribed in 245.505-14(a), use the following clause:
(a) The Contractor shall provide an annual report—
(1) For all DoD property for which the Contractor is accountable under the contract;
(2) Prepared in accordance with the requirements of DD Form 1662, DoD Property in the Custody of Contractors, or approved substitute, including instructions on the reverse side of the form;
(3) In duplicate, to the cognizant Government property administrator, no later than October 31.
(b) The Contractor is responsible for reporting all Government property accountable to this contract, including that at subcontractor and alternate locations.
As prescribed in 246.370, use the following clause:
At the time of each delivery of supplies or services under this contract, the Contractor shall prepare and furnish to the Government a material inspection and receiving report in the manner and to the extent required by appendix F, Material Inspection and Receiving Report, of the Defense FAR Supplement.
As prescribed in 246.710 (1), use the following clause:
(a)
(b)
(c)
(d)
(1) Within a reasonable time after such notification, the Contracting Officer may—
(i) By written notice, direct the Contractor to correct or replace at the Contractor's expense the nonconforming technical data promptly; or
(ii) If the Contracting Officer determines that the Government no longer has a requirement for correction or replacement of the data, or that the data can be more reasonably corrected by the Government, inform the Contractor by written notice that the Government elects a price or fee adjustment instead of correction or replacement.
(2) If the Contractor refuses or fails to comply with a direction under paragraph (d) (1)(i) of this clause, the Contracting Officer may, within a reasonable time of the refusal or failure—
(i) By contract or otherwise, correct or replace the nonconforming technical data and charge the cost to the Contractor; or
(ii) Elect a price or fee adjustment instead of correction or replacement.
(3) The remedies in this clause represent the only way to enforce the Government's rights under this clause.
(e) The provisions of this clause apply anew to that portion of any corrected or replaced technical data furnished to the Government under paragraph (d)(1)(i) of this clause.
Alternate I (DEC 1991). As prescribed in 246.710(2), substitute the following for paragraph (d)(3) of the basic clause:
(3) In addition to the remedies under paragraphs (d)(1) and (2) of this clause, the Contractor shall be liable to the Government for all damages to the Government as a result of the breach of warranty.
(i) The additional liability under paragraph (d)(3) of this clause shall not exceed 75 percent of the target profit.
(ii) If the breach of the warranty is with respect to the data supplied by an equipment subcontractor, the limit of the Contractor's liability shall be—
(A) Ten percent of the total subcontract price in a firm fixed price subcontract;
(B) Seventy-five percent of the total subcontract fee in a cost-plus-fixed-fee or cost-plus-award-fee subcontract; or
(C) Seventy-five percent of the total subcontract target profit or fee in a fixed-price or cost-plus-incentive-type contract.
(iii) Damages due the Government under the provisions of this warranty are not an allowable cost.
(iv) The additional liability in paragraph (d)(3) of this clause shall not apply—
(A) With respect to the requirements for product drawings and associated lists, special inspection equipment (SIE) drawings and associated lists, special tooling drawings and associated lists, SIE operating instructions, SIE descriptive documentation, and SIE calibration procedures under MIL-T-31000, General Specification for Technical Data Packages, Amendment 1, or MIL-T-47500, General Specification for Technical Data Packages, Supp 1, or drawings and associated lists under level 2 or level 3 of MIL-D-1000A, Engineering and Associated Data Drawings, or DoD-D-1000B, Engineering and Associated Lists Drawings (Inactive for New Design) Amendment 4, Notice 1; or drawings and associated lists under category E or I of MIL-D-1000, Engineering and Associated Lists Drawings, provided that the data furnished by the Contractor was current, accurate at time of submission, and did not involve a significant omission of data necessary to comply with the requirements; or
(B) To defects the Contractor discovers and gives written notice to the Government before the Government discovers the error.
Alternate II (DEC 1991). As prescribed at 246.710(3), substitute the following paragraph for paragraph (d)(3) of the basic clause:
(3) In addition to the remedies under paragraphs (d)(1) and (2) of this clause, the Contractor shall be liable to the Government for all damages to the Government as a result of the breach of the warranty.
(i) The additional liability under paragraph (d)(3) of this clause shall not exceed ten percent of the total contract price.
(ii) If the breach of the warranty is with respect to the data supplied by an equipment subcontractor, the limit of the Contractor's liability shall be—
(A) Ten percent of the total subcontract price in a firm fixed-price subcontract;
(B) Seventy-five percent of the total subcontract fee in a cost-plus-fixed-fee or cost-plus-award-fee subcontract; or
(C) Seventy-five percent of the total subcontract target profit or fee in a fixed-price or cost-plus-incentive-type contract.
(iii) The additional liability specified in paragraph (d)(3) of this clause shall not apply—
(A) With respect to the requirements for product drawings and associated lists, special inspection equipment (SIE) drawings and associated lists, special tooling drawings and associated lists, SIE operating instructions, SIE descriptive documentation, and SIE calibration procedures under MIL-T-31000, General Specification for Technical Data Packages, Amendment 1, or MIL-T-47500, General Specification for Technical Data Packages, Supp 1, or drawings and associated lists under level 2 or level 3 of MIL-D-1000A, Engineering and Associated Data Drawings, or DoD-D-1000B, Engineering and Associated Lists Drawings (Inactive for New Design) Amendment 4, Notice 1; or drawings and associated lists under category E or I of
(B) To defects the Contractor discovers and gives written notice to the Government before the Government discovers the error.
As prescribed in 246.710(4), use the following clause:
(a) In addition to any other representations in this contract, the Contractor warrants, except as provided in paragraph (j) of this clause, that the work performed under this contract conforms to the contract requirements and is free of any defect of equipment, material, or design furnished or workmanship performed by the Contractor or any subcontractor or supplier at any tier.
(b) This warranty shall continue for the period(s) specified in Section 13, VOB, Part B, commencing from the date of final acceptance of the work under this contract. If the Government takes possession of any part of the work before final acceptance, this warranty shall continue for the period(s) specified in Section 13, VOB, Part B, from the date the Government takes possession.
(c) The Contractor shall remedy, at the Contractor's expense, any failure to conform or any defect. In addition, the Contractor shall remedy, at the Contractor's expense, any damage to Government-owned or -controlled real or personal property when that damage is the result of—
(1) The Contractor's failure to conform to contract requirements; or
(2) Any defect of equipment, material, or design furnished or workmanship performed.
(d) The Contractor shall restore any work damaged in fulfilling the terms and conditions of this clause.
(e) The Contracting Officer shall notify the Contractor, in writing, within a reasonable period of time after the discovery of any failure, defect, or damage.
(f) If the Contractor fails to remedy any failure, defect, or damage within a reasonable period of time after receipt of notice, the Government shall have the right to replace, repair, or otherwise remedy the failure, defect, or damage at the Contractor's expense.
(g) With respect to all warranties, express or implied, from subcontractors, manufacturers, or suppliers for work performed and materials furnished under this contract, the Contractor shall—
(1) Obtain all warranties that would be given in normal commercial practice;
(2) Require all warranties to be executed in writing, for the benefit of the Government, if directed by the Contracting Officer; and
(3) Enforce all warranties for the benefit of the Government as directed by the Contracting Officer.
(h) In the event the Contractor's warranty under paragraph (b) of this clause has expired, the Government may bring suit at its expense to enforce a subcontractor's, manufacturer's, or supplier's warranty.
(i) Unless a defect is caused by the Contractor's negligence, or the negligence of a subcontractor or supplier at any tier, the Contractor shall not be liable for the repair of any defects of material or design furnished by the Government or for the repair of any damage resulting from any defeat in Government-furnished material or design.
(j) This warranty shall not limit the Government's right under the Inspection clause of this contract, with respect to latent defects, gross mistakes, or fraud.
As prescribed in 247.270-6(a), use the following clause:
(a) If the Contractor finds unusual ship, dock, or cargo conditions associated with loading or unloading a particular cargo, that will work a hardship on the Contractor if loaded or unloaded at the basic commodity rates, the Contractor shall—
(1) Notify the Contracting Officer before performing the work, if feasible, but no later than the vessel sailing time; and
(2) Submit any associated request for price adjustment to the Contracting Officer within 10 working days of the vessel sailing time.
(b) Unusual conditions include, but are not limited to, inaccessibility of place of stowage to the ship's cargo gear, side port operations, and small quantities of cargo in any one hatch.
(c) The Contracting Officer will investigate the conditions promptly after receiving the notice. If the Contracting Officer finds that the conditions are unusual and do materially affect the cost of loading or unloading, the Contracting Officer will authorize payment at the applicable man-hour rates set forth in the schedule of rates of this contract.
As prescribed in 247.270-6(b), use the following clause:
(a) The Contractor warrants that the prices set forth in this contract—
(1) Are based upon the wage rates, allowances, and conditions set forth in the collective bargaining agreements between the Contractor and its employees, in effect as of (
(2) Apply to operations by the Contractor on non-Government work as well as under this contract; and
(3) Do not include any allowance for cost increases that may—
(i) Become effective under the terms of the collective bargaining agreements after the date in paragraph (a)(1) of this clause; or
(ii) Result from modification of the collective bargaining agreements after the date in paragraph (a)(1).
(b) The Contractor shall notify the Contracting Officer within 60 days of receipt of notice of any changes (increase or decrease) in the wage rates, allowances, fringe benefits, and conditions that apply to its direct labor employees, if the changes—
(1) Are pursuant to the provisions of the collective bargaining agreements; or
(2) Are a result of effective modifications to the agreements; and
(3) Would change the Contractor's costs to perform this contract.
(c) The Contractor shall include in its notification—
(1) A proposal for an adjustment in the contract commodity, activity, or work-hour prices; and
(2) Data, in such form as the Contracting Officer may require, explaining the—
(i) Causes;
(ii) Effective date; and
(iii) Amount of the increase or decrease in the Contractor's proposal for the adjustment.
(d) Promptly upon receipt of any notice and data described in paragraph (c), the Contractor and the Contracting Officer shall negotiate an adjustment in the existing contract commodity, activity, or man-hour prices. However, no upward adjustment of the existing commodity, activity, or work-hour prices will be allowed in excess of ____ percent per year, except as provided in the Changes clause of this contract.
(1) Changes in the contract prices shall reflect, in addition to the direct and variable indirect labor costs, the associated changes in the costs for social security, unemployment compensation, taxes, and workman's compensation insurance.
(2) There will be no adjustment to increase the dollar amount allowances of the Contractor's profit.
(3) The agreed upon adjustment, its effective date, and the revised commodity, activity, or work-hour prices for services set forth in the schedule of rates, shall be incorporated in the contract by supplemental agreement.
(e) There will be no adjustment for any changes in the quantities of labor that the Contractor contemplated for each specific commodity, except as may result from modifications of the collective bargaining agreements. For the purpose of administering this clause, the Contractor shall submit to the Contracting Officer, within five days after award, the accounting data and computations the Contractor used to determine its estimated efficiency rate in the performance of this contract, to include the Contractor's computation of the costs apportioned for each rate set forth in the schedule of rates.
(f) Failure of the parties to agree to an adjustment under this clause will be deemed to be a dispute concerning a question of fact within the meaning of the Disputes clause of this contract. The Contractor shall continue performance pending agreement on, or determination of, any such adjustment and its effective date.
(g) The Contractor shall include with the final invoice submitted under this contract a statement that the Contractor has not experienced a decrease in rates of pay for labor, or that the Contractor has given notice of all such decreases in compliance with paragraph (b) of this clause.
As prescribed in 247.270-6(c), use the following clause:
(a)
(1) Substantially affects the cost of performing this contract;
(2) Is generally applicable to the port where work under this contract is performed; and
(3) Applies to operations by the Contractor on non-Government work as well as to work under this contract.
(b)
(c)
(2) No such demand shall be made before 90 days after the date of this contract, and thereafter neither party shall make a demand having an effective date within 90 days of the effective date of any prior demand. However, this limitation does not apply to a wage adjustment during the 90 day period.
(3) Each demand shall specify a date (the same as or subsequent to the date of the delivery of the demand) as to when the revised prices shall be effective. This date is the effective date of the price revision.
(i) If the Contractor makes a demand under this clause, the demand shall briefly state the basis of the demand and include the statements and data referred to in paragraph (d) of this clause.
(ii) If the demand is made by the Contracting Officer, the Contractor shall furnish the statements and data within 30 days of the delivery of the demand.
(d)
(1) A new estimate and breakdown of the unit cost and the proposed prices for the services the Contractor will perform under this contract after the effective date of the price revision, itemized to be consistent with the original negotiations of the contract;
(2) An explanation of the difference between the original (or last preceding) estimate and the new estimate;
(3) Such relevant operating data, cost records, overhead absorption reports, and accounting statements as may be of assistance in determining the accuracy and reliability of the new estimate;
(4) A statement of the actual costs of performance under this contract to the extent that they are available at the time of the negotiation of the revision of prices under this clause; and
(5) Any other relevant data usually furnished in the case of negotiations of prices under a new contract. The Government may examine and audit the Contractor's accounts, records, and books as the Contracting Officer considers necessary.
(e)
(2) If the prices in this contract were established by competitive negotiation, they shall not be revised upward unless justified by changes in conditions occurring after the contract was awarded.
(3) The agreement reached after each negotiation will be incorporated into the contract by supplemental agreement.
(f)
(g)
(2) The Contractor shall request a price adjustment within 30 days of any retroactive wage adjustment. The Contractor shall support its request with—
(i) An estimate of the changes in cost resulting from the retroactive wage adjustment;
(ii) Complete information upon which the estimate is based; and
(iii) A certified copy of the collective bargaining agreement, arbitration award, or other document evidencing the retroactive wage adjustment.
(3) Subject to the limitation in paragraph (g)(2) of this clause as to the time of making a request, completion or termination of this contract shall not affect the Contractor's right under paragraph (g) of this clause.
(4) In case of disagreement concerning any question of fact, including whether any adjustment should be made, or the amount of such adjustment, the disagreement will be resolved in accordance with the Disputes clause of this contract.
(5) The Contractor shall notify the Contracting Officer in writing of any request by or on behalf of the employees of the Contractor which may result in a retroactive wage adjustment. The notice shall be given within 20 days after the request, or if the request occurs before contract execution, at the time of execution.
As prescribed in 247.270-6(d), use the following clause:
The amount of work and services the Contractor may be ordered to furnish shall be the amount the Contracting Officer may order from time to time. In any event, the Government is obligated to compensate the Contractor the monthly lump sum specified in the Schedule entitled Fixed Charges, for each month or portion of a month the contract remains in effect.
As prescribed in 247.270-6(e), use the following clause:
The amount of work and services the Contractor may be ordered to furnish shall be the amount the Contracting Officer may order from time to time. In any event, the Government shall order, during the term of this contract, work or services having an aggregate value of not less than $100.
As prescribed in 247.270-6(f), use the following clause:
The Contractor agrees to use only experienced, responsible, and capable people to perform the work. The Contracting Officer may require that the Contractor remove from the job, employees who endanger persons or property, or whose continued employment under this contract is inconsistent with the interest of military security.
As prescribed in 247.270-6(g), use the following clause:
(a) The Contractor shall be—
(1) Liable to the Government for loss or damage to property, real and personal, owned by the Government or for which the Government is liable;
(2) Responsible for, and hold the Government harmless from, loss of or damage to property not included in paragraph (a)(1); and
(3) Responsible for, and hold the Government harmless from, bodily injury and death of persons, resulting either in whole or in part from the negligence or fault of the Contractor, its officers, agents, or employees in the performance of work under this contract.
(b) For the purpose of this clause, all cargo loaded or unloaded under this contract is agreed to be property owned by the Government or property for which the Government is liable.
(1) The amount of the loss or damage as determined by the Contracting Officer will be withheld from payments otherwise due the Contractor.
(2) Determination of liability and responsibility by the Contracting Officer will constitute questions of fact within the meaning of the Disputes clause of this contract.
(c) The general liability and responsibility of the Contractor under this clause are subject only to the following specific limitations. The Contractor is not responsible to the Government for, and does not agree to hold the Government harmless from, loss or damage to property or bodily injury to or death of persons if—
(1) The unseaworthiness of the vessel, or failure or defect of the gear or equipment furnished by the Government, contributed jointly with the fault or negligence of the Contractor in causing such damage, injury, or death; and
(i) The Contractor, his officers, agents, and employees, by the exercise of due diligence, could not have discovered such unseaworthiness or defect of gear or equipment; or
(ii) Through the exercise of due diligence could not otherwise have avoided such damage, injury, or death.
(2) The damage, injury, or death resulted solely from an act or omission of the Government or its employees, or resulted solely from proper compliance by officers, agents, or employees of the Contractor with specific directions of the Contracting Officer.
(d) The Contractor shall at its own expense acquire and maintain insurance during the term of this contract, as follows—
(1) Standard workmen's compensation and employer's liability insurance and longshoremen's and harbor workers’ compensation insurance, or such of these as may be proper under applicable state or Federal statutes.
(i) The Contractor may, with the prior approval of the Contracting Officer, be a self-insurer against the risk of this paragraph (d)(1).
(ii) This approval will be given upon receipt of satisfactory evidence that the Contractor has qualified as a self-insurer under applicable provision of law.
(2) Bodily injury liability insurance in an amount of not less than $300,000 on account of any one occurrence.
(3) Property damage liability insurance (which shall include any and all property, whether or not in the care, custody, or control of the Contractor) in an amount of not less than $300,000 for any one occurrence.
(e) Each policy shall provide, by appropriate endorsement or otherwise, that cancellation or material change in the policy shall not be effective until after a 30 day written notice is furnished the Contracting Officer.
(f) The Contractor shall furnish the Contracting Officer with satisfactory evidence of the insurance required in paragraph (d) before performance of any work under this contract.
(g) The Contractor shall, at its own cost and expense, defend any suits, demands, claims, or actions, in which the United States might be named as a co-defendant of the Contractor, resulting from the Contractor's performance of work under this contract. This requirement is without regard to whether such suit, demand, claim, or action was the result of the Contractor's negligence. The Government shall have the right to appear in such suit, participate in defense, and take such actions as may be necessary to protect the interest of the United States.
(h) It is expressly agreed that the provisions in paragraphs (d) through (g) of this clause shall not in any manner limit the liability or extend the liability of the Contractor as provided in paragraphs (a) through (c) of this clause.
(i) The Contractor shall—
(1) Equitably reimburse the Government if the Contractor is indemnified, reimbursed, or relieved of any loss or damage to Government property;
(2) Do nothing to prevent the Government's right to recover against third parties for any such loss or damage; and
(3) Furnish the Government, upon the request of the Contracting Officer, at the Government's expense, all reasonable assistance and cooperation in obtaining recovery, including the prosecution of suit and the execution of instruments of assignment in favor of the Government.
As prescribed in 247.271-4(a), use the following provision:
(a) The Government will evaluate bids on the basis of total aggregate price of all items within an area of performance under a given schedule.
(1) An offeror must bid on all items within a specified area of performance for a given schedule. Failure to do so shall be cause for rejection of the bid for that area of performance of that Schedule. If there is to be no charge for an item, an entry such as “No Charge,” or the letters “N/C” or “0,” must be made in the unit price column of the Schedule.
(2) Any bid which stipulates minimum charges or graduated prices for any or all items shall be rejected for that area of performance within the Schedule.
(b) In addition to other factors, the Contracting Officer will evaluate bids on the basis of advantages or disadvantages to the Government that might result from making more than one award (multiple awards).
(1) In making this evaluation, the Contracting Officer will assume that the administrative cost to the Government for issuing and administering each contract awarded under this solicitation would be $500.
(2) Individual awards will be for the items and combinations of items which result in the lowest aggregate cost to the Government, including the administrative costs in paragraph (b)(1).
(c) When drayage is necessary for the accomplishment of any item in the bid schedule, the Offeror shall include in the unit price any costs for bridge or ferry tolls, road use charges or similar expenses.
(d) Unless otherwise provided in this solicitation, the Offeror shall state prices in amounts per hundred pounds on gross or net weights, whichever is applicable. All charges shall be subject to, and payable on, the basis of 100 pounds minimum weight for unaccompanied baggage and a 500 pound minimum weight for household goods, net or gross weight, whichever is applicable.
Alternate I (DEC 1991). As prescribed in 247.271-4(a), add the following paragraph (e) to the basic clause:
(e) Notwithstanding paragraph (a), when “additional services” are added to any schedule, such “additional services” items will not be considered in the evaluation of bids.
As prescribed in 247.271-4(b), use the following provision:
(a) The Government shall make award by area to the qualified low bidder under each of the specified schedules to the extent of the bidder's stated guaranteed daily capability as provided in this solicitation and the Estimated Quantities Schedule.
(b) The Government reserves the right to make an award of two or more areas to a single bidder if such award will result in an overall lower estimated cost to the Government.
(c) The Government also reserves the right to award additional contracts, as a result of this solicitation, to the extent necessary to meet its estimated maximum daily requirements.
As prescribed in 247.271-4(d), use the following clause:
(a) The Contractor shall furnish services and materials for the preparation of personal property (including servicing of appliances) for movement or storage, drayage and related services. Unless otherwise indicated in the Schedule, the Contractor shall—
(1) Furnish all materials except Government-owned containers (Federal Specification PPP-B-580), all equipment, plant and labor; and
(2) Perform all work in accomplishing containerization of personal property for overseas or domestic movement or storage, including—
(i) Stenciling;
(ii) Cooperage;
(iii) Drayage of personal property in connection with other services;
(iv) Decontainerization of inbound shipments of personal property; and
(v) The handling of shipments into and out of the Contractor's facility.
(b) Excluded from the scope of this contract is the furnishing of like services or materials which are provided incident to complete movement of personal property when purchased by the Through Government Bill of Lading or other method/mode of shipment or property to be moved under the Do-It-Yourself moving program or otherwise moved by the owner.
As prescribed in 247.271-4(e), use the following clause:
(a) This contract begins January 1, __, and ends December 31, __, both dates inclusive. Any work ordered before, and not completed by the expiration date shall be governed by the terms of this contract.
(b) The Government will not place new orders under this contract that require that performance commence more than 15 days after the expiration date.
(c) The Government may place orders required for the completion of services (for shipments in the Contractor's possession) for 180 days past the expiration date.
As prescribed in 247.271-4(g), use the following clause:
(a) The Government will place orders for items of supplies or services with the contractor awarded the initial contract to the extent of the contractor's guaranteed maximum daily capability. However, the contractor may accept an additional quantity in excess of its capability to accommodate a single order.
(b) Orders for additional requirements will be placed in a like manner with the next higher contractor to the extent of its guaranteed maximum daily capability. The Government will repeat this procedure until its total daily requirement is fulfilled.
(c) In the event the procedure in paragraphs (a) and (b) does not fulfill the Government's total daily requirement, the Government may offer additional orders under the contract to contractors without regard to their guaranteed maximum daily capability.
As prescribed in 247.271-4(h), use the following clause and complete paragraph (b) by defining each area of performance as required (see 247.271-2(b)):
(a) The Government will consider all areas of performance described in paragraph (b) as including the Contractor's facility, regardless of geographical location.
(b) The Contractor shall perform services within the following defined areas of performance, which include terminals identified therein: ____.
As prescribed in 247.271-4(i), use the following clause:
The Contractor shall be liable for all demurrage, detention, or other charges as a result of its failure to load or unload trucks, freight cars, freight terminals, vessel piers, or warehouses within the free time allowed under applicable rules and tariffs.
As prescribed in 216.506(d), substitute the following paragraph (f) for paragraph (f) of the basic clause at FAR 52.216-21.
(f) Orders issued during the effective period of this contract and not completed within that time shall be completed by the Contractor within the time specified in the order. The rights and obligations of the Contractor and the Government for those orders shall be governed by the terms of this contract to the same extent as if completed during the effective period.
As prescribed in 247.271-4(k), use the following clause:
(a) Definitions.
As used in this clause—
(b) For shipments picked up under Schedule I, Outbound Services, or delivered under Schedule II, Inbound Services—
(1) If notified within one year after delivery that the owner has discovered loss or damage to the owner's property, the Contractor agrees to indemnify the Government for loss or damage to the property which arises from any cause while it is in the Contractor's possession. The Contractor's liability is—
(i)
(ii)
(2) The Contractor shall make prompt payment to the owner of the property for any loss or damage for which the Contractor is liable.
(3) In the absence of evidence or supporting documentation which places liability on a carrier or another contractor, the destination contractor shall be presumed to be liable for the loss or damage, if timely notified.
(c) For shipments picked up or delivered under Schedule III, Intra-City and Intra-Area—
(1) If notified of loss or damage within 75 days following delivery, the Contractor agrees to indemnify the Government for loss or damage to the owner's property.
(2) The Contractor's liability shall be for the full cost of satisfactory repair, or for the current replacement value of the article less depreciation, up to a maximum liability of $1.25 per pound times the net weight of the shipment.
(3) The Contractor has full salvage rights to damaged items which are not repairable and for which the Government has received compensation at replacement value.
As prescribed in 247.271-4(l), use the following clause:
(a) The Contractor shall—
(1) Forward to the rightful owner, articles of personal property inadvertently packed with goods of other than the rightful owner.
(2) Ensure that all shipments are stenciled correctly. When a shipment is sent to an incorrect address due to incorrect stenciling by the Contractor, the Contractor shall forward it to its rightful owner.
(3) Deliver to the designated air or surface terminal all pieces of a shipment, in one lot, at the same time. The Contractor shall forward to the owner any pieces of one lot not included in delivery, and remaining at its facility after departure of the original shipment.
(b) Forwarding under paragraph (a) shall be—
(1) With the least possible delay;
(2) By a mode of transportation selected by the Contracting Officer; and
(3) At the Contractor's expense.
As prescribed in 247.271-4(m), use the following clause:
The Contractor shall not subcontract without the prior written approval of the Contracting Officer. The facilities of any approved subcontractor shall meet the minimum standards required by this contract.
As prescribed in 247.271-4(n), use the following clause:
(a) Drayage included for Schedule I, Outbound, applies in those instances when a shipment requires drayage to an air, water, or other terminal for onward movement after completion of shipment preparation by the Contractor. Drayage not included is when it is being moved from a residence or other pickup point to the Contractor's warehouse for onward movement by another freight company, carrier, etc.
(b) Drayage included for Schedule II, Inbound, applies in those instances when shipment is delivered, as ordered, from a destination Contractor's facility or other destination point to the final delivery point. Drayage not included is when shipment or partial removal of items from shipment is performed and prepared for member's pickup at destination delivery point.
(c) The Contractor will reposition empty Government containers—
(1) Within the area of performance;
(2) As directed by the Contracting Officer; and
(3) At no additional cost to the Government.
As prescribed in 247.271-4(o), use the following clause:
The Contractor shall provide additional services not included in the Schedule, but required for satisfactory completion of the services ordered under this contract, at a rate comparable to the rate for like services as contained in tenders on file with the Military Traffic Management Command in effect at time of order.
As prescribed in 247.305-70, use the following clause:
(a)
(b) Returnable containers shall remain the Contractor's property but shall be loaned without charge to the Government for a period of ___(insert number of days) calendar days after delivery to the f.o.b. point specified in the contract. Beginning with the first day after the loan period expires, to and including the day the containers are delivered to the Contractor (if the original delivery was f.o.b. origin) or are delivered or are made available for delivery to the Contractor's designated carrier (if the original delivery was f.o.b. destination), the Government shall pay the Contractor a rental of $___ (insert dollar amount for rental) per container per day, computed separately for containers for each type, size, and capacity, and for each point of delivery named in the contract. No rental shall accrue to the Contractor in excess of the replacement value per container specified in paragraph (c) of this clause.
(c) For each container lost or damaged beyond repair while in the Government's possession, the Government shall pay to the Contractor the replacement value as follows, less the allocable rental paid for that container:
These containers shall become Government property.
(d) If any lost container is located within ___ (insert number of days) calendar days after payment by the Government, it may be returned to the Contractor by the Government, and the Contractor shall pay to the Government the replacement value, less rental computed in accordance with paragraph (b) of this clause, beginning at the expiration of the loan period specified in paragraph (b) of this clause, and continuing to the date on which the container was delivered to the Contractor.
As prescribed in 247.573(a), use the following provision:
(a) The Offeror shall indicate by checking the appropriate blank in paragraph (b) of this provision whether transportation of supplies by sea is anticipated under the resultant contract. The term
(b)
(c) Any contract resulting from this solicitation will include the Transportation of Supplies by Sea clause. If the Offeror represents that it will not use ocean transportation, the resulting contract will also include the Defense FAR Supplement clause at 252.247-7024, Notification of Transportation of Supplies by Sea.
As prescribed in 247.573(b)(1), use the following clause:
(a) Definitions. As used in this clause—
(1)
(2)
(3)
(4)
(5)
(6)
(ii)
(7)
(b)(1) The Contractor shall use U.S.-flag vessels when transporting any supplies by sea under this contract.
(2) A subcontractor transporting supplies by sea under this contract shall use U.S.-flag vessels if—
(i) This contract is a construction contract; or
(ii) The supplies being transported are—
(A) Noncommercial items; or
(B) Commercial items that—
(c) The Contractor and its subcontractors may request that the Contracting Officer authorize shipment in foreign-flag vessels, or designate available U.S.-flag vessels, if the Contractor or a subcontractor believes that—
(1) U.S.-flag vessels are not available for timely shipment;
(2) The freight charges are inordinately excessive or unreasonable; or
(3) Freight charges are higher than charges to private persons for transportation of like goods.
(d) The Contractor must submit any request for use of other than U.S.-flag vessels in writing to the Contracting Officer at least 45 days prior to the sailing date necessary to meet its delivery schedules. The Contracting Officer will process requests submitted after such date(s) as expeditiously as possible, but the Contracting Officer's failure to grant approvals to meet the shipper's sailing date will not of itself constitute a compensable delay under this or any other clause of this contract. Requests shall contain at a minimum—
(1) Type, weight, and cube of cargo;
(2) Required shipping date;
(3) Special handling and discharge requirements;
(4) Loading and discharge points;
(5) Name of shipper and consignee;
(6) Prime contract number; and
(7) A documented description of efforts made to secure U.S.-flag vessels, including points of contact (with names and telephone numbers) with at least two U.S.-flag carriers contacted. Copies of telephone notes, telegraphic and facsimile message or letters will be sufficient for this purpose.
(e) The Contractor shall, within 30 days after each shipment covered by this clause, provide the Contracting Officer and the Maritime Administration, Office of Cargo Preference, U.S. Department of Transportation, 400 Seventh Street SW., Washington, DC 20590, one copy of the rated on board vessel operating carrier's ocean bill of lading, which shall contain the following information:
(1) Prime contract number;
(2) Name of vessel;
(3) Vessel flag of registry;
(4) Date of loading;
(5) Port of loading;
(6) Port of final discharge;
(7) Description of commodity;
(8) Gross weight in pounds and cubic feet if available;
(9) Total ocean freight in U.S. dollars; and
(10) Name of the steamship company.
(f) The Contractor shall provide with its final invoice under this contract a representation that to the best of its knowledge and belief—
(1) No ocean transportation was used in the performance of this contract;
(2) Ocean transportation was used and only U.S.-flag vessels were used for all ocean shipments under the contract;
(3) Ocean transportation was used, and the Contractor had the written consent of the Contracting Officer for all non-U.S.-flag ocean transportation; or
(4) Ocean transportation was used and some or all of the shipments were made on non-U.S.-flag vessels without the written consent of the Contracting Officer. The Contractor shall describe these shipments in the following format:
(g) If the final invoice does not include the required representation, the Government will reject and return it to the Contractor as an improper invoice for the purposes of the Prompt Payment clause of this contract. In the event there has been unauthorized use of non-U.S.-flag vessels in the performance of this contract, the Contracting Officer is entitled to equitably adjust the contract, based on the unauthorized use.
(h) In the award of subcontracts for the types of supplies described in paragraph (b)(2) of this clause, the Contractor shall flow down the requirements of this clause as follows:
(1) The Contractor shall insert the substance of this clause, including this paragraph (h), in subcontracts that exceed the simplified acquisition threshold in part 2 of the Federal Acquisition Regulation.
(2) The Contractor shall insert the substance of paragraphs (a) through (e) of this clause, and this paragraph (h), in subcontracts that are at or below the simplified acquisition threshold in part 2 of the Federal Acquisition Regulation.
Alternate I (MAR 2000). As prescribed in 247.573(b)(2), substitute the following paragraph (b) for paragraph (b) of the basic clause:
(b)(1) The Contractor shall use U.S.-flag vessels when transporting any supplies by sea under this contract.
(2) A subcontractor transporting supplies by sea under this contract shall use U.S.-flag vessels if the supplies being transported are—
(i) Noncommercial items; or
(ii) Commercial items that—
(A) The Contractor is reselling or distributing to the Government without adding value (generally, the Contractor does not add value to items that it subcontracts for f.o.b. destination shipment);
(B) Are shipped in direct support of U.S. military contingency operations, exercises, or forces deployed in humanitarian or peacekeeping operations (Note: This contract requires shipment of commercial items in direct support of U.S. military contingency operations, exercises, or forces deployed in humanitarian or peacekeeping operations); or
(C) Are commissary or exchange cargoes transported outside of the Defense Transportation System in accordance with 10 U.S.C. 2643.
Alternate II (MAR 2000). As prescribed in 247.573(b)(3), substitute the following paragraph (b) for paragraph (b) of the basic clause:
(b)(1) The Contractor shall use U.S.-flag vessels when transporting any supplies by sea under this contract.
(2) A subcontractor transporting supplies by sea under this contract shall use U.S.-flag vessels if the supplies being transported are—
(i) Noncommercial items; or
(ii) Commercial items that—
(A) The Contractor is reselling or distributing to the Government without adding value (generally, the Contractor does not add value to items that it subcontracts for f.o.b. destination shipment),
(B) Are shipped in direct support of U.S. military contingency operations, exercises, or forces deployed in humanitarian or peacekeeping operations; or
(C) Are commissary or exchange cargoes transported outside of the Defense Transportation System in accordance with 10 U.S.C. 2643 (Note: This contract requires transportation of commissary or exchange cargoes outside of the Defense Transportation System in accordance with 10 U.S.C. 2643).
Alternate III (MAY 2002)
As prescribed in 247.573(b)(4), substitute the following paragraph (f) for paragraphs (f), (g), and (h) of the basic clause:
(f) The Contractor shall insert the substance of this clause, including this paragraph (f), in subcontracts that are for a type of supplies described in paragraph (b)(2) of this clause.
As prescribed in 247.573(c), use the following clause:
(a) The Contractor has indicated by the response to the solicitation provision, Representation of Extent of Transportation by Sea, that it did not anticipate transporting by sea any supplies. If, however, after the award of this contract, the Contractor learns that supplies, as defined in the Transportation of Supplies by Sea clause of this contract, will be transported by sea, the Contractor—
(1) Shall notify the Contracting Officer of that fact; and
(2) Hereby agrees to comply with all the terms and conditions of the Transportation of Supplies by Sea clause of this contract.
(b) The Contractor shall include this clause; including this paragraph (b), revised as necessary to reflect the relationship of the contracting parties—
(1) In all subcontracts under this contract, if this contract is a construction contract; or
(2) If this contract is not a construction contract, in all subcontracts under this contract that are for—
(i) Noncommercial items; or
(ii) Commercial items that—
(A) The Contractor is reselling or distributing to the Government without adding value (generally, the Contractor does not add value to items that it subcontracts for f.o.b. destination shipment);
(B) Are shipped in direct support of U.S. military contingency operations, exercises, or forces deployed in humanitarian or peacekeeping operations; or
(C) Are commissary or exchange cargoes transported outside of the Defense Transportation System in accordance with 10 U.S.C. 2643.
As prescribed in 247.573(d), use the following clause:
(a)
(1) To enable the vessel to meet applicable standards to become a vessel of the United States; or
(2) To convert the vessel to a more useful military configuration.
(b)
(1) On a vessel for which the Contractor submitted an offer in response to the solicitation for this contract; and
(2) Prior to acceptance of the vessel by the Government.
As prescribed in 249.501-70, use the following clause:
(a) Definition.—
(1) Severance pay, as provided in FAR 31.205-6(g);
(2) Reasonable costs continuing after termination, as provided in FAR 31.205-42(b);
(3) Settlement of expenses, as provided in FAR 31.205-42(g);
(4) Costs of return of field service personnel from sites, as provided in FAR 31.205-35 and FAR 31.205-46(c); and
(5) Costs in paragraphs (a) (1), (2), (3), and (4) of this clause to which subcontractors may be entitled in the event of termination.
(b) Notwithstanding the Limitation of Cost/Limitation of Funds clause of this contract, the Contractor shall not include in its estimate of costs incurred or to be incurred, any amount for special termination costs to which the Contractor may be entitled in the event this contract is terminated for the convenience of the Government.
(c) The Contractor agrees to perform this contract in such a manner that the Contractor's claim for special termination costs will not exceed $____. The Government shall have no obligation to pay the Contractor any amount for the special termination costs in excess of this amount.
(d) In the event of termination for the convenience of the Government, this clause shall not be construed as affecting the allowability of special termination costs in any manner other than limiting the maximum amount of the costs payable by the Government.
(e) This clause shall remain in full force and effect until this contract is fully funded.
As prescribed in 249.7003(c), use the following clause:
(a)
(b) 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 contract terminations or substantial reductions under major defense programs.
(c)
(1) Each employee representative of the Contractor's employees whose work is directly related to the defense contract; or
(2) If there is no such representative, each such employee;
(3) The State dislocated worker unit or office described in section 311(b)(2) of the Job Training Partnership Act (29 U.S.C. 1661(b)(2)); and
(4) The chief elected official of the unit of general local government within which the adverse effect may occur.
(d)
(1) Provide notice of the anticipated termination or reduction to each first-tier subcontractor with a subcontract of $500,000 or more; and
(2) Require that each such subcontractor—
(i) Provide notice to each of its subcontractors with a subcontract of $100,000 or more; and
(ii) Impose a similar notice and flowdown requirement to subcontractors with subcontracts of $100,000 or more.
(e) The notice provided an employee under paragraph (c) of this clause shall have the same effect as a notice of termination to the employee for the purposes of determining whether such employee is eligible for training, adjustment assistance, and employment
As prescribed in 251.107, use the following clause:
(a) When placing orders under Federal Supply Schedules or Personal Property Rehabilitation Price Schedules, the Contractor shall follow the terms of the applicable schedule and authorization. Include in each order:
(1) A copy of the authorization (unless a copy was previously furnished to the Federal Supply Schedule or Personal Property Rehabilitation Price Schedule contractor).
(2) The following statement: This order is placed under written authorization from ______ dated ______.
(3) The completed address(es) to which the Contractor's mail, freight, and billing documents are to be directed.
(b) If a Federal Supply Schedule contractor refuses to honor an order placed by a Government contractor under an agency authorization, the Contractor shall report the circumstances to the General Services Administration, FFN, Washington, DC 20406, with a copy to the authorizing office.
(c) When placing orders under nonmandatory schedule contracts and requirements contracts, issued by the General Services Administration (GSA) Office of Information Resources Management, for automated data processing equipment, software and maintenance, communications equipment and supplies, and teleprocessing services, the Contractor shall follow the terms of the applicable contract and the procedures in paragraph (a) of this clause.
(d) When placing orders for Government stock, the Contractor shall—
(1) Comply with the requirements of the Contracting Officer's authorization, using FEDSTRIP or MILSTRIP procedures, as appropriate;
(2) Use only the GSA Form 1948-A, Retail Services Shopping Plate, when ordering from GSA Self-Service Stores;
(3) Order only those items required in the performance of Government contracts; and
(4) Pay invoices from Government supply sources promptly. For purchases made from DoD supply sources, this means within 30 days of the date of a proper invoice (see also Defense Federal Acquisition Regulation Supplement (DFARS) 251.105). For purposes of computing interest for late Contractor payments, the Government's invoice is deemed to be a demand for payment in accordance with the Interest clause of this contract. The Contractor's failure to pay may also result in the DoD supply source refusing to honor the requisition (see DFARS 251.102(f)) or in the Contracting Officer terminating the Contractor's authorization to use DoD supply sources. In the event the Contracting Officer decides to terminate the authorization due to the Contractor's failure to pay in a timely manner, the Contracting Officer shall provide the Contractor with prompt written notice of the intent to terminate the authorization and the basis for such action. The Contractor shall have 10 days after receipt of the Government's notice in which to provide additional information as to why the authorization should not be terminated. Such termination shall not provide the Contractor with an excusable delay for failure to perform or complete the contract in accordance with the terms of the contract, and the Contractor shall be solely responsible for any increased costs.
(e) Only the Contractor may request authorization for subcontractor use of Government supply sources. The Contracting Officer will not grant authorizations for subcontractor use without approval of the Contractor.
(f) Government invoices shall be submitted to the Contractor's billing address, and Contractor payments shall be sent to the Government remittance address specified below:
As prescribed in 251.205, use the following clause:
(a) The Contractor, if authorized use of IFMS vehicles, shall submit requests for five or fewer vehicles and related services in writing to the appropriate General Services Administration (GSA) Regional Customer Service Bureau, Attention: Motor Equipment Activity. Submit requests for more than five vehicles to GSA headquarters: General Services Administration, FTM, Washington, DC 20406. Include the following in each request:
(1) Two copies of the agency authorization to obtain vehicles and related services from GSA.
(2) The number of vehicles and related services required and the period of use.
(3) A list of the Contractor's employees authorized to request vehicles and related services.
(4) A list of the makes, models, and serial numbers of Contractor-owned or leased equipment authorized to be serviced.
(5) Billing instructions and address.
(b) The Contractor should make requests for any unusual quantities of vehicles as far in advance as possible.
(c) The Contractor shall establish and enforce suitable penalties for employees who use or authorize the use of Government vehicles for other than performance of Government contracts.
(d) The Contractor shall assume, without the right of reimbursement from the Government, the cost or expense of any use of IFMS vehicles and services not related to the performance of the contract.
(e) Only the Contractor may request authorization for subcontractor use of IFMS vehicles. The Contracting Officer will not grant authorization for subcontractor use without approval of the Contractor.
41 U.S.C. 421 and 48 CFR chapter 1.
Policy on use of a DD Form 350 is in 204.670-2. This subsection contains instructions for completion of the DD Form 350.
(a)
(1) LINE A1, TYPE OF REPORT. Enter one of the following codes:
(i)
(ii)
(iii)
(2) LINE A2, REPORT NUMBER. Enter the six-position local control number (see 204.670-3(a)(5)). Do not leave blank or enter all zeros. If Line A1 is coded 1 or 2, use the prior report number rather than a new one.
(3) LINE A3, CONTRACTING OFFICE.
(i) LINE A3A, REPORTING AGENCY FIPS 95 CODE. Enter one of the following codes: 2100 (Army); 1700 (Navy); 5700 (Air Force); 96CE (Army Civil Works); 97AS (DLA); 9763 (DCMA);
(ii) LINE A3B, CONTRACTING OFFICE CODE. Enter the code assigned by the departmental data collection point in 204.670-1(c).
(4) LINE A4, NAME OF CONTRACTING OFFICE. Enter sufficient detail to establish the identity of the contracting office.
(b)
(1) LINE B1, CONTRACT IDENTIFICATION INFORMATION.
(i) LINE B1A, CONTRACT NUMBER.
(A) Enter—
(B) Do not leave spaces between characters, and do not enter dashes, slants, or any other punctuation marks.
(C) The DoD contract number is the basic (13-position alphanumeric character) procurement instrument identification number (PIIN) that was assigned in accordance with 204.7003 or constructed under an exception permitted by 204.7000. Do not enter any supplementary procurement instrument identification numbers as part of the contract number (these go on Line B2).
(ii) LINE B1B, ORIGIN OF CONTRACT. Enter the code that indicates the agency that assigned the contract number.
(A)
(B)
(C)
(iii) LINE B1C, BUNDLED CONTRACT. Enter one of the following codes:
(A)
(B)
(iv) LINE B1D, BUNDLED CONTRACT EXCEPTION. If Line B1C is coded Y, enter one of the following codes. Otherwise, leave Line B1D blank.
(A)
(B)
(C)
(v) LINE B1E, PERFORMANCE-BASED SERVICE CONTRACT (see FAR Subpart 37.6). Enter one of the following codes:
(A)
(B)
(2) LINE B2, MODIFICATION, ORDER, OR OTHER ID NUMBER. Enter the supplementary procurement instrument identification number if one was assigned in accordance with 204.7004 or as permitted by 204.7000. It can be up to 19 characters. Orders under DoD contracts have a four-position number (see 204.7004(d)); orders under non-DoD contracts have a 13-position number with an F in the ninth position; modifications to contracts and agreements have a six-position modification number (see 204.7004(c)); modifications to orders under DoD contracts have a two-position modification number following the four-position order number (see 204.7004(e)); and modifications to orders under non-DoD contracts have a six-position modification number following the 13-position order number.
(3) LINE B3, ACTION DATE.
(i) Enter the year, month, and day of the effective date for fiscal obligation purposes.
(ii) Enter four digits for the year, two digits for the month, and two digits for the day. Use 01 through 12 for January through December. For example, enter January 2, 2003, as 20030102.
(4) LINE B4, COMPLETION DATE.
(i) Enter the year, month, and day of the last contract delivery date or the
(ii) Enter four digits for the year, two digits for the month, and two digits for the day. Use 01 through 12 for January through December. For example, enter January 2, 2003, as 20030102.
(5) LINE B5, CONTRACTOR IDENTIFICATION INFORMATION.
(i) Use data that relates to the contractor whose name and address appear in the contract document (Block 7 of the SF 26, Award/Contract; Block 8 of the SF 30, Amendment of Solicitation/Modification of Contract; Block 15A of the SF 33, Solicitation, Offer and Award; or Block 9 of the DD Form 1155, Order for Supplies or Services), except—
(A) For contracts placed with the Small Business Administration under Section 8(a) of the Small Business Act, use data that relates to the company that will be performing the work;
(B) For Federal schedule orders, use data that applies to the contractor whose name appears on the schedule (not the data for the agent to whom orders may be sent); and
(C) For contracts with the Canadian Commercial Corporation (CCC), use data for the appropriate CCC office.
(ii) Some of the parts of Line B5 may not apply to the action being reported. Follow the instructions for each part.
(A) LINE B5A, CONTRACTOR IDENTIFICATION NUMBER (DUNS).
(B) LINE B5B, GOVERNMENT AGENCY. Enter one of the following codes:
(C) LINE B5C. Reserved.
(D) LINE B5D, CONTRACTOR NAME AND DIVISION NAME. Enter the contractor's name as stated in the offer and resultant contract. Include its division name.
(E) LINE B5E, CONTRACTOR ADDRESS. Enter the contractor's address as stated in the offer and resultant contract. Include street address or P.O. Box, city or town, state or country, and ZIP code, if applicable. Do not enter foreign postal codes.
(F) LINE B5F, TAXPAYER IDENTIFICATION NUMBER. Enter the contractor's taxpayer identification number (TIN) (see FAR Subpart 4.9). Leave Line B5F blank if the contractor is—
(G) LINE B5G, PARENT TAXPAYER IDENTIFICATION NUMBER. Enter the contractor's parent company (common parent) TIN (see FAR Subpart 4.9 and 52.204-3). If the contractor does not have a parent company or the parent company meets the exemption for Line B5F, leave Line B5G blank.
(H) LINE B5H, PARENT NAME. If a parent company TIN is entered on Line B5G, enter the name of the parent company (common parent) on Line B5H. Leave Line B5H blank if there is no parent company or the parent company is exempted from the requirement to have a TIN.
(6) LINE B6, PRINCIPAL PLACE OF PERFORMANCE.
(i) The place, or places, where the contract will be performed may be specified by the Government or listed by the contractor in response to the solicitation provision at FAR 52.214-14, Place of Performance—Sealed Bidding, or FAR 52.215-6, Place of Performance. Use data for the contractor's principal
(A) Final assembly point for items manufactured under supply contracts;
(B) Location from where shipments from stock are made under supply contracts;
(C) Actual construction site for construction contracts;
(D) Planned construction site for architect-engineer contracts;
(E) Place of mining for mined supplies; or
(F) Place (including military installations) where a service is performed for service contracts.
(ii) When there is more than one location for any of paragraphs (b)(6)(i)(A) through (F) of this subsection (e.g., more than one construction site), use the location involving the largest dollar amount of the acquisition. Do not show more than one location on Line B6.
(iii) If places of performance are too varied or not known, enter the contractor's home office location. However, if the contractor is a domestic concern and the entire contract will be performed outside the United States, enter the most frequent place of performance.
(iv) Follow the instructions for each part of Line B6 that applies to the action being reported.
(A) LINE B6A, CITY OR PLACE CODE.
(B) LINE B6B, STATE OR COUNTRY CODE.
(C) LINE B6C, CITY OR PLACE AND STATE OR COUNTRY NAME. Enter the name of the principal place of performance. Do not leave Line B6C blank.
(7) LINE B7, TYPE OBLIGATION. Enter one of the following codes:
(i)
(ii)
(iii)
(8) LINE B8, OBLIGATED OR DEOBLIGATED DOLLARS. Enter the net amount of funds (whole dollars only) obligated or deobligated by the action. Enter zero if the action is the initial award of an indefinite-delivery contract that neither obligates nor deobligates funds, i.e., Line B7 is coded 3.
(9) LINE B9, FOREIGN MILITARY SALE. Enter one of the following codes. If only part of the action is a foreign military sale, separately report the parts (see 204.670-6(c)).
(i)
(ii)
(10) LINE B10, MULTIYEAR CONTRACT. Enter one of the following codes:
(i)
(ii)
(11) LINE B11, TOTAL ESTIMATED CONTRACT VALUE. Enter the total estimated contract value (in whole dollars) only at the time of initial placement of the contract, including placement of an indefinite-delivery or multiyear contract. Include the total estimated value of orders and options anticipated to be placed over the life of the contract.
(12) LINE B12, PRINCIPAL PRODUCT OR SERVICE. Line B12 has five parts. Do not leave any parts of Line B12 blank. Codes for Line B12 can be found in the DoD Procurement Coding Manual (MN02) under “PRODUCT AND SERVICE CODE ASCII FILE DOWNLOADS” at the bottom of the following web page:
(i) LINE B12A, FEDERAL SUPPLY CLASS OR SERVICE CODE. Enter the 4-character Federal supply class (FSC) or service code that describes the contract effort. There are three categories of codes to choose from. If more than one category or code applies to the action, enter the one that best identifies the product or service representing the largest dollar value.
(A)
(B)
(C)
(ii) LINE B12B, DOD CLAIMANT PROGRAM CODE. Enter a code that identifies the commodity described on Line B12E. If more than one code applies to the action, enter the one that best identifies the product or service representing the largest dollar value. If the description on Line B12E is for—
(A) Research and development (R&D), enter the code that best represents the objective of the R&D. For example, if the objective of the R&D is a guided missile, enter code A20. If the R&D cannot be identified to any particular objective, enter code S10;
(B) Ship repair, inspect and repair as necessary (IRAN), modification of aircraft, overhaul of engines, or similar maintenance, repair, or modification services, enter the code that best identifies the program;
(C) Equipment rental (including rental of automatic data processing equipment), enter code S10;
(D) Utility services, enter code S10;
(E) Services that cannot be identified to any listed program, enter code S10; or
(F) Supplies or equipment that cannot be identified to any listed program, enter code C9E.
(iii) LINE B12C, PROGRAM, SYSTEM, OR EQUIPMENT CODE.
(A) Enter a code that describes the program, weapons system, or equipment. If there is no code that applies to the action, enter three zeros. If more than one code applies to the action, enter the one that best identifies the product or service representing the largest dollar value.
(B) If the action is funded by the Ballistic Missile Defense Organization, enter code CAA.
(C) If the action supports environmental cleanup programs, enter one of the codes listed in Section II of the
(D) Defense Logistics Agency and Defense Contract Management Agency activities must use the code assigned by the sponsoring military department.
(iv) LINE B12D, NAICS CODE. Enter the North American Industry Classification System (NAICS) code for the acquisition. Use the NAICS code in effect at the time of award. These codes are in the 2002 U.S. NAICS Manual (
(v) LINE B12E, NAME OR DESCRIPTION. Enter the name or a brief description of the commodity or service. If the description is classified, enter only the word “Classified.” Do not use “Classified” when a code name (e.g., Minuteman, Polaris, Trident, Pershing) or an identifying program number (e.g., WS-107A) can be used.
(vi) LINE B12F, EPA-DESIGNATED PRODUCT(S). Enter one of the following codes:
(vii) LINE B12G, RECOVERED MATERIAL CLAUSES. If an EPA-designated product was acquired,
(13) LINE B13, KIND OF ACTION. Some of the parts of Line B13 may not apply to the action being reported. Follow instructions for each part. When the action is a modification, complete Lines B13A and B13D.
(i) LINE B13A, CONTRACT OR ORDER. Enter one of the following codes:
(A)
(B)
(C)
(D)
(E)
(F)
(G)
(H)
(ii) LINE B13B, TYPE OF INDEFINITE-DELIVERY CONTRACT. If the action is the award or modification of an indefinite-delivery contract, i.e., Line B13A is coded 3 and the ninth position of B1A is coded D, complete Line B13B. If the action is an order or modification of an order under an indefinite-delivery contract, i.e., Line B13A is coded 5, complete Line B13B. Otherwise, leave Line B13B blank.
(A)
(B)
(C)
(iii) LINE B13C, MULTIPLE OR SINGLE AWARD INDEFINITE-DELIVERY CONTRACT. If the action is the award or modification of an indefinite-delivery contract, or an order or modification of an order under an indefinite-delivery contract, i.e., Line B13B is coded A, B, or C, complete Line B13C. Otherwise, leave Line B13C blank.
(A)
(B)
(iv) LINE B13D, MODIFICATION. If the action is a modification, enter one of the following codes. Otherwise, leave Line B13D blank.
(A)
(B)
(
(
(
(C)
(
(
(
(
(
(D)
(E)
(F)
(G)
(H)
(I)
(v) LINE B13E, MULTIPLE AWARD CONTRACT FAIR OPPORTUNITY. If the action is an order under a multiple award indefinite-delivery contract, i.e., Line B13C is coded M, enter one of the following codes. Otherwise, leave Line B13E blank.
(A)
(B)
(C)
(D)
(E)
(vi) LINE B13F, INDEFINITE-DELIVERY CONTRACT USE. If the action is the initial award of an indefinite-delivery contract, enter one of the following codes to indicate if the indefinite-delivery contract can be used Government-wide, within DoD only, within the department or agency only, or by the contracting office only. Otherwise, leave Line B13F blank.
(A)
(B)
(C)
(D)
(vii) LINE B13G—INDEFINITE-DELIVERY CONTRACT ORDERING PERIOD ENDING DATE. If the action is the initial award of an indefinite-delivery contract and Line B13F is coded A, B, C, or D, enter the date the ordering period ends. Otherwise, leave Line B13G blank. Enter four digits for the year, two digits for the month, and two digits for the day. Use 01 through 12 for January through December. For example, enter January 2, 2003, as 20030102.
(14) LINE B14, CICA APPLICABILITY. Enter one of the following codes:
(i)
(ii)
(A) The action resulted from a solicitation issued on or after April 1, 1985, or is a modification coded A on Line B13D issued on or after April 1, 1985; and
(B) Neither code C nor code D applies.
(iii)
(iv)
(15) LINE B15, INFORMATION TECHNOLOGY PRODUCTS OR SERVICES. If the action is for information technology products or services, enter one of the following codes. Otherwise, leave Line B15 blank.
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(16) LINE B16, CLINGER-COHEN ACT PLANNING COMPLIANCE. If the action is for information technology products or services, enter one of the following codes. Otherwise, leave Line B16 blank:
(i)
(ii)
(c)
(1) Part C gathers data concerning contracting procedures, use of competition, financing, and statutory requirements other than socioeconomic (which are in Part D).
(2) Do not complete Part C if the action is with a government agency,
(3) In completing Part C, use codes that describe either the current action or the original contract as follows:
(i)(A) If the current action is a modification, other than a new work modification, or an order under an indefinite-delivery contract, code the lines in Part C to describe the original contract.
(B) If the current action is an order under a multiple award contract,
(C) Otherwise, code the lines in Part C to describe the current action.
(ii) If there are no codes for the original contract because a DD Form 350 was not required at the time, the original action is no longer available, the definition of the original code has changed, or a data element has been added to the system after the original contract report, use codes that best describe the original action.
(4) Complete Part C as follows:
(i) LINE C1, SYNOPSIS. Enter one of the following codes:
(A)
(B)
(C)
(ii) LINE C2, REASON NOT SYNOPSIZED. Enter one of the following codes if a synopsis was not prepared,
(A)
(B)
(C)
(D)
(iii) LINE C3, EXTENT COMPETED. Enter one of the following codes:
(A)
(B)
Even though Part C is not completed for actions with a government agency, the database will automatically include these actions in the category of not available for competition.
(C)
(D)
(iv) LINE C4, SEA TRANSPORTATION. When the origin of the contract is DoD, i.e., Line B1B is coded A, enter one of the following codes. Otherwise, leave Line C4 blank.
(A)
(B)
(C)
(v) LINE C5, TYPE OF CONTRACT.
(A) If the action is a letter contract, including modifications and amendments to letter contracts, enter the code that describes the anticipated type of contract the letter contract will become when it is definitized.
(B) If there is more than one type of contract involved in the action, enter the code that matches the type with the most dollars. If the type with the least dollars exceeds $500,000, fill out separate DD Forms 350 (with different report numbers) for each type.
(C) Enter one of the following codes:
(vi) LINE C6, NUMBER OF OFFERORS SOLICITED.
(A) Leave Line C6 blank if—
(B) Otherwise, enter—
(vii) LINE C7, NUMBER OF OFFERS RECEIVED.
(A) Leave Line C7 blank if—
(B) Otherwise, enter the specific number of offers received (001-999).
(viii) LINE C8, SOLICITATION PROCEDURES.
(A) Leave Line C8 blank if—
(B) Otherwise, enter one of the following codes:
(3)
(ix) LINE C9, AUTHORITY FOR OTHER THAN FULL AND OPEN COMPETITION.
(A) Leave Line C9 blank if the original contract resulted from a solicitation issued before April 1, 1985 (i.e., before the effective date of the Competition in Contracting Act).
(B) Enter one of the following codes if the action resulted from use of other than full and open competition, i.e., Line C8 is coded N. Otherwise, leave Line C9 blank.
(x) LINE C10, SUBJECT TO LABOR STANDARDS STATUTES. Enter one of the following codes. When the action is an order or modification of an order under a Federal schedule, i.e., Line B13A is coded 6, leave Line C10 blank.
(xi) LINE C11, COST OR PRICING DATA. Enter one of the following codes when the origin of the contract is DoD, i.e., Line B1B is coded A. Otherwise, leave Line C11 blank.
(xii) LINE C12, CONTRACT FINANCING. When the origin of the contract is DoD,
(xiii) LINE C13, FOREIGN TRADE DATA.
(A) The term “United States (U.S.),” as used on Line C13, excludes the Trust Territory of Palau (
(B) LINE C13A, PLACE OF MANUFACTURE. Complete Line C13A only if the action is for a foreign end product or a service provided by a foreign concern under a DoD contract or a Federal schedule. Otherwise, leave Line C13A blank.
(C) LINE C13B, COUNTRY OF ORIGIN CODE.
(xiv) LINE C14, COMMERCIAL ITEM. Enter one of the following codes:
(A)
(B)
(d)
(i) With a government agency,
(ii) An order under a Federal schedule,
(2) Use the codes on Lines B13A and B13D to determine whether the codes in Part D will describe the current action or the original contract.
(i) Code Part D to describe the current action when—
(A) The action is a new requirement,
(B) The action is an order from the Schedule or the Procurement List,
(ii) Otherwise, code Part D to describe the original contract. If there are no codes for the original contract because a DD Form 350 was not required at the time, the original action is no longer available, the definition of the original code has changed, or a data element has been added to the system after the original contract report, use codes that best describe the original action.
(3) Determine the status of the concern (
(4) Complete Part D as follows:
(i) LINE D1, TYPE OF CONTRACTOR.
(A) LINE D1A, TYPE OF ENTITY. Enter one of the following codes:
(B) LINE D1B, WOMEN-OWNED BUSINESS. Enter one of the following codes:
(C) LINE D1C, HUBZONE REPRESENTATION. Enter one of the following codes when the contractor is a small business performing inside the United States, i.e., Line D1A is coded A or B. Otherwise, leave Line D1C blank.
(D) LINE D1D, ETHNIC GROUP.
(E) LINE D1E, VETERAN-OWNED SMALL BUSINESS. Enter one of the following codes if the contractor is a veteran-owned small business. Otherwise, leave Line D1E blank.
(ii) LINE D2, REASON NOT AWARDED TO SDB. Enter one of the following codes when the contractor is a small business (other than a small disadvantaged business) or a large business performing in the United States,
(A)
(B)
(C)
(D)
(E)
(iii) LINE D3, REASON NOT AWARDED TO SB. Enter one of the following codes when the contractor is a large business performing in the United States,
(A)
(B)
(C)
(D)
(E)
(iv) LINE D4, SET-ASIDE OR PREFERENCE PROGRAM.
(A) LINE D4A, TYPE OF SET-ASIDE. Enter one of the following codes:
(
(
(
(
(
(
(
(
(B) LINE D4B, TYPE OF PREFERENCE. Enter one of the following codes, even if Line D4A is coded E:
(
(
(
(
(
(C) LINE D4C, PREMIUM PERCENT.
(
(
(
(
(
(v) LINES D5—D6. Reserved.
(vi) LINE D7, SMALL BUSINESS INNOVATION RESEARCH (SBIR) PROGRAM. Enter one of the following codes. When the action is an order or modification of an order under a non-DoD contract, i.e., Line B1B is coded B or C and Line B13A is coded 5, leave Line D7 blank.
(A)
(B)
(C)
(D)
(vii) LINE D8, SUBCONTRACTING PLAN—SB, SDB, HBCU, OR MI. Enter one of the following codes:
(A)
(B)
(C)
(D)
(viii) LINE D9, SMALL BUSINESS COMPETITIVENESS DEMONSTRATION PROGRAM. When the action is under a contract that was awarded before the demonstration program began (January 1, 1989) and does not involve a new work modification, enter code N on Line D9. When the action is an order or modification of an order under a non-DoD contract, i.e., Line B1B is coded B or C and Line B13A is coded 5, enter code N on Line D9. Otherwise, code Line D9 as follows:
(A)
(B)
(ix) LINE D10, SIZE OF SMALL BUSINESS.
(A) Complete Line D10 only when the contractor is a small business performing in the United States and the action is under the Small Business Competitiveness Demonstration Program,
(B) Enter one of the following codes for the size of the business (number of employees or average annual gross revenue) as represented by the contractor in the solicitation provision at FAR 52.219-19, Small Business Concern Representation for the Small Business Competitiveness Demonstration Program:
(
(
(
(
(
(
(
(
(
(
(
(
(
(
(x) LINE D11, EMERGING SMALL BUSINESS.
(A) Complete this line only if the action is under the Small Business Competitiveness Demonstration Program, i.e., Line D9 is coded Y, and the action is in one of the four designated industry groups, not one of the targeted industry categories. Otherwise, leave Line D11 blank.
(B) Enter one of the following codes:
(
(
(e)
(1) LINE E1, CONTINGENCY, HUMANITARIAN, OR PEACEKEEPING OPERATION.
(i) Enter code Y on Line E1 if the action exceeds $200,000 and is in support of—
(A) A contingency operation as defined in 10 U.S.C. 101(a)(13); or
(B) A humanitarian or peacekeeping operation as defined in 10 U.S.C. 2302(8).
(ii) Otherwise, leave Line E1 blank.
(2) LINE E2, COST ACCOUNTING STANDARDS CLAUSE. Enter code Y on Line E2 if the contract includes a Cost Accounting Standards clause (see FAR Part 30). Otherwise, leave Line E2 blank.
(3) LINE E3, REQUESTING AGENCY CODE (FIPS 95). If making a purchase on behalf of a non-DoD agency, enter the four-position code from FIPS PUB 95 that identifies the non-DoD agency. If making a purchase for another DoD department or agency, enter 2100 for Army, 1700 for Navy, 5700 for Air Force, 97AS for DLA, 96CE for USACE, 9763 for DCMA, and 9700 for all other defense agencies. Otherwise, leave Line E3 blank.
(4) LINE E4, REQUESTING ACTIVITY CODE. If making a purchase on behalf of a non-DoD agency, enter the non-DoD agency's office code, if provided. Otherwise, leave Line E4 blank. If making a purchase on behalf of a DoD activity, enter the DoDAAC of the activity for whom the purchase was made. DoDAACs can be found at:
(5) LINE E5, NUMBER OF ACTIONS. If submitting a consolidated DD Form 350, enter the number of actions included in the consolidated report (see 204.670-6(b)). Otherwise, enter 1 on Line E5.
(6) LINE E6, PAYMENT BY GOVERNMENTWIDE PURCHASE CARD. If payment is to be made through use of the Governmentwide purchase card, enter Y on Line E6. Otherwise, leave Line E6 blank.
(f)
(1) LINE F1, NAME OF CONTRACTING OFFICER OR REPRESENTATIVE. Enter the name (Last, First, Middle Initial) of the contracting officer or representative.
(2) LINE F2, SIGNATURE. The person identified on Line F1 must sign.
(3) LINE F3, TELEPHONE NUMBER. Enter the telephone number (with area code) for the individual on Line F1. Installations with Defense Switched Network (DSN) must enter the DSN number.
(4) LINE F4, DATE. Enter the date that the DD Form 350 Report is submitted. Enter four digits for the year, two digits for the month, and two digits for the day. Use 01 through 12 for January through December. For example, enter January 2, 2003, as 20030102.
(a)
(1) Report actions in the month they are awarded, issued, executed, or placed, except—
(i) When the price of an order or call cannot be determined when it is placed, count the action and its dollars when it is paid.
(ii) Count the following actions when the voucher is paid (count each voucher as one action):
(A) Meals and lodging.
(B) Automatic deliveries, e.g., bread, milk, and ice cream.
(iii) The Navy Facilities Engineering Command will report vouchers it processes on Naval shore establishment contracts for electricity and gas in accordance with departmental procedures.
(2) Enter all dollar amounts in whole dollars only. Do not enter cents. If the net amount is a decrease, enter a minus sign (−) immediately preceding the amount to indicate a credit entry. Do not enter parentheses.
(3) Report actions of $25,000 or less 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(8), in accordance with the instructions in paragraphs (c) through (j) of this subsection. Report actions exceeding $25,000 but not exceeding $200,000 that support a contingency, humanitarian, or peacekeeping operation, and actions exceeding $25,000 but not exceeding $200,000 that are placed by a contracting officer on a Navy vessel, on the monthly DD Form 1057 as follows:
(i) Section B; the applicable lines are 5 through 5e and 8 through 8e.
(ii) Section C; the applicable lines are 1 and 1c, 2 and 2c, and 3 and 3c.
(iii) Sections D, E, and F are not applicable.
(iv) Section G; complete fully.
(b)
(c)
(1) LINE A1, REPORT MONTH. Enter four digits for the year and two digits for the month. Use 01 through 12 for January through December. For example, enter January 2003 as 200301.
(2) LINE A2, NAME OF CONTRACTING OFFICE. Enter sufficient detail to establish the identity of the contracting office submitting the report on Lines 2a and b.
(3) LINE A3, CONTRACTING OFFICE CODES.
(i) Line A3a, Reporting Agency FIPS 95 Code. Enter one of the following codes: 2100 (Army); 1700 (Navy); 5700 (Air Force); 96CE (Army Civil Works);
(ii) Line A3b, Contracting Office Code. Enter the code assigned by the departmental data collection point in 204.670-1(c).
(d)
(1) LINE B1, TARIFF OR REGULATED ACQUISITIONS. Enter the number and dollar value of contracting actions (including modifications that will also be reported on Line B9) with tariff or regulated industries (industries with sole source and service rates that are fixed or adjusted by a Federal, State, or other public regulatory body).
(2) LINE B2, FOREIGN OR INTERAGENCY.
(i) Enter the total number and dollar value of contracting actions (including modifications that will also be reported on Line B9)—
(A) For foreign military sales (FMS) or other arrangement where the foreign government or international organization is paying all or part of the cost of the action.
(B) Placed directly with foreign governments under the terms of an international agreement,
(C) With another Federal agency or Government corporation,
(ii) Enter the subtotals for the number and dollar value of contracting actions (including modifications that will also be reported on Line B9) for—
(A) Line B2a, FMS or International Agreements. Enter subtotals for paragraphs (d)(2)(i)(A) and (B) of this subsection.
(B) Line B2b, Actions with UNICOR. Enter subtotal for contracting actions with UNICOR.
(C) Line B2c, Actions with Other Government Agencies. Enter subtotal for actions with government agencies other than UNICOR.
(3) LINE B3, SMALL BUSINESS.
(i) Enter the total number and dollar value of contracting actions (including modifications that will also be reported on Line B9) where the—
(A) Contractor is a small business concern; and
(B) Place of performance is in the United States and outlying areas (see 204.670-1).
(ii) Enter the subtotals for the number and dollar value of contracting actions (including modifications that will also be reported on Line B9) for—
(A) Line B3a, Simplified Acquisition Procedures;
(B) Line B3b, GSA Schedule Orders;
(C) Line B3c, Other Federal Schedule Orders;
(D) Line B3d, All Other Orders; and
(E) Line B3e, Other Contracting Actions.
(4) LINE B4, LARGE BUSINESS.
(i) Enter the total number and dollar value of contracting actions (including modifications that will also be reported on Line B9) where the—
(A) Contractor is a large business concern; and
(B) Place of performance is in the United States and outlying areas.
(ii) Enter the subtotals for the number and dollar value of contracting actions (including modifications that will also be reported on Line B9) for—
(A) Line B4a, Simplified Acquisition Procedures;
(B) Line B4b, GSA Schedule Orders;
(C) Line B4c, Other Federal Schedule Orders;
(D) Line B4d, All Other Orders; and
(E) Line B4e, Other Contracting Actions.
(5) LINE B5, DOMESTIC OR FOREIGN ENTITIES PERFORMING OUTSIDE THE UNITED STATES.
(i) Enter the total number and dollar value of contracting actions (including modifications that will also be reported on Line B9) where the place of performance is outside the United States and outlying areas (see 204.670-1(c)). This includes actions placed directly with a foreign government that are not under international agreements (see paragraph (d)(2)(i)(B) of this subsection). It does not matter whether the contractor is domestic or foreign.
(ii) Enter the subtotals for the number and dollar value of contracting actions (including modifications that will also be reported on Line B9) for—
(A) Line B5a, Simplified Acquisition Procedures;
(B) Line B5b, GSA Schedule Orders;
(C) Line B5c, Other Federal Schedule Orders;
(D) Line B5d, All Other Orders; and
(E) Line B5e, Other Contracting Actions.
(6) LINE B6, EDUCATIONAL.
(i) Enter the total number and dollar value of contracting actions with educational institutions (including modifications that will also be reported on Line B9).
(ii) Enter the subtotals for the number and dollar value of contracting actions (including modifications that will also be reported on Line B9) for—
(A) Line B6a, Simplified Acquisition Procedures;
(B) Line B6b, GSA Schedule Orders;
(C) Line B6c, Other Federal Schedule Orders;
(D) Line B6d, All Other Orders; and
(E) Line B6e, Other Contracting Actions.
(7) LINE B7, NONPROFIT AND OTHER.
(i) Enter the total number and dollar value of contracting actions (including modifications that will also be reported on Line B9) with—
(A) Nonprofit organizations as defined in FAR 31.701;
(B) Qualified nonprofit agencies employing people who are blind or severely disabled; and
(C) Any other entities not listed on Lines B1 through B6.
(ii) Enter the subtotals for the number and dollar value of contracting actions (including modifications that will also be reported on Line B9) for—
(A) Line B7a, Simplified Acquisition Procedures;
(B) Line B7b, GSA Schedule Orders;
(C) Line B7c, Other Federal Schedule Orders;
(D) Line B7d, All Other Orders; and
(E) Line B7e, Other Contracting Actions.
(8) LINE B8, TOTAL CONTRACTING ACTIONS.
(i) Add the amounts on Lines B1 through B7 and enter the totals on Line B8.
(ii) If directed by data collection point procedures, also enter the subtotals for the number and dollar value of contracting actions for—
(A) Line B8a, Simplified Acquisition Procedures, sum of Lines 3a + 4a + 5a + 6a + 7a.
(B) Line B8b, GSA Schedule Orders, sum of Lines 3b + 4b + 5b + 6b + 7b.
(C) Line B8c, Other Federal Schedule Orders, sum of Lines 3c + 4c + 5c + 6c + 7c.
(D) Line B8d, All Other Orders, sum of Lines 3d + 4d + 5d + 6d + 7d.
(E) Line B8e, Other Contracting Actions, sum of Lines 3e + 4e + 5e + 6e + 7e.
(9) LINE B9, TOTAL MODIFICATIONS EXCLUDING SIMPLIFIED ACQUISITION PROCEDURES. Enter the total number and dollar value of modification actions, excluding simplified acquisition procedures.
(e)
(1) LINE C1, COMPETED.
(i) Enter the total number and dollar value of contracting actions that were competed.
(A) Include on Line C1—
(B) Do not include—
(ii) Enter the subtotals for the number and dollar value of contracting actions for—
(A) Line C1a, Small Business Concerns;
(B) Line C1b, Large Business Concerns;
(C) Line C1c, Domestic or Foreign Entities Performing Outside the United States;
(D) Line C1d, Educational; and
(E) Line C1e, Nonprofit and Other.
(2) LINE C2, NOT AVAILABLE FOR COMPETITION.
(i) Enter the total number and dollar value of contracting actions that were not available for competition.
(A) Include on Line C2—
(B) Do not include any actions reported in Section B, Line B1 or B2 (
(ii) Enter the subtotals for the number and dollar value of contracting actions for—
(A) Line C2a, Small Business Concerns;
(B) Line C2b, Large Business Concerns;
(C) Line C2c, Domestic or Foreign Entities Performing Outside the United States;
(D) Line C2d, Educational; and
(E) Line C2e, Nonprofit and Other.
(3) LINE C3, NOT COMPETED.
(i) Enter the total number and dollar value of contracting actions that were not competed,
(ii) Enter the subtotals for the number and dollar value of contracting actions for—
(A) Line C3a, Small Business Concerns;
(B) Line C3b, Large Business Concerns;
(C) Line C3c, Domestic or Foreign Entities Performing Outside the United States;
(D) Line C3d, Educational; and
(E) Line C3e, Nonprofit and Other.
(f)
(1) LINE D1, SMALL BUSINESS. Enter the total number and dollar values of RDT&E actions with small business concerns.
(2) LINE D2, LARGE BUSINESS. Enter the total number and dollar value of RDT&E actions with large business concerns.
(3) LINE D3, DOMESTIC OR FOREIGN ENTITIES PERFORMING OUTSIDE THE UNITED STATES. Enter the total number and dollar value of RDT&E actions where the principal place of performance is outside the United States and outlying areas (see 204.670-1).
(4) LINE D4, HISTORICALLY BLACK COLLEGES AND UNIVERSITIES (HBCU). Enter the total number and dollar value of RDT&E actions with HBCUs.
(5) LINE D5, MINORITY INSTITUTIONS (MI). Enter the total number
(6) LINE D6, OTHER EDUCATIONAL. Enter the total number and dollar value of RDT&E actions with educational institutions other than HBCUs or MIs.
(7) LINE D7, OTHER ENTITIES. Enter the total number and dollar value of RDT&E actions that were not reported on Lines D1 through D6.
(g)
(1) LINE E1, SMALL BUSINESS (SB) SET-ASIDE.
(i) Enter the total number and dollar value of contracting actions that were small business set-aside actions, including awards to SDBs reported on Lines E2c and E2d. Do not include orders under Federal schedules that are reported on Line E3 or E5.
(ii) If the action is an emerging small business set-aside (see FAR 19.1006(c)), use the most appropriate line.
(iii) Enter the subtotals for the number and dollar value of contracting actions for—
(A) Line E1a, SB Set-Aside Using Simplified Acquisition Procedures. Enter actions pursuant to FAR 13.003(b)(1).
(B) Line E1b, SB Set-Aside. Enter actions pursuant to FAR 19.502.
(C) Line E1c, Reserved.
(2) LINE E2, SMALL DISADVANTAGED BUSINESS (SDB) ACTIONS.
(i) Enter the total number and dollar value of contracting actions that were SDB actions. Do not include orders under Federal schedules that are reported on Line E3 or E5.
(ii) Enter the subtotals for the number and dollar value of contracting actions for—
(A) Line E2a, Through SBA—Section 8(a). Enter actions with the Small Business Administration pursuant to Section 8(a) of the Small Business Act (see FAR subpart 19.8) or under the 8(a) direct award procedures at 219.811.
(B) Line E2b, SDB Set-Aside, SDB Preference, or SDB Evaluation Adjustment. Enter actions resulting from—
(C) Line E2c, SB Set-Aside Using Simplified Acquisition Procedures. Enter actions pursuant to FAR 13.003(b)(1) when award is to an SDB, but a preference or evaluation adjustment was not applied.
(D) Line E2d, SB Set-Aside. Enter actions under FAR 19.502 when award is to an SDB, but a preference or evaluation adjustment was not applied nor was preferential consideration given.
(E) Line E2e, Other. Enter awards to SDB concerns that are not reported on Lines E2a through E2d.
(3) LINE E3, SDB FEDERAL SCHEDULE ORDERS. Enter the total number and dollar value of contracting actions that were orders under Federal schedules with SDBs.
(4) LINE E4, WOMEN-OWNED SMALL BUSINESS. Enter the total number and dollar value of contracting actions with women-owned small businesses (see FAR 19.001). Do not include orders under Federal schedules that are reported on Line E5.
(5) LINE E5, WOMEN-OWNED SMALL BUSINESS FEDERAL SCHEDULE ORDERS. Enter the total number and dollar value of contracting actions that were orders under Federal schedules with women-owned small businesses.
(6) LINE E6, HBCU. Enter the total number and dollar value of contracting actions with HBCUs pursuant to subpart 226.70.
(7) LINE E7, MI. Enter the total number and dollar value of contracting actions with MIs pursuant to subpart 226.70.
(8) LINE E8, JWOD PARTICIPATING NONPROFIT AGENCIES. Enter the total number and dollar value of contracting actions with qualified nonprofit agencies employing people who are blind or severely disabled for supplies or services from the Procurement List pursuant to FAR subpart 8.7.
(9) LINE E9, EXEMPT FROM SMALL BUSINESS ACT REQUIREMENTS. Enter the total number and dollar value of contracting actions exempt from the set-aside requirements of the Small Business Act (see FAR 19.502-1).
(10) LINE E10, HUBZONE.
(i) Enter the total number and dollar value of contracting actions that were
(ii) Enter the subtotals for the number and dollar value of contracting actions for—
(A) Line E10a, HUBZone Set-Aside;
(B) Line E10b, HUBZone Price Evaluation Preference;
(C) Line E10c, HUBZone Sole Source; and
(D) Line E10d, HUBZone Concern—Other. Use this category when the award is to a HUBZone small business concern and Lines E10a, E10b, and E10c do not apply.
(11) LINE E11, SERVICE-RELATED DISABLED VETERAN-OWNED SMALL BUSINESS. Enter the total number and dollar value of contracting actions that were awarded to service-disabled veteran-owned small business concerns.
(12) LINE E12, OTHER VETERAN-OWNED SMALL BUSINESS. Enter the total number and dollar value of contracting actions that were awarded to veteran-owned small business concerns, other than those reported on Line E11.
(h)
(i)
(1) Enter the total number and dollar value of contracting actions that were awarded 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(8). The numbers entered here are a breakout of the numbers already entered in Sections B and C.
(2) Enter the subtotals based on the instructions for completion of Section C for the number and dollar value of contracting actions for—
(i) Line G1a, Competed;
(ii) Line G1b, Not Available for Competition; and
(iii) Line G1c, Not Competed.
(j)
(1) LINE H1, REMARKS. Enter any remarks applicable to this report.
(2) LINE H2, CONTRACTING OFFICER.
(i) Line H2a, Name. Enter the name (last, first, middle initial) of the contracting officer or representative.
(ii) Line H2b, Signature. The person identified on Line H2a must sign.
(iii) Line H2c, Telephone Number. Enter the telephone number (with area code) of the person identified on Line H2a. Installations with Defense Switched Network (DSN) must enter their DSN number.
(3) LINE H3, DATE REPORT SUBMITTED. Enter the date that the DD Form 1057 is submitted. Enter four digits for the year, two digits for the month, and two digits for the day. Use 01 through 12 for January through December. For example, enter January 2, 2003, as 20030102.
(a) Use the DD Form 448 as prescribed in subpart 208.70.
(b) Prepare MIPR information in uniform contract format when possible. Overprint of fixed repetitive information is authorized.
(c)
(i) The requiring department identification code as prescribed in DoD 4000.25-6-M, Department of Defense Activity Address Directory (DoDAAD);
(ii) The last digit of the fiscal year; and
(iii) The number of the particular MIPR (numbered consecutively by the requiring activity).
(2) Block 6—Amend No. Assign a suffix number. Assign amendments of the same MIPR consecutive suffix numbers.
(3)
(A) Obtain items within the scope of MILSTRIP (see DoD 4000.25-1-M, Military Standard Requisitioning and Issue
(B) Obtain items not covered by MILSTRIP using DD Form 1149, Requisition and Invoice/Shipping Document.
(C) If, after receipt of a MIPR, it is determined the requested items are available from stock, the acquiring department shall use the MIPR to obtain the item.
(ii) Normally restrict a MIPR to one major end item, including its required spare parts, ground support equipment, and similar related items. For other than major end items, limit MIPRs to items within a single Federal supply class when possible.
(4)
(B) When a short delivery schedule is mandatory, the requiring department shall mark the MIPR “URGENT” in bold letters and provide justification for the marking.
(ii) Requiring activities must provide MILSTRIP requisition data prescribed in appendix B of the MILSTRIP Manual for each line item which is to be delivered to each “ship to” address. Repetitive data applicable to all lines on the MIPR may be overprinted.
(iii) The requiring activity will furnish estimated weight, cube, and dimensions for each line item or a statement explaining why these data are not available.
(iv) The requiring activity shall include the name and telephone number of an individual who is thoroughly familiar with the MIPR, its attachments, and technical requirements.
(v) Prepare attachments to MIPRs in sufficient numbers so that each copy of a MIPR submitted to the acquiring department is complete with a copy of all attachments. “Ship To and Mark For” addresses in shipping instructions must include the clear text identification and DoDAAD code if assigned.
(5)
(6)
(i) Complete the block only if—
(A) The resulting contract is not to be paid by the Defense Finance and Accounting Service; and
(B) The office to receive invoices and make payment is known at the time of preparation of the MIPR.
(ii) If payment is to be made by an office designated to receive invoices, also enter the DoDAAD code of that office.
(iii) If payment is to be made by an office other than the office to which the invoice is to be mailed, include the name, address, and DoDAAD code of the payment office as an attachment to the MIPR.
(iv) If multiple offices are to receive invoices and make payment, include the names and addresses of those offices as an attachment to the MIPR. Also include the DoDAAD code of each payment office.
(v) Whenever the payment office is included in an attachment, include a reference to the attachment in this block.
(vi) If the names and addresses of invoicing and payment offices are provided the acquiring department after submission of the MIPR, the requiring department also must provide the DoDAAD code for each payment office.
(7)
(i)
(ii)
(A) First and second—Treasury Department number identifying the department or agency to which the appropriation applies or has been transferred.
(B) Third and fourth—Treasury Department number identifying the department or agency from which an appropriation has been transferred; leave blank if no transfer is involved.
(C) Fifth and sixth—Identify the appropriation fiscal year. For multiple-year appropriations, the fifth position shall be the last digit of the first year of availability, and the sixth position shall be the last digit of the final year of availability. For annual appropriations, the fifth position shall be blank, and the sixth position shall be the last digit of the fiscal year. For no-year (continuing) appropriations, the fifth position shall be blank, and the sixth position shall be “X.”
(D) Seventh through tenth—Treasury Department appropriation serial number.
(iii)
(iv)
(v)
(vi)
(vii)
(d) When preparing a MIPR amendment, always fill out the basic information in Blocks 1 through 8. Fill out only those other blocks which vary from the data shown on the basic MIPR or a prior amendment. Insert “n/c” in items where there is no change.
(e) Change of a disbursing office cited on a DoD funded MIPR does not require a MIPR amendment when the resultant contract is assigned for administration to the Defense Contract Management Agency. The administrative contracting office may issue an administrative change order, copies of which will be provided to the contracting officer for transmittal to the requiring activity.
(a) Use the DD Form 448-2 as prescribed in subpart 208.70.
(b) Instructions for completion of DD Form 448-2. (Complete only the applicable blocks.) (1)
(2)
(3)
(i) When Block 6c acceptance is indicated (indicate the MIPR line item numbers that will be provided under each method of financing in Blocks 8a and 9a, respectively); or
(ii) If quantities or estimated costs cited in a MIPR require adjustment (list the affected MIPR line item numbers together with the adjusted quantities or estimated costs in the columns provided under Blocks 8 and 9, as appropriate).
(4)
(5)
(6)
(A) As a request to the requiring department to issue a MIPR amendment to provide the additional funds; or
(B) Authority for the requiring department to withdraw the available excess funds.
(ii) When funds of two or more appropriations are involved, provide proper breakdown information in Block 13.
(7)
(i) Justification, by MIPR line item, for any additional funds required;
(ii) Explanation for rejection of MIPR whether in part or in total;
(iii) Appropriation and subhead data cited on the MIPR; and
(iv) Other pertinent data.
(c) Complete a DD Form 448-2 for all MIPR amendments involving an adjustment of funds or delivery schedule, or if requested by the requiring department.
(d) Unless otherwise agreed, provide the requiring department an original and three copies of each DD Form 448-2.
(a)
(A)
(B)
(
(
(C)
(D)
(E)
(ii) The factors in section III, Block 20, generally mean—
(A)
(B)
(C)
(D)
(E)
(F)
(G)
(H)
(f) DoD uses the DD Form 1155, Order for Supplies or Services, instead of OF 347; and OF 336, Continuation Sheet, instead of OF 348.
(i) Use the DD Form 1155 as prescribed in 213.307(b)(i) and in accordance with the instructions at 253.213-70.
(ii) Use the OF 336, or a sheet of paper, as a continuation sheet for the DD Form 1155. Continuation sheets may be printed on the reverse of the DD Form 1155.
(iii) DD Form 1155c-1, Order for Supplies or Services (Commissary Continuation Sheet) may be used for commissary acquisitions.
(a) These instructions are mandatory if—
(1) Contract administration has been assigned outside the purchasing office; or
(2) The contractor is located in the continental United States or Canada.
(b) The entity codes (address codes) referenced in this subsection are codes published in—
(1)
(2)
(3)
(c) For orders requiring payment in Canadian currency—
(1) State the contract price in terms of Canadian dollars, followed by the initials CN; e.g., $1,647.23CN.
(2) Indicate on the face of the order—
(i) The U.S./Canadian conversion rate in effect at the time of the award; and
(ii) The U.S. dollar equivalent of the Canadian dollar amount.
(d) When the DD Form 1155 includes FMS requirements, clearly mark FMS requirement on its face. Specify within the order each FMS case identifier code by line or subline item number.
(e) Instructions for DD Form 1155 entries. (Instructions apply to purchase orders, delivery orders, and calls, except Block 2, which applies only to delivery orders and calls, and Block 12, which applies only to purchase orders.)
Enter the Procurement Instrument Identification (PII) number and, when applicable, the supplementary identification number for contracts, purchase orders, and agreements as prescribed in Subpart 204.70.
Enter the PII number for delivery orders/calls, when applicable, as prescribed in Subpart 204.70.
Enter the four position numeric year, three position alpha month, and two position numeric day.
Enter the number authorizing the purchase. When the number differs by line item, list it in the schedule and annotate this block, “see schedule.”
Enter the appropriate Program Identification Code as identified in Schedule I to the Defense Priorities and Allocations System Regulation.
Enter the name and address of the issuing office. In the code block, enter the DODAAD code for the issuing office. Directly below the address, enter: Buyer/Symbol: followed by the buyer's name and routing symbol. Directly below the buyer/symbol, enter: Phone: followed by the buyer's phone number and extension.
Enter the name and address of the contract administration activity. On purchase orders retained by purchasing offices for administration, mark this block, “see block 6.” Enter in the code block the DODAAD code of the contract administration activity. In the lower right or left-hand corner, enter the criticality designator code from FAR 42.1105.
Check the applicable box.
(i) Enter the full business name and address of the contractor. Enter in the first code block, the CAGE code of the contractor.
(ii) If it is known that all the work covered by the order is to be performed at an address different from the address represented by the contractor's code, and any contract administration function will be required at that facility, enter in the facility code block the organizational entity code for that facility, i.e., H8-1/H8-2 code for a non-Government entity or DODAAD code for a Government entity. (Use DODAAD codes only to indicate “performed at” locations for orders specifying services at a Government location.) If it is known that multiple facilities are involved, enter the codes for all facilities at which work is to be performed, including the contractor's code if work is performed at that address, in the Optional Form 336 Continuation Sheet and mark the facility code block with “see schedule.”
If a single date of delivery applies to the entire order, enter date in this block. List multiple delivery dates in the schedule and mark this block “see schedule.”
Check all applicable blocks.
Enter the discount for prompt payment in terms of percentages and corresponding days. Express the percentages in whole numbers and decimals, e.g., 3.25%—10 days; 0.50%—20 days.
Enter a reference to the block number containing the address to which invoices are to be mailed. When not in Block 6, 7, 14, or 15, insert in Block 13, “see schedule.”
If a single ship-to point applies to the entire order, enter the name and address of that point in this block and a DODAAD code in the code block. For FMS shipments, enter the MAPAD code in the code block and an instruction for the contractor to contact the transportation office of the administering activity to obtain a name and shipping address. Enter multiple ship-to points in the schedule and mark this block, “See Schedule.”
Enter the name and address of the activity making payment. Enter in the code block, the DODAAD code of the paying activity.
Check the appropriate box. If a purchase order:
(i) Identify the type of quotation, i.e., oral, letter or TWX, on which the order is based.
(ii) Check the box when acceptance of the purchase order is required and enter the number of copies of the order to be returned to the issuing office.
Enter the accounting classification and the accounting classification reference number(s) in accordance with 204.7107.
Enter an item number for each item of supply or service in accordance with subpart 204.71.
The schedule contains several elements of data. The order and arrangement of data in the schedule is mandatory for purchase and delivery orders assigned to the Defense Contract Management Agency or the military departments for administration and is encouraged for all orders.
(1)
Total item quantity for the line or subline item number followed by the appropriate national stock number or the word “none” if an NSN has not been assigned. On the same line and adjacent to NSN, enter the words “Total Item Quantity.” This phrase is used in conjunction with the total quantity, unit of issue, unit price, and dollar amount of the stock number or item cited (see entries for Blocks 20, 21, 22, and 23).
(2)
Enter first the most descriptive noun or verb of the supplies or services to be furnished, supplemented by additional description as prescribed in FAR part 10. If multiple accounting classifications apply to the contract, enter the accounting classification reference number.
(3)
Enter the quantity variance permitted for the line item in terms of percentages, indicating whether the percentage is plus or minus and if applicable to each destination.
(4)
Enter the point at which inspection/acceptance will take place.
(5)
Enter the preservation requirements for the item described. These requirements may
(6)
When required, enter the packing level designator and specification, standard, or document in which the requirements are stated or state the specific requirements.
(7)
When desired by the requiring activity, a requirement for cargo unitization for a particular destination should be specified for shipments involving two or more shipping containers having an aggregate total of not less than 20 cubic feet or 200 pounds.
(8)
Enter the DODAAD or MILSCAP H8-1/H8-2 (cage) as appropriate for the entity code of the ship-to point on the first line and the corresponding name and address on succeeding lines. If multiple accounting classifications apply to the same line or subline item, enter the accounting classification reference number. When several items are to be shipped to the same point, the code will be listed; but it will not be necessary to repeat the address.
(9)
When multiple delivery dates apply, enter the required date of delivery on the same line with ship-to code.
(10)
Enter the DODAAD or MILSCAP H8-1/H8-2 (cage) as appropriate for the entity code on the first line and name and address of the ultimate recipient of the supplies and services on succeeding lines.
Enter the total quantity ordered for the line item. If applicable, enter the breakdown on quantities for each ship-to point within the line item.
Enter the unit of measure applicable to the line item.
Enter the unit price applicable to the line item.
Enter the extended dollar amount (quantity x unit price) for each line item.
Enter the contracting/ordering officer's signature.
Enter the total dollar amount for all line items on the order.
(a) Use the DD Form 1547 as prescribed in 215.404-70.
(b)
(2) Express all dollar values to the nearest whole value (e.g., $200,008.55=$200,009).
(3) Express all percentages to the nearest hundredth or thousandth as appropriate (e.g., interest rate—8.25% or 8.257%).
(4) If the contracting office is exempt from reporting to the DoD management information system on profit and fee statistics (see 215.404-76), do not complete Block 1, 4, 5, 6, 7, 8, 9, 10, 11, or 12.
(5) Report an option amount for additional quantities as a separate contract action when exercised.
(6) Even though fixed-price type contract actions are negotiated on the basis of total price, prepare the negotiation summary portion of the DD Form 1547 showing the contracting officer's best estimates of cost and profit.
(7) For indefinite-delivery type contracts, prepare a consolidated DD Form 1547 for annual requirements expected to exceed the cost or pricing data threshold.
(8) Prepare a consolidated DD Form 1547, if possible, when multiple profit rates apply to a single negotiation.
(c)
(2)
(3)
(4)
(ii)
(5)
(6)
(7)
(8)
(9)
(10)
(11)
(12)
(13)
(14)
(15)
(16)
(17)
(18)
Department of Defense Acquisition Forms are not published in the
For
This appendix contains procedures and instructions for the use, preparation, and distribution of the material inspection and receiving report (MIRR) (DD Form 250 series) and commercial shipping/packing lists used to document Government contract quality assurance.
(a) The provisions of this appendix apply to supplies or services acquired by DoD when the clause at 252.246-7000, Material Inspection and Receiving Report, is included in the contract. If the contract contains the clause at FAR 52.213-1, Fast Payment Procedure, the contractor may elect not to prepare a DD Form 250.
(b) When DoD provides quality assurance or acceptance services for non-DoD activities, prepare a MIRR using the instructions in this appendix, unless otherwise specified in the contract.
(a) The DD Form 250 is a multipurpose report used—(1) To provide evidence of Government contract quality assurance at origin or destination;
(2) To provide evidence of acceptance at origin or destination;
(3) For packing lists;
(4) For receiving;
(5) For shipping;
(6) As a contractor invoice; and
(7) As commercial invoice support.
(b) Do not use the DD Form 250 for shipments—(1) By subcontractors, unless the subcontractor is shipping directly to the Government; or
(2) Of contract inventory.
(c) The contractor prepares the MIRR, except for entries that an authorized Government representative is required to complete.
(d) Use the DD Form 250-1—(1) For bulk movements of petroleum products by tanker or barge to cover—
(i) Origin or destination acceptance of cargo; or
(ii) Shipment or receipt of Government owned products.
(2) To send quality data to the point of acceptance in the case of origin inspection on FOB destination deliveries or preinspection at product source. Annotate the forms with the words “INSPECTED FOR QUALITY ONLY.”
(a)
(2) If the shipped to, marked for, shipped from, mode of shipment, contract quality assurance and acceptance data are the same for more than one shipment made on the same day under the same contract, contractors may prepare one MIRR to cover all such shipments.
(3) If the volume of the shipment precludes the use of a single car, truck, or other vehicle, prepare a separate MIRR for the contents of each vehicle.
(4) When a shipment is consigned to an Air Force activity and the shipment includes items of more than one federal supply class (FSC) or material management code (MMC), prepare a separate DD Form 250 for items of each of the FSCs or MMCs in the shipment. However, the cognizant Government representative may authorize a single DD Form 250, listing each of the FSCs or MMCs included in the shipment on a separate continuation sheet. The MMC appears as a suffix to the national stock number applicable to the item.
(5) Consolidation of Petroleum Shipments on a Single MIRR—(i)
(A) The shipper;
(B) Shipping point;
(C) Consignee;
(D) Contract and line item number;
(E) Product identification;
(F) Gross gallons (bulk only);
(G) Loading temperature (bulk only);
(H) American Petroleum Institute gravity (bulk only);
(I) Identification of carrier's equipment;
(J) Serial number of all seals applied; and
(K) Signature of supplier's representative.
When acceptance is at destination, the receiving activity retains the shipping document(s) to verify the entries on the consignee copy of the DD Form 250 forwarded by the contractor (reference F-401, Table 1) before signing Block 21b.
(ii)
(6)
(i) The shipper;
(ii) The name or names;
(iii) Location and shipping point of the mine or mines from which the coal originates;
(iv) The contract number;
(v) The exact size of the coal shipped; and
(vi) A certified weighmaster's certification of weight for the truckload.
Include a waybill with each rail shipment showing the identical information. To permit verification of rail deliveries, identify each railcar number comprising the shipment to the shipment number in Block 2 of the DD Form 250 and the analytical test report. When acceptance is at destination, the receiving activity must retain the shipping document(s) to verify the entries on the consignee copy of the DD Form 250.
(b)
(2) The contractor may report more than one barge in the same tow on a single form if on the same contract and consigned to the same destination.
(3) When liftings involve more than one contract, prepare separate forms to cover the portion of cargo loaded on each contract.
(4) Prepare a separate form for each product or grade of product loaded.
(5) Use a separate document for each tanker or barge cargo and each grade of product discharged.
(6) For discharge, the contractor may report more than one barge in the same tow on a single form if from the same loading source.
(a) Use the supplier's commercial shipping document/packing list to enter performance of required CQA actions at subcontract level. Make the following entries on the supplier's commercial shipping document/packing list:
Required CQA of listed items has been performed.
(b) Distribution for Government purposes shall be—
(1) One copy with shipment;
(2) One copy for the Government representative at consignee (via mail); and
(3) One copy for the Government representative at consignor.
(a)
(1) Dates must use nine spaces consisting of the four digits of the year, three-position alphabetic month abbreviation, and two digits for the day. For example, 2000AUG07, 2000SEP24.
(2) Addresses must consist of the name, street address/P.O. box, city, state, and ZIP code.
(3) Enter to the right of and on the same line as the word “Code” in Blocks 9 through 12 and in Block 14—
(i) The Commercial and Government Entity Handbook (H4/H8) code;
(ii) The DoD activity address code (DoDAAC) as it appears in the DoD Activity Address Directory (DoDAAD), DoD 4000.25-6-M; or
(iii) The Military Assistance Program Address Directory (MAPAD) code.
(4) Enter the DoDAAC, CAGE (H4/H8), or MAPAD code in Block 13.
(5) The data entered in the blocks at the top of the DD Form 250c must be identical to the comparable entries in Blocks 1, 2, 3, and 6 of the DD Form 250.
(6) Enter overflow data from the DD Form 250 in Block 16 or in the body of the DD Form
(7) Do not include classified information in the MIRR. MIRRs must not be classified.
(b)
(1) Block 1—Procurement Instrument Identification (Contract) No.
(i) Enter the 13-position alpha-numeric basic Procurement Instrument Identification Number (PIIN) of the contract. When applicable, enter the four-position alpha-numeric call/order serial number that is supplementary to the 13-position basic PIIN. This number is also referred to as the Supplementary Procurement Instrument Identification Number (SPIIN). Use SPIINs for (also see Subpart 204.70)—
(A) Delivery orders under indefinite-delivery type contracts;
(B) Orders under basic ordering agreements; and
(C) Calls under blanket purchase agreements.
(ii) Except as indicated in paragraph (b)(1)(iii) of this section, do not enter supplementary numbers used in conjunction with basic PIINs to identify—
(A) Modifications of contracts and agreements;
(B) Modifications to calls or orders; or
(C) Document numbers representing contracts written between contractors.
(iii) When shipping instructions are furnished and shipment is made before receipt of the confirming contract modification (SF 30, Amendment of Solicitation/Modification of Contract), enter the contract modification six-digit number or the two-digit call or order number immediately following the PIIN or call/order four-digit SPIIN.
(iv) For DoD delivery orders on non-DoD contracts, enter the non-DoD contract number immediately below the PII number.
(v) When a contract number other than PII number is used, enter that contract number.
(2) Block 2—Shipment No.
(i) The shipment number has a three-position alpha character prefix and a four-position numeric or alpha-numeric serial number.
(A) The prime contractor shall control and assign the shipment number prefix. The shipment number shall consist of three alphabetic characters for each “Shipped From” address (Block 11). The shipment number prefix shall be different for each “Shipped From” address and shall remain constant throughout the life of the contract. The prime contractor may assign separate prefixes when shipments are made from different locations within a facility identified by one “Shipped From” address.
(B) Number the first shipment 0001 for shipments made under the contract or contract and order number shown in Block 1 from each “Shipped From” address, or shipping location within the “Shipped From” address. Consecutively number all subsequent shipments with the identical shipment number prefix.
(ii) Reassign the shipment number of the initial shipment where a “Replacement Shipment” is involved (see paragraph (b)(16)(iv)(F) of this section).
(iii) The prime contractor shall control deliveries and on the final shipment of the contract shall end the shipment number with a “Z.” Where the final shipment is from other than the prime contractor's plant, the prime contractor may elect either to—
(A) Direct the subcontractor making the final shipment to end that shipment number with a “Z”; or
(B) Upon determination that all subcontractors have completed their shipments, to correct the DD Form 250 (see F-305) covering the final shipment made from the prime contractor's plant by addition of a “Z” to that shipment number.
(iv) Contractors follow the procedures in F-306 to use commercial invoices.
(3) Block 3—Date Shipped. Enter the date the shipment is released to the carrier or the date the services are completed. If the shipment will be released after the date of CQA and/or acceptance, enter the estimated date of release. When the date is estimated, enter an “E” after the date. Do not delay distribution of the MIRR for entry of the actual shipping date. Reissuance of the MIRR is not
(4) Block 4—B/L TCN. When applicable, enter—
(i) The commercial or Government bill of lading number after “B/L;”
(ii) The transportation control number after “TCN” (when a TCN is assigned for each line item on the DD Form 250 under Block 16 instructions, insert “See Block 16”); and
(iii) The initial (line haul) mode of shipment code in the lower right corner of the block (see F-302).
(5) Block 5—Discount Terms. (i) The contractor may enter the discount in terms of percentages on all copies of the MIRR.
(ii) Use the procedures in F-306 when the MIRR is used as an invoice.
(6) Block 6—Invoice No./date. (i) The contractor may enter the invoice number and actual or estimated date of invoice submission on all copies of the MIRR. When the date is estimated, enter an “E” after the date. Do not correct MIRRs other than invoice copies to reflect the actual date of invoice submission.
(ii) Use the procedures in F-306 when the MIRR is used as an invoice.
(7) Block 7—Page/of.
Consecutively number the pages of the MIRR. On each page enter the total number of pages of the MIRR.
(8) Block 8—Acceptance point.
Enter an “S” for Origin or “D” for destination.
(9) Block 9—Prime contractor/code.
Enter the code and address.
(10) Block 10—Administered by/code.
Enter the code and address of the contract administration office (CAO) cited in the contract.
(11) Block 11—Shipped from/code/FOB.
(i) Enter the code and address of the “Shipped From” location. If identical to Block 9, enter “See Block 9.”
(ii) For performance of services line items which do not require delivery of items upon completion of services, enter the code and address of the location at which the services were performed. If the DD Form 250 covers performance at multiple locations, or if identical to Block 9, enter “See Block 9.”
(iii) Enter on the same line and to the right of “FOB” an “S” for Origin or “D” for Destination as specified in the contract. Enter an alphabetic “O” if the “FOB” point cited in the contract is other than origin or destination.
(iv) For destination or origin acceptance shipments involving discount terms, enter “DISCOUNT EXPEDITE” in at least one-half inch outline-type style letters across Blocks 11 and 12. Do not obliterate other information in these blocks.
(12) Block 12—Payment will be made by/code. Enter the code and address of the payment office cited in the contract.
(13) Block 13—Shipped to/code. Enter the code and address from the contract or shipping instructions.
(14) Block 14—Marked for/code. Enter the code and address from the contract or shipping instructions. When three-character project codes are provided in the contract or shipping instructions, enter the code in the body of the block, prefixed by “Proj”; do not enter in the code block.
(15) Block 15—Item No. Enter the item number used in the contract.
(i) Use item numbers under the Uniform Contract Line Item Numbering System (see 204.71).
(ii) Position the item numbers as follows—
(A) For item numbers with four or less digits, enter the number immediately to the left of the vertical dashed line and prefix them with zeros, to achieve four digits.
(B) For item numbers with six digits, with alpha digits in the final two positions, enter the last two digits to the right of the vertical dashed line.
(C) For item numbers with six digits, with numbers in the final two positions, enter the first four digits immediately to the left of the vertical dashed line. Do not use the last two digits.
(iii) Line item numbers not in accordance with the Uniform Contract Line Item Numbering System may be entered without regard to positioning.
(16) Block 16—Stock/part No./description. (i) Use single or double spacing between line items when there are less than four line items. Use double spacing when there are four or more line items. Enter the following for each line item:
(A) The national stock number (NSN) or noncatalog number. Where applicable, include a prefix or suffix. If a number is not provided, or it is necessary to supplement the number, include other identification such as the manufacturer's name or federal supply code (as published in Cataloging Handbook H4-1), and the part number. Show additional part numbers in parentheses or slashes. Show the descriptive noun of the item nomenclature and if provided, the Government assigned management/material control code. The contractor may use the following technique in the case of equal kind supply items. The first entry shall be the description without regard to kind. For example, “Shoe-Low Quarter-Black,” “Resistor,” “Vacuum Tube,” etc. Below this description, enter the contract line item number in Block 15 and Stock/Part number followed by the size or type in Block 16.
(B) On the next printing line, if required by the contract for control purposes, enter: the make, model, serial number, lot, batch, hazard indicator, or similar description.
(C) On the next printing lines enter—
(D) When a TCN is assigned for each line item, enter on the next line the transportation control number prefixed by “TCN.”
(ii) For service line items, enter the word “SERVICE” followed by as short a description as is possible in no more than 20 additional characters. Some examples of service line items are maintenance, repair, alteration, rehabilitation, engineering, research, development, training, and testing. Do not complete Blocks 4, 13, and 14 when there is no shipment of material.
(iii) For all contracts administered by the Defense Contract Management Agency, with the exception of fast pay procedures, enter and complete the following:
(iv) Starting with the next line, enter the following as appropriate (entries may be extended through Block 20). When entries apply to more than one line item in the MIRR, enter them only once after the last line item entry. Reference applicable line item numbers.
(A) Enter in capital letters any special handling instructions/limits for material environmental control, such as temperature, humidity, aging, freezing, shock, etc.
(B) When a shipment is chargeable to Navy appropriation 17X4911, enter the appropriation, bureau control number (BCN), and authorization accounting activity (AAA) number (e.g., 17X4911-14003-104).
(C) When the Navy transaction type code (TC), “2T” or “7T” is included in the appropriation data, enter “TC 2T” or “TC 7T.”
(D) When an NSN is required by but not cited in a contract and has not been furnished by the Government, the contractor may make shipment without the NSN at the direction of the contracting officer. Enter the authority for such shipment.
(E) When Government furnished property (GFP) is included with or incorporated into the line item, enter the letters “GFP.”
(F) When shipment consists of replacements for supplies previously furnished, enter in capital letters “REPLACEMENT SHIPMENT.” (See F-301, Block 17, for replacement indicators).
(G) On shipments of Government furnished aeronautical equipment (GFAE) under Air Force contracts, enter the assignment AERNO control number, e.g., “AERNO 60-6354.”
(H) For items shipped with missing components, enter and complete the following:
“Item(s) shipped short of the following component(s): NSN or comparable identification ______, Quantity ______, Estimated Value ______, Authority ______”
(I) When shipment is made of components which were short on a prior shipment, enter and complete the following:
“These components were listed as shortages on shipment number ______, date shipped ______”
(J) When shipments involve drums, cylinders, reels, containers, skids, etc., designated as returnable under contract provisions, enter and complete the following:
“Return to ______, Quantity ______, Item ______, Ownership (Government/contractor).”
(K) Enter the total number of shipping containers, the type of containers, and the container number(s) assigned for the shipment.
(L) On foreign military sales (FMS) shipments, enter the special markings, and FMS case identifier from the contract. Also enter the gross weight.
(M) When test/evaluation results are a condition of acceptance and are not available prior to shipment, the following note shall be entered if the shipment is approved by the contracting officer:
The contracting officer will advise—
(N) The copy of the DD Form 250 required to support payment for destination acceptance (top copy of those with shipment) or ARP origin acceptance shall be identified as follows: enter “PAYMENT COPY” in approximately one-half inch outline type style letters with “FORWARD TO BLOCK 12 ADDRESS” in approximately one-quarter inch letters immediately below. Do not obliterate any other entries.
(O) For clothing and textile contracts containing a bailment clause, enter the words “GFP UNIT VALUE.”
(P) When the initial unit incorporating an approved value engineering change proposal (VECP) is shipped, enter the following statement:
This is the initial unit delivered which incorporates VECP No. ______, Contract Modification No. ______, dated ______
(17) Block 17—Quantity shipped/received. (i) Enter the quantity shipped, using the unit of measure in the contract for payment. When a second unit of measure is used for purposes other than payment, enter the appropriate quantity directly below in parentheses.
(ii) On the final shipment of a line item of a contract containing a clause permitting a variation of quantity and an underrun condition exists, the prime contractor shall enter a “Z” below the last digit of the quantity. Where the final shipment is from other than the prime contractor's plant and an underrun condition exists, the prime contractor may elect either to—
(A) Direct the subcontractor making the final shipment to enter a “Z” below the quantity; or
(B) Upon determination that all subcontractors have completed their shipments, correct the DD Form 250 (see F-305) covering the final shipment of the line item from the prime contractor's plant by addition of a “Z” below the quantity. Do not use the “Z” on deliveries which equal or exceed the contract line item quantity.
(iii) For replacement shipments, enter “A” below the last digit of the quantity, to designate first replacement, “B” for second replacement, etc. Do not use the final shipment indicator “Z” on underrun deliveries when a final line item shipment is replaced.
(iv) If the quantity received is the same quantity shipped and all items are in apparent good condition, enter by a check mark. If different, enter actual quantity received in apparent good condition below quantity shipped and circle. The receiving activity will annotate the DD Form 250 stating the reason for the difference.
(18) Block 18—Unit. Enter the abbreviation of the unit measure as indicated in the contract for payment. Where a second unit of measure is indicated in the contract for purposes other than payment or used for shipping purposes, enter the second unit of measure directly below in parentheses. Authorized abbreviations are listed in MIL-STD-129, Marking for Shipping and Storage. For example, LB for pound, SH for sheet.
(19) Block 19—Unit price. The contractor may, at its option, enter unit prices on all MIRR copies, except as a minimum:
(i) The contractor shall enter unit prices on all MIRR copies for each item of property fabricated or acquired for the Government and delivered to a contractor as Government furnished property (GFP). Get the unit price from Section B of the contract. If the unit price is not available, use an estimate. The estimated price should be the contractor's estimate of what the items will cost the Government. When the price is estimated, enter an “E” after the unit price.
(ii) Use the procedures in F-306 when the MIRR is used as an invoice.
(iii) For clothing and textile contracts containing a bailment clause, enter the cited Government furnished property unit value opposite “GFP UNIT VALUE” entry in Block 16.
(iv) Price all copies of DD Forms 250 for FMS shipments with actual prices, if available. If actual prices are not available, use estimated prices. When the price is estimated, enter an “E” after the price.
(20) Block 20—Amount. Enter the extended amount when the unit price is entered in Block 19.
(21) Block 21—Contract quality assurance (CQA). (i) The words “conform to contract” contained in the printed statements in Blocks 21a and 21b relate to quality and to the quantity of the items on the report. Do not modify the statements. Enter notes taking exception in Block 16 or on attached supporting documents with an appropriate block cross-reference.
(ii) When a shipment is authorized under alternative release procedure, attach or include the appropriate contractor signed certificate on the top copy of the DD Form 250 copies distributed to the payment office or attach or include the appropriate contractor certificate on the contract administration office copy when contract administration (Block 10 of the DD Form 250) is performed by the Defense Contract Management Agency (DCMA).
(iii) When contract terms provide for use of Certificate of Conformance and shipment is made under these terms, the contractor shall enter “Certificate of Conformance” in Block 21a on the next line following the CQA and acceptance statements. Attach or include the appropriate contractor signed certificate on the top copy of the DD Form 250 copies distributed to the payment office or attach or include the appropriate certificate on the contract administration office copy when contract administration (Block 10 of the DD Form 250) is performed by DCMA. In addition, attach a copy of the signed certificate to, or enter on, copies of the MIRR sent with shipment.
(iv) Origin. (A) The authorized Government representative must—
(
(B) When alternative release procedures apply—
(C) When fast pay procedures apply, the contractor or subcontractor shall enter in capital letters “FAST PAY” on the next line following the printed CQA/acceptance statement. When CQA is required, the authorized Government representative shall execute the block as required by paragraph (A).
(D) When Certificate of Conformance procedures apply, inspection or inspection and acceptance are at source, and the contractor's Certificate of Conformance is required, the contractor shall make entries required by paragraph (iv)(A).
(v) Destination. (A) When acceptance at origin is indicated in Block 21a, make no entries in Block 21b.
(B) When CQA and acceptance or acceptance is at destination, the authorized Government representative must—
(
(C) When “ALTERNATIVE RELEASE PROCEDURE” is entered in Block 21a and acceptance is at destination, the authorized Government representative must complete the entries required by paragraph (b)(21)(v)(B) of this section.
(D) Forward the executed payment copy or MILSCAP format identifier PKN or PKP to the payment office cited in Block 12 within 4 work days (5 days when MILSCAP Format is used) after delivery and acceptance of the shipment by the receiving activity. Forward one executed copy of the final DD Form 250 to the contract administration office cited in Block 10 for implementing contract closeout procedures.
(E) When “FAST PAY” is entered in Block 21a, make no entries in this block.
(22) Block 22—Receiver's Use. The authorized representative of the receiving activity (Government or contractor) must use this block to show receipt, quantity, and condition. The authorized representative must—
(i) Enter the date the supplies arrived. For example, when off-loading or in-checking occurs subsequent to the day of arrival of the carrier at the installation, the date of the carrier's arrival is the date received for purposes of this block;
(ii) Sign; and
(iii) Enter typed, stamped, or printed name, title, mailing address, and commercial telephone number.
(23) Block 23—Contractor use only. Self explanatory.
When individual shipments are held at the contractor's plant for authorized transportation consolidation to a single bill of lading, the contractor may prepare the DD Forms 250 at the time of CQA or acceptance prior to the time of actual shipment (see Block 3).
The contractor may prepare one MIRR when the identical line item(s) of a contract are to be shipped to more than one consignee, with the same or varying quantities, and the shipment requires origin acceptance. Prepare the MIRR using the procedures in this appendix with the following changes—
(a) Blocks 2, 4, 13, and, if applicable, 14—Enter “See Attached Distribution List.”
(b) Block 15—The contractor may group item numbers for identical stock/part number and description.
(c) Block 17—Enter the “total” quantity shipped by line item or, if applicable, grouped identical line items.
(d) Use the DD Form 250c to list each individual “Shipped To” and “Marked For” with—
(1) Code(s) and complete shipping address and a sequential shipment number for each;
(2) Line item number(s);
(3) Quantity;
(4) MIPR number(s), preceded by “MIPR,” or the MILSTRIP requisition number, and quantity for each when provided in the contract or shipping instructions; and
(5) If applicable, bill of lading number, TCN, and mode of shipment code.
(e) The contractor may omit those distribution list pages of the DD Form 250c that are not applicable to the consignee. Provide a complete MIRR for all other distribution.
Make a new revised MIRR or correct the original when, because of errors or omissions, it is necessary to correct the MIRR after distribution has been made. Use data identical to that of the original MIRR. Do not correct MIRRs for Blocks 19 and 20 entries. Make the corrections as follows—
(a) Circle the error and place the corrected information in the same block; if space is limited, enter the corrected information in Block 16 referencing the error page and block. Enter omissions in Block 16 referencing omission page and block. For example—
(b) When corrections have been made to entries for line items (Block 15) or quantity (Block 17) enter the words “CORRECTIONS HAVE BEEN VERIFIED” on page 1. The authorized Government representative will date and sign immediately below the statement. This verification statement and signature are not required for other corrections.
(c) Clearly mark the pages of the MIRR requiring correction with the words “CORRECTED COPY.” Avoid obliterating any other entries. Where corrections are made only on continuation sheets, also mark page number 1 with the words “CORRECTED COPY.”
(d) Page 1 and only those continuation pages marked “CORRECTED COPY” shall be distributed to the initial distribution. A complete MIRR with corrections shall be distributed to new addressee(s) created by error corrections.
The Government encourages, but does not require, contractors to use copies of the MIRR as an invoice, in lieu of a commercial form. If commercial forms are used, identify the related MIRR shipment number(s) on the form. If using the MIRR as an invoice, prepare and forward four copies to the payment office as follows—
(a) Complete Blocks 5, 6, 19, and 20. Block 6 shall contain the invoice number and date. Column 20 shall be totaled.
(b) Mark in letters approximately one inch high, first copy: “ORIGINAL INVOICE;” three copies “INVOICE COPY.”
(c) Forward the four copies to the payment office (Block 12 address), except when acceptance is at destination and a Navy finance office will make payment, forward to destination.
(d) Be sure to separate the four copies of the MIRR used as an invoice from the copies the MIRR used as a receiving report.
Contractors may use copies of the MIRR as a packing list. The packing list copies are in addition to the copies of the MIRR required for standard distribution (see F-401). Mark them “PACKING LIST.”
When the MIRR is used for receiving purposes, local directives shall prescribe procedures. If CQA and acceptance or acceptance of supplies is required upon arrival at destination, see F-301(b)(21)(v) for instructions.
(a) The contractor is responsible for distributing the DD Form 250, including mailing and payment of postage.
(b) Contractors shall distribute MIRRs using the instructions in Tables 1 and 2.
(c) Contractors shall distribute MIRRs on non-DoD contracts using this appendix as amended by the contract.
(d) Contractors shall make distribution promptly, but no later than the close of business of the work day following—
(1) Signing of the DD Form 250 (Block 21a) by the authorized Government representative; or
(2) Shipment when authorized under terms of alternative release, certificate of conformance, or fast pay procedures; or
(3) Shipment when CQA and acceptance are to be performed at destination.
(e) Do not send the consignee copies (via mail) on overseas shipments to port of embarkation (POE). Send them to consignee at APO/FPO address.
(f) Copies of the MIRR forwarded to a location for more than one recipient shall clearly identify each recipient.
Prepare the DD Form 250-1 using the following instructions when applied to a tanker or barge cargo lifting. If space is limited, use abbreviations. The block numbers correspond to those on the form.
(a) Block 1—Tanker/Barge. Line out “TANKER” or “BARGE” as appropriate and place an “X” to indicate loading report.
(b) Block 2—Inspection Office. Enter the name and location of the Government office conducting the inspection.
(c) Block 3—Report No. Number each form consecutively, starting with number 1, to correspond to the number of shipments made against the contract. If shipment is made from more than one location against the same contract, use this numbering system at each location.
(d) Block 4—Agency Placing Order on shipper, city, State and/or local address (loading). Enter the applicable Government activity.
(e) Block 5—Department. Enter military department owning product being shipped.
(f) Block 6—Prime contract or P.O. No. Enter the contract or purchase order number.
(g) Block 7—Name of prime contractor, city, State and/or local address (loading). Enter the name and address of the contractor as shown in the contract.
(h) Block 8—Storage contract. Enter storage contract number if applicable.
(i) Block 9—Terminal or refinery shipped from, city, State and/or local address. Enter the name and location of the contractor facility from which shipment is made. Also enter delivery point in this space as either “FOB Origin” or “FOB Destination.”
(j) Block 10—Order No. on supplier. Enter number of the delivery order, purchase order, subcontract or suborder placed on the supplier.
(k) Block 11—Shipped to: (receiving activity, city, State and/or local address. Enter the name and geographical address of the consignee as shown on the shipping order.
(l) Block 12—B/L Number. If applicable, enter the initials and number of the bill of lading. If a commercial bill of lading is later authorized to be converted to a Government bill of lading, show “Com. B/L to GB/L.”
(m) Block 13—Reqn. or request No. Enter number and date from the shipping instructions.
(n) Block 14—Cargo No. Enter the cargo number furnished by the ordering office.
(o) Block 15—Vessel. Enter the name of tanker or barge.
(p) Block 16—Draft arrival. Enter the vessel's draft on arrival.
(q) Block 17—Draft sailing. Enter the vessel's draft on completion of loading.
(r) Block 18—Previous two cargoes. Enter the type of product constituting previous two cargoes.
(s) Block 19—Prior inspection. Leave blank.
(t) Block 20—Condition of shore pipeline. Enter condition of line (full or empty) before and after loading.
(u) Block 21—Appropriation (loading). Enter the appropriation number shown on the contract, purchase order or distribution plan. If the shipment is made from departmentally owned stock, show “Army, Navy, or Air Force (as appropriate) owned stock.”
(v) Block 22—Contract item No. Enter the contract item number applicable to the shipment.
(w) Block 23—Product. Enter the product nomenclature and grade as shown in the contract or specification, the stock or class number, and the NATO symbol.
(x) Block 24—Specifications. Enter the specification and amendment number shown in the contract.
(y) Block 25—Statement of quantity. Enter in the “LOADED” column, the net barrels, net gallons, and long tons for the cargo loaded. NOTE: If more than
(z) Block 26—Statement of quality. (1) Under the heading “TESTS” list all inspection acceptance tests of the specification and any other quality requirements of the contract.
(2) Under the heading “SPECIFICATION LIMITS” list the limits or requirements as stated in the specification or contract directly opposite each entry in the “TESTS” column. List waivers to technical requirements.
(3) Under the heading “TEST RESULTS” list the test results applicable to the storage tank or tanks from which the cargo was lifted. If more than one storage tank is involved, list the tests applicable to each tank in separate columns headed by the tank number, the date the product in the tank was approved, and the quantity loaded from the tank. Each column shall also list such product characteristics as amount and type of corrosion inhibitor, etc.
(aa) Block 27—Time statement. Line out “DISCHARGE” and “DISCHARGING.” Complete all applicable entries of the time statement using local time. Take these dates and times from either the vessel or shore facility log. The Government representative shall ensure that the logs are in agreement on those entries used. If the vessel and shore facility logs are not in agreement, the Government representative will explain the reasons in Block 28—REMARKS. Do not enter the date and time the vessel left berth on documents placed aboard the vessel. The date and time shall appear on all other copies. Express all dates in sequence of day, month, and year with the month spelled out or abbreviated (e.g., 10 Sept. 67). The term FINISHED BALLAST DISCHARGE is meant to include all times needed to complete deballasting and mopping/drying of ship's tanks. The inspection of ship's tanks for loading is normally performed immediately upon completion of drying tanks.
(bb) Block 28—Remarks. Use this space for reporting—(1) All delays, their cause and responsible party (vessel, shore facility, Government representative, or other).
(2) Details of loading abnormalities such as product losses due to overflow, leaks, delivery of product from low level in shore tanks, etc.
(3) In the case of multiple consignees, enter each consignee, the amount consigned to each, and if applicable, the storage contract numbers appearing on the delivery order.
(4) When product title is vested in the U.S. Government, insert in capital letters “U.S. GOVERNMENT OWNED CARGO.” If title to the product remains with the contractor and inspection is performed at source with acceptance at destination, insert in capital letters “CONTRACTOR OWNED CARGO.”
(5) Seal numbers and location of seals. If space is not adequate, place this information on the ullage report or an attached supplemental sheet.
(cc) Block 29—Company or receiving terminal. Line out “OR RECEIVING TERMINAL” and get the signature of the supplier's representative.
(dd) Block 30—Certification by government representative. Line out “DISCHARGED.” The Government representative shall date
(ee) Block 31—Certification by master or agent. Obtain the signature of the master of the vessel or its agent.
Prepare the DD Form 250-1 using the following instructions when applied to a tanker or barge discharge. If space is limited, use abbreviations. The block numbers correspond to those on the form.
(a) Block 1—Tanker/barge. Line out “TANKER” or “BARGE” as applicable and place an “X” to enter discharge report.
(b) Block 2—Inspection office. Enter Government activity performing inspection on the cargo received.
(c) Block 3—Report No. Leave blank.
(d) Block 4—Agency placing order on shipper, city, state and/or local address (loading). Enter Government agency shown on loading report.
(e) Block 5—Department. Enter Department owning product being received.
(f) Block 6—Prime contract or P.O. No. Enter the contract or purchase order number shown on the loading report.
(g) Block 7—Name of prime contractor, city, state and/or local address (loading). Enter the name and location of contractor who loaded the cargo.
(h) Block 8—Storage contract. Enter the number of the contract under which material is placed in commercial storage where applicable.
(i) Block 9—Terminal or refinery shipped from, city, state and/or local address. Enter source of cargo.
(j) Block 10—Order no. on supplier. Make same entry appearing on loading report.
(k) Block 11—Shipped to: (receiving activity, city, state and/or local address). Enter receiving activity's name and location.
(l) Block 12—B/L Number. Enter as appears on loading report.
(m) Block 13—Reqn. or Request No. Leave blank.
(n) Block 14—Cargo No. Enter cargo number shown on loading report.
(o) Block 15—Vessel. Enter name of tanker or barge discharging cargo.
(p) Block 16—Draft arrival. Enter draft of vessel upon arrival at dock.
(q) Block 17—Draft sailing. Enter draft of vessel after discharging.
(r) Block 18—Previous two cargoes. Leave blank.
(s) Block 19—Prior inspection. Enter the name and location of the Government office which inspected the cargo loading.
(t) Block 20—Condition of shore pipeline. Enter condition of line (full or empty) before and after discharging.
(u) Block 21—Appropriation (loading). Leave blank.
(v) Block 22—Contract item no. Enter the item number shown on the loading report.
(w) Block 23—Product. Enter information appearing in Block 23 of the loading report.
(x) Block 24—Specifications. Enter information appearing in Block 24 of the loading report.
(y) Block 25—Statement of quantity. Enter applicable data in proper columns.
(1) Take “LOADED” figures from the loading report.
(2) Determine quantities discharged from shore tank gauges at destination.
(3) If a grade of product is discharged at more than one point, calculate the loss or gain for that product by the final discharge point. Report amounts previously discharged on discharge reports prepared by the previous discharge points. Transmit volume figures by routine message to the final discharge point in advance of mailed documents to expedite the loss or gain calculation and provide proration data when more than one department is involved.
(4) The loss or gain percentage shall be entered in the “PERCENT” column followed by “LOSS” or “GAIN,” as applicable.
(5) On destination acceptance shipments, accomplish the “DISCHARGED” column only, unless instructed to the contrary.
(z) Block 26—Statement of quality. (1) Under the heading “TESTS” enter the verification tests performed on the cargo preparatory to discharge.
(2) Under “SPECIFICATION LIMITS” enter the limits, including authorized departures (if any) appearing on the loading report, for the tests performed.
(3) Enter the results of tests performed under the heading “TEST RESULTS.”
(aa) Block 27—Time statement. Line out “LOAD” and “LOADING.” Complete all applicable entries of the time statement using local time. Take the dates and times from either the vessel or shore facility log. The Government representative shall ensure that these logs are in agreement with entries used. If the vessel and shore facility logs are not in agreement, the Government representative will explain the reason(s) in Block 28—REMARKS. Do not enter the date and time the vessel left berth on documents placed aboard the vessel. The date and time shall appear on all other copies. Express all dates in sequence of day, month, and year with the month spelled out or abbreviated (e.g., 10 Sept. 67).
(bb) Block 28—Remarks. Use this space for reporting important facts such as—
(1) Delays, their cause, and responsible party (vessel, shore facility, Government representative, or others).
(2) Abnormal individual losses contributing to the total loss. Enter the cause of such losses as well as actual or estimated volumes involved. Such losses shall include, but not be restricted to, product remaining aboard (enter tanks in which contained), spillages, line breaks, etc. Note where gravity group change of receiving tank contents results in a fictitious loss or gain. Note irregularities observed on comparing vessel ullages obtained at loading point with those at the discharge point if they indicate an abnormal transportation loss or contamination.
(cc) Block 29—Company or receiving terminal. Line out “COMPANY OR.” Secure the signature of a representative of the receiving terminal.
(dd) Block 30—Certification by government representative. Line out “LOADED.” The Government representative shall date and sign the form to certify inspection and acceptance, as applicable, by the Government. The name of the individual signing the certification as well as the names applied in Blocks 29 and 31, shall be typed or hand lettered on the master or all copies of the form. The signature in Block 30 must agree with the typed or lettered name to be acceptable to the paying office.
(ee) Block 31—Certification by master or agent. Obtain the signature of the master of the vessel or the vessel's agent.
(a) The Government representative shall distribute the completed DD Form 250-1 using Table 3 of this appendix as amended by the provisions of the contract or shipping order.
(b) The contractor shall furnish the Government representative sufficient copies of the completed form to permit the required distribution.
(c) Distribution of the form shall be made as soon as possible, but not later than 24 hours following completion of the form. (See Table 3 on following pages)
When errors are made in entries on the form which would affect payment or accountability, make corrected copies. Circle the corrected entries on all copies and mark the form “CORRECTED COPY.” Enter the statement, “Corrections Have Been Verified,” in Block 26 with the authorized Government representative's dated signature directly below. Make distribution of the certified corrected copy to all recipients of the original distribution.
1. There is created the Armed Services Board of Contract Appeals which is hereby designated as the authorized representative of the Secretary of Defense, the Secretary of the Army, the Secretary of the Navy and the Secretary of the Air Force, in hearing, considering and determining appeals by contractors from decisions of contracting officers or their authorized representatives or other authorities on disputed questions. These appeals may be taken (a) pursuant to the Contract Disputes Act of 1978 (41 U.S.C. Sec. 601,
2. Membership of the Board shall consist of attorneys at law who have been qualified in the manner prescribed by the Contract Disputes Act of 1978. Members of the Board are hereby designated Administrative Judges. There shall be appointed from members of the Board a chairman and two or more vice-chairmen. Appointment of the chairman and vice-chairmen and other members of the Board shall be made by the Under Secretary of Defense (Research and Engineering) and the Assistant Secretaries of the Military Departments responsible for procurement. The chairman and vice-chairmen shall serve in that capacity for a two-year term unless sooner removed or reappointed for an additional term or terms. The Under Secretary will also designate the order in which the vice-chairmen will act for the chairman in his absence. In the absence of a vice-chairman, the chairman or acting chairman may designate a member of the Board to serve as a temporary vice-chairman.
3. It shall be the duty and obligation of the members of the Armed Services Board of Contract Appeals to decide appeals on the record of the appeal to the best of their knowledge and ability in accordance with applicable contract provisions and in accordance with law and regulation pertinent thereto.
4. The chairman of the Board shall be responsible for establishing appropriate divisions of the Board to provide for the most effective and expeditous handling of appeals. He shall be reponsible for assigning appeals to the divisions for decision without regard to the military department or other procuring agency which entered into the contract. A division may consist of one or more members of the Board. The chairman shall designate one member of each division as the division head. The division heads and the chairman and vice-chairmen shall constitute the senior deciding group of the Board. A majority of the members of a division or of the senior deciding group shall constitute a quorum for the transaction of the business of each, respectively. Decisions of the Board shall be by majority vote of the members of a division participating and the chairman and a vice-chairman, unless the chairman refers the appeal for decision by the senior deciding group. The decision of the Board in cases so referred to the senior deciding group shall be by majority vote of the participating members of that group. The chairman may refer an appeal of unusual difficulty, significant precedential importance, or serious dispute within the normal decision process for decision by the senior deciding group. An appeal involving $50,000 or less may be decided by a single member or fewer members of the Board than hereinbefore provided for cases of unlimited dollar amount, under accelerated or expedited procedures as provided in the Rules of the Board and the Contract Disputes Act of 1978.
5. The Board shall have all powers necessary and incident to the proper performance of its duties. Subject to the approval of the Under Secretary of Defense (Research and Engineering) and the Assistant Secretaries of the Military Departments responsible for procurement, the Board shall adopt its own methods of procedure, and rules and regulations for its conduct and for the preparation and presentation of appeals and issuance of opinions. The Military Departments and other procuring agencies shall provide legal personnel to prepare and
6. Any member of the Board or any examiner, designated by the chairman, shall be authorized to hold hearings, examine witnesses, and receive evidence and argument for consideration and determination of the appeal by the designated division. A member of the Board shall have authority to administer oaths and issue subpoenas as specified in section 11 of the Contract Disputes Act of 1978. The chairman may request orders of the court in cases of contumacy or refusal to obey a subpoena in the manner prescribed in that section.
7. The chairman shall be responsible for the internal organization of the Board and for its administration. He shall provide within approved ceilings for the staffing of the Board with non-member personnel, including hearing examiners, as may be required for the performance of the functions of the Board. The chairman shall appoint a recorder of the Board. Such personnel shall be responsible to and shall function under the direction, supervision and control of the chairman.
8. The Board will be serviced by the Department of the Army for administrative support for its operations as required. Administrative support will include budgeting, funding, fiscal control, manpower control and utilization, personnel administration, security administration, supplies, and other administrative services. The Departments of the Army, Navy, Air Force and the Office of the Secretary of Defense will participate in financing the Board's operations on an equal basis and to the extent determined by the Assistant Secretary of Defense (Comptroller). The cost of processing appeals for departments and agencies other than those in the Department of Defense will be reimbursed.
9. The chairman of the Board will furnish the Secretary of Defense and to the Secretaries of the Military Departments by October 31 of each year a report containing an account of the Board's transactions and proceedings for the preceding fiscal year. Within 30 days following the close of a calendar quarter, the chairman shall forward a report of the Board's proceedings for the quarter to the Under Secretary of Defense (Research and Engineering), the Assistant Secretaries of the Military Departments responsible for procurement, and to the Director of the Defense Logistics Agency. Such reports shall disclose the number of appeals received, cases heard, opinions rendered, current reserve of pending matters, and such other information as may be required.
10. The Board shall have a seal bearing the following inscription: “Armed Services Board of Contract Appeals.” This seal shall be affixed to all authentications of copies of records and to such other instruments as the Board may determine.
11. This revised charter is effective April 21, 1980.
Approved:
The Armed Services Board of Contract Appeals (referred to herein as the Board) shall consider and determine appeals from decisions of contracting officers pursuant to the Contract Disputes Act of 1978 Pub. L. 95-563, 41 U.S.C. 601-613) relating to contracts made by (i) the Departments of Defense, Army, Navy and Air Force or (ii) any other executive agency when such agency or the Administrator for Federal Procurement Policy has designated the Board to decide the appeal.
(a) The Board's address is Skyline Six, 5109 Leesburg Pike, 7th Floor, Falls Church, VA 22041-3217, telephone (703) 681-8500 (receptionist), (703) 681-8502 (recorder).
(b) The Board consists of a chairman, two or more vice chairmen, and other members, all of whom are attorneys at law duly licensed by a state, commonwealth, territory, or the District of Columbia. Board members are designated Administrative Judges.
(c) There are a number of divisions of the Armed Services Board of Contract Appeals, established by the Chairman of the Board in such manner as to provide for the most effective and expeditious handling of appeals. The Chairman and a Vice Chairman of the Board act as members of each division. Appeals are assigned to the divisions for decision without regard to the military department or other procuring agency which entered into the contract involved. Hearing may be held by a designated member (Administrative Judge), or by a duly authorized examiner. Except for
1.
(b) Where the contractor has submitted a claim of $50,000 or less to the contracting officer and has requested a written decision within 60 days from receipt of the request, and the contracting officer has not done so, the contractor may file a notice of appeal as provided in subparagraph (a) above, citing the failure of the contracting officer to issue a decision.
(c) Where the contractor has submitted a properly certified claim over $50,000 to the contracting officer or has requested a decision by the contracting officer which presently involves no monetary amount pursuant to the Disputes clause, and the contracting officer has failed to issue a decision within a reasonable time, taking into account such factors as the size and complexity of the claim, the contractor may file a notice of appeal as provided in subparagraph (a) above, citing the failure of the contracting officer to issue a decision.
(d) Upon docketing of appeals filed pursuant to (b) or (c) hereof, the Board may, at its option, stay further proceedings pending issuance of a final decision by the contracting officer within such period of time as is determined by the Board.
(e) In lieu of filing a notice of appeal under (b) or (c) hereof, the contractor may request the Board to direct the contracting officer to issue a decision in a specified period of time, as determined by the Board, in the event of undue delay on the part of the contracting officer.
2.
3.
4.
(1) The decision from which the appeal is taken;
(2) The contract, including pertinent specifications, amendments, plans and drawings;
(3) All correspondence between the parties relevant to the appeal, including the letter or letters of claim in response to which the decision was issued;
(4) Transcripts of any testimony taken during the course of proceedings, and affidavits or statements of any witnesses on the matter in dispute made prior to the filing of the notice of appeal with the Board; and
(5) Any additional information considered relevant to the appeal.
Within the same time above specified the contracting officer shall furnish the appellant a copy of each document he transmits to the Board, except those in subparagraph (a)(2) above. As to the latter, a list furnished appellant indicating specific contractual documents transmitted will suffice.
(b)
(c)
(d)
(e)
(f) Notwithstanding the foregoing, the filing of the rule 4 (a) and (b) documents may be dispensed with by the Board either upon request of the appellant in his notice of appeal or thereafter upon stipulation of the parties.
5.
(b) The Board may entertain and rule upon other appropriate motions.
6.
(b)
(c) A party who intends to raise an issue concerning the law of a foreign country shall give notice in his pleadings or other reasonable written notice. The Board, in determining foreign law, may consider any relevant material or source, including testimony, whether or not submitted by a party or admissible under Rules 11, 13 or 20. The determination of foreign law shall be treated as a ruling on a question of law.
7.
8.
9.
10.
(1) Simplification, clarification, or severing of the issues;
(2) The possibility of obtaining stipulations, admissions, agreements and rulings on admissibility of docments, understandings on matters already of record, or similar agreements that will avoid unnecessary proof;
(3) Agreements and rulings to facilitate discovery;
(4) Limitation of the number of expert witnesses, or avoidance of similar cumulative evidence;
(5) The possibility of agreement disposing of any or all of the issues in dispute; and
(6) Such other matters as may aid in the disposition of the appeal.
(b) The administrative judge or examiner of the Board shall make such rulings and orders as may be appropriate to aid in the disposition of the appeal. The results of pretrial conferences, including any rulings and orders, shall be reduced to writing by the administrative judge or examiner and this writing shall thereater constitute a part of the record.
11.
12.
12.1
(b) In appeals where the amount in dispute is $50,000 or less, the appellant may elect to have the appeal processed under an ACCELERATED procedure requiring decision of the appeal, whenever possible, within 180 days after the Board receives written notice of the appellant's election to utilize this procedure. The details of this procedure appear in section 12.3 of this Rule.
(c) The appellant's election of either the SMALL CLAIMS (EXPEDITED) procedure or the ACCELERATED procedure may be made by written notice within 60 days after receipt of notice of docketing, unless such period is extended by the Board for good cause. The election may not be withdrawn except with permission of the Board and for good cause.
12.2
(1) Within 10 days from the Government's first receipt from either the appellant or the Board of a copy of the appellant's notice of election of the SMALL CLAIMS (EXPEDITED) procedure, the Government shall send the Board a copy of the contract, the contracting officer's final decision, and the appellant's claim letter or letters, if any; remaining documents required under Rule 4 shall be submitted in accordance with times specified in that rule unless the Board otherwise directs.
(2) Within 15 days after the Board has acknowledged receipt of appellant's notice of election, the assigned administrative judge shall take the following actions, if feasible, in an informal meeting or a telephone conference with both parties: (i) Identify and simplify the issues; (ii) establish a simplified procedure appropriate to the particular appeal involved; (iii) determine whether either party wants a hearing, and if so, fix a time and place therefor; (iv) require the Government to furnish all the additional documents relevant to the appeal; and (v) establish an expedited schedule for resolution of the appeal.
(b) Pleadings, discovery, and other prehearing activity will be allowed only as consistent with the requirement to conduct the hearing on the date scheduled, or if no hearing is scheduled, to close the record on a date that will allow decisions within the 120-day limit. The Board, in its discretion, may impose shortened time periods for any actions prescribed or allowed under these rules, as necessary to enable the Board to decide the appeal within the 120-day limit, allowing whatever time, up to 30 days, that the Board considers necessary for the preparation of the decision after closing the record and the filing of briefs, if any.
(c) Written decision by the Board in cases processed under the SMALL CLAIMS (EXPEDITED) procedure will be short and contain only summary findings of fact and conclusions. Decisions will be rendered for the Board by a single administrative judge. If there has been a hearing, the administrative judge presiding at the hearing may, in the judge's discretion, at the conclusion of the hearing and after entertaining such oral arguments as deemed appropriate, render on the record oral summary findings of fact, conclusions, and a decision of the appeal. Whenever such an oral decision is rendered, the Board will subsequently furnish the parties a typed copy of such oral decision for record and payment purposes and to establish the starting date for the period for filing a motion for reconsideration under rule 29.
(d) A decision against the Government or the contractor shall have no value as precedent, and in the absence of fraud shall be final and conclusive and may not be appealed or set aside.
12.3
(b) Written decision by the Board in cases processed under the ACCELERATED procedure will normally be short and contain only summary findings of fact and conclusions. Decisions will be rendered for the Board by a single administrative judge with the concurrence of a vice chairman, or by a majority among these two and the chairman in case of disagreement. Alternatively, in cases where the amount in dispute is $10,000 or less as to which the ACCELERATED procedure has been elected and in which there has been a hearing, the single administrative judge presiding at the hearing may, with the concurrence of both parties, at the conclusion of the hearing and after entertaining such oral arguments as deemed appropriate, render on the record oral summary findings of fact, conclusions, and a decision of the appeal. Whenever such an oral decision is rendered, the Board will subsequently furnish the parties a typed copy of such oral decision for record and payment purposes, and to establish the starting date for the period of filing a motion for reconsideration under Rule 29.
12.4
13.
(b) Except as the Board may otherwise order in its discretion, no proof shall be received in evidence after completion of an oral hearing or, in cases submitted on the record, after notification by the Board that the case is ready for decision.
(c) The weight to be attached to any evidence of record will rest within the sound discretion of the Board. The Board may in any case require either party, with appropriate notice to the other party, to submit additional evidence on any matter relevant to the appeal.
14.
(b)
(c)
(d)
(e)
(f)
15.
16.
17.
18.
19.
20.
(b)
21.
(i) Testimony at a deposition—the deposing of a witness in the city or county where he resides or is employed or transacts his business in person, or at another location convenient for him that is specifically determined by the Board;
(ii) Testimony at a hearing—the attendance of a witness for the purpose of taking testimony at a hearing; and
(iii) Production of books and papers—in addition to (i) or (ii), the production by the witness at the deposition or hearing of books and papers designated in the subpoena.
(b)
(c)
(i) 15 days before a scheduled deposition where the attendance of a witness at a deposition is sought; or
(ii) 30 days before a scheduled hearing where the attendance of a witness at a hearing is sought.
In its discretion the Board may honor requests for subpoenas not made within these time limitations.
(2) A request for a subpoena shall state the reasonable scope and general relevance to the case of the testimony and of any books and papers sought.
(d)
(e)
(2) Where the witness is located in a foreign country, a letter rogatory or subpoena may be issued and served under the circumstances and in the manner provided in 28 U.S.C. 1781-1784.
(f)
(2) A subpoena requiring the attendance of a witness at a deposition or hearing may be served at any place. A subpoena may be served by a United States marshal or deputy marshal, or by any other person who is not a party and not less than 18 years of age. Service of a subpoena upon a person named therein shall be made by personally delivering a copy to that person and tendering the fees for one day's attendance and the mileage provided by 28 U.S.C. 1821 or other applicable law; however, where the subpoena is issued on behalf of the Government, money payments need not be tendered in advance of attendance.
(3) The party at whose instance a subpoena is issued shall be responsible for the payment of fees and mileage of the witness and of the officer who serves the subpoena. The failure to make payment of such charges on demand may be deemed by the Board as a sufficient ground for striking the testimony of the witness and the books or papers the witness has produced.
(g)
22.
23.
24.
25.
26.
27.
28.
(b) Any monetary award to a contractor by the Board shall be promptly paid in accordance with the procedures provided by section 1302 of the Act of July 27, 1956 (70 Stat. 694, as amended; 31 U.S.C. 724a). To assure prompt payment the Recorder will forward a waiver form to each party with the decision. If the parties do not contemplate an appeal or motion for reconsideration, they will execute waivers which so state, and return them to the Recorder. The Recorder will forward the waivers and a certified copy of the award decision to the General Accounting Office for certification for payment.
29.
30.
31.
32.
33.
(b) In computing any period of time, the day of the event from which the designated period of time begins to run shall not be included, but the last day of the period shall be included unless it is a Saturday, Sunday, or a legal holiday, in which event the period shall run to the end of the next business day.
34.
35.
36.
Pursuant to the Charter of the Armed Services Board of Contract Appeals, the attached rules are hereby approved for use and application to appeals to the Armed Services Board of Contract Appeals under the Contract Disputes Act of 1978.
(a) This appendix provides policy and procedures for breaking out components of end items for future acquisitions so that the Government can purchase the components directly from the manufacturer or supplier and furnish them to the end item manufacturer as Government-furnished material.
(b) This appendix does not apply to—
(1) The initial decisions on Government-furnished equipment/contractor-furnished equipment that are made at the inception of an acquisition program; or
(2) Breakout of parts for replenishment (see Appendix E).
DoD policy is to breakout components of weapons systems or other major end items under certain circumstances.
(a) When it is anticipated that a prime contract will be awarded without adequate price competition, and the prime contractor is expected to acquire any component without adequate price competition, breakout that component if—
(1) Substantial net cost savings probably will be achieved; and
(2) Breakout action will not jeopardize the quality, reliability, performance, or timely delivery of the end item.
(b) Even when either or both the prime contract and the component will be acquired with adequate price competition, consider breakout of the component if substantial net cost savings will result from—
(1) Greater quantity acquisitions; or
(2) Such factors as improved logistics support (through reduction in varieties of spare parts) and economies in operations and training (through standardization of design).
(c) Breakout normally is not justified for a component that is not expected to exceed $1 million for the current year's requirement.
(a) Agencies are responsible for ensuring that—
(1) Breakout reviews are performed on components meeting the criteria in D-102(a) and (b);
(2) Components susceptible to breakout are earmarked for consideration in future acquisitions;
(3) Components earmarked for breakout are considered during requirements determination and appropriate decisions are made; and
(4) Components are broken out when required.
(b) The program manager or other official responsible for the material program concerned is responsible for breakout selection, review, and decision.
(c) The contracting officer or buyer and other specialists (e.g., small business specialist, engineering, production, logistics, and maintenance) support the program manager in implementing the breakout program.
(a) A breakout review and decision includes—
(1) An assessment of the potential risks to the end item from possibilities such as delayed delivery and reduced reliability of the component;
(2) A calculation of estimated net cost savings (i.e., estimated acquisition savings less any offsetting costs); and
(3) An analysis of the technical, operational, logistics, and administrative factors involved.
(b) The decision must be supported by adequate explanatory information, including an assessment by the end item contractor when feasible.
(c) The following questions should be used in the decision process—
(1) Is the end item contractor likely to do further design or engineering effort on the component?
(2) Is a suitable data package available with rights to use it for Government acquisition? (Note that breakout may be warranted even though competitive acquisition is not possible.)
(3) Can any quality control and reliability problems of the component be resolved without requiring effort by the end item contractor?
(4) Will the component require further technical support (e.g., development of specifications, testing requirements, or quality assurance requirements)? If so, does the Government have the resources (manpower, technical competence, facilities, etc.) to provide such support? Or, can the support be obtained from the end item contractor (even though the component is broken out) or other source?
(5) Will breakout impair logistics support (e.g., by jeopardizing standardization of components)?
(6) Will breakout unduly fragment administration, management, or performance of the end item contract (e.g., by complicating production scheduling or preventing identification of responsibility for end item failure caused by a defective component)?
(7) Can breakout be accomplished without jeopardizing delivery requirements of the end item?
(8) If a decision is made to breakout a component, can advance acquisition funds be made available to provide the new source any necessary additional lead time?
(9) Is there a source other than the present manufacturer capable of supplying the component?
(10) Has the component been (or is it going to be) acquired directly by the Government as a support item in the supply system or as Government-furnished equipment in other end items?
(11) Will the financial risks and other responsibilities assumed by the Government after breakout be acceptable?
(12) Will breakout result in substantial net cost savings? Develop estimates of probable savings in cost considering all offsetting costs such as increases in the cost of requirements determination and control, contracting, contract administration, data package purchase, material inspection, qualification or preproduction testing, ground support and test equipment, transportation, security, storage, distribution, and technical support.
(d) If answers to the questions reveal conditions unfavorable to breakout, the program manager should explore whether the unfavorable conditions can be eliminated. For example, where adequate technical support is not available from Government resources, consider contracting for the necessary services from the end item contractor or other qualified source.
(a) The contracting activity shall maintain records on components reviewed for breakout. Records should evidence whether the components—
(1) Have no potential for breakout;
(2) Have been earmarked as potential breakout candidates;
(3) Have been, or will be, broken out.
(b) The program manager or other designated official must sign the records.
(c) Records must reflect the facts and conditions of the case, including any assessment by the contractor, and the basis for the decision. The records must contain the assessments, calculations, and analyses discussed in D-104, including the trade-off analysis between savings and increased risk to the Government because of responsibility for Government-furnished equipment.
This appendix established the DoD Spare Parts Breakout Program and provides uniform policies and procedures for management and conduct of the program within and between the departments and agencies.
(a) This appendix applies to—
(1) Any centrally managed replenishment or provisioned part (hereinafter referred to as “part”) for military systems and equipment; and
(2) All DoD personnel involved with design control, acquisition, and management of such parts including, but not limited to, project/program/system managers, technical personnel, contracting officers, legal counsel, inventory managers, inspectors, and small business specialists and technical advisors.
(b) This appendix does not apply to—
(1) Component breakout (see Appendix D);
(2) Foreign military sale peculiar items;
(3) Insurance items (e.g., one-time buy);
(4) Obsolete items;
(5) Phase out items (e.g., life of type buy);
(6) Items with annual buy values below the thresholds developed by DoD components or field activities;
(7) Parts being acquired under other specifically defined initial support programs; or
(8) Parts acquired through local purchase.
(a) Significant resources are dedicated to the acquisition and management of parts for military systems and equipment. The ability to competitively buy spares must be considered early in a weapon system acquisition. Initially, repairable or consumable parts are identified and acquired through a provisioning process; repairable or consumable parts acquired thereafter are for replenishment.
(b) The objective of the DoD Spare Parts Breakout Program is to reduce costs through the use of competitive procurement methods, or the purchase of parts directly from the actual manufacturer rather than the prime contractor, while maintaining the integrity of the systems and equipment in which the parts are to be used. The program is based on the application of sound management and engineering judgement in—
(1) Determining the feasibility of acquiring parts by competitive procedures or direct purchase from actual manufacturers; and
(2) Overcoming or removing constraints to breakout identified through the screening process (technical review) described in E-302.
(c) This Appendix sets forth procedures to screen and code parts in order to provide contracting officers summary information regarding technical data and sources of supply to meet the Government's minimum requirements. This information assists the contracting officer in selecting the method of contracting, identifying sources of supply, and making other decisions in the preaward and award phases, with consideration for established parameters of system and equipment integrity, readiness, and the opportunities to competitively acquire parts (see FAR/DFARS Part 6). The identification of sources for parts, for example, requires knowledge of manufacturing sources, additional operations performed after manufacture of parts possessing safety or other critical characteristics, and the availability of technical data.
(d) The result of the screening process (technical review is indicated by an acquisition method code (AMC) and an acquisition method suffix code (AMSC). This program provides procedures for both the initial assignment of an AMC and an AMSC to a part, and for the recurring review of these codes (see E-202 and E-203(b)(1)).
A single digit numeric code, assigned by a DoD activity, to describe to the contracting officer and other Government personnel the results of a technical review of a part and its suitability for breakout.
A conference which is generally held at the contractor's facility for the purpose of reviewing contractor technical information codes (CTICs) and corresponding substantiating data for breakout.
A single digit alpha code, assigned by a DoD activity, which provides the contracting officer and other Government personnel with engineering, manufacturing, and technical information.
An individual, activity, or organization that performs the physical fabrication processes that produce the deliverable part or other items of supply for the Government. The actual manufacturer must produce the part in-house. The actual manufacturer may or may not be the design control activity.
See current version of DoD STD-100, paragraphs 201.4.4 and 703.
The forecast quantity of a part required for the next 12 months.
The annual buy quantity of a part multiplied by its unit price.
The process whereby a part is loaned to a recipient with the agreement that the part will be returned at an appointed time. The government retains legal title to such material even though the borrowing organization has possession during the stated period.
The improvement of the acquisition status of a part resulting from a technical review and a deliberate management decision. Examples are—
(a) The competitive acquisition of a part previously purchased noncompetitively; and
(b) The direct purchase of a part previously purchased from a prime contractor who is not the actual manufacturer of the part.
A contract action where two or more responsible sources, acting independently, can
A two digit alpha code assigned to a part by a prime contractor to furnish specific information regarding the engineering, manufacturing, and technical aspects of that part.
A contractor or Government activity having responsibility for the design of a given part, and for the preparation and currency of engineering drawings and other technical data for that part. The design control activity may or may not be the actual manufacturer. The design control activity is synonymous with design activity as used by DoD STD-100.
The acquisition of a part from the actual manufacturer, including a prime contractor who is an actual manufacturer of the part.
See current versions of DoD STD-100 and DoDD 1000.
The contract unit price of a part multiplied by the quantity purchased.
A contract action where all responsible sources are permitted to compete.
A detailed parts breakout process, including data collection, data evaluation, data completion, technical evaluation, economic evaluation, and supply feedback, used to determine if parts can be purchased directly from the actual manufacturer(s) or can be competed.
A buy which must be executed as soon as possible to prevent unacceptable equipment readiness reduction, unacceptable disruption in operational capability, and increased safety risks, or to avoid other costs.
The total dollar value of all acquisitions that are estimated to occur over a part's remaining life cycle.
A competitive contract action where the provisions of full and open competition do not exist.
A parts breakout process covering only selected points of data and technical evaluations, and should only be used to support immediate buy requirements (see E-301.3).
The physical fabrication process that produces a part, or other item of supply. The physical fabrication processes include, but are not limited to machining, welding, soldering, brazing, heat treating, braking, riveting, pressing, chemical treatment, etc.
A contractor having responsibility for design control and/or delivery of a system/equipment such as aircraft, engines, ships, tanks, vehicles, guns and missiles, ground communications and electronics systems, and test equipment.
The process of determining and acquiring the range and quantity (depth) of spare and repair parts, and support and test equipment required to operate and maintain an end item of materiel for an initial period of service.
Any action (contractual or precontractual) that results in approval for a firm to supply items to the Government without further testing beyond quality assurance demonstrations incident to acceptance of an item. When prequalification is required, the Government must have a justification on file—
(a) Stating the need for qualification and why it must be done prior to award;
(b) Estimating likely cost of qualification; and
(c) Specifying all qualification requirements.
A part, repairable or consumable, purchased after provisioning of that part, for: replacement; replenishment of stock; or use in the maintenance, overhaul, and repair of equipment such as aircraft, engines, ships, tanks, vehicles, guns and missiles, ground communications and electronic systems, ground support, and test equipment. As used in this appendix, except when distinction is necessary, the term “part” includes subassemblies, components, and subsystems as defined by the current version of MIL-STD-280.
A process by which parts are examined and analyzed to determine how they were manufactured, for the purpose of developing a complete technical data package. The normal, expected result of reverse engineering is the creation of a technical data package suitable for manufacture of an item by new sources.
See current version of DoD-STD-100, paragraph 201.4.5.
Any commercial or noncommercial organization which can supply a specified part. For coding purposes, sources include actual manufacturers, prime contractors, vendors, dealers, surplus dealers, distributors, and other firms.
The Government review that must be completed before contract award.
See the current version of DoD-STD-100, paragraph 201.4.3.
Specifications, plans, drawings, standards, purchase descriptions, and such other data to describe the Government's requirements for acquisition.
(a) The identification, selection, and screening of parts for breakout shall be made as early as possible to determine the technical and economic considerations of the opportunities for breakout to competition or direct purchase. Full and open competition is the preferred result of breakout screening.
(b) A part shall be made a candidate for breakout screening based on its cost effectiveness for breakout. Resources should be assigned and priority given to those parts with the greatest expected return given their annual buy value, life cycle buy value, and likelihood of successful breakout, given technical characteristics such as design and performance stability. Consideration of all such factors is necessary to ensure the maximum return on investment in a given breakout program. Occasionally, an item will not meet strict economic considerations for breakout, but action may be required due to other considerations to avoid overpricing situations. Accordingly, there is no minimum DoD threshold for breakout screening actions. DoD components and field activities will develop annual buy thresholds for breakout screening which are consistent with economic considerations and resources. Every effort should be made to complete the full screening of parts that are expected to be subsequently replenished as they enter the inventory.
(c) Breakout improvement efforts shall continue through the life cycle of a part to improve its breakout status (see E-203) or until such time as the part is coded 1G, 2G, 1K, 2K, 1M, 2M, 1N, 2N, 1T, 2T, 1Z, or 2Z.
(d) No firm shall be denied the opportunity to demonstrate its ability to furnish a part which meets the Government's needs, without regard to a part's annual buy value, where a restrictive AMC/AMSC is assigned (see FAR 9.202). A firm must clearly demonstrate, normally at its own expense, that it can satisfy the Government's requirements. The Government shall make a vigorous effort to expedite its evaluation of such demonstration and to furnish a decision to the demonstrating firm within a reasonable period of time. If a resolution cannot be made within 60 days, the offeror must be advised of the status of the request and be provided with a good faith estimate of the date the evaluation will be completed. Every reasonable effort shall be made to complete the review before a subsequent acquisition is made. Also, restrictive codes and low annual buy value do not preclude consideration of a surplus dealer or other nonmanufacturing source when the part offered was manufactured by an approved source (see FAR 10.010). A potential surplus dealer or other nonmanufacturing source must provide the Government with all the necessary evidence which proves the proposed part meets the Government's requirements.
(e) The experience and knowledge accrued by contractors in the development, design, manufacture and test of equipment may enhance the breakout decision making process. DoD activities may obtain technical information from contractors when it is considered requisite to an informed coding decision. The procedure for contracting for this information is provided in Part 4 of this appendix. Contractor's technical information will be designated by CTICs. Only DoD activities shall assign AMCs and AMSCs.
(f) DoD activities with breakout screening responsibilities shall develop, document, and advertise programs which promote the development of qualified sources for parts that are currently being purchased sole source. These programs should provide fair and reasonable technical assistance (engineering or other technical data, parts on bailment, etc.) to contractors who prove they have potential for becoming a qualified second source for an item. These programs should also provide specially tailored incentives to successful firms so as to stimulate their investment in becoming qualified, e.g., Government furnished equipment (GFE) or Government furnished material (GFM) for reverse engineering and technical data package review and assistance.
(g) Departments and agencies shall identify the engineering support activity, design control activity, actual manufacturer, and prime contractor for each part such that the information is readily available to breakout and acquisition personnel.
(a) The Assistant Secretary of Defense (Production and Logistics) has authority for direction and management of the DoD Spare
(b) Departments and agencies shall perform audits to ensure that their respective activities comply with the provisions of this program.
(c) Commanders of DoD activities with breakout screening responsibility shall—
(1) Implement a breakout program consistent with the requirements of this appendix.
(2) Assist in the identification and acquisition of necessary data rights and technical data, and the review of restrictive legends on technical data, during system/equipment development and production to allow, when feasible, breakout of parts.
(3) Designate a program manager to serve as the central focal point, communicate breakout policy, ensure cost effectiveness of screening actions and breakout program, provide assistance in implementing breakout screening, monitor ongoing breakout efforts and achievements, and provide surveillance over implementation of this appendix. The program manager shall report only to the Commander, or deputy, of the activity with breakout screening responsibility.
(4) Ensure that actions to remove impediments to breakout are continued so long as it is cost effective, or until no further breakout improvements can be made.
(5) Invite the activity's small business specialist and the resident small business administration's procurement center representative (PCR), if any, to participate in all acquisition method coding conferences at Government and contractor locations.
(6) Ensure timely engineering and technical support to other breakout activities regardless of location.
(i) In the case of parts where contracting or inventory management responsibility has been transferred, support shall include—
(A) Assignment of an AMC/AMSC prior to the transfer;
(B) Assignment of an AMC/AMSC when requested by the receiving activity to parts transferred without such codes. The requesting activity may recommend an AMC/AMSC; and
(C) Full support of the receiving activities’ breakout effort by providing timely engineering support in revising existing AMC/AMSCs.
(ii) In all cases, support shall include, but not be limited to, furnishing all necessary technical data and other information (such as code suspense date and procurement history) to permit acquisition in accordance with the assigned AMC/AMSC (see E-105(d)(6)).
(7) Ensure that appropriate surveillance is given to first time breakout parts.
(d) Breakout program managers shall be responsible for—
(1) Initiating the breakout process during the early phases of development and continue the process during the life of the part;
(2) Considering the need for contractor technical information codes (CTICs) and, when needed, initiating a contract data requirement;
(3) Identifying, selecting, and screening in accordance with Part 3 of this appendix;
(4) Assigning an AMC/AMSC, using all available data, including CTICs;
(5) Responding promptly to a request for evaluation of additional sources or a review of assigned codes. An evaluation not completed prior to an immediate buy shall be promptly completed for future buys; and
(6) Documenting all assignments and changes, to include rationale for assigning the chosen code, in a permanent file for each part. As a minimum, the file should identify the engineering support activity, cognizant design control activity, actual manufacturer, prime contractor, known sources of supply, and any other information needed to support AMC/AMSC assignments.
(e) Contracting officers responsible for the acquisition of replenishment parts shall—
(1) Consider the AMC/AMSC when developing the method of contracting, the list of sources to be solicited, the type of contract, etc.; and
(2) Provide information which is inconsistent with the assigned AMC/AMSC (e.g., availability of technical data or possible sources) to the activity responsible for code assignment with a request for timely evaluation of the additional information. An urgent immediate buy need not be delayed if an evaluation of the additional information cannot be completed in time to meet the required delivery date.
This part provides parts breakout codes and prescribes responsibilities for their assignment and management.
Three types of codes are used in the breakout program.
The following codes shall be assigned by DoD activities to describe the results of the spare parts breakout screening:
(a)
(b)
(c)
(d)
(e)
(f)
The following codes shall be assigned by DoD activities to further describe the acquisition method code. Valid combinations of AMCs/AMSCs are indicated in paragraphs (a) through (z) of this subsection and summarized in Exhibit I.
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
(k)
(l)
(m)
(n)
(o)
(p)
(q)
(r)
(s)
(t)
(u)
(v)
(w)
(x)
(y)
(z)
The following two digit alpha codes shall be used by contractors, when contractor's assistance is requested. These codes are assigned in accordance with the current version of MIL-STD-789 and shall be considered during the initial assignment of an AMC/AMSC. For spare parts breakout, requirements for contractor assistance through CTIC submission shall be accomplished as stated in Part 4 of this appendix. Each CTIC submitted by a contractor must be accompanied by supporting documentation which justifies the proposed code. These codes and supporting documentation, transmitted by DD Form 1418, Contractor Technical Information Record, and DD Form 1418-1, Technical Data Identification Checklist, are useful not only for code assignment during acquisition coding conferences, but also for personnel conducting both full and limited screening of breakout candidates. Personnel conducting full and limited screening of breakout candidates should use the supporting documentation provided with CTICs as a source of information. However, they should not allow this information to substitute for careful analysis and further investigation of the possibilities of acquiring a part through competition or by direct purchase. The definitions for CTICs are—
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
The purpose of AMC/AMSC assignments is to provide the best possible technical assessment of how a part can be acquired. The technical assessment should not be based on issues such as: are the known sources actual manufacturers, or are there two actual manufacturers in existence; but rather on factors such as the availability of adequate technical data, the Government's rights to use the data, technical restrictions placed on the hardware (criticality, reliability, special testing, master tooling, source approval, etc.) and the cost to breakout vice projected savings. In cases where there is additional technical information which affects the way a part can be acquired, it should be made available to the contracting officer, with the AMC/AMSC. Concerning the assignment of AMCs and AMSCs, it is DoD policy that—
(a) The assignment of AMC/AMSCs to parts is the responsibility of the DoD component introducing the equipment or system for which the parts are needed in the inventory. Subsequent screening is the responsibility of the DoD component assigned technical responsibility.
(b) When two or more AMSCs apply, the most technically restrictive code will be assigned.
(c) Restricted combinations of AMC/AMSCs are reflected in the AMSC definitions. The Defense Logistics Information Service will reject invalid code combinations, as shown in Exhibit I, submitted for entry into the Federal catalog program (see E-204.2).
(d) One-time acquisition of a part by a method other than indicated by the code does not require a change to the AMC (e.g., when only one of a number of sources can meet a short delivery date, or when only one manufacturing source is known but acceptable surplus parts are available from other sources).
(e) After the first acquisition under AMC 2 or 4, the AMC shall be recoded 1 or 3 respectively.
(f) Both full and limited screening will result in the assignment or reassignment of an AMC/AMSC. This assignment shall be based on the best technical judgment of breakout personnel and on information gathered during the screening process.
(g) A part need not be coded as noncompetitive based on an initial market survey which only uncovers one interested source. If the Government has sufficient technical data in its possession to enable other sources to manufacture an acceptable part, and there are no technical restrictions on the part which would preclude other sources from manufacturing it, the part should be coded competitive.
(a)
(b)
Use the Federal catalog program formats, set forth in DoD Manual 4100.39-M, Defense Integrated Data System (DIDS) Procedural Manual, communication media and operating instructions as augmented by this appendix to disseminate AMCs and AMSCs.
(a) The Defense Logistics Information Service (DLIS) will—
(1) Receive and disseminate AMCs and AMSCs for each national stock number (NSN) to all appropriate Government activities in consonance with scheduled Federal catalog program computer cycles;
(2) Make the AMCs and AMSCs a part of the data bank of NSN item intelligence;
(3) Perpetuate the codes in all subsequent Federal catalog program transactions; e.g., entry of new NSNs and Federal supply code (FSC) changes; and
(4) Reject invalid code combinations submitted for entry into the Federal catalog program.
(b) DoD activities responsible for the assignment of AMCs and AMSCs will—
(1) Transmit assigned codes for each NSN through normal cataloging channels to DLIS under existing Federal catalog program procedures; and
(2) Notify DLIS by normal Federal catalog program maintenance procedures when a change in coding is made.
This part sets forth procedures for the identification, selection, and screening of parts.
The breakout process should begin at the earliest possible stage of weapon systems acquisition. Generally, a provisioned part will require subsequent replenishment. Provisioning or similar lists of new parts are, therefore, the appropriate bases for selecting parts for screening. This is not to imply that breakout must be done on all items as part of the provisioning process. Priorities shall be applied to those parts offering the greatest opportunity for breakout and potential savings. The major factors in making this determination are—
(a) The unit price;
(b) The projected quantity to be purchased over the part's life cycle; and
(c) The potential for screening to result in a part being successfully broken out, e.g., item stability, cost, and completeness of technical data, etc.
Annually, lists shall be prepared that identify all parts projected for purchase during the subsequent 12-month period. Priority should be given to those parts with the greatest expected return given their annual buy value, life cycle buy value, and likelihood of successful breakout, given technical characteristics such as design and performance stability and the availability of technical data. Parts with an expired suspense date or a suspense date which will expire during the forecast period (see E-203(b)), need only be subjected to the necessary steps of the full screening procedure (see E-303). Parts with a valid code that will not expire during the forecast period need not be screened. Parts coded 0O shall be selected for full screening.
An immediate buy requirement will be identified by the user or the item manager in consonance with department/agency regulations. When an immediate buy requirement meeting the screening criteria (see E-104(b)) is generated for a part not assigned a current AMC/AMSC, the part shall be promptly screened in accordance with either the full or limited screening procedures (see E-303 and E-304).
Whenever an AMC/AMSC is suspected of being inaccurate by anyone, including the contracting officer, a rescreening shall be conducted for that part. Suspect codes include codes composed of invalid combinations of AMCs and AMSCs, those which do not truly reflect how a part is actually being acquired, and those suspected of being more restrictive than necessary for the next buy.
(a) Screening procedures include consideration and recording of the relevant facts pertaining to breakout decisions. The objective of screening is to improve the acquisition status by determining the potential for competition, or purchase from an actual manufacturer. Consideration of any reasonable approach to establishing competition should be an integral part of the breakout process.
(b) Screening procedures may vary depending on circumstances related to the parts. No set rules will provide complete guidance for making acquisition method decisions under all conditions encountered in actual practice. An informed coding decision can be made without following the procedures step by step in every case.
(c) Activities involved in screening are encouraged to develop supplemental procedures which prove effective in meeting this regulation's objectives. These procedures should be tailored to the particular activity's operating environment and the characteristics of the parts for which it is responsible. Nevertheless, care should be taken in all cases to assure that—
(1) Responsible judgment is applied to all elements involved in the review of a part;
(2) The necessary supporting facts are produced, considered, and recorded in the breakout screening file. The breakout screening file contains technical data and other documents concerning screening of the part;
(3) All cost effective alternatives are considered for establishing competition, or purchase from an actual manufacturer (see E-105(d)(6)); and
(4) When possible, the sequence of the review allows for accomplishing several screening steps concurrently.
(d) Contractor participation in the decision making process extends only to providing technical information. This technical information is provided by supporting documentation (DD Forms 1418, Contractor Technical Information Record, and DD Form 1418-1, Technical Data Identification Checklist) which includes the CTIC assignment. Government personnel shall substantiate the breakout decision by reference to the CTIC and by careful review of the supporting documentation. However, the CTIC provides guidance only, and it should be used as one of the inputs to arrive at an acceptable AMC and AMSC coding.
(e) Contractor's technical information furnished in accordance with MIL-STD-789 may indicate areas requiring additional research by the Government before screening can be completed. Seldom will industry's contribution to the screening process enable the Government to assign an AMC or AMSC without additional review.
(f) During the screening process, it may be appropriate to communicate with industry, particularly potential manufacturers of a part, to determine the feasibility of establishing a competitive source and to estimate the costs and technical risks involved.
(g) Coding conferences with industry shall be documented.
(h) Screening may disclose a part is not suitable for competitive acquisition, but it may be possible to breakout the part for direct purchase from the actual manufacturer or to establish a second source. Parts particularly suited to direct purchase are those where neither the design control activity nor the prime contractor contribute additional value or whose data belong to the actual manufacturer and will not be acquired by the Government, and where that manufacturer exercises total responsibility for the part (design and quality control, testing, etc.), and where additional operations performed by the prime contractor can be performed by the actual manufacturer or by the Government.
(i) For each part that is screened, a file shall be established to document and justify the decisions and results of all screening effort (see E-105(d)(6)).
(j) Full and limited screening procedures are two elements of breakout programs. Other spare parts initiatives to enhance breakout are reverse engineering, bailment, data rights challenges, and publication of intended buy lists. Integration of other initiatives within the screening processes developed at each activity is encouraged.
(a) Full screening procedures should be developed so that the potential is fully evaluated for establishing competition or purchase from an actual manufacturer. Also, full screening procedures should facilitate accurate and consistent acquisition method code assignment. It is expected that each activity will develop its own operational screening procedures. A general model, full screening decision process is provided below to support the development of activity level procedures and to provide guidance regarding the general scope of these procedures. The full screening procedures involve 65 steps in the decision process, and are divided into the following phases—
(1) Data collection;
(2) Data evaluation;
(3) Data completion;
(4) Technical evaluation;
(5) Economic evaluation; and
(6) Supply feedback.
(b) The six phases describe different functions that must be achieved during screening. The nature of the screening process does not permit clear distinction of one phase from another. Further, the order of performance of these phases may not correspond to the order listed here. In fact, the phases will often overlap and may be performed simultaneously. Their purpose is to identify the different functions comprising the screening process.
(c) A summary flow chart of the decision steps is provided as Exhibit II to assist in understanding the logical order of the full screening steps for various conditions. Use of the flow chart in connection with the text that follows is essential to fully understand the order of the steps in the process.
(a) Assemble all available data and establish a file for each part. Collect identification data, relevant data obtained from industry, contracting and technical history data and current status of the part, including—
(1) Normal identification required for cataloging and standardization review;
(2) All known sources;
(3) Historical contracting information, including the more recent awards, date of awards, and unit price(s) for the quantities prescribed;
(4) Identification of the actual manufacturer(s), the latest unit price and the quantity on which the price is based. (When the actual manufacturer is not the design control activity, the design control activity may be consulted to ensure the latest version of the item is being procured from the actual manufacturer);
(5) Identification of the activity, Government or industry, having design control over the part and, if industry, the cognizant Government engineering activity;
(6) The expected life in the military supply system;
(7) Record of any prior review for breakout, with results or findings; and
(8) Annual demand.
(b) In the case of complex items requiring large numbers of drawings, collection of a reasonable technical data sample is sufficient for the initial technical data evaluation phase (steps 2-14).
(a) Data evaluation is crucial to the whole review procedure. It involves determination of the adequacy of the technical data package and the Government's rights to use the data for acquisition purposes.
(b) The data evaluation process may be divided into two stages—
(1) A brief but intensive analysis of available data and documents regarding both technical matters and data rights, leading to a decision whether to proceed with screening; and
(2) If the decision is to proceed with screening, further work is necessary to produce an adequate technical data package, such as research of contract provisions, engineering work on data and drawings, and requests to contractors for additional data.
(c) The steps in this phase are—(1)
(2)
(i) The questions in step 2 and 3 are not exclusive. The incorporation in a drawing of contract provisions reserving rights to the manufacturer, either in the whole design or in certain manufacturing processes, would establish a clear affirmative answer to step 3 where there is substantiating Government documentation. Parts not in this group shall be retained for further processing (see step 20). Data rights that cannot be substantiated shall be challenged (see DFARS Part 227, validation procedures).
(ii) In the case of clear contractor ownership of rights, proceed with steps 4 and 5.
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(a) The data completion phase involves acquiring or developing the missing elements of information to reach a determination on both adequacy of the technical data package and the restriction of rights to data. It may involve various functional responsibilities, such as examination of past contracts, queries directed to industry or to other Government agencies, inspection of the part, reverse or other engineering work to develop drawings and write specifications, arrangements with the present source for licensing or technical assistance to new manufacturers, and negotiations for purchase of rights to data. Additional research and information requests should be expeditiously initiated on those parts where there is a reasonable expectation of breakout. Because this phase is time-consuming, it should take place concurrently with other phases of the review.
(b) At the beginning of the data completion phase, the part falls into one of the following four steps—
(1)
(2)
(3)
(4)
(c)
(d)
(1) Where drawings and data bear legends which warn of copyright or patent rights, the effect of such legends shall be resolved according to law and policy; however, the existence of patent or copyright restrictions does not per se preclude securing competition with respect to the parts described (see FAR Subpart 27.3/DFARS Subpart 227.3).
(2) If the technical data bears legends which limit the Government's right to use the data for breakout and it is determined that reasonable grounds exist to question the current validity of the restrictive markings, the contracting officer will be notified to initiate the validation procedures at DFARS Subpart 227.4.
(3) Where drawings and data are unmarked and, therefore, free of limitation on their use, they shall be considered available for use in acquisition, unless the acquiring office has clear evidence to the contrary (see DFARS Subpart 227.4).
(4) The decision process in situations described in paragraphs (d) (1), (2), and (3) of this subsection requires the exercise of sound discretion and judgment and embraces legal considerations. In no case shall a decision be made without review and approval of that decision by legal counsel.
(5) If the validation procedures in paragraph (d)(2) of this subsection establish the Government's right to use the data for breakout, the Government shall attempt to obtain competition pursuant to the decisions resulting from concurrent technical and economic evaluation.
(e)
(a)
(2) Certain manufacturing conditions may reduce the field of potential sources. However, these conditions do not justify the restriction of competition by the assignment of restrictive AMCs for the following reasons—
(i)
(ii)
(iii)
(b)
(2)
(3)
(4)
(5)
(6)
(8)
(9)
(10)
(11)
(i) If a qualified source is currently in existence, the review should consider who will be responsible for qualification in the event of competitive acquisition. If qualification testing is such that it can be performed by the selected source under a preproduction or first article clause in the contract, the costs of initial approval should be reflected in the offers received. If the part requires initial qualification tests by some other agency such as the present prime contractor, the Government, an independent testing agent outside the Government, or by technical facilities within the departments, out-of-pocket costs may be incurred if the part is competed. An estimate of qualification costs should then be made and recorded in such cases.
(ii) Where facilities within the Government are not adequate for testing or qualification, or outside agencies such as the equipment contractor cannot or will not do the job, the economics of qualification may be unreasonable, and a narrative statement of these facts should replace the cost estimate. Whenever possible, such as in the case of engine qualification tests, economy of combined qualification tests should be considered.
(c)
(1) Develop the same quality control and inspection capability in the manufacturer's plant;
(2) Assume the responsibility for quality; or
(3) Undertake to obtain the quality assurance services from another source, possibly the prime contractor.
(4)
(5)
(i) A new source shall be considered if—
(A) Any essential responsibility (e.g., burn-in, reliability, maintainability) retained by the prime contractor for the part and its relationship to the end item can be eliminated, shifted to the new source, or assumed by the Government;
(B) The prime contractor will provide the needed quality assurance services;
(C) The Government can obtain competent, impartial services to perform quality assurance responsibility; or
(D) The new source can maintain an adequate quality assurance program, inspection system, or inspection appropriate for the part.
(ii) If the prime contractor has responsibility for quality that a new source cannot assume or obtain, or that the Government cannot undertake or eliminate, consideration of the new source is precluded.
(d)
(2)
(3)
(4)
(a) Economic evaluation concerns identification and estimation of breakout savings and direct cost offsets to breakout. The economic evaluation phase is composed of the three segments detailed in paragraphs (b) through (d) of this subsection.
(b)
(2)
(3)
(c)
(1)
(i) Step 41. Estimate the cost to the Government for tooling or special equipment.
(ii) Step 42. Estimate the cost, if any, to the Government for qualifying the new source.
(iii) Step 43. Estimate the cost, if any, to the Government for assuring quality control, or the cost of contracting for quality control.
(iv) Step 44. Estimate the cost to the Government for purchasing rights to data.
(v) Step 45. Add estimated total direct costs to the Government to breakout the item.
(2)
(ii) Step 47. If the answer is yes in step 46, add performance specification breakout cost estimate elements to the result of step 45. The addition of an unknown number of nonstocked parts which must be stocked by the supply system for repairs is a significant element of cost associated with the decision to compete a performance specification assembly. (The same situation does not arise with respect to a design specification assembly since virtually all spare parts used to repair such an assembly are essentially identical to parts already in the assembly.) The cost of introducing these nonstocked parts into the system includes—
(A) Additional catalog costs. The number of nonstocked parts forecasted to be in the competed assembly, multiplied by the variable cost of cataloging per line item.
(B) Additional bin opening costs.
The number of nonstocked parts forecasted to be in the competed assembly, multiplied by the variable cost of a bin opening at each of the locations where the part is to be stocked.
(C) Additional management costs. The number of nonstocked parts forecasted to be in the competed assembly, multiplied by the variable cost of management per line item.
(D) Additional technical data costs. The cost of a new set of technical data for the competed assembly, including the variable expenses of its production, reproduction, and distribution.
(E) Additional repair tools and test equipment costs. The costs of additional special tools and test equipment not otherwise required by the existing assembly.
(F) Additional logistics support costs. The costs associated with the new item such as spare and repair parts, technical manuals, and training.
(d)
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(a) The supply feedback phase of the analysis is the final screening phase for breakout parts. This phase in completed for all AMC 2 parts to determine if sufficient time is available to breakout on the immediate buy and to communicate this information to the inventory manager responsible for the requirement. First, all additional time factors required to breakout the part are added. Total time is subtracted from the immediate and future buy date and the result compared to the current date. (Note: Not all time factors listed apply to each part screened.) If the result is the same or earlier than the required contract date, the part is coded competitive and action is begun to qualify additional sources as necessary. If the result is later than the required contract date, action to compete the immediate buy quantity should be initiated if the inventory manager can find some means of accepting later delivery. If this is impossible, the appropriate records should be annotated for competitive acquisition of the next replenishment buy quantity. If late delivery is acceptable, the inventory manager should compute requirements for the part and initiate an appropriate purchase requisition.
(b)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(a) Limited screening procedures are only appropriate when the full screening process cannot be completed for a part in sufficient time to support an immediate buy requirement. If limited screening does not result in a competitive AMC and the part is characterized by a high buy value and high buy quantity in the annual buy forecast, full screening procedures shall be immediately initiated.
(b) Limited screening procedures cover only the essential points of data and technical evaluations more completely described in full screening procedures (see E-303). Extensive legal review of rights or technical review of data is not required; nor is backup information on type and extent of qualification testing, quality control procedures and master tooling required. A summary flow chart of the limited screening decision steps is provided at Exhibit III.
(c) The limited screening decision steps are followed sequentially if the answer to the question in each step is affirmative. If any step is answered in the negative, proceed directly to step 10.
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(11)
(a) Contractor's assistance in screening shall be requested on provisioned and replenishment parts after consideration of the benefit expected from the contractor's technical information and the cost to the Government of obtaining such assistance.
(b) Contractor's assistance shall not be requested for parts covered by Government/industry specifications, commercially available parts or parts for which data is already available.
(c) Arrangements entered into with contractor to obtain technical information shall provide that—
(1) Contractors will exert their best effort to make impartial technical evaluations using applicable technical data and the experience of competent personnel; and
(2) No costs to the Government will be incurred for duplicate screening of parts.
(a) Contractor's technical evaluation for the screening process shall be required contractually by incorporating MIL-STD-789, which delineates the contractor's responsibilities and procedures and prescribes use of the contractor DD Form 1418, Technical Information Record, and the DD Form 1418-1, Technical Data Identification Checklist, a copy of each document listed on DD Form 1418-1, and other substantive data that was used in developing the contractor's recommendations.
(b) When MIL-STD-789 is incorporated in a contract, the DD Form 1423, Contract Data Requirements List, shall specify the requirement for the submission of DD Form 1418, Technical Information Record, and DD Form 1418-1, Technical Data Identification Checklist, in accordance with MIL-STD-789.
This part prescribes reports regarding the breakout program which cannot be obtained from other sources. These reports are used to evaluate the effectiveness of breakout programs, establish a baseline for all spare part acquisitions, and identify trends in spare parts acquisition.
(a)
(b)
(a) Departments and agencies shall maintain and forward semi-annual reports. The second semi-annual report in a fiscal year shall reflect cumulative totals for the current fiscal year using the formats in Exhibits IV and V.
(b) The reports will be due no later than 45 days after the end of each period designated.
(c) Submissions will be made to the Assistant Secretary of Defense (Production and Logistics), ATTN: Deputy Assistant Secretary for Logistics.
(a)
(1) Enter reporting activity name, fiscal year, and period ending.
(2) For each AMC/AMSC listed, enter the number of different NSNs for which screening was completed during the period. Show zeros where applicable. This should be done for both full and limited screening.
(3) Report the total costs of the breakout program incurred for the period. Although this will be primarily labor costs, it should also include appropriate prorated costs of ADP services, office overhead, data retrieval service costs, etc. (see E-303.5).
(b)
(1) Enter reporting activity name, fiscal year, and period ending.
(2) For each AMC/AMSC listed, enter the number of different NSNs purchased during the current fiscal year and their extended dollar value.
(3) Report the actual breakout program savings or cost avoidances as measured by completed acquisition (not anticipated acquisitions). Price differentials should be measured on each acquisition where a breakout action has taken place. They should equal the difference between the previous contract unit price and the current contract unit price, times the number of units purchased.
Copies of Exhibit II can be obtained from: Defense Acquisition Regulations System, OUSD (AT&L), 3062 Defense Pentagon, Washington, DC 20301-3062; datafax (703) 602-0350.
This appendix identifies the activity address numbers to be used with the uniform procurement instrument identification numbering system prescribed in DFARS subpart 204.70.
(a) Activities coding solicitations, contracts and related instruments shall use only those codes assigned by their respective department/agency activity address monitor(s).
(b) The six-character code is used in the first six positions of the procurement instrument identification number (PIIN). When required, activities also will be assigned a two position code. The two position code is used in the first two positions of the call/order serial number.
(c) Activity address monitors are—
All other Defense agencies will forward requests for Appendix G maintenance to the Department of the Army, OSA(RDA)-PA.
* The Navy and Marine Corps Activity Address Monitor for assignment of two-character call/order serial numbers is: Office of the Assistant Secretary of the Navy (RD&A), 2211 South Clark Place, Crystal Plaza 5, Room 506, Arlington, VA 22202-3738.
(a) The Defense Logistics Agency, DLA-PS, Cameron Station, Alexandria, VA 22304-6100 is the executive agent for maintenance of six and two character code assignments. The executive agency distributes blocks of two character codes to department/agency activity address monitors for further assignment.
(b) Contracting activities submit requests for assignment of or changes in either the six character or two character codes to their activity address monitor in accordance with department/agency procedures. Activity address monitors—
(1) Approve request for additions, deletions, or changes;
(2) Notify the executive editor, Defense Acquisition Regulations System, OUSD(AT&L)DP(DAR), 3062 Defense Pentagon, Washington, DC 20301-3062; and
(3) Provide a copy of the notification to the executive agent.
(c) A copy of the appendix G data base is available on tape or MS-DOS compatible floppy diskettes from the executive agent.
Bolling AFB, DC 20332-0305
This appendix provides uniform debarment and suspension procedures to be followed by all debarring and suspending officials.
Contractors will be notified of the proposed debarment or suspension in accordance with FAR 9.406-3 or 9.407-3. A copy of the record which formed the basis for the decision by the debarring and suspending official will be made available to the contractor. If there is a reason to withhold from the contractor any portion of the record, the contractor will be informed of what is withheld and the reasons for such withholding.
There are two distinct proceedings which may be involved in the suspension or debarment process. The first is the presentation of matters in opposition to the suspension or proposed debarment by the contractor.
The second is fact-finding which occurs only in cases in which the contractor's presentation of matters in opposition raises a genuine dispute over one or more material facts. In a suspension action based upon an indictment or in a proposed debarment action based upon a conviction or civil judgment, there will be no fact-filling proceeding concerning the matters alleged in the indictment, or the facts underlying the convictions or civil judgment. However, to the extent that the proposed action stems from the contractor's affiliation with an individual or firm indicted or convicted, or the subject of a civil judgment, fact-finding is permitted if a genuine dispute of fact is raised as to the question of affiliation as defined in FAR 9.403.
(a) In accordance with FAR 9.406-3(c) and 9.407-3(c), matters in opposition may be presented in person, in writing, or through a representative. Matters in opposition may be presented through any combination of the foregoing methods, but if a contractor desires to present matters in person or through a representative, any written material
(b) An in-person presentation is an informal meeting, nonadversarial in nature. The debarring and suspending official and/or other agency representatives may ask questions of the contractor or its representative making the presentation. The contractor may select the individuals who will attend the meeting on the contractor's behalf; individual respondents or principals of a business firm respondent may attend and speak for themselves.
(c) In accordance with FAR 9.406-3(c) and 9.407-3(c), the contractor may submit matters in opposition within 30 days from receipt of the notice of suspension or proposed debarment.
(d) The opportunity to present matters in opposition to debarment includes the opportunity to present matters concerning the duration of the debarment.
(a) The debarring and suspending official will determine whether the contractor's presentation has raised a genuine dispute of material fact(s). If the debarring and suspending official has decided against debarment or continued suspension, or the provisions of FAR 9.4 preclude fact-finding, no fact-finding will be conducted. If the debarring and suspending official has determined a genuine dispute of material fact(s) exists, a designated fact-finder will conduct the fact-finding proceeding. The proceeding before the fact-finder will be limited to a finding of the facts in dispute as determined by the debarring and suspending official.
(b) The designated fact-finder will establish the date for a fact-finding proceeding, normally to be held within 45 working days of the contractor's presentation of matters in opposition. An official record will be made of the fact-finding proceeding.
(c) The Government's representative and the contractor will have an opportunity to present evidence relevant to the facts at issues. The contractor may appear in person or through a representative in the fact-finding proceeding.
(d) Neither the Federal Rules of Evidence nor the Federal Rules of Civil Procedure govern fact-finding. Hearsay evidence may be presented and will be given appropriate weight by the fact-finder.
(e) Witnesses may testify in person. Witnesses will be reminded of the official nature of the proceeding and that any false testimony given is subject to criminal prosecution. Witnesses are subject to cross-examination.
All timing requirements set forth in these procedures may be extended by the debarring and suspending official for good cause.
(a) Written findings of fact will be prepared by the fact-finder as mandated by FAR 9.406-3(d)(2)(i) and 9.407-3(d)(2)(i).
(b) The fact-finder will determine the disputed fact(s) by a preponderance of the evidence. A copy of the findings of fact will be provided to the debarring and suspending official, the Government's representative, and the contractor.
(c) The debarring and suspending official will determine whether to continue the suspension or to debar the contractor based upon the entire administrative record, including the findings of fact.
(d) Prompt written notice of the debarring and suspending official's decision will be sent to the contractor and any affiliates involved, in compliance with FAR 9.406-3(e) and 9.407-3(d)(4).
(a) This Appendix I to 48 CFR Chapter 2 implements the Pilot Mentor-Protege Program (hereinafter referred to as the “Program”) established under Section 831 of Public Law 101-510, the National Defense Authorization Act for Fiscal Year 1991 (10 U.S.C. 2302 note). The purpose of the Program is to—
(1) Provide incentives to major DoD contractors, performing under at least one active approved subcontracting plan negotiated with DoD or another Federal agency, to assist protege firms in enhancing their capabilities to satisfy DoD and other contract and subcontract requirements;
(2) Increase the overall participation of protege firms as subcontractors and suppliers under DoD contracts, other Federal agency contracts, and commercial contracts; and
(3) Foster the establishment of long-term business relationships between protege firms and such contractors.
(b) Under the Program, eligible companies approved as mentor firms will enter into mentor-protege agreements with eligible protege firms to provide appropriate developmental assistance to enhance the capabilities of the protege firms to perform as subcontractors and suppliers. According to the law, DoD may provide the mentor firm with either cost reimbursement or credit against applicable subcontracting goals established under contracts with DoD or other Federal agencies.
(c) DoD will measure the overall success of the Program by the extent to which the Program results in—
(1) An increase in the dollar value of contract and subcontract awards to protege firms (under DoD contracts, contracts awarded by other Federal agencies, and commercial contracts) from the date of their entry into the Program until 2 years after the conclusion of the agreement;
(2) An increase in the number and dollar value of subcontracts awarded to a protege firm (or former protege firm) by its mentor firm (or former mentor firm);
(3) An increase in subcontracting with small disadvantaged business (SDB) and women-owned small business (WOSB) concerns in industry categories where SDBs and WOSBs traditionally have not participated within the mentor firm's vendor base;
(4) The involvement of emerging SDB protege firms in the Program; and
(5) An increase in the employment level of protege firms from the date of entry into the Program until 2 years after the completion of the agreement.
(d) This policy sets forth the procedures for participation in the Program applicable to companies that are interested in receiving—
(1) Reimbursement through a separate contract line item in a DoD contract or a separate contract with DoD; or
(2) Credit toward applicable subcontracting goals for costs incurred under the Program.
A small disadvantaged business whose size is no greater than 50 percent of the Small Business Administration (SBA) numerical size standard applicable to the North American Industry Classification System (NAICS) code for the supplies or services that the protege firm provides or would provide to the mentor firm.
An institution determined by the Secretary of Education to meet the requirements of 34 CFR 608.2. The term also means any nonprofit research institution that was an integral part of such a college or university before November 14, 1986.
An institution meeting the definition of “Minority Institution” at FAR 26.301.
(a) At any time between October 1, 1991, and September 30, 2002, companies interested in becoming mentor firms that want to take credit toward applicable subcontracting goals for costs incurred for providing developmental assistance to one or more protege firms must apply to DoD for participation in the Program pursuant to the application process set forth at I-106(a).
(b) At any time between October 1, 1991, and September 30, 2002, companies interested in becoming mentor firms that are able to identify funding from a DoD program manager(s) to provide developmental assistance to one or more protege firms must apply to DoD for participation in the Program, pursuant to the application process set forth at I-106(d).
Activities under the Program may occur only during the following periods:
(a) From October 1, 1991, until September 30, 2002, companies that have been approved for participation in the Program as mentor firms pursuant to I-102, General Procedures, may enter into mentor-protege agreements, pursuant to I-107, Mentor Protege Agreements.
(b) From October 1, 1991, until September 30, 2005, DoD may reimburse a mentor firm's costs of providing developmental assistance to its protege firm only if a DoD program manager has identified the funding for such costs and—
(1)(i) For mentor-protege agreements entered into prior to October 1, 1999, the mentor firm incurs such costs after DoD and the mentor firm enter into a separate contract, cooperative agreement, or other agreement; or
(ii) For mentor-protege agreements entered into on or after October 1, 1999, the mentor firm incurs such costs after DoD and the mentor firm enter into a separate contract based upon a determination by the Director, Small and Disadvantaged Business Utilization, Office of the Under Secretary of Defense (Acquisition, Technology, and Logistics) (SADBU, OUSD (AT&L)), that unusual circumstances justify using a separate contract; or
(2) The mentor firm incurs such costs pursuant to the execution of a separately priced contract line item added to a DoD contract(s).
(c) From October 1, 1991, until September 30, 2005, a mentor firm may receive credit toward the attainment of its applicable subcontracting goals, for unreimbursed costs incurred in providing developmental assistance to its protege firms, only if such costs are incurred pursuant to an approved mentor-protege agreement.
(a) An entity may qualify as a protege firm if it is—
(1)(i) An SDB concern as defined at 219.001, paragraph (1) of the definition of “small disadvantaged business concern”;
(ii) A business entity owned and controlled by an Indian tribe as defined in Section 8(a)(13) of the Small Business Act (15 U.S.C. 637(a)(13));
(iii) A business entity owned and controlled by a Native Hawaiian Organization as defined in Section 8(a)(15) of the Small Business Act (15 U.S.C. 637(a)(15));
(iv) A qualified organization employing the severely disabled as defined in Section 8064A of Public Law 102-172; or
(v) A small business concern owned and controlled by women, as defined in Section 8(d)(3)(D) of the Small Business Act (15 U.S.C. 637(d)(3)(D));
(2) Eligible for the award of Federal contracts; and
(3) A small business according to the SBA size standard for the NAICS code that represents the contemplated supplies or services to be provided by the protege firm to the mentor firm, if the firm is representing itself as a qualifying entity under paragraph (a)(1)(i) or (v) of this section.
(b) A protege firm may self-certify to a mentor firm that it meets the eligibility requirements in paragraph (a) of this section. Mentor firms may rely in good faith on a written representation that the entity meets the requirements of paragraph (a) of this section, except for a protege's status as a small disadvantaged business concern (see FAR 19.703(b)).
(c) A protege firm may have only one active DoD mentor-protege agreement.
(a) Mentor firms will be solely responsible for selecting protege firms. Mentor firms are encouraged to identify and select concerns that are defined as emerging SDB protege firms.
(b) The selection of protege firms by mentor firms may not be protested, except as in paragraph (c) of this section.
(c) In the event of a protest regarding the size or disadvantaged status of an entity selected to be a protege firm as defined in I-104(a), the mentor firm must refer the protest to the SBA to resolve in accordance with 13 CFR Part 121 (with respect to size) or 13 CFR 124 (with respect to disadvantaged status).
(d) For purposes of the Small Business Act, no determination of affiliation or control (either direct or indirect) may be found between a protege firm and its mentor firm on the basis that the mentor firm has agreed to furnish (or has furnished) to its protege firm, pursuant to a mentor-protege agreement, any form of developmental assistance described in I-107(f).
(e) If at any time pursuant to paragraph (c) of this section, the SBA determines that a protege firm is ineligible, assistance that the mentor firm furnishes to such a concern after the date of the determination may not be considered assistance furnished under the Program.
(a) On or after October 1, 1991, a company that is interested in becoming a mentor firm that is seeking credit toward applicable subcontracting goals for costs incurred under the Program must submit a request to the Director, SADBU, OUSD (AT&L), for approval as a mentor firm under the Program. The Director will evaluate the request based on the extent to which the company's proposal addresses the items listed in paragraphs (b) and (c) of this section. To the maximum extent possible, a company should limit its request to not more than 10 pages, single-spaced. A company may identify more than one protege in its request for approval under the Program. The request must include the information required in paragraphs (b) and (c) of this section and may cover one or more proposed mentor-protege relationships.
(b) A company must indicate whether it is interested in participating in the Program pursuant to I-100(d)(1) or (2) and must submit the following information:
(1) A statement that the company is currently performing under at least one active approved subcontracting plan negotiated with DoD or another Federal agency pursuant to FAR 19.702, and that the company is currently eligible for the award of Federal contracts.
(2) The number of proposed mentor-protege relationships covered by the request for approval as a mentor firm.
(3) A summary of the company's historical and recent activities and accomplishments under its small and disadvantaged business utilization program.
(4) The total dollar amount of DoD contracts and subcontracts that the company received during the 2 preceding fiscal years. (Show prime contracts and subcontracts separately per year.)
(5) The total dollar amount of all other Federal agency contracts and subcontracts that the company received during the 2 preceding fiscal years. (Show prime contracts and subcontracts separately per year.)
(6) The total dollar amount of subcontracts that the company awarded under DoD contracts during the 2 preceding fiscal years.
(7) The total dollar amount of subcontracts that the company awarded under all other Federal agency contracts during the 2 preceding fiscal years.
(8) The total dollar amount and percentage of subcontracts that the company awarded to all SDB and WOSB firms under DoD contracts and other Federal agency contracts during the 2 preceding fiscal years. (Show DoD subcontract awards separately.) If the company presently is required to submit a Standard Form (SF) 295, Summary Subcontract Report, the request must include copies of the final reports for the 2 preceding fiscal years.
(9) The number and total dollar amount of subcontracts that the company awarded to the identified protege firm(s) during the 2 preceding fiscal years (if any). (Show DoD subcontract awards and other Federal agency subcontract awards separately.)
(c) In addition to the information required in paragraph (b) of this section, companies must submit the following information for each proposed mentor-protege relationship:
(1) Information on the company's ability to provide developmental assistance to the identified protege firm and how that assistance will potentially increase subcontracting opportunities in industry categories where SDBs and WOSBs are not dominant in the company's vendor base.
(2) A letter of intent indicating that both the mentor firm and the protege firm will negotiate a mentor-protege agreement. The letter of intent must be signed by both parties and must contain the following information:
(i) The name, address, and telephone number of both parties.
(ii) The protege firm's business classification, based upon the NAICS code(s) that represents the contemplated supplies or services to be provided by the protege firm to the mentor firm.
(iii) A statement that the protege firm meets the eligibility criteria in I-104(a).
(iv) A preliminary assessment of the developmental needs of the protege firm, and the proposed developmental assistance the mentor firm envisions providing the protege firm to address those needs and enhance the protege firm's ability to perform successfully under contracts or subcontracts with DoD and other Federal agencies and commercial contracts.
(v) An estimate of the dollar amount and type of subcontracts that the mentor firm will award to the protege firm, and the period of time over which the mentor firm will make those awards.
(vi) Information as to whether the protege firm's development will be concentrated on a single major system, a service or supply program, research and development programs, initial production, or mature systems, or in the mentor firm's overall contract base.
(3) An estimate of the cost of the developmental assistance program and the period of time over which the mentor firm will provide assistance.
(d) A company that has identified Program funds to be made available through a DoD program manager must provide the information in paragraphs (b) and (c) of this section through the appropriate program manager and the cognizant Director, SADBU, to the Director, SADBU, OUSD(AT&L), with a letter signed by the appropriate program manager indicating the amount of funding that has been identified for the developmental assistance program. The company must submit a justification and endorsement from the cognizant Director, SADBU, when requesting any of the following unusual actions:
(1) Reimbursement of developmental costs in excess of $1,000,000.
(2) Reimbursement through a separate contract.
(3) A Program participation term greater than 3, but not more than 5, years.
(e) Companies seeking credit toward applicable subcontracting goals for the cost of developmental assistance, or reimbursement with funds made available by a DoD program manager, must submit four copies of the information specified in paragraphs (b) and (c) of this section to the Director, SADBU, OUSD(AT&L), ATTN: Pilot Mentor-Protege Program Manager, 1777 North Kent Street, Suite 9100, Arlington, VA 22209. Upon receipt of this information, the Director, SADBU, OUSD(AT&L), will review and evaluate each request and, to the maximum extent possible, within 30 days advise each applicant of approval or rejection of its request to become a mentor firm.
(f) A company approved as a mentor firm, either for credit or for reimbursement through funds made available by a DoD program manager may proceed with the negotiation of the mentor-protege agreement with the identified protege firm(s).
(g) Companies that apply for participation in the Program pursuant to paragraph (e) of this section, and are not approved, will be provided the reasons and an opportunity to submit additional information for reconsideration.
(h) A company may not be approved for participation in the Program as a mentor firm if, at the time of requesting participation in the Program, it is currently debarred or suspended from contracting with the Federal Government pursuant to FAR subpart 9.4.
(i) If the mentor firm is suspended or debarred while performing under an approved mentor-protege agreement, the mentor firm—
(1) May continue to provide assistance to its protege firms pursuant to approved mentor-protege agreements entered into prior to the imposition of such suspension or debarment;
(2) May not be reimbursed or take credit for any costs of providing developmental assistance to its protege firm, incurred more than 30 days after the imposition of such suspension or debarment; and
(3) Must promptly give notice of its suspension or debarment to its protege firm and the Director, SADBU, OUSD (AT&L).
(a) A signed mentor-protege agreement for each mentor-protege relationship identified under I-106(b)(2) must be submitted to the Director, SADBU, OUSD (AT&L), and approved before developmental assistance costs may be incurred. To the maximum extent possible, such mentor-protege agreements will be approved within 5 business days of receipt.
(b) Each signed mentor-protege agreement submitted for approval under the Program must include—
(1) The name, address, and telephone number of the mentor firm and the protege firm and a point of contact within the mentor firm who will administer the developmental assistance program;
(2) The NAICS code(s) that represent the contemplated supplies or services to be provided by the protege firm to the mentor firm and a statement that, at the time the agreement is submitted for approval, the protege firm, if an SDB or WOSB concern, does not exceed the size standard for the appropriate NAICS code;
(3) A developmental program for the protege firm specifying the type of assistance identified in paragraph (f) of this section that will be provided. The developmental program also must include—
(i) Factors to assess the protege firm's developmental progress under the Program, including milestones for providing the identified assistance;
(ii) The anticipated number, dollar value, and type of subcontracts to be awarded the protege firm consistent with the extent and nature of the mentor firm's business, and the period of time over which the subcontracts will be awarded; and
(iii) The dollar value of the technical assistance program, broken out per year;
(4) A statement from the protege firm indicating its commitment to comply with the requirements for reporting and for review of the agreement during the duration of the agreement and for 2 years thereafter;
(5) A program participation term for the agreement that does not exceed 3 years. Requests for an extension of the agreement for a period not to exceed an additional 2 years are subject to the approval of the Director, SADBU, OUSD (AT&L), and are contingent upon the endorsement and submission of justification for such an extension from the cognizant Director, SADBU. The justification must detail the unusual circumstances that warrant a term in excess of 3 years;
(6) Procedures for the mentor firm to notify the protege firm in writing at least 30 days in advance of the mentor firm's intent to voluntarily withdraw its participation in the Program. A mentor firm may voluntarily terminate its mentor-protege agreement(s) only if it no longer wants to be a participant in the Program as a mentor firm. Otherwise, a mentor firm must terminate a mentor-protege agreement for cause;
(7) Procedures for a protege firm to notify the mentor firm in writing at least 30 days in advance of the protege firm's intent to voluntarily terminate the mentor-protege agreement;
(8) Procedures for the mentor firm to terminate the mentor-protege agreement for cause which provide that—
(i) The mentor firm must furnish the protege firm a written notice of the proposed termination, stating the specific reasons for such action, at least 30 days in advance of the effective date of such proposed termination;
(ii) The protege firm must have 30 days to respond to such notice of proposed termination, and may rebut any findings believed to be erroneous and offer a remedial program;
(iii) Upon prompt consideration of the protege firm's response, the mentor firm must either withdraw the notice of proposed termination and continue the protege firm's participation, or issue the notice of termination; and
(iv) The decision of the mentor firm regarding termination for cause, conforming
(9) Additional terms and conditions as may be agreed upon by both parties.
(c) Mentor firms must send a copy of any termination notices to the Director, SADBU, OUSD (AT&L), the cognizant Director, SADBU, and the Defense Contract Management Agency administrative contracting officer responsible for conducting the annual performance review, and, where funding is made available through a DoD program manager, must provide a copy to the program manager and to the contracting officer.
(d) Termination of a mentor-protege agreement will not impair the obligations of the mentor firm to perform pursuant to its contractual obligations under Government contracts and subcontracts. Termination of all or part of the mentor-protege agreement will not impair the obligations of the protege firm to perform pursuant to its contractual obligations under any contract awarded to the protege firm by the mentor firm.
(e) Only developmental assistance provided after DoD approval of the mentor-protege agreement may be reimbursed.
(f) The mentor-protege agreement may provide for the mentor firm to furnish any or all of the following types of developmental assistance:
(1) Assistance by mentor firm personnel in—
(i) General business management, including organizational management, financial management, and personnel management, marketing, business development, and overall business planning;
(ii) Engineering and technical matters such as production inventory control and quality assurance; and
(iii) Any other assistance designed to develop the capabilities of the protege firm under the developmental program.
(2) Award of subcontracts under DoD contracts or other contracts on a noncompetitive basis.
(3) Payment of progress payments for the performance of subcontracts by a protege firm in amounts as provided for in the subcontract; but in no event may any such progress payment exceed 100 percent of the costs incurred by the protege firm for the performance of the subcontract. Provision of progress payments by a mentor firm to a protege firm at a rate other than the customary rate for the firm must be implemented in accordance with FAR 32.504(c).
(4) Advance payments under such subcontracts. The mentor firm must administer advance payments in accordance with FAR subpart 32.4.
(5) Loans.
(6) Investment(s) in the protege firm in exchange for an ownership interest in the protege firm, not to exceed 10 percent of the total ownership interest. Investments may include, but are not limited to, cash, stock, and contribution in kind.
(7) Assistance that the mentor firm obtains for the protege firm from one or more of the following:
(i) Small Business Development Centers established pursuant to Section 21 of the Small Business Act (15 U.S.C. 648).
(ii) Entities providing procurement technical assistance pursuant to 10 U.S.C. Chapter 142 (Procurement Technical Assistance Centers).
(iii) Historically Black colleges and universities.
(iv) Minority institutions of higher education.
(g) A mentor firm may not require a protege firm to enter into a mentor-protege agreement as a condition for award of a contract by the mentor firm, including a subcontract under a DoD contract awarded to the mentor firm.
(a) DoD will reimburse a mentor firm only for the cost of developmental assistance incurred by the mentor firm and provided to a protege firm under I-107(f)(1) and (7), and pursuant to an approved mentor-protege agreement. For agreements entered into prior to October 1, 1999, DoD will provide reimbursement only through a separate contract, cooperative agreement, or other agreement entered into between DoD and the mentor firm, awarded for the purpose of providing developmental assistance to one or more protege firms; a separately priced contract line item in a DoD contract; or inclusion of program costs in indirect expense pools. For agreements entered into on or after October 1, 1999, DoD will provide reimbursement only through a separately priced contract line item in a DoD contract; or through a separate contract if the Director, SADBU, OUSD(AT&L), determines that unusual circumstances justify reimbursement using a separate contract. No other means for the reimbursement of the costs of developmental assistance provided under I-107(f)(1) and (7) are authorized under the Program.
(b) Costs included in indirect expense pools will be reimbursed only to the extent that the costs are otherwise reasonable, allocable, and allowable.
(c) Assistance provided in the form of progress payments to a protege firm in excess of the customary progress payment rate for the firm will be reimbursed only if implemented in accordance with FAR 32.504(c).
(d) Assistance provided in the form of advance payments will be reimbursed only if the payments have been provided to a protege firm under subcontract terms and conditions similar to those in the clause at FAR 52.232-12, Advance Payments. Reimbursement of any advance payments will be made
(e) No other forms of developmental assistance are authorized for reimbursement under the Program.
(f) The total amount reimbursed to a mentor firm for costs of assistance furnished to a protege firm in a fiscal year may not exceed $1,000,000 unless the Director, SADBU, OUSD(AT&L), determines in writing that unusual circumstances justify reimbursement at a higher amount. Request for authority to reimburse in excess of $1,000,000 must detail the unusual circumstances and must be endorsed and submitted by the program manager and the cognizant Director, SADBU.
(a) Developmental assistance costs incurred by a mentor firm for providing assistance to a protege firm pursuant to an approved mentor-protege agreement, that have not been reimbursed through a separate contract, cooperative agreement, or other agreement entered into between DoD and the mentor firm, or through a separately priced contract line item added to a DoD contract, may be credited as if it were a subcontract award to that protege for determining the performance of the mentor firm in attaining an applicable subcontracting goal established under any contract containing a subcontracting plan pursuant to the clause at FAR 52.219-9, Small Business Subcontracting Plan. Unreimbursed developmental assistance costs incurred for a protege firm that is a qualified organization employing the severely disabled may be credited toward the mentor firm's small disadvantaged business subcontracting goal, even if the protege firm is not a small disadvantaged business concern.
(b) For crediting purposes only, costs that have been reimbursed through inclusion in indirect expense pools may also be credited as subcontract awards for determining the performance of the mentor firm in attaining an applicable subcontracting goal established under any contract containing a subcontracting plan pursuant to the clause at FAR 52.219-9. However, costs that have not been reimbursed because they are not reasonable, allocable, or allowable under I-108(b), will not be recognized for crediting purposes.
(c) Other costs that are not eligible for reimbursement pursuant to I-108(a) may be recognized for credit only if requested, identified, and incorporated in an approved mentor-protege agreement.
(d) The amount of credit a mentor firm may receive for any such unreimbursed developmental assistance costs must be equal to—
(1) Four times the total amount of such costs attributable to assistance provided by small business development centers, historically Black colleges and universities, minority institutions, and procurement technical assistance centers.
(2) Three times the total amount of such costs attributable to assistance furnished by the mentor's employees.
(3) Two times the total amount of other such costs incurred by the mentor in carrying out the developmental assistance program.
(e) A mentor firm may receive credit toward the attainment of an SDB subcontracting goal for each subcontract awarded for a product or a service by the mentor firm to an entity that qualifies as an SDB protege firm pursuant to I-104(a)(1)(i) through (iv). With respect to former SDB protege firm(s), a mentor may take credit for awards to such concern(s) that, except for its size would be a small business concern owned and controlled by socially and economically disadvantaged individuals, but only if—
(1) The size of such business concern is not more than two times the appropriate size standard;
(2) The business concern formerly had a mentor-protege agreement with such mentor firm that was not terminated for cause; and
(3) The credit is taken not later than October 1, 2005.
(f) Amounts credited toward applicable subcontracting goal(s) for unreimbursed costs under the Program must be separately identified from the amounts credited toward the goal resulting from the award of actual subcontracts to protege firms. The combination of the two must equal the mentor firm's overall accomplishment toward the applicable goal(s).
(g) Adjustments may be made to the amount of credit claimed under paragraphs (a) and (b) of this section if the Director, SADBU, OUSD(AT&L), determines that—
(1) A mentor firm's performance in the attainment of its subcontracting goals through actual subcontract awards declined from the prior fiscal year without justifiable cause; and
(2) Imposition of such a limitation on credit appears to be warranted to prevent abuse of this incentive for the mentor firm's participation in the Program.
(h) The mentor firm must be afforded the opportunity to explain the decline in small business subcontract awards before imposition of any such limitation on credit. In
(1) The mentor firm's overall small business participation rates (in terms of percentages of subcontract awards and dollars awarded) as compared to the participation rates existing during the 2 fiscal years prior to the firm's admission to the Program;
(2) The mentor firm's aggregate prime contract awards during the prior 2 fiscal years and the total amount of subcontract awards under such contracts; and
(3) Such other information the mentor firm may wish to submit.
(i) The decision of the Director, SADBU, OUSD (AT&L), regarding the imposition of a limitation on credit will be final.
(j) Any prospective limitation on credit imposed by the Director, SADBU, OUSD (AT&L), must be expressed as a percentage of otherwise eligible credit, will apply beginning on a specific date in the future, and will continue until a date certain during the current fiscal year.
(k) Any retroactive limitation on credit imposed by the Director, SADBU, OUSD (AT&L), must reflect the actual costs incurred for developmental assistance (not exceeding the maximum amount reimbursed).
(l) For purposes of calculating any incentives to be paid to a mentor firm for exceeding an SDB subcontracting goal pursuant to the clause at FAR 52.219-26, Small Disadvantaged Business Participation Program—Incentive Subcontracting, incentives will be paid only if an SDB subcontracting goal has been exceeded as a result of actual subcontract awards to SDBs (i.e., excluding credit under paragraphs (a), (b), and (c) of this section).
(m) Developmental assistance costs that are incurred pursuant to an approved mentor-protege agreement, and have been charged to, but not reimbursed through, a separate contract, cooperative agreement, or other agreement entered into between DoD and the mentor firm, or through a separately priced contract line item added to a DoD contract, will not be otherwise reimbursed, as either a direct or indirect cost, under any other DoD contract, irrespective of whether the costs have been recognized for credit against applicable subcontracting goals.
(n) Developmental assistance provided under an approved mentor-protege agreement is distinct from, and must 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 must be accumulated and charged in accordance with the contractor's approved accounting practices; they are not considered developmental assistance costs eligible for either credit or reimbursement under the Program.
Pursuant to FAR 31.109, approved mentor firms seeking either reimbursement or credit are strongly encouraged to enter into an advance agreement with the contracting officer responsible for determining final indirect cost rates under FAR 42.705. The purpose of the advance agreement is to establish the accounting treatment of the costs of the developmental assistance pursuant to the mentor-protege agreement prior to the incurring of any costs by the mentor firm. An advance agreement is an attempt by both the Government and the mentor firm to avoid possible subsequent dispute based on questions related to reasonableness, allocability, or allowability of the costs of developmental assistance under the Program. Absent an advance agreement, mentor firms are advised to establish the accounting treatment of such costs and address the need for any changes to their cost accounting practices that may result from the implementation of a mentor-protege agreement, prior to incurring any costs, and irrespective of whether costs will be reimbursed or credited.
(a) Mentor firms must report on the progress made under active mentor-protege agreements semiannually for the periods ending March 31st and September 30th. The September 30th report must address the entire fiscal year. Reports are due 30 days after the close of each reporting period. The report must include—
(1) Data on performance under the mentor-protege agreement, including dollars obligated, expenditures, credit taken under the Program, applicable subcontract awards under DoD contracts, developmental assistance provided, impact of the agreement, and progress of the agreement (A recommended format and guidance for this submission are available via the Internet at http://www.acq.osd.mil/sadbu/mentor_protege); and
(2) A copy of the SF 294, Subcontracting Report for Individual Contracts, for each contract where developmental assistance was credited, with a statement in Block 15 identifying—
(i) The amount of dollars credited to the applicable subcontracting goal as a result of developmental assistance provided to protege firms under the Program; and
(ii) The number and dollar value of subcontracts awarded to the protege firm(s), broken out per protege.
(3) In addition to the reporting requirements of paragraph (a)(1) of this section, for commercial companies and companies participating in the DoD Test Program for Negotiation of Comprehensive Small Business Subcontracting Plans, indicate in Block 15 of the SF 295—
(i) The total dollars credited to the applicable subcontracting goal as a result of developmental assistance provided to protege firm(s) under the Program; and
(ii) The total dollar amount of subcontracts awarded to the protege firm(s), broken out per protege.
(b) The mentor firm and the protege firm—
(1) Must provide data on the progress made by the protege firm in employment, revenues, and participation in DoD contracts during—
(i) Each fiscal year of the Program participation term; and
(ii) Each of the 2 fiscal years following the expiration of the Program participation term;
(2) Must provide the data by October 31st of each year to address the prior fiscal year; and
(3) During the Program participation term, may provide the data as part of the mentor report required by paragraph (a) of this section for the period ending September 30th.
(c) Progress reports must be submitted as follows:
(1) For agreements that provide credit toward applicable subcontracting goals for costs incurred under the Program, to the Director, SADBU, OUSD (AT&L), and the Defense Contract Management Agency (DCMA) administrative contracting officer.
(2) For agreements that provide for reimbursement of costs incurred under the Program, to the Director, SADBU, OUSD (AT&L), the contracting officer, the DCMA administrative contracting officer, the program manager, and the cognizant Director, SADBU.
The Defense Contract Management Agency will conduct annual performance reviews of the progress and accomplishments realized under approved mentor-protege agreements. These reviews must verify data provided on the semiannual reports and must provide information as to—
(a) Whether all costs reimbursed to the mentor firm under the agreement were reasonably incurred to furnish assistance to the protege firm in accordance with the mentor-protege agreement and applicable regulations and procedures; and
(b) Whether the mentor firm and protege firm accurately reported progress made by the protege firm in employment, revenues, and participation in DoD contracts during the Program participation term and for 2 fiscal years following the expiration of the Program participation term; and